What skills do you need as an investor? Get to know Bill Biko, who has been a Real Estate investor for almost 20 years and has been helping landlords , investors and Realtors navigate the RTA and investment Real Estate world. In this episode, Bill BIko shares his origins as an investor and shows us the skills we need in order to succeed in this industry.
What skills do you need as an investor?
Get to know Bill Biko, who has been a Real Estate investor for almost 20 years and has been helping landlords , investors and Realtors navigate the RTA and investment Real Estate world.
In this episode, real estate expert Bill BIko shares his origins as an investor and shows us the skills we need in order to succeed in this industry.
Connect with Bill here:
Email: bill@billbiko.com
Website: albertaeviction.com
bill
[00:00:00] Oh, well folks locum to another edition of living in Calgary. I'm your host, Brian Howard. And today I have my old friend, my old colleague, a fellow real estate investor from way back in the day of rain, the real estate investment network of Alberta. I think it was originally called and then became off Canada.
Bill beco bill. Well, welcome to. Well, thanks, Brian. I'm pretty excited to be here. So I think we're going to have some fun today. We are going to have some fun bill. You reached out to me most recently, cause you were kind enough to listen to one of my recent podcasts with my old coach, Steve powers, a real estate coach, and we're just kind of like really wanting to catch up.
And I really, really appreciate that. Cause you and I have been through the ringer through a lot since we started investing in Calgary, I think investing in real estate in Calgary, I think you started investing [00:01:00] kind of vigorously 2003. And I started investing vigorously in January of 2000. Is that the truth?
Well, it's pretty, pretty darn close. Yeah. It was a summer of 2003. We, we started going crazy and bought a ton of property in the next four or five years. And we, we did go through the ringer. I mean, we saw the boom and we were fortunate enough. We survived through the downturn. But I think a lot of it was luck.
I know a lot of other investors when we had that first downturn just took a major bath and got completely out of real estate. Now, you know, having said that we didn't escape unscaved I mean, we sold off a bunch of properties to survive. We had joint venture partners to pay out but we came through.
You know, the saving grace was, we had a ton of cashflow and a bunch of our properties. And as we discussed in our catch-up meeting, I ran a bunch of rooming houses. So weekly furnished rentals, which were high cashflow, [00:02:00] but it was also high turnover. And you know, that just created a lot of let's, let's call it burnout.
I've had over 1500 tenants since I've started. And you know, I'm very thankful for my tenants, but you know, it got to the point where. I'm just not as excited to be a real estate investor, the last five or six years, it's just kind of taken me over the edge. So it's funny that in a nutshell, kind of that's it.
And, and here, you and I are back in, like, we're recording this in early March, 2022 and the investor hotness, uppity, Eunice, and confidence is like through the roof again, where people are writing offers with no conditions, paying lots of money over list price. And we've seen this market before you and I both for the first time, probably in 2006, seven, and then maybe again, a little bit in 20 13, 14, and now we're back at it.
So we want this podcast. It'd be fun [00:03:00] for the listeners. We don't want to be too scattered. But maybe, I mean, some of our listeners will maybe take a piece out of it. I don't give pause, but I guess kind of some of the things I'd like to talk about a little bit is well, your, your life experience here in Calgary and and and what you do currently and bring it all back to investing and, you know, to real estate.
Are you born and raised Calgarian no, I was born and raised a couple hours outside of the city over in Brooks area. So grew up there and came to Calgary in 82. Initially was here for a couple of years, going to university university, just wasn't my thing left realized a small town was no longer my thing and was back in Calgary a few years later.
So I've been here in Calgary. Full-time. Yes. It was a fall of 84 ish, roughly. So what did you do for those 15, almost 20 years before you sort of said, Hey, I'm a real estate investor and actively sought out joint venture [00:04:00] partners and such things. Holy cow, so many different stories now. So I worked up at the airport for a while.
I got into video stores, I became a member. Those you had to actually physically go into a store. So I worked with the video show place, which later became Roger's video, which is where I met my wife. And then I got into the computer industry and spent almost 17 years in the computer industry various different levels.
And then At some point, like many real estate investors, we read that silly little book, rich dad, poor dad, and the light switch went on and we had no idea what we're going to do, but we knew we had to start making money for ourselves instead of just making money for everybody else. And we kind of soul search for a little while.
Suddenly, it was like real estate is a thing. So we kind of jumped into that and it was really good timing. Like we said, back in 2003 rules are entirely different. It was the wild west and we were able to jump in hard, like I mentioned, and, [00:05:00] you know, we bought, I think it was five properties, six properties in the first five or six months that we started up and basically minimal cash.
Because the rules are so different between all the roles we had back then with being able to take over mortgages and special deals with developers and such. We were able to get in pretty quick and move forward fairly quick and picked up a lot of strategies along the way. You know, rain was very, very positive in that matter because we met a bunch of people who are doing a lot of the same things we were doing.
So we became creative and, and grew and grew. And you know, as we grew, we realized that we couldn't do it with all our, with our money, we're running out of money. So it turned into joint venture partners and just expanded and then rooming houses, and it just became fun. So a lot of the stuff we did as well, we started out as flippers.
So we're buying, renovating and selling. Usually making money, but not always it's not like TV. You don't make money every time you want to, but we'd we'd make money. And first flip would support us. [00:06:00] Second flip would typically help us buy a rental property. Third flip would possibly buy another one or support us a little better and just kind of go that way.
And then as we bought rental properties had them running for a year, we'd be able to show investors numbers and be able to bring in, you know, investors on a performing property. And, you know, our numbers down point at that point. So it just made the whole process simpler and easier to get partners in sort of, let's jump back to this too.
And now with all these years in sort of Alberta and now, you know, Calgary since 84, what strikes you most about living in Calgary? You know, being a small town kid, it was nice to come up to the big city. And I mean, we used to buddy and I would drive up for the weekend and hang out with friends and do stuff like that before I was back up here.
Full-time but it was just, it was exciting for us coming to the big city. Now I've been to many bigger cities since. And it just strikes a nice balance. [00:07:00] It's a big city, but it's not overly big. It's not Toronto crazy or Los Angeles crazy. Up until the last few years, traffic wasn't so bad, you know, it was, you could get around.
It was easy to get around everywhere. People were so friendly and. Back to the rooming house business. I dealt with a lot of international agencies. I dealt with companies that brought in foreign workers from Europe and from Mexico and churches that brought in workers and the unions that were bringing in people.
So I got to meet people from all over the country and all over while, not just north America, but all over the planet, it felt like, and, you know, they all just seem to really enjoy coming to Calgary. And I enjoyed showing off Calgary. It's just a great place. So close to everything. What's really easy for you these days is anything easy anymore.
Staying home right now. Holy cow, it's easy to stay home. And I think there's a bit of a trap, which is also a positive [00:08:00] in some ways. Because I've found in the last year and a half, it's actually opened up a lot of opportunity for me to reach out to people. You know, I've talked to people like yourself that I had lost contact with.
We get too busy with their lives. Now you're sitting at home a little bit more. You've got a little more time in theory. It's allowed me to reach out to a bunch of people and just touch base and catch up and see what's happening. And now with the, the takeoff. Programs like zoom it's been phenomenal. Why at times I did spend an hour and a half trying to get my mother-in-law's TV to work properly via zoom this afternoon.
So there are some stresses as well.
That's kind of, that's kinda my story. I'm, I'm doing a lot of landlord consulting. I'm helping landlords and, and even some tenants with some of the eviction process in Alberta since. You became an expert in the residential tenancy act. Is that what we say? Or the RTS RTA RTA using the [00:09:00] RTD IRS, which is a residential tenancy dispute resolution service for tenant direction.
So again, back to the rooming houses, dealing with so many tenants, I had to know the laws in and out. And I got to the point where I was helping landlords with it. And then I evolved to creating my own website Alberta eviction.com, where it was helping landlords and tenants. No, my thoughts and my ideas, I'm going to help good landlords with bad tenants, and I'm going to help good tenants with bad landlords.
I don't want people breaking the rules and making it more difficult for us, landlords, you know, there's enough rules in place. And if we screw around and try to skirt the rules and make it more difficult for tenants, it's just going to get worse for us. We see it in a lot of the very tenant friendly regions where more and more restrictive rules are put in place.
So I'm more of my story is as we did that downturn in 2007 and kind of sat in our hands going, oh, it's going to end in a year. Oh, it's going to end in two years. Oh, it's going to end in three years. You know, I built up a Alberta eviction, which kind of led me to another site as I found out how. Ill [00:10:00] educated.
So many landlords are and created the educated landlord.com, which actually helps landlords across the planet. So I have landlords from Australia, South Africa, across north America, even into Europe that are picking up some of my courses and some of my information, which is more. You know, systems and processes you know, I was dealing with 70 plus tenants on a monthly basis at one point, and you had to have all kinds of systems and processes to make it work.
And it's kind of amazing. I've downsized the majority of my properties. And I seem to have less time now than when I was all system minted and regimented and had all these processes. And now that I'm free-flowing, it's like, where did all my time go? Right? Interesting. Let me ask, how does your intuition system work for you? I mean, having all these rentals visa, like rooming houses, And like a lot of the experiences you've had in the last 20 years, especially I would say that you have to really rely on your intuition system, JV [00:11:00] partners, finding a JB partner, deciding to work with them, you know, firing a J D J seeing that, you know, a dog property may not be working and letting it go.
After all these experiences, tell us a little bit about intuition and maybe a related to what's happening in today's market as we've already refreshed earlier last week. I guess it's a lot, that's a lot, sorry. Intuition really comes in into dealing with a lot of the tenants and. Because I was dealing with so many people and with rooming houses, you're not doing credit checks on everybody.
So you've got to get gut feels fairly quick and you've got to react really quick. So a lot of it comes down to my initial questions that I asked people and the feeling I get back, same with joint venture partners. When you're talking to people, you can tell if they're interested or not, and then you just have to see if they're going to be a good fit for you.
And you're going to be a good fit for you. Which takes me to some of the less fun stories. I mean, we had one property and [00:12:00] again, back in the good old days when it was so easy to get mortgages we had a mortgage, a three-year term on a property and then prices dropped on the property and then the lender didn't want to.
Yeah. And we had a joint venture on the property. We'd never missed a payment. Cashflow was great out of the property. It was a rooming house. And now suddenly we had to either sell it or we had to get new financing, which meant we had to come up with like another $60,000. And it's like, The numbers just didn't work.
You know, the economy still wasn't cooking. We were kind of on the downside. Was it going to be 5, 10, 15 years before it turned into something where we'd get the money back. So we decided to sell it so immediately the market got worse. It seems to be my, my, my motto. If I need to sell something, the market just takes another downturn and, you know, we eventually sold it, but we ended up having a joint venture partner that lost some money and we then became.
We, we dragged him and I'm gonna use the word drag. We dragged him [00:13:00] into this venture and we expected it to do well. We spent the next three and a half, four years making monthly payments to get him back to what he originally put in, you know, so that came out of our pocket, but that's just how we felt things should be done.
And we hope we didn't have any more properties like that. So. So down here you're right. You ended up selling it because you had duke cause they wouldn't refinance it. And then you actually paid him back. His principle investment over three or four years for five months. We paid the majority of it back.
So we took a much bigger loss and he took a smaller loss. So as you think back to that, I mean, so sitting here and my perspective that wasn't right. It wasn't fair. It was an investment that he made and you know, you aren't guaranteeing increases. Do you think that you should have paid him back? I guess you're the real estate expert and you decided on this three-year mortgage that came due.
So, I mean, maybe, maybe you do take the, you know, making personal payments to him over [00:14:00] four years monthly Hertz. It did, but I mean, he was, he was struggling worse than I. So, you know, it just made that decision. Yeah. What I do at every time, if I had the funds to do it. Yeah. Probably I don't, I don't want to, I don't want to screw people over, you know, they came in yet, again, I'm the expert I'm supposed to make things worse or I'm not supposed to make things worse.
I'm supposed to make things better when things go worse. Typically we'll have a plan B and a plan C, but. When plan CNC, a C and D and E aren't working, and you have to go to Al you had already, you already turned it into a rooming house to increase cashflow. Cashflow was excellent, even though I'm just guessing, I'm just going to throw it.
These numbers, you bought this at the peak of the market for let's just say three 50. It was 2010 or 11. 2 65 and you had turned it into a rooming house and we were probably making 2,500 bucks a month on it. And and, but the bank wanted their money back and you probably financed it when you bought it for three [00:15:00] 50 ish for like a actually you can probably pay three 80.
I bet. They finance it at 5%. Yeah. 5% down or 10% down. So the mortgage. Like three 30 when it was worth, you know, assuming you paid three 50, the is three 30 and now it's worth 2 65 in 2009 or 10. Right. Because there was something like that. It wasn't quite that bad, but same kind of idea. I mean, we bought it for about, about three 15.
It dropped down to about 300. We had 5% financing on it, so it was right around 300,000 financing. And then we sold it for 2 85 ish and had to write. Commissions and all kinds of other stuff on it and then additional legal fees for, so it was, it was a good time. So I know that those numbers only cause a similar experience.
I was buying at the time. Well, in 2004, early in Altadore. 50 foot, lots, single family homes, bungalows for up to 300,000 and then that changed quickly [00:16:00] and jumped before 50. So then I started buying a chorus line and I was buying a forest lawn, these a similar type houses that I was buying in Southwest.
And Altadore for. $30,000 in 2007, that dropped. Oh. And I get like financing on it with JV partners and the mortgage would be 300 or something and they drop to probably two 50, maybe 2 75, and then the bank wanted all their money back they're like that. Who would've thought exactly. Bill What is it that you love most about Calgary?
You know, it's, it's kinda changing. I just, I used to love how friendly everybody was. And I found that as we've gotten so much bigger in the last, you know, five to 10 years, that is distancing a little bit more. You know, when I moved into the neighborhood I'm in now, I ended up knowing all of my neighbors.
You meet them, you chat with them, you talk with them, maybe have a beer in the backyard together, or, [00:17:00] or chats out front. And there's been a lot of turnover over here since, and, you know, I still know. Most of them, but it's not quite the same as it used to be. And I think it's, as we've become this bigger and bigger city, you lose that, that homeliness, that that tightness, it used to have.
Not that it's gone, but it just seems a little different than it used to be. What's keeping you here right now. Well, where are you going next? It's kind of home right now, but you know, as I mentioned, the, the elderly parents, my wife's parents are in Victoria. So we may end up taking a little jaunt out there for a few years and help them along.
You can only do so much via zoom and You know, my wife was making frequent trips when they're having some health issues. And so she was out there for three weeks and then home for a couple of weeks and then back up there for three weeks and we foresee more of that taking place in the future. So it might just be easier to hang out there for a few years.
Is your I think Karen's [00:18:00] an artist's your life, I believe primarily. And and you, I mean, most of your work. Pretty much at this time be done anywhere. Qantas 99% of the stuff I do is all online phone calls, zoom calls. So I'm, I'm not locked out anywhere. And I actually started transitioning to more of that years ago.
So I may have to sell some more property just to finalize everything and make it a little more streamlined. But, you know, I, and I could probably still manage my property because I manage properties remotely for years, just by having people with feet on the ground, they could deal with a lot of the stuff I was doing.
But yeah, back to that burnout phase, it might just be easier to start fresh out there for a while hanging out and just build more businesses. Right. How's the boom bust the economy. I mean, like, I feel like you and I have been like, almost like no one else, because we're at this age where not that it was more like our [00:19:00] dads were buying property in the early eighties at you know, 18 and 20% interest rates.
And then, I mean, I was an east coast and you were in Alberta. How bad was it? Was your family affected by the 1982 crisis here and then just the sort of steady, steady, steady. And then 1996, things start to go up. You got involved in real estate investing at a really good time in 2003, you know, boomed in 2000 late, 2005, 6, 7, 8.
You and I both thought we were really rich millionaires and then a crash an oh nine or 10. I learned, unlike you going the rooming house route. And you know, I, I learned to sell real estate at a high level, meaning earning a lot of commission fast to pay back a lot of bad debt and sort of stay on top.
And then 2013 and 14, the boom happened again or somewhat of a boom. And I was able to. Start to feel good again. And now we, here we are. We went through the 5, 6, 7, 7 [00:20:00] years of nothing. I mean, in terms of real estate in Alberta, price has just pretty much consistently dropped for seven years and now we're back up.
How does this, how do you deal with boom bust you, your family, your friends. And the people that you've seen come out of it unscathed and done really well. And then people really like you and I who've suffered a fair amount. Well, the people who survived focused on cashflow and you know, the big thing I caution a lot of investors is if you're hoping, if appreciation is going to make the deal.
It's it's speculation. It's pure speculation. You don't know when that cycle is going to end, especially in Alberta. I mean, it's, it's getting things are apparently slowing down a little bit now more properties showing up in the market oil spiking. So we'll probably see a local push where things are going to start looking better for awhile, but how long will that last?
Will it be a year? Will it be a two years? You know, so if you're, if you're getting through and I mean, this is kind of what we're. We were talking about back in that [00:21:00] 2005, 2006, 2007, it's like property has never come down. They always go up, you know, that's just what we got used to. And it was a real eye-opener and, you know, we were, we made money on all the properties, but I don't know if you can really count $5, $10 a month is really making money.
Especially if you've got maintenance or vacancy policy, you have to do. And those rooming houses, you know, they were pretty massive cashflow. So as I said, that just kind of saved everything and allowed us to move forward and allowed us to make some decisions. Versus other individuals who had, you know, I know people who had 15, 20 properties that they were only making a hundred dollars a month cash.
When it was good when it dive, they live, we're losing money on every property every month. And they were also down 50 to a hundred thousand dollars in equity in every property. So it was pretty scary for a lot of individuals, which led to bankruptcies and foreclosures and all kinds of less fun times. So [00:22:00] if you're focusing on cash flow, Cashflow and time will correct all the mistakes you're going to make, and that cashflow gets you the time.
And then the time itself allows you to get your mortgages paid down. It allows the market to move up and down. It just puts you in a better position. Do with, with all your experience of like the cashflow, especially I think. And so right now, in order to make your property cashflow in Calgary, if you're paying 500,000 or more, I would say that cashflow would be very difficult on almost any property over 500,000.
Yet I'm getting today calls from Vancouver and Toronto investors that are more than happy to pay six 30 for you know you know, in Cranston, a single family, detached home. And what, what's your feeling about this in terms of intuition? Is Calgary going to do what Toronto and Vancouver did and go up?
I don't 30, 50% in the next 18 months. Any thoughts on that years ago? I would've said yes, but now [00:23:00] my experience is it's not going to, I think there's no. Economic reason. Well, actually now there is sorry with oil going up. Like it has been, there's finally an economic reason for prices to be increasing in Alberta.
But as you mentioned, we've got so many people coming from Vancouver and Toronto, you know, this whole pandemic era where people don't have to work. In an office anymore, they can do all their work remotely. So now we have somebody as an example, somebody who's got a, an 1100 square foot bungalow in Toronto that they've just sold for 1.2, $1.3 million, and they see a 2,500 square foot house in Cranston for only $630,000.
That's the steel. Dadich and you know, some of the investors from Ontario are just fed up with the rules out there. It's taking them 6, 12, 18 months to get a tenant out and they're not getting paid at the, the entire process. So they're kind of looking to Alberta as a, as a safer place to invest. We're much more friendly with the landlord [00:24:00] tenant laws and they're so used to not making money on cash.
You know, even if they're only losing a hundred dollars, that seems like a fantastic deal here in Alberta. So it really does come down to perspective, but you talk to the long-term investors and if you have that cashflow, it gives you so much more flexibility. When the market does go up and down, you can move your rents up and down and you're not losing money every month.
Interesting and up build your what is the best way if people want it to reach out to you, what are some of the best ways to reach you? What's your current business? I mean, I think you're involved in utilities a little bit. You're involved in helping people with evictions, whether it's a good landlord and a bad tenant or a good tenant and a bad landlord.
What are some of your other, like you got some few your wife, Karen is doing online art lessons. I believe. Yeah. So, you know, you can find my stuff at you know, Alberta, eviction.com. I can be reached for you there or the educated landlord.com. And of [00:25:00] course, if you need more artwork for your house, you know, there's always a Karen biko.com.
So she's got her artwork up there and then every Tuesday. So yeah, all that, all that kind of keeps us busy and jumping. Good. Jumping back to Karen and her parents, it sounds like her parents are in Victoria. Did she grow up there? No. She grew up actually in Winnipeg and New Zealand and Calgary. So she was around a little bit and her parents really liked Victoria.
So they actually bought rental property out there, you know, 15 years before they retired. And they had the property waiting for them when they, when they were ready to move out there, which ironically was less than a year after we got.
And what part of Victoria are they in? Are they in I'm asking this except for a couple of reasons. My son, Jacob is currently selling in Victoria real estate agent just in the last year. And he's talking about like like you and I both know Marlboro park, for example, and a single [00:26:00] family home there.
Might cost 300,000 or $350,000. And he's sending you these examples of a similarly sort of located properties in Victoria. Like they're not marble apart, but they're similar kind of, not the best communities and not really bad. And you know, selling like $1.3 million. What, where, where do your parents in law end up buying in Victoria?
I don't know the exact name of the district. But they're just a little ways from Gonzalez bay, which is. And you know, they've got a heritage home. Again, it's not a huge home, but it's it looks fantastic. They're on the garden tour. So it's a very well-liked little house and block and a half from the ocean.
And yeah, it's going to be one of those expensive houses whenever it comes time to sell. Let me ask a couple more questions. This is a good one for you. What advice would you give your younger self? You know, [00:27:00] one of the things we did is we teamed up with several partners. So we had multiple companies, I think at our peak, we had four companies, real estate companies.
If I had to do it again, I would do it all on my own. A lot of new investors want partners because they feel it will take a lot of pressure off of them. And if there's mistakes, you know, it'll kind of be covered up because there's two of them, just do it on your home. You know, maybe have mentors, maybe have people you can talk to, which is huge, but you don't really need those partners when you're starting out.
As much as you think you need them and it will make your life a little bit simpler. The other thing. We probably wouldn't have gone as crazy. Like we were buying and values were going up so much and we were refinancing and pulling the money out and buying even more, you know, at what level is what level safe and what levels happy, you know, 20, 20, 5 30, you just keep on growing and growing.
You know, if we would have taken some of that money and just pay down more of those mortgages, we would [00:28:00] have been in a month. Safer and much more equitable position and had, you know, half a dozen properties all paid off, which just changes life for, for anybody. So those would probably be some of the major lessons I I've mentioned and, you know, hanging out with groups, like-minded individuals, so that you're getting that right feedback and you're getting the right information.
You need to help you grow those. Those would be key. Excellent. Excellent. Shares bill. Thank you so much. So folks, I guess I just wanna as, as we're entering another boom market here in Calgary, I was what I think was a blue market, probably towards the start of it. And you're investing in Calgary real estate and you need health evictions.
We're actually utilities. We'd never talked a whole lot about that. I know bills and that kind of, that sharing of utilities reach out to bill. He's got a wealth of experience. And they seems to have a little more time to cool it and talk and share. I think [00:29:00] he probably acts as a bit of a therapist, too many.
Is that true in your work? Talk about talking people off of the ledge. Yeah. Here's one last fun little tale. I talked to so many landlords. You know, they go through their first eviction and they've had maybe two or three tenants. They've had a property for four or five years. They finally have an eviction and they say, that's it, we're selling the property we're out of here.
And you know, you you've just gone through, what's probably the worst, although I've got other worst stories, but you've gone through, what's probably the worst situation that happens to the majority of landlords, a bad tenant. You know, now you understand more of the rules. You will be so much more diligent screening going forward and being more diligent about your property.
That you're actually probably in a better position to avoid this for the next five to 10 years as well. So, you know, suck it up, get back in there and just be more correct. I've seen a lot of that as well and give the same advice, whereas it's like it takes work. Any [00:30:00] kind of investing takes work you know, your own financial plan takes a little bit of work, I think, to do it well.
Not that I have investments in anything other than real estate but it takes work. And so, and sometimes it, it mostly goes really well. And. But sometimes it doesn't, we have to be prepared for that. That's great advice bill for the list nerves, but if they do insist that they want to sell, you, send them
bill. Thank you so much for being on the show. I think that we should probably have part two sometime in the next month where we focus the, maybe a little bit more on some realm of the real estate cycle or. Well, something like that. Be awesome. I really enjoyed myself, Brian. It's good to catch up. I mean, we started chatting, it seems like only a couple hundred years ago.
But I mean, 15, 16, 17 years ago, somewhere in that realm we first met we took some training together at one point and, you know, it's just nice to catch up and [00:31:00] be able to do stuff like this and share information to help people move forward. So I'm excited about the stuff you've been doing and helping people.
So let's just both keep on moving forward. Keep on moving forward a hundred percent. Thanks so much. Right. Thanks Brian.
Oh, wait.
So hit stop, record, raise, hand, and record the record button.