Greetings Everyone,
Today I had a very interesting conversation with a fellow real estate investor. Our conversation was by chance, as neither one of us knew that the other was involved with investing in real estate.
I was very fascinated by this individual and the way in which he was investing in condo units in downtown Toronto.
In point form, here is a quick summary of his investment strategy:
- He is currently a part time real estate investor
- He works full time in the entertainment industry (on the set of movies, commercials, etc.)
- Specifically, he buys pre-construction condos in downtown Toronto, and flips them once the unit has been constructed.
As an aside, I know that investors with deep pockets do this. Instead of purchasing single condo units in a building, these deep pocket investors will buy entire floors in a condo building. Or they will buy a specific type of unit in the building. For instance, they may buy all of the bachelor units in a particular building and then flip them at a later date.
- This particular investor was just buying single units in a given building
- His long term strategy is to eventually invest in pre-construction condos as his full time job
What I found interested about this Condo Flipper was that he initially started out as a traditional real estate investor, buying and holding properties long term.
He told me that he started out investing in buy and hold properties approximately 15 to 20 years ago.
He also added that he moved into purchasing pre-construction condos because he wanted to invest his money in a ‘different’ way. I got the feeling that perhaps he became bored of the buy and hold strategy.
Here are some important take aways that I got from my conversation with this investor. This is the most important part of my article, as this gives an insight as to what is really going on ‘in the head’ of this particular investor.
- As fascinated as I was talking to him, and asking questions about how he was investing…he was equally as fascinated about how I was investing.
This insight led me to believe that as cool as condo flipping must be, there was a part of him that still wished he was buying and holding properties for the long run.
- He was very bullish about certain condo developments in downtown Toronto that a lot of traditional real estate investors would run screaming from.
His perspective here made me realize that opportunity truly exists everywhere. Whether you are buying properties to hold for the long term, or pre-construction condos to flip, there is an opportunity to make a profit with both scenarios.
Often, I find that many traditional buy and hold real estate investors don’t like certain ideas. For instance, they tend not to like the ‘buying pre-construction condos and flipping them’ strategy. Many of them disregard this idea completely as a money making strategy.
*Neil’s Wisdom* — Sometimes when we have our eyes closed (to certain investment strategies) we tend to miss these opportunities, as we are in the dark and we don’t see them.
Just some food for thought for my traditional buy and hold investors/readers. 🙂
In closing, there was one other point that this Condo Flipper made that I found fascinating. Anyone who has been watching the Downtown Toronto condo market knows that parking spots are now selling for a premium. A few years back $25,000 for a parking spot was the going rate. This going rate, depending on where you buy a condo in Toronto could now be $35,000 a spot.
The Condo Flipper told me that with his recent condo unit that he purchased at Front St. and Jarvis St. in Toronto…
…he bought a parking spot for $41,000 one year ago. A year later, the same parking spot was selling for $50,000.
$50,000 for a parking spot?!
As the kids say… OMG!
Leave me a comment and let me know what you think of this Condo Flipper’s Investment Strategy. Do you like it? Do you hate it? Do tell.
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