In 2016, when the GTA market was on fire, Mississauga, Ontario-based investor Sarah Eder was facing a crisis of her own. After 10 years as a successful professional equestrian show jumper – a journey that took her across the globe and allowed her to train with some of the world’s most celebrated champions – Eder, like most people inching toward 30, felt it was time for a change.
“Every athlete faces retirement at some point,” she says. In addition to the physical toll of training and riding, Eder was also dealing with the demands of a serious relationship and managing a horse farm in King City. “It just got to be a lot. I couldn’t see myself doing it for another three years or so.”
But athletes like Eder are always on the lookout for the next challenge. Having stepped away from her beloved horses, she was hungry to test her abilities in an entirely different setting.
Armed with a degree in business management – her parents insisted she get an education before turning pro – Eder decided to see how corporate life fit. Searching online job boards for business administrator positions, she stumbled onto a privately run property management company advertising just such an opening. Little did she know that that moment would launch the next phase of her life.
“I knew nothing about real estate at the time,” she says. “I didn’t even know what cash flow was. Little did I know that along the way, I was going to completely fall in love with real estate.”
Other people’s money
Eder's stint managing properties alongside her boss in Mississauga proved to be the educational opportunity of a lifetime. In addition to learning the basics of property management, tenanting and the acquisition of multi-family properties – lessons she has been able to test and put into practice every day – Eder was also introduced to the idea of joint-venture partnerships.
“It was mind-blowing,” she says. “I was like, ‘What are you doing? You’re taking other people’s money and investing for them but you’re not investing any of your own capital? How is that even a thing?’ It really opened my eyes to something I had no idea existed.”
JVs would soon become critical to Eder’s own foray into investment. In late 2017, head over heels in love with real estate and confident after her year of practical experience, she decided she needed properties of her own. Unfortunately, her previous career hadn’t been a cheap pursuit.
“I’m looking at my debt and I’m thinking, ‘Oh wow. There is no way I’m doing this on my own,’” she recalls. Joint-venturing would be her only option.
Unfortunately, Eder was searching for properties in the Greater Golden Horseshoe in late 2017, a time when hysteric bidding wars were still the norm. “I was freaking out,” she says. “That’s not how I learned how to acquire properties.”
After three months of being constantly outbid, she found a seller in Brantford who was liquidating his student rental portfolio. She purchased equity in one of his duplexes and took over its management, essentially making the seller her first JV partner.
“I felt like the way I was taught was always conventional 50-50 – someone puts in the mortgage financing and the down payment, and you manage the property,” Eder says. “But after that, I thought, ‘Wow, there are so many other possibilities out here.’ It really encouraged me to have an open mind when I’m structuring JVs. And I think that’s why I’ve been so successful: because I don’t limit myself to traditional JV structures.”
Another key factor in Eder’s success has been her approach to fundraising, which is both tenacious and client-focused. In the five or more hours she spends each day communicating with potential partners – “I’ve literally made it my career to raise capital,” she says – Eder tries to discover what they’re hoping to get out of their real estate endeavours.
“I tend to spend a lot of time in the beginning really getting to know my potential JVs,” she says. “No numbers – it’s more about what their goals, their needs and financial outlook are.”
It's an approach that appears to be working. Eder raised $1.5 million in private capital last year, a sum so large it forced her to shift her role from property manager to facilitator. She now describes herself as a “puzzle master”, matching people who have specific strategic goals, such as flips or large multi-family properties, with investors who have the experience and ability to make them a reality.
Eder’s partners have had considerable good fortune thus far, but the risk of an investor losing money in a deal she facilitated looms large in her mind. “It’s not all about me getting rich and growing this massive portfolio,” she says. “It’s really that I’m in this for my investors. I have developed this good relationship with them. I’m invested in their goals, too.”
Go big or go home
Even though she’s only two years into her life as an investor – a time when most would be happy to have one cash-flowing single-family home under their belt – Eder has already gained a fair amount of experience in the multi-family space, both as a short-term owner and a manager.
“Multi-family is definitely the hot commodity right now,” she says, conceding that affordable deals in and around the GTA are increasingly hard to find. To work around the high prices, Eder has started searching out unconventional opportunities, such as small multis on large parcels of land where more units can be added. “We’re in that market right now where prices are still kind of high – there’s not a lot on the market, and if we don’t start to make our own, we’re just going to be waiting forever for the right deals.”
Eder encourages other young investors considering a duplex or larger property as their first foray into investment to be prepared for anything. “You can never anticipate how things will go, especially when you’re buying bigger multis and you have a ton of different tenants,” she says. “You think you’re going to get certain rents; you think renovations are going to go smoothly. Multi-family is definitely not for the faint of heart. It’s so important to have the education first before you dive in.”
Education is key, she adds, to being taken seriously by older, more experienced investors. But despite reading every book she could find, attending every seminar she could afford and even signing up for persuasive speaking courses, Eder believes true success comes when investors add their own creativity and personality into the equation.
“I felt like the seminars and the books were a good template,” she says, “but I had to be open-minded and fill in the gaps because none of those books are a one-stop-shop with a blueprint to follow.”
Since walking away from an illustrious career with no alternative plan in place, Eder has turned that lack of a roadmap into an advantage every step of the way. She has been forced to learn, forced to innovate and forced to recommit herself to her new pursuit every day. Making it in real estate in the GTA has never been harder, but Eder would be the first to say that the wildest horses are the ones most worth taming.
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