From 25 RTOs To Building Her Dream Home & LT Holds With Brooke Shang

Welcome to the Truth About Real Estate Investing Show for Canadians!

My name is Erwin Szeto, host of the #81 ranked Business podcast per iTunes, President of the Registered Charity, the Hamilton Basket Brigade, four-time Realtor of the Year to Investors, and among our investor clients, 45 self-made real estate millionaires.

We are very grateful for the trust our clients have placed in us, and we’re overjoyed with the results that boring, systematic, cash-flowing real estate has provided.  

We will be touring said types of properties in Hamilton, Ontario, on the morning of Saturday, February 25th. 

Investors will have a chance to look at real-life, BRRR or flip income properties ideal for someone to hold long-term that belong to our successful clients.  

When working with my award-winning team, you don’t need to buy an expensive course or invest in five-figure coaching to invest in quality real estate.

Save the date, the morning of Saturday, February 25th, in Hamilton. Details are in my email newsletter that already goes out to 10,000+ hard-working Canadians. 

If you’re not one of them already, that’s just silly, go to www.truthaboutrealestateinvesting.ca, enter your name and email address on the right side, and you’ll begin receiving email updates when new episodes of this show are available and invite to events we make available to the public. 

Thank you to everyone who attended the sold-out, in-person-only iWIN Meeting this past weekend. 

We raised over $1,000 for the Hamilton Basket Brigade, which will be used to buy warm winter clothing and boots at discounted wholesale prices for underprivileged children in Hamilton.  

Needless to say, the idea of children being cold in the winter, wearing water-soaked shoes with holes, and leaving their toes exposed to the elements is just sad; hence we at the Hamilton Basket Brigade are doing something about it.  

If anyone would like to help honestly, the best thing to do other than make a donation is to refer people you care about to Cherry and my businesses. 

The more good people we can help become rich, the more donations we raise.

Back to Business…

Did everyone see the Bank of Canada’s latest rate increase of 25 basis points? 

That’s a 0.25% increase to 4.5% and continued quantitative tightening and plan a conditional hold on rates there and see where inflation and the economy go. 

Our central bank is the first major central bank to say it would pause rates.

The BoC forecasts the economy to stall in the first half of this year, does not foresee a significant recession, and inflation is expected to be about 3 percent by the middle of this year.

I have many thoughts, and if you, my 17 listeners, are listening, I’m hoping you want to hear them.

The Bank of Canada mentioned how the unemployment rate remains stubbornly low. To reduce inflation, having folks out of work would help, as people without income typically don’t spend much.

So why didn’t the government and BoC control their spending in the early pandemic?  

I think it’s an excellent question for our leadership, especially after our former Finance Minister, Bill Morneau’s book, is out where Bill details how the Ministry of Finance would make fiscally responsible recommendations to target those losing their jobs…

Only for the Prime Minister to ignore said recommendations to create their own decisions to spend more, make people happy and would get more attention from the media.

Great for optics in the short term, terrible fiscal policy for the medium and long term as we as taxpayers will be forever burdened with all this added debt only to see small businesses like restaurants now fail due to inflation, recession and lack of labour.

Plus, we’re going through economic pain now. All this inflation and added debt only delayed this recession three years.  

Was it worth it? 

In hindsight, I don’t think so, but these government decisions are well above my pay grade, so we, as investor entrepreneurs, must roll with the punches and play the hand we are dealt. 

I know that sounds cliche, but if you tuned into my presentation at the Wealth Hacker Conference or Cherry’s client-only webinar or attended our in-person iWIN meeting on January 28th, then you know where we think this is all headed. 

I see the green light to acquire more long-term, buy-and-hold, cash-flowing investment properties. 

Make sure you’re on our upcoming Hamilton or Oshawa tours of quality income properties, we are past the bottom for our target investment properties, and our clients stand to benefit the most from this market.  

www.truthaboutrealestateinvesting.ca, get on our email newsletters, enter your name and email on the right, and I’ll see you at one of our events!!

From 25 RTOs To Building Her Dream Home & LT Holds With Brooke Shang

On to this week’s show!

We have an author, coach, mentor, mom, wife and investor since only 2017 who’s done a lot while keeping her day job. 

English isn’t even Brooke Shang’s first language, as she moved to Canada from Taiwan at age 17.

Brooke has done a lot… 

From losing $50,000 on a joint venture in Winnipeg with a now bankrupt partner who drove a Porsche to owning nearly 30 rent-to-owns, a bunch of duplexes, and focusing more on private lending. 

She’s also building her custom dream home thanks to the profits from tenants buying out the RTOs and selling other income properties.

Like past guests Tim Tsai and Vince Lee, Brooke is also a leader within the Trust Your Talent Academy.  

Brooke’s story is a good one about how much one can accomplish in a short time while keeping the day job and how one’s goals change, e.g. Brooke has hustled and now wants more passive investments.  

It all works; one must decide for themselves what journey they’re on.

Please enjoy the show!

 

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 FREE Online Training Class.  We will be back in person once legally allowed to do so, but for now, we are 100% virtual.

No need for you to reinvent the wheel; we have our system down pat. Again that’s  www.infinitywealth.ca/events and register for the FREE Online Training Class.

 

This episode is also brought to you by www.stockhackeracademy.ca, where everyday real estate investors learn the best practices in stock investing to earn cash flow in about 15-30 mins per day from their mobile phones. After real estate, Stock Hacking is the next best hustle, as you’ve heard from many past guests on this show. Among our students last year, 31 trades were shared with them. 30 were profitable for an over 96% success rate and 12% return on capital. I will be giving free demonstrations online, very similar to the one I gave my kid cousin, a full-time musician who just made a 50% return in 2021.  Past, of course, does not predict the future, but if you’d like a free demonstration, go to www.stockhackeracademy.ca in the top right and click FREE Demo.  At the demonstration, I’ll have special bonuses. We do not advertise publicly for all my favourite listeners, and I only have two more demos to give in the next few weeks.

Don’t delay www.stockhackeracademy.ca, what I consider the future of side hustles with real estate so unaffordable for many.

 

To Listen:

Audio Transcript

**Transcripts are auto-generated.

 

Erwin  

Welcome to the truth about real estate investing show for Canadians, My name is Erwin Szeto, host of the number 81 ranked podcast for iTunes, president of the trustor charity, the Hamilton Basket Brigade, four time realtor of the year to investors. And among our masterminds, we have 45 Self, maybe off the millionaires. I spent all this time sharing all this, not because like to brag, but quite honestly, there’s a lot of coaches out there love do recent real estate influencers, some of them are going bankrupt and taking their clients with them. So I’m just here to share what we’re up to. And we are very grateful for the trust of our clients that they’ve placed in us. And we’re overjoyed with the results that boring systematic cash flowing real estate has provided, I was just reading an article about a gentleman, a lawyer who purchased two preconstruction houses for close to $2.5 million each. And they are at risk of losing their $100,000 in deposits, because those properties will not appraise and that the mortgages will be higher than what the properties are worth. So it’s unfortunate what some people are doing out there for real estate investing. I honestly do not know what Java does decisions. I do believe that pre construction speculators, speculators in general flippers and Burr investors, they will continue to leave the headlines for 2023 in terms of where the pain is. And that honestly means that’s where the opportunity is from me as well. Continue to hear rumblings among our lawyer market, legal market lawyer market, our lawyer friends, a local lawyer friends are telling us that they are seeing more and more power sales crossing their deaths. So I don’t think it’ll be huge amount, we’ll see. We’ll see. We’ll see how many there will be. I don’t think there’ll be a massive amount, though, that will flood the market and cause any sort of significant correction. If anything, we’re seeing a lot of buying activity, we’re seeing the last two weeks or so we’ve been very busy actually, including selling off the majority of our listings. So our listings, which are primarily entry level real estate, they were sitting at some of them were sitting and now they’re gone, sold as sellers are coming to terms with the market values are and buyers are adjusted to the current interest rate environment. So we’ll see who was right at the end. Whether or not these optimistic buyers are right, but just look to know the market is active for entry level real estate. Speaking of entry level real estate, especially ones that generate income, positive cash flow income, say the date the morning up Saturday, February 25. In Hamilton, we are going to be on the streets in Hamilton. We’re bringing our poli sci view investors who are listening on to this we’re going to learn on the streets in Hamilton in properties that my clients own, that they are currently doing burrs or flip Sue, where they aren’t converting houses mainly, specifically the basements into the old basement apartments. If you’re already on my newsletter, then you’re still see the registration is available. www dot truth about real estate investing.ca is where you can go to enter your name and email address if you don’t already get if you’re not already on my email list. Our newsletter goes out to over 10,000 Hardworking comedians, so maybe it’s a good idea that you join them as well. And maybe even one day join my Hall of Fame. Millionaire self made real estate millionaire clients. Also thanks everyone who attended our sold out in person only island meeting last this past weekend, we raised over $1,000 for those are on the proceeds for our personal meetings, we raised over $1,000 and selling tickets for that meeting. And those funds will be used to buy warm winter clothing and boots at this tenant will sell prices for underprivileged children in Hamilton. Needless to say, the idea of children going cold in the winter. Wearing cold soaked shoes with holes leaving toes exposed to the elements is just a sad thought. Hence we here at the Hamilton bash brigade are doing something about it. If anyone would like to help, honestly the best thing to do is other than making a donation is to refer people you care about to charity and ice businesses. The more people we can help become rich, the more donations and the more generous donors we help and donations come back to business. Does everyone see the baby calves latest raise tertiary increase of 25 basis points. So that’s 0.25% increase to a total of now 4.5%. And tip Macklin also promised continued quantitative tightening as in there’s gonna be less money in the system and a plan to conditionally hold rates there to see where inflation in the economy goes. Our central bank is the first major bank to say it would pause rates. The Bank of Canada forecast the economy will stall in the first half of this year does not foresee a significant recession. and inflation is expected to be about 3% By the middle of the year. I have any thoughts for you many thoughts about this subject? That’s the lawyer who bought the two properties in Ottawa pre construction homes for almost $2.5 million each. It’s the same people I do. Funny enough. Yeah. Why didn’t the government so fast forward? Why didn’t the government baby Canada control their spending of debt level in the early pandemic? I think it’s an excellent question for our leadership, especially after our former Finance Minister Bill Morneau his book, which came out in January 17. It details how the Ministry of Finance would make recommendations. That’s our job. You know, the Ministry of Finance, which was supposedly about finances. Bill says there are fiscally responsible recommendations to target those specifically those who are losing their jobs due to the pandemic, only for the Prime Minister to ignore said recommendations in creating greater Oh, his own decisions to spend more, make more people happy, which would get into and get more attention from the media, or great optics, great politics in the short term, terrible fiscal policy and hindsight and also as we into the medium and long term. As we the taxpayers will forever be burdened. Bail is at a debt. Only see small businesses like gyms and restaurants only now fail now. due to inflation, recession, lack of labour, all of this can be dealt the pandemic with technology terrible, without all of us tax payers being on the hook for it. Plus, when we’re going through economic pain mail, all this inflation added debt to only delay the recession about three years, all this debt and money in the system inflation to delay a recession three years wasn’t worth it. In hindsight, hindsight, so it’s been 2020. That I don’t think so. These government decisions are well done, I pay grade. So we investor entrepreneurs must just roll with the punches and play the hand that were built. I know what I’m doing. I know that sounds cliche. But if you tune in into any representations of the wealth hacker conference at Cherry’s client, we webinar or our past, I have a meeting that was done in person meet, contain which we then you know, where we think this is all going. And honestly, I haven’t seen more green lights in a long, long time. Pretty nice to tell me that should be buying long term Bible cashflow and investment properties. So if you’re interested in learning more about these opportunities, and how to cash flow real estate, make sure you’re on the Nelson tour. And also we will be offering an offshore tour in in March as well. We will be turning quality income properties from what we’re seeing does look like we’re past the bottom in terms of the properties that we target for investment purposes in the startup market. And our clients stand to benefit the most from this market. Again, if you’re not already already on newsletter, www dot truth about real estate investing.ca Get on our email newsletter, enter your name and email right. I’ll see you at one of our events. onto this week’s show. We have an author coach, mentor, mom, wife, and investors since only 2017 has done a lot while keeping her day job. Keeping those kids and keeping her husband happy. English isn’t even brushings first language she moved to Canada from Taiwan at the age of 17. Brooke has done a lot in her career. She’s had lows, she’s openly shares that she lost $50,000 on a joint venture in Winnipeg with a non bank partner who drove a Porsche. to Now she’s done nearly 33 Zero rental property deals, she owns a bunch of duplexes and she’s now focusing more on private lending and building her custom home custom dream home. Thanks to paid for by the profits from tenants buying out rents owns and also selling other income property is a leader within the trustor talent Academy. Like pass tests, Tim sigh in bits Lee Brooke story is a good one, how much one can accomplish very much in a short period of time, while keeping their day job and how its goals change over time. For example, Brookings hustled very hard beginning, but now she’s more focusing towards more passive investments and more equity growth. All of it works. Wonders must decide for themselves what journey they’re on. Please enjoy the show. Everquest keeping you busy these days,

 

Brooke  

lots of things lately, building my own home, taking care of the kids still work. A lot of them Busman still going and coaching and mentoring as well. A lot of public speaking lately. I think it’s because probably since the pandemic, there’s a lot of zoom meetings, and we have a lot of time at home. So started to get trained on speaking communication, that kind of thing. That’s actually what I’m focusing on personally in terms of learning. Yeah, what is your personal goal every year this year for me is communication. That’s the only goal. No, that’s a personal goal. That’s a personal goal. And like I mentioned, I told you I was building my own home. So another financial goal, of course to build up my portfolio again. I actually sold a few properties so I can take all the bucket of gold to build my home in Midtown Toronto,

 

Erwin  

okay,

 

Brooke  

let’s have a full you got to note.

 

Erwin  

How many houses do you think you’ve sold in order to finance your finance fund your custom build

 

Brooke  

my custom builds, there’s quite a few rentals closing my own. It’s basically almost one or two every month last year. I actually didn’t tally up. I know our tax will be high last year, even though our castle was significantly reduced. And my physical year for my company is what June? I know this year, we’ll have to Yeah,

 

Erwin  

no, I love it. It is your point in the master journey where your your investments are paying for things that you want in your life. Yeah, right. Yeah. Can you tell us a bit about the custom home you’re building? Yeah,

 

Brooke  

I actually set that goal for four or five years now, when I started investing, and you know, the market kept going up, right? So at the time, we couldn’t even secure a property. And funny enough, we live in a very old part of Toronto. So at least I’d close to East York, a lot of the properties are old, built in the 1940s. Some are, they call it cat, so used to be a bungalow, a lot of them are still in Scarborough. So they kept it, they just build on top. When we did inspection, there was quite a few issues. So even when we finally secured a property, we always found something. And in the end, we finally decided let’s just rebuild something of our own. So we bought a really old house. Actually, the owner is she she was 90, we bought it almost two years ago. She was almost 90. So she was the original owner, she was closer 90 or 91, I think at that point, and she smoked her whole life. So the house was gross. The house was was coated and smoke grease on the wall. Yeah.

 

Erwin  

Oh, just for listeners benefit. Like for US veteran investors. That’s what that’s the stuff we buy. Stuff we bought, how many offers? Was it 13, still 30, you know, all the all ones tear down, then

 

Brooke  

they all wanted to tear down and you won. We won, I think because we’d live two blocks away. So before I put in an offer, I already talked to my neighbours. And I said, put in good words for me if you know this lady, and I wrote a letter to say, I know a few good friends on your street. Because we’re in the neighbourhood. We’re two blocks away, my friend’s friend, and then you’re part of the community, not just not something crazy, but little things help. And then we have the bank draft ready with our offer. When we put in the

 

Erwin  

was that aggressive? No, a lot of people do that. Yeah, we my experience, not a lot of people do not a lot of

 

Brooke  

people do that. So we actually put in six figure the word we thought, hey, if it didn’t go through, I’ll just put the money back. So yes, we were really aggressive. And as I was setting in the parking lot off the bank, my realtor said there were a lot of offers coming in. So we’re just sitting at that time, I think was like six or seven. And then the number just kept going up, which is sitting typing the letter saying I live in the neighbourhoods, I have good friends on your street, I’m pretty sure they would have given me the recommendation. So I just throw them out there saying I have friends there. If you request recommendations we would. So I think that’s what set us apart.

 

Erwin  

Right? Right. So sorry. You said your realtor was sitting at the property in their car waiting unless you were

 

Brooke  

looking up a ladder to say, Okay, I want to go with my offer.

 

Erwin  

That’s actually a really good point for anyone. Like, for example, this is what we did all the time, pre pandemic, when we were doing offer presentations in person. If you wanted to win, I always tell my client think of all the things you have to do to win. I be there, right? Because a lot of people will not. And also these agents who’ve learned recently how to be agents. Yeah, the email everything. No idea how to negotiate in person, let alone present an offer in person. This email they’re offering does just pray. Right. Yeah. That’s how they represent their client. Do you believe it?

 

Brooke  

Yeah. So I guess you would tell your realtor or yourself how Yeah, I wants to be done. Right.

 

Erwin  

Or I want to negotiate a face to face. You know, I I’ve trained for this. Yeah, I played a win. Exactly. Right. Yeah. I don’t just send offers into cyberspace.

 

Brooke  

Yeah, exactly. So same thing we put in a lot of offers. We actually were pretty lucky considering how we live in a community where there are a lot of kids, so a lot of families want to get in. So we were lucky that we actually got all the other properties under contract. Like I mentioned, however, after inspection, we found something and that’s investors. We actually call the city sometimes when people add an addition to the house that we found problems. Another sorry, something funny because

 

Erwin  

which is often something that’s always a common issue additions that were done without permits, like Yeah,

 

Brooke  

yeah. Or even when we walk in the house, we realise a part of the house was really cold. So they just basically put the slab and then build another room. And we actually call a city just to confirm then the city showed up at the house for quickly, and we were surprised because we were just inquiring. And usually you know how long it takes for the study to come when you need a permit. Interesting. Yeah. So, so we didn’t get into that deal. But even then we didn’t secure another property under contract to.

 

Erwin  

Okay, so what are you building? This is like a big hose? No, the

 

Brooke  

lot is only 30. In the front. Okay. Yeah. 3030, about 140. So it’s a long of deep, yeah, free. Yeah, we’ll still have to go through variants. Because an ECR, they’re pretty limited as to how much land you can build on.

 

Erwin  

Right. So you’re gonna tear down the house? Are you reusing the foundation? Anything? It’s completely new? It’s fresh. It’s completely fresh. Yeah. And then we’ll be building couple 1000 square feet

 

Brooke  

2600 And then plus basements. So it’s a huge, huge, it’s good for a family of four, or even occasionally entertaining. It’s pretty good.

 

Erwin  

Plus garden suite or anything? Absolutely. Could

 

Brooke  

I’ve seen laneway? In our neighbourhood? Yeah. Yeah.

 

Erwin  

Awesome. Love it. No, I love the fact that you’re paying for this through the proceeds from investments.

 

Brooke  

Yeah, that that’s not just it, because I think also, you know how to finance, right? Because if you don’t know how money works, I mean, we now live in a 1200 square foot. That’s how we got into the neighbourhood. So you’re, you were frugal, we were full gold. But at the time, we were so nervous when we bought that house. So thinking back, if I have to take on something that’s big, it’s just mentally, I don’t think we could have, if not have gone through all the mortgages for investment and knowing how money works and built up a little bit of equity. Yeah. From other properties.

 

Erwin  

So why did you start investing? Like you seemed really smart? I think you make a lot of money at your job. Why did you think you need to invest to

 

Brooke  

actually, our house was always my big why? Because we live in a 1200 square foot, I look at your exercise equipment. Now I work, I work at home, I don’t even have enough space to lay down. I have to push everything away, right? It’s things like that. And when I started investing, actually stayed at home with my kids for 10 years. And when I went back to work, we’re double income, and chariots koa dealing with that, we will realise we pay a lot of tax and we hardly save enough for RSP we did however, that’s not without hard work. And life. I don’t think our quality of life improved that much. Even though we were double income from a single income family. And I was already over 40 then so I thought if I don’t learn about this now, I would probably never do it or would have been pretty late. Yeah,

 

Erwin  

so like what was your first income property? What was your first education in real estate?

 

Brooke  

My after like we had the condo we used to live in and downtown However that’s not really investing because we just happen to be there happened to be in Toronto happened to have equity. The first investment I had was actually in Windsor. Income Property.

 

Erwin  

Okay, yeah. From downtown Toronto Windsor. Okay,

 

Brooke  

I never saw the property it was just somebody I took the class with. And we were both the new nobody wanted to invest in Windsor at the time. I remember we closed in January 2017. Okay, so beginning of 2017 That was my first Yeah,

 

Erwin  

so you just want a leap of faith with the with a fellow student

 

Brooke  

Yeah. However, this was exactly what we learned in class it was income property. So it was a three bedroom home easy to add another drywall no structure issues then it became a four bedroom and at the time Windsor properties were just above 100,000 at the time. So it really makes sense. And you can you can at least get 1200 of rent for example, so easily meet the 1% rule at the time and is the single family home. So that was my very first income property after I got educated. Yeah, that my second one was rental.

 

Erwin  

Sorry, the first winter property was a buy and hold

 

Brooke  

flipper. No, it was just a single family home straight rental,

 

Erwin  

straight rental so board

 

Brooke  

get a more credo right?

 

Erwin  

Because everyone’s goals are different, right? Because we were discussing before before we were recording I personally never did rent to owns because I’m just greedy. I want all the equity gains for myself. Right hindsight 2020 It was I was very right. But you know, the attractiveness of rent to own makes a lot of sense. Right tenant takes better care of the property higher cash flow, you get some income you get some money up front to help with the down payment and all that sort of things to you know, protect your your cash flows stay very positive on the cash flow side. A lot of it makes sense again.

 

Brooke  

Well, well I get that. Well, you said the goal because you know we had equity right in Toronto and you’re in Hamilton the surrounding area. So I want to see this really works. To me rental is interesting because it’s really creative. Not something I’ve heard of before. I started with real estate A education. So one thing is I want to test it out, make sure this worked. And I started working. So I want to see if the cashflow can really replace my working income

 

Erwin  

right here. Right? Yeah. And then how many rentals Do you think you’ve done since then?

 

Brooke  

I’ve slowed down. Because since 2017, that’s when I started. Probably 20 to 30. Not crazy numbers consistently. And I slowed down quite a bit. Yeah, I slowed down quite a bit right now, in terms of rent to own another thing is harder for tenant to qualify, you know, the mortgage rules, etc.

 

Erwin  

Yeah, cuz prices have gone up so much. Equity games, I’m banking,

 

Brooke  

also stress test, right? They have to be able to qualify. Yeah. So now, the reason three rentals I did are in Alberta.

 

Erwin  

And currently, how many do you hold? How many do you have in your portfolio? Now,

 

Brooke  

under 10, I will say I think I counted in my head was around eight right now. And they’re mainly just maintaining, they’re not new rental almost recently. And I’m just waiting for them to complete the programme right now.

 

Erwin  

And because you’re slowing down, so you can take the capital to rotate into your custom build

 

Brooke  

that too, and also into other investment. So I’m involved in more private lending now. Long term holds. And I get that now, I think I want to build equity. Now my rentals are closing, I have to actively look for new deals. If I want to keep that going. Everybody’s goal is different. So at this point, cashflow is not my number one, it still has to cashflow. However, I do see that at this age, I think I should build more equity. Right? Build more wealth.

 

Erwin  

Right, right, right. Yeah, yeah, I think we might piss off a lot of people by saying that cash flow is not our number one.

 

Brooke  

It was for a very long period of time. Well, for three years now, though, that was my number one

 

Erwin  

concern for recording because my stance is multiple streams of income. And because Chennai, we enjoy our careers, we generate good incomes, right? So then I the way I view it is that I’ve looked at my everything is very holistic. So so because I have we have income coming in from our careers, it’s less important to me that our portfolio cash flows a lot of money. Okay, right. I’m okay with like, my with, like my duplexes being like minimal cash flow, right, because I’m more in, you know, historically, we’ve been seeing even before the pandemic, historically, we’ve seen about 7% appreciation a year. Okay, that’s a lot. That’s a lot. Right. So, you know, even if we get 4% appreciation, I’m very happy. Okay, going forward from here. Okay. So that’s, that’s my own stance. And that’s where I am my journey. I see. Because I’m not trying to retire. I don’t think I’ll ever retire.

 

Brooke  

I don’t think I’ll ever ever retire. I don’t think that’s a term in my vocabulary, at least as far as I can see.

 

Erwin  

Right? Yeah. I just like you’re saying it’s more difficult than than ever due to rent to own. extrapolate that to say, it’s harder than ever to become a full time real estate investor, unless you can really slasher your living costs, like like, like Vince, who was on the show. Now he lives in Edmonton. Yeah. So he just slashed as housing costs. Yeah. Right. So I can see how that’s more possible. I like living Ontario. I like living in Oakville. It’s not an option for me. Yeah, you obviously like living somewhere, you’re in the GTA, like, your build is not going to be cheap.

 

Brooke  

Isn’t this crazy expensive. I’ll be honest. However, when I started building, we didn’t want it to be limiting because of our financial resources. At the same time, I don’t want to be taken over right either when it comes to expenses. And when it reflects to rent Oh, it doesn’t work well in Ontario. Now. However, that’s why I invest in Alberta for example now, right? And also I work with a lot of say flippers or people in the real estate community. When I mentioned I did private lending, sometimes we joint venture or however I can see that for you have to work with people who are experienced, yes, it’s getting harder. However, there are still people who are able to do it.

 

Erwin  

There is people able to do it, like like I mentioned, like Vince, but also on the other side. Yeah, incomes are higher than ever in terms of wage incomes. So you know, I’m a capitalist. I make the most money for my time.

 

Brooke  

Yeah, exactly. Yeah, that’s how you evaluate right your ROI is high.

 

Erwin  

I speak to many investors are new investors who make like two 300 grand in their day jobs. Exactly. Okay, how easy is it that replacing as a real estate investor?

 

Brooke  

I know you have to really active I can see that if you’re constantly buying and selling.

 

Erwin  

If you first level

 

Brooke  

however, is you have that income you can tolerate more risk. That’s a side hustle right

 

Erwin  

right. Yeah. Oh, exactly. That’s why I’m saying like cheap income. It really it really reduces your risk for real estate. Miss me. How’s it hustle. Sorry about that income. Yeah, I mean go full time, you have to take on quite about quite a bit around risk.

 

Brooke  

Yeah. Because I’m at the age, if I hate my job, even if it’s a lot of money, I probably still wouldn’t do it. I don’t know about you. So I see a lot of people, yes, high income, especially as a lot of my friends at this age. And I think 47 If I remember, the sad is when you you have your peak income throughout your career. So I’ve seen people doing that. However, a lot of people are very, very unhappy. I’m happy with my work. If they’re unhappy for real estate, too. If you’re unhappy, you’re making 200 or 300. Don’t do it. Because return on your time, like you said, yeah,

 

Erwin  

you can start work at five, six o’clock, and then like, not have any worries. As an entrepreneur or a real estate investor. Yeah. And that doesn’t happen. Exactly. Don’t.

 

Brooke  

Don’t end it. However you feel you have more control, right?

 

Erwin  

Absolutely. There’s just everyone. That’s why I like talking to veterans like yourself, is you can share your journey. And then I think people can can take from that, where they fit in. Right, versus what’s marketed out there. Yeah, quit your job today become a full time real estate investor, like, yeah, people that understand you take on a monstrous amount of risk. And then now in hindsight, those are the folks who are now going bankrupt and moving back into their parents basements. Right. But that wasn’t that wasn’t mentioned marketing.

 

Brooke  

Yeah, I’m like you i open to everybody at different stages in their life. Yeah. For people who have health issues, I’ve seen some friends with health issues. And even if they made a lot of money, they probably couldn’t sustain, then cut your expenses. Right? I don’t think it’s a bad idea. We’ll ask them faster. It’s not a bad idea. If you rent or, you know, rental, expensive versus mortgage people have to take on today. I mean, find alternatives. You don’t have to live in a bigger house. I’ve seen people downsizing as being a private lending and alternative financing. I’m thinking about what can we do with reverse mortgages? Well provide opportunity and in different ways for people to retire as as investors. Sometimes we’re the private mortgage, maybe we can help other people to do reverse mortgage, a lot of people are doing retirement homes, and a golden girl type of housing. I can see that.

 

Erwin  

Yeah, I love all those investments. Yeah, I’m not sure where I want to go with this. Okay, that’s, that’s private lending. So again, ignorant outsider observing, like the trust your talent community, is the same as a lot of you do business among yourselves, which I think is pretty wise, since you seem to be all be pretty good investors,

 

Brooke  

is because I think mainly people have the same mindset. I just want to clarify, we don’t directly do deals with students, students would come together naturally, to work together. We as trainers and mentors, yes, we do among ourselves. However, students, they usually naturally work together, just like I mentioned, my first investment was somebody sitting on my table while I was training, right. Well, while I was being trained, right, yeah. So it’s mainly I think, the mindset, and naturally, people have the same frequency. Right, what gets together? I think that’s just natural.

 

Erwin  

But your coaches and mentors are vetting a lot of these deals? We would, yes. So then there’s, you know, there’s actually oversight.

 

Brooke  

That’s the point, right, we won’t tell them exactly what to do. We’re part of their power team, right? Yeah.

 

Erwin  

So you’re talking to garbage deal not to touch it?

 

Brooke  

You know, it was funny, you don’t say that directly? Because it’s part of that training, right? You have to figure out yourself. So we kind of direct them. So if they, they want us to look at it. We have to not directly state yes or no, they still have to analyse that’s what trainers and coaches do.

 

Erwin  

But what I liked about the treasure Tang community is, you know, like, Tim, is Tim the only lead like the top of the chain top of the organisation.

 

Brooke  

So he and his partner Ray are the founders. We the OGS started on the beginning. We were also there. That’s all Tim basically is the principal that started the organisation.

 

Erwin  

Tim Sykes has been on this podcast. So he’s actually been a professional educator in wrestling for for 10 years. 10 years. Yeah. So he was paid for 10 years to teach real estate investing.

 

Brooke  

So I was part of that group. So I started by learning from him and, and started my journey that way, too. Right. So I see it as a legacy. You basically pass it down to the new investors. Yeah. So that’s

 

Erwin  

what I like about the community. Is that a strong education experience oversight over what transactions get done within the community? Yeah, versus the bankruptcies that I’ve been studying with not not within the wider real estate investor community. Yeah. Is certain organisations have consistent failures, right? Yes, but I don’t see that from your community, your specifically your group. So All right, you guys are doing something, right?

 

Brooke  

Yes, that’s a good indicator, Ashley, and we’ve only been around three years, but we have at least four or five students reaching their financial freedom goal. So that’s the passive income. We’re talking about the cash flow. However, we mentioned that perhaps capital is not what we focus on. However, I

 

Erwin  

think I like my day job. Yeah, I

 

Brooke  

  1. I do, too. I get that if you want to not worry about survival at all. You want your money to work to have the cashflow? Yeah, at the same time, they’re also I think, the first set of students, they cut their expenses. I’ve done that too. Yeah, I’ve done that in the past couple months, because we went over budget by quite a lot. So there was one month except basic expenses. I didn’t spend anything, which actually not hard, just don’t go shopping as much. No new clothes, new shoes. It’s actually not as smart as x. I thought.

 

Erwin  

Yeah. Because my when I started investing, I knew this is early days, right? So I knew two people personally, who I considered very financially free. One on two triplexes lived in one of them. Okay, no car, no kids, right? So very frugal living. Right. So she can live off of that rental income from just two triplexes. And again, living in one of them are showing a five units rented. Right, initiative dog. That’s it. So that’s, that’s probably the only that was probably her biggest cash outflows. So very modest living and then my other friend in St. Catharines. He owned I forget the number of Eagleton closer to like 10 Student rentals. And then the car he drove very modest. 10 years old, paid off. Right? His home very modest, probably like yourself, like probably 2000 1200 square foot house. Right. So to me that was from from them sharing their experience with me. That was the path to financial freedom. So very different than what’s been marketed at us.

 

Brooke  

You want to have that choice? Oh,

 

Erwin  

absolutely. Absolutely. Just realise that frugal living is a much easier path to financial freedom than filling up a gigantic or real estate portfolio. Yeah. Cuz I think one of the things that’s gonna come out of this, this high interest rate environment, this tough market housing market, we’re gonna see some of these influencers go bankrupt, I think I

 

Brooke  

think I’m not sure who however, I do see a lot of people being quiet, because I’m thinking they don’t want to have the exposures now.

 

Erwin  

Yeah, yeah. But social media, people only only shout out successes. They don’t share failures. Yeah. But what I’m learning from this period is that you’ve run into these people are like, are they just like, they’re like, Wow, I can’t believe how many transactions you did. I can’t believe you’ve found that many. Like I had one guest on his podcast who said he was like writing offers like almost every day, right? How do you find that many deals? Unless they weren’t really deals. Now isn’t the quality what’s the deal wasn’t there?

 

Brooke  

Or you just lowball everything and then see which ones stick?

 

Erwin  

No, no, he was actually executing deals. Oh, wow. Right. So then like, so. I used to be like, I was like, I was so impressed. Now more like I saw seems like a potential red flag. That’s true. Yeah. And that was turning out to be a legitimate red flag based on the ads. It’s all rumours right now. But we’ll see. I don’t wish bad on anyone. Yeah, I’m just more interested in learning from everybody. Everybody else wants what’s working? What’s not working?

 

Brooke  

Yeah. When you mentioned duplexes, and triplexes I actually sold three duplexes doing my belt. One was before, before we even had the property under contract, I’ll tell you why. I think at different stages, I would do different things. But the reason being a found in Ontario, I have to get it vacant in order for it to be marketable. How is that control for investors? And I didn’t like that fact. And like you said, the cash flow is getting slimmer. So if I have to take out my bucket of gold from different investment, I decided to sell all the duplexes I had. So one the basement tenant moved out, that was the first one I sold, then the second one both moved out. Finally, the third one which is closing in five days, the opera unit tenant, it took me nine months to evict through landlord tenant board. I finally evicted him. And then I thought do I want to keep it because the rent is really good now. However, I thought I don’t like the fact I don’t have control another tenant comes in. I have to wait till that tenant moves before I can decide what I want to do with my property. Yeah.

 

Erwin  

are using front lobby please donation from I am Yes.

 

Brooke  

Also I want to say for rent to own operators use it because you help them improve their credit. So for all my rental and tenants, I use it and there’s one rental and tenant for a very, very short period of time his credit score was increased by 30. I think that partly that

 

Erwin  

helped. Wonderful. So that helps you actually helps you your tenants exit the rent. Oh,

 

Brooke  

yeah. So I’ve been using them from probably day one when they were under a different name too, right?

 

Erwin  

Yeah. And their

 

Brooke  

landlord credit bureau. Yeah. So I’ve been using it

 

Erwin  

confused the crap. And I mean, when they change their name.

 

Brooke  

I even used them to do a collection a while ago. Yeah, yeah. But that tenant declared bankruptcy. So I was on their report whenever we received the bankruptcy report. My name was Ashley there. Yeah. No, knock on us. Luckily, like you said, I think a lot of us were saved by the appreciation in Ontario. So yes, I came up pretty well. However, that’s that was what happened,

 

Erwin  

are using single key for screening.

 

Brooke  

I have property managers. I actually switched a couple property managers until I found one that was really good. Yeah, yeah.

 

Erwin  

It’s a challenge. Property Management. You know, I’ve been through like five of them. Wow. Yeah. Which as I always say, like before, before anyone ever decided to pick a pick a where wherever they’re investing neighbourhood town, whenever I say you have to have at least three property management options. Yes, right. Yeah. Three good ones. Right. So if a town only has one, I won’t invest there. Yeah, well, because if you if you go through them, like they suck, and then now what? Now you’re the property manager.

 

Brooke  

Exactly. Even though I have property manager, there’s still incidences where I do have to take a look at the property and decide what to do. Because you have to manage the manager. And also at the end of the day, it’s still yours. Oh,

 

Erwin  

yeah. Yeah, it’s your financial, everything. Yeah, exactly. So you mentioned that your other than the build, other than the build that you’re trying to you’re capitalising, you mentioned private lending. But you also mentioned that you trying to build your equity, how are you trying to build your build, build your net worth.

 

Brooke  

So active income is working private lending is mostly short term. So that’s where I have money to pay for a lot of the financing, for example, for the house, in terms of building our worth, I’m keeping properties that are a tenant in Ontario, because the tenants the tenant, like I mentioned, I do find it to be problematic at times. And from lobby, I think sent me an email not too long ago. I think there’s over 40% of tenant being late recently. And I do see that happening. I have tenants constantly every month. I do have to chase them. And I mentioned I just went through landlord tenant board evicted in September. Yeah. So I do see that happening. That’s why in Ontario, I’m going to just keep the A tenants. Yeah,

 

Erwin  

knock on wood. I’m good on rent. Yeah, thank you front lobby, shout out with our lobby. I’m pro tip from lobby.ca or.com. I forget, if you don’t know what they are, just Google them. You know, I type in front lobby.com. You mentioned private lending. What are you looking for in a private land? Because I know it’s a it’s a really popular topic. I think a lot of people do and don’t do it. Right. As a lending on, I’ve seen some, I think they’re the term that they’re getting. I wouldn’t touch What are you looking for in a private land?

 

Brooke  

You know, when the market was really good knock on wood? It all came back?

 

Erwin  

Is everyone returning your calls? Everyone who’s borrowed money from you? Was that is everyone returning your calls your private Landstuhl there were so

 

Brooke  

low that got me worried. Which is important. That’s exactly so there were times and I’ve done promissory notes before without putting the collateral on the property. I’ve done that. However, this is investor I don’t know. Well, but I know. And I know he has a lot of properties under his portfolio. And even though it’s promissory note, I found that during this time, the return that’s fantastic and crazy high Come to think of it. Now I would rather put on the collateral meaning being registered, even though the interest rate might be slightly lower. I think I would rather do that. And so you’d

 

Erwin  

rather more security, that’s gonna like your lesson from this period. Yes. However,

 

Brooke  

now the interest rate, say 70%. Even if it’s from your own HELOC, I don’t see. I don’t see the private lending rate being that much higher, though. It’s not climbing as fast.

 

Erwin  

Interesting. Okay. Yeah. And your are you doing live living within your community?

 

Brooke  

I did one through a mortgage broker, which I just closed yesterday. This personal because I think if it’s somebody I know, I can call you and ask you what’s going on, even though there’s mortgage broker, who is probably the middle person in their experience, sometimes I found myself lean towards working with people I know. I’ve learnt before,

 

Erwin  

right? Because you have relationship equity. You’re on the same community. Yeah. wants to maintain the reputation.

 

Brooke  

Exactly. Deals are vetted, and they save on broker fee too. So they’re willing to do that. Right. Right, right.

 

Erwin  

Okay. Can you share, like what are terms you’re looking for in this market? So again, we’re recording sales for a second. We just had hopefully our last rate increase. So I think we’re up overnight rates are About 4.5, I believe right now. So what kind of terms are you looking for? If you’re attending today’s market,

 

Brooke  

still in double digits right now? Yeah, well, that will do. Yeah. So 10 is probably the lowest I will go. Okay. And so usually with people I know, at this point, I did have lazy money sitting around. So I reached out to mortgage broker in the past. However, for that reason I mentioned to you I do want to have more control. Yeah.

 

Erwin  

So, so registered on title is your now your requirement? Yeah,

 

Brooke  

now, it’s my requirement, I would actually advise people to do the same. And I do get that now, why the private lending rate hasn’t gone up that much. Because for people who are borrowing your money to the opportunity is probably different from before. So for them to just go up and return because your borrowing costs go up? It’s also harder for them to find the deal, too. Yeah.

 

Erwin  

So what are you lending on is that these flips? These birds are just for just a bridge finance, it’s mainly flips, mainly flips. And then is there like an LTV target along the value target that you won’t go over?

 

Brooke  

Actually, no, as long as it makes sense. And if I’m as long to value over 100, if after repair value makes sense, in the right market, where I’ve done flips myself, so if I see the number making sense, I’m not handy. I don’t know what’s behind the wall. I can read inspection reports. However, I haven’t an idea if they can actually make that money back.

 

Erwin  

Right. Right. All right. All right. So just a warning to the listener. Brooke is sophisticated. This is not for beginners. This is not for beginners. Yeah. Okay. Is that enough disclaimer?

 

Brooke  

I will also say understand the strategy you’re investing into? Are you doing brute force?

 

Erwin  

These are markets you understand as well.

 

Brooke  

Market, you understand what isn’t? If you don’t, it’s not hard to get comps for within your network or find a realtor or find a way to to understand that market,

 

Erwin  

you’re able to reference check the deal pretty easily. Yeah, right.

 

Brooke  

Yeah. I’ll tell you one thing about the deal. I closed yesterday, I usually ask for the borrower’s ID. And this time I didn’t. So I was a little worried because they were slightly late. And they didn’t call me or communicate with me. So I got a little worried. However, I usually ask for their ID. That’s one of the due diligence you do. Or yeah,

 

Erwin  

I asked these questions, because I don’t know why he only saw this article three weeks ago about the specific to Epic Alliance. Basically article in the CBC. So this is not me, folks. I’m not making this up and go go look it up here Alliance CBC. They only had one appraiser, Oh, wow. Vast majority, one appraiser that they controlled. Like as a as in like, for example, when when you and I do borrow money, especially when the bank, we don’t have any influence on who that appraiser is. Right? They usually take out from a list of people they trust, right? No one has an evil influence. It’s usually like kind of random, who is what appraiser there is, so that it’s truly independent appraisal, versus what I’m reading on the CBC article was that it was really like one or two realtors. Yeah. But Emily, like the one appraiser.

 

Brooke  

The difficult thing is sometimes the investors are not in that market. Right? They have a lot of auto province investor. So I’m thinking if I’m in that position, I trust her the market experts. Yeah.

 

Erwin  

So for example, you mentioned that you do business in Alberta. I imagine you have quality relationships there.

 

Brooke  

Yeah, a lot of I actually go to Alberta now because of trust or talent. or twice a year, at least now. And I’ll be honest, because this is in the book. Anyways, I’m completely open. I had a deal that went south, it’s in Winnipeg, and I lost 50,000 was my early investment. So I was really, really nervous. That was probably my second or third investment, since I got educated. Okay, so that was really scary. I did fly over there. And so you didn’t see the property before you did the deal? I didn’t. Okay, I didn’t see the property. Did you have it inspected? Well, they inspected it, and when why learned is wrong, the numbers, the numbers made sense, because it’s a property that had to fire, they have money in the buy, and they had insurance money to to start the belt. And number wise, it made sense. However,

 

Erwin  

there’s other factors, right? So who appraised it

 

Brooke  

somebody local there, and this is not your not your appraiser know,

 

Erwin  

who was a realtor? Was your realtor that our realtor? Is there a realtor? Okay, so they controlled all the information,

 

Brooke  

they can’t hold all the information. This is not a vending deal. This is a GP LP setup. And the deal wasn’t that big. And I thought at the same

 

Erwin  

time, I managed to lose

 

Brooke  

50k 50k

 

Erwin  

Right. Yeah. Because you were an owner, or you lost this is your investment.

 

Brooke  

The investment because there’s a GP LP situation or right so

 

Erwin  

yeah, limited loss. Right. Right. Right. Okay. Even worse than if you weren’t an owner. Like yeah, exactly. As we went there, and then heard epical I’ve heard people lost more money on public lands deals where they were the owner, right? Because they’re equity owners. So people need to remember that you can make a lot of money in real estate. But if the property value goes below goes underwater, as in like, it’s gone. The prices drop more than your downpayment, you owe that money. Right? Yeah. Negative return. Yes. Not just loss of your investment.

 

Brooke  

Exactly. Because that person who was in charge of the project, she was relatively new as well. And I’m a purse, people kind of person. And when I met him, he was pretty humble. He’s Asian. And we can say that only weekend. And I met him when he was with his mom. So he seems like a good son. So personally, I thought he was a really nice person, which he probably is. However, I think they overspent.

 

Erwin  

Yeah, I think that’s, that’s been part of the message I’ve been trying to get across with some of the past guests as well, this person may not have been a bad person that just failed to execute. Right? Like failing to execute doesn’t mean to mean doesn’t mean you’re a bad person. Just like if you had to steal bread to feed your family. I don’t think that necessary, makes you a bad person. Right, right or wrong. But this person may have had great intentions, just they just failed to execute, which is not uncommon.

 

Brooke  

It’s not uncommon. However, I was hoping he will come back up. I didn’t hear from him. He declared bankruptcy. And he was a flashy type. He drove a really, really nice, Porsche SUV went to went to visit the property in Winnipeg, a few years back. So there you go.

 

Erwin  

And that’s a challenge of being an influencer. You know, like, before I became a realtor, I drove a car drove a used Honda Accord. Yeah, if I never became in sales, I would never drive something that cost money.

 

Brooke  

My first car was a Honda Accord,

 

Erwin  

anyways, but like, here’s my real estate investing is as soon as I got I switched to BMW, I was doing more business, because they give the image of success. Right, exactly. Yeah. But I’m a frugal person. I don’t like spending on these things. Just the car. I love. I think more than once people understand that their money can make money for them. It makes no sense to spend it on frivolous thing. Exactly. Right. Yeah, that’s fine. I’m a little bit overboard. universitari I’m a little bit overboard. How cheap I am.

 

Brooke  

Well, that’s also Asian

 

Erwin  

bowls. But again, like, like, I’m pretty confident I can make consistently 20% on my money in real estate. Right. So why would I want to spend it on something like like, like a Porsche, right, you know, as long as it’s safe, right? So it goes back like the BMW, it made me return. Right? It helped me my business. Exactly. Right. So that to me, it’s kind of like it’s a business expense that actually returned, right? Yes. But if I didn’t have that, I would never drive a vehicle that

 

Brooke  

expensive. Okay, what do you enjoy, though?

 

Erwin  

I’m not a car person. So I don’t enjoy those things. I really value consistency, reliability over everything else. Okay. All right. So I do not need flash. And also because I know your Porsche, everything cost more your tires, your maintenance your chain. That’s that’s, that goes against my values.

 

Brooke  

That’s that’s, that reminds me of something. I grew up in Taiwan. And there was a point in time, if you’re flashy, you might get kidnapped. Oh, my, you know, so like, naturally, I’m subconsciously, I would think why would you want to put yourself out there? Exactly. Same thing with investors. Liabilities, right, right. That’s why we set a corporation. I actually have investors that kept saying, or even new investors coming coming in kept saying, I want everything under my personal name, right. I want to be on title. I think a lot of it is just because you want owning at the same time, they haven’t evaluated the liability, for example, and partly to understand the full picture or the text structure and everything else that that could be the benefit. Yeah,

 

Erwin  

not uncommon for novices. Yes. It’s just, I always hope that provinces understand like, there’s so much more. Never Never think that you know, everything. I don’t think I know,

 

Brooke  

I don’t think I do either.

 

Erwin  

I know, I don’t know, everything. I know. And this to go back like this gentleman in Winnipeg with a Porsche. In my experience, I have over 350 clients, and they almost all fit the profile of the Millionaire Next Door in the book. Right? Humble do not show their money frugal, right. So when someone does show their money, they are an outlier. Okay, from my experience, they are an outlier. And that’s it. That is part of the formula for being an influencer though. So I just think people need to understand that.

 

Brooke  

Yeah, yeah. All for if it’s something you love. If you’re a car person, probably totally Yeah. Then use your cash flow or use your residual to enjoy what you love to do. Well, here’s

 

Erwin  

the funny thing like a friend of mine. Lost Ferraris has One doesn’t show up anywhere on social media.

 

Brooke  

Okay, so many we mutually know. Yeah. Okay. Yeah, I think I think I Okay. All right, I get that.

 

Erwin  

So it’s, you know, again. So I guess my point is if someone shows flash, there’s usually an agenda behind it. Right? Yes. Right. Yeah. Because again, like, why would you want to display that you have stuff you might get robbed? Or the CRA might come to you? About to? Sadly, yeah. Okay. I think we’ve gotten sidetracked. I think it’s worth it’s worth going back to RTOS. I imagine it’s still a big part of what you coach and teach in your business. In your coaching business. Yeah. Who is it right for who is the right investor to get into rent owns,

 

Brooke  

I think it’s the avatar of me when I started, if you want cash flow, like you mentioned, you might not want cash flow, you’re actively building your wealth. However, I do think cash flow, if you have the ability to do that, for a lot of people, it’s good to have that cash flow to say that, hey, I can have investment income and not having to worry about my work. Not everybody loves their job, some don’t. So that will make sense for people like that. To get started, it is more creative. So at the same time, I don’t think everybody should just jump in and do it. I’ll give you an example. It’s funny that just happened. Somebody called me to say, this realtor suggested that I go into rental home with him, they have a potential tenant buyer, when I hear the profile of the tenant bar, it just doesn’t work out. Because you want to make sure that tenant buyer will be able to purchase at the end, it doesn’t sound like somebody in the end will be able to purchase because this tenant buyer has a pre construction condo, that’s gonna close which is gonna take up their mortgage room, or things like that. And they’re saying, Oh, I heard cuz of Ontario tener la, the tenant will usually take care of the place that sounds like a good idea. However, you have to consider other things not just because I want to get into investment,

 

Erwin  

right? Yeah, I think for the listener, understand like real estate, in general is very capitalist industry. People are not my experience, most of the industry does not understand rent to own like your regular everyday realtor does not understand regular everyday mortgage person does not transact on a regular basis. Right. So they do not like for you and I we have very different criteria for what they would consider a good rent to own. Exactly right. Because I’ve literally seen this I’ve seen I had a builder send me me rent to own deals. That made no sense, right? Yeah. Like the the tenant is like two years from retirement. So how are they supposed to get a mortgage? From biotech? So like, my point is, even though I believe in the strategy can work really well. Not every opportunity is truly an opportunity.

 

Brooke  

No, it’s actually quite a lot of work to find a qualified tenant buyer.

 

Erwin  

Right? It is what do you think the ratio is like one in 10?

 

Brooke  

A lot worse, I put down my book. So when I started, I was actually looking back in the days it was Kijiji I think now people use Facebook marketplace more. So the media changes. The point is, at that time, I probably talked to 100 people 10 look promising ended up with one. Wow, that was.

 

Erwin  

So 100 leads 10 are worth talking to

 

Brooke  

worth going to the next day. I probably talked to so many people at the time. I don’t even remember. And right. I mentioned I live in a small house. So when I was on the phone with the potential tenant buyers, everybody in the House knew what to say. Usually going to talk about on the phone. Yeah, that’s how many calls I’ve been on. It’s very active. It’s just I wholesalers, when they start they have to talk to how many people were same idea and that very first deal I also wholesaled it to somebody else. wholesaler meaning I got the deal. I packaged it, I found a tenant buyer, they found a market than some other investor takeover.

 

Erwin  

At what point do you present it to other offer? Investors? Do you have the property in mind already, or we’re

 

Brooke  

usually when I have the tenant buyer, because very quickly, very quickly, they will start shopping. So very quickly, we’ll have to make offers. It’s better to have investors ready already. Right?

 

Erwin  

Right. Right, because they’re gonna be they’re the ones who are actually buying the property. Right. So thanks for sharing those ratios. I think people need to understand these things, I guess. So don’t just take the first one that comes across.

 

Brooke  

Also, in the beginning, everybody was talking about their life problems, right? Because their rent to own tenants, they rent it for a while they are divorced or they’re self employed, their credits are hurt. So they want to tell you their life story. Yes, make the connection. However, I used to spend like 4050 minutes and still didn’t get to the questions I want answered. And the end 15 minutes I could get all that I need to stay, if they most likely will qualify or not. So it’s not a total waste, considering how much time I used to spend on it.

 

Erwin  

All right, so you are, you’re putting in the sweat to earn your wholesale commission

 

Brooke  

at the time and especially, I was really active when I started till 2017. So remember the market kept going up. And so at that time, a lot of tenant buyers are interested. I don’t see as many people as interested now, at the same time, you know, even investors when the market goes up, everybody was worried they are in too late. So the tenant buyers, same thing they want to get into a house sooner than later. Especially, they hear other homeowners are profiting, right. Yeah. So there were a lot of people out there time looking into it,

 

Erwin  

compared to now. So even rent to own tenants for like, FOMO

 

Brooke  

Oh, yeah. Homeowners are emotional. Yeah. So So So

 

Erwin  

you’re telling me that their behaviour, emotions were the same as homeowners, homebuyers?

 

Brooke  

They’re very emotional as homebuyers because when they look at a house, they don’t look at the worst house on the market. Like we’re looking for money in the bar different. Yeah. And sometimes I see a property I’m like, just putting a load of money and it worked really well. Great area. They want it to be like a

 

Erwin  

home. Turnkey show. Yeah. Something we couldn’t be proud of.

 

Brooke  

Yeah. So stage nicely and just like home,

 

Erwin  

and then what markets are you looking at? What rental? Yeah, everywhere.

 

Brooke  

So I’ll tell you every time people ask an Ontario loan, so as far as outside of Kingston, Durham, which I’m done, Ottawa, Toronto, London, Strathroy. Woodstock, so north to bury metal Maitland, so it really doesn’t matter.

 

Erwin  

No, it doesn’t matter. I’ve heard of all these cities. versus, you know, you have some minimum criteria, do you not?

 

Brooke  

Yes, in Ontario slightly harder, because they have to have certain level of income to be able to qualify. And, again, we don’t anticipate them to fail. However, if you hold that property, you have to be able to sell it. If you buy a property worse. Yeah, if you buy a property with 300 people in the neighbourhood, how are you going to act six? So yes, all these considerations

 

Erwin  

give a number for your minimum population, like 50,000 10,000.

 

Brooke  

You know, what’s funny, sometimes, because we’ve been qualified for so many different municipalities. I’ve talked to so many different cities, as a result, every study is different. So sometimes I’ll give you an example. Gravenhurst, they might consider us only this many people. But if you consider their surrounding, and it’s a good community,

 

Erwin  

it’s summer versus winter, it’s very different.

 

Brooke  

So as long as you understand the market, I will say not like 1000. Nope, that’s kind of small. Another indicator, if sometimes they don’t have city service of sewer and things like that, right?

 

Erwin  

Not because it’s hard to get financing on it or not on city water

 

Brooke  

also means that it’s not populated enough. Yeah, it’s things like that. It’s not an absolute no, because the city is moving towards those places, too. So it really depends on the market. Right? Yeah.

 

Erwin  

So again, you’re approaching this sophisticated not just blindly buying anything.

 

Brooke  

No, you know, how listeners to they just want a simple three rules. What am I supposed to do? Do I buy or not? If there’s, there’s a septic, it’s things like that, however, really do look at the overall picture, like I mentioned, that’s usually an indicator. It’s a smaller community. However, is the city moving in? Yeah, it’s things like that.

 

Erwin  

Yeah, the last property, we bought the septic we got a huge discount on the entire neighbourhood was was serviced. Just this one homeowner chose not to connect to city boss services. Right? Yeah. And so it was a massive stigma. Well, it does cost money, right. But yet, instead of like 12 offers, there’s only three offers. So it’s so so for us it was opportunity and our climate a tonne of money.

 

Brooke  

I think that’s an opportunity. Yeah, exactly. Yeah. So

 

Erwin  

then, so yes, you’re right. I love it. I love the point in the traditional financing. So again, it’s not an easy answer.

 

Brooke  

Yeah. So it depends. It all depends.

 

Erwin  

So you know, have a good team to make these decisions.

 

Brooke  

Yeah, I will also want to add something to it. Because I had investor, I think the power teams are there, and you have so many to Power team member, they’re there to advise you, you ultimately still have to make the decision. If one Power team member says no to you, that doesn’t mean that’s your decision. I still think you have to collaborative flee. Make a decision and what makes sense to you. Yeah, like rent to own. It might not make sense to somebody, but it makes sense to me for my journey.

 

Erwin  

But that’s what I love about this podcast is that, for example, some people get in real estate because they see an ad, they go to a workshop. They’re like what’s taught there, whatever, right? Whatever they teach there might not be right for you. Right, and that’s why like, you know, like some of these workshops are intended for people to go full time real estate investor. So I think it’s good expected information, but 95% of those folks who go will never become full time real estate investors, and probably 80 person I will never buy an investment property.

 

Brooke  

Yeah, that’s a good point. And also a lot of people coming even to our bootcamp, for example, they want simple answer, just tell me exactly what to do which property to buy. Yeah, it’s

 

Erwin  

complicated. It’s complicated, especially if you want above market returns, which you and I want. To be a market insider is not easy. It’s, it takes years.

 

Brooke  

Also, I think a lot of it is just you can, you can decide what you want to do. But it’s a lot of it’s a mindset, right? Really, it’s not, you’re not going to get to it the very next day. However, a lot of people are going to go into different places thinking I’m just gonna get the answer. Get it done the next day.

 

Erwin  

Can you tell us about your book? Is that a good place for novices to get started?

 

Brooke  

Yeah, actually, that’s the audience I had in mind. When I wrote the book, he

 

Erwin  

shot to the camera. Oh,

 

Brooke  

I haven’t looked at the camera the whole time. That’s okay. No,

 

Erwin  

no one watches this show.

 

Brooke  

What’s it called? Financial freedom, the royal way. Why? Because the railway, the railway is because, you know, I work very flexibly, and my parents, my family is in Taiwan. And I think the lifestyle of a lot of people is to be able to travel and have the lifestyle you want. Just like the Royals, you do whatever you want. And I know financial freedom is a term that that’s being overused. However, I think that’s still what people gravitate towards. Yeah, it’s the lifestyle, and also whether we’re away because I’m older compared to a lot of new investors. So if I’m already at the age of the Queen, it’s not the railway.

 

Erwin  

Age of the King, the current king, she lived forever. So

 

Brooke  

I don’t mind.

 

Erwin  

For context you’re sharing before recording, even before the pandemic, you’re in the office once a week was it

 

Brooke  

once or twice a week is very flexible. It wasn’t always like that. When we started building up the business in Canada, it was a little bit more demanding. However, when I took on the job, my kids were even younger. So I already said, I do have to pick up the kids at three o clock from time to time. So I think even starting then I was already pretty flexible. Right? In a way. Yeah.

 

Erwin  

So you have a lot location freedom or time from time freedom. Yes, right. Yeah. So I guess when you go to Taiwan, you’re you can still work.

 

Brooke  

I can still work. However, sometimes our late night meetings, I aim to have all the meetings before 12 o’clock, local time. It could still work.

 

Erwin  

And then from my experience, like I’ve had clients who had a lot of work flexibility, they were very successful investors because they were to be able to come like, they would be able to come almost on demand. Like I literally had a client who worked in it even remote, but his clientele were small businesses, and you can’t do anything. You can’t shut down their servers and stuff until after five o’clock. So during the workday, he was free to come with me local property. Right. So like a property would come up. I tell him like, Hey, can you come see it? Now? He’s like, Yeah, I’ll be there in 30 minutes. Maybe the first one to offer? And now and now he’s rich and retired?

 

Brooke  

Yes. Yeah. You know, the funny thing is, it’s how your user time That reminds me, some people probably would just sit around, some people use a flexible time to look at property, build their business, right, or learn some new skills. So I love the flexibility. Ashley, when I started working, my dad passed away in 2017. So I knew I had to fly back on demand, basically. So that’s also another reason I told the company that I wanted the flexibility. And that kind of every time I went back to Taiwan sometimes to extend the trip. So I didn’t know when was his last day. And some people asked me, I don’t quite remember those days, because we were just there. And we were just supporting him at the time. And I really needed that flexibility at the time. So I kind of forced myself having to have enough money to fly back to Taiwan, having to have the time flexibility to go back at the same time.

 

Erwin  

Are you saying that it was a big trigger moment for you too?

 

Brooke  

I would think so. I didn’t think that way at the time. However, when you look back how things lined up?

 

Erwin  

If you could do it all over again. Would you wait for that trigger moment?

 

Brooke  

Probably not. However, I think I was very lucky. Because I was staying at home for 10 years. So I got to spend quite some time with them. Every time I went back, it was around three months before I took on the job. And even around the time he passed away. I still went back around at least 1233 months every time I was there. Right? Right. Yeah.

 

Erwin  

Okay, we’re way over time, bro. Thank you for being so generous. I do have I didn’t even ask you but the market that we’re in right now. So you guys coach and mentor a lot of students what are you telling them but this time so again, recording February 2, is now this bad time to be in real estate good time. Where are your students hearing?

 

Brooke  

So even you and I we’re still investing? I do think we have to look at things differently now. It’s no different than when I Started, everybody was saying the property price are too high, I cannot secure anything. I cannot do anything. Now there’s

 

Erwin  

the rates are too high. The rates are too high.

 

Brooke  

Now the rates are too high, the property value went down. Are you getting into take that advantage? Yeah. And we always say here is your strategy first. Second market property is the very last thing you look at. So if this strategy doesn’t work, switch to a different market that could work. Finally, find the property in that market. So you don’t just rush in and say the market is restricting me? Then pivot? Yeah.

 

Erwin  

Look, thanks so much for being so generous with your time. Any final words you want to share?

 

Brooke  

Um, we have so much to talk

 

Erwin  

about. Yeah, we have four hours.

 

Brooke  

Yeah, that’s right. So reach out to me, I’m really open to talk to new investors, because I think I’m in the position to share and to contribute at this point. That’s why I wrote the book. Because, really, I wasn’t aiming to make any money. So I’m lucky that I’m actually not losing money at all. I broke even a while ago, so anything beyond thanks, everybody, and I’m easy to reach out to any social media. Brooke Shang I’m the only one. Not the only one. It’s just Brooklyn.

 

Erwin  

br o k.

 

Brooke  

There’s no EBOKE there is me there is any br o ke s h a n g. Otherwise, there’s broke?

 

Erwin  

No, no. But yeah, you see, Brock is spelt like Brooke Shields. Okay. Yeah.

 

Brooke  

That’s why I have the name Ashley. Because I didn’t know too many English names, and she was popular in Asia.

 

Erwin  

One more time,

 

Brooke  

well, where can people get the book? Amazon is the easiest way. What’s it called financial freedom, the royal way. And then the subtitle is Seven Commandments. I put a number in there because then people think it’s doable. When you put down number seven, number four, they kind of see their system up. It’s not overwhelming. So seven chapters.

 

Erwin  

Fabulous. And now for our listener listeners all of this on the show notes as well. Okay, all right, because books gonna send it to me. Thank you so much for doing this. Thank you Ron.

 

Erwin  

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

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Web: www.RealEstateNetworkingQueen.com

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Book: FINANCIAL FREEDOM THE ROYAL WAY https://a.co/d/0p90cVB

 

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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…

If you’re interested in being a successful real estate investor like those who have been featured on this podcast and our hundreds of successful clients please let us know.

It is our honour to give back and educate others on how we build cash flowing real estate portfolios using all the best practices shared on this podcast, from the lessons of our hundreds of clients and of course our own experience in owning investment real estate.

If you didn’t know already, we pride ourselves on being the best of the best real estate coaches, having the best property managers, contractors, handy people, cleaners, lawyers, accountants, everyone you need on your power team and we’re happy to share them with our clients to ensure your success. 

New investor or seasoned veteran investor, we can help anyone by providing our award winning coaching services and this isn’t all talk.

We have been awarded Realtor of the Year to Investors in 2015 by the Real Estate Investment Network, 2016 by the Canadian Real Estate Wealth Magazine and again in 2017 because no one told the judges no one is supposed to win the award twice but on merit, our peers deemed us as the best.  In 2018, we again won the same award by the Real Estate Investment Network.

Hopefully being the most decorated team of Realtors in Ontario will make you consider us for your first or next real estate investment.  Even if you don’t invest in our areas, there’s a good chance I know who would be ideal for you. 

I’ve been around for a while, some Realtors are talented at servicing investors there are many with great ethics.  The intersection of the two, talent and ethics is limited to a handful in each city or town.

Only work with the best is what my father always taught me.  If you’re interested, drop us an email at iwin@infinitywealth.ca.

I hope to meet you at one of our meetups soon.

Again that’s iwin@infinitywealth.ca

Sponsored by:

Infinity Wealth Investment Network – would you like to know how our investors returned 341.8% on positive cash flowing real estate over the last five years? On average, that was 68.4% per year.

Just imagine what winning in real estate could do for you.

If you would like to know how we did it, ask us how by calling 289-288-5019 or email us at iwin@infinitywealth.ca.

Don’t delay, the top markets we focus in are trending upward in price, so you can pay today’s price or tomorrow’s price.

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

Erwin

Hamilton, St. Catharines and Toronto Land Development, Real Estate Investor, and soon to be builder.

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From Fearing Tenants to Working at SingleKey with MacKenzie Wilson

Welcome to the Truth About Real Estate Investing Show for CANADIANS… The little show that started as a six-episode experiment in 2016!

And after blogging every week for five years, we pivoted to podcasting. 

I used to ask guests if they preferred tea or coffee, and what they had for breakfast, along with another 80+ prepared questions to now only a handful of questions, including my favourite ice-breaking question: “what’s keeping you busy these days.”

 

 
 
 
 
 
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A post shared by Erwin Szeto (@erwinszeto)

What’s keeping me busy is all the Strategy Calls I’ve been doing with attendees who bought them at the Wealth Hacker Conference. 

Next, I’ll be offering strategy calls to all my past clients as I’m finding that many investors are stuck and unsure of what to do next.

In general, I’m finding a lack of confidence which is fine. 

All the cons out there are by overly confident shysters who lack experience and know-how. Worse, some coaches are setting up their clients for failure.

To avoid failure, we’ve always taught our clients the risks of real estate investing one property at a time. 

We guide them through the cash flow analysis and the execution of acquiring, renovating, renting and sometimes refinancing.  

99% of our clients complete one property at a time to ensure a winning portfolio of investment properties.  

Boring, systematic, proven, predictable, low risk and profitable, just the way we like it.

We have a lot of data backing up our investment strategy, with currently over 45 self-made real estate investor millionaires among our clients, and our goal is to get that number to 200 in a few years.

Enough about investing, as all the talk about investing makes Erwin a dull boy 😄  

The Saturday before last, I attended a long overdue guys’ night out and not just any guys’ night out, but a real estate mastermind of sorts. Charles Wah is an award-winning land developer and builder, Andy Tran is a leading authority in renovating additions and has been the consultant for all of my basement apartments, and Roger, who I think owns 17 investment properties now. It’s hard to keep track.

Anyways, there was a ton of real estate knowledge out and about downtown on Saturday night, enjoying dinner twice and a couple of beverages. 

Roger even received an offer on one of his properties while we were having dinner LOL.  

Hopefully, you have a great group of real estate friends too, and as I advised one of my clients, always be looking to expand your circle of real estate friends to those with more skills and experience than yourself and those five people you spend the most time with.

From Fearing Tenants to Working at Single Key with MacKenzie Wilson

Speaking of investors with knowledge and experience, this week we have Mackenzie Wilson of SingleKey, the tenant credit and background check reporting service that recently acquired Naborly.

If you haven’t heard of SingleKey… well, they are quite popular in the circles I run in, and for you new investors, you’re so lucky you don’t have to run credit checks the old way…

Mackenzie is a very diligent investor from Calgary, Alberta.  

He shares how we went from oil rigs and IT at Telus and left it behind to start an online business in real estate that didn’t go so well, but he survived, still owns his three duplexes in Calgary and works at SingleKey as a Director.

As you’ll soon tell, Mackenzie is a diligent landlord (one of the most diligent I’ve ever met). He loves to help other landlords in Alberta out, as he’s always sharing and educating his peer group of 4,200 Alberta Landlords.

On today’s show, we talk about the difference between commercial and residential in Calgary, Calgary vs. Edmonton.  

Of course, we talk about tenant screening as it appears to be a passion of Mackenzie’s even though his properties are in Alberta and how appropriate it is his day job is now at SingleKey.

One big nugget is I asked Mackenzie, “As a beginner investor, what should I buy in Calgary?” His protip is a good one.

Please enjoy the show!

 

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 FREE Online Training Class.  We will be back in person once legally allowed to do so, but for now, we are 100% virtual.

No need for you to reinvent the wheel; we have our system down pat. Again that’s  www.infinitywealth.ca/events and register for the FREE Online Training Class.

 

This episode is also brought to you by www.stockhackeracademy.ca, where everyday real estate investors learn the best practices in stock investing to earn cash flow in about 15-30 mins per day from their mobile phones. After real estate, Stock Hacking is the next best hustle, as you’ve heard from many past guests on this show. Among our students last year, 31 trades were shared with them. 30 were profitable for an over 96% success rate and 12% return on capital. I will be giving free demonstrations online, very similar to the one I gave my kid cousin, a full-time musician who just made a 50% return in 2021.  Past, of course, does not predict the future, but if you’d like a free demonstration, go to www.stockhackeracademy.ca in the top right and click FREE Demo.  At the demonstration, I’ll have special bonuses. We do not advertise publicly for all my favourite listeners, and I only have two more demos to give in the next few weeks.

Don’t delay www.stockhackeracademy.ca, what I consider the future of side hustles with real estate so unaffordable for many.

 

To Listen:

Audio Transcript

**Transcripts are auto-generated.

 

Erwin  

Hello, and welcome to the truth about real estate investing show for Canadians the last show that could in what started as a six episode experiment back in 2016. After blogging every week for about five years prior to that we pivoted to podcasting. I used to ask guests if they prefer tea or coffee and what they have for breakfast, I was picking up their morning routine along with another 88 or so prepare to questions to now only have a handful of pre prepared questions. Actually, there’s only a little one question that’s pre prepared. My favourite icebreaking question. Now this icebreaking questions wonderful for almost any sort of networking event. Wonderful for anyone you’re meeting for the first time? What’s keeping you busy these days? The point of the question is for the person you’re asking is to choose whatever they want to share with you that’s going on in their, in their lives, saved my guests by just choose which way they want the direction of the conversation to go. So what’s keeping me busy these days is all the strategy calls I’ve been doing with attendees of the wealth hacker conference, who purchased the half an hour call. Yes, a lot of those calls went well over 30 minutes. Yeah, anyways, next, I’ll be offering those same strategy calls to all my past clients. Yes, past clients, you got an email from me on January, Tuesday 24th. That is just for clients only, I’ll be doing the same strategy calls for them that I’ve been doing for folks who paid me good money for at our hacker conference anyways, in general, I find a lot of investors are just stuff and they’re not sure what to do next are quite unsure of their next decisions, whether it is to sell an existing property or whether it’s time to buy by getting into the investment into the market for their next investment property, or some of those first investment property. In general, I’m finding a lack of confidence, which is fine. There’s a lot of cons out there. And often they’re by overly competent shysters who lack experience and know how, what’s worse is some of them are some of those coaches are setting up their clients for failure. And honestly, it’s even worse if they’re charging like 10 $30,000. To do so. That would be called a negative return on investment. To avoid failure. We’ve always taught our clients to reduce their risks by investing in one property at a time. We guide them through the cash flow analysis, the execution of acquiring, renovating, renting and sometimes refinancing 99% of our clients net, maybe 98% of our clients complete one property at a time to ensure a winning portfolio of investment properties. I would call that boring, systematic, proven predictable, low risk and profitable just the way I like it. We have a significant amount of data backing up our investment strategy. You know, again, we have been we’ve been working with clients since 2010. I’ve been investing myself since 2005. It’s a anyone has been investing for that long. Generally, you’ve done quite well. Once you’ve been through things smart. We have over 45 self made real estate investor millionaires among our clients that we help them acquire property for and our goal is to get that number up to 200 in the next few years. And after the investing. All this talk about investing these are one adult Boy, this past Saturday, I attended a long overdue, actually I helped organise it and I long overdue that guys night out. But not what is it guys, these are my real estate. This was a real estate mastermind of sorts, as we had. For example, we have Charles Wah with us. He is an award winning land developer. He’s on the board actually of the West End Builders Association, they’ll adapt so he’s a builder and developer is quite successful in real estate. He’s made a lot of money. And he trained the leading authority in renovating additions. And he’s been the consultant on my basement apartments, all of my basement apartments and the vast majority of our clients basement apartments and now carrying forward garden suites. Roger who I think owns at least some of the properties at this time. It’s hard to keep track because he’s a flip some you hold some so it’s hard to nail down what his exact number of current Holdings is. But he’s transacted on quite a few properties with his own name on stuff so active investor anyways, there was a tonne of real estate knowledge out out and about downtown Toronto on Saturday night, Enjoying dinner, actually two dinners, the ones that five and again at night. It’s typically said typically breakfast, whatever two meals were at or had within seven hours, a couple of averages. rusher even received an offer on one of his properties while we’re eating our first dinner. He had to deal with it later on in the evening while we were having drinks at another bar. Hopefully you also out there have a great group of real estate friends. If you don’t, I cannot impress upon you enough that you need to have your friends in real estate. It’s great to be able to share and chat about war stories. I advise one of my clients recently who’s newer in real estate to always be looking to expand your circle of real estate friends to include those with more skills and experience in yourself and more than those that you spend the five people that you spend the most time with. You should always be trying to grow, improve your network, and, for example, this one client, she’s telling me that her coach, not me, but someone else had five years experiences. She thought that was a lot. And I said, you know, you know a lot of my friends have more than 10 years experience. So I said, you can very easily find some friends make some friends, I have more than 10 years experience. Anyways, speaking of investors with knowledge and experience this week, we have Mackenzie Wilson of single key. If you haven’t heard a single key, they are the tent credit and background checking reporting, background check reporting service that recently acquired neighbourly, I think when neighbourly just a few years ago, nobody was dominant. But now stick with us now consume them. Actually, single keys actually made a lot of headway in the last little while, they’re actually extremely popular in my circles, a lot of people are already using them. And also, quick side note, you’re so lucky, you know, at the run credit checks the way I used to having to do on paper, having to try to read these things on their Equifax reports at the time and all these codes. Anyways, McKenzie is a very diligent investor from Calgary, Alberta. He shares how he went from oil rigs in a very nice IT job at tell us what they came with a pension and left it all behind to start an online business and real estate. That didn’t go so well. But he survived. He still owns this history duplexes in Calgary, that cashflow, and he works now works at single key as a director. As you’ll soon tell, McKenzie is a diligent landlord, likely one of the most diligent I’ve ever met and he loves to help other landlords in Alberta, as he’s always sharing and educating his peer group of 4200 Alberta landlords. On today’s show, we talked about the difference between commercial a bit of an update on commercial real estate and Calgary and how residential is doing, they’re actually performing quite differently. The difference between investing in Calgary versus Edmonton talk about the rental market in Edmonton. Of course, you’re talking about tenant screening, of course, as it used to be a great fear of McKinsey’s I guess is more like an unknown for McKinsey when he first went become a realtor. Sorry, landlord, but he’s kind of mastered that subject now. And how appropriate that it is that he now has his day job at Singularity. And one huge nugget in the show is I actually asked McKenzie, if I was a beginner investor, what should I buy in Calgary? And his pro tip is a really good one. Please enjoy the show. Mackenzie, what’s keeping you busy these days?

 

MacKenzie  

Hey, Erin, man, thank you for having me on your podcast. This is an honour and what’s keeping me busy these days, continual self improvement, I’ve been able to take the day job from where I’ve been Telecom in the past and the oil and gas into directly relates to real estate now becoming a director of content and community building at single key, the italic constant changes, by the way, so I’ll probably be different tomorrow. But having this focused in always, and I’m not gonna lie, someone told me how hard parenting was. And I really knew what the challenge was raising a three year old and a six year old currently at I don’t know if I would have done it, but man, is it ever rewarding and I wouldn’t change anything but, you know, life Life in the fast lane of what we do

 

Erwin  

these days. Can you help? Can I ask hold you hold your patience and ask my guests that?

 

MacKenzie  

Oh, cool. I’m 38 Oh, yeah. Okay. Oh, perfect. I appreciate that. The lack of here in the green the beard. I always have a 10 year bandage on was good in high school. Not good anymore.

 

Erwin  

McKenzie, you’re coming from telecom recover from going out to name your employer.

 

MacKenzie  

Yeah. Oh, yeah, for sure. Tell us I mean, so Baris, I’m from Calgary. I got two diplomas both from state so technical institute one was a business administration major in management came back two years later, and oh seven graduate in oh nine with Network Information Technology Diploma, focusing in network and so essentially, I had a job where I log into these devices routers and switches that ran the internet literally the backbone some of their size or the size of the deep freezers and you know, a card and washing machine be worth 50 to 100 grand in the box be worth half a million dollars. And that was generally my job for nine years except I had a three year sabbatical where I moved into sales at TELUS got laid off had an opportunity to come back from the operation side took a package because as most of my I’ve ever seen at that point my wife bought a an RV or travel trailer which is one of my major passions is camping and all that and this actually recently got a camper van but last worked in the oil patch. So basically I went from bashing keyboards and having it fingers to sling and slips and drilling, drilling holes and roughneck and on rigs up in northern Alberta and BC.

 

Erwin  

You went from white collar it to as bluesy and get on the rig. Yeah, working on the rig.

 

MacKenzie  

Yeah, so I tried it once and I was 18 I lasted like, three months and then I got I don’t know what I started school or Something I don’t remember why I left to be honest with you didn’t last long. And then in 2007, I think I was twice I’m 20. I went back in the rigs for a winter made a tonne of money, was smart about it, kept it and then I travelled with my now wife. For almost two months, we did a Southeast Asia trip. And then I parlayed that into his 35 day 1000 kilometre truck and trailer chip, starting in Quincy, Washington going down the west coast and the one on one into California, San Francisco. I had a buddy who had just quit tell us and got an an engineering job at Facebook, to the Facebook campus. And I was like, Oh, my God, this is completely eye opening.

 

Erwin  

It looks like basically, Disney from an oil patch to Disney. Yeah, sorry, Mackenzie, for an ignorant Ontarian. Like myself, can you explain what like your typical day was working on the oil patch? All right. So you have

 

MacKenzie  

depends on the rotations, my role was 14 days on seven days off. But on your days off, you had to get yourself back to start your 14 day rotation. So I would drive from Calgary, up to between Dawson Creek and Fort St. John DC, which, if I’m remembering correctly is both 16 or 14 hour drive. In the winter, though it could easily go up to 18. or longer if the roads are really bad. I usually sleep halfway. So I basically had to have like three to four days off. Do you think that the travel days on both sides, and then did that for a winter and so a typical day is be discharged on nights for the first seven days from 7pm to 7am. And then depending on the rigging up, or, I mean, I was on the double. So we typically drill a hole from getting on site to completion leaving to the next site would typically be around 14 to 21 days to drill a hole from start to finish. Before they could put a service regarding actually haven’t produced whatever the the product was. Can I ask what someone makes doing this? Yeah, so I think it’s actually posted on the Canadian drillers Association, her I forget the exact acronym, but I think at that time I was 23 or 24 bucks an hour. But you have to remember, the last four hours of every shift is a time and a half. And then when you get to a certain number of hours a week, anything after that is overtime. And that’s where you really make your money. And that you can make a lot of money quickly. It’s not easy work by any means. But if you’re willing to go hard and do it. So I mean, there’s a good for work ethic. But I also know that and it’s well said you typically, you know you are of your five or seven closest peers, you know who you hang around with? And I certainly believed that to be true. And so it wasn’t a forever gig. Oh, like that? A? Yeah, there’s really good people that for sure. But then you could also get people that are just completely driven by money and perhaps don’t have the best that I use in life. And when you get a few of them and you’re working in and remote locations, they don’t really see anyone else. And yeah, it can be certainly challenging. I mean, if you keep your wits, and we work hard. I mean, I was I mean to give this context, I bounced around between a half dozen crews before I finally landed one that I had the ability to work the rest of winter with and yeah, it can be quite a little tight knit culture if you don’t fit in, right. And these jobs are still available today. Yeah, they’re still drilling actually, you know, since COVID. And then with the whole demand drop in the oil patch game, our patch is very volatile, people will come to Alberta, they love it, they get high paying jobs. And then they experience a recession or decline or the drop in the demand. And a lot of people don’t like it, and they leave and we have the cycle of people coming and going. But I’m sorry, what was the original question or not where we’re going?

 

Erwin  

If there’s still jobs in this field, because I’m trying to get there is all this talking about recession, whatnot. It’s in the headlines every day, for example, Microsoft just announced laying off I don’t know how many people 10,000. But I think that’s like 6%

 

MacKenzie  

It’s not a Yeah, 10,000 rolls, but yeah, so there are positions. Oh, sorry.

 

Erwin  

Let me just finish that thought my point was that headlines, they’d love using gross numbers, rather than percentages, because 6% of Microsoft is not that huge of a cut in the middle of the first totally absolute over relative all day long. Yeah, Amazon’s cutting another 18,000. Again, it’s concerned they’ve like, I don’t know, they’ve grown so much in the last three years. These are very small numbers. And it’s unfortunate for anyone to lose their job. What I’m trying to get to as though is that I’m consistently hearing from all my friends in more blue collar areas, who or their executives of companies who have blue collar staff. And what I’m hearing consistently is they still can’t find enough people to fill those jobs.

 

MacKenzie  

To add on to that so on the radio today, I typically try to catch the news and I drop off my kids at school and I do the morning drop off for school and daycare and they I’m the president of the residential construction association for Alberta or my bid for Calgary. Don’t quote me on that said they’re short 5000 full time. Would you call it? Red tape, Red Seal. Okay, carpenters, plumbers, electricians, all that kind of stuff to build homes. Alberta needs 5000 full time positions right now, trying to keep up with the demand to build housing, our supplies lock in our demand right now we’re finally growing something that you guys have been generally called the normal growth in Ontario for I don’t know how many years now. It’s always been a different picture. But yeah,

 

Erwin  

since like, 1990.

 

MacKenzie  

I don’t know how long Yeah. And the macro economics aren’t changing, right? It’s not going away. Yeah. So thing. Yeah.

 

Erwin  

So many years ago, and what my point is that all of us recession talk, it still sounds at the end of the day, anyone who wants a job can have a job within a week or two.

 

MacKenzie  

And if you are really there’s that scene work harder, not smarter. But there’s a, say a fine line of having good work ethic. And, you know, having some ability or talent to go with that, if you’ve got me got one of those two strong labour if you have a good mix of those, you should have no problem finding employment.

 

Erwin  

And also good or bad thing. I have friends who who hire out of India. Alright. And my understanding is that way their wage growth is going skyrocketing. I could totally see that. Because already many companies are have been outsourced. In India, they’re looking to outsource even more.

 

MacKenzie  

Oh, yeah. Tell us that huge industry initiatives around that since 2009. And we’re in Philippines as well. And yeah, I can totally see that.

 

Erwin  

So all those wages are going up. So it seems to be a mixed bag. Because again, I hear people having challenges here hiring people. And then we’re in this mix right now. But with like with hybrid at home work for not, for example, Disney announced that they want their first staff back four days a week, my cousin in the federal government in Ottawa, they’re mandating to three days back in the office week, right? So we’ll see. We’ll see. It’s a few interesting times.

 

MacKenzie  

Very much when you think about that play in commercial real estate we’ve had with our oil and gas recession, going through the mid 2015. To right into we got the bottom of our trough right, finally levelled out stabilise and then we hit COVID. And so I don’t know currently what the numbers that but over the preceding years, we’ve been in around 25 to 33%, we’ve basically been there, one out of the three major towers downtown Calgary were completely vacant for Office. So there’s been initiatives to convert them into residential, some not for profits for for shelters, and I think things are on there. And, and then trust, we’re trying to also always diversify out here in Alberta, which is good, but at the same time, too. I think the advertised timelines to phase out. Fossil fuels are so far unrealistic, it’s not even funny. So we could go into that too. And we can talk about it’d be very angry conversation and real estate career journey. So yeah,

 

Erwin  

I do want to ask, actually, about the commercial vacancy or any investors getting into it buying vacant commercial and converting to residential for profit?

 

MacKenzie  

I don’t know because it’s a wider discussion that’s

 

Erwin  

going to have to happen. Like for example, here locally, have you heard of cocheco? They’re like Rogers to like, okay, country. Yeah, their head office is completely vacant. It’s actually available for rent or buy believe, right? It’s absolutely insane. It’s a huge piece of like, probably Class A commercial

 

MacKenzie  

telco. You know, as far as telcos and some error areas, we’re probably pretty advanced. I’ve always had a work from home hybrid model from 2009, from when I came out of state and started there as a contractor to now working there full time, and it became permanent over COVID, which, unfortunately, I didn’t like because I did appreciate the ability to get into the office as more productive since having kids I found being in the office was actually better for me. But anyways, it’s that’s something that’s always been there. So a lot of our office space is super vacant, they got rid of the corporate tower in Calgary, and it’s all who rents it now. Oil and gas, but where I worked in was core infrastructure, so we could never get rid of the building. But we had empty floors upon empty floors, and some had been renovated since like the 90s. It was a little bit of nostalgia walk into some of these floors. Yeah. Cool. Creepy.

 

Erwin  

That’s a little bit like the like the shining, you know?

 

MacKenzie  

Yeah, it was, is different is different. But, you know, I worked with really, really good people. That’s why I stayed as long as I did at TELUS because I have amazing teams. There’s about a half dozen of us that that supported all facets of the backbone period with other telco providers and like, incredibly smart folks, and I still I always knew when I got into through that was never for everything because I couldn’t Excel to be at the level they operate at and from, from a technical perspective, so I always knew I had to switch. And funny you mentioned Rich Dad, Poor Dad, you took the training, it was one of my two catalysts that got me into real estate was was reading the book, which I imagine probably is for most people of my age group.

 

Erwin  

I think we’re about eight out of 10 people I know who are real estate investors who read the book, I think somewhere around there. Yeah. Why don’t I have another look, people that read it. This is the logical with the takeaways, the action items, the evil asset

 

MacKenzie  

over time that you directly own, and if it burns down, still has value that increases and appreciate. It’s, I think it’s phenomenal offsets while we’re talking.

 

Erwin  

But let’s bring it to the beginning, then. Because it sounds like you’re quite successful in your career. And not

 

MacKenzie  

that, you know, I was always stable and had job security, which I’ve always been very appreciative of. Yes.

 

Erwin  

And correct me if I’m wrong, you were union and pension as well, while you’re telling us?

 

MacKenzie  

No, most of the time I was managed professional, meaning that I was non union, I had a brief union role when I came back to tell us after I worked in the oil patch, just to get me back in the house, but then I went, I went back to manage professional. So does anyone get pension? And those? Yeah, definitely. There’s they still have a pension, which obviously is not as common these days. It’s even exist. So yes. Yeah, no great job security. And now that I’ve left TELUS been there so long, and I’m seeing when I tried to buy my own benefits, and go to Blue Cross this past year in 2022, and I was like, Wow, man, was I ever lucky and felt that I did not realise the quality of what we had. And,

 

Erwin  

yes, the grass is not always greener on the other side. No, you know, all the nice, you know, now you have kids to have dental and I plan Z. And

 

MacKenzie  

I said, this morning, for my oldest, two teeth pulled I feel for the guy, but like, Yeah, wow, that’s not cheap.

 

Erwin  

Let me tell you that. How much was it? Oh,

 

MacKenzie  

so I’m paying out of pocket where before, also to cover everything. And I may have a small little bill at the end. And now it’s like, I hope like this covers the percent or whatever it might be. So yeah, so start from the beginning. So yeah,

 

Erwin  

so what at what point at what point did you start? Did you get into real estate investing?

 

MacKenzie  

Yeah, I had intentionally and unintentionally so I actually rented out the second time, I went back to school, my parents moved, and I stayed in that house and I rented out room by room while I was at seat. And I didn’t like it. I wanted nothing to do with it. Other than I wanted to stay in that house, because I had really good access to transit to get to sate. Or you stayed in your parents home to my parents home, they bought an acreage outside the city, I rented it out, my dad wanted to keep it and rent it. My mom’s like, now I want nothing to do with this wasn’t comfortable with it. And so once I was done using it for schooling, they sold it. And that would been in 20, mid to late 2000s. And then I intentionally got into real estate, you know what the cause was becoming apparent. My wife and I were pregnant. We had just got married, and I realised I had to not live six months in advance and plan only six months in the future, like holy cow or use more provocative words. I have another life that depends on me. And it was a complete paradigm and mind shift. And so I needed to start figuring out this, this nest egg and wanting to have a, you know, stable and secure future for my kids. So I took calles had blog, it was kind of three, Rich Dad, Poor Dad read that book. At that same time. My mom had just joined ki Speier and took me to a buyers event in Toronto, I had no idea what’s going on. It seems super cool. In hindsight 2020, looking back, it was very salesy, and a lot of value but it was the exposure to this community of people trying to better themselves and the like minded individuals that I really fit off of. And then the third thing was I discovered this podcast called tales from the trenches by a gentleman named Barry McGuire, who’s a very well known real estate lawyer up in Edmonton. In fact, just to get this guy credibility he’s been I hacked in are a full time lawyer in real estate longer than I’ve been alive. I think he’s that I do the math now. He’s got been it’s been 45 years of full time real estate, not including the education, everything else to get there. So and he really loves teaching and he’s very good at the creative side of the business, which is learned a lot just listen to his podcast. So then so we bought our primary house, which is where so currently today, and now we talked off the air talking about how there’s this expectation and training that people can buy, they they say, Hey, you can buy this will train you how to invest in real estate, you can quit your day job tomorrow and just go full time. And so I bought this house thinking it’d be a stepping stone I’d be out in two to three years and I renewed my five year is my first five year renewal on the mortgage. That would have been in 2020 21 and we’re still here right now. And you know, it’s just food for thought on that mark. But I bought this house in 2016 we legalised the He’s been sweet as a mortgage helper for the first three to four years. And then we took it over, because we needed more space with our second kid. And we had gotten a little bit stronger position. And then my wife also realised she likes to work as well. We’re both like that we both tried doing this at home parenting, which is a was very challenging. And we found it’s okay to be happy with what does work and boys, I’m rambling, I’m gonna wrap this up on my thought here. And then 2017 is when I joined rain. And I had found another, I had found a couple of buddies, we started a monthly meet up to because I wanted more of what rain was offering with those monthly member meet up meetings, and they had the presentations and I just, I knew when I got into this business, I knew nothing. I wanted to be around people and rub shoulders and learn from the more experienced individuals I had the scars and the lessons learned I had made the mistakes and I wanted to absorb that. And I did a bunch of online training how to screen tests, because I knew right away if I could figure out screen tests, the rest of the business can be easy and learn on I can learn that on my own. But I was super nervous about that part because it scared me so much to have a tan destroy a house or go into default to mortgages and be financially ruined. Like that was my biggest fear. And it still is something that even to this day, where I would definitely more well off financially, I need not to worry as much and it’s something I’m trying to work on. And finances has always been a big big sticking point for me that I try not to focus on negativity speaking negatively.

 

Erwin  

Click comment on the on the worry part, I find my experience. They worry investors are like stable investors. They don’t go big. They don’t get big. Like some of the ambitious folks like our people know my guests. Let my listeners know like, you know who I’m talking about on my shows someone like the big thinkers, receive highly confident people. But then some of these people too big do that. So let’s competent, you’ll go too fast, and they will crash and burn and declare bankruptcy and they’re living in their parents basement.

 

MacKenzie  

I’ve been around long enough. I’ve seen those stories.

 

Erwin  

They were not worried investor. So it’s not the worst thing. Maybe you’re worried investor.

 

MacKenzie  

Yeah, but you don’t want to control you a bit. I mean, so I’ve gotten a lot better. And so then a big thing to like 2016 and once I had my kids, I realised I wanted to just generally be better be more productive. So I started a big and I’m selling it right now. I’m very big on self improvement, self development, wherever you want to call it. Reading books, you know who not hell by Dan Sullivan. We’re talking about off air, one of my favourite books, and doing masterminds now I attended more than one one. And then so weird journey. I always thought I was gonna own a bunch of doors 10 or 20s single family detached homes fully paid off. I thought that was kind of like my end goal. Right? Well, it was my end goal I got into real estate.

 

Erwin  

Sorry, sorry. My kids just pause you there. When you sit you mentioned 2017 is a key year how many properties around that time did you have

 

MacKenzie  

so if we measure them by door, I had my primary one and then I picked up on my second and third properties that I bought that are all now legally Sweden. So I got the six doors right next door. So three properties all duplexes for first six doors. Yeah, are bungalows with the legal basement suite are two of them. Fabulous.

 

Erwin  

It didn’t Calgary offer some subsidy around basement apartments.

 

MacKenzie  

So folks, folks always listening to this, there’s still golden opportunity mind just supplies is super low right now. And even in the entry level segment, there’s multi bids going on. But a golden opportunity is

 

Erwin  

sort of traffic. As you’re saying today. There’s still multiple offers.

 

MacKenzie  

Yeah, we have that. So this is really weird, like, so I’m not really when it actually makes a lot of sense. We look at the macro numbers. But I was just talking to a couple of my realtor friends that I always like to get what’s going on. She’s like, anything entry level now to get into the market with qualification and a lot of stuff is a five to $600,000 house here in Calgary. I’m sure there’s could be some cheaper ones. But generally, that’s entry level now and Calgary. And she said everything’s got multiple offers, but you go to like that second upgrade kind of mid tier house, not to the high end. And like just crickets nothing going on. It’s like that 700,000 price point. So yeah, it’s just interesting to see on the market. So that’s one reason why I’ve always loved single families is because not only a single family, there are entry level products that I own. The exit strategy is really clean. And really I should build a seller’s property and cash out within 30 days if it’s priced appropriately, should move right no problem. And the fact that I have a mortgage helper in the basement helped me that I have even a bigger selection of folks, our customers too, that could qualify and buy my property. So I like that. But I don’t have to

 

Erwin  

finance a higher amount because you have more income In the house, whoever’s qualifying for the mortgage automatically has more income from the rent.

 

MacKenzie  

Yeah, it obviously varies by institution exactly what that number is. But you have a bit more, I think.

 

Erwin  

I haven’t heard of a financial institution who won’t count that rent

 

MacKenzie  

might not give you 100% of it. Like it depends, right? Like some some say it has to be they only count 80%. Because they take the other 20% covers, like taxes and utilities and insurance and stuff. That’s very expensive. Yeah, you typically don’t get 100%. But you add, I mean, that’s huge, right? For a lot of people. And so I like that. And that’s always been my primary investment strategy. So I haven’t gone into small multifamily or anything like that, because the exit strategy is much more complex, a little bit much longer, much easier to very, you need an investor type buyer, which is just generally a smaller demographic, especially compared to mainstream

 

Erwin  

McKenzie, you’re not going to be able to sell a 60 course on this way you invest. I mean, you need some we need to talk some big numbers and 200 doors, you know, Alberta. That’s, that’s what it’s funny. It’s when people are talking about Ontario. Code Alberta, by 200. Doors, this one building?

 

MacKenzie  

Yeah, yeah. So I got in

 

Erwin  

Sorry, I just pause, just pause you for a moment when she’s mentioned about the entry level being on fire. And the level the tear above for housing being slower, and a need gets even slower, the higher up you go. And we see the same thing here in Ontario, which is why I actually tell my clients, you know, if you’re looking to trade up, now’s the time to do it. Right? Yeah, like your home, either rented, or sell your entry level home, and then trade up into something that you probably get some value out of. Right, you’re gonna get some value when you’re buying now versus if you’re gonna try to buy once interest rates start getting cut. Right?

 

MacKenzie  

Absolutely. And I’d say a contributor to that. Is these interest rates, right? Yeah, absolutely.

 

Erwin  

Cool. And that includes condos here, like here in Ontario condos. Didn’t not all of them are going up, but there haven’t fallen nearly as much as like a $2 million detached home prices are really different

 

MacKenzie  

here. Yeah, yeah. That’s super interesting. Okay. Prices are crazy.

 

Erwin  

Like, you know, a million dollar house in Calgary is probably over two here.

 

MacKenzie  

It doesn’t even compare. You guys are crazy. Crazy. Not that some time to spin over and turtle with with being single key. And you can come to your guys’s conferences and hear how you guys talk number like it’s different. I just then I mean, like, I know, we’ve talked about this a few times that we’ve met up talking about the macro economics at play. And I always attribute legislation that governs the RTA and Residential Tenancy Act across the different provinces is it’s like a it’s either an accelerator or restrictor, right? If it’s not, and legislation has to be, really, ideally, it has to be well balanced, that benefits both parties equally, to want to participate in that transaction. And I’m talking homeowners rent and to renters. And if legislation favours one side or the other, less people participate in that transaction, therefore, there’s less supply available and actually affects everyone overall, negatively. So I look at Calgary or Alberta. And it’s like, we’re good. It’s very well balanced. So I would attribute to be like having a really big straw and slurping on the Slurpee, it’s easy. You can just pull through it, it just goes whereas your legislations like taking a brown little coffee straw for mixing coffee, and trying to drink a milkshake or Slurpee or something you’re not going to get like it’s just it’s very restrictive. So then overall, you have this massively unbalanced market. I would love to really do to commence or commission on an official proper survey, that that’s typically correct to actually get an accurate picture of how many people no longer participate over the last 15 years or however long you guys had the time. Time. Yes. Like, I think it’s so understated that there’s a huge supply sitting on the line. So everyone like oh, we need to add more supply need to build more. And that’s true, we definitely need more supply across all the promises. But it’s not only building more is participation supply, probably willing to participate in the market that people have. And if they had better balanced legislation, more people would be in there. And generally, when we talk about small mom and pop landlords, the type of products we own ours, you know, single family basement suites, perhaps even renting out rooms really fit the mode of affordable housing, that’s the type of housing that actually has the lowest price point. And because I don’t operate at scales of economy, I’m always very price sensitive and competitive compared to a boardwalk or whatever big multifamily company down out east you guys have. They sit on 100 vacant properties. They’re going to demand an extra two to 300 bucks a month because they can’t they have the the operating down. What do I know if I take one or two months vacancy? I might as well have already dropped it two to 300 bucks and had it rented from day one by the nature of how we operate. We have to be competitive. So The major supplier of affordable housing and that definition is I hate using that word because it’s, it means so many different things to so many different people. Really, Mom and Pop landlords are the biggest player of the closest thing to affordable housing, that’s the better way to put it. And there was a CH MC,

 

Erwin  

or the society’s whose benefits most from Mom and Pop supplier of housing

 

MacKenzie  

100%. And there, there are a tonne of studies from the Canadian housing and mortgage corporation. So the one about the price difference between small and big landlords, they estimated and I think this is actually a very conservative number, I’m confident it’s higher than in reality, the estimate is like a 12% difference. And I’m sure it’s like 15% or more, because I can just anecdotally speaking from my experience, what I was charging for similar units, and to what they are. So that’s one thing, and I almost had another point I want to go with, oh, and then the market share when we look at the actual supplies in the rental stock. I know we talked about so you’re gonna probably know the answer. But I’m gonna ask you and always it’s your podcast, or what do you think when you look at our whole available rental housing stock, the percentage of market share that small mom and pop owners have versus any large multifamily players?

 

Erwin  

I’ve seen the stat a couple times, it’s actually a lot higher than I think most people think at least what caught me off guard how big it was, I don’t know 60 70%.

 

MacKenzie  

Your bank? It varies by province. But that’s 65% and 70% is what I’ve seen. And there’s not really an official study that captures it well, because when you look at the substance, the Canadian mortgage housing Corporation’s numbers, they identify Mom and Pop owners as secondary supply. And because it’s not easy to aggregate or survey or get a good feel on those numbers, they don’t include it in their studies, which is like, hey, so if the entire markets 100%. And we can only really survey efficiently the multifamily players, we’re going to call that the whole market.

 

Erwin  

And really like just when they do CMHC, the property managers of the largest apartment buildings not on pop, right. It’s easy, the large aggregator of data, not you and I

 

MacKenzie  

know know exactly. So the average landlord, I’d say across Canada, from what we’ve seen been at silky, owns around two and a half doors. Seems she just came with another Oracle knows that can I just did a rest of the least kind of trying to quantify as to they say most people only own two properties, the primary and one of the property. So

 

Erwin  

sorry, he said again, CMHC saying there’s the average how many of you

 

MacKenzie  

know it was Stats Canada, and they only looked at three provinces Ontario, BC and I think it was Nova Scotia. They said majority of orders, people who own multiple properties. So multi property owners actually only own two properties. Primary residence plus either a recreational or one rental is typically what it was. And so then we’ve got these legislation, plays and Policy and Public Policy coming out saying hey, you know, for example, I was an NDP townhall in Alberta in as the first one over zoom in October last year. I’ve been September in the fall. And they I heard a lot of really challenging stories that people are going through. And I guess on the side on the sidebar, I will understand believe that everyone should have a roof over their head. I believe that’s right, that you had your basic needs need to be covered food, water, air shelter, 100%. But when people define affordable housing is perhaps, you know, what does that really mean? And so does that mean it’s a 2500 square foot two story house with walk in ensuite bathrooms, you know, propane hookup on the deck with a hot water hot tub? Does that mean it’s only a you know, two bedroom condo? Or maybe it’s a batch or a studio apartment where there’s no bedroom? Or is it a bed down to local shelter with shared amenities like, and we haven’t even gotten to the plateau for the hundreds of 1000s of needs in the healthcare side. And we’re talking about society, which means everyone and just look at how many unique needs there are out there. It’s, um, the word affordable housing is unfortunately used a lot. And like I said before, it means different things to different people. And there’s a bit of an expectation that affordable housing should probably be, perhaps when these more expensive types of housing, which doesn’t quite work. But I mean, I’m a huge proponent and supporter of making sure everyone’s got a place to sleep at night. Because if you get your basic needs covered, then you can really excel through, you know, Maslow’s pyramid of needs, where it’s got physiological at the base layer, and then as you get up, you can do more you can get more intellectual and contribute back to society. Everyone needs that basically are covered and I believe that that’s everyone’s right to have that. The challenge is is now where do we draw the line? Can we draw the line but I listened to a really interesting podcast. It’s called The Future of it’s run by ATB financial, which is the Crown Corporation in Alberta. Credit Union. I don’t know if it’s still crown, I think stolen by the government. Anyways, Todd hearse is one of them. Is it their senior columnist? Okay, good. You know his To host and it was my number. And he had an awesome guest on and I’m forgetting, I think his first name was Richard, I can’t remember his last name. But Richard ran the this foundation, the end homelessness, and he started Alberta, but now he’s doing Canada wide. And they talked about the story where in Manhattan technically ended homelessness. And he define homelessness as less than three people living on the street for over a period of I think it’s like two weeks or a week, don’t quote me on the exact definition, but something like that. And what they did, they had treated almost this like it was a natural disaster that had a they had a pop up emergency kind of control centre. And what they were doing was they were trying to get as close to real time data points on every individual living on the street, their unique mental and health care. And if they had any unique needs, which unfortunately, people that fall into that segment typically have, you know, special or pre existing health conditions and mental challenges that require additional care and support requirements. And so what they are doing is by aggregating in near real time, many data points on individuals that are in homelessness, they’re starting to see trends that they could craft solutions to find ways to get these people off the street permanently. And they said, and this totally makes sense. And I have to say, Great, there’s someone that is living homelessness that bought dances, with the police and with hospitals, costs the taxpayers more than money and resources they tie up, then paying 30,000 Like it was in the hundreds and hundreds of 1000s.

 

Erwin  

So putting these people in the hospital, then really expensive. Yeah, so it’s

 

MacKenzie  

funny in a permanent solution with government money for these high needy individuals that have complex health and mental challenges, give them a better quality life. And they actually end up causing costing the taxpayers a whole lot less. But he said, Richard said that they you know, part of the strategy is you have to have data in near real time. And you need enough of it to paint a really good picture of this person’s needs to architect that solution that they need, because everyone, there’s just so many unique needs and housing needs that come up accordingly with it. So and I guess the one thing to take away, he’s like, Well, and the other thing, too, it shouldn’t be on the private individual to, to wear this burden. And I would have to say I agree with that, because my sister’s a nurse, and I see what she’s taken to learn all that and, and she’s a general LPN, let alone an RN, or someone that specialises in the 10s of 1000s of unique healthcare needs out there. You can’t expect an individual to provide that kind of care in a private rental residence. But society is kind of pushing that way. And some of the public policy is more forgiving, unfortunately, than actually doing good in the end. Whether or not they’re sorry, I got off my soapbox, you’d let me get on top of that one. And it’s a I get going and rant a bit. Yeah. And the story

 

Erwin  

is new to me. I googled it if I’m on CBC, and most people hate the CBC, but at least report. At least they report the news on this article. But yeah, I can’t wait to dig into it.

 

MacKenzie  

Yeah, dig into it, unfortunately. So that was in the summer. Last year, they solved it. And then I heard another article came out in the fall saying that

 

Erwin  

was October dated October 3, this article, they

 

MacKenzie  

now have a homeless problem again, but I mean, the fact that it’s so minimal for a decent sized Canadian city, they’re doing something right. So super cool stuff.

 

Erwin  

It looks like it got higher after anything I’ll dig into anyways. Yeah, fascinating, fascinating subject. If this applies to real estate investing before the ignorant Ontarian Can you explain to me we’re friends, Mackenzie, I can’t fly to Calgary. I say hey, Mackenzie, I want to buy myself a property. What what what should I get into?

 

MacKenzie  

Well, it depends like, what’s your needs? Like? What’s your risk tolerance? What’s your duration of hold period? And yeah, okay.

 

Erwin  

This for me by for 10 years. Okay. Sure. Like if revisions do not scare me at all, I should prefer to renovate.

 

MacKenzie  

Okay. Well, right now in Calgary. Speaking of times, we’re speaking early 2023 In January, to the end of this year, and I forget exactly what it is the city of Calgary extended their programme to Godfather or give you NSC to get a legal suite built up to there’s two standards one’s a lot less in terms of cost and really what you need there’s the building code and fire code, I always get them mixed up. But right now instead of going to the more stringent standard, they will grant God farther you and allow you to qualify at the lower standard which will save you a tonne of money. So the big takeaways are if you don’t have to put a secondary heat source in which if your drywall and ran ductwork and put a second first and that’s already 10s of 1000s of dollars that’s

 

Erwin  

your standard code is secondary furnace. So you so if you’re doing a full two code duplex as yet you have to have two furnaces.

 

MacKenzie  

Yep, separate heat. sources for each rental fully self contained. Interconnected smoke alarms proper size egress windows for fire fire fire to enter the property with a Scotty air pack on their back. And there’s a few other things too and then parking requirements and so on so forth but, but right now it’s

 

Erwin  

okay, so for a permitted legal basement apartment suite I need how much parking

 

MacKenzie  

do I need in Calgary? Typically, it’s I haven’t looked at this over two years. It’s I think it’s to two spots upstairs. And an additional spot downstairs.

 

Erwin  

Totally hanging.

 

MacKenzie  

Yeah, I have to be on the lot itself. Now. I think that’s relaxed a bit because that’s when I first started because now they added into the fold last year as well. So here’s another diamond in the rough semi detached dwellings can now get their suites legalised

 

Erwin  

nice nice and Hamilton this did away with all parking and parking here.

 

MacKenzie  

Oh, man, that’s way better. Yeah,

 

Erwin  

that’s that’s good. We have one winner.

 

MacKenzie  

Yeah, there you go. I think it’s far less too but yeah, that’s kind of our sad

 

Erwin  

two furnaces. Do you need to cooling sir sources?

 

MacKenzie  

Well, AC is optional, right? I mean, no, you don’t need to cooling but it has to have proper ventilation. So if you do baseboard heats, then you need a HRV or air air recovery ventilation unit or whatever it is. Here really, yeah. So if you’re doing net new this is what you get, including the bill your built your that’s a lot of money to put in to put on the RV. That’s why there’s a great opportunity right now if you can buy the right property, it has good bones, you know if if it’s got the right size of Windows, if you’ve got the power panel and a common area, and a common access area, instead of sitting in the bedroom in the basement suite, you can access ideally, you can access the utility room without going in the basement suite. You can find good layouts like that and the way they qualify and I forget the exact copy I want to say it’s like March 2017 or 2018 Wherever the cut off the end. Can you go to city calgary.ca final the exact information

 

Erwin  

we are not fire inspectors nor building Jordans. Please go Calgary, Calgary. exact details.

 

MacKenzie  

Yeah. But we’re trying to catch up to Edmonton Edmonton has been ahead of us on the legal suite page, or move in either decade at this and in terms of their like bylaws. And they did blanketed secondary suites across the whole city, long as you just met these minimum requirements, parking, needs, sources, whatever, you can do it all. And it’s awesome. So we’re trying to get there to

 

Erwin  

get started because it just surprise you. They’re at a friend of mine who lives in Hamilton invest in Edmonton. He actually mentioned to me it took him about five months to rent out his basement in Edmonton. So that’s a massive win for So Ashley started to give context. I believe he rented for well under $1,000 for a brand new two bedroom, basement apartment just outside the city of Edmonton. My point being is what you’re saying like it’s Edmonton has done a great job with their basement apartment bylaws and zoning enforcement all sorts of things. Yeah. Which is wonderful for the tenants, not so great first landlords.

 

MacKenzie  

So let me give you context on that. And that’s I’ve talked about this, and this is going back to legislation and rent controls and all that stuff. So you’re across Canada, it’s by province, that legislation that governments or industry, in Alberta with the most balanced jurisdiction, we don’t have any rent controls in the sense that you can’t raise rent more, more than once every 365 days. But you can raise it to wherever you want. Now, I’ll set up the caveat, if you do a very predatory rent increase, and you go into the RTR TDRS, which is our lower form of tribunal for mediation, or you go to the courts, they’ll throw that out, like if you go call 1000 bucks, just arbitrarily speaking, you double to 2000 or 1800. And you’re well above market rates, they’re gonna, they’re gonna throw that out. But I mean, within reason, whatever current market rates are for your

 

Erwin  

product, doesn’t they’re gonna say you can’t do that. Yes.

 

MacKenzie  

So So yes, on the legislation on paper, we you can raise rent to technically anything you want. In reality, it’s got to be within reason with what the current market rates are, which 99% of people that’s fine. But there’s I’ve seen cases that read the results of of hearings where they’ve thrown that kind of stuff out. And so I mean, so we’re, I wanted to paint this picture is, you see rent controls in Ontario and BC, where I’m sure you’ve had these conversations, lots on how they actually artificially push, push rents up because it part of the problem too, with rent controls is is also in both BC and in your guys’s province in Ontario, when a tenant moves in, they don’t have to move on until they actually have to, they want to move out. Were in Alberta, each party if it’s a fixed term, it is a fixed term, meaning that when that term is over, that lease is done, they have to move out. And I think that’s a huge kind of component to it. But let me get back to the story. So we got well balanced legislation. And then I looked at the rents last year, and I saw this was super interesting. And this is my kind of my prediction or my reading. And what I’m seeing is rents went up across the country everywhere because of inflation, right? We’re dealing with inflationary period that we’re in all the trends without Between two major cities of all the major cities in Canada, you know, only one city was substantially lower than everybody else. Now, why would that be? And I’ll give you one guess it’s an Alberta and it’s either Edmonton or Calgary, which do you think has lower rents?

 

Erwin  

Edmonton actually had really low rents as well for free period of time? No.

 

MacKenzie  

Yeah, no, but so when our rents went up last year and started Edmonton, I’d say I’m to basically stay at at the rate of inflation. That’s what they increased by. We almost doubled them for where our average rates rent rates were. And the reason why is a restriction on supply. Edmonton had their that are getting their decade ahead. They had their blanketed wide legal secondary suite, and they had a more affordable housing. So really, the supply has always been very well bounced in that city. And it hasn’t risen sharply. It has here in Calgary, where we’re having a challenge meeting supply needs. So what I wanted to highlight there, though, is because we had the best legislation in the country on a provincial standard, that allows more people wanting to participate in take, participate in that transaction, we got more people coming in to supply the market, as demand was going up to need it, which is great. That’s what you want to get to keep prints competitive. And then you’ve got the next restriction that’s gonna go going on for the provincial level is access and zoning hot, where can I build supply? How easy can I build supply and hands down Edmonton is Wall Pass Calgary for that, what they’ve done with their bylaws, and zoning and secondary suites and all that. So they’ve had a huge amount of supply, they have knowing that supply, a lot of that supply is very entry level very, again, talking about we talked earlier about affordable housing, the basement suites, all those kinds of things where they’re just typically less desirable that they come in and lower rent. And so I mean, if all things being equal CALGreen, Hampton should had a very similar increase in their rents from an economical perspective. But because of those things we just talked about, they are able to meet their own demands, and their rent said a lot more stable and only increase what inflation was going, where everyone’s experiencing with interest rates, mortgages, increase in insurance and so on and other costs that drive drive rents.

 

Erwin  

That’s good news for buyers and tenants? No, that’s not what I want to hear as a investor, investor owner as an existing investor owner.

 

MacKenzie  

Yeah. But it’s still a good thing because your cost in terms

 

Erwin  

of Edmonton, like from what you’re telling me, I’d rather own an investor, right, as a business operator by product, I want to be in short supply. Just like Apple, right, they’re always sold out of stuff.

 

MacKenzie  

I’d rather just have stable, ongoing slow growing rents, but you know what Don Campbell’s always preached, I’d be okay to empty because then your cost to get into products is also a lot cheaper, a lot cheaper, whereas we have older Bylaw and zoning and building code that you have to adhere to at a lot higher cost point to get in. So it depends. I mean, depends your buying power and what your numbers aren’t. Well, that looks right, right. It’s not it’s

 

Erwin  

not too bad. Yes. Yeah. Different price point. Different budgets.

 

MacKenzie  

Yeah. And you know what, but you look at the growth there. Their appreciation is very modelled very similar to to Calgary. And it really is the major cities in Alberta. And I liked the two major cities in the sense that were more of a balanced market when you compare the roller coasters of a single industry, small city or town in Alberta. So I’m talking about oil driven Grand Prairie, Fort McMurray, things like that, like when they make money and things are booming. They spike it’s a roller coaster up and then just as fast as you go up, you’ll come down. You tie into a major city like Calgary, Edmonton, and we’ve got post secondary agriculture in multiple industries driving the local needs of the housing stock. So if one industry takes a kick in and is going down, you might have a bit of a decrease in supply or rent, but you’re not riding the roller coaster of a single driven industry around or city.

 

Erwin  

Jared hope is a past guest of the show. He shared that you’ve never go outside Edmonton again. You wouldn’t have as an he wouldn’t go to a small town Alberta again, because I think a lot of people got whacked and they have like Fort McMurray, for example. So I want to continue with this Calgary grandfather suite example for listeners benefit at least here in Ontario, there’s so little you have to do if your units grandfathered, for example. My information is outdated. Please go to your fire department and ask for them, ask them how the laws are enforced. But when I attended a presentation from the Hamilton fire inspector, he gave a presentation to realtors. So for we understand fire code from legal nonconforming property, and at the time, it was very simple. We didn’t have to change separation between units. We didn’t do anything like that was grandfathered. The requirements were so little actually no fire escapes that was required. But for duplexes, typically there’s no fire escape. It’s just egress. The big thing really was it was really simple as an ESA natural Safety Authority certificate on your house. That was like the only not even difficult thing I needed to grant for fire code compliance for a Legal non conforming apartment

 

MacKenzie  

typically, with the fire department come by inspect a property give you this ESA

 

Erwin  

lets electricians do it. Okay. That’s again, that’s this presentation was like five years ago. Yeah, all my apartments all my apartments or permits, so I don’t do that I won’t go through that stuff anymore. But like what you’re saying is, yeah, yeah not have to put in an H vac system or an ARV system.

 

MacKenzie  

It’s also to get grandfathered, there has to be pre existing prior to March of, again, I check your numbers as well, I think it’s 2017 or 2018. I can’t remember. And to prove that the way they’re doing them. So here’s some pro tips. You look at expired listings, dimensioned by the law suite or legal suite, you look at their products using the basement suite when they’re the manufacturer dates on pvc piping in the back of drywall, to give you a rough idea of when that suite was built. And if you could find some documentation, that’s how you could qualify for this grandfather programme. And yeah, it’s absolutely huge, because if you’re trying to legalise a basement suite after the fact, it’s pre existing, you’re probably just better off to buy an undeveloped basement suite wherever the undeveloped basement where everything’s open, and start from scratch. Because you’re ripping up drywall, you’re running ductwork, you’re printing a second furnace, and you’re separated from the upstairs ductwork. During your cold air returns. It’s a tonne of money,

 

Erwin  

your architect fees permits vacancy during the construction period. Yeah, this is a great pro tip Mackenzie. Yeah. 100%.

 

MacKenzie  

And I haven’t done it in a while. Yeah, so I mean, that’s the diamond the rough right now and in categories that if you can find some of these properties, and then they added in semi detached only licensee only and it’s drink COVID Or just before COVID Man Time flies. But yeah, so I mean, that’s the other opportunity right now too. So there’s a lot Yeah, well property to get in and do it right. So I mean, the big takeaway is that your properties have to have is proper size, egress windows in every bedroom, and you’re connected smoke detectors. However, you can do that to be hardwired for power. There’s a set out there that works they talk on their own proprietary wireless network that will interconnect between the upstairs and downstairs suite get to have a fire separation between floors. So that can either be done by drywall and proper button taken I think has to be five eighths to protect drywall. Again, check your local bylaws or get to put a fire sprinkler in to the basement in the utility room where you can’t really reasonably separated with drywall because it’s just the you know, the shapes of pipes and all that stuff and it’s a very challenging space to drywall out.

 

Erwin  

So my favourite, it’s much cheaper than having to drywall and also

 

MacKenzie  

messy it’s one afternoons visit for three to four hours I plugged it in and then you get your certificate.

 

Erwin  

So just for just for the listeners benefit if you drywall, then that means anything behind the drywall, you can no longer access as well. So if you need to do any more maintenance repairs, let’s all drywall it off. It’s not good.

 

MacKenzie  

Which is like right up beside the ductwork on your furnace, AC, it’s just not a very good solution. And then

 

Erwin  

it gets more expensive, the versus the sprinkler head 100% It’s probably

 

MacKenzie  

three 3x more expensive. The other takeaway night is you need to have at least three quarter inch water feed off the main some homes in Calgary are only fed by a half inch. So like you hoped. You can’t you can’t build it see why not? That’s a big, expensive kachel is making sure that water line that you tied into is fed by three quarter inch feed.

 

Erwin  

Sorry, and will previous owner affidavit work to prove the unit existed for grandfathering. I wouldn’t see why not. I haven’t tried it personally, the ones I bought had expired listings going back to the early 2000s and 2010s. Just in Ontario, our government usually wants a bit more that was preferred over what was in the listing or versus even what’s what the property is taxed as. Yes. Yeah. And like the way the for the listeners benefit. every jurisdiction is different. So municipal, we’re talking to local level. So like, local enforces, so base offence by

 

MacKenzie  

law. Right. You know, so I mean, coming back to. Exactly. So. Yeah, I mean, yeah, I mean, and like just to kind of like I really want to I want to wrap up this kind of like journey because I think it’s I’ve taken that as you said, every time you talk to an investor, they take something very, very unique. So I pivoted I haven’t bought more properties. I did try to do the fundraising the JV thing I felt that was super challenging and awkward kind of talking about the money, but I’m good at tech and can’t build and process so so I started a company with two other guys we did meetups local meetups monthly, and we’re trying to build education and a bunch of other things. We realised quickly all great individuals, we just had very different ways of executing the business plan and we didn’t agrees we went our separate ways. So after that point, I started a YouTube channel and I think even till today, I’m still the only one had a YouTube channel called find great tenants as the only YouTube channel dedicated to finding intense because I knew how important that was. And this is about the same time I had that conversation with At rain Diamond Award winner, and I found out that I was doing things differently. So one thing led to another, I built a bunch of videos on YouTube, and style called girdle on our community, folks, if you want to look and find on YouTube, that I joined a Facebook group, I shared one of my tip videos, and I got kicked out within like six hours before I woke up, I was out of the group. And that’s actually the group that I run now. So fortunate enough that the gentleman was right at the time. Chris noble saw value I posted, he went and messaged me and we had a phone call I got in the week later. And then two weeks later, I said, Hey, Chris, let’s have a talk show about landlording. Because there’s just so many nuances in the business. And later that yours is 2020. In the summer, he gave me the group again, getting full control. And that was I was completely grateful for that. And then so I did that on the side. And I tried. I built a couple of courses and sold some here and there just only on tenant screening because that’s what I knew very, very well and some other kind of tech related daily operational stuff. And then Okay, on that. Then this summer, I tried launched in a paid membership, and I crashed and burn. I think they got tough skin because people were very, very willing to share their comments generally

 

Erwin  

good and bad. And someone tried to monetize that group.

 

MacKenzie  

Yeah, I tried it. I wanted to provide more value I wanted to so here’s what I have. I tried offering a paid membership, kind of like the rain model, but more just landlording because there’s a tonne of investing groups out there. I mean, you guys have got Welltok are you looking at every every major city or province there’s a dozen investing groups, because investing is cool, it’s sexy. But when you talk about alone, and we’re like the ugly, ugly stepchild, the black sheep in the room where no one wants to talk about landlording

 

Erwin  

operations, that’s someone else’s job. Legionaries here,

 

MacKenzie  

toilets isn’t broken toilets. And tenants complained at two in the morning, I want nothing of that. So. So I focused on that I was like, if I can figure out this and make this pinpoint easier for people to have something figured out. Then so. So we got some sponsors that came in in the Facebook group and actually single view was my first sponsor, I was a huge advocate of them, they get really good, comprehensive reports when when picking that tenant. And I’ve always said, tenant selection, most of your work is done up front, like 90% of it. If you find the right tenant, you do your proper due diligence, check your checks and stuff, and they’re a good fit, then the rest of the that 10 seat until they move out is generally really smooth sailing, other than just keeping maintenance and repairs up on the property. But man, if you pick that wrong person, and you got that perfect property, beside the GO train, downtown Toronto, whatever, it could add everything you need to really easily read up, if you put the tenant in, it doesn’t pay, you’re still making $0 a month, you’re losing money, you’re going through stress, and you’re probably not gonna stick around this game, because it’s a very uncomfortable, stressful ride to fix those kind of problems. So it’s absolutely critical to get the right tenant in the beginning.

 

Erwin  

So then the follow on question is, you’re a big fan of single key. And then how did you join single key?

 

MacKenzie  

Yeah, so I have been trying to provide provide additional value with the space

 

Erwin  

that we should probably explain what single key does get. And it might even help you tell me again, that you’re in person from from looking outside looking in. So for example, a lot of my community is familiar with neighbourly right? And now, are you wondering the same.

 

MacKenzie  

There’s so much that happened last year, we acquired neighbourly in the fall. So neighbourly is single key.

 

Erwin  

Name going forward. A single key, though, is single,

 

MacKenzie  

we combined it into a single key brand. So I think our competitive firms our claim to fame that really helped me as an as an investor was, we have an online application that is tenant driven, meaning they fill out all the information, because previously to do a proper credit check to get all the information you need to make an informed decision. And I can talk about how to read a credit report because there’s a lots of mistakes and, and myths and assumptions that I want to be clear on that that that’s, that’s an entire conversation on its own. But the silky gave the ability for tense to fill in that information, because previously for use on LinkedIn verification services, or some of these other places, you’d have to go and punch all the information in. And then you basically pay 20 or $30 for the click. And hopefully, you’ll make a typo, or you’re trying to read the print. I mean, at this time, I was still still doing paper applications and reading people’s printing. And I would blow 25 bucks on a click because but he didn’t spell his name right or change his birthdate or whatever. But now they have to input their information online. It’s clean, you got a very comprehensive PDF. And the difference to that the credit portion of our report is on the typical person’s like five to seven pages. And you see all their financial history that trade lines and this is a were, you know, the credit score itself is great as a starting point is a quick kind of test. But it’s only an instant snapshot in time, it does not give you an idea of how they’ve been a stewardship of their finances. So if you’ve got something that’s gone through a major life event, like a divorce or a job loss, and their credit score is not the best, or it’s questionable, you’ll see that when you look through the financial history, because you’ll see a bunch of missed payments and the 3069 day buckets, laid buckets, any narrower or negative within like a three to six month timeframe. But if you see someone that’s got genuinely late payments across the board, like a checkerboard pattern from day one to now or five years, they’re just generally not very good at managing their finances. That’s the people you want to stay with. But you get someone that’s got a lower credit score, but have been very good up to a certain point in the life. And there’s a very valid reason with a good job loss for divorce. And that explains why they’ve had a rough patch. But previously before that didn’t good. That’s a great person to get into your rental property, they’ll probably be very thankful and have even a long term tenant because you’ve given the chance. So that’s why you can’t just take a credit score on the face value.

 

Erwin  

That’s a mouthful.

 

MacKenzie  

It was I do talk a lot. Let’s give you a breath here.

 

Erwin  

Yeah. Appreciate this service as well. I find especially the younger generation is completely open to this. Yeah, yeah. Which is actually probably a screening thing.

 

MacKenzie  

There’s always a bit of a demographic out there that think credit checks are too invasive to rental property. Yeah, I want to rent to them. That’s fine and to use their own but we’re renting out six figure assets as collateral just like a bank does a personal line of credit, as a car dealership, or lease or sell your brand new car, we now are ya fitting $1 cell phone with the $200 plan a month or not even 100 on plan on Monday to Live plan, check checks. So we basically have given the mom and pop landlord the same tools of the trade, that other institutions that lend out high value assets used to qualify individuals, and rightfully so. And newer tenants actually, like a younger demographic of the people that have no problem isn’t simply appreciate because I as an individual don’t get or receive the sin number of the tenant, it’s all managed to the same grade security that online banks use to manage your online banking, we do the same thing at seal key to protect that personal information. So it’s actually treats the tenants a lot better, you’re not given a lot of your company information directly to the landlord. Now granted, we still we still see a lot of that, but things like the cin number aren’t shared with us. But you can still get the information across the qualify for the rental. So it’s a it’s a very smooth platform. It’s online, it takes like 10 minutes to fill out an application. And we’re bringing in and now we’ve got rent collection. So it’s pre authorised debit the same way you’d pay your utility bill have a checking account, we can collect rent for free up to three transactions a month. So if you’ve got three leases, do it for free through us. You don’t have to follow up with forgetful tax. free. It’s free right now. Yeah, it’s kind of like a lawsuit. It’s a way to get in and use our ecosystem. And then something I wish we had back in the day when I first started is a rent guarantee, which is it’s kind of like insurance, but essentially, as it sounds will guarantee your rent up to the first fall months or $60,000, whichever comes first, we’ll cover about $10,000 in tenant damage and vandalism. And should worst case be that you need to evict this individual have to go down that path will cover up to $1,500 in legal fees typically covers most evictions. And that same thing, and that’s yeah, I mean, this is my sales pitch guy. So what will stop the sales part from here but, and that’s either depending if you pay monthly or you pay annually, the premium, it’s either four and a half or 5% of the gross rent. But you know, I think it’s a really good product. If you’re brand new, you want to sleep at night and not be stressful and stay in this game for a long time. It’s a great must have product or if you are in a more higher risk jurisdiction like the BCS and the Ontario’s where there’s rent controls and the eviction time is crazy, like half a year or more. And if you sue me you don’t make any mistakes on all your paperwork and you execute perfectly on the eviction process. If you make any mistake, you just doubled from eight months to 16 months which I don’t know I don’t know how someone survives loan to mortgages, insurance everything utility bills and have tried to evict someone that in that kind of timeframe is just it’s not fair to anyone it’s not fair to the landlord and certainly not fair to the tents that they’re living in in a subpar unhealthy not to, you know, the provincial health regulations or property they have an unresponsive landlord it affects both parties negatively.

 

Erwin  

So it deserves highlighting rental guarantee covers 10k of damages 12 months of rent $1,500 for legal fees

 

MacKenzie  

or legal yet legal eviction costs and conviction costs. Yeah, the rent coverage is 60,000 or 12 months, whichever comes first. Yeah,

 

Erwin  

we’re selling I believe we have a discount for my clients, my clients. So apologies listeners, but McKenzie was tough negotiator. They will only offer a discount to my clients.

 

MacKenzie  

Yeah. And you’re one of our exclusive providers. So talk to her and he’s got a little bit different taken those numbers for you. I’ll let him do his marketing on that side. But he’s got a a discount offered on what we just talked about. So yes, for the

 

Erwin  

listeners benefit realtor definition customer is everyone basically, I talked to client is someone who’s actually signed a contract or agreement with me. It’s very clear line drawn the same who my client is. So another benefit of being my client. Okay, I’ll stop selling.

 

MacKenzie  

No, that’s good. Yeah. So like, I love how you asked. I mean, I mean, I’ve been trying to wrap up my entire podcast or my venture. But so then I tried this year, 2022 was a big year, I quit my tails job of nine years in a row, the focus on trying to offer a premium to your membership, and still maintain the free thing. And I was also trying to move the Facebook group off Facebook, because I’m on Facebook’s territory, it’s their thing. And I know at some point, it will change and I will lose access to the 4000 plus members that we’ve built up today. That’s one another reason to get off it. But anyways, I had my mistake here was when I tried launched it in July, I had offered I had simplified it, I only offered a premium membership for the intentional investor, the landlord, which was a minority, I call him like 35% of my of my membership is people like you, me that want to be in this game. Want to get multiple properties intentionally chosen to pick real estate as a, an investment vehicle. But I didn’t Oh, sorry, what

 

Erwin  

was the other what was the other 65% It’s an

 

MacKenzie  

accidental landlords, you know, life and circumstances are forced to rent out a property and they don’t even want to be there. They just they just need to know enough. They don’t make any major mistake, cost them a $10,000 eviction or more. And they just need to know what they need to know, to operate without spending more time. And they’re the majority of our group. So like the one off investor, yeah, the one off or, I mean, yeah, one door or they don’t like again, accidentally don’t even want to be there. I guess there’s two sub demographics. But so I launched the programme, I only had a premium tier and a premium offering. But then I made the mistake of telling people I want to move off Facebook and force that hand, and it blew up because that wasn’t serving the majority of the people’s needs. I only had the one property and I got a link in that I tell you so we kind of put a pause on that. And then at the same time about take away my free stuff. And then I came on board with TELUS are still key. A month later, I actually talked to a number of my sponsors in January, I said, Hey, like if I was to leave TELUS, would you guys hire me? And I had got favourable responses from from all of them. So I was like, Okay, it’s amazing. Yeah, it was it gave me the confidence to quit the job security of my day job that I had worked with really good people, but I hated the actual, like my daily responsibility. I just, you know, accounting, the clock kind of thing. And so did that. And so I tried to do my own entrepreneurial thing kind of crashed and burned, took some lessons away. I’m still working on making a 10 inch screen course, I’m coming back again, it’s take a little bit longer because I want to do it right. But again, I also have the issue of perfection over action. I’m trying to correct that as well. So that now we’re here. And then the other thing too is I got hit up in the media with the Edmonton journal in June in July, as well across a couple of articles, I would say, unfairly portraying the story that these Facebook groups were affecting people’s ability to rent homes by a Korean do not rent to lists and unfairly targeting individuals. I can speak to that to a whole nother segment. But yeah, anyways, we had made the decision years before I came on in 2020, not to maintain, I do not rent to this because there was no proper checks and balances in place for other people to get off these lists. But when I

 

Erwin  

Google reviews, Facebook reviews, there’s tonnes of checks and balances.

 

MacKenzie  

Right, right.

 

Erwin  

Listener that’s complete sarcasm.

 

MacKenzie  

Yes. Well in like, just to provide I’m gonna provide a little bit more context was so we had we had at that point in time in 2020. I think we had around 2000 members. And there’s a great database online called the Canadian rental housing index, I think it’s called I can I’ll share the link with with Ervin so you can put in the show notes after but it tells you that, you know, it tells you how many renting households are in each province. And at that time, there’s about 420,000 rental units in the house. This could be you know, one two bedrooms, one bedroom suites, two bedroom suites, a full house, a basement suite whenever main floor is just called renting households. Now, going back to our numbers, right we’re talking about earlier is roughly 67% of all the rental stocks hold like private monopod landlords. So if I take 420,000, I’m going to do this exercise because the big point here weren’t 20,000. I divide it or I only take 65% of that, because that’s to say that’s how much is because mom will probably take out the big multifamily players, that drops down to 273,000 rental units in Alberta. Now, on top of that, I know the average landlord in farms I’ve seen owns about two and a half doors, but divide that by two and a half doors. That’s 109,000, approximately landlords, private, individual landlords in Alberta, and I had less than 2000 landlords on my page. And I was being roasted in the media saying that I was taken away people’s ability to get affordable housing because they had been unfairly blacklisted. And we weren’t even doing that. So it’s actually to be truthful, up to 2020, we did have a list. And then on it came in, I had talked and I was bringing on sponsorship, I had some great conversation with some industry players, talk to some lawyers, and they highlighted the fallacies that the article talks about where there’s no checks and balances. And we totally agree with that. So we stopped doing that in 2020. But then in 2022, in June, July, I got put into this news article, like we were still doing it as of last week. And what this report found, she got into my Facebook group undetected for about a month. And some posts, there was a tag that you could click on to filter posts about people warning other landlords about really challenging tenants. And by the way, these are generally the worst of the worst, the bad apples of the group. Now, granted, it could be a couple of people that got caught in this list. I don’t know. Because again, there was no checks and balances. But we stopped maintain that list. But she said because I had this this filter that I wasn’t even where it was still there. That was allowing people to filter a list of posts in Facebook, she called that a list. And so she said that we’re still doing it. So we deleted her family once we realise we still had it. But yeah, she wouldn’t talk to us and I offered a hop on a recorded call like this, you can ask me anything. But it has to be recorded. Because I’m I want context because it’s so important to have context around quotes to not have been taken out of context. Anyways, yeah. So I learned a lot in that kind of brush with with mainstream media. And it just now like I always knew, like, you look at a story there’s, there’s always context missing to it. I knew that I’ve always not. But now, I probably really greatly underestimated how often that happens. So

 

Erwin  

pieces often are just taken out of context. Yeah. You said this back in 2004. You’re, you’re racist. We need to cancel you. Yeah. So anyway, lyrics, you’re obviously a racist.

 

MacKenzie  

I think we may had read a 400 people on the old list that got thrown out when I took over in 2020. And in a ways if, if I’m 2000 members, and there’s 109,000, landlords in Alberta have an average tune outdoors. We were not impacted the majority of society’s ability to get rentals not even close. Close.

 

Erwin  

Yeah, but the media wants know me. Yeah. Generate hate and trigger.

 

MacKenzie  

Yeah, no, it was good. It was a good way to. And I’ve always approached this too, like when we have conversations in the private Facebook group, or I do these conversations or the shop talks. I always spoke with the context of mine, that everyone these words spoken, we become public one day, or always will be public. So I want to speak in the same way that I would, in a private say into it was selling the same way if it’s really starting to media. So I think you got to approach it that way too. Because the relationship between tenants and landlords is mutually beneficial, I get we need. tenants and tenants need good quality landlords, they want a great place to call home, we need someone who’s willing to pay the rent to cover the cost to do this business of investment rentals. And the vast majority, I’d say 95% Are folks exactly like that? It will say 90%. The other 5% are folks that want to be like that, but they’re in financial trouble and they’re having trouble getting rentals. And then that last 5% are the bad apples that are the ones that cause the problems for everybody else that has these eight months waits at the LTV and on that same a core to a lesson learn. I read or I probably spent unhealthy amount of hours that following weeks when I got into the media, reading every form every Facebook group had posted that article I read every comment, just I wanted to get a sense and what I learned out of that was the majority of landlords and tenants were all in favour of a do not rent to list. They said if people are sticking it or being predatory and they’re attacking tenants or landlords and they’re bad, let’s ban them from the industry and kick them out or whatever. And it was that was the general consensus. I got a couple couple 1000 comments and I thought that was really interesting that and I think I totally actually kind of agree with that statement. To really solve this problem. We need to get rid of the slumlords and I use that word very sparingly and the professional tenants do They’re both damaging livelihoods. Either you ruin someone financially that took a decade or longer or century to build up a nest egg to retire on. And that can get destroyed overnight by by burning down a property or whatever right by completely ruining a rental property. And by the same accord tents deserve a great quality places to live. And there’s, there’s unfortunately, bad apples and there’s bad apples everywhere. And I’ve never not said that. There’s landlords that don’t are slum Lords that don’t provide all the necessities. People need for basic living standards. So there’s a really good podcast is by CBC I’m also not a huge fan. But this was investigative reporting. And it was called slum town is about this high profile criminal up in Edmonton that had a tonne of properties. He actually got murdered last year. So he’s, he’s no longer around. But the first episode I wanted to kind of pay attention to is this journalist I’m forgetting her name, which is I said that, but she did. She kind of highlight all these different jurisdictions around the world combine bad landlords, so it was talking about Scotland, Baltimore, and a couple of these places. And anyways, they’re banning landlords from owning properties that had a bad track record. So you know, they’re intentionally slumlords they had to get their properties commandeered, auctioned off, and then the proceeds would go towards combat in s’mores and maintain that. So I thought that was brilliant. I’m totally on favour of bringing legislation in that will remove landlords from the property to the point that they’ll lose the property and remove all that motivation to be cheap to just make money, that they can actually do it and actually get banned from owning properties in the city or province. And then the same side, if someone’s been predatory, and as a professional tender has a track record of destroying people’s livelihoods and properties. They should be flagged in an online database, just saying that same thing with the slumlord, and people should know about it, and just make it difficult for them to do the evils that they’re doing that they don’t participate anymore.

 

Erwin  

Essentially white collar crime. That’s their stealing. But quick question to single key screen for people who have been convicted of crimes?

 

MacKenzie  

It does, yeah, we have a online source that does over like, if there’s a huge number hundreds or 1000s of databases, but the caveat is I’m gonna start putting the picture here. While it does do big search, not all jurisdictions release criminal records, or they’re not all public or publicly available, that can be scanned online. So yes, we provide that. But I always say do your due diligence, you know, for example, in Alberta, for evictions from RT GRS, you have to go down to the local courthouse to do an in person search. So take out the grain of salt, but any any criminal convictions and things that are in our public records will appear that are available online will pick them up. When you

 

Erwin  

see a gap in someone’s income for like, the year the time they were incarcerated.

 

MacKenzie  

Yeah, well, I mean, it just goes back like going back to tents being up front is a form skip, you should be using. There’s very select questions you should be using. And one of the biggest tips I always give away people kind of look at me cockeyed. Like why that makes no sense. But I tell them ask the same questions. repeatedly. Ask them when your first contact on the phone call. Ask them during the viewing and ask them on the follow up call. If you ask it to centre questions three times you should have a very similar answer every time. If that’s changing, and the details are slightly moving. Well, chances are someone’s lying. And the folks that lie that try to get past you can’t keep their facts straight. And you’re gonna see red flags. And you can dive into that further. And I always tell people, right on the phone call, I do background and credit checks. I know we’ve been talking for a long time. This is gonna be like a two hour episode.

 

Erwin  

But I’m excited to have you back. Set to go through how to add a screen attendant and and probably a separate one on how to write your credit report.

 

MacKenzie  

Yes, 100%. Anyways, you ask these questions, and you want to make sure that the store is consistent. If it’s not red flags, dig into it further, you might be getting fed some inaccurate information. But lately,

 

Erwin  

we tend to thank you for so much for going over time. Again. I think we will rebook you for how to run a single key report, do tenant screen and probably a separate one completely on how to read report. That should be one. Yeah.

 

MacKenzie  

And I’m thrilled next week to have you on a podcast I’m launching. You’re going to be my initial binge launch series and my binge watching. We’re gonna do about five episodes. episodes on the launch here, February 1. Hopefully I can execute on that deadline because I have to relaunch and it’s for rent conversations, the better the rental industry. Thank you.

 

Erwin  

For listener all the links will be in the show notes as long as Mackenzie gets them to me by tomorrow. Since this, this pod episode drops. I

 

MacKenzie  

hope you’re right. On Monday. Yeah. And I will help you out and I’ll give you a bio and all that stuff, too. I read your sheet started the podcast. So

 

Erwin  

just like getting the forms wrong. Don’t trust me to write everything down correctly.

 

MacKenzie  

Absolutely. Let me let me know source all that information. And you guys can find me on LinkedIn, Mackenzie Wilson. I’m on Facebook as well. Arkansas, this Facebook group. My pleasure. And thank you so much for having me on your show,

 

Erwin  

I had to google it, fewer than 5% of people can possibly lie or pathologically. So, hence your advice to ask the question three times 95% of people cannot beat it.

 

MacKenzie  

Think of it this way, too, I think honest, people will lie. If you’ve got some of the really tough situation, perhaps someone fleeing domestic violence, or, you know, they have no money. They’re between jobs. And they normally wouldn’t, but under very challenging circumstances, they’ll change a bit of facts to look a little bit better to get the rental, would you? Unfortunately, I if I was in those situations, I would probably I probably fudge the facts. So I look I shine a degree or two better than what I normally do if I didn’t have that kind of pressure on me. Those people,

 

Erwin  

those people, just,

 

MacKenzie  

yeah, and so I mean, there’s that part two, exactly. I mean, I could go on forever, but essentially, they out there, they wouldn’t normally do it. They had all good intention. But if someone’s in a challenging enough adversity, you know, they gotta do what they gotta do to survive. And where can people get more information on single key single key.com complex? Is it appropriate to call it like formerly known as neighbourly is now

 

Erwin  

part of single key.

 

MacKenzie  

Accurate? Absolutely neighbourly is now a single key, we’re one in the same, so yeah, and if you guys are curious about checking Alberta, go check out the Alberta landlord community.ca. It’s a private forum, the moving towards from the Facebook, but there’s also on Facebook, the same name, you can find our Facebook group as well. Awesome. Thanks so much McKenzie.

 

Erwin  

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

Subscribe on Android

To follow Mackenzie:

Website: singlekey.com/

Linkedin: linkedin.com/in/mwyyc/

Alberta Landlord Community: albertalandlordcommunity.ca/

Two recent articles Mackenzie recommends

https://www.singlekey.com/blog/how-can-landlords-spot-fake-application-documents-from-tenants/

https://www.singlekey.com/blog/airbnb-arbitrage-should-you-let-your-tenant-rent-out-your-property-to-short-term-renters/

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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…

If you’re interested in being a successful real estate investor like those who have been featured on this podcast and our hundreds of successful clients please let us know.

It is our honour to give back and educate others on how we build cash flowing real estate portfolios using all the best practices shared on this podcast, from the lessons of our hundreds of clients and of course our own experience in owning investment real estate.

If you didn’t know already, we pride ourselves on being the best of the best real estate coaches, having the best property managers, contractors, handy people, cleaners, lawyers, accountants, everyone you need on your power team and we’re happy to share them with our clients to ensure your success. 

New investor or seasoned veteran investor, we can help anyone by providing our award winning coaching services and this isn’t all talk.

We have been awarded Realtor of the Year to Investors in 2015 by the Real Estate Investment Network, 2016 by the Canadian Real Estate Wealth Magazine and again in 2017 because no one told the judges no one is supposed to win the award twice but on merit, our peers deemed us as the best.  In 2018, we again won the same award by the Real Estate Investment Network.

Hopefully being the most decorated team of Realtors in Ontario will make you consider us for your first or next real estate investment.  Even if you don’t invest in our areas, there’s a good chance I know who would be ideal for you. 

I’ve been around for a while, some Realtors are talented at servicing investors there are many with great ethics.  The intersection of the two, talent and ethics is limited to a handful in each city or town.

Only work with the best is what my father always taught me.  If you’re interested, drop us an email at iwin@infinitywealth.ca.

I hope to meet you at one of our meetups soon.

Again that’s iwin@infinitywealth.ca

Sponsored by:

Infinity Wealth Investment Network – would you like to know how our investors returned 341.8% on positive cash flowing real estate over the last five years? On average, that was 68.4% per year.

Just imagine what winning in real estate could do for you.

If you would like to know how we did it, ask us how by calling 289-288-5019 or email us at iwin@infinitywealth.ca.

Don’t delay, the top markets we focus in are trending upward in price, so you can pay today’s price or tomorrow’s price.

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

Erwin

Hamilton, St. Catharines and Toronto Land Development, Real Estate Investor, and soon to be builder.

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

Bouncing Back From Losing A $4.5 Million Business To Bankruptcy In Months With Nick Kindler

Welcome to the Truth About Real Estate Show!

…The little Canadian podcast meant only for Canadian Real Estate Investors, which make up 1-2% of the Canadian population…

The #39th ranked country in terms of population, yet we manage to punch above our weight with a #81 ranking in all of iTunes in the Business Category. 

 
 
 
 
 
View this post on Instagram
 
 
 
 
 
 
 
 
 
 
 

A post shared by Erwin Szeto (@erwinszeto)

We’re not even that well rated as we have numerous haters, and to the annoyance of my team, I almost never ask for five-star reviews, which I should as that would make this show more prominent on the interwebs and thus reach more people who want to learn the actual truths about real estate investing vs. those with agenda to sell garbage investments. 

The Truth About Real Estate is if one’s investments are garbage, they will eventually catch up to you.  

Paramount Equity Financial Corporate was in the news recently as the receiver is currently suing the developer partner for stealing funds from retail investors who are average, hard-working, everyday Canadians.  

As someone who’s followed the case because I had clients invest, the whole fund and investments look terrible, same with the fund management; hence they were shut down by the Ontario Securities Commission. 

And rightly so, as the fund managers changed the investment focus from 2nd mortgages on principal residences to land developments to build large projects like retirement homes while offering low returns compared to the risk. 

I take responsibility to learn from this experience, so this may never happen again to anyone I care about. 

My lesson is to invest in oneself and control the asset. 

Yes, being more active means more effort and time, but I avoid losses and achieve world-class returns. In turn, I educate myself, gain experience and create value for our coaching clients.

My business, iWIN Real Estate, is a bit different than others, though, in that we are licensed Realtors, and we coach our 400-something clients into the execution of a world-class investment property, and the numbers show. 

Excluding the pandemic run-up, our clients’ five-year return from 2015 to January 2020 was 341% or about 68% per year.  

While the media keeps pouring out stories of folks struggling to afford higher interest rate mortgage payments, my clients are making travel and retirement plans, travelling while retired and buying houses for their adult kids.

At the Wealth Hacker Conference, our keynote speaker Jesse Itzler shared that his secret to success was to pour his heart and soul into each project, whether it be a private jet company or a marathon through Death Valley.  

For me, you better believe I’ve poured my heart and soul into our 8 figure real estate portfolio and, in turn, the lessons for our friends and clients to create their own means towards financial peace.

No, it’s not easy, but it sure beats losing money and having taxes, governments, and inflation eat away at your wages and savings.  

It’s only getting worse, as that is one of my bold predictions for 2023 and beyond.

Speaking of bold predictions, in contrast to what the Bank of Canada and the US Federal Reserve are saying, my bold prediction for interest rates is that cuts are coming sooner than expected.

My team and I will share our bold predictions for Canadian real estate on January 28th at our in-person iWIN Meeting. 

With the new normal, or work from home, we’re focussing more on networking this year, so you don’t want to miss out. 

You never know what connection or introduction you will receive that will change the trajectory of your career.

Want to learn how big-time professional apartment builders invest? Are you interested in multifamily investing? 

Then you don’t want to miss our guest speaker from Equiton – Lawrence Raponi. 

I’ve asked Lawrence to share the benefits of investing in a real estate investment trust AND how Equiton invests: specifically, how they find deals and what numbers/returns they need before even considering making an offer.

I want our attendees to understand the relative difference between investing passively and being completely active.  

In my humble opinion, one must earn 3X more than the passive rate to consider being active.  Plus, I know many are looking for cash flow, and REITs often make regular cash distributions.

So be there on January 28th. Doors open at 8:30 am, optional mastermind lunch follows immediately after, and I’ll be there.

From the questions flooding my email for you, our 17 listeners, there’s definitely a lot of uncertainty, and honestly, my team and I can likely be of help. 

If you’re on my email newsletter, you’re already receiving event invites. 

If not, that’s just silly: www.truthaboutrealestateinvesting.ca name and email address on the right, and you’re good to go. 

I know it’s late January, but happy new year to you, my 17 listeners. I wish I knew all your names as I’d shout you out.

December wasn’t a fun month for Cherry and me. 

Even though the Wealth Hacker Conference had passed, we couldn’t get away on vacation, not that we didn’t try. 

We had a Caribbean cruise booked as we had credits from 2018 we had to use before they expired and a pile of Aeroplan miles accumulated over the last three years thanks to covid. 

Unfortunately, on December 16th, my daughter Robin complained of an earache. We swim a lot, so I suspected an ear infection, confirmed by the ER doctor at 11 am before our 6 pm flight, so we had to cancel everything. 

We got some money back, but my Aeroplan miles are gone, and we had to make a travel insurance claim.

More importantly, we were not going on a badly needed vacation… so we booked everything again for the 2nd week of January, AND the cruise cost was 20% more than the one we cancelled.  

We like to travel for cheap; hence we had originally chosen the most affordable week, but we made the best of the situation aboard a gorgeous ship, ate waaaay too much as the food was excellent.

We took full advantage of the complimentary babysitting, where my son played Nintendo most of the time, and my daughter did crafts.  

We hit the beach, and the highlight for me was taking the kids snorkelling in the open water for the first time.  

Bruce took to the experience really well while Robin held onto my arm.

The kids are used to murky lakes and backyard pools, so seeing clear open water that goes forever and all the aquatic life shocked their senses.  

We are grains of sand compared to the grand expanse that is the Atlantic Ocean.  

We saw sea turtles, and a stingray; my daughter and I were early to one beach and were fortunate to be the only ones to see an Octopus hiding in the hollow of a coral reef.

I’ve SCUBA dived a bit, so I know a bit about how to look around and find the goodies. Hence we were the only two on the beach to see the octopus and, later, a puffer fish.  

Super cool, and I’ll count that as a memory made with the kids.  

For Cherry and I, making memories is our main objective with the kids, and this trip was a good one.

Bouncing Back From Losing A $4.5 Million Business To Bankruptcy In Months With Nick Kindler

On to this week’s show!

We have something different in that our guest is a successful entrepreneur in the world of Business and not real estate investing YET.

Nick Kindler is the Chapter President of Entrepreneur’s Organization, a private membership of seven-figure entrepreneurs to which Cherry and I also belong.

As a member of the real estate community, I find learning from entrepreneurs is as helpful as learning from real estate investors to broaden my learning.  

I also see all these memberships and masterminds costing $20,000-30,000 or more. 

I wanted you, my 17 listeners, to be aware of other masterminds, membership groups, and Entrepreneurs Organization is less than $10,000 per year, and I’m a big fan.

Who better to talk about Entrepreneurship than our very own Chapter President, Nick Kindler, who also happens to be my client who’s working with team member, Chris “the Captain” Hook to acquire quality investment properties.

Nick is here today to share his experience as an EO member, President, his entrepreneurial journey, which includes a $4.5M business that went bankrupt but, more importantly, how he bounced back, and the lessons learned so you may avoid the same mistakes.

FYI – failing businesses, losing money and letting staff go is not fun in my experience. Please take notes.

If you would like to learn more about Entrepreneurs Organisation, please reach out to Nick on his company website www.kindlerandcompany.com/contact

You can hit me up via email or DM, or you look up your local chapter at https://hub.eonetwork.org/.

I’ll be at the open house event on March 9th that Nick mentions, so I hope to see you there! Link: https://www.eonetwork.org/toronto/Pages/upcoming-events.aspx?i=2&s=5

Nick’s consulting business helps innovative leaders communicate better. 

For example, I attended Nick’s two-day workshop on how to give a TED talk which was excellent. Nick deconstructed what goes into an excellent talk, then walked us through to write our own and how to deliver with stage presence. 

Nick is also the author of Impact: Simplify, Transform, and Perform Pitches and Presentations, available at https://www.impactbook.ca/

Without further ado, I give you Nick Kindler.

Please enjoy the show!

 

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 FREE Online Training Class.  We will be back in person once legally allowed to do so, but for now, we are 100% virtual.

No need for you to reinvent the wheel; we have our system down pat. Again that’s  www.infinitywealth.ca/events and register for the FREE Online Training Class.

 

This episode is also brought to you by www.stockhackeracademy.ca, where everyday real estate investors learn the best practices in stock investing to earn cash flow in about 15-30 mins per day from their mobile phones. After real estate, Stock Hacking is the next best hustle, as you’ve heard from many past guests on this show. Among our students last year, 31 trades were shared with them. 30 were profitable for an over 96% success rate and 12% return on capital. I will be giving free demonstrations online, very similar to the one I gave my kid cousin, a full-time musician who just made a 50% return in 2021.  Past, of course, does not predict the future, but if you’d like a free demonstration, go to www.stockhackeracademy.ca in the top right and click FREE Demo.  At the demonstration, I’ll have special bonuses. We do not advertise publicly for all my favourite listeners, and I only have two more demos to give in the next few weeks.

Don’t delay www.stockhackeracademy.ca, what I consider the future of side hustles with real estate so unaffordable for many.

 

To Listen:

Audio Transcript

**Transcripts are auto-generated.

 

Erwin  

Hello, and welcome to another episode The truth about real estate investing show little Canadian podcasts meant only for Canadian real estate investors, which makes up like one 2% of attaining population, the number 39th ranked country in terms of population. Yet, this little show manages to punch above its weight, with our number 81 ranking in all of iTunes in the business category. So that’s not even the real estate category, let alone investing category, let alone real estate investing, but rather all of business, we’re not even that well rated. Because we have numerous haters. And to the annoyance of my team, I almost never asked for five star reviews, which are much appreciated. I do appreciate all the kind words that people believe that believe on reviews, I do read them all. So I should I should ask for more, as the algorithms actually use reviews and shares and subscriptions to make this show more prominent, prominent on the interwebs. And I don’t know how this all works. But yeah, the more positive stuff more sharing happens, the more iTunes and whoever else, Spotify, YouTube will make this show more available to others, more visible to others. And that’s reached more people who want to learn the actual truth about real estate investing, versus someone who has an agenda sell to sell garbage investments. That’s the honest truth. The truth about real estate investing is a fund’s investments are garbage, they will eventually catch up to you. For example, Paramount equity financial corporate Corporation, I don’t think I need to be worried about being sued by them. Hopefully not Paramount equity and Financial Corporation, they were in the news just recently as the receiver. So the accounting company, which is taking control of the fund is currently suing the developer partner of paramount for stealing funds from the retail investors who are friends of mine, many of them were friends of mine, were just average hardworking, everyday Canadians, as someone who’s filed the case closely because again, I have friends in investment, I have clients invested in the whole fund and investments look terrible. Same with the fund management, hence they were shut down by the Ontario Securities Commission. Rightly so as the fund managers changed the investment focus of their private fund, they weren’t disclosing that they had changed. The original intention of the fund was that it would only fund second mortgages, the funds would be used for private lending on second mortgages on people’s principal residences. Instead, the fund managers pivoted to fund large land developments to build large projects like retirement homes, or converting properties into something else. Again, large complicated multimillion dollar projects that would take years to complete some of them without even permits or the zoning to do so. So the underlying investment changed completely, while offering what I consider and I think most pretty much everyone would consider very low returns to the investor compared to the amount of risk they took on. I take responsibility to learn from this experience. So this may never happen again, to anyone I care about. My lesson is to invest in oneself. I read a lot, a lot of courses and then the day Terry and I we control our assets, as in 90% of our real estate portfolio is under our own names are under controlled and owned by corporations that only cherry and I own. Yes, being more active means more effort and time. But I avoid losses, which is rule number one by Warren Buffett don’t lose money. And we’ve even though we were very boring, I consider our investment quite boring. Same with our clients or clients investing is fairly boring. It’s systematic, it’s repeatable, repeatable and by anyone and they’ve achieved world class results. In turn I educate myself gain experience and create more value for our coaching clients. My business the our real estate team is a bit different than others, though, that we are licenced realtors. And we’ve coached our 40 or something clients into execution of world class investment property. And the numbers show excluding the pandemic run up our clients average five year return from between 2015 to January 2020 was about 341%. That works out to about 68%. Again, this data was done internally by surveying our own clients. We know what our clients own. And we’re pretty good at estimating what those properties are worth. Again, that data was 2015 to January 2020, before the pandemic run up. While the music is pouring out stories of folks struggling to afford higher interest rates on their mortgages. My clients are making travel plans and retirement plans and travelling all retired and some are even buying houses for their kids at these lovely prices that we’re seeing right now. At the wealth hacker conference. Our keynote speaker just the it’s so shared that his secret to success was to pour his heart and soul into each project, whether it be a private jet company, or a marathon through death valley. Yeah, I think you need to give everything you got to train for a marathon through Death Valley, you know, plus 40 degree weather for me, you better believe I poured my heart and soul into managing our eight figure real estate portfolio. And in terms of lessons for our friends and clients to create their own means towards financial peace. No, it’s not easy. But it sure beats losing money and having taxes, governments and inflation eat away at our wages and savings, multiple streams of income. That’s the only way. And it’s only getting worse as my bold predictions for 2023 and beyond. Speaking of bold predictions, in contrast with the Bank of Canada and US reserves are saying my liberal prediction is we’ll see an interest rate cut sooner than they say. So. And this is actually interesting for the first time and as far as I can remember, again, I read pretty much everyone’s economic predictions, I find that I’m usually I’m usually moderate. I’m usually moderate. But I find that I seem to be more. The term is dovish, I believe I believe the market will turn around foremost. And this is like the first time that’s I’m more optimistic than most of what’s out there in the media. My team and I will be sharing more predictions for Kenyan real estate on January 28. At our in person I one meeting, we do have a new format with all the folks working from home are focusing more on and more on networking this year. So you don’t want to miss this. You never know what connection or introduction you’ll receive that will change the trajectory of your career, or career or investing career. Want to learn how big time professional apartment buildings invests, are you interested in multifamily investing, then you don’t want to miss our guest speaker from Equitana Lawrence propone. I’ve asked Lawrence to share his share the benefits of investing in a real estate investment trust, and how the company how their company invests specifically, how do they find deals, and what numbers of returns they need before even considering making an offer. What I want for our attendees is to understand the relative difference between investing passively, versus being completely active. In my humble opinion, one must earn at least three times more than the passive rate to consider being active. Plus, I know many are looking for cash flow. And REITs often make regular cash distributions. So you want to be there, January 28, doors at 8:30am optional mastermind to follow after that, and I will be there as well. From the questions that I’m getting in my email and from you my 17 listeners in my DMs. There’s definitely a lot of uncertainty. And honestly, my team and I can likely be a lot of help. We’ve been at this for a little bit. And if you’re on my email list newsletter, then you’re already receiving events to our invites. And if not, that’s just silly. www dot truth about real estate investing.ca. Enter your name and email address on the right side and you’re good to go. Just this past week, we actually just gave a free webinar on how to sell a tenant ID property. The feedback was overwhelmingly positive. And it was great presentation. If you’re interested in how to maximise your income on when you exit your investment property. And as tenanted, you want to have watched that presentation. And honestly, January, but Happy New Year to my 17 listeners. I wish I knew all your names as I showed you out. On the personal note. December wasn’t a fun month for Terry and I even with the wealth hacker conference behind us, we couldn’t get away on vacation that we didn’t try. We had a Caribbean cruise booked as we had credits leftover from 2018. And we had to use them before they expire in a pile of Aeroplan miles accumulated over the last three years because we didn’t fly. Thanks COVID. Unfortunately, on December 16, my daughter Robin complained of an ear H. We swim a lot. So I suspected an ear infection confirmed by an ER doctor at 11am before our 6am flight to Florida, so we had to cancel everything. We had a little insurance. But I found out so he got some money back some money back. But my Aeroplan miles are gone. And yeah, it’s so we still have to make a travel insurance claim was made we still have to get paid. More importantly, we were not going on a badly needed vacation. But we booked everything again for the second week of January. But unfortunately the cruise cost 20% More than the one we cancelled. We do like to travel for cheap. Hence we had originally chosen the cheapest week. But we made the best of the situation aboard a gorgeous ship we ate at least for myself. I weigh too much as the food was excellent. We took full advantage of the complimentary baby City Railway than physically sampling attended the most of the time. My daughter did crafts. Every day she bring home like five pieces of crafts. We hit the beach and the highlight for me was taking the kids snorkelling and open water for the first time. Brewster to do the experience quite well on pretty quickly. Robin How long have my arm the whole time? It was kind of sweets. But kids are used to murky lakes and Ontario.

 

Erwin  

And backyard pools are so small and you can’t see much so it wasn’t a big deal to me, but For them, yes, it was a brand new experience topping into a clear open water that looks like it goes on forever and all the aquatic life was a bit of a shock to their senses. We are but grains of sand compared to the grand expanse that is the Atlantic Ocean. We saw sea turtles, we saw a Stingray, my daughter and I were early to one beach and we were fortunate enough to see an octopus. Unfortunately, no one else on the beach saw it. But fortunately enough, I was looking I was looking in these coral crevices and these hollows in the coral and I happen to see an octopus pretty sizable octopus. It was hiding but I managed to see it. tardiness eight arms dive scuba dive quite a bit. So I know a bit about how to look around and find those goodies. And so we were the only ones done tends to be the only two on the beach to find the octopus. And later we saw puffer fish as well. So it was super cool. Very rewarding. I’ll count that as a Memory Mate with our clients on sorry, clients, kids, kids. Yes, kids are important. It’s not just about business. To this week’s show, we have something different in that our guest is a successful entrepreneur in the world of business and not real estate investing yet, so don’t get mad folks. I’m warning you now. This episode is is not just about real estate investing. But we have an entrepreneur expert who does have. So first off, I view real estate investors as entrepreneurs in the real estate industry, either as realtors, mortgages, marketers and even investors, you’re still a small business owner in race. Nick Kindler is the chapter president of entrepreneurs organisation, a private membership of seven figure entrepreneurs that cherry and I also belong to. As a member of the real estate community, I find learning from entrepreneurs outside of our real estate community, just as helpful. So I learned from both areas from those communities. And just to broaden my learning, I also see the all these memberships being promoted memberships and masterminds that cost 20 to 30,000 or more per year. But I wanted for you my 17 listeners to be aware of other mastermind membership groups that are available, and entrepreneurs organisation which I’ve been part of for three years, I’m big fan of and it cost less than 10,000 a year. So the value in my opinion is there who better to talk to about entrepreneurship than our very own chapter president. Again, kindler, who happens to be my client who’s working with my team member, Chris, the tumtum hook to acquire all the investment properties. Nick is here today to share his experience as an EO member, the president, his entrepreneurial journey, which includes a sadly, a 4.5 million business plan, a $4.5 million business that did go bankrupt, unfortunately, but more importantly, how he bounced back, and also there are lessons in there. So again, I would like you all to avoid the same mistakes. FYI, failing businesses, losing money and letting stuff go is not a fun experience. So do make sure you take notes. If you’d like to learn more about entrepreneurs organisation, please reach out to Nick on his company website can learn and company.com/contact where you can hit me up on email and bar DM, you can look up your own local chapter, you can really just google the name of your city and entrepreneurs organisation. I’ll be at the open house that Nick mentioned on March 9, and you’re likely in downtown Toronto. So I hope to see you there. I’ve got a link in the show notes for it. Nick’s consulting business so to explain an entrepreneur experience, his current business is a consulting business that helps innovative leaders communicate better. For example, I attended Nick’s two day workshop on how to give a TED talk, which was excellent where Nick had deconstructed for us what goes into an excellent talk. And then walk us through how to write our own and also how to deliver it, how to deliver a stage presence. So we learned about storytelling, about joke writing about being vulnerable about body language, learn all those things in a two day workshop. Nick is also the author of impact, simplify, transform and perform pitches and presentations available at www dot impact book.ca Without further ado, I give you Nick Kindler. Hey, what’s keeping you busy these days?

 

Nick  

Well, podcasting just sitting here with you is keeping me busy today. No, this is great. Because today I looked at today is kind of like almost like a day off. I have a conversation with you and then a couple of quick calls and then I get to go and be part of my forum group which is part of EO which I’m sure will we’ll talk about at some point. But what’s keeping me busy. I have amazing clients that I get to coach one on one webinars and I’m running workshops that we provide to help leaders become better communicators. I just had a great off site with my team this week planning the the next quarter and we have some really great consulting clients. We’re working with two so I am full tilt like each day is full, full full. I hit the pillow and I fall asleep pretty quick. And I’m having a lot of fun.

 

Erwin  

So I started reading The Miracle Morning again. You’re familiar with Doing what sort of a Miracle Morning Hal Elrod. He’s a 5am. Guy. Yeah. Okay, time to get up. Just curious.

 

Nick  

530 every day. Yeah.

 

Erwin  

Okay. All right, show us the truth about real estate investing. So tell me the truth. Do you get up like on fire motivated?

 

Nick  

What’s my routine? Is that what you’re asking? Or is it

 

Erwin  

like quick just because I just started, started getting up early again.

 

Nick  

So I do I don’t wake up on fire. No, no, I’m I’m fog. But I have a process to get me going. And it’s now been almost a year that I’ve done this process. And it’s changed my mindset completely. Yeah. And maybe it’s kind of taken from the Miracle Morning. So I wake up at 530. I write in my journal for about 20 to 30 minutes, free form thoughts. But I start first with three things I’m grateful for. And so I write those down. And I try and make them different every day, meaning I can’t repeat what you know what I said before. So I’m always trying to find things that I’m grateful for. And then I freeform thoughts. Sometimes they’re like just garbage. It’s just garbage out on the page. And sometimes it’s the impetus for things that I speak a bit, and keynotes they deliver. Or sometimes it’s just problem solving stuff that I’ve got to deal with during the day. And I’m thinking about it already. And then putting it to paper, putting it to paper, a book just like this, and I’m writing a couple of pages down, and then I close it up. And I have a cup of coffee. I Wordle.

 

Erwin  

All that game. Yeah,

 

Nick  

I would do that. If I didn’t get to it today, because the day was a little different. But and then I go for a run or I bike, try and do push ups and sit ups and crunches, I don’t do like a million of them, I just do a small set. And I have not looked at my phone in my email yet. Just to be clear, I’ve worded I haven’t turned everything on, then I go for a walk with my dogs and throw the ball for them come back, then I you know, get going, I either get to the office or I open up my laptop and I start start thinking about the day. If I’m rushed to get to a client, sometimes things get shortened. But for the most part, that’s my process.

 

Erwin  

How long you’ve been doing this?

 

Nick  

I started that process. The journaling. Exercise has always been there. But the journaling and gratitude has been the last 1011 months, okay. And it really has changed my life look at really, I used to be a New York Times addict headlines at a Globe and Mail addict, I would look at what was happening in the world politics. And it fed into a stress of an overall feeling of negativity. And I still look at that stuff, but on my terms and at different times more regimented. So I have a diet of that stuff. And it just, it didn’t serve me. I feel that I’m still well read. I understand what’s going on in the world. But I do it on my timeline when I’ve gotten things out of the way that I want to get out of the way.

 

Erwin  

So that’s not why I invited you on the show. Okay. Well, I think it’s important to bring up because I’ve spoken to a lot of people 2022 is not a good year for many, mostly mental health terms. So for many people’s mental health terms, like no one likes these high interest rates, my community’s a bit divided. Yeah. In that, like, my clientele is amazing. Like everyone knows if you’ve owned property for five or more years, you’ve you’ve done amazing. Yeah, right. So that’s my, that’s my clientele if I want to go outside of my circles, and like other people were like, generally newer, yeah, a lot of them are getting hurt or hurt financially. Sure. But overall, I think mental health has been was a bad year for 2022. It’s just my sense is what I see out there. Well,

 

Nick  

I would say I would say yes. And so is 2021. And so is 2020. And so what I would I prophesize is that we are now seeing ripple effects of what’s happened from COVID. Like there was a there was a lot of stress. I mean, last time I was here, when you showed me around your office, which is awesome. By the way, he was quiet. It was like two of us here, maybe three. And now there’s full house almost like it’s pretty busy. And that was during COVID. Right? Or we were allowed to connect. We weren’t breaking any rules or anything like that. We weren’t on lockdown, but it was quiet people were not. That has an impact on people. When your life comes to a screeching halt, financially, socially, psychologically, that has an impact on people. And I think there’s waves of change and that it comes back and people, it impacts people. So you mentioned interest rates, such as the current ripple, that it may be an impetus for people going, Oh, I’m not good. I’m not doing so well. And I would say just because you mentioned mental health. If anybody is struggling with it, get help. There’s lots of Help to be had, I have a very close family member that struggles deeply with mental health. And I will be the first to say don’t wait for Bell Let’s Talk Day. Talk about it. Now there’s nothing wrong. If you’ve got a cold, and you tell people you’re sick. That’s honesty and truth about your how you’re doing. If you’re feeling very, very low, because you’re suffering from depression, that is the same thing and talk to people about it, get help, you can get help

 

Erwin  

people will help you. So that’s actually really,

 

Nick  

that’s that’s my soapbox. Sorry.

 

Erwin  

That’s really good segue for entrepreneurs. Organisation. EO. Yeah. Which you are the president of the Toronto chapter. Currently the President? Yes. Which is the largest chapter in Canada. Like quite a bit, isn’t it?

 

Nick  

No, we are the second largest to Vancouver. territory, Vancouver, and I believe Edmonton is a close third. And they’re really great chapter as well. Lots of great chapters all across Canada. Yeah.

 

Erwin  

I imagine we have more chapters as a province than other provinces. Where it’s fragmented. Yeah. I mean, that’s all I get. We’re just doing we’re doing off by point, though, is that? You know, I’ve been part of masterminds for years. Yep. Right. And those have been my places to connect, and to talk about problems that we face in business in life. And in my experience, so I’ve been part of EO now. I joined in 2020. January 2020.

 

Nick  

Yeah, so you joined, like, eight months after I did.

 

Erwin  

Right. Right. Yeah. And then the shit hit the fan. Immediately after? Yeah, it was hilarious. So for less than one week. So just a backup for the listeners benefit entrepreneurs organisation, what you’re no better than I am. You’re the president.

 

Nick  

Go for it. Man. I’d love to hear you say it. And then and then I will course correct. If need be,

 

Erwin  

please, please, just some basic highlights. It’s a private organisation, I tell people is basically a co op. It’s a nonprofit, nonprofit, okay, that’s probably a better term. So basically, does not make money. That’s probably a good reason why the cost is very low. It’s been around for quite some time to join minimum a million dollars, revenue us a year, you have to apply. And it’s, it’s quite a bit of commitment.

 

Nick  

It is a commitment, but it’s worth its weight in gold. Is that as a phrase we can say on an investment podcast. It really is, though, it is probably, you know, I’ve got some things that I all say like were some of the best, you know, I love that question. Like, what are the best things you ever bought? Right? You know, and I will say, my dogs, like they’ve been a big, some of them have been a big suck on on financials sometimes. But they brought us so much joy and happiness. And it’s not a thing that we get that appreciates. It’s a thing that I love, right? Or a dog is, you know, a creature that I love, EEO, one of the best investments I’ve ever made in myself. And so you did a great job. It is it’s nonprofit. In Toronto, we’re about 130 members strong. And it’s growing every day, every day, we have people applying and it’s member vetted. So you apply you do have to have a minimum of 1 million US in revenue for your business. And you also have to apply and be able to show that you live the values of EO. And then we vet your members you’re interviewed, you’re vetted by the board, you’re vetted by all members. And then you get to join this amazing not just local group of EO Toronto, but the region and the global community. And it’s a powerful community. And I think I’m going to keep going if that’s alright, and explain why it’s a powerful community. Because before you

 

Erwin  

do that, yes, sorry. Go ahead. It’s been a while since I’ve been tested on what the values were. So

 

Nick  

don’t do this. Don’t do this to me. Don’t do this to me. I’m gonna I’m gonna have to refer to them. Because I cannot remember off the top of my head. I know be bold. Yeah, people, you know, and I’ve turned my, my phone off in order to do this. I should have known you’re going to ask me, but I’m going to look them up.

 

Erwin  

He’s had to fill these out in my application. Right? Okay, so the values are yours.

 

Nick  

It’s brutal, because I’m terrible with these kinds of recall. So I’m sorry to all my EEO members that I didn’t remember this, but trust and respect, thirst for learning, which is one of the reasons why I love this organisation. Think big, be bold, and together we grow. And that last one is a huge one for me as the current president, our theme for the year is stronger together. You know, we’ve came out of COVID and I want people to recognise as this community that we really are the sum of our parts, like we are stronger when we work when we collaborate when we share, and we grow together. And, you know, one of the amazing things about EO and those values is that you have to have those when you get in. And then one of the things that I’m doing today is participating in one of the, one of the really the 10 polls, if you will, of EEO is forum. And so when I leave here, today, I drive into the city. And I’m going to have a three and a half, four hour meeting with eight individuals, all who embrace these values, and all will share what is going on in their personal lives, in their family lives and in their business lives. Because as entrepreneurs, we can sit here and you know, we didn’t know each other and we didn’t have this ego connection. What might happen is, hey, nice to meet you. How are you? Good. What do you do? I do this, what do you do? Great. Tell me more about your business. Here’s what we do. Here’s what we do. Great, superficial. But

 

Erwin  

no, definitely want to put on social media.

 

Nick  

Exactly. Exactly. But because you and I know each other through EO. And we’ve met we we’ve not we’re not informed, but we’ve met at events and we’ve chatted before I can remediate. We’re sworn to privacy, and we’re sworn to privacy, we can dive quickly and deeply into challenges, real challenges, like how are you doing? Cash Flows concerning me right now? Oh, well, have you experienced this or this? Oh, I haven’t. Why? Well, because when I experienced this, let me share what and this is a big part of what EO forum is all about experience sharing, we can get to a better place faster. So my relationships with people in my form, are incredible. But I also have friendships, real deep friendships with people that I sit on the board with, that I’ve met, just through learning events that are other members, that I also trust, I trust that what I share with them is not going to be broadcast to other people or shared at a cocktail party, that they get what I’m going through, because likely they’ve either experienced it, or they know other people that have experienced it. Because I’ve

 

Erwin  

gone to the forum training just recently, again, no nice, just the online stuff. And for folks, just to clarify, again, the four by forum, the more common term, the mastermind, except that we are we are we have a defined process process, we’ve had to go through mandatory training, our form is committed to 10 meetings are more commonly referred to as mastermind meetings. And also we each are required to share our what we call Top 5%. Yeah, or the 5%. Right. And I love it to top 5% And bottom five percents. Right, right, the good news and the terrible news that you don’t share with anyone else, right. And so

 

Nick  

it’s cathartic. I mean, that’s the word that comes to mind. It’s cathartic, you can celebrate those wins. And there is a process by which you do this, like if somebody in my forum group and it doesn’t happen very often is skating by and not sharing the real 5%. And that that 5% is what’s really going on beneath the surface. What’s really going on in your family, what’s really going on up here in your in your brain, and what’s really going on with your business. And if everything’s great, then I’m not as interested, I’m not looking for drama, and tragedy, although we’ve supported and we will support people who are going through tough times. And that’s one of the reasons why we are there we are there at forum, or they can pick up the phone and I know I can pick up the phone and call any of them at any time, by the way, to who will support me because they know I’ve got their back and I’ve and they’ve got mine.

 

Erwin  

So I’d say so these are some of the deepest relationships people have anywhere in their lives, sometimes even more deeper than their spouses. Sometimes even deeper than some cases.

 

Nick  

In some cases. Yeah, that’s very true. And, and I would say that’s unfortunate. For some, and also what a wonderful opportunity. Because it’s together we grow, right, let’s grow let’s learn how we can have better relationships and and look, EO we’ve just touched on forum but I’ve talked about how we’ve chatted and met many times and learning opportunities. We’re gonna go to the one coming up next week. And you know, we host incredible learning opportunities once in a lifetime learning experiences for entrepreneurs that want to take their business or their personalised or their families to the next level. I know that sounds like an odd way to position it. But, you know, we’ve, we can have speakers on negotiation and marketing, but we can also have speakers that come in and talk about how to have better relationships. How to better sex lives. I mean, it’s it’s everything.

 

Erwin  

It’s comprehensive. It’s holistic. Yeah, right. We had the speaker there. We’re sorry, the author of five love languages, I think was his some pretty heavy pandemic times there might have been two years ago, I forget. Yeah. Yeah. And that was awesome. And it was available to everyone. Was it not? Yep. Every evil, every evil member across the globe? Yes. And yeah. And again, we got the author. Yeah, that’s pretty, that’s pretty. And it didn’t cost us any extra.

 

Nick  

That’s the thing is, you know, there is an investment when you first joined. But it’s actually not ridiculous considering? Well, I can tell you that within minutes of joining this organisation, I was able to find the right lawyer to help me with something I was able to find the right, I was looking for something for my home. So I got a supplier that through EO that had the right supplies, and an incredible cost. So I saved 1000s of dollars there. And I saved hours and hours of stress and probably more than 1000s of dollars on the lawyer. And that’s all within six months of joining you. Not to mention the support that I received from my forum group. So I mean, if you’re an entrepreneur, I mean, this is my little pitch if you’re an entrepreneur in Toronto, but I can’t even go beyond if you’re an entrepreneur in a major city centre. And you’re in the States or anywhere around the globe, there’s very likely an e o chapter in your city, we’re all over the world, I want to say over 140,000 members across the globe, that number is slightly off, I think maybe 135. However, if you’re building a business, that’s about a million dollars in revenue at US dollars, or if you’re close to it, go and look for that EO chapter because number one, there’s an accelerator programme e o a entrepreneurs organisation accelerator as part of it for you. And it’ll take you from 250 500 up to a million and then you can join EO. So just to

 

Erwin  

add in there from my experience of entrepreneur, yo a the accelerator programme, I’d highly recommend it for anyone, especially if they did not do business school. If they had no formal business training. It is Chris’s crazy and expensive. Yeah. And the people that are in it and the teach it. So understand. I came from business school. Ah, okay. The people who are teaching are largely academics. Yeah. They may have a business as a consultant as somebody operated a business of one themselves. Right. But they were never in our world. Yeah. So they don’t have the same experiences. They can never talk to you about like how to fire someone right now. Things like that. Versus again, yo, a Do you remember the price? Yeah, I’m sorry. I’m putting you on the spot. Show we do need to talk about the investment.

 

Nick  

I don’t remember the price for ELA. I’m sorry. I don’t but here’s the thing. If you want to know more about eo will my email be

 

Erwin  

your email, I wouldn’t recommend giving okay.

 

Nick  

If you want to go to if you want to go to that, go to your website, or your website, you can go to my website then you can go to info at Kindler and company.com. Got it. I’m happy to share with you anything and point you in the right direction. There’s chapters all over the world. There’s chapters in Toronto, there’s chapters in southwestern Ontario, Montreal, Vancouver, Edmonton, Calgary, I keep buying Well, yeah, and ELA is a great way to get yourself fast as an accelerator to a larger business. And then if you want to sustain and scale your business, and have a good life, be a good person be a happier person. eo is the ticket. I’ll share a quick story just on this because I never actually thought about that specifically, until recently, Shane Bennett and his wife Shawn, were over for dinner, just before the holidays. And when I sat on the board, serving under Shane became very close to them. I just really liked him as a leader I follow and I he’s he’s been a good friend and a mentor as I’ve taken on this role of a president of the chapter. It’s pretty amazing. He’s an He’s an amazing man. I love him. And, and his wife’s amazing too. We’ve all become very good friends. And I raised the glass I said, Hey, Shane, I just want to say thank you for being such a good friend and a good leader and my wife’s interrupted me which I thought was kind of weird because I I’m gonna go further and she goes, working with you was exceptional for NEC and I just need you to know that EO changed his life. And I was like, my wife is not dramatic at all. She said, it was changed him. She’s a better leader. He’s a better entrepreneur. He’s a better person, ever since he’s joined this organisation. And I sat back and went, Okay, I guess I better stick around.

 

Erwin  

I did not authorise that statement.

 

Nick  

Yeah. Well, in that that means a lot. She’s not a highly emotive and declarative person. Like, she’s certainly speak her mind. But I found it interesting that she felt compelled to say that and

 

Erwin  

I should clarify, I mentioned to you before we were recording that, even though we’re talking about entrepreneurs and businesses, I always consider real estate investors to be small business operators. So they are, by definition, an entrepreneur, just that they’re in the industry of real estate investing. Yeah, absolutely. So I think this everything we’re talking about today applies to them. Accelerator programme, like has, like the accelerator days, everything that they have for the for each year. Yeah, for each year. And basically the main pillars of business, like cash flow management. Yep. Which is a big problem these days are who the people they call people but more people out here, management people management, more people know it as HR. Yep. Strategy day and execution. Yeah. All right. And it’s two year cycle to go through. So every two years, it’s those done there. We start over. Yeah. But again, like I attended these, I paid a lot of money for business school. People are paying way more today because I’m old. So I paid. I paid a lesson fleet and trace for business school. People today are paying like, double triple what I paid. And what what do charges for, for these courses? Like?

 

Nick  

Yeah, that’s great. And there are a lot of members of EO that like to go to those just for learning and bring their staff. Absolutely, yeah, yeah, absolutely.

 

Erwin  

Because I bring my staff member to next week’s workshop on marketing from a branding. Yeah, I’m excited for that. Me too. Yeah. I don’t think what else wants to ask my experience as well feel free to reach out the usual Pat channels. But yeah, that’s enough about yo. So actually, it’s great to have you come on talk about yo, because I haven’t been a member that long. And I’ve been in business that long either. But your successful entrepreneur.

 

Nick  

Define successful entrepreneur? It’s hard to say. Yeah, exactly.

 

Erwin  

And also, we have this confidentiality thing.

 

Nick  

Yeah, absolutely. But before we switch gears, I just I do want to just say one more thing about EO, which is that you get out of it, what you put into it, I think it’s really important. It’s like, if you sit there and expect everything to come to you. It’s like anything in life. It won’t. And I’ll just finish by the I know, we’re switching gears into entrepreneurship, and I’m happy to but I just I think I’d be remiss to say, you know, the, the working the forum experience that I’ve had the going to learning days and learning experiences, going to the conferences, going on convexity was a major back city, and Victoria is coming up in June, going to I get to go to Cape Town to go to the global leadership conference in April. There’s all kinds of learning. Also, because I volunteered to be on the board, which was also a growth and learning opportunity. I think it would be remiss if I didn’t say, you know, it’s a wonderful organisation, it thrives on the volunteer on the volunteer community. And so I’m one of those many, many volunteers. And I guess I would just say, join and get involved. And also for all those volunteers at EO that may be listening to this. Thank you. It’s awesome. Thank you for everything you do. Because you

 

Erwin  

are a volunteer president to absolutely you don’t get paid like a $400,000 salary.

 

Nick  

No, no, I don’t. In fact, I think I might be giving the equivalent of that in time. All joking aside, I love it. And it’s been very rewarding and continues to be

 

Erwin  

my last point about the topic. Is this why the cost is so low is because all these talented people are volunteering their time. Yeah.

 

Nick  

And the people you get to meet not just from your, your chapter, but the region and around the globe are exceptional leaders.

 

Erwin  

Yeah, and this the drilling, this has surprised but I’m paying less than 10,000 for just the membership and that includes many events does include like the bigger ones like Victoria, Quebec City, but the local ones almost Everything’s Included. Yeah. Including with the holiday party, which is a great party at the at the Grand bed. Okay, enough about that. So again, the show is about investment though, before self development, invest in yourself. The value here is incredible.

 

Nick  

Absolutely. Yeah. And again, reach out to either one of us if you’re interested in in learning more,

 

Erwin  

actually. I don’t know how it works these days is pre pandemic, other members invited me out to events? What is available to people interested in attending events? Well, who are non members

 

Nick  

if people are interested, first of all we’re going to be doing. I don’t know when this comes out Monday. Oh, it comes out Monday. Wow. Okay, so in March, and I might want to open up my calendar and look at the specific date, I believe it’s March the ninth. And I keep turning my I think it’s March the ninth bear with me while I look, we’re going to be doing a test drive, which is an opportunity for you see ya March, the ninth See, sometimes my recall works. It’s called the entrepreneurial experience. And it’s going to be downtown Toronto, at the national club. And Oh, fancy, yeah, we’re doing a national club event. And we’re going to walk people through what our strategic partners have to offer in terms of complementary services that can help their businesses. But beyond that, we’re also having regional leadership from entrepreneurs organisation, talk about all of the amazing things that you have access to that you probably don’t know you have access to. Like, there’s amazing discounts and and services that we as members get access to, like dozens and dozens and dozens of offers, that some of the things we use every day in our business and we may not be aware of. And before it, I’m inviting people who are interested to come to what I call the test drive, or an I don’t call it, it’s called a membership test drive, where you can come and experience and hear a little bit about what eo is all about. And experience a little bit about what this forum thing is all about. And then you can stick around and join us for the entrepreneurial experience event at the national club. So if at dinner and drinks, dinner drinks, schmoozing, you get to meet partners that we work with, you get to meet all the members, and you get to meet the regional leadership too. So it’s a real opportunity. If you’re interested, and you have a business that qualifies, you should definitely come for that 90 minute test drive before and then come afterwards for the party. Sorry, the event I should say, it’s not a party, there’s a little bit of party, but a lot of experience as well.

 

Erwin  

It’s like open food and bar, this kind of a party.

 

Nick  

And if you’re interested in that, just reach out to me and I’ll make sure that you get an invite. All right, awesome. info at Kindler and company.com.

 

Erwin  

I’ll have that in the show notes, folks. If you’re driving, you don’t need to do whatever. Alright, see ya. Yes, I would define you as a successful entrepreneur. Thank you, but hasn’t always been successful. But let’s look at the successes. Your big time. You’re quite wealthy. I bring it up because a lot of marketers are out there telling people quit your job. I’m self employed. Yeah. Not everyone’s fit to be so agreed to be self employed. You know, as an example, a friend of mine a bit of a mentor. When I used to work for IBM, His thing was just even be a consultant to go from employed to becoming country or consultant. He said, I need double. And he didn’t pay double. Because all the BS that comes with being consultant, for example, collecting. Absolutely. Right. Yeah. So I don’t argue the same for anyone for being in business for yourself as well. You should be trying to earn at least double what you earn as a salary. And then I’ll even throw it in like, like, this is not the time to try to become a full time real estate investor. It’s just everything is so much more difficult than ever. Right. So yeah, you chose the difficult path.

 

Nick  

I did. I didn’t know. I have chosen it. And I’m glad I did. I guess this is the pathless the road less travelled. Right?

 

Erwin  

Can you tell us about maybe your first business?

 

Nick  

Sure. My first business was I was in comedy. And we can talk about that too, if you’d like. But I was in comedy. I’d had this experience as writer and director and performer in a comedy troupe. And I think either I think it was around that time that we were my wife was pregnant as like, I think I need to start making more money. And so I started I had this idea that hey, we could start selling what we’re doing for fun and making a little bit of money on it to corporate audiences. So literally being a competitor to the second city, like who do does corporate improv etcetera. So improv workshops, custom performances for large events,

 

Erwin  

just apologies in case anyone doesn’t not familiar with Second City. I know Second City for going to improv shows. And they have an incredible list of alumni.

 

Nick  

Yeah, I mean it a second set. It includes John Candy. Andrea Martin, Joe Flaherty, Mike Meyer and Mike Myers was there. Yeah. So you have people who are on the main stage, who performed there. And then they have a school that takes people through from level one to master classes. And I did school, and I had my own sketch troupe from a bunch of people that were in some of them that were in that school with me. And we ended up having we did shows that there’s a real legendary bar downtown called the Rivoli. So we did monthly shows there. We did regular shows that the second, the second city, and we toured different bars and clubs across Canada. And we had our own TV show on CBC for a period of time, too.

 

Erwin  

Because one of my first impressions of you actually took the impression took some time to build, but my impression was, oh, Nick’s really funny. Because you’re the president, you have to get you introduced a lot. You open a lot of shows up on a lot of meetings. Like what makes funny like, how do you do that? And then here Oh, yeah, okay. He’s like Second City. Okay, got it. For A Living,

 

Nick  

I’m not a joke teller. I’m not a stand up comedian. I have tried stand up. And I have nothing but admiration for for the people who can do that so well, because it’s a craft. But for years, I did improv and I put myself out there and we failed. Every week, on stage. In front of people, I’ve been heckled and booed. And then I’ve been cheered. And some of my highest moments were in front of a live studio studio audience at the CBC studios, here in Canada. For those of you listening elsewhere. That’s downtown. We were getting, you know, standing ovations and people cheering and people crying with laughter as we finish our performance. So I’ve experienced the highs and the lows of performance. And when you do that, you also learn how to manage through and muddle through when things aren’t going well. I need five more minutes. Okay, I need to change gears I’m, you learn how to read a room. So that’s one of the reasons why I have that skill set.

 

Erwin  

Interesting. So you’ve actually learned a lot on thinking on your feet have experienced a lot of rejection. A lot of outside your comfort zone?

 

Nick  

Almost daily.

 

Erwin  

Yeah. And then you thought you build a business around this?

 

Nick  

Well, you know, it’s funny you say that. So you asked what my first business was? So just to answer that, that was a business called Creative performance that was kind of outs, consulting, and doing workshops and building shows for large corporate audiences. I had a business partner who was also my housemate in university, my friend Ron tight, who’s now has an exceptional agency, church and state and as a two three time author, and an incredible keynote speaker. So he’s a very good friend, but we were business partners for a very short period of time. That was my first business.

 

Erwin  

And then you still do a lot of these things for your current clientele, do you not in your current business?

 

Nick  

I offer workshops, but not necessarily improv workshops, there are performance aspects to the work that I do for sure.

 

Erwin  

So it was just to clarify, because Because Because I attended your workshop for free.

 

Nick  

You did I gave it as a gift. Yeah, give it as a gift. Yeah.

 

Erwin  

Yeah. So just to for the listeners benefit, because a conscious venue in Ernst and Young’s downtown Toronto tower in I don’t know what the what they call it area, but it’s probably their entertainment area for their high end clients. Yeah. I don’t know how I got invited. But it cost me nothing.

 

Nick  

Got me to split up the water there.

 

Erwin  

Yeah, lunch and dinner. We get to attend your two day workshop on how to give a TED talk in a day. Yeah. So that’s why that’s why I kind of that’s why I kind of extrapolated between the two. And even though it’s not improv it is we did we were out of our comfort zone. Oh, yeah. Learn how to give presentations.

 

Nick  

Yeah. Yeah, that’s a big part of what I do. So my current business, which is named after me, very selfishly, self centred Lee, Kindler and company, we help innovative leaders become better communicators. And I look at anybody that’s trying to grow a business, make change, do things differently. They’re an innovator. And they’re in especially if they’re a decision maker within an organisation. They are a leader. And so we have a number of different programmes, and that was our TED talk in a day programme. And that one is like a sprint. Right? You are part of it. It’s like we go through the fundamentals of how to give a communicate clearly, how to pitch how to present how to communicate, and then all the way along your building and then we got you up on your feet and you delivered a nice little crisp I think it was the test drive from your day note from your conference.

 

Erwin  

Yeah, it was. Yeah, yeah, I tried some stuff. Yeah. Yeah, I would say I was not nearly as good as the other people.

 

Nick  

You are great, you are great. And what’s awesome about that day, and I, you know, I do those all the time, I was out west working with Marc Anthony group, with their winemakers just a few weeks ago, doing a multi day programme like this. And so I work with leaders and organisations, helping them and deliver these both virtually and in person. And what’s always amazing to me, is you get these folks who are very, very quiet at the beginning, or they seem reserved, or they’ll ask me, because I do coaching we one on one, I’ll connect with them out throughout the day to try and ensure that their messaging is moving forward, it’s getting clearer and clearer. And then these folks get up and they just deliver these awe inspiring messages. I don’t know where out of nowhere. And so there’s some really great, it’s an opportunity to evolve very quickly as a leader and show people, what you’re made of and what he can do.

 

Erwin  

And just for the listeners benefit all other find leaders in leaders in many things, because I believe you have academic leader colleges. Yeah. So my kids are in public speaking classes. And I and for the first time on the report card, it was a quote from Warren Buffett. I don’t know if you know this one.

 

Nick  

No, I’ve heard of Warren

 

Erwin  

was, the quote was something along the lines of invest in how to speak? Because as smart as you are, if you can’t convey it, nobody knows. Actually, I’ve heard that

 

Nick  

I’ve heard that him say that. And yeah, it’s true, I think, look, I think you made a comment earlier about so Is that Is that why you do what you do. And fundamentally, I followed the unique ability approach to building my business, I’d actually just very quickly, I’d gone from running that business that I mentioned, to become a being part and I worked for an agency for a period that did meetings and conferences, ran my own meetings and conferences agency for more than 10 years. And while I did that, I learned about this concept of the unique ability. And I realised unique ability, by the way, comes from the Strategic Coach Dan Sullivan, I believe he may have got it from somewhere else. But that’s where I learned it from. And Dan Sullivan defines unique ability is something that you’re excellent at, and that you love doing, you may be excellent at that you don’t love doing. And there may be things that you love doing that you’re not excellent at. Right? Like I love playing tennis, not excellent at it, right. But my unique ability, I realised as I was going through that programme was I love helping people get clear. And so part of what I was doing in that old in that older business was doing that. But my current business is built completely focused on helping leaders get clear, helping many people get clear at a time. And through workshops and one on one coaching and online programmes. There’s a whole bunch of different ways that we go about it. But that to me, is really important for any entrepreneur. So if you’re an investor, what’s your unique ability? And what what are you really good at? And what are you passionate about, and then build your business on that. And hopefully, it’s on investing in real estate, because that’s what this podcast is all about.

 

Erwin  

It’s not just that because I’ve said many times on the show, like I don’t love being a landlord. But I love where it gets me. I for example, turn to turn on the lose no sleep better financial future. Right. I know my kids are taken care of. Yeah, right. That’s what it gets me. Like for example, I had a call. I literally had a text from my tenant on December 24. The furnace isn’t working.

 

Nick  

Man, that’s a bad call.

 

Erwin  

Yeah, it’s bad call. I mean, but you know, up about I’ve been under this long enough make two phone calls, a five minute drive guys goes and goes. And then Thankfully, it was a really minor one of my tents, their patio umbrella had blown up against the house and was blocking the air intake for the furnace. So is that easy. Just remove it, put it away. So the problem the release was a really, really inexpensive fix. Yeah, but you know, pain in the butt. But in the very grand scheme of things. It’s not that big a deal. Yeah, I think people deal with way worse things as an employer.

 

Nick  

Yeah. But but you your business is I mean, that’s one part of your business. But you have, I mean, you train people, you there’s a lot in your business. And so if you don’t mind me asking, What would you say your unique ability is what you’re excellent at and what you love to do? Is my guess is it’s your business is it’s in this business.

 

Erwin  

Just an observation that we’re gonna make money. If I can step back and just observe what I do. Like, for example, the conversations I have with people I find in generally know a lot more than they do. Like for example before we’re talking like I told you, you were successful. I am I, I talk to a lot of people. I have a lot of clients, I have a 400 clients. Yeah, I speak. This is like this is gonna be like the twin ADF podcast episode. Congratulations. Thank you. Thank you awesome. And pretty much everyone on the show crazy successful. So I have contexts. And for like the last two years I’ve been seeing a lot because of this, the amount of fake news has been coming out or like the sound bites and the cancelled culture like you’ve said this in the full context, right? Yeah, I always find myself saying that in the full context is that’s this, like, it’s a completely different story. Right? So I find I have a lot of context. And that seems to be my advantage over many, many other businesses and operators, is because I’ve just been around a long time, and also just my drive for continuous improvement.

 

Nick  

Right? See, I was just gonna add to that, like, not only are you knowledgeable, but you’re curious. You’re constantly, right learning, reading. I mean, these books aren’t here for show. Right? You love to read, you love to go. That’s why you’re also at a lot of the EO dance and taking your shop. Yeah. And so interesting. You’d like to provide information and you’d like to learn. And so you build a business focused on a particular niche that does exactly that.

 

Erwin  

And before we were recording about being light, yeah, I’m very well liked by my collections. Yeah. Because they’ve done very well. Right. Right. So and that, that, to me, is the ultimate reward for what I do. Yeah, right. Yeah. Yeah. Everything else was painful.

 

Nick  

This is the reality for the world of entrepreneurship is, oh, my goodness, like the lumps and pains and blows that you got to like to embody that you got to take as you go along. Hopefully, they lessen over time, or maybe you just get more calloused. Like, they’re still there. Yeah, but it’s true. It’s hard. It can be very hard.

 

Erwin  

Speaking of. It’s not all sunshine and rainbows. Oh, gosh, no, yeah. You’ve had some business. Less successes.

 

Nick  

Yeah, I have, look, I’ve been very open about this in the past, you might be able to find stuff of me sharing. So I did a talk on failure once and I shared very openly about how failure has served me. And I believe failure is something that’s serves us if to bodily expression, we fall forward, or we fail forward. So if we fall backwards, if we fall backwards, we’re further behind than we started. But if we fall forward, we’re still further ahead.

 

Erwin  

Can you hear the story?

 

Nick  

What I did? What happened? Sure. I mean, which failure story? Are you looking for? All joking aside, I’ll share it. Because here’s the thing I know, I’m joking. And I’m putting off telling the story. But we fail every day. And if we’re not failing, we’re not trying. So.

 

Erwin  

So that’s a great point. Absolutely. You’ll never, I find even myself. Yeah, so many people fail to start because they’re so afraid of failing. Yeah, just try. But everyone who’s successful has failed many times.

 

Nick  

Yeah, my brother who’s my my best friend. And my biggest fan, and I’m his biggest fan, has always encouraged me to do just say just go for it. We’ve got it. This is this is your like you’ve got what’s the worst can happen. And that question is amazing. What’s the worst thing that can happen? It’s never, it’s never what you think. So I did experience what I thought would have been the worst thing that could happen. And this was post 2008. I had an agency we’d grown it from Bootstrap zero funds zero funds put in to at its highest point, it was a four and a half million in revenue agency. We worked with some of the top pharma packaged goods, retail, and tech businesses in Canada, producing their national sales meetings, product launches, internal communication, newsletters, and all kinds of media that we would do for them. And then post 2008 pharma was a big part of our clientele. And there’s something called the patent cliff where in pharma post 2008, all the big pharma companies dropped in revenue by some of them almost in half. Oh, boy. And so our revenue dropped and dropped and dropped. And I started investing

 

Erwin  

started to just point of clarification, patent dropped as in they can no longer legally defend their products.

 

Nick  

That’s right, sell their products, or they could sell them but defend them because now a patent, generic brand of that brand will come out

 

Erwin  

and it’s cheaper to pay for the r&d in the marketing.

 

Nick  

Oh, no, no. And there’s a service that pharma plays, right. And I’m a big believer in in that model, because they’re

 

Erwin  

paying for all research. They’re bringing solutions to the table. They’re the one risking their necks,

 

Nick  

and their investors are to write their investors. So we had grown we trunk I’d put money in for cash flow purposes to keep us afloat. I did not belong to EO did not know it existed. And by the way, everything that’s happening comes next to me might have gone differently if I belong to EO, I actually think it probably would have, I’d had partnership challenges for about a year, you know, when things are not going very well and a business partnerships usually get rocky, and might only changes everything in relationship. Absolutely. And I had to offer to buy her out. At the time, we couldn’t come to any resolution. And then we hit a point about eight to 10 months later, when we were at the end of the road. And this was very daunting the end of the road, there was really only a couple things we could do, I would have to convince my wife that I would throw another $100,000 into this business to keep it afloat for a little bit of time, we would have to close the doors, send everybody home, or choose three people and try and figure out how to just work on one client. And what we decided to do, because we weren’t working well together anymore, was we were going to lose our shirts, meaning all the money we put in, we would commit to completing every project that was on the books. And we would lay off our staff and close the doors. Oh, damn. So it was about a two month process. In order to do that we had the business had to declare bankruptcy. And that was one of the worst days of my life. Now I’ve had worst days. And I’ve had lots of level sets, since that needs nothing, right? I mean, money. And the business was important to me. I’ve got a whole bunch of other priorities now and ways that I can level set things, but just just know at the time, it was terrible. And when I was done, I thought with all due respect to professional baristas, I was going to end up as a barista at Starbucks. That was my mindset. You’re that low, that low. So what did I do? I thought, Okay, I need people to know how to reach me. So I created a new URL with my name in it. I sent out an email to all of my clients to say, hey, you know this already, because we’d had to let we’d call every single client to let them know it was happening. And by the way, most of those clients said, Why didn’t you tell me? We could have helped you. Why didn’t you tell me

 

Erwin  

where were you two months ago?

 

Nick  

Well, we didn’t. We didn’t talk about the problem. We kept it to ourselves, we were ashamed, but about how we’ve managed cashflow. We were ashamed about how we lost this business and lost that business. But we still had core clients. So I created this URL Kindler and company.com. And I sent out an email to about 100 150 people, clients, saying, hey, you know, but if you need to reach me for any reason, here’s my email. Here’s my phone number. Within minutes, I got emails back saying hey, can we talk. Within days I got offers of work. And I started up a mini virtual coaching and agency. Within months, I had recovered financially because I had no overhead. And within the year I’d more than recovered and I was making a great income. But more importantly, is I started to focus on my unique ability 100% and I created a product that I thought or a service I should say. I remember sitting with my good friend Rob Dryden who is a great EOS implementer Entrepreneurial Operating System implementer here in Toronto,

 

Erwin  

love us learn us through EOC the

 

Nick  

book behind you as you know weapon but anyways, I remember sitting with him coffee for a few times, like what if I created a coaching subscription only for senior leaders to help them get clear on their messaging is like Well, yeah, I could try it. And he was very supportive about the model and ideas. And I sold one. And then I sold another and then I created programmes. And things really started to take off. That’s part one of the story. Do you want me to keep going? Yeah,

 

Erwin  

this is fascinating out of like, going down and burning flames do?

 

Nick  

Yeah, it was a pretty quick turnaround, a pretty quick turnaround. I was full of shame and embarrassment. I feel I couldn’t talk about it for a long time. And then I realised that I needed that needed to happen. I needed to go through that to learn what I was good at what it was what happened. And then, by the way, I’m going to fast forward. This is not part of the story. But when I joined EO going back to that and my First Forum experience, and we did this exercise where we shared everybody’s life experience, flying experience. I actually got choked up emotional because I heard from Lee Four of the people in my forum, the same story, or when some of them went through it two or three times. I’m like, Where was this organisation? Numbers again, 10 years ago,

 

Erwin  

anyways, you’re not alone, not alone, not alone at all. Going back

 

Nick  

to her at the beginning of when we talked about mental health, I’m going to say to the cameras that my camera there, you’re not alone. If you’re watching this, you’re not alone. You’re not alone. You’re not. And it’s never, it’s never too much. If you like it,

 

Erwin  

you have relationship problems, marital problems, money problems, investment problems, business problems, work problems, you’re not alone, you’re not.

 

Nick  

So the long and the short of it is I did that business. And then my father got very sick. And I was a solopreneur. At that point, I hadn’t scaled that business at all. And so I just took, I took a moment in my life, and I paused, I reduced my income, I made a conscious choice to turn down opportunities. And I worked with my mom and my dad during his decline, and he passed away. And at that point, I was kind of like, okay, let’s start again. I volunteered at TEDx Toronto, I volunteered the United Way, I started to go like, let’s go out into the community. Again, let’s learn and see what it’s all about. The TEDx thing was highly informative, and formative. And I met an individual there, and we started a new company, that took a lot of the things I started with this coaching model. And elevated it, we turned that into fairly successful one and a half million coaching business. Just to be clear, that’s a high margin business. And unfortunately, after about three or four years, that we once again, I experienced some challenges with my business partner, there was some trust issues that we both had. And we decided to part ways I sold my shares in that business and relaunch Killoran company, just as COVID came in. So I’ve gone through it all man, like I’ve gone through the highs of winning big programmes of building and scaling, I’ve gone through the the lows of losing my business, I’ve gone through the experience of challenging partnerships. And I’ve also gone through the experience of trying to grow a business in during it wasn’t an official recession. But during co technically

 

Erwin  

it was, yeah, all the money in government spent like crazy.

 

Nick  

And I can tell you right now, my business is thriving. I worked really hard, day in and day out to continue to build and grow, find the right team work with amazing clients, and amazing people. I’ve got strategic partners, and people that I work with that just are exceptional at what they do. And my team is exceptional at what they do. And my clients who trust me are exceptional at what they do. There’s a lot to unpack here. All right, sorry, if I went on,

 

Erwin  

no, sorry, fine. It’s just we have so much more to unpack. So congratulations on your success.

 

Nick  

Thank you. I mean, again, it’s a journey, man. I don’t look at it as done.

 

Erwin  

Now. I want some I’m trying to pull some lessons out of you. As a successful engineer. I want to pass on some lessons tomorrow to our clients. Yeah. So you’ve grown a business really quickly from nothing in the middle of a terrible time. Like it was during COVID Like a lot of people froze their budgets. labial freezing their budgets now, do ya, depending what industry but yeah, like 10 for example, though, like they’re all freezing their budgets. Yeah. Loving your planning level and letting people go? Yeah, what I want to ask is like, can you categorise like, what are the three things that you have to do every quarter or month or week to move your business forward? So again, apologies. I’ve been reading my Miracle Morning. So recency bias, is like, there’s all these things we should do. I should walk the dog, I should work, you know, like roulette, remove everything. And what are the three key things you need to do for this to start with, this is investing podcasts, we’ll keep it to business are the three key things you have to do for a business? For example, like for most investors, I would say business development, you need to be making really good connections, build really strong relationships, and really important people on your Power team, as we call it. So often your realtor, your product manager, your handy person, your mortgage person.

 

Nick  

Okay, so I may cheat and this might become four things instead of three. But I think, honestly, you have to start with your health. You’re going to be hit and we talked about this, your pummelling, right and time and again, even as things are going great, there’s curveballs all the time, and if you’re not healthy, and focusing on some fundamentals, so your morning what sort of morning Hey, what’s going on Miracle Morning miracle. I haven’t read it, but I’ve heard of it. I honestly think that taking care of yourself is first. So I know that probably isn’t what you’re looking for from a business development perspective or a business growth perspective. But you can’t manage the insanity of it, because it is crazy to do what we do. And I’m not saying that as a, hey, look what I do. I’m a marathoner or a triathlete, or look, I’m amazing. It’s just kind of crazy what what entrepreneurs do on a daily basis. So take care of yourself, take care of yourself, that’d be my first thing. So the second thing I do agree with business development 100%, one of my foreign mates when I was going through one of my tough times during the early parts of COVID, and I was struggling. He’s like, you don’t have a business if you you’re not selling anything. And so figure out your pipeline, like get your pipeline as full as possible, of potential and then qualified leads, I’m assuming that people are very clear on what their product is. So we don’t need to get into that here. As a as a key thing. I guess one other thing that I’ve spoken about quite a bit in my coaching recently, and in conversation with others, another again, my formate said this to me, because I was I remember having this lunch. And I was like at this turning point going, I felt like a turning point like, Oh, I’m sort of keep hitting this brick wall. You know, people aren’t meeting people. And he goes, he said, Have you asked for help? I said, What do you mean? He goes? No, ask them for help. I said, I don’t understand. And he’s got a several businesses, very successful entrepreneur, because I asked my my clients, and these are very successful leaders for help all the time. That’s how I get stuff done.

 

Erwin  

She give an example of the help I asked for, or like an example from one of our clients. Because I have a big ego. I have travelled?

 

Nick  

We many of us do. Yeah. Yeah. And, and I know, there’s an aversion to asking for help, especially in the entrepreneurial side of things,

 

Erwin  

because generally, we’re very driven. And we

 

Nick  

know that we know the answers, but we don’t

 

Erwin  

we least put on the face that we know all the answers.

 

Nick  

So So what’s an example of this? An organiser, I’m not going to use names, because I want to be very respectful of the people that I work with. had an idea I had an idea, working with an amazing colleague of mine, that we could come up with a new solution that would help organisations in you know, how I work with leaders and or in groups of leaders, one on one and with groups to get really clear on their message. Well, organisations suffer from this in a big way. I mean, marketing is not talking to product products, not talking to HR, HR is not talking to whatever it is. It’s just, it’s siloed communication. We’ve seen it time and again, and part of it is there’s translation issues. Sometimes there’s just barriers in general. So I had this idea, like, what if we took this idea of like the one on one, but we figured out a way a process to, to help organisations across. And I worked with my friend and colleague on developing a process. And during one of my coaching sessions with one of my clients, who is brilliant leader, and just such a lovely person. I said, I’m hearing that you have this problem, I might have this solution, we’re developing this thing. Can I ask you, would it be helpful? And can I help you? And can you help me just if I share this with you? He said, Yeah, that’d be great. Because two things happen, right? I might be able to help you. And you might be able to help me. But number one, people want to help. Like, if I were to call you, I mean, you’d need to know me. But if I were to call you to, hey, when can I get your help on something? I’ve got this idea. I want to build a podcast studio like this. How do you do that? What would you say to me? Not now. Right? Like, there’s a part of you that would go Yeah, I I’d like to help like, because I got this I have knowledge. You like to have knowledge and you’re this one of your knowledge and sharing the knowledge. That’s your, as we talked about earlier, your unique ability. So I share this model. He’s like, this is really interesting. Can we talk about this with my team? So we go and have a meeting with the team? Proposal, large project? Because I asked him for help. Right very, very. I didn’t go in asking for the business. I went and asking for help.

 

Erwin  

So I’ll just the real estate analogy is for my clients, especially if they’re looking for to find partners within their community or their family to help to join them in their real estate journey is often tell them like, go ask them to go to coffee. And the help would be, can I share with you what I’m trying to do? Right? Yeah. Does this make sense?

 

Nick  

Yeah. Absolutely. If you’ve got a new product or service, if you’re unsure about how to approach something, it’s why yo exists going back to this forum. And again, it’s you asking for help. In fact, today, I’m doing a presentation on a new product and service, because I don’t want validation, from my my colleagues to say, what would you do differently? How could this work?

 

Erwin  

Alright, we’ll move on number four. What’s that? You said? There’s four things.

 

Nick  

I said. Take care of yourself. Yeah, a pipeline of business. Ask for help. Yeah, I guess it’s not like a plan this cuz I’m gonna walk away from here. But oh, I want to say this. But but for

 

Erwin  

Dorian, no one gets their questions in advance. Yeah. So so.

 

Nick  

So honestly, I would say systems and processes, like everything can be systematised and put into a process. And I’m not a systems thinker. Although my friend and colleague told me the other day, he thought I was really good at it. And I was like, I’m more of a creative, you know, person, I like to come up with new ideas. But when I start to see people doing stuff, like my team, and if it’s taking them an amount of time, all I can think of is, what systems can we put in place? What tools can we potentially purchase? How are other people doing this faster? And that’s not in an effort to be ultra profitable. It’s an effort to make life easier, because life’s better when it’s easier. Yeah, so I would say systems and processes, why, you know, Eos, I’m a believer in, I like to have my coaching has a model, my, my whole book that I wrote is all based on core principles and a model that we follow. So I’m a big believer in using these models to simplify our lives.

 

Erwin  

That’s a great segue in your book, what’s it called?

 

Nick  

Impact, simplify, transform, performed pitches and presentations? Where can people buy it? Amazon, Barnes and Noble, every online retailer, you can go to impact book.ca. And you’ll find videos and testimonials and access to where you can buy

 

Erwin  

  1. Excellent. I have a copy not here.

 

Nick  

Yeah, I should have brought another copy. Sorry, I should have. So I could be doing this. But yeah, it’s available. Were all at all online books, bookseller, sellers, and

 

Erwin  

all over the world. Fabulous. Now, this is an investment show. And we’re running that time machine over time. Thank you for your patience. Oh,

 

Nick  

I’m loving the conversation. I love chatting with you.

 

Erwin  

We can honestly keep you for another three hours minimum. This is an investor show. And before we’re recording, I said you’re successful. We are We are quite well off. Why would you want to invest in real estate? Because that’s why that’s like some of the conversations you had. You’re interested in investing in real estate. Yeah.

 

Nick  

And you and I have chatted about this before the show, and I know some of your teams and working with and looking for, for investment properties.

 

Erwin  

Find by the way.

 

Nick  

Yeah, yeah. So why? Why am I interested in it? Because why should somebody be that’s a very common

 

Erwin  

question for the show is like, why why do this? Why be an investor in real estate? Because it’s not. It’s not it’s different for you?

 

Nick  

It is, it’s a total departure. And as you know, I’ve been anxious about it nerve, it’s nerve racking for me, because I’m a hands off investor, I like I’m like, let it sit and grow kind of, you know, minimum x number of years kind of thing. And that’s not that this isn’t bad, but there’s a little more stuff to do. But why am I interested in why why would I recommend it is, first of all, it works. I mean, it works. It has significant growth opportunity. It actually, if you can find the properties that cashflow for the amount or less, for example, if it even if it doesn’t, for the amount of joining a good club or a gym a month, you can have a growing asset. Like that’s, I don’t know, you know, I’ve been looking at my different properties with Chris and 120 300 bucks, like my wife and I paid more for that for a gym membership. And you own a property. And then at the end of 10 years, 15 years, 30 years, you can liquidate or you can take the the income from it and buy more like it’s just it’s it’s a pretty great model. So if you’re looking for why would I do it? Why would I recommend it? Because it works

 

Erwin  

What keeps you from doing it sooner? It’s a rhetorical question because I know you’re really busy.

 

Nick  

Well, I’m what keeps me from doing more of it. And sooner is time, and education. Like, I think, I think your podcast and all the videos that you do, and I think it’s important work. You know, I say this to a lot of people about everybody has a purpose. And if people can understand that this isn’t a frivolous thing to do. It’s not a throwing money at something and hoping it sticks kind of thing. It works. But it’s time. The reason I haven’t done it is time and knowledge, like just education

 

Erwin  

can help you with that. Yeah, yeah. And you have been happy. As I figured I was talking to yesterday, I was explaining that there are businesses basically, this to set up the franchise systems are all in place. The people are on place. You just need to put up the money and get a mortgage.

 

Nick  

Yeah. Yeah. Yeah, it’s brilliant.

 

Erwin  

So we try to do what we try to do make a brilliant model.

 

Nick  

It’s a brilliant business. Seriously, kudos. Like, I think it’s amazing.

 

Erwin  

It’s just everyday for us. So it’s kind of funny, because like, every time what you mentioned before about, like reading the news, too early in the day, I did that for a long time reading the news too early in the day. Yeah. Because especially now like leaving headlines always Ukraine.

 

Nick  

It’s depressing. And I think we should know it. But it’s when should we know it? Anyway? Sorry.

 

Erwin  

First thing in the morning? Yeah, yeah, exactly. set the tone for the day. Yeah. Yeah. Just because I consumed so much. I’d actually argue I consumed too much. Because I say that because it gives us feeds into my analysis paralysis. And honestly, if I were just doing more business stuff, more investing stuff in that time, rather than just trying to be so knowledgeable, and probably make more money. I know this, because I’ve blogged a lot like my previous mastermind, which is all real estate investors. Yeah, I found a new lot. Let’s say I knew a lot more. But economics needed. Definitely spent more time. Yeah, understanding of what how the world is working in monetary policy, almost What’s complicated things there are they’re investing just killing it. So they have larger portfolios that like, you have a larger portfolio, you’re going to outperform me? Versus I’m just like, yeah, just keep consuming. But yeah, but then kind of, to your point earlier, you have to get started. So I always suffer from like, as this right thing does the right thing.

 

Nick  

And that is me, too. I think if you can do if there’s a way to help people remove that analysis paralysis, which is exactly what I suffer from, especially in getting into this kind of investment. It’d be amazing,

 

Erwin  

right? Awesome. I’ll share some stuff with you. I had to give a webinar this Friday on a macro economic update in some of the research. So it’s like, Oh, I’m not ready for this. And then so this morning, German miracle morning, I got up early. I was like, Oh, I create my outline, like, took 20 seconds. Because I’ve researched this stuff

 

Nick  

all the time. This is what happens with our brains, too, right? We’re thinking this happens to me all the time. Like, Oh, I haven’t been I gotta do this. And then I’m like, oh, oh, I obviously have been thinking about this.

 

Erwin  

Yeah, yeah. Yeah. I’ve been thinking about for a long time. But yeah, all signs point to owning hard assets. Did you know we had 800,000 new people in Canada, in the last 12 months? I did

 

Nick  

read that. And I also read that it’s only going to go up based on forecasting. Yeah. I was gonna say, I think that’s exciting. And from for a whole bunch of reasons.

 

Erwin  

I think it’s exciting for them. Because I think people always forget to reach new life, I find a lot of Canadians forget to be grateful for what we have. That’s a lovely thing about travelling. You travel. Like I was just in Dominican Republic, for example. Oh, nice. Oh, that’s lovely. Yeah. But oh, boy, is Canada nicer.

 

Nick  

Absolutely. Yeah. Yeah.

 

Erwin  

My point being is that like, climate change is a real thing. And it’s affecting many countries really badly. Which is drives probably reason why people want to come to Canada. Yeah, right. It’s only going to keep going. Absolutely. Yeah. Right. Nick, any final thoughts you want to share? I asked him any questions. So

 

Nick  

you know, you’ve got asked some great questions. I’ve loved chatting with you. I do one more for you. Okay, no, absolutely. Shoot, man. Shoot, shoot.

 

Erwin  

I forgot why we were on the topic. I study philosophy of many things. No, no, again, just spending way too much time in my head and studying stuff. Yeah. And so one of the business philosophies and observations that I’ve noticed is that some people, rightly or wrongly, because someone fails in their business relationship thinks they’re a bad person. A good example in the real estate industry is property managers. They the turnover as high as in those law companies don’t stick around. And so many so often their clients, that’s a bad person, but tennis would say that’s a bad person. And what I see as an outside observer is they tried their best. This can do it It’s a tough, tough business. Yeah, right? I don’t know if that necessarily makes them an evil person. So we were talking about earlier before we’re recording is like, Are you a bad person, if your business

 

Nick  

fails? Well, if, if that’s the case, then I’ve been a bad person. For many years,

 

Erwin  

we’re gonna cut up, we’re able to keep this podcast short.

 

Nick  

And here’s what I actually do know, is I’m not a bad person. In fact, I live my life with core values, and behaviours. I treat people with respect. And when I don’t, I apologise. And because I’m human, I’m fallible. And this isn’t me kind of giving myself a pat on the back, it’s me pointing out that we fail all the time, we talked about failure earlier in our chat today, I don’t think that if somebody’s business fails, they’re a bad person, they may have made mistakes, mistakes, does not equate with bad mistakes, equate with error. And perhaps Miss judgement, if they’ve made a series of decisions. Knowing that the outcome is going to cause X or Y, impact the lives of people take money from people, then you’ve got a values issue. But if you’re operating on on, trying to be true to your values, and the world somehow presents these challenges that you are not able to overcome, it does not make you a bad person. It just doesn’t mean your human life is long. It’s a marathon, not a sprint. And in that marathon, and I’ve done four of them, it’s painful. The training is hard. There are times when you’re doing it, that you’re just think you’re gonna, you’re gonna die, you’re paying in pain, but keep going. And you know, in my morning routine, often the last words I write the end of every session is keep going.

 

Erwin  

So normally, I would say we ended there. But just to give context, why where the question comes from, is because anyone has been investing in the last few years. Who started especially at the start in last two years, they’re probably hurting their message likely or not performing well. Stock market, crypto real estate, anything, anything, anything. Yeah, but you maybe he’s doing well, no. And my point is, doesn’t mean they’re a bad person.

 

Nick  

Gosh, no, no, no. Your business is an entity that you drive. Your Business shouldn’t drive you. You drive your business, and you might have other people that help you drive it. If your business is struggling, you are not the business. Because that’s really what I’m trying to get at. You are not the business, it may feel like it. It may feel like, Oh, well, I’m gonna become a barista, which is what I thought because that business was in the toilet, and I’m a bad person for failing. You are not. You are not the business. And the sooner you learn, anybody learns that you are not the business, the better. Don’t get me wrong. It’s hard to do. It’s an I haven’t mastered it. I’m working on it every day. But cash flow and revenue and all these challenges and hitting targets or missing targets, whatever it is. That’s not you. You is the relationships you have the people who love you, love you not for the cashflow. They don’t love you for the revenue. They love you because you’re a good person, because you’re kind because you do nice things because you’re funny, because you’re a good father, you’re a good husband or you’re a good wife, whatever it is, whoever you are, they love you for you not for your business. And that that’s what you should be carrying forward. I don’t know if that answers your question.

 

Erwin  

I don’t think it’s perfect. And I’ll just add to that, you know, it’s been two three years of you need a larger sample size. If you think you’re a bad investor. Now, let’s revisit you in 10 years. Right? Yeah, that’s

 

Nick  

a good point. Yeah. Yeah. Awesome.

 

Erwin  

All right. Thank you. How’s you go, Nick? Awesome. Thanks so much for doing this.

 

Nick  

Thank you, man. Great chatting. Awesome. Thank you

 

Erwin  

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

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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…

If you’re interested in being a successful real estate investor like those who have been featured on this podcast and our hundreds of successful clients please let us know.

It is our honour to give back and educate others on how we build cash flowing real estate portfolios using all the best practices shared on this podcast, from the lessons of our hundreds of clients and of course our own experience in owning investment real estate.

If you didn’t know already, we pride ourselves on being the best of the best real estate coaches, having the best property managers, contractors, handy people, cleaners, lawyers, accountants, everyone you need on your power team and we’re happy to share them with our clients to ensure your success. 

New investor or seasoned veteran investor, we can help anyone by providing our award winning coaching services and this isn’t all talk.

We have been awarded Realtor of the Year to Investors in 2015 by the Real Estate Investment Network, 2016 by the Canadian Real Estate Wealth Magazine and again in 2017 because no one told the judges no one is supposed to win the award twice but on merit, our peers deemed us as the best.  In 2018, we again won the same award by the Real Estate Investment Network.

Hopefully being the most decorated team of Realtors in Ontario will make you consider us for your first or next real estate investment.  Even if you don’t invest in our areas, there’s a good chance I know who would be ideal for you. 

I’ve been around for a while, some Realtors are talented at servicing investors there are many with great ethics.  The intersection of the two, talent and ethics is limited to a handful in each city or town.

Only work with the best is what my father always taught me.  If you’re interested, drop us an email at iwin@infinitywealth.ca.

I hope to meet you at one of our meetups soon.

Again that’s iwin@infinitywealth.ca

Sponsored by:

Infinity Wealth Investment Network – would you like to know how our investors returned 341.8% on positive cash flowing real estate over the last five years? On average, that was 68.4% per year.

Just imagine what winning in real estate could do for you.

If you would like to know how we did it, ask us how by calling 289-288-5019 or email us at iwin@infinitywealth.ca.

Don’t delay, the top markets we focus in are trending upward in price, so you can pay today’s price or tomorrow’s price.

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

Erwin

Hamilton, St. Catharines and Toronto Land Development, Real Estate Investor, and soon to be builder.

W: erwinszeto.com
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What’s Working, Not Working In 2023 With Elizabeth Kelly

Welcome to another episode of the Truth About Real Estate show, the #81 Business podcast per iTunes, where we focus on bringing you true experts and masters of their craft!

We have a great guest for you today, real estate coach and educator Elizabeth Kelly.

The term coach is used lightly these days… I see even folks with 1-2 properties as side hustles call themselves coaches, but Elizabeth Kelly has a bit more to her resume than that. 

Her own property management company manages hundreds of doors. Also, she was a full-time real estate investing educator at Rich Dad Canada, having personally taught a couple thousand investors, including many of the influencers and coaches you see today on social media. 

Today we touch on a couple of subjects, such as investment in real estate education and some of the different options out there as there are more than ever, but some offer better value than others.

Elizabeth shares about her career and investor journey to arrive at where she is today. Her strategies when she started out investing in 2008 are very different from how she invests today. 

My intention for you, my 17 listeners, is to see for yourself how a professional investor invests at different stages and learn lessons to help you avoid mistakes and make more money.

Then we will offend many when discussing what’s working and not working in 2023. This may shock you, but many of the fad investments getting a lot of hype won’t work in 2023. Make sure to listen before investing in any coaching, courses, or property.

2023 will be a fascinating year, and here at iWIN real estate, we will be arming our community with the best information possible. 

Starting with our free webinar on how to sell a tenanted property for maximum return on January 17th… 

Followed by our iWIN in-person networking meeting on Saturday morning Jan, 28th, where my team and I will share our bold predictions for 2023 for our target investment markets.

We will also have a REIT in the house, Lawrence Raponi of Equiton, with a brand new presentation to explain how professionals buy apartment buildings, from finding deals to the numbers they need before even looking further into.

Learn how the professionals invest or at least how investing in a REIT works, including how to cash flow from day one. 

If you’re on my email newsletter, you know how to register. If you are not well, that’s just silly. 

Go to www.truthaboutrealestateinvesting.ca, enter your name and email, and you will receive an email when we have events, and new episodes of this show are available. 

New to 2023, we will produce many more free educational videos and podcasts. Please let us know if you have suggestions for topics you would like covered.

I’m pleased to introduce my friend, Elizabeth Kelly.

Please enjoy the show!

 

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 FREE Online Training Class.  We will be back in person once legally allowed to do so, but for now, we are 100% virtual.

No need for you to reinvent the wheel; we have our system down pat. Again that’s  www.infinitywealth.ca/events and register for the FREE Online Training Class.

 

This episode is also brought to you by www.stockhackeracademy.ca, where everyday real estate investors learn the best practices in stock investing to earn cash flow in about 15-30 mins per day from their mobile phones. After real estate, Stock Hacking is the next best hustle, as you’ve heard from many past guests on this show. Among our students last year, 31 trades were shared with them. 30 were profitable for an over 96% success rate and 12% return on capital. I will be giving free demonstrations online, very similar to the one I gave my kid cousin, a full-time musician who just made a 50% return in 2021.  Past, of course, does not predict the future, but if you’d like a free demonstration, go to www.stockhackeracademy.ca in the top right and click FREE Demo.  At the demonstration, I’ll have special bonuses. We do not advertise publicly for all my favourite listeners, and I only have two more demos to give in the next few weeks.

Don’t delay www.stockhackeracademy.ca, what I consider the future of side hustles with real estate so unaffordable for many.

 

To Listen:

Audio Transcript

**Transcripts are auto-generated.

 

Erwin  

Hello and welcome to another episode of the investing show. My name is Erwin Seto the fourth time winning agent to investors hosted the podcast, which is this one, the number 81 podcast for iTunes and all business are focused on bringing you true experts masters of their craft. And we have a great guest for you today in real estate coach and educator Elizabeth Kelly. The term coach has been used very lightly these days. I see folks with one two properties, a 12 months experience. Some even with like longer experience, but they have like one property as a side hustle, and they call themselves coaches. Kelly has a bit more to her resume than that her own property management company manage hundreds of doors. Her own portfolio is very significant. She was a full time real estate investing educator every state Canada Having personally taught a couple 1000 investors including many of the influencers and coaches you see today on social media. Many of them offer products that they learn. For example, rental rental was a hot topic and rich, rich dad. You see today, several wholesalers and rent to own experts that Lizabeth personally taught today we touch on a couple subjects such as investment in real estate education, and some of the different options that are out there. And there’s more than ever. Some do offer better value than others. So we talk about that Elizabeth shares about her career as an investor journey to arrive at where he is today. His strategies when she started out back in 2008, very different than how she invests today. Her goals are different the markets different. I think it’s something that’s really important to investors today. As always, my intention for you my 17 listeners is for you to see how a professional investor investor is at different stages of their life lessons that you may learn so you may avoid mistakes and hopefully make even more money and we will offend many when we discuss what’s working and what’s not working. This may shock you many sad investments getting a lot of hype that will not work in 2023. Make sure you have listened before investing in any coaching or courses or even buying property. 2023 is going to be a fascinating year and here at Iowa State. We will be arming our community with the best information possible. We will be doing sharing the free webinar. We have one coming up soon how to sell a tenanted property for maximum return on January 8 17, followed by our Iowan in person networking meeting on Saturday morning, January 28. Tonight, Saturday morning, I think it’s 29th 28th written whichever it is the last Saturday of January. My team and I share our bold predictions for 2023 For our target investment markets. And we have a real estate investment trust in the house. Whereas propone of Equitana will be giving you a brand new presentation to explain how professionals buy apartment buildings, how they screen them, how they find them the numbers they need before even looking further into information. I know there’s a lot of courses and coaching that’s being offered out there. So here we’re giving it away for a very nominal fee from a very serious professional that yeah, and the second time they are a real estate investment trusts as in they are they’re also regulated on their Ontario Securities Commission. So these guys are legit. So learn how professional invest or at least learn how investing in a REIT works, including clash cash flowing from day one. If you’re on my email newsletter, then you already know how to register. If you don’t go silly. Join the 10,000 Plus hardworking Canadians already on our newsletter, you can go to www dot Koozai real estate investing.ca. Again, that’s www dot truth about real estate investing dossier. Enter your name and email and you will receive an email when we have events and new episodes of the show available. New to 2023 we will be producing a lot more free educational videos and podcasts. So if you have any suggestions or topics you’d like to see covered, please let us know. You’ll see again on our email newsletter, we’ll let you know we have new pieces of educational content available. We’re doing a lot more YouTube. Our YouTube channels also call it truth about real estate investing. So without further ado, it’s my pleasure to introduce you to you my friend was with Kelly. Hi Elizabeth. What’s keeping you busy these days?

 

Elizabeth  

Not too much. had a fantastic holidays. Lots of time quality time with the family enjoying the weather. How about you what’s going on with you?

 

Erwin  

Anymore holiday I’m actually we’re actually going on holiday next week. I think you know that right?

 

Elizabeth  

No, but tell me where are you going?

 

Erwin  

Just cruise. My daughter was sick before the holidays, so we weren’t able to fly. Gotcha. So we had to rebook everything for this coming week. Gotcha. Yeah, so I haven’t really completely decompressed yet from 2022.

 

Elizabeth  

Yeah, you had a crazy busy year, that wealth hacker conference was awesome. Thank you. I really enjoyed that.

 

Erwin  

Appreciate it. Yeah, we’ll do something similar. I mean, that we’ll talk about at lunch. Yeah, that’s some brainstorm ideas. Sounds good. Yeah. Our vision for 2023 is a bit more balance.

 

Elizabeth  

That’s a great vision to have. And I think there’s a lot of people who are in that same situation. I think, you know, the way we started 2022 In the beginning with you know, it was so hard to find properties and everybody was kind of buying, buying buying and then you know, the the steep decline started a couple of months in and I think people got to the end of the year. I think people are kind of worn out right now. And people are maybe a little uncertain about what’s coming and, you know, rethinking things. And it takes a lot, I think to admit that you know, the strategies or the things that you were doing or the way that you were thinking before, they’re not serving you anymore. So what does that new game plan look like? And I love that you’re, you know, one of the front runners in terms of, hey, we need to revisit what we’re doing because it’s not working for us.

 

Erwin  

Because for example, we’re going to talk about it is like, where your career like day job career, I don’t know what the term is, like your day job career, talk about admins, as well. And then just even what we’re seeing, I don’t think anyone expected the recession to come this quickly. And just like you’re saying in how the real estate market behaved, you know, like, beginning of the year, like no one can hire anyone. Yep. And now we’re seeing what was it Salesforce isn’t just announced 10%, layoffs and Amazon? Yeah, Amazon is 18% I believe it is. And having dinner with someone who works in a mid level pharma company, they’re gonna lose 30%. So jobs are one like we haven’t had jobs at this much risk. Since 2008, I think,

 

Elizabeth  

yeah. Here’s the interesting thing that when I was driving here this morning, I was listening to the radio, which I don’t do very often, because I’m not a big kind of listener of, you know, that kind of stuff. But what they said was that the number of jobs that were created in the last little while was much higher than they anticipated. So now they’re saying that’s probably going to lead to a larger interest rate hike, because obviously, inflation is not as much of a problem because of all these jobs that have been created. So it’s almost like this crazy, you know, on one side, we’re hearing all these companies and you know, layoffs and everything else. And then they’re like, Oh, what the actual stats, say this? And you kind of go like, where’s the balance? How do you know what to believe? And then at the end of the day, what you’re left with is, hey, these next interest rate hikes are going to be bigger.

 

Erwin  

I’m fascinated by this stuff. Yes. My thought is that like, how much job losses is enough? Because like, the US Fed notes were just released yesterday. And so people were poring through them. I’m not that detail oriented. So as read the news on them. And that was what this was what the meeting notes with Jerome Powell, and all the other staff, the US Federal Reserve, was that jobs are still too high. There hasn’t been enough losses yet. Oh, so they’re going to either have more raises or hold rates longer than they expect. Yeah. Right. Like, I can’t, I can’t believe that someone’s job, well above our pay grades to decide how many job losses is enough.

 

Elizabeth  

And at the end of the day, those are really people there’s a families that we’re talking about. And that to me really speaks to why I could never be an employee again. You know why I could never I mean, it’s one of the many reasons why I’d never want to be an employee again. But literally, I could be doing an outstanding job, I could be amazing at what I do. And my livelihood is still dependent on somebody else’s decision, somebody else’s whim or what the numbers say,

 

Erwin  

I have this friend who’s a C level executive, for a big company. So they have like board meetings and stuff, whatnot. So I’m trying to plan vacation around their schedule is really difficult. Right? For example, we looked at cruising for a certain date. So to have a cruise that worked for their schedule, cost 50%, more than the week after. Wow. As a group, we’re like, I don’t think any of us are willing to pay an extra $2,000. We love

 

Elizabeth  

you on all but we’d love you just to have your company. The rest of us are paying for it. Yeah, exactly.

 

Erwin  

So same thing why lofts investors are investors is to be free of these sorts of whatever on our time, like loss of control of our time. Yeah, I have a family member who’s in government, federal government in Ottawa. And they were just recently announced they’re required to be back in the office two to three days a week. It was actually funny conversation because she was like, Aki believe it. And like, so my question was, what was it before the pandemic? Oh, we just mean the office five days a week. Like, oh, so you went from five days a week, two to three days a week? That’s pretty good. Yeah. The world does not last, at the end of the world.

 

Elizabeth  

No, but I mean, I suspect you and I were talking earlier, you know, the idea of going back and working for someone else and having to be sitting, you know, at your desk in the office for 9am Every day. For a lot of us as real estate investors. That’s not something that we value or that we want to write.

 

Erwin  

Right. Something I want to cover was you and I are real estate investors. But we also both have day jobs. Is that the right term? would you what would you call it?

 

Elizabeth  

See I don’t think as a coach, I don’t do it because it’s a job I do it because I love it.

 

Erwin  

Okay, you have a career

 

Elizabeth  

it’s my like, passion project. It’s something that I never get as much fulfilment from achieving my own goals and doing my own things as I do from helping other people achieve theirs and to know that that ripple effect of you know someone doing their first deal or someone that You know, securing a property that’s going to provide good cash flow and get them one step closer to leave their to leaving their job. That makes me way more excited than anything I could do for myself.

 

Erwin  

Do you want to preface that by saying, not everyone can do that? I don’t know you’re in a special position. Yeah.

 

Elizabeth  

I don’t know that. I would say not everyone could do it. I think theoretically,

 

Erwin  

specific, specific to what you do. Oh, yes.

 

Elizabeth  

Okay. Yeah, that that makes sense. Because one

 

Erwin  

thing I don’t like, and you and I both agree on this policy is putting putting words in your mouth is like, what that’s being sold out there. Like all these marketing things, like quit your job. Pursue your passion. You never know, working on a day in your life type thing. Yeah, right. Okay. So then the example I often give is like restaurants and gym owners, they may love it. Those are the two businesses that banks don’t lend to. for a reason. Yeah, she’s at the highest default rate. Yeah, or the highest failure rate. So yes, you can work in your passion, you may not ever be able to stop working your passion. Yeah, you can work stop working your passion, because you have your portfolio. Yeah. But

 

Elizabeth  

honestly, my portfolio gave me the ability to follow my passion. It’s not like I follow my passion because of like, Do you know what I mean? Like, my passion is what makes me really happy. My portfolio was like my fallback. And no matter what I was doing real estate helped me build my net worth to the point where I did have the freedom to choose what you know how and what I wanted to do. And I had some health challenges in 2022, they were unexpected. And my passion gave me the ability to be flexible, so that, you know, there were times where I was, you know, spending more time in bed than I had thought or I was, you know, I had a couple of surgeries that I was recovering from, and none of this was expected or planned. It wasn’t like I started the year and said, I’m gonna go on a health journey. But it also gave me the money to hire the professionals to help me recover quickly. And it gave me the ability to hire people to support you know, a positive mindset and all those other pieces that go into it. It’s not just your physical recovery, it’s your mental recovery, because you go through life, and you just kind of assume that your body is going to be there for you and your mind is going to be there for you. And then you reach this point in kind of middle age where you go, you know, this stuff isn’t forever.

 

Erwin  

Aren’t you younger than me?

 

Elizabeth  

I don’t know how old you are. We won’t get into it. Middle Age, like the 40s middle age, because most of us are gonna live to be 80 to 90 No, we’re

 

Erwin  

living to 105 Okay, tofu for lunch, fantastic genetics,

 

Elizabeth  

and you take good care of yourself. That’s awesome. The general population what is the average age like 84? Something like that? Is the average lifespan.

 

Erwin  

We is midlife crisis, like now, which for us that?

 

Elizabeth  

Well, I wouldn’t say I’m in a midlife crisis. I say that.

 

Erwin  

You said midlife. But yeah, no. But like so then like if we’re going to have a crisis would be nourished? Yeah.

 

Elizabeth  

I mean, we’re going we’re a long way from real estate now. But I think it’s very common for people in their 40s to, you know, you wake up in the morning, and you don’t jump out of bed anymore. Like, you know, your knee hurts or your back hurts, or this hurts, you know, and you don’t have the same energy that you did. So I think it’s very common for us to start thinking about what is the next half of my life look like? You know, because when I was younger, I didn’t know what I didn’t know. But now, and I’m assuming, you know, you have ageing parents as well. So, you know, we’re sort of confronted with this idea that, you know, this is what my parents are going through this is what they’re dealing with. This is the mortality, how am I going to plan and prepare so that I’m not living that? Because my husband and I, we don’t have kids? So we can’t say okay, well, our kids are going to take care of us. Because they’re not, we don’t have any. So we need to make sure we plan and prepare better so that we don’t, you know, end up dumped in a home somewhere. With no assets and no one to care for us. You

 

Erwin  

bring up a good point. Because when I speak to when I speak to an investor for the first time, often they they’re very novice, and they haven’t planned. Right. So now they’re looking for how to get to some sort of form of financial security, financial freedom, financial peace, product, unfinished piece versus me, I have been constantly planning.

 

Elizabeth  

But you’re you You always say that, you know, you’re a worrier, right and you have anxiety, so that planning piece goes with it. But there’s other people who are worriers and have anxiety, and they do what I call the ostrich manoeuvre, which is where they just stick their head in the sand and hope that everything’s going to work out. Government will take care of them. Yeah, but I think we all pretty much have a good idea at this point that we have to take care of ourselves. And quite honestly, I love that I have the power to do that. That the locus of control is within me and I don’t need to rely on anyone else. Okay,

 

Erwin  

so let’s get into the journey. How you got there? Yeah. What did you do for a living for real estate?

 

Elizabeth  

So I had a few different careers. I have a degree. I have a science degree in kinesiology. And then I don’t think I knew that. Well. I do very little with it unless somebody gets sick, and then I take a lot of attention. And then I have a post grad certificate in sport administration. So For a long time I did I worked for not for profits, and I did fundraising ran charity events, I worked for United Way and for the MS Society and that kind of stuff. And then I moved into I got my insurance licences and I worked for State Farm at the time. And I did home auto and life insurance. And then we had my husband and I built a portfolio. And he was finding it to be too much managing the properties we had and working full time. So we made the decision that that I left my job and I started managing the properties full time and grew the business. And then he left his job in, I think it was 2014 2012, or 2014. I can’t even remember at this point. But he left his job. And then we were both working full time in our property management company. I also got my mortgage licence. And I was working with investors to help them secure funding and private mortgages. And then my husband got sick in 2017. So I had to give up my mortgage licence and get right back into full time property management, then I was teaching for Rich Dad for eight years as well, because you started for teaching for Rich Dad, yeah, 2012, I taught three courses for them. And I loved it, I absolutely loved the opportunity to get out and meet with new investors and talk about their journey and help them plan their future. And then I saw how much a year later, two years later, the same students would come back and connect with me or they messaged me on Facebook. And they were struggling. And they sometimes they hadn’t even done one deal. They didn’t know where to begin, there was all this theoretical knowledge out there. And they didn’t know how to take the points or the parts that were most relevant to them, and work that into a plan that was going to help them achieve their goals. Always the gap between theory and application. Absolutely. And I think that’s one of the biggest challenges for new investors is that there’s so much information now,

 

Erwin  

like you could argue too much. Yeah. It’s really terrible.

 

Elizabeth  

And when you’re starting out, you don’t know what’s good advice. And what’s bad advice, right? Same as you don’t know, like, who can you trust? Or who should you put on your Power team? Because you learn some of those lessons the hard way.

 

Erwin  

And also just different, like your portfolio is extremely different than mine. Like it’s everyone’s values, goals, resources is totally different. Yeah. Right. And that’s one very specific and very custom I think everyone’s playing it should be very customed. To them.

 

Elizabeth  

Yes. And that’s one of the things I was talking to one of my clients on Wednesday about it actually was that because there’s so many opportunities, and there’s so much flexibility in real estate, that everybody’s journey is going to look different, but it makes it look the same. But that makes it that much harder to figure out, what should my journey look like. And when you don’t know what you don’t know, it’s really hard to sit down and say, Okay, I’m not making a decision on this property. Because I’m missing, you know, these pieces of information. So all I need to do is get these pieces of information, and then I’m going to be confident in making a decision to move forward. So you get some people who make decisions, because they just get so frustrated that they’re like, I just have to do something, you know, I set these goals, I have these numbers, and I just better do something because otherwise I’m a failure. And then you get these other people who are like, I’m so afraid of making a mistake and being a failure, that I just can’t make myself do something. That’d be like every day. But I don’t think that is you. I think that that’s maybe the way you see yourself, but I look at you and I don’t see that. But I see a lot of decisions made to get to where

 

Erwin  

you are, that’s mostly cherry.

 

Elizabeth  

But you have to agree, right? You guys are a team. And this is another challenge that a lot of investors have a lot of my investors that I coach our couples, because it’s very challenging to go from, you know, I have a job and you have a job. And we spend eight to 10 hours a day apart. And we need to come to a consensus on like, how to manage our household. And then all of a sudden to be like, Hey, we’re business partners. Now we need to have consensus on how we run our business and how our finances interact. And that’s a very different journey than Hey, I’m doing this by myself. And I’m the only one who I need to, to make happy,

 

Erwin  

short answer. It’s complicated. It’s always

 

Elizabeth  

complicated. Life is complicated. But it’s good. It’s beautiful.

 

Erwin  

So where did you start putting in real estate? Like, did you just start investing on your own? Or did you or in combination with taking courses or

 

Elizabeth  

so I met Emma in 2005. And he already had a couple of investment properties with his business partner. And the more we kind of talked and the more I saw what they’re doing, the more I wanted to be part of it. So I bought a couple of condos as my sort of first investment properties. And we were doing I mean, this was a long time ago, we were doing duplex conversions in new markets and, you know, buying single family homes and you know, doing rent to owns and those kinds of things. So in 2008 we started taking courses with Rich Dad, and yeah, it was actually because then we turned around and bought a whole bunch of buildings really quickly. And it was amazing, like some of the people that you know, we took our courses with and we connected with like Denise and Stuart McPherson. I mean, we’re still friends with them 15 years later and we met them at Rich Dad, you know, so yeah, some of the the networks that you build and the people that you meet are tremendously beneficial years in the future, even Michelle And might go check. I mean, I had some challenging days building a property management company, and Michelle was my go to phone call, like these people that you place in your network, these people that you continue to build relationships with, they can be absolutely essential to your growth.

 

Erwin  

That’s hilarious. I didn’t know. That’s how I knew Stewart and Denise because I met them through rain. Here from the other part, Rich Dad. Yeah, not that it matters.

 

Elizabeth  

No, it doesn’t matter. And, and quite frankly, I think that, you know, that’s part of one of the challenges for newer investors is like, where do you put your time and your money? How do you choose to educate yourself? How do you learn what you need to learn in order to, you know, be confident to make those decisions moving forward? You know, what kind of strategy do you want? You know, are you focusing on cash flow? Are you focusing on network, you know, all these critical decisions you need to make at the beginning? It’s like, I don’t know, it’s like, I would imagine the high school kids feel right now, you know, they’re, they’re a year younger than we were, they’re 17. And they have this tremendous weight on their shoulders, and they feel like they need to, you know, make this decision about what they’re going to do for the rest of their life. Like,

 

Erwin  

what did you go to school for business? Okay,

 

Elizabeth  

so you’re kind of doing what you thought, but clearly, I’m not doing anything in terms of my degree. And I was actually talking to my god daughter on New Year’s Eve. And I said to her, don’t be so afraid that you’re going to do something that you’re going to make a decision, and you’re going to end up not wanting to do it. Because sometimes doing something and figuring out the answer is no. gets you closer to Yes.

 

Erwin  

It’s often your best education. Absolutely. No, I must have been finished university. Yeah. All right. Michael Delvin. finish university.

 

Elizabeth  

Yeah, I mean, unless you’re something like an engineer, like my husband, or you know, you’re an accountant, like cherry, like, a lot of us who take these more general degrees don’t end up doing very much with them. Or we end up in a very specialised branch, where that’s when the experience comes in. And it’s way more useful than anything we did in university. I mean, I wrote a lot of psychology exams, I can’t remember most of what I learned

 

Erwin  

was like more options for education than ever, everywhere, formal post secondary courses being offered by real estate people. There’s never been this many options. Now, when I started out, I think there’s really only two, I didn’t know that Rich Dad was available for courses back then I joined rain. And like, really, they were like the really the only ones. And they weren’t even not based in Ontario,

 

Elizabeth  

I don’t see rain as sort of being in the same category as some of the other ones. Like you look at Rich Dad, and key spire and some of the other big ones. I mean, they’re, they’re all different. They’re all different. But a lot of the formulas are the same, like the process is the same, and the end goal is the same. So really, I think what you need to focus on is what is the quality of the information that’s delivered? You know, our need? Yeah. And if you’re someone who’s looking to really gain information, then your focus should be on who’s going to provide the greatest quality content, who’s going to teach me the most and less about, you know, are Is this a place to network? And I think that that’s one of the things is that there’s so much competing information coming at people now. It’s how do you make a decision about what’s the right thing for you,

 

Erwin  

is thinking about my own journey, and I’m cheap. So let’s start with that

 

Elizabeth  

frugal, the words frugal, and we’ll use both.

 

Erwin  

So I don’t poopoo on a certain organisation. I’ll use a timeshare sales thing and with the lever as an analogy, I remember cheering I sign up for this presentation. Yeah, I forget what we got for free. I think we got a free night or to it like up in Collingwood. Oh, I

 

Elizabeth  

think I went to the same one. Yeah.

 

Erwin  

So we saw the dog and pony the required pitch that you had to go through. And it all sounded wonderful. The salesperson who wasn’t really a salesperson. Yeah, but she was a she was a timeshare owner. She’s really just sharing her experience. Yeah. Lovely Lady, lovely lady. You never would have. She was a professional salesperson. Wonderful pitch. It all sounded wonderful. But cheering I went in with a plan. We’re not buying anything. Right. And like, wow, I was so tempted. Yeah. Because I want to do my due diligence afterwards. So then the other pitch, I said, no, they brought in the closer. I still said no, he got mad at me. Whatever. And we said we’re not buying anything today. Yeah. And then my first thing I did when we left the room got on my phone. I did GG I wanted to do gene check. Can I buy this timeshare from someone else secondhand? Yeah, and I quickly found out I could buy the exact same thing that they’re selling me for 10 at 20 cents on the dollar. Wow. Because their senior people who no longer wanted it. Yeah. So I get pie for pennies on the dollar privately and get the exact same thing. Yep. But then you think about all the people who signed on the spot? Yeah. Was it doing the basic due diligence? Yep. And I see the same with these courses and networks and memberships. Right? The analogy I give is often you know, it’s talking to someone. Some of these membership groups are like $30,000 And like, Okay, do some comparison shopping. What do I get for $30,000? Versus I can hire a one on one coach for usually a third the cost somewhere around a third? Yeah. 30 to 40% of like 30 to 40 cents on the dollar I can get Hmm, I really quality coach one on one?

 

Elizabeth  

Yeah, I think it’s about knowing, knowing who else is out there, like fully researching all of your options. And some people, you know, it is I mean, we were in, I think we sat in probably a similar room to you. And we had the same thing, my husband and I said, we’re not buying anything. And we had just taken our negotiations course with Rich Dad. So we literally sit and picked apart all the different negotiation tactics in there, we’re keeping notes, and then we went out afterwards for lunch. And we compared notes about what strategies did they use? But what are they good, they were relatively decent. They definitely weren’t professional sort of salespeople, but certainly they were, they were probably my estimation, they are probably realtors, something, you know, starting newer realtors, so they would make the commission on that that was my estimation. But I think it’s really hard for people who are starting out to have that critical thinking, it’s much more likely that we become emotional. And I think sometimes that’s where some of the bad decisions get made. You know, whether it’s looking at a deal, whether it’s looking at a partner, whether it’s looking at investment opportunity, is people get emotional. And I don’t want to in any way disparage I mean, if I hadn’t spent my time with Rich Dad and I invested double what you had quoted for my education at rich dad. But the way my husband and I looked at it was he hasn’t had an engineering degree, I had a science degree, we both invested money and time in this, if we were going to invest in our real estate education, then we just needed to make sure that we took action and made it happen, which we did. The challenge is when you invest that kind of money, and then you still don’t have the pieces that you need to move forward. And my husband is the personality type where he is supremely confident that no matter what happens, we’ll be able to figure it out. That is not to say that every deal we did made money that we never made a mistake that everything was roses and sunshine, it definitely wasn’t we learned some hard lessons. And we learned some expensive lessons. So you just need to be prepared for that. And recognise that, you know, sometimes you’re going to pay more if you go to a dealership than if you bought a car privately, because there’s overhead to pay for and there’s advertising to pay for. And there’s all those other things. So there could be other options out there that are not as as expensive, or that might be a better fit for you. But there is a I believe there’s a time and place for you know, group collaborations, group education, those kinds of things. Just do your research and know what you want and need.

 

Erwin  

Just exactly to your point. There’s so many options, and people need to know what’s right for them. Yes. So a lot of these programmes a lot of the more expensive programmes are meant for people who are going to go full time. Yes. All right. I think they all know, maybe 3% of the people that go through will be truly successful full time, maybe 3%. So then knowing that, it’s like when I went to, like when we’re having our first child cheering I went to these breathing classes at the hospital for like,

 

Elizabeth  

do you mean like Lamaze? Yeah, and no. birthing classes?

 

Erwin  

The objective was so that you could go through delivering the child? Yeah. Without taking pain medication.

 

Elizabeth  

Right. Okay.

 

Erwin  

So my first question was, how many people take the epidural? Yeah, impossible nurse at 80%. Like, okay, we’re gonna do this, we’ll just do that.

 

Elizabeth  

And then you look at it now, when fully a third of births are C sections. So I mean, it’s not even as much of a factor at that point, like you don’t have a choice in the matter.

 

Erwin  

My point is, if you go in knowing you have a 97% chance of not leaving everything that you’re never going to teach there. Maybe it’s not for you.

 

Elizabeth  

Yeah, that’s an interesting point. I hadn’t thought of it like that.

 

Erwin  

Because generally, my clientele is all side hustlers. Right? They’re looking to build like a portfolio of like, one to 10 properties, and keep their job. They like their job. And so do they need all of that? I don’t think so. Personally, the challenge

 

Elizabeth  

I have, with some of the sort of bigger education programmes is it almost feels like you come up with kind of just enough to be dangerous. So you have, you have, you know, a lot of theoretical information. But again, it takes us back to where we started today, which is, how do you take all that theoretical information and shape it into a plan that makes sense for you, that’s going to enable you to achieve your goals in the shortest amount of time possible. And it still doesn’t give you all the people that you need to know and all the information that you need to have in order to make decisions and those kinds of things. So I mean, I’m a little biassed, I’ve had coaches most of my life, and I fully believe in the value of coaching. And I think that that’s kind of the niche that coaches fulfil, is that it helps people when they have that knowledge, it helps them figure out their individual journey.

 

Erwin  

I’ve had a course. I’ve had coach for almost 10 years, same coach.

 

Elizabeth  

It’s Marianne Gillespie. She’s amazing. Yeah, she’s super inspired something special. Yeah, she is.

 

Erwin  

She’s so humble.

 

Elizabeth  

She’s pretty amazing lady.

 

Erwin  

Okay, so what I find more recently, the last five years, last couple of years, I don’t know within within 10. So we haven’t had a bear cycle within the last 10 years, which is also the same time some of these groups were created. Yes. So then what I find his missing is experience, which is why we have you on this show.

 

Elizabeth  

I appreciate that. Now, let’s

 

Erwin  

talk to your investor journey because your investor journey has changed. Yeah, like your original goal is very different than what your goal is today. Yeah. And that’s why I want to discuss it because people’s goals change. Yes, people change. People situation change, and gamble, just so we talked the beginning, everyone’s investor journey will be different. Everyone’s goal is different. And that’s why I kind of one minute talk to your journey so people can can see what they like about your journey. Maybe they were like, oh, I want to do that. Oh, I like that. That makes sense. To me. That’s where I am in my life. I want that. Yeah. Right. So you’re all over the map.

 

Elizabeth  

The first thing I think that people have to get comfortable with is the idea that, and this was part of my journey was I thought, you know, everybody talks about buying real estate and buying real estate and buying real estate. And unless it’s a strategy, like flipping, very few people talk about selling. So I’m like, if I want to sell my portfolio, I must be a failure, I must be a bad investor. And it took a while for me to come to terms with the idea that I want things in my life that serve me. And at around the same time, when I started thinking about wanting things to be different, I hired my high performance coach. And what he helped me understand is that high performance is not about never making a bad decision or never changing your mind. It’s about your ability to recognise where you are, where you want to be course correct or pivot as fast as possible, so that you are minimising the amount of time you are doing stuff that doesn’t serve you. So as soon as I learned that piece of information, it was like a light bulb went off. And I was like, I don’t want to do this. I have bought myself freedom from my job. But I don’t have the time freedom that I want it. And so I started having conversations with Emmet. And Emmett was struggling with the same thing where he was like, no, like, we worked so hard to you know, buy these properties and build our portfolio and blah, blah, blah, I’m like, but we’ve we’ve increased our net worth. Now we want to buy our time back. So if we sell our properties, then we have this pool of funds. And we can move into different things, we can move into land development, we can move into new construction, we can sit back and do a bunch of private lending for a while until we find you know exactly what we want to do. And as we started to make those decisions, all of a sudden, it was like the stars kind of aligned for us. And you know, things kind of became clear. And it was at that time, when we started selling the properties that my health started becoming an issue. And it was almost like the universe. And at first I was very upset. And I was struggling and disappointed. And I was like I’m still yelling, and why am I struggling with health issues. And I realised it was basically the universe going, this is the time for you, you made the right decision. You’ve given yourself time freedom. Now you can choose how you want to spend your time. And that made me so excited. Because now I get to choose. And this is one of the great things about being an entrepreneur, I get to choose my clients. Just because I do a discovery call with someone doesn’t mean that I’m automatically going to take them on as a client, if I don’t feel that they’re, you know, coachable and open to feedback, or if I don’t feel that I have the right skill set or the right experience to serve them fully, then I’m probably going to refer them to somebody else, somebody like Christian who is, you know, an amazing coach and super skilled and experienced in his own areas, he might be a better fit for someone. I don’t have to take every

 

Erwin  

geography because His specialty is within a certain small radius. Yes,

 

Elizabeth  

yeah, exactly. So I don’t have to take on every client the same as every client doesn’t have to choose, you know, a specific like, each coach, just because you talk to a coach doesn’t mean you have to work with them. Just because you talk to a realtor doesn’t mean you have to hire

 

Erwin  

them. Just because you like it or Instagram doesn’t mean you have to work with them. Exactly.

 

Elizabeth  

Exactly. So, you know, the ability going back to what we were talking about the ability to recognise that what’s going on right now in my life isn’t serving me, what does it look like if it does? And asking those kind of bigger questions because I think a lot of what we spend time doing as real estate investors is doing, we’re doo doo doo doo doo doo, I find a job or find a property run numbers, you know, look for Power team, like we spend a lot of time doing sometimes we don’t spend enough time sitting back and going, what do I want? What is the life that I want to create here, I have a couple of new clients who started with me recently, they don’t want to leave their jobs. They just want to make you know, $20,000 a year because they want to, they want to have a really good travel, trip plan, whatever it is, you know, whether it’s two trips a year, whatever it is, they just want to travel and they want something that’s going to fund their travel, they work for the government or they you know, work in Department of Defence or whatever. And you know, so they’re going to have a good pension, they’re gonna have, you know, a relatively easy job. They just want to improve the quality of their life and that’s okay too. But they’re being required

 

Erwin  

to go back to the office.

 

Elizabeth  

I wouldn’t want to go back to the office myself, so I can’t really judge on that but

 

Erwin  

I just have to give up that kind of income though.

 

Elizabeth  

It is Yes, it is an for me it is pretend that when Emmett left his job, that everything was roses and sunshine would absolutely be disingenuous, because it was tough. You know, we didn’t do a great job at the time of saying, Okay, how much is the income that needs to be replaced? And, you know, what does this look like? So he went from six figures as an engineer with, you know, full benefits and everything else, we went down to literally zero income. So then all of a sudden, the money that we were churning and continuing to put into our portfolio into renovations, repairs, upgrades, and growing, all of a sudden, we couldn’t put that same money, and we had to take the money out to support the household, and neither one of us had business degrees. But a lot of people when they become real estate investors, you don’t realise now you’re a business owner. So you need to know about it. And you need to know about marketing and social media, and you need to know about budgeting and financial planning and cashflow analysis and some legal stuff, do some legal stuff, like, you need to know all of that all of a sudden, and there’s not very many people, you can call for help with that.

 

Erwin  

So that’s why you need a coach, if you’re going to be certainly serious. Yeah. And there’s,

 

Elizabeth  

again, you need to know what you need. So if you are someone, no, but then you have to do your research. But so for a lot of people, they choose a coach who just helps them in one strategy, which is fantastic. But then it takes them back to they don’t have the business foundation they need. They don’t have you know, the corporate structure setup, or they don’t, you know, have their financing piece in place, or, you know, they’re missing pieces on how to like analyse markets and run numbers. So they know a strategy, which is great. But there’s other pieces that are missing.

 

Erwin  

And then I’ll add to that the piece I think that’s missing often is experience to know what a deal looks like.

 

Elizabeth  

Yes. And you know, what, honestly, people’s ideas of what deals have looked like in the last two years, there has not been the number of deals that there used to be, I mean, with with the amount that people are paying for properties, and the bidding wars and the inability to put in, you know, conditions, a lot of what people were buying as deals were not deal. So we need to get reacquainted with what is the deal look like. And the fundamental is we need to be buying under market value. That is a fundamental that has always been true in real estate. And it is more so true. Now, as the market is continuing to decline. Because I don’t for a second think that, you know, as of next week, the market will start to recover. I think we’re probably looking at two years, before we really truly hit the bottom because now we’re about to go through a phase where all those people who were qualifying for mortgages at the stress test, were above the stress test, all those mortgages are coming up for renewal. And there’s people who are not going to be able to afford to be able to pay 7% interest,

 

Erwin  

there’s probably gonna be some inventory, some distressed sellers coming on the market.

 

Elizabeth  

Absolutely. Absolutely. So that presents opportunities for people who have done their homework and who have educated themselves. And they’re working with a good mortgage broker and they have access to capital, they will have the opportunity to buy under market value.

 

Erwin  

Here’s the other challenge that was that. I find some novices are depending on inexperienced coaches for to to help them to qualify what a deal is. I spoke to an investor just two weeks ago, horrific deal that her coach that her coach checked off on both her realtor and her coach past it. I said, if you were my client, I wouldn’t even have shown you this property, let alone let you write an offer on it. Yeah, right. I knew right away, this was the no go. It’s possible. The coaches just simply experience. If they just believe what they saw on a spreadsheet, it looks like a good deal. Right? The realtor, they’re at a market. They’re under market realtor. They could have the best intentions. They just didn’t know any better. And then let them the investor definitely did not know any better. Yeah. All right. So again, we say do your homework, it means a lot of things to different people.

 

Elizabeth  

It does. And so many of the fundamentals that have been taught since 2008 have been very much applicable to a growing market. And there’s not a lot of people around who have seen how to function in a market like this. And I’ll be honest, I’m not buying right now. I am not buying right now. Because next week, next month, next year, it’s going to be worth less than when I buy four. So I would prefer to buy when prices are lower, because it’s gonna make my cash flow more appealing. Even if the interest rate is 1% more.

 

Erwin  

I’m okay with that. Because again, because you’ve done like everything. I’m sure there’s lessons for most everything

 

Elizabeth  

you think and where you want to go now.

 

Erwin  

I don’t have the time for it. Here’s one question you want to ask? Because if I recall correctly, you used to do a lot of small town investing? Yes. Yeah. Would you do that today?

 

Elizabeth  

I’m not right now. So again, this is part of knowing and understanding the fundamentals of different strategies, how to match them to your market and how to then coincide with your goals. So let

 

Erwin  

me pause you there. Yeah. I think the better way to frame this question is and I think a lot of listeners will pretend appreciate this as if they’re on someone’s list. For example, someone who puts together rental owns. My experience has been that 10 times when I get the email. I’ve never heard of the city before. town or city? Where’s located before? Yeah, and it’s in Ontario even. Right? I grew up here. I don’t know the name of the city. And to me, that’s a red flag. Okay, what do you think about that?

 

Elizabeth  

Well, I don’t think that’s necessarily a red flag. So I bought in smaller towns, because I bought for cash flow. So typically, you’re going to be paying less money, and you should be generating a decent cash flow. If you’re buying in a small town and there’s no cash flow, you’re not going to see appreciation either, because appreciation comes from the larger markets. So I mean, you’ll you might see a couple of percent a year, but you’re certainly not seeing what you would see in Toronto or Vancouver. Oh, but there’s in between, though, yeah. So at but then there’s in between, there should be a bit of a balance between cash flow and appreciation. And you should see a little bit of cash flow. And you should see slightly more appreciation than in what I call tertiary or smaller markets. Whereas when you buy in tertiary or smaller markets, you’re primarily buying for cash flow and appreciation. I mean, we should always consider appreciation is gravy. Obviously, in a market like this, there’s not a lot of appreciation, but the cash flow was my primary concern. So if you’re looking for cash flow, and you have done your analysis, and you you know, the economic fundamentals of a smaller market are good. I don’t have an issue with that. What I do have an issue with is when people are trying to have everything in one deal, the likelihood that you’re going to get cash flow and appreciation to build your wealth in one deal is is highly unlikely, especially with the prices in Canada, you can get that more in the US to be honest, I’ve been looking at deals in the US lately. And it’s definitely because your prices are just lower. They’re so what I go back on buying in smaller towns, no, because it gave me the cash flow and the ability to be able to create the wealth that I needed to then sell, reposition myself and go with strategies that give me time freedom.

 

Erwin  

Just try quantify for the listeners benefit the Calvert, for example. I think their threshold is they don’t invest anything on any. They won’t land on any property in that town less than 50,000. Somewhere, right? Yeah. 1000 for you. Yep. So

 

Elizabeth  

well, no, my town. I mean, Kirkland Lake is 10,000. Right?

 

Erwin  

Imaginary, your expert was a little bit different.

 

Elizabeth  

I wasn’t always I didn’t start out an area expert, I kind of became one because of spending so much time there. And being so active in the market. I think that’s another challenge that new investors do is they try to become an expert on everything at once. It’s important for disaster. It’s important to pick your niche, you know, choose your market, choose a strategy, become an expert, and then grow from there. Don’t try and know everything about everything all at once.

 

Erwin  

No one will ever pull the wool over your eyes. If you are an expert in that subject area in that neighbourhood 100% in that property strategy.

 

Elizabeth  

Yep. And I love it. You know, I get people calling me for property management. And they’re going, Oh, my realtor told me I could rent the unit for this. And I’m like, no, no, you can’t you can’t rent it for that. That number doesn’t even make sense. So

 

Erwin  

it’s important work. If you offered your lease, go on Kijiji Facebook marketplace, check with rents were before the festival festival, your Realtors telling you?

 

Elizabeth  

Yep. And putting the right people on your team. You know, do you know the right questions to ask to make sure that you know your accountant and your lawyer and your mortgage broker and your realtor that they’re the right people for you? Because let’s face it, how many realtors are there in Canada? Right. And there’s a very, very small percentage of them that I’d actually want to work with.

 

Erwin  

Yeah, just being in the same room with Yeah. Long works.

 

Elizabeth  

I like most people, so I’d probably be in the room with them. But, you know, as investors, we’re looking for a very specific skill set, especially when we’re starting out and we don’t know what we don’t know yet. So until we are the experts, we need to have high integrity, high quality people around us who are the experts, and can share that knowledge and information to make sure we’re making good decisions, and not just making a decision because they need to pay for their BMW next month.

 

Erwin  

It’s funny because people I find, I find generally people have a healthy distrust of large corporations. And surprise, they don’t have the healthy mistrust of people selling them stuff.

 

Elizabeth  

That’s a good point.

 

Erwin  

Here’s an example. I often give people like one of the one of our big banks was investigated, and they were found guilty of pushing products on their customers that they did not need, particularly targeting seniors. Right. And I remember them interviewing people at the branch level. Insane. Like why did you do this? Because my job counted on

 

Elizabeth  

Yeah, I had a quota I had to meet I remember that.

 

Erwin  

Yeah. Two things. The institution was doing things I shouldn’t be doing. Yep. And human beings at the frontline. Were doing it because it meant that meant that they can make a living.

 

Elizabeth  

Yep. And that was probably the primary one of the primary reasons why I left. My job was because I didn’t want anybody else’s ethics and integrity to dictate how I how I conducted my business.

 

Erwin  

So where’s the same mistrust for all these other influencers out there? And I mentioned I say that because my predictions for this year as we’ll see a couple of them go bankrupt.

 

Elizabeth  

Yeah, I could see that. I could see that. I think we still have the idea that what we see on social media and we go Oh, it’s on the internet or it’s on social media and we know we tell ourselves, that’s not reality. But we see these people living these lives and we’re like, I want that life. And that emotional tie to wanting that life overrides any sort of intellectual thought about is this really the life that they’re living?

 

Erwin  

That’s how marketing designed to work. Yeah, influencer.

 

Elizabeth  

Marketing is designed to make everything look like roses and sunshine,

 

Erwin  

which is funny, because the way I designed my marketing is, well, I do a lot of the same stuff. But I invite people to come meet my clients as well. So you can ask them yourself, what their life is like.

 

Elizabeth  

Yeah, and I think I mean, I’m not a big one for posting, you know, deals that I’m doing and stuff that I’m where I’m not a big one for posting that all over social media. And I actually

 

Erwin  

just see on the right side of the Ontario Securities Commission.

 

Elizabeth  

But I was talking to a marketing consultant yesterday, and she’s like, you need to do more videos. She’s like you, you need to share more about your life. And I’m like, Do people really want to know about my life? I don’t know, I guess, but to me, it’s not second nature to be like, hey, like, here’s what my house looks like. And here’s, you know, what’s going on with my dogs. And

 

Erwin  

like, that’s just Ricardo knows. Yeah.

 

Elizabeth  

I don’t know. Maybe I was just maybe I’m old. And I was just raised differently. But it doesn’t. I don’t know. It doesn’t

 

Erwin  

depend on your goals. If you want to influence in game and grow whatever you’re growing, because just just like it just the hustlers. How he promotes himself versus grant. Yeah, very different. Yeah. Net worth is very different to Yes. Right. Like grant literally did flying in his private jet to wealth. Conference, right. Early. Right. brought the whole family versus Jesse flew American Airlines. fly business class. Probably. Yeah. But he’s so rich. Yeah. But he doesn’t have a private jet. No. But he’s,

 

Elizabeth  

I mean, he just showed up. He’s richer than grant. Yeah. He just showed up. And he’s wearing like, his his like casual clothes, and he looked like a surf bum,

 

Erwin  

you would then know you’ve no idea how you’d have no idea how successful he was, was just looking at him. No, all right, very different, very different, how they present themselves in the media and their social media. Right. But it depends what your goals are, though. Like grants trying to raise funds for his fund fully cool. Yeah. Right. And for selling his courses, whatnot, Jesse’s just like, doesn’t really care.

 

Elizabeth  

I think that’s important to going back to what you said, in terms of doing your due diligence, I think it’s important to look at people’s motivation for doing things.

 

Erwin  

To try to sell you something, you should raise your level of due diligence.

 

Elizabeth  

Yeah. And I think, you know, like, for someone like you, your goal is literally to educate people to share knowledge and information. My goal is to make my clients rich. Well, that’s one of your goals. But but the reason why you do so for example, the podcast, I mean, you don’t do the podcast, in order to make your clients rich, you do the podcast, because it gives you a platform and an ability to be able to pull these high quality individuals in and be able to pick their brains and ask them all kinds of questions, and then share that information and give back to the community.

 

Erwin  

What are some teen listeners were likely to get richer for this?

 

Elizabeth  

I think you’re at 18. Now 18? Yeah.

 

Erwin  

You told your mother about the show.

 

Elizabeth  

Thanks to one of my clients, BB. BB is with us now your 18th listener, she’s thrilled

 

Erwin  

about it, appreciate it. But that is the desired outcome for the show. Because if you don’t want to work with me, totally cool. Even like, I want to work with you. Yeah, I’ll bet you any money that our 17 listeners, their net worth is higher than the average Canadian. I’ll gladly bet money on it.

 

Elizabeth  

Yeah. But I think it takes a certain type of person who listens to podcast to I think, in general, those people are people who are thirsty for knowledge and information, and who are coachable and open to new ideas and feedback. I think if if you believe that you’re right, I mean, I’ve seen people hire coaches, because they just want affirmation that the decisions they’re making are right. And when you when you tell them that they’re wrong, they don’t like that. Yeah, they suddenly get mad at you. And they tell you, you don’t know what you’re talking about, or that you’re disrespectful or you’re not listening.

 

Erwin  

And trying to save you money. You’re being disrespectful. don’t appreciate

 

Elizabeth  

this. This doesn’t look like a real deal. To me. There’s too many risks associated. You don’t know what you’re talking. Okay. Yeah, absolutely. I mean, it happens, right? Not everything is a fit for everyone.

 

Erwin  

That’s why sometimes I’ll put them up and sometimes my mortgage person or a lawyer and they’ll kill the deal for me. Funny, well, it’s it’s part of business. Let someone else be the bearer of bad news. Why should it be my job? It’s their job to be the bearer of bad news. You’re not getting financing on this, this deal sucks. I mean, I’m speaking as if I’m the mortgage person. And then they’re not mad at me. So one of my questions I have prepared for you. I have thought about a lot well in advance.

 

Elizabeth  

least five minutes before we started.

 

Erwin  

What’s not going to work in 2023 in terms of real estate strategy, and what will work though, so let’s start with what’s not gonna work.

 

Elizabeth  

What is not going to work I believe, unless you’re buying at a really steep discount is short term stuff, things like flips where you know your return is dependent And Tom being able to sell for a certain price, you know, we’re always one interest rate hike away from another big significant drop in pricing. I don’t believe buying at fair market value is something that’s going to work. So I always believe things that will work will be things that add value, adding units to existing properties is one of my favourite go twos. Why do it a lot with my clients were

 

Erwin  

getting to working with what’s not working first positive

 

Elizabeth  

more than negative, what else won’t work, it’s gonna get harder and harder to use private money for stuff. Because the interest rate is the interest rates as well as the borrower or the interest rates are just continuing to rise as it costs more for people to borrow against their HELOC or wherever whatever the source of their money is, unless it’s cash. Another thing that’s not going to work,

 

Erwin  

anything specific to a strategy like Java, like short term rentals, midterm rentals,

 

Elizabeth  

what I’m seeing with my clients is that, in general, short and midterm rentals are really struggling. Because there’s just less disposable income out there. And people are less willing to take vacations, it’s costing them more. I mean, you think about all the people in the pandemic with money at 1.5% people were doing renovations people were I mean, they, they couldn’t travel outside of the country, but they were you know, renting cottages and doing all kinds of stuff. And that was working really well. But now people are like, okay, it’s costing me, you know, eight, nine 10% to borrow my money, I’m not going to take a vacation and then put it on a line of credit at that rate. People are quite honestly worried about their jobs, you know, there’s less hours available, there’s less money available. So those kind of strategies are struggling a bit right now. And especially like even think about it, you know, the ski hills? How many people have, you know, bought vacation rental properties in markets that have skills? And I don’t know about you, but I don’t see. No, no, exactly. And

 

Erwin  

Blue Mountain only had one chairlift working last week. And we’re we’re early January right now. Yeah, that’s insane.

 

Elizabeth  

It is. It’s a crazy year and years like this happened. But it is challenging for people who are counting on people coming to go skiing, that just isn’t happening right now. So the ski this ski hills, unfortunately, are a couple of years of COVID restrictions, and then and then no snow. So definitely some of those strategies are are not as popular right now. What’s working well,

 

Erwin  

before we get there, because I asked you this question before, offline. of my personal people. I know you have more New Brunswick experience than anyone I know. But I asked you how many people have asked you about New Brunswick? From the from listening to the show, for example, I’ve had one person recently contact or just recently though, the show was a while ago. Yeah, yeah, no. And I bring it up because I see all these bills running to New Brunswick is still I hear from mostly multipart Milton buyers, which totally shocked me why no one asked you. Yeah, because I don’t know. Like, like, for example, what I often do is like, pause for 30 minutes brainstorm, who I know who invest in New Brunswick. Eventually, I suppose people should get to you. Yep. Right. You’re not selling me anything. Elizabeth Kelly, what’s your opinion on New Brunswick?

 

Elizabeth  

I haven’t had a great experience there. I’ll be honest, the market was very flat for a long time. So there was no appreciation. So you didn’t have the opportunity to refinance and pull out equity. I found the tenant profile quite challenging. So I was constantly putting money into units, which would chew through the cash flow that was generated. So basically, St. John, New Brunswick, in my experience, should have been a secondary market based on the population. But it functioned more like a tertiary market because you were buying for cash flow, but in you weren’t but you weren’t seeing appreciation. And the whole maritimes was like that. I mean, I bought in 2010 there in 2011 2012. I did rent to owns there I had multi unit apartment buildings there. So my rentals did okay. But I had one that was a spectacular went down in flames. And it basically wiped it everything for the other ones,

 

Erwin  

either pretty substantial portfolio, you know, beginner novice, New Brunswick investor,

 

Elizabeth  

no, but these were, you know, some of my some of our initial purchases when we were just coming off the the rich dad courses and the education. So we had a lot of theory, but we didn’t know how to apply all of it. So every market is different. Every market is different. And you know, we chose a realtor who had turned out didn’t have the best integrity and ethics. It was long distance management and our first property manager. Our first couple of property managers ended up having some challenges with, you know, ethics and theft and some of that stuff. So it just every time we turned around our cash flow was getting killed. So yeah, that was probably part of the reason we started our own management company in Kirkland like

 

Erwin  

any reason you see the rush for people to go buying in New Brunswick,

 

Elizabeth  

they’re buying based on price per unit. Again, they’re it’s the same thing that we did, you know, we ran the numbers and the numbers look good. What we didn’t understand was the reality behind those numbers,

 

Erwin  

vacancy and maintenance and renovations will be higher than expected. Yes, because you have

 

Elizabeth  

I mean, not everywhere in New Brunswick. Obviously, there’s people with higher incomes and that kind of thing. When you’re buying at, you know, I don’t know 75,000 A unit, you’re not attracting the a plus plus tenants. And you need to know that’s one of our biggest challenges was we didn’t understand the different neighbourhoods. So we bought in lower end neighbourhoods than we believed we were buying at a

 

Erwin  

friend do the same thing in Hamilton. He was the Waterloo in Toronto party manager for large, large corporations. So when he started investing on his own, he continued to invest in Waterloo, but he also bought some buildings in Hamilton. And he had it he gave it to him. Yeah, worse tenants.

 

Elizabeth  

Yeah, it’s a real challenge. I mean, you need to if you’re buying in, you know, one of the worst neighbourhoods of the city, you need to make sure you’re running your numbers and you understand you’re going to have higher vacancy rates, you’re going to have higher repairs and maintenance, you’re going to have higher debt, higher garbage, and you’re going to have greater damages. So the rents that you do that you are able to collect need to be high enough to offset that. And people were buying in New Brunswick, quite honestly, because it was so easy to evict tenants and be able to you know, do the rentals and turn the building over. But you can’t do that now. Because they they change that. So that makes New Brunswick a different animal. Now,

 

Erwin  

I want to ask as well, what about multifamily in general? Because I keep asking people like Cory sprawl, like, I have friends all over the country who do buy apartment buildings all over the country. Yeah. Right. And they all keep telling me, there’s too many offers on them. Yet I see all these courses. I like y’all multifamily, but doesn’t seem like that’s what the value play is. What are you seeing?

 

Elizabeth  

I’m someone who’s on multifamily buildings for for 12 years, 13 years. I don’t love them. I never really have,

 

Erwin  

oh, I’m banned by a lot of people. I know.

 

Elizabeth  

I know. But I, I just, I just don’t love them. I never have my husband has loved them. He’s bought so many of them. And I just I think i It’s because I’m, I prefer to stay in something that I know is easy to sell, I prefer to stay a little more liquid. So I would rather stay with smaller buildings, I would rather stay with, you know, for plexes, that there’s always going to be lots of buyers for it. And you know, if someone has a multi unit building, there’s not always a guarantee that they’re going to be able to sell it at top dollar or within a reasonable amount of time. And I know that that’s exit strategy, but the reality and there are some people who are buying you intend to never sell buildings, but the reality is life changes changes, things happen, you get married, you get divorced people, you know people are born people die like that is the reality of life,

 

Erwin  

midlife crisis, you wanna start travelling full time, whenever you need the money for

 

Elizabeth  

exactly like I look at, you know, my my husband’s best friend, he passed away unexpectedly at 36, he left behind a stay at home mom with two kids who are one and a half and three years old. Like she never in a million years would have anticipated that. And it took a while they had a couple of big buildings. And it took a while and she was stuck trying to figure out her finances and look after the kids and deal with all of the estate and all that kind of stuff, as she’s still trying to figure out what to do with these buildings. And they sat for a while before they sold versus a four Plex will move pretty quickly. Whereas a four Plex, I mean, she could have even, you know, gone to a JV partner or whatever. And again, it’s this is a relatively new phenomenon, this demand for multi units. It wasn’t like this. Five years ago,

 

Erwin  

there was demand, but it’s gone way up. Exactly. And that makes

 

Elizabeth  

me think that it is not sustainable. Right, which was the same feeling that I had for the exponential increase in valuations in New Brunswick during COVID is that it’s not sustainable.

 

Erwin  

Same thing with the job market. Same thing with the stock market. It feels it feels like the lesson from the last year has really been anything that’s on fire is going to come down. Yes. Good luck. I’m now flaming.

 

Elizabeth  

And I think people think that they’re buying apartment buildings for cash flow, and they’re not their wealth building strategies, correct. Because every time you refinance and pull out capital, you’re wiping out your cash flow again,

 

Erwin  

Quinton Sousa was quite upfront about it when last time he was on the show. Like his cap, I think you’ve seen his caps, like four and a half percent. Yeah, there’s no cash flow.

 

Elizabeth  

No. I mean, he knows his numbers and and he knows what he’s doing. Quinton is a very smart man. But people I think, again, it’s part of setting up the expectations and knowing the reality behind the theory. The reality behind the theory is I bought in a bad area in New Brunswick, and I ended up with a less than ideal tenant profile. If I had known then what I know now I probably wouldn’t have bought all of the buildings I bought in my mind about some of them, but I probably wouldn’t have bought all of them. And it’s the same thing I think with multifamily where people are like, Oh, I’m gonna get you know, $250 per door and at 10 units, that’s 2500 a month I’ve replaced my income now I can leave my job. And the reality of it, at least in the first five years is you’re not going to see cashflow.

 

Erwin  

Do you like your time profile income Looking like, for example, or any of your apartment buildings? Carson? So I’ll just preface that by saying, I’ve never done multiple buildings, because that’s not my target target tenant profile, right? I’m way too soft skin for that market. Right? Tougher than I used to be. You have to be you have to be yes. Right. Versus I knew I wasn’t. Yeah. So I wasn’t, that wasn’t gonna be part of my strategy. Right? Okay, I believe Life’s too short. As much as I love money. That wasn’t gonna be for me. Right? Right. So that’s why I stay small, much. I’m gonna guess that my Tinder profile makes a lot more money than it just makes sense. Yes, I live in a house duplex whatever, by rent is higher than any apartment building.

 

Elizabeth  

Not only that, but you typically have people who are employed and who actively take steps to protect their credit, void. And who care about their credit, you actively take steps to protect their credit, because they’re the people who could conceivably in the future become homeowners. So as part

 

Erwin  

of my criteria, tenor criteria, works as chairs with a credit.

 

Elizabeth  

So what we did in Kirkland lake was we intentionally bought a mix. So we had some more entry level kind of lower end type buildings. But we also when we did renovations, we made some really high end units. And that I found was a much more successful strategy, I did a better job of reading the market and what the needs were in the market, and then finishing units like that. So our higher end units were fantastic, they were much, much better, we got a higher calibre of tenant, they took better care of the property. And they were just more enjoyable to deal with. But that was part of the reason why I loved rent to own so much to was because, again, you get a higher calibre of tenant, you get people who want to be homeowners, people who, you know, they’re willing to cut the lawn, and they’re willing to shovel the snow and they’re willing to look after the maintenance needs of a property because they have a vested interest, this is going to be there. And that was why probably one of the major reasons why I loved rent to own so much

 

Erwin  

we didn’t cover rent to own versus working versus not working. So rent

 

Elizabeth  

to owns right now are a better strategy, because we’re not in the crazy bidding war. So people who are trying to do rent to owns early in 2022, we’re just getting priced right out, the numbers weren’t working, it wasn’t making sense. The biggest obstacle right now for people who want to do rent to owns is trying to put a future valuation on the property. And the majority of the return in a rent to own comes from the the lift and value from purchase price to future purchase price. So that’s the biggest challenge right now with rent to owns. But if you you know, you’re willing to be somewhat flexible, you’re willing to, you know, give people a one year extension, or, you know, if let’s say you price it at a $40,000 increase, and it only goes up 30, if you’re willing to come down that 10. I mean, you can create scenarios that makes sense, rent to owns is probably one of the best strategies right now for cash flow to

 

Erwin  

what else is working, you’re gonna be working in 2023.

 

Elizabeth  

I love private lending right now, that’s kind of my go to, is I just enjoy, you know, seeing what people are up to looking at different deals, looking at different markets, I know how to do my due diligence. That’s one of the biggest challenges for new investors who go, oh, private lending, this should be easy, I’ll do this, and they don’t know how to screen and vet, you know, what the deals are, who they’re lending to what the market is, and what the security or the protection is for them. Prom notes are not a way that I would go right now, as valued

 

Erwin  

by more listeners, as you as you speak, I’m sorry, multifaith, poopoo, mouth, New Brunswick, poopoo, multimode, fibre promissory notes.

 

Elizabeth  

And to be fair, this is me. And this is going back to what we talked about. Everyone’s different, everyone’s different and people’s risk tolerance is different. And people’s goals and objectives are different. So I’m speaking now as someone who’s been investing for almost 20 years, and what works for me, I know that management of apartment buildings is much, much more intensive than it is for managing smaller properties. My smaller properties I virtually never hear from anybody. My larger buildings, there’s always issues, people complaining about temperature about their tenants next door about someone leaving stuff in the hallways like constant issues, and duplexes. I mean, I you could go a year without hearing from your tenants in a duplex.

 

Erwin  

Oh, private lending. To teach my kids. So my kids lent out they each lent a stuffy Yeah. To to a friend. Oh, right. Yes. And they asked me. Oh, do you remind them to bring them back? And when we next playdate we had together and they didn’t they forgot. And then this was the learning moment. I said, you don’t learn things like that. If you do, don’t expect them to come back. I think you almost have to do the same with some of the private lending. Yes. Yeah. The expectation someone’s not coming back. Yes. All right. I don’t know if everyone does that. Now

 

Elizabeth  

most people don’t and Christian Spiroflow go and I talked about this a while ago on his strategy, I think is I think you said for every four deals that he does, or three deals that he does, he anticipates one of them isn’t coming back. So the returns from the other ones need to be high enough to cover that.

 

Erwin  

Right. So that’d be smart. Right? But that’s part of your depth. are hard enough rates. And the risk has to be low enough that they come back

 

Elizabeth  

exactly. But that’s part of your due diligence process. So I don’t lend money on properties that I’m not willing to own myself. So I look at the property, I looked at the loan to value, I make sure there’s enough money to cover my money if I have to take the property back over plus legal fees, and all the other things. So I better want to own that property if I’m going to because again, I don’t like prom notes. So will you lend on someone’s home? No, way too emotional, way too emotional. And it just everything gets cloudy with that, you know, an investment property, I quite frankly, don’t want to own a bunch of single family homes with people living in it that I then have to evict and all the other things. So I would rather own someone’s investment property and manage it a tenant from the beginning. And I have no issues with property management. I’ve been doing it since 2005. But it’s very different having done rent to owns with homeowners, it’s very different to work directly with a homeowner. And there’s a lot more concessions expected to, you know, if you’re lending someone money for their house, it’s usually like personal debts, they’re paying off its credit cards and those kinds of things. And if they’re coming to you, as a private lender, it means that, you know, they’re not able to get a line of credit from a bank. So there’s already some credits and some different issues there. And now you’re coming in and bailing them out on their home. But I feel that there’s sometimes a bit of a feeling of entitlement, like you’re going to take my home away from me, and you’re painted as the bad guy. Whereas if it’s an if it’s an investment property, it’s much more likely to be business. I don’t want to be the bad guy for anybody. I mean, I will, but I prefer not to set myself up in that scenario.

 

Erwin  

What kind of terms are you looking for, if you’re gonna live on someone’s income property,

 

Elizabeth  

um, it depends. I’m willing to go to 80. Right now I’m looking less than 80% loan to value because I anticipate the market declining by another 10 to 15%. So I want to make sure that I’m protected. And then there’s still money for a realtor if needed. The interest rates I’m looking at right now, probably 12. It just, it’s costing what six and a half 7%, to borrow money from HELOCs. So 12, to me is kind of where you’re starting, you know, typically, I’m looking six months to a year when you’re doing private lending, it’s usually shorter term stuff.

 

Erwin  

And then like, how would you structure the payments, so you’d want the monthly payments? Are you going balloon,

 

Elizabeth  

I don’t like balloon payments at the end, we could do a balloon at the beginning. But I really prefer seeing that someone can manage their cash flow. And I prefer to receive I obviously take my lender fee up front. So I usually charge a one one to 2% lender fee. And then I prefer to get monthly payments. So they know that they’re managing their financial situation. Typically, for most people, when they’re struggling financially, the non payment is the first sign that they’re in trouble. So if they’re not having to make monthly payments to you, you don’t get that sign that they’re in trouble until it’s too far gone for you to help

 

Erwin  

you steal your mortgage business. No, no, I gave it up. It also is gonna be working in 2023. Mentioned cash investing, if you’re investing cash, you

 

Elizabeth  

have a lot more you yeah, oh yeah, you have a tonne more flexibility. In terms of other stuff that’s working, I think land development, I think there will be people who will be who were land banking, who might be in financial situations where they would need to dump land. So I think land development might be a great thing. We still regardless of whatever’s going on the economy. I mean, we still I saw Andy trans email that came out a while ago talking about how we’re 880,000 People came into Canada and 2022, we didn’t have enough housing for the people who are here already. So anything that involves adding units, I think would be beneficial. Anything that involves converting unused office space to residential, I think is going to be huge.

 

Erwin  

I would love to be able to rezone my office to be residential.

 

Elizabeth  

Well, you have such a beautiful office, I mean, this is a great little place. But anything that basically adds units, anything take existing properties, I think that the coach houses, you know, third suites, those kinds of things are going to be hugely successful as well, you may not be able to refi and pull 100% of your money out. But the boost in cash flow is going to make a big difference. And I think there’s going to be demand for units like that.

 

Erwin  

Just to elaborate on the 800,000 number. It’s, it’s new immigrants like new Canadians, and then you add a lot of the work visas and student visas. But they’re all here, they all need a place to live to

 

Elizabeth  

doesn’t matter what piece of paper they’re here on,

 

Erwin  

somewhere to live, but don’t wanna stay in a hotel.

 

Elizabeth  

And it’s not like rent rents have gone down. And it’s super competitive right now. It’s super competitive. So I think that there’s always going to be demand and basically anywhere where you can, you know, buy you know, a single family house, add a couple of units, you know, you buy a piece of land and you build something on it. Those strategies, I think are going to be promising. The offsetting will be as inflation continues the cost of materials and labour, right. So you have to make sure you run your numbers and you know what you’re doing ahead of time.

 

Erwin  

Just to add to that, where these immigrants are going If Rockstar produced a really lovely infographic, this sounds crazy, when yesterday when you see it, you see a picture of the map of Canada. 50% of Canadians live below our largest US Canada border. Really basically, like, b2b Beyond the Golden Horseshoe of Ontario. But yeah, 50% of Canada lives there. Wow. That’s insane. That is insane.

 

Elizabeth  

Not to see that graphic. So it’s

 

Erwin  

not crazy. That’s why people will always be like, Oh, I’ll go invest here government, New Brunswick and Alberta whatever, like 50% and up around the Golden Horseshoe.

 

Elizabeth  

Well, that’s it. And I think part of the reason for the growth in New Brunswick in some of the Maritime Provinces is because Alberta was doing terribly. So everybody who was working in the oil fields all went back home to New Brunswick, and Newfoundland and all those provinces. And now that Alberta is doing better, everybody’s going back again. So the population has actually dropped. So your tenant pool has actually dropped when you’re investing in the Maritimes right now. It’s just like, internal migration, right. A lot of

 

Erwin  

a lot. Of course, instructors are not gonna like you, Elizabeth Kelly. Okay,

 

Elizabeth  

I just do my own thing.

 

Erwin  

That’s your own thing. Are you taking more coaching clients on? I do have a couple of openings? Yeah. Just a couple. Just a couple. And where do people where can people find out more?

 

Elizabeth  

You can? I’m really hard to find not. You can find me on Instagram. You can find me on Facebook. I do have a website, EK consulting.ca. You can find me lots of places and obviously always at wealth hacker, and I’ll be at multifamily as well.

 

Erwin  

Only the primary tickets. Sorry.

 

Elizabeth  

And then. And then we are having another summit coming up as well. We have not announced the date yet. But we had we hosted my friend Cory Sperling and I hosted a summit which you were part of thank you for that. In October, people that actually still grab recordings resilient summit.ca. And it went so well. And the feedback was so positive that we’re really excited to host another one

 

Erwin  

announcing time yet

 

Elizabeth  

not announcing it. Yeah, it was a three day event last time, it was a three day I think people found that a little overwhelming, they didn’t sleep. So we’re gonna look

 

Erwin  

at going to the consumer on their own schedule. They don’t, they don’t just sit there for three days. And that’s

 

Elizabeth  

one of the best things about the recordings like Cory and I were really surprised. But you know, we go in and look, and there’s still people here in January watching recordings from presentations that were in October, like, the information is so evergreen, and it was we’ve covered such a range of topics about how to be resilient in tough times that people are still watching them and learning so

 

Erwin  

much the way it should be like if it’s a especially if it’s an evergreen topic, for example, like apartment buildings, like probably the consumer a couple times for the stick. Yeah, absolutely nothing to do it.

 

Elizabeth  

Yeah. And you know, you talk to people like Cory and he loves apartment buildings, and that says life and that’s great. It works for him.

 

Erwin  

I’m sure he doesn’t like all the competition out there. No.

 

Elizabeth  

But that’s the importance of knowing what you being the architect of your future, and designing the life that you want to live. And knowing what you want. Please leave it there.

 

Erwin  

Thank you, Elizabeth.

 

Elizabeth  

Thank you so much. It’s always a pleasure.

 

Erwin  

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

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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…

If you’re interested in being a successful real estate investor like those who have been featured on this podcast and our hundreds of successful clients please let us know.

It is our honour to give back and educate others on how we build cash flowing real estate portfolios using all the best practices shared on this podcast, from the lessons of our hundreds of clients and of course our own experience in owning investment real estate.

If you didn’t know already, we pride ourselves on being the best of the best real estate coaches, having the best property managers, contractors, handy people, cleaners, lawyers, accountants, everyone you need on your power team and we’re happy to share them with our clients to ensure your success. 

New investor or seasoned veteran investor, we can help anyone by providing our award winning coaching services and this isn’t all talk.

We have been awarded Realtor of the Year to Investors in 2015 by the Real Estate Investment Network, 2016 by the Canadian Real Estate Wealth Magazine and again in 2017 because no one told the judges no one is supposed to win the award twice but on merit, our peers deemed us as the best.  In 2018, we again won the same award by the Real Estate Investment Network.

Hopefully being the most decorated team of Realtors in Ontario will make you consider us for your first or next real estate investment.  Even if you don’t invest in our areas, there’s a good chance I know who would be ideal for you. 

I’ve been around for a while, some Realtors are talented at servicing investors there are many with great ethics.  The intersection of the two, talent and ethics is limited to a handful in each city or town.

Only work with the best is what my father always taught me.  If you’re interested, drop us an email at iwin@infinitywealth.ca.

I hope to meet you at one of our meetups soon.

Again that’s iwin@infinitywealth.ca

Sponsored by:

Infinity Wealth Investment Network – would you like to know how our investors returned 341.8% on positive cash flowing real estate over the last five years? On average, that was 68.4% per year.

Just imagine what winning in real estate could do for you.

If you would like to know how we did it, ask us how by calling 289-288-5019 or email us at iwin@infinitywealth.ca.

Don’t delay, the top markets we focus in are trending upward in price, so you can pay today’s price or tomorrow’s price.

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

Erwin

Hamilton, St. Catharines and Toronto Land Development, Real Estate Investor, and soon to be builder.

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Conversions, Student Rentals, Garden Suite Update With Ken Bekendam

Happy New Year, my fellow truth seekers!! 

Welcome to the Truth About Real Estate Investing, where we continuously look to learn the best practices from doers, not talkers, to extract from them repeatable investment strategies, and break them down into actionable items for both novice and seasoned investors alike.

 
 
 
 
 
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A post shared by Erwin Szeto (@erwinszeto)

A word on seasoned investors…

I was talking to a client about the coach she was assigned from one of those large real estate education companies, and she told me her coach was very experienced.  

I asked her to tell me more, as experienced means different things to different people.  

For example, if I were to hire a coach, I would want someone highly successful with more skill and experience than me. 

The funny thing is, the person I would hire costs very similar to these new coaches who hit the scene in the last 3-5 years, some of them with less than five years or worse dubious track records of investment themselves.

The market during this downturn and higher interest rates have let me know who the real investors and coaches are, and no, I’m not going to out them as I don’t want to be sued.  

I’m hearing on the streets about struggling investors and coaches, mainly folks with multiple flips and BRRRs who can’t exit or make cash flow.  

Times like these are the ultimate stress test. 

Doing one’s own due diligence with the internet and social media has never been easier than ever, and the fun fact of the day, many podcasters don’t background check their guests. 

I can tell.

Quick update on the Clydesdale Capital bankruptcy…

The owners Fayaz aka Mark Smith and Alex Solga, have turned down an invite to this show. 

Alex was advised by his lawyers not to come on, so I don’t blame him at all. Nevertheless, Alex and I chatted, and he confirmed my understanding.  

If you’ve been following me and my iWIN Meetings, I have mentioned before how these times are part of the market cycle causing to greed and new entrants to the market, lack of experience, skill and capital leads to poor execution…

One has to wonder if tens of thousands are spent on coaching each year to arrive at bankruptcy at the business and personal levels.

So many have gotten burnt with excessive leverage, poor business models, and a lack of cash flow management when the market was greedy. 

I’m not guilt-free either; the duplexes I bought in 2021 are cheaper today, but thankfully they’re fully tenanted at high rents, so Cherry and I will manage just fine. We’re in this for the long term.

But don’t look at my crypto and growth stocks, lol. 

Thankfully, by design, those positions were a small percentage of our overall portfolio since real estate is so safe, and when done right, one can outperform the market.  

That said, I’ll be taking advantage of both real estate and stock markets.  

If you haven’t been around a correction before, I strongly recommend you study what happens in recessions and how many get rich exiting the crashes.  

All my friends with grey hair who’ve been actively investing since before 2008 all regret not buying more then.  

Now is the time we right that regret!

As usual, we will cover how-tos in real estate investing via virtual webinars, in-person monthly iWIN Networking Meetings, and practical Street Smart Tours, where we tour target neighbourhoods and income properties, followed by MasterMind lunch.  

The next 18-24 months will be a wonderful time to be greedy while the masses are fearful with above-market returns available to those who invest smart with minimal risk. 

That’s how we’ve been investing around here since 2010, and our track record of over $400 million in investor transactions and very wealthy clients speaks for itself.

If you’re looking to make 2023 your best year and make the best decisions for your financial peace, then you’ll want a copy of my book; the electronic version is free from my website, www.truthaboutrealestateinvesitng.ca

Enter your name and email, and you’ll also be notified when we offer our educational events at nominal costs.

In my experience, we have numerous millionaire and multimillionaire clients who have never paid for a five-figure coach or networking group.  

Just recently, at a clients-only event, I had several clients say the best part of being a member of a certain group I used to belong to was meeting me.  

I’m humbled and honoured and can’t wait to make a difference in more people’s lives.

Conversions, Student Rentals, Garden Suite Update With Ken Bekendam

On to this week’s show!

We have Ken Bekendam, who is up to many things to generate cash flow and build wealth in real estate.  

The best part is Ken is available for hire! One can hire Ken’s company https://legalsecondsuites.com for major renos to your home or investment property, including basement apartments and garden suites.

Ken and Legal Second Suites have even been in the news representing one of his clients. 

A mutual friend of ours, Alex, who happens to be Ukrainian and wants to convert his garage into a garden suite to rent to Ukrainian immigrants, but the rich neighbours think the added density of tenants living in a garage will damage the neighbourhood and increase traffic.  

Thankfully, with municipalities trending in the right direction to allow us private investors to create more housing… 

I won’t spoil it and let Ken explain how the story ends. Rich homeowners vs. rental housing for Ukrainian immigrants….

In today’s show, Ken details what strategy makes up the majority of his portfolio and provides him with massive cash flows. 

It’s not what you expect, as none of the influencers out there are promoting or offering courses on this strategy.  

Ken shares how to invest in garden suites, including build costs and rents, plus some big and small conversion projects.  

This is a great episode for education purposes, so have those pens and pencils ready.

I give you my friend Ken Bekendam

Please enjoy the show!

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 FREE Online Training Class.  We will be back in person once legally allowed to do so, but for now, we are 100% virtual.

No need for you to reinvent the wheel; we have our system down pat. Again that’s  www.infinitywealth.ca/events and register for the FREE Online Training Class.

 

This episode is also brought to you by www.stockhackeracademy.ca, where everyday real estate investors learn the best practices in stock investing to earn cash flow in about 15-30 mins per day from their mobile phones. After real estate, Stock Hacking is the next best hustle, as you’ve heard from many past guests on this show. Among our students last year, 31 trades were shared with them. 30 were profitable for an over 96% success rate and 12% return on capital. I will be giving free demonstrations online, very similar to the one I gave my kid cousin, a full-time musician who just made a 50% return in 2021.  Past, of course, does not predict the future, but if you’d like a free demonstration, go to www.stockhackeracademy.ca in the top right and click FREE Demo.  At the demonstration, I’ll have special bonuses. We do not advertise publicly for all my favourite listeners, and I only have two more demos to give in the next few weeks.

Don’t delay www.stockhackeracademy.ca, what I consider the future of side hustles with real estate so unaffordable for many.

To Listen:

Audio Transcript

**Transcripts are auto-generated.

Erwin  

Happy New Year, fellow hackers, true seekers. Welcome to the truth about real estate investing show where we continuously look to learn best practices from doers, not just talkers, to extract them repeatable investment strategies, and break them down into actionable items for both novice and seasoned investors like a word on seasoned investors. I was talking to a client about her coach, she was assigned from one of those large real estate education companies and she told me her coach was very experienced, I asked her to tell me more as experienced means different things to different people. For example, if I were to hire a coach, I would want someone who is highly successful with more skill and experience. The funny thing is the person I would hire cost very similar to these new coaches who at the scene in the last three to five years who haven’t really been investing for maybe four to six years, some of them have investing less than that, and have even worse or even worse, have dubious track records of investments themselves. This market downturn and higher interest rates have let me know what the real investors and coaches are. And no, I’m not going to get them here. I don’t want to be sued. But I’m hearing in the streets there are a number of investors and coaches struggling mainly folks with multiple flips and burrs, they cannot exit. Normally cash flow times like these is the ultimate stress test. Doing one’s own due diligence with the internet and social media has never been easier. It’s never been easier and fun fact of the day, many podcasters do not background check their guests, I can tell a quick update on Clydesdale capital bankruptcy. The owners Fiats Mark Smith and ox saga have turned down my invite on the show, Alex has been advised by his lawyers not to come on. So I don’t blame him went bit, Alex and I did chat and he confirmed my understanding. If you’ve been following me and my I went to networking meetings, I’ve mentioned before how these times are just part of the market cycle causing greed and hence new entrants into the market, both investors and coaches and influencers when you have lack of experience, skill and capital that leads to poor execution. And one has to wonder about the 10s of 1000s spent on coaching each year to arrive at bankruptcy at the business and personal level. If that was money well spent or not. So many have gotten burned with excessive leverage poor business models, lack of cash flow management, in times where the market was already very greedy. I’m not getting for either. The duplexes that Jerry and I bought in 2021 are cheaper today than then when we pay for them. But thankfully, they’re fully tenanted at really high rents, we got them rented out pretty quickly, and we will manage just fine. We are in this for the long term. So well beyond the next three to five years. We’re into this for like 10 years or more. But don’t look at my crypto grow stocks portfolio. Thankfully, by design, these positions were a very small percentage of our overall portfolio. Since we’ve, as I’ve shared before, over 9% of our investment allocation is towards real estate that we control. Because it’s so to me if I consider it really safe when it’s done right, and when done right can outperform the market. That said I’ll be taking advantage of both real estate and stock market going forward in this market correction. If you haven’t been around a correction before, I strongly recommend you study what happens in recessions and how many people get rich while exiting crashes all my friends with some with more grey hair than I do, who’ve been actively investing since prior to 2008. We all regret not buying more than and now is the time to write that regret. As usual, we will be covering the how tos and real estate investing via virtual webinars that are not in person. Monthly, I will networking meetings and our practical street smart tours, where we tour target neighbourhoods for income properties. Both the neighbourhood and the properties themselves, followed by a mastermind lunch, the next 18 to 24 months will be a wonderful time to be greedy, while the masses are extremely cheerful. So yeah, above market returns are available to those who invest smart with a minimal wrist. They just need to know how to do it. That’s how we’ve been doing it. Since I’ve been investing since 2005. I own real estate. It’s been here since 2010. And we have a track record of over working with investor clients, over 400 million in transactions and we have very, very wealthy clients and that track record speaks for itself. If you’re looking at me 2023 Your Best Year and to make the best decisions for your financial peace. Then you’ll want a copy of my book. The electronic version is free from my website, www dot truth about real estate investing.ca Enter your name and email and you’ll also be notified when we offer our educational events at nominal costs. In my experience we have numerous millionaire multimillionaire millionaire clients who have never paid for a five figure coach nor networking group. Just recently at at a client’s only event. I have several clients say to me that being part of a certain networking group where they met me they’re saying these are the words not mine, but meeting you is the best thing to come from that investment. I’m humbled and honoured and can’t wait to make a difference in more people. Lise onto this week’s show. We have Ken between them who is up to many great things to generate cash flow and build wealth in his real estate for him and his son. The best part is Ken is available for hire. One can hire Ken’s company legal second suites.com. For major rental renovations to your home or investment property, including basement suites and garden suites, Kenyan legal second suites has been in the news for quite some time, representing a one of his clients. A mutual friend of ours, Alex, who happens to be Ukrainian who wants to number his garage into a garden suite to rent to Ukrainian immigrants. But the rich neighbours think that added density of tenants living in a garage will damage the neighbourhood increase overall traffic and parking issues. Right. Thankfully, the municipalities are trending in the right direction to allow us private investors create more housing. Well, I won’t spoil it for you. I can explain it to you on a story yems REITs homeowners versus rental housing for Ukrainian immigrants. And today’s show can details what strategy makes up the majority of his portfolio, including cash flow source that provides some very significant cash flow. Kenza Pascaline of mine, so I know some of this portfolio quite well. It’s not what you expect, as none of the influencers out there are promoting or offering courses on this strategy. Ken shares how to invest in garden suites, including build costs plus brands. Are you seeing plussing conversion projects he’s working on both big and small 10s working on a former commercial building 10s of 1000s of square feet and converting into an apartment. He’s working on a new triplex build. So this is really a great episode for educational purposes for both big and small investors. So do have those pencils, pens and pads of paper ready? I give you my friend can be Yeah, what’s keeping you busy these days?

 

Ken  

All sorts of different stuff. Like I know I’m involved in lots of different types of projects these days, you know, anything from you know, the basement apartments and the duplexes and triplex conversions, but also involved in some, like larger building conversions, like commercial residential stuff, church conversions, triplex build, like a new build, you know, I got a land development project to that I’m working away on. And all sorts of all sorts of different stuff. I got some land severances down there, I’m also actively involved into, and kind of all shapes and sizes of different types of conversion projects. But basically, it’s all about increasing density, finding the highest and best use for for land and, and, and what that looks like, you know, so there’s, like, you know, the last couple years here, and even like, actively as of today, with the, you know, the latest provincial announcements about Bill 23, like stuff is changing, like, by the month, by the day, by the day, right. So it’s really exciting time, it’s really exciting time to be in this industry. And because opportunity is opening up everywhere, you know, which is amazing. This is one of the best time to invest in I don’t know how long, no, especially like, especially for us, you know, younger guys coming up young developers, you know, young, no investors coming into this space, like it is much easier now.

 

Erwin  

And you want to grow stage, you want to grow stages, this is beneficial. It’s terrible for anyone to try and divest. Yeah.

 

Ken  

But it’s much easier now for us than it was for the guys before us. You know, like the developers up till now have had a really hard time trying to get stuff done. Right. So for me, it’s like super exciting, because now it’s like, great, like, you guys, you guys didn’t know paved the way. And now the province is changing all this stuff. So it’s like really getting easier for us guys. So,

 

Erwin  

again, depends on the municipality, but for the big investors, they always had pretty good for us that were like, you know, below 10 units. Like it’s been a tough go like for

 

Ken  

forever. Well, yeah, up until like, you know, they started coming out with Bill 108. And that’s what kind of really spurred the changes, right? No, for sure. It was, you know, like when I was first getting in this industry, like, they didn’t have an SDU bylaw. You know, they have secondary dwelling

 

Erwin  

units, like basement apartments. Exactly. Now, more now, we’re starting to some garden suites yet. Like, you know,

 

Ken  

we were doing basement apartments for many, many years, like, you know, 1520 years, like my dad was doing basement apartments when he was a young guy in real estate. So it’s not like it’s a new concept. It’s been around for a long, long time. But we didn’t have the zoning bylaws in place.

 

Erwin  

There was no proper permitting process to allow for this. Yeah, exactly. And then let alone inspect. So then, therefore, inspectors were not trained on how to inspect for it. It basically wasn’t allowed and pretty much every municipality we know.

 

Ken  

So it’s gotten very, very, I wouldn’t say easy is not the right word, but it’s gotten much easier like less there is less rotate and there there used to be even myself to like I’m finding myself less at committee of adjustment for minor variances because they’ve cleaned up their violence and they got the right bylaws in place. Now it’s not perfect. Don’t get me wrong. There’s still a lot of like outdated bylaws or we’re up against you know when it comes to adding adding units, but you know, I do give the province and municipalities a lot of kudos to for me Any changes that you have?

 

Erwin  

Some are better than

 

Ken  

others. 100%,

 

Erwin  

you know are right next to Burlington. So it’s not we’re not we’re not given an infant that many kudos. Nor St. Catharines

 

Ken  

St. Catharines. In Burlington, like, we do work in both 40 plus different municipalities and townships. And those two in particular, are like brutal. It’s like they’re completely backwards. They don’t want it the tiny home show back in August. We had on a municipal day, we had the city councillors, and, you know, from lots of different municipalities, but, but they had some reps there from St. Catharines. And even the

 

Erwin  

counsellor I was talking to it was booing you, when you were on stage?

 

Ken  

No. Like this, the city counsellor from St. Catharines was basically saying, yeah, they’re gonna make up of counsellors right now, an older mindset, an older way of thinking about things. And that’s why you see, certain municipalities really just not come around and embrace this idea because they have this old mentality,

 

Erwin  

but the protectionist understand that nobody wants, you know, I remember getting mad at people parking outside my house. But you know, so much thought is, it makes sense, like the existing neighbours are the ones that both come in, and they don’t want development. They don’t want more density. They want to preserve their sightlines and their parking, like Ben wants on street parking, those sorts of things. I get it. I get

 

Ken  

it, like nimbyism is, it’s a powerful thing. It’s a really tough thing as a politician to deal with, especially as a ward councillor, they get the worse, you know, the first one that gets called if they have a complaint, but from the NIMBYs exactly right. So I can see, you know, from the province perspective, like why on their task force, they said, in order to get some form or fashion of housing built, like we have to start limiting to certain extent, the amount of public consultation, so it’s a hard road to walk, it’s a fine line to walk, you know, living in a democracy, you know, being able to, you know, have public consultations about certain things. But at the same time, you know, it’s not, we’re not doing justice to the everyday resident by fully engaging them and asking their opinions on like city planning matters, and zoning bylaws for which they’re not truly equipped or educated on the subject matter to really have a valid opinion. You know, like, we have planning staff and city, city planners, who have they’ve gone through years and years of education and public planning, city planning, and know they spend their lives figuring out like bylaws and how to grow the city. And then we go ask Mr. or Mrs. Smith around the corner about oh, hey, should we put a garden suite in a backyard? They don’t want to go to the city? You know, like, why are we asking them for their opinion? Right, like,

 

Erwin  

even like, there’s like a bunch of people say, it’s your favourite restaurant. I don’t want to get busy, right? I always want to be able to get a table, so I’m not gonna tell other people about it. So same idea. Yeah, NIMBYs don’t want other people coming into their neighbourhood. So it’s,

 

Ken  

you know, I’ve been up against a lot of nimbyism, like a lot of angry neighbours that you’ve had a bad event in the paper. Been in the paper of I’ve had people drag me through the mud on like social media. So like, have a couple of recent examples. So we tried to do this to garage conversion and existing garage conversion up on Rendell Boulevard and Hamilton’s in the newspaper. So I don’t mind saying the street name. But no, we had to apply for a minor variance for a reduction in one parking space. So this was before Hamilton had changed their bylaw to basically remove all of the parking requirements. So you don’t need any parking. We don’t need any parking spaces now for new St. Use and Hamilton. But at the time of our application that we still did. My personal opinion is that they did change the bylaw in light of this reaction that happened with this project on rundown. They saw the uproar in the neighbourhood about something so silly that, you know, Council and planning committee went and kind of revised the parking lot to basically remove it. But

 

Erwin  

it makes sense because with climate change the way it is there’s just so much rain, we can’t be expanding all of our parking pads taking away ground to absorb the water. Yeah, it makes less sense to not have keep creating more parking pads on property covering up lawn.

 

Ken  

Like this particular application. This property we were very close to a bus stop. We were within 120 metres of a bus, a major transit corridor. This parking was required for this garage for a unit which was only 520 square feet a little little one bed unit. And so is like even the ward Councillor agreed that parking wasn’t the primary issue here. You know, the street was wide open. There’s plenty of on street parking. Parking was not the problem, but it was the variance that was required. Yeah, it was the neighbourhood who just didn’t like the idea of a garage being converted and so we saw like 100 150 Plus neighbours sign had a petition against our application is subsequently got denied a committee of adjustment. We then appealed it to the llt, the Ontario land tribunal, and during the period of time between the denial, and when we applied for the llt appeal, the City of Hamilton changed their parking Bylaw and removed the parking requirements, which was great for us as we went and we reapply. And we got our building permit approved for the garage conversion because you guys were likely the trailblazer. It was the first application up on the east mountain in Hamilton in that particular ward. And a couple of other applications. Were some of the first ones in the city, Israel, just because we’re actively doing this been working with investors all the time, right. So soon as a new kind of chamber comes about. We’re on top of it right away. But anyways, it goes to show you that like you know, nimbyism is powerful, very powerful, very powerful. It’s not going away. It’s not going away. It’s something that size can be very problematic as we try and grow the housing supply. And to certain extent, yes, we have to limit to a certain extent the amount of public consultation, but it’s really about getting the correct common sense zoning bylaws in place, so that we don’t even have to go from our doing it more as of right, and this is where, you know, we hear the politician saying, as of right zoning, like being being able to do things as of right. So

 

Erwin  

there, we needed less red tape on certain things. Yeah, yeah. So again, like you mentioned, like people cannot make educated decisions on this. So for example, Mike, Dr. Mike Moffet. He tweeted about, he doesn’t like the whole Greenbelt expansion thing. Right. And but he’s saying it’s nimbyism, causing it. We either we either intensify existing neighbourhoods or we go into the Greenbelt. So this is why we’re going into the Greenbelt. So we know who to blame.

 

Ken  

Yeah, you can’t have your cake and eat it too. It’s like we you know, it’s a balancing act here of, you know, growing within the existing boundary or expanding the boundary. You know, we see protests on both sides. You know, we can’t even get a garage, converted without 100 neighbours coming out protesting. Yeah, the structure, there’s no change to the exterior, like every single developers application in the city, get hundreds of neighbours coming out opposing their towers and their condos. And stuff is being appealed all the time. Right. So I don’t understand how the public thinks that we’re going to get housing built, if they don’t want it here. And they don’t want it there. Where are we going to build this stuff? Right.

 

Erwin  

I think we’ve been at all benefit if all those who want more housing, go have a protest?

 

Ken  

Yeah. Well, at some protest City Hall. It’s very interesting to watch, because some of the people that are actually out there protesting. They’re the ones that need to housing the most. Right? They’re the ones who need the housing the most. It’s very fascinating. The people who don’t need to housing there are they’re busy, they’re working, they’re building their businesses, they’re growing their companies, they have a place to live, right. The people who have the time, first of all to be protesting, you know, they’re the ones who need the housing, there may be renters or low income. And they’re like, they’re not helping themselves. Right. Right. I don’t want to get too political.

 

Erwin  

I know. I know. Because this is a real estate show. We need to get some folks in the listener some tactics. So one thing I wanted to cover off is your investor. Reindl Randall Randall road on rental road. Yeah. Brandon Boulevard rental Boulevard. Yeah. How were they able to hold the property while they’re trying to convert the garage was the house already rented was well,

 

Ken  

so we were we already obtained a building permit to convert the bungalow into two units. So the main floor unit in the basement unit, we had an active building permit we’re active on the site constructing that while we’re also trying to apply for the garage. So the bungalows weekend. Yeah, the drop is still at this property is still vacant, cuz it’s still under construction. We’re still actively

 

Erwin  

renovating the property. This isn’t fun for the investor.

 

Ken  

No, it’s been very stressful on him. Yeah. You know, he’s, he’s from the Ukraine, actually. And he was going to use some of the or the garage unit for a family member from Ukraine. And so that was also you know, even on him, you know, the neighbours to basically didn’t believe him there. They kind of dragged him through the mud as well, thinking that he was lying about this whole Ukrainian thing. But it’s very true. You know, anyways, is is it’s just sad. And also nice guy. But look, we got to get the permits approved, you know, and ultimately, we got the permit. And we’re forging ahead with the garage conversion.

 

Erwin  

So Alex is a nice guy.

 

Ken  

I’ve met him at my charity event. Yeah. He’s a great guy. He’s a great guy. It just it’s sad to see him go through that didn’t deserve this. No. But it’s a result of an outdated Zoning Bylaw. And so if the city was much more proactive, right, we could have avoided all of this nonsense,

 

Erwin  

but if you were to start this practice today, what’s the difference in the process? Well,

 

Ken  

the biggest thing is parking, where they got rid of the parking like 95% of minor variances for st use, were was a result of some form or fashion of a parking issue, right landscaped area, are we gonna have enough space for the parkings? Right, they’re gonna reduce the parking or we have to expand the driveways. So now we’ve reduced our landscaped area

 

Erwin  

seriously, we remove 90% of impediments to Yeah, executing Yeah, like I’m not

 

Ken  

Committee of Adjustment anymore for parking. reductions were, you know,

 

Erwin  

what are you still doing for, like setbacks? Or,

 

Ken  

um, yeah, so for like, the latest variance obligations on that to see for is just some of our Commercial to Residential commercial projects, and especially right

 

Erwin  

before we move on to that, because I want to finish off, I want to finish off the, because my thing is, for most people, most investors, most of the time, thought real estate investing should be a side hustle. So for example, the SDU conversion, the basement conversion, the garage conversion to a garden suite that is accessible to a side hustle investor, we’ll get to the very sexy stuff in a moment. But I want to go through some of the numbers, for example. So what why should someone convert a garage sweet, besides creating more housing, very social people, very nice people to create more housing, but there’s financial implications, right?

 

Ken  

Yeah, like, well, obviously, you know, there’s another opportunity on land that you already own, to basically invest further money in and get a good return on that money, right? Let’s say you have $100,000 or $150,000, rather than going out and you know, putting a down payment on another piece of land, and investing another couple $100,000. To renovate it like this is you’ve already got that land, you already own it. You don’t feel like re qualify and go to the bank. And like you own that, that parcel, right? And so you take your 100,000 and you know, you invest it into the existing garage, or it’s not, it’s gonna be more than 100,000. So like, 150,000, to convert these existing garages typically depends on condition. Oh, yeah, yeah, definitely depends on the condition, like going to a new build structure, like from scratch is gonna cost you a lot more. But we’re seeing them around 150,000 right now to convert existing garage structures into units, whereas the new build stuff, you know, it is a bit of a sliding scale, depending on the footprint, you know, single story two story, is there a basement involved or even a modular versus stick frame? What type of foundation are you putting the structure on is a helical piers is engineered grade slab is an actual report foundation walls there. So there’s a there is a sliding scale of costs, right? Like, I’m seeing some guys do them in around the $200,000. Mark, and other people have done them up like 350 On Toronto

 

Erwin  

that everything’s over for, because they’re making them really nice, big, like, I’m

 

Ken  

consulting with a client right now. He’s got a huge piece of land. And we can do an 800 square foot like single storey structure. Well, even that’s like a bungalow, you’re building a house or building another house is very fast house on your property. Right. And so he’s probably, yeah, easily be 350 400,000 on his belt, you know, what do you think is like the sweet spot? So like we were saying earlier, like, day by day, things are changing. Yeah. So there’s been some some leaks that a certain municipalities already going to grow goes straight to fourplex. Well, so Hamilton is actually very proactive. They already back in August 12. Council had already approved for unit conversions in the city as part of their new official plan. But the Official Plan was appealed to the llt because of the Boundary Expansion issue. And so that kind of was put on hold until the province kind of ruled on on this whole issue. So they ultimately did rule on it, like we heard in the news. So back on November 4, you know, Hamilton has now approved a four unit conversion bylaw. So um, so a lot of these like Hamilton mountain bungalows, and these different types of neighbourhoods have now changed into this r1 and r1 a zone which allows for unit conversions. So you can do either four units in the principal building you could do three units in a principal building last the coach house you still can’t do two units in the coach homes only one unit in the strong

 

Erwin  

chose holism when it’s going on here

 

Ken  

that’s really opened the door to like create a lot more opportunity. You know, four unit conversions were happening anyways, like especially in you know, these these two and a half storey older Victorian century homes, three and four unit conversions were happening all the time. No, many of them were illegal twos plus an illegal third or illegal fourth. So now we’re basically just you know, recognising what was already happening so there’s good on Hamilton’s part for doing that because you know, now they can properly inspect the units they can you know, select their building permit fees and property taxes and all that kind of stuff. So it is a good move

 

Erwin  

right the path for all US investors to do things properly. We want to do things properly. Because for example, I had a friend convert a little six Plex I think the legal uses one single family home slash was chopped up into a six Plex and he converted to a triplex but it was like a two year process. Right? Yeah,

 

Ken  

yeah. So Like it’s yeah, there’s some really exciting things happening on that front, you know, and like I said, like, week by week, we’re finding out about these updated bylaws and requirements. So what I tell investors who are out there looking for opportunity is like, look for these bigger houses, look for these bigger plots of land, the bigger the building, the bigger the land parcel, the more potential opportunity, you have to do something as far as increasing density when you need to do a street tour, you know, and because zoning bylaws are changing, like things are aggressively changing right now in the province, with the bills coming out with each municipality, updating their zoning bylaws, and so you can be buying something now that may not be zoned exactly for what they want to do. But who’s to say that six months from now, a year from now, next year from now, that the zoning to change, and all of a sudden, you’d be allowed to do a four Plex or a truck or like a six Plex there?

 

Erwin  

So when we were speaking earlier about opportunity, like the bigger houses, especially with current use of single family life, you know, even if it’s the chopped up illegal, whatever, like that property, and on bigger lots is what’s been discounted the most in the current market. Yeah, it hasn’t like the prices have come the furthest off the peak. Right? Yeah. So to me, that sounds like a great opportunity. Obviously, you need a significant amount of capital. It’s not like it used to be, but that is the opportunity that is probably your, your opportunity for greatest ROI.

 

Ken  

Yeah, right now, like the sweet spot is in these little not at all, but they’re, you know, these three, four, maybe six unit conversion projects, we can’t make the numbers work off to we can hardly make them work off of three units, you really need to start getting into that fourth plus units to kind of really get your ROI and get your cash flow.

 

Erwin  

I think we shouldn’t coordinate a street tour, you know, some listeners might come out and look at some of these smaller properties that would make sense no 100 100%.

 

Ken  

Like there’s you got it, you got to walk buildings and houses a lot to kind of see the opportunity. And to see how you can subdivide, you know, I’m in houses every single week, you know, I’m looking at 20 houses and land parcels a week, not always on site, but even just online, like through through the listings or through the aerial maps and the city mapping software and like you have to be actively analysing buildings to see opportunity, right. And so for an investor out there listening, like if it was not easy for novice, it takes practice, it takes time for sure. But if this is something you want to focus on and be the full time on even, or really make this your side hustle like you got to learn your city, you know, don’t learn the province. Don’t don’t learn 4050 different municipalities. Focus on your focus,

 

Erwin  

not just city, but focus on your team. Yeah, you don’t need three cities, three different teams, that’s just yeah, not right off the bat.

 

Ken  

Stay up to date on what’s happening in your city. So that you can see opportunity when it’s right in front of your face.

 

Erwin  

And no one can pull the wool over your eyes if you’re focused. Yeah.

 

Ken  

So, ya know, there’s, there’s tremendous opportunity out there. And it’s like, you know, I was doing a consultation with a realtor actually, who was we set up a meeting to talk about, you know, opportunities so that she could then inform her, her clients. And we’re just selling the mapping software, like just the interactive zoning map on the city mapping website. And I was saying, look, here’s a property, you could do this. And this site. Here’s another one. Here’s another one, like the neighbourhoods are littered with, with opportunity, you know,

 

Erwin  

and there’s less bidders out there. Yeah. Oh, man.

 

Ken  

So yeah, man, it’s sweet.

 

Erwin  

You free January 28?

 

Ken  

No, it’s, it’s really exciting.

 

Erwin  

You think I’m joking.

 

Ken  

I’m back from my holidays. So So you know, like, it’s, it’s good, you know?

 

Erwin  

Okay, so, a lot of the people be listening to this potentially in the new year. So a lot of people are gonna be thinking, like, really ambitious goals. So before you got full time into real estate, what did you have that enabled you to go full time? Because for example, a lot of projects you talked about, like your your conversions their weekend, right? So you have no money coming in. So you must have other venues of money coming in? And to allow you to be full time. Am I right?

 

Ken  

Yeah. Like, like, my journey is no different than many, many other investors. You know, but

 

Erwin  

you’ve been a lot longer than I specifically bring this up, because there’s been a string of bankruptcies and I’m gonna guess there’s gonna be a lot more of them. Yeah, because a lot of people were doing aggressive burrs and flips. So they, again, they have no money coming in. And if they can’t get stuff done on time and exit, they’re gonna go broke, you know, for sure, obviously, like, how do you how did you not go broke?

 

Ken  

How did I not go broke or I’m not going broke? Well, like my personal portfolio properties, like, you know, the vast majority of them are student rentals. You know, so, you know, I thank the Lord for my Student rental properties. I know not every single investor likes that type of type of investing product or a student rental. But for me, it’s really kept cash flow coming in. And what’s nice is that the students do turn over. And when I hear about a student group that wants to move out, like, I get super excited, you know, cuz it’s

 

Erwin  

Well, I mean, tenant, Ontario.

 

Ken  

But, you know, it’s, it’s an opportunity for me to refresh the unit and get a fresh batch of students in there, full market rent, or even above market rent. And so, you know, just on the personal side, that’s, that’s allowed me to, you know, keep keep cash flows coming in. But I also have an active business to like, I’m, you know, the design side of the business, and the construction side of the business, all obviously brings an active income, right? And so, you know, if you’re an investor, you don’t have a active source of income coming in, yes, it can be very difficult to know, keep things going, if you’re just using all private money, but you have no other source of income to help pay those. So those interest payments, right, yeah, it’s like anyone can get a private loan or a private mortgage, but you have to pay the interest on the monthly interest on those. So you don’t have active income coming in. Yeah, that’s where people get tight, right. And people they over leveraged themselves, and they can’t make those monthly payments. And if you get any sort of delays, or hiccups on your project, permits take too long contractors or you know, the mess off or something or you’re over budget, like, you know, should never happen, right. So, I’m,

 

Erwin  

I’m being complete, sarcastic. So like,

 

Ken  

so for me, I’m a little bit of a different situation where yes, I have, you know, pretty high cash flowing student rental properties, because that’s how I built my portfolio at the beginning, which laid a really strong foundation, and then I have my active design an active construction business that are bringing also active income in. And so then when I’m getting into like my other, you know, personal investing projects like the triplex rebuild, or the church conversion of land development and opportunity, like I have active income coming in to carry and cover those interest payments, you know, not to say that, you know, like everybody else, you know, interest rates are rising and your your monthly carrying costs are increasing. But that’s why in my business, I’ve made a really conscious decision to double down on my marketing in the last couple of months, we’re doing radio campaigns now on 900, CML, we’re broadening we’re casting our net wider, as far as the types of clients that we help, my focus has always really been on the everyday real estate investor, you know, doing it for a return on investment and doing this, you know, to make money and all this kind of stuff. But you know, as interest rates have risen, the investors are the amount of investors or less coming in the door doing conversion work, right. So we’ve really switched our focus to focusing on the everyday homeowner, and helping everyday homeowner with basement units and conversions for their ageing parents, or their disabled child or their adult child who needs a place to stay. So that’s really kept no leads coming in the door. It’s like any business, when you start seeing a slowdown in the market or a slowdown in your business coming in, you have to be quick to pivot. Right. And that was happening for me, basically, you know, into June, July, August, where we saw leads, like die off from investors. You know, nobody was buying anything. Right? So I’m like, crap, what am I going to do? You know, I got to do something. To do the staff, I got employees, I got, you know, ongoing projects, we got to we got to find, right. So I’d like, I double down on my marketing. Right? You do regular rentals, too, right? Yeah, we’ve no, we’re doing just interior alterations, you know, you know, our company gets involved in, you know, kind of some custom renovations for a homeowner, you know, it’s not all just investor projects, you know, so the vast majority is, but, you know, we’re a design build construction company, contractor. So, you know, we can do all sorts of types of projects. But, you know, if you’re a business owner out there, or you’re an entrepreneur out there, when things are getting tough, don’t pull back on your marketing, you know, keep your marketing budget there, spend the money, because your competition is probably not spending money on marketing right now. But if you keep spending money on marketing, when the market does rebound, and those leads come in, who they’re going to call first or even calling you first, right, right. And that’s what’s happening right now with us, right

 

Erwin  

being being better known as incredibly important in business. Yeah, everyone needs to know that. where to go next? Can we run through some numbers for a garage? For garage conversion? No, like for example, if we go back to like the last class garden suite build that you’ve been doing? Yeah, how Big sets a empty piece of backyard. How big is it? How many square feet

 

Ken  

is a great question? Like, this is what you know, everybody’s asking me Okay, well, what’s the what’s the cost here of what we’re going to build?

 

Erwin  

Because I’m looking for like a cookie cutter solution because like our basement apartments are pretty cookie cutter, we’re all looking for two bedroom. We know we have our egress window requirements we have our fire suppression requirements is pretty, pretty similar between all of them. I’m just waiting. I’m just wondering like, what is is there a best practice for

 

Ken  

garden suite to a coach house is not like cookie cutter? Because, you know, there’s depends on the city you’re working in. First of all, great, you know, because every city will have different setbacks or gross floor area requirements were to dictate the size right? For on a bigger parcel, we’re building a bigger structure

 

Erwin  

than something else government needs to standardise

 

Ken  

a lot, we’re gonna be doing a much smaller unit. Once you access like to get into that space, you know, we’re working through a three foot gate, or do we have like a big laneway? We can drive in excavators. And right now we’re doing poured concrete foundations versus helical piers like

 

Erwin  

this and start with what are we looking for in a property? Because I think I think especially in this market, that we’re in having a bit more balanced in the market, I’ve been telling you telling everyone be more picky, and what you want. So if you’re being picky, what are you looking for in a property in a lot? If you want the option?

 

Ken  

When we’re looking at stuff, you know, let’s just take the simple, you know, bungalow model, a bungalow on a nice 50 by 100 foot lot or something there, the very first thing I look for is do we have good good side access to get into the backyard? You know, if we’re looking at doing a garden as the strategy, no, we’re getting involved in new construction. Okay. And so you know, we need good access into that dark side, you’re not only for equipment, but also know some of the zoning bylaws require a one metre wide, unobstructed pathway. And the reason for that is for firefighter access. So from the street to the entry door of the unit in the backyard, you need a one metre wide, unobstructed pathway. And that’s so that, you know, an ambulance can show up with a gurney and go down a pathway to get somebody out of the unit. Right. So So that’s first and foremost is making sure we have the space to get into the the yard.

 

Erwin  

So I guess it’d be like a bigger issue like lower city, for example, where the houses are really close together. Yeah.

 

Ken  

So in the older parts of the city, like the downtown cores, houses are much tighter together, right? This has been a very common issue. I’ve seen come up with people with properties. And I’m like, Look, you know, what, you do not have that pathway, you do not have the whip, you will not get a building permit, right? Yes, it’s a zoning bylaw requirement, but it’s a zoning bylaw requirement that has specific health and safety, which we were talking about one of respect. Yeah. And, you know, to me, if adjustments will not approve or variance for that,

 

Erwin  

then sounds like you need way more than one metre. And because the analogy I would automatically comes to my head is if you’re trying to put a pool in the backyard, you need room for equipment. Like like, you know, like a bobcat, for example needs to be able to fit through, yeah, if

 

Ken  

you’re, if you don’t have that laneway access, and you have like, you only have a three foot gate to work through, like your cost of construction is gonna be through

 

Erwin  

the roof, so you can just create it in.

 

Ken  

Yeah, but modular is not always cheaper than stick framing, like that’s a bit of a myth out there. You know, I’ve interviewed and met with lots of different modular builders as we’re exploring different options for these garden units. And they will admit to you directly that it’s not cheaper, you know, modular is not always cheaper, in some cases, it can be more expensive. And I’ve had numerous conversations about this, because we’re trying to find an efficient way of investors, there is a lot of efficiency on site, right, your overall site time is reduced because the structure is being built off site. But that doesn’t necessarily translate into lower cost

 

Erwin  

or error All right, right you know, so like we’re good corner lots be something you would target for example,

 

Ken  

no definitely corner lots right because we have no it’s with the corner properties you can definitely create a more kind of separate private coach house you know, people have their own personal driveway oftentimes, you know, you can fence the yard in such a way that it feels like they have their own kind of throw their own separate house you know, it’s a corner lots are great, they’re fantastic. He’s got to be careful sometimes with the corner lots not the principal building the house is not too far to the one side because you know, there’s still setbacks you have to maintain from you know, the rear and side lot line, but also many municipalities have a minimum setback between the house between the principal building and your coach house. And so sometimes in a corner lot that could get difficult, you know, which could could also lead to minor variance. Right. So, I’m always looking at it because these are still relatively new types of structures happening. I’m very conscious about minor variances, because I want to avoid that at all because dever you know, the vast majority of neighbours do not like this idea of you putting in a coachhouse okay, you think it’s a great idea, but Usually you go talk to 10 of your neighbours, and they probably won’t agree with you. Right. So I’m very conscious about the particular zoning bylaws of that city and trying to do it as of right now, at least in the current climate that we’re in right now until they further clean up their bylaws to make it easier. But, but as you sit right now, we’re kind of in this period of time between the passing of Bill 23, and the municipalities updating all of those zoning bylaws, the current bylaws are still in place, you know, and so we still have to comply with them. And so it’s, you know, to make your life easier, you want to avoid these variances at all costs. So yeah, that’s why it’s so important to know your city, to Know Your City to know where you’re working and to know your city’s bylaws, for sure. And to have a great team to help you out. If you don’t yet have the time to learn everything, give me a call, absolutely, you know, reach out or your cell phone number, or reach out to us at our website legal second, suite.com. And, you know, we’re happy to set up consultations and that’s what I do, you know, three days a week, I’m doing consults all day, I probably do anywhere from like, eight to 10 consults a week, with people discussing their projects. So yeah, there’s tremendous opportunity. You know, sometimes it’s easier said than done. And, you know, we’re dealing with construction and bylaws and permits and so there is some complexity there some technicalities. You know, it’s all about the black and white on the paper.

 

Erwin  

See, I have a 50 by 100. Lot. I have good eyesight access, what would your recommended size for garden sweet b? Again, let’s generalise and say town with the mountain. Okay,

 

Ken  

so let’s say we’re okay, we’re in the City of Hamilton. Right? Okay. So, you know, in Hamilton here, they have a 75 square metre maximum area, sorry, how many square feet is that? That’s 800 square feet, approximately, oh, that’s big, gross floor area. So maximum gross floor area, 75 square metres or 800 square feet. That’s that’s Hamilton’s bylaw. But they also have another bylaw provision that basically says the building area, the building footprint, can’t be more than 70% of the principal building. So this is where I tell people like the bigger the building are, the bigger the the bigger the lot, you know, the bigger potential structure you can build. But there’s other bylaw provisions like we have to be 7.5 metres from the principal building to the coach house, right, which is 25 feet, that’s a lot too big distance. It’s not. And that’s in any direction, right. So let’s say let’s say you have a bungalow off to the side, you have a side driveway, and then you have your backyard, it’s not good enough just to put the coach house like off to the side in the backyard, where it’s not directly behind the principal building, because they’re going to take a dimension line from the corner of the house to the corner of the coach house and gotta be 25 feet. Right. 7.5. It’s a big gap. Right? It’s one of the Zoning Bylaw provisions that I’ve seen in other municipalities too. And it is can be very restrictive. It’s one of those, what I call a not common sense bylaw. Because, you know, you could build a garage, or an accessory building or any other type of building in your backyard, and they don’t have that Zoning Bylaw provision, you can be closer. Right? You know, so it’s a bit ridiculous to me that we have this 25 foot 7.5 metre kind of restriction, you don’t

 

Erwin  

ever agree like, like house fires are so rare, like what are we trying to prevent here?

 

Ken  

I don’t know what the existing

 

Erwin  

houses aren’t 25 feet from enough

 

Ken  

for them to control, you know, the size of the structures, you know, and control density to within a neighbourhood because, like, the bigger the structure, the more bedrooms you can put in the more people in the neighbourhood. More potential cars, you know, it’s one of many things that they do to help control the size and how many of these units are out there too.

 

Erwin  

Okay, so So because she with this example, I have good side access 50 by 100 foot lot, I have my 25 feet distance, what am I looking at a building in terms of a garden suite?

 

Ken  

Well, so in here in Hamilton, we can go up to six metres so we can do single story or two story or you can do no single story in a basement if you want that’s not really happening a whole lot. We’ve designed one out like that with the basement. But as much with my client, I think it’s my might be my client, possibly. Okay, but it doesn’t, you know, it’s much more costly to build putting a full basement underneath a coach house, right? Like you’d only do that really if you’re, you’re very limited on your building footprint. And maybe your particular Zoning Bylaw doesn’t allow two storeys because some cities don’t like Branford for instance, we can’t go to stores on our courthouses, they have to be single store. Hamilton allows to store other municipalities they only allow single store and so in order to get the gross floor area, you know, you dig down and you put a basement and but that gets a lot more costly. Right

 

Erwin  

now the only reason I would do it is for the upside potentially to suite it in the future.

 

Ken  

No for sure. And like I said, you know, zoning bylaws are changing, you know, and who knows, maybe at some point in time, they’re going to Are two units in these coach houses? Right? Which would be like super exciting, you know, but ya know, like a lot of structures we’re building like, you know, we’ve done a lot of like 20 by 20s. You know, we’ve done some like, you know, 14 by 20s are 1212 by 30s. You know, what’s nice about when you’re doing a more traditional stick frame build is that you can fully maximise the allowable footprint and gross floor area of your structure. And everybody I’ve worked with so far, they want to maximise their structure, they’re not looking at putting in the tiniest structure, they’re looking at putting the biggest structure they can possibly third doctor because they want to create nice units, nice one bed to bed units, they don’t want to just feel a little tiny bachelor, right? And so I’m sorry to

 

Erwin  

surprise you there. Because from my experience, that that sweet spot is for rental income, you want that two or three bedroom. So you need usually around 600 square feet, at least for two bedroom roughly, in order to get enough rent for the build to make sense.

 

Ken  

Yeah, yeah. And so like on the modular side, when you’re working with a modular type of structure, you’re working with a preset size, right? And that’s fine if you have a really big lot. And, you know, you don’t have to worry about setbacks, and all this kind of stuff, or gross, like lock coverage or anything else, because you’re such a huge land parcel, and you have great access to no crane in a unit or to ship in a unit. And so, you know, maybe not case modular, is suitable, right, because you’re not restricted. But in so many properties, we are restricted, you know, with lot size, access setbacks, floor area, you know, building area. And so oftentimes, when we’re looking at doing a modular unit, we’re not fully maximising the opportunity. Sometimes I don’t really know how to maximise opportunities, and given that modular is not necessarily cheaper. And in some cases, it can be more expensive to say, Okay, now we’re at a point where no cost point can be the same, or potentially could be more, but then we’re not fully maximising the available footprint we have, right? So that’s what I’ve been seeing a lot is like, it just, you know, modular has its place. But especially when we’re working in urban settings, and existing backyards, it’s not always practical,

 

Erwin  

or it. So you mentioned a couple of like, you mentioned a couple footprint sizes, like 20, by 2012. By 30. How do you price these by square foot? Or do you have

 

Ken  

lost? Like, you know, I hate talking about square foot pricing? Because it’s really scope of work, when construction is all scope of work? And I’ve mentioned it a couple times already is like, okay, like, what’s your foundation? Like? Is it single storey to storey? Are you doing, you know, simple vinyl siding? Or you can do like a brick veneer for most

 

Erwin  

investors doing? A lot of data, I

 

Ken  

know, you’re still relatively new, right? What would you do? You know,

 

Erwin  

if you’re building a 20? By 20? What

 

Ken  

would you do? Right now I would. And the ones that we’re actively getting into, are like a traditional stick frame built structure on an engineered grade slab.

 

Erwin  

How thick is that slab?

 

Ken  

Typically, you’re about, like, you know, two feet thick on the sides. And you go to like a four inch slab in the middle. But it’s engineered with rebar, and Styrofoam like insulation, rigid, rigid insulation, for the frost protection. And then yeah, rebuilding, you know, depending on the city we’re in, you know, we’re building a single story or two story structure on it. And, you know, most cities are, you know, if they do have a bylaw in place, like we’re basically the max we’re going is a two bedroom, a two bedroom unit. And most cases, it’s the one bed, a one bedroom unit. Yeah. And, you know, those are kind of starting at, like 200,000 to 250 rooms. You know?

 

Erwin  

And then what do you see in terms of rent for these

 

Ken  

for rent, so we’re seeing similar rents to a main floor apartment of a house. So like, in that, you know, anywhere from on the low end, maybe 17 to the high end, like 2000, you know, and that really depends on the size, the overall size, if it’s a bachelor, one bed or a two bed unit. Alright. So but you know, there’s still not a lot, a lot of data out there are really only this construction season that we saw units going in, you know, and so in some of those units aren’t even done yet. They’re still under construction. Some, you know, they’re done construction, but they’re, they’re not rented out yet. Or they’re rented out yet, but we haven’t got the appraisals and yet, or they haven’t been refinanced yet. So we don’t know what the lenders are doing. So it’s still next year for sure. We’re going to be a hell of a lot better data.

 

Erwin  

Just a typical numbers, for example, it used to be old rule of thumb, if you could get the monthly rent to be 1% of the investment, then that’s a no brainer, right? So we have 2k some around 244 1000 Right, that’s pretty close. This is pretty much a no brainer.

 

Ken  

Yeah, like I tell people, like, let’s

 

Erwin  

look at the money

 

Ken  

right now. Given that, you know, it’s we don’t know, 100% where appraisals are going to be, we don’t know 100% Really what the lenders are going to do.

 

Erwin  

We’re bleeding edge here. Hopefully everyone appreciates that were your bleeding edge here.

 

Ken  

Every investor I’ve worked with so far has been like, one of the very first ones, you know, kind of doing them. Yeah.

 

Erwin  

So the banks have ever seen these before? I look out

 

Ken  

okay, no, you’re gonna get your let’s just say $2,000 A month rent for it. So that’s, what’s that? That’s 24,000 a year. Right? And so if it’s gonna cost you BCT, 50, to build, you know, like, that’s a good 10% return. Right that,

 

Erwin  

like, I think people would, I think pretty much everyone would love a 10% return. Right?

 

Ken  

So 24,000 divided by 250,000 builds been very rough. No, yeah, it’s 10% right to 10% cash on cash return. So if you’re gonna take that money, and you put it into the mutual fund, or a GIC or something like that, like, you know, it’s still better spent doing it this way, getting a 10% return of, you know, the alternative that you could private lend that money to you and get 10% or borrow. Yeah, but that’s just the straight cash on cash return. Like obviously, we do know that there’s an improved the property, we’ve improved the property, we do know that there’s appreciation there on the property, you know, we do know that that there’s no principal pay down on that. If it’s a loan, you know, that there’s principal payback on there. So like, we do know that the return is higher, but I tell people look like just very simply, you know, run the math, you know, if you’re happy with just that basic simple metric, have a cash on cash return and do it.

 

Erwin  

And this is why I love especially the two car car garage conversion, if you’ve can find a good one. That’s one that’s in good shape, because then your renovation budget like half

 

Ken  

Yeah, no, exactly similar, same rents. So you know, I love the existing houses, the existing garages, because, you know, we don’t have to worry about setbacks. You know, with existing garages, they could still they’re even more vaguely six inches off the fence line. And it doesn’t matter because it’s an existing structure

 

Erwin  

that American put your garage, Guy garage, but really close to his house, but it’s existing so,

 

Ken  

so So yeah, like these existing garages are amazing. You know, if you can find a good solid one, like a good cinderblock garage, or something good brick veneer garage, like, good, solid structure. There’s not that many out there, though. You’d be surprised, you know, you go look at an aerial map of the city and you start

 

Erwin  

I know by hunting for sale, don’t for sale? Sure. If you want to buy one today, it’s probably not a heck of a lot of them. So that’s the warning I’ve been giving people giving people Yes, the market expect the market to decline until probably April, March, April, and then things will probably start picking back up. But you can’t just wait to the bottom because you can’t find these unicorn properties that easily. Yeah, right. Unicorn unicorn makes makes itself available. You kind of gotta get it. Yeah, because it won’t be available in the spring. It wasn’t will not be available, like this time next year.

 

Ken  

No, it’s gonna be it’s gonna be really interesting seeing what happens here. Like, I’m excited, you know, like these new changes in Hamilton with these, the r1 and the r1 a zone like these four unit conversion zones, like, like hack, if you have a nice big, big house with a garage like, easily default limits, you know, your neighbours not going to like it, because they think that it’s only a single family home zoning, but they have no idea what’s coming. You know, that’s,

 

Erwin  

that’s the future because that’s like, that’s exactly like downtown Toronto. Right? Like, there’s tonnes of houses being converted. Yeah. And there’s like, no resistance from the city, like the city is incredibly supportive of densification. Especially if you’re near transit, like you don’t need like any parking. And the stories I’m hearing from folks in Toronto, right, like, you mentioned that you weren’t 320 metres from a bus stop. If that was Toronto, they remove all requirements of parking.

 

Ken  

Shouldn’t be like, Oh, the tower shouldn’t be, you know, because that we need to encourage transit. When you remove, like, just parking, as an example, like, what we’re doing is we’re allowing the market to dictate what should happen, right? Like, if a tenant is not going to rent that unit, because it does have a parking space. Like, yeah, that landlord will quickly switch gears and be like, You know what, I can’t rent out my unit because I don’t have a parking space. Well, on the next project, I’m going to make sure that there’s a parking space. Yeah, you know, so like, it’s in the rent will be cheaper. It’s supply and demand right. Now, why are we telling people how to live? Like, why are we telling people, you know, oh, you should not live in a 300 square foot unit, or you should be living in an 800 square feet, you know, like myself and my family. You know, like, everybody’s living situations are different, right? Everybody’s needs are different. We have to have a wide spectrum of different types of options for people.

 

Erwin  

Alright, can we move on? We just a lot of you have lost sexy stuff to talk about. 75 hard

 

Ken  

75 Finished. I did. Yeah. I, shockingly, but I did you. So how many people started out with you. So when we first started, we set up an accountability group, and we have 83 people in our accountability group. So before we officially launched, we had that many people in our group, how many people you think got started. So how many people fail to start, so more than half failed, who even start, so they got excited, they join the accountability group. But they didn’t even start day one of the challenge, you know, there, there are more there just to make themselves feel good. And don’t get me wrong, it’s good to be part of a group with other people doing stuff so that you can feel motivated, like we do it all the time. We’re joining Facebook groups for land development, even though we’re not land developers ourselves, we get there just for education and to get motivated, right. And there’s, there’s something to be said for them. But this was an accountability group. Okay. And people joined it to be free. It’s free. So yeah, more people are gonna join. Yeah, but they’re, you know, the joint have to be held accountable. And yeah, sure enough, you know, not even half even more than half didn’t even start. So that was really interesting. And then yeah, another, you know, I would say, so, let’s say just for easy math, you know, let’s say like, you know, whatever, 50 people didn’t even start, okay. And then there’s probably probably another 20 people who did start, but then they quickly failed. So like, whether it was day two, or day three or day 10, they failed to do one of the five daily tasks, and then they didn’t even restart. Like, they didn’t even bother trying to restart, you know, then there’s probably another like five guys who, yeah, they made it quite quite a ways through like, they made it to like day, 30 day 40 day 50. But then they failed for whatever reason, like they got sick or something like legitimate happen, and they failed one of the tasks, but they restarted and they’re, they’re like, no, they’re back on track. And they’re now did like day 50 or something. So like, there’s a bunch of guys that are okay, are still working through the but people who actually started and finished, I think there’s only like four of us out of the 80 people who actually okay, or 83 people have actually started so very interesting. Just

 

Erwin  

over, I’ll give credit to the folks who are continuing and going. I’m just gonna assume they’re strong enough to finish. So we’re talking about nine out of 83. So let’s just over 10%

 

Ken  

Yeah, yeah. And I would say that’s probably a stretch. So it goes to show you that you know, that Yeah, well, one the challenge, you know, the challenge is difficult. I’m not, I’m not gonna say it’s easy, or easy at all, it’s definitely a challenge. But it goes to show you that like out of, you know, out of the public or other people in general, like, you know, people in our community 80% of people don’t do anything right

 

Erwin  

now, I think it’s even higher, because there’s people like me that even join during the accountability group.

 

Ken  

It’s that small percentage of people who actually take action, who actually follow through who actually commit to actually get it done that fall through all of this, you’re gonna see results, right? And you got to take action. Right? So it’s very interesting. I’m actually shocked that I actually even made it like that actually completed, I thought I was going to fail on day five, too, you know, because I’ve never been a guy to work out go to the gym, like no beyond diets and read books and all this kind of stuff. Like that was not me. I wasn’t that type of guy. But, but I was I was the one who started the accountability group. And so I’m like, crap, I can’t like I can’t be the guy who starts the accountability group and and not be the one to actually finish it either. So So had a lot of motivation to keep going. That’s obviously I kept it going. So congratulations.

 

Erwin  

Yeah, you look I can see in your face. You look slimmer. Yeah, I

 

Ken  

know. I’ve definitely lost weight of oxygen. No, I did put on some muscle mass too. So like I’m still alive. So I’m done. 75 heart I’m not doing the five daily tasks anymore. But there’s couple things I am still keeping up and keeping up. I’m doing one workout a day now. Just primarily strength training. You know, as we get into the colder weather here, I’m not as eager to be outside on my bike, and biking so I’m just sticking with indoor strength training

 

Erwin  

if you check out his lift party maybe tried his lifting. Stop. That’s like a virtual biking indoors. You put your bike into basically a treadmill for your bike like a trainer. Yeah, no, but it’s all kind of a peloton, but it’s been more a bit more for racers.

 

Ken  

Okay, yeah, I have a trainer from my from my my bike. So I can ride out inside

 

Erwin  

there. Yeah. And then it’s interactive. Like it’s part of your no oh, there’s dinner. I just

 

Ken  

had my road bike and I put it into a trainer and I can ride my road bike like just like a stationary bike

 

Erwin  

or Yeah, so you can actually make it like a character video game. You can gamify and other people all over the world will out with you. Interesting. Okay, yeah. So you see everyone starts to see each other’s avatars.

 

Ken  

Okay. Check it out,

 

Erwin  

I’ll share with you the I have a couple friends as well. It’s not cheap, but I think you can afford it.

 

Ken  

I definitely recommend it to people like it’s no, if you actually finish the challenge, it actually is life changing, you know, not just physically but you know, the daily reading of self development books can have a huge impact on your mindset. You know, for me, I read two parenting books I read. So I read like 14 gospel principles of parenting, I read the seasons of fatherhood. So the different stages of life that we go through as fathers sort of founders to be very, very beneficial with, you know, how I how I’m raising my son, and being a parent, and all of this. And then I read how to win friends and influence people and never split the difference. So like in a negotiation book, and I found those two books very, very helpful with how I work with my staff, how I work with my clients, being a lot more patient a lot more empathetic, being a lot more intentional about giving praise, you know, really praising my guys are really praising the team, giving kudos really pumping people up, you know, when I pick up the phone, and I’m talking with the client, putting a smile on my face, trying to come across in a positive manner. You know, like, all these types of things can have a huge impact on your, on your brand on your business, and ultimately on your pocketbook. Right? And so, yeah, super thankful that I decided to do the challenge. And I encourage anyone out there listening, like definitely take a look at it and do it because it does all of the guys I’ve seen who’ve done it, they’ve been able to scale up been able to do more, and they’re doing more and they’re doing amazing things in their life because of it. So I’m not trying to reinvent the wheel. I’m just following success and I’m following other people that are doing amazing things and just copying what they do.

 

Erwin  

Amazing. Well, I’m sure a lot of you will know what else you’re up to because you’re doing another amazing things. Which project would you like to cover next your triplex build or your conversions I

 

Ken  

got a triplex build going on in in Branford that was a really interesting experience. Like we’re actively on construction right now we’re on we’re on a couple of weeks into the build. But again, that project needed a minor variance. And so it was interesting was one of my first experiences where I had to be escorted out of city hall by security because we had 25 neighbours come out you’re building a triplex protesting my my project they’re doing this for your safety date. Yeah, they did mine. Yeah, yeah, very interesting. No, that got quite heated in the council chambers where we were having the minor variance here and again, like you know, people were were digging through my personal Facebook digging up stuff I said about housing trying to use it against me for building a triplex or monster although all I was doing was applying for a variance to be able to put a full second story on a bungalow, and make the house into a triplex and like a triplex was permitted like as a use. It was only a gross floor area increase that I needed, but again, so a lot of like misinformation and misunderstanding of the technicalities of the Zoning Bylaw and how we’re asking neighbours for permissions on stuff that they really aren’t fully equipped or educated on to make an informed opinion on and

 

Erwin  

usually selfish opinions Yeah, I don’t want to be I don’t want to hear construction now once the construction vehicles I want construction vehicles blocking my driveway. Like I get it

 

Ken  

Yeah, but that’s not really interesting anyways, yeah. How to get escorted out of City Hall security walked me to my vehicle to make sure I got there safely.

 

Erwin  

That’s nice. Yeah, no

 

Ken  

is definitely very appreciative of them. But so yeah, that was an interest anyways, the project is underway and super excited about about to build and to be nice. So we tore down old bungalow, we tore it down to the existing cinderblock foundation we put two courses of cinderblock on the foundation to raise up the basement height and then just doing a two storey framed structure on top and make it into into a triplex

 

Erwin  

when you first look at the property what was it about it that you that made you interested

 

Ken  

in once a corner property? And yeah, it was just it was well priced? It was an old outdated, rundown bungalow not was very well it was on MLS, but it’s just very very well priced. Given the current market that was in when I was when I bought it bought it about like 10 months ago,

 

Erwin  

right? Was this such a bad condition that like no bank would touch it type thing or? Um, no, I

 

Ken  

got a mortgage on it from the bank. Oh, like a regular schedule a bit. Yeah, CIBC mortgage, oh, you know, just regular typical a lender on it. But it was it was quite rundown. It was quite rundown. And you know, I wanted to increase the density there. So like I first explored you know, doing a typical basement apartment, but I’m looking at it like shoot, okay, well, maybe I could do a second floor on this. And then you know, then you start looking at what it would take to put the second floor on the project and I made the executive decision to basically let’s just tear it down to the block to the cinder block and rebuild one of the bank. Think about the the bank is excited about it. They’ll find out when I do the refinance. No, no, I’ve already been talking to CIBC about construction financing on it. I ended up not going with them for construction financing. I’m just self financing it. But by no the bank was the bank is okay.

 

Erwin  

Why did the decision to do a top up versus garden suite? Like I could walk us through the math? Because again, we’re trying to educate? Yeah, mainly novices like I’ve never done I didn’t top up, but it was like over 20 years ago.

 

Ken  

Yeah. Well, so like anything like any project you’re looking at doing. It’s all you start with the Zoning Bylaw, and what you can and can’t do, right. And in this particular zone, in the City of Brantford, which was an RC zoned residential conversion zone, we weren’t permitted to do courthouses in that zone. But we were permitted to do what they call the converted dwellings, which is basically, you know, we can actually do X amount of dwelling units, as long as you can comply with building code. So so in this case, we’re applied as a converted dwelling. But one of the bylaw provisions was for a converted dwelling, we can only increase the gross floor area of the building by 50%. So in this case, we had a bungalow, but they only counted the main floor as the gross floor area. So I would only be allowed to increase by 50%, which would be only half of the main floor. So it will be very expensive. A second, a full second floor. That’s 100% increase on that, on that gross floor area. Not uncommon. No, no, it’s ridiculous Zoning Bylaw. It’s so it’s such an outdated Zoning Bylaw, which I had my you know, own arguments with city staff about it that they had to clean up the Zoning Bylaw provision that they hope to, you know, increase density here, but no one

 

Erwin  

would do it then if you if it was just 50% Well, it’s way too expensive.

 

Ken  

The zoning bylaw dates back to the 1950s. But people weren’t like expanding buildings for adding additional dwelling units for

 

Erwin  

Britain have a housing crisis than the other. So it’s only been in the last like, you know,

 

Ken  

three years that people actually started expanding the buildings for additional units. And now they’re discovering that this Zoning Bylaw provision is really restricted triggering minor variances I’ve another one in right now tune the city for the exact same Zoning Bylaw provision, but you know, so for the neighbours, they see a minor variance application for 100% increase in growth they think I’m building a mansion you know, they think I’m building an apartment building that was some of the comments that were coming back. I thought you’re doubling the size of the foot. I’m like no, this is we’re only adding a second floor to this house in the zoning permits three floors. I wasn’t fully going for three floors I was only going on two floors. Anyways I don’t like you know interesting stuff when you’re dealing with with neighbours and zoning but yeah super exciting project super exciting project you share some numbers like what the property cost you so I bought it for basically for 454 and 50,000. My build is about 500,000 and I got an as built appraisal in today’s market 1.2 million on it. So I had the appraiser get done did this so I hired an appraisal company to give me an as built valuation on the building

 

Erwin  

right you know you made money already if I haven’t built it finished it

 

Ken  

Yeah, yeah. So that faster basically I was I bought for 450 My build price is about 500,000 including the landscaping and driveways and everything and then I my as built is valuation is 1.2 in today’s market so obviously once construction is done and it’s rented and actually get a true like bank appraisal on it. We’ll see what comes in at that time.

 

Erwin  

But sorry to have you back do you have pictures on your Instagram on this property or anything?

 

Ken  

It’s on my Facebook right now I’m doing updates on my Facebook where can where can folks find your Facebook? I’m the only can beacon dam in existence on planet earth so you Facebook slash can be condemn Instagram slash can be condemn my website, obviously legal second suites.com

 

Erwin  

They will have this on the show notes folks. Sorry, what do you think he rented for?

 

Ken  

Yeah, so basically we’re looking at about so we have we’re going to do a two bedroom basement unit. So I’ll be putting that up around 1900 Plus utilities. We have a three bedroom main floor unit, which we’ll be putting up around probably 21 or 2200 ish. And then we have a three bedroom second floor unit which would probably be very similar around that 2000 Maybe maybe 2200 range. Also three bedroom or Every bedroom, so one, two bed and two, three bed units,

 

Erwin  

and then how much parking you have on site. I’m talking about parking so much.

 

Ken  

Yeah, how the required parking. So we’ve made we have X kids, it’s a corner lot. I have two driveways on the property, one from each street. And so we can actually fit basically, upwards of six vehicles. So basically three, three parking spaces, but in tandem. So each each occupant or each tenant can have basically two cars parked in tandem. So that’s trick Yeah. And that’s what that’s what’s nice about corner lots is that you can have multiple driveways oftentimes. So it can really help your parking situation. And in this case, in this zoning, they still had parking requirements.

 

Erwin  

So hyper comply with parking. Sounds pretty sweet. I’m gonna keep this one.

 

Ken  

So yeah, that’s gonna keep it as a long term buying hold. You know, it’s kind of just a personal one I’m working on right now just for my own fun. You know, it’s not like necessarily like a slam dunk investment. But but it’s still I’m getting my money out. It’s going to be good. A good project. I’ve done know, others have been like, you know, a lot a lot better projects. But But yeah, it’s it is what it is. It’s good.

 

Erwin  

Now slam dunk. Till that hurt yourself. Hey, we’re running out of time talking about want to tell me about one of these, like larger, aggressive commercial conversions you got going on? Because that’s that’s like not that common?

 

Ken  

Yeah. So yeah. So this year, we’ve definitely pivoted into the Commercial to Residential building conversion. So looking at vacant office buildings, and converting them into like, you know, 20 plus kind of apartment units. So we do have an active project right now. We’re actually purchased it. We’ve submitted for the building permits, we’re still waiting for the building permit. But basically, it’s a vacant medical office building, downtown Hamilton, and we’re converting it into 22 apartment units. So really exciting project. It is a yeah, basically a cinder block, building cinder block in steel trust building to a very solid building. It’s really just going in and framing up interior partition walls. And what was nice about this project is that we could do it all or

 

Erwin  

it’s not just that, but we’d like to do it all the wiring, and everything. There’s no kitchens and bathrooms already.

 

Ken  

There’s there’s a lot going in on the mechanical side, and for sure, 100%. But what was nice about this practice is that we could do all as of right zoning, so it was zoned to permit multiple dwellings.

 

Erwin  

And that was absolutely key, wasn’t it? Yeah.

 

Ken  

Key key point is it permitted to 100% residential. And the other key point was that because it was an existing building, and in this particular zone, when we convert existing buildings, there’s no parking requirements. So because this building took up 100% of the lot, like there’s no excess space for parking. But because we’re just converting the existing building in this particular zone in Hamilton, we didn’t require parking. So we could do all 100% As of right routine, which is nice, because we’d have to go through any sort of like rezoning or any sort of like additional processes is really just a matter of doing the building drawings to mechanical drawings, and then submitting that to the city for this type of project that the mechanical design took some time to sort out because we were we’re also applying for the CMHC MLA select programme. And we’re trying to hit some of the points with MLA. So we’re doing that through basically energy efficiency. And no, we’re doing it all through energy efficiency. So we’re sorry, we’re targeting 50 points with a multi select, and we’re doing it all through energy efficiency. So there was a lot of back and forth between our mechanical designer and our energy efficiency consultant to sort out the mechanical systems here. And like when you’re getting into any sort of larger, multi unit conversion building, mechanicals, typically is our biggest hurdle, figuring out you know, how much electricity capacity can we get to the building, we’re going to split everything Individual heating systems are going to have a common heating system for the building. You know, there’s a lot of decision points that happen along the way. So in this particular in this project was no different. There was a lot of back and forth between our our contractor like our H fac contractor, H fac designer and the energy efficiency consultant. But anyways, really excited

 

Erwin  

for him to fight with the city and neighbours though.

 

Ken  

No and what was nice, it was vacant. So we didn’t have to go in and evict tenants. There was no tenants, there is a vacant building. We can go in and we can design it however we like. And we can set the rents to whatever we like, and they’re not subject to rent control. So that’s what’s really nice about doing these larger projects, these Commercial to Residential conversions, is that you know, the biggest thing is we’re not dealing with existing tenants and anybody who’s bought a larger multi unit building and trying to do Cash for Keys right now is Having a hard time, the price for Cash for Keys has gone up tremendously. Like we’ve had a building recently where, you know, it was in need of major renovations, like it wasn’t a habitable building. But the tenant was offered up to $30,000. And they still would not leave, because they had no other they wanted to accept the money. They could not find another place. There’s no vacancy, right? Yeah. And they may not qualify and didn’t qualify, nobody would accept them. So sometimes, people want to accept the money, but they just can’t find a place. So anyways, that’s what’s nice about the vacant commercial stuff.

 

Erwin  

Can you share some numbers? I’m gonna let you go.

 

Ken  

Yeah, we bought it for 2 million, our renovation budget is 1.7 million on it. And the as built appraisal is 6 million on it. And it’s about an 18 month timeline. And it was costly to carry this on, like monthly cheering costs. Well,

 

Erwin  

we have because we need to stop people having going bankrupt. People seem to forget to like bail, calculate carrying costs.

 

Ken  

Amazing financing on this building, actually. So we have is BC 7.95%. And that’s mortgage plus construction. So we have 100% financing on the construction through our lender magenta. And they’re paying out the construction money in $300,000 drawers as we as we need it.

 

Erwin  

That makes me a good contact for from agenda. So shut up agenda.

 

Ken  

So we had a really amazing financing on this on this project. So definitely, you know, the we’re not like paying through the nose on monthly interest. You know, for a project of this size, like to get mortgage plus construction for 7.95% is great.

 

Erwin  

And then when you can also rent for

 

Ken  

the total building, like all of the units. So on average, we’re targeting about 1700 a month on average for their 22 units.

 

Erwin  

Yeah, I have a calculator too. I want to let you go after this. 1700 times 20 units. That’s over 34 grand times 12 Started with 35,000. It’s almost 450 Oh my god. So we’re, we’re also taught foreigner that’s almost 450,000 in rent plus utilities.

 

Ken  

Yeah, plus utilities. Everything is separated. Yeah, we’re taking you through the CMHC programme. So we’re going to get a really good exit financing on the back and when it’s done. And we’re also applying for a lot of city grants, because this particular building is in it’s in a box in the street village.

 

Erwin  

In the winter, where the rents are low.

 

Ken  

Well, yeah, so there’s cinnabar street village. And and there are their smaller bachelors and one beds.

 

Erwin  

Oh, well, yeah. Well, how come you chose the smaller units versus two bedrooms? Well, so

 

Ken  

this is great top disagree. Point is how do you define your unit mix, when you’re doing a larger building, it’s really like, You got to consider the location that you’re building is it right, and this location, being in the Burton street village area in the downtown core of the city, the demand for Bachelors in one beds is much higher than demand for two beds, or even three bedroom units. And when it comes to building, it’s all the building valuation is all about your noi, your net operating income, right? So basically, we’re looking at the building footprint, you know, how many units can be fit in the building. And basically, you know, there’s a lot of things to consider like windows and means of egress and other building code requirements, minimum unit size, and all this kind of stuff. And be able to thought through what we came up with, we came up with like, you know, a mix of bachelors and one beds for the unit mix. And that’s, that’s what in demand in that part of the city. You know, this was up on Hamilton mountain, we would definitely be wanting more ones in two bedroom units, not bachelor units, it’s really important to know, know where you are in your city, and what types of units are in demand in that type of location. Yeah,

 

Erwin  

fascinating. All right, Ken, we’ve gone way over. I think, hopefully, the listener enjoyed this because I enjoyed this. I took several pages of notes. Yeah, no,

 

Ken  

thank you for having me. And it’s great to come in and kind of chat with you and get updated on stuff. And there’s a lot of things happening right now. And I’m even having a hard time trying to stay up to date on all the changes, you know, cuz they’re happening. They’re happening weekly right now. It’s crazy. It’s awesome. But it’s exciting. Yeah, it is. It is,

 

Erwin  

especially as more deals come up. So Ken, thanks so much for doing this. Oh, where else can folks reach you? You shared your screen? Yeah,

 

Ken  

basically, Facebook can be condemned. Instagram can be condemned legal. Second suites.com. You can definitely go there. Please book a consultation. If you do have a project coming up. You do want to talk about it. You know, I’ve been in a position in my life or a point in my life that I have a fair bit of experience in different types of things. And so we’ll definitely talk about your project and see if there’s a way that we can help you

 

Erwin  

raising and then what about the do get ahead are these for sale on your website?

 

Ken  

No these are just for fun know what I got these hats sweet John legal and the basement of business so I got these tasks to give to my clients so when they successfully finished a project, then I’m gonna give them the hat basically saying sweet on legals

 

Erwin  

at least was signage in the in the suite for the tenant 10 Thanks for doing this.

 

Ken  

Yeah, thanks.

 

Erwin  

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Starting Out in 2006 With Mid-Term Rentals To Closing on 1,700 Acres of Land to Develop with Victor Menasce

Welcome to the Truth About Real Estate Investing Show!

We have a pretty amazing guest today in Victor Menasce, who’s quite big time. 

For example, he just closed on a 1,700-acre property with a 20-30 year plan to build thousands of houses, but he didn’t start there. 

We rewind to Ottawa, 2006, when Victor side hustled operating mid-term rentals and dove in deeper during the financial crisis of 2008 by building a team in Philadelphia, Penn, US and buying up a lot of distressed properties.

 
 
 
 
 
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Victor shares a lot today about how to scale up a real estate portfolio and how novices can get started interning/volunteering on development projects to gain invaluable experience for a smoother transition from side hustle developer to full-timer. 

There’s Victor’s strategy of “buy on the line, move the line” for investing in gentrifying locations.  

We’ve been practising the same strategy in our local markets; I just didn’t know there was a name for it.  

In Hamilton, the old rules were to stay south of Main St. and West of James St….

As a rule breaker, we didn’t listen, knowing affordability would cause the areas we targeted to appreciate, and it worked out incredibly well. 

If you, too, are looking to build a team in the areas east and west of the GTA where properties actually cash flow, then don’t miss out on our Street Smart Tours! 

New to 2023, we’ll be operating tours of income properties in Oshawa, followed by a mastermind lunch for which I’ll also be in attendance. 

This an excellent opportunity for investors of any level, especially novices, to see how the FOUR-time Realtors of the Year to investors service their clients, enabling them to build intergenerational wealth.

Make sure you’re on our email newsletter along with 10,000+ other hard-working Canadian investors available at www.truthaboutrealestateinvesting.ca

I hope to see you in 2023 at one of our iWIN Real Estate meetups and/or Street Smart Tours.  

Like Victor says, there are going to be some great deals available in the near future.  Learn what a deal looks like and work with an award-winning team that produces successful, multi-millionaire investor clients.

BTW, Victor is also the President of OREIO, and if you’re in Ottawa, you want to check them out. 

In my experience, the value and quality of the group can’t be beaten; hence I’m a paying member as well.

Please enjoy the show!

 

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 FREE Online Training Class.  We will be back in person once legally allowed to do so, but for now, we are 100% virtual.

No need for you to reinvent the wheel; we have our system down pat. Again that’s  www.infinitywealth.ca/events and register for the FREE Online Training Class.

 

This episode is also brought to you by www.stockhackeracademy.ca, where everyday real estate investors learn the best practices in stock investing to earn cash flow in about 15-30 mins per day from their mobile phones. After real estate, Stock Hacking is the next best hustle, as you’ve heard from many past guests on this show. Among our students last year, 31 trades were shared with them. 30 were profitable for an over 96% success rate and 12% return on capital. I will be giving free demonstrations online, very similar to the one I gave my kid cousin, a full-time musician who just made a 50% return in 2021.  Past, of course, does not predict the future, but if you’d like a free demonstration, go to www.stockhackeracademy.ca in the top right and click FREE Demo.  At the demonstration, I’ll have special bonuses. We do not advertise publicly for all my favourite listeners, and I only have two more demos to give in the next few weeks.

Don’t delay www.stockhackeracademy.ca, what I consider the future of side hustles with real estate so unaffordable for many.

 

To Listen:

Audio Transcript

**Transcripts are auto-generated.

 

Erwin  

Hello, welcome to the truth about real estate investing show. It’s Erwin Szeto and we have a pretty amazing guest today in Victor Menasce who was quite big time. For example, he just closed him in his group Western capital, they just closed on a 1700 acre property that’s 1700 acre property with the plan over 23 years to build 1000s of houses, but he didn’t start there. In our discussion with the victor we do rewind back to Ottawa 22,006. When Victor started out his side hustle operating midterm rentals. Then he dove deeper into real estate investing when he found the opportunity during the financial crisis of 2008. By building a team in Philadelphia, Pennsylvania, us in buying up a lot of distressed properties. Victor shares a lot about how to scale up a real estate portfolio con novices can start to get started by interning slash volunteering on divan projects to gain invaluable experience for a smoother transition from side hustler side hustle developer to full timer for those who followed me for a while you know, I like to go slow and I do not like risk so hence I think it’s brilliant path for men need to take before they go full time is to learn from pros who are actually full time themselves and successful in doing so. There’s also Victor strategy of buy on the line move the line for investing in gentrifying locations, we’ve been practising the same strategy in our local markets, I just don’t didn’t know there was a name for it. So for example, in Hamilton, the old rules were to to invest South Main Street and West of James Street, myself being a rule breaker. We didn’t we didn’t always listen to those knowing that affordability would cause areas that were outside of the ideal areas to appreciate. And that has worked out quite nicely. If you two are looking to build out a team in the areas east and west of GTA where property is actually cashflow, then don’t miss out on our street smart tours new 2023 will be operating tours of income properties in Oshawa, followed by a mastermind lunch for which I’ll be in attendance as well. This is a wonderful opportunity for investors of any level especially novices to see how we the four time Realtors of the year at I win real estate to investors service to our clients, enabling them to build multiple intergenerational wealth, we have over 400 clients and among our clients, we have close to 50 clients who have generated a million dollars or more in net worth increases. So make sure you’re on our email newsletter of along with the 10,000 plus other hardworking Canadians. And that’s available at www dot truth about real estate investing.ca. Let me slow down WWW dot truth about real estate investing.ca. That’s my website for this podcast. On the right side, you can put in your name and email address and you’ll be put on our newsletter, I hope to see some of you in 2023. At one of our island real estate meetups or at our street smart tours, like I mentioned, we generally do Hamilton on the west and we do our show on the east. Like Victor, our guest says there are going to be some great great deals available in the near future. Learn what a deal looks like and work with an award winning team of professionals who produce successful multimillionaire investors like ourselves, by the way pitchers also the president of Oreo. And if you’re in the Ottawa area, you want to check them out. In my experience, the value and quality of the group at Oreo can’t be beat. Hence, I’m a paying member as well. Please enjoy the show. Victor, what’s keeping you busy these days?

 

Victor  

Oh, my goodness, we are so busy with projects, projects that we started before market conditions changed. And it’s been very interesting to see how the marketplace has changed. It’s forced us to pivot it’s forced us to pause a few projects that made sense a year ago and now don’t make sense in the current macroeconomic environment. But it’s important to be agile. And so that’s been a lesson that we knew and felt like we had to relearn it again. Okay, that’s a lot there.

 

Erwin  

To me, it’s a lot because I’ve seen lots of people attempt to pivot and pause. Anyways, there’s a lot to get into. Okay, but I’m gonna I want to come back to this, because I want the listeners to understand where you’re coming from. Okay, so you’re pretty successful. So let’s see, let’s start. Where do you go to school?

 

Victor  

So, so interesting. So my family background. My parents, both professionals. My dad was a dentist had his dental practice on Park Avenue and 73rd in Manhattan. My mom was the second woman in history to graduate in architecture from Cornell so she worked as an architect in Manhattan on some landmark buildings, and then they decided that it wasn’t a good place to raise a family. So we moved to Halifax, Nova Scotia, of all places.

 

Erwin  

Oh my god, that couldn’t be more different. Absolutely.

 

Victor  

So I grew up in small town, Halifax, went to Dalhousie University did my electrical engineering degree at Dalhousie and knew that I wanted to be doing microprocessor design in fact, for my fourth year project ended up designing a small eight bit microprocessor and that gave me the entree to get into the into Bell northern research in Ottawa in their microprocessor development team and That was the launch of my electrical engineering career, which I did for close to 20. Some years, right? Wait, is that Nortel? Yep. Bell northern research was the r&d wing of Nortel. And I was loaned to many different organisations I was loaned to Motorola to work on their microprocessors. And we ended up doing some partnerships with IBM and Hewlett Packard and all kinds of different processor based things. And that was when I was at Nortel. And then after I left Nortel joined tender semiconductor, which was a private company at the time. We were designing chipsets that were used for embedded applications. And again, microprocessor system design, and had chips designed into all kinds of applications all over the world cellular base stations, you know, I’ve got a chip in the Patriot missile, I’ve got chips all over seatback displays, and in most Airbus aircraft, all kinds of weird and wonderful applications. And that was most of my electrical career was in microprocessor design. And then I rose through the ranks into senior executive roles, did five m&a deals, did one IPO did one startup which was acquired, and actually to start ups, both of which were acquired. And then I think it was about my 18th trip to Tokyo, and a year and a half, we were building a new cellular network with the number four carrier in Japan called Wilcom. And it was just burning me out physically, emotionally, to be doing that, that 12 hour time zone trip every few days. And I simply decided to be to take a left turn in my career and move into the world of real estate investing on a full time basis. What year is that? And how old were you? That would have been 2009? Oh, interesting

 

Erwin  

timing. Yes, absolutely. Sorry. Quick question. A few quick questions, because that was a mouthful, you just, yeah. Because you probably just ploughed through like 2030 years of career there. Yeah, I imagine you were friends with Terry Matthews, then to

 

Victor  

Terry was the chairman of our company, he was the chairman of tender semiconductor. So we got some exposure to him. And he had some very interesting philosophies about even when you’re a private company, run it as if it was a public company, so that when you do go public, the transition is inconsequential. You don’t have to change anything, you’re already a public company, just by virtue of the way you operate. And so he taught me an awful lot about corporate governance, how to put that core executive team together. And it turns out that that team that you put together doesn’t matter what the business is, that core team could be the same for a hotel for a semiconductor business. For a real estate business, for a restaurant, you need that same core team, the same functions exist in every single business, one of those functions, Well, number one, you need your executive team. So there’s seven functions. Number two, you need the folks that are developing your corporate systems, your corporate governance. Number three, you need folks that are communicating with your existing customers. Number four, you need the technical folks, the folks that are actually executing the business, if it’s a construction business, maybe it’s your site supervisors, then you need a quality assurance function, you need the Treasury, these are the folks that are watching the purse strings, they’re not deciding what your financial policy is, they’re implementing the policy that’s been set by the executive team. So it’s your financial controller, or your CFO. And then finally, you need to a group of folks that are talking to prospective customers. So those are the seven functions, every single business needs those seven functions. And it’s very rare, I would say it’s impossible to find the skill set for all seven of those functions in a single individual. So you may have listeners who are thinking, well wait a minute, I’m running a real estate business, I’m a solopreneur, I’m just going to grow organically from one to two to three to four as my revenue grows. But my message is that you will get trapped in a low Earth orbit that you will never escape. Because you don’t have the skills, you don’t have the skills to perform all seven of those functions. And even if you did, there wouldn’t be enough hours in the day, then you’re probably thinking, Well, I’m trapped. How do I grow from one to two to three to four? I need seven people? How can I feed seven families, when I haven’t figured out how to feed one? Well, I’m here to tell you, you gotta go bigger. It’s the hardest thing to do are small projects. Because small projects don’t generate enough profit to feed seven families or more. And you need to feed seven families or more to have a sustainable business. So you have to go bigger, otherwise, you’ll get stuck, you’ll get trapped and you’ll never escape. This is awesome. Good. I’m

 

Erwin  

glad. I’m excited. Hopefully we haven’t lost a bunch of people. I want to go sideways with this

 

Victor  

method to their madness. So think about it for a moment. If Imagine for a moment that you want to let’s say redevelop an apartment complex. Okay. And let’s say it’s five doors. And let’s say those five doors are going to generate, you know, a few 1000 A year of positive cash flow. And you might get, you know, maybe 100, grand 200 grand worth of value creation in a short time period. That’s not enough to really hire anybody. But what if you’re doing 250 300 units? What if you take as part of that a developer fee? That is calculated as a percentage of your heart construction cost? And now you’ve got a developer fee? That could be I don’t know, half 1,800,000? Do you think you can hire some skills for that amount of money? Absolutely. And that’s just one project. And guess what? The effort to manage that 250 in a project is identical to the effort of managing that five unit project, just add a zero or two, or add a comma. But the effort from a management standpoint are virtually the same. So why would you put all of your time and attention on something that’s small? And I get it, people will say, Well, I don’t have the money. They look in their pants pockets. And they say, Well, you know, they rub their two nickels together and say, I don’t have the money. So I’m just going after what I can afford. But I mean, if you did that, I mean, think about it for a moment, think what would happen, if everyone who aspired to be a doctor said, Well, gee, that’s really hard. And boy, it takes a lot of money, and I don’t have the money to do that. So I’m gonna go and be a nurse instead. It wouldn’t make any sense. Now, no disrespect to nurses at all. But if you’re aiming for one thing, why would you not aim for that one thing? Why would you go somewhere else? It’s that simple. And clearly, there are proof points. People went for years and said, you can never break a four minute mile until Roger Bannister did it. And then within a year, how many people had broken a four minute mile? This is not a four minute mile, what we’re talking about here, there are proof points are examples of people out there doing this. Okay, there isn’t a university course that shows you how to do this, I get that. But you’re not inventing anything new. The information is out there exposure to the right people as possible. And when you have that exposure, all of these things that seemed impossible or out of reach all of a sudden become normal.

 

Erwin  

Okay, so Victor, for the listeners benefit, can you describe your portfolio at all, to paint them a picture of what you’ve done?

 

Victor  

So well. So today, we’re focused, we’re probably 90% new construction, we’re primarily focused in the United States. We do assisted living, new construction, multifamily apartments, storage, we have half a dozen storage projects currently underway. We do a fair bit of land development. Right now we have several 1000 acres currently, that we are going through various entitlement processes on and it’s all about value creation, you can make a little bit of money, you can do the arbitrage thing and buy something for a few cents off and try and squeeze out a few nickels that way. But that, in my opinion is not the ticket. It’s really about value creation. So you know, let’s talk about picking asset class, anyone you want want to talk about land, you want to talk about assisted living, we talk about any of them, just in terms of how you want to be differentiated in the market, and how you create value, because that’s really what it’s about. It’s about creating value solving a problem. That is an acute problem in a marketplace where people are willing to spend money to have that problem solved. That’s all businesses. That’s all real estate is if you’re going into a market that’s over supplied, you’re wasting your time. So it’s really about solving a problem. So pick an asset will run with it.

 

Erwin  

Let’s do multifamily, just because it’s a term pretty popular topic. Have you ever Warrington, kind of associate with it?

 

Victor  

Yeah, absolutely. So not all multifamily works. The nice thing about multifamily of course, is that in a market, that’s a fairly tight market, meaning low vacancy. Generally speaking, market rents will come up to the point where it will justify new construction, you can often go into secondary and tertiary markets, where the rents on a per square foot basis. And when I talk about rent, I think through the lens of a developer, so I don’t talk about 1000 bucks a month or 1500 bucks a month, I talk about dollars per square foot, because there’s a ratio of what it cost me to build that thing in terms of dollars per square foot and how much I need to get back and rent in dollars per square foot in order for the math to work out. And that’s a function of heart construction costs, land costs, development charges, all of the things that go together in creating that product. Today, the cost of construction is such that in most markets, you need a lot of dollars per square foot in rent. In order to justify that new construction. In the Toronto market. You’re talking between four and $5 per square foot in Ottawa, between 350 and $4 a square foot in rent. So what does that mean? 1000 square foot apartment? Yeah. 3500 To $4,000 It’s a lot of money. And people talk about is, you know, the lack of affordable housing? Well, yeah, but it doesn’t matter who the owner is it cost so much to build, that doesn’t matter who owns it. And whether you own it or rent it, the cost of ownership is identical. So it simply comes down to what does it cost to recover that initial investment in a reasonable timeframe. And that’s what we do. So we want to go into markets where there’s appreciable demand a shortage of supply. And, and the numbers work. We also want to see a certain amount of impedance for a new product coming into the market, so that it doesn’t get over supplied too quickly. Because at the end of the day, you’re making a commitment for 25 to 50 years. You want to know that, that those market conditions that you saw on day one are gonna persist for at least a good long time.

 

Erwin  

Okay. Okay. Selfish question. Do you do New Brunswick? I only mentioned it because I see lots of people running that where?

 

Victor  

Yeah, we do not do New Brunswick, because the incomes are very low. And yes, you can buy things inexpensively, but there isn’t. And we’ve looked, many of the properties are very small, it’s very hard to get economies of scale. So here’s the thing in multifamily investing, if you are using fractional third party property management, meaning you are you are getting a slice of a property manager who may have a dozen other clients, how do you know you’re getting sufficient mindshare from that individual. They’re not on site, by definition. So the minimum that you need to hire an in house property manager full time, the minimum you need is 75, doors, something in the range of 125 to 150, doors is better. But the minimum is 75 doors. So if you’re talking about a 30 unit building, you’re in no man’s land, you’re in the same swamp with the folks that have a five Plex or a three Plex, you’re dealing with third party management. So you’ve got to aggregate enough doors in a small radius so that you can hire that full time management. Otherwise, you’re paying too much for property management, and then your numbers or your numbers don’t work. So you know, it’s economies of scale, making sure that you’ve got the economies of scale. The other thing of course, as well is in those smaller, smaller product, those tend to be not amenitized. It’s a basic apartment, however many square feet and that’s all whereas in a larger complex you can afford the amenities. And so what do we mean by amenities? We were talking about? charging for electric vehicles, we’re talking about e commerce delivery lockers, both refrigerated and dry. We’re talking about fitness facilities, maybe a pool, all of these things that become part of a lifestyle decision. Not just, you know, there’s the place of stainless steel appliances.

 

Erwin  

All right, and before we’re recording we’re talking about Grant Cardone seems to be doing these things as well the value so value added amenities. One

 

Victor  

of the things I like about what grant does is he’s in he’s in markets in mostly in Florida. markets like Port St. Lucie. He’s not in the hottest markets,

 

Erwin  

which is interesting, because he said he needed a private jet to get to go look at properties. If they’re all in Florida. Does he really need the private jet to get there supposed to be it’s supposed to be a time saving device.

 

Victor  

I know a number of folks that have a jet and especially if you’re going into secondary markets. So for example, if he’s going into Port St. Lucie, he’s not going to fly into Miami or Fort Lauderdale. He’s gonna fly into Melbourne or someplace like that. That’s closer. So yeah, absolutely. It’s a time saver. But, but what he’s doing with his properties, and this is the part that’s interesting is he’s taking properties that would have been, let’s say, a B, or B minus property. And he’s improving them. He’s adding amenities, he’s spending half a million to a million on the swimming pool, and that whole complex, so he’s giving people something that if they’re downsizing from a single family home, they could never have amenities of that quality in their own house. So they’re not feeling like they’re taking a step backwards. By downsizing from a single family home, they’re taking a step forward into moving into this apartment complex because there’s amenities that they could have never had right at their fingertips. And so that’s part of the attraction creates that value and that perception of value yet, when you look at the cost, add that on a per unit basis. It’s actually remarkably

 

Erwin  

low. Sounds smart.

 

Victor  

It is smart. It’s very smart. Very cool.

 

Erwin  

And so so not a fan of New Brunswick. Where are you a friend a fan of in terms of towns, cities, will I even know that recognise these names?

 

Victor  

Sure. Absolutely. So we’re in Spokane, Washington. We are in Houston, Texas. We are in Lake Charles, Louisiana. Probably not a town you’ve heard of and I’ll tell you why we’re there in a moment. We’re elsewhere in Ottawa, Canada. We stayed out of Ottawa for a long, long time. Because the market was too expensive. The rents were not high enough. And today they are. The numbers do work finally in Ottawa, so we are quite active here and it would have been natural.

 

Erwin  

Oh sorry, just for the listeners benefit you live in Ottawa.

 

Victor  

Hi Have an ROI. Absolutely. It would be natural for me to invest here. And yet we stayed away from it for a long, long time because the numbers didn’t work. Yeah. So we like, you know, we’d like markets that have a strong influx of jobs, influx of population, high paying jobs, and a shortage of supply. So we go for that. We also would like to stay away from markets, where the regulatory environment heavily favours the tenant to the detriment of of the landlord.

 

Erwin  

You are in Ottawa, you understand? Right? Yeah. Punitive to her. You are in Ottawa, you are in Ontario.

 

Victor  

Yeah, yeah. But you know, so we stay away from New York, we stay away from Chicago, we stay away from San Francisco, places like that, that really are very unfriendly to landlords.

 

Erwin  

Sorry, Victor, in your real estate business. What is your position? And then can you tell me about your we talked about earlier, but the seven positions to seven functional? Sorry, have a business? How many of them do you perform? How many people are on your team to perform these functions.

 

Victor  

So our core team is actually fairly large. So we have five partners in the business. I’m a senior partner, and we’re geographically distributed. Most of us are in the auto area, we have a team based in Utah. And that was a merger with a team that was based there, we had done a bunch of projects together, and then finally decided to merge the business. We have local partners in the major markets that were invested in. So and I think that’s super important. So for example, in Houston, my partner is the gentleman who has not partner with us in every single project, but he’s involved. In fact, his entire family’s involved on several projects, this gentleman has built so far, about 10,000 units in his career, and he’s someone who’s never going to retire, he’s just gonna keep doing it, because he loves it. And yet, he doesn’t necessarily want to do the heavy lifting on everything. So it’s actually a very good relationship. Because he gets to have his hand in more development projects, we get to learn from his experience, he brings a tremendous amount of experience to the table. He’s built millions of square feet of concrete parking, and just all kinds of different assets. So tremendous wealth of knowledge and experience. And, and his son is involved in the business. So you know, on our average staff meeting, we meet every single day, five days a week, 915 Eastern time, every day 615 Pacific Time, we have about 12 people on the call, every single day. So we’ve got admin staff, we have a few interns, we have folks that are focused on marketing. So we all play different roles. We have a team that’s focused on underwriting a team that’s focused on due diligence, we have a team that’s focused on investor relations and capital raising. So there’s all these different aspects that map we have an in house CFO, super important. And actually, I want to spend a moment on this, because oftentimes, you’ll hear people talk about, well, you know, they transition from doing their own bookkeeping to maybe hiring a bookkeeper? Well, yeah, that’s a step forward. That’s

 

Erwin  

a big deal. That’s a big step for a lot of people.

 

Victor  

Well, it is, but you’re still repeating the same fundamental mistakes, because what is a bookkeeper do bookkeeper runs behind the business, trying to document what the heck happened, and hopefully try to get it to reconcile at the end of the month, a financial controller drives the business, no check ever gets written by the business owner, the Financial Controller produces the check from the accounting system puts it in front of the business owner for signature, and everything. The books are correct by construction, you can reconcile the books any minute of the day, seven days a week, because it’s all correct by construction. You’re not ever having to reconcile the books. So Financial Controller implements the policy, and they’re driving the business as opposed to scurrying around behind the business figuring out what happened. They both spend time in the accounting software. So looks from a distance, like they’re doing the same thing, but it’s vastly different.

 

Erwin  

You mentioned in how CFO, and those people aren’t cheap. And also when you said the handing off the bookkeeper. If you only have a book here, this still means the individual is still the CFO as well. And we’re in the other hats as well.

 

Victor  

Right? Yeah, absolutely. But again, like you

 

Erwin  

said, like, Gee, I don’t even know how many properties you need to afford a CFO, just the CFO.

 

Victor  

There’s ways you can get skills. We’ve been very successful in bringing in interns and integrating them into the business. And when we say interns, I’m not talking about getting someone on a four month webcam at a university. We’re talking about folks that really have a very high set of skills, but they actually want to learn real estate. Okay, so they will contribute their skills to the business in exchange for learning how to do development, because I recognise that sitting behind a desk looking to Google for answers is not the path or you have to be in the trenches doing it every single day. It’s like learning how to swim by reading a textbook. You can’t do it you Gotta get in the water. Sorry, Victor, Are

 

Erwin  

these like 2030 Somethings that just

 

Victor  

No, no, we have, for example, one person is a practising lawyer. Okay, we have someone who’s a full fledged CPA. Interesting. We’re bringing in very, very high calibre skills in those types of roles. We’ve also had very good success, bringing people from the military, both Canada and US. In the US, they have a programme called Skills bridge, where the the army or the Air Force or whoever will pay for their salary for a period of time for them to train as part of their transition from armed services life to civilian life. And it’s good for them, and it’s good for the business. Same thing exists in Canada.

 

Erwin  

I did I know that. That’s pretty awesome.

 

Victor  

It really is awesome, because they come with very high skills, very high skills, but they are lacking some of the practices that are normal in civilian in the civilian workforce. But, boy, they bring a tremendous amount of systems and processes and discipline. And we learn from them, too. It’s wonderful.

 

Erwin  

I sounds awesome. I think we have headcount for accountants give you some military counts.

 

Victor  

Exactly.

 

Erwin  

Exactly. So Victor, it sounds like you’ve really adopted well, your corporate experience your startup experience into into a real estate business. Now I’m trying to think of like the like the investor that has like three, five properties, how do they start towards getting closer to you? So for example, I’ve had guests on this podcast who are quite very successful, like, these are folks who, you know, were worth like, five 10 million, but they get stuck. Because there’s not enough money being made to afford even like a chief operating officer type role, even like a Director of Operations type role slash pay, right. So they never, they’re never able to shed that hat. You know, they still maintain that function, that now these investors are still in their top 1% note, like, totally, probably even top 1.1%. But I still see many people don’t get to be on that level, where they can have much more expensive folks to handle these functions.

 

Victor  

Well, it’s a mindset issue, because they’re trying to do it all themselves. Okay. So it’s

 

Erwin  

deposit there. I’ve been I’ve been Pooh poohing a lot of all this mindset stuff that’s out there, because I see all these mindset coaches out there,

 

Victor  

some of them. Absolutely. Yeah. So, okay, so what do you need to be successful? You need three things, right? You need the knowledge. So people will go out, they’ll get a course they’ll attend the workshop, and they say, awesome, I’ve got the knowledge, I’m all set. And that’s not the ticket, you’ve got a third of what you need. Congratulations. And then like you said, you’ve got the mindset folks out there saying, Well, yeah, you’ve got the wrong mindset, you need to go get yourself some mindset. And so then you say, alright, I’ll work on the emotional fortitude to figure out how to push through when things get difficult, and how to think creatively and be resourceful and all of those sorts of things. And that, too, is not enough. So what is the ticket, you’ve got to be immersed in the environment, where other people are doing what you want to do? Why is it that all the elite figure skaters in the world train here in Canada? It’s not like they don’t have ice in Japan. Right? Right. Right? They they train either Montreal or in Burlington, Ontario. Why do they train here, because they got to be training at that elite level with other people that will push them and challenge them. It’s no different. So you know, when you hang out with other developers, things that seemed strange and out of reach all of a sudden become normal. So that’s who I hang out with. That’s who my mentors are. My mentors are folks that have done hundreds and have done billions of dollars worth of deals. And so you the few things happen, you figure out what is possible. Number one, you figure out how to solve problems when they arise. And then you figure out what those people are concerned with, so that you can actually have an intelligent conversation. If you walk up to somebody who’s a billionaire, and you want to engage them in a manner that they’re going to be interested in you. How do you do that? If you have don’t have experience interacting at that level, they’ll ask you what you do and and then five minutes later, they’re off talking to somebody else. You’ve got to find a way to establish a rapport so that you can build those relationships. Because at the end of the day, it’s about building those relationships. This is a team sport. And it you don’t want to just look at someone who’s a high net worth individual as someone with dollar signs on their forehead, because they don’t want to be used don’t use people nobody wants to be used. And people with money have their guard up because they know that there’s folks that want to be close to them for one reason one reason only and that’s because they have money so they’re their guard is up They don’t want to be used any more than you were i? So don’t use people. So how do you how do you break through that? How do you develop a relationship, and it starts really at that personal level.

 

Erwin  

So get away, be be a volunteer, be an intern, be a

 

Victor  

volunteer, be an intern, collaborate with them on a charity, something that might be meaningful to them, there’s so many different ways that you can develop a relationship with them. That’s pretty cool. Now you don’t necessarily need to, you know, if someone has is, let’s say, a big brand, you don’t need to necessarily develop that relationship with the figurehead. Look at who’s in their inner circle, you probably going to find equally capable people in their immediate inner circle. They all know the same people, they might be easier to develop a relationship with, as really the first step. So for example, I’ll pick a name. Imagine you wanted to develop a relationship with Oprah, that might be difficult, might be harder to get access to Oprah. Probably easier to get access to Stedman, her boyfriend, he knows all the same people travels in the same circles. Right? Right, right, right

 

Erwin  

off ask, because I’m pretty sure that listeners thinking, how can they get in touch with you if they want to be an intern?

 

Victor  

We’re pretty full right now, with insurance. It’s a request we get often, but so let’s talk about what makes a good internship. Sure, because I think that that’s valuable to talk about, we’re running a real business with real deadlines, real priorities. And an internship is not a paid position. The deal is you get exposure to the business, in exchange for making a contribution to the business, but we’ve got to be able to count, if you take something on, we’ve got to be able to count on you to deliver if working with us, or whichever business it doesn’t matter, ends up being your 10th priority, after the kids are put to bed and after everything else is done. That’s when you take the leftovers and you put whatever energy is left into into the internship, that’s not going to work. That’s not going to work, it’s got to be a commitment of a certain amount of hours. And on a regular basis. It can’t be all give you two hours every two weeks, that’s that’s not going to do it, it’s going to have to be on a regular basis. So that you can be part of the flow of the business doesn’t mean it has to be a full time engagement. But you’ve got to be able to commit enough hours to be part of the flow. The business could be two hours a day. Or it could be one hour a day. But it’s got to be every day so that when someone calls you can actually respond. I think those are those are the keys

 

Erwin  

with all this work from home with all this work from home stuff now Oh, absolutely here than ever. Yeah. And I imagine you don’t need someone to go down to Houston and go click rent or something.

 

Victor  

No, no, no, no, no, not at all. I mean, you know, for example, we have someone, she works full time for the federal government. And she used we’re working on a small apartment building. This is a guy out of Norfolk, Portsmouth, Virginia, a suburb of Norfolk, and he got some land to build what he thought originally it was going to be a few row houses. And we figured out that he could actually get higher density, it’s going to be like a 12 unit apartment buildings. And that’s the sort of thing that we would necessarily do ourselves that we wanted to help him. And so then he seemed to have some of the right attributes. So we actually handed this project the managing the this project off to one of our interns, and she’s managing it fully. She’s interacting with the architect, she’s coming back to us and saying, Okay, here’s what the city said they want, you know, this kind of exterior cladding materials, they want all this setback over here, they want all these different things, what do I do? So she’s getting guidance from us, in terms of how to interact with the architect and how to get some of these problems sold into closure. And she’s getting real life development experience, without having to go out and raise, you know, a few million dollars on her own and go build this building. But she’s she’s getting that hardcore hands on experience. And it’s awesome. It’s awesome. For her, we’re getting a project done without having to do a lot of heavy lifting on it ourselves.

 

Erwin  

That’s pretty cool. I have like the occasional investor reach out and say like, I have like one, two properties in an area that’s going to be developed, say someone has like one two properties across the street from the coast station. Right. And they’re working on in the land assembly, but they’re not developers. I think technically, they’re a developer.

 

Victor  

Right, right. Yeah. A lot of those types of situations. In fact, we opened a consulting division about two years ago, okay, this specifically for that, because we often find situations exactly like you described, where someone says, I’ve got a piece of dirt, it’s in a great location, what can I do with it? Right, right. Now you can go hire a plan, or you can go hire a consultant who can help you get through the zoning process with the city, but they can’t tell you whether that makes economic sense. They’re not looking at it through the lens of a developer. We’ll take it through our entire underwriting process as if it was our own project. will tell you It either makes sense or doesn’t or here’s what needs to change for it to make sense. Or, you know, here are your risks, you know, the city is never going to give you two curb cuts, you’ll only get one. So are you going to need a traffic turning lane to get that volume of vehicles in and out? All of these different things that you don’t necessarily think about? That can be impediments to a project? You might say, Okay, I’ve got utilities there, right? They’re there in the street? Sure, there’s utilities. But do you have the allocation? Will the city approve 200 More toilets going into that sewer pipe or not? You need to know. And most people just don’t know how to get those answers quickly.

 

Erwin  

We do. And then where can people find more information?

 

Victor  

So we’re companies why street capital.com Feel free to reach out to us. I’m Victor am at Wall Street capital.com. And I’m hosting the real estate espresso podcast. It’s a daily show seven days a week, and it’s on more than 20 different platforms. So wherever you listen to podcasts, you’re sure to find the show. And it is literally your morning shot of what’s new in the world of real estate investing. So we’d love to have you as a listener, and we can continue the dialogue that way.

 

Erwin  

Victor, I have you for 15 more minutes. Sorry, just because I love where this is going. Oh boy, I don’t know where to go next. I have so many questions. Sorry. When you when you started off as an investor, then did you go straight to something with scale, then you skipped the whole single family home? Exactly.

 

Victor  

So where I started, my very first investment was 2006 in Ottawa, and I saw an opportunity. I’ve always taken a business, a business approach. What’s a problem that needs to be solved. Otto is a bit of a unique city like Washington, DC, the nation’s capital, where you have a number of folks coming in and out of the city on a medium term basis. The government tends to spend money in six month increments for whatever reason. So 12 month unfurnished lease is of no use to those folks. And they have a housing allowance. But a housing allowance is not going to get you into a sweet Hotel. That’s too expensive. So there needs to be something in between. And back in 2006, I saw that opportunity. And I saw that there was a shortage. Airbnb didn’t exist at the time, and found out what the number was the number was $1,600 a month was the housing allowance for a one bedroom apartment range between 60 and $1,800. Back in 2006, I said, Okay, can I deliver a decent quality turnkey product for that price point, which turned out to be about 35% More than the unfurnished lease? And did the business case make sense for me to spend the extra investment to deliver that turnkey product in exchange for that higher rent? And clearly the answer is yes. For about 1015 grand and furniture, I could get 35% more rent. So that made an awful lot of sense. So that’s where I started.

 

Erwin  

Okay, now, did you do one? Or do you do like 100 of these? No, I

 

Victor  

did like half a dozen. And they were all within a four block radius of Parliament all within walking distance of Parliament. So we had military officers, contractors, senior folks in the post office, you know, sometimes even graduate students had a graduate student from Saudi Arabia paid for the whole thing upfront cash. I’m surprised it wasn’t gold bars, but it was

 

Erwin  

barrels of oil. That’d be acceptable. Yeah. And then, and then what from there.

 

Victor  

So from there, of course, this funny thing happened in the states around 2008. That created an awful lot of opportunity. And so I really saw the opportunity to go south of the border. It looked to me like the opportunity of a lifetime. And it was, and, in retrospect, I made a tonne of mistakes. I went too small, I ended up partnering with the wrong people. I ended up forgetting everything I knew about business and thinking that I could scale small, small projects, small buildings, and made the same rookie mistake that probably a lot of your listeners have made themselves. So wasted a tremendous amount of time, in many respects, squandered that opportunity of a lifetime. Where I ultimately was successful, is found a couple of partners in Philadelphia, and we pioneered a strategy that I call it by on the line move for line. And what that line is, is that line that exists in virtually every city, where on one side of the line, you’ve got a hot, gentrified neighbourhood. And then on the other side, you go a couple blocks too far and you’re in the hood. Now we don’t have that quite so much in Canadian cities, because we’re a bit more homogeneous. But in US cities, for sure you have that.

 

Erwin  

We have that and I went to school in London. We had that we had Adelaide.

 

Victor  

Absolutely. Absolutely. I mean, even Toronto, if you think about it at one time, the beaches was on the wrong side of the line. Crazy. I mean, today it’s hot, hot, hot, so expensive

 

Erwin  

now. Yeah, that’s crazy.

 

Victor  

But that it took a certain amount of redevelopment of that area for people to say Uh, oh, I can actually live here, now the line has moved. And when that transition happens, you get a great multiplier. So what is the strategy you buy on the wrong side of the line, not too deep, not too far, and redevelop on that line. And now the line is on the other side of your building. Now, if you just do one or two, the market doesn’t notice they don’t care. But if you put a little bit of scale behind it, maybe bring a few friends along, put a little bit of scale behind it. And all of a sudden, the market says, Oh, the line has moved. And now when you go to get appraisals, there’s no comps for new product in the hood. So where are they going to get the comps from the great neighbourhood immediately next door, you might not get 100 cents on the dollar on your appraised value, maybe you only get 95 or 97 cents on the dollar. That’s good. And now fantastic. That’s good enough, because you bought the land at a deep discount. So that’s where we started in Philadelphia. And over time, we probably bought, I don’t know, 8590 properties within a 10 block radius. Our very first deal in Philadelphia, we bought 15 properties in one day, from the Philadelphia Housing Authority and an auction for $350,000.

 

Erwin  

Victor, so did you find a partner first and the deal first,

 

Victor  

we found the partner first. Okay. Because you see, at the end of the day, a good deal badly managed is no deal. So what is what is the differentiator in that it’s not the deal? It’s the manager. It’s the people. Have you got the right team that can manage the stream of investment? If you don’t have that? Why are you looking at deals? Right. And that’s I think a mistake that a lot of people make is they start with a deal. It’s never about the deal. And we were offered deals in the wake of 2008. That looked amazing. We were offered a beautiful property in Keystone mountain Colorado, the ski in ski out property, it made it as beautiful, huge discount, and said, Well, I’m not going to put a team together for one deal. Didn’t make any sense. And we let we let it go. We didn’t have the team in Keystone, Colorado. Right? So it starts with the team, I went down to Philadelphia, I saw what this these folks were doing. I saw literally a decade of investment work to be done in this one neighbourhood and said, Yeah, we can bring some more capital. And we can go attack this neighbourhood. And we did. We did a lot of land assembly we started of course back in those days in 2011 2012. It didn’t make sense to build new because you buy things for a fraction of construction cost. So what did we do, we bought older buildings, turn of the century 1910 1920 construction, and we demolish the inside. And we put a new building on the inside the cap the old stone or brick, facade and structure. And so we’re delivering new product in in a historic setting, which was kind of cool, because then you could all do all these neat things with exposed brick knishes and all kinds of cool things that you would never find in an older building a bit, you got rid of all of the mould and the lath and plaster and we got rid of the six foot ceiling height in the basements we would dig down two feet and underpin the foundations, we could underpin the foundations on a on a building for like 2030 grand. So you get a whole extra floor for a very, very small investment. Right. So we do all those sorts of things. And that was really how we started in Philadelphia. And from there, it was a small step to you know, some of these buildings were too far gone, we had to motion so we built new on those locations. So moving into new construction was a small step. And then getting going to the Zoning Board of appeal and getting additional density was a small step. And then doing land assemblies was a small step, and on and on. So every step of the way, we took one additional step in our development as real estate developers. And then we farmed the area. So when I take people on a tour of North Philly, we have to drive slow, because I’m pointing out well see this four Plex over here, we did that one. And then we did this, these nine units over here. Because if you drive too fast, you run out. So you know, we bought an awful lot. And we developed an awful lot within a very, very small radius. So what that allowed us to do is what I talked about at the beginning, which is we could get that critical mass, where we brought the property management function in house. And yes, it wasn’t one building. But we had enough units within a five block radius, that we can effectively manage it as if it was one building.

 

Erwin  

So Victor, have a lot of questions about partnerships. Sure. So I want to spend too much time on this partnership is a little bit a little partnership. So a little no vote. Sure. But the question that comes to mind is what did each party bring to the relationship to the partnership near a Philadelphia example?

 

Victor  

So one of the partners had a very strong desire to be a property manager in Pennsylvania, you’ve got to be a broker. You need a broker’s licence. He was the broker the broker of record on the brokerage and so we they basically built out that company with a property management division and construction division. And it really an investment division focusing on on new projects. The other partner had a tremendous amount of experience finding deals, and his expertise was cellular towers, believe it or not, so he would find assets that had cellular towers on them, separate the cellular tower, from the building, sell the cellular tower for profit, but then you would often get the building for either for free or for a deep discount. So we did that with a stadium, believe it or not

 

Erwin  

a stadium for cheap.

 

Victor  

I’ll tell you the story. It’s a cool story. So this is Skylands Park. It’s an hour outside New York City to New Jersey, and it was built in 1993. For 11 and a half million dollars. It went bankrupt a year later with 26 million in debt. Don’t ask me how they did that. But somehow that happened. The folks who bought it, owned it operated it. It was the New Jersey Cardinals and then the Sussex Skyhawks, they’d set league attendance records. This is all a minor league ball 4200 seat stadium, and 18 luxury boxes parking for 2000 cars, 46,000 square feet of buildings, batting cages, commercial kitchens, like a full on stadium. Okay, the husband died, they lost their team franchise. It’s now 2010. This thing is bleeding cash. The wife doesn’t know anything about baseball, she just wants to move to Florida to be close to her kids. So she hands it to a realtor who puts it on the MLS folds his arms and waits. Well, that’s not how you sell a baseball stadium. I’m just saying. So we came across it, the only reason we came across it is because this stadium had a cell tower on it. The cell tower had revenue on it from Sprint, Verizon and T Mobile. And you look at the revenue from those three carriers, and it came to 50,000 a year. Now when you value a cell tower, you think of it about a 7% cap rate. So you take $50,000 divided by point 07. And you get $700,000 and change. So the value of the cell tower, in jest as a standalone piece, if you separate it from the stadium as an easement, the value of that cell tower was 700 grand. Okay, so they had this property listed for 2.2 million. It’s at the bottom of the market. They got a cash offer for 1,000,005, which they rejected. They got a financed offer for 1,000,008 that they accepted, but their financing fell through a couple of years into this, they’re now getting desperate. They want to sell this thing. We offer them 950,000 Cash, which they accepted. We knew we could sell the cell tower for 700 grand. So we got our basis on the stadium down to 250 grand, but it gets better. As soon as we had it under contract. We knew we didn’t want to own a stadium. We’re not baseball people. So we started looking at who would want a stadium where their former major league players who would want to do a spring training camp or you know, as a big parking lot. Can we set up a drive in movie like we thought all kinds of different, crazy ideas. And anyway, we came across a guy who was looking to restart the Can Am league because at that time, the draft in Major League Baseball was there reducing the number of rounds in the draft, so there’d be a lot of really good players that would never make it into the majors. So they wanted to grow minor league ball. Okay, fine. He said I might want to buy your stadium. But I need eight stadiums. In order to restart the league. You’re one eight of my problem. I said, Okay. So would you like to take an option? Or how about a right of first refusal on the stadium, so you know, get a tied up, and then you figure out what other stadiums you need to go get a bet at least you have a piece of paper that you are at least connected to this stadium if you really want it. He said, Okay. He said, What would you want for right of first refusal? We said how about 250 grand? So he said, sure, but I want the interest on that. 250 grand How much do you want? 8%? Okay, done. So for 8% interest on $250,000 We bought a 4200 seat stadium on 28 acres of land and outside of New York City. And all because we had this there was a cell tower on this property, we would never have found it if it weren’t for the fact that there was a cell tower on the property.

 

Erwin  

And no one else needed to look for these things. No, the realtor didn’t realise it even income generating asset on the property. Exactly. That’s pretty cool story. Yeah,

 

Victor  

it is. So to finish the story, we held it for about nine months. We had a college team that played 13 games they came in brought in new clay and levelled it out and it looked great. I mean, it wasn’t laser level like the it like it would be in the majors, but it was good enough and eventually sold it about nine months later for, I think about 900 grand. So that’s after we sold the cell tower on closing day. So we made a little tidy profit. We weren’t greedy was a good deal. Good deal for them good deal for us

 

Erwin  

thinking about it or send out the email of someone else. Someone else bought it suddenly got a pretty good deal. But yours this again?

 

Victor  

Oh, gee, was I have to go back and look, it’s been a while I think we got it under contract in 2013, I believe.

 

Erwin  

Sounds like we got a pretty good measure that was an hour from Toronto or an hour from Ottawa. But that’d be worth. Absolutely. Okay. So what’s, what’s the law? What’s the most recent partnership that you got into? Like, what was what was the you look, you were looking for just preface that most people I find, like, for example, my friend of mine is going to Orlando to buy an investment property. And they did look for versus you’re saying, Go find a partner first. It’s very different.

 

Victor  

Well, the example I’m gonna give you is one where we actually found the deal first. And it just turned out that way, and this was one and by the way, we don’t go hunting for deals. You’ve probably figured out by now we weren’t looking for a stadium that came to us. And this, this next one is no different. This one came to us as well. This is a parcel of land. It’s just on the edge of Colorado Springs. It’s 17 183 acres. And it’s called the Norris ranch. Mr. Norris, his father was the Marlboro Man and the cigarette commercials. Oh, cool. So the original Norris Ranch was 20,000 acres. It’s a massive, massive property. And the remnants the last piece was eight parcels are seven parcels that comprise 17 183 acres all contiguous, and we got this under contract for 10,000 an acre. And at first we thought, we weren’t really interested, we thought, wow, it’s too big. It’s too complex. It’s to fill in the blank. We weren’t interested in it. And then we thought about it took us a couple of weeks to wrap our minds around it. We said, yeah, we can do this, we did a little bit more research, we learned that we could get a zoning overlay and an annexation into the city. That would be legally binding, without having to do a full plan to use development where you have to map out every lamppost manhole cover and fire hydrant, we could just do a zoning overlay. And that will create a tremendous amount of value. So we got it under contract and basically went in immediately into the planning process. We wanted to do diligence, we had a lengthy due diligence period. And so we’re making sure that there weren’t issues that would stop us. There were, you know, no endangered species on the property or, you know, any of those sorts of things that could potentially stop the project. And then we continued to move forward with it, we had a couple of different pathways to raise the capital. And they did involve partnerships. We ended up choosing two partners, to actually three partners that were not initially on our radar. One of them is a gentleman, two guys that own 640 acres to the south of us. And so they were already active, developing in that market. And so we felt that having that local presence, that expertise would be valuable. One of those two guys, his father was the previous county commissioner, his wife is the current county commissioner. So we said, okay, these guys are pretty well connected politically, you know, this guy has all the candidates for mayor to his house for a barbecue, right? So we have that kind of connection. And so we invited them into the partnership. And then they brought another individual, very high net worth individual who had sold a defence company for a few 100 million dollars, who would also be interested in so we brought him in as a partner as well. So we’ve forged together that partnership, eventually, this is a multi year project. This is a project that is going to span economic cycles. Clearly, we already initiated the annexation petition. And eventually we know once the master plan is completed, we’ll get the zoning overlay and utilities brought to the property and all of that, but we should see something in the range of about at least somewhere between a 20 to 40 times multiple on our investment just on the land just on the land. So it’s a it’s a fairly significant left.

 

Erwin  

Okay, so where did these had this deal find you

 

Victor  

as an individual who basically knew of Mr. Norris, but it was too big for him. So he brought it to one of our partners and said, you know, who might be able to do this. He knew he had something and he just didn’t know what or how or and often turns out that way that people hear about something and they don’t know what to do with it. So it’s a matter of finding a home. We’re in discussions right now on a property in a 1500 acre property right now. And we’re not sure if it’s us or if we need to find a home for it. But we know that it’s going to have to be the right team. This is an act, the 1500 acre property is an active agricultural property. That’s that’s producing a very high value crop. So, you know, we’re not farmers. So we’ll see what happens with that one. But it’s all about putting together those partnerships, those relationships, we’re heading to, to New York and a couple in a couple of weeks to further that conversation and see if we can put together the right partnership on that one.

 

Erwin  

Fascinating. All right, Victor, if the listener wants to help you out, how can they help you? How can I help you?

 

Victor  

That’s a great question. Yeah, we’re always happy to talk about deals, you know, we’re pretty full right now. So we don’t have the capacity to take on a lot, that’s for sure. But sometimes we can make an introduction or we know somebody that might be able to help. And, you know, just, we’re love to develop relationships, love to have folks connect with us through the podcast. And we often speak at live events all over both Canada and the United States. So happy if we happen to be at the same event. Come on up, say hello, and love to connect.

 

Erwin  

Amazing. And then Victor, I question. I was so immersed with everything you’re up to? What’s your outlook for the future? It’s November 25. A lot of people are scared out there. Like you’ve mentioned you you’ve had to with even with your own portfolio had to pivot, you know, to put things on pause. What what do you see for the future?

 

Victor  

Yeah, absolutely. I mean, we’re definitely in a very uncertain environment. I mean, investors like certainty. And that’s the one thing that you can’t get right now is certainty. No one can tell you with any degree of confidence what interest rates will be in 24 months, they could be up or they could be down. That’s why we put things on pause. Things that made sense a year ago, today’s interest rates look marginal. And if they go higher, we’ll be upside down. I can’t take that risk. I wouldn’t take that risk with my own money. And I certainly can’t take that risk with investors money. So so we’ve had to put some things on pause. So I mean, virtually everything in multifamily apartments, new construction, virtually every not everything, but virtually everything almost has to has to be paused right now unless you can get really good financing terms. And we’re working on that. And so if you can get a really solid rate, lock, long amortisation, permanent financing, you can still do deals in today’s environment. But absent that, it’s really, really hard. We’re looking at some redevelopments. We’re in discussions right now. And redevelopment of a building in the downtown core, was at one time an office building turn of the century building gorgeous, gorgeous art deco building, think, Empire State building type vintage, that would be redeveloped into apartments in the downtown core, it’s literally right on top of the subway stop, amazing, amazing location, and the rents in that location would certainly support the redevelopment of that of that asset. So we you know, we look for those types of things. And think about all of the deals that have been done in the last 24 months, if they had a value added component to them. They were almost all financed with bridge debt, which would be variable interest rate, with the idea that once they got released up and stabilised, they would refinance into permanent financing. But those assumptions would have been, hopefully a cash out refinance an interest rate within the threes, maybe the high threes, if in the worst case, but now you’re into the sixes and sevens. So not only are you not going to cash out refinance, you’re gonna have to write a big check to get into permanent financing. So you’re upside down, you’re stuck. So how do you do that? Fear that sponsor that’s upside down. What do you do? Do you go and do a capital call with your existing investors? Not happy about that? Do you sell the equity which is diluted to everyone? But what are you selling? You’re gonna say, well, we screwed up this project. Come invest with me. I like it’s a very weak value proposition. The number stank, because you’re upside down. So what do you do? Do you just extend with your lender until you run out of oxygen? The bunch of them? Well, a bunch of them well, so there will be opportunities in the next six to 18 months to buy assets that we’re partway through that repositioning. By the way, there were a lot of repositioning that failed in the last 24 months, they got delayed because of COVID or what have you, and they got into trouble. But then with rent growth, with market rents increasing in so many markets 1518 22% per year, that wallpapered over those mistakes, and so they came out on the other side and still survived, but they were, they would have been in real trouble if it weren’t for that, that rent growth was stopped. So they’re not gonna be able to play that trick a second time. So I think there will be opportunity. It’s not yet. Not yet. So sit on cash, be prepared to be conservative in your underwriting, be prepared to negotiate hard, and don’t be scared to walk away from a deal. It’s the seller who has the problem, not you, the buyer, don’t ever be a desperate and anxious buyer. Be a very patient buyer. That would be my advice.

 

Erwin  

Now I need to go call my flipper client to get rid of some of these properties.

 

Victor  

Yeah, flipping in today’s environment would be a very risky proposition. Because think about it. I mean, a lot of people think about what is the deal? You know, they say I got 10% off, that’s a deal or I got 30% off. That’s a smoking deal. No, no. I mean, think back on what we’ve talked about here, about 1800 acres, almost 70 or 83 acres for 10 grand an acre. That’s a deal. That’s five cents on the dollar. That’s a deal. I have way more upside than downside. That’s what I’m talking about.

 

Erwin  

I don’t think you shared your email address vector.

 

Erwin  

Better. Thanks so much for this. This has been awesome. I have like 23456 pages of notes. I imagine the listener probably will have twice as much. Thanks so much for doing this again. Where Can folks listen to your podcast?

 

Victor  

So it’s the real estate espresso podcast. It’s like the Italian coffee spelled ESP R E S S O. And it’s on virtually every podcast, listening platform, Apple, Spotify, Stitcher, pod bean 20, plus different platforms.

 

Erwin  

You’re regularly that the reo meetings in Ottawa so people can find you there as well.

 

Victor  

So I also run the Ottawa real estate investors, organisation and president of that organisation, we have about 400 members we meet once a month, face to face, and it’s a very active community in Ottawa. And if you happen to be within Ottawa, within a radius of Ottawa, we actually have a number of members from Toronto and from Montreal who commute once a month for those meetings. Because they get a lot of value. It’s crazy cheap, it’s $127 a year to join It’s nuts. And there’s no run a run to the back of the room, sales pitch or any of that stuff. It’s just pure education. We bring in great speakers and give people the opportunity to rub shoulders with their fellow investors.

 

Erwin  

And you have million dollar executives setting up projector equipment. See that myself? Because $127 a year there is no budget for staff for listeners benefit like literally the Victor and Christian are million dollar executives literally selling laptops and connecting cables and putting up projectors. It’s true. It’s true. Victor again, thank you so much for doing this. Wow, what a treat. Well hopefully listener enjoyed I’m sure the listener enjoyed and your emails gonna blow up. Apologies in advance.

 

Victor  

Well, it’s great to connect great to connect with you in Toronto a couple of weeks ago and have an awesome weekend.

 

Erwin  

Yeah, I told you I get Christian crap for not give me a heads up because I didn’t know you were coming and then this year front row thank you for the support Victor. Have a good weekend, my pleasure.

 

Erwin  

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

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To Follow Victor:

LinkedIn: https://www.linkedin.com/in/vmenasce/?originalSubdomain=ca

Personal Website: http://www.victorjm.com/

Work Website: www.Ystreetcapital.com

OREIO: https://www.oreio.org/

 

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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.

 

BEFzORE YOU GO…

If you’re interested in being a successful real estate investor like those who have been featured on this podcast and our hundreds of successful clients please let us know.

It is our honour to give back and educate others on how we build cash flowing real estate portfolios using all the best practices shared on this podcast, from the lessons of our hundreds of clients and of course our own experience in owning investment real estate.

If you didn’t know already, we pride ourselves on being the best of the best real estate coaches, having the best property managers, contractors, handy people, cleaners, lawyers, accountants, everyone you need on your power team and we’re happy to share them with our clients to ensure your success. 

New investor or seasoned veteran investor, we can help anyone by providing our award winning coaching services and this isn’t all talk.

We have been awarded Realtor of the Year to Investors in 2015 by the Real Estate Investment Network, 2016 by the Canadian Real Estate Wealth Magazine and again in 2017 because no one told the judges no one is supposed to win the award twice but on merit, our peers deemed us as the best.  In 2018, we again won the same award by the Real Estate Investment Network.

Hopefully being the most decorated team of Realtors in Ontario will make you consider us for your first or next real estate investment.  Even if you don’t invest in our areas, there’s a good chance I know who would be ideal for you. 

I’ve been around for a while, some Realtors are talented at servicing investors there are many with great ethics.  The intersection of the two, talent and ethics is limited to a handful in each city or town.

Only work with the best is what my father always taught me.  If you’re interested, drop us an email at iwin@infinitywealth.ca.

I hope to meet you at one of our meetups soon.

Again that’s iwin@infinitywealth.ca

Sponsored by:

Infinity Wealth Investment Network – would you like to know how our investors returned 341.8% on positive cash flowing real estate over the last five years? On average, that was 68.4% per year.

Just imagine what winning in real estate could do for you.

If you would like to know how we did it, ask us how by calling 289-288-5019 or email us at iwin@infinitywealth.ca.

Don’t delay, the top markets we focus in are trending upward in price, so you can pay today’s price or tomorrow’s price.

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

Erwin

Hamilton, St. Catharines and Toronto Land Development, Real Estate Investor, and soon to be builder.

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

Millennial, Personal Trainer, Moving To Edmonton and Full-Time Real Estate Investing With Vince Lee

As the year winds down, it’s been challenging for many, especially those who over-leveraged, those who gambled on the market going up forever, growing too fast, too soon, spread too thin, poor systems, and poor oversight.

 
 
 
 
 
View this post on Instagram
 
 
 
 
 
 
 
 
 
 
 

A post shared by Erwin Szeto (@erwinszeto)

We see this everywhere in different industries, too: growth stocks, cryptos, and so on.

Sam Bankman-Fried of FTX has been arrested. 

The S. Korean gentleman responsible for the Luna coin is hiding in Serbia; Elizabeth Holmes of Theranos has been sentenced to jail.

Please be careful out there. 

When I took courses in Commercial Banking, I realized banks don’t get rich by making bad loans, nor do they under lend.

For example, if a business needs a one million dollar loan to survive, the bank does not end $500,000 to reduce its risk and watch the business fail and lose its loan.  

They lend the whole amount or not at all.

In these challenging times, we’re seeing even more coaching programs being offered and more capital-raising offerings, AND I’m hearing lots of rumours of failing portfolios. 

Lots of red flags out there, so do your due diligence and be careful. 

I feel these times are the time to be greedy AND picky.

For Cherry and I, that means we’ll buy another property in the near future as that fits our goals for growth and control. 

In my extensive experience, the best investment is one that’s well researched, supported by the best power team in the business, and based on economic fundamentals that one controls, as I trust ourselves over anyone else.

I want to take a moment to thank everyone who’s supported Cherry and me…

From sharing our YouTube and podcasts with those you care about to our staff who work so hard so our clients are taken care of to our clients who trust us in guiding them in their journey towards financial peace and sending us referrals.

Thanks to you, our registered charity, the Hamilton Basket Brigade, was able to donate $10,000 worth of winter wear to the school kids of Hamilton, Ontario.  

As is our way, Cherry and I love value and efficiency; hence we purchased directly from a manufacturer wholesaler and received a 20% discount since we’re a charity.

The winter coats we bought were about $45 each, and the winter boots were about $40 for brand new with tags; quality stuff.

In total, we provided four schools with 142 winter jackets, 20 winter boots, 160 hats, and 50 pairs of gloves as the need is great.  

My friend Nancy, a school administrator, told me they receive a couple of refugee families per week from Ukraine, Syria, and Afghanistan.  

Some kids do not even have a fixed address and do not live with their parents.  It’s incredibly sad out there, and I encourage everyone to give however they can.

And to all you investors out there and those who haven’t started, the need to invest has never been greater…

Health care is on the decline, senior care is on the decline, rents have skyrocketed, and the demand/supply mismatch for real estate has never been worse.  

We all have a problem to solve to ensure our family’s financial well-being, and my team and I at iWIN Real Estate are here to help. 

If you’re not already on my email list and receiving invites to our webinars, meetups, property tours, and mastermind lunches… well, that’s just silly. 

On my website is my free book, “The Canadian Real Estate Investment Playbook,” and you can sign up for my free newsletter along with 10,000+ other hard-working Canadians learning the latest truths about real estate investing. 

Simply add your name and email address on the right side of https://www.truthaboutrealestateinvesting.ca/.

In 2023, I plan to double the amount of educational content we produce, as we love to help. 

We will start hosting meetups and tours East of the GTA as well as we’ve expanded thanks to coach Stephen Phillips of HGTV fame, who joined the team in 2022.

2023 will be an amazing year for many AND a terrible year for those who invested wrong.

My forecast is for our clients to kill it as they always have since 2010, thanks to our repeatable systems and best-in-class power teams, and that’s the truth about real estate investing. 

Hopefully, you will join us or send someone you care about :).

https://www.truthaboutrealestateinvesting.ca/

 

Millennial, Personal Trainer, Moving To Edmonton and Full-Time Real Estate Investing With Vince Lee

This week is a lovely story about a young Millennial who started his journey in his passion: health and fitness.

If you’ve seen Vince Lee in person, he’s jacked and looks like a personal fitness trainer.  Unfortunately, it’s hard for personal trainers living in Toronto to get by.

Thanks to his supportive partner, shout out Chewy and the Trust Your Talent community, shout out Tim Tsai, Vince has been able to create a side hustle in real estate investing, specifically rent-to-owns, scaling to larger and more projects. He’s also moved the family from expensive Toronto to more affordable Edmonton, Alberta.

Vince’s story is a good one and reminds me of why I invest so hard, so I can afford to keep my kids close and living in Ontario.

Congrats on Vince’s success.

Please enjoy the show!

 

 

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 FREE Online Training Class.  We will be back in person once legally allowed to do so, but for now, we are 100% virtual.

No need for you to reinvent the wheel; we have our system down pat. Again that’s  www.infinitywealth.ca/events and register for the FREE Online Training Class.

 

This episode is also brought to you by www.stockhackeracademy.ca, where everyday real estate investors learn the best practices in stock investing to earn cash flow in about 15-30 mins per day from their mobile phones. After real estate, Stock Hacking is the next best hustle, as you’ve heard from many past guests on this show. Among our students last year, 31 trades were shared with them. 30 were profitable for an over 96% success rate and 12% return on capital. I will be giving free demonstrations online, very similar to the one I gave my kid cousin, a full-time musician who just made a 50% return in 2021.  Past, of course, does not predict the future, but if you’d like a free demonstration, go to www.stockhackeracademy.ca in the top right and click FREE Demo.  At the demonstration, I’ll have special bonuses. We do not advertise publicly for all my favourite listeners, and I only have two more demos to give in the next few weeks.

Don’t delay www.stockhackeracademy.ca, what I consider the future of side hustles with real estate so unaffordable for many.

 

To Listen:

Audio Transcript

**Transcripts are auto-generated.

 

Bruce (Erwin’s son]  

Hello, and welcome to another episode of truth about real estate investing.

 

Erwin  

Hey everyone. Oh, that’s first by the way, as the year winds down, it’s been a challenging one for many, especially those who over leverage. Those who gambled on the market going up forever, or market going up folks who grew too fast too soon spread too thin, poor systems poor oversight. list goes on and on. We see it everywhere too, in other different industries. For example, you know, SPK Sam bank when freed of FTX has been arrested in the Bahamas, the South Korean gentleman and responsible for Luna coin is hanging out in Serbia. Elizabeth Holmes of Theranos has just been sentenced to jail. Very interesting documentary on Netflix if you haven’t checked it out. So do please be careful out there. Back when I was taking courses in commercial banking, banks don’t get rich by making bad loans. Nor do they Underland. So for example, if a business needs say, for example, a million dollars to survive, the bank doesn’t just lend, say 500,000 to reduce the risk, because the risk of the business fails and that one that $500,000 loan is loss. They lend either the whole amount or nothing at all, or they make that loan contingent on someone else loaning up the rest of the money. Because no one no one wins in making bad loans. In these challenging times, we’re seeing I’m seeing even more coaching programmes, more coaches, offering programmes more beginner coaches entering coaching. And I’ve seen more capital raising offerings. And I’m hearing lots of rumours of failing portfolios. I don’t know anything’s confirmed. Again, these are rumours. But like the saying goes, when there’s smoke, there’s fire. So I’m being cautious. As always, there’s lots of red flags out there. So as always do your own due diligence. And, you know, maybe have an expert set of eyes help you with that due diligence. And just be careful out there. I do feel these times are the time to be greedy and to be picky for Chennai. That means we’ll be buying another investment property in the near future. Not sure whether that’s going to be you know, I’ve been having friends tell me I need to get in more commercial more. So I don’t know what we’re going to be buying. But we plan on taking advantage of this dip and buying soon. And my extensive experience, the best investment is one that’s well researched, supported by the best Power team in the business based on economic fundamentals. That one controls control is huge. for carrying out we trust ourselves over anyone else with our money in our investment. Onto another subject. I want to take a moment to thank everyone who’s supported cheering I am sharing our YouTubes or podcasts to those that who care about to our staff who worked so hard this year, so that our clients and you know, attendees of our conferences, are taken care of thank you to our clients who put their trust in us and guiding them in their financial journeys towards financial peace, especially for sending us referrals. We love referrals. A common question I get about Sherry, is she able to take on more clients? Yes, Jerry’s company is taking on more clients. They just hired a new accounting manager in order to handle more volume. Thanks to all of you, who had just mentioned my Sunday listeners chairs, YouTube watchers, my YouTube watchers. I almost have 2000 subscribers. I guess it’s nothing to sneeze at. Yeah, I have more YouTube subscribers than I have podcast listeners. Anyways, it’s thanks to all of you, and especially our clients in the day, it’s our clients that pay our bills and help us fund our charity. Charity, I have a registered charity. We call it the Hamilton bash brigade. The charity was able to donate $10,000 worth of winter wear to school kids in Hamilton, Ontario, as is our way for charity and I love value. We’re very frugal individuals. And we love efficiency. Hence we purchased directly from a manufacturer or wholesaler we received a 20% discount since we’re a charity. The winter coats for example, we bought these are adult sized winter coats, we were paying about 45 each 45 for $45 Each and winter boots. Also they are adult size because we’re going into high schoolers. So these kids are not small and winter boots, for example, around $40 for a brand new pair of boots with tags, and these are quality items. In total, we provided for schools 142 winter jackets, 21 pairs of winter boots, 160 hats, 50 pairs of gloves, as the need is great. My friend Nancy, who is a school administrator in Hamilton and one of the high schools shared with me that they receive a couple of refugee families per week from Ukraine, Syria, and we’re at a place where we just fought a war Afghanistan. Some kids do not even have fixed addresses as they do not even live with their parents. It’s incredibly sad out there. And I encourage everyone to give however they can. We’re done for the season. So feel free to give to your local school church, your local charity, donate your time, whatever it is, there’s a lot of meat out there. And all you investors out there who haven’t started investing the need to invest has never been greater. Anyone didn’t notice healthcare is on the decline, senior care as well as on a decline, rents have skyrocketed and the demand supply mismatch for real estate has never been worse. We all have a problem to solve All to ensure our family’s financial and healthy well being. Health well being is to be taken care of my team and I are here at Iwan real estate are here to help if you have not already gotten onto my email list and receiving the invites to our webinars, meetups, property tours and mastermind lunches. Well, that’s just silly. On my website. There’s my free book became real estate investment playbook. You can sign up for the book for free, you can sign up for my newsletter along with 10,000 plus other hardworking Canadians. Learning the latest truth about real estate investing, simply add your name and email address on the right side, www dot truth about real estate investing.ca. Again, that’s www dot truth about real estate investing dossier in 2023. My plan is to double our amount of educational content we produce as we love to help. To be honest, I think it’s a public service that we need to be done. As we need to crowd out the less qualified who are putting out content, we will start hosting meetups as well. We are expanding as well. We’re going to begin hosting meetups and tours east of the GTA, for example, Oshawa to Kingston as we’ve expanded thanks to add the addition of coach Steven Phillips of HGTV fame, who joined our team in 2020 to 2023 is going to be an amazing year for many. When people look back 510 years from now they will definitely no hindsight being 2023 This hindsight being 2020 2023 was an amazing year. It will also be a terrible year for many as interest rates are going to be elevated for a while. And for those who invested wrong. My forecast is for our clients to kill it as they always have since 2010. Thanks to our repeatable systems and our best in class power teams. And that is the truth about real estate investing. Hopefully you will join us or some someone that you care about. Again, that’s www dot truth about real estate investing.ca. This week, we have the lovely story about a young millennial who started the journey in his passion, which was health and fitness. If you’ve ever met or seen Vince Lee in person, you know he’s jacked. He looks like a personal fitness trainer. Unfortunately for personal trainers living in Toronto, it’s hard to get by thanks to a supportive partner shout out to chewy and the trustor town community shout out to them say Vince has been able to create a side hustle and real estate investing specifically started in rental owned he scaled us since this scale to larger and more projects branching out and strategy as well. We think we mentioned some of our short term rentals and even small apartment building investing is also moved the family from the expensive Toronto area to the more affordable Edmonton, Alberta, which is to me it’s unfortunate that we lose some of those talented events from our area to somewhere else for affordability reasons, but Vince’s story is a good one. It reminds me of why I invest so hard so I can afford to keep my kids close, living close to me. Which means living in Ontario slash GTA. Congrats to Vincent success. Please enjoy the show. Vince, how’re you doing?

 

Vince  

I’m doing great. How are you doing?

 

Erwin  

Way too overworked. But what’s keeping you busy these days?

 

Vince  

More. So my real estate investing business trust your talent is an organisation that I’m part of. And I just had a newborn on August 23. And so the biggest bulk of my life right now is being a father. So that’s that’s where most of my time is going and then it goes into my business and then and then into treasurer talent Academy.

 

Erwin  

Pull my busy busy. Congratulations on being a father.

 

Vince  

Thank you. It’s different, or girl girl, her name’s Mira i What’s the background on that it’s a Japanese name. I’m Chinese, but it’s a Japanese name. It means I thought it really well because it means the future. And so I see her as the future because as you know, we’re on this path towards financial freedom and wasn’t taught this in, in school wasn’t taught this through my family or friends and really had to learn it the hard way. And so I want to I set the future because I it’s a unique name, by the way. And also, I see her as an opportunity where she’s the new generation in my family where, you know, living life a lot different. And I don’t even know if she’s gonna end up going to University of anything, but she may I’ll let her make her own decisions and choices and but it’s really teaching her that she can she can really do her own thing if she want it to whatever she wants to do. Fantastic.

 

Erwin  

And before recording you mentioned you’re from Cape Breton. You don’t even know if like for someone from Cape Breton.

 

Vince  

I am definitely a half newbie. And if I drink enough, the the accent does come out.

 

Erwin  

Are you kidding me?

 

Vince  

Really? It does. It does. So I would drink some water to

 

Erwin  

make this happen. You went to town I had been in town ever. What was the last time you were in town?

 

Vince  

Well, I moved. I moved to Edmonton six months ago. So last time I was in town was back in September for a conference there. What I’m hearing there I mean, you know, I can travel when I can when I want to at the moment not so much just because of the fatherly duties. I’m kind of strapped at home and my boss and my second boss now is not giving me any vacation time so rarely at home most of the time. But yeah, I’m from Cape Breton Island. I grew up in North Sydney Nova Scotia. That’s where I was, was where I was raised. I was like A small time boy and I grew up proud being the the Asian guy or the Asian family in town, I did have a little bit of racism there too. But it wasn’t really I didn’t think of of it as racism more so than ignorance. And it never really hindered me because I just thought it was just how people’s opinions or thoughts and I just kind of fit in with that and went on with my merry way. And but I made the move. And I was really excited to make the move out into Ontario because there wasn’t many opportunities growing up as a kid. And I guess, more small minded, if anything, and no offence to my own people there. But people don’t really think outside of the box. And so when I moved to Ontario was when I kind of started seeing more opportunities or different types of people and different views. And that really opened up my mind to really seeing more potential on things I could be doing out in Ontario. The opportunities were different.

 

Erwin  

What was like the career path your parents had for you? Back in Cape Breton,

 

Vince  

typical Asian parent, what do you think? Lawyer Doctor somewhere in the healthcare, some kind of professional field that has a bit of title under the name

 

Erwin  

primary in Halifax? Or like in Toronto or New York? Like what were the toronto, toronto? So the plan path for you was to to go to Toronto

 

Vince  

then okay, yeah. And ideally was going into like a bigger school like Toronto University. I like to say I’m one of those failed Asians, I was never good at school, I was actually really bad. I was not like an a PA student, I think, if anything, c plus two a B student horrible at math as well. So was not my strong suit. I’m not good at math. And even to this day, I’m not good at math. However, it was the fact that my trajectory was to do well in life. And that was what I wanted to do was to do well, and that was what was ingrained. And now I, I went to Toronto, I went to school at York University instead. And I graduated from Kinesiology, I actually did seven years of education prior to university was college, and I did health and fitness from there. So I wanted to stay somewhere in the health industry, at least, at least a sense of success of anything in the health industry, I was not really a doctor, but I was a kinesiologist. And I was working towards becoming a physiotherapist. But that was that was kind of where my roadblock started. And I wasn’t really making ahead in life, you know, I was making probably 30 to $40,000 a year, living downtown in Toronto. And what kind of bothered me too, was the fact that my partner, she worked at the bank, and she didn’t really go to school for that she just kind of got hooked up from one of her associates. And you know, one thing led to another, she just moved up the chain, and climbed the corporate ladder. And she’s like, you know, making 60 70,000 to 80,000. Whereas I was stuck at 30,000, and then up to $40,000. And I’m like, I studied seven years for this, and I’m working my butt off. And this is my passion. You know, this is my dream job. This is what I wanted to do. And I’m only making $40,000 a year. Whereas my partner here, didn’t go to school for this, she just kind of got the job. And then she’s just climbing the corporate ladder, and she’s making all this extra money. And I’m thinking, wow, like, that’s not fair lifestyle fair. And so she worked a lot of hours, and I worked a lot of hours trying to make ends meet. And we were together and, you know, got to a point where, you know, you’re not getting built, you’re working. And the same thing every day, you’re really busting your butt off. And you’re not really getting ahead in life, you’re not making the money that you want. You’re literally just scraping by paycheck to paycheck. And I remember like living in my little apartment in Toronto, and it used to be like cockroaches and like random bugs that I would see. And it kind of was disgusting. But we live there. And we couldn’t afford to live anywhere else. And so we just had to make ends meet. And I didn’t know there was another option. I didn’t know there was another way of doing things. I just thought you had to go to good like go to school, get good grades graduate, and then you would find a good job and job ideally with benefits. And then you would work till you’re what 6570 And you retire from there. That was the path that I was on like most people, but

 

Erwin  

doesn’t work. So I changed like oh, you’re down the real estate path.

 

Vince  

So what changed was when so as I was saying I was working there. I think I was working for about four years I worked four years at the time and first year was pretty good. Second year I started wondering how much more longer do I have to continue doing this third year I was like okay, is the same thing as the first year and second year and I wasn’t getting paid much more until the fourth year. That was about the time I kind of hit my I would call it you know, you heard a midlife crisis. quarter life crisis bit Sure. Mine was a quarter life crisis. I didn’t know that was even possible. So I hit my quarter life crisis that at about 26 my personal life was falling apart and I made my Bob asked excuse of why I didn’t see my friends or families for so long because I was working to be successful really. And so I haven’t seen my friends and family for about four years, I just really focused put my head down and worked hard because that’s what you were told to do. And to the point where I work myself to not being able to even see my own partner who I see only at nighttime, I see her at nighttime, we watch a little bit of TV go to sleep, and then we wake up and do the same thing over again. And so on the fourth year that our relationship was really getting a hit. And she was probably the only person I was close to at that time in life, because I haven’t seen anybody else for the longest time. And she was my only support my only communication with with a real person. And what happened was me and her, we were going through a rough patch. And she’s like, you know, this isn’t working. We thought we were gonna break up and you know, I was thinking like, maybe I should start seeing other people and I kind of started seeing somebody and it was just just to fill the void, really. And then we realised like, okay, like we’re about to break up at this point. And I had a moment when I was going to work. This was when it was like, I think it was sometime in June, back in like 2017 2018. I was heading to work and sunny, it was sunny like morning, six in the morning, I’m going to meet one of my clients one on one training. And to give you a little context of my client, he basically broke his back. And he was working as a contractor and fell off to stories. So he He almost broke his back and he’s almost paralysed. So his job was literally trying to kill him. And so I was training this guy, he’s probably one of the most negative people you’ll meet, and me and him were good. And I quite understood what he was going through because this guy, you know, his entire life is kind of upside down at the moment, he would use me as a punching bag. He would, you know, just say like Vince, you know, life’s not fair. You should treat me better, like things like that. He jokes around a lot. He always does that. One day, I was coming into work to meet him. This is the time I was going in in the morning to meet him. And I get up to the clinic. After writing the TTC, which you know, TTC is probably one of the most depressing places the public transit of Toronto, depressing place ever, especially during the winter. I was going to work and you know, I had the music blasting my ear and I was just trying to drown out my depression because that was what I was facing. I was going through a depression in my life. I was feeling so hopeless, I was lost. I was confused. My life was in shambles. I didn’t know who to talk to. I just kept everything to myself. And most most Asian guys do that as well, because you want to keep pace. You know, a lot of people show sign of weakness. And that’s what I was doing. And I got to the clinic, I started walking up the stairs and the moment I met I met eyes with my client. He started like throwing some jabs at me like Vince, why are you late at six o’clock? He should be on time. Like, hey, at 6am What should I pay you for and and the clinics open right at this time the clinic is open, it’s alive. And there are you know patients coming in and our clients coming in and out. There’s massage therapy, chiropractors, physio treatments happening, this is all the morning crowd, my my bosses, their managers, supervisors, they’re everything’s operational at that time. And I’m going into clinic, trying to put on my happy mask with a big giant crack in the middle of it. And the moment he started using me as a punching bag, I was just like, No, not not today. And I started throwing back jabs at him. And literally, like, as a professional, I was throwing down with this guy in the middle of clinic. And to the point I was like, go find a new trainer, like literally dropped the F bomb on him just completely broke apart in the middle of clinic. And I was like, Holy crap, I’m actually doing it. Like I’m actually saying, and it feels so nice to say it. But I’m like, I gotta hold myself back because it was my job or something’s gonna happen. But it just kept on coming out. It just kept on spewing. And right at that moment, I was like, Oh my god. This is my entire career that I just lit up into flames. And I’m like, Okay, I gotta really, really got to get my stuff together, because I’m probably gonna get fired very soon. And there’s, like, what am I going to do? Am I gonna live on the streets? Is my partner going to be the one that’s supporting me the whole time? Like, how am I gonna find a new job, like, all these thoughts started coming into my head, but I knew I didn’t want to work anymore. Because if I just found a new job, it’s going to be the exact same thing. It’s just me working at a place that I’m not going to find fulfilling. And I was thinking like, even if I was getting paid 50 bucks an hour, I’m not going to be making enough to survive and live a comfortable life in Toronto. So I actually went to the back of the room that at that moment, and I was I was just sitting on the computer in the office and back. And I was just pondering my life like what did I just do? Like what just happened? I’m recollecting all my thoughts and pulling my composure together. I’m on the computers searching up 26 year old don’t want to work what to do. And that was the first time I was introduced to passive income. That was the first time I was introduced to the word buyer, which stood for financial independence retire early. And then passive income, financial freedom came about. And then I started thinking, okay, so there are these people who are on this path to financial independence. And I’m I’m only learning about this. Now, I’ve never been taught this and never thought that this is even a possibility. However, people are finding ways to do it, whether it’s through real estate investing, whether it’s to stock trading, or to investing to I don’t know, any kind of vehicle that you can think of, but people are making it work. And so that was the turning point in my life that really sparked that light bulb moment of, okay, there are people figuring out how to hit financial independence and financial freedom. And so the question to me was, how do I do this? I don’t have any money. I don’t have any qualifications as as an agent or as a mortgage broker. So how do I do this? How do I start? Where do I start? So I started looking for solutions or looking for answers and start reaching out to people and seeing how they do it. Start watching podcasts like this, that gives people some kind of spark and hope that if there is a possibility, there’s different options that you can do. It’s not just one track minded, there are ways to do it. And so that day I went home, it was very humiliating. By the way, it was very shameful, like, what happened, I felt so embarrassed of everything that just like, I can’t even believe that I did it. But I went home with my tail tucked in between my legs. And I just said, you know, this is what happened at work today. I like lost my mind. And I just want to tell you that our relationship is not doing well, I’m not happy, I’m very depressed, I don’t even know what I want to do anymore. However, there’s something that I want to do, which is I want to go on this path of financial freedom. And that was when I started talking to my partner chewy, about financial independence, financial freedom, and there’s a way to be able to do it. But we got to really put our foot into it and make it a commitment in our life if we want to do better in ourselves. And I knew at the time, my time was very, was very strapped because I knew I was gonna get fired. And I was like, we got to do this, like, as soon as possible, I gotta fire my boss before she fires me. And so then, as we started looking for solutions, that was kind of when I, you know, I ended up going, going to this workshop, a three day workshop, and went there and quite sceptical. I wasn’t sure exactly what I was getting into. I didn’t know anybody that was at that workshop. And I was, I wasn’t sure if they were just trying to scam me or steal my money. However, I knew that. If I didn’t do something, my life would be exactly where it is. But if I’m willing to do this, it’s not it’s not pretty, but at least it’s better than what I’m doing now. So I took the leap of faith, and I jumped into professional training, I got myself a mentor. And that’s actually where I met Tim and Ray, who’s my mentor, and they really showed me the light on what could be possible. And

 

Erwin  

this sorry, this was rich dad, the euro. Yeah. It was it was called that at the time,

 

Vince  

right? Legacy, it was called legacy at the time. Oh, okay. Okay, so. Okay. Yeah. And I don’t even want to say it was legacy that that helped me get to where I was, it was the people that I associated with. That was people that helped me get to where I were, where I am today, my, my coach and my mentor who had taught me everything that I need to know, to be able to think a little differently and think outside the box. And so that was when, like, what was getting started, I think within four months, when I first got my my first real estate investment deal, like within four months after getting education minute, not having my own money starting it was the fact that I knew what I was doing. And then people that I took the same education with, they knew exactly what I knew. So they knew how to structure the same deal. Or and I was like, Well, I don’t have any money. You have the money. But you know, we have the same deal here. Let’s do a joint venture. Let’s do a 5050 split and let’s make this happen. That first deal, right in the same week. Then I had a second deal tied up right up right after. And I’m like, Wait, did you put any money in? No, that’s the thing. So yeah, 50% of the deal for doing what? For bringing a deal together, putting my knowledge and education together. Okay, right. Like that. That was the only value I brought to the table because I physically did not have money going into the deal. So what I brought to the table was the deal and my knowledge and what I’ve been taught, right, I’m sorry, the Who was your partner, another investor that was in the class with me, okay, they didn’t want to do the work. She didn’t have their first deal yet. They didn’t have their first deal. Okay, okay. First deal, right. And I was taught also at the very beginning by my coach and mentor and they’re like, you know, you never use your money for one deal. If you have a deal, share the wealth. You have your money, but your money with somebody else’s deal because someone else is gonna put their money with your deal. So you always have deals going back and forth. No more Like, that makes sense. Well, regardless, I don’t have money to put into other people’s deal. I need other people’s money to put in my deal. That’s the only way I’m going to work. And so I brought in the deal. And actually that taught me about this first deal about this first. Yeah. So this first deal. The thing is, it was a cookie cutter for the second deal. Also cookie cutter, the third deal,

 

Erwin  

but the first cutter, but not everyone, not everyone has training. Yeah, don’t please tell me about it. What was it?

 

Vince  

Yeah, that first deal. I think we were making $1,000 cash flow. And that was that was after a 5050 split. It was a lease option deal. That was my first strategy that I’ve learned ever in real estate investing. It was a lease option deal. And so that lease option deal, basically gave me the confidence. And I’m like, Oh, I can really do this.

 

Erwin  

I’m really sorry, for apologies for listener doesn’t know what a lease option deal is. Please explain it.

 

Vince  

Okay. Yeah, sorry about that. So lease option, or the street term is called rent to own. So it’s a, it’s a programme to help individuals who are looking to get into homeownership that can’t qualify for a mortgage, for whatever reason, it could be for like, let’s say, lack of downpayment, maybe they haven’t saved up enough money, maybe they have some credit issue. And the credit isn’t at the best outstanding position to qualify for mortgage, sometimes they’re just new to the country, and they don’t have established credit, or they have the money and the credit. But they haven’t lived in the country long enough, or they don’t have employment history. So there can be multiple factors that may be holding them back from being able to qualify for a home. And so somebody like myself will come along and be able to structure a rental deal, where I come in with basically the tenant who’s looking to buy a home. And the deal that I put together, which is the rent to own or lease option deal. And then I find an investor who’s willing to put the money down and qualify for the mortgage. And so when I tie all those things together, we have a programme to help that family assist them into homeownership in the next two, three, or even four years. And the goal is to ensure their success in homeownership, which I think, given our current time, right now, today’s economy, I think rent to own is, is really taking a light on because that people are starting to recognise Oh, this programme actually started this new programme called rent to own. And I know it’s not new, it’s been around for a very long time. But people are starting to recognise there is options for them to get them into homeownership. And I often like to say, as well as turning renters and homeowners and homeowners and investors, because you’ve started already establishing that relationship with them as well. So but hopefully that answers the question of rent.

 

Erwin  

Oh, no, I have more questions. Like details? What was the first property? What was the property?

 

Vince  

This was an Ingersoll, so we were working with the family and they were basically Hey,

 

Erwin  

are you like yada yada, yada, a whole bunch? I went education and put the deal together. You didn’t mention that you’d like went to Ingersoll? Yeah.

 

Vince  

So the numbers made sense in Ingersoll and that was the family that was looking for a home. And so they were from Ingersoll. And so for me, it didn’t really matter where the location was, as long as the numbers made sense. And the deal made sense. That was why I ended up doing it there. Even though I lived in Toronto. I was still renting and but I ended up helping a family. Get into homeownership prior to even me being in homeownership myself. Okay, good.

 

Erwin  

I’ve heard of Ingersoll at least so between Woodstock in London? Yeah. So what was it? Three bedroom house? What was it?

 

Vince  

Yeah, so three bedroom house. This was a family and he was a regional manager for furniture store, a family of two or sorry, a four. So mom, wife and husband and then two daughters, and they had a dog. And the reason they couldn’t get into a home was simply because behind us regional manager here, right? They do make he makes really good money, whilst also making good money, but they couldn’t get into a home. And the only reason why they couldn’t get into home, what was it down payment or credit, it wasn’t down payment or credit. Actually, they did have a little bit more down payment. But it was the fact that they bought four Cadillac cars, one for each one for each family member. So wife had a Cadillac, the husband had a Cadillac and the daughters both had a Cadillac. So that’s why they couldn’t afford to get into a home. So part of the programme was to help them pay down their cars, and then to buy them the time so that they can get into their own home. And so that’s why these trips to the rental on deal with them.

 

Erwin  

That’s the first I’ve heard of the hot water before.

 

Vince  

It was it was a it was a great experience. And as an investor, my investor who was working with us we made really good returns on it so right couldn’t complain on that deal.

 

Erwin  

And for the listeners benefit putting together a deal is not easy. You have to go find the tenant. Yeah. Then you have find the house and the house is over an hour drive from you. Yeah, So

 

Vince  

funny enough, like, Yeah, I had to I did drive to that property. And I did drive to see the family as well when I first started, but you’ll, you’ll soon realise that you really don’t need to see the house, you really don’t even need to see the family in person. You could relatively do everything will resume. These days,

 

Erwin  

you’re talking about 20? I don’t know if zoom existed back in 2018. It did.

 

Vince  

It did. I just didn’t know that I could do it. For virtual, I just wasn’t comfortable yet. Because it was my first deal. And I’m like, Well, I’m just nobody over the phone. And it looked like a baby. I didn’t have beard at the time or anything that’s like, literally looked like a baby. And I was like, Who’s this guy that’s going to trust me, and he’s a regional manager of a furniture store. And he’s looking at me like, Okay, can I even do this for him? But yeah, exactly. You know, I was really just doubting myself in my ability, because I wasn’t sure if I could do it. It was it was my first deal. I wasn’t sure this is even legit, and like how possible it was. And I was doubting my own competence. But that was the thing. Once I tied everything together, I was like, Oh, this really works. Like it actually really works. And so that that’s what I mean by cookie cutting. Because once I did that one time, I just repeated the same thing for the second time. And I repeat it for the third time and on going forward. And each time that I did it, I got better at it, it got a little bit faster, got a little bit more systems in place. And that’s why I said I, I do it’ll resume now because I don’t even have to see the property. me seeing the property doesn’t bring any value to the table. Because if I go there, I don’t know what I’m looking for in terms of the foundation, or if there’s any problems with the drywall. Like, my goal is let’s get a inspector who who’s a professional at that and leverage his abilities. And he can just drag me up the report. And I’ll look at the report to see if it makes sense. All right, I’ll ask a realtor to help me find the home because what am I going to do one MLS and look for a home for them? Like, no, let’s get the religion I helped me look for a home. And that way I can structure everything together with with the inspector and or and if the house makes sense, let’s buy the home the family and as long as the family likes the home themselves, and we’re good to go.

 

Erwin  

Are these regular realtors and home inspectors that you’re using?

 

Vince  

Well, a lot of them we’ve built relationships over time. And with realtors, it took some time to find one that actually made sense. And that knows what they’re doing. The first realtor that we worked on, not so well. But you know, we just have to remind them that we’re the buyers, not the tenants, though the tenants are going with you to look for the home, we are the one that are going to buy the home. So as long as the realtor is really on point and they know what the relationship is like. I think that’s that’s why it’s important to know that where they stand and where we stand in that aspect. So yeah, I wouldn’t say the regular realtors, I look for realtors that are a little bit more investor friendly. And the they know that they may have to think a little bit outside of the box as well. And as long as they can think outside the box. And they’re open for that. Those are the people I want to work with fabulous. So it depends. It depends.

 

Erwin  

Okay, so tell me what the thing is hold property, do remember how much it was, ah,

 

Vince  

I think it was around the 400 range. It wasn’t that expensive. And we sold it to them at a higher value, obviously for the next three or four years. And we locked in a new purchase price in the future. Despite by the way how the economy is just going crazy right now. I think right now, it’s probably going at like seven or 8%. Right now. We locked it in at about four or 5% at the time. Appreciate Oh, four or 5% appreciation per year. So for the next three or four years. And so when actually we exited out of that house, I think it was last year of September when we exited. And so they were like the tenants were like just laughing because the houses were so much more expensive. And they got it locked in at this price. We’re okay because we’re we’re looking at okay, this is a business for us. And we have a happy client right there. We still made our money that we were intending everything was agreed on and we honoured the price. And everything worked out really well. Right. So we rented it for the rent was a little bit higher that there was a bit more premium rent on that. But they I knew they could afford it. And there was also an option consideration as well, which is an additional amount that we were putting aside for them every month. So that was part of our cash flow as investors and pence. I think the cash flow was around like $2,000 a month was the total rent, the total rent, I think it was like almost 4000 Almost. That was the total the total mouth. Yeah, so not exact same the exact numbers but I’m just giving some ballpark numbers right now. But that’s what I remember from

 

Erwin  

and then based on the rent, how much do you factor in for the to go towards the down payment for the house?

 

Vince  

That depends. So that depends for them. We were aiming for about I think it was more than about 15% I believe it was. However, when they actually went to qualify for the home, they actually didn’t need 15%. So they actually had a little, a little bit more money saved up at the end of the day. And funnily enough, they used all the money to buy furnitures at the end. So

 

Erwin  

they sell the catalogues. Do you even know how to stop the Cadillacs? Oh, yeah. Well, for the same way, it’s not gonna really turn over and buy New Orleans.

 

Vince  

Yeah, that’s what happened on that first deal. So that was, that was really an eye opener. I didn’t know something that like that would be possible. It was it was crazy. It was just really like, Okay, I managed to make this happen. And I didn’t mean use my money to do it. So different perspective of looking at it

 

Erwin  

will get you to put the hustle together to put the deal together. Yeah.

 

Vince  

But it would have not been possible if I didn’t know what I was doing at the time. That was why I say like education was what brought me into the light of being able to make it possible.

 

Erwin  

Did you collect the lease option fee upfront.

 

Vince  

So the way that the rental home works, and just for the audience, the way that the I guess the cash flow, or the money works on this deal, you do get three sources of income. So there’s an active part, there’s a passive part, and then there’s an equity part at the end when you sell the home. So for them, they put a bit of a deposit upfront. So that was roughly about $10,000, that they put up front. And then there was their monthly amount that that is basically our cash flow. So the passive income from the cash flow from the 4000 rent, yeah. And then when we sold the home back to the family, that was the additional amount that we made, which was the spread of how much the cost of the value of the home in the future. So we made money off the back end as well. And so that’s where are all three streams of income being received this?

 

Erwin  

Right. So even if you did, like 20%, down, you’re earning four to 5%. Price Appreciation per year. Yeah, yeah. times five, you’re making 20% of your money just on appreciation. Why have cashflow while you have? Why do you collect the 10? Grand up front? Yeah, yeah, if everyone works out, well, it was great.

 

Vince  

Yeah. And that’s the thing, right? Like, I mean, if you don’t know how to do it, and you’re trying to put this all together, you could put yourself at risk, you could put your investors money at risk, you could put the family at risk. And I wouldn’t recommend people who don’t have professional training, just try to structure any type of deal if they don’t know what they’re doing. Like, you got to really take care of people’s, you know, the money and the family that you’re working with, like, these are real people. And these are live people that you’re taking responsibility for. It’s not something that you joke around with, especially if someone’s giving you the life savings, for example, it’s, it’s a real thing that you got to handle.

 

Erwin  

I agree with you more, because you’re dealing with the property, which is your asset, the tenant is almost like your asset, because like your customer, correct. And of course, you have your investor and put the money. So everybody’s gonna be taken care of. Yeah, so that’s a great first deal.

 

Vince  

And, you know, I want to say that I did have a lot of support along the way, like, it wasn’t just me doing it all, figuring it all by myself. Like, aside from the education, I had my mentor there guiding me all the way through, because anytime signing documents, and like the paperwork, like trying to understand all these paperwork, I was quite lost. But I had a lot of help from from my mentor. And also my partner was there as well. So my partner was played a huge factor in getting these figured out. And as I mentioned, I’m not good at math. So even crunching the numbers, I realise it’s not even about understanding math, but you can do everything on a spreadsheet if you want it to. You just punch in and go. So for the listeners right now, if you’re bad at math, don’t think that investing is all about math. It plays a role, but it’s not the key factor of financial success is just a part of it. Makes it a little bit easier. But

 

Erwin  

yes, I’m checking numbers.

 

Vince  

Yeah, yeah, exactly. So I had I had people checking my numbers, my mentor checked the numbers, my partner’s checking the number and everything made sense. And we just went with it.

 

Erwin  

And then is this your primary business putting deals together? And then I’m guessing you’ve invested some in some of these as well.

 

Vince  

Yeah. So I think fast forward from there. When I first started, most of my deals were acquisition mode. So I was out there actively acquiring properties and putting deals together and finding and raising monies for my properties. And then fast forward to today, like 2022, there’s a bit of a transition in my portfolio, because a lot of my deals are starting to mature. And I’m able to pull out a lot of equity. And finally, once in my life, I actually have money to reinvest in the the passive investor. But getting started, I think, when I was starting first and foremost, I had to be very active, and start raising all of it and doing all the work by myself. And then now I’m trying to transitioning over on the passive side where now I have the active income. And all this income that I’m utilising now is going into the passive side and I’m getting other people to invest with me and for me investing with other people. And then making sure the deals that I’m investing makes sense to me. And so I say it’s trust and verify. So in the last like three and a half years. I wasn’t just actively investing in creating deals and Lisa options, I was also still getting myself educated into more different strategies, learning how to do creative financing, learn how to do multi units and learn how to do short term rentals. So I can open my horizons on different strategies. Even if I’m not the active investor, I can now basically be able to have money from somewhere and tie up a deal and treat the deal as if it was my own because I’m looking at it like, oh, okay, the numbers make sense to me. I’m verifying the deal, despite me trusting you or not, as long as I trust you, and I verified the deal now. Okay, let’s make the deal happen. Make sense? Right. So and still the money’s not all of it coming from myself, sometimes I may borrow money from a private investor, I become the bank. But now I become the joint venture on the deal. So it kind of goes, money just kind of flows through me now as as the individual the personal value or worth of being able to put together and that’s, that’s really the magic of it. It’s quite awesome.

 

Erwin  

Do you have a preference for investment strategy? Now? Are you doing Oh, are you doing a little bit of multi bit of short term rental but a rent to own?

 

Vince  

I still really enjoy lease option, I think lease option, to me really a spirit of going seeing the families succeed. But I did get more into creative financing like private lending and whatnot. Sorry, you’re lending your funds. Yeah, I’m lending a lot of money out to and then of course, backed on hard assets that I believe in. So the deal makes sense to me. I’m willing to lend privately to you for the deal that you’re working on, even though not directly on the deal. And as well, I got private, sort of a private, a lot of mock teas that I’m working on as well out in New Brunswick. So there’s a few deals there. Currently a move I moved to Edmonton, as I mentioned, and we’re working on

 

Erwin  

you mentioned that before we were recording, yeah. So

 

Vince  

So now, yes. For the audience. I moved to Edmonton recently from Toronto. And while I’m here, I’m actually looking at a lease option deal in Calgary. So I’m in Edmonton, so it’s a three hour distance, that everything’s done over zoom, by the way, so I’m not driving to Calgary to do that. Let’s say you love this work from home business. Yeah, it’s nice. It’s quite relaxing. Let’s just say like that. And then we’re looking at a home in Edmonton as well for short term rentals. We’re dabbling a little bit in the short term rental in, in Edmonton us walls just to see how that goes. So it’s nice. So I’m quite diversified in that aspect to different real estate strategies that I’m working on. Fantastic. Yeah.

 

Erwin  

Explain why did you move from Edmonton, Toronto? Very different segments

 

Vince  

in Toronto’s Edmonton?

 

Erwin  

Sorry, what? Why did you make the move? Because in the last quarter, I think we’re probably gonna see for a while, something like 20,000 folks from all over Canada are moving to Alberta. Super exciting. And then before we’re before we’re recording, even though you are from the East Coast, it seems apparently I was reading in the paper that less people from the East Coast are moving to Alberta. Yeah. You know, people right. You know, people that have had done previously made the trip people from maritimes has moved migrated to Alberta to do work in the oil sands, for example, that sort of stuff.

 

Vince  

If you ever come to Edmonton, you’ll see, you’ll see a lot of people that who have moved from the Maritimes, to the Edmonton area, they usually have the Newfoundland sticker or the Cape Breton sticker on their on their car. So and you see it all the time in Edmonton. And it’s really cool to meet other fellow maritimers here. But at the time when I was growing up and living in Toronto, and when I was working a lot of the friends that I had in the East Coast, I guess some of them didn’t go to further education. Instead, they started working and blue collar work in town, I guess. A lot of them not even moved to Alberta at the time. They basically travelled there to work and then travelled back home. And I believe that work schedule was about working two months and then going home for a week and then working another two months. And then going home for a week that was kind of like a like a typical schedule. So a lot of people that I knew work in Fort McMurray on the oil rigs, and they were actually in the in the oil rigs themselves. But they made really good money they were making like anywhere from $200,000 and upwards. I know some people that are working on the oil rigs in the ocean from the Newfoundland side. I think they were making up like $300,000 and more. But then you got to wonder money. You gotta wonder is worth it because you’re only coming home every two months for a week and then you go back to work. And then you come back for a couple for like a week and then you go back again. So the schedule, you got to really factor in like okay, what am I missing in my life if I’m, if I’m spending all this time on the oil rig, and then you got to wonder how dangerous these positions are. Because you never know what can happen in these positions. They’re quite dangerous there and heavy and it’s very lavoris. Right. But yeah, so to answer your question, a lot of the people I’ve seen in Edmonton, there’s a lot of people that have moved to Edmonton, so a lot of my old high school or elementary school friends currently live in Edmonton, but I haven’t met up with them yet because I’ve been I’ve been here for the last six months now. And I just talked to a friend on Facebook and she’s like, Oh, I’m in Edmonton, too. And I’m like, No way. We’re in Evanston. She’s like, Oh, I’m in the metal area. I don’t even know what the metal area is yet. But she told me, she’s in Edmonton. So, you know, once I settle down a little bit more, I think I might end up reconnecting and rekindling. Some of those relationships are rare. But I moved to Edmonton simply because it was, it was kind of part of my plan in life. Because when I first started this journey back when I was 2627, by the way, when I was 27, was when I hit financial independence, I quit my job at that time. And that was when I fired my boss. So I did fire my boss before she fired me. So but at the time, we were talking about how we wanted to structure our life, what do we want to do for the next year, the year after, and this was obviously before COVID, we didn’t know COVID was going to happen. So the plan was back in 2019, into 2020. We were gonna get married, and we wanted to get married and Santorini. So we were, we were planning out our, our wedding, me and my partner were planning a wedding. And after we get married, we wanted to buy a house. And then after we buy the house, we were gonna like start family. So have a kid, that was the three year plan that we had on the agenda. And then as you know, 2019 happened and COVID happened. So we’re like, well, the Santorini plan is not going to work anymore. However, we’re still sticking to our plan, we’re still working on portfolio and, and instead of spending the money on a wedding, we just reinvested all the money to grow a portfolio. And so that’s what we did.

 

Erwin  

And she was okay with this. She was okay that you blew up the wedding budget on houses.

 

Vince  

It was fine. Like she’s on the same path as me. And she understood exactly what we were doing. And what was that? Wait, how did

 

Erwin  

you get her on board, not many people would be on board with blowing the wedding budget on buying investment properties.

 

Vince  

She was on board with me because she actually jumped into the education with me. And she was my only she was my only support. She was the only person that was there to believe in the thing that I want it. You have no idea how lucky you are. And I hear this all the time from people because it’s hard to get your other significant other on this path because you’re like, it almost seems like you’re crazy. That’s what it sounds like. And yeah, so she she was on board with me. She’s literally my my b&b partner we call in bed and business partner. So that’s what she is

 

Erwin  

always supposed to right and better.

 

Vince  

We basically said, you know, cancel a wedding with Asian weddings. The reason we chose that Turini was because we told our parents, generally with most Asian weddings, your family is inviting like everybody. And there’s, you don’t even know who’s at the wedding anymore. Like it’s all strangers. for yourself. Or your parents. Exactly. We chose your friends, they invite their friends. Yeah, it really it is that’s exactly what it was. And that’s why we chose Santorini. Because we said guys can invite whoever you want, won’t pay for your plane ticket will pay for accommodation. But if you invite anybody, it’s it’s your responsibility. You pay for their ticket, you pay for everything else on their end, or they pay for themselves. Yeah. But you know, the wedding never happened. So we reinvested the money for real estate properties. And as the year was progressing, really, okay, maybe COVID is not going to clear out anytime. So let’s, let’s just put the wedding on hold, who cares about the wedding. And that was when my partner came up with the idea of in loping, so that was a first time hearing about moping where instead, if we’re going to, we’re going to get married, let’s just travel the world and buy a tuxedo and a dress. And then we’ll just take pictures at different parts of the world. And then that will be our wedding instead. So that that was the second plan on on the bucket list. However, COVID really didn’t die down, like COVID kept on going strong for the year after. And it’s even to this day of 2022. It’s still around, it’s like, lingering around. It’s still around on the table, but we wanted to start a family. And as a woman, for the women listening on the call. Sometimes they’re thinking about their biological clock, they’re like, Well, I’m not getting any younger, I gotta get get this done. So we’re like, well, let’s, let’s start a family then. And so we were people were telling us like, it’s gonna take you a year you should you should start trying like as soon as possible because it’s gonna take some time. And so we’re like, Okay, let’s start trying, let’s let’s start making this happened. And everybody told us not gonna happen overnight. You’re gonna have to work at it. And everybody likes me. Everybody lied to me. It happened overnight. Sounds like Sam like now. Well, okay, we have a baby on the way. And so now we have to find a house ASAP. And so this was when all the prices were skyrocketing Ontario, like actually, even Ontario right across the country, the prices were going up, and we made the decision to move to Alberta and this was before everybody was going to Alberta. So we’re like, you know what, let’s go to Alberta because cost of living is a little bit lower. And I could definitely make my money run a lot further if I ever wanted to. travelled back to Toronto. I have a lot more money to allocate when I’m living there because cost of living was lower. Right? And so tell us how much lower What were you renting in Toronto before I was renting in Toronto. However I was living in I actually got really lucky on the rent that was at so I was in 700 square feet apartment began. This is Yong Yong and Sinclair. So wasn’t wasn’t a bad location, and I was paying a little 1500 a month. That’s cheap, very cheap. However, the fact though is, if I was raising my baby in that place, it wouldn’t make sense. Yeah, but you know, yeah, people have been been through worse, but I didn’t want to do that. Yeah, because I knew I had options on the table. This was already when I was doing financially well. And if I could choose, I would I would continue renting. That was what I would have done. We were actually planning to rent and we were looking for a place to rent in Toronto. We were looking looking for more of a home like maybe a townhouse or you know, what’s that called? Like? A two story apartment. That’s like, like, a lot, like a lot. Okay,

 

Erwin  

a lot of our styling for a stock condo or something like that. Yeah, something like that. Yeah. Okay.

 

Vince  

So we were looking for it. And we’re like, if we rent it somewhere like that, you’re already looking at like 2500 to 3000, maybe more every month. Or we could buy a house. Or maybe we can rent a place in Edmonton. We looked at different places. We thought about New Brunswick. We looked into Vancouver and we’re like, well, Vancouver is too expensive. New Brunswick doesn’t have anything there. There’s no food. There’s no anything. There’s no. It’s like in the middle of nowhere. Saskatchewan. In the middle of nowhere. Manitoba was in the middle, no matter

 

Erwin  

how many more people you want to offend. What did you end up choosing?

 

Vince  

And so we looked at, we looked at our bird and we’re like, Well, my partner is from Calgary. And she’s like, well, I don’t want to I don’t want to go Calgary because my

 

Erwin  

Okay, yeah, because it’s nice. So,

 

Vince  

yeah, Calgary is really nice. And they have a little bit more of more, I guess, amenities there and restaurants there. Yeah. And we’re like, let’s move to Calgary. She’s like, No, my family’s there. I don’t want to live close to my family. Okay, it was like, okay, so where’s the other option? Well, there’s Edmonton. And I’m like, Well, I’m missing gets really cold. It’s like, last time we went there was like minus 40. However, if it’s minus 40, during winter, we can always go on vacation, if we wanted to, we have extra money to allocate, let’s let’s use the money to go on vacation, then. That makes sense. And so we decided on Edmonton as the the final location of where we want to stay. And so that’s why we chose Edmonton as, as our, I guess, home base now.

 

Erwin  

So we moved to Edmonton. And then limited, you got a house you renting,

 

Vince  

buying a house, we were going to structure a rent to own for ourselves, but it didn’t make sense. So we didn’t end up struggling to rent a home for ourselves. Then we thought about House hacking. And we were thinking, okay, maybe we can, we can buy a duplex. And we can do a short term rental on one side, and we’ll live on the other side. And then we looked at it, it’s like, oh, it’s not worth the work in the hassle. So we’re like, Yeah, let’s just, you know, screw it. Let’s just bite the bullet. Let’s just buy a liability for ourselves. And we’ll just buy a home and we’ll pay for it. But we can afford it. So let’s just do that. And so we ended up just buying a house to screw it. Let’s just buy a house.

 

Erwin  

So why don’t you buy three bedrooms? Something?

 

Vince  

Yeah, so three bedroom and video contacts. I was under 700 square feet apartment. Right? This was a 1700 square feet home, not including basement. So the amount of free space I have now is not even comparable. So I’m like, okay, not even not even joking. This is like a huge, huge upgrade in my life. And I have this beautiful home and pretty much brand new and I’m raising my kid in this house now. And then, as you know, I’m living from Toronto moving to Edmonton. I have to buy a car because I can get around. So then I ended up buying a car too. So I was like, okay, I can afford to buy a car. This was my car too. Then we got a car. Awesome, like enjoying 31 years old and I bought a house bought a car. start a family. It’s kind of hard to believe for most millennials nowadays because it’s things are so expensive now. Right.

 

Erwin  

And I’m sure people will fall behind you as well, where you’ll see more people in Alberta in the Eurasia group.

 

Vince  

Yeah, yeah. They’ve been expanding the soil in Alberta in Edmonton, where I live anyways, the city is in the centre of a giant road around the ring. It’s we call it the ring around Edmonton. And the ring has been expanding on their their lanes so they’re they’ve been opening up new lanes to accommodate the new population boom. So which is awesome because if Edmonton is growing I’m they’re growing with it, which is awesome. Amazing. Yeah, happy. Pretty happy.

 

Erwin  

Happy for me. Awesome. So then you see a lot, but you see a lot of deals like especially because of the year and they’re pretty active community of like Tim seems very rare. They seem extremely legit. Yeah, I know, I know all your friends there, they seem extremely legit in terms of in terms of investing, as soon as you guys invest in each other’s deal, so you must. So you see a

 

Vince  

lot? Yeah. Well, that’s, that’s the benefit. I mean, that’s the benefit of being part of a community who’s active, who’s been educated, who have the right mindset, and who’s thinking of growing and succeeding as well. Because really, there’s no win and lose, it’s more like Win Win, like, how can I help you to help me help you because now we can work together to grow and to share the not even just our wealth, but sharing our resources, sharing our knowledge, because I’m not going to know everything. But I’m sure I can find somebody that knows what I need to look for, if I need it. I’m not going to have all the money in the world. But I know there’s people that I’m working with that have extra money sitting around that’s willing to invest. Very, very, but that’s your deal

 

Erwin  

looks like, looks like Yeah, yeah. And

 

Vince  

even if you were, for example, like let’s say you’re in Ontario, just because you’re Ontario, you you’re not going to know everything about Ontario. And if you are looking to invest into other places, like different provinces, or if you’re planning to go to the states, if you know, people who are, who are actively engaged, they’re actively investing there, that knows that market better than you, right? You have somebody that’s ready to go, right. And you could be the same person in Ontario, who knows the Ontario market. So if I needed something like, oh, we jump to you?

 

Erwin  

Right, right. And you share values, you’re, of course, I’m destined, you’re all protective of your reputation within the community as well,

 

Vince  

for sure. I think the reputation, my mentor always says, you are only as great as your last your last deal. Honestly, honestly, the truth, right, and it’s not about the money. It’s about the relationships that you built and the reputation that you’ve created. And if anything, it’s it’s always thinking about how you provide value over profit? Is the profits, just the byproduct of what you’re gonna get? What kind of value are you actually providing to the people that you’re working with? Because that’s, that’s where the real thing is amazing.

 

Erwin  

Now, what’s your what’s your current deal that you’re working on?

 

Vince  

So the current deal, I have a few Maltese in New Brunswick. And then I got the short term rental that we’re looking for right now. And then the lease option deal that will work in in Calgary, that’s probably the bulk of it. And then I made, I think, two private loans, just in the last four months. And so I got those data just leveraged out recently. So that’s pretty much everything that’s on my plate right now. And in terms of my own personal business,

 

Erwin  

right, so you have your hands on a bunch of things, how many hours a week, are you working?

 

Vince  

Funny enough? It’s not as crazy as people think. Even going back to a lease option deal, you’re, you’re probably spending total it does take like maybe three months to put everything together. But in total hours spent, you’re probably spending about 10 to 15 hours in total, putting everything together. It’s just making a few phone calls here talking to a few power teams over here. And you know, just putting some of the numbers together here and all accumulative like on a lease option deal, you’re probably looking at 10 to 15 hours in total. Something with multis, it may take a little bit longer, because there’s ongoing moving pieces that are consistently moving and progressing. So

 

Erwin  

there’s renovations that are always going on. Yeah, exactly. So

 

Vince  

that that probably takes a little bit more time it takes time to stabilise the portfolio in terms of novelties, but it’s not as what people think of it, it’s not like, you know, you’re like pulling out your hair unless you’re going through some really big, big problems in your in your portfolio. But in terms of hours, I mean, you’re really just allocating time where needed. And remember, we’re not looking to do this to buy ourselves a new job, we’re doing this the buyer sells more time. And so how you decide on allocating your time and even if anything, is creating a system around the processes that you’re doing it so that way it becomes more streamlined, just like the lease option deal. My first deal probably took more than 10 hours to put together because I actually had the drive there, meet the client meet the realtor, look at the property that probably took a lot more time but now it’s like okay zoom call, one hour call zoom call with my mortgage broker one hour call and and then talk to my relative another hour call. So it’s like it’s not as time consuming as you think it is. Awesome.

 

Erwin  

So Ashley, can you tell us about your Calgary rent to own I’d love to have something to compare against Ingersoll

 

Vince  

this this property that we’re we’re still in the process of putting together this one is $400,000 property that we’re aiming for.

 

Erwin  

Oh, so inflation didn’t happen.

 

Vince  

So we’re still in the process of getting the deal structure. So we do have a family and she’s from India. The reason why she’s looking to get into rent to own is that they are currently living with their parents and I guess they’re trying to be independent and live on their own to have them like a kid. On the way I think, and basically they’re they’re looking for a way to actually buy their own home, but they’re not in the position because they don’t have the downpayment saved up, and credit scores, perfect that no problem with credit score at all. So their their main reasons that they don’t have the downpayment, that’s the main thing that they’re lacking. Now, basically, the husband is the one who is looking to qualify for the home on his own, because he’s the one he’s the breadwinner, and family, he makes the most money. However, we’re planning to factor her income as well. So with her income comes into the picture, we’re looking at maximum, I think, like $430,000 as a home purchase price. So actually, sorry, home purchase price would be less than that, because that’s the appreciate. That’s what we’re selling the home back to them at 454 50 Max 430 is what we’re aiming for four days, the maximum that they will be able to qualify for at the end of the programme. So the house that we’re looking at would be what’s the value of it today? Probably, I think we’re looking at like 375 or something around that price point. And then the appreciated value after the three years would be able for 50. Max. Hopefully that makes sense for the audience.

 

Erwin  

Are you taking any money upfront?

 

Vince  

We are so we’re looking at $10,000 upfront. And the cash flow, we’re not sure yet because we don’t know what the price of the home is going to be. But we’re still working

 

Erwin  

with you have a some sort of benchmark for rent, though.

 

Vince  

The rent are probably looking around. So if it’s around 375, we’re probably looking at 1800 $2,000 Just as rent on its own just rent, not including the option not including anything else is just the rent on its own.

 

Erwin  

Got it. And then once you know what the what’s what’s know what the host is going to be Ben, you’ll factor in, Yeah, unfortunately goes towards the down payment.

 

Vince  

Exactly. Well, we got to factor in, we got to factor in our cost of carrying the mortgage as well, because we’ll be carrying the mortgage, the interest rate may be a little bit higher for us as well, because of obviously, what’s happening with the economy. So depending on what the interest rate that we’re getting at them, we can really figure out what the what the rent should should be sitting around for them as, as the renters of the property. The numbers aren’t set yet. We’re still working in the process with with our mortgage broker. Right now, once we get the numbers finalised, the next step is getting him into talking with the real estate agent. Amazing example. Yeah, Nothing’s set yet everything’s still up in the air. But I think things are really progressing slowly through the process.

 

Erwin  

And what do you see going forward? Like? No, these are pretty rocky times. We’re recording this late November 2020.

 

Vince  

This is a good question, because nobody knows what the future holds.

 

Erwin  

I’m sure you already are Yeah.

 

Vince  

Yeah, so of course, I’m always adjusting pivoting and just changing with the times, despite the fact that interest rates are going up. I mean, property values gone down like crazy, which is perfect time for anybody, if you make if you actually calculate the numbers, and it just makes sense, despite the interest rates are up. But you got to think about it like, Okay, I thought about like, Okay, if interest rates are going up, prices of properties are going down. Do you think maybe that there may be foreclosures coming up, maybe during the recession, as things get a little bit harder may be a good opportunity for investors who are educated to take hold of opportunities that are presenting themselves. And I always say, as an investor, we’re there to solve problems. And when a recession does happen, and if and if and when it does happen, I don’t know if we’re living in one right now. Or if it’s just gonna get worse from here. When that recession happens, as a problem solver, there’s gonna be a lot of opportunities are presenting itself. And if you are not prepared for these opportunities, then you’re missing it, you’re missing the boat. And one day, down the road, people are gonna say, well, Vince, you got lucky you are there at the right time at the right moment. And you took advantage of of the recession. I’m like, No, yeah, definitely. I was there at the right time. But you were there, too. What were you doing at the time when I was doing it? And the biggest difference would be the fact that I was prepared. I got myself educated, I got the skills, I got the knowledge, I got the right people around me have all my ducks in order. So when I need anything I can I can always reach out to somebody to prepare myself for when those opportunities present themselves because it’s fair game, anybody and everybody has those opportunities, equal opportunities, but it’s really, do you see the opportunity? And if you do, do you know how to act on? Because if not, you missed it. That’s the sad reality of it. And I don’t want to, you know, punch anybody in the gods, but that’s just the truth of it.

 

Erwin  

So is the truth about real estate investing events? I actually think it’s a great way to end in the interview. where can folks follow up with you if they want to follow on your journey?

 

Vince  

Oh, yeah, so you can always follow me on on Instagram. It’s the only events you can also find me on Facebook is the only Vince and also take a look at trust your talent is trusted.

 

Erwin  

Literally, it’s the only events because the only a few go to LinkedIn and type instantly. Too many. So you specifically it is type in the only Vince Lee is the

 

Vince  

only Bensley, I’m the only one.

 

Erwin  

Like type that you can

 

Vince  

also find me at trust your talent on Instagram, we’re really active on that as well. So it’s trust, and then you are and then talent. So you find me as as well there and a lot of stories and students to connect with as well. But you can find me on Facebook as well. I’m very active on Facebook, don’t hesitate to reach out, I’m always open to a conversation. No matter where you are in your journey in your life. Sometimes it just takes that one conversation to really change the perspective of what you believe in what you see the world. And I think it’s not just about how, how to do something, but also who you know about doing something. Because once you meet that person, they may give you a different perspective. And you’re like, Oh, I never thought of it that way. And that might set you on the right path and what you need to do, right?

 

Erwin  

So speaking right paths, have you staved off the bad dad bod.

 

Vince  

I still have a dad, I still have it. I bought

 

Erwin  

whatever buddy. You gotta be the most jacked guy in your group.

 

Vince  

Remember, it’s no different than financials, health and fitness is no different than financial, you don’t have to be, you know, like, you don’t have to be like an accountant or a lawyer to be you know, well versed in it. You just need to understand finances and you need to understand how money works to be able to create financial success. Same with the dad bod. If you want to learn how to be healthy, you got to learn it. You don’t have to be a fitness trainer or a kinesiologist you just need to know how it works. And nowadays, I look at labels before I buy any food. I’m looking at it like oh, yeah, that makes sense. Like okay, before I buy it because it’s innate and needs part of my lifestyle. So when I buy properties, I do the same thing. I’m like, I’m looking at the labels and Okay, does this make sense to me before I buy it? It’s the same idea. Amazing. So

 

Erwin  

FYI, folks, you’re running events, and he’s jacked up because he’s jacked. All right. So because you can’t tell him or zoom that he’s Jack, but he’s Jack. All right, Vince, thanks so much for doing this. Congrats on your success, man. Happy to hear you. Yeah, yeah, let me know next time you’re in town. I got to make one of these. One of Tim’s events. didn’t raise it. Yeah.

 

Vince  

Thanks so much for for all your support and happy having having me on the podcast as well. She thanked

 

Erwin  

him for that.

 

Vince  

Every weekend. Thank you. Take care. Have a good one.

 

Erwin  

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

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Flipping, Private Borrowing & Lending In A Market Crash With Diana Lizarazo

How refreshing is our guest Diana today! 

It goes to show one can’t judge from an Instagram handle. E.g. Diana’s is @investorgirldiana when really it should be @sophisticatedinvestordiana!

But I get it; we are supposed to be humble and modest in our marketing 😎

 

 
 
 
 
 
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But screw it. Diana is legit. She shares her experience and numbers flipping from a $2.3M luxury house in Toronto to a century home in Hamilton to Windsor private lending as well.  

There are lots of numbers in this episode, including mortgage rates, as some of the capital was private money AND Diana shares how she personally lends her own money. 

Diana’s taken expensive courses and masterminds…

The quality of some is questionable as there were folks in the same masterminds as her years ago who are now bankrupt financially.  

That’s right, some courses, memberships, and coaching have a negative return on investment.  

As an investor, you must conduct proper due diligence on anything you invest in, including education.

With her conservative projections and her husband as a skilled general contractor, Diana has navigated this declining market and exited flips profitably. 

Some are more profitable than others but not without challenges which Diana shares.

Sidenote: I’ve noticed a trend where an investor’s ability to execute on construction or renovations can make or break for investors… Especially the full-timers. 

In my experience, constantly working with the best of the best contractors has been instrumental to my clients and our own success in our portfolios.

No contractor is perfect unless you marry them like Diana, but many risks can be mitigated with the right one and proper oversight.  

We do that for our clients, connect them with the same contractors we use, and we are in regular weekly contact with them for our own projects and our clients.  

Here at iWIN Real Estate, we do volume; hence we are usually our contractors’ top referral source, and we’re all looking for win-win-win results…

A win for the contractor, a win for the client, and a win for us in that we have a happy client who buys more houses and sends us referrals. 

We are in this for not just long-term but rather intergenerational relationships to create intergenerational wealth as we literally have three generation clients: grandparents, parents and the kids.

Please enjoy the show!

 

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 FREE Online Training Class.  We will be back in person once legally allowed to do so, but for now, we are 100% virtual.

No need for you to reinvent the wheel; we have our system down pat. Again that’s  www.infinitywealth.ca/events and register for the FREE Online Training Class.

 

This episode is also brought to you by www.stockhackeracademy.ca, where everyday real estate investors learn the best practices in stock investing to earn cash flow in about 15-30 mins per day from their mobile phones. After real estate, Stock Hacking is the next best hustle, as you’ve heard from many past guests on this show. Among our students last year, 31 trades were shared with them. 30 were profitable for an over 96% success rate and 12% return on capital. I will be giving free demonstrations online, very similar to the one I gave my kid cousin, a full-time musician who just made a 50% return in 2021.  Past, of course, does not predict the future, but if you’d like a free demonstration, go to www.stockhackeracademy.ca in the top right and click FREE Demo.  At the demonstration, I’ll have special bonuses. We do not advertise publicly for all my favourite listeners, and I only have two more demos to give in the next few weeks.

Don’t delay www.stockhackeracademy.ca, what I consider the future of side hustles with real estate so unaffordable for many.

 

To Listen:

Audio Transcript

**Transcripts are auto-generated.

 

Erwin  

Hello, welcome to another episode of The Real Estate casting show. We have a whole bunch of great stuff lined up for the New Year guests that we have to put up our fantastic include today’s episode, we’re rolling out a lot more educational content. So stay tuned to our YouTube channel, my Instagram, this podcast, we’re basically doubling up in terms of the amount of education that we’re providing and sharing on this on our all of our channels. There’s a lot of bad advice out there. And it saddens me how much how many people are out there interested in lending their own pockets rather than actually helping people get ahead in life. My team and I are taking it upon ourselves to put out stuff that actually works. So that is the treatment real estate investing show. Straight up. Last week, I met with my clients, a whole bunch of our client, my clients who you know, from five to the last 10 years. For those who don’t know, I’ve been a realtor and coach, investor specialist realtor since 2010. So I’ve had I’ve had lots of clients with me for like 10 or more years, and they are doing outstanding. Sadly, there’s a lot of people who are suffering right now who are struggling, some may be approaching bankruptcy, some are being forced to sell, feel really bad for those folks. And at the same time, there is an incredible opportunity on the horizon. So anyways, we have it sounds like a bummer. But we have a wonderful guest today. Actually, I think Dana’s extremely refreshing. I’ve been going down this rabbit hole of investigating what happened with some of these companies that went bankrupt, trying to understand what went wrong, speaking to one of them as well, but that’s that’ll be, that’ll be for another episode. Today we have someone who’s actually successful, and she caught me off guard. We’ll be honest, Diana’s Instagram handle is extremely underwhelming, not underwhelming. It just investor girl, Diana, when it really should be sophisticated investor, Diana, but I get it. We’re Canadian. You know, we’re supposed to be humble and modest in our marketing or social media, whatnot. But screw it, Diana is legit. She shares her experience in numbers flipping more recently, she exited successfully exited a $2.3 million luxury house in Toronto. She sold it this year in the middle of this massive decline. She just did a century home in Hamilton, Ontario. And she even does private lending on a property Windsor. We talked through much of this. So there is a bunch of numbers in this episode, including deal numbers and mortgage rates. And that’s particularly important because a lot of the capital that Diana uses is private. So but now, it’s not talked about enough, I think, or maybe talking about too much because there’s a lot of people hurting from too much private money. But Diane shares how she personally lends her money and she talks to her experienced borrowing as well on these projects. Diana has taken expensive courses and Masterminds as they leave. She mentioned three of them on the show. The quality of some of them were questionable or questionable is questionable. As folks from those masterminds, which were years ago, folks that she met at the mastermind, are now unfortunately bankrupt, financially, potentially other ways bankrupt. But that’s right, some courses members, coaches, Financial Group real estate influencers, there can be a negative return on your investment of your money and your time. I myself have the same challenge. I was looking for Zhan YouTube for some training videos to watch in terms of like personal fitness. There’s like so much that’s not good. But yeah, the internet in social media can be both wonderful, and it’s truly terrible at the same time, it is your job as a discerning investor to conduct proper due diligence on anything you consume, and invest in including your time and money in education. Diana, however, with her conservative nature and her projections in her husband as a still general contractor, my understanding is he does that for a living. They have navigated this declining market and exhibited flips, profitably, some very profitably, some less profitably, but all profitably, which is which is a marvel in this declining market. Again, it’s not without challenges, Diana goes through many of them. And they were some of them are doozy. And that’s the point of the show. We discuss both what works and what doesn’t work, so that you may learn from the lessons I may learn from the lessons as well. So side note, I’ve noticed a trend where an investor’s ability to execute on construction or renovations will make or break their deal, especially the folks who are attempting to go full time in real estate. In my experience, if you work continually with the best of the best contractors, in my experience has been instrumental to my own portfolio, my clients in our success, those unable to execute, they’re in for a whole pile of hurt, especially when they’re if you’re paying private money or anyone should have if you have a vacant property. No one likes vacancy, right? I don’t like that. You can see I don’t like paying into vacant properties and then some least folks who tried to become full time investors, flippers burn investors. Unfortunately, they have multiple properties that are vacant, burning a massive hole in their pocket. It’s not that any contract is perfect. I had some samples of that when I have the term my own properties. Anyways, there’ll be another episode. But if you marry one, if you marry a great contractor like Diana did, she’s married to one, you can mitigate a lot of risks with hiring the right contractor and proper oversight. That’s something that we do for our clients, we connect them with the same contractors that we use personally on our own properties. And we regularly check in with our, with our contractors, because we need updates on quotes and renovation statuses. And while we all have those conversations, for our own properties, we’re having those conversations on behalf of our clients. As we hear it. In real estate, we do volume, as you can imagine, hence, we are usually our contractors top referral source, and we’re all looking for we as a team, we’re all looking for that Win Win, win result, and win for the contractor. We want them to make money win for our client, we want them to be a successful real estate investor A win for us, because we want a happy client who buys more houses and sends us referrals. That’s been our model for a successful business. We are in this not just for the long term, but rather intergenerational relationships to create intergenerational wealth for ourselves and for our clients. As we literally have already three generation clients, we have grandparents, parents and their adult kids as our clients. So and that only comes when you produce results for folks. And that includes our general contractors, some of them our clients, as well. So without further ado, I give you Diana, hi, Diana. Hi, what’s keeping you busy these days?

 

Diana  

actually feel like I’m not busy? Because, yeah, real estate wise, I feel like you know, all our deals, like last year was super busy. So much going on. Now with the transitions and you know, recession coming, or maybe we’re in it, I feel that, you know, like, thinking of February, like, I could not make any numbers or Alright, so things just went very slow. At least on the active side, I mean, some private lands, we were doing it but you know, we changed, right? We did a lot of, you know, last year, I was doing seconds would not even touch a second this year. You know, so just even just the word just so many changes happening and having to adapt to what’s what’s going on.

 

Erwin  

Yeah, I don’t know if anyone thought that things were shift so violently, not violently. But

 

Diana  

I felt like I felt this year things were going to plateau. To be honest, I did feel like that they were going to plateau. And I think that’s why for like the flip does telling you about I think, you know, I did We did well, like it went fine was because I had that expectation that I don’t think things are gonna go up and I felt this year was going to be like a plateau. And it really solidified when we did that super high up. That was just like, Oh, wow. And obviously not counting at the plateau from that top. I mean, as in like from last year, you know, I was thinking that this year would probably be more of a plateau type of thing. Pretty cool.

 

Erwin  

Can you tell us about your most recent flip? Because I’m sure we both think you’re insane. Because we’re recording this. We’re now mid November. So when When did you acquire the property?

 

Diana  

So this one actually came with a lot of problems? Because we bought it last year? So we actually bought it in September of last time? No, no, it wasn’t a bad time. We were supposed to though we if everything went as planned, actually, we would have been selling at the height of the height of the market. So we would have actually probably made a lot of money. And I mean, so like you would have been like like that we probably added we were probably added maybe like a 50 60k to it like Yeah, well what happened was, so the person that was selling the home, they were losing the property, because of a business deal that they did that they were waiting for that money to come back. And they were it was just like a huge deal. And they needed some time to wait for that money to come back. So we did a right of refusal of right of first refusal, and to allow them to buy back the House. And so when we looked at the contracts for the business, and when the payments would be coming back, it should have actually come back within that year. It was literally actually through the contracts they should have been like within that month, like that’s how but the banks are going to already foreclose on it. So we learned a lot about contracts for straighter refusals and knowing how to write contracts properly now, because that was a problem. So because the guy was stalling because he wanted to buy back his house. He kept on using many stall tactics. So imagine that we started negotiations in January, and we didn’t find out, you know, 2021 and we didn’t finalize until June. And then yeah, and then he didn’t close in July. The closing was in July. And then so we didn’t think to put it on the market in August because cuz we’re just like it’s slow season, let’s wait it out. And then we put it on the market mid September, and then that one really fast a week and a half, we got an offer, which I would say was very surprised because the stats right now are 30 to 60 days. So that was like, amazing. And we got her number which was same thing that was amazing. We were really happy about, you know, that, that it went at least at what I went well, in that sense, it’s so it’s, I felt like for all the stress that we had to go through with this guy, we still reap the rewards of it. And it was because like that, I did the analysis with thinking what happens if issues come up, and making sure we were nicely padded, because we knew this was like an emotional type of home. So you know, with that comes a little added baggage, which we kept, we got all of it, you know. So, so it came with its drama, but it went really well. And I attribute it to like that conservative numbers. Like I think it’s so important to like, run the numbers and make sure that it makes sense and you’re not hiding it. Or one of the things that I see a lot of investors do is predictive values, you know, oh, you know, it’s this and I do the flip. And by next year, we’ll be up like another 10%. So I’m good. I don’t do this. Yeah, scary stuff. I think very

 

Erwin  

scary. Yeah. Now we know it’s really scary, but even in any time. Okay, so Okay, so I’m having trouble. The timeline. started negotiating January 2021. You closed in September 2021.

 

Diana  

The actual clothes? Yeah. The actual one with the with the new sellers. Yeah. And sorry, the no, sorry, the the offer was in October, like we put it on the market in mid September. So we went probably firm like, end of September or beginning of October. And then we close close at the end of October or I would say like is actually November 1. So beginning first day of 2021 2022. This is on 2022

 

Erwin  

or sorry. Sorry, I’m asking when you got into it when you got into the

 

Diana  

last year. Yeah, yeah. So I bought it last year, September. And we just sold it now. I don’t know if first

 

Erwin  

so the timing is terrible. It can be worse but but it looks like you did the homework to make this work out.

 

Diana  

Yeah, yeah. And like that we had Plan B’s and stuff because we did discuss because of all these issues if we had to hold it then what would happen so we also weren’t in a situation where if let’s say things were just really really bad like I know other people were they have to hold it we were we were also able to hold it but are we were trying to maintain plan A and see see it through because like that at the point is still everything still looked favorable. It was just Yeah, it was still favorable is just like got another couple of months still waiting kind of a thing. But things were still things were still good. Okay,

 

Erwin  

so tell us about the property. single family detached

 

Diana  

single family detached? Yep. Like three bedroom. They got two and a half story. Oh, yeah. I had like, also like a huge, like workshop in the back. So we never did anything with that. We left that out as was because there wasn’t enough space at the front to do what you needed to be able to actually make that an accessory dwelling. Maybe now you could maybe maybe with all the changes. Yeah. But our strategy was just to like that foot just to flip it and just single family home like a quick and like that, because we also at that time also had in mind was that we were selling it back to him. Right. So like, he probably wouldn’t have wanted that. And for us, it was just, it just didn’t we weren’t sure if it mates or actually even in running the numbers to be honest, at the time, it didn’t make sense to put the money into it because it was quite expensive to, to put it in and the timeframes and everything because we did we wanted this to actually be like six months in and out that was the plan like so. So in six months, we wouldn’t have been able to get the permits and everything done for the back unit. So it was just not really in our plans.

 

Erwin  

So the plan was to do like, How bad was the property? Didn’t you a lot

 

Diana  

it wasn’t actually bad. Okay, it was actually not very much renovations needs to be done. I would say bad in the sense of we did have to get both the roofs done. We had to go okay, yeah, so we had that was there was so there was like a water issue upstairs in one of the window like one corner of the house. So we did need to get both the roof done because that was bad. The basement so there were some bad things actually. It’s not I’m saying like yeah, it was literally, like, aesthetically, it wasn’t bad. But the basement for example, is unfinished and it was like leaking from everywhere that like I don’t know what place didn’t have water coming out of it. It was just leaking like crazy.

 

Erwin  

Not that bad. It just turned into basement leaking everywhere.

 

Diana  

But it was it was actually not expensive to fix. Because the way the way the leaks were coming it was just like deteriorations like for example, leak was coming through the window for example. So it’s just you had to do proper sealing and fix the area around it. And then there was one crack going through, which they’re able to do, I think it’s called the injection molding and fix it. And then like that there was plumbing that went out to the, to that workshop. And that wasn’t done to code at all. And that’s where a lot of the water was coming in. Well, there was like a flat there was like a, like just plumbing going straight like that. So it was like maybe two feet from the ground, not even like from the floor from me like a foot from the underneath. So we completely just took it out to because that was like where the major water come was coming out. And then we from the interior, we waterproof the whole basement.

 

Erwin  

Not that bad to have a waterproofing job. I

 

Diana  

mean, it’s not that expensive. Like when I think of like exterior waterproofing, that’s like insanely expensive. This wasn’t like even though it had like a lot of water issues. It wasn’t really it wasn’t expensive. Renovations, defects like like it wasn’t like there are some where you have to do the waterproofing from the outside. So I feel like those ones are really bad type of water or like water issues. And so this wasn’t that type.

 

Erwin  

So did your husband’s team do the interior or interior waterproofing? They did? Yeah. Contractor for no. price difference? Yeah.

 

Diana  

Yeah. My husband did it.

 

Erwin  

saves you a ton of money. 1000s of dollars.

 

Diana  

No, no, we’ve had companies come in. But again, maybe because there’s our subcontractors they charge differently to like clients, because it’s odd to me. I was like, I know, there was one job that we hired someone else to do it for a different one. And I can’t say I remember what it was. So this number may sound ridiculously low. But I know it wasn’t a big deal when two though. But they did a waterproofing and it was like like a 1500. Yeah, but again, it’s like we didn’t know them. That was the first time we had met them.

 

Erwin  

If it’s not a huge drop in costs, that’s close. Just in my experience. A lot of people are proven copies of markup like crazy. Like, that’s my own property. My own property in Hamilton. It was it was over 10,000 for interior interior. Yeah. It was the entire perimeter, though. Yeah, it was the entire perimeter.

 

Diana  

Which kinda did you use the like the blue skin? I don’t know, all the terms, like the blue skin the whole thing? Because we didn’t have to go to that level. We went to

 

Erwin  

a higher level. Yeah. Because because the city wanted it. I hadn’t needed an engineer to approve it all.

 

Diana  

Okay. Yeah. So I think it also depends on like that, I think it does depend on the level of helper, but it was because ours wasn’t not by that we didn’t need to do Blueskin because we weren’t contemplating having to do the Blueskin. The two layers, I can’t remember what they were, but I know one of those Blueskin. We didn’t have to go to that level. That’s why I say like, it wasn’t bad. Like, it sounds bad. But you know, there’s always those kind of, and I’m just talking because I’m with it so much with my husband, like, I know what he does

 

Erwin  

is different than a newbie, yes. Yeah. Like, for newbie is not bad for you.

 

Diana  

And I can give like a really funny example, actually. So on another project, we were doing a luxury flip. And this was in Toronto, and the whole house was guided. And the first thing we had to do was the roof because there was terrible leak problems in there. And so and this, we bought it in just before spring, like in in February. So everything is melting. This one was probably two, this was probably two years ago. 2020 or 2021. Okay, maybe this one was so actually yeah, sorry. That was last year. Yeah, cuz we did both. Both of those happened last year. Yeah. So that one was really funny because my husband sends me pictures of like waterfalls, basically all over the house.

 

Erwin  

Like nice ones are like your house is leaking. The house is leaking.

 

Diana  

Like, we were having water coming in from the windows. And then one side of the house was just like leaking really bad. Like it was like we I just cans all over the place. Right. And it was just really funny, because that didn’t traumatize this. But nothing was done to the house, right? Like it was just a fully gutted house. And as experienced investors, we know you have to get the outside done before ever wanting to do the inside, right? Because oral it’s what happens you destroy the everything right? So like that we knew that house, we knew that roof had to get done. And we gutted the whole place because that one was a full gut like it had to be gutted were to the studs, like all new insulation, I was like we basically built a new house that one that’s how the extent of the amount of renovations we had to do. Like for example, an experienced investor would know that you do get the outside of house done first make sure that you know you’re gonna be able to protect everything you do inside right so like that. So we got the roof done first. And then everything interior started to get done, but it was just really funny to see the pictures. And again, I’ve never seen something to that extent of like that kind of problem. But But I can tell you that when he sent me the text message or the videos, all I ask is like, is this a problem? And he says no, don’t worry, I And then as when he tells me I’m like, Okay, I’m like, as long as you tell me that we feel good about this, I feel good about it. But if he tells me, we’re in chaos, then I thought then I would be in chaos. Right? So I can I can tell you that also, I’ve never seen it to that extent of a problem. But I can tell you like that he was fine with it. He said it was no problem was not affecting anything. And yeah, it didn’t do anything for us. And there was nothing to worry about. But it was just like something funny to show that a first time home investor, no, first of all, they would never I don’t think you I hope you never know. But you as a first time so you shouldn’t

 

Erwin  

have it was three seasons of HGTV, good to go. Listen, we’ve done half an

 

Diana  

hour. Yeah, that’s true. So this labor do not do those kinds of projects unless you have a really good team because like that, that would give you a heart attack and a half, if you didn’t know what you were doing.

 

Erwin  

For novices. They don’t even they don’t know how to qualify a really good team. Right. That’s what we’re seeing now that’s out there. So let’s start with the Toronto flip. Where did you find the deal? MLS? Okay, okay. Yeah, people who say there’s no deals on MLS,

 

Diana  

I know I find it really funny. And to be honest, when people tell me things like that, you’re closing your eyes to opportunities, because for example, I look everywhere. I’ve done all of them. I found a deal like the Hamilton one. That one was private.

 

Erwin  

We’ll come back to that. So you find it on Toronto, you find it on realtor.ca. That’s right, this proper term realtor.ca That sounds like a disaster.

 

Diana  

Yeah, it was a full gut did actually when we saw when we saw it, for example, no one so already the third floor was gutted. So there was no installation up there. Oh, no kitchen. Period, no kitchen at all. Like it was in mid demo. Yeah. And then also another thing I noticed was that when we were closing, the previous owners hadn’t paid their taxes so they had to like they have no money. Yeah. So yeah, although but they had owned it for a long time to so I don’t know if it’s like maybe it was like a rented property neglected neglected. They

 

Erwin  

were bad with money. Yeah, maybe but I’m thinking maybe they

 

Diana  

were trying to see if they could do it themselves and then maybe just

 

Erwin  

why you can’t afford your taxes. You thought you’d get into renovation? I don’t know. winning formula. Formula. No kitchen partly gutted bathrooms were their bathrooms.

 

Diana  

It had a bathroom. But one you don’t want to even set foot. Yeah, like Yeah, it was not maintained or anything that definitely that type of thing.

 

Erwin  

So how did you finance the purchase? All private money because

 

Diana  

you can’t? Yeah, I mean, no ARB lenders are gonna definitely lend to that. Right.

 

Erwin  

Do you care to share who you probably borrowed from? Or? Oh, I

 

Diana  

don’t even know actually, because a broker just it was like, a make or something. Okay. Yeah. Something like that. Okay. I don’t actually know, like, the actual name or anything. It was just a broker that found it for us. Do you still like this broker? Yeah, yeah, actually, he gives me a really good dad deal, sir. He helps me you know, get deals and stuff started this.

 

Erwin  

Can you give us an idea what what the terms were like that one? Oh,

 

Diana  

my God, I feel like I think it was very standard deals, I think it was probably like 2% lender fee. And like six point something or seven, something somewhere in between there. So I can tell you like that, like the loan itself. And I tell people like, again, you have to have experienced for this because I think we were paying around $7,000 a month to cover just the mortgage. Right? So it’s like, you definitely do have to know what you’re doing right? To be able to have the guts, right for that kind of thing.

 

Erwin  

So this is negative 7000 cash flow. Good. Sounds great. And then how much did the house cost?

 

Diana  

1.4 foot boy.

 

Erwin  

Okay. All right. And then how should you put into it? Renovations budget

 

Diana  

450,000. It was a big project. Right? Because his interior and exterior work like like I when I say we built a new house like that’s basically what we did. We built a new house.

 

Erwin  

Yeah, that’s That’s enough budget to build one of my bungalows. Yeah.

 

Diana  

We basically built a new house,

 

Erwin  

then you and your husband served as general contractors, right? Because you’ve experienced that. And that saves you a lot of money.

 

Diana  

Yeah, it definitely definitely helps. Because especially like that if things are going wrong. At least we’re cutting into our budgets to just make sure that it happened. Right. So So yeah, I feel like it’s always good when you haven’t like when it’s your teams, right? Because it’s, you can always sacrifice or move. You can move things around a lot easier. Right? Or what I would really say what is the biggest thing that I noticed and especially between people who hire and then let’s say, if you have your own teams is that my husband goes above and beyond, you don’t get that from people that you hire very often right? To go above and beyond. Yeah, exactly right. So I feel like I noticed, I always noticed that kind of thing when people tell me about their projects that, let’s say, because I could tell you that I pay him retail. But I can tell you, for example, like, I’ll pay him retail. But if things go wrong, usually we still stay within that budget, there are times that we may have to go a little over. But for example, like that, I think like another person would be like, not my problem, you know, whereas like, we’ll try to make sure that we try to work within our budget, you know,

 

Erwin  

just for you, this is impressive. I know yours this, you know, I should just automatically assume you’re so sophisticated. And my policies, I don’t believe anything I see on social media. So the worst of people. So when you hear so many stories, right? You just feel like, Oh, God. And then how long did it take you like, this is a very big budget.

 

Diana  

That was a huge project. And can you imagine we got all of it done within six months, seven months? That’s impressive. Yeah. And I can tell you, though, the last two months, was the most stressful things of our lives, because we were non negotiable having to get it done within that time type of thing. So that one, I would say that one was a very stressful one, because what was the deadline? Because we wanted to, we just wanted to meet, we wanted to make sure we’re catching the right market and for this one luxury home. Family. But what I mean is also like in the luxury home area, specifically as a single family home, you’re only dealing with a very small clientele. Right. Yeah. And that clientele is in that march to the summer timeframe. Right? very price sensitive to Yeah. So to us, it was because other ones like for example, I feel like investment properties, they’ll almost any time of the year because it’s about the investment. Right. But when you’re dealing with families, that’s a whole different story. Right? They want to buy within a turn timeframe. And so we were like it has to be we want to make sure we catch that good market. So

 

Erwin  

through as a full business. Oh, yeah. Investment. There’s a lot of planning involved in this. You’ve even thought it through to who your customer is.

 

Diana  

Yeah. Yeah. I mean, especially if you’re dealing in the luxury home. I mean, you need to know like how that works. Right? It makes sure you know, where you’re, you know, what’s plan? Well, my point is not everyone thinks this through, Oh, yeah. 100%. And it shows like that the importance of like planning things, and that it’s not that simple, right? It’s like there are and kind of graduating through it, right. Like, don’t make a luxury flip your first one probably not a good idea, you know?

 

Erwin  

Yeah. And then, and then you staged it listed, listed, and then have the, the song go,

 

Diana  

it went well, that one actually was on the market for I believe, a month, maybe even a month and a half, but then it closed quickly, within a month too. And that wasn’t like the height of the market to write that. So it was like that, like what we, for example, expected I was when I was looking at I feel like luxury market always is like, that’s normal, you know, like that, at that time, we’re hearing other properties, like bidding war, and then sold that day, right. In the luxury market. I wasn’t seeing that I was still seeing like, you know, 30 to 60 days for the luxury market. So so that when that one fell through like the exact what we expected, right, it took like 30 days or, or maybe a little bit longer, like between 30 and 60 days for it to go. And then a month later it closed. Can you share what you sold for? 2.3? I believe it was 2.3 2.4 2.3. Somewhere around there. 2.3. Yeah, not 2.4. Yeah, sorry. 2.3.

 

Erwin  

She made a couple $100,000. Yeah, we

 

Diana  

did good on it. But remember, we have like a lot of holding costs. So it’s not like amazing, but we did good. But again, you’re supposed to do good in the luxury home. Right?

 

Erwin  

Oh, don’t be saying on the show. They’re trying to do the fair now.

 

Diana  

I meant it in a different way.

 

Erwin  

But the market was right. And you had the ability to execute. Yeah. And you have the funding to do so. Yeah, you had the pockets to do it.

 

Diana  

Yeah. But what I what I mean is though, like when you are getting into more expensive houses, you’re spending a lot more because you need this house to look amazing. Because your clientele is amazing. And the clientele pays amazing. My Nemorino like, I feel like it’s because of that, but again, like if you don’t do your numbers, you could screw it up royally too, right. Even in the luxury. Yeah. Because I mean, if they’re not,

 

Erwin  

that’d be done. Right. Yeah. Has to be done, right? Because I’m sure your staging Bill was enormous. Not as

 

Diana  

much as I thought it would be.

 

Erwin  

How many square feet was that? us,

 

Diana  

I think the Oh my god.

 

Erwin  

Did you watch in Toronto? Was 2.3 is a decent amount of money?

 

Diana  

Yeah, I can’t remember maybe 2800 Without the base is pretty big, but it’s three floors to. It’s pretty. So it is. I mean it is big. Yes. Because we did for example, like the whole third floor was the ensuite just for the master bedroom. So we had like the bathroom or walk in closet in the bedroom. So the whole third floor was like just for the master. And then three bedrooms and two bathrooms on the second floor.

 

Erwin  

Okay, so actually, this is a good question like, Would you do this deal right now? No, not at all. So even if you could buy this house again, for one point for what to do it?

 

Diana  

I mean, I’d have to run the numbers. But yeah, definitely. I would not do a yeah, this is way too unstable of an environment to go into something like that. And to be honest, I mean, when you’re going into this kind of thing, what suffers the most the luxury market too, right? Yeah,

 

Erwin  

well, yeah, the higher the higher. Because people I don’t know, if people who dig into the stats will know, it’s the entry level stuff that’s still transacting, which is partly bringing down the average price. Because anything that’s a good luxury. So for example, like anything on Treb, that’s over $2 million is probably not moving. Right? Yeah.

 

Diana  

Well, well, you were telling me last time on my show, right. That you said the reason why mine did was because it was under 800. Yeah. So I just found that interesting. Because yeah, like you just know like that. You don’t want to be in it like free market right now. Yeah. I mean, don’t do it.

 

Erwin  

4 million, for example, in Hamilton is not moving. And that’s really that’s really nice for Hamilton. Yeah. Mark is different.

 

Diana  

Yeah, yeah, exactly. It depends on the market to be talking

 

Erwin  

to your Hamilton flip. Sure. Okay. So where did you find that one? That one was private. How did you get them like flyers?

 

Diana  

flyers? Yeah, there’s flyers. Yeah. And like that, like, just something that you always know about? That’s very known in at least in the real estate community is that homeowners wait to the last minute are in denial about the problems are going through. So he’s like, textbook case. We were like, literally two weeks before the House is getting possessed. And from the bank from the, like getting possessed. Yeah, to go to the bank and like them to do the sale. So we had to act quick. Because obviously, it goes because imagine like in the height of the market. So in the height of the market, we bought it for 500. It appraised for 600. So probably fully sold with the if the bank took it, it probably would have sold for 600. Right? What would you get it for? 500.

 

Erwin  

Okay, so it was worth 600 At least

 

Diana  

it got appraised for 600.

 

Erwin  

All right, and then you said it wasn’t that bad in terms of condition. But yeah, your qualifying is not your average person’s Yeah. 600 in health is not disaster.

 

Diana  

No, no, no, I like that. Like the main floor. The only thing we did on the main floor was paint. That’s it. That’s it. Okay. What else stairs just where the second floor is where we had more renovations done. So like that one area, there was a leak problems. We had to fix the ceiling and just have that fixed. Like the damage from the roof leaking that damage from the roof leaking. Yeah. But then also what it was actually a one bedroom house. Oh, so they opened concept, the whole second floor. And he had his office was two bedrooms. So just open concept and just a master and then a loft upstairs. Yeah,

 

Erwin  

that’s permanence. Right.

 

Diana  

No comments about what they did there by

 

Erwin  

Adam. I remember Justin Hamilton in the house that we’re looking at the panel had an ESA and in my experience, it’s like one in 10 panels have an ESA sticker on it. I don’t know who does rent work and Hamilton but yeah, yes, I joke. I bet you $10 And there were no permits for those walls being taken out. Well, we heard

 

Diana  

that because she didn’t do any of the work. So this was actually the previous not him. It was actually the previous owner, the piers were owner who apparently was a woodworker, so he probably was just like doing whatever he wanted in the house. Right? And he’s the one who put like that illegal plumbing and that was just like one foot off the floor. So you can imagine that in the winter because there was actually a bathroom in the workshop, but obviously probably wouldn’t work in the winter probably I don’t know what they did there. Yeah, I’m

 

Erwin  

glad it took the plumbing.

 

Diana  

Yeah, no, I understand why took it out right. Or we took it out I should say.

 

Erwin  

So what did you do with the second floor then?

 

Diana  

I added the two bedrooms back in see the put on walls we put in walls? Yeah. But again, like do you like It wasn’t that big of a deal, right? You just put the walls up a couple grand no big deal. Did the house we had to do all the flooring because of the water damage because there was water damage. And there was previous water damage in the master bedroom. But there was no evidence of like, like they must they had fixed it already which the I mean, the homeowner said that was fixed. But there was water damage all over the floor. So we had to fix the second and third floor, we did flooring, that one had a new bathroom done. We fixed it because it was very the old style bathroom where you cannot even sit down if you’re a tall person because like your vanity is like right up to your knees when you sit on a toilet. So so we had to do the whole so that so the upstairs is where the second floor is where the most work was done. We added the walls, and we added a new bathroom floors and paint and the whole house like the whole house was painted. And then just second and third floors where we did all the flooring. So what do you think your renovation budget was? Our renovation budget was? So I did actually we just did the numbers because I thought it was 60. But I forgot about like taxes and stuff. So it’s like 65 Plus HST, sorry, them and HST the answer was 75.

 

Erwin  

Yeah, that’s not bad. And then how do you finance it? Also private? Yeah,

 

Diana  

that one was private. Similar terms. As you know, chimps are bad. The terms aren’t bad. Yeah. And these are not people that we know, like, are the brokers founder for? I can’t say remember what this one was actually, I think it was the same, like around 7%. And this one was, and then this one was broker plus, I mean, both of them were broker. The other one was broker, but it was one in one or something or 1.5. And one point, I mean, 1.5, and point five for the broker. But this one was, I believe, two and one for the broker. So that one was three 2% lender fee plus one precise, 1% broker. Yeah, whereas the other one was 1.5 to the broker, sorry, point five to the broker and 1.5 to the lender to the blenders for the listeners

 

Erwin  

benefit, but there’s lender fees broker fees. And so we’re, for example, overseeing 1% broker fee, it’s 1% of the loan amount that goes to the broker that’s an appropriate is paid, the interest rate is goes to the lender, whoever is actually has the money. And then the lender is also taking 2% lender fee based on the amount of the mortgage. Got her a complete novice. And then how long does how long this run will take.

 

Diana  

But that long, right. This one was not that long. That was like, two months. Yeah. Pretty good. Is a two month project.

 

Erwin  

No kitchens, no bathroom. Don’t you just use the

 

Diana  

bathroom? Yeah. Because it wasn’t. Yeah. And like that, for example. My husband doesn’t do exterior work. So the roof was done from like, one of our supply whenever, right.

 

Erwin  

Half story, it was one, two and a half, three and a half story. Yeah. So those those are really tough. Yeah. Because they’re steep peaks. Yeah. Okay. And then can I ask what you sold it for? Seven. But you sold for eight? And you

 

Diana  

know, 754? I think that sounds right. So I’m 54. Yeah, because we were above because our our numbers, we want it to be above 750. So that sounds right. 754

 

Erwin  

is a pretty good. Yeah, we did go up 500 for the house. 7500. Rent a budget. Plus your carrying costs and costs. Yeah. For only two months.

 

Diana  

No, no. What do we know? This was my this is the one hole we were there for a whole year. Remember, even though the rhinos were to mind member? The whole problem with the homeowner your

 

Erwin  

dirty clothes. So you had to pay carrying costs the entire time? No, so

 

Diana  

we had money. So we we weren’t sure what was going to happen. So we ended up paying the house in full. You pay cash, we paid that house. So we had a six month term with with the lender. And when it was time to renew, we decided not to renew because we weren’t sure of what what happens. So we just paid it out in cash instead. So we did that for the purpose of not knowing how long this would happen. And we didn’t want to put ourselves in a bad situation.

 

Erwin  

Damn, good thing of cash. Good, Lord.

 

Diana  

I mean, like,

 

Erwin  

when you can renovate credit, you had to close on it, but you didn’t have control and you couldn’t renovate it. Is that what you’re saying? How can you the holder for six months?

 

Diana  

No, no. So our plan was it to be in and out in six months. So we did a six month term with the lender. But because we had the negotiation problems with the buyer, first right of refusal, then midway

 

Erwin  

he was like saying he was going to buy it but then never bought it just drags you along.

 

Diana  

No. What was happening was basically we had our APs. And so we put the terms together. And we with our lawyer was send it to his lawyer and he would take two weeks to respond by. So imagine every single response by would be two weeks and he would try to change something small every time to make an excuse, waiting for his money. And so basically in the end, we just agreed to all his da, and we’re just like, whatever you get it. And we’re just like, because we knew he, after a while, we realized it was just a stall tactic. And then we just agreed, and then he couldn’t close. How long was that negotiation

 

Erwin  

period?

 

Diana  

From January to June? Good lord. Yeah, it was six months

 

Erwin  

to negotiate a sale.

 

Diana  

So that was like, for example, a huge learning experience for us. And first right of refusal, for example, terms become very important, right? Because with our lawyer was, since we didn’t have a defined negotiation terms,

 

Erwin  

you need the end date that right refusal? Yeah, well, we that we

 

Diana  

had an ND to the bigger part of it, but we didn’t have like negotiating back and forth, like allowable time for you to respond back. Right. So for example, then it becomes ambiguous. And then the lawyer is like, well, two weeks is allowed. And so he was doing his maximum. Right. So it was like that, because because there were certain things that were ambiguous, we have to go with what seemed right, or what seemed acceptable, like even for the appraisal, actually, some of that time was also the appraisal he took, he took a month to get his appraisal, where we were, we got it in a week, you know, like, and so he was just taking his time, because he’s waiting for his money to come. Yeah, so we have pretty like exciting type of project. But then use it

 

Erwin  

like that’s a really good lesson. I’ve heard this one before.

 

Diana  

Well, to be honest, yeah, good. Using our first right of refusal, I think, I don’t think that kind of project will ever come again. I don’t think it’s very normal like that. This guy knew a lot about a lot about law, like the this guy works on like crazy as business projects. Like he knows a lot a lot about the law. And he’s a lawyer, he’s an accountant, but the kind of projects he works on are like hundreds of millions of dollars kind of negotiating. It’s professional, I was negotiating, it’s a professional 100%. So I can tell you that I learned a lot from him. But the guy was actually really super nice. Actually. I learned a lot about his business to be honest, me and him were chat a lot. I would like ask him because like, you know that his contracts for his business? I mean, I didn’t know this. But I feel like everyone does are very similar to the way we write our contracts to like the same terminology gets used. I found that very interesting. Actually, like they have finder’s fee like he was the Finder and his business deal is really cool. Actually, I really enjoyed reading his contract. Right.

 

Erwin  

Right. Right. It’s actually a Dan Kennedy lesson that whoever writes the contract is in control. Right? So if the professionals if they’re in control, and they know more than you do that you’re an advantage disadvantage? Yeah. He probably knew this the whole time.

 

Diana  

Probably. Yeah. Or Yeah, or like that. He just knows some, like, he knows a lot of lawyers like, because the guy is also much older man. So he’s very well connected with things because even a little thing, for example, in the market, this is how well connected he is in the market. The house should have been appraised at at the height of the market, probably around 760, the lowest and around 800 The highest. That’s the numbers we were expecting. And ours came out at the lowest at 760. That’s what you got to pray. Oh, no, no, sorry. We got ours got praise at seven 790. Do you know what his got appraised because this connections 725. So imagine when we have to go in the middle? Great. It was but it went to 760, which was our number anyways. Okay, because it’s funny when we first sent him the offer, we sent him I think 762 or something like that was our offer. Because like that, to me, I’m about being very fair. I was like, this is the fair number. I think this is so kovanda funny that we ended off in that. But again, it was more not about being fair. He was stalling. That was his thing. So he was willing to spend the money to just wait until he got to it to like the hopes of being able to buy it back, which it just didn’t end up happening. Right.

 

Erwin  

So some rough numbers. Let’s see You cleared over 150 on this. No, no,

 

Diana  

no, like ADK 60 to 80k.

 

Erwin  

So on a deal that went completely sideways, you still

 

Diana  

can you imagine if we actually bought at the height of the market like that would have been like a homerun. Right, right. Yeah. Like like 50 or something. Who knows? If we got it and if we sold it when it was supposed to be in like February March, we probably would have been laughing

 

Erwin  

but this is the truth about real estate investing because of your sophistication. The fact that you had cash to be able to carry it your contracting background and how you did how you analyze the deal getting in he’s told me he has to make a pretty good amount of money. Like you know, like we were talking before like before the show before we recording, there’s all these other flippers are bankrupt. Yeah. Versus you made a pretty good amount of money. I know it’s not as much money as you wanted. No, but

 

Diana  

I mean like that, like we’re hitting a recession and we’ve made that kind of money, right. So that’s just the numbers.

 

Erwin  

Yeah, terrible.

 

Diana  

Yeah, and this is like I everything, you know, everything’s dying, you know, I don’t know, I like everyone’s liking

 

Erwin  

ourselves. Are you guys proud of yourself? Yeah, I

 

Diana  

think like that, like, to be honest, it definitely is. And even the private lends to that I do. Like, they’re all been going well. And I feel like, I feel like it’s really actually helped me solidify specifically actually, on the private lending side, I started making changes to things like that, like, for example, I only go on first right now, just because of how things are. And I feel like all those things that I did, really helped me to make my deal safe. And I made some other changes, too. But I feel like that was the because before the last few years, I was doing seconds, you know, I felt very comfortable at the market, I was okay with it. Whereas like, now, I’m like, No, first, and like, under like, 75, like one is that like, 60% loan to value, you know, like, now is just really being careful with the market to tell you how crazy things are. And for example, you know, I kind of lost actually, what do you call it, like, I lost faith in the appraisals. So there was this deal in that I was private lending to. And I look at this deal. And there aren’t enough deals around for meat and like, not enough property sold, that my expectation was I was going to really lean on the appraiser for the valuation of this property. And I remember talking to lenders, because they had bought for bought it for, let’s say, 300, or 325, something like that. And his, the appraiser appraises it for the exact same number. And when I was looking, I’m seeing things at like 250. And I’m seeing renovated properties as 325 and 350. Like, or like I would say, like, yeah, like renovated properties as a 350 and higher listing, maybe 360, or something. And this appraiser appraises at that.

 

Erwin  

And this property was like needing renovation,

 

Diana  

like a full gut cosmetically. So I was just, I was like in shock by that appraisal. And the funny part is that I kind of checked his listings, because I was like, What is going on? Like, how can you do that? First of all, there’s no pictures of any other houses or like, you know, when they when it’s like those MLS listings where they just see soon or coming soon or something like that. So they had no pictures, which is strange, because

 

Erwin  

like, sold, you know, these were sold properties, but no pictures,

 

Diana  

but they had no pictures. Like, yeah, like, I feel like those happen, you know, when it’s construction type ones where they’re in the middle of a construction. So they don’t show you the pictures, but they kind of put the listing up or just to see if anyone’s interested or didn’t even know but you don’t like it busy. You have that? Yeah, but then you have the picture of the house. I’m in the front yard. But don’t you see those ones? Usually I feel like people do that are the ones that are like in mid renovations, or like they’re just trying to see like drum up business, I guess? I don’t know, you know, that’s better than me. A

 

Erwin  

picture of the house outside? Yeah. At a minimum an artist rendition, right. At a minimum? None is weird.

 

Diana  

Well, that was an eye thing I was gonna say maybe is just the way like realtor.ca. Or actually, I was looking at how a sigma, maybe how how sigma displayed those specific properties, because that’s gonna say, so I look at them. And I’m just like, I’m not seeing pictures is really weird.

 

Erwin  

So that’s a good point that you double checked, the appraiser went back and you’re checking the appraiser.

 

Diana  

Yeah. Because like that, because I usually do my analysis. And then the appraiser to me normally is just a clarification on the numbers that like, close like resemblance like, okay, my thoughts are right, or vice. Yeah, but when I realize Yeah, you that’s what I mean. That’s I kind of lost faith in them. Because I had two situations like that. That was this one was just the worst one, but like that, like we were so far off that I just got really confused on why so I made me look into his because I was like, what are you seeing that I’m not seeing? And then by chance, I don’t know how I see a property. I happen to see the a YouTube video of it, like a listing of showing the property. And I was like, Oh, that’s weird. Why isn’t it on the listing? So then I was thinking because I know like Hamilton has their thing where like, they kind of segregate themselves,

 

Erwin  

like Hamilton has a share with Toronto.

 

Diana  

Yeah, yeah. Or even on realtor.ca Because I’ve checked everywhere like I was like trying to check out this listing, like trying to find this listing wherever I could. So I was thinking like that because it was strange that I found a YouTube of it showing the property the house and the property or house cat. It wasn’t dynamic or anything, but it was livable. It was an okay conditions just dated and then not even date it just not really. I don’t know, nicely done, I

 

Erwin  

guess. Okay, so, like a 10 or 20 year old renovation.

 

Diana  

Yeah, maybe something like that. We’re like you know, like it A time when people love to put so much colors on the wall. I did that to me. Like it was kind of like that, like a little like you can tell a family’s living there, you know, like, massive blue bedroom because it’s like a boy must live there like pink bedroom because, you know, like, that kind of thing going on. Whereas like, I feel like when you go to sell, you just paint the whole house gray. Right? So just not ready. So it was like that, like it was like lived in but it was livable, and it wasn’t bad. Like, maybe super, very minor cosmetic. And they were comparing that to my rundown, their rundown falling apart house and saying that they were about the same price. Right. So then I go and tell the guy and the thing is, so this guy, a friend of mine, like lending to him. And he had all the money to fund for it. And obviously I asked for proof of it and everything. And he just wanted to work with me. And he’s just like, I want to work with you on a lend for you. So he’s like, even if you don’t lend at the amount, I’m happy to do whatever managers want to work with you. So I ended up lending to him to the number that I felt was and doing 80% of that. So he for him, I think it came out to around like 55% loan to value from the appraiser he got there was something like that. But it was because I didn’t feel comfortable. And I but I felt comfortable because I saw that he had enough money to do the project himself and get it done. But I just wanted to like that make sure my money was super safe. And I just had to do my numbers. And I couldn’t even take that appraisal as as like for anything. Like I was just like, I don’t know where you got that from closely. As like one they were very far away from the house already. But again, I understood that because there weren’t enough of them close by. But still, I was just like, why didn’t you use this one? You know, like, this one’s

 

Erwin  

pretty that 325 That was in Windsor. So that was the Windsor one. Right? Windsor is cheap. Yeah. Okay, then everything worked out. You got your money back.

 

Diana  

That one’s still on the go, actually. So that one is not a flip. That one’s a burr. So they’re planning to refinance it.

 

Erwin  

So it’s pretty recent. So they picked it up for a pretty good discount already.

 

Diana  

Yeah, like it was. I don’t actually remember sometime this year. I personally didn’t think it was a good deal. I even told them, are you sure you want to do it? And but he was like, I’m ready for him on it. I’m confident and numbers. He’s like, I’ve done this one before. So I’m like, Okay, I’m just letting you know. But again, like I was like, I’ll definitely help you out. And I definitely like that, like, that’s one of the things I like about private lending is also just knowing what everyone’s up to, you know, like, I like having that relationship with them. Like, how’s things going? Or I usually ask, like, hey, when you’re done you can we talk about it, how WANs and whatever, whatever, you know, I even had one guy, for example, he was having problems selling the property. And I was helping him out trying to, you know, give him solutions to help sell it out. And he was able to sell it this other person. So I kinda like a little bit of the end, which is a little nicer when you’re don’t know someone at all. I feel like it’s nice to lend to someone that you kind of do know, and can actually have that back and forth conversation.

 

Erwin  

So everyone you’ve learned to they’re still taking your calls. I ask because I hear lots people aren’t returning calls. Oh,

 

Diana  

really? Oh, no, I actually, although, you know, it’s really funny. Yeah, they actually everyone did. And but again, the way maybe it was the way I came about it. Because when I saw this whole thing in September happening with just like, everything kind of going crazy, because I was just hearing so many weird things like people weren’t getting there. People weren’t getting refinances, or not the high, like not even 85 80% loan to value or 75% loan to value. I went into like panic mode, and not panic mode, but I wanted to like let all my borrowers know what was going on. So I sent everyone a message actually, I’m like, Hey, this is not panicking. I just want you guys to start looking into your refinance options. Yeah, cuz all of them are burst. Yes. Because like that right now, for example, I would never lend to a flip right now. Unless if it’s like a super stellar crazy, amazing deal. But so all of mine are barrage right now. So I told them, I’m like, go talk to your brokers figure it out, make sure you’re still okay. And if not, like start making your plans now so that you’re ready and prepared for whatever your options are. Right? So I kind of like mass messaged all the people that I told them that because because obviously if I’m hearing information, I’m going to share it especially cuz I’m like, like what I said, right? Like, if you guys fail, I’m failing. And I’m like, we’re not going to fail. You know, this is not an option. Right? So I let everyone know and yeah, everyone respond back. Some of them were Thank you, you know, thank you for that. Other ones like, oh, like he was a broker. So he’s like, Oh, he’s like, you know, I haven’t seen anything on my side. It should be fine. So yeah, everyone responded back so

 

Erwin  

let me excuse me still happening are here. Some appraisals are coming in late, but then usually just go to the switch to the lender and then the appraisal will come in. Yeah, I’m hearing. I’m hearing appraisals are light that’s the really the only real issue for people who can qualify for stuff. But the bigger thing is bankruptcies. And again, anecdotally, I have clients, I have nothing to do with these private lands because I don’t private land. So I’m biased. Obviously. I have clients telling me like, people aren’t calling the back. If you believe like money, too.

 

Diana  

Luckily, I don’t have that. But again, I like chatbot check up on my people. Like I like I run the numbers with them, too. You got to, I need to make sure they can afford

 

Erwin  

a little due diligence. Yeah, and we’re gonna get into that. Very, very important. So you’ve invested heavily in your education. Yeah. You mentioned a certain rich company. When you What’s that? What year? Were you with them?

 

Diana  

I don’t even know. Definitely before. COVID. Like we said, per day, your time all right. Yeah.

 

Erwin  

Yeah. So like, 2018 or something? Like,

 

Diana  

yeah, maybe around there. Yeah. 1718. Somewhere around there. Yeah.

 

Erwin  

So you’ve been you’ve you’ve taken some of their courses. Nothing crazy. No, no,

 

Diana  

I didn’t do any like mentorship, because I was just more like, we were kind of going into the next phase where we need to start figuring out how, like, that’s actually what Rich Dad Poor Dad did. For me. I never understood how people were getting big off things. And are not in Yeah, or especially when you’re told for example, like don’t work with others, you know, people are gonna scam you. And like, I would always be told a lot of these things like people are going to scam you and stuff. So I was just like, bad advice. But I mean, yeah, like, there’s not bad advice, but at the same time, it’s not. It’s not advice to like, yeah, like, you just have to be careful with the way you go. If you’re gonna do partnerships, definitely, you’ve got to do like, in itself, that thing has due diligence. And that takes forever to find people that you can. But so my mind of how

 

Erwin  

Steve Wozniak and Steve Jobs partnering? Yeah, we never would have apple. Yeah, right. So it is possible. It’s a lot easier, in my opinion is a lot easier. Because real estate such a, there’s so well insulated by the market. But still people managed to screw it up. Continue, you’re learning about, you’re saying that you were learning how to scale. That was one of the was it that was my

 

Diana  

thing like that we were doing burrs and flips very slowly, though. Like, I think even a year, we didn’t do them, I think we got traumatized by one, it was like, so stressful that we were, let’s take a break. And then we realized, for example, like the community is important, it’s good to have we didn’t have any of that. What else was, what was the other thing? And it’s just I didn’t, I always thought you had to do things alone. And and like that, like your money kind of depletes after a while. Right? So that was that was one of my issues. Like I’m like, How am I supposed to grow, which is me and my husband, I just didn’t understand it. And then reading Rich Dad, Poor Dad, and going to the courses really, like was one of the kickstarts to figuring out, this can actually be done. And it’s okay to you know, do partnerships or like to group things together, have a community, all that stuff, you know, specifically not working with people was the big or, for example, I didn’t even know there are communities out there that could help you. Because I think that’s one of the biggest things, you know, you have a downer, having like something stressful happen, you can go talk to people that understand you, right, because being an entrepreneur is like completely different to a person who has a job, like they don’t understand the kind of stresses and things that you go through. So those kinds of things that really kind of kick started, because it was like, Oh my God, there’s people that can understand me, you know, the people that can help and that are, they’re willing to help and share because I think that was also a mentality that I got somehow that, like, people don’t like to share knowledge. And, and so, you know, like, you’re trying to figure all this out on your own, and it’s so hard to do a whereas like, if you have a community, you know, you can help support each other in so many different ways. Yeah, bounce ideas and just problem solve together and things like that

 

Erwin  

the quality of community was important. Yeah, I mean, some of the lessons of the last like six 810 months is quality matters.

 

Diana  

Well, and even coffee and all different areas and all different areas,

 

Erwin  

like contractors, for example, quality will matter. Yeah.

 

Diana  

Yeah. Like it’s really funny. People tell me because our projects always go well. And they’re really funny because people are like, how does it happen? And I’m just like, my husband and yeah, you have more control because like a contractor can just disappear on you if they want to my husband cannot disappear from me. I know where he lives

 

Erwin  

and beyond Rich Dad, you were part of a certain tribe.

 

Diana  

Yeah, it was part of cash flow tribe. I was also I’ve been part of so many. I mean capital Tribe i like paid for because I’ve been part of other ones. I guess the free ones. I think you also get to a point where, like, once you’re building that community, and you’re the people, I feel that you get to certain levels that, for example, there’s like that all these different groups. They’re very entry level and have an entry level. Yeah, yeah. But it’s Yeah. But I mean, as an even information, I feel like it just gets very entry level. And then it’s really about getting to know the right people and getting into the right communities. But to learn things, like let’s say, right now, I’m in Marstons. Group, but that’s because like that, like I’m interested in capital raising, and he has done, you know, he’s raised $250 million, like, the guy is, like, very experienced in the area. And, and I have, you know, like, I’ve not done that much, right. So then I went into his which, and that type of thing, to me, capital raising is a much more advanced type of this, like something an advanced, I don’t know, real estate strategy, I guess you’d say. Whereas like, I was like, Yeah, I know how to do a flip. Yeah, I know how to do a burn like I get it. You know, is this

 

Erwin  

more of an offline, we’ve had some past guests who’ve done very well, I can share with you how they do it. I know exactly how to do it. I’m friends with a lot of them. Because that’s helpful. Yeah. I always love to learn $30,000. Thank you. So sweet of you. Like some quick tips, for example, like, for example, my friends who raised lots of money, allow the system so people that you and I both know, who have lots of joint venture money, they usually have one whale investor. Oh, yeah. Right. That’s usually like 80% of their funding.

 

Diana  

Do you have any whales out there?

 

Erwin  

Actually, no, some of them listen to this. I’ve actually no, I know, I’ve had some guests that track whales on the show. That’s not the point. Just joking. By just by them. They have like their personal interests. Were rich people do the same things. For example, like boat clubs. All the rich people belong to them. Yeah. And if you’re interested already is in boating. Just talk to people at your boat club. Like literally, I know, people who have raised millions and millions of dollars at the boat club through one individual. Right

 

Diana  

here. You actually we started getting into golfing for that exact purpose. And you I know you’re in it too. And I’m like, I know the golf. We’re just like, we’re not. Where do you go? We just go like right now we’re learning. Okay, so we’re just going to the T zone. Okay. Oh, we’re actually going to play yeah, we first need to learn how to play properly, right? We don’t want to embarrass this especially going to talk to people and need to like actually know how to play first.

 

Erwin  

Hopefully no one hits on this. But for women, that’s less important. And it seems that’s just from the stories I hear from my field friends who are actually no log log clubs have extensive beginner lessons specifically for women. So they’re all on the same level. And lots of them are just loaded. So don’t be don’t be afraid of joining one of those. Because again, like a lot of them have the wives of the loaded. They’re loaded to Yeah, right. And in my experience, there’s plenty of women who are responsible for the household investments. Mm hmm. Right.

 

Diana  

Yeah. Like, isn’t that very common? I feel like yeah, so because usually the man’s like out working and stuff, and then they leave like, okay, especially if we’re gonna be the housewife might as well like, make sure all finances are taken care of,

 

Erwin  

I suppose. Yeah.

 

Diana  

I’ve seen both. Oh, yeah. No, for sure. Both. But I feel like it is very common for women to or the wives to kind of take care of now, I’ve just seen it on my side, the families that

 

Erwin  

in my experience, my clients, even if the wife, that’s the one that’s steering the ship on the investments, they all have jobs to now that I have maybe a few of them are stay at home. But very often, they have full time careers, six figure careers. And there’s other driving the household investment driven work. So for yourself, I wouldn’t be afraid to join any of these women’s clubs, especially at the beginner classes. I know it costs money, but I don’t think that’s an issue for you. But I want to get to like you’ve met people who are now bankrupt, as well as being a part of these groups.

 

Diana  

I meet a lot of different people, which very helps to learn from everyone’s mistakes or whatever they do even their successes,

 

Erwin  

but you saw the red flags before they got into trouble. What are some of these red flags? We’re not gonna name names.

 

Diana  

But I saw very, very big red flags was disorganisation was one you know I remember asking for information on a deal whenever you want me to lend you money. I need details what’s and and I wouldn’t even get the basic like I have my first level I don’t even go full on like I have my first level I just need to see if it’s even worth it to me to go further. Like I have like phased approach I’ve like to generally but sometimes even a third like I have two to three phases before I like to go through your lending, I mean, sorry, I’m lending you money, right? And so I couldn’t even get through phase one, you know, so that one was already a very big red flag. You raised

 

Erwin  

a red flag with them. You were going to due diligence. Due Diligence you’re gonna do, we can’t work together. This is not a good fit.

 

Diana  

Yeah, this appeared. And and that was one and that happened twice. Yeah, same person. So then, so when the second time it happened, it was kind of like that came into my head, okay, this guy doesn’t have like, he’s just looking for easy money. And now it’s like, I don’t give easy money.

 

Erwin  

Wow. And we were speaking before we were recording this individual investors now bankrupt most professionally and personally.

 

Diana  

I don’t I don’t actually fully know the details. But yeah, at least professionally, personally. Yeah. Okay.

 

Erwin  

It’s very sad situation.

 

Diana  

Yeah, it’s crazy. But it’s like that when you’re very. And one of the actually, this was one of the big issues that I found was that when you’re finding a team, don’t find people that are the same as you. Because I saw that I was saying that this is going to be a big disaster was because who’s helping run the numbers in the business? You know? And I was so worried about that. Because I saw I saw that I saw. Well, that I mean, that was small indicates, but I saw like the deals, I had deals come to me to that they actually did make it to me. And they, again, we didn’t even get past phase one. Like it just didn’t work at all. I was looking at these numbers. I was like, you want to be in debt? 300 A month or 1000 a month? Because I don’t want any of that. No, like it was just create these deals that I was just, but then it was

 

Erwin  

like the deals that were cashflow bad now and worse later,

 

Diana  

yeah. Oh, that’s

 

Erwin  

a that’s a great offer.

 

Diana  

But it’s because they didn’t have someone behind them to actually, you know, check the deals for them make sure that they were good deals,

 

Erwin  

right. That sounds like a terrible business. Yeah. And

 

Diana  

that’s why it’s so important to have the right team, it’s like, you have to have people that are opposite to you to make sure that this is your weakness, but it’s their strength. Right, right. You have to have that kind of thing. Because if you don’t, that this is exactly what happens. I feel like in general, I mean, I feel like in general, if something is going wrong, like you’re missing someone in the team to to make it happen. I mean, yes, there are, let’s say probably situations where you go bankrupt, and maybe I don’t know, I don’t I don’t know enough. I’ve never seen like, I think they’re the second people I’ve ever heard that are bankrupt. So I don’t know really how that works. But I just feel like maybe there are some people that go bankrupt, and it’s just happen, like just everything aligned badly. I don’t know. I don’t know if this is that a thing? Because that happened or is usually it is just like,

 

Erwin  

This is real estate. Bull Run for 12 years. Right? You have to do something really wrong. Right? And when we’re talking about partnerships here, like back to Apple, it’s not bad example. Steve Jobs and Steve Wozniak, they’re completely different skill sets, right? And then when Wozniak bowed out, then you have Tim Cook. Tim Cook is very, very different. He’s an operations person. Yeah. Great. He’s about the execution versus jobs about you know, product development. Very, very different talents. Yeah. All right. Well, class, obviously. But I can’t believe like this partnership that we’re talking about. They were very similar people.

 

Diana  

Yeah. But everyone seen another one, they go through a foreclosure and they were actually very different. Super super. What is it called, like, extroverted, you know, meeting everyone. And then the introvert, like, probably doing the numbers operation. I mean, I know they did operations, but like, so I’m assuming that they would run the numbers. And then same thing going through, they’re going through a process to and it’s just very interesting, that I mean, they’re opposites. But someone dug the hole for someone or they were trying to grow too quickly. Like, it’s, you know, there’s so many different factors. So, yeah, I think that’s another thing. For example, for me, I’ve never been a person that wants to grow super quickly, because that’s another issue that can come up. You know, when you’re growing so quick, like, really quickly. You just don’t know what kind of things you’re missing. Things can get left behind, just because your goal is way over there. And you’re in the future. But you forgot about what’s happening right now. You know, so there’s just Yeah, it’s so interesting to see different ways of also how failures happen because it’s also to be honest, for me nice to learn from their mistakes and just be like, Okay, I should not do this. Some of them. I mean, some of them already knew I was like, probably shouldn’t be doing that.

 

Erwin  

But you don’t know. That’s why I never say anything. I’m sure lots of people thought jobs would fail. Lots people thought Elon would fail. And Elon will say like, Tesla almost went bankrupt three times. Oh my god. Yes. SX, if I think it was Falcon nine, I think it was a third or fourth attempt, I

 

Diana  

think sleeping in his factory or office just trying to get things to work.

 

Erwin  

The Falcon nine, I think it was talking nine if the third or the fourth attempt didn’t have didn’t happen, they were going bankrupt. Yeah. Right if it didn’t work, and that’s probably when

 

Diana  

he was sleeping enough, enough is trying to make sure happens.

 

Erwin  

But my point is that there’s risks. And also also these companies that have been have gone bankrupt. Like for example, I’ve always done buy and hold, like I buy, renovate and hold I flip. But I do a conservatively because my experience with construction and contractors is it’s not that easy. So I do one at a time. Right. So even if one goes out of the disaster, it’s not the end of the world.

 

Diana  

That’s what we do. We also do one at a time, too. But like

 

Erwin  

the gentleman we’re talking about, they had just the bankruptcy statement. There’s like nine on the go. Yeah, that’s five hour radius. And one of them’s One of them’s in the Caribbean.

 

Diana  

Yeah, that’s exhausting. One of the reasons why I like private lending, you know, how some of my past is done working, so that I can like work put my energy into like the what the one maybe like that we may try to expand to go I mean, now it’s things are changing. But I do plan to expand but like that, like, you can’t go from like nothing to like a million so quickly, because it’s just, to me, that’s inevitable. Like, you see it happening, you grow so quickly. And you’re not any fear, especially maybe not, I don’t know, I don’t know what the situation but like, I’m just saying in general, like, if you don’t hire enough people, you don’t know how, especially the people that maybe making sure you have a good trusting to grow that big. Like you just that’s going to fail. Yeah, if you’re gonna grow quickly, like you have to have like a quite a few trusted people to just manage all that, because that’s just a lot of work.

 

Erwin  

Right? Difficult out there. But congratulations on your success. You’ve done really well. You should be proud of yourself.

 

Diana  

Thank you. Saying hi from you. You have so much experience I don’t

 

Erwin  

I don’t have the most experience has talked to a lot of people. So I know and again, I know a lot of people are hurting. And sure you are if you if you face some difficult challenges when you came out with it quite profitable. Right. So congratulations on your success. Thank you so much for coming on the show. Working people in your social medias exploded. Is that where you spend most of your time in terms of like sharing? Content Creation? Specifically Instagram?

 

Diana  

Yeah. Instagram, Facebook also just started LinkedIn.

 

Erwin  

Frequency tick tock. No. And then where can people find you?

 

Diana  

Like on Instagram investor girl, Diane? Actually, LinkedIn is the same. I left the investor girl Diana. Facebook is a little more complicated. It’s like my full name. Spell your full name. If you want to share, the group might be easier to find, because it’s labeled as read. But it’s the real estate investing district is what the group is called. Real Estate Investing district. Yeah, and it’s probably actually easiest. If anything, I’ve now my dad lives raza.ca Which that links to all my social medias. And we have a challenge if anyone’s interested. It was challenge yeah, it’s to help people set their goals. So if you’re looking to set your goal if you don’t, if you are not motivated or energized by your goals probably have the wrong goal. And so we’re doing a five day challenge to help you identify your goals and try to see if we can motivate you guys to find your goals. Okay, cool. Because you don’t realize actually that some of us have the wrong goal and we wonder why we’re not able to accomplish it.

 

Erwin  

Yeah, that was just our chairs presentation on Saturday was related to goals. All these feel things like buying more properties is the answer when at the end of the day, really, you need income and cash to retire. Properties are not income and cash

 

Diana  

so I always found it especially when I started going everyone was like always about the number of doors Yeah, and yeah, I didn’t never got that. So I’m like I technically don’t have very many doors because all my money is going into private lending or like that we’re

 

Erwin  

doing it all wrong. Obviously all that money in the bank wrong

 

Erwin  

and I just because honestly some of those people with lots of doors who don’t cash flow there, and if they didn’t run their numbers with

 

Diana  

you, you’re gonna see all this craziness happened to people that are going to really struggle with like all these doors and because we’re gonna go through a phase of a lot of people also probably having to go through evictions right now a lot of people Mr. I mean, I know employment is still high, but I don’t know I have forecasted that employment is going to get worse. I think employment will get worse if that happens. We’re gonna go through a whole bunch of evictions and if you go Got a lot of doors and you can even withstand a couple vacant properties or people just not paying. That’s going to be a crazy thing that I think we’re going to be seeing next year is that we’re going to see a bit of chaos happening. I think, firstly, curious on your opinion,

 

Erwin  

greed was so bad, right? So for example, we have this one client, we a recent client, who has new construction condo just closed a few months ago, even though he’s rented. We split today’s interest rates after heart costs. He’s negative $800.

 

Diana  

Oh my god. Yeah.

 

Erwin  

Right. What about these people have multiple?

 

Diana  

Yeah. closings and new construction condos on variables?

 

Erwin  

Yeah. Well, yeah. So is this gentleman? Yeah, negative 800. Right. And we’re in for probably two more raises. Yeah. Imagine if he had like, three or five of those, if you had five to be negative 4000 a month. But what if your vacancy

 

Diana  

is crazy? It’s really crazy. But I think I don’t understand that let’s say people did was like that. Like, for example, we actually went fixed on our all ours because it was just like, the rates were so amazing. I was like, What is saving a couple extra pennies and going variable? And I also felt like that like yeah, I was just like, why did people worry about the variable I don’t know. Like, at least my my holds are, are on fixed. And I mean, we actually went through a refinance. So that was kind of a nice hits. I was like, oh, in a negative way. Obviously not nice and was a bad hit. Not bad. We’re still cash flowing, but just kind of sucks to see some of your profit go away. You’re like, Okay, goodbye, little dollars.

 

Erwin  

You need to change your handles. This should be sophisticated investor day, and just an idea, just royalties. History. Thank you so much for doing this. So great talking to you. I’m glad we get to spend some time. I don’t know how else to say it. But I think people should like bounce questions off of you. If they’re looking at joining clubs, because you’ve been you’ve seen some crazy stuff. Of all the people I’ve talked to you’ve seen some of the craziest stuff in terms of people who were didn’t get the greatest guidance in their bankruptcy court.

 

Diana  

Alright, so yeah, thanks so much for having me on the show. This was a lot of fun was fun chatting about this, all this stuff. And yeah, thanks so much. Thank you.

 

Erwin  

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

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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…

If you’re interested in being a successful real estate investor like those who have been featured on this podcast and our hundreds of successful clients please let us know.

It is our honour to give back and educate others on how we build cash flowing real estate portfolios using all the best practices shared on this podcast, from the lessons of our hundreds of clients and of course our own experience in owning investment real estate.

If you didn’t know already, we pride ourselves on being the best of the best real estate coaches, having the best property managers, contractors, handy people, cleaners, lawyers, accountants, everyone you need on your power team and we’re happy to share them with our clients to ensure your success. 

New investor or seasoned veteran investor, we can help anyone by providing our award winning coaching services and this isn’t all talk.

We have been awarded Realtor of the Year to Investors in 2015 by the Real Estate Investment Network, 2016 by the Canadian Real Estate Wealth Magazine and again in 2017 because no one told the judges no one is supposed to win the award twice but on merit, our peers deemed us as the best.  In 2018, we again won the same award by the Real Estate Investment Network.

Hopefully being the most decorated team of Realtors in Ontario will make you consider us for your first or next real estate investment.  Even if you don’t invest in our areas, there’s a good chance I know who would be ideal for you. 

I’ve been around for a while, some Realtors are talented at servicing investors there are many with great ethics.  The intersection of the two, talent and ethics is limited to a handful in each city or town.

Only work with the best is what my father always taught me.  If you’re interested, drop us an email at iwin@infinitywealth.ca.

I hope to meet you at one of our meetups soon.

Again that’s iwin@infinitywealth.ca

Sponsored by:

Infinity Wealth Investment Network – would you like to know how our investors returned 341.8% on positive cash flowing real estate over the last five years? On average, that was 68.4% per year.

Just imagine what winning in real estate could do for you.

If you would like to know how we did it, ask us how by calling 289-288-5019 or email us at iwin@infinitywealth.ca.

Don’t delay, the top markets we focus in are trending upward in price, so you can pay today’s price or tomorrow’s price.

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

Erwin

Hamilton, St. Catharines and Toronto Land Development, Real Estate Investor, and soon to be builder.

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Getting Creative With Investing In Alberta With Russell Westcott

As the Warren Buffet quote goes,

“A rising tide floats all boats… only when the tide goes out do you discover who’s been swimming naked.”

The real estate market in Ontario has been fantastic and has steadily gone up a lot since the recovery from the 1989 crash. 

I know lots of people who’ve built intergenerational wealth. 

Many of you and your neighbours did as well simply by buying a house five or more years ago.  Those who bought several houses five or more years ago benefited multiple times. 

This week, I hosted a mastermind dinner with many of our student rental investors, as the timing is ideal. We enter student rental marketing season as University students begin looking for a place to rent in December and January for a May 1st move-in.

After a crappy pandemic where some students bailed on their leases and went home, market rents went down for the first time in forever. 

The pendulum has now swung hard in the other direction in favour of the investor as there is reduced supply of student rental houses. Demand is up slightly; hence rents are through the roof. 

A client of mine just texted me she signed new tenants at rents 30% higher than the previous tenants. As a result, she now cash flows over $3,000 per month on just one house.

Over dinner, we masterminded how to communicate with tenants if they’re staying or going, what rents we’ll test starting next week and shared old war stories. 

My old friend Ron Esteban even started a discord group for everyone in attendance and named it “Erwin’s Student Rental Army” for us to stay in touch, which I find hilarious.

Ron also spoiled my fun, being the youngest in the mastermind. 

I was the 2nd youngest in the room, and when I looked around, I was so proud of our clients. They’re all doing great; some have retired, some can retire, some are working on contract at expensive rates, and several have helped adult children buy their first home. 

They all have significant financial peace. 

Everyone has great investment properties they’re happy to own, some for a decade already and not one of them is a full-time real estate investor.

That’s what real estate investing done right looks like.

Done wrong however… an update on Alex Solga of the now bankrupt Clydesdale Capital Group Inc, previously owned in partnership with Fayaz Gulamani, aka Mark Smith, that owes just over $8 million to creditors. 

Details are in the preliminary report below.

Preliminary Report: https://mnpdebt.ca/-/media/files/mnpdebt/corporate/corporate-engagements/bankruptcy/clydesdale-capital-group-inc-bankruptcy/preliminary-report-of-trustee.pdf

From the advice of Alex’s lawyers, he can’t come on this podcast which I totally understand. 

I did share with Alex that I’ve seen this before I shared what I think happened.

I’ve been attending investor meetings and networking events since 2008. I personally know folks and interviewed them on this podcast, investors with 50-100+ properties, mostly in Alberta, sharing on stages how they did it.

Those in attendance, myself included, couldn’t wrap our heads around how they did it. 

We thought they were gods of investing, and we were crap with our tiny portfolios in Hamilton and whatnot…

Until the market turned, their portfolios were underwater while everyone in Ontario and BC did just fine. More than fine.

What saved them was their properties were at least rented out, so money was coming in to cover the expenses. 

This was largely in Alberta, and I knew one gentleman in Hamilton who lost everything; 50+ JV properties were all sold off by the banks at a discount. He lost his home, wife, family, and reputation.  

This was also back in 2008 during the oil crash and financial crisis.

Fast forward to the present, a new wave of real estate education groups, local groups too and not ones from BC and Alberta or the USA, new influencers, networks and coaches with limited experience emerge, and the cycle restarts. 

Many who fail to learn from history are doomed to repeat it. 

Red flags were ignored, greed was unchecked, private lending became popular mostly among regular, everyday folks, and double-digit interest rates in exchange for passive investing on high-risk projects.  

We saw this before with the bankrupt Paramount and Fortress.

Still, brokers broker and lenders lend. 

Investors raise OPM because their vision and mindset of abundance overshadows the fact that managing trades, renovations, and construction is not easy in my experience, made harder in an environment where labour is in shortage, wages are skyrocketing and material shortages are ongoing.

Long-term, boring cash flow investing wasn’t profitable fast enough to quit day jobs and retire, so some scaled up too fast, doing fast flips and BRRRRs without the operational know-how.  

Resources were spread too thin.  Properties are vacant, so no money is coming in to cover the mortgages.

In reviewing Clydesdale’s holdings, their properties were located hours apart. Two are in towns in Ontario I’ve never heard of; Hamilton to the West, as far as North Bay to the North, and Peterborough in the East, plus a property in Belize.

Alex and Fayaz, aka “Mark Smith,” live in London, Ontario. 

For me personally, too much risk. 

I’ve never seen anyone pull off that much scale covering that much geography. I prefer boring stuff I can control with a one-hour drive from home. 

I do BRRRR and have been doing so since 2005; most of our 500 clients have since 2010. We just do one at a time with only the best of the best team on my project using A and, on occasion, B lenders.

If you, too, would like boring investing that cash flows, we operate East and West of the GTA because that’s where investors can actually find cash flowing, boring, best ROI I can find with every best practice I can find. 

Then let us know. Reach out to iwin@infinitywealth.ca, and one of my coaches will be happy to get on a call with you.

We are always recruiting those who want to be self-made, millionaire real estate investors in boring, repeatable, systematic ways that cash flow.

Getting Creative With Investing In Alberta With Russell Westcott

On to this week’s show!!

We have an old friend of the show, Russell Westcott, who was in town all the way from Vancouver to Toronto for the Wealth Hacker Conference.

Russell has owned 100+ properties and has the battle scars and lessons on how to invest better in Edmonton, Alberta.  

Russell is a smart guy and is here to share how his coaching clients are navigating this high-interest rate environment with creative, above-board financing and a couple of different investment strategies for the highest and best use to create more housing units and, of course, generate higher rents on properties that other investors simply don’t see.

As always, it’s a treat to have the JV Jedi on the show, someone who’s always thinking outside the box on how to maximize returns for his coaching clients and on their properties.

I give you best-selling co-author Russell Westcott!

 

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 FREE Online Training Class.  We will be back in person once legally allowed to do so, but for now, we are 100% virtual.

No need for you to reinvent the wheel; we have our system down pat. Again that’s  www.infinitywealth.ca/events and register for the FREE Online Training Class.

 

This episode is also brought to you by www.stockhackeracademy.ca, where everyday real estate investors learn the best practices in stock investing to earn cash flow in about 15-30 mins per day from their mobile phones. After real estate, Stock Hacking is the next best hustle, as you’ve heard from many past guests on this show. Among our students last year, 31 trades were shared with them. 30 were profitable for an over 96% success rate and 12% return on capital. I will be giving free demonstrations online, very similar to the one I gave my kid cousin, a full-time musician who just made a 50% return in 2021.  Past, of course, does not predict the future, but if you’d like a free demonstration, go to www.stockhackeracademy.ca in the top right and click FREE Demo.  At the demonstration, I’ll have special bonuses. We do not advertise publicly for all my favourite listeners, and I only have two more demos to give in the next few weeks.

Don’t delay www.stockhackeracademy.ca, what I consider the future of side hustles with real estate so unaffordable for many.

To Listen:

Audio Transcript

**Transcripts are auto-generated.

 

Erwin  

Oh and welcome to another episode The truth about real estate investing show. So I can’t believe it. This is the number 81 podcasts in the business category and all of iTunes. I think something broken Apple, probably Elon must spell anyways, as the Warren Buffett quote goes, a rising tide lifts all boats. Only when the tide goes out, do you discover who’s been swimming naked? Well, the rising tide, the real estate market and Ontario has been awesome. And still it caught up since the recovery of the 1989 crash. I know lots of people who’ve built intergenerational wealth between now and then. And if you and your neighbors did very well, simply by buying your house five or more years ago, even if you bought in 2019 You’re likely still positive. So once you did something, right, please hopefully did something right. For those who bought several houses five or more years ago, they benefit multiple times. This past week, I hosted a mastermind dinner with many of our student rental investors clients as the timing is ideal. As we enter the rental marketing season, as university students begin to look for a place in December in January for a march 1 Move in. Honestly, the truth about real estate investing is we had a crappy pandemic for student rental investors, where students failed on their leases and some of them went home. Some of the universities closed for in person hence there’s less need for students to be local market rates went down for the first time I’ve ever known. And in my experience, now, the pendulum has swung hard the other way in the other direction in favor of the investor, the student rental landlord, as there is reduced supply of student rental homes. Demand is up slightly based on statistics and rents are through the roof. A client of mine just texted me about an hour ago, she just signed a group of tenants at rents 30% higher than her previous tenants. She now cash flows over $3,000 per month on just one house. If you’ve a better investment than that, please let me know. Again $3,000 per month, over $3,000 per month on just one house. If you do better than that, please let me know how how you do so in a repeatable low risk form over dinner we masterminded how to communicate with tenants if they’re staying or going, what rents will be testing next week.

 

Erwin  

We have an idea now what’s what’s working through shared old board short stories of course, my old friend Ron Esteban even started a discord group for everyone in attendance and named it Irwin’s student rental army. And I like acronyms. So that’s Ezra are short for all of us to stay in touch. And I’m on hold, and I find it hilarious. Thank you, Ron. Appreciate the joke, everyone. Ron also spoiled my fun of being the being the youngest than the mastermind and attendance. So I was the second youngest in the room. And when I looked around, I felt like a proud parent. Looking at my clients at a roomful of my clients, they’re all doing great. Some have retired, some can retire. Some are working on very expensive contract contract rates at their choice, because cash flow is great. They can’t help but help themselves to the money. Several have already helped out their adult children by their first property. Almost all of them have more than one kid. So they’ve helped multiple adult children by their first property. They all have significant financial peace in their lives. Everyone has great investment properties that they’re happy to own some of them for a decade already. And not one of them is a full time real estate investor. Again, it’s my position that real estate investing for most people, most of the time is best as a side hustle. And that’s, you know, from my experience, this is how real estate investing is done right? done wrong. However, it can be done wrong. I will never fit about that there are wrong ways many ways to lose money in real estate. For example, an update on Alex Soulja, who was booked to come on the show. Alex is the one of the owners of the now bankrupt Clydesdale Capital Group previously owned in partnership with buyers who will Imani aka Mark Smith, that they owe currently, just over $8 million to creditors details I’ve included a link to the preliminary report as filed by MMP who are the trustees of the bankruptcy. So I don’t want to get into details if you want to get the details go there. I don’t want to get sued either. So from the advice of Alex’s lawyers, he can’t come on this podcast, which I completely understand. I did, however, share with Alex that I’ve seen this all before. And this will all happen again. I shared with him what I thought happened. So I’ve been attending investor meetings and networking events since 2008. I personally know folks and interviewed them on this podcast investors with 50 100 properties 100 Plus doors, whatever. Massive, massive portfolios built over a very short period of time. Most of these were in Alberta at the time. I’m talking about like, you know, to the back into, like 2008 ish in the lead up to that that time. I saw them sharing on stages, how they did it, having raised capital, how they find deals, how they find what they call deals, how they found real estate properties. Those in attendance, including myself, couldn’t wrap our heads around how they did it. We thought they were gods of investing. And we were just, you know, just messing around, we were not significant with our tiny portfolios. I don’t being in Hamilton, my clients as well, whoever anyone else that was in the room. So the market turned, and their portfolios were underwater, especially though all those that were in Alberta, they were underwater. Well, everyone who invested in Ontario and BC did just fine, honestly more than fine, as long as they didn’t over leverage, but save them was that their properties were at least rented out at the time that most people wouldn’t bankruptcy because again, they focused on cash flow at least, even though the property values recovered from crashing down, they can at least cover their expenses. Again, this is largely Alberta, though I did know one gentleman in Hamilton who lost everything he had him and his wife had over 5050 joint venture properties, they were all sold off by the banks at a discount, he lost his home, his wife, his family, his reputation. So again, from being around a long time, I understand the worst case scenario. And the worst case scenario is unacceptable to me and my family. Therefore, we, we have a lot more less risk in our portfolio, much more slower controlled, boring growth. So this is back in 2008. During the oil crash, and combined with the financial credit crisis of the financial market, melting down, stock markets melting down, fast forward to present a new wave of real estate education groups have popped up local groups to so less local ones as in like, I’m talking about Ontario. So these are not groups from BC and Alberta, or the USA, there’s new at all these new influencers, and these new networks and coaches with limited experience. And they’ve emerged and the new cycle starts a new cycle of FOMO starts and from what I’m seeing, not everyone but like a number of people fail to learn from history and so there are sadly doomed repeated, red flags are were ignored. Greed is unchecked private lending for the first time just last few years becomes extremely popular compared to the past. It’s become popular compared to five years ago. private lending becomes popular among everyday folks, as they’re promised double digit interest rates in exchange for deciding paper money money over on what I deem high risk projects. And we’ve seen this before with the bankruptcy of Paramount equity or like fortress, financial, but still brokers broker and lenders land investors raise OPM other people’s money because their vision and mindset of abundance overshadows the fact that managing trades renovation projects and construction is not easy in my experience, made much harder in this environment where labor is in shortage, wages are skyrocketing. In Nigeria, material shortages are ongoing, long term boring cashflow, investing and wasn’t profitable enough for generally isn’t profitable or fast enough for anyone to quit their day jobs in the short term. So some scaled up in order to do fast flips and bursts. In order to, you know, a business of real estate investing, it’s not really real estate investing to me, it’s really more like a business without the operational know how resources were spread too thin. Properties are vacant when you’re a flipper when you’re exclusively flipping, so no money is coming in to cover those mortgages. So back to Clydesdale, their holdings, their properties were located. So again, I have the there’s I’ve linked to the attachment and document from the trustee lays out all the properties that they own, that are involved with the bankruptcy. Anyways, just looking at them, are they looking at what cities these properties are in? They’re located hours apart? There’s two two properties in towns in Ontario I’ve never heard of the towns have had never heard of, they’re spread out to the West, there’s Hamilton properties to the north something as far as North Bay, to the east. Yep, Peterborough, and even have a property in Belize. Right? The owners live in London from my understanding. So for me personally, it’s this is way too much risk. I’ve never seen anyone pull off this much scale covering this much geography and my career. Personally, I prefer boring stuff I can control within a one hour drive from my home. I do burr investing, because in my experience, renovating is such a pain in the bum. I don’t want to sell these properties after I renovate them. I prefer to keep them rent them out, keep rent them out, keep them refinance them all sorts of good things. And I’ve been doing so since 2005. And same with the majority of our 500 clients since 2010. Personally, I only do one property. At times we’ve had two properties vacant. And that’s because I only want the best general contractors working on my projects. And also I prefer cheap financing. So almost always are we’re using a lender financing. And on occasion we’re using D lender. So if you too would like to learn how to do boring cash flow investing. We do in real estate team we operate in the east and the west of the GTA because generally that’s where investors can find cash flowing, boring properties. And honestly that’s the best ROI I can find. Then let us know reach out to I win at infinity wealth and one of my coaches will be happy to get back get back to you and get on a call with you. We are always recruiting for those who want to be also want to be self made. Millionaire Real Estate investors in a boring, repeatable, systematic way that cash flows nice boring and safe. Hopefully you agree that’s the best way to get rich. onto this week’s show. We have an old friend of mine, Russ Westcott, who is was in town all the way from Vancouver to Toronto for the wealth hacker conference, Russell has owned over 100 properties, and has the battle scars and the lessons on how to invest better than he did. In an event in Alberta. Russell is a smart guy, and he’s here to share about how his coaching clients are navigating this high interest rate environment with creative aboveboard financing, and a couple different investment strategies for highest and best use to create more housing units. And of course, generate higher rents for the investor on properties that invest that most investors generally don’t see. Again, I’ve been around for a bit, I’m pretty impressed with what Russell’s clients are doing. So you want to check this out. And also they’re in today’s interview with Russell, we talked about properties in Saskatoon and Edmonton and Niagara region of Ontario. To me this clay treat I personally love to learn about real estate investing, as always, other than learning about real estate investing. So always a treat to have the JV Jedi on the show, someone who’s always thinking outside the box on how to maximize returns for its coaching clients and on his own on in on their properties. I give you best selling co author, Russell Wescott. Hi, Russell, what’s keeping you busy these days

 

Russell  

are when, first and foremost, hang on a sec, let me move your hand over here. Let me touch you. You’re real, you’re like in person, like you’re talking. It’s not a it’s not a little computer monitor. And we’re talking zoom here. You’re, you’re like a real human being. And we’re in the same the same space at the same time and warms my heart to see you my friend. Well, thanks for coming along this way. Oh, I came out just for this.

 

Erwin  

I got some messages after the conference. And also people were just asking about buying the recordings for the conference. And I had some people that missed, for example, client mine, their nanny was sick. So no one would take care of the kids at the Miss bass recording like you’re my client, of course gonna take care of you. But I was thinking, Could you imagine like, for example, like Jessie, it’s his presentation? Yeah. Could you imagine watching it on a screen versus what we experienced? It was?

 

Russell  

Do you mind if I have asked you a few questions? I know you’re the interviewer. And there’s your show. I would I had some questions I would ask you. But riff off that for a second. That was one of the best presentations I’ve seen in a long time. It was very engaging, very dynamic. He had a DJ on stage. And it’s just, it was just, you know, people were were moved by it. And the stories and people felt something at it. And it just reminded me of why we have those conferences, why we deliver presents like this. But this week, his presentation was phenomenal. It wasn’t anything brand new that nobody hasn’t heard before. It was just presented in a zoo is different. It was one presented in a different way, with a different message by a different presenter that just really engaged an audience into into a masterful story. And people were just moved by like that one fellow that was trying to ask that question at the end, and he just couldn’t even get it out. Because he was so emotional insert. So for clumped from, from everything. It was just that’s what a good presentation from a stage has to do is it has to move an audience. And that’s what it did. And I love I love the conference and just watching people and watching the presenters. And I told you in one of the breaks, you were like the don’t take this the wrong way. But you are the most improved that I’ve seen. But the good news is, that’s not easy. In the end for you, you’d be the first to say is it’s very difficult and very fearful for you. And I give you props for doing something extremely fearful and just leaning in and doing it anyways. That to me, I find that more inspiring than somebody who has been doing it for 20 years and as a polished professional than doing 1000 times. But that one person that scared in their boots, and is fearful of doing it doesn’t anyways is to me is more powerful than the professional that gets paid for fly around the world to go do something. Right. So you put on a hell of an event you guys did you in terrible. Thank

 

Erwin  

you. Thank you.

 

Russell  

How are you feeling?

 

Erwin  

Tired? Yeah, it’s now Wednesday. So it’s only a few days. So post event hangover probably still in it right now. But there’s wor