What does it take to truly find financial independence? Wealth Manager, CBC Financial Columnist, and serial real estate investor, Mark Ting, sits down with Adam & Matt to chart his success and failures in real estate investing throughout the Lower Mainland and abroad. Learn pro tips for knowing your numbers, seeking out gaps in the market, forming lasting joint ventures, and where Mark sees upcoming opportunities. Not to be missed!
Vancouver Real Estate News, Market Updates, Insider Tips, Stats, & Analysis
Mark Ting is a Partner, Private Wealth Manager at Foundation Wealth and the Guide to Personal Finance on CBC’s On the Coast
Tell us about yourself:
I was working overseas as a teacher in Japan from about 1998 to 2000, and I managed to save about $65,000 by playing currencies and sending yen back home to Canada at ideal times. I researched the currencies and essentially boosted my income for the year by 20 to 30 percent just by doing that. It was my little side hustle. Back in 2001, I came back to Vancouver real estate, which was very different from what it is now. It was really the prime time to get into the market. I bought a two-bedroom condo in Yaletown, and that skyrocketed my interest in real estate. I eventually sold the condo and live in a house in Richmond now, working as a wealth manager.
Can you talk about some of your other real estate investments?
Aside from my principal residence stuff, I’ve almost always invested with partners. I find it helps split risk and brings in different expertise. My neighbour is into renovating, and a high school friend of mine is a builder. We built a couple of houses together, but they went on the market around the HST time, which was horrible. They were brand new, but no one was buying. Plus, our realtor was my best friend’s father. It wasn’t easy. When it comes to friends and family, you have to really weigh those relationships. We didn’t make a lot by any stretch, but I learned a lot about interpersonal skills and business relationships from that. We didn’t really set the parameters upfront. We didn’t think about what would happen if things went bad. It is always best to set the parameters upfront with business partners to ensure there is a plan if things go well or not so well.
On Mark’s best score in real estate:
It goes back to currency again. Back in 2012, the Canadian dollar was higher than the U.S. dollar. At that point I threw caution to the wind and took every piece of equity that I could get. I turned to friends and family, laid it out for them, and basically asked them to be silent partners. So we bought a 13-unit complex together and I bought an 8-unit myself in Arizona. We sat on it, and we collected rent. Buying in Canadian funds and collecting rent in American funds offered a nice currency conversion boost. That was a huge setup that helped me in my career. I’ve since sold both of those properties and use the funds to become a partner at Foundation Wealth. So, it’s all about opportunities. If there’s something that you could do better with that real estate, I think that’s worth exploring.
Can you talk about the process of going from local investor to global investor?
It’s a relationship game–you have to find people that you trust there because you’re blind. I went to Arizona, because I would never buy anything that I didn’t see. I met with a couple of recommended property managers. I just wanted to see their vision. And I picked one based on his personality–I liked the way he thought. We had leeway because it was such a good cash-flowing property. And I made it clear: I’d rather undercut rent for the right tenants. So it comes down to getting recommendations, trying to see the properties, and trying to make your life simple. Often, people think money is the thing, but it’s not–it’s the relationships.
What metrics do you look at when considering a real estate deal?
Cash flow’s number one. I almost put zero growth on my returns. So, if I’m looking at an apartment and it doesn’t cash flow and it’s me doing a hundred percent leverage on it, I probably won’t do it unless there’s something else going for it. When we’re talking big numbers in Canada where people are putting down 50 percent down payments and still not making it cash flow, I stay away from that.
What are your thoughts on the current state of the Vancouver real estate market?
I think September’s numbers will be quite telling. Spring wasn’t all that great and summer sales were at a 17-year low in Vancouver and a 22-year low in Calgary. If it keeps going that way, I see it as an opportunity. Inventory will be going up, people will be listing, and not everyone’s going to see closing on their properties. So, if you do have cash, if it was me, I’d just be doing a lot of lowball offers. Don’t worry about feelings. They don’t have to counteroffer–they probably won’t. But if they do, you’ll know they’re probably in a bit of tight spot trying to sell, and that’s your opportunity. Look at assignments; wait for the panic. Patience is going to be key and finding a good realtor who’s willing to do the grunt work.
Why do you like real estate as an investment, and how should people consider it as a larger strategy for wealth generation?
It’s one piece of the pie. I’ve done well with real estate. It has allowed me to do bigger and better things. But I find people in real estate have had good experiences because of advantages like low interest rates, capital appreciation, and leverage. Those numbers appeal to real estate speculators. And then there’s me. I like the stuff that’s slow, steady and boring–stuff you don’t have to worry about, sort of like a pension. If you want to get into real estate, you have to do the math. I use a spreadsheet and spend months crunching the numbers beforehand. You can’t go by your gut. And I never see it as trying to maximize profit, mostly because it’s going to cause me stress. I see it as what can I do to make some money and keep going and stay in the game. With my investments, I’m happy with the positive cash flow and letting the money bank. I don’t spend that money, and I’m more than willing to rent it out at a lower rate to get the right tenants in there so that they don’t cause me problems. Time is money; we’re busy people.
Do you have any areas in Vancouver that you’re excited about?
I still like New West. I go with what I know. I look back to the neighbourhood where I bought, and it’s just beautiful with so much to do. I think there’s opportunities there with both older units and new units. I’ve been watching Whistler too, but there’s really no supply, so I was looking at Pemberton. It’s essentially 25 minutes away from Whistler, and that’s where all of the workers in construction are going. Squamish also seems appealing. You’ve got the commuters going to Vancouver because the highway’s quite a bit better.
5 wire questions:
Favourite neighborhood in Vancouver: Yaletown
Favourite restaurant or bar: O’Hares Irish Pub in Steveston
Downtown penthouse or westside mansion: Neither. Rather have a little place in Whistler and a little place in Richmond
First place you bring someone from out of town: Food is the best thing about travelling, take them to Dim Sum
Something you have purchased for under $500 recently that has changed your life: Trip to Japan, Singapore, Thailand for $430. I found this deal on YVRdeals.com
More about Mark Ting, CFP