Andrew Canter learned quickly to change and adapt with the times, and to try to stand out from the crowd.
“We’ve kept the company small enough that we can change quickly,” said Canter, founder of Canter Companies. “We can put money in different areas of California. We can look at different investments. We really change our focus very quickly depending on how the markets react.”
Canter also keeps a younger staff that he says is able to change quickly with the company.
“A lot of people that are in our industry are a lot older or have been doing this for 30 years. They look at it as, this is what I’ve done for 30 years and it works, and that’s what they stick to,” Canter said. “Every approach we’ve taken still today is to see what everyone else is doing and try to do something different.”
Canter, who grew up in Fresno, graduated from San Diego State University with degrees in real estate and finance. When he decided he didn’t love securities trading, he followed his passion for real estate.
He went to Europe, where he met people who were investing in the Las Vegas high-rise boom. He consulted with them — his first real step into real estate — but left as the economy turned.
“I got out of there at the perfect timing,” Canter said. “I came back to San Diego, and I thought I’d try a way to take advantage of what we thought was coming in the markets on the distressed side. We positioned ourselves to really kind of start when the whole market was collapsing, whereas most other companies were very heavily invested — so we essentially didn’t have anything to lose. When everyone was digging themselves out of a hole, we were just getting going.”
Canter Companies has been expanding and continues to change as the market evolves. The company started by buying distressed properties for clients and completing the construction or remodeling.
“We helped clients do that just because we didn’t have the money to risk essentially,” Canter said.
As time passed, the company began buying its own properties and selling them. Canter Companies began flipping homes in San Diego and replicated the model with partners in the Riverside area, and then expanded to San Bernardino, Northern California and parts of the Central Valley.
“There’s been a lot of competition. When we started this, there were a small handful of people who even had a clue what we were doing. And people thought we were nuts that we were buying properties with cashier’s checks on the steps outside the courthouse. Obviously, that secret has gotten out,” Canter said. “I think we’ve definitely changed our model many times over the years, but there’s still a lot of opportunity.”
The company has switched to buying more traditional real estate than distressed properties. In the first couple years of starting the business, Canter primarily bought only foreclosures, then started to purchase short sales and REOs, and then properties that needed work.
“It’s gotten back to, you buy something that’s old and it needs a lot of work and you fix it up and you sell it — that’s kind of where the market’s been going,” Canter said.
The company spends on average $30,000 to $50,000 on rehabs.
“Now we see a shortage of supply, so we’ve started to build. We’re doing construction now and trying to really focus on certain little niche areas where we feel there’s going to be demand for a long time — kind of urban infill like in Little Italy.”
The company is working on short-term construction that takes about a year and a half to complete. Canter said the company started developing “earlier than most,” and as other companies start to get into that business and build in the next year or so, Canter Companies will probably move on to something different.
“We’ve seen the market change so much over the years that we’ve been doing this, Canter said. “I’m not confident yet to bet three to five years out with longer term development. We’ll continue to build, I’m sure we’ll continue this flipping model of sorts, more on a value-add standpoint, and continue our different businesses that support it.”
As the company raises more money and starts more funds, Canter said it has been able to expand its buying power and bring aspects of the process in-house, such as a brokerage and real estate agents.
“Now we have a multitude of different divisions and we support them with our buying power, and kind of give them business and act as that catalyst to get the business off the ground,” Canter said.
Canter said he learned from the companies that are fully invested in real estate and has thus diversified the company’s portfolio and split up its investments.
“If real estate does take a turndown, we’re still safe, we’re still spread out, we’re still kind of protected,” Canter said.
Canter hopes to grow the different divisions of the company and is looking to replicate the entire infrastructure of Canter Companies in the Bay Area.