From Housing Crash to Acquiring $2 Billion of Real Estate

** Transcript Auto-Generated**

0:00 – Hey friends, this is Erwin Szeto and
0:01 – welcome to the truth about real estate
0:02 – investing show for Canadians where it’s
0:05 – my job to interview the top minds in
0:06 – real estate and business to uncover the
0:08 – strategies, mindsets, and the habits
0:10 – that actually work, especially in
0:12 – today’s market. In today’s episode, I’m
0:15 – joined by Ben Barry, a true industry
0:17 – heavyweight who successfully deployed
0:19 – over $2 billion uh that’s US dollars
0:23 – into single family rentals, built to
0:25 – rent, and commercial real estate assets.
0:27 – Ben’s journey began during the depths of
0:29 – the 2009 finan global financial crisis
0:31 – where he carved out his path in
0:33 – commercial real estate before pioneering
0:35 – large-scale single family home
0:37 – acquisitions during the US housing
0:39 – recovery. His leadership helped
0:41 – operationalize the mass acquisition,
0:44 – rehab, and management of thousands of
0:46 – homes backed by major Wall Street and
0:48 – Canadian institutional investors. Now,
0:51 – Ben is the vice president of
0:52 – acquisitions and sales at Share, a
0:55 – platform revolutionizing the real estate
0:57 – investing by making US rental property
0:59 – ownership simple, passive, and
1:01 – accessible even to everyday Canadians.
1:03 – With boots on the ground and and
1:05 – expertise in over 20 markets from
1:06 – Florida to Texas, Georgia, North
1:08 – Carolina, Ohio, etc., Ben shares how
1:11 – institutional best practices are now
1:13 – being offered without the need to bring
1:15 – $50 million plus to the table. We also
1:18 – talk about why landlord friendly states
1:19 – matter, how technology and data have
1:21 – transformed real estate investing and
1:23 – how Canadians now invest just like the
1:25 – ultra wealthy and finally escape the the
1:28 – tenant friendly markets and find deals
1:29 – that actually make sense. If you’re
1:31 – serious about real estate investing,
1:33 – this episode is an absolute must listen.
1:35 – If you’d like to connect with Bend, you
1:37 – can go to
1:39 – iwin.sharesfr.com. Again, that’s
1:41 – iwin.sharesfr.com and click schedule a
1:44 – call. Please enjoy the show.
1:49 – [Music]
1:53 – But before we get to our guests, I want
1:55 – to take a quick second to share
1:56 – something valuable with you. If you’re
1:58 – serious about building wealth through
1:59 – real estate, but struggling to find
2:00 – profitable investments in Canada, I’ve
2:02 – got something that will help. I’ve put
2:04 – together a comprehensive guide to US
2:06 – real estate investing for Canadians,
2:08 – breaking down the best markets,
2:09 – financing strategies, tax
2:10 – considerations, and landlord friendly
2:12 – states where Canadians are getting
2:13 – better cash flow and long-term
2:14 – appreciation. It’s completely free. You
2:17 – can grab your copy at
2:20 – www.truthofaboutrealestateinvesting.ca.
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2:51 – download your free guide today. Now,
2:53 – please enjoy the show. Hi, Ben. Welcome
2:54 – to the show. Can you share a bit about
2:56 – your background and how you got started
2:57 – in real estate investing?
3:00 – Sure. Yeah, I’ve been uh been in the
3:02 – business since uh since straight out of
3:04 – college. So I graduated university. I
3:07 – think believe it’s Canadians that refer
3:09 – to it. Um back in 2009, it was the
3:11 – middle of the global financial crisis. I
3:14 – had studied advertising and the time
3:16 – there were no advertising jobs out there
3:18 – for a for a young recent grad. And uh
3:21 – real estate had always been an interest
3:22 – of mine and I wound up connecting with a
3:24 – commercial real estate brokerage um
3:26 – hiring investment sales brokers and uh I
3:30 – didn’t know any better and started
3:31 – working as a commercial uh commercial
3:33 – real estate broker back then. Um it’s
3:35 – terrible time. The market was extremely
3:36 – down, one of the worst seen in in
3:38 – decades if not a century. But I didn’t
3:40 – know any better. Um, but I learned a lot
3:43 – and after a couple years of grinding
3:44 – that out and working commission only,
3:46 – realizing that, you know, it’s going to
3:48 – be a couple more years, if not more,
3:50 – till this really becomes a viable
3:51 – business as a broker here. So, uh, I’m
3:53 – going to go find a salary job. And, um,
3:55 – it led me to connect with um with a
3:58 – group that I I helped start up with um
4:00 – that was with one of the first housing
4:02 – funds that was starting to buy homes out
4:04 – of the the housing crisis. So a lot of
4:07 – the uh American homes were highly highly
4:09 – distressed foreclosures very high and it
4:12 – was a fund that was going in buying up
4:13 – houses turning them into rental
4:14 – properties at mass scale. Um and I
4:17 – started with them in acquisitions and
4:18 – help them starting to uh to buy homes
4:21 – and figure out how do we efficiently buy
4:23 – thousands of homes at scale basically.
4:26 – So helping set up the processes,
4:28 – procedures, um hiring, training,
4:31 – managing agents and opening up new
4:33 – markets and you know doing all those fun
4:34 – things and helping them grow. And that
4:36 – was really my my kickstart into um you
4:39 – know single family rental business.
4:43 – So here’s a here’s a question you won’t
4:44 – have the answer to, but I think it’s an
4:45 – interesting uh for the for listeners
4:47 – benefit. Uh do you want to hazard to
4:49 – guest guess so the largest rate in
4:52 – Canada that of a holder of single family
4:54 – homes? Do you want to guess how many
4:56 – houses they hold in their portfolio? So
4:57 – this is a, you know, so Canada, you
4:59 – know, almost 40 million population, lots
5:01 – of houses in there. The largest REIT in
5:03 – can largest holding by REIT of single
5:06 – family homes. How how big would you
5:07 – guess that portfolio is in terms of
5:08 – number of houses? 1,000.
5:12 – It’s under 600 houses.
5:16 – Versus you were trying to buy thousands
5:18 – at a time. Correct. Yeah. We were trying
5:21 – to build a machine that helped you buy
5:22 – oneoff houses and uh deploy a lot of
5:25 – capital very quickly to buy thousands of
5:27 – houses. Right. And do you remember the
5:29 – year you started? Because I and and
5:31 – because there there’s a really there’s a
5:33 – there’s a famous Warren Buffett
5:35 – interview when he was on CNBC where he
5:37 – said I’d buy hundreds of single family
5:40 – homes if I could if it was if it was uh
5:42 – if it was logistically feasible to do to
5:44 – I’m paraphrasing.
5:46 – That was 2012.
5:48 – firm in 2012. So, which is it was
5:51 – kickstarting was one of the first. There
5:53 – there were a number of other firms
5:54 – starting to do it, but yeah, it was, you
5:56 – know, Warren Buffett’s logic was
5:57 – famously kind of referred back to as
5:59 – because housing pricing was so depressed
6:02 – given where values were traditionally at
6:04 – that it makes sense to go buy thousands
6:06 – of them. But at the time, managing
6:08 – thousands of houses seemed just
6:09 – impossible.
6:11 – Well, it didn’t exist at the time,
6:13 – right? Correct. Yeah. I mean it’s even
6:16 – when we were building things out we were
6:17 – using your local regional property
6:20 – managers and trying to kind piece mail
6:21 – that together to manage these houses and
6:24 – eventually the business turned um into
6:26 – internalizing the property management
6:28 – functions um to manage that internally
6:30 – to manage you know the properties in
6:32 – house with that many houses. That’s
6:35 – interesting you mentioned regional uh
6:37 – property managers. We don’t have retail
6:39 – property managers in Canada that work
6:42 – with uh not that that work with retail
6:44 – investors, even folks with portfolio of
6:46 – like 10 10 houses, whatever doors,
6:49 – because generally they’re very they’re
6:50 – very um I guess we do have regional
6:52 – property managers, but they’re still
6:55 – maybe like three full-time
6:58 – staff, right? I mean, I’d say that time,
7:02 – you know, 10, 12 years ago, they weren’t
7:05 – what they are today. I mean now you do
7:06 – have third party managers that handle
7:08 – thousands and thousands of houses
7:13 – and can for context for the listeners
7:14 – benefit because appreciate like you know
7:16 – it’s really funny because uh I remember
7:18 – growing up I forget what shows watching
7:21 – like late night Canadian talk show host
7:23 – and they would tease Americans about how
7:25 – little they knew about Canada like um
7:28 – like name the president of Canada like
7:30 – trick questions like that stuff like
7:31 – that and then we Canadians would laugh
7:33 – like oh Americans don’t know nothing
7:35 – about Canada. In my own experience,
7:38 – Canadians don’t know much about US
7:40 – investing and you’re you’re learning
7:41 – about that yourself as you speak to
7:43 – Canadians. U can you can you speak to
7:46 – back in 2012 how much money
7:48 – institutional money big money was going
7:51 – pouring into real estate investing? Now
7:53 – again coming from the context of Canada
7:55 – the largest holding of single family
7:57 – homes is under 600 houses by the by
7:59 – that’s the largest holding by by a
8:00 – single uh by a single REIT. I believe
8:02 – someone in in Quebec might have 600 or
8:05 – 700, but still we’re talking like very
8:07 – very small compared to what you’re used
8:09 – to. So question so question is can can
8:12 – you paint a picture for the listener
8:13 – back in 2012 even what was the amount of
8:16 – investment and who was pouring money
8:19 – into into the the real estate market in
8:21 – the US?
8:23 – Well, I’ll speak uh kind of specifically
8:25 – to the single family rental space where
8:27 – I was kind of intimately involved with
8:29 – and you know there were a handful of
8:31 – funds all over a billion dollars to
8:34 – start out with of what they were going
8:35 – to start with a billion. Okay, got it.
8:39 – Well, then that got deployed and then we
8:41 – would recapitalize, you know, different
8:43 – kind of uh debt structures and credit
8:45 – structures that would expand and expand
8:47 – and those those groups have have grown
8:49 – and grown and have tens of thousands um
8:53 – of homes now.
8:55 – And you’re you’re backed by Wall Street
8:58 – money. Yeah, for the most part.
9:02 – And can you name the Canadian pension
9:04 – that was backing you as well?
9:07 – I’m not sure on specifics there. Okay.
9:09 – Okay. Okay. That’s okay. We won’t we
9:12 – won’t we’ll protect the innocent.
9:15 – So, this is from your bio. You
9:17 – successfully deployed over $2 billion
9:20 – into single family rentals, built to
9:22 – rent, and commercial real estate assets.
9:25 – So, what is it that drew you to this
9:27 – sector?
9:28 – Yeah, I mean I mentioned earlier I just
9:30 – was very interested in real estate and
9:33 – then you know going through that time
9:34 – out of college of just applying to lots
9:36 – and lots of different jobs and being
9:37 – like okay go sell payroll software or
9:40 – office equipment but didn’t really
9:42 – excite me. You know I love real estate.
9:44 – I love that you’re you’re working about
9:46 – a structure you know a building maybe
9:48 – land but it’s it’s just a large deal and
9:50 – I like kind of working on large projects
9:52 – and with the single family rental
9:54 – business really interested me because it
9:56 – was it was new. it was emerging asset
9:58 – class. Um you know it became a very
10:01 – institutional recognized asset class
10:03 – like you know office buildings or
10:05 – commercial or industrial are for a lot
10:07 – of groups. At the time single family
10:08 – building rentals were not and it was
10:10 – building something that would be
10:11 – recognized as a institutional level
10:13 – asset class.
10:16 – Now now tell us a bit about what it was
10:17 – like early days like how many how many
10:20 – were run the company when you started?
10:23 – Yeah, I think I was one of 12 in our
10:25 – office and we were kind of one of two
10:27 – offices. It was it was crazy. And then
10:31 – and then they grew pretty quick, right?
10:34 – Very quickly. Yeah. So, I mean, the way
10:35 – we work, we were relying on, you know,
10:37 – third party real estate agents and teams
10:40 – kind of in a market. So, if I was
10:41 – managing one market, I probably have
10:43 – three teams of agents that were going
10:44 – out, scouring the MLS, finding deals,
10:47 – underwriting them, finding comps,
10:49 – everything support, emailing me a
10:51 – proposal. then I’d you know review get
10:53 – an offer back to them and doing that as
10:55 – fast and as efficiently as we could.
10:57 – Eventually technology would come in and
10:59 – and help that work a lot more
11:00 – efficiently. Um but yeah it’s um it was
11:03 – it was rough in the beginning and kind
11:05 – of halfhazard but it was it was like
11:07 – many startups in many kind of fledgling
11:09 – industries but it’s grown and it’s a
11:12 – very interesting different place now.
11:14 – We’re also talking about exiting the
11:16 – financial crisis and uh I don’t know how
11:18 – geographically based you were because I
11:20 – know you’re in Florida which is kind of
11:22 – like the epicenter of the problems,
11:24 – right?
11:26 – Yeah. I mean a lot of the the real
11:27 – states I mean Florida amongst other
11:29 – markets you know Phoenix, Las Vegas uh I
11:34 – don’t know there are many markets immune
11:35 – to kind of the housing crisis. It was
11:38 – things shot up, things were built, and
11:39 – then kind of everything kind of plunged
11:41 – and fell. And then, you know, that’s
11:44 – kind of the opportunity where a lot of
11:45 – investors started buying houses out of
11:47 – foreclosure and REO and just short sales
11:50 – and and all those sorts of kind of
11:52 – distressed uh maneuvers to start buying.
11:55 – And that kind of quickly led a lot of
11:57 – those states out of that kind of
11:58 – financial crisis was the real estate was
12:00 – then being propped up again. you know,
12:01 – you had contractors going back to work,
12:03 – you had real estate agents transacting
12:05 – again, and you know, the industry
12:07 – started building back up. And you must
12:09 – been inundated with leads because who
12:12 – else was buying at that time? Well, it’s
12:15 – funny you say that because there was
12:17 – probably half a dozen groups like
12:18 – ourselves and so we’re basically
12:20 – ourselves. So, you probably had your
12:23 – local fix and flip investors going to
12:25 – the county courts to buy auction
12:28 – properties. um very familiar with that
12:30 – process. Um and then eventually these
12:33 – funds came in and started kind of
12:35 – pushing those those more regional and
12:36 – local guys out and then became funds
12:38 – versus kind of other funds buying
12:40 – houses.
12:42 – So how uh paint a picture for the
12:43 – listener like how big were these teams
12:45 – now that you’re running because you’re
12:47 – how many how many properties would would
12:48 – you say a week you were transacting on
12:50 – like acquiring?
12:52 – I’d say early days transacting now you
12:55 – know that I was one acquisition person.
12:57 – we probably had four or five and that
12:59 – team would grow and we would manage one
13:02 – to two markets and those markets would
13:03 – probably have two to four teams of real
13:05 – estate agents. Uh kind of context of
13:08 – there and deal flow, you know, we made a
13:11 – lot of offers. Some, you know, we were
13:13 – competitive, some, you know, we weren’t,
13:14 – but it was more kind of a game of
13:16 – getting offers out, getting offers out
13:17 – as quickly as possible.
13:21 – Docuign days. Oh, yeah. No, we had
13:24 – docuign. Thank Thank goodness that Oh,
13:26 – thank goodness.
13:27 – Yeah. But in terms of our I mean we are
13:29 – probably trying to do triple digits a
13:31 – month not more than that. So you know
13:33 – 100 plus a month.
13:36 – Yeah. So I think that so I as I was
13:39 – preparing you before the show like
13:40 – nobody has experience doing that
13:42 – acquiring 100 plus properties in a month
13:44 – let alone a year let alone a
13:48 – career. All right. So and now who were
13:52 – your clients? uh like you you’ve worked
13:54 – extensively with institutional
13:56 – investors, uh real estate investment
13:58 – trusts, hedge funds, even private equity
14:00 – firms, family offices, like and now
14:04 – you’re working for
14:06 – share. Uh first of all, tell us about
14:08 – working with like humongous money like
14:11 – for example, how much money would one of
14:13 – these clients, investors have to bring
14:15 – to the table to play?
14:18 – So the initial Wall Street funds were
14:19 – basically you know they raised the fund
14:21 – and essentially all that money was to
14:22 – deploy you know through them you know
14:24 – they were they’re investors but it
14:25 – wasn’t really kind of working with
14:27 – individual investors at that point the
14:30 – industry kind of evolved in the second
14:31 – place I went where we started working as
14:33 – the operating partner so we would work
14:36 – with more of your hedge funds private
14:38 – equity groups family office that want to
14:40 – at this point this is
14:42 – probably god probably five years after
14:46 – kind of that that initial 2012. So it’s
14:48 – probably 2017, right? Where now it was a
14:50 – lot more a bit more normal, right?
14:52 – There’s a lot more interest like, hey,
14:54 – this single family rental business is
14:56 – actually turned into something
14:57 – manageable. So that thing that warm up
14:59 – said, now it’s actually manageable and
15:00 – you can deploy it. So that attracted a
15:02 – lot more people to the space, but they
15:04 – weren’t going to go build a large
15:06 – operating like operating platform like a
15:08 – lot of the initial funds did. So it was
15:10 – like an operating partner like us where
15:12 – we would, you know, we kind of buy be
15:15 – like, hey, here’s where we should buy.
15:16 – user buy box. We go source the deals,
15:18 – acquire them, rehab and manage them. But
15:20 – they were essentially their their deals.
15:22 – They sat on their balance sheet. So we
15:24 – just operated for them. And that was
15:26 – kind of more of your smaller investor,
15:28 – but you know, still pretty sizable
15:30 – amounts. Um not the billions, but um
15:33 – still significant amount of capital. How
15:36 – much would how much would an investor
15:37 – have to come to the table with before
15:39 – you’d speak to them?
15:42 – um probably you know
15:45 – probably 50 80 uh million in equity.
15:49 – Okay. So pretty much half the
15:51 – listenership of this podcast. So
15:55 – um so 50 to80 million US dollars back in
15:59 – 2017 which is worth a lot more
16:03 – today. And then
16:05 – um and yeah I guess kind of bring it
16:07 – back to today now. How has this industry
16:09 – evolved?
16:12 – Yeah, I mean it’s it’s it’s interesting
16:14 – because it’s kind of it’s a lot more
16:17 – efficient. You know, I think you can get
16:19 – a lot more done with kind of fewer heads
16:21 – technologies taking huge leaps and in
16:24 – way we acquire way we can manage
16:27 – portfolios and properties.
16:30 – Can you can you um can you paint a
16:32 – picture of like who your property
16:34 – managers are because this is a a very
16:36 – common question I get among my Canadian
16:38 – clients is because they’re used to their
16:40 – context mom and pop you know often one
16:44 – entrepreneur one owner couple
16:47 – contractors right some part-time staff
16:50 – maybe two full-time staff like but
16:53 – that’s generally what the max is for
16:55 – property managers here you know enough
16:57 – about our local real estate how hard it
16:59 – to run these businesses. What what um so
17:02 – you now and then only largecale property
17:06 – managers generally only work for or
17:08 – inhouse. So they they’re in-house for
17:10 – the REIT, right? That’s then there’s
17:13 – very little in between uh in my
17:15 – experience. Uh now what what what was
17:18 – the property what were the property
17:19 – managers like that you were working
17:20 – with?
17:22 – Well, yeah, I mean there’s kind of
17:23 – twofold there. So some of the larger
17:26 – funds inhouse their own property
17:28 – management. So it was their property
17:29 – management company.
17:32 – There grew large scale property managers
17:33 – that would do the third party management
17:35 – for other groups that would kind of roll
17:37 – out smaller groups under their umbrella
17:39 – giving them more scale and efficiency. I
17:41 – mean in terms of of headcount I mean
17:43 – it’s you know probably could be hundreds
17:46 – you know it’s it’s you know a corporate
17:48 – business at that point. You know you do
17:49 – have your regional leasing agent
17:51 – maintenance people handling you know
17:53 – turns and maintenance. Um but it’s it’s
17:56 – scaled and it’s under your umbrella.
17:57 – What that does is creates more
17:58 – efficiency to get things done quicker,
18:00 – leveraging technology. You know, when
18:02 – your AC’s out and you’re in Florida, you
18:04 – want to get that fixed quickly. Um, and
18:07 – making sure you’ve got someone that’s
18:08 – taking your calls, someone that’s, you
18:09 – know, addressing that concern, you know,
18:11 – as quickly as possible. Not, you know,
18:13 – calling my local property manager,
18:15 – hoping they pick up, and then hoping
18:16 – they can get an AC guy on the line that
18:19 – can come out and fix my property. You
18:20 – know, it’s a lot more efficient, much
18:23 – better experience for the resident and
18:24 – tenants.
18:26 – Uh, so for my clients, I actually
18:28 – reviewed um some of their due diligence
18:30 – documents, including like u home
18:32 – inspections and then I’d always look at
18:34 – their contractor quotes as well. So here
18:38 – I’ve done volume. I’m doing air quotes
18:40 – for people listening. I’ve done volume
18:42 – as well. I send a lot of referrals being
18:44 – a being a realtor. Uh, so I’m used to
18:46 – like a two-page
18:48 – quote because, you know, and and my my
18:53 – contractors are often using some
18:54 – software, but I’m not getting a heck of
18:56 – a lot of a
18:57 – detail versus when I got my my um my my
19:01 – quote for my house in San Antonio, it
19:03 – was like 70
19:04 – pages, and there are pictures and there
19:06 – was a description, there’s a dollar
19:08 – amount next to it. So, I had I had never
19:11 – seen this level of of um transparency
19:14 – and granularity.
19:16 – Um and and again, this was this was like
19:20 – a culture shock to me because I’ve
19:21 – worked I’ve worked with contractors
19:23 – forever. Like my my ex had a had a
19:25 – contracting business. Uh they had a a
19:27 – bathroom kitchen renovation business.
19:28 – So, I was used to that, right? That was
19:30 – the world. One page, one two page
19:32 – quotes, that’s it. So this whole this
19:34 – whole like to see automation on this
19:36 – level, it was just a complete complete
19:38 – shock to me. Um can you can you add to
19:41 – that? Like um like you’re you’re
19:43 – learning about the Canadian market
19:45 – yourself. What what are some of these
19:47 – other differences that the the Canadian
19:48 – investors aren’t used to? Well, I mean
19:50 – that’s a perfect example of where I was
19:52 – mentioning technology has advanced the
19:54 – field so much because to buy at scale
19:57 – you have to still inspect the property
20:00 – and you know understand everything
20:01 – that’s going into it. So that’s why, you
20:03 – know, we get these scopes, you know,
20:06 – rehab bills back of saying, “Okay, what
20:07 – do we need to do to this property and
20:09 – understand without having to go walk it
20:10 – myself or go through it with an
20:12 – inspector or contractor, getting those
20:15 – things back to you to make an
20:16 – intelligent decision as an acquisition
20:18 – person, you know, help helped run the
20:20 – efficiencies and kind of what has grown
20:22 – out to why, you know, we can offer
20:23 – something like that to a share client
20:25 – that, you know, is buying one, two,
20:27 – three, four, five houses um and getting
20:29 – that level of detail and the efficiency
20:31 – in pricing is because they’re
20:34 – utilizing the same contractors or maybe
20:36 – paint suppliers or flooring suppliers
20:39 – across a number of houses that are
20:42 – bringing that pricing down giving you
20:43 – more efficient and effective pricing.
20:46 – So again, you’ve done you’ve done $2
20:48 – billion of acquisitions of houses. How
20:52 – many of them did you did somebody walk
20:55 – like actually like go site visit?
20:57 – because I’m I’m asking because uh
20:59 – Canadian investors ask, “Oh, uh do I do
21:02 – I go see the
21:03 – house?” What do you What do you say to
21:05 – that? Yeah, I mean, we we had boots on
21:08 – the ground. Somebody would walk and we
21:10 – generate an inspection report on every
21:12 – single house u that that was purchased.
21:14 – I personally did not walk all of them.
21:16 – There were a handful here and there. I’d
21:18 – be on a market tour and walk to some
21:20 – inspections, um, inspect neighborhoods
21:23 – and things like that. But no, I was not
21:25 – walking all of those houses personally,
21:27 – but relying on people that were doing
21:29 – inspections and building their scopes
21:31 – out.
21:33 – So again, you’ve worked for like Wall
21:34 – Streetbacked firms with with, you know,
21:38 – billion plus
21:40 – money. Now, you recently moved made the
21:43 – move to share and you’re now vice
21:44 – president of acquisitions and sales.
21:46 – What is it that attracted you to the
21:47 – role and to the company? Yeah, kind of I
21:50 – mentioned earlier I like kind of growing
21:52 – and kind of building out you know a new
21:55 – new kind of asset new company. So I like
21:57 – what Shar’s doing. You know they’re
21:59 – making real estate investment in the
22:01 – states very very effective and very
22:05 – efficient. You know you can do it
22:06 – remotely internationally very passively
22:09 – but still getting the effects and
22:11 – benefits of having a large scale
22:12 – operator behind you.
22:15 – Now, in your experience, like how much
22:17 – money do you do you have to bring to the
22:18 – table to get this type of service?
22:22 – Oh, I mean to leverage kind of what Shar
22:25 – is offering their clients, you have to a
22:28 – couple hundred homes if not more to
22:29 – really kind of get this level and the
22:31 – efficiencies that Shar’s offering.
22:34 – Great. And that’s what that’s what um
22:37 – when Andrew first when I first met
22:38 – Andrew, the CEO uh co-founder of this
22:40 – company, I’m like I’d never seen
22:42 – anything like this. in in Canada and
22:45 – then you make it available to an
22:47 – everyday
22:48 – investor and the everyday investor
22:50 – doesn’t have to give up any equity.
22:53 – Right. Right. Like u I don’t know how
22:56 – much you can go into it like when you me
22:57 – when you worked for an operating company
22:59 – in 2017 like what was the split between
23:02 – your company and the investor? Um I mean
23:05 – there’s a fee model there but the the
23:07 – the capital partners own the houses
23:10 – outright.
23:13 – And then can you talk to does the fee
23:15 – structure that different between that
23:17 – company and share? Uh I mean somewhat
23:19 – but I mean I think they all operate
23:21 – under similar pretense of you know the
23:23 – the money coming behind is buying the
23:25 – house and owning the house outright and
23:27 – then you know service fees and you know
23:29 – acquisition fees are tied to that for
23:31 – performance.
23:33 – Very cool. But again, you have to come
23:34 – to the table
23:36 – with minimum 100 hoses
23:40 – and a Yeah, I mean it’s I haven’t had
23:42 – specific conversations recently of how
23:44 – many doors you would need, but it’s it’s
23:45 – a big number. Well, I mean, it’s a big
23:47 – number if you want to get, you know,
23:48 – your your cost down because that’s where
23:51 – the efficiency comes from is having that
23:52 – scale. And again, so my first reaction
23:55 – was this is too good to be
23:57 – true. Are you getting that? I’ve gotten
24:00 – that. I gotten that a couple times. The
24:01 – funny part is when sometimes I say, “Oh,
24:02 – the fees are too high.” So, I’ve heard
24:04 – both. So, so being in the middle is so
24:07 – bad if we truly are in the middle. It’s
24:11 – it’s it’s an easy sale it feels like
24:13 – because it’s delivering something that
24:15 – hasn’t been offered to you, but should
24:16 – be, you know, it’s it’s it’s easy real
24:19 – estate investment and it’s open to you
24:21 – and you’re getting the benefits of large
24:23 – scale companies without having to be a
24:25 – large scale company. And it’s, you know,
24:28 – coming from an environment where maybe
24:29 – you can’t buy investment properties that
24:31 – easy or if you do, you can’t manage them
24:33 – efficiently. Um, if but with problematic
24:36 – tenants. So, you know, I think it’s a
24:39 – great opportunity to to open up to, you
24:41 – know, your client base to to utilize
24:43 – share their platform.
24:45 – I mentioned to you uh what what property
24:47 – management looks like in my experience
24:49 – and and where I am and and also I’ve had
24:52 – over 300 past guests on the show as
24:53 – well. So I’ve spoken to many people
24:54 – about their investment models and
24:56 – including like their structures and who
24:57 – manages for them what not and also
24:59 – before we were recording I mentioned to
25:01 – you
25:02 – uh I think every investor at least in
25:05 – Ontario needs to understand this before
25:06 – they decide to invest. So I’ve had the
25:08 – pres the largest lobbyist in Canada so
25:10 – the president of um uh federation of
25:13 – rental uh properties Ontario FURPO and
25:17 – he’s also the pres the the acting
25:18 – president for uh Canadian federation of
25:20 – apartment association. So he is the head
25:24 – of the two large two of the biggest uh
25:26 – lobby um lobbyist uh organizations
25:30 – representing apartment building owners.
25:32 – And a survey among apartment building
25:34 – owners in Ontario came back with uh if a
25:37 – dependent if a tenants pay you rent from
25:39 – the time you service them notice apply
25:42 – that they be evicted non-payment to
25:44 – enforcement as in like they’re removed
25:46 – from the property is 7 to 7 and a2
25:48 – months. Now again that’s that’s that’s
25:50 – largely institutional money. So this is
25:52 – this is like sophisticated professional
25:55 – uh investors, right? This isn’t mom and
25:57 – pop. So mom and pop would like going way
25:59 – beyond seven months for for enforcement
26:01 – of non-payment of rent. What do you say
26:03 – to that? How does that fit into your
26:05 – world? Blows my mind. I think it’d be
26:09 – very tough to operate and very tough to
26:11 – make a decent return.
26:15 – And have you seen anything like that
26:16 – before in your experience?
26:19 – No, I mean we we’ve always tended to
26:21 – operate in landlord friendly states just
26:23 – to make sure those things work more
26:24 – efficiently. You I run into some
26:26 – nightmare tenants here and there, but
26:28 – it’s never been that long of a of a
26:30 – process to to get them. So, let’s let’s
26:34 – take a vanilla non-payment of rent in in
26:36 – the markets that you’ve operated. Can
26:37 – you can you name some of the markets and
26:39 – then what is how what is the process to
26:41 – evict a non-paying tenant?
26:44 – believe it’s, you know, 30 day, I think
26:46 – 30-day notice and then 90 days post, you
26:49 – know, then you get the sheriff out to to
26:51 – evict and it’s going to vary a little
26:53 – bit and I’m not going to go through the
26:55 – process intimately to to give you
26:57 – further detail, but I mean it’s roughly,
26:59 – you know, a couple months they got
27:01 – somebody out maybe a few months.
27:05 – It’s just uh just culturally here in
27:07 – Ontario, it’s the tenants all know they
27:09 – have all the rights.
27:11 – That’s well and then uh I don’t know how
27:14 – much social media has influenced it too
27:16 – but you know we’ve seen people in the
27:17 – states that kind of promote you know
27:19 – ways to get around it and you know
27:21 – aggressively go after kind of those
27:23 – sorts of those tactics and you know
27:25 – protect ourselves against those. Mhm.
27:28 – So, for the listener’s benefit, what
27:29 – markets did you operate in that you felt
27:32 – were landlord friendly? And um I
27:34 – probably operated in, you know, over
27:36 – over two dozen markets throughout the
27:38 – time. You know, a lot of the Sunb Belt
27:40 – markets, Florida, um Atlanta, Georgia,
27:43 – Carolas,
27:45 – um
27:46 – Alabama, Tennessee, Texas, Kansas City,
27:50 – and then some Midwestern markets. Kansas
27:52 – City, Oklahoma City, Ohio, Pittsburgh,
27:56 – Indianapolis. Uh there’s probably a few
27:58 – more. Arkansas, but there’s a few others
28:01 – in there. I’m sure I’m forgetting. So,
28:03 – you’ve been around.
28:05 – Yep. You know, you do that much, you
28:07 – tend to hit a lot of different markets.
28:09 – And and that’s why I tell And um like in
28:12 – Canada, we’re not really used to that
28:13 – and and having multiple to have so many
28:17 – options for at least having even a
28:19 – mid-size city to invest in.
28:22 – Like for example, it was this big news
28:23 – yesterday that’s finalizing a massive
28:26 – bankruptcy. Uh this small group of
28:29 – gentlemen were trying to become the
28:31 – biggest institutional owner of real
28:32 – estate in Ontario. I think they got to
28:35 – 600, now they’re all
28:38 – bankrupt. Yeah. Uh understand like um
28:42 – because of because the affordability is
28:43 – the way it is here, it’s just so
28:45 – expensive. Um and also because we have
28:47 – basements in our houses because it’s
28:48 – cold. So we had to we had to build
28:50 – basements in order to compensate for
28:52 – frost lines so that the property doesn’t
28:54 – heave whatnot. So very common strategy
28:56 – at least in in Ontario and Alberta is
28:59 – that we put in we complete basements
29:01 – into apartments into a complete separate
29:04 – apartment. Uh when I first did mine it
29:06 – was like $33,000 to do the conversion.
29:09 – Today’s retail price is about
29:12 – 160,000. Uh so prices have gone way up.
29:14 – Uh it’s it’s an invasive renovation. Uh
29:17 – so it takes time and so we’ve had folks
29:21 – trying to do this on scale in small
29:23 – towns of like 50,000 population trying
29:25 – to do like a house 100 houses in a short
29:28 – amount of time. So unfortunately they
29:30 – since gone bankrupt I forget where I was
29:31 – going with this but what do you look for
29:34 – in a market? What do you look for market
29:36 – in a market before you decide that’s a
29:38 – good place to invest? Obviously friendly
29:41 – landlord laws um of course and then you
29:44 – know it’s a strong economy diverse kind
29:46 – of workforce and industry uh
29:49 – affordability positive growth um in
29:52 – rents and appreciation and population
29:54 – you know you want somewhere that people
29:56 – are moving to not moving away from and I
29:59 – think that’s you know good schools
30:00 – another one um you know I think those
30:03 – are the main drivers to really kind of
30:04 – get a green light for a market to go
30:06 – into
30:08 – now they give you and for the listeners
30:10 – benefit as well actually the New York
30:12 – posted an article about what hap what
30:14 – would happen if Canada became the 51st
30:16 – state again not getting into politics
30:19 – just just purely numbers if Canada was
30:22 – to become the 51st state I think we’d be
30:23 – the fifth poorest state in terms of
30:27 – income and based on housing we’d be the
30:29 – fourth most
30:31 – expensive as a country that’s we have
30:34 – that kind of disparity can you uh can
30:36 – you talk to affordability in your target
30:38 – markets like what kind of price points
30:40 – and rents are are you looking for when
30:43 – you’re thinking affordability?
30:45 – Yeah, I mean it’s it’s probably that two
30:48 – to 300,000 price point, maybe a little
30:51 – higher. And it depends because it’s just
30:54 – because that’s the median um price point
30:55 – in that area doesn’t mean we’re going to
30:57 – be paying that for that property. We’re
30:58 – going to be looking to where the rents
31:00 – make sense. So where the rents and the
31:02 – pricing makes sense to where the yield
31:04 – is attractive to an investor.
31:08 – making sure there’s enough supply and
31:09 – you can find a good area but you know it
31:11 – might be tough to buy and then you kind
31:13 – of can’t grow there. So it’s you want to
31:15 – find somewhere with enough supply um to
31:17 – meet your demands.
31:19 – In every city you’ve named I think they
31:21 – all have a professional sports team as
31:23 – well.
31:25 – That’s how I did my travel you know. Oh
31:28 – yeah. Yeah. But it is I think you do
31:32 – well I think you see that with with
31:33 – population size. Um, you know, I think
31:36 – there are some smaller markets. I think
31:37 – Birmingham, I don’t think um has a team,
31:41 – but that may be one of a few. Little
31:43 – Rock, I don’t think has a team. Those
31:45 – are good little markets. I don’t I say
31:47 – little markets, but there’s good markets
31:48 – that maybe you don’t hear in the
31:49 – headlines as much as you know Atlanta
31:51 – and Texas.
31:53 – Can you talk to deal sourcing? Um, how
31:56 – do you find properties?
31:59 – That’s secret. Can’t say that.
32:02 – No, that’s it’s really been my specialty
32:04 – over my career is is finding those
32:06 – special deals and finding those u those
32:09 – portfolios and such. And a lot of it
32:11 – it’s it’s from relationship building.
32:13 – It’s it’s putting yourself out there.
32:14 – It’s networking. It’s finding the
32:16 – strategic relationships with who has the
32:18 – inventory of what we’re trying to buy
32:19 – and where does it make sense.
32:23 – Yeah. You mentioned relationships. Are
32:25 – are these relationships with with
32:26 – individual homeowners or like portfolio
32:28 – owners?
32:30 – It’s a good question. So, it’s I mean it
32:32 – may be homeowners, but that homeowner is
32:34 – the portfolio homeowner. A lot of it is
32:36 – people, you know, wholesalers, brokers,
32:40 – um you know, kind of in in the states,
32:43 – you know, single family rentals have
32:44 – become such a kind of asset class that
32:46 – you have portfolio brokers that are
32:48 – specializing in buying and selling
32:50 – portfolios of single family rentals much
32:52 – like, you know, you probably have uh
32:54 – office building brokers or or something
32:56 – in in maybe Canada like we do in the
32:59 – States. you know, it’s it’s a it’s its
33:00 – own asset class. So, making sure that
33:02 – you’re top of mind when they’ve got a
33:04 – portfolio coming to market or maybe it’s
33:05 – offm market, making sure you’re in front
33:08 – of them and they know you and they work
33:09 – with you and know you’re easy to work
33:11 – with.
33:13 – It’s totally different up
33:16 – here. Like, for example, like
33:18 – wholesalers in the States, they do way
33:20 – more volume than ours do up here do.
33:25 – And then you actually built some of
33:26 – these teams yourself, did you not?
33:29 – Um not so much wholesaling. Well, yeah,
33:31 – for a little bit we did um it was an
33:33 – internal we did some direct marketing
33:35 – for a while. Um and then pivoted away
33:37 – from that. But but yeah, we did a little
33:39 – bit of wholesaling. And I think again it
33:41 – goes to kind of evolution of technology
33:44 – and being able to to reach multiple
33:46 – markets and handle handle leads and and
33:49 – business effectively and efficiently.
33:54 – you talked to some ways you’ve seen
33:55 – technology improve um improve real
33:58 – estate investing because again up here
34:01 – we’re we don’t I don’t see a ton of it.
34:04 – I don’t see a lot of use of technology.
34:07 – I mean a lot of it is you know how do
34:09 – you figure out what the rent’s going to
34:10 – be? um you know, utilizing technology
34:12 – that’s looking at, you know, past rental
34:14 – comps and kind of computing what what
34:17 – rent should be all the way to really
34:20 – going through large kind of tapes of of
34:22 – homes and kind of using technology to
34:25 – basically kind of underwrite and tell
34:27 – you which homes are are homes you should
34:29 – pursue or not pursue. Um, yeah, I mean
34:32 – that that’s a lot of a lot of the data
34:34 – providers because you know when you
34:35 – underwrite a home there’s a lot of
34:36 – things you need to account for taxes,
34:38 – insurance, rent, rehab values and making
34:42 – sure that all those data points are
34:44 – accurate and
34:48 – reliable feels so
34:51 – analog because for me it’ll be like I’ll
34:54 – call my property manager and what do you
34:57 – think the rents are? And again, like
34:59 – they’ll have a couple dozen properties
35:02 – under management in the city, maybe a
35:03 – hundred. Like you’re talking about
35:05 – property managers that have like a
35:07 – couple thousand houses under management
35:08 – in the city. So alone they’re data
35:11 – they’re you know um you know Google is a
35:14 – massive company because they’re a data
35:16 – company. Like the amount of data that’s
35:18 – available to your from your vendors is
35:19 – just this is why I feel analog. I feel
35:23 – like I’m coming from the dark ages.
35:25 – Hasn’t always been that way. I mean,
35:27 – going back to when we first started,
35:28 – rental data wasn’t tracked in every
35:30 – market. You know, a lot of the times,
35:32 – you know, we put on the MLS when a house
35:34 – was for sale, but not every market would
35:36 – want those. So, then it was kind of
35:38 – like, all right, how do we figure out
35:39 – the rent? And it was relying on property
35:41 – managers to kind of be like, what do you
35:42 – think this is? But then again, you’re
35:44 – kind of you’re slowing down the process
35:46 – a little bit and then you’re also kind
35:48 – of relying on one person’s opinion
35:50 – versus kind of looking at data to make
35:51 – that opinion to where now rental data in
35:54 – all markets is pretty pretty efficiently
35:56 – found.
35:58 – Wow. Wild. What are some of the biggest
36:01 – advantages for Canadian investors
36:03 – looking into getting into the US rental
36:04 – market through share? Um, I think
36:07 – affordability right now based on kind of
36:09 – what I’ve heard of finding deals that
36:12 – are affordable and then deals that
36:14 – pencil. And I think the big one we were
36:16 – just talking about is operating the
36:18 – property. You know, if you run into a
36:20 – bad tenant, you know, sounds like you’re
36:22 – kind of stuck with it for a while and
36:23 – your cash flow is gone. Whereas, you
36:25 – know, we’re investing in landlord
36:27 – friendly markets with with professional
36:29 – management that can handle, you know,
36:30 – any hiccups that happen. So, I think
36:32 – those are a few few of the initial uh
36:35 – biggest advantages.
36:38 – Yeah. I I think it’s kind of getting
36:40 – lost on Canadians, Canadian investors,
36:42 – how unaffordable it is here. Kind of
36:45 – like the analogy the example I gave if
36:47 – if we were if Canada was a 51st state,
36:49 – how we would rank for housing and
36:51 – incomes. Like it our rents are really
36:54 – unaffordable up here.
36:57 – Um yeah, it’s it’s just Yeah, it’s
36:59 – really sad. Uh so um let’s talk more
37:02 – about your what your plans are for
37:04 – share. So what’s your vision on the
37:05 – acquisition side for share? Are there
37:07 – any new strategies or markets you’re
37:08 – looking to explore?
37:10 – Yeah, I mean we’ve got a large scale
37:13 – coverage now the markets we’re in but I
37:15 – think there’s always room for expansion.
37:17 – I think as we’re looking at more data,
37:19 – figure out which ones we want to get
37:21 – into terms of strategy, you know, I
37:23 – bring a lot of a lot of sourcing
37:25 – connections, a lot of acquisition
37:27 – channels that we can tap into to really
37:29 – bring in a lot more inventory to give
37:31 – our clients more optionality, find
37:33 – better deals and more deals, you know,
37:35 – to help scale.
37:38 – Now I I mentioned how we have
37:40 – affordability issues up here and that’s
37:42 – why the whole um basement apartmenting
37:45 – strateing strategy became a thing around
37:48 – six eight years ago. When I started back
37:50 – in 2005 we were buying single family
37:52 – homes because we could cash flow a
37:53 – single family home. Uh and you mentioned
37:55 – that you like have you trans do you
37:58 – transact on anything besides single
38:00 – family homes ever?
38:02 – I’m not I
38:04 – mean working commercial real estate yes
38:06 – but I mean within the single family
38:08 – rental umbrella of operations it’s all
38:10 – pretty much single family detached so at
38:13 – different points we would do town homes
38:15 – but for the most part it’s it’s detached
38:17 – products so single family single lot has
38:20 – been the primary and the reason why yeah
38:23 – please yeah I mean the reason for that
38:25 – is you know housing is always a need you
38:28 – know it’s a necessity for people it’s
38:30 – not like an office where you have to go
38:32 – to the office to work as we’ve learned
38:33 – you know working from home you know can
38:35 – work as well but people need a place to
38:37 – live and you know as a renter class is
38:40 – kind of growing and growing you know
38:42 – grow you know family will grow out of an
38:44 – apartment you know apartment supply how
38:47 – many apartments over three bedrooms
38:49 – exists and it’s very minimal so you know
38:52 – when you have a family when you have a
38:53 – dog or an animal you know you want that
38:55 – backyard the fence of the yard for the
38:57 – kids and dogs to play you want to get in
38:59 – a good school zone
39:01 – school areas. So then your family stays.
39:04 – And that’s what’s created a resilient
39:05 – asset class is it’s a stickier tenant.
39:07 – They want to stay longer. They want to
39:09 – keep the kids in the schools. And that’s
39:10 – why it’s been resilient, why we’ve
39:12 – specifically gone after the single
39:14 – family, detached versus you doing duplex
39:16 – and triplexes and kind of the
39:18 – multifamily aspect, right? Because
39:21 – again, things have shifted here because
39:23 – I remember when I first started
39:24 – investing. Um, one of the lessons I
39:26 – remember way back when when looking at
39:28 – multif family, for example, was you you
39:30 – wanted as little or no bachelor units in
39:32 – your multif family as possible because
39:34 – that had the highest turnover.
39:37 – Fast forward to where we are today
39:38 – because of where we have rent
39:40 – control is Ontario landlords and
39:43 – probably BC landlords and Quebec City
39:44 – Quebec uh landlords, they want turnover
39:47 – in order so they can so then they can um
39:49 – because the rent’s deregulated between
39:51 – tenants,
39:52 – right? It’s like Twilight Zone.
39:57 – I know we’re in different countries, but
39:58 – it sounds like a foreign language
40:02 – because like I for example, I have a I
40:04 – have a tenant just gave me notice and I
40:06 – was like,
40:08 – “Yay!” versus like now I have vacancy,
40:12 – which is generally a bad thing for a
40:14 – business.
40:17 – And now I have to go spend thousands of
40:18 – dollars to get those ready for the next
40:20 – tenant versus we have clients uh buying
40:23 – in the states turnkey tenanted
40:26 – properties because you don’t have rent
40:28 – control. So you can get great rents in a
40:30 – turnkey rental
40:32 – property. Are we nuts up here? Uh it’s
40:36 – it’s definitely foreign concepts to me.
40:38 – You know, doing as much volume as I’ve
40:40 – done down here and just finding deals
40:41 – that make sense. It’s kind of seems
40:43 – tough to operate. It’s tough to make
40:45 – sense to do it.
40:50 – Okay, so I have some basic questions for
40:51 – you. Uh, if you had to pick three US
40:54 – markets that you believe are prime for
40:56 – single family investment in 2025, which
40:59 – ones would they be and why? You know, I
41:02 – think Atlanta has always been even since
41:04 – I started back in 2012, it’s always been
41:07 – a consistent market. It just delivers.
41:09 – It keeps growing and growing. You look
41:11 – at the geography, it’s getting denser.
41:13 – Um, I definitely would stick there. Um,
41:17 – Kansas City’s been a consistent market
41:19 – through a number of different strategies
41:21 – um that I’ve been executing on through
41:23 – the single family rental space. It’s
41:25 – always been delivering, you know,
41:27 – diverse um diverse businesses and
41:29 – economies, affordability, you know, wage
41:32 – growth is
41:34 – positive. There’s a real consistent
41:36 – market that I rely on. And then um
41:38 – Little Rock’s probably I think under the
41:40 – radar one that I think is growing. Um
41:44 – started investing there a few years ago
41:46 – and I think it’s it’s it’s going to be
41:48 – market that a lot of people are going to
41:49 – be looking at. I mean I’ve clients in
41:52 – all three markets.
41:55 – Uh now how do you decide what
41:57 – renovations to do on these properties?
42:01 – Yeah, I mean it it kind of goes to the
42:04 – investor preference, but you know, you
42:05 – want every house to be, you know, clean,
42:07 – safe, and functional to start with and
42:09 – then doing the appropriate upgrades to,
42:12 – you know, kitchen, bathroom, flooring to
42:14 – where we think the rent level should be
42:15 – in that market. You look at the comps
42:17 – and you see, okay, we want, you know,
42:19 – 2,000 in rent, do we need stainless? Do
42:22 – we need stone countertops? What are kind
42:24 – of the levels that we need to do to
42:25 – reach that rent? Right? So this is just
42:28 – like cold hard analysis that’s done with
42:30 – a lot of data behind it. Yeah. I mean I
42:34 – think you mentioned you know
42:35 – institutional versus retail investing
42:36 – and that’s the biggest part of it is you
42:38 – go hey here’s the strategy here’s the
42:41 – buy box. Here’s how we’re going to
42:42 – operate. Let’s go. We’re not going to do
42:44 – anything that’s outside of it versus
42:46 – retail investing where you find a deal
42:48 – and you can be creative with it. You
42:49 – could rent it out. You could flip it.
42:51 – You could try to do a subject two deal
42:52 – like I know you’re familiar with.
42:54 – Whereas in institutional investing is
42:56 – kind of like one lane. this is how we’re
42:57 – going through and executing.
43:00 – Well, that’s how you get it so that it’s
43:02 – a passive investment for the investor,
43:05 – right? It’s it’s it’s process and
43:07 – procedure that helps you know build
43:09 – repeatable actions so you can scale
43:12 – and again you come from you’re talking
43:14 – about scale because you’ve done like
43:16 – what 5,000
43:20 – houses at least TPC pulled up the number
43:23 – 5,000. I don’t know where that came
43:25 – from.
43:27 – So again, you can you you’ve you’ve seen
43:29 – this done on scale. So this is not
43:32 – you’re not making this up. You’re not
43:33 – reinventing the wheel. No, it’s it’s the
43:36 – same playbook. Um you know, it’s been
43:38 – repeated for over a decade, probably
43:40 – more than that. But you know, it’s seen
43:43 – it work, seen it scale, seen it
43:45 – executed, and seen the returns.
43:48 – Okay. So for someone who wants to make
43:50 – their first
43:52 – investment, what are the first steps
43:53 – they should take? Um, definitely
43:56 – research, you know, listening to a
43:58 – podcast like yours, educating yourself
44:00 – or, you know, contacting a company like
44:02 – Share and and learning more about
44:04 – markets, learning about the process,
44:05 – what to expect. Last thing you want to
44:07 – do is kind of buy a house and then
44:08 – figure it out. You want to have a plan
44:10 – of action going into it, how am I going
44:13 – to buy it, how am I going to handle this
44:15 – situation that may come up and work with
44:17 – a partner coach to kind of help get you
44:19 – through that.
44:21 – What I love about Share is like we have
44:22 – people like you now. you’ve done two
44:24 – billion transactions. We have our chief
44:25 – investment officer Dimmitri who’s you
44:28 – know 7 billions across his desk 20,000
44:31 – units uh versus for a retail investor
44:35 – like I literally know I I have personal
44:37 – friends with coaches and like their
44:38 – advice to Canadian investors is first
44:42 – you have to choose a market which is
44:43 – which is not easy to do like you
44:46 – mentioned you were in like two a couple
44:48 – two dozen markets which are probably all
44:50 – great so you have to research that first
44:52 – and then once you pick one call 10
44:55 – realtors
44:59 – about the share platform is it’s
45:01 – really it it’s really simple you know
45:04 – it’s it’s you know we’re going to talk
45:06 – to you about the process we’re going to
45:07 – talk to you about the benefits of
45:09 – investing in this and then we’re going
45:10 – to talk to you about the markets and
45:12 – then we’re going to start showing
45:13 – inventory you know and just be like hey
45:15 – this is this is how this house is going
45:16 – to look and we show you the underwriting
45:18 – and it’s not you’re back in the napkin
45:19 – on your writing it’s detailed database
45:22 – data driven thoughtful underwriting of
45:24 – why are we taking this vacancy? Where do
45:26 – we think rent’s going in in a year or
45:28 – two? Where do we think this is
45:29 – happening? Why are we taking reserves
45:31 – out? You know, and all that
45:32 – underwriting. Make sure they understand.
45:34 – So, it’s kind of apples to apples next
45:35 – time we look at a different house. And
45:37 – they know why we’re looking at it that
45:38 – way. We’re getting a house from a
45:40 – realtor and trying to figure out what’s
45:42 – the rent and then what do you think
45:43 – expenses are going to be? Hopefully,
45:45 – what’s my return?
45:47 – And Sher, I believe we’re at 23 markets
45:49 – right now. I think we just got 24th. we
45:51 – keep seem to add a market every month or
45:53 – so. And so again, what I love about shar
45:55 – is there’s no bias for where, right?
45:59 – Right. Versus you call a realtor, their
46:01 – bias will be what’s local to them,
46:03 – right? I mean, we got the scale to move
46:06 – into markets pretty efficiently and
46:09 – pretty quickly. And it’s and it it
46:11 – really what I like is even if you’re in
46:13 – the States, you know, I’m in Tampa, but
46:14 – you know, I like to buy a house in Tampa
46:16 – or a house in Atlanta and Austin. You
46:20 – can do that through share very simply
46:21 – and you don’t have to go see the
46:22 – property or go hire a manager, you know,
46:24 – you can still invest through them simply
46:26 – like that.
46:28 – And then also the vast majority of our
46:31 – deals are done off market. So we’re not
46:32 – even using realtors on the buy
46:36 – side. What what is
46:39 – um what is so again the scale of
46:42 – wholesalers is completely different than
46:43 – the states. How can you how can you
46:45 – paint a picture for the listener on what
46:47 – it is on how many wholesalers how many
46:49 – wholesale relationships you have? Um I
46:53 – mean it’s probably over a dozen if not
46:56 – more and you know if the business
46:58 – evolves too. I mean guys come in
47:00 – business, guys leave the business, guys
47:01 – scale the business where they’re
47:02 – absorbing other wholesalers as well. But
47:05 – again, it’s the technology that you
47:06 – they’re utilizing in their marketing um
47:09 – and their underwriting to get deals
47:11 – locked up and then getting it out to,
47:13 – you know, qualified buyers.
47:17 – So again, like our listener won’t have
47:20 – um context to how much volume these
47:22 – wholesalers do. How how many deals do
47:24 – you think these wholesalers do a year?
47:26 – The ones that you’re working with, the
47:28 – good ones, I think, are doing over a
47:30 – thousand. The good ones that large
47:32 – enough
47:35 – Okay. So, I’m friends with the largest
47:36 – wholesaler in Canada, and he’s nowhere
47:37 – near
47:39 – that. I don’t even think he’s over 100
47:41 – deals a year. I think he’s more like
47:42 – I’ll ask him later, but he’s under 100.
47:45 – I’ve had him on the show
47:48 – with a lot of even kind of regional ones
47:50 – and it’s, you know, they’re the data is
47:54 – getting really good to where they’re
47:55 – marketing to the correct people that are
47:57 – looking to transact and then they have
48:00 – the technology to utilize them to lock
48:02 – up the deal, see the deal, um, and then
48:05 – market it out to the correct buyers. So,
48:08 – I mean, that business has grown a lot
48:09 – and it, you know, it’s feed into the
48:11 – institutional world of acquisitions as
48:13 – well.
48:15 – So one thing that makes share special is
48:17 – that uh our clients are able to do uh
48:19 – they’re able to buy fixer uppers uh
48:22 – through share and share will coordinate
48:24 – the the fixing upping and then the
48:27 – client gets to benefit from the upside.
48:30 – I guess that was always the case for all
48:31 – your clients. But
48:33 – again, before I met Andrew, before I met
48:36 – Sher, anyone who would bring you that
48:38 – investment, they would always want
48:40 – equity,
48:41 – right? Oh, yeah. In my experience up
48:43 – here in Ontario and Canada, like pretty
48:45 – much across Canada, I I’m friends with
48:47 – the people who wrote the book on how to
48:49 – raise capital for joint venture projects
48:51 – and typical is 50%.
48:55 – Right. What do you have to say about
48:57 – that?
48:59 – Yeah, I’m not too familiar with that
49:00 – structure. I mean, I think there I’ve
49:02 – seen some where, you know, somebody
49:04 – finds a deal and then the guy putting
49:05 – the capital on to flip it, they’ll have
49:07 – a split of some sort, but um not very
49:10 – common in my world.
49:14 – And then shared doesn’t take any split.
49:17 – No. No. I mean, all our investors own
49:19 – their real estate outright.
49:22 – All right. So, so the way I tell my
49:24 – clients is it’s you’re operationally
49:26 – passive, but because you own the house,
49:29 – you have to get your own
49:30 – financing. So, woe is you. It’s all the
49:34 – heavy lifting of of pushing
49:38 – paper. You don’t even have to see the
49:44 – property. So, it is it’s April right
49:46 – now. This episode actually come out
49:47 – pretty quickly. Uh, what do you think
49:49 – the state of the market is today? Uh
49:51 – it’s these are interesting times that
49:52 – we’re in. I was kind of regretting this
49:55 – question. Uh depends on the hour down
49:59 – here right now. But um but no, it’s you
50:02 – know, I think it’s it’s why we invest in
50:04 – real estate. Um it’s resilient. You
50:06 – know, housing prices aren’t fluctuating
50:08 – like the stock market. Um you know,
50:11 – we’re investing in strong markets that
50:13 – are resilient. The single family rental
50:16 – class is strong resilient over time.
50:18 – It’s it’s one of the you know what when
50:20 – the economy is down rentorship is is up
50:23 – so your rental demand is there like we
50:26 – were speaking earlier housing is a
50:27 – necessity and we need to fill that for
50:29 – people so buying single family rentals
50:32 – is helping you know support you know
50:34 – people get into houses and again one
50:37 – thing I like about American investing is
50:38 – we can buy turnkey rentals including
50:40 – with the tenant there so the investor
50:43 – can actually invest the tenant as well
50:45 – are they in a res is their is their job
50:47 – in a resilient industry to like the ter
50:49 – to a trade war, right? If they’re not,
50:52 – just move
50:53 – on. We can’t do that here.
50:57 – Yeah, it’s that’s interesting to me and
51:00 – kind of seems kind of crazy.
51:03 – Yeah. And and for the listeners benefit,
51:06 – pretty much every American I talk to and
51:07 – tell them about Ontario, they’re just
51:08 – that’s nuts. It’s just a foreign
51:11 – concept. Oh, and then uh also uh like
51:13 – I’m good friends with many property
51:15 – managers. Pretty much all of them. So
51:17 – again, remember the example I gave you.
51:19 – It could be seven months or more of not
51:22 – getting rent as a landlord, but there
51:25 – could be a property manager and pretty
51:27 – much all of them here in Canada still
51:29 – take their fee, their monthly fee, even
51:31 – though there’s no rent coming in. Is
51:33 – that is that is that do you have similar
51:34 – experiences like that working in the
51:36 – States? No, typically you’re not
51:38 – collecting a management fee of any sort
51:41 – until the the property’s occupied and
51:42 – there’s a paying tenant in there to
51:45 – collect the fee from.
51:48 – Uh, and then renovations. So, how are
51:50 – renovations done? Who like how do you
51:53 – how do you coordinate that? Do you get
51:54 – the like three quotes? Like how how are
51:56 – renovations executed on on rental
51:58 – properties that need that need some
51:59 – work? Yeah. I mean, so we’re utilizing
52:01 – just like the property management
52:03 – companies. We’re using, you know, large
52:04 – scale contractors that have that buying
52:07 – power like we were speaking earlier, um,
52:09 – to get cost down, that are doing the
52:11 – rehabs, that are doing, you know,
52:12 – probably hundreds of projects across the
52:14 – country.
52:17 – Again, it’s so different here. I can’t
52:20 – think of any property manager that has
52:21 – that in-house here on scale. So, the
52:25 – other thing I noticed as well is that
52:26 – it’s um some things in the states are
52:28 – more expensive than up here. Like when
52:30 – I’m in the grocery store in the States,
52:31 – I was in upstate New York uh just in
52:33 – January. I was I was in Hawaii just
52:35 – recently, which is probably not a good
52:37 – example. Well, your groceries and your
52:39 – food’s more expensive than ours. But one
52:41 – thing that’s way less expensive is your
52:43 – materials and labor. for
52:47 – renovations. Can you comment on that?
52:50 – Are you Is that just a thing about the
52:52 – states?
52:54 – Yeah, I’m not sure specifics though on
52:56 – why those may be lower. Um might be the
52:59 – the workforce we have up there.
53:03 – I
53:05 – I I’ve shared the story before. So, I
53:08 – was I was having dinner in downtown
53:09 – Toronto and we just happened to be
53:11 – sitting next to two employees of one of
53:13 – the largest builders in our city.
53:16 – Tridell and you know um so I showed them
53:20 – my house in San
53:22 – Antonio 2200 ft² I paid 265 for it so
53:26 – it’s like $120 per square per per square
53:28 – foot including the land now they work
53:31 – for Tridell and so they said to me you
53:34 – know we sell apartment building
53:38 – condominiums for like $13400 a square
53:41 – foot
53:42 – Canadian that’s just to give an idea of
53:45 – how much more expensive it is just to
53:46 – build here. Yeah, I know. I’m all
53:49 – learning that.
53:52 – I don’t even know. Yeah, maybe you pay
53:54 – that in California and New York City,
53:55 – but that’s probably it.
53:58 – Maybe. Maybe. Do you do do you know how
54:01 – to um actually this is a good question
54:04 – again. And so this was new to me when
54:05 – when uh when looking at deals in the
54:08 – states and how due diligence is done.
54:10 – Like your property managers are actually
54:12 – know your property managers who do
54:14 – renovation work, they actually know what
54:15 – the run rate is as in like if it’s a
54:19 – $20,000 renovation budget, they know
54:21 – exactly how long that will take. Can you
54:22 – talk to that? Because again, that’s
54:24 – that’s not a thing here in Canada. I
54:27 – mean, that’s something that’s come out
54:29 – of, you know, the funds bonding
54:31 – thousands and thousands of houses and
54:32 – doing thousands and thousands of rehabs
54:34 – is is understanding your your
54:36 – measurables. How are you tracking things
54:37 – to know if you’re working efficiently or
54:39 – not? And and a good run rate is probably
54:41 – $1,000 a day. So, if it’s a $15,000
54:45 – rehab, should take, you know, a little
54:46 – more than two weeks to get that done.
54:48 – And that’s just kind of an industry
54:50 – standard of realizing where you should
54:51 – be. Some may be better, some may be
54:53 – higher. Um, but it’s one of those
54:55 – metrics, you know, to see if you’re
54:56 – running efficiently is is one of those
54:58 – things that’s kind of transacted out of
55:00 – that institutional world of of building
55:02 – portfolios of tens of thousands of
55:04 – homes. Now, you mentioned efficiency up
55:08 – here for again my experience and also
55:11 – it’s a common thing in in our circles is
55:14 – uh it’s never on time, never on budget.
55:16 – It’s always more time or is more budget.
55:19 – How what’s your experience like? Um, I
55:22 – mean, I can’t speak for every contractor
55:24 – out there, but, you know, we try to use
55:25 – the best that are in line and following
55:28 – time, following deadlines, and working
55:31 – with groups that, you know, follow those
55:33 – as well. How do you hold them
55:35 – accountable? Because here, it’s like
55:37 – here we we don’t have many to choose
55:39 – from. How do you hold your contractors
55:42 – accountable? A lot of times you’ve got a
55:44 – project manager that’s running that
55:45 – crew. Um, and they’re the ones working
55:47 – on it because they know if this crew is
55:49 – not working or this deal is not working
55:51 – and we’re going to be buying more
55:52 – houses, well, they need to get things
55:54 – done to to kind of cater to us to make
55:56 – sure we’re going to use them again. So,
55:58 – it’s kind of that optionality of, okay,
55:59 – well, we’re not getting things done
56:01 – efficiently here. We’re going to move to
56:03 – somebody else that will get it done. So,
56:04 – it’s it’s kind of caring that, you know,
56:06 – we’ve got the business that we’re
56:07 – delivering here and you want a piece of
56:09 – it. We need to work. We need to work
56:10 – better.
56:13 – So, it sounds like there’s completely
56:15 – different uh strength and relationship.
56:18 – Uh like here we need our contractors
56:20 – more than they need us
56:23 – generally because they’re in there
56:25 – there’s so few of them. Uh it sounds
56:29 – like you as the investor operating
56:32 – company have much more leverage in that
56:34 – relationship.
56:36 – Well, when you’re when you’re building a
56:37 – large scale portfolio, you know, you’re
56:40 – you need contractors obviously, but you
56:42 – also need people that work well to keep
56:44 – things scaling correctly. And I think
56:46 – they see if they want to be a part of
56:47 – that growth with you that they make
56:49 – things work and and start working
56:50 – efficiently. If people aren’t, they’re
56:52 – getting people in that will
56:54 – uh because correct me if I’m wrong,
56:56 – there’s monetary penalty as well because
56:59 – if there’s no rent coming in and the
57:01 – property manager is doing the
57:02 – renovation, then they can’t collect
57:04 – their monthly fee until it’s ready and
57:06 – rented out, right? That would be a
57:08 – detriment for them.
57:11 – I remember when I was in Atlanta, when I
57:12 – was telling him about how we still have
57:14 – to pay property management fees even
57:15 – though the place is vacant, he looked at
57:17 – me like I was crazy. He said to me, “If
57:20 – you still have to pay fees when the
57:21 – place is vacant, what’s the motivation
57:22 – to rent it
57:26 – out?” So, I I think it’s a good question
57:28 – for the listener to ask themselves as
57:30 – well. What is the motivation for for the
57:31 – listener to for the for the for the
57:33 – property manager to fill the place?
57:34 – Because it actually is an issue. Uh I
57:36 – actually know quite a few people who’ve
57:38 – basically had negligent property
57:39 – managers because they were still
57:41 – collecting their fee. They would just
57:43 – sit on their hands and not rent the
57:44 – place out.
57:46 – That’s crazy.
57:48 – Yeah, because again like you’re able to
57:50 – monitor
57:51 – metrics. How would you be able to
57:54 – identify this as a problem uh in your
57:56 – portfolio?
58:00 – Sorry to say that again. How uh are you
58:04 – able to monitor that in your portfolio
58:05 – if a vacancies going longer than
58:07 – expected? Oh yeah. Yeah, absolutely. I
58:10 – mean, you’re typically looking at, you
58:11 – know, once once the property is ready,
58:14 – 30 days, where are we at? you know,
58:16 – what’s the lead volume, what kind of
58:18 – action we’re getting, how many visits
58:19 – have we had, how many tours have we had,
58:21 – how many applications are coming in, and
58:23 – then you’re looking at that anything
58:24 – past 30 days is starting to get more and
58:26 – more attention. So, any sort of age
58:28 – inventory that’s sitting out there is
58:30 – getting more and more attention and
58:31 – scrutinized and seeing why, you know,
58:33 – what is it? Is it the is it the
58:34 – marketing of the property? Is there
58:36 – something with the home that maybe needs
58:38 – to be adjusted and or potentially
58:41 – pricing? But, you know, more than likely
58:43 – it’s one of the other two that we need
58:44 – need to address.
58:45 – Again, just just a different level of
58:48 – automation than I’m used to.
58:49 – Invisibility
58:52 – tens of thousands of homes in a
58:54 – portfolio figure how to do it.
58:57 – Ben, we’re running out of time. Thank
58:58 – you so much for doing this. Any final
59:00 – thoughts you’d like to share with the
59:02 – listener, us poor Canadians?
59:05 – Um, yeah. I mean, I think it’s a great
59:07 – time to look into share if you haven’t
59:09 – and start exploring the uh the US single
59:10 – family rental market.
59:12 – How can people follow you or connect
59:14 – with you should they want to? Um, you
59:17 – can follow me at LinkedIn. Uh, my name
59:19 – Ben.
59:21 – Thanks so much for doing this, Ben.
59:23 – Thanks. Time. All right, friends. That
59:26 – wraps up another episode of the Truth
59:27 – About Real Estate Investing Show for
59:29 – Canadians. Hope you got as much out of
59:31 – this one as I did. Remember that whether
59:34 – you’re just starting out or a seasoned
59:35 – investor, there’s always something new
59:37 – to learn and it’s always about building
59:38 – that practical knowledge base that gets
59:39 – you closer to financial freedom. If you
59:42 – found value today, please do us a favor
59:43 – and leave us a review or a rating. Share
59:45 – this episode with a friend or better
59:47 – yet, join our community of real estate
59:48 – investors who are taking action and
59:50 – making moves. And hey, if there’s a
59:52 – topic you want us to cover or have uh
59:54 – there’s a certain guest you’d like us to
59:55 – have on the show, drop me a line. My DMs
59:57 – are open on social media. Reply to this
59:59 – email that this have arrived on. I’m not
60:02 – hard to find. Uh you know, we’re all
60:04 – about getting you the unfiltered truth
60:06 – to help you on your journey. Thanks
60:08 – again for tuning in and we’ll see you in
60:10 – the next episode. Until then, stay
60:12 – smart, stay curious, and keep building
60:13 – that future. Catch you later.

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