Calgary Real Estate Market Heating up?

The Calgary Real Estate market for buyers, sellers, investors is certainly a strange place over the last couple months. Everyone thought that after all the deferrals were done there would be a flood of foreclosures. Are they still waiting in the wings? Could be, but the low inventory situation that we find Calgary in right now has created an atypical surge in sales.

Low interest rates and much higher than average savings in Canadian bank accounts due to pandemic lock downs have allowed many families to inadvertently save up a down payment! Now, not all sectors of real estate in Calgary are moving fast:

  1. Luxury homes are slow moving over 1.5M in most areas of Calgary – some areas of aspen have seen motivated sellers drop prices 100’s of thousands of dollars to get the homes sold
  2. Condo market for apartment style homes in the inner city has been a slow mover, with inventory here being far higher than demand.
  3. Older un-renovated homes under 1000sft which are normally sold to developers are slow to move because spec-home developers are being very cautious on their purchase prices for lots.

Single family and semi-detached homes are moving quick, also demand for half-duplexes with no condo fees has skyrocketed due in part for the buyer now seeing the possibility of adding a basement suite for having that extra revenue. I had a younger client recently tell me that that type of property would be great for his first home so that he could rent out the 2 suites when he decides to upgrade – what a smart young man! I wish I was thinking in those terms when I was younger, things would be very different now if that were the case.

We are seeing CS properties before I can get clients in to view them, properties going 50K over list price, and even private deals which we specialize in normally not having as much competition…we got outbid by a neighbor for a private seller of a lot I was working on selling to a builder contact of ours! Ouch – losing out on a private deal in a great location is not normal operating mechanics for Calgary real estate.

The stats won’t support this opinion, but I am seeing a balanced market at the moment in Calgary and if we don’t see a volume of inventory hit the market by spring when it gets warm and everyone wants to move….then we could have a seller’s market on our hands.

What do you do in a sellers market VS a buyers market? Good question – contact us and we are thrilled to help advise/answer questions on what could be the best strategy for your goals.

To your success,

Tim Reid

-Respect the hustle

Top 3 Reasons to flip a house in Calgary

WOW 2021 is off to a roaring start with investor inquiries! We have a list of over 12 buyers most of them cash buyers in the Calgary Market looking for houses to buy, fix and sell. Flipping houses is not generally the go-to strategy for investors in a buyers market – everyone can flip a house when you have prices going in the up trend which is certainly not the case in Calgary.

There are pockets of the city that are just flying off the shelf that need work, how I feel there are a few reasons for this: first being the low interest rates and people that just want a larger place than a rental and they can now get into home ownership due to the lower interest rates.

Secondly, I think there are a lot of investors that are looking for deals due to the economic downturn in Alberta that has gripped the larger centers for a number of years now. Lastly, investors are looking to diversify out of an over heated stock market (and some have made a killing here in 2020 but savvy investors know what goes up must come down).

The top 3 reasons to invest in a flip project in Calgary right now are:

  1. Low interest rates – helps the buyers buy as well as the investors, also you can pull equity out of existing properties at a low cost of borrowing in this lending environment which increases your margins.
  2. Deferred maintenance properties will have a hard time getting a good price on the current market, we are advising all of our listing owners to do basic repairs/updates to get a quick sale for more money – however not all owners have the budget for that work these days and will be forced to sell for less.
  3. Buyer pool has been expanded by the lowered rate of the stress test, and work from home shifts have caused many buyers to want to have a proper space for the home office, and have a larger space for their family in general than a rental closer to the core due to remote work options.

There are many analysts that predict that over 30% of workers will remain working from home after the pandemic is over, now I know the co-working space owners will not want to hear/believe that but I would tend to agree with them. Also, live work animations to properties will be a large value add for properties to create real differentiated value.

Contact us for a discovery call to learn more about animation options for animation to property to drastically increase its value as a rental/owner user buyers alike.

To your success,

Tim Reid

#respectthehustle

Who Controls YOUR Business?

When we start a business in real estate, or any business – we start off with a plan (well generally!) which is more like a theory and go run out into the marketplace with that plan. After getting customer feedback we adjust that plan and keep going back to the customers getting more feedback called the “feedback loop” very aptly named by Eric Ries in his book the lean startup which is a must read for any business owner real estate or otherwise IMHO.

After using some industry best practices and armed with our customer feedback we settle upon some of the holy-grail elements in business called SYSTEMS (not always, but more on that in a future post!) which are what actually create freedom in business – sometimes we think that getting into business for ourselves in the first place is what creates freedom….wow is that ever wrong! I think that any veteran entrepreneur in real estate can attest to the fact that the business unto itself dos NOT create freedom, actually quite the opposite some days/weeks/months.

While the systems in the real estate business are being built/re-built and learned that takes up a massive amount of time, energy, and cash because a lot of that process (without expert guidance/coaching) is trial and error. That’s ok because that is the part of the trill of creating your own thing, testing and measuring to figure out how to create a better mouse-trap for yourself and your customers.

We have all heard the draconian phrase that “the customer is always right” correct? Well, in my past corporate world we often said in our meetings that in fact (well in operations anyway maybe not sales) the customer is often WRONG and they pay us to tell them that in a tactful way!!

This may be an avant-garde opinion, but before you start throwing stones I suggest to you that you consider the following question: Why does the customer come ask you for help? The most basic answer is that they have a problem that needs solving and the solution is your product or service correct?

Now, if we can agree the above is true – then would your systems not be the glue that hold your company together? Do you not wish to serve your customers all to the same level or better as consistently as possible? Well, if that is the case then your systems, methods, order of steps you take and the reasons why you take them is your special sauce that gives the customer what they want correct?

There will be customers that want to control the process or feel that they might know better than you (the expert that can solve their problem)….does that make any sense? That would be equivalent to asking the butcher to come into your kitchen and tell you how to fix a leaking tap! So when the customer asks you to change your proven, tried, tested, and approved systems that get results – respectfully tell them NO. Now, I am not suggesting that you be harsh or to not be accommodating to customers needs – I am suggesting that you can’t help everyone and not everyone is your ideal client.

When you consider the 80/20 rule that 20 % of your customers make up 80% of your revenue, and the rest cost a lot in cycles/money that focusing on the more delightful and profitable group just simply makes good sense for your bottom line and your sanity. Keep control of the wheel on your business, you wouldn’t let your passenger steer the car going 140K down the highway…I suggest you don’t let the customer steer your processes you know how to get the results they need.

To your success,

Tim Reid

#respectthehustle

New Year New Deals in Calgary

Happy new year’s everyone! (yes I am aware that it’s Jan 18th already!) There is so much activity in Calgary Real estate right now, despite what you may hear in the news overall the market is VERY active right now. I got outbid on a foreclosure for on of my realtor clients by over 30K!

There are segments of the market that are having a rough time for sure, higher priced homes have taken a hit – 1.5M+ buyers are well aware that it is a sellers market, and when those owners need to sell….well they NEED to sell due to financial changes in their world and they need to slow the burn so their mortgage doesn’t eat up all their savings

I mentioned “one of my clients” – that is because we now offer Realtor services through real estate professionals inc. I am the “investor first realtor” because I was an investor for over a decade before I started the realtor gig, as an addition to our other services. This allows me to have both conversations with private sellers because frankly, a lot of clients just need to sell and not get creative and do an investor style deal such as agreement for sale. (we also just won #1 last month in our brokerage!)

I get asked all the time how the market is doing, well based on demand and the amount of inquiries we are getting from investors/sellers/buyers fueled by the low rates and buyers market – I tell them that the market is very busy overall. Now, condos sales and investors looking for condo investments has certainly shifted, AirBNB was a hot topic in 2019/early 2020 now that demand has greatly reduced (not gone) and inventory is high so sales will be lower but everything sells for market value…what someone is willing to pay for it.

Those who are new to the game of flipping houses would do well to stick to ARV up to 525K that way you will get a quick sale and not have all your profit eaten up by holding costs. Those with more experience and can keep the time/budget for construction under control, then there are a few projects here and there that could be taken on up to he 700-800K ARV range – now the higher the price for the home the pickier the end user who is going to live there so keep that in mind for your flip project and budget accordingly.

The question we hear is should I invest in real estate in Calgary? Well that depends on your goals, certain things work here in this part of the market cycle. When you are getting used to the game of real estate, it’s best to do it in your back yard – if your looking to expand there are better markets for certain strategies contact us for a discovery call if you are looking to branch out of Calgary real estate into other centers.

To your success,

Tim Reid

#respectthehustle

Top 5 Reasons to buy a house in Calgary Winter

  1. Less Competition – there are are fewer choices (lower inventory) so that you can refine quickly the homes you like and don’t like a lot faster. Real Estate is a cycle throughout the year, winter sucks in Calgary most of the time weather wise so the seller’s don’t want to move any more than you do but you can get a better deal not having as many competing offers.

2. Pricing/Motivation Sellers who have kept their home on the market into the winter OR are STILL on the Calgary marketplace have motivation, otherwise they would wait for spring (which is a form of speculation thinking they will get a better price). Sellers who sell in the winter on average have much higher motivation – also supply of buyers is less so demand goes up for their offers – even if they are aggressively in your favor

3. Tax advantages, there are an infinite number of tax scenarios in people’s lives – often that is affected by the end of the calendar year. What this means for you is that having a quick close in December could help the current owner save money on taxes, we all want to keep money out of the hands of the feds when we sell our homes in Calgary or anywhere in Canada for that matter.

4. Bankers get paid bonuses based on quarterly results. What this means for you is that a branch manager, district manager, national manager at a mortgage financing company has their bonus check at the end of December directly tied to “production” and they will be more incentivized to push mortgage approvals through and get them closed before year end – giving them a reason to approve your loan/make exceptions they might not at a different part of the calendar year. Getting a mortgage to buy a home in the winter can be easier than any other time of the year. Do keep in mind everyone can go into holiday mode after the first half of December, so things do slow down before the holidays.

5. Properties are looked at based on their physical interior features and structural integrity, the “curb appeal” factor does not really apply with snow on the ground in Calgary and no flowers/gardens to look at. This factor does help a buyer look at the property closer, get full inspections, which help negotiate better pricing and forces buyers to think about the value of a home inspection, when they are thinking about how old the furnace is and how much heat/water leaks could be a problem. The sellers are also thinking about these things too if they are dated and would be more willing to make concessions. Creative financing deals are also easier to negotiate during the winter months in Calgary because they want a NOW solution and would rather not wait until spring to sell the home and get out right away before the sleigh bells ring on the rooftops!

To your success,

Contact us to learn more about how to find the best deals in the winter and all year round.

Tim Reid

Respect The Hustle

Credit Repair Mysteries – how do I fix my credit?

Credit is a mystery for most people that are not in banking or finance. For most people, if they have a good job and never defaulted on a credit card bill (the bane of many a millennial that didn’t know better and said screw telus/rogers/bell when they were 14 and then find out that really screwed up their credit when it was brand new) then you would have been able to get credit cards, car loans without too much trouble.

Then when you first think about buying a house you go into your bank (not my recommendation) and the cheerful banker asks you to sign some forms and fill in an application then plugs a bunch of numbers into a database tool and it spits out a number you can qualify for. That number was shockingly low for most people that are middle class, just like I was a bit shocked with I first tried to buy a property for myself – about 180K was my approval….which at that time in Calgary could have bought me a beautiful single story outhouse in a bad part of town!

So it was at that time I decide to buy a nice car because a house was out of the question, and after all I couldn’t drive the house to work…so that made sense to me at the time. Looking back is always easier than looking forward, was the the best financial choice? Maybe, maybe not – but as luck would have it that was just prior to the top of the market in the 2005-2007 era right before the crash. So, sometimes things work out even when we don’t have all the info to make the informed decision.

Now, some people might get a different answer from the banker’s little software – congrats you can afford 400K! If only your credit score didn’t suck and it is below their allowable guideline (typically 650+ for the “big 5” in Canada). At this point is where most people learn for the first time that your credit score is a big deal – unfortunate timing when you have a lease ending and you want to go house shopping!

The banker will know very little about credit and possibly give you some terrible device – so beware banks are not in the business of credit scores they are in the business of banking! Talk to a specialist or an amazing mortgage broker who knows about credit repair.

What to do? There are also many credit counseling advisors out there, which can give you good habits to follow. What we suggest is that you talk to a credit repair specialist that knows real estate and how to fix credit fast – because who wants to wait another 2-3 years? That will help expedite the process, contact us and we can recommend rock stars in this field.

Credit matters – why they don’t teach this somewhere in schools is unfortunate. We are here to help, also dispel myths about home buying such as: if you go bankrupt you can’t buy a house for 7 years. That is total BS and if that’s you give us a call because we have options. Home ownership could be closer than you think.

To your success,

Tim Reid

-Respect The Hustle

Book review by one of the greats

I love to read, as some of you may have seen from my posts – I have crushed a number of book since covid, frankly not driving around as much being stuck in traffic in addition to getting more sleep has really helped the book/month ratio. I will be including a comprehensive list from my book shelf here shortly.

Mr Bruce Firestone founder of the Ottawa Senators is one of my mentors and here is one of his latest blogs taking a review of corporate mergers which are not always the best for the employees…see the full article here

Let’s Talk Goals

a goal wothout pa plan is just a wish

With school now back in session for 2020 and a lot of uncertainty in the air, the last thing on the mind of a lot of business owners in real estate and others is their goals for the last quarter of the year.

Just because it is hard to see the horizon, does not mean you can skip having a destination! Imagine for a moment the mayflower not having a destination of coming to Canada…” North America or thereabouts” would not have got our ancestors here to our great nation!

We often think of the things we DON’T want as opposed to what we DO want:

  • I don’t want to go broke
  • I don’t want to get divorced
  • I don’t want to lose my job

What you put out into the universe (or god of your understanding) is what you will get back – having your focus on your intentions and GOALS consistently will move you toward them. It has been said that “what you focus on expands” so if you constantly focus on what you DON’T wand then you will get more of that.

Having goals is very important, however often they wind up like resolutions – never accomplished and only done once or twice per year. Thinking about your goals ALL THE TIME and re-visiting them and re-evaluating them to get valuable data on how well you doing (or not doing sometimes) is key to making them happen.

We have all set goals that maybe we didn’t meet in the timeline that we set out….sound familiar? The conclusion our lizard brain can make in this scenario is that “setting goals doesn’t work, I never meet them anyway” which is of course not true just feedback that there are adjustments that need to be made.

When setting goals it is important to make them around things you TRULY want, have them be specific, time-bound (with a realistic timeline), and measurable. If these ingredients are not present then you have a recipe for disaster! When you can’t measure your progress you feel like your never going to get to the destination, when you set unrealistic timelines then running out of time/stress/anxiety will follow, and if what you are working on does not move your closer to something you are passionate about then how often will you make consistent action toward it? (not very often, just like the treadmill collecting dust of the gym membership not getting used).

We suggest having both short term and long term goals, in all areas of your life: personal, spiritual, health, work/business, financial, creative ETC – whatever sectors of your world that you want to improve, for some there are areas that are humming along great and no significant changes needed.

When creating your goals, be conservative with your goal/timeline – be kind to yourself. The motivation to keep working on them is derived from having confidence that through consistent action you CAN achieve them if you surpass them or crush them early then FANTASTIC! This outcome is much better than reaching your goal date and only being half done and discouraged – which is not helpful, remember to adjust and re-set the goal self- beatings are not conducive to motivation for goals!

What are your goals for the last mile of 2020?

Contact us and let us know, we would love to hear your vision for your world over the next few months.

To your success,

Tim Reid

-Respect The Hustle

What is your real competition?

What-is-your-real-competition

Recently I was reading a marketing book which told the story of Coke when they were preparing to enter the Russian market many years ago. Like a large well funded company they spend a lot of time and resources researching the market and customer behavior.

What the found was that the biggest competitor to their product was the CITY BUS! The fact was that a lot of Russian consumers did not have enough disposable income to enjoy a coke PLUS ride the bus home! I know that is hard to fathom today (this was many years ago) or in many developed countries around the world.

However the lesson is still just applicable today as it was then, you need to ask yourself as a real estate business owner (or any business) when you enter the market for the first time, launch a new product, or expand your reach into new markets: what is my real competition in this space?

The facts could be far from your assumptions, and we all know what an a** assumptions can make out of business owners with the best intentions.

To your success,

Tim Reid

-Respect The Hustle

Delegation Will Set you Free

4 people's hands in fists coming together, signifying teamwork and delegation

When we start off any business, real estate being no exception to the rules of course, we have to wear all the “hats”. These are things that the 9-5er may not have ever even thought about before such as:

  1. Accounting/book keeping (they are NOT the same thing)
  2. Sales
  3. Marketing
  4. Deal Analyiss
  5. Underwriting
  6. Negotiating
  7. Business Credit
  8. Corporate Financing
  9. Total Cost of borrowing
  10. Mangement
  11. HR
  12. Operations
  13. Creating Systems (critical)
  14. Time Management
  15. Social Media
  16. Traditional Media
  17. Branding
  18. Legal
  19. Building your power team

Seems overwhelming right? Well, that is OK because you do NOT have to go it alone. Even though you may not have the budget for full time staffing in many if not all of these areas in the beginning, you can outsource almost everything these days. I would suggest that even IF you did have the budget to hire a bunch of full time staff that it would be an ineffective allocation of resources.

Why? Primarily because you are learning what you are great at in the list of skills above, and what your time will be worth to your new business (or even existing) – and this is VERY important to know before you decide where to delegate/outsource/hire any role in your new empire.

Rome was not built in a day, as they say – great companies aren’t either, it takes some time to build them up and add head-count. I have seen countless businesses start and fail because they added a bunch of staff before they were ready and it killed their cash flow (employees are expensive) especially when compared to contractors. You can even rent board members, advisors, even a CEO for a few days per month to give the guidance you need for a fraction of the costs.

Now, when you are clear on what you love to do and really hate to do in your business (such as accounting/book keeping for example) then you can decide what to delegate, when, and to whom.

The whole reason we start a business is to have freedom, have fun, and provide value to the market place in a way that is fulfilling. How the heck can you do that if you despise a bunch of tasks you have to undertake every day? Simple: you CAN’T.

With that in mind, budget and map out on the calendar when you want to outsource making it a goal – having X increase in stabilized revenue then we can hire Y which will free up Z amount of hours for your the Entrepreneur to spend more time working ON the business and not IN it.

To your Success,

Tim Reid

-Respect The Hustle