John Paul Gulbis is back on the show to chat about what he’s seeing “on the streets” all around the Golden Horseshoe. JP Gulbis has worked with investors and Rock Star for over ten years, and he’s a wealth of interesting insights and ideas around real estate. Part of the reason we’ve been able to work with so many investors all around Ontario is because of the help of the amazing team at Rock Star. We discuss rents, property prices in different cities, population trends and more. Enjoy the show!!
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Transcript
0:00
Hey, everyone, it’s Tom Karadza. On this episode of the podcast, we bring back john paul Gulbis, who has been with us for 10 years. Now, this guy is a great coach here at Rockstar, he works with a ton of real estate investors. He’s got tons of great experience. He’s just an all around good guy. I love sitting down and chatting with him. So this is a bit of a catch up talk, we talk about real estate prices and some of the areas that he’s working in. Nick sits in on this podcast with us. We talked about some just real estate updates in general, some rent prices, some price points in different cities, we talked about interest rates and kind of the Bank of Canada. So we just kind of go all over the map, just a general real estate investing conversation between a few friends just really enjoy sitting down talking with JP, he’s such a good guy. Over the years, we have had so much good feedback from different people he’s worked with. It’s just we feel honored and blessed to be able to work with so many good people here at Rockstar, and he’s definitely one of those. So just love talking to him. And hopefully you enjoy this casual chat between friends catching up catching up about all things, real estate and other lies. And if you’re listening to this, and you want some real estate information yourself, yeah, one of the most I can’t speak right now one of the most interesting things that we seem to have put together is a blueprint with a real estate investor that mapped out all the properties they purchased, how much cash flow they generate on the properties where they purchased these properties, this real case studies for all of us to learn from we put that together in a report where that you can get at Rockstar inner circle.com forward slash blueprint. So if you want a copy of that report, you can get that at Rockstar inner circle.com forward slash blueprint. And with that, let’s get on the show.
1:37
Are you ready to live life on your terms? Is it time to take charge? Real Estate, business building the economy,
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health and nutrition and more. It’s the your life your term show
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with Tom and Nick Karadza.
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Are you ready? Let’s go.
2:04
Okay, JP, can you hear me? Okay, I hear you, Nick. You can hear me okay. All right. We’re good. Even Alex can hear me. Okay. JP, start with the question that you just asked. Yeah,
2:11
cuz it’s coming up a lot. No, it was.
2:16
It was a question that I had said to someone years ago revolving around not revolving around the horses, which are losing bet most of the time, like 99% of time. And then the state
2:28
level horses because it’s the only investment that eats your money.
2:31
Oh, man. Anyway, this horse that we have lover to death, but man every year, it’s like, just problems when you want to go show her and here we are again. So anyway, but funny.
2:42
Show her like to like to a show and
2:44
yeah, like compete with her. It’s like, Oh, you spent all winter getting ready. And then she goes and hurts herself. And it’s like, wow, what are you doing? You know? So ever gotten torn off a horse? Oh, yeah, I almost got thrown off yesterday. Oh, did you know
2:55
you heard about next daughter? Yeah.
2:58
I think Yeah. And then regular though. I was talking to someone in the barn last week. And I’m like, how many times you’ve been thrown off? She’s 20. She’s like bull, too many to count. But one time she felt the horse tripped, landed on her leg and shattered her leg. Yeah,
3:11
I’ve not broken any bones.
3:14
Or really been broken off like full somersault in the air thrown off. Yeah,
3:17
one time the horse. I don’t know what he did if he left a stride early before jump landed in the middle of it and then landed on his face. And I must say What? 15 feet down just but it all happened like in a like at a really low grade angle. And so I just ended up just getting across the grass. But but haven’t got hurt. Nothing serious. Luckily. Luckily,
3:38
she’s back on man. I don’t know. She’s She’s got guts.
3:41
You gotta get back on. Yeah,
3:42
no, I know. I think it’s a good life lesson. Nothing else. And it is it is.
3:45
I have to admit, sometimes I let me do the dangerous stuff. Because she doesn’t like, she doesn’t seem to care. But I’m like, should be
3:55
careful. But she doesn’t listen, why? What’s the dangerous stuff like jumping over multiple?
3:58
No, it’s just like, when you you know that, like, the horses on edge are like she wants to push it a little bit. And it’s like, just be careful. You know, and because I’m always a little bit sensitive to that. And I’m like, just be cautious. But she’s like, oh, whatever. Let’s just do it. You know, and this is, which is the right attitude.
4:14
Okay, so your question on real estate comes from the horses because people are
4:17
okay, so yeah. So yesterday, the stupid vet not sure I shouldn’t say that. That great. I love the horse. Just like this, or it’s been three years in a row. And it’s like, come on horse. Like, we spend so much time and money on you, and you’re not doing what your job is supposed to be. So anyway, it just triggered something. And then there was an investor who had a property that the tenant is leaving, and they were saying, okay, here’s the laundry list of everything wrong with the property. And there’s like, the investor said, should we just sell this and like move the money somewhere else? And so that was the question like, do you just, is there a point where you just sort of draw the line and say, Okay, you know what, cut your losses, you don’t have to make it back on this investment. Just take it out and go somewhere else to make up? You know, the loss? Yeah, that was a question. I
5:05
totally think there is a time to sell a property and get rid of it. But I think at that time isn’t at the time that you just described, because my question would be to that investor, where else are they going to put their money? Well, let me give you let me let me back up a step. How long have they had that property?
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Not too long, maybe three years. Okay. So is there some
5:23
equity in it or no? Oh, yeah.
5:25
Oh, there so yeah. Okay, how much? Or I would say probably least 100.
5:32
That’s even without the end their down payment.
5:35
He told me what he owes on it. And I know roughly what it’s worth.
5:37
So there’s new equity pass the down payments past the money they put down on the property. There’s new equity. Yes.
5:42
Oh, yeah. Yeah, yeah.
5:44
Okay. But But you know, what, in fairness, the conversation ended up let me go look at the property. Let’s see how, you know, this, this laundry list of items. Let’s see if she’s just being dramatic. Or if it’s, you know, really
5:56
not good. Which is often the case. Yeah, right. Exactly. Yeah.
6:00
So my question is, I have over $100,000 of equity in this particular property. Correct? was a cash flowing over the last few years?
6:07
I’d have to double check. Yeah. Yeah,
6:10
if you had to guess what would you say?
6:11
Probably, breakeven, maybe slightly negative is a low down payment, hundred thousand dollar,
6:15
six figures of equity, breakeven property. So my question to that type of person is always like, okay, where else do you put the money to get what you have in the last three years? Like if your life if you if you value convenience in your life? Yeah, sell the property. So you never have to deal with a tenant ever again in your life? Yeah.
6:33
It wasn’t a question of the tenant. It wasn’t a question of it was a question about that specific property? Like, is this just a lemon? And are you recognizing it’s a lemon? And then you just like, okay, let’s just move this capital and buy something else to replace it. That was really the key? Yeah,
6:48
I think I think the answer is yes. Yeah. But at the time, so I would say the same thing as Tom, maybe not at that particular time was the right time decision. And why I would say that is just because the I think that’s just for me without the emotion involved. Right. Right. But yeah, absolutely. It’s time to move on. Sometimes you just, it just runs its course, like anything you do. Yeah. Like, you know what? This one’s served me, you know, tell this one serve them? Well, you got some profit from it. It’s done this. You know what, let me go find something else. You just because, you know, maybe mentally you’re just like, for whatever reason, just like you’re frustrated with this horse, you’re frustrated with that property. So even though it’s a little thing seems like a bigger thing, and it’s really not, but you know, whatever, sometimes, yeah, you gotta move on for stuff. Right? I don’t know. That’s, that’s how I see it. I rarely would I it’s got a you know, I like to own as much stuff as you know, as possible. I don’t like to sell them. But I mean, sometimes you gotta cash out, but not with the emotion. Right? Because one time I was ready to sell one ready, I’m just like, man, forget about it. And then once we got it back up and running with that was a few years ago was probably five years ago. Now think I’ll be held on to the fan. Yeah,
7:45
I think every investor at all times thinks they should, should sell. But I guess going back to that point is like, unless you have a better place to put the money don’t sell, you just never sell assets. So unless there’s another asset lined up to buy it, and to Nick’s point out of emotion is a time where usually make the wrong decisions, right. So I would just say, yeah, you never sell assets, unless you have a better place to put the money. So for example, it might be a time to sell all your residential investment properties. If you’ve grown your portfolio to the point where you’re just going to go into like commercial, or you’re going to buy like one monster apartment building, or something like that. Right? Then you’re just moving from one asset class within that asset class to another type of property within that asset class. But to sell it just on like that, you know, it’s more convenience kind of thing. The answer is always No, like, yeah, there’s always No, unless you have any asset light lined up.
8:32
I think he’s probably just comparing it to other properties that he owns. And then, you know, he said, Okay, well, it’s cost me 20 grand for this, this, this and this while the tenants been there, so and then she’s bringing this list. And I think
8:45
the way you need to look at that is in your portfolio, there’s always going to be a property that causes you lots of problems, right? So let’s say he did sell that he or she did sell this property, and then take some money and goes by the next property, because that’s going to be the hassle for your property. Then the day you close on that property, there’s a sewage backup. Yeah. Then what? Like,
9:00
I think the answer is Yeah, but you can always upgrade. Like if you have like, yeah, you have 10 properties that’s crappy. Agree, get rid of the crappy one. And then and then if your number two crappy one is now going to be your crappiest, and maybe you’re willing to deal with number two, or how crappy that one is. But that’s
9:14
my point of upgrading is going into another asset you’re aware of, but to sell just and then decide, I whenever I see people do that they never take the money and then decide to put it another asset, you know, what happens? They sell the property of the car is No,
9:27
not this guy. Yeah, I’ve got a long time.
9:30
Okay. So then if that’s the case, if you’re moving into another asset or upgrading, Nick, like you’re saying, Yeah, but if it’s just like, Oh, my gosh, we’ve all been there. And the answer is always No, you just never sell assets under that state. Order. How many times is going to come up with all the rain we’ve had? I can’t tell you how many number of like, water leakages have come up in conversation. Oh, this time
9:48
of year? Oh, yeah. Yeah.
9:50
Especially I don’t think Yeah, I don’t think we knew with block foundation properties. Also, I didn’t know a block foundations properties are so porous. Like, I didn’t realize that block foundation properties always basically have water issues. Because if water is going to sit up next to those blocks over time, it literally just seeps right through this big
10:06
cavity for to just just sit in. Yeah, yeah.
10:09
And then it sits and comes down to the bottom of the wall. I mean, I didn’t know poured now, when I see a poured concrete foundation. I was just think it’s the holy grail of all foundations. I always used to just kind of dismiss that. But block foundation properties when you’re talking about property that’s like 1960s. Maybe not. Yeah, in the 70s as well. 52. Yeah. 50 6070. Yeah. I think poured concrete really started coming in like the 1980s.
10:34
It was in before that. Yeah. Was it? Yeah, there was just a phase. There’s like aluminum wiring. Oh, yeah. It’s just a phase. There’s properties built in the 30s that have poured concrete foundations. Yeah, yeah. Yeah.
10:44
Ours does. Down by that one. Hamilton’s it’s more it’s not like the smooth poured concrete. But that’s essentially what it was. But I’ve had to pour concrete foundations in a bullet that have both cracked and Lee fills, I mean, it’s just easier fail, because you don’t have to you just just an injection, you know, inject What does that epoxy into them? Yep.
11:02
So that makes life easier. And a lot of insurance policies don’t cover for any sort of sewage, any kind of water, sewage water backup, unless you add on a different kind of writer to it, or whatever they call it as a writer, you’re adding on to the insurance policy. And most of us don’t know that until it’s too late. So if you’re listening to this, and you don’t know what your insurance policy covers, call your insurance, because most of them have a lot of different options now. And there’s a lot of better ones for investors that have a lot of different things as well now. Yeah. So what’s what’s happening in the St. Catherine, what’s the latest state of the market that you’re seeing specifically in the Niagara region?
11:36
inventory is low pressure going south. I this is the first year I think I’ve done multiple deals in Welland in the span of like a month, because it’s just like, it’s just inevitable. And I was telling you this yesterday, I can’t I don’t know what they’re thinking. But if you’re familiar with Niagara, they’ve got on ramps from Ontario street 406 Jordan road, they’re all closed while they’re doing the bridges and the service roads are jammed. And getting in and out like that. I think the thought process of the cities or the towns in Agra and the planning departments it is they’re clueless I don’t think they were prepared for this for some
12:16
reason. I feel like they’ve been working on those road through St. Catherine’s of the QE w in around there. Since I was born. Like as young as I can remember, there’s been construction going on in those areas. There’s multiple bridges that you have to cross little bodies of water. I said one guy that’s building they think the guy building our office, there’s like one person if you drive by on the job site, there’s like one guy I’m like, is he building the entire building? You know, so? So
12:43
you’re Why are you surprised you’re out in Welland? Like, why are you kind of laughing when you say oh, well, and because we’ve been seeing well, and now for like, at least the over a year? Yeah, I think it’s because you’re from St. Catherine’s and you think going out to Whelan’s crazy. Yeah,
12:56
we’re just, you know, like, well, in his has started to change, you know, growing up or whatever. was pretty depressed area for quite a while. But definitely there’s a there’s a lot of development there.
13:12
So what we’re seeing right across Ontario, there’s all these communities, because I was just talking to Mike about this in the same in the London area. He was shocked how much he seeing in St. Thomas, which is outside of London. And it’s a lot of people in London, who can’t afford London, Ontario anymore. As crazy as this might sound to some people, especially in Toronto, that they’re moving to St. Thomas. Yep. So Nick and I have been talking about this, how there’s like this spillover effect happening in all these communities right across Ontario. St. Catherine’s is another one. People in St. Catherine’s can’t afford a lot of what’s happening in St. Catherine’s. Because in the last year, last few years, we’ve seen price points move in St. Catherine’s. When we first started investing in there, maybe five years ago, JP we saw like single family home three bedroom driveway up the side. 275,000 bucks. Yep. Do you remember those days? 275,000 that house now is what? 475,000 bucks? Oh, yeah. Okay, over $500,000 it could be Yeah, absolutely. So what’s happening is the people in St. Catherine’s can’t afford that anymore. Because people who used to live in Hamilton that can never can no longer afford Hamilton because people from Toronto who couldn’t afford Toronto are going to Hamilton and people from Hamilton are coming to St. Catherine’s people in St. Catherine’s are now going to Welland Ontario. So there’s this like massive spillover effect that starts with Toronto proper, and just is rolling right through Southern Ontario, and it’s affecting all these tertiary communities. And it’s not only driving up prices, it’s driving up rents. So what are you what are you buying? For what price point are you buying on in Welland, Ontario to paint the picture for everyone listening?
14:39
I would say for something nice. on the low end, you’re probably like 380. And then what kind of property is that? It’s a newer townhome, unfinished basement, but it’s like, that was a recent one, but it’s like four years old.
14:53
Four, and then how much rent Are you getting on? That kind of property hasn’t
14:56
closed yet, but it’s going to get? Probably like 19 1950 1950
15:02
so that that’s what we were getting 1750 on fully detached single family homes. The St. Catherine’s few years ago. We were shocked now on a townhome and Welland getting 1950
15:12
So, but it’s not just there, but it is funny. I have been going to Simcoe for a long time with some longtime investors, with Rockstar and this year have noticed competition in Simcoe on properties it was we were both looking at properties like multi units, like little duplex triplex.
15:38
What’s the price point?
15:40
The one they just purchased is about 340. It’s a turnkey duplex. And before that they had the stomach for some some properties that were a little less desirable. And then they would go in there and renovate them increase the rent refinance that whole thing. But But yeah, now those same properties are getting snapped up. And so
16:04
340,000 what do you think they’re going to get in rent on each unit in the duplex? It’s a duplex you said yeah, but so ballpark me the rent?
16:12
Probably 2300 per unit. No, no, total total. Okay. Plus utilities.
16:20
Plus utilities. It’s completely separate everything.
16:22
Okay. 2300 plus utilities for three, four. Yeah, it’s crazy.
16:26
So they’re happy turnkey,
16:28
like beautiful. And then on my and someone just asked me the other day about St. Thomas.
16:35
Don’t point I’m sorry. Oh, yeah, I’m joking.
16:40
So if
16:41
you were trying to steal a silver Where’s you’re doing? Yeah,
16:46
St. Thomas just came up in a conversation the other day with an investor. What about tilson Burt What about seems
16:51
to be so pissed because St. Thomas’s has been his little jewel. Oh, is that right? Yeah.
16:57
And then I called my sister The other day I said, What’s the soil like? Like, I was driving from St. Catherine’s to Simcoe and there’s a hot down Highway through the court like that highway three quarter which, like it’s all the windmills and like I used to think it was just kind of like boonies and
17:13
paint the picture for everyone where Simcoe is or you’re talking between like London sarnie? Yeah, so it’s it means there is a Cinco de Windsor. It’s
17:21
not as far as that it’s not as far it’s about an hour and a half. What
17:26
South Simcoe as well.
17:28
No, Woodstock would be just north of Simcoe just slightly northwest of Simcoe but where Simcoe would almost be like 20 minutes from Lake Erie. So, like port Dover long point to the point of that Simcoe
17:45
Yeah, up north was
17:47
Yeah, it’s South here direct sounds different than mine. Yeah.
17:50
brand. brand.
17:52
Sorry. Sorry. There’s don’t get confused. There’s the town of Simcoe and then there’s the the the county of Simcoe which is like Barry, are they Okay, the county of Simcoe is south of brand know the town of sin. Oh god, it’s in Camden. Yeah.
18:05
Okay, God, yeah. You’re talking about the Simcoe County? No, no
18:09
Simcoe the town. Okay, so North so goes Niagara Haldeman county and then Norfolk County, but
18:16
that highway directly south the brand for
18:18
Yeah, so that highway three corridor that runs along parallel to Lake Erie I was shocked not shocked because I’ve been going there for years. But like, I just noticed how much traffic is on that road now. And with the the kind of rural property stuff I’m always curious on where the good farmland is because soil has a lot to do with things and so I called my sister I said where where’s the good farmland around here? So she was telling me why arrest her know this answer. Because she she’s into she’s soil in? Well, she just knows a lot about it because she worked for some company that did organic certifications or something like that. And just with what she does now, she just knows a lot about the agricultural industry and stuff. So I was just curious because I was thinking okay, maybe Simcoe is a place to buy up some of that farmland. I know we were talking about you talking about that waiting. I’ve lost farmland. Yeah,
19:13
they’re
19:14
either you’re going to buy or die. And it’s going to have it but Okay, so you’re just noticing traffic and it’s a good Oh, yeah. Yeah.
19:20
And all those little towns like there’s like five different towns along that corridor. And there’s going to be development there because it’s not in the greenbelt.
19:31
And you see it happening.
19:32
You can see them on the map. Berg Delhi Simcoe, Nancy Koch. Yeah. And even men exactly that he’s done film for Cobra. And we don’t have any part Colburn. There’s,
19:41
but there’s K. You good. Jarvis Canfield, these tiny little blips on the map. But like in Jarvis, for example, there’s like
19:49
this, this town of Simcoe Yep, town of Simcoe, this town is Simcoe. Nick, are you able to google it up? You have your Google? Yeah. So what’s the population of this town? Okay. 50
20:00
probably not even probably like, maybe 30 to 50. I don’t want to say 15,000.
20:07
town of say,
20:08
Well, I was saying 50. Total. You’re saying 30? To 50,000? Yeah, no, I don’t know.
20:13
It’s 13%. Yes. 50. Okay, listen, here’s what’s happening. And this is why like you’re sitting here saying I don’t I think JP Yes. By the freaking property as much as you possibly by listen town of Simcoe 13,000 people. Over the next 20 years. 3 million people are coming to into this province, into the GTA, which we’ve already discussed how it’s going to have the spillover.
20:37
And the freaky thing is if it goes up 13 1300
20:40
people, if it Listen, in 10 years, it goes up 1300 people, that’s a big difference in that.
20:46
percent population growth. If it goes up 13,000 out of three, let’s say out of the 3 million people that are coming to the GTA 13,000 somehow find their way to this town, the so called mythical town of some places. That’s 100% population growth here. I’m tired of being shy about this stuff. Like I think I’ve been feeling like nice about it for so long. The population is going is it’s not even going to it’s exploding in front. It has already Yeah, it’s it’s exploding in front of our eyes. Like I think part of what we’ve done here at rock stars we’ve been very good at being humble about, yeah, we think we have some ideas about investing and will always protect you and always have your back. I feel extremely at this at the top from the top of the mountains. If if the population growth is forecasted by the housing authority in Toronto, to go from 6.7 to 9.73 million people, I think they’re probably underestimated, because they always seem to seem to underestimate population growth, then what happens to all of these communities? And then what happens to all the other prices of all these duplexes and all these single family homes and these townhomes? Like we’re in the middle of seeing it. And I think the unfortunate part for us is because we’ve grown up here, we’re going to miss a lot of it, because you’ll be like, Well, I didn’t I don’t think a property in Sydney can go from three, I don’t think a duplex can go from 342, 500 and Simcoe, you know, going and and yeah, and 20 years from now, which seems like a long, but it’s like a long time, snap of the fingers. I think we’re in for
22:11
20 minutes, or 20 years is a long time. Yeah, look at what just happened last 10 years. Yeah.
22:17
So that’s my point, like, this is what we’ve seen, because like 10 years ago, again, there’s a lot of factors to consider here, because there’s interest rates and the global economy and stuff like that. But I just think the population growth is driving demand so much here that if you can buy properties that kind of pay for themselves. It just feels when you look at the data, like it’s the right kind of move. Say that I feel like Like,
22:44
literally I feel like anywhere you go basically from lakes, like lakes barrier south, it’s like, yeah, it is,
22:55
I went down to I don’t even know how I got the invite end up my inbox, but it was like a, there was only about 40 or 50 people there. And it was on in some Bay Street building. It was all it was some developers and all institutional investors. So there were some people there that ran like funds that have like one trill there was one there that had over $1 trillion under management. Yeah. Right. So that’s the type of people that were talking about this. And we’re talking about real estate, and you know, and so I sat in, it was actually hilarious. I text him like, I wish you could take a picture of this because I’m there in my jeans. And like I just kind of light spring sweater. And every other person in the room is there in a formal dark suit, you know, that I just come strolling into, like, Who the hell is this dude, but so I’m sitting there, and I’m just kind of like a fly on the wall. And yeah, they’re talking like that level without amount of money. And a lot of these big developers and big, big people that are putting a lot of finance behind a lot of these developments. They’re like, Look, man, there’s a clear shortage in housing here. Like there’s and and it’s not just housing, it’s the land. They’re like, it’s there’s a land grab going on right now. And they’re they these guys are trying to scoop up land developable land. That’s, that’s not in the green belt as much as possible reasonable prices now, because they see it coming, even though they’re buying past the greenbelt. They’re buying what’s the what’s between the developed land and the green belt? So what’s left? Yeah, which is what do they call it? Like the white belt or something? It’s like the first it was like, the first time I had heard that term, but, but, and even industrial land there, they’re even looking industrial and industrial. vacancy rates are like an all time low industrial, which think you wouldn’t even think about that stuff. But they’re looking at scooping that up, because they’re just like, Look, it’s there’s not enough. There’s not enough supply right now right across the board for the population growth they’re talking about and if these other jobs are coming in that type of thing. And it’s going to happen in these outlying areas because the forecast will populate for for employment growth is strong for Toronto for the near term and still strong afterwards. But it gets stronger for the outlying areas after that, right, that’s where the the forecast from Blue and Gold is going to be. So if that happens, so like this simple, you know, what’s this close to Branford right now. So let’s say brand for gold grows and employment and then people more people move to Brantford go from Hamilton. Even though prices are comparable now let’s just say the Hamilton becomes more expensive. So the move to Bradford driving up prices there were the people from Branford going to live there. It was simple because the prices are cheaper. And how long does it take to drive from Brampton to from Brantford to Simcoe but an hour he said 45 minutes away from the map that was looking at Yeah, 4545 minutes 45 minutes to work. I don’t know a lot of people do more than that every day. so fortunate man says he bad. How much house can I buy and Simcoe vs Branford. Now? That’s the spillover effect that’s been happening everywhere. Right. That’s the type of
25:31
years I think some people are picking up on that because some of the headlines, Nick, and you’ve talked about this in the past talk about condo cancellations. And some people will look Have you seen those headlines? Oh, yeah. Some people will look at that and say, Oh, yeah, there’s not demand for the condo. So they canceled the project. But Nick, can you explain like, why are they canceling condo projects? Yeah,
25:50
it was the it’s just costs, costs have gone like, like hard costs, or construction costs and soft costs, like permit costs. And just dealing with municipalities and all those types of things have gone through the roof
25:59
isn’t not also an element of like, it’s cheaper to get sued. And because the prices have gone up so much, they just changed their name
26:09
would be but they can’t actually get well. So what’s happened? And it was interesting, because I looked at some graphs before that I talked to one of the member of it. Yeah. And then these guys were talking about it that when I was at that event, and basically they can’t get financing after, right? Because once the costs of the sold, so where with where costs went. So let’s say someone sold a building in 2016, and was supposed to start being built last year or this year, right? costs have increased so much that they actually can’t get financing, because the banks are looking at the numbers. They’re like, well, the records the funds anymore, because you’re actually costs have escalated so much, you’re gonna lose money in the project. Right? Right. So they have to cancel. So yeah, there might be. So look, maybe there is an element of greed here and there as well. But there also is some that’s an element of actual people, really, they can’t do it. Like, you know, it just doesn’t make any financial sense for them. So that’s why these buildings have been canceled. One guy that mentioned that his his concrete cost went from $9 to $14 a square foot in the last two, two or two and a half years. It’s like those types of costs that have just jumped
27:08
up, I don’t think it’s just canceling it because prices have gone up. I think they have to increase the price because their margins are getting squeezed because the the build is going up between the time they sold and when they go to build. So the margins are squeezed. Cuz what are the margins from these developers that Nick that? Did you just Yeah,
27:22
I was looking at know, I was looking at these numbers and the margin on
27:25
on that businesses, let’s say 15%? Yeah. And costs go up, your margin just gets squeezed down to the point where I can see where the bank’s not going to fund you the money to do the project now. Yeah.
27:34
So So the example from you know what one of the slides that I had, I don’t know if the source right here, but they were looking at construction costs that went from 276 and 2016. To 359. And 2019. That’s an extra 76. To what? 359? Wow, 6359? Yeah, so it’s a, so we’re talking like $80, 76,
27:55
half of today, we’re talking about like, what 40% increase.
27:58
But if you look, give you the total increase one from 525 to 805. When you take in land construction, soft costs,
28:07
soft costs being like, regulatory, yeah,
28:10
all this stuff. Because those are those have all increased dramatically to all the municipalities are getting more and more of their cut, which the developers have been complaining about. But in this example says like an average project, the margins and I mean, look, take it with a grain of salt, but the average project, the margins went from 14 to 8%. And this is accurate. So I was talking to a builder, who I met recently, who recently launched a project and his margins were going to be very, very tight and he had to make some pricing adjustments. Accordingly, really like like,
28:37
very laser Walker, they had pre sold, some of the units are know they were
28:42
about to launch. So they set
28:43
the prices, they’re about to go to launch here to raise them. So how did they know that they were screwed? Somebody came to them and said, Hey, the cost to build is actually changing.
28:51
Someone came and recommended that they increased prices. Okay, got it.
28:54
So they had someone who had built they had someone that they were SWAT spoken speaking to, and they recommended the increase increased price. Okay, but increased prices because demand will justify the prices or because the cost of building gone up.
29:06
The I mean, I don’t know the exact details. I don’t want to get into too much more detail than that. But that’s that’s kind of what happened. Got it.
29:14
Why? Because you’re releasing the address.
29:16
No, because I just don’t I just
29:19
got it. Okay. Yeah. And that’s what that’s kind of interesting to me. Sometimes. I think what’s happening is the cost of builds going up so much that it’s not always just Hey, we can get more to sell. Sure. It’s we have to increase the price because the costs are going up. labor costs hard costs, soft costs, like everything that you’re
29:34
saying carbon tax. Yeah.
29:38
So when you meet investors now like what are you doing, JP Are you taking over because the running joke before was that you were selling stuff in Hamilton to investors? investors were buying properties there. So you were traveling from St. Catherine’s to Hamilton. Now? Are you just taking investors into the St. Catherine’s Niagara region?
29:55
No. I would say Niagara for sure. London for sure. Morning. While
30:04
so what do you do in London?
30:06
a
30:08
duplex like little multi unit. So how much England family homes? I would say I spend most of my time between Nagar and the London and London.
30:15
Okay, and so how much what are the price points on like, some of the stuff and
30:21
it depends on what you’re getting. Like a higher end turnkey like everything split big rent. That’d be like for a secondary suite would be like 660
30:35
so that was a deal. How much are they going to rent that out for
30:37
it’s 1895 plus all utilities for the main unit Okay, it’s basically a three bedroom house
30:45
and now
30:47
it’s all the whole house and then he built a big addition as the second unit and that one is 5095 plus all utilities so everything new like separate furnace separate AC separate every Okay, so he
30:59
bought it and then put more money in to get that second unit.
31:01
No, this investor bought it from the guy that redevelop the property. Oh, God. Yeah,
31:06
the price you just said was the whole price correct? Okay. Yeah.
31:08
Well, Airbnb out there. That’s this time of year with anyone that’s
31:12
new Airbnb, Airbnb. You know what I haven’t? Not in London, Airbnb. I have some people that are doing it in Agra. Yeah, that’s
31:21
Yes. That’s sorry. That’s where I was. Yeah.
31:23
But yeah.
31:27
I don’t want to Pooh Pooh the.
31:29
The St. Catherine’s and planning and zoning department because they’re against it. Oh, my God. They’re just they’re
31:35
I think they’re against it just because there could be so much of the tourist Airbnb stuff. Honestly, I
31:39
just think that they they were not prepared for the onslaught of people and investors and the whole thing. It’s just a debacle at the city level. Like there’s like they’re they’re messed up like they’re trying to fix it. But like they are understand we
31:55
overwork
31:57
Catherine Yeah. Yeah. Because you think so many people are coming up trying to do legal second suites, they can’t get the legal sector
32:03
and they don’t know what’s Airbnb, they just don’t have the systems or the resources or from from, from, like, from people
32:10
that work for them. That’s the huge downside. See, part of the population growth, which will be a big opportunity for housing is the downside on the social services. Because this is where the federal government really I think messes up because we have targets on immigration in this country. And the 2018 target was 310,000. That was the target for 2018. Our immigration into this country in 2018 was 425,000. That data just came out in March. So 310, we overshot by 425. And we are a pro immigration. This is not an anti immigration talk. So we went over in Canada by over 100,000 people. And I think somewhere in the federal government sighs they think that’s good. because more people in the country and especially we had a lot of high skilled labor in here as well. More people help the economy, people start working it Yeah, we’re not ready for it.
32:58
But yeah, when we the systems aren’t
33:00
when we don’t have is matching the social service growth to match the population growth. And that’s why when I when we always talk about the destruction of the middle class, this isn’t just from a housing point of view. Because over the next few years, when you and I can’t get quick access to health care, it’s going to be the people who can pay for healthcare, they’re going to go to Buffalo or to the states for their MRI, their life’s not going to be affected greatly. But the middle class here will be destroyed because our health care services, there is no way I’ve seen nothing about how our health care services are going to match the population growth in the GTA.
33:33
And just think of an outflow turns into a destination know the world is turned upside down.
33:40
To get MRI.
33:43
Well, who’s the governor there that wants to go train to go into New York State get out? Yeah. Is it Governor Cuomo or whatever? I forget, there’s a governor. And yeah, he was like tossing around the idea in one of his speeches that he wanted the go train
33:55
to cross the bridge buffalo.
33:56
Well, I don’t know if it was buffalo or Louis. I don’t know exactly. Hosting. I don’t think it’s Niagara. I don’t know where. But they wanted it to cross the bridge. So the St. Catherine’s line to go all the way into New York. Same like, yeah, this guy’s know, you got a population base of 9 million people that would be connected into the top of north end of your state. Yeah. via the go train. Yeah.
34:15
But they tried that with the ferry to Rochester. You saw that work,
34:17
though? Yeah, I don’t
34:20
know, turns out enough problems. It’s not crossing over into another country. But I mean, they see the opportunity, then sure, you know, but the social services thing kind of bothers me a little bit. Because I think that’s where ultimately, people are going to get prey. Like map with the next 20 years, a lot of the stuff we talked about, that’s an opportunity for investors is actually all negative. Because the negative aspects of this, our social services are won’t keep up. And maybe that’s just my pure lack of faith and politics and politicians. But I don’t think we will have done nothing to make you feel they have to keep.
34:49
They’re always reactive to it, right? So like,
34:51
I’m positive. It’s weird, because I’m positive on the real estate investing front. And I’m totally negative on everything else around it. Because social services won’t come up. I don’t think transportation, yeah, movements are going to
35:00
clear we’re all taking advantage of it. But that it’s the same thing that you’ve both been talking about the whole time here it like this, just the way the system is if if everything is in a four year cycle, and it’s if you’re going to get elected on growth, you’re not going to say we’re going to shrink the economy. And that’s how we’re going to get elected. If the whole conversation is about infinite growth and infinite growth, but it’s only a four year cycle, so nothing ever gets done. So there is no solution. It’s just the way it is. Yeah,
35:30
we needed there’s no needed dictator.
35:35
choking, but yeah, no, you’re right, you’re right. Nothing gets fixed, cuz you’re just trying to win the next election. This is like this is actually a debacle happening in Syria, but it presents an opportunity for those who own hard assets.
35:48
Right? So yeah, while while I’m complaining about, you know, the lack of city inspectors to come and look at secondary suite, you know, conversions. At the same time, it’s, you know, cuz I’m sure we’re talking about what at the same time, it’s like, okay, eat that for Okay, in five years, or a year looking back and going. Okay, that was
36:10
never made, one who got invested in property. 10 years later thought that was a negative maybe one or two years later, they, but here, so what’s the flip side? Like? What’s the negative? So let’s say we continue to get population growth. But the negative to us are the threat to us, because we’re always short term paranoid and real estate is what that interest rates, the bond market goes crazy, no one trusts the government’s anymore, and the bond market spikes. And there’s there’s interest rate spikes, right. So interest rates could just go up long term fixed rates go up, I can’t see the bank of the central banks or the Bank of Canada raising the variable rates. But long term rates go up. Like I’m just trying to think like, we have all this opportunity as population growth. But the negatives are, there’s a financial crisis. And either interest rates go up, which I can’t see happening, because I think the central banks would stay up in not make it happen, because they can’t pay for the interest on their own debt. So that can’t happen yet. We don’t have the crystal ball. But let’s say that like that will be fought against pretty aggressively. So then the next challenge would be credit freeze. The banks just say, holy crap, there’s some financial problems in the world, we’re not going to release mortgages, that’s are pretty much our biggest threat, because then the real estate market would come down. And I don’t even know if there would be a correction of any sort, because are so much population growth. But I don’t think there would be growth in any price points. Because if there’s no credit, the whole real estate market is driven on access to credit. So then we could say, okay, we’re getting all this population growth, but the prices aren’t going anywhere, because the real estate markets not moving and the prices came down. If demand dried up, enough prices come down. So I was done another don’t go anywhere. We’re not crossing the main I’m seeing demand would be there.
37:50
But if they can’t, if they can’t qualify for and people still will still have to sell because of live events and stuff like that. They’re going to set lower prices. Yeah,
37:56
right. No access to credit. So our biggest threat to me is no action, credit, financial institutions seize up, and they’re like we’re not going to lend. And if that’s the biggest threat, how far down can prices go? in a short period of time, with population still increasing? That’s what I can’t figure out. And I don’t know if I’m simplifying it too much. But I’m like, massive population growth, but are worse you I
38:19
think you are when you’re talking about those like kind of white swan events or to cause cause real ripples in the bond market or liquidity or stuff that stuff like that. Yeah. Because you don’t know the impact can be great, because it can really hammer things because you never know what’s going to happen because you don’t know the event. If you’re talking about normal market forces, then it’s easier to talk about, but those things Who the heck knows what happens. Right. But regardless, I mean, it’s like being in control. But the thing is, you
38:42
have full control.
38:44
But the thing is for the people that own properties, they’re in a good, they’re still in, regardless of what’s happening with the property value will know because the demand for those if you’re owning like an income property for the rentals, the demand for rental skyrockets. Yeah,
38:56
that’s a good point. And nobody’s gonna actually Yeah, that’s a good point.
39:00
We’ve already seen it, like, just from the mortgage changes that happened was that about a year? Well, they came into effect a year and a half ago, they were announced just over that, right, just like almost here 123, quarter years, it was more like October 2017. So from that point, that once all the kind of the squeezing of the amount of the affordability kind of tightening, cuz people couldn’t qualify for mortgages, once that trickle down into the rental market. How many investors have you heard now like rents popping up the high demand and that type of stuff, it’s all over the place, every like, I mean, Toronto, like everywhere, all surrounding areas, Toronto, the demand for rentals is, at least in my experience in the since we’ve been doing this is higher than ever. And it’s it’s part of the reason is because of those those mortgage changes, which we were talking about at the time. Now, investors freaked out, they thought that was the beginning of the end. I’m like, you know, what, just give it time, the market will self adjust. Right? So one small government change, to your point with all this immigration with the population growth is other things going on, once more government change can’t stop these bigger underlying trends. Like they just can’t they can’t do it. Right? Because there’s too much other stuff going on. So if that continues, then yeah, even even the stuff we were talking about the bond market and liquidity doesn’t really
40:10
have it. As long as we have this crazy population growth here. It seems like property prices might change that’s going to have
40:17
to slow like they’re going to have to slow it down sooner or later. Because to the points earlier, the infrastructure is
40:24
great, but what happens relative to the rest of it? Are they Yeah, that’s why because relative to the rest of the world, let’s see there’s a financial crisis that is a bit of a global one, maybe relative to the rest of the world, we still look like the best place to be, and people just like poor in here. Well, I mean, I say the argument like your here’s my thinking, maybe the population growth we’re talking about right now, isn’t the it’s maybe we’re way under estimating. Like what happens if the forecasted population growth of 3 million more people by 2041 in here, according to places to grow in Ontario, and this new Toronto study that came out I wish I had the freaking link to it right now. But we can actually, Alex You know what, I’ll give you the link
41:03
and we said is
41:04
3,000,003 million more people forecasted come into the Greater Toronto Area alone, okay, by 2041. Okay, so population from 2016 will go from 6.7. Sorry, 6.7 million in the GTA to 9.7 by 2041. The Golden Horseshoe already has about 9 million Yeah, so the Golden Horseshoe will go from nine to at least 12. Yeah, and likely more. But But what happens if that population forecast is low? Is what I’m thinking? Like what what happens if that’s like the low Mark that’s not the high if that’s what the government’s forecasting let’s say the population growth is more than that. So this is the part like maybe simple as going from not 13,000 to 15,000 maybe you should seem close going from 13 to 50 over the next 20 years that can’t happen that’s too crazy
41:49
now he just draw a big thing between
41:52
Ottawa
41:54
This is a good place to like drop
41:56
the whole thing just by there
41:57
and then think about this is like I was just heat up because I’ll never forget when I went to went to Cairo cuz how you guys were talking about it not actually said that population not stopping when I went to Cairo it really felt like you could get Egypt Cairo specifically the city where a chiropractor No no, no, no way to kind of God they are the it really felt you could get rid of like half the people in the city. Like I mean half and it would still be packed. So I was like, I just looked up like a list of cities by population density, Charles not even on this list. It’s like there’s probably like 5050 on this list. I told it’s not even close. And I mean New Jersey is way down the list. Paris is there so like, even though it’s already packed and the roads are breaking, you know QE Wk you know, it’s it’s, it’s already packed there’s still a lot of a lot of room to go. I just want to see where Kairos is on this thing. Kairos far down the list and I swear that I was breaking in that city I
42:52
works with us here and now came from Mumbai. Yeah and heat to get on a train JP I don’t if you know this, you know, those images of trains where you see people like CNN, so yeah, I was him on train. So he comes to the go train now. And he walks because he’s, I think he said he was even texting his friends back in India like holy smokes. You’re not gonna believe the train that I get to right now. And one time he was hanging off the side of the train because he was only he fell off the train. Can you imagine falling off the go train this
43:18
up this. That’s what that’s what he saw. See, the train comes in. And then see the crowd of people. And then they just all rush before the see the train looks full. wait to see on if you will fit on the train.
43:28
That’s what he said. He goes, Yeah, we just don’t feel good. Yeah. So if you’re listening to this, you can’t see what Nick’s showing. It’s a train with probably like, what is that? 15 people, 10 people deep 15 people on the planet. And finally, zero
43:38
regulation for how many people
43:41
are hanging out the doors.
43:43
If you see the doors open, there’s two waves. There’s the first people know.
43:48
And he said, it’s legitimately like that, man, we are lucky.
43:51
So you if you can’t see this, you have to understand that the train is pulling to the station. It’s not even stopped the doors open. And some people Nick that’s a different video I saw the doors are open. And before the training, I saw that people are diving JP they’re diving into the train. And because the train is actually still moving, they’re getting like jostled around and smashed around in the train. Because they’re trying to get in before everyone else so they can get get fit into this thing. And then he said there’s two waves, there’s the first rush of people. And there’s a second rush that pushes the first rush to get the last few Yeah, yeah. So so.
44:23
So
44:25
from a from a political perspective, what’s the easiest way to maintain growth? Is it not? is just the simple answer, not just bring more people, because it’s more tax revenue. It’s more I yeah, I mean, okay, that’s what
44:38
really comes to my mind. A lot. Like without doing a big thought experiment and brainstorming this, the first thing that comes to my mind is that you must match the population growth to the social service growth that made this
44:49
country
44:50
so good. Like, don’t we have to, like match the growth of the social services? Do we,
44:55
when it’s so poor and other places? That’s why they’re coming? Oh, yeah.
44:57
Oh, no, no. Okay. To your point relative to other kinds. Yeah,
45:00
I don’t think we’re doing what’s right. I’m just saying, Yeah, you’re a politician? How do you campaign on something and say, This is what I’m in it? Because it’s all about the jobs and the economy and whatever, okay, it depends what party, whatever. But like, you’re right. So what that’s their solution? Most of them, right. Like, even even the more liberal minded parties still want population growth.
45:27
Right? How can I be so pro Canada and feel like we’re screwed at the same time? So pro Canada, and so pro real estate investing in this area? And also feel like we’re all screwed at the same time? Is doesn’t even make any sense? Yeah, no, you’re right. Because I don’t think they’re going to solve anything. And you don’t have to improve the social services, and relative to many parts of the world of social services are still great. Look at the social services here compared to our neighbor in the US. We have free health care, right? So I mean, don’t get free daycare Now, like I used to pay for daycare isn’t like Junior kindergarten, full. Nick, did you kindergarten full day now? Yeah, I used to pay. So for us, it was either some schools were half days or every other day. So one of the schools we went to was every other day. So we have to pay for daycare. Carolyn and I for the other days. So now you don’t even have to pay for that. Because the government pays for full kindergarten. Do we pay we don’t pay for anything for kindergarten, I don’t think anyway, full kindergarten is paid for health care’s paid for it’s a beautiful place.
46:25
The liberals were going to pay for that they were running on that one day, something I forget, there was something about that, but it didn’t go through with it. But it’s going that way, there’s a party is going to get elected that will put that in place. Like I’m telling you, it’s coming down the pipe.
46:40
There’s no money for it. But it’s like if
46:42
you extrapolate this all further, to your point, JP politicians aren’t going to solve anything, but they’re going to just keep spending more money. We already have this massive accumulation of debt in all these industrialized countries, including Canada, including the province of Ontario, interest rates are not only going to go lower than they are now then there we’re going to go negative. My brother in law just sent me something I have to read this text something about negative interest rate mortgages and like Denmark or something, I’m not just talking about bonds, where you buy like a bond with a negative interest rate something about a negative interest rate rate up mortgage. So I got to look into this next time we talk I’ll have the answer. Because in my mind, the way that works is they putting money in your bank and you get money. You get paid
47:24
to own property. Yeah. Wow. That’s a different way to do it. Yeah. Cuz house, why have tenants
47:30
if it’s an interest rate that you owe, and there’s an amortization schedule on it? Yeah, I have no concept. I can’t even conceptualize how that actually works. So it must What about
47:42
this is out there. But like, other forms of, of,
47:48
I guess monetary sort of trade or what you know, maybe, like look at this silver sitting on your desk, you know, or just simply I know bartering is illegal technically. But could you see a day when that becomes boundaries? legal?
48:04
I’m pretty sure it is. One way I know I can trade Tom for something.
48:08
No, but as a business, but can you handle there’s the barter exchanges. There’s an x, which is a big barter. Yeah. Oh, is it? Yeah,
48:14
okay. You can only barter like you. You’re required by law to take Canadian dollars as payment for something right. That is that they want tax revenue. Yeah. Well, yeah. So that that’s different. So you can’t be like, Well, no, I don’t take dollars. I only barter that
48:28
doomsday scenario. We’re like, just barter. I don’t think it comes to that. There’s always going to be some sort of currency. No, no, I
48:34
know. But what is that currency? I guess that’s my question is is is it going to be? See the government always is going to want their hand in the pie? Always. So I guess there’s no real way to escape. Yeah, yeah,
48:43
you can’t. The government always wants
48:46
their hands in the pie. They have the pie and you’re just trying to take a nibble off the side before they smack in the head. I know.
48:52
Because we have to pay. This is where the whole big Bitcoin debate kind of falls flat me is that I love the idea of a digital currency. The ability to send money from media you using a cryptocurrency, like a Bitcoin is absolutely brilliant. But when the government mandates that businesses pay their payroll taxes, how often do we have to pay payroll taxes that weekly or monthly,
49:11
monthly?
49:12
So we have to pay our payroll taxes monthly, we have to submit HST monthly now, yeah. So we pay HST monthly as a business, we pay payroll taxes monthly, how am I going to be as a business owner be able to accept Bitcoin? When the Government of Canada mandates that I pay the taxes in Canadian dollars? This is where I don’t understand any of the Bitcoin stuff? Because I’m like, Yeah, I absolutely want to accept your Bitcoin, I absolutely want to accept it. But then I have to take the risk of the Bitcoin either going from what is it $9,000. Today, either back down to 6000, or up to 15,000, within the next month, which it may, and let’s say it goes down to 6000, then I have to pay taxes, and I don’t even have the money to pay my taxes. So because the government of Canada controls the currency in which you have to pay taxes, they win. The only way Bitcoin wins is entire financial collapse. And we have another media exchange. But unless the Canadian government allows us to pay our taxes in a different currency, and as an individual, I get it. Okay, Bitcoin can make sense. And you can argue back and forth, this is the money we should all use. But is that from a business point of view, when you have to submit taxes on a such a regular basis? How do you use a cryptocurrency? No one’s been, you know, like, no one has been able to answer that question for me. And everyone who’s pro Bitcoin just absolutely gets infuriated with me. And I’m the one even saying I’m actually neutral on it. I actually like the technology. But when you can’t pay your taxes, and it gets frustrating. Anyway, back to your doomsday scenario really quickly. If if there’s some kind of financial collapse the the the solution is they just come up with a new currency, right? And whatever old currency you had gets converted into the new currency, the government’s still keep control.
50:47
That’s what they’ve done in other countries. Yeah,
50:49
right. And that’s what they could continue to do now. Like the International Monetary Fund could come to Canada come to the US and say, Oh, my gosh, you guys are broke, we are going to magically create some SDR special rights is a form of global currency. Here you go, Canada, these SD ours are worth, you know, $18 billion. So we magically just created and now on your balance sheet and your country, you can print off another 18 million and disperse it out to people. And then it means everyone who’s listening all the investors, you’ve been helping you own hard assets are going to continue to win because the value of the currency is going to go down and down and down. And those who own hard assets are just going to get more and more price point increase on their hard assets. Now we’re turning this into a just a random shit. Anyway, I think yeah, it’s an interesting topic though, right? Because it seems like that’s where we’re headed. It just a time frames. You don’t know if this stuff’s going to happen in one year or 50 years. So you can’t live your life for that kind
51:46
of scenario talking about farmland Where do I what kind of farmland are you finding me to buy?
51:52
I know that you asked me to find you something that was more approachable and after
51:56
50 bucks I don’t want to spend when I when I realized I have to pay all cash in sit there for a long period of time. Yeah,
52:02
and
52:04
I probably in hindsight, I probably should have just looked a little harder and found something a little bit more approachable but that’s fine
52:11
some farmers go buy them land
52:15
oh it’s not hard to find.
52:17
I want chicken farmers
52:20
go talk to my cow I want to pet my cow and I want to eat my cow in the BBQ later
52:25
I don’t wanna I don’t want to kill it I’m not that person can’t do it.
52:29
there there there is stuff out there but I guess we were talking about this but if you can get a house on it then that that will help because at least you all yeah he’s right financial
52:38
that Porsche
52:39
you know and get income from that from from the house
52:42
and then the house and then the farm and then at least at the farm the property tax rates are still better one. Oh, yeah. Just being used as farm Oh, yeah. Yeah. Yeah, that’s that’s an area I don’t know much about that farmland stuff. But I just want some
52:55
Yeah.
52:57
Especially from a from a value perspective. You know,
53:01
with all these people coming they’re going to be food. Kraft Dinner is only go so far and some of
53:07
the price per acre in some spots in southwestern Ontario is nuts, like expensive or good deal expensive, because it has its high producing. It’s very
53:17
talking around the city of Simcoe Newtown.
53:19
Well, I heard I tried finding it I couldn’t find anything but the team like the Teachers Association or Board of London apparently was buying up farmland for their like pension funds and studies teachers
53:34
owning everything while they sold it. Once they sold their stake in MLC they had to like put the money somewhere, right? So really,
53:41
and why are they doing that? They’re getting a return because they’re running it as a farm. What is the pension fund buying farmland for
53:48
the future value for when they need the money or whatever it is?
53:52
So there was some percentage of their fund I guess they just
53:56
switch you can Yeah, but you can look at the history of the values go up very consistently over decades. So it’s it’s not that far fetched. It would be no different than a bank going I know I can buy that apartment building and and feel comfortable with my five 6% return.
54:14
No different just if they’re not operating as a farm. There’s no income component on there. They’re probably buying maybe they’re buying an operating farm. That’s what yeah, oh, yeah. Oh, sorry. Sorry. I thought you in my mind. It was farmland. No, they’re getting people to buy the land. Yeah.
54:25
But they’re going to build a farm and retain the income from that. Yeah. Old Enough. And they’re doing it in a large scale. So they’re getting you know, yes, it’s making sense.
54:34
So we just have to make we have to mimic the model at a smaller scale.
54:37
You’re not you’ve not gone from St. Cat Hamilton to St. Catherine’s to Welland. You’re going from Hamilton St. gathers dwelled to farmland.
54:46
It What do you mean? Like that’s going to be your next investment? Oh, yeah.
54:51
Oh, gosh, I have my I’ve got my heart set on one particular value at West
54:59
JP. Hey, if he keeps feeding these horses like
55:06
anyway, okay, so I just want to kind of wrap the bring this all together with an investor who starts working with you today. Yep, that wants a good property in a good area that pays for itself or produces some cash flow, where right now would be your first target area. They don’t care. Just take me to an area that you like JP,
55:26
honestly, like,
55:29
wherever the opportunity is, like, it just so happens that uh, there’s There seems to be a few communities that you can choose from an aggro, but London is still great. But that’s not to say that you’re not going to find opportunity and barrier Kitchener or wherever, but also just depends on where they’re located. And the logistics of of, you know, how far away they want the property from where they are or what their comfort level is around.
55:54
But it’s true. Yeah,
55:57
I know. We just had someone in here today who bought a four Plex and a tobacco. Yeah. And they’re going to live in one of the units rental, the other three units, renovate them. They’re going to increase the rents on those properties, renovate, fully renovate live in one and it’s going to be a great investment for them. And they’re in a typical
56:12
way. Well, I know a guy lives in tobacco has a he was in here today to I was talking to us has a property rental property in High Park and bought a duplex St. Catherine’s. There you go. Yeah.
56:21
So it’s wherever the opportunity you know. So I guess I guess just if you’re listening to this, and you haven’t kind of checked out any real estate investing, the options are pretty much everywhere. So it’s still important to sit down, figure out what you want.
56:33
The options are everywhere. inventory is still thin everywhere, though. So it’s still it’s still a bit of a, you know, looking under rocks and stuff to try to find these places, like the properties themselves. And you’re really hustling to
56:45
how many kilometers you’re you’re putting on your car right now?
56:48
ballpark it. Let’s just say this. I went 7000 kilometers over my little dinner on the thing that says your over your service date by like, 7000 kilometers? Yeah, no, I’m doing like probably 70 80,000
57:01
a year. Yeah. Yeah.
57:03
That’s the reality of trying to find properties.
57:06
To your point, I know you’re going to wrap up. And to your point about just that, it’s hard to find properties. The numbers that I saw that I put up that as of like, last month, the average on the multi unit properties that have sold in the city of Toronto, the average cap rate 2.7% off. Yeah, that’s how much money is going into the space. That’s why so then the other money drops down to those dollars. So
57:28
So whole other conversation with with investors that I want to say maybe are a little bit green, maybe that’s not the right word, but like they have a very high. Yeah, yeah. Yeah.
57:41
So and it’s so different. We just have people to join here from Alberta, where cap rates suffer? Yeah, well, I shouldn’t say cap rates, where rents are actually coming down and apartment building rentals, yeah, are coming down because of population decline. And people leaving and lack of just outright demand, like all the opposite forces that are kind of,
58:00
that’s one of the benefits that no one talks about right control. I’m not a huge reg control fan when you know, certain areas, but without the right controls in Alberta, they had a huge run up and prices, but you have a huge run up and rents can come back down and those types of scenarios to whereas when they’re held in check artificially, most of the time with these rent controls like we have in place in Ontario, it does provide stability to them. Right?
58:18
Right. This is the time and he was alluding to this as well, where some of the big players in Alberta are just scooping up properties, I’m sure as they can, I know this is a monster. But this is where the people who have money or because
58:27
oil is still oil. Yeah, like Tesla’s gonna go to business. Really.
58:32
jp, thanks for this man.
58:35
Hey, everyone’s hopefully enjoyed that chat with myself and Nick and john paul Gulbis. If you are listening to this, and you want a copy of a blueprint of an actual investor, who’s been buying a bunch of properties, who was kind enough to share all the information that we’ve worked together with an offer that out publicly, of course, we had to hide some of the actual addresses we put city. So you’re not going to see exactly where this person was buying in that city. But you are going to see the city here in Ontario that he was working in and that kind of thing, you can get a copy of that at Rockstar inner circle, com forward slash blueprint. So if you want to see what’s possible, perhaps for yourself, or just get an idea of what someone else has done, you can get a copy of that. And all of our situations are different, like a lot of people will come to us and say, hey, I want to buy 10 properties tomorrow. And for some people, it’s actually possible, you can go off and buy a ton of properties because of your income situation and your debt ratios. And that can end the amount of down payment money that you have and so forth. For for other people. It’s not possible, but you should understand over time, anything is possible. So if you’re starting out, maybe you have to start out just saving up for your first down payment, or starting with one property and then going through the frustrating wait to be able to accumulate your second property and go off and buy your second property. Sometimes having that patience is frustrating, but I can tell you it’s worth it. So it doesn’t matter what point you’re at. The whole journey is worth it in our in our mind. And if you want a case study of someone who’s been through that, you can get that at rock star inner circle calm forward slash blueprint. And listen, we are doing all of this as one way to help people live life on their terms. Real estate is of course not the only answer. It’s not the only way. But it is one freaking really good way. And we haven’t seen many other other better ways. We are strong believers in the power of real estate. It definitely has its pain points. It is not a perfect investment by any means. It definitely has a risk. And but with that risk comes some upside with that risk. You have to protect against against possible downside as well. So it’s definitely a great vehicle. And it’s why we’re doing this podcast. It’s why we’re doing everything we do with members of Rockstar inner circle. That’s why we started the brokerage rock star real estate and so forth is trying to help people live life on their terms. So that’s it for now. Until next time, your life your terms