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Investment and Wealth Basics: Real Estate edition

Investment and Wealth Basics: Real Estate edition

Congratulations! If you’re reading this, chances are, you are currently saving enough money to start thinking about investments that work for you. Putting your money in the right place can help you get everything you’ve ever wanted: A beautiful house, early retirement, complete financial security for your family, and much more. You can either save your money or invest it in assets that you think will generate great returns. The latter, of course, is subject to several market risks but is saving as safe as it looks? Not quite. Dormant cash is prone to risks and it is nearly impossible for it to generate wealth. In the long run, the little interest that it could generate sitting in your bank account can cost you more money than it makes.

Why invest at all?

If the only way you can expect to earn from your savings is by putting them in a bank account -then we are happy that you are reading this. Let’s say you put $10,000 in a bank account that offers an annual interest of 3%(if at all!). By the end of the first year, you can expect to have $10,300. However, as per the current inflation rate (3.7%), something priced at $10,000 right today would cost $10,370 in a year, this means that you essentially earned $300 on your savings but still lost on purchasing power. This simple comparison highlights an extremely important relationship between inflation rates and interest rates offered by banks.

Source – Statista

Inflation eating into important savings like pension/retirement funds, college funds, emergency healthcare funds, etc., is a common occurrence. Before you realize it, you end up with less buying power than what you started with, thereby putting your financial future in jeopardy. However, Good investments ensure financial security through wealth creation, which in turn gives you the freedom to live your life to the fullest.

 

Investing in Canada

Simply put, Canada’s proximity to the U.S and numerous free trade agreements give Canada substantial power in world trade. Some of the largest Fortune 500 companies based out of the U.S (and even Europe, in some cases) have been choosing Canadian cities as ground zero for establishing their R&D hubs. With industry and immigration both converging, it is no wonder that real estate has seen unprecedented growth over the past few years.

As for the Canadian economy, it is expected to fully recover from the Covid slump within the next few months. The Government’s decision to lower the threshold for Foreign Direct Investments in 2021 has also massively helped this recovery. With a rock-solid economy and booming real estate market, Canada currently presents an incredible market opportunity for young investors.

Canada Investment Options

 

1. Buying a house

 

In a booming economy, real estate is an incredibly fruitful asset in terms of long-term investments and rent is one of the oldest, most trusted methods of generating passive income. Even if you aren’t looking for a rental property for investment, you can always look for a second home that would appreciate in value over time.  Almost every Real Estate option turns out to be a great asset if the neighbourhood and setting are correct.

2. REITs

REITs or Real Estate Investment Trusts are also a great option to explore as they allow you to invest in real estate without having to purchase different plots/houses. REITs are generally considered to be low-risk, high-yield investment options but these are long-term investment options. Any money you put in a REIT would have to be money you’re okay with not seeing for at least the next five years.  Another major drawback is that REITs give you no power to choose where you would like to invest – this lack of transparency is a major drawback.  The different types of REITs you can invest in are :

  • Equity REITs: These are funds that own and manage income-producing real estate. A part of the profits is naturally funneled back to the shareholders, who are free to cash out or reinvest it. Contrary to popular belief, equity REITs make most of their money through rent and not reselling acquired properties.
  • Mortgage REITs: As the name suggests, mortgage REITs lend money to real estate stakeholders directly (through loans) or indirectly by investing in mortgage-backed securities. (If that term sounds familiar, it’s because you have most probably come across it before while reading about the USA’s 2008 housing crisis!). These REITs mostly earn through net interest margin on hundreds of loans, which means they’re directly dependent on interest rates.
  • Hybrid REITs: These REITs (usually the largest) are simply funds that use both equity and mortgage-backed methods to make money. Hybrid REITs are considered to be the safest because of their diversified nature.
Source: https://static.seekingalpha.com/uploads/2020/8/11/1723581-1597191897564591_origin.png

 

Investing as a beginner

As a beginner, it can be challenging to navigate the complex world of real estate investment. The legal and technical jargon attached to most Real Estate investment options discourages investors from exploring them. Further, it takes up a sizable amount of your time and money to regularly manage these investments. But there‌ ‌is a better‌ ‌way‌ ‌to‌ ‌invest‌ ‌in‌ ‌property‌ ‌without‌ ‌taking‌ ‌out‌ ‌a‌ ‌huge‌ ‌mortgage‌ ‌fee‌, ‌paying‌ ‌a‌ ‌fee‌ ‌to‌ ‌the‌ ‌realtor or locking it away in a REIT.‌ ‌ With Fractional Real Estate Investing you are on your way to saving enough for buying your own home sooner than you thought and that too with no entry barrier and no hassle of maintenance or tenants – that is what BuyProperly does!

Fractional Real Estate Investment

BuyProperly provides the benefits of real estate investments’ high returns for everyday investors, without any barriers, pre-approval or hassle. They turn high-yield real estate into easy-to-invest opportunities, giving you the chance to grow your wealth in a quick and easy manner.

Unlike the traditional model of real estate investment, with BuyProperly you know that you are owning a slice of a high-yield property as our proprietary AI analyzes hundreds of factors and evaluates over 500 million data points to identify trends and uncover high-value deals to generate the highest returns for you. Also, we purchase and manage the real estate assets for you so you enjoy being a landlord without the usual headaches that tenants and maintenance bring. We also help eliminate the hassle that landlords often face in managing a property.  Contact info@buyproperly.com to know more about their best-in-class platform.

in Editorial, Thought Leadership Posted by wpengine
1 West Hamilton Ontario

Imagine Joining This Reliable New Investment Opportunity Today For Free, Thanks To Forge & Foster

Imagine Joining This Reliable New Investment Opportunity Today For Free, Thanks To Forge & Foster

Soaring real estate prices have locked many Canadians out of the housing market — and the wealth gains that come with ownership.

“For too long, real estate has been behind closed doors and not accessible to everyone,” says Joe Accardi, Partner & CEO of Forge & Foster. “We want to bring real estate to all Canadians. addy is something that we’re really excited about.”

What is addy?

addy is a Vancouver-based start-up offering crowdfunded real estate investments to help all Canadians profit from the housing market.

“We’re investing in 150 addy memberships so that we can bring real estate to everyone,” says Accardi.

Since 2018, addy has been buying institutional-grade commercial real estate properties that investors can buy passive fractional ownership shares of for as low as $1 or as much as $1,500.

“We’re investing in 150 addy memberships so that we can bring real estate to everyone,” says Accardi.

That’s right: thanks to Forge & Foster, you can now skip the $25 membership fee. But only 150 of these memberships are available and they’re going fast, so act now!

How Does addy Work?

addy identifies investment opportunities and puts them through due diligence by looking at financial statements, then gets approval from an investment committee to ensure the property makes sense economically.

“There are no fees on transactions, acquisitions, or withdrawals because the goal of the platform is accessibility,” addy co-founder Stephen Jagger told The Globe and Mail.

“There’s no opportunity where we would ever win on a property and (investors) would lose,” Jagger said. “One of our core values of business is win-win or no deal so we are completely aligned with our crowd.”

Once addy acquires a property, it divides the investment into equal increments of $1. For example, a $500,000 property would be divided into 500,000 units.

Then investors can invest as little as $1 or as much as $1,500 in any building. Investments are locked in for various lengths of time depending on the building.

It’s different from a real estate investment trust (REIT) because investors know exactly what properties they have invested in.

1 West Hamilton Ontario
This is 1 West Ave. S. in Hamilton, Ontario. It’s a 3 storey mixed-use brick and beam office and retail space in the heart of downtown. It features a stunning mural called “Raise.” Through addy, this property sold out to 650+ Canadians. Shares, which were reseved exclusively for addy members, sold out in just 13 hours. Get your addy membership now for free, thanks to Forge & Foster.

What are addy‘s main benefits?

    • No fees — thanks to Forge & Foster waving the $25 membership fee
    • Pride of ownership
    • No need to qualify for a mortgage
    • No downpayment required
    • None of the pain of managing a property
    • No closing costs
    • No need to find tenants or maintain the property
    • You’ll get a share of rent and gains on the property when it’s sold

“Hamilton is a very fast, exciting, electric city that is primed to have an amazing decade,” says Accardi.

Some of the fast-growing asset classes Forge & Foster are excited about include:

      1. The film industry
      2. Tiny cottages and tiny homes
      3. Biotech

“Real estate is a top asset class, but most people can’t afford to invest in it,” addy CEO Michael Stephenson told the Toronto Star. “This is a way to make housing investments accessible to everyone.”

“We believe everyone should have the opportunity to own property through access to real estate investing at any amount, regardless of income, age, or other conflicts,” Stephenson told Yahoo Finance Canada.

“Join addy. Take a look at their projects. You can invest in a project that you’re excited about,” says Accardi.

What are the experts saying?

“I feel that real estate crowdfunding can be a viable tool for those who want to invest in real estate but are restricted due to a lack of money or credit,” says Mark Ting, CBC’s finance columnist, who is investing in addy with his children.

“Small investments in multiple projects add up over time. That makes it appealing for young people who want to get in the habit of investing — which now can be done in real estate for as little as the cost of a daily cup of coffee,” Ting says.

“A crowdfunded model comes with transparency and tangibility,” Tina Tehranchian, an Assante Capital Management Ltd. senior wealth adviser told the Globe and Mail. “You can drive by the property and boast to your friends that you have a share of ownership of this property.”

“Join addy. Take a look at their projects. You can invest in a project that you’re excited about,” says Accardi.

Behold 29 Harriet St. in Hamilton, Ontario. It’s a 21,200 square foot light industrial and office property with a stunning new bald eagle mural and huge potential. Through addy, this property sold out to 400+ Canadians. Shares, which were received exclusively for addy members, sold out in just 63 minutes! Get your addy membership today for free, thanks to Forge & Foster.

How to join addy

Sign up for addy now and skip the $25 fee, thanks to Forge & Foster.

Join Addy Now For Free Thanks to Forge & Foster
Join addy Now For Free, Thanks to Forge & Foster

(Psst: If you’re a good pal, you’ll tell your friends about addy so that they can grow their wealth, too!)

in Editorial, Thought Leadership Posted by wpengine
The Walker Press Rendering

Presenting the Walker Press

Forge & Foster Brings an Exciting Development to Canada’s Prettiest Town

We are very excited to be launching an exciting new development in “Canada’s prettiest town,” The Walker Press located in Paris, Ontario.

With our eye for identifying properties with distinct character and a unique history, Forge & Foster acquired the exquisite Walker Press building in 2020. The Walker Press will be restored into a multi-use, commercial facility that will richly contribute to the growing community of culinary and craft-goods experiences in experience in Paris.

Located on 3 Yeo street, with the oldest portion of the structure – the Maxwell wing – built in 1872, The Walker Press (est. 1910) moved into the Penman Wing in 1915. Expanding into the Maxwell wing in 1920, connecting the two buildings in the process, they operated for over 60 years, printing everything from gift coupons to royal portraits.

With its proximity to the historic downtown district of Paris, surrounded by thriving densification projects, and rooted in a destination that is only a short drive from the urban centres of Toronto, Hamilton, Kitchener-Waterloo and Cambridge, The Walker Press is the perfect location for multiple emerging businesses ranging from culinary and retail, to office and light-industrial.

“Paris is a beautifully historic town and an incredible destination, we are thrilled to play a role in reviving this property and writing it’s next chapter.”

Said Ben Ames, Partner and CIO.

“The Walker Press will be an idyllic and innovative setting for a new generation of Paris-based businesses. A perfect setting for emerging industries and employment opportunities in ‘Canada’s prettiest town.’”

Said Joe Accardi, Partner and CEO.

Forge & Foster greatly acknowledges and thanks The Paris Museum & Historical Society for all their support in understanding the background of The Walker Press. For more information, please see the accompanying materials. 

in Project Spotlight, Thought Leadership Posted by Forge & Foster Team

Hamilton approves rezoning for 769 unit development at Corktown Plaza

This week witnessed a higher than average volume of transactions take place including a mix of all asset classes. The most expensive transaction this week was for 50 acres of agricultural land, located near Binbrook, in Hamilton for $17,000,000 or $337,435/acre. This could either indicate a future industrial development or speculative future residential development given the existing zoning. Other notable transactions include 117 John St N, which looks to be part of an assembly for the 41 Wilson St acquisition by First Avenue Investment Counsel and Broccolini Construction’s purchase of 10 acres in Cambridge, further cementing their foothold in Southern Ontario. In the news, the city of Hamilton has approved a rezoning application for a  proposed 769 unit, 27, 14 & 8 storey development by Slate Asset Management. Feel free to reach out with any questions regarding the GHA transactions or news.

Update brought to you by: Alex Manojlovich, Forge & Foster Investment Management

 

Please click the “GHA Sales Transaction Database” link below to view the most recent transaction activity.

GHA Sales Transaction Database
Corktown Plaza rezoned for proposed 27 storey development

Hamilton Store Fixtures building approved to be 13 storey condo

Emblem Development’s 1 Jarvis

Nokia & City of Hamilton: Smart City Innovations

Creativity and collaboration meet at Millworks

Fed’s, Province and LiUNA close to aligning on Hamilton LRT deal

Ontario plans to expand Greenbelt to include Paris, Galt Moraine and others

Toronto condos including co-working spaces

How Canada’s real estate market defied expectations

Jobs lost in 2020 hit workers with wages below Canadian average 

Canada’s life sciences sector needs more lab space

Altus Group National State of the Market 

Home renovation boom sends lumber prices to record price

Toronto set to be home to e-sports performance venue by 2025

With demise of mobile home parks in Kelowna, affordable home ownership slips away for many 

If you’re looking to keep your finger on the pulse of all Hamilton residential and commercial real estate projects and trends, subscribe to Forge & Foster’s free weekly newsletter here!

in Editorial, Thought Leadership Posted by wpengine

Hollywood in Hamilton: Massive movie studio planned for West Harbour will open first building in February

By Matthew Van DongenSpectator Reporter

Hamilton’s west harbour film studio will begin making movie magic in February — to start, inside one of the city’s oldest manufacturing sites.

Aeon Studio Group trumpeted plans back in June 2019 to build a 14-acre film and TV production hub paired with a “live-work” development atop city-owned lands that were originally bulldozed for a failed stadium plan.

The COVID pandemic slowed environmental studies on the properties bounded by Queen, Tiffany and Barton streets and the land remains in taxpayer hands. In fact, the city even bought another area parcel for $3.5 million at the height of the first pandemic lockdown in April.

But the film consortium announced Wednesday that the “first decisive step” toward the Hollywood North dream — now called Aeon Bayfront Studios — will open for business Feb. 1 across the street from its planned mixed-use development, in the current home of AVL Manufacturing at 243 Queen St. N.

The size of the planned sound stage and studio space will be “a first of its kind for Hamilton,” said Aeon partner Jeff Anders, pointing to the 80,000-square-foot building’s 50-foot-tall ceilings and dedicated paint shop. “We are planting a big flag to turn (international) industry attention to this city.”

The Queen Street North factory recently churned out modified shipping containers for use as mobile COVID medical triage units. AVL head Vince DiCristofaro told The Spectator he is relocating his Queen Street operations and 100 workers to another factory on Sherman Avenue.

“We’re staying in Hamilton and more employment is moving in here, so it’s a real win-win for the city,” said DiCristofaro, who plans to sell the property to Aeon and its local real estate partner, Forge and Foster. The 7.5-acre property has had a factory on it since Great Western Railway rerolled worn out rails there in 1861. Now, it will be making movies.

Hamilton hands out 800 filming permits a year — including to well-known productions like “The Umbrella Academy” — but has been criticized for a lack of stage and postproduction space. The city markets itself as the third-largest “film cluster” in Canada, estimating 9,000 people worked in the industry.

AEON Studio Group partner Mike Bruce said, "There are only a few facilities in southern Ontario that can cater to productions requiring large ... stages with high ceilings and significant outdoor space,"

At full build-out, the film hub is supposed to add 1,000-plus new jobs. Aeon partner Mike Bruce said more than 100 people could work out of the first building at any one time. Aeon also plans to offer a film shoot location service for Hamilton.

The building still has to be retrofitted, but Ander said building tours for prospective tenants will begin soon.

Anders said work also continues on a purchase and development agreement with the city for the 14 acres of barren land across the road. No timeline or purchase price has been made public, so far.

Coun. Jason Farr expressed confidence Wednesday the new studio building shows the consortium is committed to following through on the larger west harbour development. “I think success breeds success,” he said Wednesday. “Hopefully this provides the financial impetus to grow and expand across the street.”

Hamilton originally bought 20 homes and businesses a decade ago in the Barton-Tiffany block for a planned West Harbour football stadium that ended up being built elsewhere. Over time, taxpayers have spent around $13 million on those and more recent land purchases in the area.

Matthew Van Dongen is a Hamilton-based reporter covering transportation for The Spectator. Reach him via email: mvandongen@thespec.com

in Editorial, Thought Leadership Posted by wpengine
Construction

Residential highrise market looking up in downtown Hamilton

A survey of residential construction in downtown Hamilton published this month reveals a very healthy market for highrises 20 storeys and up in the sector.

Research by commercial real estate investment firm Forge and Foster determined there are six projects of that height currently under construction in and near the downtown and 10 more either approved, in permitting or in pre-construction.

Forge and Foster is not involved in the residential new-build market, Manojlovich explained, rather it specializes in value-added projects — identifying neglected low-rise buildings and securing the financing needed for rebuilds. It is one of the few commercial real estate investment firms based in Hamilton, so it keeps informed on trends in all sectors, he said.“Everyone has their opinion on density and heights, but it is encouraging to see, especially in the downtown core which has been an underutilized area for quite some time. It is fantastic to see the growth,” commented Alex Manojlovich, an associate involved in strategy and acquisition with the firm.

“We have really noticed a boom in the past five years,” he said of residences in the downtown, noting that Hamilton has benefited from Toronto’s status as one of the fastest-growing cities in North America.

“The underlying theme is that Hamilton is a mid-sized city, you still get that city vibe and the lifestyle that you get by living in downtown,” he said, comparing Toronto to Hamilton. “People are recognizing now you can achieve somewhat of that lifestyle in Hamilton for virtually double the space and half the rent. That is why you are seeing the allure of Hamilton.”

Of course, the pandemic has changed a lot.

Manojlovich noted that with uncertainty over the future of the office and retail sectors, and immigration to the GTA down, and other factors, the demand for high-density residences in downtown Toronto is trending to cool down. But he is not seeing that in Hamilton, he said, and he has not heard that any developers of the upcoming crop of downtown highrise projects are backing away.

“You are seeing the opposite happening here,” he said of the Toronto trend. “You are seeing the migration from Toronto looking at the 905 region, and you are actually seeing in Hamilton slight bumps in rental values. So that shows where people are coming in from. That shows how stable our market is in Hamilton.”

Below are residential projects 20 storeys and up either underway or in the planning stages for downtown Hamilton as reported by Forge and Foster early in November:

 

UNDER CONSTRUCTION

  • Platinum Condominiums, 15 Queen St. S., 282 units, 24 storeys, Coletara Development, completion expected 2021, under construction
  • 354 King St. W., 25 storeys and 12 storeys, Vrancor Group, completion expected 2023, under construction
  • 154 Main St E, 267 units, 25 storeys, Vrancor Group, completion expected 2021, under construction
  • Cobalt, King St. E., King William Street and Hughson Street, two 30-storey towers, 525 units, LIUNA, under construction
  • McMaster Graduate Residence, 191 King St. W., 644 beds, 30 storeys, Knightstone Capital, completion expected 2023, under construction
  • Marquee Residence, 20 George St., 203 units, 32 storeys, Vrancor Group, near completion

 

PRE CONSTRUCTION/PERMITTING STAGE

  • Beasley Park Lofts, 134 Mary St., 366 units, 20 storeys, Stinson Developments, completion expected 2023, pre-construction
  • Television City, 163 Jackson St. W., 642 units, two 32-storey towers, Lamb Development, approved
  • Hamilton City Centre, 77 James St. N., 2,068 units, three 30-storey towers and one 24-storey tower, IN8 Developments, under review
  • 71 Rebecca, 437 units, 30 storeys, Sonoma Development Group, under review
  • 235 Main St. W., 331 units, 23 storeys, Belmont Equity, under review
  • 41-61 Wilson St. E., 962 units, three 29-storey towers, Parcel Developments, under review
  • The Connolly, 98 James St. S., 315 units, 30 storeys, Hue Developments and LCH Developments, under review
  • Corktown Plaza Tower, 225 John St. S., 769 units, two towers of 27 and 14 storeys, Slate Asset Management, under review
  • Metro Condominiums, 307 John St. S., 773 units, three towers of 22, 24 and 25 storeys, Spallacci and Sons, under review
  • Royal Connaught Phase 3, 112 King St. E., 36 storeys, Spallacci Homes, under review

 

Follow the author on Twitter @DonWall_DCN.

in Editorial, Thought Leadership Posted by wpengine

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