Cash Flowing Opportunities in Calgary


Francois: Hello REITE club, today's guest is none other than Kim Goerz-Pasieka from Phipps Real Estate Group in Calgary. And you'll see, she's gonna share some amazing insights talking about silver, exchanging cars for down payments on houses. She has an interesting background and Sarah I'm sure you've enjoyed that conversation and you'll learn that I live for less than $400,000 a year. So there you go.

Sarah: You know what, in this podcast I had to call Francois out because he's saying that living under 400 grand is barely scraping by. So you'll tune into that. Like at the end of the day, when I hear some absurdity, I've gotta call it out, but it was hilarious. But we talk about the Alberta market. We talk about different strategies. Let's bring in Kim.

Francois: Hello, Kim and welcome to The REITE Club podcast. I'm really excited to have Kim on this evening or on the podcast because we've just closed on a deal. We're really hot off the presses. Maybe Kim, you can tell us a bit about the deal if you want to get started with that.

Kim: Sure. We'll talk about that. Thank you Francois for bringing me on. I'm very excited and very happy about your first closing in Alberta. That's awesome. It's a fourplex. It's a duplex right now, but the renovation plan for a fourplex and really good positive cash flow.

Francois: Excellent. Thank you so much, and then Kim, since we bought a deal together, I guess that leads us into, what do you do for a living Kim, if you can give us an overview.

Kim: I'm a realtor with CIR Realty. I work with the Phipps group, the investment division in Calgary and the majority of my clients are investors.

Sarah: Very cool. Are you a real estate investor yourself? If so, how did you get started with that?

Kim: Yes. I started when I was 20 years old investing in it, but I didn't really realize I was doing it. My first place I bought with no money down through ATB. They had a great special going on and I could get my first house with no money down. Did that sell, rented for a little while. I bought another house with no money down. We refinanced the year later and made that down payment of $5,000. It wasn't much. I took a real estate investing course. They started to learn what it really was.

Francois: Very cool.

Sarah: It is awesome.

Francois: How did that lead you into the next deal? It was your principal residence at first, but now you're investing. I think you're doing flips as well. What else do you do in your spare time?

Kim: Well, the second house that I bought, I developed the basement and rented it. That was like the beginnings of rental income.
When I took the investors course, I started learning about teams and people that you work with and investors and having that power of other people that can think like you around you to be able to help you get to the next level or even unlock maybe a problem that you have, maybe someone else has gone through it.

Sarah: Absolutely. Can you share, I guess what the opportunity is, what just bought a deal in Alberta, but what the opportunities might look like out in Alberta, whether it's, you looking and investing for yourself or working with clients, but I'm just curious cuz obviously every single market is different. What does Alberta have that other markets may not have from an investing stand?

Kim: I'm not sure if like a year ago we were in a recession and then for whatever reason, people started buying houses in the middle of COVID. We just started on that bandwagon. Our housing prices are quite low, which is the reason for the uptick in interest in the area where Toronto markets are quite high.

Vancouver markets are quite high. Calgary has a lot going for it. There's a lot of mass. Migration is coming towards Calgary and Edmonton, but the majority are coming towards Calgary because of the mountains.

Francois: I've seen it's a lifestyle city. That's something Natasha always says. I saw some pictures as well.
I've never been to Calgary. I have to go now very shortly. I have no choice but you could see the beautiful view of the mountains and it didn't look like you had much snow from some recent pictures. I'm like, wow, this could be interesting for living and the cost of life and all that.

Kim: It's quite warm here through the winter months. We do get our minus 20 minus 30 blips, but we have Chinooks a lot these months here. So we'll get down there for maybe a week. Then we're back up at zero 10 degrees. We've been at that for the last two weeks now. Most of our snow was gone. We've been enjoying the warm weather.

Francois: Wow. I'm buried in snow and Ottawa. We have over a meter, like in my front yard, I have to shovel and scoop it up. Calgary does sound very appealing and there's lots of work. Or you can take your job with you. A lot of people are doing that. A great store is shopping.
That's like my sport, unfortunately. I heard there's lots of good malls.

Kim: It's mine too. We have a lot of indoor malls that we can go to and we've got a couple of outdoor malls. But a lot of people just like to shop and they like to have some variety. We've got a lot of that.

Sarah: I feel like I'm the outcast here, cause I like to shop for real estate. I actually shop for clothing as little as possible. It's just never been something that's ever been my thing, like other than Lululemon, just to be comfortable, but it is quite interesting, shopping for real estate, I think is always at my alley for finding good deals and making money on your money.

What does the cash flow like on average? Obviously I think you're doing a lot of conversions and duplexes, but let's compare cash flow from maybe Ontario to Calgary or Edmonton. Does that compare like we are talking about, a significant increase in cash flow?
Like why would I wanna buy out your way in Alberta?

Kim: Basically the pricing is lower and rents aren't a whole lot different across, from one province to the other. But tenant laws are actually a big plus in Alberta. We favor the landlords here. When we have problems with our tenants, if they don't pay they are evicted.

We have a really good system where we can have rental increases. We only need to give three months notice. We put tenants on a one year lease and if they don't move out, they have to move out. They don't have a choice. We do have a really good system here of landlord and tenant laws, which does help, especially for investors. You don't wanna be caught with somebody that isn't gonna pay their rent or isn't taking care of the place and you can't get rid of them.

Sarah: I like those, the tenant laws for sure. Out your way. They are definitely more balanced, I would say. And more fair to both parties, obviously, you talk about recession a little bit and there's definitely a little bit more. I think of a real estate cycle, a shorter real estate cycle, I should say, what should we be cautious about? If swell just invested his first deal out that way, which I think is awesome. What are the things that we should be aware of, or maybe be cautious about as we're investing in that market?

Kim: Just paying attention to the real estate cycle. As you see rents come up for rentals we all still see an increase in drive for people buying houses. As those rents come up, it's like a cascade and it tees back and forth. We're still at the low end of the market.

As far as pricing goes, we've only come up a little bit in the last year, but we're starting to see markets increasing quite heavily, even in January. Just because we don't have a lot of products on the market. We're getting a lot of interest in that respect from tenants, and find it a little bit more affordable to be able to buy a house.

If they're in that kind of a position that they can, then it works better for them. Our rents are actually getting higher and higher month by month. In January, I don't expect to see them go higher, but it's going higher now than it was in the summer.

Francois: Can you give us an idea of rent? Let's say a two bedroom, one bathroom, apartment, something simple. How much would that rent for? Just to give us kind of a basis point?

Kim: There's a difference with the brand new unit or an older unit. If it was a brand new unit, a two bedroom about 1600 across the city is what you're looking at as a minimum rent.

The basement we'll be about a thousand. If it's a brand new basement, if they're older, they rent for less obviously. Plus we include our utilities as additional to the rent, so we will advertise it out as what the rents are. Then we add utilities to it. Most people are used to that here. They're okay with that. Lot of our tenants also take care of the properties. They have to shovel snow, they have to do the lawn or we'll get somebody in and then we charge them. They're quite used to it actually.

Sarah: That's great. You work with, I'm assuming a lot of investors, being one of them as well. Probably some out of town investors too, now that, there's a shortage everywhere and people are looking at, outside of their provinces, even more, what are some maybe insights or tips that you can share, for someone looking, whether it's, in Alberta could be somewhere else, somebody that's looking to buy out of province. Are there any things that you could share with them to make it an easier process as they're looking to do that?

Kim: Just make sure the numbers are working, what you pay for, what your mortgage is going to be, make sure that your costs are actually gonna still give you some money out.
After I took that investment course, I did learn about having investments. I bought a triplex in Northern Alberta and I bought two condos in Saskatchewan. My triplex actually brought in a thousand dollars of cash flow. My condos brought in $25 each. Which didn't give me a lot of cash flow, but I didn't actually put anything into it.

I took the money out, I put 5,000 down. I got 5,000 cash back. It worked out in that favor. I had taken it all out. But you still have to be careful to make sure that you're making some money on every project you're working on or what's the point.

Francois: So true. Are there better areas that you find for appreciation, like certain things that are going on? Of course, the whole city is much cheaper. Like you mentioned, rent 1600 for a brand new two bed in Ottawa. We'd be more like 2,600.
I'm sure where Sarah lives way more than that. Like how much is a two bed in the GTA, like 20, 30, 200 maybe a month?

Sarah: Really? It depends on where it is. Are we talking about Southeast Oakville? Are we talking about I don't know, somewhere up north Mississauga or Brampton, like it really depends, but yeah, I'm sure somewhere around that, it's getting quite high now.

Kim: I'm seeing that for houses actually.
In the rural suburbs, 25, 2600 plus utilities for an upper suite in a house. These are the best of the best areas, best of the best places. There's 1700 square foot houses with three bedrooms and bathroom in the master bedrooms. They're the higher end, but that's what I'm starting to see. Now, we haven't seen that for years.

Sarah: What do you enjoy buying? Even just for yourself, like investing strategy, are really looking to do.

Kim: My favorite is actually the single family home or duplex with an income suite in the basement. The reason for that is they're so liquid, they're easy to get into.

They're easy to get out of if you have problems and you need to sell that quickly. It sells a lot faster than a fourplex. Would it sell a lot faster than any multiplex wood? If I have my preference, I still like the single family homes with the suited duplex. I expect around $500 or $600 a month for income. Coming off of that after all my expenses.

Francois: That's true. That shows the difference in the market in Ottawa. Those are great, but they don't have cash flow unless you go really high end or do something special for the most part, they wouldn't have cash flow anymore. I'm sure in Oakville maybe because your rent is higher.

Sarah: It's possible Oakville. You don't have cash flow in Oakville.

Francois: Yeah. Had $2 million for two suites, maybe 1 million each can't rent it at 10,000 each.

Kim: There are things you can do in a market that has tight rents and something I did last year actually was I put a new flooring and new paint in a condo that was recently built.
It was fairly new, but the floor wasn't looking that good and put some new tenants in there and they paid top dollar for 1800 for a two bedroom, two bath condo in a building where they're typically renting around 1600.

Francois: Wow, good job. That was well worth investing in those finishes. In Alberta you have recourse. You have damages if something gets damaged. If you don't mind investing in your property.

Sarah: I will say though just to go back to places like Oakville and I have one in Burlington, I just made those like midterm rentals. Like people are just, they're furnished. They're midterm, not short term.

Once in a while, I'll rent it for a week, but usually it's I've got somebody that checked in yesterday for until may and then somebody that's upstairs, that's there until I think April or mid-March or something. But it's just like I would do all midterm rentals if I could, because it brings in the majority of the cash boost. In the portfolio, like those types of options. You don't have to worry about the landlord tenant rules.

Kim: Yes, that's a good thing. How do you find the turnover though? Do you have property managers or do you do it yourself?

Sarah: I do it myself. Okay. I have some really good cleaners.
I I do some cottage stuff as well, but I have some really good cleaners and handy people and all that good stuff, but you're even just in terms of the inventory resets, like you're not doing it as often, cuz it's not like weekend, week out type of thing, like the cottages, but yeah.
I don't know if I could do all midterm moving forward, I probably would. But how is that, is that a strategy? Is that a strategy that's out in Alberta though?

Kim: It's not a really popular one. Most people go for either, short term Airbnb kind of thing, which is tougher and tougher every month we get into it because the laws keep changing and the rules keep changing or the midterm is pretty much non-existent like anybody looking for three or six months is just not able to do it unless they're willing to pay for an Airbnb, which is a little bit higher premium yet.

We don't have a lot of it, there is definitely a demand for it, but we don't have a lot of it, but it is a definite way of getting better income or better cash flow from your property.
If that's what you're looking for.

Francois: Maybe it's something we should look at Kim.

Sarah: I actually think that mark my words today on this podcast, the midterm rental is going to be the strategy of the next five years for many markets. Ontario is one of them, I can't speak for every single market, but the markets that have these tenant roles don't make a whole lot of sense, and you can still do it on Airbnb.

Like I do my midterms through Airbnb and a discount for a monthly stay so that it makes sense for the people to stay rather than just like a daily rate, but I think that is a great next future key strategy.

Kim: Insurance companies aren't blocking the midterm rentals as much as an Airbnb style and you also get under the wire with the cities and the approvals there. That is a good strategy.

Sarah: If I'm not an accountant, but the HST as well, and we don't have bylaws of the cities as well. I don't know men. I'm going to suggest that you guys all look into this new strategy.

Kim: It's not one that we dismiss, actually. It's just one that we do talk about and we do talk to other people about it.
It depends on their strategies and what they're looking to do. It's tough to do when you're managing from afar, because it's gonna take a little bit more hands on. It's gonna need cleaning time more often. More tenant placement. That's gonna cost a little bit more as far as property management goes. If you're trying to do that, yeah. Two provinces over.

Sarah: For sure. What's next for you? What are your goals in 2022, 2023, from your investing perspective?

Kim: I plan on buying mine. First house again, I had to hit reset a couple years back. I planned on buying my first house again, and I'm gonna do some rentals on it. Also looking at buying a suited house. So F and Edmonton, actually for my sister.

Francois: She would become your tenant?

Kim: She's selling her place right now and she's leaving her husband. She needs a place to live.

Francois: Okay, perfect. It's an opportunity. Just like me. I started my real estate investing. My mom was my tenant. Now your sister that's perfect.

Sarah: My sister-in-law was our first tenant, but you know what? There's a thing though. Like we're not, we don't have to be very, let's just say we'll read like people read between the lines, but like I would not rent a family again. I put it out there.

Kim: I wouldn't rent to some of my family just saying.

Sarah: Oh, okay.

Kim: I don't rent to just anybody. My sister is actually taking care of my dad so I can help a little.

Sarah: For sure. It's you know what, it's just interesting. Like when you start mixing, investing and family, and some of the dynamic changes along the way, it's not for everybody.

I'm sure like somebody listening to this be like, I have the best story where it's been 10 years and it's amazing. Somebody else has been listening to this, like a REITE Club member might be like, oh my God, I had the worst experience. Like my sister-in-law, I think we had to renovate the entire house because they left it in such bad shape and they didn't move out after they stopped paying for 25 days. Like they're great people. Would I ever rent to them again? Hell no. So again, you just gotta figure out which family, some families work and some families don't.

Kim: My sister and I see eye to eye as far as investments go. She and I have been talking for the last several years about her getting into some investment properties and she just hasn't been able to do that yet.

Sarah: That's awesome.

Kim: We're gonna do several up there and we'll do several down here.

Francois: Sounds exciting.

Sarah: Possibly. I'm gonna put you on the spot. What about you? Would you do it again? To my mom. No, I sold the apartment with my lease and everything to my mom. Mom's boyfriend. I love mom, but just for me, it was different.
It was more. If there's any issue she would call there's a scratch in the back wall of a closet. It just went on and on. Very demanding tenant because she's mom, owe me. At some point I'm like, okay, this is enough.

Kim: I hate it.

Sarah: But it's the reality sometimes of being a real estate investor.

Kim: It is. You wanna take care of your family, but sometimes you can take better care of your family just by showing them the right path to do it for themselves.

Sarah: Absolutely.

Kim: I used to homeschool my kids when they were about eight years old. I homeschooled them and I taught them investing and I taught them how to play cash flow. I taught them how to buy their first house, not how to rent the first place. They didn't know how to do rentals, but they knew how to buy .

Sarah: I think that's interesting because, I, I did not learn it from my parents, but I learned the entrepreneurial, I think, mindset from them. I think that was helpful, but if you can have parents or if you're listening to this and you have children, you have kids right now, start teaching them young.

Are you able to share maybe some of the things that you've done along the way for them to be like, excited about it and wanna take action when they are old enough? Is there anything specific that you're like I would recommend that you really do this. I know you talked about the cash flow of the game.

Kim: When they were about eight or nine years old I started talking to them about investing and Keith Saki talks about starting up a lemonade stand. All of my kids have done that and only because they wanted to, not because I told them to. My two boys, when they were about 12 years old, lived in a brand new development area. There were a bunch of construction workers. There were no stores around. They would walk around with a wagon and pop and chips and sell it to the construction workers.

They were their best clients. Like they would walk around and sell it every day. But I had to pull the plug on it because they were fighting. They started fighting about who had to pull the wagon. I said, if you've made money, you're done. We've taught you how this works, but we're not gonna do it anymore.

I did teach them the skills of reinvesting and starting your own business and then having products to sell. Then the other part was, for the next stage was like down payment. We started buying silver. When they were very young it was a very tangible thing that they could see that was an asset that they could hold onto.

Later we sold it to help them buy a car. When they bought their car, when they were able to drive, they were buying cars that they wanted to fix. We'd used some of that silver to buy the car. I said, we can also use that silver to buy a house. They started actually using cars and silver, bought them, fixed them, flipped them.

Both of my boys actually have bought their own first houses. They're 22 and 23. They used their cars, actually. They sold a sports car to get the down payment for it. My first son is in his second home. My second son is in his first home.

Sarah: Very cool. That's amazing. Are they buying it? To, and then renovating it and then selling it for a profit or are they just buying and holding? What are they doing?

Kim: They're doing a buy and hold right now. They're just getting their feet under them as far as their jobs go. My second son is very interested in getting into Having a suited property so that he can have tenants and he can bring in money and then he's looking at buying the next property.
He's on board with that program already. My first son, his girlfriend, is not as on board with doing this, so they just want a house to live in. However, the house they just bought is actually technically set up so they could suit it if they wanted to later down the road. I think that might be a later program for them.

Francois: When they see the bills coming in, they will be motivated.

Kim: They're starting to see that this is a lot of money to go out and have to shoulder all that debt.

Francois: That's it for space you don't use most likely. If at some point they have kids, don't notice two salaries. Don't quite cut it. That's why I got into investing. You need to make like 400,000 a year to survive basicly so it's crazy. Cool, great advice. Great mom teaching.

Sarah: Wait, $400,000 a year to survive. I'm sorry. I have to call you out on that. Know you don't. You got nice clothes. You like your shopping addiction, but to survive on your terms is not to survive like the regular person. I just wanna put it out there cause someone's listening to this and be like 400 grand, like no way.

Francois: I'm buffing it. I have cut back on my bubbly. Instead of champagne, I'll go with a cheap bubbly.

Sarah: Okay. So 400 grand to live the life on your terms for sure. Lifestyle by design. Agreed not to survive. Okay. Wrong choice of words. False. What? That's it?

Francois: Sorry.

Kim: There we go.

Sarah: Just kidding. I'm not actually, I just, I don't wanna hurt your feelings. Are you good?

Francois: This is great. Totally true. I don't need 400,000. I'd be very happy if I had that much. I like to exaggerate just a smidge. I like Kim's advice like teaching your kids, buying tangible things. That's really big. Especially when they're young they don't get it like money. It's very abstract. But when they hold a piece of silver, like you said, or gold or coins or something, it's very tangible. It would. Wow. I can see how that would work. Totally.

Sarah: I think it's cool. Cause it's also a different way to invest, right? There is golden silver to buy and it's a commodity. Again, like I obviously know much more about real estate, but I think it's still good because it's not like inflation with a dollar.
I think there is still some protection against that and other things along the lines, but I think gold and silver are definitely a good additional way to diversify. So Kim, the next part of the podcasts are lightning around. I will ask you four total questions. Every guest gets the same questions. You're gonna give us the first answer that comes to mind. Are you ready?

Kim: Okay.

Sarah: All right, so here we go. Question number one, Kim, what is the best advice that you have ever received from another investor or at a networking event?

Kim: Just do it.

Francois: Cool. I love that. That's my words as well.

Kim: Yep. I was talking to an investor and I was talking to her about, she wanted to invest in the next property and she was like, I just gotta do it. I just do it. And she did. She's into her second or third property now, so good for her.

Francois: Amazing. That's great advice.

Kim: You can analyze a lot. You don't have to. You'll never get it. If you keep analyzing it.

Francois: That's it. I really like some people that'd say, you need to know about 70% of the information or 30%. I always mess it up, but one or the other, and then make your decision. Otherwise you'll be paralyzed.

Kim: If the numbers make sense, then there's no reason holding you back. Even if you're like, there's a lot of fear that comes into buying a second property because how am I gonna hold that? A lot of people are scared of that. When they actually step back and say, okay, the numbers work, I just need to trust that they're still gonna get all those emotions that you get buying a house. If they just trust that their numbers are working and things are going to work. It will work out.

Francois: I love it. Real estate is forgiving. If you hold it longer or do like Sarah to switch to midterm or something, find a way to make it work. If it's not working,

Kim: There are a lot of ways to dig it out. If you have a problem, if you have an income property that isn't making money, there are a lot of different avenues that you can make money. It's not just one.

Francois: Yes, totally. So this leads me into question number two. What is your favorite real estate investing resource? A book, a course, a club.

Kim: Oh, a resource. I focus too much on it because I'm usually talking to a lot of people and I guess my best resource is other people. When I talk to them, I get a lot of information from them as well. When I go to any meeting brain or REITE Club or anything, even Natasha's meetings, I always learn more and more on top of what I've already known. There's always an aha moment. Hey, I didn't know that.

Sarah: Yeah, absolutely. People are a great resource. They say they're the average of the five people that you spend the most amount of time with other than your family. If you have some amazing people on your side to share your ideas with that are motivating, inspiring. You are going places for sure. People a hundred percent Kim agree with you. Number three, Kim, what is the attribute that has made you most successful in your opinion?

Kim: I believe in myself, knowing that I have the knowledge to help people. I have the knowledge to do it myself. I've done it myself.
Just believing that I can move forward and I can help more people. So that is really where I. What drives me is just helping more people get what they're looking for.

Francois: That's a great story. I can testify by working with you. You're very kind and generous with your time and what like your power team and all that. Very helpful.

Kim: Thanks.

Francois: Last question. What do you typically do on a Sunday morning?

Kim: Work. If you're talking about my downtime I'll probably go for a walk around the mall. I'll go say hi to different faces. I get out and try to see new people. Take my dog for a walk. I do like to spend time in the mountains. Every chance I get, I go there. I can see them right from where I live in Airdrie, which is fantastic. They're only less than an hour away.

Sarah: Awesome. Kim, where can our REITE Club nation reach out and find out more about you?

Kim: Kim GP real

Sarah: Amazing. Awesome, Kim, thank you so much for being on the show. It was a pleasure having you on and thanks for all your awesome insights.

Kim: Thanks guys.

Francois: Thank you.

Kim: It was great talking to you.

Francois: Sarah, what did you think about Kim's experience and how she raised her boys?

Sarah: How she raised her family, I thought was awesome. Just all the different insights. It's always great. Like it is the first time Kim and I met, she just did a deal with you, a transaction. That's awesome. Yeah. Like literally you're closing on it today, which is amazing. Are you closing on it today or did you just confirm that you got it?

Francois: No, closing. We got the keys, the log box is set up, the contractors are going in tomorrow and ripping the place apart.

Sarah: Amazing. Did you do that one with the JBS or by yourself?

Francois: We could have a conversation on that. How to finance a deal with no money down. just like Kim did, but different strategy altogether and it's everywhere.

Sarah: They go on a title. You're the active partner. You're essentially coordinating doing the management piece remotely. They are coming in with financing, bringing in the money and you guys are splitting at 50 50. Is that about.

Francois: Exactly. I'm flying down to beautiful Calgary soon. I'm glad to hear that they have a Chinook. So hopefully the Chinook follows me there and it's nice and pleasant.

Sarah: I know it's like super, super warm and then super cold and then super warm. But if you go during the warm times, right now, I mean it could be fine. It's probably minus, at the time that you guys were looking to listen to this, it'll probably be warmer, but it's a lot colder today than it is in Calgary by probably 20 degrees. Anyways, on that note, I hope you guys enjoyed the podcast and don't forget to leave a rating and review. See you guys next week.

Francois: Cheers.

DJ: Thanks for listening to The REITE Club podcast, where the focus is on helping all levels of real estate investors advance to the next level and help you customize your life. Be sure to tune in next week at or wherever you listen to podcasts. If you get a few seconds, please rate the podcast, wherever you're listening, it helps the show get noticed by others like you. And we truly appreciate it. And don't forget to subscribe.