Investor profile: The sweet sound of success

In 1999, Wendy Cheung was on the verge of wrapping up her bachelor’s degree in music at the University of British Columbia. A gifted pianist and songwriter, Cheung envisioned a future woven from melody. Prior to graduating, she opened the Mozart School of Music, offering classical training for children and adults. She had no idea that in a few short years, the school would be operating out of a building she herself owned.

The Mozart School was both a passion project and Cheung’s first foray into entrepreneurism. As a struggling student, she remembers having to deposit $3 into her bank account just to withdraw the $7 balance she had. It was that moment when she realized that working for others was not the song she wanted to sing.

“That was a pivotal point for me,” Cheung says. “I didn’t want that anymore. I decided that being an entrepreneur and being in business was the only way I wouldn’t have to trade my time for money. I had to be able to think smarter and have a vehicle where I could grow a company, have flexible time and leverage other people’s time to make money on behalf of the company.”

She found all of that at the Mozart School, but the returns weren’t what she had in mind. “I wasn’t able to make it as big as I wanted,” she says. In 2005, having just given birth to her son, Avery, Cheung relinquished day-to-day control of the school and turned her attention to a pursuit that had taken BC’s Lower Mainland by storm: real estate.

BC’s most recent boom hit the province like an earthquake, the aftershocks of which are still being felt. The previous one, between 2005 and 2008, was more like a flood – of cash – and everyone was getting soaked.

“You just fell into the lap of real estate,” Cheung recalls. “You’d buy something, you’d sell something, you’d make money, and you’d roll that money over to buy something bigger.”

Banks were much looser with the purse strings, too; “zero down” was the call of the day. Up until 2012, Cheung remembers financing being a breeze. “I’d get preapproved prior to even looking at a property. The bank would just say, ‘Go ahead and shop. You have the credit. You have the money. Go do your thing.’”

Aside from paying off the townhouse she owned with her husband, Peter, Cheung had no experience with real estate. But with no debt, she had access to a generous line of credit, which she used to purchase her first several properties – a duplex, a single-family home and a few acreages – at random.

“I didn’t have a metric,” she says. “I just thought that if the numbers worked, or I liked the location, or it served my purpose at the time, I went ahead and bought it. I would not try to think it through really hard. I was just better off owning something that has value. I was acting like I knew what I was doing when really I didn’t.” 

Cheung’s willingness to take risks comes from her belief that real estate is “forgiving” – that if a property is well cared for and in a good location, its inevitable appreciation will make the setbacks (also inevitable) worthwhile. That faith has fuelled her courage; her courage has fuelled her wealth.

“I didn’t have any fear,” she says. “I have not looked back and said I regretted buying anything.”

Tuning up
Investors who start off lucky typically learn the hard way that they aren’t as prepared as they think. For Cheung, that lesson arrived early on, when she rented the basement of her duplex to a tenant willing to pay abovemarket rent and pay it in cash. She soon realized she was renting to a drug dealer.

The eviction went smoothly enough, but it wasn’t something Cheung wanted to go through again. Her screening process intensified to include references from multiple landlords and employers, in addition to income and credit checks.

Cheung is open about her past missteps and the lessons they’ve imparted. She says one bad habit – still hard to break after all these years – is being too enthusiastic and paying too much for properties. She once paid $150,000 over asking for a piece of land in Langley, actually going to the seller’s house to interrupt his dinner and put in her offer. (Ten years later, the property sold for half a million more than she paid – a decent return, but less than she had hoped.)

“I look back and I start to think, ‘What was I thinking?’” Cheung says, advising other investors not to rush into deals because “there’s always another deal around the corner.”

One area where Cheung has shown particular savvy is in assessing deals. As a beginner, she would buy “99 per cent” of the deals she came across, dabbling in a variety of property types until she discovered her comfort zone. But now, armed with the knowledge that an investor’s specific goals often require a certain property type, Cheung is far more strategic in her purchases.

“Maybe somebody wants to have the dividends on a monthly basis – they’re going to go with high cash flow,” she explains. “Someone who doesn’t need the cash flow but wants a bigger return on a project, they can subdivide land and then sell off the pieces, or they can build and have a better value at the end to sell to the consumer.” 

But without experience, Cheung says investors can lack the insight required to accurately assess deals on their own. “They may be looking into one dimension and end up biting off more than they can chew.” The most important assessment, she says, is of your own skills and shortcomings. “How much time are you willing to put in? What are your strengths? What can you delegate? Do you require a partner? You need to know yourself really well.”

The next movement
From 2005 to 2010, Cheung, along with her husband, brother and a coterie of jointventure partners, acquired 150 cash-flowing units spread across northern BC, Edmonton, Calgary, Surrey and Langley. But as one JV partner after another began hitting the financing wall, it was time for the group to shift their approach.

With a focus on land assembly and condo construction, Cheung’s brother, Rinco Chan, launched Alture Properties in 2010. The company, which includes Cheung and her husband as partners, has now launched projects in Calgary, Harrison Hot Springs, Pemberton, Cultus Lake and Toronto. 

Still a fresh face in the construction game, Cheung admits that meeting investor expectations brings with it a fair amount of stress. But by taking the same fearless, ‘fake it till you make it’ approach to development that she once took to residential investment, she is poised to capitalize on the next boom, even if it doesn’t take place in Greater Vancouver.

As Alture’s activity ramps up and the rent checks roll in, Cheung is teaching her son the rhythms and melodies of real estate, the symphony of numbers that has replaced music as the family business. Her first piece of advice? “Never sell this portfolio. If you’re going to sell one property, then you have to buy another one to replace it. Keep your cow and milk it.”

It might not be the most lyrical advice, but it’s music to Wendy Cheung’s ears.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Get help choosing the best mortgage rate

Just fill in a few details, and we'll arrange for a Mortgage adviser to help you find the best mortgage for your needs

  • How soon do you want a mortgage?
  • Name
  • Where do you live?
  • Phone number
  • E-mail address

Industry news

Submit a press release

Poll

Do you invest in commercial properties?