Alberta - Where is the opportunity ?

ThomasBeyer

Senior Forum Member
REIN Member
#81
Depends on the pony !!

Having just reviewed our monthly property stmts I too conclude 2017 was better than the lousy 2015&2016 in Alberta and expect 2018 to be somewhat better than 2017 http://calgaryherald.com/news/local...s-more-optimistic-for-2018-according-to-study No major improvements but tepid tepid small improvements to 2020 I’d say.


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 

CorySperle

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Sep 1, 2010
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#82
Hardly one trick. Alberta is well known for its low taxes, young population, and entrepreneurs and is adapting well in a world without oil, and it will adapt and continue to do so. Yes not insane growth, more slow and steady but you wouldn't know it by the traffic, restaurants, and busyness like I've never seen before.
 

bb2

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Sep 10, 2007
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#83
I completely disagree, if you know your market, there is always opportunity, you may not make as much money on appreciation but there is always properties to make money on the buy and mortgage pay down (this is huge with todays interest rates) and if you're lucky cashflow depending on the market. I myself have never depended on appreciation, for me it's a bonus. We don't consider ourselves risk takers, for us as long as the property is worth what we paid for it in 18-20 years we're happy because we'll have a property free and clear (that tenants paid for) and income for the rest of my life. There are many ways to make money in real estate, the key is not to expect to get rich quick, it's a slow game and if done correctly will definitely make you rich in the long run.
I agree that you can make money in every kind of market. For the most part i see it as long term. It has been slow and steady for me. I don’t expect to make unrealistic returns (but I have made some amazing returns!). After 30 years of doing this I see the huge benefits of mortgage pay down and cash flow. I have gone through every market in Alberta - slumps, recovery and hot markets. I bought in all those markets and made money in all of them. I still hold properties I bought in 2008 that have not recovered their value. They have always cash flowed and i have paid down a lot of the mortgages. I will still make money on them even though the appreciation might not be there.
For me it’s always been about getting in the game, finding opportunities and not being afraid of making a mistake (because you will - but you will learn from them)




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bb2

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#84
I have been buying in Edmonton since 1982 and I’ve seen it all. I continue to buy here and continue to do extremely well. I manage 70 properties with ZERO vacancy right now. The latest stats show more people are moving to Alberta than leaving.
3 properties i bought this year that I fixed up and refinanced to 75% of value cash flow 500.00 each per month. Alberta has always been cyclical. That’s why I like to buy for cash flow. I can weather the storm.


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bb2

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#85
The problem with today's market is that residential real estate is way overpriced or artificially inflated. What does this mean? It means for speculators they're making a killing but for normal rental property investors it's not good at all. Why? Because the house price to rent ratio is screwed. It's very high which under a healthy and normal market it should be lower. And that's why I keep saying there's no real positive cash flow in Canada anymore except in few situations where one can maybe add a suite and rent it out and still the cash flow won't be that great but better than nothing. In normal and healthy markets the cash flow positive should be easy to get with any kind of property and that kind of investment would be attractive and lucrative.

And based on my explanation above if the market is flat at today's inflated prices there won't be any real positive returns because if you factor in all the expenses that you would have to incur over the years you end up not losing but not gaining a lot either and it wouldn't be worthwhile.
I don’t know what your experience is as far as investing in Alberta. I have been investing here for 35+ years and i have made plenty of positive returns over the years. I am getting positive cash flow on all my recent purchases. The house price to rent ratio is not screwed in my opinion. Right now you can purchase a renovated suited bungalow for 430,000 (with 25% down) and get 2500 for rent. If you manage it yourself that’s 400 - 500 cash flow and we are in the middle of a slump in Alberta. I understand the rental market in Edmonton very well and I always adapt to the conditions. It’s the reason I don’t suffer many vacancies. I buy for cash flow now so I can weather the stormy Alberta economy. There’s no real cash flow in Canada? I beg to differ.


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ThomasBeyer

Senior Forum Member
REIN Member
#88
Buyers market for Calgary office towers?

Calgary downtown office towers drop $1.6B in value

http://theprovince.com/business/com...alue/wcm/389ef2b4-597b-481d-87cc-a875f4a84178

Foreclosures in Fort McMurray up sharply, new data shows

http://www.cbc.ca/beta/news/canada/...-mcmurray-up-sharply-new-data-shows-1.4447234
You bet. Got $20M lying around, like the average REIN member to buy a tower or three?

To play this opportunity, with less cash than $25M, why not buy an office REIT, online, in your RRSP, TFSA or cash ?
 

Rickson9

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Oct 27, 2009
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#89
Buyers' market provides choice and price for those looking at resale homes

Calgary’s resale housing market continues to be rattled by the sputtering economic engine, growing supply levels, declining sales, mortgage stress and sagging prices, according to those in the industry.

From a price perspective, Gary MacLean, a 32-year realtor with ReMax Central, says prices at the end of September were sitting at 2014 levels.

He says the median price of a condo is currently $30,000 below where it stood at the beginning of 2014, nor has the median for single-family home moved up or down.

Prices, MacLean says, peaked in February of that year and oil crashed in June.

https://calgaryherald.com/life/home...e-and-price-for-those-looking-at-resale-homes
 

Rickson9

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Registered
Oct 27, 2009
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#90
Calgary: Oversupplied market weighs on prices

Detached sales in October totaled 829 units, for an 8.6-per-cent decline, resulting in a year-to-date decline of 15 per cent. This is the slowest level of detached sales since the late ’90s.

Year-to-date apartment sales have totaled 2,316 units, nearly seven per cent below last year.

Year-to-date apartment condominium prices have eased by 2.8 per cent and remain 14 per cent below 2014 highs. Declines occurred across all districts, with the steepest declines occurring in the North East, East and South districts.

https://www.creb.com/News_Centre/Media_Releases/2018/November/Oversupplied_market_weighs_on_prices/
 

Matt Crowley

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Dec 14, 2013
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Calgary
#92
@Rickson9, as you are a macro-guy...

Yes, although the forecast hinges around the idea of a shift in renter profile in Calgary. There are 2500 renal units under construction right now (below), which I think is structurally fine as the renal universe has declined in Calgary from 57,500 in 1994 to 40,000 in 2017. Strategic, Timbercreek, Minto, Mainstreet, and Boardwalk are all very bullish on multifamily in Alberta. They have bid prices to 3% cap rate on current actuals. I can't make their deals pencil. I think they are buying on a price per pound rather than on income or DCF model - unless they are willing to actually take that risk on a 5% IRR with 3% rental CAGR.


UC.JPG

The problem in Alberta is that there are headlines of "growth" but what is this is actually deferred maintenance in the oilfield that is putting some people back to work. Pipeline access is a major problem. Downtown Calgary, it is a bloodbath and virtually no one is growing. Large players signing new leases are leaving behind spaces and renting it out for pennies because they can downsize and collect rent from their old space.

The story in Alberta is about latent/wasted potential in the energy sector which can come back. U.S. oilfield cap ex was up 40% YOY while we decreased. It isn't about unenvironmental oil or even a lack of majority support for oilfield projects, it has come down to a minority actually stalling our political system. As Canadians, we need to decide if that is what a democracy means to us.

Tech in Alberta is grabbing headlines but there is not really any compelling reason to locate in Calgary other than the fantastic quality of life because our labour is so expensive and globally our tech talent is not top-10 North America...we are not getting worse but not making any substantial steps to better ourselves either. Note that RocketSpace pulled out of the Edison for example.

So yes, I absolutely believe in Alberta's potential. As investors, there is no untangling that your investment in Alberta is an investment in energy so please advocate strongly for pipelines if you want to see your investments succeed! ...tech is not going to help move the needle!