The Christies Real Estate Team

EDMONTON -- Don Campbell couldn't believe a recent scene among wannabe real-estate investors at the corner of Yonge and Bloor streets in Toronto, site of a planned condominium complex.

"People slept there overnight for four nights," said Campbell, president of the Calgary-based Real Estate Investment Network and author of 51 Success Stories from Canadian Real Estate Investors.

"A sign up above read '$500,000 to $1.3 million,' although you could go across the street and buy something very similar for $425,000.

"Then the developer had the gall to paste a six over the five to make it '$600,000 to $1.3 million,' and the crowd cheered, saying, 'Look, it's going up.' There was even a fight in the line.

"When you line up around a block with 200 people to buy a condo in the sky that doesn't exist yet, put $20,000 down and plan to sell it as soon as it's built, look in the lineup and tell me how many people have the exact same mentality.

"Then all you need is for one guy to panic and drop his price to get out, and the average price in the whole building goes down, and you're completely at the whim of somebody else. You should only line up for U2 tickets."

Campbell is concerned about novice investors not researching what they're buying.

"If you don't have a long-term outlook, don't invest in real estate, go buy gold or stocks and roll your dice. You have to make real estate boring, because that means you're doing it right. Go jump out of an airplane with a parachute if you want excitement.

"Right now I am telling everybody to buy resale, to buy something built in 1997 or 1998, when there wasn't a frenzy and people had the time to finish the properties.

"If I can find a market that gives me an eight-per-cent increase every year and I'm putting 25 per cent down, that means I'm getting 33-per-cent return on my money on a capital-gains basis, and it's not a frenzy."

Turning to B.C., Campbell said: "In B.C., it takes 73 per cent of your average income to buy an average house in Vancouver. I love Fort St. John and Dawson Creek as an investment in B.C. I'd be careful about most other regions.

"We're picking Abbotsford, Chilliwack and Maple Ridge as the big winners in the Lower Mainland."

Campbell said he wouldn't buy U.S. real estate until next February.

"We haven't seen anywhere near the full drop -- especially in the Phoenix, Vegas, Florida areas," he said. "The foreclosures will start peaking around October, which is about three months after the peak of the [mortgage interest-rate] resets. Then the foreclosures have to get on the market and drive the prices down.

"If you're just going to go buy and live there, go do it. But if you're going to do a quick flip or have renters in it, I think you're way too early, especially if you're going to finance it."

© The Vancouver Province 2008