53: Battling Misconceptions of Home Appraisals with DS Appraisers' Taylor Dedora

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Estate Podcast with your host,
award-winning realtor, Matt Glenn,

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and top producing mortgage broker,
Taylor Atkinson.

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Professionals in the industry,
enthusiastic entrepreneurs, and

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successful investors.

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When it comes to real estate,

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we're all in.

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back to the show, guys.

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Thanks for tuning in.

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Matt, how are you doing?

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I'm doing well.

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How are you doing, dude?

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I'm doing great.

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Thank you.

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A lot of big things happening on
the show lately.

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We have been having some
professionals in the industry,

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accountants, a grazer for this
show.

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And without saying too much, us.

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Yeah.

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Yeah.

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Yeah.

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We are also having a pretty big
time lawyer coming on the show in

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a couple of weeks.

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So we're actually recording that a

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couple of days after this episode
comes out.

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So if anybody wants to address any
legal questions, concerns

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throughout real estate
transactions, fire us a DM.

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Yeah.

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If you a question for a lawyer, we

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can ask them like lawyers charge a
lot of money to answer these kinds

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of So he's coming up.

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Yeah.

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We're trying to use this as a free
platform for you guys.

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So obviously, we're just asking
questions that we're interested

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in, but any topics that you want
covered, yeah, send us a message

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and we'll fire away at that.

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But yeah, we want to jump right

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into the show.

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It's an awesome show.

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Taylor DeDora, I've used him
personally, but he is a wealth of

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knowledge.

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And yeah, I think you guys will

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find a lot of good value out of
this show.

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Yeah, that's a good one.

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Once it's two Taylors versus one

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Matt, but I Yeah.

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The next Matt is yet to come on.

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It'll have to be a good one.

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I know.

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I'm looking forward to the two
Matt's versus one day.

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Yeah.

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I might just have to bow out on

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one.

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Okay.

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Enjoy the show guys.

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Okay.

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Welcome to the Taylor.

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show, you for and Matt.

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I'm as many tailors as I can.

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Absolutely.

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You've had a Taylor.

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Oh yeah.

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I saw in your awesome.

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I always often thought that I like

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Taylor's a female better.

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No offense to us.

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You know, I was taking it as
offense and then I was like, wait,

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your name is Yeah.

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Yeah.

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Yeah.

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I'm allowed to go there.

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I just think, I mean, it goes
smoothly, but are you Tay?

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Do you get Tay from your buds or
how?

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No. Do you?
I do.

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Yeah.

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you Matt?

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Well, Matt short.

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Yeah, true.

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That's true.

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Yeah.

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Matthew.

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Okay.

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Well, Taylor, we like to just let
our guests, you know, connect with

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our listener.

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What's your perfect Friday look

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like in terms of work,
productivity, and then leaving

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into the weekend?
Obviously, starting with a

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podcast.

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I mean, that's a good way to do

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it.

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I'm gonna have to do this every

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week now.

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Friday's easier.

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They're more relaxing.

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It's kind of like, you know,

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during the Christmas season where
people expect a little less of

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you.

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So the pressure's off.

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However, I still like to keep the
pressure on and finish lots that

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day.

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I typically professionally have

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set deadlines for Fridays.

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So it's good to have those done

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for the week.

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Things that hang over for next day

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or for the following Monday,
that's a good way to go backwards.

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I've often felt for myself and
told my team that finish things.

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You can still mull them over and
have fresh eyes on Monday, but get

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them 99% complete and move on.

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One of the reasons for our success

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is getting stuff out.

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If you leave it, it can drag for

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several more hours the following
day.

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But for me, getting up and
certainly being optimistic, I'm

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not one of these people that's
crazy early riser and puts on 10K

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before six, never have been, but I
get up and throw some pushups and

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sit ups, a couple of squats just
to get things going and then start

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planning the day.

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I'm a shower day planner.

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You got a whiteboard in the
shower.

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A whiteboard in the show.

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Exactly.

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Exactly.

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Like my wife's always kind of

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like, what are you doing?
Like, Like my wife's always kind

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of what are you doing?
like, well, Like, I'm well,

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getting the day worked out here
before they call it the beautiful

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chaos hits have a seven and a nine
year old.

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So at some point in the morning,
we meet and greet and you never

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quite know what mood they're going
to be in.

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So just prepping for the day, a
healthy breakfast, get in and go

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for it.

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We do jeans day at the office.

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They're just something a little
more relaxed about And it.

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work yeah, hard and go for We do
jeans it.

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day at the There's office.

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just something a little more

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relaxed about it.

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And yeah, work hard to get things

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out and then celebrate that.

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Celebrate the day, celebrate the

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week.

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At the end of the day, it's really

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important to me.

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Sometimes my drive home isn't long

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enough in a way to make that
transition.

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But I mentioned to you prior that
the work-life blend is a skill and

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I'm still working on it.

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That's for sure.

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But getting better coming down
from a day.

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Someone once told me to physically
do something, you know, bundle up

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your day and work life and throw
it into the bush on the way in the

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door.

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Well, I don't do that, but I have

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a breezeway between garage and
house and just kind of physically

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look out into the field and make a
point of going okay i did the

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thing today this week awesome
you've done it now switch gears

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because this beautiful chaos that
lies within across the threshold

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is about to hit in the face and
your kids don't give a shit how

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your day went they just want dad
so yeah that's successful friday i

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guess continued with maybe glass
of wine with my wife, making

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dinner.

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I've recently found throwing on

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some dinner jazz.

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Super nice.

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Yeah.

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A little random for me.

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My if they ever listen to they're
going to probably pepper me on

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this one.

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friends, this, But throwing on a

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little dinner jazz.

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If they ever listen to they will

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listen to it.

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this, Do people listen to this?

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Yeah.

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Growing by the minute.

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Yes.

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There you go.

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I hope I don't make things go
backwards for you.

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And then it's movie night but yeah
a perfect friday is the right mix

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of relaxation getting stuff out by
the end of the week obviously

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satisfying clients deadlines and
then celebrating that and

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transition into weekend dad mode
yeah i was and as you were talking

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about that like the transactional
state it kind of like i'm not

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saying matt has no stress in it
like you are on state, it kind of

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like, I'm not saying Matt has no
stress in it, like you are on it,

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but it kind of like goes down.

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And then by the time the appraisal

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needs to be ordered, usually
coming from a broker and it's

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usually a deadline and it's
usually a, you know, a price that

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you're probably like, Oh God, what
are people doing?

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And then, Oh, there gets to be
like rental income.

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And like a lot of pressure just
starts trickling down the

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transaction so we find it's
typically the last thing or one of

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the last things yeah typically
that home inspection has happened

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everything's kind of aligned and
folks are waiting to order that

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appraisal before they know
everything else is set up so it's

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often the caller the text of the
email saying got this condition

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removal on tuesday what do you
think?

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And we're used to that.

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That's fine.

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So why?
So yeah me, it's usually like, we

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want to get the commitment letter
from a lender first, of course,

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because we need to, you know, it's
got to be directed to the lender.

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Yes.

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But I guess, is there an

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opportunity?
Should like the system change

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where an appraisal is ordered
before listing is like, would you

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like to be higher up the order?
I to appraisal should be ordered

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if a transaction is looking like
mean, it's me, going to happen.

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It gets everyone on the same page.

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No more surprises.

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We would love it if sellers had
them sitting there.

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Of course, buyers can't
necessarily use that appraisal

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that someone else has done, but it
certainly corrals things and

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connects by the process.

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When we get orders that say, Hey,

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yep, we got some time getting
ready for all this subjects are in

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two weeks, music to our ears.

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I think the more people on the

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same page, the better.

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You We that Matt subjects, two

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weeks.

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At least in balanced market.

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I mean, it's either that or no
subjects at all.

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And then I'm like, I don't care.

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Like the pressure is not on me.

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This is true.

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You're subject free, buddy.

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Go for it.

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Yeah, rock and roll.

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Okay, well, in low hanging fruit,
I'm just curious if you can, you

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know, give us a definition.

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BC assessments have come out

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recently.

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What's kind of the difference

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between BC assessments and actual
appraisals?

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a very common question.

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Not the easiest to answer or not

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the easiest, at least to sound
good when I answer.

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Assessments, let's be honest here,
they can be all over the place.

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I think very generally, right now
in the residential world, they're

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kind of as close as they've been
for many years because we had such

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exponential growth for a time.

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Assessments, people always have to

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remember, are effectively a year
behind.

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They're based on the value from
the previous July and the

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condition from the previous
October.

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Why they do that, good question.

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But they've now kind of caught up.

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This year, for the first in a
while, we're seeing a lot that are

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over.

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And that's on the rare side

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historically, but some that are
over.

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And our firm also is involved with
assessment appeals.

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So we see those, but generally
these days, a lot closer

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assessment, great in a lot of ways
and market value, you know, should

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be kind of the fairest and
equitable way to tax people.

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There's millions of properties and
only so many appraisers.

259
00:08:06,766 --> 00:08:12,115
They don't do what we do and they
don't come into every single home

260
00:08:12,115 --> 00:08:14,544
and analyze the heck out of it.

261
00:08:14,544 --> 00:08:16,531
I don't even even think they drive

262
00:08:16,531 --> 00:08:16,751
by.

263
00:08:16,751 --> 00:08:17,952
Sometimes they do something they

264
00:08:17,952 --> 00:08:18,341
don't often.

265
00:08:18,341 --> 00:08:19,676
It's Google Earth photo you know

266
00:08:19,676 --> 00:08:22,456
and they're relying on data from
some building permit from 1978 or

267
00:08:22,456 --> 00:08:26,558
what have you but a lot of new
homes they'll show up and check

268
00:08:26,558 --> 00:08:27,948
them out of course.

269
00:08:27,948 --> 00:08:30,103
Generally hey they do kind of as

270
00:08:30,103 --> 00:08:32,710
well as they can with information
what they have but it's a

271
00:08:32,710 --> 00:08:34,900
regression formula it's called a
regression analysis where there's

272
00:08:35,220 --> 00:08:38,234
just this you know a big long
formula with several different

273
00:08:38,234 --> 00:08:38,947
variables attached to that.

274
00:08:38,947 --> 00:08:40,072
And the weight of the variables

275
00:08:40,063 --> 00:08:41,607
are based on the different
characteristics, you know,

276
00:08:41,600 --> 00:08:43,135
neighborhood, lot size, home size,
quality, out the bottom end spits

277
00:08:43,135 --> 00:08:44,284
an estimate of value.

278
00:08:44,284 --> 00:08:45,898
And, you know, sometimes often

279
00:08:45,898 --> 00:08:49,038
until they have to redo a whole
role or they get checked on

280
00:08:49,038 --> 00:08:51,550
things, they get an assessment
appeal that is laid before them.

281
00:08:51,550 --> 00:08:53,418
They're not having to look
specifically at an individual

282
00:08:53,418 --> 00:08:55,005
property to kind of recalibrate.

283
00:08:54,905 --> 00:08:56,507
The difference in terms of

284
00:08:56,507 --> 00:08:59,652
refining overall, I don't have
exact numbers for you, but I'd say

285
00:08:59,652 --> 00:09:03,076
it's probably the closest it's
been in don't see some that are

286
00:09:03,076 --> 00:09:04,120
hundreds and hundreds off.

287
00:09:04,120 --> 00:09:04,413
it's funny.

288
00:09:04,413 --> 00:09:08,160
So a few clients and we're in this
situation where, you know, maybe

289
00:09:08,160 --> 00:09:11,826
somebody is buying from their
parents or a friend or like not a

290
00:09:11,826 --> 00:09:15,315
true private deal, but they're
trying to come up with the value

291
00:09:15,315 --> 00:09:16,920
without having a real estate agent
involved.

292
00:09:17,020 --> 00:09:19,696
And obviously like Matt has a
bunch of information and data that

293
00:09:19,696 --> 00:09:22,955
you pull from for your CMA to kind
of say, this is what we're going

294
00:09:22,955 --> 00:09:24,163
to list it at.

295
00:09:24,163 --> 00:09:25,774
But then the market also dictates

296
00:09:25,774 --> 00:09:27,960
what it's going to actually sell
at.

297
00:09:28,320 --> 00:09:31,486
So they're in this situation where
they're like, you know, this is

298
00:09:31,486 --> 00:09:33,105
where BC assessment is like,
what's your opinion?

299
00:09:33,105 --> 00:09:34,698
I'm like, I don't know.

300
00:09:34,698 --> 00:09:36,047
It kind of varies.

301
00:09:36,047 --> 00:09:39,643
Like the market would dictate what
it would actually sell at.

302
00:09:39,643 --> 00:09:43,782
You could get a real estate agent
involved or you could pay for an

303
00:09:43,782 --> 00:09:45,571
appraisal and they're like, yeah,
maybe we'll do an appraisal.

304
00:09:45,564 --> 00:09:47,594
I'm like, okay, that's going to be
a few hundred bucks.

305
00:09:47,587 --> 00:09:50,558
You know, like at least if it's
just done like privately, there's

306
00:09:50,458 --> 00:09:51,592
not a huge rush.

307
00:09:51,592 --> 00:09:53,024
You're not directing it to a

308
00:09:53,024 --> 00:09:55,293
lender and they're like a few
hundred bucks i'm not gonna spend

309
00:09:55,393 --> 00:09:57,256
that but we're talking like a
million dollar transaction you

310
00:09:57,256 --> 00:10:01,202
know it's a really small part of
the puzzle there that doesn't

311
00:10:01,202 --> 00:10:05,667
really cost that much and you know
for you guys like it's a four-year

312
00:10:05,567 --> 00:10:08,320
degree like to be a mortgage
broker you could do it in a few

313
00:10:08,319 --> 00:10:10,686
months it's not that difficult
yeah but like an appraiser you

314
00:10:10,686 --> 00:10:12,980
guys are worth your weight where
you're actually like sifting

315
00:10:12,980 --> 00:10:15,194
through daily right so well we
certainly think we are i mean hey

316
00:10:15,194 --> 00:10:18,216
there's nothing rocket science
about we do yes you have to have a

317
00:10:18,216 --> 00:10:20,220
four-year degree and then a couple
more years through solder but to

318
00:10:20,240 --> 00:10:22,994
come back to your point about the
few hundred dollars in cost

319
00:10:22,994 --> 00:10:24,842
relative to what's happening it's
certainly always been our pitch

320
00:10:24,842 --> 00:10:27,642
and it's more than a pitch it's
just a reality that that appraisal

321
00:10:27,642 --> 00:10:31,456
can be utilized as a tool you know
for various reasons just like to

322
00:10:31,456 --> 00:10:34,789
get people on the same page
especially family members you know

323
00:10:34,789 --> 00:10:38,194
and just have this unbiased look
at it that's based on you know the

324
00:10:38,194 --> 00:10:40,694
science and art of the market i
think there's a misconception

325
00:10:40,694 --> 00:10:43,965
often we do is that it's just a
hey add up the sticks and the

326
00:10:43,965 --> 00:10:46,973
stones add them together here's
the numbers like well no there's

327
00:10:46,973 --> 00:10:50,245
so much more qualitative analysis
involved in the background about

328
00:10:50,245 --> 00:10:53,473
what's happening with the market
supply and demand and where market

329
00:10:53,473 --> 00:10:54,980
participants apply different
values and the variables that go

330
00:10:54,980 --> 00:10:56,664
on along with it.

331
00:10:56,664 --> 00:10:58,883
But yeah, for you to suggest

332
00:10:58,883 --> 00:11:02,139
something like that to anyone in
your family, I think is fantastic.

333
00:11:02,139 --> 00:11:05,450
And we say, hey, well, here's a
$400 report.

334
00:11:05,450 --> 00:11:09,187
This is a $1.5 million property
that one party thinks is 1.7 and

335
00:11:09,187 --> 00:11:10,595
the other thinks is 1.2.

336
00:11:10,595 --> 00:11:12,799
There's a lot of money at There's

337
00:11:12,799 --> 00:11:13,042
play.

338
00:11:13,042 --> 00:11:15,560
a lot of emotion at There's play.

339
00:11:15,560 --> 00:11:17,348
a lot of emotion at play.

340
00:11:17,348 --> 00:11:20,347
Let us help you, you know, get it

341
00:11:20,347 --> 00:11:20,629
corralled.

342
00:11:20,629 --> 00:11:22,534
if I guess you're switching from

343
00:11:22,534 --> 00:11:27,158
like your primary residence to a
rental, it's not a bad idea to get

344
00:11:27,158 --> 00:11:28,043
that value.

345
00:11:28,043 --> 00:11:28,947
You know, if you're talking

346
00:11:28,947 --> 00:11:31,236
capital gains in the future, like
that could save you thousands and

347
00:11:31,236 --> 00:11:32,583
thousands in capital gains.

348
00:11:32,583 --> 00:11:35,021
gains in the So, and we do that.

349
00:11:35,021 --> 00:11:39,848
That's one of the many functions
of our work, working for

350
00:11:39,848 --> 00:11:42,061
individuals, investors, and
accountants to do just that.

351
00:11:42,061 --> 00:11:44,060
And often we're working
retrospectively.

352
00:11:44,060 --> 00:11:47,709
So meaning, hey, you know,
accountant says I have to get an

353
00:11:47,609 --> 00:11:50,041
appraisal because at such and such
a time, I either, you know,

354
00:11:50,041 --> 00:11:52,480
converted it one way or the other.

355
00:11:52,380 --> 00:11:54,658
And we have to look at capital

356
00:11:54,658 --> 00:11:59,928
gains starting from that point or
ending at that point or what have

357
00:11:59,928 --> 00:12:00,130
you.

358
00:12:00,130 --> 00:12:02,858
And then we're going back in time.

359
00:12:02,758 --> 00:12:04,578
And we have the data.

360
00:12:04,578 --> 00:12:05,094
Again, it's not rocket science.

361
00:12:05,094 --> 00:12:06,600
However, it can take us more time
and the cost can be a little

362
00:12:06,600 --> 00:12:11,197
higher for that report to have to
go back several years and find the

363
00:12:11,197 --> 00:12:14,201
right comps and put our minds in
the headspace of what that actual

364
00:12:14,201 --> 00:12:17,211
market was doing at that time
versus just doing it back then

365
00:12:17,211 --> 00:12:20,510
when you knew it was probably
coming and saving yourself a few

366
00:12:20,510 --> 00:12:20,659
bucks.

367
00:12:20,659 --> 00:12:22,223
But yeah, we do work for that type

368
00:12:22,223 --> 00:12:23,191
of function regularly.

369
00:12:23,191 --> 00:12:24,904
Well, there's one other thing I'd

370
00:12:24,904 --> 00:12:28,963
like highlight for customers is,
you know, if we're into like a

371
00:12:28,963 --> 00:12:33,515
tight subject removal period and
they're like, oh, we're just

372
00:12:33,415 --> 00:12:34,980
waiting on the appraisal.

373
00:12:34,972 --> 00:12:36,529
We know it's going to come in.

374
00:12:36,529 --> 00:12:37,628
This is a great deal.

375
00:12:37,628 --> 00:12:39,307
It's not just the value.

376
00:12:39,207 --> 00:12:41,331
It's not like you're looking at
foundation, but if something pops

377
00:12:41,331 --> 00:12:44,403
up in a report or you guys see
something and it gets disclosed to

378
00:12:44,402 --> 00:12:47,065
a lender and then the lender's not
willing to lend on that.

379
00:12:47,165 --> 00:12:48,985
Basement suites that are
non-conforming that you're using

380
00:12:48,885 --> 00:12:51,764
rental income, but maybe the door
isn't like a lockable door.

381
00:12:51,764 --> 00:12:52,878
Like those little- Stove outlet.

382
00:12:52,878 --> 00:12:54,058
Yeah, like those little things.

383
00:12:54,058 --> 00:12:54,320
Absolutely.

384
00:12:54,320 --> 00:12:56,041
Good call for the suite for the

385
00:12:56,041 --> 00:12:56,806
market rent estimate.

386
00:12:56,806 --> 00:12:58,655
Like if that kills a deal and we

387
00:12:58,655 --> 00:13:01,709
can't use that lender, it really
puts the pressure on everyone else

388
00:13:01,709 --> 00:13:03,045
that made that transaction happen.

389
00:13:03,045 --> 00:13:04,500
So just, I guess the point would

390
00:13:04,500 --> 00:13:07,222
be, it's a very necessary tool
that needs to be done.

391
00:13:07,122 --> 00:13:10,080
And you said like unbiased, which
is pretty powerful as well.

392
00:13:09,980 --> 00:13:13,436
So most lenders, like I'm not
allowed to even choose who the

393
00:13:13,536 --> 00:13:13,884
appraiser is.

394
00:13:13,884 --> 00:13:15,880
it has to go through a blind order

395
00:13:15,880 --> 00:13:18,799
some lenders don't let you pay for
them and like it has to just be

396
00:13:18,799 --> 00:13:19,963
everyone's very independent Like
so appraisal management companies

397
00:13:20,063 --> 00:13:23,504
that wedge their way into the
system 10 or 20 years ago and so

398
00:13:23,404 --> 00:13:25,108
you're having to order through
them and unfortunately don't often

399
00:13:25,108 --> 00:13:27,770
get to choose who does it or the
right appraiser for the job.

400
00:13:27,770 --> 00:13:31,132
But yeah, to come back to your
points about the more than just

401
00:13:31,124 --> 00:13:33,569
value, we do thousands and
thousands and thousands of

402
00:13:33,569 --> 00:13:34,526
appraisal reports for purchases.

403
00:13:34,526 --> 00:13:37,235
I would say that in my career, the

404
00:13:37,235 --> 00:13:40,960
number of times that the value has
come in less or significantly less

405
00:13:40,960 --> 00:13:43,880
than the purchase price, I could
count on a hand or two.

406
00:13:43,880 --> 00:13:47,377
Generally, our market is very good
at figuring itself out in terms of

407
00:13:47,377 --> 00:13:47,841
value.

408
00:13:47,841 --> 00:13:49,408
Yes, there's definitely the odd

409
00:13:49,508 --> 00:13:52,611
time where we look at things and
go, no, there's something funny

410
00:13:52,611 --> 00:13:53,579
happening here.

411
00:13:53,579 --> 00:13:55,441
Or if we haven't thought of this,

412
00:13:55,441 --> 00:13:57,592
there's funny business, but that's
very rare.

413
00:13:57,592 --> 00:14:01,088
So you haven't seen seen that
happening lately Not yet.

414
00:14:01,088 --> 00:14:03,733
We're in a transitioned and
transitioning market, Matt, for

415
00:14:03,833 --> 00:14:03,996
sure.

416
00:14:03,896 --> 00:14:04,764
There's all these other factors

417
00:14:04,764 --> 00:14:07,360
now, and great, we can use rental
income to help qualify.

418
00:14:07,360 --> 00:13:42,888
But the asset and other factor of
our appraisal work that, hey, we

419
00:14:11,565 --> 00:14:14,227
have to work that out.

420
00:14:14,227 --> 00:14:16,420
And like you said, that can squash

421
00:14:16,420 --> 00:14:19,142
a deal if there's not enough
income potential out of that home

422
00:14:19,142 --> 00:14:21,900
or that suite to help applicants
qualify, so too can remaining

423
00:14:21,900 --> 00:14:22,170
economic life.

424
00:14:22,170 --> 00:14:23,519
Remaining economic life is

425
00:14:23,519 --> 00:14:25,672
probably one of the biggest
factors that comes into play.

426
00:14:25,672 --> 00:14:30,409
And that is the estimate of how
long this real property that we're

427
00:14:30,409 --> 00:14:35,939
looking at here as it is, is going
to last.

428
00:14:35,939 --> 00:14:41,646
And so typically if this is a
teardown, but folks have applied

429
00:14:41,646 --> 00:14:46,146
as if it's going to last for
another 50 years and loan to

430
00:14:46,046 --> 00:14:46,975
values and all the things.

431
00:14:46,975 --> 00:14:48,697
Yeah, sometimes it's portrayed as

432
00:14:48,697 --> 00:14:52,440
the bad person for sure, but that
needs to be considered as well.

433
00:14:52,840 --> 00:14:54,994
Typically, lenders want to see
remaining economic life estimate

434
00:14:54,994 --> 00:14:58,193
of at least five years more than
the AM that's being applied for.

435
00:14:58,193 --> 00:15:00,564
Yeah, that's a great point because
there was a property that we're

436
00:15:00,564 --> 00:15:02,944
working on and that was a big
issue for it.

437
00:15:02,944 --> 00:15:07,699
So you're protecting the lender,
you're protecting the client, like

438
00:15:07,799 --> 00:15:12,039
you're just kind of the mediator
to make sure that no one's gonna

439
00:15:11,939 --> 00:15:14,451
essentially lose their shirt on
That's it, a transaction,

440
00:15:14,351 --> 00:15:16,480
specifically that function, we
come in as extra insurance,

441
00:15:16,480 --> 00:15:16,967
really.

442
00:15:16,967 --> 00:15:17,779
We are heavily insured.

443
00:15:17,779 --> 00:15:18,321
Lenders know that.

444
00:15:18,321 --> 00:15:18,916
They like that.

445
00:15:18,916 --> 00:15:21,355
But we're just coming in with
nothing to gain or lose here.

446
00:15:21,355 --> 00:15:24,549
We do our job and say what our
opinion of value is.

447
00:15:24,549 --> 00:15:28,255
But along with that comes so much
qualitative information and

448
00:15:28,155 --> 00:15:31,962
analysis that the lenders and we
think that particularly the buyer,

449
00:15:31,962 --> 00:15:35,285
obviously seller just wants to
move on and get done with the

450
00:15:35,285 --> 00:15:35,594
deal.

451
00:15:35,594 --> 00:15:37,510
But we think everyone involved

452
00:15:37,510 --> 00:15:38,474
should appreciate it.

453
00:15:38,474 --> 00:15:39,140
We're talking to realtors.

454
00:15:39,140 --> 00:15:41,511
A good appraiser is talking to the
realtor involved.

455
00:15:41,511 --> 00:15:44,097
Hey, how did this go?
Do you have any other offers?

456
00:15:44,097 --> 00:15:45,424
What do you know?
Were showings like?

457
00:15:45,424 --> 00:15:48,299
What was the feedback?
Do you have any other, you know,

458
00:15:48,199 --> 00:15:51,623
listings that you think?
What's the market been like?

459
00:15:51,723 --> 00:15:53,116
How much competitive supply
exists?

460
00:15:53,116 --> 00:15:56,732
market been like how much
competitive supply exists you know

461
00:15:56,732 --> 00:16:01,037
so when you look at back in time
you know that kind of the depth

462
00:16:01,037 --> 00:16:04,441
and breadth of our qualitative
analysis is a lot more than meets

463
00:16:04,441 --> 00:16:06,730
the because it's the market we're
trying to figure out what you know

464
00:16:06,730 --> 00:16:10,448
humans they've decided to pay and
sell for based on all these

465
00:16:10,448 --> 00:16:12,170
factors involved beyond just the
sticks and stones of that

466
00:16:12,170 --> 00:16:14,440
particular home you kind of
brought up there.

467
00:16:14,440 --> 00:16:18,382
So for insured properties like
CMHC insured, they don't usually

468
00:16:18,382 --> 00:16:19,120
get appraisals.

469
00:16:19,520 --> 00:16:22,594
And if they do, it's like an AVM.

470
00:16:22,594 --> 00:16:22,795
Yes.

471
00:16:22,795 --> 00:16:24,770
It's less equity.

472
00:16:24,770 --> 00:16:27,979
I know there's insurance on it,
like default mortgage insurance,

473
00:16:27,979 --> 00:16:31,753
but why would lenders not care so
much about that just because it's

474
00:16:31,753 --> 00:16:33,669
insured and they have no risk?
Yeah.

475
00:16:33,669 --> 00:16:34,052
Crazy.

476
00:16:34,152 --> 00:16:36,348
It's backed up by a big old policy

477
00:16:36,348 --> 00:16:39,780
and a lot more than ours was.

478
00:16:39,780 --> 00:16:40,620
And ours is big.

479
00:16:40,620 --> 00:16:41,980
And exactly right.

480
00:16:41,880 --> 00:16:43,751
I mean, it's in a way

481
00:16:43,751 --> 00:16:45,924
counterintuitive, isn't it?
I mean, there's greater risk in a

482
00:16:45,924 --> 00:16:46,951
lot of ways.

483
00:16:46,951 --> 00:16:48,439
the listener, if you're less than

484
00:16:48,439 --> 00:16:51,240
20% down, less than a million
dollar owner occupied, you'll get

485
00:16:51,780 --> 00:16:52,042
default insurance.

486
00:16:52,042 --> 00:16:52,693
But generally those don't

487
00:16:52,693 --> 00:16:52,803
require...

488
00:16:52,803 --> 00:16:53,820
Which you pay you pay for.

489
00:16:53,820 --> 00:16:55,240
you definitely Yeah, pay It gets
for.

490
00:16:55,192 --> 00:16:56,929
added to your mortgage but
balance.

491
00:16:56,929 --> 00:16:57,916
generally those don't require...

492
00:16:58,016 --> 00:16:59,520
Which you pay you for.

493
00:16:59,600 --> 00:17:00,677
definitely Yeah, pay for.

494
00:17:00,677 --> 00:17:03,000
It gets added to your mortgage

495
00:17:05,020 --> 00:17:06,625
balance, but generally they don't
require an appraisal because the

496
00:17:06,625 --> 00:17:07,473
lender is comfortable because they
have that insurance.

497
00:17:07,410 --> 00:17:08,190
But there's so much less equity.

498
00:17:08,127 --> 00:17:08,194
equity.

499
00:17:08,194 --> 00:17:09,628
They never do or they rarely do?
Very rarely.

500
00:17:09,628 --> 00:17:12,417
We do work for your Genworths and
your CMHC from time to time

501
00:17:12,417 --> 00:17:14,375
without a doubt, but it's rare.

502
00:17:14,375 --> 00:17:14,702
Yeah.

503
00:17:14,702 --> 00:17:18,976
Like at that Like they'll do an
avm sometimes which is just yeah

504
00:17:18,976 --> 00:17:25,438
plugs it into the computer and
spits it out yes or no kind of of

505
00:17:25,438 --> 00:17:29,380
times we're doing work for those
what are their tailor their four

506
00:17:29,560 --> 00:17:32,773
entities that back high loan to
value we'll do work for them on

507
00:17:32,773 --> 00:17:36,003
the back end if things haven't
gone well or if the market's

508
00:17:35,903 --> 00:17:39,386
changed then we'll have to come in
yeah just like like you said, it's

509
00:17:39,386 --> 00:17:39,607
counterintuitive.

510
00:17:39,607 --> 00:17:39,828
Yeah.

511
00:17:39,828 --> 00:17:40,990
I didn't know that.

512
00:17:40,990 --> 00:17:41,820
Where's the market going?

513
00:17:42,980 --> 00:17:45,556
Like you're seeing data, you've
been doing this for 15 years.

514
00:17:45,556 --> 00:17:48,160
Do you feel there's still a runway
in the residential, commercial,

515
00:17:48,260 --> 00:17:50,375
multifamily?
Like what excites you, I guess,

516
00:17:50,275 --> 00:17:52,825
moving forward?
I'll start with saying, you know,

517
00:17:52,825 --> 00:17:55,779
kind of my slant and my investment
perspective has always been and

518
00:17:55,879 --> 00:17:57,026
always will be long term.

519
00:17:57,026 --> 00:17:58,522
I don't pretend to be the person

520
00:17:58,522 --> 00:18:01,489
or the professional out there
that's pushing short term.

521
00:18:01,489 --> 00:18:03,340
Look for this specific opportunity
and you'll make millions next

522
00:18:03,752 --> 00:18:03,802
year.

523
00:18:03,782 --> 00:18:04,178
Real estate is long term.

524
00:18:04,016 --> 00:18:04,828
I think it would be naive to
suggest, number one, for anyone to

525
00:18:04,679 --> 00:18:08,646
get into real estate, to look for
the short-term wins, and also

526
00:18:08,552 --> 00:18:10,048
naive for me to suggest that I
have any flipping clue as to what

527
00:18:10,048 --> 00:18:12,396
the market's going to do with this
tiny world that we now kind of

528
00:18:12,396 --> 00:18:12,800
live in.

529
00:18:13,060 --> 00:18:13,780
It's such a small world.

530
00:18:13,740 --> 00:18:16,532
There's so many factors that can
dramatically and quickly impact

531
00:18:16,532 --> 00:18:17,550
the market.

532
00:18:17,550 --> 00:18:20,009
However, we live here and it's the

533
00:18:20,009 --> 00:18:23,978
cliches thing to say that we're in
the Okanagan, what better place,

534
00:18:23,978 --> 00:18:24,848
but it's absolutely true.

535
00:18:24,848 --> 00:18:26,291
You know, in the world, what

536
00:18:26,291 --> 00:18:28,976
better place, you know, there are
equal places in my opinion to

537
00:18:28,976 --> 00:18:32,981
invest, but here is, I don't find
that there's anything better in

538
00:18:32,981 --> 00:18:35,570
terms of where the market's going.

539
00:18:35,570 --> 00:18:37,655
My prediction is that we need to

540
00:18:37,655 --> 00:18:41,043
putter away a little bit for a few
months or a year here in D.C.

541
00:18:41,043 --> 00:18:43,487
We're finding there's a lot of
wait and see mentality.

542
00:18:43,487 --> 00:18:45,063
Matt, you're probably dealing with
that daily.

543
00:18:45,063 --> 00:18:46,020
Yes.

544
00:18:46,360 --> 00:18:47,779
And obviously, well, both of you,

545
00:18:47,779 --> 00:18:50,414
of course, Taylor and Will, right?
Do I wait?

546
00:18:50,414 --> 00:18:51,230
Do I wait?
Yeah.

547
00:18:51,230 --> 00:18:53,864
On that note, to buy real estate,
get it.

548
00:18:53,864 --> 00:18:58,122
If it's related to your primary
residence or a vacation home or

549
00:18:58,022 --> 00:19:02,009
something, then you might feel the
need to be a little more selective

550
00:19:02,009 --> 00:19:06,047
but if it's for investment you buy
whenever you can buy save up

551
00:19:06,047 --> 00:19:10,484
enough money do not listen to the
noise if you have the down payment

552
00:19:10,484 --> 00:19:16,009
and you qualify you buy so i think
yeah we're not going to see the

553
00:19:16,009 --> 00:19:20,794
big gains that we've we kind of
got used to for the last three or

554
00:19:20,794 --> 00:19:24,702
four years, obviously in the short
term here, but that doesn't mean

555
00:19:24,602 --> 00:19:27,501
that there's not some fantastic
opportunities for the long-term.

556
00:19:27,501 --> 00:19:31,493
Multifamily, of course, it's there
and it's going to be there for our

557
00:19:31,493 --> 00:19:31,671
lifetimes.

558
00:19:31,671 --> 00:19:33,623
And this affordability factor is

559
00:19:33,623 --> 00:19:33,800
huge.

560
00:19:33,800 --> 00:19:34,381
Industrials exploded.

561
00:19:34,381 --> 00:19:35,326
So that's good.

562
00:19:35,326 --> 00:19:36,924
They work hand in hand, jobs, you

563
00:19:36,924 --> 00:19:39,031
know, they kind of cycle back and
forth.

564
00:19:39,031 --> 00:19:44,600
i think in the short term there's
a lot of you know meat left there

565
00:19:44,600 --> 00:19:47,224
and that industrial industrials
double tripled you know in terms

566
00:19:47,224 --> 00:19:51,499
of land in the last few years
obviously you know we can't expect

567
00:19:51,499 --> 00:19:55,771
to see that again for a while yeah
but man so many pockets places

568
00:19:55,771 --> 00:19:59,797
like in vernon and you probably
hear me you know say the word ver

569
00:19:59,797 --> 00:20:01,166
Vernon and talk about North
Okanagan works.

570
00:20:01,266 --> 00:20:04,230
That's where we're based and where
we spend a lot of our time.

571
00:20:04,230 --> 00:20:06,540
But the opportunity there's just
in the Swan Lake corridor with the

572
00:20:06,600 --> 00:20:07,969
new sewer to come.

573
00:20:07,969 --> 00:20:08,790
Obviously, it's behind Shocker,

574
00:20:08,790 --> 00:20:11,815
like any big project behind by a
few years.

575
00:20:11,777 --> 00:20:14,544
But that corridor, getting sewer
and being our next big service

576
00:20:14,444 --> 00:20:16,450
commercial industrial corridor,
look for very solid upticks there.

577
00:20:16,450 --> 00:20:18,735
Another good, and this is my
opinion, downtown Vernon.

578
00:20:18,735 --> 00:20:22,312
It's been sitting there a little
dormant and we've had land value

579
00:20:22,312 --> 00:20:24,877
rates, land rates sitting at 75,
80, 75 to a hundred bucks,

580
00:20:24,877 --> 00:20:26,606
depending on the size of the site
for years.

581
00:20:26,606 --> 00:20:27,833
Cologne has just been exploding.

582
00:20:27,833 --> 00:20:29,286
Cologne is obviously our forecast

583
00:20:29,286 --> 00:20:32,841
in Vernon, but it's probably one
of the things if I had a big

584
00:20:32,841 --> 00:20:36,501
pocket full at the moment, I'd be
probably trying to buy as much

585
00:20:36,501 --> 00:20:39,857
commercial land, ideally with some
old building on it or what have

586
00:20:39,857 --> 00:20:42,923
you that produces income, of
course, but to get my hands on as

587
00:20:42,823 --> 00:20:44,838
much commercial downtown Vernon
land as possible.

588
00:20:44,738 --> 00:20:46,243
talking like 30th and 34th.

589
00:20:46,243 --> 00:20:46,927
Oh, phew.

590
00:20:46,927 --> 00:20:51,731
You have me stressed out when
you're like, well, so downtown

591
00:20:51,731 --> 00:20:51,997
Vernon.

592
00:20:51,997 --> 00:20:53,275
It's going to be a good one.

593
00:20:53,275 --> 00:20:54,067
That's funny.

594
00:20:53,967 --> 00:20:56,138
That's where we mentioned that.

595
00:20:56,238 --> 00:20:58,451
That's where we met.

596
00:20:58,451 --> 00:21:00,078
Yeah, yeah, it is.

597
00:21:00,078 --> 00:21:01,751
Quite a few years ago.

598
00:21:01,851 --> 00:21:03,129
Yeah, it's funny to me.

599
00:21:03,129 --> 00:21:04,576
I mean, maybe I'm just completely
wrong.

600
00:21:04,576 --> 00:21:06,506
I just thought appraisers were
more conservative and like

601
00:21:06,506 --> 00:21:11,078
pessimistic but like what you said
there which matt and i have said a

602
00:21:11,078 --> 00:21:14,982
lot in the past too is if you can
save up and you can qualify buy

603
00:21:14,982 --> 00:21:17,543
because you don't know what
government regulations are going

604
00:21:17,543 --> 00:21:21,324
to come out that are going to
restrict your borrowing power

605
00:21:21,324 --> 00:21:24,229
inflation is going to like erode
your savings like there's just so

606
00:21:24,229 --> 00:21:28,719
many factors if you can buy yeah
and you can afford to hold long

607
00:21:28,719 --> 00:21:31,037
term yeah You got to yeah, it is.

608
00:21:31,037 --> 00:21:32,974
able to float the property though.

609
00:21:32,974 --> 00:21:33,640
Yeah.

610
00:21:33,640 --> 00:21:34,472
Pay for it.

611
00:21:34,472 --> 00:21:36,402
But yeah, I agree.

612
00:21:36,302 --> 00:21:38,639
If the numbers work, they're going

613
00:21:38,639 --> 00:21:39,756
to work for you.

614
00:21:39,756 --> 00:21:42,551
I think it's a good time to Yeah.

615
00:21:42,551 --> 00:21:43,142
Pay buy.

616
00:21:43,142 --> 00:21:47,314
My take is I'm an investor as much

617
00:21:47,314 --> 00:21:49,385
as I'm an appraiser.

618
00:21:49,285 --> 00:21:52,780
My and our, by that, I mean my

619
00:21:52,880 --> 00:21:57,152
wife and then we actually are
partners on most of our staff with

620
00:21:57,152 --> 00:21:59,260
my sister and her hobby.

621
00:21:59,260 --> 00:22:00,190
So my brother-in-law, we make a

622
00:22:00,190 --> 00:22:01,220
fantastic team.

623
00:22:01,120 --> 00:22:03,052
I manage it all, but it's all

624
00:22:03,052 --> 00:22:03,267
long-term.

625
00:22:03,367 --> 00:22:05,700
And our mentality has always been

626
00:22:05,860 --> 00:22:09,258
either buy because we have the
purchasing power or LOC or

627
00:22:09,258 --> 00:22:10,320
something to dip into.

628
00:22:10,320 --> 00:22:12,025
And then work your butt off to pay

629
00:22:12,025 --> 00:22:14,124
that off and get the next one.

630
00:22:14,124 --> 00:22:16,456
For me, you know, my wife, very

631
00:22:16,456 --> 00:22:18,521
fortunate to interior health and
we'll have a nice, comfortable

632
00:22:18,521 --> 00:22:18,721
pension.

633
00:22:18,713 --> 00:22:19,860
But for me, nothing.

634
00:22:20,240 --> 00:22:22,849
And our real estate is our
retirement and the cash flow that

635
00:22:22,849 --> 00:22:29,227
it will produce once all the knock
on wood mortgages are paid off.

636
00:22:29,197 --> 00:22:31,320
And maybe some of them aren't
ever, but there's certainly enough

637
00:22:31,740 --> 00:22:33,178
cash flow at that time.

638
00:22:33,178 --> 00:22:35,323
The time to buy is always now,

639
00:22:35,323 --> 00:22:39,293
guys, in my opinion, on the
investment side and just be in it

640
00:22:39,293 --> 00:22:42,492
long term you mentioned kind of
the pessimistic thing i mean yeah

641
00:22:42,492 --> 00:22:45,084
it's again another unfortunate
misconception it's our fault as

642
00:22:45,084 --> 00:22:49,016
appraisers we've done a bad job of
marketing ourselves yeah sorry i'm

643
00:22:49,016 --> 00:22:52,106
not stereotyping no not no this is
it's a good point i came into the

644
00:22:52,106 --> 00:22:55,128
profession and kind of was you
know back then it was you know

645
00:22:55,128 --> 00:22:57,876
you're just the people in the
background just kind of quietly do

646
00:22:57,858 --> 00:22:58,879
your work and move along.

647
00:22:58,861 --> 00:23:01,043
And, you know, don't be out there.

648
00:23:01,043 --> 00:23:04,269
Don't have stickers and swag with
names on and advertise it.

649
00:23:04,269 --> 00:23:05,102
And I get it.

650
00:23:05,102 --> 00:23:05,557
Confidentiality is key.

651
00:23:05,557 --> 00:22:38,760
So it's not like we're showing up
to homes and their vehicles are

652
00:23:07,275 --> 00:23:07,982
peppered with appraisal names.

653
00:23:07,982 --> 00:23:09,419
But promoting the profession and

654
00:23:09,519 --> 00:23:11,632
what we have to offer and
promoting, you know, reality and

655
00:23:11,632 --> 00:23:12,369
optimism where it's warranted.

656
00:23:12,369 --> 00:23:13,490
That misconception, I guess, that

657
00:23:13,490 --> 00:23:15,110
appraisers just come in and we're
all just bank appraisers.

658
00:23:15,110 --> 00:23:19,177
And how many times in my career
I'd be wealthy if they were each

659
00:23:19,277 --> 00:23:22,758
worth a buck that I've heard, oh,
you know, it's a bank appraisal.

660
00:23:22,758 --> 00:23:23,459
That'll be low.

661
00:23:23,459 --> 00:23:24,820
What do you mean low?

662
00:23:24,820 --> 00:23:26,682
It is what it is.

663
00:23:26,582 --> 00:23:28,476
I don't give a shit what it's for.

664
00:23:28,576 --> 00:23:30,464
Like doing my job, the market's
the market.

665
00:23:30,464 --> 00:23:32,257
We're here to analyze it.

666
00:23:32,257 --> 00:23:34,563
We're not here to make it up we're

667
00:23:34,563 --> 00:23:37,292
not here to influence it we're
just analysts of it and obviously

668
00:23:37,292 --> 00:23:38,798
you know aside from that
especially as investors we're

669
00:23:38,798 --> 00:23:42,693
advocates and of it you know so
lately i know taylor and i have

670
00:23:42,693 --> 00:23:46,895
both had appraisals on our deals
come in low so we have to scramble

671
00:23:46,895 --> 00:23:50,443
to figure out the financing on
that if this happens a lot like

672
00:23:50,443 --> 00:23:54,401
what point is it the buyer sets
the market you know like you look

673
00:23:54,401 --> 00:23:57,209
at comparables a buyer is willing
to pay that price why is it

674
00:23:57,209 --> 00:24:01,802
pricing low i'll shut a bit of
light so one of mine just came in

675
00:24:01,802 --> 00:24:05,447
low it was just a standard you
know one bedroom apartment the

676
00:24:05,447 --> 00:24:08,860
other one was pre-construction
yeah so maybe there's a reason why

677
00:24:08,860 --> 00:24:13,518
on that but yeah like you had it
was just a pre-built single family

678
00:24:13,518 --> 00:24:16,716
like it was existing right i've
existing right i've just been

679
00:24:16,716 --> 00:24:19,247
hearing more and more about this
and i'm like it's almost like if

680
00:24:19,247 --> 00:24:22,514
there's enough that are coming in
low at what point is it just right

681
00:24:22,514 --> 00:24:25,555
that the prices are right right
well well hey it's a very standard

682
00:24:25,555 --> 00:24:28,672
thing or a common thing to have
happen once you know on the other

683
00:24:28,672 --> 00:24:32,968
side of a cooling yeah you know
we've had a cooling we've had a

684
00:24:32,968 --> 00:24:35,508
transition obviously we don't need
to beat the mortgage rate thing to

685
00:24:35,508 --> 00:24:36,632
death, but so inevitably going to
happen.

686
00:24:36,632 --> 00:24:40,904
However, probably the tough thing
for you two is you often don't get

687
00:24:40,904 --> 00:24:44,128
to see the appraisals, understand
potentially why that is, obviously

688
00:24:44,128 --> 00:24:48,334
is, you know, the comparables and
maybe the right ones were used.

689
00:24:48,334 --> 00:24:48,874
Maybe they weren't.

690
00:24:48,874 --> 00:24:50,758
We certainly hope they were.

691
00:24:50,758 --> 00:24:52,889
Whether there was a adjustment
downward for time and changes in

692
00:24:52,889 --> 00:24:53,362
marketing conditions.

693
00:24:53,362 --> 00:24:54,665
If it's a certain property type,

694
00:24:54,665 --> 00:24:57,606
that's an apartment, sounds like
there should be lots of data and

695
00:24:57,506 --> 00:24:58,457
relative number of comps around.

696
00:24:58,457 --> 00:24:59,521
But if it's a property type where

697
00:24:59,521 --> 00:25:02,329
there just hasn't been many sales
of it recently, and we got to use

698
00:25:02,429 --> 00:25:04,828
a sale from six or eight months
ago, and there's an adjustment

699
00:25:04,827 --> 00:25:08,030
downwards there, whereas you,
Matt, say to your buyers or your

700
00:25:08,030 --> 00:25:12,679
sellers, well, here's the comp
boom and then so okay that's sold

701
00:25:12,679 --> 00:25:17,041
for eight so ours should be eight
cars very similar and doesn't take

702
00:25:17,041 --> 00:25:19,269
into account our softening and
what's happened in buyer sentiment

703
00:25:19,269 --> 00:25:21,578
into it but that's always a really
tough one because often there just

704
00:25:21,578 --> 00:25:23,892
isn't evidence yet to support
upward or downward as a listing

705
00:25:23,892 --> 00:25:27,128
agent i get a low appraisal yeah
the buyer so they come to me and

706
00:25:27,128 --> 00:25:30,181
say we need to lower your price or
walking away or whatever that

707
00:25:30,181 --> 00:25:32,926
happens what do i do do i go to
mortgage broker like taylor and

708
00:25:32,926 --> 00:25:35,466
say listen the appraisal isn't
right like because my case i had i

709
00:25:35,466 --> 00:25:39,065
think three other offers that were
all higher that just didn't come

710
00:25:39,065 --> 00:25:41,736
together sure for whatever reason
but they were like i could i guess

711
00:25:41,736 --> 00:25:44,624
present those to the mortgage
broker and hope that they go to

712
00:25:44,624 --> 00:25:46,484
bat for this or like i have
noticed too that it's been one

713
00:25:46,474 --> 00:25:48,040
company that has been lower
appraising everything in my

714
00:25:48,040 --> 00:25:50,020
experience anyway like can i tell
the lender that listen i don't

715
00:25:50,020 --> 00:25:52,591
want that appraising company to do
the praise or you have any say on

716
00:25:52,591 --> 00:25:57,612
this at all or is it just the bank
that this sure you do and to me if

717
00:25:57,612 --> 00:26:00,620
that's going to happen you should
be able to see the report and or

718
00:26:00,620 --> 00:26:02,700
just better understand the
reasoning for that.

719
00:26:02,700 --> 00:26:06,423
It shouldn't just be like, nope,
came along, didn't get approved.

720
00:26:06,422 --> 00:26:08,227
Like, well, let's educate
everyone.

721
00:26:08,128 --> 00:26:08,747
everyone.

722
00:26:08,747 --> 00:26:10,220
Also, I'm not entirely trusting

723
00:26:10,220 --> 00:26:10,840
the buyer agent.

724
00:26:10,840 --> 00:26:12,041
Well, because the appraisal report

725
00:26:12,041 --> 00:26:14,578
is property of the lender.

726
00:26:14,578 --> 00:26:14,845
Yeah.

727
00:26:14,945 --> 00:26:19,154
So even though the client pays for
it, and this is a tough one to

728
00:26:19,054 --> 00:26:20,770
communicate, the client pays for
it.

729
00:26:20,770 --> 00:26:22,836
The appraisal goes to the lender.

730
00:26:22,836 --> 00:26:24,884
Technically, we can't share that

731
00:26:24,884 --> 00:26:25,419
with anyone.

732
00:26:25,419 --> 00:26:26,458
It's the lenders.

733
00:26:26,358 --> 00:26:26,444
Yeah.

734
00:26:26,444 --> 00:26:27,853
So it's not like they can come

735
00:26:27,853 --> 00:26:31,277
back to you, the listing agent,
and say, hey, here's the report.

736
00:26:31,277 --> 00:26:31,667
Yeah.

737
00:26:31,667 --> 00:26:32,121
So course.

738
00:26:32,221 --> 00:26:33,940
And we deal with that on the
daily.

739
00:26:33,940 --> 00:26:37,180
Why is it Why is it like that?
Like Taylor said, it really just

740
00:26:37,180 --> 00:26:38,362
has to do with who owns that
report.

741
00:26:38,362 --> 00:26:43,130
It's such a funny kind of bit of a
conundrum to be in because you

742
00:26:43,130 --> 00:26:44,525
could have three different parties
involved.

743
00:26:44,525 --> 00:26:46,638
One person that's ordered it, one
person that's paying, and one

744
00:26:46,638 --> 00:26:48,742
person whose name's at the top and
is relying on it.

745
00:26:48,742 --> 00:26:54,472
And only the name on the top, that
lender, gets the copy and gets to

746
00:26:54,472 --> 00:26:55,160
own that copy.

747
00:26:55,160 --> 00:26:57,074
They can choose to obviously give

748
00:26:57,074 --> 00:26:59,484
it to folks if they want.

749
00:26:59,484 --> 00:27:02,092
But we get that all the time.

750
00:27:02,092 --> 00:27:03,121
Hey, I paid for it.

751
00:27:03,121 --> 00:27:04,332
Why can't I get this?

752
00:27:04,332 --> 00:27:06,022
it. Why can't I get this?
Don't think most, you know,

753
00:27:06,016 --> 00:27:07,519
lenders and conventionals sitting
at the top really care.

754
00:27:07,519 --> 00:27:09,066
For us, Taylor Atkinson phoned up
and orders a report.

755
00:27:09,066 --> 00:27:10,097
We're loyal to him.

756
00:27:10,097 --> 00:27:11,528
That's his, at some point, it's

757
00:27:11,528 --> 00:27:14,421
not necessarily fair for a buyer
or an applicant to just get their

758
00:27:14,421 --> 00:27:17,660
hands on that and just go shop it
around after Taylor's done hours

759
00:27:17,660 --> 00:27:19,074
and hours and hours of work.

760
00:27:19,074 --> 00:27:19,276
Yeah.

761
00:27:19,276 --> 00:27:20,236
And I don't know either.

762
00:27:20,236 --> 00:27:22,294
It is kind of a weird one, but

763
00:27:22,294 --> 00:27:25,420
potentially it is, it gets sent to
the lender because the lender

764
00:27:25,420 --> 00:27:27,746
knows that there's skin in the
game from the purchaser and

765
00:27:27,746 --> 00:27:31,057
they're not going to then go to
the next lender and the next

766
00:27:31,057 --> 00:27:33,655
lender and the next lender, right?
You don't want to waste the

767
00:27:33,655 --> 00:27:34,089
lender's time.

768
00:27:34,089 --> 00:27:35,394
So if it gets sent to them, it's

769
00:27:35,394 --> 00:27:37,188
like, all right, we are committing
to fund this file.

770
00:27:37,188 --> 00:27:37,351
Yes.

771
00:27:37,351 --> 00:27:39,000
But if you just have a report and

772
00:27:39,000 --> 00:27:42,867
you're like, I'm just going to
take it from bank to bank and see

773
00:27:42,867 --> 00:27:45,180
if I can manipulate somebody.

774
00:27:45,280 --> 00:27:45,355
Yeah.

775
00:27:45,355 --> 00:27:47,986
So I think once you get to that
stage, there's a commitment and

776
00:27:47,886 --> 00:27:53,248
the next As a buyer's agent, say
I'm going to write an offer on a

777
00:27:53,248 --> 00:27:56,672
property and the listing agent
says, just so you know, there's

778
00:27:56,672 --> 00:27:57,748
three offers on this property.

779
00:27:57,732 --> 00:27:58,700
As a buyer agent, I'm like, you're

780
00:27:58,700 --> 00:27:59,622
just lying to me.

781
00:27:59,622 --> 00:28:00,222
Don't believe you.

782
00:28:00,222 --> 00:28:02,734
I can't expect that listing agent
to send me the offers.

783
00:28:02,734 --> 00:28:05,193
But if I really am curious, I can
call their brokerage.

784
00:28:05,180 --> 00:28:06,600
I can figure out if there are
other offers.

785
00:28:06,487 --> 00:27:56,560
I can't figure out the
information, but I can prove it.

786
00:27:56,580 --> 00:28:11,384
I was in a situation where I just
had to take this person's word for

787
00:28:11,384 --> 00:28:11,507
it.

788
00:28:11,507 --> 00:28:13,201
The appraiser came in low because

789
00:28:13,101 --> 00:28:14,511
they were asking us for money off.

790
00:28:14,511 --> 00:28:16,165
And I just, it was frustrating

791
00:28:16,165 --> 00:28:17,540
because I was like, what's the
recourse here?

792
00:28:17,540 --> 00:28:22,264
How do I explain this to my seller
that the appraisal is low?

793
00:28:22,164 --> 00:28:24,661
Even though we've had three other
offers that are higher, it just

794
00:28:24,661 --> 00:28:25,556
doesn't make any sense.

795
00:28:25,556 --> 00:28:26,640
And I was like, well, why don't

796
00:28:26,680 --> 00:28:28,742
you just get another appraisal?
I'm like, the bank won't allow it.

797
00:28:28,742 --> 00:28:31,470
There was no real recourse besides
take I can't as a broker, it

798
00:28:31,470 --> 00:28:33,908
depends on the lender, but you can
see the appraisal before it's

799
00:28:33,908 --> 00:28:34,075
sent.

800
00:28:34,075 --> 00:28:35,780
So you could stop it and reorder

801
00:28:35,780 --> 00:28:35,780
it somewhere else or appeal it.

802
00:28:35,780 --> 00:28:38,282
Like most of the time, again, it's

803
00:28:38,382 --> 00:28:38,875
arm's length.

804
00:28:38,975 --> 00:28:41,842
Like they don't want it to be

805
00:28:41,842 --> 00:28:42,064
biased.

806
00:28:42,064 --> 00:28:44,951
It just goes directly to the

807
00:28:44,951 --> 00:28:45,434
lender.

808
00:28:45,434 --> 00:28:47,225
You don't see it until after.

809
00:28:47,225 --> 00:28:51,210
So if that was the case, there's
not really much you can do it.

810
00:28:51,210 --> 00:28:53,294
It does vary from lender to
lender, whether they allow a

811
00:28:53,294 --> 00:28:53,601
second opinion.

812
00:28:53,601 --> 00:28:54,675
We do that all the time.

813
00:28:54,675 --> 00:28:57,619
I'm sure there's been the odd
second opinion of after hours in

814
00:28:57,519 --> 00:28:58,848
the past, but you're right.

815
00:28:58,748 --> 00:29:00,076
Often once a lender sees that and

816
00:28:59,976 --> 00:29:01,173
goes, oh, that's it.

817
00:29:01,073 --> 00:29:02,271
We do reliance letters all the

818
00:29:02,271 --> 00:29:04,810
time to Taylor's point about them
not letting the reports bounce

819
00:29:04,810 --> 00:29:05,021
around.

820
00:29:05,021 --> 00:29:06,606
They can only be addressed and

821
00:29:06,606 --> 00:29:07,980
relied upon, utilized by one
lender at a time.

822
00:29:07,980 --> 00:29:09,887
So we'll often get that, hey, can
you release this to another

823
00:29:09,861 --> 00:29:11,262
lender?
Yes, we can, if we get permission

824
00:29:11,262 --> 00:29:12,534
from the first lender to release
it.

825
00:29:12,634 --> 00:29:15,723
But in your circumstance, Matt, I
mean, if someone is going to come

826
00:29:15,723 --> 00:29:17,913
along and say, hey, president,
come in, we want money off in the

827
00:29:17,913 --> 00:29:19,599
middle of a transaction, that
should be better backed up, in my

828
00:29:19,599 --> 00:29:19,812
opinion.

829
00:29:19,812 --> 00:29:22,415
You should be able to see some

830
00:29:22,382 --> 00:29:08,687
reasoning for I feel like we
should at least get some

831
00:29:08,687 --> 00:29:24,442
information from somebody.

832
00:29:24,438 --> 00:29:25,638
I can that like, because otherwise

833
00:29:25,638 --> 00:29:28,020
we just started taking the word
for You know what's funny with the

834
00:29:27,971 --> 00:29:29,026
appraisal?
It's like as a buyer, you're

835
00:29:29,026 --> 00:29:29,301
buying something.

836
00:29:29,352 --> 00:29:30,232
You're like, man, I hope the

837
00:29:30,232 --> 00:29:31,143
appraisal comes in.

838
00:29:31,143 --> 00:29:32,914
And if it's low, you're almost

839
00:29:32,814 --> 00:29:32,878
upset.

840
00:29:32,878 --> 00:29:34,999
You're like, you no, need to have

841
00:29:34,999 --> 00:29:35,320
an appraisal.

842
00:29:35,420 --> 00:29:37,237
Like in this, I'll come up with

843
00:29:37,137 --> 00:29:38,679
the extra money or whatever.

844
00:29:38,579 --> 00:29:39,832
It's like you should almost take

845
00:29:39,832 --> 00:29:40,020
that.

846
00:29:40,020 --> 00:29:41,589
What it is, is like the insurance

847
00:29:41,689 --> 00:29:43,368
and be like, oh, this may not be a
good purchase.

848
00:29:43,368 --> 00:29:44,947
Like maybe I should walk away from
this.

849
00:29:44,947 --> 00:29:46,096
walk away from this.

850
00:29:46,196 --> 00:29:47,972
It comes right back to our wish

851
00:29:47,972 --> 00:29:49,983
that they were done sooner, you
know, because then you know how

852
00:29:49,983 --> 00:29:51,751
the both of you, how the emotional
attachment is.

853
00:29:51,751 --> 00:29:52,951
And that is a peak point.

854
00:29:52,951 --> 00:29:54,267
We come in at a peak point.

855
00:29:54,267 --> 00:29:56,727
And if we say anything other than
what they're thought, it can be an

856
00:29:56,727 --> 00:29:57,210
emotional reaction.

857
00:29:57,210 --> 00:29:57,963
However, if appraisals, you know,

858
00:29:57,957 --> 00:29:59,999
were done earlier in the process
or more upfront, everyone figures

859
00:29:59,999 --> 00:30:01,034
out their stuff a little sooner.

860
00:30:01,134 --> 00:30:01,773
That's a dreamland for me.

861
00:30:01,739 --> 00:30:02,360
I know.

862
00:30:02,360 --> 00:30:04,451
You guys live a tough market.

863
00:30:04,351 --> 00:30:07,248
Hey, like if it doesn't reach to
what it should be, people are

864
00:30:07,248 --> 00:30:07,458
upset.

865
00:30:07,558 --> 00:30:08,562
It appraises for where it should

866
00:30:08,562 --> 00:30:08,720
be.

867
00:30:08,720 --> 00:30:10,431
And then the market comes down.

868
00:30:10,531 --> 00:30:11,059
People are upset.

869
00:30:11,059 --> 00:30:12,984
Like there's not really a lot of

870
00:30:12,884 --> 00:30:13,340
win-wins unless.

871
00:30:13,340 --> 00:30:14,760
best and most effective folks to

872
00:30:14,660 --> 00:30:17,240
work with are the seasoned ones
that have been through that and

873
00:30:17,240 --> 00:30:20,256
just keep emotions capped and i
get it that's impossible for you

874
00:30:20,256 --> 00:30:22,040
know primary residents homebuyers
sellers i understand that i that's

875
00:30:22,040 --> 00:30:24,927
why you're more on the commercial
side as well right like it's a

876
00:30:24,927 --> 00:30:27,500
little bit more mathematic less
emotion it's like hey oh it's it's

877
00:30:27,500 --> 00:30:30,268
hey oh it's it's dramatically
different and we do both our firm

878
00:30:30,268 --> 00:30:32,718
does both personally spend most of
my hours in the commercial world

879
00:30:32,718 --> 00:30:36,031
and that means you know anything
from industrial ag or multi-family

880
00:30:36,031 --> 00:30:39,893
or you know some new low-income
housing project or what have you

881
00:30:39,893 --> 00:30:43,715
but then the other side of my firm
does the residential it is it's

882
00:30:43,715 --> 00:30:45,435
dramatically different but we
really enjoy both because the

883
00:30:45,435 --> 00:30:46,931
different paces balance each other
out well.

884
00:30:46,931 --> 00:30:50,694
In my opinion, you have to have a
pulse on both sides to be

885
00:30:50,794 --> 00:30:51,680
well-rounded.

886
00:30:51,680 --> 00:30:53,079
Some folks only do residential and

887
00:30:53,079 --> 00:30:56,075
they're kind of buried in that and
some only do commercial.

888
00:30:55,975 --> 00:30:58,604
But I think there's a dramatic
benefit to considering a grader in

889
00:30:58,604 --> 00:30:59,082
any marketplace.

890
00:30:59,082 --> 00:31:00,065
And you guys are fantastic.

891
00:31:00,165 --> 00:31:02,035
I've used you a few times
personally and for clients.

892
00:31:02,035 --> 00:31:02,633
Thank you.

893
00:31:02,633 --> 00:31:03,854
There's a specific niche, like you

894
00:31:03,854 --> 00:31:06,881
have to be approved by a certain
amount of lenders.

895
00:31:06,781 --> 00:31:09,583
But when I'm purchasing like a
very unique property, maybe it has

896
00:31:09,520 --> 00:31:11,713
a certain type of income it's on
lease land or whatever.

897
00:31:11,613 --> 00:31:14,064
Like there's only a few people
that can go and actually approach

898
00:31:14,037 --> 00:31:14,375
it correctly.

899
00:31:14,375 --> 00:31:16,660
So I think it is important for

900
00:31:16,748 --> 00:31:17,680
buyers to know, like, you're not
all the same.

901
00:31:17,780 --> 00:31:19,086
You're not just going to tick the
boxes.

902
00:31:19,086 --> 00:31:21,804
Like you have to find the right
person for the right property.

903
00:31:21,804 --> 00:31:22,516
For sure.

904
00:31:22,516 --> 00:31:22,644
Yeah.

905
00:31:22,744 --> 00:31:23,221
And For sure.

906
00:31:23,221 --> 00:31:23,413
Yeah.

907
00:31:23,413 --> 00:31:25,078
And expertise and experience and
certain things.

908
00:31:25,078 --> 00:31:28,024
And I think I might know, you
know, one of the ones you're

909
00:31:28,024 --> 00:31:29,480
talking about and the income
approach becomes a very important

910
00:31:29,480 --> 00:31:30,260
approach to the lender.

911
00:31:30,260 --> 00:31:31,740
Really, you know, potentially the

912
00:31:31,640 --> 00:31:33,200
only one they really care about.

913
00:31:33,200 --> 00:31:34,530
They're just flipping right to

914
00:31:34,430 --> 00:31:36,792
that page where it's okay.

915
00:31:36,692 --> 00:31:37,500
What does this unbiased

916
00:31:37,500 --> 00:31:39,937
professional think that this
property will produce in a year?

917
00:31:39,837 --> 00:31:41,054
What are we talking for occupancy
rates?

918
00:31:41,054 --> 00:31:44,791
What are they seeing for expenses
and produce a net income that's

919
00:31:44,691 --> 00:31:47,739
not just a spreadsheet or a piece
of paper from a property manager

920
00:31:47,839 --> 00:31:49,206
or what have Yeah.

921
00:31:49,206 --> 00:31:51,479
And one other thing that you said

922
00:31:51,477 --> 00:31:54,780
a little while back that resonated
with me, I'm thinking like I still

923
00:31:54,680 --> 00:31:57,210
have my tax hat on because we just
had Nicole Watson, my accountant

924
00:31:57,210 --> 00:31:57,540
on.

925
00:31:57,720 --> 00:31:57,824
Sure.

926
00:31:57,824 --> 00:31:59,935
You said, you know, like you guys
will qualify, you'll buy

927
00:31:59,935 --> 00:32:00,700
properties as your partnership.

928
00:32:00,700 --> 00:32:02,424
You have, you'll take a loan,

929
00:32:02,424 --> 00:32:07,395
you'll leverage, maybe you lose
some money to begin with or

930
00:32:07,395 --> 00:32:08,249
whatever for the CapEx.

931
00:32:08,249 --> 00:32:10,382
And then you just work your butt

932
00:32:10,382 --> 00:32:12,246
off and try and pay it off.

933
00:32:12,246 --> 00:32:14,434
And, you know, it's always kind of

934
00:32:14,434 --> 00:32:17,540
been the motto of real estate
investors.

935
00:32:17,540 --> 00:32:18,956
Like don't buy property that
doesn't cashflow.

936
00:32:18,951 --> 00:32:21,140
Like it's just this, you know,
myth that basically you buy and

937
00:32:21,140 --> 00:32:24,784
you're wealthy right after, but it
only resonated with me because

938
00:32:24,784 --> 00:32:27,507
like we were talking about the
cost of CPP and expenses for being

939
00:32:27,507 --> 00:32:27,756
full-time.

940
00:32:27,756 --> 00:32:29,555
Like people do not care about

941
00:32:29,555 --> 00:32:32,085
working a full-time job and then
throwing money away on tax.

942
00:32:32,085 --> 00:32:35,351
But as a real estate investor,
people are like, I cannot lose

943
00:32:35,351 --> 00:32:36,101
money initially.

944
00:32:36,101 --> 00:32:37,485
Like it has to cashflow.

945
00:32:37,485 --> 00:32:40,313
It's kind of like, okay, would you
rather be a full-time employee and

946
00:32:40,313 --> 00:32:44,594
throw money away on CPP that you
hope when you're 65 or 70, you

947
00:32:44,594 --> 00:32:48,114
start making money off of it?
Or would you like to kind of

948
00:32:48,114 --> 00:32:50,780
control that asset now?
And yeah, maybe like people are

949
00:32:51,040 --> 00:32:52,868
paying 400 bucks a month in CPP.

950
00:32:52,868 --> 00:32:54,137
You okay doing that for the next

951
00:32:54,137 --> 00:32:57,428
five years on real estate to hope
that that's now your retirement

952
00:32:57,428 --> 00:33:00,521
egg?
Or do you want to just leave it in

953
00:33:00,495 --> 00:33:02,191
the Canadian pension plan?
Isn't it it it funny?

954
00:33:02,191 --> 00:33:05,117
So the relative things, some of
the justifications don't see your

955
00:33:05,017 --> 00:33:05,365
bang on.

956
00:33:05,365 --> 00:33:06,263
Like I have numerous examples.

957
00:33:06,263 --> 00:33:09,316
I'm looking at a spreadsheet right
now just in case something like

958
00:33:09,316 --> 00:33:11,094
this, you know, came up.

959
00:33:11,094 --> 00:33:12,250
The cashflow thing, of course,

960
00:33:12,250 --> 00:33:12,901
it's important.

961
00:33:12,901 --> 00:33:13,616
I get it.

962
00:33:13,616 --> 00:33:16,414
Not everyone just has a few
thousand lying around for that

963
00:33:16,414 --> 00:33:17,872
year to put into it.

964
00:33:17,972 --> 00:33:19,097
But it's also my thought,

965
00:33:19,097 --> 00:33:21,423
especially when rates are
relatively high now that you're

966
00:33:21,423 --> 00:33:24,101
not ready to necessarily buy it
until you have an extra $10,000 in

967
00:33:24,001 --> 00:33:26,191
your account or somewhere where
you can get that to beyond your

968
00:33:26,191 --> 00:33:28,117
down payment to flow that.

969
00:33:27,140 --> 00:33:28,850
Like, so what that doesn't cash

970
00:33:28,850 --> 00:33:32,575
flow i'm looking at one right now
where net cash flow is minus 10

971
00:33:32,575 --> 00:33:36,228
grand based on a bunch of
variables i'm putting in like

972
00:33:36,228 --> 00:33:39,074
annually yeah annually ten
thousand dollars that you have

973
00:33:39,074 --> 00:33:42,622
you'd have to make up to cover
that mortgage you know going into

974
00:33:42,622 --> 00:33:46,136
principle fellas like you know
it's not gone yes you have to have

975
00:33:46,136 --> 00:33:50,611
it you have to get it from
somewhere it has to go into the

976
00:33:50,611 --> 00:33:52,442
account understand that but that.

977
00:33:52,442 --> 00:33:55,118
But you can also save up a little

978
00:33:55,118 --> 00:33:56,363
longer, increase your down
payment.

979
00:33:56,363 --> 00:34:00,020
I can literally put in a number
and it'll show, okay, that's the

980
00:34:00,020 --> 00:34:00,538
down payment.

981
00:34:00,538 --> 00:34:02,956
They need to have a zero cash flow

982
00:34:02,956 --> 00:34:04,050
or at least $1 positive.

983
00:34:04,050 --> 00:34:05,834
And people lose sight of that in

984
00:34:05,834 --> 00:34:06,336
the greater picture.

985
00:34:06,336 --> 00:34:07,690
Like, yes, you have to look at the

986
00:34:07,690 --> 00:34:10,489
opportunity loss of that 10 000
what you could have made on the

987
00:34:10,489 --> 00:34:13,927
theory otherwise but in terms of
what real estate can produce long

988
00:34:14,027 --> 00:34:16,672
term sorry it like crushes any
long-term other investment that

989
00:34:16,672 --> 00:34:19,205
i've ever seen those when you go
into leverage you have to leverage

990
00:34:19,205 --> 00:34:22,148
it guys in order to get this roi
that is true and makes sense and

991
00:34:22,047 --> 00:34:24,429
get it to be beyond what just a
cap rate is.

992
00:34:24,429 --> 00:34:28,299
I think it is my daily life to
talk about cap rates and

993
00:34:28,299 --> 00:34:30,494
commercial rates, return,
multifamily, all that kind of

994
00:34:30,494 --> 00:34:30,697
thing.

995
00:34:30,697 --> 00:34:31,987
And okay, they're 5%.

996
00:34:31,987 --> 00:34:35,512
That's 5% is if you're just buying
the thing outright and you're not

997
00:34:35,512 --> 00:34:36,922
leveraging, you have to leverage.

998
00:34:36,922 --> 00:34:38,400
If you leverage, we're just

999
00:34:38,501 --> 00:34:41,723
talking about your return on your
initial down payment and equity,

1000
00:34:41,723 --> 00:34:44,188
PTT amount, of amount of course
closing costs they add in there

1001
00:34:44,188 --> 00:34:47,426
but you know if you're leveraging
75 in other words you're throwing

1002
00:34:47,326 --> 00:34:50,136
25 down or 30 down ish it's kind
of a nice magic number we're

1003
00:34:50,136 --> 00:34:53,036
talking 15 to 22 returns yeah so
go what you've kind of seen in

1004
00:34:53,036 --> 00:34:56,440
your portfolio over the last 10
years or so with your but i your

1005
00:34:56,440 --> 00:35:00,138
but i have to scale that back
because i don't believe that every

1006
00:35:00,038 --> 00:35:03,615
next 10 years sure yeah we're
going to be the same growth that

1007
00:35:03,615 --> 00:35:05,600
we saw yeah but that's but that's
including like appreciation cash

1008
00:35:05,599 --> 00:35:07,843
flow principal pay down of course
you have to include appreciation

1009
00:35:07,843 --> 00:35:10,051
north okinawa again appreciation
over the last 36 has been 7.2% a

1010
00:35:10,051 --> 00:35:10,329
year.

1011
00:35:10,329 --> 00:35:10,718
Central, 7.4.

1012
00:34:32,938 --> 00:35:12,384
36 36 7.4 over the last 36 years.

1013
00:35:12,384 --> 00:35:13,440
That is amazing.

1014
00:35:13,440 --> 00:35:14,468
That's just appreciation.

1015
00:35:14,468 --> 00:35:15,411
That's averaged out.

1016
00:35:15,411 --> 00:35:19,995
Obviously, we had some recent
years here where we saw like 30s,

1017
00:35:19,995 --> 00:35:20,282
40%.

1018
00:35:20,282 --> 00:35:22,675
But, you know, Matt, you pull up

1019
00:35:22,575 --> 00:35:25,826
those stats, sit and run on a
matrix, you know, whatever it's

1020
00:35:25,826 --> 00:35:26,749
called there now.

1021
00:35:26,749 --> 00:35:28,384
And we've got 1987 average home

1022
00:35:28,384 --> 00:35:32,182
value and clone of, I looked last
night, I think it was like 81,000.

1023
00:35:32,082 --> 00:35:35,280
Can we expect that kind of
exponential growth?

1024
00:35:35,280 --> 00:35:39,576
No, but I mean, even if we tone
that down, so saying we prove in

1025
00:35:39,576 --> 00:35:42,784
the last 36 that it's been 7.4 in
central Okanagan, even if we use

1026
00:35:42,784 --> 00:35:45,200
4%, I got 4% pinched into my thing
here.

1027
00:35:45,200 --> 00:35:46,404
You could use three.

1028
00:35:46,404 --> 00:35:48,179
You have a 4% of a $950,000

1029
00:35:48,179 --> 00:35:48,369
purchase.

1030
00:35:48,369 --> 00:35:49,763
We're just talking about kind of

1031
00:35:49,763 --> 00:35:50,573
the most basic residential
investment.

1032
00:35:50,573 --> 00:35:52,731
It's that single family with the
good suite.

1033
00:35:52,731 --> 00:35:53,655
That's the beauty.

1034
00:35:53,655 --> 00:35:54,934
It's the most clean.

1035
00:35:54,934 --> 00:35:56,552
So we're talking about 5,000 bucks
in rent a month.

1036
00:35:56,552 --> 00:35:59,737
And we've seen operating expense
ratios in the 25% less on some of

1037
00:35:59,737 --> 00:36:00,369
our new stuff.

1038
00:36:00,369 --> 00:36:01,570
But you have to think about

1039
00:36:01,570 --> 00:36:01,696
appliances.

1040
00:36:01,696 --> 00:36:03,178
You got to think about roof

1041
00:36:03,178 --> 00:36:03,323
long-term.

1042
00:36:03,323 --> 00:36:05,715
So you use about a 30% expense

1043
00:36:05,815 --> 00:36:06,178
ratio.

1044
00:36:06,077 --> 00:36:07,528
Once all the numbers come out and

1045
00:36:07,528 --> 00:36:11,159
you allow 4% appreciation, even
at, you tell me, Taylor, I've

1046
00:36:11,159 --> 00:36:13,357
punched in here at a five and a
quarter mortgage rate.

1047
00:36:13,457 --> 00:36:15,430
Am I low?
I mean, that's high for what we've

1048
00:36:15,430 --> 00:36:15,725
seen historically.

1049
00:36:15,725 --> 00:36:18,233
Of course, but I mean, for now.

1050
00:36:18,233 --> 00:36:19,045
Yeah, that's comfortable, yeah.

1051
00:36:19,045 --> 00:36:22,354
So the point is, even now, I hear

1052
00:36:22,354 --> 00:36:25,517
all these things and I listen to
tidbits of folks on your show you

1053
00:36:25,517 --> 00:36:28,370
it's tough and and, I know, get I
listen to tidbits cashflow.

1054
00:36:28,370 --> 00:36:33,848
of folks Yep, on your show and now
it's tough and cash flow yep I get

1055
00:36:33,848 --> 00:36:37,575
it you're not putting money in
your bank right now you're just

1056
00:36:37,575 --> 00:36:40,089
not however even considering that
negative cash flow I'm showing a

1057
00:36:40,089 --> 00:36:43,926
16.5% return on a purchase that I
know exists out there that you can

1058
00:36:43,926 --> 00:36:47,460
make $5,000 a month on and at a
five and a quarter mortgage rate

1059
00:36:47,460 --> 00:36:50,198
with 25% down yeah That So proofs
there.

1060
00:36:50,098 --> 00:36:52,706
That 7% ish over the last 36 years
actually aligns really well.

1061
00:36:52,706 --> 00:36:54,989
We had the BC chief economist on
for our BCREA.

1062
00:36:54,989 --> 00:36:58,933
I think it was 76 or 79% was the
appreciation over the next 10

1063
00:36:58,933 --> 00:36:59,209
years.

1064
00:36:59,209 --> 00:37:00,764
Like, so that aligns really well

1065
00:37:00,764 --> 00:37:02,780
with the last 36 years.

1066
00:37:02,680 --> 00:37:04,667
It's kind of like, we're just

1067
00:37:04,667 --> 00:37:05,163
continuing on.

1068
00:37:05,163 --> 00:37:05,660
Until 2030.

1069
00:37:05,660 --> 00:37:06,163
Until 2030.

1070
00:37:06,163 --> 00:37:06,666
Is it?

1071
00:37:06,666 --> 00:37:08,175
just continuing on.

1072
00:37:08,175 --> 00:37:10,522
So it's just continuing on that

1073
00:37:10,522 --> 00:37:10,858
trend.

1074
00:37:10,858 --> 00:37:11,780
It's funny, the cashflow

1075
00:37:11,780 --> 00:37:12,118
conversation.

1076
00:37:12,118 --> 00:37:13,975
I had this with a client.

1077
00:37:13,975 --> 00:37:17,436
They're talking about keeping as a
rental and buying a primary

1078
00:37:17,436 --> 00:37:19,834
residence or selling and how they
should structure it.

1079
00:37:19,834 --> 00:37:20,953
And we're talking about capital
gains, whatever.

1080
00:37:20,953 --> 00:37:22,880
And I was like, so I did my
analysis on my own spreadsheet

1081
00:37:22,880 --> 00:37:24,548
that I share with clients.

1082
00:37:24,548 --> 00:37:26,780
I'm like, you know, if you were to

1083
00:37:26,780 --> 00:37:29,205
keep this property and then buy
another one, this would lose you

1084
00:37:28,645 --> 00:37:30,760
about 500 bucks a month.

1085
00:37:30,760 --> 00:37:33,547
So are you comfortable doing that?

1086
00:37:33,547 --> 00:37:35,251
And they were like, yeah,
absolutely.

1087
00:37:35,251 --> 00:37:39,908
You know, like it's a write off.

1088
00:37:39,908 --> 00:37:41,669
It's like, well, not really.

1089
00:37:41,669 --> 00:37:45,811
You can't write off the principle
that you're paying into that.

1090
00:37:45,811 --> 00:37:50,509
So it's like actually like from a
tax point of view, like it is

1091
00:37:50,509 --> 00:37:50,691
profitable.

1092
00:37:50,691 --> 00:37:52,269
And I'm not like trying to

1093
00:37:52,269 --> 00:37:54,311
encourage people to go buy
something that cash flows

1094
00:37:54,211 --> 00:37:54,393
negatively.

1095
00:37:54,393 --> 00:37:55,788
But from CRA, that property is

1096
00:37:55,788 --> 00:37:58,457
making money because you're paying
down your principal, which is just

1097
00:37:58,457 --> 00:38:00,176
going into your bank account.

1098
00:38:00,176 --> 00:38:02,466
just So it's like That's exactly

1099
00:38:02,366 --> 00:38:02,447
it.

1100
00:38:02,447 --> 00:38:04,393
The CRA, the annual statements are

1101
00:38:04,393 --> 00:38:07,002
different than the reality because
you can't throw principal in

1102
00:38:07,002 --> 00:38:07,642
there.

1103
00:38:07,642 --> 00:38:08,981
And you mentioned like $500 a

1104
00:38:08,981 --> 00:38:09,097
month.

1105
00:38:09,097 --> 00:38:10,436
It's not a loss.'s a savings

1106
00:38:10,436 --> 00:38:13,311
you're just parking it into real
property yeah a savings you're

1107
00:38:13,311 --> 00:38:17,997
except us to get like two times a
return that's what i was talking

1108
00:38:17,997 --> 00:38:20,842
about with cpp it's like people
are okay to spend x amount of

1109
00:38:20,842 --> 00:38:25,740
dollars well i mean you have to
but you can't do it cash flow wise

1110
00:38:25,960 --> 00:38:28,792
for a property which technically
by taxes it's making money anyways

1111
00:38:28,892 --> 00:38:32,786
yeah that could talk yeah could
talk yeah finally comment on you

1112
00:38:32,786 --> 00:38:37,716
know cash flows it just makes it
harder to buy more right because

1113
00:38:37,716 --> 00:38:40,285
like kind of for sure you're it
terms of yeah qualifying and just

1114
00:38:40,285 --> 00:38:44,280
being able to you can't take five
hundred dollar loss on this one

1115
00:38:44,280 --> 00:38:47,964
and buy another one for another
five hundred dollar loss and buy

1116
00:38:47,964 --> 00:38:50,912
another one for another five like
there's a limit for sure

1117
00:38:51,012 --> 00:38:54,106
understood your term in the short
term if i punch in what they were

1118
00:38:54,106 --> 00:38:56,923
a couple years ago uh to get you
know.7% or 2.5% mortgage rates,

1119
00:38:56,923 --> 00:38:59,711
then it's going to literally flip
the other way where it's $10,000.

1120
00:38:59,611 --> 00:39:02,038
But it's not like those inputs to
make the mortgage payments are

1121
00:39:02,038 --> 00:39:02,440
lost.

1122
00:39:02,440 --> 00:39:02,652
Exactly.

1123
00:39:02,652 --> 00:39:05,098
I mean, yes, in a way to a lender
to qualify, that's like their

1124
00:39:05,080 --> 00:39:05,240
loss.

1125
00:39:05,100 --> 00:39:05,153
It's going out.

1126
00:39:05,113 --> 00:39:05,186
I get it.

1127
00:39:05,142 --> 00:39:05,240
But it all comes back to just

1128
00:39:05,207 --> 00:39:06,575
working your butt off between
purchases to build up for that

1129
00:39:06,575 --> 00:39:06,854
next one.

1130
00:39:06,854 --> 00:39:08,578
I'm not a big believer myself, and

1131
00:39:08,578 --> 00:39:12,131
this is big debate and I get it.

1132
00:39:12,131 --> 00:39:14,478
I obviously understand that you

1133
00:39:14,478 --> 00:39:16,417
get further and farther.

1134
00:39:16,417 --> 00:39:18,148
I'm not a big believer in

1135
00:39:18,148 --> 00:39:18,755
leveraging properties.

1136
00:39:18,755 --> 00:39:19,767
Get off the show.

1137
00:39:19,767 --> 00:39:20,848
Get out of here.

1138
00:39:20,847 --> 00:39:21,928
We've done that a couple of times

1139
00:39:21,928 --> 00:39:27,384
and it works out great, but for me
and what's worked for us, and I

1140
00:39:27,384 --> 00:39:30,316
think a lot of folks is show.

1141
00:39:30,316 --> 00:39:31,781
Get out of here.

1142
00:39:31,781 --> 00:39:35,408
see the other side of that where
folks just get too buried in it

1143
00:39:35,408 --> 00:39:38,715
and aren't just more like a
focused on okay now i gotta get

1144
00:39:38,715 --> 00:39:42,996
back to work in my other life and
my other source of income here

1145
00:39:42,896 --> 00:39:47,248
just to pound that out to save up
for that next down payment for the

1146
00:39:47,248 --> 00:39:50,813
next one yeah so that's individual
it's whatever stress level you

1147
00:39:50,913 --> 00:39:54,061
know folks can tolerate but
there's a point where it can go

1148
00:39:54,061 --> 00:39:57,210
beyond and you can't screw up the
quality of your life or cause

1149
00:39:57,210 --> 00:39:59,853
yourself additional stress and
anxiety just for that either so

1150
00:39:59,953 --> 00:40:02,081
finding that blend of what works
for you what you can tolerate

1151
00:40:02,081 --> 00:40:05,124
obviously you go through life i
can tolerate a heck of a lot more

1152
00:40:05,024 --> 00:40:07,648
now and thought of risk now than i
could earlier and that's just

1153
00:40:07,548 --> 00:40:10,943
natural but you got to find what
works for you as long as you're on

1154
00:40:10,943 --> 00:40:14,168
the push side of things and doing
your best to never look back and

1155
00:40:14,168 --> 00:40:17,335
have that grandfather story of
like shut about that whole

1156
00:40:17,335 --> 00:40:20,909
hillside i you know yeah you just
have to know that when you look

1157
00:40:20,909 --> 00:40:23,354
back you're like nope i did
everything i could you know so

1158
00:40:23,354 --> 00:40:26,128
that's my thought on how i want to
look yeah i agree well to wrap

1159
00:40:26,128 --> 00:40:29,926
this up we'll fire a few more
questions at you please if you

1160
00:40:29,926 --> 00:39:47,870
could buy one property in the
Okanagan in the next 12 would it

1161
00:40:19,740 --> 00:40:33,128
be?
Downtown Vernon, BC, commercial

1162
00:40:33,128 --> 00:40:37,663
real estate that I can someday
either sell or put on multi-story,

1163
00:40:37,663 --> 00:40:38,878
primarily residential.

1164
00:40:38,878 --> 00:40:41,480
best thing you've ever spent any

1165
00:40:41,860 --> 00:40:43,700
money on?
Hands down, anything that draws or

1166
00:40:44,420 --> 00:40:47,030
keeps my family in one space for a
certain amount of time.

1167
00:40:47,030 --> 00:40:45,716
That can be many things.

1168
00:40:45,716 --> 00:40:49,511
It can be a boat.

1169
00:40:49,511 --> 00:40:51,827
It can be another toy like a
four-seater side-by-side that gets

1170
00:40:51,827 --> 00:40:53,872
you into the mountains and gets
you some mountain therapy or a

1171
00:40:53,872 --> 00:40:55,005
trip or a backyard above-ground
pool.

1172
00:40:55,005 --> 00:40:55,853
I don't care.

1173
00:40:55,853 --> 00:40:57,009
It's something that forces my

1174
00:40:57,009 --> 00:41:01,420
family to stay in a confined area
and have a great reason to hang

1175
00:41:01,420 --> 00:41:01,760
out.

1176
00:41:01,760 --> 00:41:02,236
out.

1177
00:41:02,236 --> 00:41:03,120
That is awesome.

1178
00:41:03,120 --> 00:41:04,140
So do your kids play sports?

1179
00:41:04,140 --> 00:41:04,752
is awesome.

1180
00:41:04,752 --> 00:41:06,169
So do your kids play sports?

1181
00:41:06,169 --> 00:41:06,594
They do.

1182
00:41:06,594 --> 00:41:06,959
Yeah.

1183
00:41:06,959 --> 00:41:05,925
So my wife and I are talking about
this a lot right now.

1184
00:41:09,755 --> 00:41:12,412
This is kind of a topic of our
mind.

1185
00:41:12,412 --> 00:41:12,524
Sure.

1186
00:41:12,524 --> 00:41:14,142
What do we get our 10-month-old

1187
00:41:14,142 --> 00:41:15,686
son to do?
Like, do we go skiing so that we

1188
00:41:15,686 --> 00:41:18,077
can do it together?
Do we get a boat so we can do it

1189
00:41:18,077 --> 00:41:19,929
together?
Do we play hockey where we all

1190
00:41:20,168 --> 00:41:21,482
just watch him?
Like, what do you think?

1191
00:41:21,482 --> 00:41:23,060
Sounds like you think do Sure.

1192
00:41:23,060 --> 00:41:24,524
son together i like together i

1193
00:41:24,524 --> 00:41:28,599
mean if you're a big hockey guy
now's probably the time to get

1194
00:41:28,599 --> 00:41:32,017
that stick in his hands but um
yeah it's just breaking stuff in

1195
00:41:32,017 --> 00:41:35,660
your house just get it started but
i'm a proponent both because they

1196
00:41:35,660 --> 00:41:38,968
have to also be away from you and
socialize with their so they're

1197
00:41:38,968 --> 00:41:41,471
not a yeah that soccer team thing
exactly is super important.

1198
00:41:41,471 --> 00:41:46,860
Like to be involved if I can in
some coach way or bring in the

1199
00:41:47,040 --> 00:41:49,327
oranges or whatever, but being
together and doing it together.

1200
00:41:49,327 --> 00:41:52,410
I firmly believe in, like I
mentioned, the quad up into the

1201
00:41:52,410 --> 00:41:54,185
mountains or whatever,
experiencing that and getting away

1202
00:41:54,185 --> 00:41:57,747
from the hustle and bustle that
we've created down here.

1203
00:41:57,639 --> 00:42:00,091
You just can't put a value on that
and that time i mean we sent we

1204
00:42:00,191 --> 00:42:02,018
talk your value value value value
nothing even touches time time is

1205
00:42:02,018 --> 00:42:03,802
the most important thing we got
when you have kids like yeah with

1206
00:42:03,802 --> 00:42:06,656
the kids yeah how you give back
what's a charity you like well you

1207
00:42:06,656 --> 00:42:09,137
call it cnc and that's community
and cancer the community thing my

1208
00:42:09,137 --> 00:42:12,697
opinion to any good professional
and or firm or a group of folks is

1209
00:42:12,697 --> 00:42:15,250
giving back to the community, you
know, in which they operate or

1210
00:42:15,250 --> 00:42:16,915
practice and which has given them
so much.

1211
00:42:16,915 --> 00:42:20,551
So I spent many years as a
Rotarian that really benefited all

1212
00:42:20,551 --> 00:42:20,845
concerned.

1213
00:42:20,845 --> 00:42:22,830
And it's one of their sayings,

1214
00:42:22,830 --> 00:42:25,413
myself and family included, ran
out of time to do it effectively.

1215
00:42:25,413 --> 00:42:29,171
So step back for a while, but
giving to any of their causes that

1216
00:42:29,171 --> 00:42:29,577
are local.

1217
00:42:29,577 --> 00:42:31,398
We raised a lot of money with

1218
00:42:31,398 --> 00:42:33,930
different auctions over the years,
physically directly handed it to

1219
00:42:33,930 --> 00:42:35,767
some of the very good
not-for-profits that we have

1220
00:42:35,767 --> 00:42:35,888
locally.

1221
00:42:35,888 --> 00:42:37,159
I think that international is very

1222
00:42:37,159 --> 00:42:39,520
important and a certain percentage
of everything that we give that

1223
00:42:39,520 --> 00:42:40,810
needs to be thought about.

1224
00:42:40,810 --> 00:42:42,602
But community first is big for me.

1225
00:42:42,602 --> 00:42:43,820
Cancer is the next one.

1226
00:42:43,820 --> 00:42:45,253
We all have connections and

1227
00:42:45,253 --> 00:42:46,445
stories with that one.

1228
00:42:46,445 --> 00:42:48,913
Brain tumor cancer, big one for

1229
00:42:48,913 --> 00:42:49,325
us.

1230
00:42:49,325 --> 00:42:51,299
Our firm has given to that.

1231
00:42:51,299 --> 00:42:53,462
In the past, it lost a dear uncle
to a glioblastoma.

1232
00:42:53,462 --> 00:42:56,476
And I think that's a, for me, one
that needs to really be focused on

1233
00:42:56,476 --> 00:42:57,340
all of them.

1234
00:42:57,340 --> 00:42:58,852
It starts with us giving what and

1235
00:42:58,852 --> 00:43:01,912
when we can to some decade or
century being able to say, that

1236
00:43:01,912 --> 00:43:02,340
one's gone.

1237
00:43:02,340 --> 00:43:04,176
We can cross that one we community

1238
00:43:04,176 --> 00:43:05,339
cancer is big for us.

1239
00:43:05,339 --> 00:43:07,481
We certainly set aside a portion

1240
00:43:07,481 --> 00:43:09,820
each year of our revenue to Nice.

1241
00:43:09,820 --> 00:43:10,300
Awesome.

1242
00:43:10,300 --> 00:43:15,500
One last question is how can we,
our audience or our listener, how

1243
00:43:17,100 --> 00:43:18,131
you?
Give us a buzz.

1244
00:43:18,131 --> 00:43:23,425
I am the first to always say and
speak to good realtors all the

1245
00:43:23,425 --> 00:43:24,412
time, brokers, market
participants.

1246
00:43:24,412 --> 00:43:26,287
Just give us a call.

1247
00:43:26,287 --> 00:43:28,878
Yeah, I may not have hours to

1248
00:43:28,878 --> 00:43:33,937
chat, but I always have five and
see what we're all up to and how

1249
00:43:33,937 --> 00:43:34,698
we can assist.

1250
00:43:34,698 --> 00:43:36,497
But look us up, DS Appraisers.

1251
00:43:36,497 --> 00:43:38,780
And we practice throughout the
Okanagan, Shuswap, Kamloops area.

1252
00:43:38,780 --> 00:43:40,805
And always happy to chat.

1253
00:43:40,705 --> 00:43:42,286
Remaining optimistic and wanting

1254
00:43:42,286 --> 00:43:43,455
to learn about investment is step
one.

1255
00:43:43,455 --> 00:43:44,005
Yeah.

1256
00:43:44,005 --> 00:43:44,508
Love it.

1257
00:43:44,508 --> 00:43:44,811
Awesome.

1258
00:43:44,811 --> 00:43:46,480
Well, thank you so much for your

1259
00:43:46,620 --> 00:43:46,820
time.

1260
00:43:46,797 --> 00:43:47,418
Thank you so much.

1261
00:43:47,418 --> 00:43:47,618
Awesome.

1262
00:43:47,595 --> 00:43:48,260
Thank you, fellas.

1263
00:43:46,797 --> 00:43:46,886
Pleasure.

1264
00:43:46,986 --> 00:43:47,972
for listening to the Kelowna Real

1265
00:43:47,950 --> 00:43:48,580
Estate Podcast.

1266
00:43:48,529 --> 00:43:50,024
Be sure to reach out and let us

1267
00:43:50,024 --> 00:43:52,036
know how else we can add value to
your Kelowna real estate journey.

1268
00:43:52,023 --> 00:43:56,404
Be sure to reach out and let us
know how else we can add value to

1269
00:43:56,304 --> 00:43:57,267
your Kelowna real estate journey.

1270
00:43:57,267 --> 00:43:58,161
Please show some support by

1271
00:43:58,161 --> 00:43:59,420
hitting the like, share, and
subscribe button.

1272
00:43:59,390 --> 00:44:01,079
This is sponsored by Matt Glenn
Real Estate and Taylor Adventure

1273
00:44:01,079 --> 00:44:01,336
Mortgages.