Easy-Invest's Ralph van der Walle on MoneyTalks
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You know, going back, it's a couple of months. I talked to Ralph VanderWaal about the expenses right on the ground. He's with easy invest, easy invest.ca. They're building projects. They're searching out whether they want to do a project and they go forward or they don't go forward, depending on their guidelines about risk and about reward, et cetera, normal things.

But I think most people were blown away by how much money government adds to the cost. And this has been one of the themes on our show because our politicians keep talking about affordable housing and how much they care. And presto, you turn around and you go, well, that ain't helping. And Ozzie and I talk about that all the time. So I'm really pleased that Ralph, who's the founder of Easy Invest, easyinvest.ca, is finding time for us here. Ralph, I

Again, I think people were just blown away that what it's like being on the ground, trying to get something going, trying to develop something, et cetera. And you just keep on bumping into government charges.

You got that right, Mike. Good to be with you again. The cost of doing this business just keep increasing. Now, if they would increase on a 5% or 10% basis like most other things, we could deal with that. But let me give you a striking example. We just got our development permit for our Maple Ridge project called Portal. The website is portalmapleridge.com. We're now in pre-sales. But the city of Maple Ridge is increasing their developer cost charges.

Now, DCCs are what a developer pays so the city can use that money for parks and amenities. Fair enough. They're increasing their cost of DCCs by, are you sitting down? 80%. Eight, zero percent. Wow. I mean, seriously, what do you say? But again, that's against a backdrop.

of politicians running around saying how much I care, you know, and that's just not possible. And then people say, well, why is housing so expensive or rentals are so expensive, you know, et cetera. Well, look at the costs that are going up. And I mean, we could be talking insurance, you know, we could be talking other, you know, other types of charges. Well, for an individual, you could be talking the property purchase tax out in British Columbia. You know, not all provinces have that, but still it's just, you know,

The government fingerprints are all over the high cost of housing. Let me ask you within that context, though, as someone who, as I say, develops projects, you actually have one out in Maple Ridge where that development cost charge has gone up. Now, I would assume, do they apply to you, for example, or are you already too far into the project? Yeah, our development permit got approved over a year ago. But if we were to go back with a new project, we're facing an 80% increase.

Well, and I look at the housing, you know, and I'm proud to say, though, we've been chronicling this. I talked to Michael Mikkel from Waterloo, the Waterloo professional Mikkel Skutrud, you know, just a little bit ago about the immigration challenges with this. I mean, it's a cross-country problem, but...

Again, what do we need? Like 3.5 million houses in five and a half years or something by estimates? Well, we're just not going to get there. It's a crazy amount. Yeah. Yeah. I mean, CMHC comes out with this study that we need an additional 3.5 million homes in addition to the houses already in the books on the plans.

And that's by the year 2030. That's just not going to happen. Even when and if we get a new government and they're supposed to speed up development, and they surely will, we are not going to be able to catch up. It's literally doubling the amount of construction.

Another thing to keep in mind is when we get that new government and they will speed up permittings, then the cost of lumber is going to rise drastically as well. I mean, governments out there are making it very difficult to get permits for companies to go out and find new lumber. So a lot of the lumber mills are actually shutting down. So I think we're looking at the next storm that will increase cost of housing yet even further.

Now, you know, and you don't have to answer this because I'm getting into your business with easyinvest.ca and we appreciate that. But okay, so you're out. I want to just write right on the ground. You're out in Maple Ridge. You're pre-selling at this point.

What's the market reception? Are people feeling better about it? And keep in mind where Maple Ridge is, if you're listening across the country, you know, it's a suburb of Vancouver. So we've seen that gravitation out of that very expensive downtown core that everybody's heard about. Everybody's heard about the prices in Vancouver. So are you still finding that there's a market for that? And I essentially, cause you still, I mean, despite all this, you still start at a better price point.

than you would if you were closer to the city.

They say the proof is in the pudding. So we take risks when we buy a piece of land to go through a development permit and ensure that we can build what we envision for the site. The biggest test, however, comes when you go to pre-sales. That's where the revenue is going to come from. So we started our VIP events last July 6th, last Saturday. The sales center is ready on Fraser Street. I pull up at 930. We're supposed to open at 10 o'clock. And I look and there is a bunch of people inside the sales center talking to our team.

We sold the first five units, pre-sold the first five units in the morning out of a release of just nine. Now, the thing that's really catching my attention is that many of the people in that sales center are recent immigrants. I think historically, Canada has welcomed a lot of poorer people in most of the 21st century. Nowadays, I've read some studies that say 50% to 60% of new units are being bought by recent immigrants.

Well, again, though, when we're talking about a pool, whether it's temporary residents or immigrants, we're talking about adding to what, two and a half million, 2.3 million in the last two years. And of course, the point has always been, you've got to find a place to live, you know, and, but that's interesting. What else do you make of it? Is it, do you think people's attitudes about interest rates have changed too, that they've said, okay, we've seen the peak, things are sort of edging down, I can get involved in this, I feel better about it? Or is

Is it still more a scarcity? Like I better grab something now while there's still something to grab?

That's a really good point. You can feel both. You can feel scarcity. You know that they're going to run out of units. All we have is 36 units. So they're in there and they want to buy a unit ASAP. The interest rates are having an effect, but they're having an effect on the people that are having trouble qualifying. Those are the younger people, the ones that don't have enough equity built up yet. And that's very unfortunate. I mean, studies show that most of the young people in Canada have given up hopes of owning property. The

The public that we deal with are the ones that have been in the market for 10, 15 years. They've built up equity. A lot of them are downsizing. So our age demographic tends to be 40 to about 65.

You know, and again, it's different. We're talking about, I would assume, and not that they have to tell you, but you're looking at people who are looking at a place to live for five and 10 years, etc. They're taking the broader perspective. And in that case, I mean, there's different centers, you know, look at how successful Alberta is in attracting people coming into the province.

But British Columbia will also be a destination around that Vancouver hub and Victoria and Nanaimo and others, but also in Toronto. So I think if somebody says, I don't care what's happening on the short term, I talked earlier about the coming restrictions on temporary visas, but they still close their eyes and they look out. We're going to have a heck of a lot more people living. Hence, again, that demand for housing is built in.

I think so. I don't see any end to the real estate boom. It's, in my humble opinion, one of the best businesses to be in. On one side, it's an enormous crisis. There's a lot of people that can't afford to pay the rent, can't afford to buy a house. That's a terrible thing and that needs to be addressed.

However, if you're in real estate development, like our mutual fund trust is, it's the Holy Grail. I mean, you've got literally an unending supply of buyers and many of those people are qualified to buy these properties, even though the prices are starting to get pretty crazy in places like Maple Ridge. Yeah. Again, when you look at another project, sorry, get inside your business now, but

Again, are you have other sites in mind at this point that you're starting due diligence and how long does that process take?

We do. Generally, we'll take a look at a site once we go into construction with one project. So this one is scheduled to break ground in September, October. We'll start looking at other sites. Our due diligence projects takes about two months or so because there's a lot of pitfalls. You really have to make sure that you don't have to go through a rezoning. I don't do that anymore. I've tried that for other clients. It takes years and years and years. In the meantime, you pay your cost of capital. So we tend to look for sites that are almost unregulated.

ready to build and near bus stops, near transit in urban areas. You know, obviously, Ralph, this is a big subject. Just one more quick thing, though. I want to talk. You've got a couple of webinars coming up and I'll get to that in a second. And it's free coming up this week on Tuesday and Wednesday. And I'll give a little more detail on that because it's a chance to expand on and again, hear the thinking process, that kind of stuff.

Tell me a little bit about the trust units. I didn't get to that, but if you can explain that. So we've got what's called the Western Canada Monthly Income Fund. It was established in 2018. It's a mutual fund that invests in these real estate projects. We're pretty much fully funded for the Maple Ridge project. We're raising just a little bit of cash for construction financing and working capital. So we're releasing a limited amount of trust units. And we'll have a webinar on that for anybody interested this coming week. Okay.

Yeah, and so that's what invests in the projects from there that we're talking about. Nan, you mentioned the webinar. That's Tuesday and Wednesday at 6 o'clock Pacific. Tuesday and Wednesday at 6 o'clock Pacific. And I'll put more of those details up on mikesmoneytalks.ca and our social media. But in the meantime, Ralph, thanks for finding time for us. Thank you, Mike. Always a pleasure.