Sylvia Ho is joined by property manager Sean from the east end of Toronto. Sean talks about how the power of equity from properties he owns has funded some wonderful things in his life. He has valuable advice about what to look for when buying new construction properties and why equity has changed his life. 

Sean and Sylvia talk about Sylvia’s recent flood issue in one of her properties and Sean then explains some very important things to look for in investment properties, especially when buying new construction projects. Everything from where the main hot water pipes are located in the building and where the elbow in the kitchen drainage pipe is, to cleanout access point locations. Sean learns this information by asking for the mechanical drawings.

The advice that Sean has about not just inspecting the view, but why you need to consider pipe locations as well as where the unit is compared to amenities access, is invaluable. Sylvia soaks up the information and then talks with Sean about what the power of equity looks like in his life. Find out the amazing things Sean has been able to accomplish and afford through the power of equity. It’s an inspirational episode for anyone considering an investment property or two.

–

Sylvia Ho | Mortgage Edge Agent 1 | LIC #10680 FSCO# M08003923: schedule a call | facebook | linkedin | youtube | instagram

_

Transcript

Sylvia Ho: [00:00:05 ] Hey, friends, have you ever wondered how you could pay off your mortgage faster? Or maybe you like to help your kids get into the real estate market. Or better yet, retire with some passive income. Well, you're in the right place. Welcome to the Sylvia Ho Mortgage Podcast. My name is Sylvia. I'm here to teach you how to achieve your goals simply by owning just one more property. Hey friends, Sylvia Ho Mortgage Podcast. So today we are joined by Sean. He talks about how by having equity, by having properties, you are able to do things that you typically wouldn't do. So he was able to have his dream wedding with his lovely wife and 200 guests in the middle of New York for a whole weekend. So for him, that was a power of equity. If he didn't own property, he would not have been able to have his dream wedding. The second thing Sean talks about is things to look out for when buying a new construction property. As an investor myself that's bought new construction properties, the insight that Sean gives us is immensely helpful. So listen in and let me know if you have any questions. Thanks so much.

Sylvia Ho: [00:01:19 ] We have Sean here. He is a property manager for actually one of my units that had a huge flood in it. And he was just so nice in helping me navigate this whole what to do when there's water in your unit. And then we got started to talk about, you know, what to look out for for our condo units when you buy them new construction. Sean is a property manager. He's been a property manager, as you said, six years now.

Sean: [00:01:48 ] Yeah, a little over six years.

Sylvia Ho: [00:01:49 ] So he's a property manager a little over six years. And he's just going to give us a bit of insight of like, what's been going on after you take possession of a condo unit. So talk to me a little bit more like if someone's buying a new construction property, when we were chatting, you gave this one really, really great advice. I'm like, Oh my gosh, I never thought about that.

Sean: [00:02:09 ] So here's the management perspective and how it's helped me personally in my own investing. I spent probably four of the last six years dealing with new condominium development with my full time employer, and new properties are kind of a different beast. One thing if you're buying resale in a building that's been around for ten years, it's a completely different scenario if you're buying from a developer or if you're buying an assignment from somebody who just had a set of drawings. And so there's the whole tarry on warranty process that you have to work through. And I would say my perspective as a manager is the average consumer doesn't really understand what they bought. I always tell people a condominium has two things it's units and common elements. So you own your unit, the stuff inside the walls that you're fully responsible for. So even though I'm the property manager, I'm the condominium manager, I'm not responsible for your dishwasher. Right. And so that's a tough message to give to people sometimes when when things break and this is a bit of an indictment on the industry, I would say as a builder - and I'm not one, so don't, I can't speak to this and tell you - this is what I see is you cannot get cheap on the physical construction of the building. Like the steel has to hold up the building. The concrete has to be the concrete. And as the builders gets through the project, then they start trying to save money on things like finishes and fixtures and appliances and stuff like that. So I would always tell a new buyer like, understand when you're buying from a set of drawings and they tell you all about these great European appliances and things like that, expect that they're going to break down in the first couple of years and your warranty's only good for the first year on that. Right? So make sure you have some contingency for those sorts of things. Windows will leak, floorboards will shift and those sorts of things. And typically the builder might have one or two contractor people left after they've given you the keys on the project. And the average high rise in Toronto is three, four hundred, five hundred unit mega-project these days. And you've got one or two people who are here to listen to the concerns of 1000 people. So things don't always happen quickly, and particularly if it's a warranty issue, right? So as the property manager, I represent the condominium corporation. What does that mean? Well, every condo in Ontario gets assigned a number, right? So that number gets done by the land registry office after the builder has sold 50% plus one unit. So when all the units have been handed over or the majority of the units have been handed over, that's when you get into electing a condo board of your fellow owners. And that corporation is a separate entity from the builder. So it gets kind of cloudy in the first couple of years for a buyer of a new property. They look at me as the condominium manager and they go, Well, this is the you problem or this is your fault. And it's like we have to make that distinction between what's the condo's responsibility and what's still the builder's responsibility under the warranty. That gets confusing even for, even for property managers. So that can be confusing sometimes.

Sylvia Ho: [00:05:43 ] So basically what you're trying to tell me is that as a, I bought new construction properties, I bought four new construction properties myself. So what you're telling me is that, hey, Sylvia, understand the differentiation between what you're buying and what you're responsible for and what the building, the condo, is responsible for and what the builder is responsible for.

Sean: [00:06:07 ] Exactly.

Sylvia Ho: [00:06:07 ] They're three different things. It's not all one thing.

Sean: [00:06:12 ] Right. That's precisely what I'm saying.

Sylvia Ho: [00:06:14 ] So I learned that the hard way when there was a flood in my unit and I was responsible for the floor because I'm like, Oh, I thought that the floor, because it got flooded, it was part of the condo corp. But that's okay. You explained it to me. You said no, Sylvia, you're responsible for the floor. So we know water is our worst enemy. So one thing you told me was that, Hey, Sylvia, when I go buy new construction properties, I don't look necessarily at the view. I look at what was that called, the...

Sean: [00:06:44 ] The mechanical drawings. Yeah.

Sylvia Ho: [00:06:47 ] The mechanical drawings. So they gave you the copy of mechanical drawings?

Sean: [00:06:50 ] Well, I insisted. The most recent purchase I did was just about three years ago. And this isn't an indictment on the real estate industry, but everybody wants to sell you, like, here's the great water view or something like that. And my strategy going in is this is an investment property. So in as much as I appreciate a good view, I'm not living in it. So I need to be more clinical in my approach here. And so my first question to the sales agent for the builder is I would like to see the mechanical drawings. And she looked at my agent kind of kind of funny and my agent responded to to the seller's agent and said, he's a licensed manager, he knows what he's doing. So can you get the drawings? And what I was looking for is a unit on a floor that doesn't have any pipes running overhead. Because the average person is not an engineer, right? You're a consumer, you're buying a piece of property. And if you're buying in a multi unit facility, what we don't realize is when you turn on the hot water, that water is coming from the roof of the building. And depending on the size of the building, there are series of pumps and motors and that water is in constant motion. And the reason why they do that is if you live on the second floor and that water's got to come from 30 floors above, we want to make sure that it's still hot. It's in constant motion. So some of those pipes run laterally. You see a 30 unit building, but it might actually be like three sections put together from a from a mechanical engineering stand