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Show Summary
In this conversation, Dylan Silver interviews Natasha Phipps, a Calgary-based real estate investment specialist and CEO of Wealthshare. Natasha shares her journey into real estate, discussing her early influences, the various segments of the market she focuses on, and the challenges faced by investors in Alberta. The discussion also covers the importance of long-term investment strategies, the current lending environment, and the decline of home ownership in Canada. Natasha highlights her work with Wealthshare, a private REIT that allows individuals to invest in real estate with lower capital requirements, fostering a community of investors.
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Investor Fuel Show Transcript:
Natasha Phipps (00:00)
So fix and flip is definitely more challenging, especially for, you know, newer folks who are like, I’m to just try a flip. No, like you might get eaten alive out there a little bit right now. You need to be kind of like that. That’s your focus. That’s what you’re doing. And I always tell people to like,True wealth and real estate is not made on those short-term stuff. Like, yes, you can build up some cash to do something with it, but the true game of real estate is that long-term buy and hold approach.
Dylan Silver (01:59)
Hey folks, welcome back to the show. Today’s guest, Natasha Phipps is a Calgary based real estate investment specialist and CEO of Wealthshare. You can find her online at phippsgroup.ca and wealthshare.ca. Natasha, thanks for taking the time out today.Natasha Phipps (02:18)
Yeah, thanks for having me. Excited to be here.Dylan Silver (02:20)
It’s great to have you on here. And I typically like to start off this show by asking folks how they got into real estate, but you’re involved in a number of different segments. I want to ask youyou got started working with investors.
Natasha Phipps (02:34)
Yeah, I was lucky enough to find that niche pretty young. ⁓ I kind of got lucky in real estate early on, but the first and foremost thing that got me into real estate was actually my mom. ⁓ She worked at the bank and we lived in the country. So when I was, you know, moving out of home for the first time, she really explained to me how mortgage works and how, ⁓ you know, did I want to go pay down someone else’s mortgage or my own becoming a tenant or a homeowner? And that really got me going. ⁓And I was lucky enough at the time that real estate in Calgary was kind of really doing this thing. So through university and my kind of early years, I was doing several real estate transactions and got hooked pretty quickly. So by the time I got out of university, I knew that’s really what I wanted to do.
Dylan Silver (03:20)
Now, did you know immediately that you wanted to work with investors?Natasha Phipps (03:25)
No, I knew I wanted to get into real estate in some capacity. I knew I didn’t want to work in an office, nine to five, typical sort of ⁓ lifestyle. But I knew I had made a significant amount of money in the investment real estate space. And at the time, there wasn’t the access there is now to information or opportunities or groups. Now there’s so much stuff. So back then, I really started thinking about what I loved about real estate and in talking to people,very quickly that became what I wanted to focus my time on and how I knew I could best help my clients, whether it’s a primary home or an investment home. I think as realtors, we should be having that moment to take a look at what we’re doing with our money as an investment.
Dylan Silver (04:08)
Yeah, and when we talk about the investment space, there’s so many different segments to get started in and to work with investors in. Is there one particular segment that, know, FIPS Group focuses on, or is it ⁓ multiple different segments and active across the board?Natasha Phipps (04:25)
Yeah, we focus on single family and into multifamily residential real estate here in Alberta. ⁓ We were not specialized in kind of the other niches of commercial real estate. So really, you know, long term buy and hold real estate is the majority of our investors. Then we have our flippers and our developers and that kind of thing as well, but all encompassed in the ⁓ residential space.Dylan Silver (04:48)
30 day short term rentals under 30 day stays, are those feasible up there?Natasha Phipps (04:54)
⁓ So, yes, they are. So Alberta definitely has the least amount of restrictions in Canada on these types of things. Buta lot of the buildings themselves now are saying that’s a no-go. So for most people doing short-term rentals here in Alberta, just west of Calgary, most people know the Rocky Mountains and Banff and Canmore. ⁓ There is the ability to absolutely do short-term rentals out there because it’s a whole different.
game. ⁓ So short-term rentals work well there, but they can be challenging in the city unless it’s single-family real estate. Then you’re in control, you get to do what you want with your property.
Dylan Silver (06:20)
As we’rehere, I’m realizing, I think this is the first conversation that I’ve had talking with a Canadian investor, and I’m shocked about that. And I’m realizing, goodness, I gotta ask some pointed questions. When folks are looking for deals, I mean, I’m a Texas licensed realtor, but I’ve lived on the East Coast, and I live abroad right now. ⁓ Typically, the first place that they’re gonna check with is on market, on the MLS, right? But in Texas specifically,
Natasha Phipps (06:28)
ThankYeah.
Dylan Silver (06:47)
everyone’s looking at the MLS. And so right now, especially you’re not going to find for the most part, you know, deals that underwrite on the MLS. How are most most folks finding like a single family ⁓ property to rent or to flip? And is it different depending on what they’re looking for up there?Natasha Phipps (07:05)
Yeah, I mean, the MLS is still the largest driver of deals, I would say. But the best deals, you know, that you’re going to find, especially if you’re looking for a flip or a project or something, you know, that’s a little get your hands dirty type thing ⁓ is often found off of the MLS. And then more so we move into multifamily real estate as well. A lot of those transactions are done off the open market. SoHaving your realtor who has the connections, knows who’s who and who’s doing what definitely pays off here too.
Dylan Silver (07:38)
That’s a huge thing. I feel like there’s this disconnect between realtors who work with investors and realtors who don’t. But as someone who’s done a little bit of everything, I look at it and I think that there’s this opportunity for every realtor, especially folks, I feel like anywhere in the United States.to send out referrals super easily, right? So if you’re not, if that’s not your primary avatar, the person that you work with, but you know someone, hey, there’s this distressed property here, I could send out this referral this way. Like that’s a whole book of business that people are missing out on, I feel. I do feel like people should at least consider working with investors or with retail buyers just so that they can get that extra ⁓ margin in their business.
Natasha Phipps (08:28)
Absolutely and investors tend to invest in different markets, right? So having your kind of core group referral partners in every major Canadian city or wherever you are sending your referrals to the US is a great way to diversify, reach a new group of people and another stream of income, of course.Dylan Silver (08:48)
I want to ask you specifically about some of the ways where folks are finding success in the markets that you’re active in. mentioned single family, yousome multi-family as well. I’ve seen this trend recently and I don’t know exactly how long this has been going on for. In Texas where I’m licensed, not really away from fix and flip, but it’s just a little bit more challenging to flip properties when you have so much new construction going on in Texas specifically.
Is the market similar up there? Is there not as much new construction? What’s the effect that that has up there?
Natasha Phipps (09:24)
Yeah. Well, Alberta has seen a massive influx of population from the rest of Canada to our market. huge amount of construction going on in the last five years.So fix and flip is definitely more challenging, especially for, you know, newer folks who are like, I’m to just try a flip. No, like you might get eaten alive out there a little bit right now. You need to be kind of like that. That’s your focus. That’s what you’re doing. And I always tell people to like,
True wealth and real estate is not made on those short-term stuff. Like, yes, you can build up some cash to do something with it, but the true game of real estate is
that long-term buy and hold
You can improve the property and do all these things to lift the value, but you really need to give it time as well. So new construction has been a big issue. ⁓ And also like exterior developers from, they’re not, you know, local to us have been trying to do projects here.
⁓ And things don’t really work the same here as they do in other markets. So certainly interesting time, but a lot of competition out there on the rental side, resale side, new construction side.
Dylan Silver (11:04)
I’ve also seen that more folks are getting into new construction and it’s not easy because you’ve got to be a developer, right? You’ve got to understand how to put a home up, which is different than, you know, rehabbing a kitchen, right? So now you’re dealing with soil testing and foundation, not to mention the zoning and permitting issues that I know investors are supposed to pull permits, but how many of them do in some cases and they just kind of get through this job before anyone notices. ⁓ And so…when you’re doing ground up new construction, there’s so much that goes into it. It’s definitely another segment of real estate. And I’ve seen more people pivot into this. And one of the ways where I’ve seen it most is, know, someone who might be a flipper might partner with someone who might be in ground up new construction. And then they might do a couple deals that way as well.
Natasha Phipps (11:54)
Yeah, I think, you know, there’s certainly money to be made there. Here in Calgary, they are allowing more density than they ever have, which might get revoked, but right now it’s here. And that has, you know, sparked a lot of people to maybe I’ll become a builder, maybe I’ll become a developer. And my job in this space, how I look at it is helping people kind of align their skills and their resources with the best strategy for them. And it’s not for everyone. Like the level of variables that start increasing, the more risk.really is something to consider when you’re getting into this space because the problems cost a lot more when things don’t go quite right or like you said, things change, processes change, purpose change. So yeah, really that alignment of strategy with the client is something that I love to spend time on.
Dylan Silver (12:43)
Lately, I’ve been seeing a ton of people, a ton of people coming to me asking me if I can find them deals to make seller finance offers on. And I was almost like, where are all these people coming from? ⁓ Commercial deals, I had people asking me, hey, can I make an offer on a gas station for them? Can I find them some ⁓ small multifamily properties under 50 units? Have you seen this as well? Is this something that you fielded up there in Calgary?Natasha Phipps (13:09)
Absolutely. ⁓ think, you know, the how many ways to buy real estate with zero dollars has become a ⁓ educational and marketing trend out there in the coaching world. And, you know, does it happen? Yes. Is it, you know, is it abundant and is there, you know, huge amount of deals to be had? No, it really does take grinding it out there to find those sellers that that are maybe super distressed or property super distressed. I do see it more in the largermultifamily deals where there could be some level of PTP available. But usually that’s not what these people are looking for. They’re looking for the smaller stuff, exactly what you’re talking about. And if it’s a good deal, it’s tough because you’re competing likely with someone who can just pay cash. So ⁓ it’s really challenging to find.
Dylan Silver (13:53)
Yeah.I’ve seen so many people reach out to me about this. And I know in the single family space when, you I would be working with sellers and buyers who were interested in some type of sub two offer, or some type of seller finance, that we would have to make like 100 offers in order to get one of those to fall. And so if you put up enough shots, like one is ⁓ gonna fall, ⁓ the other aspect of it too is that in the multi-family space, in Texas specifically,
there’s a significant amount of distress in operators because what happened like over the last five years is people just bought so deep. bought thinking like, what’s the worst that could happen? And then boom, COVID happens. And now there’s a moratorium on rents and then everyone’s building and then materials increase in price and then arm rates go up. So now you’ve got double the mortgage payment on these properties with potentially tens, not hundreds of doors. Like, what do you do?
there’s a significant amount of distress from multifamily sellers as well.
Have you seen any of that? I know that that’s not necessarily your primary segment, that larger multifamily, but have you seen any of that up there?
Natasha Phipps (15:47)
Yeah, I mean, our lending environment here is very different here in Canada than in the US, but certainly what we did see was kind of coming out of COVID, you know, incentivized type of lending, which allowed for higher loan to values and, and, know, more favorable lending terms, which put you in a very small box when things start to go wrong. Right. ⁓ And so what I think we’re going to see here into the next year too, was we were kind of at the height of valuations here in Alberta last year.And anyone who is kind of planning their projects around those rent rolls or those numbers or those expenses, it’s going to look very different, especially if they’re in the new construction space coming into next year or the following year where those rental rates might not hit what they were hoping to hit. And so now you might feel upside down on your project, right? So in those scenarios, you might be able to get creative and be a problem solver and come to the table to these people with something that might be mutually favorable.
Dylan Silver (16:32)
Yeah.Pivoting a bit here, Natasha, how often do people come to you and say, hey, look, I’m interested in investing in real estate, not exactly sure, I wanna do this, I’m not sure if this is a good idea, can you give me your feedback? Versus are they saying like, this is exactly my buy box, if you can find me something in this that I’m buying it. Or is it a mixed bag?
Natasha Phipps (17:04)
That’s a good question. I would say like more often than not, what they think they want to buy is not what they buy when they actually, when we actually get into it, right? We actually start talking about numbers, figures, strategy, risk, all of the things that maybe they haven’t quite thought of yet. And so, but that’s what our job is, right? Our job is to help them identify that, ⁓ and to really try to set them up with success. Cause the awesome thing about working with investors is they will keep growing andand buying more real estate if things are working. So we take a high level of responsibility of trying to guide them in the best direction possible. And that’s something that we do really.
Dylan Silver (17:42)
I want to ask you, mentioned briefly the lending environment is different. I’m woefully ignorant on the lending environment in Canada. Can you break this down to myself and to our audience? know, what’s it like? And on some level, maybe contrast that with my experience trying to get people approved across the States, which is it’s very challenging in many cases.Natasha Phipps (18:04)
Yeah, and obviously things weave over time here, but the largest difference in Canada is just the amount of lenders available is significantly smaller and the ⁓ federal oversight, excuse me, can’t take a drink, is much higher. And so what that means is, is there is ⁓ more oversight in terms of what a lender can offer, what can be, you know,put out there to the market. And so the list of your options is much smaller from my understanding than the US. And so it does make it more challenging ⁓ to potentially find capital if you’re out there looking for it.
Dylan Silver (18:47)
One of the things that I’ve heard and I wasn’t involved in real estate at this point in time, but we had, you know, the housing crisis, you know, global housing crash and then around, and I don’t quote me on this, but I want to say it was around like 2010, 2012 timeframe. I could be horribly wrong there. There was this God Frank act in the United States, which changed the way that loans were being processed. so, you know, previously in movies like the big short, you would see like people were justhanding out loans and that mortgage operators were making money hand over fist. And that wasn’t that long ago. That was like 2006, right? And so you go from that environment to where we’re at today, which is, know, I don’t, and I hate to say this, but I don’t know that there’s so many young people who are like super optimistic about home ownership in the United States because it does seem like they’ll go to a realtor. The realtor will send them to a lender. The lender will say, yeah, you know, you’re not approved. And
Natasha Phipps (19:17)
Yes.yeah.
Dylan Silver (19:44)
you know, now that I’m in the business and seeing it, I also know that there’s a huge, you know, variance between what one lender can do and what another lender can do. And there’s down payment assistance programs and so on. But it is does especially for younger people feel like this uphill hill battle in the States to help to home ownership.Natasha Phipps (19:54)
Yes.Absolutely. Same here. mean, the rate of home ownership here in Canada is rapidly declining, which is concerning. I think it’s so much more challenging to get approved. Interest rates are a problem. Rising costs of everything are a problem. Just what it costs to even get into the market period is a huge issue here in Canada. That’s why a lot of people have actually been moving to Alberta is because it’s more affordable to live here. We have a lower tax environment.
⁓ where you can actually get by with less here. ⁓ But that is still a huge challenge. It’s really taking like our parents to help the younger generation to get going into home ownership. Otherwise, they may not have a hope until they’re in their 40s or 50s rather than what used to be in your 20s or 30s. So it is a huge problem here.
Dylan Silver (20:50)
there’s this this on ramp that I think people were kind of expecting. ⁓ You know, I’m going to do this, go to school, this happens and then homeownership and that seems to be now, you know, a crux of ⁓ almost a cultural conflict between people where we’re saying, well, when is this going to happen for me? And honestly, that’s 50 % of the reason why I got into real estate was because I was seeing how difficult it was. And in my mind, I was like, well, if I can’t beat them, join them. Like if I can’t figure out how to do this outside ofyou know, this real estate space, let me figure out how to do it. And then the other half too was I was working ⁓ in the automotive space and I just did a Google search, like what are the ways to build wealth? And real estate was just what Google told me. I thought I was alone in searching that, but apparently a lot of the guests on this show have told me that they’ve come into real estate through a similar way. ⁓ But I do want to ask.
Natasha Phipps (21:31)
I’mYeah, we’ll do it.
Yeah, for dad book. That’s a big one.
Dylan Silver (21:42)
Rich Dad,exactly, that’s another one, We are coming up on time here though, Natasha, any new projects that you’re working on or how can our audience reach out to you if they’re interested in reaching out to you or your team?
Natasha Phipps (21:55)
Yeah, so my kind of largest project in the last couple of years with two of my co-founders, Rodney and Monique, we have founded a private REIT here in Alberta. So I am super passionate about people investing into real estate, realtors investing into real estate. And so I still have my real estate team, but WealthShare allows a passive way to invest in real estate. And that’s something that, you know, more sophisticated investors, we kind of start out doing our own active thing.But then we learn that we need to be able to diversify and we can’t do everything ourselves. So we allow a vehicle to invest into real estate ⁓ with $5,000 or more using your cash or your registered funds. And we’re also teaching and building a community with it. So we have about 300 investors in that ⁓ community now and started a few years ago with it. So that’s kind of what I’m working on now and trying to translate everything I’ve learned to the last.
20 plus years in real estate and try to make that more accessible to the average consumer.
Dylan Silver (22:57)
Natasha, thank you so much for your time today and thank you for coming on the show.Natasha Phipps (23:01)
Thanks for having me.
