**Transcripts are auto-generated.

Erwin  

Hello and welcome to the truth about real estate investing show for Canadians the number 81 show on all of iTunes in the business category. It’s meant to educate and maybe entertain a little bit, bring you stories of regular everyday Canadian investors who have repeatable results. So you and I may learn their best practices, what works and what doesn’t. No get rich quick schemes. We’re actually gonna have some guests on who has some failed get rich quick schemes. Specifically Clydesdale capital. I can’t buy personally can’t stand gambling. I do not like anything that loses me money. But you can talk to my stock in crypto accounts. Investing is a marathon. The odds of success improve over time, in my experience, especially when you base it in economic fundamentals and continuous improvement, resulting in the creation of long term wealth. This show is hosted and produced by me full time real estate professional OG, investor specialist realtor, the realtor since 2010. My team and I have helped close to 500 clients invest in over $400 million with a cash flowing real estate, helping clients achieve financial peace. For example, we have at least 45 self made millionaire clients, excluding that excludes their principal residence. I believe investing should be intentional. If you just bought a home and it went up, but it wasn’t intentional. Partly intentional, but we excluded for our stats just to be conservative, because I like being conservative. This past week has been a busy one. My brother got married, we hosted a conference for about 100 investors, and most importantly, report cards, the school report cards. That’s right. Let’s see what the educational professionals have to say about my kids. Oh, boy, hang on. All right. If you want to skip this rant, just keep skipping forward, have a great episode. But until then, I’m obviously biassed, I’ve invested heavily into my kids, myself, and especially cherry has invested heavily into our kids with the most recent strike in the school system. Like all parents, we scrambled to keep our kids learning ongoing because our kids education is important to us. And it’s not important. Everybody else cherry actually ordered some math workbooks from Amazon. And we soon realised my son is two years ahead, based on his knowledge of multiplication. And both my kids love to read. We don’t allow much screentime in the house maybe once a week. So when the kids aren’t at their extracurriculars, or doing any homework, they’re reading books, or they’re working in the family business. So what do the educational fresh professionals have to say about my kids? By the way, my eldest, my kids do do public speaking as well. So as a test, my daughter volunteered. My My eldest, Robin, she’s eight years old, she gave a one minute presentation at the conference in front of those 800 people on the subject of money saving and investing. I personally had her age, I would have rather gone for a polar bear dip in the freezing lake waters than public speaking in front of adults at the age of eight nonetheless. Anyways, these educational professionals said my kids had a great start, quote, unquote, great start and an excellent start. Then ticked good in every category, not one excellent, not one satisfactory, straight BS for both kids. Either the teachers have no idea who my kids are, or I don’t have any idea who my kids are. Or this is some sort of protest. I have no idea. I am honestly thinking about selling one of my houses in order to afford private school. This like it’s in public school. It’s a four minute walk. It’s so close. It’s so much less money than private school, rant over. I like to take a moment to thank everyone who played a partner wealth hacker conference, or sponsors. Thank you so much. Appreciate all the feedback. I’m glad you’re also happy with the with the results. And my team here at IW. In real estate, did a bang up job meeting our booth, talking to people about real estate investing, specifically strategies that work unlike all those poor folks who are out there, who paid for expensive coaching and are losing money and are approaching bankruptcy. I feel really bad for you guys. Thank you to cherries Real Estate Tax Tips team that drew my wife of course, she busted her butt to make this this event happen to me and the V team. Our speakers just mo Dahlia through wires mortgages, Jordan Anderson, our emcee Joe, and of course Derek Foster. He absolutely killed I can’t believe how many books he sold at the event. He was only accepting cash. I like I was thinking, wow, while people don’t carry cash these days, I just love people to carry cash to our event because Derrick sold out of books and he had a lot of books is putting on a conference hard hell yes. And the results were pretty amazing. It was so great to see so many from our community, who I hadn’t seen in three years. Thanks to that pandemic. My talks provided me that lead to share my research and hobby investing going forward. That was great to get that off my chest. Cherry sock. I personally loved it. The last few years many got rich and many last set of cash flow. Maybe I’m just projecting The portfolio has done quite well. And yes, we kind of lost sight of cashflow at least I did. With all the equity gains house rich cash poor. That explained to me pretty well. We’re gonna back that off and just over exaggerating over cash poor. I personally can’t wait to get our financial roadmaps planned out to know when we can start working if we’ve ever wanted to. Thankfully, it’s not far away, thanks to our boring but profitable real estate portfolio I’ve been working on since 2005. Thank you, Jessie. It’s our keynote speaker who brought a DJ with him all the way from Atlanta, Georgia, and didn’t charge us any extra. Thank you, Jesse. I found out that we go JC was bringing a DJ. I had no idea he was gonna bring a DJ I heard his talk included a DJ, I thought that we’d have to provide the DJ. Anyways. Jessie’s talk killed it. I know many had tears in their eyes. One friend of mine, I had to leave the room actually, Jesse’s story, hiring an ex navy seal to coach him through the last man standing race was absolutely insane. inhuman. The words I feel it standing and we don’t get tired for now means something to me and something else entirely. Even tough guys like Neil Oliver, Rachel Oliver’s husband told me that Jesse killed it. So again, I know for me, I’ll take that Jesse’s lessons away of pouring one soul into the work to heart, you might 17 listeners, you will see what we have in store for 2023. We’re doubling up on the amount of educational content that we put out there. The podcast will largely be unchanged. We will have a few more solo podcast episodes with just myself sharing my research and a few shorter episodes with like coaches on my coaches on my team to share what we’re seeing on the streets as because the recessions here, in recessions are best for getting rich, and we’re in one record average market will have bottomed by spring, maybe summer. However, the best deals will be gone by then. So stay tuned. If you’re interested in the deals our clients are snapping up. And if you want to know what a deal looks like, if you’re new to the subject of real estate investing, you want to learn more, I have a free book for you called The Canadian Real Estate Investing playbook, which contains stories and strategies of how my team and I have helped close to 500 Hardworking Canadians build a cash flowing portfolio of real estate as a side hustle. It’s my opinion that real estate is best as a side hustle. We have a good number of clients and track record to back that up. If you’re interested in the book, simply go to our website, www dot truth about real estate investing.ca. Again, that’s www dot truth about real estate investing.ca. There’s a link on the right side. It’s a big picture of a book, click on it, go download a copy for free. If you’re near my office, feel free to come by grab a physical copy. We’re here typically during business hours. onto this week’s show. We have Jesse from possibly the most popular private mortgage provider in Calvert mortgages. Unlike the banks, Calvert loves rough and ugly properties, that’s actually their niche. Investors love California mortgages because their turnaround is fast, in my opinion is the fastest I’ve seen for short term money. That’s private, but Fast Money does come with a price. Today we have Jesse dobrowski ProProfs D sorry, have watched too many Simpsons episode. We have Jesse vice president of business development, and he’s here to share how COVID helps flippers and burn investors, how much money down you need rates, lender fees, terms, how they land all sorts of detail, he can explain much better than I do since it’s his business. No, their focus is not here to raise capital to lend out, which is extremely risky in this market. As I mentioned, there’s lots of investors who are near bankruptcy looking to raise private funds. Do be careful out there. I have a couple of clients who have shared that people who borrow private money from them are not returning their calls. We had nothing to do with that. I’ve been pretty it’s my bias that I personally no private lenders so don’t ask me how to private land. I personally don’t it doesn’t fit my my risk reward criteria. But you know, that’s what the calibre is not here to raise funds for lending out. They’re here to let folks know how to borrow from them. But and also Calvert as Joseph Sibley is is actually based in Calgary, so they know Alberta well. They only operate in Alberta and Ontario, sorry, BC, maybe I should hit them up so you guys can get served as well. Anyway, Calvert is the largest private lender that I know of personally, with 330 million out there and loans. That’s a lot of money. That’s the gap that’s bigger than any private lender I know. And also I’m hearing some private lenders are no longer lending. So for more information, check them out. www.ch m ic.ca. Again, that’s www.ch m i c.ca. of links in the show notes. I know several mortgage brokers who refer business to Calvert and passed the show who swear by California as well. Please enjoy the show. Hi, Jesse. What’s keeping you busy these days?

Jesse  

A or when? Thanks for having me. A lot is keeping me busy. I have a young family. I have a busy and growing business that I’m a partner in And we have some exciting markets that we’re lending into. So a lot is keeping me busy. Thanks for asking. Oh, yes, the family. My son is six years old. Grade One daughter is four years old. Oh, young. Yeah, my wife and I both work. So that’s exciting. We both have relatively demanding jobs.

Erwin  

Yeah, I can imagine you’re pretty busy. We keep busy man. How’s it compared to now? How’s like now busy, like so we’re, this is October 20. We’re recording how busy are you now compared to like, at the peak of the market. So,

Jesse  

I guess busiest subjective, we always are trying to in terms of professionally work on the business, set foundations and grow it so you know, February, January of this year, particularly with what was happening in the Ontario market, we were extremely busy, with loan requests supporting our borrowers who buy renovate and sell flippers or birth, buy renovate rent, and refinance properties. So a tonne of deal flow was happening in Ontario. Then, since then, deal flow is slow down in Ontario, you’ll flow has remained very consistent. It’s actually growing in in Alberta, where we predominantly lend into the Calgary and Edmonton markets. But today, what we have seen over the last two years is significant growth in the business. We’ve seen a real ability to help support Canadians who are buying and renovating single family houses. We don’t see that overarching trend. Slow, long term. You know, in Canada, there’s a huge demand for single family houses in major urban centres, there is a significant lack of supply. And as we welcome new Canadians who predominantly we welcome new Canadians who are ready to work and who have capital and who demand single family houses. We look forward to continuing to help our clients rejuvenate that stock and get it so it’s marketable to your average homebuyer.

Erwin  

Yeah, I’ve actually been trying to dig up how many visas we all know the immigration number or like permanent retinue permanent residence we’re getting, yes, you’re trying to find how many visas can I gives out? So work visa student visas, because the thing is, they all need to live here, too. If you’re here, you need a place to live.

Jesse  

I think that is a really good. That’s a really interesting question and something that we should be digging up because we’re just, you know, the number of new immigrants that that number is there. For us. We know On average, 58% of them are economic immigrants. So bringing in skills and capital. Sorry, that’s 58%. On average, yeah, yeah. On average over the last, I’m using 10 year Stats Can data is 58%.

Erwin  

Right. And then the rest are our cases.

Jesse  

Yeah, the rest are more humanitarian. Humanitarian cases where, yeah, they’re fleeing countries that are you don’t want to live in. Right.

Erwin  

And then the reality of that is is kind of diseases that’s inflationary. Totally. Right. So it’ll require the old car support the retired government support, the require free health care. So yeah, so that’s another more inflation plus the number I saw this morning. Don’t call me folks. Like I think it was over 500,000 visas that Canada gives out on top of the immigrant, permanent new permanent residents. Oh, wow. Right. Well, you know, like student visas, for example, there’s literally all the international students have to have a student visa. And economically, they’re generally pretty well off.

Jesse  

Yeah, yeah, they’re well off. They definitely are contributors to the economy. So welcome a man with open arms.

Erwin  

You know, you’re mentioning that, like, you guys are part of the housing market, and you’re betting pretty much the farm. Real Estate continues to do well, in Canada, am I wrong? Well at least be treated in Alberta and Ontario.

Jesse  

Well, is again, subjective. Our thesis is that again, Canadians need somewhere to live. And regardless of if the markets appreciating or depreciating, what we’ve seen from from 30 plus years of supporting real estate investors on short term mortgages, is that there is an opportunity to buy housing stock that the general market doesn’t want. So stuff that’s been dilapidated, lots of deferred maintenance, renovate it and sell it for profit. So in Alberta, where where essentially we go through five to eight year cycles of peak and trough, we’ve seen flippers be successful in any market, what happens is the sharper flippers during downtimes by better get to market quick and still sell where we focus or when is the mid to lower half of the market, where typically there is a floor because again, People need housing. And at a certain price point, it becomes affordable to a lot of the population. So that’s our thesis is just supporting the Canadian housing stock on the mid to lower half, where we’re redeveloping existing stock in major urban centres, which is where the economy is, and will likely continue to be

Erwin  

that Jesse, you and I got introduced, because I had several friends of mine who were very serious, very professional real estate investors, and they’re still successful in this market. They’re that good. I know you guys have so many fans?

Jesse  

Well, what we try to do is understand what their pain points are like, what do you need as a as an investor as a business person, and what’s not being offered. We also do a lot to educate and make the process as effortless as possible. So the effortless process we have, we have tools like like our flip analyzer, we have a lot of case studies, we do a lot of, of education as it relates to tips for flips, economic updates, that kind of stuff. But going back to serving that pain point for our clients, the banks, so the financial institutions who lend out 90 some odd percent of mortgage capital are not interested in helping people for short term. They’re also not interested in lending on housing stock that is outside of their parameters. So if it’s not inhabitable, usually, when a banker looks at the appraisal, it’s just a no go. So we’re filling a void in the market a gap in the market where we’re an intermediary in term lender supporting them. There are a lot of other I call them we refer to them more as private lenders out there who are doing this type of lending, but they lack in most instances, our clients love us for the consistency and the speed of our decision making like literally are when our underwriters can turn a file around same day, we have a really unique value add to our clients where we employ appraisers. So we do our own valuations in house. And we can analyse the property, analyse the budget, and through that, and through a lot of data and history, determine what the after repaired value is, same day, and give the commitment that quickly and in turn, enable the investor some leverage in the negotiation, they can go into a negotiation, knowing that they have our financing, knowing that we can lend it out tomorrow and solve the sellers needs. And usually the sellers needs is Mrs. Allen to sell quick so they can get a better deal through our service. So it’s really what we’ve done is we’ve evolved the business to solve as many pain points as possible. And our goal is to continue to increase that effortless experience to the leverage data to leverage our people in order to provide better service more timely at a better cost to them. For the

Erwin  

listeners benefit to give an example how much scale you guys have, can you say how much you’ve deployed in Canada in terms of funds? Or how do you measure this?

Jesse  

So this year, our financial year begins March 1 and ends February 28, we will lend out around $450 million. That’s a lot of money. Yeah, yeah. And 75% of that will be to real estate investors. And we think that we are just cracking the surface on what we can serve Ontario. So for instance, let’s call it let’s call it 350 mil that we’re lending out, actually, I’ll do some quick math. So we’ll end out about 340 million to flippers, by the way on average, our flip loans are 400 grand. So 335 mil by the by the 400. So we’ll serve over 800 real estate investor 800 Real Estate Investor transactions this year. Right now, we’re lending out around just as much money in Alberta than we are in Ontario going away. Okay, yeah, but through and that’s because the business is founded, we’re based out of Alberta, we only started serving Ontarians, two and a half years ago. So when you look at the total available market, we should be serving four times as many Ontarians than Albertans. So we know that there’s a lot more people that we can help a lot more real estate investors that that need to hear about us and hopefully that we can, that we can serve. So there’s a lot more scale of the business in Ontario. And then we know that there’s some really solid real estate investors in other provinces. Particularly we’re interested in serving British Columbia, just because it’s next door it is a relatively large market. And the rules and regulations to participate there are similar to Alberta. So whereas in Quebec for example, the barriers to entry as it relates to regulation and even how they do business there doesn’t make it as exciting opportunity than the prospect of going to BC and and deploying our capital there,

Erwin  

where we have to have this whole conversation in French This was exactly

Jesse  

exactly I don’t know what I’d have to have to review the regulations, but I’m

Erwin  

French just the selfish to actually just bury this episode. So there’s less competition for me when I’m out there buying.

Jesse  

Yeah, yeah. Well, you know, we know that you buy well, you’re sophisticated. And I think, you know, if you’re out there searching the market, there’s more than enough opportunities.

Erwin  

I don’t know, man. So I’ll give an example. So you tell me because I think this is a prototypical deal someone would bring to you, for example, I saw I saw, I’ve seen more listings now, that are renovation projects. The seller has started renovating, so they’ve they’ve got a house, the house, not necessarily the stud, but they’ve taken out the kitchen that he can put the bathroom between about the flooring, right? And these are the pictures on realtor.ca. Right, right. And I’m like, to me automatically, no bank is touching that. Right? I needed to come cash. Or I go private. Yep. Why go to someone like yourself? Right. I go to Calvert. And then I couldn’t believe it. So we knew that they paid like 300 for the house to ask him is 499 There’s one action, right. And I think it’s something like what Canada is having like seven offers selling for 750. Like, like holy cow, that many people can get that deal done. And that’s makes me think that too many people know like calibre, which is why we need to bury this episode.

Jesse  

Yeah, you know, definitely, I think the big thing there is on the open market, it is more difficult to buy right? Then on the private market.

Erwin  

Oh, just give us some time, there’s more and more of these are coming.

Jesse  

Yeah, so a lot of you know, going back to a lot of these flippers and Burr clients, they’re out there, they’re scouring the private market, and they’re solving this problem of a lot of people that don’t want to list on the market, because they’ve had mental health issues with with hoarding with, they don’t want people in their house. And even if that’s point 5% of available properties to sell, that’s still a huge number. So that’s kind of where where we see our clients, mostly working is in the private sales with with wholesalers, you know, buy your house for cash. optimising Google searches for when people are googling how to sell your house off market. They’re the first that come up. So those are, those are the tricks that we see a lot of our flippers deploying

Erwin  

for, for this market, that we’re actually starting to see some power sales by the banks. Yeah. So I think there’s lots of opportunity for anyone who’s looking these days, anyone who’s either cash rich, or has financing available to them, especially for these projects that the bank won’t touch. So actually leads us to a good question. For listeners benefit. One is like the range of properties you typically service. So you mentioned hoarder house. Yeah, we just not for everybody.

Jesse  

So the range of properties, we love single family, we love or units and last residential, a homogeneous property is what we’d like the most. Right? Like, I mean, don’t go buying something really unique. And trying to market Yeah, because you’re gonna lack data, like, a lot of times, especially the newer flippers, they come to us with, with like, you know, you gotta you gotta, or everything is or, or even like a neighbourhood where everything is 2200 square foot two stories. And they fought somehow there’s a 900 square foot bungalow, and they, and they and they try to analyse it and adjust for it and, and justify why it’s a good deal, but there’s no data to support. And when they’re doing that they’re putting themselves at risk, because there’s just a lack of sales information. And in turn, you’ve really shrunk your buying market or horse farms or rural. There’s a reason we, there’s a reason why I say urban, single family, because there is a big market, there is really good data and good data is is timely and abundant. And in urban centres, you have timely and abundant data, whereas the further out of an urban centre you go, the harder it is going to be to pin down value. So yeah, that’s the spectrum. And now, another thing that that we’ve we’re really paying attention to is, again, the lack of housing, and CMHC has identified that and they’ve created a programme for for multifamily investors, and we see opportunity for that. So we’re starting to look into okay, how do we help these investors early stages, how do we help them come in renovate, increase rents, and then we’ve seen instances where we’re serving clients and they’ve increased rents, they’ve stabilised the cash flow, and now they go to the CMHC insured product, and they’re exiting with cash in their jeans from us with a really great cash flowing property. So we’re paying a lot of attention to that we’ve seen ourselves, do a few million dollars of deals of that in Edmonton to one one borrower. So we figure if that’s happening to one board Edmonton, what else is happening in Edmonton? What’s happening in Calgary? What’s happening in southern Ontario? You know? So we want to get ahead of that trend and figure out how we can best support real estate investors on rehabilitating those multifamily properties.

Erwin  

Amazing. Yeah. And then more of a housing stock is available, which is the best thing we can anyone can do for this housing crisis. We’re in the middle of exactly. So just want to go back to your previous point about major centres Can you can you name off some, like the smaller towns that you that you guys will lend to? Like, for example, like what the pandemic people really spread out? People left urban centres, you know, tonnes of people moved to like London to Belleville, to, you know, the suburbs and even smaller centres of like 50,000 centre or 50,000 too small for you, for example?

Jesse  

No, it’s not as long as when we analyse the economic fundamentals, so employment migration, we look at stuff like what is what is the current housing inventory, we look at it on kind of how many months of housing inventory there is looking at a lot of trends. And if we determine that the economy and the housing market is stable enough, will land there. So rule of thumb, we want to land in urban centres with 50,000 people or more. We call 50,000

Erwin  

Urban’s Yeah, we

Jesse  

do we do? Again, are we going back to going back to does it have the economic and housing fundamentals, that gives us the confidence that we’re not going to deal with with big problems down the road? So 50,000 people or more, or within a 10 kilometre radius of that, if it’s 100,000 people or more will go within a 25 kilometre radius?

Erwin  

Got it? Because my university I went to it’s 20,000 people, so we almost qualified.

Jesse  

No, you as long as it’s in the city will go 10,000 to 49,000, as long as it’s in the city. And again, going back to our analysis and giving us confidence that the economy and housing market is stable enough where we want to be deploying capital long term,

Erwin  

just it fair to ask like probably what the burning question that everyone’s has, in their minds, how much does it cost them? And how long do they have to repay? And how much they have to put down? The first three questions you get from every investor?

Jesse  

Yeah, we, you know, yeah, we’re just working with kind of our marketing and communications firm and figuring out exactly what is the messaging. So another, we talked about the pain points. Another really unique offering that we have is low money down. So our buyers, our borrowers can go from us with as little as in Ontario $20,000 down, that is provided that they have the capital to execute the plan. So the capital to renovate, and to carry our debt for the planned period of time. But most importantly, provided that when we do our analysis that we see they’re going to make real money. So we’ll end with as little as $20,000 down, which is something that really appeals, especially to the pros, because they’re interested in doing volume. And one of their biggest, one of the biggest things that they lack is, in order to do volume, you usually need a big pile of capital, where we’ll allow them to deal with as little as $20,000 down. So our practice is for professionals.

Erwin  

Yeah, like the best of the best, the best of the best. That’s someone with like, a year experience. No,

Jesse  

no, we’re dealing with people that and now we will deal with people with a year or even getting new into it and guide them through the process. But we’re going to need more security, we’re going to work with them a lot differently than the best of the best.

Erwin  

So you’re probably not gonna lend to them on five properties off the off the hop. No, no,

Jesse  

no, in order to get to volume, you have to prove yourself last and you do that through working with us directly showing us the portfolio looking at your financials, like there’s a lot of work that goes into building trust with each other. So $20,000 down now, before when money was really inexpensive, we would lend to as low as 7.99%. That would be our terms for our borrowers are flipped borrowers are always six months fully open interest only payments. Typically, our borrowers are exiting from us before that six months. Of course, sometimes the projects are larger scale, sometimes the market slows down and we need to renew we renew at no cost. But we do pay attention to Hey, why are you renewing what happened? What, what what deviated in the plan where you’re now going longer than six months or sometimes we just, you know, a longer project, they anticipate nine months and we just follow the progress. So 7.99 and our rate is dependent on downpayment. So we view it the more you put down the lower our risk. So you were able to access that rate with 25 percent or more down, and then it’s a sliding scale. As you put less down, the pricing becomes more. The pricing for today, the pricing for the 20 20k down product is 15.99. So 16% annualised interest only payments, on average, our borrowers are with us for five months. So really effectively, they’re paying us seven and a half percent interest. And we always charge a fee. In Ontario, the fee is 2%. That fee doesn’t get paid until they exit. So let’s say, let’s say in the instance, where they’re only putting 20 grand down, they buy a house for, for 520, we lend them 500, the 2% fee, which is 10, grand, just gets added to the mortgage. So our mortgage is actually 510 grand, they do what they need to do get on market sell it, we get paid back to 510. That 2% is whether you come to us to a broker, a mortgage broker or not, we love working with mortgage brokers, they like our product. So we don’t penalise our borrowers by coming through us through a broker, if they come to us direct, it’s 2%. And if they come through a broker, it’s 2%. Right? So basically, today, we’ve had to increase our rates with what’s you know, the Bank of Canada has increased rates. So far 3% is looking like next week, we’ll see another point seven, five, maybe point five. So that’ll be 3.75 will increase our prices by half of what the Bank of Canada has done. So we will increase by depending on what they do next week will increase by another 50 basis points or point

Erwin  

seven, five, it’s kind of you.

Jesse  

Yeah, so right now, we’ve only increased on our whole book 1% versus the three that the Bank of Canada has done seriously. Next increase, we’ll catch up with that a bit like we’re, we’re running our modelling and looking over the next few years. And we need to increase our cost of capital a bit because of the inflationary period. And also, we borrow a decent percent of our money from the bank. So that cost of capital for us is tied to the bank rate.

Erwin  

So your spread is actually getting squeezed by not raising your rate

Jesse  

spread is getting squeezed. Luckily, we’ve built a really strong business where the margins are okay. So we don’t have to, we always ask ourselves, How much money do we need to make to our shareholders need to make versus risk? We want to make a really good risk adjusted return and for ourselves and our shareholders. But the more we, the more we increase pricing to our boilers, that also has a risk component, right? It’s, it’s easy to say, Yeah, let’s just raise it 3%. Well, now we’ve squeezed their margins. So it’s a balancing act. And we didn’t need to increase it lockstep. So we’re trying to do our best with balancing with providing the best possible pricing to our borrowers. It’s still serving the business and our shareholders with the with the best possible risk adjusted return that we can provide.

Erwin  

And then do you help folks with their exit, like, for example, people who are going to reef whose plan is to refinance?

Jesse  

We do we help them by firstly, walk day one, we walk, we have them walk us through their exit. And, and our underwriters are very skilled at that and poking holes, like when they see Whoa, you’re not going to exit, then we won’t do the deal. Or if they see, okay, you’re going to exit you’ve been using, let’s say, for instance, a big financial institution, you have four properties, your boat to go for your fifth, or you might see problems there, you might want to go talk to a professional, like, go talk to a mortgage broker who deals with real estate investors. And then we’ll use them as the expert opinion to say, Yeah, I got Joe approved, don’t worry about it, here’s how we’re going to do it. So we help them by by having them walk us through poking holes, and ensuring that there’s a high likelihood of exit. And that’s especially important for our clients, for our flip clients. You know, it’s just going to market but it’s also going to market at the right price, like you know, seven months ago, go to market at whatever price it’ll sell whatever you want. Today, and it’s in surprising or when like your market in Ontario has been crazy for so long, that the professionals don’t have the tools they need in this market like getting sharp on listing and really looking at comparables and coming in a little bit lower than the best comparables to get a good offer and a fast sale. We’ve seen that in dealing with down markets for ever. So we can give them that education we can make sure that their expectation because the worst thing that can happen in this market is they expect to sell for 10% more than what we think reality is and they chase the market down and continue to chase it down and fight it the whole way. That’s position. You’ve got to get ahead of the path

Erwin  

you had to be the best deal or else no one’s gonna take you.

Jesse  

Oh, this is still selling, but you have to be the best deal.

Erwin  

Yeah, the worst. Yeah. And then it’s actually I know from from speaking to you offline that you guys want to land on a certain what’s actually what’s the what’s the most expensive property that you lend on? For example,

Jesse  

we try to stay away from lending over $2 million on one property.

Erwin  

That’s a pretty big guy. Maybe watermark?

Jesse  

Yeah, yeah. Although, although that includes the multifamily, right, like, Okay, going back to, we try to stay to the mid to lower half of any market. Right. So, in Toronto single family house, we’re gonna see million plus dollar properties. Although, at the moment on our whole book, or we have, we have $330 million out in mortgages. Today, we have five loans over a mil, and the highest being 1.7. So we really stick to lending to the mid to lower half. Although, you know, if we have a really strong grower who has an expertise in slipping higher end stuff, we’re going to want to look to support that. We’re going to want to look to know their business and understand it. So we never want to set our parameters so rigid, that we’re not supporting the good practitioners to good operators, to good projects.

Erwin  

And then so for example, you’re talking about Hi, and I don’t wanna spend too much time on this, because bit more seems to be not a big part of your book. But say it is a high end flip. How do you gauge risk on like, their exit price? For example?

Jesse  

Well, we’re always doing our after repair value, right? We’re always analysing what the comparables are, we’re looking at what is sold recently, the fewer comparables, the more hesitant we get. So on the high end property, they’re coming in and saying, Yeah, this is going to be worth three mil when it’s complete, we say great, we’ll gather the data and we say, yeah, it’s there. Or we say, we’re not seeing it, nothing sold in that neighbourhood, days on market are huge. There’s not good data to support what you’re talking about. And we’ll, we’ll say no, if that’s the case, but for everybody, if it’s like, for instance, you know, I’m a lot more versed in Calgary if you’re in a really good neighbourhood in Calgary. And, you know, right now, houses are starting are selling for that we have some really good income earners. And that trajectory, as our economy grows, should continue for some time. So a $2 million property doesn’t scare us as much as it did. Six years ago, during the energy downturn. When we had massive vacancies downtown, when we had head offices leaving, we had, you know, a brain and money drain, we’re not seeing that today we’re seeing, we’re seeing really good indicators that says that the energy sector in Canada is needed to supply the world with energy. We’re seeing a lot of good activity as a relates to tech work. And we’re seeing other industries move in. So we have a better feel long term for where Calgary will be. So on a $2 million house today, we have an appetite for it. And there’s comparables, there’s houses selling there’s there’s data to say, yeah, there’s a market for these houses.

Erwin  

All right, well, we’re gonna get to Alberta. So I finished the wrap up the Ontario story. So what are you seeing now for people who have already borrowed for example? Like are they are people doing all right, they’re managing

Jesse  

for the mortgage, their dues. If you would have told me in February, the market is going to drop, in most instances 20% In six months, we would have stopped lending. And we would have prepared for some big delinquencies and big losses. We are eight months into this. We’re seeing our borrowers be remarkably resilient. Yes, there’s more tough calls, where they’re saying Calvert, you know, we’re stuck, we can’t sell, they need advice they need talking talking to, and in most instances, it is to sell to rip the band aid off to get in at a price where the market wants it and move on to the next project. So in Ontario, you are bores, like, typically, flippers should be hitting singles, maybe the odd double, right? So when I’m taught when when we’re talking average price point, let’s say 500 grand, putting in 50, a single to us is net net 35 to 50. Grand, double would be 50 to 75. We’ve seen these real estate investors making at 100 150. So for a long time, they made really good money and now they’re not hitting singles. They’re striking out they’re losing 1020 30 grand. I think a big thing is because we’re dealing with so many professionals and they have that dry powder, they take the loss and they live to fight another day. Now, we’re gonna see losses, we’re not naive to that. We have not yet in Ontario, but we’re prepared for it. We’ve underwritten it, we’ve forecasted it in our model. We’ve given that disclosure to our auditors, to our shareholders, we we reserve for that we’re in the business of risk, and if we don’t have the odd issue, then we’re probably not analysing risk properly. So, in general, what we’re seeing is there’s definitely Borel worried that are not going to be as successful as they hoped, they’re going to lose money. But in most instances, we’re seeing them be ready to participate in the next deal. Some of our more sophisticated boards are already actively getting into the next deal, they’re buying really well. At some point, the market will clearly have bottomed in Ontario. And there’s still a lot of demand, like a really remarkable thing. For us, being from Alberta. And looking at what’s happening in Ontario is typically you see massive swings in inventory, right? Like, right now, there’s not many markets where inventory is above 3.5 months. And in Alberta, like like, during the downturns, you see inventory creep up, like markets in general, like Calgary’s market was seven months of inventory. That’s crazy. Yeah. And this was for years, during like 2015 1617, you had neighbourhoods that had nine months of inventory, you had also I didn’t realise was three months. So what that tells us and what we believe is that, at some point, it’s going to bottom and start to move up. And that’s going to be a really great opportunity for for our flippers to get back in. But even now we’re seeing people buy really sharp execute quick get to the market. So even if it drops, like let’s say it is another 15%. And hopefully that takes over a period of time, let’s say it takes seven months, drop that extra 15. So on average 2% a month. If you’re getting back to market quickly, you’re minimising the risk of that market continuing to go down and our best flippers are getting back to market really quick.

Erwin  

So your flippers, they’re staying in the game. No one’s been like crippled,

Jesse  

their state, they’re staying in the game transactions have have essentially halved for us in Ontario, from where they were in, let’s call it December, January, February, and we are getting new. What’s great is during this time, we’re focusing on educating, focusing on systems focusing on finding the next group of professionals that we can support. So we have even our volume flippers are doing a lot less volume, but that’s okay, because we’re bringing in new investors. New flippers.

Erwin  

Fabulous. Yeah, that tells you the Alberta story. Alberta has been has gotten the short end of the stick forever.

Jesse  

Oh, Bert. Yeah, we’ve had the short end. Yeah, since before it like, you know, we had essentially what happened was, we had a big run up financial crisis happened, we had a big run down through college 2010, we had a nice run up through 2014. Energy prices tanked in 14, we had a really crappy market from 14 to half of 20. And then we had a piece of the COVID Boom. But if you look at prices from 2007, to today, in most instances, it’s like a lot has happened in between seven and today. But we’re like 234 percent ahead. So like or, like there hasn’t been appreciation. And in turn, there’s really great affordability, you can move to Calgary, Alberta. And you can buy a single family house, a really nice single family house. Let’s call it a three bedroom 1200 square foot bungalow for under 600k. You can drive to your downtown office in less than 25 minutes, you can drive to Canmore, Alberta, the mountains in an hour, the airport in half an hour. And there is a lot of opportunity. Our employers are hiring, we need people, we need young educated people. So even as an employer operating bing, bing Calvert, as an employer, when we go out to the market to find to find our people, we’re hearing more and more from people in, in Vancouver, people in southern Ontario, where they’re saying, you know, one of our dreams is to own real estate. And we don’t see us to own our own real estate to own our own home. And we don’t see that happening for a long time and where we’re living. So it’s making sense for them to come in and realise that dream in this market. So we’re Yeah, we’re seeing we’re seeing really, really good economic activity. We’re seeing low unemployment, we’re seeing very affordable housing and cost of living. And in turn, we’re seeing floods of migration that we’ve never seen. Both interprovincial. So people moving in from other provinces and international. And in all likelihood, that’s not going to slow down for the foreseeable future.

Erwin  

I think I read an article I think q2 This year, Ontario lost about 2020, Ontario alone lost 20,000 people to Alberta. Yeah, it’s probably your biggest cohort for interprovincial migrants. Totally. Yeah, that’s a lot of people.

Jesse  

It’s a lot of people especially for you know, in Alberta we’re, I think still under 5 million in total total population. Like we’re not even GTA

Erwin  

GTA for the whole problem.

Jesse  

20,000 Ontarians move is a big mover of the dial and a lot of them are are moving here to start their lives or to better their lives which or I buy by the way I’m from Ontario originally I grew up in Thunder Bay, Ontario and moved here after university and I now consider myself a Calgary and I’ve been here since 2007. And it’s a real point of pride that we’re that we’re having people move here and that we have an exciting economy and an exciting place to live.

Erwin  

Where are people moving to which centres are gaining the most?

Jesse  

Calgary and Edmonton, Calgary and Edmonton. And you know what? It’s interesting. For a long time. You didn’t you had a real problem with downtown condo supply. And both of those markets, they just over built. And because of that condos are extremely affordable. So we’re having that the these young people come in, they want to be downtown, they want to be in the scene and they can buy a really nice like 1000 square foot condo, right by the Saddledome right by downtown. Three 350 under 400. Yeah, yeah.

Erwin  

Can you build it at that price? Ah,

Jesse  

good question. I don’t know if you can now. Like a lot of these were built during the last boom. So they were they started their groundwork, and let’s call it 2010 1112. And then a lot of them had to convert to rentals. A lot of them, they just shelled them like there was a big supply issue for a long time and just drove those prices down. So they don’t know what the cost per square foot is these day on days on them. But finally we’re eating through the inventory. And we’re starting to see the potential for some new residential developments downtown.

Erwin  

Fantastic. Oh, yeah. Cuz my social media is flooded with Toronto brokers promoting Calgary condos.

Jesse  

Yeah, yeah. Which, you know, is it’s always like, as you as we all know, real estate is so localised. And it’s always worrisome when you have odd talent expert promoting something that is so Oh, you’re gonna anchor somebody to be there, you need to feel it and see it and know your neighbourhoods. And we haven’t had speculation in Alberta. And that’s another reason why prices are so affordable. So it’s a bit scary to hear that story

Erwin  

of Oh, you don’t see it? Oh, yeah. They don’t target you. Right. So they target me?

Jesse  

Yeah, although I’m sure I’m sure their borrowers, their clients will will start calling us right and say, Hey, I’m gonna buy this on spec. And we don’t work with speculators. So

Erwin  

yeah, we just see, you know, work with new pre construction buyers. No, although, although I

Jesse  

shouldn’t say that, because what we what we will do is the day, they’re like, when you’re ready to buy, right, like, so we land on market value. So a lot of what we did in in Ontario is, hey, I’m gonna, I’m going to buy this, and I’m going to immediately sell it, and the bank doesn’t want that business from me, yet I bought it at, I’m going to use easy numbers, I bought it at 500. Today, it’s worth 650, we’re going to lend them the purchase price, like we’ll lend them with literally nothing down, and then they just sell it make their money. So that we will do when the value has to be fully realised we won’t give them a commitment today or so if they do get lucky enough, or even a lot of people like if I were just putting myself in their shoes, my wife and I were buying a house that we anticipated to live in, and it went up a quarter of a million bucks in a year, we probably wouldn’t end up living in it, we’d probably take the money and and deploy it through investment. So we get we get why people do it. And we’ll support that when the real value is there and, and our risk is protected.

Erwin  

Alright, so you’re also bridge, you want to provide bridge financing as well here.

Jesse  

In Iran, we our goal is to provide short term Mortgage Solutions. So it just so happens that the bulk of those short term Mortgage Solutions are to real estate investors. But when when we can bridge deals like literally, we’ve lent our money out for two days, we’ve left it over two weeks, and we just price it so that we make sure it’s profitable for us and, and price good enough where it makes sense for the borrower to use our money. But if we can bridge deals, we’re all over it. And again, because we move so quick, a lot of times what happens is they think the bank is going to participate in the bridge 11th hour the bank says no broker, a borrower can come to us and get a commitment same day, and we can lend it out tomorrow. So we built a business to support those opportunities.

Erwin  

All right, let me just interrupt you. Where can people get more information on Calvert? Because that’s actually I’ve, for the first time actually started hearing that where people who couldn’t get their bridge loans. So So where can people find out more about Calvert?

Jesse  

So Google is always easy, just Google Calvert home mortgage, and then we have a really great website, so you can visit our website chmic.ca Calvert home mortgage investment corporation is that’s the abbreviation for.ca. The majority all the information you’ll find on there is directed to our borrowers. We don’t do any mass advertising. We’ve nothing on our website for shareholders. It’s pretty exclusive. Exclusive less than invite for that. But yeah, Google calibre home mortgage, or ch nyc.ca. Everything on there is geared towards educating borrowers and brokers on what type of lending we do and how we can support them. We have a really great Instagram, Calvert home mortgage. Again, it’s all about education, we got three case studies will do, will roll out the clips that you and I worked on. So we make sure our audience is, is getting some benefit from from the work we’ve done here today. All of my underwriters and myself are available by email. It’s just, it’s Jesse at ch fmic.ca. So yeah, instead, we have a YouTube channel, we haven’t built it out as much as we should, we do have Facebook as well. So you’ll be able to get a hold of us by by any of those means, right?

Erwin  

I’m just saying email is better than a Facebook message.

Jesse  

Emails, great, phone is great to phone is great we pride ourselves on you will never not get a human during work hours. So we have great receptionists who will always answer the phone and know where to direct your call. I then we have a team if you’re looking to borrow money from us, a team of underwriters led by Sherwin, Garrett and Rob, who have a lot of support. And somebody’s always there to take your call to work through the details to work through the opportunity and and get and move the ball forward in real time. So voting is is great to

Erwin  

just see you guys fill that gap. So for anyone who’s new, no one fills this gap. As far as I know. There’s lots of like the private market, private lending market is generally very, extremely fragmented. Right? It’s very, it’s all small operators, like this is you guys are way bigger than almost everybody in this space. You’re not bigger than like a Bay Street bank, obviously.

Jesse  

No, but but for the short term, residential were the biggest for sure. There are competitors to us that focus on more the longer term stuff like basically, they’re all to be lender. And there’s a lot of good borrower, a lot of good alternative lenders and mix for that type of product. But but for the short term, we want to be the best in class and for really supporting real estate investors, we want to be the gold standard, we want to continue to build resources, tools, platforms, for them for their success. And what what we talked about earlier, as we know that the market for that is huge. The need for this type of investing activity is huge. They’re benefiting themselves financially, they’re benefiting the Canadian housing market and, and we just want to continue to grow and scale this thing in support of others.

Erwin  

So Jesse said you’re here to solve problems. Thankfully, I haven’t experienced it myself. I’ve had some challenges with with B lenders, just all these last minute requests, like literally one B lender called me the day of closing and said, you know, you’ve now been wire novom wire knob and tube wiring in your house like yes, that’s probably provide you the contractor quote to remediate it within the next 30 days. Okay, just wanted to make sure you knew like, but like before that Neff, no one ever followed these things up, right? Like lenders were easy. But now I’m even hearing that certain lenders aren’t even closing on time. Or not just pulling this pulling on, like appeal of love and power, right? Is Calverton, like a Plan B, then in this case, because typical B lens I see are usually one year, that’s not something I was playing, or

Jesse  

we should be the if you’re flipping a house or when you should be the plan A, and we want to we want to make ourselves the plan A, in some instances, yes. You know, be lender, you may be able to save some money on the financing. But in terms of that effortless experience, they don’t know your business, right. And in most instances when you’re really fully transparent with them, they don’t want your business. So with us is, is we want it we crave it, we understand it. We’re never going to be the pricing that a be lender that a home trust that an echo that an equitable bank offer.

Erwin  

Oh, but you might not get it.

Jesse  

How much stress is if a deal falls through because of your financing on the 11th? hour? So yes, will we be your plan B for sure. But our goal is when we get to deal with you and the plan B that will become your plan a

Erwin  

really good point. Yes, it’s good to know I call her back then because the property I was talking about I bought in like 2019. Right. And my intention was to renovate it and then get a new mortgage. So the reason really, I didn’t need to study the 12 months, I needed maximum six months.

Jesse  

And even if you need 12 months or when we extend our six month term at no cost to you, like as long as you’re as long as you’re paying your bills and making progress on the project. Yeah, we’ll extend that as long as you need are going to put you in in a position where where we’re jeopardising you or the project as long as you’re performing so, so yeah, for certain like a lot of our Our best clients, we’ve been that plan B, but we show them how much we understand their business, how effortless when we say it’s a commitment, it’s a commitment. More instructions are with the lawyer we have best in class lawyers who understand your needs, we reduce costs through that we don’t need appraisals. So have you ever gotten an after repaired value from an appraiser? How hard was that process? They’re not, they’re not educated on giving after repaired values, where we’re literally Our appraisers, our in house valuators are doing 40 to 60 after repaired value appraisals a week. That’s a lot like we know the market, we know what what the value add looks like. And, and a lot of times, we’re going to act as partners with you, in a sense that will challenge you on your assumptions and hopefully make each other better, and ask you if you’re missing something and kind of be that second or third set of eyes for you.

Erwin  

Right, like telling me why don’t even told me 12 month finance on I don’t need it. I think I’d put up 35% to

Jesse  

35% if you need to exit early, like when you improve that if you’re burning it, and you want to exit early, there’s a prepayment penalty, why not just like will literally make it an apples to apples approach and say, here’s why we think you should deal with us. So

Erwin  

we there’s actually a rental I needed an earlier exit. Anyone who does do rentals knows exactly what I’m talking about. So I’m not gonna explain it. If you don’t like incriminating myself, now I’m caring. So what’s your crystal ball telling you? Is the real estate market falling apart? Are you guys gonna lose all your money, you have to tell your investors that it’s all gone?

Jesse  

Well, it’s telling us that that’s definitely not the case. It’s telling us that we need to remain, we need to continue to stick to our business practices, which is lending to the best borrowers on the best properties in quality markets, in terms of the real estate market as a whole. You know, Ontario is very different than Alberta, we feel much more strongly that Alberta will will hold value through this inflationary period, values are likely to continue to drop in southern Ontario throughout Ontario, just because, you know, the easiest way to look at it or when is look at the markets that went like that had massive increases during COVID. A lot of those increases are going to come off because that was purely are a lot of it was really inexpensive money. So yes, there should be some appreciation because we’ve we’ve had economic growth we’ve had we’ve had population growth, but what we’re doing is looking at the markets where we’ve seen the biggest increases. And we’re saying let us estimate what should have been a 5% increase compounded, right. And the rest of it is kind of potentially at risk during that during that two year COVID period. So we just continue to remain diligent on our underwriting continue to serve the right clients were steadfast on lending into Ontario, on the right projects in the right market. So that’s what our crystal ball tells us, there’s still money to be made. And when others are greedy, be fearful. when others are fearful, be greedy is where we see the best money is how we see the best money operating. And during this time of fear, there’s going to be opportunities.

Erwin  

Yeah, and then offset to that the gentleman who’s responsible for that, quote, he has 25 billion in cash and 75 billion in treasuries. So that’s 100 million billion of cash and cash equivalents. What I find that that’s get lost, often gets lost by like internet and social media and Warren Buffett, they always focus on what he’s holding, and how much of it without including cash, right? So 100 billion in cash would be his second largest position after Apple stock. Right? So that’s what the smart money’s doing,

Jesse  

ready to deploy, ready to deploy, ready for fear.

Erwin  

Right? Versus a mistake I think a lot of people made is they agree they’re buying when, when everyone else has been greedy?

Jesse  

Yeah. And we’re, you know, we’re early days into this. Right. Like, it’ll be really interesting how the developments that will occur in Ontario because of the fact that essentially, you haven’t seen it in 20 years. And and people are saying was a blip? Yeah, people aren’t conditioned and it wasn’t it was a blip like

Erwin  

it was a blip because we know supply.

Jesse  

Yeah. So so there’s going to be opportunities and it’s it’s early days, like you mentioned about you you’re we’re starting to see some judicial listings, we call them so some Foreclosure Listings. That’s what we call them in Alberta. Our sale and yeah, there’s gonna be opportunities for the people who have the dry powder who have been who have been diligent, who haven’t been speculating who haven’t, you know, laid it all on the line. Always make sure you have capital and resources for the next good deal. And so crystal ball is continue to do your homework, continue to understand what what opportunities are, and look to take advantage of them as they come up.

Erwin  

And then what do you think about interest rates? When do you think what do you think we talked about? We follow it fairly closely. So I’d imagine so more than the average Canadian,

Jesse  

it sounds like through the next year, we’re gonna see around another 125 basis point increase. So we’ll likely see half of that next week on the 2675 dips, and then maybe 25 in December, and then another 50 through next year, at some point, the way we get out of inflation is by causing a recession. Although our central bankers seem to think that they can wave a wand and get a get a soft landing, although if they could do that they should wave the wand two years ago, when when inflation started to rear its head. So we’re seeing quantitative tightening, eventually, interest rates topped out because we have economic issues, and we’ll see some quantitative easing. But you know, if you look back historically, rates we’re at right now are nothing new rates right now are still not are still neutral. Technically, they’re not even to the point where they are so restrictive, that they should be pulling back the economy. We’ve just had a generation, myself included that is just really used to relatively inexpensive that and inexpensive mortgages yet. That’s not the way the economy typically runs in terms of historical.

Erwin  

It’s definitely fascinating times you see a couple governments have already gone back to quantitative easing. Like England. Yeah, like Turkey, like turkey. So I had like today, they’re starting to print more money now, too. They capitulated pretty quick.

Jesse  

Yeah. So a bit, but it does sound like our central bank is really serious about inflation like it does. It absolutely harms a lot of people. And unfortunately, it harms the most vulnerable most. So it’s something that is ugly, but needs to get done. Oh, absolutely.

Erwin  

Otherwise, just think what our government salaries will be.

Jesse  

Alright, salaries or house or food, you know? Yeah,

Erwin  

yeah, they’ll all ask for bigger raises, and then we’ll all have to foot that bigger tax bill, they’ll be bigger than inflation.

Jesse  

Yeah, it’s scary to think of what long term inflation and how things compound themselves could look like. So it’s good to hear our central bankers are serious about it. Although it would have been nice again, if they had a crystal ball. But it’s remarkable how many people were worried about it two years ago. They said it’s transitory like, you hope that we have the smartest people in the right positions, and they weren’t willing to take action when they should have.

Erwin  

Yeah, for anyone who doesn’t. Like just 12 months ago, inflation was like 4.4%. So what happened to our 2%? Target? Yeah, double what it should have been. Exactly. It was double what it should have been. Nothing was done.

Jesse  

Whatever, when it was transitory. Don’t worry, but here we are.

Erwin  

So yeah, so Jesse, I’m really disappointed. We just we agree on way too much. More discourse. But yeah, I’m not surprised Alberta would outperform, at least in the short term, it’s been depressed so long. You know, I don’t like saying it is because the only implication that that goes with it. The analogy I use for Alberta, for example, is in the US. For example, we’ve seen the mass exodus from like California, New York to like Texas and Florida. I don’t want to call Alberta, the Texas and Florida, Canada. But in terms of affordability and tax, less taxes, like it makes so much sense. So we’ll see. Well, I can’t see why we wouldn’t see more immigration and interprovincial migration to Alberta. You know, people naturally go to where it makes sense. But yeah, actually, is Edmonton and Calgary pretty interchangeable for investment. Like say your say your you know, ignorant me non Oakville, I won’t invest in Alberta. Where do I start?

Jesse  

You start with so so you start I think you start with the two biggest populations which are which are Edmonton and Calgary. In terms of a population based in the greater area. They’re very similar, although they’re different markets. Calgary is the second largest corporate headquarters to Toronto in Canada. So we have a lot of white collar work, a lot of highly educated professionals in finance, engineering, accounting, and the such technologies. Well, Edmonton you have so the average earnings in Calgary are higher, and it’s a lot more private businesses. Whereas in in Edmonton, you have a lot of government jobs in Edmonton is the capital of our province. So a lot more public work is done there. It’s also a lot more of the oil and gas service companies are based out of there. So blue collar where They’re doing technical machine work, building, fabrication, those type of opportunities. So it is quite different in internet and then so you have a lot higher amount of higher end houses in and around Calgary and Edmonton, although although Edmonton has a lot of a lot of wealth, but it’s it’s not as white colour, as you would see in Calgary. So prices typically are less Oh 5% less than in in Calgary and Edmonton. You have much more stability in Edmonton because of that public sector, where, when there’s big downturns in the economy, Calgary is affected a lot more than Edmonton is. So you see a lot more stability in Edmonton. So, it depends on what you like, and and you could you know, if you like stability, Edmonton is definitely the market for you. If you like more mid to lower end pricing, Edmonton is the market for you. Whereas Calgary, you’ll see some higher end stuff and you’ll see more fluctuation. So you have to be a lot more on the trends in order to make money and protect yourself in Edmonton area in Calgary than you do in Edmonton

Erwin  

as a danger and Ontarian I think I’d rather live in Calgary I’d rather invest in Edmonton.

Jesse  

Yeah, that’s a good point. We have definitely Edmonton the climate is, it’s three hours north, you don’t have we have these in Calgary, these mountain effect weather patterns. So they’re called Chinook. So you’ll see a day in January where it’s minus 25. The next day can literally literally be plus five and sunny. Edmonton doesn’t get that to the extent that we do. So the weather here is better, we’re closer to the mountains, Edmonton, you’re kind of up in the in high prairies and you have a beautiful river valley. It is a beautiful city. I don’t want to disparage it by any means. But the weather doesn’t compare to copy, that’s for sure.

Erwin  

Just the apologies for jumping all over the place. Since I don’t come prepared with questions.

Jesse  

That’s alright, that’s alright. I’m enjoying this a lot.

Erwin  

Since investors listen to this show. Many are always interested in lending. Are you accepting funds to lend out?

Jesse  

Yeah, we do accept funds to lend out. So I’ll kind of start from the configuration of our fund.

Erwin  

We, I’m sure people have questions like, you know, Where does money come from,

Jesse  

which I’m happy to answer and happy to explore. So our money is so I mentioned or the book size right now is 330 million of it, we have $130 million from a syndication of major banks in Canada. So they’ve given us a line of credit in which we borrow from them at an average of let’s call it prime plus point 5%. And we love that partnership, because it gives us a really long term secure source of capital at a very inexpensive, relatively inexpensive rate. But our we’re a fund, we’re a mortgage investment corporation. So we have shareholders and our shareholders are high net worth individuals, family offices, and investment fund managers who give us the other $200 million. Our goal is to provide the best possible risk adjusted return to them over our history of 40 years average return has been 13%. last 10 years is how I like to look. Or better yet, last 13 Because then that includes the financial crisis. Well, one of our main, one of our main tenants is to protect capital first. So if experienced, we can make more money,

Erwin  

because of experience going through like Dogbert has downturns because of the oil markets.

Jesse  

Yeah, we went through multiple big downturns. Right? So if you look at the last 13 years, which includes the financial crisis, where our returns were, were brought down, but we did protect our capital, we’re at right around 10%. Last year, we returned to our shareholders 12. And anyhow, that money comes from high net worth individuals, the the minimum standard to accept capital for us because of how we’re regulated. We’re regulated.

Erwin  

Right? Yeah, yeah. So Fly By Night business?

Jesse  

No, no. And because of again, like the banks, there’s a lot of rigour around that there’s a lot of reporting, in order for us to secure that line of credit, took us a lot of work a lot of time building relationships, and we report to them basically, our whole portfolio, they look at our underwriting and our risk. So as a shareholder, I’m a me and my wife put the bulk of our, we put all of our RSPs and TFSA and let that compound into the fund. I love the fact that the banks are putting us through that rigour. Not only for the fact that we can leverage it and provide it a really good return to us, but it’s a lot of rigour. We also have an independent board of directors, the only non independent is our founder, Everett Keller. He’s our chairman. So I’m all over the place now because going back to your first question is do we accept capital? Yes, we accept it from higher net worth individuals because of how again because of how we’re regulated, so

Erwin  

it’s accredited enough or

Jesse  

Yeah, yeah, accredited. So you have to you have to Have a minimum net worth of a million dollars net financial or earn $200,000. Ideally, we want to grow our investing base with investors who are sophisticated, and who see the value in what we’re doing, and want to participate long term. So we want to continue to work with individuals and families that that want to deploy larger sums of capital with us for we plan, by the way, to grow our fund from 330 to a billion dollars in the next five years. And to do that, we’re going to need about $300 million of new money. So we’re always out there introducing and socialising our investment with the more sophisticated the better. So the more we’re dealing with investment fund managers and the big family offices that have good counsel, that’s who we want. Now, that doesn’t, I don’t want to have your listeners think that, you know, being a millionaire isn’t enough to invest with us, because we will entertain that. But but we’re looking for strategic shareholders that that that we can we can grow this with?

Erwin  

Is there a minimum that someone has to be able to invest?

Jesse  

No, no, no minimum, you know, we might say no, to some people, based off of again, just philosophical differences or long term, but for instance, we work with some of the some of our smaller investors, we work with a lot of great lawyers, right, and they get to see kind of under the hood on on who we are, how we operate, what our processes are. And they’ll ask us, hey, Albert, tell me about you as an investment product, and we’ll let them know. And they’ll say, Yeah, I’d love to put in $80,000 of TFSA, we’ll gladly accept that, we treat that as a compliment. Same as realtors, same as mortgage brokers like those would be our smaller investors. But when our industry partners are coming to us, too, we treat that as a huge compliment. And we will go the extra step to accommodate them providing their credit. But we’re definitely not a general public type investment product. And nor should we be, you know, we’re we some of the risks in investing with us are definitely the lack of liquidity, we only provide redemptions once a year, we are a private placement. So you know, we’re not publicly traded, we don’t have that we don’t go through that. That rigour. We do have audited financial statements, but so the general public shouldn’t be investing in us and and, but for those who are accredited and and see value in us, we we want those phone calls, we invite those phone calls.

Erwin  

I think, from my experience, I’ve seen so many investments go sideways. So I’m like scared of anything that’s not regulated, or Yes, regulated under OSC or Canada or

Jesse  

1. So the Canadian Securities Administrators are, are the ones who provide the broad umbrella of regulation. And we’re considered an exempt market product. We’re also an investment fund manager. We’re licenced as an investment fund manager and a portfolio manager. So we have various regulations under that. And then for every province in which we, in which we invite capital from. And right now those provinces are British Columbia, Alberta, Saskatchewan, and Ontario, we have to report to those provincial regulators. So if I were to accept or wins RSP money, we’d have to file a report, we’d have to make sure that that we are we’d have to file a report saying, here’s the trade OSC here’s your win, we’d have all your documentation, your, you know, your client, all that and be responsible for ensuring that we’re, we’re meeting their guidelines. And we take, we take all regulation, very serious, we see. We see a real horse, but this is not true. Like you the ones that blow up. Usually they’re not taking it serious. Usually they’re there. They don’t understand why it’s important to raise money from people who, who shouldn’t be participating in investments like this not Not, not mine pie.

Erwin  

Taping, offering random random is transparency, just proper disclosures. Those are important things. Those are critical things. Yes. So yes, we’re saying that no, but man, there’s so many large funds syndicated mortgages on developments that were not right. They tried to regulate, they thought they could be regulated as mortgages. That that was the

Jesse  

areas that still exist in a sense in Ontario. Like in Alberta, the Alberta Securities Commission came in in 2010. And said, any trading and mortgages outside of Erwin lending his own money is regulated. So a syndicated mortgage has been a regulated activity since 2010. Whereas in Ontario, it’s not yet and you still see mortgage brokers putting together essentially fairly complex financial instruments that carry a lot of risk. And you have Mamaw putting $25,000 into a second mortgage at 80 plus percent. That’s something that I worry about as the market turns. And I think we’re gonna hear some horror stories and hopefully, it catches the eyes of the regulator and we put some more robust regulation around that activity.

Erwin  

Deb, I posted something about that just this week about those syndicated mortgages, a large development funds sure look a lot like investments that don’t look like mortgages to me.

Jesse  

They are absolutely investments and need to be treated as such,

Erwin  

and then have hence regulated under a Securities Commission. Yeah, yeah. What you are, yeah, so many people took on too much risk. Again, my criteria now is has to be regulated.

Jesse  

Yeah, that’s a good start. That’s a good start.

Erwin  

Which is funny, because like, we’re no, we’re friends with lots of entrepreneurs. And we do not like regulation. But I’ve seen way too many people lose their shirts in non regulated investments.

Jesse  

Yeah, like regulation to a certain component, right? Or investments, there needs to be some guidelines and rigour around that, you know, so regulation is important to an extent, too much is going to thwart economic activity, too little is going to create risk.

Erwin  

And it’s reasonable for you, in your experience, because you have to report to a national body and each provincial body.

Jesse  

Yeah, it’s, it is very reasonable. One thing that, you know, one thing that gets me a bit is we look at concentration risk. So we don’t want to see any of our shareholders having more than 10% of their financial assets with us. And it’s tough telling, telling an individual who has $4 million net financial assets, that, hey, you know, going to 500,000 with us is not wise, and here’s why. So, so So that’s kind of the, the biggest pushback I get is that, or even, you know, let’s say you have a young, super smart budding lawyer who’s making 250 grand, but only has maybe 250. Today, I’m likely is going to borrow strip that in the future, only as 100 to say that, that he shouldn’t be able to invest 10 grand, what he what he or she sees, is, so yes, there’s always going to be areas where we’re like, ah, is this this is prohibiting economic activity, but for the whole, we don’t see much issue, it’s not a huge burden, it is somewhat costly. Like, it creates a barrier to entry for new market participants. So because of, in order to be properly regulated, from the real estate board side of things, from the security side of things, from audit side of things, it’s tough to operate a mortgage investment corporation that doesn’t have more than $20 million of assets under management. So, you know, I don’t like that because it’s, it’s impacting new talent and new strategies to our market. It’s kind of favouring the incumbents, and, and favouring more and more amalgamation. But the smart people know how to get into the market. So they’ll figure it out,

Erwin  

hopefully, because the world needs more smart people.

Jesse  

Exactly.

Erwin  

Amazing. Jesse, anything I haven’t asked, I’ve asked a lot.

Jesse  

You have asked a lot. And I’ve really enjoyed our conversation. No, it’s been it’s been great. We talked about how we land, we talked about who we lend to we talked about how we operate, we I really enjoyed our discussion on the market. And I

Erwin  

appreciate how you shared that you. You do your diligence on the on the on the borrower, because I think there’s a lot of borrowers out there that wish they had gone through to have to jump through more hoops before they got their money. Yeah, that’s

Jesse  

one of the biggest things is is that LeBor interview and really, if we don’t see them being successful, we’re out. But we know for a fact that when we were doing that, even now, like you see somebody that watches too much HGTV, they have capital, they have a loose plan that the plan is not paid. Property is not paid, we’re gonna lose money. We say no, they find the lowest common denominator and they lose each other’s money. Which sucks. Which sucks. But the the invisible hand of the market will deal with that, like we talked about what’s happening in Ontario right now hasn’t happened in 20 years. And some people will learn some lessons. Unfortunately, some of them will be expensive.

Erwin  

It’s really sad, but it’s the market that’s going to shake out the weaker hands. It’s just you know, yeah. All right, Jesse, thanks so much for this. And then one last time, I’ll have everything in the show notes in terms of contact information, your email, your cell phone number, your cin number, your home address, website, one last time the website

Jesse  

see hmic.ca

Erwin  

Fantastic. And you guys are Canadian. We are Canadian. About like Saudi money or something.

Jesse  

That’s a good point. How we raise money. It’s all Canadian. We have some Canadians who are now Bahamians, that invest. We have some Canadians that are now Costa Ricans that invest but it’s Canadian capital.

Erwin  

I want to I want to meet these people. I want to be their friends.

Jesse  

They’re really cool people. That’s something I love about my job is that I get to meet so many cool people I get to hang out with guys like yourself. I get to meet entrepreneurs who have built some really spectacular companies and in turn wealth and get to bounce ideas and hear from them. I get to work with entrepreneurs who are just Warren could build their wealth in, in the form of flippers. So it’s a fun business that I really enjoyed participating in

Erwin  

and hear me a lot more of them November 12, at the wealth hacker conference in Toronto, which you’ll be at,

Jesse  

yeah, can’t wait, can’t wait. We’re really excited. We haven’t, you know, because of we kind of we entered Ontario during COVID, basically, and we haven’t been there as much as we should. And we have a lot of great, great fans and great partners. So we really look forward to the meeting everybody shaking hands and getting to learn more about each other and, and how we can work together.

Erwin  

Because Because it sounds like like my think the best like these next 18 months, two years will probably be the best opportunity for our generation. Yep. So folks need to be educated on best practices and, you know, be ready for this.

Jesse  

Absolutely.

Erwin  

Awesome. All right. Thanks again, Jesse. 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. 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.

To Listen:

**Transcripts are auto-generated.

Erwin  

Hello and welcome to another episode of truth about real estate investing in show and unfortunately start off with some negative news. Our community is rocked by another bankruptcy, Clydesdale capitals bankruptcy. And earlier this year we’d Epic Alliance class deals significantly smaller, thank goodness. But I believe we’re so early to have Clydesdales properties were in my market. And my whole team was buzzing about them we didn’t know it was there’s actually one of the sellers actually contacted us to potentially sell the properties for us, for them for them. But anyways, both of them were in mid renovation with asking prices, over 300,000 below what they paid. And those asking prices were well below market value. If you ever want to know what a professional wants to buy, what they offer on these were it not what the investors originally bought off market as they paid. Again, like I mentioned, they paid over $300,000 more than what they’re asking for. And they ended up selling between about 100 or 200,000, less than what they paid for. But they had spent a lot already in terms of renovations. And I believe one of the properties The deal was they would leave behind the kitchen cabinets that were already in the property. Anyways. So really unfortunate for for the sellers, really fortunate for the best investors that did those deals. I’m jealous. I wish they were mine. I do believe there’ll be more deals as we go. As speculative investors who speculated who over leveraged in the supply chain challenged market with rising labour costs, they’re going to continue to struggle, expect at least two more interest rate increases, the investment strategies going forward from here have completely changed based on economic fundamentals. And everything else is going on in the market. Bank of Canada just recently pivoted on increasing rates, Doug Ford’s recent legislation for triplex is by right there, the world is changing the war on Ukraine still goes, there’s a struggle pretty regular public struggle between the West and China, the crash in the stock market and crypto market currency markets, the recession is here. We might be in it. We’re not in it. It’s common in the real estate market to fear is high. From all indications from all the people I talked to, I think it can go higher, and I think it will go higher as interest rates continue to go up Europe has yet to face it’s worse as it sinks into recession, but tend to be greedy is really near possibly the best opportunities to be greedy since 2009. And every investor I know from those days regrets not taking more action. Don’t let these next 1218 months be what you’d regret for the next 10 years. You probably want to arm yourself with as best education as possible. Wealth hacker.ca for tickets and details. November 12. At the wealth hacker conference, I’ll be sharing my research. I’ve been working pretty hard on this. Because I have a lot of questions. I’m not an investor for the sake of investing. I am an investor because everything that I read in touch points towards the type of investments that China will be doing going forward. And I think you all know, my family’s well being financial well being is almost completely reliant on my ability as an investor. So you better believe I give 110% So I know our own destiny will be pivoting based on the current environment. And I’ll be sharing about what we’re doing all about. That’s November 12. On average wealth at the conference. onto this week’s guest. Oh, yes, again, wealth hacker.ca. For more details. onto this week’s show, we have Daniel Unsworth, who has simply caught fires to attending our 2019 wealth hacker conference. Daniel took the whole texting thing to heart. First thing she started doing after well actually, first off, just took the bus being not someone part of our community. She had no one to carpool with to the wealth hacker conference, even though there was a massive contingent from from Ottawa, who attended the 2019 wealth hacker conference. Daniel went solo again taking the bus. It actually made her carsick. But she managed to push through as you attended the conference. You’ll hear from herself that it changed her life. She started converting it based on apartments in her hometown of Ottawa, Ontario. And then she hired a coach. Someone she was introduced to from this podcast isn’t white Livermore, Susan. She’s amazing. Daniels and has now since then invested in vacation rentals in Turks and Caicos. She bought six townhouses. Yeah, six townhouses in Edmonton, Alberta, each with basement suites using really cheap CMHC moi select money. You probably won’t write that down and Google it later. CMHC moi select. Now she’s also investing. She’s invested in two part buildings in New Brunswick. And she’s actually bought a whole lot more since we last spoke into because I see her unit count just keeps going up on her social media. As I mentioned, she shot out over town cannon and she’s built a large Instagram following and she shares how on the show, and now if you’re one of those quality investors out there, or coaches looking to raise capital, or build credibility, I suggest you give Daniel a follow as the truth about real estate investing is there are bankrupt investors out there right now, both morally and financially, and they’re doing the same. They’re social media influencers, and they can raise millions of dollars doing it. But again, they’re morally and financially bankrupt now. So if you are good if you’re a good person, and you were good investor with who can who has experienced doing quality investments that will survive downturns like the ones where we’re in inflationary environments, high interest rate environments, then well, at least I that’s how I justify myself. And all the content that I myself enjoy put out, and there’ll be a lot more to come and 2023 for Terry and I, if nothing else, is sharing the truth about real estate investing. It’s a public service. So I give you Danielle Wandsworth. So, Danielle, you’re up to a lot. Yeah, yes. So you’ve shared like, going to the wealth hacker conference was a big catalyst for yourself?

Danielle  

Yes. Oh, my gosh, or when you know, I took a bus there, right. I know that. Yeah, I have a fear of long distance driving. And at that time, I had a scarcity mindset. So I didn’t think to even fly there. I took a greyhound

Erwin  

airport.

Danielle  

Oh, I know. But I bought a bus ticket. And I got like, sick. But it went the night before. And I got to my friend and I was so sick. I’m like, I gotta get better the conference is tomorrow. And after a few hours, it was fine. And then I went there. And just like, that was my first conference ever, I had never paid to go to anything like that. And so just listening to the speakers and how, you know, investing in stock options in real estate, and networking changed their lives, it really gave me so much motivation and education to leave that conference and start really researching. I was like, on a mission after that conference. And I did end up flying back, because I was like, I can’t take the bus back home. So my husband and I called him I was like, I can’t, I can’t, and he’s like, just buy a plane ticket. It’s fine. And so I did. But now I know better. I mean, there’s nothing wrong with the bus, but I got sick. So I didn’t want to get sick coming back home. But I just knew I had to get there. And you know, it was from your podcast, and you were promoting it. And I said, You know what, I’m just gonna do it, I’m just gonna go, I’m just spending money, and see what it’s all about. Because I was listening to your podcast on my walks to work thinking like, Oh, my God, like, this is not enough, I need to do more. And so I went for it. And it really, really was the catalyst to everything else. Because I was on this mission to change my life and get educated. It was crazy.

Erwin  

Daniel, straight up, like your story is exactly what we want from our people.

Danielle  

And that’s why I’m such a huge promoter of your event, too, because I’m like, I’m the result of attending conferences like that, right? Like, I’m not special, I literally was walking from my bus stop to my office listening to your podcasts, which I’m sure tonnes of people do. Now, maybe just, you know, not on the bus, but maybe they’re at home listening to it or on like their way to running errands. But go to these conferences, and then it’s gonna be what you make of it. When you leave. What are you prepared to do? What actions are you going to take? How inspired are you to change your life? And if you are, you know, all these resources are available, every one of those speakers, like you could reach out to them, and they would provide you to reach out to them. Exactly. And a lot of people have that fear. And that’s what I had to like, they don’t know me, why would they talk to me, that was my mentality. And you actually had Susan on one of your podcast, and she really inspired me and she was doing exactly what I wanted to do. And that was my first time reaching out to someone on like, from a podcast, and I was so nervous. Or when I was like, oh my god, what am I going to say? People is so nice. I went to a website, I feel that her form and we had a Zoom meeting. And that was sort of like the beginning of like coaching relationship. And she also changed like the way I looked at real estate. And even now like I’m always saying thank you to her because I’ll go through issues and I’m like, What would Susan say to me, and I’ll work through that. So, you know, my message to people is like, it’s okay to reach out to all of these speakers. And people on podcasts. It sounds scary. But that’s why we’re on podcast is to educate and like share our journey. And just not to just push past that fear because that’s, that’s where I was, and I’m sure lots of people are in this exact situation where they listen to podcasts, but they don’t take any action because they’re scared that you know, they’re just this random person reaching out to a complete stranger, but that’s okay. That’s what we want you guys to do. Reach out and ask for help and get the resources.

Erwin  

That’s why we offer like free trainings here. Exactly. meet ups.

Danielle  

And I did I went to your free training to do remember, I actually flew there. This is what I mean. Like you guys have been such a huge part of my journey. And I remember after the whole bust right thing, this time you had a free it was a basement conversion, free training that you heard. And that’s exactly what I was looking to do with one of my properties. And I didn’t know how to do it. I just there wasn’t a lot of people in Ottawa who were doing it at the time, or that I knew of that were doing it. And then when I saw your free training on a basement conversions, I’m like, Well, I have to go. And I’m like, this time I’m not taking the bus. I’m just going to fly. So I took the whole day off work. I booked a vacation day, I flew there and then flew back the same day. And that’s when I was like, Okay, I’m doing it. The returns are there. It makes sense. I’m not the only one doing it. This is a huge thing in the GTA Hamilton area. I just didn’t know anyone everywhere in Ottawa. Yeah, it’s everywhere. Now, the time I just didn’t know. Yes, exactly. After I did my first conversion. I started seeing the strategy everywhere. So but that’s sort of what started my journey with the SDU. That’s what we call them here. But yeah, that’s how I kind of got educated was from your free training. Fabulous. Crazy, right?

Erwin  

Yeah, no, we’re unbelievably happy for you.

Danielle  

Thank you.

Erwin  

Thank you so much. You actually chose to attend to get educated and argued now is incredibly important to be educated. Yeah. And of course it take action at some point, because it is scary out there. I think the stock market hit a hit a new one year low. 52. Week low. So I’m sure people are scared. Yes. Are you scared? Okay, let’s actually let’s actually talk about what you got going on, because you have a lot going on. Okay. Sure. Sure. Let me just lift off what I know. Okay. Does you have vacation property that are investments? Yes. In Curacao, where are they? Caymans Turks and Caicos Thank you. Yeah, Turks. Okay, how many properties in Turks

Danielle  

so it’s three condos, but they were sold as one package deal. So it’s three bachelor condos, but they’re all side. But it was one huge unit and the previous owner had severed into three bachelors. And those are vacation rentals. Yes. So this one, we have an active partner. And he He’s a Canadian, and he moved there and he’s the one managing the day to day Airbnb operations. So we’re passive on this one. But it’s been such a great learning opportunity just to have like boots on the ground going through the whole financing process. And yeah, so now I’m always promoting Turks and Caicos. I think it’s such a great place to invest. And it’s not far it’s like a three hour flight from Toronto. Super easy. Yes, you should come Okay. Florida. That’s right. That’s right. It’s super convenient. Like for me, I have to fly to Toronto. So it adds a couple of hours, but it’s super convenient. And it’s beautiful. It’s no taxes. It’s a British dependent territory. It’s backed by the US dollar so so many so many advantages and that’s kind of why we chose the Turks and Caicos no hurricanes hurricane free Yes, there was there was a hurricane that went by but

Erwin  

just one never sorry I’ve I’ve know nothing about Turks and Caicos. They

Danielle  

do have hurricane season. But you just have to prepare like everywhere else and the where we are situated. It’s pretty I want to say like a safer zone it’s not right by let’s say the ocean it’s you know a bit of a maybe five minute drive so it’s kind of like sheltered in a little I want to sit on Cove almost but I’m the one that just went by we were our properties were fine. We went to check them out. So it was okay.

Erwin  

We were you went to check them out already.

Danielle  

Well, our active Well, we went when it was for the we went for the closing in May. Because I just wanted to I thought it was really exciting if all the investors because the other investor was from Toronto as well. And we all went there for the closing and it was amazing just getting to we got to stay at the condos right because we took over the keys were like well might as well stay enjoy the property and then we can work out the kinks. So whatever needed to be fixed before we listed on Airbnb, we did that that week. So it was really good. We were like sort of the guinea pigs for the condos.

Erwin  

Okay. Yeah. Are you able to share some of the high level numbers what got you like what got you into the investment?

Danielle  

Yes, I know you like numbers. So I actually wrote down I wrote down a bunch of the numbers for you. So this one was about what what do you under like the price it was about? Yeah, about 500 USD for all three for all three? Yeah, it’s good. It it was an off market deal. And that’s the beauty. So our partner Mark he because he lives there. He has a lot of local connections. So he’s able to Get off market deals from like realtors, real estate lawyers, friends. So it’s been awesome. And so this one was 500,000 for all three, and we had to put because the financing is a bit different. We had to put 50% down. And then we mortgage the rest interest rate was about 6%, which is not yes, so not too bad. And the fact that there’s no taxes is amazing as well. But you do have to pay a one time tax is called a stamp duty. So it’s just a one time and then after that there’s no like annual property taxes. There’s no capital gains if you sell as well. So lots of benefits there. And their projections for this one, at 70% occupancy, the total ROI is about 29.4%. Sorry to say 70% occupancy, this is 70% projection.

Erwin  

Got it has been going so far.

Danielle  

Really good. We were I think like 90% for the summer. Really? Yeah, it was the time. It’s not supposed to be but it was I know. But now it’s started to decline a bit for September, October, which is normal, and then high season will start vary. But we had a really great summer.

Erwin  

Right. Okay, but just for listeners benefit. It does feel like a bit of a revenge travel time. It may not last forever. Yes. In terms of terms of vacation property demand. We’ve been locked up for so long. So just like they have all saved up money to go travel. Exactly. I’m going to last forever.

Danielle  

And that’s okay, because that was just we we realised it could just be a fluke, right. But our projections are still at the 70% occupancy. And the fact that it was like over 90, we just will take it as a bonus. Exactly, exactly.

Erwin  

Maybe squirrel it away. Yeah. Exactly. That’s amazing. Yeah. Can you share how much it is to rent tonight?

Danielle  

So it depends. The average is about it could be around 200 to 250. Yeah, it’s not bad at this isn’t USD? Yes. Yeah.

Erwin  

Like, no. Isn’t that a hotel around the same thing? Yeah.

Danielle  

So there’s a there’s a shortage of supply just like everywhere else. So a lot of times people will go there. And either the hotels are not available, or it’s too expensive. So they’ll do air b&b. And there’s also actually a shortage for long term rentals, because all these hotels are being built, and then the employees don’t really have anywhere to live. So that’s something that my partner Mark and I have also talked about, you know, maybe switching to finding or building long term rentals for hotel employees.

Erwin  

Yeah. All right. Because you you invest in so many things, and you need to move on. Okay, you do apartment buildings, too?

Danielle  

Yes, yes, I do. So that’s kind of where I shifted from single family homes, to multifamily. And in the vacation rentals were sort of a bonus. But yes, apartment buildings, it’s more stable. It’s not super dependent on like comparables, it’s more so on the building itself. So that’s why we really like it as an asset class. And so we did close on quite a few this year. It’s been crazy. So we closed on a 15 unit, I think back in April, with another active partner. And then the most recent one is the 50 unit. But that one is actually it’s being led by my my or business partner Adriana ostapenko. And she’s the lead on it. And she’s asked us to come and support in terms of like the capital raising and because it’s such a huge project, you have 50 units, we’re turning them over. So we’ll be supporting her and her business partner Ben on any of the extra activities, but the returns that once a full Burr, so two years renovating all units, and then the plan is to refinance with CMHC mortgage. Two years. That’s it. That’s the plan. We have already started working on it. So it’s like ready to go rocking a roll.

Erwin  

It takes three months to get a door done.

Danielle  

Doing it yourself.

Erwin  

Because it needs permits. So it takes

Danielle  

okay, yes, yes.

Erwin  

So where are these properties?

Danielle  

This one is in St. John. So most of the units have been in New Brunswick, we do have one triplex in Nova Scotia. So it’s been on the East Coast, just because the prices made more sense then, like me, we were looking at Ottawa for a long time. And then we just kind of shifted our strategy over to the east coast because it didn’t make any more sense to stay in Ottawa for us.

Erwin  

And how is the apartment building space in terms of prices? Is it still because I keep hearing from people for example, I’ve Dahlia On the show, just recently, it does not seem like there’s any motivated sellers out there.

Danielle  

No, no everybody so far that I’ve spoken to in the apartment building space they’re hanging on, they’re stabilising their properties, I don’t see any, like panic selling is it’s mostly unfortunately, it’s the one to four units. Those are the properties that are feeling that distress, mostly single family homes, but even the two to four, there’s a bit of stability there as well as long as you’ve bought. And it’s cash flowing. I don’t see the need to sell right now unless you know, your strategy was to flip it or something like that. But in the larger apartment building space, from what I’ve seen, or and the investors I’ve talked to everyone is stabilising and just they’re hanging on it continuing their plans for their burgers.

Erwin  

I keep all the apartment building friends I have across the country. They’re all like, even if the Seller is motivated. There’s several offers.

Danielle  

Yes. Yeah, exactly. It’s not quite the same space. I feel like it’s a separate world compared to what they all that.

Erwin  

That’s the way to put it. Anything. I totally agree with that. Yeah, this is nothing like a single family home detached

Danielle  

Exactly, exactly. Like both of these apartment buildings, the appraisal was higher than our purchase price. So we have a huge buffer already. So we’re not too worried about it. And we’ve we have great rates, the 15 unit, we have we got a mortgage for it was 2.5% for two years. So we’re we’re going to push through that. But yeah, I feel like it’s not the same world. I’m in a different bubble, almost. If that makes sense. Yeah.

Erwin  

Why do you choose passive? So I think I think it’s a great question for 17. Listeners,

Danielle  

why choose Make it at NAFTA today?

Erwin  

You will double with your popularity. Why? Because I’m sure many people ask the same question is you’ve done, you’ve done active with your own basement conversion properties. And generally those those struggling those have done really well. So why the decision to go passive? And also, did you exit any existing properties in order to move it into more passive investments?

Danielle  

No. So I am still active, and I am going into passive as well. But that’s because yeah, yeah, yes, yes. Yes, I love both. Like I love being an active partner, because I still have that fire and be right to like, find a deal and raise capital and stabilised properties. So to me, I enjoy that. So I still for me need to be active. And then the passive component for me is just essentially maximising my my time and leveraging other people’s time and experience and their deals as well. Like the Turks and Caicos deal for me, I’m a passive investor in that because I don’t live in Turks and Caicos, I don’t have the local expertise. You know. So that’s why I leverage Marc’s experience and his time. So that’s why I go passive, but it’s also if I’m like, I refinanced everything in 2021, like at the beginning, because all of my, my single family properties have gone up significantly. So I refinance. And at that time, I didn’t have my own active deals to, you know, invest. So I took that money and partnered up with other people who were active so that I could leverage their deal and their time. So that’s how my portfolio grew. Because I had this capital. I didn’t have deals for myself, but all the people came to me and had great deals. And I said, Why not, you know, if you’re going to own 25%, or 50% of a great deal and not have to do the work. I feel like I’ve already done the work. That’s how I got the capital to begin with, right. So I feel like this is sort of like part two, where I’m leveraging the money that I created with my single family properties, and now leveraging them into passive deals. The only one that I sold, I sold one townhouse in Ottawa, and I ended up using the capital for that one to invest with my sister on a pre construction in, it’s near Edmonton. And that’s going really well we just actually had it appraised. And it’s 300,000 More than when we put it under contract for isn’t that crazy? But what is he bought? Three it’s three townhomes but they all have lease.

Erwin  

So one townhome to get three, six. Yeah, so you sold one to get three, six. Yes, that’s right. Do you want a half? Yeah. So it’s kind of like you want three? I guess. So

Danielle  

which is still amazing. Yeah. We so we sold it. And then these three townhomes we bought the block, so it’s three of them with three ground floor units, which will make six total and you’re not going to believe this or when but we do got approved for CMHC you know their new product that they have 5% Down 50 year amortisation because they’re brand new. So we’re keeping two of the smaller one bedroom units for affordable rent. And so that with the fact that it’s gonna be like high efficient fi units, because they’re brand new, we met the other requirements to put 5% down and have a 50 year amortisation. It’s not crazy.

Erwin  

Can we get this in Ontario?

Danielle  

I don’t know. Maybe I think you could, if you have the right property.

Erwin  

Do you know the name of the programme? Yes.

Danielle  

How did you M I think ml I see if you go to the CMHC website. It has really great. Oh, yeah, it’s called MLA select. And they do a really great job of explaining all the different points, the breakdown, how much you need, everything. It’s super easy to read. You can even download the PDF fact sheet. So I actually recommend anybody that has multifamily that’s either a pre construction or they’re about to do like a full Burr, kind of what we’re doing with the 50 unit to look into this programme because you’ll maximise your leverage, right, get as much money out, you know, have the longest amortisation in the world and, you know, this is a game changer for apartment building owners and investors. For most

Erwin  

benefit, I just Googled CMHC MLA and finished it for me select exactly download sheets right there.

Danielle  

It’s super easy to read and understand. And it’s all based on point systems. And there’s believe the categories of fo affordable rents, accessibility and efficiency, like energy efficiency. Exactly. It is super cool. So when we close in December, we’re actually going to get money back because we had put 10% down when we put it under contract. Isn’t that crazy?

Erwin  

Sorry. Are you leveraging always to 5% down? Yeah, 5% on the board. Yeah, it

Danielle  

was and it’s still gonna cashflow. So we’re good.

Erwin  

This is wild. Okay, so yes, wild. Tell me about the the Edmonton townhomes. Sorry, you said. So there’s a six townhouses and they each have a suite. It’s

Danielle  

three townhomes. And then they each have one round unit. So it’s six total six dwellings total. And they also come with detached garages so in the back, it’s really nice. I’ll post the more pictures on my Instagram page for for the listeners if they want to check it out.

Erwin  

It’s beautiful. What’s your Instagram sir contests anyone’s looking?

Danielle  

Super easy to remember. It’s Danielle dot Unsworth UNSW. o r th,

Erwin  

you show up pretty quickly when I say

Danielle  

that’s good. I’m actually hosting a workshop next week to help active real estate investors learn to use social media to grow their portfolio, which is essentially what happened to me. And I’m just going to be sharing all the tips and tricks that I learned in the last year and a half to make their journey easier because I had to do a lot of like trial and error. I’ve had to ask like my niece for tips, because she knows what to do. You know, they’re 15, they’re much more. They’re much better with the iPhones and all the Tick Tock and Instagram features. So yeah, so I’ll be doing that as well. And I feel like I don’t really see anybody else doing that. So I’ve thought you know, it’d be really nice if I could put that together for all of her active investors in the community.

Erwin  

Okay, I don’t know what to ask next. Let’s finish off the townhome example, back to social media. Here’s your house. Townhouses cost.

Danielle  

Oh, well, for this one, because we bought all three, the total was about 1.2 5 million for all three, and it was just appraised at just over 1.5.

Erwin  

And so you bought new construction? What was the down payment structure on the new construction? It was 10%. All there all right away on site?

Danielle  

Yeah. I think it was like within 60 days, it had to be transferred. Right.

Erwin  

Did you fly out? You went to Edmonton?

Danielle  

No, no, we’re going to December 8 is the first inspection. We’ve been getting like videos and pictures and things and just updates from or agent but we haven’t physically gone there. But we will be going in December because I want to I want to check it out and meet some other investors that are there as well. Fabulous. Yeah. It’s amazing because again, it goes back to social media. We were able to connect with you know, local investors there and we actually ended up meeting another Indian So that bought the lot across from us. So when she went to visit her property, she took pictures of ours and sent it to us. Super nice.

Erwin  

Yeah, nearly so important. I think it gets a lot. I know, the whole are in this together, and I can say it, we’re not in this together. So whatever. Like we need to support one another. Because the 10 tenants aren’t going to support us. No, groups aren’t gonna support us. We landlords, we investors needs to support one another. That’s right, because when the pitchforks and the torches come out, good they coming for. So that’s why I’m over exaggerating, obviously. But we need to, you know, look out for one another as investors, right? Yeah, really, there’s no competition amongst one another?

Danielle  

No, I feel like everybody, you know, has their own strategies, their own markets, their own like niche. So it’s really, there’s so much I live in the abundance world now. Like, when we started this podcast, I was telling you how is in scarcity mode a couple of years ago. And so now I’ve shifted to the abundance mindset. So I just feel like there’s so much for everybody all the time, just no need to compete with anybody. Because you know, even with clients or deals, a deal will resonate more with you or a client will resonate with you more than the other person. And that’s how people find each other. Right. So there’s no competition, people will come to you, because they can relate to you. Same thing with deals, that deal is better suited for this investor versus another investor. So there’s no need to compete.

Erwin  

Right. I will just add, though, like, you made the comment about how you reached out to people, for anyone listening, you’re gonna reach out to people be nice. Yes. Don’t expect anything from anyone offer value.

Danielle  

Yes, I’ve had people offer their time, like they wanted to learn from me. And I remember one of my Instagram followers, or friends, now she was on mat leave, and she’s like, I just want to help you. One, I can do it one hour, a week, one hour a day, like, whatever you need, I’m happy to help. And when people do things like that you take notice, right? And so if an opportunity comes, you’re gonna reach out to them first because they sort of they made an impression they went above and beyond someone that’s just going to DM me with a question and, and nothing else, versus someone who is offering their time because they want to learn, and they’re willing to do it. So just so that they can learn. And if they’re if they eventually come to me and say I’m looking for this property, I’m going to put them on the top of my, you know, my mental list when a deal like that comes out, right? So I just feel like if you offer value, whether it’s your time or your knowledge or anything, people will take notice. And you might not know it, but it you know, it’s getting like it’s being placed somewhere in their minds, and they’ll come back to you whether it’s an opportunity, a deal or a partnership, you just never know.

Erwin  

Alright, at a minimum, like, share and comment on Daniel stuff on her Instagram. Yeah. Appreciate that. Yes. And

Danielle  

I love sharing other people’s posts. Like, if I see something that has really great value that I think other people will benefit. I share it whether it’s a course or an event, like a conference, anything I feel like oh my gosh, this would really help somebody. It’s shared. Because why not? It doesn’t really doesn’t take away from from us, right? It just adds it just adds to the community.

Erwin  

Okay, speaking of community, I noticed you’re part of several. Can you name which ones?

Danielle  

Yes, I actually I would love to talk about wink, which is the women investors network Canada. This is a community that myself and two other investors here in Ottawa, we co founded. So it’s Esther and at key. So we felt like there was a need for women to come together, support each other and be inspired to take action to invest in real estate or other investments. So we actually grew we only so we co founded this community last December. So it hasn’t even been one year yet. And we have grown to like so many chapters across Canada. So we have one in Vancouver, Halifax, one in the GTA. We have a chapter in Kitchener, Guelph, Waterloo, Ottawa here and then Calgary and we’re working on another one in another major city. And so all these women are coming together and talking about real estate, life, motherhood, like everything. And I feel really grateful that we were able to do that because there was such a need for like our first event. We had 50 women show up in December, and they were all just like, so happy to be there because we all feel like we’re the only ones in our circle. And we feel like you know, we’re crazy to talk about real estate and investing all the time when our friends and families sometimes are not interested right in listening to us. I’ve talked about that all the time. But when you find your, your circle your tribe, you don’t feel so crazy. Exactly. And we were able to do that. And so wink has really grown, you know, across Canada, we have some Vancouver all the way to the east coast and Halifax. It’s been amazing.

Erwin  

All your wing friends coming for November 12. Do you need your own wink discount code? Because then that way we can least sit you all together for exam.

Danielle  

Oh, okay. Yeah, that would be great. We could definitely talk about that. Because if it’s something that we can promote, because there’s women across Canada, who would you know, love the opportunity? For sure.

Erwin  

Where are you sitting? Because people want for you probably want to sit with you. Oh, I don’t know publicly. But yeah, the point is like, we can give you a discount code again, and then we can reserve seats for your tribe. Okay. See, obviously that CD together. Okay, amazing. All right. Well, cuz you’re gonna be in Toronto, you’re not always in Toronto. Right? That’s right.

Danielle  

Yes. I want to come more often, for sure. Because last time I went was for a mastermind. And I didn’t have enough time to meet with other investors to network and wait quarry to? Yes, yes. Yes, that was so that was the reason I went. I was for his mastermind. I think it was two weekends ago. Yeah. Yeah. Do we can go here? Yeah, it was two weekends ago. That’s right. It was so awesome. So many new new faces to events. So I feel like the real estate community is growing all the time, which I love.

Erwin  

It’s growing and shrinking, because a lot of people got hurt in this environment. You and I probably both know people, or there’s organisations that were really aggressive and the stress I taught, or just people naturally are aggressive, and just over leveraged. Literally talking to Dahlia, she was telling me how people are coming, asking her for help deal with their investments, situations. Really like folks who are 100% leverage paying, like over 10%. And then they also borrowed the money for the renovations. And they’re paying like 15% or more. Yeah, renovation money. And now they’re caught in this downturn.

Danielle  

Yes, especially flippers, right. Like

Erwin  

even burr investors who didn’t have the capital, we didn’t have enough cash. Right? We’re debt heavy over leveraged expensive debt. Like anyone could get caught that

Danielle  

Yeah. It is scary when you think about it. I mean, this is like, could be a whole other topic. But it’s also about planning, right, and preparing and, you know, having that huge buffer, like, we run our numbers super conservatively. And so, I know, like, it wasn’t something that people could have predicted, because, you know, if you were in that growth phase, and a lot of the money was leverage, you know, it’s hard to, to know, like, okay, like, when do we slow down? Or like, you know, the supply chain, that was a huge problem for people who are doing renovations to so it’s hard to know,

Erwin  

it wasn’t because we’ve been living through supply chain issues for last over two years. So I know that we have the supply chain issues budget based on the supply chain issues budget double the

Danielle  

time. Exactly, exactly. So I think it it’s about preparation as well. And then, you know, having that huge buffer, but yes, you’re right. I do know, a few organisations and individuals who, you know, got really hurt during this. And hopefully, like, you know, I’m sending them recovery vibes, because it’s really hard to shift after something like that, right.

Erwin  

I’m hanging on. Right. And Dell you mentioned like this one person with all this money borrowed had three of these. Okay, yeah. Not only being over leveraged on one property, they have three properties. Yes, that’s a lot. That’s a lot. One is a lot. I can’t believe three. Yeah, totally. Well, yeah. So where can folks find more information on wink?

Danielle  

Yes. So we are on Instagram at at wink so wi N c dot investors, and people can find us there. We also have a Facebook page. And it’s the same name women investors, network Canada. And that’s where we post our monthly events. So we have online events and in person events, and then all of the other chapters, they will be posting their own events as well, but it always will show up on the wink main page, which is on the Instagram page. Yeah, so there’s going to be events every month across Canada for our WINC investors. Super cool.

Erwin  

And then we touched on Korea Korea’s group you’re part of carries a certain name for it. There’s an A for Infinity something

Danielle  

infinite real estate results programme? Yes. So I joined chorus programme last year and it’s been amazing because I’ve been in real estate for a long time, but I’ve kind of been on my own you know, just winging it, learning from my own mistakes. because I didn’t have that education or that community when I started, like 1415 years ago. So by joining Corys programme, I was able to have that community and he is super, he’s just so knowledgeable and so experienced that he was able to help me set up, like behind the scenes and set up systems for my business. Because before I was, you know, I didn’t think of myself as an investor, I just thought of myself as a landlord. You know, I was a landlord and I had a couple of properties. But when I shifted my mindset to I’m a real estate investor, this is a business, I need systems so that I’m prepared, and I can scale and without those systems, it’s very difficult to scale when you’re doing everything yourself. Like I was the bookkeeper, the property manager, the marketing agent, the, you know, tenant screening department, so I was everything. I did it all right, but now I have you know, teams in place. It’s great. All my paperwork up today. I just love it. Like mortgage brokers love me because whenever they ask for paperwork, I send it to them within 30 seconds. I know exactly where it is because of my my books are super organised. It’s amazing.

Erwin  

Mortgage brokers hate me. Because I refer them to Cherry. She gets them answers.

Danielle  

Yeah, no cherry has been amazing to like she she was actually one of our speakers for wink. And the women love just listening to her presentation and just answering all tax questions, because some of us are beginners, so we’re, you know, not sure how to set it up properly. And she was able to give like a lot of great guidance. So thank you for that, too. Awesome. Yeah.

Erwin  

So you met her as a speaker. Hopefully, you can invite me to the golf outing.

Danielle  

Yeah, we want to definitely do more golf events. So next year, like in the summer, maybe we’ll have a couple more because it was just it was a huge hit. Yeah,

Erwin  

we’d actually like to come out of it in the winter as well. It’s on chain as both both of our bucket list to stay at the window. We’ve never been Oh, you are not from Ottawa, right?

Danielle  

You have to come. It’s amazing. They

Erwin  

haven’t skated it. I would say a lot. Ya know,

Danielle  

you have to come and you have to make sure you get a beaver tail and hot chocolate with the marshmallows. Because that’s like the whole experience.

Erwin  

Amazing. Yeah. Yeah. Yeah, we’re not sure. Yeah, this is probably the weather dependent. But you know, something listeners want to hear about that. Painting after today. What can you tell us about Ottawa investing? What’s going on in Ottawa,

Danielle  

Ottawa. So, although I think it’s being affected, just like everywhere else, because I’m talking in terms of like the single family homes, because there’s a house down the street. And, you know, it would have, I think it would have sold for over a million back in January or February. And now it’s asking for about 850,000. And this week, I saw a price reduction sign. And now they’re having open house, an open house this weekend. So I definitely see a shift here in Ottawa. But because I’m not in the singles and the two to four unit, my focus is on the larger multifamily or vacation rentals. It hasn’t really impacted me, per se, but I do see a shift just even like around me talking to homebuyers, but I feel like it’s a different world. It’s like the end user world, right people who are buying to live versus the investor world from the investor side, I do know of some flippers who are having a hard time selling at their projection. So they will be getting, you know, they’ll be taking a loss on some of those flips, which is unfortunate. Yeah,

Erwin  

I know, some flippers too, but they had planned for Plan B, which B to rented out the property.

Danielle  

Yes. Yes. So that’s kind of the only issue with that is if you didn’t plan well, for Plan B, let’s say your finishes were, you know, higher. You know what I mean? And then flipper got it? Okay. Yeah. So it could be an issue if you know, you’re choosing really high end finishes, because your plan was not really to keep it and rent it out. So now you have this beautiful home that was not really meant to be a rental, but you’re going to be renting it what your and you won’t be able to ask for like that high of rent to offset the mortgage. Right. So for that, I hope so. Or Yes, exactly. Every problem needs multiple exits. Yes. And but that’s what comes with experience in education, right? If you have like a coach or you’ve been doing it for a long time, you would have had Plan A, B and C because when I look at a property, that’s what I do, like, Can I do short term rentals with this? Can I do long term rentals? What happens if I need to sell it? Or you know what I mean? Like you have to be able to have different exit options.

Erwin  

Right? We work with clients like we know exactly that exactly, but we have a pretty good idea temporal file, what they’re gonna pay you rent, we can fill it. Exactly. Our system is very boring and repeatable.

Danielle  

But that’s those are the best kinds, like boring is good. You know, you want to have Boring, boring strategy, because then you know exactly what to do. Like, you know, these are your tenants, these are going to be the rents This is how much they make. So, you know, this is how much they’re going to afford. So for me, I usually buy in, like a neighbourhoods for the single family homes, because we’re most of us are government employees here. And we all like government employees makes on average, 60 to 80,000, you know, and that’s not management level. So if you’re a manager, you’re talking 90 Plus, right? Yeah, hopefully

Erwin  

get one of those jobs as a side hustle, and just like do not show up. No, you have to show up. I see if I get nervous. I’m totally joking. And just such a so jaded government worker.

Danielle  

I know that’s, that’s another topic. Well, we’ll pause on that one. It’s all

Erwin  

jealousy for offer for any of our listeners, who are government workers. I’m just jealous. I wish I had that kind of situation where I can just turn off my mind at five o’clock.

Danielle  

Yeah, well, that’s the different that’s that kind of like that different lifestyle and mindset, right? Because you do leave, you know, your work at five versus being an investor. It’s, it’s always Oh, yeah, it’s always on your mind is always on weekends, and things like that, which actually, I’m trying to take back some of that, like, I stopped going to walk throughs on the weekends, like I remember, I used to drive to Cornwall on the weekends to look at properties. And after a while, when you get to the point where like, okay, like, I have a great portfolio already. I’m not doing that anymore. Now I’m going to be delegating that task. So I’ve been doing more virtual walkthroughs and things like that, which is super awesome. It saves me so much time. And I just told myself like, I’m not I’m not doing that anymore. It takes away so much time with my kids on the weekends right.

Erwin  

Now we can assume their clients, especially people being more comfortable virtual, more virtual, and also because of the way the market is we can get conditions for inspection. Exactly. Yeah. Our client come then, or they can still stay at home and just wait to see the inspection report.

Danielle  

Exactly. Yes, exactly. It’s gonna real estate’s boring. It’s

Erwin  

so cookie cutter. And yeah,

Danielle  

you know what to look for already? Right. And inspection reports. So the red flags?

Erwin  

Yeah, yeah. And the day does not matter what my opinion is on if I like the kitchen or not. It’s all about what my tenant wants, and what’s likely for renting it.

Danielle  

Yes. And I think that’s the difference between, like an experienced investor and someone starting new, they still are putting themselves, you know, in the apartment versus thinking like, No, you have to look at it through your tenant perspective, you might want this kind of kitchen. But does it really matter? Will your tenant care? No. So you have to look at it like that right?

Erwin  

Now in this market. Beggars can’t be choosers. Yeah, exactly. There’s nothing to rent is that the same non Ottawa is vacant? What has vacancy?

Danielle  

Yeah, vacancy is low, it’s always been low here. I’ve never even had one month of vacant units in any of my properties.

Erwin  

financial hardship.

Danielle  

I know I’m very blessed. I’m very blessed. Because we have never had an empty unit, not even for a month. So when our tenant gives us notice, we, you know, market the property, and it’s filled right away most of the time within weeks. But because we have really great properties, they’re all in really great neighbourhoods. And so, because I know who I’m renting to, right, so I know there’s that demand. But for other investors, I feel like it’s probably the same maybe one month of up, but I feel like the vacancy rates are low. It’s definitely below 3%. So

Erwin  

that makes us even lower. Yeah,

Danielle  

I bet you Yeah, I probably I haven’t checked recently because

Erwin  

vacancy, because we need to, like fix stuff up. But yeah, rent rental supply is like non existent.

Danielle  

No. And the thing is, sometimes I’ll even like sometimes I want that one month to you know, like you said, fix things up, you know, give it like, you know, just a fresh look. Right? But the demand is so high people will be like, no, like, I’ll take care of it. Like I’ve had tenants say like, Don’t worry, like all pays. I just want to get in because I have to get out of my other unit. I have nowhere to go. So they’ll ask me. Can we go you know, like a couple of days early. You don’t even have to clean it like we’ll clean it like it’s the demand is definitely there

Erwin  

is the same in New Brunswick, New Brunswick. It’s

Danielle  

just I feel like it’s the same to like the vacant securing. Yeah, it’s I mean, immigration, like that’s a whole other topic as well, but like, immigration levels are high and they’re going to continue, right. So there’s a demand for housing everywhere. What does that say?

Erwin  

And Generally speaking to our clients, they’re not scared of this of this market. A lot of them are waiting, long waiting, a lot of them are actually getting in.

Danielle  

This is a great time to get in. If you know what you’re doing, right. Like, if you’ve been putting your your money aside for this opportunity, which I know a lot of people were in the last six months to nine months, they were not buying anything because they were waiting for these opportunities. Those people, this is a great time to come in. Maybe you can buy something to house hack, right? This is a perfect opportunity to do that. So yeah, I would only be scared if I was selling my home that I bought in January. And now I need to sell that’s not a good situation. But if you were strategic, I think you would be in a really good spot right now.

Erwin  

Alright, and we bought for cash flow, you can rent it out and cover your costs. Exactly. You didn’t quit your job.

Danielle  

No, yeah. Because, you know, I heard somewhere I don’t remember. But with real estate, if you know, if you have tenants paying down your mortgage, the principal pay down is really the guaranteed of return, right? Because the cash flow comes and goes depending on you know what the expenses are that month. Exactly. But your your principal pay down is always there, you know, for sure every year that X amount will be paid down. So to me that’s, that’s a huge plus. So if you can get in now, do some house hacking, which is my biggest regret. I never got to house hack. I would love to house hack now. But it’s like my house is a gong show, right? So I can’t it’s not possible, I would be so noisy. But if you’re 1718 listeners are, you know, at the beginning of their journey, honestly, my biggest regret is not house hacking. So if you can do it now, go for it. It’s going to be such a game changer. And it’s going to accelerate your real estate investing journey so much like you have no idea.

Erwin  

So buy a house hacking, you mean renting out parts of your home?

Danielle  

Yeah, yeah, or buying a duplex and living in one or buy. I mean, if you could afford it, and it makes sense, I would go all the way up to a four Plex live in one rent the other three. If for some reason that’s not possible, then you know, buy the single family home and then rent out rooms or the basement or something like that. Just because if you’re single, this is the best time to do it. Right? You’re a single individual. Go for it. You’re gonna save so much money, you can just start building wealth. It’s like the best option.

Erwin  

Yeah, the last three houses I’ve owned all had Income Property potential.

Danielle  

Yeah, right. Like, that’s the way to go. I wish I had done that. And,

Erwin  

like, cheap like me, you’ll find ways to save money. I am proud I’ll gladly live in my basement and rent at the main floor and collect rent.

Danielle  

I would totally do it. But I don’t think my kids my and our pets and my husband will come with me they’re gonna just gonna be like Google.

Erwin  

Right, right. I was actually reading I think RBC came out with a report recently. I think something like 4050 years ago, the average household was like 4.2 people. Okay, and now we’re like, too low, too. We’re low too. Now. It’s part of the reason why we need so much housing, because some, so fewer people are in the one property, which is actually funny, because I thought households were getting bigger. But anyways, my point is, is that a lot of people’s homes are very empty. It’s true, I will space to rent out.

Danielle  

This is very true, because people think they need more space than they actually do. So that’s something to think about too. And I mean, I know people like the privacy in their own personal space. But I think sometimes you have to sacrifice a little bit at the beginning, right? You know, you got to rent out those rooms because there was a certain empty, you’re not maximising your home and you’re not leveraging what you have. So yeah, that’s what I wish I could go back in time and do so biggest regret.

Erwin  

So just to feed the FOMO. I actually have a client client Katie’s coming on. Soon, they rent the rooms to international students. Okay. From China, and they pay a lot of money. Yes.

Danielle  

Okay. I actually looked into that. Yeah. To be like a homestay. Right. Yeah. Yeah. But that didn’t work out. too. Like, if I can’t help Zach, I want to be a homestay family. But, yeah, it was the whole process. And then it didn’t work out for us. But yeah, that’s another option for sure.

Erwin  

Cuz it’s a side benefit. For my family. We want our kids to learn Chinese. Right? Yeah. Right. Because if anyone doesn’t think China is gonna be a world economic power more than they are already. Right. So yeah, you know, again, diversification just hedging my risks. learning Chinese is not a bad idea.

Danielle  

No, it’s a great idea. They have choice. Do they have Chinese Saturday school? In Toronto? Because they have them here. It’s free. It’s

Erwin  

yeah, I think we better feed students in our house or Oh, yes, that’s even better. Yes, that’s that’s even better for sure. I think they both appreciate it. Because then the Chinese students can learn some English and my kids can in a very, you know, get a lot of exposure to Chinese.

Danielle  

Yes. Oh, my husband’s family did that they were homestay families for Japanese students for like 20 years. And a lot of the students became like family friends over the years. Right. And I think it’s an amazing experience. So that’s gonna be awesome.

Erwin  

I need a bigger house. Danielle, we’re running out of time. Do you have a couple moments talking about social media? Of course,

Danielle  

I love social media now. I was honestly so afraid of social media. I was I didn’t have any. Yes, I don’t so much. Because I forced myself to do it. I only had Facebook from like, whatever Facebook came out. And then I kind of just stopped after I had my first son. So for 10 years, I was not on Facebook, or Instagram, or anything. It wasn’t until I the the pandemic hit my friends, she kind of forced me to to create an Instagram account. And she said, you know, you have to be part of like the world again, like you have to join the join the world. So I did. And at that time, I was just posting, you know, kids stuff. And I don’t know what happened. But something shifted in me. And January 2021. So last year was when I decided I’m like, I’m going to take social media seriously, I’m going to share my journey, I feel I felt like I had a lot to offer. And I was keeping it all to myself, which I felt like, Okay, if one person can benefit from my real estate investing journey that will be more than enough to make me happy and to push through that fear. So that’s kind of how my journey started. I just forced myself to make posts to go online and and figure it out. And but I didn’t know I didn’t, I literally didn’t know how to create a post on Instagram, I had to ask my friend. And we did it together. I remember at the restaurant, and I just kept doing it. And I felt like people resonated with my content. And I, I started getting a really great following. And then I became more confident. And I just kept sharing, and then the my, my community started growing. And that’s how I ended up making so many incredible friendships like even like the wincle founders, like we met through social media. And now, like, I can’t even imagine how I didn’t know them before. It’s crazy. And a lot of my investors and a lot of my partnerships were all through social media, we became friends, because we resonated with each other’s content, and just took off from there.

Erwin  

As the message just get started, just post to start posting. Yes. So does anyone who looks at your stuff might be feel intimidated.

Danielle  

It’s crazy to me, because if you if you had followed me from the beginning, you can see that I you know, I would stutter I was nervous, my face would be read me to actually. But yeah, like, I didn’t know how to do any of that stuff. When I got frustrated, I decided to get help is which is when I started paying for someone to help me create content. And now I have a virtual assistant, and she helps me and it’s been such a blessing, because now I’m able to do even more content, create more content, because she’s able to take it and like, you know, add the captions and put my logo and do my branding for me, which takes a lot of time. And so she’s able to do that. And I’m just gonna focus on creating the actual content. Yeah, so yes, I think my advice is, if you want to grow your real estate business, you have to be on social media, and you have to share your journey. And you just have to push through that fear of being uncomfortable or being judged or you think, you know, your friends are gonna, like, think, you know, you’re crazy or whatever, just who cares. Just be yourself. Be authentic, and somebody is going to resonate to your message because I find a lot of people reach out to me and they say, like, you’re so relatable, you know, you’re not using crazy fancy words. You’re a mom, you know, you go to the gym, you’re like an everyday person. And if you can do it, it makes me feel like I can do it too. And my message is yes, you can because I’m not special. I literally like you. You heard my story. I got sick, taking the bus to go see you. And then I didn’t know how to create a post. And now I have an amazing community. So everything is like teachable. Just teach yourself these skills and push through that fear and you will see the results. Amazing.

Erwin  

Yeah, I didn’t know I usually ask a lot of questions. So I hung a lot of the air sort of in a way and Final thoughts you’re already overtime I

Danielle  

appreciate. That’s okay. I honestly thank you so much already for for, you know, asking me to be a guest I feel super honoured, I remember, you’re gonna laugh again. But I remember thinking I was listening to your podcast, I was like one day, I’m going to be a guest. Because I would have, I’m going to do like great big things, I’m going to help people and then I’ll be able to share it. And here I am. So thank you so much for for, you know, giving me this opportunity. And my message to people is, if you’re serious about changing your, your finances, you’re serious about helping your family create wealth, and just be more comfortable. You don’t have to be, you know, super rich and own yachts and things like that. But just adding that extra comfort in your life, which is super important to me, because I have two kids. And I know it’s super expensive to have all those extra activities. So if you are ready to change your finances, and create more income for yourself, and you want to invest in real estate, reach out to either you know, a coach, get into a programme, just take action. And if people are not nice to you and don’t want to help you just go to the next person because somebody will want to help you. And that’s how you’re going to grow. And you can reach out to me, I’m happy to help you as well, because I know you know how scary it is. I was there too. But I always tell people the easiest way to reach out to somebody without being scared if you give them like a key word. So for people who are listening to this, and they want to reach out to me, they can just DM me on Instagram. Let’s think of a cool word for them.

Erwin  

I thought range but I guess it’s too generic.

Danielle  

We can you can just say,

Erwin  

let’s get on the bus.

Danielle  

Okay, let’s do a bus. Just DM me the word bus ride because I know you would listen to this story. And that you know, it’s from this podcast. So if someone wants to reach out to me, and they want to DM me the word bus ride, I’m gonna know that they listen to this podcast, and they want me to reach out and just help them get started. And so I’m, I’m totally happy to do that.

Erwin  

Amazing. Daniel, something I’ve been working on. Just I don’t know, my mind, my mind has always been weird. Actually, Turks and Caicos is a good example. I think I think of Caribbean people in general. They work to live, right, and they live a lot. Especially when you live somewhere so beautiful. You’re gonna want to spend more time living and working. I don’t believe that’s the reality for most Canadians. Unless you were born rich, and no one wants to live to work. It’s pretty much the opposite of I think what our purpose is, yeah. So I’m I’m mean towards we work to invest, and we invest to live,

Danielle  

I love that. I think if people can understand what you just said, their lives will change. Like, if you just think about working, so you can have that capital to invest. And then that investment is going to be able to create the life that you want to live. If people understand that cycle, everything else will change. Because I was raised to save money not to invest. No matter how much money you save, you will never be able to create any kind of wealth or freedom because it takes forever to save. And then the money that you’re saving is actually losing value over time. So to me, I no longer save, so I will create money. So it’s either through equity or cashflow, I will create that income and I will invest that income and that income, that investment is what’s going to change my life and make things just more enjoyable. Like I’m creating money to enjoy life, not the other way around. You know, so I think if people can understand that concept, like don’t save, invest instead, if they can just understand that I think everything else will fall into place. Right? Or my the biggest thing I tried to like, change people’s mindset is the whole like, I’m waiting to invest, because I don’t have any money. But you will never have money if you don’t invest. It’s like it’s a cycle, right? So even if you start off with something small, like $50 It’s something at least you’ll get that habit and once you get that habit, you understand how it works, then you’re going to start to actually try to create more money so that you can invest. Do you know like all these side hustles are available to people you can create money from from anything now. You know, you can create a course you can host webinars you can sell like my son was selling e comic books, or $3. And he made 70 bucks. Pretty good.

Erwin  

Fantastic. Right? One of our clients drives DoorDash Okay, yeah, $500 a week.

Danielle  

That’s amazing. Yeah, so imagine you took that and invest. That’s a side hustle, right? So like, get Add a side hustle and take that side hustle and invest it. And that’s how you’re going to create and build momentum. Yeah,

Erwin  

thank you so much for your time. Thank you so much for your support

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 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.

To Listen:

**Transcripts are auto-generated.

Erwin  

Hello, welcome to the truth about real estate investing show. My name is Erwin Szeto. And it’s only two weeks until the wealth hacker conference. The timing couldn’t be better for an event like this on how we manage this upcoming economic storm, winter is here or it’s coming economically not the season. This is only the beginning. And we will be sharing at the conference how the world is changing newer investors plus entrepreneurs who are fearful as they should be. But like last time during the Great Recession, also known as the credit crisis was the last and best time to make a fortune and people did regret it to them by more. This cycle will likely be no different. So get your tickets to the wealth hacker conference November 12. At the Toronto Congress Centre near the airport for one day only event, wealth hacker.ca for tickets. Don’t forget the www www dot wealth hacker.ca. For tickets, buy discount code for you my favourite 17 listeners is the five letter word truth. Very easy to remember, hopefully, I’ve asked each of our expert speakers to include in their talks what they’re doing with their own hardware investment dollars. And when timing is pretty important these days. Me personally, I’ll be sharing how cheering I plan on dusting off an old strategy that’s fallen out of favour in the last couple of years, or dusting it off, as I believe the ideal investment property has changed in this current inflationary economy. And we plan on implementing the strategy once the conference is over. I’ll be sharing more detail about it at the conference. So hope to see you there Saturday November cloth all day for one day only wealth hacker.ca for information. Don’t forget the w’s WWW dot wealth hacker.ca. I trust everyone have a great week and weekend. As I’m recording. It just came off a short week. Thanks to Thanksgiving. My brother’s wedding was that weekend, I gave a talk to Elizabeth Kelly’s event as well. So kind of glad that weeks over. My brother’s wedding was delayed for two years thanks to the pandemic. But it finally happened and it was awesome. It was so great to see so many friends and family who hadn’t seen for quite some time, including a friend of mine, who is an RCMP officer. Let’s call him Dan. Dan was visiting from Alberta. He used to live and work in Toronto and still keeps his condo in town in Toronto about he rents out. I helped to convince him to keep the condo when he moved as a hedge just in case he ever wants to move back to Toronto and in case Prince prices ever went up. Be it’s a good thing he did. Because if he did ever want to move back, he wouldn’t be able to afford it. Hence, this hedge worked out. Yes, condo prices are down in Toronto, and pretty much every city where there is condos. Most of them are down through across the country. But understand if you look into the numbers more specifically, if when you really see real estate prices broken up by a category or kind of housing category, you’ll notice that counters for example, are down much less than say detached homes that sell for over one and a half million dollars. The Affordable I’m doing air quotes. For those who can’t see, the affordable. I think the better term is actually the least unaffordable. starter home market is still very much active since rents are so high along with interest rates. It’s natural for that demand for entry level real estate to increase. No different than how no name grocery store items like President’s choice and Kirkland are selling better than ever these days. Anyways, Dan shared with me how grateful he is for his investment property, as we discussed how the importance of intergenerational wealth is for homeownership. Basically, if you don’t have intergenerational wealth, if your parents don’t have wealth, then it’s gonna be very difficult to own a home and especially Ontario or BC, my friend Dan actually moved out to Alberta for affordability reasons, you know, his top salary basically is not that far off, whether he lives in Toronto or northern Alberta, where it’s like a third of the cost in terms of housing. I can’t agree more with with his opinion that intergenerational wealth is important. And this time, the time that we’re in right now, is probably the most important it’s been in the last 12 years to invest in oneself education and networking. I can’t recommend enough that folks join us on November 12 at the wealth hacker conference. Our last event changed so many people’s lives for the better, but we’re hoping to connect the returns for our attendees this year. on to this week’s show, tell peers who came to our conference as well. Back in 2019. He’s currently a real estate investor with 22 doors. Cal has been investing since the last recession being braver than the most. He bought the dip in Florida. He did research for a while but he pulled the trigger in 2011. He’s done quite well for himself. He’s a stock hacker and online education business side hustler. I just mentioned side hustle because Kyle does have a full time job as a mathematics consultant to kindergarten to grade 12 teachers at his local school board. Kyle is a teacher of math teachers.

Erwin  

Cal is passionate about education. As you can tell We’re lucky he’s for us that same passion for education spills over to the investments area. He loves to share his knowledge, his experience. He’s always sharing his research with our community at stock hacker Academy. And I selfishly had some questions for Kyle on how to teach math and investing to kids. Now that I think about it, Kyle’s method for teaching compound interest, which he shares, in the latter half of the show, compound interest, being the eighth wonder of the world, his methods would totally work on adults. So make sure you have your pens and pencils ready to take notes, please enjoy the show. Like if you call appears, Hi, Kyle, what’s keeping you busy these days,

Kyle  

but Well, everything is keeping me busy. We’re back to school. And I’m telling you, every single school year when we begin, I always, in my mind, have this, you know, picture that everything’s going to be great and calm and organised. And here we are, beginning of October. And as usual, it’s a bit of chaos. But it’s, it’s a fun cast. It’s nice to be back

Erwin  

at it. elementary, high school. What is well,

Kyle  

my background, I come from secondary. So I was a secondary math teacher for about a decade. And then I sort of moved into a coaching role. And now I’m a K through 12, consultant. So I sort of coordinate deliver professional learning for educators and everything in between. So lots of hats. They’re pretty busy. But I also get the pleasure of working with students and teachers today, for example, this afternoon, was in a class and got to hang out and do some awesome fun math talks with some grade nine students. So it was a great day.

Erwin  

Fun math talks is good. And we’re getting a minute just because we discussed some things off the air, I think we should share with the listener to 17 listeners, I’m sharing how am I experiences among my clientele. So I have 500 clients generally that are very comfortable with math. And I have some, of course, some hardcore analytical people like software engineers, architects, physicians, what I don’t notice among my clientele, what we don’t have is people like from the arts. And then I was thinking, my thought is that, you know, people who can do math can analyse investments. But even before that, they probably can think logically, we always have problems in front of us. You know, the big one right now is inflation and interest rates. But then how does one protect themselves from inflation? And then, like, our clients don’t come to us already interested in real estate, because they already have some understanding, I need a business I need I need some hard assets. So you’re, you’re kind of doing important work to produce more clients for me.

Kyle  

Yeah, well, it’s funny, because, you know, our I shouldn’t say funny, it’s not funny, because what you’ve sort of articulated is that mathematics, you know, this is why I love the work I do is that, you know, when I came out of my post secondary experience, well, actually, in post secondary, I was that kid who memorised everything through school, I didn’t really understand why a lot of things did what they did. I just knew, you know, I showed up, I did my cramming the night before. And I was able to recognise enough patterns to sort of get me through. So I was, quote, unquote, good at math. And in university, I was like, Well, I’m gonna do computer science and math, because I’m good at math. And in second year, I sorted the wheels, as I call it, I say, the wheels fell off for me. And what I recognised at that point, I had a professor point at me and say, You don’t know anything about math? So yeah, so that’s, you know, yeah, I

Erwin  

was fine. Today’s world. No, absolutely. And

Kyle  

you know, and honestly, at the time, I sort of shut it off as he’s just, you know, a jerk. And that was about it. But the reality is, is that, you know, 10 years later, as I’m in a high school math classroom, spinning my wheels, trying to help students understand math, you know, what I saw is exactly what you described, there was like a group of students who sort of it sort of seemed like, oh, like, they’re the math people. And then there was the other group of students oftentimes, like a larger group of students that weren’t math people. And that’s sort of like one, I guess, philosophy you could have, or one mindset that you can have is that, yes, some people are going to, you know, be more naturally inclined to enjoy mathematics and others won’t. But I sort of look at it as more of a nature nurture thing, where our job as educators, is to try to help more students feel comfortable and confident with mathematics. And, you know, that’s really the work that I do, I’m not doing this work to try to make, you know, those top achievers even better, you know, there are people that’s their passion, and they want to do that. And that’s great. I look at the completely other end of the spectrum. And I look at those students, because mathematics is such a gatekeeper. And you just articulated you said, a lot of your investor clients, people who are trying to build wealth for themselves, so they can take care of themselves, their families, leave a legacy. There are people who sort of, I’m gonna say, one at the game of mathematics, whether the instruction was you know, sound or not, they sort of were the lucky ones and I’m one of those people and I want to you know, offer that out. opportunity for more students. So yeah, that’s, that’s why I do the work and, and I think there’s so much more work to be done there. And that’s what keeps me you know, driven to continue this work.

Erwin  

I just like to add, I tend to skip steps and I leave out context and which is funny because I say context is everything these days. One doesn’t need to be good at math to become investor, like the step first is usually have a really good job. Right in order to qualify for mortgages?

Kyle  

And and how do you get a really good job, sadly, once again, you know, even if, you know, they, they say calculus, for example, is like a major gatekeeper because some of your top professions in order to get into those programmes, even though they’re not math heavy, they use calculus as sort of like a separator. So if you’re, you know, strong in calculus, you get into the programme over someone else who might be even stronger in the actual area that they’re trying to focus on. And they use that as sort of like the tiebreaker is like, oh, calculus, we’re going to take that person. And again, that’s a massive challenge. It’s a massive issue, when you know, you might be one of these people who, who sort of got left behind somewhere along the lines.

Erwin  

That’s a great point. You mean mentioned left behind because I have lots of clients who didn’t go to college or university, but they’re really smart. So I’m guessing they didn’t enjoy school, or they struggled at school, but they’re really smart. And they learned afterwards, like through application probably, life would have probably been easier if they enjoyed school and did well in school.

Kyle  

Yeah, well, you hear you know, so many people at stock hack or not stock hacker, but wealth hacker conference, you know, Grant Cardone who and Robert Kiyosaki, there’s so many people who are, let’s say, entrepreneurial, who, you know, didn’t maybe enjoy the game of school, but a lot of those people, those still had sort of this, you know, almost like a, like an intuition with numbers or with have or, you know, recognising patterns is probably a better way to say it. You know, pattern recognition is like one of the key, you know, differentiators between successful people. And folks who are less successful is if you can recognise patterns. So, you know, Grant Cardone says, hey, when I do this, this happens. I’m gonna keep doing that. What better place and mathematics class to give students that opportunity? So, you know, if there’s any math teachers listening, I would say, you know, reflect on your own classroom and think about like, are you giving students an opportunity to recognise patterns and behaviours of how the math works? Because that’s what really matters. In math class, it’s not necessarily remembering how to complete the square or Pythagoras theorem or any of these other things that we, you know, we tend to rote memorise, do these

Erwin  

kids understand the importance, like what’s on the low side, and like to understand, like, you need certain skills and tools in order to get a good job. Come on, investor is good, I haven’t lived.

Kyle  

You know what I think it’s hard to say, like, I think yes, but I think it’s also really hard to comprehend what that really means when you’re, you know, and I always reflect on my own experience, and, you know, I, my parents told me, you need to get a good job, you need to, you know, have education as as a means to help you get a good job. But the reality is, it’s, it’s sort of like, you know, you have to get out there, you have to experience what that looks like, and sounds like and again, certain students, I think, just have this advantage of like, I just kind of followed the motions, like, I didn’t work necessarily harder than a student who didn’t maybe go on to some sort of post secondary, but I was lucky enough, I suppose that, you know, I, I was able to get through and sort of jump those hoops to get me far enough. And, and I think that’s a major challenge that we’re up against, because I don’t think it’s getting easier for anybody once you get out of school these days. And I think about your kids, my kids, anyone else who has young children, like who knows what that’s gonna look like down the road?

Erwin  

It’ll be impossible buy a house, but getting a job these days is great. Yeah, exactly. So the best job market,

Kyle  

I go straight into the service industry, you know, it seems like I’m looking at the tips. You know, when I go to dinner, I’m like, Oh, holy smokes, you know, how much money do we spend on dinner? And then you’re like, I gotta leave a tip on that. Oh, my gosh, and I’m thinking to myself, I’m like, What am I doing here? I should know I should be serving these tables. So that’ll be where I’m sending them 18%

Erwin  

The first option

Kyle  

and they already added the gratuity on there how convenient and I didn’t

Erwin  

tax to There you go, rarely pay plenty of sales tax to so called easiest way for me ask this question as you have kids, eight and 10 eight and 10 Yet even 10. What are you teaching them so supposed to be a real estate show? Are you teaching them anything around real estate and stocks anything like that?

Kyle  

I would say definitely not really not a whole lot with stocks. I know my son is a big Roblox fan. So you know once in a while, I would pull up the Roblox chart and you know, we chat about it just very informally, I’m very, my approach for mathematics, at least initially, is trying to allow them to explore and inquire and investigate before sort of getting into, you know, the nuts and bolts of things and let them ask questions kind of follow their lead a little bit. More or less, I think I talk more about real estate with, with the kids and, you know, I try to be open and honest with them about how much things cost. And, you know, we describe things like, you know, how much like rent would be our children are shocked when they, you know, they think Holy smokes, you know, like, $50 is a lot to them. So, you know, when they think like, every month, someone has to pay, you know, you know, $1,500, or $2,000, just to live somewhere. And, you know, so we discuss those things, and I’m really looking forward to, when they get to that age where I can, you know, sort of have them hop in the back and, you know, head out and kind of get in there and get their hands dirty. So that’s something that I’m hoping to do. But I’m also trying to balance that with maybe not forced feeding it on them at the same time, because I do want them to, you know, actually enjoy it through the process.

Erwin  

I’m totally different. You years ago, I was already bringing my kids for, I bring them for tenant showings for Renovation Inspections. And even when we sign the tenant, couple of reasons why I want my child to be there. So then the other family knows that I’m a parent, too. Right? I’m not just this evil landlord trying to collect my 1500 $2,000 a month, you know, I have a family to you know, you don’t pay rent. I can’t afford this, either. And I think that’s basically yeah. And then that’s math, I think you can some people miss out that, you know, we need to collect rent in order to cover these massive mortgages that are inflating with interest rates. That’s often Yeah, it’s often seems to be lost in the tenant world.

Kyle  

Yeah, for sure. And honestly, like, children learn best through observation, right. And again, you know, we talked about patterns earlier, right? They earlier they start seeing things and observing things. And then, you know, they start to recognise patterns, and they start to see different Oh, like, you know, looking around and seeing, like, Oh, my goodness, you know, a lot of the places that we’re renting are a lot smaller than the place that we’re living in. And, you know, understanding that it doesn’t always look exactly the way you know, your world is to you when you’re growing up. And I think that’s a huge lesson for them. So maybe I gotta get them in the car a little earlier here following your footprints,

Erwin  

I have no idea from what I’m doing is right, actually got some flack over an email that I sent out and about? I shouldn’t be asking, What am I teaching kids, my kids about real estate, that lady was saying, but you should let your kids explore on their own and when they’re old enough to figure out what business they’re interested in. But I’m like, how will they know what businesses are interested in? If they have no exposure to business?

Kyle  

It’s the same quite I have the same discussion with sports, for example, you know, a lot of people say like, ah, you know, my kids don’t want to play X, Y, or Zed. And I started to say, like, how do they know, you know, like, without sort of trying and, you know, at least giving it a shot. And sometimes, you know, you learn to love something once you do it. And, you know, I always say, if your son or daughter or child doesn’t like school, are you just gonna say okay, no, you know, don’t do that either. Right? It might not be what you love doing right now. But I mean, I think one of our jobs as parents is to at least give them exposure, and but then trying to find that centre, right? It’s really hard, like humans are very off people, like we’re all in, we’re all out, we’re, you know, totally right, totally left, or, you know, it’s very difficult to get to that balance. So, just kind of keeping that in mind, I think helps us, at least not overdo anything, like, Hey, we’re gonna try all the sports and you know, you’re gonna, you’re gonna be on all the rep teams or you know, whatever that might mean, but to give them enough exposure, so then they can, you know, they can get that experience under their

Erwin  

belt. So call your smart guy. Well, right. How much

Kyle  

should I pay you to say that I keep going? No, I’m just getting,

Erwin  

why do you invest in real estate? Because I always have, I’m always concerned with confirmation bias. Right. And so I want to ask, you know, you seem bright. You’re responsible for our future, the future of the world, educating educators to educate children and educating children. Why do you invest in real estate, even monster pension down the road, don’t you? They’ll take care of everything.

Kyle  

Yeah. You know what, it’s interesting, because like, I have done so much growing like, obviously, when people are listening to this podcast, they’re probably very similar to us. And they realise that, you know, you’re constantly learning what you think, you know, today is probably not the whole story and all of those things. When I came into teaching, you know, my wife, my now wife, she was my girlfriend at the time. You know, we were both in teachers college together. And, you know, we were working jobs and all these things, and we were like savers. Like I was very saved minded. You know, we’re gonna get House at some point down the road, we’re gonna keep saving, saving. So we eventually got a house. And then it was like pay down that mortgage like that that typical, you know, do the right thing just like mom and dad says it’s like pay down that mortgage. So I was doing that. And then I ran into the whole idea of like the Robert Kiyosaki, you know, movement of Rich Dad, Poor Dad, and this was back in, you know, the late, I don’t know, maybe 2009 2010, just after the boom, time. Yeah, very, very interesting time. And, you know, in my mind, seeing the market, the stock market crash and having a very little amount of money in my RSP. At the time, it was probably like, $10,000, or whatever it was seeing that, you know, basically go down by a third or, you know, you know, almost half, I was like, Whoa, I don’t like that. And I had no idea what was going on there. But one thing that I did start recognising was this idea that wow, at least with real estate, you know, historically, it has, you know, done well over time, not that it’s always straight up. But then the other thing was, I just loved the idea, like the tangible like how I could, I could go in like, I’m like, even if this is worth nothing, I could still rent it. And I could still go touch it, you know, like, I could physically touch it. Whereas with stocks, bonds, any other type of paper asset, I didn’t like the idea that it was it felt fictitious to me, you know, and I’m sure we could go down the Fiat path if we really wanted to, but, you know, this idea that I’m like, What the heck are we buying here, and that’s what got me into it. So I really lucked out with timing there that I got interested. And then I spent, you know, a good, probably too many years, researching, and then going to the States and researching there. And that’s where we picked up our first rental property was down in the US. So glad we did it, and we’re still doing it. And to me, it’s like the easiest sell on an investment to feel safe, that it’s not just going to disappear on you. And that, you know, you can count on it to to continually make money over time. All right. And you live in Windsor, right? Yeah, just outside of Windsor. I’m in Bel river Ontario. So just kind of a little suburb of Windsor, you know, 30 minutes from downtown type thing and way down the 401 to the end of the line.

Erwin  

And you chose to invest in the states and stuff like Windsor? Yeah, well,

Kyle  

at the time, you know, I’ll tell you, I was also you know, and this is interesting, I haven’t thought about this in a long time. But my thought initially was, hey, let’s get a let’s get a like a vacation home. You know, that was my thought. Let’s get a vacation home in Florida. So we were looking in Florida prices were cheap. And you know, that was my big thing. And my wife who is not into investing, she wants nothing to do with any of this stuff. She’s like, you go, do you. I’m in full support, I trust everything you do, which is great. But also scary at the same time. She said to me one day, she’s like, why don’t we just get a rental property, and then use the money from that to go vacation wherever we want. And I was like, that’s actually a great idea. So we’ll just rent it full time and go from there. So we had picked up a place in in Fort Myers. And that was our first used a home equity line of credit. And, you know, basically paid all cash for it. And you know, I was like, we’re just going to chip away at this now. You know, I was paying down our mortgage. Now we’re going to chip away at this one. And that was our entrance to the market scary. Everyone thought we were crazy. And down the road. Turns out it it worked out. Okay, maybe maybe it won’t always work out. Okay. But for us anyway, it was, it was definitely a good entrance into the market. Do you still have it? We actually sold the Florida place the year before we built the house we’re living in now. So now, you know, like always, I always say that in real estate investors, you know, regret selling any property. And that continues to be true for me every property we ever sell. We’re like, Ah, why did we do that. But we did sell it as more security to make sure you know, we had enough cash to build this property. You know, we had, we had a lot going on at the time. So we had sold there took a you know, a really nice profit over there. And again, little bit of regret, but also I felt like the cost was getting high. We had condo fees I had I had gotten super safe when we purchased and bought in a gated community. My thought was, you know, I was sort of scared to buy anything that was more, I would say more reasonable for a rental and I bought something a little more high end, which still worked out. But now knowing what I know, I would have never done that I would have bought a property that you know, just cash flowed as much as possible. So, you know, it was sort of one of those repositioning of, of the asset or the equity anyway.

Erwin  

Not the worst idea, but can you share numbers because you’ve probably got this thing for a song.

Kyle  

Yeah, that that property well and for me to like You know, I think back to and I’m like, What the heck was I thinking at the time? Like, I wish I knew what I knew now, because I would have backed up the truck bought. Exactly, you know, like, how much can I get, but back then this particular property it was going for like over 300, before the crash in 2008. Nine, and we picked it up in 2011, I believe it was 495. So that was and that was in a gated community,

Erwin  

how many square feet, how many bedrooms and bathrooms, it was

Kyle  

about 1800 square feet high. It was a coach home. So you know, sort of like a like, like semi detached, but you know, had condo fees. So you know, none of the landscaping you had to do is it was actually a really beautiful spots, you know, ponds in there and all kinds of wonderful stuff. And then we ended up selling it in 2015. So, less than five years later for about, I believe the number was like one ad. And now had we hung on to it, it would be worth a whole lot more. So there’s a little bit of remorse there. But again, half the time it helps us sleep at night as we you know, as we were building our forever home, we proudly call it here

Erwin  

in Belle river. So, right. And the idea how it fared in the hurricane. That honestly,

Kyle  

when I saw some of the photos, I don’t and I was like, Ooh, maybe maybe it wasn’t such a bad idea. I don’t know.

Erwin  

Yeah, that’s honestly. Yeah, yeah, exactly. So

Kyle  

we are, you know, we are out in Florida, my parents actually live, they had a condo on the other side, they had purchased a couple years after I did down there to have like, as a, you know, as a snowbird place, they had picked up their place for 38,000. And they just sold at the beginning of this year, I’m not going to share just because I don’t know, if they, you know, I don’t know if they’d be comfortable with that. But anyway, let’s just say they did a lot better in terms of a percentage return. And then with all these floods and everything like that, I mean, they’re I don’t think their area got affected. But I think for them, it’s like, that’s why they got rid of it. They’re getting older, and they just wanted it to be off, you know, off their minds and not a worry. So I think they’re happy about

Erwin  

1. It’s where they’re gonna do rent in Florida?

Kyle  

Well, that’s it, yeah, they’re kind of, I think they’re kind of using my wife’s mentality of, well, let’s just go anywhere, you know, like, let’s just see where, you know, see where the, you know, the opportunity brings us so they’re going to spend a couple of weeks in Florida next year, that’s the plan and, you know, do it any trip they want. They’re, they’re going to be leaving for Iceland soon. So they’re very active, you know, I should also reference, like, their mindset is what makes me who I am, as an investor, they weren’t investing like I am in terms of the, the assets, like in terms of real estate or anything like that, but my parents were very, they were savers. They both retired early, but, you know, still kind of pinching pennies in order to do it. But like, it’s like, that was their lifestyle. And they, you know, they both retired very early, and are still doing just fine. Because they they just got, you know, they’ve got their cash flow in order. And, you know, they’re, they’re loving life live in it to the best of

Erwin  

1. Amazing. So we have, I don’t know, right or wrong, I have like, the opposite mentality and trying to make a lot of money, so I don’t have to worry about money.

Kyle  

Totally. And, yeah, and they don’t worry about money, which is great. But I’m like, I have this other thing, like, you know, you and I sort of connect on that level. Like, I enjoy the work too. That’s obviously important as well, but I’m also like, I would never do what, what they did, I don’t think like I think I’d be too worried about it. I’m very, you know, it’s almost like overcautious, like I want to make sure I don’t ever get in a position where I’m going Holy smokes, you know, shouldn’t have done that. But, you know, they had their, you know, budget in order and you know, they’ve they’ve lived very modestly, I’ll call it but they’ve still done a lot like they golf, they travel they do all of those things. But you know, they don’t buy brand new cars, they don’t buy the best of this or the best of that. They just, they just know what they want. And, and I think that’s awesome. It’s it’s a great, you know, great way to live for sure. Sounds like The Millionaire Next Door. The book. Yeah, exactly. Exactly.

Erwin  

I actually actually had to google how old that book is. I think it’s 30 years old now somewhere around it. Insane. And it hasn’t changed. Right. And in my experience, same mentality. Yeah. In my experience, the the rich people in that book are exactly my clients, and so sound a lot like your parents except their investors. They don’t buy new cars, if they do their mid level, right? They don’t buy brand name clothing, and anyone who does that are at a really high level. Right? Right. I do have a client with a Cadillac version. Apple makes a lot of money.

Kyle  

Yeah, my parents I would say are like, honestly, they followed what the traditional mindset has been, which I think is, like, if people do that, they will be like, they will live a great life and they’ll be financially. Okay. And my parents did that. So they were like, Nope, we, you know, we do a lot of saving, you know, my mom cut the coupons for the grocery like and save money wherever they could they put into their, you know, their RRSPs, and all of those things. And they go to the, you know, the big bank and say, Hey, here’s the money I’m putting in every year, put it in all these mutual funds. So they did all of those things. And they, you know, it was almost like, they didn’t have to think about it. And I think they enjoy that. I’m the opposite, where I’m like, Ah, no. Mutual Fund. I don’t know about that. But makes sense to me. Yeah, they’re just like, they’re like a hands off. And I get that from like, a property management perspective, like, where there’s certain things I don’t want to do. And it costs money for those things to happen. So I’m like, I guess if you have no interest in, you know, in what the markets doing, or why it’s happening, I could see how that might make sense, you know, but, but for me, not so much. So

Erwin  

you bring up a lot of great points that I’m interested in digging into. So for for move on from your Florida property, like you bought at like a really scary time.

Kyle  

scary time for a first investment. Yes, absolutely.

Erwin  

Did you you understood what the environment was that you’re buying into? Right?

Kyle  

I absolutely did. And like I said, I, my thought was, and I think that’s why I had this vacation property idea in the back of my mind was sort of, like if we pick up property, and it doesn’t work out as an investment property. We have a vacation home, you know, so that was sort of, I think, what drove me towards the property we selected, so I

Erwin  

was you live in it? Yeah, I

Kyle  

was like, you know, what, okay, so, you know, we we own this property, and, you know, hey, like, I mean, we bought it for the price of, you know, like, really well loaded car nowadays, you know, so it was like, you know, I was like that was my, probably like save face plan, you know, so it was like, oh, we’ll just hang on to it. And that’s the way it’s going to be. So it was scary. But at the same time, like I said, I’m like, I wanted to know that there was a physical thing, like I could go to that place and be like, that’s mine. And that at least made me feel better about things. And then we just made sure it could cash flow. It wasn’t like a massive cash flow generator. I was more thinking appreciation play at the time, which I think a lot of people, you know, sometimes maybe get too far into that. We barely cash flowed. And I was like, my backup was vacation home. So it was a good entry for me. And I would encourage those who are listening, don’t like just find something that’s going to sit well with you. It doesn’t have to necessarily be the best property. Right? There’s always a better opportunity out there. But maybe it’s not the right opportunity for you to get in on your first time.

Erwin  

That’s a great comment make. I find too many people are chasing unicorns, and then they don’t get anything done. And the market just keeps going, keeps going the way it wherever it’s going. And generally over the long trend. It’s gone. It’s definitely gone up. Yep. Yep, totally. I invested it back to 2008 2009. I want to hear your experience. How was it hard to rent? Because, you know, it was the great recession? Yeah, yeah. He’s barely felt it. But it was, it’s called the Great Recession or the credit crisis.

Kyle  

Yeah. And actually, I want to say I can’t remember which episode it was, but I was listening to one of the episodes recently, and I feel like this came up, where you were just sharing about this idea that when people aren’t buying homes or when they can’t afford homes, they have to rent so it was I didn’t realise that at the time. Like I would love to say like I had it all planned, you know, but there were so many people unfortunately like I’m not I’m not wishing this on anyone. But I had no idea at the time that there were so many people that were holding so many homes as an appreciation play that lost homes speculators there was speculating but then there was so many people that lost their their primary residence and required a place to live. So you know, it wasn’t like the recession caused rent to go away or people to go away it was like they still needed a place to live. So that worked out fine for us. Like we never had an issue my realtor down there like this is where you know, having a great realtor I know your team is very highly regarded having a great realtor is so important especially if it is out of you know out of town out of state out of province wherever the realtor was awesome was like my essentially like a property manager and getting it rented and then here’s the handyman and we’d let the handyman essentially manage everything and you know, I just trusted that that handyman and it was super smooth.

Erwin  

Yeah, me people are worth their weight in gold. Absolutely. They’re often my eyes and ears on them. Property? Absolutely. Yeah. So check on my other contractors if I had landscapers doing the job or whatnot, if the roofer did the right job.

Kyle  

Yeah, eyes and ears, for sure,

Erwin  

absolutely need boots on ground because you can’t be there that often. So I don’t know what to ask next. Because there’s so many things I want to ask, like, for example, do you see any parallels between those times in terms of the economy compared to like, these times? Should we be as fearful as the Great Recession?

Kyle  

Well, you know, what, honestly, I wouldn’t necessarily be jumping into deals I get, you know, I picked up a flip off of a guy who, you know, was sort of a last minute thing wanted private money, and I sort of arranged it, you know, one thing I will say is, over this decade or so, is I’ve realised how important it is to be creative. And, you know, this person wanted private money and given the market, given the uncertainty again, I’m still worst case scenario, if you have to hang on to a property, you know, and it’s not the end of the world, it might not, you know, be amazing upfront, but, you know, he wanted to pay 10 12% interest for X amount of dollars. And I said, Well, why don’t we do this, we’ll put it in my name. And, you know, you’ll be sort of like the partner here. And, you know, we’ll we’ll split some profits afterwards with some conditions on it. So you know, if you know, if it doesn’t sell after X number of days, then you know, basically like you’re gonna walk type thing so I’m not diving into deals just to get into them. But I’m trying to be creative. I think sellers here in Windsor are still I you know, in Toronto, I think it’s hits you a little earlier than it did in Windsor. But like the out of town investors in Windsor, like gone, they’re not around anymore. They were one of the main reasons why everything sort of like, you know, popped up around in Essex County here and

Erwin  

there for listeners benefit Windsor, a lot of these cities just outside the GTA like Oshawa, Windsor, London, Hamilton, they all went, they all boomed during the pandemic during the two years of the pandemic. And now they’ve they’ve also fallen the most, at least, that’s what I’m hearing from my friends Windsor, that it’s fallen quite, quite hard, and a bit more than surrounding areas, probably because I was driven up by investors.

Kyle  

Absolutely, yeah. Yeah. And honestly, I think we’re in a place where it’s, we’re in a really crappy mode right now, because I think sellers still think that they can get, you know, bidding wars. So they’re not like really being flexible or realistic. Like they, you know, they’re not, they’re not looking at data, right. They’re just like, I want to sell my house, and I want to get as much money as my neighbour did nine months ago. Right? And so they’re sort of like, you know, hanging on and realtors are saying this thing, but the seller thinks, well, the realtor just just wants me to sell the house quickly. So they, you know, so there’s kind of like this mismatch, but then when you go in, it’s like, the buyers, especially investors, investors are coming in sort of going like, No, we’re not, you know, we’re not going to pay that. Yeah, you know, that’s, that’s not going to happen. And I’m sort of that guy, so I’m trying to be more creative with deals working with sellers, so that, you know, there is benefit for them at the same time. And so they don’t feel, let’s say, robbed, because I mean, really, like the market has robbed them of the opportunity to sell at the peak, like everyone else did nine months ago. Right?

Erwin  

What do you see in the stock market? For me,

Kyle  

the stock market? I think something that’s really interesting is that I mean, the stock market obviously exploded ballooned way, like, you know, some are calling it like, the biggest bubble ever, you know, so if you’re thinking 2008 was bad, or, you know, 2099 2000 was bad, like, some are calling it like, even worse than that, you know, you can decide what you’d like. But when you look at the data, and you start actually, like, looking at all the different factors, right, so like the Fed is raising rates, obviously, you know, Canada’s our bank is is going to be, you know, taking moves from from the US as well,

Erwin  

they have to do to keep our currency higher, right,

Kyle  

quantitative easing has ended, and we’re supposed to have started tightening, but we actually really have

Erwin  

a fine line. There’s been no tightening.

Kyle  

Yeah, like when you do those things, and like inflation still high, a lot of it is sort of like it, you know, it’s trailing data, like an education like we use EQAO to, it’s trailing data. It’s like different sets of kids that you’re using to try to figure out where to go next. It’s the same thing happening here, you’re using inflation, which is trailing data. So by the time the Fed is smart enough to sort of like realise that hey, maybe things aren’t, you know, going to continue exploding like they they have a mandate to make it look like they’re doing the right thing. They’re just like crushing markets and obviously real estate’s you know, a little bit lagged behind the stock market so that you know, where are we going? I personally don’t think we’re at a bottom and then based on you know, I look at hedgeye hedgeye is is such a, like macro, focused, macro centric resource and I love it It basically like they’re looking at like, not until like, mid next year, at least for us to start looking back at, hey, you know, actual growth might start happening again, the economy is, you know, contracting. So like if our GDP growth is is actually like negative while we’re raising rates, while we’re supposed to be taking money away from the, the economy, like those things are not a good mix. And it’s going to be really difficult for someone to say, you know, I think you know, X, Y, or Z stock is going to hit the moon might be the short term, like fair bounces or it’s just a little relief rally. And it’s like, a lot of times too, it’s like a bunch of shorts closing their lungs or a bunch of shorts closing them, which means they’re buying by and that looks take off on a day right? So you know, I I’m sort of, I’m doing like very cautious bear call spreads. And that’s about it. Like I’m not getting crazy with it either. Because, you know, you could be wrong, but I don’t foresee us you know, getting to new all time highs for quite some time.

Erwin  

Yeah, I might plan to sell more bear call spreads when on the good pop. And I don’t think we’re there yet. Yeah, yeah, I missed the last pop. Dammit.

Kyle  

Yeah, you know, what, I actually, I tried to do a little bit like, I’m trying to be more, you know, I don’t want to get too excited. So I do little bits here, little bits there. But you know, when it starts running on you, I’m telling you, all of a sudden, like your brain start saying like, what if? What if this? What if that? What if this and then when it rips back down? You go, Oh, thank goodness, but then the next time it happens, again, you go, maybe it’s this time that I’m wrong? You know, and, and it can be quite scary for for a period of time.

Erwin  

trend is your friend till the end? Absolutely. Just the trend happens to be bearish. Yeah, exactly. Any favourite stocks that you sell their causal spreads on like QQ or Tesla, or any other space with Garbers arc?

Kyle  

It kind of depends, but anything, honestly. And again, this has kind of taken like the, you know, the hedgeye approach is like, anything that’s growth is probably okay, now, the one I guess, challenge you have is that sometimes, you know, you get the mean stock craze, or you get, you know, people that are just squeezing that can be really, really scary. So picking like, kind of like boring growth stocks can be really helpful, you know, picking the rustle, for example, like and using that, because like the queues, I mean, apples going to, you know, get a couple good days for Fang and you know, your cues are going to be upside down, right, even though there’s a lot of other growth names in there. So, you know, just not getting too crazy on any one thing recently, like hedgeye was saying, you know, they were looking at, there was like, A, the ticker chef, so I’m trying to remember is that tattoo chef, there it is. Yeah, that’s the one. You know,

Erwin  

they stopped. Yeah,

Kyle  

they threw that out there. And they just said, like, you know, what are you not going to do during a recession is pay that company, you know, so it’s like, oh, yeah, that makes sense. So, you know, you kind of look at that, and then you kind of look around those things. But, but ultimately, it’s like, yeah, looking for a little bit of green on certain things. And, and still being I think conservative is probably smart. Like you don’t want to, you know, go too close to the money or you can get taken out over the ropes pretty quick if things run for too long. Alright, at too high. Okay, so

Erwin  

quick disclaimer to the last 17 listeners. None of this is a financial advice, folks. And also, we’re talking bare stuff we’re shorting as in we’re making bets that profit when stocks either go down or at least neutral. You know, it’s funny, because early pandemic, I thought peloton would be would be toast. It’s like, who’s gonna pay for $1,000 bike with a monthly subscription? And we’re heading towards recession. Well, I call this pandemic right, if that thing’s wrong, yeah, that was the end of the world. Why was I wrong on that one? At least I did plenty of money in the way of it.

Kyle  

Well, if you remember 2018, that was supposed to be that was supposed to be a recession, right? And then what did we do? We printed money and then COVID happened and that was supposed to be a recession? And then what did we do? printed money, printed money and then we printed more money and then more money again? And you know, basically like, it’s like, I wonder I’m not I’m not gonna make a claim here. But I’m definitely wondering, like a lot of people are waiting for this fed pivot to happen but with inflation where it is their mindset and with job like with, you know, the whole jobs numbers the way they’ve have been positive mixed numbers. Yeah, it makes it really hard for them to pivot, right? Like they’re like, Oh, we’re gonna start pivoting now when inflation is high, and like job numbers haven’t, you know, been crushed yet. So I think they’re going to do a lot of damage. And then by the time the numbers change, it’s we’re going to be in a, you know, a bit of a world of hurt. And then also think about mortgages too, you know, when the interest rates go up Sure, houses like people might buy less homes. But what happens when your mortgage, your five year fixed is now due next month? Or the next, you know, however many people it’s due next spring, or you know, these are people that haven’t necessarily they’re coming out of these fixes that are 2%, or, you know, even sub 2%. And then all of a sudden, it’s like, they’re in a completely different world. What does that look like and sound like, Oh, and one of the spouses lost the job. So they’re not willing to, you know, re amortise or, you know, do anything. So, who knows? I hope not. I hope that things turn around before them. But I mean, there’s a lot of, you know, let’s just say that the the cards aren’t stacked in our favour right now.

Erwin  

Definitely, definitely headwinds. I’m speaking to a lawyer that works with a lot of real estate investors and transactions have slowed. He was actually saying that he’s doing a lot of private mortgages. I think people are trying to shore up their positions via private because they can’t whatever. It’s a crazy world out there. Yeah, for sure. Can you tell us about this, these other side? hustles. You have? Like I was looking at your website? I don’t you have enough work to do you have two young kids?

Kyle  

Yeah, my wife says all the time, Chantel she says that she’s like, You have too many ideas for one brain. And honestly, she’s right. I am like a learner only. I only like learning about things I want to learn about or am interested in. Like I said, I’m extremely passionate about the work I do in mathematics. And you know, that’s one of the things that myself in a good friend and colleague, John or we have a website called make math moments.com actually a podcast, just like you have I think we only have 16. Listeners, though. Oh, I think you are ahead. No clips me soon. Yeah, I’m hoping I’m hoping anyway. But yeah, that’s the making math moments that matter podcast, and, you know, we do a bunch of PD for teachers and try to make it as accessible as possible. We actually have a virtual summit we do once a year that’s coming up in November, and we usually have about, you know, on average, 10,000 educators from around the world who participate? And yeah, we just, we want to, I guess, share the math love and, and give educators who don’t necessarily have the opportunity to do the the learning, you know, the opportunity to to see that maybe math can look a little different for for students, then maybe we remember from math class,

Erwin  

how can parents make math look different for their own families?

Kyle  

Um, honestly, I think one of the easiest shifts you can do as a parent is ask more questions and tell less, you know, so I see people often rush to save kids. And we do it in education, too, like teachers do it all the time. But it’s like, just just ask them. And sometimes it will take them a long time, and maybe they won’t come up with the answer right away. And that’s okay, too. But when we rushed to tell them the answer, they haven’t learned anything. Right, they got an answer, but they haven’t learned what you’re asking them. So if you frame the question in a way, where, you know, you’re giving them enough information, and you’re not making it ridiculous, like asking them for the second derivative of you know, some expression is probably not a good idea. But you know, things like counting, adding, multiplying, you know, anything like that. You can get kids to solve proportions, if you frame the question in a way that’s accessible, especially if you have items or if you draw a model for them to, you know, sort of look at kids are very intuitive. And they have strategies, you know, that they can apply. So that’d be my number one is, say less, ask more.

Erwin  

So we’ve been very public about Jerry and I, we cancelled the Kumon for the kids. Tell me more. It was the biggest source of frustration within our household, us arguing with the kids, we’d have to sit with them to get it done. Even then they told it a thumbs couldn’t motivate them to do it. So both English and math, the only time they were fine, were when they were in front of the tutor. The rest of the time when they’re when the tutor wasn’t in front of them. They struggled to get anything done to be motivated. So yeah, and it’s also $500 a month, why would I pay $500? a month for grief?

Kyle  

Yeah, no, totally. And honestly, you said it earlier, you were talking about how context is everything. And it’s true in math as well. And I find a lot of times what we do, and I don’t want to speak about that particular organisation, but a lot of times we try to I call them naked problems. We try to get kids to do naked problems, which are meaningless to them. So like kids are just trying to understand what

Erwin  

your context listener, there’s just like small sheets of paper with math problems. Right? And

Kyle  

it’s not really like sheer numbers. Yeah, probably like whatever plus whatever, whatever times whatever, you know, whatever it is, but it’s like if you just take one or two, or however many of those problems and if you add context to it, it now is something the student like that your child can now relate to in the real world. And that can help them to drive, you know, to drive a strategy that they might use when you know when a kid comes to you. And this, this is very apparent when it comes to you and say, Hey, we’re doing 24 with the two dots and the line, and this number like that tells you they have no idea what the heck’s going on. Right? And if that’s the case, then what are we trying to do here? So it’s not about memorising, multiplication facts, or division facts, it’s about engaging with the mathematics in a meaningful way. So that hopefully becomes automatic. Like, I don’t want to memorise it like a phone number, I want to be able to go Oh, like when this happens, that happens. And some of those things will just, you know, be easy to recall. And others might require a strategy. So that that’s the kind of mathematics work that, that I’m really into and, and trying to make it accessible for students to kind of meet them where they are, and nudge them along. So when students are frustrated, they usually don’t either don’t understand why they’re doing what they’re doing. Maybe it’s not even appropriate for where they are, like, they might not have the strategies or the methods to, you know, to do what they’re doing. Or, you know, it’s just contextless. Like, there’s nothing. What do I relate this to?

Erwin  

Right? Yeah, my kids, they could do it, if they put in the effort, but they have no interest in doing it. Versus when when I give them like a money exercise, for example, we pay our kids to do things around around the office. Really? Yeah, we haven’t paid the kids for any chores or anything. But when we ask them to do work, for example, and then we’ll ask them, like, they’ll say they want something. So they want to buy something. Say it says lunch, like lunch is 20 bucks, for example. And then I say, well, we paid you $5 to shovel the driveway. How many times have to shovel the driveway for lunch? That’s exactly right. And they’re like, Oh, it’s a lot of money. Right? Yeah, totally. Daddy paid for it, not you.

Kyle  

That’s exactly and I’m telling you what you just did. That is that is the key to it. And, and you could do that in the car, you know, you could skip count with your kids, like just randomly, like my kids, when they were younger, would like be all into that. Now they’re too cool for that. So that, you know, that’s harder, but like doing little things when it comes up. So for example, you know, what you just reminded me of is, you know, usually on like, Mother’s Day, Father’s Day, we like cook breakfast, the kids love, you know, helping and making it and it’s like, you know, we’re cooking bacon, and there’s, you know, whatever it was nine strips of bacon. And there’s four of us. And like, I love this opportunity, right? Because like I’m looking at it as a math teacher going like, okay, so, like, how many do we get? Like, initially, you know, the kids will say, Yeah, you know, about, you know, about two each and it’s like, okay, about two each great. Okay, so I’ll have the extra strip, and then they’re like, oh, no, I want the extra strip. And no mom wants the extra strip. Now the question is, so what do we do with the extra strip? And I mean, it’s it’s intuitive, like the kids that are like, Okay, well, there was two for you and two for you and two for you and two for you. And now there’s this one extra strip. What do I do? Well, try cutting it up. So they cut it in half. And it’s like, is that enough? No. Okay, what do we have to Oh, okay. So what do we call that? That’s fourths? Okay, great. Now, it’s like so how many pieces? Did everyone get two and a fourth pieces of bacon? Wow, nine fourths is the same as everyone getting two and a fourth. That is pretty cool. Like, we can do this stuff. Like you have to think about it a little more. I have an advantage because I’m a math teacher. And you know, I think about this stuff all the time. But there’s so many opportunities where instead of me saying let me cut the bacon. Right? You just let them do it. Now your bacon is cold by the time you get it. But at the same time you you’re you’re helping your kids.

Erwin  

Interesting. Anyway, try and math. Sorry, am I trying to das math when he told us problems? Contextual problems? Yeah, like contextual for sure. Okay. Anyway, try that next because we have a Tesla. So they say, Oh, well, you put too much mileage on the Tesla like we’ll go on to pay for gas and like the van never pay for gas in the van. So I posted some questions and Tao leave a referral for me for someone who does English. That was like you. Yeah, no, I

Kyle  

got none.

Erwin  

Nothing. Yeah, you’re saying are you that? You’re 30 Did I hear that wrong? What

Kyle  

did you ask? You say?

Erwin  

Is there a cow pierce that teaches English teachers?

Kyle  

Oh, yeah. No, actually, there probably is. I’m just probably not the person to help you find them. Actually. My sister she’s, she’s an IB English teacher. So

Erwin  

there you go. Okay, okay. Maybe maybe because you know, math and English. My point is the point while we put the kids the goal with the putting the kids in the Kumaon was we wanted them to be enjoy school, be good at school, and hopefully they did enjoy it. And then hopefully they stick with it.

Kyle  

That is so true. Like, I mean, it is very, and I think this happens in everything and you see it in again, I use sports as a context, because it’s like more, I think more visible to the parent, because they’re like a part of it, whereas they’re not necessarily at school with with their, their child. But like in sports, it’s, it takes a bit of both, like they have to kind of like it, but they might not necessarily love it initially. So they have to get in there. But they also have to have some success, because without success, then you’re not going to like it, like nobody likes doing something that they’re not good at. So what do you do if they’re struggling in a sport? Well, I mean, if you think it’s a worthwhile thing to do, then maybe you go out and you play, catch, you know, to help them catch the ball and throw the ball around, or whatever, whatever the sport might be. Or maybe you sign them up for like a skills camp that might help them see or feel that, you know, success sooner. And that can help motivate them. So the same is true for young children. If, you know, if a young child is in school, and, you know, they’re feeling like, you know, they aren’t understanding or they’re not, you know, feeling successful in math or whatever the subject might be, that’s not going to be good in the long run. Right. And oftentimes, that gap gets bigger. And then obviously, the the, you know, the distaste or the dislike for it gets larger as well. So it’s a really important thing to kind of be in tune and, you know, even asking teachers to you read a report card, what does that say that, you know, oftentimes, it’s very cryptic, you just have to ask, like, hey, like, where are we at? And, you know, what can I do to help support them? And if you do, you know, you’re gonna put yourself and your child in a much better spot.

Erwin  

So Kyle, any contextual math problems around real estate, we could ask your kids? Oh, I

Kyle  

like it. I like it.

Erwin  

I definitely throw what age do you think it’s appropriate? Yeah, well,

Kyle  

that’s a great one. I mean, there’s so much fun to be done. Like with compound interest, as you know, like that’s, that’s, that’s amazing. And actually, I’m gonna give you the here’s the one thing I’m going to give you that I think is great, but it will make you go poor. And I can show you the spreadsheet to prove it is with my my children, what we would do is we would give them their allowance each week, which was their age, or not each, yes, each week each week. So let’s pretend you know, Talia is 10. And she is so we’re not pretending she’s 10. She’s getting her $10 a week, what I would do, and they were really interested in this for a long time, and then sort of faded a little bit lately, but we should get back into it is like she’d collect her $10 a week. And then we put it in this like Jar, we’d have like a save and spend jar, you know, and try to like do like kind of budgeting and all that that’s great to also letting them recount the money every single time is great, because they love doing it. And it’s just helpful. So that’s good. And like don’t do it for them, like let them do it. But then at the end of the month, you let them count up all their money, and to promote them not wasting their money. I would say for every $20 bill you have, I will give you $1 Oh, so that is compound interest at its best. Because if now the problem is is I don’t know if you realise this, but if I’m giving you $1 For every $20 5% that you keep in 5% of mine a month, so work that out in a year. And my goal there was to try to like if you say like, Oh, give me 1% You know, like it’s not going to have an effect on on a on a young child, right? Like they’re not going to see the growth fast enough. And this is why as adults it it doesn’t work for a lot of adults. It’s why interest on your, on your mortgage works is that it’s slow enough that people don’t notice it as much. But if you make it so it’s noticeable, then it’s sort of like Holy smokes, like, you know, as they get $100 or $200. And like, oh, wow, like you have $200. And how many 20s? Is that? So think of all the questions you can ask is like in order to figure this problem out, I’m not saying you know, multiply by 0.05. They don’t even know we’re not talking percentage at all, I’m just saying it’s a ratio. It’s a 20 to one ratio. So you have 20 bucks, I’ll give you one buck. How much for 60 bucks. Now I’m working with ratios. And they’re actually solving proportions without cross multiplying. So that’s a fun one to do. And but like I said, you have to be willing to go poor because it will happen fast if you have a keener enough kid

Erwin  

is the face self reflect, understand. Compound interest is one of the reasons why I’m so frugal. Because why would I spend it when I can invest it? Totally. And that’s always that’s always been my reason why I’m so frugal. Yeah, absolutely. Why would I spend 60 grand in the kitchen away home when I can go spend whatever in my investment property and it’s gonna return me more rent and it’s making them more valuable, more than the 60,000 I spend. Right.

Kyle  

So it’s all it’s all interest. You know, it’s that Nelson Nash, you know, it’s either interest earned or interest spent. It’s like there’s kind of no in between there you know, and yeah, like I think it’s a great lesson for kids. I think it’s a great lesson for us as as adults to be thinking about because it’s it’s happening in the background and very slowly but, but when you see the impact and the influence over time, it’s, it’s quite remarkable.

Erwin  

And then for the listeners benefit again, Millionaire Next Door, including my clients, they often don’t spend it in our homes either. Yeah, it is totally the shoemakers children analogy, like our homes do not get attention. Yeah, our investment properties get all the attention.

Kyle  

If if I had if I had the, you know, the only say, that would be the case for me as well, my wife is a great balance, because she helps me realise that, you know, she’s like you would live in, you know, a shoe box. And, you know, and, and enjoy nothing, you know, if if I wasn’t here, and I’m like, You know what, you’re absolutely right. So she’s good for me. And they say opposites attract. So in that regard, we sort of balance each other

Erwin  

out. Right. I will add that there usually is a breaking point where people do upgrade, for example, I have a client who probably didn’t spend didn’t spend much on their own home. But then they bought themselves a pretty sizable nest, chalet up in Blue Mountain. Very, right. Yeah, I

Kyle  

think at some point, you start to question yourself and say, like, Why did like, why am I doing all of this stuff? So my big, that’s kind of where my head is these days is like, you know, finding that balance life is short, you know, and it’s something you got to be thinking about as, as you’re moving forward.

Erwin  

Yeah, I would say cherish probably some of the shantala because the last one we bought was there and we renovated. Not a huge renovation, but it’s sizable. But yeah, so now now our home is quite nice. But you know, it wouldn’t have been my choice. Yeah, absolutely. I agree with 70s 80s kitchens and fixtures. As long as it works. I’m good, but works in this clean. I’m fine. I love it. Kyle, thanks so much for doing this. Any any final thoughts? Again? Our 17 listeners? Well, some of them have kids, some of them don’t. I don’t know. Any any final thoughts.

Kyle  

I would say anybody who’s sitting there and, you know, has has been on we’ll call it on the sidelines these past couple years has been, you know, probably not a bad idea to sit on the sidelines versus hopping in, as we now know. But, you know, if you’re sitting and you’re you’re not taking that action, you know, reach out to someone in your area, like in our area, you know, we have a lot of people who are have talked about real estate for so long, and they haven’t acted and you know, so oftentimes we’ll we’ll JV with them. So my my partner, Matt Bigley, who’s a realtor here in Windsor, Essex, fantastic, fantastic guy, I actually was saying, Erwin, we got to get him on the show. Him and his team are amazing. But Matt and I typically work with with folks who have maybe, like they want to, and they want to do the learning, but they it’s like time just keeps going by and going by and hey, guess what, that that $20 bill, it’s not getting that $1 compound interest when you’re, you know, just sitting in watching. So I would say find someone who knows what they’re doing. Partner with them, and and learn, you know, learn the process. So that’s what we tend to do. Around here. We try to get really creative with deals and we you know, we we partner with folks, whether we know them or have been referred to them, or they’ve been referred to us I should say, and, you know, we try to we try to also sort of mentor at the same time. So if anyone’s in Windsor, Essex are interested in Windsor, Essex, of course, reach out to myself or, or my partner, Matt Begley. And yeah, we’ll get you taken care of.

Erwin  

Fantastic. Well, I think it’s wonderful advice. For example, the people I find that usually get burnt on investments usually did almost nothing in terms of research. Well, it’s kind of

Kyle  

like it’s like an either or. Right it’s like they either jump in because someone like me says you need to get in, but they they missed the other part. And or the other hand, where they go like, Okay, I don’t want to be that person. So then they sit and they sit and they sit and they sit. And it’s again, remember, we talked about it earlier, on or off? It’s all in or all out. And I think, you know, to me, that is it took me two years, two years to buy that Florida property. I did research every single night, I searched the entire US, like, I know so much from that work, is it worth it? Great. But if you’re not actually doing the work, and if you’re not going to pull that trigger, then I would say you’ve you’ve got to take that next step which is don’t just dive in blind, go find someone and you know, work with them. And you know, make sure that they’re willing to kind of take you under their wing.

Erwin  

check references. Nothing around. Yeah, so antastic and I see that your conference your virtual conference does not conflict with our so I fully expect to see you on November 12.

Kyle  

Yeah, myself and and my my co host, John or come in and I’m still trying to arm wrestle. Matt Bigley into it who I just mentioned there,

Erwin  

get the arm wrestle him hang up. Yeah, well,

Kyle  

you know what, I think it’s a scheduling thing. But you know what I will show up at his house and we will both physically drag him into the vehicle. He was with us the Got the last time we did it. So looking forward to it. Awesome.

Erwin  

All right. Oh, thanks for again for doing this. Thanks for your time. Have fun of hockey.

Kyle  

Yeah, thanks so much. Hey, nice to see virtually again and we’ll see you in person in just

Erwin  

over a month. Yeah, don’t remind me. Thanks, guys. Cheers 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 to my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s much improved demonstration over the one that I gave to my cousin chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself, I got into real estate for the cash flow. But with the rising costs to operate a rental business, it’s just not the same as it was five to 10 years ago when I started there. Forgive the cash flow reduces your risk. The more you have, the more lumps you can absorb. And if you have none, or limited cash flow, you’re going to be paying out of your pocket like it did on a recent basement flood at my student rental in St. Catharines. Ontario. If you’re interested in learning more 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.

To Listen:

**Transcripts are auto-generated.

Erwin  

Hello and welcome to another episode of The Truth about real estate investing show. My name is Rohan Seto. And I was at a conference recently which showed a video of Tony Robbins has talked to you before. And he said something that really resonated with me how he was presented with a business opportunity. And basically he said he could not commit 100% of his resources including himself needed because the opportunity would not fit his personal lifestyle goals. My takeaway is that work and investments need to be designed to suit the lifestyle that you want not the other way around. Not to say I haven’t been guilty of living in times of imbalance as I’m experiencing now as I’m finally getting back into the gym weights that you’d be worn out weights for me are now my workout weights. I’m plenty sore, possibly even injured as I’m hobbling around going hard like Carrie and I are these days with the wall hacker conference. Let’s everything else we have going on for businesses to young kids, a figure portfolio, it all takes work and time. The wealth hacker conferences is only a month away. Number 12. We’ve been making our rounds on other podcasts webinars. And speaking at events I like to say thank you to Elizabeth Kelly Cornish Pearl Christian’s fistful of avorio Austin yay. And with the reporters podcast after this time an accredited Rockstar real estate salesperson Andrew Hines, Diana Lazaro coach mag Maya coach Marianne Glasby, Daniel Unsworth, John Shanker bliss goes on and on for supporting us, especially to all of you who’ve already bought tickets and our sponsors. If you haven’t bought tickets already, I highly recommend that you do. Tickets only go up in price as we get closer to the event. This recession is shaping up to be the one of our generation, fear keeps climbing and the deals are honestly you’re getting better as time goes. So you want to educate yourself on what the experts are doing in real estate stocks, insurance, private mortgages and cryptocurrency for example, the last time we had a real recession back in 2008, the properties I bought back then they’ve tripled in price or more. I’d love for everyone in the community to have to be as successful on this dip, make wise investment decisions, set yourself up for a comfortable retirement. Also, for those who are interested in sponsoring, we are down to like one, maybe three booth left. So if anyone considers still wants to wait to the last minute to sponsor don’t want to wait too long, just reach out to as investments are generally passive and don’t they take that much time, we do need to visit them from time to time and maintenance requests do come in, but they usually go directly to my handy person or my assistant, they can handle them, we just write the checks. Again, to keep this our investments as passive as possible, we have more fun things to do with our lives. My point is we’re good at this level of activity at this point. So we can spend more time with our kids before they turn into teenagers and they don’t wanna be around us anymore. Last week, Monday was our first day back at the gym. As I mentioned, the reason why I can’t walk anymore. I was having to follow my kids programming, as I’m doing the work that my kids are doing a class on their own. So I’ve been showing my kids class, because I’m too out of shape for the adult workouts, the adult classes, it was only when they parked the car at the gym that hit me, for those of you who have gym buddies, you know how you form a bond with them. And that’s what I want with Robin and Bruce. I hadn’t thought this far though. For example, during the run portion of our workout, I low fived each kid as we pass each other on the run, I’m huffing and puffing, as always, as part of the workout which included throwing a medicine ball up in the air several times hanging leg raises, and then running, the adults cheering I had to run more than budgets. So naturally, we’re gonna pass each other. So as I see the kids wandering back on the run, and they alter their path, they actually once they see me come out the door of the gym, they altered their path towards me. So that which to ensure that we can low five each other.

Erwin  

They see me suffer is actually a bit of as like getting a bit annoyed that the low fiving because I’m not in a good mood because I’m suffering. But it was really cute. Anyways, most importantly, with these family workouts is we saved money. On a family plan, we’re buying in bulk. So we’re getting a better deal from the gym. And we also save on time, which is really important to me is being efficient with my time getting my workout in, as this is one stop shop. So when winning on many levels, supporting a good local business, I don’t know. And you know, all the parents I’d speak to I’ve clients and friends with kids and rap hockey and competitive dance. I don’t know how you guys keep up because it’s so expensive and the drives are long. Hopefully all of you listening out there who aren’t our clients. Hopefully your successful investors as well gives them I understand that it’s like $10,000 per kid per rep hockey per per competitive dance. And so hopefully you’re successful like our real estate clients are. I’m not sure how you do it. But if you’re not sure how to be a successful real estate investor, just reach out ask happy to share with you our experience, how we are passive experienced investors in order to afford our kids like those who show if get till cheering I prefer to buy than rent. You know, we just talked about the gym, I’m happy to pay a gym membership, so I can rent the use of their equipment and the facilities. Because I don’t have the room for that in my house. I like hard assets and being control in general, I do rent other things like cottages, hotels, car law, vacation, and I choose not to own those things. Because I want my life to be simple. We used to lease our cars for tax purposes, as those are also generally depreciating assets. We only bought our minivan when it came off lease because it gone up in value turned into investment, unintended, unintended, other examples of wanting to be in control is of our real estate. When we pass on from this world, I don’t want our staff nor our kids to have to sell off our businesses or properties. Hence, we invest in insurance to cover the tax, the tax expense, as the good old government will want their pound of flesh when we pass on. As we prefer to own over rent, we prefer to have whole life insurance over term insurance. If you don’t know why. That’s because you’re among the 99% of teens who don’t know a lot about insurance because honestly, my I don’t even think my parents know. It’s a lesser known investment, partly because it’s generally for people who have who can afford it. And there’s not that many who can afford whole life insurance, I only learned to be what Jayson calls the Infinite Banking concept strategy a few years ago, at my real estate mastermind, where I’m the poor person in the room, and the poor person in the room. So I’m learning the most several members of my mastermind, we’re already implying this strategy. And we even brought in an outside expert from one of the one of the big banks educate us on the subject. Unfortunately, the subject is not the easiest to understand, until I met Jayson Lowe, founder of a centre financial co author of the bankers secret a simple guide to creating personal wealth for Canadians. Jayson is a leading financial professional in Canada, a leading expert. Also him being the client of all the whole life insurance providers in Canada gives him an experience that I don’t know of anyone else having. So we can speak from experience, again from being customer of all each of the different providers at the end of the day China’s policies, because we own them. The shop on our balance sheet, when we show our banks what we own our assets and liabilities, our balance sheet, banks love to see this love to see how life insurance because they treat it as collateral. And that’s an asset. Hence the lenders more money, we can borrow against our policies at low rates. And we can pay it back later whenever we want, much like a home equity line of credit, cheap money, flexibility and control all things I like. Hence our plans in 2023 include growing our insurance policies to explain it further in detail, and give me Jayson Lowe, our guest this week. And also if you prefer reading about the strategy, especially the accounting side, my lovely wife has written a blog post on the subject, how to grow a tax free investment and minimise your taxes. I’ve included a link to those blog posts in the show notes. Thank you, Jayson Lowe. Hey, Jayson, how you doing?

Jayson  

I’m terrific. Erwin, how are you?

Erwin  

Busy. But what’s keeping you busy these days? Oh,

Jayson  

gosh, what isn’t keeping me busy these days, we’ve got a number of operating businesses and our family group of companies and travel was picked up, which I like to some degree in and disliked to some degree. I think zoom has been a really powerful tool for connection and getting business done. It’s changed things forever, in my view, but busy travelling the country talking about becoming your own banker, the Infinite Banking concept and soon to be travelling the United States describing that process as well with our company launching there. And so it’s been really, really busy. I just got here just landed like few hours ago, and we did some recording and it’s just an honour to be here. I’ve seen the pictures. And now I’m in the studio with a live studio audience comprised of one, my teammate,

Erwin  

Peter, and other people have a reference point of how tall you are as well. Exactly. Yes. Yeah. Six, three. I weren’t six, three. Yeah. That weren’t cherry coming in. Because again, we met you. We’ve only ever known you over zoom. That’s right. Yep. Like you are our own adviser on insurance markets and insurance. That’s correct. Yep. Yeah. And then just in this world, we’re now we’re actually seeing people in person. Yeah. I’ve had a couple of times where people say like, oh, you’re taller than I expected. And then I see people as well. You’re expected. I gave Terry the heads up on the way and Jayson is tall. I should be six to six, three. Yeah. All right. Yeah, for sure.

Jayson  

She’s like, No way. Yeah. And I’m a small one in my family.

Erwin  

Like you have some like, superstar athletes, children. No, you know,

Jayson  

yes. Yeah. Yeah, my kids are Oh my goodness. They’re just I can’t write every parent’s so proud of their children. Right. But I just I burst with pride. They’re amazing. They love sports. We love having them enrolled in sports, hockey, dance, basketball, volleyball, like for kids. It’s a 24/7 circus ring of sport. And we love it.

Erwin  

I think she brings up a lot of question. First of all expensive is not? It is

Jayson  

yeah, but you know It’s a worthwhile investment because it’s not just the particular sport, you know that they’re that they’re involved in, and that they’re developing some skill set around hockey or basketball, or whatever it is, it’s learning how to be a great teammate. It’s learning how to be coachable. It’s learning how to really bring out your best potential. Even on the days when you don’t want to go, there are mornings where kids, they don’t want to get out of bed and go, you know, six o’clock in the morning to the hockey rink. But when they get there, they’re there. And it teams relying on Oh, exactly. And that’s the key, right? Like your teammates are expecting you to be there. And they don’t expect you to be there slouching, they expect you to be there bringing your very best. And those are usually the best games and the best performances of the team is when think about even if you like to exercise if you like that workout. I find like myself, personally, the best workout I have is the one I don’t want to do. Because once I get going, and I get into it, I feel great. And yeah, it’s good. Yeah, I’m super proud of my kids.

Erwin  

And they’re, you’re pretty high level. Are they not? Yeah, AAA? And

Jayson  

yeah, yeah, AAA hockey and provincial volleyball. And we’ve had our kids involved in sports from a very, very early age, because we wanted them to be occupied. Right, and to be busy, and to not grow into teenagers and get involved in things that might not be a productive use of their time, you know, but yeah, it’s good.

Erwin  

So how important is multiple streams of income to pay for these sorts of expenses?

Jayson  

Oh, it’s critical. It’s critical. You know, and we were talking about this before recording the show that I work a lot. You know, I’m a workaholic. I’ve been talking about this a lot on podcasts and talking about a lot because Joe Polish of the Genius Network, he helped me understand that workaholism is a publicly accepted form of addiction. So if you have those, those tendencies, and some people wear it like a badge of honour, all I do is work. And I’m being coached on how to make those changes in my life to prioritise things that don’t involve work. And to try and not find a balance. You know, I think work life balance is just really a myth and quite elusive. But really taking quality time to have more freedom of purpose and freedom of relationships, freedom of time, and money, the money piece, once you get to achieving cash confidence, it’s a very peaceful, stress free way of life, financially when you get there. But there’s a whole lot of hard work that you have to do to get there. The key is, is don’t kill yourself doing it. And don’t neglect other aspects of your life that are really important for you to be a whole person for you to really feel fulfilled, and to be fascinated and energised. And so that’s what I’m so grateful to Joe Polish to Dan Sullivan, coaching me on that. I took a six week sabbatical last year, the longest I’ve ever been away from work since I was a foetus. And this year, this year, I took eight weeks. And had you have said to me three years ago, if you and I were sitting here and you said, Jayson, I’m taking a look into your future. And next year, you’re going to be on a six week sabbatical, I would have thought you were Certifiably nuts. Like, are you kidding? Taking that much time away from work? It seemed impossible to me. And so I faced the fear, and I did it anyway, I’m eternally grateful to Joe and Dan, for inspiring me to do that. Joe took a year off for him one full calendar year. And I was like, Okay, there’s no way I’m starting there. No, Baby steps, baby steps gradual and incremental. For some people take a weekend off. Yeah, yeah. Create free days in your life and really honour them, you know, no work, no access to work, like on my sabbatical, my teammates, they turned all my technology off. So all my passwords were changed the alarm? Get in? Yeah. So imagine if this was my office, they changed the alarm code to the office building, so I couldn’t even get in. And it was just all methods of keep Jayson away. Let him really, truly honour his sabbatical. And my team went through that sabbatical with me and the businesses grew and they’re thriving. And so you almost think, Oh, my God, like, am I needed? But that’s just a self manifested, of course, the team needs me and I need them and I would recommend it to any hard working entrepreneur. Not if but when. Take a sabbatical. Take time away.

Erwin  

I think I’ve even challenged the listener, for example, to write it down six weeks sabbatical. Yeah. And then start figuring how you get there. Yeah, I’m sure that you have lots of I’m sure everyone has lots of injections. I have lots of objections when I’m listening to you stop speaking about it. And it started addressing them, write them all down, write them all down. sure how you’re gonna counter them all.

Jayson  

Yeah, right. It’s it’s fear, right? It’s the fear of, I’m going to miss out on something or will my businesses continue to operate well, without me being there? Can I get count on my teammates, right? I say that coming from a place of, and I count on them to keep the businesses afloat. And what Dan Sullivan told me, he said, you know, the truest measure of your team’s strength is when they can’t get ahold of you. So if there’s no way for them to reach you, and they’ve got to be in problem solving mode. Wow. If you’re there all the time, you’re robbing them of an opportunity to grow. And so you said, wow, that’s brilliant. Right, right. And but yeah, I would recommend it.

Erwin  

I’ll share a quick tip, what I do for real estate investors, for example, yeah, one tip I have one thing that I do, for example, is my handyman. We’ve given him $1,000 Cash float. Right. So if he has something under $300, needs to take care of. Yep. He already knows. It makes a tenant happy. Yeah, he already knows to not even ask me. Right. But also, he has the cash available to be able to draw it down for a couple properties. Until he can get back to me on like, when everything you know, yeah, really don’t care. Yeah, just let me know, at the end of the month, because if needed done anyway, attendant care, my name my tenant, more important than your property taking care of.

Jayson  

Yeah, and it’s one or more less things for you to be thinking about and expending energy on. Right. And you’re empowering someone to do something great for a tenant, which is great for you as the property,

Erwin  

my customer and paid me $10,000 a year, you go right, and then just bring it up, because I brought it up, I’m brought up in a while. The tenant landlord relationship is often I think, well, the way I frame it for my clients is, if you spend $10,000 a year at a restaurant, how do you expect to be treated?

Jayson  

Very well? Very well. Very well. Yeah.

Erwin  

And so that’s how I frame my my tenant relationship with my my everyone who’s on my team. Yeah. Right. I expect him to be taken care of. Absolutely. Right. They have an issue. You need to deal with it. Yeah. And of course, you should deal with it. Because somebody has paid hourly. And there’s more money for to be made. Exactly. Exactly. And then yeah, it’s just instructing them to like, look around while you’re there. Look around for stuff that need to be fixed. Exactly. Right. me not to do it, then. Like add it to the springing schedule, for sure. Right. So Jayson, I don’t know if I told you the story. But how you ended up in our world is because the friends of mine Yep. Lots of friends of mine have sizable real estate portfolios. Yep. And it was like, no, no, no, no, no, no, from like, every lender until one of our friends shared how and one of my real estate masterminds like a high end mastermind was sharing how they were able to they were approved for three more mortgages, plus a refinance on their own principal home. Because they purchased a whole life insurance plan.

Jayson  

Yeah. Dividend paying participating whole life insurance. Yeah.

Erwin  

And then I was like, Okay, I’ve heard about this whole life insurance thing a couple times. Now that now you get paid by interest. Because any investor like almost everyone, every investor runs into a wall on financing. Yep. And then here, we have a totally legal way that opens up the door. That’s right. So but also, before we were recording, you explained to me that so my understanding, sorry, my understand is not complete. That’s why I have you on Yeah, I only generally see rich people doing this, right. But you’re telling me that anyone should be doing investing in whole life insurance?

Jayson  

Most definitely. Right? You know, if you if you think about dividend paying, participating whole life insurance is just a tool. And it just so happens to be the best tool to get the job done of becoming your own banker. And so when you walk into a commercial bank, and commercial bank doesn’t indicate that you have to be wealthy to be a depositor at the bank. And so it doesn’t care. Yeah, the bank, they want that capital coming in, and they want that money flowing. And so going back to your earlier point about what happened with you know, this person in your high level real estate mastermind, here’s something that so many people just don’t know, to operate as a commercial bank, you have to maintain what’s called tier one assets. And tier one assets can be comprised of gold bullion cash, and something that is aptly named Boley bank owned life insurance, and commercial banks by dividend paying participating whole life insurance contracts by the truckload. And it’s one of their best tier one performing assets because of how stable predictable reliable and all of the underlying contractual guarantees.

Erwin  

So pinstripe distance depositor, so this is something actually appreciates versus cash and gold big time

Jayson  

and it but it’s contractually guaranteed to appreciate all right, and it can’t go backwards nor

Erwin  

guarantees scares me and it can’t go backward.

Jayson  

So I was sharing with Terry earlier, the the economy recedes, cash value goes up, the stock market falls cash value goes up. The real estate cycle turns against you. cash values go up. So if you’re sitting down with a lender, and you take participating dividend paying whole life out of the equation, and the lender says Listen, you’ve hit a brick wall. Yeah, right. You’ve, you’re leveraged

Erwin  

to the max. Yeah, we’ve already accounted for all your gold. We’re not enough. Exactly. We’ve

Jayson  

looked at all of your assets. We’ve looked at your all of the ratios that we need to, to determine whether or not we can lend you another dime. Think like the banker for a second here, if the lender understands, because this is a tier one asset on their own balance sheet, right? And you sit down now as a prospective borrower, and you say, well, listen, I’ve accumulated some dividend paying, participating whole life insurance. I’ve got cash value, I’ve got a guaranteed death benefit. Well, the lender, if they’re halfway smart, which they are, the lender is going to go wait a second, you’ve got an asset on your balance sheet that’s contractually guaranteed to grow. We’re quite familiar with it, because we buy it by the truckload. God forbid if the unthinkable happened to you, there’s a tax free windfall of money, that’s gonna show up exactly when it’s needed the most, does that make you a better prospect for lending? Or worse?

Erwin  

Well, if people understand the probate process, then it’s gonna say something’s you’re way better, right? And but the lender,

Jayson  

the lender wants to find every reason to get the deal approved, right. That’s why they’re in the lending business. So if you give them another tool from your toolkit that says, Listen, this makes me a better qualified borrower. But that that really that secondary, it’s secondary to you have a policy or you have a system of policies in place, you’ve got the best tool to get the job done. But if you don’t know how to use the tool, right, you’re likely not going to turn out any good work with the tool. And in fact, you may end up breaking the tool. So you got to work with a good coach who can lead you through how to implement this process, the dividend paying participating whole life insurance contracts are just a product, becoming your own banker, the Infinite Banking concept is a process and we’re going to touch on this at the wealth hacker conference fabric to really pull that together for people where they’re gonna go, Oh, my goodness, I grasp it, I get it. I know that, fundamentally, someone, some organisation must perform the banking function as it relates to my needs. And it’s not just temporary, it’s for the rest of my lifetime. So if you’re a real estate investor, and you’re active, what you’re doing is you’re making the wheels of the banking business and the real estate business turn in that order. You’re not controlling the financing function. The process of becoming your own banker has nothing to do with rates. It has nothing to do with interest rates, rates, or return any of that. It has everything to do with how you go about financing the things that you need in life. Think of all the things that you need to finance throughout your lifetime.

Erwin  

Right real estate investing.

Jayson  

More than we’re worth, yeah, but no, but think about even as a real estate investor. It’s not just the property. It’s everything that goes on with the property, it’s unplanned vacancy, it’s bad debt, it’s new appliances, new floors, it’s our loans, well currently be its new roof, new shingles, whatever it is, the money must come from somewhere to take care of all those things. So if you can control not only how you’re financing your real estate investment portfolio, but you also have total and absolute control, over ready access to a growing pool of financial value called cash value, that increases every day and it cannot go backward. And you’re paying no tax on the daily accrual of that cash value. How much of your capital Do you not want in that entity? It’s just a logical question. And you mentioned earlier Well, you don’t The only time I ever heard about this was from wealthy people. Yeah, that should tell you everything you need to know that wealthy people

Erwin  

are doing. So if just to add, like my friends, Tom, and my mentors of mine, Tom in Nicaragua, they also brought this they also there you go this as well, like, okay, they’re pretty smart, too. They’re gonna keep digging into this. How long?

Jayson  

Here’s a question that my late mentor are Nelson Nash, who wrote the book, titled, becoming your own banker. It’s 92. page read. It’s a great book. If you haven’t read it, you have an opportunity. And Nelson asked me a question. I’ll never forget it. So we were standing inside of the the meeting room at the annual Infinite Banking Think Tank conference. And I’ve been privileged to speak there, this 2023 will be my, I think, my 11th or my 12th consecutive speaking appearance there. And Nelson said to me, he said, Jayson, I have a question for you. So we’re standing at the back of the room. There’s a speaker on the platform delivering a great talk. And he says, Jayson, I have a question for you since you’re Nelson. He said, How long do you think a skyscraper would stand on a weak foundation

Erwin  

with Coping With Climate Change? And I said,

Jayson  

No, not very long at all right? So he said, Listen, you can have all the tools, the calculators, you can have all the knowledge. But if you do not understand the ridiculous simplicity of what becoming your own banker really is, and the foundation that that represents in your financial life, you can stack as many things you’ll see investment, crypto, stocks, mutual funds, gold, you can stack all of that really high and build a really tall skyscraper but if you don’t have that strong foundation, And it’s gonna topple over. And how many people have you met in your lifetime who haven’t experienced some kind of financial setback as it relates to any of those things that I just described? Yeah. Dividend paying, participating whole life insurance. Never has been, never will be an investment. It’s a unilateral binding contract, you become a co owner of the life insurance company. And in Canada, interesting law trivia has never failed to produce a divisible profit in any year of operations since inception. And in Canada, that year is 1847. So I want you to think about all of the calamity that’s occurred the past 176 years in this country,

Erwin  

and to come political turmoil, the Great Depression,

Jayson  

COVID-19, h one n one, SARS, 34, recessions, the tech bubble bursting in early 2000. World Wars, oh, 809, world wars, you name it. And these life insurance companies continue to be the most financially solvent institutions on planet Earth, the wealthy understand as everyone, regardless of how much money you’re making, as everyone should understand, is that your money must reside somewhere. So what better place to have it reside than here? And then from that very place, you can set about achieving all of the financial objectives that you have in your life? I’ll tell you, in our family banking system, we’re going to be talking about family banking at the wealth hacker conference, plug for the conference. Have you ever heard the expression, that one decision, one decision can change the course of your life? I’m gonna have a conference come to the conference. And so being at the conference, you’re going to hear all about family banking, as a way to think about this. Oh, people should bring their significant others. Oh, yeah. Be there be there with your spouse? It’s better to hear from you than here.

Erwin  

I do it all the time. I can’t explain this. Cherry. I need it in the same room. Yeah. Right to be there. Yeah. And we’re going to talk about the whole get your whole team on board. Yeah. Right. So your significant other, maybe your adult children? Yeah.

Jayson  

Yeah. Because money, the Think about it and in simplicity, your viewers, your listeners, they’re earning income, rental income, g4 income, interest, income, dividends, whatever source of income? Is it not true that at present, all of that money is flowing through the books of someone else’s bank, I say that, again, someone else’s bank, how much of that flow of money do you want, flowing through your system versus someone else’s logic would say all of it, but it cannot be achieved overnight, is meant to be achieved gradually and incrementally over a period of years. I’m 15 years into my journey. I don’t rely upon a commercial bank for anything other than the convenience of debit, that to a real estate investor is like heaven on earth. Like that is my beliefs. That is what I can want. Like, if I don’t have to rely upon a commercial bank for anything other than the convenience of debit, I feel peaceful. I feel stress free, my net worth goes up every day, no matter what. And it can’t go in the opposite direction. It cannot go backward. From that foundation. I build my skyscraper, I buy businesses, I invest in real estate, I lend capital, all of these things that I’m able to do, because I know that that foundation, it only cures stronger every day, every single day. And so how much capital do I not want flowing to that foundation?

Erwin  

No sweetness all the conference? Absolutely. It’s not the easiest to understand. And I don’t fault anyone for not understanding this. Yeah. Because I read the psychology of money not long ago. And we just haven’t been that financially well off, like forever. And many Canadians, for example, if they’re a real estate investor and listening to this very often they’re the first generation ever, of their line to be successful financially. Right? So the whole idea of savings of buying large quantities of gold, or insurance is like they’re the first generation where that was ever available to right so I don’t I don’t fault anyone for not understanding this. I didn’t learn this from my parents that we had to go to and I had to learn this ourselves. Right? Our parents were poor immigrants. Right so and then my understanding that helped me with the understanding where and also there’s more than one type of of whole life insurance like Peters clarify for me for that, because I actually have a friend that bought the wrong one. Yeah, and didn’t have all these nice things available to them because he had the wrong product and it’s right there restructured incorrectly so they didn’t get all the Bankston love them, like

Jayson  

money and they didn’t get that maximised, rapid accumulation of cash value and so on. There’s ways to engineer a policy that would not be ideal to implement this process. It doesn’t mean that the policy is no good. It just means that it is not optimised for this process. Right? So that’s where we come in,

Erwin  

right? And then also, whole life insurance ever sees the short term for this. It sounds very much like insurance. As in like I see, for example, I’ve used gold. Yep. And holding cash as insurance, right? They’re not investments, right? I think like, for example, the average Canadian understands why you have a little bit of US dollars, right? It’s not an investment is for you to have available to you. Should you ever go to the states and use it? Yeah, yeah. Right. It’s insurance. So then you don’t have to be exposed? You know, what the exchange of money all the time? Right. Okay. So I have some sort of understanding. Now, you mentioned that you funnel all your money through the strategy. That’s correct. And you use it to actually buy other assets and investment. That’s right. So you use it to you mentioned lending? Yep. So can you kind of touch on that? Like, how do you how do you flow that through? So then you’re like, you’re running your own mortgages, for example.

Jayson  

Yeah. So we, we do a lot of bridge financing. We do a lot of private lending for

Erwin  

you. So you’re like a mortgage broker? That brokers these deals for you? That’s a part of it. Yeah, like we, I’m trying to think the easier model for sure. I used to Yeah, late and we,

Jayson  

you know, did a deal here recently where a fellow was renovating a cottage and needed some some capital and was a, you know, a great candidate for borrowing based on all of our criteria. And so we put up the capital we’re earning interest in the flow of the money is really simple. So we contact the life insurance company, and we request what’s called the policy loan, and that policy loan is unstructured. So what that means is that there’s no repayment schedule. The policy owner, in this case, me, I control the repayment schedule, the frequency of payments, the amortisation timeframe, I control that. So that puts me in a position of comfort, and it makes me feel peaceful about the whole deal. My total cash value in the policy continues rising uninterrupted by the loan. So if I look inside the policy, and the policy has $100,000, of total cash value, and I’ve got a million dollar death benefit, and I need 50,000. To lend to a borrower, I contact the life insurance company, I borrow against that 100,000 Without withdrawing anything from the policy, because cash value is not really money, it’s a value attributed to the contract. So I’m borrowing

Erwin  

against that, to start Jayson has that contract valued, it’s determined,

Jayson  

the value is determined by the guarantee that the cash value must match the total death benefit by age 100. So it all begins with the death benefit. And then the cash value follows the leader, basically. So the money comes from the insurance company by way of a phone call or submitting a loan request document, the insurance company asks two questions. Would you like us to mail you a check for? Can we electronically deposit that money into your account? I want your real estate community to just hit the pause button and rewind and listen to that again. Can you bring in all of your financials for the last 322 years and show us every penny that flows in and out of your life? And there’s none of that? Right? No lengthy nosy credit applications?

Erwin  

Nothing. But because the the insurance company knows what the underlying asset is, while the

Jayson  

insurance company that’s a good point, the insurance company itself is guaranteeing the collateral for the loan. Yeah, right. So the moment that I get that 50,000, from the insurance company in my hands, they place a lien on my death benefit for the loan balance

Erwin  

because they understand exactly what the underlying asset is, which is their own versus like versus typical loan is based on your ability to repay whatever collateral you’re putting out of the house, your car, you got your Bitcoin, whatever,

Jayson  

you got it. And so the insurance company says, Listen, we’re gonna lend you the money. It’s unstructured. So just pay it back on your terms. God forbid, if you pass away, and there’s loan balance outstanding, don’t worry about it, the death benefits can extinguish the loan balance and the remaining death benefit insurance policy pays them back. There you go. And so look, think about it from this vantage point. If you went into a lender to finance a deal, and the lender said, or when we’re happy to lend you this money, repay it on your terms never happens. And God forbid, if you pass away, don’t worry, there won’t be any indebtedness left behind, right. Oh, and by the way, we’re going to contractually guarantee that the property will increase in value every day, and I can’t go backward. You and I wouldn’t even be recording right now. You would have never even had a conversation with me. So this enables you to become the banker in your life. What does that mean? It means that you’re taking control of that function as it relates to your needs. The money flows into my hands. It’s the life insurance company’s money. It’s not Jayson’s money. Jayson’s money is growing in the policy uninterrupted. The money flows to the borrower. The borrower is repaying the loan on my terms, who’s the banker? Now? You’re the lender, the lender in both transactions, the policy loan and the lending deal. Money comes back with babies Right called interest greater than the interest rate you’re paying greater than my cost to capital, right? Because capital has to flow at a cost. What I’m doing is I’m taking capital and then putting it right back into my aquarium. So that when the next high calibre opportunity tracks me down, I have ready access capital to pounce on that opportunity, right? We’re in skyrocketing inflation, interest rate uncertainty outside of the fact that it just keeps climbing political turmoil, we know the government’s going to need more money in the future than what they need now. So we definitely know there’s going to be changes from a tax perspective. And if you look at all of those elements of uncertainty, that creates stress and pressure for people

Erwin  

learn lessons as part of their Yeah, because we all a lot of us think there’s gonna be more the tax rates are going to increase. Yeah, like capital gains, exemption is currently 50%, it may go up, we should all be looking for alternative investments that doesn’t have a tax liability. So

Jayson  

you beat me to it, the participating dividend paying whole life insurance contract, which is not an investment, it’s a unilateral binding contract. The only party that I contract that’s required to make and fulfil promises is the insurance company. And guess how often they failed to fulfil those guarantees. It’s never happened. And so if you know that, the fundamental truth that your money must reside somewhere, and you store capital inside of this entity, and you co own the life insurance company, and you know that in these economic uncertain times, opportunities of high calibre are going to present themselves. So if you need to go to a commercial bank to take advantage of that opportunity, or slower the odds change in this climate, versus somebody calls me and says, we have a distressed business or could be property, property, they need cash, and I have ready access to a growing pool of financial value on demand. And on my terms, I say that, again, I have ready access to a growing pool of financial value on demand. And on my terms, should we give it your cell phone number now I, I can take advantage of that opportunity. Immediately. I don’t have to go through the strain, right, that someone’s standing next to me does, right, who’s not practising this process in their lives?

Erwin  

Because most people think they just have to be holding cash, right? In order to take advantage of these

Jayson  

right, but where are they storing it in someone else’s caches. And so if you think about it, Nelson, and again, I can’t express the amount of gratitude that I have for my late mentor, or Nelson Nash, who, again, wrote the book titled becoming your own banker, it’s an amazing read, he would often say, when you have ready access to capital opportunities of high calibre will track you down,

Erwin  

through giving your cell phone number, email address.

Jayson  

Or when I would say to folks get in line, I get contacted daily with opportunity. And I’m blessed. And I’m very, I feel grateful for that. So Jayson,

Erwin  

let me pause you there. Yeah. Because beginner investors are always asking, like, where do I find deals, right? And a good way to find deals is to let your network know like your realtor, your lawyer mortgage person, if you let them know you have capital ready access, but you don’t need approvals for yet. Right? You better believe you’re on the top of their list when they when they got something good all day, every day, right versus the person that has so Oh, I gotta go gotta pre qualified. Yeah, submit all my stuff for the bank hoping for a pre approval in two weeks?

Jayson  

Yeah. Would you rather be in a position of total and absolute control? Of course, anyone? Anyone who possesses logic would say, Yeah, of course I want to be. But we live in an instant gratification, everything. instant food, instant coffee, you could order a parcel from Amazon, and we’ll be here before you shut the office down today. This is meant to be achieved gradually and incrementally over a period of time, right? Part of the gibberish slow process is right. I am 15 years into my journey. And if you would have told me 15 years and one day ago, that I was going to be where I am today as a result of implementing this process. I didn’t see it. I didn’t see it. It took executing it took simulating it took a commitment it took first and foremost it began with the desire the desire to change. And then going through that period of introspection where you look at all of your financial resources and you say okay, 100% of my existing financial resources are already prioritised for some thing. I’m already prioritising every penny that’s flowing through my life. If I want to begin to implement this process of becoming your own banker, the Infinite Banking concept, the financial resources are already there. It just requires a reallocation of priority. It’s not going out and creating new money where no money existed before. It’s taking existing financial resources and reallocating reprioritize and I began to do that gradually and a incrementally over a period of time. And fast forward to today we’ve got 6767 participating dividend paying whole life contracts in our family banking system. And at the the wealth hacker conference, I’m going to explain why I’m going to unpack that. And I’m going to talk about the advantages that that represents, and that how people in attendance at the conference, they can do this too. They just need to realise this isn’t something that’s going to be achieved the day of the conference. It’s going to be a period of years, years. But again, I gotta give credit to Nelson, he said, You need to be thinking three generations past your own. Because the generations that come after you are going to need the use of money as well. And not if but when you die. If you do not have this foundation in place, you’re going to trigger a pretty significant terminal tax bill. where’s the money going to come from to pay it? It’s called, it’s called liquidation. Yeah, selling off assets, right. Whereas if you want to talk about the term investment, in my humble view, the best definition of an investment is one that pays you the most, when it’s needed the most. The moment you dye those unilateral binding contracts, those insurance contracts are going to pay, it’s called a promise to pay. It’s a contractually binding, promise to pay, and that money shows up and there’s no tax bill attached to it. So now you’ve got all the capital necessary your family to take care of any terminal tax obligation, and they still get to own all of the assets, you work so hard to accumulate over your lifetime. So when you speak to someone wealthy, and you ask the question, is there anything stupid about doing that? Any wealthy individuals gonna say? No, of course not. Like, generally wealthy people have I want to buy as much of the these unilateral binding contracts as I can get my hands on.

Erwin  

No chair wants, I should grow bigger makeup policy bigger next year. That’s great. So actually, you mentioned 6767 policies within your own family. And we were talking before recording, I’ve been at many parties and whatnot. And people people know, I like to make money. So I don’t know. I mean, that’s why this comes up. They say to me, like, you know, you can get poppin you take out a policy and so on. And that’s how you make money. And I’ve always been like, I don’t understand. confused mind says no, right. Well, and then you tell me, you have 67 of these. This is some crazy idea. No, it’s, there’s nothing crazy about it. And this is basically what people are talking about at these dinner parties. Like did you know you can buy insurance on people? Like I can go buy insurance on them if I wanted to?

Jayson  

Yeah, I mean, you need to have a beneficial interest in the person that you’re insuring. But it brings up a point that we mentioned before recording around diversification. I’m hearing that all the time, especially now you need to be diversified. Okay, well, what is the root? What is the root of the philosophy behind diversification? Well, the root is you diversify, so that you don’t lose it all. And hopefully, that gives you mental peace. Is that would that be fair? You’re not gonna lose it all would give you bouquets, I’m diversifying so that I reduce the odds of losing it all. Okay, I get it. Yeah. Well, I’m diversified in lives insured. That’s my diversification. I have policies on my nieces and nephews, kids in law’s business partners, to name a few. So I’m diversified. All right. And there’s no risk of me losing it all.

Erwin  

Sorry, why would you take a policy on someone else? Why can you just add to your own policy?

Jayson  

Oh, well, you’re limited to the extent of the maximum death benefits that the underwriters

Erwin  

hat on the individual? Yeah, right. Exactly. Any more individuals? Yeah, just scale.

Jayson  

And that’s how you diversify. And I respect and I just say that in good humour. I respect people’s financial objectives. And they’ve got money scattered in a number of different things. And you’ve heard the saying, Don’t put all your eggs in one basket. I disagree with that wholeheartedly. If I control the basket, where else do I want my eggs? Like, honestly,

Erwin  

the only good part of that point and not putting all your eggs in one basket is most people don’t understand all the baskets,

Jayson  

right? And so if you if you have total and absolute control over that basket and understand everything about it, how many eggs do you have yours? Do you not want residing in there? Think about any period of time Jeff Bezos did okay with this one, but oh, you sure did. And think about points in your life where maybe you’ve lost money. And I can promise you and I’m not a gambler. But if I was to if I was to bet, I would say that it had something to do with you handing control of that money over to someone else, more often than not. And this foundation of becoming your own banker, the process. It helps you to understand that regardless of what’s happening in the economy, with interest rates, with inflation, etc. The process of banking goes on no matter what. So who is the banker in your life? It can and it should be you so that through periods of time, like we’re experiencing right now You can rest easy knowing that your net worth is going to be larger tomorrow morning than it was when you went to bed. Not because you’ve got some, you know, secret code to crack there and share with people and hey, you know, come by my my stuff, and I’ll teach you how to do all this. It’s because you’ve taken control of this financing function as it relates to your needs. That’s the essence of becoming your own banker. The insurance contracts are just a tool. They’re just a tool. But I’ll tell you, it’s been the best tool I’ve ever owned. I’m not really like, I don’t do handiwork and things like that. It’s not part of my unique ability. But this is the best tool I’ve ever I’ve ever owned.

Erwin  

And your your experience isn’t alone, especially right now. Oh, gosh, we were chatting earlier this week. And you’re telling me all these clients, here’s their balance sheet. This is the only thing that’s green.

Jayson  

Exactly. Yeah, clients are contacting us literally daily. And they’re saying listen, like, we heard you shouting from the rooftops, when we were in the lowest interest rate environment we’ve ever experienced when gaining access to capital was no more difficult than it would have been getting a gumball out of a gumball machine.

Erwin  

And everything. Yeah,

Jayson  

everything. sunshine and roses. Yeah. And we heard you screaming from the rooftops? Not if but when we start experiencing what we’re experiencing right now. Your policy values can only continue to go up, and people are contacting us and saying, Look, I’m taking a look at the balance sheet. And this is the only thing on my balance sheet that keeps increasing in value outside of the fact that I may have some pennies put away in a savings account somewhere. It’s what a peaceful, stress free way of life it is. When you get the bankers out of your life.

Erwin  

Speaking of stress, there’s people out there including some of our clients who are who have no more access to lenders are saying no. Yep, is not getting a whole life policy going to help them

Jayson  

all day long, all day long. And the longer you wait, the more you penalise yourself.

Erwin  

It’s kind of crazy, because for example, part of the reasons why a lot of us invest in real estate is well the bank would give us cheap money on it. Yep, the cheapest money for this. So there must be something good about owning real estate. Oh, for sure. You’re talking about that this is categorised, this is grouped in the same category as gold. In terms of all water all value?

Jayson  

Well, hey, let me let me share it to let’s talk about collateral value, sir, when I’ll put you in the driver’s seat as a policy owner, okay, so you’ve got a policy, and it’s got a million dollars of total cash value, it’s got a death benefit of $2 million. I’m just picking arbitrary numbers. And I’m putting myself in the position, the driver’s seat of owning a piece of property. So I own a piece of property free and clear. It’s unencumbered. And it just got appraised that wouldn’t you know it a million bucks. Now you and I decided to go to lunch together, but our lunch break is going to go to the bank. So we go to the commercial bank, and you and I sit down and the commercial banker says Irwin, we’d be more than happy to give you an operating line of credit or just an advanced loan. And we’re going to lend to you a million dollars. You can capitalise the interest and just wipe out the balance when you die. Or you can make repayments at your convenience, and Irwin’s going Wow. Thank you, fantasyland area. And then I say, Well, what about me, I have a property that’s unencumbered, it just here’s the appraisal, it’s been appraised at a million bucks. Well, we’re gonna have you sit down with a Loan Manager. And if you can clear your schedule for the afternoon, we’ve got documents for you to fill out and a process for you to go through called qualifying. And presuming that you do qualify will extend to you a home equity line of credit for 650,000. Now, if you want to bump this up to 80% loan to value, it’s going to be a principal and interest mortgage for the balance. So you’re going to do things on our terms. What does that tell you about the strength of the asset in the eyes of the lender very different, night and day, night and day.

Erwin  

And if you don’t have a job, you’re you don’t know how to get in that mortgage? Not a chance.

Jayson  

And so I guess in simplicity,

Erwin  

sorry, I don’t have to have a job either. You’re telling me the commercial, commercial bank and what just give it to me.

Jayson  

If you don’t have a job, the commercial lender will likely get you to about 75% loan to value all right, no qualifying. above that. You can’t be insolvent or pending insolvent. You can’t have derogatory credit. There’s still criteria you’re borrowing from someone else’s bank, the VA, the flexibility and the control. Just how would it make I’m speaking to you now the viewer, the listener, how would you feel being in a position of total and absolute control financially as it relates to opportunities that are tracking you down whatever financial objectives you have, that you want to set about to achieve? If you’re in a position of total control? It’s very peaceful. very peaceful. Isn’t that good?

Erwin  

And the folks who say who say they have life insurance?

Jayson  

Do they have the same benefit? If they only have temporary insurance like term life insurance, they would not have that same benefit, because you’re only renting the benefit.

Erwin  

In term insurance. Life insurance is generally mean term insurance. Yeah, people purchase, I would say like 95% of people who say they have life insurance, it made it really determined.

Jayson  

Yeah, yeah, I would say it’s so common, and

Erwin  

especially if it’s via their company benefits. Oh, yeah, that always isn’t.

Jayson  

Yeah, it’s group employment benefit, which is, which is different. But if you look at it from this perspective, here’s another interesting bit of trivia, if you take out term life insurance, which has a purpose, it’s it, obviously, but if you’re renting the benefit. So if I could get you a million dollars a death benefit for 35 bucks a month, and you were life insured for the next 10 years? What do you think the odds are of you dying in the next 10 years, hopefully not good. The insurance company, if they thought you were gonna die during that 10 year window, then they’re making a really lousy bet by only collecting 35 bucks a month in exchange for a promise to pay a million. That’s why less than 2% of Term Life policies ever pay out a death benefit? Oh, so three, four returns? Well, but think about it. It’s a great return for the life insurance for them. So if you if you’re a dividend paying participating whole life insurance policy owner, you co own the life insurance company. So that’s a great return for you as a co owner of the business, isn’t it? At least you benefit off of? It creates an enormous cash float. And what do you do with cash float?

Erwin  

Right? You multiply it? So instead of renting, you’re getting some equity. Old from day one? Yeah. Yeah. Isn’t that good?

Jayson  

So real estate investors. I love equity. Right? It’s a match made in heaven. And

Erwin  

the analogy often I often make is like, if you don’t like but the price you’re paying for gas at the gas pump. We got a Tesla, but you know, buy some shares in the gas company. Buy some Suncor? Yeah, exactly your pay, the more you’re making. Yeah, exactly.

Jayson  

And, you know, as it relates to, if you just think about investing in stocks, my own personal experience is, and this may sound a little corny, but it’s the honest to goodness truth is I took a look inside my pantry, I took a look inside the fridge, I took a look inside the medicine cabinet. And I just literally looked at all the products that I consumed, no matter what’s happening in the economy, or with inflation or anything. So am I going to keep shaving as inflation skyrockets? Yeah. Am I going to, you know, continue eating cereal yet? Am I going to and so on? Do I keep powering on this device? Yeah, well, I wonder who makes the components that puts us together your iPhone, right. And so that was just my ridiculously simple approach to it. And it’s worked out incredibly well. And not because I knew how to time a market. But because I knew that I was thinking long range as it related to the consumption of these goods and services, and then take all the dividends from owning those stocks and reinvesting it in more stock, and it just grows and grows and grows. where I’m going with that. I do not know on any given day, what the value of that stock portfolio is gonna be what I promise you, I know on any given day with the value of all my participating dividend paying whole life contracts are today and what they’re going to be tomorrow. And the day after that. And the day after that. And so on. diversification, yeah, well, for me, it’s it wasn’t an either or.

Erwin  

Oh, no, it should be it was and yeah, yeah, yeah. I think the both the wealthier you get, and the more education one gets, the more diversified they are.

Jayson  

I think so. Yeah. For me, I try to stick to what I know,

Erwin  

will add to that something we were talking about before is you and I were discussing. So to give some context, statistically, we’re living longer than ever. That’s right. Yep. COVID-19 was the first time that we actually regressed in our increasing life expectancy. That’s right. We’re wealthier than ever. Yeah. Even with this correction we’re having we are still Yeah, we are. We have a blip right now. But still, generally, we are wealthier than we were in 2019. Yep. Yeah, I would argue mental health is probably one of the worst it’s ever been.

Jayson  

Yeah. Yeah. People are really, really suffering. And one of the

Erwin  

lessons I’ve seen a lot of real estate investors take is they understand most of them are active. Yep. Many of them have exited. And now they’re not now they’re looking where to put that money. Right? Not only where they’re looking to where they put that money, but generally I find they’re looking for more passive. Yep. more peace of mind. Yeah. less wear and tear on their mental health. Oh, God. So where would this fit on the spectrum?

Jayson  

Okay, well, let’s just check a few boxes. Okay. We have contractually guaranteed daily cash value accumulation checkbox. We attract no tax on that daily accrual. Oh, that’s big saving. Check the box. The policy is exempt from the passive investment income tax rules. Check the box. We have an ever increase Seeing total death benefit of which the total cash value must grow to match, check the box, we have ready access to capital on demand on our terms, check the box. When we borrow against that accumulation, we’re not interrupting it. So now the real estate investor in that example, who has liquidated and they have this enormous stockpile of cash. The truth is, is that the money must reside somewhere. If you store it on the books of someone else’s bank, then you’re enriching someone else’s stockholder. If you store it on the books of your own system, you’re building your own warehouse of wealth, and it’s indestructible. So you pour this strong foundation to go build your next skyscraper that’s actually going to stand and can’t fall over. And from that very place, you can do all those things financially that you set about to do. And we find, at least in our experience, and we deal with real estate investors coast to coast, is that once they catch this, they know exactly what to do. They want to get as much capital flowing through this tool as possible, understandably so.

Erwin  

And then Jayson, something kind of unsettling the same lines. Part of my own education in this area was I had questions for you. Yeah. Because there’s a couple of vendors that offer similar products, right. And you told me that you actually have money with all of them. That’s right. So you’ve sampled everyone’s services and products? Absolutely. Because what I found is when people find out what which one I which company I went with, they always have like negative things to say about some positives and negative, often negative. But I found the same shoe with my choice of cars. Yeah, like I used to drive. I drove a BMW for 10 years. Yeah, lots of people didn’t like BMWs. Now Tesla, and like, even more polarising. Yeah, totally cool. Tell me, how would have been a terrible choice it is and how bad for the environment? That is? Yeah. But again, you’ve sampled everything. That’s right. Because we weren’t me. I imagined we weren’t everyone out there. Yeah. And

Jayson  

the only reason I did it is because I wanted to speak from a place of authenticity, right? Not from opinion, you’ve put your money in everything precisely. And I wanted to go through that journey, as a customer. Because at ascendant financial, we want to be continually developing a deeper understanding of what exactly it is the clients we have, and the clients we want to have truly value. And then we will not put them in any situation where they’re not getting what they truly value, right. And there’s a lot of great companies without running an advertisement for any one particular life insurance carrier in the country. There’s a lot of great carriers in the country, not all of which are suitable for a great client experience as it relates to what we’re talking about. And so it’s okay, it’s okay that people have different service offerings. Oh, yeah, for sure. And for me, it was just, I want to be able to speak to this from a place of authenticity. It’s like, I’m a customer of all these carriers. So I can speak firsthand, and share fact. Right, right. There’s everybody has an opinion, which you’re entitled to, that’s fine. But I will say that many years ago, I’m speaking to 2011 To be precise. Nelson Nash said to me, my very first Infinite Banking Think Tank conference. He said, Let me ask you a question. If you’re dealing with a Mutual Life Insurance Company, that means that they’re not publicly traded, there’s no stockholders. Is that private? Yeah. Technically, yeah. Yeah. Because you’re not on the government’s public. Right. The government doesn’t know that you have those contracts in place. You’re it’s private, private contract, check, check the box. When you request a policy loan, is that a private loan arrangement between you and the insurance company that you call? Yeah. If you have a board that looks after the day to day operation of this insurance company, and they have no one else to be responsive to except for you, and every other participating policy owner, right?

Erwin  

Because you are the owners? Right? Right. Is that an event customers are the owner you got it. Somebody you care about? The owners, they tend to be the customers? Exactly. He said,

Jayson  

Now let’s contrast that with a stock company very different. You have a board that is responsible, primarily, first and foremost, before any other human being on the planet,

Erwin  

the stockholder. So examine themselves to

Jayson  

immediately you’re dealing with a distinction that needs to be well understood. It’s not that one company is bad and the other one is good, and all the noise that you can hear out there, which is just all a bunch of nonsense. All I know, is that if I’m dealing with a company, I have a private contract, my dealings are private. The board is only responsible to fulfil the mandates to me and to every other participating policy owner. When a divisible profit is to be distributed. The sole beneficiaries of that divisible surplus are the owners. 100% of the owner owner’s equity belongs to the owners, not stockholders. There’s a reason why Nelson said in his book, ideally, you want your contracts to be placed with a mutual company. That’s what he meant by it as a mutual beneficial. Mutual meaning no stockholders. Yeah. Private. They truly our customer first big time. And there’s no

Erwin  

other button there shouldn’t be any the bias. Exactly. Motivation. Exactly.

Jayson  

And so in Canada, we only have one option. And that so you have your contracts. And again, other people, like other ones is totally cool. Oh, that’s fine. Yeah, people can write, they can store their money wherever they choose. But the advantages of being a mutual, co owner of a Mutual Life Insurance Company, are incalculable. Interesting, really,

Erwin  

Christians have been hurt. Is that my policy that they say it’s expensive, but I’m the equity owner compared to what I don’t know. They seemed like Commission’s are high or something but whatever, compared to what I don’t know.

Jayson  

Yeah, you know, that that’s just have you ever flown in an aeroplane with noise cancellation headset? My own and you know how beneficial that

Erwin  

is? There’s kids chrome three, my kids, you gotta you have to

Jayson  

have the ability to to note that noise, I pay no attention to it whatsoever. Equitable, being the company that we’re talking about, again, without running an advertisement on any particular life insurance company. All the carriers in Canada that provide dividend paying participating whole life insurance have a great track record. They really do. From a mutual perspective. There’s only one. And so if there was more than one choice, then I would be evaluating an alternative choice. But presently, there’s only one. And so far, so great. And so far, so great meaning since 1936. I mean, it’s just, it’s been a little while.

Erwin  

Jayson, we’re running out of time. Why thank you so much for coming in. Or looking forward to your talk. Thank you. I think more than ever, people are looking for boring. It’s funny, because for the longest time, everyone was in real estate for boring. Yeah. And then when it got easy to make money, people got adventurous. Yeah. And now we’ve come back to the way boring is winning these days. Yeah. And it sounds like doesn’t get more boring than this. If you’re lumped in with gold.

Jayson  

God, it’s I shared with you before we hit the record button. It’s it’s like right up there with watching paint dry and grass grow.

Erwin  

I think people would love right now. Oh, for sure. Like,

Jayson  

I rest easy knowing that my pool of financial value continues growing daily, and it cannot go backward. Right. And I’m attracting no tax on that daily accrual. What more? Could I ask for? Like, I mean, that’s a very peaceful, stress free way of life. And eventually, when you get into the human condition of greed, or you’re in a market environment, where everybody thinks they’re mortal and unstoppable and and then I’m talking to my bitcoin portfolio, right? It’s like Mike Tyson says, right? Everybody has a plan until they get punched in the face, especially by him. And so I haven’t had a single client call me once in 15 years to say, Jayson, I’m really frustrated that my cash values keep rising every day. It’s really frustrating me, I’m really bothered that I have ready access to capital to take advantage of a high calibre opportunity. No one has ever said that to me. Yeah, people are relieved, they’re relieved that they got started in their journey years ago. Right and the best time to get started for people who are viewing and listening is once you have clarity, get clarity on the process, make sure your questions are answered. Make sure that you’ve got a great plan in terms of how you intend to implement it. I work with a great coach and we pride ourselves on having the best coaches burnin if Nelson were still alive today, he would attest to that. And we just love what we do. And we love working with our clients and supporting them and coaching them and 15 years into our journey. We’re more excited now than we’ve ever been. So because of me coming up in this journey, I didn’t experience soaring inflation. Until now. I didn’t experience skyrocketing interest rates until now. And so to be able to live through this peaceful, stress free, oh my god, you can shield yourself too. From the next whatever it is that’s going to impact you financially. The longer you wait, the more you penalise yourself. So stop waiting, come out to wealth hacker come up with a conference. Get a copy of our Nelson Nash’s book titled becoming your own banker, believe me, you’ll be glad you did. We’ve released our first book in a series Canadians guide to building wealth without risk. This is the first in a series every quarter a new book is coming. And it’s just an honour to be here with you. Thank you for having me.

Erwin  

Thank you, Jayson. And you’ll have copies of the book on hand at the conference. I

Jayson  

believe it. Yep. And a huge booth. Ypres, Jayson that you mentioned earlier that opportunities are coming to you. Yep. Can you comment on how are they are they getting better or worse, right in this current climate much better. Yeah, because people are motivated the other one out from the deal. They were in a lot of business, in particular coming my way in terms of companies that are just distressed, they need financing capital, they need leadership, they need help. And so I get tapped on the shoulder all the time. I turn away far more opportunity than I move forward, like

Erwin  

nine out of 1095 at 100 U turn away.

Jayson  

Oh, man, that’s a really good question. I’ve never really characterised it in terms of ratio

Erwin  

in this client, especially, you know, the the same hell yes or no? Oh, it’s gonna be a hell yes. Yeah. If I wanted to choose from if

Jayson  

I’m not familiar with what exactly it is that you’re talking about with me, I’m out. I don’t care how good the deal is. I have to have a level of familiarity. Otherwise I’m, I won’t participate. Right.

Erwin  

So those people at this cocktail party saying I should buy insurance on people, they were right.

Jayson  

Yeah, they actually. They were I mean, you’ve got to take care of yourself first. It’s much like when you get on an aeroplane I, you know, I flew here today and the stewardess says, Listen, in the unlikely event that something goes sideways, oxygen masks will drop from the ceiling. Make sure you put yours on first before helping someone else. It’s the very same as it relates to this. Take care of addressing your own needs first, and then expand that to other people in your family. Your Business both. Awesome. Isn’t that good?

Erwin  

Can’t wait. I was

Jayson  

fine. All right. And thanks to our studio audience, the one person my teammate, Peter, who’s here. Appreciate you. Thanks, David. We’re awesome. Thank you. Pleasure. Yeah.

Erwin  

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

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