AB & BC Updates


Tim Tsai

Francois: Tim, thank you for joining us, really excited to have you on, international real estate investor. Retired himself at age 30. I thought you were still 30. It's only been a year, but he became financially free in 25 months from his first REI training. Wow. That's quite a nice resume. Welcome.

Tim: Thank you always for having me. I appreciate that.

Francois: You're in the backyard. That's a nice fence behind you.

Tim: You know what? Cat's out of the bag. I'm actually physically in Atlanta Georgia at the moment.

Francois: Cool.

Tim: Just sharing with everybody.

Francois: Going through the whole voting stuff that's happening.

Tim: No. Actually been down here for about a couple of months now. it was a vacation tour, extended property viewing tour as well.

Francois: Part of your international investing, I assume.

Tim: Absolutely. We actually came into the US market in 2013 for the very first time, sorta pulled back a little bit and then we're back in the market, very actively ourselves as of last year.

Francois: Amazing. Wow. So many opportunities. That's great. And then I guess it's late for you because Atlanta is Eastern time.

Tim: Your time.

Francois: That's it. It's kinda bedtime, not quite it depends. Great. Tonight we wanted to talk about differences between Alberta and British Columbia like trends and maximizing footprint. Because we heard a lot from Melissa and Natasha. Secondary suites, is that something in BC or is it third tertiary sweets or more because BC, I would assume is more dense.

Tim: Happy to share because I always look at it from an investor's side of things and for me personally, and something that I firmly believe in really is cash flow is everything. The same model, the same opportunity. It exists in the BC or more specifically the lower mainland market. Because that's what a lot of people refer it to as it's not going to cashflow. That's not something that we do. However, it doesn't really matter because we always go from strategy first and we pick the market.

Like most markets across, I'm going to say North America now at this point, what's happening now. That's why Melissa. Yeah, by the way, we have two people from Edmonton tonight, technically. I technically live in Edmonton. The idea though is because the property values are going up really.
If you already have a portfolio, we always encourage you. First thing you want to do is explore your refinancing process because the idea behind building a business is leveraging real estate as your vehicle is the fact that it needs to be able to cash flow and create scalability. And so what we've been doing all throughout last year, because most markets in the beginning saw a little bit of tumbling in prices, especially the Greater Metropolitan Areas like Vancouver and Toronto, especially condo prices.

But we usually don't touch condos ourselves as investors. However, we focus on a lot of single family homes and multi-family units as well. And those have all risen up in value. And once again, we always talk about the fact that you don't really want to tie yourself into a fixed mortgage. Variable is where it's at the flexibility. Okay. And so what we've been doing is we do the refinancing process so that we have cash to go and shop, or if you want to be somewhat passive and somewhat speculate, speculate a little bit, because you don't want the money to sit there and do nothing. A lot of my investor friends like to show.

My money needs to go out and get a job. And so if you refi have money sitting there and you don't want to be chasing the market, because we understand that everywhere you go, now there's a bidding war. And it's really cool to see that honestly, having been in Edmonton for a while now and having just seen the last few years, so I'm really happy with the market performance.

At the same time though, as investors, what we've been doing is that we take that cash and we take it to the lower mainland because there are so many people, even though the interest rate is low. Again, we know everybody that wants to purchase a property, whether investors or buying for principal residents, they usually need to have income credit down payment, all three criteria met before they can get lending.

We're now in that market assisting people to apply. Investment properties and principal properties through the fact that they might not be able to get enough loan to value from their primary lender. And then we can now take the money that we've refinanced out of equity that has been lifted through the market raises to go in there.

I'll share a really cool story because yesterday. We actually just picked up a property in Phoenix again, as well. And Phoenix, very much like Toronto and Vancouver went up by about 60%, six zero in the last 12 months because of COVID. We think we're crazy, they're crazier. Why? Because if you look it up, Phoenix is about 10 hours east of Silicon valley.

These are the guys that are making a million dollars on average home prices are two or $3 million. So these guys, once the work from home policy came down and they can work from home permanently. They decided that they are going to start to go somewhere else. It's the same phenomenon for Windsor, same phenomenon for the London area in Ontario.

And so they figure they can go to Phoenix, buy a house twice the size, three times as nice, but quarter of the price. And so that was what's driving it up. And so every property typically has about 30, 40 offers minimum and the listing agents, they don't even review anything. They will open the property listings on Monday.

They won't review any offers until Friday and Saturday they announce the winner. Because they will always give the top three. Now we somehow won this one simply because we told them that we could do cash buys. And so the idea is a lot of us, we understand in competitive market, this is also something else that if you're listening and I know we have an attendee Brooke who also shares something like this as well on one of the Facebook groups, which is make sure you have your ducks in a row because in a hot market sellers.

Yes, most of the time they do want top dollars. However, more often than not, they don't just want top dollars. They want people that can actually go through the transaction because of these guys. Time is money for us. Time is everything, but for them, time is money. They don't want to have to put the property back out and then have to go down second or third on their buyer's list.

Having your financing docket or package, whatever you want to call it, is going to be really amazing right now, as an investor in any market, just proving that you have the ability to back up your offer.

Francois: I love Brooke's posts. I had the chance to read it. It was quite cool how she wrote the letter and also had a huge cash deposit money order or something. It was a great strategy. And that comes from your mentoring group, I assume.

Tim: Brooke is one of the coaches on the team.

Francois: There you go. Boosting cash flow. Do you have any suggestions? You go to the Lower Mainland. You're dead set on it. No cash flow, but maybe there's things you can do. I'm sure you have some tricks up your sleeve.

Tim: I'll just share one quick thing. Basically the same idea as I was sharing earlier is that refinance. And so depending on the rate that you're getting, let's say if you're refinancing anywhere between 3% to 4%, for every a hundred thousand dollars that you take out, typically it's about $350 per month and mortgage payments.

The idea though, and remember one of the things that I mentioned is if you're not really wanting to jump in, or if you're losing out on bits on making offers, there's always another way to basically lend that money out as well. Most of the time, if you're in second position, again, we've all heard different rates from coast to coast.

Now we typically, depending on the collaterals and their personal get servicing ability and qualify qualifications. We typically lend out as investors on second positions, anywhere between 12%, all the way to 18%. And so now in the Lower Mainland market, because we're fairly safe at the moment.

Don't speculate. However, let's just look at the numbers. Technically you can buy a townhouse in the Langley Surrey area for a million dollars today and turn it around and list it for 1.1, 1.2 tomorrow. That's the market that I personally feel very safe lending into. Let's just say that even if I just pull up a hundred thousand dollars and I'm paying 350 a month on that, on the other hand, I'm lending out a hundred thousand dollars at 12% in second position, $1,200.

Right off the bat, you're gaining 850 a month in passive income just from that interest alone. This is obviously, like I said, the preface is if you're not actually winning any of the offers that you are doing at the moment.

Francois: That's great. That's a really smart way of doing it and approaching a hot market, almost overheating. Not quite, but getting up there.

Tim: Absolutely.

Francois: That's great. It's just great.

Tim: Bonding long-term and short-term plans together.

Francois: That's great. Thank you so much for sharing about your experience.