Jill Jordan and David Quaschnick of RE/MAX Real Estate Edmonton are our guests in this episode. They have both been in real estate for about fifteen years, with Jill formerly managing restaurants and selling RVs while David became an agent after getting his start flipping properties.
[1:18] Were either of Jill’s careers directly transferable to real estate?
- Being on the sales side of RVs prepped me for how mortgages work with amortization, payments, etc.
[2:32] Is David still doing flips?
- I am still currently doing flips, focusing mostly on basement suites.
- Even though the market is trending downwards, there’s still money to be made on flips if you are creative.
[5:03] Who’s the client that will typically buy one of these homes that is great for adding in a basement suite?
- There are lower-end buyers that can afford a big house, but they’re getting smart about using their money.
- A second type is the investor, who wants to buy the house as cheap as possible. They have almost unlimited resources.
- Most investors go after older-style bungalows because it’s their opinion that having a two-bedroom suite downstairs will net them more money.
- People buying new homes typically want just one bedroom downstairs; they don’t want to look after a whole family.
[7:15] Looking at both of these property types, what value increase do you get when there’s a legal suite in the house?
- You’ll see a 15-20% increase in the value of the home.
- Investors will look at the pure cash flow and ROI, and that will be around 8-10%.
- Putting in a basement suite usually costs from $50,000 to $65,000.
[9:30] What other trends are you seeing in the market right now?
- The most apparent trend is the amount of foreclosures. Over the next twelves months, I think we’re going to see a dramatic rise.
- I see nothing but opportunity in the market because cheap will always sell.
- The only people I see hurting are homeowners that are in the $500,000-$800,000 price range. They required two strong incomes to afford the house, but one of them needed to take a pay cut.
[11:31] Can you really get a good deal when buying a foreclosure?
- Back in the 90s, the banking system set it up so that banks don’t take a huge hit on these homes.
- Banks would rather hold on to the property than sell it for a huge loss.
- If you want the better deal, it’s smart to work with an agent who can approach the people that are getting into trouble before they get into foreclosure.
[14:43] Expand a little bit about the lack of warranties in buying as is, where is.
- It’s a high-risk proposition, and this game is mostly played by people who know what they’re doing.
[15:50] Do you see a lot of people doing long flips?
- I don’t think anyone does a long flip by choice.
- It’s a no-brainer to turn a space you never use into something that generates cash.
- The struggle that a lot of first-time buyers have is that they’re still got their parents’ mindset of not buying a home attached to anyone else’s, having a big yard, etc.
[19:10] Are people being cautious or fearful when buying?
- I’m finding the first-time buyers are coming in very smart. They’re deciding to bank money.
- Buyers aged thirty to forty-five are not as cautious and are willing to go into debt.
[22:10] Where do you see the market going in the next three to five years?
- We’re going to be exactly where we are right now. I don’t see any real change because we’ve built way too many new homes.
- I know that if someone bought a house between 2010 and 2013, it’s not worth more today than it was then.
[26:02] What’s the best real estate advice you’ve ever received?
- Sit down with an agent from day one and have them counsel you.
- With so many variables at play, you really need to take your agent’s advice and trust them. They have a fiduciary duty to you.
- Jumping in and actually buying a house is good advice too. Make sure that you’re well-educated about it.
[27:41] What trends have you seen in the last five to ten transactions?
- I’m still dealing with that second- or third-time buyer. I focus on homeowners, so my trends aren’t changing; families still need a safe house to live in.
- On the investment side, they’re a bit more cautious about what they’re buying.
[31:30] What advice would you give to someone trying to figure out who to use as a realtor?
- Talk to a person that you trust to see if they know someone in that area.
- You need somebody that knows how to deal with people and contracts.
- The last place I’d look for an agent is on the internet. You need to take the time to ask questions in-person.
ReMax Real Estate
ReMax Real Estate