DO YOU SEE WHAT I SEE?
Is it an opportunity? A risk? A home run? A ton of work? Jobs that will feed 5 families throughout the winter? A creative solution? So far out of the box that it doesn’t even make sense? A phenomenal “flip to yourself” home, where you get most of your reno budget back on a refinance.
Same deal. ALL of these responses are real feedback. Not kidding.
A different angle on the same property: what will the renovation cost? $200K? $300K? $500K? $5K? All of these are real estimates from people who have viewed the property. Hint: it is safe, and livable, and in a great location. But it’s dated, and would definitely benefit from upgrades.
Over a dozen people, in and out of the property in a week, and they all see something different! The seller just sees a headache; their view is simply that they need a problem solved.
This is where I have so much respect for other real estate investors. We are all small business owners with a WHY, and goals, and a rough plan for how we want to get there. And beyond strategy, we all calculate numbers—differently!
Each opportunity, each property, will have pros and cons, risks and rewards. If the risk is beyond your comfort zone, or your partner’s comfort zone, that’s a simple “no.”
Time and energy are also big qualifiers for most people. Day after day we meet investors and even tradespeople, that don’t really want to work too hard. They prefer fast and simple reno’s. Period. Or a project where they can easily manage others who are doing the work. That’s a great strategy! And that gives us a niche of bigger projects, with a heavier workload.
And the numbers …. If you live in Toronto or Vancouver, passive appreciation during a big project may even be part of your calculations. Here in the Calgary area, there continues to be an abundance of caution. We build buffers into our spreadsheets, pad our numbers, plan for the “what if’s” etc…. If an After Repaired Value (ARV) isn’t completely clear … or if the spread isn’t big enough, that’s an easy “no” too. Sometimes I think we talk ourselves out of a deal, because it’s been so hard for so long we can’t imagine appreciation—we don’t even believe the appreciation statistics that the Calgary real estate market has seen in 2021. Many of today’s investors find ways to depreciate any possible ARV—it’s whatever the opposite of “rose-coloured-glasses” is. The value we see is so very different than the perspective of out-of-town investors.
To be clear, we’re not here to judge. Everyone has their viewpoints, their strategy, and their bottom lines. We are here to share our learnings as we navigate this investor journey amidst the craziness of this year. Opportunity vs Risk is a matter of perspective and opinion when we look forward. I truly believe we’re all trying to make the best decisions we can during the 4th Wave. Only hindsight will show the brighter, or more challenging paths.
If you’re curious about this opportunity, or intrigued about working with us, connect with us anytime: @mtnedgerenovate @mtnedgedevelops
