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

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

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

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