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Calgary ACRE is No Longer - But even better is....

DonCampbell

Investor, Analyst, Author, Philanthropist
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Aug 22, 2007
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Time for true leadership. Time for Members and their guests to get REAL... Time for Tactic adjustments

As many know, people in Alberta and Saskatchewan are suffering. Their economy has stagnated yet many are shrugging and some are even rejoicing in this western pain (a very sad and pathetic fact).

Well we at R.E.I.N Real Estate Investment Network are NOT going to shrug or sit by idly. We are going to grab the REINs (pun unintended -sort of) and continue to take up the cause of those in need. In need of answers, in need of solutions and in need of strategies.

Investors, home-owners, renters, business owners are in need of "What do we do next?" So that is why March 4th, 5th & 6th in Calgary the previously scheduled weekend for annual ACRE Conference we are going to do whatever it takes to provide the answers, strategies and solutions for those refuse to be victims or refuse to be 'distracted' from what really matters.

We are holding what can only be described as a "Summit of Solution and Strategies." .

This will not be flash/dash/celebrity halo effect. This will be a coming together of experts, analysts, industry leaders, business owner and veteran investors all who live/work/invest right in Alberta. All of whom have weathered economic storms before, all of whom will be 100% committed to being open and honest, all of whom will be sharing their strategies they have tested in these types of economic environments. Many of them will be based in the subtext of:

"How to stabilize, then profit, in an economic downturn"

This is real life - but in our case it is real life with answers, real life strategies, real life people with real life Albertan experience that works.

That's all I can say at this point (other than to say, I am not kidding - if you live work or invest anywhere in Alberta or Saskatchewan you really must be in Calgary for this).

The best thing to do is to ensure you are pre-registered (whether a Real Estate Investment Network Member or not). This is such hot-off-the-press news that the link to register still says ACRE - that's OK. (you can ignore the agenda at the link - you will be sent the whole new one soon).

I just wanted you to get this important news BEFORE it hits the web and the official announcement is made (who knows, I am probably in trouble with the team at the office for saying something already before they are ready

http://info.reincanada.com/calgary-acre or 1-888-824-7346

PS I am serious about the real life importance of this event. The time for pro-activeness is now, before it gets too late and the economic tsunami becomes overwhelming. There are solutions, there are actions that you can take and there can be good news but only if the proper Alberta & Saskatchewan specific tactics are used. You can go enjoy the flash and dash some other time - right now it is time to take care of yourself and your financial position.
 

margaretcowan

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Feb 22, 2008
Messages
469
I would be rather hard for me to get to Calgary for these dates. Will REIN be posting all the workshop discussions on this very timely, essential theme on the March REIN Alberta online workshop links? I'm sure I'm not the only out of town Alberta real estate owner who would be extremely grateful!
 

Thomas Beyer

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Aug 30, 2007
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Regarding this worthwhile event, being in Alberta, here is my short view / answer to falling equity (possibly into negative territory if too high a mortgage to start with, if you bought at the peak or if you paid perhaps too high a value), in your rental property:

a) have far more cash reserves, either in real cash or a LOC

b) hang in there (possibly as long as mortgage is paid down to below property value) as mortgage paydown is still generating ample equity for you in flat (or slightly declining markets), plus some cash-flow

c) lower rent and/or be a great marketer of your vacant asset (if vacant)

d) generally, be a better landlord and be knowledgeable about your competition (if your asset is vacant or full)

e) tighten expenses across the board, incl. upgrades

Filling vacancies is absolutely critical to hang in there as is access to cash reserves if you own rental properties in declining markets, such as AB right now.

For those that have not yet bought in Alberta or are considering if they should be buying more: Waiting for bottom is OK as it is unclear where the bottom is right now in Alberta. Might be 2016. Might be later. Bargains and foreclosures have emerged already. More layoffs to come in the construction industry in 2016, and generally lower wages (not in the overpaid public sector, of course) and less over-time.

Edmonton is more diversified than Calgary, Red Deer, GP or some smaller towns. Houses / THs / MF buildings close to LRT or future, funded LRT will do better than those in the boonies. Development in niche markets will do ok too.

We stopped buying in Alberta in 2014. Probably should have sold some, and moved assets to the US in 2013/2014. Oh well. Hindsight, eh ? 20/20 .. not quite .. more like 17/18 .. We do a) to e) right now in Alberta. We cancelled a multi-million $ acquisition planned for May 2015 and stopped all major reno projects to preserve cash and to address needs for lower priced rental units. Refinanced a major asset in Calgary with a 2.36% mortgage (without CHMC) with a loan amount exceeding acquisition price in Dec. 2010 as asset has appreciated almost 60% in five years. Focusing on BC and TX right now to deploy available cash. Not raising money right now (may change in a while) but managing assets as impeccably as possible. Taking title to a 65 unit MHP park shortly in BC and took over management of a second larger asset in Dallas, TX in "loan-to-own" program.
 
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rkiefte

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Aug 23, 2010
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Wow, I think I should be there. I figure by the end of August we should be close to the bottom or maybe October. How does one know? I've been watching and waiting. Take Fort McMurray for instance, prices are lower or similar to what they were in 2009 at the begin of the climb out of the last recession. I'm eagerly waiting...
 

Thomas Beyer

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Aug 30, 2007
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Wow, I think I should be there. I figure by the end of August we should be close to the bottom or maybe October. How does one know?

The bottom is visible only in the rearview mirror. Oil production and oil transportation is systemically assaulted & exploited using various excuses, specifically "climate" but more specifically for $s, by new provincial, federal government, BC and Quebec.

With Europe-like social & taxation policies Canada's growth will be very very slow for years to come. Debts will rise massively and the associated stimulus from transportation improvements will take quite a while to kick in. With announcements like these by Suncor http://business.financialpost.com/n...-spending-by-10-after-surprise-2-billion-loss and associated halt in major projects and construction projects all around (hotels, shopping centers, commercial, housing, ..) and excess capacity in house construction and empty condos I have no idea where the bottom is in Alberta.

Once at bottom it will not snap up quickly. There is no rush to deploy capital quickly. Take your time. A return OF your capital is more critical than a return ON your capital right now. Have some cash ready, as opportunities will emerge in your chosen space.
 
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Matt Crowley

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Dec 14, 2013
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I would agree with Thomas' statement above with a slight adjustment: that a return of your deployed capital in Alberta is more important than a return on your deployed capital. Opportunities are already arising in Edmonton for those who believe that our province has a long-term attraction for growth. There is reason to think that Alberta is in for a nasty couple of rounds but this isn't the end of Alberta.

Lenders are going to continue lending in Alberta for any viable deal. The big difference from 2008 is that we are not seeing a total freeze of liquidity and wide-striken fear of solvency. Consumer proposals are not up sizably and banks have taken very proactive actions to shore up equity. The liquidity is there, it is just a matter of meeting growing market demands in new market areas.

Opportunity and pent up demand:
  • Affordable housing: watch out for Social Infrastructure Plan from the Liberals $1.7B promised. No GST on developments for affordable housing. Develop, partner with a government and hold. Governments likely to take advantage of attractive lending rates also at provincial level.
  • Legal suites and Cornerstones II: right now in Edmonton you can buy a brand new $450k home and get up to $20,o00 in grant funding with 5% down. Not a great investment but excellent opportunity for first time home buyer. Even better if you pair this with an RRSP under the First Time Home Buyers' Program
  • Co-op Housing: trend up and coming! Project selling out around Strathcona in Edmonton
  • Skinny Houses in mature neighbourhoods
  • Abandoned U/C projects
As the old adage goes, "How do you make a small fortune in real estate? Start with a large fortune."

This is a time unlike many others we have seen...recessionary and liquid.
 

DonCampbell

Investor, Analyst, Author, Philanthropist
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Aug 22, 2007
Messages
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Right now the Summit of Solutions is just that... solutions not to "Whether to buy or not" but solutions for those in the market - stabilizing their portfolios.

Then, and only then, look for market buys.

No one ever nails the bottom, or the top. But right now the leadership must come for those looking for answers for current holdings.

PS There will be LOTS of opportunity in the future to find the deals, but only if strategies are followed to weather the current storm.
 

RE123RE

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Jan 22, 2016
Messages
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Hi,
Read Thomas summary twice - initially to understand and internalize, then to remember and take action.
There is an additional good reason not to panic and remain optimistic - global population growth.
This is the main reason real estate did so well and made so many richer than ever dreamed to be.
The world's population grew to only 1 Billion from the beginning of time till 1816!
Then by 1916 doubled to 2 billion in only 100 years!
Then quadrupled to around 8 billion in the next 100 years from 1916-2016!

Here is the good news: the world population is expected to continue to grow by around 50% in the next 100 years
(High estimate - will double again to 16 Billion!)

https://upload.wikimedia.org/wikipe...svg/2000px-World-Population-1800-2100.svg.png

Calgary is no different. The only question will it take 2 years, 5 or 10 to see it growing.
As long as you manage well and do not sell, you will do well.

Thanks
 
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