Former Investments Insider, Real Estate Trader, Writing Low Ball Offers With Montu Dhillon

Greetings, my fellow real estate investors!

How much better are birthdays in 2022 than the last two years?!

If Cherry’s 2nd 20th birthday is any example, it was just like 1999! Apologies to the young people, “Party like it’s 1999,” is a Prince song. It’s ok, ignore this old man 🙂

 
 
 
 
 
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Cherry partied hard: spa, dim sum, karaoke, escape room, Lady Gaga concert, stupid expensive dinners and then the best part, the part I organized was a house party complete with pool, barbecue and fresh mango sponge cake.

We hosted a bunch of friends and their kids, including one family visiting from Dubai.  Everyone had a great time, and hosting everyone at our new house felt so good. 

It was like the last two years never happened!

As a present… well, I happened to be in Golf Town, browsing and picked out a very thoughtful gift set of Black Widow collector golf balls. The kids were super jealous. 

I also picked a pair of golf shoes for Cherry as her golf shoes are garbage. They’re over ten years old, and the spikes have all worn out, so their only redeeming value was they were waterproof. 

After this level of gift giving, I will humbly submit my application for the husband of the year 😂

News from the investment world… Have you heard about Tiger 21? I.e. the private network of high-net-worth individuals. 

The minimum to join is now $20,000,000 in liquid assets; the average net worth is over $100M.  

Why is this important?

Well, for this group, historically, the largest % of their investments was in real estate. Recently that just changed as stocks are now #1 as they are seeing “real bargains” in the stock market.

I’m a small fish, though, but I’ll continue to keep the majority of our wealth in real estate, AND I’m deal shopping in the stock market.

If you, too, want to learn more about how to invest like the ultra-high net worth, we’re sharing their secrets at the Wealth Hacker Conference on Nov 12, live and in person only at the Toronto Congress Center. 

We have amazing speakers and vendors planned. Just like last time, this will be the event of the year for entrepreneurs and investors alike. 

If you’re following me on my social or email newsletter, you’ll be informed of promotions, but just now, the price is only going up until the day of the conference; VIP tickets will sell out, so don’t delay. 

Your FOMO will be realised if you do not attend. Go to www.wealthhacker.ca for details.

Former Investments Insider, Real Estate Trader, Writing Low Ball Offers With Montu Dhillon

This week we have a really interesting interview of a gentleman, a co-worker at Rock Star Real Estate, my friend Montu Dhillon.  

He has a unique background, having worked his way up the corporate ladder in the financial services world, specifically compliance, so he saw firsthand who makes money in the investment services industry; hence he started buying real estate.

Montu shares how he started like most of us do, hustling hard in search of cash flow, buying houses, duplexes, fourplex, and Airbnb, then later transitioned into new construction condos for the negative cash flow but way fewer headaches.  

Montu is a bit of a trader as well, having divested some properties near the peak and what property type he has his sights set on may surprise you.

Montu shares his experience in the current market of writing low ball offers and being on the receiving end as well.

This is definitely a story of resilience, entrepreneurship, and taking control of one’s financial future.

Please enjoy the show!

 

This episode is brought to you by me! We don’t have sponsors for this show, I only share with you services owned by my wife Cherry and I.  Real estate investing is a staple in my life and allowed me to build wealth and more importantly, achieve financial peace about the future knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you too are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next FREE Online Training Class.  We will be back in person once legally allowed to do so but for now we are 100% virtual.

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

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

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

We’re hiring!

Just a friendly reminder that we are hiring more investment Realtors who want a full-time challenge to help our clients, regular everyday people, mostly from the GTA, invest in the top investment towns west of the GTA. 

This is for driven folks who want to multiply their current incomes.

APPLY HERE: https://www.infinitywealth.ca/hiring

 

To Listen:

Audio Transcript

**Transcripts are auto-generated.

Erwin  

Greetings, my fellow real estate investors. Welcome to another episode of The Truth about real estate investing show for Canadians. My name is Erwin Szeto, I am a Canadian as last time I checked in how much better our birthdays in 2022 than the last two years. If Cherry’s second 20th birthday is any example. It was like a party just like 9099 Apologise to the young people. It’s a older person term to party like it’s 1999 it’s a Prince song. It’s Okay, nevermind, just ignore this old man. Cherry partied hard. She went to the spa, she did some karaoke escape room, and Lady Gaga concert 50,000 other people, some stupid-expensive dinners. And the best part the part that I organised which was the host party, complete with our use of our pool, barbecue, fresh mangoes, finder page, etc, etc. They hosted a bunch of friends and their kids, including one Vallely, visiting from Dubai, everyone had a great time. And it’s our good to host everyone that our new hosts. It’s like the last two years never happened as a present. Well, I have a deviant golf town browsing in picked out a very thoughtful gift set of Black Widow, you know, the Marvel movie character, Black Widow collector golf balls for cherry. And when I brought them home, the kids were super jealous. Also, I got her a pair of golf shoes as cherries, current golf shoes are basically garbage. And they’re well over 10 years old, extremely well worn. They were supposed to be weighed, you’d never know by the look of them. The spikes on the bottom of the cleats have been all worn off. They were plastic leads, they’re all worn off. Basically, the only redeeming value of the shoe is that they’re waterproof. But yeah, there’s no grip. After this level of gift giving, I will humbly submit my application as husband of the year. Sorry, ladies from the investment world. Have you heard of Tiger 21? That is the private network of high net worth individuals, the minimum to join for application purposes. You know what the pay them law, I’m sure you pay them. But the application purposes to be accepted, you have to have a minimum of $20 million in liquid assets worth of liquid assets. The average net worth of a tiger 21 member is over $100 million. Us. Why is this important? Well for this group historically, because I’ve been following them for close to a decade, they do a survey of their members and to see what they’re liking for investments, right. So historically, based on the survey results of their members, these really really rich people. Historically, the largest percentage of their investments was in real estate. So no surprise there. I’m a small fish, but that’s where most of my money is. And what’s more, I make almost my money. But how recently that just changed. As now stocks are now their number one take the number one largest percentage of their investment portfolio, as they’re seeing real bargains in the stock market. That’s the words of the of the CEO of Tiger 21 real bargains. I’m personally a small fish. So I’ll keep the majority of my wealth in real estate, and I am deal shopping in the stock stock market. If you too want to learn more about how to invest like the ultra high net worth, we’re sharing all their secrets at the wealth hacker conference on November 12. live and in person only at the Toronto Congress Centre, we have some amazing speakers and vendors planned plenty of free parking. And just like last time, this will be the event of the year for entrepreneurs and investors alike. If you’re following me on my social media, or email or on my email newsletter, you’ll be informed of any promotions that we run. But just so you know, the price is going up as in the discounts on the promotions will be to be declining. So if you buy closer to the conference, you will be paying more money so and also the VIPs tickets will sell out. So don’t delay. Your FOMO will be realised the sooner you buy it, the more money you save. So go to www dot wealth hacker.ca For details on the event. Nonsense sweet show this week ever. We have a really interesting interview of a gentleman, also a co worker of mine at Rockstar real estate my friend Monty Dillon. He has a unique background of having worked his way up the corporate ladder, but in the financial services world, specifically in the compliance department. So his job was to follow up on complaints on their own staff. And also like we audit other compliance staff I’ve met my my my experience, they audit also what their staff own certain members of the influential industry haven’t disclosed what investments they hold to their employer. So that’s the part of the point of the compliance department. Hey, there’s so much you have saw firsthand who really makes money in the investment services world. Hence he started buying real estate.

Erwin  

Montu shares how he started like most of us do hustling hard in search of cash flow by Houses duplexes for plexes Airbnbs then later transitioned into new construction condos, for honestly negative cash flow, but way less headaches. Mar two is a bit of a trader as well has he has divested some properties near the peak, just you know. So in the last 12 months is the vastness and properties and what property types his eyes set on for his next investment may surprise you. Surprise me. Marty shares his experience in the current market of reading lowball offers and being on the receiving end of lowball offers as well. We recorded this in the middle of August so you can expect some lowballs are flying around. This is definitely a story of resilience, entrepreneurship and taking control of one’s financial future. And also if you want a free copy of Monty’s digital book, go to Dylan Realty systems.ca. That’s d h i ll O N Realty systems.ca. Please enjoy the show. may want to Hey, hey dinner, good not golfing. But what’s keeping you busy.

Montu  

You know what I have been passionate about golf for the last little while, last couple of months. To tell you the truth. I haven’t been endorsing any condo projects in the last couple of months. And that’s because I’ve seen the potential for a huge pullback in the market since like, March, April. And I’m not one to like, start a panic spread of telling people hey, this guy’s falling. gotta sell your assets. Even that’s what I’ve been thinking. But I just couldn’t tell people to start buying during the decline. So I’ve been keeping myself busy with golf. You golf?

Erwin  

Poorly, or? Anyone lately, so? No, I haven’t hit one lately.

Montu  

So I’ve been golfing for about 25 years, never? Well, I have not I’ve been a terrible golfer for 25 years.

Erwin  

Please tell me it gets easier. Five years?

Montu  

Well, here’s here it is, you gotta get professional lessons. So I went in and spoke to like a coach a couple of times to straighten myself out. And the difference is night and day. So and I have been telling myself for the last five years that when I earn it, I’m going to buy myself some custom clubs. Nice. And so I think this, this is the year this is the year getting fitted and getting myself some some finally some good clubs. And it makes a huge difference. If there’s any golfers out there listening to this, stop struggling, you know, just go get fitted, different clubs performed differently for everyone.

Erwin  

Not the same shoe fits everyone, again, showing the term professional help. Yeah, her bad idea.

Montu  

Now just just proper training, everyone’s got to get straightened out.

Erwin  

That’s a good analogy for almost everything. I’d have a business coach and investment coach, I’d like business coaches in my life.

Montu  

People are trying to like buy real estate, just watching YouTube videos and trying to figure it out when what they really need is someone who’s run the laps before and can just hold their hands and guide them through the process,

Erwin  

right? Just gonna warn you if we’re gonna shoot a YouTube video after this. So we the same schmucks that people can learn from. But we’ve run some laps, we run some laps, we know a little bit of investing. So hopefully we’d like to be the good schmucks on here. So once you have an interesting journey, and you’re in terms of real estate, because you actually come from the investments world, can you tell us about First off what year was that? And then what was your experience working in investments world because you worked in the financial investments world, like large publicly traded companies,

Montu  

the early 2000s. So I do have a background in investments, I was stocks and options. licenced that was my previous previous life. I had the plan to build up a huge stock portfolio and let that say, make a million bucks in stocks and then just collect 6% For the rest of my life. And I thought I could live off of that. Lo and behold, a lot changes in a decade. Right? So I was working with investment advisors and portfolio managers, and I was trading for myself. And I just, I had a position in the compliance department. In a couple of companies like CIBC and Dundee wealth, we’re now they’ve become Echelon partners, I found that I was able to climb the corporate ladder really quickly, especially in Toronto. I come from Montreal, where the salaries were a lot less than Toronto. So when I came to Toronto in like the mid 2000s, my salary practically doubled. And then it would jump by like 30 40% because I would just change, change locations, change careers. Now careers change employers every couple of months, right, because it was so competitive. They were offering the headhunters were like really aggressive, and they were offering immense salary increases. So my salary went from like 35,000 in Montreal, to well, almost 100,000 plus bonuses, which pass those bonuses and the insurance and the stock options. Those are the golden handcuffs. That’s what I learned. So my journey in trying to make as much money as possible and retire early, I learned that I could not break a glass ceiling, no matter how hard I worked, because I was working for somebody else, they subdued my earning potential. So there was a level that I was trying to reach a director in the company I was at. And I had climbed to the position of manager, director, Junior director was right after that, and I just could not get it done, no matter how much work I put into it, no matter how many connections I made, apparently, with this company that I worked for, they only allowed people with like an MBA to reach the director and higher level to become a VP, you had to have an MBA, which was strange to me, because I mean, I knew some directors, and they didn’t look like they had MBAs. You know, I hope there aren’t any directors listening to this. feel slighted. But I mean, there’s smart people and average people. And I learned that in the investment industry, there are some incredibly brilliant minds who have amazing analysis capability. But those are few and far between. And most of them are just average people. In fact, I think every industry is just average people. And there are only a few that really step out, that are the cream of the crop that stand out from the rest, you know, the top 9% as I like to call them, it exists everywhere, in my opinion, even in real estate, you know, even dentists, doctors, lawyers, I’m sure we all know some bad lawyers

Erwin  

is bad, and everything is bad. And everything was great in every industry, too.

Montu  

So although I couldn’t break this glass ceiling, I thought my earning should not be limited. I felt I should be making 300,000 a year. My salary at the time was 90 something 1000 plus bonuses of like 20,000 bucks. So it was just north of 100k. But I was like no, I want to Dylan is a 300k minimum earn, you know, three to 500 should be my lifestyle. I think that’s what we all want. Because that we don’t just want the money. We want the freedom that money provides. So I decided to get a motorcycle and crash it and break about 24 bones in my body. This was terrible plan. Yeah, it was it completely backfired on me. Right. So lying there for three months, not able to sleep lying down. I had to sleep in a recliner. And that’s when I realised that okay, I cannot I was dreading going back to my workplace. It was just the most horrible environment with office politics and some of the characters were just you work with troll. Yeah, at least in this office. There was a couple of trolls and I really did not want to go back to that. So I said to my wife, darlin, I have a crazy idea. Better than motorcycling better better than a motorcycle. I’m gonna be we’re gonna buy some real estate. I think that duplexes if we have a portfolio of duplexes, it’s the cash flow. If we can get a five duplexes that are cash flowing, 1000 bucks, we’re gonna replace my salary. Yeah, that’s all I was making. I was making like 5000 A month after taxes. How the hell did we survive on that? You know what I mean? So that started my epic journey. And I found us got the television personality from HG McGilvery. I found him my wife brought his book to me. And I read it and I was like, Who is this clown? He’s got his picture all over his book. This is I’m not paying attention to him. He’s so egotistical. Then I watched a show one of his shows. And I was amazed at how humble and charming and good hearted he was nothing this guy’s got it figured out. Okay, let me read his book. So read his book. And I was like, Alright, this is what we’re going to do. We’re going to get some duplexes, Scotland McGilvery says, and we’ll be financially free, or

Erwin  

anything properties, income properties, it’s a suite of basements or anchor properties, for sure was all about

Montu  

and then I’ll slowly leave my job. And we can do this. And, you know, got licenced got my real estate licence, started work doing that part time and working in the financial industry full time. But in all 21 me I wasn’t doing much work full time. I was just focusing on real estate trying to figure out trying to get crack this code. And then one day, I stumbled upon income for life. Tom and Nick Carozza, Shadow Tom and Nick are our real estate Rockstar real estate and I read their book and be being a sceptic. I was I was like, telling me I was so angry and I was reading the book. I was like, this does not work. This is the dumbest thing I’ve ever heard. This is not gonna work. And I was I was yelling at it every day to my wife. Look, look at what these guys are for. posing, there’s no way you can do a rent to own it just won’t work. By the end of the book, though, I’ve got to admit, I was sold as like, you know what, I think these guys are onto something, we got to try it, it just the It’s just math. And math doesn’t lie. So let’s do it. Let’s, let’s try, I’m gonna go to one of their free training classes. And yeah, that’s where I met Tom Carozza. So I didn’t join Rockstar brokerage right away, it was just, you know, part of my journey trying to accumulate a whole bunch of like, houses a whole bunch, you know, I bought a fixer uppers, converted them into with legal basements. So have like a two unit dwelling, I got bought me a four Plex I did one rent to own, which ultimately didn’t work out. And then, at some point, because of all the work I was doing, in my houses, I was like, I gotta get property managers, and all the tenant issues that I had the tenant profile in these duplexes, and for plexes, they didn’t really make a lot of money, and they often had problems paying the rent. So one day, someone told me that the best thing we ever did was buy a pre construction condo. And I was like, no way that doesn’t work. You know, houses land is where the money’s at, that’s what you want to get. But, you know, because I had extra assets, and I was able to get a mortgage. At the time, it’s really hard to do that. Now. I decided to go ahead and buy a pre construction condo, what ended up happening was I made like 150 or $200,000, within that timeframe, from start to finish, actually was over, just from start to closing, the value is up 200,000. And I sold it a year later. And then after all my you know, realtor expenses, and paying taxes, etc. I my profit was about $220,000. I didn’t have to fix up any houses, I didn’t have to clean up any cockroaches. I didn’t have any toilets to clean, which is what I was doing previously, you know, getting tenants into my homes, I didn’t have to do any of that. It was just I found good builders who knew how to build and deliver. And then I just started doing that over and over. I just found the pattern, made a few mistakes, figured out what the right pattern is. And then I would just go into business with those people who had the good projects. And then it was just like a sign if you checks, it gets cashed a couple of months later. And then on closing, you get a mortgage, you can either sell it but I found the sweet spot was selling the condo about a year to a year and a half after closing. Why is that? The sweet spot? Number one, there’s you know, tax benefits. You get your HST rebate, you lock that in your value of the unit with a tenant carrying it for a year. If for some reason, I haven’t figured out why but the value jumps within that first year. Lots of theories as to why because you know, the building is still in renovation, and then renovations are all done. People want new but they want now. Exactly right. Yeah. And they’re willing to pay for it. Right. So as an investor if I’m willing to carry it. And if sometimes even at a loss, these some of these units, they cashflow negative, about three 400 bucks a month. So I’m sacrificing about 4800 A year $5,000 A year. But in the end on the flip side when I sell I’m making 200 Without the struggle of having to maintain real estate, maintain houses, fix a leak in the basement, which I have tonnes of experience doing. Believe me

Erwin  

to someone to this let me apology there because there’s lots to unpack. Because you’re skim through the whole part. You worked in the compliance department in the investment industry. Sauron Konya. Yes. What did you see? What can you share? So because you saw you saw the skeletons in the closet shenanigans,

Montu  

right, so what I learned back in those days was there are good advisors and there are bad advisors. I like to surround myself only with good advisors, people who know what they’re doing. But as I manage the compliance department, I saw all kinds of shenanigans. I saw one fellow, this was unbelievable. It was just outright fraud. He would, he took his clients money, and when the market this one stock tanked, they went from $300,000 to $50,000. And clients investor clients investment their account, and he decided to create fictitious statements just on Excel. He sent them homemade Excel statements saying, Yeah, your account is fine, your money’s good. You’ve gone up. And then I remember every time we would try to have a discussion with him in the compliance department. He would say his grandmother died. So it wasn’t just me investigating him. He was other officers that were trying to figure out what’s going on with him. And then when it was my turn to investigate him, you know, and put the bring the boot down. He was like, Oh, my grandmother died. Sorry. Can I get back to you in two days? I’m like, Okay, sure. And then someone else tells me oh my god, that’s his grandmother died. That must be the third time. And I was like, oh, okay, we got a problem. So he ultimately disappeared. We think he left the country. There was a the police went looking for him. They just couldn’t find him. So, yeah, and that person’s whose account was destroyed. Luckily, the company I worked with made them whole. Wow. That’s nice. Yeah, well, I mean, you know, 100 million dollars a year profit, they could at least give them 250k back and avoid a major lawsuit. Right. But again,

Erwin  

you were in the investments industry, financial markets industry, why did you want to be a real estate investor need to be rich doing what the these investment advisors are recommending?

Montu  

That’s a great question. That’s what I wondered. Like, why couldn’t I get ahead? In the investment industry? World? You’re an insider. Yeah, that was an insider who paid less commission do friends and family specials, right? So what I learned was the only people who are really making money in the stock world are the middlemen, the ones who are doing the trades, who are making the Commission, which is ultimately the house, the brokerages. Right, the the CIBC is the RBC is the big houses, they have their investment division, and all their portfolio managers have pictures of their boats on the wall. They all do. I’m like, Wow, these guys are really got it figured out. But what I learned was because their clients were not making the money that they were, I couldn’t continue with it. I believe in you know, the rising tide raises all boats. And it was only their boat that was floating, no one else had a boat, frankly, so and I couldn’t stand that it really bothered me. So I said, You know what, I don’t want to be an advisor. I think the stock market is a rigged game, where only the market makers make any money. So I said, I’m going to do something where once I figure out how to make money for myself, I’m going to help others do it. And so like my my client base, in real estate, and as you know, I am a real estate agent, specialising in condoms, my client base are the ones that I try, whose votes I try to raise. And it’s been pretty good. It’s been a really good decade, I’d say.

Erwin  

Now, not all financial planners and investment advisors are bad. We were talking about before we recording. Yeah. And I, you know, I said are some people I would never trust with their own money. You know, we’ve all lost money at something. I think some people are more talented at losing more money than so I’m not against for certain people best right. That’s the right thing to do. Let someone else manage your money. And also, same thing that’s in common new construction condos. I think for certain people, that’s the right investment for them. Right. But I wanted to ask you, for example, in your journey that you had lost single family, where would you call it resale properties? Use properties? Did that fund your condo investing?

Montu  

Yeah, well, ultimately, it’s where I started. And it was those assets that grew. Yeah. And then I was either able to refi or sell them. And then, and I just thought to myself, You know what, I’ve made a profit. I don’t want to do it again. Because it’s really messy. I want to do something where I get something brand new.

Erwin  

You didn’t want to repeat the experience. You want the grief, you didn’t want the doing the maintenance, and especially the heavy millions.

Montu  

And it’s just because I’d rather do something else with my time. Right, right. Right now I’m golfing a lot, I spend more time with my family. It’s my custom designed life that I feel I’m living. And I wouldn’t want to change that. Even for money, right. So there’s one asset that you

Erwin  

see after you’ve made all this money.

Montu  

That’s one way of looking at it. But there’s one commodity, I think that we cannot ever create. And that’s time where the time the clock is against us. So I also believe that money is the store of energy. And more than just that it’s not just power. People think it’s power, it’s freedom. I think it’s just a store of energy. And when you unleash that energy properly, you create time for yourself, which is that’s the holy grail to me time to do what you want with who you want. And remove the elements of your life that are unpleasant. People places things right, get rid of those out

Erwin  

and just see so often though, that it starts with hustle like you hustled even with 24 broken bones. You went out and hustled in order in order to find an easier investment strategy. Right? Right. So yeah, that’s my like, I mean, like, you know, that’s right for you. It’s not right for everyone. I have this weird Asian mentality that the more suffer the more money it’s crazy.

Montu  

Well, don’t get me wrong. I still have houses in my portfolio. I’m still half in half.

Erwin  

Yeah, and you still hustle I know you have you. Do you still have any Airbnbs left?

Montu  

Well, during the pandemic, I had shut them down. Right. But we are planning on reopening, right. I have long term tenants in my furnished rentals. But now it’s it’s I think it’s time to go back to the service the tourist industry again.

Erwin  

And you do it inside a Toronto condo, right? Yeah.

Montu  

It’s been a bit trickier since Toronto condos, Toronto, the city itself has shut down. Well, as soon as they shut down, they’ve limited the ease that Airbnb operators were able to operate. And before, it’s a little more difficult, but those who know the system, insiders are still doing just fine. They’re still making six 810 $1,000 a month in these condos and there are opportunities. But they’re not for everybody because it’s hard work. It’s not a set it and forget it. A lot of people have to hire property managers to run their Airbnb and PMS. They take about 15 to 20% of the gross. And then what you do you have a property manager I used to write while it was running, right? Yeah, but now I’m going I’m going to reopen it. I’m just going to manage it myself.

Erwin  

You’re going to fluff pillows and well stocked toilet paper.

Montu  

Well, well, that’s the thing. It’s so easy to hire a cleaner to do that. Okay, so you hire out with our technology, you can just press an app and someone will go to your your condo and do it all for you. But as for the guests communication, setting the prices, looking at the market, I’ll do that myself. I did it before figured out how

Erwin  

right. So you talked about limiting grief with your other investments. How do you keep an Airbnb investment with limited grief that you’ve read the same stuff articles in the media? I have, you know, raging postgraduate graduation party in two people got shot, whatever. Right?

Montu  

Well, the media likes to print what bleeds. Yeah, because it reads, yes. That’s how media works. So I have found that 98% of the time you get amazing guests, they’re respectful, they just come in, they use your place. And then they leave

Erwin  

people like me, I’m not there to cause any trouble. You have my credit card. And I’m cheap, causing any trouble.

Montu  

So what I also did was I increased the deposit required on my Airbnb, increase your damage deposit to $1,000. Ultimately, it’s just a deterrent, because if they feel they can cause the damage, Airbnb is going to side with them. And lately, Airbnb has not been making owners whole, they’ve been a bit problematic, because they’ve scaled and now they’re a publicly traded company, they, they seem to be putting less effort towards owners of properties. But that said, like 90% of the time, you’re gonna have an easy run. You’re just a hotel, you own a mini hotel, and you just send your maid in to clean it once in a while. You make all the money. And then just remember, it’s a business, treat it as a business and business and I know you have experienced you guys ran your own Airbnb. So I’m preaching to the choir here. But for the listeners, it’s a business, treat it like a business and you’ll flourish treated personally, if you get upset about what they did to your place, you’re gonna want to quit, and then you’re giving up all these potential returns that you could be making.

Erwin  

I don’t talk about enough, I call it return on my grief. So just because I naturally think analytically, the story often shares one time. I had like a small piece of roof that just goes over my front porch and when our properties well as a windstorm, like we’ve had with some crazy wind storms. So it was blowing and just hanging off, right. And my tenant has four kids, single mom, and then I couldn’t get someone to take care of it. So I drove and went out and took care of it. I got a ladder unscrewed it took it down. Or I called a buddy to pick it up because it couldn’t fit my car was too big to take it away. But you know, it took me two hours total right? To drive out take care of it. Like oh, sucks the weekends my weekend that I think about how much money I made. on that property. You think about it, right? Yeah. You know, that property? Probably appreciated rental five, six grand that month alone cost me two hours. So that’s like, you know, 2500 $3,000 an hour. Yeah. That’s worth my grief. Right. So then like, okay, I’m okay. Yeah. Right. So that’s why me like return on grief for what was going on with that because Airbnb is not always easy. And also, like you said, you can’t get up. Like you can get upset, but then go back to quantify it. I was upset for 20 minutes. And a cash flow of eight grand this month. isn’t worth it. Think of how much grief people have in a day job to make eight grand a month. Right. There’s probably a lot of grief for almost everyone, you know, commuting whatever, office bullies, right. Yeah, office trolls, as you mentioned office trolls, or was that the name of the app that you mentioned that you use for booking a maid?

Montu  

It’s called bark.com is going to bark.com I think var K var K? And then finally, maybe, yeah, you just just say, hey, I need a cleaner. And they just send, you know, you get a whole bunch of people who are saying, oh, yeah, I could, I could clean your place, this is my price. And you get some good cleaners and bad cleaners, like everything else. So then when you find a good one, you just keep them and make sure you pay them well. Right? If they if they want 100 bucks, say, Look, I’ll give you 120 to come back. And you know, I think effort needs to be rewarded, right?

Erwin  

Because they kind of like what the market is, for example, good quality people. Exact 20%. Inflation. Yeah. And to make sure that your priority, exactly right. Well, if you’re caching like eight grand a month, you know, paying a little extra for cleaning, it’s probably worth it.

Montu  

Yeah, right. And people get bogged down in the details. And sometimes they run an operation like an Airbnb hosting operation. And they’re like, Well, I don’t want to pay 150 bucks for cleaning. Come on, folks. Here, you just made $1,000. This month, just shell out the extra 150 It’s a business. Every business has an expense. If you want it that’s one thing I’ve learned in the last two decades is when you throw money at a problem, it fixes it. Don’t rely on your own expertise that are other people are better equipped to take care of your problem. And just give them money to do it. In money. Just you’re storing some energy. And they can do it faster, better quicker than you can. Like, you know, plumbers, for example. I knew a couple things about plumbing and electricity with all the houses I’ve managed. I used to do it all myself. And now it’s I just find a plumber. And they fix it permanently. Yeah, they cost. Yeah, electricians costs. But guess what, I’ve never gone back to those homes, that I botched the electrical or the plumbing job myself. So now it’s it’s you know, one and done. When you hire a pro.

Erwin  

I think part of your grief issue is that you did a lot of the work yourself.

Montu  

Maybe it’s trying to save the money. Right?

Erwin  

I said it recently, it takes a village to raise a child it takes a village to have a successful investment property. Yeah. Right. And all these people tried to do it themselves. Yeah. Same thing with raising a child to not do daycare to not you know, do schooling to Yeah, like it takes a village. Can’t do it by yourself. It’s just a lot easier if you don’t do it by yourself. Can you give us a bit of a breakdown? What percentage of your portfolio is new construction versus like everything else?

Montu  

Well, here’s the thing. My new construction is I trade it. So right now my

Erwin  

if you’re not really an investor of new construction trader, I’m investing

Montu  

during the holding period. So yeah, I mean, as you point out my new beyond one year of Yeah, because especially with, you know, the recent downturn, I advocated everyone to sell in like February, I was like, Hey, guys, I think the markets gonna pull back sell what you have while you can, I sold two properties, one last year, one this year, in March or April. And I’m glad I did because I was predicting like a 30% pullback. At the same time, I was seeing a potential increase in condo prices, because of just the laws of supply and demand. So the houses that I sold, they did come down, and I’m glad I sold them. And I think versus last year.

Erwin  

The policies were these both condos that you sold her homes, or both houses. Yeah.

Montu  

What’s it nice low rise, one in Guelph. And one in Hamilton got it. Sorry, continue. So yeah, I made out made up well with them. And now I’m sitting on dry powder, because I think that there’s a next opportunity that’s coming. So I’m a 6040 in my portfolio with new construction and resale. And I am going to be adding so I’m not a condo nut know what I mean? Like I just saw an opportunity in condos in the last seven years. And I capitalised on it. I’m an opportunist.

Erwin  

You’re not You’re not an agnostic investor. Yeah, exactly.

Montu  

And I see the next opportunity right now coming in detached homes, because I think the carrying cost for them was way too high. Everything above a million bucks, carrying costs with current interest rates is like $6,000. Right? With property taxes, insurance, all that we’re talking about six grand how many people can afford that. So I think these homes, they’re going to be coming down because the demand is just not going to be able to meet that carrying cost. Luckily, I’m one of the few people who can pick up one of these units are and so

Erwin  

you’re not an everyday investor. Yeah, that’s like clear. Just because I want to I want to I always think context is important. You can afford to do this. You have the bankroll to do

Montu  

that. Exactly. And so I think these homes and I think it’s not just me, I think a lot of other people gonna be able to do.

Erwin  

I totally agree. Because detached is what’s coming down the most in price. Exactly. And also, so my thinking is, again, it’s math, the per square foot cost of a bigger home is less than that of a smaller home, right, a two story home cost per square foot is less than a bungalow, but the rent per square foot is probably the same same, the same. So there’s a bit of an arbitrage opportunity exact so why would I buy a bigger home and turn into a triplex? For example? This was my thinking, what what was your thinking around detached home investing?

Montu  

So everything most detached, different, people are paying like $1.5 million, or at least they were like the average detached home is going for about 105 to 2,000,002 bucks. It’s insane. Absolutely nuts. And I think a lot of it was speculation and people got ahead of themselves thinking, they’re listening to the wrong people thinking, oh, yeah, it’s gonna go to three, it’s gonna keep going up to the moon. And then, you know, when when the stack starts to shake, people are going to start dumping these, these things, these assets really fast. And you always want to go against the herd against the grain. I’m a contrarian investor. And that’s, I think, where I’ve made most of my money in the shortest amount of time, by doing the opposite what everybody else is doing. So sell high, buy low, but you know, you just get that queasy feeling that you’re doing it wrong. When you get that wrong feeling. You’re actually right. Because guess what 95% of people are wrong about money. Only 5% know what they’re doing. They actually understand money. It’s not currency or paper. It’s it’s a store of energy. And once you know how to like capitalise and hold it in reserve, and then release it. So hope people sold those of you who are smart enough and sold earlier this year, you’ve got some dry powder, you should be able to release it in a couple of months. We’re sitting here in August 2022. And I see an immense opportunity in detached homes coming up in like, October, November. And I think it’s just when the news is that oh, it’s gonna go even lower, or detached homes are going to be under a million bucks very soon, that’s when we buy because most people are wrong. And most people are going to be preaching that the market is going to tank markets gonna drop even further. That’s when I jump in and buy. I understand that for a while. We never act on it. Because we hear our neighbours and a lot of my clientele, they miss out on opportunities because they’re listening to their neighbours, who say you should sell your house for this price. But no, they’re they’re chasing the market down. The house is not that price anymore, and they’re not able to sell it. So you got to listen to the experts, right? Don’t listen to the other crabs in the bucket. When you get that feeling that you are right. Despite everyone else, you got to pull the trigger. And you’ll find that, you know, a couple of months later, everyone catches up to you. And then by then it’s too late.

Erwin  

So tell me what you’re looking for. Tell me what you’re looking for in a detached home.

Montu  

Okay, this is hard to get right now. Because you know, I’m out there making lowball offers. I got some amazing stories. I’m out there making lowball offers right now on detached homes and I am offending people. Oh my God, they are. They’re taking it so personally, they respond with such vile anger. You’ll moron, you think my house is worth this. So I’m just you know, pitching lowball offers to houses that have not sold, I look for something on the market that hasn’t sold in three weeks. So after two weeks, because they’re used to things being sold in two weeks, if in the third and fourth week, if it’s dry, even sometimes two months. So I can see that it’s not selling and then me being the opportunities that I am I look for contracts that are about to expire, meaning the realtor is going to lose the listing very soon. So he’s motivated or she’s motivated to get the place sold.

Erwin  

Right? That’s also been sitting to Yes, it’s probably been sitting Yeah, three months to six months. Exactly.

Montu  

Right. So my pitch a lowball offer 300k, under ask, under what actually under what I think is reasonable. And either the price will you know, we’ll meet in the middle, or I don’t move forward. Because I have the money. They want my money. And no one else has given them money. So they’re either going to sell it to me now or they’re going to sell to somebody in three months for the price I’m asking anyway. That’s how I see it. Anyhow, right. So I’ve offended a lot of people, but I don’t care. He’s just a numbers game. And you’re a real estate investor. You know what I mean? And the worst was check this up. This is so terrible. A house appeared on my street and I wanted a house on my street because it’d be so easy to Airbnb, very easy to manage. And they’re worth about 1.4 mil. And, you know, and they looked at 1.3 because they had an unfinished basement. And there was a lot of bad media at the time. I went in, I offered like 1025 like super lowball, and of course, the sellers were offended. And I told them

Erwin  

why it’s $1,000,000.20 1,000,025 when I was just just north

Montu  

of a million, and it properly dressed this house would have sold for 1.3 It just wasn’t dressed well. The agent didn’t really do a good job. afterwards, yeah, she, she doesn’t really understand staging or marketing, right?

Erwin  

So he’s terrible.

Montu  

And I have that skill set. So I’m like, Okay, let me just grab it, I’ll pay 1.1. For it in my mind, I’m thinking I’ll pay 1.1 for it, and I’ll dress it up, and I’ll sell it for 1.3. I could even hold it for a year, put a tent in there while the market recovers, if it sinks. So in retrospect, it was a bad idea to tell them all the things I found that are wrong with the house, because that’s what pissed them off. They’re like, they took it so personally. So I found there was basement moisture, I found a crack in the foundation, I found all kinds of you know that this is dated that’s dated. And so this is why my offer is this. And they weren’t getting any other offers, right. And I knew the market was dry. So they’re either going to take my offer, or it’s going to sit, and they’ll eventually take my offer if they get nothing else. Long story short, they wanted 1.2. They said we’re not going to be lower than 1.2. A week later, they sold it to somebody else other than me for 1060. When I found that they had submitted they had another offer on the table, I went in and offered 1.1 million. I offered 1.1. And they took the 1060 because they hated me. They did not want to deal with the guy who insulted them. Right there

Erwin  

hate for you. 40,000. Assuming capital exempt came Gains Exemption $40,000 after tax money was the dollar value for their hate for you. Yeah,

Montu  

exactly. So that’s something. So now when I’m pitching my lowball offers, I’m not doing that anymore. I’m not you know, telling them but the basement moisture. say here’s my offer, you want to take it or leave it, you know, and a key is Don’t piss off the other agent as well. Because he or she holds the door to your access to the sale and if you haven’t learned I’m I’m a tough negotiator. So I N You know this about me, I call it like I see it. I don’t pull punches. If I see something wrong. I don’t keep it inside. I tell them as Okay, that is kind of dumb. Right? Don’t don’t think you’re gonna trick me. This is BS, and a lot of people. They’re so sensitive. We live in a very sensitive world. Yeah,

Erwin  

but But again, we’re dealing with individuals you’re going to find. All right, you could have found the most sensitive individuals on the street. just gotten lucky. Yeah. All

Montu  

right. So that’s what I’m doing. I’m I think there’s a huge opportunity for low rise. Detached semis talents are going to be coming up right now. It’s for detached semis in towns are still going up in value, but I think they’re going to stop very soon in pullback. Meanwhile, the more

Erwin  

started a home the more seems to be resilient. Yeah, right. Yeah. Condos are presumed pretty reasonably resilient resale resale.

Montu  

At this time in August 2022. Condos are up like 7% versus last year. Oh my lord. Meanwhile, detached homes are down 3% versus last year. So condos have bridged the gap by about 10%. Right. That’s that’s the

Erwin  

time to return detached down 3% year over year, but from Peak, we’re probably down 15 or more

Montu  

24%. Okay, so the average price from February to now. Or I should say using the July data, it’s down 24%, the average price of a home. So I figured detachment is somewhere in there. But I’ve had a lot of very smart investors who were working with me that said, Yeah, let’s sell and they got out in like February, March, April. And now they’re sitting on some dry powder. And now they got some money burning a hole in their pocket. And they’re thinking, Oh, well, what should we do? Should we buy some Kryptos or not? And I just hold on to it, you know, the opportunities coming? And don’t don’t follow the herd. There’s other people buying just wait. I know. It’s

Erwin  

weird, though. Because then you know, the 17 listeners that listen to this podcast. Sure what we’re doing? Well, everyone’s doing buying the detached, need to do something else. You know, I mean, I get that too, because I talked to like, really smart people and like, Wow, all these smart people are doing this. Am I just following the herd?

Montu  

You know, I mean, the difficult thing is there’s going to be opportunities for detached homes, and they’re still going to be six figures. So the market has shown us they’re willing to pay ridiculous amounts of money for a detached house. 1.71 point 8 million is, you know, Richmond Hill, Markham Oakville, that’s what they’re clocking in at. And that tells me that the market is going to be willing to do it again, when the Fed ultimately has to cut their interest rates. We all know that they have to, you know, I don’t know if we all do.

Erwin  

We all do. Because like the people who are like fearing this, that’s the end of the world. Well, they’re the ones who know the 16% Right. They’re thinking right,

Montu  

these are the guys who are going to sell me their house for 40% discount. And once that opportunity is there and the investors are there to pick up the broken pieces they’re going to sell I don’t think we’re at the market bottom yet. I I think once the fed the US FOMC, once they start to cut interest rates, that’s when the bottom is going to be like, you can basically ring the bell. That’s the bottom decile. Nobody rings the bell at the bottom, but I’m calling it when the when they cut interest rates, that’s the bottom of the market. Some people will still be preaching that we’re going lower. But that’s when I’m going to be buying

Erwin  

any guesses when that will be? And I’m just not going to hold you to it because we don’t know what she’s doing crystal ball,

Montu  

I think spring of 2023 Not even far away. Yeah, yeah.

Erwin  

So we’re recording this August 2022, we’re talking six months,

Montu  

nine months, nine months, well see that the harvest always comes later. So the failed harvest takes about six to eight months to come to fruition. And right now, whatever we’re trying to harvest, like the supply chain issues that we have, people are getting laid off, a couple of my tenants just got laid off. So we’re in for a storm that’s coming. And to all my fellow landlords who were suffering during COVID. And Mr. Doug Ford, convinced all the tenants that, hey, you don’t have to pay rent, just buy food. You know, don’t worry, someone will pay the mortgage. Now you were in for that. Again, I think it’s coming. We’re gonna see massive layoffs coming up. And I think this is a manipulated and triggered event. I think the Keynesians they need to deflate the economy, I think the forcing us into a recession, and it’s going to be layoffs are going to be business closings, all the money that we have at all these assets, including the market, gold Bitcoin house, it’s all going to be pulled out. And it’s going to be like an exhale, and everything’s going to shrink a bit. So those of us who have assets sitting on the side, dry powder I keep talking about now,

Erwin  

but painful that dry powder with all this inflation going on. Yeah.

Montu  

So what what is inflation and loss of wealth? I’ve I’ve been pondering this for a long time, months and months. And I came to the realisation that we’re not really poor. When our assets go down, we only get poor if the things that we want go up in price where our assets go down

Erwin  

costs gone up in price. Yeah, golf clubs are way more expensive now than they were last year, year before.

Montu  

And if I if someone wants a Rolex,

Erwin  

it’s been a good investment. Or you want to hang out in Canada,

Montu  

too. So if our income and our assets like the stock market, are we listed, if that’s shrinking, and the things that we want, if I want to buy like a Bentley, I don’t have just an example. I’m not like, I’m very humble. I drive a Ford midsize SUV, right? If the things that we want are going up in value, we’re screwed. And I think that’s what we’re going to be seeing. So get that dry powder. While you can

Erwin  

refer for us we refight five houses in q1 this year, because I saw a storm common Yeah, yeah. So we don’t have debt related in dry powder. Okay, so some things unpack. I want to go back to the detached example, because I know you’re smart. You’re not just gonna buy a detached and not have like at least three options on how to make money on it. Yeah. What were your plans for how to make money on it? I think you mentioned Airbnb, you said in passing, you throw up a tent in one

Montu  

as a joke. So is that the

Erwin  

Airbnb the tents.

Montu  

what the plan is just, is to renovate it and just improve it. Because a lot of these house No one’s buying it because they’re not in good condition. So send a couple of send a team of contractors in there invest about 50 to 100k into it, and then put it back on the market properly staged and lovely. Second plan is to put a tenant in there to carry it through the storm, maybe two years if things turn bad. Get a tenant in there too. And yeah, I’ll probably be cashflow negative about 1000 bucks. Alright, I’ve run the numbers already. And Plan C is just to, you know, clean and put it back on the market right away.

Erwin  

Nowhere b b option therapy options.

Montu  

Well, yes, that’s like the tenant that

Erwin  

the long got it. Okay. You want a situation, have someone carry it? Got it. Got it. And again, this is for people who can afford these investments. It’s not everyone can afford a negative.

Montu  

Well, here’s the thing, and I think a lot of Canadians are a lot richer. Many of us have real estate that’s gone up in value. I think we have money, he locks, etc. And we have the dry powder. We just need to be fearless in releasing it. And I think a lot of people are not going to want to be wanting to release it that quickly. But other than detached homes. The other thing I’m looking at is of course new construction, but there’s certain things I look for in new construction condos. The deposit structure, it’s pretty important right now to have a favourable deposit structure, you want something around 15% with 5% occupancy, that’s what I like to see. Builder Calibre is very important. Believe it or not as an industry insider for pre construction condos, I think 40 percent of whatever was built that was ever was sold is not going to be built. And there’s going to be a lot of cancellations or delays. So you really got to do your homework and choose your builders who have deep pockets. If you want to see your project come to fruition, I’ve got my own algorithm, the old man to algorithm which, like I have a couple of things that I look for, that tells me a builder is actually going to be able to complete it. And one of those things, believe it or not, is price. If the price is too low, you’re not going to get completed. I’m sorry, if you if you bought something for less than 1000 a square foot in Toronto, the builder might walk away from it. Right? And then that’s

Erwin  

catastrophic for many people further pre construction to not close. It’s going to be common versus leaders versus my income property. Like if I’ve captured all the appreciation, right? And they just, you know, I had a friend he got he got he got interest. He got some interest money. Yeah, that was it honest that

Montu  

zondo gotta be really careful. You gotta be really smart. Oh, and just clarify Connor wasn’t cancelled.

Erwin  

They asked for more money.

Montu  

I’ll one of those deals. Yeah, wanna give us another 100k? Or we’re not gonna Yeah, Bill

Erwin  

or you can have it Yeah, right. So at least he had options better than Complete Cancellation he would have had you would have had some equity gain. We kept some equity gain if you’d come up with the money and that’s

Montu  

where the builder calibre so important, because if the builder is not one of the up and up guys, they can do that. You know, it’s

Erwin  

but everyone knows as builders downtown Burlington, you probably know that one and we won’t name names. But you know, the one I know the one right on the water downtown Burlington starts

Montu  

with an H.

Erwin  

Sorry, it’s actually public because it made headlines in the paper. So we shouldn’t trash people. Yeah, we should like why, again, like if the price is too low, I don’t blame. I don’t blame them, like you priced it wrong. It’s just like property managers. When I’ve seen property manager charge too little. I’m like, how are you going to get it? How are you going to make money at this, you’re gonna come from me somewhere else. I’d rather you just pay you here. And then you’re not going to come after me for when you like do change a doorknob charged me $100 To change your doorknob.

Montu  

And the last thing that’s very important for new construction is the neighbourhood. You want to have neighbourhood amenities, which are going to attract people to the neighbourhood that are going to float the value of the real estate. You want to have parks and libraries and commerce. The closer you are to downtown, the better protected you are from from a drop in demand.

Erwin  

Are we just talking Toronto or anything? Yeah, all cities you’d like. Do you like any other cities? Yeah, I

Montu  

  1. It’s not just Toronto that I help people trade in. I like York. Vaughn. Big fan of Vaughan, Richmond Hill, big fan of Oakville. It’s why moved here. And basically everything to the west of the DVP. I’m not crazy about the east side. Not just because it’s far away, but just the demographic isn’t what I would put in my own properties. But I like everything to the west. Up to Burlington, basically, Burlington, Mississauga is getting very congested Mississauga and Brampton, I kind of avoid for my own reasons. But everything else like Etobicoke great, great city. There’s a lot of attractions to people to these areas. So So basically in downtown

Erwin  

Lakeshore corridor, all the way to Burlington, is your preferred is your preference. Anything out of province?

Montu  

No, no, I looked at it. I looked at Montreal and you know, I’m from Montreal. I have nostalgic reasons for wanting to buy their beautiful city. But i i the political environment is not great. I won’t even get into Calgary. Maybe I can touch on Calgary. I’m not a fan of Calgary, there’s a lot of Oh

Erwin  

god, we’re going into a new construction. There seems to be a lot of new construction. I might be wrong. Social media is full of ads.

Montu  

And I might be dead wrong about it. They might flourish but they’re a one industry sector. And if something happens to oil, Calgary is going to tank again. Whereas Toronto we are we have three major industries finance, technology and media, film and media. And if one industry takes a hit, there’s a what do you call a float from the other industries that are going to help people and help the economy? That’s not gonna happen with Calgary.

Erwin  

Right on all the mining head offices are in downtown Toronto, for example. So yeah, there’s lots of high paying jobs downtown Toronto. So those are two favourite things and Monteux again, you’re agnostic investor, you do everything that you do. I remember we were talking when we were golfing the you Do you still have any holding the crypto stock or options?

Montu  

i Yeah, I’m a I’m a fan of crypto. There are four big ones that I am heavily trading. I have a little bit of everything because to me I don’t know which one is going to take off and become the next next one to the moon. But not a lot but I do trade Bitcoin Aetherium polka dot and this is not advice by the way. Polygon Yes. Not financial advice, folks. Sorry, one more time

Erwin  

Bitcoin. Just a polka dot

Montu  

polka dot Aetherium of course and Paul I got those are my four favourites because they have a trading pattern that as you know, I have like a background in trading they have a trading pattern that I’ve discovered from technical analysis that mirrors, Bitcoin and Aetherium everything else is just sinks and makes a move on sensationalism, or rumour or hype. But these four there’s something also something about the technology I really like. It’s found it has a real world use. I also have a dark horse hedera I’ve looked into it, I think this one is dark, you spell it? I can’t spell it. But the symbol is h bar HB AR. The reason I like this one is it solves the problem that Bitcoin has the speed and the you know, transferring crypto assets across the world, it should be within seconds. And Hadera does that Bitcoin very slow according to today’s standards? I mean, it’s 2022. We should be I shouldn’t have to wait, you know, 2030 minutes for my funds to be sent to Australia. That’s how impatient I am. You know, back in the day, it would take 48 hours to send money to Australia. But now I want it done. Yeah, we’re in 60 seconds tops, and Hadera does that it’s, I think what these guys have come up with this brilliant, not financial advice, folks. Don’t buy too much of it. But I think that could be the next big one. And Aetherium I like Aetherium more than I like Bitcoin, just because of its real world use. And it’s got more that technology is better, in my opinion, of course. And because of the high gas fees, it has a diminishing supply. So the supply is going down. It’s not increasing. And of course they got some kind of merger going on coming up in September. We’ll see how that goes. But

Erwin  

yeah, can you share what percentage allocation of your portfolio flows?

Montu  

Well, let’s just say I only recently started digging going down the crypto rabbit hole. It’s been about a year, maybe less than a year. It’s been about a year. And I had a goal to have 10% of my net worth in crypto. I’ve decided to just because it’s untested and anything can go wrong. It could go to zero. I’m reducing that to 5%. So my portfolio is 5% Crypto 5% insurance. Little bit of gold gold is just what kind of insurance whole life dividend paying and and the rest real estate baby that’s real estate has been working for the last 14 years. So

Erwin  

there’s look at what everyone paid for anything. Funny. Side use the story. I have a friend who works for trial. He bought his for like 600 just high 600 per square foot Wow. years ago. And that’s the only one he bought like, man, you’re an insider. Right? You know, exactly. You have access to all their research in like when there’s no you know, I was just like everybody else because I’m not I’m not in that industry. right close to it. You know, when I hit $1,000 a square foot, like, you gotta be kidding me. Right? Everyone went nuts. Everyone went nuts. And there was a 1200 square foot for comparing to what you know where no one’s buying bat. Right.

Montu  

So we this, this spring and summer I was seeing resale condos selling for 1500 to 1700 square foot or they’re nicer places, right? They’re newer buildings. Of course, not the older stuff. But still it’s the resale. It’s not the new construction, new construction, we’re clocking in at 1700 square foot to start in downtown Toronto.

Erwin  

I heard some new stuff selling selling for 17. Yeah, we don’t know if it’s gonna get built.

Montu  

Well, that’s the thing is if they’re selling it for 17, that’s I think that’s reasonable with the cost of everything. And labour is very expensive now. So they have a chance of being completed. If you’re paying 1300 to 1700 per square foot for new construction, you’re safe, or I should say safe River, because you never know. But if you’re paying less than 1300 for new construction, it’s I think it’s a dice roll. Because how can they do it? It’s expensive, their construction loan, you know, they’re paying more interest on that loan. So you may not get built.

Erwin  

And then same timing for nutrition kind of when interest rates start going down again. Yeah, on spring,

Montu  

the good builders will keep doing a good job. Everyone else is going to be delayed by about a year or two

Erwin  

right now because some builders will want to protect their reputation it was build it somebody even built it for a loss. Yeah. Crazy. Good on them.

Montu  

Well, there’s there’s a storm coming. You know, there’s a big storm coming.

Erwin  

We’re talking before this, like the storm has been coming forever.

Montu  

There’s always a storm. You know, this one was just a bad one. And it’s not about waiting for the storm to pass. Right. It’s about learning to dance in the rain. And I think this is going to be what’s upcoming people are not, they’re not expecting it. And if you don’t learn how to thrive in the rain and still push forward and still have a way to get through, if you’re just waiting for interest rates to bottom out, you know, or I should say peak out and prices to bottom out, you’re not going to you’re not going to do anything very, very, you still have to be an active, active person. I always look like right now I’m pitching lowball offers, even though I don’t think the market has bottomed yet. I think we’re going lower. Because real estate is perfect. Yes.

Erwin  

Like people will take deals that are imperfect. Exactly. So that’s, that’s it?

Montu  

No look for the opportunity here.

Erwin  

Because because we were looking at a deal, for example, where the bank was gonna take back the property. So either take our deal, or you let the bank take control, or would you rather, right, right, you’re gonna be hammered legal fees from the bank. As soon as they take the start taking it back. It’s and you’ve lost complete control. Now. It’s no longer your house, you can’t do nothing. You have no power. Right? So choose, right. Is to us. To me, it was a fair offer, but oh, gee, Monty, we’re way over time. Okay. Let’s talk about your book. Oh, yeah.

Montu  

Let’s cover that real quick. So insider secrets to pre construction, condo buying, renting and selling for maximum profit. I wrote this book a couple years back, it’s when I was predicting a rise in the condo value when everyone else thought that condos aren’t going to be worth anything. So I just put my experiences and tips and tricks, not just about condos, but you know how to deal with your selling, when you have to buy pre construction, how to sell pre construction, assignment opportunities. There’s even a bit of a little bit about some Airbnb how to short term to a short term rental. In my book, it’s really for people who want a an insider’s experience in the condo investing world, and how to find opportunities, because not everything is a good deal. So I kind of outline like, what types of properties what type of condos to look for what type to avoid, how to get a good deal. What are immediate delivery condos, because sometimes builders, they have extra inventory that they’re paying to carry, and they’re eager to get rid of it. So you can go in there and making them an offer. So if they’re asking like, you know, 900k, you can come and say I’ll take it off your hand if you throw in a free parking spot for 800k. And sometimes they do that. I got a couple of deals like that actually,

Erwin  

are their deals available in the assignment market right now? I

Montu  

think, again, it’s about going against the grain, there’s going to be a lot of people selling assignments. So if there’s excess supply, where is the demand? Let’s

Erwin  

just back up and explain the assignment market. So you correct me if I’m wrong. So people who bought new construction, and for whatever reason, they’re they’re wanting to sell their contract, basically, without closing guess, right?

Montu  

Yeah, they want to hand over their contract to somebody else, that person steps into their shoes and closes with the builder directly. So there used to be that assignments were very profitable, because they’re on a rising market, right. And they’re very, very little units available. So people are just gobbling them up. But right now, I think a lot of people are worried and that they’re going to be trying to sell their unit via assignment. It’s it’s a great time to buy an assignment, because there’s very few buyers. So you will get a good deal. But it’s not a good time to sell an assignment. Because you’re just going to get lowball offers. That’s what we’re seeing, like had a couple assignment listings. And all we got were lowball offers, even though the value of the unit is very reasonable to what we’re asking. It just people are just coming in 200k under

Erwin  

alright, because did you get emotional? Receiving?

Montu  

No, I did. I was expecting it because I was that guy on the other side. Right.

Erwin  

So that’s just the most you’re willing to give and take, you know, if you’re gonna give it you’re willing to take it. Yeah, exactly. And then any update, cuz I haven’t really seen it in the news, weren’t there construction slowdowns? Like weren’t certain groups on strike?

Montu  

Yes, lots of supply issues. And then labour strikes. So all new construction condos being built were delayed by another couple of months. So I started to say all I would say like 80% Because every project that I had, in my own portfolio that’s coming up for delivery, every builder sent me a notice saying hey, we don’t know how long this strike is going to last we’re delayed, we’ll let you know. Do you know what they’re asking for in terms of like more money? More money less? I don’t know. not privy to that. Labour agreements.

Erwin  

I’m just curious because then that gives me an idea how much labour inflation will be realistic. So

Montu  

labour is the builders biggest expense. So they have concrete steel lumber all that to pay for but labour is 40% of their costs.

Erwin  

So your your to build Yes. 40% including way as part of the between the whole pie that’s what

Montu  

that’s what they tell me. Right? So I don’t see their books, but they’re telling me there’s land costs. They’re soft costs, there’s closing costs, there’s materials costs, but labour is 40%. You are paying. So if you’re buying something for 1,400,000 of that is to pay people to like and it’s not just your unit. Remember, they’re building the entire building. They’re building the elevators are building the amenities. They’re, they’re building the foundation, they’re building the garage, so yeah, stuff’s expensive, man.

Erwin  

That’s expensive. And that’s part of the reason why real estates indexed to inflation. Yes. All right. We can’t just import labour. We kind of tries to but even whatever imports still expensive, if it came here to make more money, then come here and make less money. Wow. Okay. mattoni. Any final words?

Montu  

Okay, people in time. If people want to get a free copy of my book, they can download it at Dylan Realty. systems.ca. If you spell that Dylan d h, I ll O. N real TRAALTY systems.ca.

Erwin  

And we’ll have that in the show notes, folks. So if you’re driving, it’s okay. Yeah. Well, the link in the show notes.

Montu  

And yeah, I wish people luck and fortune. Those who partner up with an expert are going to achieve their goals.

Erwin  

Yeah, especially fear. Because I talk to people all the time in real estate. And I find I often find they don’t really know much what’s going on as literally golfing with someone just this week. And they said to me, I know all these people who, who bought a property already. Now they can’t sell their home. And I’m like, well, they get some bad advice. Yeah, I certainly more What’s worse than that? Is like no one could predict this. And like, I told my clients Exactly. This could happen. Right, right. I told me this could exactly be in 2017. Again, yeah. Right. So the advice from my mouth to our clients was you know, in December, January, February, March, if your plan is to sell the next 12 months sell it now. Yeah. All right. That’s exactly what I told you. Take the risk off the table. Right. I bought a risk right. And I did a sort of the same thing by refinancing. I’m too scared to sell and miss out on the game. Yeah, for more on all sides. iPhone crypto, Bitcoin at 23 grand. Like David, I missed the 20.

Montu  

What do you think so what you’re doing my pleasure, always a pleasure hanging out with you around. If you need any other advice, and if you want to discuss what good projects are coming up, you know where to reach me.

Erwin  

I’ll be bugging you about where you can fit for golf clubs. Awesome. Take care.

Erwin  

Before you go if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already, then sign up for my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s much improved demonstration over the one that I gave to my cousin chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself, I got into real estate for the cash flow but with the rising costs to operate a rental business, it’s just not the same as it was five to 10 years ago when I started there are forget the cash flow reduces your risk. The more you have, the more lumps 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 with so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell I love teaching and sharing this stuff.

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UPCOMING EVENTS

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BEFORE YOU GO…

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

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

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

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

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

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

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

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

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

Again that’s iwin@infinitywealth.ca

Sponsored by:

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

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

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

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

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

Erwin

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

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