4 Reasons Why I’m Investing in Minto Oakvillage

Andrew la Fleur: On today’s episode I’m gonna share with you four reasons why I’m personally investing in a unit at Minto Oakvillage and why you should too. Stay tuned.

Speaker 2: Welcome to the True Condos Podcast with Andrew la Fleur. The place to get the truth on the Toronto condo market and condo investing in Toronto.

Andrew la Fleur: Hi there and welcome back to the show. Thanks again for tuning in as always to this podcast. It is the spring market, spring real estate market in Toronto, and things are very busy. The podcast might be a little bit erratic at this time of year depending on when you are listening to this, whether it is now, in April 2019, or in the future. Wherever you are, spring is always a busy time in the real estate market and this year’s no exception. Some very exciting and great new launches happening, great opportunities for condo and real estate investors out there, and one that I’m going to tell you about today is Minto Oakvillage. If you’re receiving my emails, which hopefully you are, my weekly email updates on the condo market, you probably have heard and seen a lot of information already from me about Minto Oakvillage.

But if you are not familiar and you’d like to get more familiar, I’ll just say from the outset, just make sure you send me an email, andrew@truecondos.com, or call me, text me, 416 371 2333, and we’ll be sure to get you all the info that you need for Minto Oakvillage. Also let you know about upcoming events in person, meetings where you can come and meet me and my team and representatives from Minto, learn more about the project, and actually reserve and purchase a unit if you are so interested. We’ll be having a few more events coming up. We’ve already had a few. The response has been tremendous. But again, andrew@truecondos.com or 416 371 2333. That’s if you are not receiving my emails. If you’re just a listener of the podcast, that’s important info for you. If you want to receive my emails, make sure you just sign up anywhere with your name and email at truecondos.com.

Okay. So, Minto Oakvillage. Very excited about this one. As I said about this one, I’m going to be personally investing here. I’m gonna tell you four reasons why that is. As the name would suggest, it’s a building by Minto Communities and it is in Oakville, in their community, a larger branded community called Oakvillage. So, let’s get into it. The first reason why I’m investing in this project, why I’m so excited about it are the prices. Pretty simple, the numbers. I’ve been talking about this for a couple of years now. Affordability is a huge issue in the market, not just for people looking to buy a home for themselves, but also for investors who are looking to get into the market and grow their portfolio. With the extreme and rapid run up in prices over the last three years, a lot of people who want to get into the market as investors are just simply priced out. They’re just simply not able to purchase, and obviously with downtown Toronto condos now the entry level point is around $600,000 for an entry level condo in downtown Toronto.

You need about $100,000 minimum for deposits to get into that market. So, what if you don’t have that kind of money? And a lot of people, maybe you listening, are in that boat. Well, the good news is it starts there with affordability here at Minto Oakvillage. You can into a great unit here for around 50 to $60,000 in deposits will get you a fantastic condo in this project. Units are starting in the low 300s. Low 300s is not a number that we have seen really anywhere in the GTA. Even most 905 projects now are starting at about 400,000 even at the base point and most 905 projects now are not including parking. You’re paying for that extra. Minto Oakvillage includes parking. Every unit includes parking, and you’re starting again in the low 300s. So, the prices are very affordable. You don’t need 100,000 bucks or more to get into an investment here, which is a great starting point.

The price per square foot is also almost ridiculous. The numbers that we’re seeing here, that we’re going to see here are absolutely fantastic. They’re up to 35% less than other projects currently selling in the 905 in other … and we’re not talking about downtown Toronto of course. Compared to downtown Toronto, they’re 50, 60, 70% less than projects in downtown Toronto, but just compared to other projects in the 905 that have been selling and selling very well, the prices are up to 35% less. But the good news is the rental rates are very similar to other 905. So, you’re purchasing at 35% less, but basically getting the same rents again. Again, very attractive pricing.

We, traditionally when we’re looking at condo investments, the number one thing that we’re looking for in price is can we buy something pre-construction that is equivalent to or less than current resale pricing. And that has been a tried and true formula that if you follow that and if you’re able to jump on opportunities like that, you do very, very well with your investments. The problem is that these types of opportunities, while never easy to find, they’re especially difficult to find in today’s market. Most pre-construction projects, if you look around, are priced probably 20 to 30% higher than equivalent resale. Most projects are like that, and there’s a number of reasons for that, land prices, construction cost, development charges, taxes, levies, a whole slew of options, the removal of the OMB, there’s a whole, you know, we could spend an hour talking about why pre-construction prices are the way they are but this is the reality. Pre-construction prices are for the, if you look on a macro level, all pre-construction, the entire market generally right now is priced at a very large premium over the resale market.

So, to find an opportunity like this where the prices at Minto Oakvillage pre-construction are basically equivalent to current resale pricing in the area, it’s just a tremendous no-brainer type of investment to get into and it’s extremely hard to find something like that. So, that’s the first thing. It starts with the prices. The second reason why this is an exciting opportunity that I’m looking forward to getting into myself is the rental market. The rental market in Oakville might surprise you. It certainly has surprised me as I’ve looked at it and studied it more and more leading up to making this investment. One bedrooms in the current area, Minto Oakvillage, right now going for 1850 a month approximately. Two bedroom, two baths going for approximately 2400 a month. These are very high numbers. They are again, obviously less than downtown Toronto but they’re not that much less, and the prices again are, you’re paying half or even less than half of what you would pay for something equivalent downtown Toronto.

The rents are not half. The rents are not less than half. They are actually not too far off downtown Toronto. When you compare to other 905 projects, again, the prices are 25, 30, 35% less than other 905 projects, but the rental rates are basically in line with these other areas of the 905 that are selling. And it’s interesting is these units are renting quickly. The rental market’s very strong. These condos that I’m quoting you that are renting for these numbers are renting very quick. They’re not sitting on the market for long, you know, five, 10 days on the market often many of these units and they’re being snapped up. There’s not a lot of supply. There’s not a lot of product in this area and so these are all good things for us as investors. So, you have, basically this combination of low prices with relatively high rents and you’re doing the math and quickly you discover that you’re going to get cash flow. That’s right. Cash flow does still exist in this market. You just have to know where to find it. And where there is cash flow there will be appreciation. That’s another rule of thumb that we’ve seen and learned over the years in the condo market.

Wherever there’s cash flow there will be appreciation in the future. What I mean by that is investors, investor money, it’s like water, it always finds its level. It’s money is out there looking for cash flow and where there is cash flow, the money will go. And as the money flows into that particular area, that increase in demand will increase prices until the point where that cash flow is no longer there and present it tends to disappear over time and then that money will flow somewhere else where there’s cash flow and the prices rise there and the cycle continues and it goes in waves. So, there is cash flow here right now and so where there’s cash flow, we do anticipate and we do expect there to be appreciation as well as more and more investors wake that you can invest here and you can make money and you can actually get cash flow.

Compared to again most pre-construction projects out there right now on paper not giving you cash flow, certainly nothing like it was, again, four or five years ago where there was plenty of opportunities downtown Toronto to find some cash flow. Right now finding cash flow is basically an impossible task. Now, mind you if rental rates continue to rise at a dramatic pace over the next four to five years, there may be cash flow on some of these units, but on paper right now there’s not. The beauty of Oakville on paper right now there’s cash flow and likely by the time the building finishes, as rents increase, there will be even more cash flow which is very exciting as an investor.

The third reason why I’m excited about this opportunity in investing here is, let’s talk about Oakville itself. Oakville is a very unique municipality community city in the GTA whether you realize it or not. If you’re familiar with Oakville, if you’ve lived there or if you live there now, you probably already know what I’m talking about, if you’ve spent time there, Oakville is the apple if you will of GTA municipalities. It’s the premium brand. It is known not just throughout the GTA but across Canada and in some circles around the world the sort of blue chip, gold star suburb of Toronto. That has been the case for a long time and that still is the case. Average real estate prices in Oakville are among the highest in the GTA if you look across all the municipalities of the GTA average prices there right now is about a million dollars so again, if you can purchase a condo for half that or less than half that, the average price in Oakville just based on that fact alone, you know you’re gonna do well in the long run.

Some of the most expensive homes in Canada are in Oakville and currently the most expensive listing in Canada is in Oakville at 59 million dollars, a massive mansion down on the lake. It’s just really nice in Oakville. I don’t know what to tell you. Go there, spend some time, drive around, check out the neighborhoods. It’s a great place to live, it’s a great place to raise a family. More and more people who don’t even have families, single people, couples without kids, are going to Oakville just for quality of life, and it’s just a nice place to live, easy to get around, amazing restaurants. It’s urban enough, but not too crowded, as many other areas in the 905 have become in recent years. It’s close enough to downtown. It’s close to the lake. Highway access. It really has all the components that you want, an amazing community. It really does speak for itself.

You look at ratings and rankings of course, it’s Oakville’s always up there. 2018, MoneySense Magazine best place to live. Number one place to live in Canada was Oakville. Best places to retire in Canada, Oakville’s always on those lists as well. Downsizers love Oakville, retirees love Oakville. It’s an aspirational community where many people in the GTA sort of look forward to the day where they can afford or aspire to move from wherever they are and move to Oakville. Not many places in the GTA can have that claim to fame and carry that sort of brand. Best schools of course, many, many of the best schools. Not one or two, but many of the best schools in Ontario are all located in Oakville. Both private and public schools equally. Access to downtown. A lot of commuters obviously live in Oakville. What’s great, there is an express train from the GO Train in Oakville to Union. It’s only 33 minutes or so, 30 minutes, you are from Oakville to Union Station.

I mean, you live in Toronto on the subway line, it can take you 45, 50 minutes, an hour to get to Union Station on the subway. In Oakville, you can get there in half an hour via the popular express train. 80% of Oakville has a post-secondary degree. It’s a very highly educated community with a very high average income. This might shock you. The average household income in Oakville is $170,000. Average household income is $170,000 in Oakville. Wow. I was shocked myself when I saw that statistic. That’s up. So, 2018 170,000. 2011, it was only $143,000. So, while wages and income growth in most parts of this country in most areas in pretty flat over the last decade, wages, average income in Oakville is up huge over the last few years and again, follow the money as an investor. Where the money is going, that’s where good place generally is to invest. That’s where there’s gonna be good upside and future potential. We’re definitely seeing that in Oakville. There’s lots of money in Oakville.

Average, by comparison, city of Toronto average household income’s around 80k or so, depending on how you look at it. I’ve seen some numbers average or median up to 100k, but Oakville, 170k. I mean, it’s way different sort of a vibe in Oakville compared to most places in the GTA. So, that’s the third reason. Number four, why I’m excited about this project is the builder, Minto. With Minto, it’s all about buying quality, and buying from a trusted builder with decades and decades of experience. Minto’s been around for 60 plus years. Lot of canceled condo projects obviously in the news in the GTA over the last year or two, a lot of builders in over their heads and canceling projects for a number of different reasons. More and more buyers are sort of gravitating and moving towards quality builders and looking, and there’s sort of a flight to quality, if you will, happening in the condo market and obviously when you’re buying from a builder like Minto, that’s exactly what you’re getting. You’re getting that quality, you’re getting that experience, you can trust. You can trust and rest easy you’re buying from a great builder.

The building is zoned, it’s approved, they’re pricing it to sell, they want to start construction this year, they’re not messing around. It’s just a great experience buying from a builder like Minto. I personally bought from at Minto Westside, Front and Bathurst, and perhaps you have as well listening. A lot of my clients, many, many, many of my clients purchased in this project. I was the number one selling real estate agent in that project. Minto gave us some awards and stuff which was great. So, that was four or five years ago. Now, just this past week, I had my first predelivery inspection on actually my brother’s unit in the building, and the building is obviously under construction, it’s a construction zone, it’s a mess, the unit itself though is absolutely fantastic.

Minto is just on the ball. When you work with a big trusted experienced builder like that, you really get a feel for it when you’re taking delivery, possession, occupancy and closing of your condo after waiting, the difference is that’s when you really notice the difference between the big builders who know what they’re doing and who’ve got decades of experience, who’ve built thousands of units versus the smaller builders who don’t have this staff support. They’re still figuring stuff out. They’re often rushing everything at the last second. You go into the units and they’re never really in good condition or quite done. There’s a long list of things still to do.

Not at all with Minto. You know again, similar to other big builders that I’ve bought from as well. You go into the suite, doing your inspection, you’re trying to find things wrong with the unit for them to fix, and you’re in there for half an hour and you just can’t find anything. There’s nothing, I mean, a couple of little paint touch-ups on the wall is about all you can find, and that’s great, and that’s what you want, and that’s what you always hope for as an investor, and that’s what you get when you buy from Minto. So, very excited to be buying from them again. So, those are the four reasons why I’m excited about this. Why I’m in, and hopefully why you should be too.

Now, I want to shift gears and talk about if you’re thinking about, you’re probably at this point, if you’re still listening, you are thinking about getting into this investment, I want to speak specifically to you if you are a brand new investor, if you haven’t done this before in the pre-construction market. I want to tell you a couple of big mistakes that you want to avoid. A couple of mistakes to avoid for the new condo investor.

Number one, the biggest thing is that new rookie investors mistake that they make, I see is, when it comes to these opportunities is they get too focused on one singular unit. They get too focused on getting one singular unit. Usually that unit is the so-called starting from unit. On every billboard, every marketing campaign for a project, there’s always the starting from price. And so, it’s the lowest price in the building, it’s the teaser, it’s the one that gets everybody all excited, and it’s obviously a very low number compared to other things out there generally speaking, so you get a … the rookie investor just often, I just see this so many times, they just get obsessed and laser focused on that one unit and they come to me, say, “Yeah, Andrew, I want to get a unit in this project. I want the cheapest unit in the building.” “Okay, that’s great. We will try to do that. What else are you interested in?” “Nothing.” “Okay. So, you want the cheapest unit in the building, you’ve never bought a condo before, and you’re thinking you’re just gonna walk in and buy it and nobody else has thought of that before you, and that unit is going to be available for you to just take?”

Yeah, it doesn’t work like that. There’s 1000 people out there who would gladly buy that unit. How many of those? There’s not 1000 of those units available. It is a one off unit. Maybe there’s two of them. And so the mistake that rookie investors make is they’re thinking that I’m only going to win this game of condo investing if I get that unit. Everyone else who buys in this building is a loser. Only the people who get, only the one person who gets that one unit, the starting from unit is a winner and everyone else loses, so give me that or nothing. And that is the exact wrong mentality that you want to have as an investor. What experienced investors know and how they think and play the game is they understand that the goal is not to get that one unit.

The goal of condo investing in pre-construction is to get a good unit at the insider platinum VVIP, whatever you want to call it, price. Release, get a good unit, I didn’t say the starting from unit, I didn’t specify on any unit, I just said get a good unit, any good unit at the investor platinum VIP release and that is how you win the game. Okay? So, let me bring it, tell you a concrete example, I mean going back to Minto Westside again four or five years ago. Back in the day they had one bedrooms starting from say 249, under 250,000. Great price at the time, obviously right now you can’t even wrap your head around how cheap that is, but at the time it was an attractive price. So many people, rookie investors that came in and I talked to and say, “Okay, Andrew, yeah, I want that unit. I want the one bedroom for 249. Give it to me. I’m ready to go.” “Okay, well that unit is gone. It’s not available. It’s sold. There was only one of them and it’s gone.”

“Oh, well that’s not good. What else you got?” “Well,” I say, “here’s another one bedroom unit. It’s a slightly better unit. It’s a slightly bigger unit. And therefore it’s slightly more expensive. Let’s say, you know, it’s 275,000 instead of 249. Would you like this one? It’s also gonna cash flow. It’s also gonna be a great unit like the other one. It’s a little bit better so it’s a little bit more expensive. How about this one?” “No. No, I don’t want it. I’m out of here. Forget it.” And so, many rookies at the time walked away and got nothing. The experienced, successful investors that I worked with, and there were many, many, many of them, as I said, who bought in the building, they came in and they said the same thing, you know, “Hey, got any of those 249s left?” “No, sorry.” “Yeah, I didn’t think so. What else you got?” “Well here’s one. It’s a little bit bigger, little bit better. It’s 275. It’s also gonna be good for rental cash flow. How about this one?” “Yeah, sure. Give it to me.”

And those investors jumped onto those units for a little bit more and what happened? Well, they bought it. They bought it the first release, so they made probably $10,000 in one day right away. Boom. The moment they signed because prices went up the next day. And over the last four years, they probably made about $200,000 as the property of course has appreciated like crazy over the last four years. So, the rookies came in, they wanted that one unicorn type unit. They didn’t get it so they walked away. They got nothing. The experienced, successful investors came in, they made $10,000 in a day and they made $200,000 over four years. They weren’t obsessed and hung up about a slight difference in price, and that’s how you win the game. And that’s what seasoned investors know and understand, and that’s what rookies unfortunately have to often learn the hard way.

So, if you’re listening to this hopefully this will help you avoid having to learn the hard way, and understand how the game is played, and how the game is won. Now, also remember a small difference in price that you’re paying of say, 25, $50,000, whatever that number is, if it’s a slight bump in the price, more from that so-called starting from unit that so many people get focused on and obsessed with getting, you pay an extra 25, $50,000 in the price, that is only an extra five or $10,000 roughly on the deposit. So, just a little bit more money, five or $10,000 is not a lot of extra money to put in your deposits, to put it to work for three, four years as the condo buildings are being built out. And you’re getting in on day one, you’re making money right away, and you’re making even more money over the long term, and you’ve just had to put down a slightly larger deposit of just a few thousand dollars.

So, that is the number one mistake I want to share with you. The number two mistake that rookie investors often make, and with these new condo launches is that they wait until all of the information is released before making any decisions, before taking any action. Waiting for everything to come out, all the information to be in their hands right before them before they take any action. So, you gotta understand condo selling 101, the best units in any project go first and those units are almost pre-sold before they’re even released. So, the way that happens is that the agents like me talk to their top investor clients and they get those investor clients ready and waiting to go at the moment that those prices and floor plans are released, those investor clients are ready to jump on those best units and take them and claim them for themselves right away.

So, that is all about preparation and understanding how the game is played. If you’ve never done this before, again, you may not understand how it works, and that’s what we’re hopefully helping you learn and understand today. So, again let’s contrast how the rookie mentality versus the experienced, successful investor mentality when it comes to this. The rookies will say something like this, “Andrew, this project looks interesting, it sounds interesting, I might want to do this. I’ll take a look and decide once all the information is out. So, Andrew, let me know when all the information is out. We’ll take a look. We’ll sit down. We’ll talk about it. I’ll look, I’ll talk to my uncle who’s in real estate. I’ll talk to my financial planner a week after that. And then my mortgage broker.”

Things move very quickly. You don’t have that much time if you want to play this game and win. You do have to understand that the best units are going quickly, they’re going to the seasoned, successful investors who’ve done this many times before, and they understand how the game is played, and they understand it’s getting a good unit at day one pricing. Boom. Jump on it and go for it. Don’t get focused on one unit. So the experienced, successful investor by contrast says, “Is this a good opportunity?” “Yes.” “Okay. Then, Andrew, sign me up. Sign me up for a good unit in this approximate price range. Whatever it is. Andrew, I’m not, don’t zero me in on just one exact unit. I’m looking for something in this range. I’m looking for this type of unit. Facing east, west, whatever, I don’t care. Just get me something good in this approximate price range and I’m good to go.”

Okay. So that, again, if you’re a rookie, you’re probably not able to do that and say that right now and that’s okay. You need to learn and build confidence over time. But I’m just letting you know that is how the seasoned, successful investor thinks and that is why the best units go right away because these guys are, and gals are ready to act and jump on stuff immediately without having all the information. They get enough information to make a decision is this gonna be a good one or not. How do the floor plans roughly look? How does the pricing roughly look? How’s the deposit structure roughly gonna be? Okay. That’s enough information for me to say yes, I’m in. This is the price range I’m looking for. Get me a good unit and I’m good to go. Boom. And that’s how the game is played. And so, those are the two big mistakes that I want to help you, if you’re a new investor, to avoid.

So again, recapping, don’t get too focused on one particular unit, and number two, don’t wait until all the information is out and available before taking action, especially with these insider sales events. You gotta take action and you gotta have these conversations with me before all the information is released. So, I want to conclude this podcast by answering the question which, if you’re still listening to this point, you are probably very interested in this project and you’re wondering, “Okay Andrew. What unit should I buy? What, you know, in this project, you know, I’ve got the info from you at this point. I’ve listened to the podcast. I get it. I’m on board. I like it. But what should I buy? I mean, there’s a lot of choices in this project. You have a condo building and you also have the stacked town homes. So, two different options with this release. What should I buy?” What should you buy? Well, overall a blanket statement is it’s very hard to go wrong with any unit in this project. They have priced, they are going to be pricing things very, very aggressively across the board, whatever the unit is, so it’s hard to go wrong in general with anything in the project.

But I would say this in terms of what to focus on, what to buy. Number one, any townhouse. Any townhouse, you’re gonna do very, very well with. Why? Well, because first of all the deposit structure on the townhouses is only 50,000 for the cheaper units and 60,000 for the more expensive units. 50 or 60,000 spread out over nine months works out to roughly a 10% deposit or less. For some of the units, the deposit’s only like 9%, so for a 9% deposit on something that’s not going to be built for three years, you’re basically paying current resale prices. It’s a no-brainer. It is absolutely a no-brainer to get any townhouse unit and you’re gonna do well and those things are gonna fly out the door.

And the second tip, what you should buy, advice I’d have for you, basically when it comes to the condo tower, any unit, the condo tower units are 20%, traditional 20% deposit. But obviously the price points of these, most of the condo tower, are a lot lower than the townhouse units so the actual amount of deposit that you’re putting up is still a relatively low number, right, especially compared to anything else in the GTA right now. So, when it comes to the condo tower my advice would be basically any unit in the tower that is going to produce cash flow is a good buy. You should buy any unit in the tower that looks like on a rental basis, it’s going to be covering its costs on a cash flow, covering its costs with a traditional 20% down and a 30 year amortization. If you get one of those units then you are, again, going to do very, very well with this investment.

It’s very hard to find something like that anywhere in the GTA, so if you can get one, great. So, that pretty much means most of the condo tower qualifies except for a few units. I’d be happy to talk to you further about that in more detail and break things down for you if you are at that point where you’re just trying to pick between one or the other. So, there you have it folks. That is the four reasons why I’m excited about this project, Minto Oakvillage. Why I’m investing there myself. And I hope by now that you are also on board with me and coming into this investment too. So again, if you want to get more information, make sure you’re getting my weekly emails, updates first and foremost, you will not miss anything if you’re getting those emails from me. Sign up anywhere at truecondos.com with your name and email to make sure you’re getting my weekly emails with new information as it comes out on this and other investments, opportunities to meet me in person to discuss this, and other investments. That’s where you’re gonna hear about it always, from the emails.

But, short of that, make sure you do reach out to me personally, andrew@truecondos.com, call me 416 371 2333 and we’ll talk more. Okay. Until next time. Hope you enjoyed this episode. Hope you find value in it. Share it with somebody that you know if you did. And happy investing. Talk to you soon.

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