** Transcript Auto-Generated**

(00:00) a trump election win implications on investing in Canada and the US proud dad moment how a mechanic from Montreal 30 years 33 years old bought a burr buy renovate rent refinance repeat property in Memphis Tennessee from a home all list and more on this week’s truth about real estate investing show how are y’all this is Win CTO here your H podcast host and producer since 2016 there’s been over 300 past episodes of the show and you wouldn’t believe it my gu today’s guest has listened to every one of those episodes um anyways uh uh as always I
(00:36) won’t comment on politics because uh I believe politics talking about politics are like arguments there are no 100% winners because even if you win an argument or who you voted for wins you have likely damaged the relationship with a person you’re arguing with or those who voted for the other party while I do believe both Trump and Harris had positives in their policies both had absolute negatives and I feel really sorry for those who feel hurt by the by the election outcome uh where I do choose to focus my attention to energy
(01:07) is how I may help my community of Canadian Real Estate Investors uh including especially my clients and how uh and many have asked me my opinion onction on the election results and there of course implications on Canadians investing in the USA the overall investment landscape for for the Canadian everyday real estate invester has not changed the US economy is the Envy in of the world in its productivity and growth if anything that will accelerate under a business friendly environment versus the raising taxes policy that was heavily
(01:37) featured heavily in the Democrats uh election promises uh we yet share uh the easiest way to build a portfolio of fully managed us rental properties we focus on business and landl friendly States so those are generally red States some of them are actually under Democratic control and actually uh they’ve all pretty much all flipped uh there are yeah uh there’s a lot more of them that are now red States um so some were borderline now they’ve actually gone more red more Republican so our investments should actually
(02:10) perform better uh Trump has promised to bring back uh to America even more jobs in manufacturing by applying tariffs to Imports which will only see increased demand uh for our rental properties already that are already located near domestic manufacturing uh because they’re in business in landl Friendly states which is pretty much where all the manufacturing all the growth of manufacturing new investment exists for example share recently expanded to a GE geography to North Carolina specifically a deal in Greensborough North Carolina
(02:42) where Toyota is investing a historic $ 13.9 billion to create 5,000 manufacturing jobs this is the world’s largest automotive manufacturer the first ever Toyota battery plant in America for hybrids and eeve this is the first ever for Toyota so again this is one of the biggest if not the biggest investment in North Carolina state’s history now speaking to the real estate deal this is a seller leas back deal as in the seller will not well sorry the seller will be staying to rent the property so for the landlord there’s no
(03:14) upfront vacancy uh and the investor can defer some of the initial renov Renovations while locking in today’s price a when since the market is expected to go up as interest rates are expected to be cut further and possibly more accelerated under this new government regime uh the investment property is a single family detached house four bedroom 2 and a half bathroom it’s over 2300 square ft built in 2012 for $252,000 I haven’t done the math yet so I’m actually going to break open my calculator is I use calculators because
(03:47) I’m not that good at math so that’s $252,000 divided by 23 uh 2,349 ft that’s $17 per square foot for a house that comes with land yes that’s American dollars uh now there are expected Renovations of $38,000 this is a bur project the projected rent is 2,190 plus utilities estimated appreciation on this property now I don’t know why people say this but one of the objections I always hear about America is that there’s no appreciation well again this properties located in somewhere business friendly landlord friendly with historic amounts of
(04:29) investment going nearby to createit 5,000 new manufacturing jobs so the estimated appreciation for this property is 4% and if for those who know cap rates so those who are at least an intermediate level of real estate investor you know what a cap rate is the uh net operating income divided by the price of the property plus capex 5.
(04:52) 6% now find me something like this 5.6% with uh with all the benefits of being in a landlord friendly area so that so landlord friendly rules and regulations rank control where non-paying tenants can be evicted in 30 to 60 days find me that in Canada right and also we got appreciation and upside uh so I got the full details in in the show notes uh and if you’re interested in seeing the numbers on this deal just simply go to I win.
(05:20) Shar sfr.fr dcom in my 20-year experience of being a landlord I do believe it is in every Canadian’s best interest to be a real estate investor first of all because it’s uh I’ve never seen uh so many people who weren’t Rich become rich in in this asset class in any asset class other than real estate at the same rate of success and to diversify to the us as uh as because there’s cash flow and landl friendly benefits uh shared deals to me should be every Canadian’s Baseline to compare against their future Investments whoever to whoever owns this
(05:55) property in North Carolina is likely to be a winner and again um that only improves with a trump Victory again it’s not an endorsement of President Trump it’s this is just what this again I’m just talking about implications to Real Estate Investors uh unfortunately a trump government is not good for the Canadian economy uh I know somebody disagree with that if you want to disagree like go ahead go argue with the uh the way that that our Canadian dollar is going right now uh but fortunately for us our dollar is fairing better than
(06:26) than the Euro so um we’re doing better than Mexico China uh basically rest basically better we’re doing better than the rest of the world since we’re already major trading partners and we’re so intertwined with the Americans uh for the Canadian real estate investor um yes the decline in the Canadian dollar hurts but again we’re investing in red Republican states our mortgages and rents and expenses uh our cash flow are on all US dollars so again earning US dollar cash flow beats not earning cash flow which is common
(06:59) for Canan investors Canan local Canadian real local Canadians investing in local real estate uh or significant negative cash flow and uh still a US investment property is better than a Canadian investment property please don’t take my word for it do your own research I’ve actually included a nice summary of mine research using the latest version of chat gbt 4.
(07:26) 0 whatever that letter is anyways I have a screen capture of it in my um in my show notes and I posted it on my Facebook I simply asked chat jbt assume you are a real estate professional um does any town or city in Canada rank ahead of the top 100 American towns or cities factor in mortgage financing how Canadians have to have to personally qualify versus Americans they use debt service coverage ratio mortgages include economic fundamentals and landlord friendliness because AI can be a bit a little bit verbose I asked it to answer in 10 words or less
(08:00) chat gbt’s response no Canadian city surpasses the top 100 US cities in these factors can we can we can we stop the debate now I asked Google’s Gemini uh as well for those who know and follow uh Google was a was a major donor of the Democrats anyways so I asked the exact same question of Google’s chat gbt sorry Google’s Gemini hopefully Google didn’t hear that get mad at me anyways uh so Google Gemini’s response no Canadian C cities generally lag behind top US cities and investment potential so again can we end the debate
(08:42) which is a better investment USA versus Canadian real estate now if you’re interested in learning more about us investing and where to get started I’m offering a free training hybrid format for the first time ever as in we’ll have folks here in person in my office we only have room for about 40 people 20 40 people in person and we’re in Oakville and also will be online uh via Zoom webinar the evening of Thursday November 28th doors at 7:30 uh and for refreshments and networking and my presentation will begin at 800m sharp
(09:13) this will last for probably just over an hour um I’ll probably present for about 1550 minutes and then take questions for 10 20 minutes uh networking will likely continue on in person afterwards as always I believe in giving value and investment education uh because the world needs more of it um and I believe investment education should be as accessible as possible hence this event is free and accessible in person or online so if you can’t be here in person obviously in person is better uh because you’ll be able to speak to me in person
(09:42) live uh and again but if you’re not close by or your schedule doesn’t permit we’re available online so if you have internet you can join uh every 10d will have factual tangible actionable information and takeaways like every episode of the show uh but obviously obviously we’re going to get a lot more more specific there’s nothing that I enjoy better than helping out the underdog become rich helping rich people get richer is great I love my rich clients they do a lot more volume and they’re easy to work with but helping
(10:14) young lower or middle class hardworking people who aren’t yet Rich become rich that’s honestly what gets me out of bed along with sticking to the government here in Canada uh because they’ve honestly they’ve honestly been pretty rude to us uh they’ve been let it pretty known they’ve let it be pretty well known they don’t want us here and how better way than to send a message that we landlords won’t take it anymore than to exit here in Canada and pay less tax to our Municipal provincial and federal governments who’ve made it again they’ve
(10:43) made it all known they don’t want us here at least in my experience in the markets that I operate in now uh just look at New Brunswick they just had a provincial election I generally don’t follow provincial politics uh outside of Ontario uh but they just sent their conservative government walking after six balance budgets out of eight they’re being replaced by liberal government who will be implementing rent control of 3% next year uh apologies to the new to all those who ran up to new Bruns recently for in Chase of cash flow uh we in
(11:15) Ontario haven’t had a balanced budget since 2018 and we’re projecting a a debt of in the world in Ontario again if you want to get ahead in life real estate investing is still the way to go and on November 28th I’ll be teaching Canadians how to leverage us real estate investing for Passive scalable and tax efficient income streams again this will be highly tactical uh it won’t be that funny I’m not it won’t be emotional we won’t talk about like how to 10x whatever in your life or setting goal setting we’re going
(11:53) to talk about hard facts this is not selling coaching mentorship courses joint ventures raising other people’s money or creating a second job for yourself and taking time away from your family nor is this getting rich quick and my experience this is about getting rich slowly with the highest probability of success as possible and passively as possible I’ve helped over 45 clients of mine already make a million more investing in real estate and can’t wait to help even more Canadians especially from canans all over the world
(12:23) previously all pretty much all my clients are from the GTA so I’m really excited to be able to help out more Canadians uh link to register is in the show notes so and I hope to see you there um now please allow me a proud parent moment as i’ like to share with you my 17 listeners uh who I consider my friends and again every time if each of you see me in public and say hello um it’s it’s an honor it is an honor to meet you all and it’s an honor that you’re listening to the show um Cherry I uh you probably all know uh we invest heavily into our
(12:55) kids both our time and money and time uh to to ensure that they’re happy well-rounded and prepared for the real world uh they work hard and my son’s uh standardized test came just came back and like his older sister he scored in the 99th percentile and so he’s going to be tested to see if he’s gft gifted like his older sister is uh now already the test results are extremely rare and to have two gifted children which is not confirmed yet but if we do this is something extremely rare um I know many people uh see how cherry and I
(13:30) raise our kids and and think it’s not normal uh but these results give me great joy and Vindication that our parenting is working uh but we’re not resting on our Laurels and we’re not letting our kids Le rest on their Laurels either we teach our kids every day that hard work Trump’s Talent when talent doesn’t work hard and we’ll continue to do so uh my fellow parents know uh and for those who don’t have kids yet this is my experience um but I don’t know what it is but kids the kids have brought me more joy than anything
(13:59) else in life and I like to keep that going uh which is why I don’t want my real estate to take more time time of my own away from from them from them because selfishly I enjoy being around them hence uh my efforts to pacify my real estate portfolio by selling off close to half of it half of our local local real estate uh portfolio here in Southwestern Ontario and trading it for um honestly better cash flow properties in the states uh where I can afford quality High quality institutional grade Property Management versus it’s way more
(14:33) challenging to cash flow here locally uh and the reality is uh way more Canan investors are their own property managers and they even do their own bookkeeping which is something I don’t want to do in the states uh a long long time client of mine just shared with me last week that she has called the cops on her property manager in small town Canada the property manager is ghosting her and they have her rent money uh so my point is yes cap rates yields cash flow they are better and higher and small in in small town Canada uh but to
(15:06) find Quality Property Management And Trades is way harder than major centers so if things go sideways and the property is far from you I I I I feel bad for these investors but enough about me on to this week’s show this week we have an everyday blue collor Canadian real estate investor He’s 33 years old his name is Shane he’s from Montreal Quebec Canada and he just bought his first investment property and he’s executed beautifully on a burr in Suburban Memphis Tennessee without leaving home the arv the after repair
(15:40) value is substantially higher than projected and the rent came in almost 10% higher than projected as well so his numbers are phenomenal he’s actually he’s actually uh for those who know cap rates he’s a 7.9 on a single family home single family detached home uh Shane is the youngest client of mine by far for for the past years I don’t know how long I have to go back to find a client of this age and I cannot wait to have even younger clients um so I’m personally excited to be part of Shane’s journey to become a successful investor and for him
(16:12) to become a successful investor and to Mentor him in scaling up not just so that he has a large portfolio but to have Financial Peace of Mind this is his story uh again uh Shane’s listened to all 350 episodes or so of the show and if you do enjoy the show like Shane did and would like to you know see more your friends fellow Canadians who who want to invest in real estate be successful like Shane especially those who can’t afford to get into the Canadian Market or want diversification please share this show
(16:41) with them and uh please enjoy the [Music] show hi Shan what’s keeping you busy these days uh the usual you know um usual day today now I’m getting prepared for the winter so Riz the house and stuff like that but just your average Joe stuff you know yeah so for the for context for listener you are an average everyday investor is that fair yeah that’s correct on the younger side especially for canadi you’re on the definitely on the younger site um so Shane I didn’t know until until we got on this call so you’ve apparently
(17:24) you’ve listened to every episode of this podcast yes I I know that might sound crazy but like yeah so this so how it went down is I uh got introduced I was looking doing some research right and how I can invest um in Canada how I can build up wealth and stuff like that and then I looked into towards the real estate aspect right so I’m like thinking okay what are the tax implications right so I stumbled on your wife’s uh YouTube channel and then you came along on whenever ch one of their episodes right so oh this is interesting guy you know
(18:03) and then after I I found out he had a podcast I I started to be really interested in podcast so on my daily drives I would listen to your podcast but like your pocket was so Advanced that I couldn’t start it in the middle right I so in my head I was like let me start at the beginning maybe there there’s some gems I could catch up on and then yeah that’s how I stumble on some other of your co-workers or F so that’s well over 300 hours of content yeah yeah you got a lot of time but to you know when you’re driving back
(18:40) and forth from work and it’s like 30 40 minutes so that’s almost a podcast right there you know uh so Shane um as I mentioned again for the context with listener you are uh my first Canadian uh client to invest with share uh and purchase of property in the states and just to shake things up as well I’ve had I’ve had requests from listeners to have an everyday person on the show because we do you know you’ve listened to the show we’ve had some like serious Heavy Hitters on the show oh yeah folks doing like hot building
(19:09) high-rise buildings or you know uh folks with like a hundred Airbnb Properties or 50 Airbnb properties right this massive scale um but but you are young can you share how old you how old you are yeah so I’m 33 right now actually yeah 33 uh start starting to feel the AES Cains but uh you know but that’s I guess that’s T somewhat with my job and uh this life in general I guess wait till you’re my age so uh what what sparked your interest in in real estate investing yeah so um look I was listening to a lot of people’s like
(19:50) podcasts or like audio books or whatever and a lot of them started like um well the first they make the first Millions through real estate right so that’s where really spark my interest and then okay I was like okay let me look at the Canadian Market try to understand try to make see if the numbers make sense right and as as it was going on I’m like wow uh it’s really difficult to make you know either Break Even or make just a little bit of profit cash flow you know then so I had to find different ways a different way to make that drun happen
(20:30) and then uh what what made you decide on buying in the US and that’s and that’s your first investment property right the your yeah so states exactly so this is my first purchase my my personal purchase but um my mother right um I technically I I lived in the states briefly when I was a young kid so um Florida Florida was the main State I lived in um my mom uh purchased a property there in like 2008 2009 at the crash so she got a really good deal in Florida right and so I understand a bit of the market and understand that it’s
(21:11) cheaper cheaper entry level right so when I stumbl on your podcast with Andrew Kim and them I was like oh yeah this is great so I already know the prices compared to Canada it’s cheaper it’s just that like how can I do it pH like not can’t do it physically but how try to get in there and have someone manage it and uh look after it for me so so definitely it shook my Intrigue it was intriguing for me how much research did you do besides listening to over 300 hours of my podcast um it’s hard to say I do I do like randomly maybe I’m just like if I
(21:52) have some extra time is Rite on Google try to make the numbers work um you know um it’s hard to say but I would say quite a bit um right but like like I said uh share made it made more simple for me to uh to uh proceed what did the deals look like locally so local to you is Montreal K back yeah so Montreal yeah so depends um in Montreal there it’s it’s coming up in prices so like for example if you’re looking for uh let’s say a duplex and stuff like that we’re talking about now currently now we’re talking about $800 to maybe a
(22:33) million dollars now uh for a duplex um that’s a lot that’s that’s more than yeah now now yeah now it’s caught up like crazy before you used to be more affordable maybe I I would say back in 2011 you could get like a duplex triplex in the 500s and you can make it work right but um yeah everything skyrocketed with the you know the co and all that the interest rate being low a lot of people um felt like they had more purchasing power so definitely uh shot up the prices right how much would a do do you know how much a duplex would rent
(23:14) for that that sells for oh great question yeah so I would say a duplex currently now you could probably get uh maybe 1,800 to maybe 2200 deping on the side yeah depending on the size yeah that’s not very good yeah it depends it really depend also the location probably would also be a factor right so yeah it’s it’s kind of tough and as you know yourself at the increases annually it’s not that great as well so oh what’s your um you’re limited in your increases yeah definitely so uh increase I believe it’s like 3% 5% or something
(23:59) like that 5% so it’s not that great is it really oh I had no idea honestly our conservative government proudly announces that the that at 2.5 rent rent increase allowed in Ontario is the lowest across Ontario Oh my God so I’m just Google R oh Google rent Quebec rent increase oh gee you can read French right yeah yeah yeah speak friends yeah hang on I’m trying to find it no problem 4% 4% is the suggestion from tribunal administer lalal yeah 4% that’s that beats the pants off a two and a half yeah now you bought in Memphis Tennessee
(24:56) so what’s what’s the What’s the allowable renting increase in Tennessee uh up up to your discre basically you you’re not really not really capped right wherever makes sense right so that’s that’s amazing so it makes sense how he chose Tennessee so why why did you choose Memphis Tennessee the location of your first investment property um we did just a bunch of research and stuff of that and uh as you know share has different categories of of like properties right so for my first one I want to just try out and get more
(25:32) cash flow so that’s like a SE type property so what we did is we just did a global search and we found an off Market deal that matched Aline with M my cres and uh it happened to be Memphis Tennessee uh which is pretty cool because I’m a basketball fan I’m a fan of Memphis uh Grizzlies so I’m like why not man that that’s a perfect place why not let’s start there uh so your your your property is on the company website oh fantastic I think you know that right oh it’s hard to including the address do you mind to share it yeah sure no
(26:14) problem I’m literally so for folks who are watching on on YouTube I’m literally showing it on the screen now now what was the pro what was the process like so uh how are you inform how you informed that this property was available for for purchase by you yeah so basically I was going back and forth with tmri um he he was like looking through my crer and whatnot and this uh this property actually was uh off market so uh so off Market at I believe the price was 90k which is fantastic you know fantastic deal so I’m like okay yeah let’s let’s
(26:54) do that and uh all in all with titles and fees and all that stuff it came up to 105 said and done and then uh we decided to do some renovations to Spruce it up a little bit and then put it back on the market yeah so like you’re handy U because you are a mechanic by trade so are you flying down there to do the renovations no no no sir no yeah they all took care for me everything was in a detail list um some stuff that we didn’t have to do right away so that’s why the renovation costs were lower than expect but um yeah everything turned out pretty
(27:36) well it didn’t take that too long it took maybe within a month or two everything was ready to go what was the scope of the renovation yeah so Bas yeah basically um like painting cabinets uh fixing like mailboxes um dry F cracks filling the cracks minor stuff like cosme stuff like that okay and then what was the budget for that yeah originally the budget was we were spending about 12K 15K but in the end we we only spend about $9,000 which is fantastic I think you can do that over here in can for that yeah because on the productive Financial it
(28:18) was actually 25 is there is there more Renovations planned after the tenant moves out for example or probably yeah probably in theut or was it just conservative estimate well maybe in future we’ll do some stuff to uh to to update it uplift it even more but yeah I’m pretty sure that those numbers were conservative um just in case any major um you find anything major you know once you open a wall or once you do something you never know right so you need 105,000 to close because you yeah that’s not including a That’s not including a
(28:55) mortgage uh 9,000 for your renovation and then the projected rent was originally 1,00 I believe yeah so the so that was the projected rent but uh we have fantastic uh management so we actually got additional $100 on the rent which is fantastic right so I was happy about that happy to hear that so all in the house was 105,000 including closing costs plus another of $9,000 for renovation so gee my my math is really bad 114,000 yeah yeah 114,000 yeah 114,000 uh is includes your closing costs and your capital expenditure with
(29:36) your renovation and your rent is 1,200 a month correct right so how you feeling I’m pretty ecstatic man really happy feel blessed man your cash flow is very significant then especially for for 114,000 investment yeah I surprised I was not expecting that but hey I’m not going to complain and and now what’s the plan now post renovation you have the tenant what’s the plan now yeah so um we’re looking to refinance right uh well some of the equity in the house and then move on to another potential property um hopefully maybe in the b b type class to
(30:25) just diversify a little bit um in a different state most likely yeah oh okay do do you have your eyes set on any particular Market uh not in particular we’re we’re looking at different places like Alabama Kansas um North Carolina Georgia maybe so I’m open to whatever makes sense basically and that’s what I found as my initial challenge with the States was uh you know me right I I like economics and you know job growth and all those things that drive real estate prices uh in migration immigration all sort things and there’s just so many
(31:05) markets that fit a buy criteria like a yes to buying in that area definely and and yeah so actually before we’re recording we’re discussing I was showing you what that query I did on Chach chbt I’ll just show it quickly on on here as well so yeah you’ve done a fair amount of research as well so for the listeners benefit I’ll read out the query I asked chat gbt which provinces or territory in Canada would you rank ahead of the top 10 US states for long-term residential real estate investing question question mark factor
(31:39) in how income properties in Canada must be personally qualified for versus in the US it’s that service coverage ratio mortgages and then there’s a respon there long response again that’s on my screen but if we go down to skip it right to the conclusion in short while Ontario BC and Alberta offer unique benefits they don’t hold up as effect itively against the top US states when facturing and debt service coverage ratio financing and other Pro investor advantages so like I was joking around before like that’s let mic drop yeah the
(32:11) debate’s over were the best place to Canada versus us for long-term residential real estate investing yeah so so you you’re you’ve now had a taste for it you ever going to buy a local investment property again ever most likely not most thing Chang it but I highly doubt it yeah have you told your friends and family about what you’re doing in the states what do they think yes I spoke to my aunt my aunt is more into this kind of stuff and she she lived in the states uh for 10 years in La so she’s familiar with the what goes on over there so I
(32:48) spoke to my aunt and a few of my friends as well I’m trying to get them on trying to bring them with me which I think is Noble because I I made the joke before like friends don’t let friends invest in substandard Investments correct yeah definitely actually do you know how how long say say a tenant in Montreal doesn’t pay you how long until you can resolve that issue yeah so I think it’s similar to Ontario I was reading into the forums and the Facebook groups I think some of them are like up to a year or bit more than a year to get
(33:24) a resolve from the government or the the agencies that are place for that so that’s crazy imagine someone not paying you for a year or more that has to hurt well just think about yourself could you survive no uh yeah definitely wouldn’t be able to survive I definitely have to get like two three jobs just to support that probably yeah when when people get into investment that’s a side hustle for it to be passive and then you’re saying you have to get several their jobs in order to support their tenant not paying your
(34:00) rent that sounds an awful alternative yeah definitely something you don’t want you worse enemies for sure uh and then how did you set up so you’re Canadian right you have right right so how did you how did you how were you able to own a US property Yeah so basically with the the share team we set up um my LC LLC and also we set up a lip so um that was pretty pretty much hands off I talked with Sher and they sent me over the documents and I just filled it out and Bam I had my business uh LC and LP ready to go and uh to purchase uh properties
(34:47) in the states pretty simless what kind of financing options are you seeing to refinance your Memphis property yeah so uh currently right now it’s kind of um we’re looking at just like 7 7% or maybe High sixes to refinance um some are able to you could buy down with a certain amount of money that’s that’s one of your options um yeah so that’s pretty much what we’re seeing right now maybe it will change I know that uh us is breaking down the rates as well so hopefully later on it comes down but that’s what we’re seeing currently yeah
(35:25) because we’re in the middle of a rate cutting cycle in the states as well just like Canada right so are you just are you just going to be patient and wait it out or just G to bite the and take one of these rates oh yeah definitely uh definitely we’re GNA see because right um the right it’s the right opportunity come it’s better to be in than to wait and for the right opportunity and then you know it’s better to be in like like you said Real Estate is like a long-term game right so once you better to get in early wait you you have
(35:59) another chance to refinance to go down to another lower rate so as long as the deal makes sense now what was was there a piece of advice or moment from the podcast that you found especially valuable that you know like was a catalyst for you to start investing a good question um I this a majority of your like your your guest speakers or whatever just say um basically just just take a chance you know basically take a chance and and see where it’s going to lead you because like you don’t won’t be like 20 years later and figure out oh man that the
(36:41) property I looked at you know 20 years ago look how much had it has grown and I had the opportunity to jump in and you know have a regret you know sometimes the biggest reward it’s the biggest chances you take in life right so that’s that’s what that’s why I gain a lot from your guest speakers and and I said why not I’m young let me try it if it works it works if it doesn’t I still have time to Pivot right I remember 10 years ago I was at a real estate networking dinner and I was sitting between two gentlemen that were
(37:15) one was probably high in his upper 60s one was in his 70s and they’re like they’re they’re chatting we’re on a conversation together and he there one was saying I wish I started 5 years earlier the other guy said I wish I started 10 years earlier and then they both look at each other and they look at me I wish I started when I was your age and they pointed at me for sure I would been close to your age at that time so I don’t know if you realize but there’s a whole bunch of Real Estate Investors who would love to have been
(37:43) your age when they got started for sure I believe you had somewh younger than me too I me personally I wish I started at his age too so you know the cycle continues well that’s the thing it’s Jo you’re probably referring to jok stanza because I think he was 26 when we started working with him and and then I’ll even I even poke him as well and I said if you were getting into the market today how would you do it because it’s so much more expensive than it was five years ago even yes right so for for listeners looking to
(38:20) start their Journey especially Canan eyeing at us Investments what would you be your what would you be your biggest piece of advice to them good question um just do it man like like Nik says just do it just get into it um do all your research yeah see if it makes sense for you at first reach out to people uh like your your guest guest um guest speakers and uh ask some questions you know ask questions figure out see alliance with you and then go from there that’s that’s that’s what I’ll tell your your speakers what was it like for you to be
(39:04) you know living in Montreal and there’s a renovation going on at your property in Memphis how how how are you made aware of updates yeah so uh basically you it’s pretty s simple they send me emails progress photos um before and afters um it be constant in the loop So within a week or so every week or two weeks I get update where we at um if there’s any hiccups or anything like that MH and then uh destimated time now all the renovations be done so it was pretty relaxed I didn’t feel any stress pretty seamless yeah uh question have you run the
(39:48) numbers after you refinance the property what your cash flow would be good question actually I haven’t no I actually haven’t uh actually haven’t I’ll run it later and I’ll and I’ll actually I’ll ask Demitri for it and then I’ll present I’ll share I’ll share it in the show notes folks as long as you’re okay with that I’ll send it to you first how’s that that’s right k j the right guy to go to I’m not the I’m not the so that’s better yeah so for the listeners benefit Demitri is the chief investment officer of share uh like
(40:18) Shane how did you know again you’re in Montreal right uh Dimitri you’ve never met him in person how did you how did you feel comfortable with this purchase just just having like talks with him on the phone uh you know it’s very very easy to talk to like um he asked me my input what what am I looking for what’s my future what’s my plans in the future and stuff like that and like from that conversation I felt really comfortable and then uh we went you know week by week we talk on the phone and uh talk about strategies talk
(40:54) about different uh Avenues we could go and then over that time it Fel it felt he so I had 100% confidence in Demetri and what he’s going to provide for me fabulous and you could understand what he’s talking about because because when I first met Demitri like he thought you know I have some real estate experience right right but he’s used to working with like pension plans so folks with like massive like you know lots of letters behind their names they have NBAs they have cfas some of them probably CPAs as well like like he’s
(41:28) used to talking to folks who you know have millions upon millions of or even billions to place so but you felt comfortable talking to him yeah I Fel I felt comfortable talking to him but for sure if there was like some uh some terms I didn’t understand cat GPT was there to rescue me or or uh I have to do my own research and like try to retain the information you know fais when he sends me the your pro fer I’m going to stick it in the chat gbt as well there you go you know D it down to like a you know fiveyear
(42:01) old to be like that because I’m pretty sure most everyday Canadians would be would like your deal I would like your deal sure for sure oh have you had it praed yet you haven’t but like sh Shar can run the numbers they can take a good guess what your property is worth now do you actually know yeah I think uh on the website it said about it’s probably worth 136,000 maybe now with the renovations estimate okay 136,000 that’s an improvement of $22,000 that’s it’s funny because I was having a conversation with a friend I have lots
(42:44) of friends I don’t have a lot of friends I lie he was chirping me like saying you you like as much as you know what’s going on in the world I don’t see why you’re adding more Bitcoin to your portfolio and like yes I’d love to have more Bitcoin but I can’t get these equity uplifts in gold or Bitcoin like I can in real estate just like you did from the comfort of your home in Montreal you got an equity uplift of $22,000 yeah that’s fantastic did it and you’re definitely and like on the website your property is a seven cap but
(43:23) which is not which is understated because you got more rent and your renovation was smaller so again I can’t wait to see what the what the what the uh the updated financials look like but holy cow what a deal especially in her first property yeah pretty much struck gold right now it’s pretty awesome appreciate so we just had our us investing Workshop a weekend or two ago and literally I had a gentleman in my office he paid $900,000 for a two-bedroom condo uh it’s it’s facing the lake on it’s it’s GTA West and he originally and uh he
(44:02) originally priced it r at 2900 he couldn’t get it so it kept coming down for two-bedroom he got like 2400 2400 rent on a brand new condo that was Lake facing that he paid $900,000 for and he’s not a chump either he’s a realtor I believe he’s a realtor he’s not a chump so he’s negative on hard cost he’s negative 2,000 a month right so if he has a vacancy or repair it’s way worse than 2,000 a month right yeah definitely oh I wouldn’t want to be in those shoes man that that that would hurt me that oh man Depression was
(44:35) set on me on that point yeah like you have to put up like to put up money that much capital for a $900,000 condo and then have it take money from your pocket every month 2,000 bucks yeah the wife w’t be happy for sure that’s for sure brother you have a wife no no not yet not yet at least not yet not yet not yet so looking five 10 years out where do you see your portfolio in your financial goals and how does Real Estate fit into your overall Vision yeah definitely so uh my my my plan is to grow at least maybe try to
(45:13) get at least one or two a year um ideally probably set up to 10 and see how how how it goes from there um definitely the more the better mhm I won’t complain about that but definitely my goal is to uh to get a good amount to cover my expenses and uh have my primary job being my secondary job you know what I mean so that’s that’s the goal and and do you get a pension at your work yeah I get a pension I work for the federal so we have a government pension you got a decent one it’s pretty it’s pretty good I kind of come complain it’s uh the F
(45:52) benefit so it’s pretty good fantastic fantastic just because I had previous guess who’s RCMP and I don’t I don’t for federal pensions that’s I think it’s on the on the lower end of quality so really I’m no expert but it doesn’t for for people in the line of business who get shot at can’t believe aention yeah from that aspect okay yeah you’re right you’re right their life is on the line yeah I’m not in those shoes but yeah even if they don’t get shot at I if you if I compare it to like a teacher pension or like a federal
(46:26) employee like someone who works for federal government like like CR CMP I don’t think they they don’t get the same pension as like a someone I know with a desk job in Ottawa you know what I mean but uh yeah I’m no expert but it doesn’t seem fair oh they’re deserv more they’re definitely deserving it more for sure I would say that too you know and and then when you Vision your portfolio um what cities and states do you think you’re in yeah so hopefully a little bit everywhere so um like Kansas uh Alabama Georgia maybe Texas like like yourself
(47:05) we’ll see how that goes um yeah those maybe those main those areas and see uh there’s any opportunity elsewhere as well yeah so why do you choose the the geographic diversification because when if you were if you invested locally right would you do the same would you have like one in Montreal one in Toronto one in I don’t know ashaa one in bernabe British Columbia why why why do you envision why do you envision uh economic sorry Geographic diversity well just uh for protection right you don’t even know what what’s in
(47:44) store for in the future right so just having um properties in different states it’s kind of like a shelter just in case one is performing well one isn’t performing as well there’s Renovations here there’s a big issue here you just have overall a good comfort zone and then how would you execute this you’re going to fly down to each of these markets and you know meet wholesalers meet property managers Realtors you know oh that’s that’s why I got share man they they got my back you know so that they’re they very verse in multiple
(48:18) Estates so if anything Lins with my uh idea or my uh criteria just shoot me a an email and uh go from there you’re a young guy once you once and you’re handy too want to just fly down and uh be your own investor uh that’s that’s a lot of work that’s a lot of work uh a lot of times you know I don’t think I have that much time on my hands unfortunately but um yeah why why why why would I do that if I have share on my team they they got my back they proven to me for my first property that they’re capable doing what
(48:58) they say they’re they’re able to do and I have M confidence in them right and so when you’re when you’re talking to your friends and family like you’re you’re telling to telling them to go share or you’re telling them to go book a plane ticket and interview a bunch of Realtors and wholesalers and proper managers or no I’m definitely telling them if hey you want a peace of mind you want have your my IDs hey share is the way to go man share is the way to go you’ll sleep easy at night yeah like when you mentioned earlier
(49:33) like even in Montreal it can take you a year to to deal with the non-payment of rent issue with a tenant like that’s I think people lose a lot of sleep oh definitely lot of sleep and they could go crazy you know you never know what could happen especially if it’s like a property that has maybe sentimental value people people could uh you know change change on you you know not it’s not good it’s not good you should be able to receive you know and if you’re providing you should be able to receive right at the same time so it’s just one
(50:09) for any plans to go visit any of these properties uh not necessarily but maybe I’ll go see the city myself and maybe pass by and say just to see how how it looks but no not not no uh no plans in the future currently right now so awesome yeah I’d like I’ve never been to graceand which is just outside Memphis so I’d like to one day yeah definitely all right Shane thanks so much for doing this do do you have any final thoughts you want to share with the listener again you listened to over 300 episodes of the show what what are
(50:44) some parting thoughts um I’ll leave the mic to you oh my gosh no pressure on me okay so basically um from all the episodes I like listen to the main one is this just just try it do your research first obviously do your du diligence but um just take the leap leap of faith and see how it goes because um it could be turn into an opportunity that changes your life and changes your family life and the the generations to come so that’s that’s my that’s my advice I will add I don’t know how much faith is needed when research is easier
(51:23) than ever that’s that’s for sure you have chat TP chat TPT uh it’s pretty easy just put whatever you you’re thinking yeah it gives you the your results what are some prompts you think people could use in chat GPT if they wanted to do research into real estate investing okay yeah so like probably some some of the terms like major terms like cap raate stuff like that something that Average Joe wouldn’t know right so like how I do it it’s like I say okay chat GPT explain this to me like a 5-year-old or a 10year old you know and
(52:00) they use maybe the piggy bank explanation and stuff like that so so for a common person like me it’s simpler to to understand and retain the information so stuff like that like it makes makes your life much easier to understand yeah I plan on uh like project Prof foras projected financials aren’t that available actually they’re somewhat available actually no they’re not for for uh again because I I’m on I’m on a lot of emails as well so I get I get projected financials for a lot of properties and then you’ve seen the way
(52:33) Shar does them they’re they’re incredibly detailed and transparent so I actually plan on having get to having to finish off a project proper projector Financial Prof fora for for like local properties and just feeding it to chbt and like you tell me what’s better I think I think the everyday investor can do that as well like you want an unbiased As Good As It Gets unbiased uh opinion on what the best investment is AI chat GPT is it exactly yeah exactly that’s how I did also um with the my refinancing options as well so like add one or two options
(53:12) I’m like okay let put this in chat and it breaks it down the comparison what is what is Advantage for this option and what is Advantage for this option and the dises between the two so yeah it’s pretty simple you just have to put it in and read read the what it gives you and you could go based off on that so definitely easier that’s super cool do you find any of your friends and family and people your age are they using are they using chat gbt um I’ll would say more people my age are younger are using ja gbt the older
(53:47) people some of they’re not tech savvy unfortunately but um oh yeah I I definitely see people around my age are younger definitely definitely younger they all they’re all over there you know the technology so they they probably know more than me I was actually planning on doing a chat an interview with chat gbt on Canada versus USA for investing if you want unbiased you know because list just need to understand like I’ve covered this before in one of my other talks like the chbt has passed the bar exam in the states it it passed
(54:24) uh I think it was Wharton’s NBA School so Wharton is a top five top five easily top five business school within the US right it’s it’s uh and it keeps getting better it’s it’s just scary how good it is and and uh and this is why I warn uh folks who who are have businesses in in anything especially on well for my show I talk to I’ll mention it for like real estate agents and and mortgage agents and Brokers and whatnot especially they’re focused on investors like technology is coming for everyone’s job right not your job your
(55:04) hands on but oh yeah for at least for now who knows the robots they have some robots out there that you know nah not not yet okay you know everything I’ve seen like anything to do with like repairs and maintenance like that’s so far down the line for robots that’s just way too hard right like robots can do new because it’s all it’s the same thing over and over again right we already see that in automotive manufacturing right it’s already it’s already largely robots but uh for for any sort of like maintenance yeah well you tell me you’re
(55:38) in the shop not me right but just just say can you see a robot like replacing your toilet at home you’re right not at least not yet maybe in the future who knows but currently no I it’s just so far down the line like so yeah all right Shane thanks so much for doing this oh man it’s been honor this is awesome to be on your podcast man I’m a fan I’ve been listening you know as you know from the beginning and I’m I’m really humbled to be on this podcast be one of your guest speakers thank you thank you very much and Shane
(56:15) just throw it back to you it’s it’s it’s always been my honor to host this show and help people especially the everyday investor especially younger folk like you who don’t come from a pile of money or they don’t have a pile of money right like uh like I I I tell friends and family if you want to get rich you need to be in real estate right and for and from my experience I’ve never seen an easier asset class or strategy for people who don’t have money to get money right obviously they have like you I’m guessing you worked and save worked
(56:53) and saved and that’s how you were able to afford the investment is that fair yeah so yeah majority is worked and Sav but also like um I have received money also from family so um from the most part yeah my blood heart blood Harden s tears all that stuff um I I work two three Jaws that’s nothing new to me I slow down a little bit but that that’s that’s that’s my that’s my how I get down you know so so yeah so trying to offset that with the real estate and in my experience I don’t see a better way to do it Jan again thanks for so much for
(57:37) doing this thanks for thanks for being my first US Canadian client by us that’s awesome man thank you very much for having me we’ll talk soon [Music] home all right friends that wraps up another episode of the truth about real estate investing show for Canadians hope you got as much out of this one as I did remember that whether you’re just starting out or a seasoned investor there’s always something new to learn and it’s always about building that practical knowledge base that gets you closer to Financial Freedom if you found
(58:06) value today please do us a favor and leave us a review or a rating share this episode with a friend or better yet join our community of Real Estate Investors who are taking action and making moves and hey if there’s a topic you want us to cover or have uh there’s a certain guest you’d like us to have on the show dropped me a line my DMs are open on social media reply to this email that this have arrived on I’m not hard to find uh you know we’re all about getting you the unfiltered truth to help you on your journey thanks again for tuning in
(58:33) and we’ll see you at in the next episode until then stay Smart Stay curious and keep building that future catch you later

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** Transcript Auto-Generated**

(00:00) sorry to condo investors Ottawa rocks that’s where I’m a least fan farewell golf season all listen more on the truth about real estate investing for Canadians greetings investors my name is ran cedo landlord of 40 plus different properties through my career since 2005 realtor since 2010 and together with my team at I real estate we have helped investors transact on close to half a billion investment properties among my clients are 45 Millionaires and multi millionaires and accounting we help them achieve uh this through education and
(00:30) coaching and I get paid because we’re realtor anyways uh that was all hold in Ontario but until around last year uh the writing’s been in neon letters on the wall cash flow is no longer an option for the everyday investor governments of all level let it be known we are not welcome here in the opportunity for better cash flow diversification in the USA and avoiding the LTB or rtb if you’re BC was available along with scalable mortgages in the USA thanks to technology advancements it’s crazy how technolog is making life better anyways
(01:06) sadly we’re uh we’re slowing down many many what’s slowing down many many canans investing in the south is they’re holding pre and new construction condos some of them are houses as well but uh yeah they’re all pretty tough the options aren’t great for those who are holding those types of properties especially those who lost their jobs uh I had a new new condo investor share with me this just this past weekend he owns a beautiful 300t brand new condo with the lake view uh the property is into GTA and it’s south of south of Lake
(01:38) Shore and has beautiful views he paid $900,000 for it which sounds about right and it only rents for $2,400 it’s outside of downtown so apparently the rents aren’t as good after multiple attempts to redtive over higher prices his original asking price was over $2,800 I believe he said uh and and cut cut down to 2400 is what he’s getting now so after hard costs which means mortgage taxes insurance and condo fees of course he is negative $2,000 a month and that’s before you factor in any sort of vacancy leasing fees bad
(02:14) debt repairs and maintenance so in reality his negative cash flow is significantly much more now not all being real estates are bad I hope this just the show is the truth about real estate investing however it’s harder to find those markets and investors who can execute a quality investment deal if you listen to Andrew hines’s final podcast I recommend that you do I’m experiencing the same thing he is I’ve invited gers onto my show and it’s crickets uh not all of them but for many of them it’s crickets only to find out later there
(02:44) through the news or the graine that some of them are having financial troubles uh even though some of those gurus out there um I I have friends with them on social media uh anyways uh they’re still out there raising capital for their projects or they’re borrowing in hard money loans AKA private borrowing private lending they’re selling courses and coaching Etc they’re running meetups and and speed networking whatevers and they’re turning down exposure on my podcast this is the truth about real estate invest show so what you 17
(03:16) listeners uh faithful listeners thank you for all of you as well uh what you may not know is that before we do record I do ask guests if they’re okay to discuss losses uh both what’s in the news and not in the news I also uh do reference checks on guests of the show uh by contacting people unsolicited like they’re not providing me reference checks I actually don’t even ask for reference checks I’ve been around long enough to know who does business with who uh if nothing else I know people in the in pretty much every real estate
(03:44) market for investment I can just simply dial one of them up and they’ll take my call or return my call anyways uh so I simply contact people in the same markets as them or people I know have done business with them either as a lender borrower as a contractor what have you and uh anyone who’s engaged with business with them and ask them for a reference check as they are potential guest in my show uh most people know how protective I am of my reputation and of my 17 listeners there’s no reason to put you in front of harm that’s not what the
(04:13) show is about if you are out there reference checking folks uh like a coach or you want to invest with somebody whatever feel free to check them out check out if they’ve been on the show before now being on the show is not an endorsement by any means nor is it a condemnation that they haven’t been on the show uh we we are not perfect I am not perfect uh I’ve lost money too uh anyone who says they haven’t lost money is lying to you and there are those people out there who who coach and and raise money and say they’ve never lost
(04:41) money anyways uh I’ve actually added we’ve actually added show into show notes of some past guests of the show who are being sued or are bankrupt or going bankrupt or in the news so we’ put those links in the show notes uh and I digress so if you know good people that that you think should be on the show encourage them to come on the show or recommend reach out and recommend them yourself I’m always happy to interview good people who are good investors who know how to protect their client’s best interests if nothing else I really enjoy
(05:11) shining a light on the good people in this industry in order to nothing if nothing else we can cut out the bad operators speaking of good people who has nothing to sell you today it’s always fun to have a non-real estate professional in the on the show today’s guest is my good friend and past client Adam Johnson ready for it he’s got a lot of letters behind his name CPA CA you know those are the accounting designations this is one that’s not so common cbv for chartered business evaluator and CFA chartered financial
(05:42) analyst so uh Adam who at the time was my youngest client at the and we talk about that he didn’t have as many letters beond his name at that time and he’s not your average CPA uh so as mentioned he is a Charter Business valuator and Charter financial analyst making him one of less than 100 people people in Canada with all three designations he even ranked number one in the country on his Charter Business valuator exam uh but really sets him apart is his hands-on experience with one of Canada’s biggest investment Banks
(06:12) Banks Banks they say that right Banks where he analiz stocks and work directly with Equity Traders so these are people who make money dealing with stocks uh investor money big investor money which prepared him nicely for a long career uh in business valuations now Adam’s expanding his investing to the US after Ontario deals made no longer made sense uh and he’s the founder of synthesis valuations he’s he opened that business quite a while ago and he’ll detail that in the interview uh where he provides top tier evaluation reports for
(06:43) everything from mergers to shareholder disputes not we recorded this episode on September 17th so that was before the most recent pair of hurricanes Helen in Milton that devastated Florida the deadliest Helen was the deadliest for uh hurricane to make landfall in Katrina since 2005 uh each each uh the combined damage from the two hurricanes is hundred billion that’s $50 billion each for context uh for context that major storm that passed through Toronto in the summer had uh it caused 1 billion in damage so between
(07:20) these two hurricanes that’s a 100 times more damage my thoughts and well wishes are with Florida I’ve linked I obviously sourced all my resources so I’ve links in the show notes on the article to back up the $50 billion damages per uh per hurricane uh for your business valuation needs Adam’s website is synthesis valuations.
(07:44) com now what’s someone with so much stock in business valuation skill doing being so overweighted in real estate investing let’s ask Adam please enjoy the [Music] show hi Adam what’s keeping you busy these days well I think before I came out here I was working on a couple of different valuation files for a few companies that I’m valuing but also getting caught up on some news that I think actually is pertinent to uh many of your audience members who are Real Estate Investors or looking to be Real Estate Investors because we’re on a sort of interesting news day recording
(08:29) this September 17th where new inflation data just came in mhm and we also got the news about extending amortizations to 30 years for all firsttime home buyers in Canada and raising the insurable limit right yes for insured mortgages from one1 million to $1.5 million so there’s actually a couple of headlines I was digesting before I was on my way out here and then you know come from the context of someone who looks at the states like $1.
(08:58) 5 million and because I say to friends all the time who are who who you know like talking about real estate a lot of nice cities in the States you can buy Mansion for a million you can buy 4,000 foot house for a million or less than a million or less than a million yes but like it’s crazy everything’s crazy actually I just wanted to check what the bond prices were doing with the inflation rate yeah just tell tell talk about the inflation rate so you can fact check me on this spot but I believe inflation came in at 2% which is the lowest that’s been since
(09:31) early 2021 before inflation started to spike um a little bit softer than what I think most Bank economists were expecting or at least the average of Bank economists um and I think that will be welcome news for anyone hoping that interest rates set by the Bank of Canada will continue to Tren Trend downward excuse me yeah it’s interesting the bond rat’s actually up today Bond rates are up today oh I am surprised to hear that they must corrected the last few days the last few days they were down and then actually came up well I don’t
(10:05) know how much of that would be influenced as well by sort of Canadian Bond Traders having to figure out what the Federal Reserve is going to do because they have a big decision happening tomorrow as well um so that might have played into it as well and funny enough the Dollar’s flat today so it looks like the market kind of looks like they kind of knew this was coming interesting good well good job market now I having you on the show cuz you are a valuation expert that’s a very few words to describe your actual impressive history experience
(10:45) level tell tell us a bit about yourself sure so I run a Consulting advisory firm called synthesis valuations and quite simply I am in the business of valuing businesses um you can think about it in simple terms like that um as Real Estate Investors I think we’re all familiar with real estate appraisers and the work that they do you want to go buy a house or evaluate a property they give you an appraisal report they look at comparables um really valuing a business is sort of built on a lot of the same principles but the key difference is
(11:21) there’s a lot less uniformity among how businesses look right I mean um a pharmaceutical company with an early stage of drug is going to be valued differently than a manufacturing business and it’s going to be valued differently than you know a holding company with a that portfolio of Investments and so as business valuators we are trying to look at different data points and try to triangulate how much is something is worth um when we’re not in the context of a publicly traded stock and we don’t have a good indicator of
(12:00) you know what someone would be willing to pay for a business or a piece of business yeah because we Rec reconnected because um my wife asked uh to refer you to a client of ours and it was a a very small business with not a lot of Revenue so I can’t imagine it’s easy an easy job yeah I mean it’s not easy it’s interesting which is why I love doing it um but it’s certainly not easy but just some of the situations that you might see come across my desk right you’ve got transfers of businesses maybe that small business that you were talking about um
(12:40) being handed down from one generation to the Next Generation Um a tax accountant or a lawyer maybe Cherry wants to execute some sort of um tax plan to sort of be most tax efficient the Canada Revenue Agency is going to want to understand what the fair market value of the shares of that company was at that point in time let’s say you’re a partner in a business not publicly traded and one shareholder or one partner wants to buy the other out um they may on friendly terms engage to retain someone like me or there might actually be um a
(13:17) contractual clause in their shareholders agreement saying that they need to retain someone like me in the event that one is going to buy out the other’s interest divorces these get messy but where you have have a family business a privately owned business in many cases that forms part of the family assets or the family property that needs to be divided for Equalization um you will often excuse me see someone like me get involved to sort of establish what the fair market value is for that purpose and then lastly this is probably more applicable
(13:55) to public companies but there are many cases just for counting financial reporting requirements where a company who maybe has a subsidiary company or has completed a business acquisition of some sort and they need to look at the fair value of the assets they have acquired I do a lot of work in that space as well I’m a geek so I like this hearing all this stuff and just for for the customer for the listeners benefit like your background is you have your chared your ca um actually you have other designations don’t you there’s a few
(14:29) letterss yeah you have a CFA as well so you’ve spent a career in school cbv what’s the acronym for so so let’s just run through those quickly so yeah okay so I’m a chartered professional accountant um which I’m sure many of the listeners on this podcast are familiar with what CPA do an accountant yeah an accountant right um that said I don’t do typical public accounting work right I don’t I don’t even do my own tax return so don’t ask me for tax advice plus you have cherry for that that um I then sort of moved on
(15:02) to become a chartered financial analyst or CFA and that’s the designation that you would probably most commonly see used in the world of investment analysis and by that I mean making decisions to buy or sell stocks or bonds uh most equity research analysts working on Bay Street um investment analysts W streight investment analysts working for our Pension funds A lot of them would have that designation and that’s actually what I did for a couple of years was work on a team that put buy sell and hold recommendations on um our universe of
(15:41) stocks that we covered and then lastly the cbv that you asked about that stands for chartered business valuator which really I would argue is sort of the core um professional credential that’s widely recognized by Canadian courts Canadian accounting firms and the CR when it comes to some sort of business interest that needs to be valued in sort of a a notional or theoretical setting MH and you worked at one of Canada’s largest investment Banks so you know investing in valuation quite well I like to think I did yes right and then how
(16:19) did you decide to allocate your Investment Portfolio all stocks all real estate so I guess you could say I sort of believe in all of the above strategy when it comes to what our portfolio should look like I mean I I have stocks and Equity ETFs I have Bond ETFs I have actually some private credit that well simple I think it is offers um all of the things you would typically see in a tfsa or or an RSP or just non-registered Investments but I guess sort of early on in my career and we’re talking 15 years ago um I went down the real estate Road and
(17:03) if we if we looked at my balance sheet right now one could probably argue that I’m a little bit overweight real estate perhaps a lot overweight real estate but um I’m sure on this podcast that’s not gonna that’s not gonna cause too many um eyebrows to be raised I I’ll also add to that you know of the people I know who did really well financially with their investment portfolios it’s over overwhelming the real estate people maybe this is just who I’m surrounded by but yeah yeah no I mean I think I was biased towards real estate right maybe
(17:38) even as early as University you know I read all the books that most Real Estate Investors go on to read I read Rich Dad Poor Dad I read um Don Campbell’s book for Canadians specifically and so I think I was always sort of my mindset was skewed towards owning some rental properties eventually um but then I graduated in 2009 which was an interesting time um for real estate and obviously real estate fell very much out of favor after we were in the midst of a financial crisis and the US housing market had just suffered its most catastrophic
(18:20) losses quite possibly ever I’m not sure you can that’s I’m sure it’s up there yeah yeah and so you know when I was fresh at a university I had the opportunity to buy a condo downtown Toronto and really it was just sort of an easy decision for me when I looked at the cost to rent versus the cost to own just even as my primary residence we’re not even talking rental properties at this point in time it was about the same so would I rather rent for that price or would I rather own for that price and start deleveraging over
(18:55) time and paying off my mortgage over time m i chose to own and that’s sort of where it all started I there’s so many questions I want to ask cuz again we’ve qualified you as an expert in valuation I feel like I’m in a witness stand in court now yes you are this is a this is a contestes I mean that’s that’s what they say when they qualify people as experts at would you do the same deal today the same deal to purchase that first condo but at today’s prices though at today’s September 17th 2024 no um or at least it would be very difficult to
(19:36) do um the math looks very different right I mean I still own that condo so let’s actually just take it as an example because it’s real numbers I mean I paid $290,000 for that condo in 2009 I think the last bank appraisal that I did in 2021 when I did a refi on it mhm came in at $690 mhm I think when I bought it in 2009 sort of the the prevailing rent or maybe the cost to own would have been something like $15 or $1,600 a month and right now the rent on it is $2,800 and that’s what current the current residents are paying yeah which
(20:25) is actually at Market because that just turned over in April but I don’t have a a calculator in front of me but I think we can conclusively say that to buy a condo for $690,000 putting really using any sort of Leverage or any sort of debt um you would have to put a lot of equity into that to make that work even if you had the equity though would you do the deal doesn’t make sense financially no I mean if we talk about I mean we can debate about whether we should be using the term cap rate for a small Toronto condo
(21:04) but for your listeners cap rate just meaning like you know the net operating income I as the property owner am taking from that property dividing it by the value let’s do the math right now oh I already have your rent yeld 4. so 2800 right but but you need to dedu condo fees too right I’ve done similar numbers already I yeah so if it’s cons ative your cap rates around two and a half yeah that sounds I was going to say between two and three um that sounds about right to me so I’m not going to dispute that that sounds in the
(21:37) ballpark so why why would you buy a 2 and a half% cap rate condo in Toronto um when you could literally buy a GIC right now or a Government Bond that yields more than that there’s really only one logical reason and you would you would do that um which is if you really feel strongly about using that condo as a hedge against future price inflation which would have to be driven by pretty strong belief that prices are going to continue to appreciate in Toronto after they’ve just had probably their best run um you know
(22:23) up until about 2022 in a very long uh period of time so yes there there’s a good mathematical argument that I should just actually sell that condo and move on um put my Equity elsewhere I decided to keep it really as a matter of convenience I would say right it’s there it had zero vacancy turnover uh or sorry zero days of vacancy when it turned over um in April I can walk to it if an issue comes up so I can actually self-manage that one but if if we were just looking at Raw numbers it would not be MH a great
(23:02) return on investment so tell me about the states you’re investing in the States now why decision to do all that like you’re already like you do quite well sure your comfortable living tal yeah no okay so I guess what did I buy in the states and I guess I’m going to back up here again another 12 or 15 years so I bought that first condo in Toronto um a couple of years later was actually right before I was working in that job analyzing stocks uh renewable energy stocks I was subscribing to we had these things called magazines back then they
(23:45) were like hard copied magazines and I you’re still a young guy too talking about way back when when we had magazines I know but so I subscribed to this magazine called Canadian real estate wealth magazine and I read this article about this guy who dubbed himself Mr Hamilton jerk um and he was sort of explaining at that time and we’re talking fall of 2011 I think it was the investment thesis for Hamilton and I was actually finally at that point ready to buy you know a true rental property not just one that I lived in
(24:23) but one that I was going to buy and rent out purely as an investment and I made a cold call to Mr Hamilton we went out one Saturday I think looked at three listings in Hamilton and that same weekend I put in an offer to buy one of them so that was in 2000 that closed in January 2012 remember what we paid for it I should $1,000 for a semi detached house in a you know modest but reasonably nice um called the sack yeah on the mountain yeah the mountain yet I still have that property as well and so that’s sort of
(25:01) what gave rise to investing in the US was I didn’t really do a whole lot in Canada between that uh purchase in 2012 onward in part because oh at least you did well I did well um and I was also really at that point CU that post is 600,000 today probably something like that yeah nice triple yeah exactly um I had been you know thinking about starting my own business which I did in 2016 I remember that conversation right and so at that point my focus became on making sure I had enough liquidity to start a business which is at odds with
(25:41) real estate investing but I what I will say about that nice house in Hamilton is that it it’s the gift that keeps on giving I mean I refinanced it in 2015 to take a little bit of equity out which gave me a bit of liquidity buffer to actually start that business right sort of allow me to take that risk um yeah your investment property financed your your new business in a way yeah and then if we fast forward to 2020 when the pandemic started that’s sort of when the idea of actually investing in the states took hold for a couple of reasons M um
(26:19) one like everyone I was stuck at home um in in what I guess was a new Prime newish primary residence um downtown Toronto when I turned that first condo into a rental and I was I found myself you know spending an inordinate amount of time on Zillow searching through listings in different markets different cities sort of as like a virtual Escape when it was really difficult to travel right or or pretty much impossible to travel and then that’s sort of when the you know the wheels started turning I could very quickly just look
(26:59) at certain rent to price ratios in different markets and then I thought about it and to your point about cap rate that we were talking about earlier at this point that first condo in Toronto was close to being paid off or or you know almost paid off the Hamilton Mountain House had a pretty modest mortgage even after the refinancing and so I had access to quite a bit of equity on which my return was really not that great right like just on a pure cash on on market value of equity perspective and so I I thought more
(27:39) seriously about actually taking some of that equity and putting it South of the Border and it wasn’t really that much of a leap for me because you know at this point i’ had been used to managing a manager managing a property manager that is in Hamilton um I’d learned a few things about you know the challenges that come along with owning real estate as a direct investment uh and really to me managing that manager um from you know a thousand miles away wasn’t really that much more daunting than managing the manager and
(28:26) Hamilton other than understanding and giving myself a good understanding of the crossb nuances between Canada and us which there are several is that a hard you are an accountant oh I mean it it took me some time to get there but yes I was able to get to the point of comfort to actually take the leap so in June of 2021 I bought my first property in the US which was a A Beautiful 2006 bill build 1827 Square ft um three bed two bath house in a pretty nice subdivision didn’t need a lot of work in Fort Worth Texas oh or work okay so Dallas’s
(29:18) neighbor yeah yeah it’s sort of a forgotten sister city um it was a little bit obviously 2021 was a super hot Market in most places in North America just because of where rates were I mean if you were in American you could get a 30-year fixed mortgage for 2 or 3% um prices were shooting up I think I actually bit on seven houses before I bought this one oh was that hot eh and and Fort Worth was a little bit cooler than Dallas interesting and so still got the numbers to work but I pulled the trigger on that and it gave me me
(29:58) relatively few headaches and so I kept going with a couple of more can I ask you how much you paid for the hose so that was $292,000 us okay just to repeat though for listener’s benefit 2006 Build 8 1,827 foot three bedroom two bath now I thing about American houses their bathrooms are big yeah they are I think this had like a nice Soaker tub in it right and double syn yes yeah so so a six-piece bathroom I believe so yes yeah I actually was clarifying that with my home inspector the other day like oh yeah I have a six-piece bathroom in my
(30:36) rental property I don’t have that in any of my houses yeah no it’s not something you’re going to see here right but I mean land prices in Fort Worth are also a lot lower than they are given that you’ve got this geographically unconstrained land mass on which you can build whereas we have you know natural barriers here right we have the green bell we have the lake um there’s we have to build up obviously and and not out in the same way that they do in in the Dallas for Worth Metroplex yeah can I ask what your rent
(31:13) is so it actually just turned over as well as of August 29th but I believe it was at 2300 so the same tenants actually stayed there for three years MH and good yeah and took I looked at the move or move out inspection photos took really good care of it fantastic and so it started out lower than that like it wasn’t 23003 years ago but we did gradually get it up there and then was a b was it pretty effortless pretty painless that one was pretty effortless right so it does I mean it’s part of an HOA some HOAs are
(31:54) more annoying than others as I’ve uh found right so condominium board yeah yeah yeah exactly so it’s still like a it’s it’s a detached house but you’re still subject to sort of the rules around how to keep your lawn looking what type of shrub you can have I don’t think this HOA the rules are quite so stringent um there is another HOA that I dealt with that is much more of a pain to deal with in that respect but um there’s an easy workaround for that which is don’t buy a house that’s part of an HOA but this one was yeah of of
(32:29) the four us properties that I have this has been the most headache free for sure very nice yeah we we’ve had issues in Hamilton for example the condos uh I don’t know if we’re if invest us investors are being just targeted but they were just heavy-handed like um just how immediately the the uh enforcement notes came for like putting your recycling garbage bin back mhm yes right just uh yeah it seems heavy-handed anyways so the US investment been going well yeah I mean it’s I’ve done four now they all are very different well two of
(33:05) them are the same but I characterize them as being different and it’s sort of with each one I’ve embraced a little bit more risk and we can sort of talk about the consequences of some of that risk but let’s talk about it um one of them is in Florida is not two are in Florida so let’s back up and and get to the journey of how I ended up in Florida so after you know for that very first one I was sort of just in my mind dipping my toes in right um and then I sorry done quite well 2200 on a 292 property yeah it it
(33:40) was a solid buy um I didn’t I didn’t get a screaming deal on it like I think the bank appraisal yeah I had to fight for it I think the bank appraisal came in at 295 so maybe I walked in with who $2500 in um built-in Equity or something but that was dipping my toes in right I wanted to really try this experiment I put in very little of my own money because I used Equity from a heok I think on the Hamilton Mountain has is my down payment 30% and got 70% loan of value from a US lender and so it was really a 100% debt
(34:20) financed deal um and after it went okay maybe about six months later I I decided to dip my toes in again stuck with the same Market um this time it was a little bit more of a risky Buy in that it came from a wholesaler actually um but again it was a similar story different city Denton Texas which is a little bit more to the Northwest home to University of North Texas that was a 2300 square foot for bed 2 and 1 half bath um built into 2007 was actually a little bit I’m going to say less nice on the inside than the first one just I think
(35:07) it had been an investment property for longer the owner I think was just tired landlord Adam can you bring up can you bring up um Denton Texas on the on the screen I’m a visual person yeah sure it’s trouble so we have two Adams in here t y just like it sounds Texas for the benefit we are U we do have a screen and we post this on YouTube as well so shout out to our YouTube channel real estate that’s name oh wow that’s pretty holy cow that looks like nice can you click on the map Adam not even airport wow what is this
(35:56) building here I actually wait have you been there I’ve been I’ve been to I’ve been to the house I haven’t been to this building wow so the key the key to this house the reason the reason for the buy was the school district it was located in in Denton and yeah so your Greater Dallas Fort Worth it’s still yeah still commutable distance to DFW but to the north yeah yeah um but it is sort of a city and it’s a small City in its own right um but Americans are all about their school districts right and so I did actually sort of vet this and
(36:35) research this and talked to a couple people that this was a quite desirable School District as was the first one actually interesting yeah because I was looking North as well like mckin and up to Sherman as well right so I’ve I’ve actually I went to Sherman last year on a a property tour where a company with um sort of marketing new builds but yeah I’ve never shman is uh depends what you’re buying I guess dep what you’re buying like just for my my target was to stay under 300 the more under 300 the better but it’s really hard to find a new build
(37:12) around like under that oh yeah no I agree with that and so this second one in Denton was I had to go a little bit above 300 because in that second six months of 2021 prices continued to go up um so I think that that one was about 3 316 was what I paid for that one mhm and what’s it renting for it is currently renting for 202 which 2200 which is actually down a little bit from the first one and I think it was really a time of year effect um unfortunately the previous tenants decided to sort of leave late fall I
(37:58) sort of missed a good chunk of the rental market and so I was willing to concede a little bit to get somebody in there um last January but still compared when you when you take that rent to price ratio um compare it to what we see Canada up here it’s a different story that said I will say this about Texas I do think those were two decent buys um I like Texas or say Texas as a whole Dallas for worth um attracted me for you know a number of reasons right the rental price ratio we talked about um it’s the number two choice of reats for
(38:38) markets right yeah I mean Invitation Homes which owns 84,000 houses in the US has I I actually was looking at this this morning out of curiosity I looked at their data for the last eight quarters they were net buyers um in the Dallas area so that gave me some peace of mind um Diversified economy like when I went to Texas I did not want a Houston which to me just seemed a little bit too exposed to um oil and gas and also a bit more exposed to hurricanes as well MH you know DFW we’re gonna get to Florida we’ll get to Florida right um
(39:19) DFW its economy is a bit more Diversified right like I think it’s something like 20 of the um 500 companies are headquartered somewhere in the Metroplex and it’s across Industries right you’ve got American Airlines Southwest Airlines AT&T I believe there there Texas Instruments um messen I believe is there if I’m not mistaken and so it just it made a lot more sense but the one thing Sor just add to that outside of tal you won’t find that in Canada right in terms of economic diversification or even just that many that number of forun 500 head
(40:01) offices oh yeah 100% um and actually if we’re talking about Toronto as a financial Capital um one interesting read I had in the Wall Street Journal recently is that JP Morgan Chase now employs more people in the state of Texas than it does in the state of New York um they’ve moved another camp or opening another campus there and so gfw is actually sort of becoming a regional Financial Hub in its own right so those are all the things I like about DFW so you’re using your valuation skills to make sure you have a
(40:37) good investment yeah I think that’s I think that’s more actually just real estate fundamental Common Sense yeah I I don’t think that takes evaluator to figure that part out where the evaluator cab comes in would be the thing I don’t like about Texas and I’m sure you found this after owning a place in San Antonio is the property taxes yeah mine’s like 5,000 what your so on that $292,000 house in Fort Worth the 2024 tax bill was $8,400 cuz one other thing that I found and and for context that is more than I pay on my primary residents in Toronto
(41:15) which I paid more than a million dollars for last year and what I found is that compared to impac in Ontario where I think we actually take it for granted and we get a little bit lucky mhm they take a very long time for tax appraised values to catch up to Market Val right yeah forever the tarant county property assessor and tax collector and the Denton County property assessor and tax collector I can say with some hindsight and certainty are very fast to recalibrate those two things so seems like sounds like it’s annual yeah and so
(41:56) they see that the property has changed changed hands for $292,000 in 2021 they’re not giving you the benefit of the doubt that it was you know last impac assessed in 2020 for something well below that they’re going to actually look at the property records see that that transaction took place and Market to that and so that that is unfortunately just one of the things about Texas as a whole and certain other states but wait are you you going to fight it prices have come down have they not I could probably protest that one in
(42:34) um tarant County if I really wanted to um the Denton County one I think is probably closer to being right in my opinion because I think I think the tant county the Fort Worth one I think was tax appraised for 370 which I don’t think it would sell for right now I think it would be more like 350 345 so I don’t know what do the maap 345 over 370 time 8,400 is that worth my time fighting some tax assessor maybe maybe not much time I’ll get to it so shar’s actually gonna fight on my behalf for mine sorry sh Shar is gonna fight on
(43:13) yeah I mean if you if you’ve got somebody to do it for you then I would say sure go do do it for me but I but I make my living selling my time too so for a lot of money well yeah I I I know what I know what a unit of my time is worth and I haven’t gotten around defending my Taran County property taxes may just poke your pm and see if they provide that service I don’t believe they do I have a pretty Bare Bones PM in DFW if I’m being honest I mean they do um eviction protection they’ve done a pretty decent job on the Fort Worth
(43:50) one the the Denton one I just say as I said about an HOA that’s a bit more aggressive that would be the one in Denton um so I have to get them sort of more involved to remind the residents to bring in the trash bins just like you said and you know I think they have somebody sort of driving around the streets every day just to take a look at things like that so it is the dent one’s more annoying overall than the for worth one um even though it’s was probably might have actually been yeah it would have been a lower price per
(44:26) square foot to buy um so that was late 2021 oh sorry I just want to get some context actually your your prices are still going up even though you bought you had to fight for your property interesting I mean the party was still going on when I got in in 2021 right um they didn’t I don’t think they really peaked until mid 2022 when Central Bank interest rates and so both sides of the Border started going up um so in that sense time did a little bit of work for me in probably the six to 12 months um between when I bought those and when
(45:10) sort of the peak happened and and prices started retreating a little bit right but you’re up like 60 Grand on a 292 property yeah and it didn’t it didn’t take that long to get there now you must be pretty happy then I I was pretty happy with that one yeah you know Le less happy with the dent one but very happy with the first one cuz it was it was still when things were going up um and I sort of knew that I had a I I could see right after losing it on seven properties before that but also be trying to be careful and prudent
(45:42) not to overpay um that the the legs of the party probably still had a little bit more to go before the music stopped so to speak is the same property manager between the two properties yes yes so that’s nice at least you can consolidate that way it’s one conversation rather than two agreed and the you know obviously being in a big metro area like that you’ve got access to a lot of property managers should you feel the need to change make a change and that was one thing I kept in mind as well when I was looking at where to buy first
(46:21) was I wanted access to a slew of property managers which in a huge metro area like that is obviously not an issue that’s one of the big differences between the States and Canada is uh property manager met property management companies in the states actually have resale values actually you’re the perfect person to comment on that because that’s what I hear based what I’m seeing like I hear about private Equity firms putting money into property management companies in the states I don’t know if I’ll see that here in Canada ever not not anyone I
(46:56) know in the community oh you just mean in terms of like the significance of property management as a sort of sub industry in the United States it just seems to be a viable business versus uh it’s just you don’t really see anyone scale here locally because it’s there’s not enough cash flow and it’s too difficult to tenant profile tenant relationship business relationship with your customer yeah now as as a business valuator I would actually say that a property management business is pretty challenging right you’ve got M unless
(47:27) can get that growth that unit growth it is all about scale right you’ve got razor thin margins and so I think to do it well in the 21st century um the firms that are able to be competitive in pricing right having a pretty good technology platform that’s like a gien that’s table stakes and just figuring out how to sort of deploy a limited number of Human Resources MH across a a broad geography so in fact it’s a different company that I use in Texas and in Florida two different companies but both of them operate in several Metro areas
(48:08) and you might be talking to somebody on say an accounting question or a property maintenance question and if they’re just coordinating something behind the scenes they might not even be in that same Metro um which has its pros and its cons but I understand that having having sort of looked under the hood and seeing financial statements of a property management company and also just using some commercial common sense it is a very difficult business to make money in and you don’t really get to the point of profitability until you get
(48:43) hundreds if not thousands right of units do you know how many houses under management your property management company has I know it’s not yours but the one that you’re yeah no we I’d actually be curious to look that up I mean I know the the one in Texas probably does at least a thousand um and that’s a good number just in Texas are they just in Texas no I’m saying like they they’d have to do at least a thousand across a few Metro areas I don’t know how many they have in Dallas Fort Worth hundreds in Dallas Fort Worth for sure I don’t
(49:16) know whether they cross that threshold just in Dallas for worth um and then the Florida company I was actually down there last week to meet the maintenance and and also sort of turn it into a you know somewhat of a time away for fun her team had just in the cape CR Fort Myers area um 300 herself and I think she had a counterpart who probably did another 200 so I think they had a bit 500 which makes me think this company in Dallas W worth I would not be surprised if they got well over a thousand in Dallas worth
(49:57) right this this is all interesting CU we haven’t actually talked about this off camera so this is all this is all I’m learning here too and hopefully the lessener is getting benefit from this as well uh the smallest property manager that we’ll use at share is uh 3,000 houses in that City okay yeah so you know when when we’re talking about property manager we’re talking about different scales and context so you know a PM company with 3,000 houses under management that City it’s probably worth something right oh as a business yeah I
(50:25) mean if you’ve scaled to having that many let’s call them contracts because that’s I guess really what they are month-to Monon contracts recurring income yeah we we you know in business valuation speak if we were looking through this or at this through the lens of uh accounting standards and a business combination we probably say that there is some commercial Goodwill associated with those contracts or those customer relationships so I agree I mean it’s different than just one person who manages you know a dozen or two dozen units on their own
(51:05) for individual investors which are all you know all over the place but um I I agree with you that there are a lot of like I was sort of overwhelmed by choice when I was interviewing property managers and in DFW because there were just a lot interesting and then how is that were they were they like wanting your business or were they like yeah I mean they because here’s so different no they they were like the one company had a full-time like business development manager whose job it was to bring in okay business so yeah they they were
(51:44) aggressive and wanting clients right yeah because you’re property manager do they have such such such roles in divisions between responsibilities yeah no he he was a full and you know he pitched himself as I’m an investor too right like he talked about his his units that he owned and how they manage him so it was very much the at least perception that they were trying to sell of we’re investors too we’re not just managers but wow they had they had a person just in business development oh yeah again I’d have never seen this in a
(52:20) local like the no I mean this team yeah like would it surprise me if they had 3,000 units under management like the sort of threshold you look for no it wouldn’t because to support that sort of headcount you would need to be there I think but even like your Florida PM 2 300 houses under management yeah like unheard of well and and that’s that’s in a relatively smaller metro area too right that’s for Myers which is somewhere I think between half a million and a million people depending on where you set the boundaries
(52:57) is it that many I didn’t even know that Fort Myers yeah okay you want to talk about Florida yeah let’s talk about Florida so you know let’s sort of fast forward to 2022 okay so after the the Texas after after Denton which was December 2021 um I was having a little bit of fun with this and it was Omron happened is that right that would be that would be just Fort Meers if you okay if you Google um Cape C Fort Meers MSA okay so Fort Meers is 96,000 population as of 2022 I thought it was that sounds low to me but again cuz
(53:39) you’re all looking at [Laughter] tourists are we are we going to find the population of uh so it looks like 760,000 yes that that sounds about right to me yeah that’s actually pretty big it’s grown a lot over the years um which I think has been a help and a hindrance at the same time but if we fast forward to 2022 um you know I had these two single family rentals they were still even at those prices still fairly hard to cash flow just because I was basically buying them with 100% debt right um so that was more of a capital structure
(54:29) not advising anyone to do these things no that that was more of a capital structure issue than that they would have cash flowed if I actually put the 30% down in cash yes um so I was sort of actually let’s dig into that so why why why would you do that then why would I do that okay so in business valuations we have this concept called a firm’s optimal capital structure right um I like this show well it’s like I’ll take myself back to fourth year strategy class in University where we had to play this computer simulation game and one of the
(55:06) things we had to control as the you know fictitious executive management team was how much debt the company was was taking on and there’s sort of this concept in in financial Theory right that there’s sort of a a graph that’s like a semi a vertical semicircle um in that there’s benefit to adding debt to a business to a certain extent if you’re trying to maximize value for shareholders right um Deb you’re the shareholder in this case yeah yeah I was yeah shareholder my my own little real estate portfolio but even if we apply
(55:47) that principle to business debt is cheaper right in a theoretical sense it is quote cheap cheaper to borrow from the bank than it is to get somebody to invest equity in a business typically because Equity comes with a higher risk right the bank would get repaid first in the event that a business or a property goes belly up and then investors are left holding whatever’s left over so Equity investors typically demand a higher rate of return than a debt lender would MH so you’ve got that element you’ve got the fact that interest on debt for a
(56:30) business or for a rental property is tax deductible so that makes the debt even cheaper and as long as you can you know use debt as a practical tool without using too much of it there’s sort of an optimal point where a business can service its debt use that capital to grow but not overburden itself with too much debt such that you know making Debt Service payments comes at the expense of investing into growth projects or anything else right and so when I when I S just pause you there like what you just explained there is
(57:14) what how pretty much all of our clients got ahead and made millions or multi-millions in real estate and at the same time this there’s this current group of investors who went well past that uh they were they weren’t borrowing cheap money from the bank they were borrowing money from private individuals along with lender fees and much higher interest rates no exactly right there there’s a sweep spot where you can use it responsibly and enhance your returns as an equity investor yeah Sweet Spot enhance your returns yes yes
(57:45) that’s that’s sort of what I think a textbook would say um and yes I had used debt right 12 or 15 years before when I bought that hair on the mountain or when I bought that condo in Toronto most of it was paid off a good chunk of it was paid off and so I had two properties and I I suspect your listeners may be um familiar with the concept of loan to value right they should if they’ve ever gotten a mortgage before right so right at this point because of how much the Toronto condo from 2009 and the Hamilton house from 200 12 had
(58:28) appreciated and the debt balance had gone down over those 12 or 15 years because your tenant was paying your mortgage essentially I now had a very low loan to value ratio on those two properties your mortgage is very small Rel in relation to the current value of the property correct like they were probably worth around that time let’s say one point three million and I probably had combined mortgages of 200,000 right and so what what’s my loan to value on that we can pull out of our phone I think your Equity was 1.1 that’s
(59:13) my mind went well there’s that too but but what was that Equity doing at the time not it was sitting there it was kind of idle so what my loan to value ratio would have been 15% the business valuator and me knew that I could afford to if I looked at the portfolio as a whole and that’s how I looked at it as opposed to a property by property basis I could probably afford to lever up and add some debt if I wanted to grow right if I wanted just to sit back and maximize my quote cash flow then I should have sold and bought properties in cash but at
(59:50) this point I’m still working I hope to be working for a good number of years yet and have a decent amount of sort of career Runway ahead of me and wasn’t necessarily relying on real estate for cash flow just yet my mind sort of shifted more to how can I use this equity and grow REM me again how old were you when we met 28 I was 24 when we met in 2011 so yeah okay now I remember now because you held the record of our youngest client for quite some time I guess I was knocked off my drown at some point yeah then jokan got you I
(1:00:28) think it was 21 or 22 oh yeah that would do it so yeah 22 was the Toronto condo and then I think 24 was the first true rental and then a good sort of decade of nothing and then 35 sort of realizing well this Equity is sitting there MH my business my valuation business was more at a point where I felt more comfortable adding a bit more financial risk to my real estate investing sort of lined up with the timing of when I started looking in the states and that’s sort of why I decided to add as much debt as I did your
(1:01:11) journey to uh buying at least for the states actually most of our clients were very similar very tiny mortgages on their principal residences that’s why they felt comfortable Levering up so just to provide the listener context on who in reality who the everyday investor really is almost nobody has cash um almost everyone’s using or using existing or creating new home equity lines to to invest yeah responsible way to do it yeah no like but Equity can be used as a powerful tool if we think about that Hamilton Mountain House it gave me
(1:01:45) liquidity when I needed M to start a business right I at least had the foresite to refinance that before I quit my job to start my business credit yeah had you know you had income toal when I was lendable um but then I dialed it back for several years while I was building that business because believe it or not building a business from scratch is actually kind of hard and the first couple years weren’t necessarily as rosy as I would have liked but then I got to a point where I felt comfortable adding more leverage to the
(1:02:25) real estate portfolio mhm to grow that let’s call it $1.3 million of asset value into something bigger um so that hopefully down the road that will provide a you know a good piece of the foundation of the whole Investment Portfolio when you go when I go back to your original question of how do I choose to allocate my money um I’m now probably back to being overweight real estate MH compared to what most CF would probably tell me to do but what would a cfp tell you to do well I mean I think most a lot of cfps think more in
(1:03:04) the world of build an 8020 or 6040 portfolio of equities and fixed income and call it a day which isn’t wrong there’s benefits to doing that it’s more liquid it’s less risky it takes takes zero effort um but I also think you know it’s it’s more volid and you can’t use any leverage to do it that way yeah I’ve mentioned it many times a show uh without leverage real estate’s not that great an investment no and you’ve probably said this but I’ll just repeat it yeah please the expert right I mean sure what if if the
(1:03:46) average uh price appreciation for houses longterm is 2% I’m just making up a number I actually don’t know what it is 2% and you know a a 7030 Equity Bond portfolio can get you 7% you should go for the 7% right no not necessarily if you were buying a a a house in cash and earning 2% on that like if you bought that $690,000 condo today with cash then it probably doesn’t make um a great investment out of the gate but if you’re buying a property with some leverage with let’s say 25% down I don’t know what terms your us borrowers are getting
(1:04:45) or your Canadians um borro in the US are getting right now but let’s say 25 or 30% down that 2% asset appreciation so long as the cash that the property is cash flow break even that 2% asset appreciation would therefore be 8% Equity appreciation because you only put in 25% so 2% Time 4 is 8% I think that’s where a lot of people get mixed up reading articles in the financial press of you know real estate isn’t a great investment agree if you’re adding no leverage to the mix um and you’re just accepting that 2% price appreciation and
(1:05:34) getting no cash flow and and and and let me show you something ad can you Google dig capitalist $100 asset that should find me what I want visual visual capitalist yeah that’s the first one then keep searching for add $100 to it $100 you need dollar sign so I love this chart you already blocked four on this page alone so there a stock market scroll down atam okay so $100 becomes I want to go to go to Real Estate because we’re talking about real estate yeah so uh Cas index says that over a from 1970 to 2023 the US home
(1:06:23) prices have grown 5 and a half% so the average house in the USA average so you and I don’t like being average we’d like to beat it but even if we got an average return of 5 and a half% on the property are you happy Adam if I can use some leverage and turn that 5 and a half% going do something higher 100% leverage but yeah yes yes are you me I would be ecstatic yeah no I mean I am but my time Horizon in in that is very long term right I mean there’s this expression I heard once and I think it’s worth repeating you don’t day trade real
(1:07:05) estate oh expensive right transaction and so when you’re gonna buy it your time Horizon has to be long enough to be worth it MH well the REITs their time Horizon is 10 years right the the typical read is they’ll sell the property after 10 years but their time R is high Horizon’s 10 years yeah this ain’t no flipping this ain’t no you know not even five we’re talking about 10 year right so the mentality of big money big big capitalist money it’s very different than the everyday investor other than you and I 10 years
(1:07:41) is no problem for me no and it’s not for me either I mean so I’m Now 37 so when I went back to the deciding to build more my portfolio again I was 35 34 when I bought that first place in Fort Worth and again I I I think that time’s sort of going to hopefully do the heavy lifting for me on those properties in the same way that time did most of the heavy lifting for me um in 2009 and 2012 now are my expectations as high as what they were in hindsight of how the cond in Toronto and the house on Hamilton Mountain were formed from
(1:08:30) 20094 we had historic runs no and so you know I think people just need to be careful and and calibrate their expectations for what’s normal because you know that was not normal 20 yeah 2009 to 202022 so basically I’m going to call it most of my adult life um we saw interest rates move in Only One Direction down we saw real estate prices in Canada and I guess after it recovered in the US move in Only One Direction which was up and I think a lot of people sort of fell into the belief that that was going to sustain itself for the the long run and
(1:09:14) then when higher interest rates kicked in in 2022 the party finally stopped and the music finally stopped at the party sort of like I feared that it would in 2021 but had a little bit of confidence just sort of seeing all the buying activity um that it would continue for a little bit longer and I could at least sort of get into a sound Market um without grossly overpaying and then letting time do its work from that point forward yeah CU again 53e sample here 5 and a half% price increases over over that period
(1:09:48) every year on average on average right yeah no I’ll take that I’ll take that all day I’ll take that um in part also because I think you’ve probably heard this analogy too right I can’t remember where I read it so um apologies to whatever author I’m I’m not attributing this to right now correctly but if you think about real estate investing right um how did this author describe it you’ve got sort of it’s like it’s like a three course meal cash flows or appetizer very hard you know harder to get mortgage pay down principal pay down
(1:10:26) deleveraging whatever you want to call it is the main course just sort of the hold buying and holding the holding is generally what sets people up for success and then appreciation is like the dessert so um if you can buy a property and get 5 and a half% appreciation over a 25 30 year period while that property is being paid off then you’re going after yeah after 25 or 30 years you’re going to be quite quite pleased with that decision I even think back to the days of that Hamilton Mountain House I looked at it more from
(1:11:05) the perspective of and I I didn’t even even though I worked in evaluations at the time I didn’t sit down to actually calculate what my break even rate of return would need to be but if you put 20% down on a house and it breaks even for 30 years or whatever my amortisation was at the time and it pays for itself after those 30 years even if the property doesn’t appreciate I have just increased my invested Capital by a five times right free and cleed offset yeah and then at that point it’s cash flowing so you know it it was sort of a
(1:11:50) fairly easy decision with enough time Horizon to look forward to can we talk about Florida in Florida well we can talk about Florida yeah so I had avoided Florida for the longest time like when I when I was picking my first US real estate investment I ended up in Texas obviously um there were quite literally dozens if not hundreds of markets that you could choose from in the United States right that was actually the hardest part at the beginning was like oh where am I going to start looking because that influences a lot of other
(1:12:28) things like getting financing Property Management like we talked about where to create your limited partnership yeah understanding Market rents whatever I had avoided Florida because of when I bought my first US property which we now know was in the uh Dallas Fort Worth Metroplex I had considered Florida at that point which was 2021 I mean I had some familiarity from going to Florida most March breaks um my aunt and uncle were snowbirds who wintered in in Southwest Florida but I had you know the the phobia or the fear of a hurricane
(1:13:14) hitting my property and uh you know I believe that climate change is real and the number of hurricanes that hit Florida particularly the gulf coast is real and buying a property that was in the potential path of a hurricane was just a bit more risk than I wanted to stomach and so that’s sort of why another reason why I started in Dallas Fort Worth was it hadn’t been quite as prone to extreme weather events in the last several years as the State of Florida had been what was frustrating trading was despite all of the reasons
(1:13:58) not to invest in Florida people continue to move there and you know the party’s still sort of going on to a degree um I think I read projections recently from the state of Florida suggesting population growth of something like 320,000 people per year between 2024 and 2028 um and so in a way it was almost like this is a crowded trade but I almost feel some sort of need to follow the crowd to a degree um and part of it also too is for Canadian borrowers investing in the US one thing you will find is that financing can be a
(1:14:52) bit of a roadblock a bit of a challenge and where I own my two properties in Florida um I was able to work with a great sort of small Community Bank who really did not care about the fact that I was a Canadian without a Us credit score and they’ve been fantastic to work with so everything sort of lined up and then I was also looking for a little just bit of diversification in terms of asset class right I mean in in Dallas Fort Worth I had two fairly nice excuse me single family houses um Florida sort of gave me an opportunity
(1:15:35) to I guess we can say diversify into more true you know multif family in the form of a duplex and then also a seven unit um sort of small apartment building as well which really was underwritten more like a commercial property and a commercial property is actually arguably easier for a business valuator to Value because it’s just a function of net operating income and uh the prevailing cap rate though this was in 2022 when interest rates were already starting to move upward so trying to really nail down what what the stabilized cap rate should
(1:16:21) be was a bit more of a challenge so were you there before before un or after un just before so I yeah so this is my fears of investing in Florida came to fruition um and uh the seven the seven unit building would have closed in May the duplex which was sort of opportunistic and unexpected but it was a listing that I found on Zillow managed by the same management company that was managing the seven unit and long story short was being sold by a guy who had been he he he was a this this is a great story cuz I found I went online saw who
(1:17:02) the owner was but their motivations were for selling and it was a personal trainer and fitness coach who sold nutritional supplements um but I believe that it was concluded that some of his supplements included ingredients that were not totally 100% legal and so in the words of the selling realtor when I called her up one Friday afternoon oh yeah they put him in The Slammer but he’s out now in case you’re wondering and I was like well I wasn’t actually but we H disclosure but yeah but we hammered at a deal that
(1:17:43) closed on September 15th of 2022 and hurricane Ian I believe was maybe 10 to 14 days right after that oh my God and you know at oh yeah it was a slap in the face um and it looked like it was going to go north hit closer to Tampa but at the very last minute took a turn East and um Cape Coral Fort Meers got the brunch of it and I certainly was not spared and all of that but I mean it was a sort of validation of my concern in the first place of the RIS associated with Florida so that last that hit trono and miss
(1:18:26) Saga that was I think it’s approaching a billion in Damages hurricane Ian for context was $13 billion worth of damage yes I believe it was the third most expensive storm in US history and the most expensive storm in Florida’s history H yeah and then how’ that affect your properties so both of them needed new roofs that was the main damage like neither of them are in um flood zones so that that wasn’t the issue it was more wind than water was the problem and for the you know the seven unit building it ended up not
(1:19:09) being the end of the world because when I bought that property um the roof was sort of on its last legs and I was planning I’d already underwritten that I would have to replace that one in the near term and I was actually able to get a little bit of insurance proceeds um that I probably wouldn’t have otherwise gotten on that one to do so but the other the duplex from the inspection I was not anticipating to have to um replace it out of the gate but I did as much of a journey as it was to negotiate with insurance companies in
(1:19:50) one of the most litigious states in America um ended up walking away a little bit out of pocket but not totally scarred I think the I think the bigger long-term issue for Florida and other states prone to naal n natural disasters is just how is the insurance Market going to play out I mean Florida has had a bit of an insurance Price crisis over for the past two years since Ian and that owners insurance premiums have doubled or or tripled in some cases right is that your experience it was my experience that the seven
(1:20:35) unit policy probably close to Triple but that’s not really an Apples to Apples comparison Because the actual coverage expansion increased after we put on that new roof but it was certainly like it it was a huge increase and now I say you know Texas I don’t like the property taxes Florida I don’t like the insurance so pick your poison which one’s worse or find a state that doesn’t have either as a problem yeah that’s why that’s why I’m looking at Kansas City Missouri property tax my property tax on the property I was
(1:21:11) looking at was like, 1500 right or how big of a h how valuable of a house uh 1,200 foot Bungalow um 152,000 sounds pretty good to me yeah off Market rents for 1300 yeah purchase price 152 yeah so you’re almost at that 1% Ru there is a small rental probably like 20 um but again I really like the economic fundamentals of Kansas City Missouri but 5.
(1:21:41) 9% cap rate so that factors in insurance and uh and property tax no I mean that’s about as probably about as good as you’re going to do on a single family house I would think I mean I more for the we have clients getting sevens in the Memphis Tennessee interesting okay bit older house though it’s like 1950s house or 1960s so a bit older um but yeah yeah very good so uh would you do these Florida properties again um I go back and forth on that one right I mean there’s there’s obvious reasons to say no I would never want to do it again but there also some
(1:22:20) reasons to say it was a good learning experience um I developed a very good relationship with this Community Bank um I was able to on the on the seven unit one right it was actually both of them really treated more like a commercial loan and so it was actually a pretty easy approval process I’ve got fairly low rate fixed term debt um for some time it’s being amortized over 20 year period so a good chunk of principle has already been paid down and I guess you know I’m still looking at everything from a portfolio
(1:23:07) wide picture and that over time this will hopefully deleverage um free up Equity or just continue to Del leverage to get to the point that that rental income or a portion of it turns into free cash flow I mean the one thing that the Florida properties got me that the Texas and and certainly the Ontario properties did not was the best rent to price ratio so I mean if we look across the portfolio now I was just doing quick map before I came here gross runs across you know 13 units in separate properties in three
(1:23:57) states or provinces are about 28,000 Canadian now a good chunk of that is in US dollar so that number is going to go up and down with the exchange rate but if I can just sort of let these ride um and pay themselves down that’s $336,000 a year in Gross rents in today’s dollars if I can optimize operating expenses to be about 50% of that then what’s that $168,000 a year I would be quite happy with that if we can just eventually get them paid off over the next you know 15 20 25 years and what do you think you planning
(1:24:45) on any future Investments what do you think your next investment will be I actually think right now my my most rational move is to just sort of wait sit back Del leverage right when when I talked about optimal capital structure earlier I went from having arguably not enough debt on the portfolio in 2021 whatever that was to some might argue the upper boundary of enough or perhaps even too much much so I think you know well the the Curious side of me loves looking at properties looking at new markets going on Zillow um the rational CPA side of my
(1:25:40) brain says probably the best move at this point is to just throw some excess cash flow at a couple of the uh the loans under underpinning everything and freeing up Equity freeing up cash flow um because at this point do I really need to take on that much more risk in my life um the answer is probably not to get to my goals but it all depends on what what every individual’s goals are right I mean um I sort of have an idea in my mind of what I would like my portfolio to be in say the next 15 or so years I can probably cut it off at this point and
(1:26:34) just let the Loans pay down maybe accelerate the pay down of some of them and continue to allocate other money to stocks and bonds as a traditional investing approach as well um but we’ll see ask me in a couple of years and see if I stick to that because I think I probably said that in 202 22 and look what happened I know it’s not exciting for the listeners benefit is though because we have lots of guests who come on and just grow and grow grow and grow but then you know there’s a whole bunch of people losing their shirts because they
(1:27:06) grew into areas during a bad time to grow um now my question would be if you were in buy mode MH where would you invest so because I haven’t been in buy mode for a couple of years now on either oh yeah either side of the Border I don’t know that I’m the best person um to really even give an opinion on this but I guess I can give my my 10 cent or two cent opinion but I mean if we just think at a high level for your listeners particularly looking at the US you’ve got the midwestern markets like the like the St Louis or sorry was
(1:27:48) the Kansas City or St Louis say Kansas City Missouri the Carolina yeah right so you got Kansas City St Louis other Midwestern Market markets are probably going to have better cap rates higher cash flow out of the gate do they have as much appreciation potential as a DFW I honestly don’t know the answer to that question just because I haven’t researched those markets enough to really know um obviously Texas I already talked about I do think the economic fundamentals are there but the property taxes unfortunately just kill the numbers on a
(1:28:27) lot of deals M Florida I’m in no rush to uh deploy any more money into after the you know the somewhat scarring experience the Carolinas have actually been interesting to me because just from very anecdotal small sample sizes when I look at you know rent to price ratios on Zillow while I’m lying on the couch it seems like Charlotte for example North Carolina would be a market that would take a lot of boxes for me and you could probably make a deal work um what I don’t know is just well I I haven’t done enough
(1:29:07) research really on it to happy to share mine with you sorry I happy to share mine with you okay well I’ll you you can share yours in a minute but you know you’re still gonna get a little bit of the the hurricane risk I suppose but not nearly to the extent that Florida would so that’s probably my my piece on the Carolina so I I I think Charlotte could be a viable option if I were to get back in the game but who knows when that’ll be and what will have changed but what what’s your thesis on the Carolina yeah because I was like deal in Savannah and
(1:29:39) the insurance wasn’t that bad I that’s Coastal right so a lot of the Carolinas are coastal as well uh then if you are looking at the Carolinas then you probably want to look near where Toyota is building their next Plant it’s A14 billion investment probably create somewhere around 5,000 or 8,000 new manufacturing jobs so anyone who knows like Honda and Alliston or like Toyota and Cambridge knows what that what that did to their markets wock Ontario what part of what what city is that in I have it in my spreadsheet yeah happy to share it with
(1:30:10) you later um and then OIC the company that manufactures OIC has a $4 billion investment and I think also in North Carolina uh 4 billion investment to create 1,000 manufacturing jobs and uh I’ve heard good things about it um the the weight loss drug yes oh you’re not well no I wasn’t sure if you’re were like I’ve heard good things about the drug itself yeah or the the manufacturing facility where they’re making it I I just the way it came out was kind of entertaining though this is not my field um but again I I have friends in the in the training
(1:30:49) space with patients and apparently it works well and uh you know you offer weight loss in anywhere in North America it’s and it’s if it works there’s a very high uptake on it in the United States anecdotally I believe um and I mean the commercials are catchy right so I had no idea what it was but man they had a lot of money I think they had Super Bowl commercials for probably yeah right uh but then to my point you don’t see this investment in Canada you don’t see an automotive manufacturer putting up 14 billion you don’t see a drug
(1:31:21) manufacturer putting up 4 billion right and those two alone are in the Carolinas okay yeah no that would be intriguing for sure yeah yeah all right any any final thoughts for The Listener like you’re still a young guy and a lot of our listeners are around your age yeah no I think I guess if I were just to sort of summarize some of the things that I’ve some of the themes that we’ve touched on today first one would be time right whether we’re valuing a stock or we’re valuing an OP or we’re thinking about investing in real estate or we’re
(1:31:57) thinking about investing in the form of a small business I would argue that time is actually probably one of the most if not the most variables that can set us up for Success right you know as I said before I let time do a lot of the heavy lifting um in my own real estate investing I hope to continue to be able to do that to your point on age and so you know there’s that saying when you’re investing in stocks time in the market is more important than trying to time the market and I think the same is also true in real estate as well so
(1:32:46) you know regardless of which asset class you’re you’re looking at the longer your time Horizon statistically speaking the better your chances of success so that would be one um number two I probably sound like a broken record but that business valuation concept of of optimal capital structure um thinking about debt as a tool that can be used responsibly to grow I mean I I certainly would not be in the position that I’m in had I not taken advantage of debt when it was relatively inexpensive and I mean I get that we’re sort of at a
(1:33:39) in a completely different era now and things are harder and maybe that means that buying with less Leverage is is the more prudent option than it was you know say two three four years ago but at some point you can calibrate things to make the math work um and and if you’re in a financial position where you have sort of enough cushion to absorb any blows that come your way like a hurricane in Florida for example for example um you’re obviously in a much better spot and so there there is a reason that I hit the pause button
(1:34:22) for about 10 years before I I got back into things a third would be I guess if you’re going to well invest in anything really but invest in real estate invest in stocks being willing to sort of embrace risk and give yourself permission to make some mistakes if you buy a property um I don’t care if it’s the best property the worst property what I can guarantee you is you will probably look back at some point in your investing career and say oh I made a mistake here and if you beat yourself up over it um you’re just sort of diminishing your
(1:35:08) chances of long-term success and I I’ll give you an example here one being that Hamilton Mountain House I think it was not too long maybe a year in the roof on that one went I mean we’ve done the inspection I thought it would hold up for maybe another five years or so but sometimes inspections things don’t according to things don’t go according to plan even compared to an inspection and so it sucked I mean that probably killed the cash flow on that property for that yearh and having come from you know an academic in then a corporate environment
(1:35:49) where we were sort of rewarded for Perfection and for not making mistakes it took me a bit of time to embrace more of a risk mindset and live through that and say okay well this didn’t work out according to plan is it going to kill me in the long term and after I was able to get over that psychological hurdle and think back to that first variable I mentioned which is time I realized a little bit of short-term pain doesn’t change the game plan and that’s how I’m looking at Florida as well right now right if I had if I had looked at that
(1:36:36) new roof in 2013 for the Hamilton Mountain House and let that deterred me from investing and I simply said oh you know on a cash onh basis this year was rough so I’m just going to sell the mountainous and redeploy by the the capital into stocks I’m quite confident I would be kicking myself in 2024 now I I’m not expecting that the next 11 years are going to be like the past 11 years but I do think that having some willingness to make mistakes and learn from them was something that I sort of had to learn um as an otherwise
(1:37:20) fairly perfectionist type person young at the time yeah and and I guess that sort of leads into my last Point too which is just having realistic expectations for people getting started I mean if you’re buying your first investment property in 2024 and you’re listening to this and then 2034 rolls around and you look at that house or that whatever piece of property that you bought and it hasn’t doubled or tripled in value you should not consider consider that a failed investment right the Tailwinds that we had as we’ve
(1:37:58) discussed for the past 15 years or at least as long as I’ve been owning property you know it’s easy to say oh of course this worked out because you bought in 20 2009 or 2012 and you would be right like it it makes it look easier than it actually is real estate investing has some hard moments to it and so I would just encourage people starting to invest to sort of level set their expectations and give themselves enough time so that they can achieve that five and a half percent sort of long run and it truly needs to
(1:38:39) be long run in order to have a a good likelihood of achieving that chart before if you work at the stock number mhm which is the big performer mhm it works out to just over 10 a half% right including dividends for the S&P 500 okay so like Leverage example leverage example of Leverage real estate would beat that W easily yeah you’d be in probably the low 20% range may maybe less than that if you’re a Canadian buying in the US and only getting 30 or sorry 70% loaned value but yeah somewhere what 22% maybe even 25% if you’re lucky 18% if
(1:39:28) you’re not using as much leverage which would probably be the case in today’s environment for uh for us property certainly but we’re also not including mortgage pay down right or cash flow exactly that’s yeah that this is just the dessert piece that I talked about earlier the dessert piece which we’re very happy to consume yeah it’s taste to dessert but oh yeah as you eat your cookie it’s what makes us rich right all right Adam thanks so much for doing this it’s been I think I’ve been bugging you for a while to come on this show I think you
(1:40:02) have no this was fun um it was good to be here hopefully the audience can take something away from this um but I I genuinely am a student of this stuff and love talking about this sort of stuff so it’s been fun where can people follow your journey should we give them your website yeah I mean yeah yeah you you can sort of find my contact info on my webite it’s synthesis valuations.
(1:40:36) com I don’t know if you have show notes or something you can put that in we’ll put in the show notes yeah and then you can also find me on LinkedIn as well if they just search Adam R Johnson they’ll find you Adam N Johnson in fact I think if you go to linkedin.com and Johnson see what pops up no not the English English football player he looks just like it he’s also a convicted felon I believe oh is that a problem at the airport no well no I have an exess carard but 3100 Adam Johnson’s in LinkedIn try try doing Adam Johnson um CA CFA CBB oh yeah those are unique
(1:41:30) identifiers there you go look at all those letters I love the links in the short notes I’m Johnson CPA CA cbv CFA that’s so you’ve proven you’re smart I hope so and then yeah like I guess you just don’t well both in but done well both in real estate and business if you say so sure yeah I don’t know the numbers but you would no I mean I I’m sort of happy with what I have built right I mean real estate investing sort of one piece of it running my Consulting advisory business is the other piece of it um but I think between
(1:42:20) the two I can hopefully over the long term you know build my own destiny and that was sort of the Catalyst for all of it right yeah including quitting your day job and I remember the day you told me you you’re quitting your day job and yeah that was eight years ago that was eight years ago and it’s been a fun eight years and that’s why I was wanting to pull you on the show like real estate gave you the freedom give you the working capital to take that leap it did yeah in that sense that mountain has has been the gift that
(1:42:48) has continued to give because it funded the creation of the valuation firm and it continued to fund the the US purchases down the road so lucky perhaps yes but there’s that saying I’d rather be lucky than good any day of the week and if you can be lucky and also try to be good make smart decisions um take some lumps but still try to minimize your mistakes then that’s sort of the the best case scenario I prefer the definition of luck being the intersection between opportunity and being prepared something like that yes
(1:43:33) all right we’ll leave it there thanks so much for doing this Adam you’re very welcome good to see you thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.
(1:43:54) com also in the description as well I publish at least two to three videos a week here so subscribe if you want to keep learning from seasoned investors like myself and my guest and if you’re just starting out feel free to ask questions and comment below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor training.com

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(00:00) rainy in Canada’s population growth rents are flat across the country in Canada as international student interest has cratered how does that affect your investment hypothesis short-term rentals part two with experts Spencer and Ashley quote Mary sooner have more kids ignore the cost says Uber catalist Kevin nor uh big announcement and so much more on this week’s episode of the truth about real estate investing for Canadians my name is Rano your host and producer since 2016 and 300 plus episodes later all an hour long or more
(00:34) uh thank you to my listeners and for the kind words you’ve shared and thank you for the updates and your personal truths around your own real estate investing uh I appreciate that anytime someone tells me a story about uh how their Investments are going that helps develop the investment hypothesis of myself in this show uh in some Sumit related I did not know that so many of my fellow podcasters are no longer releasing new episodes uh many of them are my friends and there are some I believe who should stop a simple Google of the names of
(01:06) folks who borrowed tens and hundreds of millions and are going bankrupt uh that alone will let you know uh who gave them their platform and promoted them and some of them even earned Commissions in helping them sell what are now uh defunct Investments uh always I always follow the money understand how folks make their money um I’m always very happy to explain how I make money in real estate uh both as an investor and in doing business development for real estate for example I am a realtor in Ontario and I am and have another announcement to
(01:36) explain the US stuff so I always fact that into your screening process of who to trust and what investments you should be investing in I review many many many deals all the time uh now onto the news did you know that the FrontRunner to become our next prime minister of Canada said he would reduce population growth to match growth of new homes built and factor in health care access and jobs makes a lot of sense now I’m not here to discuss politics I just look at the trends from the polling data Pier po looks like a clear clear
(02:07) favor to be our next prime minister looking like a majority so again all I’m doing is trying to factor in where where things are going and how that should affect my investing because why I don’t really care to discuss politics with anyone I’m more interested in what this means for my clients and my business and my investments of course I always have the uh Source sources Linked In My Show notes again this was an article from the CBC uh again Link in the show notes uh now a couple problems uh housing starts across
(02:37) Canada are way down as building and development costs are extremely high it is real estate winter a lot of people are not buying all interest rates are still remain high new construction sales are low as the market needs time to digest these historic number of new construction condos and historic number of listings especially the small condos uh which could take you know one and a half two years per Benjamin tall de deputy chief Economist for CIBC uh I’ve again I’ve posted some uh charts if you don’t follow Dr M Moffet
(03:09) on Twitter I can’t recommend that you do enough uh because again he posts brilliant graphs and data and commentary on housing markets uh and of course things like International students housing starts anyways again I’ve got a link to show notes on some posts from Dr M Moffett uh for example Toronto Toronto housing starts this past year are are they’re above 2021 and 2022 but uh yeah I don’t think anyone’s confident that will last for very long uh not with uh sales being quite low especially in new construction sales being quite low
(03:45) across Canada now combine that with Flat runs across Canada as demand from International students have cratered again I posted a um a snap a screenshot of a post by Dr Mike Moffett uh from early September how international student reforms the federal government have made earlier this year have provided substantial rent relief uh we did not see rent spikes across Canada uh rents are actually quite flat over the last 12 months from August 2023 to August 2024 and so if you’re not familiar with that happened the federal government
(04:20) wants a 35% 35% reduction in the number of international students and uh the stat that I’ve seen is that applications are down 45% so uh um yeah the Global Mail is reporting how Google searches of student housing near universities in watero Hamilton and Kingston are down 46 to 55% so we’re seeing data points that that several data points that reflect a declining interest significantly reduced interest by International students um so personally my investment hypothesis is forever changing uh I’m constantly learning and uh that shaped my own
(04:57) experience and what I hear from Real Estate experts like real ones and I’m always looking at what they’re doing with their own money my hypothesis is focused on cash flow long-term growth in rents and prices if if that was news to anyone for the local investor knowing that rents are flat and in the current market again this is current market all we can ever do is understand what’s in the current market and make predictions with what we have to predict with and reduced demand from International students and immigrants
(05:27) what do you think will happen to your cash flow uh your rent growth and appreciation over the long term right I still have a number of properties in Ontario Canada so I’m concerned I’m concerned if lowering interest rates and lack of Supply will will be enough to push my prices up because yes i’ absolutely love prices to go up and rents to go up in Canada especially in Ontario where my properties are um however with economic and immigration landscape the way it is should a Canadian investor invest their Hardware earn money into local markets I
(05:57) personally know I would not deploy more Capital into long-term rentals at least were in the in the markets I invest in Ontario now on the other hand legal short-term rentals in hotels that’s another matter uh as a small airb operators get squeezed out by governments um they’re incredibly out of favor even though they cause very little disturbance to long-term rental markets anyways this is exactly why we have experts in Ashley and Ashley and Spencer back on the show but before we get to them can you believe Kevin ear said take
(06:28) my advice get married sooner have more kids family is everything that’s what it’s all about do you agree and now I’m just quoting exact the exact post on Kevin’s Uh Kevin rers on his social media page specifically his LinkedIn again I’ve post a link to his LinkedIn uh on sorry his his Instagram his Instagram anyways again I posted the the link to his Instagram in the show notes Uh Kevin explains how he wishes he would have spent more time with his kids when they were young and I couldn’t agree more I’ve interviewed hundreds of successful
(07:02) entrepreneurs and investors almost all of them would agree with Kevin in how parents will can never get back those wonderful years of development while kids are still young my decision to make my portfolio more Passive by delegating to share U who ass managing my Assets in the US free me up to do more to spend more time doing what I enjoy which is my work including this podcast and helping hardworking communs their towards their on their Journey towards Financial Peace and uh when I’m not working I love to spend time with my wife and my kids my
(07:33) kids are a lot of fun at the age that they’re at they still think I’m cool and they laugh at my jokes all the while with my real estate portfolio especially in the states uh I’m still a direct owner uh which is what I consider and what I consider the best asset class which is real estate cash flowing real estate while maintaining 100% control while someone else does all the heavy lifting for me uh shares business is exactly what I envisioned for my own Professional Services as a realtor and guing my clients as a coach because I always
(08:01) wanted them to have uh as easy as possible real estate investing as operational easy as possible and to be as passive as possible in Ontario but that’s just not possible in this market landscape with affordability being so bad when so many people can’t even afford to cash flow enough to afford a proper manager uh then you add to that rank control so then your your cash flow doesn’t ever get better while inflation just gets worse and of course tenants have all the rights in Ontario and uh that’s what I’m hearing from my
(08:31) BC friends as well um now I’ve got the big news to share that I’m incredibly excited about as you know my real estate Journey started way back in 2005 when I became a novice landlord and then I got serious in 2008 when it worked out really well uh that’s when I began formally learning about real estate investing treating like a business and since then I’ve always had my eye on landlord friendly USA economic fundamentally in landlord rights it always made a lot of sense there’s better cash flow more stable tenant laws
(09:00) as in like in favor of the landlord Etc but the challenges of getting financing building a power team I could trust finding the right deals IM managing properties from across the border just kept me from jumping into that market well I’m thrilled to announce that I’ve recently taken on a new role as head of Business Development for in Canada for share this partnership is a GameChanger for anyone looking to invest in the US market like I have always wanted to do like I am doing now uh I bought a house in San Antonio Texas just recently
(09:27) shares limitated all my hurdles that once help me back financing we have the contacts one of them just emailed me today they have now they have now signed 4,500 lenders ready to lend to Canadians deal sourcing including including off Market check ongoing Property Management we at share can handle it all with share I get to be a passive us landlord uh I’ve been a landlord for 20 years so I have plenty of experience I’ve own over 40 properties personally I don’t enjoy it and will gladly pay someone else to do it while I get to go while I still
(09:59) get to remain a direct investor uh with 100% ownership and full control 100% of the equities mine I the pay fees it’s dream contr true for me as a nerdy investor I think you all know I’m a really nerdy investor I’ve comparison shopped so many deals over this even just this podcast of well over 300 interviews again I get to keep 100% of the equity and that’s exactly how my 45 past clients made uh the ones who made a million or more in investing in real estate they had control 100% of the equity they gave none none of that
(10:30) control or Equity up so if you ever been interested in us real estate investing now is the time to take a serious look uh if you’ve been waiting for the perfect moment to invest in the US but didn’t know where to start this is probably it the best place to start is uh my website i. Shar sfr.fr Day morning we have limited seats in person and they always sell out so check it out buy if you want to come in person make sure you buy a ticket ASAP again they always sell out if you if the $30 entry fee is too much for you I’m
(11:09) offering another free training event in late November obviously it won’t be nearly as in-depth and detailed as the US investing Workshop but at least it’s free and that’ll be in late November the writing’s on the wall I don’t see much of a future for everyday investing in Canada when deals are that we’re finding at share are just simply better on to this spe show uh a topic that I’m a big fan of indirectly we’re talking about avoiding long-term rentals in tenant friendly provinces like Ontario hence we have Spencer and Ashley
(11:38) Giles back for round two if you don’t already know vacation rentals are a business 247 businesses uh for some airb managers Airbnb managers like Spencer and Ashley who are are pretty for forward about that uh so they’re back to share more we’re going to dig deeper into the strategy because last time we only had an hour this time we’re back to dig to go you know level two get more into the details of the strategy including operating and owning airb bees in the US their management portfolio consists of over 50 properties some of
(12:09) them are their own the vast majority are for clients and they’re are quite spread out uh they’re all over they’re all in great markets across Ontario and Upstate New York which they more recently expanded to just the last few years so they have a lot of diverse experience to share they have a l they have a lot of experience to pull from in terms of what the best practices are and I always love learning from people who know their stuff who are doing it who put their own money into it and yeah my experience was
(12:37) the people you want to learn from just to follow Ashley and Spencer their website is I sure said Spencer and ashley.com Spencer ashley.com and their Instagram is also Spencer and Ashley on Instagram please enjoy the show [Music] about yourselves sure so we’re Spencer and Ashley Ashley and Spencer will go either way um we are Canadian Real Estate Investors uh predominantly in the short-term rental market we have a short-term rental management company which is travelux so we co-host basically for owners in the short-term
(13:17) rental space and then we also own a couple short-term rentals in Niagara and a little bit in Upstate New York very cool and then your Instagram handle is literally Spencer and Ashley yes very easy yes very easy Adam doesn’t follow you but this is Adam’s account it’s not my account so so again so we you’ve been on this show before so we’re here for like a part two to expand on everything um uh before we recording we talked about like the three levels of being in short-term rentals can you explain what that is I
(13:50) don’t think everyone definitely not understands that there’s definitely like multiple ways that you can get involved and there’s just different ways that you can go about it obviously the purchasing of it and you know doing everything with your capital in where you’re acquiring a property and then turning it into short-term rentals you know that’s one then there’s the Arbitrage model which is where you’re going to landlords so you don’t actually own the property you’re going to landlords and getting them to agree to letting you kind of
(14:15) suit on Airbnb or other vacation rental platforms so you know you’re you’re usually putting your your smaller down payment of rent first and last maybe security deposit and then the cost of furniture so it’s a good way for people to get in and um get their skin in the game for a lot less money and then there’s the management side which is the one that we we do we don’t do any Arbitrage at the moment uh and that is just giving out our expertise and time to investors so the investors are buying the property they’re Furnishing it
(14:45) they’re putting all the capital in and then they’re essentially handing the keys over to us to run it for a management fee um so it’s very little Capital involved for us as the management um but they’re getting more of like a hands-off experience right they’re getting the revenue management they’re getting the the cleaners the complete operation system our expertise without having for them to to kind of dive in and um get their hands dirty there so for the novice’s exper uh per for for their knowledge so what’s the
(15:14) day-to-day for your for your client then for our client uh we try to make it hands-off as possible so they typically come to us when they’re they have a property it may be furnished it may not be we kind of help them with like our supply list this is what you need to get to the property so they have to do upfront work on getting the house furnished and um getting all the supplies there and we help we have resources and like an onboarding specialist who we helps guide them and then once the property goes live like we
(15:42) like to make it very hands-off some owners like to be a little bit more Hands-On like they want to know about maintenance items or about supplies needed but we have some owners who we speak to every 3 four months and they get sent their money every month with a detailed statement breaking down all the income coming in all the expenses and they obviously get the diff difference they see our management percentage coming off the top as well and they get the money directly into their account every single month so it kind of depends
(16:11) on the owner itself and that’s why we actually as a company have an owner Avatar so we’re going after working with certain types of people because it makes our lives a lot easier when they see us as the subject matter experts and they let us do our job for them mhm yeah tell us about tell us about your avatar so yeah explain what an avatar is and then tell us about who that is sure so an avatar would be someone that you’re looking to either work with or um just like either personalities or like someone you’re trying to Target to to
(16:41) work with that you’re you’re looking for like an overall profile of a person so for us with our owners it’s more investor investor mindset um who want to be more hands-off so someone who typically is in like maybe different areas of real estate and just want to get into airbnbs but don’t want to run it themselves see that property as an investment property to make money and not like a vacation home or a second home because they’re not as emotionally attached to it because when our owners are emotionally attached they tend to be
(17:09) a lot more involved uh and that just allows us to be able to do pricing the way that we need to do it getting the supplies there that we need to do just getting approval for any bigger items that may be needed and otherwise they trust us to run it to have a five-star review and make them the most amount of money because the way that our model is is the more money we make our owners the more money we make right so then someone who wants to use the the property as well that’s not your client we’re okay with that to an extent like obviously
(17:39) you have high seasons and low seasons and you know you have Gap fills and calendars so like you know we definitely don’t recommend our clients to rent out their place on like to use it themselves on like a long weekend because you know a lot of the times we’ll say like hey you know this is your property and you can do what you want but just know that you’re giving up you know $1,000 to $1,500 a night when you’re going to stay here so so it’s that we we’ll always try like not try to talk them a lot of but well certain properties certain
(18:04) properties are less but like you know again I’m talking about like kind of like our our our higher-end portfolio ones where we’ve had people say like hey you know what’s the opportunity cost here and we’ll tell them and most of the time they’re like yeah okay we’ll pick at different time so you know the the benefits of owning a vacation rental and we even get to benefit this with our especially our ones in elville is you can go down and use it but we as owners are more last minute cuz it’s so close we’re basically saying hey if it’s not
(18:31) booked by tomorrow we’re going to go tomorrow we’ll just block it off for two days it’s a week it’s a week day it’s you know not as big opportunity cost versus blocking a weekend during the middle of ski season is like a no-o zone for us because I know that’s thousands of dollars that we’re missing out on and you know I’d much rather have that towards the investment than to go down and and ski a 60-second hill now you uh we you touched on Rental rent rental Arbitrage that’s the term yeah can you explain uh why you don’t do
(19:02) it like I just see like for a while I saw quite a bit of marketing on selling courses and businesses that that did that yeah I mean there’s it’s not that we don’t like it I I think it’s actually a great opportunity if if you can get involved it’s just we kind of naturally gravitated towards the management we found it was a little bit easier to to scale and and and to move with um essentially you’re just you got to convince the landlord that you’re going to be doing this you can’t you can’t lie to them and say I’m going to rent it and
(19:32) then all of a sudden they find out it’s on it’s on A or B and B um you know we just found it more appealing that instead of having to risk putting money out with rent first and last month and and Furnishing it you know why don’t we just manage it have our clients put all the Furnishing in and then they they you know they do the entire investment with our guidance of course and you know really kind of make the same amount of well it’s a higher return really but it’s same amount of cash flow if you want to look at it um like I said
(20:06) nothing that we you know we we’ve even looked at doing Arbitrage especially like down in the states we still like the model it’s just we’ve always gravitated towards the management side and the scalability for management is faster as well like you can take on 10 clients all at one time whereas it’s a little harder for someone to find like 10 units and have the income and being able to furnish all 10 units at one time and get that all set up whereas our overhead for the company and for management especially as you start out
(20:35) is very very low so you can take on all of that business all at one time yeah and like obviously like anything there’s regulation changes you know if you’re in a specific building that originally allows it and then the HOA votes against it and you know now you’re stuck with all this furniture that you you might have to get storage for like those are all things that we kind of factor in as well um but I mean that’s you know that really only happens to people that don’t do the research and they buy in something where they don’t realize that
(21:02) hey like this could happen and they get stuck with it you know the people that do really well in the Arbitrage they do their homework and a lot of the times they’re getting all their money back in six months six to 12 months anyway so they’re really you know after that first year they’re they’re in it with essentially no money attached to that and they’re making good cash flow so you know there really isn’t like the best way to do it it’s really what you’re comfortable with if you’re good with negotiating with landlords and getting
(21:27) them to you know like you lease it and you can get a good rent that’s fine I mean yeah you’re still dealing with the landlords but on the management side you know it’s I wouldn’t say like there’s definitely downfalls to that too now you’re dealing with like you said owners and people that can be emotionally attached to the property um and that’s why our Avatar is straight investors that are looking for an Roi and they’re not as emotionally attached to it because we say like hey you should add this they’ll do it right and they see
(21:53) the return in it and we make sure to highlight it like hey you added this hot tub last year January the year before you didn’t have it you know you made Seven Grand this past January I just want to congratulate you cuz you you went over 10 right like I know there’s more track records and other things that come involved but I guarantee you that hot was a big factor right and just showing them that like hey you know you trusted Us in making that purchase and here’s the ROI that kind of backs that now the next time we we we go and say
(22:19) hey you should add this they won’t they won’t question it so that’s kind of the Avatar that we’re looking for the people that will see the value at and they’re okay to reinvest back into the property as well yeah we we were just this past weekend where we rented my friends rented a a farmhouse in AIA I’m I just stayed and book it but then literally my buddy that we’re driving up with is asking is there a hot tub and I was like I’m okay that there’s not a hot tub because we got a really cheap room rate perfect yeah so you know uh but
(22:49) yeah it seems to be a good thing to do to hot tubs now I want to talk about the like the darker side of of this business uh like there’s many reason like I’m an extremely risk verse anyone who this show knows I’m extremely risk adverse I I have a million reasons not to do anything and they’re all not always rude in reality that’s why we have experts on the show like yourselves to talk to it uh like for example like a like the cottage that we go to uh that our friends own this past Christmas they had the the septic was
(23:19) backing up right and so the owner had to go drive up and he’s pulling animal fat and feminine hygiene products out of the out of the whatever on Christmas yeah this is not my idea of fun because how do you even find someone to work on Christmas to deal with something like that yeah I don’t know how much you have to pay someone to deal with that at that point if there was guests there I would be like I will pay you triple cuz it’s always has to do you’re in Hospitality right like you’ve kind of left real estate we say this all
(23:48) the time once you get into short-term rentals you’re in Hospitality hospitality is 24/7 7 days a week there are no days off if a guest messages you at 10:00 at night you should answer like if a guest messages you at 7:00 in the morning you should answer on weekends on holidays especially on holidays and weekends right so um yeah and sometimes you have to be the one if you’re the owner of the property to go and fix the problem because a guest is there and that is definitely a big downside and finding trades to even go and do it that
(24:18) you trust has been can be very difficult in certain areas yeah forone says that uh airbnbs and vacation rentals are passive income it’s completely false it’s not it’s a lot of work right it is it’s like we get joy in it because we get a lot of families that come down and it’s it’s how you make that guest feel when they show up to the property like we do a lot of like surprise gifts and kind of try to go one step over and above like if they’re down celebrating like a birthday or something we’ll we’ll deliver cakes with their name on it a
(24:46) bottle of champagne like small things like that where they don’t expect it so the second they show up to the property they’re like wow you know and and creating very unique properties where they’re creating memories with their families like that’s kind of what we’re trying to portray to all of our guests but the dark side of it is that when it things go south and they’re having a bad experience like it’s it’s not only a lot of work in a pain but it also feels bad right like you feel horrible I generally feel horrible when someone does not have
(25:13) the experience that we try to give them so yeah like I said we’ll do whatever it takes to to try to turn that around because I guess you know maybe it’s just the human nature in us but we travel a lot and we go on vacations and we know how important that is to us so when someone else isn’t having that great experience that we want to try to portray you know we kind of put ourselves in that shoes and I guess that is kind of the dark side because there’s a lot of days where we just like we we we get brought into that right we feel
(25:41) that like hey now we’re having a bad day because they’re having a bad day and when you have 50 plus properties there’s a lot more things that go wrong and can go wrong so it’s hard to kind of detach yourself from that without not caring and the things that go wrong like to go wrong when you’re out for dinner at a family event at the movies you know New Year’s Eve New Year’s Eve you know that’s when they tend to go wrong and you have to get on the phone you have to you have to deal with it but I think having a strong team is crucial for any
(26:13) short-term rental investor and I love that I love that you say it what I find is with novices they don’t want to know what a strong team looks like that’s fair like before we were recording I was talking about my friend who you know who works in Tech sales in Toronto and her partner failed her including their team so she’s up there on weekends on her hands and knees refinishing the deck and trying to figure out how this make the creen the the pool go back to clear versus this screen right now MH like I can’t imagine what your well the reviews
(26:42) are pretty bad on the yeah it’s the scorecard can you imagine like what your reviews would be if you’re pool screen I would stop renting I would stop renting eventually your listing will get suspended if you have enough enough of those bad reviews right 4.1 is pretty low isn’t it for every 4.2 is usually in suspension range so they’re probably very close to Airbnb saying get your together you have we’re going to give you a few other chances but if this continues to go this way they will suspend your listing and you have to
(27:10) appeal it and it usually blocks your dates for a few weeks and it can get messy right so you have to usually nip that in the butt that’s why I said like if you are going to hire someone to manage your property you there’s there’s a few things that you want to ask them about on how they run their operations like I’m a big Revenue management pricing person so ask them about their pricing strategy do they have an extensive pricing strategy do they know what they’re talking about are they looking at lead time which means how far
(27:35) in advance that average guest is booking um for that each specific month what kind of discount strategies do they do in high and low season like those are things that I would ask if we were to hire it but also what does your operations accountability look like you know how do you work with your cleaners how do you hold them accountable how do you ensure that they get the place set up so the pool’s not green when your guests show up how do you you know how do you hold them accountable to that right are you just trusting them do you
(28:00) have a system in place you know good management companies will have answers to all of those things um obviously everyone’s human things are you know things can break and things can fall apart mistakes can happen but you know that’s another question I would ask is you know how do you handle a bad review or a bad situation with a guest and just making sure that if you are going to pay someone cuz you’re usually going to pay anywhere from 18 to 25 plus perc of gross rents with management um you want to make sure that they’re adding value
(28:30) that they’re going to bring you in more money than if you were to run it yourself right um but you’re not a miracle worker no no and you probably could have bajillions of clients if you service like Moka and karthas now actually made the point that you want your your the ideal client and it sounds like probably the more successful investor separates personal use from business mhm so can you explain why you’re not in MCO are you in cors we are in cors yeah we’ve got over 10 properties there and growing quite quickly but um so it sounds like you can
(29:05) build a business in corus not so much mccoa we’re not saying we can’t build a mccoa I think what I said before maybe it’s harder well we’re looking for one key thing one person yeah so we just said we don’t like we have very strict rules for who we work with but we hold ourselves to a very high standard as well right so and the people we work with and the skills that we bring to theable and we can’t if we’re Spencer and I aren’t phally in that location we need another us who is there who can be the boots on the ground and run it properly
(29:37) like we would love to we get people all the time like on Instagram being like hey I’m in this area I’d love for you to manage it and like I really appreciate that but we don’t have any of our systems set up up there and it would be irresponsible of us to just say yes let’s just do it for the money knowing that we’re not 100% confident that we could give our best best service without properly going through the due diligence of finding our territory manager who’s our boots on the ground of finding and vetting and testing out cleaners because
(30:08) cleaners are integral to the business right there’s cleaners who clean just for the money and there’s cleaners who clean and care about the property who will spend the extra time or say hey your pool’s green I’m going to stay until it’s fixed or I know a guy who can help you and they’re so invested and that’s what we want is people who have vested interest in the property without having ownership because they care and we will pay more for that and I find a lot of novices will be like what’s the cheapest cleaner that I can find and
(30:36) then they get upset when their cleaning reviews aren’t great or their house is being isn’t being taken care of properly well they’re not reliable typically not reliable well that’s the worst then you have someone showing up to a property not clean or not clean properly this is Hotel standard clean right and we have very like Spencer already said it we keep we hold them accountable and we’re very strict with them but we also pay a premium like we’re not paying $50 at clean we’re paying almost over $200 for some of these people per clean right
(31:03) plus garbage removal plus uh pool maintenance if needed right you need someone who’s maintenance who’s able to go around at a moment’s any moment’s time like we’ve had um AC units at 8 9:00 at night cut out in the middle of July recently and we’ve had a guy there within half an hour mhm he doesn’t work for us he’s just a contractor but we pay him well to do this I just want to emphasize the point point that you brought up is like you need to separate investment from living from use like for and again I find it often comes with
(31:37) with novices um and again it’s just really just lack of Education I very common I get people calling me asking for they want Florida and then I’m like have you Googled Florida Insurance yeah right and then once they do and then like okay now once you’ve done that Google yeah Florida 30-year-old condos right because because the a Condo building collapsed back in 202 killing 98 people which Miami uh I forget which it was a Cal City I for which one but like I just can’t believe that happened in America that that a building
(32:12) collapsed my point is that um separate recreational use from investment MH because with with a different lenss it tells you different things I love Florida I’ll go to Florida I’ll go rent I love M skoka Cottages but them I won’t buy one right I’m glad to pay thousands of dollars that we do for a week so that I don’t have to deal with the maintenance and um I’m not in that business and my experience is similar to yours that it’s hard to build a team in certain areas definitely and that’s what I’m trying to extract from you with
(32:44) being experts is if if you uh you know for for listener if they want to get into this business strategy go to areas where you can build teams yes 100% And typically we start if someone’s starting out in this business like we always say start out where you are like in your own backyard or somewhere close to you or an area you know really well because you’re there and you can have a bit of control until you kind of get it together and you know what you’re doing yeah learn the business exactly and we do like working with owners even with investors
(33:13) it we don’t mind that they want to go use the property from time to time like Spencer said because we want them to have pride of ownership we want them to see this as an investment but be proud to be like hey I’m coming during the week in October which isn’t as like High season um and I’m bringing my friends CU I can’t wait to show them the property because if they have pride of ownership they will invest back into it they will maintain it because we don’t have ownership in this property we can say hey you need to do X Y and Z but they
(33:41) could say no yeah even our JV Partners that’s like part of it it’s like yes it’s like you know what you might be giving up 1% or 2% on your cash on cash return but you get to go down and use this thing you know obviously we’ll we’ll we’ll we’ll steer them away from those weekends but if they go down with friends like it is that emotion that like hey we we created this unique space this this really cool thing that people come down and use and love and it makes money MH can we show some pictures uh yeah uh we have to
(34:10) go I don’t know if it would be on our uh on our feed do we have uh anything on our Instagram be more so yeah cuz I I think I’ve seen well like this one here the middle one that’s from the balcony of our one in N Lakes one of our uh with a JV partner so yeah this is off the master the master suite um this is what people wake up to in the morning right and it is like you know something small but like again these are like the things people go out there with a coffee in the morning and the sun rises just to the left of myself which
(34:45) also overlooks Vineyards so you go out there early enough it’s it’s quite a peaceful morning and that’s why we love these properties in Niger and the lake where you you’re not staring at houses you’re staring at Vineyards right right yeah it’s totally different feel when you have a coffee on a porch staring at a Vineyard than and we don’t typically stay at that property it makes it does really well and we use it very much as an investment and we live like 20 minutes away but just experiencing that uh I was like I
(35:14) am so proud of this house and I’m so excited that other people get to experience this very cool and it it financially does really well what’s so what’s like a weekend how do you guys July and August are definitely your highest um we’re we’re over 1,500 a night on the weekends over a th000 during the week um that we’re getting like this this property here it brings in um over 150,000 gross a year that’ss about 65 to 70 a year the last three years it’s done in and around that um we’re we’re going to make some additions to that property I think
(35:51) though to uh is it yours yeah so we’re well it’s a JV so we’re we’re yeah so we we have ownership in it um but again we the way we had it is they were the the money partner we were the operations so we took care of a lot of like the renovations and getting it ready and we do we run everything so what kind of additions are you planning well uh there’s two things that we want to do uh that we’re back and forth the the main one is we want to do a sport court pickle ball specifically it is like a super popular sport and our guest avatar
(36:22) for this property is 40 plus year old couples a lot of families that we get um because it is a higher nightly rate that’s typically the the guest that we’ve seen come through in this space and we know that you know 40 plus year old people they love the sport of pickleball but also families love being able to have that activity on this property because a lot of people do spend a lot of time at this property because it has the hot tubs the saunas The Vineyards it’s got a nice outdoor patio um so spending a lot of time on
(36:52) site yeah like they’re coming there to be immersed in The Vineyards right yes they’re going to Wineries and they’re going into Old Town haager in the lake but they’re also spending a lot of time here in the mornings and coming back here for dinners and um just taking in the scenery because they’re paying for that right that’s what’s kind of nice about creating these types of places is like you know this isn’t a place where people are dropping their bags off and leaving like we’re creating an experience that they’re going to hang
(37:15) out at so you know the the pickle ball Sport Court we want to do like a basketball in there as well um just that gives that little extra uh influence for people but also you know they’ll get to enjoy it a lot more as well and uniqueness but we do there nothing like it yeah we do have a barn there that’s pretty worn out that we’re considering turning into like some sort of games room hangout space it’s got like one of those um sliding door garage doors that we want to do like a glass one with a pad that overlooks The Vineyards so
(37:46) that’s probably three to yeah three to five your play yeah we we think the the sport card will definitely bring in uh a higher Roi but the nice thing about that and what really excites me is there’s no data on it right we can’t really put uh an exact marker and how much more it will bring in but that’s what excites me about it because no one else has it is that like you know I know that it’s going to bring in more money but what excites me is that no one else is going to have something like that so how much
(38:15) is the exciting part this will be interesting to follow uh before we recording uh we were talking about how uh a lot of people are on the news for the wrong reasons um I’ve I’ve talked about it many times one one of the lessons from the financial crisis was whoever went under usually was because they couldn’t support their debt right U and then in today’s news it’s people generally hard money loans and they can’t support it now so my question to you was uh how do you finance a short-term rental it’s a lot tougher in Canada now
(38:50) um most lenders won’t touch short-term rentals I know someone like the B and C lenders will I I know that they’re talking about ch changing that like I said we’ve moved more into the states for that reason cuz they’re a little bit more accommodating when it comes to short-term rentals um but yeah that that is the challenge when you are purchasing now is you need to be upfront with the mortgage lender on what this property is going to be I know there’s a lot of people that will say you know what I’m thinking of moving in here and then they
(39:20) change their mind but again that’s that is not something we would recommend doing because if they do find out you can get in a lot of trouble for that um so that is the the Big Challenge I’d say in in Canada right now but um I would just say talk to your mortgage broker see what you can do before you uh before you purchase anything if you are going to go that route right cuz for me financing drives a lot of my decision- making for for investing um like I’ve I’m self-employed and I’m capped here in Canada and everyone runs into a cap
(39:52) versus in the states it seems to be much there’s way more options mm uh so what what would the what would financing look like in the states well yeah a lot better so for for our allocate bill on better well yeah CU that’s the thing like these these ones weren’t necessarily they were value ads but we were never going to go in and refinance and pull money out they were more value ads in terms of they were vacation rental value ads so we we we updated the outside we created more like unique things we weren’t doing kitchens
(40:23) and bathrooms and bedrooms that kind of stuff where it was really going to increase the value of the property it was going to increase the the value of the income that it brings in um so for yeah for that because we bought it in 2020 and 2021 when interest rates were super low uh we got like 2.2 and 2.59 but the beauty of it was it’s 30 years it’s not five advertised it’s it’s 30 years so we we have that rate for as long as the property exists right so that’s what we like cuz it’s predictable but that sounds like a that’s very cheap
(40:56) in any context yeah that it’s not like that now like you know your your interest rates are triple that but at the same time you have the ability to lock that in for 30 years so if rates do come down or you’re happy with something you have the ability to do that so I know a lot of people now like the exciting time the exciting thing about that is interest rates are higher yes the numbers might not look as good on paper right now you know for talking just vacation rentals this is really any investment but if you can make sense of
(41:26) the numbers and still provide some cash flow and still be comfortable with the rates now and maybe even going up 1 or 2% like obviously you want to hedge both sides of it if for whatever reason it does come down a lot of the times that means value will go up you can pull some money out if you want to refinance or you can just lock in a better rate and improve your cash flow position so you know a lot of people are getting scared away from the rates right now but we’re looking especially into the states for this because I personally we personally
(41:53) see a lot of opportunity and uh in that where it’s like yeah okay you’re not bringing in $5,000 of cash flow every single month but you have the ability to add value add to the property increase amenities on that side of it but also if rates do come down you know there’s there’s definitely a very big win scenario there and short-term rentals are very funny in the sense that um in your typical like when you’re going through the numbers to see if you want to purchase a property as a real estate investor there are some airbnbs or short
(42:23) ter rentals that won’t pencil the way that you want them to pencil like on paper but we know based on our experience that we can look like this is in a great location location is huge right we can put in some money because this is a long-term play like I’m not expecting to get insane cash on cash return after year one short-term rentals is a long-term play um and you know you can bring those those numbers up with different amenities adding into the property we reinvest thousands tens of thousands back into these properties
(42:54) every single year because you need to keep up with competition around but if you had looked at some of these properties and looked at the numbers I don’t know if many people would have really bought them if they didn’t know how to get these up to what others in the area were doing yeah the one property we looked at in elville recently oh no no no this is like the one we ended up buying um you originally we were going to do it with someone else and they’re very well-known investor in the area and like they just you know we
(43:22) showed them the numbers that existed but we were saying like hey like the good news is there’s a ton of opport people don’t know how to take photos in Aliceville they don’t know how to Market it they do not know how to price right and there’s a lot of missing amenities that we can add to really bring this up but it’s hard to just say that because I guess yes it is speculative because you are being the leader in that industry but we’ve seen how that has impacted other areas where people have already done that so we tried to bring that data
(43:49) to it but it I see how that will scare even the most seasoned investors away because it does seem speculative but sure enough we still bought that property and end up being like a very very good investment because of that but there is that risk of like you know we were 99% confident that it was going to bring it but there is because there’s no data in that area supporting it you know I can see how it would scare a lot of people away right but the price point is a lot less risks than yeah that too right you’re not buying a $1.5 million
(44:17) property you know your 5600 Grand right like it’s it’s more feasible there and to your financing question I know we didn’t really touch on that in elville because it’s so close to the Border we were able to get 80% LTV So 20% down um you know there was a little bit more fees involved but um yeah we were able to to only have to put 20% down because they do the crossb banking so rbcd for example oh you still got Canadian mortgage yeah from Canadian bank but they’re us division they were able to use your Canadian credit because there’s
(44:47) a lot of Canadians that have invested down there was so low yeah can you scale that though like whose credit are they using your America your Canadian credit yeah you can only do that when you’re I think you’re close to the board like we weren’t able to do that down in Florida but once you have property and you’re on tile in the US then you can get your ittin anyways which is basically a tax identification number and then you can start getting more favorable rates in other areas of the US using that too funny I think there’s more Canadians in
(45:14) Florida than anywhere I know they’re tracking the Border rather than like where the Canadians are I think Florida wanted yeah 75% LTV cuz we had no we had a property in a contract I mean the rate was higher though the rate was higher than if you were obviously a US citizen with an SSN and you know um it was 75% but then they wanted a $110,000 fee as well yeah the fee was higher back end fee it’s definitely you know it’s more skin in the game for a Canadian still versus if you’re you know if you have a really if you have a credit record or
(45:47) somehow get a Social Security number and have you know good built-in credit down there they’re definitely a lot more aggressive and you can also do that with uh Us credit cards like start getting into uh you guys know this game abely like yes from the points and Miles side of course but even outside of that if you start getting into us then you start building Us credit history and then they will give you a tax identification number and then you can start using that to actually purchase properties at a more favorable rate yeah so you don’t need to
(46:13) just purchase to get it and you can do that you know there’s it’s a bit of a work workaround but you can get that without having an itin or an SSN like you can get a Us credit card you need a an address and stuff in the states of course but you can get creative if you have friends that live down there just get it sent to there and you have to open a bank account but you’re you can open a bank account easily um do you have any pictures of the elville property on your IG know we probably do if you just keep scrolling I’d have to take a look but
(46:43) uh I don’t actually remember I know I know we do eventually I just don’t know how how far down you’re going to have to go you guys talk about it more often uh I don’t know we do talk about it maybe just not like all the time and we love like the travel side of it so you’re going to see a lot of that on our feed this is why we do it right because we want to be able to go experience these things we learn a lot when we travel we stay at a lot of nice five-star hotels and we we get a lot of hospitality tricks from that but
(47:13) do we have like a our personal Investments we did that we talked about that is it in that one though or no I just there there is there is a I want to see if we have it on here sure if we do 56 Grand oh 13 129 grand these are Big rent numbers we would have profiled our our elil ones when we rid the games room yeah that would have been October of last year but yeah so before we were recording we were talking about like what’s your next property can we talk more about elville like how do you like how do you get into it what what does
(47:57) the property look like so yeah the the the challenge I wouldn’t say the CH well it is a challenge with elville is that it’s a small town and there’s not a ton of Supply that’s on the market but they have tons of visitors don’t they tons of visitors it’s a it’s a tourist town so like that’s what we like about it is that the reason why we’re bullish there is because majority of their businesses the restaurants I want look at how many visitors they get cuz I’m sure it’s an obscene number yeah well it’s especially
(48:27) it’s a weekend town right you get a lot of people from you know Buffalo area Canadians especially and then you get a lot of people from like Ohio like anywhere Canadians tons of Canadians it’s not far now it’s not far at all for someone for the west and tono it’s almost the same as going to Blue Mountain in terms of commute I’d say it’s pretty close once you get over the Buffalo border you’re about an hour an hour away so yeah it’s it’s not super far but like we love it because it is a tourist town and more than likely not again going back to
(49:00) the regulations they’re going to be in favor of it I know they’re talking about um bringing in more of a a policy for it because right now there’s the Village area and that’s pretty strict uh in terms of getting a license but it’s like a specific very very detailed outlined on their on their U City website of like what zoning that is and then all like the medium density and lower density zones which again outlines it with the streets it’s very you know cut and PAC are areas that you are allowed to operate in um without like you don’t
(49:31) need a license in those areas they just allow you to do it what I think they’re going to probably move to and they’re talking about but again it’s probably going to be a while from now is putting more of a a licensing program in place and the main reason is just to make sure that operators are doing their job and not just renting it to bad guests right because I think in any community that is the main concern is that you know if you have two residents living beside an Airbnb that person’s mismanaging it and
(49:58) there’s parties and they’re they’re up till 2: in the morning you know create creating noise and garbage and all of that that’s what really makes the headlines in the news about airbnbs right they don’t highlight the tens of thousands of families that come to the area and go to bed at 10:00 and leave the place in better condition than when they got there literally so I think it’s good that they’re looking to do stuff like that but um yeah that’s that’s elegant fing a nutshell so Holiday Valley gets 1.5 million visits yeah the
(50:28) ski resort itself that’s it yeah and they have they have a private one there as well a lot of members called called hont that’s where we haven’t found it yet but that’s where the the one that we we purchased is on it’s literally a 30 second walk to the the ski left yeah so tell me uh like paint The Listener a picture of what your next property would be like in elville or just in general in general because if you’re going to put your money into it I’m sure people will be interested I I they always say like don’t listen to what people are saying
(50:59) follow what their money’s doing yeah that makes sense um I think we still love on the lake like even the the property that we were looking at before that’s a variable mortgage and it’s still done very very well and that was an over million dollar purchase price um I think you need to really Target municipalities like Spencer was was just saying who need tourism to thrive that’s your elville on the lake like they have they big hotels cannot go into on the lake because they have to be historic buildings can’t be built over a
(51:29) certain height yeah but it’s really low height too very low height so they need short ter rentals they send us like thank you letters for operating every single year the city’s easy to work with and operate in um the purchase prices are high but we still find that that it works and then on the elville side like I feel like we would do both because elville is our offseason right so El’s High season is nagar life’s uh slow season and we like having a little bit of boat right CU you get the ski town and so they’ll never get rid of
(51:59) short-term rentals because they need people to come and stay and ski because that’s their High season um but I think the location in these places makes is really where it’s at you can’t go into nag Lake and find a subdivision and find the cheapest house and be like I’m in nagr the Lake I should crush it because people want to see what they came to nagr Lake for which is Vineyards so you want property they want Farmhouse they want country mhm and that’s what our properties would would give them we wouldn’t find something in a subdivision
(52:25) and then on the elville side they want to see like mountains and ski chalet and lots of wood inside you know that typical ski chalet Vibe close the Mountain close to the mountain that kind of thing yeah like we’re definitely big quality over quantity people I I would much rather have something that you know you are very proud of when you step in like every time we go to both elville properties because they’re both different properties where one’s got more more land but it like it’s got two if you want to call them Hills they’re
(52:55) mountains but they’re not mountains uh on both sides when you walk there you look right it’s just the Big Valley and you look left it’s The Big Valley and there’s a little creek that runs in the background so it’s very peaceful more tranquil versus you know our other one that’s right on the ski hill same thing it looks up at a mountain but you’re also in a great you’re in a much closer proximity yes you have neighbors left and right but you still have the views you do have that you step in there and you go wow and that’s kind of what our
(53:21) next property will be like is you know something where you have proximity to two things like ski sounds speech whatever it may be but also creates that unique experience of like there’s views there’s amenities on the property that you know people get to come and enjoy that you would be proud of when you get to go and visit and when you vacation my first time to elville I thought it was a I had no idea what to expect but like my context is like today’s Blue Mountain it’s but much much much smaller like it’s like two two blocks is the downtown
(53:54) but it’s so cute when you we were just there and you walk down there and you’re like this is such a cute town they really have it done up nicely with all the flowers all the little shops like people love that stuff I’m surprised no big private equity’s gone in and try to repeat something like a Blue Mountain there if it did your summer business would explode there’s a hotel going up apparently now um but again like not everyone want wants to stay in a hotel they want to stay in a chalet right like there’s always going to be that market
(54:20) for it and our homes sleep anywhere between 8 and 12 right and those people want to be they don’t want their individual homes they want to have dinners together they want to be in the hot tub together they want to be around the fire pit together right and no Hotel will ever take that away my friends are like that too like even when we still toay at Blue Mountain we Brenton arban B but more my point was like when you have a big Village there’s so much to do and then that attracts so many more people someone told me that Blue Mountain
(54:48) attracts more more visitors in the summer than the winter and that just blew my mind yeah that’s what we like about alil because it’s not just one High season like even the summer we had a very very good summer because again there’s there’s there’s hiking trails big mountain biking trails in that area so a lot of people come down for that but just being in that little town there’s lots of shops patios restaurants um they have they have a good golf course you would love it amazing gol yeah it’s very very difficult but it’s
(55:15) uh yeah really nice golf course right it’s got everything that a summer vacation town you know should have really because i’ I’ve talked to people about again our cotage country here in can in ont is like crazy expensive mhm cuz I I have some friends who are already saying they’re going to look in the states for a cottage and this kind of seems like competing with you but so please get get into get into um um I want can what do the property look like like tell me more about this target property that you have in mind in
(55:47) elville yeah I mean I I would I definitely would want to say something where it’s like more of a chalet Vibe but we we would say we probably do a hybrid between the two so like the first one that we got the more expensive one that’s right on the private Hill is 100% sh it’s beautiful right like you walk in it’s you know just under 3,000 square fet um oh that’s big yeah it’s it’s it’s it’s a good size um how much did you pay for that one 525 we got yeah I was listed at 589 we got it for 525 but that back in 2021
(56:18) price has gone up a little bit since then not crazy appreciation in elville but there there there is some but um wasn’t Callingwood that’d be a small fortune yeah it would be that’s what we’re saying we kind of joke this would be 2 million in Callingwood just given the fact that you can walk to the ski lift it’s right there so you see my point why more canans would be look into this for Cottages yeah especially if you’re going to use it it’s a it’s a I mean it’s US dollars but even then still it’s it’s quite reasonable property
(56:47) taxes are high there right I think that one were over 10 grand or actually right around 10 105 a year for that one and you get nothing for it you still have to do private garbage snow removal all of that um holy Hannah okay so yeah that they that’s probably why it keeps prices down too yeah for sure um but then our other property this is more in the country and this is the one that has the detach garage we turn into a games room it’s got the fire pit cuz you know the the first one is on a hill so it’s a big
(57:15) slant and you know putting in a fire pit there would be very difficult so on the second story balcony we’ve got the luxury Lounge set with a gas fire table so you can still be outside and take in the views and have the fire but we’d want to I would say probably try to find something in the Middle where it’s a little bit nicer on the inside shall like the first one but with a bit of property with views right um even if it’s just outside of town that’s fine cuz the other one is about a f- minute drive outside of elville versus this
(57:44) one’s right in it um s i just paolog you there does your company have a website that with pictures of these uh yeah I mean should we go to the Airbnb ad yeah we can go to the we can go we can go to that um how do I get it to you guys um we can Google if you just go to Al if you just like go to airb and Google Al bille you can go to our profile from there we’ll find the property oh for the listeners benefit we we do Post these to YouTube as well so we actually have the a big screen in our background where we’re going to look at this
(58:12) stuff you know we try to try to be like Joe Rogan once no I love I love it but yeah I would say what definitely an in between we like we see the ones that do really well there to have that the a little bit of land saunas fire pits elville is that what we do for where you have to search El I would just search like any week too because we’re pretty booked you’re not going to find it if you search uh e l i e l l i oh two L’s they there then you can just hit um yeah like flexible do a week yeah just hit search you’re good
(58:54) there all right it might be faster if we go right to um how’s this sorted actually while we’re in here how does how does well this you’re searching you’re searching any week so it’s going to give you um what’s available yeah it’s going to give you the majority of the properties that are available if you just want to I think these are important things for people to know I have no idea so cuz that’s that’s the thing too and like for your pricing strategies that like if you are searching for a specific date like I
(59:24) said if you if you have dates that aren’t available and guest are searching for that date you’re never going to be found right so you do want to be putting in a little bit more of an aggressive pricing strategy to to show up ideally on the first page right here we’re just searching for for any week so might make sense to go on the map here um so go kind of like right in this left side so see where Al Bill see go left of it yeah right see where that gray patch is zoom in on that there it is that’s the property so yeah you can click in on
(1:00:02) that so this is the the first one that we bought that’s right on the hill um oh wow that’s sub 3,000 square fet I think it’s like 20 2,800 gee this is nice so yeah we’ve done some recent updates to it but the nice thing about this is it was a previous Canadian owner so most of this came furnished so we worked that into the mortgage as well but we we’ve recently we redid the floor and the kitchen and the dining room but like we add things like this espresso machines coffee the kitchen was like that already pretty much minus the floor we we redid
(1:00:34) the floor and obviously we upgraded we added some we’re big water we big water snobs so we added like an RO system in there because it makes coffee better and the water’s safe to drink there it’s just people don’t always want to have to buy bottled water when they go in so and there’s still gorgeous some updates that we can make we redid that shower not intentionally the previous one was leaking m yeah that’s is the TRU about real estate investing stuff breaks and costs money but I mean really like what it is is
(1:01:03) like the back of the PAAD here like when when you’re out there you’ve got your hot tub and this and you’re overlooking kind of this view that’s that’s awesome it’s very peaceful and that’s that’s kind of what we want to try to do like not just a subdivision right you want to have views and how big is the lot it looks like there’s nobody nearby oh no there is it’s just cuz it’s on such a slant I don’t know the total size love that’ll give you a better indication of it there uh that one photo on the left like you can see you’ve got a property
(1:01:29) right right to our left and there is one to the right as well it’s just kind of hidden by trees what about back neighbor uh there well it’s more like way down that’s the only that’s like the the thing it’s like you kind of look on top of their house just because it is on the hill and the thing with this property is there’s so many levels there’s like six levels to it it’s like three or four steps down three or four steps down three or four steps down it just keeps going lots of stairs this is super cool and this was your first Venture
(1:01:57) this was yeah this is the first one we we bought and then we purchased another one in Aliceville probably like a month later this that’s outside this is probably the one we’re the most proud of um most proud of like getting people to come by like our friends and stuff if we go down for a couple days during the week but the other one that we have is the more profitable like net they’re both very profitable but the other one was just like actually if you so go back to the listing it’ll be faster like click on that like oh yeah
(1:02:25) click on the click on this picture again go back into the listing no no oh it go through your profile right yeah sorry go back to that where you just were go back to the property atam and then click on the uh click into that operators and then scroll down slightly see where it says let click on the logo at click on the logo again and scroll down all right now we’ll find the other ones um so you can view all oh you have a lot of listings you can go to view all listings it might be faster most most of these are management clients so like see where
(1:03:04) it says view all listings uh below that you manage that many mhm how What’s the total of properties you manage uh just under 50 just under 50 now but okay we have a bunch going live try to find the other El these are all like really pretty like there’s no subdivision houses there’s a couple but yeah we try to stay away from them oh yeah I see one there yeah yeah yeah okay so stay away from subdivision hoses I mean it’s it depends if you get the right deal on it it can make sense but again you’re dealing with neighbors
(1:03:37) and all of that it there’s more there’s more variables when it comes to that it’s probably going to be there on the on the right side there entire we got to redo the photos on this one I just remember that so this is the one we did with the games room um again this property we purchased for 240,000 um furnished as well and then that you can see the games in there on the top right this was just an empty garage space it was already insulated it had heat pumps in there so it was just like a a skeleton it was but it was already fully serviced
(1:04:11) electrical and it had the heat pump so air and air and heat so all we did was we hired a a a design company to to come up with this design and uh we did the work ourselves we went down and I’m never doing that paint job again but sa to say we we we did that ourselves and uh really all we added was you know the TV the pool table the basketball game you know some furniture and table eh you trust that with your guess honestly that wasn’t a very expensive pool table I think it was like a $600 pool table but you wanted something that was like the
(1:04:43) center of attention and you you I didn’t want to you didn’t want to leave it like open and I think that’s what the design company said as well um but yeah there’s there’s damage claims for everything so if it ever does come to that our cleaners are pretty good to replace some of the pool cues but that’s people just drop them like they put them up and they fall over who knows yeah it’s weird yeah so this one isn’t as like aesthetically pleasing on the inside like the other one I feel like a super Chalet they have like the
(1:05:12) wood the wood everywhere on the like very Chalet Vibes which I love this one is like an old converted Schoolhouse so it’s cute but it’s more in the country so you get way more of like a not winter so like spring summer fall crowd and because our covering costs on are so low cuz we bought it for a little over 200,000 it still brings in a couple thousand dollars every weekend all the time and then more in the winter so our our cash on Cas and then especially when we added this games room our um cash on cash on that is just really skyrocketed
(1:05:47) like this is the most profitable home in our portfolio that we own so when did you want more of them yeah that’s why I say we probably do a hybrid between the two but if you look looked at it it wouldn’t pencil the way that I feel like others would pencil if that makes sense well we were when we ran the numbers on this we were running a projections of like hey if this does like 40 Grand a year this makes like close to 800 bucks a month if it does 50 Grand a year we’re very happy and it’s going to do over six
(1:06:11) figures this year because of the garage right and the garage cost us so you’re double very happy yes good return that’s kind of what we looked at but penciling it didn’t do that because there wasn’t a lot of there wasn’t a lot of you know comps per se we like this games room did not exist in alic bille so we’re like you know are we throwing 10 grand at a wall and hoping it sticks probably not but there was 10 grand but I couldn’t go to investor with like hard numbers and being like look if you invest 10 grand
(1:06:37) into this games room here’s what it’s going to return we didn’t know but yeah but when you pencil the next one you have you should have a lot more confidence exactly and there’s also a lot of issues with that house because it’s in the country there was like a whole bunch of like animal issues it’s right beside a cow farm so we didn’t know if that would really impact the reviews or so we had to put a lot of time and effort into this property that we did not and money and that we did not have to put into the other one but now
(1:07:03) that we’ve spent all the money up front we got it all to where it needs to go and it has been pretty good since then C far people love it actually they’re like my kids like cuz they they can walk over and there’s like cows right on the fence you say your kids no not our kids I said kids like cuz we get a lot of families that come here right because like the you know the outdoor space the games room brings in a lot of families and uh yeah like originally were like oh there’s like a farm here but the luckily the smells it doesn’t really smell um
(1:07:31) and and and the kids love it cuz they get to go over and see the cows and yeah it’s just it’s a different it’s completely different from the other one cuz on paper I want a portfolio of these 100% yeah like we were scared because again both of these we purchased sight on scene um because this was during covid we couldn’t get there so we’re running the numbers we had people doing Facetime videos walkthroughs and you know it basically got to the point where it’s like even if they did on the lower side it was still safe so we were okay
(1:08:00) with that but when we went out to see this the first time we’re like oh no what did we what did we buy but again we just like I said did a lot of work to the backyard and you know updated a few things on the inside and yeah slowly but surely it started uh becoming quite profitable and you did one at a time no no that would make sense but no no this was months apart probably like two or three months part that’s not too bad yeah you get for a for a short- term rental when you couldn’t get down there um through 2020 in 2021 when we were
(1:08:35) flying from Toronto to Washington back to Buffalo so we could rent a car so we can go over there like it it was excuse me that’s how You’ get there yeah yeah yeah or like we were on a tail end of a trip back and into turkey and we landed in Boston we’re like why would we go back to Canada we might as well just book a domestic flight to Buffalo and go to the property so we’re all jet legged and whatever and go and do like 3 4 days of work really quick and right you got done though yeah it’s pretty amazing no so so
(1:09:07) say today I want to get into a deal like this let’s use this as a sample deal uh what What’s financing look like it’ still be again if you’re Canadian you can there’s a few mortgage brokers like TD and RBC and then I think First National is a good one as well um where they’ll be able to look at your Canadian credit don’t quote me on this one I’m still positive you can get 80% LTB So 20% down obviously you got to do the conversion you your US Dollars now on a declared student on declared Airbnb you can correct g i you can’t get that in
(1:09:40) Canada probably Canadian Banks yeah yeah probably probably not again like it’s been a we haven’t inquired one here um in two or three years so again that might have changed um but when we were down there you know we disclose everything this is what we’re doing same thing with insurance you have to tell them what this is going to be for what’s Insurance on these is it’s a the short-term Insurance short-term rental insurance commercial commercial insurance so like a Hospitality some sort of hospitality recreational business insurance policy
(1:10:11) yeah like you’ve got like at least 2 million liability and you know uh loss of rent those types of things right if you have like an issue and you have to cancel bookings for whatever reason because you have a flood or so it’s a business insurance yeah it’s it’s not it’s not your home owner occupied insurance it it’s probably double what you would pay for home insurance if not it’s not bad consider the liability exposure but it’s it’s really not that bad like you know some some people pay more for internet and cable you know if you get
(1:10:37) like the really souped up version it’s it’s worth it that’s for sure interesting um but yeah I would say like something in between these two would be our next one like cuz if you know if you scroll maybe down to the bottom like it gives the one picture gives you a pretty good view of like the garage like if you go all all the way to the bottom uh keep going sorry up a bit more my like right here cuz like on that side you still look into what do you want to call it the hills the mountains but then behind it has it as well so like when you’re at
(1:11:06) the property you’re kind of surrounded by this so it’s just like very peaceful and we really like that aspect of it no neighbors um but the problem is Like Houses like these don’t go for sale every week right you kind of got to keep an eye on it and try to scoop it up when you can but also there’s certain areas here that are flood more flood plane prone due to the runoff so you do want to make sure that you’re not in the hot spot there uh so yeah there and then obviously with the zoning you want to make sure that you’re good like this
(1:11:34) area is fine but um if you’re going to be more so near the ski hills there’s certain areas and communities that don’t allow it so big Lookout there like definitely like what I did is I just called the um the city before we bought these and even though it had a pretty detailed and they told me the very detailed zoning map I’m like here’s the address here’s what I want to buy like is this in the zone zoning like can you confirm that and they did they’re like yeah your medium density you’re good to go I’m like okay cuz I didn’t want any
(1:12:00) surprises didn’t want to we didn’t want to close on it and then find out that we can’t do it so I would always recommend doing that in any municipality if they have like some sort yeah a downside to uh elil is finding trades is very very difficult and very expensive y worse than here oh yes oh jeez get worse they they they gou you I mean here’s the thing you can you’ll find someone eventually cuz there’s other neighboring larger cities but it’s not like you’re going to call and get three quotes and you’re going to be happy with one of
(1:12:33) them the year eight plus quotes until you find someone that can do it and even then it’s like are they reliable is are they going to show up it’s because the nature of the majority of people that own here their second and third homes they know that hey we’re going to charge a premium if you want this work done it’s it’s small enough where it’s people can do that I imagine it’s much like that in our Cottage countries too yeah yeah mokas I can’t I’m assuming is the same everyone that I know that owns there brings their
(1:13:04) trade people in from the city to to do work and pay them a premium because it’s still cheaper right yeah my friends do that and then well what big cities are close by uh well Springville I mean when I say big it’s called to Walmart um that’s Big T yeah so like Springville is probably half an hour away and then I’m going to butcher it but it’s either Olen or oen that’s oen they’ve got that’s that was the famous Home Depot runs that we made but they’re all about half half an hour half an hour away they’ve got a
(1:13:32) Subway there so it’s good um but yeah that’s the there there’s two pretty big big towns about uh and then Buffalo is what an hour yeah an hour away you know we running out of time we still didn’t talk about travel rewards might need a part three part three yeah just on that again we’re running out a time any fin final thoughts you want to share with the guests listeners well we can leave a cliffhanger because all of the when we do these projects we also get a few first and business class flights out of them so stay tuned for part
(1:14:02) three and then you guys have you I I see on your website you offer what’s your website first of all it’s Spencer ashley.com yeah very creative maybe rebranding the Ashley and Spencer who knows yeah and then you can get you guys have courses you have some free giveaway stuff there there as well no sometimes we do um free webinars which we’ll I think we’ll be doing one soon cuz we’ve actually gotten a lot of uh people asking how we keep our cleaners like accountable and stuff so we’ll be probably doing a free webinar on that uh
(1:14:36) Spencer did like a three-hour pricing um paid pricing webinar I guess or a course Workshop that he that we’re selling and that’s like 3 hours in depth of exactly all the things that he does for our short-term rental pricing which I think was like an insane value because that’s everything you’ve learned over years and years and years for like a couple hundred bucks and then we do what you see here is um obviously private one-on-one consultation calls just basically about anything uh yeah but that’s about it we will be doing
(1:15:08) probably some sort of mentorship more than like a course uh more on the management side and that would be upcoming probably next six months or so and you’re looking for more clients to probably manager for oh yeah that like we’re open to to JVS as well but again we’re very specific on who we work with we’re quality over quantity and you know we need to like the people we work with as well that’s that’s that’s very important so we’re uh you know it’s a marathon not a Sprint got to got to enjoy it too yeah life is short mhm very
(1:15:38) cool any final final words for The Listener against a scary time for many people M yeah I I think short-term rentals are still a very viable option I know some people don’t believe that I think we’ve said this before but um you have to be in the top 10% of properties and then you’ll see the the profits I think that we see like we reinvest quite often if you’re a CNB property or if this is a like Last Resort and you’re half-assing it you are not going to do well um you get into short-term rentals intentionally not because selling won’t
(1:16:11) work renting won’t work and whatever right um yeah but still a very big viable option it’s just a big business and and then on the co-host side you don’t really need money to get into short-term rentals you can start by co-hosting for for a percentage of gross rents the way that we did and then we’ve built an entire business that’s our entire lifestyle from that so very cool and then what’s next for you guys sounds like you might expand buy another property yeah I mean want expand to or we are looking at uh acquiring I think
(1:16:41) you know nag the lake and and elville would be probably the the two we keep an eye on the most um but obviously open to other markets the management business we are expanding more into the states so that’s going to be our big push in the next 365 um obviously we’re expanding in Canada too like mscok is still on our list we just need that person that wants to work with us that can be the boots on the ground and you person’s listening yeah exactly you never know a lot of them are realtors too because we get get
(1:17:07) them a lot of representation too that’s kind of we find that goes hand in hand like our guy and cor this is a real estate agent and he’s got his own vacation rental so he’s got his own skin in the game so it was a perfect fit for us um remind our listeners What markets do you service so we are south Ontario so basically Burlington down we are are in the GTA now recently so we do cover basically all the GTA what areas allow it but it has to be pretty unique property I imagine unique property and being able to do it yeah like if you’re
(1:17:36) in a condo they have to allow it and it’s got to be a primary there’s a ton of restrictions but still doable cores uh we service that we are in Norfolk County so sorry where’s Norfolk Simco area more like Lake Erie yeah Simco Dunville um over that area it’s it’s like little Cottage Country down that way it’s a nice spot out there it actually is really really nice yeah then we are also in BC so we service like the mainland and the island and El elville and soon hopefully maybe California but we’ll see mhm any part of
(1:18:17) California where’s Kevin going uh La Huntington Beach like that those kind of areas around there so one of our just moved down there nice yeah not bad free place to say we go down it’s a big decision to move there because it ain’t cheap no no no no no but I mean we’re we’re we’re so preliminary on that haven’t really dove into the markets too much I know from like an acquiring standpoint it’s it’s from what we’ve heard from investors down there it’s it looks a little rough but we’ll see you need boots on ground all right
(1:18:50) well thank you so much for coming in thanks for having us appreciate it thank you thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.
(1:19:26) com learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor training.com

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** Transcript Auto-Generated**

(00:00) summer hard 2024 complete as in like enjoy that summer we’re back to school we’re back to learning about investing is anyone investing in long-term rentals anymore Alberta folks I know I know you love it but is anyone else in Ontario investing in long-term rentals we’ll talk about what we’ve been learning what we what we will be learning at the real estate resilience Summit Business Edition all this and more on this week’s truth about real estate investing show for Canadians I’m your producer and host Irwin CTO
(00:29) since 2016 and we are back we are finally back we’ve taken a few weeks off uh Busy Doing summering summering Hard spending time with the kids enjoying what little summer we have in Canada the Bank of Canada just made the third consecutive rate cut of .25% after what has been the quietest summer of real estate in my career um I’ve been land since 2005 been I’ve been an investor specialist realtor since 2010 I’m a real estate geek I check how Sigma often just like everybody else does I like to know what’s going on in my
(01:02) neighborhood I like to know what’s going on in the neighborhoods where I own property and where my clients own property whatnot for anyone who’s in real estate who’s a friend of mine knows I don’t shut up about real estate uh so if you are a real estate investor you know we always have much to talk about and I have many questions to ask anyways the market has spoken from my uh understanding rental properties uh as investments in Ontario are really out of favor the most I’ve ever seen in my my career and that’s across the board I
(01:33) have friends with very nice apartment buildings for sale receiving no showings I’m seeing the most lopsided investor imbalance of listing selling versus buying all the balance is on the listing selling side folks have property is listed and they’re selling them or they’re not there are very little buyers out there what little buyers out there that I’m seeing uh from the more sophisticated investor Community what I’m seeing is they’re buying mostly student rentals because uh University students naturally turn themselves over
(02:04) uh and then my point to what I was asking earlier is anyone investing in long-term rentals anymore in Alberta lots of them uh rest of the Canada not so much it seems the listings of rental properties locally has never been this slow again in my experience uh in the once popular with investor uh in the markets that were once popular with investors and and for apartment buildings uh now we’re going to be talking about Elizabeth Kelly’s uh real estate resilience Summit Business Edition and it couldn’t have come at a better time as canadi
(02:33) investors have never had a harder time of finding opportunities I have this discussion almost every day as I take calls from Canadians all across the country who tell me they can’t find opportunity I was having dinner with a coach recently who informed me that it’s been months since she’s seen a deal that’s worth putting her own money into on the flip side we had Sher uh Sher is a tech enabled asset manager who in my experience makes bill building a fully managed rental portfolio the easiest I’ve ever seen fortunately or
(03:05) unfortunately uh that can only happen in the USA thanks to the size of their economy which is the fastest growing in the G7 combined with low taxes and landlord friendliness uh I was literally telling my little cousin about a deal I was reviewing Kansas City uh he’s actually looking to invest uh he’s in real estate invest he’s in real estate his dad my uncle was a really big time broker before he retired uh last a couple years ago point is he knows a deal when he sees one and he’s my family so I everyone takes care of their family
(03:38) don’t they anyways back to the deal an off-market 1,200 ft Bungalow three bedroom one bathroom built in the 1950s most investors across Canada know this is your typical property so you typical investment property because this is the type of property of folks Target for uh basement spe conversions now um in Ontario in the popular markets for uh basement spe conversions that type of house a 1,200 foot Bungalow but cost around 600 somewhere in the high 600s to low 700s and Target investor markets like a Hamilton an ashaa Barry K Wu
(04:16) Cambridge and I know folks in Alberta do look for the same type of property as well for their for their mortgage helpers and same with folks in BC anyways back to this Kansas City uh deal in Missouri the price from the wholesaler so there’s no Realtors involved price from the wholesaler including their fee is $152,000 that’s American dollars um yeah $152,000 including the wholesale fee renovation quote on to bring the property up to being rent ready from the property manager is $220,000 projected rent $1,300 per month
(04:50) plus utilities for Canadian investors who’ve been around a while uh what like we’ve turned back the clock over 10 years on what these numbers look like uh we would we would get these types of numbers back somewhere around 13 14 years ago back in Hamilton for example which is where most of my experience is uh for cap gr for capitalization rate for those who understand commercial real estate we’re talking about a 5.
(05:13) 9% cap rate on a single family home and it’s not a very expensive property so you don’t have to come over with to pocket that much in order to do this deal I have a thirdparty home inspection report uh from a home inspector uh I have a renovation quote extremely detailed from the prodct manager uh and personally uh I can I have the Comfort level that I can do the deal do this deal from the comfort of my home I’ve personally attended a 100 home inspections for my own clients I I have enough comfort with uh home construction anyways this type
(05:47) of deal can be done as a pass as an operationally passive side hustle uh the the only thing that keeps this property investment from being uh fully passive is that the investor still has to deal with their own mortgages which is the way you want things to be you want to be in control if you don’t believe me just read the news and look at who’s losing their shirts who’s going bankrupt who’s owing 30 million to 100100 million whatever anyways all those folks have lost control I am a bit of a control freak when it comes to my investments
(06:22) anyways I do think it’s wonderful that uh my developer friends folks who do flips I think it’s all wonderful uh I personally I’m happy when I see people successful as long as not as long as they’re not hurting anyone uh but personally I don’t want to invest that kind of that much time and effort uh into those types of strategies I was literally speaking to uh a new a new friend of mine at the golf course who does uh he does kitchens and bathrooms uh so he works for folks investors who do flips in Oakville Ontario so I can’t
(06:55) even imagine the type of capital these folks are throwing around on million2 million prop proper doing flips and then like the realtor fees and and the rental budgets like holy cow anyways uh also again myself being risk adverse I personally would not choose a strategy where the uh financing uh Lynch pin is the cmhc a government institution um who has been known to change their mind from time to time for for those strategies uh I’ll have experts in those fields again I have no experience in that field of getting cmhc or or mli select and stuff
(07:28) like that but I’ll have I’ll have happily have experts in those fields as guests of my show like upcoming guest bestselling co-author Russell Wescott who’s from BC but invest in emont and he’s building he’s developing small multifamilies all the time brand new ones and the numbers sound fantastic but he also invests a lot more time money and effort than I’m willing to do uh especially being out Market anyways there’s no right or wrong in real estate uh it’s really just what fits you for for the best now I did say there’s no right or wrong
(07:59) real estate but there is a wrong losing money that is wrong I’m not saying never lose money most investors well sorry every investor who’s been around for a while has lost money on a deal or two or three or four what’s more important is over the long run they make money makes sense right now I’ll read you a quote from one of my newer clients who I’ve been trying to help coach out of a jam that they got themselves into before they ever met me this is what they wrote me this week quote hey heroin just wanted to let you
(08:28) know that every day I’m great for your wisdom and my private uh about my private lens I ignored red flags and I didn’t act fast enough so things are still quite painful but we would have been wiped out if you hadn’t shared your concerns with me thank you beyond words end quote also this week I’m I’ve been uh congratulating one of my longtime clients who helped uh who he helped uh sell their income property in the GTA and realiz over $500,000 in capital gains which everyone knows is tax better than lending interest uh you know
(09:00) interest that you earn on lending money anyways it it should be no surprise that the long-term real estate investor is winning even in this market maybe they didn’t make as much money if they sold out the peak but anyone like is anyone upset over a $500,000 plus Capital game anyways uh and and uh what I was going with is that going forward I fully expect my clients and I to translate our success uh that we’ve done in Ontario to being to landlord friendly USA my only hope is to to reach is to reach out and educate as many people as possible so
(09:38) they can be successful like my long-term clients uh speaking of Education I’m offering a free webinar uh a real estate 101 investing on September 17th 800 p.m. Eastern Standard Time anyone new to real estate investing or new to us investing should attend this so if you have friends or family interested in investing uh they need they need to attend this so they can at least compare uh any and all opportunities that they review against what a single family host uh rental property and land friendly USA can do like the property I just
(10:09) mentioned in Kansas City Missouri uh for a retail investment as an investment that an everyday investor can do I have yet to see a comparable property in Canada for a retail investment that an everyday investor can do again operationally passive uh I reveal deals all the time and on and and again my experience it’s really tough to beat shar’s offering for a fully managed uh for fully for being fully managed from acquisition to ongoing management to disposition and when compared to any condo or duplex in Canada there really
(10:42) is no comparison especially if it’s in Ontario BC or Quebec where landlords have little rights on to this week’s show award-winning investor coach speaker educator and proud entrepreneur my old friend Elizabeth Kelly uh we’re we’re old friends because she likes to tell it like it is Elizabeth shares about her wins and losses and real estate she’s been an active leader in the community for nearly 20 years and she’s here to tell us about how we Canadians uh how we Canadian Real Estate Investors can be resilient what she sees
(11:10) for our Collective Futures in real estate and she’s hosting the third annual real estate resilience a business edition of The Summit on September 28th and 29th uh that’s a Saturday and Sunday myself and Sher are proud sponsors of the summit I will be joining an expert panel on USA investing with friend of the show Glenn Southerland um I’m really honored to be uh uh really honored to be that Glenn and I are sharing a panel together uh and uh many of us consider many folks out there consider us the the leading voices on this subject and very
(11:44) grateful for the opportunity uh my wife the lovely Cherry Chan will be a speaker as well and I’m super excited for the other speakers on that are that they have planned and again uh this is business Summit this is a business Edition Summit but there are like uh the gentleman from Hawaii really interested in hearing what he has to say about real estate investing cuz he’s got a lovely portfolio in Hawaii anyways and a very sizable one too on today again so on today’s show Elizabeth shares her personal Journey from Mega real estate investor to uh
(12:13) entrepreneur adjacent to real estate the the challenges of affordability for investing in local markets even after learning the hard way back in 2010 where she where she and EMT her husband EMT bought over a 100 plus units and struggles with systems and operations this is why you need to be resilient you be to take that and what you’ll learn at the summit will be larg around systems and operations so that you can Thrive with these types of uh business businesses and portfolios anyways uh any and all investors should give this
(12:47) episode a listening to learn how to both win in real estate and avoid losing in which in my humble opinion is another way of winning for more information on the real estate resilience Summit go to real EST State resilience. CA please enjoy the [Music] show hi Elizabeth what’s keeping you busy these days not too much I’m actually taking some time off and enjoying the summer I’m uh I’m loving things how about you what are you up to trying to do the little same but it’s really busy so I kind of don’t want to take too much time off like while the
(13:25) iron’s hot you got some ex shining right which is funny it’s not that’s not the same for most of the community no it’s it’s been really quiet for Real Estate Investors surprisingly quiet Facebook’s quiet social media in general is quiet but even people taking action has been really quiet mortgage brokers are reporting it’s quiet Realtors everyone across the board investors are quiet these days what do you think they’re up to I think they all see a lot of what I see a lot of lack of investor interest uh just to give data points for example
(14:03) uh like we’re seeing vacant duplexes in Hamilton just sit which would never happen in the last 10 years this is the first time ever really uh so we used to think that vacant would would be marketable enough um but it’s not and a friend of mine posted about his kiter research showing that a tenanted property sells for $60,000 less than a tenanted property it also of days on Market from like 20 like 20 something days to sell for a non-ed property versus like 50 plus days to sell for tendent to property so that tells me the market is
(14:43) not uh interested in investment property even house hacking so my original investment theory of duplexes would be a wonderful liquid asset as as liquid as it gets for Real Estate thinking that people would always want a host hack is proven incorrect correct in this current market so what’s what’s an investor agent or mortgage person to do when investor appetite has dried up and that’s a small stuff like I think we’re we we both know lots of apartment building owners who have very slow movement uh on refinance or for
(15:19) sale of their apartment buildings so it’s it’s slow I and I don’t so I had a rent to own uh a couple of weeks ago that was a ailable and I’ve always had a lineup of people I’ve never ever had a challenge finding an investor and this run to own this was a little guy this was a mortgage of$ 450 $600 and some dollars a month in cash flow like it was a great little opportunity and I was willing to be the active partner take care of everything just come in qualify for the mortgage bring in 80k and it was a struggle just bringing
(15:54) 8K that’s it that’s it it was a struggle it was not I’ve never had so many conversations and people so nervous about taking action and I think it’s because there’s so much money that’s tied up or missing or that people aren’t confident that they’re going to get back uh right now that it just money isn’t turning over the way that it did for years and if you’ve been investing I mean you know you look at the lifespan of an investor most people think well I’ve been investing for 10 years I’m you know I’m one of the the ogs here but the
(16:29) last 15 years were a Heyday for investors and the the the downside always comes calling at some point yeah and seems we’re there doesn’t help that uh you know a lot of people are looking at interest rate renewal interest sorry mortgage renewals on their homes as well so I think the broader markets affected as well it’s it’s definitely interesting out there yeah I mean to me it means that we should be focusing on cash flow which we should always be focusing on but if you’re struggling right now with a situation where you’re not positively
(17:02) cash flowing on your investment properties I believe that it’s a great opportunity to get out there and look for cash flow from another means and what do you mean by that or or look for a different investment strategy like right now for me my apartment buildings I’ve had I’ve been socked with a couple of big bills I had a a big Plumbing bill that I had to deal with and then I had a big roof repair that I had to deal with and um you know that kind of took a good ch of my cash flow the last little while but the one the
(17:33) one investment that’s continued to grow for me has been my commercial building where I do short-term rentals and I don’t have to deal with the residential tency act I don’t have to deal with um some of the challenges of the long-term um you know when when you’re providing housing for people versus somewhere for them to come and stay for a little while while they’re in town to work it’s a a very different game and you know if things get quiet then I focus more on marketing I’ve listed some units on Airbnb as a way to increase the
(18:05) traffic in the building and have more people find out about us before they come to town and I just feel like it’s given me my control back and that’s one of my most important things the reason why I fell in love with real estate was I could buy a single family home and I could turn it into a duplex and I could force the value and then I could refinance and pull it out and and go somewhere and do it again and be able to provide homes two people that were affordable and it just it doesn’t feel it doesn’t have the same feeling anymore
(18:35) that it used to and I came through 2008 so I know what it’s like to go through a downturn this one feels heavier to me though do you see that too I think it’ll naturally be heavier because where affordability is now just because the the run up over the last 10 15 well honestly since the since 2008 we’ve been on a s serious Bull Run yeah so I don’t know how people get into the market now just because the numbers are so big now some some clarifying questions from what you just mentioned you mentioned commercial
(19:04) property so that means uh that’s a multif family right no so we have it used to be a Senior’s home in Kirkland Lake okay we bought it in I want to say 2012 it was 2012 and it had been vacant for 10 years so we worked on it and we kind of got it back up and running a lot of the plumbing was broken just issues all over the place the heating system wasn’t working and we took the spaces and we converted them into rooms so before Co we had a dance studio in there and we had a restaurant uh the hair salon is still there we’re exploring our
(19:42) options with doing other things I looked at um self storage for a while I thought that would be great I think our Market is kind of capped out for Self Storage so I’m looking for some other options but right now my bread and butter for the business is people coming to Kirkland Lake who need somewhere to stay you know for a couple of weeks or a couple of months while they’re in town working and it’s worked out so well we we have shared kitchens so people don’t have to eat fast food all the time we are a more cost-effective option than a
(20:13) hotel so people are thrilled they come and stay with us we provide housekeeping weekly housekeeping and you know Wi-Fi and parking are included so we’re kind of an all-in-one building and it works for us it works for the community it’s it’s really we identified the opportunity from analyzing the need and I think that’s often lost on Real Estate Investors because I think partly is that you know what you’re talking about is not really an investment it’s a business like I treat my invest my Investment Portfolio as a
(20:43) business I came to the decision to be a real estate investor as a business you know doing SWAT analysis strengths weaknesses opportunities threats like you know you have something that’s in high demand it’s going to generally perform well that’s that’s what business is now again like here you’ve identified business opportunity and and my point is again like many people forget that like it’s this and this was not this doesn’t sound passive at all yeah and I I don’t know that people forget it so much as when people are new
(21:14) to investing they just don’t realize it you know it becomes it becomes you know you’re focused on the concept of you know learning leverage and you know I can take the equity in my home and I can use this to generate money and they don’t realize hey guess now you have to learn Taxation and accounting now you need to learn bookkeeping and HR and you need to you know know the residential tency act inside and out you need to know how to vet people for your power team like people a a lot of people really think I mean this is touted as
(21:47) passive and especially when you’re starting out it’s not passive it’s very active yeah and then uh can you make this passive Can you hire someone to take up the day-to-day or you already done that well I do I mean with my property management company I had I don’t know I think I had 15 staff at my B bits at my biggest but then you’re just managing people I’ve done my job it’s not the easiest no if anyone thinks law is tough look at look at the employment law it’s yep it’s pretty in my experience employment law is
(22:31) generally favors the employee no different than tenant law it’s generally favoring the tenant yeah and this isn’t to say that people shouldn’t invest in real estate I think what I think what I’d like people to understand is that this is a challenging time to invest which doesn’t mean you shouldn’t and quite honestly you know there is a lot of wisdom in the saying that you know do the opposite of what people are doing so if people aren’t investing right now there are definitely some tremendous offers like there’s a house up the
(22:57) street for us that was list for almost 1.3 it finally sold at 1.01 they got a steal that house is definitely worth more than that but then there’s other people there’s someone just down the street who bought a bought a house for 1.1 and then they now have it listed for rent for 3350 a month that’s it 3350 that’s it that sounds low yeah 1.
(23:25) 1 for 3350 like there’s no way they’re making money there’s no way so if that your investment model you need to rethink it they got to flip that thing soon I don’t know I don’t know what the thought was behind it I haven’t met the the buyers but um it’s important to know your numbers and understand what you’re signing up for and there are definitely deals out there right now there are definitely people who are motivated because stuff is sitting but you have to have a plan and you have to know you’re getting into a business so you need that
(23:56) business plan for how you’re going to make money and how you’re going to make things work so the general Trend what I’m noticing is from guests on the show and this is not a popular opinion among Realtors and mortgage people is so many people are getting away from long-term tenants when it comes to Canada generally BC Ontario Quebec I don’t know much about the other provinces uh is what are you seeing I me like you know for context I think everyone knows you you have a lot of past coaching clients you’re you’re one of the best
(24:31) known coaches in the business what are you seeing on your clientele are are is is my observation do you see similar things I do I think it’s important that if you’re going to go if you’re going to move away from long-term tenants you need to understand the repercussions of that so you need to understand that financing is definitely more challenging to obtain um it definitely the theory is it gives you more control I think it does because I have both I have both and I have a problem right now in one of my apartment buildings and
(25:03) I don’t know what’s going on with the tenant upstairs but there I don’t know if it’s mental health or if it’s you know something else but continuing ongoing disturbances and I have other tenants who are threatening to leave my hands are tied there’s really not much I can do I mean I can ask them to continue to call the cops when there’s issues but the cops don’t want to deal with it um there’s not much I can do I I just I have a very disruptive tend and who’s causing issues with for everyone else in the building and there’s no there’s no
(25:33) consequences for that and as a landlord I would shy away right now from larger buildings because the smaller ones from a property management perspective I tend to have a lot less issues in my smaller buildings because there’s just less shared space there’s less crossover there’s less common areas again that’ll be an unpopular opinion among many realtor and mortgage people I know I’m okay with being unpopular I don’t need to be liked by everyone I’m talking from 20 years as an investor and 15 years as a large scale
(26:07) property manager I find that my smaller buildings typically present less issues yeah so so when people ask me why I’m back in the single family that’s exactly why I have no tenant conflict yeah when there’s poop outside on the lawn you know exactly whose dog it belongs to right like it’s not a you know tenants all pointing the finger at each other it’s literally like you’re the only person with access to this property so it’s you yeah at had a tenant who uh has anxiety issues so he he’d regularly smoke weed in the back
(26:39) corner of the property and then upstairs tend complain like what do you want me to do he’s exercising his human right yeah yeah it’s it’s his right he can do what he wants yeah and but the point point is if if it’s only only one tenant there’s no one complaining and I think that’s another thing that beginners forget about is that they for they they don’t know what experienced investors know is that your typically your top problem is endent conflict yeah absolutely and you can’t I mean everybody’s on their best behavior
(27:09) when they’re applying that’s really the only time when you have any control over who is who is going to be in your unit and I think people get really fixated on the numbers and it’s you know go big or go home and I want this size apartment building and this scale and I want to grow to this and it’s it’s okay to be smaller and to say one building year for 10 years is going to change the trajectory of my life for me and my kids and it’s okay to sell you know if you’re in a situation where you’ve got some other stuff going on you know maybe
(27:40) your mortgages payments have gone up and you know it’s it’s you’re really being squeezed it’s okay to turn around and sell so that you have the capital to be able to withstand the downtimes the idea is not to become a property hoarder the idea is to have these little picky banks that you can access if you need to in the future when the going gets tough MH there’s no shame in selling yeah something got lost along the way like the current generation of investors like folks who started like within the last five years they they
(28:10) were not their goal was well beyond one biling per year can you talk to that because you you’ve had to pick up the pieces for a lot of these folks who belong to Guru groups I picked up the pieces from us too my my husband and I fell victim to that mentality in 2010 I don’t always we must have bought hundred and some units that year um and it just you grow so quickly and there’s so much going on that you can’t that you can’t keep up with it you can’t create the systems and processes you can’t find the people to help you
(28:46) sustain that and the cracks start to show I mean you can’t like I don’t know are we allowed to talk about live stuff ongoing stuff sure so are we allowed to are we allowed to talk about the the whole um I don’t know if you want to pause the recording and verify but are we allowed to talk about like the Dylan sudor situation and how that happened it’s up to you because it’s you have your own stories because you’ve transacted with them yeah but I think looking at it from the outside and I I don’t know these people all I know is that they bought a
(29:19) couple of buildings from us but what I found when it comes to investors is that systems and processes tell the story so if the systems and processes are not in place then it is indicative of what’s going on in the rest of the operation so if someone buys a building and it takes them 120 days or 90 days to pick up keys and tenants are calling and saying you know it’s been two months and I still don’t know where I’m paying my rent to and you know we’re drowning in snow here and there’s no there’s no one who’s plowing um you know the the heat’s
(29:57) off we’re getting disconnection not notices on the utilities like if you start to see stuff like that it means that there’s systems and processes lacking on building turnover and that probably indicates that there’s other issues that are happening as well yeah like I said there there’s smoke there’s fire sorry Elizabeth can you back up a little bit uh yeah so from your portfolio uh Dylan bought properties from your from properties of for sale of yours yeah a couple of our multis and what year was this 2022 okay so not that long long ago and
(30:30) then you tenants were reaching out to you past so not your no longer your tenants but know managing for them did did he keep you on to to manage them or he he he transitioned to no we we actually wanted to um I was happy to keep managing them because we had good relationships with the tenants we knew the buildings we knew he didn’t have anybody local in town um just to back that up as well you started your own property management company in Kirkland Lake cuz they you couldn’t find a PM either yeah we if you can’t find one how
(31:04) is he finding one well he was bringing his people in from outside like I think someone was I think uh there was someone in Timmons that he was using to manage like exer how far apart of these these cities Timmons is like an hour and 15 and again I’m just I’m trying to piece things together right like I’m I don’t I don’t know these people I don’t have their phone numbers I’m just is trying to piece together from what I saw uh from an external perspective an hour 50 per Google Maps as of right now 140 kilometers Timmons to Kirkland Lake all
(31:41) right sorry I interrupt continue that’s okay um so when you start to see things like that then you start to I mean there are times where as a business you grow very quickly and it can be challenging to keep up with your systems and processes it can be Challen in to make sure that you have the right people in place and I see it a lot with my clients who are realtors my clients who are mortgage brokers where the volume of business has to grow to a critical mass before you have the financial capacity to take on another
(32:12) staff person to take some of that load off so typically the customer service that your business is providing will suffer during that time so it’s hard to tell from the outside whether that’s what’s happening or whether it’s legitimately um hey you know we don’t have any of the infrastructure in place that needs to be there to manage all of that and growing very quickly and aggressively there’s a whole process that should happen when you buy a building there’s a ton of admin with changing all the accounts over setting
(32:42) everything up getting all the tenants uploaded into your systems and processes your software everything else so it’s not the kind of thing unless you have a big team it’s not going to happen quickly and easily so when you see people acquiring multiple buildings a month they either need need to have a really strong team or there’s the potential in the future for things to be a little bit bumpy MH yeah so you and I already saw cracks in that business before they ever made the news yeah and then noever reference checked
(33:15) with you or I I I don’t know that people and this is part of the thing like at some point I think as humans we make decisions based on our emotion and I find myself doing it you know I I looked at this rent to own and there were there were some some things that I you know kind of raised little red flags for me but I wanted to do this really badly I wanted to do this rent to own and I was I said to myself you know no matter what I’m an experienced investor I can handle this you know if if things don’t go according
(33:49) to plan I’ve got Plan B C D E and F and I’m like but wait a second just because you can handle it doesn’t mean that you should ignore those little warning signs those little red flags and I think sometimes as new investors that’s what we tend to do we get a little emotional you know we we like people we see what people are doing we get excited about it and then we fail to step back and say you know if I was doing proper due diligence on someone what should I be doing it would make sense if I was investing in a building I
(34:25) would contact somebody independently to do an appraisal an independent realtor uh an in I’d have you know somebody at least hey drive by the building and tell me that it’s there and I’m not putting anybody at fault who has invested money with someone based on trust like I’m not trying to I’m not trying to hurt people when they’re already down but I think as a community we need to do a better job of asking the tough questions and as borers which I am we need to do a better job of saying I expect you to ask me
(34:57) this question here’s full transparency this is what’s this is what it is like my commercial building I don’t have traditional financing on it an appraisal is $20,000 so I have continued to work with people who I know and care about and I have private money on my building I’ve owned it for 10 years most people could and should not do that but that’s what works for me I like working with people who I know and who I trust yeah but you have a lot more qualifying criteria to build trust then unfortunately the folks are
(35:35) out of a lot of money yeah I mean there there’s a lot going on in the world of real estate right now and um I I think we need to do a better job as investors of protecting ourselves by asking the right questions and I wish there were more of the big companies and the big organizations teaching people that that’s stuff out there it is I I feel I feel for new investors because it’s not like I mean when we started in 2005 I started I didn’t we just social media wasn’t a thing like we didn’t know then what we knew now there wasn’t this you know
(36:13) communication around the world there wasn’t this you know when you learn things you you had learned it the hard way or you had done the research or I mean now we can just we have instant access to a ton of information but now we have no way to verify on the flip side though like for example there’s a coach who’s failing out there who’s well promoted by by their Network like I I saw her deals years ago and I knew that was doomed to fail again I I think I don’t know what it is um yeah I don’t know what it is I think
(36:50) I think there’s a lot of people who can’t qualify a deal so then you got to think what are they paying all that money for for coaching if they don’t know how to qualify a deal yeah but I I think sometimes again people you know you you’re on social media and you see someone and they look like they’re successful or they look like they’re doing really well or they’re talking about how amazing they are and people go yeah okay I want to believe that I think most humans fundamentally want to believe the good in people they don’t want to believe
(37:19) that they’re going to hire someone who’s not going to teach them what they need to know about how to run their business and I think that kind of takes me to where I’m heading now which which is I want my control back MH I I I’m tired of giving away my power to everybody else and I want my control back what are you doing to get your control back I’m I’m still going to be coaching on real estate for people who want to learn but I want to focus as well on people who want to start active businesses people who want to generate
(37:52) income people who want to say you know what I don’t want to work here forever I want to transition out of my job um you know maybe I want to go on maternity leave and I want to have a side hustle so that I don’t have to go back afterwards um people who say I I know this or I can do this and all I need to do is tell people about it and then I’ll have the opportunity to be able to take charge of my income yeah wa wait till you come to Yo and I’ll introduce you someone to my friends who bought businesses it’s uh
(38:24) it’s lifechanging for many it’s a lot of money too for not to say it’s easy or that everyone makes it but man the people who make it and I’m not talking about people like I love and I admire people who want to buy businesses I’m talking about people who have a love they have a passion they have a vision and they just don’t know how to start you know they have a transferable skill set that would be really in demand but you know right now they’re trading the security of in theory anyways going into into to the office for two weeks and getting a
(38:59) paycheck at the end of it for the freedom of being able to um to work as and when needed so right now my in-laws they’re um they’re in their they’re 85 now and unfortunately their health is declining it’s declining really rapidly and we have multiple doctor’s appointments a week we get calls from them where we need to drop everything and go over and I looked to my husband I go could you imagine if we worked for somebody else and you and I were both at offices and we couldn’t be there it would be it would be heartbreaking I
(39:30) mean how many people are there who want to be there more for their families and don’t have the capacity to do that because they’re stuck somewhere that they don’t even necessarily want to be so I want to help those people a lot of people looking for help I think a lot of people just don’t even know where to start the whole buying a business so sorry you you’re but even starting a business both are complicated I actually think that they can be but I like to keep things really simple like I don’t I think we we don’t have to make
(39:58) it complicated at least initially you know once we kind of figure out the landscape you know what we’re offering where it would fit is there a need for it like there’s a lot of due diligence you should do before you even start a business and I don’t think people realize that you need to make sure that there’s a market that there’s demand that you have the right skill set there’s a lot of analysis to do even before you say okay I’m starting this business and yet you buy your domain yeah it’s like valuations for
(40:27) example is so different compared to real estate like when we’re when we’re looking at businesses to buy it’s so different and I’m having these conversations almost every week or so just friends who are looking at businesses just to evaluate their own businesses or looking to acquire businesses it is so different valuing a business compared to any piece of real estate yeah so what is it that you have seen in your experience that are the number one drivers of valuation for a business uh for example like Professional Services and recurring
(40:57) recurring revenues like if you’re a professional service that has significant recurring revenues like an accounting firm your valuation is so much higher and you have so many more buyers right which makes a lot of sense and that’s how Cherry structures her hers right where there’s a monthly there’s a monthly fee and that drives the value of the business regular curring income you know in their line of on the line of business people need to file the taxes every year so that’s people generally have to you know do it
(41:26) every year uh but then there’s like hair cutting businesses where people need to get the haircut every you know 3 weeks two months whatever that the recurring income but a lot of people can do that business so the barrier of Entry are very low so then so then that your valuation is completely different for a business like that yeah and it’s interesting because I think a lot of businesses waste money on marketing when if they put a little more time and energy into making sure their existing clients were happy yeah and converting
(41:55) that the marketing budget into a loyalty typ type program I think that they would have a lot more returning clients and a lot more happy people so they wouldn’t need to spend as much time marketing and recruiting new people yeah retention is generally I think everyone knows retention is retaining a client is cheaper than acquiring a new client uh now we kind of touched on this just briefly what start starting new starting a new business versus buying what are your thoughts I I have I mean I haven’t bought a business myself personally my
(42:26) preference is always to start fresh I feel like when you buy businesses I mean you’re buying potential problems you’re buying liabilities but you’re paying for not having to be part of that initial growth phase which is can be some really heavy lifting I personally absolutely love that feeling of seeing a vision and a plan come to fruition I find it energizing and exciting so many of my clients have done it you know they’ve started rent to own companies they’ve started property management companies um and so seeing them you know do their
(42:57) first deal it’s it’s part of it’s like real estate it’s adjacent to real estate but it’s you can create that ongoing sustainable income through you know Property Management fees and and some of the other different um the different investment models that they’ve chosen but I don’t know I I have an affinity for starting my own because I have these visions and these ideas in my head that I want to make happen and I don’t know that I would see the same thing if I was buying business tell me what you love about buying though because you you
(43:30) prefer to buy versus start don’t you that’s largely a strategic decision though no different than real estate it’s real estate winter it’s business buying winter as well a lot of people don’t have cash and credit so when when like being strategic means doing what the opposite of what everyone else is doing like you said so there’s a lot of people selling businesses but there’s like no buyers and a lot of these businesses don’t have uh don’t have plans for the Next Generation typically the kids don’t want it yes right so you have a glut of
(44:01) Sellers and if you can be a buyer then you can make a lot more you can negotiate a lot more for example like uh like Victoria who was Clooney was on the show they did a share purchase right so she bought the shares of the company so she assumes everything the employment contracts any contracts they have the debt everything but again if you’re able to negotiate you can just buy the assets and you can buy the assets for example for 10 on the dollar and not assume any of the debt and that’s I’d always prefer if I was going to buy I think I’d always
(44:34) prefer to buy a business that had real estate as part of it like I wouldn’t want to buy a business that was renting a space I would want to buy you’re buying something Ontario if you’re buying something in the Golden Horseshoe you’re paying through the nose for that piece of property and maybe and again it’s Case by case like for example if it’s office space you may not want it strategically office space is is is a very weak position in the current market or or retail depending on where for example I had a friend call me looking for a referral
(45:04) for a leasing agent for retail in Hamilton I’m like I think the vacancy for retail in Hamilton like 50% so you that may not be the piece of real estate you want but for example if you’re industrial there’s a good chance you might want it right but Industrial in Ontario Golden Horseshoe would be a lot of money so it’s not the easiest decision and pretty much I think every business owner in the industrial would want their real estate State they not may not be able to afford it yeah I think it’s easier to start
(45:33) businesses that are service-based because the startup costs are so much lower like you’re talking about retail or you’re talking about um retail and you know some of the industrial stuff there’s a lot of costs involved because you need the inventory whereas you know it it costs a few thousand dollars to start a property management company or um you know to become a mortgage broker and start your own business that way it doesn’t require the the heavy Capital that some of the other types of businesses do yeah again I think it’s Case by case
(46:05) and it depends like for example Wade um Wade was on my show Wade Graham he he was like that was years ago when he bought his float can War business float you know those float tanks and he shared how he paid Pennies on the dollar like I think like 15 cents say it’s like 15 cents on a dollar for the equipment right and he negotiated a seller seller seller takeback mortgage MH so out of the profits of the company he was able to pay off his loan right and again he only bought the assets he assumed nothing else just the lease and
(46:36) now he just recently announced he bought the bu bought the building he was in good for him so again it’s Case by case uh and again if what it’s largely strategic like for example for someone who like really wants a restaurant or a gym personally if it was me I would wait to buy a failed one you know because then you can take over their brand equity right you can buy all their equipment for like cents like 30 cents on the dollar for example right rather than starting new and again it’s Case by case depends on what people
(47:06) are interested in for business right sometimes that client list for example is worth a lot of money right maybe it’s worth a lot of money to you not worth a lot to someone else so again strategic right but starting up yeah it’s something well you know you’re starting up with no systems and operations that’s tricky too it is but I find that there’s a lot that you can replicate so for example I have a full Suite of of documents if someone wants to start a property management company that I share with my clients so it gives them a foundation of
(47:38) systems and processes um but you can take that and you can use that I find as long as you have an aptitude for starting systems and processes then it doesn’t really matter what you’re applying it to you’re just going to do it anyways yeah like I find even Evan and I are working on renovating our house and you know I take the same systems some processes okay we’re going to use Google keep we’ve got it each day of the week and we’re going to go in and we’re going to put in what we’re going to do and we have a running list of all
(48:04) the tasks that need to be done and you know if we have more time in a day and we finished all our things on our to-do list then we’re going to go down to our running list and pick something and move it up I use that same system and process in all of my businesses and I use the same transferable skills yeah but you’re out there how many people have that skill set how many people want to put in that that kind of effort too for example all these people who invested passively quote unquote passively into into private
(48:35) mortgages right they just they just wanted passive they didn’t necessarily want a business but again that’s not your clientele well I mean I do teach private lending but I teach a lot about due diligence on private lending like I I really want to know what other assets are back there I mean I assume when I do private lending I assume I’m not going to get my money back and I work from that basic premise I don’t I’m not there going I’m going to get you know $1,500 a month this is going to be great I assume that I’m not
(49:05) going to get it back so I’m already making sure that if you know plan a doesn’t happen what’s Plan B well plan B is you know I’m secured over here and again I’m not I don’t do prom notes I don’t do unsecured lending but I’m already saying you know what happens if the market drops and my you know the the value that I believed was there when I closed is not there what are my other options and opportun unities who are these people I mean I think sometimes we get sucked in by saying oh this person has a big presence
(49:35) on social media so they must be good without actually saying hey can you show me a statement that shows me you know what properties you have in your name or what your net worth is or you know what your taxes are sometimes when you ask the right questions and somebody gets angry then that can be as much of an indicator I remember there’s somebody who was part of a a failed company um a very publicly failed company and someone went to her and asked uh for financial statements and I remember how angry she got at them and she said if you need to
(50:10) ask for financial statements then I’m not let then I don’t want to borrow your money and uh you need to go and find somewhere else because that’s not how I operate and they were so upset and they were like oh I did something wrong and I’m like you did something right yeah because then the business went under it’s like when landlords are screening tenants and they refuse to fill a credit report like that’s a good thing yeah when people self- select themselves out of your world yeah don’t don’t believe it’s because you did
(50:43) something wrong I mean it might be but maybe it’s not maybe it’s the universe looking out for you crazy so what else do you like about what else are you thinking about for getting control back uh well that’s why so uh I’ve invited uh Victoria Clooney and Megan hubner to co-host the real estate resilience Summit with me this year and part of the reason that I selected these two wonderful ladies is because they have the same vision that I do that people want to learn more about how to make better choices and whether we like it or
(51:22) not quite honestly a lot of the times we do follow what’s going on in the US maybe not politically but when it comes to you know um businesses and investing and there’s some amazing people out there like Cody Sanchez talking about how to buy businesses and how to find Value and that kind of stuff so we have gone one step further this year with the summit and we have included some speakers from us some of these people they’ve never spoken in Canada before so the information that we’re hearing is new and it’s you know what’s up and
(51:55) coming in the world of not just real estate but investing in general in being an entrepreneur in starting a business or buying a business or revamping a business um most of it being real estate adjacent but I really think you know much like you have identified the issues with investing in Canada and you’ve pivoted to the US I think there’s going to be a lot of pivots coming and I think that there are opportunities I mean I have clients who are looking at buying properties in Spain and portug Portugal um you know
(52:29) buying in the US buying in Costa Rica Mexico I think the internet has given us the opportunity to be able to identify places outside of just our own little niche here and it’s exciting to meet other people and see what they’re up to and look for the opportunities that potentially we can earn income and take control of our future MH yes I’m kind of sick of what we deal with Ontario landlords yeah and I I mean I don’t like I don’t like dumping on Ontario you know honestly I’m grateful I’m here you know it’s just a fluke that I ended up being
(53:08) born to my parents and you know they were in Canada and you know like I I still consider myself lucky to be here in Canada but that doesn’t necessarily mean that it’s the place where it’s the best for me to be in charge of my future I’ll also qualify that with just with the assets that you and I have purchased over our time and also the time we were born generally our generation’s done very well and I M admit that completely which is why when people say are you are you moving to the states like then when they ask me that
(53:42) and my answer I want to share it here publicly is I don’t have to because I made the right decisions along the way to play this game right so I can afford to live here chairing I can afford to live here our businesses operate here I don’t have to go but if I was 20 years old old knowing what I know and no kids I’d be doing everything I could to leave this leave this country that’s just me right but I don’t know that us is the answer either to be perfectly honest because not saying it is I mean the US to me right now is kind
(54:12) of a scary place like my husband travels a lot he spends a lot of time in the US and you know he was talking about um one of the hotels he stayed I think it was in West Virginia and there were like there was huge fences around the hotel and like armed guards MH in a hotel in the US I mean when he goes to Egypt there’s armed guards at the pyramids yeah they’re not around the hotels yeah yeah yeah like the US has some some and they’re so divided I I don’t think I don’t know that the US is is the answer either it’s a big country though it is a
(54:50) big country and quite honestly I would like to just go in the middle of nowhere and be left alone to do my thing that would make me really happy and you could buy land a lot cheaper like that in the States you i’ had discussions about it you could probably buy 200 Acres so you would have to deal with any people and you probably pay like less than half a million for it yeah absolutely yeah land land is so cheap I mean you know I look at the the parcels of property we’d like to buy and we’re well into Northern Ontario to be
(55:17) able to buy the size of land that we’d like to buy yeah and the black flats will heat you eat you for half the year or the polar BS I’m kidding about the polar bears yeah there is no perfect and I I say that I’ve been seeing that regularly as well uh I it’s it’s my belief like if you can afford it I think two homes is the ideal right one one place to live during our Winters when it’s warm or it’s warmer if that’s your preference but you know I was watching the surfing the Olympics over the weekend I’m like that looks so hard I’d rather
(55:47) snowboard than drink salt water and Get Smoked by waves so so again point is there’s no perfect uh I do believe just me person that we’ll probably end up snowb biring somewhere else for the winters and and still returning to Canada for the for our summers which are absolutely lovely here yeah I mean I look at you know Europe and Spain and some of the some of the countries over there and their food is so much healthier it’s so much less processed their lifestyles are so much healthier um their populations you know
(56:19) live longer with less health issues I mean I look at that and I go what are we doing over here we’ve got all the money and we’ve got lots more Independence than a lot of other countries and yet these are some of the issues that we’re we’re having you know we got the terrific obesity rates and all the other health issues that we’ve got yeah when just living just when I was in Moka we were averaging well over 10,000 St steps just staying at the YMCA Camp because it a hike wherever you went it was a hike so yeah I I think Seth
(56:55) Ferguson has the right answer he’s one of the the people I’ve talked to and and done podcasts with and he’s on his treadmill the entire day genius just walking away on his treadmill I think that’s I think that’s the way to go for those of us who are stuck in in offices and on Zoom for most of the day he spent a lot of time in Florida and Texas [Laughter] too but it’s it’s about creating that life that we want right and I think sometimes there’s what we think we want and then there’s what we need I think you need to explore a lot of
(57:28) that too and part of it Al is you need the money to do it right for anyone yeah yeah I don’t need to go into like money is the source of all evil we’re trying to give some people something good to listen to irn We don’t want to make everybody cry I think most people listen to the show realize that that’s not the truth but money for some like money money money will amplify people’s personalities if they were evil to start with giving them more money will make them more evil right if you’re a good person armed with more money then you
(58:01) tend to do more good things right at least that’s how I like to think I find my husband is a my husband’s a pretty cynical person and he always says to me follow the money and I at first I was like that sounds so that sounds so cold but the more I talk to people who are struggling and the more they tell me who they who they’ve spoken to you’re gonna stand up now are you the more I talk to people who you know they’ve asked they’ve gone to people asking for advice and the advice that’s been given has been self-serving
(58:37) because it’s you know they they’re wondering about their insurance policy so they talk to their insurance broker and their insurance broker tells them they need more Insurance because it benefits the broker for them to buy more insurance so that’s just an example but it’s really hard for people to find out right now who to trust and I think ultimately what that means is you need to go inwards and you need to make sure that you are cultivating a voice of your own that is independent of everything else around you that is independent of
(59:04) other people’s opinions that is independent of other people’s you know you can go to people and you can um seek to learn from their experiences but recognize that just because somebody did something and it turned out this way there’s no guarantees that it’s going to turn out that way for you too I think it’s important to know who you are as a person and what you’re really looking for and the only way you find that is by going inwards you don’t find that from outward stuff I’ll disagree when all these people were running to NE Brunswick I
(59:34) called you I did not look inward I don’t have an answer why all these people go to NE brunwick I’m going to go to the most OG NE Brunswick investor I know and call Elizabeth and then I had you on the show right immediately after talk about it right but I think that you if you had gone inwards I think there was enough you went inwards enough to realize that that might not be the answer yes it didn’t they didn’t didn’t pass the sniff test to run the new exactly so there was an initial something that happened there in that
(1:00:08) process for you that you said I’m not comfortable with this I’m not happy with this now I’m going to reach out and get an external I’m going to talk to somebody and I think that as investors we have gotten bad at doing that and we become so focused on missing out so focused on opportunity is passing Us by that we do not listen to those red flags that our guts throw up that you know they they our guts are telling us something and we try and stuff that down and bury it and there’s a difference between analysis paralysis
(1:00:43) and legitimate red flags and I think that’s where reaching out to somebody can help you differentiate between them yeah I have this friend who’s who who has who has Capital to deploy and he and he looking he’s looking for bigger stuff right and like the deals he was showing me he was looking at and he was like this doesn’t feel right this doesn’t feel right like that’s fine you can be patient you don’t have to deploy your Capital right like versus like now is a good time to deploy so my point to him was there’s no rush wait for the deal
(1:01:17) you’re in no hurry right and I think that’s and to your point like fomo investing like so many people are afraid of missing this wage and I’m not I’m guilty of it too my timing of buying cryptos was horrible that’s why I’m negative the fact that I’m negative on my crypto tells people a lot about how bad my timing was uh but again my point is um but they were small bites my point though is that I made small bites right versus there are some folks who invested their life savings into some of these gurus for for
(1:01:52) fomo and now now that money is gone it’s crazy out there yeah and I think diversity is something that we’re not counting on as well you know if you have $50,000 with the world the way that it is you can buy a little bit of gold and silver you can do a little bit of you know like Addie for example invest in real estate in a smaller capacity you can invest in some businesses in a smaller capacity and you can give things a try and see what works and then analyze what works and Le a little more into that there is nothing that says
(1:02:29) that in order to invest in real estate you need to have a million dollars and you need to go out and buy a big building right yeah I’ll just throw it there that I only need I only needed 76,000 us to closeing my house in San Antonio right yeah and then for context that’s why when people ask me should I do a duplex conversion or garden Suite well those both cost way more money than me just buying a house in the states yeah yeah yeah again you don’t need a lot of money to do it you don’t need to do everything and yeah I’m sure you’re
(1:03:04) gonna cover this all the real estate Brazilian Summit what are you g to cover first of all it’s a three-day event is it not 4 day it’s two days it’s two days we found the first year was three days and people were like I’m exhausted how am I supposed to go back to work so we brought it down to two days it’s um 100% virtual we have a fantastic platform so even if you can’t make a session in real time you can go back and watch it uh there’s for 30 days everything is still live on the platform it allows you to connect and network unlike anything I’ve
(1:03:39) ever seen so you can go in and connect with the speakers and we are so honored that you are going to be one of our speakers talking about you know your transition into investing in the US some of your key learnings uh and what you need to know and start thinking about when you’re investing in other markets um and so let me see what are the other benefits oh we do uh speed networking so you’ll have the opportunity to connect with people this will be of course people are now attending across Canada and the US so you’ll have the
(1:04:09) opportunity to build your network potentially find Partners find investors learn from people who are doing the types of deals and the types of things that you want to do so you can connect with them live on the platform we have a speaker Expo so all the speakers who are joining us are going to have gifts for all of our um all of our attendees and then you’ll be able to connect live with them as well and take advantage of the opportunity to actually connect with some of these people and like I said some of these some of our speakers
(1:04:37) they’re us-based you know even if you message them on social media you probably wouldn’t get a response whereas in the summit it’s a more intimate group it’s smaller and it’s really about what do we need to know as entrepreneurs how do we buy a business how do we invest in business how do we grow a business uh we focused a lot this year on financials because we want people to understand how to do proper due diligence so we have cherry who’s going to be on talking about of course taxation we have David RoR t on talking about how to actually
(1:05:08) run a profitable real estate business you know when do you get paid how do you know it’s okay to pay yourself um and then we just have it’s it’s business and real estate mixed so if you are someone who wants to learn how to run a real EST estate business a real estate adjacent business how to invest in a business buy a business this is 100% the best place to spend two days it’s the last weekend in September uh regular tickets right now are I think they’re 247 and then VIP is 297 but with the VIP ticket you get three accountability
(1:05:47) sessions with Victoria Megan and myself as well well that’s good value and we’re working on an extra special bonus for the VIPs possibly an inperson component for the inperson VIPs it could be we’re talking about that we’re talking about it and I have to say that’s tremendous value that you’re offering thank you it’s I wanted to be able to provide and this has always been my vision with the summit as well even when Corey and I have done it the last couple of years I want to provide people with high quality information for an
(1:06:23) affordable price uh that they might not have been able to do otherwise because I don’t want cost to be a barrier and I don’t want people to think that they have to have tens of thousands of dollars to learn how to do things properly so at the end you know this is not a big sales pitch these speakers are not paid to be here at the end they get a couple of minutes to say hey I have you know this option if you want to connect with me or if you want to buy something but the vast majority of the presentations from each speaker is
(1:06:52) quality information and content it’s not sales and you vetted each of these vendors each and speakers oh absolutely like we literally start with hundreds of potential people at the beginning of the year and we spend a ton of time talking to people and saying what information do you want right now what do you need what is missing from the marketplace right now what questions do you have and then every single year we curate and cultivate the content of the summit to be the questions that people are asking and we’re finding more and more people
(1:07:21) right now are frustrated with real estate they’re chasing their taals they can’t find deals where the numbers actually work and make sense so a lot of us are pivoting to this idea of how do I generate income not just from Real Estate not just by buying a property but how can we create something like I have with my commercial building where I can use real estate to make money to actually drive income yeah people like deals are out there people just work way harder to find them you you do and so this is where networking comes in right absolutely
(1:07:59) and then uh you and I were talking before we recording about how people are going quiet as well and people were messaging me about it as well because I posted something on my DM on my uh Instagram stories last night about I think a lot of people are gonna a lot of people real estate professionals will struggle in Canada yes especially if they sell real estate Investments y it’s um I think it’s a space that is it’s become a tough place to be I think people are lacking energy I think people are feeling kind of down
(1:08:31) and they’re feeling scared I mean there are some people out there who are just doing their own thing and rocking it and I have you know so much admiration for them um and I think that there’s a portion of the population that are having a really hard time right now and I’m happy to support those people yeah like again my several my past guests are doing fantastic so I don’t want to be all Gloom Doom and Gloom like I just had Marty and uh man uh Amanda and Marty Gordon on my show they’re doing great I just had uh Kelly Caldwell
(1:09:01) on my show she’s doing greator Clooney right I had uh Spencer and Ashley like there are ways to be fine at this but I think one of the things that makes them all um what the commonality between all of them is that they didn’t try to go crazy scale at the beginning yeah or all really absolutely and I think you know I don’t know all of your guests really well but I look at the people you named and they all have a business component to what they’re doing Victoria 100% is is business focused so it’s not just about I’m
(1:09:44) buying an apartment building and sitting on it like a chicken with an egg and waiting for it to hatch yeah she’s getting I’m sorry go ahead yeah it’s I’m actively involved I’m figuring out at the very least if I was buying an apartment building right now I’d have short mid and long-term rentals in there I’d have the three different types of income so that I had control over at least portion a portion of the building yeah it’s scary out there but in order to do that you need to have a team right you don’t want to
(1:10:10) be in there cleaning every Friday afternoon when someone leaves so you need to know how to build a team and back you’re back to your systems and processes to build an effective business yes and then again I categorize that as active business active investing so I kind of think investors have been sold a bill of goods with the idea that that it’s passive yeah like let’s call it what it really is yeah I I have challenges with that I I like to say as passive as it gets because that’s closer to a proper description uh for depending like what I
(1:10:47) do like with my duplexes in Hamilton for example it’s as passive as it gets no I’m not doing anything really that active but I still have to check in on it once in a while once once every quarter or six months or dealing with talking to tenants talking to property managers yeah so I am you have to know at the very least you have to know what your property manager doing to be able to see if they’re doing a good job are they worth the money are they taking care of your property yeah I’d love to get you to weigh in on do you think if
(1:11:23) the government changes over at the next election do you think they’re going to do away with the increase in the capital gains on the sale of properties so are people better off holding off if they’re thinking about selling right now are they better off holding off to see that’s what I’m doing because with the whole capital rate inclusion thing there are some good things to it but I generally think it’s bad because the way the system is was set up was for everyone to invest in real estate it was just a no brainer to that
(1:11:57) everyone invests in real estate including your principal residents because it’s taxfree the downside of that is all these wonderful companies that are starting up how do they raise Capital when they’re competing with the real estate market and then now with this capital rate inclusion why not the distinction between real estate versus investing in a Canadian business why are you punishing people from investing in a Canadian business right why why is it not a distinction you government taxes are generally incent incented to for you to
(1:12:31) do the right thing what is the best for society and the best thing for society is that we people like you and I who have Capital invest in small businesses but why would we when we’re taxed at the same rate as our real estate with these new with the new inclusion rates right so I don’t know what this government is thinking I’m going to guess the conservatives will do something to fix some of these things to to make it more um make it do more of the things it’s intended to do right stop making real estate the best investment there is in
(1:13:05) Canada and and to do more to support small business in Canada yeah that would be a really nice thing to see I think yeah it just makes sense right because by supporting small business that means more investment stay will stay here in Canada when we grow homegrown more of our own businesses and then we create more employ employment right and what do you think is going to happen in the real estate market in the next couple years I think it has no choice but to go up with the way things are with the with the immigration I think the number I saw was
(1:13:37) we had 200,000 new Canadians in the first six months of this year maybe not new Canadians but we have two 200,000 new people in the country so and I think the number was we had 36,000 new housing completions and they’re primarily Apartments so all those so the imbalance is still there uh but the continue problem will be just negative cash flow inflation’s really harming landlords um I don’t see how that uh how that self-corrects to make the market the way it used to be in terms of investor appetite I don’t know how it
(1:14:15) improves and especially when you throw out my messaging about investing in the states I don’t see how logically an investor would choose a comp or duplex in Canada over an income property in the states just purely logic to me yeah absolutely how tough is it to get your money back up across the border uh haven’t done it myself personally uh like I said one of the best wealth hacks anyone can ever do is marry their accountant so that’s more her problem um but again end of the day uh the overall tax implication is um my tax is
(1:14:54) the same there is no tax saving while I remain a Canadian so as long as you’re willing to pay tax you can you can have your money um but the way it is right now again based on my situation I’m probably just going to leave the money there and my intention is to grow the portfolio love it yeah and again I’m in I’m in the states almost a once a quarter now so if I’m GNA spend the money I’ll just spend it when I’m there good for you well congratulations on closing on your first property in the US yeah fun this I can’t wait to share more
(1:15:26) it it was incredibly easy compared to anything ever done before yeah and I think that’s the way things are going I think being away from long long-term rentals makes a lot of sense in almost across Canada U cash flows matters more than ever since capital gains are being taxed more so I might as well earn cash flow instead focus more on cash flow uh remove yourself from risk from from land low tener board so generally that means getting away for long-term rentals so yeah I keep thinking the government’s going to wake up and realize that this
(1:16:00) is what’s happening that landlords are leaving on mass I don’t based on legislation and Taxation it’s what they want and generally I find when you go against the government you’re generally going to be in trouble so just go with the government get a government job get a federal government job or invest elsewhere that’s what the government wants based on taxation for my experience for where I invest like Ontario is is dug forward conservative government yet we pay yet our rental increase allowed rental increases 2 and a half% the lowest in
(1:16:39) the country and our conservative government and that’s the maximum that can be that it can be that it can be because they put a cap on it yeah it’s cap on it and that’s the lowest in the country for allowable rent increase and that’s in a conservative but and again and we have a liberal government and and uh Toronto has an NDP mayor uh and it’s not so it’s not political we have problems everywhere but across the board doesn’t seem like they like landlords I agree with that yeah so so again I think naturally it makes sense
(1:17:12) to divest from long long-term rentals in Ontario largely in other places as well uh you know I was talking to a developer just before this call and like I wish you all the luck developer because we need more housing here but he too is looking to is long-term rentals here in Ontario and diversified to the states so again and that’s a real estate professional with 10 years experience so I think it’s just going to be the continued Trend within our community interesting well perhaps that will translate into some opportunities for
(1:17:40) newer younger people who want to take over and do some some management here in Ontario and um for those of us who want to go in other directions I’m so excited for the summit yeah yeah and that’s what I love about your summit is there’s lots of options out there it’s just people need to know who to listen to there are no as far as we know there’s no speakers who are going bankrupt on your stage and taking down all their investor money with them oh so sad out there no I I I try really hard to make sure that people are walking the talk
(1:18:16) and um that they have a tremendous amount of Integrity MH and then just very simple like uh just from observation anyone who started investing before last five years generally have done quite well and they’re still just fine yeah so it’s not all doom and gluma folks out there there’s actually lots of positives out there it’s just you know that’ll saying you are the average of the five people you hang out with and and like a client of mine I told her like because she was in one of these communities with a lot of lot of
(1:18:48) folks who are bankrupt I said you need to network with people outside of that Network yes right yeah you you need other opinions other perspectives other ideas you you need to spend time with people who are doing things the right way and you know what slow and steady it’s not sexy but slow and steady is not a bad thing in real estate like we need to bring back the popularity of one or two properties a year um you know making sure that you complete your renovation project and you are repositioned before you move on to your next one like that’s
(1:19:24) what’s killing people that’s what what’s killing some of the really big people is they’re buying too many projects they’re trying to execute too many things at once they’ve got too many Renos going on then the government changes the the criteria for being able to refinance and then they’re getting stuck with the money with the with the high cost money and a lot of that money is hard money some of these investors have hard money loans they call it private money I don’t know why how we ever got away from the term hard money hard money loans but
(1:19:50) they are hard money loans yeah all right well oh wait do we where can people learn more about the real estate uh resilience Summit I think it’s can I give you the email address and you can post it in the show notes I want to double check I just had a brain Gap it’s real estat resilience. CA but there’s um the website and then of course we are on uh Facebook and Instagram as well and we would absolutely love to have you join us if you can’t make it for the whole weekend you can go back and watch the recordings
(1:20:23) for the next 30 days on the platform if you are a VIP you will be given lifetime access to the recordings and of course all the contact information for all the speakers and then all the free gifts as well yeah real estate resilience. CA September Saturday September 28th 10 oh the West Coast people will appreciate that 10:30 a.m.
(1:20:48) eastern time start yeah we did it specifically for those West Coast people including Megan hubner who is a West Coast or was a West Coast person I’ve done so many events at like 9:00 a.m. on Saturdays and my vancouverite followers do not appreciate no no we 6 a.m on a Saturday we love our West Coast people so we want to make sure we include them yes because they have many of their own challenges as well yeah I’ve seen how much how expensive it is to develop I forget which city I was I was watching on on on social media the gentleman was
(1:21:22) sharing how how deals don’t pencil they they’re looking to build 1,200 units of rental purpose built rental housing and they’re going through how difficult it is based on the costs uh largely they’re talking about development charges yeah they talking about 10 20,000 per unit for development charges well I was where was I was I reading anyways um 30% of the cost of building is taxes and fees and those are all being passed on directly to the buyers so if the government waved some of the taxes and fees even a 15% drop in the
(1:22:00) new housing would make it much more affordable they to me is Bonkers when the government’s at least the municipal government collects property taxes after it’s built like you have this ongoing Revenue stream why do you have to gouge them up upfront as well yeah like you and I investors there’s so much we will do and invest to have that recurring stream of Revenue so much anyways oh you have Daniel F speaking that’s super cool yes he’s gonna talk about what he sees coming up for the next uh for the next little
(1:22:37) bit fantastic David RoR I don’t know him he wrote um um oh my goodness profit first for Real Estate Investors that’s his book I haven’t read that one I’ve read profit first yes so he he creat one specifically for obviously Real Estate Investors so he’s going to talk about how we should be allocating our money and um how to know like how to run numbers that’s super cool yeah because I really like the profit first book Cher live by it yeah all my accounts are set up that way so that that’s a great endorsement then if Cherry’s if cherry the
(1:23:18) accountant the expert accountant for Real Estate Investors loves what he said and what he’s written then having him on I think will be exciting um Daniel Kong is from Hawaii and he’s going to come on and talking talk about how he was able to leave his job he does flipping and wholesaling um uh uh Janelle Wilson who is going to be sort of our first um external speaker um she is going to be talking about Section 8 Housing and basically how she has built a tremendous business with Section 8 housing in the US fabulous but
(1:23:52) it’s available through share as well yes yeah absolutely but she’s talking about how to take adversity and turn it into opportunity which I think is a really important message for a lot of people right now because we faced a lot of adversity and how do we find the opportunity in that I’m a big fan of Glenn southernland as well I love his tell it like it is hilarious we thought you and Glenn would be amazing to share because you guys are both really real you you both share like this is where you know I’ve struggled this is where it’s been hard
(1:24:30) um this is what I’ve learned and that’s what we really want the summit to be is not the The razzled Dazzle this is not sales this is not marketing this is not this is really what you need to hear what you need to know yeah when Glenn was on my show he was very Frank about how challenging it his business is you how he earns his his Equity split of the deals yeah yeah he’s he’s been around a long time too he’s got a lot of Integrity too I think fabulous yeah he keeps it real he’s pretty OB he’s pretty transparent
(1:25:04) like he he’s pretty transparent on the show like this is my loss rate like this this is and that’s how it is and my thing is when people if anyone ever tells you they never lose money they either haven’t been in business long enough or they’re lying yeah I have um a client who’s a really successful flipper he does really well in addition to his other um investment models and he did eight flips last year and he said he didn’t make money on every single one of them but what happened was that the volume was high enough that overall he did
(1:25:36) really well but he said you know if I had only done one or two flips then I could have been underwater but it was because I had the higher volume that I um that I did so well yeah and part of that’s being resilient exactly right it’s it’s knowing that there are no guarantees that everything will turn out the way that you think it will or the way that you hope it will so you’ve got to have a couple of backup plans in your pocket yeah you have to have the resiliency to keep going because there will be losers and your financial plans have to account
(1:26:08) for account for losers is this the Melissa missa ker that is but she is everline social is what you’re looking for is her company got it yeah so she’s going to talk about marketing and how to um how to Brand ourselves how to communicate with people what’s working in the world of marketing right now because even if we’re not using marketing to attract new people into our world the reality is as an investor it’s a source of credibility and if you are not online and people can’t look you up and they can’t do their research then
(1:26:42) unfortunately you are um you don’t necessarily have the credibility that people are looking for take take a look at Janelle Wilson There session two she’s the one who’s doing the um section eight stuff she’s doing some really cool stuff that’s her yep that’s her fabulous yeah have friends with the law Section 8 hoses she’s I admire her so much she’s another one who’s just like tells it like it is I think we need more honesty in our world right now you know I talk so for those who don’t know like Elizabeth and I talk a
(1:27:25) lot in the background that that I’m sure many people would love to be privy to our conversations but yeah and part of the reality is out there is that those who pay for stages get it right those who pay to for to be on other people’s platform often they’re either they’re paying for it or they’re giving up percentage of the sales so they’re paying for it not always necessarily of the best people making it on the people stages other stages not this one which if that’s your business model that’s fine but I think there needs to
(1:27:57) be a little bit of transparency about it too oh my my she does auctions that’s amazing she’s got some really cool stories oh sorry for the listeners benefit I’m I’m sharing my screen actually on Janelle Wilson’s Instagram and and pictured is what looks like a bunch of roses that are boarded up and there’s literally a a a Power Shovel bulldozer on the front lawn of one of the properties for the folks who don’t know we do we do share the recordings on on um on YouTube so you can check us out there as well if you want to see it
(1:28:38) follow along with the visuals anyone else cover do you have time for this it’s like we just we forgot about Michael ponie like we don’t talk about him anymore who who can forget about Michael he brings so much value but everybody knows Michael Bethany laflam is another one that you might want to look at again these are people who are really crushing it in the US and I feel like we can learn a lot from them so let’s bring them to the Canadian audience let’s learn from them conscious wealth Creator she do some really cool things
(1:29:09) with sorry how do you how do you know these folks um some of these are Victoria some of these are people that I follow on um social media and I learned from them and then Victoria from her time as uh with invest her she helped to organize uh the national International invest her uh event amazing so she met a lot of these fantastic women like Bethany amazing anyone else we should profile you have time do you talk about I have time Mandy McAllister is another one Mandy buy oh I love it buying your business we should convince you
(1:29:57) oh seems like it’s a popular name there’s an actress named Annie mallister oh yes gobundance I think is her gobundance yeah interesting I think she yeah she’s official Mandy mallister oh super cool gobundance women because I’ve heard of gobundance uh for men not that it’s called that it’s just called gobundance of course and what’s she going to talk about um she’s going to talk about valuing businesses finding opportunities um what you need to know to start thinking about buying a business fantastic and again she’s American yes
(1:30:43) she’s American super cool so we’re both 5050 in terms of um in terms of split between Canadians and us um oh I like that set piece of Mind as your highest goal then organize your life around it I think I’m finally doing that yeah because you and I talk about it as well uh anecdotally I I I noticed that Health uh among my real estate friends and entrepreneur friends is is lower than that of uh my 9 to-5 friends yeah so while it looks sexy to be a real estate investor and an entrepreneur underneath a covers generally they have much more stressful
(1:31:27) lives yeah it’s funny because July um I committed to walking at least 10,000 steps a day love it and there were only two days where I missed one day I had a migraine and one day I was on the road and traveling but I feel different my body feels different literally after 30 days of hitting 10,000 steps a day that’s it are you doing that first thing or just all through the day um I generally do one walk in the morning and if it’s a shorter walk then I’ll do another one after dinner and uh now I’m putting in strength training as well I bought an X3
(1:32:06) system at the encouragement of one of my clients who has a health and wellness business so I will be starting to do that as of this week later this week what X3 sorry what’s that the X3 system so I’m not an expert on it but it is super cool because it literally takes you 10 minutes a day and it is it works with your body to um so one day is push one day is pull and it’s with bands a bar and bands love it and again it’s yeah that’s it I don’t even know how to pronounce the guy’s name but it’s super science-based and it’s about muscle
(1:32:53) fatigue with less damage to your joints I’m all about less damage to my joints is it John jaquish jaish I don’t know how you pronounce it I’ll post the little URL in the show notes but this is this is part of the power of networking right is that you know through networking I found Megan and Victoria to do the summit with and then through networking we found and vetted all of our speakers and through networking so Rachel Oliver introduced me to my client who has the cryo U therapy business which I’ve started
(1:33:30) focusing on my health and well-being with him he’s the one who actually recommended this to me and the cryotherapy that I’ve been doing has been amazing to help with my arthritis in my hips and it’s all all the positive changes that I’ve made have been as a result of the people that I’m spending time with at my networking you are the average of The Five People You spend the most time with absolutely and I betet those people with you and [Laughter] Christian absolutely this has been such a pleasure irn it is always so nice to
(1:34:10) connect with you and it’s interesting to hear that our Journeys are sort of you know we’re are even though we’re focusing we help people in different ways and we’re focusing on different things independently we’ve sort of ended up at the same place yeah boo longterm rentals I think my husband would have told you he was there about five years ago but you know yeah and then slow and boring it’s okay it’s funny because I’ve been criticized for calling things boring let’s just call it one property at a time one property a year can change your
(1:34:48) life yes remind yourself of that a and a vacant property per year will will change your life as to as well for the wrong ways so don’t forget that folks vacancy to me is like poison to a portfolio I I despise it and you feel the same I don’t know it depends I mean I’m certainly uh I’m heading to the landlord tenant board in a couple of weeks yeah yeah so there’s bad vacancy yeah there are times where I’m very grateful to have a vacant property in all honesty yes yes I’m my my lowest paying rent tenant is is is uh giving up his unit so
(1:35:27) I’m grateful for that vacancy as well yes there is good vacancy but uh systemic V vacancy not good and I I feel very fortunate that you know having been around as long as I have and having been to the landl tenant board I’m comfortable representing myself but I know that for a lot of investors they would have endured months and months of non-payment of rent the potential damages and then they’d have to go out and spend at least $800 hiring a paralal to represent them at the landlord tant board MH oh it’s sad I already know there’s a
(1:36:00) pargal on the other side I’ve already been given it that from the community legal help so I mean they they have a paralal they they have all the legal advice they need and I mean I prepared my my document uh my evidence and it was 160 Pages this is the one that’s disruptive to the other tenants no this is a different one this is one who’s actually out of the unit already and she brought a was a T2 where she’s saying that we ignored her and we didn’t do any maintenance or anything so 160 pages of all the back and forth the conversations
(1:36:35) the um the work orders the maintenance requests the um please stop harassing our staff when they’re in the property uh yeah that’s August 22nd so what does she want you have nothing to do but she’s already out of the unit what does she want just wants money she’s just how much how much that that this is worth it uh I think she’s asking for I don’t know let’s say $3,000 or something yeah be kidding me because she gets free legal aid that’s why and this doesn’t happen friendly USA I’ve already sent an email to the
(1:37:16) paralal and told them all the mistakes with all the documentation that was filed including that her husband’s name is nowhere on the lease he’s not a tenant he’s not someone that we recognize that she has sent all the documentation to the property management company and not to the legal owner of the building despite knowing who the legal own owner of the building is as per the lease the rent increases um I’ve Cent her documentation of all of the um complaints that she made and where we finally had to say to her you’re not allowed to be in the
(1:37:47) premises when we’re there completing work repairs because your harassment of our staff has been so bad MH um um and they have not withdrawn the the thing so they’re actually taking up time at the landlord in tended board somebody else with a valid issue could be heard because all that’s going to happen is I’m going to go on the 22nd and the uh the members going to look at it and say this is not a valid document the the information on it is completely incorrect you’ve named the wrong parties you don’t even have the owner of the
(1:38:17) property here like this is not valid my word but and that would save everybody time go I love the system I don’t know I’ll just show up with popcorn that’s all over zoom over zoom and and quite frankly up north we were over Zoom long before Co so crazy times one last time real estat resilience. CA thank you we’re so looking forward to having you and Glenn and everyone else join us last weekend of September it’s truly going to be life-changing yep Saturday September 28th and Sunday 29th see you all there 100% virtual so I’ll
(1:39:00) see you there too and affordable thanks again Elizabeth thanks for coming on thank you irn always great to see you take care thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.
(1:39:24) com I publish at least two to three videos a week here so subscribe if you want to keep learning from seasoned investors like myself and my guests and if you’re just starting out feel free to ask questions and comment below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor tr.com

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** Transcript Auto-Generated**

(00:00) a broken Canada no way we’re richer than ever but tell it to young people who don’t have Rich parents living on their own paying rent 1,800 for a basement apartment yes that’s what I’m asking for my basement apartment not just one bacon welcome to the truth about real estate investing show for Canadians where’re a little podcast that started in 2016 with well over 300 episodes we’re probably approaching 350 by now each an hour long and these days we have an unpopular opinion depending on where you stand on the future for real EST investing in
(00:31) Canada friend of the show Scott dilam owner of Len City who can broker as in he can accept referrals from other mortgage professionals to who want to help their clients obtaining us mortgages with us lenders uh beyond the Canadian Banks um appreciate that Canadian Banks still use your local credit which most of us real Real Estate Investors don’t want to because we’re all tapped out anyways uh Scott’s been on boarding and signing uh a numerous number of mortgage professionals agents and Brokers so anyways I spoke to some
(01:02) of them uh just this past last week and one of them said uh again these are veterans uh to quote to quote Bill he said I see no business case to invest in a Canadian investment property unless the parent is buying a student home for their kids to go to college or university for 10 years end quote what I love about mortgage professionals is they know numbers hence they’re fans of well Bill and uh Dory and I are on a call because they want to learn more about us income properties because they’ve seen the numbers that we off that we’re that
(01:38) our clients are doing at share o over the Canadian deals that they they’re used to looking for and uh just quick side note I’ve yet to have anyone debate me uh that uh that I’m wrong anyways uh so there so yes I agree there is good business be done in flipping on repositioning properties wholesaling developing which are all much more active businesses or Investments so it’s hardly passive so again I agree with all those things there’s tons of that to be done I’ve seen I have lots of past guests of the show who are making making hay on those
(02:18) types of businesses um if you don’t believe me just look at you know half my past guess anyways uh but again I’ve yet to have anyone disagree with me that us long-term rentals uh are better than Canadian Mones pretty much again if you PLL Canadian investors these days there’s almost no one buying something that has long-term rental attached to it uh for that reason uh I have a bad feeling for investor focused real estate uh realter and uh mortgage professionals going forward my advice to my clients uh for many reasons uh other
(02:55) than just the state of the the Canadian Market is to diversify to the US hold uh maybe even sell some of their Canadian properties if they’re unable to hold them or if they no longer serve them uh I could be wrong I admittedly I could always be wrong but the I’ve been generally right on these long-term trends uh based on the information we have right now um for example uh my colleague Tim uh Tim Hong who on my team a member of Rockstar real estate like myself uh he posted a real on his Instagram showing the difference between
(03:26) ATT tenanted three-bedroom properties uh that are are vacant owner occupied again these are three bedroom properties in Kitchen warl Cambridge he he was showing stats comparing uh tenanted or occupi sorry tenanted properties versus vacant or or occupied properties the tenanted properties were selling for an average of $60,000 less than nonr tenanted properties and they took 65% longer to sell that’s 38 days on Market versus 23 and this is just what happens to sell now that’s not these aren’t perfect comparisons but that gives you an idea
(04:02) on what the market thinks about tenant properties so uh I posted I posted uh screen capture in the link in the show notes so you can grab it there or you can follow my my my colleague I recommend that you do follow Tim Hong on Instagram because honestly he’s hilarious and he tells it like it is which is why we get along so well uh the current market is telling us that they they they Value Rental Properties less than regular properties we are even seeing the same for vacant legal duplexes in Hamilton uh my investment my
(04:31) my investment thesis was the host with the Bas in our apartment AKA in in the west they call a mortgage helper I I always thought it would be the most desirable property as it would be more affordable than a sing than a regular single dwelling home live in one unit rent out the other but uh based on the market that we’re in today the market does not want to be a landlord of long-term rentals and then in general a lot of these markets are are quite against uh airb be short-term rentals in general uh so that may be the case may
(05:05) change once we have rate cuts and the market goes back to being nuts uh but the current math is the current math income properties in the USA have better numbers with less tenant risks no rent control no landlord ten boore uh to me the more investors the more conventing investors get educated on how easy it is to invest in the USA the better uh the better for them so they can avoid honestly the troubles I’ve been through I’ve had three basement uh three basement’s flood I’ve had four visits personally where I’ve had to go visit to
(05:35) the landlord tenant Tribunal for tenant issues for nonpayment of rent for tenant vandalism uh and if you’ve never been to the LTV before that’s a short term for it it’s easily one of the most depressing places to be uh so again I can’t wait I’m having so much fun in my work I cannot wait to lead the journey for many uh speaking of we are back on September 17th with an all new free training uh a 101 of real estate investing uh style to now incorporate the best practices of both local real estate investing and the USA I’ll go into more
(06:10) detail uh about the property I just bought in St San Antonio Texas uh so on realtor.com they actually list uh my property as having 2,200 fet I paid 265 for the house for all you condo investors out there you all know square foot costs so the math says I bought my house at $120 us per square foot how’s that compared to condos which are $ 13 to $1,800 a square foot oh also my rent is $2,300 per month I’ll share that my latest economic research including which markets which Market we recently took off our list to invest in which will
(06:51) again be an unpopular opinion uh but uh we at share we have no geography bias because we basically service the entire country um so if you can service the whole country why not just cherry pick the best markets with only Mark with Market leaders in their Industries making historic levels of investment to me it’s a very pragmatic decision a broken quote a broken Canada no way were wealthier than before the pandemic end quote uh some brighter news as per for the headline that is the headline of a recent tal Star article house owners and
(07:29) those with stock portfolios are generally better off now than they were before the pandemic in terms of net worth I have no argument there I person my client vast majority of my clients and I have benefited greatly U by holding properties since the p since before the pandemic started where I disagree though is that every conversation I have with someone in the real estate Community or anyone younger than me with limited assets they all complain about the lack of affordability um for anyone who’s a parent they all
(07:59) are concerned for their kids uh due to the lack of affordability um a lot of folks know they can make more money in the states or they have friends who are already leaving in Canada or have already left because they’re make they can go make more money in the states uh they can and there’s many places in the world they can pay more less tax maybe not many but generally the conversation centers around the USA or Dubai uh for lifestyle I’m hearing more and more Canadians are going to Mexico Costa Rica or even southern Europe the grass may be greener
(08:28) on the side but the truth is we all know talented people who are investing outside Canada for sure there’s t i we have my phone won’t stop bringing FK on on folks interested in investing outside of Canada there some folks are preparing to leave some have already left I was just the I was just chatting with uh friends who had moved to Florida and the question comes back to am I leaving right now just my capital is leaving uh based on the world today the way things are in Canada today I don’t expect my kids to stay in Canada
(08:58) after University uh for the same reasons I mentioned it before uh and uh and the other thing is I’ve spoken to a lot of parents who have kids in high school and they all tell me that the good programs here in Canada at our wonderful universities they’re really hard to get into like 90s 95s High 90s to get in honestly I don’t think my I don’t know if my kids have that in them uh and also where our local kids are having to compete with uh SP uh with International students a lot of stud spots are saved for international
(09:32) students so uh the writing’s on the wall I’m at least mentally preparing myself that my kids will have to be International students themselves as in they won’t go to school in Canada uh for College University sadly uh speaking of Education oh we have a college instructor on this week’s show Brian Gordon is an old friend of mine from years ago I believe we met both I think we first messed each other at rain uh he works full-time for the largest appraisal company in Canada if not North America in a management position uh I’ve
(10:06) linked his his LinkedIn in the show notes if you want to know who it is we’re we’re not naming it because we’re not we’re not here to promote his employer anyways prior to that he works for as a senior property tax analyst for one of Canada’s largest REITs if not the biggest uh you know working for the re that is owned by one of Canada’s biggest million billionaires again you can get the details on on uh Brian’s LinkedIn uh Brian has been methodically growing his own real estate portfolio over a 7-year period consisting of a dup a collection
(10:36) of duplexes an Airbnb in Blue Mountain and more recently an 11px uh development in Branford Ontario where he’s adding two additional units so super cool um adding value that’s typically a good way to go uh as mentioned Brian is a course creator and instructor of it’s called Uh real estate investment strategies at George Brown College a comprehensive yet affordable course which is one of the big reasons why I wanted to have him on the show real estate investing is largely about return on investment and that includes what one the dollars one
(11:08) invests in one’s education Brian’s the course that Brian teaches it’s only $392 24 cents uh and I’m pretty sure there’s government stuff out there that uh that will that will help you make this even cheaper it’s a 20-hour course and it includes some private one-on-one consultation Time with Brian that Brian will in the show what an absolute steal uh I’ve got a link in the show not show notes for this course again it’s real estate investment strategies uh online and if you add George Brown when you’re Googling you’ll find it that’s how I
(11:42) found it needless to say I thoroughly enjoyed recording this episode it’s always a pleasure to speak to folks who are very very well-versed in real estate investing again he’s been in full-time his day job is working in analyzing properties for over 10 years uh so you better believe Brian knows what the deal looks like and we need more of those folks in this community so anyways we’re going to learn Brian’s tips and tricks so we may all learn uh for ourselves to add so we may improve our own businesses Brian recently returned from
(12:16) Mount Everest or yeah I think that’s right uh inde he did kgal recently as well so he he’s here to share these absolutely extreme experiences and again talk about my favorite subject real estate investing uh and of course we you want to hear about Brian’s next Investments uh what his views are on the Canadian opportunities please enjoy the [Music] show hi Brian what’s keeping you busy these days what’s keeping me busy um I’d say probably my garden Suite that I’m working on right now um first time ever doing a garden Suite you know I think
(12:59) it’s the city of Toronto um introduced it what was it last year um changing zoning so I’m working on a converting a detached garage into uh one-bedroom Garden Suite so very excited about that project it’s my first Garden Suite ever so a lot a lot of learnings with that but very excited about that project now tell us some more uh are you is it going to be two unit one unit how you financing it yeah yeah great question so it’s going to be uh one unit it’s about 400 square feet so what makes the numbers work with this particular
(13:32) project is because I know a couple other investors that are building Garden suites and have built Garden Suite but on average you’re spending about $350,000 for a garden Suite give or take I know people Sor are you’re tearing down the garage so no so what makes my numbers work and what makes it make what makes it make sense is that I’m going to use my existing detach garage got it and convert that into the one bedroom so my all-in cost is going to be approximately $160,000 and that’s hard and soft cost so Renovations the hard cost is going to be
(14:04) about $130,000 and then soft cost and then I’m going to add you know I’m building a shed but anyways there’s some other ancillary things that I hadn’t expected um to or I didn’t budget for but roughly it’s going to be about 160,000 right and this particular property it’s a triplex in Toronto the young and fut exting Triplex then the the garage will be a fourth unit exactly sorry yeah no no the garage is going to be a fourth unit that’s right and so it’s a great location I should be able to get rents upwards of
(14:34) $2,400 plus utilities um and I had one of my property managers come out to you know take a look at the property and give me their you know their perspective on rents and so on so he said anywhere from 22 to $2,400 Daisy and so it makes sense so if I’m all in at $160,000 and you know my financing is at say 6% interest only it makes sense and you know as we all know interest rates have started to come down um there’s been two what interest rate decreases in the past what month or two yeah so and two more expected this
(15:11) year yeah exactly at least two more expected this year so it makes sense what I don’t think makes sense is building a garden suite and spending $350 to $500,000 and getting 26 $2,700 for rents right um and what but a lot of people are promoting it these days a lot of people are promoting this year and I have friends that done it and what I like with what I’m doing is and that’s was a this was an idea from my property manager is I think this property the specific property will will help with that missing middle um you’re not going
(15:42) to be able to put a family in there but you’ll be able to put a couple for you know a couple one or two people and it’s going to be relatively affordable um versus you know spending $35 $33,700 for a two or three bedroom Garden Suite right so I could have built a 2 or three bedroom Garden Suite 800 ft um but that would have cost me probably upwards of $350 to $400,000 right so I opted to just stick with the shell yeah spend $160,000 that increases affordability for many people and it just it just makes more sense so it’s a lot more
(16:18) affordable and it’ll attract a lot more people and that was kind of my rationale for sticking with the existing detach garage and not tearing it down and starting from scratch any feedback from the existing tenants in yeah Sorry’s up with that yeah oh yeah great question so that’s been a challenge dealing with tenants so anyone that has invested before and has done Renovations where there’s existing tenants there’s always going to be issues and I’ve done that with my first projects about seven years ago and I promised myself I would never
(16:48) do it again I had no choice because it’s a Triplex so I’m not going to get rid of all the tenants U myself included so there are challenges so one one of the things that happened is when I was getting the trench dug to put in the piping the contractor ran over one of my tenant bikes so warped the bike yeah and so my tenant showed me he was good about it he’s like you know I wasn’t going to make it a big deal but you know it’s going to cost quite a bit so I told him don’t worry about it just invoice me go get it fixed invoice me and I’ll pay for
(17:18) it um you know my uh the again when the trench was getting dug the contractor blocked in my tenant cuz my tenant didn’t move his car yet and so my tenant’s car was there and he couldn’t use it and he had to go out so I said you know I’m a very reasonable landlord and I believe in treating people fairly so I told my I told my tenant look if you need to go out take an Uber give me the invoice and I’ll pay for it right because you want to keep good tenant relations right um so I’ve had challenges with that and you know my my
(17:47) projects already should have been done technically this week but I’m only at the point where I’ll probably be calling for inspections early next week so I’m probably halfway there so I’m way behind schedule but again that being said when a contractor tells me a Project’s going to be done in a month I budget for two months so although I’m behind scheduled based on what he projected I in my mind I’m more or less on track I’m a little behind but I’m still more or less on track and neighbors been okay with this
(18:15) cuz you have right you have right to do this absolutely by you can do this yeah by right you can do this in the city of Toronto which is awesome and my neighbors actually have been awesome so my neighbor to my right he owns there’s a sixplex on the right side um of where I live and he’s very very nice guy and you know my my contractor damaged the fence right so he was very good about he didn’t even mention it I told him I’ll fix it um and actually I got to know him a lot better which is nice um but yeah there’s been no issues with with uh
(18:45) fantastic with tenants yeah sorry was not tenants my neighbors which has been good I don’t know if we mentioned for listeners benefit you live in the triplex yeah so I live in the top unit so when I purchased a Triplex 2 years ago two years ago yeah about two years just over two years ago the main the top floor was vacant um so I renovated it gutted it um almost to the studs and refinish the entire unit oh wow so it’s a 1200t unit it was a two-bedroom unit I then converted it into a 2+ one um beautiful unit my contractor did a
(19:19) fantastic job and um yeah so I live on the top unit and the main and the basement unit are currently rented MH and because it’s City Toronto that’s why you can get at these kind of rents you’re probably not far from the subway no so I’m probably a 10-minute walk to Finch Station amazing and then probably about 11 minute walk to North York Center so yeah so that’s why I can get these great rents because you know an older two-bedroom apartment would is renting for about $2,600 whereas I just rented my basement
(19:49) a two-bedroom basement about 800 ft um for 24 plus utilities right so those rents are pretty good amazing yeah because your walk score is probably like 99 exactly exactly walking score to everything shops like you said transit entertainment very cool now we’ve we’ve talked micro I want to talk to my backup now now um what I like about you as a guest is you your entire career has essentially been in real estate including your education can you can you share about that sure so I went back to school as a mature student probably
(20:25) about 12 years ago and so I got laid off from my job I used to work for the Law Society and I knew I wanted to go back to school I just didn’t know what program I wanted to take and so I scurried through all the colleges universities real estate has always been a passion of mine since I my early 20s and I wasn’t necessarily looking for a real estate program but I wanted to finally take a program that would interest me so anyways long story short I started looking at a number of programs and I found this program that
(20:56) was offered through the University of British Columbia and senica college it was a joint program and I started looking at the courses and they all resonated with me so it was like um real estate investment analysis um property tax and Appraisal property tax and assessment uh law courses real estate law and so it just it to me it was a no-brainer it was a two-year program but because I had um previous gone to University and college before I was able to accelerate it and do it in eight months right and uh which means so l
(21:29) courses yeah so less exactly less courses it was it was still tough though I think I was taking six to seven courses a semester okay versus normal is like five yeah versus normal so you’re like 20 40% more workload exactly so it was intense like I didn’t see my family for eight months it was insane but it was totally worth the sacrifice and so with that graduated with um that diploma certificate from UBC in property tax and assessment so I’m technically a qualified appraiser I can go and start appraising properties
(21:58) if I wanted to right now I work for an appraisal company I decided not to go that route um as soon as I finished school I was hired by one of the larger reachs yeah um so a big one yeah big one so Choice proper they used to be called Canadian Real Estate Investment Trust but they were bought by Choice Properties so they’re you know gayen Weston they own all the Shoppers Drug Mars the LA Blas Etc um throughout Canada so they’re huge R um one got be one of the biggest oh yeah by far they’re one of the biggest if not the
(22:27) biggest now since the merger and so they own office Towers commercial properties they own industrial again right across Canada so they’re Coast to Coast so I used to work in the property tax and assessment uh department so I’d manage Consultants do the budgets for property tax um related I do forecasting for future um developments when they’re finished you know how much they were pay in property taxes um but what again what was cool though what I got excited about is the fact that my vice president was the vice president of developments and
(22:56) so he was in charge of all the acquisitions and dispositions so I was sitting with all the guys that were buying properties that were you know budgeting for huge developments you know $2 billion office properties commercial properties so I was in that group so I got to see it hear it and again I’ve always loved real estate always passionate about real estate so I learned a ton you know just by being there and you know being around those guys and uh yeah so from there I got recruited um to one of the companies
(23:27) that does the assessment and um um assessment in Ontario um from actually one of my former professors um she was the vice president there and I got recruited from her and then so I moved over there and yeah so I’ve been with so what what year was that mov that year was 2015 December 2015 you’re making me age myself or when um for the listener’s benefit we have we need to justify your reason to be here absolutely why did you listen so yeah so December 2015 I started at um this assessment organization and I’ve been there for 8
(24:00) and a half years in management and a senior management position now oh sorry just for the listen benefit for privacy reason we’re not naming it but it’s a big one that everybody knows yeah absolutely absolutely absolutely um you know I’m not there on I’m not here on their behalf which is why I’m not going to name it but but yeah they’re the biggest in North America okay right and uh so yeah so I is a it’s a National Organization right no provincial provincial okay so every province has their own jurisdiction and
(24:30) even some provinces it’s broken down by municipality so but again we’re the largest in North America I believe definitely Canada but I’m pretty certain in North America right and then what what kind of real estate did you assess all of it any Farm everything so every single property type in Ontario so Farm um office Towers you know TD Tower downtown Sky doome yeah so failing marks for anyone who can’t guess who this is but basically basically you can easily Google it you can easily Google me right um but yeah they’re they’re
(25:06) they’re huge and you know again so I’m I love real estate passion about real estate this allowed me to be in the real estate industry from a different perspective because I work in stakeholder relations um there but and it’s good relations and to me that’s my when people ask you what’s your superpower it’s to me it’s it’s relationship like I’m a relationship person you know naturally I enjoy people I’m able to build relationships with people very naturally easy and so that’s you know it’s no surprise at my day job I’m in I
(25:39) guess stakeholder relations amazing yeah that’s cool so yeah you’ve seen lots of stuff yeah seen lots of stuff like I said my background educational background um is in real estate assessment Taxation and of course you know I’ve been a real estate investor I’d say seriously for about nine years um and and yeah so I I have the Practical I guess and the theory mhm behind what I do and your day job isn’t it yeah and you’re paid lots of money to do this stuff yeah I get paid decent I got paid decent definitely I have no
(26:09) complaints uh sorry quick question about the UBC synica program is it still around yeah absolutely it is around actually I met with the coordinator of the program a month ago cuz I started a scholarship um at the program I started it a couple months ago actually it was one of my goals this year um in honor of my brother who passed away years ago in a car accident s so thanks so I so I started a scholarship on on his behalf and I was just met with the dean for a coffee who’s a lovely person and uh we were just catching up so because again
(26:42) the program was like you said it’s still around very beneficial did a ton for me from a career standpoint yeah um and just I I can’t see enough about the program right right because before we recording we were talking about like private education around this and coaching programs and how you know they can range from like 10 to 35,000 I’ve seen yeah per year versus like how much do you think this how much is the UBC course for example uh the program probably you’re probably looking at I don’t know maybe two grand two three grand a semester I’m
(27:13) sure inflation but still you know say you spend 10 grand for the two semesters if you do the accelerated program which is what I did you’re you’re almost guaranteed a job right basically they have like a 90% um chance that you’ll get a job when because such huge demand and it’s such a niche industry so you can either do inhouse property tax for a major re you can work for an assessment jurisdiction you can work for as an appraiser you can work as a consultant for property tax like you have a lot of opportunities and because the industry
(27:44) is so Niche there’s just not a lot of people right I actually have this conversation with a lot of investors when they like they tell me about what they’re paying for coaching whatever and then they’re they want to they want to do a development project and learn on the job I’m like yeah why not just get a job yeah and then not risk your credit and capital in like your home which is often the security for the development yeah yeah no absolutely like you can go learn on someone else’s dime and get paid for it well that’s it so but you’re right
(28:11) though right cuz it’s a it’s a win-win you’re learning you’re getting paid for it and you know most people I would argue and the best way to learn is learn by doing right and so you get to learn on someone else’s dime yeah you get paid yeah you mentorship it’s all part of the job you don’t have to pay for it exactly so to me it’s a win-win right right um and which is kind of how it worked out with me fortunately um especially at at the re right yeah so you you you have a wealth of knowledge to apply to your own
(28:41) portfolio so tell us about tell us about what are you investing sure so so this is your own portfolio yeah so my own personal portfolio that I built over the past seven years consists of several triplexes in Pickering and ashaa specifically um so you know the Ty go buy a detached property at a legal secondary Suite so I have several duplexes in again aswa Pickering I have a Airbnb in Blue Mountain that’s worked out really well I bought that about seven years ago8 minutes yet I paid $250,000 for a three bedroomroom four
(29:15) bath town home and uh 9 minute walk to the Village my actually my son and his friends are there right now sorry for the listeners benefit this is our I don’t really want to say it but it’s like a equ it’s Ontario’s equivalent to Whistler yes yeah Fair yeah fair not as nice but not as nice not not world class skiing but you know Ontario is really populated so they get a ton of people up there it’s a huge tourist destination humongous huge and so with that prices have you know more than tripled since I bought it so I I that property that was
(29:48) more luck than anything else and so I bought that with some investors so that worked out really well um I have a that Triplex that I’m converting now to a fourplex Young and Finch which which I bought two years ago I have a 11 unit building in Brandford where I bought with my partner and I we currently adding two more units so the property is more or less stabilized now which is awesome we bought that just under a year ago we bought that last year August closed on it last year August and we’re just working on like I said we have
(30:20) permits for the 12th unit we’re working on we’re getting a we applied for a minor variance for the 13th but that should go through and then we’ll be able to add two more units to that are these additions or within the existing envelope yeah so so one of them is we’re converting the washer the the laundry room laundry room thank you to a unit and then so that’s in the existing envelope and so we’re relocating the laundry room into the hallway the hallway is massive it’s a waste of space so we’ll close it off and add the washer
(30:51) and dryers there and then the other one we’re adding on top of the um existing envelope of the property so cost a bit more but okay so it’s like a top up exactly exactly how much is a topup cost so we don’t have many people doing top-ups in we’re budgeting about 160 grand for it because it’s going to be a small unit so it shouldn’t cost too much really cuz we’ll make the building is Brick but we’ll just use vinyl for this for the side we’ll put it off to the side so it won’t cost too much okay um how long does that take and there many
(31:21) contractors that do this yeah yeah so we’re we we’re still in the process of getting quotes because we’re still W we’re still waiting for the minor variants um but we got a quote for the first one I think we budgeted 70 grand for the first one because we’re using the existing envelope it’s it’s like a 400 square feet property around there and um so that’s not going to cost a lot Plumbing is already there electrical is already there it’s just about running um further plumbing and of course your framing your studs your drywall Etc
(31:50) kitchen bathroom exactly exactly IKEA style right um so that’s so that’s ongoing U my part George he takes the majority of lead on that so shout out to George and U also Sir George is more like the like the operations guy yeah he’s the operations guy so it’s interesting we so we’re both active investors and I’ve never I’ve never been a passive investor in my life so when we decided to team up to do this project you know we were talking back and forth you know who’s how do we do this right and I reached divide up the work right so I reached
(32:20) out to one of my mentors um ask him like you know you know how should we divide it how should we do it what are your thoughts and I got and he the exact same thing so the long story short is he takes most of the lead you know I provide you know my expertise in terms of knowledge um you know resources where he needed but he does a lot of the boots on the ground work which looking back at it now I’m glad I live in Toronto yeah bf’s a little far for you far for me much closer for him and traffic’s horrendous traffic’s horrendous and it allows me to
(32:51) continue working on my projects allows me to continue teaching and do all the great things that I really prefer to do yeah things you enjoy exactly and it’s a different tenant profile right and that’s one of the things what do you mean between braford and Toronto evening but even but even just the product type right so everyone touts multif family and multif family is great but you with multif family unless the property is in Toronto and even Toronto has sketchy multif family um um tenants but the tenant profile is just very different
(33:26) yeah for 11 unit in Brandford will be different than a duplex in aswa very different very different right like asosa you have workingclass people they’re not going to skip out on on your rent assuming you know you you you screen properly um I’ve never had an issue with a tenant in terms of R paying rent whereas Branford again totally different tenant profile apartment um but you’re also assuming these tenants you didn’t place them exactly totally different yeah so we got I think three or four units were vacant when we got it
(33:56) and now it’s fully stabilized which is is great we’re getting great rents um so right you know things are looking good but still different tenant profile which well an 11 unit in ashaa would likely have a similar profile to Brandford absolutely versus the duplex because the rents are in the duplex are way higher so again the price point kind of filters out your like well sort out your demographic yeah exactly price point and and and your T target audience with a duplex you’re going to get a small family one kid maybe two again they’re
(34:24) not going to skip out on on your rent you know in the middle middle of the night and do a and dash right you’re not going to get that generally speaking I’m generalizing but you’re not going to get that type of tenant profile with a duplex um whereas 12 Unit in ashaa or brenford some of those tents have probably been there forever exactly exactly so some like be on government assistance and again I’m generalizing stere for sure you get talking from my experience you get that and that’s why for me I’m decided to stick with you
(34:56) know like singles duplex Triplex because of the ten yeah and what I’m looking for in life yeah like yeah I the same thing like I think everyone should just um Define who they want as their Customer because you’re going to be they’ll be part of your life yeah so if if if certain people you don’t want to be part them to be part of your life then maybe that’s not for you agree like for example like in an 11 Plex in Branford so I’ll use my own experience like if it was an 11 Plex in Hamilton you know probably half the
(35:24) units the tend to smoke which is their right I don’t like smoke so I don’t want to be there so that’s why it’s not part of my strategy yeah and we had that same issue too when we moved in for months tenant smoking your Tri no not no not the Trix no in the uh Branford got it yeah all right so to your point my in my Triplex I have young the true definition of like young professionals just both graduated from um UFT master’s program got jobs before they graduated and working I think for celestica and oh they’re making good
(35:59) money though yeah yeah both making good money young tech people um yeah and my other tenant is an engineer yeah right so totally different tenant profile right which I prefer I want I want peace in my life yeah yeah right and again I don’t I I am passionate about real estate but I’m more passionate about traveling and spending time in family so amazing that’s my focus okay we need to take the travel but I still need to get the George Brown can I say that yeah yeah of course absolutely yeah how do you end up teaching college yeah so so
(36:30) great question something that I didn’t expect I would do too so one of my best my best friend uh we we go out once a month we’ll have dinner we’ll talk about life like everyone else business Etc and I told him that I want to create a a program and a real estate program for um new investors and I’m thinking about may maybe not sure how I’ll set it up would I do a workshop on the weekend like many other investors um but I wanted to teach it at a college and he was like yeah that’s a great idea he’s like well I’m uh you know I teach
(37:03) at George Brown and I can connect you and I’m like oh my gosh I forgot that you teach there right so the next day it’s it’s a part-time thing for him too totally yeah yeah he he doesn’t teach you anymore he actually he facilitates the the um he’s just one of the coordinators so he built um an HR program there and so he he connected me with the dean of continuing education and we had a like a three-hour conversation back in um your first conversation was 3 hours about 2 hours about a 2our conversation we hit it off
(37:35) still long yeah we hit it off really nice guy he was totally um interested and and in what I was going to going to uh offer in terms of you know the Target and George Brown doesn’t have a program like that and I don’t think any college has a program like that and um so he looked me up you know he did some research on me I could tell he went on my LinkedIn profile and obviously wanted to make sure I was credible and you know did some other due diligence and then he called me back a couple weeks later and he’s like yeah we’d love to have you
(38:02) teach so I developed the program the curriculum and uh that took several weeks and then I started teaching so the course is geared to new investors and the reason I did that is selfishly is because I know when I was in my early 20s you know internet wasn’t as readily available as it was you know I had no one to go to you know I guess the typical immigrant parents they were trying to you didn’t have a smartphone that used access the internet no not at all and I didn’t have anyone in my circle that I could use as a mentor or
(38:34) leverage and so that’s why I wanted to create this program that could be a starting block for new investors right um like someone like the 20-year-old you yeah ex exactly a 20-year-old me surprisingly enough my my the age range of the program is probably on uh probably maybe 40 right because it is done through the continuing education program okay in the evening so which is fine though because these people are more likely to take action this age group they either have a house or they’re thinking about buying a house so I just hope more young
(39:08) people would take it too some 18y olds 20y olds no I haven’t I think the youngest person in my program so far is probably late 20s right because I’m guessing they don’t get a they don’t this this credit isn’t credited to wordss or diplomas exactly exactly it isn’t credited towards a certificate program or diploma and nor do I want to build a curriculum that way way like my focus is just to give them enough tools and I try to make it as practical as possible that’s the benefit right not just Theory just practical so I provide resources I
(39:39) provide podcasts you know like so one of my slides is here are some real estate investment groups in Alberta because I have students in Alberta I had a student reach out um from New Brunswick that’s going to take my course so I find real estate groups saying Hey cuz to me one of the things that you should do as an investor is join a real estate group like that propelled me as a new invest and durh exactly durh sh Quinton yeah shout out quintona and that helped Propel my investment career and so that’s one of the things I promote right
(40:09) so I have a slide with you know a number of real estate groups in the GTA that I think are credible I have you know podcast you know one of the podcasts that I listen to right again free education so yes you are going to have to pay for certain things but you know what are what are other ways that you can educate yourself um and podcast is a great way it’s free you can listen to it at your leisure so again practical tools I try to I provide to the students and steps that they can take to start their Journey amazing how long did it take you
(40:40) to put together this course oh probably about a month and a half right how many hours do you think that was oh god of effort maybe 50 hours okay 50 hours um the good part is a lot of the knowledge I already had a lot of the knowledge it was just putting it on paper putting it on a slide deck presenting it properly making sure that I’m not using a lot of jargon and I can explain it easily to the students and then you know where I have the gaps because I’m definitely not an expert in every field I’ll bring in a
(41:16) expert in the industry right so if I want to present on short short-term rentals or midterm rentals I’ll bring in a midterm Rental specialist um if I’m really passionate about a project um or shouldn’t say a project but a strategy that I think is working right now I’ll bring in an expert on that strategy if I’m not the expert so it’s awesome because you know you have you get to obviously hear me speak and and you know try to share my knowledge but then you also have experts in the industry that you wouldn’t typically have access to
(41:46) unless you’re paying hundreds of dollars or thousands of dollars for coaching or workshops Etc and so it’s it’s a huge win for the students and where can people find more information on on the George Brown course yeah so if you go to George Brown continuing education uh course you can find it there I think it’s under the business um program but I I would just type up real George Brown real estate investment strategies and it’ll come up so again just type George Brown real estate investment strategies and you’ll see the course I typically
(42:14) run it each semester so the next course starts I think September 11th and then I I run it again in the winter and I think the next course is around February and then I take the summer off because I like to spend time with family and and just relax and it’s it’s $10 to $35,000 to take this course it’s actually 26,000 no I’m kidding so again for limited time only for limited time only there’s only eight slots left run to the back of the room going back to what I said earlier I wanted to provide the education to the audience again I
(42:48) thought about myself when I was in you know when I when I was 20 years or 20 years ago and I couldn’t afford a course for 10 or $5,000 25 years ago and so I wasn’t going to even consider charging that much I wanted to make sure it was accessible and affordable for the average person so the course is around $400 and it’s eight courses for roughly three hours I think it’s two and a half hours once a week so it’s a very affordable course and what I like is that so a lot of people like you irn they’ll reach out to me on Instagram and
(43:21) say hey can I pick your brain can I take you for lunch and you know I’m probably too nice when it comes to that I will always do it and so now what I do is and you know it’s not and I’m not promoting my course but what I tell them is take the course and then I’m happy to have a couple consults with you after because I know that if you are serious you’ll spend $400 but if you’re not serious you’re not going to spend $400 and I’m frankly I’m just not going to spend time with you right yeah so that especially with like absolute begin your questions
(43:52) should I incorporate or not uh what are the top cities to invest in yeah yeah that’s that’s like the number one rookie question I always tell people that what what uh should I incorporate now or later like but yeah so it allows me to actually step one figure out how to make money basically right we’re all going to pay taxes yeah so it allows me to sift through people that are actually going to take action um which you know so so to spend $400 not a lot of money they can start to learn and then like I said I I do provide my time I tell each
(44:23) student I’ll give them three hours of free consult to help them along their Journey right afterwards for a $400 course yeah where they’re going to learn a bunch of stuff to get three hours of your time as well yeah which is insane I mean I know myself I’ve paid $400 an hour to consult with certain people yeah well our lawyers are like right and I even saying other Real Estate Investors that I respect I’ve spent upwards of $400 for an hour of consult right so you’re getting I don’t know what is it 24 hours for $400 so anyways I think it I
(44:57) think it’s a great program um especially for what you’re what you’re paying and it’s it’s a great way to start you know if you’re a seasoned investor this is definitely not for you um but for those people that want to start the process and they have they don’t know where to go they don’t have resources then this is a great way to start I always think it’s good for refresher as well especially for $400 and you can take this anytime you want you deliver it live looks like I deliver it live September’s delivered live 6 6:15 p.m.
(45:25) on Wednesdays delivered live and you get the recording yeah you get the recording right how long you get to keep the recording you can keep it as long as you want if you download it oh wow yeah which is cool yeah okay and you get you get my slides as well um but and you get to meet other people you get to build relationships with other industry folks because again I bring in a lot so what I’ve heard from many students is that one of the greatest benefits that they’ve seen is that the resources that I bring that I
(45:53) bring in right so again I bring in experts in the industry um from you know whether it’s folks in the west whether it’s folks in the East so you know if you live in the East or you want to invest in the east then I’ll bring in experts in the East that can whether it’s a real estate agent whether it’s a mortgage specialist to um you know to help people on their Journey because as you know Irwin if you’re going to become an investor you want to work with investor focused everything investor focused agent investor focused mortgage
(46:20) broker investor Focus appraiser etc etc and so these are the resources that I bring in that I make available to my students which otherwise they wouldn’t know how to do folks you’ve already vetted exactly yeah cuz I you and I both know that you can’t trust everybody oh gosh and that’s one of the things I stress on my course is that just because someone’s on Instagram yeah you know in front of a plane or in front of a fancy car means nothing yeah a lot of those people went bankrupt recently yeah exactly sadly so sadly to your point you
(46:50) know I make sure I vet the people and that you know they’re aligned with my values right it’s not all about money yeah we all want to make money that’s fantastic but like they actually truly want to help people that’s important to me yeah amazing and we before we recording we were talking about like return on investment you know if your investment for Education starts at $400 there’s a good chance your return on investment will outperform no question a lot of things yeah right no question I know I know I’ve had people on the show
(47:19) who who’ve taken like $30,000 programs whatnot I had one that took I had someone that took paid 40,000 and it was complet they said it was complete sham uh so you know negative Roi for 40,000 but again like you know this is a small bite yep small bite great way to leverage resources great way to see if you want to get started and you know one one of my first class I tell people tell my students that you know before you even consider becoming a real estate investor you need to decide what type of real estate investor you want to be
(47:53) meaning are you going to be an active partner are you going to be a passive um um investor sorry active investor or passive investor and I met one of my students um I won’t say her name but she she was actually at the event I saw you at that Rockstar event the last one actually and um she’s a doctor and she’s like I don’t need the money obviously right but I’m going to retire soon and I need someone to keep myself stimulated and so I told I told her and I met her after and I said you need to figure out what type of investor
(48:22) you want to be based on where you are and then we met her for a coffee a couple weeks ago and she said she’s like okay Brian I’ve decided I want to be a passive investor for now until I wind up my practice and then also become active and I’m like awesome you know now your next step is deciding who you want to partner with right so again everyone thinks they want to become an investor or an active investor but there’s other ways to become um an investor right like through channels like share um which we’ll probably talk about later but
(48:49) there’s different ways to still invest in real estate but not be an active investor as you know Irwin right I will say and I think always it always I always like to repeat it is uh in my experience people who get rich are generally the ones who who are somewhat active by definition they’re active and I’ll qualify by that saying U they’re they’re 100% owners yeah right it’s it’s I don’t know many passive investors who get rich going that way if they get rich if they make a lot of money like a million or more it’s typically because
(49:21) they have a lot of money to put in right exactly and they don’t need the money originally right it’s just a great way for them to diversify and on the flip side though the people who are losing their shirts were the active investors as well true so more risk right more risk more risk but then we we this the stuff that’s going on that like neither of you or I were ever touch no no like we before we were recording you were talking about and I say this all the time I do one project at a time y right like my Project’s not over until tenants
(49:48) in rent rent’s being paid and collected and properties refinance for me like again I’m very methodical and some people will say slow so part of the that my investment Club I know people are doing FES or were doing five or six Burrs flips at the same time and I’m like wow that’s fantastic but I’ve always said I’m going to buy renovate you know Place ATT tenant like you said refinance the property and once my refinance is done then I’ll take a break for couple weeks and then I’ll look for the next property so that cycle is
(50:18) usually about 8 months from beginning to end and so I you know for the past seven or eight years I’ve been buying a property about every eight months but it worked for me I have two kids I enjoy full-time job I and a parttime job and a parttime job and now I teach as well so you know my time is very precious like most of ours and I want to make sure that I’m using my time in the best way and I don’t want I don’t I don’t need to do two or three Deals you know simultaneously I don’t need that for my goals again and you know or I don’t have
(50:52) to tell you but one of the first things you should do when when you become an investor is saying you know what are my goals what are my objectives what am I trying to achieve and I didn’t that was a mistake I made I just did what everyone else was doing but um you need to decide like what are what are your goals what are your objectives and the strategy should then be determined based on what your objectives and goals are right where they should align and so you really need to determine like what are you trying to achieve with your
(51:18) Investments um so yeah that’s kind the point of the show as well is like if uh for example I have like I’ll have like stars like yourself like Thea like Ryan Carr on the show and then I extract from them like what their day-to-day looks like what what that period of life has been like for them to to You Know M build massive portfolios and now for an investor who’s listening to this like I want to be like Ryan Carr like okay understand Ryan car is like a 7 to S guy seven days a week 7:00 a.m.
(51:48) to 7 p.m. that’s how he works like oh I don’t want to do that but I want the same results like can’t have it both ways I don’t know how you get there is my point and that’s kind of the point of the show when I have people like that on right like you know and then like for me I know I’m not that so I Stay in My Own Lane agree right and again that’s the kind of the point of the show like this is how they got there and now decide for yourself where you fit into that yeah I agree with you 100% And I remember when
(52:11) I was when I was traveling with Quinton last month he said to me he’s like you know there’s times that I’m very stressed like there’s a lot of stress that comes with having a portfolio and it really made me think to exactly what you were saying like you know it’s great to be extremely successful but understand that there’s downsides right stressed um you have to be available you know so it’s in many cases you can’t have it both ways like you have to put the work in you have to put the time in if you want a mass a massive portfolio
(52:41) yeah and and uh and like we are in real estate winter right now I was talking to uh someone you know someone you know as well who whose apartment buildings to sell and I don’t even think they’re getting showings and she’s a great investor and she your buildings aren’t even getting showings yeah right I know who you’re talking about yeah so it’s whereas fast forward or go back two years ago and people were buying side on scene yeah villains were going like hot cake Hot Cakes it’s six PL I’ll write the offer right now yeah no totally I
(53:12) remember I was flying looking at look looking for apartment buildings it was it was a totally different environment totally crazy totally crazy um but you know and everyone was celebrating everyone was making money but like uh but yeah so many people have gone quiet social media right now for example yeah well it’s again it’s telling and again I tell my students yeah the war Muffet quote right yeah like when what does it go again when when the goes out yeah you know who’s swimming naked and this is what you’re seeing so I expect to see a
(53:43) lot of investors disappear a lot I expect to see only a few investors really left over the next couple years which is why I still think there’s you know there’s still a ton of opportunities depending on the strategy but a lot of people have already disappeared right you know you’ve seen the news um headlines like I have you know we’re in the Investment Circle you know we you know I hear things people that I know that have done extremely well you know they tell me about other people that have reached out to them and
(54:10) see if they see if they’re buying yeah yeah yeah I have this to sell you buying exactly so although again what people yeah we went from flying to fine building leads to sellers of of owners of apartment buildings calling you to see if you’re buying you’re 100% right people reached out to me and said hey this person’s selling their buildings they’re offloading all their buildings really but it’s it’s just a different time and you have to understand that and some of the great best advice I’ve gotten from one of my previous mentors
(54:39) was that you have to have staying power and I was like what do you mean what do you mean by that right and what he said is older guy’s I think he’s probably 60 and so he’s been through the ups and downs of the real estate cycle and he’s like you know there are going to be bad times and you you need to have you need to be liquid enough to get through those bad times and Co taught me if Co taught me anything was that from a financial standpoint was that when covid hit I wasn’t liquid um April rolled around and like
(55:14) many investors I was very concerned because we thought you know Doug Ford was telling people not to pay rent um politicians were saying not to pay rent I love that and so I was worried right that who wasn’t exactly every investor was worried everyone was sh so I’m running I’m running all these models saying okay what do I look like and I had access to you know line of credits and so on right I access a ton of line of credits but I did not have a lot of cash right right you know give God thanks all my tenants continued to pay
(55:43) but it taught me a lesson without going through the lesson was that I was not comfortable relying just on my helocs to get me through bad times so I started raising Capital right enough Capital right to to get me through the back at times which is actually the only reason why I was really able to buy that apartment building that I bought last year because I had Capital um for an emergency fund MH so you know a lot of people have have come through the situation where you know we’re all dealing with rough times
(56:13) now because of interest rates but you know a lot of people are overleveraged they have no Capital available and no liquidity they have no liquidity right no credit no credit no liquidity and sorry I’ll clarify credit like they’re credible it says lenders ain’t lending lenders aren’t lending you know they have to exit deals like we were talking about with private money um you know I raise private money for this this uh duplex s not duplex this building that we bought fantastic deal we did a vtb and then a good friend of mine led us to
(56:49) rest privately um but I made sure that I had like threee btb right because I knew this wasn’t going to pass anytime soon soon um and so so far it’s working out extremely well but I told people if you’re going to do a btb now or private funds you better have it for at least two to three years at a minimum and this was about a year ago yeah get through real estate winter get through real estate winter but um but yeah so it’s tough times you know I don’t wish ill on anyone I hope everyone’s able to make it through this you know this downturn but
(57:21) that’s not going to be the situation no it’s going to be pretty bad yeah yeah it’s going be this is going to be the worst correction I’ve seen because um you I I saw some people go belly back in 0807 0708 but the commun the investment the community is way larger now yeah and there um and The Leverage that people took on was way higher than back then yeah by far Yeah by far by far so we are going to see way more Carnage here cuz a lot of it was hard money loans in this current time versus back then it was people with people it was largely equity
(57:56) deals back then yeah yeah but the cash flow just yeah well the credit ran up credit problems cash flow problems and that that put people under but like all the this current generation they never learn from those mistakes because they’re brand new y yeah and they never like I said experience there’s one thing you know when you when you teach Theory or you listen to Theory but you really learn through taking action and actual practical experience and a lot of these folks have never been through a downturn yeah right so they don’t know how to
(58:24) react yeah 2008 was a credit crisis meaning there was no credit so your portfolio should be stress tested against what if you can’t get more credit yeah and most people don’t even understand that right so again I stress tested my portfolio I don’t know I can’t tell you how many times over the past three years right whereas you know newer investors I mean you upwards of five years they probably don’t even know how to stress test their their portfolio properly because they they can just continue to raise money right right or
(58:51) or or interest rates not interest rates or values continue to go up so it’s you know it’s good times and you know even myself included I got pretty comfortable in that prices were just going up right um but you know it’s unfortunate but again I think there’s going to be more opportunities because there’s going to be a lot less investors right in the next for people who have capital and credit exactly for people which we’ve always known yeah you have capital on credit you will win Agreed 100% now we Al you and I have also talked about a
(59:19) bit about the states as well what what are you seeing I think most people know where our standpoint is yeah I think most people and like I said recording I don’t want to drink my own Kool-Aid no no no but I so here’s there’s a couple reasons I like the states I think Canada you know and I love Canada I was born and raised in Canada is on an economic decline right like even if you don’t understand money and I spend a lot of time understanding money money supply um the history of money and how money works and so on
(59:50) right but even if you don’t understand that and you know you’re not really into that Canada has has and had a a productivity problem right we’re just not productive which is interesting considering that we bring in and I was thinking about this on the way here we we bring in record numbers of immigrants and especially way more per capita than the US oh yeah then you ask yourself why is Canada not as productive right because a lot of the productivity The Innovation the entrepreneurship comes from immigrants right at least in the
(1:00:23) states and some degree here too so why musk was an immigrant yeah so so why do we have such a productivity problem right and we could spend hours talking about that but the reality is Canada is on an economic decline um our productivity is like the lowest I think in the G7 and the bright spot of Canada right now is Alberta because of oil of course um but and they’re attracting all the talent of people and they’re attracting all the talent absorbing it from everyone else and they have aord housing so where does that leave the rest of
(1:00:59) Canada um we live in Ontario you know you probably know Ontario has the highest sub sovereign debt in the world meaning if Ontario was a country they’d be the most indebted in the world most people don’t know that so think about that for a second yeah and while our services haven’t improved hasn’t Ser has healthare and education haven’t improved so what does that mean Irwin it means that governments have to raise taxes which they did which they did and will continue to raise taxes um it means that it will be tougher for
(1:01:29) landlords or rental providers going forward investors period investors period there’s no question in my opinion so if you believe those things which I do I think it’s prudent to look elsewhere so and I also realized too and a friend of mine was telling me this when we were traveling it’s like he said he owns a number of properties in the States because a him and his wife were thinking about moving there wintering there but also he never has to change you his Canadian currency when he travels to the US and I’m like that’s a
(1:02:02) fantastic idea if nothing especially at today’s rates especially at today’s rates they were like 72 cents right now yeah especially after the most recent announcement uh interest rate announcement yesterday and so you ask yourself where are you going to go right you know we we border the the country that has the largest um the largest economy in the world or is almost everything right and that has similar property rights which are important to Canada yeah and that’s still very productive and still has the the world
(1:02:42) Reserve currency sure it’ll be gone in 20 30 years but yeah yeah we’ll be dead i’ probably be dead by then I may be dead by then no maybe not yeah but but I’ll be well set up for it exactly that’s my point that’s my point right so I’ve started doing some research I started talking to different people i’ I’ve had a couple calls with Sher I started doing my own macro research um no different than what I teach in you know my course and we should have lunch and talk about it totally should so I’ve narrowed down my search to Atlanta oh
(1:03:12) that’s where I’m going to buy and I started researching the neighborhoods the only thing I don’t know with is am I going to go with am I going to get use share to support the process for the first couple properties and go on my own or do I just go on my own and just start buying so that’s that’s where I’m at right now I want to take a trip to Atlanta either this month MH or next month just deciding on life because I may have some Life Changes soon so if that does happen then I’ll probably go in mid August um if not I’ll go in I’ll
(1:03:42) go September and do boots on the ground and and just to get a feel I’m a very visual tactile person so I like to see touch and feel and I find taking a couple trips out there um just to get a feel of communities and so on make sense but I’m I am my focus after completing this Garden Suite in Toronto will be the US um single family homes yeah yeah and I I keep having to CU Canadians are generally marketed courses around much more advanced things I find CU because there’s no cash flow in single family homes condos single
(1:04:15) detach duplexes really y so almost everyone comes to me like oh I’m on a garden Suite I’ll buy a apartment building like in your they’re a complete novice and they’re like why are you buying single family home in the states like so like literally my house in San Antonio is a 5.1 cap rate Wow versus duplexes for my math for like Osa Ottawa Hamilton roughly about like a 4.1 to 4.
(1:04:40) 3 yeah and think about it right if you could buy a single family house in a GTA you would go nuts and just start buying single family homes right the least tenant issues yeah at least tenant issues um you’re not dealing with multiple tenants you don’t have to split the utilities split you’re getting a higher profile tenant your property manager loves you property manager loves you it just makes sense so you can go to the largest economy in the world in great neighborhoods beautiful homes oh they’re so nice and cash flow or break even on a single
(1:05:15) family house yeah yeah why would I complicate it I’m a simple guy Irwin so to me it just makes sense from a currency diversification standpoint a geographic diversification standpoint and like I said unfortunately things are going to get worse in so many different ways in Ontario again whether it’s it’s um increased taxes U more Pro um tenant legislation anti- landlord anti capitalist sentiment anti- capitalist sentiment anti- bus sentiment at some point people are just going to give up investors right and seen well yeah you
(1:05:56) see it I’m sure you saw the same stats the same stats I saw where they said there were record outflows of capital um in Canada record right B Canadians Canadians aren’t investing locally Canadians aren’t investing locally and although people will always hate on landlords but the reality is you know there are small landlords like us or rental providers like us that are you know that own one to 20 units we’re the ones that are responsible for producing like 80% of the housing in Ontario by adding one two or three Suites so if
(1:06:29) people like us are leaving and I can’t tell you irn there’s not a there’s not a real estate meeting or real estate session that goes by where I speak to an investor that either has left or they’re thinking about leaving mhm yeah wait till I talk to them honestly so not everyone’s going to leave and don’t get me wrong I still think there’s opportunities here from like small development intensification yeah but I think you really I think if you look long term the opportunities are going to dry up in the GTA yeah in the next I don’t
(1:07:08) know three four years yeah like even just simply like my my uh cash to close in my house in San Antonio is 67,000 American wow right like that’s your hard cost on your garden Suite or 130,000 Canadian I paid I paid what did I pay I paid I think I paid like 25,000 land transfer tax oh my God on this Triplex I bought two years ago was insane some ridiculous amount Hey cuz it’s Toronto yeah CU of Toronto you’re paying double land transfer tax but you know I I think it’s prudent to start looking at other options yeah
(1:07:46) my advice to my clients is um you know you don’t have to sell everything but your your next purchase you have to compare to what we’re doing in the States agree agreed and and I’m not going to like there’s a couple properties I have I don’t I don’t usually buy new construction at all but I did buy a new construction um in Georg and Bay I paid 600,000 for 2200t end unit town home on a golf course sounds amazing yeah fantastic deal it’s gone up hundreds of thousands of dollars and they keep pushing the closing which is
(1:08:17) fantastic for me um but I also own a property in Blue Mountain with investors that property the property in Georgia Bay I won 100% And but I I’m not going to keep both properties right like I don’t need two I don’t need both properties so I’ll sell one of those and I’ll divert that cash to the states um but I will sell one or two properties and invest there and right now I’m just in the process of raising capital and I’ll use some of my own to make my first purchase but I think you have to look outside of Ontario or Canada I think you
(1:08:50) we’re we’re at a point now where it’s not a nice to have it’s a I think you almost have to start looking outside to me I think it’s a baseline I think I think a share of property for everyone in that and you know obviously I’m biased but Al straight up I make more money selling a local property in commission wise than I do in in the states not even close uh but yeah so my bias my professional opinion is a share of property should be everyone’s Baseline and compare everything against that yeah both in terms of cash flow return and
(1:09:22) effort and capital out outlay right like we know many people who are shelling up 300 350 to build Garden suites yeah right 350 I know a friend of built the 350 I know someone who spent 500,000 yeah and you get no land with that right and because we in real estate cuz we want hard assets yeah I get I have a large lot in the state I’m getting my San Antonio property but but it’s a good point though because if you spend 350,000 on a garden Suite you 200,000 yeah but let’s say you’re going to be conservative you wanted to dip your feed
(1:09:54) in and you bought it cash 300,000 like I don’t know or like it said buy two properties spit it I don’t know I just think at that at this point now a lot of investors are looking for ways to continue to invest and until something changes with Garden suites the math doesn’t make sense because if you spend $350,000 you’re better off lending it at 10% ideally using two tfsas so you don’t pay taxes and then you pay tax on the other because interest interest interest income is taxed high and but otherwise like it it doesn’t make
(1:10:29) Financial sense I’m generalizing to build a garden Suite yeah I agree with that right I don’t even think it makes sense for a basement Suite no because if you spend say you spend 80 grand on a basement Suite 90 oh that’s a cheap one okay yeah I mean if you’re if you don’t have connection you’ll spend 130 but I would probably end up spending about 90 right it’s still worth it because 90 so you do that in Ashawa you’ll get $1900 rent it’s still worth it now if I know people a friend of mine she just finished a
(1:11:01) basement she spent 180 Grand for basement and some cosmetic finishes at the top so at some point it doesn’t make sense but it doesn’t make sense because the purchase price is too high so whether it’s whether it makes sense to spend the money on a basement apartment you can’t buy the house to spend the money on the basement apartment because prices are too high so it doesn’t make sense dup the duplex formula is gone that ship has sailed years ago it doesn’t make sense which is why people are you know pushing Garden suites but
(1:11:30) Garden suites also don’t make sense unless in my opinion you can use a detached garage to do it yeah do with in an existing building exactly but otherwise Garden suites don’t make sense yeah yeah so I’ll throw in at the other pieces uh my current observation of the current market is that the market we uh for example I believe there’s six legal duplexes in the in sitting in Hamilton that aren’t selling they’re vacant wow so the market is telling me that buyers don’t want rental property like there’s a cuz my original
(1:12:01) philosophy with buying doing basement suiting duplexes was that people would want the mortgage assistance from having the rent being able to rent out part of the house M but the the current market is telling me that’s not not wanted anymore interesting right the the the uh the market is telling me that like being a landlord is like a basically a stigma no one there the market does not want to be a landlord so that part that plays into my decision why would I invest all that money if buyers don’t want it now
(1:12:31) that’s a snapshot of this current market I don’t know what’s going to happen a year from now but based on what I know today this is where it is and and if the LTB doesn’t improve how does this how does this change well we know that’s not going to improve and and well you know what it’s funny because my students I’ve had a couple students reach out to me and and they don’t want to buy an Ontario at all they’re just not interested they won’t yeah buy an Ontario and it’s because of they don’t want to be landlords because they’re afraid of
(1:12:59) they don’t want exposure to the LTB exactly which is reasonable which is very reasonable and so they’re looking at other options so even new investors which I mean most new investors they want to invest close to home it’s familiar you know they feel it’s easier money though right which is more money but even new investors now which is interesting they’re not they don’t even want to invest in Ontario so it tells you how bad things are mhm mhm right and even my one experience is being a realtor uh is converting rich people to
(1:13:30) become landlords in Ontario really difficult oh yeah yeah because they don’t to them it’s not worth it no because they’re rich yeah they’re rich they value their peace and they don’t want the headaches y yeah so again so that plays into my decision my my own current theory that it doesn’t make sense to basement Suite or garden sweet yeah and as you get older too or as I get older you know my my needs change right so I’m not going to yeah do some of the things that I did when I started 79 years ago right oh yeah this is fluid
(1:14:03) I want is fluid right I want more peace right so to more to me single family homes in great markets makes sense yeah I was just in I was in Atlanta just uh two months ago for uh a networking meeting among seven figure entrepreneurs and I met a rapping manager there who who manages 800 units wow I’m like oh you have a qualified what are you buying next single family homes okay okay you just more of my own Kool-Aid but again qualified opinion right yeah no agreed agreed all right we have to talk about Everest because
(1:14:38) you’re crazy sure let’s talk about Everest what do you want to talk about what L you the people die wait did you see bodies no well we saw we saw a shrine so let me backtrack so I’m sorry I’m just getting right into it let me backtrack so why did I do Everest let’s backtrack so I climbed kilamanjaro last year and the reason I did it was because my my mentor at the time as we were planning out I think 2023 he he wanted me one of the things he wanted me to do was he wanted me to do something that was going to challenge me physically and
(1:15:13) mentally and make me uncomfortable yeah you could go run a 5k right could you could but so this was December 2022 and I had just come back from a trip with a couple Durham REI members and I remember Quinton saying that he was going to he was going to climb Kil Manjaro and when he told me I kind of gave I kind of just did the whole IR roll thing cuz I was like yeah good for you right and um you know I moved on and then when I sat with my my mentor at the time I was like okay and I so anyway I went back and I messaged Quinton and I
(1:15:43) was like hey is there a room for me right cuz I was like oh that’s going to make me uncomfortable I’ve never even camped before I’ve never slept in I’ve never slept in a sleeping bag before I’m not an outdoors person nothing so I knew this would make me a hardcore city boy yeah I’m a city boy right I mean sure I go to a cottage but I’m in a nice Lake I’m sleeping indoors airing air conditioning yeah yeah the weather’s not going to kill you outside no no not at all so I knew this was going to challenge me mentally physically push me
(1:16:11) make me uncomfortable and anyway long story short I I you know I went on that trip to uh to kilamanjaro how hard is that oh it was very hard the last night I got very sick I could barely I so we started we started our Trek about 12:00 in the morning and it was a 10-hour Trek to get to the peak so it was- 20 um it was you’re wearing so you’re wearing five layers B bottom and top I felt amazing I started walking ear than I kid you not within 50 minutes of starting you know the ascent 12:00 in the morning I felt sick I started
(1:16:47) getting hot flashes I thought I was going to pass out so I I needed to sit what was this altitude sickness food poisoning was it altitude sickness that that got you no yeah altitude sickness and long story short so for the next 15 20 hours going up and down I struggled I could barely walk I was literally taking four steps pausing for I don’t know two or three minutes the uh our Sherpa thank God they were were awesome they were literally feeding me my protein bars because I was so weak it was it was absolutely it it was the most difficult
(1:17:24) thing I’ve ever done in my Life by far hands down um wait hang on how much harder is Everest then so the difference I find with Everest is most of kilamanjaro was manageable except the last night right Summit night so the last 36 hours that was absolute hell the difference with Everest is every day was difficult it was manageable but every day was very difficult so I think overall Everest was harder than kilamanjaro um you know but everyone has their own opinion but the views with Everest were absolutely stunning but again very
(1:18:04) mentally tough you know physically tough but it’s worth it it’s worth it so I’m a big believer in pushing yourself making yourself uncomfortable I think those things build resilience when things go bad like they are now with you know many Real Estate Investors and I think it makes you it just makes you a better person father husband wife because it builds resilience if you if you purposely put yourself in uncomfortable situations you’re going to build that experience experience on how to deal with uncomfortable situations right so
(1:18:34) when they actually occur um involuntarily you have that experience and you don’t bury yourself your head in the sand so to me it’s it’s it’s done wonders for me I think over the past couple years I know it sounds crazy and I’m not a like I’m people are like oh you’re a hiker I’m like no I’m not a hiker I mean I like it but I’m not a hiker I just do it to push myself and you meet amazing people which has been pretty awesome did you get sick wait how do you prepare yourself for altitude so when I was climbing Killy I went to a gym
(1:19:06) downtown Toronto called altitude and they can simulate the loss of oxygen mask and so you can simulate different elevations so I did that um to train and then for Everest it was just regular training you know strength training cardio um hiking up Mountain ski hills in Toronto they have a couple ski hills in Toronto and so i’ you know walk up and down the hills um how how many months was prep for Everest so Everest I prepped for four months I started January and serious May yeah so four months and yeah so it’s you know it’s a lot of
(1:19:43) training you have to walk you should walk at least three or four hours a couple times a week just so your body gets used to walking that long cuz generally you’re walking 6 to 8 hours a day uphill sometimes just steps which I was expecting so you could walk 3 hours up a up a hill just step after step after step you know in 35° weather so it’s brutal sorry 35 Fahrenheit or Celsius 30 Celsius it was hot yeah hot so the first couple days it’s very hot oh yeah yeah first couple days it’s very hot because you’re at sea
(1:20:15) level right okay and then and then once yeah once you start ascending it gets colder and colder and colder and colder right so like where that picture was taken that was a base camp and you know so there’s glaciers off to the side you can see glaciers and just um yeah absolutely incredible for the listeners benefit we’re looking at uh Brian’s Instagram uh acquiring wisdom base C 5,000 almost 5,400 meter elevation yeah so about that’s what uh it’s probably about 16 17,000 feet above sea level what’s the equivalent in Canada would
(1:20:52) that that’s Canada we’re probably at sea level so maybe like would would B be close to that elevation no not even close not even close nothing nothing in North America nothing North America no okay nothing in North America South America has a couple mountains that are huge AK in kagwa um but nothing close to this would you recommend this experience absolutely I re so here’s what I tell people you don’t need to climb a mountain uh most people won’t that’s fine but just find things that are going to push you and make you uncomfortable
(1:21:22) so if you’re afraid of heights you know maybe do the Tower um walk outside I think you did that right did you do that done three times doing a. this summer yeah so do that right it’s going to make you uncomfortable it’s going to push you do whatever is that you know is going to make you uncomfortable it’s going to push you because there’s lots of local options there are a lot of local options but one of the cool things is again we were talking about I’m a relationship person and you meet people from all over
(1:21:48) the world yeah right and which we all stay in contact we have a WhatsApp group so a lot of the people that I climb kill them on J are the same people that I climbed Everest with right and we’re all we’re it’s an experience of travel you’re you’re all bonded for life exactly exactly and you know we stay in contact you know we message each other all the time so it’s very cool and you know we’re planning our next trip we’ll see where that takes us but it’s awesome Atlanta Georgia there’s mountain to climb there but yeah I’m I’m just a big
(1:22:20) believer in pushing yourself amazing right all right all we’re running out of time Brian I always like to give some um some open air to my my guests anything we haven’t covered or you want to share um not really just take action in life be intentional about life regardless of what it is if you want to build wealth take action if you want to become a better father be intentional you know I book date nights with my daughter you know I book you know date nights with my son just be intentional put it in your calendar and just be
(1:22:51) intentional about life whatever that is for you whatever important to you be intentional amazing uh Instagram acquiring wisdom search I’ll have the George Brown Link in the show notes but what can they search George Brown George Brown College real estate investment strategies course amazing yeah so if you’re thinking about getting into real estate this a great first option right ridiculously affordable um feel free to message me if you want some more details or you just want to B some ideas off me and learn more about the course maybe
(1:23:21) some people should even just sign up their adult children for it yeah actually I met uh I was meeting who did I meet with a couple weeks ago and they’re actually oh my one of my co-workers and she’s uh she’s going to do that um pay for adults on to do it amazing yeah any us component to this course so I actually I do have a us I had a US speaker last time someone who invests in the US because it’s this is what people want right it wasn’t my intention but people are inquiring about investing in the US because
(1:23:50) unfortunately they’re afraid to invest in Canada it’s kind of sad actually yeah if you need Carmen Demetri or Andrew I’m sure we can set that up yeah yeah for sure well my next class like I said starts September so we’ll have you guys on Amazing happy to assist awesome because I I feel like we’re like I feel every day I’m doing a public service by sparing Ontario landlords cuz hard assets we still need it still need hard assets absolutely yeah yeah yeah if if like you you you mentioned like if the US dollar fails in 30 years that the
(1:24:25) US Canadian dollar had already failed somewhere along the way exactly well that that’s how I look at it right the Canadian dollar will fail way before the US dollar yeah yeah way before so we we need diversification outside of Canada even if the Canadian economy was doing well relative to its peers we still need diversification outside of Canada yeah yeah hard assets yeah take your pick yeah exactly you and I have our favorites obvious yeah all right Brian thanks again for doing this no glad to be here and hopefully people saw some value in
(1:25:00) it thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.com guest and if you’re just starting out feel free to ask questions and comment below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual
(1:25:37) class that’s at investor training.com

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(00:01) it’s a Bittersweet day as I’m selling my daughter’s reses I call it a real estate savings plan this is the truth about real estate investing show for Canadians and the truth is investors are selling way more often than buying that’s what I’m seeing uh in well that’s what I’m hearing from my own clients and I’m hearing from other high level investors and Realtors I’ve uh what I’ve learned in this real estate winter is that my small residential investment properties single
(00:27) family homes that I’ve renovated to be student rentals or leave basement apartments are much more liquid than any other piece of real estate that’s out there my investment properties that I’ve sold three of them so far uh while I’ve optimized them for income in location they each sold in 7 14 or 32 days those are seller Market Days in Market uh those are those are numbers indicative of a seller’s market now compare that to apartment buildings commercial retail offices industrial multif family
(00:57) Cottages condos whatever nothing today’s market has more demand than a single family house in a good neighbor good and safe neighborhood so there should be no question why I’m bringing the same investment model with me to the states uh industrial is hot too uh I’m I’m hearing from experts that vacancy rates are below 5% which is incredibly low historically for the industrial Market uh but again you can’t say the same for any other category of real estate um talk to any talk to any local apartment
(01:27) building owner for example like if you do have cash you can find a good deal out there because there’s not much competition out there uh cc is not in a hurry to refinance renovated apartment buildings which has been a you know C has been has been a Lynch pin to many many apartment building strategies uh for for folks who do like the repositioning which is means you know to turn when you tend to turn over you renovate and raise the rents that whole strategy again it’s heavily reliant on cmhc ensuring the mortgage for refinance
(02:01) uh ver but based on where what I’m hearing on the street is cmhc is focusing more on actually creating Supply so there are supporting developers which is the actual solution to solving a housing crisis unless we you know kind of slow down the immigration anyways that is the truth about real estate investing for Canadians and I’m ha and I’ll happily put my money where my mouth is my name is Rano host of this little podcast in 2016 that is ranked as highest number 81 on iTunes in the business category as
(02:29) mentioned listing I’m listing my daughter’s house that I bought for her back in 2015 just months after she was born sorry that’s 2014 I bought it bought that house back in 2014 I converted it into a student rental for college students those students were rough on the property so when legal basements were available as a strategy I went ahead and renovated the basement legally with permits with the help of Andy train uh again converting that basement into a an apartment two-bedroom apartment with inite laundry uh and rented it up to
(03:01) long-term tenants back in 2017 those tants were pretty good uh and they stayed up until this most recent this past may this April April sorry uh they’ve they always paid and why wouldn’t they their rents were well over $1,000 below Market I say they as in as if they’re one because um grandma lived in the basement the daughter with her four kids lived in the top with her boyfriend uh I’ve since helped them find a new place I’ve invested thousands of probably close getting close to $10,000
(03:32) to renovate in stage the property the listing is now live I’m holding offers until after Victoria Day yeah I’m dating this episode which I don’t mind because we do the we record these episodes all the time uh please wish me luck with any luck by the time you listen to this the house is sold with a closing date ahead of June 25th the ridiculously short notice deadline by our anti- landlord federal government asking price is 74,8 188 for luck and I’ve priced for action again this is a turnkey 2 family house
(04:02) that I’ve renovated with permits to make that basement apartment legal I’ve already done the heavy lifting there’s no you know for anyone getting to this today that’ be they’re looking at a six-month vacancy uh in a due to the renovation and that renovation could be around another 150,000 to complete in today’s market that’s assuming everything can be done on time like permits and whatnot because uh for those who don’t know the city of Hamilton was hacked um by Ransom people they want
(04:29) their whole holding the city uh hostage and for for ransom to get their data back City refused so a whole bunch of stuff is not working at the city uh which could which or things are move to more manual processes which means slow anyways so this is a turnkey one so uh Market rent for this property based on my early research is around somewhere around 4,100 plus utilities a month the house would be ideal for house hacking as live in one unit rent out the other to help pay for the mortgage or for a large family or for a deep pocket
(05:02) investor who can put down a good amount of cash so to make this thing cash flow uh location can’t be meet can’t be beat again I bought this for the purpose for my daughter for her investment so it’s a good one it’s only an8 minute walk from a major mark from a major shopping plaza that features U Walmart Super Center so very convenient location on to this week’s show we have an old friend George Almaz returning to the show he is the host of well-off podcast he is a and but he spends most of his time as a
(05:32) full-time investor George and I used to work at the same brokerage the wonderful Rockstar real estate brokerage so George left I’m still there but like many talented investors do they transition out of service work and into more focus on their own portfolio when I mean transition out of service I mean like for example contractors or drafting people or Realtors or mortgage people it’s not uncommon for them to transition out of those service jobs into more focus on building their own portfolio like I’ve
(06:02) told many new Realtors investors in my experience make more money uh over the long term uh via passive investment and George will prove me right on today’s episode George is going to tell you that it hasn’t been all sunshine and rainbows but he’s doing really well you’ll be able to tell by based on the quality of his deals and so then thanks to Smart investing quality education he’s been through keeping an eye on the numbers and of course execution execution of those renovation projects uh as is the
(06:29) trend above above market returns are often available for to those who can take on more complicated projects those who solve problem problems tend to be rewarded and George shares the the problems that he’s taking on uh he also shares how he uncovers deals uh because that’s incredibly important if you don’t have a good deal you’re GNA have a lot of trouble making good money George shares how he finds deals off Market on Market how he finds hidden value that others Miss which generally includes
(06:59) adding apartment in commercial multi family so commercial multi family uh is is multi family that’s over four or six units anything over that and also he does small development work as well George shares about his different joint venture joint venture structures as he doesn’t have all the money in the world so he is uh partnering with other folks to passively invest in his projects so he’s sharing from his experience what he’s negotiated how they’re structured what the different splits are and how Equity
(07:26) splits are who gets what so make sure to have a pen and paper ready this interview is full of good nuggets to follow George you can email him at [Music] boy congratulations yeah thank you so two BO two boys yeah you’re going to make more money to Fe oh my God those it’s crazy it’s so crazy like diaper cost all these things you don’t notice it but your your costs go up a lot with the two kids but anyway um yeah so we got a a one month old right now he just turned a month old yesterday uh and we
(08:19) have a two and a halfy old and you have couple businesses sizable portfolio growing yeah portfolio is growing um so I’ve been focusing on that the last couple years just growing stabilizing things we’ve had some just like everyone else you know some cash flow issues on a couple properties so we’ve had to address those uh my wife is a realtor so she’s she’s taking over all the the sales on on the real estate side and O over the next I guess couple months she’ll be slowing down a bit taking care of our son so I’m probably
(08:51) going to have to step in a little bit busy busy yep all right y before we’re recording um we’re you know we’re talking about um my I I new new Realtors reach out to me all the time ask me for some advice and I always tell them in my experience investors make more money MH like you you actually have a story to share around that yeah yeah so when I was um this was probably around like 2016 2017 I was working with a a seasoned real estate agent and an investor so he was like a mentor to me um and then he would
(09:27) just tell me when 30 years ago when I kind of started in real estate I was so focused on building my real estate business and just selling and I was killing it I was doing so well but there was this other guy in my office who wasn’t doing as well as me on the real estate sales but he was buying one income property every year and I after a couple years I noticed like he’s really starting to build his wealth and and do so well and that made me realize that I need to start buying real estate and and he started a little bit later in his
(09:56) life but he’s done really well so uh that was kind of something that stuck with me so I kind of did the same thing in 2017 I bought my first property and then 2018 I bought another one and just kind of kept slowly building from there mhm and I remember I remember you’ve been on the show before I remember your your more your early properties were more simpler with the condos was it uh no the first one was a was a single family home kind of used as an illegal duplex in Hamilton uh Century home yeah in downtown like the old ones e i i yeah
(10:28) I don’t like them as much anymore but uh that was the first one and uh yeah I never bought condos always bought freeold got it got it yeah I just sold my 100y old house and I’m glad it’s I just got the quote to just to patch up the chimney $2,700 yeah yeah I can’t believe I still have a chimney in this Modern Age yeah cuz it’s a boil I have a boiler I don’t even know what’s using in the chimney but I need to fix it to to sell that to finish to close the sale so I’m fixing it okay yeah well 2700 is not
(10:58) that bad but you know to to fin to close off the sale I know it’s it’s it’s reasonable to do yeah but uh these These Old House problems I’m done done with it but that’s the thing when you’re when you’ve been investing for a while your criteria changes what you’re looking for changes so uh it makes sense it’s natural right and your criter changed a lot like you mentioned you started with the single family home with the with the non-conforming basement and you’re doing
(11:25) like before we start recording you’re doing some pretty advanced stuff now like you mentioned you’re doing a you have an 11px in Branford and you’re adding two units mhm let’s start there where are these two units going yeah um yeah paint paint us a picture what does an 11 what does this 11 Plex look like is it like a three story walk up like what does it have an elev it’s a two story no elevator yeah um it actually to me it looks like a school like like a a school that was built in the 60s or
(11:52) something some people say it looks like a prison but some schools look like prison yeah uh so it’s all brick um no basement okay um oh really yeah why no basement that’s odd I I don’t know so originally this place was a commercial building I think it was used as like a government office at one point and then it was used as a hall right so it’s it’s gone through multiple Transformations but um I’m not sure why there’s no basement there yeah uh but anyway it’s got five two-bedroom
(12:24) units six one-bedroom units and it had a laundry room so at one point this laundry room it’s like 300 ft maybe oh it’s big yeah like maybe 250 to 300 ft yeah it was used as an illegal suite and then somebody complained cuz they they put a kitchen and a bathroom and everything and they rented it out in the laundry room they got rid of the laundry units but they used the laundry room right um so somebody complained the city came shut it down so they kind of flipped it back to a laundry room right but when I purchased it the owner had
(12:56) plans to build an addition to turn it into a legal unit right so that’s one of the units we actually didn’t want to do the addition because there’s a big hill behind the property and we’d have to build a retaining wall there’s a flat roof we’d have to extend it it was going to be pretty expensive to to build that addition instead we requested to uh a minor variance to use the existing space to build a little Bachelor unit and it was actually approved so we’re we’re going to be saving a lot of money by
(13:23) just using the existing layout where you going to fit the bachelor you had a two 50 300t laundry room where are these two where are you fitting these two units so so it already oh no it’s one unit it’s going to be one unit but it already had like a shower and a toilet and a little bathroom in the corner it had a small kitchen already so what we’re doing we’re going to extend the bathroom a little bit to add a vanity cuz you need it for code we’re going to put in another window and then we’re just going to put like a
(13:53) small just a sink in a stove and then the fridge is going to go kind of it’s going to work out with the addition of the B there’s going to be a little slot for a fridge to go there as well so it’s going to be a really small space but I think there’s going to be good demand for that um for that type of space so we can another option would be to Airbnb it so uh we do have some flexibility there and Branford allows for Airbnb they’re friendly on that well actually I should I should say that I haven’t looked into
(14:18) that uh I would think so because somebody had mentioned to me that it is allowed but I’m not 100% sure actually yeah definitely check yeah the trend is not your friend for yeah I mean I Airbnb is not a priority rather rent it longterm cuz again for financing purposes I’d rather have that stable income yeah it’s true yeah you gave commercial financing on this yeah yeah like apart like apartment building sty well I have a vtb on it yeah so Al so you uh can you share more about uh vendor takeback mortgage uh so when
(14:48) you’re buying the property you negotiated it yeah so we we went to see it initially the owner wanted 2.2 million which was a little overpriced for us but we were able to negotiate and bring the price down to 2 million and then we got 1.3 million as a first mortgage from the seller so the seller provides the mortgage to us it’s registered against the property and that’s what a vtb is right and we negotiated 4 and a half% for two years interest only payments and then it bumps up to 6% for the remaining
(15:23) three years fully open so we can refinance at any time these are good terms yeah this is way better than the private one but we’re seeing for sure yeah 6% open that’s great yeah yeah and then sorry let’s take a step back how did you find the property I had an assistant reach out to a bunch of real estate agents so we compiled the list of agents that um have listed or sold apartment buildings in specific areas we had probably 20 to 30 agents on this list we sent out an email to all of them couple of them responded nothing
(16:00) that was really that all that interesting but uh we did have this one person bring us the Branford opportunity and we just went from there and then did you negotiate the vtb directly with the agent or the owner the seller we negotiated with the agent we had to yeah of course like yeah but the the nice thing was that the seller was there for all the appointments so I got to meet him we would go to like there was a McDonald’s close by so we’d go sit down have a coffee after it was it was a really cool experience it was my first
(16:30) time buying an apartment building but it was nothing like buying a house it was more of let’s build a relationship they want to learn about me what’s my portfolio like am I able to actually close on this building I learn about them um we It was friendly throughout the entire process we just cooperated worked together it was cool fabulous no I asked if you’re able to communicate directly with the seller because well you know most agents have no zero experience with vendor takeback mortgages yeah yeah it’s actually funny
(16:57) for a few months I had a few people ask are you interested in the btb yeah for for my own listings and that we haven’t had btb conversations in regular real estate for over a decade yeah for sure for sure maybe when I first started back in like 2010 when things were more of a balanced Market or you had something more complicated like mixed use yeah where there was no good financing all that sort of stuff but for this you could get traditional financing I could definitely do that I can get traditional financing but the terms were so good uh
(17:30) we actually got a second mortgage as well because we didn’t want to put down you know 700k so we got a a second at 11% uh which topped us up to about roughly 80% loan to value somewhere in that ballpark wow and this was a private from your own network or from my own network it was actually through RSB funds so somebody had a big chunk of money in their rsps they were able to loan it to us as a second wow yeah good for you yeah thanks someone off you met off the podcast or someone just no just someone I’ve known for a long time uh an
(18:06) investor yeah yeah it’s like so there’s no lender fee or anything like that it’s just just there’s no and just straight interest yeah pretty much I had to pay for lawyer fees like on their end as well kind of standard but that’s about it fascinating what what I find is fascinating is cuz well the folks who were in trouble in the news yeah it generally was quite expensive seconds were 12% and then there’s usually like a lender fee as well like 1 2% so it’s much more expensive for all parties
(18:37) involved versus you’re able to do this all internally sort of yeah I was able to avoid a lot of the fees yeah like there’s no fee on the vtb right no lender fee no nothing that’s what one of the really nice things about it right yeah and the point I’m trying to get across is like this is what Pros do yeah versus still retail investors yeah still they they pay more fees their terms usually aren’t as good um and that’s again that’s the point I’m trying to get across is and then at the
(19:07) same time the people that are in a lot of financial trouble right now are are have the have the more expensive mortgages yeah yeah I I’m a very cautious person like I I don’t want to put myself in a position where I’m taking a big big risk so although 11% like to me that’s that was a little uncomfortable cuz that’s the highest I’ve ever paid for a mortgage but when when I factored in all the numbers I ran I ran my numbers it still cash flowed MH because I’m getting 4 and a half% on the
(19:34) first right so the numbers still looked good and I knew I had an exit strategy plus as part of the negotiations we got three vacant units so we were able to to increase the the rent quite a bit so you mentioned you have you had exits and everything the so and you had three bacon units so it’s going to be easier to make the deal work mhm so even if you weren’t able to get the actra like you know like I’m guessing did the deal work still for you without the extra units like I’m trying to expain
(20:04) for the the for the listeners um what conservative investing looks like yeah right like for example when I’m looking at deals I need the deal to work as is M uh without all the other stuff around it like for example I’m trying to buy near manufacturing plants but like we know like you can’t rely on anything nothing’s ever nothing’s for certain that’s why I need the deal to work as is without any changes to it yeah it what what’s what was your experience like well we it was in the agreement so I
(20:34) wasn’t going to close if I didn’t get the vacant units but I also had a hold back so the lawyer um actually suggested this we got I think it was 10 grand for the units that were not going to be delivered vacant so we can use that 10 grand to hire par legal cover uh expenses like for the month for missed rent like that sort of thing 10 grand per unit right so that was yeah that was kind of uh which so one of part of this kind of complic complicated deal or one of the things that complicated the deal a
(21:08) little bit was that one of the tenants was being evicted and she’s from my understanding a professional tenant oh great yeah so uh we we have been kind of using the hold back for that for that one particular unit um but uh yeah I mean that’s the only sort of complication that we’ve experienced yeah you structed this deal quite well I had to because it was my first apartment building right and I and I do have a partner in this as well and I think a lot of people feel this way when you have other people involved like I
(21:40) feel this way for sure I would rather lose money than lose money for other people and um that’s why I’m just very careful very careful when it comes to underwriting this is super interesting because I have literally had a guest on who uh Ben Burger on he shared how the wholesalers he had he had bacon possession in the agreement U but the wholesaler but the tenant didn’t leave before closing yeah so yeah you and I would have done a hold back he didn’t his wholesaler was like oh it’ll be fine
(22:13) it’ll be be fine it’ll be fine wasn’t fine yeah be be cautious people yeah yeah talk to your lawyer or if you really want the place like you got a steal on it then maybe you just have to factor in how much it’s going to cost you to get this tenant out like you know it’s going to take you a year what what’s the cost of missed rent for that time hiring a pair IL legal all that just Factor all that into your underwriting yeah there there’s risks you have to accept yeah depending on all sorts of things like
(22:42) for example if this is a bidding war then you probably have to you can’t be as tough on your negotiation but yeah that’s pretty cool yeah and then and then tell me about uh tell me what the plan is now for the property so so you have approval to add the two new units so we we got a minor variance approval for the additional two units uh one of them was for the size of the unit actually no we just needed the one minor variant and we are working with Ken beac andem to submit plans to um put a second story on a storage unit so that’s the
(23:16) 13th unit on the opposite side of the building opposite of the laundry room there’s a brick storage room that was attached to the building and we’re we’re topping it up with a second story to build like a little one-bedroom Loft cool and how big is that uh it’s going to be probably around the same like 300 square feet small yeah it’s a micro unit yeah and then how much is it going to cost you and what’s kind of renting you get uh I I think like preliminary numbers it was going to cost about 150 roughly to
(23:48) build that 13th unit with everything and um we’re project or projecting that we’re going to get about 1,500 in rent for it roughly oh so that’s a good ratio of rent to uh to what your investment mhm plus utilities yeah so again it’s still early but we are looking to put a separate hydrometer there it’s going to have electric baseboard heaters and then water where we are looking to separate the water meters eventually but for the time being we’re covering water super cool and then tell me about the
(24:26) financing like tell me about the exit so we were talking about this a little bit earlier it the plan eventually is to take it to a cmhc loan right and they changed their policies late last year 2023 you can no longer refinance private funds directly into a sehc loan so we’re going to have to at least at this time take it to a conventional loan for two years and then refinance it it has to be an approved lender M so if you go on the CC website they have a list of approved lenders as long as your mortgage is with
(25:01) one of those then they’ll allow you to refinance the property and you I would again discussing before we started recording this is kind of dumb yeah you created Supply yeah right you this project is something the government should be supporting like you created Supply you didn’t just like remove affordable housing from the market like like most bur investor Department building people are doing you you literally added almost 20% Supply yeah to your building yeah well I I think from my understanding I’m
(25:30) not 100% sure on this but I think CC was getting so many applications over the last couple years that they wanted to slow things down a little bit and this was their way of doing that right and it’s working because tons of people that are in the apartment building space have VBS or private financing or Bridge loans or whatever it is well yeah CMC has enabled the financialization of apartment buildings yeah yeah exactly and I think when people get when people get a better understanding of that I I understand why the see you see has a
(25:59) slow down yeah because people like you know the media and and politicians are not happy about this yeah the removal of affordable hosing from from apartment buildings markets sure sure yeah I’m hoping they would prioritize you again because you’re doing what is you’re part of the solution you’re creating housing M I’m hoping that’s one of the threshold for you to get ahead of other people that that would be interesting actually like if you are adding units if if they would bump you up uh or or kind of wave that um no
(26:30) private financing Clause that they have but we’ll see things might change over the next couple years so wait private financing if you self Finance the whole thing would that still be no if it’s if there’s no mortgage if it’s free and clear then you should be okay but again so this is one thing that but this is one thing that I’ve heard some people are saying that they’ll pay off the the private just temporarily and then take it to cmhc but they’re starting to crack down on that right they’re they’re
(26:59) looking up the history to see if there were any loans registered yeah who just has like that kind of money lying around though well they they borrow it like PE notes or whatever and and paid off oh my God prary notes to WIP about the mortgage for either that or they register against another property if they have a bunch of equity in another building or something yeah yeah yeah got it interesting yeah cuz yeah that’s that’s capital for you it’ll find a way yeah yeah very so what so do you know do
(27:30) you have your approval lender in mind for this project I’m not even looking at that right now because the vtb we have good terms right now so we’re just doing we’re flipping a couple of the units we’re adding those two additional units you’re not ready for refi anyways not not ready yet yeah and yeah because you got into this project before you knew about this policy change well it was right around the time almost exactly when we closed which was we closed in September 2023 mhm and that’s when the policy had
(27:59) changed right around then mhm yeah fascinating but even even though even if it had changed 6 months prior I probably still would have done the same thing because we’ve got good terms right so okay yeah and then do you uh you’re underwriting so what are you projecting for your after renovation value so there’s um there’s a cagec calculator that I just found out about where you can kind of see how much you can borrow the the the loan amount that you’d be able to borrow or the value of the building and I punched in just
(28:33) yesterday actually all the projected numbers projected rents and expenses and all that and I think the loan amount that I saw was about 3 million it was somewhere between 2.9 and 3 million right right so we bought it for two once we complete these extra units turn over a couple more units then we’re going to be at roughly $3 million and you’re happy with that yeah that’s a big lift right it’s a big it’s a 50% increase right so and um you mentioned you have an you have you have a partner on this as well
(29:05) yeah is that Equity partner is this your wife who is this well my wife’s my partner on everything so I don’t count her as a an equity partner technically although she is but we have another partner so um yeah it’s an equity partner I don’t do I don’t really like to over leverage and borrow too much I know some cases it works but for me I’d rather raise equity and be on the safe side right my point my point about leverage uh borrowing all those sorts of things is like it’s double-edged sword
(29:40) yeah your your upside could be higher but also you have a your your window success is shrinking yeah right and again you know there’s lots of History like anyone who’s gone bankrupt is because they couldn’t service their debt yeah so you know be cautious with the use of thatt there’s a time and and place for that like if you’re buying your first property and you don’t have that much to lose you’re willing to take more risks right well say you have no debt too yeah right so you live in your
(30:09) parents house still exactly you have no rent or mortgage payments or minimum you can take some more risk but if you’ve been working for a couple years to build a stable portfolio and you’ve worked hard and sacrificed a lot it doesn’t make as much sense for you to take on that extra risk cuz the reward isn’t going to be as great mhm yeah yeah cuz literally I’ve had guest of this show who’ve had their previous games wiped out over the last two years mhm like all that all that Blood Sweat and Tears yeah
(30:37) to have nothing to show for it yeah exactly yeah but again like if they survive I say I say on the show if you can survive these times you’ll likely be you’ll be laughing 10 years from now yeah right but again right now it’s about survival for some yep so yeah so you mentioned you don’t like too much debt and it’s interesting because we’ll get to your other projects because you have several different your your projects are quite varied yeah and then you were sharing before we’re recording
(31:04) that your structure of your Partnerships is different across deals mhm cuz here you found a deal here you’re there’s quite a bit of lifting heavy lifting for you to do yeah even though you’re not like swinging hammers I know but yeah how how did you structure the deal on this one with your Equity partner yeah well so we actually um opened a new Corp and we were we’re 5050 on the on the equity side but the amount of capital that we’ve each invested is a little bit different again because I am
(31:37) doing so much of the heavy lifting yeah and um yeah this was this was the case here and this was my my first apartment building as I mentioned same for the investor that’s working with us as well so we just we both wanted to kind of experience what it’s like to to own an apartment building and we just struck Ed it this way for now but moving forward obviously things might change right on on other deals so yeah and this partner is is the equity partner they’re passive they are passive yeah yeah and then this
(32:10) is someone you already knew this is someone I know yeah um known him for a couple years um it’s always the case for us like I don’t really meet anyone on Instagram and then do a deal with them like that doesn’t I don’t think that really happens too often I think people want to get to know a little bit yeah I’m sure there’s some of that going on I think some people kind of specialize in that but for the most part the people that I know they build relationships with their Partners right and it takes
(32:39) time to get to know them they get to know you um that’s kind of more my style right right yeah this is someone you from like work or from church or something no it’s uh it’s actually another investor uh we’re part of like some of the same investment groups yeah yeah so networking works it works for sure yeah very cool you want to share to which group yeah I can share it one of the groups that I often attend is Durham Mari oh yeah Quinton yeah Quinn’s awesome he’s actually the the reason
(33:10) that I bought this building in the first place I I’ve consulted with him on the numbers like he talked me out of walking away because I was like oh my God this is you know bigger numbers than I thought that everything the refinance looks this way what what do you think and he was like no the numbers look pretty good I so it’s always good to consult with your mentors and and even pay a little bit just to get the the right advice right right yeah can I were you in his training courses or you student of his I yeah first of all I was
(33:39) a coaching client of his this was a couple years ago so he got he got me from single family homes to a fiveplex and a fourplex and like you know bigger properties at the time and then I’ve taken his apartment building investing classes as well God I’ve taken all of his classes his JV classes um vtb classes is everything yeah do uh I’ll I’ll post the link to his website in the show notes uh but yeah anyone can look up germ REI Quinton dusza yeah he’s been on the show I think three times yep yeah hopefully
(34:13) it’s not a stranger to anyone and what what I like about Quinton is his everything he offers is quite affordable it is yeah it’s amazing like his some of these courses that I’ve taken were like 500 bucks yeah which I’ve gotten so much value like just look at this one deal alone apartment so I took his apartment building class I got a vtb I took his vtb class and I have a JV partner I took his JV class it literally all came together in one deal and just that the one deal alone pays for everything I’ve
(34:44) I paid to to take these courses I love quality education yeah I love it more when it’s when the price is reasonable yeah yeah cuz there’s lots of stuff out there that’s really expensive yeah and yeah they don’t have much track record which is nuts even worse when some of them they’re producing like students who go bankrupt yeah yeah yeah i’ I’ve heard of these things there’s a lot of people offering courses I don’t know what’s good and what’s not I’m not sure I I
(35:11) don’t go out there and explore all sorts of courses but uh I just know the ones that I like and I kind of stick to them right well because you’re not a you’re not an active realtor anymore like I still talk to clients and when they tell me like the stuff that are taught I’m like yeah just the same conversation I have with you like too much debt your your probability of success shrinks yeah right like you know if your interest payments are too much and you can’t support it yeah what what choice do you
(35:38) have yeah that’s it’s a scary place to be in yeah for many super cool all right now can we move on to your your four Town hoses sure yeah tell me about the four Town hoses Yep they’re in Welland um picked them up in March 2022 right before the rates skyrocketed before the market it dipped roughly 30% are you okay with the price you paid uh yeah so 375 per per unit it was off Market sounds pretty cheap it’s cheap they’re they’re older so they’re built in the 1920s um the owner wow I don’t know if
(36:15) I’ve seen towns that old before yeah yeah it’s older for sure it’s it’s a pretty unique place because there aren’t that many town homes in Wellen that are like that there’s condo towns but these ones are Freehold um so yeah I got a vtb on that as well actually and I got 1% interest only for 12 months myage rates are going up my mortgage payment was $226 a month per property um so yeah I was trying to negotiate a longer term they refused but you know whatever I thought that’s an amazing amazing term I’ll take it
(36:59) they had four um tenants in the property and I was pretty confident that I’d be able to work with a paral to provide an incentive to the tenants for them to move on unfortunately three of the four refused and we had to figure it out from there right so we thought we’re going to have to probably duplex these we’re going to file an n13 for renovations all right yep we got um there were some delays and and things and the pargal that I worked with kind of screwed up a little bit on a few things but at the
(37:38) end of the day we we did get to our n13 hearing and they sided with us because we have our permits we have everything ready to go mhm and we were able to provide an incentive anyway to the tenants and now we’re in the process of of actually converting them so just to kind of put things in perspective once our uh 12 months was over we had to scramble to get financing for these and it was hard because you know we have couple mortgages it’s not that easy to get mortgages anymore rates were going up we were getting about a th a month on
(38:11) some of these properties in rent and the mortgage payment was two grand a month so we’re in that situation where it’s like man we’re we’re in some trouble if we don’t do something about this um so that’s yeah the the the process of converting these is going to increase our rent to about 2600 a month up and down so we’re going to be in a more comfortable situation and and uh your duplexing strategy is different like most people duplex into the basement MH here you’re doing main
(38:45) floor basement is one unit yeah and then second floor is another unit yeah yeah can you can you explain the the the the investment hypothesis to get you to that strategy sure so if you remember I mentioned that first property I bought in Hamilton the single family that was used as an illegal duplex so it had a main floor unit and an upper unit okay so it made me think because I had brought Ken Beacon Dam at the time through and he told me this is actually you can do this but you have to make some adjustments to to make it a legal
(39:17) two unit so I thought I can probably do the same thing with these well in town homes right oh so experience helped yeah and guidance yeah yeah expert advice guidance yeah if I were to do it in the basement an extra unit you’d have to um like Jackhammer the concrete run all your new pipes frame drywall all this stuff right so it was going to be more costly than just putting a hallway on the main floor putting separating doors and doing it that way so ended up being cheaper to to yeah I like cheaper plus the way we’ve set it up if we’re allowed
(39:56) to put a third unit in in the future we’ve we’ve got a layout which would allow us to put an extra like extend the hallway and bring an extra door down to the basement so you can have three units within this one space right right yeah so we’re we just found it made more sense for us to do that you mentioned like Jack har in the basement is it not enough ceiling height is that why no I mean I mean for your drains like you got a rough in plumbing right right CU you’re no Plumbing in the basement so you just rough in it’s an
(40:23) unfinished basement yeah but do you have the ceiling height or no we have from my understanding standing so I worked with Andy Tran on this who was awesome by the way anyone listening like both Andy Tran and Ken Beacon Dam are great for these kinds of things yeah I don’t know how many times yeah um we have I think just an up sealing height so I think what Andy was saying like if we put thin vinyl flooring we should be good um so yeah flooring put down some area rugs yeah so the floors are warmer yeah exactly so I
(40:54) think that’s it that’s that’s what we would do fantastic and what’s the budget for the Rena the the renovation itself we got quoted 50,000 plus hsd pretty much roughly not bad for duplex conversion but we had to work to bring that down like I had to scramble and just change everything because again like when you work with a designer they’re they’re often they have someone on their team that’s doing these layouts for you and they’re trying to come up with something functional and
(41:27) beautiful maximiz the and as an inv that’s not always your priority in this case my priority was doing this for like as little as possible and having a legal unit right so for example they wanted because the main floor has a powder room right so we needed to put a shower in there so they wanted to uh rip out the closet next to the powder room there was a a back door that led to the backyard they wanted to reposition that so move it from there put it in the living room repos like reframe the deck and do all this stuff
(42:01) right I’m like there’s no way we’re not I’m not for a rich home owner yeah like exactly if if this is your home and you want that’s fine so what we did was we we ripped out the vanity instead we put a shower where the vanity was and we put like this really thin floating vanity up against the wall between the shower and the toilet right so we we didn’t rip change any of the framing we just kept it exactly as it was and that which really brings the budget down yeah and the time to execute exactly that’s one
(42:32) example another one was upstairs the engineer suggested we rip out one of the walls we had to like um which is always expensive yeah yeah we had to um support the CU it was a loadbearing wall so we had to support it and more money yeah tons of money more money time tons of money so instead we literally just cut out one of the non-load bearing bearing walls and we opened up the space that way instead like how much did we save by doing that you create a doorway or pass through or just a window um it was it’s
(43:04) a large opening yeah it’s probably maybe 8 ft wide but it’s a non-load bearing wall and it was the wall between there was a bedroom and like kind of a small den and that we open it to create a kitchen and living room yeah it’s funny when people just make designs with no budget no budget in mine yeah but but again if you’re in experienced and it’s your first time working with a designer you might you have no clue like you might just be like oh okay this is what you suggest let’s do it you’re the
(43:34) expert yeah yeah but also it takes time obviously to to redesign exactly but I think for anyone listening you can push back sometimes and try to find more creative ways to to lower your budget because I don’t want to spend I could have easily spent 150,000 on each of these so a total of 600,000 across instead we’re at let’s say 70,000 with carrying cost per unit it’s a significant amount it’s like half the budget and just to work just to just to let investors listeners know what you’re
(44:04) doing is not that common versus when we when we do basement Suites it’s very cookie cutter this is how you fit in two bedrooms and that’s how you’re going to maximize your rent yeah exactly it’s like here’s here’s three layouts that we do all the time pick one yeah yeah versus yours was very custom job yeah for sure and you have to work with everyone the the contractor has to be on board like everybody got to work together to to make this happen and where’d you find this designer the well it’s Andy Andy Trent
(44:36) his his crew was the ones who they were the ones doing all the layouts for me they should know they should know that we’re on a well that’s it was my first time working with Andy right so I think once I did one he understood what my priorities were yeah yeah and he automatically adjusted the rest right and and he was so cool about it like he he didn’t give me a hard time because I I was probably not I was probably a little annoying you know just constantly making adjustments but he was really good and he he never got frustrated or
(45:06) anything which I appreciated it’d be nice if there’s like a internet widget and just like slide down your budget and then just automatically redesigns to fit your budget yeah yeah yeah that would be cool like a chat GPT type of thing lay this out for me for the lowest price possible well even just for us like we’re like what’s the minimum Mone need to put down to make this thing Break Even yeah be like that down all right do it reduce the budget by 60% all right I can still make money do it exactly
(45:35) exactly and where are you with these projects now so we did we completed one we’re actually hopefully closing on a refi today so that’s the nice thing these all have separate titles so we can refinance them individually or get a blanket mortgage which again we’re going to go to cmhc and get a mortgage across all of them eventually but uh yeah we’re refinancing the one today the second one we’re working on is about 70% complete same thing we’ll refinance that and then the other two the tenants are
(46:04) leaving hopefully end of this month in April fascinating you have four properties on separate titles but you bought them together with separate corpse so four cor yeah four Corps two Corps yeah so we we offset like the first one is under one Corp and the third one’s under that same cor right so they’re not adjacent so titles don’t merge yeah yeah yeah and hopefully listeners caught that cuz that’s a very expensive mistake otherwise yeah yeah so just to clarify if you buy two side by side properties two adjacent properties
(46:35) two adjacent properties sorry uh under the same either your personal name or under the same Corporation they will merge on closing you have disaster you’ve lost a lot of value yeah which is just a paper thing exactly you you can I think sever them later but there’s no to pay for exactly survey done go to the city Point yeah there’s no point of doing that so um yeah just buy either like put your name and then your spouse’s name on the other one or two corporations yeah yeah I think the only time you probably do that is if you’re
(47:05) going to tear everything down and build one house I’ve heard I’ve heard of people doing it on purpose for that exact reason to develop so if they’re buying multiple properties they want title to merge so it’s easier to develop yeah like you’re Drake buying in battle path I think I believe he bought a couple Lots so he doesn’t care if they merge because he’s going to tear them all down and build one super hose exactly we’re not Drake yeah yeah so actually speaking of uh severing it’s
(47:30) something that I’m actually exploring on another property we have before we go there I want to finish off these town houses you mentioned that you can bring this to cmhc as aplex even though they’re the separate title separate you have two owners y they’ll still treat it as one entity from my understanding they will I I did consult with a mortgage broker specifically for this situation and because they’re side by side as long as I’m the owner of the corporations then there shouldn’t be any issues any
(47:57) percent percentage ownership you have to have or just just that you are no I’m not sure if there’s um I’m not sure if I have to have a specific percentage but yeah I mean in this case it’s 50% so I hope that’s enough super cool yeah I was just thinking because yeah of another American lender thing example but anyways and then and then explain to me the benefit of going through CC for this now will be an aplex yeah um so through CC you can get 40 to 50 Year Ms instead of your traditional like a conventional
(48:31) lender will give you 25 on the commercial side right oh sorry this is spelled it out 40 to 50 year amortization and your payments are spread over 40 to 50 years which is I don’t believe anyone else can offer you that kind of amortization uh some be lenders like we got a be lender on actually the the one of the Town Homes they’re doing a 35 year M for us oh okay yeah can can you shout them out or um yeah it’s Haven I haven’t even heard of them yeah I mean it’s a be lender so probably not as many
(49:02) people know about them I’m not sure though if you can go directly to Haven tree I think you would have to do it through a broker yeah super cool you want to shout out your broker yeah I work with StreetWise oh Delia team Delia’s team yeah yeah Dalia another friend of the show I just saw her this weekend that’s super cool that’s why it’s like the whole old saying it’s not what you know it’s who you know exactly like all these I didn’t know about this yeah but I know D you y so that that’s
(49:33) been amazing cuz uh we got pretty decent terms on this through a be lender I think our rat’s like 7.15 which isn’t I know it’s sounds high but compare because we can’t get an A- lender right now just number of mortgages we have so a variable is like 6.9 right now 6.95 on CC exactly so you get 7.
(49:55) 15 but you get the extra five years yeah so and I’m guessing how were they for qualifying uh like did you have to give them much yeah yeah of course you have to give them everything everything yeah you got to give it was like getting an A lender for sure right for sure okay so there they still required a lot of diligence because my experience with Like Home Trust for example is they don’t ask for nearly as much as a SK Bank no in this case they ask for a lot but I was happy to do it yeah is sorry in 7.
(50:23) 15 interest rate was that fixed or variable it’s a one-year fix that’s really good yeah damn and then but you can renew yeah I I’m pretty sure and and if the rates come down next year like it might be better right so who knows that’s a really good rate yeah for one year is it open like no it’s it’s not open no I don’t think it’s open but it’s one year so I don’t care fixed yeah it’s only a year yeah this is great damn that’s that’s that’s cheap that’s cheaper than most yeah we have variables
(51:02) that are more expensive than that I think my helck is more than this oh for sure yeah cuz Prime is 7.2 right yeah yeah okay hopefully the listener picked that up H tree show it Street wise 7.1% on a onee fixed 35 year am obviously every sit everybody’s situation is different I don’t know if everyone would get that same rate but I know but this is a flip project yeah like that’s it’s usually the you guys usually pay the most no it’s not a flip like we’re keeping it we’re holding it uh yes I know it’s a repositioning
(51:36) right so it’s I think the finance is usually similar for a bur or flip I guess so yeah I mean there’s yeah I’m not sure I’m not too sure super cool okay so uh yeah four sorry I cut you off 40e 50-year amortization BC MHC this is the m select program M select oh no sorry the 50 year is mli select the 40 year you can get with like a standard cmhc loan oh so that’s still favorable yeah so that’s what we’re getting on the fiveplex that we’re refinancing now which we haven’t talked about yet but we are time do we
(52:14) have I know my nerdy listeners will appreciate keep we we don’t have to get into it it’s fine but yeah I’m sure my nerdy listeners would like to get to it and appreciate you going into this level of detail about all this sort of stuff and you know I love it when guests know this a little detail on their deals yeah is you be surprised if they don’t have detail on their own deals yeah yeah and that’s us a sign of someone who you know who’s analytical and a good operator yeah there’s there’s a lot to remember
(52:41) there’s a lot going on all at once but I try to remember the numbers as much as possible uh so standard mortgage 40-year amortization with CM cmhc what kind of terms are you expecting so on that one the way the way it works for one listening that doesn’t really understand the the rate is based on the 5year CMB Canadian mortgage Bond B yeah so um I think right now last I checked it was at about 3.
(53:14) 7 right and then the lender will add basis points as they’re spread so in this case they’re adding 200 basis points okay so we’re going to be at roughly 5.7% on the on the loan the interest which again like that’s way better than what you’d be getting cuz I had a oneye on that property with deard and my rate was like 7.
(53:37) 89 25 year M all right so my my payments are going to come down substantially my interest rate is going to be much lower it’s way better to go to sehc that’s why it’s they’re getting so many applications right yeah which is always concern because cc is the division of government yeah government’s not supposed to get supposed to take everything away from Private Industry well the SEI is is an an insurer so they’re not the lender the lender and there insurers out there yeah yeah yeah so it’s uh I mean I’m happy to do it
(54:05) because it makes sense for me but I I understand yeah there it would be nice if there were more options like that instead of just the one kind of monopolizing the market yeah because they offer the best rates in their government yeah exactly they have different cost basis than Private Industry but again like what you’re doing here with these tow houses for example is you’re doing what the government wants yeah well your benefiting Society you’ve doubled the housing MH right with your own with private funds yeah can we can we I want
(54:35) to stay on this example with the Ford Townes um just to give an example of a different uh joint venture structure can you share on that how the how this joint vure structure works so we have four Partners um actually kind of Interest interesting thing about this is initially we had bought one of them ourselves with no partner and then we added partner on later so we s they’re all Equity Partners um yeah we’re 50/50 on all of them 50-50 ownership 5050 ownership yeah yeah I mean every Situation’s a
(55:11) little different you got to also talk to the people and see what their Situation’s like at the time because we we just said we’re going to do duplex Renovations uh we need 70k to do these not everyone’s in the same position so we’ve had to kind of adjust based on the person’s needs and so for the new investor that’s not easy to do because for say a brand new investor imagine like you 10 years ago like trying to negotiate vure deals yeah on this it’s not a vanilla project no it’s hardly
(55:45) turn key yeah it’s not 100-year old houses in in well and yeah like I’ve never seen these I can’t even recall yeah no there’s some yeah there’s some of these yeah there’s some on like Bay Street and Hamilton but yeah okay so I can’t I I can’t I do have context of what these things look like um they’re not run down like some of the ones in Hamilton that you see right like the brick is all rotted and yeah you know the foundations thousands and thousands in Brick repointing yeah yeah yeah no
(56:14) it’s not like that first of all these have vinyl sighting so you can’t really tell by looking at it that it’s 100 years old um but uh yeah I mean it’s not like you said not just a simple Buy and Hold and do nothing to it right and then uh what did your partners have to bring Capital credit no in this case they they brought Capital all of them we had different exit strategies when we when we initially purchased and I think one of them was to get a commercial across all of them so that’s why we thought it would make sense for
(56:51) us to have our corporations on title um but yeah does make things a little more complicated because now we have to personally qualify for all of these mortgages while we’re repositioning the assets and that’s that’s actually because investing is not a straight line yeah it doesn’t always it doesn’t always go to plan but this is going to likely work out quite well like sorry sorry we haven’t even asked like what is your after repair value we just had one appraised a completed the completed one
(57:22) at 505 so let’s paint let’s start over so it’s 375 to buy yep what was your renovation 70 including carrying costs and that’s important cuz carrying costs are a cost because it was 50 for the Renault plus hsd and then the rest of that was carrying costs so that’s a pretty good uplift yep for appraisal 505 and you’re happy with the appraisal I’m happy with it for sure actually I could have gotten a larger uh mortgage on the refi but I kept it a little bit lower because again I’m I am
(58:03) conservative I don’t want to borrow too much and and be in a bad spot so I wanted to make sure it cash flowed after we refi right so you you do your own lead generation to find these prop these deals yeah so even if you had all the capital you needed how many deals do you think you could turn out a year I think finding deals is one of my strength right I can I can find a lot of deals but then um I just I need more Capital to do it important trying to get get across is um you know like there’s like there’s
(58:41) Northern Ontario investors they were just buying anything in a market where there were no buyers yeah how else do you acquire 200 houses in a market with population of 50,000 yeah right it’s probably it was probably a complete sub buyers market right but these deals that you’re unearthing they I think a lot of people would want them yeah I think so um and we’re making these deals right we’re like we’re creating these opportunities we’re buying things that because for example that building that
(59:11) we bought I think it was had been on the market a year before right the 11 the 11 unit and no one really seemed to want it it it just expired right so and then that’s not how I came across that opportunity it wasn’t an expired listing type of thing but um yeah like we I I even mentioned it because I was working with a real estate agent he was sending me opportunities and he’s like oh I heard you you got something I told him about the property he’s like yeah I went to see that last year I don’t think that was a good deal
(59:40) and then I told him about the terms that I negotiate he’s like oh oh we weren’t getting those terms last year so yeah yeah because things have changed like the market changed terms changed yeah yeah vacant units VBS like all these things make a big difference yeah yeah the deal got better the deal got stale yeah exactly yeah and people need to remember that you know people’s people’s situations change something obviously changed for the seller to get more motivated yeah the market didn’t help
(1:00:07) either yeah because I I think the Market’s pretty soft right now for for apartment buildings um I I don’t know about that because I don’t you don’t see them come up too often right a good deal on an apartment building you don’t you don’t see it go on the MLS often I think they’re often traded off market and there’s always demand for for those types of properties from what I’ve seen yeah fascinating it’s just the rates so high that it makes things more difficult the DCR the debt coverage ratio is one
(1:00:33) of the main factors of of the loan right and um yeah that’s all impacted by the the rate so you’re not even seeing you’re not even seeing increased deal flow more opportunity well because we’ve probably peaked in rates yeah I’m not really looking for opportunities right now cuz I have these different projects going on like my focus is 100% on stabilizing portfolio right yeah I think it’s a that’s a thank you for sharing I think it’s a great share is that you know take care of what you got yeah before you
(1:01:06) move on yeah and apologies for picking on the the investors up north in Ontario but they have like I believe uh 200 of their 600 units are sitting vacant mhm I don’t know too much about that whole situation but how would you feel if a third of your portfolio was sitting vacant you’d probably be very stressed out I can imagine units yeah yeah my point is someone someone was not watching the operation yeah not nearly as closely as you’re watching yours well mine is a much smaller operation it’s a
(1:01:36) lot easier to keep track of you know a couple units under Renovations than having 600 units how much of your portfolio is is vacant right now uh not much that’s my point yeah not much vacancy makes me sick yeah because it’s an expensive yeah I don’t like expenses I like cash flow yeah I don’t like things coming out of my pocket for sure for sure sometimes you need to you need to have vacancies to address certain issues uh certain repairs that sort of thing but yeah but this is a this is part of the plan yeah structural
(1:02:13) vacancy is never part of the plan yeah as in like no renovations going on don’t know when you’re going to have permits don’t have the money to renovate yeah no that’s a different situation altogether right yeah that’d be that makes me sick yeah fast all right cool and then you have another project on the go how many open projects do you have right now that’s that’s in the uh just just those uh town homes in the building but um the the the last thing I was going to say is we have this fourplex in St Catherine’s
(1:02:45) that I think at one point was two semi detached homes so it’s very early but we are looking at seeing if we can sever again maybe titles merged at one point cuz we were talking about that if we can sever this fourplex into two duplexes then we’d have a pretty significant gain in value just from doing that one thing alone right so just something to consider for anyone listening that has that type of property how’ you find the deal that one was on off market like I did a little flyer campaign um I I it was a very targeted
(1:03:16) campaign and this was a few years ago so um yeah how did you get the flyer in the hands of the owner did they live there uh no but we there is different ways we had vas try to look things up we would drive to different properties sometimes and like leave letters in the mailbox for the owner there’s just all sorts of different things that we did at the time yeah so you’re you’re you’re on the you’re on the round yeah you’re on the road yeah yeah this isn’t just this isn’t passive easy like you’re working
(1:03:48) yeah I don’t do that anymore now because I’m not targeting those types of properties but I I did that a lot before and it worked I was able to pick up good properties doing that right yeah and then we mentioned last time you on the show like this is not what you’re doing for realtor as part of your realtor business you’re doing this for your own portfolio for us yeah right because the amount of investment you’re making into acquisition is just significant yeah I mean I it just to me doesn’t make as
(1:04:12) much sense to go do all this work and get a $155,000 paycheck for it right uh so I’d rather pick them up and hold them long term yeah because that’s where the wealth is yeah exactly not the transaction yeah you need you need the transactions like as Realtors if if that’s your main thing you need the cash flow for most people but uh yeah longterm is the way to go yeah so my point when I I made earlier when when new Realtors ask me for advice so to give context pretty much always they have a job already so they
(1:04:48) want to do realt terms of parttime so if you already have a job you have income good income already I’d focus on being an investor not a realer yeah right because that because the the investor long term will make you more money yeah and there’s a good chance whatever you’re doing for a living is your highest and best use MH because you’re likely good at it you went to school for it right all sorts of things yeah versus becoming a realtor like it’s not easy yeah maybe they they want to do that to
(1:05:14) be around people more often and to learn from them and that sort of thing but there’s other ways to do that yeah there’s other ways to do it yeah cool and how did you identify the opportunity to did the fourplex work as itself the St St Catherine’s fourplex work work as a standalone deal yeah or just in your diligence you found the sever opportunity well we’ve owned this for a couple years but I just just thought of this recently I thought let me look into it so um so you’re already own it so yes listeners do look over your
(1:05:46) portfolio and see if there’s ways to extract more value yeah I mean there’s there’s always ways right and if if we can increase the value of this building by 100 Grand just by severing it it might cost us I don’t know 5 10 grand to do that then it makes sense um so we ordered a Freedom of Information Form directly from the city and that will help us determine if you know there was separate servicing for um for water Hydro like all these things as much information as we can compile we’ll send
(1:06:13) that over to the lawyer and and go from there fascinating yeah you stick your chat TBT first before it send to the lawyer I read this PDF I’m joking I’m joking and and you think you can do it I don’t know I know that there’s separate water servicing for each side oh good yeah um there’s separate hydrometers for each side but I’m not sure I don’t know if it was ever used as two semi detached properties well that’s a lawyer’s job interesting this will be fascinating for the listeners benefit like you you
(1:06:51) essentially bought wholesale and then if you’re able to sever you’re essentially going to go detail yeah like each indiv just like condos are more all condos are more expensive per unit a condo is more expensive than buying a whole apartment building yeah which is why apartment building owners generally want to condominium ISE them yeah but then cities don’t want it because it removes rental housing right but you know so many cities don’t like landlords so maybe like hey I I’ll I’ll stop being a
(1:07:17) landlord if you let me do this yeah yeah here you go we don’t like tenants either yeah which often feels the way as being a landlord yeah yeah but yeah what is how’s your experience with all these different cities you talked about Wellen talked about Branford talk about St Catherine are they all been are they all been friendly so far every city like Hamilton as well they’ve all been really good well and we had to get minor variances for parking that went well um the inspectors have been great no issues with them St
(1:07:47) Catherine’s I haven’t done any like conversions or anything there so I’m not 100% sure um Hamilton was great um yeah it’s it’s all been good no no no neighbor showed up for your minor variances or anything uh yeah the tenants the tenants 100% And they were smart too they came up with some good reasons um I was scared but Andy Tran was a professional he was awesome he just handled it and yeah I don’t know it’s the tow houses yeah the town houses cuz uh obviously I was getting M13 so I
(1:08:21) wanted to remove the tenants they showed up gave their reasons why the parking shouldn’t we shouldn’t be granted a minor variance for parking and he came up with his reasons and it worked out yeah my my right to park on the driveway is greater than someone else having housing no it was actually clever it was so we have 10um parking which is allowed and and well in but one of the TM is in line yeah so one car in front of the other one car in front of the other and one of the parking spaces was kind of
(1:08:52) like adjacent to the house to the house right so when you’d open your door if you open too far you might knock the the house so anyway she was saying that you know the parking’s super tight if there ever was a fire or something and you had to get out that the car might block your path and you wouldn’t be able to squeeze out of there and whatnot so it was it was clever and then the the the tribunal is it I think it was the council adjustments yeah Committee of adjustments yeah and they didn’t buy it
(1:09:23) no because it wasn’t an an emergency exit right like you’re not going to exit from the back of the house go around you’re just going to exit from the front or I think Andy was saying that if you can just exit from the back then you’re going to be outside anyway so you’re going to be safe um and yeah and then the the one of the committee of adjustments members said why don’t you put parking in the backyard instead and then Andy’s argument was well you know as Canadians we like to enjoy our yards
(1:09:51) in the summertime and this is going to be taking away our recreational space so they they that and everything everything he said made sense yeah well it cost you a lot it would cost you more money exactly I don’t want to do backyard fascinating and then um we’re georia we’re running out of time yeah no worries uh you have a podcast I’ve heard it yeah I’ve been on it the well-off podcast Y what can you what else can you tell me about your podcast uh yeah we just always have new guests mostly
(1:10:21) Canadians that are investing I’ve had actually people that are investing in the US as well so I’ll have you talk about that soon um yeah I’ve been doing it for a while but um yeah I would love to have you guys check that out too and um it’s always like as podcast hosts we appreciate you guys sharing this with friends and family so if you guys like this one make sure to share it let people know so that uh orone can get more listeners and and uh yeah leave us some reviews yeah we’re not the we’re
(1:10:46) not the fancy types either we just have good Investments yeah George thanks for much for doing this thanks for being so transparent your numbers and Deals sure happy to do that yeah because again like I said a lot of people don’t know the details of their own deals yeah and I appreciate that you’re that you’re trying you’re keeping a close eye on your portfolio to make sure it’s optimized and yeah you know eliminate vacancy yeah yeah that’s a big one and just making sure that people’s money is safe when they’re
(1:11:14) investing with us right that’s the biggest thing and when I say us I mean me and my wife but yeah very cool thanks again for doing this yeah no problem thank you for having me on thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.
(1:11:51) com below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor training.com

** Transcript Auto-Generated**
(00:00) the government’s made some updates to the budget but uh they haven’t done anything to for our family doctors to remain competitive and keep our family doctors and other medical practitioners in Canada so I’ve got nothing positive to say on that front and I’m deciding to stay more positive hello and welcome to the truth about real estate investing show for Canadians since 2016 that’s over 300 300 episodes probably about 350 by now we’ve ranked as high as number 81 on iTunes in the business category
(00:30) globally my name is urman cedo and as I’ve shared on past episodes I made the decision to begin diversifying my portfolio by selling local Ontario properties I have three closing I have one I closed one this past week and I have two more coming up uh this next week and I’m beginning the process of buying income properties in the USA my criteria for buying is simple it’s direct 100% ownership and control like I do here in Ontario but I want the best of the best managing my properties hence I’ll be buying via a company called
(01:01) share who is an Institutional asset manager it’s like being a Costco member I benefit from their buying power I get preferred pricing in this case under share I get preferred pricing on property management leasing fees repairs maintenance and insurance so while I had to pay share fees I save a lot on other in other areas in the news there’s this little company called Samsung they’re actually not that little I Googled and I found out they are the largest company in Korea in Korea South Korea by market capitalization as in if you
(01:32) add up all what all their stock shares are worth they are they are worth the most ssung recently reported earnings they actually reported earnings this week and they absolutely crushed it they tfold increased their first quarter operating profit now what they’re saying is AI will drive technology demand uh going into the future and going to the rest of this year so if Samsung is 10 Xing their operating profits where and how are they investing in AI I asked these questions that’s all I ever do all I ever do is ask questions which is like
(02:06) the nature of this show so I asked Google I read an article a couple articles Samsung is investing uh a combined $37 billion into building two merker chip manufacturing facilities just outside Austin Texas so um as many of you know I did site a site visit of one of them already only about three two three weeks ago did they announce the second uh the second record ship plant and they already have one already existing in anyways so the new investment will employ a projected 4,000 high paying manufacturing jobs uh and uh as my
(02:43) theory is well my investment goals is always to earn above market returns by investing and so my plan is to invest nearby where these plants are being built in Austin Texas uh I’ve already given the names of the neighborhoods I want to own uh via share the neighborhoods are called Hutto and Round Rock now that’s not advice I’m just sharing how I’m choosing to invest and as always I’m open to criticisms uh Noe my plan is to only buy one house in Austin as my plan is to own to buy in other cities proba at least
(03:14) three cities total before I ever Circle back and buy a second property in any one city uh my objective is diversification which and that’s not a problem for me because share is a n Nationwide organization that can cover me basically wherever landlording in the USA makes sense now keep in mind historically real estate in the US between 1970 and 2023 so that’s 53 years on average over that significantly large sample size real estate increased an average of 5.
(03:48) 5% each year and that’s compounding 5.5 compounded annual growth rate I personally think I have a shot at being that because of my very targeted areas for investment near historically historically levels of manufacturing investment into creating high paid jobs into largely Ai and Automotive manufacturing specifically EV anyways my clients and I were getting about 7% here in Ontario but I’m looking forward to being more passive uh with no rank control having the majority of Rights in my favor and of course beating the average I’ve got uh sources in the show
(04:24) notes of course as always so if you go onto my website truth about my email newsletter you will see the infographics from visual capitalist uh if you’re interested in learning more I have virtual tour tours of USA income properties coming up as well as a joint V uh a joint how to earn six figures investing in the USA workshop with my lovely wife Cherry CH Shan uh she will be presenting and I will be presenting as well along with uh members of the share team make sure you’re on my free Weekly Newsletter where we send a deal
(04:55) each week from the USA uh along with uh both free and for fee events simply go to my website www. truthout realestate investing.con the USA guide easy peasy just go to my website and enter your name and email we’re going to make real estate investing great again our friends in the USA have a bit of of a housing crisis themselves so we can help them out as we’re welcome to by the all levels of government there unlike here in Canada on to this week show we have my old friend Andrew Hines and his co-author of an allnew book John
(05:35) schinker Andrew needs Andrew Hines hopefully needs no introduction uh and John is an everyday hero a firefighter and recovering real estate investor uh Andrew has taken his sh turn sharing how he lost money investing in Ohio now it’s John’s turn to share how he made a bunch of money in Ontario and lost all of his profits in a re in the recent correction but it’s not all bad news John’s learned a lot he’s written a book in the meantime John’s short-term rental property in the USA is a winner and I’m confident you’ll
(06:05) agree especially when you hear his numbers on his uh on his vacation property in New York state when compared to his Niger Falls Ontario short-term rental the numbers are completely night and day as well as how he’s being regulated by that local government in this episode John and John and Andrew share their journey to writing this book so we may all learn from their mistakes and how to how to be successful in their book with in their book which is U similar to Tim Ferris tools of Titans where experts have contributed chapters
(06:37) to the book including yours truly the book is called real estate Titans tools tactics and wisdom for Canadian real estate wealth I’ve included a link in the show notes to Amazon so you can pick up the book and to follow John and Andrew they’re both available on Instagram and very active and uh I don’t know how howse to put it but I did chirp John he is a fireman he’s a young good-look guy he does appear in a calendar so he’s a good guy obviously because he’s taking a shirt off for charity who El what what other kind of
(07:12) good guy does that anyways please enjoy the [Music] show hello John hello Andrew uh what welcome to the first threeome we’ve ever done online for the podcast yeah we’re on to something here thanks for having us for the listeners benefit well the listeners who’ve been around for a long time no I’ve never had I’ve had two guests in person this is the first time we’ve done it online which makes sense since uh we’re all a little bit further apart uh but yeah let’s go what’s keeping you busy these
(07:49) days yeah who do you want to go first oh you spoke first Andre you you first all right well um when was I last on here on your show year ago 12 months yeah maybe a bit more than that um yeah so I got a two-year-old and uh I uh have been still busy in the US last time I was on we were talking about the new developments the builds um I’ve since sold all that off I did build three sold off the extra lots that I have sold those buildings and uh basically just decided that Kate Coral wasn’t going to work anymore given
(08:21) some of the changes in the market know you and I have chatted about this uh recently but uh basically things just got squeezed cost costs went up on building and then of course the market kind of came down slowly not as bad as it did in Ontario but it did come down in Southwest Florida too and um you know I just kind of decided that it wasn’t worth the risk for the P you know the perspective profit margin it uh you know just didn’t justify taking the risk so I I took a couple of small losses on some
(08:50) of the Lots just to liquidate them uh knowing that I was kind of getting a negative return on Equity at the moment with the stagnant market and then just you know paying property taxes on those slots so um shifted gears I’ve been doing some off-market acquisition right now uh making offers on land I was chatting with you a couple of weeks ago uh so we’re uh somewhere around 6,000 offers in 30 days and uh I got another 4,000 in change going out uh pretty much today so um yeah keep it rolling and that’s in Florida all in Florida right
(09:23) now yeah and I got the hospitality business up here we completed our second uh full season glamping uh we acquired a resort as well 9 Acres on the water in toore and uh so it’s all part of a you know the getaway group of companies sort of what we call it and um we do Luxury glamping and luxury stays in the area uh and we’re yeah like I said we’re expanding uh we we probably did a 75% increase in our sales year-over-year uh for 2023 and we’re looking to do a a similar growth again next year uh
(09:57) because we added a bunch of new inventory and you know new trailers T really awesome stuff um anyone wants to check that out they can check us out on Instagram at the gr getaway glamp and uh yeah that’s uh that’s the most of it writing a book we’re gonna talk about that today uh so John and I that’s why we’re here we’re talking about the book and uh yeah that’s had us both busy so uh both of our plates have been full and I will uh I’ll pass it back to you irn or John yeah before we just before we
(10:25) get to John just want to highlight for The Listener like I’ve known Andrew for quite a few years and it’s it’s good to see that you’re willing to share loss and also that you’re willing to Pivot when the market when the markets change yeah right because well how many people had losses right like I mean I had I had some wins too I I mean I I look at Florida and Southwest Florida in my first experience as as being um an okay Endeavor like I didn’t lose overall but it it didn’t justify the effort so
(10:53) that’s pretty much where I walked away from it like I apply when I’m doing Investments down there I apply my own internal rate of return if I can’t profit on top of that to me is effectively a loss because it could just put that money out in a passive investment yeah so that’s that’s in order to keep things equal I have to look at it that way right so for for those who don’t know like Andrew’s a smart guy so his money if his money is not working hard for him then it’s a loss essentially yeah if you know what
(11:18) you can Al invest in right like I know what I could I could go get 14% passively so if I if I’m not getting that actively why am I doing it you know I should be I should be able to do that and then some actively mhm MH and I was going to say like you made a lot of money in in Ontario investing as well I had some wins I’ve had some failures I shared both but uh yeah we we’ll all continue to have failures they’re only really failures if you don’t learn from them right y if you don’t cut them off and you when you need
(11:46) to so also we have John on the show so John this is your first time on the show first time on the show yes thank you what’s keeping you busy these days yeah the novel’s been one of the biggest things that Andrew and I are writing um we were fortunate enough to have you as one of our uh one of our interviewees in the chapter we really appreciate that your chapter is fantastic you gave a ton of insight and wisdom so we appreciate that but I actually approached Andrew for this idea about two years ago which
(12:16) I can’t believe that it’s already been two years already and uh I’ve told the story once or twice but I pretty much just sent Andrew a a DM video on Instagram it was just like hey man I’ve got this idea for a book I want to do this and this and we set up a meeting for a couple days later I pitched the idea to Andrew and he’s like yeah man that sounds awesome let’s go for it so it was a perfect match because I’ve written a book in the past so I have all of the publishing knowledge editing I’ve
(12:45) gone through the whole process before and Andrew’s knowledge it’s it’s uh you can’t really top that and his role aexs of guests he’s had on the show so it was pretty much a match made in heaven we both used our strengths and I just kind of brought Andrew a list of people I wanted in the book you were one of them and I had maybe 20 25 other people and Andrew was able to match us all together which was fantastic and that’s pretty much been the biggest project we’ve been working on but aside from that I guess your
(13:16) listeners wouldn’t know me my day-to-day work is a firefighter we just kind of talked a bit about that off camera and uh yeah that’s kind of what I do during the day I have a handful of airbnbs in Ontario and one in elville New York at Holiday Valley nice little ski area out there so that’s a lot of fun and over the last year it’s kind of just been stabilizing after everything that happened in the market kind of took a step back with everything and we’ve been stabilizing our Airbnb airbnbs and
(13:47) portfolio and that’s kind of the day-to-day right now so I asked before we start recording if anything’s if everything’s fair game he said yes you did can you share the story how you got introduced to my podcast yeah that was actually that was probably maybe four years ago now and uh my father was a big listener of Irwin and when I started learning about real estate that was probably four or five years ago as well and I was a big Andrew Hines fan and that’s why I actually approached him for the book I learned
(14:21) most of my stuff from from Andrew and then I was talking to my dad about his podcast and he’s like oh you got to listen to this Irwin guy he’s fantastic and you got to listen to him so yeah I started listening to Irwin’s podcast that I must have been 2019 or so maybe 20120 not quite sure but I’ve been one of your what is it 100 listeners or thousand listeners for 17 listeners okay I knew but yeah I’ve been one of The Originals I’d like to say thank you for listening and thank you to your father and uh I can’t let
(14:52) you off the hook for this either before we were recording we Andrew and I learned something very personal intimate about you that you do take your shirt off for a calendar yeah seeing as this is your first virtual threesome on a podcast I feel confident sharing that yeah I’m part of the firefighter calendar as a firefighter in the niagar region we do this for charity for pth stone mental health it’s a fantastic um it’s a fantastic organization so yes I’m willing to take my shirt off for a good
(15:22) cause sometimes and you get nothing for it this is all for charity all for charity yeah it’s a great time good char good time couple laughs are had and I think that’s a good segue into the book like people don’t write books to make money like there’s there’s not nearly enough money in it for for to cover all the time and effort that’s for sure it’s been oh it could be a thousand hours between Andrew and I at this point between all the interviews and storyboarding and the editing process
(15:51) and back and forth you know uh you know yourself know irn that we had to do kind of an update a couple months ago because so many things have changed in the market so it was almost like two full rewrites of the book and everything so yeah it’s a ton of time and effort but the reason I wanted to do this initially was when I got into real estate and flipping houses I really didn’t know much about it I kind of just jumped in because I knew real estate was a good investment but I I knew we were playing with some big numbers here some
(16:20) life-changing numbers but it’s also life ruining numbers at the end of the day and I didn’t know much about real estate other than what I’ve learned from Andrew and yourself irn so I wanted to kind of build a community of people I was able to speak to I think 20 or 21 investors and interview them for the novel and I just personally wanted to learn from the biggest names in the industry and that’s how it all got started so let’s start with what have you learned along in your own Journey because uh it’s it’s awesome you
(16:49) mentioned elville I need to hit you up later because uh we just got back from Huntsville and there was no snow right yeah El is a beautiful area but we can talk about that uh but the biggest thing in my real estate Journey was I started flipping houses about four years ago we were doing the nicer areas in St Catherine’s kind of the north end it was myself my father and sister we were flipping like higher end houses between the $600 and $900,000 Mark and we were making money hand over fist it was crazy it was all during that
(17:23) boom and that’s all I knew at the time I’ve heard about the 2008 scare whenever everything crashed but people weren’t talking about that two or three years ago very much there were people like both of you who understand it that would say that would reference it it’s not always going to be great but for someone like me that’s not been in this industry for very long I just did whatever I could to get more money make more money and get more properties so some of the basics of real estate investing went out
(17:52) the window but I ended up borrowing a lot of private money private financing private mortgages just to get more properties under my belt and then when everything crashed I think it was the start of Q2 2022 I was holding three properties with private mortgages private funds all between I think at that time $750 and $900,000 each of them between1 to $150,000 worth of Renovations into all of them and uh we ended up having to liquidate that at a huge loss for example I’ve told Andrew about the one house we purchased for
(18:30) 750,000 we put in anywhere between 100 and 120,000 and then um things got so bad we had to let it go for under 700,000 so major loss on that one we had a similar situation with the second house and then the third house we ended up turning into an Airbnb in niagar on the lake which is now doing wonderfully but that’s money we didn’t expect to have tied up in a property long term and yeah after a couple years of doing great uh it kind of all came to a halt at that point when the market crashed it was about a year
(19:02) of stabilization and yeah it was a very tough year and a lot of learning for sure and were you able to keep your lenders whole yep yeah at the end of the day everybody got paid back and everything but it was at a big personal expense unfortunately uh had to dip into the personal funds and everything but yeah everything worked out with the lenders and everything but pretty much all the pro the the progress we made kind of took a halt and but we were able to stabilize at the end of the day did you basically give back
(19:37) everything you made then yep yep in so many words yeah it’s too bad because we started I think we started in 2019 and like I said we were absolutely crushing it with a bunch of flips I still do have a handful of airbnbs which is great so I do have some of my portfolio left but pretty much well 100% of the flipping profit was G on and had to liquidate some more of the portfolio just to pay everybody back thank you for sharing John yeah for sure yeah who shares that e like yeah no problem you know keep on moving just usually go quiet like so
(20:16) many social media profiles have gone quiet yeah people just go quiet like they don’t share yeah for sure it’s been a hard time and I’ve been very open about it the whole time and my fiance has been incredible honestly would not have got through this without her we talked about it off camera she’s a social media manager and um she was doing very well before all this happened but when all this happened I didn’t have enough cash flow like our personal expenses were absolutely insane and we didn’t have enough money month by month
(20:45) even liquidating some of the portfolio just these private mortgages we were holding and paying back all these lenders and stuff we pretty much had to 3x her business overnight we did that in about two or three months just to just to to live just to cash be cash flow positive so thank you to Courtney for that shout out Courtney yeah no kidding think you owe her one I owe her lots I owe her everything that’s for sure and you kept your job through the whole process right I did yeah yeah that all went to uh private mortgages and stuff
(21:20) I’d get a paycheck itd go One Direction so yeah it’s been like I said it’s been tough but we’ve got through it we’re still paying for a little bit of it but yeah I think we’re kind of on the other side of it now so if you didn’t have your girlfriend in your great paying job where would you be um I would have had to sell all of our airbnbs for sure there would have been no question our oh well now that we’re sharing things our monthly expenses were about $22,000 that was between um just our personal house all
(21:54) the interest payments the private mortgages and stuff like that I’m only responsible for onethird of the flipping corporation that we had so for those three properties I was on the on the hook for onethird of all those properties but I also had my the private funds I I was borrowing so yeah it was lots of money going out every month and it was not going to principal that’s for sure so is that gross debt or is that total debt Andrew you had your mortgage license uh total debt service includes like yeah everything credit cards
(22:28) everything that’s not property related so anything directly related to 22,000 total debt a month yeah that was going out yeah okay did not the need for the plan A B andc uh yeah like you obviously on that one property you’re you you were able to turn it into a positive right of course like said you got money tied up in it but yeah but yeah like like I said at the start of this I wanted to write this book to avoid all unfortunately I started writing this book like as this was all happening so I thought I had a plan A B and C but I I
(23:07) didn’t know it could be that bad even my worst case scenario I didn’t know house prices were going to drop 20 25% overnight I didn’t know that no one was going to be buying homes everybody was selling off what they had and for that house I was talking about that we would have sold for 950 to a million and we had to sell it for 700,000 less than what we bought it for like I never expected it to be like that I thought minimally we could break even sell it in a timely fashion and but no it was definitely not like that well not
(23:38) everyone sold everything I’m still bag holding that’s because you probably used good uh investing principles like I did not so you were able to hold these assets could have been better I yeah of course that’s for another show but yeah John before we Sorry before we move on to the book can you talk to what were the relationships like because this was a family-run business the flipping business how about the relationships with your partners your your which you said was your sister and your father yep yeah um
(24:08) luckily for them they didn’t have to borrow private money like we all had to do the private mortgages of course but I needed private money for all the renovations and everything for my 3D so they were in a bit better of a spot than I was so everybody was stressed the whole time but luckily like yeah we’re family first and it’s hard with family sometimes investing and in life and everything but we got through it we figured it out and we still own that Niagara on the Lake property together as an Airbnb and it
(24:38) was figured out like we all had to help each other at different points but figured it out got through it and that worked so what would someone who read the book would they be able to avoid these Mist these these challenging times that you’ve had absolutely yeah so that was the goal so basically we used the book tools of Titans by uh Tim Ferris is kind of the guideline for the novel book the author yeah I see it in your background actually right there bottom left corner that nice little orange one um yeah F fantastic book but basically
(25:12) you can see four our work weeks on on my right I can see I can see the Spy but yeah go ahead sorry I can see it too yeah so there’s about 20 interviews with some of the top Real Estate Investors in Canada so people are able to start from the beginning with their story what they did to start their investing portfolios and then all the way up to who they are now so a lot of times it’s hard to look at someone like yourself Irwin and be like well how do I get to Irwin’s level so we wanted to give people everybody’s Inception story
(25:43) and then kind of the steps of how they built their wealth and their portfolio that’s kind of one section of the book is those 20 interviews but then the start of the book is a lot of Andrews knowledge being poured into the reader we have a couple chapters like Andrew’s golden rules of investing um how to F find your how to purchase your first investment property and things like that it’s very actionable chapters where you can even just print them out use them as guidelines and checklists and stuff like
(26:11) that so we’ve really broken it down to the base level for the newer investors and then we have those 20 chapters going into the expert stories sounds pretty awesome and something some everybody should probably consume at the beginning yeah the big thing like so we wanted to make sure that the process and methodology and and you know because it’s a buffet there’s all these different things you could do how do you synthesize like the different strategies and and pick what what works for you so a lot of it’s about finding that fit and
(26:42) then of course protecting your downside which of course is harder in Ontario now than it was before when cash flow is probably your biggest protector um which most people don’t have so uh we did you know focus and this is what created so much extra work is with the downturn and the the new interest rate environment and economic climate and and declining real estate values is you know how do you succeed now and and what’s going to work now because a lot of people can’t relate to how say you started or when
(27:10) all those years ago or how I started all those years ago um but they can get my two cents on now that I’ve seen 12 years of this like how would I start again if I had to start right now and I in a lot of ways I look at it as start starting again a lot a lot of what I’m doing although I’m coming in with a better better start than I came in last but you know I think that there’s a lot of opportunity right now it’s pretty exciting and I know you have your your ideas what you shared in the book too
(27:37) and uh I’m I’m super like this is probably the happiest I’ve been going into a new year from an optimism standpoint like yeah of course that nothing’s perfect but there’s there’s a lot of good stuff on the horizon yeah I like to agree especially where we are I know we’re we’re recording this January 2nd I know we’re releasing this in February but uh you know I think we’ve reached the bottom for both the US and the Canadian markets so yeah I I agree I’m I’m very
(28:02) optimistic oh so actually and question for Andrew Andrew John mentioned there’s uh what did he did you say golden rules of investing yeah the golden rules or Andrew’s golden R rules of investing can’t remember the exact title but yeah that’s one of the chapters Andrew can you share some of those golden rules maybe give me three oh put me on the spot um I’d have to see how we wrote it down but I mean obviously a big one is is cash flow don’t invest in Ontario no I’m kidding cashow FL number one um John
(28:32) what did we put in there I I we haven’t gone over that in a bit I share these things all the time but how how I exactly uh wrote it um you know for me I’m going to sound like a broken record you know if you if you listen to me uh you know have your plan A B and C be able to Pivot these are things that would be in those golden rules um invest in a way that fits with your own capabilities it fits with your why um there needs to be a there needs to be Synergy between what you can want and need to do and the in the strategy you
(29:00) picked so just because uh you want to do Airbnb Arbitrage or hospitality and you want to go full-time into real estate uh but you know at home you got kids and you got a full-time job like that’s just those those don’t fit you know you might be more uh set up to do more passive type of investing so um that would just be a little bit of a preview of some of the stuff we covered right let’s pick on John for example I think his story is actually a strong one in that um you know and you and I have talked about you
(29:29) know we talked about like what’s out there in terms of like social media marketing and whatnot all these programs that promise you uh if you take their course they can quit their job but you know we were just talking about John if he had quit his job he’d be financially ruined yeah for sure uh and that’s and that’s just reality of things and we all talked about and Andrew you mentioned cash flow and I was talking to an investor uh this morning about you know we’re talking about cash flow Ontario and my point was to him was
(29:57) you know we’ve never felt inflation as badly as we have the last two three years right and so a pro formula for a property a residential property say just use of something boring something very Vanilla single family home in Ontario anywhere right could be condo could be detached home your cash flow uh we all know your expenses are going to go up but we have rent control in Ontario so your cash flow is only ever going to get worse is this a good investment all for those who are listening like both John and Andrew are
(30:32) smiling I’ll let either you go what do you what do you think go ahead Andrew oh geez um yeah I’m here I’ll throw out something as an observation neither of you are investing in long-term Residential Properties that’s that’s a very easy observation right no we’re we’re not in I mean in Ontario for me to to me to invest in that kind of thing I got to get it out a price that makes sense for the headache right like that’s that’s the new reality you always had that risk but before we had compensation for that
(31:05) risk in the form of cash flow in the form of appreciation and 30% a year returns uh that was factoring in your leverage you know and a healthy cash flow like it was very protected it was very hedged it felt great uh and then we got into a place where you know returns as I can calculate them on my cash flow sheet are like looking like 12% which you can get more in private lending so now all of a sudden it’s like wait why would I do that for all the headaches that come with it you’re speculating at your appreciation right now I’d still I
(31:34) still uh would estimate that we’re going to get completely stagnant or 1% I mean of course in in 10 years time I expect real estate values to be up but I don’t want to bank on a big number there and uh knowing all that it doesn’t look great and especially when you don’t have cash flow you have no ability to Pivot so that’s why I’m not really um active in Ontario what I am open to in Ontario is the fact you’re not active in residential long residential in Ontario yeah I am open to a deal in Ontario like
(32:05) if it comes at the right price of course and I think people are sleeping on Ontario right now because everybody’s looking at the US so um I went I was in the US before most of the people who jumped on the bag vanwagon here but um I just acknowledge that that if if everybody’s looking South then I’m still going to pay attention to here um but yeah my activities are still South and uh for the time being will be I don’t think that the rules as they stand in the real estate uh you know uh so the
(32:34) landlord tenant board here in Ontario are going to stay the way they are I think that there will come a turning point once you know institutions own most of it uh where it’ll it’ll become much more landlord friendly but for now it is what it is I I hey I’ll still take a great deal and I still think there’s great opportunity here but yeah um just not my key Focus right now yeah and for me I’m not touching any long-term Buy holds or anything like that in Ontario I have a couple airbnbs in Ontario and they’re still cash
(33:04) flowing very well especially the ones that I purchased a couple years ago uh the one property we have a 2.7 interest rate and the cash flow is fantastic on that we have another similar one like that Niger on the lake but then the Niger on the lake property I mentioned earlier we have a we have a huge mortgage on it and I think our interest rat’s around 7% and even though it’s in on the lake renovated perfectly as a hot tub like it’s As Nice of an Airbnb as you can have and we’re barely cash flow
(33:35) positive so even at that point is it worth it not so much at 7% but the properties we bought a couple years ago yeah there’s still huge cash flow machines and everything but like Andrew said if you can find a great deal and maybe for me again I like the short-term rentals it’s a lot better for the cash flow but the biggest thing for that is just make sure you’re in a short-term rental municipality that’s favorable for it because a lot of municipalities are not so if they don’t have their
(34:05) established rules I would highly recommend not entering that area yeah mature you want mature bylaws they’ve been there a long time um one other thing I’ll add to that is now this is what I was getting at with people sleeping on on stuff like VBS and negotiating special terms and and all the things you can do in Ontario when sellers aren’t getting a thousand offers thrown at them that’s where you get to kind of create your deal and you can create sort of something that isn’t on surface level people wouldn’t
(34:31) necessarily see it but it could be a fantastic deal for you so not saying everybody needs to race to the US because I don’t think that’s the case um you might you know if you if you go that way you might have an easier time but not necessarily oh I just want to share with you both a Toronto realtor friend of mine tell was telling me he’s bus it’s insanely busy in downtown Toronto already yeah he was hoping for a quiet holidays nope with uh with fixed rates coming down uh they’re already seeing he
(34:58) shared with me a a tono semi semi detached home had 25 offers on it sold for 300,000 over asking so just with the just with the news that they’re going to come down obviously fixed rates have come down but they’ already had an effect of stimulating the real estate market which actually puts in Jeopardy the likelihood of the real estate rates coming down could be we’ll see in the short run anyway John question about your n [ __ ] on the lake property so um so when I see this kind of activity already happening
(35:28) in in downtown Toronto I gen that’s usually like kind of like our epicenter of real estate activity uh to me that’s the early indicator that’s the canaran the coal mine that we’re going to start seeing activity pick up uh slow it like Toronto be downtown Toronto will be the upper Center and it’ll Ripple out So eventually it’ll make it way up to Nag on the lake not not 25 offers but you’ll see buyer demand pick up probably very significantly over the next 2 years what would your plan be then with your nagon
(35:55) lake property you is that something you want to continue to hold or would you take the exit when you can we have it at a place where it’s cash flowing nicely now but it took a lot of work to get there but if they get back up to the prices we were seeing a year and a half ago i’ it definitely be worth looking at because that’s the one property that I I wouldn’t mind selling at some point just to get back the rest of the finances that I need to pay everybody back and then be completely whole again
(36:23) personally but yeah I think we would sell it just because again with the interest rates where are it’s not crazy cash flow positive it’s not in our slow season we’re cash flow negative in the main Seasons we are very positive but it’s almost not worth it kind of like Andrew said the return on investment just isn’t there on a property like that so if it does turn in a year or two I think we definitely look at selling so a question I’m I’m starting to ask folks is especially as we’re into
(36:51) this kind of like realate Market pivot is what is your next uh income property P purchase going to be so uh start with you John yeah for me I am liking over the Border definitely um elville New York uh they have Holiday Valley there and holmont the two ski resorts they have a casino right out there some amazing golf courses and some worldclass Trails it’s very big with like mountain biking out there I’ve got a property out there and my partners on that property I have a second one out there so it’s a
(37:24) good spot it’s just again interest rates are a little bit high right now so it might not be a terrible idea to pick one up before everybody starts buying again because you can always just refinance when the rates come down but I think the next place I’m going to go is somewhere like in elville because with our airbnbs we always want people to have a reason to go to these places all of my airbnbs in St Catherine’s and Niagara they’re right beside a beach or in Niagara on the Lake so it’s always going to be very
(37:53) touristy areas and people are going to keep coming to holid Valley like Blue Mountains blown up and it’s super crazy the real estate out there so I honestly believe that’s an area that’s going to pick up is Holiday Valley and elville so somewhere like that and I do like the 30-year mortgages out there as well so definitely looking over that way right so sorry just to uh just just from my own understanding you’re saying narland lake is kind of like seasonal versus elville is more the Four Season uh it’s
(38:24) not so much the Four Seasons in elville but it’s just so much cheaper there that we can make so much money in the High season that you can we cash flow very well there where Niger popular too though right it is absolutely yeah it’s kind of like kind of like the wet Seasons that aren’t great like early spring and and yeah exactly but yeah no it it is almost a Four Season place where in St Catherine’s and Niger on the lake it’s definitely more of a spring summer early fall type place can you
(38:52) walk us through some numbers what you think your next investment property would be like in elville yeah at bille so we bought this one almost 3 years ago now and we bought that one for 250,000 if we were to buy that same property same property today they haven’t gone up like crazy so we could probably pick up a comparable property for about 300,000 which is pretty nice there is not a big inventory out there which is something to note and also they don’t allow airbnbs right downtown in the core so we’re kind of like in
(39:25) Farmville we’re about 7 Minutes drive away from the uh ski hills and from the downtown but it’s nice quick drive so yeah if we buy that for 300,000 probably it cost anywhere between 40 and 50,000 to get everything to get it set up to how we like our Airbnb standards I’m talking like very minor Renovations all the furniture all the bedding linens towels all that get everything set up for our maids so we’re probably looking about 350 all to get set up for a for a middle of the road Airbnb in a nicer
(40:04) area Okay so I’ve been looking at Blue Mountain properties and this is this is this sounds much more affordable it is much much more sense doesn’t it and I had him on my podcast we were running through those numbers and and he did this incredible games room and I think you were at like 70,000 a year Revenue before John and now you’re thinking like I’m I’m thinking that games room could put you up to 100 oh yeah we’ve had it live for maybe a month now and we’ve already seen the bookings they’ve gone through the roof
(40:39) in both volume and price we’ve raised our prices about 15 20% and people are not having an issue paying for it so you’ll easily surpass a 100 then I think so and like I said we bought this house for 250 like couple years ago and uh I think our mortgage rates locked in at 2.
(41:00) 9% so for how many more years 30 27 years 20 yeah 27 years like I you can’t beat that so don’t sell that it’s incredible no we won’t ever that’s great does this can I find this property online uh yeah um what would be the easiest if I gave you the address or sure like can I uh yeah let’s shout at your property get it fully booked for the rest of this I appreciate that yeah 6365 Somerville so s o m m e r v i l l e so Somerville Valley Road yeah we’re booked up pretty good the next month or two um but shout yeah shout out to Pink wall designs they’re
(41:47) the ones that did our our garage they did the designs for our garage and then me and my partners on the pro project went down there and did all the work and it’s been amazing uh do you have a website or or Instagram for this property I might just no we don’t we’ve always talked about doing it we just haven’t done it but I could always just send you the link maybe could text it to you that would be the easiest I know in didn’t SEO running to the US but this sounds pretty awesome cuz I literally just got back
(42:19) from a ski trip where there was no snow but for my my research via chat PT is my understanding is elville even though it’s Sou Falls it gets more snow than Toronto which is crazy absolutely high elevation right it’s like 1500 feet I think if here in Burlington we’re around 600 feet above sea level so I think that that has something to do with it yeah definitely irn I’m just sending it to you right now sorry took me a second to get there oh good no for the listener’s benefit um under again so
(42:51) holid Valley which is the main which is the biggest ski resort uh in the area elville like definitely yeah it’s it’s huge and where like I’m in St Catherine so it’s an it’s about an hour and a half to get there where for me to get to Blue Mountain it’s two and a half three hours so it just makes sense quick quick ride over the border and you’re there and yeah I might place next year hopefully you allow me to book you direct US versus on Airbnb and absolutely of course that sounds great
(43:24) because I was on their Instagram and they were they were open for skiing like the first or second week of December just nuts yeah a couple weeks so it’s really nice yeah versus they had no snow and Whistler over Christmas right yeah for whatever reason lots of snow there I should stop talking about this so I don’t oversell the place for the next holiday I know that’s what I always do I talk about things too much and then everybody goes and does it yeah yeah that’s it yeah like I said with the
(43:52) interest rates being higher it is definitely harder to cash flow there um but it it’s still doable still someone could go with a bit of cash or even like if they use a helck at least is variable and then it’ll come down as rates come down right and it’s interesting they have a lot more land out there too so I’ve always had it in the back of my head of doing some sort of developing out there because you can get quite a bit of land for pretty good prices out there yeah because I found your property
(44:17) on Zillow and you have a huge Garage on it yeah you should see the garage now look up the listing there I just looking at it right I just sent it to you on Instagram irn I couldn’t get your phone number quick enough so here irn I’m putting it in the chat uh here on the on the zoom there you go oh you found it on B&B perfect oh wow okay I’m just gonna share screen so so folks on the YouTube will be able to see it awesome so would the gold would this fit the golden rules yeah absolutely would fit the
(44:55) golden rules yeah the big thing is your plan a b and c like you know what what would you do this is my biggest test is like what would you do if your plan a didn’t work out obviously their plan a here is go in run a Hospitality you know unit and be positive cash flow to some degree I’m sure you guys had a wealth building and goal in there as well um now as far as what happens if if things don’t go well well your first pivot might be to sell um would you necessarily uh make money that way I don’t know if Market values have changed
(45:27) enough that you would but then you so you could do that you might lose a little bit not a great plan B your plan C could be to rent it out just to families uh or do some sort of midterm stays uh if if for some reason Airbnb say was outlawed and you know this is this is type of stuff that that we talk about in the book is you know kind of examining what could happen and what you would do in each scenario and this one works out really well right now now would it work out well on a monthly um a monthly basis I feel like John if you guys could strip
(45:57) out the utilities and uh just do a simple monthly rent you might be okay and uh from what I hear New York state is actually not bad to be a landlord in as long as you’re not in New York City um so it does look like you have some um some uh contingencies but one thing to note about you know sort of the plan a b and c and having contingencies is that um it it becomes more and more important to have great contingencies the less Rock Solid your plan a is right if if you know that plan a is like you know 5050 shot of working then you know your
(46:29) contingencies need to be that much better if you know that you’re Rock Solid on your plan a it doesn’t mean don’t have contingencies but you know maybe you have to be okay with an outcome where you might lose a little bit if the worst happens like if we took John back to before he lost everything and said hey if if [ __ ] hits the fan you’re gonna lose 200 Grand per house are you cool with that he probably would have said no and picked a different um a different type of investing but if he was making a million on every house he
(46:54) might have said yeah that’s no problem John do you know what would this rent for this host rent for long is a long-term rental I haven’t looked it up in about three years uh to be honest with you I haven’t looked since we actually bought the property yeah and elal is pretty established with all their short short-term rental bylaws and everything like that they just said pretty much stay out of the main village and do whatever you want on the outside and we pay our our fees and and we’re laughing but no I haven’t looked at
(47:22) long-term rentals there for a long time and then our last plan that Andrew didn’t say is basically we could just use it as a vacation home at the end of the day if we wanted to because the prices are so low there and we love going there it’s beautiful and in the summer and the winter we love skiing and we actually don’t use it very much because it’s always booked but if we had to use it as a vacation home we’d love that too that’s the whole being okay with the other outcome right not every outcome
(47:49) has to be a profitable one um if you’re okay with it for sure how does the low season here compared to niag on the lake it’s want to draw a comparison uh basically a long a long analogy for the listeners benefit most of our listeners will understand Nag on the lake it’s kind of like it’s a what what’s what’s the equivalent in BC for our BC listeners the Napa no sorry it’s a oh it’s escaping the the line region in a VC ohok okag Valley Ok sorry yeah investor here apologies I’m
(48:23) an never getting kid all right all right so yeah John how how does this compare would low season like how would low season compare uh between the between the two low Seasons because they’re different right elville is busy abolutely ski season is it it is yeah so January February March we’re absolutely slammed every weekend every week is pretty much booked at our absolute premium prices and then like I mentioned there’s a season or two that’s pretty slow March and April are a little bit slower as it’s pretty wet but as it
(48:53) dries out May June July August are absolutely crazy and then September October what I didn’t know is they do all these festivals out out in elville way they do all these Halloween festivals and Beer Fest uh cider Fest all these different things so fall is absolutely crazy there too and then November December a little bit slower again and then picks right up again for winter and then how the rent rates compare between the two markets for short-term rentals yeah uh trying to think it’s not as expensive it’s it’s quite a bit cheaper to stay in
(49:31) elville it is a lot cheaper yeah and again 3.95 a night Canadian what’s your Nar on the lake property yeah it’s very different like again like I haven’t done the cash on cash in a long time but our cash on cash is exponentially better in elville than it is in Niger on the lake for us but again we bought the elville property a year and a half before we have that 2.
(49:57) 9 % mortgage rate versus a 7% in Niar on the lake if we had both properties at the same time it’d probably be pretty comparable yeah sorry I don’t have actual numbers for you right now that’s okay but just H like back of a napkin it sounds like you could probably afford two elate V Properties for the price of your nager on the lake property in gener more cash flow AB oh yeah two and a half times probably even yeah for sure so I I can understand why that’s that be your next investment property all right same
(50:25) question for Andrew think about like so let’s let’s just you know everybody talks about the 1% rule or they used to so what what if he does if he does 110,000 divided by 12 so that’s 9166 a month on average what is that out of the say you’re in for what 300 John on it yeah that’s pretty accurate I don’t know if we’re gonna hit 110 that might be a little aggressive but okay say I’m off by a bit you’re 3% rule you’re 3% rule if you hit 110 so right some simple math I mean to put it in perspective at a
(51:01) 2.9% mortgage rate that’s a Grand Slam in my opinion for sure yeah yeah I think we just create a whole bunch of competition for John let’s just push the air date back a little bit until we all uh pick up one as well that’s it yeah exactly uh now both of you guys are big on Research as well and Andrew you I know you’re big into the recreational uh stuff as well uh the question that comes to top of my head is how do you do research on these things in aird air DNA always seems to come up um how do you
(51:30) guys how do you guys do your market research for recreational use properties I mean I can speak like we will’ll try air DNA wherever we can like I’ll buy the subscription to the area um I haven’t done a lot of it like I’m not like the Airbnb master or anything um you know the hospitality when we when we got into toore it was it was pretty much a decision based on what we knew of the area we knew of the the offerings it had the popularity that was growing um and then the limited Hotel fac facilities
(51:57) but air air DNA was pretty useless for the area uh just didn’t have enough base of knowledge on the area to really be that helpful for us so um you know I I feel like we probably uh in hindsight could have picked even better markets but we like that market it was familiar and uh you know I’ve spent a lot of time up there and then sorry you mentioned as recent purchase can you share like high level numbers like how how did it make sense like how did you how that how were you able to come to the decision it was
(52:28) a buy uh Neptunes we were pretty optimistic about what we could do from a um from a a General Revenue standpoint and then also the ability to add units so nine acres there’s only five five cottages on that right now but the zoning allows so the as of right zoning allows for um pretty much as many as we can fit as long as we uh we respect the setbacks so we’re just in the process of doing that the development on that uh profitability uh is there uh we’re working through um those numbers to kind of refine them right now and a lot of
(53:06) it’s going to going to depend on the feedback we get from the municipality in terms of what they’re willing to allow uh but initially we we were quite hopeful that we could make the existing houses profitable but with the uh sort of like the post lockdown era um rates have come down quite a bit and made what would have worked say during lockdowns would have been very profitable less or so so um we actually were a little surprised that we were lower than we expected for season but we also came in low like we or came in late like we
(53:39) didn’t get into the market until we closed in mid end of May of 2023 so we didn’t really have any sort of runup with our U platforms Airbnb any of that like we we inherited some bookings from the previous owner uh but uh you know we’re optimistic that this coming year will will be a heck of a lot better but we’re also not waiting for that to happen we’re going hard on the uh on the development play because the zoning is there waterfront property uh so we’re pretty optimistic about what we can do
(54:08) there it’s just about finding uh one specific model from a construction standpoint that works really well and has a lot of character and you know getting kind of a volume building discount can you kind of paint us a visual picture with because I know you’re very eloquent you you mentioned de like what do these properties look like are they Cottages are they Yurts or so what what’s there right now um looks like you know little Bungalow style Cottages um and then there’s the main house which is
(54:40) you know distinctly not really a cottage it’s it’s on the the road front the previous owner lived in that building but we’ve converted it into one of the uh airbnbs that one is right now available for year round but we just haven’t done what it needs yet to really make it appealing for year round use um and toin Mar’s just like frigid and cold and you know desolate in the winter for the most part uh although we’re looking to change that uh can’t change the weather but we can change what to do um
(55:06) so that’s what’s there right now but we’re looking into a number of different things including like an A-frame um Cottage that we can kind of rinse and repeat um but we’re going to keep it interesting whatever we do uh make it Instagram worthy that you know big thing and then of course kidf friendly uh we do get a lot of families up at that particular location uh it works really well for families so it’s a key of being able to access all the the nearby amenities and then having a heck of a lot of stuff for the kids to
(55:32) do so I know I’m a lot older than both of you so when I went to friend’s Cottages they were usually very very basic I remember going to a friend’s Cottage where there was no ceiling it was just you know a peak roof and then there was yeah there was there was walls between rooms but there was no ceiling so there was no complete separation between bedrooms that’s what I’m saying so you had to be quiet anyone who snored you could hear it cuz again there’s no complete separation uh but Andrew you’re
(56:03) talking about like these had to be Instagram worthy where I stay was not Instagram worthy it was it was you know was Bare Bones no way it was for season you know I mean all the all the all the cutlery plate wear was you know they someone bought it from like the 1970s garage sale you know I mean and that’s what these look like like a lot of these hous the the existing ones like they’re not super great construction um they’re very basic they’re not like Instagram worthy in any way um but that’s that
(56:31) blends in in that market right you can do fine with that um but if we want to do better than fine which is what I always aim for right you never just aim for average um because if you aim for excellent and you hit average then I guess maybe you’ll be okay um but we we always want to go U you know the best we can go within reason and that’s the expansion this isn’t for your like your IG game I imagine there’s returns involved incremental that’s the big thing like we we’re we’re taking what
(56:58) works at the camp and and applying that at the cottages and people come to our camp and they literally want to do yoga po poses in front of the tents and take photos of it and then share it on their Instagram they do they do reals they do you know of them by the fire and and it’s it’s like a memorable Instagram worthy experience and we just want to make sure that we create that same thing because that drives our own marketing for us at no cost right like I mean yeah we invest in the experience but they
(57:23) they advertise Us for free and when we’ve done like on our camp for instance we’ve done it two years in a row where we got 177,000 or more comments of people entering for a free stay at our uh at our facility uh basically just tag somebody you know to to enter yourself for for um a chance to win a free stay and and 177,000 plus each time we did it so they went you know pretty viral explore Ontario we did like a a promo with them and like jointly posted and did the giveaway and it it worked out well so this is what we’re trying to do
(57:55) uh with the Cottages as well I’m laughing because I follow John on Instagram and I know how when you said people literally do yog poses in front of the where they’re staying John John for anyone doesn’t know John John is well traveled and goes to places just as nice as Andrew’s cam Crown just a disclaimer that’s because my girlfriend is in social media she’s a social media manager and influencer so most of this is against my will but uh yeah I have a couple photos are you looking right now Rowan yeah oh
(58:29) my goodness that’s where my eyes are diverted oh boy is this on Courtney’s uh Instagram no it’s on John’s like there like yeah there’s literally John shirtless I’m staring at somewhere really nice yeah I think that one’s Croatia yeah we’ve been on a few fun trips oh boy yeah but if firefighting and real estate don’t work out for me I’m a great photographer and video graer now all of Courtney’s Instagram is pretty much me doing all the videos and photos so I’ve got a another career
(59:03) there waiting for me at least there’s one of you in Bali and I don’t know it’s some sort of hollowed out palm tree that you’re sitting in this talking about John doinker inst on Instagram see maybe I’ll break a thousand followers now thanks everyn we should definitely have a Courtney up to the camp I’m sure shirtless photos of you up there John I’m sure people would love it perfect we’ll set it up that’s hilarious everybody just listening to this is probably uh really scratching their head right now yeah
(59:42) sorry everybody well that’s why I’m telling them where to find John’s Instagram so they’re let in on the joke oh boy so yeah so I guess that’s oh interesting it must be a kpi for Andrew’s business like how many times can they find their campground on someone’s Instagram it really is it’s a funny thing like how do you how do you not just be like if you’re if you’re trying to think about what’s your competitive advantage that somebody can’t copy sure they can’t copy your location but if if
(1:00:09) we’re like a cottage Resort there’s plenty of other Cottages around so how do we become distinctly different and like momentum and first mover advantage in that space is important like if you have a reputation people know you by name or they they know of what you stand for and your cool experience your brand precedes you then um I think that your your longevity is is much more protected and you’re getting free advertising for it and free advertising which is huge right because then that drives demand then your equilibrium
(1:00:40) price per night goes up just like John’s experiencing right now on his Airbnb all of a sudden you got a games room demand is up and your price went up because of it and that’s you know that’s the key longterm because average results like if you look at average results in Ontario for just about anything it doesn’t really make that much sense to go on to go in on it right now uh so it’s it’s doing better than average or getting a better than average price you know or combination of all all the above that’s
(1:01:06) why I need to book John’s Place in elville before before this episode gets out I want to see there yeah downward dog in the garage perfect so I I’m apologize because I think we’ve gotten away a bit from the from the subject the topic of the book uh but I’m guessing that both both of your Investments fall in line with what the book teaches cash flow first you know PL what interesting the the people we interview so many of them you see like the fundamentals coming out in what they’ve done right and some of them maybe maybe
(1:01:40) you would say hey for me I wouldn’t feel comfortable with that like because everybody’s going to apply those fundamentals in their own way right and some people have a different risk tolerance which is fine um you know not not every investment is for every person so yeah for sure I mean that was the point and you know when when I remember and John and I were doing the interview where we were talking about the my chapters and like my fundamentals like uh you know there was a pretty deep discussion there we talked a lot about
(1:02:05) it and I remember you really loving that discussion John so I did absolutely yeah it’s all most of your big principles compiled into I don’t know 20 pages into the like the first 20 pages of the book is all of your the basics of real estate investing and how everybody should approach it in my mind but then after that it’s more of a buffet of how everybody built their wealth so learn the fundamentals from Andrew read the chapters from all the interviewees like find what strategies you like take what
(1:02:37) you like discard the rest and then really Attack One Avenue of real estate and you’ll have a pretty good base from there and this show is kind of like a buffet as well like this episode specifically because Andrew’s Andrew’s recreational properties are significant scale like Andrew you have several Partners on them active Partners on am I correct yeah in in different different different departments like one for like daily operations like yeah you have like an Acquisitions team well the the the four of us uh we all kind of we take on
(1:03:07) different things we do have a significant employee base that works the sites for us so we had up to 10 employees at at the height of the summer at any given time um and that should probably grow this year between two facilities so lots to do lots to grow lots to do lots to grow versus John is you know we’re talking about 300 Grand American that’s that’s a very reasonable bite for most GTA people people that live in the GTA to afford that for sure there is still affordable real estate out there you just have to pick and
(1:03:39) choose what strategy is going to work for it and it just so happens that the Airbnb strategy Works fantastic for it moving forward in the future like I’ve done a lot of flipping of homes so maybe the next step for me is going there buying a cheaper property and do doing some Renovations there kind of combine my two skills we’ll see what happens out there MH and then like for we talked about like risks and plans B A and C um I think we just touch on the fact that you know if if John can get like a large a large summer
(1:04:10) um business then you really reduce the risk you really improve your cash flow as well right like f we talked about Blue Mountain for example like when I was growing up nobody went to Blue Mountain in the summer like almost nobody now it’s nuts right right no actually no sorry people tell me it’s busier in the summer than it is in the winter which is mountain biking too right a big it’s uh it’s like The Bachelorette capital of the of uh of Ontario and don’t don’t don’t ask me how I found
(1:04:39) out I’ve been to a bachelor party there that’s a good point yeah not Bachelor but uh again like there’s probably there’s probably still upside for John as well with with climate change and like I said there was no snow and anywhere almost anywhere in Ontario in the ski area versus elville hat snow right so John still has upside his Investments more protected than other people’s Investments and again Lower entry point really reduces risk for sure and they’re investing a lot of money into the town of el right
(1:05:12) now so I do believe it’s going to get more and more built up and prices have started creeping up but I think it’s going to really again I don’t want to make a prediction or anything but I only see it becoming more lucrative tone out there well the US economy is strong as well with a strong economy comes people wanting to spend more Recreation definitely yeah so less likely needs for plans B and C for sure all right gentlemen I have to go to hop to another interview it’s funny enough is I have to
(1:05:43) go have to drive to Andrew’s office now uh any final words where can people find the book yeah so it’s going to be released on Amazon and we are going to be doing an audible version as well we haven’t quite got there yet but that is one of our big goals um like we were saying we don’t have our official release date yet but we expect it to be out in mid February but uh we’ll definitely be releasing it on both of our platforms Andrew and mine on Instagram to release when the book’s actually coming out but
(1:06:13) as of right now we don’t have a date for it and what’s it called so it’s called Uh real estate Titans tools tactics and wisdom for Canadian real estate wealth I love it so a little bit of a play on tools of the Titans we we had the inspiration from that so we wanted to sort of build that into the title love it love Tim Ferris love for our work we love tools of Titans uh then I had something else but I totally forgot all right gentlemen thanks very much for doing this yeah yeah thanks for thank you for watching if you want
(1:06:45) to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.com CA /youtube to register for our next class that link is also in the description as well I publish at least two to three videos a week here so subscribe if you want to keep learning from seasoned investors like myself and my guests and if you’re just starting out feel free to ask questions and comment below and I do the
(1:07:11) best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor training.com

** Transcript Auto-Generated**

** Transcript Auto-Generated**

(00:00) welcome to the truth B real estate investing show my name is Erwin Szeto I am the host since 2016 we have well over 300 episodes of this show and guess what what topic keeps coming up in my DMs you are 17 listeners who’ve been dming me would like to hear from a litigator a lawyer that specializes in suing people to guest on my podcast you ask and you shall receive I had uh three in have introduced to three lawyers who are interested in coming on the show and interested in taking on clients to uh to sue borrow
(00:31) to repes well probably willing to represent both sides anyways so I’m working on a few and that’s just the State of Affairs right now in the in the community though I should note the problems are generally isolated in certain groups unlike rain and Rockstar hence we just had CEO of of REIN Patrick Francy on the show and co-founder of Rockstar Tom carazza on the show Tom was just on Nick was on about roughly about a year ago as our to celebrate our 300th episode respectfully I keep hearing news about Investors within the community
(01:03) declaring bankruptcy or bankruptcy protection where investment strategy where the investment strategy was on the challenging side including major Renovations like basement sweding or Garden sweding or trapx conversions or whatever in small towns with small economies some of these towns even lack the basics of real estate investing like a growing population like Tim Ontario where the pop population actually shrank according to stats Canada pop like real estate investing works best in growing areas so where areas have growing incomes because
(01:40) growing incomes typically attract more people to move into the area which pushes rents and prices up again to pick on Tim Ontario I’m sure it’s lovely over there home of sh Twain the population actually shrank uh I’ve included uh the um in in the show notes I’ve included a screen capture from stats Canada between 2016 2021 they actually shrank by a couple hundred people point is most of Ontario did not shrink most of BC did not shrink why would anyone consider investing in a place where people where the population
(02:14) is shrinking sadly I heard news that uh this earlier this week or last week that one of the past guests of the show had declared bankruptcy I don’t know any of the details other than she was sanctioned also by her local Securities Commission uh but I haven’t heard about anyong doing so I’ll leave names out and the episode will will at Le stay up until I have more information I do want to warn and remind our 17 listeners that this is a recession that we’re going through uh I don’t know if You’ want it
(02:42) seems like a recession real GDP has been declining for like six quarters the economic picture for Canada is not that great right now uh and partly due to historically High interest rates that we’re in right now so there were so should be no surprise that we’re seeing bankrupcy es among those who speculated or they risked excessively or they overleveraged there was tons of lessons from the 2008 financial crisis where those who went bankrupt could not make payments on their debt hence it would make sense to not over
(03:15) leverage which is kind of wild because private mortgagees seems to be all to rage in in certain circles versus back in my day oh listen to me I just turned 45 and I’m talking about back in my day um prior to I don’t know about 2018 most Jun Venture deals most OPM other people’s money deals were for Equity not for debt so at least with Equity yes you you give up half of the ownership but you don’t have interest payments that could potentially bankrupt you so anyways I do have an ask for you my
(03:52) 17 listeners if you do want to help people uh that you care about then please share the show with them in my newsletter we do vet guests on this show and I’ve repeated it many times on this show I do not lend money privately I’ve never found retail opportunities to lend to be worth the risk in the worst case scenario Visa Mastercard collect 26 to 29% interest on unsecured loans why would I accept 15 to 70% on a promisory note the investment in oneself in one’s own properties maintaining direct ownership and control still remain
(04:25) undefeated as the best investment in my experience and I have I have over 45 clients to prove that mult millionaire multi-millionaire clients to prove that boring investing works perfectly quite well Terry and I are headed to Savannah Georgia for our next stage of portfolio building if you have any vacation or real estate tips I am all ears onto this week’s show we have returning to the show my friend Seth Ferguson and I want to thank him for hosting the biggest real estate investment uh real estate invent of the Year May 24th to 26th the
(04:56) Friday is more of a 101 for beginners then the main course is the Saturday and Sunday and I’m excited to see all my friends there from the community there hopefully our 17 listeners and and will be there i’ love to see you uh please stop by say hi if you see me I’ll stand up like a sore of thumb I promise you that and also I’m excited to see Wolf of Wall Street Jordan bord speak I don’t know his full story outside of the Leonardo DiCaprio movie I know he did go to jail for doing awful awful things
(05:23) with people’s monies uh but I do know he’s got some great great lessons to share from his loss uh and how if he could do it all over again if he just played the long game and been more honest he would have been like like 10 times more successful hopefully he shares that story because I love to see it in person Robert hyck of dragon dead and Shark Tank is the other keynote speaker along with SE the secret guest Seth will reveal on this show uh Seth’s pretty awesome too uh I enjoy interviews done by Seth and I enjoy seeing Seth
(05:55) speak uh I don’t know if he mentions it on the on the show but he actually the feedback on Seth’s talks is usually among the highest among his guests uh so on today’s show Seth shares the journey to the third multif Family Conference how and why he chose these speakers how this year will be drastically different than the year’s past much uh new and improved if you will we’ll discuss why Seth from Milton Ontario owns no income properties in Canada and focuses his efforts exclusively on uh the southern
(06:23) USA along with some of the numbers so you may want to have a pen and pencil ready to take notes and uh yeah please enjoy the show also multifamily conference.com Toronto Convention Center is the location May 20 Friday May 24th to 26 yeah please enjoy the [Music] show hi Seth sorry what’s keeping you busy these days oh a whole lot a whole lot nothing uh well a whole lot of nothing really we got like conference coming we got real estate we got all sorts of stuff yeah yeah nothing e nothing like everything has a seven fig budget I don’t know what
(07:14) everyone calls that nothing oh man yeah it is uh yeah it’s just uh yeah just trying to fill out uh figure out how to fill up my time and uh you know take myself away from uh the family as much as possible no I’m just joking just crazy just crazy which is hilarious cuz you coached your child’s hockey team not busy enough yeah I I added on the coaching so we’re on the ice a whole bunch and uh yeah what else am I oh I’m writing a book like all this kind of stuff so you’re writing a book too oh yeah well the huge history
(07:45) nerd kind of stuff right so history of what oh uh yeah buildings what no no no no no so it’s uh I’m I’m writing uh I’m doing a book on the eth regimen of foot during war of 1812 so I’m basically covering uh the regiment from 1810 to 1816 uh so it’s a very it’s a very geeky non-fiction like historical type of study okay hang on refresh my memory it’s been a long time since grade 10 high school history what was the War of 1812 yeah so the War of 1812 uh you know it was fought between Great Britain and
(08:18) the US so it really stem like brost and tea party stuff well yeah well that was like more of the American Revolution so fast forward uh to you know 1810 1811 there was a lot of tension and terms of the uh you know just trade with uh France who Great Britain was at War uh with at the time and uh the impressment of American Sailors boarding us ships there was a whole lot of stuff uh so uh the US declared war in Great Britain and then there was a you know three year and a bit War fought over that only three years they lucky yeah well a lot of
(08:51) stuff happened with it but you look in Southwestern Ontario so you’ve got you know Fort Erie Fort Georgia niagar on the lake you’ve got Fort Niagra you know Lundy’s Lane everybody know shopping well that shopping center is part of it built over um a battlefield uh so that that was one of the bloodiest battles of the war that was fought there oh okay yeah so cuz you’re not busy enough exactly not busy enough wait how wait just to give folks some context like how how many people attended the multif
(09:20) Family Conference of uh last year yeah so last year we had 2500 people 2500 well 2500 and change yeah that’s a lot yeah it was a lot of people yeah and we’re going even bigger than here so it’s going to be insane wait you have a bigger room how you going to make this bigger you already had a humongous room we did but we added some more square feet so you you’ll appreciate this with knocked down a wall yeah so you’ll appreciate this with with your uh your conference so we have about 180,000 Square ft just on the main floor
(09:50) and then we have all the rooms underneath so we’re so you like double that essentially in terms of uh space so yeah we’re really big wait wait wait are you doing two states no no still the main stage uh but in terms of the room in terms of uh and how we configured it like we can we can definitely add another thousand people right right right yeah yeah what what’s okay so actually let’s revisit so uh like last year was the first year you did a whole Friday segment just for like 101 investment training yeah yeah for
(10:21) for sure yeah so uh for context in our first year we ran uh the Saturday Sunday uh so two days mainten stage it was great mhm and during just out of the lockdown yeah man that must been so stressful oh so stressful for so for for history lesson just a few years ago you were the first big conference out of out of Co we were yeah and the interesting thing so in terms of venue shopping everybody was kept asking me hey why did you run it in a hockey arena and just convert it well the truth is those guys were the only people who snuck Us in
(10:54) during the lockdowns all the other venues wouldn’t let us in the building but um the ca Center let snuck Us in and we did our site tours and all the planning even though everything was locked down and that’s the only reason we were able to get in there and and actually run the run the event um but what I found the first year was We attracted a you know a decent number of people who were who were new to apartment buildings so maybe they were doing fix and flaps or some other type of real estate and they didn’t
(11:21) understand apartment buildings so when you know first year we had Joe Fess i’ say now he’s at like 3 billion in AUM um when he was on stage yeah so his portfolio he manages a portfolio of 3 billion oh yeah insane right so but when he’s on stage and talking those newer people weren’t able to absorb as much as he was giving out because they they didn’t have that foundation so last year we added a Friday workshop for beginners so this is where you know we we’re going to hey just give you all the basic
(11:48) foundational stuff so that way when you know Grant Cardone last year or Alex Rodriguez was on stage talking about their portfolios you’d be able to follow along a lot better um and that was crazy we thought we’d have like 300 people we maxed out room capacity at 500 and something we couldn’t fit more people in uh so this year we’re splitting it so we have our beginner Workshop just the same uh and then we have an advanced investor Workshop where it’s more focused on scaling uh Team growth uh brand building
(12:16) at scale like lead gen at scale that that type of stuff so you know if you’re an experienced operator we have a full day workshop just for you on the Friday and then if you’re kind of new to apartment buildings full day workshop that’s going to bring you up to speed you can be like 10 steps ahead of everybody else uh By the time Saturday and Sunday rolls around I love how like how how the conference has evolved oh yeah to yeah because you yeah you you always need information you need data you do send up surveys and you need
(12:43) information on how to improve yeah and then to see you delivering on the improvements that’s so cool oh yeah well like that’s the thing with with uh with any any type of product right you you talk with people face to face you know your good friends will tell you the the truth like right off the bat but a lot of people they they won’t give you the the real things that you need to know about so that’s why we always survey and then you know we read through and I read through every single one like the team does too
(13:09) but like I I read make sure I read through each one and we actually take it to heart like it’s like oh okay well we have a decent group of people saying this well how can we change it to make it better and because I want to as we scale this conference like we’re scaling this to be the real estate event anybody goes to and uh to do that we have to be the best so we’re always looking to improve CU I thought the first conference was incredible yeah it it was it was good um but like it’s first time with anything
(13:39) right like like there’s always things that that you want to improve on and and as you scale so like a thousand people versus you know 3,000 people there there has to be changes behind the scenes in terms of the framework to to allow you to scale to that size so and that’s that’s what kind of what we’re focused on right now is hey how do we deliver the the the top uh the best in class experience but also be able to impact thousands and thousands of people at one time uh because you know when you start
(14:07) adding a lot of people uh there’s the logistical stuff you want to make sure everybody feels included that that type of stuff yeah more things can break and oh man yeah well last year um our registration system um crashed on the day of so you know like we pay so we pay a lot of money for our registration stuff like it’s not just like we’re not using event braer like we pay a lot of money for this stuff and you know I didn’t even notice oh yeah well speaking of things go wrong behind the scenes so our team was incredible
(14:41) but we had the one thing I wasn’t happy with was people came and we had like the lineup was was pretty big like we had a lot of people but the reason is our whole registration system was down and um the conversations after the fact were not good in terms of us for in in that system because hey like we paid you guys a lot of money to perform and your system did not perform at all and and so that just tweaks and and making sure now this year because it happened last year it’s like okay well we’re running with a
(15:10) different company but hey what happens if this crashes what’s our plan B and last year we didn’t have the plan B so now it’s just like adding in different systems and and operations to make sure everything’s Flawless you know again as an observer like I didn’t know it was down and I know the lineup was long but they got processed pretty quickly yeah yeah but but like this is like I’m a perfectionist right so which is hard when you’re when you’re dealing size of quantities yeah like it
(15:37) was great and like our event is an amazing event but I like that that’s my personality I always want to make it better the next year so it’s like okay like generally it was good but where can we nitpick things to really bring you up to the next level and and that’s what uh that’s what we are ruthlessly doing um so yeah like like this year we we’ll we’ll have some changes in terms of how things run but it’s just to make things better right right yeah for sure and talking about trying to make better you
(16:04) had Mr 10x last time we did yeah you had M you had the Alex Rodriguez who I think uh I’m sure many people underestimated him myself included because I didn’t know his story and his and everything yeah yeah well actually let’s touch on that for a second because I got so much um so many messages on Facebook Instagram or emails about hey why are you bringing Alex like he’s just a baseball guy it’s like oh I got better certain people were like oh didn’t he date he used to date JLo right that’s how they knew him so they didn’t
(16:39) know he was a baseball player well well even Darcy was like who cares about A-Rod I just wanted to see JLo and uh but but who’s married to Ben Affleck now I think I think I don’t follow these things but yeah I think yeah I’m not I’m not sure but but yeah so but I was so excited to have him on stage because I knew what he was doing like with A-Rod Corp like he’s a sharp guy he knows what he’s doing he has a great team he has a great portfolio and so on stage I thought like my personal I thought he
(17:08) knocked it out of the park to use a baseball ter right like he was great and a lot of people came up to me after or shot me messages being like hey like I had no idea yeah no idea um and and that was you know I I was really excited for that cuz I could just kind of tell everybody kind of knows A-Rod but they didn’t really understand who he was as a business person he was playing in the miners and he got his first duplex so like he’s been in the investing game for a long time and I I think he surprised a
(17:37) lot of people which is great I love that everybody knows Grant Cardone but in terms of A-Rod like he was he was great yeah yeah actually had some Insider information I just my coach shared with me how how she knew many people and who who knew a rod already knew he was legit yeah so I was actually got the benefit of going in knowing he was incredibly legit yeah yeah and now again talking about passing trying to beat last year which is tough when you have Grant yeah you have three speakers coming up for this year yeah we got three big guns
(18:08) coming out yeah um and so we’ve announced well we’ve announced two should use the word guns because they are Americans three we have three headline speakers yeah yeah yeah so Grant and Alex were exceptional um and uh one of the things we wanted to make sure that we’re doing is keeping it fresh right like a lot of people said hey bring Grant back you know maybe we we’ll look at it next year but uh we want to keep it fresh and deliver different perspectives um and I think the lineup we have this year is going to
(18:36) be a lot of fun um so we’ve got uh Robert herc you know longtime uh you know Canadian uh immigrant uh longtime um you know star on drag stad Shark Tank he’s now executive producer of Shark Tank um and he’s seen a lot of pitches so uh you know one of the things with with our audience is a lot of people want to learn how they can improve their Capital raising skills so Kevin ol was our first Speaker the first year he was awesome he was great he was great um did the audience like him oh yeah we really
(19:09) enjoyed him yeah yeah Kevin scored really really well and this is the thing with like marketing like we get hate mail all the time uh dep no matter who we like bring in as a speaker we got hate about Kevin oier we got hate about Grant Cardone we got hate about uh A-Rod and this year we’re getting hate to so it doesn’t really matter right but but we want to keep it fresh so Robert can bring that perspective um in terms of the capital raising the scaling the team um that kind of thing um and then we’ve
(19:36) got the Wolf of Wall Street himself Jordan bfor uh coming in and in terms of like running you know like we run sales teams and stuff in terms of tone and how you can present opportunities and stuff I don’t think there’s a better guy uh so I I’m really looking forward to uh Jordan and he and we’ve got him set up so he’s going to be running a workshop just for our VIP so he’s on the main stage but he’s run a workshop just for our VIP VIP attendees in terms of how they can structure their Capital raising
(20:05) pitches and their presentations and and how they can uh just interact and Converse with possible investors uh better I think that’s going to be worth the price of admission in itself so so really excited because uh for anyone who’s followed Jordan Belford’s career they know like if he just stayed clean yes not in his maybe both both in his substance abuse in his business yeah for sure like he he had um what Steve Madden shoes lined up oh yeah yeah like he could have ipoed that yeah 100% And he I
(20:38) don’t know I don’t know how many hundreds of millions he’d be worth oh huge and and you just look at the the sales team he built he was able to take people who were just regular lay people like lay men and bring them in teach them how to sell and they were incredibly successful you know yeah things went off the rails 100% right um and yeah like he did his time but in like if you look past it and look at hey like what’s he actually saying like what what value can he bring like we’ve learned so much in terms of how we run
(21:10) our sales team from from um from what what he’s done so I I’m really excited to have him come in for sure and plus he’s got a couple good stories too so are you going to ask the cliche is he going to do the cliche uh s me this pen no no no is that a l is he sick of it well like yeah like like we we’re going to take it from to a totally different like place with it and yeah what well well say Inn so if somebody asks you sell me this pen what’s the right answerin sell me this pen what what’s
(21:41) the right answer there give me you have a pen I don’t have a pen supply and demand yeah exactly which I stole from the movie well well the the best answer is well how long have you been in the market for a pen yeah yeah right so like you go into Discovery so I Ed up with a question do you have a pen 100% I got this 100% like so many people are like oh yeah this Pen’s amazing blah blah you don’t even know cell yeah you don’t even know if the person wants the pen or not yeah yeah that’s super cool
(22:15) um I think I think the lesson out of Jordan B for was is at least to me is that if you just if you just keep it clean and play the long game yep you’ll be you’ll be like he like I’m I’m a guy I I own Steve Madden shoes I like the product and he could have taken that he could have been the company that took it public 100% Y and if he kept some stock like I don’t even know how many hundreds of millions he’d be worth 100% And and like you just look at you know in in terms of the even just
(22:44) the sales training side like he has so much to offer in terms of how you structure or pitch how tone and how you can influence people and all that kind of stuff like sale like you’re selling every day like what if you go on a date you’re selling if you talk with your kids you’re selling if you talk with your spouse you’re selling you talk with a prospect you’re selling uh so that goes such a long way he sold people on his script in his book oh yeah 100% 100% so like like there’s I’m I’m really
(23:12) excited uh not only have Robert coming but also Jordan I think they’re going to be fantastic and then the third speaker at this time we have’t announced but by the time this comes out so we’ve got uh Grant’s wife Elena Cardone coming and uh you know she she is bringing so much to the conference this year because you know most people don’t know this grant touched on it a little bit last year in the VIP room um but Elena was the person who pushed them to go big with everything and start raising money uh so
(23:40) we’re getting the the brains behind the operation so to speak and um she brings so much in terms of how couples can work together to build an Empire um and what and her roles in in the company and what she’s doing so really excited to have a really strong woman on stage and uh and yeah so she she is the third yeah I saw her speak at 10x conference back in Miami and she’s excellent and I think she has an important story to share yeah um like not every entrepreneur partner in the couple needs to be the person
(24:10) that’s out in front the face yeah right they’re like every you you agreed to we talk about loss but for example the gentleman who have the that that portfolio of Northern Ontario that’s failing is didn’t have anyone watching the business business closely to make sure everything was like running properly yeah yeah that and that’s so important and and quite honestly like the person behind the scenes is I I you could argue more important than the face right like you know even with our organization I’m the
(24:39) face but you know we you need to have really solid people in the background making sure that that person’s supported and they have everything they need right yeah like Batman has the Oracle like you know every everyone needs that person in the chair who spends most of their time in the chair to make sure everything’s okay yeah 100% so I think it’s going to be a really unique person perspective um that Elena is bring and you you can notice like each one of our Keynotes this year is has something different
(25:05) like a different spin or a different angle um because you know we want to make sure people are getting uh not just like the same message all the all the way through like everybody has something unique they can offer and depending on where you’re at in terms of scaling your portfolio or where you’re at um you can get something else uh from everybody so want to touch on your own your own investment Journey yeah this is I forget how many times you’ve been on the show now so anyone was U I don’t want to
(25:31) spend too much time on stuff you’ve already spoken about for example I believe the first episode we did together was I think like 2019 it was a while ago it was a while ago and the title was worst joint venture ever so folks wanted to see listen to that um yeah just just could you just give us like the 30 second version of yeah yeah so uh went through a a messy uh separation and basically lost uh everything and uh was the shittiest time of my life and uh started from complete scratch so you know we were kind of
(26:04) talking off air about um you know challenges when people have and how it actually like helps them perform better 100% so I kind of went through the ringer and uh a lot of really bad stuff happened but I survived out the other side and uh I would not be doing what I’m doing today if that hadn’t have happened had hadn’t have happened so in one way it was It was kind of good uh because it uh gave me a different perspective perspective on um on life and how things work and um quite I I tell everybody now they’re like oh that
(26:35) like aren’t you scared like running the conference and doing all this big stuff I’m like I really don’t give a anymore because if I survive that I can survive basically anything at this point right yeah and so to get some more context in history you had a portfolio of properties inario yeah yeah so so we did like lots of like we were doing like residential stuff um and then that kind of all blow up so listen to that podcast for all the the nitt nitty-gritty details um but yeah it was just a bad situation and uh that was uh liquidated
(27:08) and then uh basically started from square one so when you start from square one yeah I noticed you didn’t do anything else in Canada in terms of investing yeah yeah can you can you elaborate on the decision why not to do Ontario and I have all these Alberta Bulls tell me they why you to do Alberta yeah for sure so when when when that happened I already knew I wanted to do multif family and apartment buildings that that’s really where I was where they have those in Canada you know sth I don’t know if
(27:40) anyone told you they do but I I think and this is kind of what I found and you know when we’re raising cap like interest little bit of um a tangent here but when we’re raising money for a deal we found that an American investor will make a decision quicker and invest more money a Canadian so like we yeah we’ve got and even like even with the conference like we track all this stuff a Canadian will take usually two weeks longer from becoming a lead before they purchase than an American so like very
(28:14) different um outlooks and um you know personalities like obviously it’s a generality but um but that that’s that’s on on the whole it’s not the first I heard generally Americans are more entrepreneurial they more risks 100% including their government will take more risks as well 100% so you know when I started looking for people to help me and teach me the apartment building investing side um I went I went to the states um a couple reasons number one I I didn’t really know or I I didn’t know
(28:44) of any larger person um in Canada doing it at at a large scale obviously there are people doing it but I didn’t know at the time um and a lot of them are buying in the states anyway yeah exactly exactly and I remember I won’t mention but I I bought this like apartment building investing course uh from a very well-known organization and I got a binder in the mail so it was this huge thick binder and it it was like I think 1,500 bucks or something like that and I was like are you kidding me I just paid
(29:14) ,500 bucks for this binder I was like there’s got to be a better way so um I I found a couple uh people who were doing it at scale in the US and uh I never really looked back so all of the the kind of the training stuff the the side kind of scoop I I’ve got was always us focused and to me it makes a lot of sense you look at Canada versus the us we are a drop in the bucket just population size GDP like there is no comparison a and um you know so so if you’re looking to uh you know build a sizable portfolio and you know raise a
(29:51) lot of capital yeah you can do it in Canada but like we just want to go to the bigger market and it made a lot of sense and and just add to that making more sense like you mentioned GDP so then I’ll just go further like GDP per capita oh for sure meaning per person 100% And then you add to that each American generally costs less than a Canadian as well yes for example uh you probably like what is the minimum wage for Florida so for example minimum wage in Texas is 725 an hour very different from Ontario which is about $10 versus
(30:21) what is in Ontario 16 oh maybe even 16 and change I’m so yeah end of the day well yeah so a minimum wage a Canadian is in Ontario is 60% more costs more oh 100% like our labor is more expensive our we can argue that our government policy makes the cost of living more expensive like we can that’s a totally different episode but yeah 100% and other add to that like I think most people are familiar with um where immigration comes from in in the States and it’s generally it’s generally lower end yeah and while people I’m not going
(30:53) to get political yeah let’s just straight talk straight economics an economy Ben benefits from lower end like so for example to Canada our our our our skill level is quite ubiquitous it’s quite even we don’t have that lower end y but we need we need it though we need it right I don’t need someone with a University degree to make my burger yeah right I you know someone who has that who’s worth 725 an hour should have that job yep right and equivalent would be $10 an hour in here someone should have
(31:25) that job and then the economy all moves better yeah 100% % and the Americans are full have plenty of that oh 100% And and then you just like this is the thing that really like when you when you uh when you’re looking for a visual pull up a list of all the Canadian major metros with over a million people yeah it’s a short list yeah you especially if it’s two yeah 100% there only three there’s only three cities which is insane then you look at uh pull up the US list major metros over a million people insane and
(31:56) and and that just shows you how small we really are um so and you look at and it’s not just like in real estate in business like as soon as you can and if a Canadian company can enter the US market the potential is so much greater let’s just give a quick example we were talking before we’re recording yeah so I want a question to The Listener to our 17 listeners which city do you think is bigger in terms of like Greater Vancouver Greater Vancouver I’m going to talk to the camera okay all right which
(32:23) city is bigger Greater Vancouver or greater Tampa Bay Florida put it in the chat before we give the answer put it in put it in so for the listener I want you to like think about it like so which one do you think is bigger but the fact that I’m asking I’m pretty sure I’m going to guess which one’s bigger yeah so what remind me what was Tampa what was Tampa again Tampa is what 2.
(32:43) 3 million I think oh no 3.2 I think you said 3.2 before recording before recording and then I CU I think I messed you up cuz uh cuz Vancouver is about 2.7 that that’s right yeah and then uh I I me uh and then DFW was 7.6 Lord is that big yeah 7.6 for the for the MSA yeah so that that’s Dallas Fort Worth and Arlington that’s see that’s big than great Toronto area oh huge right so like that’s that’s just like that’s just one city yeah our economic capital yeah of Canada is smaller than Dallas Fort Worth Texas
(33:16) yeah and and you look at um and then you want compare GDP it’s not but you look at just the State of Florida right so it’s it’s insane so you know with us and obviously you know we have big aspirations right and and so um for for all of those reasons it makes more sense for us to help Canadians move their Capital to the States because there’s a a large interest in that and then if your priority is to maximize your return reduce your risk it makes a lot of sense oh for sure like like we’re
(33:47) talking about real estate yeah why not invest in the largest capitalistic Juggernaut there is in the world the USA right yeah and then like you I’ve talked about this many times like Texas is they have like I forget like they’re bringing like 6,000 jobs on just in record ship manufacturing might be eight and just and so the amount of job growth just in Texas alone is just ridiculous yeah yeah and and and you look at those types of States you know people are kind of fleeing the coast uh because of you know
(34:14) policy and affordability so if you have a family and natural disasters yeah and and natural disasters yeah so you know like like you’re looking for you’re looking for work you’re looking for an affordable place to raise a family you’re looking for you know a good community um yeah so like there’s so much opportunity um in those States and you know we look at Canada then we can talk about you know the whole rent control thing so in Ontario BC like you know you’ve got provincewide rent control in
(34:43) the states you’ve got rent control in California but rent control in California isn’t as onerous as rent control in Ontario really every everybody complains about rent control in California yeah well they don’t know that in Ontario it’s it’s even worse right so um you know just on the the what is rank control in California um so rank control in California um I don’t want to misspeak here but I’m pretty sure it is tied uh to some type of index um you know I’m going to say something wrong here because we don’t
(35:18) even look in California but but in terms of like the comparison when I went through step by step it’s like oh um like Ontario um is a lot more onerous in terms of like the restrictions and everything so I don’t want to misspeak but that’s okay yeah for sure cuz rent control is also a broad term just like rental licensing it’s it’s it’s every every municipality does it differently for example there’s one state in this in the US I don’t remember the name of it but the rent control is you may not go
(35:43) over 10% rent increase exactly which is okay that’s pretty good yeah yeah so and then then we can look at the history of rent control right so we have to go all the way back to World War I when rank control was instituted on a massive scale but that was because we were re bu Europe was rebuilding from World War I like it was destroyed we have rent control government steps in and government stepped in in terms of many different uh produce Industries and everything too um but that’s really where it started um and then it’s a good
(36:13) talking point with in the elections it sounds good but if you look like there’s a number of studies that show that I’ve looked at it a a market without rent control rents are actually more affordable and you have a better product uh because you have more incentive for people to to reinvest so yeah we can go on that tangent forever uh I I want to go more tactical cuz you’re actually living it CU your your properties in the states I imagine because you’re talking about Sun Belt yeah for sure Sun Bel is
(36:40) from what I’m reading on Twitter uh shout out Jordan Jordan Parson sorry uh shout out Jason Parson’s on Twitter who who’s in the space his tweets are excellent there there wonderful reports he puts out there from what I’m reading is that there’s because um just like the pendulum swings when when the Sun Belt stat got really hot a lot of Builder developers were building building these properties whatnot and so they right now they’re at a point of overbuilt yep and so rents have come down and there’s no rent control but I
(37:10) just said rents have come down yeah the the market takes care of itself like like that and and yeah so depending you know you look at places like Orlando you’ve got over supply for sure um but you know the market that’s the E and flow yeah um and and that’s what creates opportunities um no matter which state of the cycle you’re in like there’s opportunity as long as you’re in it for the long the long term right yeah so can you share What markets are focused in and why yeah so we’re we are really hot
(37:38) on Tampa right like we are trying so hard um to to get into Tampa uh right now uh we feel there’s a lot of Runway left we like the markets um we we like we like the area we like what’s going on in terms of the economy we we like the policy in place um so we are fighting tooth and nail um to get to Tampa so we we should have a uh an announcement to make pretty soon on that but like we are working so hard uh to get to get in there imagine you’re not the only ones like Tampa Tampa’s been growing like
(38:10) crazy oh for for sure yeah there there is a a fair amount of competition for sure like it’s like any market right any any Market that has uh a lot of Runway left like you’re going to be competing there uh so Paul our Acquisitions director he’s been working really hard um and you know he’s he looks at like every deal there is um also like we we we’ll look at at a number of other different markets in around Florida um but yeah we we are trying so hard to get our first one in Tampa what what kind of property are you
(38:41) looking for in Tampa yeah so our buy box is uh to Value ad Class B type of asset um and we’ll look at anything from 100 units to about 300 units uh give or take um and uh and that that’s a range where we feel really confident in so we’re able to do the there uh that that’s within our skill sets and uh we’re looking for that traditional value ad so we’re we can come in uh depending on some of the deals uh that we’ve been looking at um it’s either an operational play or there’s a fiscal Improvement
(39:11) side oftentimes the combination of uh of both but we’re we’re looking for a place where we can acquire the asset you know add some give something back to the to the community uh make it better um and and improve it for everybody so uh not only for us and our investors but also the people living there right we’re giving them safer better housing can you elaborate what a b-class property is oh for for sure so when we’re talking about uh commercial real estate and in multif family specifically you’ll hear all
(39:41) sorts of um you know ways of describing things but generally speaking you’ll have uh class ablea which is going to be the best location in a major Metropolitan uh City Center like the best location there ever is that that’s the class ablea brand new asset then you have a class A asset generally you’re going to be within 10 years old uh topof thee line amenities uh you know everything’s like topnotch like it’s a great location great building top quality you can probably attract doctors and lawyers as for sure yeah yeah you
(40:14) that that’s that’s you’re going to have your higher income people there that’s where depending on the market you’ll have like your granite countertops like really nice stuff Class B is going to be you know let’s call it you know that 20 year old year old type of um type of range uh it used to be a Class A but now it’s just older uh you won’t have the same modern amenities because it’s you know 20 years removed uh but still solid property good location it’s just a little bit older you have a little bit
(40:40) of deferred maintenance there that you have to go in and that’s that’s really what we’re looking for that good quality asset where we can come in and proof it bring it up maybe it’s got the last time the kitchens were done was you know 2005 so we can come in and uh and improve it do the kitchen Rena you know change Landscaping bring it back uh to life that type of thing then you have class C and class D Class C you have more deferred maintenance like you can tell when you see it it’s like ah it needs
(41:08) some love uh amenities are very few because it is older um and then class D like you’ve got it’s it’s really rough at that point yeah so so those are the different classes so we really like to live in that class b space you know good quality assets uh stable assets we’re not acquiring a place where there’s like 20% occupancy where you have to go in with a bulletproof vest or anything like that but uh but yeah good quality assets and good locations something went very wrong if you’re only at 20% vacas something is
(41:41) very wrong like City housing were or like sometimes you have a flyers rip through like a bunch of buildings and stuff and roof is leaked or massive infestation of some sort yeah and and those are heavy lifts and that that’s that’s not Power by box at all like there’s people who will take those on and uh that’s all the power to them but that’s not kind of what we’re box is the corporate lingo for this these are our field posts buy within it yeah for sure because when we’re uh meeting with um a
(42:13) new potential relationship in terms of on the on the brokerage side or a lender they usually ask hey what’s your buy box basically they’re saying hey what are you looking for and to talk like a pro you need to know the lingo yeah yeah you kind of throw the lingo around but yeah it’s just uh looking for that 100 to 300 unit range Class B traditional value ad that that’s really our uh bread and butter any amenities you’re adding and and ke you share what they are would be yeah yeah right so um like adding a gym
(42:41) perfect right because especially when you have markets where you have a younger demographic moving in you know people work out now like like you need a gym and that one treadmill in the corner doesn’t cut it so uh at a gym uh you can uh replace you know tennis courts are you know kind of P so take out the tennis court put pickle ball yeah pickle ball yeah pickle ball uh I’m just joking is that really a thing well actually there have been some properties um where they have uh they’ve put the pickle ball
(43:13) on the tennis court so nobody plays tennis anymore so that that is true um and then you know you can take out those tennis courts uh you can add a playround if you have lots of families on site or you can add a barbecue pit you know I love the barbecue like I love barbecue so do you I I see all the briskets you do so well especially if you’re in Texas or Florida florians love barbecue too they do I so I’m I’m heading to Miami on Thursday and we’re hitting up a new barbecue place for the entire trip so um
(43:42) yeah so B basically you want to look at your tenant profile and really understand hey like what do these people need like what’s going to attract them and if it’s not a tennis court well what types of people are living here are they f are their families well yeah well throw in a splash pad throw in thrown a playground you know make it a community people want to live um that type of stuff yeah yeah I like the barbecue I enjoy it and also all my guests love it oh for sure Barbecue Pit so you know let’s say you know you have a younger
(44:12) demographic um you know like in their late 20s and 30s you you got some families but throw in a couple barbecue pits make it really nice add some pergolas some seating around the family can come down you can cook on the grill you can have a little party it’s great for Community appreciation nights so you can bring in a couple chefs they’ll cook food for all the residents there like you can make it good right yeah uh is there more to a buy box like is there a price per unit is there a cap rate you want to get in at then what you want to
(44:44) uh your arv all those sort of things yeah good good question so we don’t really look at cap rate um that’s not really we’re going to offend some people well yeah all about the C oh man so and generally so all the most I’ve been very fortunate in that I’ve been able to build relationships with some very successful uh multif family investors are very very successful and I don’t ever hear them talk about cap rate so there must be something to that uh they’re looking for hey how can I create
(45:16) value in the deal that’s what they’re focus on and what can I control because we can’t control interest rates we can’t control government policy but what you can control is what you buy the property at what Renovations you do when you do the renovations like your business plan your marketing you can control that stuff so that’s what they focus on so you know price per unit again like that’s so subjective because you know price per unit you could have uh you know a B+ versus a B minus asset the price per
(45:47) unit is going to be different so you have to look at a number of different metrics right you have to look at your irr for the deal internal rate of return uh you have to look at your cash on cash cuz that’s going to give your you your annual uh return and then you want to look at your Equity multiples like we attack it from price per square foot we look at you attack it from all sorts of different ways because each metric will give you a tell you the same story in a different way yes um so yeah we we don’t
(46:14) look at cap like need SLE data points to make a decision 100% it’s not like oh yeah we we only buy at a six cap well but why though like like what what does that mean um so yeah so B basically what we’re looking for is we’re looking for a good quality asset and a good location maybe there’s been some mismanagement maybe it’s part of a greater portfolio and it wasn’t getting the love and attention it needed you know maybe uh maybe we see an angle where we can improve the marketing maybe we see a
(46:44) trend in the area where you know that asset hasn’t caught on to it so hey if we make these changes we can attract this huge demographic that’s now moving in so it’s really like any business like what’s your SWAT analysis like what can offer um and what what changes can you make in the deal that other people aren’t necessarily seeing all right slat strengths weaknesses opportunities uh threats yeah 100% right so and you know if you’re acquiring an asset and across the street is a brand new you know 450
(47:14) unit class doublea asset and you’re you’re looking to take your B+ asset to an a you know that’s going to be a huge threat so you probably don’t want to do that but if you have a class you know a Class A ass across the street and you’re in that class B totally different markets and you’ll actually get business from the class a asset when you when they price people out they’ll come over so you have to you have to look at everything together so it’s hard to say yeah you know I only buy at a eight cap
(47:43) well like that’s not a I would argue that’s not a sophisticated way of looking at real estate like you’re pigeon holding yourself on one metric and and you’re missing out on what’s really going on right yeah and we talk about loss we talk about lost before recording during this as well like for example the folks who are you know losing their shirts up in Northern Ontario like I don’t think they probably understood their irr nor nor their internal rate of return nor their cash on cash yeah because if you’re sitting
(48:12) vacant there ain’t no cash on cash no there a negative cash on cash yeah and like even irr so like a lot of investors um on the lp side so you know passive investors you know one of the first questions they’ll ask is hey like what’s the irr what’s the Equity multiple in the deal but like irr tells such an important story because it tells you the time value of money for like you know how the money’s locked into the deal right so you know I I always use examples where hey like here’s deal a
(48:40) you get x amount per year or he’s here’s deal B you get a slightly larger Chunk in year two and then you make a little bit less money while the irr is actually higher because you have more Capital being returned sooner and then there’s opportunity costs you can invest in different opportunities and all that kind of stuff so um yeah so whenever we’re speaking with people it you have to tell the whole story so you’re looking at many many different things I hope all investors appreciate irr
(49:05) internal rate return is incredibly important when whenever you’re going to whenever your investment plan has includes a refinance 100% some return of capital 100% because like a straight return on investment calculation do you are you doing the return on calculation based on today or after refinance yeah well and and that’s that’s the thing too so what we found is cuz as markets get tighter um like our rule of thumb is we never never never promise a refinance in a deal ever because it may or may not
(49:36) happen we just saw this the past couple years so if your deal uh like lives or dies based on a refinance that’s not a good deal right because that refi may not be happening so when you’re looking at your irr you want to look at irr without the refi and then you have your best case scenario hey if we do refinancing your three this is what your irr will look at at that point uh but you never never never want to bank on having the refi refinance cuz it it may not happen MH yeah so we’re talking a lot about us investing right now and you
(50:08) actually have data to back that up like for example before we’re recording you mentioned uh 70% of your audience wants to hear about us investing oh yeah yeah with the conference huge huge appetite huge appetite and and this is majority of Canadians you’re surveying as well yeah yeah yeah yeah that’s how Canadian audience so I’ll apologize I know that I know this is a Canadian real estate show but a like 90% of my audience wants to hear about us investing and you have 70% want to hear about us investing huge
(50:36) topic so apologies we’re not talking about Canada right now we’re talking about Canadians investing in the US yeah and you look at you know content we produce and everything every time we talk about us investing for Canadians it pops every single time so there is a huge demand for for that knowledge and quite honestly I I think it’s a number of things number one obviously the lies and all that kind of stuff but also the um there’s not a lot if you’re a Canadian looking to invest in the US
(51:04) there’s not a a lot of good material there to help you because 99.9% of stuff is made for a US audience so if you’re Canadian it NE it doesn’t necessarily line up with what’s best for a Canadian investing in the US so if we’re able to produce top quality content like you know you do a lot of stuff like we pump out a lot of stuff too if we’re able to deliver quality content geared towards Canadians I I think that’s a a missing link or a missing piece right now in the marketplace and I we mentioned GDP
(51:36) earlier the GDP of Texas is actually very close to the country of Canada oh yeah pretty much and that’s one state that’s is one state the population of Texas is around 30 million yeah and the population of Canada is almost 40 million it’s over 40 million now but Bas the GDP numbers are a little bit older so I’m trying to match up population yeah so again the the Americans have like 25% less population than us in the same GDP state of Texas alone yeah it’s like it’s insane like the research all
(52:07) points to One Direction really oh 100% 100% the only thing the only biggest benefit we have is the biggest benefit to a Canadian investor especially Ontario or BC is that we can’t build for whatever reason we can’t build fast enough so then a for that restricts Supply artificially restricts Supply hence we have uh you have a demine supply balance which drives prices up for for sure and you know there we can go even deeper in that but like it’s not like the the housing crisis isn’t just reserved for Canadians like there’s a
(52:39) housing CR like you look in the states like there are markets where it’s hard to get a home like it is a challenge it’s a North American challenge right and Grant’s Grant’s been Grant in his uh his 2024 review was like he said like we’re really short on building oh huge and this year’s and this year is just just we have we have Americans have similar problems that we do because rates are high they’re not investing they’re not building Y and this will C this will bite them on the butt oh for
(53:03) for sure like we have such a housing deficit right now in ter in terms of like starts that have to happen and and this is a problem that’s going to be around for the next hundred years like it’s not going away it’s not going to get better either because the Americans have trouble Staffing builds as well no different than us yep yeah we need trades we need qual we need competent people who who are trained 100% yeah but the Americans have an advantage in recruiting trades over us well they do 100% 100% um and like that’s and we can
(53:32) talk about like how um how governments are angling in terms of who they want to attract and everything but uh yeah for sure so I want to bring it I know you’re you know you’re big and fancy buying 100 300 units at a time I want to we have a lot of young listeners like who are like you know under even under age of 30 nice so say you were 25 years old what would what would be the first property you buy oh man yeah so if I could go in a time machine yeah I would erase the first like 10 years of me in real estate um
(54:02) and so if I could go back and here’s Seth like reading books trying to learn about real estate investing I would slap myself a little bit and say don’t worry about a house buy an apartment building like first first deal and like this is a little bit like controversial but a lot of people say oh well I want to start with something small because it’s safer I argue the bigger deal is safer than the smaller one so hear me out if if you’re listening right now and you’re like oh that’s crazy give me a minute to
(54:30) explain so what a lot of people do they’ll buy their first investment property maybe it’s a single family home a duplex uh they have to qualify for the loan on their own right because it’s based on their income the bank doesn’t really care about the income produced by the property the cash flow is going to be so tight number one it doesn’t give you much wiggle room but also um like you’re not able to afford Real Property Management because you have to self-manage because the property doesn’t
(54:54) produce enough uh cash flow and there’s a good chance you’re screwed up exactly right so so right off and then if like a duplex one tenant moves out there goes 50% of your Revenue yeah so for all those reasons like yeah sure the purchase price is smaller but you’re doing a loan you have no idea what you’re doing you’re going to mess up and then you have no like wiggle room like you’re screwed if you make a mistake like I I remember with one duplex you know we had an $88,000 repair bill
(55:20) because of the drain out to the Sewer the a tree route like busted through it 8 Grand that was like three years of cash flow on this property gone yeah right now you go on an apartment building it doesn’t have to be huge maybe it’s a 25 unit building much stronger cash flow different types of debt you can get on there right you’re able to have Professional Management because there’s enough money to pay the person so even if you’re new you have a manager who’s probably managed 10,000 units they can
(55:47) guide you and help you out and plus because the deal is bigger there’s probably enough meet on bone to partner with somebody who’s done at least a couple deals and you guys can do the deal together and everybody’s better off it’s more stable you have you have better cash like all those reasons so for now like if I could go back in time I would push myself hey get educated about this world of real estate like understand how it works and then go do a big deal right off the bat like 100% What markets are
(56:17) we looking at for this example hypothetical 25 unit building it doesn’t matter like the the markets irrelevant um you know I have friends who are crushing it and California I have friends crushing it in you know the Tennessee like the Market’s not important it’s more the market will impact your business plan and and what you place important like what’s important to you if you’re a cash flow person and like you don’t really care too much about appreciation you can go in into you know some Midwestern Market
(56:49) well the mid Midwest is is pretty hot but like you have to find out what’s important to you what your goals are for investing and then you want to find a market that that kind of fits that right um I think most people are more interested in cash flow these days of rates being so high for sure well cashow probably not so California is likely off the table well cash flow is the lifeblood of a real estate deal you need the cash flow um so but you want to look at a market that can support itself that is diverse in terms of its economy you
(57:16) don’t you just don’t want an agricultural based economy there there’s not diversity there or you just don’t want oil and gas like you need a mix uh you need a a growth in uh in terms of the population in the right demographic so if it’s the over 55 age group maybe you might want to think twice unless you’re in senior living right but you want to have those young workers who are in the prime working years of Their Lives who are going to have the families like who are going to contribute to the
(57:43) economy like they’re moving there to work so you want to have good government policy in terms of uh job creation and how they treat business uh preferably you have a city or an area that is actively trying to recruit businesses to move uh you get lots of incentives like that that’s the type of stuff you’re looking for um because if if you’re talking with an investor and saying hey Mr Mrs investor you know I have this deal it’s in this market this is what it looks like but oh like the the market we
(58:13) losing 5% of people every year like bad Market yeah like like you want to have some Sizzle in there oh yeah like our Market is has been in the top 10 for growth in the entire country for the past 5 years state of Texas 100% right like like like you want a growing economy and that’s what’s going to push um push your deal um give you that extra like push uh behind your sales so that was a long very long answer but I think most people can appreciate like where would a young family or young person want to want to move to yeah 100% right
(58:45) yeah and then generally those they want opportunity they want to pay less tax they want lifestyle yep so generally that means includes good weather great nature good schools those are the yeah 100% right so it’s not that hard no there’s honestly like there’s there’s like 20 Fant there’s at least 20 fantastic cities we would we’d both invest in oh for for sure like and like I I’m in that demographic now well I’m almost 40 almost there but it’s like where would I want to live like with my
(59:14) family it makes it really easy I wouldn’t want to move to California no no definitely not but but like you just ask yourself so if you’re 25 like do the market research and and the the thing I I’ve kind of learned the longer I I’m involved in this is like it’s not rocket science you you just have to be that much better than everybody else so a lot of people getting involved in real estate they’re like oh well you know like I’ll just kind of learn no like like really understand what how money is
(59:43) made in real estate understand the markets like what drives real estate what are the top investors what are they doing how do they look at properties if you’re 25 and you can nail that like you have such an advantage over over the 80% it’s that 8020 per principle all those poor people buying preconstruction condos like you have such an advantage and then if you’re able to have um you know a a an investor conversation with somebody and you’re able to follow that and deliver value to that person and and
(1:00:14) present things in the right way and have and and demonstrate your confidence and your knowledge it goes such a long way that’s oh so you mentioned like if when you find the pro the deal you want in Tampa for example yeah you’re going to raise the capital can you elaborate on what is a right mix of uh cash versus U mortgage oh yeah yeah so um it’s going to depend on the deal itself because there’s there’s wiggle room there but generally speaking we’re looking at you know a 7030 a 6040 uh so what I mean by that is we
(1:00:51) have a 60% debt 40% Equity or 70% debt 30% Equity um at no time do we like you hear people online talking talking about oh yeah I can get a 90% LTV through whatever program well yeah but that doesn’t really insulate yourself uh so you have to protect the deal and you need that Equity buffer um let’s just elaborate on that because some folks missed the missed that point with the the poor folks with the all the vacant properties in Northern Ontario and it’s not just them there’s other there’s
(1:01:24) other issues out there uh but I just want to elaborate on those deals specifically because those are 100% loan to value yeah there’s a for First Mortgage I don’t know what the rates are I’m going to guess six yep which is still expensive the seconds are like eight which bring you up to I don’t even know I think that brings up doesn’t matter and then there’s promissary notes that are paying like 177% y right so there’s no equity in these deals so just elaborate how Equity gives you buffer is
(1:01:52) you don’t you’re not paying any interest on the equity piece exactly which keeps payments lower yeah 100% And depending on depending on how you structure the deal like you’ll have returns that get paid own and everything but it’s a split on the profits of the deal and and really at the end of the day people get themselves in trouble with lenders because the lender wants to make sure that their money comes back to them so and that’s why lenders look for a debt service coverage ratio of like one and a
(1:02:16) quarter and what I mean by debt service coverage ratio is hey like how much Surplus does the property produce in excess of your debt service requirements so mortgage payments so A lender is going to want about a buck and a quarter one and a qu so that way on the day of acquisition that they yeah wow so so that that way um like they have that that wiggle room so in case like something happens with the property occupancy drop something like that they know they have a buffer because if you’re going in at let’s say 90% debt
(1:02:49) that buffer is so small so all it takes is a a dip in the market now the lender scared and now you start uh the ugly legal stuff that nobody wants uh so you need to have that uh that buffer there cuz at the end of the day let’s say worst case scenario you’re planning to to exit in year five and the market is the worst Market we have ever seen you have Equity built up in the deal like you can you can weather that storm um the last thing you want is that gun to your head which is where a lot of operators are um or got into last year
(1:03:21) where you have short-term debt expensive debt Market shifted now they can’t get out of that into conventional and you’re stuck it’s either you sell out a loss or you’re like taken to the cleaners so um yeah so so you want to make sure you’re you’re being safe with it and again no one went bankrupt for having too much Equity no no for for sure right and and so that that should be a red flag if you’re looking at an investment opportunity and they’re telling you oh yeah we’ve got 90% debt yeah maybe the
(1:03:48) numbers look good on a spreadsheet but in real life that’s not really how it works so this is likely the challenge both of you and I are running into as well because there’s a lot of marketing out there courses that are like heavy heavy debt oh yeah investment strategies so like I get people asking me like because my I’m like my plan is to put like 30 30 4 to 30 to 45% down on properties in cash yeah and people are saying why so high like what do you mean High I’m trying to at least Break Even
(1:04:14) yeah how low can you go yeah exactly and and it’s you know you always have to assume like what’s the worst case scenario and this is where Paul on our team like he’s really good at this kind of stuff like we we have our model and we try and break it so we have our underrating model hey this is our forecast for the next five years for the for the asset well now like how can we break this and make the deal fall apart and then we want to shore up those weaknesses and so yeah going in with high debt is really good if everything’s
(1:04:41) great but if if everything’s going to be perfect right like but like nothing ever like uh goes perfectly so you have to expect some choppy waterers in there and what happens like right yeah yeah yeah be a little weather storms yeah and everyone who had the storms usually have heavy heavy Equity or massive cash reserves or on the small scale people still have their day jobs and their six figure jobs so money’s still coming in yep 100% all right uh Seth you’ve been so generous with your time where can people
(1:05:12) learn more about uh multif Family Conference yeah the best way about the conference is just go to multifamily sen new speakers and uh yeah it’s May 24th to 26th in Toronto so it’s coming up pretty soon fantastic I can’t wait to be there it’s like a reunion it is yeah yeah it’s unfortunately like you’re just mad bit everyone wants your time that day but uh for the for the Schmo like me just it’s just nice to see all my friends there well you’re a celebrity so no no hardly not like not like the
(1:05:49) folks on your stage and uh your podcast is restarting yeah yeah so we’ve uh we ran for like 450 episodes before yeah yeah it it ran for a long time and then it just yeah so we totally knew uh we’re taking a different angle on it and it’s called the cool podcast so because you know one of the things before is we were we were just real estate and I I didn’t think it uh I didn’t feel it gave me the leeway to talk with some really interesting people who I wanted to speak with so now we’re uh talking with people
(1:06:21) who are pushing boundaries in their niches and in their spaces real estate but also you know we just interviewed um a a really cool musical artist um about kind of how the music industry works and how she’s uh making Headway there so like that’s really cool stuff to me so um it’s more General business and that aligns well with all the stuff we’re doing on on my end too yeah it was in the news that Rod Stewart estimate no one knows like these are private deals but Rod Stewart sold his uh his his song
(1:06:52) catalog for 100 million it’s it’s insane and actually we were just golfing at the golf simulator with with a guy who who on his shelf he has like music rights like it’s a fund and I think that’s so cool um and and so yeah we can talk with people about that and uh I just want to speak with people who are doing really cool in in their space yeah who are making money like yeah making money is to me to me nothing nothing more fun than making money yeah Seth thanks very much for doing this oh I always want to
(1:07:23) give my guest a final chance a final like the final a word any final thoughts like we’re like we’re recording this February 20th y a lot of turmoil right now actually inflation I don’t know if you probably I don’t know if you caught this morning um Canada’s inflation rate came in well below expected 2.
(1:07:40) 9 oh no I did not see that it it just broke this morning from Scotts can so uh yeah things might be picking up real soon yeah well we um like it was kind of interesting so uh like Grant and Alex last year at the conference uh both of them had really big targets for the next you know 12 18 months like Grant wants to double his portfolio and I I think you know the opportunity presenting itself now uh I think we’re setting ourselves up if you take some action now you know two three years from now I I think you’re in a really really good
(1:08:12) spot yeah yeah I know you didn’t have this dragon or sorry shark Barbara corkran was saying that the American Market’s going to bounce back as soon as we have Cuts yeah which are expected for pretty soon that’s actually weird because we Canada cut first sorry Canada increase rates first yeah and like everyone was expecting the Canada to cut before the Americans but right now it’s looking like the Americans might cut before we yeah and then depending on election results too like uh you know depending on who gets in like you can I
(1:08:37) I would expect some pretty aggressive policy if uh if the Donald gets in there to kick poli’s already aggressive well yeah but like it’s the Donald like he’ll go in and one more can you do and yeah and if because long-term forecast already for the I promise you the last words I don’t know if you what your research is showing me but my research for the Canadian dollar is it is expected to perform poorly against the US dollar yeah yeah and that’s you know over the long term yeah yeah and like all the
(1:09:10) like we talk with people who are way smarter than like I’m like down here we’ like we talk with really smart people and they they concur with exactly what you’re saying cuz like so how Canada benefits from the US growth is you know we build our pipelines we we get our and we mine our minerals yeah like we’re still the the heers of the land and the Sea like we’re not we’re not investing we’re not building anything no we’re just harvesting what we got in the ground I I want my money in USD 100% yeah yeah yeah
(1:09:41) cuz like yeah I promise you the last word but it’s all good but like I was playing with the we were playing with Google’s uh AI tool um I forget the name of it it used to be called Bard it’s they renamed it like genesis or something like that whatever but it’s like wow this is pretty impressive and I was already like over the top of chat gbt and like yeah and then and then open AI came out with the stop me if you heard this before open AI just released that that they can now do text to video
(1:10:08) did you see video yes I saw that yeah they had um they had two pirate ship sailing in a coffee cup and um yeah yeah that that’s really cool so it was absolutely insane did you see the one where like the text promp was like a drone video of gold brush California no I didn’t see that that one no it was absolutely insane yeah it was like your drone video going over the river and on each sides of the river is like housing and people dressed in that era yeah like and all in the prompt was just a few words yeah it’s like it’s incredible
(1:10:42) what’s going to happen over the next 10 years like I don’t think we’ll be able to recognize like marketing and creation of Assets in 10 years from now it’s going to be insane yeah and so where I’m going with this is like I’m not smart enough to build anything with AI or an AI tool or nothing like that yeah but what I do know is I saw an article that Sam Alman himself the president CEO whatever leader of CH open AI he’s trying to raise 10 billion to build microchip manufacturing because he still
(1:11:07) sees there’s going to be a shortage yeah we need our own microchips even though the Americans going to be building microchips like crazy yeah so I’m not smart enough to do like get make money out the microchip stuff and the AI stuff and all this sort of stuff but I’m smart enough to buy a house near one of these manufacturing facilities right so that you know these really smart people working at these places can rent from me or buy my house yeah exactly y I’m not going to over complicate anything yeah just keep it simple and
(1:11:35) collect the rent checks that’s all you have to do forget about it yeah I don’t to overthink this s thanks so much for doing this thanks for coming in thanks for having me and that that H uh looks really good so oh yeah for the folks who are listening Seth brought in swag so you know to encourage people to bring more wear swag I’m wearing swag while on the show thank you s sweet thanks everyone thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to
(1:12:01) use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.com below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor trining doca youout thanks again for watching see you in the next video

** Transcript Auto-Generated**
(00:00) hello and welcome to the truth about real estate investing show my name is Erwin Szeto and I want to say Happy Belated International women’s day oddly enough uh International history of women’s month is celebrated in October in Canada versus uh the west of Russell World celebrates it in March so happy in happy women’s History Month to everyone not from Canada anyways I want to shout out all the lady investors especially the moms and even more so the single moms out there uh I believe the women of real estate are incredibly awesome I
(00:33) happen to be married to one and I wrote a poem on the subject uh from from my own experience of working with uh I’ve shared before about half my clients are women including the married couple uh half the time the wife is the driving partner of that relationship so for the first time ever on the truth about real estate investing show I’m going to read you a poem in the Realms of brick and motor where dreams are built and sold a story of empowerment encourage dozen fold on International women’s day we raise our
(01:03) voice in cheer the women leading boldly year after Valiant year among my clients women shine their Vision clear and bright during Investments forward driving Investments forward with insight and foresight husbands too in Whispers confess their admiration pure their growth of our net worth they say her genius did ensure to the wives and pillars strong upon which Futures stand with who with a Keen Eye for Value navigate the land their wisdom in selecting the right property to seize shapes the fabric of success with
(01:35) remarkable ease and let us not forget the Single mother’s might juggling life’s many roles through through day and night the resilience of astounding a beacon so profound in them a well of strength and love abundantly is found so here’s to you the women in real estate who Thrive your influence is boundless helping dreams to come alive on this International women’s day your Praises we sing loud for the dance of progress you stand both strong and proud your freedom with these heroes in transactions large and small reveals the
(02:07) true essence of empowerment of all to Every Woman navigating the path of wealth and home may you always be celebrated and never feel alone again shout out to to uh all the women in real estate investing on a personal note U my family and I including my Superstar wife Cherry we spent the week of March break up north skiing sort of uh Cherry’s got a banged at me so she worked in the Chalet pretty much the whole time while I skied half the time as the ski the ski hill it’s a it’s huntsville’s uh Hidden Valley
(02:39) Highland ski uh so it’s bit on the smaller side but it’s perfect for kids I want to shout out to uh again Hidden Valley Highland ski camp for entertaining my kids and for training them I can’t recommend it enough for any parent who wants their kids to to learn how to ski so we’ve been doing this about at least three years now where our kids spend both the Christmas holiday break and March break in ski Camp uh we do live in Canada hence I believe the life skills for a Canadian include swimming skating and skiing intermediate
(03:12) levels are just fine I just want my level kids to be safe when they’re playing with their friends uh our family friends uh their teenagers actually had their ski school day cut short as too many kids were getting concussions from crashing into fences or trees so that’s not for what I want for my kids hence uh I’m planning ahead speaking of planning I have enough clients with adult kids where their kids want nothing to do with the family business or the real estate portfolio versus what kid would say no
(03:42) to an inheritance of stock like apple or or Microsoft my point is to increase the probability of my kids wanting to learn to and be investors the need something a bit more easy a bit more passive than what Real Estate Investors are going through uh locally to manage their own port uh take Airbnb for example earlier this week cherry and I had our worst experience with the property that we booked through Airbnb uh when we showed up this is this is for our March break so when we showed up the heat was off so we when we arrived the house was
(04:14) freezing and the thermostats weren’t doing anything not a good first impression uh there was no welcome email with instructions on how to operate the house no manuals inside the house either uh so we called and I spoke to the owner’s father and he was able to walk me through how to turn the propane furnace on that was outside the house so that was the first for me I’ve never seen a furnace outside the house before but even with the heat on uh the radiators on the main floor and in the main floor bedrooms they weren’t heating
(04:41) up and that’s where I was sleeping so that’s concerning to me uh there was also a fluorescent light in the basement that was a ceiling light that was loose and it was drooping down from its Mount I’ve never seen that before uh half the closet doors were off the railings the wood fireplace hadn’t been cleaned uh the owner and the cleaner who came by to clean it up after we reported it they didn’t know how to operate it or how how to open the flu so we had no plan B either then at bedtime as we were
(05:09) getting ready to go to bed uh we actually looked at the beds and we found two bed pillows that uh the kind that you’re supposed to you know rest your head on when you’re sleeping they smell like bad body odor pretty gross some of the best then so then we looked closer pulled back some of the sheets and then we found we pulled back some blankets and we found some bed sheets that had old blood stains on them uh my pillow was wet to the touch uh so I just tossed it on the floor I wasn’t so lucky even when I went to go
(05:41) find a clean pillowcase as the next one I found was yellow U this is hardly a good experience the neglect of the short-term rental is as bad as I’ve seen the worst in my experience and uh how are how is anyone expected to relax with these sort of problems going on uh the owner did come by to check on us in the afternoon uh in her standards for operating a short-term rental with prices at $500 per night are well below my own uh and who do I criticize apparently she’s making the money hangover our fist um anyways we decided
(06:12) to cut our losses short we didn’t feel comfortable uh once Airbnb agreed agreed to cancel the remainder of our reservation uh but unfortunately we only got 30% reduction on that terrible terrible first day uh that that was the decision of the owner I don’t believe that was airbnb’s call to make anyways we pack up the house and uh mind you when I when we showed up at the house when we first checked in when the heat was off it was only 15 degrees inside according to the thermostats which seemed accurate and when we when we
(06:42) arrived to pack up the house it was 26 degrees it was only 24 only 24 hours that passed the owner had warned us there was no way to control the temperature inside the house and I’d gone through and and set the temperature at like 21 22 degrees on all the thermostats I could find yet yeah yet the uh the furnace was just on a runaway was running away I don’t know what would happen if we stayed any longer so no surprise the previous guests before us who left it before who left before we arrived that’s why they
(07:14) shut off the furnace and the owner instructed me to regulate the temperature inside the house was by opening Windows in the middle of early March there’s still it’s it’s a warm March but it’s still like cold outside what a waste of propane and lack of client care anyways so we packed up the house while the kids were in ski Camp uh a cleaner showed up and gave us grief for not leaving earlier uh like it was our fault the house is gross and that’s why we’re leaving and it was also too hot uh we
(07:43) drove 15 sorry 10 minutes down the road as we booked another airBNB uh and we were greeted with a beautiful custom home Mansion uh well there’s probably 4,000 I think it was about 4,000 square feet on a massive lot backing onto a pond it was even better than the pictures uh we had a wonderful remainder of our March break after our very bumpy start uh we honestly can’t wait to go Wai in next year uh while my kids are my kids are old enough now they don’t need to be in Camp anymore so yeah we hit the
(08:15) jackpot with that property uh with an added bonus we saved $1,700 for making the switch though I still think that first night’s day at that crap hole should have been free uh my point is I couldn’t do what the Airbnb owner did have to deal with customer complaint calls and deal with Airbnb uh and again the owner is likely making really good money um and her experience was that you know lack of Maintenance was perfectly fine she’s still making money hand over fist U she actually said she couldn’t take
(08:45) care of Maintenance because the place was always booked she never thought to you know block off some time so you can get some work done no um but to operate a business like that and not care about customer experience and argue with customers and be fine with being a SL Lord of short-term rentals uh I know my kids wouldn’t do it and I wouldn’t I definitely wouldn’t do it either hence I choose to Outsource all my management on my real estate Investments going forward uh all the heavy lifting it all the heavy lifting
(09:15) that I have to do for investing in in the states is my my due diligence and honestly I’ve had a blast doing it because I’m a real estate geek and I enjoy travel so I can’t wait to travel with cherry to Atlanta and Nashville and in between and uh yeah oh and then also recently I I stumbled upon uh trion’s website the rental listings as well so so they’re one of the largest reads larger reads in the states so again uh I’m enjoying what I what’s called in the in the in the industry any industry uh
(09:51) R&D you know most people understand R&D as being uh research and development uh I I Al it’s also known as ripoff duplicate so I have the rental listings of Trion which is uh and they own 36 or 38,000 single family homes in the states so I have the rental listings I have their addresses and pictures so I can look up what they paid for and when so anyways combine that with public knowledge of the billion dollar Investments being made by Intel Samsung T Texas Instruments LG Honda Toyota hyundai Tesla all in
(10:29) business friend friend L landlord uh landlord business landlord friendly Southern USA and it’s actually nicknamed the battery belt for their green electric and Battery manufacturing Investments all the locations are just outside major centers like Columbus Ohio Atlanta Georgia I know Columbus is a little bit on the Northern side but they’re they’re one of the anomalies of being landlord friendly in the north uh Rally North Carolina Dallas and Austin Texas these are all CI cities with growing population and growing economies
(11:00) and identified as among the best cities for investment in the USA so my plan is very simple I’m going to buy hoses in between these major centers and the new manufacturing companies being built that will employ thousands of manufacturing employees anyways I’ve mapped the new major employers out on Google Maps uh I know my target neighborhoods my investment criteria and I’ve partnered with share the asset manager to be my One-Stop shop to you know find me deals manage the managers Al all sorts of
(11:30) things uh I’ll pay them their fees and they get to do all the landlord duties while I get to keep 100% control and 100% of the equity this is the best joint venture setup I’ve personally ever seen if you two would like to learn how cherry and cherry my clients and I are investing in the USA we are hosting a how to invest in the USA Workshop Saturday morning April 13th we have experts in all areas including accounting accounting legal structures financing Acquisitions and of course management note that we are keeping our
(12:01) investing simple and boring and only discussing single family homes in at the workshop because they’re affordable at the 100 100,000 to $350,000 range and I can get cap rates between 5 and 7% which pretty much beat anything here in Canada when adjusted for risk uh links in the show notes on to this week’s show on today’s show we have one of my mentors in broker uh Tom Tom crit is the broker and Co under Rockstar real estate brokerage where I belong and have been since 2010 uh in my experience they are the best leaders and
(12:36) influencers in the community uh if results are what matters to you like they do for me Rockstar members uh their thousand plus members are very well educated and more importantly they are very successful especially when you adjust for risk no get- rich quick schemes at Rockstar and on today’s show Tom Tom discusses how Rockstar members have weathered the current storm uh spoiler alert it’s been pretty good we talk about how the pandemic ruined my Bitcoin gains while Tom has accumulated more than he will he’s willing to share and
(13:11) he’s laughing all the way to the bank and I I as I say that I I know the R I don’t know if that saying works when you’re talking about Bitcoin and Bank you know what I mean anyways Tom and his brother Nick kader are hosting the next your lifee terms event live and in person Saturday April thir April 6th at the international center near Pearson Airport this is likely the largest room uh a thousand plus attendees are expected uh and and these will be successful action takers uh and uh the talk is always the talks always fresh
(13:46) for example there’s speakers there speakers that they have out that they’ve never had before there’s no repeating content allowed uh cherio will have a brand new presentation and she’ll have a booth there as well I’ll be there of course networking I’ll be wearing my USA hockey jersey if you’re a client of mine uh and I do know someone who knows someone so I can save you the couple hundred bucks on tickets uh and for everyone else I have Link in the I have link and details and the link to
(14:15) register is in the show notes uh URL Fe if you have a pen handy it’s www.yourlifeyourtermsevent.com please enjoy the show hi Tom what’s keeping you busy these days I was just thinking about when I first met you and you decided you were going to get into real estate and for whatever reason I think it was a Greek restaurant in Burlington we had lunch was that where it was and uh Nick was saying something to me like you know we got to sit down with this guy Irwin he’s thinking of leaving his job and going
(14:52) into real estate and real estate investing full-time I’m like okay you know let’s go and uh Greek food I love so that wasn’t easy sell and I remember sitting down across and and I thought okay this guy’s pretty crazy like us so he kind of fits because uh he wants to quit his job I remember it was a decent job what was it I I worked for a company that was acquired by IBM okay yeah so you were you like a data analyst or something I was in product management so it was it was a nice position for me
(15:21) because uh my workers highly respected I worked between like clients and internal clients to help design product that would deliver what they wanted so I kind of like that intermediary between clients internal clients in our development staff and why what was what had gotten into you why did you want to quit again I forget I I always want to get rich in life it was always my always in me that just my nature I always want to be rich and after reading Rich Dad Poor Dad I realized it was not going to happen while working a job got it and you
(15:50) wanted to be rich and how do you define that rich in time rich in money Rich money I was young more money than marrier got it I was not even a point where like I didn’t want kids because they just getting the way of having makeing more money that was my mindset back then got it got it um I think I just watched is it true I watched something it was like a a Chinese comedian sing for New Year’s yeah I was talking to Tim about this briefly and is this is this a real thing so you don’t say Happy New Year to you
(16:22) know in on the Chinese New Year it’s not customed to say Happy New Year you say I hope you get rich it’s it’s it’s it’s it’s a loaded thing but it’s also rich in what though money Health okay so it means I wish you wealth in all facets of wealth yes okay okay he’s he’s taking the Liberty but yes but you know but again like generally Asians priority is money yeah yeah you get it like it’s po it was a historically very poor culture sure so like you know no money no eating
(16:51) right so you know you know you know croatians are have similar background as well you don’t have money you don’t you’re not eating yeah yeah I remember just the way my family I think would try to show wealth would be they had nothing so if you went to visit and this would be my family in Croatia they would put any P they had any cheese they had out any bread in an abundant way to kind of show that they were welcoming you to the house and to show you that they had something to offer you and they had no
(17:19) real Financial wealth but that was the way they kind of tried to show that they were welcoming you you know putting some food on the table Yeah weird times lots of different cultures have different ways to express that but I remember you you told us you were going to quit your job and then you went and did that took a lot of balls man do you looking back at that moment do you are you happy that you did that do you regret doing that uh so I don’t know if you remember it was a long time ago was 2010 we’re talking about I
(17:48) actually went on sabatical for 30 days okay and that’s and I had my license at that point so I give it a go so I give it a go and then I was doing all right right I think I did two or three Deals in that month and then if I extrapolated then that would be more money than I was getting paid at the job and I was enjoying what I was doing I knew that this would help me become a better investor as well so then there was more there’s more wins and also I could keep local right I was living in Burlington at the time so go train downtown you
(18:17) know and it was yeah hard Jam in there everybody was reading the newspaper yeah everyone’s reading the newspaper it’s and especially the ride home is packed like you I almost almost never got a seat so you for that’s usually me cuz I play basketball at work I was that guy but yeah like that was you know a key part of the journey and you know and it’s weird cuz I’ve only ever been at Rockstar I’ve been a realtor for since 2010 only ever been at Rockstar so this is my only context yeah wow and before we’re recording like like
(18:54) we’re we’re recording this on February 15th like there’s been all this turmoil in the industry uh like just just last week there was big news in the CBC and the globe mail a certain group with like 8 600 units in like Northern Ontario mostly like they’re Grant bankruptcy protection and digging into it it’s it’s it’s bad I don’t know how much you dug into it not much I just know that there was a bunch of stuff lent out on promisory notes and that’s really all I know the houses were
(19:23) up north somewhere well the the bigger issue well that’s a big issue part of the issue as well is like there’s 200 units that are sitting vacant that are not that are not habitable wow right and I was thinking like how far is this from Rockstar theory for how to invest oh jeez right cuz I’ll go OG on you uh cuz you always share your family story of back in the uh late ‘ 80s mid 80s late ‘ 80s and the early ‘ 90s yep can you share that story yeah I think maybe that’s what defines how we think about
(19:55) real estate over the last 15 years was that era our father was running a drywall company and then he started flipping properties on the side just like everyone starts flipping properties on the side in the late ‘ 80s it was in uh Moga just north of square one off Eglington and kind of Highway 10 and those subdivisions up there were going up in the late 80s yeah that’s gorgeous area beautiful area he started flipping properties and he did really well on a couple flips new construction bought them sold them and then 1990 hit and he
(20:22) was holding this one new construction again that he bought off paper on assignment so like it was a trailer on a gravel parking lot guy walks out buying the house my dad buys the paper from him and it was a 4,400 ft house house enormous pretty big three-car garage and back then he bought it for 750,000 and with the hopes that it would go up like like all real estate was going up and instead of it going up four months after he bought it um TD raised rates I mean the Bank of Canada raised rates but in this one month interest
(20:53) rates went up and if memory serves it was 2.9% in 30 days so it was like a 3% raise in 30 days and that absolutely decimated the real estate market and not only the real estate market it really ripped apart the highend or what I would call the luxury Market yeah 40 44 qualify yeah so that house we were looking to see if we could sell it and we would we would sell it for like 450 we thought and at the time we couldn’t afford to sell it for $450 we would lose so much that our family home in Miss Saga would be in Jeopardy so uh my Dad
(21:28) decided to hold on to it I became the property manager because my English was stronger than my father’s and we rented it out and even renting it out I remember roughly it was about $1,000 a month negative so my dad’s drywall or our dad’s drywall company was struggling because it was a recessionary time and we had this property that was sucking $1,000 and the price of it was under under what we purchased it for and then the the tenant skipped out on rent um and uh I remember going to the house and
(21:58) it was vacant at first I remember going to the house and them telling me hey just come back in a couple days and we’ll get you the rent I used to go pick up the rent I remember being inside the house when they told me this beautiful carpets baby grand piano like I remember being impressed with this house and just the way it was furnished and everything so when they said to come back I didn’t really think of it I used to cut the grass on that house and stuff and uh full service product management yeah
(22:23) what I was doing yeah I was like my old Thunderbird like I stuck in a lawnmower and I went to go cut the grass and do all kinds ofd who knows what more in a Thunderbird okay I got the image in my head yeah two car girl two car sorry two door Thunderbird with light covers and a bra on the front with a lawnmower in the back going a cut grass and uh i’ cut the I went back and the neighbors are like hey they let they moved out in the middle of the night and I’m like what they’re like yeah the house is vacant
(22:49) we’ve looked through the windows and then I went and the house was vacant they skipped out on one month’s rent and at the time one month’s rent for our family was absolutely massive like we needed that money do you remember what the rent was I don’t I just remember the negative I remember the negative was like roughly a thousand and uh I had to tell my father which was also that was just brutal had to rent the house out and renting out a larger house when times are tough took forever it was basically just us
(23:14) Executives who would rent out that house and even renting it out again in a recession not easy it was not easy no I don’t know how many months um I was in university then uh but I remember being vacant for quite a few months because I would have my friends over for some parties and I remember one of my friends jumped off the twoot sorry jumped off the garage roof he jumped off the garage roof of that house and landed on his chest on the grass and he didn’t die I remember seeing him bounce off the grass
(23:45) um so yeah we had some kind of crazy parties in that house and stuff but we eventually rented it out and uh that just taught me that you know going through that experience was really really tough and it just taught me that um when when we looked back there were some real estate or some properties that really um were the most liquid if you needed to rent them out if you needed to sell them in bad times if you needed to refinance them and it was starter homes it wasn’t these luxury properties starter homes always had a bit of a bit
(24:15) or a bit of demand M and I just always stuck with Nick and myself we like huh starter homes always seem to be like the most liquid real estate so if you’re going to get into real estate probably should just get starter homes and you should probably not do um reconstruction like our father had done because by the time you sign the paper or the time between you sign the papers and taking possession a lot can change it can kill you it the market can change it can change greatly Fin and I know that’s very conservative thinking and I know
(24:42) tons of people have made amazing money on preconstruction and I’m not denying that’s it’s like absolutely fantastic for them this is just our family story and what works for us so we always then steered Nick andai to starter homes that were resale because we thought oh well if they’re resale we know what the rent’s going to be and if it’s a starter home we can we know we can rent it out to a family regular rent we know we could do a rent to own strategy on it if it’s close to a college or university we
(25:05) know we could change it into a student rental which we had done we have a property that we ran as a rent owned that particular one didn’t get bought out we changed it to a student rental for a few years now it’s back to a single family rental so this the starter homes just have a lot of opportunity a lot of you know options there’s options flexibility to it if you want to throw a credit line on a starter home the banks are typically willing to do that so it’s just easy so it sounds pretty boring but
(25:33) we’ve just always thought resale and single family homes and when I say single family I should qualify that like we mean fully detached but you know if it’s a semi- detached town home like those kinds of properties ideally single family if we can and that just became like our our thing we would just buy resale and um yeah that’s what we learned in real estate and then when we when when we went off to start Rockstar it was really just because we had no more money to buy properties ourselves so we thought okay well we
(26:03) have these real estate licenses that we got to bypass Realtors MH and uh why don’t we just use this license to try to help other investors because this is going to sound crazy irin but in 2006 and 2007 there weren’t a lot of Realtors who worked with investors yeah I remember those days yeah there you couldn’t find anyone so most books most books taught to not work not yeah don’t even yeah yeah if it was a real estate book it was like investors asked too many questions you don’t want to deal
(26:28) with them and The Brokerage that we first went to in Oakville they didn’t they told us we were going to fail when we told them we were going to work with investors they didn’t think we were going to succeed at all well because also add to that most investor books that were training investors like write a 100 offers yeah and that was the books I WR I used to do that I used to write all those offers and I used to piss off all these Realtors to win one yeah and and I would say things like legally I know you must present my offer I know
(26:55) you must present it I legal legally I know you must present this and then I flipped and I got my license and then I dealt with these investors and I’m like oh God yeah you don’t realize the politics of of real estate is that you’re trying to keep relationships with other real estate agents so you don’t want to piss them all off with your crappy offer yeah exactly someone off they may not ever talk to you again I’ll never forget I found a single family home in Burlington that I couldn’t buy
(27:18) Nick and I didn’t have the money but it was it was a single family home in Burlington for it was I I want to say like 283 285 if you could believe it 283,000 and remember telling this investor oh my gosh I found the property it’s it this is the price and here’s what you’re going to get and rent on this property this thing is a winner and he had read some real estate investing book where he had taken the purchase price of the home and divided it by the property tax and the ratio that he was came up with he said yeah he said in the
(27:47) book that if the ratio of purchase price to property tax was this that it wasn’t a good purchase and I remember it just finally hit me I’m like wow some investors just speak with cra crazy you know some crazy ideas and then I thought oh my gosh was that me like back in the day cuz I probably said some things to realtors that just sound the 1% rule or yeah yeah well the 1% rule if you could get the 1% rule that was like that was crazy that’s what got us into student rentals because they were hitting the 1%
(28:16) and we’re like holy smokes back in the day yeah yeah yeah but anyway that’s so yeah so our personal journey is heavily influenced by the early 1990s and that real estate crash lasted property prices went down for six years so um that heavily influenced us and just guided us to starter homes the resale Market super boring and over the years people have come to our faces and told us you guys don’t really know how to make money in real estate you have some those people yeah you have to be doing this we’re now
(28:44) bankrupt oh really yeah and it just never even phased us cuz I always just thought like well this is my journey that’s your journey this is what’s working for me I’m doing the math on these things I like what this you know does and we’re going to stick with it and our accountant really early he’s since passed away but he was a mentor to us I’ll never forget he said that when he was younger him and his accounting buddies would look at businesses and as businesses would grow some of them would
(29:06) grow almost exponentially and they would always admire those people and those businesses but you know now later in his life as he reflected back with his accounting buddies they realized that it was the turtle who wins the race that a lot of the businesses that really ramped up some revenues that wasn’t really a sustainable thing it was like either they you know a got lucky or B were not doing something appropriate and they the revenues really Skyrock rocked but the business itself wasn’t built on a bed a
(29:35) Bedrock of a solid foundation and they came to learn that like oh the people who just do things at a steady Pace just year over year over year at the end of the day tend to win most often and that also stuck with us and we’re like you know what these little starter homes they’re the turtles yeah they just you know day in day out they kind of work away for you and at the end of the day they’re not the most exciting but they’re likely going to you’re likely going to survive the journey MH I was
(30:01) just reading an article about looking back on GE and that actually fits into that as well when Jack wal was like he was like the go he was he was like the Elon Musk time I remember right and then then I I remember I remember when GE Capital started and this is exactly what you’re talking about GE Capital started to finance their customers to buy more of their product yeah was that what it was yeah so it’s like inflated so like yeah we’re number one or number two in this in this and it was vertical but
(30:30) we’re we’re feeding it yeah yeah yeah yeah yeah it’s like they had control of the Monopoly board and the bank so they just threw in more money into the board sounds sounds familiar it yeah that’s that’s oh sorry I want to touch back go back to your the the the property your your father bought what is it worth today just yeah I haven’t looked I haven’t looked that in in years I guess it if I have to guess it’s at Miss Saga Road in Eglington in missa over 3 million somewhere yeah it’s probably
(30:59) something like that yeah yeah four maybe yeah I should go look years ago I kind of like blocked it out of my mind for so long because it was such a scar in our family but um yeah and the turtle would have won eventually if you could hang on yeah if you just held on and that’s the thing like if you can handle the leverage the whole key to getting ahead financially is use to me is in the existing Financial system is to use leverage and then be able to you know smartly manage leverage and if you can’t handle the leverage it’s the market
(31:30) telling you oh you weren’t too good at this game and we’re kicking you out but if you can manage The Leverage you’re likely going to get ahead I mean you know I always look at real estate I’m like a real estate as an investor you put 20% down historically in the Toronto area real estate will appreciate at 7% a year 7% on a 20% down payment it’s 35% return and it’s a good way to financially outpace the currency depac in this country and it’s a good way to get ahead financially but if you overextend yourself with that
(32:00) leverage and you can’t manage it you get kicked out of the game mhm it’s like a reboot so it’s much tougher market today I was actually talking to a a Toronto agent friend of mine he was like he’s he’s he’s doing the math in his head he’s an engineer by trade but he’s real practice as a realtor he was telling me to cash flow on a downtown Toronto condo you need to put down 50 to 55% just to cover the hard costs so mortgage taxes Insurance condo fee I’m like that’s a lot of money to put down mhm and then
(32:28) other things happen tenant turnover lease fees bad debt right repairs and maintenance Property Management all those things happen property tax and Toronto’s increasing what 10.6 10.9% or something I think with the threat of 16% if the feds don’t kick in some money yeah what could happen yeah it’s an election year yeah they probably W yeah they’ll probably pay it’s election coming soon they’ll probably pay so so what what should investor do today based on your based on Rock philosophies I think I’ve just heard
(32:57) that story like I’m 51 years old now I’ve heard that story since about 1998 like in 1998 property prices had gone up um for two or three years and somebody told me oh my gosh like you got to be careful with the real estate you know property prices have gone up now two or three years they always go down because if you grew up in the90s you were used to property prices going down then I remember in the tech boom of the early 2000s people were like oh tech stocks are where the money is real estates way
(33:22) too hard and I was buying student rentals then and you couldn’t convince anybody to buy student rentals everybody was like you know Cisco Nell pets.com like that was the that was the era.com yeah that that was the era then that kind of crashes down greenpan lowers interest rates real estate catches a bit of a bid and then 2008 hits and people in this country were convinced real estate was going to crash we started RockStar at that time and people were telling us oh my gosh are you seeing what’s going on in the in the US it’s
(33:54) going to collapse here in Canada and then in 2017 similar things you know prices came down and right now interest rates are High um so it makes it quote unquote more difficult than in the year 2001 when interest rates were lower so I guess my message to anybody listening that’s going to go into this is you have to understand that real estate and our money game now is very cyclical cyclical every three or four years there’s a big amount of debt in the world that’s getting refinanced and and in between
(34:24) those times things get a little wonky so a lot of new debt came out in the pandemic our interest rates were really low um to kind of create a little bit’s under selling yeah a lot to create a lot create a lot of debt and then inflation gets hot interest rates go up everything gets a little kind of scary and then we’re hitting a Time whereas if I had to be a you know if I had to place a bet on where I think interest rates head in the next year it’s going to come down and it’s going to take some pressure off
(34:51) things to make that condo example that you were saying to make it cash flow a little easier because interest rates are going to come down and have no crystal ball I have no guarantee to that I just mean over the last 20 years this is what I’ve seen it’s like interest rates kind of trend up like in 200 2008 interest rates no one remembers but interest rates we were getting some mortgages in the high fives close to yeah close close to 6% and people were telling us Tom these purchase prices I’ll never forget
(35:17) this Hamilton property at $225,000 no more cash flow no more cash flow game’s over and interest rates come down prices go up and you know the party kind of rages on so I don’t know if this is the end of real estate for the Toronto condo or for the resale Market in Toronto I just think we’re in one of those Cycles where rates are high and if your formative years in real estate are 2008 onward all you know is cheap money cu the Cycles have been so so high with debt and so low with rates that that’s
(35:51) all you know and we’re finally coming to a place that’s kind of outside of the you know the recent norm and it makes it difficult for people if the numbers don’t work and you can’t handle it then I wouldn’t buy but I don’t expect that to be the case for the next 10 years there’s just too much debt in the world for rates to not come down so I got to think things are going to get a little easier again MH on the same side my friend that was telling about the condo he he Al telling also telling me that in
(36:20) downtown Toronto duplexes are on absolute fire sure right CU people are want and these are these are house hackers these are these are folks who are planning on living in one of the units and they need the income from the other unit to live and like oh God thank goodness my duplexes have taken a haircut in the last few years yeah yeah yeah yeah I think it’s just everything goes up and down like Nick and I don’t look at real estate like any property we’ve ever looked at we thought would we would we buy this if we had to hold it
(36:49) for 10 years at a minimum right even if we were doing rent to own stuff which we were ideally selling to a tenant buyer at the end of 3 years um which didn’t happen but we had to plan that it if it did we were going to be okay with it and if it didn’t we kept the property so we’re going to be okay with it so the way we look at it is like do the numbers work for us in our lives right now could we hold it for 10 years because when we were younger I needed the cash flow so the numbers that we’re talking about the
(37:16) Toronto condo and different properties around Toronto right now if they don’t cash flow it’s not really appealing it wouldn’t be appealing to the Tom that was in his 20s but as your financial situation changes someone might might want to buy a Toronto right now doesn’t matter if it’s 40% down 50% down because they might want a condo for their family for their son for their daughter for some reason they’re in a different Financial place and the number is not a big deal so I think you have to match
(37:40) the finan the conditions of the real estate market to your current situation are you in are you young willing to take on a lot lot of Leverage and a lot of risk or are you a little older and you’ve accumulated some assets and now you’re at a different place in life so it’s just there’s just no one answer but I do but I do know any investor who looks back always says it’s harder today yeah like I’ve never met the investor there still harder today it’s still harder today never even when price is
(38:08) down it’s still harder today the banks change their rules the down payment rules change the qualification changes but things always change I’ll give you an example in London Ontario where we have a lot of investors who buy student rental properties around Western they’re about to change the bylaw as we speak right now to go from five bedrooms up to allowing seven oh great so now we were in a situation where people were like oh well the numbers don’t really work yeah five bedrooms I can’t earn enough even
(38:33) though uh per room up there it’s common to get a th000 we’ve seen $1,200 a month um in student rentals but now if you can add two more bedrooms we we know a bunch of investors who have unfinished basements that weren’t finished because they couldn’t legally add two bedrooms now they can legally add two bedrooms and it’ll get another $2,000 a month on that property what’s that going to do to the opportunity there probably increase it so I just think you can’t take a moment in time and make a definitive
(38:56) answer that this is how it’s going to be forever real estate’s like a changing game so is is uh I want to get to I want the listener to know what what properties they should be looking at is the London student rental an ideal for anyone to get into yeah okay so also another thing want to clarify as well is like a high amount of Leverage is different for different people to me like to me a high amount of Leverage was 20% down cash maybe even he in a schedule in a schedule A Bank mortgage for cheap that was high leverage for me
(39:29) versus we see all these people out there with first private first private private first for 6% private second for 12% oh God yeah promisory note for like 15 177% yeah right and also I want to throw in I’ve been saying this on the show a couple times now we used to call these hard money loans we got away from it it’s true yeah we don’t use that language as much yeah because I remember a good friend of mutual friend of ours like he would use the term when he when he was building his Mansions when he’s
(39:57) he I have hard money loans versus people like BR I priv private I private borrow yeah like no it’s it’s hard these are hard money loans that’s sorry I can I digress back to uh what is a best practice investment in today’s market um so on okay so first you just give me a flashback I remember when Jim flarey the Finance Minister in Canada briefly allowed 0% down payment and 5% down I don’t know if you remember four investors for declared rental properties the cmhc fee was like astronomical but I
(40:28) can’t crap on what you just said too hard because when that came out Nick and I were like all over that we were like wait a second you can do 0% down and if the numbers worked and some numbers still did work at 0% down your cmhc fee was astronomical but anyway you just I couldn’t qualify because already had properties so they would never give that to me it it was tough yeah yep and um I I tried though yeah of course why not yeah 0% down it’s like an infinite return even five yeah um but for today
(40:57) for for I mean it’s it’s a tough question to answer today because you you know whatever answer I give has to be mapped to somebody’s short-term objectives and their long-term goals like look at your all of our short-term objectives mine and yours like look at yours right now you’re making a change in your portfolio like it always is kind of Shifting but if somebody I’m a different age and different yeah you have different things bother you in a different way at this age and at this stage of life than it did a few years
(41:21) ago so you want to adapt accordingly and you know to each their own of course but I would say that um to anyone looking at the Ontario market right now what has been popular if let me answer it that way right now has been student rentals because student rental demand is always strong and I’m not talking about the the recent massive influx of international students the big universities always have demand so McMaster Western Queens these places always have strong strong weth to yeah like Western has like last time I
(41:54) checked was 37 38 39,000 students if you add in faculty in the hospital there we’re talking at like 40,000 50,000 people and they have a college in town too to put more pressure on that market yeah Fen Shaw’s there as well you’re right so um if you can buy a property around Western in good Economic Times or in bad Economic Times there’s always students and uh those properties make a lot of sense because you also get to go to market rent quite frequently so if you rent out to a group of students
(42:23) after 3 years usually that group is moving on you know within 2 years 3 years four years usually you’re moving on to get a new group of students when that happens you can take your rent back to whatever Market rent is and as a as a way of an example my son is just leaving Western this year he rented out what I would call a slummy house we don’t own this particular house uh for $615 a month utilities included three groups of students came out for next year just a couple weeks ago they took it on the first day for 925 a room plus
(42:53) utilities 925 a room plus utilities he was renting just a few years ago we signed that leasee or he signed it at 615 utilities included right so like 50% increase over 3 years it’s massive so student rentals are interesting and now if they’re changing some bylaws and you can add more bedrooms legally in there you can do it properly and I mean making like safe clean functional properties so student rentals can be really interesting and and I would say to anyone looking at real estate that could be a way that you want to look at it or
(43:23) you want to buy a property where you can add a duplex a second second unit or a single family home on a lot that in the future you could drop in a g Garden Suite a laneway suite or change the structure of that house because going forward like look what you said about Toronto with like duplexes being on fire I think we all know there’s going to be a continued housing shortage in this area so that if you can add on to the property and add out their income streams those are huge so you know if you can go to the Niagara area right now
(43:51) and find a property where you can duplex it legally and then potentially even add a third unit on the property m at some point to me those are gold because if you look at the population growth in Canada as much as Canada has problems I don’t think we can deny like Canada has problems has government problems Canada has There’s real estate problems there’s government problem there’s problems at all levels in in Canada and all over the world too all over the world China like us us with their issue in Texas the
(44:18) whole world we’re we’re going through a moment here for sure but it’s crazy times it’s crazy it’s yeah bitcoin’s over 50,000 again these are historic times man yeah ride Bitcoin down to 16,000 or whatever it was and come back has been been a journey but on the real estate PR keep me focused here don’t don’t throw dangle at the Bitcoin topic there um the the Niagara region like if you just look at fundamentals like the population growth of Canada is going to continue whether one way or
(44:44) another through International students legal illegal whatever it is you know we’re getting more people in this in this country no way dips below half a million ever again yeah yes we’re going to have yeah so the population growth a big percentage of population growth in can of the legal immigration that I track 44% comes to Ontario so we get like a huge amount in Ontario within Ontario a huge amount of that comes to the Golden Horseshoe Niagara happens to be positioned against you know the biggest economy in the world um the
(45:12) population growth is going to expand they’re going to put a new casino in Niagara there’s two new factories going up Welland is getting a battery Factory from I believe it’s a South Korean uh company don’t hold me to to to that but there’s a new battery plant going to go in and well and there’s another new Factory that I’m forgetting the name of that um plans in thoral there’s a new golf course I believe being built in the Niagara region so you could just see like that area is going to just continue
(45:36) to expand continue to pill in population growth so if you didn’t want a student rental I would say hey check out the outskirt areas of Toronto specifically the nigar area would be an interesting way to uh to get into real estate for sure I’d throw in as well like a basement apartment strategy Garden suet strategy would be wonderful near a university as well yeah that would be great those are really hard like in my my experience those are really hard to find a lot that can handle that or a property that can handle that but man
(46:03) you got a you got basically an Ontario Golden Horseshoe unicorn if you can do that oh my gosh and I know some people who have built like nine unit student rentals by these universities as triplexes so they can convert it to like a proper Triplex or they can rent it out as three three-bedroom student rentals and with a lot big enough if they wanted to they could put something else in the back so you’re right yeah that’s a unicorn if you can find that kind of thing and the bank loves it they’ll Finance it properly yeah like versus my
(46:29) student rentals yeah well back in the day get the best back in the day yeah student rentals were not like this back in the day like especially around McMaster like do you remember going into some student rental a friend of mine had a room when I was in university we went to visit him to get to his room you went past the furnace and there was like a curtain hung off like I guess from the HVAC ducks that you kind of pushed to the side and now looking back at that time we didn’t even think anything of it but now looking back I’m like oh my gosh
(46:56) this guy’s room yeah he was on the back side of the furnace room just with some carpet and a mattress on the floor that was his room that he was renting out so McMaster area was wild it’s better now it’s come a long way I’m sure there’s some of those properties still out there I remember seeing like Bas and bedrooms with no windows yeah people had just a room there was no windows like like that’s wild wow and that was not that uncommon and the low ceiling like 6 yeah I remember the low ceilings I remember
(47:26) one bedroom in a basement that we were looking to buy this property we went into the basement and the bedroom um I think it had a window but you’re making me think maybe it didn’t but it had this little kind of doorway that was maybe only 4T tall and the ceiling was slightly crooked like it wasn’t a proper doorway and and it was maybe 4T long so it’s was 4T tall and about 4 ft long and you just kind of look down and it and you there was no door it was just this little weird hallway thing off the
(47:49) bedroom and you walk through and on the other side was a bathroom and like how did this like how is this bathroom here how does this exist exist so uh and you wonder why we have rental licensing coming fromon area yeah yeah by the way we we we dug up one of Nick’s houses by McMaster because we didn’t have the money or he didn’t have the money I wasn’t involved in this house to pay for like a Waterproofing Company so we dug it up by hand he got like six of us out there and we dug it up by hand and then uh he
(48:20) sealed it all up and we threw back all the dirt and uh you know he sealed the cracks but in one area where they punched a pipe through for something to do in the basement maybe they’re adding a kitchen somewhere or something they forgot to seal around the pipe no so a couple weeks later there was still a water leak and they had to redig back down anyway we’ve seen a lot of stuff do you guys still have that hose yeah Nick still has it yeah yeah so speaking of Nick famous quote from Nick is uh what is it those who deal with the most [ __ ]
(48:52) what is it win win thank you thank you cuz we were talking about like stages of career you talked about the you know our neighbor to the South is world superpower and i’ I’d actually argue the superpower by far with with we don’t even know how bad the evergr issue is and not just evergr anyone who’s behind evergr as well who is the number two three four building biggest Builders how many vacant homes are there in China we don’t know how bad this situation is so I think I think things are I don’t know
(49:20) all this you you read the brick talks stuff stuff too I don’t know how much you believe like bricks will actually catch up and actually be a significant thing like China has so many cracks in their economy it’s just nuts but anyways anyways end of the day not that much is going to change with the US there’s still going to be even if someone passes them there’s still going to be an incredible world superpower lots of jobs sure and so like everything combined I’ve done I’m done with dealing with
(49:44) [ __ ] right I’ve got I’ve got a B officer I got call back because she’s because she’s calling me because I have a I have a duplex that’s close to Mohawk College okay so I fall within land uh landord licensing okay got it I’m like I so I have at least I have three properties in Hamilton that will qualify into the current pilot for for rental licensing so and that’s just not worth it to me I’m I’m tapping out why do you is there a lot of work you have to do on that property no this is why I’m partly
(50:14) pissed these are legal duplexes like my my Hamilton Mountain property so why is she calling you CU because rental licensing if you’re in the W if you’re in that Ward you you have to go get rental licensing okay got it you don’t have to invest in the property you should have to I may have to do some okay got it uh but again though these my basements were done with with permits City’s already City’s already signed off on everything right I why do I need an HVAC inspection in Esa I haven’t done
(50:40) anything right and all the just all these extra costs I don’t want right so I’m done I’m done just I read too much news so I’m I’m done dealing with [ __ ] and we know where you’re going you’re wearing the Hat of where you’re going yeah yeah cuz oh man I loved it I’ve never been to Texas before you’ve been you’ve been you used had to travel a lot especially when your corporate work uh yeah y Dallas San Antonio Austin yeah I loved it my trip to San Antonio and Austin I just loved it I had no idea
(51:07) pulling up to a gas station we were just talking about this pulling up to a gas station having brisket just ready at the gas station there with picnic tables outside and going getting some fresh meat and eating it there amazing I remember being the whole the whole foods whereever Whole Foods is originally out of Austin or San Antonio I forget I think it’s Austin I don’t know but I went to whole see a lot I didn’t see a lot of presents from Whole Foods okay well we went to the Whole Foods like flagship store and their Hot Table had
(51:29) this like fresh barbecue and you know they were just selling it by the pound so you could walk up there and just say how many pounds you wanted you would wrap it in paper and you could just go outside and eat it it was like oh my gosh this is amazing yeah it was sunny and warm and uh it would be nice on a day like today it would be yeah seemed they seemed like a great place I could I could definitely see the attraction yeah cuz we’re just talking my single family homes before recording I just got an email u a property I I’d liked on
(51:56) realtor.com so that gave me a price update they just dropped their price by 25,000 from 300 down to 275 oh North atin only for 275 in Ontario not even Tim actually maybe Tim’s Ontario 275 and I think I can rent it for I may have to fix it up a little bit but I think I can rent for 1900 like these are the old these are these this is like Hamilton Mountain 10 go numbers it’d be interesting to look at the appreciation in those areas just to see and what you personally expect I think we get a strong appreciation in Canada
(52:30) because of the concentration of population around a few major centers whereas the US you just have a lot of choices even in Texas you have a lot of choices but then you can choose Florida and have a lot of choices so we’ll get to Florida in a minute yeah but it’s just I’m I’m curious to what happens to the appreciation in those areas just because we don’t get the concentr you don’t get the concentration of population like you do here um not that that’s good or bad and that might not be
(52:53) important to you but it would be something to look at like historically what happens in those areas around appreciation because one of the things I like specifically why I targeted Austin was because the prices have already come down at least 20% and realtor.com picked Austin to come down the most of the country so I’m looking at like Warren Buffett style like Austin pretty much is on almost every top 10 list Texas is obviously on every top 10 list right so this is capital tons of jobs prices are come I’ll probably get
(53:23) something from from like I’ll probably get the house if I bought something today i’ probably get like at least 30% off the peak I’m surprised to hear the prices have been coming down recently with just all the demand of people moving into Texas so what what is driving the is it just a interest rate moves there that have made affordable I think just went up too much went up too much too fast okay so it’s a bit of a correction yes this is a correction so I think okay so over 10 years it’s up just
(53:45) recently it’s down oh yeah just like about 2021 is is when the decline started yeah so probably declined in 2008 during the financial crisis came surpassed the 2007 High awesome yeah’s there’s there you been com mother sh no that’s R’s com love it it’s highly offensive as long as you like offensive comedy I love offensive comedy especially Asian jokes I just die just bring on come pick on me anyways uh but I’m uh again just I I completely agree with your point because America like
(54:19) there’s so just like greyber talks about like in the states like there’s so many cities with a population of 2 million or more in the states not like Canada shocking yeah there’s so many options for to move around to where to get a good job which is why uh the property I’m talking about that’s 275 it’s in uh Round Rock which is it’s the neighborhood North North Austin and it’s kind of Northeastern and so about 15 minutes down the road is where the Samsung plant is being built to build microchips oh
(54:48) awesome yeah so it’s a it’s a 4 billion dollar $4 billion investment they’ll have 2,000 full-time manufacturing jobs wow and Sam you know being a Korean company they’re back in Korea still recruiting suppliers to come back to come to Texas and support their bill awesome so that’s how I’m trying to defend and try to be offensive and defense at the same time makes sense so that’s and then that’s my thesis for the entire States as well so for example like Phoenix I’m looking at as well
(55:13) because that’s where Taiwan semiconductor manufacturing compan is open right the world’s largest microchip manufacturing they make for Apple you and I were both Apple people right so then that’s how yeah that’s how I’m defending mine and and and but I’m not I’m kind of preaching to the here about there’s us there’s advantages to the USA investing cuz I know you you you well before I was looking at the US you’ve been looking at the US yeah I think the way to me the biggest thing it’s the
(55:37) everyone’s going to be different to me the US presents a currency play because the US dollar to me is going to hold its value like I mean we’re just seeing it around the world that Fiat currencies are losing value one after another they’re losing them faster and faster the Euro last 10 years has been terrible the Yen oh my God the yen yeah wow for anyone wanted to go on vacation get a cheap vacation go to Japan cuz the Yen’s on sale it’s so cheap yeah I was just telling Nigel he’s got to take me um but
(56:06) uh the uh we were just there to go yeah yeah cool I would love to go um so to me it’s just a currency thing like if you look at the Canadian dollar if you have just Canadian dollar exposure and you don’t have any US dollar exposure and that’s important yeah you may want to consider especially if there’s another generation in your family that’s going to hold real estate you may want to consider getting some us exposure to some property just for the the US dollar exposure if it’s just that um there’s
(56:33) all kinds of other things you need to take into account um but to me that’s just the big picture way to look at it that if you just have Canadian dollar exposure in your life um getting a property in the US would be one way to get US dollar exposure and I think that’s a probably a really good financial decision over the next few years I’m also a Bitcoin guy as you know so to me Bitcoin is the apex predator in the room and everyone should have exposure to bitcoin but that’s a big leap for a lot of people so for them on
(57:02) their own Financial education and financial Journey if they want to get exposure to something beyond the Canadian dollar then at least consider getting us exposure and for Canadians getting an investment property in the US is like a pretty straightforward way to get it MH and I know rockar is a big fan of the build to rent model in in Florida I think we’re more a fan of the people we know like real estate to me yeah team is incredibly important yeah like again we were talking like there’s all these groups and they built poor teams and
(57:31) they’re bankrupt now it’s just completely sad yeah yeah and I think over the years people have asked us for specifically Florida just because so many Canadians vacation there um so much warmer than everywhere else yeah even especially important in the winter that nowhere else in America really is that warm yeah yeah yeah I was just down in Naples and uh nice it’s it was really yeah it makes you question what hey what am I doing up here in Toronto in the winter but anyway um the uh you get the US dollar exposure
(57:59) and uh I forgot what I was going to say there oh the team um the reason that we like Florida is we just know this you know we’ve known Jim now for 15 years we didn’t know the full scale of what he’s doing down there and uh they’re building brand new homes every year in the scale of five six 7 800 and they’re building per year and they’re building them with a tenants in mind so they’re building them so that they know they’re going to rent them out so that the property management can be the easiest thing on
(58:27) them so they’re building them with certain kitchen cabinets and certain counters and certain floors and you know they’re building them with uh roofs that have the proper tie-ins for hurricanes they’re building them at the right elevations so for a Canadian with a lot of variables to deal with when you go into Florida um this is one are a lot of variables what people expect yeah oh yeah for sure this is a a team of people that we feel we can hand off people to that are building the home they’re
(58:51) property managing the home they are handling the maintenance on the home so you’re you’re kind of covered right there’s still risk of course um but that’s what finally got us into Florida it’s like oh we finally found the team that we can say hey irn you want to go down there all right here’s the guy we trust go see him his whole team is going to take care of it they’re managing like 2200 units they got it all figured out now we went down and did a tour to check it out firsthand ourselves multiple
(59:14) times n and I have been down and uh yeah it’s been great and just to when I first saw uh the number of homes they build a year I thought it was a typo I thought there was an extra zero yeah yeah cuz they’re a home builder they’re like a home Builder that used to build subdivision homes they’ve just dispersed to do rental properties in different communities around Florida cuz to give context they would be a top 10 builder in Ontario based on their volume maybe top three yeah I don’t really know I
(59:39) guess maybe they would yeah well just think like mamy can’t build 800 c a year could they I don’t know don’t put anything past mam I don’t know I drove I drove through a madamey subdivision in Florida oh cool and they’re Canadian company yeah I didn’t know they had no idea they expanded right right right unless I miss saww but I’m pretty sure it was the same logo with the same company name on there and these are houses I removed the condo thing cuz it’s way easier to build a verticle like
(1:00:05) to like H these are house builders like that’s an incredible volume yeah building uh the vast majority are infill lots so they’re getting infill lots in existing communities and building brand new homes in there yeah because my context is Steve Ford we know a rockstar member like he builds 100 houses in the season his the Builder they works for right and that’s a whole season like so for to do hundreds hundreds yeah it’s kind of was the appeal to us is that these guys are like the real deal they’re not just building one home
(1:00:34) a year and selling it to an investor they are really doing this for that’s their livelihood that they’re in this business right yeah incredibly end to end yeah right here’s a product we’ll manage it you know it’s brand new yeah yeah yeah and then Canadians get some US dollar exposure I don’t know we’ll see how it goes I don’t know I’m question no LTB right now there’s no rent control I mean real estate you always have to like the the successful real estate investor just has to roll with the punches like
(1:01:02) as you see it with bylaw officers calling you and stuff you just you don’t know what’s coming um so yeah no rec controls the property manager we were speaking down there she was shocked when we talked about our landlord board up here she basically at one point said oh you’re California and we’re like oh is that what you would think of us and uh she said there 45 days and their cash for keys there was like $200 which shocked us but the reason it’s so low is because the tenants know they’re going to be out they don’t like
(1:01:30) to stand on so yeah they you don’t have to pay much to get a tenant out who’s not you know giving you trouble or not paying you can just go up to them and say hey I’ll give you 200 bucks and you’re they they leave so yeah just a very different Market different culture yeah the relationship between tenants I’m pretty sure I don’t know if I remember this accurately I’m pretty sure like the tenant board there like you’re going to the proper Courthouse yeah there is no tenant board you’re going to
(1:01:54) like Court same law law system as everyone else yeah and then um you know yeah there’s still stuff to learn different areas different counties and you know there’s always there’s always new things as an investor uh to learn about and the different rules down there but the 45 days um was really interesting to us and when she told us that to for a tenant to renew she had to give them a letter allowing them to renew the lease and that to me was shocking because you know here if someone goes beond Le goes to month to month and
(1:02:26) there it was directly the opposite so you know I thought that was shocking yeah cuz here as as a commercial landlord like the tenants usually like like pushing you to resign a new lease yeah right versus tenants residential like I month to month automatically yeah I I I suggest all Canadian investors speak to an American investor see the compare differences for sure right yeah cuz like Florida Texas Arizona there Georgia there always going to be the Carol it’s different there is no separate division of government or or or
(1:02:57) laws that are specific to protect tenants and as I learned more even within the state different counties can have different rules for rental property so yeah you just need an experienced team yes you do and even hear within within like Georgia for example certain counties are are they’re more backed up than others or for tenant landlord issues so yeah it’s it’s still it’s still very area specific for sure yeah yeah so can we talk about Bitcoin sure I PEX predator in the room cuz I remember when I first met you
(1:03:30) you were the first person to introduce gold to me as an as the as a a store of value not as an investment I think people need to always understand that like like is that’s how is that still how you position Gold store of value I it’s losing it to me but yeah that’s what it was it’s losing it well if you just look at the ETFs that just came out the the gold ETFs are getting uh they’re losing um investment if you look at just the amount invested in Gold ETFs as the Bitcoin ETF that were’re just five or
(1:03:57) six weeks in they’re coming down in in uh the amount of Investments they’re holding and the Bitcoin one’s like exploding right so is that just partly a shift people are like to raise money for the Bitcoin they want to divest some gold I think so like a lot of investors to me if they were investing in gold they were probably in the store of value Camp because why else would you have gold unless you thought maybe it stores your value and then there’s a to me what’s a better store of value Bitcoin
(1:04:25) comes out and now I can buy as an ETF within my 401k if I’m in the US which I couldn’t until this year just a few weeks ago I’ll reallocate like I’ve seen the you know you look at the comand annual growth rate of of Bitcoin and as January 28th 2024 this year if you go back four years it’s 46% compound annual growth rate like that’s that’s you can’t deny that that’s an incredible growth rate so like if you a sophisticated investor just looking at numbers and you had your gold and you
(1:04:56) had it as a store of value and you consider Bitcoin a new store of value you’d probably want to reallocate some of your gold into Bitcoin and I was a big gold guy because of the store of value thing for sure um but the store of value like the history of money is that to me technology is constantly changing what money is and we are at this weird point in history where technology is in the middle of changing what a good money is again and most people won’t see it until 20 or 30 years pass and they’ll
(1:05:28) look back on this moment going oh my gosh like I guess Bitcoin really did do something interesting so business case is there for it now it does seem like we’re you know since came out in 2009 we’re now 2024 I remember I thought it was a tulip and it was going to die I remember when it went yeah I thought I would dismiss I’m like what is this garbage like I’m I’ll come out with the Rockstar coin how about that you know I just didn’t understand the characteristics of Bitcoin at all I didn’t understand that there was an
(1:05:55) asset a digital asset and that it was a network so I didn’t understand that Bitcoin was really two things in one um and I just dismissed it and then in 2020 is when I went down the rabbit hole and I freaked out and I realized I was wrong and uh started paying very close to it attention to it and now I can’t stop thinking about it because I I do believe it’s the Apex monetary predator and I do believe that it’s going to be a network that sucks in a lot of value and when Network effects begin they are very difficult to stop so by
(1:06:29) way of example I would share with you Voiceover IP Voiceover IP came across with tcpip or the internet and it almost destroyed the phone companies the phone companies as they exist today the mobile phone companies only exist because they sell data they’re not selling anymore like Bell’s not selling landlines anymore so this new network came in and uh destroyed an ex existing model and those businesses all had to change like dominant businesses with with all you’re talking about Bell Canada Rogers these
(1:07:03) companies all had freak out moments that had to change and um I just see it now happening on the monetary side that there’s a network an open- Source protocol it’s permissionless The Ledger on it is immutable um it’s changing things again where now the banking system is going to have its freakout moment as more and more monetary value gets sucked into to this network and to me it seems inevitable I know for many people that would sound like it’s crazy but to me it seems inevitable and that’s
(1:07:33) why it’s kind of captured my interest and then if you look at compound annual growth rates now with some history it’s just remarkable like it’s it’s kind of it it it makes you question like what are you investing in like why aren’t you paying more attention to this thing you know the whole Jour my own journey is like your life your terms you know we talked about Rockstar and stuff but really like I just want to live my life on my own terms and leave me alone mhm and that’s what got me into real estate
(1:07:59) now there’s this other thing that’s just kind of got my attention and you can’t stop thinking about it once you kind of go down the rabbit hole or when it’s dangerous it is dangerous suck you in it’s a Time suck yeah I don’t know you’re pretty you’re pretty good defending your time but that one’s that one’s probably a tough one that one’s tough especially now cuz I must be yeah like I must be thousands of hours in now so so yeah it’s it’s a tough one it’s a
(1:08:22) tough one yeah it’s actually one of the it’s sounds stupid I say it this way it’s one of my biggest disappointments of Co because the lockdowns meant that we couldn’t all be in the gym together yeah and then when I got back in the gym you guys were already like like a couple thousand dollar ahead of me on bitcoin I’m like I’m like f i i loost i i had all this opportunity cost I I could have made so much more money if not for Co I remember when I had my moment I was sitting in the office because our office
(1:08:54) was open but it was on lockdowns but we were legally allowed to be open and it was me and Nick and one other person the three of us and I had the moment where it all just made sense for me and I ran to Nick’s office and I’m like I was so wrong on bitcoin we have to get into this and you’re right it was just at that moment where none of us were hanging out together um and so I didn’t see you to like I was so when you had that moment it probably like I was like four months behind like in back corner
(1:09:18) had gone around yeah that was a pretty important four months yeah damn it so damn you okay it’s got a lot more to go every you’re good you’re good uh where can where was where’s a good starting point for anyone to learn about Bitcoin CU I you were the one that got me to read the Bitcoin standard by yeah I guess it just depends what your background is like yeah if you are into economics and money and you have a little bit of History um reading about that stuff the Bitcoin standard by safine amuse is probably the best start
(1:09:46) the first four chapters or 72 pages of that book laid down in a beautiful case uh for it if you want a shorter thing there’s uh a medium article by VJ boyapati and it’s called the bullish case for Bitcoin so if you just Google like the bullish case for Bitcoin VJ um you will find that Medium article he actually turned it into a book now as well but it’s it’s originally a medium article that is an easy read that lays out a wonderful description of what Bitcoin is both the digital asset and the network component of it and how to
(1:10:17) think about it so I think that would be like a really really good entry point into it and then of course Jeff Boo’s book really kind of connected the thoughts for me because he doesn’t talk about Bitcoin but in his book the price of tomorrow he starts outlining um technology productivity gains and how that works in a Fiat based debt-based money system and once you read that book it really connects a lot of things together and uh that that to me is if you’re not into the money side of Bitcoin but you just want to understand
(1:10:48) what’s going on in the world with technology yeah with technology Tech yeah that that would be a good read so if you’re a tech guy yeah me too but again it’s it’s more of like a macro book in general yeah totally y I think he us word this is why we get along yeah yeah for sure yeah macro understand macro you read this I think that’s why I like Bitcoin so much is like there’s just so many layers to it it just uh yeah it’s a remarkable thing like I really feel like fortunate to be able to be here at this moment in
(1:11:18) time for sure and Bitcoin standard I thought was a wonderful history lesson of nothing else even if you don’t like the Bitcoin orrect just history of money yeah it gives you like a context or a framework of how to think about things seashells yeah uh copper coins Stones silver how silver got killed by gold yeah stock to flow ratios how do they work yeah how and the the ultimate like you know there can only be one yeah there’s a line in that book it’s page the the top sentence on page 34 is this your Bible you have like all highlighted
(1:11:46) and yeah probably yeah I’ve read it a few times the top the top uh I think it’s there’s a new edition so it might not be page 34 anymore but page 34 the top sentence on that page basically the sentence uh the you know the idea behind the sentence is you can ignore Bitcoin but it’s at your own Peril because the hardest form of money always wins yeah so it’s like you can why I said there can only be one yeah so like you can choose to ignore Bitcoin and laugh it off but just know that your purchasing power in Bitcoin
(1:12:19) terms is dying over time so you can ignore it but you’re doing yourself an injustice at this to IGN it and we’re not saying load up no you should have some exposure yes everyone should have a little exposure yes you’re laughing you’re smiling at me yeah what whatever’s right for you have 2% 5% something I don’t know it’s just everyone’s different like like we said it’s like real estate everyone’s different what’s right for me is not right for you it’s not right for
(1:12:46) whoever’s listening it’s just you’re everyone’s on their own path you know so yeah yeah I’m I’m yeah I’m a I’m a bitcoiner now can we talk about marketing sure because part so again I told I told you I I like I study both how to make money and how people lose money so I I I dig into how these like recent bankruptcies I dig into I I research like what happened what did they do how did they raise all this money sorts of things so for example like the the folks who are in Northern Ontario who recently uh going
(1:13:23) through bankruptcy credit bankruptcy protection uh like for example it’s quite obvious just actually just a little bit of clicking that they for example they bought hundreds of thousands of Instagram followers oh jeez right okay so stuff like that and like to me like I’ve been around long enough to know when someone’s bought just when they have absurd numbers of of whatever followers I guess or or yeah or some even if someone even old old school is someone that had like an enormous email database but they didn’t build it
(1:13:53) themselves I know I know they bought it right this no different but you know ever since I’ve known you and then you introduced the world the world of Dan Kennedy to me which I greatly appreciate someone just recently complemented my Marketing Systems which awesome which I largely borrowed from yeah from yourself and and this fits into the whole your whole abundance mindset I don’t know if I said on the recording yet did I say on the recording yet like dreams so big that everyone else’s dream can fit
(1:14:19) within yours right because yeah you and Nick are incredibly transparent and everything you do is basically available to we try to be yeah yeah yeah and where was I going oh yes so I’ll just say like you guys seem to have done everything the right way you only have 20,000 Instagram followers yeah yeah I know how hard you have to worked for it you didn’t buy that no no and that’s largely my son who’s taking our content and doing stuff with it but yeah yeah no we didn’t buy it no and I don’t want too much too much attention
(1:14:53) on Instagram cuz just from my own experience my email database is what converts sure for sure yeah can we talk about that is that is that still where things are is that still is still building the email database is that still a priority or is it should you focus on your Tik Tok okay so when it comes to marketing the way I think about it is remember my life’s kind of motto is your life your terms I want to live my life in the way I want to live it and marketing so why we talk about real estate and that I’m a
(1:15:22) Believer in real estate is because the leverage of real estate gets me Financial gains that are enough that are going to allow me to live life or help me at least live life on my turns the reason we talked about Bitcoin is similar reasons the reason I like marketing so much is because if you understand marketing you can build a life on your terms because I found in business very few people know how to get a new customer they have an idea they can rent a place they can create letterhead they can create a website so
(1:15:52) if you understand the principles of marketing you are like going to do what really well in whatever business you’re going to open whether it’s a car wash a restaurant or real estate investor and the principles of a marketing are to your email question to build a database of people that have in some way shape or form raised their hand and identified themselves as someone that’s kind of sort of interested in you and what you have to offer and the best way for me to get people to raise their hand and
(1:16:20) identify themselves is by getting them to share their email address with you so yeah to answer your question email is still amazing because you own the email address on Instagram Twitter Youtube Tik Tok those companies control the users that are subscribed or are following you whereas an email you own that email address so you get to email it you have to might be fight with a CRM system to like get your email out and there’s like spam complaints and different things if you’re doing it incorrectly But
(1:16:49) ultimately you own the email that’s a very powerful thing to me in business the relationship that you have have with your database is the most valuable thing you can have because there’s going to be some people who love Irwin and what Irwin talks about so much that it doesn’t matter if irn goes and starts a business that’s you know you can go start a restaurant tomorrow but you’ve established a relationship with the people they trust you and if you’re going to start a restaurant they’re
(1:17:15) going to come and eat at your restaurant because of who you are and what you represent to them so the a business owner’s relationship with their database is the number one asset that they can have it’s not the office space they’re in it’s not the name of their company it’s that and so few people understand that and an email address is the best way to build it then you can layer in physical mailing addresses phone numbers if you want to start texting people you can start doing all these weird weird
(1:17:40) and wonderful things but email is an absolutely critical way it is the best thing to be building because if you get shut down of Instagram you’re still going to have your email addresses or when uh musically when that went down I remember that was a huge such not a music guy but sure okay I believe you was but then was was what was Tik Tok before musically was sorry was Tik Tok musically before I think that’s what happened I think what that but then all these influencers they’ve lost their million subscribers or whatever yeah and
(1:18:11) then it’s on you once you have a database the onus is on you to prove to prove that you are sharing valuable information like if everyone just sped out to your email list garbage people are eventually just going to unsubscribe and you’re gone so like now I like that relationship share part it’s like oh the onus is on me the business owner to share such good value that people are going to keep interest in me and then every once in a while you’re going to ask to do business and because you consistently offer good value people are
(1:18:38) eventually going to come to trust you and with trust they’re going to come to like you and when you make an offer to do business with you some people are going to raise their hands and say I’ll take the next step and I’ll proceed to do business with you and it’s just to me the most wonderful way to do business is that build a database of people who are in your topic or area of expertise offer a lot of value follow up consistent consistently with that comes trust and the uh the person who’s reading your
(1:19:05) information or following you they’re going to like you then the ultimate sale is easier so it’s it’s just like a beautiful thing and to me marketing once you understand the principles of marketing you can go to Texas tomorrow use the exact same principles that you’re doing Irwin here in Ontario to build what you want to do in Texas and it’s going to work M just like real estate has principles to it marketing is going to have principles to it so it’s total freedom like it’s it’s it’s the
(1:19:31) biggest thing and nobody believes me and understands it and it seems like in the real estate World everyone just runs around on Instagram trying to get followers and everyone just yeah it it just seems like everybody you know what I guess the way to look at it is there are principles to anything there are strategies and tactics and in the marketing world everybody plays with the tactics everybody does like the quick new thing on Instagram that’s a tactic the quick new thing on Tik Tok that’s a tactic the quick new thing on Twitter
(1:19:59) it’s a tactic very few people have a strategy around their marketing and very few people understand the principles of what they’re doing and I think what Nick and I have done over the years is we tried to understand the principles of what works in marketing then Implement a strategy for it and only then choose the tactics we’re going to use in that strategic implementation I think the I think that where people most fail is like anything we like we call it the content treadmill yeah like the regular communication with your email
(1:20:29) database minimum a week yeah uh I think we’re two I think you guys are like three times a week and that’s that is the content trial you have to keep MH keep in touch with your database and then some some of these people you call as well so like oh that’s work like yes it is work but this is how you get results yeah it’s called sales yeah if you have a business like if I had a Subway sandwich shop that was next to subway station that was was really busy I probably didn’t have to do the content
(1:20:57) Triad Mill because people are going to be walking by every day and some of them are going to be hungry and they’re going to sell them a sub that’s something corporate has done your marketing for you yeah there’s that there’s that to yeah so but let me but even if I wasn’t to go to the corporate level if I was just a noname sandwich shop in front of a busy place I’m going to get some business but when you’re a service-based c uh company and you don’t have potential customers walking by your
(1:21:20) physical location well then you better be doing something to get attention and that’s why you have to produce content so you do a really good job at this you’re putting out emails and podcast I know you are in videos and you’re hosting class and you’re doing all these wonderful things and that’s how you get people to see what you’re doing so it is a Content treadmill in business especially service based businesses but there’s no really other way to get people to kind of walk by your store
(1:21:45) unless you’re putting out content if you’re putting out content you have people kind of walking by your store just virtually mhm you know so yeah it’s tough but I mean the opportunity for anyone listening who does the content is incredible because no one’s really doing it yeah everyone’s just kind of like half people can’t stay with this no like how many podcasters we know just even our in our friends group who haven’t made it past a year yeah let alone six months yeah yeah are there a bunch yeah
(1:22:14) I don’t even track yeah yeah but I guess that makes sense people start and then kind of give up on it yeah and that’s where there’s a there’s a time and place for giving up but those who can or just even just keep like keep shifting like for example no no different than my my investment Journey like it started with single families did some non-conforming multies and then the city was cracking down so then we went to student rental because we could get it done pretty easily and we can conform with all with
(1:22:39) all bylaws and whatnot and then duplexes CU like oh because student rentals the financing was difficult so then legal duplexes oh completely clean for financing then do that and then like oh do is cash flow enough oh we got a garden Suite now right so but again sticking with you got to roll with the punches yes yeah and then but I’ve been punched too hard so I’m going going south yeah yeah well you’re just changing your approach and I’m sure there’s listen there’s going to be punches for you in Texas
(1:23:05) let’s face it it’s like real estate like there’s always punches I mean no worse guns yeah yeah yeah I never really thought about that we were talking about it earlier yeah I don’t know I’m not too scared of the guns you brought up the guns in Texas I don’t know I’ve researched it too much you dig into Vic I dig into my personal safety okay I do have to admit the last time I was in Florida I Hon the horn at somebody and I just then I remembered I was in Florida I’m like holy [ __ ] duck I don’t know
(1:23:30) what’s going to happen but uh they have a gun in their cuz when I was in Texas like I did not see anyone carrying a gun law enforcement so I was thinking I was thinking about it like if it was me it be such a hindrance to like to like wake up every morning and Holster up or whatever and then like there’s all these private businesses that don’t allow open carry right so you can’t you’re not supposed to carry the gun and so so yeah I guess everyone’s gun is in their glove box I guess I remember going into a
(1:23:55) restaurant long time ago at a marketing conference in Scottsdale Arizona and the restaurant said I I don’t know if that’s a conceal in K State or whatever you call it but the restaurant the entrance said this is a like a No Gun Zone please leave your guns like in the car or at home or not in the restaurant and I’m like this is wild I’ve never seen this kind of sign as you enter a restaurant before so uh I guess I guess in that state maybe you can have concealed weapons on you um recently I was
(1:24:23) somewhere was it last year I was in Arizona maybe it was in Arizona I saw somebody holstering a gun walking around but uh yeah different uh we we need to talk about the conference your sorry your member event it’s not even really a member event because you do allow Outsiders yeah we kind of usually have like about 50 to 100 tickets for people who aren’t clients of ours so not many no yeah no um so it’s uh yeah it sounds like a lot to some people but there’s sometimes over a thousand people yeah
(1:24:49) last time was our biggest one we hit 1100 people um this started you like this started with our account you know how this like started with our accountant who would come out and just talk about like a tax tips for Real Estate Investors and someone was like can you do that again and it just rolled um so it started with 50 or 60 people at the Holiday Inn in the basement of the Holiday Inn at Bronte in qw in Oakville but anyway uh yeah Saturday April 6 will be the next one we haven’t released the the um speakers yet but um there’s going
(1:25:15) to be a thousand people there and the sponsors are always uh great people and uh yeah because you don’t let anyone sponsor I know yeah yeah yeah yeah it’s it’s yeah we kind of are a bit chosy on that and uh yeah it’s fun so the next one’s Saturday April 6th and if you’re following us in any capacity you’ll hear about it because we make a big uh Big Show about it um and yeah we’re excited for it it’s nice to get everyone together it’s like you know how it is with Real Estate Investors we don’t all
(1:25:40) get together it’s not like going to the gym every day where you cross path with people or the your favorite restaurant you see the it’s a bit of a reunion where we can all sometimes just commiserate like about interest rates and like the tenant board and sometimes it’s like a support network you know when things are going great you’re cheering and when things aren’t going the best you’re kind of just supporting each other so to me it’s an important event and uh we have fun with it you know last time we had Jeff Booth
(1:26:05) out there that was a really good talk and uh this time I I think we have some great people and uh I’m just not going to share just because we haven’t put it out yet but yeah Saturday April 6th you’ll hear about it yeah if anyone enjoyed this podcast for example like what we just talked about today you’ll do basically in a longer format that day we’ll talk about macro I’m sure we’re going to talk about Bitcoin yeah we’re going to talk about development or like yeah we’re going to dive into the
(1:26:28) Ontario Market pretty deep this time yeah and also very micro level you’re talking about specific markets correct like what specific rental properties are doing correct right you get you know go from the again you go from like the global all the way down to the property right yeah numbers profile neighborhood yeah right yeah and I think we like to have fun with it I think this this this time the theme is going to be Indiana Jones last time Matrix is it I haven’t seen anything yet I can’t wait not yet
(1:26:52) we haven’t released anything but Anthony on the team has an old motorcycle that kind of remind us of an Indiana Jones kind of motorcycle so we think we’re going to try and tell the hall that it’s not operating even though it totally is and it’s just a prop we’re going to try and bring the motorcycle to the event I want to see you Nick crack the whip on stage I want to hear it from the back of the room like oh my God yeah yeah yeah we’ll have some fun with we are ordering some whips and some Indiana Jones hats for
(1:27:17) those are toy ones I want to see a real I don’t know is it a bull whip I I want to hear it I want to see someone crack it on stage even better if you have a Target to hit with like a oh man and everyone I just want to thank you like thank you for supporting us and being part of this you know Journey you’ve uh you know you you came on um and have done your own thing in an incredible way so it’s been awesome for us to watch what you’ve done as well so congratulations on everything you’ve done and it’ll be uh when you’re the
(1:27:45) mayor of Austin or San Antonio or whatever you’re going to have to let us know I don’t want to get shot at but you guys took a flyer on me because I don’t think I’ve mentioned that in a long time cuz uh at the time I was the only person to join the team who was not a member mhm yeah yeah wow really was that the case and I think I’m the only one that’s worked out yeah maybe anyone else is it CU actually it’s a rule it’s a rule now you may not join the team unless you’re a member yeah we
(1:28:09) have some people on the team that have been friends of mine uh that have joined Rockstar now over the years that’s different you didn’t know me yeah no we didn’t yeah yeah yeah you’re right you might be the only one irn yeah set the president set yeah cuz again like many people didn’t stay I think almost nobody stayed so yeah I probably G gave the wrong expectation let’s let everybody else in oh my God this is terrible it’s not a numbers game no yeah yeah y yeah we’re kind of choosy who we yeah we’re not a
(1:28:42) bro Rockstar is not a brokerage that is looking to attract a lot of Agents we’re kind of consider ourselves a boutique place that’s doing a pretty specific activity and um yeah and certain people fit into it and certain people don’t but we’re not trying to get like a million real estate agents that’s like the last thing we want right we’re really trying to work with investors and and you know build something and we’re not just trying to talk about real estate we’re trying to talk about all aspects of Life how to
(1:29:09) make it all work yeah and it’s a complicated business and there’s lots of rules and stuff we have to follow I can’t imagine having to hurt all these cats and lots of personalities yeah lot personality Tom I like to give my guess always the final word like anything in general you want to say anything anything don’t e just don’t say don’t eat the ell you know what you saying that you you mentioned something about dreaming big and stuff earlier I somebody had a big impact on me once I was a author and then I I um and I
(1:29:39) forget the name of the book and uh in the book it basically said if you want to have a big impact in your life then you need to impact your community and if you want to have a big impact on your community you need to have an impact on your Province and if you want to have an impact on your Province you need to have an impact on the whole country basically saying that like if you really wanted to leave a lasting impact of what you’re doing you have to think bigger and Beyond yourself one level higher and
(1:30:16) it’s kind of always stuck with me like what can we do as a business or in life with my relationships where I can impact people Beyond me directly and it’s just something we try to live by by doing different little things and it might sound cheesy but to me it’s like you know we’re trying to impact people and we’re trying to do it at a level that’s beyond us and it’s forcing us to think a little bit big in our small little business we are trying to think big you know so it’s something that stuck with
(1:30:46) me yeah I think you had a lot of impact yeah you probably have a couple hundred million years in your among your clientele like so that’s that’s like how many people can say that yeah yeah yeah but thanks everyn appreciate it man thank you thank you thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.com my guests and if you’re
(1:31:25) just starting out feel free to ask questions and comment below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor tr.com

** Transcript Auto-Generated**

(00:00) greetings everyone I just returned from a trip to Calgary to meet up with some clients real estate investor friends Cal mortgages and attend a friends wedding in Calgary and Canmore Alberta welcome to the truth about real estate investing show for Canadians my name is Irwin I am a Canadian host and producer of this show since 2016 300 plus episodes that’s and they’re all over an hour long over 440 million in investment real estate transactions uh as I my team and I are the four time real for the year two
(00:30) investors in Ontario Real Estate presently I have 45 millionaire clients U that’s millionaire and multi-millionaire real estate investor clients and I’d like to get that number up to 200 within 10 years I’d also like to have dozens and dozens of clients who cash flow over six figures a year uh again I just recently returned and canmore and B are so beautiful Lake Louise Shad out Lake Louise if I couldn’t live in BCR or Ontario like like most Canadians I’d probably end up in Calgary as I like the vibe the mountain views
(01:02) are they’re always there and they’re incredible people are nice world class G is only two hours away uh now apologies to my uh Edmonton bull friends and Edmonton edmontonians admittedly I’ve never been uh but uh you Edmonton bullish people need to really talk to your friends in Calgary as they don’t seem to have many nice things to say about about the about living in Edmonton maybe it’s a hockey rival rivalry thing uh apologies for their ignorance I just Google mapped it I had no idea that M
(01:34) antonians have to drive through Calgary to get to banned for Lake Louise or Canmore uh investment wise no I’m not interested in Calgary Edmonton uh the stuff is pricey holy cow and then forget camore where where I met with an old friend who is a city counselor in Canmore and he he informed me that the average house price in camar is $1.
(01:55) 4 million Canadian uh and also I was speaking to a Garian and Ryan day of Calbert home mortgages uh when we compare numbers uh he was sharing how he recently uh acquired a duplex with the gar detach garage and his combined rent uh the rent to price ratio uh is the same as I can get in the US on a single family home so I have less tenants and again I have the same rent to price ratio um and also for for those who already own multi Family Properties like including duplexes or triplexes ask any one of those investors if you don’t ask
(02:33) anyone of those in any one of those investors uh because aside from how expensive it can be to renovate a base a basement apartment uh I heard from a GTA contractor just yesterday who came into Rockstar real estate to uh to share about his Services the estimate uh including the permit time and the execution of the renovation you’re looking at 5 to 7 months so you’re 5 to 7 months with the V vacant uh assuming everything goes on time and uh the budget should be around $130,000 just for the renovation that doesn’t does not
(03:04) include carrying costs and again that’s assuming everything goes smoothly and we’re also talking about a house that’s probably at least 70 years old uh in my experience uh tenants so again I’ve done a lot of duplexes I have a good number of them in my own portfolio so in my experience tenants do fight uh that’s natural this this human behavior there’s noise transfer there’s smell transfer I had this one tenant complain about uh every time the basement tenant was smoking weed in the backyard now the
(03:35) tenant has a right to smoke in has a right to smoke weed he was actually smoking weed in the shed in the backyard yet my main floor tenant always complained about it anyways I’m looking to simplify I’m on a different Journey the most which is totally cool everyone has to go on their own Journey I’m looking to earn US dollars because US dollars are better than Canadian dollars if you don’t believe me just look at the amount of debt our country is taking on compared to the Americans Americans take
(03:58) on lots of debt too the Canadians are just especially good at it in terms I’m talking about government anyways I’m looking to make my investment more passive and as passive as possible with as little risk as possible I’m also making plans to fly out to Atlanta with cherry to Vacation post tax season we’re going to check out some properties we’re going to make it make this road trip we’re going to drive up to through Chattanooga through the lookout mountains we’re going to make a stop in
(04:22) Nashville of course uh and continue on our way to Memphis along the way we’re going to hit some serious iconic attractions like look up Mountain that I mentioned which is in Chattanooga which is on the border of Tennessee and Georgia we’re going to visit the Coca-Cola Museum and of course you know when you’re when in Rome the whole thing we’re going to visit graceand Jerry and I aren’t Elvis fans but again when in Rome you got to check out the the the home of Elvis Presley anyways tax season
(04:50) ends April 30th and that’s when I that’s when I joking jokingly say I get my wife back we sold uh we sold one of our student rentals which closes May 6 hence we’ll be shopping in May for a new income property or two while on our trip I had have I I’ve had or have three listings of income properties at the moment all the different stages and we’ll I’ll update you next week on what I’m seeing in the market on the ground and uh it’ll likely surprise you on to this week’s show someone who’s polar
(05:21) opposite to myself I like lazy investing we have uh a fully involved active investing investor uh including having executed on 150 or some deals in 2023 so 150 deals so that’s like almost that’s almost a deal every other day basically and that includes 50 flips that’s 5- Z and this is this is luk Luke boy wrong who is as far as everyone knows is legit he’s not one of these uh fake gurus out there Luke lives in Ottawa yet he has flips as far as way a far as away far away as Vancouver and while flips are sexy
(05:58) people love to watch them on TV or take coures on Flipping well I’m sorry I’m I’m sorry not sorry that we have Luke to share the behind the scenes on why he’s flipping and it’s not what you expect Luke is the founder of bliss realy former lawyer he also has his NBA smart dude obviously one of he’s one of Canada’s leading investors he has a massive team around 30 people and he has an even more massive advertising budget but don’t worry L going to tell you how he would start how he would start uh his
(06:29) business over if he was a brand new investor today so again he’s a legit investor and he even has some stories about fake it to make it investors who failed to close on buying wholesale deals from him so listeners never forget the community is a very small one we all talk we know who is who is fake it till you make it and we know which uh we know who the gurus are who are fake it till you make it and where they learn those strategies from so as the Warren Buffett says it takes 20 years to build a reputation and five minutes to ruin it
(07:00) if you think about that you’ll do things differently Luke also recently launched his podcast the selfwealth real estate podcast available on Apple podcast and my favorite platform Spotify again it’s called self wealth real estate podcast please enjoy the show Hi l what’s keeping you busy these days uh a lot of flipping houses a lot of Renovations going on that’s what’s keeping me busy that’s interesting because uh from what I know of you is uh you do a lot of wholesaling and now sounds like your mark business has done
(07:36) a pivot yes yeah uh basically our buyers a lot of our buyers stopped buying flips so we started buying them ourselves if they made sense to flip and started flipping them ourselves um you know we had about 35 employees in the business and if we were just relying on the wholesaling we would have had to drastically shink uh shrink our company and get rid of a bunch of people and we didn’t want to do that we have a really good team so we kept uh we kept our team and decided to Pivot switch into flipping and now we’re he we’re flipping
(08:06) heavily um we’re still wholesaling I think uh I think 2023 we did something a little over 150 deals in the year um sorry just wholesaling or flips combined so about 50 something flips I think I don’t have the exact numbers in front of me but I thought it was more 5050 but I guess I guess what really happens the wholesale deals are also much smaller deal smaller assignment fees um whereas the flips are well some of them take a lot more time uh bigger projects for sure fascinating and but like your staff
(08:42) though like wholesaling and flipping are really different businesses like did your fli your your St your in office staff now got strap on tool belts and start hanging drywall like what no no I mean and when I say 30-some plays that’s without contractors we actually have in our Ottawa brand we have two contractors and a construction manager and Ottawa is like our best flipping Market we flip a lot in Ottawa um and that’s partially because we have the team here and I also live in Ottawa now so I go see the job sites and
(09:14) things like that and the price point makes a lot of sense for flips so we flip a lot in Ottawa and uh yeah and then a couple other people who had different roles like one of our we call them closing concers like a transaction coordinator became a project manager for us so um the way the way I run the flips is I have my construction manager in Ottawa and then I have two project managers that are kind of like assistants to me and so they coordinate with all the contractors and and the details they know the finishes we want to use and any
(09:42) questions they have from contractors they they either Loop me into the call or they relay the questions to me to get answered and then uh so they’re kind of extensions of me to get these Renos done and and that’s how we we manage about 20 flips at a time yeah in different phases uh how many of those those are local versus across the country um I would say a a little less than half are in Ottawa probably about a third are local uh 30 40% and then a good amount in um in the greater Toronto area but that that range is a decent
(10:18) amount I mean we’ve done when I say Toronto for us it’s everywhere from you know Hamilton Niagara region Kitchener uh Stratford North Bay Midland aelia these are all flips we’ve done this year Peter bro Lindsay so those are uh Bowmanville those are all stuff we’ve done this year so it’s a pretty wide area that we cover that way um and then we have uh a few flips going on in Vancouver um and occasionally stuff out in Montreal as well those are I find it much harder to do the stuff in Vancouver in Montreal
(10:54) just um Vancouver in particular we just aren’t set up well for the flips and the distance makes it too hard for for us to check out easily we have you know a couple on the ground team for our acquisition like for a wholesaling business but it’s we’re not set up to flip well there so um I would say our Renos took way too long on the last couple projects there and the next ones we do we’re going to do much only focus on ones that are smaller Renos just the difficulty to manage Renos at a distance
(11:22) can sometimes be a little too hard so it’s more the distance than say like learning curve or like mature m maturing of the team there’s um an accountability aspect that if you’re not showing up regularly makes it harder in Ottawa and this might be Overkill but our construction manager basically drives from job to job all day so um you know he’ll he’ll visit every job site at least a couple times a week that we have ongoing in the auto area and that kind of keeps accountability going it also allows you
(11:54) to catch stuff ahead of time and um and this is it it’s a bit of a management error I would say on our side but there’s also an element where it’s kind of out of sight out of mind if you’re not I don’t know for some reason both myself and the project manager in charge of it it doesn’t we don’t prioritize it mentally as much the Vancouver job sites and so we’re not as on top of the contractor to make sure they’re showing up every day and everything’s happening the way it should
(12:22) so I would say other people could manage at a distance better than we did um especially because we do have some two people locally who can check in on the job site if we wanted them to um plus we have a really great realtor we work with in Vancouver um who obviously lists all of our properties and also we’ll check in on them whenever we ask her so um I think we could do a better job of it but we haven’t been so um kind of acknowledging we have some weaknesses and instead of trying to fix them where we’re not uh it’s more balancing how we
(12:56) operate to make sure they’re not going to be it’s not going to be it’s not going to affect us negatively in the future so thank you for raising that uh sharing your experience and and doing heavy construction like maybe that’s not return but active construction whatever it is because my advice to my clients is if you’re doing a major Rena even if it’s like a kitchen redo bathroom floor like that’s going to be a couple weeks and I’m sure it’s faster for you but like for example like a basement
(13:27) apartment that can be that can be months for example and so my advice my clients is someone needs to show up at least once a week and almost all my clients resist but your experience is the more often you show up the better absolutely at least once a week on an active because I’ve seen basement apartments take a year two years right it’s uh you get excuses from a contractor you’re waiting on you know I don’t know the architect hasn’t done the drawings they’re dragging things out you need to
(13:55) find a new architect you bring in this contractor they’re blaming delay on the plumber etc etc and just time disappears and time is money especially if you’re carrying something on like a private mortgage to get those Renos done really costs money so you have to be really on the ball with your Renos and I mean one of the nice things is if you’re showing up several times a week to the job site and the contractor is not there you f figure out pretty quick you need to fire them and move on to the next one right
(14:21) like they’re not there once like oh yeah well I gave you a heads up that we were going to be off this week for this reason okay perfect so you’re there all of next week great show up next week they’re there hey what’s going on Cu uh this isn’t working because they will not volunteer information that they’re not there yeah and it helps to put up cameras too um we’re not religious with doing this very well but we we use uh a combination of wise cams which are pretty cheap you can put in the memory
(14:45) card in them um so you can watch the playback without subscribing um with uh I mean on a longer Renault it’s actually worth paying for internet but we often use like SIM card internets with I think it’s called a rocket Hub or something like that so it’s a wireless mod we put a tablet SIM card in it and then um it’s enough data you know four to 10 gigs a month it’s enough data to uh to be able to put up a camera or two on the job site so it helps for you know protection of tools and break-ins and
(15:14) things like that but it also you know you’re pointing at the driveway you know when the contractor shows up right yeah yeah I have friends who would uh they they pay a neighbor to be able to put a camera on their property steal borrow their internet to put train the put the camera on their yeah absolutely and then um and then they they catch people stealing materials from their site for example y so yeah good good Pro good Pro tip for the listeners benefit uh now Luke before we’re recording um like you’re probably one of the biggest in
(15:47) wholesaling definitely wholesaling for sure in in Canada um and and before we’re recording I asked you how’s business can can you share how how’s business we’re recording in January by the way 2024 yeah um I mean it’s uh I think everyone’s hurting in the industry we we like I was saying earlier we have a big team we’re basically flipping to pay the bills and stay in the black we’re not we’re not trying to make uh make a bunch of money uh though I am optimistic we’re we should be making
(16:17) money in 2024 um but uh it’s nothing like obviously 2022 2021 it’s nothing like those years where the market was crazy hot um because we have the overhead we have plus uh buyers aren’t buying the wholesale deals so our margins get thinner we sell fewer of the deals and then we need to flip which takes a lot longer um to uh to get the money out of a deal right so to carry these properties now too yes absolutely and then you know obviously there’s a reason why we were wholesaling instead of flipping was you know you
(16:51) don’t have all the transaction costs uh on the front and back end of the deal so uh the flips have to make a lot of sense so you know your property tax bill must be enormous sorry your your like you mentioned Toronto Toronto has double double the land transfer tax yeah land transfer yeah every time um actually a little does Vancouver have anything like that yes they do oh God no but it’s not sorry it’s not I don’t think it’s double I’m trying to think I don’t think it’s double uh which is good actually I I
(17:23) interrupted you sorry no no no and well I was going to say one of the nice things Vancouver is they have a different structure for realtors and the way they price things um again you know typic whatever you expect is typical but they typically charge something like 7% on the first $100,000 sale price and then two and a half% thereafter total this is for both sides so it’s it kind of makes them you know hey we have to fill out the paperwork we have to create the listing we get you know more early on in at the for the just for creating
(17:56) the listing we get more on the first 100 000 so if you’re listing a $200,000 house versus you know whatever like it it doesn’t make as big of a difference in the sale price so when you’re listing Vancouver is an expensive Market when you’re listing a house for you know a million and a half um it actually costs a lot less of commission than it would in the GTA and I’ll just add to that though like people are free to negotiate I do believe that structure is legal in Ontario as well I’m not a lawyer I
(18:22) haven’t looked that I know you’re a lawyer but I I should probably look that up after this show if if because I’m pretty sure that that commission structure is legal in Ontario as well yes the question is how do you offer it to because the other in in Ontario depending on the city you’re in the buyer side agent’s expecting between two and two and a half percent whatever’s the norm in the market you try to undercut that they may not even show the property I know that’s the reality of
(18:48) the market yeah the reality is they may not even show it so I always pay the buyer agent whatever going rate is in that market and there are some markets where it’s 2% there somewh it’s two and a quar normal some two and a half so we pay whatever is normal in the market but um that means in Vancouver it means we’re paying about three and a half on the first 100,000 and about one and a quarter on the next on everything thereafter to the buyer side which is a just an interesting structure and I didn’t realize that you know uh going
(19:17) into that market in the first place which is nice and uh yeah I just add to that that comment it’s a with technology and I think we have like 70 or 90,000 registered agents on the Toronto real estate board alone like you would think prices would come down like commission like total the commission total commission number would come down so you would think but the result is instead the marketing spend for realtor goes up right Realtors just instead of bringing their commission down they spend more on marketing is what I
(19:52) usually see because they make so much when you do get a good client right or or get a full a listing with a full commission you do make um such a large amount that instead of cutting down what you’re going to make you just find more I find you typically Realtors find more clients but a good realtor is worth their weight in gold and from someone who does a lot of volume thank you for the kind words now I want to move on to um we’re like you mentioned how it’s tough times for many people and you and I were
(20:22) discussing before we started recording how uh there’s a lot of people who are talented and are having a tough time and uh just like yourself uh I don’t think you’re having as tough time as many a lot of people we know uh but I was saying how um like if you’re talented and you’re hardworking survive this period and you will Thrive over the long term what what what do you think about that oh absolutely and you know what the biggest difficulty for my company if we’re talking about that is just the size
(20:54) right I have 35 employees of overhead to pay we have you know High marketing budget Systems Technology we have big overhead to pay if it was just me then I would just do fewer deals but you know i’ make a little less money but you’re not worried about I I would say kind of um making sure you’re not losing money right overall or not losing a lot if you’re you can cherry pick right now you can be a lot more cautious as an individual investor but you can still do deals there’s still ways like there’s still opportunities I
(21:26) mean with Bill 23 with three units going in some cities allowing four or more um I find there’s still opportunities in this market to even get into the rental space right now um I just got final occupancy on a Triplex conversion in Ottawa um you know I built I finished a Coach House in 2023 as well in Ottawa so there’s definitely ways to I think uh to continue getting good properties now because you don’t have the same competition I mean we were almost almost exclusively wholesaling for a while there and then when the market shifted
(22:02) we started buying not only our own deals to flip we started flipping other wholesalers deals because we’re like hey if people aren’t buying our deals then they’re not buying anyone else’s deals either so there’s good deals out there let me go buy them to flip and we started doing that um and we bought off the MLS in this market a lot of stuff still sells well on the MLS but there’s still opportunities on the MLS to buy um more than there was before because the difference was I found it was very very hard let’s
(22:32) say at the beginning of 2022 to find a deal that made sense to flip on the MLS because there’s so much competition there was so much interest you were really really looking for an absolute needle in a hyack now properties are sitting a little more you have more opportunities to negotiate to find better deals um it still takes work but you know there’s always when I started flipping when I started my business my first couple deals I would say were listed poorly or incorrectly and I bought them off the MLS and that’s where I made uh that’s
(23:03) where I started off with flipping so I think there’s more opportunity to do that now than there has been in a long time so yeah I think there’s a lot of opportunity out there right now but it makes sense to be cautious as you do it and if you’re just an individual or you have one assistant or something like that you don’t have this big overhead to worry about so you can wait for the right opportunity you’re not rushing out there to uh you don’t have to be a Rive right now and I think that is also a strength which
(23:31) means you’ll have your reserves you’ll be in a good position as the market recovers which I really think it is going to be recovering well in 2024 right that actually going be my next question is you’re seeing opportunity now how do you think it’s going to play for the rest of the year I’m I’m seeing a I think there’s a lot of this comes down to buyer sentiment both on the investor side and the retail side um I used to sell all of my flips in multiple offers but with buyer sentiment changing buyers don’t
(23:59) want to compete and um and so it didn’t make sense to sell things in multiple offers and it hasn’t for you know a year and a half now um or more than a year and a half now but uh you’re starting to see a lot of people who think the spring market so we’re we’re recording this in beginning mid January of 2024 we’re we’re starting to see a lot of people thinking that the spring Market’s going to pick up and some people are thinking well if the Market’s going to pick up now is the
(24:29) time to buy so I just listed a property three days ago um in Ottawa in a very good area of Ottawa that I ended up spending this was a fire damaged house or smoke damaged there was a a fire that started in the basement smoke went everywhere so I did quite a bit of renovations to this house like extensive and it’s really beautiful um if anyone’s seen it on on my my Instagram it’s the one where like I took uh these vintage uh I I like the design stuff it excites me I took these vintage um National Geographic Magazines that I found in
(25:04) another flip and I cut out like all the interesting bright colorful pictures from them and I glued them onto the wall as an accent wall in a powder room um so that one that one’s uh oh wait you did it personally no uh I was there with my construction manager and his girlfriend we all went like select it yeah I Instagram uh Luke self wealth that’s right yes l Sor L I’m it’s right in front of me but I said spel it wrong Luke luk is Lu there’s no um I don’t know how else you spell Luke oh LK
(25:41) is the other popular yeah yeah it’s the French way of spelling Luke my family’s French so there you go um but so we did a beautiful Renault to it and it’s in a very desirable area of Ottawa with not much like there’s actually only one other listing in that neighborhood and it’s sold conditional so there’s nothing on the market I would like to to get into the eights and so I said well let’s be a little aggressive with this let’s see what happens and we listed for 500,000 three days ago and I’ve have 111
(26:11) showings booked so far in three days that’s wonderful yeah in this market right so who knows I’ve gotten a few was 111 showings show us that there’s buyers out there for the right product in the right area there’s buyers out there I have some rural listings right now I wouldn’t put those in mult and try to do multiple offers in a rural listing they they need the right exposure one’s on 10 acres one’s on Seven Acres they need the right exposure on the market it takes longer but the right product in
(26:46) the right area I’m seeing that there’s clearly demand for that product and as people are worried that prices are going to go up this spring you’re starting to see buyers coming into the market now let me snap this up before prices jump this spring so I’m optimistic things go are going to go well we’ll see how uh how inflation holds and how that affects interest rates but um people are optimistic that we’re going to see some interest rate Cuts this year and if that start happening I think the Market’s
(27:17) going to recover well enough I mean we’re not we’re not talking early 2022 kind of craziness but um I’m expecting to see some positive people craw coming back to the market slowly that because people have really been sitting on the sidelines especially investors as they see the opportunity okay interest rates are starting to fall if I buy a bur now I can get a good price on the product when I refinance I’m gonna rates are going to be lower so if they’re judging the market right that can be a
(27:45) good opportunity to get in sooner and uh and then um do better than you’d expect if you were buying when the Market’s already recovered you’re going to be paying a lot more MH yeah with the bond market coming down already we’re receiving cheaper fix rates right uh and the good friend of mine who is an agent downtown Toronto he told me it’s nuts for houses in downtown Toronto not condos because uh good I’m doing a flip in downtown Toronto right now so and you so you pay the double land transfer tax your buy be
(28:18) the double land transfer tax so he was telling me about a property it was listed way low 750 and it drew 25 offers and it ended up selling for almost 300,000 over uh so my money is on you getting at least a dozen offers um I’m hoping so I’m thinking and that’s the thing if I get a dozen offers I’m taking an offer um there’s no way that I get a dozen offers and I think oh I Can Do Better waiting there’s no way if I get two offers and I don’t like the best offer then I may you know cancel and
(28:52) realist at at around where I want to be but if I get you know 10 12 offers on offer day there’s no way that that’s not the best I’m going to do so I will be taking whatever the best is at that point now again as a professional investor would you get this many showings if your property was tenanted no as nice as it is my poor tenants I mean we’re talking this is backtack showings constantly they’re double booking uh time blocks and stuff like that so the poor tenants would be driven insane yeah
(29:28) yeah I I just want to throw in there that the it’s almost as if it if a property is tenanted it’s almost a stigma against the property yeah and then like I would say where a lot of my rentals are when I’m you know and I’m talking like bungalows in Ottawa or things like that or condo tow houses um I would expect them to sell for almost 50,000 less tenanted I would expect that because the unless it’s a very sorry unless it’s like made for investors as a product then at that point the fact that it’s
(29:57) it’s a rental is fine but if even as a duplex your best buyer and it may not be a full 50,000 discount on a duplex for tenanted but your best buyer may be someone who wants to live upstairs and rent at the basement right so having the upstairs vacant would be and and honestly getting good rent in the basement with the upstairs vacant is probably the best way to sell a duplex of um in my opinion but yeah if it’s just a single family rental some of mine are uh yeah you’re GNA do way worse with a tenant in there a friend of mine bought
(30:33) a a duplex in downtown Toronto and he asked me what should do what should you do with the basement he’s going to live in the main floor he’s going to house hack I said absolutely don’t rent it to a long-term tenant you’re living in it you were allowed to short ter rental so that way you you know you avoid the RTA the LTB right yeah and in some ways it’s almost better to not have bought a legal duplex in that way because then you’re renting just part of your house um from because you’re living upstairs if it’s
(31:01) uh an in-law suite yeah even if it has a separate entrance you you’re essentially renting part of your house and now it’s you know you’re not you’re not having issues with the Airbnb rules in Toronto yeah I would think yeah I don’t have any in Toronto I don’t either I just don’t have enough friends who’ve had nightmare stories with could you just imagine like you’re renting at the basement of your home say you live there and you rent at the basement of your home and the Tenant
(31:25) doesn’t pay you rent now that they Park their car in your driveway there’s no way you’re not seeing them right and they’re in your home and not paying rent so this is why to my friend I would not do long-term tenant in your house you know he doesn’t need the money you know just do short-term rental hire someone to manage it and I would think even if you do longterm in your house if you can I would try to get a property manager or someone else to manage it just pretend you’re a tenant as well because if
(31:52) they’re angry at let’s say the landlord you don’t want them taking it out on you while you live there right it’s a good Pro tip it’s a good Pro tip uh but you know with affordability the way things are like almost everyone is trying to avoid long-term tenants right because it it’s almost impossible to cash flow anything in Canada long-term rentals especially are the problem we’re hoarding houses and making it other people can’t afford to live in them okay I hope no one I hope
(32:19) no one clips that because you have a lot more property of most people quing Luke Luke just told us what everyone’s problem is we need to we need to vote these people one of my favorite things to do when we’re building or renovating is actually adding units because I feel like I’m adding to the housing stock I actually take personal pride in that when I build a coach house it’s a new rental when I do a duplex now two families can live in that home um my uh property in Welland it was a 12 unit purpose buil apartment building I
(32:48) converted it to 17 units so I added five new units to the building um that that kind of I don’t know it gives me a pride that I I’m creating more housing uh when we have such a shortage of it and if someone gives me [ __ ] about you know oh you’re taking housing away I’m like I’ve added housing to the housing stock what have you done I agree that’s why that’s why I really like the model versus like pure like buying apartment building and renov vict and stuff like that like you know
(33:17) versus when you’re creating when you’re creating housing units you are benefiting Society yes absolutely right Supply is what we are lacking we can’t control demand we can control Supply though so let’s let’s do the the right thing and there’s so much more the government could be doing to incentivize Supply instead so both provincial Federal and all so many municipalities they just put up so many roadblocks that make it so much harder than it needs to be um and they’re letting it all so much
(33:44) Im so many immigrants so we’re g to have such an issue with housing and uh I don’t know I think it’s going to get more and more combative between people you know blaming landlords when realistically I think um it doesn’t make sense people blame landlords because they’re like they’re taking hous out of the housing stock like no they’re not leaving the house empty somebody’s living there it’s in the housing stock even the Airbnb rules are in my opinion really dumb because if you take um first
(34:10) of all if I’m visiting another city and I have my a family with me and I have a dog it makes way more sense for me to stay in a house rather than a hotel but on top of that if you have enough airbnbs operating that they replace hotels instead of building new hotels they’re going to be building new condo buildings or apartment buildings or if they don’t need more because there’s airbnbs significantly replaced it you’re going to have see hotels converted into long-term housing so if you let the free
(34:34) market decide too many airbnbs hotels aren’t busy perfect now these hotels are being turned into apartments that might join up two rooms and you know and make it an apartment so you you’ve seen like around the world it exists where hotels motels eventually get converted into long-term residences M you would see the same thing except you know you see fairbnb come into Toronto they um they write all these articles they they get interviewed on all these articles about how airbnb’s ruining the housing stock
(35:05) guess what the founder of fairbnb is a municipal lobbyist who was paid by the hotel industry to write all these articles and interviewed they did a really good job at lobbying the government and changing public perception to make Airbnb the issue it’s yeah which is dumb because if you look at the source problem like just look at Zoning for downtown Tor for example you can you can you’ll get full full support to build a office building which you can’t which nobody wants you want to build a condo Tower
(35:37) everyone’s going to fight you true and then it’s going to be rent control I know I know it’s not rent control right now but when Doug for leads office which you will eventually do you does anyone think the 2018 rental exemption rental control exemption stays right if we get an NDP or liberal government which is likely because duck for can’t stay in office forever yeah but I and that’s that’s why I don’t actually think the the rent control the removing rent control actually helped that much uh in
(36:06) building new housing stock Because by the way that they removed it um like when Kathleen win removed rent control um and Doug for put it back he didn’t put it back like retroactively so it basically means oh okay so if I build something new takes me five years Doug Ford’s out of office by then no now I’m no longer getting exempt from rent control control and why did I you know build this like it didn’t help the idea that I was going to be able to um keep R along with Market kind of thing yeah because things change so
(36:37) if Doug for had retroactively said okay no no we’re going back anything built after was it 91 96 something like that uh that Kathleen went had got rid of there was a it was somewhere in the 90s um that if they went back to those rules then you like okay so I may temporarily lose the ability to increase rents but then as another conservative government comes back in eventually they’ll retroactively make the same rule so I might as well I can build I can build I know at some point you know it’s not
(37:04) like it’ll be 20 or straight where I can’t increase rents above you know the cap two and a half percent or whatever or lower all right Luke we can talk about the subject forever I’d love to over drinks but I think a what I what our lessener would really benefit from would be for example if you were to start everything over again uh so say you’re say you’re brand new uh what are what are your first steps as as a brand new wholesaler in this market wholesaler flipper um I think the big thing is uh
(37:35) not spending a ton on marketing cost so I’d probably be looking for um I mean assuming I’m starting with not a lot of money um and I’m just doing it on my own I’m looking for uh I’m looking for deals on the MLS right and now those are hard to wholesale but if you find a good deal you can flip it so I’m going to networking events and I’m finding a partner who’s willing to fund a good flip someone who knows what they’re doing and they say okay you’re right these numbers look good let’s do this
(38:04) deal um so they’ll fund it so they can get a share of that profit and then um yeah I’d be looking on the MLS um the the like I said my first two flips when I started doing this whole full-time in 2016 um and I already I I bought my first rental in 2007 so I already knew how real estate worked so I was fortunate in that way but my first two flips that I bought in 16 um when I went into a fulltime one was listed low but on um outside of Toronto board and it it was right before the Thanksgiving long weekend so it didn’t
(38:40) hit treb until the Tuesday but I saw it on the public realtor.ca because it had showed up I think it was a Fergus board or something somewhere near GF so that’s why it showed up on realtor it’s a nice place but it didn’t but the property was in Bron so it didn’t show up on treb yet because it hadn’t they’ listed it on the Friday but they hadn’t managed to cross list before the weekend so it didn’t show up on all of the alerts for all of the local Realtors and yet the price was
(39:06) right so I went in I managed to see it on the Sunday we got a deal signed on the Monday before it hit the market to everyone else on Tuesday and it was a really good price um I think it was a semi I ended up making 80 grand on that um in a good market and then another one was listed uh impac had his four bedroom but they and three three to four bedrooms can depending on the area they may or may not be worth more as a three bed or a four bed in this case in Brampton in that area it was in more bedrooms tends to be better so they’ taken down a wall
(39:39) they listed it as a three-bedroom because they wanted a bigger Master listed it as a three-bedroom impac still had it as a four-bedroom so I did some renos to this but the biggest thing I did was I put the wall back up so now I’m selling a four-bedroom in an area where four bedrooms self for more and uh I actually bought that one I think there was five offers on it I bought it in competition and then I flipped it and I made like 75 grand um and the wall doesn’t cost that much money to put up no no very little
(40:05) wall way worse we refinished it we put new uh I think courts counters in like I still I think it was ended up being a 40 Grand Renault and with the way prices are right now on Renovations it’ probably be a 60 or 70 grand Rena these days but um it wasn’t like a crazy Rena I didn’t have to redo everything the upstairs bathroom was already good I kept the cabinets there was a lot I could keep MH uh so yeah it turned out quite nice made a good profit and that was buying it in competition on the MLS because I saw
(40:32) something the other buyers didn’t see that four bedrooms in the area sold for a good amount more than a three-bedroom and uh yeah I was able to find a buyer that way that’s want go deeper into that hack you did with the with the MLS uh for the listeners benefit uh for example I if I’m listing a property in Hamilton I list it both on Toronto board and Hamilton board now there’s lots of RA lazy agents if they’re an out Town agent they’ll list it on the Toronto board only and then that way the Hamilton
(41:00) board agents do get do not get notified so then if you’re if you’re trying to buy that property you’re not competing now with the local market which is significantly generally significantly bigger than the outside of Hamilton Market yes so so that is that’s a for us that’s been a regular opportunity because again now you’re dealing with notown agent who doesn’t know the market well they probably don’t even want to make the drive they just want to gone they don’t know the market
(41:26) Market they don’t want to come out right so they just want usually generally they want it they they just want to get the deal done and you know what this agent was going to list it on toron board it just didn’t get cross-listed in time but I guess what I’d say about that is if you’re looking for opportunities you’ll find it a kind of stupid quote that I I like is uh you can’t get hit by the money truck if you’re not standing in the street so if you put yourself in a position where you’re regularly looking
(41:52) for opportunities you’ll find them but you have to be putting yourself in a position to look for those opportunities now as a source for for deals you we were we were talking about like you’ve had not so great experiences with uh V inv investors who are not that experienced yet yet their social media profile tells tells you that they’re done 50 deals in the last two years or something can you without naming names because you know we innocent till proven guilty we’re not interested in getting sued by anyone uh
(42:26) I’ll the term you I don’t think you mind the term you used was fake it to you make it and and I’ll I’ll elaborate on that just for the listeners benefit because we’ve seen that through history like for example Elon Musk even though my I’m a fan of Tesla I own a Tesla Drive Tesla the very first Tesla that was on the stage that they used to pitch and raise money for Tesla did not drive right they had you they had to push that car on the stage it did not it did not go anywhere right yet he
(42:55) he was able to raise millions of dollars so so fake toam make it has been big through history um and unfortunately you’ve had to deal with these people and real business transactions yeah so you know one example one thing that I look at is um and you see this from dealing with investors it’s having a a good eye for this some investors are really good at doing real estate and either aren’t good at or don’t put much work into raising money some investors are really good at raising money they’re not particularly
(43:27) good operators of real estate and if I had a choice I would invest with someone who’s a good operator of real estate every time over someone who’s good at raising money I can’t agree more um and you may even get you know they may even be offering better returns let alone you know the result will be better but they may be offering better terms because they’re not focused on raising money so they’re not as um they don’t have as many people offering them money which means you know a lot of
(43:54) people don’t like some people don’t like raising money I don’t particularly like raising money I’d rather not have to do it when I do it um because I’d rather just focus on real estate I love real EST yeah let’s just drill it down down a little bit so I’m the same way I don’t want I don’t want another person wanting to hold me accountable to something I don’t want to be answerable to someone else that’s why I became an entrepreneur right so I don’t want to be answerable to an
(44:17) employer so that’s that’s personally why cherry and I do not have Partners in our investment property so sorry continue yeah and I also find like I don’t like the idea of losing someone else’s money so I’m basically let’s say if it’s an equity deal um I’m going to protect your downside but then also sharing the upside and it’s like well why am I doing that yeah same yeah I I’m like I’m doing all this work you’re not doing any work I value work over capit and credit right like you know like help
(44:46) like that’s that’s that’s my personality as well I prefer people to help then I prefer like gifts or anything like that yeah sorry continue and and yeah and just a quick my first few flips I did with someone else’s money and I would partner with someone and they would get half of the profit for putting in the capital for down payment and Renovations and carrying costs so they’d put in all the money I would do all the work find the deal manage the renovation sell it Etc and then they would get half the
(45:11) profit so um that actually can be very very good return for someone but for you know they were taking a chance on me as well so they made really good returns uh and I didn’t need the capital so it’s a way for people to get in but obviously you don’t want to be losing someone else’s money but yeah back to the fake tell you make it so I’ve seen some of these people who are kind of more about raising money than they are about operating and one example is someone who’s kind of wellknown as an investor
(45:38) has a lot of Partners or raises a lot of money um they called us up for one of our wholesale deals this maybe a couple years ago now um and they had um a JV partner that they brought in that was going to buy the deal on paper or actually buy the deal right because that’s the way the JB partnership works so they’re going to be the owner they’re going to finance it they’re going to put up the money exactly yeah so this investor asked us oh can we push the closing back uh you know a couple weeks
(46:08) and you know we spoke to the seller and the seller said no we can’t we’re buying something else we come to the week of closing the JV partner can’t reach the investor hasn’t heard anything from them they’re very frustrating this JB frustrated this JB partner passive partner can’t reach their part their investment expert partner exactly supposed to be putting in all the work and so we get to like the day before closing finally hear back from the investor and they’re like no we need
(46:34) that extension we asked about we’re like okay now we have no choice obviously you know we go back to the seller with eggot our face basically saying we can’t this isn’t going to close we can’t close you know tomorrow we have to push back puts them in a bad position makes us look bad we managed the deal does end up closing but uh there was a lot of frustration on everyone’s part just lack of responsiveness probably taking on too much at once for this investor doing too many things at once MH um but that
(47:02) that’s a really bad business model to not communicate with everyone going on and um yeah so it it was it was not a great experience another one we’ve had is uh a group kind of a training group that some heard of sorry A Tribe if you will yep um there was a lot of more I would say instead of focusing on the fundamentals of real estate how to invest they focused on mindset which mindset can be really important if mindset is your issue but you can’t also get out from the fundamentals so we ended up being I can’t mind myself mind
(47:41) set myself to be Elon and then build an electric car um I have my shortcomings in the engineering space sorry uh so it it becomes more uh difficult we we ended up to the point where we almost wouldn’t work with people who were associated with this because this happens to us several times they would essentially lie to us we’d be like okay so you have your financing in order um you know you’re pre pre-qualified or you have a private lender you have the cash available like oh yes we have it I have lots of cash no problem we won’t have
(48:18) any issues paying your assignment fee and closing on time etc etc this happened with several at least three that I can think of people associated with this group that um they buy the deal from us promise all these things give us a deposit and then we see them on social media trying to raise money for the deal and then they can’t illegal well and they’re firm on the deal at that point oh my God the risk yeah they’re firm on the deal and then they can’t raise money they all like this is all like you
(48:49) know like burn the bridge burn the ship we’re going to make this work strategy yeah and I mean we hate that because we’re you know we’re a lot of our sellers are in positions where they need this to close like we’re trying to help them out and if one of our buyers can’t close our contract typically has relieved of liability but that doesn’t matter in the same way as like this is screwing over the seller yeah if you can’t because these are human beings right yeah um so you know we’ve had to
(49:19) negotiate some extensions and I think in all three of those cases I we had to find another buyer kind a last minute and we are able to so you know we might be double the work for you now well and we might be walking away from an assignment fee just to get the deal to close um L income too you’re working for free now yes yeah um and so it’s we typically don’t ask you know our buyers to prove uh that they have the money but that’s something you know sometimes we may have to uh if they can’t show that they’ve had experience
(49:50) and know what they’re doing because buying from a wholesaler for your first deal ever I don’t High I don’t recommend it highly unless you you really you know have done your research and you know what you’re doing because construction background like that those things will help you absolutely there there’s just more complexity to it in terms not complexity but you’re typically not able to finance the assignment fee except with some mix like uh one I work with closely is Calvert out in Alberta and
(50:15) they’ll Finance the assignment fees as well as long as the deal makes sense and they they run the numbers on the deal as well um to make sure they agree that it makes sense um but a lot of a lot of banks won’t lend on the assignment fee we’ve seen it happen a few times um but typically they won’t lend so what I mean by that is if you buy a house for uh we buy the house for 500 you’re buying from us for 520,000 the bank will look at okay we’re going to lend you 80% of 500 not 80% of 520 so you have to pay the
(50:42) 20% of 500 which is 100 Grand plus the 20K in cash so you need 120 instead of uh 80% of 520 would be uh 416 so you need 104 instead of 120 right so you’re you’re you’re funding more out of pocket and cash um so that’s one thing and then it just um yeah a little bit you’re buying a property that needs work or the seller’s in distress so you need to be willing and able to accommodate a little more M and then there’s usually have a pretty decent Siz project scope size ahead of you in order
(51:18) to execute and get your money out often but we we also have TurnKey situations because we we look for a combination of seller distress and property distress one or the other or both the typically the best deals are going to be ones where there’s both but sometimes you have situations where it’s kind of seller distress but the property is not in particularly bad shape um so it’s more sometimes it’s the ease for the seller sometimes it’s speed that they’re looking for um and you know sometimes the property is in good shape
(51:46) for example but they’re um going to go into power of sale and they need to sell really quickly because the sheriff’s coming kind of thing and they want to sell quickly so that might a situation where the property may not be in bad shape you know it’s always going to need at least some paint and things like that but it’s not in bad shape um but they need speed uh to make it happen and yeah so and that’s the importance of being able to close on time yes yes so I’ll just add that there’s U like your
(52:15) experience with with that one group that was focused on buying with no money down and all sorts of things like there’s several groups out there and I’ve heard the same story from many vendors not and other groups as well how they will turn down that business they i’ I’ve heard from even like mortgage brokerage groups who refuse business from certain groups the training groups like please don’t send us anyone don’t tell them you know us that’s us red flag when you see enough people of it it becomes a pattern where
(52:46) they must have been told to lie it’s not just that that’s almost the difference between fake it till you make it and like lie about it I think think that’s push I don’t know um I think it’s pushing it past just like trying to give the perception that you know what you’re doing versus fullon lying oh yeah no I have the money lined up I have it all you know we’re all good and then they don’t you know that’s a bit of a different situation to be and I feel like that particular group was teaching
(53:11) people to lie which is not a group I’d want to be part of and now the consequence is there’s all these people declaring bankruptcy and uh and they’ve got and they owe money to people they owe money to friends and family like it’s I’ve never seen it this bad before and I was I was in the community investor Community back in 2008 when we had the financial crisis when we had a real it wasn’t that bad right yeah this this period now is way worse than anything I’ve seen in my career in terms
(53:40) of like Financial like U disaster yeah I just had one property of Ruby house back in 2007 2008 so it wasn’t you know if anything I don’t know I feel like it almost helped me because uh I was I had an RBC mortgage on it and my payment was it was a variable mortgage but my payment stayed the same so I think I was four years into the mortgage of a 25 year uh amortization and I think I had 11 years left on it after four years on a 25 year right because I was paying down so much more in principle because the interest fell
(54:13) by so much um but yeah I mean so if anything it kind of helped me out at the time but it’s different now and I mean some of the people some there’s a balance between taking enough risk and not and taking too much risk and I think I understand people taking a lot of risk early on when they’re just getting started they don’t have much yet your first when when they’re single no kids yes and your first and they have job they have job income coming in to to you know to balance out the risk yes
(54:43) well and I understand why some people do like uh they might do an in-law suite instead of a legal duplex right on your first deal but once you reach a certain scale you know like you or I I don’t want an illegal unit in my portfolio it’s too risky for me if something happens what if insurance doesn’t cover it Etc so you’re you’re you can take a little bit more risks in your first deals but as you build more you have more to protect and that yeah that becomes scarier so I don’t want illegal
(55:09) units I don’t want things that I know aren’t up to code I’m not willing to take that kind of risk at my portfolio anymore um yeah yeah I saw a talk by uh these uh Reit owners very famous story out of guf two brothers and their friend I think everyone knows what I’m talking about if you know if you’re in the if you’re in the industry you know what I’m talking about but I remember them saying uh you can only live in so many houses so we had to uh scale up into commercial properties because they were doing they
(55:36) had like they had over like 50 student rentals in guol right so they’re making lots of money but again like you you can’t you can you can’t live in 50 properties yeah very hard to mortgage and everything right yeah oh can I just show I just want to show you this quick chart and I’ll talk about to The Listener benefit so this is the overnight so this is a benefit for anyone who’s watching on YouTube like this is the over Bank of Canada overnight lending rate you and I were just talking about uh back in like
(56:03) 07 yeah the rates were almost just as high right I don’t know if you remember but I was doing like 25% down and 5% mortgages back in 2007 right so like and then we’re pretty much at the same level interest overnight uh interest rate wise but people were not screaming and crying about like going people weren’t going bankrupt in the community back then and my comment is about like how hyper overleveraged our community is and and Canadians are in general when when we have seen rates at this level before
(56:37) yeah and I feel I feel bad for the people who I think were doing it relatively right but there’s there’s times in my journey as well where if I was caught at the wrong time it could have caused me bankruptcy as well luckily I’m established enough I’ve been through enough and I’ve built my portfolio enough that I have a lot more reserves and protection and I’ve been doing it longer but if I had kind of decided to scale up and bought my first you know unit that needed a lot of renovations right at the wrong time and
(57:04) that was like you know my second or third deal or a few deals in and I’m I’m making this one big jump into the next property and at the wrong time as everything went wrong with you know rates and construction expenses and you know that could have there could have been times when it would have put me in a bad position and I feel bad for people who are like that then there’s others that I feel less bad about because it’s you know you had um you had a long time to build this but instead you didn’t
(57:31) structure your business in a way that was you made the assumption that the market would always be going up and that’s a really bad way to run a business if you take that risk for one deal that makes sense you have a portfolio and you take you know you have a portfolio of 10 properties and one is a risk that can be okay because you have everything else as a protection everything else is stable and protected but if you buy 10 deals and they’re all kind of dependent on the market you’re putting yourself in a really bad
(57:56) position um and you know where you can’t do your other deals without getting the right refinance on your other ones and they’re all variable and you know and you’re not going to qualify if they’re at too high of a rate you’re putting yourself in a position where you’re risking your portfolio continually all the time that’s bad decision making yeah I saw a young gentleman buy two properties first for first two deals ever bought them at the same time in Trenton Ontario two duplex conversions and his plan was to use his
(58:28) personal line of credit for the renovation money to do two basement conversions I hope you had a lot of room personal line how big can a personal line be well if you’re pretty rich you you have bring personal lines but I’ve seen doctors with big personal lines but otherwise this was no doctor yeah H that’s risk I mean I don’t know about you I see a lot of duplex conversions coming in at like 200 Grand yeah if like the I’m seeing ret retail retail for just the basement alone usually around 160 and then you
(58:58) know the main floor often needs work so yeah you can get so the total budget will get over 200 yeah and it depends what you have to do right do you also have to do the driveway are you you know are you digging a lot of uh window wells right to the footing you know that kind of thing it a really big property then yeah the basement’s going to be more yes exactly fantastic all right Luke thank you so much for being generous with your time you we’re way over any final thoughts you want to share like first of
(59:24) all um like do you have a book coming out you have a speaking engagement like what are you up to uh well uh I am going to be interviewing you on my podcast shortly so we have the selfwealth real estate podcast which you can find on all the podcast platforms um follow me on social media as well Luke self wealth I’ve been posting a lot more content about real estate flips I’ve going on my rentals Etc um and yeah that’s about it just uh follow me on socials follow listen to the podcast and uh my my last advice is
(59:54) like like if you’re not in the market now start looking and make sure you know how to recognize an opportunity because I think there’s opportunities coming this year thanks so much Luke and I’ll for listeners benefit I’ll have all the links in the show notes and then like Luke like like we like we were touched on earlier like the people who got burnt in this period like if they stay with it won’t they be fine learn from the mistakes first of all learn for your mistakes yes yeah exactly like if you’re if you were able
(1:00:24) to through this this was one of the worst times for a lot of investors nowadays and I mean this wasn’t like the 08 recession in the US we weren’t hit nothing this was bad but it was bad because like you said there was a lot of Leverage that got expensive and that affected a lot of people um but things are going to get better and uh I’m not saying it’s going to explode like it was but things are going to be getting better so if you able to get through what is kind of the worst time and keep restructuring your stuff working on what
(1:00:49) you’re doing there’s going to be a you’re going to be rewarded going forward and even if that just comes down to holding your long-term rentals longterm too many immigrants coming in not enough housing being built I don’t see any way real estate doesn’t get more expensive and that you don’t do well holding your your portfolio that’s a great place to end it thank you so much Luke thanks everyone thank you for watching if you want to learn how to invest in real estate from scratch my team teaches
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