Written by Jonathan Shkiler
On March 18th, 2020, the March WIC event was cancelled due to Covid-19. Although everyone understood why the event was cancelled it was devastating to many since WIC is essentially the primary real estate investor network hub in Winnipeg where majority of the most active players in the local REI community can meet in the same place and exchange phone numbers, strategies, ideas and business proposals with each other. The year 2020 brought many new challenges and uncertainty to the majority of the population. Between talks of entering a recession due to monetary policy and the pandemic which has caused government forced shutdowns of many various sectors of the economy deemed “non essential, many investors are growing increasingly anxious. What will the future hold? Should I continue to invest in real estate? Should I continue to raise capital? Am I the only one anxious about the future? WIC president, Dakotah Charron, knew these were burning questions in majority of investors minds, which is why WIC had its April event virtualized via a zoom seminar with contributors who were essential key figures in the community to explain to viewers what is currently happening and the actions they are taking or continuing to take to have success in the age of a global pandemic and economic tremors. Welcome to the WIC Virtual Mastermind.
It’s 7 pm on Tuesday April 21st, 2020, and engaged members of WIC are beginning to tune into the Webinar via Zoom. Dakotah gives a brief introduction and lists the main contributors: Mike Schroeder, Garrett Froese, Garrett Wong and Manjit Rukhra.
Mike Schroeder goes first. As a mortgage broker, from Winnipeg, his insight on the pulse of current consumer behavior applying for financing is crucial. He is seeing mortgage rates drop and consumers who are looking to take advantage of such low rates including existing consumers who are looking to either refinance or renew their mortgage term at a lower rate. Is the situation in Winnipeg bad? Yes he says. It is the end of the world? No he says. Banks are allowing deferrals for mortgage payments and so are utility companies. Even the city of Winnipeg is allowing for deferrals for property taxes. All these things soften the impact of job losses and other economic harm done by Covid-19 which could greatly impact mortgage financing for consumers. One insight that he shared, which was rather crucial information, was how some banks are now assessing their consumers occupations to determine whether or not their industries are essential before approving their mortgage applications. What does this mean? Well for starters if your bank believes that your occupation can be shut down at any time by the government because of any pandemic, they may hesitate to give you financing. In other words someone who works in a non essential sector like the food industry in the future will not be able to apply for regular mortgage financing but someone who works in a key essential sector like trades or real estate will continue to be able to receive mortgage financing.
Garret Froese, of Team Made, is up next on the webinar. He explains that his real estate company is still continuing to rent its properties and they are continuing to be able to sell their flips that are attracting multiple offers. At the end of the day, people always need a place to live and demand for rentals and property ownership will always be there since it is an essential service. Garret explains that the reason the real estate market is still steady in Winnipeg despite facing a time of layoffs, cuts to production and economic uncertainty is because the demand for quality housing is greater than the supply. When homeowners of quality housing, who were considering selling, became frightened by the media hysteria caused by Covid-19, they no longer wanted to list their house on the market and have strangers with their agents walk into their homes and touch their door knobs and light switches. This gave house flippers a big advantage because they do not live in the houses they sell and there is now less quality houses available to compete with their flips.
Garret Wong, is the next WIC webinar contributor. As the president and founder of Upper Edge Property Management since 1997, Garret has a lot of insight on managing multiple units and dealing with countless tenants. How has Covid-19 impacted his business? Mainly it has forced him to adopt new policies to stop the spread and deal with tenant concerns. Although some tenants are having issues paying their rent, majority of the tenants of his multi unit buildings are still paying in full and his company is able cover the mortgage payments and maintenance costs. The main access areas of his building need to be constantly cleaned and wiped down with disinfectants. Employees entering the tenants units for maintenance service need to wear masks and gloves. Also there are no longer showings of occupied apartments for prospecting new tenants. What opportunities does this present for the future? It means that tours will be all virtualized and that prospecting tenants will be able to see the unit and analyze its perceivable size, views and appearance from the comfort of their own home without having to drive over and walk into the unit of an occupied tenant who may be sick. This also saves time in regards to property management not having to coordinating with tenants residing in the unit for showings.
Manjit Rukhra of Prosper Path is the final contributor to the WIC webinar. His core focus is to explain to viewers why this is the best time to continue raising capital and continuing to push through in real estate investment. Every few years, usually seven, there is an economic event or recession that pushes out the over leveraged investors and consumers, and provides opportunities for prepared entrepreneurs and investors who are ready to ride the storm. Manjit explains that right now the opportunity in finding real estate deals is not here. But it will be here in 6 months when the mortgage, tax and utility deferrals finally end and people are still behind on their payments. There will eventually be pain felt but not now. When the pain is finally felt overleveraged homeowners, investors and landlords will want to avoid foreclosure and will be highly motivated to sell their properties at wholesale price. What you should be doing is having conversations with your investors and staying in touch with them to get them ready and emotionally prepared to invest with you in six months when the blood finally starts to flow on the streets and there are deals available to swoop in and grab. This is the best time to network and raise money from investors. Confidence in the stock market is down. People are now more cautious and conservative with their money, and want to invest in something that they know has tangible worth like real estate, but more importantly, they want to invest their money in real estate that can be purchased for significant under appraisal price. This is one of the best times to get ahead in this game and raise investor capital. It’s the preparation that you do now in the present moment that can define your next five to ten years in the industry, as they say, “Patience in the moment, comfort for ten years.”
This concludes the WIC virtual seminar which in essence is a group empowerment session because we are all in this together. Sure we may not be business partners, joint owners in real estates or ventures, but we are all part of the same Winnipeg investor community and we all face the same hurdles and challenges. We do not have a crystal ball and know exactly what will happen, no one does, but what we can do is analyze market trends and leverage our relationships with the top experts and industry leaders in the community to give us insight for preparation and prepare our tools for the challenges that the future may hold. How do you want to be remembered in the REI industry? Will you be known as someone who became a big name because they leveraged their skills, networks and money to succeed and make a difference in the community or will you be forgotten as someone who stayed at home, did not invest and gave up on the presented opportunity? Yes at WIC we understand that these are trying times but if you don’t put yourself out there no one will remember your name. You were interested in joining WIC in the first place for the networking opportunities, now you are relying on WIC to provide the latest insight in current market conditions, trends and expert analysis for you to make an informed decision to take action, this is what we are here to do. This is why we are here. This is why we made the choices we have made. This is why we will continue to make such choices. Knowledge is power, be empowered by WIC.