Here’s a list of tips on what makes a good condo for resale.
I’ve been there, done that, and bought the t-shirt.
When I say that, what I mean is that I purchased my first pre-construction condo in 2001. It was on Merton St and I lived there for a few years before I purchased my first house. While I lived at 194 Merton St, I was part of their initial board of directors taking on the roles of Secretary, Treasurer & President over the years. Let’s just say I learned a lot about condo management being an owner and sitting on the condo boards. Continue reading
It seems as though almost every week, I have a buyer or agent asking me about a 2 bedroom condo. They clearly are in extremely high demand right now. The average size of a condo in a newer building these days is around 550 sq ft. No wonder larger 2 bedroom units are in such high demand.
Before I became an agent, I spent almost 10 years in advertising sales & marketing so when I became an agent, marketing a property was a no-brainer. I’d spent so much of my time coming up with great marketing and promotion ideas for the largest retailers and consumer product goods companies. I simply translated everything I knew about marketing and sales into selling a house/condo. Continue reading
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Senior VP Market Research & Analytics at Fortress Real Developments which helps to finance various condo developers.
Is there too much supply of condos in the market?
Is there an impending crash coming?
What are the trends in the sizes of condos? Will families be expanding into condo?
What’s happening with foreign investors?
Davelle M.: On today’s episode, we have Ben Myers, Senior Vice President of Market Research Analytics at Fortress Real Developments. Welcome, Ben.
Ben Myers: Thanks for having me.
Davelle M.: Awesome. Thanks. So tell us a little bit more. What do you do at Fortress and how does it relate to real estate?
Ben Myers: Sure. Fortress Real Developments is a real estate development company. We partner with other builder developers on most of our development projects, a lot of them. Our major responsibility is sourcing equity, sourcing debt financing and helping development along on the financial side as well as to the construction side of things.
So what I do is, I underwrite or do the due diligence on the deals that are presented to us, either from a [inaudible 00:01:22] developer or a broker. I look at them from a revenue perspective, so I look at what the unit can sell for. Is it the right market that we want to be in? Is it the right neighborhood? Is it the right built form? Is it the right product type? Is it the right unit size? Is it the right mix of units? The right amenities, the right features and finishes and that’s kinda where my level of expertise comes in.
And then on top of that I kinda produce reports for our stakeholders, either general public, folks that raise capital on our behalf, or our development partners on macro level trends that are happening at a national level and that are happening at a municipal level and are happening on a neighborhood level. So that’s kinda my main focus at Fortress.
Davelle M.: Perfect. That’s great. That’s very broad. One of the things that you touched on in terms of: you’re looking, you’re researching trends. So in terms of trends and sizes of condos, what are your thoughts about people saying that people are going to be starting to raise their families in condos? Do you see that as a valid trend in your business? What are you seeing?
Ben Myers: Yeah, I know, it’s interesting. I did a survey of realtors recently and for my next market manuscript with Fort, which is kind of a robust report that I put out to the market on trends. So when I went and asked realtors what they thought, it was interesting that a lot of them thought that yes, for the next five to 10 years that’s gonna be a big trend and even a few of them indicate that they’ve already sold a number of condominiums to families.
I think it’s inevitable that it’s going to happen and I think it’s gonna be obviously a slow process but it’s a necessity to live in the Greater Toronto Area for us to expand vertically. There is, obviously there is a really tight supply in the Greater Toronto Area, especially in the core where essentially built out of any what we call green-filled lands and in the city of Toronto, Mississauga, Scarborough, North York. There’s very little land available for low-rise housing unless you’re demolishing a strip mall or something that’s already existing. There’s very little land to just do massive single-family detached communities. You know, if people want that they’re being forced to drive farther out or pay very, very high fees. So if people want to stay in the city, they’re looking at alternatives to spend more time with their family and spend less time in their car. So they’re looking at buying condominiums to kind of service their needs. So it’ll be interesting to see how that trend starts to evolve.
Davelle M.: Yeah, absolutely. Definitely. And what would you say about the condo supply in Toronto right now? Do you think it’s adequate? Do you think it’s inadequate? There’s always lots of talk about: oh, we’re facing a condo bubble, they’re building too many units. What do you say to people like that, Ben?
Ben Myers: Yeah, I know, it’s interesting. For the longest time we were delivering in and around 10 to 15 thousand new condominiums a year in Toronto and that had served the market fairly well. We had a major sales boom in 2011, which resulted in: somewhere in the neighborhood of about 25,000 new condominium sales. So you give those projects a year in pre-construction and then two to three years under construction. We saw a major increase in the second half of 2014 into 2015, just a lot of projects coming to completion. So I think for a 12 month stretch there I think we had about 26, 27 thousand completions bordering on 30,000 completions in like a 26, 28 month period. So just a lot of supply came from online and an amazing thing that happened is, they all got sucked up and everyone expected there to be at least some flatness in the market but if anything it started to pick up. So, very interesting. It totally wasn’t expected with that major level of increased supply that we would continue to see prices gain, and not only gain, but gain more than they had in the past.
I think people want to be in Toronto and I think young people aspire to come to the big city from London, to Guelph, to Kitchener, to Brantford, to Windsor. You know, obviously a lot of people are gonna stay in Kingston, or in Ottawa, or somewhere further west, but I think a lot of people desire to come to Toronto and if we can keep producing high volumes of condominiums and keep the prices relatively in check, where a lot of people 300,000 seems like a lot of money, but in a global sense, in a city of our size and a region of our size to still be able to house a single person in 250 to 300 thousand for a unit is pretty affordable. So I want to see as many new condos as we can produce and that doesn’t result in an oversupply situation because I think it’s an inclusive city, a city that can have first time buyers and young people in their twenties. It’s just a huge advantage.
Obviously we’re seeing what’s happening in Vancouver with people getting priced out and young people actually deciding to leave the city because of the dispute over the issues, alright? So that’s obviously anecdotal. I haven’t looked at the latest census to see how much of that is happening, but we want people to come to Toronto and live in Toronto and start their careers here and be able afford housing. I think cities are best when they are able to provide housing from someone that’s 22 years old all the way up to someone that’s 90 years old.
Davelle M.: Yeah, absolutely. Definitely. I mean it’s funny. The one thing I’ve noticed in resale condos this year is that, over the last few months, is that as an agent, if I don’t get my client into a great condo within the first 48 hours, it’s sold. So a lot of condos now are actually just having offer dates the same way that they do for houses, because as much as people kept talking about, there’s too much supply, there’s too much supply, it actually appears that in the condo world there isn’t enough supply of what people want and so it’s causing bidding wars for condos and I think that’s something that people really never saw coming, given all the doom and gloom out there about overbuilding, but when I’m sort of working day in and day out I certainly don’t see that.
Ben Myers: Yeah. No, it’s interesting what’s happened. I mean, obviously the majority of the downtown condominiums, but like pre-construction of new condominiums are being bought by investors and a lot of those investors are looking to rent them out longterm. They believe in a longterm appreciation. They believe in the rental market and we’ve seen the rental market rates appreciated at a fairly brisk rate recently, so a lot of the small units are being rented out because investors tend to like those small units, developers are not building as many of the larger units that a lot of the end users desire, so there’s a little bit of a disconnect between what’s being built in pre-construction and what’s actually being demanded in the resale market, right? So it’s creating an inflation in the larger units and in the smaller units there’s still some competition with a lot of those small units that are in the rental market as opposed to in the resale market.
So it’s interesting how the market is evolving. We’re starting to see developers who are now adding more larger units to their pre-construction buildings because there’s obviously investors that only want to be in one or two years after registration, so they see the value in having some larger units and being able to sell those in a market where there’s not a lot of them. So they see the trends coming and are buying into them and obviously there’s still end users that buy in the new markets, not 100% investors. There’s still people that are living in a condominium now and they say, you know what, in three years I’m ready to move up to something larger. I can see the writing on the wall in the low-rise housing market. It’s going up anywhere from 10 to 20 percent year over year depending on the month. So in three years from now when I’m actually ready to make that move it may be just so out of reach that I’m not comfortable with it. So why don’t I buy into a pre-construction condominium and I can either move in it or if my employment situation has changed maybe I rent it out and maybe I can rent the rooms out.
So there’s a lot of different options for people out there, especially with such a strong rental market. So people are looking at it in several different angles when they’re going into a [inaudible 00:09:41] to buy a new condo.
Davelle M.: Yeah, definitely. I mean, one of the things you touched on is the investors and maybe we could talk a little bit about the foreign market because it’s certainly in the news quite a bit and I always wonder, why can’t they measure what the foreign ownership levels are in Canada? I mean, I find it interesting that the state of Florida seems to know over the last couple of years that Canadians were the largest buyers of real estate in their state and then recently the Chinese beat out the Canadians. And I always think to myself, how is it that the state of Florida is so buttoned down that they know their percentages but our country cannot figure that out? So what’s the answer to that? Why can’t we get our act together?
Ben Myers: Actually, well I think the governments have made a kind of a mandate to start tracking that information to get more buttoned up, but I mean, I think the issue that I’ve said several times in the past is that it’s foreign capital, not foreign buyers that are buying real estate and the important thing is there, is they have people that live here. They’re not just throwing a dart at a board and saying, should I buy Toronto, should I buy Vancouver, should I buy Miami, New York, San Francisco? They generally buy into areas they’re familiar with and that often means they have relatives living here, they have friends living here and they may actually even have their spouse living here and they’re planning on moving here, right?
So anytime you see an actual foreign buyer on the list of pre-construction condominium projects, they generally have some type of tie here. Their child is going here as a student. They plan on trying to move here. But on the other hand, yes there’s a lot of locals that are buying but the money is coming from grandpa or grandma or a relative overseas and they’re funding some of these purchases, alright? So that’s why it makes it so much more difficult to track. I’ve said to people, I have relatives in England. If one of them passed on and gave me inheritance and then I took this inheritance and next year I decided to buy a couple condos with it, well it’s obviously foreign money, but it’s certainly not a foreign buy because I purchased it and how do you ever track funds that are coming into this country and what they were eventually used for two years down the line, or three years down the line, or four years down the line, right? It’s virtually impossible to do it, right? That’s what makes it much more difficult.
So that’s why I think that the foreign tax is not gonna have a huge impact once two years or three years are down the line in Vancouver and I’ve said I wouldn’t recommend a similar tax in Toronto.
Davelle M.: And so it’s funny ’cause I had chatted with a friend of mine whose family members were real estate agents out in BC and they felt that because the enacted literally right away, that there were deals that hadn’t closed yet, that all of a sudden were going to be effected by the tax. So there are people now that couldn’t close on deals that they had actually bought already. So I thought that was interesting that they didn’t give people enough notice to say, if you already have your deal done, don’t worry about the tax. It’s going to be for any new deals from a particular day forward, you know?
Ben Myers: Yeah. It should have been grandfathered in and it made absolutely no sense. It’s really unfair [inaudible 00:13:03]. Everyone wants to think it’s money laundering rich Chinese people that are buying all the condominiums, but there’s a PhD student that just finished his masters degree at UBC and he’s starting a new job, he just bought a new condominium unit and his closing date is August the 4th, right? And he wants to become a Canadian citizen, right? They’re screwing with these people, alright? They’re responding to the people that are speaking the loudest and a lot of those people it’s xenophobic in nature and it’s disappointing, right? The major issue that’s impacting the Vancouver housing market is just a lack of supply. I mean, they are building vertically, obviously, but there’s still a huge demand and same thing happening in Toronto. People like low-rise housing, right? So they did that. Those prices are up very, very high, and then there’s restrictions in Vancouver in terms of heights of buildings in terms of infringing on residential neighborhoods. There’s just all kinds of restrictions on buildings, so the market can’t effectively respond to the demand, right? And then obviously in any of coastal, these well, you have the issue of geographic constraint on where you can build, right?
People just don’t seem to understand that the reason that prices in Calgary and Edmonton don’t go up as much as Vancouver and Toronto was they can expand in 360 degrees essentially, around the city. There are newer cities where the core is not where all the employment is, where as some of the older cities the employment was stuck right near the water, right? That’s why you see areas like Boston and New York and San Francisco, their prices going through the roof, ’cause they have a constraint on people getting to where the major jobs are, right? And you can’t commute from the South, right? Unless you have a high speed boat and you live in Rochester, right? (laughs)
Davelle M.: Yeah, of course. (laughs)
Ben Myers: It impacts the market and I think for the longest time in some of these cities when they were smaller and they had less population you could get in your car and you could get in your car and you could drive 30 to 40 minutes, but now that the congestion has just gone through the roof in a lot of these major cities, you just can’t spend two hours in your car trying to get to work, not only for the time, but for the frustration of it. (laughs)
Davelle M.: (laughs) Yeah. Certainly not during construction season.
Ben Myers: Yeah, so it’s forcing people to reconsider the trade-off between commuting and living downtown and paying a higher price for housing.
Davelle M.: Right, absolutely. But I mean, when you to look longterm, people always say, in economics all markets are cyclical, and in the Toronto real estate market it seems to have been just going up, flat, up again, maybe stopped a little, but really up, up, and up. So I guess my question to you is, I mean, yeah I am very positive about the market, but at some point is there going to be an economic cycle where things don’t go so well?
Ben Myers: Yeah, so of course there will be. I mean, we’ve been very, very fortunate that, other than a tiny blip in late 2008, early 2009 in the condo market and there was even a little bit in 2012 and into 2013 in the new condo market there was a bit a slowdown there, but otherwise it’s been very, very strong for 17, 18 years, right? So it’s really an unprecedented appreciation in the marketplace, but when we have a major recession and we will have another major recession and it will be something that is unexpected, something that obviously in Calgary they didn’t expect oil prices to go down 70%. We certainly didn’t expect oil prices to go down 70% and that impact the market. Luckily in Toronto we’re a little more diversified in terms of our employment base. We’re not a commodities driven market. That’s in the one sector of the economy that’s influencing the employment, so we’re a little more isolated that way, but a recession will hit and prices will go down and really it’s gonna be anyone’s guess how much they go down and how difficult it is for people. Now it’s like the faster they go up, the faster they go down, alright? So if Vancouver prices are going up 30% a year, well they’re much more likely to go down 30% than Toronto that’s going up 12% a year, right? The likelihood that they would go down 30% is much less, alright?
So it’s certainly something, I get nervous when prices start to get into double-digit annual increases, but I look at it across the board. I don’t just look at the overall market. I look at what are single detach doing. What are semis doing? What are towns doing? What the condo market is doing and we try to guess, try to make an assessment that way, alright?
Davelle M.: Sure. Do you even think or predict when you think that there might be more of an economic downturn in the market? Do you think that’s five years away? Do you think that’s two or three years away?
Ben Myers: (laughs) I wish I had a crystal ball.
Davelle M.: (laughs) What? You don’t? [crosstalk 00:18:15]
Ben Myers: I could tell you. I mean the world is so, we’re living in such a globalized nation now, so interconnected to all the financial markets that something’s gonna happen. There’s always some greed. There’s always something that throws the market for a loop and I wish I knew when it was coming or where it was coming from but I can’t, right? So it’s certainly my advice always to anyone that’s either buying for their primary residence or buying for investment is, buy for the longterm. Never go into a real estate purchase thinking I’m gonna sell this in a year or I want to flip this in two years, because you never know what the market’s going to be like in two years and you never want to be in a situation where you’re forced to sell. That is the worst situation that you want to be in and that’s how people lose money. When they lose their job and they can’t afford their house, then that’s when they lose money and obviously you can’t control when you’re gonna lose your house but buy below your means. I mean, I preach that. People say, oh you’re a developer, you want everyone to buy. Well no, I don’t want everyone to buy. I don’t want to be in a situation where more bridges are underwater and things are really bad for an extended period of time, right?
I mean, we have lots of investors. We have lots of investment units for people for people to rent in, right? If that works better for their lifestyle then that’s only better for real estate investors that we have in our kind of Fortress family, right? So I mean, I want people to buy what they can afford and yes, it’s frustrating that prices go up. I’m in the same situation. My wife wants a bigger house. She wants a backyard and a two car garage and all that fun stuff, but I refuse to live beyond my means and if the situation presents itself where we can afford that type of home in the future then maybe we’ll move and maybe we won’t, right? And certainly I’d give the same advice to anyone else that’s in the marketplace.
Davelle M.: Yeah, absolutely. And then so when you read the newspapers over the time, over the last few years, lots of doom and gloom. Every year, whether it’s The Globe, or Macleans, or it just seems like almost every Canadian publication is printing the same article about the doom and gloom in the market, the crash, the crash, it’s coming, it’s coming. Now every single year they get it wrong. I think I’ve probably read the same article for the last 10 years every single year and I’m always amazed that they never actually go back and go, hey wait a minute, we got it wrong. Let’s go back and think about what did we get wrong? What’s going on? What are your thoughts about that?
Ben Myers: Yeah I mean, the newspapers, I mean, their mandate is to present the news, but their mandate is to get the people to read and get the people to buy their newspaper or go to their site, right? And as sad as it is, bad news sells better than good news. It’s just a reality, right? When you turn on the evening news, will they talk about the crash here, the person that got poisoned there, someone got killed over here, right? It’s unfortunate, but very rarely is the lead “boy saves puppy from tree”, right? It’s just “Market Stable”, alright? They don’t talk about companies that just hired 2000 people, right? They talk about a company that laid off 2000 people. It’s just the reality of it. People click on those articles much more frequently than they do positive articles and it’s unfortunate, but that’s the nature of it and people will always want to give people the possibility of something going poorly, right?
Unfortunately a lot of the analysis that’s being done is not particularly good analysis, or are weak, or are given weak statistical arguments, alright? And very rarely do people understand other markets that are similar to ours and what’s happening in those markets and why those markets went up or down, right? It really takes a little bit more, I mean, I’ve been doing this for real estate analysis for over 15 years and I’m still studying all of these markets and trying to understand why one went up and why one went down and what trends are influencing each marketplace. It’s so much different between each market that can change the data that comes out of those markets, right? So it really kind of takes a level of expertise to understand it, but again putting an upside down house on fire on the cover of your magazine is gonna sell some magazines, right? I bet ya the author of that article really doesn’t believe some of the things that he’s writing anyways.
Davelle M.: (laughs) Right, that makes sense. I think you touched on it earlier saying your wife wants a bigger place, so do you own or rent and are you in a house or condo?
Ben Myers: We live in a condo town home, so for me it’s kinda the best of both worlds, right? I don’t want to climb on roofs and get leaves out of gutters, or wash windows, or cut grass, or do gardening, right? So my house is nicely well maintained along with all the other town homes on my block. I mean, I have no backyard to worry about, so I don’t have to maintain that, but we live right beside a park so I take the kids over there. There’s a little kids area, so that’s where I take the kids. A place for the dog to run around close-by. So for me it’s kinda the best of both worlds. I’m in the city of Toronto. I’m in the upper beaches area, so I’ve got a streetcar there. I’ve got a GO train stop, the last GO train before Union Station, so it takes me 12 minutes to get from there down to Union Station subway. It’s close-by. I can walk to it in five minutes, but I still can drive to a grocery store and park. I can drive to Big Box.
So for me it’s kinda the combination of everything, right? It’s a condominium so I don’t have to worry about the maintenance, but it’s still a low-rise. I don’t have to park four floors underground a condominium and walk my way up or wait for elevators or any of that. So for me it’s kind of the best of both worlds. It almost feels like the suburbs but it’s in the city and it’s still condominiumized, so I don’t have to deal with all that other BS, but I still have kind of the comforts of a low-rise home, so for me I really like where we live. I bought it new in 2009, so I had it under warranty. It’s got ceilings that are high enough for a six foot six guy. I have zero skills in being handy, so that’s why I prefer to buy new, so I don’t have to fix anything. (laughs)
Davelle M.: (laughs) That makes sense. I think it’s always about recognizing where your talents and strengths and weaknesses are and buying accordingly. That makes the most sense to me. Awesome.
Ben Myers: Yes, exactly.
Davelle M.: Well, thank you so much for joining us today, Ben. Ben, if people have questions, if they want to get your manuscript, how should they reach out to you?
Ben Myers: Yeah, so the two best way is to www.fortressrealdevelopments.com is the company site. My Twitter is benmyers29. So that’s a good way to reach out to me. I tweet [inaudible 00:25:29] my articles I do in The Sun and the New Condo Guide and as to my writing, RENX magazine, Huffington Post, so a bunch of the stuff is my writings I link onto my own Twitter page. I have conversations about the housing market on a fairly regular basis, so a lot of information there that can be found on my Twitter page and at fortressrealdevelopments.com.
Davelle M.: Perfect, great. Well thanks so much for joining us today, Ben. That was Ben Myers, Senior Vice President of Market Research & Analytics at Fortress Real Developments. Thanks everybody for listening and you can find me at Davelle at bosleyrealestate.com, or at Twitter @DavelleMorrison, or on Instagram @davellemorrison. Thanks everyone for listening. Bye for now.
Announcer: You’ve been listening to the Morrison Report. Hosted by Davelle Morrison, Sales Representative for Bosley Real Estate Limited Brokerage, Real Estate Investor, and Bestselling Author bringing you insights on the Toronto real estate market. Join us for another podcast.
Matthew Slutsky co-founder of real estate new site & resource BuzzBuzzHome shares with us their 2017 plans to allow buyers to purchase pre-construction condos online with their credit cards.
BuzzBuzzHome covers real estate and developments across many cities including Toronto, New York, Miami. Boston, Chicago, Los Angeles, San Francisco and more.
Davelle: On today’s episode we have Matthew Slutsky, co-founder and president of BuzzBuzzHome Corp. Welcome to the show Matthew, can you tell our listeners a little bit about BuzzBuzzHome?
Matthew Slutsky: Yeah, for sure, thanks for having me on the show. BuzzBuzzHome is North America’s largest on-line listing of all new residential developments. Basically, we’re like MLS but only for new construction so new condos, new town homes, new sub-divisions and essentially that’s what we do where BuzzBuzzHome is a listing of everything new in the marketplace.
Davelle: Cool, but you obviously have a cool news aspect of it as well too because that’s certainly that’s one of the reasons why I go to your site quite regularly is to read the interesting articles you’ve got about real estate.
Matthew Slutsky: Yep, so we’ve got a great new site it’s at news.buzzbuzzhome.com, we have a team of about eight reporters on it and their goal is to report not just on new construction but on real estate, on tech, what’s going on in the real estate world, and really to be a kind of a [all out 00:01:34] leader and a news provider of real estate and what’s happening, it’s a great resource, people love it.
Davelle: Cool and I mean one of the things I’ve noticed is you guys have certainly been expanding into a number of different cities. Which cities are you in now?
Matthew Slutsky: So, we started out in downtown Toronto, and my background’s land development and we kind of got our toes wet in downtown Toronto, that was about six years ago, we expanded across Ontario, we started getting calls from builders in Vancouver saying that what we’re doing is really lacking in the Vancouver marketplace so we opened up an office there and sort of take over the Vancouver market. Then we started filling in between Ontario and Vancouver and started going all the way down to both oceans and about three years ago we started expanding into the US, so we opened up an office in New York and we now are across all of Canada, New York, San Francisco, Seattle, Chicago, San Diego, Florida, Texas, I think we’re in about 10 major US regions.
Davelle: Geez, that’s amazing, it sounds like you’re about to take over the world, what’s next?
Matthew Slutsky: That’s our plan, world domination is our plan, you know the reality is that new construction has been kind of a forgotten aspect on-line worldwide. There are a few players in … Some in Russia, some in Australia but generally speaking that there really is no great … India actually has some really good ones as well, but there is no dominant global player listing all new residential construction.
Typically on the real estate side companies that try and enter the market go after where the commission is, so they go after the resale side first and from resale they might start looking into rental but very rarely do they actually enter on the new construction side. So it’s a niche that we found and have started to grow and ultimately we would like to be across the world, right now we’re pushing through the United States and we’re starting to launch a bunch of really cool new projects as well.
Davelle: Awesome, that sounds great. Now how did you get the idea to start BuzzBuzzHome?
Matthew Slutsky: I was in land development, my background is real estate and development, I did my undergraduate in urban studies at UofT, I did masters of science in University of Edinburgh both with a land development twist to them so obviously I wanted to be a builder. I worked for a company called Atria and worked my way up there then moved over to Diamante and worked my way up to VP of development at Diamante which is a luxury condo builder in the city and I just noticed this huge gap.
I noticed, you know, we were spending a fortune on print ads, signage, A-frames, yet we had a pretty awful website and the more I looked around most builders had an awful website yet I was starting to see the market change in that purchasers were starting their search on-line. Not only were they starting their search on-line but they really felt entitled to information and at the time most builders were reluctant to release any information. The kind of typical sales strategy was give them as little information as possible and try and lure them into the sales center.
Once they’re in the sales center, still don’t give them any information and listen to what their needs are and have the sales agent show them kind of one or two best plans that fit their needs. We were starting to see that the purchasers weren’t interested in that, they wanted to go on-line and they wanted to get all the information possible on-line.
So, I left Diamante and started what’s become BuzzBuzzHome, I started with my partner Cliff Peskin, he was running a company called Nutrition in Motion, which he ended up selling to a US company. He had a great kind of … Built a great technical background or he led the team that built a great technical background in that company, so we partnered up and launched what’s become BuzzBuzzHome.
Davelle: Cool, that sounds awesome. Where will you take your brand next, what’s next for BuzzBuzzHome?
Matthew Slutsky: So we’re working on … We’ve got quite a few projects on the go right now, our most interesting is what we call BuyNow and essentially BuzzBuzzHome currently in it’s current state is a discovery site so purchasers can come onto BuzzBuzzHome, they can either search a neighborhood or development name or by builder or by intersection, find the development they’re interested in and find out all the information on that development and contact the sales center directly through BuzzBuzzHome. Say I’m interested in the one bedroom south facing blah blah blah blah blah, so it’s pure discovery. What BuyNow does is it turns BuzzBuzzHome from a pure discovery site into an on-line marketplace so we feel that we’ll be the first really viable on-line marketplace for real estate in North America.
The reason it’s so exciting is everything has been turned into marketplaces, on-line marketplaces, whether you’re looking to buy shoes, you’re looking to buy groceries, you’re looking to buy anything you can buy it on-line. Real estate’s the one area that no one’s really been able to crack yet.
Matthew Slutsky: One of the key reasons that no one’s been able to crack it is because again these companies are typically dealing in resale and I think one day you will be able to sell resale on-line but currently if you’re buying resale, you can go to the house, you can bring your spouse to the house, you bring a contract to the house, you can feel it, you can touch it. With new construction and pre-construction nothing’s built yet. So you’re either going into a sales center and just getting a pure, hard sell or you’re doing your research on-line but there’s nothing real to feel. A sales center might have a model suite but that model suite isn’t the model that you’re getting most likely.
Matthew Slutsky: It’s probably upgraded beyond belief so what you’re feeling and touching isn’t even what you’d be getting so we feel that there’s a real opportunity to sell new construction on-line. So, we’re changing BuzzBuzzHome from a discovery into a marketplace and with that we’ve had to do, one of the most challenging parts is, we’ve actually had to build a huge inventory management system for builders to be able to power the BuyNow system.
For the past two years we’ve been working on this inventory management system because believe it or not builders still to this day are managing hundreds of millions of dollars worth of inventory using basic excel sheets. It’s true and you go into any sales center and you can see that their sales matrix is all based on excel sheets so building this cloud based inventory management system is kind of the foundation to be able to allow for the BuyNow system to work because it will actually connect BuzzBuzzHome to the inventory and allow the sale to happen.
Another really cool aspect of BuyNow is Daypack the information management system isn’t just an information management system but it’s also works as a POS. This actually powers their sales, so whether you’re on BuzzBuzzHome, on the builder’s website or in their own sales centers, the actually deal is being done on-line through the POS system, which is a huge time savings to the process. No longer does the sales agent need to be running from the sales floor to the backroom, printing out five copies of 600 page deals, getting them signed, returning them, mailing them around, it’s all going to be handled through our on-line system.
Davelle: So does that mean that people will literally plunk down, they’ll go on-line, research the information they need and then plunk down a credit card to purchase that particular condo?
Matthew Slutsky: Correct, they won’t be putting down obviously the full amount of the sale on the credit card, what they’ll be doing is putting down the initial $5000 dollar deposit on their credit card and that $5000 dollar deposit goes directly to the trust account for the builder because of the rescission period, you know in Ontario it’s a 10 day rescission and in BC it’s a seven day but during that rescission period you can cancel the deal at any time. So that initial $5000 dollars is what goes down through the on-line system and then after that, typical checks is required for the further deposits.
Davelle: Okay, it’s funny that was going to be my next question, does it continue just being charged to your credit card or it’s okay checks, for the deposit?
Matthew Slutsky: It would be amazing for points but most people’s credit cards can’t handle that balance.
Davelle: Wow, and so was it difficult to get builders on board with something like this or were they all open to it?
Matthew Slutsky: It’s pretty amazing, builders … We haven’t launched it yet but pretty much every builder that we talk to is super excited for it, one that they’re getting sick of the basic excel sheets that often contain a lot of errors and they actually end up losing money when there are errors on there.
Matthew Slutsky: Two, they’re excited … Sales centers right now are typically closed on Fridays, open from 10:00 a.m. until 6:00 p.m. on Saturday through Thursdays and that’s when deals happen but this allows for a 24 hour sales cycle. So BuzzBuzzHome can actually act as a 24 hour sales center for these developments so you could be … A builder could be waking up at 7:00 a.m. and have done three or four deals in the middle of the night. Everybody’s schedules these days are different and the typical 10 to 6 doesn’t work for most people.
Builders are really excited for that, they’re really excited to get rid of the inefficiencies in sales centers. The amount of time wasted, the amount of resources wasted on just getting these deals back and forth between themselves, the purchasers, their lawyers, there’s huge inefficiencies there, so they’re excited to alleviate that. It looks like the market’s really ready for it and builders are calling us almost daily asking when it’s going to be ready because they want to start using it.
Davelle: Of course because they want to let all those foreign buyers to be able to buy on-line. I bet you that’s really what they’re excited about I think is that the fact that they foreign buyers will have easier access to their inventory.
Matthew Slutsky: There’s no doubt that foreign buyers will have easier access to inventory, currently they’re able … On BuzzBuzzHome as it currently is, foreign investors are currently able to access that inventory they’re just not able to purchase it so there’s definitely that aspect but the whole process in general they’re excited for.
Davelle: Interesting and so how does the paperwork work then? So, I go on-line, I plunk down my $5000 dollar deposit for a condo, during that 10 day rescission period how does my lawyer get access to all the documents that they need to go through?
Matthew Slutsky: It’s all an automated process so really kind of the high level in a nutshell, you go onto BuzzBuzzHome or wherever the transaction happens, you get the purchase of sale, you sign in all the places that is required, we have to deal with the FINTRAC requirements so you have upload a copy of your driver’s license and all that information then you put in your credit card information for the deposit, all of that then gets sent to the developer, the developer needs to sign off on it. Once he signs off on it, or she signs off on it, the executed copies get sent back to the purchaser with the condominium docs and then they have to log back into the system to confirm that they received all the condo docs, then it’s in their possession to be able to send to their lawyer.
Davelle: Wow, that’s cool, that’s amazing and have you gotten any pushback from people at all?
Matthew Slutsky: No, the push back has been you know there’s some people who say the market’s not ready for it or this is going to allow for people to make just rash decisions when they’re purchasing, you know they’re purchasing a $500,000 dollar home, they’re just going to be doing it kind of on the fly without having done their research, but the opposite is really true and through BuzzBuzzHome from what we’ve seen is people are doing even more research than they’ve ever done because until now, until BuzzBuzzHome was launched, there was zero transparency in the market.
Matthew Slutsky: We allowed people to start to be able to compare from their home other projects, you know BuzzBuzzHome has a listing of every development with up-to-date information so purchasers now, they may have purchased the one spot not even knowing that a new condo was launching a few months later nextdoor. So purchasers now can compare pricing, they can compare floor plans, they can see what’s launching, they can read about it through our news site and they can ask questions about the development. We have builder reviews so that purchasers can actually read reviews on builders or submit their own reviews so they’re a lot more knowledgeable now than they ever have been through our system.
Davelle: Wow, that’s amazing, that’s pretty impressive. What else are you guys going to do next? Is there’s anything else that you can do next after that?
Matthew Slutsky: Well, the big one is the move to a marketplace, that’s our huge push right now, that plus expansion. We’re also working on a lot of really cool little things, one example is we’re working on turning every floor plan on BuzzBuzzHome into a 3D model or 3D dollhouse of the floor plan.
Matthew Slutsky: Yeah, so since for eternity when you’ve been buying new you get a 2D floor plan, we don’t believe that purchasers fully understand 2D floor plans. Realtors who are in the business understand the 2D floor plan, investors who purchase a lot of units they understand the 2D floor plan but a typical end-user sees a 2D floor plan and they’re not able to figure out how the unit works, how they can walk through the unit.
Matthew Slutsky: So what we’ve tried to do is figure out an algorithm that can take a pdf of a 2D floor plan and immediately turn it into a 3D version with furniture so that’s really exciting. We’re experimenting with it right now, Pinnacle’s been using it, Mintos’ been using it, Citizen’s been using it and they’ve had huge success with purchasers saying they actually understand how these floor plans work.
Davelle: Wow, that’s awesome.
Matthew Slutsky: Yeah, so it’s really exciting so we’ve figured out how to automate about 60 to 70% of it, the last kind of 30 to 40% still needs human intervention but with every new test case that we take on, we’re starting to get better and better and further automating it. So, BuzzBuzzHome has probably 600, 700 thousand floor plans listed on our site, it will be really exciting when all of those can continuously be converted into 3D.
Davelle: Absolutely, and so when will this program launch, the program of being able to purchase on-line of a pre-construction project?
Matthew Slutsky: We’re looking for 2017.
Davelle: Ah, okay, so still a ways to go but you’re very close to launching.
Matthew Slutsky: Yeah, we’re close to launching, we’re in the final phase of the inventory management system, we have a few builders starting to test it out and the actual BuyNow process is currently being developed.
Matthew Slutsky: So, we’re getting very close which is really exciting.
Davelle: Awesome and have you ever purchased a pre-construction condo yourself, is it part of an experience that you’ve had as well?
Matthew Slutsky: Yes, both as a residence and as an investment.
Davelle: Cool, and so is it obviously-
Matthew Slutsky: Yeah, so I know the pains of it, first hand.
Davelle: So where in the city do you live?
Matthew Slutsky: Bathurst and Eglinton.
Davelle: Okay, cool, and do you rent, or own, or what?
Matthew Slutsky: We own, we actually just purchased our new house, which is actually a hundred year old house and we moved from St. Clair and Christie which is an incredible neighborhood but we’ve kind of always owned and we started out with a condo moved to a semi-detached, now in a fully detached. My wife and I both really believe in the Toronto market and think it’s going to continue to grow so there’s kind of the investment angle but then there’s also the home ownership angle. I just believe in owning my home and my land and if I’m going to be putting money into something, I want it to be something that I own so I’m reaping the benefits.
Davelle: Perfect, that sounds awesome, I’m a keen believer myself. Thank you so much for speaking with us today Matthew. Matthew where can our listeners find you or find your BuzzBuzzHome site?
Matthew Slutsky: So they can find BuzzBuzzHome at buzzbuzzhome.com or on Twitter @buzzbuzzhome, on Facebook at facebook.com/buzzbuzzhome, pretty much anywhere where you can put a BuzzBuzzHome on the end, we can be found there and myself, you can find me on Twitter anytime @islutsky, “i” as in letter “i”.
Davelle: Awesome, thanks a lot for speaking with us today Matthew, it’s been great having you.
Matthew Slutsky: Than you very much for having me.
Davelle: Thanks everybody for listening and you can find me at email@example.com or at Twitter @davellemorrison or on Instagram @davellemorrision. Thanks everyone for listening, bye for now.
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