Despite a slowing property market in some areas and further expected interest rate increases the demand for real estate investment properties in Central and Western Canada has been very strong during the first quarter of 2022.
Is that the case in Winnipeg? Are house prices still reasonable or has the increased demand pushed them beyond being good cash-flowing properties?
Join local expert real estate investor Cam Rowland as they provide their insights on the Winnipeg market.
Francois: Our first presenter tonight is Cam Rowland and business owner and real estate investor he's from Winnipeg and brings us a local's perspective of the Winnipeg market. He knows the Winnipeg market quite well. You should follow his stories on social media. You'll learn a lot about the market's ups and downs.
Cam started investing in real estate in 2006. After reading Rich Dad, Poor Dad, he replaced his salaried income from his real estate holdings and quit his day job in 2010. Cam is well-versed in several real estate strategies and in five years, he grew his portfolio to over 40 doors, but only a hundred dollars per door.
That's amazing. And didn't have to qualify for any other mortgages, even better by partnering with investors for an unlimited potential for acquiring doors, increased cash flow and outstanding returns. Welcome Cam, can't wait to hear about those hundred dollar properties. That sounds amazing.
Cam: Great to see your Francois.
Francois: It's been a little while. I love following your social media as well. Make sure to share your contact information. You have a great feed on Instagram and lots of great content. Can you tell us more about the real estate market in Winnipeg? I'm very curious. I have money burning my fingers. I want to invest a hundred dollars. Who can say no to that?
Cam: Winnipeg as mentioned before, it is a hidden gem. Lots of people fly over Winnipeg when they're traveling. When they're investing, people often won't consider Winnipeg because they're not familiar with it or it's too cold. People still live here, so there's still real estate. There's just so much opportunity when you look at the major city centers across Canada.
Winnipeg is one of those major city centers. We're almost a million people, but we are probably one of the most affordable cities. In Canada, when it comes to Metro living, we've got an NHL team here, obviously CFL or CPL as well. For those who are in sports, big deals, like the NHL is a big deal here and I love the bus.
Francois: Traffic jams with hockey games. We know all about that in Ottawa and the West end.
Cam: There's a big drive here. We are a fairly large movie hub. There's a whole bunch of other things which I can get into a little bit later. The reason why I'm saying that is that there's a lot going on here in this city that is amazing for investments because we're so affordable. When I'm talking to people out in the West coast or out in your neck of the woods. Average prices are high hundreds of thousands, if not a million dollars. And the average price here is about $379,000.
Francois: Oh my goodness. The price of the garage.
Cam: Exactly and people don't recognize that. As an investor, I love this city because there's so much opportunity. The market's hot, it's continued to be hot. We can dive in a little bit more about that, with those details, but Winnipeg is a great place to invest. There are lots of people from outside of Manitoba who invest here and partner with locals, for investment and you get great returns and don't have to put out $200,000. You can put out $50,000 or $60,000.
Francois: The down payments way more achievable instead of 20% of a million is very different.
Cam: Or a hundred dollars.
Francois: I love that part. It's like Dollarama real estate. Is now a good time to invest in Winnipeg? Because you say it's hot. Sometimes when it's hot for investors, it's not always good. It can be good. You can find deals and make it work, but sometimes it's tougher
Cam: It depends on how you're buying. If you're buying retail through MLS you might overpay but even then, like our numbers, we're set to double again here and then probably in the next five years just with the market. You have that room because like you said, affordability is still so well, it's still affordable and with the market being what it is.
There's a lot less supply. There's a lot more demand. If you're a person who is looking to find your own home and you got a realtor, that's awesome. Be prepared to make several, if not many offers and ask above. Like bid above the asking price. For homeowners, it's not a great market to buy in.
There are still deals to find an MLSP. You gotta be able to pull the trigger like that. No hesitation, you gotta do it. The off market is really where investments, as an investor, that's where a lot of stuff is, in terms of investors. It's still a great time to buy because we've got great rents here. Our prices are low and there's a lot of off-market opportunities, you've got to know how to find them.
Francois: That's my next question. That elusive off-markets a lot of people hear about it. Where is that? Where do you find it? I know, but I want our viewers to understand and our members as well.
Cam: If you wear glasses, take off the glasses you currently have and put on a different set of lenses because then, with a different set of lenses you stop looking for retail and your eyes and ears are scouring for off-market stuff. That can be for sale by the owner, if his bow, it can be a distressed property. Doesn't even have a for sale sign in front of it. It can be at the auction house. It can be just for your network.
I've been investing here in Winnipeg since 2006. That's a long time, but if you're active enough in your committee, and you close on deals. Deals start coming to you. Right now I work with a couple of different realtors and I've got one realtor who knows a lot of people who are past retirement. These are baby boomers who are older and they're looking to download their portfolios. About 12 months ago, I picked up a group of properties that were eight properties and we got them for about 35 cents on the dollar.
Major discount. I just got a message from that same realtor again, that he got another aging landlord. I call them tired and frustrated landlords. They need help. They need help on loading the properties cause their kids don't want them. Putting for sale signs up on your rental spook tenants. There's a whole bunch of reasons why these people don't want to enter the Multiple Listing Service with a realtor. That's where part of the opportunity lies.
I'm looking at another grouping of 10 properties. When you start with those new lenses looking at the whole different world that's out there that you never knew was there. Francois, you're probably not like this, but lots of investors should start it from scratch. Maybe they got their own mortgage on their own home, then they can get their head around getting a second mortgage.
A third one, like how do you do that? Like, how do you pay for that? That's what so many people experience. I remember when I got started, I had some close friends going how do you cover the second mortgage on that property?'' It's not rocket science, but you gotta get your head wrapped around it.
It's the same with the off market. You got to get your head wrapped around it. Just trusting that there's deals out there everywhere. But you've got to find where they are. You've got to knock on doors. You gotta make phone calls. You gotta write emails. You gotta make offers. That's a big one, too. Lots of people will knock on doors, ask a hundred questions, but never make an offer.
Francois: Nice stuff as well, like from those referrals.
Cam: Exactly. You gotta be closer I can tell you how many times. I've actually had people. Thank me, I made an offer. I knew it was very low, but that's the only way the numbers would work for me when I presented it to them. I just said, look I don't want to insult you, but this is what works for me. It didn't work for them, but I've had more than one person thank me for making an offer, even though it didn't work out. Many other people will ask, bazillion questions and ways in their analysis paralysis and then never even make an offer. How do you know if you don't make an offer?
Francois: That's it? The more offers you make, the closer you are to landing a deal as well. That's so true. In every market, whether it's hot, whether it's on market, off market, that's how you increase your chances of getting your properties. This is really cool. What investing strategies work well in Winnipeg? Because not all markets are suited for everything.
Cam: Land development has gotten a lot tougher. I'm not talking about 20 acres or a hundred acres. I'm talking about buying a 50 foot wide lot and subdividing it. The city has got a lot more tight on restrictions and jumping through hoops and all of this stuff. I personally haven't done it for probably four years now, but recently they would charge an additional tax to do the sort of projects. There are still people doing it for sure. It's a lot more work than what it's worth. I've got a couple of friends who are builders and they've actually stopped doing infills in the city.
Francois: Wow, the city is not very intensification or densification.
Cam: It's happening for sure. It's a lot of loopholes that you have to go through. Like I said, there are people doing it but it's become a lot less popular than it was. Because it was really popular 10 to 6 years ago or whatever, but it is still happening. Many of the other strategies work here, wholesaling works here. Buy, rent and hold still works with these numbers. The BRRRR model works great. Lease options and rent to own works fantastic. That's my personal favorite.
In fact, I call those burritos because what I'll do is I'll pick up a property under market value and I'll do it like a BRRRR. What I'll do is rather than hold it for 20 years, I'll hold it for three or four years. I'll find a qualified tenant buyer, put them in there and refinance my capital. Now I've got a tenant buyer in there who wants home ownership and is paying more per month, put some money down and I've got to build an exit strategy. Flipping still works, what with the new taxes coming in, obviously that's something to consider but it's still working. I know people who are flipping small apartment complexes, stuff like that.
Francois: If you do enough, it's an active income. That new tax is really a misnomer, in my opinion.
Cam: What is the threshold on that? Do you know?
Francois: I'm not sure. My accountant said between three properties and up per year. It's not that much, but if you do one and then you don't do it for three years. Everybody listening, don't quote me on that check with your accounts. That may vary by province, but around three becomes active income. There were the ratios as well, like salary. How much of it is your income versus if it's like a sideline then that is flipping and that is taxed differently, but if you're actively doing yet, that's a different deal.
Winnipeg has all kinds of things going for it. It's a booming city. You've got universities, great fundamentals, like health care. It's a big hub. As you said, we fly over it. We forget about it, but it's like Ottawa was forgotten for many years. It seemed quite a boom. I'm glad to hear it. There's things happening in Manitoba.
Cam: I would say just a couple of other quick things to add to that. We may be not as sexy as some of the other cities in terms of the highs, but we don't experience the lows. Often people will say, I'm excited about this project and when it comes to real estate investing, I totally get that in terms of you don't want, you get excited about something, but really that's not a fundamental of real estate investing and whether you're excited or not, it's do the fundamentals work, do the numbers work.
Our average sale price from 1990 till now. It's a slow curve, but we're doubling and we've doubled. It's not like a wild roller coaster. We're somewhat of a recession proof city because, I'm not saying I like this, but we're a big government. We got a whole bunch of CRA and other national stuff here. We're a massive healthcare hub for really Western Ontario and parts of Saskatchewan, all of Manitoba. We've got this. For our small city, we've got this. This one of our big hospitals is like its own community.
It has two or three Starbucks in it. I think it's got three, Tim Horton's in it. It's massive. There's those three things plus we've got, three big schools we've got U of M, U of W. We also have Red River Community college, which is actually quite a big school. When the economy turns down none of those experience downtown, like governments aren't laying off hospital care, doesn't change.
Education goes up because people are going well, I got laid off. I'm not gonna go back to school. And back in 2008, 2009, when I think most of the country's spirit experienced negative growth in some provinces nominal, we never went in. We weren't very high, positive. I think we were 0.5, but we didn't shrink. You know, something to consider for investing and in that environment, everybody still needs a place to live.
Francois: Absolutely. That's a non-negotiable tent in January and Manitoba does not work so well. Thank you so much, Cam. I check the chat. I do not see questions, but everybody listening, feel free to type your questions. Cam, if you can stay around and answer those questions in the chat or at the end, the virtual networking as well. Everybody you've got Cam Rowland, Creative Investor, cam@creativeinvestor.ca and on social media, he's got some great stuff happening.
You need to check it out. I love your stories with the tenant that turned off the heat and all kinds of stuff, you have to watch it. It's been a pleasure. We have a question from Rob, let's take it. What are the best neighborhoods in Winnipeg? Maybe you can pinpoint to a few hot spots and then we'll go to our next.
Cam: Yes, it really depends on what you're looking for. From a purely rental property revenue perspective, you don't want to go into the high-end properties, unless you're going to be doing Airbnb or something like that, and know how to do that well in those sorts of properties. The mid range probably the $200 to $3,000 homes would be your sweet spot.
Honestly, in some of our areas where you can still pick up a home $150,000 or less sometimes you experience a lot of gains in those properties because you can add so much value to that property. Then you provide a property to someone who wants to get into home ownership as an example. But they can't afford anywhere else.
These up and coming areas that were once the hoods or whatever is a great opportunity. To give names, the North end is one of our rougher areas, but lots of opportunity there to turn properties around Elmwood, if you're familiar with the city, St. Boniface and some of the areas surrounding some of the major street arteries like McPhillips, Henderson highway, Pembina highway parts of Pembina highway. Those are the key areas where I would like to go.
Francois: Perfect. That's great. You got your homework. Let's have a look. Thank you so much, Cam. It was a pleasure and I can't wait to catch up with you at the end.
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