How To Create A Winning Formula For Condo Investors With Riz Dhanji

Interview Highlights

00:58 Who is Riz Dhanji and What is Canderel?

2:18 How Riz Got Started in the Condo Industry & Ended up as VP, Sales & Marketing at Canderel

4:47 What Has Been the Key to Canderel’s Success?

9:05 DNA3 and Its Upcoming Retail

11:00 Madonna’s Hard Candy Gym in Aura

12:20 What Surprises Can Condo Investors Look Forward to in YC Condos?

13:57 Is There a Condo Bubble in Toronto?

16:30 What Else Do You Need to Know About YC Condos

18:00 Why is the Rental Market So Strong, Specifically at Yonge & College?

19:20 Yonge Street: Past, Present, Future.

24:45 Riz Dhaji’s Personal Condo Investments & Strategy

27:47 What’s Happening with Canderel in 2014?

28:54 The Foreign Investment Myth

Links:

Follow Riz Dhanji on Twitter

Canderel and Samsung Collaboration at YC condos

YC condos Investment Analysis Video

Read the Riz Dhanji Interview Transcript:

Andrew la Fleur:

Hello. Welcome back to the True Condos Podcast. Thanks for listening in. A special welcome if this is your first time listening to the Podcast. I’m your host, Andrew la Fleur. I’m a realtor and I specialize in helping people to make money by investing in the Toronto Condo market.

This podcast is a chance for you, the listener, to hear from experts and industry insiders about what’s really going on in the condo market. We’d also like to find out where these insiders are putting their own money when it comes to condo investing.

If you like this podcast, please go to TrueCondos.com and become a subscriber to get even more great content like this all about condo investing in Toronto.

Now, this week on the show, I’m interviewing Riz Dhanji who’s the VP of Sales and Marketing at Canderel. Canderel are known for their projects in Toronto like Aura, which is almost finished and is the tallest condo in Canada; it’s 78 stories high, the NA3 which is coming up for completion this year in King West, and now they recently launched YC Condos right at Young and Collagen. That project’s getting a lot of buzz right now.

Canderel is not one of the biggest condo developers in Toronto. There’s certainly a lot of other developers who build a lot more buildings than they do, but they’re known as one of the best, and certainly one of the best that I’ve worked with and that my clients have purchased in over the years. They have a very loyal following of purchasers and people just keep coming back and buying from them again and again.

I talked to Riz about how Canderel creates their winning formula for condo investors what his thoughts are on the question of this there’s a condo bubble in Toronto. We talked about his own personal investments strategy which was very interesting, so you definitely want to hear that.

For all the show notes on this episode, just go to TrueCondos.com/Riz. Now, here it is, my interview with Riz Dhanji.

Hey, Riz. Thanks for joining us today on the podcast. I appreciate your time being here.

Riz Dhanji:

Thank you.

Andrew la Fleur:

Why don’t you start by just telling everybody a little bit about your story? How did you get started in the condo industry specifically and how did you get to the point where you are today?

Riz Dhanji:

I’m probably one of the first guys that actually graduated from real-estate at the University of British Columbia. This is about 1994. Everyone who graduated in my class at that time not one person actually went into real-estate. Everyone thought it wasn’t very lucrative. It wasn’t a great business to be into. I guess, I decided that let me try it out.

Andrew la Fleur:

In 1994, refresh everyone’s memories who maybe weren’t around at that time, but that was really not a good time for real-estate in Canada.

Riz Dhanji:

Yes. I was in Vancouver at the time. I’m not a Toronto white originally, unfortunately, but I …

Andrew la Fleur:

We’ll forgive you.

Riz Dhanji:

When I graduated, I worked for a company in Hong Kong. I went to work straight in Hong Kong for a company called “Vigors International.” They’re a large overseas consulting firm. An interesting thing about being in Hong Kong at that time is that everyone wanted leave Hong Kong because of the handover that was happening in 1997, so even though the markets were very bad in Canada at that time, the market for real-estate and Canadian real-estate in Hong Kong was great. I was marketing Canadian real-estate Vancouver Toronto property in Hong Kong at that time. You would bring a project there, it will sell out in a day. It was absolutely incredible. It was a great time to be there.

Andrew la Fleur:

Were you selling condominiums?

Riz Dhanji:

Yes.

Andrew la Fleur:

High rise condominiums?

Riz Dhanji:

Yeah. I was selling high rise condominiums for various developers across Canada, and then we started doing Southeast Asia and different areas as well. In about 1997, the market really took a dive in Hong Kong. That was when the handover actually happened. People said, “Nothing’s going to happen in Hong Kong. I’m going to keep my money here.” Then the financial crises happened in Asia, so I decided to move back to Canada. I came back to Vancouver. It was even worse in Vancouver at that time, so I decided to move to Toronto, trying to sort of to come up a little bit, work for developer here, and then started all the way throughout. I’ve been in the industry about 15 years, and 16 years actually in Toronto. I’ve been with Canderel for approximately 12 of those years, so it’s been great

Andrew la Fleur:

That’s great. You’ve worked on some amazing projects over the years, a lot of projects that people are very familiar with, of course, College Park Condos, College Park 1 and 2, the DNA buildings in King West. Now, YC Condos is I know very big on your plate right now. Over that time, you’ve really developed a reputation in the industry as being a guy who can sort of sell out a 60 story tower in a matter of weeks. What do you think is the key to your success?

Riz Dhanji:

I think the key to my success in many Canderel is … Really the College Park area has been a great starting point for us. We started with the residents for College Park Phase One. That area was really desolate. It really wasn’t so much happening in there. We built two towers there, 1200 units connected to the underground walkway. The building’s turned out beautiful. People bought at that time in 2001, they bought it around $220 a foot, and they were selling their units around $600 a foot.

The quality that Canderel builds, the type of buildings that we do, the unique retail that we put in is very market differentiator. I think that when we started Aura there was quite a bit pent up demand for people to buy in the same location, people that didn’t get a chance to buy College Park Phase One, Collage Park Phase Two. I think we really designed the building unique. Obviously, it was Canada’s tallest condo and it still is Canada’s tallest condo. That was the unique feature about it.

At 180,000 square feet of retail, and it has some great features to the building itself. We have thousands of people that wanted to buy. In fact, we sold 700 units in approximately a month when we launched in 2008. We took that success and we took it over to our DNA 3 project.

Andrew la Fleur:

Right.

Riz Dhanji:

When we did DNA 1 and 2, we were sort of pioneers in King West. We pushed the envelope on design. We pushed the envelope on finishes. The interesting thing that happened is that when DNA was completed people bought it around $200 a foot, and they’re selling around $500 a foot. When we came out with DNA 3 which is a much better building than DNA 1 and 2, and push the envelope on design again, and traded at similar resell values as what you would buy DNA 1 and 2, there’s a huge uptake on there. We almost sold out that building in a year and a half.

I think the more finish the quality of what we do is really market differentiating. That’s what people keep coming back to us.

Andrew la Fleur:

That’s great. Really, like you say, a lot of people bought Canderel Condos over the last decade quite frankly have done very, very well.

Riz Dhanji:

Yeah. I think one of the things that we do with Canderel is we want to offer a superior finish in the units. We want to make people very excited about what they get. We want to offer amazing retail in the building which adds to the value of the building, and then we want to leave … We actually leave money on the table. We want that person to buy at … Maybe we could have gotten another $50 a foot on there, but we leave a little bit of money on the table because we know that at the end when the purchase is completed he’s being in a significant upside, he’s continuing to buy from us.

Majority of our business is repeat agents like yourself. We have clients who’ve bought from us before, but want to get into another Canderel building. We don’t do a lot of marketing. We don’t do a lot of advertising. It’s just a lot of repeat business that we get, and that’s the way we see it. We always want to do something very unique.

Andrew la Fleur:

Right. I mean, it’s just basically you’re creating a win-win where you guys win as a developer. You could sell your building out very quickly. You’re very satisfied customers that just keep coming back to you because they’re getting a great product at a great price, and it’s a great investment.

Riz Dhanji:

Absolutely. A lot of these people who bought a number of years ago at College Park or seeing some of the highest rental values at the downtown core.

Andrew la Fleur:

Yeah. If they don’t sell, if they’re holding on to these units they’re also finding that the rental rates are really good.

Riz Dhanji:

Yeah. The cash flow positive from day one which is very hard with the certain buildings that you can see in the city. All these adds to what we’ve done and what we’ve created around the city at least the brand that we want to establish in downtown in Toronto in general.

Andrew la Fleur:

You mentioned the DNA building in King West. Can you tell us a little bit about what’s happening there? That building is now almost complete DNA 3. What’s happening with the retail portion there? Can you tell us about that?

Riz Dhanji:

DNA 3 was approximately 20,000 square feet of retail that we had. If you look at before DNA 1 and 2 came along, most of the product that’s on King West the, condo buildings that got built, putting a lot of mom and pop shops, so you got a competition. You’ve got just a little spa or something to that effect. We’ve very much into retail. We want to make sure that our building have some incredible retail that adds to the value of the building and the overall streetscape and what the neighborhood’s looking for.

When we did DNA 1 and 2, we end up putting up World Bank in there. We put Starbucks in there, GNC, Flight Center, and it really raised the value of the building.

Andrew la Fleur:

Right.

Riz Dhanji:

DNA 3 …

Andrew la Fleur:

This is really in a desolate stretch of King West, too. There was nothing there.

Riz Dhanji:

There’s nothing there. If you look it, the general retailers would not come into that area. We set strong relations because we have a huge commercial division with retailers from all across the country and in US that we can quote from and really sell them on what the future of that neighborhood is going to be. One of those people that we approach was Loblaws. Loblaws was reluctant or any other retails kind of reluctant just coming to the neighborhood because Loblaw’s really has one on Queen and Portland. They have a huge one which is not that far away.

There’s a metro that’s across the street at Liberty Village that’s there. What we told them is that it’s going to be close to 600 units we’ve got in an area stretch of close to 2000 condos there that’s not being serviced by that metro. It’s too busy. They really saw it. They love the building. They love what we are bringing to the table. They saw what the brand that we did with DNA 1, 2. They’re opening a major store there, so I think that’s a huge group for the neighborhood and for the building. It’s just going to add value to it.

Andrew la Fleur:

Right, and it’s another big surprise and a big bonus for anybody who bought in DNA where they didn’t know that Loblaws was going to be there, but they saw the track record I guess with the other Canderel buildings in terms of the retailers that you attract. Now they’re getting this extra bonus, which again is just another boost to their values, another thing that makes the building attractive to renters as well.

Riz Dhanji:

I think that one of the most attractive parts of selling the buildings that we’ve done is if you look at Aura we tell people we’re opening a gym. They had no clue it was happening. We ended up working a deal with Madonna’s group to put in the first Madonna’s gym in North America, I think. She could have picked anywhere in North America to be able to open the gym. She opened her first gym here. We negotiated that all the owners from the building get free access to this gym.

They sell memberships for 150 bucks a month. You’ve got a branded gym that’s 40,000 square feet, and people get free access to it, so it was like a huge plus for everyone that’s in there. Now, renters are actually clamoring to get into the Aura …

Andrew la Fleur:

For that. Just for the gym.

Riz Dhanji:

… just for the gym, because they don’t … I mean, you usually get a 5,000 square foot gym that you got to wait. You never have to wait for anything. It’s the most technologically sophisticated gym I’ve ever seen in my life, so it’s really great.

Andrew la Fleur:

It banks the question then what surprises are in-store for people who buy at YC condos?

Riz Dhanji:

Well yeah. I mean, we always kind of prove …

Andrew la Fleur:

How do you top that?

Riz Dhanji:

How do you top that, I agree, and it’s very difficult to top everything. Every building we look at and we see. You know, what can we do? I think for YC condos what we did is … I went to Singapore a number of years ago. I went to this hotel called the “Marina Bay Sans.” On the 56^th floor they have this infinity pool that actually hangs over the edge of the building and overlooks the city. I wasn’t actually staying there, so I actually pay $100 just to go up and see this, because I’ve never seen anything like it. It was the most amazing experience I’ve ever seen in my life.

I came back and then I said to my architect, and we all worked together to see, you know, “How do we create something like that at YC? What can we do that’s different?” The great thing is Canderel was saying, “Listen. If we do something on the tops floors it will be great, but we can do penthouses there, charge a thousand dollars a foot. It’s 5 to $10 million of revenue, but we want to make something that was so unique in the city and in North America that people will be clamoring to be in this building.”

What we did is we created this Aqua 66, which is the tallest infinity pool in the Western hemisphere on the 66^th floor. You literally swim up to the edge and you can almost touch the CN Tower. It’s going to be a one of a kind experience that you won’t get in any building, and not only Toronto, I think anywhere in North America. That’s really going to top it, and I think it’s going to be an incredible feature for the building.

Andrew la Fleur:

Amazing. Shifting gears to the market, the condo market, question that everybody wants to know, and I’d love to hear your take on is, is there a condo bubble in Toronto.

Riz Dhanji:

I get that question probably … I mean, I speak at a lot of events on a monthly basis. I probably get that question 15,000 times a month. What’s going on with this market? Everything is wrong. In two to three years it’s funny. Two years ago, when the market was really sort of slow and people were very reluctant to get into the market, I had a presentation to a big group of investors and I said to them “Interest rates are not going to go up until pass 2015. Condo prices aren’t their best levels right now, and I encourage you to buy now, because you will watch and you will see what’s going to happen in that housing marker in the city of Toronto that’s going to make it even more unaffordable to be able to get in, and that’s going to capitalize on the condo market.”

Guess what? We’re in the 2014 and we’re seeing that. In fact, there was an article today I think yesterday in the Toronto Star Real-Estate Section that said that the average price of a detached house in Toronto just hit about 980,000.

Andrew la Fleur:

Right.

Riz Dhanji:

I you think about that … I mean, 10 years ago it was $456,000. I mean, it’s unaffordable to get a single family home or semi-detachable in the city. What’s happening is that the resale market got a 5% to 6% jump in prices from this last quarter. Listings are down because people are not listing as many, because people think that all these condos that are being built if going to be thousands of listings. Were actually below our 10-year average on listings, so there’s not enough listings that are out there.

There’s hundreds of thousands of people that are moving into the GTA. I think that the housing market or the condo market in particular is very healthy. I only think it’s going to get better for the next 10 to 15 years. I don’t think there’s a condo bubble that’s out there. I think it’s very self-regulated with the real-estate developers. 2013, we saw some of our lowest launches in history in Toronto, but we …

Andrew la Fleur:

In terms of new condominium launches?

Riz Dhanji:

Correct, but we need to supply the housing market with between 25 and 30,000 units each year on the low rise and the high rise site. We’re not even close to that capacity just to meet with immigration demand. I think that real-estate in prime areas will always do well and I encourage people that don’t look at those headlines because those headlines don’t make sense.

Andrew la Fleur:

That’s great. Talk about YC condos. This is the big new project you mentioned the pool. What else can you tell us about the project. Obviously, very excited about that. What else should people know about YC Condos and what makes it really special?

Riz Dhanji:

YC is located right on basically at Young in College, that’s with the name is Young in College. I’s got to floors of retail, and we’re working with some incredible retailers come into the building.

It is almost impossible to get land today on Young Street. It’s very difficult to acquire. It’s very expensive. I feel that what the city’s planned for Young Street is going to be what we see in Time Square in New York which is this [stair 17:16] fair with residential hotels across there and new retails that’s going in, that’s going to be sort of the center point of downtown Toronto. That’s what’s going to happen.

People are clamoring to be there because you’re right about the subway lining where you are at YCU. Just get outside your door, you cross the street, you’re at College Park. The future path network is coming up to College Park, so you just cross the street, you’re in there, and you can walk all the way down to Union Station underground, never have to go outside. You’ve got amazing restaurants that are out there. You’ve got a lot Loblaws that’s there. You’ve got everything around your fingertips that’s there.

For investors at rental market is extremely strong there. Rents in those areas are between $2.80, $3 …

Andrew la Fleur:

What’s driving the rental markets strengthen that area in your opinion? Why is the rental market so strong especially centered on this Young and College intersection?

Riz Dhanji:

I think because it offers the convenience of downtown living without being in the financial district. If you work in the financial district you really want to escape it when you’re working in that main area. What Young and College is sort of like Sogo district, too. It’s got great retail that’s there. There’s a three car park at College Park that we’re spending another $3 million to redo, so you got a beautiful park that’s there. You’ve got cafes. You’ve got restaurants. You’ve got the theaters, the movie theaters, the Young and Dundas. You have everything that’s closed by.

In the end, there’s quiet places, quiet streets that around there. You’re not right in core where everyone’s rushing to be. You could walk to work. You could take the subway to work. Convenience is a huge factor for it. I think that this location offers that and people are willing to pay the rent. Plus, you’ve got two of the biggest universities within five blocks of each other. You’ve got Warsaw University and University of Toronto between them close to 200,000 students. I think that that is a huge factor in people who want to live close by.

Andrew la Fleur:

Right. You let it go a little bit when you first launched the College Park buildings in the early 2000s. Paint us a picture a little bit of, because we know what Young Street is like today, and it’s really, like you say, it’s trending very upscale, it’s trending towards this Time Square very hustle, bustle hotel, residential, retail, playgrounds sort of a feel, but it wasn’t always like that. Can you take us back to when you’re first trying to convince people to buy into this area? Like you said around 2001, like what was it like there, what was the feeling of the neighborhood at the time? Take us back there. After that, maybe dive a little deeper into where you see Young Street going over the next five, ten years.

Riz Dhanji:

Well, one word in 2001, scary.

Andrew la Fleur:

Scary?

Riz Dhanji:

I remember walking down before I started launched College Park Phase One, walking out of Young Street and seeing really not safe area, a lot of crime that was happening, a lot of stores that were bankrupt. No one wanted to be down Young. It was very scary. I tried to think to myself can I see this vision that’s going to happen in the next ix years, and how do we tell people that this is going to change, because I wasn’t convinced that this change would happen. People believe in what we were doing, so that was great. I’m glad that they took that leap of faith.

Today, you look at it. I mean, I was telling one of the reporters that I will be able to walk down Young Street in 2001, and I don’t think I’ve seen more than 10 people in the street.

Andrew la Fleur:

Right.

Riz Dhanji:

Today, you go down at Young Street, I can’t even move without getting hit by somebody walking next to me. It’s just a walking ….

Andrew la Fleur:

Night and day. That’s correct.

Riz Dhanji:

It’s complete difference.

Andrew la Fleur:

Completely different.

Riz Dhanji:

I think what happened is when we started putting up the residential and adding density to that area, more people started being right in the center of it. Then Aura is coming along. We had 180,000 square feet of retail. They got [beth batagon 21:33], you got Marshalls, and you got another thousand units above there, so now more density that’s coming through there.

What’s happening is Young street is now transformed into this retail haven and residential haven and this big part that’s there that people want to enjoy and want to live there and be there on a daily basis. A lot more festivals that are happening. The young street BIA is very active. There are great BIA. I think they’re the best BIA in this country.

Andrew la Fleur:

Wow.

Riz Dhanji:

They’ve got a lot of things that are planned on a year and I really get excited when I hear about what their plans are. There’s a lot of events. There’s a lot of stuff for kids, for families, everyone to be on there.

Andrew la Fleur:

I guess Dundas Square just a couple of blocks south to, it didn’t exist in 2001 at all.

Riz Dhanji:

No. Dundas Square was no there. Now, you go to Dundas Square and almost every day there’s some sort of even that’s happening whether it’s in the summer or the winter time, and it’s exciting in there. There’s a lot of people, there’s so much just happening. Now, the future for Young Street that I see is … I know some plans that I can’t talk about, but I know there’s a significant amount of new retail that’s going to be coming here, and that’s going to be along that Young College Gerard section that I can see some incredible retailers from the US that are planning to come here as well.

The other thing that I see is the biggest shift that I saw that happened is that Bloor Street was always considered the high-end retail of Canada.

Andrew la Fleur:

Yeah.

Riz Dhanji:

The minute that Cadillac Fairview purchased the Bay Store on Queen Street and is shifting the Sax Fifth Avenue that was supposed to be on Bluer …

Andrew la Fleur:

Right.

Riz Dhanji:

… down there …

Andrew la Fleur:

Right.

Riz Dhanji:

… and added Nordstrom in center.

Andrew la Fleur:

In center.

Riz Dhanji:

It shifted that whole luxury dynamic. So you’re seeing that Young Street Corridor now going to get some luxury retail the next five to six years that’s going to transform it again. That is where I see now this whole shift that used to be that Bloor Street shift is going to be that Young, Queen College down that Gerard location that’s going to be there.

Next five to ten years I think people will be blown away what they see. It’s going to be amazing.

Andrew la Fleur:

It’s very interesting. Yorkville I think will always be Yorkville and Bluer Street will have its cache, but it’s very interesting like you said to these high-end luxury brands looking at essentially young street addresses whereas it was only ten years ago. Like you said, this is not ancient history. This is just 10 years ago that young street was really like a blight on the city. Like you said you walked down the street, no one would even be there. Now, the streets are packed. There’s condo towers everywhere, and now the retailers following that development.

Riz Dhanji:

Yeah. It’s only going to get better. I think what’s going to happen is prices in the condominium market, the rental market along the Young Street line are going to get significantly more expensive, because lab prices are getting significantly more expensive.

Andrew la Fleur:

Right.

Riz Dhanji:

Anyone wouldn’t get in to approach it like a YC Condos. It’s well worth it.

Andrew la Fleur:

It’s great. Are you a condo investor yourself?

Riz Dhanji:

Yes, I buy in every building.

Andrew la Fleur:

You buy in every building. Great.

Riz Dhanji:

Yes.

Andrew la Fleur:

Could you tell us a little bit about what you have bought or what you own and what’s your investment strategy? What’s your thinking when you’re thinking about what to buy?

Riz Dhanji:

My first building, the first unit I bought was at City Place in 2002. I bought one of the first C Place buildings.

Andrew la Fleur:

You still own that unit? Just curious.

Riz Dhanji:

No. Actually, my wife walked in and cried when she saw the unit, so I had to sell it.

Andrew la Fleur:

Okay (laughs).

Riz Dhanji:

It wasn’t my choice, but she said, you have to sell. I don’t know. She didn’t like it. I end up selling it. I made some good money and I moved on. In College Park Phase 1, I bought a unit at $220 a foot and I sold it for $400 a foot when it was completed. Then I bought a unit in my college Broad Phase 2 Unit, a building. I bought it around $300 a foot and sold it at $500 a foot, although I should have held on to those, because the rental market is amazingly well, and I could have gotten more money on it, but you never think that. I bought my DNA 1 building same kind of prices and got 500. I think over the 68 condos I just bought in those buildings, that gave me enough down payment to be able to buy my own house, so I ended up selling them.

My next strategy though as I have two units at Aura, I have 2 units at DNA 3, I have a unit that I’m purchasing at YC. I think I want to create a rental portfolio. The reason I want to do that is because I see what the pension funds cross the US and in Canada are looking at. What they’re seeing is that they see that there’s not been any purpose-build rentals for the past 10 years in the city of Toronto. They’re seeing that the only rental market that’s happening is the individual investor. They’re looking there and they’re saying, “Wait a minute. This guy bought this unit at whatever dollar per foot. He’s getting rents between 3 to $4 a square foot. He’s making 67% returns. It makes absolute no sense why we’re not in this business.”

They only need returns of 4% because their getting their money at between ½ and 2%, and they’re looking for the upside in the future. There is a lot of builders today on pension funds that are looking at buying sites to do their own rentals, because they just think that the Toronto market is only getting stronger.

For me personally, I feel that … You know, I bought all these units. I know that the rentals going be well. Why don’t I have that cash comes in? It’s going to pay for my kids’ education. Continue increasing the value, pay down my principal, and at some point in the future decide to sell, or keep it, or hand it over to my kids. You cannot buy prime real-estate in downtown Toronto. In the next few years it’s going to get more expensive.

My strategy as a real-estate … I’ve got some money into stocks and bonds, but to be honest I just don’t do well at it. Real-estate’s made me great monies on continuing doing that.

Andrew la Fleur:

That’s great. What else can you tell us about coming out for yourself or for Canada the rest of this year, 2014? What’s untapped?

Riz Dhanji:

2014, we have a master a plan project that we’re working on in Montreal. We did our first project called the “Truly Canadians.” Montreal Canadians was a success. We’ve got five more towers that we’re hopefully working on that will continue that success.

Andrew la Fleur:

That will be launching as early as this year?

Riz Dhanji:

That could be as early as October, November on that. Then we’ve got another couple of sites that we’ve tied up here as well.

Andrew la Fleur:

In Toronto?

Riz Dhanji:

In Toronto.

Andrew la Fleur:

Okay.

Riz Dhanji:

One could possibly be launching this fall.

Andrew la Fleur:

Wow.

Riz Dhanji:

If not, then it would be early next year when we get to that.

Andrew la Fleur:

Any hints on location or can you not share it?

Riz Dhanji:

I can’t share the locations, but they’re all … One of them is …

Andrew la Fleur:

Central downtown.

Riz Dhanji:

One is Central downtown one is sort of a midtown location that we like as well. There’s lots of opportunities. Plus we’re working on stuff in Ottawa and Vancouver as well. We’re well-diversified across Canada.

Andrew la Fleur:

That’s great. One question I always like to ask if you’re going in your [inaudible 28:57] is, as somebody who gets interviewed a lot by the media and different newspapers and blogs and things, is there a question that no one has asked you yet, but that you wish that somebody would about the condo market or about yourself or about Canderel?

Riz Dhanji:

It’ a very good question. I think people don’t ask me too much about the overseas market in the sense of purchasing real-estate in Toronto. Their first perception is that most of the buyers that are buying these condos are foreign buyers. They go out and write that there’s thousands of these foreign buyers that don’t show up, and they’re not here, and they’re buying condos, but they don’t really ask is this really true, what is really driving it.

It’s not that … We don’t have that many overseas buyers in any of our projects. I would say between 5% and 8% are really an overseas purchaser that is not a resident of Canada that’s purchasing there. Most of the people that we have are local resident that are purchasing for either investment of purchasing for their own use. There’s no heated bubble in this foreign market that’s purchasing here.

Plus what I see is that our market is so regulated in the sense that the banks self-regulate this market. Financing for us today is very difficult to get in a real-estate condo, in a condo project. You need to be between 75% and 80%, and have 15% to 20% deposits in, and for the bank would even talk to you.

The banks are very strict. On the mortgage lending side if you have an overseas purchaser you’re not getting more than 35% to 40% of a mortgage, so they got to come up with 65% equity. When you go to the States today and put down 10% and get a 90% mortgage and I’m from Canada, and I can walk in their door. It’s a very strict regulated environment in Canada.

That’s why I don’t see this big bubble bursting. I don’t see any of these concerns that the media has. I only see a market that’s getting stronger and people that are qualified that are purchasing that are paying off their mortgage in a very strong environment that’s going to go over the future. I encourage people to get involved. You’re always too late if you don’t buy real-estate today. Everything in the markets in the future will always do well in the long run.

Andrew la Fleur:

That’s great. Riz, I appreciate your time today. Thank you so much for …

Riz Dhanji:

Thank you, Andrew.

Andrew la Fleur:

… sharing some great insights with us. Hopefully we can have you on the interview the program again sometime.

Riz Dhanji:

Thank very much, Andrew. I appreciate it.

Andrew la Fleur:

Okay. I hope you enjoyed that interview with Riz Dhanji. I always like talking to Riz about the condo market and condo investing. I can tell you that he’s very highly respected guy in the condo industry even amongst his competition. A lot of people have a good deal of respect for Riz and what he has to say about the market. He’s just really good at what he does.

Now, what Riz was describing about how Canderel designs and sells their buildings is what every condo investors should seek out when they’re looking to get into the condo market. He talked about buying a superior quality product with unique building features, and at a purchase price that leaves money on the table, as Riz puts it.

What’s really interesting is that I recorded this interview just before Riz made a big announcement that YC condos is actually partnering with Samsung for full home automation technology in their building, and you can do everything on your smart phone, anything from key-less entry to your unit, to lighting and temperature, and security controls, media controls all from your phone. It’s the first condo in Canada to do something like this.

To review, surprises Aura buyers with Madonna’s “Hard Candy Gym,” and then DNA 3 buyers were surprised with a [] in their building. Then now YC Condo byers are surprise with this Samsung Home Automation. It’s really interesting that in all three cases these major features that really differentiate the buildings were announced after everyone had already bought in the building.

Again, just an example from me that when you invest with the best developers that good things happen, and that your investment will do well, and it will appreciate. When you invest with the wrong developers, we’ll leave that for another podcast.

That’s enough for me. Once again, for all the show notes on this episode, head on over to TrueCondos.com/Riz. If you like the show, please go to iTunes on your computer. You can’t do it on your phone. You got to do it on your computer, and leave me a review in iTunes. Just go to iTunes, go to Podcast, search for True Condos, click “write a review.” They are greatly appreciated.

Okay. Thank you very much for listening, and we’ll talk to you son. Bye.