Ladies and gentlemen, welcome to episode number nine of Old School New World, The Life of an Entrepreneur. I'm your host, Mike Diaz. And today we are honored to have Jimmy Alamad, who is a partner at Y Mortgage, at Mortgage Alliance, a previous banker, 18 years with TD Bank as a mortgage specialist, and has been a mortgage broker for the last... three years. So we'll chat a little bit about that experiences he's had to share.
And you might find helpful as you go through your journey and your career in whatever it is you might be doing. We'll also probably touch on politics, family. And of course, you know, we both are mortgage brokers. We'll talk about the market and what's going on there for sure. Jimmy, welcome. And it's great to have you with us. Yeah. Talk to me here, me here, Mike. I know it's been a long time coming. I'm glad that it's actually episode nine. That's my favorite number. So divine timing, maybe?
Yes, maybe, maybe, maybe. So yeah, we're going to touch on a lot of things today. There's a lot of hot topics right now, you know, in regards to what's going on in the world, real estate market, politics, you know, everything. Yeah, you know, it's good timing in terms of having, you said divine timing, you know, I'm a big believer of that. Before we dive into different things, let's get to know you a little bit better. I know, of course, I talked a little bit about your career path.
I always ask my guests and I didn't tell you I was going to ask you this question. Please share with us, Jimmy, what is your superpower? My superpower? I don't think I have any. My kids might think I do. I love putting people on your spot. My superpower would probably be the amount of patience I have with my kids. When they're trying to learn something new, mostly athletic, try to do something and they want to play hockey or swimming, whatever the case is, I'm all in with them.
I don't know if it's a superpower, but I turn into like their coach automatically. Right, right. You know, nothing else matters to me except for, you know, them understanding to have success, whether it's sports or whatever the case is, you've got to be all in for that for the most part. I don't know if that's a superpower, but...
I'm not patient with them when it comes down to heating or doing homework or whatnot, I'm not patient with them when it comes down to heating or doing homework or whatnot, but when it comes down to something like athletic, because they're so young, they're starting to learn and understand what competition is and what I'm winning and losing and, you know, hard work pays off. I kind of just dive right in. I think that's, you know, probably... I guess it even close, probably.
Yeah, listen, I can't fly yet. I can't fly yet. I'm working on my flying ability. Listen, everyone has their own. That's why there's so many out there. But thanks for sharing that. It just gives us a little bit of fun just to get to know you a little bit. And the reason I put folks on the spot, maybe if they're guests and they listen, they may know the questions coming. But it's just something to help our audience understand a little more about who Jimmy is and how he thinks.
So before we dive into family, let's talk about your career. You and I sort of knew each other a long time. ago, a little quick story. He knew a cousin that I had that's passed and we only realized this recently. He was a banker for 18 years at Morgan Special. Did you start as a Morgan Specialist? Yeah, I started off as a teller at York Dermot, a TV bank, maybe 19, 20 years old when I started. Progressed through the bank as a teller and then I went to a financial advisor and so on and so forth.
And then I was like, okay, we'd almost... becoming a young adult, and I was like, what am I going to do? Do I want to stay at the branch? And I like the idea of going commission -based. I jumped into the role of mortgage specialist. And, you know, I was young. I was very young when I got in that role. So I didn't even own a home. I was still living at my parents' house. Didn't really have much experience, but I had some really great mentors at the bank.
It's all about, you know, having that mentorship and, you know, looking up to somebody that, you know, has been in the same shoes in a way. I just kind of stuck with it. It was a tough time. I jumped into the, you know, rough market, kind of similar to where we are right now. You know, it's hard to get it, you know, to the commission sales and real estate or mortgage. It's a tough time right now. Similar to that when I started. Stuck with it. I learned a lot at the bank. I did very well.
I was one of the top guys for many years there. Felt it was time to expand my role as a mortgage specialist. I want to kind of grow a team and build a real business as opposed to you stay at the bank for that much longer. I want to be able to provide a little bit more options for my clients. That was me. The reason why I didn't leave, I had a great time there. TV showed me a lot, but it was time to go. Yeah, no fair. And that sort of whole experience, you mentioned commission.
Like, you know, you're going to commission base. Probably a lot of our young viewers, whether they're a banker now or whether they're maybe T4 in employment, meaning, you know, they get paid every two weeks. Commission, of course, is very different. Talk about that maybe a little bit about your experience when you were a teller, of course, and working on a financial advisor and then made the pivot.
Was there fear around that? Talk to me about your experience going from... T4 income to what you got to eat, what you catch type of thing. So talk about that. Yeah, thing. So talk about that. Yeah, so it was definitely a challenge. I think I got a little bit of pushback from my conservative parents. Everyone probably said, you know, here's the bank. They've got a good pension. Don't worry about this. Stay there. You know, be a branch manager, which is a great job and everything.
I didn't necessarily want somebody to tell me how much I was worth. You know, like, here, your salary is X amount of money. And if you do a good job, you get a bonus of X amount of money. Right, right. Whereas, you know, at the time, I was young. I was living with my parents. I didn't have very many expenses. So I could take that risk. Right. I was confident in my abilities as well. It was either that or I was going to leave the bank, I think, at the time, anyhow. And yeah, it was tough.
It was challenging. But I was ready. I was eager. I was hungry. You know, I still have that hunger. It's more still to help my clients, you know, because I built a big database. Thankfully, they rely on me for advice and support. So at that time, I didn't really have much, but I had to just learn quick, learn on the fly. And obviously, the commission component was important to me, but it was important because I knew that the sky was the limit. Don't get me wrong, Mike. I didn't make any money.
The first couple of years of this business was like, you know, take condos with my parents' house. Yeah, and that's not a big surprise. You know, a lot of young people... older people, you know, whoever's coming into our industry or any commission sales industry for that matter. Sometimes you think, oh, I'm going to make money right away. And that's just not always the case when that happens, right? No. Yeah. I always tell the story.
Working at York Del Mall for as long as I have, I pretty much grew up there. I remember getting my first commission check as a mortgage specialist at the time. I was like, wow, I got all this money. I was like, how am I going to do this? So I literally went back to my home or less and spent it all at Hugo Boss. I'll get up all the cure. And I didn't get paid for another two months after that. You think it's going to come?
in ways but it did come in ways it's just like you know a couple months later right so and i kind of learned at that point where you know when you do get you know a decent commission check whatever the case is you kind of kind of let's hold on to it you know a little bit because you know your next meal is going to come in a way right so i learned that quick and you know it was a good lesson for me right so i got it i that point where you know when you do
get you know a decent commission check whatever the case is you kind of kind of let's hold on to it you know a little bit because you know your next meal is going to come in a way right so i learned that quick and you know it was a good lesson for me right so i got it And it was gone real quick. quick. Okay. So H has a little bit to do that with you when you're talking about, you know, still being hungry and the maturity about money management.
Sometimes you're saying the commission came in and you spent it, but you've actually learned. I didn't have really much else to spend it on at the time. on at the time. I was in my mid -20s where I was either going to do a club on a Friday or Saturday night, and I wanted to have nice schools for it. I didn't have a car payment, really. Again, no rent. Yeah, we have a little bit of similarity there because I started as a teller as well, TD at 18, with their training program and what have you.
So I understand where you're coming from. Because sometimes the idea of... You know, having not as many responsibilities because, you know, living at home and I had the same parents, you know, my parents, you know, some of the cleaners and, you know, they've had a successful business, but they used to take me around. And my mom said to me, oh, if you ever become a branch manager, you know, I'd be so happy. And, you know, almost like she manifested it. Yeah, right.
And that was just a great job as well. Right. No, 100%. And my parents, I'm still like, yours are immigrants that came to Canada. Correct me if I'm wrong. I think that would be the case, right? Different things that they thought was high level, right? And taking a commission role is a risk, right? So it doesn't matter what you're doing. right. And that was just a great job as well. Right. matter what you're doing. Right. And that's why they were saying,
are you sure? Yeah. Are you sure you want to go into this? Yeah. You're doing well at the bank. Yeah. You know what? It was just. You know, I kind of wanted to focus on what I enjoyed at the bank and that was lending. The lending side. I love the real estate side of things. The investment side never appealed to you very much? It did for a bit until the market crashed in 2008. The financial crisis after.
And I remember a financial planner that I worked with at the branch, she was literally like in tears or crying one day because she was just getting hammered by clients and whatnot. I was like, Yeah. Are by clients and whatnot. I was like, you know what? I'm not going to take anybody's money for investments because I can't control the market. I'm not going to give people money. I think people enjoy me giving them money, and that's kind of what I do. I sell money. That's kind of what I do, really.
I sell money or I lend money. The investments did for a bit for a short period of time. Again, it was all time to break. I think Let's fast forward 18 successful years on that side of the business. Sort of was the pushing point. You've been a broker three years? Three years now. So I left me about three years ago. It was a tough decision. It was probably about two years in the making. Okay. I don't know. I felt like I did everything I could do at TD. You know, like I was number one at TD.
I've been on all the trips. You know, I got a TD ring. I did everything I could do there. And when the market started to turn after COVID, you know, when it started to go up, I was only able to offer my clients one product. So I think... That was really the turning point. Even though in the back of my mind, I said, I'm never going to retire at TD. Not that I couldn't because I could have. It's a great place to work. It was always in the back of my mind.
And when the market turned, it was like time. And you know what? Not only the market turned, my superiors, my sales manager and her manager and my associate assistant, they kind of all left and moved on to different. Not so much in the broker industry. Yeah. Different. Yeah. Like my sales manager, she retired. My assistant moved on to a different career path. I don't know. I think it was AVP. She moved on to, you know, left the bank.
And when they left, I kind of just, I was like, I think it's time. Right. Is there ever time? I don't know. But at that time, I felt it was time. And the market was. Well, the best time is always that time. the best time is always that time. You know, there's that idea of, oh, I could do it later. I could have done it before. It's meant for you. It's going to happen. to happen. When you're in your comfort zone, it's always going to be a challenge.
And I was super comfortable, fortunately, very successful at the bank as well. It took me two years. Well, listen, I think, especially with my wife and my, you know, like it was a big family decision as well. Right, of course. It wasn't just a, you know. You weren't single anymore and living at home. I at home. Exactly. So it was a big change. And so far, it's been very well, for sure. Yeah, it was a big challenge.
Okay. Yeah. And then, so talk to me then about when you're making the move and you've decided, like, what did you know about the move? Yeah, I didn't know much. I just knew from. knew from. I read or heard about from other mortgage brokers where the case is. I was super, I don't know what the word is, let's say, call it cocky when I left the bank because I was at the top of the mountain there. And when I came to the broker space, I was a little fish. Okay. Right.
So a little bit of intimidation maybe from the... Well, when I got in there, I felt like when I left the bank, I was like, I'm just going to go in there and stay on the 401. I'm going to be flying. Yeah. I was at the bank, but really I was at that case. So it took some time to get going and understand the broker space because it's a different world. It sure is. Different systems, different policies, different lenders, different people. Right.
And what do you think about in terms of being different? what do you think about in terms of being different? Is there a cultural difference? Because, you know, the bank being the bank is very corporate. Did you find any difference in culture? Yes, absolutely. You know, the bank culture was good. For the most part, there's a culture in a branch and a sales team. You have your own culture of the sales team. So different cultures in different places. And the broker space was really coming in.
I had to really kind of create my own. you know culture right you know you're still trying to do that every day that was a big shift for sure culture is a big word because it takes time to create it You know, we've got to build it. And there's so many different people. So it was just one person. It's two, three, five, ten. Everybody in that room or that team got to create the culture. It's not just one person alone, right? So we're still trying to build that as well with a team.
It was a challenge for sure. Okay. You know, I was saying, you know, you talked about being comfortable and then, you know, it took you two years. I think it's important for our listeners and our viewers, especially the young ones or anyone for that matter. It's important to you to get comfortable with being uncomfortable. Yeah. Because, you know, I found. you probably have as well. The minute you step out of your comfort zone and become uncomfortable, growth happens there.
Whether it's for your professional life, Yeah. it's for your professional life, your personal life, typically good things come from that. You're living proof, you know, like to be an 18 year banker, a mortgage specialist for the majority of that, you know, it takes a lot to make the move. Yeah. A little saying that I go by very similar to what you just said was I was never going to let fear decide my fate. Good. Right. And it was scary to leave the bank for sure.
You know, but I wasn't going to let that fear, decide where Jimmy was going to end up in five years, 10 years, 20 years down the road, right? I love that. And I'll tell you why I love that. Pivot a little bit to sort of mental health and well -being. I've discovered that typically those who are suffering from depression tend to live in the past. So that's where depression is. Those who have anxiety, suffer from that, tend to be fearful of the future. Right.
And so if you can eliminate those areas, then you live in the present. Then you tend to that depression that you had gets better. Your way of thinking changes. Not to say that, you know, you can't think about the fear, but don't allow it to control your pain, as you said. Yeah. So that was something that really stuck with me in that whole transition period, you know, because I was super comfortable. I was super comfortable. Did you have some people chatting with you?
I'm thinking about, you know, young bankers, too, or specialists that are thinking of wanting to make a move.
Was there someone that? tapped you on the shoulder or was it just something you um well yeah i kind of got sold as well kind of way when i left the bank my decision was i was going to leave the bank right again i was very i kind of got sold as well kind of way when i left the bank my decision was i was going to leave the bank right again i was very cocky in a way when I left the bank because I was, you know, on top of the mountain. Right. So I thought it was just going to stay on the 401.
Like, fine, you know, like fast lane, but. You ended up on the 407, even better. I'm on a 407. Because I remember when I started in the business, again, very similar to you, I started thinking about a broker two years prior to being a broker. You know, I had this one gentleman, Chris, saw, I guess, a bit of talent and knew, so maybe I was undervaluing what I could do at the bank and he introduced me to some folks that were in the broker's field. When I was in the bank for 17 years.
I didn't know anything about the space. And I've been a broker 14, so I left in 2011. And awareness to our industry has grown quite a bit. You know, Jimmy leaving in 2021, 2022. So there was even more awareness then. Someone say, hey, you know, Jimmy, you know. Yeah, well, I had some friends that were, friends that were, you know, mortgage brokers. They were always telling me. And they were bankers as well. So there was, yeah, come on, come on, come on, come on. Let's go.
You know, again, you're comfortable. When I finally made the move, it was right here. I felt it. Right. Mentally, I felt it. Again, like I was at TD for a long time, so it was home to me as family. So it was never easy. But now, you know... Being in the role that I have been three years now, yeah, felt in the role that I have been three years now, I've met some great friends. I've got some great partners. You know, obviously Mike is one of them. You know, I met you on the side of
things, right? So now I'm starting to create my own culture again here and my own team, my own partnerships and whatnot. Like, you know, we're not even on the same team, but we are a team still. I don't compete with Mike Diaz. You still do mortgages and we got literally down the street from each other. But, you know, I like that. I like the fact that we can share wins and losses together and help each other. And not that I didn't get to the bank, but it's a little bit different.
I think everybody... wants to see a mortgage broker succeed. Yeah, our industry, you know, I don't think people know it enough. I think there's a lot of beautiful people in our industry, whichever network you might be with. The thing I think is the most important to remember, one of the most rewarding things you can do for yourself or your peers is lift up your peers. Even if there's no benefit for you from it, we're very supportive. There is a great community within the brokers.
It's not known enough in terms of how great it is. So when you made your move, how have you created your leads for your business? Mortgage specialists, you know, they get a lot of their leads maybe from the bank itself, or maybe they did maybe at first, but maybe it's going away. Did that cross your mind? Being in such a huge corporate world and being in a bank for as long as I had, a huge corporate world and being in a bank for as long as I had, of course I got some business from it.
Internally, people that I worked with in the past, whether we were tellers before, now they need a mortgage or parents need a mortgage or so on and so forth. So yeah, you're always going to have that, but they're my connections. They came to me anyways, right? I still find that same with clients. You know, I still do a TV daily, but now I have more options for them. And that's what my clients are happy about, you know, for the most part. So my database was obviously, you
know, my toolbox in a way, right? I contact my clients, provide them knowledge, provide them insight on what's going on in the market, new options. truthful. I'm not a pushy sales guy. I've never been that way. I'm not trying to sell you something. I'm just trying to give you advice and you make the right decision. You say, hey, Jimmy, I'm up for renewal and XYZ bank. This is what I got. Can you beat it? If I could beat it even by slightly, I'm going to tell you guys. Right.
Just remember where you're at. Right. You know? Yeah, I mean, that's a great thing to bring up because I've said before, and I'll say it again, the minute you try to chase money, money will always outrun you. You can't catch it. So to do what's in best interest of your clients and friends. I watched them all contact me. all contact me. Call me, ask me for advice. Right. I'll guide you in the right way. That was part of my career in TD as well. Like I was a teller, that I was a financial advisor.
I did investments. I did RSPs. Right. I did everything. Bank accounts, you know. So it was very important for me to have my clients come and ask me for anything. Ask me about RSPs. Ask me about this. I wanted to have a little bit of knowledge and everything. That way I knew I was their go -to. Anything bank -related, I wanted them to come to me. And they did. And they still could do so. And that's just relationship. Right.
advisor. I If I'm hearing you right, then it's, you know, you've positioned yourself as, you know, an advisor and someone who gives counsel and advice as opposed to something a bit different, maybe that others might. That's how you've built on and continue to build on your business. Yeah, exactly. That's exactly. Amazing. Amazing. So before we turn the page on that, so if you were to talk to your younger self, you've probably heard this kind of question before, for sure.
What would you say to your younger? Probably more handsome. I'm just kidding. You know, men in general, and women as well, do age like a fine wine. It's always better. But what would you tell your younger self if you were giving advice to him? You know, enjoy what you do. I love my job. I enjoy what I do. So for me, it's not worth. During that transition, maybe, you know, in a specific time, you're not going to be too prepared. We're over -prepared. You're always going to leave something out.
You're always going to say shoulda, woulda, coulda, I think. And don't let fear decide your fame. That's not what I did. Would I change anything? You know, it's hard to say looking back now, would I change anything? Not really. Like, you know, you're always going to say, I should have got this, I should have did this, I should have did that.
But the work you put in, in your life, regardless of what you do, whether it's athletics or school or whatever the case is, you put the work in, good things will come back. Yeah. You know, and then that's well said. And, you know, because I think about that question for myself as well. And like you said, you know, it's going to happen the way it should. But if we're going to pass along any kind of little tidbits, you know, don't be scared. Don't be scared is number one.
Fear is not your friend for sure. If you're in the bank. how long you're going to stay there. So for one of the things I would tell my younger self, you know, I spent 17 years, seven with TD, 10 with Scotia. I would say, you know, I think the corporate environment is good. You learned a lot. Most part, yeah. Yeah. Yeah. But, you know, again, they build that culture and there's a lot of people from different worlds. A hundred percent. And I think you can learn a lot.
And I think you can learn a lot. You're like, listen, you can learn, I've said this before, learn from bad leaders, good leaders, and the corporate environment as one of the big banks does. But, you know, I wouldn't need to stay. This is, again, me talking to my younger self. I would probably. Knoxville State is five years. You know, six years maybe, but five, I think, would be my cap. My son, Nathan, You know, he wants to get into the broker industry.
His mom and I both agree that I think starting at the bank will show him a little bit of discipline, right? Just so you know how to do things the right way. Right, right. You know, you can get trained properly. That's a great idea. I think for Nathan, absolutely you should. Yeah, so that's just the idea. You know, if you're a banker or you're in the mortgage space, think about that.
How long you've been there and maybe what you want for yourself because, you know, set the right goal for yourself. You know, think about that. And then, you know. Reach out to Jimmy, reach out to us. I'd love to give you more information on that aspect of things. So let's turn the page on that. And let's talk a little bit about the wild, you know, getting a little more into the nitty gritty about the wild, wild west, about the mortgage business and what's going on.
Maybe we'll start with, you know, the impact of tariffs, what you're seeing with your client base and what are people, you know, when they are reaching out to you and asking you different questions, what are they thinking about? Yeah. What's on their mind? I think it's all about confidence right now. There's no confidence right now in the market. There's no confidence in anything. You know, we're currently in an election period in Canada.
So obviously with the tariffs on and again, off again, you know, who's impacting, who's not impacting. There's so much uncertainty. So it's impacting consumers' confidence. Rates are literally up and down, up and down, up and down. Like you'd think Canada's dropped the rates so much since the peak that people would be out in droves buying. refinancing, just crazy. It really hasn't picked up. Not at all. Yeah, there's people have been crying about it.
Luckily, you know, we've been in the business for quite some time. You know, we do have a good portion of our database, you know, that is still active and moving or selling or refinancing the cases. But obviously, look at the for sale signs. There's a lot of them. Look at the market. And then there are some for sale signs, there are some for sale signs, but there's also sold signs. So there's some activity. There's always movement. There's always going to be movement.
Always got to move and sell and refinance. And, you know, but I look at it, there's opportunity right now. I think there's a lot of opportunity right now to maybe buy your forever home that, you know, you're not going to compete against 14 other offers. Right. We did in the past, you know, right. So I think there's an opportunity there. I think, you know, with the stock market, even if you want to, you know, investments like the days that are dipping low, those are the days you've got to buy.
Yeah, no, for sure. Right. Sure. And again, it's a yo -yo. It's up and down, up and down. So I do think there's opportunity. However, there's a lot of uncertainty as well. Right. So with that being said, you know, we'll see more things. I think we need some stability in our economy first in regards to, you know, political. Once we get a permanent prime minister, we know we have one, but, you know, it's just kind of
an interim, right? So once we get a prime minister, hopefully that will steer us out of this mess for the most part. past, us out of this mess for the most part. I will say, will say, you know, on that political front, we were talking about, you know, the election coming out. My own personal opinion, so pay for what it's worth. I do think we need a change of government. I'm not saying I'm going to vote for. But, you know, Mark Carney, you know, he's really a globalist.
He's been all around the world and he has a lot of friends all around the world. And I mean by globalists, now he suddenly, you know, became the prime minister through the process that they had. But I don't know if that's what we need exactly because, you know, the liberals have ruled the roost for a long time. Maybe we just need something different. Sometimes, different. Sometimes, yeah, sometimes it's important to have a little bit of change, a little bit of fresh blood, absolutely.
Yeah, I know, for sure. Back to sort of the market, are some of your clients that are reaching out or looking, you know, pre -approvals that you're doing, are they looking for certain types of dwellings? Like, what do you find out? out? You know, definitely the rental property purchases have dried up. Like, I'm not getting a lot of investors. Okay. You know, few and far between. And what type of investment properties are they buying? Is it, what type of investment
properties are they buying? Is it, you know, your typical, like, fee tax, triplex? You know, a landlord, per se. That's their business, more or less. That's part of their business. That's how they generate income and source. You know, want to buy rental properties. But before, when the market was hot and the rates were obviously lower and there's less uncertainty in the world and the market, everybody was buying. record properties.
Right now, I find that it's not as busy on that front on either mortgages that I am doing or purchases. The majority of them are for end users. People that are buying for a family home or a new home or whatever the case is, they're buying into living. Not buying it as an investment. That's what I'm finding right now. Obviously, renewals, refinance. Those are massive, massive, especially over the next 18 months or even more. And then what about condo market? Have you had clients buying condos?
That's a tough one right now because there's so much inventory. a tough one right now because there's so much inventory. So there is a lot of great buys out there. But no, definitely the condo market. Again, we live in the GTA. We live in Toronto. It's tough to get into a single -family home. For a starter, they're moving to condos for sure. Absolutely. So there is. I am doing some condo purchases for sure. not as much as before. So let me ask you about this. let me ask you about this.
Have you come across any new construction ones that bought two or three years ago? I'm doing a couple right now. Have you found issues with values? Because you know what's happened? They were buying at 1 ,200, 1 ,300 square foot. So when you're buying in 2021, 2022, they thought, oh, it's just going to keep on going up. And so they were buying at a certain per square foot cost. And then lo and behold, they go to do an appraisal today.
What's happening is, oh, you bought at 1 ,200, 1 ,200, 1 ,300 square foot. Now it's only 950 square foot. square foot. Have you seen any? Yeah, values definitely have been impacted, especially when we bought at the peak on paper, on spec. That was happening in the market. I found that the builders were selling at a projected price for what they were built. Of course. Right? So that's impacting it. Because they thought it was just, you know, nothing's ever, you know. Well, that's it.
Because it was constantly going up. It was like, wait, you know, things are going to drop, right? Yeah, yeah. Rates were, you know, sub 2%. Foreign buyers were allowed to purchase as well. Right, right. And, you know, know, the one thing that Trudeau did probably a year ago now, no, the students coming in. So he took away the students. Yeah. They were coming back. They limited the amount that were coming in. That was impacting on some of that. Have you had a live?
example of you got a person bought for a and now i gotta praise that b unfortunately yeah is it the large spreads you're fine yeah the large spreads are i think mostly on the condo market you know if you bought something like i said yeah i think the low rise like detac townhomes new construction i think you're still fine depending on air okay for sure the value has been impacted a little bit again it all depends on what you bought correct the ones that are coming
up now so we're into 2025 the ones that were bought in like 2020 2021 the large spreads are i think mostly on the condo market you know if you bought something like i said yeah i think low rise like detac townhomes new construction i think you're still fine depending on air okay for sure the value has been impacted a little bit again it all depends on what you bought correct the ones that are coming up now so we're into 2025 the ones that were bought in like 2020 2021
maybe 2022 depending on how quickly those projects again you know there's still a lot more coming online next year for example uh there's one here not too far from where we're doing our episode that'll be done sometime in 2026 but so what the value is like what have you seen let's let's focus primarily on the condo market because that's what we're talking about so yeah i think depending on when you purchase the condo like the thing with condos
is from the day you purchase it to the day it's actually built could be eight years you know you purchase the condo like the thing with condos is from the day you purchase it to the day it's actually built could be eight years you know case for sure right so if you bought it you know like say eight years ago we're still okay you're closing now like you know i just did a bunch of deals at time and space downtown toronto okay those values were good even
though they bought it years ago the values were still even coming in higher than their purchase price oh but then buy something like nobu for example which was the first condo that i wrote sold for a thousand dollars a square foot right i did a couple deals there the values were like a little bit lower you know some of them were either lower right on par and there was other properties that i've done you know that the values are You know, we're talking like $100 ,000 worth of depreciation.
So I had someone reach out to me. So I had someone reach out to me. They bought a new construction Honda and Whitby for $760 ,000. It was appraised at $608 ,000. It's a big difference. We tried to figure out some solutions. And thankfully, he was in a position where he could close. There's a lot of buyers out there that are really in a tough spot.
And going through all of this, a client got an email from the site developer because every new construction project, and you might be familiar with this for sure, has financial institutions that are associated with the project from the beginning. And they do that as, you know, they're like, yeah. So thank you very much. So my thunder. So got in and said, hey, RBC for this particular project has a blanket appraisal on the whole building. They're doing the values on the purchase price.
That was a bit of news to me. I didn't know. It sounds like you, so I would love to hear more about how to explain it. Because that's a benefit. Because now my client, who I've referred off to someone that I trust in like at RBC, he'd do this transaction because as mortgage brokers, we don't have access to RBC. And thankfully, he doesn't have to shell out $140 ,000 because there's this blanket appraisal on the property. I suspect currently Ron might ignore a little more.
Maybe the developer has a really good relationship with the Royal Bank, and they're doing it to protect. Because like you said, long -term, I think real estate will always be okay. But talk to us about this. This seems to me. to me. Appraisals, which I'm very familiar with at the bank. So essentially what it is, they do the appraisal on spec. They hold their database, for example. while you have been on site, well, this case was Royal Bank.
They would have done their blanket appraisal when they launched the project. And they valued each unit at X amount. And typically those blanket appraisals, again, every bank's different. So typically those blanket appraisals, if they're up to date, you know, the value should be there. Okay. Even though it's not really the true value. Right. Really, in my opinion, I think a lot of banks are at risk here. I agree. Because today's market value was $300 ,000, for example. Right.
And we've obviously done a blanket appraisal of 2021. Right. They're saying it's worth $450 ,000. Right. Right. That's a big spread, right? So who's at risk here? It's for sure the bank taking on the risk. But not only that, think about it this way, Mike. The client is now leveraged. Because the client wants to sell. They're not going to be off their mortgage. not going to be off their mortgage. Right. And I agree with you.
You know, they say maybe you kick the can down the road a bit in a case like this. Correct. Like, I mean, and my client, you know, he was buying as a rental property. So he already had it during occupancy was had it rented, but doesn't make it okay. But to your point, you know, if he decides to sell and we've had this conversation a year from now, 24 months now.
It might not be enough, but maybe the silver lining, if you had to pay out $140 ,000 today, if this didn't have a blanket, maybe two years from now, if that's what he wants to sell, he'll only have to pay out $70 ,000. So maybe half. Now, I'm not saying the value would be all there. It may help mitigate. maybe help mitigate. For this specific scenario, it worked out for the client. Correct, correct. It's worth exploring.
If you have clients or you're in this situation, I think it's worth exploring if this is an option to protect you. Even again, like I said, to kick that can down the road a bit, if I have to have a loss, and this is what we're talking about, a loss in the real estate market, I'd rather, you know, mitigate or lessen that loss. And maybe this is a way of doing that. So I didn't know about that. Yeah, again, every bank, the way they do the break, do the break, the prison will be different.
I think... as you update the appraisals throughout the duration, like maybe the value is lower, and maybe the bank doesn't evaluate it lower, but it's hard to say. Yeah, you know, it's funny because if somebody's moving into a condo and they're putting us 20 % down, you know, CMHC or one of the insurers we had, Sagan or Carnegie Mellon, seems to be approving those values too, so maybe it's the same type of... Blanket. You can't get an insured mortgage on a rental. No, of course. Of course.
And it's just only in specific circumstances. Yeah. If it's the insurer or what? Yeah, yeah, yeah. To your point, clients. absorb some of that risk, but they're absorbing it and they might have to pay it down the line. So it's an interesting time. And that's, you know, a sign of the times of what's happening with the market. But I will say, you know, you have a lot of, I believe, realtors within your circle. Their opinions on the market, what are you saying about it?
Yeah, Yeah, I think a lot of realtors, again, there is opportunity, right? So there is opportunity. They are working hard. Homes are selling. So, you know, this is where you put your work in right now. It's like working out in the winter and then go in. So I think you got to put your work in now and come full circle.
Yeah, So I think Yeah, I think it's important for folks to remember, and I've said this before, I believe part of a problem in our industry, there's too many paper pushers and order takers. We must do our clients a favor and provide counsel and advice. As I will tell you, clients and consumers out there are craving, craving counsel and advice because to Jimmy's point. the uncertainty that's existing in the market.
Sensitive to the time, because I know you have to be the secret story guide today for your daughter. Yeah, I got to do that stuff. Read two books for my daughter at school. So that's amazing. So as we rise up, let me give you a prediction. Don't worry, I won't hold you under the fire. Between today is April 22nd. This is recorded on April 11th. Between April 11th and the end of the year, what's your forecast on interest rates in particular? And I will sort of give you my two cents as well.
What do you see? I think Bank of Canada will continue to drop my rate by the end of the year, Bank of Canada will continue to drop my rate by the end of the year, at least half a percent. By the end of the year, one of the last reporting we had, inflation did pick up a little bit. I personally don't want rates to go too far down. I think a good balance is good. So I do see maybe about a half. percent by the end of the year, at least in a moment.
Obviously, what's going on in tariffs and whatnot, if it really impacts our industries and the auto industry, you know, steel and people are starting to lose jobs, you know, then obviously, you know, completely change. They'll look on rates in general. But I do think by the end of the year, I think rates should all be in the threes. I think fixed rates, variable rates, I think those should be in the threes. Who knows? Maybe anywhere from 1 to 3 .9, depending on the term.
But I think they'll be in the threes. I think having a three in front of your rate by the end of the year is good. Right. We're almost there right now, the variable. Fair, no, fair. One more drop. I think the majority of the people that are variables will be in the threes. Yeah, if you're in a prime minus, Yeah, if you're in a prime minus, anywhere between prime minus 75 to prime minus 95, and there are products out there, next week there's an announcement.
If there's a decrease, you'll be in the threes. You know, my look on rates and where I think they're going to be. And again, we're not holding each other over the fire. I think the prime lending rate will be down anywhere between half a percent, as Jimmy says, to about 1%. That's my range where I think it's going to drop. You're going to see that by the end of the year. To this point, a lot of the tariffs and different things. economic growth, unemployment.
We had the first loss of jobs since 2022 in the job numbers. And so that's the first time in a very, very long time. So that impacts the Bank of Canada driving rates down. So that's sort of my thought. In closing, I think you're going to revert back because people have short memories. The last four years, fixed rates have been lower than variable. But remember, historically speaking, variables have always been lower than fixed. So you're going to see that for sure.
So I think to your point, variables will be mid threes, high threes. I think you won't see a huge amount of movement on fixed, maybe a little more down. But I still think, yes, I think is what I'm saying. So you took up a lot of time, Jimmy. Thank you so much. I want to extend our gratitude to Jimmy Elemat, who is a dear friend of ours. Thank you for being a guest. Yeah, absolutely.
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