.png)
Batten House Podcast
Batten House Podcast
Batten House Podcast
Ep 11 Building Micro Suites for Modern Living
Van and Maria Sheppard share how they built a successful real estate development business focused on micro suites for one and two-person households, now managing over 50 units across multiple properties.
• Started their development business in 2012 after Maria immigrated from Russia to Canada
• Discovered their niche when realizing 50% of their student housing tenants weren't students
• Identified that one and two-person households increased from 33% to over 60% of Canadian households between 1961-2011
• Focus on infill development, converting outdated properties on main streets into micro suites
• Operate with clear division of responsibilities - Van handles structural elements ("from the paint back") while Maria manages aesthetics ("from the paint out")
• Build properties to hold and operate long-term rather than sell
• Currently have 50 units in development across seven different projects
• Balance work responsibilities with family life, raising four boys while growing their business
• Find greatest satisfaction when tenants express delight at their finished spaces
Connect with Sheppard Development at https://shepparddevelopment.ca/ or sheppard_development on Instagram.
This is the Batten House Podcast, the place where local businesses and neighbours come together. Here's your host, Sean Batten.
Speaker 2:Well, hello everyone in the world of podcasting. I have Van and Maria Shepard here, Very excited to meet, to talk to these folks who have an awesome business to share with us. I know them a little bit personally. They have awesome kids, awesome family and a great business. So for our readers, Ivan, welcome to the show, maria.
Speaker 3:Tell us about your business guys. All right, so our business is real estate development. We develop real estate and we're an acquire, develop, hold and operate family business essentially, and we've we've been doing this since, since 2012. And we got into development. It's a second career for both Maria and for myself. So just to say that, because if you say 2012 and while Maria looks young enough that it would be her first career, but for me 2012 going wow, you didn't start working until you're in your 40s okay, but that, but no, we, uh we started this in 2012 and uh, the that was an early.
Speaker 3:A lot of changes happened for us in 2012. Maria and I got married in uh, when we got married, maria was in Russia, I was in Canada Wow. So she wasn't able to come to Canada until 2011. And when she got here, we were a big family right out of the gate. We have four boys, as you know, sean. They're pretty far along in the grown-up stage now, but in 2012, maria was a stay-at-home mom for four boys and she also realized when she arrived in Canada that getting certified as a doctor in Canada because she was a doctor in Russia was not going to happen, and that could be an entire podcast all on its own, a different show on its own, absolutely.
Speaker 3:Absolutely. But we came to the conclusion that we weren't going to be able to get through that, and I was also a family of six four boys on a single income so we knew we needed to supplement that. We didn't initially think of real estate development, but we started Googling how do you get rich?
Speaker 4:How do you get rich Really, how do you get rich? How do you get rich?
Speaker 3:Really that's. I mean there were other other searches as well, but uh, they, they most of the searches about supplementary income or how do you grow your wealth or how do you get rich. Uh, kept coming back to real estate.
Speaker 2:Absolutely.
Speaker 3:And and so. But it wasn't real estate development, it was just real estate investing.
Speaker 2:Just investing Okay.
Speaker 3:Yeah, and it was my engineering background and the desire to build things that led us down the path to development, and Maria's desire to create beautiful spaces that led us down to development.
Speaker 2:Oh wow. So it sounds like you both have a kind of a niche in your business, that you we have a very well-defined line where and it calls it the drywall.
Speaker 3:It's called drywall, that's right, actually I call it the paint. From the paint. Out is all maria, so she makes things beautiful. From the paint back is all van, it's uh, uh, framing mechanical, electrical systems, all the, all the kinds of things that an engineer would be excited about. And then maria makes, lays out the space and makes it beautiful and attractive for our tenants. And, and also she's a mom of four boys, so she has a great eye for making sure things look nice. But they're nice and robust and they're and they're going to last.
Speaker 2:Yeah, absolutely, especially because your four boys are very active, very active, young, young people uh, which is again actually a whole other show which we should definitely do sometime, and so, no, that's great. So since 2012,. So now that you've been in business, what 14, 15 years now with your experience? What misconceptions do you hear most about your industry?
Speaker 3:Well, we could talk about those and we will, but I wanted to talk a little first about what we do now, because we started developing in 2012.
Speaker 1:Well, we've evolved?
Speaker 3:Yeah, we have. I want to talk about where we are today, because where we are today is so different from where we started. Really, I guess it's not unique to us, it's a common thread, right, I want to get involved in this area. You start not unique to us, it's a common thread, right, I want to get involved in this area. And you start not knowing very much, and and as your knowledge grows and you do projects and you learn things and you, you kind of you, you, you, you dive in you find your niche?
Speaker 3:Yeah and uh. And right now, our niche is that we focus on one and two person households. So we are focused on creating living space for uh, for families of one or two. And you think of a family of one? It's not really a family, but from 1960 to 2011, the number of one and two person households in Canada has doubled Wow. So in the 1961 census, roughly one third of households were one person or two people, and in the 2011 census, over 60% of the households in Canada were one and two-person households.
Speaker 2:I never would have thought that. That was like a gotcha moment for us too, once we realized that, and so you adjusted, and so we're talking like tiny homes, smaller apartments. What do we? Let's fuss it out a little bit. Yeah, small apartments.
Speaker 3:We call them micro suites, micro suites, micro suites, so so that that led us to where we are today, that that, that that one that kind of crystallized us we were, we were working our way there anyway because we had started doing student housing Okay, and student housing is primarily single-person accommodations. But when we realized how large the market was and our first new development student housing, we filled it about 50% with non-students.
Speaker 4:Yeah, it's just called student. But in reality, when our insurance asked for the breakdown and we counted every single person, we found there was 50-50. A lot of people were not actually students.
Speaker 2:Wow. And so all of a sudden the light bulb goes off and says, hey, there might be something, it might be a need in the market. Well, there clearly is a need in the market. Let's develop that a little bit.
Speaker 3:Correct. Wow, that's really something. Yep, so that that was a. That was a gotcha moment when we looked at our profile tenant profile, yeah, and, and then we started to do more research and this is it's a stats. Can uh uh report that I found that described the uh, the change in uh in composition of households in canada over the last 50 years and they do it every 10 years, but they missed the last one because of pandemic, I believe yeah, we didn't have 2021.
Speaker 2:but businesses uh is going forward, so you don't need the census anymore.
Speaker 3:Well, the trend is, uh, slowing down, which I mean. It showed that, but it hasn't reversed for sure. Wow, and anecdotally, look at the number of people that are moving out and living on their own but not buying a house. So they're looking for a common end. I mean a single person family in today's market is going to be. You have to have a heck of an income as a one person, absolutely.
Speaker 2:Absolutely. So you guys purchase a space like a small building or like maybe a big house and then basically develop it into Right, that's an excellent leading Sean.
Speaker 3:It's almost like you're following our syllabus and you're prompting us for questions. That was perfect. So what we do is infill development. So you're correct. We find a well-located and well-zoned zoning is a municipal thing that tells you what you can do on the land a well-located and well-zoned house, the land, a well-located and well-zoned house and we acquire it and then we redevelop it, and redevelop usually means remove and put something new there. So most of there's very few homes on a lot today that maximize the development potential of the lot. Right, that's not the vision that the person had or the zoning has changed since the house went up. Like, we buy a lot of 1950s and 60s bungalows, yeah, but they're. They're bungalows on main streets like baseline road or moody drive or walkley road right and, and these streets are no longer really appropriate for bungalows.
Speaker 2:if no one would put a bungalow there today, absolutely, and actually it's funny you say that because my wife and I were driving down one of these spots and you're thinking like, wow, beautiful space to live back in the day when Baseline Road wasn't as busy as it is. But now it's very busy, it's really developed. So then you're able to go in and develop a beautiful home there which went dwelling for like four apartments, I guess, or something like that, depending on the space.
Speaker 3:Right.
Speaker 2:Yeah, we're 24 is a nice number for us 24. No, well, that's, that's great. So correct me if I'm wrong. Then over the last several years, the city has made this process, I think, a little easier than than prior, just because their focus is on on redeveloping right and the tiny home movement, the more properties that are available for people to afford, and live.
Speaker 4:Yeah, let's say that they want to think that they make it a little bit easier, but in reality we still have a lot of bumps on the road, with city in particular as well, and with neighbors and with community associations and many facets With everybody else who is around us.
Speaker 2:Yeah, sounds like another show.
Speaker 3:You could absolutely have a show on that, actually on every one of those topics. Absolutely, I would say that the city recognizes the need for more, more density and more development and they they released a new official plan in 2020. I think it got approved in 2023, okay, uh, and they're working on a new zoning bylaw now that reflects that official plan and, for sure, in the official plan and the zoning bylaw they have created more opportunity for those infill developments along the major streets particularly, but even in what they've called evolving neighborhoods they've allowed for more density. So they have given the opportunity. But to make it easier would be more of a process question with the city and the nature of government it's like entropy, right, but to make it easier would be more of a process question with the city.
Speaker 4:They're not there yet. The nature of government it's like entropy right.
Speaker 3:They try to be helpful but they add steps along the way and it's a tough conversation to have because it just takes one bad actor right. Most of our legislation comes about because somebody did something bad once or twice.
Speaker 2:Absolutely.
Speaker 3:And then the government steps in and says, well, we have to have to fix that. Well, they don't fix it for the one or two bad people, they fix it I put quotation marks around that every other developer in the city. So. So I would say that their, their intentions, with their, their uh, new official plan and their zoning bylaw is to allow more uh there, but it's not easier. Uh, I would say it gets. It's not easy. Let's just leave that. Leave it there for the today's conversation. Uh, but it's possible right, yeah, yeah, wow.
Speaker 2:So so in a typical year, how many like properties would you have? You're working on that before you finish another job. Like I, I just approximately, like I'm just, I'm just fascinated, nope.
Speaker 3:Nope, uh, happy to talk about that one. Actually, that's a boat, but we uh that we were going to bring up as well. So I'm telling you, you're reading our first script. It's great.
Speaker 2:Well, we have. We have a lot of entrepreneurs and young people that tune into that, that are listening to the show, um, and so it's just great, um, to get into your industry, because we haven't talked to anybody in your industry and so for young people that want to develop, it's a great opportunity to listen to you guys. So, sorry, digress, but I digress, but go on.
Speaker 3:So we have two active construction sites right now, we have a permit for a third and we have four other properties that are in some stage of development, with the plan that we're never out of construction, there's always a construction either wrapping up or starting up.
Speaker 2:Well, because I guess the process would be long, eh Like when you're purchasing, like from start hey, we scouted a spot, we found a spot that we like, like the location, which is you mentioned earlier Location what's the neighborhood? What's the parameters? The city is placed on those neighborhoods right Like the busy street's the parameters the city is placed on those neighborhoods right like the busy street or the or the other properties, right. And then I mean it sounds like a long process anyway, so you really got to keep keeping them down the pipeline, right correct?
Speaker 3:yeah, if you're. If you're working on one today and you don't have one already fairly far along, there's going to be a period where you're not doing any actual active construction, so you need to have. So we started construction on a project last month and that project was supposed to start in the fall, but between time taken to get our permit was longer than planned and time taken to get our financing was longer than planned, and so now we're starting in February instead of starting in October.
Speaker 2:And that's just the reality of the business, right, because there are other factors, right?
Speaker 3:Yeah. So we didn't know how real that was because we thought, oh, darn it, another one of our projects has taken longer and every one of them has. Maybe we had one or two that went right according to plan and they were early in our early in our development uh experience. So we thought, oh, this is great. And then we started to hit snags and hits that and what happens is, uh, the more you try to intensify, the the more hurdles you have to to jump through to to get permission to go.
Speaker 3:Uh, marie and I did a program at carlton university it's a certificate in real estate development program and we did it in the fall of 2023. And that put us in a room with 16 or 17 other people with similar aspirations to ours and a number of instructors, and all the instructors came from industry. It was really great and every one of the instructors had multiple, multiple horror stories about projects that were supposed to take two years and took seven, and supposed to take three years and took nine. And it was an eye opener for us because, and then our peers, who some of them were also doing similar things to us and had the same kind of stories about things taking longer, and that's probably one of the misconceptions or one of the things that people aren't aware about about our industry.
Speaker 3:It's tough to stay on schedule, and when you're not on schedule, your project's cost you more than you planned right there. Absolutely, I guess the way I would describe it is time is of the essence. For you, the developer, uh, time is not of the essence necessarily on the regulatory side, and uh, and even on the lender side, they're uh, they have processes, they go through them and uh, and they're done at four and they go home, or five, or whenever they go home, and uh, and if you're didn't make it to the top of their pile that day, well, you'll maybe get there tomorrow.
Speaker 2:So it's uh, it's a lot of yeah, it's a lot of a lot of balls to juggle there are.
Speaker 3:So you do have, so we have like we have 50 units in development now. We have 70 apartments, 50 sro units we call them these are single room occupancies or micro and we have 70 apartments in development and that's spread across, I think, seven different projects that are somewhere between started and finished.
Speaker 2:Wow. So before we get into the next question so do you sell these places after or do you keep and you rent them out or have a property Like? What's the end game, the end goal for each property? Like it's? I'm fascinated Our end or have a property.
Speaker 3:What's the end game, the end goal for each property? I'm fascinated. Our end goal is to keep and operate them. We build, so that's one of the things. You do do it differently if you're building to sell versus building to keep. So all of our decisions in the design phase and the construction phase are geared towards we want this to be, uh, as cost effective to operate as possible. We don't want to be coming back because of problems. We don't want to be coming back because of wear and tear. So all of our, all of my decisions about what goes on behind the walls is geared towards minimizing my operating costs and minimizing the maintenance costs, and not all of maria's decisions, but it's never far from her mind that this has to last a long time and be robust.
Speaker 2:Yeah, she makes it beautiful too.
Speaker 3:She does a great job of making it beautiful, but there there's also that.
Speaker 2:There's the balance of making it practical and and and you need to. You need to fill these places. But also you find you want to find the right tenant right. You want to find the right tenant right. You want to find the right people to own them, and that's a whole other business, essentially Again, a whole other conversation. I knew there were going to be many facets of this and just knowing you, van, I knew there was going to be many facets. I love it. So I mean there's so much to talk about. I definitely want to have you guys back again to talk about more things get deeper in the weeds. But I definitely want to have you guys back again to talk about more things get deeper in the weeds. But as a family, as a couple, what do you guys do for fun when you're not, you know, I mean this can obviously be a 24-hour-a-day thing, but with the balance, trying to balance as an entrepreneur, especially as a family, what do you guys do for fun?
Speaker 3:Well, you probably have some inkling about what's coming now.
Speaker 4:We sail, Well, we it's a big thing to say, right.
Speaker 3:Those of us who don't have bad motion sickness in the family sail, which would be me and my four sons.
Speaker 4:All of them.
Speaker 3:And we love sailing. We race at the sailing club. Boys have done junior sailing there and come through the. Some of them have come through the race program. But our lives in the summer revolve around racing a couple of times a week and going sailing when we can, going away to regattas. For Maria, I'll let her speak for herself, but we have a beautiful back garden and that's all to her credit.
Speaker 4:Well, I do love gardening, but I actually very much love that sailing uh adventure because every time we, every month, in the summer and often in the winter, we're going somewhere warm, to the lake, sea or ocean where guys can sail, and I am going sightseeing. Oh that's nice, that's awesome.
Speaker 2:That's great. So you go with the family and so you're able to be together and then just kind of sightseeing, because, yeah, I mean knowing Van, like your boat is always gone in the summer, they're always gone somewhere. But I didn't know, maria, that you travel with them, and that's awesome because you do go to some really nice, warm places, van, which has been such a great experience for the kids too. Eh, like such different waters, they love it. Yeah, there's so many different things and I mean, van, you're no slouch on the course, that's for sure. But again, another conversation.
Speaker 3:It is indeed, and we I mean we, we we go to do our best every time we go, but we go to meet new people, sail in new venues, see other parts of the world right. There's so many, so many more aspects to it than just did you do well in the regatta or didn't you do well in the regatta? Like you, we have fun every time we go.
Speaker 2:Yeah, and so enriching for the kids to be a part of that and the family to be a part of that. I mean, I keep saying kids, but your kids are getting older now anyway, they're teenagers and young adults.
Speaker 3:Oh.
Speaker 2:I'm looking up at two of them and it's soon going to be three of them.
Speaker 2:Yeah, yes, for our viewers they're very tall. Our listeners, actually, they can't see anything. Listeners, actually, they can't. They can't see anything. Um. So so you you mentioned that you guys um got together in 2010, started business together in 2012. Here we are later, a couple years down the line, uh, doing very well together, but we all have hardships and things that we go through. Um, can you name, can you bring up something that that really helped form your approach to business, like what hardship that you went through maybe as a couple and kind of steered you into this direction?
Speaker 3:So I mean, as we look back on it now, I guess we could describe it as a hardship. At the time you're in the moment it wasn't really, but you know the first. So Maria arrived, really, but you know the first. So Maria arrived, we had Adam, our youngest, who's he'll be 13 in next month. Actually, wow.
Speaker 3:And so that that first couple of years where we were, we were doing, we were getting by on my salary, which was I had a good salary where I was a systems engineer and a program manager and a defense contractors, but there was a we had a big family to support on one on one salary and it was. It was that looking forward to like our expenses are not going to diminish. We have really young boys now but as they get older and my God, our grocery bill now is just brutal. We would never have anticipated our grocery bill now when they were younger, but Kevin's very that now, basically we got.
Speaker 3:We came here because we foresaw that if we were going to get by on just one salary with the size of the family we had, that was going to be really difficult for us. Like every one of our projects, we have to overcome challenges Some we were aware of when we go in like a particular challenge with the property or the development and others that just crop up along the way, right, and it's not like there's one particular hardship. Every single project has bumps in the road or things that you have to overcome. I would say one of the things that we've learned and we both are very determined people you have to be adaptable.
Speaker 2:You would need to be very determined people to do what you're doing and to be in business this long, right, I mean really. I mean, especially with all the things, all the aspects that you can't control, and being married together, doing it together, right, like that's a huge blessing to be able to be together as a family unit and roll with the punches and all the different things that come up and you know, have supper that night and you know, press on the next morning. So I honor you both for doing that. That's awesome.
Speaker 2:You don't hear very much of a couple in um business especially that are very much a partnership um, that work together, um and have a have a great family. You know Um, and for those of you don't know, I I know, like I said, they know their kids and they're just polite, great young men and that doesn't happen by accident. So I honor you for that. As a family man of five, I honor you for that. I really do. And especially having a great business as well. So much, we're definitely going to have you back on the show because there's so much I want to still talk to you about, but we're almost out of time.
Speaker 3:So what's one thing you wish our viewers or our listeners knew about your business? So one thing that I don't think people make a very big deal of, because it's not something that people are aware of. But when you have your building ready to go and your tenants come in and they see the space that they're renting for the first time, and we've had wows, we've had eyebrows raised, we've had oh, I didn't know it was going to look this good.
Speaker 4:Or is it better than what I had at home? Yeah, we've had that too.
Speaker 3:The sense of accomplishment that you feel when the project is wrapped and your tenants are moving in and they're really happy with the space. That goes a long way towards putting some dressing on the wounds and scars you have to take to get there.
Speaker 2:That's a great way to put it.
Speaker 4:I always say happy tenant, happy landlord.
Speaker 2:That's right.
Speaker 4:Actually we never encountered problems with tenants, those big horror stories about not paying the rent.
Speaker 3:That's me knocking wood that we can't see off screen, by the way.
Speaker 2:No, that's great.
Speaker 4:Everywhere. Now we do deal with tenants all the time. We have 50 of them now and we, during all this more than 10 years, we had always able to solve the problem and, yeah, respect them well, good for you, because, because, again it's it goes the other way too.
Speaker 2:It's hard, harder, to find good landlords who really care about their space. And, uh, and offering, because you guys clearly are offering, um, you know a great space to live that is, that is is clean and it's safe, um, you take a lot of pride in it and, uh, that's good for both, uh, both parties, that's a great way to do business. So that's fantastic, guys. So so how do listeners learn more? How do they find you guys?
Speaker 3:So we have a website, shepherddevelopmentca, we have an Instagram, which is a shepherd underscore development, and we have a Facebook page, which I think you can also find by searching on a shepherd development.
Speaker 4:Okay, perfect, that is double P yeah that's right.
Speaker 3:Shepherd is spelled S H E P P A R D. Thank you, darling.
Speaker 2:Perfect, yeah, that's good, no, that's great. Well, listen guys, I know you're busy and I know with all the things you're doing, it's just so much and I appreciate your time getting to know more about your business about both of you a little bit more Viewers and listeners. Reach out If you have anybody that's looking for places to live for the micro. What do we call it Micro?
Speaker 4:suites.
Speaker 2:Micro suites. Definitely reach out and catch us on another show because we want to get deeper into the weeds with these guys. But until next time, thanks, Van and Maria, and we'll talk again, okay.
Speaker 3:Thank you, sean, our pleasure, sean, thanks for having us.
Speaker 1:Thanks for listening to the Battenhouse Podcast To nominate a favorite local business to be featured on the.
