Been helping with some well priced deals in the last few months as presales slowed down. Like most members are feeling out there, it's certainly a buyer's market!
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Personal example - Concord's new luxury tower in Vancouver West - we sold one of our own investment units.

Bought $396,000 496sq ft - mid levels, Northern city views towards downtown
Listed $619,000 (didn't buy parking - it's now $50,000 up from $15,000 4 years ago - buyer can elect to buy if they like it)
SOLD: $560,000

The gains are great no doubt but last year I would've said $700K (about $1,400/ft as comparable in area were that price).
Not that we had to sell, but renting out at $2,000 a month (1BR) wasn't worth the rate of return tying up $112K of equity (20%) or $80K, about 20% deposit of what we invested at presales 2016.

$300K mortgage now 3% ~ is $1600 month
maintenance fee is $250/month
rent = $2,000 give or take
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$150/month x 12 = $1,800/year net income
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$1,800 / $80,000 (invested) = 2.25% cap rate
$1,800 / $112,000 (market price equity locked up) = 1.16% cap rate

Basically at this rental return you'd be far better off buying REIT, Canadian Banks, Telecom (Telus/Bell) various reasonable largecap Canadian dividend stocks and getting 3-4% div income which is taxed lower.

On a taxable income perspective, tax is far more advantageous for capital gains and dividend income. Which is why we have been pushing for clients to sell for a gain.

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Market is looking more reasonable now especially for entry level homes but good deals can certainly be had for larger detaches where 10-15% bargaining room is more the norm.

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Bit of a presales update

SURREY
Anthem Georgetown
Despite that grand opening last week of Anthem's Georgetown still had some people lining up (yup it's still not that bad?!) albeit for the doorcrasher $259K-279K starter homes.

King George Hub 3
PCI's next big phase after the 2016 craze of selling out 800+ units in 2 months (2 towers), likely won't go back to $299K units but maybe mid $300's.

CENTRA
Surrey 102 Whalley area still selling out well - low start prices $300K + parking is hard to ignore despite smaller developers. Not a bad entry level unit with great coworking space and location.

VANCOUVER
The Pacific
Some prime units still available but seeing some discounts $ for $1.5M+ units

ACORN
On East Renfrew a movement of low density 3-4 story lowrises is spurting up and despite market slowdown they've nearly sold out. New one is coming up called Eliot.
1BR $400K
2BR $650K
2BR + rental suite $800ks
They're basically nofrills but new developments near Skytrain that get people into the market. I think these units will continue to sell as people have to live and in many cultures owning a home is still the best way to save and/or necessary for family growth

METROTOWN
Thind's Highline
48 stories above Metrotown skylines. 1-3 bedroom following up Lumina 4-phase development around Brentwood, will be interesting to see pricing here but expect at least $950-1000/ft similar to Maywood.

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ASSIGNMENTS
Picking up great deals for clients on assignment market - I think there's great arbitrate opportunities (buy cheap and relist later) for those who have the cash and ability to borrow.

Example:
Goldhouse 20+ floor 2BR 800ft 2 bedroom 2 bath Metrotown with massive 800ft balcony - completion Oct 2019
Original price in 2016 $650K
Selling $790K.
OFFER $710K
I'm getting a client to write for $710K and good chance we will get it.
That's nearly $880/ft and free massive balcony.

Completing on it and reselling I thinking $800-840K is very fair for brand new luxury build in Metrotown. $1000/ft.

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Hopefully summer's starting off - those who PM me here for questions I don't check as often lately but please email or text office. thanks!

Isn't the cap rate based on the current property value? Not just the invested amount. That would be ROI?

For the NOI calculation, I thought the mortgage isn't deducted from that calculation.

Any info on the Concord project at Metrotown? On hold?

From what I can tell Concord is even holding off selling Galleria 2nd phase (Richmond Concord Gardens) area. No immediate updates on their Metrotown follows up to MET 1/2 that I know of.

They were suppose to be on VIP sale last year around Chirstmas but is being hold off for now.

Yup you're correct.

Cap rate = (rent (income) - expenses (strata, insur, property tax) x 12) / property value

I'm bringing up ROI and investment return because REITS and Canadian banks are offering 4% dividend yield plus potential for 3-5% capital appreciation on stock, trading at 10-15 price to earnings versus 20-25X P/E in US.

I'm looking at entering the market this year, seems like there's lots of 1br units in Richmond that are in the 450-550k range but the units I really like, the sellers have em listed at close to 1k / sq ft.... Hoping they will drop their prices after the July assessment comes in

Just for your reference, units in the Olympic village area are getting snapped up pretty quickly when priced roughly 5-10% below assessed. Approx. 1-1.1k/sqft for units that are a couple years old.

Prices have definitely dropped in Olympic Village. Neighbour's unit sold for approx 2.5mil which is 400k less than what they paid for it originally. IIRC they listed for 2.7mil and it was assessed at 2.8mil.

Still expensive but definitely seen a drop in prices.

Guys what's the best strategy for townhouse pre-sales? They always ask you are you working with a realtor. Why ask that question? I heard some salesperson will give you a bit of a rebate if you are not with a realtor. True? What's the best play at this game?

That's actually a good question lol

Been hitting up a lot of pre-sales and open houses lately and that's usually one of the first questions asked.

I am not a realtor, so correct me if I'm wrong, but I work with realtors.

Typically, if you don't have a realtor, there's less commission to be split. In a normal transaction with realtors on both sides, the commission is split between the two. But if one side doesn't have a realtor, only the selling side has to pay the commission and the buyer could be rebated.

Normally, when I'm involved with off-market / non-listed transactions, we tend to look for interested parties without realtors. The pie is small, so the more pieces there are (involved parties), the smaller the cut.



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When a sale is completed, the agent representing the seller and the agent representing the buyer will split the commission. Looking for easy commission, IMO.

Realtors can no longer double end a deal. If you go into a presale without a realtor the developer will have someone else write the deal, and another individual for the sellers agent.

You really won’t be saving anything if you come without an agent.

Likely not - most selling realtor (companies) will likely just take double end commission and make 2X as much I've done this myself before I got my license as well - having a realtor on your corner with much more information and database (MLS history) access helps a lot with negotiation. \

Case in point - we recently sold an investment condo and used a realtor friend - she brought a non-represented buyer and she wrote contract for both of us.
Rather than the $8K commission she's now in for $14K full commission but I negotiated getting 1/2 of the buying commission back.

Best is to find a realtor who's able to just write offer for you and get you some cash back which should still beat the $1K or some free interior upgrades the developers can add in. Good luck, great time to be on the buy side.

When I sell and buy both realtors I use offer 50% of their commission back to me.

what does everyone think about the 5-10% cmhc helper for 1st time buyer?

do you have get mtg insurance or can you still do 20%+ down?

it caps at 560k which isn't much

so me and the wifey are looking in the 2.5-3 mill range and most of these guys are not really budging on prices. We're pretty good with an all cash offer (will sell the richmond house later since its a bad fucking market right now) but still most of these sellers arent really moving much on the price. A lot of them have started this tactic where they list a 3 mil house for like 2.3/2.4 and then you give them that offer they just reject it hoping for a bidder war. What a waste of fucking time.......i hate real estate so much.

https://www.rew.ca/properties/R23830...ive-burnaby-bc

like this fucking thing. Which has a few downsides. Backyard goes into some warehouse crap and its like less than a 1km from CN/CP mainline tracks. I gave her the asking price and shes like NOOOPEEE.

p.s. fuck your subzero fridges. why these assholes keep flexing a god damn fridge. i dont give a fuck you spent 20k on a damn fridge, ill gladly take a stinking maytag and have an extra corolla in my driveway.

That realtors couldn’t double end deals like that anymore ?

Subzero fridges help keep produce fresh for longer than traditional fridges. Yes they’re expensive but they also help save money by not throwing away food as often.

Think of it like comparing your Corolla to your Maserati. Both can get you from A to B, one just performs better.. because it’s a Toyota. LUL

That’s only because it has true dual zone climate control though no? There are are more inexpensive options offering the same thing

You're still buying at the peak. Wait it out and imo even $2m is too much for this house. Too many negatives, the biggest been the warehouse.

thats the justification they use to sell it, but its honestly like buying a tesla to try and save gas money. In the end, the amount of wasted produce $$$ wont even compare to how much this stupid ass fridge costs.

I just dont like that every house i go into, the first thing those idiot realtors say to me is LOOK AT THAT SUBZERO!!!! WutFace

LOL I would ask them to take the fridge back and lower the price by 20k
I do see price being drop in Coq center area but reasonable price condo are still selling fast.

There should be a financial penalty for listing something at an asking price and rejecting a no subjects offer at asking price. Fucking time wasting manipulation tactics.