** Transcript Auto-Generated**

Erwin 0:00
tearing down one house to build four townhouses, each one with a basement suite. So that totals eight units total Calgary versus Edmonton investing, how to not pick the wrong tenant creating a real life nightmare. And more on this week’s Truth about real estate investing for Canadians. My name is Erwin co host of this show, and over 300 episodes all about an hour long each more or more. And we’ve been going since 2016. And I feeling fine. After I’ve returned from vacation for from three weeks. half that time is in Japan, neither happened Hong Kong, Hong Kong, China. We landed at 5pm last night. I’ve had about five hours sleep. It wasn’t great. I’ve been awake since 3am. So let’s go. Our trip was amazing. Thank you for asking. The Japanese are a fascinating culture. I can’t recommend that everyone go there for themselves to witness firsthand what a lovely country and people they are super polite, great service. Everything’s on sale because the Yen is in the dumps to get when governments go a little heavy on the debt. When do you have an example of the change in the yen? When I first visited Japan, the first and only time I previously visited Japan in 2000, the exchange rate was 100 yen to one US dollar. Today it’s 109 yen to one Canadian dollar. So we’ve gained about 45% purchasing power since my last time there 23 years ago. And

Unknown Speaker 1:33
crazy, it’s crazy how things have changed because back then, you know, in the 90s Everyone thought that Japan would take over and become the global superpower. So it’s happened before were people thought certain Asian countries would take over become the global the global superpower. You know, a lot of people think China might be I’m not convinced we’ll see time will tell.

Unknown Speaker 1:54
Again, based on all the debt that the Japan Japanese have taken on, which is ruin their currency for the locals. Again, the currency has been the end have been slaughtered basically.

Unknown Speaker 2:05
But funnily enough, they actually have the highest GDP per capita among the g7 countries. So they’re ahead of the Americans. While while they have a ton of debt, versus we rank second last in Canada, GDP per capita actually saw a statistic today, if you removed immigration, if you removed immigration from our stats from our GDP, we would actually have four quarters of negative GDP growth as and so we were shrinking last four quarters, if not for immigration, fascinating stuff. I geek out on this stuff. I enjoy this. Because knowledge is power, knowledge is power in my experience. So yeah, and then until Canada’s second last than GDP per capita among g7, we’re just ahead of Italy. But we’re actually expected to fall behind Italy. So we will be last within the few years. Traveling is such a wonderful way to learn and experience as a real estate socialist, a fiscal conservative, I find that fascinating. And how Hong Kong China, which is the least of even after about a print 20% percent housing price correction from before the pandemic, because before the pandemic, they had protests, and then they had the pandemic. So between those two events, the real estate prices actually come down 20%. So they never had the COVID boost that was most of the West has had. So again, so even after that 20% decline, they are still the least affordable city in the world. Yet they still managed to have 2 million of its citizens. 2 million Hong Kong citizens live in government subsidized housing.

Unknown Speaker 3:41
You want to know how affordable their subsidized housing is? Tried 260 to $430 per month. My Costco Bill was was $270 Yesterday. That’s more than someone pays for rent for a month in Hong Kong or an apartment.

Unknown Speaker 3:58
But the crime the crime has be terrible, right? Just like you know, our government, our government housing heavy area of Jane and Finch in Toronto, right? Wrong. Crime is actually extremely low within the government housing areas. How low Hong Kong and Asia in general is pretty low, especially in developed areas. So as an example, like to give examples like to quantify everything pretty much in life.

Unknown Speaker 4:23
I think we can all agree Vancouver, British Columbia is considered low crime for an urban city, right.

Unknown Speaker 4:30
Hong Kong’s homicide rate, so homicides is very easy to track, but it’s a piece of data that’s very easy to track. So Hong Kong’s homicide rate is about 85% lower than Vancouver’s 85% Lower homicide rate of Hong Kong is lower than Vancouver’s it’s that crime is that low.

Unknown Speaker 4:50
The police don’t even carry guns and I actually having trouble recalling if I ever saw if I saw a police officer in Hong Kong in my 10 days there and I was writing I was

Unknown Speaker 5:00
On the street, I was on the streets all the whole time riding through subways, walking streets, I’m a tourist. So then while the Chinese immigrants, well, not everyone wants to live under a communist regime, it’s nice to visit a communist regime. I’m not sure I’d want to stay there. If you’re planning a trip to Japan anytime soon, and with some tips, please just feel free to reach out. If, if enough people ask I’ll put together a list of recommendations. If you don’t want to gain weight, then don’t ask me.

Unknown Speaker 5:26
Even though, even though our average daily steps was 17,000, we’re walking 10 kilometers a day. With the yen on sale. That means everything is on sale plus sales tax is there is in the single digits, it’s in the high single digit, so it’s less than ours here. So similar to Alberta. There’s also no tipping. So in total, like when you go for a meal, for example, or you take a taxi you’re saving 20 to 30%. Public transportation is amazing. It’s the best I’ve seen. Personally, I hear Singapore’s even better, I plan to be there in April. And again, I managed, I thought again, more I can see in my face. Apparently I’ve gained five, six pounds.

Unknown Speaker 6:07
Find useless fact of the day. While here. When I’m at home, I eat about two and a half meals a day. While I was in Asia, I was having to plan for four meals a day so that I can eat as much as possible have some wonderful food. And it’s the it’s been last 30 days have been the most amazing eating I’ve done over that large stretch of time.

Unknown Speaker 6:30
The crazy part though, Japan’s 711, you know, which means that we’re all familiar with their ready made food is quite good. It’s cheap, and it’s fast. Who says you can’t have it all. So where to next time plan is Taiwan. If it’s not made by China by then it will be at the top of our list. Assuming we get get a cheap flight. We went to Tokyo because we were able to get a cheap flight. Tokyo however, was a bit on the cold side. We’re well into fall almost winter fall colors that pass so we think it would enjoy fall colors as I had hoped. Temperatures, temperatures range between eight and 18 degrees.

Unknown Speaker 7:07
But we would get but no I’d like to get warmer climate requirements is a direct flight, great food, Clean Cities play culture and that there is at Taiwan on real estate front, on the personal real estate front in the portfolio on our own portfolio, very nice portfolio where between quotes, where we have quotes with repairs and repairs have started repairs and renovations on the properties that we’re selling in the first week of January. Those properties are student rentals. So appreciate that a student rental is a bit different, as my target buyer is an out of town parent to be read from the Toronto area.

Unknown Speaker 7:45
In most uptown parents will be in town where my properties are in the Hamptons, and Catherine’s when students are looking for a combination for what they go looking for a combination when they get back from Christmas holidays, which would be the first week of January. So I’m making my property available same time when all the pitch students and parents are looking. When when students see that when students and parents do that rooms are hard to come by, even at 70 $100 a month, they’ll quickly do the math and realize a plan makes sense. Just own instead. So if you know anyone looking to buy quality student rental in a plus location, please send them my way.

Unknown Speaker 8:20
Also on the real estate side, TD economics came out with a report. So I record these

Unknown Speaker 8:26
if you don’t know like I record these every week, so the news stays fresh TD economics just came out with a report called Ontario housing the 90s downturn and now I discovered this report while I was reading an article saying how Ontario Ontario may repeat the housing market crash of the late 80s, early 90s. The article link to this TD report. So I stopped reading the article and I clicked on the report because I want my information without hyperbole, nor media spin or opinion. I like the language of economics. I like studying history cause and effect and learning from how history may predict the future. Because just because one metrics, one metric specifically sales to new listing ratio, just because it’s low. It’s as low as it’s been since like the financial crisis of 2008. And the very, very the most significant housing crash of our generation, which was about 30 years ago. I’ve linked to the report the TV report in the show notes. Bloomberg titled their story where I found the article when I found the report. Bloomberg the title for the story was quoted Ontario’s housing market experience in 90s Life’s lifestyle downturn. Could it spoiler alert, highly improbable, to quote the article? Sorry to quote the report, so but please do repeat, read the report, read the article yourself. Nothing beats getting information straight from the horse’s mouth, but I probably just saved you about at least 15 minutes of reading by telling you

Unknown Speaker 9:54
that the article is probably a bit of clickbait. Again, highly improbable, but go ahead. I recommend that you read

Unknown Speaker 10:00
Reporting for yourself more locally, a friend of mine reached out and she’s looking for advice as she’s suing her joint venture partner, she gave me his name and never heard of him before. So I keep them on social media. And after a few scrolls, I could tell this guru was on the new side.

Unknown Speaker 10:15
New gurus, have, they always have lots of social media marketing, so it’s not hard to do some basic diligence on them. Based on the quality of their marketing, they have a good coach for marketing. And based on the picture, this gurus has put this do certain guru posted with two other gurus, I could tell, that’s who he’s coached by because they both have good marketing. And he the JV partner likely has usually likely invest very aggressively, while highly leveraged, which is a formula for disaster over the last two years. So and this is no different than a lot of investors who are in hot water these days. But it’s also appreciate that this time, this like the last 12 months, I’ve never known so many people to be suing each other. You know, the crazy part is that people from different, like education groups, they’re suing each other within because they’re doing, they’re doing business within so they’re suing each other. I’ve never seen those first of all, there’s never been so many groups.

Unknown Speaker 11:17
And yeah, because so many people got because there’s been so much marketing spent and so many people got into real estate investing more than I’ve ever known in the last two, three years. And you know, the timing hasn’t been great. So a lot of people got burned in,

Unknown Speaker 11:31
lawyers will be doing well. So be careful out there. In my experience, most failed investments are due to lack of experience and life experience among even among the real estate expert, the real estate advice expert in the joint venture partnership, there’s a lot of good opportunities out there. boring ones, the cash flow, one just needs to know where to look. So don’t forget.

Unknown Speaker 11:56
On that point, don’t forget Saturday, January 13, is our next us investing workshop. We’ve had many requests for when we’re going when we were going to do the next one because a lot of people couldn’t make the one in November. We’ve already sold out 22 over half. We’ve 40 seats in person, I’ve already sold 22 of them.

Unknown Speaker 12:15
So if you do want to come especially for an in person, do buy your ticket ASAP to avoid disappointment. It’s under $40 help with all tax and tip all included and money goes to charity. So anyways, on to this week’s show. Mackenzie Wilson is a risk adverse smart guy as he got into your Calgary real estate investing and he wisely knew that screening for attendance was absolutely key.

Unknown Speaker 12:41
You had to quote him to quote McKenzie, the wrong tenant will lead to a living nightmare. And this is coming from a Calgarian and Albertan.

Unknown Speaker 12:51
Where they really don’t have rent control and they can have tenants out within 45 days ish.

Unknown Speaker 12:56
Ask him what he thinks about investing in BC, Ontario. I know exactly what he thinks. Spoiler alert, he thinks we’re nuts.

Unknown Speaker 13:03
Anyways, McKenzie is an advocate for affordable housing and reduce and reduction of risk for landlords and tenants and tenants across all across Canada. With this Mackenzie’s credit in manages the largest online community of 4000 plus landlords in Alberta. It’s actually have a link to it in the show notes. It’s called Alberta landlord community on Facebook so you can find it there. I believe anyone can join you just you just the verify that you are a landlord. His online presence presence allows landlords to learn key fundamental landlord practices, navigating risks and challenges associated with being a landlord and maintaining a mutually beneficial tenant landlord relationship. That is so important if you’re a fan of real estate development as an investor or in including highest and best use investing space but pay special attention to Mackenzie’s current project which is a teardown infill projects in Calgary, Alberta. That will qualify for the in demand CMHC MLA select financing. That means 95% loan to value 50 year amortization

Unknown Speaker 14:07
didn’t mention highest and best use.

Unknown Speaker 14:09
He’s already purchased a regular everyday lot that is 60 feet by 100 feet deep.

Unknown Speaker 14:17
And it has the correct zoning for what for which you will intensify one house by tearing it down and turn it into four townhouses each with a basement apartment. So it’s not quite 10 Mixing housing supply but a axing housing supply on a single lot is pretty awesome. Matt, as he’s known to his friends is also works at single key, which is Canada’s largest tenant screening service, which is the same online service that I use and recommend to my clients to use to give to prospective tenants to complete and what you get back is a credit report what we what we used to call terrible credit reports. But now they’ve gotten they’re cheaper now, which is amazing. They’re faster digital, and more user friendly. So

Unknown Speaker 15:00
brushing up on comprehensive design than ever. Again, to follow McKenzie, you can find them LinkedIn you can find on Facebook, facebook group is Alberta landlord community. Please enjoy the show

Unknown Speaker 15:18
Hello, McKenzie, what’s keeping you busy these days? Here and then while I’m in Toronto, whether with you for a day, and my Alberta ignorance, I thought I’d do this in person with you, but I’m in. I’m in a suitcase head office here on Queen Street. And I did not realize how long it takes to drive a really short distance to Oakville, Ontario, but everyone who’s local is probably just like, Yeah, this test test. Yeah, this is what we live with. So you’re, you’re about like, I think I gotta get I think you’re like 30 kilometers away. And how long did the Uber say would take

Unknown Speaker 15:54
over an hour blew my mind. And like midday drive in no rush hour like

Unknown Speaker 16:00
I as I’m sorry, I should be in person telling you this. But

Unknown Speaker 16:05
yeah, it was over an hour. It was like 40 or 50 bucks. Whatever that part is, that’s fine. But like, just to get down. Just not proud to go like it’s just the laws of physics are against me right now with all the people my way to get out the Oakville? 30 kilometers away. That 36 kilometers away. Yeah, it would take you Yeah, traveling. It was apparently a little bit but it was like an hour and 10 minutes. If nothing blew up. I think it was funny. I just checked right now the traffic’s lighten up. I think you were just ditching work after lunch. I was what you were doing and getting ready to come in.

Unknown Speaker 16:41
For listeners benefit. McKenzie was gonna make his way here just after 1pm On a Thursday afternoon. So neither of us predicted gridlock in downtown Toronto. But how else do you explain it?

Unknown Speaker 16:55
Right. Yeah, it’s mind blown. But are we got so much to talk about? What’s going on?

Unknown Speaker 17:03
Where should we start? When should we start?

Unknown Speaker 17:07
I’m in town because a single key because of my job. So let’s start there.

Unknown Speaker 17:11
For listeners benefit what single key? Why should they care? Yeah, absolutely. So we’re Canada’s fastest growing tenant service, we have the most comprehensive

Unknown Speaker 17:21
credit tenant report. It’s really a digital application plus a full comprehensive report.

Unknown Speaker 17:27
Across Canada, we hit 100,000 landlords a month ago. We’re growing, growing really, we’re growing really fast. Right now. We’re most companies right now are slowing down because of the current economic environment. And we’re actually growing, which is just just really shows what we’re doing well, and there’s really a need out there. We basically give the small mom and pop landlord, the same tools that that banks have before they finance a mortgage, they could pull all that credit information. Well, now you have that at your fingertips as a private housing provider before you select your next tenant. So you can make the most informed decision possible, which is so critical at the beginning of the tenancy because either you pick right and it’s kind of on cruise control, unless the tenant tenancy is really generally easy. Or you make the you make a mistake, you pick the wrong person in place to be your next tenant. And you’re living a real life nightmare, not to mention the financial stress. So you’re going to pull it they’re trying to do evictions, damage, damage control costs, all the horrible things that come along with it.

Unknown Speaker 18:28
And then it’s funny when I first met you, like you’re talking about your your fear of a an Alberta tenant. And like, what’s this guy talking about? Fear? You’re talking about like the best case scenario.

Unknown Speaker 18:40
I know. I know. It’s just perspective is crazy across our provinces. It’s just so vastly different. Okay, so hang on a couple of things. Couple things he said a mouthful single key single keys also the largest or the No, not not just the fastest growing by fastest largest. Yeah, I would absolutely say so. We’re

Unknown Speaker 18:59
Yeah, it’s

Unknown Speaker 19:02
yeah, there’s, I mean, there’s some other copy competition out there. But they’re all there from I think either like summer from like the Walby. Well, well before the 2000s. And they you know, it’s just the largest one out there. And you know how I got hooked up I mean, pretty artists perspective, I run the largest Facebook group in Alberta for allowance called the Alberta lambda community. I brought on a bunch of sponsors to provide discounts to the community to make the you know, little bit easier to have a life being a landlord and see because my first sponsorship, I signed up.

Unknown Speaker 19:34
And then even between that time, you guys acquired your largest competitor. Yeah, so we acquired neighbourly at the fall of last year, so 2022 That would have been November when we announced it. And just from like, just from a number of landlord accounts, or or paying accounts that people use our service, we effectively tripled our size with the acquisition of neighborly

Unknown Speaker 19:58
that neighborhood is way bigger than us.

Unknown Speaker 20:00
So you’ve you guys are, you’re the biggest show in town. So you probably know a lot of things.

Unknown Speaker 20:06
I have this weird affinity to love everything about 10 screening, and it’s a passion of mine, which is why I fit quite well for company. Among other things. Yeah, I categorize you among the obsessed with ERP system license training.

Unknown Speaker 20:21
Give me Give me some give us give us give some examples. Give us some stories that, like, what got you what got you so hooked on tenant screening? Or just stories you read? Or did you have a personal experience? Yeah, no, like, so I came into real estate. And like most people, I was super fearful that I got I get when these professional tense, bad tense, some of the dots stop paying, I mean, I was carrying a second mortgage at the time. And it would have financially it was ahead that pivotal point of either if I do this, right, it’s going to really catapult and look after my family and all those desires of financial freedom and certainty. Or if I do wrong, I am completely and utterly destroyed. And I, you know, I couldn’t get credit card. So I was so so fearful, right? Because it would just set me back so far if I if I did it wrong. And but then I looked in the market like well, landlording in the term, Lala, and comes back from the medieval times, but there’s systems in place, people are successfully doing it for decades and centuries. What am I not understanding? So I just started doing research. And, and one day at a real estate conference, talking to someone I held in high regard that 100 200 300 plus doors, share it, we were just sitting down at dinner sharing our systems. And he goes, Oh, well, you do all those things. And I was like, Yeah, wait, what do you do? And I kind of realized at that point in time, maybe I’m a bit different, maybe a little bit more obsessive than the average Joe, average landlord for 10 screening, and

Unknown Speaker 21:47
sure enough nom, I actually have a direct impact. And that can directly affect how we’re designing the tool and making the service better for landlords. So what are some mistakes that beginners make? Because I’ve seen all I’ve read about them the newspaper, because that’s where they end up.

Unknown Speaker 22:01
Novice makes a mistake, like real bad, they’re ending up in the newspaper.

Unknown Speaker 22:05
And the consequences are so dire. And what’s really challenging about this business I think a lot of people either take for granted or don’t even really comprehend, is

Unknown Speaker 22:16
you have a huge challenge. As a landlord, as you have a, you have a large capital sum upfront that you have to protect and somehow manage. And any mistakes will blow that up, you’ll lose your down payment, you could destroy a house. At the same time, though, you’re also trying to find a customer or a client, a long term relationship, and they have a high expectation, they, this this tenant, and rightfully so, wants to call your property their next home. And so it’s got to be at minimum housing standards and all these different things. And so we have this, like this balancing act that we have to perform as, as entrepreneurs and landlords and investors to bounce the things. We don’t destroy our capital asset, but still maintain a good service with the with the tenants. And how do we do that? And,

Unknown Speaker 22:59
yeah, so that could to your question and common mistakes is, is people probably getting into this industry, it’s probably in the most regulated industries that we have here in Canada. I think, off the top my head, there’s three to four pieces of legislation that directly impact us. I think there’s actually closer to seven and eight, you’ve got the Residential Tenancy Act across every province that you operate in. You’ve got the humans rate act, you’ve got the real estate Act.

Unknown Speaker 23:27
The Privacy Commissioner, there’s just so much legislation over this industry and people come in behind they rent out to the first person they see they’re doing things incorrectly that perhaps are being

Unknown Speaker 23:40
what do you call it when you’re unintentionally prejudiced by by not selecting or or infringing on on protected grounds and the humans right back there just just so many places that make mistakes. And then because you have such a high value asset, a mistake with like a startup business, maybe you start a landscaping company, you blow up a lot more you throw up your trailers like five grand, whatever combined utility, go buy new lawnmower, here, especially in Ontario, your guys’s assets, the average house price and any of these larger cities is roll up to a million or more. So you screw up with that that’s like a $50,000 mistake because now you’re trying to go through an eviction tenant hasn’t paid rent for eight plus months. If you don’t make a mistake on your eviction process with the LT board on current timelines for evictions right now, to get your hearing. Now, that was a mouthful, listeners benefit especially if you’re new to this.

Unknown Speaker 24:32
It’s okay, don’t be afraid like this is just part of the process and but it’s doable. It’s totally attainable. And a lot of that’s it’s easier than ever to do it properly. And what I just gave you is a tip of the iceberg of the worst of the worst of the shitty situation 95% 97%

Unknown Speaker 24:53
There’s a lot of great tests out there. Most of them are amazing. There’s a lot of great landlords out there and most of them are amazing. Everyone’s just wants to find a quality place.

Unknown Speaker 25:00
Rent and then landlords just want something that can help pay the bills and cover the mortgage because we all we all bills to pay. And that happens 95% The time, it’s just like super small delta is 4%. That what makes the news what gives everyone the headaches, the stress of this business?

Unknown Speaker 25:16
So you actually have data into that. I’m actually actually that’s cool that you mentioned it’s 4%. So I didn’t know how to quantify an exact ballpark and don’t don’t quote me, but just like so. So I’m speaking personally from my running my Facebook group. I know Okay, actually, I do have data, but you’re correct. Okay. So there’s a, if you go to the Canadian rental housing index, it’s a database across Canada, you can filter on the number of rental households, and I know Alberta’s numbers as of like, call this summer q1, was around 420,000 rental households in Alberta. I know just being an industry. We ballpark This is the kind of like single key and talking to some other service providers and industry. The average landlord owns two and a half doors. And I also know and this is always a good question. If we look at the all the rental stock out in the market.

Unknown Speaker 26:10
There’s two main providers, there’s the private mama pop landlords, the you the Ume, and there’s the big multifamily corporations that own hundreds and 1000s of doors. Now, generally, the concern is the thigh as people think these Meek corporations on the lion’s share of majority of the market stock or the inventory of the rental market, or rental stock, sorry. And that’s not even the case at all. People like uni provide anywhere, it varies by province, but we provide between 65 and 70% of all the rental stock is private is provided by private Canadian citizens. Then the other 35% or so that’s the big, you know, that’s Capri, that’s boardwalk out and burned out. I have 3040 50 60,000 doors, that’s those guys, but they’re a minority player when you look at the overall market share of universal rental stock out there. So, so running my numbers again quickly for 20,000 Renting households in Alberta.

Unknown Speaker 27:06
I will probably take let’s say 65 70% of that. And then we divided by two and a half doors. We ballpark around 105,000 private landlords in Alberta. And my Facebook group has about 4500 members. So I’m not even 5% Of all the landlords in Alberta that are private players excluded and of course the multifamily players we take them out of the equation. And I see occasionally probably a couple times a month are really bad. A tenant a landlord, a homeowner has been burned so badly. It’s that typical news story right there front page, and house has been trashed just painted holes in the wall TOS is just rent hasn’t been paid for 10 months there 40 $50,000 in the hole $80,000 In Alberta there might be it does happen occasionally. Yeah.

Unknown Speaker 27:57
It can you pretty much you know there got complacent and I I’ve been there I totally get it. Life is busy. The rents coming in the first of every month. You think everything’s okay, actually, I need to go inspect all my properties right now I haven’t seen since since July 1. So I have to go in and take a look. I put new tenants in there. So I should go check on but happens. They’re on auto drive. They’re doing other things in life because most landlords by the way, have full time jobs. Since they on average, the average landlord owns around two and a half doors most people just own I see the median number is probably closer to one one and a half doors. So everyone’s got these full time jobs owning properties like the dude on the side. No one does not mean people do it full time. So they get busy and then all of a sudden they go and they look at their property eight months later, perhaps our tenant had a midlife crisis whatever else happened they pick the wrong person that place is destroyed

Unknown Speaker 28:53
Do you know if they were still paying rent because the first red flag is rent doesn’t get paid and then that’s when usually follow up you know I mean yeah, totally. I’m

Unknown Speaker 29:03
over there. Yeah, no, we’re just watching not watching it at all. Well, no, that’s a good pointer and

Unknown Speaker 29:11
yeah, I think the rent still getting paid and they come to the I think the way most get burned, is they come to the property.

Unknown Speaker 29:20
I haven’t looked out for like a year or something like that or it’s been paid and the property is just like it’s never it hasn’t been cleaned since the day they moved in. There’s if they have they have arthritis pets, so there’s like there’s either dog or cat urine all over the place. So the floor is all gone. And sometimes they’re rubbing up a sub floor and because that That smell is gone right into the sub floor right through carpet or whatever.

Unknown Speaker 29:43
Or they can get the warning signs of this the tenant stops paying rent or or I see this happen a lot too is they have allowed unpaid rent for like excuses like oh, so I can pay this month, and then they paid two weeks late and then three or four months of this happens where

Unknown Speaker 30:00
excuse after excuse and that the landlords trying to make things work with a tenant. And they’re not running it like a business they’re they’re being compassionate. And unfortunately compassion and this you can be polite and respectful, but compassion and extending the olive branches when it’s not justified it will just financially put you in a bad place

Unknown Speaker 30:20
to even happens in Calgary or Alberta. Sorry. Now

Unknown Speaker 30:25
we just have better systems in place to quickly rectify the issue. Once we know we have an issue. We’re not impervious to bad tenants or I don’t want say bad tenants. That’s not fair to

Unknown Speaker 30:37
all undesirable tenants. I don’t know. And just and just to say as well, there’s undesirable landlords as well. I really hate the term slumlord like I, I use that so very sparingly, but that there are out there as well. Maybe this Yeah, yeah, you know, there’s bad on both sides. I’ve seen it at the landlord tenant herself. I’ve seen what appear to be

Unknown Speaker 30:58
very unqualified landlords.

Unknown Speaker 31:02
Let’s leave it at that. So actually, I

Unknown Speaker 31:04
just don’t want to spend too much time on it. But I do want Can you share your experience then? If a test not paying what is the process for you in Alberta? Yeah. Okay. So if you’ve got a good documentation, trail of breaches to your lease, repeated unpaid rent or late rent, unauthorized pets, occupants. So hang on arthritis. Hence, every time they add a pet that let you know or what? Well, it depends on your lease. If you’ve got a properly written lease, there’s there’s certain pieces that have to be in there

Unknown Speaker 31:38
to make the lease legal within Alberta, but we don’t have a standard lease, like you guys have an Ontario, we can write anything we want, as long as it doesn’t contravene the Act, which is the Residential Tenancy Act. So if we’re in line with the act, we can put no pets are allowed without written prior written approval from the landlord or the landlord’s agent, for example.

Unknown Speaker 32:00
So So and I totally ripped here, what was the question again? Say 10. Stop paying rent. What is your recourse? Oh, yeah, so so. So if there’s, if there’s number of breaches, if you have enough a documentation, you can just go file for an eviction. You don’t need to do a 14 day notice.

Unknown Speaker 32:20
The 14 day notice is where things are starting to go south, you don’t have enough paperwork to justify the eviction with with the RTGS, which is the equivalent to the LTV for you guys. And so then you got to build up the evidence, right. So first time they’re late with rent, you said on the 14 day notice you have the exchanges and email, your document, everything happens again, a second month happens again, the third month, and you can go and file because they’re going to be lenient, if you just go yell, oh, my tenant was late one week, on the very first month of the lease, you go and try to file an eviction at that point, the board’s gonna look at you like you’re silly and like, come on work with this tenant, there’s always expectation to set up a payment plan. You can’t just go from zero to 100 and try to evict someone there has to be a bit of a trying to resolve and and mediation taking place. But again, if it’s like let’s say you’re you have a

Unknown Speaker 33:10
condo, and you’ve got a tenant that’s risk to the other.

Unknown Speaker 33:16
The other people in the building, because they’re carrying around knives or ordering threads, you can have that person evicted as fast as 24 to 48 hours. And so our TOS what they do is they set aside every day, there’s a few time slots set aside for hearings that require urgent matter. So like domestic abuse,

Unknown Speaker 33:38
personal threats, or if someone is completely destroying a property you’ve got proof of it. Like if police have been to your unit multiple times because a tenant is perhaps having a mental breakdown or suffering something like that. Those certain really high priority cases can get can get cycled through we can see evictions in a matter of hours, usually within one to two days.

Unknown Speaker 34:00
It sounds like you have a much more well oiled machine than we have here. I don’t even want to talk about your guys’s board I just I don’t want to bring it up because it just It hurts

Unknown Speaker 34:13
so we’re before we’re recording we’re talking like yes Alberta lovely Calgary love Calgary. And but Calgary was I’ve heard other people tell me that they were seeing ads like move to Calgary like they’re seeing ads and like Vancouver and I remember being in Toronto last year first for single key and learning and this the the Union Station and

Unknown Speaker 34:36
and there’s these big printed Canadian Rockies at the elbows and bath How beautiful is with like just crystal clear target turquoise lakes since moved to Alberta. The Alberta advantage I saw those ads like it was literally all over your guys’s subway at Union Station there. And it’s funny random No, I thought I was at Union Station so I took that go train from the airport from Pearson. And when you first get off, you have to walk

Unknown Speaker 35:00
over like a walkway across the street to actually to the real Union Station while I walked out a stairwell and came out on the street before I even hit Union Station. I was like mad people says a big train station. But that’s one platform. I’m like, that’s weird.

Unknown Speaker 35:15
Ignorant

Unknown Speaker 35:19
completely ignorant platforms or something ridiculous. I know so silly. And then I didn’t realize until I left the fly back home. I actually went through the proper doors. I was like

Unknown Speaker 35:33
this makes more sense. Silly. Silly me. Anyway, site site. No. So it’s just what I see on the news. It seems like the the the people of Calgary are feeling it. They’re feeling the because we’re recording like the number the number of people that attended the demonstration at the city or city hall over housing affordability, it was a busy big number is peaceful, love Calgarians how peaceful they are. It’s peaceful. But again, there’s a look like there are hundreds outside of City Hall demonstrating for housing affordability. Yeah, I didn’t see how many people show up. So I’m relying on that. But just for context, year over year, right now coming from May into the spring, summer and where we are now in the fall. And we’re doing this recording 2023 rents have increased between 25 and 3%. in Calgary, that’s not know and so anyone, right? That’s a huge shock though, because you got to remember, we can raise the rent once every 365 days. So now, we’ve basically have gone through almost a full cycle of rent renewals for the majority of our rental stock, there’s probably still some that hadn’t been hit yet. They timed it perfectly by sign a lease in April or something like that. But even the rents are increasing then but like i 10%, right. So so rents have gone up. MTA is very balanced right now it’s not in a similar place to us. But I have some I have some takes on that. I’ll quickly to them off the top of my head here.

Unknown Speaker 37:03
Having to do a really smart thing back in 2008. They did blanket why

Unknown Speaker 37:08
permission to put secondary suites across the whole city. That was in 2008, that really smooth administration process to file and get up the code. So because of that, in our going so 2008 2018 2023. So it’s 15 years ago, since they’ve put that that change in they have a lot more secondary rental suite stock and their inventory and secondary suites. Specialty basement suites are really they fit a really good need for affordable housing. They’re less desirable by design because they’re in someone’s basement to typically darker, not less, less natural light. Sometimes people if they’re in an older house, probably colder. They’re just not as desirable yet. So therefore, they can’t command that same market parity rent for a similar two bedroom and a condo or townhouse or, or whatever. So they charge less rent. And so they just got a huge supply of this right now.

Unknown Speaker 38:10
Yeah, and then. But that’s like a big dip for investors though, right?

Unknown Speaker 38:16
It’s great news for tenants. It’s not great news. Yeah. But you know,

Unknown Speaker 38:22
totally lots of competition. But I think it’s good too. Because now that there’s, there’s lots of choice right now for 10 still up in Edmonton.

Unknown Speaker 38:30
It’s good, it’s good for landlords because then you’ve got less risk person in investment because you know, if you’ve done your research, and the lots big enough and you meet all the requirements, you’re guaranteed, you can definitely put that secondary suite and then you can run your performance. And you can go in with less risk buying the investment because you know your outcome with with good legislation and policy.

Unknown Speaker 38:52
We don’t have that in Calgary but here’s what Calgary just did. We were talking off air so five weeks ago, middle of September here. We just had our mayor Mayor God God duck put through called an emergency meeting on a Saturday. They actually met on a Saturday and there’s about two and a half days preceding this the the actual meeting where public input was collected about

Unknown Speaker 39:17
they had this this taskforce called the already said

Unknown Speaker 39:23
fordable Housing Task Force. And they did like a six month study and they had this report. It’s comprehensive and they essentially had six core recommendations with 32 actionable items that came out of it. The most controversial item was so capsule Emmerton 2008 Did blanket a wide rezoning allowed to go from one to two units from a density factor. Well Calgary just approved three five weeks ago and it’s gone back to see administration to update our bylaws which is happening right now. They just approved going from a density factor of an RC one so single family unit one dwelling up to eight

Unknown Speaker 40:00
Oh, wait, they went from zero to 100. Because they’re trying like I kudos to to the mayor and city council because they they’ve taken some action that’s going to really have a very material impact because it’s also it’s a supply and demand imbalance, right? We have a huge demand little supply. There’s there’s there’s an effect at every level, federal provincially and municipality, but I say the municipality who controls the bylaws, and what you’re allowed to build on the land has probably the biggest, more constant, biggest factor in that that restriction on supply in our city just went from zero to 100. And then allowed a density factor of going from one unit up to possibly have eight units. Wow. Which is nuts. Yeah.

Unknown Speaker 40:48
well received by the city. I hope I didn’t register values. You’re listening to this, because I don’t think anyone goes before.

Unknown Speaker 40:55
Yeah, so if we’re looking at like a proper sized lot, which would be like 50 feet of frontage on the front of the street going to 120 feet, so it’s like 557 square meters or 6000 square feet. That unit right now you can knock down the single family home, you could put four, three bedroom townhouses up top, and two buildings. So basically, you build a duplex facing the street, you have a courtyard of like 10 feet in the middle, then you have another duplex facing the alley, overlooking the garage. And each duplex can have a legalized basement suite. So I’ve got four townhouses, three bedrooms, two, two and a half baths on top of around 11 1200 square feet, probably like around 1100, it’s gonna be on the smaller side. And I can have either a combined basement suite of two bedrooms, one bath, or right now the numbers obviously make more sense I’d have for one bedroom, one bath, basement suites at like 450 square feet. So tiny little units, but

Unknown Speaker 41:56
a lot more supply coming in the market. That’s amazing. And are you Wait, are you recording this? You already doing this? I’m doing it right now. In fact, so. So shameless plug, if someone’s looking for a good investment reach out to me, I’m not raising capital right now. But I just secured a property as my estimate under market by like 50k, give or take by about 10,000. And, and I’m doing this some bonus where I went where I went to high school and Calgary so I actually have a rental there. Now. I’ve been there for five years. So I know my rental rates. I know my my 10 demographic and bonus is unique in the sense of Alberta, because it was a town that got annexed by a C to Calgary in the 1960s. So its proximity to downtown, a lot of the major amenities are super close, like it’s a 10 to 15 minute drive to downtown. Yet I had these massive lots that don’t really exist anywhere else in the city, just because it used to be a standalone town in the 1960s. How about you? How about you buy?

Unknown Speaker 42:51
This one I’ve got is is that exact size? It’s a 50 by one.

Unknown Speaker 42:57
Yeah, it’s

Unknown Speaker 42:59
is 60 by 100. Same area, a little bit different dimension. So I have a little bit more frontage, but a little bit more shall have a lot. But yeah, and I can build, I can build units on which is what I’m pursuing right now. And you already have like drawings for for a units. I have two architects. I’m just finalizing who to go with. So I’ll have those in the upcoming weeks. Cool. Yeah, if you don’t mind, just share me with like an image of it or PDFs, I concluded with the show notes? Yeah.

Unknown Speaker 43:27
Generally, you know, I’m a geek. So I’m sure the percentage of our 17 listeners are geeks as well. We like to geek out on Yeah, I’ll send you the city did a really good job. They had some great informational packages on the zonings that allow and they’ve got some great pictures awesome along with them. Or even better yet, you can reach out to McKenzie directly and you can pick things up happy to chat with you. I’ll give my contact information. But yeah, and so so one other unique factor that I’ll just wrap up this investor conversation that we can spend back to some of the other pressing topics but So, if I’m sure most of your listeners know, I know, you’d probably know Irvin, but there’s really good I want to call it cheap financing available from the government right now to CMHC. So commercial mortgages that EMI select program. But quick recap right it’s allows you to loan the value of 95%. So only 5% down your amortization is 50 years. So imagine what that does to your mortgage payment just completely compresses it makes it a lot smaller. And you can cashflow rail to gate with these with this investment. Now, to qualify there’s a bunch of criteria you can qualify three levels the points system to justify because they give you tiers of 3545 and 50 years for amortization. I know I’m going really fast here but I want to provide as much value as I can for the show. The there’s three qualifications there’s one is climate change or climate deficiency, if you’re building like how airtight and all that good stuff it is there’s access so do you have ramps and elevators and that kind of nature and allow people just

Unknown Speaker 45:00
He’s able to access your building. But the most common one that most people are using, which is what I’m using as well is affordability. So to qualify through this program, I have to designate 25% of my units. So in my case, an eight Plex, that would be two units, I have the choice of which units they are. So naturally I’ll pick my one bedroom units in the basement, either designated as affordable rents for the for a 10 year term. Now, here’s what is really interesting. Even with Calgary is rental rates jump up 3% year over year, a one bedroom right now. And the areas that I’m in will rent for 450 plus the cost of utilities, but it was it was the sister movie tell you though, the question is for 50 bucks. Also,

Unknown Speaker 45:42
the the threshold that is defined by the Canadian mortgage Housing Corporation and Stats Canada have their own report. The it’s based on median income in the local area. So ours is for the City of Calgary, their cutoff point to be defined as affordable, is $1,730 of rent.

Unknown Speaker 46:04
So just let that sink in. Or when I’m telling you is my market rent for one bedroom is 450. Yet the government has given me financing saying that the affordability cutoff point you can charge up to a maximum the ceiling for affordability is $1,738. I’m still 300 bucks below what the government’s defining as affordable.

Unknown Speaker 46:25
So I can still basically charge the market rent on my current for on these two units I’ve designated as affordable for the next 10 years and my numbers right now should I cashflow like 2000 bucks a month with

Unknown Speaker 46:38
with management or if I self manage and reduce that I can get the cash flow up to 3000 bucks a month off the hop

Unknown Speaker 46:46
2000 bucks cash flow sounds nice.

Unknown Speaker 46:50
Brand new, no deferred maintenance completely build and no rent control, single key tenant screening. I might know a thing or two. So yeah, I know. It’s fun. It’s It’s amazing. Because Because

Unknown Speaker 47:05
but the funny thing we were so hang on 95% loan to value banquet construction.

Unknown Speaker 47:13
What’s that? Yeah, so, so so. So you buy the property.

Unknown Speaker 47:18
So there’s there’s two, there’s two loans at play, there’s a development construction loan that will get me through construction, my construction costs, including WETTSTEIN for current trade rates right now going on is about 230 bucks a square foot.

Unknown Speaker 47:36
And

Unknown Speaker 47:38
that five so we’ll go through, we gotta I gotta raise about

Unknown Speaker 47:43
I can do the project for 350 to 400k. I’m raising 450 to do contingency, which is a requirement of the CMHC and malai suck program the financing through the government.

Unknown Speaker 47:56
So when this is all said and done, and it’s fine, and I have a conventional mortgage with the fifth year and all that good stuff, the investor just had to have my money printed only and I only need to have 5% Down in the property. So land right now is I just bought one for 75 was called my last 500k My construction costs on that square footage at two or three bucks per square foot is in around 1.6 million. So all in I’m getting a conventional mortgage at two was at 2.1 million at 5% down I think it’s like 135,000 or something like that. But I have other costs I have to account for too. So really, that’s just going to be in the be in the investment for around 350 to 400k.

Unknown Speaker 48:44
So,

Unknown Speaker 48:46
I mean, I don’t know a better deal where you get cash flow out the door between two or 3000 bucks a month. They’re only in for $350,000 and they can come in as a partner with me on a and

Unknown Speaker 48:59
I’m seeing force appreciation these units are probably selling like a puzzle sell the whole complex, I’d probably be worth like 2.4 2.5 conservatively so I’d get an I get another uplift of like three to $400,000

Unknown Speaker 49:15
How many of these do you have?

Unknown Speaker 49:17
I’m doing number one my goal is to build 10 of these and then I’m I’m over the next five years and then I am a full time hockey coach with my kids and and camping and live in my my why? How hard is it to find these lawns?

Unknown Speaker 49:34
That’s the challenge right now is a bit about low inventory in Calgary. But I have a really good realtor. He’s a wholesaler and he got me not only did he get me a lot, but you got an off market saving

Unknown Speaker 49:44
50 grand so sorry. He said he’s realtor. So would this be a pocket listing that or something like that pocket list intending on? Yeah, I like wholesalers too, in case you want the worries but when I think about people

Unknown Speaker 49:57
no one should care about anything

Unknown Speaker 49:59
that says

Unknown Speaker 50:00
Amazing. So that’s my cash flow. You’re creating inventory. It’s like it’s in line with what the government wants. Yep. And Calgary is a unique again that on my market rents have even met the threshold for affordability. So I can still charge basically market rents for all of my units, even though two of them are designated as affordable housing.

Unknown Speaker 50:20
It’s already downside to this

Unknown Speaker 50:22
immediate labor shortages.

Unknown Speaker 50:26
Yeah, maybe a bit of that.

Unknown Speaker 50:30
No, not really. I just think, and you know, just as well as I are going like the macro economics to play here, we’re still pounding or we’re still this huge influx of population and immigration into this country. That’s not slowing down.

Unknown Speaker 50:47
Alberta is

Unknown Speaker 50:49
good. Before we’re recording. I was asking you what your thoughts were because people are leaving, like even even if people arrive in Ontario, BC like I don’t understand, like no foreign stuff. You know, I mean, and like Calgary is bearing the brunt now

Unknown Speaker 51:02
of I don’t know if they’re great bearing much Brunt for immigration, but definitely in migration from a provinces. Like do you see it as well as well, they give the traffic stupid. Is it hard to get a coffee at Tim Hortons? Yeah, no, me. Yeah. I mean, yeah, little I could just see there’s just generally more people for sure. But like, like just being directly in the rental market right now and seeing our rents jump up as high as they have. And there’s just there’s just, we’re probably hovering around above 0% vacancy, right, I’ll report it below 1%. Maybe, maybe we were one and a half. It gets low. Right. It’s been a really desperate. Yeah, like, it’s, I don’t like this and it’s, it sounds great. Your real estate shouldn’t be exciting. I don’t want to see 3% year over year increase in rents. Because you know, that means that’s unsustainable. If it’s gonna go up this fast, there’s gonna be a correction. And it’s gonna do one of these. I’d rather just have steady Eddy. Easy, predictable, boring. 5% A year 6% A year increases, it’s manageable for your tenants, they can still manage the bills. And I know what my numbers are. And I’ve got just steady growth and appreciation and mortgage pay down this rocket ship. Okay, go up forever.

Unknown Speaker 52:20
Given cuz then, let us talk like people are asking for rent control. It’s just natural. People are asking for a record show. And I get like from an outsider that doesn’t understand the the the moving pieces of the economy. On the surface, I want my rent control, I can manage my badges better. That sounds great. Without really knowing the unintended consequences that come with a policy like that. I get why people are asking for it. But when you start digging into how they actually functions and the impact of the market, it’s it’s not a good solution at all.

Unknown Speaker 52:52
Yeah, as far as engineering surprising Rachel Notley was proposing CPI plus two. So inflation plus 2%. Would be was her proposal proposal for a controller in Alberta. I like it though.

Unknown Speaker 53:05
You know how much we would give Ontario and BC if we can get CPI plus two? Because right now that’d be like 5.8%. It’s better than two and a half percent BC what would it BC just do this week? Was it this week or last week? They announced it? pretty recent. And I’m sure point five oh, in the Manage short term rental and short term rentals. Okay, sounds like your home outside your home? Not? Yeah. So in any municipality or city with a population of 10,000 or greater. You are no longer run no longer allowed Airbnb is outside your primary residence. I just think it’s a really poor solution. It’s a drop in the bucket what they need. And I bet you a lot of that Airbnb housing, like I’ve got a colleague right now, I was talking to a landlord conference in Calgary last week. And her family owns a townhouse condos in Kelowna. They’re in Calgary. They go, they live out in the summer months, and then they just Airbnb in the shoulder season to kind of offset the cost across winter. They don’t get much in the winter, as you said. And so they’re gonna force that person to either sell that property to another buyer or

Unknown Speaker 54:12
it’s just, it’s not gonna provide that value, that long term impact into the rental market stock because

Unknown Speaker 54:19
she’ll probably just end up giving it up. And, yeah, it’s just, there’s the bet the perceived benefit won’t be there. Calgary is doing a study right now. So this is really interesting. I was listening to the city council meeting and when we’re talking about short term rentals, and I’m a little bit annoyed, because I so so the Saturday meeting, it was all day, I listened to the first three hours and I had one of my city councilors going on and on how this could be a big, you know, measurable impact, statistically speaking, and our head of administration for the City of Calgary said, Well, we have a study being conducted by UFC we’re very lucky because we’re doing a very in depth study that answer exactly this question, but the preliminary

Unknown Speaker 55:00
results are in so far. And we’ve noticed that most Airbnbs in Calgary only run for an average of about six weeks a year. No, that’s not much. So that would be, hey, we have the Calgary Stampede event in, I’m going to rent out my basement to make some extra money because I’m retired, or whatever

Unknown Speaker 55:20
you eat.

Unknown Speaker 55:23
Or, you know, I travel for you, right, I traveled for two months over the summer, I’ll rent out my place offset some costs, they’re gonna ban people from the ability to do this. And they’re hoping that that’s gonna directly impact a huge spike in supply or the rental market. Those units are gonna go on the rental market, only a fraction of them, and

Unknown Speaker 55:42
it’s not going to be the intended effect. And now you’re trampling and taken away. Owner’s rights with properties and you’re removing income stream that people could leverage part time if they’re retired or on pension or whatever it might be to maintain a quality light that you’ve now removed? Some, it’s not the best solution.

Unknown Speaker 56:00
Yeah, hopefully calmer heads will prevail. I don’t think they’ll stop you from doing it in your own home. Like I don’t I can’t recall on every disability like restricting the restricted mounts, you can do your own home to like six months or something, which isn’t that bad. So like that. completely protected? You know, if I figure I would, I look at the median income in the area based on CRA or Stats Canada, and based on people’s tax filings allow them everyone has many Airbnbs to meet the medium income in their area.

Unknown Speaker 56:30
Why limit to just a primary residence.

Unknown Speaker 56:33
It’s my thought, if you want to really provide the quality of life and still try to limit that model, but there’s a lot more going on Airbnb isn’t the root cause of the issue. The root cause is unfortunately, some poor legislation

Unknown Speaker 56:50
and, and bylaws, its supply restriction at the bylaws at the local level. And then legislations like an accelerator, it either speeds up or slows down your economy. It doesn’t add, it doesn’t add GDP, right? It doesn’t add jobs and growth and all that. But people can function a lot easier here in Alberta. And they can get through our tribunal process in a matter of days, you know, two weeks under a month, at least Anyways, on average, where you guys are eight months to get your hearing. If you’re perfectly squeaky Keaney have made any mistakes. You mess up that process, you’ve just doubled that timeline to 16 months. How can you function without that high level of risk? You can, which is what you guys are seeing. And we’re seeing it, we’re actually seeing demand for rental properties is like falling to the floor. Right? A property with the tenant is like doesn’t draw showings and my, from what I’m seeing. Right. So people are just so afraid of that risk. Right? Well, with the costs rising so quickly right now people are probably just toughing it out. And they’re not they choose not to move because you guys can lock in rent controls based on an owner to owner on a lease right on a tenancy. So I would if I was in that position, why would I move the renter unless I had to, which is unfortunate, because now the side effect is okay. Sorry, I’m gonna break back to another point why I digress and went down this path. So the root cause is is is legislation and supply issues. And, and attacking an air b&b as as a side effect to try to solve this root cause is not going to solve the problem. And it’s I think it’s doing more damage than than benefit. My humble opinion. At least they’re talking about the supply side versus like the conversation for like, several years have been the demand side.

Unknown Speaker 58:44
We had foreign buyer taxes, but we you know, we allow a million people into the country each year.

Unknown Speaker 58:49
Right? Or it’s it’s it’s it’s so a prime minister saying, you know, housing is a right. And I would correct him and say he’s close. It’s shelters are right. housing and shelter are really two different things. We can dive into details. But he says that on one hand. And then on the other hand, he’s pumping people in this country, like it’s going out of style. And if he was working full well.

Unknown Speaker 59:13
Yeah, normally, if he was really serious about solving this housing issue, you would turn down the taps to the downside of a little bit more.

Unknown Speaker 59:21
Use a little bit. But then I’ve also heard the argument too, is that we’ve got all this immigration come in and skilled labor, they can help spur the economy build more, provide more jobs or so I don’t know. I’m not an economist. I’m just an opinionated homeowner. But you were researching a lot of stuff. So I was wondering if you had an opinion on where you see Alberta going because again, like people naturally seek affordability you know, like I’ve you know, I’ve friends like I think it houses I think the houses in Windsor, Ontario, for example. It’s like it’s almost as far as we can get from Toronto. It’s still like 600,000 So I think, oh, average price right?

Unknown Speaker 1:00:00
Now the category, right? Beautiful, right? Yeah. And then but you can live in the outskirts of Calgary, probably less. Am I right? Yeah. Yeah. And we have we have satellite cities or communities. So so just north of Calgary is a city of Airdrie, just west of Calgary is a city of Cochran and then East Calgary is

Unknown Speaker 1:00:21
Chestermere and Strathmore. And then south of Calgary is Okotoks. And it’s even cheaper in those communities. And are we seeing like, ridiculous price increases each year?

Unknown Speaker 1:00:32
We’re starting to see our because, you know, like, knowing how our economics play, rents are gonna go up first. And then if it’s sustained long enough

Unknown Speaker 1:00:43
value of your land or the cost of land started going up. So right now we’re on the upswing, our property values are going up right now. Right?

Unknown Speaker 1:00:54
And then I predict like, you’re, you’re saying with rents is just gonna be unhealthy? How fast it goes up?

Unknown Speaker 1:01:00
Yeah, it’s, it’s I mean, you know, give me a context to your economy economy question. And my look at it. urlan.

Unknown Speaker 1:01:09
Alberta is typically opposite of the rest of Canada is when you guys are not doing great, we bucked the trend, and we do well. So only gas is strong right now. Energy Security is still a major concern internationally speaking,

Unknown Speaker 1:01:23
we’re at capacity, the reason we’re not booming, and we’re just doing good, is because of policy right now. And the there’s no appetite right now to invest. Because I think we’d be net neutral by carbon by 2035 was the 23rd, not 2035. But seven, seven years were between three, that’s fine. That’s like nine.

Unknown Speaker 1:01:48
How many years ago, that’s a big 12 years from now,

Unknown Speaker 1:01:51
a lot of these projects in the oil and gas need a 10 or 15 year period to get the ROI for a multibillion dollar multimillion dollar investment. So, so one, we don’t have that money being invested right now. And a lot of our major oil and gas players are self funding their own exploration, they’re maintaining what they already have. And the other problem is because we’re already at 100 Set capacity, on the logistics side of getting the energy out of the ground, whether it’s oil or gas, whatever product it may be, and then get it to the coast to sell it to Japan or Germany, whoever needs it to buy it offshore from us.

Unknown Speaker 1:02:28
We have like, think of it like straws of a milkshake. We already have our three straws full, and no one’s buying us more straws. So why pipeline Why Why build more supply? If the straw you only have three straws that are already out of capacity. Right? So that’s a problem, right? There’s no There’s no desire to unfortunately, go to more pipelines because even though I do agree that we need to eventually get to a carbon neutral position the timelines currently proposed are just they’re unrealistic which is unfortunate. And you see that every winter when people need to get around you can’t run up here electricity in my 25 just doesn’t work. So I can’t imagine I lose like a third more on my on my Tesla does I think it’s blurred partly because the cars the heat itself, right. So I’m you know, the Tesla has a run a lot more heat. Which is, which is he’s dead cab warm for you. And they keep the batteries warm enough to keep again charge so yeah, so I’m curious. Tell me that so in a full charge in the summer, what’s your normal range? Estimated? Like daily driving call, like 500 kilometers for kilometers? Yeah, if I tried to do 100% It says 500 But I won’t go 500 Because I probably drive a little bit too fast which causes excessive wind resistance. But yeah,

Unknown Speaker 1:03:50
real real testing environment says everyone Yeah. Oh, if you have a heavy foot like I do, but yeah, because it’s a lot of fun. I mean, real world testing environment Everyone okay, yes. Gotcha. Okay, so let’s call it like 454 on your shirt now in the winter without saying for pilots. Yeah, because again, like you know, just like when you just like in your daily usage like you go somewhere you parked it go inside leave in a while when you go reheat the car. Go somewhere else leave it

Unknown Speaker 1:04:17
then then you can reheat it you know? The Yeah, it draws the battery Yeah. And how much they call it the ticket to recharge a battery like like from from nearly empty to full. The worst case scenario like like how long does that take? Is that like a supercharger is like third half an hour 35 miles at your house Can you can you can you charge your car from complete empty to completely full overnight? Me? Yeah, do it all the time.

Unknown Speaker 1:04:42
It’s about nine bucks. For me to fully charge my car for my home.

Unknown Speaker 1:04:47
supercharger ricotta the morning by like 30 bucks. Yeah.

Unknown Speaker 1:04:51
Interesting. Yeah, yeah. But you know you drive so you drive for to Columbus. It’s about time for a break. So then you take your break, plug it in, and then yeah, go Walker.

Unknown Speaker 1:05:00
round a burger, whatever. Yeah, get a coffee Timmies get to Starbucks

Unknown Speaker 1:05:05
and then go to the bathroom to get back on the road. And you’re good. That makes sense. But again, we’re not. I don’t know if we ever see minus 25.

Unknown Speaker 1:05:16
Yeah, well, the nice thing about our birthday is we get knocked off the mountains, just the way our weather patterns work. So we get breaks from the extreme cold weather. You know, you go to say Saskatoon, Regina, Manitoba, and Winnipeg. They get those extended, like three week chills where it’s just like uncomfortably cold at minus 30 plus for a while, like three weeks. That’s, that’s brutal. Have you curious how Tesla operates in that kind of weather as well? Yeah, Toronto was very mild for Yeah, we haven’t stress tested like you’re talking about.

Unknown Speaker 1:05:48
You’re talking about a tech advancement with single key. Yeah, let’s get into it. Oh, so we’ll be happy. Yeah, I were just this is why I’m in town. We got conferences we can watch. I think you might be going on now too. So I’m your chauffeur. So I hope I get. Yeah, that’s right. That’s right.

Unknown Speaker 1:06:11
Good, yeah. Good, either. I’ve only written 111. So it’ll be good. But yeah, so sidetrack. So really excited here to tell, tell us I had single key tells mail company, and

Unknown Speaker 1:06:23
we’ve completely rebuilt our report. I’m gonna be doing some sneak peeks to that this week and at the conference. But we’ve also completely rebuilt our dashboard for the landlords when they log in, we’ve had to rebuild our whole platform to accommodate the new report. So we’re doing this soft, soft launch kind of phased approach. So functionally, today, our new back end is up and running, where you log into bus not publicly available yet. So we’re gonna do a little bit more testing this week, and then next week, we will have the new portal launched here in November. And then in December, our new credit reports coming out. And I’m so excited for this one, because we’ve basically taken the same most comprehensive report, and they give your listeners just some context that they’ve never seen it before.

Unknown Speaker 1:07:11
Our average report number of pages is like between 15 and 20 pages report based on the test credit history, and then a bunch of other factors. We’ve now added a household profile, so our report will not capture the number of renters, their relationships to each other.

Unknown Speaker 1:07:27
We also do a pet profile. So we’ll know your pet is proud of it provide a picture of the pet, the type of pet of the dog, cat breed, Pitbull Jack Russell Terrier, whatever it might be, sex, weight size, is it fixed like all these kinds of factors when you’re trying to make an informed decision if this if this renting households, a good fit or party is a good fit for your vacancy, you need to know this information because obviously if you’ve got a one bedroom condo and a family of six is applying on your rental property, and you know and it does happen there’s there’s cultural norms around the world were large families and extended families lived together as one

Unknown Speaker 1:08:06
you need to make that informed decision with with with all the right information at your fingertips, which is what we really focus on doing. So here at silky

Unknown Speaker 1:08:13
we have we’re gonna have ID verification. So now we’re using algorithm and software to take a selfie and and the government issued. Id like a passport or driver’s license. And we can tell you within a percentage, like we’re at 99% confident that this selfie is this person in the picture.

Unknown Speaker 1:08:30
And that’s part of the report. So it is incredibly important.

Unknown Speaker 1:08:37
Right write 100% Yeah. What else are we doing?

Unknown Speaker 1:08:42
You mentioned? So are you? What’s the medium? I don’t want to give it away? Can I do this on my phone? Can I can I QR code it to my tenant like?

Unknown Speaker 1:08:53
Yeah, no, we’re mobile friendly. Absolutely. We’re seeing that chin for a while now where more and more and more stuff being done on a smaller device device screen versus sit down at a computer with a desktop. Right? So

Unknown Speaker 1:09:09
one of the other cool things too is right now today, tenant simckes In a world of everything that is is a landlord is a landlord first product, meaning that it has to be initiative initiated by the landlord to purchase whether it’s our our tent report, or rent collection or rent guarantee. Tomorrow, I’ll say

Unknown Speaker 1:09:30
I’ll go on the limb and say q1 Next year, we’re bringing in tenant first offerings, so we’re gonna get the ability for a tenant to go purchase their credit report from single key and share it for free to as many landlords they want and say a 35 day period. That’s genius. So then they minimize the impact of their credit score by not filling out five or six credit checks. They keep their costs down and then we make the 10 look really good. Like if you’re looking at keener which is why I want to see exactly right

Unknown Speaker 1:10:00
If someone’s if you got 10 People came into your rental, urban and one and two of them got single key reports prepaid for that you can scan and take a look at, you know, you got to probably shortlist those two people. And I’ll just continue the analogy, like, someone shows up their credit report and like their, their, their bank statements and the checkbook in hand ready to go? Like you, you’re in the top 10%. Usually, I mean, like, that’s, that’s serious, you know, I mean, like, you know, they’re here to they’re not, they’re not kidding around. Yeah, versus the person that says you’re, you’re not entitled to a credit check, like, okay.

Unknown Speaker 1:10:35
That’s not legal. That’s fantastic. Because it’s like, the old days, like, you know, we tell people to get their own Equifax report, and so that they wouldn’t hurt on credit. You know, I mean, obviously, this can Photoshop risk in that, but

Unknown Speaker 1:10:49
we have addressed that issue as well. So Ernie brought up Photoshop and right, so best practices always. So protip, peers always get your information from a trusted third party or trusted source. So I because the tenant has a printed off PDF or report, I give it to you physically at the viewing, I could have easily I could have easily photoshopped the credit score. But what we’ve done or done is we’ve put a QR code now on the top of the report, I the landlord scans that with my phone, it redirects me to SEO key, I have to log into my single key account or create an account if you don’t have one. And then I get direct access to the exact same report that was given to me, right from single key. And I can look at the single key report and I can look at the paper copy in front of me and share their exact match. So I could be guaranteed the information that failed to report is accurate, right? And then for anyone who thinks that tenants can’t do technology, like I literally have to do the I did literally did the arrive can have yesterday to scan my passport and take a selfie, and answer questions and stuff, you know. And like, you know, that saves me a lot of time. So pretty much anyone who travels should be able to handle this. Right? So that’s where we’re going to read. Yeah, that’s amazing. And so for people interested in protecting themselves doing proper tenant screening, working to get more information on single key. Yeah, so head over to our website steal key.com I actually think earned you might have a special promotion code with us too. So if you’re a part of Irwin’s following, reach out to him. I think he’s got a discount for you. I couldn’t believe it’s just IW i N i examine all this. Yeah. Yeah. So we so when you go to report, you can there’s a promo code field, so make sure you punch that. I don’t know what the discount is for you. I think

Unknown Speaker 1:12:32
I bought it recently.

Unknown Speaker 1:12:35
In anyone that’s attended, they should again, they can use the same thing.

Unknown Speaker 1:12:42
Yeah, well, we haven’t launched yet. So we’re so good. We got some rough details. But what I’ve what I’ve articulated is the high level, how it’s going to function. Marketing details, and pricing, I imagine is gonna be pretty similar in price. And though I wouldn’t be charging something different. So if it’s their attendant than running around that $25 range.

Unknown Speaker 1:13:00
Oh, so last time, Villar was on here. He was sharing a whole bunch of stuff that wasn’t.

Unknown Speaker 1:13:04
I was coming out. Do you have any other announcements? Are you able to do folks from other countries, for example? Yeah, so we, we are the product of so many, so many hooks in the fire here. But really excited, we do have a partner now to do international credit checks. That’s been asked a lot. I know we’re also looking at, we need some Indian credit checks,

Unknown Speaker 1:13:26
payment by credit card, or pay your rent by credit card. It’s it’s more of a corner case where we bought.

Unknown Speaker 1:13:35
You know, typically, as more well off international students come in the country, they need a place to live, their parents just instead could be bothered with the household logistics and open up a Canadian bank account. They’ll pay. I’d call it really aggressive fees, but I’ll just pay by credit card and pay the rent upfront, or pay it on a monthly basis ongoing. So we’ve just got a question. This is what’s convenient convenience. Yeah. So we’ve been requested to the ability to help landlords Correct. Read by rent by credit card.

Unknown Speaker 1:14:05
How soon for the partner for international credit?

Unknown Speaker 1:14:09
Yeah, I don’t have a timeline right now. So our priority right now, the next big thing coming around the corner that we have in the works is digitally signing. So what’s really excited about this for for landlords, is you can really protect yourself by making their mandatory requirements to have certain documentation provided by the tenant, and particular and insurance. And it’s it’s so overlooked. It’s so critically important. Before that take and sign off and get the complete lease they have to upload proof attempt insurance. So they have the choice to upload their own tenant insurance. They already have a provider or we we’ve partnered to to get some really good discounts for the tenants. So they’ve gotten some good pricing as well. And part of that process is when they upload or use our partnerships or upload their own. You’ve now got that documentation part of your lease package. So you’re in a really strong position right now.

Unknown Speaker 1:15:00
And I know you can comment. But I think ideally, you have your proof attention insurance before you before you hand off keys. Because it’s really easy to yet it’s really easy to get and it’s cheap. It’s usually under 20 bucks a month. In my experience. Yeah, that’s not a pro tip man like 100%. You shouldn’t, they should have utilities in their name, if that’s applicable. You can do that too. And single key, upload your time your

Unknown Speaker 1:15:25
jurisdictions.

Unknown Speaker 1:15:29
But yeah, you’re exactly right, though, or is like, these are just you don’t get possession before rent. Like in Alberta, we’ve got, we can collect their first month’s rent, and the damage deposit or security deposit prior to possession. I know for you guys, you guys don’t have damage deposits first month and last house rent you should always be collecting before keys is given over. And it’s just it’s one on one stuff. But man, it’s the conservative side of the property. That’s that’s when that’s, that’s your last year done. There. Again, they’ve established a lease whether or not you’ve signed one, one, there’s applied a consent. So yeah, don’t do it. And then quick tenants to insurance story. My clients, they’re one that one of the tenants, guests cause fire to the home, it was a duplex. So then one of the family’s tenants that was completely, like completely like could not responsible at all, they didn’t have 10 insurance. So then it had become on a pocket for like hotel and whatnot. And also moving on to things. And then what’s nice was, they came back to the landlord ask them to pay for the hotel.

Unknown Speaker 1:16:30
And they’re not responsible for I mean, I’m assuming this is the same for you guys in Ontario. But in Alberta, same thing, I’m responsible for insurance on the doors, there’s still the house, the tenants responsible for their own possessions and accommodation. So if they’re also because of a claim of fire damage or flood, and they can’t live that property for two months of

Unknown Speaker 1:16:52
remediation. They’re financially responsible for their accommodations for those two months. That’s not fun. That’s a lot of money for someone that’s probably trying to make ends meet paycheck to paycheck. Just just because it’s like 20 to 30 bucks a month, get the 10 shirts, protect yourself. And you’re never going to be in this position where you’re trying to scramble for accommodations and paying out of pocket.

Unknown Speaker 1:17:15
That’s enough going on when you have you know, you have a house fire, like out of pocket for more other things we can do. Thanks for much for doing this.

Unknown Speaker 1:17:24
Thanks for the share on the one that unit in Calgary. Congratulations. Congratulations, Calgary. Thanks. Congratulations, all the assessors who own 50 by four in 20 Lots.

Unknown Speaker 1:17:34
Yeah, it’s it’s, you know, since I’ve been doing my like really focusing on real estate since 2016 2017. This is by far the best opportunity I’ve seen like you can buy the single families at retail through MLS and get the legal basement and make it work which is about that for my first properties. I I cut my teeth and learning property management and a lot, but this is just, it’s just the trifecta for all and we produce a bunch of zoning requirements. So the other thing that I mentioned, is all the parking requirements are now gone. in Calgary. Sorry. So this eight Plex doesn’t have to have any parking. So when they come back, and if summer next year they reduced parking to zero, which I don’t agree with that. But what they did in January of this year, they made another change that they put into, they did fall of last year, and they put into effect January of this year, on these townhouse developments, they reduced parking by 50%, beginning of 2023. But now this new proposal completely eliminates parking requirement, of course, the original parking requirement.

Unknown Speaker 1:18:35
That’s a great question. So right now our parking requirement is point five stalls per unit. So it would have been one stall per unit before much

Unknown Speaker 1:18:45
of that.

Unknown Speaker 1:18:48
Yeah. So I mean, I wouldn’t be able to do this for 14 townhouse on on one sol per year because that’s a parking spots, right? Because now

Unknown Speaker 1:18:59
48 units with half of practice, our requirement is only four is four spots, which so I across the back, I have I have a four bay garage with one bay for each townhouse, main floor. And then the basement suites don’t require any, any parking.

Unknown Speaker 1:19:15
And then what’s the what’s your transportation access for this property?

Unknown Speaker 1:19:18
Oh, it’s great. So there’s busing. So it’ll be all busing, and then there’s road access as well. And probably the other good thing about this community because I said the lots are really large. There’s lots of street parking. So this is probably the communities that that parking won’t be an issue just because of the general size of whites in the neighborhood. And there’s lots of green space. Like I’m right across from actually I’m like three doors down from my high school. And there’s tons of parking around there as well because it’s just beside the football field and stuff like that. Anything progressive housing over parking stalls.

Unknown Speaker 1:19:51
Yeah, Mack anything else you want to share that we didn’t cover? Oh, man, earn I love talking to you. This is always fun because it gets me jazzed.

Unknown Speaker 1:20:00
He’s kind of going I think we

Unknown Speaker 1:20:02
we did a really good job. Like there’s just we’ve got great changes coming down more powerful tools for landlords is key. There’s always opportunities to invest in Canada. You just got to find them. And right now legislation changes and bylaw changes are making that really

Unknown Speaker 1:20:17
quite interesting here in Calgary. But I know you’re shopping USA you gotten your hat there. So I don’t know if

Unknown Speaker 1:20:27
it comes down to just education. So really important in this business.

Unknown Speaker 1:20:32
And, yeah, so you’re gonna pick me up on Saturday? Is that the rule? Yeah, it’s in the calendar.

Unknown Speaker 1:20:38
From the

Unknown Speaker 1:20:44
Chateau kala Shaquille onterra LaneWatch. Coming to the conference.

Unknown Speaker 1:20:49
We’ll see you in the data house. All right. Thanks for Jonesy. Cheers.

Unknown Speaker 1:20:54
Thank you for watching. If you want to learn how to invest in real estate from scratch, my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month. Go to investor training.ca/youtube To register for our next class. Then links also in the description as well. I publish at least two to three videos a week here. So subscribe if you want to keep learning from seasoned investors like myself, my guest and if you’re just starting out, feel free to ask questions in comment below. And I do the best to answer each of those comments and questions myself. Again, if you’re ready to learn the nitty gritty about real estate investing from a professional investor register for next virtual class. That’s at Investor training.ca/youtube. Thanks again for watching. See you in the next video.

 

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