Roy and Amit Bhandari are realtors that specialize in the pre-construction condo market in Toronto. Specializing has allowed them to develop an impressive knowledge base and, more importantly, discerning judgment on attractive investments for their clients.
Luckily for us, Roy and Amit agreed to share their insights on the condo market, so let’s get informed!
1. First off, tell us about Talk Condo andAmit and Roy Bhandari, the brothers and the business.
We were bought up in England and immigrated to Canada in 2001. Roy has a degree in Marketing and Amit has a degree in Information Technology. We have worked in Real Estate since 2007 (Roy actually go his license while still in University and started working with a brokerage the day he graduated).
We created TalkCondo because we felt that there weren’t enough Realtors providing REAL information on new condo developments. There were a few that put up basic marketing fluff for the new condos, but not enough that gave real insight to the condos. We tried to bridge that gap with TalkCondo.
2. Fill in the blank. If you weren’t in the real estate business, you’d be _______.
Roy: Excellent question. I definitely wouldn`t be working in an office. I`ve never applied for a job and don`t even have a resume – and the idea of working 9-5 doesn`t sit well with me. I’d probably be doing something entrepreneurial – I love to create new things. CREATING TalkCondo to me was a lot more enjoyable than actually running it day to day.
3. What sets you apart from the pack of other realtors (as there are many of them!)?
Roy: We set ourselves apart by specializing. I don’t do any resale real estate, and instead spend my time researching the various new projects. Potential clients can sit down with me and have a discussion about not just one or two projects, but about ten or fifteen projects so they know what is going to be the best option for them.
We also do a ton of research. Most of our clients are investors and don’t have time to do their own research. They are relying on our expertise, so we spend countless hours researching neighbourhoods, views, floorplans so that when we are advising our clients on what to buy – we can back it up with actual figures.
4. What do you do with your real estate commissions?
I buy suits and ties so I can win fashion competitions held by awesome mortgage rate comparison websites!
I do what most people do with their money – I’m a big movie buff so I splashed out on a nice home theatre set up with a big screen and surround sound. I’m pretty good with my money, so I’d rather buy an investment condo than splash my money on fancy cars.
5. Own any properties yourself? What did/do you look for?
Yes. I own 7 pre-construction condominiums. I look for the same things I advise my clients to look at: comparison of the project to existing pre-construction projects, existing resale projects and also do a lot of homework on appreciation rates and expected rental rates.
6. When not hustling, where can we find you?
This is a trick question. We are always hustling.
Pre-construction real estate
7. What do you look for in a pre-construction property? What’s your criteria on behalf of clients?
All clients are different and it depends what they are looking for. End-users look at a completely different set of criteria than an investor – and an investor whose goal it is to flip a property looks at a completely different set of criteria than an investor looking to build a portfolio of rental suites.
No matter who the buyer, we want to make sure they aren’t overpaying for the condo. That’s criteria Numero Uno. We compare the pricing of the units to similar units both in the resale market and other pre-construction condos. In addition, we attempt to predict the market value of the condo when it closes – we look at the growth of the area in the last 5-10 years and look for patterns. For example, some condos in Mississaugathat we analyzed were priced $100-$120 per square foot more than the market was ready for. In addition, the appreciation rate in the area was around 5% per year – meaning that by the time clients got the keys to the new unit, the prices they paid were still playing catch-up to the market.
I only work with pre-construction condos in Toronto and surrounding areas, and, as a result, I’ve seen what works (what makes my clients money) and more importantly, what doesn’t work. I am able to identify the circumstances of why clients do not make as much as they expect. Moving forward, we apply that knowledge when we look at new pre-construction condos. We have made some of our clients very, very wealthy over the last 4-5 years.
8. How long is the typical launch-to-move-in wait time?
It can vary anywhere from 18 months for small projects to 5 years for large-scale projects. Some builders such as Daniels actually start building their development before they sell, so you can move in very quickly — sometimes it`s as quick as 60 days.
Typically, for a standard-sized building, I would expect around a 3-year turnaround time.
9. Why is it beneficial working with a ‘VIP agent’? (i.e. one who has first access)
A VIP agent is one that works with the developers and has a reputation with the developers for selling units in their buildings. VIP agents typically get first access to the building which gives clients the first choice of suites and typically at the lowest prices. Condos in Toronto can jump in price at the bat of an eyelid, so if you don`t get in at the right time, you could be paying anywhere from $10,000 to $30,000 more for the same unit.
One of the toughest parts of the job today is securing units for our clients. There is a LOT of demand, but the developers often give first choice to the agents they have dealt with in the past. We have worked hard to develop that reputation and more often than not are able to get the units our clients want.
The hidden benefit of working with a VIP agent is that you are dealing with someone who knows pre-construction condos. We ensure that the buyer is protected through the legal mumbo-jumbo of the contract, and we know what questions to ask.We get calls all the time from people who purchased a pre-construction condo from ‘Uncle Joey’, but they didn`t know to cap the development levy charge, for example. This can cost the buyers thousands upon thousands of dollars that could have been avoided.
10. What’s the pricing of a good value property these days? A ‘bad’ one?
Different areas have different values. If I told you that you could buy a pre-construction condo in Mississauga for $600 per square foot, you`d tell me I`m crazy. If I told you that I could get you a condo for $600 per square foot in Yorkville, I`d have a line up of clients so long that I could retire tomorrow.
11. What is the financing structure for pre-construction units? Deposit requirements, etc.
Most new developments require 15%-25% deposit. The deposit amount can vary depending on how early you buy or which agents you work with (VIP Agents who bring builders a lot of sales typically get better incentives for their clients). This is usually payable over 9-12 months.
12. Any warnings to those buying pre-construction?
Hire an agent who knows what they are doing. It costs you nothing but could save you thousands of dollars.
Stay tuned for Part 2 of our in-depth interview with TalkCondo founders Roy and Amit Bhandari