YVR REMO Show EP. 07 - INVESTING w/ Special Guest Derek Peever
It's here! Episode 7 of the YVR REMO Show!
Yes, we are still going strong in quarantine and will continue to release episodes through virtual meetings at home!
Today we're joined by our good friend Derek Peever, director of Peeverconn. Derek is an experienced and established investor and visits us today to share his knowledge of investing, his history, and where he's at today during the economic change.
Peeverconn group of companies is a real estate based investing organization. In the beginning, Peeverconn dealt with unfurnished rentals and lease to owns. They moved towards furnished suites. Peeverconn now specializes in furnished and equipped accommodations for corporate rentals, insurance claims, and also inbetweeners which is someone who has sold their home but not yet purchased their next property. Starting off small with renovations and holds, specifically with a condo in Agassiz for around the figure of $65,000, these investments were joint ventures for Derek. Today Derek is sitting at around 125 units!
Today we're looking at three different things. There's the resale market, the rental market, and the corporate rental market. They're all behaving a little differently during this quarantine that we find ourselves in. Derek has been experiencing early cancellations and move-outs. 2019 was a very slow year through regular cycles.
Calgary has been soft on the rental side but it has become a great buying opportunity. The best times to invest are often in the hardest times to make money. We feel like Calgary has the biggest growth potential. We're seeing properties in Calgary for $425,000 compared with the same type of properties in Langley at which are nearly $300,000 more in the purchase price. You can find townhouses in Calgary starting as low as $250,000.
The Fraser Valley has some incredible options as well. There looks to be an over-supply coming of condos and townhouses. Units are selling a couple of points below key pricing. Derek suggested a 'jewel in the crown' strategy. This is when the market is soft, make sure your suite has features the other units do not. This could range from being on the top floor or have a gated yard. This gives you an advantage over other sellers in a building.
Derek finds his clients mainly from online sources and word of mouth. Reviews are a key factor in filling units. The focus right now is on full occupancy. At the time of boxing day 2019, Derek had 66 vacant occupancies across Canada. Today he has 18. This comes from a variety of reasons including government workers who must now leave their jobs and come home.
Derek finds today a great opportunity to invest. He started in 2006 during the boom. That's a bad time to be a beginner because you assume it will always be that. The best time is during a buyer's market because it's named after you. Looking at Abbotsford would be a great decision. A good strategy would be to go into the various developers that are sitting on unsold units and try to put together a buyer's group. This will give buying power. You can offer then full price good terms. These terms can include GST, extra parking, extra storage, or a credit towards transfer tax. The next buyer will see that they let four units go at full price, they won't see all those terms. You want to buy at two stages. The first is when they're trying to get their construction financing and desperate to get 50% sold. The second is when the units are ready and not moving. We call this second stage standing inventory which is what we are currently seeing take place in Calgary.
Here at Thrive, we suggest you buy to hold. Withstand the storm. You're either in wealth creation mode or wealth preservation mode.
Follow the link above to watch the full episode! It has great advice and stories to help you with your investing journey!
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