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Secrets of a multi-millionaire real estate kingpin

Kerry Gold, Money, Dec 3, 2010

While economists continue to deliver contradictory reports, one real estate mogul says he's been forecasting the market correctly for nearly 40 years.

Rudy Nielsen is a real estate kingpin in B.C., and not just because his company Landcor compiles the most comprehensive real estate statistics in the province. Nielsen is one of the biggest private property owners in B.C., a developer, and cattle rancher who's been buying and selling recreational property for the last four decades, including some of the biggest land transactions in the province. Until Nielsen recently started unloading some of his properties to free up some cash, he held the title of No. 1 biggest private property owner in B.C. As a consultant, he's overseen $100 million deals.

Nielsen is also a character in an otherwise bland suit-and-tie business — visit his office and you'll find a place that looks like the set for a western-themed TV show, with steer skulls on raw wood walls. Real estate is in his blood, and buying, selling and researching it is not a job, but a sport for Nielsen.

And unlike most realtors who will tell you that it's always a good time to buy, Nielsen will tell you what he really thinks — that this is not the best time to plunge yourself into debt. It's always time to pounce on a great deal, but mostly it's time to watch and wait.

That kind of candor is a rarity in the industry.

"Whatever I do, I want to be the best in the world," says Nielsen. "I know more about B.C. recreational land than anybody else in the world, and whatever I've done for the last 40 years, I've always got to be the best at that thing," says Nielsen. "I've made a fortune because I know the land so well. I'll do research and spend the money [on the research] until I have that comfortable feeling about something."

And there's Nielsen's other tip for would-be property investors: do your research. His company even develops software to help with the process. Nielsen got so involved in research for his properties that he started Landcor, which compiles the most comprehensive statistics on every property bought and sold in B.C., for use by banks and financial institutions. Landcor developed software that allows faraway buyers to view property with a 360-degree perspective without having to be there.

As well, the company's quarterly report is always a news event. In Landcor's recent third quarter report, he concluded that the Harmonized Sales Tax (introduced July 1 in B.C. and Ontario) had confused buyers into thinking they had to purchase before July 1 in order to save 12 per cent. However, the HST only applied to new homes, sales commissions and legal fees. That rush to buy, says Nielsen, pushed the market into a springtime false market that has since dropped by more than a third.

Another factor mentioned in the report was that the global economic downturn moved Bank of Canada governor Mark Carney to advise Canadians to reduce spending and taking on debt. That bit of advice resonated with consumers who became reluctant to spend money by the third quarter.

Nielsen learned the market the hard way: He lost his shirt in the recession of the '80s, and then had to rebuild. The lesson he learned is not to take on debt when the economy starts to turn.

"There's too much doubt everywhere," he says. "Everybody is hunkering down.

"People are starting to save before putting a big mortgage on a house," says Nielsen, who is following that same advice. "I'm sitting back right now, because like my business partner says to me, 'When Nielsen starts buying, you know that you've reached the bottom of the market.' I've called it for 30 years."

In 1989, Nielsen forecasted three to four bleak years, so he began purchasing property. He purchased 350 properties over the following two years.

"It's one of those situations where your gut tells you," he explains. "When I see something, I'll go against everybody — my wife, my kids, everybody. When I think I'm right, I'll listen to advice, but the decision is mine.

"The entrepreneur is a lonely world," he adds. "You're all by yourself in this world."

To view the related gallery “How to time the real estate market” click here.