“A lawyer, a public company financier, a real estate marketer, a cop, and a real estate agent walk into a diner…”

“I went out for lunch with a few old university friends yesterday. One was a lawyer, one a public company financier, one a real estate marketer, one a cop, and of course, one of whom was a Real estate agent.
Needless to say, the conversation ultimately led to the fact that we all hate our jobs! When it came to the police officer’s turn to gripe, he expressed that after 10 years on the force he was finding his work becoming particularly mundane. In fact he had taken to framing houses on the weekend with a carpenter friend of his in return for free help with a renovation he was doing at his own residence. He said he really enjoyed the labor/results aspect of the work versus what he deals with at his 9-5. But when he began saying that this framer buddy of his and he wanted to build a few houses out in Port Moody and sell them I damn near pulled out his pepper spray and gave myself a good spritzing.
I did my best to casually offer a warning of dabbling in the dark arts of amateur development… but hell, what’s the worst that could happen?”

nom nom no at VREAA 19 Oct 2012 7:53am

We’d submit that a major reason that so many in mid-career find their jobs ‘mundane’ is the era of bubbles. In typical times, one develops a profession or a trade, strives to do it well, and is rewarded by society for one’s work.
Since the 90’s, we have heard so many stories of those speculating on tech stocks, housing, and sector-whatever, making ‘x’ times their annual income in ‘y’ months, that the fabric that holds together part of the reason for working unravels.
Why should I continue to be a perfectly competent dentist when society will reward me better for flipping condos or trading stocks in my pjs?
This distraction is part of the misallocation of resources that occurs in times of speculative mania/s.
We need police officers to be good police officers, and dentists to be good dentists; not to be taking off to build and flip houses.
– vreaa

39 responses to ““A lawyer, a public company financier, a real estate marketer, a cop, and a real estate agent walk into a diner…”

  1. I’m a member of Canadian Money Forum and for about a year we would get people coming in and proposing some hare brained scheme to buy real estate and ask us “Would this work?” Due to the latest media coverage these people have disappeared.

  2. Or it could be that he finds that his efforts to keep the streets clean, safe, and welcoming are not being rewarded by a justice system that acts as a revolving door for junkies and enablers. The cop says he finds satisfaction in producing something (framing) and seeing the results of that work stand tall. There is a tangible result. I’m surprised the Realtor didn’t complain that they were tired of pushing crap down people’s throats as either an investment for financial gain (property) or in family stability (a home). No doubt, this cop would also find satisfaction in a role that restored cars, engineered parts, or any numerous roles that actually “produce results”. Construction is just what he happens to have access to/knowledge of.

    • Agree, those may be a contributory reasons for him being disillusioned with policing.
      But see what the bubble does?
      Instead of a good police officer then applying himself to use his position to improve the community, and improve policing, he is distracted into construction by the seduction of profits. Yes, he may find he gets some satisfaction from building things, but the move only really happens initially because of the attraction of relatively easy money.

    • 4SlicesofCheese

      I was on board until he said “he wanted to build a few houses out in Port Moody and sell them”
      10 years ago if someone said that you would think is just joking and dreaming. Today, they would actually go through with it.

    • Rob, your gripes against the justice system are your own. There’s nothing in the story that suggests the cop was making complaints along those lines. All jobs have their frustrations and workers their gripes. From the story it sounds like this cop’s gripes on this particular night were “mundane work”. You may be right about other things he might find satisfying. I’ve met cops with some pretty nuanced views about the advantages and disadvantages of our justice system.

      More interesting is the fact that the cop’s talking about going past home improvement and side work that interests him to diving into the speculative real estate market – the misallocation of resources highlighted by our host.

  3. Police officers don’t make enough to live in Van. Remember that fireman a few years ago that got busted for growing weed? See what high housing costs does to our economy?

    • Four on, four off. $85k after four years on the force, and enough contiguous free time to take a second job (like, say, small time real estate developer), if the hours are flexible.

      • Renters Revenge

        And a fully indexed pension at age 55. A good 10 years of double dipping if he feels inclined.

    • They earn every nickel they make. If you think police should be poorly paid you probably haven’t been to Mexico.

      • Ralph Cramdown

        I hate this theory. When it comes to the police and firefighters, my market driven theory is: If, after widely advertising entry-level openings for a few months, not enough qualified recruits are found, we’re underpaying. If they get over a thousand applications within a few days, we’re overpaying.

      • A Rhetorical for Ralph…

        Which brand of PublicSafety™ and CriminalJustice® would you prefer…

        Moscow? Beijing? Mexico City? NewOrleans? Detroit?…

        [NoteToEd: my personal ‘favourite’ was EastBerlin’s… but I did win that particular engagement. A bargain at 50DM and some, “Schnell sprach.”]

      • Aldus Huxtable

        Nem, amazed at your east Berlin survival. I survived checkpoint Charlie.

        However, I recently visited Detroit and Flint. In Flint it’s easy to get murder capital of America merchandise. I regret not getting one, it was designed as the Pabst Blue Ribbon logo.

        What could Vancouver use for merchandise…..

      • Ralph Cramdown

        I’ve been to three of five of those cities, and arrested in none (thought I WAS ordered off Red Square…)

        A few years back, there was a plan in my city to redeploy police for more effectiveness (i.e. they were going to pull officers from low crime areas to deploy in high crime areas). The police chief actually addressed the public and asked if we wanted to live in an area where police would be removed. “Damn straight,” I thought, “but can I afford it?”

      • At Checkpoint Charlie one was forced to relinquish 50 (west German) DM for 50 (east German) DM, a laughable exchange, the latter of which bought you some bad chicory coffee and some form of ‘kartoffel’ dish during your East Berlin sojourn. But the Pergamon Museum was worth the chicanery.

      • Just for fun… two PublicSafety™ and CriminalJustice® pieces from Blighty with a delicious RE twist! First up… A SundayFunnies Quote ‘O TheWeekend!…

        “Expenses are there to cover the extra cost of living in two places, not to help politicians profit from property.” – Robert Oxley, Campaign Manager TaxPayers’ Alliance

        [UK Independent] – Anger at MPs who prefer hotels to home: ‘London landlords’ rent out their own properties then rack up claims for staying in the capital

        …”The Independent on Sunday revealed two years ago that, months after a tougher expenses regime began, MPs were claiming expenses to rent London houses within miles of properties they were letting out. Last week it emerged that more than 20 MPs were now “London landlords” – in at least one case letting property to another MP – yet living elsewhere and claiming accommodation…

        …MPs last night claimed the new rules had forced some into moving into rented accommodation – and hotels – as they can no longer get their mortgage interest paid on expenses. A number of MP landlords have insisted they cannot sell their homes because they are in negative equity.”…

        http://tinyurl.com/94bj8s6

        [NoteToEd: The STASI got me for speeding. Duh. NoteToSelf: WestGermanPlates, bad idea circa 87 – equivalent to BumperSticker: Kostenlose Geld! – PS – elswhere in thread is a particularly juicy RoboRedaktor hostage]

      • [Telegraph] – The secret US lobbyists behind Police and Crime Commissioner election: A high-profile candidate campaigning to become one of the Government’s new elected Police and Crime Commissioners is being secretly backed by American neo-conservative lobbyists and companies pushing for police privatisation.

        ….”However, it can now be revealed that it has been run by a team from a US-based neo-conservative think tank, the Fund for the New American Century, funded in part by a variety of corporate donors with an interest in public-sector privatisation.

        The entire campaign team resigned yesterday within hours of being contacted by The Sunday Telegraph.

        Lincolnshire may have been chosen because the county’s police are already “outsourcing” pioneers.

        The troubled firm G4S has recently taken over key functions at the force, including its custody suites, central control room and firearms licensing department. G4S also plans a new central police station in a village outside Lincoln, with the existing city centre station closed and sold for housing.”…

        http://tinyurl.com/9zhfdxd

        [ NoteToEd: The British experience of privatisation of public goods/services has, to date, been universally appalling – by any measure. Load’s ‘O Dosh have changed hands, though…]

  4. Hey VREAA,
    This is a post of particular interest to me. I’ve switched careers 3 – 4 times in about six years. I ran a tech support group in Toronto, then switched to project management, then to chef, then to UNIX security analyst and finally back to PM.

    It’s really challenging to hang on to jobs these days. My experience has been that employers often treat employees as talking furniture. No matter how many skills, experiences or certifications you acquire companies seem to think they can just walk you out the door any time they choose. Incidentally, they can’t. I’ve had to pursue legal remedies more then once, and every time the employer seems surprised that I have… you know… rights. They seem even more surprised that employment contracts are two way streets.

    No wonder the lure of easy money is so attractive. Honestly, when you see some douchebag in a (leased) sports car barking orders at some hapless intern while sipping a latte and making ridiculous offers on properties that are far out of your reach, it has to be a little tempting to *be* the douchebag!

    People really are caught in the lure of easy money. I’m living with a friend of mine here in Toronto. He manages parking garages for a living, and makes less then half of what I do. He bought his home 10 years ago and has been diligent about paying down his mortgage, which… you know… good for him.

    But he’s *also* bought a presale condo which comes available Feb. 2013. I was gobsmacked at how absolutely serene he is about the whole thing. I tried to explain to him that he has essentially borrowed money to place a bet on the futures market and that the market has clearly begun a crash. I have pointed out when the contract comes due if he can’t unload it then his plan is going to backfire…instead of the presale paying his mortgage, he’ll have to take another mortgage on his house to close the contract. I pointed out there’s no guarantee he can just name a price that suits him just because that’s what he feels he deserves. I pointed out that if he has to pay closing costs, fees, land transfer tax, condo fees, special assesments, property tax and maintence, he’s *SUNK*. There’s no way he’ll be able to cover that.

    And yet… “real estate always goes up.” “There are lots of people who want to live here .” (it’s spread to Toronto!!!!) “Well yeah, if what you describe what happens comes true I’ll be in trouble, but you have to take a risk”.

    I compare that to my own experience. I spent six years getting educated and developing a very particular skillset. I am a technical project manager that specializes in migrating financial services firms over to cloud based computing platforms (elevator speech!). It’s taken 6 years to get here, but I’m finally just beginning to see the rewards. I’m managing 3 projects for my boutique firm for some pretty big and well known clients.

    My friend is bored with his job and a little envious of mine. He expressed amazement that I’m pulling down twice what he does and asked how he could do the same. I told him he’d need to go back to school and study for about 8 months, then start at the bottom, which he’s absolutely unwilling to do.

    My friend can be a little patronizing about money. I’m still putting my life back together, and I had to make a few calculated risks. For instance I bought myself a computer on a Best Buy card. It’s essential that I have a top of the line system, since I need to pump out high quality documents and access information very quickly. It’s also a tax write off. Still I got a lecture from this guy about the interest. I think it’s a little funny that I got a lecture about a short term high interest loan on $2,000 from a guy who doesn’t seem to understand the position he’s in.

    So… yeah… easy money is easy, until the day it isn’t.

    Given a choice between being a tortoise or a hare, I’ll be the tortoise thanks.

    • The tortoise never wins if central banks carry the hare over the finish line. It will be free money for your friend or others who think like him until the end of money.

  5. I don’t know if this is a 90s onwards issue, it looks to me like normal going back much further. Someone mentioned “dentist”, I think there might have been an anecdote on that ere stored in the archive.

    • Yes, there is an anecdote in that regard, and it’s a profound one:

      “He says he made more on the sale of that house than he made in his entire career as a dentist.”
      VREAA, 21 Aug 2011

      “My neighbor is a dentist, probably in his 70s. He owned a house in Shaughnessy, custom built decades ago, which he recently sold. The buyers, from Beijing, viewed the house for 20 minutes, then wrote a cheque for the entire asking price. He says he made more on the sale of that house than he made in his entire career as a dentist.”

  6. UBCghettodweller

    Excellent insight on this one.

    As I pursue my PhD, this feeling has started to invade my daily thinking. Why spend most of my 20s and early 30s working to become a professional scientist when I see friends and family members becoming real estate agents or simply becoming house flippers and earning several times what my yearly stipend is?

    Conversely, I have the feeling that I’m one of a dying species in North America- you know, people who make, discover, and create things for a living rather than just buying and selling existing products. It’s my hope that in the future, the ability to build genetic constructs, analyse and manipulate genomes so that one can essentially “program wetware” will have enduring value as a useful skill.

    • It’s going to be quite a race, BordelloDweller… as between WetWare vs. AI/HardWare… (and I’ll bet SkulleryBoy can flesh out that scenario from the perspective of future ’employers’). In the next iteration of the “5 guys walk into a diner” joke, odds are 4 of them will be robots… (and the 5th WetWare™?). e.g. – Charli2.0™… does it ‘GearNamStyle’…

      [NoteToEd: Charlie2.0™ is the prototype for the UnitedStates Navy’s A.S.H – Autonomous Shipboard Humanoid – who, in the not terrbily distant future will fight shipboard fires and perform DamageControl. OffDuty, he will doubtless be programmed to perform the Sailors’Hornpipe. Let’s hope the Coders don’t forget Azimov’s PrimeDirectives. Just between the TwoOfUs, Ed – there are other, less benign versions of Charli2.0™]

      • Rumour has it… Detroit has some on order…

        [NoteToEd: and you thought RoboCop was ScienceFiction?!? More worryingly, these will apparently be available as an optional extra at additonal cost on select Hyundai-Kia automobiles.]

    • I nearly forgot, BordelloDweller… be careful what you wish for…

    • Because you need a way out of here when it all goes to hell? Advanced degrees are good for that.

      • UBCghettodweller

        Post-Doc positions aren’t exactly high paying or come with reasonable work hours, but they are relatively easy to find in nice cities with lower costs of living… San Diego is looking pretty damn good about now.

  7. One final, bleak, parting thought… If all of YVR’s Cops and FirePeople can no longer afford to live in the same ‘burg they ply their trade… What’s the likely scenario the DayAfterTheBigOne™… when the bridges/tunnels are rubble?

    [NoteToEd: Anecdotally speaking, I know of at least one ‘CouverBeatCopper who commutes from…. Nanaimo. Yes. Housing.]

    • Hilarious, Leo… here we are on November’sDoorstep and the Sun’s unpaid RE sponsored advertorials are featuring August… yes, that’s right DearReaders, August transactions to bolster TheGrandIllusion. Speaking of GrandIllusions… “They’re back.”….

      And here’s your Quote ‘O TheWeekend!!! [NoteToEd: That would be the TheFlippers™. Seriously, you’d have thought they would’ve learned something from that little ‘episode’… and no, I’m not talking about that cute 60’s Florida show featuring Ronnie Howard’s BFF. NoteToBordelloDweller, et al: BloodPressureWarning]…

      “If I do one house every quarter, I’m making $125,000 a year — at 25 years old. All my other friends, they have a 9-to-5 job. They make probably half of what I’m making right now. It’s kind of like hitting the lottery.” – John Irvin, Flipper® CastMember, formally a Norsdstrom’s ShoeSalesman

      [WaPo] – Flipping houses is once again a booming business

      ….”Flipping earned a bad reputation during the housing boom thanks to speculators who bought and sold millions of homes in search of easy profits. But the practice is gaining popularity again as the nation’s real estate market shows signs of life. The number of flips rose 25 percent during the first half of 2012 from the same period a year earlier, according to research firm RealtyTrac, and the gross profit on each property averaged $29,342.

      RealtyTrac Vice President Daren Blomquist said the resurgence in flipping offers another indication that, in many parts of the country, housing prices have finally stopped falling.

      “There are flippers in any market, but a market where home prices are appreciating is much more forgiving for flippers than a market where prices are depreciating,” Blomquist said. “We have turned that corner in a lot of places in the last six months, so that’s going to attract flippers.”….

      http://tinyurl.com/8sfzyrk

      [AfterThoughtForED: Notwithstanding the JollyPropaganda you may well recall that in terms of both absolute dollars and TX volume the so called YanquiHousingRecovery has been driven primarily by REO to Rental purchases… especially as regards SpecialFriends of the current administration, e.g. – BlackRock. pssssst… Don’t tell anyone… but BlackRock is now unloading/securitizing their REO acquisitions. HintHint.]

    • RoboRedakto strikes again, IllustriousEd. No anatomicals this time either. I think Robo’s p****d because he has AUM with BlackRock.

    • psssst…. RoboRedaktor is holding one hostage right about here….

    • Incorrect lesson learned: you get your asking price as long as you’re prepared to wait.

      The piece de resistance is the 1928 vintage apartment netting 3.6%.

  8. I collected intel on people with above average standard of living and surprisingly (or not ? I thought they had other professions ) all of them are related and dependent to RE in one way or another. When this turns around, it will be ugly.

    Is easy to look the ‘created jobs; (btw. short term jobs) by RE, but not all the unseen destruction: startups and factories that were not funded, people that chose RE instead of another career, etc.

  9. pricedoutfornow

    But this obsession with real estate, and people making oodles of money in real estate will end. Soon. So while we feel disenchanted now with the whole real estate situation, those who didn’t participate in the mania won’t be feeling so when it all turns around. We will be counting our lucky stars!

    Funny how things change. Case in point: I’ve had insomnia for many years, and during those sleepless nights I spent a lot of time reading brainless (but sleep-inducing) novels from Ireland. The stories (from the early 2000s) all used to mention how rich people were in Ireland, how all they did was buy properties at the right time and POOF! they were suddenly very wealthy (on paper, at least). Also mentioned was how well paying the jobs were in Ireland and how everything was great with the economy. These days, the novels now just mention how the property downturn has affected everyone, their jobs and many people can’t sell their properties for more than what the mortgage is. In one case the character was even stuck with a property that was worth half of what they paid for it. What a shame.

    I do believe things will change here, it’s coming, it’s only a matter of time. We are not different.

  10. At least in Vancouver, rents are not “through the roof” yet. =)

    http://www.npr.org/2012/10/18/163174623/to-shrink-rents-sf-considers-shrinking-apartments

  11. I am a little confused about the way pre-sales will work in a tighter credit environment.

    Are all these buyers currently pre-qualified? Or are they required to qualify upon completion? I was always working under the assumption that you leave a deposit with the developer, but no bank was willing to keep terms in play until completion. It doesn’t seem reasonable to guarantee a rate, or terms until 2015.

    That leaves me wondering if all these buyers will be facing similar scenarios that those on projects completing in 2008 did. Values coming in under assessment and banks unwilling to lend unless buyers make up the difference.

    Can any one clarify? Why are these buyers not purchasing existing units in Metrotown? Plenty to go around.

    This is all too confusing. Sales are down, mortgages tightened, and now pre-sales are going strong. This isn’t an isolated incident either, SoLo in Brentwood moved a few hundred units few weeks back as well. Not to mention Marine Gateway.

    All this is hard to digest. I have a much easier time digesting financial markets than I do our local housing market. That in it self is a sign of the times.

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