Realtor to Uncovering Deals As A Full Time, Well Off Investor With Georges El Masri

It’s a bitter sweet day as I’m selling my Daughter’s RESP: real estate savings plan.  This is the truth about real estate investing show for Canadians and the truth is investors are seller waaaaaay more than buying from what I’m seeing and hearing from other high level investors.

What I’ve learnt in this real estate winter is my small residential investment properties: single family houses I’ve renovated to be student rentals or legal basement apartments are much more liquid than any other piece of real estate.  My investment properties that I’ve sold, while optimised for income and location, they each sold in 7, 14, and 32 days.  Those are sellers’ market days on market numbers.

Compare that to apartment buildings, commercial retail, offices, industrial, multifamily, cottages, condos whatever, nothing in today’s market has more demand than the single family house in a good and safe neighborhood.

Industrial is hot too but you can’t say the same for any other category of real estate.  Talk to any local apartment building owner, CMHC isn’t in a hurry to refinance renovated apartment buildings, CMHC’s focus is on actually creating supply, the actual solution to solve the housing crisis.

That is the truth about real estate investing for Canadians and I happily put my money where my mouth is.  My name is Erwin Szeto, host of this little podcast since 2016 that has ranked as high at #81 on iTunes in the Business category.

As mentioned, I’m listing my daughter’s house that I bought for her back in 2015, converted it into a student rental for college students.  They were rough on the property so I had the basement legally renovated and converted into an apartment and rented it out long term in 2017.  The tenants were pretty good and stay up until April. They always paid and why wouldn’t they, the rents were well over $1,000 under market value.

I’ve since helped them find a new place, I’ve invested thousands of dollars to renovate, stage the property, the listing is live and I’m holding offer till after Victoria Day. Please wish me luck!  With any luck, by the time you listen to this, the house is sold with a closing date ahead of June 25th, the ridiculously, short notice deadline by our anti- landlord federal government.

Asking price is $748,888 for a turnkey, two family house. I’ve already done the heavy lifting: the six month vacancy and renovation, a renovation that would be around $150,000 to complete in today’s market.

https://www.realtor.ca/real-estate/26911061/89-clarendon-avenue-hamilton-balfour

Market rent is around $4,100 plus utilities, the house would be ideal for house hacking: live in one unit, rent out the other to help with the mortgage or a large family or a deep pocket investor.  The location can’t be beat, this is my daughter’s house of course, only an eight minute walk to the major shopping plaza featuring Walmart Supercentre.

Realtor to Uncovering Deals As A Full Time, Well Off Investor With Georges El Masri

On to this week’s show! We have an old friend in Georges El Masri returning to the show, host of Well Off Podcast, Georges used to work at the same Brokerage, the wonderful Rock Star Real Estate Brokerage but like many talented investors do, they transition out of service work into more focus on their own portfolio.

Like I’ve told many new Realtors, investors in my experience make more money and Georges will prove me right on today’s episode.

Georges is going to tell you it hasn’t been all sunshine and rainbows but he’s doing really well thanks to smart investing, quality education, keeping an eye on the numbers and execution.

As is the trend, the above market returns are often in the more complicated projects.  Those who solve problems tend to get rewarded and Georges shares how he uncovers deals, find hidden value add but adding apartments in commercial multifamily and small developments. 

Georges shares about different joint venture structures he’s negotiated so make sure to have a pen and paper ready, this interview is full of nuggets.

To connect or follow Georges:

Email info@welloff.ca

Phone 416.855.4902

Podcast: https://welloffpodcast.ca/

Please enjoy the show!

To Listen:

** Transcript Auto-Generated**
(00:01) it’s a Bittersweet day as I’m selling my daughter’s reses I call it a real estate savings plan this is the truth about real estate investing show for Canadians and the truth is investors are selling way more often than buying that’s what I’m seeing uh in well that’s what I’m hearing from my own clients and I’m hearing from other high level investors and Realtors I’ve uh what I’ve learned in this real estate winter is that my small residential investment properties single
(00:27) family homes that I’ve renovated to be student rentals or leave basement apartments are much more liquid than any other piece of real estate that’s out there my investment properties that I’ve sold three of them so far uh while I’ve optimized them for income in location they each sold in 7 14 or 32 days those are seller Market Days in Market uh those are those are numbers indicative of a seller’s market now compare that to apartment buildings commercial retail offices industrial multif family
(00:57) Cottages condos whatever nothing today’s market has more demand than a single family house in a good neighbor good and safe neighborhood so there should be no question why I’m bringing the same investment model with me to the states uh industrial is hot too uh I’m I’m hearing from experts that vacancy rates are below 5% which is incredibly low historically for the industrial Market uh but again you can’t say the same for any other category of real estate um talk to any talk to any local apartment
(01:27) building owner for example like if you do have cash you can find a good deal out there because there’s not much competition out there uh cc is not in a hurry to refinance renovated apartment buildings which has been a you know C has been has been a Lynch pin to many many apartment building strategies uh for for folks who do like the repositioning which is means you know to turn when you tend to turn over you renovate and raise the rents that whole strategy again it’s heavily reliant on cmhc ensuring the mortgage for refinance
(02:01) uh ver but based on where what I’m hearing on the street is cmhc is focusing more on actually creating Supply so there are supporting developers which is the actual solution to solving a housing crisis unless we you know kind of slow down the immigration anyways that is the truth about real estate investing for Canadians and I’m ha and I’ll happily put my money where my mouth is my name is Rano host of this little podcast in 2016 that is ranked as highest number 81 on iTunes in the business category as
(02:29) mentioned listing I’m listing my daughter’s house that I bought for her back in 2015 just months after she was born sorry that’s 2014 I bought it bought that house back in 2014 I converted it into a student rental for college students those students were rough on the property so when legal basements were available as a strategy I went ahead and renovated the basement legally with permits with the help of Andy train uh again converting that basement into a an apartment two-bedroom apartment with inite laundry uh and rented it up to
(03:01) long-term tenants back in 2017 those tants were pretty good uh and they stayed up until this most recent this past may this April April sorry uh they’ve they always paid and why wouldn’t they their rents were well over $1,000 below Market I say they as in as if they’re one because um grandma lived in the basement the daughter with her four kids lived in the top with her boyfriend uh I’ve since helped them find a new place I’ve invested thousands of probably close getting close to $10,000
(03:32) to renovate in stage the property the listing is now live I’m holding offers until after Victoria Day yeah I’m dating this episode which I don’t mind because we do the we record these episodes all the time uh please wish me luck with any luck by the time you listen to this the house is sold with a closing date ahead of June 25th the ridiculously short notice deadline by our anti- landlord federal government asking price is 74,8 188 for luck and I’ve priced for action again this is a turnkey 2 family house
(04:02) that I’ve renovated with permits to make that basement apartment legal I’ve already done the heavy lifting there’s no you know for anyone getting to this today that’ be they’re looking at a six-month vacancy uh in a due to the renovation and that renovation could be around another 150,000 to complete in today’s market that’s assuming everything can be done on time like permits and whatnot because uh for those who don’t know the city of Hamilton was hacked um by Ransom people they want
(04:29) their whole holding the city uh hostage and for for ransom to get their data back City refused so a whole bunch of stuff is not working at the city uh which could which or things are move to more manual processes which means slow anyways so this is a turnkey one so uh Market rent for this property based on my early research is around somewhere around 4,100 plus utilities a month the house would be ideal for house hacking as live in one unit rent out the other to help pay for the mortgage or for a large family or for a deep pocket
(05:02) investor who can put down a good amount of cash so to make this thing cash flow uh location can’t be meet can’t be beat again I bought this for the purpose for my daughter for her investment so it’s a good one it’s only an8 minute walk from a major mark from a major shopping plaza that features U Walmart Super Center so very convenient location on to this week’s show we have an old friend George Almaz returning to the show he is the host of well-off podcast he is a and but he spends most of his time as a
(05:32) full-time investor George and I used to work at the same brokerage the wonderful Rockstar real estate brokerage so George left I’m still there but like many talented investors do they transition out of service work and into more focus on their own portfolio when I mean transition out of service I mean like for example contractors or drafting people or Realtors or mortgage people it’s not uncommon for them to transition out of those service jobs into more focus on building their own portfolio like I’ve
(06:02) told many new Realtors investors in my experience make more money uh over the long term uh via passive investment and George will prove me right on today’s episode George is going to tell you that it hasn’t been all sunshine and rainbows but he’s doing really well you’ll be able to tell by based on the quality of his deals and so then thanks to Smart investing quality education he’s been through keeping an eye on the numbers and of course execution execution of those renovation projects uh as is the
(06:29) trend above above market returns are often available for to those who can take on more complicated projects those who solve problem problems tend to be rewarded and George shares the the problems that he’s taking on uh he also shares how he uncovers deals uh because that’s incredibly important if you don’t have a good deal you’re GNA have a lot of trouble making good money George shares how he finds deals off Market on Market how he finds hidden value that others Miss which generally includes
(06:59) adding apartment in commercial multi family so commercial multi family uh is is multi family that’s over four or six units anything over that and also he does small development work as well George shares about his different joint venture joint venture structures as he doesn’t have all the money in the world so he is uh partnering with other folks to passively invest in his projects so he’s sharing from his experience what he’s negotiated how they’re structured what the different splits are and how Equity
(07:26) splits are who gets what so make sure to have a pen and paper ready this interview is full of good nuggets to follow George you can email him at [Music] boy congratulations yeah thank you so two BO two boys yeah you’re going to make more money to Fe oh my God those it’s crazy it’s so crazy like diaper cost all these things you don’t notice it but your your costs go up a lot with the two kids but anyway um yeah so we got a a one month old right now he just turned a month old yesterday uh and we
(08:19) have a two and a halfy old and you have couple businesses sizable portfolio growing yeah portfolio is growing um so I’ve been focusing on that the last couple years just growing stabilizing things we’ve had some just like everyone else you know some cash flow issues on a couple properties so we’ve had to address those uh my wife is a realtor so she’s she’s taking over all the the sales on on the real estate side and O over the next I guess couple months she’ll be slowing down a bit taking care of our son so I’m probably
(08:51) going to have to step in a little bit busy busy yep all right y before we’re recording um we’re you know we’re talking about um my I I new new Realtors reach out to me all the time ask me for some advice and I always tell them in my experience investors make more money MH like you you actually have a story to share around that yeah yeah so when I was um this was probably around like 2016 2017 I was working with a a seasoned real estate agent and an investor so he was like a mentor to me um and then he would
(09:27) just tell me when 30 years ago when I kind of started in real estate I was so focused on building my real estate business and just selling and I was killing it I was doing so well but there was this other guy in my office who wasn’t doing as well as me on the real estate sales but he was buying one income property every year and I after a couple years I noticed like he’s really starting to build his wealth and and do so well and that made me realize that I need to start buying real estate and and he started a little bit later in his
(09:56) life but he’s done really well so uh that was kind of something that stuck with me so I kind of did the same thing in 2017 I bought my first property and then 2018 I bought another one and just kind of kept slowly building from there mhm and I remember I remember you’ve been on the show before I remember your your more your early properties were more simpler with the condos was it uh no the first one was a was a single family home kind of used as an illegal duplex in Hamilton uh Century home yeah in downtown like the old ones e i i yeah
(10:28) I don’t like them as much anymore but uh that was the first one and uh yeah I never bought condos always bought freeold got it got it yeah I just sold my 100y old house and I’m glad it’s I just got the quote to just to patch up the chimney $2,700 yeah yeah I can’t believe I still have a chimney in this Modern Age yeah cuz it’s a boil I have a boiler I don’t even know what’s using in the chimney but I need to fix it to to sell that to finish to close the sale so I’m fixing it okay yeah well 2700 is not
(10:58) that bad but you know to to fin to close off the sale I know it’s it’s it’s reasonable to do yeah but uh these These Old House problems I’m done done with it but that’s the thing when you’re when you’ve been investing for a while your criteria changes what you’re looking for changes so uh it makes sense it’s natural right and your criter changed a lot like you mentioned you started with the single family home with the with the non-conforming basement and you’re doing
(11:25) like before we start recording you’re doing some pretty advanced stuff now like you mentioned you’re doing a you have an 11px in Branford and you’re adding two units mhm let’s start there where are these two units going yeah um yeah paint paint us a picture what does an 11 what does this 11 Plex look like is it like a three story walk up like what does it have an elev it’s a two story no elevator yeah um it actually to me it looks like a school like like a a school that was built in the 60s or
(11:52) something some people say it looks like a prison but some schools look like prison yeah uh so it’s all brick um no basement okay um oh really yeah why no basement that’s odd I I don’t know so originally this place was a commercial building I think it was used as like a government office at one point and then it was used as a hall right so it’s it’s gone through multiple Transformations but um I’m not sure why there’s no basement there yeah uh but anyway it’s got five two-bedroom
(12:24) units six one-bedroom units and it had a laundry room so at one point this laundry room it’s like 300 ft maybe oh it’s big yeah like maybe 250 to 300 ft yeah it was used as an illegal suite and then somebody complained cuz they they put a kitchen and a bathroom and everything and they rented it out in the laundry room they got rid of the laundry units but they used the laundry room right um so somebody complained the city came shut it down so they kind of flipped it back to a laundry room right but when I purchased it the owner had
(12:56) plans to build an addition to turn it into a legal unit right so that’s one of the units we actually didn’t want to do the addition because there’s a big hill behind the property and we’d have to build a retaining wall there’s a flat roof we’d have to extend it it was going to be pretty expensive to to build that addition instead we requested to uh a minor variance to use the existing space to build a little Bachelor unit and it was actually approved so we’re we’re going to be saving a lot of money by
(13:23) just using the existing layout where you going to fit the bachelor you had a two 50 300t laundry room where are these two where are you fitting these two units so so it already oh no it’s one unit it’s going to be one unit but it already had like a shower and a toilet and a little bathroom in the corner it had a small kitchen already so what we’re doing we’re going to extend the bathroom a little bit to add a vanity cuz you need it for code we’re going to put in another window and then we’re just going to put like a
(13:53) small just a sink in a stove and then the fridge is going to go kind of it’s going to work out with the addition of the B there’s going to be a little slot for a fridge to go there as well so it’s going to be a really small space but I think there’s going to be good demand for that um for that type of space so we can another option would be to Airbnb it so uh we do have some flexibility there and Branford allows for Airbnb they’re friendly on that well actually I should I should say that I haven’t looked into
(14:18) that uh I would think so because somebody had mentioned to me that it is allowed but I’m not 100% sure actually yeah definitely check yeah the trend is not your friend for yeah I mean I Airbnb is not a priority rather rent it longterm cuz again for financing purposes I’d rather have that stable income yeah it’s true yeah you gave commercial financing on this yeah yeah like apart like apartment building sty well I have a vtb on it yeah so Al so you uh can you share more about uh vendor takeback mortgage uh so when
(14:48) you’re buying the property you negotiated it yeah so we we went to see it initially the owner wanted 2.2 million which was a little overpriced for us but we were able to negotiate and bring the price down to 2 million and then we got 1.3 million as a first mortgage from the seller so the seller provides the mortgage to us it’s registered against the property and that’s what a vtb is right and we negotiated 4 and a half% for two years interest only payments and then it bumps up to 6% for the remaining
(15:23) three years fully open so we can refinance at any time these are good terms yeah this is way better than the private one but we’re seeing for sure yeah 6% open that’s great yeah yeah and then sorry let’s take a step back how did you find the property I had an assistant reach out to a bunch of real estate agents so we compiled the list of agents that um have listed or sold apartment buildings in specific areas we had probably 20 to 30 agents on this list we sent out an email to all of them couple of them responded nothing
(16:00) that was really that all that interesting but uh we did have this one person bring us the Branford opportunity and we just went from there and then did you negotiate the vtb directly with the agent or the owner the seller we negotiated with the agent we had to yeah of course like yeah but the the nice thing was that the seller was there for all the appointments so I got to meet him we would go to like there was a McDonald’s close by so we’d go sit down have a coffee after it was it was a really cool experience it was my first
(16:30) time buying an apartment building but it was nothing like buying a house it was more of let’s build a relationship they want to learn about me what’s my portfolio like am I able to actually close on this building I learn about them um we It was friendly throughout the entire process we just cooperated worked together it was cool fabulous no I asked if you’re able to communicate directly with the seller because well you know most agents have no zero experience with vendor takeback mortgages yeah yeah it’s actually funny
(16:57) for a few months I had a few people ask are you interested in the btb yeah for for my own listings and that we haven’t had btb conversations in regular real estate for over a decade yeah for sure for sure maybe when I first started back in like 2010 when things were more of a balanced Market or you had something more complicated like mixed use yeah where there was no good financing all that sort of stuff but for this you could get traditional financing I could definitely do that I can get traditional financing but the terms were so good uh
(17:30) we actually got a second mortgage as well because we didn’t want to put down you know 700k so we got a a second at 11% uh which topped us up to about roughly 80% loan to value somewhere in that ballpark wow and this was a private from your own network or from my own network it was actually through RSB funds so somebody had a big chunk of money in their rsps they were able to loan it to us as a second wow yeah good for you yeah thanks someone off you met off the podcast or someone just no just someone I’ve known for a long time uh an
(18:06) investor yeah yeah it’s like so there’s no lender fee or anything like that it’s just just there’s no and just straight interest yeah pretty much I had to pay for lawyer fees like on their end as well kind of standard but that’s about it fascinating what what I find is fascinating is cuz well the folks who were in trouble in the news yeah it generally was quite expensive seconds were 12% and then there’s usually like a lender fee as well like 1 2% so it’s much more expensive for all parties
(18:37) involved versus you’re able to do this all internally sort of yeah I was able to avoid a lot of the fees yeah like there’s no fee on the vtb right no lender fee no nothing that’s what one of the really nice things about it right yeah and the point I’m trying to get across is like this is what Pros do yeah versus still retail investors yeah still they they pay more fees their terms usually aren’t as good um and that’s again that’s the point I’m trying to get across is and then at the
(19:07) same time the people that are in a lot of financial trouble right now are are have the have the more expensive mortgages yeah yeah I I’m a very cautious person like I I don’t want to put myself in a position where I’m taking a big big risk so although 11% like to me that’s that was a little uncomfortable cuz that’s the highest I’ve ever paid for a mortgage but when when I factored in all the numbers I ran I ran my numbers it still cash flowed MH because I’m getting 4 and a half% on the
(19:34) first right so the numbers still looked good and I knew I had an exit strategy plus as part of the negotiations we got three vacant units so we were able to to increase the the rent quite a bit so you mentioned you have you had exits and everything the so and you had three bacon units so it’s going to be easier to make the deal work mhm so even if you weren’t able to get the actra like you know like I’m guessing did the deal work still for you without the extra units like I’m trying to expain
(20:04) for the the for the listeners um what conservative investing looks like yeah right like for example when I’m looking at deals I need the deal to work as is M uh without all the other stuff around it like for example I’m trying to buy near manufacturing plants but like we know like you can’t rely on anything nothing’s ever nothing’s for certain that’s why I need the deal to work as is without any changes to it yeah it what what’s what was your experience like well we it was in the agreement so I
(20:34) wasn’t going to close if I didn’t get the vacant units but I also had a hold back so the lawyer um actually suggested this we got I think it was 10 grand for the units that were not going to be delivered vacant so we can use that 10 grand to hire par legal cover uh expenses like for the month for missed rent like that sort of thing 10 grand per unit right so that was yeah that was kind of uh which so one of part of this kind of complic complicated deal or one of the things that complicated the deal a
(21:08) little bit was that one of the tenants was being evicted and she’s from my understanding a professional tenant oh great yeah so uh we we have been kind of using the hold back for that for that one particular unit um but uh yeah I mean that’s the only sort of complication that we’ve experienced yeah you structed this deal quite well I had to because it was my first apartment building right and I and I do have a partner in this as well and I think a lot of people feel this way when you have other people involved like I
(21:40) feel this way for sure I would rather lose money than lose money for other people and um that’s why I’m just very careful very careful when it comes to underwriting this is super interesting because I have literally had a guest on who uh Ben Burger on he shared how the wholesalers he had he had bacon possession in the agreement U but the wholesaler but the tenant didn’t leave before closing yeah so yeah you and I would have done a hold back he didn’t his wholesaler was like oh it’ll be fine
(22:13) it’ll be be fine it’ll be fine wasn’t fine yeah be be cautious people yeah yeah talk to your lawyer or if you really want the place like you got a steal on it then maybe you just have to factor in how much it’s going to cost you to get this tenant out like you know it’s going to take you a year what what’s the cost of missed rent for that time hiring a pair IL legal all that just Factor all that into your underwriting yeah there there’s risks you have to accept yeah depending on all sorts of things like
(22:42) for example if this is a bidding war then you probably have to you can’t be as tough on your negotiation but yeah that’s pretty cool yeah and then and then tell me about uh tell me what the plan is now for the property so so you have approval to add the two new units so we we got a minor variance approval for the additional two units uh one of them was for the size of the unit actually no we just needed the one minor variant and we are working with Ken beac andem to submit plans to um put a second story on a storage unit so that’s the
(23:16) 13th unit on the opposite side of the building opposite of the laundry room there’s a brick storage room that was attached to the building and we’re we’re topping it up with a second story to build like a little one-bedroom Loft cool and how big is that uh it’s going to be probably around the same like 300 square feet small yeah it’s a micro unit yeah and then how much is it going to cost you and what’s kind of renting you get uh I I think like preliminary numbers it was going to cost about 150 roughly to
(23:48) build that 13th unit with everything and um we’re project or projecting that we’re going to get about 1,500 in rent for it roughly oh so that’s a good ratio of rent to uh to what your investment mhm plus utilities yeah so again it’s still early but we are looking to put a separate hydrometer there it’s going to have electric baseboard heaters and then water where we are looking to separate the water meters eventually but for the time being we’re covering water super cool and then tell me about the
(24:26) financing like tell me about the exit so we were talking about this a little bit earlier it the plan eventually is to take it to a cmhc loan right and they changed their policies late last year 2023 you can no longer refinance private funds directly into a sehc loan so we’re going to have to at least at this time take it to a conventional loan for two years and then refinance it it has to be an approved lender M so if you go on the CC website they have a list of approved lenders as long as your mortgage is with
(25:01) one of those then they’ll allow you to refinance the property and you I would again discussing before we started recording this is kind of dumb yeah you created Supply yeah right you this project is something the government should be supporting like you created Supply you didn’t just like remove affordable housing from the market like like most bur investor Department building people are doing you you literally added almost 20% Supply yeah to your building yeah well I I think from my understanding I’m
(25:30) not 100% sure on this but I think CC was getting so many applications over the last couple years that they wanted to slow things down a little bit and this was their way of doing that right and it’s working because tons of people that are in the apartment building space have VBS or private financing or Bridge loans or whatever it is well yeah CMC has enabled the financialization of apartment buildings yeah yeah exactly and I think when people get when people get a better understanding of that I I understand why the see you see has a
(25:59) slow down yeah because people like you know the media and and politicians are not happy about this yeah the removal of affordable hosing from from apartment buildings markets sure sure yeah I’m hoping they would prioritize you again because you’re doing what is you’re part of the solution you’re creating housing M I’m hoping that’s one of the threshold for you to get ahead of other people that that would be interesting actually like if you are adding units if if they would bump you up uh or or kind of wave that um no
(26:30) private financing Clause that they have but we’ll see things might change over the next couple years so wait private financing if you self Finance the whole thing would that still be no if it’s if there’s no mortgage if it’s free and clear then you should be okay but again so this is one thing that but this is one thing that I’ve heard some people are saying that they’ll pay off the the private just temporarily and then take it to cmhc but they’re starting to crack down on that right they’re they’re
(26:59) looking up the history to see if there were any loans registered yeah who just has like that kind of money lying around though well they they borrow it like PE notes or whatever and and paid off oh my God prary notes to WIP about the mortgage for either that or they register against another property if they have a bunch of equity in another building or something yeah yeah yeah got it interesting yeah cuz yeah that’s that’s capital for you it’ll find a way yeah yeah very so what so do you know do
(27:30) you have your approval lender in mind for this project I’m not even looking at that right now because the vtb we have good terms right now so we’re just doing we’re flipping a couple of the units we’re adding those two additional units you’re not ready for refi anyways not not ready yet yeah and yeah because you got into this project before you knew about this policy change well it was right around the time almost exactly when we closed which was we closed in September 2023 mhm and that’s when the policy had
(27:59) changed right around then mhm yeah fascinating but even even though even if it had changed 6 months prior I probably still would have done the same thing because we’ve got good terms right so okay yeah and then do you uh you’re underwriting so what are you projecting for your after renovation value so there’s um there’s a cagec calculator that I just found out about where you can kind of see how much you can borrow the the the loan amount that you’d be able to borrow or the value of the building and I punched in just
(28:33) yesterday actually all the projected numbers projected rents and expenses and all that and I think the loan amount that I saw was about 3 million it was somewhere between 2.9 and 3 million right right so we bought it for two once we complete these extra units turn over a couple more units then we’re going to be at roughly $3 million and you’re happy with that yeah that’s a big lift right it’s a big it’s a 50% increase right so and um you mentioned you have an you have you have a partner on this as well
(29:05) yeah is that Equity partner is this your wife who is this well my wife’s my partner on everything so I don’t count her as a an equity partner technically although she is but we have another partner so um yeah it’s an equity partner I don’t do I don’t really like to over leverage and borrow too much I know some cases it works but for me I’d rather raise equity and be on the safe side right my point my point about leverage uh borrowing all those sorts of things is like it’s double-edged sword
(29:40) yeah your your upside could be higher but also you have a your your window success is shrinking yeah right and again you know there’s lots of History like anyone who’s gone bankrupt is because they couldn’t service their debt yeah so you know be cautious with the use of thatt there’s a time and and place for that like if you’re buying your first property and you don’t have that much to lose you’re willing to take more risks right well say you have no debt too yeah right so you live in your
(30:09) parents house still exactly you have no rent or mortgage payments or minimum you can take some more risk but if you’ve been working for a couple years to build a stable portfolio and you’ve worked hard and sacrificed a lot it doesn’t make as much sense for you to take on that extra risk cuz the reward isn’t going to be as great mhm yeah yeah cuz literally I’ve had guest of this show who’ve had their previous games wiped out over the last two years mhm like all that all that Blood Sweat and Tears yeah
(30:37) to have nothing to show for it yeah exactly yeah but again like if they survive I say I say on the show if you can survive these times you’ll likely be you’ll be laughing 10 years from now yeah right but again right now it’s about survival for some yep so yeah so you mentioned you don’t like too much debt and it’s interesting because we’ll get to your other projects because you have several different your your projects are quite varied yeah and then you were sharing before we’re recording
(31:04) that your structure of your Partnerships is different across deals mhm cuz here you found a deal here you’re there’s quite a bit of lifting heavy lifting for you to do yeah even though you’re not like swinging hammers I know but yeah how how did you structure the deal on this one with your Equity partner yeah well so we actually um opened a new Corp and we were we’re 5050 on the on the equity side but the amount of capital that we’ve each invested is a little bit different again because I am
(31:37) doing so much of the heavy lifting yeah and um yeah this was this was the case here and this was my my first apartment building as I mentioned same for the investor that’s working with us as well so we just we both wanted to kind of experience what it’s like to to own an apartment building and we just struck Ed it this way for now but moving forward obviously things might change right on on other deals so yeah and this partner is is the equity partner they’re passive they are passive yeah yeah and then this
(32:10) is someone you already knew this is someone I know yeah um known him for a couple years um it’s always the case for us like I don’t really meet anyone on Instagram and then do a deal with them like that doesn’t I don’t think that really happens too often I think people want to get to know a little bit yeah I’m sure there’s some of that going on I think some people kind of specialize in that but for the most part the people that I know they build relationships with their Partners right and it takes
(32:39) time to get to know them they get to know you um that’s kind of more my style right right yeah this is someone you from like work or from church or something no it’s uh it’s actually another investor uh we’re part of like some of the same investment groups yeah yeah so networking works it works for sure yeah very cool you want to share to which group yeah I can share it one of the groups that I often attend is Durham Mari oh yeah Quinton yeah Quinn’s awesome he’s actually the the reason
(33:10) that I bought this building in the first place I I’ve consulted with him on the numbers like he talked me out of walking away because I was like oh my God this is you know bigger numbers than I thought that everything the refinance looks this way what what do you think and he was like no the numbers look pretty good I so it’s always good to consult with your mentors and and even pay a little bit just to get the the right advice right right yeah can I were you in his training courses or you student of his I yeah first of all I was
(33:39) a coaching client of his this was a couple years ago so he got he got me from single family homes to a fiveplex and a fourplex and like you know bigger properties at the time and then I’ve taken his apartment building investing classes as well God I’ve taken all of his classes his JV classes um vtb classes is everything yeah do uh I’ll I’ll post the link to his website in the show notes uh but yeah anyone can look up germ REI Quinton dusza yeah he’s been on the show I think three times yep yeah hopefully
(34:13) it’s not a stranger to anyone and what what I like about Quinton is his everything he offers is quite affordable it is yeah it’s amazing like his some of these courses that I’ve taken were like 500 bucks yeah which I’ve gotten so much value like just look at this one deal alone apartment so I took his apartment building class I got a vtb I took his vtb class and I have a JV partner I took his JV class it literally all came together in one deal and just that the one deal alone pays for everything I’ve
(34:44) I paid to to take these courses I love quality education yeah I love it more when it’s when the price is reasonable yeah yeah cuz there’s lots of stuff out there that’s really expensive yeah and yeah they don’t have much track record which is nuts even worse when some of them they’re producing like students who go bankrupt yeah yeah yeah i’ I’ve heard of these things there’s a lot of people offering courses I don’t know what’s good and what’s not I’m not sure I I
(35:11) don’t go out there and explore all sorts of courses but uh I just know the ones that I like and I kind of stick to them right well because you’re not a you’re not an active realtor anymore like I still talk to clients and when they tell me like the stuff that are taught I’m like yeah just the same conversation I have with you like too much debt your your probability of success shrinks yeah right like you know if your interest payments are too much and you can’t support it yeah what what choice do you
(35:38) have yeah that’s it’s a scary place to be in yeah for many super cool all right now can we move on to your your four Town hoses sure yeah tell me about the four Town hoses Yep they’re in Welland um picked them up in March 2022 right before the rates skyrocketed before the market it dipped roughly 30% are you okay with the price you paid uh yeah so 375 per per unit it was off Market sounds pretty cheap it’s cheap they’re they’re older so they’re built in the 1920s um the owner wow I don’t know if
(36:15) I’ve seen towns that old before yeah yeah it’s older for sure it’s it’s a pretty unique place because there aren’t that many town homes in Wellen that are like that there’s condo towns but these ones are Freehold um so yeah I got a vtb on that as well actually and I got 1% interest only for 12 months myage rates are going up my mortgage payment was $226 a month per property um so yeah I was trying to negotiate a longer term they refused but you know whatever I thought that’s an amazing amazing term I’ll take it
(36:59) they had four um tenants in the property and I was pretty confident that I’d be able to work with a paral to provide an incentive to the tenants for them to move on unfortunately three of the four refused and we had to figure it out from there right so we thought we’re going to have to probably duplex these we’re going to file an n13 for renovations all right yep we got um there were some delays and and things and the pargal that I worked with kind of screwed up a little bit on a few things but at the
(37:38) end of the day we we did get to our n13 hearing and they sided with us because we have our permits we have everything ready to go mhm and we were able to provide an incentive anyway to the tenants and now we’re in the process of of actually converting them so just to kind of put things in perspective once our uh 12 months was over we had to scramble to get financing for these and it was hard because you know we have couple mortgages it’s not that easy to get mortgages anymore rates were going up we were getting about a th a month on
(38:11) some of these properties in rent and the mortgage payment was two grand a month so we’re in that situation where it’s like man we’re we’re in some trouble if we don’t do something about this um so that’s yeah the the the process of converting these is going to increase our rent to about 2600 a month up and down so we’re going to be in a more comfortable situation and and uh your duplexing strategy is different like most people duplex into the basement MH here you’re doing main
(38:45) floor basement is one unit yeah and then second floor is another unit yeah yeah can you can you explain the the the the investment hypothesis to get you to that strategy sure so if you remember I mentioned that first property I bought in Hamilton the single family that was used as an illegal duplex so it had a main floor unit and an upper unit okay so it made me think because I had brought Ken Beacon Dam at the time through and he told me this is actually you can do this but you have to make some adjustments to to make it a legal
(39:17) two unit so I thought I can probably do the same thing with these well in town homes right oh so experience helped yeah and guidance yeah yeah expert advice guidance yeah if I were to do it in the basement an extra unit you’d have to um like Jackhammer the concrete run all your new pipes frame drywall all this stuff right so it was going to be more costly than just putting a hallway on the main floor putting separating doors and doing it that way so ended up being cheaper to to yeah I like cheaper plus the way we’ve set it up if we’re allowed
(39:56) to put a third unit in in the future we’ve we’ve got a layout which would allow us to put an extra like extend the hallway and bring an extra door down to the basement so you can have three units within this one space right right yeah so we’re we just found it made more sense for us to do that you mentioned like Jack har in the basement is it not enough ceiling height is that why no I mean I mean for your drains like you got a rough in plumbing right right CU you’re no Plumbing in the basement so you just rough in it’s an
(40:23) unfinished basement yeah but do you have the ceiling height or no we have from my understanding standing so I worked with Andy Tran on this who was awesome by the way anyone listening like both Andy Tran and Ken Beacon Dam are great for these kinds of things yeah I don’t know how many times yeah um we have I think just an up sealing height so I think what Andy was saying like if we put thin vinyl flooring we should be good um so yeah flooring put down some area rugs yeah so the floors are warmer yeah exactly so I
(40:54) think that’s it that’s that’s what we would do fantastic and what’s the budget for the Rena the the renovation itself we got quoted 50,000 plus hsd pretty much roughly not bad for duplex conversion but we had to work to bring that down like I had to scramble and just change everything because again like when you work with a designer they’re they’re often they have someone on their team that’s doing these layouts for you and they’re trying to come up with something functional and
(41:27) beautiful maximiz the and as an inv that’s not always your priority in this case my priority was doing this for like as little as possible and having a legal unit right so for example they wanted because the main floor has a powder room right so we needed to put a shower in there so they wanted to uh rip out the closet next to the powder room there was a a back door that led to the backyard they wanted to reposition that so move it from there put it in the living room repos like reframe the deck and do all this stuff
(42:01) right I’m like there’s no way we’re not I’m not for a rich home owner yeah like exactly if if this is your home and you want that’s fine so what we did was we we ripped out the vanity instead we put a shower where the vanity was and we put like this really thin floating vanity up against the wall between the shower and the toilet right so we we didn’t rip change any of the framing we just kept it exactly as it was and that which really brings the budget down yeah and the time to execute exactly that’s one
(42:32) example another one was upstairs the engineer suggested we rip out one of the walls we had to like um which is always expensive yeah yeah we had to um support the CU it was a loadbearing wall so we had to support it and more money yeah tons of money more money time tons of money so instead we literally just cut out one of the non-load bearing bearing walls and we opened up the space that way instead like how much did we save by doing that you create a doorway or pass through or just a window um it was it’s
(43:04) a large opening yeah it’s probably maybe 8 ft wide but it’s a non-load bearing wall and it was the wall between there was a bedroom and like kind of a small den and that we open it to create a kitchen and living room yeah it’s funny when people just make designs with no budget no budget in mine yeah but but again if you’re in experienced and it’s your first time working with a designer you might you have no clue like you might just be like oh okay this is what you suggest let’s do it you’re the
(43:34) expert yeah yeah but also it takes time obviously to to redesign exactly but I think for anyone listening you can push back sometimes and try to find more creative ways to to lower your budget because I don’t want to spend I could have easily spent 150,000 on each of these so a total of 600,000 across instead we’re at let’s say 70,000 with carrying cost per unit it’s a significant amount it’s like half the budget and just to work just to just to let investors listeners know what you’re
(44:04) doing is not that common versus when we when we do basement Suites it’s very cookie cutter this is how you fit in two bedrooms and that’s how you’re going to maximize your rent yeah exactly it’s like here’s here’s three layouts that we do all the time pick one yeah yeah versus yours was very custom job yeah for sure and you have to work with everyone the the contractor has to be on board like everybody got to work together to to make this happen and where’d you find this designer the well it’s Andy Andy Trent
(44:36) his his crew was the ones who they were the ones doing all the layouts for me they should know they should know that we’re on a well that’s it was my first time working with Andy right so I think once I did one he understood what my priorities were yeah yeah and he automatically adjusted the rest right and and he was so cool about it like he he didn’t give me a hard time because I I was probably not I was probably a little annoying you know just constantly making adjustments but he was really good and he he never got frustrated or
(45:06) anything which I appreciated it’d be nice if there’s like a internet widget and just like slide down your budget and then just automatically redesigns to fit your budget yeah yeah yeah that would be cool like a chat GPT type of thing lay this out for me for the lowest price possible well even just for us like we’re like what’s the minimum Mone need to put down to make this thing Break Even yeah be like that down all right do it reduce the budget by 60% all right I can still make money do it exactly
(45:35) exactly and where are you with these projects now so we did we completed one we’re actually hopefully closing on a refi today so that’s the nice thing these all have separate titles so we can refinance them individually or get a blanket mortgage which again we’re going to go to cmhc and get a mortgage across all of them eventually but uh yeah we’re refinancing the one today the second one we’re working on is about 70% complete same thing we’ll refinance that and then the other two the tenants are
(46:04) leaving hopefully end of this month in April fascinating you have four properties on separate titles but you bought them together with separate corpse so four cor yeah four Corps two Corps yeah so we we offset like the first one is under one Corp and the third one’s under that same cor right so they’re not adjacent so titles don’t merge yeah yeah yeah and hopefully listeners caught that cuz that’s a very expensive mistake otherwise yeah yeah so just to clarify if you buy two side by side properties two adjacent properties
(46:35) two adjacent properties sorry uh under the same either your personal name or under the same Corporation they will merge on closing you have disaster you’ve lost a lot of value yeah which is just a paper thing exactly you you can I think sever them later but there’s no to pay for exactly survey done go to the city Point yeah there’s no point of doing that so um yeah just buy either like put your name and then your spouse’s name on the other one or two corporations yeah yeah I think the only time you probably do that is if you’re
(47:05) going to tear everything down and build one house I’ve heard I’ve heard of people doing it on purpose for that exact reason to develop so if they’re buying multiple properties they want title to merge so it’s easier to develop yeah like you’re Drake buying in battle path I think I believe he bought a couple Lots so he doesn’t care if they merge because he’s going to tear them all down and build one super hose exactly we’re not Drake yeah yeah so actually speaking of uh severing it’s
(47:30) something that I’m actually exploring on another property we have before we go there I want to finish off these town houses you mentioned that you can bring this to cmhc as aplex even though they’re the separate title separate you have two owners y they’ll still treat it as one entity from my understanding they will I I did consult with a mortgage broker specifically for this situation and because they’re side by side as long as I’m the owner of the corporations then there shouldn’t be any issues any
(47:57) percent percentage ownership you have to have or just just that you are no I’m not sure if there’s um I’m not sure if I have to have a specific percentage but yeah I mean in this case it’s 50% so I hope that’s enough super cool yeah I was just thinking because yeah of another American lender thing example but anyways and then and then explain to me the benefit of going through CC for this now will be an aplex yeah um so through CC you can get 40 to 50 Year Ms instead of your traditional like a conventional
(48:31) lender will give you 25 on the commercial side right oh sorry this is spelled it out 40 to 50 year amortization and your payments are spread over 40 to 50 years which is I don’t believe anyone else can offer you that kind of amortization uh some be lenders like we got a be lender on actually the the one of the Town Homes they’re doing a 35 year M for us oh okay yeah can can you shout them out or um yeah it’s Haven I haven’t even heard of them yeah I mean it’s a be lender so probably not as many
(49:02) people know about them I’m not sure though if you can go directly to Haven tree I think you would have to do it through a broker yeah super cool you want to shout out your broker yeah I work with StreetWise oh Delia team Delia’s team yeah yeah Dalia another friend of the show I just saw her this weekend that’s super cool that’s why it’s like the whole old saying it’s not what you know it’s who you know exactly like all these I didn’t know about this yeah but I know D you y so that that’s
(49:33) been amazing cuz uh we got pretty decent terms on this through a be lender I think our rat’s like 7.15 which isn’t I know it’s sounds high but compare because we can’t get an A- lender right now just number of mortgages we have so a variable is like 6.9 right now 6.95 on CC exactly so you get 7.
(49:55) 15 but you get the extra five years yeah so and I’m guessing how were they for qualifying uh like did you have to give them much yeah yeah of course you have to give them everything everything yeah you got to give it was like getting an A lender for sure right for sure okay so there they still required a lot of diligence because my experience with Like Home Trust for example is they don’t ask for nearly as much as a SK Bank no in this case they ask for a lot but I was happy to do it yeah is sorry in 7.
(50:23) 15 interest rate was that fixed or variable it’s a one-year fix that’s really good yeah damn and then but you can renew yeah I I’m pretty sure and and if the rates come down next year like it might be better right so who knows that’s a really good rate yeah for one year is it open like no it’s it’s not open no I don’t think it’s open but it’s one year so I don’t care fixed yeah it’s only a year yeah this is great damn that’s that’s that’s cheap that’s cheaper than most yeah we have variables
(51:02) that are more expensive than that I think my helck is more than this oh for sure yeah cuz Prime is 7.2 right yeah yeah okay hopefully the listener picked that up H tree show it Street wise 7.1% on a onee fixed 35 year am obviously every sit everybody’s situation is different I don’t know if everyone would get that same rate but I know but this is a flip project yeah like that’s it’s usually the you guys usually pay the most no it’s not a flip like we’re keeping it we’re holding it uh yes I know it’s a repositioning
(51:36) right so it’s I think the finance is usually similar for a bur or flip I guess so yeah I mean there’s yeah I’m not sure I’m not too sure super cool okay so uh yeah four sorry I cut you off 40e 50-year amortization BC MHC this is the m select program M select oh no sorry the 50 year is mli select the 40 year you can get with like a standard cmhc loan oh so that’s still favorable yeah so that’s what we’re getting on the fiveplex that we’re refinancing now which we haven’t talked about yet but we are time do we
(52:14) have I know my nerdy listeners will appreciate keep we we don’t have to get into it it’s fine but yeah I’m sure my nerdy listeners would like to get to it and appreciate you going into this level of detail about all this sort of stuff and you know I love it when guests know this a little detail on their deals yeah is you be surprised if they don’t have detail on their own deals yeah yeah and that’s us a sign of someone who you know who’s analytical and a good operator yeah there’s there’s a lot to remember
(52:41) there’s a lot going on all at once but I try to remember the numbers as much as possible uh so standard mortgage 40-year amortization with CM cmhc what kind of terms are you expecting so on that one the way the way it works for one listening that doesn’t really understand the the rate is based on the 5year CMB Canadian mortgage Bond B yeah so um I think right now last I checked it was at about 3.
(53:14) 7 right and then the lender will add basis points as they’re spread so in this case they’re adding 200 basis points okay so we’re going to be at roughly 5.7% on the on the loan the interest which again like that’s way better than what you’d be getting cuz I had a oneye on that property with deard and my rate was like 7.
(53:37) 89 25 year M all right so my my payments are going to come down substantially my interest rate is going to be much lower it’s way better to go to sehc that’s why it’s they’re getting so many applications right yeah which is always concern because cc is the division of government yeah government’s not supposed to get supposed to take everything away from Private Industry well the SEI is is an an insurer so they’re not the lender the lender and there insurers out there yeah yeah yeah so it’s uh I mean I’m happy to do it
(54:05) because it makes sense for me but I I understand yeah there it would be nice if there were more options like that instead of just the one kind of monopolizing the market yeah because they offer the best rates in their government yeah exactly they have different cost basis than Private Industry but again like what you’re doing here with these tow houses for example is you’re doing what the government wants yeah well your benefiting Society you’ve doubled the housing MH right with your own with private funds yeah can we can we I want
(54:35) to stay on this example with the Ford Townes um just to give an example of a different uh joint venture structure can you share on that how the how this joint vure structure works so we have four Partners um actually kind of Interest interesting thing about this is initially we had bought one of them ourselves with no partner and then we added partner on later so we s they’re all Equity Partners um yeah we’re 50/50 on all of them 50-50 ownership 5050 ownership yeah yeah I mean every Situation’s a
(55:11) little different you got to also talk to the people and see what their Situation’s like at the time because we we just said we’re going to do duplex Renovations uh we need 70k to do these not everyone’s in the same position so we’ve had to kind of adjust based on the person’s needs and so for the new investor that’s not easy to do because for say a brand new investor imagine like you 10 years ago like trying to negotiate vure deals yeah on this it’s not a vanilla project no it’s hardly
(55:45) turn key yeah it’s not 100-year old houses in in well and yeah like I’ve never seen these I can’t even recall yeah no there’s some yeah there’s some of these yeah there’s some on like Bay Street and Hamilton but yeah okay so I can’t I I can’t I do have context of what these things look like um they’re not run down like some of the ones in Hamilton that you see right like the brick is all rotted and yeah you know the foundations thousands and thousands in Brick repointing yeah yeah yeah no
(56:14) it’s not like that first of all these have vinyl sighting so you can’t really tell by looking at it that it’s 100 years old um but uh yeah I mean it’s not like you said not just a simple Buy and Hold and do nothing to it right and then uh what did your partners have to bring Capital credit no in this case they they brought Capital all of them we had different exit strategies when we when we initially purchased and I think one of them was to get a commercial across all of them so that’s why we thought it would make sense for
(56:51) us to have our corporations on title um but yeah does make things a little more complicated because now we have to personally qualify for all of these mortgages while we’re repositioning the assets and that’s that’s actually because investing is not a straight line yeah it doesn’t always it doesn’t always go to plan but this is going to likely work out quite well like sorry sorry we haven’t even asked like what is your after repair value we just had one appraised a completed the completed one
(57:22) at 505 so let’s paint let’s start over so it’s 375 to buy yep what was your renovation 70 including carrying costs and that’s important cuz carrying costs are a cost because it was 50 for the Renault plus hsd and then the rest of that was carrying costs so that’s a pretty good uplift yep for appraisal 505 and you’re happy with the appraisal I’m happy with it for sure actually I could have gotten a larger uh mortgage on the refi but I kept it a little bit lower because again I’m I am
(58:03) conservative I don’t want to borrow too much and and be in a bad spot so I wanted to make sure it cash flowed after we refi right so you you do your own lead generation to find these prop these deals yeah so even if you had all the capital you needed how many deals do you think you could turn out a year I think finding deals is one of my strength right I can I can find a lot of deals but then um I just I need more Capital to do it important trying to get get across is um you know like there’s like there’s
(58:41) Northern Ontario investors they were just buying anything in a market where there were no buyers yeah how else do you acquire 200 houses in a market with population of 50,000 yeah right it’s probably it was probably a complete sub buyers market right but these deals that you’re unearthing they I think a lot of people would want them yeah I think so um and we’re making these deals right we’re like we’re creating these opportunities we’re buying things that because for example that building that
(59:11) we bought I think it was had been on the market a year before right the 11 the 11 unit and no one really seemed to want it it it just expired right so and then that’s not how I came across that opportunity it wasn’t an expired listing type of thing but um yeah like we I I even mentioned it because I was working with a real estate agent he was sending me opportunities and he’s like oh I heard you you got something I told him about the property he’s like yeah I went to see that last year I don’t think that was a good deal
(59:40) and then I told him about the terms that I negotiate he’s like oh oh we weren’t getting those terms last year so yeah yeah because things have changed like the market changed terms changed yeah yeah vacant units VBS like all these things make a big difference yeah yeah the deal got better the deal got stale yeah exactly yeah and people need to remember that you know people’s people’s situations change something obviously changed for the seller to get more motivated yeah the market didn’t help
(1:00:07) either yeah because I I think the Market’s pretty soft right now for for apartment buildings um I I don’t know about that because I don’t you don’t see them come up too often right a good deal on an apartment building you don’t you don’t see it go on the MLS often I think they’re often traded off market and there’s always demand for for those types of properties from what I’ve seen yeah fascinating it’s just the rates so high that it makes things more difficult the DCR the debt coverage ratio is one
(1:00:33) of the main factors of of the loan right and um yeah that’s all impacted by the the rate so you’re not even seeing you’re not even seeing increased deal flow more opportunity well because we’ve probably peaked in rates yeah I’m not really looking for opportunities right now cuz I have these different projects going on like my focus is 100% on stabilizing portfolio right yeah I think it’s a that’s a thank you for sharing I think it’s a great share is that you know take care of what you got yeah before you
(1:01:06) move on yeah and apologies for picking on the the investors up north in Ontario but they have like I believe uh 200 of their 600 units are sitting vacant mhm I don’t know too much about that whole situation but how would you feel if a third of your portfolio was sitting vacant you’d probably be very stressed out I can imagine units yeah yeah my point is someone someone was not watching the operation yeah not nearly as closely as you’re watching yours well mine is a much smaller operation it’s a
(1:01:36) lot easier to keep track of you know a couple units under Renovations than having 600 units how much of your portfolio is is vacant right now uh not much that’s my point yeah not much vacancy makes me sick yeah because it’s an expensive yeah I don’t like expenses I like cash flow yeah I don’t like things coming out of my pocket for sure for sure sometimes you need to you need to have vacancies to address certain issues uh certain repairs that sort of thing but yeah but this is a this is part of the plan yeah structural
(1:02:13) vacancy is never part of the plan yeah as in like no renovations going on don’t know when you’re going to have permits don’t have the money to renovate yeah no that’s a different situation altogether right yeah that’d be that makes me sick yeah fast all right cool and then you have another project on the go how many open projects do you have right now that’s that’s in the uh just just those uh town homes in the building but um the the the last thing I was going to say is we have this fourplex in St Catherine’s
(1:02:45) that I think at one point was two semi detached homes so it’s very early but we are looking at seeing if we can sever again maybe titles merged at one point cuz we were talking about that if we can sever this fourplex into two duplexes then we’d have a pretty significant gain in value just from doing that one thing alone right so just something to consider for anyone listening that has that type of property how’ you find the deal that one was on off market like I did a little flyer campaign um I I it was a very targeted
(1:03:16) campaign and this was a few years ago so um yeah how did you get the flyer in the hands of the owner did they live there uh no but we there is different ways we had vas try to look things up we would drive to different properties sometimes and like leave letters in the mailbox for the owner there’s just all sorts of different things that we did at the time yeah so you’re you’re you’re on the you’re on the round yeah you’re on the road yeah yeah this isn’t just this isn’t passive easy like you’re working
(1:03:48) yeah I don’t do that anymore now because I’m not targeting those types of properties but I I did that a lot before and it worked I was able to pick up good properties doing that right yeah and then we mentioned last time you on the show like this is not what you’re doing for realtor as part of your realtor business you’re doing this for your own portfolio for us yeah right because the amount of investment you’re making into acquisition is just significant yeah I mean I it just to me doesn’t make as
(1:04:12) much sense to go do all this work and get a $155,000 paycheck for it right uh so I’d rather pick them up and hold them long term yeah because that’s where the wealth is yeah exactly not the transaction yeah you need you need the transactions like as Realtors if if that’s your main thing you need the cash flow for most people but uh yeah longterm is the way to go yeah so my point when I I made earlier when when new Realtors ask me for advice so to give context pretty much always they have a job already so they
(1:04:48) want to do realt terms of parttime so if you already have a job you have income good income already I’d focus on being an investor not a realer yeah right because that because the the investor long term will make you more money yeah and there’s a good chance whatever you’re doing for a living is your highest and best use MH because you’re likely good at it you went to school for it right all sorts of things yeah versus becoming a realtor like it’s not easy yeah maybe they they want to do that to
(1:05:14) be around people more often and to learn from them and that sort of thing but there’s other ways to do that yeah there’s other ways to do it yeah cool and how did you identify the opportunity to did the fourplex work as itself the St St Catherine’s fourplex work work as a standalone deal yeah or just in your diligence you found the sever opportunity well we’ve owned this for a couple years but I just just thought of this recently I thought let me look into it so um so you’re already own it so yes listeners do look over your
(1:05:46) portfolio and see if there’s ways to extract more value yeah I mean there’s there’s always ways right and if if we can increase the value of this building by 100 Grand just by severing it it might cost us I don’t know 5 10 grand to do that then it makes sense um so we ordered a Freedom of Information Form directly from the city and that will help us determine if you know there was separate servicing for um for water Hydro like all these things as much information as we can compile we’ll send
(1:06:13) that over to the lawyer and and go from there fascinating yeah you stick your chat TBT first before it send to the lawyer I read this PDF I’m joking I’m joking and and you think you can do it I don’t know I know that there’s separate water servicing for each side oh good yeah um there’s separate hydrometers for each side but I’m not sure I don’t know if it was ever used as two semi detached properties well that’s a lawyer’s job interesting this will be fascinating for the listeners benefit like you you
(1:06:51) essentially bought wholesale and then if you’re able to sever you’re essentially going to go detail yeah like each indiv just like condos are more all condos are more expensive per unit a condo is more expensive than buying a whole apartment building yeah which is why apartment building owners generally want to condominium ISE them yeah but then cities don’t want it because it removes rental housing right but you know so many cities don’t like landlords so maybe like hey I I’ll I’ll stop being a
(1:07:17) landlord if you let me do this yeah yeah here you go we don’t like tenants either yeah which often feels the way as being a landlord yeah yeah but yeah what is how’s your experience with all these different cities you talked about Wellen talked about Branford talk about St Catherine are they all been are they all been friendly so far every city like Hamilton as well they’ve all been really good well and we had to get minor variances for parking that went well um the inspectors have been great no issues with them St
(1:07:47) Catherine’s I haven’t done any like conversions or anything there so I’m not 100% sure um Hamilton was great um yeah it’s it’s all been good no no no neighbor showed up for your minor variances or anything uh yeah the tenants the tenants 100% And they were smart too they came up with some good reasons um I was scared but Andy Tran was a professional he was awesome he just handled it and yeah I don’t know it’s the tow houses yeah the town houses cuz uh obviously I was getting M13 so I
(1:08:21) wanted to remove the tenants they showed up gave their reasons why the parking shouldn’t we shouldn’t be granted a minor variance for parking and he came up with his reasons and it worked out yeah my my right to park on the driveway is greater than someone else having housing no it was actually clever it was so we have 10um parking which is allowed and and well in but one of the TM is in line yeah so one car in front of the other one car in front of the other and one of the parking spaces was kind of
(1:08:52) like adjacent to the house to the house right so when you’d open your door if you open too far you might knock the the house so anyway she was saying that you know the parking’s super tight if there ever was a fire or something and you had to get out that the car might block your path and you wouldn’t be able to squeeze out of there and whatnot so it was it was clever and then the the the tribunal is it I think it was the council adjustments yeah Committee of adjustments yeah and they didn’t buy it
(1:09:23) no because it wasn’t an an emergency exit right like you’re not going to exit from the back of the house go around you’re just going to exit from the front or I think Andy was saying that if you can just exit from the back then you’re going to be outside anyway so you’re going to be safe um and yeah and then the the one of the committee of adjustments members said why don’t you put parking in the backyard instead and then Andy’s argument was well you know as Canadians we like to enjoy our yards
(1:09:51) in the summertime and this is going to be taking away our recreational space so they they that and everything everything he said made sense yeah well it cost you a lot it would cost you more money exactly I don’t want to do backyard fascinating and then um we’re georia we’re running out of time yeah no worries uh you have a podcast I’ve heard it yeah I’ve been on it the well-off podcast Y what can you what else can you tell me about your podcast uh yeah we just always have new guests mostly
(1:10:21) Canadians that are investing I’ve had actually people that are investing in the US as well so I’ll have you talk about that soon um yeah I’ve been doing it for a while but um yeah I would love to have you guys check that out too and um it’s always like as podcast hosts we appreciate you guys sharing this with friends and family so if you guys like this one make sure to share it let people know so that uh orone can get more listeners and and uh yeah leave us some reviews yeah we’re not the we’re
(1:10:46) not the fancy types either we just have good Investments yeah George thanks for much for doing this thanks for being so transparent your numbers and Deals sure happy to do that yeah because again like I said a lot of people don’t know the details of their own deals yeah and I appreciate that you’re that you’re trying you’re keeping a close eye on your portfolio to make sure it’s optimized and yeah you know eliminate vacancy yeah yeah that’s a big one and just making sure that people’s money is safe when they’re
(1:11:14) investing with us right that’s the biggest thing and when I say us I mean me and my wife but yeah very cool thanks again for doing this yeah no problem thank you for having me on thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.
(1:11:51) com below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor training.com

Subscribe on Android
 

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UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Multifamily Development In Toronto With Ming Lim

We just returned from Cherry and I’s post tax season workation where I get my wife back, she gets a well deserved vacation as tax season is the toughest part of the year for Cherry and I, AND we get to tour awesome places for investment like Tennessee, Atlanta and Savannah Georgia!

Welcome to the truth about real estate investing show for Canadians I’m your producer and host Erwin Szeto since 2016, 300+ episodes later, ranked as high as #81 on iTunes in the Business Category in all the world where we invite expert guests on this show to learn their lessons from both success and failures, as the saying goes,from Otto Von Bismarck “’Only a fool learns from their own mistakes. The wise person learns from the mistakes of others.” Unfortunately many didn’t hear my warnings about private lending based on the learnings of others’ mistakes and here we are… if you ask any real estate Accountant or Lawyer where clients are complaining and losing money from, you guessed it, private lending.

Back to our trip! Tennessee turned out to be a bit of a flop investment-wise, as prices in cities like Chattanooga are comparable to other top investment locations, which did not compel me to invest there. However, it is home to Volkswagen’s major manufacturing plant, where they plan to assemble all their electric SUVs and recently voted to unionize. The sightseeing was breathtaking, both from high up at Lookout Mountain and 260 feet below ground—equivalent to the height of the Eiffel Tower—on a half-mile cave tour that ended with a 145 foot tall waterfall in a cave!! 

Oh and the food we ate the entire trip was excellent. We did make the mistake of ordering too many sushi items with Jalapenos but holy, southern hospitality all the way, we could not believe the number of 4.5/5 Google reviewed restaurants there were to choose from and prices were the same as here but way more options.

Next we went to Atlanta for an Entrepreneurs Organization event. Our hosts own the venue, a rooftop restaurant and we had a great time networking with other 7 figure entrepreneurs. I met one couple with a beverage company that distributes nationwide to Kroger and Wholefoods who side hustles with an investment portfolio of 30 houses.  I met another gentleman who bought a failing property management business with 200 houses undermanagement, immediately turned it around to make it profitable and over a couple years has grown it to 900 units under management. Mostly single family and he advised me, if he was in a position to invest more, it would be in detached, single family houses.

Sounds good to me! Funny how at an Entrepreneurs Organization event I met a couple highly scaled and successful real estate investors in one night.  America truly is the land of opportunity.

While here back in Ontario the CBC released a special piece on how bad it is to be a landlord in Ontario titled: Unpaid rent, arrests, arson: Fed-up landlords fight back:

https://www.youtube.com/watch?v=UpeqE3a3EUk

Back to the trip, I made the mistake of booking a hotel in downtown Atlanta… not the best area but thankfully it was a short walk to the touristy stuff and we walked over to the Coca Cola museum, one of 19 Fortune 500 companies headquartered in Atlanta, GA (source: https://www.knowatlanta.com/jobs/atlanta-fortune-500) and it just so happened to be their birth day which was a pleasant surprise. My favourite part of the tour was sampling the dozens of flavours they make. My favourite was kiwi lime from Thailand.

Next was Savannah, a 3.5 hour drive from Atlanta for three days and nights and it was awesome. Savannah is a gorgeous, historically preserved small city of 150,000 population but they draw 10-15 million tourist visits per year. Compare that to 12 million visit per year to Niagara Falls which is one of the natural wonders of the world.

Savannah preserved historical architecture makes it a lovely place to visit, again the restaurant scene fantastic, stereotypical southern hospitality was experienced and my favourite part was driving around the $7.6 billion dollar investment by Hyundai & the government to build a car assembly plant just outside Savannah.  The projected number of employees is 8,500 which is bigger than Toyota in Cambridge, ON. 

We drove into the Hyundai’s plant parking and were surrounded by hundreds of construction workers, we checked out a couple houses and neighbourhoods and I’ve found my niche of starter houses ideal for investment.  

I’m in the middle of creating my US entity in Wyoming in order to start buying houses and I can’t wait to diversify from Canada to the USA where the economy is growing thanks to government and foreign investment at historic levels. I should mention that Hyundai investment of $7.6 is the largest in the State of Georgia history, a state that’s bigger than the province of BC.

If you want to know where I’m investing and my insights on the properties that I toured in the U.S. while I was there, I’ll be sharing all of it on Saturday, June 8th at the “How to Create a 6-Figure Passive Income in U.S. Real Estate” Hybrid Workshop. Signup here : https://USAworkshop-er.eventbrite.ca/?aff=podcast

Multifamily Development In Toronto With Ming Lim

On to this week’s show we have my old friend Ming Lim of Volition Properties, Toronto Realtor and investor extraordinaire and the name volition is about living your life on your own volition thanks to financial peace from a great real estate portfolio.  The nice thing about investing in Toronto is one can’t really beat the number of high quality tenants to choose from. 

In my experience, the ideal tenant is gainfully employed and optimistic about the future as their credit history is valuable to them as they want to be able to get car loans and mortgages hence they can both afford the rent AND be motivated to be a quality tenant.

But Toronto is a top two least affordable city in Canada and one of the least affordable in the world so unless you have deep pockets for negative cash flow condos, you’re going to have to adopt an investment model of intensification and densification and that’s exactly why we have Ming Lim on as today’s guest.

Ming and I go back over ten years, he’s an engineer by training so he’s a bright guy, he doesn’t hide truths hence Ming share’s how some Toronto investors are faring holding pre-condo construction condos, very sad stuff. On the positive, Ming shares how CMHC’s MLI select program (read cheap, 50 year amortization financing) can be used to optimally invest and develop into multifamily properties in and around downtown Toronto.

For all you Toronto investors, you’ve asked “when will Erwin be downtown to meetup?” well Ming has invited me to speak at his meetup. 

https://www.meetup.com/volition/events/297931009/

Tuesday, May 28, 6:00-9:00 pm

The Kingston House

(676 Kingston Rd, Toronto), google maps: https://maps.app.goo.gl/VKQLkSEc5cVxoa9j8

4.6/5 Google reviews

I’ll be sharing my journey of being a landlord in Ontario for the last 20 years and how I’ve started selling properties here to diversify to the landlord friendly areas of the USA. I’ve just returned from Savannah, GA, I’m in the middle of creating my corporate structure in the States to be prepared to start writing offers in the USA this month and I can not wait!

I hope to see you there and please enjoy the show!

Ming’s Volition on Instagram: https://www.instagram.com/volitionproperties/

Meetup: https://www.meetup.com/Volition/

Advisory call: https://cal.com/volition-matt/30advisory?month=2024-03

To Listen:

** Transcript Auto-Generated**

Subscribe on Android
 

HELP US OUT!

Please help us reach new listeners on iTunes by leaving us a rating and review!

UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Real Estate Titans: Tools, Tactics and Wisdom for Canadian Real Estate Wealth With Andrew & John

While our government has done nothing to alter the budget to remain competitive and keeping family doctors in Canada I’ve decided to focus more on being positive. Hello and welcome to the truth about real estate investing show for Canadians since 2016, over 300 episodes, ranking as high as #81 on ITunes in the Business Category.

My name is Erwin Szeto and as I’ve shared on past episodes, I made the decision to begin diversifying my portfolio by selling on local Ontario properties and I’m beginning the process to buy income properties in the USA. 

My criteria is simple, direct, 100% ownership like I do here in Ontario but I want the best of the best managing my properties hence I’ll be buying via a company called SHARE who is an institutional asset manager.  It’s like me being a Costco member, I benefit from their buying power: I get preferred pricing on property management, leasing fees, repairs and maintenance, and insurance. 

In the news is a little company called Samsung, they’re actually not that little, they’re actually the largest company in Korea by market capitalization. Samsung reported earnings this week and said AI will drive technology demand after they absolutely crushed their earnings reporting a 10 fold increase in first quarter operating profit.

Source: https://www.reuters.com/technology/samsung-first-quarter-profit-up-10-fold-memory-chip-recovery-2024-04-29/

So if Samsung is 10X’ing their operating profits, where and how are they investing in AI? Samsung is investing $37 billion into building two microchip manufacturing facilities just outside Austin, Texas that will employ a projected 4,000 high paying manufacturing jobs.  I’ve already done a site visit and my theory is I will earn above market returns by investing nearby. I’ve already given the names of the neighbourhoods I want to own into SHARE. That’s not advice, I’m just sharing what how I’m investing and I’m open to criticisms.  Note my plan is to only buy one house in Austin as my plan is to own in three cities before circling back for diversification which SHARE can manage for me as well.

Keep in mind that historically real estate in the US between 1970 and 2023 increased on average 5.5% each year.  I think I can beat that by investing in the best areas to invest.  My clients and I were getting about 7% here in Ontario but I’m looking forward to being more passive, no rent control, more rights in my favour, and beating the average 🙂.

Source: https://www.visualcapitalist.com/growth-of-100-by-asset-class-1970-2023/

If you’re interested in learning more, I have virtual tours of US income properties coming up as well as a joint How to earn Six Figures Investing in the USA Workshop with my lovely wife Cherry Chan so make sure you’re on my free, weekly newsletter where we send a deal in the USA each week along with both free and for a fee events. Simply go to my website: www.truthaboutrealestateinvesting.ca and grab any one of my free reports on the right side by entering your name and email address. Easy peasy.

We’re going to make real estate investing great again, our friends in the USA have a bit of a housing crisis themselves so we can help them out as we’re welcome to unlike here in Canada.

Real Estate Titans: Tools, Tactics and Wisdom for Canadian Real Estate Wealth With Andrew & John

On to this week’s show!

We have my old friend Andrew Hines and his co-author of an all new book John Schwenker!  Andrew needs no introduction and John is an everyday hero, a firefighter and recovering real estate investor.

Andrew has taken his turn sharing how he lost money investing in Ohio now it’s John’s turn to share how he made a bunch of money in Ontario, lost all his profits in the recent correction but it’s not all bad news, John’s short term rental property in the US is a winner. I’m confident you’ll agree when you hear his numbers especially when compared to his Niagara Fall, Ontario short-term rental.

In this episode, John and Andrew share their journey to writing this book so we may all learn from their mistakes and how to be successful in their book which is like Tim Ferriss’ “Tools of Titans” where other experts have contributed chapters to the book including yours truly.  

To pick up a copy of the book:

“Real Estate Titans: Tools, Tactics and Wisdom for Canadian Real Estate Wealth.”

Link: https://www.amazon.ca/Real-Estate-Titans-Tactics-Canadian-ebook/dp/B0CZZZWP3Z/

To follow Andrew and John:

@theandrewhines

@john.schwenker

To Listen:

** Transcript Auto-Generated**
(00:00) the government’s made some updates to the budget but uh they haven’t done anything to for our family doctors to remain competitive and keep our family doctors and other medical practitioners in Canada so I’ve got nothing positive to say on that front and I’m deciding to stay more positive hello and welcome to the truth about real estate investing show for Canadians since 2016 that’s over 300 300 episodes probably about 350 by now we’ve ranked as high as number 81 on iTunes in the business category
(00:30) globally my name is urman cedo and as I’ve shared on past episodes I made the decision to begin diversifying my portfolio by selling local Ontario properties I have three closing I have one I closed one this past week and I have two more coming up uh this next week and I’m beginning the process of buying income properties in the USA my criteria for buying is simple it’s direct 100% ownership and control like I do here in Ontario but I want the best of the best managing my properties hence I’ll be buying via a company called
(01:01) share who is an Institutional asset manager it’s like being a Costco member I benefit from their buying power I get preferred pricing in this case under share I get preferred pricing on property management leasing fees repairs maintenance and insurance so while I had to pay share fees I save a lot on other in other areas in the news there’s this little company called Samsung they’re actually not that little I Googled and I found out they are the largest company in Korea in Korea South Korea by market capitalization as in if you
(01:32) add up all what all their stock shares are worth they are they are worth the most ssung recently reported earnings they actually reported earnings this week and they absolutely crushed it they tfold increased their first quarter operating profit now what they’re saying is AI will drive technology demand uh going into the future and going to the rest of this year so if Samsung is 10 Xing their operating profits where and how are they investing in AI I asked these questions that’s all I ever do all I ever do is ask questions which is like
(02:06) the nature of this show so I asked Google I read an article a couple articles Samsung is investing uh a combined $37 billion into building two merker chip manufacturing facilities just outside Austin Texas so um as many of you know I did site a site visit of one of them already only about three two three weeks ago did they announce the second uh the second record ship plant and they already have one already existing in anyways so the new investment will employ a projected 4,000 high paying manufacturing jobs uh and uh as my
(02:43) theory is well my investment goals is always to earn above market returns by investing and so my plan is to invest nearby where these plants are being built in Austin Texas uh I’ve already given the names of the neighborhoods I want to own uh via share the neighborhoods are called Hutto and Round Rock now that’s not advice I’m just sharing how I’m choosing to invest and as always I’m open to criticisms uh Noe my plan is to only buy one house in Austin as my plan is to own to buy in other cities proba at least
(03:14) three cities total before I ever Circle back and buy a second property in any one city uh my objective is diversification which and that’s not a problem for me because share is a n Nationwide organization that can cover me basically wherever landlording in the USA makes sense now keep in mind historically real estate in the US between 1970 and 2023 so that’s 53 years on average over that significantly large sample size real estate increased an average of 5.
(03:48) 5% each year and that’s compounding 5.5 compounded annual growth rate I personally think I have a shot at being that because of my very targeted areas for investment near historically historically levels of manufacturing investment into creating high paid jobs into largely Ai and Automotive manufacturing specifically EV anyways my clients and I were getting about 7% here in Ontario but I’m looking forward to being more passive uh with no rank control having the majority of Rights in my favor and of course beating the average I’ve got uh sources in the show
(04:24) notes of course as always so if you go onto my website truth about my email newsletter you will see the infographics from visual capitalist uh if you’re interested in learning more I have virtual tour tours of USA income properties coming up as well as a joint V uh a joint how to earn six figures investing in the USA workshop with my lovely wife Cherry CH Shan uh she will be presenting and I will be presenting as well along with uh members of the share team make sure you’re on my free Weekly Newsletter where we send a deal
(04:55) each week from the USA uh along with uh both free and for fee events simply go to my website www. truthout realestate investing.con the USA guide easy peasy just go to my website and enter your name and email we’re going to make real estate investing great again our friends in the USA have a bit of of a housing crisis themselves so we can help them out as we’re welcome to by the all levels of government there unlike here in Canada on to this week show we have my old friend Andrew Hines and his co-author of an allnew book John
(05:35) schinker Andrew needs Andrew Hines hopefully needs no introduction uh and John is an everyday hero a firefighter and recovering real estate investor uh Andrew has taken his sh turn sharing how he lost money investing in Ohio now it’s John’s turn to share how he made a bunch of money in Ontario and lost all of his profits in a re in the recent correction but it’s not all bad news John’s learned a lot he’s written a book in the meantime John’s short-term rental property in the USA is a winner and I’m confident you’ll
(06:05) agree especially when you hear his numbers on his uh on his vacation property in New York state when compared to his Niger Falls Ontario short-term rental the numbers are completely night and day as well as how he’s being regulated by that local government in this episode John and John and Andrew share their journey to writing this book so we may all learn from their mistakes and how to how to be successful in their book with in their book which is U similar to Tim Ferris tools of Titans where experts have contributed chapters
(06:37) to the book including yours truly the book is called real estate Titans tools tactics and wisdom for Canadian real estate wealth I’ve included a link in the show notes to Amazon so you can pick up the book and to follow John and Andrew they’re both available on Instagram and very active and uh I don’t know how howse to put it but I did chirp John he is a fireman he’s a young good-look guy he does appear in a calendar so he’s a good guy obviously because he’s taking a shirt off for charity who El what what other kind of
(07:12) good guy does that anyways please enjoy the [Music] show hello John hello Andrew uh what welcome to the first threeome we’ve ever done online for the podcast yeah we’re on to something here thanks for having us for the listeners benefit well the listeners who’ve been around for a long time no I’ve never had I’ve had two guests in person this is the first time we’ve done it online which makes sense since uh we’re all a little bit further apart uh but yeah let’s go what’s keeping you busy these
(07:49) days yeah who do you want to go first oh you spoke first Andre you you first all right well um when was I last on here on your show year ago 12 months yeah maybe a bit more than that um yeah so I got a two-year-old and uh I uh have been still busy in the US last time I was on we were talking about the new developments the builds um I’ve since sold all that off I did build three sold off the extra lots that I have sold those buildings and uh basically just decided that Kate Coral wasn’t going to work anymore given
(08:21) some of the changes in the market know you and I have chatted about this uh recently but uh basically things just got squeezed cost costs went up on building and then of course the market kind of came down slowly not as bad as it did in Ontario but it did come down in Southwest Florida too and um you know I just kind of decided that it wasn’t worth the risk for the P you know the perspective profit margin it uh you know just didn’t justify taking the risk so I I took a couple of small losses on some
(08:50) of the Lots just to liquidate them uh knowing that I was kind of getting a negative return on Equity at the moment with the stagnant market and then just you know paying property taxes on those slots so um shifted gears I’ve been doing some off-market acquisition right now uh making offers on land I was chatting with you a couple of weeks ago uh so we’re uh somewhere around 6,000 offers in 30 days and uh I got another 4,000 in change going out uh pretty much today so um yeah keep it rolling and that’s in Florida all in Florida right
(09:23) now yeah and I got the hospitality business up here we completed our second uh full season glamping uh we acquired a resort as well 9 Acres on the water in toore and uh so it’s all part of a you know the getaway group of companies sort of what we call it and um we do Luxury glamping and luxury stays in the area uh and we’re yeah like I said we’re expanding uh we we probably did a 75% increase in our sales year-over-year uh for 2023 and we’re looking to do a a similar growth again next year uh
(09:57) because we added a bunch of new inventory and you know new trailers T really awesome stuff um anyone wants to check that out they can check us out on Instagram at the gr getaway glamp and uh yeah that’s uh that’s the most of it writing a book we’re gonna talk about that today uh so John and I that’s why we’re here we’re talking about the book and uh yeah that’s had us both busy so uh both of our plates have been full and I will uh I’ll pass it back to you irn or John yeah before we just before we
(10:25) get to John just want to highlight for The Listener like I’ve known Andrew for quite a few years and it’s it’s good to see that you’re willing to share loss and also that you’re willing to Pivot when the market when the markets change yeah right because well how many people had losses right like I mean I had I had some wins too I I mean I I look at Florida and Southwest Florida in my first experience as as being um an okay Endeavor like I didn’t lose overall but it it didn’t justify the effort so
(10:53) that’s pretty much where I walked away from it like I apply when I’m doing Investments down there I apply my own internal rate of return if I can’t profit on top of that to me is effectively a loss because it could just put that money out in a passive investment yeah so that’s that’s in order to keep things equal I have to look at it that way right so for for those who don’t know like Andrew’s a smart guy so his money if his money is not working hard for him then it’s a loss essentially yeah if you know what
(11:18) you can Al invest in right like I know what I could I could go get 14% passively so if I if I’m not getting that actively why am I doing it you know I should be I should be able to do that and then some actively mhm MH and I was going to say like you made a lot of money in in Ontario investing as well I had some wins I’ve had some failures I shared both but uh yeah we we’ll all continue to have failures they’re only really failures if you don’t learn from them right y if you don’t cut them off and you when you need
(11:46) to so also we have John on the show so John this is your first time on the show first time on the show yes thank you what’s keeping you busy these days yeah the novel’s been one of the biggest things that Andrew and I are writing um we were fortunate enough to have you as one of our uh one of our interviewees in the chapter we really appreciate that your chapter is fantastic you gave a ton of insight and wisdom so we appreciate that but I actually approached Andrew for this idea about two years ago which
(12:16) I can’t believe that it’s already been two years already and uh I’ve told the story once or twice but I pretty much just sent Andrew a a DM video on Instagram it was just like hey man I’ve got this idea for a book I want to do this and this and we set up a meeting for a couple days later I pitched the idea to Andrew and he’s like yeah man that sounds awesome let’s go for it so it was a perfect match because I’ve written a book in the past so I have all of the publishing knowledge editing I’ve
(12:45) gone through the whole process before and Andrew’s knowledge it’s it’s uh you can’t really top that and his role aexs of guests he’s had on the show so it was pretty much a match made in heaven we both used our strengths and I just kind of brought Andrew a list of people I wanted in the book you were one of them and I had maybe 20 25 other people and Andrew was able to match us all together which was fantastic and that’s pretty much been the biggest project we’ve been working on but aside from that I guess your
(13:16) listeners wouldn’t know me my day-to-day work is a firefighter we just kind of talked a bit about that off camera and uh yeah that’s kind of what I do during the day I have a handful of airbnbs in Ontario and one in elville New York at Holiday Valley nice little ski area out there so that’s a lot of fun and over the last year it’s kind of just been stabilizing after everything that happened in the market kind of took a step back with everything and we’ve been stabilizing our Airbnb airbnbs and
(13:47) portfolio and that’s kind of the day-to-day right now so I asked before we start recording if anything’s if everything’s fair game he said yes you did can you share the story how you got introduced to my podcast yeah that was actually that was probably maybe four years ago now and uh my father was a big listener of Irwin and when I started learning about real estate that was probably four or five years ago as well and I was a big Andrew Hines fan and that’s why I actually approached him for the book I learned
(14:21) most of my stuff from from Andrew and then I was talking to my dad about his podcast and he’s like oh you got to listen to this Irwin guy he’s fantastic and you got to listen to him so yeah I started listening to Irwin’s podcast that I must have been 2019 or so maybe 20120 not quite sure but I’ve been one of your what is it 100 listeners or thousand listeners for 17 listeners okay I knew but yeah I’ve been one of The Originals I’d like to say thank you for listening and thank you to your father and uh I can’t let
(14:52) you off the hook for this either before we were recording we Andrew and I learned something very personal intimate about you that you do take your shirt off for a calendar yeah seeing as this is your first virtual threesome on a podcast I feel confident sharing that yeah I’m part of the firefighter calendar as a firefighter in the niagar region we do this for charity for pth stone mental health it’s a fantastic um it’s a fantastic organization so yes I’m willing to take my shirt off for a good
(15:22) cause sometimes and you get nothing for it this is all for charity all for charity yeah it’s a great time good char good time couple laughs are had and I think that’s a good segue into the book like people don’t write books to make money like there’s there’s not nearly enough money in it for for to cover all the time and effort that’s for sure it’s been oh it could be a thousand hours between Andrew and I at this point between all the interviews and storyboarding and the editing process
(15:51) and back and forth you know uh you know yourself know irn that we had to do kind of an update a couple months ago because so many things have changed in the market so it was almost like two full rewrites of the book and everything so yeah it’s a ton of time and effort but the reason I wanted to do this initially was when I got into real estate and flipping houses I really didn’t know much about it I kind of just jumped in because I knew real estate was a good investment but I I knew we were playing with some big numbers here some
(16:20) life-changing numbers but it’s also life ruining numbers at the end of the day and I didn’t know much about real estate other than what I’ve learned from Andrew and yourself irn so I wanted to kind of build a community of people I was able to speak to I think 20 or 21 investors and interview them for the novel and I just personally wanted to learn from the biggest names in the industry and that’s how it all got started so let’s start with what have you learned along in your own Journey because uh it’s it’s awesome you
(16:49) mentioned elville I need to hit you up later because uh we just got back from Huntsville and there was no snow right yeah El is a beautiful area but we can talk about that uh but the biggest thing in my real estate Journey was I started flipping houses about four years ago we were doing the nicer areas in St Catherine’s kind of the north end it was myself my father and sister we were flipping like higher end houses between the $600 and $900,000 Mark and we were making money hand over fist it was crazy it was all during that
(17:23) boom and that’s all I knew at the time I’ve heard about the 2008 scare whenever everything crashed but people weren’t talking about that two or three years ago very much there were people like both of you who understand it that would say that would reference it it’s not always going to be great but for someone like me that’s not been in this industry for very long I just did whatever I could to get more money make more money and get more properties so some of the basics of real estate investing went out
(17:52) the window but I ended up borrowing a lot of private money private financing private mortgages just to get more properties under my belt and then when everything crashed I think it was the start of Q2 2022 I was holding three properties with private mortgages private funds all between I think at that time $750 and $900,000 each of them between1 to $150,000 worth of Renovations into all of them and uh we ended up having to liquidate that at a huge loss for example I’ve told Andrew about the one house we purchased for
(18:30) 750,000 we put in anywhere between 100 and 120,000 and then um things got so bad we had to let it go for under 700,000 so major loss on that one we had a similar situation with the second house and then the third house we ended up turning into an Airbnb in niagar on the lake which is now doing wonderfully but that’s money we didn’t expect to have tied up in a property long term and yeah after a couple years of doing great uh it kind of all came to a halt at that point when the market crashed it was about a year
(19:02) of stabilization and yeah it was a very tough year and a lot of learning for sure and were you able to keep your lenders whole yep yeah at the end of the day everybody got paid back and everything but it was at a big personal expense unfortunately uh had to dip into the personal funds and everything but yeah everything worked out with the lenders and everything but pretty much all the pro the the progress we made kind of took a halt and but we were able to stabilize at the end of the day did you basically give back
(19:37) everything you made then yep yep in so many words yeah it’s too bad because we started I think we started in 2019 and like I said we were absolutely crushing it with a bunch of flips I still do have a handful of airbnbs which is great so I do have some of my portfolio left but pretty much well 100% of the flipping profit was G on and had to liquidate some more of the portfolio just to pay everybody back thank you for sharing John yeah for sure yeah who shares that e like yeah no problem you know keep on moving just usually go quiet like so
(20:16) many social media profiles have gone quiet yeah people just go quiet like they don’t share yeah for sure it’s been a hard time and I’ve been very open about it the whole time and my fiance has been incredible honestly would not have got through this without her we talked about it off camera she’s a social media manager and um she was doing very well before all this happened but when all this happened I didn’t have enough cash flow like our personal expenses were absolutely insane and we didn’t have enough money month by month
(20:45) even liquidating some of the portfolio just these private mortgages we were holding and paying back all these lenders and stuff we pretty much had to 3x her business overnight we did that in about two or three months just to just to to live just to cash be cash flow positive so thank you to Courtney for that shout out Courtney yeah no kidding think you owe her one I owe her lots I owe her everything that’s for sure and you kept your job through the whole process right I did yeah yeah that all went to uh private mortgages and stuff
(21:20) I’d get a paycheck itd go One Direction so yeah it’s been like I said it’s been tough but we’ve got through it we’re still paying for a little bit of it but yeah I think we’re kind of on the other side of it now so if you didn’t have your girlfriend in your great paying job where would you be um I would have had to sell all of our airbnbs for sure there would have been no question our oh well now that we’re sharing things our monthly expenses were about $22,000 that was between um just our personal house all
(21:54) the interest payments the private mortgages and stuff like that I’m only responsible for onethird of the flipping corporation that we had so for those three properties I was on the on the hook for onethird of all those properties but I also had my the private funds I I was borrowing so yeah it was lots of money going out every month and it was not going to principal that’s for sure so is that gross debt or is that total debt Andrew you had your mortgage license uh total debt service includes like yeah everything credit cards
(22:28) everything that’s not property related so anything directly related to 22,000 total debt a month yeah that was going out yeah okay did not the need for the plan A B andc uh yeah like you obviously on that one property you’re you you were able to turn it into a positive right of course like said you got money tied up in it but yeah but yeah like like I said at the start of this I wanted to write this book to avoid all unfortunately I started writing this book like as this was all happening so I thought I had a plan A B and C but I I
(23:07) didn’t know it could be that bad even my worst case scenario I didn’t know house prices were going to drop 20 25% overnight I didn’t know that no one was going to be buying homes everybody was selling off what they had and for that house I was talking about that we would have sold for 950 to a million and we had to sell it for 700,000 less than what we bought it for like I never expected it to be like that I thought minimally we could break even sell it in a timely fashion and but no it was definitely not like that well not
(23:38) everyone sold everything I’m still bag holding that’s because you probably used good uh investing principles like I did not so you were able to hold these assets could have been better I yeah of course that’s for another show but yeah John before we Sorry before we move on to the book can you talk to what were the relationships like because this was a family-run business the flipping business how about the relationships with your partners your your which you said was your sister and your father yep yeah um
(24:08) luckily for them they didn’t have to borrow private money like we all had to do the private mortgages of course but I needed private money for all the renovations and everything for my 3D so they were in a bit better of a spot than I was so everybody was stressed the whole time but luckily like yeah we’re family first and it’s hard with family sometimes investing and in life and everything but we got through it we figured it out and we still own that Niagara on the Lake property together as an Airbnb and it
(24:38) was figured out like we all had to help each other at different points but figured it out got through it and that worked so what would someone who read the book would they be able to avoid these Mist these these challenging times that you’ve had absolutely yeah so that was the goal so basically we used the book tools of Titans by uh Tim Ferris is kind of the guideline for the novel book the author yeah I see it in your background actually right there bottom left corner that nice little orange one um yeah F fantastic book but basically
(25:12) you can see four our work weeks on on my right I can see I can see the Spy but yeah go ahead sorry I can see it too yeah so there’s about 20 interviews with some of the top Real Estate Investors in Canada so people are able to start from the beginning with their story what they did to start their investing portfolios and then all the way up to who they are now so a lot of times it’s hard to look at someone like yourself Irwin and be like well how do I get to Irwin’s level so we wanted to give people everybody’s Inception story
(25:43) and then kind of the steps of how they built their wealth and their portfolio that’s kind of one section of the book is those 20 interviews but then the start of the book is a lot of Andrews knowledge being poured into the reader we have a couple chapters like Andrew’s golden rules of investing um how to F find your how to purchase your first investment property and things like that it’s very actionable chapters where you can even just print them out use them as guidelines and checklists and stuff like
(26:11) that so we’ve really broken it down to the base level for the newer investors and then we have those 20 chapters going into the expert stories sounds pretty awesome and something some everybody should probably consume at the beginning yeah the big thing like so we wanted to make sure that the process and methodology and and you know because it’s a buffet there’s all these different things you could do how do you synthesize like the different strategies and and pick what what works for you so a lot of it’s about finding that fit and
(26:42) then of course protecting your downside which of course is harder in Ontario now than it was before when cash flow is probably your biggest protector um which most people don’t have so uh we did you know focus and this is what created so much extra work is with the downturn and the the new interest rate environment and economic climate and and declining real estate values is you know how do you succeed now and and what’s going to work now because a lot of people can’t relate to how say you started or when
(27:10) all those years ago or how I started all those years ago um but they can get my two cents on now that I’ve seen 12 years of this like how would I start again if I had to start right now and I in a lot of ways I look at it as start starting again a lot a lot of what I’m doing although I’m coming in with a better better start than I came in last but you know I think that there’s a lot of opportunity right now it’s pretty exciting and I know you have your your ideas what you shared in the book too
(27:37) and uh I’m I’m super like this is probably the happiest I’ve been going into a new year from an optimism standpoint like yeah of course that nothing’s perfect but there’s there’s a lot of good stuff on the horizon yeah I like to agree especially where we are I know we’re we’re recording this January 2nd I know we’re releasing this in February but uh you know I think we’ve reached the bottom for both the US and the Canadian markets so yeah I I agree I’m I’m very
(28:02) optimistic oh so actually and question for Andrew Andrew John mentioned there’s uh what did he did you say golden rules of investing yeah the golden rules or Andrew’s golden R rules of investing can’t remember the exact title but yeah that’s one of the chapters Andrew can you share some of those golden rules maybe give me three oh put me on the spot um I’d have to see how we wrote it down but I mean obviously a big one is is cash flow don’t invest in Ontario no I’m kidding cashow FL number one um John
(28:32) what did we put in there I I we haven’t gone over that in a bit I share these things all the time but how how I exactly uh wrote it um you know for me I’m going to sound like a broken record you know if you if you listen to me uh you know have your plan A B and C be able to Pivot these are things that would be in those golden rules um invest in a way that fits with your own capabilities it fits with your why um there needs to be a there needs to be Synergy between what you can want and need to do and the in the strategy you
(29:00) picked so just because uh you want to do Airbnb Arbitrage or hospitality and you want to go full-time into real estate uh but you know at home you got kids and you got a full-time job like that’s just those those don’t fit you know you might be more uh set up to do more passive type of investing so um that would just be a little bit of a preview of some of the stuff we covered right let’s pick on John for example I think his story is actually a strong one in that um you know and you and I have talked about you
(29:29) know we talked about like what’s out there in terms of like social media marketing and whatnot all these programs that promise you uh if you take their course they can quit their job but you know we were just talking about John if he had quit his job he’d be financially ruined yeah for sure uh and that’s and that’s just reality of things and we all talked about and Andrew you mentioned cash flow and I was talking to an investor uh this morning about you know we’re talking about cash flow Ontario and my point was to him was
(29:57) you know we’ve never felt inflation as badly as we have the last two three years right and so a pro formula for a property a residential property say just use of something boring something very Vanilla single family home in Ontario anywhere right could be condo could be detached home your cash flow uh we all know your expenses are going to go up but we have rent control in Ontario so your cash flow is only ever going to get worse is this a good investment all for those who are listening like both John and Andrew are
(30:32) smiling I’ll let either you go what do you what do you think go ahead Andrew oh geez um yeah I’m here I’ll throw out something as an observation neither of you are investing in long-term Residential Properties that’s that’s a very easy observation right no we’re we’re not in I mean in Ontario for me to to me to invest in that kind of thing I got to get it out a price that makes sense for the headache right like that’s that’s the new reality you always had that risk but before we had compensation for that
(31:05) risk in the form of cash flow in the form of appreciation and 30% a year returns uh that was factoring in your leverage you know and a healthy cash flow like it was very protected it was very hedged it felt great uh and then we got into a place where you know returns as I can calculate them on my cash flow sheet are like looking like 12% which you can get more in private lending so now all of a sudden it’s like wait why would I do that for all the headaches that come with it you’re speculating at your appreciation right now I’d still I
(31:34) still uh would estimate that we’re going to get completely stagnant or 1% I mean of course in in 10 years time I expect real estate values to be up but I don’t want to bank on a big number there and uh knowing all that it doesn’t look great and especially when you don’t have cash flow you have no ability to Pivot so that’s why I’m not really um active in Ontario what I am open to in Ontario is the fact you’re not active in residential long residential in Ontario yeah I am open to a deal in Ontario like
(32:05) if it comes at the right price of course and I think people are sleeping on Ontario right now because everybody’s looking at the US so um I went I was in the US before most of the people who jumped on the bag vanwagon here but um I just acknowledge that that if if everybody’s looking South then I’m still going to pay attention to here um but yeah my activities are still South and uh for the time being will be I don’t think that the rules as they stand in the real estate uh you know uh so the
(32:34) landlord tenant board here in Ontario are going to stay the way they are I think that there will come a turning point once you know institutions own most of it uh where it’ll it’ll become much more landlord friendly but for now it is what it is I I hey I’ll still take a great deal and I still think there’s great opportunity here but yeah um just not my key Focus right now yeah and for me I’m not touching any long-term Buy holds or anything like that in Ontario I have a couple airbnbs in Ontario and they’re still cash
(33:04) flowing very well especially the ones that I purchased a couple years ago uh the one property we have a 2.7 interest rate and the cash flow is fantastic on that we have another similar one like that Niger on the lake but then the Niger on the lake property I mentioned earlier we have a we have a huge mortgage on it and I think our interest rat’s around 7% and even though it’s in on the lake renovated perfectly as a hot tub like it’s As Nice of an Airbnb as you can have and we’re barely cash flow
(33:35) positive so even at that point is it worth it not so much at 7% but the properties we bought a couple years ago yeah there’s still huge cash flow machines and everything but like Andrew said if you can find a great deal and maybe for me again I like the short-term rentals it’s a lot better for the cash flow but the biggest thing for that is just make sure you’re in a short-term rental municipality that’s favorable for it because a lot of municipalities are not so if they don’t have their
(34:05) established rules I would highly recommend not entering that area yeah mature you want mature bylaws they’ve been there a long time um one other thing I’ll add to that is now this is what I was getting at with people sleeping on on stuff like VBS and negotiating special terms and and all the things you can do in Ontario when sellers aren’t getting a thousand offers thrown at them that’s where you get to kind of create your deal and you can create sort of something that isn’t on surface level people wouldn’t
(34:31) necessarily see it but it could be a fantastic deal for you so not saying everybody needs to race to the US because I don’t think that’s the case um you might you know if you if you go that way you might have an easier time but not necessarily oh I just want to share with you both a Toronto realtor friend of mine tell was telling me he’s bus it’s insanely busy in downtown Toronto already yeah he was hoping for a quiet holidays nope with uh with fixed rates coming down uh they’re already seeing he
(34:58) shared with me a a tono semi semi detached home had 25 offers on it sold for 300,000 over asking so just with the just with the news that they’re going to come down obviously fixed rates have come down but they’ already had an effect of stimulating the real estate market which actually puts in Jeopardy the likelihood of the real estate rates coming down could be we’ll see in the short run anyway John question about your n [ __ ] on the lake property so um so when I see this kind of activity already happening
(35:28) in in downtown Toronto I gen that’s usually like kind of like our epicenter of real estate activity uh to me that’s the early indicator that’s the canaran the coal mine that we’re going to start seeing activity pick up uh slow it like Toronto be downtown Toronto will be the upper Center and it’ll Ripple out So eventually it’ll make it way up to Nag on the lake not not 25 offers but you’ll see buyer demand pick up probably very significantly over the next 2 years what would your plan be then with your nagon
(35:55) lake property you is that something you want to continue to hold or would you take the exit when you can we have it at a place where it’s cash flowing nicely now but it took a lot of work to get there but if they get back up to the prices we were seeing a year and a half ago i’ it definitely be worth looking at because that’s the one property that I I wouldn’t mind selling at some point just to get back the rest of the finances that I need to pay everybody back and then be completely whole again
(36:23) personally but yeah I think we would sell it just because again with the interest rates where are it’s not crazy cash flow positive it’s not in our slow season we’re cash flow negative in the main Seasons we are very positive but it’s almost not worth it kind of like Andrew said the return on investment just isn’t there on a property like that so if it does turn in a year or two I think we definitely look at selling so a question I’m I’m starting to ask folks is especially as we’re into
(36:51) this kind of like realate Market pivot is what is your next uh income property P purchase going to be so uh start with you John yeah for me I am liking over the Border definitely um elville New York uh they have Holiday Valley there and holmont the two ski resorts they have a casino right out there some amazing golf courses and some worldclass Trails it’s very big with like mountain biking out there I’ve got a property out there and my partners on that property I have a second one out there so it’s a
(37:24) good spot it’s just again interest rates are a little bit high right now so it might not be a terrible idea to pick one up before everybody starts buying again because you can always just refinance when the rates come down but I think the next place I’m going to go is somewhere like in elville because with our airbnbs we always want people to have a reason to go to these places all of my airbnbs in St Catherine’s and Niagara they’re right beside a beach or in Niagara on the Lake so it’s always going to be very
(37:53) touristy areas and people are going to keep coming to holid Valley like Blue Mountains blown up and it’s super crazy the real estate out there so I honestly believe that’s an area that’s going to pick up is Holiday Valley and elville so somewhere like that and I do like the 30-year mortgages out there as well so definitely looking over that way right so sorry just to uh just just from my own understanding you’re saying narland lake is kind of like seasonal versus elville is more the Four Season uh it’s
(38:24) not so much the Four Seasons in elville but it’s just so much cheaper there that we can make so much money in the High season that you can we cash flow very well there where Niger popular too though right it is absolutely yeah it’s kind of like kind of like the wet Seasons that aren’t great like early spring and and yeah exactly but yeah no it it is almost a Four Season place where in St Catherine’s and Niger on the lake it’s definitely more of a spring summer early fall type place can you
(38:52) walk us through some numbers what you think your next investment property would be like in elville yeah at bille so we bought this one almost 3 years ago now and we bought that one for 250,000 if we were to buy that same property same property today they haven’t gone up like crazy so we could probably pick up a comparable property for about 300,000 which is pretty nice there is not a big inventory out there which is something to note and also they don’t allow airbnbs right downtown in the core so we’re kind of like in
(39:25) Farmville we’re about 7 Minutes drive away from the uh ski hills and from the downtown but it’s nice quick drive so yeah if we buy that for 300,000 probably it cost anywhere between 40 and 50,000 to get everything to get it set up to how we like our Airbnb standards I’m talking like very minor Renovations all the furniture all the bedding linens towels all that get everything set up for our maids so we’re probably looking about 350 all to get set up for a for a middle of the road Airbnb in a nicer
(40:04) area Okay so I’ve been looking at Blue Mountain properties and this is this is this sounds much more affordable it is much much more sense doesn’t it and I had him on my podcast we were running through those numbers and and he did this incredible games room and I think you were at like 70,000 a year Revenue before John and now you’re thinking like I’m I’m thinking that games room could put you up to 100 oh yeah we’ve had it live for maybe a month now and we’ve already seen the bookings they’ve gone through the roof
(40:39) in both volume and price we’ve raised our prices about 15 20% and people are not having an issue paying for it so you’ll easily surpass a 100 then I think so and like I said we bought this house for 250 like couple years ago and uh I think our mortgage rates locked in at 2.
(41:00) 9% so for how many more years 30 27 years 20 yeah 27 years like I you can’t beat that so don’t sell that it’s incredible no we won’t ever that’s great does this can I find this property online uh yeah um what would be the easiest if I gave you the address or sure like can I uh yeah let’s shout at your property get it fully booked for the rest of this I appreciate that yeah 6365 Somerville so s o m m e r v i l l e so Somerville Valley Road yeah we’re booked up pretty good the next month or two um but shout yeah shout out to Pink wall designs they’re
(41:47) the ones that did our our garage they did the designs for our garage and then me and my partners on the pro project went down there and did all the work and it’s been amazing uh do you have a website or or Instagram for this property I might just no we don’t we’ve always talked about doing it we just haven’t done it but I could always just send you the link maybe could text it to you that would be the easiest I know in didn’t SEO running to the US but this sounds pretty awesome cuz I literally just got back
(42:19) from a ski trip where there was no snow but for my my research via chat PT is my understanding is elville even though it’s Sou Falls it gets more snow than Toronto which is crazy absolutely high elevation right it’s like 1500 feet I think if here in Burlington we’re around 600 feet above sea level so I think that that has something to do with it yeah definitely irn I’m just sending it to you right now sorry took me a second to get there oh good no for the listener’s benefit um under again so
(42:51) holid Valley which is the main which is the biggest ski resort uh in the area elville like definitely yeah it’s it’s huge and where like I’m in St Catherine so it’s an it’s about an hour and a half to get there where for me to get to Blue Mountain it’s two and a half three hours so it just makes sense quick quick ride over the border and you’re there and yeah I might place next year hopefully you allow me to book you direct US versus on Airbnb and absolutely of course that sounds great
(43:24) because I was on their Instagram and they were they were open for skiing like the first or second week of December just nuts yeah a couple weeks so it’s really nice yeah versus they had no snow and Whistler over Christmas right yeah for whatever reason lots of snow there I should stop talking about this so I don’t oversell the place for the next holiday I know that’s what I always do I talk about things too much and then everybody goes and does it yeah yeah that’s it yeah like I said with the
(43:52) interest rates being higher it is definitely harder to cash flow there um but it it’s still doable still someone could go with a bit of cash or even like if they use a helck at least is variable and then it’ll come down as rates come down right and it’s interesting they have a lot more land out there too so I’ve always had it in the back of my head of doing some sort of developing out there because you can get quite a bit of land for pretty good prices out there yeah because I found your property
(44:17) on Zillow and you have a huge Garage on it yeah you should see the garage now look up the listing there I just looking at it right I just sent it to you on Instagram irn I couldn’t get your phone number quick enough so here irn I’m putting it in the chat uh here on the on the zoom there you go oh you found it on B&B perfect oh wow okay I’m just gonna share screen so so folks on the YouTube will be able to see it awesome so would the gold would this fit the golden rules yeah absolutely would fit the
(44:55) golden rules yeah the big thing is your plan a b and c like you know what what would you do this is my biggest test is like what would you do if your plan a didn’t work out obviously their plan a here is go in run a Hospitality you know unit and be positive cash flow to some degree I’m sure you guys had a wealth building and goal in there as well um now as far as what happens if if things don’t go well well your first pivot might be to sell um would you necessarily uh make money that way I don’t know if Market values have changed
(45:27) enough that you would but then you so you could do that you might lose a little bit not a great plan B your plan C could be to rent it out just to families uh or do some sort of midterm stays uh if if for some reason Airbnb say was outlawed and you know this is this is type of stuff that that we talk about in the book is you know kind of examining what could happen and what you would do in each scenario and this one works out really well right now now would it work out well on a monthly um a monthly basis I feel like John if you guys could strip
(45:57) out the utilities and uh just do a simple monthly rent you might be okay and uh from what I hear New York state is actually not bad to be a landlord in as long as you’re not in New York City um so it does look like you have some um some uh contingencies but one thing to note about you know sort of the plan a b and c and having contingencies is that um it it becomes more and more important to have great contingencies the less Rock Solid your plan a is right if if you know that plan a is like you know 5050 shot of working then you know your
(46:29) contingencies need to be that much better if you know that you’re Rock Solid on your plan a it doesn’t mean don’t have contingencies but you know maybe you have to be okay with an outcome where you might lose a little bit if the worst happens like if we took John back to before he lost everything and said hey if if [ __ ] hits the fan you’re gonna lose 200 Grand per house are you cool with that he probably would have said no and picked a different um a different type of investing but if he was making a million on every house he
(46:54) might have said yeah that’s no problem John do you know what would this rent for this host rent for long is a long-term rental I haven’t looked it up in about three years uh to be honest with you I haven’t looked since we actually bought the property yeah and elal is pretty established with all their short short-term rental bylaws and everything like that they just said pretty much stay out of the main village and do whatever you want on the outside and we pay our our fees and and we’re laughing but no I haven’t looked at
(47:22) long-term rentals there for a long time and then our last plan that Andrew didn’t say is basically we could just use it as a vacation home at the end of the day if we wanted to because the prices are so low there and we love going there it’s beautiful and in the summer and the winter we love skiing and we actually don’t use it very much because it’s always booked but if we had to use it as a vacation home we’d love that too that’s the whole being okay with the other outcome right not every outcome
(47:49) has to be a profitable one um if you’re okay with it for sure how does the low season here compared to niag on the lake it’s want to draw a comparison uh basically a long a long analogy for the listeners benefit most of our listeners will understand Nag on the lake it’s kind of like it’s a what what’s what’s the equivalent in BC for our BC listeners the Napa no sorry it’s a oh it’s escaping the the line region in a VC ohok okag Valley Ok sorry yeah investor here apologies I’m
(48:23) an never getting kid all right all right so yeah John how how does this compare would low season like how would low season compare uh between the between the two low Seasons because they’re different right elville is busy abolutely ski season is it it is yeah so January February March we’re absolutely slammed every weekend every week is pretty much booked at our absolute premium prices and then like I mentioned there’s a season or two that’s pretty slow March and April are a little bit slower as it’s pretty wet but as it
(48:53) dries out May June July August are absolutely crazy and then September October what I didn’t know is they do all these festivals out out in elville way they do all these Halloween festivals and Beer Fest uh cider Fest all these different things so fall is absolutely crazy there too and then November December a little bit slower again and then picks right up again for winter and then how the rent rates compare between the two markets for short-term rentals yeah uh trying to think it’s not as expensive it’s it’s quite a bit cheaper to stay in
(49:31) elville it is a lot cheaper yeah and again 3.95 a night Canadian what’s your Nar on the lake property yeah it’s very different like again like I haven’t done the cash on cash in a long time but our cash on cash is exponentially better in elville than it is in Niger on the lake for us but again we bought the elville property a year and a half before we have that 2.
(49:57) 9 % mortgage rate versus a 7% in Niar on the lake if we had both properties at the same time it’d probably be pretty comparable yeah sorry I don’t have actual numbers for you right now that’s okay but just H like back of a napkin it sounds like you could probably afford two elate V Properties for the price of your nager on the lake property in gener more cash flow AB oh yeah two and a half times probably even yeah for sure so I I can understand why that’s that be your next investment property all right same
(50:25) question for Andrew think about like so let’s let’s just you know everybody talks about the 1% rule or they used to so what what if he does if he does 110,000 divided by 12 so that’s 9166 a month on average what is that out of the say you’re in for what 300 John on it yeah that’s pretty accurate I don’t know if we’re gonna hit 110 that might be a little aggressive but okay say I’m off by a bit you’re 3% rule you’re 3% rule if you hit 110 so right some simple math I mean to put it in perspective at a
(51:01) 2.9% mortgage rate that’s a Grand Slam in my opinion for sure yeah yeah I think we just create a whole bunch of competition for John let’s just push the air date back a little bit until we all uh pick up one as well that’s it yeah exactly uh now both of you guys are big on Research as well and Andrew you I know you’re big into the recreational uh stuff as well uh the question that comes to top of my head is how do you do research on these things in aird air DNA always seems to come up um how do you
(51:30) guys how do you guys do your market research for recreational use properties I mean I can speak like we will’ll try air DNA wherever we can like I’ll buy the subscription to the area um I haven’t done a lot of it like I’m not like the Airbnb master or anything um you know the hospitality when we when we got into toore it was it was pretty much a decision based on what we knew of the area we knew of the the offerings it had the popularity that was growing um and then the limited Hotel fac facilities
(51:57) but air air DNA was pretty useless for the area uh just didn’t have enough base of knowledge on the area to really be that helpful for us so um you know I I feel like we probably uh in hindsight could have picked even better markets but we like that market it was familiar and uh you know I’ve spent a lot of time up there and then sorry you mentioned as recent purchase can you share like high level numbers like how how did it make sense like how did you how that how were you able to come to the decision it was
(52:28) a buy uh Neptunes we were pretty optimistic about what we could do from a um from a a General Revenue standpoint and then also the ability to add units so nine acres there’s only five five cottages on that right now but the zoning allows so the as of right zoning allows for um pretty much as many as we can fit as long as we uh we respect the setbacks so we’re just in the process of doing that the development on that uh profitability uh is there uh we’re working through um those numbers to kind of refine them right now and a lot of
(53:06) it’s going to going to depend on the feedback we get from the municipality in terms of what they’re willing to allow uh but initially we we were quite hopeful that we could make the existing houses profitable but with the uh sort of like the post lockdown era um rates have come down quite a bit and made what would have worked say during lockdowns would have been very profitable less or so so um we actually were a little surprised that we were lower than we expected for season but we also came in low like we or came in late like we
(53:39) didn’t get into the market until we closed in mid end of May of 2023 so we didn’t really have any sort of runup with our U platforms Airbnb any of that like we we inherited some bookings from the previous owner uh but uh you know we’re optimistic that this coming year will will be a heck of a lot better but we’re also not waiting for that to happen we’re going hard on the uh on the development play because the zoning is there waterfront property uh so we’re pretty optimistic about what we can do
(54:08) there it’s just about finding uh one specific model from a construction standpoint that works really well and has a lot of character and you know getting kind of a volume building discount can you kind of paint us a visual picture with because I know you’re very eloquent you you mentioned de like what do these properties look like are they Cottages are they Yurts or so what what’s there right now um looks like you know little Bungalow style Cottages um and then there’s the main house which is
(54:40) you know distinctly not really a cottage it’s it’s on the the road front the previous owner lived in that building but we’ve converted it into one of the uh airbnbs that one is right now available for year round but we just haven’t done what it needs yet to really make it appealing for year round use um and toin Mar’s just like frigid and cold and you know desolate in the winter for the most part uh although we’re looking to change that uh can’t change the weather but we can change what to do um
(55:06) so that’s what’s there right now but we’re looking into a number of different things including like an A-frame um Cottage that we can kind of rinse and repeat um but we’re going to keep it interesting whatever we do uh make it Instagram worthy that you know big thing and then of course kidf friendly uh we do get a lot of families up at that particular location uh it works really well for families so it’s a key of being able to access all the the nearby amenities and then having a heck of a lot of stuff for the kids to
(55:32) do so I know I’m a lot older than both of you so when I went to friend’s Cottages they were usually very very basic I remember going to a friend’s Cottage where there was no ceiling it was just you know a peak roof and then there was yeah there was there was walls between rooms but there was no ceiling so there was no complete separation between bedrooms that’s what I’m saying so you had to be quiet anyone who snored you could hear it cuz again there’s no complete separation uh but Andrew you’re
(56:03) talking about like these had to be Instagram worthy where I stay was not Instagram worthy it was it was you know was Bare Bones no way it was for season you know I mean all the all the all the cutlery plate wear was you know they someone bought it from like the 1970s garage sale you know I mean and that’s what these look like like a lot of these hous the the existing ones like they’re not super great construction um they’re very basic they’re not like Instagram worthy in any way um but that’s that
(56:31) blends in in that market right you can do fine with that um but if we want to do better than fine which is what I always aim for right you never just aim for average um because if you aim for excellent and you hit average then I guess maybe you’ll be okay um but we we always want to go U you know the best we can go within reason and that’s the expansion this isn’t for your like your IG game I imagine there’s returns involved incremental that’s the big thing like we we’re we’re taking what
(56:58) works at the camp and and applying that at the cottages and people come to our camp and they literally want to do yoga po poses in front of the tents and take photos of it and then share it on their Instagram they do they do reals they do you know of them by the fire and and it’s it’s like a memorable Instagram worthy experience and we just want to make sure that we create that same thing because that drives our own marketing for us at no cost right like I mean yeah we invest in the experience but they
(57:23) they advertise Us for free and when we’ve done like on our camp for instance we’ve done it two years in a row where we got 177,000 or more comments of people entering for a free stay at our uh at our facility uh basically just tag somebody you know to to enter yourself for for um a chance to win a free stay and and 177,000 plus each time we did it so they went you know pretty viral explore Ontario we did like a a promo with them and like jointly posted and did the giveaway and it it worked out well so this is what we’re trying to do
(57:55) uh with the Cottages as well I’m laughing because I follow John on Instagram and I know how when you said people literally do yog poses in front of the where they’re staying John John for anyone doesn’t know John John is well traveled and goes to places just as nice as Andrew’s cam Crown just a disclaimer that’s because my girlfriend is in social media she’s a social media manager and influencer so most of this is against my will but uh yeah I have a couple photos are you looking right now Rowan yeah oh
(58:29) my goodness that’s where my eyes are diverted oh boy is this on Courtney’s uh Instagram no it’s on John’s like there like yeah there’s literally John shirtless I’m staring at somewhere really nice yeah I think that one’s Croatia yeah we’ve been on a few fun trips oh boy yeah but if firefighting and real estate don’t work out for me I’m a great photographer and video graer now all of Courtney’s Instagram is pretty much me doing all the videos and photos so I’ve got a another career
(59:03) there waiting for me at least there’s one of you in Bali and I don’t know it’s some sort of hollowed out palm tree that you’re sitting in this talking about John doinker inst on Instagram see maybe I’ll break a thousand followers now thanks everyn we should definitely have a Courtney up to the camp I’m sure shirtless photos of you up there John I’m sure people would love it perfect we’ll set it up that’s hilarious everybody just listening to this is probably uh really scratching their head right now yeah
(59:42) sorry everybody well that’s why I’m telling them where to find John’s Instagram so they’re let in on the joke oh boy so yeah so I guess that’s oh interesting it must be a kpi for Andrew’s business like how many times can they find their campground on someone’s Instagram it really is it’s a funny thing like how do you how do you not just be like if you’re if you’re trying to think about what’s your competitive advantage that somebody can’t copy sure they can’t copy your location but if if
(1:00:09) we’re like a cottage Resort there’s plenty of other Cottages around so how do we become distinctly different and like momentum and first mover advantage in that space is important like if you have a reputation people know you by name or they they know of what you stand for and your cool experience your brand precedes you then um I think that your your longevity is is much more protected and you’re getting free advertising for it and free advertising which is huge right because then that drives demand then your equilibrium
(1:00:40) price per night goes up just like John’s experiencing right now on his Airbnb all of a sudden you got a games room demand is up and your price went up because of it and that’s you know that’s the key longterm because average results like if you look at average results in Ontario for just about anything it doesn’t really make that much sense to go on to go in on it right now uh so it’s it’s doing better than average or getting a better than average price you know or combination of all all the above that’s
(1:01:06) why I need to book John’s Place in elville before before this episode gets out I want to see there yeah downward dog in the garage perfect so I I’m apologize because I think we’ve gotten away a bit from the from the subject the topic of the book uh but I’m guessing that both both of your Investments fall in line with what the book teaches cash flow first you know PL what interesting the the people we interview so many of them you see like the fundamentals coming out in what they’ve done right and some of them maybe maybe
(1:01:40) you would say hey for me I wouldn’t feel comfortable with that like because everybody’s going to apply those fundamentals in their own way right and some people have a different risk tolerance which is fine um you know not not every investment is for every person so yeah for sure I mean that was the point and you know when when I remember and John and I were doing the interview where we were talking about the my chapters and like my fundamentals like uh you know there was a pretty deep discussion there we talked a lot about
(1:02:05) it and I remember you really loving that discussion John so I did absolutely yeah it’s all most of your big principles compiled into I don’t know 20 pages into the like the first 20 pages of the book is all of your the basics of real estate investing and how everybody should approach it in my mind but then after that it’s more of a buffet of how everybody built their wealth so learn the fundamentals from Andrew read the chapters from all the interviewees like find what strategies you like take what
(1:02:37) you like discard the rest and then really Attack One Avenue of real estate and you’ll have a pretty good base from there and this show is kind of like a buffet as well like this episode specifically because Andrew’s Andrew’s recreational properties are significant scale like Andrew you have several Partners on them active Partners on am I correct yeah in in different different different departments like one for like daily operations like yeah you have like an Acquisitions team well the the the four of us uh we all kind of we take on
(1:03:07) different things we do have a significant employee base that works the sites for us so we had up to 10 employees at at the height of the summer at any given time um and that should probably grow this year between two facilities so lots to do lots to grow lots to do lots to grow versus John is you know we’re talking about 300 Grand American that’s that’s a very reasonable bite for most GTA people people that live in the GTA to afford that for sure there is still affordable real estate out there you just have to pick and
(1:03:39) choose what strategy is going to work for it and it just so happens that the Airbnb strategy Works fantastic for it moving forward in the future like I’ve done a lot of flipping of homes so maybe the next step for me is going there buying a cheaper property and do doing some Renovations there kind of combine my two skills we’ll see what happens out there MH and then like for we talked about like risks and plans B A and C um I think we just touch on the fact that you know if if John can get like a large a large summer
(1:04:10) um business then you really reduce the risk you really improve your cash flow as well right like f we talked about Blue Mountain for example like when I was growing up nobody went to Blue Mountain in the summer like almost nobody now it’s nuts right right no actually no sorry people tell me it’s busier in the summer than it is in the winter which is mountain biking too right a big it’s uh it’s like The Bachelorette capital of the of uh of Ontario and don’t don’t don’t ask me how I found
(1:04:39) out I’ve been to a bachelor party there that’s a good point yeah not Bachelor but uh again like there’s probably there’s probably still upside for John as well with with climate change and like I said there was no snow and anywhere almost anywhere in Ontario in the ski area versus elville hat snow right so John still has upside his Investments more protected than other people’s Investments and again Lower entry point really reduces risk for sure and they’re investing a lot of money into the town of el right
(1:05:12) now so I do believe it’s going to get more and more built up and prices have started creeping up but I think it’s going to really again I don’t want to make a prediction or anything but I only see it becoming more lucrative tone out there well the US economy is strong as well with a strong economy comes people wanting to spend more Recreation definitely yeah so less likely needs for plans B and C for sure all right gentlemen I have to go to hop to another interview it’s funny enough is I have to
(1:05:43) go have to drive to Andrew’s office now uh any final words where can people find the book yeah so it’s going to be released on Amazon and we are going to be doing an audible version as well we haven’t quite got there yet but that is one of our big goals um like we were saying we don’t have our official release date yet but we expect it to be out in mid February but uh we’ll definitely be releasing it on both of our platforms Andrew and mine on Instagram to release when the book’s actually coming out but
(1:06:13) as of right now we don’t have a date for it and what’s it called so it’s called Uh real estate Titans tools tactics and wisdom for Canadian real estate wealth I love it so a little bit of a play on tools of the Titans we we had the inspiration from that so we wanted to sort of build that into the title love it love Tim Ferris love for our work we love tools of Titans uh then I had something else but I totally forgot all right gentlemen thanks very much for doing this yeah yeah thanks for thank you for watching if you want
(1:06:45) to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.com CA /youtube to register for our next class that link is also in the description as well I publish at least two to three videos a week here so subscribe if you want to keep learning from seasoned investors like myself and my guests and if you’re just starting out feel free to ask questions and comment below and I do the
(1:07:11) best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor training.com

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UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

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Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Maximizing Rents With Basement & Garden Suites With Andy Tran

Is everyone feeling better about the budget? It’s been two weeks now and it’ll be about 2 years from now till we have a new budget from what is expected to be a Conservative government.  Welcome to the Truth About Real Estate Investing For Canadians Show. I’ve been your host since 2016, Erwin Szeto.

Investors, not just real estate investors, continue to be disappointed with the recent tax changes around increasing capital gains inclusions on personal and corporate owned investments.  Both the Canadian and Ontario Medical Associations have asked the Trudeau government to reconsider as many doctors incorporate their medical practices for the tax advantages to make their income more comparable to their American counterparts.  This was something over governments negotiated to stem the brain drain of our locally trained doctors from moving to the USA.  

Unlike government employees, these doctors don’t have pensions to rely on.  If you’re having trouble finding a family doctor now, it’s going to get worse and it will be less likely they were trained in Canada where we have some of the finest medical schools in the world.

Quality of life will continue to diminish in Canada. Cherry and I have no plans to move to the USA other than our real estate investment portfolio but we are investigating private health care alternatives because we can NOT rely on the government to take care of us.

Canada is still comparatively a wonderful country to live, buy a house, raise a family. Ask any international student what they left behind to come here and the alternatives.

I just returned from a week in Singapore, widely considered among the least affordable cities in the world. The path to permanent residency there is harder than here in Canada. Opportunity is among the best in the world, low taxes including a flat 15% income tax but my word housing is expensive.

According to wise.com: a one bedroom apartment in the city centre average rent is $3,625 in 2022 so it’s likely higher today vs a Toronto 1 bedroom is around $2,500.  The price to buy seems around 50% higher too. 

Would I live or invest in Singapore, likely not even if I could afford it, but with the new capital gains taxes, it makes sense to own less expensive properties, to stay under $250,000 in capital gains for example, I can own three houses in the USA vs one triplex here. It’s easier to sell one house per year to spread out my capital gains vs I can’t split a triplex to sell.  

The case to invest in the USA only gets stronger with the new budget and pushes more and more Canadian investors away from socialism and towards capitalism.

As for investment, I’ll continue to look to cherry pick the best markets for investment in the USA but with the way this country is going, my focus is not just on investment in the US but potential houses for my kids to live should they ever want to move.

Maximizing Rents With Basement & Garden Suites With Andy Tran 

On to this week’s show! We have one of my oldest real estate investor friends Andy Tran who was among my first clients and home inspectors.

I’ll always remember the first deal we did together, a detached house in Hamilton for $216,000. The house had been sitting for nearly two months before we came along and during our appointment to see the property, I noticed there was something not right.  The owners listed a man and woman’s name but while inspecting in the fridge and closets, I could tell only the father and kids lived in the house.

In speaking with the listing agent to gather information for our offer, the agent informed me the sellers were divorcing and hated each other.  Knowing we had a motivated seller, our offer was a low one and was promptly accepted to our surprise.  Note that we also included our closing costs to be paid for by the sellers.  This was back in 2010 and we’ve both come a long way.

Fast forward to the present, Andy is the market leader in secondary and tertiary suite additions.  In plain language, that’s basement apartments, additions for self contained apartments and garage or garden suites which are also apartments.

Andy is a master of maximising the rental income that can be generated from one property.  Andy has consulted and designed over 100 apartment conversions between my clients and I including land severances.

If you’d like to learn more about Andy’s services available at Suite additions, simply go to www.suiteadditions.com where he has checklists and beginner guides to secondary suiting plus his in person training program Andy mentions on the show which sold out in April but expect another this fall.

Andy’s a good guy and that’s the truth about real estate investing. Please enjoy the show!

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UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Side Hustle 14 Houses in Georgia USA. Giving Back To Entrepreneurs With Shawn Bedard

Three sleeps later and I’m still so disappointed in the Federal budget. 

Hello and welcome investors to the Truth About Real Estate Investing where it’s never been all sunshine and rainbows. My name is Erwin Szeto, Top 20 Real Estate Influencer in Canada, host of this tell it like is podcast ranked #81 in all of ITunes Business, my team and I have transacted on over $440,000,000 of income properties translating into over 45 self made real estate investor millionaires in Ontario where it’s harder than ever and the new budget makes me sick to my stomach.

Sadly I knew a tax grab was coming since our Liberal government loves to spend and go into debt. Someone was going to have to pay the piper which played into my decision to start selling off part of my portfolio in Canada. Thankfully those houses close in May so I’m good there. I have another house going vacant at the end of this month as I told the tenants back in December I was planning on selling.

A renovation is needed as the tenants were there for 9 years but the scope will have to be minimal for a quick turnaround to stage and list. I’ll set my asking below market and hold offers requiring a closing before June 25th of course.

Federal, Provincial, Municipal governments, you asked for it and I’ll be here educating hard working, middle class Canadians all day and night so we don’t have to be subjected to your onerous policies. 

In case you missed it, in 2022, the Ontario provincial Liberal said they’d get rid of Doug Ford’s Nov 2018 rent control exemption on new construction.  The NDP promised to go a step further, promising “full rent control … none of this changing the rent on a vacant unit,” former NDP Leader Andrew Horwath said, the honourable current mayor of Hamilton, On.

Link: https://nationalpost.com/news/ontario-election/ontario-liberals-promise-to-reinstate-rent-control-as-it-existed-before-2018-election

Needless to say we’re going to make real estate investing great again for my clients and family.  I’ll continue to share our journey to divest our Canadian investments to diversify, reduce risk, improve cash flow where there is no rent control in the landlord friendly USA. Our current target markets are Atlanta, Savannah, Georgia; and Dallas and Austin, Texas.

Ownership structure wise, it’s looking like Cherry and I will own our US company personally to at least maintain $250,000 capital gains inclusion at 50% for each of us and load up on liability insurance. Thank goodness mortgages in the USA are commercial style, DSCR so my personal credit in Canada matters little. It’s all about the quality of the deal and I can find those all day with SHARE’s help. Not advice, just sharing what I’m doing. Please seek professional advice. 

Side Hustle 14 Houses in Georgia USA. Giving Back To Entrepreneurs With Shawn Bedard

On to this week’s show! My friend Shawn Bedard who I first met at REIN over ten years ago and our real estate investing paths were quite different. Back in 2010, Shawn couldn’t find deals that make sense in Ontario so he went to landlord friendly USA and bought 4 houses in Atlanta and 10 in Memphis, Georgia. His experience and investment went…. I’ll let him SHARE.

Other than real estate investing, I’ve invited Shawn on the show to discuss his volunteer work at a non-profit organization called Entrepreneur’s Organization (EO), specifically the Accelerator program where Shawn leads the initiative to guide entrepreneurs with $250,000 to 999,999 in revenue USD to get over a $1 million USD and become a full member of EO.

EO has been an invaluable resource for entrepreneurs like Shawn and I. I luv it hence I joined the board of our Toronto chapter.  What I luv about EO members is they’re kind, successful people who all want to make their mark in the world. Our values are:

  • Trust and Respect. Each of us is unique and equal. …
  • Thirst for Learning. We have an insatiable curiosity. …
  • Think big, be bold. We innovate, take risks and see opportunity in a challenge. 
  • Together we grow. We are committed to each other’s growth and well-being.

To learn more about EO’s Accelerator program

https://eocanada.com/accelerator/

To connect with Shawn:

LinkedIn: https://www.linkedin.com/in/shawn-bedard-65a3/?originalSubdomain=ca

Web: https://jigtechnologies.com/

To Listen:

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UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Cash Flowing $10k USD Per Month on 20 Houses He’s Never Seen With Andrew Kim

I just put the finishing touches on my research report called “The Best Places to Invest in the USA in 2024” and it took forever because the number of Global Fortune 500 companies each investing billions of dollars into building new manufacturing facilities to each create thousands of high paying manufacturing jobs with average salaries of 55,000 to 135,000 USD plus benefits.

When you match that to the income properties I’m targeting at $100,000 to $300,000 with rents of 1,100 to 2,400 plus utilities in 9-10 different cities… you can imagine the analysis paralysis.

If you want to do your own research, Chatgpt or Google any of the following companies: LG, Honda, Toyota, Samsung, Texas Instruments, TSMC, Intel, Ford, GM, Volkwagen, etc… then “billion dollar investment in the USA.” 

I’m trying to track them all in a spreadsheet I started with investment dollars, jobs created, location, etc… and I have 21 manufacturing plants in different stages of construction, all over 1,000 jobs being created totalling almost 100,000 jobs and $213,000,000,000.

Compare that to the major job stories in Canada: Stellantis in Windsor and VW in St. Thomas Ontario. Combined, that’s almost $8 billion USD investment, 5,500 jobs. 

To put that in perspective, the America’s population is 8.5X the size of Canada but is receiving 27X more investment and creating 18X more jobs.  Keep in mind, each manufacturing job creates 4-5 spinoff jobs.

Why is all this economic gobbledygook important? Because income growth drives population growth. Where people can make or save money, populations will grow in places like Tennessee, Texas and Georgia with little to no state taxes and massive job growth.

I’m getting regular questions on which cities to invest and to share my research so it’s ready and there’s a link in the show notes: https://www.infinitywealth.ca/usguide-tarei

I’m super excited to share with more Canadians feeling denied opportunity to invest in real estate as really, there are few good options in Canada vs the American dream of earning US dollars, having rights as landlords, affordable housing with positive cash flow. Let’s Go!

Cash Flowing $10k USD Per Month on 20 Houses He’s Never Seen With Andrew Kim

On to this week’s show!

Returning to the show is Andrew Kim from Brampton who identifies as American. He used to invest locally, the return on time wasn’t there so he bought 20 houses in landlord friendly USA ten years ago now he cash flows over ten thousand US dollars per month.  His Accountant Carmen was the one who guided Andrew to invest in the USA along with several of her Accounting and Financial Planning Clients since 2008.  Since then they’ve combined forces to make the same opportunities available to everyday Canadian investors with the company they co-founded call SHARE thanks to their innovative technology and automation to bring down the costs substantially.  

Full disclosure: I am an advisor to SHARE, meaning I get paid to develop their business in Canada through Marketing and Sales. It’s the most fun I’ve ever had in my real estate career. I wake up every morning excited to speak with investors and help them find opportunities in the USA. Active as an investor and landlord since 2005, I’m eager to share with my clients and community a simpler way to combat inflation and build their wealth with less risk and higher cash flow, in places where investors are truly welcomed.

I want to thank Andrew and SHARE for inviting me along for the ride and for helping me invest in USA.  I can’t wait to start making offers in May after my rentals here are sold and closed.

As I mentioned, Andrew’s context of real estate and investing is very American since he lived in California for five years and wants to go back. He’s here today to share what 150 Canadians interested in investing in the USA have said to him.

Please enjoy the show.

📅Join Our Upcoming Workshop: How to Invest in the U.S. Real Estate Market as a Canadian Investor! For those who’d like a deeper understanding of how to invest in the USA, we are happy to announce our next US investing workshop on Saturday, April 13th.

🔗Sign up: https://USAworkshop.eventbrite.ca/?aff=YT 

To Listen:

** Transcript Auto-Generated**

Transcript:
(00:00) welcome to cash flowing $10,000 per month in US Dollars on 20 houses he’s never seen with Andrew Kim that’s the name of the show this is the truth about real estate investing show and that is the truth and you know what else is the truth is I don’t know anyone else personally who cash flows this much with that little investment in that little effort uh yeah my name is Erwin Szeto host of the show since 2016 done over 300 episodes I’m not that smart I have a lot and hence I have a lot of questions so I
(00:33) ask a lot of questions uh hence we’ve had over 300 episodes over an hour long each and a lot of answers on the show from people much smarter than I anyways for some reason people keep asking me for my research and where I plan on investing hence I just put the finishing touches on a research report called the best places to invest in the USA in 2024 and it took forever because there are numerous Global Fortune 500 companies and they’re each investing billions of dollars into building new manufacturing
(01:08) facilities in the states to create thousands of jobs each all high paying manufacturing jobs with average salaries between 55,000 to 135,000 that’s all US dollars plus benefits again that’s that’s a lot of money uh when you match that to the income properties I’m targeting at somewhere in between the range of 100,000 to 300,000 American With Friends of 1100 to 2400 plus utilities uh I’m looking at like nine 10 different cities uh so I’ve done a lot of research uh hence I’ve since my research report is
(01:41) honestly not even complete in terms of everything I’ve read but it’s 24 pages uh again you can imagine the amount of analysis I’ve gone through and the slight bit of paralysis I’m feeling if you want to do your own research which I welcome you to do I think it’s a great idea to do your diligence at any time all the time feel free to chat GPT or Google any of the following companies LG H Honda Toyota Samsung T Texas Instruments tsmc Intel 4 GM Volkswagen SK n uh Etc and then after that name the
(02:15) company put in the words billion dooll investment in the USA and then see what comes up read them all because I have you can see why this report took so long to put together I actually put them all on a table as well so that table is in my report as well uh I’m and I’m trying to track them all in a spreadsheet that I started uh I’m focusing on investments that are a billion dollars and up so I’m tracking investment dollars the number of jobs created with that just in that manufacturing facility and the
(02:44) location and of course I have have links to all the sources as well uh and so right now my list has 21 manufacturing plans you know the crazy part is every time I go doing some re I do some research I’m adding like one or two other job stories onto this list so it keeps growing anyways right now I have 21 manufacturing plants that that are in different stages of construction all over each over a thousand jobs uh being created totaling over a 100,000 jobs or that in dollars that is 213 billion US in in investment now
(03:19) compare that to like where this is Canada this is a Canadian show apologies for anyone I’m confusing thinking this is an American show this is a Canadian show I am Canadian uh I all my friends I was just I was just talking my friend uh Molina in uh in Windsor she’s tell me things are booming in Windsor for those who don’t know stellantis is building a electric electric um battery plant in Windsor Volkswagen is has a partnership in direct building a battery plant in St Thomas Ontario combine those two so as
(03:47) far as I know as far as my research shows correct me if I’m wrong please out there uh correct me if I’m wrong the total investment between those two projects is 8 billion US and jobs that’s 5,00 ,500 to put that in perspective the American population is 8 and a half times the size of Canada America is 8.
(04:09) 5 times bigger in terms of population than Canada but the Americans are receiving 27 times more investment and creating 18 times more jobs you know the old rule of thumb that America was 10 times larger than us uh yeah we don’t have that ratio holding true in terms of investment or job creation also keep in mind that each of those manufacturing jobs creates four to five spin-off jobs so the job story in the states is just incredible and honestly we are such a small drop in the bucket comp in Canada compared to what’s
(04:46) going on in the states and no reason to be jealous the Americans are the global Mega superpower I’ve done lots of research on this as well I track China I track the bricks uh welcome completely open to having debate with anyone uh you know if you want see something crazy Go YouTube Paris in China and you tell me that the Chinese have a healthy real estate development environment in China please tell me anyways go watch that first and then let me know if you think you should be investing more of your money into the into the wand the R&B
(05:23) anyways uh so why all this economic gobble de goop why is it important because income growth drives population grow growth where people can make or save money populations will grow and that includes places like Tennessee Texas and Georgia where there’s little to no state tax and massive job growth where people make more money uh I’m getting again I’m getting regular questions on which cities I’m looking to invest in and to share my research so again it’s readily available now I’ve given a link in the show notes it’s too
(05:52) hard for me to read so links in the show notes so if you’re on my email list you will get it there if you’re not on my EMA email list go to the truth about real estate investing in.ca and on the right side you can pick up the report there as well all right and I’m super excited to share with more Canadians who are feeling denied opportunity to invest here locally for for for good reason uh and I’m talking to two three investors a day every day about the options available in the Canada in Canada versus
(06:20) the US like we’re we’re I honestly feel like I’m going to be able to live the American dream of earning US Dollars having rights as a landlord I’m going to be buying affordable housing with positive cash flow let’s go on to this week’s show onto this week’s show we turning to the show is Andrew Kim from Brampton who identifies as an American he used to invest locally uh but the return on his time wasn’t there so he bought uh he sold his houses in Ontario and he bought 20 houses in landlord friendly
(06:50) USA 10 years ago now he cash flows over $10,000 us per month that’s cash flow from collecting rent and after paying expenses on his properties including after the mortgage so um it was his accountant Carmen uh who was the one who guided Andrew to invest in the USA along with several of her other her accounting and financial planning clients since 2008 since they’ve uh since then they’ve combined forces to make the same opportunities available to Everyday Canadians not just the ultra wealthy uh with a company they co-founded called
(07:24) share thanks to their Innovative technology and automation to bring the cost down substantially uh this is now a reality full disclosure I am an adviser to share meaning I get paid to develop their business in Canada through Marketing sales it’s honestly the most fun I’ve had in my real estate career I wake up every morning excited to speak to investors and help them find opportunities in the USA just even just showing them that I research everyone gets excited and they ask for it uh I’ve been an active investor in landlord
(07:51) since 2005 and again I’m eag eager to share with my clients in my community a simpler way to combat inflation and build their wealth with less risk and higher cash flow in places where investors are truly welcome if you don’t believe me we’re not welcome here in Ontario go to my friend Kaya Andre’s uh Facebook page it’s called Ontario landlord watch where PE where Ontario landlords are consistently asking for help because they are in honestly nightmare situations where tenants are not paying them rent for months or even
(08:21) worse they’re trashing their properties and there’s nothing they can do about it I want to thank Andrew and Sher for inviting me along for the ride and helping me invest in the USA I cannot wait to start making offers in May after my rentals here are sold and closed uh as I mentioned Andrew’s uh Andrew’s context of real estate and investing is very American since he lived in California for five years and he wants and he wants to go back and he will go back as soon as he’s able to he ised it today to share with
(08:48) uh share what he’s had the conversations he’s had with 150 Canadians so far who are interested in investing in the USA what they’ve said to him please enjoy the show hi Andrew what’s keeping you busy these days uh nothing much just nothing much just trying to build an Empire uh selling us real estate to Canadians but it’s not just that like you’re you’re a workaholic which is partly what got me interested investing a lot of my time and money and share yes explain the workaholic part I call you
(09:27) workaholic yeah I I just like keeping busy I like problems even though when you’re in them they they feel like crap but I just do like hard problems and I think you know growing up I was always super busy so um when I’m not doing something quote unquote productive I feel like I’m wasting my life so yeah as a kid it was like School piano baseball cuman like it was just endless 7 days a week um so yeah I think that just kind of set the tone for life and it’s just like constantly working working working
(10:03) and doing a million things but now focusing on one or two mhm you know the other two being like family and personal health and then work which is my business which is still my passion but when things are crazy it doesn’t feel great but I still love it how many hours a week do you work oh man over 70 80 probably yeah for sure which is interesting cuz you’re pretty successful financially yeah it never feels like that but yeah I I I guess I’m okay like uh I was semi-retired for a bit uh but I just don’t you know the mind is going to
(10:42) wander the mind has problems to solve and I I was looking for interesting things to do and you know found another thing to do and I say you know that I want to retire early but I don’t think I’ve ever retire early that’s impossible it’s actually my dad’s medical advice to never retire yeah yeah like a family friend of ours literally had a stroke within 3 months of his his retirement oh wow yeah yeah see like I think if if I were to retire it’s more like maybe I’ll focus on a nonprofit but something big
(11:10) and impactful not not like more solution based rather than remedy like than like dealing with a a symptom I want to deal with the root cause fascinating yeah and we have a lot of root problems as Canadian investors it’s funny because uh when I screen when I go through like these groups these Facebook groups that I belong to when I see people’s problems and I think my frame of mindset now is like what is the root problem it used to be you know you had to be way you have to be super diligent so let’s take the Ontario
(11:46) real estate investor for example if an Ontario real estate investor has a problem with a tenant I’m thinking like sometimes you just got really unlucky and then other times it’s like you just have to be so diligent like the best practice for screening a tenant is you for me is I use single key to screen them right uh and most people call it a credit report it’s a little more more more it’s more comprehensive than that I use front lobby for my tenants so I report their rent on their credit both
(12:15) positive and negative and uh you know I generally meet them too before I sign so like I take that level of diligence the average investor does not not even close oh really not even no not even close huh what do they do I thought people talk about gut feeli interesting wow okay I appreciate that like so my background in school for example I did two years of Commerce which is basically prepare you to be a um a commercial Banker like what I lend to this business to I lend to you whatever so that’s how I look that’s how
(12:50) I make my decisions they’re highly quantifiable and I have to defend them to my wife Jerry ultimate thesis defense yeah yeah yeah but again like for the everyday investor who owns like one two properties often times they me just have their realtor do it yeah I don’t see that level of diligence generally in the market I don’t remember where I’m going but but now but now my frame mindset now is also now knowing what what is available in the states full disclosure what I see I’m like the root problem is the property is
(13:25) located in Ontario and it’s rented and it’s rented to a long-term tenant that’s your root problem right you need to solve that root problem right because I literally had a friend in the weekend messaged me and say hey I think we need to start a lobbyist group for against the federal government for us landlords need to get together you know to lobby for for us Fally I’m like I’ve my policy has always been I’m not fighting government right yeah and then I thought about it for a little bit longer I thought you know
(13:54) what we’re doing now so literally content I told you content that I’ve put out I have friends who are literally sending it to MPS in Ottawa mhm and mpps in Ottawa in Toronto mpps are in Toronto saying this is what happens when you when you basically choke onti landlords is the capital will leave so I think by making opportunities available to Canadians Ontario investors available in landlord from the USA everyone’s going to see the rental supply drop from M and pop investor and they’ll see Capital flow of soth and I
(14:29) think that will get more attention than anything else plus I’ll make some money and I’m doing it myself yeah I’ve sold three properties of my home like you know uh they close in May so my intention to start writing offers with with Sharon in May um and I another I’m assigning another attendant right now to to leave a a fourth property that I’ll sell this year as well so that Big Year big year I’m excited anyways so you’ve had about 150 conversations now with Canadian investors yeah largely
(15:03) Ontario what would they be Mex between between provinces oh it’s like 90% Ontario like 9% BC BC and then 1% like Quebec interesting okay so what are what are Canadian investors telling you so majority of the ones we speak to are actually have at least one property locally um and then they’ve been actively either actively or just deterred from buying another one in Ontario so it’s either you know too expensive nothing works the numbers don’t work or two they’ve been burnt real badly by a tenant um so they’re a
(15:40) bit scared and then you actually have some that are actually being a little bit more proactive and they’re like I’ve been lucky knock on would but I know this is could this could happen um where the tenant could back become a professional squatter whatever and I don’t want that to happen so I think I’m going to take my next mment and bring it down south so this seems to be so what I just Shar is not is you’re seeing the same thing yeah definitely and then so what are people what are people interested in
(16:14) buying in the South well I think that’s you know they need a little bit of Education because they didn’t realize that there’s ways different ways of actually looking at the home like an appreciating home vers like high cash flow home I feel like a lot of the Canadians here they all Bank on the appreciation piece um whereas I’m like well yeah you can get that’s what we’ been sold though yeah um whereas in the US we kind of have these categories of a b and c where a is your higher appreciating asset your goal there is to
(16:42) kind of you know be break even on in a normal interest rate environment and then C’s are like high cash flowing homes where your cash flow positive day one the appreciation you’re going to get some appreciation but you might not get like a Toronto or Ontario type appreciation um and those are strictly for cash flow right I’ll debate you though we were just talking about like because my investment thesis is I’m going to buy your major manufacturing plants yes and I’ve tracked you know I’ve tracked real
(17:11) estate prices in like Alliston Ontario where they have Honda 4500 4500 Honda jobs Woodstock Ontario where they have somewhere between 2 3,000 jobs and Cambridge Ontario where Toyota has somewhere around 7,000 jobs somewhere around that and those all areas evoled up pretty well yeah yeah like every state like and I think we’re talking about C’s here every state has cclass homes but you know the C regions that we’re going after we’re hoping that they become B level pricing anyways but for the sake of being let’s call it Canadian
(17:43) and conservative and controlling expectations we’re going to dial it down to sort of the hundred-year national average of like 3% maybe year-over year national average yeah like but like that is you know even if you look at the 10 years prior to the pre pandemic they’ve crushed those numbers right um so yeah we we and we do that for the sake of just educational pieces but as we search there might be an opportunity where we do see some c-classes where we dial up higher because to your point they might
(18:13) be like in a neighboring area of a region that’s up and coming you know manufacturing might be coming um etc etc the like the job story in the states just ridiculous every time I’m like researching something I find another one story like holy cow it’s like there like billions of dollars just flowing into the America into the states yeah they’re trying to bring a lot of the um skill jobs and Manufacturing back to the US and then where AI is going too I know you’re looking at all the chip factories
(18:42) you know there’s going to be a shortage and they need those chips and that’s why nvidia’s been making the bets and same with Sam Alman the CEO of open AI yeah he’s talking to the Saudis about raising 10 billions I think it was trillions I know but I think for the for the immediate project he needed 10 billion but yeah long term he wants yeah he wants to build chips because he knows that AI is going to be chip heavy uh let’s talk about some actual specifics on deals for example I see a lot of our Canadian clients are buying
(19:09) in Memphis can you paint The Listener an a picture of what they’re buying in Memphis yeah usually Memphis um is you know in the mid 100s you’re talking 6% uh I’ll say cap rate but let’s call it returns um and you know we’ll chalk that up anywhere between like a 2 and 5% annual appreciation and then so if a house is in the mid 500s what does it rent for on average mid 500,000 or sorry you said mid 100,000 for no I thought you said mid 500 sorry okay so mid 100 thousands uh you’re talking about 11 to 1200 bucks right so
(19:50) 11,00 bucks for a property around 140 150 yeah right so for the cap rate lovers I’ve been yeah I’ve been seeing High six yeah cap rates on these properties yeah you’re in the sixes for sure and then you know as a Canadian investor I know what people have to go through to get to a high six cap rate yeah so so for the new listeners for the newer investors you’re typically buying a building like many units 6 12 30 wow you’re having to ask set what do they call it basically you’re turning over tenants
(20:33) right cash for keys whatever you’re compensating tenants to leave in order to uh renovate and raise the rents and so these are like two four six year repositionings asset repositioning is what they call it okay in order to get to like a five to seven cap wow okay right versus we can walk into a property day at a high six cat yeah yeah and those will be yeah and those those will improve over the next 5 10 years too right the cap rates will go up the rent rates go up M so yeah and then more for everyday language the cash flow
(21:10) is going up the cash flow is going up because there’s no rent control yeah and the econom is improving yep right and then the mortgage options are fantastic as well yeah what are what are what are KY investors telling you about the differences between the investment and the mortgages for example yeah so you know it takes a bit of time to try to educate them on the US the mortgage that we use which is the dscr The Debt Service cover ratio mortgage but what they’re saying on the Canadian side is that they’re kind of tapped out
(21:41) too their their personal credit is is maxed or and um that they’re in also a tough position actually that’s a good point that uh a lot of their mortgages are kind of coming soon to Renewal or they’ve got a high rate or it’s a variable and like it’s just they can’t anticipate their cash flow um because it’s unpredictable because of all the different types of mortgages they have um so it sounds like it’s Case by case and um like I kind of spin when I’m trying to talk to them and they’re like
(22:11) I don’t know like this house I think we did it on like a 9% variable whatever it is and I’m like that’s really tough to track like how do you actually scale when everything is so unique um so yeah they they um they’ve got a mix they definitely max out their personal credit here to get their inventory M um but they’re like I want to go faster how do I go faster and then we kind of talk about this dscr Mortgage in the US right and then how many dscr mortgages can I have oh man there are thousands of
(22:41) lenders you can get as long as the you know the the criteria of what you have to meet to qualify for a dscr which we can help you get there works you can do those over and over and over and in fact as you become better at picking these homes that opens up more dscr lenders cuz a lot of these a lot of lenders which you might not have heard but that they prefer to work with investors who have a track record MH um so the more of these you have it opens up larger pools of dscr lenders and better rates um but yeah dscr by V virt by by its criteria
(23:17) is The Debt Service cover ratio so as long as you meet that specific lenders like rental income to hard cost ratio ensuring it’s exceeding you typically can get at a more preferred rate and they’ll do these over and over and over um so yeah like one particular lender might have a limit of like 15 a year per person per entity excuse me you can own you can buy 15 properties in a year yeah like I’m pretty sure like if you wanted to do 20 30 we could help you find those more lenders even if we exhaust one
(23:50) particular one again there are thousands of these lenders it’s really as long as you can find the deal and you have the capital for the payment and the ratio works yeah but in your in your experience do you have trouble finding deals that work no no we don’t let’s get into that how does Share Fine deals yeah so we go it’s personalized down to the investor So based on you know what type of house they’re looking for appreciation versus cash flow that essentially tells us what price point they’re looking at um below that is also
(24:25) the the risk tolerance and then um their financing strategy are they using cash are they using HELOC or do they want a mortgage and then we’ll work those numbers out back into what kind of dollar amount you need to get started and then we’ll start searching M um across the landlord friendly States and we can do burs with share like for example I see deals that come out with like a25 $30,000 renovation so my thought process is uh because cuz for my own situation we’re going to pay down my principal residence with with the from
(24:57) the sale of my three homes three houses we’re we’re going to pay down cherry and I are going to pay down our mortgage and then use our helck for to capital for the capital for our payments for properties but because it’s helck it’s very it’s um you know it’s open it’s an open mortgage I was thinking I would buy the house cash with my he lock do the renovation and then go get a US mortgage I can do that with share yeah so yes and no uh so the Burr typic the Burr model usually typically centers around the
(25:27) after renovation value whereas we don’t focus on that we we take a uh approach of like what do we think the the cash flow will be after the renovation um so we look at the after renovation value of just purchase price plus your renovation budget which is funny yeah so we look at it like that um but then if we go and do refinance any sort of lift on that is sort of the cherry on top or the gravy um so we don’t we don’t Target the after renovation value so if you came to us and said hey I’m looking to spend
(26:00) 250,000 after purchase and renovation but I want to be able to refinance at like 280 we don’t back into that number that 280 number we’ll say we’re looking for a 250 home after purchase and renovation right which is totally fine because when I when we were doing this in 2005 when I started investing we just didn’t want to tie up all of our helck you know what I mean I want to I want to take out my he loock with a cheaper mortgage yeah and even though I might be paying more on the US mortgage I I view it this kind of like I’m making
(26:30) up I’m making US dollars out of thin air yeah yeah so why would I why why wouldn’t I want us based US dollar based mortgages when the trend is like you know economically Canada is not performing well against the Americans right so there’s there’s an article just in the financial post L last week that expect the Canadian dollar to depreciate like we’re expected to see a 71 Cent Canadian dollar per the financial post so get your US Dollars now that’s my point and here and here I can again I
(27:00) can create US dollars out of th air with a mortgage yeah so why wouldn’t I do that yeah so to to your point though we will do those types of Renovations like the 25k um where we if somebody needs a mortgage though uh we will kind of draw the line at let’s call it the 35 to 40K range uh just cuz the dscr lenders typically want something that’s livable and if it’s at 40 Kish renovation levels typically you might run the risk of not getting mortgage right so yeah if you got a helck then definitely that’s an
(27:32) opportunity to go in purchase renovate then go on put in on the mortgage that’s my play what are some okay so let’s go you we talked about Memphis for like cash flow play Let’s talk about appreciation play what would be an example of an appreciation play property yeah like the greater sort of Atlanta metro the Dallas Fort Worth Metro the corridor between Dallas and sort of Austin uh the Carol and then certain pockets of I mean even there’s certain Pockets inside of Tennessee that we would say that there’s
(28:04) good appreciation play um and then Ohio as well let’s pick on but choose choose a city let’s pick on that one let’s just say Atlanta okay because it’s just loaded with jobs coming it’s absolutely nuts yeah yeah right the hende skon is building a a plant north north west of the city so I’m looking at that area and SK on which is a Korean company are you familiar with them you heard of them no okay maybe if I see the spelling so they’re one of they’re one of Korea’s largest companies no literally it’s SK K
(28:39) okay o n is okay I don’t know what it stands for South Korea something probably yeah clue in I’m a horrible Korean yeah but yeah they built a plant already they open their doors in 2022 Northeast of the city Atlanta and they already have three they already uh hired more than they expected they already have 3,000 jobs probably somewhere paying somewhere between 55 to 60,000 I’m guessing right so yeah Atlanta is loaded with uh manufacturing jobs anyways yeah let’s go through an Atlanta example suburb of Atlanta
(29:14) example yeah uh you know so we could go mid2 200s and then you’re probably looking at like low 2000s rent High 1000s depending on the price range sliding up and down right um so backing into sort of like five mid five cap rates so cash flow we’re we’re laughing because we know not uh not everyone understands cap rates but for the folks who’ve looked at commercial real estate and uh anywhere you know what a cap rate is but again just knowing these rents like if you can get 2K rent on a 200k property that’s better than you you can
(29:58) find in Canada right and we’re talking about 200k Mid 200k American dollars so the amount of capital you have to come out come out of pocket is L way less than I think anything in Canada yeah and like if you look at the appreciation there too and I’m just kind of like sidest stepping the conversation but um you know we’ll write like that is what we call like a b class um and you know we’ll write that up anywhere between four to 6% 4 to 5% four roughly 4% year-over-year um but like we have data showing that in Atlanta
(30:35) specifically so there’s a lot of institutional dollars here like these T lots of REITs private Equity firms hedge funds buying up houses left right and center onethird of the single family homes are actually owned by institutions um which is like from an investor perspective great yeah because you know they’ve got the big dollars to invest uh data they they have their back Channel analyst and know where the manufacturing jobs are coming um so it is a safe piggyback strategy right um but from from like sort of like understanding the
(31:10) market they uphold a certain level of quality of the neighborhoods um and then they actually they have a study showing the density of different Metro uh sort of zip code subdivisions in around Atlanta based on how much is owned by an institution and thear larger density of ownership of Institutions leads to a higher appreciation rate so interesting yeah so I can see why they’re probably not slum Lords yeah and you know they’re looking at and again think about how we’re conservatively modeling four to 5%
(31:45) like these areas are seeing 8 to 11% annual year-over-year appreciation um the more density you get with an Institutional presence and folks are welcome to fact check us cuz I tell people like I make money selling in real estate go go check your own facts so I was literally on trion’s website so reach out of Toronto they they list their properties for rent on the website and the address because they’re for rent ads yep right so they the the address is disclosed I can go Google that address and go find
(32:15) it on Zillow and can find out what they paid for it right so folks you can go do this yourself go do your own factchecking do your own research yep so I know like Tricom was buying houses for like 200 Grand and now they’re selling them for like 300 Grand yeah so appreciation was not 46% yeah exactly yeah yeah and we we actually showed those slides I think at the workshop one of your us Workshop investing workshops we showed the slides um for the density of these institutions yeah Tron is one of the big players MH and then is so
(32:48) I’ve just focused on Trion because they a Canadian company it’s just uh I only have so much time to research there’s so many cities to research and again every time I research I find New pieces of information I’m like holy cow like this opportunity is just keeps getting better and better now specific to Trion I notic their their properties they buy are quite nice they’re probably all a class I’m guessing they even do some uh build to rent I like they B they build new construction for the intention of
(33:15) renting it out yeah and they’re quite nice yep like we’re talking about like 2500 square foot and above square houses detached Big Lots yeah is that is that generally what the the institutions are doing yeah so the institutions they do typically there so they like we’ll go into sort of a history and sort of the model of the institution their institution they they’ve got like an exit strategy right they’re not they’re very different from the retail investor or the everyday like Mom and Pop
(33:42) investor who’s trying to build generational wealth the Institutional Investor Cycles their inventory so they bank a Lot on the appreciation so the cash flow is like sort of it’s it’s important but not as important as the appreciation right um they actually turn out 20% of their portfolio on like a rolling 5year basis M um and then Replenish by net new so kind of moving back of like pre-institutional date the institutions really came in after the 08 mortgage crisis when they realized this how stable of an asset class was so they
(34:13) came in trying to buy different like scatter what they we call scattered sfr which is like houses all over um but they realized how they didn’t have the technology or the knowhow to kind of operate that inside inous MH um so so they went to whatever is easier and for them the easiest is throwing tons of money at developers buying these things and building build for rent bfr or B BTR buil to rent um and that way it’s easy for them they just buy it a lot of things are covered by the developer warranty and then they wait a few years
(34:46) and they sell them off and go build more you know so it’s quite cyclical they don’t hold generationally like everyday investors trying to seek Financial Security would do so different strategies for sure um but yeah build for rent or build to rent new construction are are great strategies too safe strategies interesting because just even from my own research My my what I think when I see like Trion and these built rent strategies is I don’t want to compete with them headon so I would think just you know thinking out loud I thinking I
(35:18) would go below them in terms of grade so I want it be B and C yeah like they they I wouldn’t say you’re competing um because sometimes they you can get slivers of what they’re doing and we often we we often sometimes get some of those um but again their strategy is completely different than say what you and I would invest for right we’re thinking about our kids we’re thinking about holding they’re not holding that long right they’ll cycle those things off interesting yeah and that’s like you
(35:47) know some of the off Market deals are these institutions rolling off their inventory um because they got to hit their returns and usually the returns are with their exit strategy you said a keyword that every investor wants to hear off market so can you explain that how do you guys access off Market deals um because it’s a common question I get does share do off Market deals they do they just I don’t know what people are thinking but yeah talked about where deals are coming from including um yeah because you you get a large feed of off
(36:17) Market deals yes yeah so we use um it’s our connection with institutions like to your point I like I mentioned a lot of these institutions they do roll off and have to sell off a portion of their portfolio every single year and like any sophisticated seller they’re going to try to sell to their Network first yeah before they go to the market exactly and um so yeah they’ll try to offload to the private Network we’re in that sort of pool of private Network and then there’s wholesalers um who actually work for
(36:45) these large institutions so not all institutions are in the build for rent or build to rent some of them still do play in the same world we play in uh so they have wholesalers that do quite a bit of volume we’re talking almost 100 a month uh they can search so um we tap into them because they look at us as an institution so we’re part of their deal flow and we’ll say here’s what we’re looking for and every month they’ll they’ll start looking for these off-market deals mhm yeah actually after seeing how
(37:14) things go in the states remember we went we met that one gentleman who’s a young wholesaler yep he wanted to scale from like 60 units to 100 units because part of it was he’s switching his clientele from retail mom and pop people to institutions so I told one of my good friends like who’s a wholesaler hey have you ever considered just selling to a re so I made an introduction for him and I’ll check you in how he’s doing with that because this makes a lot of sense yeah you way more transactions and your
(37:42) life is likely easier yeah that’s like the wholesaler’s sort of goal is to get in with a with an institution right it’s like I I can Source deals at scale I’ve got a big team um and yeah we can feed but like yeah that is the goal and then as the wholesaler we do more deals they become more loyal and they just start feeding us deals yeah so like business ideas for the wholesalers listening like why not sell to an institution yeah versus like trying to sell to because there’s a lot of people that are on a
(38:12) lot of wholesalers they complain about people try to do deals and they don’t have them they don’t even have the money right they’re trying to tie up the deal and then go raise the money yeah yeah yeah yeah so like yeah our relationship is a bit different now with our wholesalers they know we’ve got the money because we we work with our clients we do all the sort of um proof of funds the kyc know your um and they know that when we’re looking for a deal they have our sort of term specific deals um so they look
(38:38) specifically for our clients M now another question I get a lot is uh how long has share been in operation so how long’s share been in operation yeah since like 2021 uh roughly I mean conceptu we’ve been thinking about it for quite some time 2020 experimented a few things but I would say 2021 is probably official right when we got together and started uh but your CFO Carmen CPA on both sides of the Border Canadian but she lives in Tampa Bay mostly she’s been she’s essentially acted as an asset
(39:13) manager for her clients for for decades yeah she got in like the ‘ 08 like from the beginning uh so so yeah she’s been doing this for quite some time she’s the one that introduced me to it m um introduced the philosophies of tying and investing in terms of cash flow and wealth and then said hey this is the asset class to do it with so yeah she’s been in it for quite a long time which is fascinating because you don’t normally Hear About Accountants financial planners recommending real estate direct ownership of real estate
(39:44) as Investments because generally that does you don’t get paid off of that yeah and like to that point I think that may be a Canadian statement because like when I so to give you the context I met Carmen while I was living in the US uh and needed an accountant that understood the Canadian and US system for Canadians or Canadians living in the US and she became our tax or an accountant for my business that was based in California and then I asked her to do my personal stuff because I didn’t know how to do
(40:16) with this crossb stuff and so she got a glimpse of my whole portfolio which was not that big but I had a couple of Ontario properties and that’s the conversation that opened up right us rental homes yeah cuz you’re you’re investing here sucked it wasn’t making money yeah like I think you know I made money it just it didn’t feel like I was making money uh because I was so highly involved and it was just a lot of capital up front and this is what year was this this was 2010ish so like was cheap
(40:47) compared to now yeah but that back then it did not feel cheap and like to save that much money as like someone in their 20s was pretty tough right so so um and Carmen has other clients like you she was recommending this to she I imagine she was recommending American Investments to pretty much all of her clients yeah I’ve got yeah in the dozens uh for sure um so like prior when I met her the reason why she could sell this so easily is because she used to go on like sell these types of homes and then bundle it with sort of the tax
(41:23) Consulting side of things yeah and so did she start advising clients to buy US income properties back in like starting from like 08 I don’t know if it started back then but I believe it was like her 4ay was that and then like she had gotten in and then she realized and she devised a system and along with her real estate counterparts then started right going into that that world cuz that’s essentially the beginning of a share yeah yeah I just wasn’t called that yeah it just wasn’t called that so she was
(41:54) doing let’s call it the manual local vers local version of share and that’s what we actually want to we want to kind of open up the country and centralize it to a meaning of like giving access unbiased access to different regions um and doing it all online right CU correct me if I’m wrong the the back in ’08 it started with just Florida yes and then an eventual expansion to New York yeah yeah so like and expansion I’ll we’ll use Loosely because it was just because our her real estate counterpart had
(42:29) personal like business in New York and Florida so it was turn key because he owned the whole operation from top to bottom but would we say that you should only invest in Florida or you should only invest in New York no right but we did it because that’s typically how it worked you worked with your agent who has their own network and worked within their Network and now we’re saying share now that we have access to data and Technology we should open it up and then pick based on client preference right
(42:58) because when people ask me like how long sh been around like well they’ve been operating like this not under the the banner of share for a long time yeah and Carmen has lots of successful clients yeah who cash flow significantly in US Dollars including Canadian clients yeah and in my experience there’s not many people in Canada who cash flow significantly from their portfolio which is what led me down the path like I need to learn more mhm right like your own story of 19 properties is it 20 20 yeah I need to check your
(43:36) slide I was looking over your slides I think I counted 19 you might have locked one off somewhere but you haven’t even seen them so yeah you can’t you can’t name all the addresses can you oh no I can’t I can name cities that’s it yeah so you couldn’t even find them if you wanted to no my point is you have no idea what these properties are that you own no I don’t that’s pretty crazy yeah and how much do you cash flow a month you know over 10 $10 a month 10,000 I’m joking because I know Andrew
(44:12) doesn’t like to talk about his personal stuff you you cash over $10,000 American dollar a month yes but you know like again I’m to be aggressive and this is sort of shar’s philosophy is if it’s too much cash flow you should be refinancing get more against more so you know um so let’s say it was 10,000 before I you know got more active and now I want to go out and buy more so that’s going to quickly shrink and you investing for how long in the states um since 2011 but very fragmented until sort of the last few
(44:45) years right um so yeah Inception was like 2011 a little bit after like 2013 then huge gap MH um and then when I started to reinvest that’s when share came about I was like oh this is still so difficult so risky um and I need a faster way to do this and I need to think Beyond Florida and New York so yeah Florida has lots of uh hurricane risk and climate risk and insurance risk my lawyer literally said uh you’ll get your first insurance policy you may not get a second yeah in Florida yeah and his second home is in Tampa so he knows
(45:23) he knows very well and he owns lots of property in Florida yeah right this is my own lawyers advice so when people ask me why aren’t you investing in Florida like my lawyer will strangle me choke me I was just speaking to a client in Florida and um he was saying how now his insure I think it was he said it was citizen which is a state-backed um I don’t like it when government’s involved yeah it’s scary it’s a bad sign yeah so he’s saying that they’re cracking down on second homes investment
(45:53) homes on their rates so now that’s going to change so like they’re finding loopholes they or not loopholes but they’re finding ways to claw their portion of the insurance R which makes sense cuz you’re less likely to repair your second home versus if it’s your primary you’ll fix it even come out of pocket if you have to less likely if it’s an income property which we’re actually seeing because I’ve hear from my friends that are on the on the ground like there are literally houses that are
(46:17) condemned and being sold for lot value they have their insurance money they don’t want to fix it though they just want to sell it yeah good Andrew hin was telling me that the days on Market in Cape Coral 200 days ouch that’s nuts how’s that for an exit strategy yeah that’s tough your average is weigh 200 days to sell oh yikes complete buyer Market yeah never seen anything like that in my career yeah for Host this is for a host anyway yeah uh I forgot where I was going oh so so based on the calls you’re having
(46:56) with Canadians I think everyone’s goal should be to achieve $100,000 of cash flow a year so based on the people you’ve spoken to how would you suggest they build that portfolio look I think the first thing is they just got to get going um yeah break the ice yeah break the ice yeah and then get in sooner than later cuz I think I think what what Sher is actually kind of shooting ourselves in the foot is giving so much access to information so now they’re like picking and choosing but when I asked them did you do this
(47:28) kind of exercise on the Canadian side they’re like no no there’s too much information available like I’m analysis there’s just so much to learn such a big country like could we get like a B+ school waiting like it’s a B minus it’s a good neighborhood um you know or like an A minus school like yeah okay too much but like but I think first is just get in so just to share I can’t name any of the schools that are near my Al properties yeah not can not can because my point is like I know I
(48:03) know how how it works here in Canada to build houses there has to be a school nearby yeah so that’s good enough for me yeah so so yeah um like first thing is first is is action like whether it’s a b or c get in um because again once we’re in and you own a single asset whether it’s a b or c there’s opportunity to kind of let that grow at at the very least even if it was just the one property we’ll put that on a refinancing schedule of like maybe every few years and maybe that will like triple over the
(48:36) next five six years right um so just move uh get in break the ice yeah you know what we’ll do is help you soft land on the right home based on your risk appetite and your risk and return profile sorry before you even just help them help them identify the opportunity what about all like legal and accounting cuz that’s like the number one question I see I guess I’m sure you’re it’s coming a lot as well yeah like how do people like you’ll help people with the legal process like setting up an entity
(49:04) yes yeah yeah so we try to keep the conversations limited to the the US real estate investing we try to eliminate the broader scope of their personal portfolio in Canada and say look if you want to set up and purchase a home this is sort of the simplest way to go about it um and here are the pros and cons here’s we what we would do on an annual tax filing basis on the US side and then you would hand these documents off to your Canadian accountant and whatever and this is how it would work in theory um and if you’re okay with that we can
(49:35) go ahead and start setting up your entities for you right and just to remind folks your CFO is an accountant in both Canada and USA and has been doing this for decades for her past clients including yourself yeah so we’ve we’ve spent a significant amount of time and money Consulting different parties I think every there’s sort of a three-prong approach or three-prong lens you want to take is liability tax and then lender friendly is sort of the trifecta that we look at the type of com entity and structure you want to set up
(50:05) uh so we take that approach uh for Canadians and then if they’re ready to go we’ll go ahead and set up that entity Yeah by far Canada is the toughest like if it’s any other country it would just be an LLC but you know the Canadian government wants their peace yeah and and that’s actually something important to bring up uh because my understanding is I’m not an accountant folks neither’s angel is total your total tax is going to be the same amount yeah yeah exactly it’s just who you’re paying it to yeah yeah
(50:34) yeah you might have to like report here and there what’s happening but yeah I always say that it’s like investing in Canada MH and then how much to create to to to set up your legal whatever in the state that’s going to own the property that always comes up as well yeah so uh we use a third party but like again it’s it’s it’s client specific um so there’s let’s just say there’s two parts to the the fee one is to our third party that’s actually setting that up and then the
(51:02) other part is the state fee which is State specific so every state has their different cost to set it up but for the example of let’s just say we went with Wyoming which is um landlord or liability High liability protection um in privacy laws and then low cost M that would roughly be around 3 uh $80 roughly for a single LLC um or per entity that’s it yes that’s Jeep yeah but like you know the structures we recommend is an LLC with an L piece so that’s two so times that by two right got it and then just from what I hear
(51:46) from my wife is generally people should expect your accounting fees whatever your accounting fees in Canada be roughly the same of the states yeah I think so I think that’s fair and then what I’ve been saying to people is I think my wife agrees I think generally people should have a plan to at least own three properties justify the expenses yeah I would just say like yeah once you’re in there like it’s just so much faster to grow your portfolio in the US so I would say yeah you want your goal should be to get five plus like
(52:15) over the next 10 years Hang on we’re talking about can I because I think everyone’s goal should be to generate 106 figures in cash flow yes so you can’t do that with five properties no I mean yes no but there there’s there that’ be unprobable yeah because it is easier to scale because everything’s more affordable you you find proper like cash flow all day MH pre there’s lots of upside and the financing per my our friend Scott Dillingham said he said it’s 10 times easier to scale a
(52:46) portfolio in the states than here in Canada yeah 100% And he would though firstand since he’s a lender he’s a lender yeah like he did 400 mortgages in one year I believe in Canada which is nuts yeah so he’s very well vers in what the Canadian Market’s like because uh I know sh has been having discussions with investors to do a refinancing about 2 three years yeah yeah can you explain that yeah cuz you know the the rates are an all-time high um so and and that’s probably why you’re seeing a lot we’re
(53:14) seeing a lot more Canadians gravitate towards the higher like returning homes the Seas like the sixes and sevens is to kind of you know cover the interest rate uh so we want to obviously think about how do we improve your situation and how do we actually grow like situation in terms of the house how do you make a cash flow better and then how do we actually pull the equity out and buy another one so we are saying if we go and lock the house in today it’s cash flow neutral don’t worry in 3 years after we refinance we’ll pull out 50
(53:44) plus% of the original capital and go get another one and your cash flow will increase drastically um but your your goal now is to secure your piece of the pie before as you know the institutions are gearing up and they’re ready to come in and start buying a bunch so yeah that’s what we’re we’re saying get your piece we’ll help you secure it make sure it’s cash flow positive and then once the rates drop and then we’ll go out and refinance that thing mhm because I’ve had some people say
(54:11) like why not just wait till interest rates drop so drum pal fed has committed to three rate Cuts this year so My thinging is I want to get him for the rate cut yeah even Barbara corran’s been she it’s funny how the media Works they keep repeating the same thing she’s saying yeah that she thinks the market will pivot once we have our first cut yeah like like so in our world the single family rental sort of price range you know from let’s call it the ceiling of 350k and down we haven’t seen much price
(54:43) fluctuation it’s pretty resilient where you see the price fluctuation or the dip is like the major metros where they’re well over like $700,000 and majority of them are primary residents or like you know very expensive real estate New York La San Francisco that’s where they saw the major prices year-over-year we’re been pretty stable um and in fact like we’re already seeing increased competition tick back up with all the speculation of interest rate drops so what’s going to happen as soon as the
(55:11) interest rate dips the buying is going to start picking up and you mentioned earlier with Blackstone buying Trion you know there that is a good sign and I think even four weeks before that I think it was Blackstone or some two other funds had said that we’re we we raised another another billion dollars to start deploying to get ready to start deploying again in single family rental homes so the institutions are coming in and they’re ready they’ve got a war chest so secure your slice let them come
(55:39) in and ride ride the you know the tide because I want to get in again before these rate Cuts so I plan on writing offers in May yeah like I think the the speculation is that this is another 08 opportunity um where you know you can come in and then everything is kind of smooth sailing but that’s why I think the retail investment model is a lot more safe than the reat model because they have to cycle constantly right so they’re they have no choice they have to they exactly so whereas as a individual owner trying to build wealth like I’ve
(56:11) got patience this is pretty boring and slow like I can choose when to deploy because I’m casual neutral or positive because I got a 30-year fixed mortgage I know my bottom line so I’ll choose when to offload my house all right so um yeah I get in now now I don’t think it’s going to be I don’t think it’s as bad as the weight mortgage crisis again cuz our price is pretty solid but uh that’s the the the sort of sentiment is like I better get in now because as interest rates drop I know the prices are going
(56:39) to start going up right because I want to get in before these the doors open on all these manufacturing plants as well and the thousands of people have to pour into the into the area because they got jobs yes yeah like literally like looking at hyand and Savannah Georgia like they’re they’re promising average pay to be 58,000 which is double the state average right and 58,000 is about 78,000 Canadian Which is higher than the Canadian household average right right so Savannah’s nice can’t wait to go and
(57:11) me and then so when someone so people ask about refinancing questions because again like Maring and mortgages are so different yeah uh because my plan the plan my plan would be to refinance in about 2 3 years when rat’s bottom uh I’ve been modeling 4% and then just my own modeling I can go from like break even to like 300 a month cash flow just by refinancing yeah not even doing anything to the property uh what is the process like for refinancing yeah so what we’ll do is so the the simple part about refinancing when you
(57:44) have a tenant in place is they just take your actual rent and they’ll look at your hard expenses and then we’ll shop we’ll push that out to sort of thousands of lenders and see who comes back majority of the time is usually the same so we might Cho choose one or two that are we’re closer to um get a term sheet and then we should get like a verbal within 48 hours and then proceed with the process there that easy yeah well it still takes time to execute usually 30 days is uh what we want as a grace
(58:12) period um but yeah we’ll get like a a verbal within 48 hours and then term sheet in probably another seven days do you have any idea how hard it is to refinance here in Canada yeah when once it’s leased and there’s a hard t decent place it’s actually a lot easier um so they say there’s two there’s like one when it’s Unleased like when there when you just purchased it there’s nobody in there they’ll just take what’s called Market rent so they’ll do their own analysis on
(58:37) what they think the rent rate will be you provide your hard cost of property management tax Insurance um yeah and then they’ll make that a judgment but when there’s a tenant in place it’s so much easier cuz here it’s basically a new it’s a brand new mortgage is basically how they treat it oh okay so I have to re-qualify oh I see so they want like all my corporate docks oh yeah no it’s it’s it’s easier to refinance than definitely like coming off cuz you now have a track record as well yeah so to
(59:07) speak and there’s tenant in place understand I’m asking a lot for my lender to when they like I need to see all your stuff yeah and so they have to look at all my stuff oh really you many documents have to send them yeah like yeah we’ve had like one super difficult one but that was on a portfolio right this was on a oneoff like they may ask for an inspection they may just do a driveby like it really is lender specific they have their own criteria right and then is there penalties to break the mortgage so those are the
(59:39) things that are like let’s call default there are but everything is negotiable with these lenders so I would just so default I always say 30-year fixed rate with sort of a five-year prepayment step down so over the 5 years it goes from like 5% 4% 3 2 1 um and then as long as we know what the strategy is up front then we’ll say hey lender can you make an adjustment and make it no payments after do like a threeyear step down 321 right um they’ll be like okay fine but here’s what you have to do in instead
(1:00:12) either you pay something in front or you take an extra percentage well percentage points on on the interest rate and you’re guiding your clients through all of this yeah yeah exactly so that’s why we’ll model like 3% higher um potentially from coming in because we want to sort of pre-negotiate the exit and then I’m I have all this PTSD from high rates so my think I I thinking is once rates bottom hopefully 4% I’ll lock it in for for for 30 years done and then remove my interest rate risk for 30
(1:00:42) years yeah yeah and then in a couple years as the rent rat increase we’ll probably be able to pull out some more cash from that house do it again but yeah you’re set you know what your bottom line is and to to my earlier point if another recession or up Market comes that is just you being Absol like being in the most opportunistic opportunity like position to either sell refinance whatever you want to do and then when in my own modeling when I when I look at what the 10e cash flow is going to be what my cash flow will be in
(1:01:11) 10 years I’m like it ranges between like 6 to 10% yeah sorry sorry $6,000 to $10,000 US dollars a year yeah if I held for to for 10 years so then I always then I like I said I always post to everyone please poke holes in my theory mhm find me something that beats this there’s look there’s validation an Institutional spending billions of dollars in this space that have validated this thesis right so uh people that are smarter than me and have way more money to hire smarter people than me that have you know identified this as
(1:01:47) a opportunity right and people need to understand like institutional investors are selling to institutions yeah it’s all cyclical it’s all it’s all incestral to a certain deg well but like it’s these going to be like teachers pension fund for example yeah right so their diligence process is incredible yeah like the highest level you can possibly ever see yeah right or like CPP who has a wonderful track record of making above Target returns yeah like their diligence process is like the great the highest you’ll
(1:02:17) ever see and they own a billion dollars of us real estate too yeah and I think it’s a little ironic too cuz you get it’s the same individuals I think that are picketing the funds lobbies yeah go pick at C CPP and it’s your Pion fund that’s investing in these real estate uh trusts but I think it’s also interesting why does CPP invest in the states in single family homes but not here in Canada it’s a res it’s a very secure investment they know their model the model is safe it’s backed by Brick and
(1:02:47) Mortar so we’re hosting another Workshop April 13th which is why I had you so I can talk about it um CU yeah I remember the first time we did it and remember the faces remember the relief in the room when people like exist like existing landlords could see what what available to them yeah in a relatively passive investment yeah while they still maintain direct ownership mhm right like this is the anyone who clients of share they still own the house it’s there’s 100% on title our name is not associated
(1:03:22) to anything on title No profit share No profit share we don’t take an equity split it’s theirs right and you take fees just fees management fees yep and I’ll share a slide on on at April 13th where I went through trion’s annual report and I told you like they’re they have very significant performance fees yeah they take a lot of The Upside right which is like you no wonderful you’re making everyone money I want everyone to make money so you you you contractually said you’d take it you took it that’s
(1:03:53) your right mhm but I’m cheap so I’m not investing in a Reit cuz the analogy I tell investors like for people who understand what a Reit is like I’m investing essentially like a Reit but I maintain 100% ownership 100% Equity no profit share yep so again I still ask people buy me something better and no one’s really come back with anything yeah like you can make I tell people all the time you can make more money on your own doing direct investment but that means you’re you’re you’re active you’re risking way more
(1:04:26) more yeah I’d say for the sort of risk reward profile this I’ve always said it single family is the safest um and but yeah to your point it’s it’s low risk which is a boring investment um and there are higher returning assets and that you can invest in but they’re probably more involved and higher risk yeah like for example like my my friends who do like airbnbs people always ask like airb do you guys do airbnbs and duplexes trixes yeah we don’t do short-term rental um it’s a higher risk higher
(1:04:58) effort higher operating cost um and then duplex Triplex uh you know we’ll we we’ll present them if they come across but it’s not within our core sort of logic and algorithm because it may not be in the same sort of regions that we’re looking for where there is like a family of four and a dog or maybe something like that this my own research I like for take short-term re for example I can’t find institutional grade proper managers no yeah you you those are typically local mom and pop shops that specialize
(1:05:32) in single family I in short-term rentals because my point is for all investors I always tell them line up three property managers wherever you’re investing because you know because you will turn over your property managers so you better have plan B’s and C’s and and even going forward you need to keep planning for you know if you lose one you still go find another one you still should always have a roster of three property managers that are high high quality that you would hire any day that’s not easy to do yeah in non if
(1:06:03) it’s not single family or apartment buildings right because that seems to be where the big players will play yeah and anything in between there’s no big player yeah there isn’t yeah there isn’t a big player I mean there’s some operations locally that are big players but not like Multistate yeah cuz I want boring yeah I want like I I want I want single point of contact yeah right so shares my single point of contact from our properties and I don’t want ever talk to the other property managers yeah nor should you all right
(1:06:39) so what are we talking about April 13th at the US investing Workshop how to get in and how to scale how to get to retirement that safety net that everyone wants to desire or wants and desires and just I think lacks the guidance and you know we’re going to provide that so yeah April 13th yeah Andrew want want to thank you for coming into our world when you did thank you because again you I know your calls with the 150 Canadians they’re not lengthy but if you did you’d have you’d hear more of the War Stories yeah you
(1:07:17) know what I mean uh in again that’s why I feel we are doing community service for Canadians especially ontarians and and and BC and Quebec where the where the land laws are not almost yeah and I and I always joke about that saying that you know speaking to Canadians and helping Canadians it’s philanthropy work it’s charity work I literally had an investor Miss Miss mate he called instead of HE holding at the landlord tenant board he accidentally called it the tenant protection board hilarious and that’s the issue
(1:07:47) actually leads to a good question does anything like that exists in the markets that you guys operate no it just kind of runs through the regular system um um you know there’s there it’s like a science in terms of how it works per region of like what it takes to sort of set off a trigger and kick off the eviction process but no no there isn’t that I’m aware of any sort of landlord tenant board which I’m still that’s crazy but yeah it’s yeah it’s your investment it’s your money why
(1:08:18) isn’t it why don’t you have control over that’s kind of a weird thing right your tax your tax dollars pay for legal aid for the free legal aid for the tenants too landlords get none we have no legal a protection interesting it’s like how do you build I mean real estate is the path to wealth it’s like you know it everyone knows that it’s a safe bet but like now you kind of just remove that whole asset class and this whole thought of hey I’m going to build this generational wealth through real estate when you can’t
(1:08:46) control it MH so yeah and I shown you some condo deals haven’t I just for just just for education purposes yeah you’ve seen I’ve seen those perform us yeah I don’t see how anyone will ever buy a preconstruction condo again for investment purposes when they see what we got yeah yeah so I think we’re going to disrupt this Market yep definitely looking forward to it all right yeah start next step is uh April April 13th Saturday April 13th we’re offering at hybrid you’ll be there k your CFO will be there
(1:09:20) Demitri will be there you see Chief investment officer Scott dillingham’s going to be there you know he did 400 mortgages in the year one you know everyone’s going to be there in person so I recommend in person I think we’re almost sold out oh wow yeah we have some room online though okay so we’re s casting over Zoom so we’ll have room online as well okay awesome all right thanks for doing this Andrew thanks for having me thank you for watching if you want to learn how to invest in real estate from
(1:09:43) scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.com the description as well I publish at least two to three videos a week here so subscribe if you want to keep learning from seasoned investors like myself and my guest and if you’re just starting out feel free to ask questions and comment below and I do the best to answer each of those comments and questions myself again if you’re
(1:10:10) ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor training.com

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UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to www.iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to www.iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s www.iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

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Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Multifamily Conference is Coming May 24-26th With Seth Ferguson

Guess what topic keeps coming up in my DM’s. You, our 17 listeners would like a litigator, a lawyer who specialises in suing people to guest on my podcast.  You asked and you shall receive, I’m working on a few folks right now and that’s just the state of affairs in the investing community though I should note, the problems are generally isolated in certain groups unlike REIN and Rock Star hence we just had CEO of REIN Patrick Francey and Co-Founder of Rock Star Tom Karadza on the show.

Respectfully, I keep hearing news about investors within the community declaring bankruptcy or bankruptcy protection where the investment strategy was on the challenging side: major renovations, small towns with small economies. Some even lacked the basics of real estate investing: a growing population, like Timmins, Ontario where the population shrank according to Stats Canada between 2016 and 2021.

Sadly, I heard the news that one of the past guests of this show had declared bankruptcy. I don’t know any details other than she was sanctioned by her local securities commission and I haven’t heard of any wrong doing so I’ll leave names out and the episode up till I have new information.

I do want to warn and remind our 17 listeners, this is a recession and historically high interest rate environment, there will be bankruptcies among those who speculated, risked excessively or over leveraged. There was a ton of lessons from the 2008 financial crisis where those who went bankrupt could not make payments on their debt hence it would make sense to NOT over leverage. 

I do have an ask for you, my 17 listeners. If you do want to help out people you care about, please share this show and my email newsletter with them. We do vet guests on this show and I’ve repeated many times on this show, I do not lend my money privately. I’ve never found retail opportunities to lend to be worth the risk and worst case scenario.  VISA and Mastercard collect 26-29% interest on unsecured loans. Why would I accept 15-17% on a promissory note?

The investment in oneself and one’s own properties maintaining direct ownership and control remain undefeated as the best investment in my experience.  Cherry and I are headed to Savannah, GA for the next stage of building our portfolio.  If you have any vacation, real estate tips, I’m all ears!

Multifamily Conference is Coming May 24-26th With Seth Ferguson

On to this week’s show!

We have returning to the show my friend Seth Ferguson and I want to thank him for hosting the biggest real estate event of the year May 24-26th.  The Friday is a 101 for beginners then the main course is the Saturday and Sunday and I’m excited to see all my friends from the community, hopefully our 17 listeners and Wolf of Wall Street Jordan Belfort.

I don’t know his full story outside of the Leonardo Dicaprio movie, he did go to jail for doing awful things with peoples’ money but I know he’s got great stories to share how he did it all wrong and if he had only played the long game and stayed legit, he would have made 10X the money.  

Robert Herjavec of Dragon’s Den and Shark Tank is the other keynote speaker along with a secret guest Seth will reveal on the show!

Seth is pretty awesome too, I can’t wait to be there to support my friend and I look forward to seeing everyone!

On today’s show Seth shares the journey to the third Multi-family conference, how and why he chose these speakers, how this year will be drastically different than years past.  We’ll discuss why Seth from Milton, Ontario owns no income properties in Canada and focusses his own efforts and capital in southern USA along with some of the numbers. 

https://multifamilyconference.ca/

Metro Toronto Convention Center

May 24-26th.

Please enjoy the show!

 

📅Join Our Upcoming Workshop: How to Invest in the U.S. Real Estate Market as a Canadian Investor! For those who’d like a deeper understanding of how to invest in the USA, we are happy to announce our next US investing workshop on Saturday, April 13th.

🔗Sign up: https://USAworkshop.eventbrite.ca/?aff=YT 

To Listen:

** Transcript Auto-Generated**


(00:00) welcome to the truth B real estate investing show my name is Erwin Szeto I am the host since 2016 we have well over 300 episodes of this show and guess what what topic keeps coming up in my DMs you are 17 listeners who’ve been dming me would like to hear from a litigator a lawyer that specializes in suing people to guest on my podcast you ask and you shall receive I had uh three in have introduced to three lawyers who are interested in coming on the show and interested in taking on clients to uh to sue borrow
(00:31) to repes well probably willing to represent both sides anyways so I’m working on a few and that’s just the State of Affairs right now in the in the community though I should note the problems are generally isolated in certain groups unlike rain and Rockstar hence we just had CEO of of REIN Patrick Francy on the show and co-founder of Rockstar Tom carazza on the show Tom was just on Nick was on about roughly about a year ago as our to celebrate our 300th episode respectfully I keep hearing news about Investors within the community
(01:03) declaring bankruptcy or bankruptcy protection where investment strategy where the investment strategy was on the challenging side including major Renovations like basement sweding or Garden sweding or trapx conversions or whatever in small towns with small economies some of these towns even lack the basics of real estate investing like a growing population like Tim Ontario where the pop population actually shrank according to stats Canada pop like real estate investing works best in growing areas so where areas have growing incomes because
(01:40) growing incomes typically attract more people to move into the area which pushes rents and prices up again to pick on Tim Ontario I’m sure it’s lovely over there home of sh Twain the population actually shrank uh I’ve included uh the um in in the show notes I’ve included a screen capture from stats Canada between 2016 2021 they actually shrank by a couple hundred people point is most of Ontario did not shrink most of BC did not shrink why would anyone consider investing in a place where people where the population
(02:14) is shrinking sadly I heard news that uh this earlier this week or last week that one of the past guests of the show had declared bankruptcy I don’t know any of the details other than she was sanctioned also by her local Securities Commission uh but I haven’t heard about anyong doing so I’ll leave names out and the episode will will at Le stay up until I have more information I do want to warn and remind our 17 listeners that this is a recession that we’re going through uh I don’t know if You’ want it
(02:42) seems like a recession real GDP has been declining for like six quarters the economic picture for Canada is not that great right now uh and partly due to historically High interest rates that we’re in right now so there were so should be no surprise that we’re seeing bankrupcy es among those who speculated or they risked excessively or they overleveraged there was tons of lessons from the 2008 financial crisis where those who went bankrupt could not make payments on their debt hence it would make sense to not over
(03:15) leverage which is kind of wild because private mortgagees seems to be all to rage in in certain circles versus back in my day oh listen to me I just turned 45 and I’m talking about back in my day um prior to I don’t know about 2018 most Jun Venture deals most OPM other people’s money deals were for Equity not for debt so at least with Equity yes you you give up half of the ownership but you don’t have interest payments that could potentially bankrupt you so anyways I do have an ask for you my
(03:52) 17 listeners if you do want to help people uh that you care about then please share the show with them in my newsletter we do vet guests on this show and I’ve repeated it many times on this show I do not lend money privately I’ve never found retail opportunities to lend to be worth the risk in the worst case scenario Visa Mastercard collect 26 to 29% interest on unsecured loans why would I accept 15 to 70% on a promisory note the investment in oneself in one’s own properties maintaining direct ownership and control still remain
(04:25) undefeated as the best investment in my experience and I have I have over 45 clients to prove that mult millionaire multi-millionaire clients to prove that boring investing works perfectly quite well Terry and I are headed to Savannah Georgia for our next stage of portfolio building if you have any vacation or real estate tips I am all ears onto this week’s show we have returning to the show my friend Seth Ferguson and I want to thank him for hosting the biggest real estate investment uh real estate invent of the Year May 24th to 26th the
(04:56) Friday is more of a 101 for beginners then the main course is the Saturday and Sunday and I’m excited to see all my friends there from the community there hopefully our 17 listeners and and will be there i’ love to see you uh please stop by say hi if you see me I’ll stand up like a sore of thumb I promise you that and also I’m excited to see Wolf of Wall Street Jordan bord speak I don’t know his full story outside of the Leonardo DiCaprio movie I know he did go to jail for doing awful awful things
(05:23) with people’s monies uh but I do know he’s got some great great lessons to share from his loss uh and how if he could do it all over again if he just played the long game and been more honest he would have been like like 10 times more successful hopefully he shares that story because I love to see it in person Robert hyck of dragon dead and Shark Tank is the other keynote speaker along with SE the secret guest Seth will reveal on this show uh Seth’s pretty awesome too uh I enjoy interviews done by Seth and I enjoy seeing Seth
(05:55) speak uh I don’t know if he mentions it on the on the show but he actually the feedback on Seth’s talks is usually among the highest among his guests uh so on today’s show Seth shares the journey to the third multif Family Conference how and why he chose these speakers how this year will be drastically different than the year’s past much uh new and improved if you will we’ll discuss why Seth from Milton Ontario owns no income properties in Canada and focuses his efforts exclusively on uh the southern
(06:23) USA along with some of the numbers so you may want to have a pen and pencil ready to take notes and uh yeah please enjoy the show also multifamily conference.com Toronto Convention Center is the location May 20 Friday May 24th to 26 yeah please enjoy the [Music] show hi Seth sorry what’s keeping you busy these days oh a whole lot a whole lot nothing uh well a whole lot of nothing really we got like conference coming we got real estate we got all sorts of stuff yeah yeah nothing e nothing like everything has a seven fig budget I don’t know what
(07:14) everyone calls that nothing oh man yeah it is uh yeah it’s just uh yeah just trying to fill out uh figure out how to fill up my time and uh you know take myself away from uh the family as much as possible no I’m just joking just crazy just crazy which is hilarious cuz you coached your child’s hockey team not busy enough yeah I I added on the coaching so we’re on the ice a whole bunch and uh yeah what else am I oh I’m writing a book like all this kind of stuff so you’re writing a book too oh yeah well the huge history
(07:45) nerd kind of stuff right so history of what oh uh yeah buildings what no no no no no so it’s uh I’m I’m writing uh I’m doing a book on the eth regimen of foot during war of 1812 so I’m basically covering uh the regiment from 1810 to 1816 uh so it’s a very it’s a very geeky non-fiction like historical type of study okay hang on refresh my memory it’s been a long time since grade 10 high school history what was the War of 1812 yeah so the War of 1812 uh you know it was fought between Great Britain and
(08:18) the US so it really stem like brost and tea party stuff well yeah well that was like more of the American Revolution so fast forward uh to you know 1810 1811 there was a lot of tension and terms of the uh you know just trade with uh France who Great Britain was at War uh with at the time and uh the impressment of American Sailors boarding us ships there was a whole lot of stuff uh so uh the US declared war in Great Britain and then there was a you know three year and a bit War fought over that only three years they lucky yeah well a lot of
(08:51) stuff happened with it but you look in Southwestern Ontario so you’ve got you know Fort Erie Fort Georgia niagar on the lake you’ve got Fort Niagra you know Lundy’s Lane everybody know shopping well that shopping center is part of it built over um a battlefield uh so that that was one of the bloodiest battles of the war that was fought there oh okay yeah so cuz you’re not busy enough exactly not busy enough wait how wait just to give folks some context like how how many people attended the multif
(09:20) Family Conference of uh last year yeah so last year we had 2500 people 2500 well 2500 and change yeah that’s a lot yeah it was a lot of people yeah and we’re going even bigger than here so it’s going to be insane wait you have a bigger room how you going to make this bigger you already had a humongous room we did but we added some more square feet so you you’ll appreciate this with knocked down a wall yeah so you’ll appreciate this with with your uh your conference so we have about 180,000 Square ft just on the main floor
(09:50) and then we have all the rooms underneath so we’re so you like double that essentially in terms of uh space so yeah we’re really big wait wait wait are you doing two states no no still the main stage uh but in terms of the room in terms of uh and how we configured it like we can we can definitely add another thousand people right right right yeah yeah what what’s okay so actually let’s revisit so uh like last year was the first year you did a whole Friday segment just for like 101 investment training yeah yeah for
(10:21) for sure yeah so uh for context in our first year we ran uh the Saturday Sunday uh so two days mainten stage it was great mhm and during just out of the lockdown yeah man that must been so stressful oh so stressful for so for for history lesson just a few years ago you were the first big conference out of out of Co we were yeah and the interesting thing so in terms of venue shopping everybody was kept asking me hey why did you run it in a hockey arena and just convert it well the truth is those guys were the only people who snuck Us in
(10:54) during the lockdowns all the other venues wouldn’t let us in the building but um the ca Center let snuck Us in and we did our site tours and all the planning even though everything was locked down and that’s the only reason we were able to get in there and and actually run the run the event um but what I found the first year was We attracted a you know a decent number of people who were who were new to apartment buildings so maybe they were doing fix and flaps or some other type of real estate and they didn’t
(11:21) understand apartment buildings so when you know first year we had Joe Fess i’ say now he’s at like 3 billion in AUM um when he was on stage yeah so his portfolio he manages a portfolio of 3 billion oh yeah insane right so but when he’s on stage and talking those newer people weren’t able to absorb as much as he was giving out because they they didn’t have that foundation so last year we added a Friday workshop for beginners so this is where you know we we’re going to hey just give you all the basic
(11:48) foundational stuff so that way when you know Grant Cardone last year or Alex Rodriguez was on stage talking about their portfolios you’d be able to follow along a lot better um and that was crazy we thought we’d have like 300 people we maxed out room capacity at 500 and something we couldn’t fit more people in uh so this year we’re splitting it so we have our beginner Workshop just the same uh and then we have an advanced investor Workshop where it’s more focused on scaling uh Team growth uh brand building
(12:16) at scale like lead gen at scale that that type of stuff so you know if you’re an experienced operator we have a full day workshop just for you on the Friday and then if you’re kind of new to apartment buildings full day workshop that’s going to bring you up to speed you can be like 10 steps ahead of everybody else uh By the time Saturday and Sunday rolls around I love how like how how the conference has evolved oh yeah to yeah because you yeah you you always need information you need data you do send up surveys and you need
(12:43) information on how to improve yeah and then to see you delivering on the improvements that’s so cool oh yeah well like that’s the thing with with uh with any any type of product right you you talk with people face to face you know your good friends will tell you the the truth like right off the bat but a lot of people they they won’t give you the the real things that you need to know about so that’s why we always survey and then you know we read through and I read through every single one like the team does too
(13:09) but like I I read make sure I read through each one and we actually take it to heart like it’s like oh okay well we have a decent group of people saying this well how can we change it to make it better and because I want to as we scale this conference like we’re scaling this to be the real estate event anybody goes to and uh to do that we have to be the best so we’re always looking to improve CU I thought the first conference was incredible yeah it it was it was good um but like it’s first time with anything
(13:39) right like like there’s always things that that you want to improve on and and as you scale so like a thousand people versus you know 3,000 people there there has to be changes behind the scenes in terms of the framework to to allow you to scale to that size so and that’s that’s what kind of what we’re focused on right now is hey how do we deliver the the the top uh the best in class experience but also be able to impact thousands and thousands of people at one time uh because you know when you start
(14:07) adding a lot of people uh there’s the logistical stuff you want to make sure everybody feels included that that type of stuff yeah more things can break and oh man yeah well last year um our registration system um crashed on the day of so you know like we pay so we pay a lot of money for our registration stuff like it’s not just like we’re not using event braer like we pay a lot of money for this stuff and you know I didn’t even notice oh yeah well speaking of things go wrong behind the scenes so our team was incredible
(14:41) but we had the one thing I wasn’t happy with was people came and we had like the lineup was was pretty big like we had a lot of people but the reason is our whole registration system was down and um the conversations after the fact were not good in terms of us for in in that system because hey like we paid you guys a lot of money to perform and your system did not perform at all and and so that just tweaks and and making sure now this year because it happened last year it’s like okay well we’re running with a
(15:10) different company but hey what happens if this crashes what’s our plan B and last year we didn’t have the plan B so now it’s just like adding in different systems and and operations to make sure everything’s Flawless you know again as an observer like I didn’t know it was down and I know the lineup was long but they got processed pretty quickly yeah yeah but but like this is like I’m a perfectionist right so which is hard when you’re when you’re dealing size of quantities yeah like it
(15:37) was great and like our event is an amazing event but I like that that’s my personality I always want to make it better the next year so it’s like okay like generally it was good but where can we nitpick things to really bring you up to the next level and and that’s what uh that’s what we are ruthlessly doing um so yeah like like this year we we’ll we’ll have some changes in terms of how things run but it’s just to make things better right right yeah for sure and talking about trying to make better you
(16:04) had Mr 10x last time we did yeah you had M you had the Alex Rodriguez who I think uh I’m sure many people underestimated him myself included because I didn’t know his story and his and everything yeah yeah well actually let’s touch on that for a second because I got so much um so many messages on Facebook Instagram or emails about hey why are you bringing Alex like he’s just a baseball guy it’s like oh I got better certain people were like oh didn’t he date he used to date JLo right that’s how they knew him so they didn’t
(16:39) know he was a baseball player well well even Darcy was like who cares about A-Rod I just wanted to see JLo and uh but but who’s married to Ben Affleck now I think I think I don’t follow these things but yeah I think yeah I’m not I’m not sure but but yeah so but I was so excited to have him on stage because I knew what he was doing like with A-Rod Corp like he’s a sharp guy he knows what he’s doing he has a great team he has a great portfolio and so on stage I thought like my personal I thought he
(17:08) knocked it out of the park to use a baseball ter right like he was great and a lot of people came up to me after or shot me messages being like hey like I had no idea yeah no idea um and and that was you know I I was really excited for that cuz I could just kind of tell everybody kind of knows A-Rod but they didn’t really understand who he was as a business person he was playing in the miners and he got his first duplex so like he’s been in the investing game for a long time and I I think he surprised a
(17:37) lot of people which is great I love that everybody knows Grant Cardone but in terms of A-Rod like he was he was great yeah yeah actually had some Insider information I just my coach shared with me how how she knew many people and who who knew a rod already knew he was legit yeah so I was actually got the benefit of going in knowing he was incredibly legit yeah yeah and now again talking about passing trying to beat last year which is tough when you have Grant yeah you have three speakers coming up for this year yeah we got three big guns
(18:08) coming out yeah um and so we’ve announced well we’ve announced two should use the word guns because they are Americans three we have three headline speakers yeah yeah yeah so Grant and Alex were exceptional um and uh one of the things we wanted to make sure that we’re doing is keeping it fresh right like a lot of people said hey bring Grant back you know maybe we we’ll look at it next year but uh we want to keep it fresh and deliver different perspectives um and I think the lineup we have this year is going to
(18:36) be a lot of fun um so we’ve got uh Robert herc you know longtime uh you know Canadian uh immigrant uh longtime um you know star on drag stad Shark Tank he’s now executive producer of Shark Tank um and he’s seen a lot of pitches so uh you know one of the things with with our audience is a lot of people want to learn how they can improve their Capital raising skills so Kevin ol was our first Speaker the first year he was awesome he was great he was great um did the audience like him oh yeah we really
(19:09) enjoyed him yeah yeah Kevin scored really really well and this is the thing with like marketing like we get hate mail all the time uh dep no matter who we like bring in as a speaker we got hate about Kevin oier we got hate about Grant Cardone we got hate about uh A-Rod and this year we’re getting hate to so it doesn’t really matter right but but we want to keep it fresh so Robert can bring that perspective um in terms of the capital raising the scaling the team um that kind of thing um and then we’ve
(19:36) got the Wolf of Wall Street himself Jordan bfor uh coming in and in terms of like running you know like we run sales teams and stuff in terms of tone and how you can present opportunities and stuff I don’t think there’s a better guy uh so I I’m really looking forward to uh Jordan and he and we’ve got him set up so he’s going to be running a workshop just for our VIP so he’s on the main stage but he’s run a workshop just for our VIP VIP attendees in terms of how they can structure their Capital raising
(20:05) pitches and their presentations and and how they can uh just interact and Converse with possible investors uh better I think that’s going to be worth the price of admission in itself so so really excited because uh for anyone who’s followed Jordan Belford’s career they know like if he just stayed clean yes not in his maybe both both in his substance abuse in his business yeah for sure like he he had um what Steve Madden shoes lined up oh yeah yeah like he could have ipoed that yeah 100% And he I
(20:38) don’t know I don’t know how many hundreds of millions he’d be worth oh huge and and you just look at the the sales team he built he was able to take people who were just regular lay people like lay men and bring them in teach them how to sell and they were incredibly successful you know yeah things went off the rails 100% right um and yeah like he did his time but in like if you look past it and look at hey like what’s he actually saying like what what value can he bring like we’ve learned so much in terms of how we run
(21:10) our sales team from from um from what what he’s done so I I’m really excited to have him come in for sure and plus he’s got a couple good stories too so are you going to ask the cliche is he going to do the cliche uh s me this pen no no no is that a l is he sick of it well like yeah like like we we’re going to take it from to a totally different like place with it and yeah what well well say Inn so if somebody asks you sell me this pen what’s the right answerin sell me this pen what what’s
(21:41) the right answer there give me you have a pen I don’t have a pen supply and demand yeah exactly which I stole from the movie well well the the best answer is well how long have you been in the market for a pen yeah yeah right so like you go into Discovery so I Ed up with a question do you have a pen 100% I got this 100% like so many people are like oh yeah this Pen’s amazing blah blah you don’t even know cell yeah you don’t even know if the person wants the pen or not yeah yeah that’s super cool
(22:15) um I think I think the lesson out of Jordan B for was is at least to me is that if you just if you just keep it clean and play the long game yep you’ll be you’ll be like he like I’m I’m a guy I I own Steve Madden shoes I like the product and he could have taken that he could have been the company that took it public 100% Y and if he kept some stock like I don’t even know how many hundreds of millions he’d be worth 100% And and like you just look at you know in in terms of the even just
(22:44) the sales training side like he has so much to offer in terms of how you structure or pitch how tone and how you can influence people and all that kind of stuff like sale like you’re selling every day like what if you go on a date you’re selling if you talk with your kids you’re selling if you talk with your spouse you’re selling you talk with a prospect you’re selling uh so that goes such a long way he sold people on his script in his book oh yeah 100% 100% so like like there’s I’m I’m really
(23:12) excited uh not only have Robert coming but also Jordan I think they’re going to be fantastic and then the third speaker at this time we have’t announced but by the time this comes out so we’ve got uh Grant’s wife Elena Cardone coming and uh you know she she is bringing so much to the conference this year because you know most people don’t know this grant touched on it a little bit last year in the VIP room um but Elena was the person who pushed them to go big with everything and start raising money uh so
(23:40) we’re getting the the brains behind the operation so to speak and um she brings so much in terms of how couples can work together to build an Empire um and what and her roles in in the company and what she’s doing so really excited to have a really strong woman on stage and uh and yeah so she she is the third yeah I saw her speak at 10x conference back in Miami and she’s excellent and I think she has an important story to share yeah um like not every entrepreneur partner in the couple needs to be the person
(24:10) that’s out in front the face yeah right they’re like every you you agreed to we talk about loss but for example the gentleman who have the that that portfolio of Northern Ontario that’s failing is didn’t have anyone watching the business business closely to make sure everything was like running properly yeah yeah that and that’s so important and and quite honestly like the person behind the scenes is I I you could argue more important than the face right like you know even with our organization I’m the
(24:39) face but you know we you need to have really solid people in the background making sure that that person’s supported and they have everything they need right yeah like Batman has the Oracle like you know every everyone needs that person in the chair who spends most of their time in the chair to make sure everything’s okay yeah 100% so I think it’s going to be a really unique person perspective um that Elena is bring and you you can notice like each one of our Keynotes this year is has something different
(25:05) like a different spin or a different angle um because you know we want to make sure people are getting uh not just like the same message all the all the way through like everybody has something unique they can offer and depending on where you’re at in terms of scaling your portfolio or where you’re at um you can get something else uh from everybody so want to touch on your own your own investment Journey yeah this is I forget how many times you’ve been on the show now so anyone was U I don’t want to
(25:31) spend too much time on stuff you’ve already spoken about for example I believe the first episode we did together was I think like 2019 it was a while ago it was a while ago and the title was worst joint venture ever so folks wanted to see listen to that um yeah just just could you just give us like the 30 second version of yeah yeah so uh went through a a messy uh separation and basically lost uh everything and uh was the shittiest time of my life and uh started from complete scratch so you know we were kind of
(26:04) talking off air about um you know challenges when people have and how it actually like helps them perform better 100% so I kind of went through the ringer and uh a lot of really bad stuff happened but I survived out the other side and uh I would not be doing what I’m doing today if that hadn’t have happened had hadn’t have happened so in one way it was It was kind of good uh because it uh gave me a different perspective perspective on um on life and how things work and um quite I I tell everybody now they’re like oh that
(26:35) like aren’t you scared like running the conference and doing all this big stuff I’m like I really don’t give a anymore because if I survive that I can survive basically anything at this point right yeah and so to get some more context in history you had a portfolio of properties inario yeah yeah so so we did like lots of like we were doing like residential stuff um and then that kind of all blow up so listen to that podcast for all the the nitt nitty-gritty details um but yeah it was just a bad situation and uh that was uh liquidated
(27:08) and then uh basically started from square one so when you start from square one yeah I noticed you didn’t do anything else in Canada in terms of investing yeah yeah can you can you elaborate on the decision why not to do Ontario and I have all these Alberta Bulls tell me they why you to do Alberta yeah for sure so when when when that happened I already knew I wanted to do multif family and apartment buildings that that’s really where I was where they have those in Canada you know sth I don’t know if
(27:40) anyone told you they do but I I think and this is kind of what I found and you know when we’re raising cap like interest little bit of um a tangent here but when we’re raising money for a deal we found that an American investor will make a decision quicker and invest more money a Canadian so like we yeah we’ve got and even like even with the conference like we track all this stuff a Canadian will take usually two weeks longer from becoming a lead before they purchase than an American so like very
(28:14) different um outlooks and um you know personalities like obviously it’s a generality but um but that that’s that’s on on the whole it’s not the first I heard generally Americans are more entrepreneurial they more risks 100% including their government will take more risks as well 100% so you know when I started looking for people to help me and teach me the apartment building investing side um I went I went to the states um a couple reasons number one I I didn’t really know or I I didn’t know
(28:44) of any larger person um in Canada doing it at at a large scale obviously there are people doing it but I didn’t know at the time um and a lot of them are buying in the states anyway yeah exactly exactly and I remember I won’t mention but I I bought this like apartment building investing course uh from a very well-known organization and I got a binder in the mail so it was this huge thick binder and it it was like I think 1,500 bucks or something like that and I was like are you kidding me I just paid
(29:14) ,500 bucks for this binder I was like there’s got to be a better way so um I I found a couple uh people who were doing it at scale in the US and uh I never really looked back so all of the the kind of the training stuff the the side kind of scoop I I’ve got was always us focused and to me it makes a lot of sense you look at Canada versus the us we are a drop in the bucket just population size GDP like there is no comparison a and um you know so so if you’re looking to uh you know build a sizable portfolio and you know raise a
(29:51) lot of capital yeah you can do it in Canada but like we just want to go to the bigger market and it made a lot of sense and and just add to that making more sense like you mentioned GDP so then I’ll just go further like GDP per capita oh for sure meaning per person 100% And then you add to that each American generally costs less than a Canadian as well yes for example uh you probably like what is the minimum wage for Florida so for example minimum wage in Texas is 725 an hour very different from Ontario which is about $10 versus
(30:21) what is in Ontario 16 oh maybe even 16 and change I’m so yeah end of the day well yeah so a minimum wage a Canadian is in Ontario is 60% more costs more oh 100% like our labor is more expensive our we can argue that our government policy makes the cost of living more expensive like we can that’s a totally different episode but yeah 100% and other add to that like I think most people are familiar with um where immigration comes from in in the States and it’s generally it’s generally lower end yeah and while people I’m not going
(30:53) to get political yeah let’s just straight talk straight economics an economy Ben benefits from lower end like so for example to Canada our our our our skill level is quite ubiquitous it’s quite even we don’t have that lower end y but we need we need it though we need it right I don’t need someone with a University degree to make my burger yeah right I you know someone who has that who’s worth 725 an hour should have that job yep right and equivalent would be $10 an hour in here someone should have
(31:25) that job and then the economy all moves better yeah 100% % and the Americans are full have plenty of that oh 100% And and then you just like this is the thing that really like when you when you uh when you’re looking for a visual pull up a list of all the Canadian major metros with over a million people yeah it’s a short list yeah you especially if it’s two yeah 100% there only three there’s only three cities which is insane then you look at uh pull up the US list major metros over a million people insane and
(31:56) and and that just shows you how small we really are um so and you look at and it’s not just like in real estate in business like as soon as you can and if a Canadian company can enter the US market the potential is so much greater let’s just give a quick example we were talking before we’re recording yeah so I want a question to The Listener to our 17 listeners which city do you think is bigger in terms of like Greater Vancouver Greater Vancouver I’m going to talk to the camera okay all right which
(32:23) city is bigger Greater Vancouver or greater Tampa Bay Florida put it in the chat before we give the answer put it in put it in so for the listener I want you to like think about it like so which one do you think is bigger but the fact that I’m asking I’m pretty sure I’m going to guess which one’s bigger yeah so what remind me what was Tampa what was Tampa again Tampa is what 2.
(32:43) 3 million I think oh no 3.2 I think you said 3.2 before recording before recording and then I CU I think I messed you up cuz uh cuz Vancouver is about 2.7 that that’s right yeah and then uh I I me uh and then DFW was 7.6 Lord is that big yeah 7.6 for the for the MSA yeah so that that’s Dallas Fort Worth and Arlington that’s see that’s big than great Toronto area oh huge right so like that’s that’s just like that’s just one city yeah our economic capital yeah of Canada is smaller than Dallas Fort Worth Texas
(33:16) yeah and and you look at um and then you want compare GDP it’s not but you look at just the State of Florida right so it’s it’s insane so you know with us and obviously you know we have big aspirations right and and so um for for all of those reasons it makes more sense for us to help Canadians move their Capital to the States because there’s a a large interest in that and then if your priority is to maximize your return reduce your risk it makes a lot of sense oh for sure like like we’re
(33:47) talking about real estate yeah why not invest in the largest capitalistic Juggernaut there is in the world the USA right yeah and then like you I’ve talked about this many times like Texas is they have like I forget like they’re bringing like 6,000 jobs on just in record ship manufacturing might be eight and just and so the amount of job growth just in Texas alone is just ridiculous yeah yeah and and and you look at those types of States you know people are kind of fleeing the coast uh because of you know
(34:14) policy and affordability so if you have a family and natural disasters yeah and and natural disasters yeah so you know like like you’re looking for you’re looking for work you’re looking for an affordable place to raise a family you’re looking for you know a good community um yeah so like there’s so much opportunity um in those States and you know we look at Canada then we can talk about you know the whole rent control thing so in Ontario BC like you know you’ve got provincewide rent control in
(34:43) the states you’ve got rent control in California but rent control in California isn’t as onerous as rent control in Ontario really every everybody complains about rent control in California yeah well they don’t know that in Ontario it’s it’s even worse right so um you know just on the the what is rank control in California um so rank control in California um I don’t want to misspeak here but I’m pretty sure it is tied uh to some type of index um you know I’m going to say something wrong here because we don’t
(35:18) even look in California but but in terms of like the comparison when I went through step by step it’s like oh um like Ontario um is a lot more onerous in terms of like the restrictions and everything so I don’t want to misspeak but that’s okay yeah for sure cuz rent control is also a broad term just like rental licensing it’s it’s it’s every every municipality does it differently for example there’s one state in this in the US I don’t remember the name of it but the rent control is you may not go
(35:43) over 10% rent increase exactly which is okay that’s pretty good yeah yeah so and then then we can look at the history of rent control right so we have to go all the way back to World War I when rank control was instituted on a massive scale but that was because we were re bu Europe was rebuilding from World War I like it was destroyed we have rent control government steps in and government stepped in in terms of many different uh produce Industries and everything too um but that’s really where it started um and then it’s a good
(36:13) talking point with in the elections it sounds good but if you look like there’s a number of studies that show that I’ve looked at it a a market without rent control rents are actually more affordable and you have a better product uh because you have more incentive for people to to reinvest so yeah we can go on that tangent forever uh I I want to go more tactical cuz you’re actually living it CU your your properties in the states I imagine because you’re talking about Sun Belt yeah for sure Sun Bel is
(36:40) from what I’m reading on Twitter uh shout out Jordan Jordan Parson sorry uh shout out Jason Parson’s on Twitter who who’s in the space his tweets are excellent there there wonderful reports he puts out there from what I’m reading is that there’s because um just like the pendulum swings when when the Sun Belt stat got really hot a lot of Builder developers were building building these properties whatnot and so they right now they’re at a point of overbuilt yep and so rents have come down and there’s no rent control but I
(37:10) just said rents have come down yeah the the market takes care of itself like like that and and yeah so depending you know you look at places like Orlando you’ve got over supply for sure um but you know the market that’s the E and flow yeah um and and that’s what creates opportunities um no matter which state of the cycle you’re in like there’s opportunity as long as you’re in it for the long the long term right yeah so can you share What markets are focused in and why yeah so we’re we are really hot
(37:38) on Tampa right like we are trying so hard um to to get into Tampa uh right now uh we feel there’s a lot of Runway left we like the markets um we we like we like the area we like what’s going on in terms of the economy we we like the policy in place um so we are fighting tooth and nail um to get to Tampa so we we should have a uh an announcement to make pretty soon on that but like we are working so hard uh to get to get in there imagine you’re not the only ones like Tampa Tampa’s been growing like
(38:10) crazy oh for for sure yeah there there is a a fair amount of competition for sure like it’s like any market right any any Market that has uh a lot of Runway left like you’re going to be competing there uh so Paul our Acquisitions director he’s been working really hard um and you know he’s he looks at like every deal there is um also like we we we’ll look at at a number of other different markets in around Florida um but yeah we we are trying so hard to get our first one in Tampa what what kind of property are you
(38:41) looking for in Tampa yeah so our buy box is uh to Value ad Class B type of asset um and we’ll look at anything from 100 units to about 300 units uh give or take um and uh and that that’s a range where we feel really confident in so we’re able to do the there uh that that’s within our skill sets and uh we’re looking for that traditional value ad so we’re we can come in uh depending on some of the deals uh that we’ve been looking at um it’s either an operational play or there’s a fiscal Improvement
(39:11) side oftentimes the combination of uh of both but we’re we’re looking for a place where we can acquire the asset you know add some give something back to the to the community uh make it better um and and improve it for everybody so uh not only for us and our investors but also the people living there right we’re giving them safer better housing can you elaborate what a b-class property is oh for for sure so when we’re talking about uh commercial real estate and in multif family specifically you’ll hear all
(39:41) sorts of um you know ways of describing things but generally speaking you’ll have uh class ablea which is going to be the best location in a major Metropolitan uh City Center like the best location there ever is that that’s the class ablea brand new asset then you have a class A asset generally you’re going to be within 10 years old uh topof thee line amenities uh you know everything’s like topnotch like it’s a great location great building top quality you can probably attract doctors and lawyers as for sure yeah yeah you
(40:14) that that’s that’s you’re going to have your higher income people there that’s where depending on the market you’ll have like your granite countertops like really nice stuff Class B is going to be you know let’s call it you know that 20 year old year old type of um type of range uh it used to be a Class A but now it’s just older uh you won’t have the same modern amenities because it’s you know 20 years removed uh but still solid property good location it’s just a little bit older you have a little bit
(40:40) of deferred maintenance there that you have to go in and that’s that’s really what we’re looking for that good quality asset where we can come in and proof it bring it up maybe it’s got the last time the kitchens were done was you know 2005 so we can come in and uh and improve it do the kitchen Rena you know change Landscaping bring it back uh to life that type of thing then you have class C and class D Class C you have more deferred maintenance like you can tell when you see it it’s like ah it needs
(41:08) some love uh amenities are very few because it is older um and then class D like you’ve got it’s it’s really rough at that point yeah so so those are the different classes so we really like to live in that class b space you know good quality assets uh stable assets we’re not acquiring a place where there’s like 20% occupancy where you have to go in with a bulletproof vest or anything like that but uh but yeah good quality assets and good locations something went very wrong if you’re only at 20% vacas something is
(41:41) very wrong like City housing were or like sometimes you have a flyers rip through like a bunch of buildings and stuff and roof is leaked or massive infestation of some sort yeah and and those are heavy lifts and that that’s that’s not Power by box at all like there’s people who will take those on and uh that’s all the power to them but that’s not kind of what we’re box is the corporate lingo for this these are our field posts buy within it yeah for sure because when we’re uh meeting with um a
(42:13) new potential relationship in terms of on the on the brokerage side or a lender they usually ask hey what’s your buy box basically they’re saying hey what are you looking for and to talk like a pro you need to know the lingo yeah yeah you kind of throw the lingo around but yeah it’s just uh looking for that 100 to 300 unit range Class B traditional value ad that that’s really our uh bread and butter any amenities you’re adding and and ke you share what they are would be yeah yeah right so um like adding a gym
(42:41) perfect right because especially when you have markets where you have a younger demographic moving in you know people work out now like like you need a gym and that one treadmill in the corner doesn’t cut it so uh at a gym uh you can uh replace you know tennis courts are you know kind of P so take out the tennis court put pickle ball yeah pickle ball yeah pickle ball uh I’m just joking is that really a thing well actually there have been some properties um where they have uh they’ve put the pickle ball
(43:13) on the tennis court so nobody plays tennis anymore so that that is true um and then you know you can take out those tennis courts uh you can add a playround if you have lots of families on site or you can add a barbecue pit you know I love the barbecue like I love barbecue so do you I I see all the briskets you do so well especially if you’re in Texas or Florida florians love barbecue too they do I so I’m I’m heading to Miami on Thursday and we’re hitting up a new barbecue place for the entire trip so um
(43:42) yeah so B basically you want to look at your tenant profile and really understand hey like what do these people need like what’s going to attract them and if it’s not a tennis court well what types of people are living here are they f are their families well yeah well throw in a splash pad throw in thrown a playground you know make it a community people want to live um that type of stuff yeah yeah I like the barbecue I enjoy it and also all my guests love it oh for sure Barbecue Pit so you know let’s say you know you have a younger
(44:12) demographic um you know like in their late 20s and 30s you you got some families but throw in a couple barbecue pits make it really nice add some pergolas some seating around the family can come down you can cook on the grill you can have a little party it’s great for Community appreciation nights so you can bring in a couple chefs they’ll cook food for all the residents there like you can make it good right yeah uh is there more to a buy box like is there a price per unit is there a cap rate you want to get in at then what you want to
(44:44) uh your arv all those sort of things yeah good good question so we don’t really look at cap rate um that’s not really we’re going to offend some people well yeah all about the C oh man so and generally so all the most I’ve been very fortunate in that I’ve been able to build relationships with some very successful uh multif family investors are very very successful and I don’t ever hear them talk about cap rate so there must be something to that uh they’re looking for hey how can I create
(45:16) value in the deal that’s what they’re focus on and what can I control because we can’t control interest rates we can’t control government policy but what you can control is what you buy the property at what Renovations you do when you do the renovations like your business plan your marketing you can control that stuff so that’s what they focus on so you know price per unit again like that’s so subjective because you know price per unit you could have uh you know a B+ versus a B minus asset the price per
(45:47) unit is going to be different so you have to look at a number of different metrics right you have to look at your irr for the deal internal rate of return uh you have to look at your cash on cash cuz that’s going to give your you your annual uh return and then you want to look at your Equity multiples like we attack it from price per square foot we look at you attack it from all sorts of different ways because each metric will give you a tell you the same story in a different way yes um so yeah we we don’t
(46:14) look at cap like need SLE data points to make a decision 100% it’s not like oh yeah we we only buy at a six cap well but why though like like what what does that mean um so yeah so B basically what we’re looking for is we’re looking for a good quality asset and a good location maybe there’s been some mismanagement maybe it’s part of a greater portfolio and it wasn’t getting the love and attention it needed you know maybe uh maybe we see an angle where we can improve the marketing maybe we see a
(46:44) trend in the area where you know that asset hasn’t caught on to it so hey if we make these changes we can attract this huge demographic that’s now moving in so it’s really like any business like what’s your SWAT analysis like what can offer um and what what changes can you make in the deal that other people aren’t necessarily seeing all right slat strengths weaknesses opportunities uh threats yeah 100% right so and you know if you’re acquiring an asset and across the street is a brand new you know 450
(47:14) unit class doublea asset and you’re you’re looking to take your B+ asset to an a you know that’s going to be a huge threat so you probably don’t want to do that but if you have a class you know a Class A ass across the street and you’re in that class B totally different markets and you’ll actually get business from the class a asset when you when they price people out they’ll come over so you have to you have to look at everything together so it’s hard to say yeah you know I only buy at a eight cap
(47:43) well like that’s not a I would argue that’s not a sophisticated way of looking at real estate like you’re pigeon holding yourself on one metric and and you’re missing out on what’s really going on right yeah and we talk about loss we talk about lost before recording during this as well like for example the folks who are you know losing their shirts up in Northern Ontario like I don’t think they probably understood their irr nor nor their internal rate of return nor their cash on cash yeah because if you’re sitting
(48:12) vacant there ain’t no cash on cash no there a negative cash on cash yeah and like even irr so like a lot of investors um on the lp side so you know passive investors you know one of the first questions they’ll ask is hey like what’s the irr what’s the Equity multiple in the deal but like irr tells such an important story because it tells you the time value of money for like you know how the money’s locked into the deal right so you know I I always use examples where hey like here’s deal a
(48:40) you get x amount per year or he’s here’s deal B you get a slightly larger Chunk in year two and then you make a little bit less money while the irr is actually higher because you have more Capital being returned sooner and then there’s opportunity costs you can invest in different opportunities and all that kind of stuff so um yeah so whenever we’re speaking with people it you have to tell the whole story so you’re looking at many many different things I hope all investors appreciate irr
(49:05) internal rate return is incredibly important when whenever you’re going to whenever your investment plan has includes a refinance 100% some return of capital 100% because like a straight return on investment calculation do you are you doing the return on calculation based on today or after refinance yeah well and and that’s that’s the thing too so what we found is cuz as markets get tighter um like our rule of thumb is we never never never promise a refinance in a deal ever because it may or may not
(49:36) happen we just saw this the past couple years so if your deal uh like lives or dies based on a refinance that’s not a good deal right because that refi may not be happening so when you’re looking at your irr you want to look at irr without the refi and then you have your best case scenario hey if we do refinancing your three this is what your irr will look at at that point uh but you never never never want to bank on having the refi refinance cuz it it may not happen MH yeah so we’re talking a lot about us investing right now and you
(50:08) actually have data to back that up like for example before we’re recording you mentioned uh 70% of your audience wants to hear about us investing oh yeah yeah with the conference huge huge appetite huge appetite and and this is majority of Canadians you’re surveying as well yeah yeah yeah yeah that’s how Canadian audience so I’ll apologize I know that I know this is a Canadian real estate show but a like 90% of my audience wants to hear about us investing and you have 70% want to hear about us investing huge
(50:36) topic so apologies we’re not talking about Canada right now we’re talking about Canadians investing in the US yeah and you look at you know content we produce and everything every time we talk about us investing for Canadians it pops every single time so there is a huge demand for for that knowledge and quite honestly I I think it’s a number of things number one obviously the lies and all that kind of stuff but also the um there’s not a lot if you’re a Canadian looking to invest in the US
(51:04) there’s not a a lot of good material there to help you because 99.9% of stuff is made for a US audience so if you’re Canadian it NE it doesn’t necessarily line up with what’s best for a Canadian investing in the US so if we’re able to produce top quality content like you know you do a lot of stuff like we pump out a lot of stuff too if we’re able to deliver quality content geared towards Canadians I I think that’s a a missing link or a missing piece right now in the marketplace and I we mentioned GDP
(51:36) earlier the GDP of Texas is actually very close to the country of Canada oh yeah pretty much and that’s one state that’s is one state the population of Texas is around 30 million yeah and the population of Canada is almost 40 million it’s over 40 million now but Bas the GDP numbers are a little bit older so I’m trying to match up population yeah so again the the Americans have like 25% less population than us in the same GDP state of Texas alone yeah it’s like it’s insane like the research all
(52:07) points to One Direction really oh 100% 100% the only thing the only biggest benefit we have is the biggest benefit to a Canadian investor especially Ontario or BC is that we can’t build for whatever reason we can’t build fast enough so then a for that restricts Supply artificially restricts Supply hence we have uh you have a demine supply balance which drives prices up for for sure and you know there we can go even deeper in that but like it’s not like the the housing crisis isn’t just reserved for Canadians like there’s a
(52:39) housing CR like you look in the states like there are markets where it’s hard to get a home like it is a challenge it’s a North American challenge right and Grant’s Grant’s been Grant in his uh his 2024 review was like he said like we’re really short on building oh huge and this year’s and this year is just just we have we have Americans have similar problems that we do because rates are high they’re not investing they’re not building Y and this will C this will bite them on the butt oh for
(53:03) for sure like we have such a housing deficit right now in ter in terms of like starts that have to happen and and this is a problem that’s going to be around for the next hundred years like it’s not going away it’s not going to get better either because the Americans have trouble Staffing builds as well no different than us yep yeah we need trades we need qual we need competent people who who are trained 100% yeah but the Americans have an advantage in recruiting trades over us well they do 100% 100% um and like that’s and we can
(53:32) talk about like how um how governments are angling in terms of who they want to attract and everything but uh yeah for sure so I want to bring it I know you’re you know you’re big and fancy buying 100 300 units at a time I want to we have a lot of young listeners like who are like you know under even under age of 30 nice so say you were 25 years old what would what would be the first property you buy oh man yeah so if I could go in a time machine yeah I would erase the first like 10 years of me in real estate um
(54:02) and so if I could go back and here’s Seth like reading books trying to learn about real estate investing I would slap myself a little bit and say don’t worry about a house buy an apartment building like first first deal and like this is a little bit like controversial but a lot of people say oh well I want to start with something small because it’s safer I argue the bigger deal is safer than the smaller one so hear me out if if you’re listening right now and you’re like oh that’s crazy give me a minute to
(54:30) explain so what a lot of people do they’ll buy their first investment property maybe it’s a single family home a duplex uh they have to qualify for the loan on their own right because it’s based on their income the bank doesn’t really care about the income produced by the property the cash flow is going to be so tight number one it doesn’t give you much wiggle room but also um like you’re not able to afford Real Property Management because you have to self-manage because the property doesn’t
(54:54) produce enough uh cash flow and there’s a good chance you’re screwed up exactly right so so right off and then if like a duplex one tenant moves out there goes 50% of your Revenue yeah so for all those reasons like yeah sure the purchase price is smaller but you’re doing a loan you have no idea what you’re doing you’re going to mess up and then you have no like wiggle room like you’re screwed if you make a mistake like I I remember with one duplex you know we had an $88,000 repair bill
(55:20) because of the drain out to the Sewer the a tree route like busted through it 8 Grand that was like three years of cash flow on this property gone yeah right now you go on an apartment building it doesn’t have to be huge maybe it’s a 25 unit building much stronger cash flow different types of debt you can get on there right you’re able to have Professional Management because there’s enough money to pay the person so even if you’re new you have a manager who’s probably managed 10,000 units they can
(55:47) guide you and help you out and plus because the deal is bigger there’s probably enough meet on bone to partner with somebody who’s done at least a couple deals and you guys can do the deal together and everybody’s better off it’s more stable you have you have better cash like all those reasons so for now like if I could go back in time I would push myself hey get educated about this world of real estate like understand how it works and then go do a big deal right off the bat like 100% What markets are
(56:17) we looking at for this example hypothetical 25 unit building it doesn’t matter like the the markets irrelevant um you know I have friends who are crushing it and California I have friends crushing it in you know the Tennessee like the Market’s not important it’s more the market will impact your business plan and and what you place important like what’s important to you if you’re a cash flow person and like you don’t really care too much about appreciation you can go in into you know some Midwestern Market
(56:49) well the mid Midwest is is pretty hot but like you have to find out what’s important to you what your goals are for investing and then you want to find a market that that kind of fits that right um I think most people are more interested in cash flow these days of rates being so high for sure well cashow probably not so California is likely off the table well cash flow is the lifeblood of a real estate deal you need the cash flow um so but you want to look at a market that can support itself that is diverse in terms of its economy you
(57:16) don’t you just don’t want an agricultural based economy there there’s not diversity there or you just don’t want oil and gas like you need a mix uh you need a a growth in uh in terms of the population in the right demographic so if it’s the over 55 age group maybe you might want to think twice unless you’re in senior living right but you want to have those young workers who are in the prime working years of Their Lives who are going to have the families like who are going to contribute to the
(57:43) economy like they’re moving there to work so you want to have good government policy in terms of uh job creation and how they treat business uh preferably you have a city or an area that is actively trying to recruit businesses to move uh you get lots of incentives like that that’s the type of stuff you’re looking for um because if if you’re talking with an investor and saying hey Mr Mrs investor you know I have this deal it’s in this market this is what it looks like but oh like the the market we
(58:13) losing 5% of people every year like bad Market yeah like like you want to have some Sizzle in there oh yeah like our Market is has been in the top 10 for growth in the entire country for the past 5 years state of Texas 100% right like like like you want a growing economy and that’s what’s going to push um push your deal um give you that extra like push uh behind your sales so that was a long very long answer but I think most people can appreciate like where would a young family or young person want to want to move to yeah 100% right
(58:45) yeah and then generally those they want opportunity they want to pay less tax they want lifestyle yep so generally that means includes good weather great nature good schools those are the yeah 100% right so it’s not that hard no there’s honestly like there’s there’s like 20 Fant there’s at least 20 fantastic cities we would we’d both invest in oh for for sure like and like I I’m in that demographic now well I’m almost 40 almost there but it’s like where would I want to live like with my
(59:14) family it makes it really easy I wouldn’t want to move to California no no definitely not but but like you just ask yourself so if you’re 25 like do the market research and and the the thing I I’ve kind of learned the longer I I’m involved in this is like it’s not rocket science you you just have to be that much better than everybody else so a lot of people getting involved in real estate they’re like oh well you know like I’ll just kind of learn no like like really understand what how money is
(59:43) made in real estate understand the markets like what drives real estate what are the top investors what are they doing how do they look at properties if you’re 25 and you can nail that like you have such an advantage over over the 80% it’s that 8020 per principle all those poor people buying preconstruction condos like you have such an advantage and then if you’re able to have um you know a a an investor conversation with somebody and you’re able to follow that and deliver value to that person and and
(1:00:14) present things in the right way and have and and demonstrate your confidence and your knowledge it goes such a long way that’s oh so you mentioned like if when you find the pro the deal you want in Tampa for example yeah you’re going to raise the capital can you elaborate on what is a right mix of uh cash versus U mortgage oh yeah yeah so um it’s going to depend on the deal itself because there’s there’s wiggle room there but generally speaking we’re looking at you know a 7030 a 6040 uh so what I mean by that is we
(1:00:51) have a 60% debt 40% Equity or 70% debt 30% Equity um at no time do we like you hear people online talking talking about oh yeah I can get a 90% LTV through whatever program well yeah but that doesn’t really insulate yourself uh so you have to protect the deal and you need that Equity buffer um let’s just elaborate on that because some folks missed the missed that point with the the poor folks with the all the vacant properties in Northern Ontario and it’s not just them there’s other there’s
(1:01:24) other issues out there uh but I just want to elaborate on those deals specifically because those are 100% loan to value yeah there’s a for First Mortgage I don’t know what the rates are I’m going to guess six yep which is still expensive the seconds are like eight which bring you up to I don’t even know I think that brings up doesn’t matter and then there’s promissary notes that are paying like 177% y right so there’s no equity in these deals so just elaborate how Equity gives you buffer is
(1:01:52) you don’t you’re not paying any interest on the equity piece exactly which keeps payments lower yeah 100% And depending on depending on how you structure the deal like you’ll have returns that get paid own and everything but it’s a split on the profits of the deal and and really at the end of the day people get themselves in trouble with lenders because the lender wants to make sure that their money comes back to them so and that’s why lenders look for a debt service coverage ratio of like one and a
(1:02:16) quarter and what I mean by debt service coverage ratio is hey like how much Surplus does the property produce in excess of your debt service requirements so mortgage payments so A lender is going to want about a buck and a quarter one and a qu so that way on the day of acquisition that they yeah wow so so that that way um like they have that that wiggle room so in case like something happens with the property occupancy drop something like that they know they have a buffer because if you’re going in at let’s say 90% debt
(1:02:49) that buffer is so small so all it takes is a a dip in the market now the lender scared and now you start uh the ugly legal stuff that nobody wants uh so you need to have that uh that buffer there cuz at the end of the day let’s say worst case scenario you’re planning to to exit in year five and the market is the worst Market we have ever seen you have Equity built up in the deal like you can you can weather that storm um the last thing you want is that gun to your head which is where a lot of operators are um or got into last year
(1:03:21) where you have short-term debt expensive debt Market shifted now they can’t get out of that into conventional and you’re stuck it’s either you sell out a loss or you’re like taken to the cleaners so um yeah so so you want to make sure you’re you’re being safe with it and again no one went bankrupt for having too much Equity no no for for sure right and and so that that should be a red flag if you’re looking at an investment opportunity and they’re telling you oh yeah we’ve got 90% debt yeah maybe the
(1:03:48) numbers look good on a spreadsheet but in real life that’s not really how it works so this is likely the challenge both of you and I are running into as well because there’s a lot of marketing out there courses that are like heavy heavy debt oh yeah investment strategies so like I get people asking me like because my I’m like my plan is to put like 30 30 4 to 30 to 45% down on properties in cash yeah and people are saying why so high like what do you mean High I’m trying to at least Break Even
(1:04:14) yeah how low can you go yeah exactly and and it’s you know you always have to assume like what’s the worst case scenario and this is where Paul on our team like he’s really good at this kind of stuff like we we have our model and we try and break it so we have our underrating model hey this is our forecast for the next five years for the for the asset well now like how can we break this and make the deal fall apart and then we want to shore up those weaknesses and so yeah going in with high debt is really good if everything’s
(1:04:41) great but if if everything’s going to be perfect right like but like nothing ever like uh goes perfectly so you have to expect some choppy waterers in there and what happens like right yeah yeah yeah be a little weather storms yeah and everyone who had the storms usually have heavy heavy Equity or massive cash reserves or on the small scale people still have their day jobs and their six figure jobs so money’s still coming in yep 100% all right uh Seth you’ve been so generous with your time where can people
(1:05:12) learn more about uh multif Family Conference yeah the best way about the conference is just go to multifamily sen new speakers and uh yeah it’s May 24th to 26th in Toronto so it’s coming up pretty soon fantastic I can’t wait to be there it’s like a reunion it is yeah yeah it’s unfortunately like you’re just mad bit everyone wants your time that day but uh for the for the Schmo like me just it’s just nice to see all my friends there well you’re a celebrity so no no hardly not like not like the
(1:05:49) folks on your stage and uh your podcast is restarting yeah yeah so we’ve uh we ran for like 450 episodes before yeah yeah it it ran for a long time and then it just yeah so we totally knew uh we’re taking a different angle on it and it’s called the cool podcast so because you know one of the things before is we were we were just real estate and I I didn’t think it uh I didn’t feel it gave me the leeway to talk with some really interesting people who I wanted to speak with so now we’re uh talking with people
(1:06:21) who are pushing boundaries in their niches and in their spaces real estate but also you know we just interviewed um a a really cool musical artist um about kind of how the music industry works and how she’s uh making Headway there so like that’s really cool stuff to me so um it’s more General business and that aligns well with all the stuff we’re doing on on my end too yeah it was in the news that Rod Stewart estimate no one knows like these are private deals but Rod Stewart sold his uh his his song
(1:06:52) catalog for 100 million it’s it’s insane and actually we were just golfing at the golf simulator with with a guy who who on his shelf he has like music rights like it’s a fund and I think that’s so cool um and and so yeah we can talk with people about that and uh I just want to speak with people who are doing really cool in in their space yeah who are making money like yeah making money is to me to me nothing nothing more fun than making money yeah Seth thanks very much for doing this oh I always want to
(1:07:23) give my guest a final chance a final like the final a word any final thoughts like we’re like we’re recording this February 20th y a lot of turmoil right now actually inflation I don’t know if you probably I don’t know if you caught this morning um Canada’s inflation rate came in well below expected 2.
(1:07:40) 9 oh no I did not see that it it just broke this morning from Scotts can so uh yeah things might be picking up real soon yeah well we um like it was kind of interesting so uh like Grant and Alex last year at the conference uh both of them had really big targets for the next you know 12 18 months like Grant wants to double his portfolio and I I think you know the opportunity presenting itself now uh I think we’re setting ourselves up if you take some action now you know two three years from now I I think you’re in a really really good
(1:08:12) spot yeah yeah I know you didn’t have this dragon or sorry shark Barbara corkran was saying that the American Market’s going to bounce back as soon as we have Cuts yeah which are expected for pretty soon that’s actually weird because we Canada cut first sorry Canada increase rates first yeah and like everyone was expecting the Canada to cut before the Americans but right now it’s looking like the Americans might cut before we yeah and then depending on election results too like uh you know depending on who gets in like you can I
(1:08:37) I would expect some pretty aggressive policy if uh if the Donald gets in there to kick poli’s already aggressive well yeah but like it’s the Donald like he’ll go in and one more can you do and yeah and if because long-term forecast already for the I promise you the last words I don’t know if you what your research is showing me but my research for the Canadian dollar is it is expected to perform poorly against the US dollar yeah yeah and that’s you know over the long term yeah yeah and like all the
(1:09:10) like we talk with people who are way smarter than like I’m like down here we’ like we talk with really smart people and they they concur with exactly what you’re saying cuz like so how Canada benefits from the US growth is you know we build our pipelines we we get our and we mine our minerals yeah like we’re still the the heers of the land and the Sea like we’re not we’re not investing we’re not building anything no we’re just harvesting what we got in the ground I I want my money in USD 100% yeah yeah yeah
(1:09:41) cuz like yeah I promise you the last word but it’s all good but like I was playing with the we were playing with Google’s uh AI tool um I forget the name of it it used to be called Bard it’s they renamed it like genesis or something like that whatever but it’s like wow this is pretty impressive and I was already like over the top of chat gbt and like yeah and then and then open AI came out with the stop me if you heard this before open AI just released that that they can now do text to video
(1:10:08) did you see video yes I saw that yeah they had um they had two pirate ship sailing in a coffee cup and um yeah yeah that that’s really cool so it was absolutely insane did you see the one where like the text promp was like a drone video of gold brush California no I didn’t see that that one no it was absolutely insane yeah it was like your drone video going over the river and on each sides of the river is like housing and people dressed in that era yeah like and all in the prompt was just a few words yeah it’s like it’s incredible
(1:10:42) what’s going to happen over the next 10 years like I don’t think we’ll be able to recognize like marketing and creation of Assets in 10 years from now it’s going to be insane yeah and so where I’m going with this is like I’m not smart enough to build anything with AI or an AI tool or nothing like that yeah but what I do know is I saw an article that Sam Alman himself the president CEO whatever leader of CH open AI he’s trying to raise 10 billion to build microchip manufacturing because he still
(1:11:07) sees there’s going to be a shortage yeah we need our own microchips even though the Americans going to be building microchips like crazy yeah so I’m not smart enough to do like get make money out the microchip stuff and the AI stuff and all this sort of stuff but I’m smart enough to buy a house near one of these manufacturing facilities right so that you know these really smart people working at these places can rent from me or buy my house yeah exactly y I’m not going to over complicate anything yeah just keep it simple and
(1:11:35) collect the rent checks that’s all you have to do forget about it yeah I don’t to overthink this s thanks so much for doing this thanks for coming in thanks for having me and that that H uh looks really good so oh yeah for the folks who are listening Seth brought in swag so you know to encourage people to bring more wear swag I’m wearing swag while on the show thank you s sweet thanks everyone thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to
(1:12:01) use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.com below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor trining doca youout thanks again for watching see you in the next video

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UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to www.iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to www.iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s www.iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
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Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Mastering Real Estate Cycles: Insights from CEO of REIN, Patrick Francey

Thank you everyone for the birthday wishes, I turned 45 over the weekend so if I live to 90, I’m either half alive or half you know what, LOL. 

To celebrate Cherry, my wife and Real Estate Accountant organized an escape room and dinner for a small group of friends and family.

As a special birthday present, we escaped the escape room without hints at this particular venue after 15 or so failed attempts in our career with a whole 60 seconds before the clock expired.  This was a fancy, two hour escape room with two parts. The 2nd part of the western themed event was a bank robbery where our group was divided and competing against each other to see who could steal more.

My friend Andrew Kim, CEO of SHARE, the US real estate asset manager and I combined to tackled the main problem which was to crack the safe containing a gun, not a real one, worth the most points and there was only one gun so whoever got the gun would determine who would win. 

Andrew and I had to solve a poker hand puzzle and we did seconds before the game ended so we both escaped and won the team challenge. 

Everyone had a total blast. Dinner was fantastic as my dad brought fancy wines from his collection, we had a variety of seafood and steak.  Our guests all loved it.

We finished the night playing indoor, virtual golf on a simulator and drank adult beverages.

It was a great birthday as a couple of my real estate buddies came too so we got to talk about my favourite subject: real estate investing :).  Who says you can’t mix business with pleasure.

Mastering Real Estate Cycles: Insights from CEO of REIN, Patrick Francey

On to this week’s show!

This week we have a very special guest in Patrick Francey, CEO of the Real Estate Investment Network (REIN for short).

What makes REIN special in my experience is they’ve always been affordable, REIN has been around longer than pretty much all the other real estate education or networking organizations.  They focus on economic fundamentals and cash flow, they literally teach both subjects extensively once per year in each of the cities they operate.

As such, their members are among the most successful in the investor community and their members risk way less. Never did they teach high leverage investing or promissory notes in my experience. 

OPM or joint venturing instruction was almost entirely equity based to preserve cash flow, reduces risk, allow the passive partner to participate in both upside and downside.

On the other hand, I’m having regular conversations with investors about professional coaches and small REIT owners who are behind on payments to their investors and folks are lawyering up.  Never in my experience have I seen this scale of lawsuits in my experience hence I feel the timing of this interview with Patrick and last week Tom Karadza of Rock Star real estate is timely.

We’ve had lots of experts on this show including Alberta real estate investors but I do want to highlight what makes today’s guest in Patrick Francey standout.

Patrick’s role at REIN places him at the forefront of research and education, he has thousands of REIN members to network with across the country to help him make informed and profitable decisions.  Patrick admits he’s a wee older than I am and benefits from having been both a business owner and real estate investor for several economic cycles both boom and bust. 

On today’s show we reminisce about what has made REIN members successful over the decades but it’s been far from perfect, we’re talking about Alberta here who had been in economic winter for a decade, prices had crashed and the energy sector has been neglected at the federal level. As for the future, it’s bright for specific parts and strategies in Alberta which Patrick details.

Please enjoy the show!

To Listen:

** Transcript Auto-Generated**
(00:00) hello and welcome to the truth about real estate investing show my name is Erwin Szeto and I want to say Happy Belated International women’s day oddly enough uh International history of women’s month is celebrated in October in Canada versus uh the west of Russell World celebrates it in March so happy in happy women’s History Month to everyone not from Canada anyways I want to shout out all the lady investors especially the moms and even more so the single moms out there uh I believe the women of real estate are incredibly awesome I
(00:33) happen to be married to one and I wrote a poem on the subject uh from from my own experience of working with uh I’ve shared before about half my clients are women including the married couple uh half the time the wife is the driving partner of that relationship so for the first time ever on the truth about real estate investing show I’m going to read you a poem in the Realms of brick and motor where dreams are built and sold a story of empowerment encourage dozen fold on International women’s day we raise our
(01:03) voice in cheer the women leading boldly year after Valiant year among my clients women shine their Vision clear and bright during Investments forward driving Investments forward with insight and foresight husbands too in Whispers confess their admiration pure their growth of our net worth they say her genius did ensure to the wives and pillars strong upon which Futures stand with who with a Keen Eye for Value navigate the land their wisdom in selecting the right property to seize shapes the fabric of success with
(01:35) remarkable ease and let us not forget the Single mother’s might juggling life’s many roles through through day and night the resilience of astounding a beacon so profound in them a well of strength and love abundantly is found so here’s to you the women in real estate who Thrive your influence is boundless helping dreams to come alive on this International women’s day your Praises we sing loud for the dance of progress you stand both strong and proud your freedom with these heroes in transactions large and small reveals the
(02:07) true essence of empowerment of all to Every Woman navigating the path of wealth and home may you always be celebrated and never feel alone again shout out to to uh all the women in real estate investing on a personal note U my family and I including my Superstar wife Cherry we spent the week of March break up north skiing sort of uh Cherry’s got a banged at me so she worked in the Chalet pretty much the whole time while I skied half the time as the ski the ski hill it’s a it’s huntsville’s uh Hidden Valley
(02:39) Highland ski uh so it’s bit on the smaller side but it’s perfect for kids I want to shout out to uh again Hidden Valley Highland ski camp for entertaining my kids and for training them I can’t recommend it enough for any parent who wants their kids to to learn how to ski so we’ve been doing this about at least three years now where our kids spend both the Christmas holiday break and March break in ski Camp uh we do live in Canada hence I believe the life skills for a Canadian include swimming skating and skiing intermediate
(03:12) levels are just fine I just want my level kids to be safe when they’re playing with their friends uh our family friends uh their teenagers actually had their ski school day cut short as too many kids were getting concussions from crashing into fences or trees so that’s not for what I want for my kids hence uh I’m planning ahead speaking of planning I have enough clients with adult kids where their kids want nothing to do with the family business or the real estate portfolio versus what kid would say no
(03:42) to an inheritance of stock like apple or or Microsoft my point is to increase the probability of my kids wanting to learn to and be investors the need something a bit more easy a bit more passive than what Real Estate Investors are going through uh locally to manage their own port uh take Airbnb for example earlier this week cherry and I had our worst experience with the property that we booked through Airbnb uh when we showed up this is this is for our March break so when we showed up the heat was off so we when we arrived the house was
(04:14) freezing and the thermostats weren’t doing anything not a good first impression uh there was no welcome email with instructions on how to operate the house no manuals inside the house either uh so we called and I spoke to the owner’s father and he was able to walk me through how to turn the propane furnace on that was outside the house so that was the first for me I’ve never seen a furnace outside the house before but even with the heat on uh the radiators on the main floor and in the main floor bedrooms they weren’t heating
(04:41) up and that’s where I was sleeping so that’s concerning to me uh there was also a fluorescent light in the basement that was a ceiling light that was loose and it was drooping down from its Mount I’ve never seen that before uh half the closet doors were off the railings the wood fireplace hadn’t been cleaned uh the owner and the cleaner who came by to clean it up after we reported it they didn’t know how to operate it or how how to open the flu so we had no plan B either then at bedtime as we were
(05:09) getting ready to go to bed uh we actually looked at the beds and we found two bed pillows that uh the kind that you’re supposed to you know rest your head on when you’re sleeping they smell like bad body odor pretty gross some of the best then so then we looked closer pulled back some of the sheets and then we found we pulled back some blankets and we found some bed sheets that had old blood stains on them uh my pillow was wet to the touch uh so I just tossed it on the floor I wasn’t so lucky even when I went to go
(05:41) find a clean pillowcase as the next one I found was yellow U this is hardly a good experience the neglect of the short-term rental is as bad as I’ve seen the worst in my experience and uh how are how is anyone expected to relax with these sort of problems going on uh the owner did come by to check on us in the afternoon uh in her standards for operating a short-term rental with prices at $500 per night are well below my own uh and who do I criticize apparently she’s making the money hangover our fist um anyways we decided
(06:12) to cut our losses short we didn’t feel comfortable uh once Airbnb agreed agreed to cancel the remainder of our reservation uh but unfortunately we only got 30% reduction on that terrible terrible first day uh that that was the decision of the owner I don’t believe that was airbnb’s call to make anyways we pack up the house and uh mind you when I when we showed up at the house when we first checked in when the heat was off it was only 15 degrees inside according to the thermostats which seemed accurate and when we when we
(06:42) arrived to pack up the house it was 26 degrees it was only 24 only 24 hours that passed the owner had warned us there was no way to control the temperature inside the house and I’d gone through and and set the temperature at like 21 22 degrees on all the thermostats I could find yet yeah yet the uh the furnace was just on a runaway was running away I don’t know what would happen if we stayed any longer so no surprise the previous guests before us who left it before who left before we arrived that’s why they
(07:14) shut off the furnace and the owner instructed me to regulate the temperature inside the house was by opening Windows in the middle of early March there’s still it’s it’s a warm March but it’s still like cold outside what a waste of propane and lack of client care anyways so we packed up the house while the kids were in ski Camp uh a cleaner showed up and gave us grief for not leaving earlier uh like it was our fault the house is gross and that’s why we’re leaving and it was also too hot uh we
(07:43) drove 15 sorry 10 minutes down the road as we booked another airBNB uh and we were greeted with a beautiful custom home Mansion uh well there’s probably 4,000 I think it was about 4,000 square feet on a massive lot backing onto a pond it was even better than the pictures uh we had a wonderful remainder of our March break after our very bumpy start uh we honestly can’t wait to go Wai in next year uh while my kids are my kids are old enough now they don’t need to be in Camp anymore so yeah we hit the
(08:15) jackpot with that property uh with an added bonus we saved $1,700 for making the switch though I still think that first night’s day at that crap hole should have been free uh my point is I couldn’t do what the Airbnb owner did have to deal with customer complaint calls and deal with Airbnb uh and again the owner is likely making really good money um and her experience was that you know lack of Maintenance was perfectly fine she’s still making money hand over fist U she actually said she couldn’t take
(08:45) care of Maintenance because the place was always booked she never thought to you know block off some time so you can get some work done no um but to operate a business like that and not care about customer experience and argue with customers and be fine with being a SL Lord of short-term rentals uh I know my kids wouldn’t do it and I wouldn’t I definitely wouldn’t do it either hence I choose to Outsource all my management on my real estate Investments going forward uh all the heavy lifting it all the heavy lifting
(09:15) that I have to do for investing in in the states is my my due diligence and honestly I’ve had a blast doing it because I’m a real estate geek and I enjoy travel so I can’t wait to travel with cherry to Atlanta and Nashville and in between and uh yeah oh and then also recently I I stumbled upon uh trion’s website the rental listings as well so so they’re one of the largest reads larger reads in the states so again uh I’m enjoying what I what’s called in the in the in the industry any industry uh
(09:51) R&D you know most people understand R&D as being uh research and development uh I I Al it’s also known as ripoff duplicate so I have the rental listings of Trion which is uh and they own 36 or 38,000 single family homes in the states so I have the rental listings I have their addresses and pictures so I can look up what they paid for and when so anyways combine that with public knowledge of the billion dollar Investments being made by Intel Samsung T Texas Instruments LG Honda Toyota hyundai Tesla all in
(10:29) business friend friend L landlord uh landlord business landlord friendly Southern USA and it’s actually nicknamed the battery belt for their green electric and Battery manufacturing Investments all the locations are just outside major centers like Columbus Ohio Atlanta Georgia I know Columbus is a little bit on the Northern side but they’re they’re one of the anomalies of being landlord friendly in the north uh Rally North Carolina Dallas and Austin Texas these are all CI cities with growing population and growing economies
(11:00) and identified as among the best cities for investment in the USA so my plan is very simple I’m going to buy hoses in between these major centers and the new manufacturing companies being built that will employ thousands of manufacturing employees anyways I’ve mapped the new major employers out on Google Maps uh I know my target neighborhoods my investment criteria and I’ve partnered with share the asset manager to be my One-Stop shop to you know find me deals manage the managers Al all sorts of
(11:30) things uh I’ll pay them their fees and they get to do all the landlord duties while I get to keep 100% control and 100% of the equity this is the best joint venture setup I’ve personally ever seen if you two would like to learn how cherry and cherry my clients and I are investing in the USA we are hosting a how to invest in the USA Workshop Saturday morning April 13th we have experts in all areas including accounting accounting legal structures financing Acquisitions and of course management note that we are keeping our
(12:01) investing simple and boring and only discussing single family homes in at the workshop because they’re affordable at the 100 100,000 to $350,000 range and I can get cap rates between 5 and 7% which pretty much beat anything here in Canada when adjusted for risk uh links in the show notes on to this week’s show on today’s show we have one of my mentors in broker uh Tom Tom crit is the broker and Co under Rockstar real estate brokerage where I belong and have been since 2010 uh in my experience they are the best leaders and
(12:36) influencers in the community uh if results are what matters to you like they do for me Rockstar members uh their thousand plus members are very well educated and more importantly they are very successful especially when you adjust for risk no get- rich quick schemes at Rockstar and on today’s show Tom Tom discusses how Rockstar members have weathered the current storm uh spoiler alert it’s been pretty good we talk about how the pandemic ruined my Bitcoin gains while Tom has accumulated more than he will he’s willing to share and
(13:11) he’s laughing all the way to the bank and I I as I say that I I know the R I don’t know if that saying works when you’re talking about Bitcoin and Bank you know what I mean anyways Tom and his brother Nick kader are hosting the next your lifee terms event live and in person Saturday April thir April 6th at the international center near Pearson Airport this is likely the largest room uh a thousand plus attendees are expected uh and and these will be successful action takers uh and uh the talk is always the talks always fresh
(13:46) for example there’s speakers there speakers that they have out that they’ve never had before there’s no repeating content allowed uh cherio will have a brand new presentation and she’ll have a booth there as well I’ll be there of course networking I’ll be wearing my USA hockey jersey if you’re a client of mine uh and I do know someone who knows someone so I can save you the couple hundred bucks on tickets uh and for everyone else I have Link in the I have link and details and the link to
(14:15) register is in the show notes uh URL Fe if you have a pen handy it’s www.yourlifeyourtermsevent.com please enjoy the show hi Tom what’s keeping you busy these days I was just thinking about when I first met you and you decided you were going to get into real estate and for whatever reason I think it was a Greek restaurant in Burlington we had lunch was that where it was and uh Nick was saying something to me like you know we got to sit down with this guy Irwin he’s thinking of leaving his job and going
(14:52) into real estate and real estate investing full-time I’m like okay you know let’s go and uh Greek food I love so that wasn’t easy sell and I remember sitting down across and and I thought okay this guy’s pretty crazy like us so he kind of fits because uh he wants to quit his job I remember it was a decent job what was it I I worked for a company that was acquired by IBM okay yeah so you were you like a data analyst or something I was in product management so it was it was a nice position for me
(15:21) because uh my workers highly respected I worked between like clients and internal clients to help design product that would deliver what they wanted so I kind of like that intermediary between clients internal clients in our development staff and why what was what had gotten into you why did you want to quit again I forget I I always want to get rich in life it was always my always in me that just my nature I always want to be rich and after reading Rich Dad Poor Dad I realized it was not going to happen while working a job got it and you
(15:50) wanted to be rich and how do you define that rich in time rich in money Rich money I was young more money than marrier got it I was not even a point where like I didn’t want kids because they just getting the way of having makeing more money that was my mindset back then got it got it um I think I just watched is it true I watched something it was like a a Chinese comedian sing for New Year’s yeah I was talking to Tim about this briefly and is this is this a real thing so you don’t say Happy New Year to you
(16:22) know in on the Chinese New Year it’s not customed to say Happy New Year you say I hope you get rich it’s it’s it’s it’s it’s a loaded thing but it’s also rich in what though money Health okay so it means I wish you wealth in all facets of wealth yes okay okay he’s he’s taking the Liberty but yes but you know but again like generally Asians priority is money yeah yeah you get it like it’s po it was a historically very poor culture sure so like you know no money no eating
(16:51) right so you know you know you know croatians are have similar background as well you don’t have money you don’t you’re not eating yeah yeah I remember just the way my family I think would try to show wealth would be they had nothing so if you went to visit and this would be my family in Croatia they would put any P they had any cheese they had out any bread in an abundant way to kind of show that they were welcoming you to the house and to show you that they had something to offer you and they had no
(17:19) real Financial wealth but that was the way they kind of tried to show that they were welcoming you you know putting some food on the table Yeah weird times lots of different cultures have different ways to express that but I remember you you told us you were going to quit your job and then you went and did that took a lot of balls man do you looking back at that moment do you are you happy that you did that do you regret doing that uh so I don’t know if you remember it was a long time ago was 2010 we’re talking about I
(17:48) actually went on sabatical for 30 days okay and that’s and I had my license at that point so I give it a go so I give it a go and then I was doing all right right I think I did two or three Deals in that month and then if I extrapolated then that would be more money than I was getting paid at the job and I was enjoying what I was doing I knew that this would help me become a better investor as well so then there was more there’s more wins and also I could keep local right I was living in Burlington at the time so go train downtown you
(18:17) know and it was yeah hard Jam in there everybody was reading the newspaper yeah everyone’s reading the newspaper it’s and especially the ride home is packed like you I almost almost never got a seat so you for that’s usually me cuz I play basketball at work I was that guy but yeah like that was you know a key part of the journey and you know and it’s weird cuz I’ve only ever been at Rockstar I’ve been a realtor for since 2010 only ever been at Rockstar so this is my only context yeah wow and before we’re recording like like
(18:54) we’re we’re recording this on February 15th like there’s been all this turmoil in the industry uh like just just last week there was big news in the CBC and the globe mail a certain group with like 8 600 units in like Northern Ontario mostly like they’re Grant bankruptcy protection and digging into it it’s it’s it’s bad I don’t know how much you dug into it not much I just know that there was a bunch of stuff lent out on promisory notes and that’s really all I know the houses were
(19:23) up north somewhere well the the bigger issue well that’s a big issue part of the issue as well is like there’s 200 units that are sitting vacant that are not that are not habitable wow right and I was thinking like how far is this from Rockstar theory for how to invest oh jeez right cuz I’ll go OG on you uh cuz you always share your family story of back in the uh late ‘ 80s mid 80s late ‘ 80s and the early ‘ 90s yep can you share that story yeah I think maybe that’s what defines how we think about
(19:55) real estate over the last 15 years was that era our father was running a drywall company and then he started flipping properties on the side just like everyone starts flipping properties on the side in the late ‘ 80s it was in uh Moga just north of square one off Eglington and kind of Highway 10 and those subdivisions up there were going up in the late 80s yeah that’s gorgeous area beautiful area he started flipping properties and he did really well on a couple flips new construction bought them sold them and then 1990 hit and he
(20:22) was holding this one new construction again that he bought off paper on assignment so like it was a trailer on a gravel parking lot guy walks out buying the house my dad buys the paper from him and it was a 4,400 ft house house enormous pretty big three-car garage and back then he bought it for 750,000 and with the hopes that it would go up like like all real estate was going up and instead of it going up four months after he bought it um TD raised rates I mean the Bank of Canada raised rates but in this one month interest
(20:53) rates went up and if memory serves it was 2.9% in 30 days so it was like a 3% raise in 30 days and that absolutely decimated the real estate market and not only the real estate market it really ripped apart the highend or what I would call the luxury Market yeah 40 44 qualify yeah so that house we were looking to see if we could sell it and we would we would sell it for like 450 we thought and at the time we couldn’t afford to sell it for $450 we would lose so much that our family home in Miss Saga would be in Jeopardy so uh my Dad
(21:28) decided to hold on to it I became the property manager because my English was stronger than my father’s and we rented it out and even renting it out I remember roughly it was about $1,000 a month negative so my dad’s drywall or our dad’s drywall company was struggling because it was a recessionary time and we had this property that was sucking $1,000 and the price of it was under under what we purchased it for and then the the tenant skipped out on rent um and uh I remember going to the house and
(21:58) it was vacant at first I remember going to the house and them telling me hey just come back in a couple days and we’ll get you the rent I used to go pick up the rent I remember being inside the house when they told me this beautiful carpets baby grand piano like I remember being impressed with this house and just the way it was furnished and everything so when they said to come back I didn’t really think of it I used to cut the grass on that house and stuff and uh full service product management yeah
(22:23) what I was doing yeah I was like my old Thunderbird like I stuck in a lawnmower and I went to go cut the grass and do all kinds ofd who knows what more in a Thunderbird okay I got the image in my head yeah two car girl two car sorry two door Thunderbird with light covers and a bra on the front with a lawnmower in the back going a cut grass and uh i’ cut the I went back and the neighbors are like hey they let they moved out in the middle of the night and I’m like what they’re like yeah the house is vacant
(22:49) we’ve looked through the windows and then I went and the house was vacant they skipped out on one month’s rent and at the time one month’s rent for our family was absolutely massive like we needed that money do you remember what the rent was I don’t I just remember the negative I remember the negative was like roughly a thousand and uh I had to tell my father which was also that was just brutal had to rent the house out and renting out a larger house when times are tough took forever it was basically just us
(23:14) Executives who would rent out that house and even renting it out again in a recession not easy it was not easy no I don’t know how many months um I was in university then uh but I remember being vacant for quite a few months because I would have my friends over for some parties and I remember one of my friends jumped off the twoot sorry jumped off the garage roof he jumped off the garage roof of that house and landed on his chest on the grass and he didn’t die I remember seeing him bounce off the grass
(23:45) um so yeah we had some kind of crazy parties in that house and stuff but we eventually rented it out and uh that just taught me that you know going through that experience was really really tough and it just taught me that um when when we looked back there were some real estate or some properties that really um were the most liquid if you needed to rent them out if you needed to sell them in bad times if you needed to refinance them and it was starter homes it wasn’t these luxury properties starter homes always had a bit of a bit
(24:15) or a bit of demand M and I just always stuck with Nick and myself we like huh starter homes always seem to be like the most liquid real estate so if you’re going to get into real estate probably should just get starter homes and you should probably not do um reconstruction like our father had done because by the time you sign the paper or the time between you sign the papers and taking possession a lot can change it can kill you it the market can change it can change greatly Fin and I know that’s very conservative thinking and I know
(24:42) tons of people have made amazing money on preconstruction and I’m not denying that’s it’s like absolutely fantastic for them this is just our family story and what works for us so we always then steered Nick andai to starter homes that were resale because we thought oh well if they’re resale we know what the rent’s going to be and if it’s a starter home we can we know we can rent it out to a family regular rent we know we could do a rent to own strategy on it if it’s close to a college or university we
(25:05) know we could change it into a student rental which we had done we have a property that we ran as a rent owned that particular one didn’t get bought out we changed it to a student rental for a few years now it’s back to a single family rental so this the starter homes just have a lot of opportunity a lot of you know options there’s options flexibility to it if you want to throw a credit line on a starter home the banks are typically willing to do that so it’s just easy so it sounds pretty boring but
(25:33) we’ve just always thought resale and single family homes and when I say single family I should qualify that like we mean fully detached but you know if it’s a semi- detached town home like those kinds of properties ideally single family if we can and that just became like our our thing we would just buy resale and um yeah that’s what we learned in real estate and then when we when when we went off to start Rockstar it was really just because we had no more money to buy properties ourselves so we thought okay well we
(26:03) have these real estate licenses that we got to bypass Realtors MH and uh why don’t we just use this license to try to help other investors because this is going to sound crazy irin but in 2006 and 2007 there weren’t a lot of Realtors who worked with investors yeah I remember those days yeah there you couldn’t find anyone so most books most books taught to not work not yeah don’t even yeah yeah if it was a real estate book it was like investors asked too many questions you don’t want to deal
(26:28) with them and The Brokerage that we first went to in Oakville they didn’t they told us we were going to fail when we told them we were going to work with investors they didn’t think we were going to succeed at all well because also add to that most investor books that were training investors like write a 100 offers yeah and that was the books I WR I used to do that I used to write all those offers and I used to piss off all these Realtors to win one yeah and and I would say things like legally I know you must present my offer I know
(26:55) you must present it I legal legally I know you must present this and then I flipped and I got my license and then I dealt with these investors and I’m like oh God yeah you don’t realize the politics of of real estate is that you’re trying to keep relationships with other real estate agents so you don’t want to piss them all off with your crappy offer yeah exactly someone off they may not ever talk to you again I’ll never forget I found a single family home in Burlington that I couldn’t buy
(27:18) Nick and I didn’t have the money but it was it was a single family home in Burlington for it was I I want to say like 283 285 if you could believe it 283,000 and remember telling this investor oh my gosh I found the property it’s it this is the price and here’s what you’re going to get and rent on this property this thing is a winner and he had read some real estate investing book where he had taken the purchase price of the home and divided it by the property tax and the ratio that he was came up with he said yeah he said in the
(27:47) book that if the ratio of purchase price to property tax was this that it wasn’t a good purchase and I remember it just finally hit me I’m like wow some investors just speak with cra crazy you know some crazy ideas and then I thought oh my gosh was that me like back in the day cuz I probably said some things to realtors that just sound the 1% rule or yeah yeah well the 1% rule if you could get the 1% rule that was like that was crazy that’s what got us into student rentals because they were hitting the 1%
(28:16) and we’re like holy smokes back in the day yeah yeah yeah but anyway that’s so yeah so our personal journey is heavily influenced by the early 1990s and that real estate crash lasted property prices went down for six years so um that heavily influenced us and just guided us to starter homes the resale Market super boring and over the years people have come to our faces and told us you guys don’t really know how to make money in real estate you have some those people yeah you have to be doing this we’re now
(28:44) bankrupt oh really yeah and it just never even phased us cuz I always just thought like well this is my journey that’s your journey this is what’s working for me I’m doing the math on these things I like what this you know does and we’re going to stick with it and our accountant really early he’s since passed away but he was a mentor to us I’ll never forget he said that when he was younger him and his accounting buddies would look at businesses and as businesses would grow some of them would
(29:06) grow almost exponentially and they would always admire those people and those businesses but you know now later in his life as he reflected back with his accounting buddies they realized that it was the turtle who wins the race that a lot of the businesses that really ramped up some revenues that wasn’t really a sustainable thing it was like either they you know a got lucky or B were not doing something appropriate and they the revenues really Skyrock rocked but the business itself wasn’t built on a bed a
(29:35) Bedrock of a solid foundation and they came to learn that like oh the people who just do things at a steady Pace just year over year over year at the end of the day tend to win most often and that also stuck with us and we’re like you know what these little starter homes they’re the turtles yeah they just you know day in day out they kind of work away for you and at the end of the day they’re not the most exciting but they’re likely going to you’re likely going to survive the journey MH I was
(30:01) just reading an article about looking back on GE and that actually fits into that as well when Jack wal was like he was like the go he was he was like the Elon Musk time I remember right and then then I I remember I remember when GE Capital started and this is exactly what you’re talking about GE Capital started to finance their customers to buy more of their product yeah was that what it was yeah so it’s like inflated so like yeah we’re number one or number two in this in this and it was vertical but
(30:30) we’re we’re feeding it yeah yeah yeah yeah yeah it’s like they had control of the Monopoly board and the bank so they just threw in more money into the board sounds sounds familiar it yeah that’s that’s oh sorry I want to touch back go back to your the the the property your your father bought what is it worth today just yeah I haven’t looked I haven’t looked that in in years I guess it if I have to guess it’s at Miss Saga Road in Eglington in missa over 3 million somewhere yeah it’s probably
(30:59) something like that yeah yeah four maybe yeah I should go look years ago I kind of like blocked it out of my mind for so long because it was such a scar in our family but um yeah and the turtle would have won eventually if you could hang on yeah if you just held on and that’s the thing like if you can handle the leverage the whole key to getting ahead financially is use to me is in the existing Financial system is to use leverage and then be able to you know smartly manage leverage and if you can’t handle the leverage it’s the market
(31:30) telling you oh you weren’t too good at this game and we’re kicking you out but if you can manage The Leverage you’re likely going to get ahead I mean you know I always look at real estate I’m like a real estate as an investor you put 20% down historically in the Toronto area real estate will appreciate at 7% a year 7% on a 20% down payment it’s 35% return and it’s a good way to financially outpace the currency depac in this country and it’s a good way to get ahead financially but if you overextend yourself with that
(32:00) leverage and you can’t manage it you get kicked out of the game mhm it’s like a reboot so it’s much tougher market today I was actually talking to a a Toronto agent friend of mine he was like he’s he’s he’s doing the math in his head he’s an engineer by trade but he’s real practice as a realtor he was telling me to cash flow on a downtown Toronto condo you need to put down 50 to 55% just to cover the hard costs so mortgage taxes Insurance condo fee I’m like that’s a lot of money to put down mhm and then
(32:28) other things happen tenant turnover lease fees bad debt right repairs and maintenance Property Management all those things happen property tax and Toronto’s increasing what 10.6 10.9% or something I think with the threat of 16% if the feds don’t kick in some money yeah what could happen yeah it’s an election year yeah they probably W yeah they’ll probably pay it’s election coming soon they’ll probably pay so so what what should investor do today based on your based on Rock philosophies I think I’ve just heard
(32:57) that story like I’m 51 years old now I’ve heard that story since about 1998 like in 1998 property prices had gone up um for two or three years and somebody told me oh my gosh like you got to be careful with the real estate you know property prices have gone up now two or three years they always go down because if you grew up in the90s you were used to property prices going down then I remember in the tech boom of the early 2000s people were like oh tech stocks are where the money is real estates way
(33:22) too hard and I was buying student rentals then and you couldn’t convince anybody to buy student rentals everybody was like you know Cisco Nell pets.com like that was the that was the era.com yeah that that was the era then that kind of crashes down greenpan lowers interest rates real estate catches a bit of a bid and then 2008 hits and people in this country were convinced real estate was going to crash we started RockStar at that time and people were telling us oh my gosh are you seeing what’s going on in the in the US it’s
(33:54) going to collapse here in Canada and then in 2017 similar things you know prices came down and right now interest rates are High um so it makes it quote unquote more difficult than in the year 2001 when interest rates were lower so I guess my message to anybody listening that’s going to go into this is you have to understand that real estate and our money game now is very cyclical cyclical every three or four years there’s a big amount of debt in the world that’s getting refinanced and and in between
(34:24) those times things get a little wonky so a lot of new debt came out in the pandemic our interest rates were really low um to kind of create a little bit’s under selling yeah a lot to create a lot create a lot of debt and then inflation gets hot interest rates go up everything gets a little kind of scary and then we’re hitting a Time whereas if I had to be a you know if I had to place a bet on where I think interest rates head in the next year it’s going to come down and it’s going to take some pressure off
(34:51) things to make that condo example that you were saying to make it cash flow a little easier because interest rates are going to come down and have no crystal ball I have no guarantee to that I just mean over the last 20 years this is what I’ve seen it’s like interest rates kind of trend up like in 200 2008 interest rates no one remembers but interest rates we were getting some mortgages in the high fives close to yeah close close to 6% and people were telling us Tom these purchase prices I’ll never forget
(35:17) this Hamilton property at $225,000 no more cash flow no more cash flow game’s over and interest rates come down prices go up and you know the party kind of rages on so I don’t know if this is the end of real estate for the Toronto condo or for the resale Market in Toronto I just think we’re in one of those Cycles where rates are high and if your formative years in real estate are 2008 onward all you know is cheap money cu the Cycles have been so so high with debt and so low with rates that that’s
(35:51) all you know and we’re finally coming to a place that’s kind of outside of the you know the recent norm and it makes it difficult for people if the numbers don’t work and you can’t handle it then I wouldn’t buy but I don’t expect that to be the case for the next 10 years there’s just too much debt in the world for rates to not come down so I got to think things are going to get a little easier again MH on the same side my friend that was telling about the condo he he Al telling also telling me that in
(36:20) downtown Toronto duplexes are on absolute fire sure right CU people are want and these are these are house hackers these are these are folks who are planning on living in one of the units and they need the income from the other unit to live and like oh God thank goodness my duplexes have taken a haircut in the last few years yeah yeah yeah yeah I think it’s just everything goes up and down like Nick and I don’t look at real estate like any property we’ve ever looked at we thought would we would we buy this if we had to hold it
(36:49) for 10 years at a minimum right even if we were doing rent to own stuff which we were ideally selling to a tenant buyer at the end of 3 years um which didn’t happen but we had to plan that it if it did we were going to be okay with it and if it didn’t we kept the property so we’re going to be okay with it so the way we look at it is like do the numbers work for us in our lives right now could we hold it for 10 years because when we were younger I needed the cash flow so the numbers that we’re talking about the
(37:16) Toronto condo and different properties around Toronto right now if they don’t cash flow it’s not really appealing it wouldn’t be appealing to the Tom that was in his 20s but as your financial situation changes someone might might want to buy a Toronto right now doesn’t matter if it’s 40% down 50% down because they might want a condo for their family for their son for their daughter for some reason they’re in a different Financial place and the number is not a big deal so I think you have to match
(37:40) the finan the conditions of the real estate market to your current situation are you in are you young willing to take on a lot lot of Leverage and a lot of risk or are you a little older and you’ve accumulated some assets and now you’re at a different place in life so it’s just there’s just no one answer but I do but I do know any investor who looks back always says it’s harder today yeah like I’ve never met the investor there still harder today it’s still harder today never even when price is
(38:08) down it’s still harder today the banks change their rules the down payment rules change the qualification changes but things always change I’ll give you an example in London Ontario where we have a lot of investors who buy student rental properties around Western they’re about to change the bylaw as we speak right now to go from five bedrooms up to allowing seven oh great so now we were in a situation where people were like oh well the numbers don’t really work yeah five bedrooms I can’t earn enough even
(38:33) though uh per room up there it’s common to get a th000 we’ve seen $1,200 a month um in student rentals but now if you can add two more bedrooms we we know a bunch of investors who have unfinished basements that weren’t finished because they couldn’t legally add two bedrooms now they can legally add two bedrooms and it’ll get another $2,000 a month on that property what’s that going to do to the opportunity there probably increase it so I just think you can’t take a moment in time and make a definitive
(38:56) answer that this is how it’s going to be forever real estate’s like a changing game so is is uh I want to get to I want the listener to know what what properties they should be looking at is the London student rental an ideal for anyone to get into yeah okay so also another thing want to clarify as well is like a high amount of Leverage is different for different people to me like to me a high amount of Leverage was 20% down cash maybe even he in a schedule in a schedule A Bank mortgage for cheap that was high leverage for me
(39:29) versus we see all these people out there with first private first private private first for 6% private second for 12% oh God yeah promisory note for like 15 177% yeah right and also I want to throw in I’ve been saying this on the show a couple times now we used to call these hard money loans we got away from it it’s true yeah we don’t use that language as much yeah because I remember a good friend of mutual friend of ours like he would use the term when he when he was building his Mansions when he’s
(39:57) he I have hard money loans versus people like BR I priv private I private borrow yeah like no it’s it’s hard these are hard money loans that’s sorry I can I digress back to uh what is a best practice investment in today’s market um so on okay so first you just give me a flashback I remember when Jim flarey the Finance Minister in Canada briefly allowed 0% down payment and 5% down I don’t know if you remember four investors for declared rental properties the cmhc fee was like astronomical but I
(40:28) can’t crap on what you just said too hard because when that came out Nick and I were like all over that we were like wait a second you can do 0% down and if the numbers worked and some numbers still did work at 0% down your cmhc fee was astronomical but anyway you just I couldn’t qualify because already had properties so they would never give that to me it it was tough yeah yep and um I I tried though yeah of course why not yeah 0% down it’s like an infinite return even five yeah um but for today
(40:57) for for I mean it’s it’s a tough question to answer today because you you know whatever answer I give has to be mapped to somebody’s short-term objectives and their long-term goals like look at your all of our short-term objectives mine and yours like look at yours right now you’re making a change in your portfolio like it always is kind of Shifting but if somebody I’m a different age and different yeah you have different things bother you in a different way at this age and at this stage of life than it did a few years
(41:21) ago so you want to adapt accordingly and you know to each their own of course but I would say that um to anyone looking at the Ontario market right now what has been popular if let me answer it that way right now has been student rentals because student rental demand is always strong and I’m not talking about the the recent massive influx of international students the big universities always have demand so McMaster Western Queens these places always have strong strong weth to yeah like Western has like last time I
(41:54) checked was 37 38 39,000 students if you add in faculty in the hospital there we’re talking at like 40,000 50,000 people and they have a college in town too to put more pressure on that market yeah Fen Shaw’s there as well you’re right so um if you can buy a property around Western in good Economic Times or in bad Economic Times there’s always students and uh those properties make a lot of sense because you also get to go to market rent quite frequently so if you rent out to a group of students
(42:23) after 3 years usually that group is moving on you know within 2 years 3 years four years usually you’re moving on to get a new group of students when that happens you can take your rent back to whatever Market rent is and as a as a way of an example my son is just leaving Western this year he rented out what I would call a slummy house we don’t own this particular house uh for $615 a month utilities included three groups of students came out for next year just a couple weeks ago they took it on the first day for 925 a room plus
(42:53) utilities 925 a room plus utilities he was renting just a few years ago we signed that leasee or he signed it at 615 utilities included right so like 50% increase over 3 years it’s massive so student rentals are interesting and now if they’re changing some bylaws and you can add more bedrooms legally in there you can do it properly and I mean making like safe clean functional properties so student rentals can be really interesting and and I would say to anyone looking at real estate that could be a way that you want to look at it or
(43:23) you want to buy a property where you can add a duplex a second second unit or a single family home on a lot that in the future you could drop in a g Garden Suite a laneway suite or change the structure of that house because going forward like look what you said about Toronto with like duplexes being on fire I think we all know there’s going to be a continued housing shortage in this area so that if you can add on to the property and add out their income streams those are huge so you know if you can go to the Niagara area right now
(43:51) and find a property where you can duplex it legally and then potentially even add a third unit on the property m at some point to me those are gold because if you look at the population growth in Canada as much as Canada has problems I don’t think we can deny like Canada has problems has government problems Canada has There’s real estate problems there’s government problem there’s problems at all levels in in Canada and all over the world too all over the world China like us us with their issue in Texas the
(44:18) whole world we’re we’re going through a moment here for sure but it’s crazy times it’s crazy it’s yeah bitcoin’s over 50,000 again these are historic times man yeah ride Bitcoin down to 16,000 or whatever it was and come back has been been a journey but on the real estate PR keep me focused here don’t don’t throw dangle at the Bitcoin topic there um the the Niagara region like if you just look at fundamentals like the population growth of Canada is going to continue whether one way or
(44:44) another through International students legal illegal whatever it is you know we’re getting more people in this in this country no way dips below half a million ever again yeah yes we’re going to have yeah so the population growth a big percentage of population growth in can of the legal immigration that I track 44% comes to Ontario so we get like a huge amount in Ontario within Ontario a huge amount of that comes to the Golden Horseshoe Niagara happens to be positioned against you know the biggest economy in the world um the
(45:12) population growth is going to expand they’re going to put a new casino in Niagara there’s two new factories going up Welland is getting a battery Factory from I believe it’s a South Korean uh company don’t hold me to to to that but there’s a new battery plant going to go in and well and there’s another new Factory that I’m forgetting the name of that um plans in thoral there’s a new golf course I believe being built in the Niagara region so you could just see like that area is going to just continue
(45:36) to expand continue to pill in population growth so if you didn’t want a student rental I would say hey check out the outskirt areas of Toronto specifically the nigar area would be an interesting way to uh to get into real estate for sure I’d throw in as well like a basement apartment strategy Garden suet strategy would be wonderful near a university as well yeah that would be great those are really hard like in my my experience those are really hard to find a lot that can handle that or a property that can handle that but man
(46:03) you got a you got basically an Ontario Golden Horseshoe unicorn if you can do that oh my gosh and I know some people who have built like nine unit student rentals by these universities as triplexes so they can convert it to like a proper Triplex or they can rent it out as three three-bedroom student rentals and with a lot big enough if they wanted to they could put something else in the back so you’re right yeah that’s a unicorn if you can find that kind of thing and the bank loves it they’ll Finance it properly yeah like versus my
(46:29) student rentals yeah well back in the day get the best back in the day yeah student rentals were not like this back in the day like especially around McMaster like do you remember going into some student rental a friend of mine had a room when I was in university we went to visit him to get to his room you went past the furnace and there was like a curtain hung off like I guess from the HVAC ducks that you kind of pushed to the side and now looking back at that time we didn’t even think anything of it but now looking back I’m like oh my gosh
(46:56) this guy’s room yeah he was on the back side of the furnace room just with some carpet and a mattress on the floor that was his room that he was renting out so McMaster area was wild it’s better now it’s come a long way I’m sure there’s some of those properties still out there I remember seeing like Bas and bedrooms with no windows yeah people had just a room there was no windows like like that’s wild wow and that was not that uncommon and the low ceiling like 6 yeah I remember the low ceilings I remember
(47:26) one bedroom in a basement that we were looking to buy this property we went into the basement and the bedroom um I think it had a window but you’re making me think maybe it didn’t but it had this little kind of doorway that was maybe only 4T tall and the ceiling was slightly crooked like it wasn’t a proper doorway and and it was maybe 4T long so it’s was 4T tall and about 4 ft long and you just kind of look down and it and you there was no door it was just this little weird hallway thing off the
(47:49) bedroom and you walk through and on the other side was a bathroom and like how did this like how is this bathroom here how does this exist exist so uh and you wonder why we have rental licensing coming fromon area yeah yeah by the way we we we dug up one of Nick’s houses by McMaster because we didn’t have the money or he didn’t have the money I wasn’t involved in this house to pay for like a Waterproofing Company so we dug it up by hand he got like six of us out there and we dug it up by hand and then uh he
(48:20) sealed it all up and we threw back all the dirt and uh you know he sealed the cracks but in one area where they punched a pipe through for something to do in the basement maybe they’re adding a kitchen somewhere or something they forgot to seal around the pipe no so a couple weeks later there was still a water leak and they had to redig back down anyway we’ve seen a lot of stuff do you guys still have that hose yeah Nick still has it yeah yeah so speaking of Nick famous quote from Nick is uh what is it those who deal with the most [ __ ]
(48:52) what is it win win thank you thank you cuz we were talking about like stages of career you talked about the you know our neighbor to the South is world superpower and i’ I’d actually argue the superpower by far with with we don’t even know how bad the evergr issue is and not just evergr anyone who’s behind evergr as well who is the number two three four building biggest Builders how many vacant homes are there in China we don’t know how bad this situation is so I think I think things are I don’t know
(49:20) all this you you read the brick talks stuff stuff too I don’t know how much you believe like bricks will actually catch up and actually be a significant thing like China has so many cracks in their economy it’s just nuts but anyways anyways end of the day not that much is going to change with the US there’s still going to be even if someone passes them there’s still going to be an incredible world superpower lots of jobs sure and so like everything combined I’ve done I’m done with dealing with
(49:44) [ __ ] right I’ve got I’ve got a B officer I got call back because she’s because she’s calling me because I have a I have a duplex that’s close to Mohawk College okay so I fall within land uh landord licensing okay got it I’m like I so I have at least I have three properties in Hamilton that will qualify into the current pilot for for rental licensing so and that’s just not worth it to me I’m I’m tapping out why do you is there a lot of work you have to do on that property no this is why I’m partly
(50:14) pissed these are legal duplexes like my my Hamilton Mountain property so why is she calling you CU because rental licensing if you’re in the W if you’re in that Ward you you have to go get rental licensing okay got it you don’t have to invest in the property you should have to I may have to do some okay got it uh but again though these my basements were done with with permits City’s already City’s already signed off on everything right I why do I need an HVAC inspection in Esa I haven’t done
(50:40) anything right and all the just all these extra costs I don’t want right so I’m done I’m done just I read too much news so I’m I’m done dealing with [ __ ] and we know where you’re going you’re wearing the Hat of where you’re going yeah yeah cuz oh man I loved it I’ve never been to Texas before you’ve been you’ve been you used had to travel a lot especially when your corporate work uh yeah y Dallas San Antonio Austin yeah I loved it my trip to San Antonio and Austin I just loved it I had no idea
(51:07) pulling up to a gas station we were just talking about this pulling up to a gas station having brisket just ready at the gas station there with picnic tables outside and going getting some fresh meat and eating it there amazing I remember being the whole the whole foods whereever Whole Foods is originally out of Austin or San Antonio I forget I think it’s Austin I don’t know but I went to whole see a lot I didn’t see a lot of presents from Whole Foods okay well we went to the Whole Foods like flagship store and their Hot Table had
(51:29) this like fresh barbecue and you know they were just selling it by the pound so you could walk up there and just say how many pounds you wanted you would wrap it in paper and you could just go outside and eat it it was like oh my gosh this is amazing yeah it was sunny and warm and uh it would be nice on a day like today it would be yeah seemed they seemed like a great place I could I could definitely see the attraction yeah cuz we’re just talking my single family homes before recording I just got an email u a property I I’d liked on
(51:56) realtor.com so that gave me a price update they just dropped their price by 25,000 from 300 down to 275 oh North atin only for 275 in Ontario not even Tim actually maybe Tim’s Ontario 275 and I think I can rent it for I may have to fix it up a little bit but I think I can rent for 1900 like these are the old these are these this is like Hamilton Mountain 10 go numbers it’d be interesting to look at the appreciation in those areas just to see and what you personally expect I think we get a strong appreciation in Canada
(52:30) because of the concentration of population around a few major centers whereas the US you just have a lot of choices even in Texas you have a lot of choices but then you can choose Florida and have a lot of choices so we’ll get to Florida in a minute yeah but it’s just I’m I’m curious to what happens to the appreciation in those areas just because we don’t get the concentr you don’t get the concentration of population like you do here um not that that’s good or bad and that might not be
(52:53) important to you but it would be something to look at like historically what happens in those areas around appreciation because one of the things I like specifically why I targeted Austin was because the prices have already come down at least 20% and realtor.com picked Austin to come down the most of the country so I’m looking at like Warren Buffett style like Austin pretty much is on almost every top 10 list Texas is obviously on every top 10 list right so this is capital tons of jobs prices are come I’ll probably get
(53:23) something from from like I’ll probably get the house if I bought something today i’ probably get like at least 30% off the peak I’m surprised to hear the prices have been coming down recently with just all the demand of people moving into Texas so what what is driving the is it just a interest rate moves there that have made affordable I think just went up too much went up too much too fast okay so it’s a bit of a correction yes this is a correction so I think okay so over 10 years it’s up just
(53:45) recently it’s down oh yeah just like about 2021 is is when the decline started yeah so probably declined in 2008 during the financial crisis came surpassed the 2007 High awesome yeah’s there’s there you been com mother sh no that’s R’s com love it it’s highly offensive as long as you like offensive comedy I love offensive comedy especially Asian jokes I just die just bring on come pick on me anyways uh but I’m uh again just I I completely agree with your point because America like
(54:19) there’s so just like greyber talks about like in the states like there’s so many cities with a population of 2 million or more in the states not like Canada shocking yeah there’s so many options for to move around to where to get a good job which is why uh the property I’m talking about that’s 275 it’s in uh Round Rock which is it’s the neighborhood North North Austin and it’s kind of Northeastern and so about 15 minutes down the road is where the Samsung plant is being built to build microchips oh
(54:48) awesome yeah so it’s a it’s a 4 billion dollar $4 billion investment they’ll have 2,000 full-time manufacturing jobs wow and Sam you know being a Korean company they’re back in Korea still recruiting suppliers to come back to come to Texas and support their bill awesome so that’s how I’m trying to defend and try to be offensive and defense at the same time makes sense so that’s and then that’s my thesis for the entire States as well so for example like Phoenix I’m looking at as well
(55:13) because that’s where Taiwan semiconductor manufacturing compan is open right the world’s largest microchip manufacturing they make for Apple you and I were both Apple people right so then that’s how yeah that’s how I’m defending mine and and and but I’m not I’m kind of preaching to the here about there’s us there’s advantages to the USA investing cuz I know you you you well before I was looking at the US you’ve been looking at the US yeah I think the way to me the biggest thing it’s the
(55:37) everyone’s going to be different to me the US presents a currency play because the US dollar to me is going to hold its value like I mean we’re just seeing it around the world that Fiat currencies are losing value one after another they’re losing them faster and faster the Euro last 10 years has been terrible the Yen oh my God the yen yeah wow for anyone wanted to go on vacation get a cheap vacation go to Japan cuz the Yen’s on sale it’s so cheap yeah I was just telling Nigel he’s got to take me um but
(56:06) uh the uh we were just there to go yeah yeah cool I would love to go um so to me it’s just a currency thing like if you look at the Canadian dollar if you have just Canadian dollar exposure and you don’t have any US dollar exposure and that’s important yeah you may want to consider especially if there’s another generation in your family that’s going to hold real estate you may want to consider getting some us exposure to some property just for the the US dollar exposure if it’s just that um there’s
(56:33) all kinds of other things you need to take into account um but to me that’s just the big picture way to look at it that if you just have Canadian dollar exposure in your life um getting a property in the US would be one way to get US dollar exposure and I think that’s a probably a really good financial decision over the next few years I’m also a Bitcoin guy as you know so to me Bitcoin is the apex predator in the room and everyone should have exposure to bitcoin but that’s a big leap for a lot of people so for them on
(57:02) their own Financial education and financial Journey if they want to get exposure to something beyond the Canadian dollar then at least consider getting us exposure and for Canadians getting an investment property in the US is like a pretty straightforward way to get it MH and I know rockar is a big fan of the build to rent model in in Florida I think we’re more a fan of the people we know like real estate to me yeah team is incredibly important yeah like again we were talking like there’s all these groups and they built poor teams and
(57:31) they’re bankrupt now it’s just completely sad yeah yeah and I think over the years people have asked us for specifically Florida just because so many Canadians vacation there um so much warmer than everywhere else yeah even especially important in the winter that nowhere else in America really is that warm yeah yeah yeah I was just down in Naples and uh nice it’s it was really yeah it makes you question what hey what am I doing up here in Toronto in the winter but anyway um the uh you get the US dollar exposure
(57:59) and uh I forgot what I was going to say there oh the team um the reason that we like Florida is we just know this you know we’ve known Jim now for 15 years we didn’t know the full scale of what he’s doing down there and uh they’re building brand new homes every year in the scale of five six 7 800 and they’re building per year and they’re building them with a tenants in mind so they’re building them so that they know they’re going to rent them out so that the property management can be the easiest thing on
(58:27) them so they’re building them with certain kitchen cabinets and certain counters and certain floors and you know they’re building them with uh roofs that have the proper tie-ins for hurricanes they’re building them at the right elevations so for a Canadian with a lot of variables to deal with when you go into Florida um this is one are a lot of variables what people expect yeah oh yeah for sure this is a a team of people that we feel we can hand off people to that are building the home they’re
(58:51) property managing the home they are handling the maintenance on the home so you’re you’re kind of covered right there’s still risk of course um but that’s what finally got us into Florida it’s like oh we finally found the team that we can say hey irn you want to go down there all right here’s the guy we trust go see him his whole team is going to take care of it they’re managing like 2200 units they got it all figured out now we went down and did a tour to check it out firsthand ourselves multiple
(59:14) times n and I have been down and uh yeah it’s been great and just to when I first saw uh the number of homes they build a year I thought it was a typo I thought there was an extra zero yeah yeah cuz they’re a home builder they’re like a home Builder that used to build subdivision homes they’ve just dispersed to do rental properties in different communities around Florida cuz to give context they would be a top 10 builder in Ontario based on their volume maybe top three yeah I don’t really know I
(59:39) guess maybe they would yeah well just think like mamy can’t build 800 c a year could they I don’t know don’t put anything past mam I don’t know I drove I drove through a madamey subdivision in Florida oh cool and they’re Canadian company yeah I didn’t know they had no idea they expanded right right right unless I miss saww but I’m pretty sure it was the same logo with the same company name on there and these are houses I removed the condo thing cuz it’s way easier to build a verticle like
(1:00:05) to like H these are house builders like that’s an incredible volume yeah building uh the vast majority are infill lots so they’re getting infill lots in existing communities and building brand new homes in there yeah because my context is Steve Ford we know a rockstar member like he builds 100 houses in the season his the Builder they works for right and that’s a whole season like so for to do hundreds hundreds yeah it’s kind of was the appeal to us is that these guys are like the real deal they’re not just building one home
(1:00:34) a year and selling it to an investor they are really doing this for that’s their livelihood that they’re in this business right yeah incredibly end to end yeah right here’s a product we’ll manage it you know it’s brand new yeah yeah yeah and then Canadians get some US dollar exposure I don’t know we’ll see how it goes I don’t know I’m question no LTB right now there’s no rent control I mean real estate you always have to like the the successful real estate investor just has to roll with the punches like
(1:01:02) as you see it with bylaw officers calling you and stuff you just you don’t know what’s coming um so yeah no rec controls the property manager we were speaking down there she was shocked when we talked about our landlord board up here she basically at one point said oh you’re California and we’re like oh is that what you would think of us and uh she said there 45 days and their cash for keys there was like $200 which shocked us but the reason it’s so low is because the tenants know they’re going to be out they don’t like
(1:01:30) to stand on so yeah they you don’t have to pay much to get a tenant out who’s not you know giving you trouble or not paying you can just go up to them and say hey I’ll give you 200 bucks and you’re they they leave so yeah just a very different Market different culture yeah the relationship between tenants I’m pretty sure I don’t know if I remember this accurately I’m pretty sure like the tenant board there like you’re going to the proper Courthouse yeah there is no tenant board you’re going to
(1:01:54) like Court same law law system as everyone else yeah and then um you know yeah there’s still stuff to learn different areas different counties and you know there’s always there’s always new things as an investor uh to learn about and the different rules down there but the 45 days um was really interesting to us and when she told us that to for a tenant to renew she had to give them a letter allowing them to renew the lease and that to me was shocking because you know here if someone goes beond Le goes to month to month and
(1:02:26) there it was directly the opposite so you know I thought that was shocking yeah cuz here as as a commercial landlord like the tenants usually like like pushing you to resign a new lease yeah right versus tenants residential like I month to month automatically yeah I I I suggest all Canadian investors speak to an American investor see the compare differences for sure right yeah cuz like Florida Texas Arizona there Georgia there always going to be the Carol it’s different there is no separate division of government or or or
(1:02:57) laws that are specific to protect tenants and as I learned more even within the state different counties can have different rules for rental property so yeah you just need an experienced team yes you do and even hear within within like Georgia for example certain counties are are they’re more backed up than others or for tenant landlord issues so yeah it’s it’s still it’s still very area specific for sure yeah yeah so can we talk about Bitcoin sure I PEX predator in the room cuz I remember when I first met you
(1:03:30) you were the first person to introduce gold to me as an as the as a a store of value not as an investment I think people need to always understand that like like is that’s how is that still how you position Gold store of value I it’s losing it to me but yeah that’s what it was it’s losing it well if you just look at the ETFs that just came out the the gold ETFs are getting uh they’re losing um investment if you look at just the amount invested in Gold ETFs as the Bitcoin ETF that were’re just five or
(1:03:57) six weeks in they’re coming down in in uh the amount of Investments they’re holding and the Bitcoin one’s like exploding right so is that just partly a shift people are like to raise money for the Bitcoin they want to divest some gold I think so like a lot of investors to me if they were investing in gold they were probably in the store of value Camp because why else would you have gold unless you thought maybe it stores your value and then there’s a to me what’s a better store of value Bitcoin
(1:04:25) comes out and now I can buy as an ETF within my 401k if I’m in the US which I couldn’t until this year just a few weeks ago I’ll reallocate like I’ve seen the you know you look at the comand annual growth rate of of Bitcoin and as January 28th 2024 this year if you go back four years it’s 46% compound annual growth rate like that’s that’s you can’t deny that that’s an incredible growth rate so like if you a sophisticated investor just looking at numbers and you had your gold and you
(1:04:56) had it as a store of value and you consider Bitcoin a new store of value you’d probably want to reallocate some of your gold into Bitcoin and I was a big gold guy because of the store of value thing for sure um but the store of value like the history of money is that to me technology is constantly changing what money is and we are at this weird point in history where technology is in the middle of changing what a good money is again and most people won’t see it until 20 or 30 years pass and they’ll
(1:05:28) look back on this moment going oh my gosh like I guess Bitcoin really did do something interesting so business case is there for it now it does seem like we’re you know since came out in 2009 we’re now 2024 I remember I thought it was a tulip and it was going to die I remember when it went yeah I thought I would dismiss I’m like what is this garbage like I’m I’ll come out with the Rockstar coin how about that you know I just didn’t understand the characteristics of Bitcoin at all I didn’t understand that there was an
(1:05:55) asset a digital asset and that it was a network so I didn’t understand that Bitcoin was really two things in one um and I just dismissed it and then in 2020 is when I went down the rabbit hole and I freaked out and I realized I was wrong and uh started paying very close to it attention to it and now I can’t stop thinking about it because I I do believe it’s the Apex monetary predator and I do believe that it’s going to be a network that sucks in a lot of value and when Network effects begin they are very difficult to stop so by
(1:06:29) way of example I would share with you Voiceover IP Voiceover IP came across with tcpip or the internet and it almost destroyed the phone companies the phone companies as they exist today the mobile phone companies only exist because they sell data they’re not selling anymore like Bell’s not selling landlines anymore so this new network came in and uh destroyed an ex existing model and those businesses all had to change like dominant businesses with with all you’re talking about Bell Canada Rogers these
(1:07:03) companies all had freak out moments that had to change and um I just see it now happening on the monetary side that there’s a network an open- Source protocol it’s permissionless The Ledger on it is immutable um it’s changing things again where now the banking system is going to have its freakout moment as more and more monetary value gets sucked into to this network and to me it seems inevitable I know for many people that would sound like it’s crazy but to me it seems inevitable and that’s
(1:07:33) why it’s kind of captured my interest and then if you look at compound annual growth rates now with some history it’s just remarkable like it’s it’s kind of it it it makes you question like what are you investing in like why aren’t you paying more attention to this thing you know the whole Jour my own journey is like your life your terms you know we talked about Rockstar and stuff but really like I just want to live my life on my own terms and leave me alone mhm and that’s what got me into real estate
(1:07:59) now there’s this other thing that’s just kind of got my attention and you can’t stop thinking about it once you kind of go down the rabbit hole or when it’s dangerous it is dangerous suck you in it’s a Time suck yeah I don’t know you’re pretty you’re pretty good defending your time but that one’s that one’s probably a tough one that one’s tough especially now cuz I must be yeah like I must be thousands of hours in now so so yeah it’s it’s a tough one it’s a
(1:08:22) tough one yeah it’s actually one of the it’s sounds stupid I say it this way it’s one of my biggest disappointments of Co because the lockdowns meant that we couldn’t all be in the gym together yeah and then when I got back in the gym you guys were already like like a couple thousand dollar ahead of me on bitcoin I’m like I’m like f i i loost i i had all this opportunity cost I I could have made so much more money if not for Co I remember when I had my moment I was sitting in the office because our office
(1:08:54) was open but it was on lockdowns but we were legally allowed to be open and it was me and Nick and one other person the three of us and I had the moment where it all just made sense for me and I ran to Nick’s office and I’m like I was so wrong on bitcoin we have to get into this and you’re right it was just at that moment where none of us were hanging out together um and so I didn’t see you to like I was so when you had that moment it probably like I was like four months behind like in back corner
(1:09:18) had gone around yeah that was a pretty important four months yeah damn it so damn you okay it’s got a lot more to go every you’re good you’re good uh where can where was where’s a good starting point for anyone to learn about Bitcoin CU I you were the one that got me to read the Bitcoin standard by yeah I guess it just depends what your background is like yeah if you are into economics and money and you have a little bit of History um reading about that stuff the Bitcoin standard by safine amuse is probably the best start
(1:09:46) the first four chapters or 72 pages of that book laid down in a beautiful case uh for it if you want a shorter thing there’s uh a medium article by VJ boyapati and it’s called the bullish case for Bitcoin so if you just Google like the bullish case for Bitcoin VJ um you will find that Medium article he actually turned it into a book now as well but it’s it’s originally a medium article that is an easy read that lays out a wonderful description of what Bitcoin is both the digital asset and the network component of it and how to
(1:10:17) think about it so I think that would be like a really really good entry point into it and then of course Jeff Boo’s book really kind of connected the thoughts for me because he doesn’t talk about Bitcoin but in his book the price of tomorrow he starts outlining um technology productivity gains and how that works in a Fiat based debt-based money system and once you read that book it really connects a lot of things together and uh that that to me is if you’re not into the money side of Bitcoin but you just want to understand
(1:10:48) what’s going on in the world with technology yeah with technology Tech yeah that that would be a good read so if you’re a tech guy yeah me too but again it’s it’s more of like a macro book in general yeah totally y I think he us word this is why we get along yeah yeah for sure yeah macro understand macro you read this I think that’s why I like Bitcoin so much is like there’s just so many layers to it it just uh yeah it’s a remarkable thing like I really feel like fortunate to be able to be here at this moment in
(1:11:18) time for sure and Bitcoin standard I thought was a wonderful history lesson of nothing else even if you don’t like the Bitcoin orrect just history of money yeah it gives you like a context or a framework of how to think about things seashells yeah uh copper coins Stones silver how silver got killed by gold yeah stock to flow ratios how do they work yeah how and the the ultimate like you know there can only be one yeah there’s a line in that book it’s page the the top sentence on page 34 is this your Bible you have like all highlighted
(1:11:46) and yeah probably yeah I’ve read it a few times the top the top uh I think it’s there’s a new edition so it might not be page 34 anymore but page 34 the top sentence on that page basically the sentence uh the you know the idea behind the sentence is you can ignore Bitcoin but it’s at your own Peril because the hardest form of money always wins yeah so it’s like you can why I said there can only be one yeah so like you can choose to ignore Bitcoin and laugh it off but just know that your purchasing power in Bitcoin
(1:12:19) terms is dying over time so you can ignore it but you’re doing yourself an injustice at this to IGN it and we’re not saying load up no you should have some exposure yes everyone should have a little exposure yes you’re laughing you’re smiling at me yeah what whatever’s right for you have 2% 5% something I don’t know it’s just everyone’s different like like we said it’s like real estate everyone’s different what’s right for me is not right for you it’s not right for
(1:12:46) whoever’s listening it’s just you’re everyone’s on their own path you know so yeah yeah I’m I’m yeah I’m a I’m a bitcoiner now can we talk about marketing sure because part so again I told I told you I I like I study both how to make money and how people lose money so I I I dig into how these like recent bankruptcies I dig into I I research like what happened what did they do how did they raise all this money sorts of things so for example like the the folks who are in Northern Ontario who recently uh going
(1:13:23) through bankruptcy credit bankruptcy protection uh like for example it’s quite obvious just actually just a little bit of clicking that they for example they bought hundreds of thousands of Instagram followers oh jeez right okay so stuff like that and like to me like I’ve been around long enough to know when someone’s bought just when they have absurd numbers of of whatever followers I guess or or yeah or some even if someone even old old school is someone that had like an enormous email database but they didn’t build it
(1:13:53) themselves I know I know they bought it right this no different but you know ever since I’ve known you and then you introduced the world the world of Dan Kennedy to me which I greatly appreciate someone just recently complemented my Marketing Systems which awesome which I largely borrowed from yeah from yourself and and this fits into the whole your whole abundance mindset I don’t know if I said on the recording yet did I say on the recording yet like dreams so big that everyone else’s dream can fit
(1:14:19) within yours right because yeah you and Nick are incredibly transparent and everything you do is basically available to we try to be yeah yeah yeah and where was I going oh yes so I’ll just say like you guys seem to have done everything the right way you only have 20,000 Instagram followers yeah yeah I know how hard you have to worked for it you didn’t buy that no no and that’s largely my son who’s taking our content and doing stuff with it but yeah yeah no we didn’t buy it no and I don’t want too much too much attention
(1:14:53) on Instagram cuz just from my own experience my email database is what converts sure for sure yeah can we talk about that is that is that still where things are is that still is still building the email database is that still a priority or is it should you focus on your Tik Tok okay so when it comes to marketing the way I think about it is remember my life’s kind of motto is your life your terms I want to live my life in the way I want to live it and marketing so why we talk about real estate and that I’m a
(1:15:22) Believer in real estate is because the leverage of real estate gets me Financial gains that are enough that are going to allow me to live life or help me at least live life on my turns the reason we talked about Bitcoin is similar reasons the reason I like marketing so much is because if you understand marketing you can build a life on your terms because I found in business very few people know how to get a new customer they have an idea they can rent a place they can create letterhead they can create a website so
(1:15:52) if you understand the principles of marketing you are like going to do what really well in whatever business you’re going to open whether it’s a car wash a restaurant or real estate investor and the principles of a marketing are to your email question to build a database of people that have in some way shape or form raised their hand and identified themselves as someone that’s kind of sort of interested in you and what you have to offer and the best way for me to get people to raise their hand and
(1:16:20) identify themselves is by getting them to share their email address with you so yeah to answer your question email is still amazing because you own the email address on Instagram Twitter Youtube Tik Tok those companies control the users that are subscribed or are following you whereas an email you own that email address so you get to email it you have to might be fight with a CRM system to like get your email out and there’s like spam complaints and different things if you’re doing it incorrectly But
(1:16:49) ultimately you own the email that’s a very powerful thing to me in business the relationship that you have have with your database is the most valuable thing you can have because there’s going to be some people who love Irwin and what Irwin talks about so much that it doesn’t matter if irn goes and starts a business that’s you know you can go start a restaurant tomorrow but you’ve established a relationship with the people they trust you and if you’re going to start a restaurant they’re
(1:17:15) going to come and eat at your restaurant because of who you are and what you represent to them so the a business owner’s relationship with their database is the number one asset that they can have it’s not the office space they’re in it’s not the name of their company it’s that and so few people understand that and an email address is the best way to build it then you can layer in physical mailing addresses phone numbers if you want to start texting people you can start doing all these weird weird
(1:17:40) and wonderful things but email is an absolutely critical way it is the best thing to be building because if you get shut down of Instagram you’re still going to have your email addresses or when uh musically when that went down I remember that was a huge such not a music guy but sure okay I believe you was but then was was what was Tik Tok before musically was sorry was Tik Tok musically before I think that’s what happened I think what that but then all these influencers they’ve lost their million subscribers or whatever yeah and
(1:18:11) then it’s on you once you have a database the onus is on you to prove to prove that you are sharing valuable information like if everyone just sped out to your email list garbage people are eventually just going to unsubscribe and you’re gone so like now I like that relationship share part it’s like oh the onus is on me the business owner to share such good value that people are going to keep interest in me and then every once in a while you’re going to ask to do business and because you consistently offer good value people are
(1:18:38) eventually going to come to trust you and with trust they’re going to come to like you and when you make an offer to do business with you some people are going to raise their hands and say I’ll take the next step and I’ll proceed to do business with you and it’s just to me the most wonderful way to do business is that build a database of people who are in your topic or area of expertise offer a lot of value follow up consistent consistently with that comes trust and the uh the person who’s reading your
(1:19:05) information or following you they’re going to like you then the ultimate sale is easier so it’s it’s just like a beautiful thing and to me marketing once you understand the principles of marketing you can go to Texas tomorrow use the exact same principles that you’re doing Irwin here in Ontario to build what you want to do in Texas and it’s going to work M just like real estate has principles to it marketing is going to have principles to it so it’s total freedom like it’s it’s it’s the
(1:19:31) biggest thing and nobody believes me and understands it and it seems like in the real estate World everyone just runs around on Instagram trying to get followers and everyone just yeah it it just seems like everybody you know what I guess the way to look at it is there are principles to anything there are strategies and tactics and in the marketing world everybody plays with the tactics everybody does like the quick new thing on Instagram that’s a tactic the quick new thing on Tik Tok that’s a tactic the quick new thing on Twitter
(1:19:59) it’s a tactic very few people have a strategy around their marketing and very few people understand the principles of what they’re doing and I think what Nick and I have done over the years is we tried to understand the principles of what works in marketing then Implement a strategy for it and only then choose the tactics we’re going to use in that strategic implementation I think the I think that where people most fail is like anything we like we call it the content treadmill yeah like the regular communication with your email
(1:20:29) database minimum a week yeah uh I think we’re two I think you guys are like three times a week and that’s that is the content trial you have to keep MH keep in touch with your database and then some some of these people you call as well so like oh that’s work like yes it is work but this is how you get results yeah it’s called sales yeah if you have a business like if I had a Subway sandwich shop that was next to subway station that was was really busy I probably didn’t have to do the content
(1:20:57) Triad Mill because people are going to be walking by every day and some of them are going to be hungry and they’re going to sell them a sub that’s something corporate has done your marketing for you yeah there’s that there’s that to yeah so but let me but even if I wasn’t to go to the corporate level if I was just a noname sandwich shop in front of a busy place I’m going to get some business but when you’re a service-based c uh company and you don’t have potential customers walking by your
(1:21:20) physical location well then you better be doing something to get attention and that’s why you have to produce content so you do a really good job at this you’re putting out emails and podcast I know you are in videos and you’re hosting class and you’re doing all these wonderful things and that’s how you get people to see what you’re doing so it is a Content treadmill in business especially service based businesses but there’s no really other way to get people to kind of walk by your store
(1:21:45) unless you’re putting out content if you’re putting out content you have people kind of walking by your store just virtually mhm you know so yeah it’s tough but I mean the opportunity for anyone listening who does the content is incredible because no one’s really doing it yeah everyone’s just kind of like half people can’t stay with this no like how many podcasters we know just even our in our friends group who haven’t made it past a year yeah let alone six months yeah yeah are there a bunch yeah
(1:22:14) I don’t even track yeah yeah but I guess that makes sense people start and then kind of give up on it yeah and that’s where there’s a there’s a time and place for giving up but those who can or just even just keep like keep shifting like for example no no different than my my investment Journey like it started with single families did some non-conforming multies and then the city was cracking down so then we went to student rental because we could get it done pretty easily and we can conform with all with
(1:22:39) all bylaws and whatnot and then duplexes CU like oh because student rentals the financing was difficult so then legal duplexes oh completely clean for financing then do that and then like oh do is cash flow enough oh we got a garden Suite now right so but again sticking with you got to roll with the punches yes yeah and then but I’ve been punched too hard so I’m going going south yeah yeah well you’re just changing your approach and I’m sure there’s listen there’s going to be punches for you in Texas
(1:23:05) let’s face it it’s like real estate like there’s always punches I mean no worse guns yeah yeah yeah I never really thought about that we were talking about it earlier yeah I don’t know I’m not too scared of the guns you brought up the guns in Texas I don’t know I’ve researched it too much you dig into Vic I dig into my personal safety okay I do have to admit the last time I was in Florida I Hon the horn at somebody and I just then I remembered I was in Florida I’m like holy [ __ ] duck I don’t know
(1:23:30) what’s going to happen but uh they have a gun in their cuz when I was in Texas like I did not see anyone carrying a gun law enforcement so I was thinking I was thinking about it like if it was me it be such a hindrance to like to like wake up every morning and Holster up or whatever and then like there’s all these private businesses that don’t allow open carry right so you can’t you’re not supposed to carry the gun and so so yeah I guess everyone’s gun is in their glove box I guess I remember going into a
(1:23:55) restaurant long time ago at a marketing conference in Scottsdale Arizona and the restaurant said I I don’t know if that’s a conceal in K State or whatever you call it but the restaurant the entrance said this is a like a No Gun Zone please leave your guns like in the car or at home or not in the restaurant and I’m like this is wild I’ve never seen this kind of sign as you enter a restaurant before so uh I guess I guess in that state maybe you can have concealed weapons on you um recently I was
(1:24:23) somewhere was it last year I was in Arizona maybe it was in Arizona I saw somebody holstering a gun walking around but uh yeah different uh we we need to talk about the conference your sorry your member event it’s not even really a member event because you do allow Outsiders yeah we kind of usually have like about 50 to 100 tickets for people who aren’t clients of ours so not many no yeah no um so it’s uh yeah it sounds like a lot to some people but there’s sometimes over a thousand people yeah
(1:24:49) last time was our biggest one we hit 1100 people um this started you like this started with our account you know how this like started with our accountant who would come out and just talk about like a tax tips for Real Estate Investors and someone was like can you do that again and it just rolled um so it started with 50 or 60 people at the Holiday Inn in the basement of the Holiday Inn at Bronte in qw in Oakville but anyway uh yeah Saturday April 6 will be the next one we haven’t released the the um speakers yet but um there’s going
(1:25:15) to be a thousand people there and the sponsors are always uh great people and uh yeah because you don’t let anyone sponsor I know yeah yeah yeah yeah it’s it’s yeah we kind of are a bit chosy on that and uh yeah it’s fun so the next one’s Saturday April 6th and if you’re following us in any capacity you’ll hear about it because we make a big uh Big Show about it um and yeah we’re excited for it it’s nice to get everyone together it’s like you know how it is with Real Estate Investors we don’t all
(1:25:40) get together it’s not like going to the gym every day where you cross path with people or the your favorite restaurant you see the it’s a bit of a reunion where we can all sometimes just commiserate like about interest rates and like the tenant board and sometimes it’s like a support network you know when things are going great you’re cheering and when things aren’t going the best you’re kind of just supporting each other so to me it’s an important event and uh we have fun with it you know last time we had Jeff Booth
(1:26:05) out there that was a really good talk and uh this time I I think we have some great people and uh I’m just not going to share just because we haven’t put it out yet but yeah Saturday April 6th you’ll hear about it yeah if anyone enjoyed this podcast for example like what we just talked about today you’ll do basically in a longer format that day we’ll talk about macro I’m sure we’re going to talk about Bitcoin yeah we’re going to talk about development or like yeah we’re going to dive into the
(1:26:28) Ontario Market pretty deep this time yeah and also very micro level you’re talking about specific markets correct like what specific rental properties are doing correct right you get you know go from the again you go from like the global all the way down to the property right yeah numbers profile neighborhood yeah right yeah and I think we like to have fun with it I think this this this time the theme is going to be Indiana Jones last time Matrix is it I haven’t seen anything yet I can’t wait not yet
(1:26:52) we haven’t released anything but Anthony on the team has an old motorcycle that kind of remind us of an Indiana Jones kind of motorcycle so we think we’re going to try and tell the hall that it’s not operating even though it totally is and it’s just a prop we’re going to try and bring the motorcycle to the event I want to see you Nick crack the whip on stage I want to hear it from the back of the room like oh my God yeah yeah yeah we’ll have some fun with we are ordering some whips and some Indiana Jones hats for
(1:27:17) those are toy ones I want to see a real I don’t know is it a bull whip I I want to hear it I want to see someone crack it on stage even better if you have a Target to hit with like a oh man and everyone I just want to thank you like thank you for supporting us and being part of this you know Journey you’ve uh you know you you came on um and have done your own thing in an incredible way so it’s been awesome for us to watch what you’ve done as well so congratulations on everything you’ve done and it’ll be uh when you’re the
(1:27:45) mayor of Austin or San Antonio or whatever you’re going to have to let us know I don’t want to get shot at but you guys took a flyer on me because I don’t think I’ve mentioned that in a long time cuz uh at the time I was the only person to join the team who was not a member mhm yeah yeah wow really was that the case and I think I’m the only one that’s worked out yeah maybe anyone else is it CU actually it’s a rule it’s a rule now you may not join the team unless you’re a member yeah we
(1:28:09) have some people on the team that have been friends of mine uh that have joined Rockstar now over the years that’s different you didn’t know me yeah no we didn’t yeah yeah yeah you’re right you might be the only one irn yeah set the president set yeah cuz again like many people didn’t stay I think almost nobody stayed so yeah I probably G gave the wrong expectation let’s let everybody else in oh my God this is terrible it’s not a numbers game no yeah yeah y yeah we’re kind of choosy who we yeah we’re not a
(1:28:42) bro Rockstar is not a brokerage that is looking to attract a lot of Agents we’re kind of consider ourselves a boutique place that’s doing a pretty specific activity and um yeah and certain people fit into it and certain people don’t but we’re not trying to get like a million real estate agents that’s like the last thing we want right we’re really trying to work with investors and and you know build something and we’re not just trying to talk about real estate we’re trying to talk about all aspects of Life how to
(1:29:09) make it all work yeah and it’s a complicated business and there’s lots of rules and stuff we have to follow I can’t imagine having to hurt all these cats and lots of personalities yeah lot personality Tom I like to give my guess always the final word like anything in general you want to say anything anything don’t e just don’t say don’t eat the ell you know what you saying that you you mentioned something about dreaming big and stuff earlier I somebody had a big impact on me once I was a author and then I I um and I
(1:29:39) forget the name of the book and uh in the book it basically said if you want to have a big impact in your life then you need to impact your community and if you want to have a big impact on your community you need to have an impact on your Province and if you want to have an impact on your Province you need to have an impact on the whole country basically saying that like if you really wanted to leave a lasting impact of what you’re doing you have to think bigger and Beyond yourself one level higher and
(1:30:16) it’s kind of always stuck with me like what can we do as a business or in life with my relationships where I can impact people Beyond me directly and it’s just something we try to live by by doing different little things and it might sound cheesy but to me it’s like you know we’re trying to impact people and we’re trying to do it at a level that’s beyond us and it’s forcing us to think a little bit big in our small little business we are trying to think big you know so it’s something that stuck with
(1:30:46) me yeah I think you had a lot of impact yeah you probably have a couple hundred million years in your among your clientele like so that’s that’s like how many people can say that yeah yeah yeah but thanks everyn appreciate it man thank you thank you thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.com my guests and if you’re
(1:31:25) just starting out feel free to ask questions and comment below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor tr.com

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UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to www.iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to www.iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s www.iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Tom Karadza, co-founder of Rock Star R.E. on Coaching 1000+ members to Success

Happy belated International Women’s Day! Shout out to all the lady investors, especially the moms, and even more so the single moms.  I believe the women of real estate to be so awesome that I wrote a poem on the subject. For the first time ever on the Truth About Real Estate Investing, here we go:

In realms of brick and mortar, where dreams are built and sold,

A story of empowerment and courage does unfold.

On International Women’s Day, we raise our voice in cheer,

For the women leading boldly, year after valiant year.

Among my clients, women shine, their vision clear and bright,

Driving investments forward, with insight and foresight.

Husbands, too, in whispers confess, their admiration pure,

“The growth of our net worth,” they say, “Her genius did ensure.”

To the wives, the pillars strong, upon which futures stand,

Who with a keen eye for value, navigate the land.

Their wisdom in selecting, the right property to seize,

Shapes the fabric of success, with remarkable ease.

And let us not forget, the single mothers’ might,

Juggling life’s many roles, through day and into night.

Their resilience astounding, a beacon so profound,

In them, a well of strength and love, abundantly is found.

So here’s to you, the women, in real estate who thrive,

Your influence is boundless, helping dreams to come alive.

On this International Women’s Day, your praises we sing loud,

For in the dance of progress, you stand both strong and proud.

Your journey with these heroes, in transactions large and small,

Reveals the true essence of empowerment for all.

To every woman navigating the path of wealth and home,

May you always be celebrated, and never feel alone.

On a personal note: we spent the week of March Break up north skiing, sort of. Cherry’s injured so she worked in the chalet the whole time. I skied half the time as the ski hill is on the smaller side which is perfect for my kids.  Shout out to Hidden Valley Highlands Ski camp for training and entertaining the kids.  I can’t recommend it enough to any parent who wants their kids to be able to ski.

We do live in Canada hence I believe life skills include swimming, skating, and skiing. Intermediate levels are fine. I just want the kids to be safe when they’re playing with their friends.  Our family friends’ teenagers has their school ski day was cut short as too many kids were getting concussions crashing into fences or trees.  

I’m a hyper, over protective parent hence I’m planning ahead.

Speaking of planning ahead, I have a enough clients with adult kids where the adult kids want nothing to do with the family business or real estate investing.  Vs what kids would say no to an inheritance of stocks like Microsoft and Apple.

My point is, to increase the probability of my kids wanting to learn and be investors, they’ll need something more passive than what real estate investors are doing locally to manage their portfolios.

Take Airbnb for example, earlier this week Cherry just had our worst experience with a property we booked through Airbnb. 

The heat was off when we arrived so the house was freezing. Not a good first impression. No welcome email with instructions on how to operate the house, no manuals inside the house either.

I spoke to the owner’s father and he was able to walk me through how to turn on the propane furnace that was outside of the house. Even with the heat on, the radiators on the main floor and in the bedrooms weren’t heating up which stressed me out.

A fluorescent ceiling light was loose and was drooping down from it’s mount, half the closet doors were off their railings, the wood fireplace hadn’t been cleaned, the owner didn’t know how to open the flue so we weren’t going to use it.

Then at bedtime when checking the beds, two pillows, the kind for resting your head on when sleeping. They smelled like bad body odour. Some bed sheets had old blood stains. My pillow was wet so I grabbed a folded, white pillow case from the laundry room next to the folded towels and it was yellowed from out don’t know what use.

The neglect of this short term rental is as bad as I’m seen. The worst in my experience. How are we expected to relax  with all these problems?

The owner came by to check on us. Her standards for operating a short rental prices at $500 per night are below mine. 

We decided to cut our losses short, we didn’t feel comfortable. Once Airbnb agreed to let us cancel the remainder of the reservation but only a reduction of 30% for the terrible first day. We packed up the house which went from 15 degrees when we arrived to 26 degrees in 24 hours. The owner warned us there was no way to control the temperature hence the guests who left before we arrived shut off the furnace, I was instructed to regulate the temperature in the house by opening windows…. What a waste of propane and lack of client care.

So we packed up the house while the kids were in ski camp as the cleaner showed up to give us grief for not leaving sooner. Like it was our fault the house was gross, too hot, not maintained causing us to leave.

We drove 10 mins down the road and the view of a massive, beautiful custom home on a massive lot backing onto a pond was better than the pictures.  We’ve had a wonderful remainder to our March Break.  We can’t wait till next year when we upgrade to a bigger resort like Mt. St Louis, Blue Mountain or Holiday Valley. Assuming there is snow…

We hit the jackpot. An added bonus, we saved $1,700 for making the switch, though I still think our one night stay at the S-hole should have been free. 

My point is, I couldn’t do what the first Airbnb owner did. Have to deal w customer complaint calls and Airbnb while the owner is probably making good money as her experience for lack of maintenance was due to the place always being booked.  But to operate a like that, you have to not care about customer experience, argue with customers, and be fine as the slumlord of short term rentals.  I know my kids wouldn’t do it.

Hence I choose to outsource all management of my real estate investments going forward.  The heavy lifting is my due diligence which I’ve had a blast doing because I’m a real estate geek. The latest on my research is I’ve found the rental listings of one of the largest REITs in the US. 

As the saying goes: R&D stands for rip off and duplicate.  I have the rental listings, their addresses, pictures, I can look up what they paid and when. 

Combine that with the public information of the billion dollar investments by Intel, Samsung, Texas Instruments, LG, Honda, Toyota, Hyundai, TSMC, GM, Siemens, Tesla, all in the business and landlord friendly southern US States nicknamed the Battery Belt for all the green, electric, and battery manufacturing investments… all of the locations are just outside major centers like Columbus, Ohio; Atlanta, Georgia; Raleigh, North Carolina, Dallas and Austin Texas, etc…, all cities growing in population and identified as among the best cities for investment in the USA.  So my plan is to buy houses in between the major centre and the new manufacturing company being built that will employ thousands of manufacturing employees. 

I’ve mapped the new major employers out on google maps, I know my target neighborhoods, investment criteria, and I’ve partnered with SHARE the asset manager to be my one stop shop.  I’ll pay them their fees to do all the landlord duties and I get to keep 100% control and 100% of the equity, this is the best joint venture setup I’ve personally seen.

If you too would like to learn how Cherry, my clients and I are investing in the USA we are hosting a How to Invest in the USA Workshop Saturday morning April 13th, we have experts in all areas including Accounting structures, Financing, Acquisitions and Management.

Note that we are keeping our investing simple and boring and only discussing single family houses at the workshop because they’re affordable: $100,000-350,000 and I can get better cap rates between 5 and 7% which beat pretty much anything here in Canada when adjusted for risk.

Link to register: https://USAworkshop.eventbrite.ca

Tom Karadza, co-founder of Rock Star R.E. on Coaching 1000+ members to Success

On to this week’s show!

On today’s show, we have one of my mentors and brokers in Tom Karadza, co-founder of Rock Star Real Estate Brokerage, Inc who in my experience is one of the best leaders and influencers in our community.  If results are what matters to you like they do for me, Rock Star’s 1000+ members are well educated in investing and are among the most successful especially after you adjust for risk.  No get rich quick schemes at Rock Star.

On today’s show Tom and discuss how Rock Star members have weathered the current storm, how the pandemic ruined my bitcoin gains, while Tom is laughing all the way to the bank… does that saying work when referring to Bitcoin gains? 

Anyways, Tom and his brother Nick Karadza are hosting the next Your Life, Your Terms event live and in person Saturday April 6th at the International Centre near Pearson Airport.

This is likely the largest room, 1000+ attendees expected, or successful, action takers you’ve ever met where the talks are fresh, no repeats allowed, Cherry will have a booth, I’ll be networking wearing a USA Hockey jersey.  If you’re a client, I have some pull so you can save the hundreds of dollars on tickets, everyone else, details and link to register in the show notes: https://www.yourlifeyourtermsevent.com/

To Listen:

** Transcript Auto-Generated**
(00:00) hello and welcome to the truth about real estate investing show my name is Erwin Szeto and I want to say Happy Belated International women’s day oddly enough uh International history of women’s month is celebrated in October in Canada versus uh the west of Russell World celebrates it in March so happy in happy women’s History Month to everyone not from Canada anyways I want to shout out all the lady investors especially the moms and even more so the single moms out there uh I believe the women of real estate are incredibly awesome I
(00:33) happen to be married to one and I wrote a poem on the subject uh from from my own experience of working with uh I’ve shared before about half my clients are women including the married couple uh half the time the wife is the driving partner of that relationship so for the first time ever on the truth about real estate investing show I’m going to read you a poem in the Realms of brick and motor where dreams are built and sold a story of empowerment encourage dozen fold on International women’s day we raise our
(01:03) voice in cheer the women leading boldly year after Valiant year among my clients women shine their Vision clear and bright during Investments forward driving Investments forward with insight and foresight husbands too in Whispers confess their admiration pure their growth of our net worth they say her genius did ensure to the wives and pillars strong upon which Futures stand with who with a Keen Eye for Value navigate the land their wisdom in selecting the right property to seize shapes the fabric of success with
(01:35) remarkable ease and let us not forget the Single mother’s might juggling life’s many roles through through day and night the resilience of astounding a beacon so profound in them a well of strength and love abundantly is found so here’s to you the women in real estate who Thrive your influence is boundless helping dreams to come alive on this International women’s day your Praises we sing loud for the dance of progress you stand both strong and proud your freedom with these heroes in transactions large and small reveals the
(02:07) true essence of empowerment of all to Every Woman navigating the path of wealth and home may you always be celebrated and never feel alone again shout out to to uh all the women in real estate investing on a personal note U my family and I including my Superstar wife Cherry we spent the week of March break up north skiing sort of uh Cherry’s got a banged at me so she worked in the Chalet pretty much the whole time while I skied half the time as the ski the ski hill it’s a it’s huntsville’s uh Hidden Valley
(02:39) Highland ski uh so it’s bit on the smaller side but it’s perfect for kids I want to shout out to uh again Hidden Valley Highland ski camp for entertaining my kids and for training them I can’t recommend it enough for any parent who wants their kids to to learn how to ski so we’ve been doing this about at least three years now where our kids spend both the Christmas holiday break and March break in ski Camp uh we do live in Canada hence I believe the life skills for a Canadian include swimming skating and skiing intermediate
(03:12) levels are just fine I just want my level kids to be safe when they’re playing with their friends uh our family friends uh their teenagers actually had their ski school day cut short as too many kids were getting concussions from crashing into fences or trees so that’s not for what I want for my kids hence uh I’m planning ahead speaking of planning I have enough clients with adult kids where their kids want nothing to do with the family business or the real estate portfolio versus what kid would say no
(03:42) to an inheritance of stock like apple or or Microsoft my point is to increase the probability of my kids wanting to learn to and be investors the need something a bit more easy a bit more passive than what Real Estate Investors are going through uh locally to manage their own port uh take Airbnb for example earlier this week cherry and I had our worst experience with the property that we booked through Airbnb uh when we showed up this is this is for our March break so when we showed up the heat was off so we when we arrived the house was
(04:14) freezing and the thermostats weren’t doing anything not a good first impression uh there was no welcome email with instructions on how to operate the house no manuals inside the house either uh so we called and I spoke to the owner’s father and he was able to walk me through how to turn the propane furnace on that was outside the house so that was the first for me I’ve never seen a furnace outside the house before but even with the heat on uh the radiators on the main floor and in the main floor bedrooms they weren’t heating
(04:41) up and that’s where I was sleeping so that’s concerning to me uh there was also a fluorescent light in the basement that was a ceiling light that was loose and it was drooping down from its Mount I’ve never seen that before uh half the closet doors were off the railings the wood fireplace hadn’t been cleaned uh the owner and the cleaner who came by to clean it up after we reported it they didn’t know how to operate it or how how to open the flu so we had no plan B either then at bedtime as we were
(05:09) getting ready to go to bed uh we actually looked at the beds and we found two bed pillows that uh the kind that you’re supposed to you know rest your head on when you’re sleeping they smell like bad body odor pretty gross some of the best then so then we looked closer pulled back some of the sheets and then we found we pulled back some blankets and we found some bed sheets that had old blood stains on them uh my pillow was wet to the touch uh so I just tossed it on the floor I wasn’t so lucky even when I went to go
(05:41) find a clean pillowcase as the next one I found was yellow U this is hardly a good experience the neglect of the short-term rental is as bad as I’ve seen the worst in my experience and uh how are how is anyone expected to relax with these sort of problems going on uh the owner did come by to check on us in the afternoon uh in her standards for operating a short-term rental with prices at $500 per night are well below my own uh and who do I criticize apparently she’s making the money hangover our fist um anyways we decided
(06:12) to cut our losses short we didn’t feel comfortable uh once Airbnb agreed agreed to cancel the remainder of our reservation uh but unfortunately we only got 30% reduction on that terrible terrible first day uh that that was the decision of the owner I don’t believe that was airbnb’s call to make anyways we pack up the house and uh mind you when I when we showed up at the house when we first checked in when the heat was off it was only 15 degrees inside according to the thermostats which seemed accurate and when we when we
(06:42) arrived to pack up the house it was 26 degrees it was only 24 only 24 hours that passed the owner had warned us there was no way to control the temperature inside the house and I’d gone through and and set the temperature at like 21 22 degrees on all the thermostats I could find yet yeah yet the uh the furnace was just on a runaway was running away I don’t know what would happen if we stayed any longer so no surprise the previous guests before us who left it before who left before we arrived that’s why they
(07:14) shut off the furnace and the owner instructed me to regulate the temperature inside the house was by opening Windows in the middle of early March there’s still it’s it’s a warm March but it’s still like cold outside what a waste of propane and lack of client care anyways so we packed up the house while the kids were in ski Camp uh a cleaner showed up and gave us grief for not leaving earlier uh like it was our fault the house is gross and that’s why we’re leaving and it was also too hot uh we
(07:43) drove 15 sorry 10 minutes down the road as we booked another airBNB uh and we were greeted with a beautiful custom home Mansion uh well there’s probably 4,000 I think it was about 4,000 square feet on a massive lot backing onto a pond it was even better than the pictures uh we had a wonderful remainder of our March break after our very bumpy start uh we honestly can’t wait to go Wai in next year uh while my kids are my kids are old enough now they don’t need to be in Camp anymore so yeah we hit the
(08:15) jackpot with that property uh with an added bonus we saved $1,700 for making the switch though I still think that first night’s day at that crap hole should have been free uh my point is I couldn’t do what the Airbnb owner did have to deal with customer complaint calls and deal with Airbnb uh and again the owner is likely making really good money um and her experience was that you know lack of Maintenance was perfectly fine she’s still making money hand over fist U she actually said she couldn’t take
(08:45) care of Maintenance because the place was always booked she never thought to you know block off some time so you can get some work done no um but to operate a business like that and not care about customer experience and argue with customers and be fine with being a SL Lord of short-term rentals uh I know my kids wouldn’t do it and I wouldn’t I definitely wouldn’t do it either hence I choose to Outsource all my management on my real estate Investments going forward uh all the heavy lifting it all the heavy lifting
(09:15) that I have to do for investing in in the states is my my due diligence and honestly I’ve had a blast doing it because I’m a real estate geek and I enjoy travel so I can’t wait to travel with cherry to Atlanta and Nashville and in between and uh yeah oh and then also recently I I stumbled upon uh trion’s website the rental listings as well so so they’re one of the largest reads larger reads in the states so again uh I’m enjoying what I what’s called in the in the in the industry any industry uh
(09:51) R&D you know most people understand R&D as being uh research and development uh I I Al it’s also known as ripoff duplicate so I have the rental listings of Trion which is uh and they own 36 or 38,000 single family homes in the states so I have the rental listings I have their addresses and pictures so I can look up what they paid for and when so anyways combine that with public knowledge of the billion dollar Investments being made by Intel Samsung T Texas Instruments LG Honda Toyota hyundai Tesla all in
(10:29) business friend friend L landlord uh landlord business landlord friendly Southern USA and it’s actually nicknamed the battery belt for their green electric and Battery manufacturing Investments all the locations are just outside major centers like Columbus Ohio Atlanta Georgia I know Columbus is a little bit on the Northern side but they’re they’re one of the anomalies of being landlord friendly in the north uh Rally North Carolina Dallas and Austin Texas these are all CI cities with growing population and growing economies
(11:00) and identified as among the best cities for investment in the USA so my plan is very simple I’m going to buy hoses in between these major centers and the new manufacturing companies being built that will employ thousands of manufacturing employees anyways I’ve mapped the new major employers out on Google Maps uh I know my target neighborhoods my investment criteria and I’ve partnered with share the asset manager to be my One-Stop shop to you know find me deals manage the managers Al all sorts of
(11:30) things uh I’ll pay them their fees and they get to do all the landlord duties while I get to keep 100% control and 100% of the equity this is the best joint venture setup I’ve personally ever seen if you two would like to learn how cherry and cherry my clients and I are investing in the USA we are hosting a how to invest in the USA Workshop Saturday morning April 13th we have experts in all areas including accounting accounting legal structures financing Acquisitions and of course management note that we are keeping our
(12:01) investing simple and boring and only discussing single family homes in at the workshop because they’re affordable at the 100 100,000 to $350,000 range and I can get cap rates between 5 and 7% which pretty much beat anything here in Canada when adjusted for risk uh links in the show notes on to this week’s show on today’s show we have one of my mentors in broker uh Tom Tom crit is the broker and Co under Rockstar real estate brokerage where I belong and have been since 2010 uh in my experience they are the best leaders and
(12:36) influencers in the community uh if results are what matters to you like they do for me Rockstar members uh their thousand plus members are very well educated and more importantly they are very successful especially when you adjust for risk no get- rich quick schemes at Rockstar and on today’s show Tom Tom discusses how Rockstar members have weathered the current storm uh spoiler alert it’s been pretty good we talk about how the pandemic ruined my Bitcoin gains while Tom has accumulated more than he will he’s willing to share and
(13:11) he’s laughing all the way to the bank and I I as I say that I I know the R I don’t know if that saying works when you’re talking about Bitcoin and Bank you know what I mean anyways Tom and his brother Nick kader are hosting the next your lifee terms event live and in person Saturday April thir April 6th at the international center near Pearson Airport this is likely the largest room uh a thousand plus attendees are expected uh and and these will be successful action takers uh and uh the talk is always the talks always fresh
(13:46) for example there’s speakers there speakers that they have out that they’ve never had before there’s no repeating content allowed uh cherio will have a brand new presentation and she’ll have a booth there as well I’ll be there of course networking I’ll be wearing my USA hockey jersey if you’re a client of mine uh and I do know someone who knows someone so I can save you the couple hundred bucks on tickets uh and for everyone else I have Link in the I have link and details and the link to
(14:15) register is in the show notes uh URL Fe if you have a pen handy it’s www.yourlifeyourtermsevent.com please enjoy the show hi Tom what’s keeping you busy these days I was just thinking about when I first met you and you decided you were going to get into real estate and for whatever reason I think it was a Greek restaurant in Burlington we had lunch was that where it was and uh Nick was saying something to me like you know we got to sit down with this guy Irwin he’s thinking of leaving his job and going
(14:52) into real estate and real estate investing full-time I’m like okay you know let’s go and uh Greek food I love so that wasn’t easy sell and I remember sitting down across and and I thought okay this guy’s pretty crazy like us so he kind of fits because uh he wants to quit his job I remember it was a decent job what was it I I worked for a company that was acquired by IBM okay yeah so you were you like a data analyst or something I was in product management so it was it was a nice position for me
(15:21) because uh my workers highly respected I worked between like clients and internal clients to help design product that would deliver what they wanted so I kind of like that intermediary between clients internal clients in our development staff and why what was what had gotten into you why did you want to quit again I forget I I always want to get rich in life it was always my always in me that just my nature I always want to be rich and after reading Rich Dad Poor Dad I realized it was not going to happen while working a job got it and you
(15:50) wanted to be rich and how do you define that rich in time rich in money Rich money I was young more money than marrier got it I was not even a point where like I didn’t want kids because they just getting the way of having makeing more money that was my mindset back then got it got it um I think I just watched is it true I watched something it was like a a Chinese comedian sing for New Year’s yeah I was talking to Tim about this briefly and is this is this a real thing so you don’t say Happy New Year to you
(16:22) know in on the Chinese New Year it’s not customed to say Happy New Year you say I hope you get rich it’s it’s it’s it’s it’s a loaded thing but it’s also rich in what though money Health okay so it means I wish you wealth in all facets of wealth yes okay okay he’s he’s taking the Liberty but yes but you know but again like generally Asians priority is money yeah yeah you get it like it’s po it was a historically very poor culture sure so like you know no money no eating
(16:51) right so you know you know you know croatians are have similar background as well you don’t have money you don’t you’re not eating yeah yeah I remember just the way my family I think would try to show wealth would be they had nothing so if you went to visit and this would be my family in Croatia they would put any P they had any cheese they had out any bread in an abundant way to kind of show that they were welcoming you to the house and to show you that they had something to offer you and they had no
(17:19) real Financial wealth but that was the way they kind of tried to show that they were welcoming you you know putting some food on the table Yeah weird times lots of different cultures have different ways to express that but I remember you you told us you were going to quit your job and then you went and did that took a lot of balls man do you looking back at that moment do you are you happy that you did that do you regret doing that uh so I don’t know if you remember it was a long time ago was 2010 we’re talking about I
(17:48) actually went on sabatical for 30 days okay and that’s and I had my license at that point so I give it a go so I give it a go and then I was doing all right right I think I did two or three Deals in that month and then if I extrapolated then that would be more money than I was getting paid at the job and I was enjoying what I was doing I knew that this would help me become a better investor as well so then there was more there’s more wins and also I could keep local right I was living in Burlington at the time so go train downtown you
(18:17) know and it was yeah hard Jam in there everybody was reading the newspaper yeah everyone’s reading the newspaper it’s and especially the ride home is packed like you I almost almost never got a seat so you for that’s usually me cuz I play basketball at work I was that guy but yeah like that was you know a key part of the journey and you know and it’s weird cuz I’ve only ever been at Rockstar I’ve been a realtor for since 2010 only ever been at Rockstar so this is my only context yeah wow and before we’re recording like like
(18:54) we’re we’re recording this on February 15th like there’s been all this turmoil in the industry uh like just just last week there was big news in the CBC and the globe mail a certain group with like 8 600 units in like Northern Ontario mostly like they’re Grant bankruptcy protection and digging into it it’s it’s it’s bad I don’t know how much you dug into it not much I just know that there was a bunch of stuff lent out on promisory notes and that’s really all I know the houses were
(19:23) up north somewhere well the the bigger issue well that’s a big issue part of the issue as well is like there’s 200 units that are sitting vacant that are not that are not habitable wow right and I was thinking like how far is this from Rockstar theory for how to invest oh jeez right cuz I’ll go OG on you uh cuz you always share your family story of back in the uh late ‘ 80s mid 80s late ‘ 80s and the early ‘ 90s yep can you share that story yeah I think maybe that’s what defines how we think about
(19:55) real estate over the last 15 years was that era our father was running a drywall company and then he started flipping properties on the side just like everyone starts flipping properties on the side in the late ‘ 80s it was in uh Moga just north of square one off Eglington and kind of Highway 10 and those subdivisions up there were going up in the late 80s yeah that’s gorgeous area beautiful area he started flipping properties and he did really well on a couple flips new construction bought them sold them and then 1990 hit and he
(20:22) was holding this one new construction again that he bought off paper on assignment so like it was a trailer on a gravel parking lot guy walks out buying the house my dad buys the paper from him and it was a 4,400 ft house house enormous pretty big three-car garage and back then he bought it for 750,000 and with the hopes that it would go up like like all real estate was going up and instead of it going up four months after he bought it um TD raised rates I mean the Bank of Canada raised rates but in this one month interest
(20:53) rates went up and if memory serves it was 2.9% in 30 days so it was like a 3% raise in 30 days and that absolutely decimated the real estate market and not only the real estate market it really ripped apart the highend or what I would call the luxury Market yeah 40 44 qualify yeah so that house we were looking to see if we could sell it and we would we would sell it for like 450 we thought and at the time we couldn’t afford to sell it for $450 we would lose so much that our family home in Miss Saga would be in Jeopardy so uh my Dad
(21:28) decided to hold on to it I became the property manager because my English was stronger than my father’s and we rented it out and even renting it out I remember roughly it was about $1,000 a month negative so my dad’s drywall or our dad’s drywall company was struggling because it was a recessionary time and we had this property that was sucking $1,000 and the price of it was under under what we purchased it for and then the the tenant skipped out on rent um and uh I remember going to the house and
(21:58) it was vacant at first I remember going to the house and them telling me hey just come back in a couple days and we’ll get you the rent I used to go pick up the rent I remember being inside the house when they told me this beautiful carpets baby grand piano like I remember being impressed with this house and just the way it was furnished and everything so when they said to come back I didn’t really think of it I used to cut the grass on that house and stuff and uh full service product management yeah
(22:23) what I was doing yeah I was like my old Thunderbird like I stuck in a lawnmower and I went to go cut the grass and do all kinds ofd who knows what more in a Thunderbird okay I got the image in my head yeah two car girl two car sorry two door Thunderbird with light covers and a bra on the front with a lawnmower in the back going a cut grass and uh i’ cut the I went back and the neighbors are like hey they let they moved out in the middle of the night and I’m like what they’re like yeah the house is vacant
(22:49) we’ve looked through the windows and then I went and the house was vacant they skipped out on one month’s rent and at the time one month’s rent for our family was absolutely massive like we needed that money do you remember what the rent was I don’t I just remember the negative I remember the negative was like roughly a thousand and uh I had to tell my father which was also that was just brutal had to rent the house out and renting out a larger house when times are tough took forever it was basically just us
(23:14) Executives who would rent out that house and even renting it out again in a recession not easy it was not easy no I don’t know how many months um I was in university then uh but I remember being vacant for quite a few months because I would have my friends over for some parties and I remember one of my friends jumped off the twoot sorry jumped off the garage roof he jumped off the garage roof of that house and landed on his chest on the grass and he didn’t die I remember seeing him bounce off the grass
(23:45) um so yeah we had some kind of crazy parties in that house and stuff but we eventually rented it out and uh that just taught me that you know going through that experience was really really tough and it just taught me that um when when we looked back there were some real estate or some properties that really um were the most liquid if you needed to rent them out if you needed to sell them in bad times if you needed to refinance them and it was starter homes it wasn’t these luxury properties starter homes always had a bit of a bit
(24:15) or a bit of demand M and I just always stuck with Nick and myself we like huh starter homes always seem to be like the most liquid real estate so if you’re going to get into real estate probably should just get starter homes and you should probably not do um reconstruction like our father had done because by the time you sign the paper or the time between you sign the papers and taking possession a lot can change it can kill you it the market can change it can change greatly Fin and I know that’s very conservative thinking and I know
(24:42) tons of people have made amazing money on preconstruction and I’m not denying that’s it’s like absolutely fantastic for them this is just our family story and what works for us so we always then steered Nick andai to starter homes that were resale because we thought oh well if they’re resale we know what the rent’s going to be and if it’s a starter home we can we know we can rent it out to a family regular rent we know we could do a rent to own strategy on it if it’s close to a college or university we
(25:05) know we could change it into a student rental which we had done we have a property that we ran as a rent owned that particular one didn’t get bought out we changed it to a student rental for a few years now it’s back to a single family rental so this the starter homes just have a lot of opportunity a lot of you know options there’s options flexibility to it if you want to throw a credit line on a starter home the banks are typically willing to do that so it’s just easy so it sounds pretty boring but
(25:33) we’ve just always thought resale and single family homes and when I say single family I should qualify that like we mean fully detached but you know if it’s a semi- detached town home like those kinds of properties ideally single family if we can and that just became like our our thing we would just buy resale and um yeah that’s what we learned in real estate and then when we when when we went off to start Rockstar it was really just because we had no more money to buy properties ourselves so we thought okay well we
(26:03) have these real estate licenses that we got to bypass Realtors MH and uh why don’t we just use this license to try to help other investors because this is going to sound crazy irin but in 2006 and 2007 there weren’t a lot of Realtors who worked with investors yeah I remember those days yeah there you couldn’t find anyone so most books most books taught to not work not yeah don’t even yeah yeah if it was a real estate book it was like investors asked too many questions you don’t want to deal
(26:28) with them and The Brokerage that we first went to in Oakville they didn’t they told us we were going to fail when we told them we were going to work with investors they didn’t think we were going to succeed at all well because also add to that most investor books that were training investors like write a 100 offers yeah and that was the books I WR I used to do that I used to write all those offers and I used to piss off all these Realtors to win one yeah and and I would say things like legally I know you must present my offer I know
(26:55) you must present it I legal legally I know you must present this and then I flipped and I got my license and then I dealt with these investors and I’m like oh God yeah you don’t realize the politics of of real estate is that you’re trying to keep relationships with other real estate agents so you don’t want to piss them all off with your crappy offer yeah exactly someone off they may not ever talk to you again I’ll never forget I found a single family home in Burlington that I couldn’t buy
(27:18) Nick and I didn’t have the money but it was it was a single family home in Burlington for it was I I want to say like 283 285 if you could believe it 283,000 and remember telling this investor oh my gosh I found the property it’s it this is the price and here’s what you’re going to get and rent on this property this thing is a winner and he had read some real estate investing book where he had taken the purchase price of the home and divided it by the property tax and the ratio that he was came up with he said yeah he said in the
(27:47) book that if the ratio of purchase price to property tax was this that it wasn’t a good purchase and I remember it just finally hit me I’m like wow some investors just speak with cra crazy you know some crazy ideas and then I thought oh my gosh was that me like back in the day cuz I probably said some things to realtors that just sound the 1% rule or yeah yeah well the 1% rule if you could get the 1% rule that was like that was crazy that’s what got us into student rentals because they were hitting the 1%
(28:16) and we’re like holy smokes back in the day yeah yeah yeah but anyway that’s so yeah so our personal journey is heavily influenced by the early 1990s and that real estate crash lasted property prices went down for six years so um that heavily influenced us and just guided us to starter homes the resale Market super boring and over the years people have come to our faces and told us you guys don’t really know how to make money in real estate you have some those people yeah you have to be doing this we’re now
(28:44) bankrupt oh really yeah and it just never even phased us cuz I always just thought like well this is my journey that’s your journey this is what’s working for me I’m doing the math on these things I like what this you know does and we’re going to stick with it and our accountant really early he’s since passed away but he was a mentor to us I’ll never forget he said that when he was younger him and his accounting buddies would look at businesses and as businesses would grow some of them would
(29:06) grow almost exponentially and they would always admire those people and those businesses but you know now later in his life as he reflected back with his accounting buddies they realized that it was the turtle who wins the race that a lot of the businesses that really ramped up some revenues that wasn’t really a sustainable thing it was like either they you know a got lucky or B were not doing something appropriate and they the revenues really Skyrock rocked but the business itself wasn’t built on a bed a
(29:35) Bedrock of a solid foundation and they came to learn that like oh the people who just do things at a steady Pace just year over year over year at the end of the day tend to win most often and that also stuck with us and we’re like you know what these little starter homes they’re the turtles yeah they just you know day in day out they kind of work away for you and at the end of the day they’re not the most exciting but they’re likely going to you’re likely going to survive the journey MH I was
(30:01) just reading an article about looking back on GE and that actually fits into that as well when Jack wal was like he was like the go he was he was like the Elon Musk time I remember right and then then I I remember I remember when GE Capital started and this is exactly what you’re talking about GE Capital started to finance their customers to buy more of their product yeah was that what it was yeah so it’s like inflated so like yeah we’re number one or number two in this in this and it was vertical but
(30:30) we’re we’re feeding it yeah yeah yeah yeah yeah it’s like they had control of the Monopoly board and the bank so they just threw in more money into the board sounds sounds familiar it yeah that’s that’s oh sorry I want to touch back go back to your the the the property your your father bought what is it worth today just yeah I haven’t looked I haven’t looked that in in years I guess it if I have to guess it’s at Miss Saga Road in Eglington in missa over 3 million somewhere yeah it’s probably
(30:59) something like that yeah yeah four maybe yeah I should go look years ago I kind of like blocked it out of my mind for so long because it was such a scar in our family but um yeah and the turtle would have won eventually if you could hang on yeah if you just held on and that’s the thing like if you can handle the leverage the whole key to getting ahead financially is use to me is in the existing Financial system is to use leverage and then be able to you know smartly manage leverage and if you can’t handle the leverage it’s the market
(31:30) telling you oh you weren’t too good at this game and we’re kicking you out but if you can manage The Leverage you’re likely going to get ahead I mean you know I always look at real estate I’m like a real estate as an investor you put 20% down historically in the Toronto area real estate will appreciate at 7% a year 7% on a 20% down payment it’s 35% return and it’s a good way to financially outpace the currency depac in this country and it’s a good way to get ahead financially but if you overextend yourself with that
(32:00) leverage and you can’t manage it you get kicked out of the game mhm it’s like a reboot so it’s much tougher market today I was actually talking to a a Toronto agent friend of mine he was like he’s he’s he’s doing the math in his head he’s an engineer by trade but he’s real practice as a realtor he was telling me to cash flow on a downtown Toronto condo you need to put down 50 to 55% just to cover the hard costs so mortgage taxes Insurance condo fee I’m like that’s a lot of money to put down mhm and then
(32:28) other things happen tenant turnover lease fees bad debt right repairs and maintenance Property Management all those things happen property tax and Toronto’s increasing what 10.6 10.9% or something I think with the threat of 16% if the feds don’t kick in some money yeah what could happen yeah it’s an election year yeah they probably W yeah they’ll probably pay it’s election coming soon they’ll probably pay so so what what should investor do today based on your based on Rock philosophies I think I’ve just heard
(32:57) that story like I’m 51 years old now I’ve heard that story since about 1998 like in 1998 property prices had gone up um for two or three years and somebody told me oh my gosh like you got to be careful with the real estate you know property prices have gone up now two or three years they always go down because if you grew up in the90s you were used to property prices going down then I remember in the tech boom of the early 2000s people were like oh tech stocks are where the money is real estates way
(33:22) too hard and I was buying student rentals then and you couldn’t convince anybody to buy student rentals everybody was like you know Cisco Nell pets.com like that was the that was the era.com yeah that that was the era then that kind of crashes down greenpan lowers interest rates real estate catches a bit of a bid and then 2008 hits and people in this country were convinced real estate was going to crash we started RockStar at that time and people were telling us oh my gosh are you seeing what’s going on in the in the US it’s
(33:54) going to collapse here in Canada and then in 2017 similar things you know prices came down and right now interest rates are High um so it makes it quote unquote more difficult than in the year 2001 when interest rates were lower so I guess my message to anybody listening that’s going to go into this is you have to understand that real estate and our money game now is very cyclical cyclical every three or four years there’s a big amount of debt in the world that’s getting refinanced and and in between
(34:24) those times things get a little wonky so a lot of new debt came out in the pandemic our interest rates were really low um to kind of create a little bit’s under selling yeah a lot to create a lot create a lot of debt and then inflation gets hot interest rates go up everything gets a little kind of scary and then we’re hitting a Time whereas if I had to be a you know if I had to place a bet on where I think interest rates head in the next year it’s going to come down and it’s going to take some pressure off
(34:51) things to make that condo example that you were saying to make it cash flow a little easier because interest rates are going to come down and have no crystal ball I have no guarantee to that I just mean over the last 20 years this is what I’ve seen it’s like interest rates kind of trend up like in 200 2008 interest rates no one remembers but interest rates we were getting some mortgages in the high fives close to yeah close close to 6% and people were telling us Tom these purchase prices I’ll never forget
(35:17) this Hamilton property at $225,000 no more cash flow no more cash flow game’s over and interest rates come down prices go up and you know the party kind of rages on so I don’t know if this is the end of real estate for the Toronto condo or for the resale Market in Toronto I just think we’re in one of those Cycles where rates are high and if your formative years in real estate are 2008 onward all you know is cheap money cu the Cycles have been so so high with debt and so low with rates that that’s
(35:51) all you know and we’re finally coming to a place that’s kind of outside of the you know the recent norm and it makes it difficult for people if the numbers don’t work and you can’t handle it then I wouldn’t buy but I don’t expect that to be the case for the next 10 years there’s just too much debt in the world for rates to not come down so I got to think things are going to get a little easier again MH on the same side my friend that was telling about the condo he he Al telling also telling me that in
(36:20) downtown Toronto duplexes are on absolute fire sure right CU people are want and these are these are house hackers these are these are folks who are planning on living in one of the units and they need the income from the other unit to live and like oh God thank goodness my duplexes have taken a haircut in the last few years yeah yeah yeah yeah I think it’s just everything goes up and down like Nick and I don’t look at real estate like any property we’ve ever looked at we thought would we would we buy this if we had to hold it
(36:49) for 10 years at a minimum right even if we were doing rent to own stuff which we were ideally selling to a tenant buyer at the end of 3 years um which didn’t happen but we had to plan that it if it did we were going to be okay with it and if it didn’t we kept the property so we’re going to be okay with it so the way we look at it is like do the numbers work for us in our lives right now could we hold it for 10 years because when we were younger I needed the cash flow so the numbers that we’re talking about the
(37:16) Toronto condo and different properties around Toronto right now if they don’t cash flow it’s not really appealing it wouldn’t be appealing to the Tom that was in his 20s but as your financial situation changes someone might might want to buy a Toronto right now doesn’t matter if it’s 40% down 50% down because they might want a condo for their family for their son for their daughter for some reason they’re in a different Financial place and the number is not a big deal so I think you have to match
(37:40) the finan the conditions of the real estate market to your current situation are you in are you young willing to take on a lot lot of Leverage and a lot of risk or are you a little older and you’ve accumulated some assets and now you’re at a different place in life so it’s just there’s just no one answer but I do but I do know any investor who looks back always says it’s harder today yeah like I’ve never met the investor there still harder today it’s still harder today never even when price is
(38:08) down it’s still harder today the banks change their rules the down payment rules change the qualification changes but things always change I’ll give you an example in London Ontario where we have a lot of investors who buy student rental properties around Western they’re about to change the bylaw as we speak right now to go from five bedrooms up to allowing seven oh great so now we were in a situation where people were like oh well the numbers don’t really work yeah five bedrooms I can’t earn enough even
(38:33) though uh per room up there it’s common to get a th000 we’ve seen $1,200 a month um in student rentals but now if you can add two more bedrooms we we know a bunch of investors who have unfinished basements that weren’t finished because they couldn’t legally add two bedrooms now they can legally add two bedrooms and it’ll get another $2,000 a month on that property what’s that going to do to the opportunity there probably increase it so I just think you can’t take a moment in time and make a definitive
(38:56) answer that this is how it’s going to be forever real estate’s like a changing game so is is uh I want to get to I want the listener to know what what properties they should be looking at is the London student rental an ideal for anyone to get into yeah okay so also another thing want to clarify as well is like a high amount of Leverage is different for different people to me like to me a high amount of Leverage was 20% down cash maybe even he in a schedule in a schedule A Bank mortgage for cheap that was high leverage for me
(39:29) versus we see all these people out there with first private first private private first for 6% private second for 12% oh God yeah promisory note for like 15 177% yeah right and also I want to throw in I’ve been saying this on the show a couple times now we used to call these hard money loans we got away from it it’s true yeah we don’t use that language as much yeah because I remember a good friend of mutual friend of ours like he would use the term when he when he was building his Mansions when he’s
(39:57) he I have hard money loans versus people like BR I priv private I private borrow yeah like no it’s it’s hard these are hard money loans that’s sorry I can I digress back to uh what is a best practice investment in today’s market um so on okay so first you just give me a flashback I remember when Jim flarey the Finance Minister in Canada briefly allowed 0% down payment and 5% down I don’t know if you remember four investors for declared rental properties the cmhc fee was like astronomical but I
(40:28) can’t crap on what you just said too hard because when that came out Nick and I were like all over that we were like wait a second you can do 0% down and if the numbers worked and some numbers still did work at 0% down your cmhc fee was astronomical but anyway you just I couldn’t qualify because already had properties so they would never give that to me it it was tough yeah yep and um I I tried though yeah of course why not yeah 0% down it’s like an infinite return even five yeah um but for today
(40:57) for for I mean it’s it’s a tough question to answer today because you you know whatever answer I give has to be mapped to somebody’s short-term objectives and their long-term goals like look at your all of our short-term objectives mine and yours like look at yours right now you’re making a change in your portfolio like it always is kind of Shifting but if somebody I’m a different age and different yeah you have different things bother you in a different way at this age and at this stage of life than it did a few years
(41:21) ago so you want to adapt accordingly and you know to each their own of course but I would say that um to anyone looking at the Ontario market right now what has been popular if let me answer it that way right now has been student rentals because student rental demand is always strong and I’m not talking about the the recent massive influx of international students the big universities always have demand so McMaster Western Queens these places always have strong strong weth to yeah like Western has like last time I
(41:54) checked was 37 38 39,000 students if you add in faculty in the hospital there we’re talking at like 40,000 50,000 people and they have a college in town too to put more pressure on that market yeah Fen Shaw’s there as well you’re right so um if you can buy a property around Western in good Economic Times or in bad Economic Times there’s always students and uh those properties make a lot of sense because you also get to go to market rent quite frequently so if you rent out to a group of students
(42:23) after 3 years usually that group is moving on you know within 2 years 3 years four years usually you’re moving on to get a new group of students when that happens you can take your rent back to whatever Market rent is and as a as a way of an example my son is just leaving Western this year he rented out what I would call a slummy house we don’t own this particular house uh for $615 a month utilities included three groups of students came out for next year just a couple weeks ago they took it on the first day for 925 a room plus
(42:53) utilities 925 a room plus utilities he was renting just a few years ago we signed that leasee or he signed it at 615 utilities included right so like 50% increase over 3 years it’s massive so student rentals are interesting and now if they’re changing some bylaws and you can add more bedrooms legally in there you can do it properly and I mean making like safe clean functional properties so student rentals can be really interesting and and I would say to anyone looking at real estate that could be a way that you want to look at it or
(43:23) you want to buy a property where you can add a duplex a second second unit or a single family home on a lot that in the future you could drop in a g Garden Suite a laneway suite or change the structure of that house because going forward like look what you said about Toronto with like duplexes being on fire I think we all know there’s going to be a continued housing shortage in this area so that if you can add on to the property and add out their income streams those are huge so you know if you can go to the Niagara area right now
(43:51) and find a property where you can duplex it legally and then potentially even add a third unit on the property m at some point to me those are gold because if you look at the population growth in Canada as much as Canada has problems I don’t think we can deny like Canada has problems has government problems Canada has There’s real estate problems there’s government problem there’s problems at all levels in in Canada and all over the world too all over the world China like us us with their issue in Texas the
(44:18) whole world we’re we’re going through a moment here for sure but it’s crazy times it’s crazy it’s yeah bitcoin’s over 50,000 again these are historic times man yeah ride Bitcoin down to 16,000 or whatever it was and come back has been been a journey but on the real estate PR keep me focused here don’t don’t throw dangle at the Bitcoin topic there um the the Niagara region like if you just look at fundamentals like the population growth of Canada is going to continue whether one way or
(44:44) another through International students legal illegal whatever it is you know we’re getting more people in this in this country no way dips below half a million ever again yeah yes we’re going to have yeah so the population growth a big percentage of population growth in can of the legal immigration that I track 44% comes to Ontario so we get like a huge amount in Ontario within Ontario a huge amount of that comes to the Golden Horseshoe Niagara happens to be positioned against you know the biggest economy in the world um the
(45:12) population growth is going to expand they’re going to put a new casino in Niagara there’s two new factories going up Welland is getting a battery Factory from I believe it’s a South Korean uh company don’t hold me to to to that but there’s a new battery plant going to go in and well and there’s another new Factory that I’m forgetting the name of that um plans in thoral there’s a new golf course I believe being built in the Niagara region so you could just see like that area is going to just continue
(45:36) to expand continue to pill in population growth so if you didn’t want a student rental I would say hey check out the outskirt areas of Toronto specifically the nigar area would be an interesting way to uh to get into real estate for sure I’d throw in as well like a basement apartment strategy Garden suet strategy would be wonderful near a university as well yeah that would be great those are really hard like in my my experience those are really hard to find a lot that can handle that or a property that can handle that but man
(46:03) you got a you got basically an Ontario Golden Horseshoe unicorn if you can do that oh my gosh and I know some people who have built like nine unit student rentals by these universities as triplexes so they can convert it to like a proper Triplex or they can rent it out as three three-bedroom student rentals and with a lot big enough if they wanted to they could put something else in the back so you’re right yeah that’s a unicorn if you can find that kind of thing and the bank loves it they’ll Finance it properly yeah like versus my
(46:29) student rentals yeah well back in the day get the best back in the day yeah student rentals were not like this back in the day like especially around McMaster like do you remember going into some student rental a friend of mine had a room when I was in university we went to visit him to get to his room you went past the furnace and there was like a curtain hung off like I guess from the HVAC ducks that you kind of pushed to the side and now looking back at that time we didn’t even think anything of it but now looking back I’m like oh my gosh
(46:56) this guy’s room yeah he was on the back side of the furnace room just with some carpet and a mattress on the floor that was his room that he was renting out so McMaster area was wild it’s better now it’s come a long way I’m sure there’s some of those properties still out there I remember seeing like Bas and bedrooms with no windows yeah people had just a room there was no windows like like that’s wild wow and that was not that uncommon and the low ceiling like 6 yeah I remember the low ceilings I remember
(47:26) one bedroom in a basement that we were looking to buy this property we went into the basement and the bedroom um I think it had a window but you’re making me think maybe it didn’t but it had this little kind of doorway that was maybe only 4T tall and the ceiling was slightly crooked like it wasn’t a proper doorway and and it was maybe 4T long so it’s was 4T tall and about 4 ft long and you just kind of look down and it and you there was no door it was just this little weird hallway thing off the
(47:49) bedroom and you walk through and on the other side was a bathroom and like how did this like how is this bathroom here how does this exist exist so uh and you wonder why we have rental licensing coming fromon area yeah yeah by the way we we we dug up one of Nick’s houses by McMaster because we didn’t have the money or he didn’t have the money I wasn’t involved in this house to pay for like a Waterproofing Company so we dug it up by hand he got like six of us out there and we dug it up by hand and then uh he
(48:20) sealed it all up and we threw back all the dirt and uh you know he sealed the cracks but in one area where they punched a pipe through for something to do in the basement maybe they’re adding a kitchen somewhere or something they forgot to seal around the pipe no so a couple weeks later there was still a water leak and they had to redig back down anyway we’ve seen a lot of stuff do you guys still have that hose yeah Nick still has it yeah yeah so speaking of Nick famous quote from Nick is uh what is it those who deal with the most [ __ ]
(48:52) what is it win win thank you thank you cuz we were talking about like stages of career you talked about the you know our neighbor to the South is world superpower and i’ I’d actually argue the superpower by far with with we don’t even know how bad the evergr issue is and not just evergr anyone who’s behind evergr as well who is the number two three four building biggest Builders how many vacant homes are there in China we don’t know how bad this situation is so I think I think things are I don’t know
(49:20) all this you you read the brick talks stuff stuff too I don’t know how much you believe like bricks will actually catch up and actually be a significant thing like China has so many cracks in their economy it’s just nuts but anyways anyways end of the day not that much is going to change with the US there’s still going to be even if someone passes them there’s still going to be an incredible world superpower lots of jobs sure and so like everything combined I’ve done I’m done with dealing with
(49:44) [ __ ] right I’ve got I’ve got a B officer I got call back because she’s because she’s calling me because I have a I have a duplex that’s close to Mohawk College okay so I fall within land uh landord licensing okay got it I’m like I so I have at least I have three properties in Hamilton that will qualify into the current pilot for for rental licensing so and that’s just not worth it to me I’m I’m tapping out why do you is there a lot of work you have to do on that property no this is why I’m partly
(50:14) pissed these are legal duplexes like my my Hamilton Mountain property so why is she calling you CU because rental licensing if you’re in the W if you’re in that Ward you you have to go get rental licensing okay got it you don’t have to invest in the property you should have to I may have to do some okay got it uh but again though these my basements were done with with permits City’s already City’s already signed off on everything right I why do I need an HVAC inspection in Esa I haven’t done
(50:40) anything right and all the just all these extra costs I don’t want right so I’m done I’m done just I read too much news so I’m I’m done dealing with [ __ ] and we know where you’re going you’re wearing the Hat of where you’re going yeah yeah cuz oh man I loved it I’ve never been to Texas before you’ve been you’ve been you used had to travel a lot especially when your corporate work uh yeah y Dallas San Antonio Austin yeah I loved it my trip to San Antonio and Austin I just loved it I had no idea
(51:07) pulling up to a gas station we were just talking about this pulling up to a gas station having brisket just ready at the gas station there with picnic tables outside and going getting some fresh meat and eating it there amazing I remember being the whole the whole foods whereever Whole Foods is originally out of Austin or San Antonio I forget I think it’s Austin I don’t know but I went to whole see a lot I didn’t see a lot of presents from Whole Foods okay well we went to the Whole Foods like flagship store and their Hot Table had
(51:29) this like fresh barbecue and you know they were just selling it by the pound so you could walk up there and just say how many pounds you wanted you would wrap it in paper and you could just go outside and eat it it was like oh my gosh this is amazing yeah it was sunny and warm and uh it would be nice on a day like today it would be yeah seemed they seemed like a great place I could I could definitely see the attraction yeah cuz we’re just talking my single family homes before recording I just got an email u a property I I’d liked on
(51:56) realtor.com so that gave me a price update they just dropped their price by 25,000 from 300 down to 275 oh North atin only for 275 in Ontario not even Tim actually maybe Tim’s Ontario 275 and I think I can rent it for I may have to fix it up a little bit but I think I can rent for 1900 like these are the old these are these this is like Hamilton Mountain 10 go numbers it’d be interesting to look at the appreciation in those areas just to see and what you personally expect I think we get a strong appreciation in Canada
(52:30) because of the concentration of population around a few major centers whereas the US you just have a lot of choices even in Texas you have a lot of choices but then you can choose Florida and have a lot of choices so we’ll get to Florida in a minute yeah but it’s just I’m I’m curious to what happens to the appreciation in those areas just because we don’t get the concentr you don’t get the concentration of population like you do here um not that that’s good or bad and that might not be
(52:53) important to you but it would be something to look at like historically what happens in those areas around appreciation because one of the things I like specifically why I targeted Austin was because the prices have already come down at least 20% and realtor.com picked Austin to come down the most of the country so I’m looking at like Warren Buffett style like Austin pretty much is on almost every top 10 list Texas is obviously on every top 10 list right so this is capital tons of jobs prices are come I’ll probably get
(53:23) something from from like I’ll probably get the house if I bought something today i’ probably get like at least 30% off the peak I’m surprised to hear the prices have been coming down recently with just all the demand of people moving into Texas so what what is driving the is it just a interest rate moves there that have made affordable I think just went up too much went up too much too fast okay so it’s a bit of a correction yes this is a correction so I think okay so over 10 years it’s up just
(53:45) recently it’s down oh yeah just like about 2021 is is when the decline started yeah so probably declined in 2008 during the financial crisis came surpassed the 2007 High awesome yeah’s there’s there you been com mother sh no that’s R’s com love it it’s highly offensive as long as you like offensive comedy I love offensive comedy especially Asian jokes I just die just bring on come pick on me anyways uh but I’m uh again just I I completely agree with your point because America like
(54:19) there’s so just like greyber talks about like in the states like there’s so many cities with a population of 2 million or more in the states not like Canada shocking yeah there’s so many options for to move around to where to get a good job which is why uh the property I’m talking about that’s 275 it’s in uh Round Rock which is it’s the neighborhood North North Austin and it’s kind of Northeastern and so about 15 minutes down the road is where the Samsung plant is being built to build microchips oh
(54:48) awesome yeah so it’s a it’s a 4 billion dollar $4 billion investment they’ll have 2,000 full-time manufacturing jobs wow and Sam you know being a Korean company they’re back in Korea still recruiting suppliers to come back to come to Texas and support their bill awesome so that’s how I’m trying to defend and try to be offensive and defense at the same time makes sense so that’s and then that’s my thesis for the entire States as well so for example like Phoenix I’m looking at as well
(55:13) because that’s where Taiwan semiconductor manufacturing compan is open right the world’s largest microchip manufacturing they make for Apple you and I were both Apple people right so then that’s how yeah that’s how I’m defending mine and and and but I’m not I’m kind of preaching to the here about there’s us there’s advantages to the USA investing cuz I know you you you well before I was looking at the US you’ve been looking at the US yeah I think the way to me the biggest thing it’s the
(55:37) everyone’s going to be different to me the US presents a currency play because the US dollar to me is going to hold its value like I mean we’re just seeing it around the world that Fiat currencies are losing value one after another they’re losing them faster and faster the Euro last 10 years has been terrible the Yen oh my God the yen yeah wow for anyone wanted to go on vacation get a cheap vacation go to Japan cuz the Yen’s on sale it’s so cheap yeah I was just telling Nigel he’s got to take me um but
(56:06) uh the uh we were just there to go yeah yeah cool I would love to go um so to me it’s just a currency thing like if you look at the Canadian dollar if you have just Canadian dollar exposure and you don’t have any US dollar exposure and that’s important yeah you may want to consider especially if there’s another generation in your family that’s going to hold real estate you may want to consider getting some us exposure to some property just for the the US dollar exposure if it’s just that um there’s
(56:33) all kinds of other things you need to take into account um but to me that’s just the big picture way to look at it that if you just have Canadian dollar exposure in your life um getting a property in the US would be one way to get US dollar exposure and I think that’s a probably a really good financial decision over the next few years I’m also a Bitcoin guy as you know so to me Bitcoin is the apex predator in the room and everyone should have exposure to bitcoin but that’s a big leap for a lot of people so for them on
(57:02) their own Financial education and financial Journey if they want to get exposure to something beyond the Canadian dollar then at least consider getting us exposure and for Canadians getting an investment property in the US is like a pretty straightforward way to get it MH and I know rockar is a big fan of the build to rent model in in Florida I think we’re more a fan of the people we know like real estate to me yeah team is incredibly important yeah like again we were talking like there’s all these groups and they built poor teams and
(57:31) they’re bankrupt now it’s just completely sad yeah yeah and I think over the years people have asked us for specifically Florida just because so many Canadians vacation there um so much warmer than everywhere else yeah even especially important in the winter that nowhere else in America really is that warm yeah yeah yeah I was just down in Naples and uh nice it’s it was really yeah it makes you question what hey what am I doing up here in Toronto in the winter but anyway um the uh you get the US dollar exposure
(57:59) and uh I forgot what I was going to say there oh the team um the reason that we like Florida is we just know this you know we’ve known Jim now for 15 years we didn’t know the full scale of what he’s doing down there and uh they’re building brand new homes every year in the scale of five six 7 800 and they’re building per year and they’re building them with a tenants in mind so they’re building them so that they know they’re going to rent them out so that the property management can be the easiest thing on
(58:27) them so they’re building them with certain kitchen cabinets and certain counters and certain floors and you know they’re building them with uh roofs that have the proper tie-ins for hurricanes they’re building them at the right elevations so for a Canadian with a lot of variables to deal with when you go into Florida um this is one are a lot of variables what people expect yeah oh yeah for sure this is a a team of people that we feel we can hand off people to that are building the home they’re
(58:51) property managing the home they are handling the maintenance on the home so you’re you’re kind of covered right there’s still risk of course um but that’s what finally got us into Florida it’s like oh we finally found the team that we can say hey irn you want to go down there all right here’s the guy we trust go see him his whole team is going to take care of it they’re managing like 2200 units they got it all figured out now we went down and did a tour to check it out firsthand ourselves multiple
(59:14) times n and I have been down and uh yeah it’s been great and just to when I first saw uh the number of homes they build a year I thought it was a typo I thought there was an extra zero yeah yeah cuz they’re a home builder they’re like a home Builder that used to build subdivision homes they’ve just dispersed to do rental properties in different communities around Florida cuz to give context they would be a top 10 builder in Ontario based on their volume maybe top three yeah I don’t really know I
(59:39) guess maybe they would yeah well just think like mamy can’t build 800 c a year could they I don’t know don’t put anything past mam I don’t know I drove I drove through a madamey subdivision in Florida oh cool and they’re Canadian company yeah I didn’t know they had no idea they expanded right right right unless I miss saww but I’m pretty sure it was the same logo with the same company name on there and these are houses I removed the condo thing cuz it’s way easier to build a verticle like
(1:00:05) to like H these are house builders like that’s an incredible volume yeah building uh the vast majority are infill lots so they’re getting infill lots in existing communities and building brand new homes in there yeah because my context is Steve Ford we know a rockstar member like he builds 100 houses in the season his the Builder they works for right and that’s a whole season like so for to do hundreds hundreds yeah it’s kind of was the appeal to us is that these guys are like the real deal they’re not just building one home
(1:00:34) a year and selling it to an investor they are really doing this for that’s their livelihood that they’re in this business right yeah incredibly end to end yeah right here’s a product we’ll manage it you know it’s brand new yeah yeah yeah and then Canadians get some US dollar exposure I don’t know we’ll see how it goes I don’t know I’m question no LTB right now there’s no rent control I mean real estate you always have to like the the successful real estate investor just has to roll with the punches like
(1:01:02) as you see it with bylaw officers calling you and stuff you just you don’t know what’s coming um so yeah no rec controls the property manager we were speaking down there she was shocked when we talked about our landlord board up here she basically at one point said oh you’re California and we’re like oh is that what you would think of us and uh she said there 45 days and their cash for keys there was like $200 which shocked us but the reason it’s so low is because the tenants know they’re going to be out they don’t like
(1:01:30) to stand on so yeah they you don’t have to pay much to get a tenant out who’s not you know giving you trouble or not paying you can just go up to them and say hey I’ll give you 200 bucks and you’re they they leave so yeah just a very different Market different culture yeah the relationship between tenants I’m pretty sure I don’t know if I remember this accurately I’m pretty sure like the tenant board there like you’re going to the proper Courthouse yeah there is no tenant board you’re going to
(1:01:54) like Court same law law system as everyone else yeah and then um you know yeah there’s still stuff to learn different areas different counties and you know there’s always there’s always new things as an investor uh to learn about and the different rules down there but the 45 days um was really interesting to us and when she told us that to for a tenant to renew she had to give them a letter allowing them to renew the lease and that to me was shocking because you know here if someone goes beond Le goes to month to month and
(1:02:26) there it was directly the opposite so you know I thought that was shocking yeah cuz here as as a commercial landlord like the tenants usually like like pushing you to resign a new lease yeah right versus tenants residential like I month to month automatically yeah I I I suggest all Canadian investors speak to an American investor see the compare differences for sure right yeah cuz like Florida Texas Arizona there Georgia there always going to be the Carol it’s different there is no separate division of government or or or
(1:02:57) laws that are specific to protect tenants and as I learned more even within the state different counties can have different rules for rental property so yeah you just need an experienced team yes you do and even hear within within like Georgia for example certain counties are are they’re more backed up than others or for tenant landlord issues so yeah it’s it’s still it’s still very area specific for sure yeah yeah so can we talk about Bitcoin sure I PEX predator in the room cuz I remember when I first met you
(1:03:30) you were the first person to introduce gold to me as an as the as a a store of value not as an investment I think people need to always understand that like like is that’s how is that still how you position Gold store of value I it’s losing it to me but yeah that’s what it was it’s losing it well if you just look at the ETFs that just came out the the gold ETFs are getting uh they’re losing um investment if you look at just the amount invested in Gold ETFs as the Bitcoin ETF that were’re just five or
(1:03:57) six weeks in they’re coming down in in uh the amount of Investments they’re holding and the Bitcoin one’s like exploding right so is that just partly a shift people are like to raise money for the Bitcoin they want to divest some gold I think so like a lot of investors to me if they were investing in gold they were probably in the store of value Camp because why else would you have gold unless you thought maybe it stores your value and then there’s a to me what’s a better store of value Bitcoin
(1:04:25) comes out and now I can buy as an ETF within my 401k if I’m in the US which I couldn’t until this year just a few weeks ago I’ll reallocate like I’ve seen the you know you look at the comand annual growth rate of of Bitcoin and as January 28th 2024 this year if you go back four years it’s 46% compound annual growth rate like that’s that’s you can’t deny that that’s an incredible growth rate so like if you a sophisticated investor just looking at numbers and you had your gold and you
(1:04:56) had it as a store of value and you consider Bitcoin a new store of value you’d probably want to reallocate some of your gold into Bitcoin and I was a big gold guy because of the store of value thing for sure um but the store of value like the history of money is that to me technology is constantly changing what money is and we are at this weird point in history where technology is in the middle of changing what a good money is again and most people won’t see it until 20 or 30 years pass and they’ll
(1:05:28) look back on this moment going oh my gosh like I guess Bitcoin really did do something interesting so business case is there for it now it does seem like we’re you know since came out in 2009 we’re now 2024 I remember I thought it was a tulip and it was going to die I remember when it went yeah I thought I would dismiss I’m like what is this garbage like I’m I’ll come out with the Rockstar coin how about that you know I just didn’t understand the characteristics of Bitcoin at all I didn’t understand that there was an
(1:05:55) asset a digital asset and that it was a network so I didn’t understand that Bitcoin was really two things in one um and I just dismissed it and then in 2020 is when I went down the rabbit hole and I freaked out and I realized I was wrong and uh started paying very close to it attention to it and now I can’t stop thinking about it because I I do believe it’s the Apex monetary predator and I do believe that it’s going to be a network that sucks in a lot of value and when Network effects begin they are very difficult to stop so by
(1:06:29) way of example I would share with you Voiceover IP Voiceover IP came across with tcpip or the internet and it almost destroyed the phone companies the phone companies as they exist today the mobile phone companies only exist because they sell data they’re not selling anymore like Bell’s not selling landlines anymore so this new network came in and uh destroyed an ex existing model and those businesses all had to change like dominant businesses with with all you’re talking about Bell Canada Rogers these
(1:07:03) companies all had freak out moments that had to change and um I just see it now happening on the monetary side that there’s a network an open- Source protocol it’s permissionless The Ledger on it is immutable um it’s changing things again where now the banking system is going to have its freakout moment as more and more monetary value gets sucked into to this network and to me it seems inevitable I know for many people that would sound like it’s crazy but to me it seems inevitable and that’s
(1:07:33) why it’s kind of captured my interest and then if you look at compound annual growth rates now with some history it’s just remarkable like it’s it’s kind of it it it makes you question like what are you investing in like why aren’t you paying more attention to this thing you know the whole Jour my own journey is like your life your terms you know we talked about Rockstar and stuff but really like I just want to live my life on my own terms and leave me alone mhm and that’s what got me into real estate
(1:07:59) now there’s this other thing that’s just kind of got my attention and you can’t stop thinking about it once you kind of go down the rabbit hole or when it’s dangerous it is dangerous suck you in it’s a Time suck yeah I don’t know you’re pretty you’re pretty good defending your time but that one’s that one’s probably a tough one that one’s tough especially now cuz I must be yeah like I must be thousands of hours in now so so yeah it’s it’s a tough one it’s a
(1:08:22) tough one yeah it’s actually one of the it’s sounds stupid I say it this way it’s one of my biggest disappointments of Co because the lockdowns meant that we couldn’t all be in the gym together yeah and then when I got back in the gym you guys were already like like a couple thousand dollar ahead of me on bitcoin I’m like I’m like f i i loost i i had all this opportunity cost I I could have made so much more money if not for Co I remember when I had my moment I was sitting in the office because our office
(1:08:54) was open but it was on lockdowns but we were legally allowed to be open and it was me and Nick and one other person the three of us and I had the moment where it all just made sense for me and I ran to Nick’s office and I’m like I was so wrong on bitcoin we have to get into this and you’re right it was just at that moment where none of us were hanging out together um and so I didn’t see you to like I was so when you had that moment it probably like I was like four months behind like in back corner
(1:09:18) had gone around yeah that was a pretty important four months yeah damn it so damn you okay it’s got a lot more to go every you’re good you’re good uh where can where was where’s a good starting point for anyone to learn about Bitcoin CU I you were the one that got me to read the Bitcoin standard by yeah I guess it just depends what your background is like yeah if you are into economics and money and you have a little bit of History um reading about that stuff the Bitcoin standard by safine amuse is probably the best start
(1:09:46) the first four chapters or 72 pages of that book laid down in a beautiful case uh for it if you want a shorter thing there’s uh a medium article by VJ boyapati and it’s called the bullish case for Bitcoin so if you just Google like the bullish case for Bitcoin VJ um you will find that Medium article he actually turned it into a book now as well but it’s it’s originally a medium article that is an easy read that lays out a wonderful description of what Bitcoin is both the digital asset and the network component of it and how to
(1:10:17) think about it so I think that would be like a really really good entry point into it and then of course Jeff Boo’s book really kind of connected the thoughts for me because he doesn’t talk about Bitcoin but in his book the price of tomorrow he starts outlining um technology productivity gains and how that works in a Fiat based debt-based money system and once you read that book it really connects a lot of things together and uh that that to me is if you’re not into the money side of Bitcoin but you just want to understand
(1:10:48) what’s going on in the world with technology yeah with technology Tech yeah that that would be a good read so if you’re a tech guy yeah me too but again it’s it’s more of like a macro book in general yeah totally y I think he us word this is why we get along yeah yeah for sure yeah macro understand macro you read this I think that’s why I like Bitcoin so much is like there’s just so many layers to it it just uh yeah it’s a remarkable thing like I really feel like fortunate to be able to be here at this moment in
(1:11:18) time for sure and Bitcoin standard I thought was a wonderful history lesson of nothing else even if you don’t like the Bitcoin orrect just history of money yeah it gives you like a context or a framework of how to think about things seashells yeah uh copper coins Stones silver how silver got killed by gold yeah stock to flow ratios how do they work yeah how and the the ultimate like you know there can only be one yeah there’s a line in that book it’s page the the top sentence on page 34 is this your Bible you have like all highlighted
(1:11:46) and yeah probably yeah I’ve read it a few times the top the top uh I think it’s there’s a new edition so it might not be page 34 anymore but page 34 the top sentence on that page basically the sentence uh the you know the idea behind the sentence is you can ignore Bitcoin but it’s at your own Peril because the hardest form of money always wins yeah so it’s like you can why I said there can only be one yeah so like you can choose to ignore Bitcoin and laugh it off but just know that your purchasing power in Bitcoin
(1:12:19) terms is dying over time so you can ignore it but you’re doing yourself an injustice at this to IGN it and we’re not saying load up no you should have some exposure yes everyone should have a little exposure yes you’re laughing you’re smiling at me yeah what whatever’s right for you have 2% 5% something I don’t know it’s just everyone’s different like like we said it’s like real estate everyone’s different what’s right for me is not right for you it’s not right for
(1:12:46) whoever’s listening it’s just you’re everyone’s on their own path you know so yeah yeah I’m I’m yeah I’m a I’m a bitcoiner now can we talk about marketing sure because part so again I told I told you I I like I study both how to make money and how people lose money so I I I dig into how these like recent bankruptcies I dig into I I research like what happened what did they do how did they raise all this money sorts of things so for example like the the folks who are in Northern Ontario who recently uh going
(1:13:23) through bankruptcy credit bankruptcy protection uh like for example it’s quite obvious just actually just a little bit of clicking that they for example they bought hundreds of thousands of Instagram followers oh jeez right okay so stuff like that and like to me like I’ve been around long enough to know when someone’s bought just when they have absurd numbers of of whatever followers I guess or or yeah or some even if someone even old old school is someone that had like an enormous email database but they didn’t build it
(1:13:53) themselves I know I know they bought it right this no different but you know ever since I’ve known you and then you introduced the world the world of Dan Kennedy to me which I greatly appreciate someone just recently complemented my Marketing Systems which awesome which I largely borrowed from yeah from yourself and and this fits into the whole your whole abundance mindset I don’t know if I said on the recording yet did I say on the recording yet like dreams so big that everyone else’s dream can fit
(1:14:19) within yours right because yeah you and Nick are incredibly transparent and everything you do is basically available to we try to be yeah yeah yeah and where was I going oh yes so I’ll just say like you guys seem to have done everything the right way you only have 20,000 Instagram followers yeah yeah I know how hard you have to worked for it you didn’t buy that no no and that’s largely my son who’s taking our content and doing stuff with it but yeah yeah no we didn’t buy it no and I don’t want too much too much attention
(1:14:53) on Instagram cuz just from my own experience my email database is what converts sure for sure yeah can we talk about that is that is that still where things are is that still is still building the email database is that still a priority or is it should you focus on your Tik Tok okay so when it comes to marketing the way I think about it is remember my life’s kind of motto is your life your terms I want to live my life in the way I want to live it and marketing so why we talk about real estate and that I’m a
(1:15:22) Believer in real estate is because the leverage of real estate gets me Financial gains that are enough that are going to allow me to live life or help me at least live life on my turns the reason we talked about Bitcoin is similar reasons the reason I like marketing so much is because if you understand marketing you can build a life on your terms because I found in business very few people know how to get a new customer they have an idea they can rent a place they can create letterhead they can create a website so
(1:15:52) if you understand the principles of marketing you are like going to do what really well in whatever business you’re going to open whether it’s a car wash a restaurant or real estate investor and the principles of a marketing are to your email question to build a database of people that have in some way shape or form raised their hand and identified themselves as someone that’s kind of sort of interested in you and what you have to offer and the best way for me to get people to raise their hand and
(1:16:20) identify themselves is by getting them to share their email address with you so yeah to answer your question email is still amazing because you own the email address on Instagram Twitter Youtube Tik Tok those companies control the users that are subscribed or are following you whereas an email you own that email address so you get to email it you have to might be fight with a CRM system to like get your email out and there’s like spam complaints and different things if you’re doing it incorrectly But
(1:16:49) ultimately you own the email that’s a very powerful thing to me in business the relationship that you have have with your database is the most valuable thing you can have because there’s going to be some people who love Irwin and what Irwin talks about so much that it doesn’t matter if irn goes and starts a business that’s you know you can go start a restaurant tomorrow but you’ve established a relationship with the people they trust you and if you’re going to start a restaurant they’re
(1:17:15) going to come and eat at your restaurant because of who you are and what you represent to them so the a business owner’s relationship with their database is the number one asset that they can have it’s not the office space they’re in it’s not the name of their company it’s that and so few people understand that and an email address is the best way to build it then you can layer in physical mailing addresses phone numbers if you want to start texting people you can start doing all these weird weird
(1:17:40) and wonderful things but email is an absolutely critical way it is the best thing to be building because if you get shut down of Instagram you’re still going to have your email addresses or when uh musically when that went down I remember that was a huge such not a music guy but sure okay I believe you was but then was was what was Tik Tok before musically was sorry was Tik Tok musically before I think that’s what happened I think what that but then all these influencers they’ve lost their million subscribers or whatever yeah and
(1:18:11) then it’s on you once you have a database the onus is on you to prove to prove that you are sharing valuable information like if everyone just sped out to your email list garbage people are eventually just going to unsubscribe and you’re gone so like now I like that relationship share part it’s like oh the onus is on me the business owner to share such good value that people are going to keep interest in me and then every once in a while you’re going to ask to do business and because you consistently offer good value people are
(1:18:38) eventually going to come to trust you and with trust they’re going to come to like you and when you make an offer to do business with you some people are going to raise their hands and say I’ll take the next step and I’ll proceed to do business with you and it’s just to me the most wonderful way to do business is that build a database of people who are in your topic or area of expertise offer a lot of value follow up consistent consistently with that comes trust and the uh the person who’s reading your
(1:19:05) information or following you they’re going to like you then the ultimate sale is easier so it’s it’s just like a beautiful thing and to me marketing once you understand the principles of marketing you can go to Texas tomorrow use the exact same principles that you’re doing Irwin here in Ontario to build what you want to do in Texas and it’s going to work M just like real estate has principles to it marketing is going to have principles to it so it’s total freedom like it’s it’s it’s the
(1:19:31) biggest thing and nobody believes me and understands it and it seems like in the real estate World everyone just runs around on Instagram trying to get followers and everyone just yeah it it just seems like everybody you know what I guess the way to look at it is there are principles to anything there are strategies and tactics and in the marketing world everybody plays with the tactics everybody does like the quick new thing on Instagram that’s a tactic the quick new thing on Tik Tok that’s a tactic the quick new thing on Twitter
(1:19:59) it’s a tactic very few people have a strategy around their marketing and very few people understand the principles of what they’re doing and I think what Nick and I have done over the years is we tried to understand the principles of what works in marketing then Implement a strategy for it and only then choose the tactics we’re going to use in that strategic implementation I think the I think that where people most fail is like anything we like we call it the content treadmill yeah like the regular communication with your email
(1:20:29) database minimum a week yeah uh I think we’re two I think you guys are like three times a week and that’s that is the content trial you have to keep MH keep in touch with your database and then some some of these people you call as well so like oh that’s work like yes it is work but this is how you get results yeah it’s called sales yeah if you have a business like if I had a Subway sandwich shop that was next to subway station that was was really busy I probably didn’t have to do the content
(1:20:57) Triad Mill because people are going to be walking by every day and some of them are going to be hungry and they’re going to sell them a sub that’s something corporate has done your marketing for you yeah there’s that there’s that to yeah so but let me but even if I wasn’t to go to the corporate level if I was just a noname sandwich shop in front of a busy place I’m going to get some business but when you’re a service-based c uh company and you don’t have potential customers walking by your
(1:21:20) physical location well then you better be doing something to get attention and that’s why you have to produce content so you do a really good job at this you’re putting out emails and podcast I know you are in videos and you’re hosting class and you’re doing all these wonderful things and that’s how you get people to see what you’re doing so it is a Content treadmill in business especially service based businesses but there’s no really other way to get people to kind of walk by your store
(1:21:45) unless you’re putting out content if you’re putting out content you have people kind of walking by your store just virtually mhm you know so yeah it’s tough but I mean the opportunity for anyone listening who does the content is incredible because no one’s really doing it yeah everyone’s just kind of like half people can’t stay with this no like how many podcasters we know just even our in our friends group who haven’t made it past a year yeah let alone six months yeah yeah are there a bunch yeah
(1:22:14) I don’t even track yeah yeah but I guess that makes sense people start and then kind of give up on it yeah and that’s where there’s a there’s a time and place for giving up but those who can or just even just keep like keep shifting like for example no no different than my my investment Journey like it started with single families did some non-conforming multies and then the city was cracking down so then we went to student rental because we could get it done pretty easily and we can conform with all with
(1:22:39) all bylaws and whatnot and then duplexes CU like oh because student rentals the financing was difficult so then legal duplexes oh completely clean for financing then do that and then like oh do is cash flow enough oh we got a garden Suite now right so but again sticking with you got to roll with the punches yes yeah and then but I’ve been punched too hard so I’m going going south yeah yeah well you’re just changing your approach and I’m sure there’s listen there’s going to be punches for you in Texas
(1:23:05) let’s face it it’s like real estate like there’s always punches I mean no worse guns yeah yeah yeah I never really thought about that we were talking about it earlier yeah I don’t know I’m not too scared of the guns you brought up the guns in Texas I don’t know I’ve researched it too much you dig into Vic I dig into my personal safety okay I do have to admit the last time I was in Florida I Hon the horn at somebody and I just then I remembered I was in Florida I’m like holy [ __ ] duck I don’t know
(1:23:30) what’s going to happen but uh they have a gun in their cuz when I was in Texas like I did not see anyone carrying a gun law enforcement so I was thinking I was thinking about it like if it was me it be such a hindrance to like to like wake up every morning and Holster up or whatever and then like there’s all these private businesses that don’t allow open carry right so you can’t you’re not supposed to carry the gun and so so yeah I guess everyone’s gun is in their glove box I guess I remember going into a
(1:23:55) restaurant long time ago at a marketing conference in Scottsdale Arizona and the restaurant said I I don’t know if that’s a conceal in K State or whatever you call it but the restaurant the entrance said this is a like a No Gun Zone please leave your guns like in the car or at home or not in the restaurant and I’m like this is wild I’ve never seen this kind of sign as you enter a restaurant before so uh I guess I guess in that state maybe you can have concealed weapons on you um recently I was
(1:24:23) somewhere was it last year I was in Arizona maybe it was in Arizona I saw somebody holstering a gun walking around but uh yeah different uh we we need to talk about the conference your sorry your member event it’s not even really a member event because you do allow Outsiders yeah we kind of usually have like about 50 to 100 tickets for people who aren’t clients of ours so not many no yeah no um so it’s uh yeah it sounds like a lot to some people but there’s sometimes over a thousand people yeah
(1:24:49) last time was our biggest one we hit 1100 people um this started you like this started with our account you know how this like started with our accountant who would come out and just talk about like a tax tips for Real Estate Investors and someone was like can you do that again and it just rolled um so it started with 50 or 60 people at the Holiday Inn in the basement of the Holiday Inn at Bronte in qw in Oakville but anyway uh yeah Saturday April 6 will be the next one we haven’t released the the um speakers yet but um there’s going
(1:25:15) to be a thousand people there and the sponsors are always uh great people and uh yeah because you don’t let anyone sponsor I know yeah yeah yeah yeah it’s it’s yeah we kind of are a bit chosy on that and uh yeah it’s fun so the next one’s Saturday April 6th and if you’re following us in any capacity you’ll hear about it because we make a big uh Big Show about it um and yeah we’re excited for it it’s nice to get everyone together it’s like you know how it is with Real Estate Investors we don’t all
(1:25:40) get together it’s not like going to the gym every day where you cross path with people or the your favorite restaurant you see the it’s a bit of a reunion where we can all sometimes just commiserate like about interest rates and like the tenant board and sometimes it’s like a support network you know when things are going great you’re cheering and when things aren’t going the best you’re kind of just supporting each other so to me it’s an important event and uh we have fun with it you know last time we had Jeff Booth
(1:26:05) out there that was a really good talk and uh this time I I think we have some great people and uh I’m just not going to share just because we haven’t put it out yet but yeah Saturday April 6th you’ll hear about it yeah if anyone enjoyed this podcast for example like what we just talked about today you’ll do basically in a longer format that day we’ll talk about macro I’m sure we’re going to talk about Bitcoin yeah we’re going to talk about development or like yeah we’re going to dive into the
(1:26:28) Ontario Market pretty deep this time yeah and also very micro level you’re talking about specific markets correct like what specific rental properties are doing correct right you get you know go from the again you go from like the global all the way down to the property right yeah numbers profile neighborhood yeah right yeah and I think we like to have fun with it I think this this this time the theme is going to be Indiana Jones last time Matrix is it I haven’t seen anything yet I can’t wait not yet
(1:26:52) we haven’t released anything but Anthony on the team has an old motorcycle that kind of remind us of an Indiana Jones kind of motorcycle so we think we’re going to try and tell the hall that it’s not operating even though it totally is and it’s just a prop we’re going to try and bring the motorcycle to the event I want to see you Nick crack the whip on stage I want to hear it from the back of the room like oh my God yeah yeah yeah we’ll have some fun with we are ordering some whips and some Indiana Jones hats for
(1:27:17) those are toy ones I want to see a real I don’t know is it a bull whip I I want to hear it I want to see someone crack it on stage even better if you have a Target to hit with like a oh man and everyone I just want to thank you like thank you for supporting us and being part of this you know Journey you’ve uh you know you you came on um and have done your own thing in an incredible way so it’s been awesome for us to watch what you’ve done as well so congratulations on everything you’ve done and it’ll be uh when you’re the
(1:27:45) mayor of Austin or San Antonio or whatever you’re going to have to let us know I don’t want to get shot at but you guys took a flyer on me because I don’t think I’ve mentioned that in a long time cuz uh at the time I was the only person to join the team who was not a member mhm yeah yeah wow really was that the case and I think I’m the only one that’s worked out yeah maybe anyone else is it CU actually it’s a rule it’s a rule now you may not join the team unless you’re a member yeah we
(1:28:09) have some people on the team that have been friends of mine uh that have joined Rockstar now over the years that’s different you didn’t know me yeah no we didn’t yeah yeah yeah you’re right you might be the only one irn yeah set the president set yeah cuz again like many people didn’t stay I think almost nobody stayed so yeah I probably G gave the wrong expectation let’s let everybody else in oh my God this is terrible it’s not a numbers game no yeah yeah y yeah we’re kind of choosy who we yeah we’re not a
(1:28:42) bro Rockstar is not a brokerage that is looking to attract a lot of Agents we’re kind of consider ourselves a boutique place that’s doing a pretty specific activity and um yeah and certain people fit into it and certain people don’t but we’re not trying to get like a million real estate agents that’s like the last thing we want right we’re really trying to work with investors and and you know build something and we’re not just trying to talk about real estate we’re trying to talk about all aspects of Life how to
(1:29:09) make it all work yeah and it’s a complicated business and there’s lots of rules and stuff we have to follow I can’t imagine having to hurt all these cats and lots of personalities yeah lot personality Tom I like to give my guess always the final word like anything in general you want to say anything anything don’t e just don’t say don’t eat the ell you know what you saying that you you mentioned something about dreaming big and stuff earlier I somebody had a big impact on me once I was a author and then I I um and I
(1:29:39) forget the name of the book and uh in the book it basically said if you want to have a big impact in your life then you need to impact your community and if you want to have a big impact on your community you need to have an impact on your Province and if you want to have an impact on your Province you need to have an impact on the whole country basically saying that like if you really wanted to leave a lasting impact of what you’re doing you have to think bigger and Beyond yourself one level higher and
(1:30:16) it’s kind of always stuck with me like what can we do as a business or in life with my relationships where I can impact people Beyond me directly and it’s just something we try to live by by doing different little things and it might sound cheesy but to me it’s like you know we’re trying to impact people and we’re trying to do it at a level that’s beyond us and it’s forcing us to think a little bit big in our small little business we are trying to think big you know so it’s something that stuck with
(1:30:46) me yeah I think you had a lot of impact yeah you probably have a couple hundred million years in your among your clientele like so that’s that’s like how many people can say that yeah yeah yeah but thanks everyn appreciate it man thank you thank you thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.com my guests and if you’re
(1:31:25) just starting out feel free to ask questions and comment below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor tr.com

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UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to www.iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to www.iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s www.iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Navigating US Mortgages As A Canadian With Scott Dillingham

Welcome to the Truth About Real Estate Investing Show for Canadians, I am a Canadian real estate investor since 2005, investment specialist Realtor since 2010, my team and I have done over $440 million in investment transactions, my name is Erwin Szeto and I currently have three houses of my own for sale and I have some experience share to frame the what I’m seeing in the market, call it a market update: I have three listings, all best in market student rentals, two in St Catharines, one in Hamilton. I sold one in St Catharines to a family whose child goes to Brock University and is going to move in and rent rooms to his friends. The two others were not attracting the interest I was expecting which is nuts because there is so little out there in supply to buy or rent.

I luv luv luv having options when investing. I’ll explain, my plan was to sell and I’m not looking to give away my properties so I put them back up for rent. My St Catharines property I have a group interested in paying me $4,550 inclusive for a house I’m asking $650,000 for sale. We have their deposit already and the new rent would be 10% higher than what I got last year.

My Hamilton house located near McMaster University? Our showings for rent were through the roof at 15 over three days. We signed a lease with a group of students for $5950 per month plus utilities. An increase of around 40% over last year between increase in rent and switching the utilities from inclusive to exclusive. I have first and last month’s rent in hand for a house I’m asking $850,000 for.

These are some of the best numbers you’ll see in these markets and I was ready for plan B of enjoying my higher cash flows and hold for another year but when I told the showing agents what my rents were, all of a sudden, their buyers became interested and now I’m sold conditional on my other two listings.  Fingers crossed they firm up.

This is why I luv income properties with options as in they rent for positive cash flow so I don’t mind holding them and choosing a market for which to sell them in.

Market wise, this is still the least investor activity I’ve ever seen. 

In my expert opinion, student rentals are one of the top investments in Ontario because the rents are so high and due to regular turnover allowing rents to adjust to market rents yet investor demand is at an all time low in my career while supply or quality properties is extremely low while my rents are at historic highs.

Cherry and I will have a hefty tax bill to pay on all these capital gains but to me it’s worth it. Raising cash and paying down debt will allow us to take advantage of other opportunities as no one knows where these recessions will take us. 

Next for Cherry and I is planning a trip post tax season, a workcation to visit sunny and warm, landlord friendly USA to check out some properties we intend to buy this year.  We’re going to enjoy some southern hospitality, fried chicken, BBQ, Graceland, Lookout Mountain, the Duke’s of Hazzard Museum. 

I can’t wait as I’m a total real estate nerd, I luv to make money, eat good food, listen to great music and experience iconic attractions.

Public service announcement: I’m seeing some interesting stuff on social media. One podcast with a bankrupt host just released a new episode. Another guru is running ads saying they are basically financially free even though I know they have six separate parties suing them: former joint venture partners and coaching clients. They even display a testimonial in the ad from my friend who is suing the guru.  

So buyer beware, do your own due diligence, before you invest with anyone do ten reference checks. The more references who made money and paid out the better the reference. It’s hard to fake being paid unless it’s a ponzi but ponzi’s can’t last a down cycle which is why it’s a good idea to only invest in a strategy, business, investment that’s been through more than one cycle. 

Sadly the businesses and so called experts going bankrupt right now haven’t been through a cycle before and it shows. High leverage, difficult flips or expensive cottages on Airbnb in a recession? It can be done by well capitalised investors who were strategic, bought for great value and big caveat, anyone who survives this period should come out great.  That is why cash flow from multiple sources is so important and why I’m working on building a six figure cash flow from single family houses in landlord friendly USA and it’s easier when there is no rent control.

If you’re interested in learning more about how Cherry and I are investing, we are hosting a US Investing Workshop Saturday morning, April 13th in our office in Oakville and online via Zoom Webinar.  We have already sold half of the in person seating so to avoid disappointment, buy today. Link is in the show notes:

https://USAworkshop.eventbrite.ca

We will be covering economic fundamentals, the numbers behind the investment, corporate setup, tax implications, and of course the financing which is commercial style: the ideal style for anyone who wants a scalable portfolio and to generate a significant amount of cash flow.

FYI, I just had a client close on a 1,100 square foot bungalow, built in 1981 in Memphis, Tennessee. Price was $95,000, reno budget $25,000, rent is $1,100 per month plus utilities. Single family detached house.  Not to mention no rent control, no LTB or RTB or RTA. My client is happy with how much he’s going to cash flow and I couldn’t be happier for him.

Navigating US Mortgages As A Canadian With Scott Dillingham

On to this week’s show!

Today we have my Mortgage Broker Scott Dillingham from Windsor Ontario who as far as I know is the only investor specialist who can help Canadians with mortgages in both Canada and the USA. Scott while he was the #1 mortgage broker at one of Canada’s biggest banks got my clients and I many mortgages at cheap rates and I’m now selling one of them.

Scott has since opened his own mortgage brokerage called Lendcity, he shares how American debt service coverage ratio mortgages work when buying income properties in the USA. Scott is a real estate investor himself and shares some of his own challenges as a Windsor landlord and how/where he plans to buy his next investment property and why.

For long-time investors, you’ll remember the days around ten years ago when we used to negotiate seller credits to bring down our downpayments, thus improving our ROI. Well roll back the calendar as seller credits are more of a norm in the US, even more so with builders in this slow market with historically high interest rates.

Scott of course will be our mortgage expert, guest speaker at our next US Investment Workshop on the morning of Saturday April 13th at our office in Oakville broadcast live over Zoom.  I thought the last one would be our last as it’s not easy, nor cheap to have as much talent in the room that we do.

We have everyone’s favourite real estate Accountant, my wife Cherry Chan, the CEO, CIO and CFO of Share: Andrew Kim, Dmitri Bourchtein, Carmen Da Silva respectively to explain how to be a USA landlord without all the work but keep all the equity.

Link is in the show notes: simply choose between in person or virtual. https://USAworkshop.eventbrite.ca.  Cost is only $30 plus tax and eventbrite fees.

You can also reach Scott and team at iwin@lendcity.ca, an a custom email address made specially for you, my 17 listeners.  

Please enjoy the show!

To Listen:

** Transcript Auto-Generated**

Transcript:
(00:00) welcome to the truth about real estate investing show I am Canadian investor since 2005 investment specialist realtor since 2010 my team and I have done over $440 million in investment transactions my name is Eran CTO and today we’re going to talk about my guest and I are going to talk about how we one a Canadian can get infinite mortgages in the United States but before we get to that we’re going to talk about uh I haven’t experience this year um I currently have three of my own houses for sale that I’m listing and this will
(00:30) frame uh what I’m seeing in the market so call it a market update again I have three listings uh all best in Market student rentals two in student CA two in St Catherine one in Hamilton I sold one in St Catherine to a family whose child goes to Brock University and they’re going to move in well the sun’s going to move in the student going to move in and rent out rooms to his friends the two others were not attracting the interest I was expecting which is nuts because there is very out very little out there
(00:59) in Supply in terms of uh to buy or to rent uh and I love if you know me you know I love having options when investing I’ll explain my plan was to sell and uh I’m not looking to give away my properties so I put them back up for rent my St Catherine’s property I have a group interested in paying me $4,550 per month inclusive for a house that I’m asking $650,000 for uh we have the deposit already and the new rent would be $10,000 sorry would be the rent would be 10% higher than what I got last year my
(01:36) house in Hamilton is located near mcmas University our showings for rent went through the roof uh in just three days of loan uh we had 15 showings we had actually more than that we had all these Uninvited people asked knock on the door as well to see the house uh we signed a lease with a group of students for $5,950 per month plus utilities that’s an increase of over of around 40% over last year because between the increase in rent and also I’m switching now the utilities from being inclusive to exclusive uh I have first and last
(02:09) month’s rent in hand and uh leases are signed for our house I was asking 850,000 for now these are in my experience are some of the best numbers you’ll see in the market and and as I was ready for Plan B which was to enjoy my higher cash flows and hold for another year um but when I told showing agents what my rents were uh all of a sudden their buyers became interested I’ve taken up the risk of renting up the property uh the rent numbers were uh obviously of interest to the buyers and now I’m sold conditional
(02:40) on my other two listings fingers crossed they firm up uh this is why I love income properties with options as they are they rent for positive cash flow and so I don’t mind holding them I do not mind holding them for another year and based on my expectations and what I’m seeing in the market and also with interest rates expected to be start cutting in in June this June I expect a better market and as I tell the other agents these buying agents I tell them I’m happy to hold on to these properties collect my cash flow and I’ll sell these
(03:10) properties for more money next year Market wise uh this is still the least investor activity I’ve ever seen uh it’s now March so seasonality wise whenever we have a warm winter spring Market starts sooner it doesn’t actually follow the technical definition of one spring is many years I’ve seen February be a hot market and this is a very uh slow spring Market based on what I’m seeing from investors in my expert opinion uh student rentals are one of the top probably top two top three top investment uh strategies in
(03:48) Ontario because the rents are so high uh there’s limited vacancy du and also because we can get regular turnover of tenants students graduate uh for example my Hamilton property the students are graduating uh from their undergraduate programs so they they need to leave they’re going to go home whatever move on in their lives and I have the opportunity to adjust my market rents based on um Market rents uh so again investor demand is at an all-time low uh based on what I’ve seen in my career of being um a coach
(04:20) and realtor specialist to Investments since 2010 uh and again from my experience my properties are quality uh and again Supply extremely low while my rents are at historic highs uh Cher and I will have a hefty tax bill to pay I know many people are asking what we’re going to do about taxes but yeah there’s there’s no avoidance of taxes or death so we have we have significant taxes to pay on those capital gains but to me it’s worth it raising cash and paying down debt will allow us to take advantage of other opportunities as no
(04:52) one knows where this where this recession will take us also one my Hamilton property is is unfortunately part of the rental licensing territory so I don’t even know where that’s going to go anyways next for cherry and I is we’re planning a trip post tax season uh a workation if you’ll call it to visit sunny and warm landlord friendly USA to check out some properties that we intend to buy uh this year we’re going to enjoy some Southern Hospitality Fried Chicken my favorite barbecue a visit to uh the
(05:22) king’s graceand uh you the king of I don’t even know what Elvis was the king of Elvis is Grace anyways Lookout Mountain and the Dukes of Hazard Museum so Terry and I have different very different backgrounds on being raised but uh I you know I gotta see the General Lee I I’m going to take her to Duke Duke the Duke of Hazards Museum I can’t wait as I am a total real estate nerd of course who doesn’t like warm weather I love to make money obviously I’m an investor uh I love to eat good food listen to great music and
(05:56) experience iconic attractions public Service Announcement I seeing some interesting stuff on social media one podcast uh with a bankrupt host is just released a new episode he’s back uh there’s another Guru who’s running ads saying that they are basically financially free even though I know they have six separate parties suing them uh and they are uh former joint ventor partners and coaching clients so wow just wow they even display the testimonial in the ad from a friend of mine who’s suing them
(06:30) so buy or beware do your own due diligence before you invest with anyone do 10 reference checks that’s what I do the more reference checks who made money and paid out the better the better the reference it’s hard to fake being paid cash money unless it’s a pony scheme but Pony schemes generally cannot last a down cycle which is why it’s good a good idea to only invest in a strategy a business partner investment that’s been through the more than one cycle sadly businesses and so-called experts are are
(07:00) going bankrupt right now it’s all part of the cycle U folks who got too greedy at the wrong time they’re they’re it’s unfortunate uh High leverage strategies or difficult flips or expensive cottages on Airbnb in a recession it can be done by well capitalized investors who are strategic bought for Great Value and big caveat anyone who survives this period should do quite well that’s why survival should always be the first priority of any investor uh this is uh and this is done by having multiple cash flows
(07:34) having multiple sources of cash flow which is really important hence cherry and I are working towards building a sixf figure cash flow from single family homes in landlord friendly USA it’s easier there and when there’s no rent control your rents can go up I literally reviewed one of my properties and and I’m getting I’m under rented by almost $1,400 on one property $1,400 would make a big dent to my cash flow anyways if you’re interested in learning more about how cherry and I are investing we are
(08:02) hosting a US investment Workshop Saturday morning April 13th in our office in Oakville and online via Zoom webinar we’ve already sold half the in-person tickets so these always sell out and people always last minute ask me if there’s anything I can do I can’t there’s a whole thing called fire code so we can only have so many people in the office so to avoid disappointment I’ve got the link in the show notes we will be covering economic fundamentals uh for my research the numbers behind each investment corporate
(08:32) setup tax implications and of course financing which is and financing is commercial style which we’ll cover in today’s show uh and if you don’t know financing is the ideal style of of mortgages should anyone want a scalable portfolio because you need a scalable portfolio in order to generate any sort of significant amount of cash flow or returns uh so to give an example I just had a client close on a property uh an 1100t Bungalow built in 1981 I mentioned 1981 81 because that is younger than the
(09:03) vast majority of my portfolio in Memphis Tennessee price was $95,000 American renovation budget 25,000 American rent is $1,100 per month plus utilities American for a single family detached house not to mention there’s no rank control no landl tenant board no rtb for those folks in BC no residential tendency act my client is happy with how much he is going to cash flow and I couldn’t be happier for him on to this we show today we have mortgage broker Scott Dillingham from Windsor Ontario who as far as I
(09:36) know is the only investor specialist who can help Canadian Canadians with mortgages in both Canada and the United States Scott was the number one mortgage broker when he was working at one of Canada’s biggest banks you all know the name of it but we’re not naming names uh likely a quarter of you have bank accounts at this at this firm I know I do uh and Scott I’m a past client of Scotts as well he’s got me several mortgages and my clients mortgages at cheap rates and I’m actually selling one
(10:04) of them Scott has since opened his own mortgage broker called l City he shares how on today’s show he shares how American debt service coverage ratio mortgages work uh that’s what they’re called that’s what they call in the states uh we have them here as well for anyone who does commercial real estate meaning apartment buildings or if you’re buying like a strip mall these are all debt service coverage ratio mortgages and uh we’re going to talk about why this the most effective way to
(10:29) to finance uh income properties and this is the only really the only way to do it on this in this business sense scalable format Scott is a real estate investor himself his portfolio is actually significantly large larger than mine he’s got way more do doors than I do for sure he shares some of his own challenges as a windsor landlord and how he and how and where he plans to buy his next investment property and why for longtime investors you’ll remember the days around 10 years ago when we used to negotiate seller credits um if you’re
(10:56) new to this don’t worry Scott’s going to explain it uh where we were able to bring down our dam payments thus improving our return on investment we’re going to roll back the calendar as seller credits are more of a norm in the US especially with uh new construction as Builders are as it’s a slow Market in the states in certain States many states uh so Builders are offering more seller credits uh while we are in a mar slower Market with historically High interest rates SC of Scott of course will be our
(11:23) mortgage expert guest speaker at our next us investment Workshop that I mentioned earlier on Saturday April 13th at our office again links in the show notes we’ll also have everyone’s favorite real estate accountant my wife Cherry Chan CEO uh and explaining the Canan side of the taxes and also we have all all the executives from share my friends at share Andrew Kim Demitri bin Carmen D Silva and they’re again they’re all spiked to their respective are respective areas of expertise again Linked In the show notes uh you can also
(11:53) reach out to Scott and team at iWin lens city.ca I I have the email in the show notes again that’s iWin lens city.ca i w n l n d CI T y.ca it’s a custom email address made specially for you my 17 listeners please enjoy the [Music] show hi Scott what’s keeping you busy these days all kinds of stuff irn I’m getting my hands wet in all kinds of different projects um one of the biggest and that I’m most excited about is the US lending yeah let’s dig into that should say investing us investing but I do the
(12:39) lending we are well us investing doesn’t work with like like most people will say that investing in real estate doesn’t work without lending like without unless unless we can borrow for for good rates right Y and that’s honestly what’s kept me out States for for like back in ‘ 08 like any sort of real estate education if you’re around any of it it was like widely known right that the US had many FR landlord friendly areas like and then and but the lending was never there so then pretty much everyone was forced to
(13:09) go to Alberta many people got hurt real bad with the oil crash many people made a ton of money in the states at the same time right after especially after the crash like you know like for Ryan P like mutual friend of ours like him and his clients made a killing after the financial crisis uh but again most of us didn’t have the we didn’t have that kind of capital to take advantage and the lending facilities weren’t there and I didn’t know about lending facilities until you told me about it yeah yeah no that’s true and I
(13:44) stumbled upon it sort of by accident myself not really though can I share that can I share the story yeah well you again I’ll go through it in the beginning but you know you’re big time for sure you at the Bay Street Bank you were the number one guy right investor focused so you had people’s attention so it didn’t just stumble by accident no absolutely and and that’s where the problem started actually was was at the bank because people and this is how long ago the the demand was right when I was at the bank
(14:24) people wanted to buy in the states M and I kept asking the bank you know when are we doing this when are we doing this because they’re expanding into the states they’ve got branches there like oh eventually so then I left the bank nothing happened um and then they opened up their version of us lending which is you can buy your secondary home or like a cottage there for yourself yeah so professional use yeah yes and you’re not allowed to rent it out at all right wasn’t that yeah like it’s not like I
(14:56) think if you rent it out afterwards what are they going to do kind of thing you know what I mean but on paper you weren’t allowed to yeah on the closing date it’s supposed to be for personal use so the thing not a scalable model to accumulate a portfolio of properties no you can get one right you get one and tally scalable yeah yeah great yeah that’s great it’s better than nothing yeah but then you know I left the bank started my own company lens City because uh I just needed more options for clients that was
(15:29) really it it was all about the options and I hated making a relationship with a client at the bank getting them their five properties because that was the and then shaking their hand and saying see you later right so I wanted more options so I started lending uh through Dominion Lending and uh we have a commercial team and a residential team so then you know I’m getting in inquiries from from investors all the time saying let me know when you have us lending CU I want to invest there MH and then it it kept happening and I’m like
(16:08) okay like this is this is something and and then I thought back to my bank days and I’m like I literally left the bank because I wanted more options for investors and then here’s the Canadian investing World which is sort of crumbling I hate to say it like it doesn’t you know it needs fixing I love Canada and you know I still invest here but it needs fixing and investors are coming to me saying hey you know we want more options and so all comes down to options then here we are I I was born in the states so I’m like all right well
(16:43) I’m going to figure out what I need to do to be able to lend over there and uh I figured it out and uh here we are now we do Residential and Commercial over there too can you elaborate more how did you figure it out you a special circumstances that not everybody else has yeah so I actually got to give my neighbor credits um this was a a goal of mine right to get us lending and you know in life when and pretty much no one has cracked it as far as I know what’s that no one from our community has cracked this no for
(17:19) sure for sure so this is super cool um but the um like in life whenever anything’s meant to be you know how it sort of happens I don’t have an example to give you per se but everybody who’s listening to this I’m sure something in their life it just happened and it was like meant to be you know what I’ll give you an example actually I do have an example one day I’m on the highway and I’m driving actually I had to go to a real estate event and I’m in my lane and out of nowhere and this has never happened
(17:50) to me before my car went from the Middle Lane to the left lane like the wind took me one whole Lane to the left out of nowhere it’s never happen happen to me like that like you feel the wind but to completely move you but at that same simultaneous time a truck’s tire blew right to the right of me and he merged into my lane so it was like one of those things like it was meant to be that I lived you know what I mean and in life those things happen and so this is exactly how it happened with the US lending so I had a a dream and and a
(18:21) vision of how to do this like I want to do it but the question was how to do it so I think in life when you start opening up your eyes and looking for things they come to you and that’s exactly what happen so my neighbor um who’s also a mortgage broker we do like a mastermind and we talk and have coffee and just figure out what’s working what’s not working and throw ideas off each other to grow and he said you know what one of my past clients he moved to the states and he works at this lender and he was telling
(18:55) me like if any Canadians want to um buy over there that he could help them and he’s like you know what you should talk to them because I told them like the US is something I want to do I talked to the guy and it morphed from a simple referring people to them to why don’t you join us and we can do this and uh that’s what happened so um from there I joined them and then of course I joined a bunch of other lenders as well um so we have multiple options for the clients um but that’s how just a a mastermind
(19:28) session with one of my neighbors right so combine your track record with networking and the opportunity appeared absolutely think it does for whatever you want in life I believe whatever you want if you start seeking it you will find it yeah I’m seeking uh away from the tyranny of being a lario landlord and all the government’s levels of government hating me I still have to return the call from my bylaw officer as apparently a couple my properties fall under uh rental licensing so I’m going I’m just going to whine and
(20:05) say my rents aren’t going up and I can’t really can’t afford this there’s there’s not enough cash flow to afford like the $2,000 plus dollars to to comply to your rental licensing standard and I’m not renting the students anyway so I’m not I’m not the people you’re chasing everything my basements were done with permits you your city inspectors already been semi property I don’t know why you’re bothering me anyways I digress no that’s a problem though everywhere you
(20:30) bring up a valid point though even in Winter they’re trying to make they’re testing it in certain districts yeah but they want rental licensing and the landlords are pushing back and actually they’ve started to sue the city and they’re saying no like our property meets the code and your rules don’t allow for income to be generated from the property and we’re already tight so with the interest rates right so yeah problem everywhere yeah and you know I’m for some sum like like I’m a pragmatist
(21:01) I’m all for like protecting the people’s lives but for example part of the rental licensing requirement is an Esa electrician inspection every two years if I don’t touch the electrical even if I do touch touch the electrical I need a permit for it anyways so why do I need it inspect it as well every two years yeah I think as a landlord you know what I mean it might not be a bad idea just like you have to regularly check smoke detectors right sure they’re good I think that might not be a bad thing for an an investor to to
(21:34) check them right because tenants can tamper with it right so I think from that standpoint it’s okay but to have Esa come in and do all that like Overkill that’s crazy oh and also Ling requires a annual fire inspection which is practical right which Sol which you know solves your your your objection right like solves the problem of smoke alarms right of literally have someone from the fire department in the property that’s that makes a lot of sense but an electrician when you haven’t touched an
(22:01) electrical that makes no sense I I agree I agree might as well get a plumbing inspection too while you’re at it don’t give them ideas true you touch Plumbing Haven it inspected yeah anyways so with the lenders that you signed up in the states like these are like some of them were or like Wall Street like they’re not just they’re not fly by night Regional Banks some of these are as big time yeah yeah yeah no they’re they’re they’re big lenders um like the biggest how names are they not yeah I mean I
(22:37) don’t want to throw out any names here per se but uh yeah we we have some very very big lenders um I’m getting another part of my mortgage license it’s called the M uh n MLS over there so then we can do even more things for investors that license I didn’t it wasn’t my go-to because that one’s more for like the owner occupied stuff and that’s not our Target client um but what it will do is it will allow us that when we have you know an investor who invests over there and they build up a credit score it just
(23:15) gives us more options to potentially get them lower interest rates right right so we are looking that yeah I was still imagine some of your clientele like uh we had when we sent out a survey uh I think 10% of people were actually exploring moving to the states yeah so I imagine that’s within your clientele as well that you have a percentage that will eventually want to move their residents to there as well or at least buy a home buy buy a secondary home whatever absolutely we’ve got a client right now we’re refinancing their home
(23:47) they didn’t know what the options were and so they they’re a snowbird so they live in Florida for half the year and then um actually Windsor for the other half of the year and um they bought at cash right so we’re helping them to refinance so so yes I mean it is it is a thing and we do have lenders that we can refer those files to right now um but soon I will be able to do them but our Niche is absolutely the investor though so Focus there but I actually met a gentleman from Winnipeg when I was in
(24:16) Texas and uh like he was having trouble getting financing for his joint venture Partners I said you gota meet Scott so you’re can so CU he he uh he’s diversifying the states as well uh from Winnipeg uh and he’s there regularly and again like his Jo Venture partners are all back in Winnipeg but like so they couldn’t figure out a way that made sense to get financing in the states like oh here you me Scott so I sent you guys I sent Jillian and him an email to introduce each other um but I think
(24:51) folks need to appreciate that you are an investor yourself can you touch on what your Ontario portfolio is like yeah yeah so at the peak of it it went up to eight properties I did sell off a few um I used the proceeds to buy my office cash now my office um we had it fully rented preco and then Co came and then we stopped renting it out but we’re actually renting it out now so even my office is an investment property I specifically bought it and we subdivided and there’s all these little offices and things like that um fully tenanted um we
(25:30) should be able to get uh 8 8,000 plus HST per month in total rent building and that’s including us still having space in there um so really attractive and uh I bought that four years ago for like 420,000 so the 2% rule applies so I love that because with commercial you don’t have the same rules as residential right commercial you have a lot of the US style rules right you don’t pay the rent they’re out in two weeks it’s it’s much better um so I really really like that um so just imagine like a Wei workor that’s kind of
(26:08) what it is but we’ve got a lot more private spaces where wework is just very open so a lot of courses out there are teaching like high leverage and you’re you’re actually you’re in the business of providing people leverage why the decision to buy all cash it was um I guess to be honest at the time it was because I didn’t understand commercial that well I had worked at the bank and I had worked with commercial clients and referred them to commercial people within the bank um but having one
(26:41) lender and the way that that lender did it was was just that you know you had to refer the file over to somebody in commercial I just wasn’t aware of all the options right so um and what I did I was strategic is I sold the properties that I knew an investor would buy MH um that had you know good numbers and stuff that way they could sell quickly because I had to um the seller of the property that I bought uh they were under he didn’t tell me at the time but I found it after but they were kind of under financial
(27:15) distress so they really needed the money from the sale so it had to be a quick close so it just like made the most sense um I didn’t want to sell a bunch of stocks and have capital gains and stuff like that and mind you rental properties have capital too but I have only renovated all of them too like I turn them all over so I had a lot of uh Capital cost allowance to minimize the capital gain so um it just yeah made the most sense and and that’s what I did um the other thing too though so I’d say
(27:44) lack of knowledge is about 80% of it but the other thing too is when you start a business you want to keep your expenses as low as you can so my thought was if I own the building right there’s no any expense on it besides taxes and utilities that it’ll work and I mean it did it served its purpose right during Co when nobody even used the building um it was great to have no money on it right so and that was what allowed a lot of yeah that’s what allowed a lot of small businesses to survive anyone who
(28:13) owned their building especially outright they were able to survive versus anyone who had rent or big mortgage payments they didn’t do so well in the pandemic yeah yeah so that helped right so that’s a blessing and disguise but now we’re looking at taking out funds on it right because want to invest more in the states and before talking about the states though let’s talk ID money yes idle money there so uh yes we’ll talk about the states why not more property in Ontario you live in W Ontario which is a which
(28:44) from my research should be a great place to invest in my you know I don’t live there but from an outsider point of view like there’s not there’s probably not many better places in Ontario to invest than Windsor with your affordability and the job story that’s going on yeah it’s it is a great area to invest I I’m very Pro Canada and and I know you are too I just want to announce that I don’t want people to think we’re we’re against Canada um when there you’re right there’s lots of good areas um we just
(29:14) got um a listing that I shared with some investors the purchase price is 500,000 uh it’s got three units and it can rent for 5,000 a month right so really when I grew up up into the investing world right the 1% rule was was what we were told is is good so if you can rent a home for 1% of its its value yeah then you’ve got a really strong property so I mean they’re here the properties are here but that’s not my challenge right my challenge is the system and that’s where I think things are broken now things are improving I
(29:54) just read an article the other day I wish I knew the source and I would it here but I don’t but they’re saying you know the Ontario tribe they actually hired a bunch more people again so they did a round of hiring in the past and they’re hiring a bunch more again to really shorten the weit times so I think that’s important because investors waiting eight months to get a non-paying tenant out is a nightmare that can best case that’s like a best case though yeah and that that can absolutely bankrupt
(30:27) someone and in fact I’ve seen it do that for certain investors right depending large your portfolio or small it is so you you’ve got that problem and I you know I’ve got a great story that I can share with you about that problem um but then the other thing is is rent control so you look and I feel for the tenants too I I want to state that like it sucks to live in a home when you’re on a fixed income and then if you’re Ren of skyrockets like that does suck right but at the same point um we don’t control where the
(31:02) interest rates are going and what they’re doing and when they went up people renewed even myself on one of my properties I had to renew and my property went from cash flowing a couple hundred dollars a month to actually losing 1,800 which is crazy because my mortgage just the renewal rates were four times higher than what I what I had it at so you know for an investor most people can’t take that type of a loss so it’s it’s it’s huge so the lack of rent control I think is a problem I believe if there was a no rent control
(31:41) let’s say and the rat Skyrocket like that and you’re going to lose your home right then you can raise the rent and it you know what it does suck if that tenant can’t pay but they could find somewhere else as well that might be affordable to them if they can’t pay the rent and then you put someone in who who can afford the rent so it’s a lateral thing but um in Canada we don’t have that ability so the landlord eats it all um yes and and I joke been joking with people that uh we are charitable in
(32:13) that we are subsidizing all the tenants housing inflation yeah not all of it but a good portion of it since we can only raise rents 2.5% when inflation’s for like seven it’s true and I saw this Tik Tok video and it was so good uh and it said something like you know if I were to go into the bank and Rob them for $10,000 I would go to jail but as a tenant I’m allowed to do that without really any penalty in Canada I’m is your right not pay the rent and live in the home for all this time it is your right
(32:49) I’m not a criminal here some free legal a too he’s a free lawyer yeah so like that should be a crime and in the states as you know certain states it is a crime if you don’t pay a rent and you can go to jail for it in certain States that’s the key part is that people like America is different just like states are different counties are different no different than parts of Canada are different yeah Alberta does not have the same problems that Ontario does for sure but they’re trying to force rent control
(33:20) in Alberta I won’t be surprised if we see something for like Calgary it’s just because they’re just uh you know like that’s another that’s another topic for another day sorry before you were recording though you were mentioned that your own story because you have a property you want you have listed right now yeah yeah yeah so the one that I’m actually losing 1,800 a month it doesn’t make sense to keep it right why keep a weak property so you want to sell that take your capital and reinvest into
(33:49) something that makes you money it’s it’s a smart business decision I can’t control the rates right now and and they are coming down so like you know I see some L at the end of the tunnel um but it is what it is so this specific property um you know I put it up for sale because I want to redeploy the capital somewhere else and then um just during this process the tenants were really good to work with uh in the beginning they were um allowing us to to show the property and things like that um and this week alone they text the
(34:24) realtor and they’re like don’t text me again we’re not allowing you access to show this property I’ll report you uh if you text me again like that’s literally what they said to the the realtor um so you know you got that problem then they also um I don’t know what they did specifically um because they’re giving multiple stories like the one kid said oh I you know I spilled a water bottle in the basement and then another child told a contractor that went through there that he fixed the water leak
(34:58) whatever that means but anyways I got a quote for like 10 Grandin of damage in the basement so I feel like I don’t know and I don’t want to point fingers but it feels like you know that happened right before a showing and it just seems like they’re trying to make it so the property doesn’t sell right they’re avoiding the showings right um they it wasn’t flooded the basement but there was enough damage that to rip up the flooring trim all that stuff 10 grand you know what I mean like week or time
(35:27) too to get it done yeah and I don’t even know if I want to get it done while they’re there because is is it going to happen again do you know what I mean like already happened once and then so for me to process the eviction right if if that’s what we’re doing here eight months maybe longer right of of this so it’s just it’s not a good scenario you know what I mean it is what it is so it doesn’t matter if you’re a new investor or an experienced investor these problems can apply to anybody that invests here
(36:01) anywhere on Ontario yeah potentially BC as well is that before before we were recording I was saying I would pay them the 10,000 to leave because this is what this is the this is the situation that we’re facing onario is that we are we don’t have control over our own properties um it is a almost a standard operating procedure to buy out your tenant to compensate them for their moving expenses and the grief of moving in the figure of you know 5 to 25,000 yeah and uh but this that doesn’t happen in the states not in the right
(36:38) ones not in the right ones it shouldn’t be that way I think I agree In fairness on both sides I think there has to be because I I got to say too you know seeing lots of clients and stuff there’s a lot of landlords that don’t care they’re actually very bad landlords oh yeah so I understand the tenants and how they feel in certain cases when you’re a good landlord and you’re doing all the things properly for these things to be allowed to happen to you I completely disagree with yeah yeah the failures of the
(37:09) landlord tenant board are the worst for the tenants because they often have nowhere else to go and they have real problems yeah right say your problem was a say your property had a had truly had a leaking basement and the landlord wasn’t willing to deal with it you know that means mold that means sewage that means terrible Health implications right and that same tenant will need eight months to get a hearing the landord tenant board right to get any sort of forced action on it like it’s ridiculous Y and and the other
(37:40) thing too is like because when I heard that from the showing from the realtor that did the showing I called my property manager and I’m like hey there’s water in the basement send somebody out to fix it they called the tenant and the tenant’s like oh no there’s no there’s no issue here everything’s fine there’s no water do you know what I mean not only are they like hiding it but they’re they’re not announcing challenges which could cause more challenges right like mold you just
(38:05) said mold Could Happen yeah yeah so craziness craziness and then what are your plans to do with the with the proceeds if it ever sells yeah this is a great this is a great uh promotion for your property yeah I’m not sharing the address with any’s the address the realtor um who want a motivated seller the uh the the proceeds yeah I mean I want to uh invest in the states uh that’s that’s the goal um and and I’m not going to like completely exit Canada I want to invest here I love the commercial thing that we’re doing with
(38:45) my office uh that is duplicatable and repeatable right and and scalable um so I want to continue that right so there’s a lot of good things in Canada it’s just the states when it comes to residential properties in the states that I like you can get so much more income so much more flexibility um I don’t even know if this the word but there’s a pride of rent toship in in the states and areas that I’m looking at um it’s not like I don’t know it’s hard to explain you got to see it believe
(39:16) it uh what What markets are you targeting for for your own investments just like you I love Texas uh I love Texas I tell Texas but how can you tell I like Texas I don’t know give it away I just have this feeling for anyone who’s just listening I’m wearing my Texas hat so yeah yeah Texas is cool did you know this is more of a did you know but did you know that Texas has the legal right to be its own country if it wants to oh my God that’s probably that’s probably on the horizon it totally can be its own
(39:51) country um it can separate from the states no problem if they wanted to yeah um let me just add though like I doubt it will happen but it’s a great leverage tool to get what they want in in the negotiations with the federal government right like we see the same posturing we’ve seen the same posturing the P from like Quebec and now from Alberta and that got them benefits right Quebec Quebec as a province benefited from it Alberta will benefit from their posturing as well and I’m sure Texas will gain from it as well I can’t see
(40:17) them actually separating no for sure I don’t see it either um but I also like uh Ohio and I like certain parts of Michigan because Michigan is really close for me it’s literally I just cross a bridge because I’m in Windsor right so I just cross your bridge and there’s Michigan and you know driving through and going shopping with the family and because there’s all these really nice malls in Michigan so we’ll make a you know a fun day of it we’ll go see the mall but we’re also driving through the neighborhoods and
(40:44) stuff there’s some really nice areas and uh Michigan and Ohio have really cheap real estate prices so it’s just different different targets right for appreciation I think I like the southern states better um if I’m looking for cheap real estate with maybe like a stronger cash flow ratio maybe not dollars in the bank but ratio obviously Ohio and and Michigan will give you a higher ratio of cash flow um but yeah just buy a little bit here a little bit there um want to get some airbnbs in Florida as
(41:21) well so then you know in the when it’s not rented it’s available for myself if I want to use it know let me know what’s available sure the ni thing about Florida is like nobody can beat that weather you know what I mean yeah like maybe California can but California is pricey uh and also you know you and I are our East Coast folks which is like I should correct myself because there is no Coast in Ontario we don’t actually touch the ocean but you know what I mean we’re Standard Time Florida is just
(41:49) straight to South for us um and I just want for listeners benefit I too agree that I want to go south um cuz for example you mentioned Ohio uh Columbus Ohio is getting an Intel plant uh so that’ll be thousands of jobs it’s a multi multi- it’s a several billion dollar investment but also Phoenix Arizona is getting the tsmc Taiwan seg conductor manufacturing company is building like Phoenix there’s someone else I’m gonna look it up right now but there um there’s a Sam not Sams in Austin Samsung’s in Austin Austin that’s
(42:22) it okay yeah yeah yeah so there you go I was out I was I was probably making security nervous by standing on the property taking [Laughter] pictures anyways uh but so when investors ask me like oh how do I choose like um like I I say to them like okay so you’re say for example you work in manufacturing microchips you an employee of the you can you’re you’re qualified to work for Intel or tsmc right which you choose to live in Columbus Ohio or Phoenix Arizona and not one person has told me they’d rather live in Columbus Ohio than
(42:56) Phoenix Arizona so I will prefer to invest South right because that’s gener really demographically like like people have roots and family whatnot but you know for someone who’s that doesn’t have Roots anywhere and there’re moving specifically for work I’m going to guess that tsmc will be have more luck recruiting for Phoenix Arizona than Columbus Ohio hence why like Columbus Ohio on paper makes a ton of sense but again like demographically and we see it demographically as well it’s generally
(43:26) people have moved South for the better weather like largely for the better weather yep and it’s the same as here right we all live in different locations for certain reasons yeah right so like you said you have to come up with your why like why do you want to invest there what is it you like about the area um I like making money that’s why I like investing there yeah but I mean in both you got to admit Phoenix Arizona and Ohio you’re gonna make money in both but it’s just like you know yeah just for me because I
(43:57) want I want like every check mark in my favor and also because my plan is to buy in like you know Carolina’s Alabama Texas Tennessee Georgia you know I only have so many dollars to stretch yeah and the other thing too just for the listeners here the reason I like Michigan and Ohio is they’re so close to me like I’m in Windsor Ohio is maybe two hours away and Michigan like I said I just drive across the bridge and it’s right there so that there’s a level of convenience for me but people in GTA
(44:29) like yourself you don’t have that super close proximity I mean you got Buffalo New York I’ve had a lot of investors buying Buffalo which did a it was a duplex they bought it for 220 and it rents for about 3,000 a month yeah um but still I agree with you right the southern states I think it’s where it’s at and like you said it checks off more ticket boxes yeah I think I heard some things about Buffalo’s becoming more tenant friendly so I didn’t like those Rumblings that could be that could be
(45:02) I’ve not researched it as an area that I want to invest in so I didn’t look that far into it so Scott tell me about how a US mortgage works for a Canadian because um I find almost nobody knows how these things work including myself until you brought it up to me back in like August 2023 yeah so pretty much you want to buy in a company name or limited partnership we do have it’s very few lenders but we can close in the personal name but if you want best rates best terms right you want to close in an
(45:41) entity and a COR now I’m not licensed for tax advice I know Cherry is do you have any advice from her from a tax perspective on what’s better between personal versus limited partnership are you allowed to say that uh I’ll just you know give the regular disclaimer I’m not an accountant go talk to your accountant uh but personal is seems to be more for people who are going to be very small scale okay right because uh the accounting fees are significant if you’re going to if you have a corporation of any sort right
(46:16) because for example if for investors in Canada if you already have a corporation you know what your fees are like and you should expect to to you know to have basically the same in the states right that’s the cost of doing business for a multinational bu Investment Company right and so my advice to clients is uh this us investing doesn’t really make sense unless you buy at least three properties so then you can generate enough cash flow to cover all these extra expenses and overhead right and if you’re going to go
(46:43) that if you’re going to own three or more and your plan is to grow because my first for example my plan is to grow to 20 30 properties like it makes sense that I go LP format at least yeah right and and that’s the importance of having a good team because your uh your accountant needs to be able to talk to your mortgage person so that you’re all in the same page because what’s optimized for tax is not necessarily optimized for lend for borrowing yep because you do not want to get this wrong sure but no you you bring up good
(47:14) points and and that that’s exactly it I think that’s why the lenders prefer it too so then the down payments they can range okay and generally speaking the more money down you do up to 50% that’ll get you the best rates so the very smallest down payment I saw it’s only available for Rock Solid deals is 25 down but 90% of the lenders are going to want 30% down or more okay now where they get the or more from is because the other thing that they look for is is the cash flow of the property so if the
(47:59) property has a weak cash flow some of the lenders are going to want you to increase your down payment to the point where have positive cash flow so that’s why it can go higher but we have other lenders that don’t care what the DCR number is but what they’ll do is they’ll charge you a higher rate because it’s riskier for them to lend on properties that don’t make as much money so then they just increase the rate but keep the down payment small so kind of how that starts but for a Canadian uh buying and it’s actually
(48:30) any foreign buyer doesn’t have to be Canadian so if you’re listening to this from Mexico that you know this still applies yeah um they don’t look at your like you don’t need a credit score in the states um they don’t even look at your income at all um what we have to supply them is pretty much your Canadian credit report and they’re not even really looking at the score uh they want you to be a homeowner in Canada or own an investment property um because they don’t want to lend to someone who has no
(49:00) experience do you know what I mean that’s kind of their thing um or or may think you’re trying to buy something to move into ver have your home here then you’re less likely yeah exactly exactly and so those are things that they but these requirements are all very minor super minor yeah it’s so easy um and then of your home that you have if you have a mortgage on it they want to make sure that you don’t have any late payments on your mortgage so that’s really what they’re looking for from
(49:31) your Canadian credit they’re not looking at your score um they’re not looking at uh the other items as well so um from that uh they’ll move forward now you know your down payment they do check a 60-day minimum some lenders want a little more but the smallest one that we have is 60 days um right anti money laundering rules just like Canada Canada has 90 days they want 60 days of proof of where your funds are at and they want the funds to be in the states so you’ve got to really transfer the funds at least 30 days before the
(50:11) closing okay just so it sits there so that’s a requirement um some lenders you can sign fully remote so you don’t have to leave Canada at all some want you to at least sign with um a notary or someone in the states sign with someone in the states um so it all depends and that’s part of our Discovery call that we have with clients is we find out if they have the capacity to go to the States because if you can you will get better pricing because the lenders right you got to think of it from their Viewpoint their is if they can reduce
(50:46) the risk yeah then that you get a better rate so so if you can go to the states it’s less risky to them because you’re a validated person yeah you get the better rates yeah I’m down for that I’m down I’m cheap I’m coming N I come the property too you know what I mean so it’s it’s worth it the view from the US side’s better too so yeah yeah so that’s really it like I know I’m I’m being so high level um the pre-approval process it is really is there that much beyond the high level
(51:20) though no no I mean there’s there’s rules and things that they look for it’s all pretty standard and if client is following like you said at the beginning you leverage your team properly and if they’re following Our advice and the realtor’s advice like we’re help you to make it work right so there’s not going to be a big thing there is an application you got to fill out there’s little things like that but we help you with all of that um but yeah super super simple I had a great point I forget
(51:47) where I was going with it but um a good point yeah me getting a be lender mortgage is worse than this process yeah yeah and they give me they’ve been giving me crap ltvs too it’s me Equity takeouts even though I have lots of cash and lots of equity like this is start to to put words in your mouth but actually apologies because you actually said it uh you said at the at the last us work investing Workshop we we had I believe your words were it is 10 times easier to borrow money and build a portfolio in the states than it
(52:20) is in Canada 10 times easier yeah yeah they just want to see you have really the down payment they do want you depending on the lender this is another condition between 6 months to 12 months of of payments um that can even come from a line of credit so you don’t even have to have the money in your bank account but they just want to make sure that you can pay it in case there’s a vacancy or whatever now those funds they do not have to be earmarked so on a future purchase you can use those same funds to
(52:51) count as your payments right you don’t have to keep growing that um but yeah then from there it’s super easy it’s it’s simple now I want to share something with everybody too that we discussed and that’s the seller credits you think that’s yeah yeah yeah yeah because we we used to have those yes the good old days yeah please explain because I haven’t we haven’t talked about in the show we haven’t talked about it on the show for I don’t know if ever because I don’t when was
(53:19) the last time we could do seller credits in in Ontario I honestly Irwin probably 10 years ago because when I first it was acceptable we actually did it in Canada as someone’s down payments so the purchase price was 200 the seller credit was 10 grand to be applied as the down payment and the lenders were okay with it when I first first started right right right and then it went away it was gone so for the listeners benefit to catch them up uh around 10 years ago we were able to um get sell our credits for
(53:50) for uh our closing cost for example that was the most common one we’d ask for and then any sort of we’d ask for even seller credits for any sort of deficiencies we’d find in the home inspection like say the electrical is bad so we need like $5,000 we’d asked for a credit uh in in the in schedule a of the uh agreement of purchase and sale so it was all above board lenders see it all right that all stopped like around 10 years ago as well yeah yep but they they have it in the states so the right because everybody wants the
(54:27) best rate and by default if you look at the state’s rates versus Canada’s rates they are higher in the states than in Canada by default doesn’t matter what lender you’re going to um it’s just how their Market is we have lower rates here so what you do as a Canadian who’s buying over there is you ask for a seller credit I’ve spoken to a few realtors in the states and they said anywhere between two two to 3% of the purchase price is extremely common over there like extremely common now I’ve done the math for many
(55:07) investors um and uh you make out much better getting the credit and I’ll explain why in a second if you lower the purchase price on the home now ideally you want to do both right you want to try to negotiate a lower purchase price and also get a credit but if the seller’s being really tough MH get the credit okay now what we do is we can use some of that credit there’s limits to how much we can use but we can use some of that credit to buy down your interest rates so right now the lenders depending
(55:39) on everything and I’m going to like just a blanket statement rates the average is between eight to nine and a half and they’re so different because in the States you can make your mortgage fully open from day one but that cost you 1% in the rate to do that that um but then as an investor right you can refinance whatever you want to do right it gives you flexibilities also certain States like New York right there’s higher rates if you’re fully open you can do a bur then exactly you refinance cheaply in
(56:10) yeah you can refinance after post renovation exactly so so that’s why I’m giving you such a range right so 8% is just the standard um n and a half is you want it fully open like you’re good to go but then you can apply the seller credit and the seller credit can get your rate down to as low as 6.
(56:32) 5 that’s the lowest that the lender will go or that I’ve seen A lender be willing to go to um as of today now it changes right so in December the lowest they call it the floor rate the floor rate in December was 7% but now it’s come down to six and a half so I suspect as the rates drop in the states that the floor rates will also come down meaning you can secure that that lower rate but just by adding um roughly let me see if I’ve got the deal real quick I’m going to pull it up here uh I know I have it saved but we worked on one and I
(57:09) actually presented it to your group and I just want to give everybody here um the example so the client was buying a condo in Florida and uh it was around 300,000 uh let me see here and ,000 yeah and he asked for a 2% seller credit so he got 6,000 bucks and I’m just pulling this up here let me just add to the Celler crater part and when I was in a in a new in um in a built in a developer’s office there they were building new homes in Texas they were offering seller card at at the promo and uh they weren’t
(57:55) offering that off the price but they their suggestion was to buy window coverings because it’s a brand new house so there’s no window coverings period right so putting some like you know um Venetian blinds or something whatever right and also they’re buying down the rate so yeah just not something we’re too used to back here yeah and you can use it for other stuff too so like say you negotiate a 3% um seller credit the lender will let you buy down um and I’ll show you here in a second but the client only negot at
(58:25) 2% so he put all the money towards it so anyways if we take his $6,600 and we pay it down to the rate so he would have received 8.375 okay so I know I said rate started at around eight but this was a condo and the DCR wasn’t that great because it also had um an HOA fee which is the same as like a condo fee over here like it’s Home Owners Association fee so condos are priced a little bit higher because their cash flow is a little bit weaker so so he couldn’t get the floor buy down rate but he used that money and he
(58:58) bought down his rate to 7375 M so he was very happy with that when you shop the market at what that rate looks like was very aggressive for this this time and all came from the seller so he didn’t have to no skin off his back right and he saved by getting that seller credit $150 a month in cash which is crazy yeah and then his more of his payments were going to principal because he wanted principal and interest although you can do interest only but his he he just wanted to pay this thing down um so now more of his payments go
(59:35) to pay it down and everything all because the seller gave him the credit so it’s such an awesome tool I have so many questions that’s okay can you I I still think the point needs reinforcing like how much easier is it to get a mortgage in the states than than in Canada 10 times it’s so much easier like who who gets denied because I get denied on financing here in Ontario yeah you know I I think the biggest challenge that I’ve seen with any approvals is when you have all kinds of Partners involved right um because the
(1:00:15) lenders if it’s too convoluted in this partnership on that one and that one owns there it’s hard for them to track so I honestly find that the super complicated corporate structures that’s when the lenders are just going to say okay we’re going to do it but we’re jacking up your rate because we don’t understand what you’re doing over here it’s crazy and so they do charge you more if you have that complicated structure I’ve not had an application declined because of that but
(1:00:42) it gets confusing for them that they’re not in the business of knowing all these corporate structures um so you’ll pay for it so so that’s kind of been a negative that I’ve seen um and then obviously right you can’t have payments on your house mortgage but I haven’t had any clients that had that but that’s a hard like you’re declined if if they see that um so it’s all reable yeah and they don’t want the last major thing for somebody is they don’t want very rural properties okay because you’re a foreign
(1:01:13) buyer they’re looking more for cities so buying in even small towns are okay but they don’t want like you’re the only house you know five miles that way and five miles that way they’re they’re not into those right cuz they don’t want take it over they don’t want a bad asset exactly sounds very reasonable uh I don’t even know where I want to go next so uh oh you mentioned dscr and I had a question around that okay so sorry can you explain what goes into uh a Debt Service ratio mortgage what are the what
(1:01:47) are what what’s the calculation and what are the inputs and actually yeah this is great and I’m going to tie it into the statement that I was going to make about pre-approvals as well this is how you get PE proof too fantastic yes yes so what we do is we get the numbers of the property so we find out the estimated purchase price of the property so that goes in the DCR then we factor in the property taxes we find out if there’s a homeowners association fee um we find out the hazard insurance is what they
(1:02:19) call it over there which is home insurance so we find out what that is and then lastly we find out what the mortgage payment is right like what rate you’ll qualify for based on all the numbers that’s it that’s the only thing that goes into the debt service coverage ratio and based on that we get a net DCR result so if that’s a good results then we can write up a pre-approval letter for you that you can give to put in your offer now because of capacity we don’t just write pre-approval letters because I had
(1:02:54) one investor and he gave me like 20 properties and he’s like can you give me pre-approval letters on all these and I was like no like what run all the numbers exactly he wasn’t so we we can run all the properties for you but we only give the pre-approval letters when you’re ready to put an offer on the home right because it it would have taken a few hours to do this for this gentleman and he ended up not even offering on any of them right so we have to be careful of our time um but we will we’ll write you that
(1:03:26) pre-approval letter which I’m going to say nine times out of 10 uh the the sellers want to see this they want to see this letter now obviously if we’re doing a deal with Sher so Sher has a great and I know you guys who follow Irwin know share but just in case right Sher finds the properties underwrites them turns them over and rents them out and you get a turnkey property so something like that um you’re not going to necessarily need a pre-approval letter for right because they’re going to or or do they want one
(1:04:01) I don’t think they they want a pre-approval letter I don’t think they know I don’t think they need to because they they know they have proof of funds and they know what the property is yeah but if it’s you know you found the property on the market those are the things that you’re going to need and we can do that for you right right and we we share the tool too we’re not we’re not shy we share the tool for anybody you can download it and it’s got the 30-year term right next to the 40-year
(1:04:28) term so then you can kind of compare because maybe it’s a little tight with the 30-year but the 40-year works you mentioned 30-year terms uh are there going to be so so my understanding is that the in the states is the market is generally 30-year term mortgages as in your rate is your rate is fixed for 30 years so again as a Canadian like that just boggles that boggled me and it boggles everyone because that’s not what we’re used to here in our Market will are there going to are we going to see shorter uh amortizations terms anytime
(1:05:03) soon because I gota I gota imagine the market wants it especially since uh every all indications are that we peaked in rates there is we’re refinancing another property right now in Florida and the gentleman he’s got a 15year term on his so you you can get shorter but the thing is is for an investment property is it going to cash flow if you choose 15 years amortization or term they make it the same thing over there oh boy okay yeah no thank you but you can go with 30 and you could increase your payments if you want which
(1:05:38) will technically shorten the amortization um but that’s how they do it in in the states they don’t have separate terms like in Canada where the amortization and the term are two different things yeah it’s the same thing over there right right because I want a cheaper rate So speaking of Cheaper rate uh is there a way to build Credit in the states and is there a benefit to it and how do you do it there there is yeah so um The Lending is one part of it right so having the mortgage so it just depends on your entity right
(1:06:07) whether you set up as a corporate personal um these mortgages um from what I’m told they don’t build personal credit but they will build credit in your core yeah good enough I just want cheaper rates at some point yes so then you’ve got that credit now lenders they want you to have one other item so I opened up my bank account through coer when I set up over there com Bank name a whole bunch I hear Chase is really good for Canadian too um but the reason I chose Comer is well one it’s local to us um but two um they
(1:06:45) don’t require you to have a Canadian address or sorry a Us address to set up the account a lot of the banks want that um so anyways when I was there the guy told me he’s like look if you bank with us and we see your transactions and we see what you’re doing he’s like reach out three months six months and he’s like we’ll give you a credit card and he said you know what if if we don’t by default then we could give you a secured credit card and then that can help to start building your credit history and
(1:07:18) then from there once you’re getting that history then your pricing can go down because we’ve talked about this in the past everyone but it’s great for the the podcast here generally speaking the lender’s price as if you’re credit score is 680 as a foreign buyer um but it’s cheaper right if your score is higher than that so that’s why you want to build that credit history um but in the same point Irwin the floor rate is the floor rate they’re not going to go any lower regardless of your credit score m so if
(1:07:55) you’re getting that seller credit and you’re applying it and you’re getting that best rate your credit doesn’t necessarily come into play you know what I’m saying yeah but then I’ll try to i’ run a cheap raid based on my credit and I’ll use the seller credit for something else like you know yeah change the floors remove the carpet paint the house something like that yeah you can you can and um one more thing about the rates because it is it is lowering um over time just like Canada
(1:08:24) and what these lenders do is by default the longest I’ve seen is your mortgage is fully open after 5 years so they open it up the shortest I’ve seen is you’re open after three years and that’s without paying a rate premium that’s just built into automatically their mortgages that’s amazing that’s how it is with every mortgage after a certain period it becomes open in five years is usually the maximum right but if you’re an investor and you feel the rate is going to be lower in one year
(1:08:54) you can do open after one year or you could go open after two so obviously fully open has the full 1% rate increase but open after two I think it’s only about half a percentage higher on the rate so it’s not a big deal but if you’re concerned right and you want to wait because rates are going to lower um you don’t have to right just do open after two right you’ll get appreciation you’ll get that cash flow for two years and then we just change lenders or even maybe even with the same lender just
(1:09:24) refinance get that lower rate and you’re good to go right so just a highlight for The Listener benefit R are expected to bottom out in about two three years so to be open after three means you can pay you can pay off that mortgage with another mortgage at the bottom rate yeah which is strategically what everyone should do refinance when the rates have bottomed out that’s right and and it costs you nothing in terms of versus I have uh I have to I have a mortgage uring uh at the end of this month for my
(1:09:56) investment property that I’m currently selling so I have to renew my variable mortgage and so when I do have to break that mortgage that’ll be three months interest thank God I don’t have a huge mortgage that’s 30 that’ll be roughly $3,600 but you’re saying I don’t have to go through that I I won’t have a break fee once the mortgage goes open that’s right and just to share this with you Irwin you want to price it out but you should be able to renew into an open term um so there’s no penalty but the
(1:10:24) thing is the bank or lender probably has two open terms usually it’s a six-month term or a year and for some reason the six-month term is like 2% higher I’ve seen them coming at 9.99 for some reason um but it doesn’t matter if you choose the year because it’s still open you know what I mean so I would inquire on that because selling um you know this podcast here could just save you three months worth of interest if you r new into an open mortgage yeah yeah yeah but yeah the open’s 10% but yeah but they
(1:11:00) have two ask them what their other open is if they’re telling you 10% because they have the year is usually cheaper the year’s usually about what variable rate is okay check that out for the listener’s benefit Scott got me this mortgage so he knows exactly what I’m doing but it wasn’t a lender that I no longer work for so I don’t have you are an Insider yeah tell any you the SEC yeah so how how long roughly would it take to for someone to build uh significant credit to actually save on
(1:11:31) their on their mortgage interest rate well my favorite lender um they will you have to have the mortgage for one year and then you just have to have any credit any other credit item and you could have just opened it there’s no timeline so even if it is a secured credit card right you open that then you qualify to use your credit score for the pricing instead of default 680 mhm so yeah after one year so Scott uh fun news this back of the day I actually had lunch with a um a 20-year plus uh uh Executive Vice
(1:12:12) President of CB yesterday who’s been in commercial real estate uh never invested in real estate though before because you never thought you never found deals that made sense especially with residential tendency like it’s not worth the risk so I’ve been I’ve been regularly talking to people who are in the industry to poke holes in my thesis that investing in you know boring landlord friendly Southern States is a good investment can you like you’ve been around a long time can you do you got any holes to
(1:12:44) poke and I welcome all listeners to reach out as well poke holes in my strategy please here here’s I think the most important thing and I think where investors can fail is not having the right team and you already absolutely because you’re investing long distance and if you don’t have the right team if you’re not regularly kept up to speed with what your property is doing you’re not looking at the sheets that come in from the property manager right and inspecting things um you could you could
(1:13:19) have a huge mess on your hands that you don’t even know it’s there so I think you know locally here people want to use the realtor that their friend recommends or my mom says they’re great so I’m going to use you um and even though I think that’s a huge mistake for investors I feel like if you’re an investor you have to work with somebody that understands investors you have to because otherwise the realtor will just sell you a property and say oh yeah you can rent it out for X meanwhile it’s
(1:13:49) right next to the methodone Clinic where you don’t want to have tenants do you know what I’m saying like where a good investor focused realtor will say no you don’t want to buy there you want to buy over here so I think that’s super super important when you’re building your team across the border need to make the proper team or I think you could fail I don’t want to say you will fail right because the numbers and the landlord control it’s so much better um but I think you could fail if you set
(1:14:18) it up improperly no absolutely and just to add to that uh I’ve said this on the show I say this to my clients uh the greatest risk to an Ontario landlord is actually the tenant in my opinion if they don’t pay if they cause damage to your property your investment will be really challenged it’s going to strain it’s you’re going to lose sleep it’s going to strain your relationships right but we don’t have that same problem in the states we’ve eliminated that problem so then several steps down I believe is
(1:14:44) property management is your greatest risk um and and in my experience in Canada is there’s no really big property managers who have scale that will work with retail investors right versus I feel I’ve removed that risk by going through an asset manager like share in the states so I’ll have an asset I’ll have a property manager they’re going to negotiate and manage that relationship with property managers who have thousands of houses across the country under management so they have scale they
(1:15:13) have systems right they have accountants lawyers trades people on staff bringing down my costs that gives me the economies of scale yeah but I want to go back to team though because uh something that’s again something unique to lens city is you’re in Windsor right your team is all Canadians and asides from the Americans but what is the benefit of being able to do all your financing Under One Roof like I’m a Canadian like I I’m G to and I’ll have a question for you later on hilock and stuff but again like is it
(1:15:45) not advantageous to have both your us your Canadian mortgages and US mortgages Under One Roof yeah it it is and it’s it’s funny because I see um I’ve been to different investing events and there was um some us lenders that came to this event and it was in Canada um but this network is North American wide so they do events in the states and here and and so the US lenders pitch was we’re boots on the ground you know use us but the funny thing is is they’re actually one of my lenders I don’t need to be boots on the
(1:16:26) ground to get the best rate but the beauty for a Canadian is um we can synchronize everything and it truly is a One-Stop shop so in the states um if we know what’s going on in Canada a lot of the conditions that you’ll need for that us mortgage we can satisfy for you yeah yep they have six to 12 months payments for to cover the mortgage yep the other thing too is we get paid by the lenders in Canada if you’re refinancing your home and say buying over in the states so another thing that we do is our investors that will work
(1:17:04) with us we’ll give them a break or a reduction on the fees so generally speaking the fees range from 0% on a mortgage in the states to 3% now the 0% fee lenders they’re going to have a higher rate so you’re still paying for it it’s just built into your rate the two to 3% lenders you’re getting best rate um but there’s there’s fees and I’ve run the math for a client um and it actually is cheaper to pay the fees because it’s like a onetime costs and then to get that lower rate forever than
(1:17:35) it is to accept the higher rate then that you’re you’re paying that forever right unless you change your mortgages but anyways we we’ll go to the lender and be like look we we got paid on the Canadian side here so we’re okay we’ll take a reduction and pay on on the US side over here um so it helps the Canadian to to save money um and then the other part of it is is because we are in Canada and we’re investing in the states we know the troubles that a Canadian is going to go through getting
(1:18:07) started where us lender you know they could claim hey we’re our headquarters is right here in Florida uh and they may be able to provide the lending they still haven’t went through the Journey you know what I mean so they’re not going to be able to give that good advice or you know hey watch out for that over there or we’ve got that so I think that’s what’s really important um and it works both ways actually now we’re getting us lenders because they can’t do it they’re actually referring
(1:18:36) us Canadians that want to refinance and then buy over there as well so we’re getting that now too so with us you don’t need to do that we have multiple lenders in the states we have multiple lenders in Canada we just optimize your flow and residential and Commercial and I got to be honest with you I did not expect this when we met and started talking about doing this Irwin I’ve actually done more commercial deals over there than I have residential deals I was not expecting that but there’s lots
(1:19:04) of apartment buildings that we are working with lenders as we speak to to fun so it’s it’s really interesting but I do think the um you know single family Southern States different things like like what shares doing I think that is very key um especially for the investor that’s getting started because it’s the path of least resistance and it gets your feet wet it allows you like I just said to go through that journey and experience everything and once you’re more Savvy and you want something bigger
(1:19:35) and better then you go off right and you start doing your thing yeah I’m just cranky and old and boring so I just can’t keep it vanilla but but that’s actually great brings up a great Point what is the difference what is the process how is the process difference for uh mortgage getting a mortgage AG for an apartment building compared to a single family home yeah so over there it’s really hard to find the first lender now we’ve got them um but a lot of times in the past a Canadian had to partner with a US
(1:20:07) citizen to be able to even buy an apartment building and um so actually a couple of our deals we’re refinancing them to get them out of that um but we’ve got the foreign buyer lenders that will move forward now but pretty much it’s just like um you know if you’re buying an apartment building through cmhc so we um we go through Freddy so we went through Freddy uh it’s called Freddy for anybody who’s looking at this small business loan um and it’s insured so it’s for apartment buildings it’s through the
(1:20:46) equivalent of cmhc but in the States you know there’s Freddy and Fanny um and they they run the numbers right and they’ll tell you based on the income the property is generating what you can qualify for as a lending and the and the purchase price U so you you don’t have as much control right because you could buy an apartment building for five million but if the rents only support four then that’s all the financing you’re getting based on do you know what I mean so that’s kind of the same over
(1:21:16) there too fantastic based all right Scott we’re really running out of time um thank you for being so generous with this with your time I I saw your Christmas pictures I had no idea how big your team was think I mean that’s only part right we’re missing Jillian in Toronto and then um we’re working on Murray and Quebec so oh fantastic yeah always growing so uh Scott um any final thoughts I always have to give my guests a share a chance to share anything they want to talk about without me prompting
(1:21:50) them um I mean final thoughts I just think it’s people I find are scared of what they don’t know it doesn’t really matter what it is if you don’t know how to do something you could be the guy that sits down at a table at a wedding and you don’t dance because you don’t know how to dance right so you’re you’re fearful of it right and and that’s just one silly example but like it applies to investing it applies to everything and I think that if a Canadian will take a little bit time and analyze investing in
(1:22:25) the states I think they’ll really like it um I don’t think like a Canadian should just say screw Canada and whatever I mean I think there’s some benefits of diversifying right having a little bit here a little bit there um different property types too um so I still think Canada is great but Canada has to get its act together so I just encourage the investor to analyze the process it’s not that complicated um you have people that can set this up for you from start to finish I also have people that
(1:23:02) can do that um and it’s all about building that teamwork and just just doing something and I think if an investor buys one property over there and and does all that I think they’re gonna want to get a ton more properties over there because it’s just n day better for the landlord yeah I’ve been playing with an example to just explain to invest uh how easy it is for example I I was just running a simple example if I bought 10 houses in the states uh in 10 years I can cash flow over 110,000 can uh US dollars per year yeah right that’s
(1:23:38) a very simple model it takes about two Mill about 2 million Canadian Equity to do so right so very slow boring it’s only 10 properties any issues in really getting financing for 10 properties Scott no right because these are all cash flow right from day one yeah the lenders they’ll do they’ll do 15 each but then they sell off the debt that’s very common in the states right sell off the debt to another mortgage company that wants to grow their books or whatever and and then you free up another 15 and and the selling of the
(1:24:11) debt can can tra take place within five minutes they do it on sort of like a stock exchange they have people that buy and sell debt all day long that’s all they um so you’re just like buy minutes later you’re good you got 15 more just five minutes you’re out of mortgages give us five minutes all right have more 15 more now yeah so again my my point though is that it’s very simple uh logistically operational is quite simple to own a 10 property portfolio uh and again my numbers show that you’ll get to
(1:24:41) 10,000 cash sorry 110 cash flow US Dollars and then you know and then I say to everybody find me this opportunity in Canada right because these properties because again there’s no rent control so my properties will be like eight caps in 10 years yeah right find me this opportunity in Canada right and again list 17 listeners like find me this opportunity I will am happy to hear about it yeah um Scott before you go actually uh I had a question is there a right mix between using cash and HELOC and morgage is there some sort of right
(1:25:19) mix yeah so we we did talk just preface that pref preface that question cuz we um like you and I know some people that are literally going down with large helocs to just some people are doing 100% heoc which I don’t agree with I don’t think you agree with either because at a minimum you got to be trying to build some credit your credit in the States but I’ll let you I’ll let you talk to it you’re the expert yeah I mean if you buy with all Canadian funds you have the highest risk of currency
(1:25:48) risk right look up currency risk you’re you’re investing with Canadian dollars into a different market so in the stock market you can hedge your investment and that limits the currency risk but you cannot do that in real estate and um you know I know I gave an example on your um one seminar that you had and um the thing is is if if you invest now in our money hits par with the US so it’s the same you actually end up overpaying for a property if everything stays the same then you’re good but um every recession
(1:26:28) the money goes really close to par so that’s when a lot of investors want to get out of the market if they’re tight right they when it when there’s a recession and things get tough they want to sell um because they financially need to so just if you invest with tons of Canadian dollars and then there’s a challenge and you do have to sell a couple properties let’s say um it’s going to be the worst time to do it because of the rates so I encourage investors just to only use their down payments from Canada and to
(1:27:01) try to use as much US dollars as possible now over time right so when you start that’s what you’re gonna have to do but over time as you have a couple properties then you can refinance them in the states and then you’re just using all us funds and buying over there with us funds so then you’re not there’s no currency risk right and then you reap the benefits where right now where we’ve got the 30% like the US dollar is 30% more then when you sell those properties or convert that cash flow or whatever it
(1:27:32) is convert that that money to to Canadian then you get that 30% boost in profit which is super so I would try to invest with as much as possible I know a lot of Canadians did want to use their lines of credit because it was cheaper right I mentioned 8 to n and a half% for lines of credit are prime plus half today so 7.
(1:27:55) 7 so they’re thinking okay it’s cheaper to use my line of credit that’s what I’m going to do right um but knowing about the seller credit and that you can buy down to six and a half it’s actually cheaper to get the mortgage in the states than it is to use your line of credit so right there’s yeah so there’s variables but I think the down payment is totally fine to leverage in Canada while you get started um and then after you build up a portfolio you won’t need to do that right you tap into your Equity there and just keep growing so
(1:28:22) that’s what I would suggest yeah get to that 10 20 portfolio number property portfolio number get that 100 Grand cash flow a year because I think that’s something that everyone should be going for because I think everyone could appreciate what $100,000 US in cash flow would mean to their lives right it’s huge and even if you shift Irwin say say you get your 10 you’re like you know what I’m done and then your strategy shifts and you just pay off that debt then you’ve got 110k US dollar a year
(1:28:53) salary and it goes up each year because there’s no rank control yeah like you might double in like five years now you’re talking 200 Grand I’ve spoken to a lot of people that do JVS over there yeah and this is past JVS but they’ve been able to repay their investor um everything like within five years from the success stories I’ve heard obviously there’s probably a ton of failures I haven’t heard oh there’s tons of failures out there but still like that’s incredible so you partner
(1:29:25) with somebody you can get your money back in in five years just based on the appreciation and how their Market is crazy yes yes lots of people lose money which is why I’m going down with the best possible team I can possibly find y makes sense Scott where can people reach you want me give your cell phone number sure I don’t mind I’m gonna give my cell phone but I made a promise to my team that I the consultant for the US lending but they’re all processing them so if anybody calls I’m just here to hold your
(1:30:00) hand but I will partner you with somebody on my team to actually process them um so yeah I’ll share it it’s 226 348 7884 fabulous upsite yeah that’s lend city.ca and actually if you go there right when you like we designed the page so you can book a strategy call it’s like right on the top of every page um so you can book a call with someone on my team myself if you’ve got commercial mortgages like there’s a commercial section on there it’s nice and easy to book a call fabulous and again you can you can
(1:30:41) service people both for Canadian mortgages and US mortgages absolutely residential and Commercial doesn’t matter fabulous Scott thanks so much for doing this thanks for bringing this to our community and at our Peak pain time as Ontario landlords the BC landlords are feeling it too Alberta you guys are good for now awesome you’re they’re basically the Envy of all of us it’s crazy I hope I hope they get to stay how they are I hope things don’t change but you never they should threaten the separate from Canada if
(1:31:14) they things change that’s right that’s right we’ll miss them though thanks Scott thanks so much for doing this thank you as well take care everyone thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.
(1:31:52) com below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for next virtual class that’s at investor tr.com

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UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
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BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to www.iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to www.iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s www.iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

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Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.