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Show Summary
In this episode of the Real Estate Pros podcast, host Micah Johnson interviews Matthew Mah, a successful real estate agent specializing in pre-construction properties across Canada. Matthew shares his journey into real estate, the intricacies of the pre-construction market, and insights into the current market trends influenced by interest rates. He discusses the importance of building relationships with builders, the cash conversion cycle in real estate transactions, and future opportunities in the market as inventory levels are expected to drop. The conversation highlights the unique aspects of the Canadian real estate market and offers valuable advice for investors and agents alike.
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Investor Fuel Show Transcript:
Matthew Mah (00:00)
because it was so bad the last couple years, nothing really has been constructing.⁓ It’s all the stuff from before and so no one has made enough sales to start and break ground construction Which means that we’re gonna have a drought in inventory for about four years from probably 27 to 31 Of zero inventory coming in and we all know what that happens when when there’s zero new inventory coming in Especially in a major city like Toronto. The prices are bound to like start skyrocketing
Micah Johnson (00:31)
Right.Hey, everyone. Welcome to the Real Estate Pros podcast. I’m your host, Micah Johnson. And today I’m joined by Matthew, who’s been making some serious moves in the Canadian real estate market since 2016. Matthew, welcome in, man. Glad to have you. Absolutely. For sure, man. I’m excited for you to be here today.
Matthew Mah (02:18)
Hey, thanks Micah. Appreciate it.Micah Johnson (02:23)
I think our listeners that, especially in the Canadian market, you’re going to take some value away from one, your experience doing what you’re doing and then getting a good view on what’s going on in the market today. So let’s dive in, man, for people may not know you yet. What’s your main focus right now and what markets do you operate in?Matthew Mah (02:39)
Yeah,so I operate in the GTA, Greater Toronto region, Montreal, Calgary, Edmonton, Vancouver. I even do some in South Florida, as well as Tulum. And I do mostly pre-construction real estate. That’s a specialty.
Micah Johnson (02:40)
Yeah.For those who are listening that may not know what that is, take us into it a little deeper. What’s pre-construction real estate?
Matthew Mah (03:06)
Yeah, that’s fair. ⁓ Pre-construction real estate is basically buying direct from the builder in the sense that you’re buying at the pre-construction phase. So the earliest part of the project, which is usually the cheapest part of the project as prices increase, as less inventory is available as the project progresses.Micah Johnson (03:28)
Interesting, man. So take us a step back. What led you to where you are today? How did you get to this kind of real estate?Matthew Mah (03:36)
Yeah, know,I most agents start off they get their resale
license and that’s like a general practitioner in real estate. ⁓ And then there’s there’s different specialties like commercial. ⁓ Commercial has many of its own. And then pre construction appeal to me because I picked up like ⁓
grunt work job at one of the builder sites in Mississauga called Edge Towers. They’re paying 20 bucks an hour. They needed a few part-time.
help.
⁓ So I went in there, I had just an intentions to learn to be honest, because like I had no idea about the pre-construction world. And moved at such a fast pace and it just really opened up my eyes. Within like a two week span, I’m seeing agents do between three and like 40 deals in a very short span of time. So I’m just like, wow, how do they do it? What are they doing? And what I gotta do to get there and whatever.
Micah Johnson (04:29)
Right.Right.
Matthew Mah (04:35)
Needed to happen, just made it happen.Micah Johnson (04:38)
And these are like condo buildings, correct? How many units are typically in one of the pre-construction buildings you’re working on?Matthew Mah (04:44)
Yeah, that’s fair. An average condo out here ranges probably, let’s say 400 units.Micah Johnson (04:51)
Okay. So that makes sense on how that volume can happen. Cause y’all are, if I’m, if I’m getting this right, correct me if I’m wrong, you’re getting to sell these before they’re built. So you are selling for the builder to an in buyer before it’s built, correct? So you’re getting access to all this inventory. Now are these special relationships to do other agents get this same chance or is it kind of a closed environment?Matthew Mah (05:05)
That’s right. Yeah.It’s a tight circle. It’s called a platinum circle and each builder has their own list of platinum agents you can say who have first access ⁓ to the first pricing and obviously to inventory because some projects they sell out like on a weekend so you may not even have a chance to access it. There are different phases of the launch for sales. It’s like
It’s I would say like the friends and family first, then it goes to platinum launch, then regular ⁓ agents launch if there’s any inventory left, and then public launch. But each phase prices go up and inventories less, right? So ⁓ yeah, you kind of have to earn your way up there. At first, you have this. If you if you if you’re not a platinum agent, you probably have to work off the crap that’s left like builder inventory that’s undesirable. And ⁓
Micah Johnson (06:43)
Right.Matthew Mah (06:58)
and try to get their attention. And so once they see it consistently, they’re going to give you a chance for a platinum launch.Micah Johnson (07:08)
That’s interesting. This is, I’m not saying that part doesn’t exist in America, but I hadn’t heard about that opportunity here before. I got started as an agent, but I wasn’t an agent in the normal world for very long. I switched pretty quick over to the investment side. ⁓ So I find it fascinating, man, because it really is an opportunity. so you can, you can then build relationships with as many builders as you want then, right? So you can have quite a book of folks that are calling you to start.Matthew Mah (07:21)
Thanks.Micah Johnson (07:38)
moving units at volume.Matthew Mah (07:40)
That’s right, and that’s right. And I think that’s probably one of things I love about this job, because I like to travel. ⁓ And that’s why I can spread out to different cities as long as there’s pricing makes sense and we get paid most of all. And also, it makes sense for the buyers and it opens up opportunities for all of the investors that we deal with.Micah Johnson (08:02)
Makes sense man. What’s your cash conversion cycle? Like once you sell that unit, how long is it till you actually get paid on it? Is it after it’s built? Is there any prepayment?Matthew Mah (08:11)
Yeah, that’s fair.There is some risks on both sides as because not all buildings get built and not all buyers close, right? So I think that ⁓ most builders will pay out about like half of the commissions, maybe six months after the deal is firmed up. And then the other half gets paid out probably two to three months after the building is closed and the buyer is closed on the product.
So yeah, they give you some juice prior to and the rest is like a building out here takes about four to six years to build. it’s got to build your pipeline. Not everybody
Micah Johnson (08:50)
Okay, so there can be some common there.Matthew Mah (08:53)
can also because not everybody can hold out for that.Micah Johnson (08:58)
That’s right. you and that’s like commercial deals. They pay a lot. Yes, but they take way longer to close. So when you’re in a position that you need a quick cash conversion cycle, messing with things that have a long one can make that run pretty hard.Matthew Mah (09:13)
Yeah, yeah,that’s for sure. You just gotta pick your poison. think even in the pre-construction world, once you’ve earned your place, you have access to…
like what’s happening right now, ⁓ there’s a lot of closings and ⁓ not everybody can close. And so the builder can’t flood the resale market on MLS with all of the listings. So they actually may only put one or two or zero on there. And then the rest of it, they get it at like a very low price and all the platinum agents get to tackle that on the side. So we get exclusivity, it closes fast, it pays ⁓ quite a bit. ⁓
and ⁓ it’s lower than resale, so it’s easy to sell to some of our buyers.
Micah Johnson (10:33)
Now, do you invest in any of these yourself?Matthew Mah (10:36)
Yeah, yeah for sure. I bought my first one when I was 18 and been flipping them since and now I just hold because I have a little bit more cash flow andYou know, it depends on the year. So some years I buy like 10, some years I buy one. But definitely it’s a passion of mine. Like it’s more than just a job actually. Enjoy real estate and ⁓ yeah, I look at it at night. Some of my exes question what’s wrong? Like all my ex-boyfriends look at porn, but you look at floor plans and you’re showing me floor plans at night.
Micah Johnson (11:16)
Look, man, us real estate folks were a little bizarre. It’s a ⁓ if you got the bug, you got the bug. The things that you like talking about some of the reasons I like belonging to groups, masterminds, things like that is those of us that really enjoy it. We can’t find that many of us around because most folks don’t want to talk about what we want to talk about. Like you’re saying, like my wife could care less. She doesn’t. None of none of the houses and things I like to talk about.Matthew Mah (11:20)
Yeah.Micah Johnson (11:44)
Okay, babe, that’s great. And ⁓ getting hold of those folks where you can dig in and nerd out, man, it’s a good time.Matthew Mah (11:50)
That’s it,that’s it. Yeah, 100%.
Micah Johnson (11:54)
So tell us a little about the current market that you’re dealing with from the investor perspective and that agent perspective. What’s it like out there right now?Matthew Mah (12:04)
I would say that we’re similar to most North American markets ever since the interest rate hikes went up to control inflation.or to take back money, it depends how you look at it. The market’s dropped, it’s dropped. It went from a high after COVID and it dropped in like 22 and it’s been dropping, but I do see light because obviously the interest rates stopped increasing and they started going the other way and started decreasing. So we’re in like a balanced interest rate market right now, holding around like 3.8.
And, you know, so I feel like this year it’s gonna drop a little more in terms of flex sales in Q1 and two, but it’s gonna balance out because we do see a lot of buyer activity right now. They realize that.
It’s not really going to drop that much more in the interest rate. They haven’t been continuously dropping. They’ve actually held for about the last eight months. So, you know, they’re coming out to buy. So I think the market will get balanced out by the end of the year.
Micah Johnson (13:16)
That’s interesting, man. We’re seeing that some in America where more and more folks getting used to just what the numbers are, right? You talk to an investor or buyer back in the eighties here and they had 18 % interest rates. So they look, they look at the number and it’s nothing to them, but now we’re getting more and more used to it. I was having a conversation with someone, agent or a broker a couple of days ago, and they were talking about where we’re at now.If you do it right now, you can, know, sellers are softening up.
They’re starting to realize that that gap’s closing. I actually need to come down. The heyday’s over of just being able to ask for what want. And if you balance it correctly, you can get a better price property. You may not love your interest rate that you’re in right now, but if you wait to buy for the interest rate to get low, the price of the property is going up. So there’s this like little
Matthew Mah (14:03)
That’s right.Micah Johnson (14:06)
balancing lever in there where right now there are some good deals out there and you get them now.Things continue like we think they’re going to do here over the next few years and interest rates go a little more down. Now you can refile out into a better position and keep that purchase price. That’s something a lot of folks in the retail world kind of lose track of is that that purchase price is important, especially when it comes to interest, because those things touch each other. They’re there. They have somewhat of a relation.
Matthew Mah (14:33)
You’re right.I would say they’re directly correlated. So 100%. I think,
Micah Johnson (14:38)
Right.Matthew Mah (14:40)
well, I mean, it’s just the way our society is in North America, right? They try to feed us to run the matrix and go on our hamster wheel, but you got to do whatever, you almost do what the opposite is, right? So like, for the most part, because banks will always try to get you in on a variable when they…they know that it’s going to go up and vice versa. They’ll try to get you on a fix when they know it’s going to go down. you you got to do the opposite in terms of what the grain of thought is. So always buy low sell high, think, you know.
Micah Johnson (15:17)
Right.I saw Buffett’s quote again this morning, you know, when people are fearful, be greedy. When people are greedy, be fearful. Like pay attention to which side you’re on. And it is somewhat counterintuitive. And that’s what investors learn by being in the industry for so long. That’s what good brokers and agents learn is it’s somewhat counterintuitive unless you do it every day, unless you see it happen over and over,
Matthew Mah (16:22)
Right. Right.Micah Johnson (16:24)
because most folks don’t see it. Real estate is a big thing.Matthew Mah (16:29)
No, they don’t see it and it’s whatever mainstream media feeds you and they feed the fear, right? So you gotta, to really win, you gotta go against the fear, right? Yeah.Micah Johnson (16:41)
Exactly, man. And that’s the part that kind of bumps me out the most about it. Fear is a powerful tool to use against somebody. You can get folks to do some wild things when you scare the heck out of them. And like you’re saying, and it’s one thing, I think I just turned 40. I think our generation is doing pretty well with it. Yeah. Happy birthday, man. Yeah. Where it’s, we see it. Like we can hear the noise and not, okay, that’s just noise. I know what you’re doing to me. And I think that’s going to be powerful forMatthew Mah (16:52)
Yeah.Happy Mother’s
Micah Johnson (17:10)
This is beyond real estate conversation, just how we process information. As we age, we know that it’s mostly just garbage that you’re feeding us and we’ll have that ability to start changing it. Where I’m hoping for my kids and my grandkids, the way they get information isn’t the angry way. Isn’t that way where someone’s just trying to upset them for clicks and all the things. Cause we’re the ones learning firsthand, Hey, this ain’t useful y’all. Folks running around freaking out ain’t helpful at all.Matthew Mah (17:32)
Yeah.No.
No, it’s not helpful, but it’s what they do to drive the economy, right? Yeah.
Micah Johnson (17:45)
Right, right man.Gotta keep things going. So what’s your big opportunity for 2026? What are you excited about?
Matthew Mah (17:54)
26, crap. I would say there’s a lot of things that are exciting coming up. I’m working on a new AI dialer, which is gonna be exciting. It’s gonna be efficiently hitting my thousands of back end CRM, but I’m gonna be shooting it out to other friends and agents and other businesses as well. I think that’s gonna be very efficient on the back end.But also for the market to turn around, right? Because it’s gonna turn into a balanced market by Q3 and 4 over here. So we’re expecting higher sales overall. And
because it was so bad the last couple years, nothing really has been constructing.
⁓ It’s all the stuff from before and so no one has made enough sales to start and break ground construction Which means that we’re gonna have a drought in inventory for about four years from probably 27 to 31 Of zero inventory coming in and we all know what that happens when when there’s zero new inventory coming in Especially in a major city like Toronto. The prices are bound to like start skyrocketing
Micah Johnson (19:05)
Right.That old supply and demand function starts kicking in pretty heavy at that point. If there’s nothing, especially when nothing new is coming in, that’s a tough place to be.
Matthew Mah (19:16)
Exactly.Micah Johnson (19:17)
And it’s so fascinating to think about, because you’re right, y’all, you can project that out. Like, you know for sure how long these take to build and that no one’s been building. So this gap, it’s always going to come. I call it farming time. It’s for sure coming. Like it’s out there. You’re just waiting on it.Matthew Mah (19:17)
That’s it.That’s it.
Micah Johnson (19:37)
Well Matthew man, I really appreciate your time today. Thanks for your story, your perspective. I love being with folks, learning about different markets, what you got going on. So for those folks that are listening and watching in, I would like to find out more about you, see what you have going on. What’s the best way for them to find you?Matthew Mah (19:51)
⁓Well they can reach out to me on Instagram, it’s @matthewmahimpact So ⁓ DM me and I’ll hook you up with a good deal.
Micah Johnson (20:02)
Love that, man. Well, thanks again for joining us. For those that are listening and watching, thanks for joining us as well. If you got value out of today’s episode, please like this episode, share it with someone else you think can get value out of it. And as always, please don’t forget to subscribe to our podcast. We appreciate every single one of you out there that follows along. We have more conversations coming up with operators just like Matthew who are out there building a real business in the industry. Thanks for joining us. We’ll see you on the next episode.Matthew Mah (20:27)
I appreciate
