Everything You Know About Investing in Toronto is WRONG!
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Everything You Know About Investing in Toronto is WRONG!
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Just because you live in Toronto or GTA, doesn't automatically make you a Toronto investment expert. At Volition, we have been debunking myths about the viability of investing in Toronto for the past 14 years.
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Everything You Know About Investing in Toronto is WRONG!
- 1. @volitionproperties www.volitionprop.com Everything You Know About Investing in Toronto is WRONG! September 28th, 2022 Volition’s Formula to Success for Investing in Toronto
- 2. @volitionproperties www.volitionprop.com Agenda And yes, the Meetup will be recorded and posted on our website! www.volitionprop.com/mastermind-meetup/ 6:00 - 7:00 pm In-person networking (your network is your net worth!) 7:00 - 8:00 pm Volition presentation 8:00 - 8:15 pm Break (please order food or drink to support local!) 🍺 8:15 - 9:00 pm Volition presentation continued 9:00 - 10:00 pm Networking
- 3. @volitionproperties www.volitionprop.com Housekeeping Items ● We are happy to see you in person again! 😊 ● Support Local! We have a dedicated bartender and menus on tables, and encourage ordering throughout the evening ● Washrooms: On this floor, back left before patio doors ● Cell phones: Turn them on silent and step out if you need to take a call ● Recordings: This presentation is being livestreamed and recorded on Zoom
- 4. @volitionproperties www.volitionprop.com Legal Disclaimer Volition Properties and its members, officers, directors, owners, employees, agents, representatives, suppliers and service providers, provides this presentation for informational purposes only. This presentation and the information, materials, services, and other content available (“Content”) are subject to the following terms and by participating today you agree to these terms. ● The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on within the presentation constitutes a solicitation, recommendation, endorsement, or offer by Volition Properties or any third party service provider on a property, for investment or otherwise. ● All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing within the presentation constitutes professional and/or financial advice, nor does any information within the presentation constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content before making any decisions based on such information or other Content. ● In exchange for participation at this event, you agree not to hold Volition Properties, its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other Content made available to you. ● There are risks associated with investing in real estate involving risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods. ● Past investment performance is not a guarantee or predictor of future investment performance. OUR EXCLUSIVE REMEDY FOR DISSATISFACTION WITH THE CONTENT OF THE PRESENTATION IS TO STOP YOUR PARTICIPATION. VOLITION PROPERTIES AND ALL ASSOCIATED MEMBERS ARE NOT LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, UNDER ANY THEORY OF LIABILITY, INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, USE, DATA, OR LOSS OF OTHER INTANGIBLES. IN PARTICULAR, AND WITHOUT LIMITATION, VOLITION PROPERTIES WILL NOT BE LIABLE FOR DAMAGES OF ANY KIND RESULTING FROM YOUR USE OF OR INABILITY TO USE THE CONTENT OF THIS PRESENTATION
- 5. @volitionproperties www.volitionprop.com Common Myths about Toronto: "Investment Properties don't work in Toronto" "Cashflow doesn't exist in Toronto" "Investing in Toronto means that you are buying a condo" "Toronto is too risky" “Toronto is expensive"
- 6. @volitionproperties www.volitionprop.com Common Myths about Toronto: "Investment Properties don't work in Toronto" "Cashflow doesn't exist in Toronto" "Investing in Toronto means that you are buying a condo" "Toronto is too risky" “Toronto is expensive"
- 7. @volitionproperties www.volitionprop.com Volition – The Toronto Mythbusters Investor Focussed Realtors Award Winning – Year after Year Toronto Experts Everyone at Volition is an Investor
- 8. @volitionproperties www.volitionprop.com Frequently featured as EXPERT REALTORS on HGTV
- 9. @volitionproperties www.volitionprop.com Volition Services Mentorship, Education & Consultation Toronto’s Leading Real Estate Investment Advisory & Realty Firm Realty Community Advisory Renovations Property Acquisition & Sale Design & Renovations Inner Circle & Ongoing Support
- 10. @volitionproperties www.volitionprop.com The Volition Team Toronto’s Leading Real Estate Investment Advisory & Realty Firm Matthew Lee Founder & Managing Partner Ming Lim Head of Realty Florence Lee Head of Operations and Construction Advisory Sam Ho Special Advisor Brian Li Construction Project Mgmt Alykhan Jinnah Realty Coordinator Chris Law Realty & Leasing Services Alcina Sung Interior Design & Stager
- 11. @volitionproperties www.volitionprop.com The Volition Advantage The Volition Team!
- 12. @volitionproperties www.volitionprop.com Exclusive Volition Inner Circle Whatsapp Group
- 17. @volitionproperties www.volitionprop.com Sales to New Listings Ratio
- 19. @volitionproperties www.volitionprop.com Volition Metrics - Downtown municipalities
- 20. @volitionproperties www.volitionprop.com Volition Metrics - Downtown SF Detached
- 22. @volitionproperties www.volitionprop.com Volition Metrics - Toronto - Everywhere else
- 23. @volitionproperties www.volitionprop.com Volition Metrics - Uptown SF Detached
- 24. @volitionproperties www.volitionprop.com Everything You Know About Investing in Toronto is WRONG
- 25. @volitionproperties www.volitionprop.com Meet Tommy & Gina… Typical Nice Family. 45yrs old, with kids 1 Condo (used to live in, but rent it out now) Primary Residence in North York
- 26. @volitionproperties www.volitionprop.com Meet Tommy & Gina… $300k combined income $100k savings $1.15M Net Worth
- 27. @volitionproperties www.volitionprop.com Meet Tommy & Gina… “No good investment properties in Toronto” & “Cashflow doesn’t exist in Goals: Replace income. $300k/yr cashflow in 15 years What do I do? What’s the best strategy?
- 28. @volitionproperties www.volitionprop.com Understand the Role of Cashflow
- 29. @volitionproperties www.volitionprop.com Does RE Always Go Up Over Time…?
- 30. @volitionproperties www.volitionprop.com Equity Growth Model Equity: $300k 5% Growth Equity: $6.5M
- 31. @volitionproperties www.volitionprop.com Equity Growth Model Equity: $300k 2.5% Growth Equity: $3M
- 32. @volitionproperties www.volitionprop.com Equity Growth Model Equity: $300k 0% Growth Equity: $1.5M
- 33. @volitionproperties www.volitionprop.com Equity Growth Model Equity: $300k -2.5% Decline Equity: $700k
- 34. @volitionproperties www.volitionprop.com OMG Interest Rates Are Rising…😱 3% Interest Rates
- 35. @volitionproperties www.volitionprop.com OMG Interest Rates Are Rising…😱 5% Interest Rates
- 36. @volitionproperties www.volitionprop.com OMG Interest Rates Are Rising…😱 10% Interest Rates Did you see the difference?!?!
- 37. @volitionproperties www.volitionprop.com Time IN The Market vs. (that other saying)
- 38. @volitionproperties www.volitionprop.com The Reason RE is so Powerful…
- 39. @volitionproperties www.volitionprop.com The Evolution of Investors Stage 1 “I want MAXIMUM appreciation!!”
- 40. @volitionproperties www.volitionprop.com The Evolution of Investors Stage 2 “I want MAXIMUM cashflow!!”
- 41. @volitionproperties www.volitionprop.com The Evolution of Investors Stage 3 “I want MAXIMUM risk mitigation!! (because I now understand the ROLE of cashflow!!)”
- 42. @volitionproperties www.volitionprop.com Does cashflow really matter? In the beginning, $500/mo really make a difference to your life?
- 43. @volitionproperties www.volitionprop.com Cashflow is less in Toronto because the market is LESS risky! Lower Cap Rates = Lower Risk Remember T.I.M.E. Toronto mitigates risk!
- 44. @volitionproperties www.volitionprop.com So when do you really need cashflow? Cashflow is important… but not to the detriment of all else! You need cash flow at the “end”!
- 45. @volitionproperties www.volitionprop.com What does Theoretical Physics & RE Investing Have in Common…?
- 46. @volitionproperties www.volitionprop.com Year 4 Year 8 Year 12 THE VOLITION MULTIPLIER EFFECT 5% growth 3% rent 3% expenses Year 0 Free & Clear Year 18 50% LTV Value: $1.5M Mortgage: $1.2M Downpayment: $300k Rent: $7500 Expenses: $1100 Mortgage: $6400 Cashflow: $0 Value: $1.8M Value: $2.2M Value: $2.7M Value: $3.6M Value: $3.6M Mortgage: $0M Rent: $13,000 Expenses: $1900 Mortgage: $0 Cashflow: $11,100 x4 Value: $14.4M Mortgage: $0M Rent: $52,000 Expenses: $7600 Mortgage: $0 Cashflow: $44,400
- 47. @volitionproperties www.volitionprop.com Reality: Toronto supports the Volition Multiplier Effect better than other markets!! Diverse Economy Stable growth Rising Rents Best Tenant Profile Risk Mitigated (i.e. T.I.M.E.)
- 48. @volitionproperties www.volitionprop.com Myopic Cashflow Chasers Sophisticated Big Picture Thinkers
- 51. @volitionproperties www.volitionprop.com Toronto is so big. WHERE do you start?
- 52. @volitionproperties www.volitionprop.com Toronto’s Hottest Investment Neighbourhoods Map
- 53. @volitionproperties www.volitionprop.com Toronto’s Hottest Investment Neighbourhoods Map
- 54. @volitionproperties www.volitionprop.com Toronto’s Hottest Investment Neighbourhoods Map
- 55. @volitionproperties www.volitionprop.com Toronto’s Hottest Investment Neighbourhoods Exclusive Access To Investment Map Weekly Pre-Analyzed Properties Directly To Your Inbox www.volitionprop.com/thepropertyshow
- 56. @volitionproperties www.volitionprop.com WHAT is the Best Investment Property?
- 57. @volitionproperties www.volitionprop.com Sample Triplex: Triplex: $1.5M Rents: $7500 Upper: $3200 Main: $2600 Basement: $1700 Expenses: $1100 Mortgage (5%): $6400 Cashflow: Neutral
- 58. @volitionproperties www.volitionprop.com BONUS: How To Boost Cashflow By $1000 on a $1.5M Triplex Scenario A: 80% Mortgage: $6479 Scenario B: 15% Mortgage + 65% HELOC: $5643 Cashflow Boost: $836
- 59. @volitionproperties www.volitionprop.com Good thing we invest in Toronto!
- 61. @volitionproperties www.volitionprop.com What do I do? What’s the best strategy? Do they sell their condo? Do they rent their condo? Do they buy refinance their primary? Do they have enough money to invest?
- 62. @volitionproperties www.volitionprop.com Start with the end in mind: Net Worth: “Doesn’t Matter” Cashflow: $300k/yr Timeframe: 15yrs Common Q: “I don’t know if this is realistic??”
- 63. @volitionproperties www.volitionprop.com Back to Tommy & Gina… Refi condo? Value: $750k Mortgage: $300k Rent: $2400 Expenses (incl Mortgage): $550+$200+$1600=$2350 Cashflow: $50 If refi @ 80% LTV, new cashflow: -$850 (Equity Takeout: $300k) Would I buy this today?
- 64. @volitionproperties www.volitionprop.com Back to Tommy & Gina… Sell condo? Value: $750k Mortgage: $300k Est Net Proceeds (after taxes/expenses): $350k Better Option
- 65. @volitionproperties www.volitionprop.com Back to Tommy & Gina… Refi Primary Residence? Value: $1.4M Mortgage: $800k Refi @ 80% LTV: $1.12M Equity Takeout: $320k Cash on hand: $100k Total capital: $420k Yes, you have to Debt Service this yourself 😢
- 66. @volitionproperties www.volitionprop.com Back to Tommy & Gina… Cost to buy triplex? Price: $1.5M Mortgage: $1.2M Downpayment & Closing: $350k Total buying capabilities: Buying 2 now gives them a bigger starting point
- 67. @volitionproperties www.volitionprop.com Back to Tommy & Gina… Yr 4 (@ 5% growth): Value of each Triplex: $1.82M Refi, buy 2 more: With rising rents, assume cashflow: $0 Mortgage Qualification is the “?”
- 68. @volitionproperties www.volitionprop.com Back to Tommy & Gina… Yr 10 (@ 5% growth): Value of each Triplex: $2.44M Mortgage of each Triplex: $1.26M Portfolio LTV: 50% Sale proceeds of : $1.18M x 2 Mortgage Balance of other : $0 (virtually) Rents: $10,000 x 2 Expenses: $1500 x 2 Cashflow: $13,500 x 2 Annual Cashflow: $324,000 Also consider Cap Gains
- 69. @volitionproperties www.volitionprop.com If T&G play their cards right… Goals: Cashflow: $300,000/yr Timeframe: 15yrs Result: Cashflow: $324,000/yr Timeframe: 10yrs Net Worth: $5.0M + Primary
- 70. @volitionproperties www.volitionprop.com If T&G play their cards right… Goals: Cashflow: $300,000/yr Timeframe: 15yrs Result: Cashflow: $324,000/yr Timeframe: 10yrs Net Worth: $5.0M + Primary FREE OFFER VOLITION CAN BUILD YOU A CUSTOMIZED REAL ESTATE PLAN!
- 71. @volitionproperties www.volitionprop.com Cause & Effect of Variables: Instead of 5% growth… 2.5% growth Iterations are 6yrs 10% growth Iterations are 2.5yrs Instead of 3% interest… 5% interest Iterations are 4.5yrs (Cashflow & Growth is slightly impacted) 10% interest Iterations are 5yrs (Cashflow & Growth is slightly impacted) Expenses/Inflation growth Expense growth itself is not a big determining factor If Inflation → Interest Rates → Cashflow & Growth is slightly impacted Rent growth Cashflow might not be neutral upon refi May choose to wait for refi until rents are higher Mortgage Qualification You may hit financing wall May choose to pursue JVs, etc. Taxes You have to consider Cap Gains upon sale Aim for 45% LTV instead of 50% Sell the LATER PROPERTIES first
- 72. @volitionproperties www.volitionprop.com Next IN-PERSON Mastermind Meetup: “STREET SMART TOUR” Date: Sat Oct 22 – 10am-2pm Location: Downtown Toronto (West or East TBD) RSVP: www.meetup.com/Volition LARGEST REAL ESTATE MEETUP IN TORONTO WITH OVER 4000+ MEMBERS!
Editor's Notes
- TIMING Right now, Matt’s sections are 15 mins Matt: Hi everyone, I’m Matt and this is Ming, and we are from Volition Properties. We’re going to be asking (and answering) the question IS THIS THE RIGHT TIME TO BE INVESTING IN TORONTO. 15s
- Matt: I realize now that our parents (AND US, actually) were acting opportunistically, not strategically. Our parents were hard working and tenacious, but that didn’t mean that they were doing in the smartest way possible. They made money on it… that’s not the point. The question is… How could they have done it Better, Faster, with Less risk, and Less headache? Only many many years later, after many bumps and bruises, did I ask this question when I looking to scale up my own real estate portfolio. And only now do I have an answer. 35s TOTAL AT THIS POINT: 3 MINS
- Matt: I realize now that our parents (AND US, actually) were acting opportunistically, not strategically. Our parents were hard working and tenacious, but that didn’t mean that they were doing in the smartest way possible. They made money on it… that’s not the point. The question is… How could they have done it Better, Faster, with Less risk, and Less headache? Only many many years later, after many bumps and bruises, did I ask this question when I looking to scale up my own real estate portfolio. And only now do I have an answer. 35s TOTAL AT THIS POINT: 3 MINS
- Ming: We take a more sophisticated and wholistic approach to real estate investing. We’ve built the company which we wish was there to support us when we started investing ourselves Along the way we’ve helped thousands of investors and generated a lot of wealth for our clients We believe that we can help you too Our success has gotten us a bunch of accolades Hi we’re Volition, and we are here to help you do it smarter, better, faster, with less headache and less risk… in Toronto Volition is a Real Estate Investment Advisory & Realty firm. That means we teach people how to invest in real estate, and we help them find amazing properties… all in Toronto. We’ve helped a LOT of people invest in a LOT of properties, and generate a LOT of wealth & a LOT of cashflow. And we can help you too. —-------- Researched and synthesized a more sophisticated approach to real estate investing Risk mitigated approach based on economic fundamentals Founded Volition to help others do the same $32M+ personal holdings in Toronto Real Estate (55+ doors) Featured on HGTV, REIN, RISE, Property Profits Real Estate Podcast, etc, et
- Ming: … like HGTV where we’ve got articles online from “How to make an extra $50k when selling your home” to “15 Things You Need To Know Before You Buy Your First Investment Property”
- Ming: All well and good, but what does Volition DO? What we are NOT Not here to sell a courses Not here to sell to get you to buy into our fund or our REIT Fundamentally a brokerage comprised of experienced investors and advisors We make money like regular real estate agents, but provide a ton more value Four pillars of service —---- Volition is a team of REALLY GOOD Investor Realtors and Investment Advisors. With 60k agents in the GTA, only a handful are good enough as Investor Realtors to help you invest in real estate. And we have services to help you end-to-end…
- http://trreb.ca/index.php/market-news/housing-market-charts Pump the brakes! Still down in relative terms… however.
- http://trreb.ca/index.php/market-news/housing-market-charts Pricing starting to level off
- http://trreb.ca/index.php/market-news/housing-market-charts Inventory tightening slightly
- http://trreb.ca/index.php/market-news/housing-market-charts Increasing S2L ratio - market is starting to buy up the properties 31 Offers —------ Average for the last 30 years 55% Sales to listing ratio What does S2L ratio mean? Basically it’s the speed at which new inventory is being absorbed How can be over 100% Listings older than 30 days Low right now, just under 40% Why do we care, it’s often a leading indicator on where the market is going See how it dropped through Jan to May
- Further zoom out We know Toronto and the downtown is important - but as you might have heard many times before, all real estate is local. Hyperlocal - neighborhood by neighborhooh, street by street We use the HPI What is the HPI? Like for like properties 3 bedroom detached to 3 bedroom detached Average doesn’t tell us anything Lots of activity in high end of market avg price is high Vs for lots of activity at the low end of the market. We can see in these charts what is happening at a granular level Allows us to contrast neighbourhoods and test our theories Downtown vs. everywhere else Matt
- Update this spreadsheet https://docs.google.com/spreadsheets/d/1n6zSaB-nPiClTnw-ZA0IhXX-v-kGlGdmmCdovIuCZHM/edit#gid=0 We know Toronto and the downtown is important - but as you might have heard many times before, all real estate is local. Hyperlocal - neighborhood by neighborhood, street by street We use the HPI What is the HPI? Like for like properties 3 bedroom detached to 3 bedroom detached Average doesn’t tell us anything Lots of activity in high end of market avg price is high Vs for lots of activity at the low end of the market. We can see in these charts what is happening at a granular level Allows us to contrast neighbourhoods and test our theories Downtown vs. everywhere else
- We know Toronto and the downtown is important - but as you might have heard many times before, all real estate is local. Hyperlocal - neighborhood by neighborhood, street by street We use the HPI What is the HPI? Like for like properties 3 bedroom detached to 3 bedroom detached Average doesn’t tell us anything Lots of activity in high end of market avg price is high Vs for lots of activity at the low end of the market. We can see in these charts what is happening at a granular level Allows us to contrast neighbourhoods and test our theories Downtown vs. everywhere else
- We know Toronto and the downtown is important - but as you might have heard many times before, all real estate is local. Hyperlocal - neighborhood by neighborhood, street by street We use the HPI What is the HPI? Like for like properties 3 bedroom detached to 3 bedroom detached Average doesn’t tell us anything Lots of activity in high end of market avg price is high Vs for lots of activity at the low end of the market. We can see in these charts what is happening at a granular level Allows us to contrast neighbourhoods and test our theories Downtown vs. everywhere else
- Update this spreadsheet https://docs.google.com/spreadsheets/d/1n6zSaB-nPiClTnw-ZA0IhXX-v-kGlGdmmCdovIuCZHM/edit#gid=0 We know Toronto and the downtown is important - but as you might have heard many times before, all real estate is local. Hyperlocal - neighborhood by neighborhood, street by street We use the HPI What is the HPI? Like for like properties 3 bedroom detached to 3 bedroom detached Average doesn’t tell us anything Lots of activity in high end of market avg price is high Vs for lots of activity at the low end of the market. We can see in these charts what is happening at a granular level Allows us to contrast neighbourhoods and test our theories Downtown vs. everywhere else
- Matt: We…are going to start off with a story. An immigrant story, actually, about my mom and dad. A story that might not be too different from your own family story, actually… This is Momma and Poppa Lee, my parents. (It’s funny, because they don’t know that I’m talking about them. My mom is super shy and private, so don’t tell her that I talked about her in my presentation, ok??) Momma & Poppa Lee were immigrants to Canada over 50yrs ago, and landed in Belleville of all places (small town near Kingston with 37000ppl). They worked hard, as immigrants do, and scraped their pennies together enough to buy real estate… 4SF homes actually. Pretty good right? Sounds like a happy ending, right? 1 min —-- Story arc and intro is…5 mins total.
- Matt: Not quite. My parents had a TERRIBLE experience. They had tenants who would spend their money on beer & weed instead of pay rent, and who would trash the place. They managed to hold those properties for 5-10 years, but I remember my parents pulling their hair out. It was the wrong market, and wrong tenant profile… my parents just didn’t know any better at the time. 30s —----------- . Nothing but headaches. I remember as a kid…tenants not paying rent, chasing tenants down for rent, damage to the units, midnight move outs, tenants would spend their ODSP/OW cheques on beer and weed instead of paying rent, etc. -They did own them and managed to hold on to them for several years… but then they got fed up of all the problems and sold everything. -Sound familiar? Sound like the reason why you (or someone you know) doesn’t want to get into real estate investing?
- Matt: And… as you know, history repeats itself. As the saying goes… The Apple doesn’t fall far from the tree. When Ming and I both started investing in real estate, we made the EXACT SAME MISTAKES as our parents did. (Separate parents, by the way! We didn’t know each other at this point!) We invested in Waterloo, Hamilton, Edmonton, and Sudbury. We were chasing cashflow, and not paying attention to anything else, to our own detriment. 35s —-------- Preamble: The reality is… Matt & I didn’t do any better than our parents when we both first started out… We BOTH started, without knowing each other, OPPORTUNISTIC investing We BOTH made the same mistakes as our parents (not the same parents!) Investing just on cash flow, nothing else Hamilton, Waterloo, Edmonton, Sudbury, etc, etc. Still trying to divest these properties!
- Most investors start here They understand appreciation - easiest things to grasp Buy low, sell high Buy a condo, lose a ton of money every month, but it’s going up in value! right?
- Get some education and learn about cashflow WOW - best thing ever and focus just on cashflow above all else Many get stuck here
- Stage 3 This is where we want to get you Understanding the Role of Cashflow Allows you to hold for the long term and it’s part of a wholistic investment and risk management strategy
- Story of my mentor Found place with $300 more cashflow that everywhere around me NO. Maybe a few dinners out
- Cashflow is less in TO because it’s less risky! Those who know CAP rates, know that small risky markets have higher cap rates, because those markets are more risky! Major urban centers like Toronto mitigate risk
- We’re not saying buying negative cashflow, just not the be all and end all When does cash flow really matte? At the end. Begs the question: When is the end?”
- Matt: Ok, let’s get into something a little more tangible now… Switching gears now… Toronto is so big! Where do you even start? 10 s
- Ming:
- Matt: Ok, let’s get into something a little more tangible now… Switching gears now… Toronto is so big! Where do you even start? 10 s
- Matt: THIS is where you start. This is the Volition Hottest Investment Neighbourhoods Heat Map. This LITERALLY is the Rosetta Stone that unlocks the mystery of “Where to invest in Toronto” We created this to help our clients quickly understand where the best places are to invest. Cool right? It’s in Google Maps, so you it’s interactive, and so can click on each neighbourhood, and we give it a Grade, and a description. Purple is Downtown Core, Black is Stupidly Expensive (like Rosedale and Forest Hill), Red is our Primary Areas, and Blue is our Secondary Areas. And then if you work with us (again, since we are Investor Realtors), we’ll have deals and sample properties cross-referenced against this map so you can ensure that you’re buying in the right neighbourhoods. 1min
- Matt: For example, this is East York. This is one of our top neighbourhoods. It’s rated an A or A- (depending the exact location), and there’s a bit of desciption about WHY it’s one of the best neighborhoods. 15s
- Matt: Likewise, this is me clicking on Dovercourt Wallace Emerson. And it’s an A neighbourhood since it’s in Red. It’s perhaps our FAVOURITE investment neighbourhood. And it meets all of our criteria… it attracts the right tenant profile. And it’s supported by transit, gentrification, infrastructure developments, etc. It’s within a 10 min walk of a transit station so that they can zip to their job in downtown Toronto. Side note: those professional millennails that we were talking about earlier? Even though what they want is work/live/play (they want to live where they work, and they want to play where they live)... and generally speaking, they want to live in the Core… about 20-25% ot them don’t want to live in the concrete jungle or in a glass tower. They value things like being able to step out into a neighbourhood, greenery and access to nature, just with cool stuff around like coffee shops, galleries, restaurants, boutique shops, etc. THAT is who we focus on. AND… this trend was accelerated by Covid, actually… our data show that when people were moving from the downtown core, most of them were just moving one Area Code over into more of a residential setting. So obviously, there is a ALOT to go thru here, and a lot of value here. But… as a Property Show exclusive, we are going to SHARE this map with you! 1min 30s
- Matt: Ok, who’s been to a restaurant in the past 2 years since Covid started? Then you’ve probably scanned a QR code to access the menu, right? That’s what we’re going to do here. So pull out your phones and scan this QR code. This will get exclusive access to our Toronto’s Hottest Investment Neighbourhoods Map And you’ll get added to our Investor Mailing List where we send out weekly Pre-Analyzed Hot Properties directly to your inbox And…just to add a bit of sizzle to the steak… you’ll get entered into a draw to win a $100 Home Depot Gift Card! How could you say no?? 45 s TOTAL FOR THIS MATT SECTION: 4 mins
- Matt ASK THEM: How do you want me to answer this question? Do you want me to spend 2 mins talking about condos before I get into the answer, or jump right over condos? Up to you. But, as everyone in this room knows, taking a random SF house in toronto and trying to rent it out, it’s automatically cashflow negative. You need a better business model to make it work. This is why we developed the Volition Multfamily business model. We densify to get 2, 3, 4 units under one roof. But you can’t just take any random house in the Toronto and densify. It may not work. There are a ton of technical elements… Side setbacks Min basement ceiling heights Legal requirements Fire requirements Etc. Anyway, the short answer… house…. Small multifamily in the residential neighbourhoods adjacent to the downtown core. How do you ensure you’re getting a great triplex? We only had 30 mins here today, so I can’t possibly get into ALL the details… BUT come to our meetup, that’s where we go into much more detail (details are in a few mins) As an aside: This is why laneway suites are such a big deal right now Garden suites just got approved (after some GOOD OLE local neighbood NIMBYism) BTW Laneways are a FANTASIC WAY to boost cashflow. For a $500-600k build, you can get upwards of $4000/rent…. Think about a $900k Condo… that get about $3000/rent. “Actually, we have a triplex right now that fits all of this criteria that we’ve been talking about. It’s got great rents, it’s well priced, and it’s in a great location. Come to our booth to get more details.” 2 mins 30 sec
- Boost your cashflow by $1000 by using HELOCs. Entry-level Triplex. $1.5M, Rent $5750, Expenses $1100. Scenario A: Mortgage $4900 (80% LTV, 2.75%), Cashflow -$250. Scenario B: HELOC segment $3000 (65% LTV, 3.7%), Mortgage segment $900 (15% LTV, 2.75%), Cashflow $750. Pros: MASSIVE CASHFLOW BOOSTER Extreme flexibility Pay it down using additional cashflow, redraw it when required. Do NOT live off this cashflow. Do NOT pay down the mortgage principal, since it will not free up on the HELOC due to 65% LTV limit. Use it as a “rainy day” fund Solves the problem of “being able to hold the property for the long term”. Good for temp renos when trying to minimize outflow when no rental income, etc. (Hugo says: one lender will go up to 80% LTV HELOC). Don’t quote me on that. Cons: No principal paydown, so you don’t own more of the property over time. Ever-so-slight lower overall ROI due to higher interest rate (but doesn’t make a huge difference in the overall picture) Doesn’t work for B-lenders (HELOC rates are too high) 2. Reamortize existing mortgages out to 30yrs, bring down payments. If you’ve owned the property for a few years. 3. Fixed payment for variable interest rate mortgages. NOTE: TD is one lender (there might be others) that allow. Check to see if yours is. It means that the payment is fixed, but the ratio of interest to principle changes. This continues until you hit the “trigger” rate (payment isn’t enough to cover the interest) 4. General rate stuff: Variable is still generally the better choice for most people, unless you have a VERY specific reason. Some clients are opting for fixed, because they managed to get good deals on them Fixed: 3.2% and 3.37% Rate holds: Client is getting 1.79% CIBC (from an application started 2 months ago) for primary res Current rates: Scota is low 4% 5yr fixed P-.52% on variable (Prime=3.2% so rate is 2.68%) B lender rates 4.25-5% 1yr Keep in mind: possibly BoC rate hike of up to 1% next June.
- Boost your cashflow by $1000 by using HELOCs. Entry-level Triplex. $1.5M, Rent $5750, Expenses $1100. Scenario A: Mortgage $4900 (80% LTV, 2.75%), Cashflow -$250. Scenario B: HELOC segment $3000 (65% LTV, 3.7%), Mortgage segment $900 (15% LTV, 2.75%), Cashflow $750. Pros: MASSIVE CASHFLOW BOOSTER Extreme flexibility Pay it down using additional cashflow, redraw it when required. Do NOT live off this cashflow. Do NOT pay down the mortgage principal, since it will not free up on the HELOC due to 65% LTV limit. Use it as a “rainy day” fund Solves the problem of “being able to hold the property for the long term”. Good for temp renos when trying to minimize outflow when no rental income, etc. (Hugo says: one lender will go up to 80% LTV HELOC). Don’t quote me on that. Cons: No principal paydown, so you don’t own more of the property over time. Ever-so-slight lower overall ROI due to higher interest rate (but doesn’t make a huge difference in the overall picture) Doesn’t work for B-lenders (HELOC rates are too high) 2. Reamortize existing mortgages out to 30yrs, bring down payments. If you’ve owned the property for a few years. 3. Fixed payment for variable interest rate mortgages. NOTE: TD is one lender (there might be others) that allow. Check to see if yours is. It means that the payment is fixed, but the ratio of interest to principle changes. This continues until you hit the “trigger” rate (payment isn’t enough to cover the interest) 4. General rate stuff: Variable is still generally the better choice for most people, unless you have a VERY specific reason. Some clients are opting for fixed, because they managed to get good deals on them Fixed: 3.2% and 3.37% Rate holds: Client is getting 1.79% CIBC (from an application started 2 months ago) for primary res Current rates: Scota is low 4% 5yr fixed P-.52% on variable (Prime=3.2% so rate is 2.68%) B lender rates 4.25-5% 1yr Keep in mind: possibly BoC rate hike of up to 1% next June.
- Boost your cashflow by $1000 by using HELOCs. Entry-level Triplex. $1.5M, Rent $5750, Expenses $1100. Scenario A: Mortgage $4900 (80% LTV, 2.75%), Cashflow -$250. Scenario B: HELOC segment $3000 (65% LTV, 3.7%), Mortgage segment $900 (15% LTV, 2.75%), Cashflow $750. Pros: MASSIVE CASHFLOW BOOSTER Extreme flexibility Pay it down using additional cashflow, redraw it when required. Do NOT live off this cashflow. Do NOT pay down the mortgage principal, since it will not free up on the HELOC due to 65% LTV limit. Use it as a “rainy day” fund Solves the problem of “being able to hold the property for the long term”. Good for temp renos when trying to minimize outflow when no rental income, etc. (Hugo says: one lender will go up to 80% LTV HELOC). Don’t quote me on that. Cons: No principal paydown, so you don’t own more of the property over time. Ever-so-slight lower overall ROI due to higher interest rate (but doesn’t make a huge difference in the overall picture) Doesn’t work for B-lenders (HELOC rates are too high) 2. Reamortize existing mortgages out to 30yrs, bring down payments. If you’ve owned the property for a few years. 3. Fixed payment for variable interest rate mortgages. NOTE: TD is one lender (there might be others) that allow. Check to see if yours is. It means that the payment is fixed, but the ratio of interest to principle changes. This continues until you hit the “trigger” rate (payment isn’t enough to cover the interest) 4. General rate stuff: Variable is still generally the better choice for most people, unless you have a VERY specific reason. Some clients are opting for fixed, because they managed to get good deals on them Fixed: 3.2% and 3.37% Rate holds: Client is getting 1.79% CIBC (from an application started 2 months ago) for primary res Current rates: Scota is low 4% 5yr fixed P-.52% on variable (Prime=3.2% so rate is 2.68%) B lender rates 4.25-5% 1yr Keep in mind: possibly BoC rate hike of up to 1% next June.
- Matt: Alternative ending: What if Volition was around…? What if Volition existed back 30yrs ago to HELP MY PARENTS. This is sort of a Back To The Future / Marty McFly type of scenario, but bear with me. So imagine that Momma & Poppa Lee had bought as per the Volition Multifamily Business Model in Toronto…? They would have had a $6M portfolio with NO MORTGAGES and $288k/yr cashflow. THIS is why they’re all smiley in this slide! So… they would have made more more money in Toronto. But again, that’s not the point! ****SLOW WITH EMPHATIC PAUSES AND EXCLAIMATION MARKS!! *** The point that I DO want to leave you with: MORE IMPORTANTLY THAN HIGHER AMOUNT OF MONEY THEY WOULD HAVE MADE IN TORONTO… Is that they would still have these properties today! They would have been able to do it BETTER, FASTER, With LESS HEADACHE, and Less RISK. And that is why would are smiling in this picture 1 min 20s Total for this Matt section; 2min 30s
- Matt: Alternative ending: What if Volition was around…? What if Volition existed back 30yrs ago to HELP MY PARENTS. This is sort of a Back To The Future / Marty McFly type of scenario, but bear with me. So imagine that Momma & Poppa Lee had bought as per the Volition Multifamily Business Model in Toronto…? They would have had a $6M portfolio with NO MORTGAGES and $288k/yr cashflow. THIS is why they’re all smiley in this slide! So… they would have made more more money in Toronto. But again, that’s not the point! ****SLOW WITH EMPHATIC PAUSES AND EXCLAIMATION MARKS!! *** The point that I DO want to leave you with: MORE IMPORTANTLY THAN HIGHER AMOUNT OF MONEY THEY WOULD HAVE MADE IN TORONTO… Is that they would still have these properties today! They would have been able to do it BETTER, FASTER, With LESS HEADACHE, and Less RISK. And that is why would are smiling in this picture 1 min 20s Total for this Matt section; 2min 30s
- Ming: ** Matt: And as a BONUS… at the Meetup, I’m going to show you a super sophisticated strategy that we use at Volition to boost cashflow by $500, without even needing to lift a finger!