PV, Mit & Jeff
Steel tariffs are running at 50%. Lumber duties have climbed to 45%. Trump just threatened 100% tariffs on all Canadian imports. Construction costs are rising, developers are pulling back, and housing starts are projected to decline through 2028. For most people in real estate, this is a crisis. For our investors, it's a tailwind. Here's why →
We've been investing with Foundation Capital for the past 7 years, and it's been one of the best decisions we've made for our family. Unlike the stock market, where volatility can feel unpredictable and out of your control, this approach to real estate investing feels tangible, strategic, and backed by real assets. Over the past seven years, they've delivered the consistency in returns they promised. That reliability has protected our hard-earned money and is exactly why we continue to invest more.
Tariffs on steel and lumber have pushed construction costs up significantly. Developers can't make the numbers work on new projects. Housing starts are forecast to decline 5% this year, marking the fifth straight year of falling starts. In the GTA, condo starts have collapsed more than 50% from recent peaks. CMHC expects this decline to continue through 2028. Fewer projects getting built means fewer rental units coming to market.
If you already own well-located apartment buildings, this is exactly the environment you want. Less new supply means less competition for tenants. Our vacancy rate sits under 2% across the portfolio, and the trade war is only making it harder for anyone else to build what we already own.
And we're not sitting still. Our buildings are going up in value, even in this market. Every time a unit turns over, we renovate it and bring the rent to market rates. That increases net operating income, and in apartment buildings, NOI drives the property value. We don't need the market to go up. We create equity ourselves through operational improvements. That's the value-add strategy, and it works whether tariffs go up, down, or sideways.
FCPRET pays 7% annualized distributions, deposited monthly. On $250K, that's $17,500 a year in cash flow. Add the targeted 8% appreciation from our value-add improvements and you're looking at $37,500 in total return on $250K in year one.
Cash-Flowing Apartment Buildings · Southwestern Ontario
Targeted Total Return: 12 to 15%
Distributions: 7% Annualized, Paid Monthly
"We've been investing with Foundation Capital for the past 7 years, and it's been one of the best decisions we've made for our family. Unlike the stock market, where volatility can feel unpredictable and out of your control, this approach to real estate investing feels tangible, strategic, and backed by real assets. Over the past seven years, they've delivered the consistency in returns they promised. That reliability has protected our hard-earned money and is exactly why we continue to invest more."
Tariffs hit condo developers the hardest. When steel and lumber costs go up, they have to pass those costs on to the end buyer. That means higher purchase prices for units that already weren't selling. Investors and end users can't absorb it, so projects get shelved. GTA condo starts have already collapsed more than 50% from recent peaks.
Purpose-built rentals are a completely different model. There is a significant shortage of core rental housing in Ontario, and that shortage is only getting worse as tariffs push more developers to the sidelines. When we build Wellington Tower, the building gets valued based on its Net Operating Income, not what individual buyers are willing to pay per unit. We tenant the building, stabilize the income, and sell it to FCPRET or another institutional buyer at a price based on that NOI. That exit price is predictable because rental demand isn't going anywhere. Wellington Tower is an $80 million purpose-built rental project designed to qualify for CMHC financing and government grants. We're raising the capital now through our Development Fund, and we'll be delivering into a market where almost nobody else is building.
The Development Fund targets 24% to 27% annualized returns over a 4-year horizon. We started with 50 investor spots. 15 are already committed. 35 remain.
Purpose-Built Rentals · Build-to-Core, 4-Year Horizon
CMHC Financing + Government Grants (De-Risked)
Targeted Returns: 24% to 27% Annualized
Six House Republicans voted with Democrats this week to terminate Trump's tariffs on Canada. The measure passed 219 to 211 but faces a presidential veto. Meanwhile, Trump's 100% tariff threat looms if Canada proceeds with its China trade deal. We're watching closely. The longer tariffs persist, the more they constrain new supply, and the stronger the fundamentals get for existing rental portfolios like ours.
The trade war creates uncertainty for almost everyone in Canadian real estate. Builders face higher costs. Buyers face tighter supply. But if you already own cash-flowing apartment buildings in a market where people need to live, every tariff headline is another reason your portfolio becomes harder to replicate.
To your success,
PV, Mit & Jeff
P.S. The 2% bonus units deadline is TODAY. On a $250K investment, that's $5,000 in extra equity. After today, this offer is gone. Just reply to this email and say "interested" and we'll set everything up for you.
By the Numbers
