Happy holidays, planning my trip to Texas, Investor nightmare: Tenant criminally charged, threatens three other tenants who leave, still waiting on a hearing. Moving to Florida, buying and holding dozens of American single-family income properties. All this and more on the Truth About Real Estate Investing For Canadians!
I’m your host Erwin Szeto, I have a lot of grey hair from being a landlord, real estate investor since 2005, my team and I have serviced over 350 investor clients, $440,000,000 of local real estate transactions and over 45 millionaire and multi-millionaire real estate investor clients and counting.
This week, I’m up north hanging around working while the kids are in ski camp. Normally I’d be skiing too but there’s very little snow so it’s not worth the cost. Blue Mountain only has two runs open.
I’m planning a trip to Austin, Texas in two weeks. Flights and accommodations are booked. Horse back riding lessons, tickets to Joe Rogan’s comedy club, shooting fully automatic guns, check. Real estate wise, my research and my friends for Share tell me Austin, Texas is an excellent place to invest due to economic growth and diversification, big growing tech sector, shortage of housing, landlord friendly, no state taxes, massive job growth thanks to Tesla’s Gigafactory and Samsung’s new microchip manufacturing plant currently under construction that will open soon and employ 2,000 high paying manufacturing jobs.
I’m going to rent a car and book some meetings and viewings to find my next income property. I’m already finding properties, 1,500 square foot, detached, 3 bed, 2 bath, 2 car garage for around $300k that will rent for close to $2k per month plus utilities. That’s a 7% gross rent yield. That’s not bad for a big city, almost a million people with upside growth. Austin has grown in population twice as fast as the state of Texas and 4X the national average from 2010 to 2020.
If and when I find a property I want, I will ask Share, the tech based asset manager to underwrite the deal for me to leverage their skill/experience/master agreements for property management and insurance; and keep this passive as possible. They are charging me asset management fees so I may as well make them work and get my money’s worth.
I just need to list my three student rentals and get them sold first. I’ve got cleaners going in next week, followed by photographers and once that’s ready, I’ll list them for sale.
Wish me luck!
Why am I trading in my local investments for American ones? The reasons are endless.
Last week, I had a speaking engagement at Anna Scott’s event in Cambridge, Ontario. I ran into an old friend who shared with me how in her fourplex, she has a nightmare tenant who has threatened and scared away the other three tenants, isn’t paying rent and she’s still waiting till January 8th for her hearing at the Landlord Tenant Board. The nightmare tenant has also been charged criminally by the police.
How bad is Ontario’s Landlord Tenant Board that someone who’s been charged by police and is a danger to other tenants still has rights to live in the unit without paying rent for months while waiting for a hearing?
The investor plans to slowly sell off her rental portfolio and is getting out on the landlording business in Ontario. Who can blame her. Neither the LTB nor police are protecting her tenants nor her property rights.
If the property was located in a landlord friendly State in the USA, the offending tenant would be out in days and victimised tenants would be able to continue to enjoy peaceful use of their apartment and the landlord would have a new tenant moved in, paying rent within 90 days.
There is no wonder why myself and hundreds of Ontario and BC investors are looking stateside for our next investment property.
In my experience of working with over 350 real estate investors, the vast majority have a goal to generate cash flow: specifically $100,000 per year in cash flow if the figure I’m given. With that amount, most can replace one income in the family and retire one parent. The noble part about it is the investor we work with usually wants to retire their partner/spouse so they may stay home and raise the kids.
Cash flow is what gets one freedom, sadly many, including myself got drunk on appreciation, equity gains that we took our eyes off the price hence I’m doing a reset to diversify, increase liquidity, and considering the market trends in Ontario, I’m slowly moving my real estate portfolio south of the border to landlord friendly states where there is no rent control where cash flow is significantly better than here.
Cross-Border Investment, Tax, Planning Mastery to Financial Balance Point With Carmen Da Silva
Which brings us to this week’s guest Carmen Da Silva, a Canadian who lives full time in Florida who knows a lot about investing for cash flow in the USA. Carmen Da Silva (CFO & Co-Founder of SHARE) is a CPA in both Canada and the USA. She articled with Price Waterhouse Cooper specializing in corporate and cross-border tax. Carmen built an insurance platform that allows boutique investment brokers to sell tax-sheltered insurance using Family Office Teams. She generated in excess of 500M AUM in just 5 years, sold it, and bought 25 single family homes in 2008 for early retirement. She has significant firsthand experience in U.S. Single Family Rentals (SFR) and has always recommend direct ownership in US real estate to her Accounting clients including her own children. Carmen’s 25 year old son already owns two rental houses in the US.
Currently, Carmen is passionate about combining Ai, technology and real estate investing to make US income properties accessible to everyday investors, not just the ultra wealthy and multi-billion dollar institutional investors currently gobbling up all the income properties.
In my experience, it’s rare for Financial Planners and Accountants to recommend and own so much real estate so for you my 17 listeners, you’re in for a special treat.
We can only cover so much in a 60 minute interview so if you would like to learn more about US income property investing, Carmen and her team will be presenting at our US Investing Workshop on the morning of Saturday January 13th. We will cover what the investment looks like, the numbers, corporate structures and Accounting, Financing, property management, as much as we can in a morning.
Of note, we are teaching direct investment as in the investor owns the property 100%. That is the definition of direct investment. No shares, no joint venture partners, not private lending. Good old fashioned income property ownership, in-line with how client 350+ clients and I invest in real estate.
Link for details or to register: https://USworkshop.eventbrite.ca/?aff=iwin
To connect with SHARE: https://sharesfr.com/partners/iwin
This past week, we as an office celebrated the holidays with a twist, instead of going out or ordering in for lunch, I bbq’d a 16 lbs brisket. I smoked the brisket for two hours then slowly roasted it in the oven overnight.
After lunch we volunteered to cook and prep meals at a local food bank called Eden Food For A Change: https://edenffc.org/
We chopped vegetables, packed meals for that night’s “Meals On Wheels,” and toured the facility with the founder who started the food bank 34 years ago. We learnt about their operations, how they operate as a business to raise funds from corporate cooking class events like ours. We paid $75 per person for the experience.
The founder shared how their operation works including cooking classes for the adults of the families they support and recent refugees like Syrians and Ukrainians. He even shared how with one refugee group of cooking students, two among them ended up opening restaurants.
Everyone enjoyed lunch and volunteering so much that this may be our new annual holiday tradition.
If you are looking for an experience based in charity, I recommend checking Eden Food For A Change in Mississauga out!
Now back to the subject of making money in real estate. As expected, with a recession upon us and high interest rates, I’m hearing from many sources that recreational properties or AirBnb’s are performing badly. The lack of snow for ski season is not helping at all. Whistler and North of Toronto have way less snow than normal. Blue Mountain only has two trails open as of December 27th.
More and more investors can’t afford their property managers due to little to negative cash flows. Do keep in mind, vacation rentals are sensitive to the economy. Consumers and businesses spend less with mortgage renewals with higher rates on the horizon and overall spending down.
I’m reading through a couple of the Canadian and US banks 2024 forecasts and from what I’ve read so far, short-term rental operators, if you are well capitalised, you’ll be just fine. Just be ready to hang on. For anyone flush with cash, I think it’s time to be greedy as many out there are fearful.
With global warming and our population growing like a runaway train, vacation properties long-term should perform well. Is it my choice of investment? No it’s not, such a strategy is difficult to scale safely with limited property managers to choose from, insurance and financing are more challenging. My preference is for a boring investment. I have businesses already, I’m not looking for another.
For most people, most of the time, in my experience, a long term tenant rental strategy makes sense for stable cash flows via direct ownership. The financing and accounting is easier, insurance is cheaper, you don’t need partners diluting your profits.
Preferably, one invests where landlords have more rights and there is no rent control.
This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me. Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up. If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next FREE Online Training Class. We will be back in person once legally allowed to do so, but for now, we are 100% virtual.
No need for you to reinvent the wheel; we have our system down pat. Again that’s www.infinitywealth.ca/events and register for the FREE Online Training Class.
HELP US OUT!
BEFORE YOU GO…
If you’re interested in being a successful real estate investor like those who have been featured on this podcast and our hundreds of successful clients please let us know.
It is our honour to give back and educate others on how we build cash flowing real estate portfolios using all the best practices shared on this podcast, from the lessons of our hundreds of clients and of course our own experience in owning investment real estate.
If you didn’t know already, we pride ourselves on being the best of the best real estate coaches, having the best property managers, contractors, handy people, cleaners, lawyers, accountants, everyone you need on your power team and we’re happy to share them with our clients to ensure your success.
New investor or seasoned veteran investor, we can help anyone by providing our award winning coaching services and this isn’t all talk.
We have been awarded Realtor of the Year to Investors in 2015 by the Real Estate Investment Network, 2016 by the Canadian Real Estate Wealth Magazine and again in 2017 because no one told the judges no one is supposed to win the award twice but on merit, our peers deemed us as the best. In 2018, we again won the same award by the Real Estate Investment Network.
Hopefully being the most decorated team of Realtors in Ontario will make you consider us for your first or next real estate investment. Even if you don’t invest in our areas, there’s a good chance I know who would be ideal for you.
I’ve been around for a while, some Realtors are talented at servicing investors there are many with great ethics. The intersection of the two, talent and ethics is limited to a handful in each city or town.
Only work with the best is what my father always taught me. If you’re interested, drop us an email at firstname.lastname@example.org.
I hope to meet you at one of our meetups soon.
Again that’s email@example.com
Infinity Wealth Investment Network – would you like to know how our investors returned 341.8% on positive cash flowing real estate over the last five years? On average, that was 68.4% per year.
Just imagine what winning in real estate could do for you.
If you would like to know how we did it, ask us how by calling 289-288-5019 or email us at firstname.lastname@example.org.
Don’t delay, the top markets we focus in are trending upward in price, so you can pay today’s price or tomorrow’s price.
Till next time, just do it because I believe in you.
Hamilton, St. Catharines and Toronto Land Development, Real Estate Investor, and soon to be builder.