International Village in Downtown Hamilton

In this article, I will take you through my personal journey in the real estate world, starting from my early days in Downtown Hamilton. It's a story of taking risks, learning from the ground up, and ultimately finding success in a market and career while many people initially doubted me. I'll share the challenges I faced, the strategies that worked, and why, in 2020, I decided to prepare my $15M portfolio for liquidation. I will also share why I decided to leave Canada and move to the Caribbean real estate market. Join me as I reflect on my experiences in Hamilton and look forward to the vast potential of my new ventures in the Caribbean.

My First Investment in Downtown Hamilton

My First Rental Property in Downtown Hamilton

When I took the leap and purchased my first investment property in Hamilton, I never imagined how it would transform my life. In 2011, most people were telling me that I was crazy to be buying real estate in Downtown Hamilton, but this first investment was a game-changer for me and sent my life on an unexpected trajectory. I remember pouring over data, evaluating the Hamilton real estate market trends, and recognizing the incredible opportunity within the mix of residential and commercial real estate Hamilton offerings.

When I first discovered Hamilton in 2009, the city’s unique blend of urban density and heritage charm was very attractive. At the time, the city was very rough with many vacant buildings, homelessness, and crime, but with a big inventory of turn-of-the-century homes and brick-and-beam office spaces, Downtown Hamilton presented itself as a potential hub for commerce and culture. Evidently, the city's continuous evolution meant investing in such a vibrant area could generate significant returns.

Here's a snapshot of why I found Downtown Hamilton irresistible for real estate investment:

Strategic Location: Nestled in the city's heart, with access to key commercial sectors and government agencies.
Architectural Diversity: A rich tapestry of old-world and contemporary design, offering a variety of amenities and styles for businesses.
Educated Workforce: A populous city with over half a million residents, many of whom are highly educated and seeking quality work-life balance.
Livability: Ranked as one of the top ten cities in Canada to raise a family.
Location: Only a 45 min drive from Toronto and all-day Go Train service, Hamilton is an ideal city for commuters

The Downtown Hamilton Business Improvement Area (BIA) had a vision that resonated with my beliefs – a vision of a thriving, lively downtown that could be the heart of the community. Their dedication to advocacy, promotion, development, and preservation laid the groundwork for investors like me to feel secure and supported.

I saw my first investment here as more than just a purchase. It was a stake in the city's future, a bet on its continued growth and prosperity. Being part of Downtown Hamilton's renaissance was an opportunity I couldn't pass up. As buildings were refurbished and new businesses opened their doors, I watched my investment grow, and I knew that I had made the right choice.

Becoming a Downtown Hamilton Expert

A View of the Downtown Hamilton East End Skyline

Studying the Market Dynamics

When studying the Hamilton real estate market, analyzing the ever-evolving trends and economic indicators was crucial. The local market dynamics in Downtown Hamilton revealed a landscape ripe with potential owing to its architectural diversity and its commercial appeal. Old mixed-use buildings and unique brick-and-beam structures offered attractive opportunities for commercial real estate ventures.

Tracking growth patterns, such as the increasing urban population and infrastructural development symbolized by "more cranes in the sky," gives me insight into demand cycles. This knowledge is the backbone of my investment strategy, letting me stay ahead of market fluctuations and capitalize on burgeoning trends.

Choosing my Target Neighbourhoods

Zeroing in on prime locations within Downtown Hamilton needed a strategic approach. Most of the neighbourhoods are very eclectic, and some look very different during the day than at night. I've earmarked neighbourhoods not merely for their current value but for their potential to appreciate. I looked for neighbourhoods that were rougher but on the edge of Downtown Hamilton and has the potential for gentrification.

I started buying in the Strathcona Neighbourhood on the city's west side. Then moved to the North End, now rebranded as West Harbour, very close to downtown Hamilton. As these neighbourhoods became more expensive, they started targeting the east side of downtown, including Stinson, Beasley, Landsdale and Stipley.

Investing in Downtown Hamilton Real Estate Full-Time

Quitting my Job

Deciding to leave my secure job to invest into Hamilton real estate full-time wasn't a decision I made lightly. At the time I only had about CAD $150,000 in capital, and another CAD $100,000 in access to debt. But, I aimed to immerse myself in Downtown Hamilton's vibrant and evolving landscape. I saw a huge opportunity in the market here. With commercial real estate in Hamilton showing promising growth, the diverse architectural styles and community vibes convinced me to trade my nine-to-five for investment gambles and architectural gambits.

Sourcing Deals Downtown Hamilton

Navigating the Hamilton real estate market involves more than just identifying the right property; it's about securing it on favourable terms with the sellers and not being afraid to jump into a bidding war. I've honed my approach to sourcing deals through a vast network of contacts within the local business community, which includes property owners, local officials, and other investors.

Masterful negotiation in commercial real estate is about understanding value beyond the price tag and the properties inherit value. It's recognising the long-term potential of a property and its highest best use, enabling me to negotiate deals that reflect the true worth of an investment.

I've honed my negotiation skills to ensure I'm always ahead of the curve, capitalizing on opportunities before they're common knowledge.

Finding Good Tenants Downtown Hamilton

Issues at the Landlord Tenant Board in Downtown Hamilton

Finding the right tenants is as much about matching people to spaces as it is about the numbers. In Downtown Hamilton, tenants are drawn by:

The unique mix of urban and historical environments
Access to parking, storage and other good amenities
Proximity to major government and financial institutions
Access to a variety of class-A and brick-and-beam office spaces

I screen my tenants diligently to create a community that contributes positively to the downtown core's growth.

How I Utilized the BRRR Method

The BRRR method—Buy, Rehab, Rent, Refinance, Repeat—has been my playbook for success. Here's a snapshot of how I've applied it to my Hamilton real estate ventures:

Step	Description
Buy	Acquiring undervalued properties in strategic Downtown locations
Rehab	Enhancing property value through targeted improvements
Rent	Attracting premium tenants with the promise of a reinvigorated space
Refinance	Leveraging increased equity for further investment opportunities
Repeat	Applying the proceeds to expand my real estate footprint

By repeatedly applying this strategy, I've built a robust portfolio that's responsive to Downtown Hamilton's dynamic market.

My Pivot to Commercial Real Estate Hamilton

Downtown Hamilton Commercial Real Estate — King Williams Street

After establishing a foothold in Hamilton's residential property market and building a portfolio of rental properties, I decided it was time to pivot into the commercial real estate sector. Prices for residential property started getting frothy in early 2017, and I recognized the city's growth potential for a robust business environment. I shifted my focus to properties that would cater more towards professional services and enterprises, seeking to capitalize on the anticipated boom in the Hamilton real estate market.

Multi-Family and Mixed-Use

The transition to commercial real estate in Hamilton began with an eye toward multi-family and mixed-use properties. These buildings are a cornerstone in urban development, reflecting the dynamism of Hamilton. I've observed the following benefits:

Diversified Income Streams: Multi-family units have allowed me to tap into multiple sources of rental income under one roof, which mitigates the risk that often comes with single-tenancy investments.
Multi-Purpose Spaces: The mixed-use developments combine residential living with commercial opportunities, providing conveniences like retail shops, offices, and restaurants, invigorating the neighbourhood.

I've worked closely with local planners and stakeholders to ensure my investments align with the community's needs and future growth. My strategy within the Hamilton real estate market includes acquiring properties that boast both residential and commercial potential, thus positioning myself to benefit from different market shifts.

Commercial Warehouses Downtown Hamilton

Downtown Hamilton has seen an increased demand for commercial warehouse spaces, driven by a surge in e-commerce and the need for centralized distribution points. Recognizing this demand early on, I've focused on commercial real estate in Hamilton that can serve as logistic hub. Here's what I've found:

Strategic Location: Hamilton's access to major transit and shipping routes makes it ideal for businesses to connect with other parts of Canada and the US effectively.
Adaptive Reuse Potential: Older industrial buildings in Hamilton offer unique opportunities for creative redevelopment, transforming them into vibrant spaces for both new start-ups and established businesses.

As part of my investment strategy, I've zeroed in on commercial warehouses in locations predicted to increase business activity. By doing so, I'm investing in property and the future of Downtown Hamilton as a key economic driver in the region.

Growing a $15M Real Estate Portfolio Downtown Hamilton

Investing in property can feel like navigating a complex maze, but finding success in the Hamilton real estate market has been a journey of strategic acquisition and careful research and planning. Growing my portfolio to $15M over five years of hard work, sleepless nights, and substantial risk. There were many times when I would purchase a property without knowing where the money was to close. But I knew that a good deal would always find the money.

I've honed my approach by focusing on properties with immediate value and long-term growth potential. In the heart of the city, I discovered an unparalleled mix of commercial real estate and residential spaces ripe for development. The unique architectural blend of urban and suburban styles, coupled with the location's rich history, made Downtown Hamilton the ideal ground for my ventures.

Capitalizing on the Hamilton real estate market was more than a business for me; it gave me the opportunity to become financially free, travel the world, and invest internationally.

Why I Decided to Liquidate my Portfolio in Downtown Hamilton

Vacant Property on King St E in Downtown Hamilton

COVID Price Increases in Downtown Hamilton

During the pandemic, Hamilton's real estate market faced unexpected dynamics. Like many cities, Hamilton saw substantial increases in property prices, particularly in the downtown core. Initially, I had invested heavily in commercial real estate in Hamilton, anticipating steady growth. Yet, pandemic-induced trends had owners and investors questioning market stability. As prices in downtown Hamilton escalated, I made the strategic decision to liquidate portions of my portfolio to capitalize on the high market value before any potential downturns.

Landlord Tenant Board in Ontario

Navigating the Landlord Tenant Board in Ontario can be a nightmare for any real estate investor. Regulatory changes during COVID-19 created new complexities in lease agreements and eviction processes. My experience as a landlord in Downtown Hamilton was no different. The increasing time and resources required to comply with new regulations spurred my decision to re-evaluate my investment strategy. Therefore, the decision to liquidate my holdings was influenced by the need for more administrative agility and less operational red tape.

There is also a large group of “professional tenants” who will purposefully apply for apartments without any intention of paying with fake documents and stories about why they need to secure a place ASAP. Although there are red flags, these tenants can be very hard to spot, especially for a season real estate investor or property management representative.

Government in Downtown Hamilton

Hamilton City Hall in Downtown Hamilton, Ontario

My interaction with governance in downtown Hamilton also guided my choice. While my commitment to the community has always been strong, and I have been a big supporter of the city, I felt that during COVID-19 and even prior to that, the city’s government really was going in the wrong direction. The LRT fiasco is a testament to that. It’s crucial to adapt to local government policies that could impact the profitability and management of my assets.

Policies aimed at rejuvenating the city's core encompass both opportunities and challenges. I decided to liquidate my portfolio partly due to impending government-led initiatives, lack of responsiveness to the homelessness pandemic gripping the city, and lack of support for new developments.

Risk of Increasing Capital Gains Tax in Canada

Tax implications have always been a significant consideration in my investment decisions. With rumours and discussions around a potential increase in the capital gains tax in Canada by reducing the exception from 50% to as high as 75% of the gain, I had to reflect on the possible financial impact. Projecting a likely scenario where capital gains tax rates could rise, liquidating some assets sooner rather than later became a logical step. By doing so, I aimed to optimize my returns and mitigate the risk of higher taxes eroding my profits in the future.

Started Investing Internationally

Lastly, the main decision to liquidate my Downtown Hamilton real estate portolfio ties in with my broader goal of diversifying internationally. I had already decided to move to the Caribbean by 2020, and saw much more opportunity here than investing in the Canadian market. The global real estate landscape offered many opportunities for cashflow and potential appreciation, similar to Hamilton when I started investing in 2011. The ability to invest in different markets allows for risk mitigation and potential access to growth in developing economies. Liquidating my local assets provided me with the financial flexibility to begin branching out into international real estate ventures, aiming to diversify further and strengthen my portfolio.

Selling Everything and Moving to the Caribbean

My First Investment in Jolly Harbour, Antigua and Barbuda

Decisions in life are rarely without trade-offs, and liquidating my Hamilton real estate holdings was no exception. On one hand, I gave up my stake in a market that still has the potential to boom. But diversity and agility have always been the cornerstone of my investment strategy, and the Caribbean promised a whole new spectrum of opportunities. While the Hamilton real estate market has the potential in the future, it also comes with its unique challenges: navigating regulatory frameworks, tenant and government issues, and taxes in Canada. By contrast, the Caribbean offered my portfolio a stable and more tax-efficient investment environment.

Looking back, letting go of my real estate investment business in Hamilton was tough. Prime real estate downtown Hamilton, a well-established network, and a community I've grown alongside since the early 2010s. These were substantial, yet not irreplaceable, and my pivot towards international investment at first was riddled with second guesses.

Certainly, there's nostalgia for the hustle of the Hamilton real estate market, but in essence, I've swapped the Hamilton skyline for the Caribbean beaches, a trade that's less about regret and more about evolution. My timing also turned out to be fortunate. Since I sold the market is down 20 - 30% depending on the asset class and neighbourhood. I look back now and realize that Downtown Hamilton was the ultimate place for me to cut my teeth in residential and commercial real estate, and I know it has set a resilient foundation for what lies ahead.

Would I Consider Buying Property Again in Downtown Hamilton?

Downtown Hamilton Skyline in Hamilton, Ontario, Canada

As I continue to monitor the shifts in the Hamilton real estate market, it's natural to ponder whether reinvesting in Downtown Hamilton would be a savvy move in the future. I know the city and have great connections with mortgage brokers, contractors, architects, and more. The vibrant urbanscape, with its unique mix of architecture, is undeniably alluring. My prior experience in the booming Hamilton real estate market taught me the importance of timing and local dynamics.

While nostalgia for my Hamilton roots remains, I’m focused on growing my portfolio of properties and businesses in the Eastern Caribbean, where I’m based. Markets like Antigua and Barbuda, Grenada, St. Lucia, St. Kitts and Nevis have huge growth potential. The shift to these emerging markets offers new challenges and opportunities. The Caribbean's growing tourism and expanding economic base present unique investment avenues that are currently underexplored. With lower barriers to entry and the potential for significant ROI, these islands offer a fertile ground for real estate ventures.

Conclusion

Boating Near Hamilton, Ontario on Lake Ontario

My time in Downtown Hamilton's real estate market was a defining period that shaped my identity as an investor, entrepreneur, and individual. I am deeply grateful for the connections and invaluable experiences gained during this phase. The possibility of returning to this market through a real estate fund is an exciting prospect that would allow me to leverage my expertise while contributing meaningfully to the community.

At the same time, my freedom has opened up opportunities in the Caribbean, a region brimming with potential for significant real estate ventures. This new chapter in the Caribbean offers a blend of innovation and community-focused development, promising to be as transformative and enriching as my journey in Hamilton.

**Bio**

International Real Estate Investor and Entrepreneur. Founder **@Offshore Freedom** | Host of the **@CaribbeanRealEstatePodcast**
We help successful investors and entrepreneurs live and invest tax-free in the Caribbean and buy real estate internationally.

Schedule a consultation with Dan Merriam, and let him help you design the life of your dreams and achieve Offshore Freedom™. Ask questions and get answers about the Caribbean, tax planning, banking, international real estate, second residencies, citizenship by investment and lifestyle design,

Writer in Tax Reduction, International Tax Planning, Travel, Golden Visa, Second Residence, Real Estate Investing, Downtown Hamilton, Commercial Real Estate, Hamilton Ontario, Real Estate Hamilton, Rental Property, BRRR Method, Caribbean Citizenship, Global Mobility, Technology, Asset Management, Lifestyle Planning, Company Formation, Offshore Banking, Asset Protection, Technology, Entrepreneurship

Why I Liquidated My Real Estate Portfolio in Downtown Hamilton