Calgary Market Update Spring 2022

Well despite the little snowstorm we had a week ago, spring looks like it may finally be here and the inventory is coming in with the warm weather.

Provincial health restrictions had been lifted and society is starting to get back out there into malls, retail, restaurants, and rental properties have picked up like crazy.

Not only do we help people buy, sell, invest in real estate we also are heavily involved in Calgary/area real estate investments including rental properties.

I have not seen this kind of rental demand in many years since back before the last correction in 2014 where there we bidding wars for rentals in Calgary! Indicators show we might be back there again soon if the vacancy rates and in-migration to Alberta continues at the current pace.

Single family home are the hot commodity at the moment with The detached benchmark price rose to $628,900 in April, which is 19 per cent higher than last year. Causing strong market conditions in this asset class.

All markets have picked up with the rising interest rate cost causing SOME buyers to re-think the total amount of mortgage they want to take on and buying smaller and different properties such as townhouses and condos.

Investment in Calgary real estate is now the target for a lot of out of town buyers from Expensive trophy markets such as Vancouver and Toronto where they have seen huge equity gains and they are looking for better ROI and cash flow which can still be found easily in Calgary by comparison. Why even bother with a 2% cap rate in Vancouver/Toronto for a dog house built in 1939?!? Crazy that non-developers will do these kind of things.

If you need help or have questions about the market or anything else in real estate Contact us today we are here to help!

To your success,

Tim Reid

-Respect the hustle

The Value of Real Estate & Business Coaching

Firstly I recently had a few interesting conversations with clients both coaching and other areas about value. The first point that I want everyone to internalize is that price is only a concern in the absence of VALUE.

Now customers may not fully understand the components that go into any given job, this is very accurately portrayed in the trades professions when some customers feel they could do the job themselves for much less….but can they? My fellow real estate investors are thinking right now that they have seen the horrific results of some real winning DIY renovation jobs.

This story has been around social for a while so I thought it really illustrates this point in business, and serves as a great reminder to respect your value in business and ensure that you convey that value well to your prospects and you will increase your sales, plus convert more A+ customers.

A customer asked me how much it cost to do this job….
I answered him: $ 1500
He said: So expensive for this job?
I asked: How much do you think it would cost you?
He answers me: $ 800 maximum… That’s a pretty simple job right? !”
– For $ 800 I invite you to do it yourself.
– But…. I don’t know how to.
– For $800 I’ll teach you how to. So besides saving you $700, you’ll get the knowledge for the next time you want
– It seemed right to him and he agreed.
– But to get started: you need tools: A welder, grinder, chop saw, drill press, welding hood, gloves etc…
– But I don’t have all these equipment and I can’t buy all of these for one job.
– Well then for another $300 more I’ll rent my stuff to you so you can do it.
– Okay, he says.
– Okay! Tuesday I’m waiting for you to start doing this work
– But I can’t on Tuesday I only have time today.
– I’m sorry, but I’m only available Tuesday to teach you and lend you my stuff. Other days are busy with other customers.
– Okay! That means I’m going to have to sacrifice my Tuesday, give up my tasks.
– I forgot. To do your job yourself, you also have to pay for the nonproductive factors.
– That is? What is this?”
– Bureaucratic, tax, vat, security, insurance, fuel etc.
– Oh no!… But to accomplish these tasks, I’m going to spend more money and waste a lot of time!
– Do you have them? You can do it to me before?”
– Okay!
– I’ll make you all the material you need. Truck loading is done Monday evening or Tuesday morning you’ll have to come by 6 loading the truck. Don’t forget to be on time to avoid traffic jams and be on time
– At 6??? Nope! Too early for me! I used to getting up later.

– You know, I’ve been thinking. Y ‘ all better get the job done. I’d rather pay you the $1500. If I had to, it wouldn’t be perfect and it would cost me a lot more.

When you pay for a job, especially handcrafted, you pay not only for the material used, but also:
– Knowledge
– Experience
– Study
– Tools
– Services
– Time to go
– punctuality
– Accountability
– Professionalism
– Accuracy
– Guaranteed
– Patents
– Sacrifices
– Safety and security
– Payment of tax obligations

No one can denigrate other people’s work by judging prices. My prices to do this would be much higher than it says here for that job but its the point not the amount.
Only by knowing all the elements necessary for the production of a certain work can you estimate the actual cost.

When you hire a coach (which gets paid for their experience) you get focused attention, custom guidance, access to their networks, experience and a third party unbiased perspective so that you can get the feedback you need to get results in a fraction of the time.

What about mentoring? Mentoring is fantastic and I have had many over the years which have helped a lot, but the coaches I have invested in (they are an investment not a cost) have drastically moved the needle for my business. Mentors will be there to help but they have their own businesses to run as well so they can’t always be there when that critical deal hits your desk and you need fast targeted advice.

If you have every considered building a real estate BUSINESS, which is different that flipping a house per year as a side hustle contact us today for a discovery call to explore some options.

PS: We help those who want to build that side hustle as well, there are options for that!

To you success,

Tim Reid

-Respect The Hustle

Post Covid-19 What Comes Next?

Calgary and most other areas of North America are starting to open up an restrictions are lifting. There has been a unprecedented uptick in sales in Calgary real estate as well as many other markets across the country – many have asked us…why is that?

I have seen recently a number of articles starting to catch up on the trends that industry veterans like us have known for months. The primary reasons this happened in Calgary/Alberta at large was the following

  1. Low supply – builders stopped building due to lock downs and shut downs mandated by the public health orders.
  2. Never before seen Savings in Canadian bank accounts. Without spending money on entertainment, eating out, and frankly just about everything for a year in many cases caused an flood of cash into savings accounts and into the equities markets.
  3. Low interest rates – the central banks across the world dropped interest rates to keep businesses afloat and keep credit accessible to keep the economy moving as much as possible when so much was locked down for many months.

Now, that is what caused the market to move in ways not supported by fundamentals. Let’s face it if you ask anyone in Calgary or Alberta at large if the economy is doing well….you will not get very positive answers. Is it in-migration from other parts of Canada or the US? NOPE We have seen the lowest numbers of net in-migration in years to Alberta.

So I think any industry person would agree that the current state of affairs in real estate would be artificial, (at least in Alberta for certain) some supply and demand factor at play but the above three reasons are the cause.

Now that the world is opening up I have to wonder…what comes next? Will we have a repeat of the roaring 20’s like some have predicted? Which would include a large number of people going back to their old habits, OR will we have a cross section of the population choose to form new habits with a percentage of those savings and INVEST them?

I am not suggesting that anyone not live life and go on vacations (we need those!) or even eat out again and stay cooking at home. What I would suggest is that the families that are eagerly awaiting borders to open up and theme parks to come back online, and all the other discretionary spending that was waiting for the pandemic to end – consider taking a percentage of those funds and invest them using diversification to create wealth.

Creating wealth is a system, and one that the longer you work that system the better the results will be. Real Estate is the most reliable way to create wealth (that is why we love it), but you need diversity in that sector as well as into other sectors such as the equities markets, and business investments that pay you dividend income as well. We have done, and still do, all 3 which is what I like to lovingly call the “3 pillars of wealth”.

Which set of habits will you keep after the world goes back closer to “normal” whatever that means, my hope is that we take the lessons learned during this global event into the future and things are never the same again, in a good way.

Contact us today and let’s book a discovery call to answer any questions you have about real estate, business, or wealth creation – we are here to help.

To your success,

Tim Reid

-Respect The Hustle

3 Tricks to buying a new home from a builder.

When buying your first home, you might look at buying new or “resale homes” both are very difference processes. With a re-sale home bought through the original or future owners most choose to work with a Realtor in Calgary or other markets.

Having an agent to navigate you through the process, help with referrals to service providers, really makes the process a lot smoother for many buyers.

When buying a new home, driving up to that shiny sales center with the smiling representative in that gleaming show suite/show home is very exciting! However there are some things that many buyers do not know about the staff working in there.

1.

Firstly, the best way to not get tricked is by being educated about the dynamic.The staff in the sales center work for the Developer, they are paid to maximize profit for their employer – not get the best deal/value for money for the customers that walk through the door. They do the best they can with the scenario they are given, remember that they work for the “man/woman” not really for the customer.

2.

With all new product sales GST is applicable, for all new home sales in Alberta GST will be added to the purchase price and the price of any upgrades made to the property prior to construction. There will need to be disclosures singed to acknowledge that you understand were an how GST will be calculated for the sale.

3.

The most important thing to consider is that the builder will more often than not use THEIR OWN CONTRACT for the purchase. This is often non-negotiable and the builder’s team of lawyers have written this contract in their favor – not the consumers. Like any good business their lawyers wrote that sucker to protect THEM not YOU. Having this reviewed by your real estate agent or your own lawyer is highly recommended. (both would be a best practice)

Buying a brand new-home with new home warranty in a brand new building or a spanky new house in a new community with great amenities and new schools is exciting, make sure you keep that excitement all throughout the process by asking good questions and having a professional help you through the jungle -that way you are protected and often will be able to negotiate a better deal.

As always if you have any questions about this or other real estate topics, contact us today to book a discovery call.

To your success,

Tim Reid

-respect the hustle

5 Key Reasons You Need a Power Team in Real Estate Investing

Real Estate is not a solo-sport, you absolutely need a team of professionals to support you in your real estate investing ventures. The first time you have bought a house (or maybe you haven’t yet) you might not have realized how much goes on behind the scene of that transaction.

From the start you likely worked with a realtor, who has a huge list of service providers that could help you out with due diligence, financing, repairs and many other items.

As an investor you will need a much longer list of people to help you out, and here are the Key reasons why:

  1. You will always run out of time to do everything yourself, even if you work in real estate full time – which is also not how most people start, they still work a day job while investing in real estate and many never intend to leave their day job they just want a great return on their investments. Real estate is one of the most reliable ways to build wealth than any other sector.
  2. It does not matter how great you are at finding deals, you can’t possible to do them all with your own resources. Having wholesale connections will save you a lot of time and effort.
  3. Cash/credit are finite and you will need JVP partners to help you grow your portfolio
  4. What about the passive income? Well nothing in business is ever truly passive if you are going to get great returns – therefore you will need property mangers, resident managers, and partners to help you keep the investment running as smoothly as possible. No fluff and fairy tales there will be challenges, just like any other business on earth!
  5. Having fun! Does it really make sense to try and do it all on your own? Even if you had all the money in the world and an unlimited credit capacity, where would be the fun in building an empire if you cannot share that with others? The relationships that you build with your power team members make the challenges less severe, and you can have a great time along the way when you work with others. I believe in the Richard Branson model of business – find a way to have fun while you are at it, work hard and play hard. (he has a thing or 2 figured out in business)

Here are some power team members that you will need to get on board when you are starting out, or even if you have a number of deals under your belt and have gone the solo route – at some point to scale you will need all of these team members.

  • Realtor
  • lawyer
  • mortgage broker
  • appraiser
  • home inspector – residential
  • commercial property mechanical inspector
  • General contractor
  • handy men/women
  • wholesale material suppliers
  • private lenders
  • bankers
  • accountant
  • book keeper
  • architect
  • wholesalers
  • property managers
  • resident managers
  • JVP’s – joint venture partners
  • RRSP lenders
  • Trustee companies
  • Insurance broker
  • Trades; paint, flooring, roofing, HVAC, carpentry, tile setter, plumbers, drywall, smart home techs.
  • Moving company
  • Marketing consultants
  • Web design
  • Printing company
  • Bailiff
  • Engineers: structural/mechanical
  • Real Estate/Business Coach

As you can see there are lots of people that make the real estate world keep spinning, if you have any questions or need a connection in Calgary and many other markets in Canada we would be happy to help. Contact us today and book a discovery call.

To your success,

Tim Reid

-Respect The Hustle.

Top 5 Renovations to get you top dollar for your home

When renovating a home to sell when you are the owner-user getting it ready for sale can be a confusing process. This is in part due to so many “gurus” online and TV shows that show a very distorted view of how the value is really derived for the larges population of buyers in any market, at any part of the real estate cycle.

Common mistakes are to change things that will not really affect the re-sale value of the home compared to the cost of those changes/improvements.

Here are the top 5 picks for dollar in to dollars back OUT which is the most important metric that matters!Paint – modern and neutral colors or even white/off-white shades can work amazingly well to make a smaller space seem larger. This item can get you 1-1+ dollars back in value. This really changes the feel of a home that helps the property show in its best light

1. Paint – modern and neutral colors or even white/off-white shades can work amazingly well to make a smaller space seem larger. This item can get you 1-1+ dollars back in value. This really changes the feel of a home that helps the property show in its best light

2. Kitchens – updating an older dated or less functional kitchen will make a huge impact on the re-sale of the home bringing a modern feel and often adding new cupboards/drawers or a pantry will add a lot of value for the investment. This will be a more expensive change, but the time that we spend in the kitchen is huge and having this entertaining and meal-prepping area present the wow factor will help a home sell faster every time

3. Bathrooms – we spend a lot of time in the bathroom and just like a hotel having white towels so that it feels clean, fresh, comfortable having updated flooring, vanities, fixtures, dual-flush water saving toilets will help a home sell faster and for more money. Smaller investment than kitchens, huge impact for the whole family. Ninja trick – add his/hers sinks this will help avoid domestic arguments between kids and parents alike!

4. Flooring – having scratched, stained, old – looking flooring will really drag the price down for the property. Buyer’s know that this can be an expensive change (however done right it does not have to be) and they often don’t want to do it themselves because it is a hassle to have all the floor disrupted while living in a home, trust me I have been there – no fun at all! This change will add a lot of value, hard floors such as vinyl plank are very popular due to the lack of maintenance and durability. Hard wood is still popular in higher end homes – look at the area trends to see if that is the right fit for updated homes in the area.

5. Fixtures – I do not just mean light fixtures! Lighting, door knobs, drawer pulls, hinges, switch covers/outlet covers. Having brass door knobs and art-deco knobs on all the cabinets do create a vintage/dated feel for a home and changing all these elements can be very cost effective, yet have a large impact on the overall feel of a home.

If you have any questions on this or any other real estate topics, contact our team today, all things real estate we are here to help!

To your success,

Tim Reid

-respect the hustle

Timing and Motivation Client Immutable laws

Today I had what I would expect is a common challenge most business owners in real estate fact often, that challenge was the matter of timing. We have all heard the phrase “timing is everything” and I would agree that timing is the most important business force surmounting any other.

The client that I had a booked meeting with, albeit several days ago by the team – which in today’s faced paced real estate market might as well have been a lifetime ago …. had already bought a house. Now, this could result in frustration, anger, resentment, or many other colorful emotions and expletive language to go along with it! (the mental battle was touch and go for a few minutes there)

A better tactic is to ask yourself “self…what am I meant to LEARN from this experience?” Which was what I did to analyze the chain of events that lead to the outcome I didn’t want because if you constantly focus on what you don’t want you tend to get more of that.

Looking back through the booking process, sending the calendar invite (not accepted but that’s common), sending the zoom invite, text message the invite to be sure they got it, then as is my custom – the phone call 15-30 minutes beforehand to confirm they have it all and will by by the computer and not driving or walking the dog so I can garner their full attention to the meeting. I did not see many improvements that could be made in the system, other than calling the day before on a holiday weekend to ensure the meeting time still works.

Then I thought a bit harder, and I was reminded of the fundamental truths of sales: it could have just been the timing or motivation of the prospect. In this case the motivation was there clearly – just not the timing of our sales presentation. That is something that no salesperson or staff member can change. If someone does not have the problem your product solves or they have said problem and are unmotivated to solve it, you could have the cure for cancer and they will not pay attention let alone pay for that product or service!

Whether your business is in real estate investing, rocket ship repair, forestry, or IT timing and motivation is something you need to explore/ nail down/work within or you will have a real task on your hands wasting cycles attempting to convert those who are not in the end of the buying journey.

Thinking of investing in real estate in Calgary or other markets in Canada? Contact our team to book a discovery call to find out how building wealth for 3 generations could be easier than you think.

To your success,

Tim Reid

-Respect The Hustle