Henry Fong and Enoch Cheung operate Digital Embrace, a client-driven brand that thrives on providing digital solutions, honesty and hard work. The firm specializes in two things; Building customer-centric solutions on Microsoft Dynamics CRM 365, and providing specialized IT staff augmentation services. Henry and Enoch stand behind putting their customers first in every aspect. Their vision is to make a positive impact on everyone they meet, with a mission to be the best IT partner for government.
Their aim is simple — make technology work for you.
TCS: Good afternoon Henry and Enoch. First off, can you talk about the beginning of your relationship with Simon and The Condo Store, and how or when you started reviewing offers and speaking to Simon about investment strategy?
Henry & Enoch: We met Simon in January 2007 as a referral through a friend. It was during a winter storm. I (HF) was supposed to go down with two other friends, but because of the storm, they both opted out and ended up missing a great opportunity. I went to see Simon with my wife instead, the roads were empty, and snow [was] coming down heavily. We had purchased another investment property on our own about three years prior, but returns were not great. Simon showed us 55 East Liberty (Bliss Condos), and we decided to purchase one unit at 20% down. But Simon was able to provide us two units at 10% down instead, so our initial down payment was the same, and we walked out with two units. When it was time to close in 2011, we assigned one and took the proceeds to pay for the down payment of the second unit.
After that experience, I introduced Simon to Enoch in 2009, and we bought four units together. Since we are equal business partners, we started buying “twin” units, two models of each. This way, Enoch gets a unit, and I get one, and there is no negotiating who gets the better/bigger unit. It has been very easy to continue purchasing “twins,” since Simon has a good variety of inventory at each project. Simon also helps us decide by recommending his top three selections given our variables, and then we narrow it down from there. This way, we are not reviewing 20 different models each time.
TCS: As you mentioned, we are featuring both of you together as you do your investments with TCS as a team. Could you elaborate on that set-up some more?
Henry & Enoch: Fifteen years ago, we knew we had to include real estate in our business and personal investment portfolios. Because we run our own business, we just are not able to keep up with all the details and where the market is heading. However, TCS has been great at explaining real estate investments to us in common language and has been patiently coaching us throughout the years. About two or three times a year, they reach out to us with an opportunity, and we get to have a nice informative discussion. Then, with no pressure, and assuming the timing is right for us, we either move forward with it, or we wait for the next one. We do a bit of our own research, but primarily through TCS’s professional guidance, and we have been doing quite well over the years.
TCS: 2020 was a trying year for everyone. How have you and your families been managing through all the quarantines and social distancing?
Henry & Enoch: In March 2020, our physical office closed, and we moved online. We both decided that we would continue to serve our clients without missing a beat, and come back stronger and better as a business. Our team at work has been incredible. We have not missed a single morning scrum since the beginning of the pandemic, and we talk even more now (online) than before. It’s still not the same of course, so we all look forward to the day where we can scrum together in real life.
Henry: Family life took some adjusting; no more hockey, no more family vacations and no more weekend dinners. But we have found some new family hobbies like ‘Settlers of Catan night,’ lots of ice cream making, and yes, lots of family walks around the neighbourhood. I think our dog loves it the most…always someone at home to play with!
Enoch:It is a part of normal life now and we’re just happy extended family and friends are all safe and healthy. What we’ve missed most is the simple things like watching a movie, going out for dinner, having birthday parties and shaking hands.
TCS: You both are managing partners at Digital Embrace, an IT solutions partner firm, primarily serving the government sector. Can you tell us how the company came about and what makes you different?
Henry & Enoch: We are both techno-geeks from the University of Waterloo. We love building things and helping others use technology. “Playing business” was just something that naturally occurred, and we realized we could make more of an impact, more of a difference, if we worked together. So, in May 1999, Digital Embrace was born. Our vision back then, which is true today, is that in all we do, we want to make a positive difference to everyone we meet.
Henry: With our previous experiences in government, we decided that we wanted to serve this industry. If we can help those that serve our fellow citizens do their job better, then our impacts are multiplied and ultimately this will help our fellow neighbours. As simple as this may sound, we remind our team every Monday of our mission to be the best IT partner for the government sector.
TCS: What about away from the office, what do you like to do when you’re not working?
Enoch: I love what I do, but apart from working, I love taking my family to new places around the world. When this pandemic is over, we are hoping to restart traveling again. When the warmer weather is here, you will find me at the golf course trying to master this crazy game.
Henry: I love doing what I do, so even my personal time is blended with some technology or business activity. But apart from Digital Embrace-related things, I love working out, reading and family time. I wish golf were high on my list, but life seldom permits disappearing for five hours, so golf is usually reserved for holidays and trips.
TCS: Can you tell us about some of your investment results that have come about from working with The Condo Store?
Henry & Enoch: The first units in Liberty Village in 2007 went up by about 33% between purchase and closing (three years), but by now, it’s tripled in price (approximately 13 years). However, if you consider the actual investment was $40K, that initial amount has gone up to $600K in those 13 years. It is also important to note that this investment was made prior to the crash in 2008, so it has persevered through the recession.
I also have a unit in CityPlace, purchased for $400 per square foot in 2010, which closed at the end of 2012. Today, it is worth about $1,fff per square foot. Two additional Liberty Village units were purchased after the 2008 crash, in 2009 at $435 per square foot. We closed in December 2012, and still hold these units today — the values have increased nicely.
Our most recent occupancies are at Garrison Point. The occupancy was delayed, and it took six years from purchase to occupancy (2014 to 2020). However, this delay worked in our favour since the [value of the] units [has] gone up by 80%. Again, considering the low down payments, the returns have been incredible.
Our goal is to try and space out our investments so that we close on units every two to three years. This gives us a chance to save up for down payments, closing costs, and arrange for proper financing. Spacing out our purchases is not only “forced savings,” it is a form of dollar-cost averaging, but just on a larger scale.
TCS: You have been a long-time client of The Condo Store, what can you tell us about working with Simon and the team over the years?
Henry: I would use the term “Trusted Advisor” to describe TCS. The word “trusted” is the key word here, because there are many people that have advised us on investing — some good and some bad. But to find someone that is patient, knowledgeable and client-focused, someone you can really trust, that is what’s unique about Simon. Of course, I try to do my part and research as much as I can when an opportunity is presented, as not to waste his time unnecessarily. Sometimes we just don’t have the money to invest, or the property is just not right, and Simon is fine with that. He respects our decision not to invest, we discuss the reasons why, and we wait for the next one. This mutual respect has governed our last 15 years…15 years of very successful investing.