Vancouver's Real Estate Market

[Hehe]

Originally Posted by westopher

What you want to do is buy something that makes you money, then after you make money, you sell it for more. All you need is a few million to start. It’s fucking simple. Hold on while I write a book about it.

True to a point. But this is not how we operate. You don’t actually sell. But rather, just leverage on it.

What I’m going to write next is how my family as a whole made our fortune. It might sound simple, but this is exactly how money works in our field.

Let’s continue to use our 50k a year example. The market now is demanding 5% cap, the valuation is 1m, we put 30% down and finance 70% of it. Remember that we got this in the downturn. Interest rate is around 4%, our cash flow leaves about 1% every year, it goes back to pay down the principal. Now fast forward 5years, for simplicity sake, we suppose we pay down about 20% of the 700k debt or 560k owing, market is booming after a few years of monetary easing because of the downturn a few years back. Interest rate drops to relative historical lows, say 2.5%. And because of the recovery of the market, the bank now only demands 3% cap. Just as the central bank is about to tighten their monetary policy, we re-finance it. Now, after 5years, the rent increases a modest 10% or 55k a year. The bank now values the property at 55k/3%=1.8m. We still need to keep it at 70% LTV, so we end up pulling out 1.8m-560k-560k still owing or roughly 0.6mil. This is roughly what we were able to make given the difference in cap rate that’s present in the market.

We wait until the market starts cracking again due to high interest rates, buy another 1m property that pays 5% cap. Put that 0.6m that we got as down payment, or if we could find, a 0.6m property, doesn’t matter. The point is, this property would generate a lot of positive cash flow. With all this positive cash flow, we pay down as much as possible on the debt that’s at the lowest possible rate because we took it out just before the tide was changing.

By the time we are done with the economy cycle, a great portion of the debt would have been paid since you have 2 properties to pay basically the financing of 1. With the cap rate requirement back low again, re finance both properties, rinse and repeat.

My parents and us (my brother and I) have been doing this for 3 decades. Thus, this is scalable and workable as it relies on the very nature that our economy is cyclical. Yes, the numbers are super simplified for simplicity sake. But this is the basic formula.

[BIC_BAWS]

Originally Posted by 68style

Well.. nevermind when your parents might be in the exact same industry and hook you up with all their experience and connections.

Goes back to accumulated advantages, those who had parents who held positions outside of office work / retail were exposed to career paths and options way beyond the average person. Or alternatively (and in this case), if the family business is successful and already has a replicable formula, you can continue to replicate and build upon it.

Hell I wish someone told me if I studied hard and was good at math, I could make $500K in investment banking.. but all the banking I knew about was at the retail level lol.

I feel like there are a lot of careers out there that we just don't know about and that simply just comes from exposure/network.

On another note, I heard of a story where there were indigenous teens that didn't even know tech was a career option and those who did know was cause a family member was in it. A great example of a lack of accumulated advantages.

[AstulzerRZD]

low key i think retail banking being a baseline new grad job is a vancouver problem more than a family one

had u grown up in Toronto, you probably would've done DECA growing up, your family friends would've at least been business analysts at a big bank, and you would've heard about IB if not PE

you might've even lived at the end of the Yonge line at Finch ... meaning you'd have subway access downtown

[BIC_BAWS]

Originally Posted by Gerbs

I just asked my friend who bought a $650K Condo before 30 solo. He's working 32 hours while studying for NP now. Life's a grind. He said there's a girl in ICU that works 7 days a week, night shift bonus and clears $250K.

Originally Posted by westopher

Dude first year nurses start at 37.67/hr. Anyone who’s telling you they are making 2.7x their salary via overtime is full of fuckin shit.
You aren’t even legally allowed to take that much overtime based on rules set by the health care authority. My wife has been a nurse for 15 years. If she took EVERY single possible OT shift available for a year she might make that at $20/hr more than a first year nurse.

Checked in with my friend for fact check lol, turns out 3-5 years in, miswording. FY closer to 140K. Point still stands, 170K on OT you should be making enough to save quite a bit with good financial literacy.

Came back with first 2 reddit results on Google:

"Also if you’re an RN/RPN you get an additional $2/hour working in hard to fill areas (ED/ICU/etc). A lot of the nurses I work with in the ED make $130k-170k."

"Yeah, you just gotta work a shitload of overtime. I work with a few RNs who cleared 200k picking up an absurd amount of OT."

[westopher]

There are a lot of premiums involved. Line premiums, night shift premiums, weekend premiums, but still, the idea of saying “you could just do this” then talking about 100 hour work weeks is pretty ridiculous. If you want to give up your entire life to work, go for it I guess, but I’d rather be dead than work my life away to be rich.
Or there’s the better option over and above both of those to just have a reasonable amount of money, and time to actually enjoy your life. Look at musk. Guy has 500 billion dollars and he’s a fucking LOSER. If I were that guy I’d have put a bullet in my brain on a livestream a decade ago so people would at least remember me for doing one thing that people enjoyed.