INTERVIEW: DEVELOPER BRAD LAMB ON BUILDING WEALTH VIA REAL ESTATE INVESTMENT

Following the Toronto market over the years, and talking real estate investment, one of the prominent players has been developer Brad Lamb. We long ago forgave him for the cheesy Lamb billboard signs around the downtown. That of course was why they worked – since we’re still talking about them.

Related: Toronto real estate: How to win a bidding war

Lamb has done some great work here. Around the corner from our home in the Toy Factory Lofts in Liberty Village is one of Lamb’s projects we always admire on our walks. That one is Parc Lofts, overlooking Stanley Park, with a great city skyline view looking east. The suites there are private, almost a quiet luxury, with high level design and huge balconies. Lamb designed it with just 103 homes (ten-foot ceilings) so it doesn’t overwhelm a neighbourhood with its weekend dog walkers and summer-time park goers. Stanley Park is one of the downtown’s treasures.

So we’ve long admired Lamb for what he’s done in the city, from a real estate investment perspective, and that’s not kissing up. When the offer came to speak with him we jumped at it, since it’s always great to get the perspective on how the Toronto real estate market and downtown core is rapid-fire evolving from someone who’s walked the walk. Lamb’s big on property development in Hamilton now, which he says is at the development point that Toronto was ten years ago. He has some projects in that city that he’s excited about. But a look at luxury real estate investment in Hamilton is for another day.

Real estate investment: Why young people need to get into the market

In Toronto, from a development perspective, the east part of the downtown is where it’s at now, he tells us. Lamb’s new Bauhaus development at 284 King St. E. is a statement about that.

If you can find an opportunity, getting into the real estate at a young age will pay enormous dividends later in life. That’s a massive understatement, but it still needs to be said. That’s especially true in the Toronto real estate market, currently enormously competitive, and only going up in terms of values.

The foundations are there for Toronto to continue its emergence a true world capital city. Low borrowing rates, stronger economic numbers, an exciting, thriving downtown urban lifestyle, an influx of new Canadians and students that boost real estate values – these are a few of the factors. The only negative we can see is the inventory squeeze that’s causing red-hot bidding competitions and bully offer scenarios.

Hopefully our government levels pull their heads out of their collective keasters in the short-term future with housing policies that address the supply realities. The creation of housing is of course where people like Lamb come in. He is big on boosting real estate as a pathway to wealth, in our conversation with him. That’s based on his own experience as a young person investing in London, Ontario, when he got his start buying real estate:

Where did it all start for you?

“I bought my first rental property in 1985, after graduating (from university) in 1984. I bought a townhouse in London, Ontario. I was an engineer, at the time, making $21,000 a year. It dawned on me then that I had to get into the real estate market. I had little money. And it was $32,500 to buy that townhouse. I had saved $2,500. And I lived with my parents, until I was 30, to save money. It was a huge stretch for me to buy that townhouse. But I bought it with my two brothers. We each put in $2,500, and at the time it as a massive stressful thing to do. It was a stretch. At $21,000 you are pocketing around $1,300 per month, and I had to pay insurance, car, gas, etc.

“But I got into the market and I sold it a year later for $55,000. So with my $2,500, my one third stake was now $10,000. I more than tripled my money and had almost $13,000 and with that I bought two new townhomes myself. I kept those for a few years and then bought eight townhouses. And that’s how I did it, year by year, like a turtle moving slowly, but moving forward.”

How can young people get on the real estate ladder?

“That’s the thing with young people. You put the foot on the gas and you need everything today. Anyone can buy a home in Toronto if they have a decent job. They can buy a home with friends, with family or in installments.

“There is a girl who works in my office. When she first came to me to work as a real estate agent, she said she wanted to buy a condo in one of my buildings. I told her she would need $35,000 to make a condo downpayment. She told me she could give me $1,200 per month. It would take about three years to build it. So she would pay her deposit before the building was built. I said sure. She took a second job, working in a nightclub, as a server.”

Real estate investment: Find a way to get into the market and stick to it

“Every single month she came to me with that $1,200 cheque and she got it done. At the time this was difficult. This was eight years ago. And when the condo was finished, it had gone up $150,000. So she bought it for $250,000, and it was worth $400,000 when she took possession. She lived in it for a year, she still owns it, and it’s now worth $635,000. She paid off a ton of her mortgage and she now has $500,000 in equity.

“What was typical about her? She had a job selling real estate, which is a tough job. You don’t make a lot of money. at the start. It’s stressful, no one is giving you a salary. And she worked every Friday and Saturday in a bar to get there. Now she has a house, which she just bought with her new husband, for $2.5 million. And she also has a secondary condo. So she has a house and two condos. So she did it. And today people can do that too.”

Turtle-like progress, one step at a time

“Anyone can do it, you just have to think of a way. You don’t have to buy your own house, just get four brothers together, or three friends. Cobble together $20,000 for a downpayment to get into the market. The problem is people have this defeatist attitude, that it can’t be done and life is unfair. Life is unfair, it’s terribly unfair.

“But it doesn’t mean you can’t buy a house in Toronto if you put your mind to it and stick to it. You have to give up things. When I lived with my parents, I didn’t enjoy that. I wanted my own place. I didn’t go out a lot, and saved every dollar. I kept my life simple and squirrelled away my money. So by the time I left my parents’ house I was a millionaire.”

Shelve the defeatist attitude

“So I gave something up, my early years, for a goal, and that was financial independence. I didn’t want to have to work for someone. I wanted to be my own boss, and I gave stuff up. And if everyone wants to do this, get into the house market, obviously you need to have a job. If you have a job where you are making $80,000 in Toronto you can get into the real estate market.

“And you can’t take the defeatist attitude that life is unfair, and everyone has it easier. Because I tell you, when my dad bought his first house, he cleaned the bricks himself so his hands were bleeding. People sacrifice, even back then in the 1960s. It was hard for me and I did it. And it’s no harder today. But people just imagine it was easier in the past, but it wasn’t easier in the past.

Real estate investment: Red-hot Toronto market

“(The market) is going to keep growing. You will get a good return on your money. Short of some kind of military coup, or some natural disaster, (it will keep growing). You look around and see 90-storey condos being built downtown.

“What’s happening in Toronto is not happening anywhere in the world. People are coming from all over the world to understand what is happening here. Because they don’t get it. We have turned Toronto from a city of suburbs to the best, most vibrant downtown in North America. People used to go to Montreal for fun, now they are coming to Toronto. We have a great city.”