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episode # 263

Fortune Favours the Bold with HGTV’s Todd Talbot

At a time when many potential Vancouver real estate buyers were trigger-shy, Todd Talbot was pulling the trigger on multiple purchases… and, his confidence has paid off. Todd sits down with Matt and Adam to discuss his investing trajectory over the past few years, including some big wins, some mistakes along the way, and some pro-tips for anyone interested in Vancouver real estate. On today’s episode, we get Todd’s take on the state of the market, his foray into development & where he sees big opportunities in the lower mainland and beyond. This episode is as much about mindset as it is about execution. Learn the tricks of the trade from a season vet who is consistently moving through the market.

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Episode Summary


 

Please tell us about yourself and catch us up with what you’ve been doing lately.

I’m a trained actor and almost 20 years ago I started buying real estate in Vancouver. That passion for real estate grew and started to take over, bringing my two worlds together with HGTV’s Love It or List It Vancouver. That’s finished now which has left me in an interesting position. I’ve gotten very into the dynamics of real estate: What are we building? Why? And where? Watching people struggle to navigate the finances of real estate told me that the system might be a little bit broken.

We moved from our big house in Lion’s Bay to a smaller home in East Vancouver. We’re living this journey and always trying to learn more. My background is in acting so I’ve got some shows in production, but some were cancelled due to covid. I used to be embarrassed about the different elements of my career but the diversity is what keeps me going. 

My happy place is renovating. I need that part in my life. Whenever I listen to someone who is going to share their perspective, if they’re not putting their money where their mouth is, there’s credibility lost there. So as a family, we’re living that journey and have really double-downed on the investment side. We’re in the game, big time. 

Last time you were on, you had just bought something in Mount Pleasant with a partner. You were making fairly big moves when other people were gun-shy. Can you tell us a bit more about that and your investment mindset? 

No one has a crystal ball. But I remember when we bought that house in Mount Pleasant, I thought we had timed it for the bottom of the market and I think I was right. I like to look at the macro elements that are driving the Vancouver market. If you look at the micro elements and the media, it can get scary. How do you navigate that? I think a part of it is knowing your comfort zone and what you believe in. The other part is scoping back; you need to clear away the chatter and look at the broader strokes. 

Vancouver is an awesome city. It has challenges but in the grand scheme of things, people want to be here. It’s a supply and demand equation. We don’t have a lot of supply and we haven’t figured that out yet. Will the demand subside in some capacity? I don’t think so. 

I’m a buy and hold guy. I like to mitigate the risk of my investments by knowing I can hold it through any short-term fluctuations. 

You have to be clear about what perspective you’re looking at the market from. Are you looking at pricing from an investor perspective or from a sustainability perspective? It gets tricky when you start to add in communities and families. Are we building the right homes for people to afford? Are smaller homes the way forward? There are so many different dynamics at play and it’s hard to analyze. 

There’s a point when you have to leap. You do your due diligence, you trust your plan and your gut, and then you have to leap. It’s tricky. There’s always a moment of stress when you buy a piece of property. There’s always a moment of panic – everyone gets it.

Are you surprised about where we are in the market right now?

Yes. I’d be lying if I said otherwise. When we look back at what has played out throughout the pandemic, there are elements that make sense. But no one predicted this from the start. 

Vancouver is still a desirable place to live and people wanted more space during lockdown, so the rush for detached homes makes sense. And with low interest rates, we can see how we got to where we are. But I don’t know anyone who thought this was going to happen.

Can you walk us through your process with the Mount Pleasant project and how covid impacted that? 

The big win for us was on the purchase price. I always say you make your money when you buy. The property was vacant and we managed to do a cost-effective renovation. We got it fully tenanted before covid hit. We had a decent amount of cash flow and are going through a refinancing on that property now to pull out everything we can, and we’ll still cash flow. To me, this is the golden formula. 

In terms of tenants and covid, as a landlord I did have some anxiety. I also have a property outside of Calgary where I had to address the rent issue. We decided to lower the rent in order to keep our tenant there longterm, rather than stopping rent for a couple of months. But in Vancouver, everything has been fairly smooth. We’ve had some tenant turnover but it hasn’t been much of an issue. 

It feels like the rental market is back to normal. 

There seemed to be a softening on the rent side 8-12 months ago, and I can’t remember the last time I heard that in Vancouver. Any long term tenants are protected by the current rent freeze. But the rental market does seem really strong. 

What areas/regions in BC are you excited about? 

It feels like a long time since I’ve been elsewhere in the province! But it does feel like people are analyzing their homes with a new lens. People are considering living outside of the city now that they can work from home. Besides the obvious places, like Kelowna and Victoria, we’ve seen people looking at smaller communities. My brother lives in Nelson and whenever we’re in these smaller communities, my wife and I ask each other, “Why don’t we live here?” In the past, people have been so tied to their Vancouver location but now they’re open to new opportunities. People are looking at Campbell River, properties on the Gulf Islands and pseudo-vacation homes where you could live there or retire there. 

Can you tell us about right-sizing in a time when there was a lot of chatter about the death of the city?

The city isn’t going anywhere. We’re not seeing people leave the city in any type of numbers that will make a foundational difference. Besides work, people want to live in cities for connectivity. And if there was ever a reminder that we crave connection, it has been through this pandemic. The city offers that. 

I see a big challenge around how many detached homes we have and the amount of space that’s taken up by those homes. That’s one of our core challenges and I don’t see it being easily solved. We moved from a larger house to a smaller one and will be making the move soon to a three-bedroom condo. 

We bought a three-bedroom presale at the ELLA on Nanaimo. It’s looking great and speaks to my philosophy on where I’m at in my life. There’s always an emotional part to real estate decisions. There’s a bad stigma attached to families living in condos but I think that’s ridiculous. We’re excited to move in! 

This three-bedroom condo is less than $1 million, which is still a ton of money. But to carry the burden of a $2 million detached house…for what purpose? There’s a certain sense of freedom that comes with a more responsible financial choice. And you do give up some space. But we’re going to try it and I’m excited about it. 

Looking at your past investments and moves, your timing is impeccable. 

I’ve often tried to analyze where my strengths are in real estate and one of them is my instinct, which I’ve developed over time. Finding a piece of the puzzle that other people aren’t jumping on, and maximizing profits, seems to be what I’m good at. But there are plenty of things I’m not good at! 

What’s next? 

I don’t know! I’ve always had a dream of developing. I’ve always wanted to develop a small, residential, cool project and have been waiting for an opportunity. What became apparent to me is that being a developer is a full time job, and I don’t have that kind of time. So I’ve connected with some friends to see if this is something we can do together. I’ve jumped in on one of their projects and have created an investment group. I’m so excited to be working with them and these projects have invigorated me.

Phoning people up and asking if they’d like to be involved in a project is what worked. I thought there’d be more hesitation but people are jumping in. There’s an appetite for it. I think that indicates where we’re heading. 

Find out more: https://toddtalbot.ca/ 

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