All Forum Posts by: Stevo Sun

Quote from @Kenneth Taylor:

@Stevo Sun so is your advice to wait it out and save up lots of cash for down payment in the future?

That's what I'm doing currently. Just continuous watch the market and run your numbers. Be patient, at some point something will come up that will make sense. One of the properties that has the best cashflow was during the COVID craziness. Bought it over asking, no conditions. The math worked and to date it has been the best cashflow property I have.

Your underwriting isn't necessarily wrong. Cashflow properties are hard to come by. Also Alberta has overbuilt so rents will flatten out and/or drop.

Quote from @Karan Kwatra:

@Kate Sanchez what areas of Alberta edmonton? 

 Edmonton and Calgary have both oversupplied. You will be looking at smaller towns like Red Deer, Lethbridge, and Medicine Hat.

Quote from @Karan Kwatra:

@Stevo Sun thank yeah seems like Calgary was the market 2-3 years ago 

Alberta in general is really quick to respond to supply and demand imbalances. People were crazy to think the growth was sustainable and all the rent control people were up in arms about the increase. Now rent is dropping no one is saying anything. Alberta is a good place where the market balances out over a relatively short period.

Quote from @Karan Kwatra:

New to investing here, I want to start building wealth, move up the social ladder, and can’t be living with my parents anymore.

What markets are you currently investing in for cash flow and growth? I know Windsor used to be popular, but is Calgary still a good choice? Which areas are seeing the most job growth and rental demand?

 I'm in Calgary and I can tell you at the current rate the rental market is oversupplied. There will be downward pressure on rents and I'm expecting developers that are not well capitalized to struggle.

You can find mortgage brokers that will get you to lenders. That's probably the easiest way to do it.

Quote from @Dayne Peterson:

Thanks for sharing @Stevo - that's what my fear was as well. I follow several investor Alberta  facebook groups and they were commonly flooded with cmhc mli select deals. 

anyone from Edmonton can compare? 

I know Saskatoon is building lots in the suburbs but not much high density in the downtown area which is surprising to me.

 I think Edmonton might actually be worse for that. Rents in Edmonton are not as high as Calgary and the property prices are even lower. I think there are even more MLI Select deals there coming online. If you are buying a detached single family home I would say either city is probably okay. But if you are strictly looking to buy a MLI Select deal, I would hold off.

Quote from @Dayne Peterson:

I've seen a large surge of multifamily development deals come up in Alberta over the last 4-5 years. ( for the seasoned investors ) In your  opinions this market - is it too late to start getting into development while there are easing of zoning restrictions and more options for cmhc financing? Im considering to start up in Saskatchewan Canada - Have land under contract for a 20 unit- but am curious to local opinions for those who have done it prior. 

Personally I think Alberta has over built for now. I heard anecdotally the vacancy rates for new built rentals in Calgary are pretty high (around 7+%). Rents have started going down already. I'm actually looking to see if they get distressed as more come online and potentially picking up a couple.

Quote from @Ken Didychuk:

@Stevo Sun The workforce needed to operate these data centers (I believe there are well over a dozen sites that are proposed) may not be as large as the oilpatch, but the workforce needed to build them would be immense. Not to mention all the subsidiary jobs that will be created to support such an influx of trades. Also, these sites are chosen because of their direct access to natural gas for essentially unlimited electricity potential. This means that there will be immediate demand (customers) for natural gas right in our own backyard. The oilpatch will benefit for ongoing production and continual maintenance. Another reason for these sites up here is the incredible amount of heat these data centers generate. The ongoing costs in a cold weather climate are greatly diminished, not to mention the relatively easy access to water for those same purposes. As you mentioned, who knows if this will come to fruition, but the economic potential is absolutely incredible.

 The potential is undeniable, but who knows if and when it will happen. The data center construction depends on the level of data center that is constructed. These are large projects but the ongoing maintenance is not as big as the oil patch. It will be a boon for the province for sure. I actually think your point about natural gas is very key, this solves Alberta's stranded assets problem, which will be helpful long term. I actually think the major cities will benefit (like Calgary and Edmonton) from HQs and smaller towns will benefit with operational centers. But again this is speculation on whether if this happens in our investment life time. 

That's speculation at this point. A lot of things get announced and doesn't materialize (or the timeline is way off). Small towns can give you significant returns and also carry significant risk. Fort Mac is one example in Alberta where it is boom and bust with the oil cycle. AI should be more stable, but data centers also don't take the same level of workforce as oil and gas.