Local businessman Leon Chretien says his peers in the community are warming up to an idea he has been tossing around relating to small investments creating local landlords.
The Sunrise Ford owner and South Cariboo Chamber of Commerce (SCCC) president says he is hoping to further small business entrepreneurship in the community by forming a real estate investment firm that even low-budget investors can afford.
“We hadn’t talked about it [officially] at the Chamber yet. It’s just been me and a few other people in town, but it was something maybe there is some interest in.”
While the District of 100 Mile House Business Walk general results were released on Dec. 6, the Chamber president says it was more about the conversations he had while walking around town as a volunteer for that survey that encouraged him to investigate further.
“The comments in the recent Business Walk just made me realize that the idea I’d already had definitely had some weight to it.
“It wasn’t that somebody else said ‘hey this is what we should do’ – they were complaining about the absentee and overseas landlords – and I was thinking ‘hey this real estate trust really would have some immediate benefits to people in town’ from the lessee’s side, not just the investor’s side.”
Chretien adds he had just been presenting to SCCC members at a meeting about a general housing study that was raising concerns, so he roughly outlined his idea afterward with a few members.
“This is one of the things we see. If people would step up, we’ve got [a housing answer] that we believe we can control. It is something I think we should look at in formally addressing….”
Nothing has progressed with his plan, but if enough interest can be gauged with smaller and/or larger investors in the community, he adds it could still move forward.
Chretien says he has been getting local interest for doing something in this community from people who say they already invest in real estate trusts based in Toronto or other cities.
Down the road, he explains this plan might involve a group of investors buying a business building with leased suites.
“So, we’d have a group of interested parties. [Then with all the] money those parties represent, you create this trust.”
Chretien says those funds will be pooled with each local investor holding “units” based on their capital investment.
This is how smaller investors can buy an incremental share and still reap the income benefits as their value increases, he adds.
However, he explains there can be income interruptions if it costs more to buy a building listed for sale than there is held in the trust coffers.
Chretien adds it can also take time to gain more investments or more tenants to increase rental incomes.
“Hopefully, you are already buying a building that is fully rented out, and you keep the same lessees – you are just a different lessor.”
This way, Chretien says every time a local business moves or another comes in, tenants will be dealing with local landlords.
“You could have a quarterly meeting, but for the most part, the management staff would be taking care of the collecting of the rent and signing the agreements.”
At the same time, Chretien says these managers could be alerting the investors to a business closing down, so they can begin looking for, and attracting, a suitable new one – also offering this chance to any of them.
“They might say, ‘hey that would be great space’ and now that you are involved with it, it could be ‘well, I’m going to start my own business’.”
However, he says his main focus now is meeting the needs of the renters calling for a landlord “who cares” available locally.
“They are going to have people on the ground they can talk to about their concerns, and [who] can come and see the building and get it fixed in a timely manner.”