Good morning, everyone. Thank you so much for joining us. This is the weekly focusing
call. I'm going to give everyone just a moment to trickle in a little bit more than that.
Good morning, Prue, April, Alina. Thank you so much for joining us. I'm so happy to see
you guys are here. I see Carlos, Lisa. Perfect. Hi, Candice. Thank you so much for joining
us. Deanna, as always. Kyle. Good morning, everyone. Hi, Sal. All right, let's get started.
I love the enthusiasm we have this morning. Today is Monday, April 14th, and I am Gabrielle
Kane, Program Advisor here at Keyspire. I want to thank you so much for joining us on our weekly
focusing call. This is a great opportunity to get those creative juices flowing at the beginning of
the week, to set your intentions and check in with yourself. What have you accomplished in the last
seven days, and what do you plan to accomplish in the next seven? For me, as many of you know,
I love to email myself. It keeps it neatly organized. It has a date and timestamp on there,
and I can check back with myself in the last several months or years if I want, and I can see
my accomplishments. See if my journey has changed or my intentions have changed. How have I changed
and grown? It makes it so much easier to give myself credit for all those wins, no matter how
big or how small. So please feel free to take out a pen and pencil or whatever it is that you want
to write with on a pad of paper, email yourself, and let's get started. So I'm going to start by
telling you what I've been up to in the last seven days. As many of you know, me and my team have been
working for the last several months trying to find properties that cash flow. We are staying out of
Ontario, Canada, and we're looking elsewhere. So we've looked in British Columbia, Nova Scotia,
and Saskatchewan. So far, we did find a place that we wanted to do an inspection on. We had
a 12 unit that we did an inspection. The numbers looked good. They looked positive. We loved it.
Let's take the next step, and we did that. And then upon inspection, we found that more needed,
more work needed to be done and updates needed to be done, which unfortunately altered our numbers
to the point where it didn't cash flow. And as excited as we were, we did have to set aside our
emotions, and we had to decide to walk away from that. But that's okay. We're still getting closer
and closer every single time. Coming from sales and the automotive industry previously,
you have to get a hundred no's before you even get one yes. So I'm so excited to get all the
no's out of the way before we find a yes. And I'm really proud of our team for how hard we've
been working, and we have not, we've not lost our motivation or anything. We're still working
really hard. In the next seven days, I know that I have had a lot of inquiries. My inbox is
overflowing. I've been doing check-in calls with our members and a lot of inquiries on the
multifamily that Stephen had done last week. He did a preview for the multifamily course that he is
doing, and I'm getting a lot of inquiries. So I can foresee myself this whole week touching on that a
lot and having a lot of conversations. I'm really excited about it. He did a fantastic job, as always.
Who doesn't love Stephen? And I'm excited to have those conversations and to help you all
on your journey and help you decide what direction it is that you want to move in.
Having said that, when we're talking about the direction we want to move in
and working with our team, that brings me to my lovely guest this week. I have a wonderful friend
who is a coach, a content creator, also one of the funniest guys I think I've ever met.
Everyone, I am so happy to introduce you to Mr. Jason Witzel. Jason, good morning.
That's high praise. Thank you. I'm glad to join. Funniest guy you've ever met. I try my best.
Well, you're approachable, you're funny, you're knowledgeable.
Humor is the best medicine.
Honestly, you are just a ray of sunshine. I love seeing you in the office. For those of you who
don't know, Jason does come in the office every day. It wasn't always that way, but he has just
totally brightened our week by coming in every week. He's got this awesome sense of humor. It
just seems effortless. They asked for it. I said I would be a major disruptor.
You get what you ask for.
Well, keep it coming.
I just, so Jason, my question to you is we're talking about our 14 day radar.
Would you like to share with us what you've been up to for the last seven days and what
your goals are for the next seven?
Sure.
The goal is to get this latest project done on the next seven, although I think it's going
to be more like 14.
But the latest project I'm working on is the, I guess I'm changing the layout.
It's a, it was a three plus one and I'm taking it to, so a two unit, a three bedroom up and
a one bedroom down.
And I'm taking it to a three plus either one or rec room for the upper and converting what
was the one bedroom to a bachelor.
And there's reasons for that.
Okay.
So what made you decide to change the layout?
Something I saw trending.
So a couple of things.
So we had a less than ideal tenant and you know, if you own investment properties, there's
going to be at some point where you're going to get a crappy tenant.
It's not an if, it's a when.
So that's one thing that anyone out there, you need to wrap your head around that for
sure.
And it sucks, but it's the, it's, you know, part of the pros and cons and part of the,
part of the learning curve, mostly, you know, what tenant to place.
And this is one of those things where a big learning, not a big learning lesson, but I
knew the tenant didn't sit well with me and it was that gut instinct thing.
And I knew I shouldn't have, but I was kind of pressed at the time for different reasons.
So anyways you know, the outcome a few years later is when I went into the unit there,
it was, it wasn't clean, there was a lot to do.
We tried to make things work, like tried to save things like the toilet, cause we were
redoing the bathroom floor.
Tried to save the kitchen cupboards, they were all okay.
Tried to save the stove, which they cook with oil.
So then we had to replace the fan.
Like it was, it was one thing after another.
And that was the big learning lesson is like, I should have looked at it as a whole and
be like, you know what?
Time for a redo anyways.
It's been at least 10 years.
So a remodel was probably in order, although we were really like, it just looks newer.
Right.
But still, you know, we put in, I said this before, expensive toilets, expensive taps.
Don't cheap out.
And you'll learn a lesson if you put cheap toilets or cheap taps in your units.
So yeah, reasons why I looked at what rental vacancies, where rental rates were trending.
So that was a big part of it.
I'll jump back to that.
So I'll just talk about right now, what's happening in both the US and Canadian markets.
We'll start with the US rental markets and where it's been trending.
So ever since the Great Recession of 2008, although I wouldn't call it great here, it
was less of an impact here in Canada than it was in the US.
Much bigger impact in the US.
It was a bit of a slowdown or a blip in Canada.
But ever since then, purpose-built rental multifamily housing construction activity
was declining.
And that was declining probably right up until 2021.
As we know, the pandemic changed quite a few things, including spurring on construction.
So ever since 2008, you've had, and I'll say even long before that, I'll say a decade before
that in Canada, construction was trending downwards and the rental vacancy declining
even further, quite a bit further actually, than even the US.
But in the US, long-term vacancy average is about 7.2.
Currently it's about 6.9.
So it's still longer than the average, but that historic low was observed at 5.6 in 2021.
So what's happening is there's more construction that's coming onto the market.
So you're seeing, and this is going to go region from region, province to province,
state to state, city to city, of course, always, but this is talking on the average and I'm
seeing it in quite a few cities and that's why you're seeing the average increase.
So what's happening is two bedrooms, which is...
usually the, what construction starts and units are mostly made up of are considerably
higher than they were.
So then you've seen an increase in the vacancy naturally, and that's going to be different
in your three, in your one bedrooms and in your bachelors, the vacancies are going to
be different through those, but there's almost a ripple effect or there, or there can be
anyways, uh, because you've got, you know, bachelor, maybe they want a bigger property.
They've met someone.
They want to go into a two or they're coming from a one to a two or two to a three.
So there's that big gap in the twos and eventually it's kind of started there first and eventually
it impacts, um, all of the different bedroom makeup.
So that's what you're seeing in the U S I see stability, um, kind of moving forward
because when you look at the actual, uh, rental rates, they're there right now, I'd
say they're, um, they're level, uh, stable.
That's the word I meant to use.
So they're stable right now.
Um, but there's still, they still remain quite high, higher than pre pandemic levels.
So affordability for some is, is a challenge for many renters.
So the good news in all of that is we're, we're, you know, as investors, we're still
getting quite good rental rates for our units.
What you need to be aware of is that if you were used to, you know, easily being able
to rent out your unit, especially if you've got maybe a two, you might have a bit more
challenge, more traditional.
So I know before for me, I'd get, you know, 20, 30 plus emails.
It was easy.
Um, so we'll, we'll see what happens with this next one, but before I get to that Canada
rental vacancy rates.
So again, they're climbing, uh, if you look at it, what it was when it reached a record
low of 1.5, which is insane.
So that means there is almost not almost, there was 0% vacancies in many cities.
And I know that goes for places like Halifax, Toronto, Vancouver, Kitchener, Waterloo, you,
you name it.
Some of these in some smaller cities, but, um, the average rate now is trending upwards
for sure.
Um, so the trend since then it's increased to 2.2, um, and that's going back a bit.
I think the latest is it's, it's going to be closer to, to over three, um, which is
kind of where you want it to be honest, call it market balance, right?
Between somewhere between three and 4% for vacancies is what I call kind of decent, um,
rental growth has been accelerating.
Uh, and again, average rental rates are still high stabilizing, but they are coming down
in some markets and that's because of building and construction.
Now again, there's going to be, so there was a spur of construction and now in some cities,
there's actually a record low of new construction permits being put out.
So we're going to go through this, I think a little bit of a, a roller coaster in Canada
and anyways, a little bit over the next, say probably five to 10.
So what's important is just to just keep your eye on the ball on that.
You should always understand what's happening in your market, especially obviously if you
own rentals in those markets.
So with all that long winded stead, the reason coming back to why I decided to convert this
to unit is in the Kitchener-Waterloo region.
What I've noticed is signs and a sign is a sign.
Can I say that?
Sign is a sign.
Where's your sign?
So when a sign is a sign and you're looking for signs, um, that the, the rental rate or
the market's changing is I'm seeing open house signs on apartment building.
You live in the region.
I don't know if you've seen them.
I have.
It's very noticeable.
You'll notice now that I've told you that, my name's going to pop in your head.
You're programming my rest.
Yes, exactly.
Every time you go, you're going to be, damn it, Jason.
So if I'm understanding you correctly, there's going to be more vacancy for two bedrooms
as opposed to the one in three bedrooms based on people upsizing and downsizing.
Is this correct?
Yeah.
That that's what I'm, that's the trend I'm seeing now.
The reason, um, with the three bedrooms, there's, there's, there is a demand there.
So the demand, there's less demand for two, which is going to have an impact on your rental
rates.
Um, and the vacancy in those twos are going to be higher.
Now there's a.
different reasons for that. Some of what I just explained, construction, but the pullback on
students coming into the country is a big one. So that's had a major impact on any city where
there's schools and anywhere where there's rental rates around those schools. And this is that whole
trickle down effect. So when those are impacted, they're impacted. They eventually will impact
elsewhere in the market. So you can talk to anybody that's renting lately or has new units
coming online. This is what they're experiencing. So with that said, when I saw that as I started
this renovation, which by the way, this is something else you should weigh and consider.
So I've got a friend who's helping me. We're just doing it on Saturdays and he's obviously,
he's giving me the friend's discount on it and I'm helping him. However, with the amount of months
of vacancy, I'll have to go back and do the math to see if I'm really saving money or would it have
been more efficient just to hire somebody to get all that work done? Because honestly, all that
work would have been probably less than a week. But when you add that up in Saturdays, it's not
all a Saturday. We're well over two months now. So there's two months worth of vacancies.
Yeah. You have to take into consideration all your carrying costs.
Yeah. So the thought was there, but at the end of the day, I think I'll come out the same.
Now what's good is I know the quality of the work. I'm there to oversee it. And I get to hang out
with my friends. So it's not such a bad thing. But it'll be interesting to see what the final bill,
the two look like. So yeah, when we started this project, I decided to do a three up and possibly
what could be a fourth down. So it could act as a bedroom. It's already got the ego size window down
there. And it's just really putting up a wall. It gave better access to the garage for the upper.
Whereas before the lower had access to it and I had to tell them to lock that door and don't go
in. So the layout totally made sense. It's going to be a nice size bachelor. So with that additional
plus one or a rec room, it gives the upper more space. It gives them a yard, gives them a deck,
gives them a garage, gives them a lot of things that renters could be looking for in a three
bedroom. And then the lower unit was a great size, one bedroom. It's got a small kind of galley
kitchen. What was a large bedroom that kind of furnace utility storage area, which was a good
size and a really, really large kind of rec room area. So large bedroom. So when I looked at it,
I'm like, man, this could still be a pretty decent size bachelor and affordability. I mentioned that
both US, Canada, I'm seeing like, so looking at where my rents have gone with, with what was a one,
I'm only going to get like maybe a hundred to 150 less for the bachelor.
But I'm going to gain probably an additional 300, making a net gain of like 150.
And it could be more on the upper. I love that. I love how you're running
the numbers to see all these different scenarios and how you can make that work for you, how you
can make it work with the ever fluctuating market. All these things are constantly changing and then
how it coincides with the surrounding area. So your rental is in Kitchener, is that right?
Kitchener, Ontario and Kitchener is in a hub for those of you who don't know the KW area,
which is Kitchener, Waterloo, Cambridge. That's just outside of Guelph. There's a lot of colleges
and universities. Universities, one college, 500,000 population. Precisely. So you're actually
making these changes based on the surroundings and the tenant profile that you're trying to attract.
I love that. Yeah. And like I said, it was the biggest, the light bulb moment was driving around
and I'm seeing these, you know, open house come in and look at our brand new rentals. These are
brand new on the market, um, you know, mid to high rise rental properties that are, have these
gigantic billboard signs that are out there. And I'm like, what is going on? So, so I knew right
away with it, you know, I keep up on stats and stuff just, but I don't pay as much attention
necessarily until I get an upcoming vacancy. And then I started looking at the rental rates, right?
I got an idea of what's going on, but when you start to dive in, which is what I did when I saw
that sign, uh, that's when I, I, then I dove right in the head first into this.
stats right which is fun um and to see and to and and then to
open up conversations with other people say hey
like what are you seeing in the market what what is going on with your rentals
and that's when i started to look at the rate so
like realistically i know i say i'm getting
uh 100 150 less but i'm i'm getting the same
as what i did from a bachelor uh three years ago uh that i was getting
from the one bedroom that's how much the one bedrooms had increased in that
time so they've i think ones have a level off
twos have definitely either come down or leveled off if you
if you look at the stats so that's the reasoning
um the other kind of reasoning is with a bachelor i know i'm not gonna
get a um not likely to get two people
it's probably going to be you know i doubt it's i doubt a student i mean it
could be a student i'll look at that um there's parking there's enough
parking for three uh three spaces so two for the up one
for the down and bonus you know if there's not
another because it is tight but if it if it's a person that is a
student that doesn't have a car or you know it's on a bus line it's it's on
a transportation line it's close to college it's not that far to
take a bus here so it all totally um made sense and uh
i love it when a plan comes together that's
awesome i love the way that you're thinking and you're taking everything
into consideration uh being on a bus route um and having
access to public transit like that uh my question
um i burning question is when you are working on a project uh how far into
this project were you before you decided to change
and did that affect uh any costs um
not far so when i started to realize that
um the renovation was going to be not just a facelift and you know it's
still not a crazy crazy crazy rental because of the size
like i'm redoing the kitchen but i mean the
kitchen's small it's like a an eight foot galley so there's all told
there's maybe one two three maybe four or five cabinets that had to
go in full size stove um so as i was
as we were discussing as i was discussing it with my contractor
and my wife she was pointing out things like the garage they still have
access the lower unit saws access that's stupid
and then um so then i started to think about it like he had already started you
know we started removing stuff right tearing stuff out so it was it was in
that tear down stage that i started thinking i'm like i said
in my contract how easy is it to throw out the wall he goes
easy goes here there's the smoke and fire alarm so it sat on the other side
of the wall that gave him access to the garage and
i'm like okay let me we can keep going but keep this in
mind and then we had to move a door so he's like you got to move this
bathroom door swing it over here because it would have been on the other side of
the unit but um other than that that was the biggest
kind of major change so the wall moving door
um was really the biggest kind of thing layout change that we had to make and
and the wall when i say wall it's the size of a hallway so
i mean it's you know a few two by fours and drywall and soundproofing that's it
so yeah it was early it didn't i mean the only impact on
um budget would have been the materials obviously
for that wall the time for the contractor that moved the door so not a
lot um less than a thousand i would say
when it's all said and done and you know it's still gonna
result in the same rent i had a few years ago
and more rent from the upper oh that's great i love that you're able to pivot
and think logically about the situation what am i getting myself into
how much sense does this make things the market will change when you're in the
middle of renovations that you didn't plan for
and you're still able to pivot you're still able to say okay i'm
open-minded and receptive to different possibilities
um does do you and your wife work together on these projects regularly
yes i'm chuckling because she's got some uh some ideas that i'm
that i in my head i immediately shoot down the contractor who's my friend he's
very close to us he comes on holidays with us there's four of us that go together
anyways um he's correct he's like don't say anything he's he's going shush
let her let her um put the idea out there and
let's talk it out because i've learned that
i need to be a little bit better listener when she's got ideas
because she did have there's a few really good
But automatically, no, wait, that's too much money,
too much work.
I already know, and I go off on a rant.
And my friend's like, just relax.
So yeah, she manages the budget.
I hate working with the accounting, and the budgeting,
and the paying, the design.
So coordinating the project, that's where I excel.
So that's where we kind of, our duties are like, right?
But yeah, we got together and discussed it.
And all three of us agreed.
It just totally made sense.
Oh, I love that.
I've experienced the same thing from your wife's perspective,
just to let you know.
We were driving through Windsor a couple of years ago
and taking a look at properties.
We had set aside an entire day to just look at properties.
And my partner was asking, oh, what would you do with this one?
And what would you do with this one?
And we kind of did a pre-drive around before we actually
visited them.
And I was like, oh, well, I like that one.
It's really small.
I like the size of the lot.
You know what?
I would tear off the roof.
I would put a second level on, and maybe something
in the back as well.
And then you could get three units out of it.
He shut it down instantly.
Nope.
And then we drove around with Mike Seale.
And he said the exact same thing.
And I was sitting in the backseat of Mike's car.
And I was like, oh, I'm sorry, Mike, can you repeat that again?
At least three more times.
I didn't quite get that.
And the look on his face, the look on my partner's face, just shock.
I was like, hmm, man, I wish I was clever enough
to come up with that idea.
That is a great story.
Oh, goodness.
Well, thank you so much for joining us, Jason.
Pleasure as always.
I absolutely love that you've got your radar on the go.
You have your plan set.
You know what you're going to do.
But so you're going to finish this project that's
planned between 7 and 14 days from now?
It should be done?
Yeah, I mean, I would love to have it rented May 1st.
I think that might be a strategy.
It might be possible.
I'm going to try and do everything in my,
even if there's some things like, I've got the pictures, pictures,
that's another thing.
Like, if you've got a rental unit,
and you've already taken stage pictures, always save those.
And that way, you don't have to do them again,
unless there's major changes to the unit.
As far as color, flooring, everything's
going to pretty much be the same.
So I've got the photos ready to go.
We're two weeks-ish away from May 1st.
I don't know.
I think I'll put the ad out before that.
That's what I was going to say.
Like, there might be some small finishing things to do.
Like, if I'm looking at it, and some of it
might be on the other side.
So I might just practice that when
I'm taking the tenants through to say, hey,
if you want this this soon here, maybe I'll
discount it or something for the inconvenience of us
trying to finish a few things in the unit.
The biggest thing is paint, paint, and ZVZ, though.
It's about 500 square feet, and not even that worth of paint.
So you can get that done the day before,
two days before they move in.
I mean, ideally, the week before.
Did you post anything for the-
Not yet.
Ooh.
So how long before May 1st?
I think I'm going to-
I was seriously considering posting this weekend
and seeing what the-
just to say, hey, this unit is going
to be ready around May 1st.
We're open for showings the following weekend, which would
be the week before May 1st.
Ooh.
That's cutting it tight.
It's cutting it tight.
But I mean, worst case, I'm getting
leads of people who can jump in right away.
If not June 1st, I'm sure there's-
I want them for May 1st, because I
feel like there's going to be people that want to move May
1st or June 1st.
You're one of them who's moving around that time,
so I'm sure there's others.
Unless you're in Quebec and you got that weird-
no offense, Quebec, but that whole move in, move out
date is ridiculous.
The US, a lot of Canadians, some Canadians in the US,
people may not know what I'm talking about, but-
We got one minute.
Quick, tell us.
In Quebec, I don't know what the percentage is,
but it's very high.
Everybody moves on July 1st, which is nuts.
So just think about that.
That is actually the most popular moving date in Canada
that I'm aware of is July 1st.
You want to book a truck?
100%, you can't get one in Quebec.
I've heard in Montreal, it's everybody's moving,
it's a thing.
There's historic ties to that.
I'm not going to get into it.
I can't remember exactly why it goes back to schools
in the 70s or something.
I don't remember, but what an insane-
Just imagine it.
If you're in somewhere in the U.S. where the whole entire state of, I don't know, California
or Texas moves on the same day.
Go ahead and try and grasp that for a minute.
Anyways.
You'd have to book your truck a year in advance.
Oh, a year in advance.
I'm moving actually just at the beginning of July, but I booked it for Friday, June
27th for that exact reason.
And I had to book about three months in advance just to secure a truck.
So that's a real thing.
Well, thank you again for joining us, Jason.
Thank you everyone in the community for joining us.
So lovely to see all you.
I have noticed all your comments in the chat and iPhone Phillips says, get her done, Jason.
I'm with you.
Thank you all for joining us.
I hope you guys all have a fantastic and productive week.
Take care.