From his background in finance to his 20 years of investing in real estate, Ming Lim’s work with Volition Properties allows him to offer insights to those looking to break into the investment property market. It also appeals to well-established investors interested in expanding their portfolios.
Lim took time out of his busy schedule to speak with The Edge about leadership in real estate while sharing his expertise on the market and value of investment properties.
As part of an investment advisory and real estate company also offering design and renovation services, can you explain what you help your clients achieve?
I think one of the differences between what we do and what a standard real estate brokerage does is that we try to help clients reach their financial goals with real estate as that tool. Clients might come in and ask about buying 30 houses, but once we dig deeper, it’s very rare that somebody’s true ambition is to own that number of properties. There is usually a reason why they are looking to do this.
Maybe they want financial freedom; maybe they’re looking to have a way of being able to protect their wealth; or they have generational considerations. We try to get to the root of that to understand what drives them and then develop a strategy that involves real estate investing to help them achieve those goals.
Volition was created when my partners and I were young real estate investors. We had nobody to help us get our real estate investments off the ground. There are many people who help in very specific areas, but nobody who could actually hold your hand through the whole process.
We have a lot of these services, simply to get somebody from the planning stages to the end where a tenant is renting out the property, because there are so many things in between. We don’t do everything ourselves; we partner up with a lot of other folks. The idea behind it is to guide somebody through the journey, and I think it’s needed in this space.
We focus on Toronto, which is a very expensive market. When a client is spending millions of dollars on an investment property or even a condo — which is hundreds of thousands of dollars — it’s not a small amount. It’s not like you’re buying a $5,000 RRSP here. You really do need somebody to hold your hand a bit and help walk you through that process. That’s the niche we’re trying to fill.
What are some of the key factors that a brand-new investor should consider when looking at investment properties?
When people are starting their real estate investment journey, there’s often a tendency to become very focused on single properties or to look at very niche areas. It’s important to take a bit of a step back and ask, “Why am I even doing this?” or, “What is my life going to look like in 10 years?”
The answers that we get from our clients are quite varied. We get things such as, “I want to be on a beach somewhere,” or “I want to be running a business or managing people.” Those are very different paths for an investor to take.
By really beginning with the end in mind, we can then try to figure out what that path might be. For example, if a client is looking to run an active business and likes the idea of working with students, looking at student rentals might be one area [for them to invest in]. If a client’s goal is to be on the beach, collecting passive income is the best option. They’d better have renters who are very low-maintenance, then work backwards from there. Instead of trying to find the perfect property and then having your goals fit around that property, it’s important to consider how demographics impact what you want.
For those clients who already have investment properties and are looking to expand, how does this advice differ?
Anybody who has invested in the last 10 years looks like a genius, right? Because the market has gone nowhere but upwards. It’s called a real estate cycle for a reason. It’s not an “if” — it’s a “when” there will be a change in the market.
What really separates sophisticated investors — who are looking to take things to the next level — from somebody who’s just “lucky” is their ability to mitigate risk. One of the things that we really focus on at Volition is risk- mitigation strategies, which comes from my background in finance as well as the experience of my business partners.
We take a risk-mitigated approach and risk-management approach to our client’s portfolio. How resilient is it going to be when the downturn comes? How resilient is a portfolio going to be when interest rates change, or when something like COVID happens?
What would be your advice for someone who wishes to be a leader in the real estate investment industry?
Focusing on a specific niche and being of service to your clients are important. It’s really about becoming an expert in your area. Do you have the passion, drive, and knowledge to be successful?
With leadership in the real estate investing space, it’s very important that you find and hire a good team. You can’t be an expert in absolutely everything, but you can hire members of your team — marketing, lawyers, accountants — who have experience and are established investors themselves. As a leader, developing relationships with your clients, your team, and specialists will ensure that you operate at the next level, provide you with a new perspective, and allow you to continue to develop.
Stephanie Hawkins | Contributing Writer