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What Two Rarely Discussed Things Drive Canadian Real Estate Prices?

Message from the Rock Star Team

Yesterday, we recorded a soon-to-be-released podcast with James Maggs and Cam McCarroll...both great dudes, you're going to love the chat.

We each discussed how we got started with investing in real estate.

And that chat had me reflecting afterwards.

You know when Nick and I quit our jobs to start Rock Star, one of the "visualizations" I used to have about this business was around education.

I remember one idea vividly.

I thought it would be the coolest thing if we could meet a bunch of potential real estate investors in the parking lot of the Canadian Tire close to my house...

...pack all of us into a small bus, and do a tour of student rental properties by McMaster.

Nick bought his first student rental property out there in his early 20s and I followed shortly afterwards.

They were such incredible cash flow machines, and so few people knew about them back in the early 2000s, that we thought educating people about student rentals would be valuable.

We've come a long way.

Today, Rock Star runs multiple, large 1000+ person events each year.

We run four, 4-hour long, sessions for Rock Star VIP members; we host two social and networking dinners per year for 150+ people, and there are 20+ Rock Star classes delivered on an ongoing basis covering everything from student rentals, to multi-units, to financing, property management, marketing online, lot severing, creating legal second suite units, and more.

It's all about education.

And that's why the picture at the top of this email makes me so freaking happy.

That's myself with Pablo and Kevin from Bull Bitcoin hosting the second in a 3-part Introduction to Bitcoin series for Rock Star members over Zoom yesterday.

We believe in a 3 bucket strategy to our personal finances and have shared this for a long time.

Bucket #1: Cash, dirty fiat cash, for daily living expenses and emergencies.

Bucket #2: Income producing hard assets...hello good, smartly leveraged, income property.

Bucket #3: Longer term savings held in a form of sound money.

Bitcoin fits that third bucket for us better than anything we've ever seen in our lives.

So to have the guys from Bull Bitcoin helping teach Rock Star members how Bitcoin works as a network, characteristics of bitcoin as an asset, and doing it all so thoroughly is very gratifying for us.

Bitcoin's 4-year compound annual growth rate currently stands at 46% as of January 2024. It's absolutely remarkable.

And it can also be a very confusing new thing for a lot of people...

...so we're doing our best to educate as many Rock Star members as possible so they can smartly evaluate it for themselves.

(By the way, the entire Bull Bitcoin team is amazing, are super helpful and offer great support...they offered that for anyone setting up a new account via RockStarBTC.ca that they'll drop in a free $20 to all new accounts, thanks guys!!)

And speaking of confusion...

Check out this wild chart put together by @HanifBayat on Twitter:

How crazy is that?

Our real estate market is completely wild.

And many analysts miss some key points about Canada's real estate market (I'm NOT referring to Hanif here, he clearly gets it)...

First, Canadians regularly get access to LOWER interest rates than our U.S. counterparts for real estate.

Each time we've checked with our friends south of the border this has been true.

So if we were getting 5% mortgages, they would be getting 6%.

If we were getting 4%, they would be getting closer to 5%.

And if they were getting 3%, we were getting 2% in Canada (hello, 2021).

It's not a perfect science but it holds true in many cases.

And because people are not really buying the "price", they're buying the "monthly payment", this can juice up the prices of our real estate here quite a lot.

And it makes all those G7 charts that show Canada's debt load look wild because we do carry a lot more debt than other G7 countries...partly because of the manipulated super low rates created by our Bank of Canada and bond markets.

Second, we're a huge country with incredibly high immigration per capita but we only have a few big cities.

Most new immigration to Canada lands in Vancouver, Calgary, Montreal, or Toronto.

Ontario gets 44% of all immigration into Canada and much of that lands around the Golden Horseshoe.

This absolutely drives real estate prices.

In the U.S. there are big cities everywhere.

In Texas alone you have Dallas, Houston, San Antonio and Austin.

The entire eastern coast of the USA is filled with different large cities.

Florida has Miami, Tampa, Orlando, Jacksonville.

Our point is that the population growth spreads around there and puts less intense real estate pressure on a small piece of land.

Not us, not here. The Greater Toronto and Hamilton Areas have 9 million people from Oshawa to Niagara and it's growing...fast.

This puts a huge amount of demand on real estate in a pretty small area, and mix that with lower rates than our U.S. friends...and you get wild real estate prices up here.

Real estate is a complicated game, play it wisely.

Typically the turtle wins the race with real estate. Go easy, buy smartly, hold for long periods of time, survive the curve balls.

BIG NEWS: YLYT ANNOUNCEMENT TIME...

We're about to open up registration for Rock Star Inner Circle members to the next Your Life. Your Terms. Event on Saturday April 6, 2024.

We have a jam packed event planned and the team had the launch meeting for the event this past week...it's GO time.

Mark your calendars now and stay tuned for all the juicy details!!

We'll be diving into some serious real estate discussions and we have some amazing guests joining us for it.

We'll 100% hit capacity...so when registration opens don't wait to register!

That's it for this week.

Tom & Nick

p.s. Stay tuned for details on the Saturday April 6, 2024 YLYT Event...it's all coming out shortly!

p.p.s. If you want to check out Bull Bitcoin you can visit via RockStarBTC.ca and receive $20 on the setup of any new account.

p.p.p.s. Take time out of your week to visualize and breathe and plan your life...if amazing stuff can happen for us then it can definitely happen for any and all of us! Get out a piece of paper and map out some life plans! Do it this week!

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