July 13, 2021
Episode #119 – Derek Lobo – Insights for an Enduring Future
“Nobody could have predicted what happened and more importantly nobody can predict what’s going to happen. These are unchartered, unprecedented times; be prepared for multiple outcomes.”-Derek Lobo
- Connect with Derek Lobo:
- YouTube
- Selected links and people mentioned in this episode:
- SVN Rock Advisors
- TEDM Episode 99, Thriving in Uncertainty Derek’s first appearance on the show!
- Dan Sullivan
- The Future Apartment Developer by Derek Lobo {TEDM Special Discount! REIN100}
- REIN Channel
- Connect with REIN Canada
- REIN Canada
- [email protected]
- SHOW NOTES
- [02:08] Patrick introduces his returning TEDM guest: Derek Lobo.
- [03:27] Derek and Patrick Part II. They get their show on the road to discuss what Derek is up to and the niche markets he is in with real estate and very specifically, large-scale apartment buildings. He is laser focused on and intentional about their service specialization in all-things apartment buildings.
- [06:28] Derek dives into choices and calls during the last 15 months of this global situation. Which ones felt right, and which ones did not. Unchartered territory naturally brings uncertainty, and we cannot predict what will happen – be prepared for multiple outcomes.
- [10:22] Economy-talk. The knife’s edge of interest rates and inflation in these strange times, how interest rates will or will not affect the large multi-family apartment building sector, and the current landscape overall for building owners.
- [13:05] Derek describes the purchaser and seller demographic that he’s observing in the $20 million+ apartment building sector and why some private owners are packing it in. Patrick and Derek use their critical thinking (because who REALLY knows) to discuss potential scenarios around inflation, deflation, and the least attractive, stagflation.
- [17:39] Is real estate a flight to safety in an inflationary world? Derek’s short and final answer is “I don’t know” and largely, he & Patrick agree, “it depends”. There are certainly cautions when apartment buildings are challenged by policies beyond an investor’s control which affect net operating income (NOI), but they can also provide a secure and lucrative opportunity to place investment dollars.
- [20:09] In a sea of investing options: bitcoin, real estate, equities, silver, gold… what do we do? Derek offers his perspective. #1) start with your life, invest in yourself, your education, your well-being, your family, and your health. #2): look at diversification. Patrick and Derek discuss some of the interesting commodities people are investing in now like good watches, wine and art.
- [27:20] In the realm of hiring, Derek is bullish right now. Derek and his team are sourcing and vetting by making videos which highlight their company, their team, and the opportunities. Then they ask for a video in return. It’s simple to vet those who don’t. The quantity of applicants is less but Derek finds the quality has improved and people who are dissatisfied with their current jobs are poking around and looking elsewhere.
- [30:04] Unemployment, labour shortages, wage subsidies, small business, and the impact of the policymakers’ dance. Based on his current observation and mindset, Derek shares his philosophy and offers some guidance about risk-taking and opportunity.
- [35:03] Turning to politics, Derek and Patrick discuss the current, and rapidly changing landscape plus they share observations about what they see for the future.
- [37:01] Back to the multi-family real estate space and the smaller-scale market, Derek sees that a new 12 – 20 unit building for example is a secure and attractive investment for the smaller-scale investor, particularly in an inflationary time. Derek offers further guidance around buying a quality asset, the power of collaboration, and why investors may want to consider a real estate development instead of pre-owned (he also offers a great discount for REIN Members!).
- [43:37] Derek shares two of his philosophies: 1) all the bad things that happen to you are the raw materials for future growth; 2) where is the opportunity here?
- [45:08] Coaching and methodology: Derek illustrates his unique thinking process, vulnerability and asking for help from the right people.
- [47:37] With fundamental changes in real estate afoot, it goes back to being prepared for multiple outcomes, developing new product for evolving needs, and remaining flexible and fluid to adapt. The name of the game is resilience.
- [53:08] Looking to Europe and other similarly structured countries, if Canada’s government sees their migration plan through, the rental market will surge, and the need to expand and densify a reality. Derek shares two of his top lessons with respect to densification: 1) if land is not being used for parking, it’s free; 2) your old building gets better when you put a new one beside it.
- [55:44] From their viewpoints, Derek and Patrick share thoughts about the future, Canada, leadership, opportunity, technology, efficiencies, and adaptability.
- [62:35] Patrick takes an opportunity to introduce REIN’s recent digital move to the new REIN Channel and its exciting possibilities for the future of real estate education.
- [64:13] Derek talks about the education space he and his company are in, who they are speaking to, and looping it into the business cycle of their brokerage. Play a longer game.
- [66:11] Derek and Patrick tie up their conversation to acknowledge the power of supporting enduring development, growth, and wealth. At the end of the day, be sure to count your blessings.
