**Transcripts are auto-generated.

 

Erwin  

Greetings, and welcome to another episode The truth about real estate investing show. And on this show, what I really enjoy about doing this podcast is learning about all the different ways all the different paths to one’s financial goals. I love reading books about entrepreneurship and investing for that reason. However, most the authors I’ll never get to speak to never get to meet. Hence, I’m grateful for my friendships with my mentors like Tommy krejza for real estate and Derek foster for stocks by having expert mentors that are great for distilling down all information that they’re reading. For example, Derrick foster being retired and with his passion for stocks has the time to read quarterly and annual reports of companies he wants to invest in, including Warren Buffett to get an understanding of what the greatest business leaders out there are seeing in the economy and the market and for opportunity, of course, and also, you know, when to cut losses, what’s even better is Derek’s time to share but he’s buying and selling with me. Because we’re friends, please pretend we’re friends like to think we’re friends, though Warren Buffett moves the market. Anytime there’s an announcement, we understand there’s information available on when he’s entered a company such as like occidental oil, you know, he really moves the market doesn’t move the market like that. But however, Derek is positive on the year in terms of his investment portfolio, year to date, while being 6% cash and compare that to the overall stock market, which is down close to around 20%. Year to date in 2022. Derek’s beating me as well. And My policy is to learn from winners with track history who have achieved what I want. In this case, I want financial freedom and you know, finished work little less. That’s the same reason why we asked Derek to speak at the wealth hack conference. As Charlie and I are merely architects we plan, design and oversee our own investments and for our clients. Derrick cover is an expert in the area of stocks. He as he is Canada’s youngest retiree for almost 20 years, and is our stock hacking expert. Our conference also features experts in insurance, crypto, currency blockchain, that’s one category, real estate, cash flow management, specific to accounting for real estate, how to access the maximum number of mortgages, real income properties, all the really important things that any sort of professional investor needs. Side Hustle investors as well. Anything a professional investor wants to know side hustlers shouldn’t likely want to know it as well. All this all in one day. I can’t recommend enough that you bring your team with you, your team as in like your investment partner, typically your spouse or your significant other. Any friends and family who’ve shown interest in investing, like include any adult children, anyone who’s interested in getting ahead and who’s open minded and wants to get ahead in life. If you know that children’s game broken telephone, you know, it’s best to receive information directly from the source such as our expert speakers. If you’ve been around for a while, then you know the importance of community as well. Because if you want to go far in the Endeavour, you need a community to do it with you. And it takes a you know the whole saying it takes a village to raise a child, it takes a village to raise a successful investors in my experience. For you 17 listeners, we have a special discount code, which is truth, it’s a five letter word for the best price available. Please do not delay as the price will only go up between now and to the event on Saturday, November 12. Toronto Congress Centre next to Pearson Airport at Saturday, all day roughly, you know expect to shop for nine expect to leave around 530 ish. Of course VIPs will stay a little bit later for the meet and greet with our keynote speaker. And this is live and personally there will be no option to do this virtually getting the discount code is truth five letter word. And also in the show notes I’ve included a link because in my experience, a lot of people have trouble finding where to input the discount code. So I’ve included the link that goes directly to the discounted tickets for you 17 listeners, it’s all in the show notes. So if you’re on my email list, you get the show notes. Also, if you just go to our website truth about real estate investing.ca You go to this episode, you’ll see the link there as well, including all the show notes for this episode, including how to reach out to our deaths. So onto this week’s show. Full disclosure, Tim Collins is one of our longest time clients. Hence he’s bought and held real estate investment properties for several years in order to get rich slowly. He’s also taking our stock hacker Academy courses. He switched careers a couple times from when I first met him somewhere around 2012 ish. He was a high paid tech executive working downtown Toronto living in Orangeville. So he can understand is a bit of a commute. He’s now pivoted, he’s switched careers a couple times. He’s now a real estate agent. He’s also moved his family from Orangeville, Ontario to now Nanaimo BC, which is on Vancouver Island. It’s it’s a short ferry away from Vancouver, the city of Vancouver for the for warmer weather and better view of the ocean. Yeah, better view

 

Erwin  

view from Orangeville Ontario. Tim is obviously open minded, he’s successful, he wants more in life more out of life. And now he’s financially free to do whatever he wants and he has the option to retire even. He’s He’s also a successful realtor. So he still likes doing that. So technically he’s not retired but he has the option to retire. Absolutely. Thanks to his now 10,000 Plus passive dividend income each month, more than $10,000 Each month of dividend income. I’m not an accountant. But dividend income is generally more tax optimised than actually it’s usually the most tax optimised source of income typically tends mental health is likely better than most investors these days as well. Tim has exited all his real estate. So interest rates mean pretty much nothing to him. For his own investment portfolio, from my experience working with investors every day, many of you want passive cash flow. Hence, I’m excited to bring you this episode to learn how Tim escaped the nine to five rat race. They call it those golden handcuffs via building wealth and real estate, then pivoting to stocks for greater yields, and passivity. We’re all on this journey of learning together, and what better way to learn than from folks who have what we want. quick announcement regarding stock hacker Academy, we’ve completely revamped the course to make it more comprehensive and added numerous modules to aid those who are new to the stock market. So this is more beginner friendly than ever. Plus, we’ve added several value adds that we will announce at the wealth hacker conference. As always, we believe in and practice continuous improvement. I am beyond excited to share with our community, the absolute best version of our beginner programme at the lowest possible price that anyone will ever see. It’s only available after we announce it at the wealth hacker conference. Just another bonus for those of you in attendance. So without further ado, I bring you two columns. Please enjoy the show. Hey, Tim, longtime no talk. What’s keeping you busy these days?

 

Tim  

Well, my kids are back in school, which is brilliant news. Everybody’s excited about that happening. But yeah, just you know, the usual looking after the family, helping people buy and sell houses, as you know, in the old real estate game, although things have slowed down a little bit. There’s still there’s always lots to do there. Yeah, reading, learning. living my life

 

Erwin  

can be easy. Okay. I know you don’t feel like you said a lot. But I feel there’s a lot to unpack there. Let’s start off with where you live. What city do you live in? You are Canadian, even though you don’t sound like the average Canadian.

 

Tim  

Yes. Yeah, that’s a longer story. But I grew up in grew up in England, currently living in Canada. I was born in Canada, only for the first year of my life, and then grew up in England and then came back in my early 20s. But yeah, now I live on Vancouver Island in a place called Nanaimo, which I ended up here through a real estate investor attending a real estate investing course years ago, at the time, I was living in the GTA, and I just thought, you know, lifestyle wise, for me at the time just seemed like a great move. And I’m still, I’m still loving it. Eight years later, or nine years later, however long that is.

 

Erwin  

And that was quite affordable. Isn’t not? It is yeah,

 

Tim  

it was. It was when I came. Yeah, I think by in terms of by national average standards, people often think of Vancouver as being the most expensive real estate in Canada, which is probably still true. A Vancouver Island, less business here and less sort of going on economy wise tends to be a little bit cheaper. I don’t know what our average house price is at the moment. 900,000 Maybe. But yeah, you can still get a nice, single family home, often with views of the ocean because much of the MIMO is on a hill kind of looking at the piece of Ocean between us and the mainland. So yeah, I still think there’s affordable options. And with the recent pullback in real estate prices, I think there’s there’s opportunities for people to to get involved once again. Yeah.

 

Erwin  

How far do you think you guys are off the peak?

 

Tim  

Maybe 15%? Yeah, yeah, I think pretty typical numbers. I would say, I don’t know if I’m sort of biassed, because I’m a realtor and I live here. But there does tend to be a constant influx of interest in Vancouver Island, because when people retire from the East Coast, or Alberta, for instance, and they want to escape, you know, the frigid winters a lot of people look at Vancouver and said, right, I want to I want to live there because the winters are obviously a bit more less harsh. And some of the nice and you know,

 

Erwin  

you’re being modest. I imagine that you some of the best for the Hawaii of Canada. Yeah, exactly. I think that’s probably the right analogy is you likely have the best weather in Canada.

 

Tim  

I think so. Yeah. I mean, some people think that it rains too much in the winter for them. But again, I grew up in England. So for me, this is pretty close. Pretty close to that where I’m currently living. I’m very fortunate in that I can walk probably about 300 metres, some of which is down some steps, but and then I’m on the beach and the beach is because there’s about 300 steps down to the beach. It’s absolutely deserted. But it’s you could be in a different country. It is absolutely stunning to go there and go for a swim every day in the summer. We go down there so

 

Erwin  

amazing. And then working folks reach out to you should they be interested in investing or moving to Nanaimo? Yeah,

 

Tim  

you can just I mean, on Facebook and Instagram, it’s just Tim JP Collins, or if you want to find out more, I just check. My email address is just Tim at Tim collins.ca.

 

Erwin  

Fantastic. And folks, I’ll have the Tim’s social media coordinates in the in the show notes. Some people are driving your email. It’s just a podcast for yourself. You know, people aren’t done a cup typically listening and taking notes. They’re usually this is the second thing that they’re doing well listening for 17 listeners. I mean,

 

Tim  

interestingly, part of the origin story for living here is that I used to work. I used to live in Orangeville. And I used to work at Yun and the 401. And I would drive that road every day down, you know, along Highway nine, I think it is down the 400 along the 401 an hour anyway, yeah, like an hour and a half each day, probably in the winter even more, and I sat there one day in the car and got the calculator on my phone. And I always justified it by like, Oh, I’m listening to audiobooks and podcasts. I’m learning so much. But I got the calculator on my phone. I was that right? Three hours a day, five days a week, 52 weeks a year. And it was a 20 year career or something that ended up being years of my life. So I just can’t do this anymore. That was a big part of the reason for the move. Now. You know, when I first came here, I was commuting about 10 minutes, and now I work from home. So

 

Erwin  

even better. So what was your day? Like? Then? What time did you leave the house? And did you see your kids in the morning?

 

Tim  

Yeah, I didn’t see my kids when they were young. So I would leave at probably six and I would get home at six or seven at night. So a good 12 hours away from home my company worked for at the time were completely against remote work. And my wife famously reminds me to this day, you know, there was days where it was snowing outside in Orangeville. If you if you know that area is snowbelt particularly

 

Erwin  

bad. Your ski hills in Orangeville. Yeah,

 

Tim  

I live in ski hill and then hopefully Valley, so I bought a Subaru with winter tires, which means you can go pretty much anywhere. But I would go to work when these days I wouldn’t. I wouldn’t go to the end of the road. And I would drive that journey in horrific blizzards in winter conditions and just the obligation to I have to be there because they really want me in the office. And then you get to the office and you sit around and drink coffee all day and talk about non relevant things. But yeah, that was just that was the life right? You just felt like you had to be there. And it’s all part of the journey, so to speak. But I can’t today, I will no way I would want to be in that situation again.

 

Erwin  

Right. And around that time was when he got really motivated around real estate investing. Am I wrong? All right.

 

Tim  

Yeah, that’s right. I mean, it’s all part of part of that story of like dissatisfaction with that commute. And I started having some issues with anxiety around that time, and just being mega stressed out with work and the travel. And, you know, ultimately, I’ve put myself in some in some handcuffs in terms of I had this house, my kids were in private school, I got a couple of cars, I needed that salary to sustain my life. And I started thinking, we’re going to talk about other ways, which I’ve achieved it now. But back then I was thinking right real estate, I’m going to buy a house or rent it out. And through that rental income. There’ll be a generate some some money to replace my salary. So yeah, that’s when I think I literally went on Google one day and typed in real estate investing and ended up finding Julie Broad, who’s a mutual friend of ours. She happens to be in Nanaimo. That’s why I moved in an IMO because I came out here and fell in love with it. But yeah, I got super motivated to take action and control my own destiny and just say, right, I’m gonna learn as much as I can about this. i That’s how I found you and your Meetup. Julie connected this. Yeah. Thank you, Julie. But yeah, she connected us. I started coming to your Saturday morning sessions in Oakville. And that’s kind of how that was, you know how it all got got rolling, you know?

 

Erwin  

And then you bought a couple houses, bought some houses. Yeah, that’s funny. He’s bought a couple of houses. So I remember

 

Tim  

the first time we went on, I think it was I remember in my head it was West Fourth Street near Mohawk College. We looked at this house and I think I paid 274 or 270,000. I said to and always said he was like, Would you do this? You know, like, yeah, it seems like a good opportunity is close to the college and we kind of talked about it and so that was the first one of many that I got involved in her.

 

Erwin  

I started justifies right there. I don’t know if you know, but actually tried to buy it from the person you sold it from afterwards. Oh, really? In hindsight, I regret not buying it from you. Because I was actually trying to end up trying to own that section. The four houses those four houses on at the corner. Yeah, but that’s funny. You asked me what I buy it. I wish I owned it now. Because I was trying to play Monopoly and control a quarter. Oh, yeah. Yeah. All right. Continue.

 

Tim  

Yeah, but I mean, it sounds very romanticised. In hindsight, by the time I got loads of stories about, you know, student Nightmares From Hell, where I’d go in and they wouldn’t have taken the garbage out for a couple of weeks and cockroaches and exterminators and people not paying rent and drugs and balls everywhere. And it was just Yeah, it’s a lot of work. And at the time, when I was knee deep in, you know, with rubber gloves on picking up other people’s garbage and pulling hair out of drains and all those terrible things. I just thought I gotta do this. I got to work hard. I’ve got to get it done. And so I would go around my Hamilton houses and be my own property manager for a while. And then at some point during the evolution, I realised I can’t keep buying houses and trying to find joint venture partners. and do all the property management and so started outsourcing elements of it to other people. But yeah, that was in terms of capital growth, buying real estate was was how I did that. There’s no secret to that. And I still probably remains the best way. Or one of the best ways to make money over time. It’s the kind of the get rich slow scheme, right. So another place they bought in Orangeville, in probably 2010, paid around 200,000 For that sold out for 650 reasonably, and that was like a semi detached house and went in and same thing like bread the carpets out ourselves painted the walls, but in flooring and did whatever we could to rent out and maintain it. And yeah, I mean, lots of people listening to your podcast know how this stuff works? Yeah, it’s been a sort of great journey of, of building those things up and then offloading them as well. You know,

 

Erwin  

for two really quick update on the student rental market. A lot of landlords got out during the pandemic. Yeah. So there’s like, no supply. Right. So bedrooms master for mediocre hosts. Yeah. are renting for 800 a room?

 

Tim  

Very nice Mohawk.

 

Erwin  

I don’t know the numbers, but they have this exact same issue. Yeah, there’s nothing to rent. And they already there’s nothing to rent, let alone student rentals. So rents have gone through the roof. Yeah, so the product rents are probably up around 30%.

 

Tim  

Yeah. Which makes sense. So those landlords probably have to suffer through two years of nothing. Oh, yeah. Yeah, to get

 

Erwin  

payback time. Yeah. So Yeah, crazy, crazy pendulum swings

 

Tim  

is funny how it changes. I mean, there’s, I’m sure there’s people who bought houses and 20 years ago, and they’re just sitting on them. And, you know, they don’t need it yet. But you know, one of the a lot of the bold moves I’ve made in my life have been as a result of conversations with my wife, she normally gets there before me mentally, where she’s like, just go for it, we’ll work it out. And, you know, part of that was, when we lived in Ontario, and I bought some of the student rentals houses, I started doing joint ventures with people where they would, you know, qualify for the mortgage, and I would take care of the investment. And all of a sudden, I decided we wanted to move to the West Coast, I said, we can’t move because I got at that point, 10 or 12, houses, some of them with other people, we can’t possibly leave all this stuff behind. And anyway, stuff my wife is like, well just sell them or tell the people you move in and see if they’re okay with you coming back, you know, once in a while to check on them and manage them remotely through a property manager. And so I say that because I find I speak to a lot of people about their lives. And they often say, Well, I can’t move because of X. And X might be a business that you’re running or family that you have, or whatever it is. And if those things are making you happy, then power to you stay where you are, but I didn’t let that hold me back. And some of the people said, Yeah, I don’t mind you having a property manager. And you know, dialling it in, so to speak. And some people decided they didn’t want to be in those investments anymore. So luckily, thank goodness that we were in a bull market housing wise, during that time and prices have gone up, we sold them they got they made a bit of money. Not as much as we would have expected if we held on to it. But yeah, that was what I wanted to do in my life. And so we just made the move and got on with it.

 

Erwin  

Can you share about your drag patrol experience? Positive or negative? Yeah, hated it.

 

Tim  

Yeah, I had some great, some great ones and some more challenging ones, I would say that, ultimately, it was beneficial to kind of get me where I am today. It’s another one of those things where it was, you know, I studied it a lot in terms of how do I meet people? How do I start conversations around real estate about investing in real estate, learning my market becoming an expert in the area? Yeah, I think like many things in business is just setting out very strong expectations at the start, this is my responsibilities. Those are your responsibilities. This is how we’re gonna we’re gonna work in one of my joint ventures who I did a few deals with was very disappointed when I said, what he said you can move no problem. And then eventually when I said I want to sell he said, Well, I wanted to keep it for even longer. I said, well, great, you know, you’re welcome to buy me out, but it’s time to move on. So again, clear plans in terms of exit, how do you move on, etc. I think it can be very beneficial, but it’s not something done lightly. You need to understand you need to know your contract inside out. You need to know your market. You need to know what you’re up to and what you do if things go wrong, because often they will so so for

 

Erwin  

someone who’s getting into joint ventures for example, do you have like maybe like three tips? Like you mentioned know your market? How would someone demonstrate they know their market or their strategy? For example?

 

Tim  

Yeah, I think you know, if you’re if your market is where you live, then it’s probably easier because you can know them know what’s going on. In my case, my market was twofold. It was Hamilton and slash St. Catharines slash welland but it was also student rentals as a niche within that so then you can get very specific around what are the rents at the moment and what’s you know, what’s happening after the pandemic with landlords and our students to renting houses and start to have a story around that whole area. And then you just going to know more than other people talk to the property managers told To the realtor’s build up your knowledge and off you go. The other thing I would say is don’t do joint ventures with family or friends. Because you know, some people are able to do that. But as soon as you sign a contract, your relationship changes from a friendly one or a family one to a business one. And people are going to be saying, where’s the money if things go wrong, or if there’s a roof needs to be replaced, and you don’t have money in the bank, and you have to do it split the capital expenditure, difficult conversations will arise. So if you can find find people who are known to you, but they’re not like, in your close circle of friends or family, that’s often good. A lot of the time people start with friends and family because it’s obviously easier to ask, you know, a dad, you want to do this thing on me. Great, but I wouldn’t deal with my dad because I love him, but it would change our relationship. And he’d be saying, how’s the house going? Naturally? We need new dishwasher. Oh, dear, that’s gonna cut into the projections.

 

Erwin  

discussion to have the family barbecue.

 

Tim  

Yeah, exactly. So I don’t know. It’s just, you know, being very conscious around how you get into it. And for me, it was learning areas in the community where I could speak to people about real estate, through hockey teams, through sports teams, there’s lots of places where you can start conversations and meet people. But most likely lots of things in sales. It’s you know, lots of coffee dates, lots of conversations, building up my repertoire of expertise, doing some on my own initially before I asked other people, so then you have some stories to tell.

 

Erwin  

Very, very right. Before we were recording, I mentioned something about private lending. My thing is, I generally don’t like private lending for myself, but just imagine the conversation should you have lent to somebody? Yeah. And then the deals going sideways. So you’d like to have flipper flippers or having real challenges right now. And then the conversation after that, like, Hey, where’s my money? Yeah. Oh, you don’t have any money? So I guess I’ll be taking the house from you then. Your friendship be after that.

 

Tim  

I mean, it’s, it’s difficult, right? Very difficult,

 

Erwin  

especially if you like their home like ya know, split secure mortgages on their principal on people’s principal residence. Oh, I guess your home is now my house now. That’s a lovely conversation I do not want to have it’s, I stay out of it. So Tim shows called trust by real estate investing, not here, blow smoke up your ass. As I mentioned, before, we were recording, you’re in a position that many people want the way I phrased it, because I don’t want put words in your mouth way I phrased it was you could give up everything that you’re doing actively move working. If you’re a realtor, successful realtor, like you give that up, give up anything you’re doing actively. And you’ll be I consider extremely comfortable financially. Would that be right?

 

Tim  

Yeah. I mean, that’s kind of long been the goal is to have I mean, people talk about real estate as passive income. It’s not really

 

Erwin  

me owning Enbridge shares is passive, I call that I’ll say that’s my baseline for passive. It’s very different than being a landlord of one property.

 

Tim  

Yeah, I wouldn’t say it’s always passive mentally, because people get a bit funny about checking stock prices and looking at their portfolio too much. But, but you’d have to do anything. Because there’s no you don’t have to phone anybody or unclog any toilets or anything like that. It’s just it just happens on its own. So then it becomes it does become a mental game of like, can you detach from having to check it regularly. And we can talk a bit about the market and stuff and how I used to wake up and before I went to bed, I’d be looking at the futures and I’d wake up and look at the pre market and then look at the post market and all this stuff in between. So I’ve kind of evolved from that as well, in terms of just what’s comfortable for me. And one of the interesting things I learned was that different people have different tolerance levels for risk. And different people have different tolerance levels for like how much they want to be involved in, in making money. One thing I remember this interview I heard on a YouTube video, I think, but this seasoned professional investor basically said, like, the things that make you the most money are not the things that give you the most peace of mind. So choose what do you want most of peace of mind or the most money? Good that I love that? Yeah, peace of

 

Erwin  

mind is inversely related to money,

 

Tim  

or money. So people who want very stable, wake up and know how much money they all the time then maybe they’re in GICs are very low. I mean, at the moment, you’re, you’re a melting ice cube in that respect, because it because of inflation, but you know, that’s the baseline. And then obviously, at the high end, you’ve got things like crypto or very volatile things or, you know, things which, you know, stops or SPACs or whatever the, you know, that sort of stuff is so, yeah, there’s something for everybody. It’s just knowing, knowing where you want to be and where you want to get to.

 

Erwin  

I love it. Because I was literally talking to a friend who’s one of the most successful crypto investors. I know, at the dinner table. Someone actually asked him like, what’s the price of Aetherium right now? So you actually don’t even know I haven’t checked in a month and a half. Even though his investment is highly volatile. He’s not checking in checking the month and a half. Yeah, it’s crazy. Yeah, crazy. No, but your point is actually very healthy. And then I also before we’re Recording is not talked about balance. Yeah. Right. for periods of time, if for if you want to get ahead in life, you will have times of complete imbalance. Yeah, you’ve actually laid that out a couple of times already, and just sharing what you shared so far. Yeah.

 

Tim  

I mean, it’s, it’s absolutely true in terms of I mean, if you look at the fire movement, or, and for people who don’t know, this, you know, financially independent, retire early,

 

Erwin  

that’s you. Yeah,

 

Tim  

I mean, I can qualify for that, although I’m not, I still enjoy what I love real estate as a job, if you will, from a realtor point of view. But that whole mantra is about like, in that case, like extreme frugality, maybe, which I haven’t necessarily done, but they some people do extreme frugality, save loads of money, save 70 or 80% of their income so that when they’re 45, instead of 65, they can choose to stop working. In my case, it wasn’t necessarily the extreme frugality route was just, you know, doubling down on efforts with regard to investing in real estate, I never have the net worth, I’ve got, I didn’t really create that through my job income, although I had salaries in the six figures all the time, that money just gets spent, you know, the more you make more you spend, it’s very hard to stop the creep have a bigger house or a newer car, and all those kinds of things are very counterculture, you have to be very uncommon, as David Goggins would say, you have to be very uncommon to not fall into the trap of trying to kind of grow into income growth. And so for me, yeah, it was kind of like this very, we can talk about the brass tacks of it. But at the very hard work of building up the real estate portfolio, it doesn’t escape me that like, a huge part of building up my nest egg was on the basis that the real estate market has been trending in the right direction, when I started working with you was around 2010, you could have bought any house anyway, and sold it 10 years later and doubled your money, at least, if not more, right? And so, but even then we were even back in 2010, we’re talking about right? The people who do best in, you know, that time real estate, who the people who come before us were people who took action, they said, right, this is what we’re gonna do, we’re gonna go for it. There’s lots of people who came to your sessions, and they said, Oh, I don’t know. And, you know, think about it. And I’d say, you know, $250,000, for a single family home that you can rent out for three grand a month seems expensive.

 

Erwin  

I want a cheaper.

 

Tim  

I mean, you know, I remember people talk about it, and it relates to housing and the stock market and everything, it’s time in the market, not timing the market. And that remains to be true to this day. Because until you actually get some skin in the game and start to work and do stuff, you don’t have any exposure to the upside, which will ultimately come back again. I mean, as human history repeats itself, which it seems to be pretty good at doing, things continue to go up over time. This is obviously blood sweat. And we’re kind of going through one at the moment. There’s lots of times where things slow down. But you know, it was COVID, it was the 2008 mortgage crisis at the moment, we’ve got inflation going on and wars, and they’ll always be something. But if you consistently sort of work during that time, then then you can you can build stuff up.

 

Erwin  

So Tim, you mentioned time in the market. So my understanding is you have nothing in the market right now in terms of real estate.

 

Tim  

Yeah, and and it wasn’t,

 

Erwin  

I’d love to market.

 

Tim  

Grand Design, I didn’t have this grand design. actually weirdly, a lot of it was just like, if you think about like 10 years from when I started, a lot of it was I signed a five year mortgage here renewed, I signed another five year mortgage commitment. And that just came up in the last year or two. And I just thought I don’t want to do this again. And this was with no foresight to rising interest rates on mortgages. So they’re gonna do this again, I looked at the numbers, I was like, this house has done pretty well, I’m just gonna sell it and take the money in many cases, because those houses were in Ontario, and I’m not. So I just thought, right, now’s a good time to sell, you know, the, there’s no mortgage penalty to just sell this at the moment. And so I just started doing that, and kind of putting money in the bank, essentially, with a view to, you know, getting some more ideas. I had a condo in Nanaimo, which did very well. And then, you know, decided to sell that one. And then you’re homeless. So homeless now. Yeah. And then the house we lived in, we did some renovations to it, we decided we wanted to live in a different part of town basically, and have slightly more space. And so again, it was just kind of like, well, the housing markets, good time to sell or sell it. Now, some people might think what I’m doing at the moment is a risky move. I don’t because I feel like it gives me maximum flexibility. So I sold all the houses I had and kind of effectively liquidated all of those went to went to cash. And I’m renting my house that I live in now. If I were to buy this house, it would cost about 1.6 million. It’s a block away from the ocean. It’s a beautiful house. I managed to get I think a reasonable rent price for a couple of years commitment, but I think you know, and then after that people might say well, I want certainty. I want to own my primary residence and great I don’t really care and in two years time when this is up people though I extend it, or I’ll have the beautiful opportunity to experience something new and go and find somewhere else. So,

 

Erwin  

but you have that flexibility because you’re pretty wealthy?

 

Tim  

Well, I don’t know about that. But yeah, I took that, you know, I took the funds that I had from those sales, and then started to look around for like, how do I, I’m still, you know, still have that dream of, you know, the, the cross hairs on my spreadsheet of my passive income is greater than my expenses. That’s all I was really trying to get to. And I use, you know, it’s pretty boring and takes a bit of time. But I log every expense that we have as a family into this app on my phone. I categorise it. And that was our call. Let me just my phone up. It’s just called spending, actually, the apps just called spending, and it’s like a little, it looks like a little wallet. But yeah, so I sit down my wife, we got a budget, there’s how much for rent and utilities and kids sports and going out for dinner and groceries and all that stuff. We have a category for everything. So we know what our budget is, I love all the spending, we sit down every couple of weeks and say right, where are we versus x Oh, we can afford to go out for dinner because we’ve, we haven’t really used that budget enough, or we’re a little bit high on fill in the blank, we need to figure it out. We’ve actually got it down to be of a bit of an art now. But one of the cool things about that app is that it draws a graph for you. So I put it in my passive income, I put in my expenses. And the axes have now crossed, meaning that the passive income is higher than the expenses are which, which, again, back to the fire thing is kind of the definition of being financially independent, because you could stop other sources of income and still pay all your bills, we actually have quite a high burn rate, if you will, at the moment as a family because you know, my kids are two my kids are teenagers, they’re in loads of sports, we want to travel and things are expensive. Life’s expensive at the moment. Right? So yeah, so that’s kind of I went from having the houses and really wanting to get, you know, my ultimate goal in 2010. When I started all this was like how do I, how do I replace my income. So it’s taken me 12 years, but now I’ve replaced my income, or I’ve got enough money to pay the bills. And that we can talk more about how I do that. But ultimately, through one of the courses I took with you, which was around options trading, again, talking about the sort of amount of hands on they wanted to have, I found that I didn’t want to have that much hands on stuff. But I loved the model, I love the model of like, generating premium from positions in the market, whether you’re selling naked puts or doing cover calls. That concept was something I really enjoyed. So I learned how to do that, and did that for for a year sort of solidly through various ups and downs, and had some sort of moderate success, but it took my time away. And so through that I then came across some of these funds, ETFs and closed end funds and various other things which use a covered call strategy. And most of these are available through Bank of Montreal, for instance, as a bunch of these. And there’s various other companies in Canada that do them as well. But they take positions on companies and dividend paying companies and they sell chemicals on them. Yeah, boring stuff. You know, it’s Derek foster stuff is toothpaste and toilet roll. And, you know, like we were talking about earlier Enbridge, all the blue chip stuff, basically, and they sell cover calls against those positions, and they manage it, and they pay you a little fee, but the percentage return you get is net of those fees. And yeah, I just was opened up to this whole world of, Wow, I could just put my money into these. And you know, they’re they’re broadly going to track the s&p 500 and the NASDAQ and the Dow Jones and stuff based on what category they’re in, I don’t have to think about it. And I’d have to look at it. And they just, it’s like this weird magic thing happens where on the 15th of the month, they just put money in my account. And I can either buy more shares, and you know, drip is what they call it dividend reinvestment programme, I can either do that, or I can take the money out and pay my bills with it or, or go on holiday or do whatever I want to do. So I like that. And a lot of the community that I have found through that are people who are already retired. And like you, yeah, and so yeah. And so yeah, I just I’m like I could, this is great. I can just keep growing it and putting stuff in I can take some out. At the moment. I’m not touching it because I’m still doing well with being a realtor and paying the bills that way. But knowing having that peace of mind and knowing I don’t have to is worth his weight in gold, because that’s what I’ve been trying to I’ve been trying to climb that mountain for a long time.

 

Erwin  

So Tim, you’ve shared me in private what what you’ve invested. Can you share how much you’re getting a month in passive income?

 

Tim  

Yeah, I mean, we talked about, you know, north of $10,000 a month in passive income. Yeah, for the listeners

 

Erwin  

better for Tim and I talked about what he what he’s wanting to share, because originally we were gonna say five figures but as to abstract, it can be 90,000 it can be 10,000 but different. There’s just why Have over 10,000 So yeah, let’s say 10 to 15 grand a month. Fantastic. Thank you. So a very tasty six figure passive income. Yeah. And passive by your standards, which I think you probably have the highest standards in terms of passivity, right? Because you know, lots of real estate investors say the farm buildings are passive. Yeah. Well, a friend of mine has tenants protesting outside his father in law’s place of work. Yeah, for peace of mind.

 

Tim  

I mean, because of the, you know, the apps we use and the technology is amazing. Now, you can trade stuff on your phone, or again, you can like with any with all these brokerages, you can just turn on the reinvesting programme. So when your shares get paid out, whatever your dividend is $100, or go and buy you 10 more shares in the company. And that will just rinse and repeat. And by the wonder of compound interest, if you make a 10% return your money doubles every seven years, which is absolutely crazy, right with just how it works. And so I was recently went to the UK for three weeks on holiday, the longest hole I’ve had in years. And on the middle week, we went to this little island called Lanza rotting, which is owned by the Spanish I suppose. But off the coast of northwest Africa is in a bit of a weird spot, the Canary Islands, and I remember sat on a sat on the lounge one day and I pulled up the app on my phone, I was like, Oh, the dividends just came in and dropped a few $1,000 in my account. And I was like no, I’m gonna reinvest that. But it’s that’s you know, is the sort of passive side of dividends is a is a beautiful thing, which I know you’ve talked about before with Derrick Foster, and some of the companies you can buy directly and get dividends. And then there’s these other funds where you can buy the ETF and because they use covered calls, they get a little enhanced amount of dividend.

 

Erwin  

And we realised but yes, tax optimise

 

Tim  

tax optimised, obviously covered calls and options trading in general is benefits from volatility. So like in the current market, we’ve got them, no doubt their premiums are pretty good. So but yeah, it’s kind of one of those, for me, it’s like a long term buy and hold, set it and forget it, I don’t need to look at it, it just you check your account once every couple of weeks. And there’s there’s money in there. Because it just, it just works like they pay when they say they’re gonna pay, you know, chasing people for rent, like these big, multinational companies, and they just put up the money in your account, you don’t do anything. So I don’t know what could be more passive than that. Like I said, the only non passive part of it is for people who get a little bit in their head about checking their portfolio, and what’s the portfolio value, and oh, my god, the market is down 2% today, so I’ve lost this much money. Well, no, you haven’t because it’s unrealized. So you just, you know, I was reading this book the other day, by a guy called Andrew Hallam. And he was basically saying that the best investors in this study who did the study, but the best investors are either dead, or they’ve lost their login details for their account. And what that means is, is that, you know, human interaction as it relates to tinkering with your portfolio is going to make you do worse, not better. If you’re buying like an index fund, like a vfv, or something which tracks the s&p 500. You just like, buy it, and then don’t touch it again. Whereas people want to think that they can beat the market or tinker around too much. And they just end up making mistakes. And that’s kind of one of the odd things for me as a previous real estate investor, you don’t get rewarded really for taking action in trading. In the method, I’m doing it you get rewarded for patients, you get rewarded for doing nothing like them. Just don’t, don’t touch anything. Just collect the dividends, reinvest them, spend them, do whatever you want, but then start trading in and out of things because they’re having a bad day or a bad week.

 

Erwin  

Well, it’s a bad year right now, but your, your doesn’t bother you?

 

Tim  

No, I mean, actually, like dividend investing is ideal for a bear market. Because whilst everybody else is like, Oh, my God, my portfolio is down 20%. Well, mine might be down a bit, but I’m getting paid every month. So then when I take that bunch of money and buy shares, and actually buy more shares at a cheaper price, because the market is down, so when it eventually recovers, then happy days. So actually, I mean, you know, I can’t remember the name of the person who said it. But some old wise man said that, if you’re young, and you’re still in the building phase of your investment portfolio, you should get down on your hands and knees and pray for a bear market. Because it’s the best possible opportunity to build wealth. You’re not gonna build wealth with like 2021 highs, because you’re buying at the at the top you wanted to be like, I mean, look at the people who bought at the crash of 2020. If you’re somebody who bought the bottom of that valley, by some kind of miracle, and just sat on it, you’d be, you know, double, triple your money or whatever it is.

 

Erwin  

You’re laughing. Yeah. So I don’t know if I told you but I’m incredibly proud of you. Thank you,

 

Tim  

you and my mom.

 

Erwin  

I haven’t shared this with you, but we’re always changing stock hacker Academy, when we’re doing even more things within it, to try to encourage people to have your kind of your kind of results. Right? I don’t know how to explain it. Yeah. Well unveil it on number 12. Yeah, it just again, understand your journey or gave us ideas on things what we should highlight more in the course and spend more time on it. Okay. So for example, Derek, Derek is involvement is greater than ever. And also, Derek’s actually positive on the year if you can imagine that. Yeah, it means invest in retired 20 years successfully. And I’m really excited to see to share with with our community the new product that comes out number 12, that we announced in November 12. Yeah. So actually, you have a podcast or on anxiety. And you talked about anxiety earlier? Is that part of the reason why you wanted something in investment? That gives maximum peace of mind? Yeah,

 

Tim  

absolutely. Like, I know, my own mind in terms of worrying and trust me, like, I don’t even look at the news on my phone, or on my computer, I don’t have Facebook or Instagram on my phone anymore, because I don’t realise that those things trigger me as a person. And of course, everybody’s different. But I think that peace of mind is worth for me not having to check those things. And knowing that I could literally like, you know, go on a silent meditation retreat for six months and come back and everything would be fine. Makes me feel really good. I’m still there’s still things I want to achieve in financial terms and things I want to achieve in life. But I’m sort of acutely aware of the fact that we only have one life in terms of amount of time to spend or put things to put attention on. And at the moment, my kids require a lot of my attention. So it’s nice to be able to give it to them. And and so yeah, through my podcast, the anxiety podcast, I talk about financial stuff on there sometimes but but yeah, for a style is definitely something that fits well with with me in terms of not having to be plugged in. Because if you look at CNBC or any of the financial websites, they are, there’s red tickers and crazy things going on and flashing lights, and it’s designed to make us scared like the the fear and greed index is a real thing and angry to make you Yeah, the trigger. And we yeah, we know that the financial experts are correct 43% of the time, so you’d actually be better off flipping a coin to decide what the future is going to be like than asking a financial expert on TV. So yeah, based on all those things, it’s kind of like, what’s the point of looking like for to have somebody’s opinion on whether inflation is going to get better or worse, or the stock market’s going to crash worse than ever, or this is the bottom is gonna bounce and go up. Like, it’s just all completely irrelevant. If you’ve got dividend money coming in, you’re reinvesting it or spending it, you’re in things because you know, we’re going to be around for the long term, like, you just don’t need to, you don’t need to engage in that.

 

Erwin  

So you’re just for kind of an extra anxiety, I’d imagine a lot of people have anxiety did a lack of money. But it’s funny, like, we have to be able to tolerate a lot of anxiety, being professional investors, in order to get to where you are, which is like no anxiety.

 

Tim  

You never really escape it completely. I think it’s a human emotion. Weirdly, when I started the podcast, I feel like anxiety was a much more stigmatised word. But after the pandemic, everybody seems to relate to it in some way, in terms of like, uncertainty around the future. But yeah, I think, I think it’s definitely finding something that people without a lot of money are more anxious around me and their basic needs, you know, they might think of retirement as like a luxury that they can’t get to. But that’s just when the work comes in. You know, that’s when you just start putting away wherever you can, and start building up the snowball wherever you can, and getting it rolling. And if that includes looking a bit harder or working on, you know, purchasing a house, and again, some appreciation that way. That’s the way it goes. You know, sometimes you’re not opposed

 

Erwin  

to people taking on more in order to get ahead. But back at some point,

 

Tim  

yeah, I think there’s times in your life when you need to sprint based on your age and your circumstances, there’s things I wouldn’t do to get ahead. Now I might have done in the past, but you know, people are often talking about, I’m going to take a look at home equity line of credit, not quite as good these days, because interest rates are bonkers. But people historically might have taken a home equity line of credit invested it, you know, borrow that 3% invest in something making 10% and then arbitrage money that way. It’s nice not to have to do that. It’s just weird being at this stage in my life, where it’s the first time I’ve ever not had a mortgage or a car payment or any commitment beyond just you know, basic living expenses, that’s probably the best feeling to have is that I could save money based on our expenses or at the moment, we just don’t need to at the moment, but if I had to sort of tighten the belt a little bit, for whatever reason, we could do that. I mean, there’s even with dividend paying stocks, you know, in extreme circumstances, they do sometimes reduce the dividend a little bit or stopped paying him for a couple of months but it seems to take very, I mean, there’s lots of in a dividend aristocrats or companies have been paying dividends monthly for 50 years. As you know, so if you think of everything we’ve been through, it’s going to take quite a lot to upset that applecart.

 

Erwin  

If something really bad happened if like one of our banks stopped paying dividends, from

 

Tim  

Canada with all banks and utilities, companies and stuff is extremely strong. And then obviously a lot of these funds will then invest in like the NASDAQ or tech companies as well. Tech companies are obviously recent, all time lows at the moment. So it’s good to undertake some up but yeah, that’s the the other thing about the mindset is, is that you get into this mindset, like Green Days are kind of nice in terms of the market, because we’re all is happy and things are going up. And then red days is like well, this is an opportunity to in a dividend paying stock world. As the price drops, the yield gets higher, assuming the dividends stays the same. So ones where they’ve you know, there’s there’s a fund in Canada called ei t, which is a canoe fund has been around since 1997. It pays 10 cents per share per month. And it’s it goes through lots of periods of time where it costs you around $12. So you’re gonna get 10% per thing that’s been paying out 10% since 1997. Seems pretty good. Right? And they hold if you look at what they hold on hold like Bell Canada, and Ambridge isn’t Johnson? Yeah, they actually don’t have a very light on tech actually, which is why they consistently do well. But yeah, they’re basically very much in the staples in the staples game. So that is an example.

 

Erwin  

It doesn’t move much. But but but it because it pays. Yeah.

 

Tim  

And again, it’s a mindset change from growth investing where you buy Tesla, and it goes from 200 to 1000. And or

 

Erwin  

even buy houses argue that this is a bit of a growth strategy. Yeah,

 

Tim  

the dividend stocks, a lot of them are just like flatline. Price wise. They go up and down with the with the turns, whacked the banks have been whacked lately. Yeah, but you have to in order to look at the real return, you got to factor in the dividend return. And if you factor in 10% a year and compounded over time, then they may not make quite as much as the growth model as in just investing in the s&p 500. But it’s pretty close. And it’s way less stressful. So if you made like nine and a half percent instead of 10 and a half percent, but you get there’s something psychological about getting paid every month, because we’re so culture to get wages and salaries and all this stuff from our whole lives, see him money get dropped into your account every month for me, it just makes me feel good. Versus riding the growth train, which might make you more money in the long term. But it’s just a personal preference, right? You can’t put a price on mental health and how you feel about things.

 

Erwin  

Tim, apologies for being nosy, but probably about two of our 17 listeners will want to know how much does one need to invest to, to generate 1210 to 15,000 and passive income a month get accounted for you want to see it?

 

Tim  

Well, if you think about the $4 million, right? I mean, if you think about percentage returns, then my portfolio maybe averages 10 or 11%. So you can reverse engineer them out from there. Some of these very safe and steady. I think he it is like pretty much a golden goose as it relates to the type of thing I’m talking about the canoe Fund is a great example. But if you buy the right time, like I did, it pays 10%. And a lot of people would think that’s like a lot of old school people think 10% is a very aggressive, great return. The other beautiful thing about dividends depending on your province is they’re taxed extremely efficiently. If you live in, you know, Ontario, British Columbia, for instance, you can make like 100 grand of eligible dividend income and pay by a small amount of tax on it as it relates to, you know, employment income. So there’s things like that as well. And if you share it with your spouse, and there’s all sorts of other cool stuff to check out, but But yeah, if you could build a portfolio around 10%, then there’s lots of opportunities to do that with things which will consistently pay out. There’s also once the payout 15% and 20%. And getting aggressive. Yes. There are some there are some crypto ones which are a bit newer, and they pay a dividend. And you also hold crypto as well. And they’ve bought some of those they’ve dropped a bit and they reduce the dividend but you just again, you just sit on it and wait. And that will go through its own evolutionary cycle and

 

Erwin  

come back. Right, folks, this is financial advice,

 

Tim  

1. financial advice. And as we talked about earlier, like there’s things I’ve done in my investing career where I’ve done some some mortgage lending, and it hasn’t worked out and I’ve lost money. Now everything you think is going to be the holy grail in terms of getting that passive income goes completely away. But I just you know, I just set it to the side as a learning experience and move on and try and find something else. And the way I’m doing at the moment may change and may alter as well. It’s just based on the world and the ability to make money. I think investing in large companies that have been around for for decades and decades seems to be a pretty steady road to just build things up. So there’s some

Erwin  

way stock hacking follows this very similar model to the funds that you’re investing in. Yeah, boring stocks, sell cover calls. And you know, I can I try to target like 10% returns. But But 10% is much better tax wise, when versus people who are lending for 10%. Like knowing what you know, now, would you ever lend your money again? No, especially your tax rate?

 

Tim  

Yeah. But it’s also just because for peace of mind, like I just don’t need I don’t need to do that. And anybody phoned me up, I don’t have to phone anybody else up. I mean, that’s

 

Erwin  

you control your money? Yeah, you could push buttons, it will be cash in your bank account.

 

Tim  

Yeah. And like I said, most of you know, I don’t do the when I first started, I did the drip thing, which is just as soon as you get paid out X amount of shares, or buy as many as it can, that you got paid in the dividend in the same company. Now I just, I get it all paid in cash. And then I just sit there and look at my portfolio and say, right, where do I want to top up percentages to make sure I have, it’s kind of like, diversity within diversity, because the funds themselves hold a bunch of companies. Some of the funds hold a bunch of other funds inside them. So they’re, it’s pretty universal diversified. And then I’m diversified myself in terms of like, I’d like to have not too much with any one particular provider and kind of spread out that way. So yeah, I don’t foresee any large changes, there are people and I know of people who are in where we’re at, at the moment, they say, right, when real estate comes down, again, they’re gonna get aggressive and start buying a bunch of properties. I just don’t, I don’t want to do that. Because I just like the easy life, to be honest. And I just like the the peace of mind is more valuable to me than trying to double my money again, again, as we talked earlier, I’m still working and bringing revenue in. So at the moment, I just reinvest in my, my dividends anyway. So it is continuing to grow just by virtue of leaving it alone.

 

Erwin  

So gonna have the benefit of having private conversations from you, but you have the option that work as much as you want, and not work as much as you want, right? Yeah,

 

Tim  

yeah, yeah, I’m a realtor. So I can, you know, during the two years of the pandemic, I was extremely busy, like a lot of realtors, and a built up a really nice base of clients. So now I just spend a lot of time taking care of them, and following up with them and making sure they’re taken care of and catching up with them. And, you know, I feel very fortunate with the job because it’s a lot of hopping around to see people for a cup of tea, or going out for a coffee or something. And I built my realtor business through prospecting, like crazy as well. So it’s the same kind of model where I spent a long, you know, I’d sit down for three hours a day in front of my computer, I would run Google ads, and I would just cold call, and phone people. And I pull up lists from the phone numbers from the internet. And I would go knock on people’s doors or their houses and just hustle hard, seven days a week for 18 months to build up a bit of a base. And then it’s kind of like, you know, like all these things, it’s kind of like launching a rocket or taking an aeroplane taking off, most of your fuel is used to get started. And then once you’re started is like right now I can, some days only work for a few hours, because I’m just going to phone a few key customers maybe have a meeting and then I’m like, I’m good, it’s fine. Now historically, I would have beat myself up and said, you need to do eight hours because at some point, somebody in history said nine to five, Monday to Friday, that’s the industrial thing to do. But now with the passive income working for me as well, I just think that, you know, if I’ve got the opportunity to hang out with the kids, or, you know, sometimes I just stop at lunchtime, and I go and work out in my gym. And that’s good. I can invest in myself then, which is important. So I love the freedom that it gives me to do those sorts of things. And I just feel very fortunate that I started in the moment in history when I did, and I worked out well. We have lots of I have lots of stories about opportunities I missed out on you know, I worked for a tech company, in my younger years that ended up getting acquired and I it turns out, I left like eight months before they got acquired and lost all my share options, which again would have been a nice big chunk of money. So you know, not everything works out. But I think if you keep trying and putting in the effort in then you kind of get there. So

 

Erwin  

amazing. Yeah. All right. Tim, we’re over time can ask you any final thoughts you want to share?

 

Tim  

I think my final my you know, the the thing that I’m sort of most conscious of at the moment is just how we spend time in our lives. And making sure you invest in the things which are really important to you. And if you’re at the stage where you’re still in the accumulation phase, and that’s, you know, listen to podcasts, reading books, get involved in communities where people are aggressively learning skills and trying to do things I think is a great place to spend it. That’s where I did and as I said to you offline before we started recording, I’ve always been the kind of person I like right real estate invest in student rentals. Let’s go now just like read all the books and take all the courses and meet all the people and you know, just I don’t know what it is my competitive upbringing environment that I want to learn as much as I possibly can to exploit this opportunity when

 

Erwin  

Never a competitive hockey player. Right? Yeah, exactly. being competitive.

 

Tim  

Yeah. And then yeah, and then I get, you know, I conquer that thing, whatever it happens to be, and I get there and I think I’m gonna do something different. So get stuck in and don’t be afraid to change. You know, I’ve gone from working in sales for a tech company and I started the anxiety podcast, I started coaching people life coach style stuff didn’t quite jive with that. So I kept the podcast, but went back to work for a real estate company, then I became a realtor. And so lots of my friends like you all over the place. And I’m like, Well, yeah, because I’m trying to improve my life. And I’m not gonna be satisfied with just, you know, this, isn’t it? And I’m not just going to do this to get a pension. I’m going to change me. We’re afraid to change.

 

Erwin  

Pretty cool. Don’t be afraid to change. Sam, thanks so much for doing this. Thank you for being open and honest, show us culture has been a real estate investing. That’s why SEO again, and again, I’m so proud of you for your success.

 

Tim  

Yeah, thank you. I you know, I attribute a lot of it. So relationships like ours, but we’ve just been continuing to keep in touch and all the help you gave me at the start. And yeah, it’s been good so far.

 

Erwin  

Amazing. All right, thank you again.

 

Erwin  

Before you go, if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already, then sign up for my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s much improved demonstration over the one that I gave to my cousin chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself, I got into real estate for the cash flow. But with the rising costs to operate a rental business, it’s just not the same as it was five to 10 years ago when I started there. Forgive the cash flow reduces your risk. The more you have, the more lumps you can absorb. And if you have none, or limited cash flow, you’re going to be paying out of your pocket like it did on a recent basement flood at my student rental in St. Catharines. Ontario. If you’re interested in learning more, but it’s true for free for my newsletter at www dot truth about real estate investing.ca. Enter your name and email address on the right side. We’ll include in the newsletter when we announce our next free stock hacker demonstration. Find out for yourself what so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell I love teaching and sharing this stuff.

 

 

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Erwin  

Hello, everyone, welcome to another episode of The Truth about real estate investing show. My name is Erwin Szeto, founder of our real estate team, the four time winner, realtor of the year two masters and co founder of stock hacker Academy. Of course, my wife and I own her accounting business and what time it is to be an investor. Pretty much everything is down except for oil. But oil has almost given back everything that’s gained in 2020 21. Two, sorry. But honestly, I’m not too worried. We survive and thrive in 2008. During the financial crisis, with our real estate investments, or my very small stock investments, everything else life got back to order. In my opinion, this recession is going to be a lot softer than the financial crisis of 2008 2009. It was houses that we invested in back then have their up nearly six times since the bottom, my biggest regret is not nailing the stock market after the crash. There was an incredible opportunity in 2008. And also, I missed the more recent crypto wave. I cut it all the way down, unfortunately. But thankfully, I think I’ve learned some lessons along the way. And now I’m poised to take chair and are poised to take greater advantage than ever thanks to the experiences that we’ve gained education we’ve consumed and the people I surround ourselves with, and the stocks and options world. My mentor and Derek Foster and 610 best selling author is positive on the year. Well, every benchmark out there, for example, the stock market, the s&p 500 Many people consider that stock market, they’re talking in generalities just North Americans. That’s down six and a half percent as of this recording. And again, Derek is positive on the year. So there is likely beating every single fund manager out there. I even know a Toronto fund manager who’s down around 40% on the year. So choose who you like to follow for inspiration and maybe advice our speaker as well. Derek’s also happens to be our speaker at the wealth hacker conference and regular contributor to the stock hacker Academy. There’s been retired for almost 20 years. Thanks for stalking option investing. So you don’t want to miss this. There’s nothing more passive and how Derek invests if you follow their journey at all, and we’ve shared risk has been a guest on this podcast twice. And he truly honestly does. Little to no work. You know, I know a lot of real estate investor friends who say they’re retired, but they honestly traded their job for a full time gig in full time real estate. Nothing wrong with that. It’s just one is completely passive, and one is quite active and very active.

 

Erwin  

Anyways, on the crypto side, we’re super excited to announce our crypto speaker for the wealth hacker conference and he is Jordan Anderson chief operating officer bitbuy. The first regulated team crypto currency exchange and fit by has 375,000 TD clients and facilitated $4.4 billion dollars in transactions bit by awesome as making the news recently this year, Shark Tank star Kevin O’Leary hidden his company wonderful technologies purchased that buy for $206 million. So Jordan will be sharing as well our conferences journey as an entrepreneur from a startup in the cryptocurrency space to now a massive, successful exit as Jordan is a leading Canadian crypto currency expert. Jordan will explain what the blockchain is why and what you will be investing in on the dip. And I can’t wait to hear what you have to say. Again, I missed the run up. I missed the last one up in crypto, I don’t plan on missing it at the end. After all, if you don’t believe in crypto, that’s okay. Lots of people are unsure that area. Someone who’s not unsure is Kevin O’Leary, who has been publicly stating that 20% of his of his investment portfolio is in cryptocurrencies and blockchain. And he also added just recently, last few months, he added to his Bitcoin and Aetherium positions as well as other other positions. So he’s buying the dip. I think all investors need to have an open mind on what could be a once in a generation opportunity. Don’t have regrets, like I do. Wealth hacker.ca for details for you my 70 model listeners, we have a special discount code for you. It’s a five letter word, truth, tr U. th. This code matches our current promotion, which is currently 40% off any ticket, including VIPs, which will sell out our VIP saw that last time and pretty sure it will sell at this time as well. We’re actually we’re on sales in terms of VIP ticket sales. So this is not another conference. If you’ve been to the conference before, from what people told us it was pretty good one, it’s going to be a game changer, a community based unique event we are bringing the such better that our community asked for. So this is for you are 70 listeners and the the event North Africa conference, in our experience was also a reunion for investors after two or three years now After two and a half years lockdown, you know a conference that has been delayed three years now, all the who’s who’s will be will be in attendance. And I look forward to seeing all my friends from key spar rain Rich Dad rock star and the list goes on and on. We, you know, cheering I love everybody. In my experience, the thing is easier, versus Oh, yeah, so my experience, we have a discount code link as well. So in my experience, and as we’ve had lots of customers, ticket purchasers have issues with the discount entering the discount code. So I have a link that directly applies the discount. So you know, finding, figuring out where the key in truth. So that’s in the show notes, hopefully know where that is, wherever you’re listening to this on, on your pod app. Or if you’re on my email list, you’ll get the link will be in the show notes. So on a personal note, summer is effectively over. Most people I know it’s not time for me over but most people consider somewhere over when Labour Day rolls by and are still just as packed. We just returned from a week up north with my brother’s family and some friends of family friends at a cottage we rented from a friend. And I cannot believe the price of cottage rentals these days, like cars that he rented. The normal price is 4500 per week. And I think that’s a little bit on the low side, plus the $300 cleaning fee plus tax on top of all that the tax alone is over $600 to rent a cottage for we we of course received the friends and family discount. But wow. For anyone else this would have been over 5000 Just a random person. Remember that our food in Costco Bill was something else. We’ve been going to the same college for the last few summers. So it’s neat to reflect back and see how the kids have grown. For example, we fish we fish at least every other day. Some days, some of those days were twice a day once in the morning once before dinner, and the kids for the first time they were cutting their own berms and putting them on books. They both caught more fish than ever well over 10 combined. My daughter Robin liked helping the other kids just she seemed to prefer helping other kids with their gear and putting worms on books and fishing for herself. In general just hanging out on the boat. Yeah, we couldn’t fish at the dock we had zero success off the dock. So we had to hop in a canoe or a rowboat. And then two parents last year, both my kids had enough trouble with just with their own gear. So it’s kind of neat to see how they grown up. My son Bruce did because it was his favourite event of the summer. After an exhaustive list of activities, we put the kids through two weeks in our backyard swimming lessons, three Golf camps week long overnight camp,

 

Erwin  

put them into Brazilian Jiu Jitsu. They started CrossFit in August, and now they’re gonna stay with it on top of their Kumaun, which is their math and English homework, which they have five days a week, including to, to one on one tutoring sessions. And speaking of homework, we’re making some major changes in our household are actually cancelling the math and enrichment homework, our kids are taking them out there are Kumada, wrapping the former as turning on the middle of reading and trying to finish a book called The five hour school week. Again, the link is in the show notes. We’re allowing the kids to have more leeway in deciding what they want to learn. Yeah. And also, you know, with everything going on, the tutoring was $500 a month between the two kids. So someone’s six grand a year after tax money. So it’s something we’re happy to save money. And also, this was where most of the arguments and stress that are in our household that’s really mostly originated, are you with the kids to get their homework done. This is not school, either. This is private tutoring that we pay for. So back to we’re giving our kids some more leeway in terms of what some of what they want to learn about. For example, My daughter, she’s a bit of a picky eater. She eats she doesn’t eat very much. So her first project is to prepare a report on what she should be eating and how much my son’s topic is Sharp’s that’s his biggest personal interest. Now, since they don’t have homework from school, and now they don’t, after school, with their tutoring, they’re going to have a lot more time to explore what they’re interested in. And the kids obviously reputable library. So they’ve been going to the library bigger library a couple times a week already. And some of the legal import times including the in school library, hopefully by librarian in house will output as well in their research project. So let’s let’s be sure we have coach Tammy deeds Basil is with us from my own island real estate team. She is a licenced realtor, one of the top Realtors overall at Rockstar real estate. And she’s here to share with us the types of deals and some numbers on the properties our clients are coming back on. Right now. It’s a crazy market, including we’re seeing some of the current best practices from our experience is we’re seeing a lot more traffic immersion so So Tammy won’t get into that. And also we still have lots of clients who are taking profits. So incredibly important. on how to sell a property in this market. So Tammy is here to share about that as well. Yes, that’s right. We have clients who are still taking profits. But again, most of our clients have been in market for like 8765 years. So they’re still taking some pretty significant profits, profiting somewhere between 30 40% On average return on investment per year. So again, can you tell me tell me what’s keeping you busy these days? Work or personal? All the above? I’ll tell you, like many entrepreneurs, you don’t really separate the two. Right?

 

Tammy  

Personal puppy, you got a puppy?

 

Erwin  

Oh, Puppy, is it? Is it a kid’s puppy is a your puppy.

 

Tammy  

So Robbie, he’s 11. But he’s been asking for a puppy for about 15 years now. And he’s always loved all animals, especially dogs. And they were begging me for any, mostly Ravi begging for any kind of pet. And so I few months ago, I’d say it was March. Maybe I cave and I still keep fighting will get a fish. Terrible, right? I know. And I was like, okay, so I was actually going to the aquarium store with the kids to get this fish. And I was like, Oh, my goodness, like these tapes are expensive and all this other stuff. And and of course Tesla’s like, why would a decorate inside and I want this rock and I want this castle and I want all this stuff. And then we looked over and there was these $15 hamsters. They’re like, Oh, hamsters. I’m like, let’s do it. Let’s go to hamster instead. Right? So we ended up getting the hamster that’s still ended up costing me a little more than I thought because Tessa got deep into the hamster life and researched everything. And so we had to upgrade all of our original stuff. We needed a bigger cage than the original cage. Now she was barbed biting. That’s not good. So now we needed a glass cage. We had to change that. So anyway, so we did all of that. And then, so we’ve had this hamster, which you know what? Hamster now we don’t even know about this yet. Okay, the hamster still gets a touch. But Rob has been asking for a puppy. And Tessa has actually been very scared about getting a dog. She’s been terrified of puppies ever since she was jumped on when she was little. And so we had to ease her into all of that and make sure everybody was ready. So certainly, it’s a family dog. But I would say Robbie was the one that prompted wanting to get this dog so badly. So Tommy loves it. I made sure my parents were on board. My parents live with me. And I knew when the kids were back to school, and we’re, you know, at work, my parents were going to be there, if we want to go away on vacation. You know, my parents were there. So they were on board to the little yorkiepoo. She’s almost four pounds adorable,

 

Erwin  

and the kids will walk it. So right.

 

Tammy  

She’s very timid, scared little puppy, which I like, because she’s quiet. And it was also good for Tessa because they could grow together. But she is definitely coming out of her shell. So we’re not at the point of walking her just yet. We’re probably gonna wait to the rest of her shots are done and so on before we start doing all that, but yeah, Bobby has been actually really great. They’ve taken her out. They cleaned up her hoopoes. Yeah, so they’ve been actually really great and research a lot to Robbie, when they wanted a dog, he actually put together a PowerPoint presentation for me. Yeah. And they’re like, listen, we’ll pay for half of the dog bowl, it’s $13. So we’ll pay for half of the dog bowl. Anyway, stuff like that was keen. So that’s what’s keeping me busy, I guess at home and just summer stuff, the kids are winding down to get ready for school. And then workwise, a little slower through the summer, which is typical for real estate market in general. But a lot of times with our investors, that’s a good opportunity for us to pick up some properties. But given the market with, with the interest rates climbing, although the house prices coming down, we still have a lot of nervous investors just wanting to feel things out. So a little bit slower there. But a lot of people starting to come out of the woodwork now. So I’m getting a lot more calls a lot more texts and emails, just staying in touch with everybody still staying on top of what’s happening in the market and seeing houses. So we’re still busy that way, did a lot more selling of properties this year than I have in previous years. So one given the fact of where the market was. And two, because we’ve had some investors decide that it was time to scale up and cash out some of these properties. So it was a good time to do that as well. So we were starting to see a little bit more of that.

 

Erwin  

So did any of these sellers lose money in real estate?

 

Tammy  

Zero? No, nobody lost money? Definitely not. Now it’s so it’s you know, it’s it’s weird, because when you think back to in, you know, January, February, we’re at the peak of the market where let’s say I’ve given an example of a legal duplex and where they were selling it and where they’re selling it now. Sure, you could take it as a loss because you would think well, I’m selling it for less than one of that. But obviously you can’t let your brain think that way. But I think about it like what did we pay for this house when we bought it the house not only cared for itself with the tenants paying the rent, but a lot of times people were I had positive cash flow as well. So they were making money on these properties that were also paying for themselves and now they probably are good. I’m gonna say three minimum of $300,000 higher than when we bought it. So you know if we bought them at four cents 7500, for example, and we’re selling at minimum of eight, nine. And so and then I’ve had other clients that refinance those

 

Erwin  

big deal to you. That’s a big deal for people like you. But people are profiting like, $300,000. Oh, it’s a big deal for me. And capital gains.

 

Tammy  

I know. Yeah. Yeah. I mean, there’s obviously a lot of moving parts, maybe not the exact numbers, but I’m saying if I take the price of what they purchased it at and the price of what they’re selling it the difference there, maybe it’s not everyone’s story is obviously a little bit different. Just like I was gonna say that there was some clients who also refinance their properties in during the time period that they held them where they pulled out some money and then use that to purchase another property. So again, just the plus sides of obviously owning real estate, there’s always your ups and downs on on it, but but the clients that we had that have sold Yes, have definitely did, they did make money.

 

Erwin  

Apologies to some of the listeners. I’ve made an observation just watching social media, especially Twitter, I find that whoever is the most negative and reporting the negative news gets the most attention. But even though prices are down right now, we don’t really have any unhappy clients. Like I’m sure that other happy they missed the peak. Yeah. But they’re still making still taking profits. And they’re taking a whole lot of profits, like hundreds of 1000s of dollars. Exactly. Nope, definitely. Sorry, folks. There’s no, there’s no loss porn here. Did you have any buyers not able to close on properties through this whole thing?

 

Tammy  

No, no, no, look, I mean, we haven’t experienced anything like that personally. But you know, I have heard some stories. I’ve heard through some of our lawyers that we talked to, that they had buyers that were looking to try and get out of transactions that they had to be having those. No, no, I would say if you want like, we have some clients that had some pretty crappy tenants, there’s a one a negative story.

 

Erwin  

That’s, that’s par for the course.

 

Tammy  

dollar wise, no, I mean, obviously, yeah. The greatest negative side was just the fact that they didn’t get to cash out as much as we had maybe hoped if he had sold at a different time period. But it depends. Maybe they’re waiting for renovation, or some of our clients were waiting to have tenants that were moving out. Before we listed it. Yeah. And so on. Okay.

 

Erwin  

All right. We’ll get to some of those tenant stories in a bit. First of all, so that you suffer a bit of a refresher, because it’s been almost a year and a half since your last on the show. What did you do for a living prior to being in real estate?

 

Tammy  

Prior to being a realtor? I had my own aesthetics business. So I did that I can’t remember like, 1517. So like that years? Over 15 years, for sure. I’ve done that a long time. And it is a lot. Yeah. And, and I love that. I loved that job. It was a little different at first when I you know what it was, I saw, I was with a boyfriend at the time. And I saw a friend’s girl, another friend’s girlfriend who we went out and she had her own little salon. And I actually thought, wow, this is pretty cool. You’ve got your own business here. You got your own salon. And I thought maybe I’ll try that. I’d like to do that. And so I went to school to take the aesthetics course, not really realising that I was going to be touching people’s feet and waxing certain parts. So it was a little bit of a

 

Erwin  

you know, it’s pretty creepy. Yeah.

 

Tammy  

Yeah, I remember I remember I had a facial. Facial. Yes. I had a gentleman one time though. He did fitness competitions. And so they need to be waxed. Right. It was all professional and he wanted to be waxed. And he wore his bikini bottoms. And I was like, Oh my gosh, this is so weird. But yeah, waxed his legs for his show. Competition, but

 

Erwin  

okay, that’s, that’s

 

Tammy  

no, yeah. He asked for more. I said, No. No, and then yeah, so that’s what I did these days. I love absolutely love doing it. I loved I don’t know if I realised this, that but I looking back at it. Now. I love meeting people. I love being with people. You know, getting to talk with so many different clients. And a lot of them I’m actually still very close to. There’s a client in particular, I helped both her daughters recently just buy houses. Fantastic. So yeah, yeah. And actually, I still meet up with her for lunch. Because another client that I had from aesthetics, and she’s an older, older woman, she’s probably in her 70s At least. And she we heard I meet up for lunch from time to time. So definitely, relationships.

 

Erwin  

You made a lot of money as an esthetician like you do as a realtor.

 

Tammy  

Yeah, yeah. No, not at all. But at that time, I felt like I I thought I felt like I was doing well, you know, at that time, and it was it was a lot of cash, cash job, but you know, maybe 500 bucks a week coming in cash. And at that time, I felt like that was kind of it. Now we’re going back a while because this was oh, that’s a long time ago. I can’t even think of how long ago that was, I guess 15 years at least because they’re 10 years ago, over 10 years ago. I’d say for sure, it was before my kids. So my kids were Robbie’s 11. And so it was prior to him that I had the business doing that. So it was right out of high school. I had done that. But I realised, you know, that unless I was going to open up a salon, were how else was I really going to grow? I mean, I was working nonstop as it was. And I enjoyed it. That was fine. But it still it was a lot of hours and a lot of time that I had put in. And even though I thought it was doing well, I realised, you know, especially now looking back, I always thought it was kind of a person that didn’t maybe like to travel. But maybe I just realised I also didn’t have the money to travel. Right? Because I wouldn’t say like, I’m I love travelling at this point right now. But I have noticed that ever since be more successful by doing real estate, I certainly have certainly taken a lot more vacations travelled a lot more, and you’re pretty successful. I’ve been doing well. I’ve been doing well at it doing well. It’s so weird. I don’t know why that’s a weird thing. I should have just said yes. Because you know, it’s great. And I love it. And they work really hard. But it’s also, I feel a little shy about that. But yeah,

 

Erwin  

any idea how you rank on the board or anything like that?

 

Tammy  

No. Okay. No, you know what I shouldn’t say, I know that we see these changes on our team had sent us a list and it shows you what the average Realtors make. And that and that was a while ago when I saw that. So I was definitely on the top top part of that list. Top four top 1% though. I thought it was Yeah, but yeah, I have to relook at that. Right. So that was two years ago. So who knows.

 

Erwin  

Tammy is a top between top four top one percentile realtor. So she’s quite successful. How does that happen?

 

Tammy  

You you work me like a dog.

 

Erwin  

Pretty good life. I don’t know what you’re talking about.

 

Tammy  

You know what, it’s interesting, because I’ve talked about this story. Last time on the podcast, you know how I’ve been friends with James for so long. And I saw him doing it. And I had him and his wife over for dinner. And I talked about wanting to get into real estate. He’s like, You should do it, you should do it. And I did have interest in it. And it wasn’t really though, until I got involved, that I realised how much absolutely loved it. But again, there’s all the other parts of the job, like I love working, I love being out there getting to meet and talk to so many different people all the time, I have this goal that I put on myself where I meet a client and they’re looking for something, yes, I want to get it and when they’re excited to get it. I’m excited to help them get it. And so it just drives me to kind of keep going more and more. And I guess I think the biggest thing with this job really is about hustle in all honesty is making sure that you’re constantly out there. And you’re always, you know, looking for properties and look for houses and talking to your your clients and so on. And I think I do that. So I think that’s been a big part of it. That’s why I think this job can be maybe a part time job for a lot of people because depending on how little or how much they they want to do.

 

Erwin  

You want to do a lot.

 

Tammy  

I do. I love it. Yeah. Not to get away with my family. And it’s not to get to get to travel. But I just genuinely love the drive behind it. I guess. Knowing that I’m helping or helping people is awesome. You’re helping people as an esthetician. I was maybe that’s part of why I like to clean them up pretty nice.

 

Erwin  

You’ve had some pretty serious success stories among your clientele. And can you share some of them? Um, yeah, we just had Joe on on the on the show. So yeah, I’m pretty sure he wants to tell not only the youngest, our youngest client, but also our youngest, the youngest to achieve self made millionaire status.

 

Tammy  

So I’ll never forget when Joe approached me, and it was January 2019. And we were at one of our meetings or monthly meetings that we host I would meetings. And I did a presentation there. And on that presentation, I actually showed a best buy property. And I had there was I think over 200 people there that at that meeting, and I had said how this property was so great, blah, blah, blah. Anyway, at the end of the meeting, Joe comes up to me introduce himself, he said like to work together like fabulous, I love it. Let’s do it. So we got into talking, and nobody, nobody came up to me and talk to me about this best buy property. And I was like wow, this is such a good one. So when I was talking to Joe, I said listen, this is a really good property, we got to go for it. And this was all at the same time when we were leaving do remember we were going to see Grant Cardone in February we went to Miami and Joe and I and this is where I feel bad because it was our first real deal together transaction together. And I’m in the airport on the phone with him say okay, look at this is what we got to offer. This is what it’s going to work and, and and he’s like, Well, I think we should do this and I’m like, no, no, listen, you gotta listen to me. You gotta trust me, you know and so anyway, we got it done. He got this property was a fantastic property for him. So I was super super excited. But that’s why was our first meeting and our first real interaction And, and then and then it’s snowballed from there. Right. And, and a lot, you know, I certainly as a realtor helping Joe with all of this, but then also Joe being very driven himself. So the two of us together, I think we, we hit it off, and we’re able to help them get some good properties.

 

Erwin  

So you’ve talked a lot of first time investors, what are some of their challenges? And how have you helped them?

 

Tammy  

I think one of the biggest challenges, and I think it’s more for me, personally, is that I know when I know, there’s a really good property, a really good deal or a really good opportunity. And I want to portray that to my client, and I want them to know that, and I’m always worried that I’m gonna come off as a salesy kind of person, or I never, I don’t want to be pushy, but I want to push them. Do you know what I mean? And I don’t want somebody to think I’m just doing it because I need I want to get paid, and I want them. And I hate that. I would hate that part of it. Not that I’ve heard that. And that that has I don’t think that’s happened. But I’m saying that’s what goes on in the back of my mind where I want them to know. And I’ve heard other people say, lines of, you know, you don’t buy it, I’ll buy it. That’s just not me. But I have to, you know, try to word it how, how it’s sincere for myself to know that when something’s really great, and actually, it’s funny, because my clients now who certainly know me, know, my reactions. And they know, I was in a in a property recently with Mike Ferreira. That unicorn property we got. And it’s funny, because I didn’t even realise that he was reading me on the outside. And we were in this house. And I was loving it. I was like, Oh, my goodness, this is fantastic. And I guess I actually went a little bit quiet, which is rare, that that usually quiet. And he’s like, you’re quiet. What are you thinking? And I looked at him. No, I was said to him, I’m thinking to myself, if you don’t buy this, how can I buy this? That’s what I was thinking that was legit, right? But I was like, Yeah, money can move real quick. Where can I get? So yeah, so I think that was probably one of the challenges with new people for me. Just making sure that they know that I am sincere, I’m, you know, I want everyone to be happy. I’m not an agent. And I, you know, I have actually said this in the past, I can’t just let something roll off my shoulders and just let things go. And that may be something I need a work in progress as well, because I need to toughen up that way a bit. But at the same time, I just, I care a lot. And if something’s not quite right, I will overthink it. I’ll think about it all night. I won’t sleep you know, and I and that’s just me, and that’s who I am. So I don’t know if that can be changed much. But but that’s always

 

Erwin  

said to Mike though I think he got the first sick deal in this correction.

 

Tammy  

I know. Yeah, that was an amazing.

 

Erwin  

I know, we’ve covered it before. But just just give us the headlines. What made this a unicorn property.

 

Tammy  

So this one here, when we went to go look at it, Mike didn’t actually even want to go see it. Because the main floor of this house, it’s a bungalow is super, super nice. And he’s like, this is gonna go for too much. Forget it. So I said, Well, let’s go check it out anyway, and then you know, fill out the agent and go from there. So this one here, the owner had renovated the house. Now the owner is also builder contractor. So he actually did everything by code. So he turned the basement into another unit that he had a friend of his renting from him. But it had like it had fire rated drywall. The windows were so massive, like the biggest Windows probably I’ve ever seen in a basement. And so we were good with egress to panelling. He did everything. And except that he didn’t go get the drawings done. And he didn’t run it through the city so that it became a legal duplex. So that one was really great, because it was going to be a really small conversion. I ended up finding out now because we had a pretty good idea of what we were getting into, of course, but the whole conversion to turn that into a duplex cost him $10,000

 

Erwin  

That’s it. Yeah. disclaimer here. This is not normal. It’s not normal, versus not normally $10,000. This is a fleet abnormality. Yeah. So hence why this is part one of the reasons this is a unicorn property.

 

Tammy  

Yeah, it was. Because for drawings and half that was for drawings, and the other half is because we did a couple of upgrades. Yeah.

 

Erwin  

Just from context, folks, for listeners benefit, bigger properties get higher rents. So just because property is a duplex and it gets a certain rent, and someone else gets this, it’s a much, much higher rent, than my next question is How big is it? Right. So just want to clarify that this was a pretty big one. Was it not?

 

Tammy  

Yeah, I mean, a lot of times we’re looking at 1000 You know, to us big a big square footage for a bungalow would be you know, 1100 1200 that would be large. So and those will fetch more rent. Absolutely. Yeah, absolutely. The upstairs of this house. The kitchen is nicer than most kitchens. You see, that’s nicer than my own kitchen. So it was beautiful upstairs, and like I said it already had this You know what’s interesting? It had this basement that has the second unit. And it’s a little bit on the smaller side but not too small. Like it’s great. It’s got its two bedrooms living room kitchen. So on. It’s nice, but there’s actually a whole nother separate side of the basement that was that hasn’t been touched for like, Ooh, another unit.

 

Erwin  

No, I want to touch on a point. Pretty much everything was already renovated. And there’s quite a lot to touch on is, well actually take the kitchen. For example, if someone wants to instal that kitchen, how much would that cost?

 

Tammy  

Oh, geez. I think it could easily be 3040. Okay. Yeah. 1000.

 

Erwin  

And then the basement. If we were to go get a quote today to say that basements unfinished? Yeah, obviously,

 

Tammy  

you do a conversion? Yeah.

 

Erwin  

How much would it cost to renovate the basement? I’m going to say about 150,000. Right, right. Right about 100, navy, Cavan, just between the kitchen and the basement? Now, one observation that I’ve seen these days is contractors have not their prices have not gone down? Right? They’ve gone up?

 

Tammy  

Yes, some are going up. And right now they’re kind of sitting still a little bit, which is nice. Last little bit.

 

Erwin  

Yeah. And then kind of my point is like, I know a lot of a lot of folks out there who are teaching to buy a really ugly property and then renovate it. To come out of pocket 180 grand for a basement and a kitchen alone on top of the downpayment and everything. That’s, that’s, that’s a lot of capital. Yeah. And

 

Tammy  

no, typically, we wouldn’t put that amount into the kitchen upstairs. But that would be still the same total that we could easily put in upstairs. So if you do buy a rundown house, like you said, and we got to go through the main floor, you know, we can break it down when we’re in there. And I’ll say, hey, we need floors, we need paint, we need kitchen, we need bathroom, and I’ll break it up, we’ll make 5000 Another 5000 10,000 here and you can easily be 3040 on the main floor. For sure. And that doesn’t include other items that you got to take into consideration like a roof, or a furnace doesn’t need new windows, right? Driveway expansion.

 

Erwin  

Now there are other features of Mike’s house that made her the unicorn what else biggest and

 

Tammy  

most exciting part was that it had a large garage, existing garage in the backyard. It’s on a large lot is already got this garage, but this garage already had electricity. So has the electrical panel that has gasline that had a water line. The only thing left that it needs to do a card and speak because that’s our plan was

 

Erwin  

sewer line. Interesting. You had a water line but no sewer.

 

Tammy  

It had us. Okay, so did have a sewer line previously that was added to a septic tank that can’t be used. Yeah.

 

Erwin  

Right. So it needs a sewer connection to this to the cities, the city sewer, any idea how much that’s gonna cost?

 

Tammy  

I don’t have the breakdown of that. But the total cost for that garden suite is going to be about 70,000 which is again, a unicorn. Yeah,

 

Erwin  

cuz I can’t stand those TV shows really give you like, ridiculously. I talked about that. Yeah, I know. Just understand 70 grand is not normal for a currency conversion. Okay, so 70 grand, and then what?

 

Tammy  

What it cost him because he had an existing because he had the existing structure of the garage. He’s probably saved about half the costs.

 

Erwin  

So he’s always he has spent how much then? So he’s about 70 is going to be about 70. Right? 7075? Yep. And then what can you rent it for after

 

Tammy  

so I’m comparing the garden suite rentals to be very similar or even a tad more than the that’s usually a two bedroom let’s say typically are going to be a two bedroom if we can compare to a three bedroom main floor rental. So if you’re getting 2000 or 2500, whatever it is, you’re getting, because it’s obviously going to differ city, the city for your main floor three bedroom, then you’re going to get very similar, I think to your two bedroom because it’s completely separate. detached

 

Erwin  

from the house. Do you think this will be a two bedroom and it’ll be close to three bedroom rent?

 

Tammy  

I do. Yeah. Yeah.

 

Erwin  

So what’s the total rent on this then? I’m sorry. What’s Mike in for? What’s his total? What’s his total?

 

Tammy  

So he’s 70 on that and 10 in the house? It’s under 100

 

Erwin  

What do you think his rent is gonna be within 2300

 

Tammy  

I think his upper there is 22. This is Branford. So a little less than Hamilton. The basement is probably going to be about 19 I think he just rented it out actually. So I have to get those numbers. And so the garage I think it’d be similar to the to the main when you to do your 22 for the main garden suite. I think so. Yeah. I mean, obviously this is still very new to a lot of us and we haven’t been seeing it out there very much, but that’s certainly what I’d be alright. You might even try a little higher. It’s gonna look super sweet when it’s all done so 6300 and rent.

 

Erwin  

What do you pay for the house

 

Tammy  

like a triplex? I knew you were gonna ask me that and I thought I should pull that up. Well, he’s talking. i He paid I think it was 875. So far

 

Erwin  

under a million he’s got a triplex, right. That’s 6300 and rent a month. I’m doing the math as well.

 

Tammy  

I hear this stuff. Yeah, it’s only five Okay, good. No, no, I don’t do math on screen.

 

Erwin  

That’s 75,600 per year. And he’s in for less than a million. How that’s almost a percent rule. And it’s plus utilities, right? Yes. Oh, yeah. Yep, definitely. Wow. Congratulations, Mike Ferreira. If people want more of these, can they get one? Can I get? Well,

 

Tammy  

I know I actually got in trouble because people were like, Why didn’t you call me?

 

Erwin  

And that’s the glow. That’s why I know

 

Tammy  

exactly. We went out to look at properties and, and you know what, and he’s always hustling as an investor as well. And so I was very, very happy for him. But yeah, all the years we’ve been doing this. I mean, I’ve been on your team for seven years now. Like a realtor for five. So I’ve been with this in this business with you guys. And it’s the first time I’ve seen this, obviously.

 

Erwin  

And then just to disproportion understand how it works when you’re working with realtor, if your regular client wants to see the property, we’re not calling other people to try to sell it.

 

Tammy  

To me, right, yeah, no, absolutely.

 

Erwin  

That would be fair to my age. No, no, it’s not like why didn’t you call me is like more like, you know, you need to make the time to go see the drink the effort to to get deals,

 

Tammy  

and this was, you know, when prices were high, and markets going crazy, and, you know, we needed to know that the numbers were gonna still gonna work and everything was gonna make sense for us. So I probably say the big question right now, just for the listeners is the fact that, you know, the garden suites are very new. So there’s we can’t, and I know, I would never guarantee it anyway, to be honest, but we can’t really guarantee where those refinance numbers are going to look like on the garden suites yet. No,

 

Erwin  

who cares? That’s kind of unicorns.

 

Tammy  

That’s the only that’s the only part when you’re running your numbers that we do have to keep that part in mind. But

 

Erwin  

yeah, we might have to wait a few years for the for did a good refi number, get appraisal number. The duplexes with you guys. Yeah, just see what some of the duplexes on duplexes are a new thing. We couldn’t get appraisals, the appraiser people would just use like in law suites as comparable against our legal basement apartment houses. But that’s actually something that’s a good point to bring up with the the investor realtor relationship is when I was practising as a realtor, my clients who were active who are ready to buy, we’d have a standing meeting. Right? So like, every Thursday at two o’clock, we go see property. So that client usually gets dibs versus the client that says, Call me if you see anything good.

 

Tammy  

Absolutely. And that’s really tough to Yeah, because I’ll often, it’s actually a really big thing that I want, especially when I’m talking to my new investors that I say, you know, let’s book ahead of time, let’s book in and pencil in a date to go out and look at houses. Because when you have that day pencilled, you’re gonna go and you’re gonna look at him. And let’s just say there’s nothing really on the market. Because we’ve had, we’ve seen those markets before, where there’s not really much out there, right? Two things, one, we can still go and see the couple that are there just to check them out. Or to if you needed to cancel, we can cancel that appointment, everyone’s busy, and we could fill up their time. But if you have that appointment set there, you’re more likely to keep that appointment and get out there and go look at the houses. And I always say all the investors that do super well are the ones that are out just always looking for always got that appointment, they’re always checking them out. And that’s where the success is for sure. Because I have many clients as well, new people where they’ll say, I’ve, you know, probably been talking to them for two years, maybe even some three years, just, you know, let me know if you’re if you see this, or if you see that we are but you have to come out and you have to see it. And that’s the important part of that. Right. Right. Yeah. And

 

Erwin  

that’s what it is to work with, with investors on a regular basis is we have lots of clients who have very similar criteria. Because because we have a pretty good idea what the best investment property is.

 

Tammy  

You know, what’s funny, is that I get that question. How do you decide if you see a property comes up? And don’t you have everybody all looking for the same thing? And the answer is like, yes, but also no, because of all the investors that say that I’m working with right now. So let’s just say I’ve got as an example, you know, 12 active buyers, but as people that are ready, let’s just say as an example, a lot of them have different price points that they’re approved for. A lot of them have some particulars that their own personal stuff of what they want or don’t want. Some are looking for single family student rentals, duplexes, triplexes, some that want to do a conversion. Some are looking in different cities than others. So a lot of I’ve only ever had one time, where I had two clients that both wanted offer on the same property. And one ended up actually changing their mind. I was like, Whew, I’m kind of glad. Because I had to make sure I had that conversation with them to make sure that they both knew but all in all, like as much as we’re all out, then there’s so many investors, there’s also a small pocket of us that are out there, right? out doing this.

 

Erwin  

So someone wants to be next in line. What do we have to do to me for the next unicorn?

 

Tammy  

Oh, again, going back to it, you have to go out you have to get out there and look, this is exactly what happened with the scheduled time with you. You have to Yeah, it’s in you know, what is this? A lot of different things. One, I think it’s a really good experience to see all the different types of properties, especially for a lot of our investors trying To get acquainted with the neighbourhoods, and learn in the neighbourhoods, you know, we did that as realtor, I remember when we started going out to well, and I would drive out there by myself purposely all the time just to constantly see houses. So as an investor doing that, as well and coming out and, and I found that every time I’d go out with an investor and talk about these properties, and let’s say a conversion, for example, all the rules and everything, every time we were out date absorbed something new, new, new, constantly, and it was so important. So I think just honestly getting out there and always looking and I tell my clients to even if they’re not ready, or they’re in a window where they’re waiting for financing, if they want to go see houses, I’ll do it, I love it. I love looking at houses, I will go by myself. So if you want to go let’s go together, right? It doesn’t mean that they have to go because they have to buy right there. And then it could be a lot of really good learning process as well. And it’s nice for us to meet in person, you know, so many times we have a phone call and a chat. And it’s nice to get out there face to face and and look at look at everything. So I think that’s probably the most important. Get out

 

Erwin  

there. Yeah, get out there. Because sometimes you might get out there and you see a house and the price and that might not be right. And then the house fails to sell. Yeah. And then and then that’s an opportunity, right? Absolutely.

 

Tammy  

We just haven’t had one of those. We did. Yeah, we just had one of those happen with Emily, clay and Emily. And she’s always hustling. We’re always looking for houses. And it’s fantastic. And I remember when Emily first called me, she had so much energy. And so excited to jump into investing, she didn’t have any properties before we had gotten together. And now she’s and that was just Whoa, she actually did a post on Instagram that has been doing it now for one year was when her first purchase was, I was like, Wow, a year has passed already. I can’t even believe it. But I do remember, she’s her being super excited and going out. And we’ve continued that way. And so we went to go see this property in the end of May, I believe it was in May, beginning of June. And the price point was a bit higher. And I had a tenant in there that was paying low rents. So when we worked out the numbers, it really just didn’t quite make sense right now. And so I’ve been keeping my eye on this property. And I noticed that in the listing remarks, it said that the tenant was moving out. So vacant possession was going to be available, all the updated. But they updated it. They updated the listing to say don’t pretend it would be moving out. Yep. So I called her. I called her immediately, because I knew he had seen the house. And actually, I think I texted her I think I sent her a text saying hey, remember that house we saw such and such, I just found out that the tenants moving out and speak in possession her response, let’s put an offer in immediately. She goes, let’s work out this, this. And this was like late at night, because tomorrow morning was offer. So we were able to jump on it. And we were able to act on it. Because we had already seen this house. So it was great. And actually even still putting in a conditional offer because we put a condition to see it again. It’s been a while and we want to make sure everything is still really good. And do do our due diligence there. And it’s been a bit of time. And so we did have that condition in there. But the agent did tell me that she had four showings booked that weekend. So if we had that up when we did,

 

Erwin  

yeah, this is August for showings booked.

 

Tammy  

Well, they dropped the price. And that was fake possession. And it’s funny because this is the kind of house that’s been sitting in the market for so long. That probably everybody’s seen seen this house. Even our own team when I didn’t have anybody buying it. I remember talking to it. And you know, we’re having people look but it were again with that tenant just didn’t really make sense. But second, I saw that, yeah, we jumped on that.

 

Erwin  

Was it this disruptive tenant or the rent was low? Why? Why would the impediment for the house to sell

 

Tammy  

was a longtime tenant. They had been there for about 14 years, and paying 750 a month. I know. And then it’s like what

 

Erwin  

750 For what they get all inclusive, three bedroom.

 

Tammy  

I don’t know if it was utilities, or I did that. That wasn’t disclosed yet. We didn’t get that far. But it probably was all inclusive, actually. And it was two bedroom. It was the upper unit of a house. So this is a two story house. And it was the whole upper level. So these are two it’s a duplex and it’s above grade. Both units.

 

Erwin  

So many square feet was this house. I saw the pictures pretty nice.

 

Tammy  

Oh shoot. I forget. I forget what the square footage is. It’s quite large. Yeah, I mean, it was probably at least 17 Plus Yep. Is huge house was big, I would say about 17 Maybe duplex. So this house here is a duplex with with the city recognised and was possibly purposely built that way actually. This owner had been the owner for the most of the time this house had been built. And she had owned it and live there since she was five years old. So her parents then gave it over to her. And she was the one that lived on the main floor. And she is now in a nursing home and she had the upper tenant there that was there for the long time. So there was actually no way to access As the unit’s from inside the house, oh, separation, complete separation. Exactly. And it’s on a double a very large lot. So it’s 60 by 120, we did look into the options of severing. But that’s not going to be our best route. So we’re going to go ahead with our original plan, which is to turn in the again, existing detached garage, which is about 550 square feet and turn that into a garden suite.

 

Erwin  

Sorry, it’s 550 square feet for garage. Yeah,

 

Tammy  

it’s a big double car garage.

 

Erwin  

And what’s the budget for the conversion?

 

Tammy  

So the garden suite there is probably going to be about while we’re still waiting, we gotta get some quotes on this one. But we’re, I think it’s gonna be about 150 50. Yeah, I mean, I know when we’re building from scratch, we’re roughly estimating numbers around 250, approximately, that’s nothing written in stone there. Obviously, that could be some given taken lots of things, but in involved there, but this one here just had it did have some electrical to it. And then, um, so I’m more thinking, it’s going to be a little process, obviously, to get everything done, it’s going to take a bit of time. So you know, we’re rents are, then we’ll see, as of right now, I’m gonna probably say at least 2000. Because I know within this last year, our properties are duplexes of the bungalows, three bedrooms on a main floor. And well, and we’re renting for about 1900. That was like a year ago, and they go up. So let’s say, you know, they’re going up, getting towards the 2000. Then again, garden suites, similar as well. And then the inside of this particular house, we’re going to do a big renovation, though everything, it’s completely outdated. Everything’s wood.

 

Erwin  

Wood. Can we sure what she what the house sold for?

I don’t know. Can I share that? On the load?

 

Tammy  

Let’s say we got it. Well, under asking. Yeah, the asking was five 525 hours, but they got down to so when we originally went to go see it, it was 650. gone down to 600. That’s when we saw it at 600. Then it went down to 550. And then 525.

 

Erwin  

All right. Well, under asking, Well, under Yeah. And then what’s the renovation budget for the main house,

 

Tammy  

it just actually needs some updating. So it’s probably going to be a good, I’m gonna say it still might be about 100. Because they’re going to do the two full units. So typically, you know, that could be 40 50,000. And she might have some extra plans. So it’s a little a little hard to say everything’s this just happened like a week ago. So we do have some ideas, but the ideas are constantly kind of changing. So we might put some extra bedrooms in the basement and so on.

 

Erwin  

Okay, so let’s use 500 for the house. That’s not what she paid 100 for the Reno plus 150 for the basement for the garden suite. Yep. And then just for the audience’s benefit, Tammy knows renovation numbers better than almost anybody. She’s just looking for trying to be extremely exact, versus I would just ballpark something. So we’re talking about contractors too much. Yeah. Jamie’s talking to contractors every other day. Constantly. Yeah, constantly, every other day at a minimum, right?

 

Tammy  

Yeah, because there’s a couple of contractors and I would say we’re definitely speaking every week.

 

Erwin  

And then And then what’s the duplex gonna rent for?

 

Tammy  

So probably gonna get? You know what I’m gonna probably it depends on it’s hard to say right now, because it depends on if we’re going to put some extra bedrooms in the basement or not, obviously, that’s going to change things. So assuming all of that I’m gonna aim for maybe about 2000 On the main unit, you’re gonna have the main unit plus the basement, and then maybe 18 For the upper. And I probably match the garden suite to the main just for argument’s sake right now.

 

Erwin  

Sorry, I have 550 800 a month in rent. Okay, okay. Hang on. I need the calculator again. Alright, so 5800 a month works at two times 12. That’s almost $70,000 divided by, we’re in for about 750. Wow, that’s almost 9.3. The rent annual rent to price plus rental ratio was about 9.3, which is extremely high. So this is gonna cashflow really well.

 

Tammy  

Yeah. And you know, the other thing I’d like to add to is that, you know, every investor is a little bit different on how they run the numbers and their risk or comfort levels. And so on. This time around. I know that Emily wanted to be like, super conservative on our numbers as well. So we knew going into this that our big thing that we wanted to look for was going to be definitely that third unit. We wanted the third unit, whether it be in the house attached to the house or detached in the garage, right? That was key for us.

 

Erwin  

So how easy was it to find this type of deal like six months ago?

 

Tammy  

Yeah, no, we weren’t finding a whole lot six months ago, six months ago was definitely pretty tough. I remember looking at properties to, you know, pencilled in that date with the, with a, an investor to go out, look at the properties, and there’d be maybe two. And one of those two I knew probably weren’t going to be great. But getting out there and seeing houses was nice in itself. But yeah, and we’re now I just went out with another another great client of ours, Coach went out with him just recently. He’s ready. So he’s, we bought last year, and he did a duplex. And he got all his approved permits for a garden suite on his Hamilton property. And so we weren’t gonna get back out there and look again, and I was looking at the list to go through and I probably had about a dozen to choose from and then from there, I just really shrunk that list up so I think we ended up seeing about seven properties that day. And we were looking to particularly for garden suite potential properties for sure. And they weren’t they weren’t a winners once we get there and you kind of measuring things out of course, it’s a little bit tough, but just the fact that they were though they had the listings to go look at was

 

Erwin  

so you know how to measure for you understand zoning and setbacks and all that.

 

Tammy  

Yes, and I’ll be honest, I’m definitely still Yeah, as far as garden suites still learn learning like I don’t have it all completely memorised. But I do have my cheat sheets and I’m ready. Definitely,

 

Erwin  

again, oh, hang on one second, Tammy against being modest. Please go pull. If you know 10 agents, go pull them. Ask them what their zoning requirements are for the garden suite see me know the answer. Because I don’t even know the answer.

 

Tammy  

And then duplexes Yeah, definitely know about this, Tammy,

 

Erwin  

you’re the change your name. Again, like you know, famous Mandy Tran, to me knows, zoning better than any other realtors he’s ever met. So there you go. Talk a little bit of the buy side. the sell side is really interesting in this market as well, like we’re recording this on late August 2020 20. Like, for example, like since the pandemic started, it seems tend to properties are way more difficult to sell, they wouldn’t sell they’d sell at a discount. And I almost wonder if we’re seeing that even more like vacant properties are selling for a significant premium over tenant properties. Just kind of wild. Any insight into that, like you have experienced in this as well. Yeah.

 

Tammy  

Yeah, definitely like when I would say when the market was at its peak, where we talked about that right earlier in the year and 2020 20. Honestly, I don’t even know if it mattered to how much you had tenants. It’s always better to not, but that a little

 

Erwin  

bit, you get a bit of a deal with

 

Tammy  

the tenants, right? So but when the market started changing, sorry, started changing, we started really realising the importance of when we didn’t realise it. But we knew the importance of vacant possession. And it was massive, I would probably say that if I had somebody sell a house earlier on with tenants, that it would have had to been discounted, but people were going to take them. I think there was investors out there that are obviously being sneaky, taking them and then Cash for Keys. And I shouldn’t say sneaky, but they’re doing Cash for Keys, and they’re doing the things they need to do to remove the tenants. But we would see that a little bit more, but then

 

Erwin  

let’s gloss over that. Okay, homeowner, landlords, whatever you are offering money to tends to move out, and that removing, you know, for me to get paid someone offering me money, I’m not often offended. Especially when we’re talking about 1000s of dollars, 10s of 1000s of dollars.

 

Tammy  

Right. And so those might have been some of the means of what people were looking at at the time to be able to get a property even though it had tenants at it in it. And then let’s say they were paying, for example, you know, at the peak with vacant possession might have been over a million dollars for these duplexes, where if they had tenants in it, maybe they were looking at like 900 or less, where you know, what, if you’re in a slower market right now, and you have it vacant, you’re going to be least similar to that and or do even better? So it depends because it was a little bit of a challenge in a game like, you know, do we sell some people or do we sell it at the peak, even though as tenants but then they felt like they were taking a loss because it was selling for lower because they had the tenants in there, then you take the time to get the tenant out. But during that time now the markets changed and the market started dropping. So there was that little bit of challenge obviously, we did have a client though recently where they had to remove the tenant. It was a troubled tenant, they had to remove it, it was not gonna sell it was gonna sell no matter what market you put it in. Right. So we definitely had to go through those those challenges with that one,

 

Erwin  

right. So like we’re seeing significant discounts. If the property is tentative. Like for example, I believe you sold the property for 10% more than the comparable because it was vacant for 10% more than the comparable that is tenanted that’s insane.

 

Tammy  

Yeah, yep. There was another property we sold recently where the upper tenant had decided that they were going to move out they were moving into Do another one of the same landlords property, but larger. So that was all great. But it became vacant. And it was a game changer. It was hard chopping it around at the time, but the tenant and once the tenant was gone, who sold? It’s crazy.

 

Erwin  

And again, it’s not always like this folks like I’ve sold. I’ve sold it into property before but I had wonderful tenants there, they already already leave there to give notice, that’s probably partly our trigger for selling it. They are wonderful to work with. Even our photographer said the same thing. Our photographer said, normally, I won’t shoot tenants properties. But he said this was great. So

 

Tammy  

the other key thing is, if you have a tenant and they’re paying pretty good to great rents, well, then that’s fine. And they’re good tenants, then yeah, there’s no problem there. It’s obviously the ones that are troubled tenants or tenants that have wrecked the place or

 

Erwin  

are denied access to the property for people to see for sale. Perfect. Yeah.

 

Tammy  

Little Red Flag. Yeah, yeah, that’s awesome. I just heard a story recently. Can I just say so real fast. I just heard a story of of a property that there’s a gentleman trying to sell a house, it’s exclusive right now, because he refuses to try and put it on MLS. He said that the tenants that are there right now are not only refusing, but when they put a lockbox on the house, they took a torch to it. And they melted all of the numbers on the front of the lockbox and nobody can open and get in. So there’s some some crazy stories out there. Okay, so that’s the

 

Erwin  

scary part. No, because no, you’re

 

Tammy  

right. It is good to hear that kind of side. But yeah, for the most part, knock on wood. We’ve been great. We really, really have. And we’ve been and and I think for a couple of reasons why we’ve got good tenants is one, we’re really good at screening them. Or we’re really good at helping our clients learn how to screen them. Or two, we refer them to great property managers that do tenant placements. And these are people that we trust as well. And then they do well. So all in all, for the most part, I mean, it’s just a small handful that we’ve had to encounter. Some of these other stories have been other longtime tenants that have been in and maybe the landlord could be absentee who knows what the story is right from everybody else. But I mean, if it wasn’t so great for the most part of it, then the money would certainly have to be so great to have to put up with all of that, right? So obviously, there’s a big advantage,

 

Erwin  

right? There are some bad apples out there. But there’s bad apples and everything. That’s my screening is incredibly important. And we help our clients with that. Or we hand them over to property managers who will do who did the screening for them. And that generally is a good experience. It’s considerably better than what I see amateurs do. And just for as an observation, with even with a bias even though I am biassed our clients, their tenants are typically better, even if they don’t use any help. Their tents are generally better than what we see out there from other landlords. Yeah, we’re just going to be way pickier. I think our systems might help. To me any final thoughts? I know, I’ve had to do for a while

 

Tammy  

there, that’s okay. Um, I just think that if anybody is out there, and, you know, thinking about it, and wanting to get into real estate, you know, call us and make that connection. Because I find that, you know, we do, we do a lot of meetings, and we do our webinars, and we do all this kind of stuff. And a lot of people think that we’re putting it out there saying, oh, let’s do a one on one, call me. And it’s just all 100% Just based on sales, and I get why people would think that with all the businesses out there, and that that’s how it goes. But just starting with that connection, and contacting us, and having those conversations to get the ball rolling, because, you know, we got somebody like Joe Costanza, who’s, you know, 24 when he started and you know, he had a real fire under his butt, he was ready to get going. But, you know, for most of us, we look back and wish that we had done that and wish we had started. And at any age myself, I was 40 You know, when I started as well, just getting out there and getting started and get talking to people and then get to the point where you’re looking at properties and learning and surround yourself the right people. It’s just so important and so key because, you know, I remember being 20 and seeing somebody who have a friend like a boyfriend’s mom’s friend who had investment properties, thinking, that’s smart. That’s what you need to do. And then I didn’t do it. I’m like most people I didn’t they didn’t do it. So you know, if you’re nervous, you know, call us they’re rude. We’d love it. We’ll talk about

 

Erwin  

real estate. Love it.

 

Tammy  

I will talk about that. And I’ll talk about everything else too. But yeah, I think that I think that’s just a really important thing for people to take away and just make sure that they know that, you know, it’s not as scary as it needs to be and call us and just have that that initial conversation is, you know, call someone you trust and go from there.

 

Erwin  

Yeah, and I think hopefully people pick that up as well. We’ve never seen turnkey duplexes for this cheap before. They’re so cheap. It almost doesn’t make sense to buy something that needs renovation, because the rent is gonna cost you 150 For the basement. Yeah, why not just buy something something that’s already turnkey, is partly about the turnkey properties is they paid a lot less for the renovations that we did. This just with inflation, you know, to me just makes so much more sense to buy turnkey so it’s easier than ever to be a real estate investor.

In my opinion. Yeah. Awesome. All right. Thanks, Tammy. Thanks

 

Erwin  

so much for doing this.

 

Tammy  

No problem. Thanks, guys. puppies.

 

Erwin  

Puppies. Awful quiet.

 

Tammy  

Oh, yeah, the kids have all have are all occupied out there. She’s a puppy so she still sleeps a lot.

 

Erwin  

Go enjoy your puppy.

 

Tammy  

All right, thanks. Good bye, guys.

 

Erwin  

Before you go if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already then sign up to my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s much improved demonstration over the one that I gave to my cousin chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself, I got into real estate for the cash flow. But with the rising costs to operate a rental business, it’s just not the same as it was five to 10 years ago when I started there are forgive the cash flow reduces your risk. The more you have, the more lumps you can absorb. And if you have none, or limited cash flow, you’re going to be paying out of your pocket like I did on a recent basement flood at my student rental in St. Catharines. Ontario. If you’re interested in learning more and register for free for my newsletter at www dot truth about real estate investing.ca. Enter your name and email address on the right side. We’ll include in the newsletter when we announce our next free stock hacker demonstration. Find out for yourself but so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell I love teaching and sharing this stuff.

 

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**Transcripts are auto-generated.

 

Erwin  

Greetings, everyone. Welcome to another episode The truth about real estate investing show. And there is literally so much going on in the world right now. And what often comes back to me practising gratitude that I am Canadian. If you don’t believe me, ask our friends or ask your friends and we’re a family in China, Pakistan, Sri Lanka, Russia, Ukraine, and of course, even New Zealand. If you can believe it, New Zealand, a country with a population of only 5 million people has a higher average house price than we do here in Canada, hence, they’re experiencing massive brain drain people are leaving the country, talented people are leaving the country. And that’s usually a bad thing for an economy when smart people you know, for example, like doctors and leading entrepreneurs when we’re taking their talents and their job creation elsewhere. That’s bad for an economy. Hopefully that hasn’t happened here in Dublin, Ireland, over 100 people waited outside in line, a house for rent one house, there’s my house for rent 100 people waited outside to view the house thanks to inflation, rising interest rates in the inability to raise rents to match rising costs of living thanks to rent control, Ireland serves as a sneak peek into what we may run into as we to operate under rent control. And hopefully this is not a feature we have to look forward to, in Ontario, in Canada might imagine anywhere else, where there’s rent control, and rent control provinces with lots of growth. You know, like BC, for example, like Nova Scotia, for specifically for Ontario, the smart Prosperity Institute just produced a report stating that the housing shortage in Ontario is 471,500 units. 471,500 units is how much the current shortage is. And 1,034,900 new units are needed to keep up with demand over the next 10 years, for a total of 1.5 million units. So we need 1.5 million units to be built over the next 10 years. Unfortunately, the government also paid for a study to be done. And there’s only going to be 700,000 new homes to be built over the same those same 10 years. So again, this is revisit the supply versus demand demand is there for 1.5 million. And supply is going to be less than half of that as 700,000 new homes to be built over that those same 10 years. Of course, the news really gets worse because if you’ve been following the news and speaking to builders like I do, I understand I’m friends with lots of builders, and who are part of builders associations, you’ll know and also it’s in the news, you know that many projects are being paused, delayed or even cancelled. So even less housing based on the current news is being built. There’s lots of unknowns going forward. However, here at iWin real estate, my coaches and I are staying on top of economic data. And that’s proven really helpful. I’ve mentioned a few times on the show, we haven’t had any clients with experiencing closing issues, because a lot of things they just worked out that we did. And it’s nothing like we’re seeing out there in the market. For example, we’ve had lawyers on the show, who described their regular retail consumer type real estate clients are having all sorts of problems closing on property, their appraisals are not coming in, and they’re not able to close because they don’t have they cannot come up with the downpayment necessary to come up with it for the shortfalls and appraisals, since the market has dropped. But anyways, we’re staying on top of things here. And thankfully, it’s worked out really well for ourselves and our clients. I’ve mentioned before that Terry and I, we ordered our appraisals on our properties for our refinances back in February. And thankfully that worked out that timing worked out very well. I’ve also been talking to people like my neighbour who works for a major consumer products company, they distribute and sell many products you have in your home, he specifically works in supply chain management, from what he can tell the Americans are about four or five months ahead of us in terms of economic terms, as in, their consumption is down, they’re buying less. You’ve also been well, if you fall, I like to read articles on corporate earnings. So for example, Walmart, their sales are down as well. People are consuming less instead of the article. She the CEO mentioned how they’re seeing sales down on, for example, four gallon jugs of milk are being replaced by sales of two gallon jugs of milk. So people are downsizing but they’re buying anyway. So the numbers don’t look good. The Americans are likely to four to five months ahead of us economically. And the theory would be is because they only like half locked down versus Canada as a whole country locked down pretty good. So they’ve had they’ve had more freedoms. So Canadians are still consuming heavily right now. So that’s my own experience. I was just in Blue Mountain Village and up north very popular recreational resort style area in north of Toronto, and it was absolutely packed A parking lot was packed, the hotels were packed, the restaurants were packed, the bars were packed. My point is, is that because Canadians were locked down, we’re taking that we’re taking our time now to enjoy our summer enjoy our freedom. And then my guess is in a few months time, we’ll start seeing Canadians start consuming less, you know, because stuff is expensive, might start seeing some pain in terms of job losses, for example, for just announced 3000 job cuts this week, they’ll mostly be in North America, Canada, USA, and I don’t see how we as Canadians avoid a similar fate. But please understand, I’m no fear monger. I do fear in the short term. But I’m bullish in the long term for real estate, am I investing and my stocks and my crypto I don’t most of all of its down this year. Hence, my team and I will be summarising all of our research and how we and our clients are taking action on this current market. Some are selling, some are buying. We’ll be sharing what deals look like in this market, and to prepare and also how we’re doing what we’re doing to prepare to weather the current storms. And we’ll share our own predictions for interest rates, where the market will be going in the short term. At our September 17 Ioan meeting, this will be a first time meeting since our summer break. So we have tonnes to share on what income properties are selling for why certain properties are taking longer to sell what the rental market is doing. Hence, this is a meaning you do not want to miss will be trying through the clickbait and the Bs by sharing what we’re doing with our own money and what our clients are doing with their money. And that’s all on September 17. At our island real estate office here in Oakville. Same place, same time, it’s a Saturday morning, so traffic’s been nil. The doors are open like 830 ish, there is no online option. You do not want to miss it. Understand that this market is the wildest I’ve seen. And I predicted early on that we could easily see 2017 happen all over again. But 2020 is making 2017 look like a speed bump in the road. I think 2008 2009 is a close comparison to what we’re seeing. I don’t think it will be as bad based on what I’m reading from the top economists in the world, and top economists in Canada. And to be honest, we invested back then we did quite well, we did more than survive this cycle. And I think we’ll do more than survived the cycle as well. On a personal side, I’m now volunteering at our local Brazilian jujitsu club during my kids class, I must have ADD, as I have issues sitting around and watching classes, then the problem got worse as we parents were asked to wait outside the amount of class area. Yeah, so it’s a poured beer for parents to do a bore parent, such as myself where he spends too much time on their phone. So what I decided to do was I bought a uniform, and I volunteered. So now I’m an extra set of hands and eyes and ears to make sure the kids don’t hurt themselves. Plus, you get to observe the instruction or close and provide some pointers to the kids. The best part is I’m learning the curriculum, so I can practice the kids outside of class and you know, have more in common with them and spend more time with kids as I honestly work enough as the kids seem to dig it so far. So I’ll guess I’ll keep this up until they’re sick of me. Oh, by the way.

 

Erwin  

Our our September 17 meet up. Link is in the show notes. If you’re on our emails or you follow me on social media, you’ll get the link you’ll see the link there to purchase tickets, clients, of course you go free onto this week’s show. We have with us a young rock star and just stanza who was 24 when we met 24 years old when we met and the owner of the title of the youngest client we’ve ever worked with. He’s young Hustler, who when I met him, he had three jobs. He is an architect by trade. So that was his day job, bartender for evenings and weekends, and a landscaper with the remaining time he wasn’t sleeping. Thanks to all that hustle and saving money by living home with his parents Young Joe saved up enough money for his first investment property. That was back in 2019 January 2019. And now he has five investment properties. Crazy enough he’s made his first million is actually about a year ago, he crossed the million dollar mark in terms of increased his net worth. Hence he’s also the owner of the title as the youngest of our 45 self made real estate investor millionaires of age of 20 I think it was 27 at the time anyways, if someone challenges him will will will sharpen our pencils and figure out the exact age of Joe. Joe is here today along with coach Coach Tammy from the AVID real estate team, my team to give us an update on his expansion project how that went in Sudbury when he was looking for diversification and his lessons from it not going so great. But you know, Joe’s smart and talented hands he bounced back pretty well. He got a gem of an expired listing and Hilton, that coach Tammy helped Joe with that was eventually priced well under market because the property failed to sell. It was rough later found a hole in the roof that could fit a soccer ball through and a challenging tenants with previous orders against them from the landlord tenant board. We talked numbers on this most recent on this most recent deal so have your pens and calculators ready or email us at Iowan at infinity wealth.ca And we can send your coach Tami’s draft numbers. Please enjoy this show. Okay, Joseph what year to be me?

 

Joseph  

2019 2019 you’re how old 24 When we met once you 23 Then turn 24 Once we bought four and then I turned 25 Okay, so

 

Tammy  

you wanted January 2019? Yeah.

 

Joseph  

Yeah, right after New Year’s that whatever that first event that you put on.

 

Erwin  

That’s big event. That was the one on the hill, Shawn Allen for referring you. Yes. Yes. Thank you, Shawn Allen.

 

Joseph  

I was going to like networking events and stuff like that. Prior but Sean’s lives in London. He was doing a networking event in Toronto we loop buyer Byron says by thing I can always always mess it up.

 

Erwin  

Your European

 

Joseph  

I can’t roll in our for my life. Didn’t matter. How’s your Italian? A horrible absolutely horrible my mom is very upset with

 

Erwin  

is your Italian better than his? Yeah,

 

Tammy  

probably my probably better than yours. And I just married one.

 

Erwin  

That’s the show is going off the rails? Why were you going to real estate meetups you you had at the time you had a career in your training. So you’re already making career wise as much money as you could?

 

Joseph  

Yes. But I think I was kind of looking to I don’t really know what I was looking for it to be honest with you. I had a few things that I wanted to I had a lot of money saved up

 

Erwin  

from that wasn’t that much money. It wasn’t more than to notice a lot of money to me. It

 

Joseph  

was a lot of money for most 2423 year olds. It was a lot of money for Yeah.

 

Erwin  

$80,000 Yes. That I worked very hard for but listen to your credit cards now. Yes. really different. Yeah, that’s fair. Yes. It was a lot of money.

 

Joseph  

Yes. Life Saving at the time. It was like my life savings.

 

Erwin  

Yes. But you blood and sweat it before since you were 16?

 

Joseph  

No, like more like right after more like after school kind of thing. Okay, but like still like working two three jobs study

 

Erwin  

for it. You basically never had to date your life. No. Until oh, gee, until real. It’s all downhill from there. To your parents. Yeah, they got you good. till you’re 24 to get debt free. And the new meta Yeah, exactly. Exactly.

 

Joseph  

Yeah, no, I just wanted to kind of I wanted a little bit more for myself. I wanted to have a little bit more ownership of something. And I think the initial plan like in all honesty, the initial plan was to take the 80,000 by Tesla. Yes. Because the shares, right? No, Tesla Tesla car okay, but I don’t know what changed it. I think I had listened to a few episodes of bigger pockets or something along those lines. And that got me hooked up my show. No, I’m sorry. Sorry. I found you later on. I’m sure it all down here. Yeah. And then that kind of got me into it. Rich Dad, Poor Dad, my kind of dad went through pretty traumatic kind of heart attack experience. And then that kind of shifted from there. It was just kind of like I need to do something about this. And that was kind of like November of 2018. And then I started going to like a networking event every every other week. And then stumbled on to Iowa and grew up from there.

 

Erwin  

Like your yada yada your your father’s health scare.

 

Joseph  

Yes. Heart attack.

 

Erwin  

Why was that a trigger for you to

 

Joseph  

he thinks simultaneously as he was having as he had a heart attack I was like really deep into the weeds of reading Rich Dad Poor Dad and cashflow or not cash, not cashflow. tribit and Cashflow Quadrant and all those other books, and kind of still listening to real estate podcasts and stuff like that. And so I think he would just like the connection of the two and just that was just that I was just, I was hooked after that. And it’s always something I’ve always really wanted to do too. Like he’s always really like this like not necessarily in the investment side. But just like real estate in general has also been has always been like a something that really intrigued me. So it kind of took over from there was a

 

Erwin  

kind of, it’s not uncommon. We’ve actually had a lot of people on the show where a major life event usually with their parents that got them really going like really crank the crank up the temperature on their want to hustle to do more quickly. Was it just like you realise like Life is short?

 

Joseph  

I think. Definitely a little bit of that. I really don’t know, I never really I didn’t really take much time to think about it. It was just like, I’ve always been someone that was just like if this one needs to get done, I do it. I don’t really have any second thoughts about it. I just, I’ll learn as I go. So I’d really didn’t learn take time to learn that much about real estate before just jumping in, had the money to it’s not like I was like had to save up that much more to have all the money. I didn’t have all the money but

 

Erwin  

as you didn’t just have not not have all the answers. You didn’t have all the money.

 

Joseph  

But I think I’d have been exposed to real estate or a younger age through a series of different kinds of people in my life and that kind of helped to kind of make the job into it. Yeah,

 

Erwin  

the finding the money piece you actually detailed more now, just a year ago, the last episode. But unfortunately for you, we’ve gained about four listeners, I’m sure like both from 13 investors now to 17. So we need to, we need to spend some time to bring the other four listeners up to speed. Got it. Okay. We did that for them. Hopefully that was worth your time. For listeners will be appreciate that we brought in Georgia to we spent some time to bring you up to speed. And if you’re interested, go back and listen to the episode with George Costanza. This is your third time. Fourth time

 

Joseph  

fourth time. Yeah, we’ve we’ve done a yearly update every year since I started.

 

Erwin  

Okay, so what’s keeping you busy these days? Well,

 

Joseph  

in the next few weeks, I’ll be going to Greece. So that’s really been kind of doing a little backpacking trip for myself in Greece, just I needed a vacation. Yeah, I needed something just for me. I’ve really spent like the last four years really haven’t gone on anything major. A road trip here there been like nothing overseas or anything like that. So I just decided it was time to like treat myself. Um, besides that I’ve been in the last kind of five to six months been liquidating some assets and whether it’s in crypto or in or real estate to kind of make room financial flexibility for the market right now. And to kind of start taking advantage of the market in the kind of the next few months is kind of my projection. I don’t know everyone’s different. But that’s kind of what I’m feeling out right now. So

 

Erwin  

what did you sell off real estate wise,

 

Joseph  

I sold ours. I

 

Erwin  

know, we haven’t sold anything in Hamilton.

 

Joseph  

I have not sold anything in house firm. I’ve we’ve actually recently purchased something in Hamilton. But I sold off a property that I purchased in February, there was just a bunch of stuff that was going wrong with it. And so I decided my budget, my money was better used somewhere else than in something that wasn’t making them money or it wasn’t I didn’t have any sort of time horizon to start making money. And so it just made sense to kind of liquidate and move on to transition those assets into something else.

 

Erwin  

So what got you into Sudbury? What was what was the month? But because this is about 12 months ago? What was when you get inside?

 

Joseph  

When did I get in? Must have been March? It must have been? No, it was February of last year,

 

Erwin  

February of 2021. Yeah. What were you going through

 

Joseph  

a series of reasons I actually really liked the city. I think it’s a great place for investments. But I think the approach that I had was wrong, but that’s a different conversation. I went there just more for the from the cash flow perspective. Hamilton wasn’t cash flowing the way I wanted it to

 

Erwin  

cash flow if anyone wants to do more, more is always the answer. Yeah. How much cash? Would you like more?

 

Joseph  

That’s fair. That’s fair. No, I just wasn’t cashflow in the way I wanted it to. And I was trying to find a market that would cashflow a little better for me. And I liked the kind of future prospects of Sudbury with green energy becoming a major player in the space and having so much nickel up there and whatnot. So it was I think it was more of a nickel play, to be honest with you than it was a real estate play isn’t wrong. No, there was nothing wrong with it nice to actually really liked the city. Like I still have a property there right now. But the it just the renovation that I was doing there wasn’t really going the way I wanted it to. And so I just decided that it was time to kind of cut ties.

 

Erwin  

So this is a trick about real estate investing. It’s not always rosy sunshine and roses, is it? No, it’s not. So where did you find this contractor that didn’t go that went sideways? Fantasy coaches and legal troubles didn’t?

 

Joseph  

Oh, yes, we’re still I’m still dealing with the legal troubles actually, right now. So yeah, not not fun. Do not recommend it. But yeah, I found them through the network kind of through through people that I’ve met down there.

 

Erwin  

Sir, I’m sure.

 

Joseph  

Since found out that there was people kind of certain connections that I didn’t make at the time, that kind of may have changed my opinion about hiring a certain individual or certain company. But nonetheless, I tried to look at it more like a like a lesson rather than a mistake. Right? And so I’ve been really, over the last, probably the last, I’d say five to six months and really kind of analysed since we’ve kind of since I decide to sell it really analysing what What mistakes did I make and how do I avoid them? And how do I kind of improve my process going forward? Whether it’s in the hiring process, or in the vetting process? Or how do I really kind of iron out and don’t have these, essentially these these issues that came up from from this one guy? And it seems like it was just one thing after another with him and that was a complete fault of my own for maybe not vetting them properly.

 

Erwin  

Yeah, there’s a lot there though. Yes, great. Responsibility. Part of like taming I do is we also take responsibility for referrals we make again Oh, I know, I can think back to one contractor that’s had legal issues with our clients. And I’m we’re getting on the phone with him and yelling at him. Like you’ll never yeah is pretty. I’ve never yet I

 

Joseph  

almost haven’t seen you. I pretty much

 

Erwin  

never yelled in the business transaction in a business relationship. Right? I’ve had issues with other realtors and stuff like that. And yeah, people on my team, but still professional, because I still need things to progress. Right? We still need to keep it professional. But yeah, that Jeff guy yelled at him. And he just lied his teeth and everything. So the people that the folks that made the referral to you to general contract, did they? Do you have an escalation point?

 

Joseph  

Did I have an escalation point. And so

 

Erwin  

I got from corporate world, right, it was a big blue for seven years. So if someone in the company, if I’m working someone in the company, and they’re not doing what they said they’re supposed to do, I go to the boss, that’s just how it works in corporate, right, like for when we intervene and make referrals, we’re not their boss, but we’re often their number one referral source. So there’s some accountability there, we have some leverage in the relationship. So if our clients not happy, then we make the phone call, and let them know, we’re not happy that our clients unhappy, right? And then they know, because of our business relationship, like where basically, they don’t have a marketing budget because of us, right? They don’t have to go find clients, because we were making all the refer to we bring them clients. So if they want that St. Say stream of clients to continue, you have to make my client happy. And that’s often not hard. We’ve had many folks come to us because I like working with our clients. So what my question is, like, was there is there an escalation process? Because with us, absolutely is

 

Joseph  

in there? Yeah, there definitely is. I mean, like, even when I have issues, if I have issues with a renovation that I’m doing in Hamilton 99% of the time, it’s coming from you or someone else that is in the group, and it just in through conversation, like it will call each other talk to each other. And it’s like, oh, what’s like, what’s going on with this property? Oh, this going on? Not really happy with this. But we’ll get there. And then all of a sudden, that problem is fixed. And I call Tammy, I’m like, what would you say? Like, why are you what what’s going on? Why you’re getting involved. And but it just is nice, because it was like it was always like there was someone there kind of watching out to make sure that everything was going smoothly. Besides just me, I didn’t have that same experience there. And not to say that there was anything particularly wrong with it. I just didn’t have that. I think coming from an experience here with the group that you’ve put together, where everyone’s kind of family and everyone kind of works together to help each other out. There. I felt it was a little bit more lone wolf. more basic. Yeah, yeah. But just there wasn’t a network that was set up that is set here. And so I think just through a fault of my own knots, assuming that the process would be very similar, I didn’t do probably a well enough job of kind of understanding what needed to be done at the time.

 

Erwin  

But and what your experience isn’t different than what was No, I

 

Joseph  

imagine, most people have a similar experience, if they’ve had a contractor relationship go south,

 

Erwin  

like most Realtors offers offer basic services for join a search, they can book your showing appointments, open lock boxes, you know, ask you if you’d like the property or not, right, prepare all the paperwork and stuff like that, you know, it’s just for Tammy and I, we this is how we’d like to like to be service. Like as realtors, we’re paid a lot of money. Right. So I think a high standard of care is appropriate, including yelling at your contractor, if we have to call him threatening their business.

 

Tammy  

You know, I don’t even the vetting processes, it’s can change. And you have to roll with a little bit too, because, you know, even the contractor that we had, where things had went south, we had multiple people working with that person who had success as well. So it was really hard to know. And sometimes those things happen. So I think a big thing is to know when to recognise it, and when things need to be addressed and fixed or walked away or that kind of stuff, which you know, you did afterwards. I think that was that’s important too. And to know that it’s okay to walk away sometimes from things as well. failures. It’s

 

Joseph  

yeah, that was that was probably the biggest challenge for me was walking away, not because it wasn’t a smart financial decision, because I made money on on the sale. It’s not like I didn’t make money on the sale, even though we were only halfway through the renovation. It was I think there were a lot of it was there was a lot of ego involved. I was really kind of caught up in what is my image? And what does it look like if I quote unquote, fail? Yeah. And that held me back. So these issues are coming up back in November, and I realised that we close in August, renovation started mid August. And by the time November hit, I kind of taken like a month away and my brother’s wedding was in October and it hadn’t really gone up for like probably about five weeks. And then I started going up pretty consistently in November. And there was no progress made since mid September. And so I was going up every single week to and no progress was being made every week. I mean, like maybe one thing here or there but like in all honesty like I do more on weekends at my property than this guy did in the whole week.

 

Erwin  

And they have a crew.

 

Joseph  

He has a whole crew exact, and that’s his only job. Yeah. So that’s how they make a living. That’s not how you make a living.

 

Joseph  

Right. And so I think I kind of got caught up for probably about two to three months, not wanting to sell more from an ego standpoint. I wanted to, but a lot of it was I wanted to push through for myself, I wanted to kind of overcome the obstacle. But the thought that was rolling through my head is maybe it’s better to sell, maybe it is a good time to sell. And I was really battling with it. Like I was researching prices, what can I get for the property? What would be? What would be my exit? How much kind of leeway do I have before I start losing money on this deal? And a lot of not wanting to sell was because I didn’t know, I was worried about how people would see me. And then I think I think it could have been a conversation that we had over the phone at one point. I think you mentioned like your like you mentioned something about, it’s okay to make mistakes or we. Yeah, exactly. And it’s okay to kind of let go if something’s not working out,

 

Erwin  

like my crypto stocks. I wonder if you’re talking about? Sorry,

 

Joseph  

no one I sold some crypto to back in February. Yeah. And so I think realising when I finally came to terms with it’s okay to kind of make them realise that you’ve maybe made a mistake. And that the important thing is how do you adapt from that mistake? How do you kind of manoeuvre when you have made a mistake. And so looking at the property, not really seen a time horizon when this renovation would be done already firing the contract or having nobody out there, I realised my money was spent better somewhere else. And so keeping it in what I would call a dead asset wasn’t really an option anymore. And so that’s when we kind of started the process of selling.

 

Erwin  

Thank goodness, you didn’t lose any money.

 

Tammy  

That’s what I was thinking.

 

Erwin  

It was tough. It’s tough when you’re losing money in real estate, because it’s leveraged.

 

Joseph  

I can. Well, that was that was, I think that was the biggest fear. I mean, we’ve had the conversation, I think I’ve had conversation with both you guys about that particular situation we had went to sell it and then two days was coming down and market was, at the point when we were selling it was beginning of March, we just have that huge run with February, I had sold it at a premium price off market was gonna make a good amount on it wasn’t really upset about it a day before we closed, he put a lien for basically the full price of the contract that I have already paid him 50% for. And so that kibosh the deal. And for the next kind of three months, I proceeded to hold the property while the market was falling God. And we did some legal manoeuvres to be able to sell the property. And then luckily, the same buyer was still interested in buying it. And I said, I’m only selling it to you if we’re selling it for the same price. And they said that’s not a problem. So I lost a little bit in the holding costs. And then they got a realtor involved to make sure that they were secured. So I lost more than I would have gained if I had sold it back in February. But all in all, it wasn’t a loss.

 

Erwin  

Well, how would you rate your stress on

 

Joseph  

this deal? Oh, very high. Very, very, very high. I think for about three to four? No, probably since October from August to April of this year. I don’t think I slept very well down. Yeah, that was a long time. I’m doing I’m doing a lot better now. But so that’s all it matters.

 

Erwin  

And how far was it the drive?

 

Joseph  

Average out four hours, four hours each way? Okay. Depends on how you drive really like three. But if you stop for lunch and stuff like that three each way. Oh, mine the drive. I think there’s there’s a lot of young people here. But if you have kids, and you’re doing this, but I think there’s a lot of young people who don’t have a lot that they’ve saved up where their time is not worth as much. And that drive may be worth it for them to go out and buy a cash flowing asset. Because they may not be able to afford anything in the GTA and I think that’s fine. I just think you need to approach certain areas with certain strategies, you

 

Erwin  

can just partner with you. They don’t have to do everything themselves. That’s fair. Yeah. This this whole thing, like people like opposed to partnering, because I’m like, I’ve told I’ve told him to the family, you know, before the pandemic, for example, I was like, I have like cousins, so their brothers and like, you know, you too can buy like a 4000 square foot house for like under 3 million, versus you’re both gonna go spend about 1.5 and have way less square footage.

 

Joseph  

I think a lot of people like the pride of ownership, especially something is just there’s

 

Erwin  

I have a small ego some days. Money has been cheap. Yeah, I have no limit.

 

Joseph  

I would agree with that.

 

Erwin  

So it’s actually been it’s been in the news lately. Really? How bad friends are for example, Well, that’s why the only way for an average Canadian to afford rent is to share two bedroom with somebody. Yeah, for sure two bedroom apartment someone so I don’t know understand to me there’s no difference why two people when co venture on a property, right for me, I’d rather co venture with someone and buying like Hamilton an hour away versus four hours away. Right? And then I can divide the work down the middle. It doesn’t have to be Hamilton, it can be Oshawa, it can be Barry, whatever, right? My point is, I don’t wanna drive over an hour. And again, if I partner with someone, we can split up the work, you do the maintenance, I’ll deal with the tenant type stuff. You know, I mean, that kind of division. We don’t see that among our clients. You’re typically married couples, where one partner deals with a tenant that one deals with the tools and the maintenance. Right. So I don’t see why two people who aren’t married can’t do that.

 

Joseph  

I would agree. I don’t have anything to add to that. I think you’ve said it. Well,

 

Erwin  

wow. time you see something you

 

Tammy  

JV with Joe? No, it’s true, though. It’s it? No, it is good. It is good JV with Joe

 

Joseph  

coined a new term. To get

 

Tammy  

into the market, though there is a lot of people or maybe that you’re established or maybe some people can get on title. Some people can’t like it is a good good way to get in the market for a lot of people. No 101 was a JV as well.

 

Erwin  

And we have clients like just buddies who got together and bought a house

 

Tammy  

and mobile JV later, I mean, but what’s wrong with JV in first two, right? Yeah,

 

Erwin  

as long as our hard working people, like your hard working folks and hard working people,

 

Joseph  

I think it also comes down to what is both parties bring to the table, and like sometimes just the typical money, right, like the money partner and the working partner or the active partner, that relationship works, but sometimes you also need like, it depends on the size of the deal and the type of deal, like to active partners can be just as beneficial. But yeah, I see no issues with partnering. I’m actively kind of bringing on partners and looking for partners and and speaking with people about partnerships all the time. Yeah.

 

Erwin  

So the separate properties having a headache.

 

Joseph  

Yeah, your first one went well, the second one didn’t go so well. Okay, and you’re keeping the first one. It’s I’m keeping it there for now. A cash flow is fine. I don’t have any headaches. I haven’t driven there in six months.

 

Erwin  

Is it still there?

 

Joseph  

It’s it’s yes, it’s still there. So it’s just if I ever need to liquidate something, it’ll likely be the first one that goes.

 

Erwin  

So this is February 2022. Would you would you liquidate it, or do you keep it

 

Joseph  

if I knew what the market would have done right now? Yeah, I probably would have liquidated I kind of I sold in February not because the market was at a high I’d like to say that I like had enough foresight to say Oh, now’s a great time to sell. The reality is I was just fed up with property and I sold and I just got lucky enough that I sold when the market was at a high I’m surprised the

 

Erwin  

buyer took it still.

 

Joseph  

I will not comment I don’t know who’s listening. Yes. 17 people I know who includes that.

 

Erwin  

Give me your name is not that Google because there’s there’s enough stanzas out there that that makes you heartless

 

Joseph  

that a compliment or is that

 

Erwin  

just have names like You’re like I say I met you in like a thing. Like when I go to LinkedIn like Joe Costanza, like, damn, there’s like 40 of you in Toronto. Like, which one that I talked to? Like that. So your current deal wasn’t the easiest. But that’s a good point. There’s a good story to that is not easy deals are often the best deals. We might bless the last ugly house I bought mouldy basement contractors wouldn’t go in because there’s cockroaches. Right? I asbestos knob and two, I can I’m just shocked the bank lent me money on it.

 

Joseph  

Well, you did bank finance loan on that. I gotta

 

Erwin  

be lender. The lender called me the day before closings. Like did you know you have asbestos? Did you know you have knob and tube wiring? Right? Yeah, I did this for a living. I can’t believe I still got my mortgage. Because most lenders will not touch that stuff. Really? I didn’t know that. My basement was leaking.

 

Joseph  

Well, yes, I was in that basement. I know. Yes. I did the drawings for you on that on that deal.

 

Erwin  

Wait, did your mother say something about that house?

 

Joseph  

My mother? Well, yes.

 

Tammy  

She was faith in her when? Yeah.

 

Joseph  

Because I think I FaceTimed her while I was in the basement with an stupid made no mask on black mould on the wall.

 

Erwin  

Just work really.

 

Joseph  

They painted over it. It was pretty bad. It was pretty good. Yeah, it was pretty bad. I probably shouldn’t have been down there. But I was down there anyway. I’ll find her in 20 years.

 

Erwin  

But it wasn’t pretty was it? No, it was not pretty. Your mom would never invest in it.

 

Joseph  

Ah Uh, maybe now, but not then. She’s come around. She’s

 

Tammy  

coming around John’s place. I think

 

Joseph  

she’s I really pushed your boundaries. Yes.

 

Erwin  

But yeah, I had to deal with a lot of crap as a student rental too. So the deal with that student rental through the pandemic tends bail. Right. I think too much five to seven times bailed. Students. Yeah, yeah. Now it’s all turned around. Because I’m finding out that rents are now six $700 a room?

 

Joseph  

Yeah. Well, yeah. That’s it’s a it’s also a killer area like you are right beside this.

 

Erwin  

Yeah. But it wasn’t easy. No, it was easy holding this whole time. But I paid 400 grand for it. Now. I’ll be in humongous demand come next rental cycle. Right. Yeah. Because I hear like, even made the news. How little rental supply there is for students. Right. So payback time. But yeah, hard houses are not easy to finance. You didn’t want to go in the basement. Your mother would probably not want to go to my basement if she knew. I think I took my deal over yours, though, because I didn’t have a tenant.

 

Joseph  

Yeah, I would have taken your deal over mine to the I think mine was a little bit of a headache. Yeah, from day

 

Tammy  

one. Irwin tried to buy it off of you. Half a

 

Joseph  

dozen $5,000. So a big commitment

 

Erwin  

to excuse me, came down when I heard there was issues that the tenant,

 

Tammy  

no, no, this was that was a score. We just for the record, we do call it John’s place. So if anyone’s hears this, or if you go on Joe’s Instagram, it’s John’s Thomas the tenant. Okay, so what have we

 

Joseph  

purchased the property back in? November is when we closed or when we when we offered on it. We’ve got an accepted offer. We’re supposed to close in January, November 2020 2021. We’re supposed to close who you’re supposed to close in January. And they were kind of going through

 

Erwin  

Washington will bring us back a little bit. Okay. The host previously failed to sell that or not. Okay, so

 

Joseph  

I had found this property listed on the MLS back in November of 2020. I went to go see it. I offered off market on it, when they taken it off their offer Express and that fell through. And then every kind of two or three months. Why did it feel to sell the market was on fire? They were they were trying to sell it for 850. Back when it was probably worth like 600

 

Erwin  

or 600. It was that bad? Well, it was

 

Joseph  

duplexes at the time, were selling for around 800. So they were trying to sell it as a legal duplex, which it was at 800. The problem is it needed 200 to 300 Depending on how much rental you wanted 200 to 300 of work. So no one’s gonna buy it for 800 or whatever they listed it I think it listed initially at like 850 At some point at one point. So I’d offered on it. Even when they’re asking when their offer fell through at 800 or whatever when they’re listing fell through at 800 I offered some really probably insulting offer at like 600 or 650. Obviously, that got the client and they ended up selling it back in or they ended up getting an accepted offer on it at 750 Back in a must have been mid mid 2021

 

Erwin  

Sorry, except to that how much at 750. And they didn’t take it and run this sale

 

Joseph  

fell through. So I was checking in on this property probably every two months I would call the realtor at some point I ended up getting the owner’s number and I was calling either the realtor or the owner like every two months, just like what’s going on with your house are you guys selling and then for a little while I kind of went off market and I thought okay, so they they told me that it sold it must have closed and now it’s done. So I didn’t really think anything up but then I drive past the property every time it was a shitshow so I really wanted to see what they were doing with it just out of pure curiosity and the roof was absolutely mangled. And no one had done anything about the roof and this is like six months so it’s stuff growing on or whatever it was no like there was little holes in the roof. There’s holes in the roof when they when we ripped up the the ashphalt Yeah, there was like holes. I got pictures I’ll show you after there was like, very large loads, like, like soccer ball size holes in the like in the sheeting.

 

Erwin  

Oh my god. Yeah, you’re gonna need 50 for that. I know. A lot banks when finance that there’s pressure finds that

 

Joseph  

nobody found it. It was anyway, so yeah, so then I think I had reached out to them at one point because I’m like, Okay, this thing definitely has not sold yet. And this is must have been like October of 2021. And I got into kind of a little bit of a yelling match with the with the realtor. At which point I was like, Okay, I’m just getting a Tammy involves and no,

 

Tammy  

I’m gonna stop here and tell you what happened. Okay, you tried to do the deal without me. Just fine. Okay. You tried to do it? Yeah. But there was no what happened? was they were going to use one of their other realtors to represent you because they didn’t want the selling agent to represent both of you. So they said, I’ll bring in a realtor and you said, no, no, no, I have a realtor. I was only going this way if I was gonna get a deal, and No, you weren’t gonna have a Realtor you don’t know probably right. Yes. So you’re like, No, no, I’m gonna bring in my own realtor. So then I call him like, oh, so yeah, he kind of talked with Joe. And they’re like, yes. And that’s where we went. That’s how I came in. Yeah.

 

Joseph  

And then, as you call me, yeah. It wasn’t on market. So I figured I’m gonna try for a market sale. And they were actually just about to list it. They were just finalising some paperwork to get him out with a tenant tenant. And he was so close to being out. It was so yeah, it was really close to being out.

 

Erwin  

This was an unethical thing. He wasn’t when he got terrible tenant,

 

Joseph  

he did not take care of the place. I think the owner of the property didn’t take care of the place either. So between the two of them nothing was getting done

 

Tammy  

very very I mean, just that when the land when we found out the landlord tenant Board gave him a warning that if you do any of these the list of items, you’re gone and it’s instant, and it was smoking in the property smoking on the property, obviously not paying rent it refusing the seller, the owner landlord to come to its own property. And swearing at people on the like, there was a massive list that he couldn’t even like look sideways. Yeah, I think

 

Erwin  

the yellow people on his lawn you don’t get up? Yeah.

 

Joseph  

Well, no, it’s not yellow people on his lawn. It was yellow people who are trying to get into the property to view the property.

 

Tammy  

Not to mention it a bat by the door. Yeah.

 

Joseph  

Anyway, so.

 

Tammy  

So we did agree on bacon possession? Yes. Well, it’s too close in January.

 

Joseph  

We’re supposed to close in January. He didn’t. He didn’t leave. They extended the the court hearing date to

 

Erwin  

did he

 

Tammy  

agreed to leave? Did he not even agree, but he was supposed to leave a certain date because he instantly screwed up off the list, obviously. And

 

Joseph  

the court had said, you’re out by January 6, January 7, so

 

Erwin  

we slipped up. So now they have an order, you have to leave.

 

Tammy  

And we found one judge that said, Okay, we’ll hear you out again, we’re going to extend it. And so we extended our

 

Joseph  

and then yeah, so then the closing date, the closing date got extended to right after their next hearing, because we were like, Oh, for sure. He’s gonna get kicked out and already been kicked out before. Like, he’s already broken all the rules that he said he wasn’t gonna break and he’s not paying his rent. So I mean, like, add all that together. They gotta, they gotta let them they gotta let him go. The court hearing finishes, they’re like, Okay, we’re gonna issue the paperwork for you to leave. We’ll just find that we’re gonna find a date that works for us, and we’ll get back to you. So I go, okay, February, I’m counting 60 days is what they give you. Like most of

 

Erwin  

paralegal involved, too. Yeah, there’s legal. There’s been done on the

 

Joseph  

on both sides. Yeah. And so I’m like, we’re talking, I’m like, Okay, well, 60 days from the date that he’s supposed to close. Okay, let’s push the closing date. 60 days out, they have the according to the LT landlord tenant boards website, maybe I’m wrong, but they need to find hearing a decision in 60 days. So let’s go 60 days. So 60 days comes in passes. And we’re supposed to close on the property. And he’s still there. And word from nobody’s told us anything, which, you know, I didn’t expect anyone to tell us anything, because we are not are not the owners. But still, like, I would like to know kind of what’s going on with the process, couldn’t get in touch with anyone’s lawyer to figure out what was going on with the process. No one wants to get involved. Closing Date comes again, closing it comes again. And so we had a conversation, we wanted to extend again, and we had a conversation with the seller who like if you’re not going to sell on, if you’re not going to close on this place with the guy in there, then we’re just cancelled, we’re off of the deal. And we’re just going to sell another property.

 

Erwin  

So another property of theirs.

 

Tammy  

They needed to Yeah, they needed something. Yeah. And this was the one they were going to sell. And since it obviously was kept, you know, in for a long, longer, longer, longer. They finally said no, either you’re gonna have to take it with them or the deal is dead, because according to our offer, it allowed us to extend, extend, extend, and then somebody extends extensions. And then, you know, that was at yet agree. And they said, No, that’s enough. So he had to come up to the second possession. Yeah, big concession. Exactly. So he had to make a decision.

 

Joseph  

I mean, I had to make the decision at the time. And the reality was when we close on the property, we had it under contract for 745. And it was probably worth in the nines, really low nines. Well, you

 

Tammy  

have to figure at this point, the markets going up and up and they know that too, right?

 

Erwin  

Oh, sorry. What did you get accepted for?

 

Joseph  

We got to sell it for 745. Okay, legal duplex Sorry,

 

Tammy  

sorry, but it’s worth noting that that was October November 2021. Things are selling for like a million now. We’re into the early 2022 and everything selling for exactly

 

Joseph  

yeah, like that. That property just as it was with the shitshow that it was probably should have sold for around 900 When we bought

 

Tammy  

and sold it with that tenant made money because the market was going nuts. Do you remember that a soccer ball size holes in the roof? You can see that you could? Well, it was Yeah, from the street. We had a home inspection. Yeah, like we

 

Joseph  

knew what we were we were on the roof that had the holes in it. On the roof, just in step in the halls. So Joe ticket, yes. So I decided that we were going to close on close with him in it. And then the next day, and then the potential cut bait decided to fish. Yes, exactly. And then proceed to the next three months of me dealing with the landlord tenant board trying to get him out. And still landlord 10 board had not given us an issue had not given us a date. And so 120 days pass, and they finally give us a date. That’s a month from then by that point I had already signed with him and then 11 saying where I needed to start construction at some point the market was kind of doing the dip, and I needed to figure out okay, what are we doing with this place? Yes. So we did a little bit of cash for keys with the property to get them out. And then we started renovations in July.

 

Tammy  

So Joe did, did we try

 

Joseph  

catch Ricky’s earlier? No, nobody tried to catch it wasn’t it wasn’t I was waiting. I’m like, okay,

 

Erwin  

16 on the place.

 

Joseph  

I offered. I was like, Hey, listen, we’ll like we’ll, we’ll pay a little bit more if they do Cash for Keys. I got no problem. They’re like, No, no, no, we’re already in the legal process. We shouldn’t we should have them out soon. Obviously, closing day comes, he’s not out.

 

Tammy  

So even you took ownership on closing date, if Joe’s automatically offering Cash for Keys, except the landlord tenant board, again, was still so close to happening and felt like any day.

 

Joseph  

Every time I call them. They know any day now we’re gonna get a notice. And then two months go by I’m like, I can’t wait anymore. This is too much.

 

Tammy  

He did the sign the papers did the Cash for Keys. Everyone’s agreeing. He’s ready. That day comes and guess what the notice comes in that Oh, yeah. He’s he’s got to move out.

 

Joseph  

The day before he was supposed to move out. They gave me a notice saying he needs to move out. And it gave the day in two days. I’m like, I’m sorry. Yeah. saved you. $5,000. But

 

Erwin  

whatever. And how much in rent arrears did you have?

 

Joseph  

How much of what your rent rent? Did? You actually paid rent every single month, every single since I took over? He paid rent every month to me. So just give him

 

Erwin  

his money back? Basically.

 

Joseph  

Yeah, so it didn’t really cost us anything. But it costs us time, which in some respects may actually be more valuable.

 

Erwin  

So I haven’t heard how things are going now. So that was when when was that? What was the Cash for Keys? When did he move out? July? July 1. Oh, just last month?

 

Tammy  

It’s almost been Yeah. Almost a month. It’s

 

Joseph  

been it’s almost been two months of renovations. Yeah. Six weeks? Yeah. How’s it going? It’s going well, it’s gone. Well, the permits sorry, this

 

Erwin  

isn’t a problem. Number five properties you have now five? Yeah,

 

Joseph  

that’s four in Hamilton, four and Hamilton. Right now.

 

Erwin  

Those are the ones that are 20 years old.

 

Joseph  

Yes, 2828 still feels like I’m moving slow, can

 

Erwin  

turn on the social media. Go talk to your friends and find out how much they’re worth how many houses they

 

Joseph  

have. That’s not the point. That’s the expectations that I put on myself. Okay. Sure. Anyway, the renovation is going well.

 

Erwin  

But we wasn’t renovation plan. What are you doing so

 

Joseph  

initially, so for the listeners, it’s a one and a half storey house with a back split attached in the rear with a 400 square foot garage. So there’s about massive there’s about 3500 square feet of living space combined.

 

Erwin  

Oh my god, it’s

 

Joseph  

huge. It’s pretty large. Like the back unit is about, like 1500 and the front one and a half story is probably about maybe it was probably less than 3500 Sorry, it’s more like it’s more like 3000 It’s a probably another 1500 for the front’s we bring into my house. Garage. And then yeah, and then and then the garage as well.

 

Tammy  

So the front back duplex, not very typical up and down.

 

Joseph  

Yeah, it’s a front back duplex. The first the front unit is basically like your typical one and a half storey house like that typical kind of like century home kind of

 

Tammy  

main floor upstairs and still has the basement as well that

 

Joseph  

and then the back is kind of like a like a back split it’s basically it’s designed very similar to the back split there’s a basement to that back unit as well as kind of a second floor and then like a half level Okay,

 

Erwin  

so when you take possession once the way if you took possession tenants out, what would you rent this place out for? As is so you didn’t lift a finger?

 

Joseph  

Oh god. Oh, no, I wouldn’t

 

Erwin  

tend to take

 

Joseph  

they they took real advantage of this place. There was holes in walls. There was yeah, this

 

Erwin  

is bad. You don’t think okay, money compensates for everything. Someone would take it for like $300 a month.

 

Joseph  

Okay, well, we’re like, basically don’t consider that. Anything under 1000. Just entertain me. Okay,

 

Erwin  

what would the what the one and a half story ran for was the back split run for?

 

Joseph  

What would the one and a half so the garage you can rent? Right now currently there’s tenants in the back unit. They’re paying 1800 Plus utilities. You filled it? No, there were already they were already there. Oh, and 1800 plus future? Fully tenant. No, they did not get along with Okay,

 

Erwin  

so that’s probably probably the reason for the order as well. Yes. Okay.

 

Joseph  

But that that back

 

Erwin  

unit, that’s really good rent 1800.

 

Joseph  

It’s not when you consider what it could rent for I know. It could probably rent for around 20 to 2300. And that, and they’re not, they’re also using the garage, which I could probably rent for an extra 200. So they’re about six to 700. under market value. We’re keeping them because like you said, 800 1800 is not that bad. Right? The reality is, I lose about $700 of cash flow every month from potential cash, cash for that we’re not we’re not doing anything to earn.

 

Erwin  

One and a half storey rented out, as is John’s place. How much food costs that you could have gotten 1800 For just cleaning it up?

 

Joseph  

Maybe 1800 Probably for that front unit if we want it to occur.

 

Tammy  

That’s not bad. Because it is a full house. If it’s cleaned up. It’s basically full house. I

 

Joseph  

mean, full houses in Hamilton are renting for like 3000. Right. Okay, what’s the plan? So the initial plan was finished the basement and finished the main unit.

 

Tammy  

Can I just say Joe’s initial plan was an initial plan. Remember, you were all over the place? Emotional, legal basement Hold on, or Airbnb, maybe? Well, you’re right, we had

 

Joseph  

a submariner dealing with this, I was the SA there was all everything simultaneously. The initial plan was to renovate to fix to the basement, then do the main floor of the everything on the first house, the basement of the first of the main house in the front, and then do a full kind of cosmetic gut of the front unit. First and second floor.

 

Erwin  

We’re going to turn that into a duplex. We’re

 

Joseph  

essentially doing a legal triplex on the mountain.

 

Erwin  

Do we need to edit this out? Yes.

 

Joseph  

Sorry, sorry, we’re gonna do it all legal. But

 

Tammy  

otherwise, he was gonna do like proper, proper everything, everything’s gonna do stuff. But yeah, like underpin it to where we’re

 

Joseph  

going to lower the floor and everything saying, this is the thing is my my perspective is, I don’t want to ever have a rental, what I wouldn’t live in. That’s my golden rule for me. So if I wouldn’t live in it, I don’t want anyone else living it. I know, that’s probably not the best, like investment advice, because you can make money on things that you wouldn’t live in. And you can make really good money doing that.

 

Erwin  

Well, this is a state. This is clarify, though, when I was 22 years, I’d much different standards than I do now. So I sometimes I’ll speak to the 22 year old would you live here.

 

Joseph  

But still, so it was it’s a six foot five basement, and I wanted to drop it down to seven. And I don’t have the numbers on me. But like I rationalised that somehow at some point. And it kind of made sense in my head. The numbers, numbers got a little out of hand at some point, which is partially the reason we’re not doing it right now. So you didn’t actually do it. We’re so we’re not doing the basement anymore. And the reason we’re not doing the basement is with the market the way it is, I want the renovation to go quickly. I want to be in and out of this place. I don’t want like if we had the same market that we had back last year where everything was just moving. Yeah, sure, I just do the basement because the reality is from going to hold it with the appreciation that we are seeing in the market last year. Even if renovation goes slightly over budget, the market is gonna save me I know that’s horrible advice. But that’s the reality for a lot of investors last year or the even in 2020 the market save them for a lot of things, the market wasn’t really in our favour here. So the plan was be in and out of this property and get our money back. And then we will look at doing those renovations later down the line. As long as it’s stabilised and cash flows and it covers all expenses then in the future we can look to kind of increase our position and the property and that’s kind of it we knew buying the property that it would be an evolving kind of property as itself you don’t need to do all all the work phase one in phases every year or probably in like two years we’ll do that back unit kind of slowly kind of do what we need to do. We also found out that we actually can’t do the basement until that back units on because there’s some electrical wiring that needs to get redone in that place to run more power to the basement. So the reality is we would have to do the whole house if we were doing the basement so it just financially didn’t make sense. So we just settled for just doing a cosmetic on the main floor, which came out to be about 100,000 When everything included that the

 

Tammy  

front main and upper main and upstairs Yeah,

 

Erwin  

so basically like cosmetic.

 

Joseph  

Yeah, that’s just cool. I’m well we did we opened up structural wall we did a little bit more than just cosmetic.

 

Tammy  

So I needed a lot higher standards than I do. Yeah. shows live in there. But

 

Joseph  

very small when we’re in there without the wall. Yeah, no, you haven’t seen it with the wall

 

Tammy  

guy. I know we’re gonna come you know what everyone we should go by

 

Erwin  

go yeah, we’ll check it out. For me as it progresses in the market with historically high rents. I don’t need to do too much.

 

Tammy  

Well, we should do in the day two and get it approved with the tenants for a visit just so we can see that back unit because it’s really unique how it circles around and the space involved. It’d be nice to see the whole thing not just the front.

 

Joseph  

Yeah, yeah. Yeah, she’s sure she’s going. You let me know when

 

Tammy  

it’s John’s place. Remember John’s places?

 

Erwin  

So what’s the rent gonna be on this place? So you spent 100 grand spent 100 grand

 

Joseph  

the rents right now I’m projecting you can correct me if I’m if my numbers are wrong, but I’m projecting around 2600 to 2700 for that, just for that front unit, because it’s basically the full house.

 

Tammy  

You’re gonna be good there at least. Yeah.

 

Erwin  

Yeah, we’re seeing we’re seeing like whole semis go for like 32 Yeah, you’re

 

Tammy  

gonna get probably close to the three could be could be three just because

 

Joseph  

I did my numbers. I’m very conservative with my numbers. I do all my numbers. I’m 20. Never guess right? I did all my numbers at 2500. So anything more than 2500 is gravy for me.

 

Tammy  

My my I my rental is a one and a half story as well. I have four bedrooms, two bathrooms, and I put tenants in last year getting 25 Friends gone up. So yeah, you’re definitely going to be at least at the numbers you just said at minimum. So I do like to run my numbers conservatively too. But when the time comes to actually rent it. Yeah, check in again. Breathing

 

Erwin  

stretch. 3000. Stretch, stretch. Over 3000 My friend Christians successful guys message me here. You put up you stretched his one bedroom? Yeah. 2200 for a one bedroom

 

Joseph  

probably get free with the garage. Garage. I think not

 

Tammy  

even and you know what else? You’ve done a lot of landscaping outside which I noticed which is huge to me. You did or your mom’s?

 

Joseph  

Mom, I like to I like to put a little I like, no, no. I like to put a little spin on every property that I I like to put a little bit of work into everything that I own that within reason.

 

Erwin  

I throw a bunch. Yeah, I

 

Joseph  

don’t think it’s the best financial advice for anyone like investment advice, but like, I do a little bit of myself.

 

Erwin  

I tried to kill the vegetation on my other property.

 

Joseph  

It looks great. I think it looks good, right? Yeah, it does. I killed all the vegetation on my other places through the art, this will probably all died as well. But

 

Erwin  

apologies the listener this sounds very dramatic. How does this compare to your other three other properties in Hamilton, or any of this this dramatic?

 

Joseph  

No, no, they

 

Erwin  

were all pretty straightforward, pretty boring duplexes. Yeah, I know that didn’t feel boring to you at the time, because I know you were sleeping in them and renovating and resolve. So I know it feels tough. But looking back at that compared to what you’re doing now,

 

Joseph  

I would not I wouldn’t 100% would not have been able to do what I was doing now, dealing with the stress associated with it. I did definitely grow through the process. And I think I mean, like my purchases have gotten gone from like, basically doing no renovations to a little bit of renovations to a full gut to now dealing with

 

Erwin  

the first property. You did a whole basement suite. Not really, really it was

 

Joseph  

already partially done. Okay. Right. And then the second one, the basement was already done, but the upstairs needed a full guide. Yeah. And then the third one, okay. The whole place needed a full gut. That would have been your more more work one. Yeah. That was the that was the biggest shock was doing the third one. Yeah. And then the fourth one was just like property. Yeah, John’s place was just like doing the tenants and then dealing with all the other crap and then doing a full guide then let’s

 

Tammy  

just add that the third property with all the surprises and the extra work you needed to do and all the gut but then when we got a foreign though, what you refight for he was like, it was worth it. Oh, yes. Different. It’s very worth it.

 

Erwin  

So what would you say the beginner so for example, I see a lot of courses out there teach to go after your John’s house. Basically, they teach that look for the off market. Look for the complete disaster soccer ball size holes in the roof. The Vanquish in my mind, when you think a beginner should take something on tape or something like that on?

 

Joseph  

I think you need a baby step your way. You can’t like at some point you need to jump in. But I think you need to kind of take your time to get to a certain point. And not necessarily sure if that because I can tell you from my experience, if I took on John’s place when I first started, I probably would have been turned off from the whole process.

 

Erwin  

It shouldn’t be 5k It would have I

 

Joseph  

could have made 5k. So I’d say no, I think like you need to kind of build up and get I mean, I usually wouldn’t recommend a turnkey property per se. But I think like even if you want us to do that turnkey route would be a good way to kind of get your feet wet with that in terms of buying a property that needs a little bit work, maybe find something that needs a small cosmetic workup rather than a full, a full gut. Right? I think of the comfort level, at the end of the day,

 

Erwin  

I think of a scuba diving analogy, when you scuba dive as a beginner to go to take any advanced course, they only allow you to do one at a time. So for example, you see you’re a recreational scuba diver. Now you want to do what’s called penetration, you’re gonna go and you’re an enter a wreck, right? You can enter a wreck, what you cannot do is do that at night, because Nate is a different advanced level diver. So you can only do one thing at a time. So take real estate investment properties. Dealing with tenants is one skill set risk factor. Yeah, dealing with renovations and contractors, another risk factor, dealing with a major renovation, where you need permits, and you have mould and knob and tube wiring, asbestos, another level, right? Dealing with the LTB situation, another level. So I think to each their own, they have to decide what level of risk you want to do whatever stage in life and you are on a stage investor, you are just imagining, like, I know that this was stressful for you and your family.

 

Joseph  

Yes, for sure.

 

Tammy  

You know, and I just want to add that I agree to that. I do think it’s, it’s nice. And it’s that nice the steps that you took building that up, and it’s nice for people, but we also have a lot of new investors that come to us wanting to do, let’s say, a duplex conversion. And that’s a really big project as well. So

 

Erwin  

that’s a vanilla one vacant house, good bones,

 

Tammy  

you know, and all kinds of, we’ve seen all kinds of things that can come up and so on. And everyone’s a little different on how they roll with stuff. But again, going back to trying to have that good team around you. And I don’t just mean me, and I don’t just mean you know, that all does make a really big difference. Because new investors, if you’re just gonna start out Yeah, it is nice to have that smaller project first, but at the same time, it’s not so scary when you have a bigger one if you have the right team to so it really kind of depends on what you’ve, you know, surround yourself with and, and how you deal with things. And we all learn that from each other. Like I always talk about James on our team, he can have things off his back, and I’m like, nope, oh, my goodness, I’m not sleeping, I can’t can’t eat it. You know, we’re all a little different, how we handle it, but trying to learn from each other and doing the best. We actually

 

Erwin  

had John’s house and you had your surgery team. Yeah. You want to wash your shirt.

 

Joseph  

But I think I think taking steps is not a bad thing. And I think I’m more took them out of necessity. I didn’t have the money. When I started to get into something that needed a full guide. At least I didn’t know how to find the money. All the money. Yes. Well, I wasn’t doing all myself. But yeah, I did a lot of it myself.

 

Erwin  

The stuff you didn’t need a licence for Yes. To do an electrical. Probably the tiling drywall.

 

Joseph  

I did. Yeah. And but like I did it more because I felt I was we were looking for those properties more because I couldn’t afford a profit entity to forgot. And I didn’t know at the time, I was too inexperienced to know that I could just go and find the money or borrow the money to do this work. Right. So I’m just looking at how much money do I have? What’s the renovation that needs to get done? Like I remember when we bought red Street, the first property that I own, like, coming to closing I was like, I actually don’t even have enough money to close on this place. Considering all the closing costs.

 

Tammy  

Is that the when you call me you’re like, I have to call my No No. Money is the one yes, that is. But then you you worked

 

Erwin  

out the neural comes through.

 

Joseph  

And then that did come on? Yeah, see? Yeah. So I think taking those steps were necessary for me because at the time learning through that experience and learning through kind of, like how to find money, how to borrow money, like I we bought the property, I didn’t even have the money to do the renovation. I was like, I’m just gonna rent it out. And we’ll deal with it at that point. And then the bank was like, Hey, do you want a $50,000 loan? I was like, Yeah, I’ll do that. Like that. Yeah, sure. And then we did that, like I was. So last minute, I was just like, I guess I’m doing the renovation now. It was just like, and then the rest is history. From there

 

Erwin  

funny how anything how things worked out. But you had all the answers from the beginning. When we met you when you were 24.

 

Joseph  

I think it was good for me though to not have the answers. Because it for no one he has all the answer. No, I know. But I’m saying what I’m saying is like

 

Erwin  

if a kid you’ll find out how many answers you do not have.

 

Joseph  

Try not postpone that right now. Not in I got too much Bill introduced filter for that stage of life.

 

Erwin  

You’ll be grateful when when you have your portfolio and then you have kids and you don’t have to worry about this stuff. Imagine having kids and then trying to build a portfolio. Yeah,

 

Tammy  

that’s crazy. I’ll never forget when when Joe and I first met and when we got the first property, and you were nervous, of course as you should be right and it’s I get it and and I remember saying to you, you’re 24 years old and saying, Do you know like we were closing your eyes? Oh my god, I can’t believe I can’t believe it. And I said Do you know how many people say I wish I started when I was 24 And you did it. You did that. You absolutely did that like this just so on

 

Erwin  

the record is our youngest Korean. I don’t really I Yeah, well, you do. Who’s you bumped up?

 

Joseph  

But whose wasn’t there somebody after me?

 

Tammy  

Well, somebody met Joe. I think they were 23. I was like, no. You’re waiting? No. They’re you know what they’re like most people, including myself who want to and talk about it and think about it, don’t do it. You did it.

 

Erwin  

There’s huge. Yeah.

 

Joseph  

I just do things and think about consequences later. I think that’s

 

Tammy  

gonna make some calls. No, getting. You did good. You did very well. Good for you.

 

Erwin  

Especially where we’re talking about rents and stuff. What are we seeing in the market for rents? Rents are our showings, up down? We’re in the middle of August. Yeah, I

 

Tammy  

was able to book this morning, went out with a client to see some houses had my pickings of 12 that I thought could possibly work, how to narrow down a little bit, we went to go see six houses this morning, very focused on one lot. It was yeah, it was an experienced investor, we were able to soak it all in. And we were able to narrow down the properties that also meet all the criteria for a garden suite. And that was just Hamilton. So it was great. So we got got to see quite a few and go from there.

 

Erwin  

I was like, compared to like, six months ago, oh, six months ago, they

 

Tammy  

would call I would even like go there’s one or two if you want, and I don’t think one’s really going to work. But we could show you

 

Joseph  

finding that a lot of people are now starting their search. I’m still people holding back a

 

Tammy  

lot of people holding back, but I am hearing a few people more calling me saying you know, Okay, we’re ready. Now we’re ready to get back in which is smart. Because right now is a really good time. You know, August 2022. Right? That’s right now is good time. I had a client yesterday, I called her up. I said, Hey, I just noticed this change on the listing we saw a month ago. And she’s like, let’s do it. weoffer done, you know, and we were able to get in and get it for a great price paid for 75. And well in for property recently. And but yeah, so we’re noticing that it’s a really good opportunity. We’re noticing a lot more, there’s certainly a lot more choices on the market, a lot less competition, a lot of houses sitting 3060 days, houses that are sitting there more ready to sell. So the house for example that we picked up yesterday was 525. We offered for 75. They had a couple other offers fell through so we went in firm they loved it took our price. So that’s what we’re seeing those kinds of changes. That because these houses check off boxes for us to check off, but this one in particular is already a duplex and welland on a 60 by 120 lot that houses all the way to the left, we’re looking into severance possibilities and the land and if not, we have a double car garage that we’re gonna turn to a garden suite, massive growth opportunity

 

Erwin  

for five. Okay, how much would have costed six months ago?

 

Tammy  

Well, it was listed six has been listed for a long time I’ve had my eyes on it, it was listed originally about 650. for probably about that long ago, I saw it go down to six. That’s when we saw it held off for a bit because I had a low paying tenant. I noticed the other day, I’m like, I just read that that tenants moving out. So that’s why we jumped on it because now it’s fully vacant and paid for 75 and went all the way up as key. That’s it exactly. Same as you

 

Erwin  

know, an argue that selling vacant is key as well as the seller if you want maximum money. Well, yeah.

 

Joseph  

But as a buyer, like the follow up, like if you’re, if you’re not following up with properties that like Why have you been surprised we’ve done it like all the time, I got my first deal the same way. The fourth deal the same, we’re just following up just be like, Hey, what did you guys sell? Would you guys sell for? All right? If they have sold and you don’t get it? And that’s fine. But like what did you guys sell for? Because I want to know, like, you know what, we have my own knowledge. So I’m going into next one, I can actually put a competitive offering. And we really

 

Tammy  

play the market because Joe and I have obviously been working together for years now. But in the market where houses were selling crazy prices were up the house that you’re talking about that you picked up was because I would talk to him about expired listings, I saw properties that are expired or sell properties that are cancelled, and so on. And these might be some opportunities down the road that we can take a look at that we’re not seeing so much in this market, because they’re actually on the market sitting that home. But before when that, you know, isn’t the case. And the only reason that house didn’t sell the way it did was because of that tenant. So another kudos for you saying listen, let’s let’s push let’s push the envelope here and then we’ll jump in and we’ll take it and take that risk a little bit

 

Joseph  

like even after like right now like we’re after this we’re gonna go see something of a showing we do we have showing and we’re gonna go look not because I don’t want to buy it at the at the price that the house is at right now. I don’t want to buy it. I don’t want to buy it at the price the house is now but yeah, it’s been sitting for 60 days. Yeah, so if they do a price reduction, I want to I want to be the first one that seen it already. So that if I want if I want to put an offer in already, and they say they dropped they go from 800 to 700. I’m just throwing ballpark numbers out there. I want to be the first one to put an offer firm at 700 Because I know I can buy it for 700 and I can do what I need to do for 700 Because I’ve already seen the place yeah So that’s, that’s the

 

Tammy  

most important part. I keep telling you, you got to get out. You got to see him. You got to see them. You got to see them. Because then once you have when an opportunity comes, you’re ready.

 

Joseph  

Yeah. I’m kind of at a waiting stage just kind of seeing what I’m doing. I’m pretty liquid right now. Just kind of waiting into nice. Yeah.

 

Erwin  

So you know, this conversation before? We’re 24 year old think about 20 year old you put so forget everything you think about you think about a 24 year old you would think Auntie so? So let me let me push that further. 24 year old you mean 20 year old you? You don’t know. 28 year old you’ve never met before? complete stranger you meet at a networking networking line? What would you think about a guy

 

Joseph  

28 Year 24 year old me would probably be pretty impressed. I don’t know if

 

Erwin  

because how much? I don’t always ask but I’ll ask you. How much is 20 year old you worth? Compared to 24? year old you

 

Joseph  

20? Well, six figures or seven figures? For sure. Millionaire?

 

Erwin  

Yeah, what would 24 year old you like holy cow, you have five properties are worth a million. And you only did in four years.

 

Joseph  

24 year old me would be probably be asking a lot more questions and trying to do the math in my head of how long I’d have to work to get to that point. And I think at 24 I was doing those numbers in my head, which made working for someone else not make sense. Which kind of started that trajectory. I don’t know if what 24 year old me

 

Erwin  

would think. But your 44 year old you’d be impressed by 20. Yeah, yeah. 100%.

 

Joseph  

I’m not impressed by myself, though. But

 

Erwin  

Are your parents impressed by you? I think I think so. Whatever your mother. Yeah, thank you. I’ll tell. I’ll tell her myself in this room.

 

Joseph  

You guys are friends. You guys talk all the time. On Instagram. On Facebook, like they have their own conversations. I’m

 

Erwin  

not gonna have a bunch of new Instagram followers. I’m gonna ask her after this. Are you proud of Joseph? She’s gonna say yes. That’s some other questions running out of time. Can you say your parents are retired?

 

Joseph  

Yes, they are retired. Now there.

 

Erwin  

And the former teachers, so they have very nice pensions. Yes, they do. And what do you think their retirement life would be with if they didn’t have those pensions?

 

Joseph  

I always thought because we were talking about this the other day. And so I asked them and don’t cool. Yeah, I did. I talked to them. My, my parents have always wanted to do something like this. Get involved in investing in real estate and stuff like that. And for the listeners, if we didn’t kind of mention on this podcast, I have two joint ventures with my parents. So that’s what I mean, when they say get involved. But I think from what they told me, they would still they would have started to invest, because the pain into your pension, although it’s great when you retire. When you add up all the money that they’ve paid into the pension, it’s actually really quite substantial. Right, which is why they’re able to retire now with the pension that they have. My parents are of the mindset that they think that they would have invested in something while they were working, instead of kind of putting their money away in the pension. Because for them the pension plan was the retirement plan. And so they didn’t have to worry about it. So they didn’t think about it, or they’re finding out now that the pension is not enough. The pension, is it? Yes, it is. But, but when you have a family that you’re still, like, kind of like dealing with and you have elderly people that you’re taking care of, and maybe those elderly people haven’t planned for their retirement. Right. things add up. Right. And it’s enough to have a good life. And but it’s not enough to have a what I would consider a fruitful tool to help us help other people Yes, to be able to help out people that yeah, that you love. It puts strain, there’s still there’s still money issues. Let’s have it that way. Right. It’s like the pension does doesn’t eliminate the money. Issues. Right. So my parents are of the mindset that they would have started investing earlier, if they didn’t have their pension. I don’t think they would have if you ask me, because my parents have been very risk averse their entire life. I think the only reason they started looking at investing is because mine invested my investments were going well. And I was showing that I was working hard at them. And I was at networking events every weekend, constantly reading up on things constantly looking at things. So I think the confidence they had in me was what got them into this. I don’t think they would have done the same thing. If they not if they were not paying into their pension. So long and short of it. I think that it probably wouldn’t have worked out very well for them if they had not planned if they hadn’t had a pension. Do you think you have any issues retiring? I don’t know. See this. What is retirement Of course you do wonder about everything. What is what is what is considered retirement? Like I think for a lot of like investors at retirement is just really entrepreneurship like being able to live all over the map live their life on their terms financially free. Right. Right. Like I look at you and like that looks like your life to me looks like retirement. I know you for you. It doesn’t look like retirement because it’s a lot of work. But you’re able to live life on your terms of doing what you want to do to some degree. Yes. All right, for me that that is the goal right now retirement where I put my feet up and not do anything. No plans.

 

Erwin  

If you want it to go by the age of 50. Do you think Yeah,

 

Joseph  

100%. But that’s is am I going to be satisfied with that? Is that the question?

 

Erwin  

Here’s one thing though. Do you lose any sleep? No, the idea of I don’t even be able to put up your feet and do nothing.

 

Joseph  

I have 50 I haven’t thought about it on me because

 

Erwin  

it’s not a worry. We were discussing before your mom’s gonna come summer 17. Next, I

 

Joseph  

will force her to come. Yes. September 17. Right. Next Saturday. Yeah, I’ll make her come.

 

Erwin  

Awesome. Because Tammy, we’re going to talk about what people are doing these days. It is funny, because I see all this fear stuff on social media. Like, there’s one lady who’s a broker, whatever she’s like, and what mind? Are you buying anything in today’s market? Message me if you are? Like, yeah, that’s view. We’re getting stuff we couldn’t get six months ago, we may not be able to get six from some experts six months from now. So we’ll talk about what what people are actually buying me. We’ll talk about what Joe bought today, at the September 17. i When meeting. Yeah, but yeah, we’re gonna just tell it like it is. I think the world is very scary. Right. But you know, we had to figure out how to navigate it. And then preferably profit from it. When talking about that, trimmer, 17. So you guys see you there, I will be there, I’m gonna be on your mom.

 

Joseph  

Do you have to invite her because I if she if I tell her to go, she will not go

 

Erwin  

to me will sign her book to see if she comes.

 

Joseph  

That’s it means a lot there.

 

Erwin  

Any final thoughts? Any final thoughts? Because we’re way over time.

 

Joseph  

I think a lot of young investors over the last year, and even now made a lot of decisions based on ego and based on and that ego kind of put them in situations where they’re over leveraged, and maybe they’re now kind of in tough situations.

 

Erwin  

I’ll add to that they’re following charismatic leaders who are no longer around

 

Joseph  

charismatic leaders who have probably liquidated most of their portfolios as well. And I think that people really need to step back and look at it from the long term perspective. Right? If you have to sell you have to sell that’s just the nature, right. But if you’re upset, because you may be down on the equity that you thought you would have had, or you may not be able to refinance for what you thought you would have had, like, you have to look at it from the long term perspective and long term perspective needs to be I’d say at least a minimum of five years, if not more, right? I

 

Erwin  

know that someone should, they should, if they’re gonna take advice from someone, they better be reading the economics, they better understand economics, because I predicted I predicted this year would be another 2017 Yeah, so if you knew God, this was your year was gonna be 2017 Are you really going hard? All right, in the early part of the year

 

Tammy  

I just want to add that we’ve been working together for a long time and I’m very proud of my son Joseph. We have an inside joke that I’m like his mom and yes old enough to be so but yeah, I think that no matter what age of anybody is going to be starting to get into real estate. You were smart that you said you know what I thought about this and I went for it and I’m doing it and a lot of people sit back and don’t always do that and you know, it’s proud of you for doing it. It’s obviously you know, young age is pretty impressive, but at any age getting into real estate is great but yeah, it’s been a pleasure working with you, Joe. We’re not done we’re going shopping today

 

Erwin  

amazing Marty come in use social media handles you guys want to share you guys got a book or something you’re coming up with

 

Tammy  

I have no book time I have a butcher Zito care if any chapter I know I didn’t even know I was so definitely going to take a look at this book. Thanks for free copywriter when you guys heard it here free copy

 

Erwin  

will cure insomnia. Social media handle

 

Joseph  

Yeah, they can follow me on Facebook or Instagram. Joseph Costanza for both Facebook and Instagram.

 

Erwin  

You lock that up or you’d have to compete for those those handles nothing. Just Joe Costanza. Joseph

 

Joseph  

Joseph Joseph Joseph Costanza, one full word on Instagram.

 

Erwin  

And you have a fat wallet just like George Wright died, voted sure

 

Joseph  

that I would not consider myself loaded but yes, sure. Pretty sure 24 year old you would consider 28 year old Yeah, probably but yeah. Oh my standards have changed.

 

Erwin  

Alright, well thank you guys for doing this. Thanks everyone. Good luck. Good luck in your property search

 

Joseph  

yes

 

Erwin  

before you go if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already, then sign up for my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s much improved demonstration over the one that I gave to my cousin chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself I got into real estate for the cash flow but with the rising costs to operate a rental business, it’s just not the same as it was five to 10 years ago when I started there are forget the cash flow reduces your risk. The more you have, the more lumps can absorb. And if you have none, or limited cash flow, you’re going to be paying out of your pocket like it did on a recent basement flood at my student rental in St. Catharines. Ontario. If you’re interested in learning more, but it’s true for free for my newsletter at www dot truth about real estate investing.ca. Enter your name and email address on the right side. We’ll include in the newsletter when we announced our next free stock hacker demonstration. Find out for yourself but so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell I love teaching and sharing this stuff.

 

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**Transcripts are auto-generated.

 

Erwin  

Greetings everyone, real estate investors and stock investors, aka wealth hackers, as I like to call them, How’s your summer going? Best summer since 2019. I certainly help So Jerry and I are having a blast and have much to be grateful for one of our accounting clients AJ Callen and Manpreet Hendra superpower, a couple, I think, most know, AJ is retired engineer, and he went full time in real estate, and around the mid round, 2015 ish. And Manpreet is extremely popular real estate lawyer. She’s done some of our deals. We’ve referred her clients in the past. They are a super power couple, and they’re tearing things up in the multifamily space. No surprise there. Everyone in the spire knows them. They invited us to I don’t know why. They invited us as little plugs Jerry and I, my family and my kids. They invited us to search the shore, which is a private 500 property, summer resort, and they’re all vacation properties. So it’s a three season resort. None of these properties are winterized. Some of them are trailers, some of these are telling trailer park but a bit nicer a lot of these houses are quite nicely renovated, including AJ Manpreet, has quite nicely renovated their properties not quite on the beach, but we met on the beach, there is a beach within this rich summer resort for some fun in the sun, and a catered BBQ dinner back at their house, which is also within their resort. They’re celebrating their 10th anniversary, and party and style. Because it’s kind of like we’re partying like it’s 2019. With COVID restrictions a lot reduced, the entire thing is done outdoors. So that’s very nice. The day was awesome for many reasons other than of course hanging out doors. Cheering I get to meet and network with some movers and shakers from the keestrack community real estate investors with like as little as 40 doors to 400 doors and growing. Normally, I’m pretty socially awkward at these types of events, like regular, you know, regular like weddings and anniversary parties, where I don’t know anyone. But in this case, we all had real estate in common. So it was cool to mix. Family Fun. And kids are they’re going to beach and join the barbecue joints.

 

Erwin  

At this resort, and pretty much all the property owners own one or two golf carts. So my kids and I took a Jays actually is actually we took Manpreet Sacco cart, golf cart for a ride. It’s a bit nicer than your typical golf cart. Anyways, I posted on my Facebook, but it’s fun to combine family and fun and business and learning. Hopefully it wasn’t prying with all my questions. I asked a lot of these investors a lot of questions what they’re up to what are they seeing opportunity, as I’m naturally inquisitive, as you can probably tell from the show. And I firmly firmly believe that learning is through listening that speaking. That’s why you don’t see me speaking much and letting the people who know what they’re doing talk and hopefully I get invited Marquis buyer meetups, it was a lot of fun to learn a lot and so little time. Hopefully, you’re all out there maximising your summer in time, as time is your most precious resource. See how much folks are travelling these days to try and extract to continue? As I record Airbnb reports, their earnings today, it’s August 2, I imagine they’re going to kill it. And just from experience and talking to other Airbnb investors, they’re all pretty booked. So it sounds like yeah, travel travel is is hot these days and I expect the trend to continue. So how do real estate investors capitalise? Well today it just so happens we have an Airbnb expert who manages 100 doors for Airbnb use, and only owns one Wildling ones one of those properties. The other 99 are not owned by him. He manages them for other landlords. Avery actually recently bought a 250 acre property, he’s going to develop into a vacation resort, similar ideas where I was just talking about insurance in the shirts an example. But wait to hear the numbers. They will astound you. I’m at Avery birch at a conference in New Mexico just a few months ago, I was having real estate in common and being filled with seven figure entrepreneurs we connected right away. So we’ve been we’ve been texting we’ve been chatting our zoom booked with them I think tomorrow as well to just chat about some other business opportunities. But do you see what extent I go to to bring you my 17 listeners interesting guests. Every is definitely interesting. Ever since COVID, restrictions loosened. I’ve been enjoying going back to conferences and networking events with like minded investors and entrepreneurs. So if you’re looking for the next camp Miss conference, you’ll want to save the date, Saturday, November 12. All day for the wealth hacker conference live and in person, there’s no zoom option. There’s no virtual option near the airport with plenty of free parking, just go to www dot while hacker.ca for details. And also if you’re following me on social media or on my email list, you’ll see opportunities for no save money. We have promos running from time to time, but the truth about the conference pricing, the sooner you buy, the more you save, because the prices will just consistently go up until the date of the event. And if you’re one of those who likes the VIP experience, those tickets will sell out. So you probably wanna take advantage of cheaper prices and making sure you actually get a ticket so you avoid disappointment. We’ve hired speakers and sponsors for all the things that you need to be on the most efficient path to your financial goals. So you may have more freedom in your life, and how you spend your time to be building your own business or folio, to be retirement to be travel, whatever it is, you’re going to take away some have some takeaways from the conference wealth hacker.ca for details after interviewing Avery, maybe I’ll diversify into Airbnb a bit because with all the experience every shares today and operating 100 Airbnb s, we get an insider’s look into what which property style. For me, Airbnb offers the highest return, including what every avoids. And also he shares a story about how he identified properties to start managing for, especially for younger investors out there who don’t have a lot of capital. Again, Avery does not own the vast majority of the properties he manages. So he actually gives some tips on how he got started. And I don’t see why anyone and young hustler cannot do the same. Please enjoy the show. 

 

Erwin  

Hi Avery what’s keeping you busy these days. 

 

Avery  

What keeps me busy running a skid steer, building roads that are new property. 

 

Erwin  

Okay, I’m cityfolk explain what that means. 

 

Avery  

I am running this piece of equipments to build roads, because in 11 days, we have our grand opening for our adventure getaway resort. I don’t know if the video is clear, but got about 300 acres of wilderness and a lake and trying to get people in to see it. 

 

Erwin  

Alright, so the shameless plug, we do have a YouTube channel, folks. So if you want to see every we are doing this video, and Avery’s background is stunning. So check it out on our YouTube channel as well. So every what it is in your background. 

 

Avery  

So what we’re looking at behind me is I’m standing on the peak of a mountain overlooking a lake. And we’re looking at Raw Nova Scotian wilderness is about 40 minutes away from the main city and just untouched forest. What we’re trying to promote get people outdoors. 

 

Erwin  

Sounds amazing. Okay, so we are Canadians. Everybody that listens to this show. What’s the main city Halifax? What is it? 

 

Avery  

Yeah, we’re based out of Halifax, Nova Scotia. 

 

Erwin  

And I love Halifax. It’s funny, because like when talking to people, oh, we’re asking people about travel, like, Oh, I’m going to Nova Scotia. And like, that’s very much like leaving the country it’s like from from Ontario. It is it’s very different colours are totally different, like car stop for pedestrians. 

 

Avery  

That is it’s funny. We’re trained at a very young age to do that. And so that’s why it keeps working. 

 

Erwin  

Yeah. And so yeah. Again, I love Nova Scotia, I love vibe. So we got introduced through a mutual friend at a conference. So we both members of entrepreneurs organisation, for those who don’t know, just stating facts, and I hate to brag about anything, members of entrepreneurs organisation are required to have a seven figure business US dollars. So that’s a million dollars of revenue US per year. And every built the master pretty sizable, real estate business. Can you tell us more about it? 

 

Avery  

Absolutely. We’ve been operating for about five and a half years at this point. And over the course of this time, and through a pandemic, we’ve become the number one and the largest air b&b operator in Nova Scotia, in Atlantic Canada. And along the way, we’ve now grown to have 100 different properties under our management’s and we’ve got about a staff of 20 people that run the show. Now we’re growing into developing, which is why I’m standing on the peak of a mountain because it’s the only way to get cell service, but we’ve moved from managing and to creating. 

 

Erwin  

Okay, so we’ll get into the development because I want to get into it. But I want to know, folks understand how you would dig into managing 100 different properties. So you own all these properties. 

 

Avery  

We don’t own any of the properties. I’m one of them. Well, we just got one. Wonderful 100 Okay, got it. Yeah, no, we don’t own anything. We have either management contracts with the people who own the spaces, or we’ll take on commercial leases in the right zoned areas and turn them into essentially a boutique hotel. But we’re essentially catering to people that come into the city for seven days to 20 days. That’s our typical. 

 

Erwin  

So what’s gets gets covered in the news is often you know, we’re a tenant, like a regular tenant will sign a lease for the landlord. And then without the owner knowing the operating Airbnb, is that what you accomplished? You duped 100 homeowners into renting out to you and you convert them into Airbnb? 

 

Avery  

I wish I was that interesting. No. Yeah, I hear that story a lot. To get our very first property I would say I wasn’t very exact with what my intentions were. However, once So I had that one, I could point to it for all the ones to come and say, Look, we’re successful. This is what I plan to do, please let me do this. And then later, I’ve become very close friends with the person who gave us the very first property. So we’re all good. But yeah, it was a it was an interesting start. And then from there, we’re 100%. aboveboard, and landlords love us because we are just super, super diligent. So we treat their spaces, like nobody else does. sort of funny. 

 

Erwin  

What’s the terminology for this? There’s all these new terms like house hacking, for example, I only learned like two years ago. Is there a common term for this? 

 

Avery  

Yeah, in in the short term rental space called Master lease. So you Google that master lease, short term rentals, you can learn all sorts of things about it. Essentially, we get a lease furnish rent for a markup, we’re catering to clientele that need to be in for different things that a year. Interesting. 

 

Erwin  

Okay. Okay, just to put out a joke because it’s in my head, I have to say it is in real estate here. Master bedroom is no longer the master bedroom. So that’s the principal or the primary bedroom. So maybe, maybe you and I here, we’ll we’ll start the term primary lease. Funny, James, yeah, let’s do it. He managed to start promoting it. We have primary leases. And then you’ll coined the terms. 

 

Avery  

I sort of like that, like in pitch and saying, Yeah, we’re the primary lease holder. And here’s what we do. That’s great. Thank you probably like that. 

 

Erwin  

Yeah, it’s very politically correct. Because we’re inclusive on this show. The capitalist socialist, we love them all here. As much as him today. What is the typical property is their typical property? Are you talking about apartment buildings? 30 units are you talking about like single family homes that on you know, on Main Street, Halifax,

 

Avery  

Anything go? The only one that we don’t touch is condos. Some cities as we’ve looked to scale out our condo cities and some cities, our apartment cities, for instance, Calgary is primarily condos and Halifax is primarily apartments, they’re completely flipped of each other. So well touch apartments will touch single family will touch duplexes, basically anything but condos is everything. And they each have different things we looked at, and we’ve got tools that we’ve analysed, but every different property has a different strategy. And what we start seeing over time is that different properties, they only have only so many buckets that we fit into. So once we’ve developed the strategy for X, when we see x come along, again, we just rinse and repeat. Yeah, I think that’s a good answer to that. 

 

Erwin  

Tell me about Okay, so what would you do like a regular single family home? And a Suburban? Or actually, do you have a preference? Do you prefer a more urban setting, or suburban or rural, or you probably have a model for each, don’t you? 

 

Avery  

Yeah. It’s in different growth cycles of the business where the preference has changed. At this point. In our lifespan, we’re now looking for very unique combinations, something that we can truly put our mark on, and no one else can duplicate. In the past, we’ve really focused on commodity I think Airbnb fell into two buckets, commodity, and once or niche. So for a commodity, there’s no brand loyalty, except to Airbnb or VRBO, the platform, but that we’re a brand within a brand. There’s no loyalty for commodities, people need to be in the city, therefore, it will stay busy supply just always comes, it never stops. Unless there’s a pandemic, then we’re gonna get scrappy, or niches and once like what we’re building, it’s not a commodity. People don’t need to be here, they will wants to be here. Therefore, loyalty means people come back, because it’s unique. So there’s two buckets that we really look at. I don’t know how he got here. But fun fact, 

 

Erwin  

That’s just a good point. But the journey like you didn’t know what the journey would look like from the beginning. 

 

Avery  

No. One, like, let’s get five. Let’s get 25. Let’s get to 50. And then before you knew it, okay, I think the idea of what we’re doing now, 

 

Erwin  

Interesting, other than condos, is there any other property style that you don’t want, 

 

Avery  

There’s no style, it doesn’t work. It just comes down to working with your neighbours and the rules on the environment. So condos have the most challenging environments, therefore, we don’t even look at it. There’s so much opportunity that there’s no need for us to ever spend time there. You can you can run a condo it just takes extra work that we don’t want to do. 

 

Erwin  

Right? Yeah, cuz it’s, I live near Toronto. So it’s a big, it’s all condo people want to do it, but it’s because they want they can’t cashflow otherwise, but then your neighbours are not happy. 

 

Avery  

Yeah, it’s it’s extra work. Whereas in the park building, it goes through the management and they make a call. So when we come in and build a great relationship, we’re there won’t take. And we’re starting to get into a situation where we’ve asked to say we’ll take a whole floor. And that keeps it nice and separate versus an apartment building next door can be frustrating. So getting addition of doing a whole floor or a whole building, got it, the game changer total game changer, then we have complete oversight. And it’s really helps. 

 

Erwin  

That makes a lot of sense. Because for example, if I’m on a guy’s trip, and we know we’re going to be rowdy, we’ll ask the hotel when we book our rooms to be put in a section where no one else is. You’re trying to do the same thing you’re trying to isolate. That’s a great idea, right? I’m an empathetic person, right? When I want my sleep, I want my sleep, I don’t want to be disturbed. So please put us somewhere where we’re not going to bother anyone else. 

 

Avery  

And if you said that to us, we would know exactly where to put you. No one ever says that that’s actually very polite, 

 

Erwin  

At least a checkbox you put in like you’re putting in maybe one of your forms. We do you need a place where you can be loud. four acre property where the the nearest neighbours half a mile away. 

 

Avery  

Oh, I’m gonna add that’s incredible. You need to be loud. There’ll be a checkbox. 

 

Erwin  

And maybe just be a group that you like, oh, sorry, we have nothing for you. Quiet or network? It’s like a filter for like parties that you know. So you don’t want them? Actually, can you do cater for party? Do you have any options for that?

 

Avery  

We don’t, it’s not our bread and butter. And some of our research along the way. We found some really cool spaces that do. And they can charge a premium. The one that I’ll never forget, as I saw one in Montreal when we were looking at growth there. And it said party pad and, and like the walls were stainless steel and the rest was tile. It looked like at the end of each reservation, they came in with a friggin pressure washer. And just spray the whole place that like it like it was expensive. But it was like it was geared for parties. It’s like a bachelor pad place. I don’t know if Halifax would support that. Maybe just not a bread and butter. 

 

Erwin  

And then this seems like a pretty hot topic or hot button issue for people to who are avoiding doing short term rentals. And then also always, it often makes headlines as well. How do you prevent it? And when I’m trying to find party? I mean like excessive drinking, excessive substance abuse, excessive noise and property damage, of course. Yeah, sure, sure. But I’m talking about like, you know, five people having a beer watching hockey night in Canada. disrespecting disrespecting the state. Yeah, yeah, actually, as literally on the golf course. Yesterday, I was asked on the golf pro about they ever have problems. Yeah, we call the cops like, what are people doing? Excessive drinking, reckless driving with the golf carts. These things happen. 

 

Avery  

I think it depends on the location, we’re mostly focused around commodity. At this point, we’re just starting to build out niche. I suspect we’re gonna have more of that, now that we’re diving into that market. But if it was a golf course, that to me is not commodity that is niche. So probably more people have means that want to have parties will probably go versus on the commodity side. It’s because people need it, they’re not going on a party, they might be relocating moving into the country there temporarily as a student, very few people come to our spaces to just have a weekend away, only in peak season. But there’s two things that really keep parties are people who disrespect the space away price and minimum stay requirements. That was a game changer. When we’ve had we’ve had problems in the past. There’s got to be at least one. And it’s almost like clockwork, but I think we might have snapped the habit. It was like once once every year for four years in a row was a bagel, drug party. And we’d have to go and it’s like, it was like clockwork, yeah, there it is. All right, do the thing. We got used to it, but never any damage, very respectful people in Nova Scotia, they just wanted to have their time. However, they became loud and disruptive. So we had to kick them out. There’s rules around that if you wanted to dive into that subject, but you can get bring the police in, they’re not actually a tenant. So they’re a guest in your house means you can forcibly remove them, etc, etc. So there’s mitigation. But why that happens over and over and over was price. It was in the winter, when we were most eager to get bookings. And we lowered the floor too low. And that allowed it to be something attractive for let’s say, if the space was $100 You know, for people chip that is 25 bucks. So don’t be the lowest priced in the market. It’s not it’s just not 

 

Erwin  

That’s actually wonderful advice. 

 

Avery  

That’s the biggest takeaway. 

 

Erwin  

And that’s pretty much all you need to do the screen 

 

Avery  

Yeah, price in there’s other things too. Okay. Another one other big screening test. think that our managers use is if someone is reserving a space within our city limits, like if it says they’re from Halifax? Well, they better give us a good reason as to what they’re doing. And we’ll actually meet them on checking, just to make sure the argument or anybody else is not from Halifax. It’s all automated check in. You’re coming here from Arkansas, you know, you probably need to be here. But if you’re if you’re from Halifax for one weekend, and like, I don’t know, I don’t think we believe you. So that’s a very small percentage. But those those two things price and anyone in the local area meet on check in and if they’re carrying bottles of vodka, and we’ve actually caught people in the process and say, no, no, you’re not doing it, you can cancel and give your money back. Just leave. Okay. 

 

Erwin  

And there’s no recourse for them to like, leave like a one star review or something like that. 

 

Avery  

They know what they mean. Sure, anybody can do that. But in these scenarios, people know what they’re doing. They’re having a party, anything that people who have had party, other spaces have lived the best reviews because they felt that which is sort of funny. Hey, we know we were really ridiculous to deal with. So you did great five stars. 

 

Erwin  

Okay, I think there’s a Nova Scotia thing. I don’t think it’ll happen Ontario. 

 

Avery  

It’s East Coast hospitality. I think.

 

Erwin  

That’s hilarious. It’s funny, because I booked an Airbnb for Ottawa recently. And I know I understand their concern. So they ask the audio in town for like, I’m here. I’m coming from from Toronto, with my living staying with my wife, my videographer, and we’re here for business, taking some meetings. You know, I’m 40 plus years old. Feel free to Google my name. You know, I’m not a partier. I didn’t say that. Right. I didn’t say I’m not a partier. I think that’s probably a red herring. 

 

Avery  

Or something I just thought of. And one thing that’s always stuck with me, for anybody who’s listening that wants to get into the Airbnb space, or was already in it, and has had a very unfortunate booking where people have been disrespectful, the percentage of that happening is so small. Anybody who’s experienced that as an individual property owner, or maybe two, it’s just, it’s just bad chance that roll the dice because we’ve got 100 units, we have one incident in your 99% just fine. So like 99.5% Fine. So anybody who gets one stays just truly unlucky. 

 

Erwin  

This is all fascinating. Okay, if you don’t know how much time you have, I have a lot more questions. I’ll ramble. Okay, question around management, then. Have you ever had a short term person stay in cause damage, and you’ve had to go back to them to get money? 

 

Avery  

Yeah, it’s always small things never anything big. And you just do it through the resolution centre, Airbnb, though, they’ll cover it, you’ll always get it somehow. The larger the cost, the more annoying you have to follow up with Airbnb, but it’s all quite easy. And when it comes back, this might take some time. 

 

Erwin  

Maybe it’s a cultural thing. I’m just impressed how little problems you’ve had, or it’s just good screening. 

 

Avery  

I, I don’t know when you probably do have problems. I’ve just I’ve built a good team. We’ve got good processes, and we’re just diligent, so it might just be Halifax is a very special place. Yeah. It’s pretty smooth, very smooth. 

 

Erwin  

For someone looking to start a to say the same wants to do Airbnb their own property. What do they need to start with? 

 

Avery  

Find a place that is absolutely fine to places. dishevelled that is not nice that is not put together but no, seriously. The places that are nice means there’s demand means the landlords have power and why would they trust you places that are just shovelled means they’re not in demand. And if you come along, making an offer, let’s actually get looked at and typically place people who have to shovel places or small mom and pop landlords that you can actually have a conversation with the decision maker. So grab a dishevelled spot for a low rent, and then paint it. We used to not paint spaces because I don’t think I’d get the cost out of there. But you sign say, hey, I want a two year lease on this spot. You can get the value back from that painting. So painted, decorated really well celebrated works in your listing, and you’ll make the best margin and you’ll be able to get your foot in the door right away. Do not go premium to start I made that mistake. 

 

Erwin  

I think I’ve made that mistake too. By everybody was nice. 

 

Avery  

My very first face was dishevelled but we quickly after thought we need to go premium. So I did start with the dishevelled space and then looking back at it. That was the best decision now we do it time and time again we look for places that are not perfect. Because we get a good deal. We have a good conversation and it just goes longer now will sound like five year lease. someplace, 

 

Erwin  

Right, but I’m thinking whether the dishevelled place like, the landscaping will likely need a lot of work as well. And that’s something you’ll take care of a typical dishevelled property, especially rental properties. And this is why neighbours often don’t like rental properties is the light, like, for example, the landscaping has been taken care of. So that’s something you’d take care of as well take care of it. 

 

Avery  

Our goal is, we never want to talk to the landlord, we run the property as if it was our own. So we’ve got we’ll bring in landscaping, bring in all the cleaning, we’ve got our own maintenance, like if we’ve got a problem, we just deal with it. And then after the fact that here’s some stuff we’ve paid for, and we get some of this back. No, well, all right, we make the margin we need and to serve as our customers, it’s a cost of doing business. That’s how this up for a while it’s it’s not looking at who I was what, just at the end of the day, this is the business, we have the space to maintain it. If it cost us it’s unfortunate, but the margin is still plenty, 

 

Erwin  

Just to clarify, is looking for to show a property are you still looking for in good neighbourhoods? 

 

Avery  

Ah, whatever the data supports, neighbourhood doesn’t matter. Right? Okay, there’s a there’s a customer for every neighbourhood.

 

Erwin  

This is cool. Like he every I find a lot people meet again, myself, I’m I my decisions are largely data driven, versus people are largely emotional motional decisions like, again, like I have a realtor business, I’ve worked with people on the ground, and I’m showing people invest in properties. And people will say, I don’t like the kitchen, I don’t think this is a good investment property. Right? Something something like that. I don’t like the colour of the countertop, and like, but they don’t understand, like, you’re not the customer, you’re not the one who’s gonna be renting it, I know you’re buying it, you aren’t a customer that way. But your your audience for the for who’s gonna be paying you rent, right? 

 

Avery  

So they should be looking at the numbers versus how the kitchen is spit out. That’s yeah, they’re not the one buying the kitchen. 

 

Erwin  

Exactly every piece of real estate ever I ever look at or recommend to a client is because it’s it’s all data driven decision, all I see is ones and zeros and dollar signs. Right? I don’t care about anything else. Like it. Obviously, there’s soft parts of it, like how I judge a quality safe neighbourhood with nice neighbours and stuff like that. But again, all I see dollar signs behind that is I don’t know if it’s a nice neighbourhood scenario, nice school and get more rent. So again, it comes down to $1. Figure. 

 

Avery  

So there is a platform for that, that we use that anybody listening, listening, who hasn’t looked it up, just make data driven decisions. There’s a company called Air DNA, we’ve all used it. If you haven’t use it, I should get some promo from this company. I’ve recommended them to everybody. But it’s the only way you make decisions, you just literally can type in the address. And it will spit out comparables, it’ll show you a seasonality chart tells you exactly how much you’re gonna make by making this type of listing. So just you run the cost this much will make this much. Here’s the neighbourhood. Okay. And your work? 

 

Erwin  

Yeah, I’ve used air DNA as well, or dna.co. So erdene.co is a great for that as well. I paid for it as well. So I’ve used it fully. I actually find it pretty helpful. Just even just go look at to serve your neighbourhood for me. VRBO and to see what kind of availability they have as well. 

 

Avery  

Yeah, and it’s funny you can you can surf and see how much your neighbour is making on their property because it tells you it scrapes the data and says this property is making this much funny when you can see oh, no, I know our neighbours making 70 grand on their basement suite. Interesting. Interesting. Fun to know. 

 

Erwin  

Yeah. And then, obviously, the term the marketing terms hack, I’ll dig into why they get more rent than I do. I’ll go through their listing and understand try to understand what features they have. And maybe that’s why they get more rent than I do. For example, your friend of mine. He has vacation properties in Niagara Falls, and his his niche his go to strategies hot tubs. Yeah. All right. That sounds good all on Tom’s, I believe he said that his properties get double the rental income of properties that don’t have hot tubs within his own portfolio. So he’s you better believe he’s getting a hot tub for every property even though it means his maintenance costs go up, his cleaning costs go up. But the rents are more than covered. 

 

Avery  

That’s actually a strategy of vacation. The world’s largest short term rental manager. They have a hot tub programme, where if you want a hot tub it your stays, they will pay for it cashflow it, and take it off your monthly earnings until it’s paid for. So they know how well hot tubs work that they’ll put their money where their mouth is and they’ll buy it and then you pay it back. increases revenue by 30% on average. 30% Wow. Market dependent Yeah, it was also steady but hot tubs which ones do the best and near colder areas, mountains and activity doesn’t make the same effect in a city or hot places of course. So if he’s in the mountains, the absolutely like if you’re at a ski if you’re at a ski hill and you’re like a hot tub isn’t SVP of activity called M mountains. So it’s not triple whammy. 

 

Erwin  

I have this FOMO issue. I feel I feel like I’m just questions I’m not asking. I’m sure my listeners really have a full, full of questions as well. And David asked this question, 

 

Avery  

Then travelling with some of the really hard part is done some of the hardest ones that you will learn anywhere else. No, actually ever, ever, ever, ever did. 

 

Erwin  

To me. It’s a ridiculous story. So I just got back from Belleville, which is like, to me the vibe was like Niagara than the lake east of Toronto, right? We rented out a shack, they literally called the The Shack, they were very transparent what it was. And when we got to the property, my friend booked it. So I had no idea I was finding out when I saw the property. So it was actually the original house on the property. They’ve since the owners have since built a beautiful custom home, it’s probably over 3000 square feet with a pool and beautiful head of another house on the property as well. That was probably the second house that was built on the property. We’re living in the original. I was on the property tiny, it being called really as a one plus one one bedroom. And the attic was finished and had four bedrooms, the place including the attic, under 700 square foot for sure. As the kitchen has a bathroom, low ceilings, whatever. We paid $460 for the night. Literally a shack. 

 

Avery  

It’s amazing what will go if the value is there. I don’t know what the value. But you had a shack in the woods that is a customer Hey, work for you. 

 

Erwin  

And for that market, there was nothing else that was actually the last property available at market. It was just there. Nothing else specifically, it’s just Prince Edward County. So there was nothing else the demand was just that high. Because like Niagara on the Lake is the weekend. I stayed at a hotel the night before all the hotels were sold out. The vacation demand was just that crazy. So it wasn’t like actually spectacular, but it was more so supply driven. That’s what I would say. I think some people would think that’s a nice experience. When I saw the place like, yes, we’re in the middle of the country, the lake is you know, 100 metre walk away. Right? But when I first started like, you know, let’s go back to the hotel, just by the highway. But again, I’m not their target customer, obviously. But they got their money. So I’m very impressed get on them. I’m a social capitalist. So you got that money get on you. You are in debt. You are in debt. Like I don’t feel robbed by any means. If this is the last place available to rent, you burned it. All right. I don’t know what my point was. But there’s to your point about niche. I actually think some people would have liked this experience like a rustic experience. And like for example, I want my kids to like the cottages my my kids see these days are all a fully renovated. It’s not like for my generation when When did I friend’s cottage is when I was growing up? You know, the shock and awe of it? Yeah, like for example, the walls between bedrooms wouldn’t go all the way to the roofline, right? Oh, yeah. That’s whatever. Right? You know, I mean, so there’s basically no division between rooms really, you can hear everything. You know, I mean, that was my that was my context for cottages. You know, they’re not winterized. Like the heating is done through a wood stove. There is no gas furnace, there is no air conditioning. Am I right? Is there a market there is a market for this experience 

 

Avery  

Making a big comeback pandemic ignited it’s and it was strong before. So what makes going anywhere, but it puts tremendous pressure on the space, local travel and whatnot. But that’s what we’re doing. We’re we’re building these tiny, you think 700 square feet small. We’re doing 200 hanging, just to get away in the woods. Our nightly rate is much less to get away.

 

Erwin  

Okay, yes. Tell us about the development are your 200 square foot. What? 

 

Avery  

Oh, cabinets. It’s a small cabin. winterized. It’s got a propane stove on the inside. Right off of the lake comes with hot tub comes with hiking trails, or wheeling. It’s just it’s an adventure getaway. So it’s not so much the space and the size of the space that matters. It’s what value does the person get for being there? One thing that inspired me for just how simple things can be is I once read the story five years ago that someone built an igloo. And what’s the park in New York again, the main one central park, Central Park, they built an igloo in Central Park, put it on Airbnb for $16 a night. And they had customers it sold out instantly. It’s like, Oh, that’s great. It’s you could do any anything. They took snow from a park that wasn’t theirs. And they said come on in. We’re open for business. That’s amazing. So we got shut down after a week but you know, they made 600 bucks. So there we go. Great. It’s again, it’s not the space. It’s the Experience, space is just a vessel to have the experience. We’re building tiny combinations, building glamping accommodations, like Safari tents with really nice furnishings, nice stove inside. And what it comes down to is all the amenities that we get. So our turnkey costs for Safari tent is around 5500 set up, and then in peak season, they will turn out 4040 500. So basically pays itself off in about 40 days, retirement, right. And then the rest is product. So we can invest that profit into the property and the amenities. And that’s what we’re doing here. It’s essentially a place for people to get out of the city, unwind, kick back, relax, and then get back to do what they do best. So try to peel back the onion and prove people’s life. 

 

Erwin  

This is wild. Because again, you have because why I want to talk to you just again, you have a large data sample to draw from to make your decisions and to share on the show with our listeners are 17 listeners. Yeah, no one listens to the show. By the way. I don’t know why you drink. What do you decide to come on? I just like talking to you. So you could have done anything. And this is what you’ve chosen to put your own your own money into. Yeah, you start off you started off pretty early in the podcasting. Like you want you want Unique and this sounds very unique. And there’s no ski hill, nothing like that. It is just like that’s coming in your screens. Sorry. You’re saying go build a ski hill. 

 

Avery  

It’s gonna be one run, it’s gonna be just for me. But yes, buildings. We’re gonna pump from that lake and put the water onto this. And then go snowboarding. But just for me 

 

Erwin  

What I mean just for you, okay, so your your intake, your ATV up the hill are tearing it up the hill. 

 

Avery  

I’ve seen these things on YouTube where people can, I can make an electric winch setup for like 5000 bucks, you can pull me up. I don’t need a lift. I don’t need a fancy tow rope. I just need a motor and a pulley. And then you’re done. So I $1,000 I can get up there. 

 

Erwin  

We’ll just be able to use this. 

 

Avery  

Yeah, once we work the safety part out because I don’t think $5,000 winch is very safe. So maybe, maybe we’ll invest a bit more but it’s starting for me. And then soon yes, we’re doing a Nordic Spa here. We’re doing rock climbing, skiing, all sorts of things. 

 

Erwin  

Nordic Spas are like really hot here. 

 

Avery  

Like everywhere, everywhere. So the one secret sauce that we’re looked at is not exposed kill it happens in the woods kill it. And activity arcs kill it. Why aren’t all these three things in one place? We’re doing sounds like it’s gonna be like a bachelorette Haven. Oh, yeah. So you held your whole and Bakmi real Why am I bringing this up? Well serve all kinds of people, people who want private we can put over there. And people who want not private can go over there. This is this is this is huge. It’s like 300 acres over here. Looks like a screensaver back to the checkbox and said do you want noise? Yes, you want no and no. 

 

Erwin  

One thing that drives you bonkers but nor exposes you have Be quiet. Yeah, so actually going to what’s called a banya. I’ve never been to one of these before. I’m going to pick up some Russian thing. Apologies for my ignorance the listeners might have one of our 17 listeners actually knows what I’m talking about. But yeah, like the Russian spa, where you are allowed to talk and socialise and even have an adult beverage like sauna in and like hot and cold treatments whenever. And then my own experience. I’ve been calling Collingwood in Ontario, which is the private best ski is the biggest public ski resort in Ontario. It’s a massive bachelorette destination is Blue Mountain. Yes, Blue Mountains, a massive bachelorette destination in the summer. And the wishes are off season because the Nordic Spas and quote unquote, mountains that’s Ontario. It’s not it’s not mountains, like out east or west or Alberta. But yeah, it’s mountains. And yeah. And it’s it’s an hour from the city, but they draw and they charge ridiculous amounts of money and they’re busy. Yeah. So I imagined that can’t be the same for you.

 

Avery  

You know, there’s actually really, you’re totally right. And thank you. This is a fun. There’s this conversation around reoccurring revenue. Building a business around reoccurring revenue is the smartest way to build a strong company. And for the longest time, I started searching everywhere else to think how can I have a company that has recurring and someone made it evidently aware to me that we do have a reoccurring revenue business, but it only really gets activated in the niche part, not the commodity part. Because we built the space that is accommodating, affordable, and people keep coming back over and over and over. So with that knowledge we’ve considered maybe we had a subscription or something but Airbnbs can be reoccurring. revenue, which is an incredible investment. 

 

Erwin  

Fascinating. And then Okay, so for the novice explain, why not just build your own platform, have your own website and do all your bookings on your own on your own e business business whenever. Versus why would why would you host on Airbnb like, for example, what is Airbnb? What do you have to pay? What do you have to pay to Airbnb? 

 

Avery  

Airbnb bills the customer, not the host. And unique way that we don’t really feel it. But they’re marking it up 10 to 14% sort of theory, no explanation, but we never see it. So it doesn’t feel it doesn’t hurt. We don’t see it. We don’t hear it. We don’t feel it. So I just don’t, it doesn’t even happen. Other booking platforms like booking.com bills, the house. So we actually get an invoice saying, hey, this money, it feels different. Airbnb did something right in their design, that it’s a no brainer. And for the novice, the big lesson, I learned years back that led to my growth to come here was sell in bulk. Don’t sell individually, you’re going to spend the same amount of time might as well sell in bulk. Airbnb is the world’s largest platform, Wi Fi. I’m not trying to win that race. So work with them. Well, let’s do better. 

 

Erwin  

And what was your experience with the other platforms like VRBO, for example? 

 

Avery  

Yeah, we started on Airbnb natively. And afterwards wanted to bring another business depends on what their DNA again gets the demographics of where the buyers are coming from. Most buyers in Canada are Airbnb, the largest holding of VRBO is us. And booking.com is European. So depending upon what customers are coming to your market, you might want to consider those two channels from our experience. So we went through setting up on booking and VRBO and Expedia and these other ones, it really became so clear why Airbnb became a unicorn. They made it easy. And the others made it unfortunately, complicated for no reason. No reason. So that’s the difference. Airbnb is just effortless. And that’s why it took off. 

 

Erwin  

So okay, I have a lot of questions. There’s actually a question I miss. Apologies for coming back to it. So for your business, I’m sure people who want to start this business I’m sure they’re wondering, how do I convince a homeowner property owner to rent to me? That’s a good one. Like what kind of shirt use do you give them? Like? Because again, I’m sure the same people have read the same headlines. You know, see, you want to Airbnb you want to do? What’s my property? It’s gonna be bachelor parties and your people puking throwing the tech to the window, kinda like all those stories to get around student rentals as well. 

 

Avery  

That’s, uh, I actually coach someone on on that question. It’s really anything that you can offer is going to help you’re going after the disabled space is the best way because you’re gonna get your foot in the door. It’s all about getting your foot in the door. When we want when we see a listing that we like, well message, say I love the space. And like I said, the viewing in person, you do the pitch, you don’t do the pitch before you meet otherwise, you’ll never get the space. And we don’t say Hey, I like your listing, can I Airbnb? It would answer that, I don’t know, right? So anyway, love the space would love to love to view it, then you’re there you meet and say, hey, you know, this will actually do really well for what I’m looking for. And here’s what we do. I can say what we do now, because we’ve got that. But once you have one space, you can point back to it and have success. So getting the first one, it just requires a little bit of grit and cool offer that a friend of mine came up with for him starting was huge offer, like I can pay you six months in advance rent right now. And I was like, oh, that’s clever. So having the ability to do a heck of an offer. Yeah. So like, you want to get your first space, make an offer, they can’t turn down and call it marketing. Because every space after that is going to be a lot easier because you can point to saying I’m successful. And I’m going to do it again. Versus in the beginning. I don’t know what I’m doing because I have this. It’s the bad pitch. So six months up front was one thing and see money talks in real estate. So if you can put more down up front, it’s fine. You just gotta believe and you’ll make it back. And then if you don’t have that money to put down, it’s really talking about character. It’s like, this is my job. I have stable income. I want to create a side hustle and get into property management. I’ve made a surefire plan. Here’s my steps. This is why this space works. I’d love to have it and then you just have a conversation. It’s just negotiation, you’ll get turned down four to five times. But the fifth one just look at five places. Four to five, I think as the fifth place so it’s not like KFC you didn’t thinking 1000 pitches at the time. Yeah, so it’s much better than that. Yeah. 

 

Erwin  

So as the 100 Proper 100 properties Under doors, how many clients do you have are some of them bigger, and they have a sizable portfolio or a lot of these, like, Mom and Pop landlords like one, three properties. 

 

Avery  

It’s mostly Mom and Pop. But then we started working, we started working with small to mid size property management companies. And at this point, we have organic referrals because we do a good job and are accountable. So what’s actually happened on our side is just kept showing up. Number one rule of entrepreneurship just kept showing up, and they’d start sending us spaces. Hey, this one just come up came online, do you want it? So we’ll get first kick at the can because we are reliable. They always pay. We always maintain it, and they don’t hear a peep. So we’re like their outsourced management company. It’s just easier to rent to us. 

 

Erwin  

Okay, that’s fascinating. So apartment management, wants you as a repeat tenant, scalable repeat tenant, and they still they still get paid their regular, 

 

Avery  

I get paid, they get paid, they can start cutting back on their service request, because we’re taking care of most of the just because we have to it’s like a nature of the base. Like we’ll work with them. And we’ll we’ll offload as much as we can to save money. But at the end of the day, if I’m looking at $100 Night reservation for two weeks coming up, and I’ve got a plumbing issue. No, that’s getting planted today. So well, yeah, they like us. Because exactly they they like us, because we run their property, they just forget it exists. So that’s why we keep getting more spaces. Oh, wow. Fascinating, right? It’s so simple. 

 

Erwin  

It’s so fascinating. And there’s another question I’ve missed is are you worried about or any of these areas? Do you have issues with legislation? Like you see my posts on Facebook, I highly recommend everyone like my Facebook and see me Duff doing watch he does golf balls. In in Ontario, we have a lot of issues around lashes, a lot of condos, and then national we’re seeing a lot of municipalities now, banning short term rentals. London was the was the latest case where I can recall of one is not allowed to rent out their property in less than 30 days. Are you seeing that in your market? Or do you have any concerns? Can you still operate in that environment

 

Avery  

That’s coming down the pipeline, there are certain neighbourhoods like what it really comes down to his only issues come from respecting neighbours, like that is where all the push comes from. So there’s certain properties we have in certain neighbourhoods that we’ve just flipped to do 30 Day minimums. And all all this regulation we see around the world, when I keep repeating to people that ask this only affects things under 30 days. And the reason why is because if you look at the Tenancy Act in your province, it states how many days sublet can exist in a sublet is anything after 30 or more days. So there was never any rules written or anything below it. And that’s why they’re all being written now. So if you have someone for 30 days, or plus, it’s already written into the provincial and federal code from decades ago, it’s not going to change very quickly. So that even might get bumped around. And coming years after they push all the everyone to 30 day minimums, then we might address that as well. But that’s our strategy. So we really focus on getting those longer term reservations. People that come to stick around 30 days or 45, when we have some properties in downtown commercial zones, and if they want to come in and say no Airbnbs over a commercial operator, this is a commercial property. And here’s our commercial lease. So this is what we do. We host people that the end of the day regulations are only impacting areas that are zoned for residential that are being flipped in the Airbnb is because the neighbours are annoyed. All it is. And we look for commercial areas, and we look for 30 Day minimums in neighbourhoods. That’s it. So we’re proactively adapting to that, just expecting it. We’ve been making a slow shift for the last couple of years. So whenever it comes, won’t affect us. But that’s the strategy. 

 

Erwin  

Can you elaborate on what you mean when you look for commercial areas, 

 

Avery  

Like we’ve got apartments that’s above a pizza shop. It’s on it’s on a main strip. And while the our apartments that building is zoned commercially, so we can operate it, one that we took it on was downtown, it was above a convenience store what was apartments. Again, the zoning allowed us to make it into a boutique hotel. Zoning matters. We don’t actually dive into like, setting all these things up on all these permits and whatnot, but we look for the right safety net. And if the student situation comes where we’re talking to them, we say well, we’re in the right spot. And we haven’t had problems yet but we have a we have contingencies for it that does come up Long, that’s been our growth. Now it’s really focusing on commercially zoned areas just to be able to the race. When I look at an investment now it’s like, okay, commercially zoned on Airbnb site, what we’re just did were opened up a hotel, they actually took on a 25 unit, abandoned hotel, and, again, partially zoned, we just made an Airbnb. And we’re gonna start doing more of these because they’re awesome, the margins are incredible. It just needs a really good interior decorator, and you’re done. I’m gonna apologise to everyone because I think modern listeners are gonna buy every single abandoned hotel in the next 30 days across the country. I’m going to show on Netflix about motel flipping. Now, I can see why if we did, our first one is motels, if you know the historical hotel in your mind, they’re never very appealing. So make it appealing. And you already have spaces. And there’s a market for it. And so they just don’t do well online and they don’t look appealing. So you fix those two things. And you had a bargain on your spaces. 

 

Erwin  

Fascinating. Clean it up in that hot tubs. You’re probably good to go. That’s it. Clean the hundreds. Yeah, I can’t imagine the reviews if you don’t have a clean hot tub. Oh. Bad thing in my mind. I get so every Can you to rank for me your preference for investment then. So unique will come will be at the very top, I’m guessing. And then build a commercial? Yeah. And then below that would be like a commodity regular residential. Yeah. So that can be I can be urban, that could be Suburban. 

 

Avery  

Exactly. If I was going to rank in that order. That’s I never thought of it that way. But that’s exactly how we’ve morphed over time. So to do things that are niche, again, finding space to make that happen, a little more challenging. That’s why we’ve jumped into now by personal plans. And we’ll build a tiny accommodation, because we’re doing our thing you can hear like we’re off away, expensive in the city easier, just so we’re going more into unique now because it’s stronger in the long run.

 

Erwin  

Got it every day. But I want to thank you because that’s a really helpful point. Because from from what I’m hearing from investors, often they look to Airbnb to convert whatever their rental is, what the current use of the rental is, for example, it can be a condo, it can be a single family home in the suburb in suburbia. And then I think it would go Airbnb, but you’re saying that’s, that’s a bit lower on your on your preference level for an optimised investment. 

 

Avery  

Exactly. We still one arm of our business, and we’ll keep growing that and that’s fine. But so here’s a here’s a really good example for this. This is a startup and wanting to share, it blew my mind one year ago, when I dove into it. And why we started becoming developers is an average city space, it takes something here’s a number that can sort of translate across almost majority of cities. For average space not topped here, if you’re just gonna say like, let’s go on the averages. Take something like 18 days to break even and remaining 12 To profit. Yeah. So the margins okay, but you got to sell every one of those nights. So if there’s turnover days that you don’t capitalise capture, you’re just losing profits. So there it is 18 breakeven 12 profit over the course of the year the summer is different the summer peak seasons like five days, breakeven candy with our cabins is three, three days, four days to breakeven rest profit. So it’s quantum to quantum shift. It’s almost like eight times better so we can take comfort if there’s vacancies we don’t need to lower our price we’ve established this is what this is worth. This is our price but slower in the winter and that’s fine we don’t need to sell and that’s what sort of happens in the commodity space and Airbnb is during offseason well it takes 18 days to break even so that’s not happening and like oh no no wins the race to the bottom. So this is why we’ve made the switch is just it’s a lot more consistent in the cash the margin goes from like 30% to 6570 crazy.

 

Erwin  

I have a feeling your winter months gonna be busy like just what I see here like like ski has slammed private membership ski clubs I think they’re all their initiatives are double Wow. Like they went from like no one no one was interested failing businesses to having like waiting lists now for private ski clubs. Right? Oh, what a pandemic will change. I don’t know what’s gonna happen going forward. I don’t know if people will change you know, I mean, it like for example, even though we’re we’re all this recession talk. For example. Amazon Prime just had their best Amazon Prime ever. Right? Which is like a week ago. Yeah, it is the best ever. Even though we’re approaching, we still have supply chain issues, we’re approaching recession or we were in a recession already. But just because I my guess is part of it is because they have so many new customers. Right. And I think people have had a taste of more outdoor experiences. And I think that might persist. It may Trump may come down a little bit, I still think a lot of it will persist. Right? 

 

Avery  

Yeah, there’s, there’s definitely some things that have become sticky. And one trend that we’ve noticed as people became more familiar with their province, their country, travelling internationally might not be the question. And even now that we can, we’re still finding new spots. And, you know, within three hours that we really want to do, we’re now talking about exploring Canada. And it’s, it was a thing like, where the pandemic, people had the shift of I need to go to Paris, well, you can just go to Collinwood, actually, and now you’ve been exposed to it, although you’ve always noticed that you’ve never actually been. That’s, that’s a trend that sort of has stuck around. And it’s been motivating us. 

 

Erwin  

And then we have barriers. Now, just our airports are too busy. People’s luggage is lost. I don’t really want to go too far. And then crossing a border, all issues around COVID Stuff like I personally don’t, and I fight with my mom with my kids. I definitely don’t want to be crossing a border, right at this moment. Because I don’t want to be you know, so you test positive when you’re trying to cross when you try to come back to Canada. Now you’re stuck with my kids. We’re all stuck here. Now. I can imagine what the expense is going to be. So I’m naturally worrywart. All right. Again, I’m so sorry to my listener, because I’m sure there’s a lot of questions that they want ask how much is 300 acres costs in Nova Scotia? 

 

Avery  

Oh, sure. Who Yeah, when I first was 250. And when I first got into this to say, let’s figure out real estate, I thought like, Okay, that’s a good chunk of change. I don’t have it, but I’ll find it. What have later learned is that it is such a bargain, especially for anybody in the US. So this was 750 grand. 

 

Erwin  

Excuse me, his exact square foot condo in Toronto. Sorry, we need to reiterate this out. How much land Did you buy for 750 K. 

 

Avery  

We we have a small town of land 250 acres. Small small Township is what we have. I guess whole background behind me this is just a smidgen of it. You can see this. We have a lake on this Canadian dollar. Yeah, and it’s got some cool zoning too, that allows basically anything except fish processing and tires. I don’t know. But we can do anything here right you’re good? No fish processing. We don’t have it. 

 

Erwin  

So no fish processing your entire processing. That’s that’s your invitation. Okay, that’s it. All right. 

 

Avery  

Yeah, no, but this is a cool investment. And later after the ACA realise just how, how good of a deal. Nova Scotia and Atlantic Canada property is it’s almost oceanfront, we looked at a piece of ocean and Brian does 40 acres per 60 zoning was weird. We left it’s still under percent. It’s my most popular speech. We part of the process looked at 258 islands that was connected by a small causeway so we could build a road that was 2 million island. It has like 14 kilometres of ocean frontage. It’s crazy. The everyday mind. 

 

Erwin  

Thanks for projections on what this twinner for the acre property is gonna generate, like seven. This is This is insane. Well, what are the property taxes on 250 acres? No, no. Who cares? Please cash probably counting all sorted out. 

 

Avery  

It’s so the easiest way to break it down is to say how much how much does a space generate? Use the word space because not a cabin. It’s not a dome suntan like whatever space that’s matters because we’ve had scope creep and we’ve dialled back our cost per capita. Any space in this atmosphere we generate 30,000 Every year, excuse me. 22 inch square foot. very grand. Yeah, low end 25. If we really nail it, we can get 45 but I think it’s gonna fall on 30. So for each combination we put up, we just run the math. So we want to turn that Since we’re a million dollar operation, and the goal is to get to 40 spaces for the next three years, however, we’ve totally deconstructed our, our scaling model. And that’s part of our secret sauce, which anyone wants to talk about in this call. But essentially, we’ve just driven down the cost to get to, I think you can hit a million dollar business in our first nine months, which would be awesome. I can only do that because you’ve done it before. But I want to do it again. And and under a year. 

 

Erwin  

You mentioned you didn’t have the money, how are you? Financing capitalising this?

 

Avery  

There’s really cool programmes that exist. We had, it was a mix of private investment, we brought in sort of a 350 private investment, the land cost 750. And to develop it out, we’re gonna do one and a half million. So the bank saw half a million. Yeah, as our project, build out, the bank side is okay, you need you need to have X amount percentage of one and a half million, and then they’ll fund the rest. So one method was we did a vendor take back seller financing to get part of that downpayment, finance the rest of the friends and family. And then the bank came in, in Canada, there’s a federal Canada backed loan, up to a million dollars the loan over 20 years really favourable interest, and we’ll start with Business Development Bank of Canada. No, that’s the only one that doesn’t do it. But any bank, however, anybody? We’ve got the most success at credit unions, I love credit unions, credit unions will take a chance on you. And whereas big banks, put your number in a computer, and it says sorry. Peter said no. Anyways, it was a mix of credit union know about federal programmes, and then better take back mine with private financing. It was painful process, but we figured it out. 

 

Erwin  

Oh, financing developments are painful processes. To listener like listener like this is a straight up shows culturas about real estate investing, these things aren’t easy. This sounds crazy. 

 

Avery  

We’re going to scale again, though, is vendor take backs. That’s been our biggest tack to scale our business, we’re using that to buy our properties that we have landlords that Airbnb is with. We’re using that to buy development properties. Make a deal? Hey, I’ll give you your asking price you contribute 100,000, this will pay it back over two years plus interest depends on the discussion. It depends. It always depends, right? 

 

Erwin  

And of course, to me, it means of course, you’re speaking directly to the to the owner, you’re not going through an agent to have a VTB discussion when we went through the age for this to be able to have a good agent offence.

 

Avery  

Oh, yeah. But it also came because we had went looked at for three properties. And the last one, we went to go make an offer on someone else took it on the night of my wedding. And I was like I’m done. I’m done searching to come back to the drawing board picked five places and said, What’s your ideal space? We ended up with this one. And by this point, we had been done all of our research, we know exactly what we needed. And we have been turned down multiple times. So when we came into this meeting, we just said we want it. We’ll give you the price. But we need your your seller to play ball with us for some seller financing. They can throw 100 grand our way, we’ll figure out the terms are in and just sheer confidence after failing is what got us through. Because the first people didn’t too complicated. But sheer confidence in a very good agent is how we got it done. 

 

Erwin  

Yeah, you won’t keep that person’s number for life. Most agents, in my experience have no idea what vendor financing means their learning in this market. works a lot better in a buyers market too. Yeah. Oh, and just just out of curiosity, and I’m sorry. I know. We’re way over time. So I’ll let you go soon. Curiosity you choose to cut down on roads to build. How long are these properties sitting on the market? Like for example, like this, this 250 acres that you you’re you’re developing? How long? How long was it available for? 

 

Avery  

That’s a good question. I don’t think it was too long. I think it was maybe different targets. I think it was like 150 days. So anyone could Yes. In some at some of them, like the person we looked at had been on for years on and off. Although there’s a huge there’s a huge boom for people buying houses and markets. Some houses are on for day, most per day. Yeah, that didn’t seem to affect large land parcels, small home sized land parcels maybe more affected, but medium and large, lots of opportunity. And then the cost per acre is way less too. So, you know, part of our follow up plan, if we failed was, we could cut a chunk out and sell it for some capital. So if you can finance a medium sized portion like anything that’s like maybe 10 acres and above, less competition on it. 

 

Erwin  

Every year, apologies. I didn’t ask any early journey questions. How did you fall into this business? Oh, that’s yeah. I for short term rentals, 

 

Avery  

my whole life, I’ve thought I was an entrepreneur. So I kept trying and trying and trying failed and about 10 Different things that had no connection or relevance, just being part of the story. And I was running a painting franchise, college pro student works, this kind of thing. And that taught me all the fundamentals of how to run a business. So then all those my failures started producing. And one day a friend named Keith, which a room on Airbnb, I tried it. I had two bedroom, not one bedroom paid for my whole rent. So I thought, well, this is great. 

 

Erwin  

So your house hacking. 

 

Avery  

Alright, so I live in a two bedroom I had one and I rented out the other room and one room paid for my rent. Okay, I’m living for free now. This is great. How do I do more? And then I got home. And when I look back later at why this really stuck for me and why I love promoting it to others is totally inhibits my core value of fun. I just I can’t get involved in anything that I can’t have a little mayhem. Okay, Austin and Airbnb allows that allows flexibility and time freedom. Investment. I love promoting it to others because you can get the full 40 Hour Workweek you can train it, you can put whatever you want. It’s whatever you want. It’s blank, blank canvas big or as small as you want to go to market. 

 

Erwin  

Hey, I’m thoroughly enjoying this. I’d use up your whole afternoon if I could. But I only asked you for an hour now. Any anything? Anything I’ve forgotten to ask anything else you want to talk about? But what actually no, I said I asked you, you’re going to explain where the name of the of the resort came from. I don’t know if that’s even the right term. tortures peak orders peak. 

 

Avery  

Well, there is a lake a very well known lake in Nova Scotia called porters lake. And this is right up against it. And that’s at the very end and it has a mountain on so borders peak with it just it gave us the right alliteration sounded good to say. It was multifunctional so we can grow into it quarters peak spa orders keep refining orders thanks snowboarding orders people. There’s so many effects everything. And we also we also get the natural SEO for when people type in orders Lake orders. Oh let’s partner is key. So we might get accidental visitors. They’re just trying to go to the lake. 

 

Erwin  

I frickin love it. It’s such a I studied business in school. So I’m a bit of a marketing business geek as well. You borrow from an established brand, which is Porter’s Lake to build it into your own business versus some people would do Avery’s resort. Did you know SEO value? Yeah, so when you’re typing, you go to Google and it’s almost already on Apple Maps. We’ve even done frickin love it. And then the URL is Porter’s peak.com. Yeah. Good for you. And then I mentioned the opp before we start recording I thought was I thought it was Porter’s Porter speaks. Speak Porter speak. Probably I probably actually help people remember the name Porter pushers peak. Obviously there’s no apostrophe. Yeah, just Porter Porter’s peak. Anything else or anything else you want to tell us about the development that I haven’t asked? Other than the Instagram is also Porter’s Porter’s peak. 

 

Avery  

Follow our Instagram, one of my co founders, my business partner, Victoria, she runs the Instagram and it is not only entertaining, there’s also educational and it’s also going to make you want to come here. So our Instagram is very lively. Please check it out. And this is something that we’re growing. We’re going to be taking this model across the country. And a dream of mine is still a company across Canada and this is this is our knee. It’s our bread and butter and you are interested to learn more or want to learn how to do it yourself. I’m happy to take your email and If you need to talk I was wondering if we’re not working together I will happily help you. Because you know, there’s no such thing as competition that space is part. I don’t want people competing for your time. Competing with me for your talk doesn’t exist. Oh, time lab. Oh, God. You’ll pick up all this barley appointment slots in your town, we I’d love to take this offline too. This is a fun chat. I want to learn more about what you do to r1 podcast. 

 

Erwin  

I’ll stop the recording that and we can keep going. I don’t want to bore the listener with what I do for listener one, one last time, use the Instagram Porter’s peak, all supporters peak.com. Avery, thank you so much for doing this. I knew you’re a big time, man. Is this ever fascinating. I love how we got into the weeds. You know, I was actually thinking like, how am I going to title this show? I think the title of the show is if you’re gonna listen to a podcast on Airbnb, you have to listen to this. So thank you so much for being a wonderful guest and being so open. Yeah. And you know, it’s hilarious how we met introduction. We were both at the same conference in our mutual our mutual friend met you there. You already knew me. Well, it’s Oh, yeah, yes. And you meet this every guy. Right? And if if you weren’t there, I wouldn’t have never gotten the introduction to you. So my point I’m trying to get to his folks is like, you need to get out there. Right? You can’t just sit back on your Facebook or Instagram and think you’re gonna meet people and make connections. Alright, so yeah, okay, point. Yeah, get out there. Shake the tree when you’re stuck when someone’s gonna take up all your time. So I get the value by 70 listeners getting all the value for Avery this amazing, thanks. Thanks again so much for doing this. Let’s go check out the recording. Oh, in any final words, anything else you need other final words, 

 

Avery  

Go out there and get your first base started and you will never regret it. 

 

Erwin  

Alright, thanks so much.

 

Erwin  

Before you go if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already then sign up to my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s much improved demonstration over the one that I gave to my cousin chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself, I got into real estate for the cash flow. But with the rising costs to operate a rental business, it’s just not the same as it was five to 10 years ago when I started there. Forgive the cash flow reduces your risk. The more you have, the more lumps you can absorb. And if you have none, or limited cash flow, you’re going to be paying out of your pocket like it did on a recent basement flood at my student rental in St. Catharines. Ontario. If you’re interested in learning more, but it’s true for free for my newsletter at www dot truth about real estate investing.ca. Enter your name and email address on the right side. We’ll include in the newsletter when we announce our next free stock hacker demonstration. Find out for yourself but so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell I love teaching and sharing this stuff.

 

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