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(00:00) happy Lunar New Year to all my listeners in Chinese we Sayo I’m can speaking sort of actually really bad KY speaking anyways uh which you’ve likely heard before you’ve likely heard gy before in all those Mandarin all you can eat buffet restaurant commercials now there’s one possible translation uh if you can be a little bit liberal uh quote unquote wishing you become wealthy which I’ve tweeted and simplified to I hope you get richer because honestly if you’ve been listening to the show especially if you’ve been with me since the beginning
(00:34) back in 2016 or if you’ve been following my blog as far back is 2010 you are or should be rich uh hopefully you’ve taken lessons tips and tricks from many of Canada’s Fest Real Estate Investors I’ve had on the show implemented many and implemented many of those uh tips and tricks and whatnot uh as such you should already be rich or you are already rich hence I hope I the term I hope you get richer along with all that other stuff about happiness and health from my family to yours goingo it’s the year of the snake and
(01:09) last year was the dragon uh though I think they were accidentally switched last year I think uh was the year to be strategic which would be which would which is the the theme of snake uh this year uh is the year to build wealth which would be more like a dragon some of my Canadian clients have already started they started early last year they are of course really happy uh they kind of got the timing pretty right as they bought in the US when they and now they’re quite happy with the US currency gains and they are of course enjoying
(01:38) that US dollar cash flow for example I sold some US dollars in my Scotia account Scotia love them and hate them they offered me they offered me actually no I took it uh I paid um sorry I bought Canadian dollars for 1.42 Canadian per US dollar that’s the most I’ve ever uh sold US dollars for have you ever been excited this so onto another different note have you ever been this excited for a federal election I haven’t because I’ve never had so much writing on this outcome provincial elections not so much I’ve seen the housing platforms of the
(02:16) of the provincial liberals and NDP if their goal was to make long-term rentals an even worse investment for landlords then they’ve hit the nail on the head uh for example the uh the Lial platform includes rent controls rent whatever policy similar to Manitoba Manitoba’s 2 2025 rental increase allowance is 1.
(02:44) 7% uh anyways uh back to uh government under under our current government both provincial and federal and Trudeau whatnot uh I know he’s gone but anyways uh housing affordability is historically bad uh I I’m not using the the last two years I’m looking at more a larger picture I usually look at real estate from like a 50 year 20 year 10e term 5e term whatnot uh not enough has been done for affordable housing I think most people know uh that the at some point in Canada we stopped investing in um in subsidized housing government housing back I think it was the 80s uh we’re in
(03:16) a recession uh in Real GDP terms absolutely and everyone’s feeling the pressure of the historic inflation uh the average rent in Canada is now $2,119 now you heard that correctly that’s across Canada $2,119 uh to give you a context that’s about enough to get you a house in Edmonton I like to talk to hoses because I’ve always grown up in houses uh now put yourself in the shoes of a young highly skilled Canadian because they do have choices I was speaking to a young electrician just last week uh in the in the germ region of Ontario uh and he
(03:51) told me all his co-workers are already talking about moving to the States now let’s dig into an example because I love examples and I love context I I often believe context everything Alabama one of the many markets that we service here at Sher uh and uh have we already have clients buying in Alabama Alabama would be the fifth poorest state in the US if Canada were to join as the 51st state uh and then Canada would in turn be the fourth poorest state it’s never Happening by the way anyways that same $ 2,19 Kon
(04:25) that gets you a host in emont would be enough to also get you a host in Huntsville Alabama a prime Investment location where NASA has a major presence employing 7,000 people plus down the road there’s another four 45,500 people working at the US military’s Redstone Arsenal including contractors from lke Martin and Boeing Huntsville population growth is expected to be tripled in the US naal average and do I even need to mention the difference in weather especially winter weather between Alabama in and in Alberta and then for fun for the cost of
(05:05) to for the cost to rent a one-bedroom condo or Vancouver you could rent an 1,800 squ foot house uh with a large lot in hun Alabama we my client our clients literally own a house just like that 1,800 foot house they paid 23 235,000 for it rents for $1,700 a month estimated annual appreciation 4.
(05:29) 3% cap rate for those of of you who are fixed no commercial investing 5.7% now the good news for Canadian Real Estate Investors this is a Canadian show after all uh the best reason news is I think you already heard it or seen it in the news the increase the capital gains inclusion rates hasn’t passed uh unfortunately the CRA is saying that we need to pay it for 2024 uh but if the conservatives win we we would likely revert back to the original tax rules before uh before former prime minister TR Justin Trudeau and Minister Christa Freeland changed them for me and my
(06:08) clients that means a much more profitable exit uh for our Ontario properties after tax uh all you investors out there I’m sure are excited about this and it’s not just investors it’s it’s so many people it wasn’t just us that were opposed to this uh this tax change uh especially doctors AC all across Canada now speaking uh of speaking of clients one of my most experienced investor clients who owns over a dozen rental properties uh is a professional proper manager as well and has been a landlord himself for over two
(06:40) decades he just called me with uh good news there’s there’s always a silver lining to all news his tenant after nine months of non-payment rent is finally getting evicted uh actually today uh she owes him over $30,000 in rent and uh plus damages uh as the belief is that she scratched the place uh Ontario’s broken landlord system so this tenant’s already been from of the landlord tenant board twice uh the first heating was mediated uh so there was a settlement for a a payment planned uh the tenant failed to pay after the
(07:15) second month of the payment plan so um the the settlement terms are broken um now so I was talking again I was talking to my client so I said oh great so you can move for eviction immediately because that’s how it used to be before covid now uh modern day landlord tener board the tenant appealed she got a stay to further delay the process and at the second hearing uh she presented her evidence that she has no money I don’t know why she got a hearing to to share that evidence uh but the adjudicator did rule for eviction and
(07:51) then there was a twoe wait for the sheriff as that seems to be how long it takes for a sheriff in Hamilton which is probably the best I’ve heard in Ontario eviction is today uh and the tenants belongs are still inside the house uh so we don’t know have an update yet on the condition of the property uh but it’s not looking good so meanwhile her rent was $3,300 per month and that’s in Hamilton it’s not the fanciest place in Canada that’s about again that’s about 50% more for than a house in Edmonton or that house in Huntsville Alabama our
(08:30) housing is expensive in Canada in general and and then if you factor in incomes it rents and prices here just don’t justify it uh Canadians are struggling I honestly weit for this country I weit for my country I weit for the younger generation there are tough times ahead there are many good things about being Canadian I am very grateful for the opportunity that I’ve had my parents have given me and the opportunities I’ve given my kids and the kindness of Canadians you know it’s it’s often it’s the leaders of countries that
(09:00) a lot of us don’t like it’s but it’s the people are generally just wonderful inflation has uh Honestly made things worse for everyone um everyone Mark rents have skyrocketed when you compare to pre-co uh many landlords are struggling out there as they can’t make their numbers work I literally have clients who have uh let their property managers go because they couldn’t afford the excessive negative cash flow they’re already negative they couldn’t afford extra being extra negative with having to pay property managers uh I a member of the small
(09:31) Ontario landlords uh group that’s solo for short small ownership uh landlords of Ontario solo for short and every time I check there is someone pleading for help uh so the one post that caught my attention today was uh to quote attendant didn’t pay rent for 12 months at the hearing he lied to the adjudicator saying he did pay now there’s another hearing so 12 months without rent uh for a small everyday investor that’s likely going to financially ruin them and they’ll likely never be landlords again uh bad tenants
(10:08) are gaming the system uh so and it’s sad it’s sad that some tenants are so desperate that they’re willing to commit fraud it’s like like the one that’s just mentioned uh today so why am I investing in the states well the the author of The Wealthy Barber uh former Dragon Den Dragon David Chilton from AO Ontario recently said don’t be a landlord uh there are alternatives that are better and this is his advice to Canadians I couldn’t agree more Life’s too short I want my investments optimal headache free I want my rental income to
(10:42) be predictable cash flow positive and backed by strong property rights what what investor doesn’t now on to this week’s show we have Kevin cosin who is the poster boy for reform being needed an Ontario as he’s doing something about it as the new chair of solo small ownership landlord of Ontario he’s fighting for the small everyday investor just like I do with this show he is the author of the book rent at ruin where he documents his ordal with his Tormentor the tenant living inside his house uh it’s an all too common story where an
(11:14) everyday house homeowner homeowner has a life change makes uh what used to be a financially pragmatic decision to rent out the house instead of selling it uh and what proceeded to happen is easily among the worst stories I’ve ever heard and that is not h uh for a sneak peek I fed the transcript of the interview to chbt and asked what crimes the tenant could have been charged with here’s the list arson vandalism theft fraud criminal harassment which is honestly the worst part oh and the victim was Kevin illegal drug
(11:53) cultivation so I’ve actually have links in the short notes as well for of Kevin walking through his burnout house with the CBC uh also on Facebook you can find solo landlord if you search solo landlord again I have links in the show notes if you want to prefer that and the website for solo is solo. O.
(12:15) C please enjoy the show do your research make real estate investing profitable [Music] again hi Kevin what’s keeping you busy these days quite a lot keeping me busy it’s been quite a week how are you doing irin just a week yeah well yeah you were just named chairman right I took over the position of uh chairman of the board at uh solo and that was January 1st 2025 and uh and my tenant just the day before passed away so that’s that’s crazy is that recent yeah it was it was really the timing was strange in a way it’s almost like a cosmic thing but um yeah and I we we had
(13:01) voted me onto the board the chairman of the board in April so this was that far ahead of time uh and uh yeah it’s been it’s been really kind of low-key with the holidays do you have a great holiday oh yeah wonderful holiday yeah I was I spent most of my time in a communist country fascinating to watch oh China yeah was it China I saw pictures of yeah that’s great that’s fascinating you have a good time there a wonderful time yeah as long as you’re not in trouble or successful entrepreneur I think it’s quite it’s
(13:33) quite comfortable in China what about the border at the border they I needed a Visa yeah and do they do they really like harass you at all or they’re pretty easygoing or yeah yeah one interesting thing was that very of so I’ve been to Hong Kong many many times so I’ve seen it before the pandemic before the Handover after the Handover back to the British so I’m used to seeing many non-asian while in Hong Kong and China and I’ve never seen so few non Asians in Hong Kong China really yeah it’s really fascinating yeah get scared
(14:12) off a lot of people well there’s stories but I uh I’ve only been to Singapore so haven’t gotten to that part of Asia yet oh it’s go I cannot recommend it enough just the uh so I’ve now I’ve seen it I personally visited at least three of the world wonders three of the seven for example I’ve visited corado in Brazil the Jesus statue so it is it is I know so it’s something to see right can you imagine people like with their like people with their bare hands got that up there right yeah I kind of I kind of felt stupid I got there I’m standing
(14:46) there I’m looking at it yeah and I’m like okay what do I do now yeah we take a picture like this well now imagine yourself at the greaty Wall of China which is 13,000 miles long and that was built by hand 600 years ago right so so this the scale is just you have to see it in person is there is there points where it breaks yeah in the chain or is it just one continuous there are some weaknesses in in it and that’s then if you read about history that’s how that’s how the wall Was Defeated because there are gaps they
(15:21) didn’t bother building that part they just kind of well it’s just like for uh just because of the train they couldn’t really continue it so it’s not completely continuous 13 Thousand Miles uh and then again it’s a funny thing about history was just and I love learning about the history because you know that’s saying uh those who fail to learn from history are do to repeat it so if you so the wall was famously defeated twice one was through one of one of the areas where they didn’t complete the wall because again the
(15:45) train and the other time uh simply the invading uh Army had already bribed the the the military that was guarding that door like in exchange for money or land or whatever you open the door for us makes sense the easiest way to get in is let you in right yeah thank you fire no bullets fire no arrows and and shed no blood like right so all that effort you don’t even need a trojan horse just walk in thanks buddy yeah well no you to give up land but it’s not your land you’re gonna the land you’re GNA give away during The Invasion and then yeah and
(16:24) then they were occupied for like 90 years after that but anyways so let’s talking about real estate yeah first sorry first off what’s Solo stand for and and what does it do well solo is uh uh well it stands for small ownership landlords of Ontario and we advocate for small landlords we’re we’re about small landlords we support small landlords we uh work to bring Justice to small landlords and we work uh pretty much seven days a week pretty much all waking hours the the the main board members we work just tirelessly to
(17:01) help small landlords in any capacity whether it be going to evictions to help them or answering phone calls uh we have a phone line that we answer it directly uh or lobbying we just we became a Lobby group and we went to Queens Park to to Lobby the uh mpps directly uh looking for change of course in the residential Tendencies out change in the LTB we directly connect to the LTB we watch for per performance indicators of the LTB you have board members actively sit during uh landlord tenant board hearings of course yeah we we observe hearings we
(17:36) have a legion of people landlords that also observe hearings uh you know we we track all sorts of LTB indicators we we keep an eye on adjudicators we have a adjudicator rating website we built rate th lb.com where people can you know go and rate an adjudicator and also in turn while you’re sitting there for three hours waiting for your adjudicator to get to your case you can look at rb.
(18:00) com and see your adjudicator and see what their their Tendencies are because people will tell you well this their tender friendly or they’re they tend to do this or they don’t you know they don’t keep things under control it’s good to know the knowledge in terms of what you’re dealing with gives you a little bit a little bit of an edge right when you’re dealing with the LTB so we really get into the LTB really into the Weeds on that um and also prepare for the LTB hearings of course and we have a Wiki uh like much like Wikipedia Med for
(18:29) landlords and gets into like observing preparing for hearings dealing with the sheriff going going after fraud and that’s on solo. CA it’s uh it’s in there it’s in the menu uh it’s on our members site though we have a membership site that actually um it makes me think we should make it easier to find but we have a membership site that actually uh we have our members sign up and we vent our members as landlords and uh then they get access to all of our content whether it be a Wiki page p uh or it’s our webinars we actually do a
(19:02) ton of webinars and all of the content is in there and available to our our landlords and it’s ever expanding we actually and we’ll talk about that a little later but some of the stuff in 2025 we’re going to really try to push that and expand it more uh and we do a ton of stuff for our members and it’s all about we’re you know and we do it all for free I should point that out we you know I’m a volunteer I am the chairman and I’m still a volunteer all of our board members and volunteers are volunteers right um and we just do it
(19:32) all for the small landlord and and and we’re all motivated in different ways but I’m motivated in a way uh so what happened to me doesn’t happen to others you know we want to try to avoid uh these sorts of scenarios and sadly uh they come to us when they’re in trouble because there really is nowhere else to go to uh because well there other places to go and I I wish it was more more resource for the landlord especially the small but it’s sadly it’s not as much for me when I was looking and I was troubled and I had a a tenant
(20:06) terrorizing me honestly it was just like everywhere I went give me money give me money and then I’ll help you I didn’t even know how they would help me but they wanted money first right solo one thing is special about solo is that we don’t ask for anything you come to us we’re going to help you right away we don’t have a membership fee there’s no cost to the landlord at any point right so we we we primarily want to that’s the mission right and I will say our clients come to us and we can help them pretty far but not everyone’s knowledgeable if
(20:36) you’ve never been at landlord it’s pretty hard to coach someone through this right you know the residential Tendencies Act is a myriad of regulations and you’ve got LTB issues got you’ve got interpersonal issues you’ve got you know all sorts of damage problems you got different uh laws and contract laws and things like that and at the same time we try to build this community that is as robust as possible and you’ve seen the Facebook group you you you see what kind of comes from this sort of idea where you you take
(21:05) like-minded people put them in a in in a space and then you you do your best to control the access to that space so we actually the Facebook group like more than 80% of people that ask to join we don’t let them in because we vet everybody that comes into that group right and so that it pretty expensive the questionnaire yeah right so we we actually have uh created a space thankfully that is you know when you ask a question you get a robust set of answers yeah and often you get really good answers from people that are interested and willing to help
(21:40) and want to help you know what I mean and uh that’s the kind of communities we try to build at solo the best we can it’s not perfect and it’s really it’s been a difficult Road sometimes but uh that’s what we work on and we’re doing a ton of other things that are you know working on a building a mailing list to we about all sorts of different uh thing working with landlords to try to get fraud charges for serial professional tenants which has become a thing now is in the news again yeah you see this uh and media we’ve done so much media work
(22:15) uh really interviews on every channel every every station CBC the national we’re just trying to get it out get the story out that you know landlords are are people too and we’re struggling and in fact uh in the case where you have a tenant that wants to take advantage of you the struggle is real and they have quite a lot of advantages that perhaps maybe shouldn’t be available to them you know and that’s um that’s some of the the stuff that solo is really working hard to do uh do you mind I share about some of
(22:49) the screening questions for members to join uh yeah for a member to join the uh we of course we want your name and email and all the rest but one one uh one question we we ask that is required is uh your uh your property address the unit that you rent out so we can go and vet that we check on GE warehouse and make sure that you know you legitimately own that property and in some cases we’ll we’ll call the phone number and talk to the person and we really really care about having our members be legitimate members uh again nothing is
(23:24) perfect but we we work hard to to make sure that that is a space where uh landlords that come to us and they need help they they get that help yeah right and we want to do more we we’re ever expanding this uh this thing and we ask other questions like they’re optional though where did you hear about solo you know uh other other things like okay well if you have a pin we want to know that because it helps us vet you easier uh you know um what your business like if you’re in real estate what is your business of course yeah what’s your
(23:56) Reco number if you’re a real estate agent or what’s your uh lso number if you’re uh we have sometimes paralegals that come to us and they register too so any kind of identifying information that we can vet but um the extensiveness is in direct relation to the fact that we actually look at it and you know uh read them and and vet the people and no nobody becomes a member with like it’s it’s a uh sort of an opt-in process so if we can’t verify the member they stay unverified until we verify them right yeah yeah and and for listeners benefit
(24:33) because we don’t want people in there that don’t belong in there looking just to create cause trouble take get captures and go well yes it’s that and it’s it’s it’s mainly also it’s a resource issue right like if everybody gets in there then you know what I mean there could be yeah quality falls apart too yeah exactly you want to just kind of um uh the use of resources and and and make it appropriate so these are the people that it’s appropriate for and in other cases like the Facebook group we just want to preserve the quality of the
(25:02) conversations the best we can and uh all of those things are just take the effort of sort of pruning and working it and vetting and you know we have we have thoughts of of even pushing the member system even further and so the vetting becomes still very important and valuable uh because we need to know that every landlord is a landlord yeah right so uh because a someone who’s not landlord shouldn’t be giving any advice at a minimum some landlords even shouldn’t give it yeah uh but I was going to those I’m on other all these other Facebook
(25:34) groups as well and I’ve seen some horrific advice given it’s true and it’s like pretty much the opposite thing to do like oh go take the door off thing right go take the door off it’s the internet right and what’s interesting is that when you’re in a space that is not uh like people bullying and harassing you find that actually someone will say that take the door off and then you’ll have 10 other people that will say very reasonable responses and so it kind of evens out my but I haven’t seen this like that on
(26:05) Facebook group it actually works no the advice I generally seen is quite good especially when I especially when I when I know who the good contributors are I usually see their viice is quite good and I have nothing to say after that we we have an interesting thing where now that’s not we can’t take credit for that but I find it’s really interesting and curious that people tend to police themselves enough to to help you know landlords and I think that’s what’s that’s what’s the point you if I’m a landlord and I’m trouble and I
(26:38) need to know how to fill it an n12 or I need to know how how long a sheriff is going to take in Brampton uh I I can go there and kind of you know get my answer and that’s that’s the and if somebody is bullying or harassing they’ll report it to us on the admin level and then we can take action and we do so it helps sort of preserve that that space whereas in other groups communities online I won’t say any names but it’s it’s a it’s a more of a harassment tone yeah you know and that’s the challenge with these
(27:13) like the that Facebook groups like 8,000 members yeah 80 8,300 is right now yeah so it’s that’s got to be tough to moderate it’s not it’s not so tough we have we have maybe six or seven people that they watch them moderate and they’re you know uh they’re they’re regularly doing it and it’s not so bad once once people are you know come in and they’re tuned to how the how it works and we have a Thursdays you can poost promotional stuff but no other day and once people figure that out and then it kind of it works out okay most
(27:50) of the time I’m going back to Facebook to to see what people are talking about not the moderate so that’s knock on wood that’s good really good uh so I’ve been again I’ve been in the business for a long time so uh landlord Health he Center for example was has been was uh was a massive help uh before the internet got really big uh and then they got then sadly like under they’ve been so much of their funding has disappeared from the provincial government even under conservative government that’s a shame right there’s such a great
(28:24) resource and there’s such a great uh uh tool so much great information on their site uh I’ve been to events that they run and they’re they’re spectacular my wife but nobody showed up well hardly anybody showed I was like wow this is incredible lot don’t know about them so for again for listeners benefits landlord self-help center they are a nonprofit funded by the provincial government even though it’s been declining uh and they have wonderful resources but they’re the the people that can service is very limited like
(28:55) the people that can actually handheld handhold and help mhm um because I believe you have to be at massive Financial Risk in order for them to for for you to qualify for them to work with you or something like like that yeah I don’t know what the parameters are personally it’s a very small short list I think you might have to live in the property or something yeah but that’s a very limited number and I I I think that should be expanded of course I think there should be money there should be Dr for uh for landlords you know uh or
(29:24) sorry there’s Dr at the LTB but there should be um U proo service like Legal Aid Services for landlords available there should be these kind of things for small landlords just as much as there are for tenants right and it and and the landlord self-help is like you say it’s it seems to be declining and it’s a shame because um we would hope that that is expanding and growing right that’s the wonderful thing about solo because I find it compliments where they where their services end solo kind of picks up like it’s it’s no cost you have a lot of
(29:59) really good people helping people who know their stuff helping people for free and certainly that’s not by Design and it would be great if that was more by Design in particular where one would end in one so we would not have any redundancies uh they do webinars we do webinars they maybe there are overlaps and uh you know it would be great if the resources were all you know uh efficiently used and we don’t coordinate with them in any any respect yeah it is a little like that uh and it’s it’s par for the course where the fact that
(30:33) landlord self-help would do what they do and of course we do what we do to try to help landlords so we’re you know we’re going to be kind of like that um and maybe in the future we’d have some level of connection I I know some people there and you know like I said I’ve been to events we’re keenly aware of landlord selfhelp and we’re aware of their mission and we obviously align uh in terms of our Direct commission although landlord self-help is perhaps they they would coordinate with larger landlords at different times
(31:05) depending on their content in their uh uh their mission whereas we are Solo the small is in the name right small landlord uh well the executive director of self help’s coming on the show in a few weeks so I’ll talk to her yeah those are good questions right and I’m eminently curious about how how they operate what their focus is how they you know of course having some sort of an alignment where we kind of uh connect collaborate all of these kind of things are are Solo is all about that kind of thing because we want to uh we there are
(31:41) only so many resources out there and we want to push for justice for small landlord and we all have to be on the same page to get there and that’s that’s a very challenging and the strengthen numbers of course all of that so um it’s my observation it’s a small land that’s at the most risk especially the ones who are really casual right oh I just go buy a condo and rent it out and then it’s usually them that don’t properly screen or they trust the wrong person to prop to and they don’t properly screen and they get because it was literally in the
(32:12) news I think the professional tenant owes like four different people different landlord’s money so that immediately means no one screened them at least three people didn’t screen them yeah it’s it’s a um it’s a case where now I think that the professional tenant or tenant looking to do bad things they actively go out looking for these folks and it’s not hard to find nowadays still you know landlords are becoming more Savvy just as much as tenants are becoming more Savvy but it’s still I think for a for a bad tenant who
(32:45) is made a career out of paying first and last and then riding out a year of free rent they uh they can find that that landlord that can be sucked in or gullible or they can get their friend to p as a real estate agent and passed them off all of these things are all on the table and they just happen with such regularity that it’s uh it’s it thankfully in the media it’s becoming more more known but uh uh it still it just happens way too often we we’re we’re so busy with this it should not ever happen but it’s it’s a Non-Stop
(33:18) barrage of these kind of stories and then the Act and the board protect these people as as you know let let’s let’s be clear though the tenants deserve to be protected just as much as anybody oh deserves to be protected but people that do bad things ought to be held responsible for that landlords too have this environment where they’re not being held responsible and there are little repercussions and you can get away with things and push it and push it that’s an environment for complete Injustice for everybody because
(33:53) that that professional tenant the one has news if that’s all true they should go to jail yeah for what part in particular I wonder though it’s stealing it’s band you know there’s vandalism and that tends to be a probation charge then there’s the the idea of stealing rent which not really many people have come around to that they always think that’s a civil matter and you know what I mean uh and maybe it’s a civil matter because there’s no potential violence involved like if you steal from a bank there’s potential
(34:28) potentially violence because you got to wave a gun around maybe but when you’re stealing from a landlord there’s no violence there or at least so people think so then that’s that’s a victimless crime as they say uh you know it we’ve got to sort of change this sort of perception of landlords not being human beings they we’re we’re people a small landlord is a person they have they rent out perhaps a condo or their basement or they rent out two units or they rent out their their home because they want to keep their investment they’re they’re
(34:58) human beings they deserve uh justice just like anyone else it’s not a it’s not a matter of asking for sympathy it’s a matter of asking for basic Justice right yeah you know when I when when people ask me what would you like the LTB to do I say do your job right you’re you know your standard for a a hearing is 25 days and you’re taking five months or or or four months to get to the hearing you’re not doing your job let’s start with that you don’t have to do any kind of Earth shaking uh changes to the RTA yet just start doing your job we can
(35:35) start there right so uh a lot of this is just uh a little absurd you know a little bit of a rage bait situation but at the same time it’s also just like if we just get down the business and and get it done we we we can get there we can we can find Justice for everybody tenants wait two years sometimes for actually their their standard for some of their t2s t6s they’re they’re up there a year or more maybe two years and they’re not getting Justice either right ESP including the tenant when the landlord is at fault here they’re not
(36:09) getting Justice either and we don’t we don’t know that until the hearing but uh you know they deserve to have their hearings in a reasonable amount of time you know everybody does right yeah you know i’ I’ve watched government for so long and I’m a pragmatist so it just irks me how government functions including the LLB and I’ve told you this story before I mentioned on the show so apologies for the listener just fast forward this part but Florida for example if you’re if you want to hear in for non-payment of rent you have to post
(36:39) the rent outstanding to the trust account of their version of the tenant board lant board prove you have the money right at a minimum here at the LTB screen capture me your bank statement prove to me you have the rent and you can have your hearing right if you just want a hearing because you don’t because you don’t have the money you don’t get a hearing hey that’s a reasonable approach and one other approach so easy we thought about okay you know change it up and say if you want to file a tenant application for whatever reason whether it be
(37:11) maintenance or other concerns you need to show that you’re gainfully paying your rent if you can’t prove that you’re paying your rent you can’t file a tenant application I think that is the case in some American states I think it’s Arizona maybe uh Satur yeah and that’s an incredibly reasonable approach why not you know what I mean yeah here’s my Remy like you you want you want Justice you have to show that you’re uh you know you’re up to speed on what you’re doing and you’re paying your rent you know a lot of a lot of applications for Te
(37:41) applications in Ontario would not happen if that was the case you had to streamline the process right and we’ve asked for um you know uh written evictions of course you know this idea of not having hearings at all if this is an uncontested matter or the tenant cannot prove that they’re paying rent then it’s a written written order and it’s just like an now4 X parte order and then that’s an eviction there should be no case in Ontario where a tenant who wishes to do bad bad things thinks that they can get away with it right do you
(38:15) know why we haven’t gotten back to inperson uh ten Port heing did they sell off all the uh all the tribunal facilities like they they have all of those there as far as I understand they still have them whether they lease or or own them I don’t know but they use them for office space but what has happened is that they’ve switched they bought a Sal Sports based uh CRM software for uh for running hearings and they implemented that over the over the uh Co and uh right in the late stages of covid so they were running through that implementation
(38:49) process which created backlogs by the way they already had backlogs they created more but they went through that entire switch of their internal systems that that really became online online filing online uh hearings and they just never walked back they never went back and I think that’s a cost savings to them in the end they see it as a cost savings they see it as a potential future costing us in service removing the physical offices and then you know having all the adjudicators working from home many of them are if you watch
(39:19) hearings you’ll see them actually blur the background but you’ll see that they’re in their living room right uh so then they would get rid of all this real estate and then they would you know realize a cost savings I think that’s the ultimate goal in the end and as we know from so many different places in so many different people in-person hearings are far more efficient far more efficient they are you know there’s no uh no roll call but for saying Hey Kevin are you in the in the are you in the room and on Zoom you you watch a hearing
(39:51) and it could take up to 45 minutes to get roll call done right and that’s all hearing time they’re not there 45 minutes early so we’re we’re in this case and and nonetheless uh maybe I think the stat was something like 20% or more of uh of matters get solved in like in the H hallway yeah people kind of people probably even higher there’s this sort of a scientific thing that happens that people when they’re behind a computer and sort of anonymous they kind of uh they they kind of feel more emboldened right more uh more Warrior
(40:25) well exactly they’re more willing to fight than they would be in person when you finally get in front of a person and you shake their hand and you look them eye eye to eye things change completely it’s a human factor yeah and you remove that complete human factor from uh it’s it’s like disembodied as they say right and when you do that um you you not only slow down the process you make it more inefficient but you embolden people to fight more right so I think that you know uh inefficient we don’t have anybody yeah we don’t anybody at the LTB
(40:59) that has come to this realization certainly not in government that has come to this realization and what we’ve asked for at solo is simply just run both at the same time if you have a a if you have the parties in a hearing that are willing to do it in person then have them check a box if you will and then we run it all in person and I think we would find that you know most people would probably want to run this in person uh the only people that wouldn’t want to run iners hearings is pargal because paral leals have seen
(41:27) their revenue jump rapidly gee from the ability to run Zoom calls multiple at the same time so their revenue has increased rapidly uh as a result of Zoom hearings so certainly their incentive is not to have uh uh you know not to have in-person hearings and of course there’s a cost factor of getting people to go to single locations Elm Street downtown that’s quite a trip to go downtown to uh to a place um so there there are those factors I I think that are are involved but I think you know if we care about actually getting to a place where the
(42:03) backlog has reduced to a point where they’re meeting their their set standard we have to do something that you know justifies the process it’s not a well pre pandemic we were usually about three four months for our hearing which is than the backlog with prepandemic the backlog was growing for sure uh but you go back perhaps a year and they were they were running the you know 880,000 hearings or 880,000 cases resolved every year for at least a decade you know they were running at a at a reasonable Pace it wasn’t perfect but it was perhaps a
(42:40) month well you have the data to prove it used to work yeah well yeah we have the data you know and and here’s the thing in in the ltb’s recent work as in like three to four three to four months but in their most recent like annual uh uh report if you will or their annual Zoom they’re like we have unprecedented levels of of uh of files that have been submitted never before seen you know ever all time but yet if you look at the numbers they released it’s like 83,000 files they received for prepandemic every year they
(43:15) were receiving between 78 and 81,000 files so this unprecedented is only 3,000 more than they’ve ever seen right like it’s not like yeah milon Canadians over the last few years yeah like it’s it’s just absurd in a way because I think that you know you don’t have to address it up they they’re not doing their job and they’re not doing it well and they’re not maybe perhaps they’re not broken and that’s a bit of a touchy subject for them but you know however long you keep this backlog going it it only proves how broken it is like you
(43:51) can’t we can’t make this the normal right we can’t some of these hearings for like l2s or uh or especially Blended hearings when you have uh multiple files at once like an L1 and an L2 for damages you you can see up to a year for that still today after three years three and a half years right what institution has three and a half years to fix a back government so I’m old school right so I’ve been coaching investors since 2010 and I been through it myself uh and then the best practice I found and what I talk to my clients was when you go to
(44:28) the LTB find a mediator find your tenant negotiate something you do not want to go because because the the hearings are priorities given to the easy cases anything that needs to be contested goes to the bottom so there’s a good chance you’re not being heard that day and need to reschedule well there are two things there you know the one thing is that that’s leverage and I’ve used that leverage in a hearing by the way as I represented somebody that the fact that you don’t want to go to a hearing that’s a piece of Leverage you can use at the
(44:59) point of mediation the second thing is that the LTB they’re Kryptonite and I know you’re like superheroes the ltbs Kryptonite is any kind of complexity yeah yeah not only do they not run hearings that are complex as you said they actually literally break down when you bring a very complex uh in-depth detailed yeah uh evidence when when it gets complex whoa they just grind to a halt these guys they can’t handle it it’s way more effort for them there’s way more materials for them to review before before the hearing and all that
(45:33) sort of stuff it’s way more work for everybody yeah they’re just not built for that and so you have uh you have cases where we have one tenant that was evicted uh her name is out in public I won’t say the name but point is that she actually commanded over many of her hearings 25 hours of hearing block time because of all of her little nit you know little things big things human rights claims she actually called the adjudicator racist it was just an on endless barrage of hearing after hearing after after adjournment after
(46:10) adjournment 25 hours of this and this is 25 hours of block time that is gone to hear other matters right so this is what we see at the LTB it’s just not equipped for this so if you’re a tenant want to do bad things I I’m I’m spilling the tea as they say I’m giving it away make it complex this you know the LTB should be better at this they should have adjudicators that can stop this in its tracks we could talk about the adjudicator his name is Ebner he he really didn’t do a great job of uh uh uh stopping it or shutting it down you know
(46:47) what I mean but the the this is the problem at the LTB it’s institutionalized um I feel like a bad word is appropriate in there somewhere but it’s definitely this sort of institutionalized thinking of like you know plotting along and you know yeah we’re doing great we’re reducing the the the uh the backlog but yet when you look at the numbers it’s something like seven files a week I think something in that range seven files a week when your backlog is 53,000 are we gonna are we going to end this backlog in like
(47:23) 2065 and and where we are today in January 2025 like the work from home thing is like really minimizing like almost every company’s requiring employees to come back to office but we’re not seeing any of that for the LTB no I don’t think not even day week I’m with you I think that’s I think that’s true I think you’re I I I would not be surprised if most of the adjudicators are at home running their hearings they might come in once a week Fridays tends to be the day that they they do write out orders maybe they’ll
(47:55) come in on Fridays but but while the private sector is going back to the office right I think I think that’s true it’s a lot I well you I don’t need to argue with you why I topped out now let’s talk about your own Journey see more people are are interested in tapping out well you know we want here’s the thing though at solo we recognize that uh landlords are tapping up and they’re leaving the business but we want them to be uh in the business we want them to be small landlords to thrive we want good tenants we want the housing market to be
(48:34) a good housing market at least a balanced housing market we you know we would like to be in a place where it’s not housing crisis every time you pull up a new story we want to be part of the solution right that’s what we’re after we’re not after you know trying to convince every small landlord to walk away which they tend to walk away I’ll be one of them I am one of them that walked away and what we see is that once a small landlord comes to solo they get their issue resolved yeah and then they walk away yeah because they’re coming to
(49:04) us usually because they’re in a crisis right and then they walk away and that’s one less house on the market perhaps bought like a by by a corporate entity or maybe bought by a family who takes over that single family home and that’s not a rental anymore yeah rental the Rental Supply is gone forever right yeah so we we want a good uh healthy housing market that’s what we’re after but you you put up my book there yeah shess promotion if you’re interested in becoming a landlord let’s talk about from rent to ruin yes yes um
(49:37) what happened how did you become a landlord I became a landlord mainly because my uh my fiance at the time she had uh she had decided to move out and I decided to move in with her and we moved to uh Hamilton at the time and so my choice was either to keep my home which I have a semi- detached house in ashaa the choice was to keep the home and continue my commitment to having a a property that I purchased or you know sell it off of course and so I decided to keep it and then I kind of financially Savvy for sure you know I I
(50:14) I wanted to keep the property I intended to keep it for my my life and and pay the mortgage so I would keep it I thought okay I’m gonna I’m gonna rent it out so I somewhat reluctantly decided to rent out the property and uh and I went through a very poor well I don’t want to say poor maybe I could have done I definitely could have done better let’s say yes I could have done better at the screening and uh and this person came to me as a tenant Barry and uh as I as I write in the book uh it’s just a a string of uh problems and
(50:48) issues and he terrorized me to no end and he threatened uh he even said at one point uh in November of 2022 he would get even with me and then by January of 2023 his his son and him they burn burn the house down they burned it out completely destroyed the house which had to be completely rebuilt over a process of say I think it was 14 15 months of rebuilding uh and so this this book just describes the entire uh entire process of trying to go to the LTB trying to deal with him the the beginnings of the strange things that he
(51:27) would be doing you know I had in the least don’t smoke uh and then he was smoking in the in the backyard to just a month after he yeah and I’m like he’s smoking right right inside like right next to the house I knew that he was going to float every every single rule I had in the lease and I knew that it was It was kind of coming and then tension would rise and rise and eventually the the fire uh but yeah that’s that’s just Chronicles uh and of course there’s there’s the bureaucracy and and that’s yeah that’s
(52:01) one of the rooms where where the son he uh had a ton of graffi um so you know it it just came to a point where I’m like uh your all there’s even more like there there was uh uh perhaps uh and this was maybe eight months before the fire but he actually had his car burned burned out completely there you go you see the carire and that you I came he call he sends me an email and then I I run to the house to look at the it looked my the front driveway you ran from Hamilton to asua yeah I had to drive out there to uh to Ashawa and the the front driveway
(52:42) looked like Beirut I’m like what happened here and he says uh I don’t know uh looks like I think the drug dealers next door did it uh and I said okay well all right your insurance your insurance will cover I don’t have insurance he said on the car he’s s his car is sitting in my driveway no insurance and he’s been driving it well I I only presume he was driving it I don’t know how he got it to uh maybe he just gave up under anyway this this all these bizarre occurrences and uh Madness and it was just like a it it took like upwards of yeah that’s
(53:20) I found that under the uh I found that under the wheel when I was when I came in and looked at the car and he he seemed surprised and he found it he said he was going to go to the cops with that evidence if you will cuz it’s clear evidence that somebody started the fire right um so sorry this is soul torch a lighter but this isn’t a regular lighter what kind of lighter is this looks like some kind of li like a butane torch it’s like yeah one of those bong you light a bong bong with it or something like it’s
(53:48) like a torch you you kind of smoking something you like would this be like a would it would that be a looks like a butane torch could be but I don’t know what kind of fuel is in it but you know people in the area they actually because I interviewed them after the the house fire the big fire yeah uh they this is a torch this isn’t like a bit lighter no you’re right and they described an actual like a exploding sound like they described the fire and it was getting worse and worse and something there was like something blew blew up and it’s not
(54:20) like the movies Cars don’t blow up right and I think that that that actual torch was close to where the fire was started and eventually it got hot enough and then that reservoir of gas probably blew and that’s where people heard that the blowing sound um and that that caused quite a lot of damage it melted the siding in the front of my front of my house and it you know obviously it could have started a fire on the house or next door could have started a fire and killed somebody right um and it’s it’s impossible to know who started that fire
(54:51) I I never knew I never found out he he said the the the drug dealers did it yeah he was was he high he was the thing with my tenant he lied and I didn’t know at the time that he was such a liar but he lied about everything really was what did he lie about during the anten and application process uh he he manipulated his credit rating his credit I don’t know what exactly it was but it was easily 300 more than what his real credit was uh he lied uh that’s a lot he forged signatures on 400 versus 700 cutting ratings a B I know yeah definitely he
(55:29) you know and he had to because he wouldn’t have gotten into my place if he didn’t Forge that I should have been more um you know I I I I could have screened better and I I I learned from my mistakes there but but he lied to he lied he right out lied and he lied about his former landlord he lied about the but he forged documents yeah like this is this is stuff you can bring to the cops it’s so difficult to hold people the police will not look at a m if it’s not a Serial offender if it’s one time and you can’t prove that it’s multiple
(56:01) different landlords it’s a hard it’s a hard goal of it to take that to the police now we worked on all sorts of these matters uh and we’ve had some success but if you’re just one landlord with one tenant that you know maybe you can prove it but you can’t uh prove it with complete certainty that they’re a Serial offender they won’t they won’t press charges so it’s a it’s a long string of events that lead up to the the house being burned burned out completely and how long was the process from like tenant moving into burning down the
(56:34) property like how long are you living with this nightmare well the the and then you have to leave after the house is built well he was there about two years but um so some indicators of this is it took I think about 14 months total uh for for the eviction to get to get that done but one thing it which I find is is most absurd is that the the house fire okay the house fire made the house completely unlivable of course all the utilities are off he has to leave he’s gone into Red Cross okay at that point I needed
(57:11) another eight months to get my house back he can’t even physically live in my house and yet with the bureaucracy of the LTB I needed eight more months to get my house back legally and he was still a tenant for those eight months even though not not living at it even though there while they were building if they had rebuilt and finished in six months he would have been able to move back in Legally and he was even taunting me he would saying you know why don’t you can you do you mind if you paint the walls gray for me because it goes great
(57:39) with my furniture like he would send me emails just taunting right but the reality is that he he still had another eight months of Tennesse legally until the LTB finally gave my house uh possession as they say gave it back so this just entire absurd process uh this fire would not have ever happened if they evicted in a reasonable amount of time uh without backlogs of course uh and then uh did you have to prove who caused the fire or was someone caught yeah so the the the person that um started the fire he was thankfully he
(58:15) was caught on the day on the evening so the police came uh I wasn’t there until later later at night but uh they they must have inspected or looked at the situation he actually had uh burglarized the car uh as well he ran over to a neighbor three or four houses down broke into that car stole something out of his vehicle um did something through threw it on the on the street or I don’t know what he did before he started the fire so it was a whole thing now he didn’t get charged with the theft or vandalism of a vehicle but eventually
(58:50) they charged him on the spot for arson and they they arrested him wonder how they got him for that I think it’s pretty obvious so I think that maybe they went into the house after the fire was they went into the house and they saw this you know uh and no doubt the tenant he was trying to pin it on me he was actually trying to say it was an electrical fire trying to say that it was my fault yeah yeah right to the end he was trying to pin it on me how’ they start the fire you well it was in the basement I think you know based
(59:21) on what I saw there because I went in once the police release the scene I I go in there and I look at the it’s in the CBC report I kind of the video of me walking around but there’s this like clump of like plastic stuff so I think it looks like car parts or it looks almost like it could have been like the side like the door panel the plastic door panel on it looks so it looks like maybe he lit some plastic a pile of plastic stuff it doesn’t seem like incidental accidental it seems more like it was this stuff He piled up and maybe
(59:55) started it on fire fire and let it burn and then eventually it started burning the drywall and then it got to the ceiling and started burning and the whole ceiling the beams and everything are all burned out everything was so it feels like when I look at that it was burning for quite some time it wasn’t just it wasn’t like a kitchen fire that got out of control right it looks like he was maybe enjoying it and that’s the thing that some witnesses described to me the tenant himself he was standing there outside the house just outside the
(1:00:28) front door standing there watch watching as the smoke and the Flames was just watching perhaps enjoying it he seemed like he hated you so yeah there it’s it’s it’s a strange thing you know what I mean I understand disputes get a little crazy and then there’s hate and there’s anger uh but it’s just some point I don’t understand stand you know this guy was fueled by something something else something else I can’t uh can’t describe and uh like I said he’s he’s passed away now so he’s he’s he’s died uh New Year’s Eve passed
(1:01:14) away so uh when the house is being rebuilt how did you pay the mortgage did you have was there business Interruption Insurance yeah oh so the insurance company actually was paying me right rent as well so they actually covered you had you had good insur you had proper insurance for rent yeah I I I I even described to people how ironic it was that the house had to be burned down to finally get rent because he had he had gone by that point uh nine and a half months without paying rent and so he finally had to leave the house
(1:01:46) because it was completely destroyed and then finally I was getting rent again strange and I his his rent amounted to his rear amounted to 26,5 26650 in a re but I’ll never see I’ll never see that again and your insurance and your insurance covered the entire rebuild and they paid your rent so that you could pay the mortgage right from that point they paid the rent and they they covered the rebuild they they covered the recover recovery which is a core part of this right one of the things was to uh early on they boarded
(1:02:27) up the house which in my mind it was to keep him out but smart they boarded up the house no I think it’s the right thing to do but in general but yeah so they boarded up the house and then they uh um then they put in space heaters to keep the house from freezing because it was in January that the fire happened uh in fact maybe a week a week from now it would have two two years two years now so uh that recovery process was crucial and and probably pretty expensive at the time uh and so they covered the recovery
(1:03:01) the uh and then the disposal and then they had to gut the house you saw pictures of it gutted they ripped out everything right down to the beams yeah because they have to yeah and um and they they covered all the rebuild and everything the contractors yeah well thank God you had business Interruption insurance so I believe that that needs repeating is you know if you’re landlord have the proper landlord insurance so that you have business Interruption because if you have regular homeowner insurance they they may not pay your
(1:03:29) your rent so true and then you’re still paying the mortgage a lot of landlords don’t know that there is a different kind of insurance that is you know as they sometimes they call it the um pent Insurance maybe it’s just called business interrup in my policy it’s business Interruption Insurance because it’s a commercial policy for rental property indeed and it’s I often say to people if it’s if it’s like $80 a month and you’re not it’s not the same it’s not the right Insurance like this is more expensive that’s how you know
(1:03:57) that’s way more expensive I’m like at least like 240 260 a month for my duplexes exactly I was like 250 a month so that’s how you know you’re probably on the you can zero Inn you’re covered yeah that’s that’s just the first stretch that’s the high level keep as you look at your policy and the rest but yeah a lot of landord don’t know that about that type of insurance and how how that’s important to have uh because it protects you from what I went through and uh you know I didn’t know either yeah you know uh thankfully I had
(1:04:29) that insurance but in the early days I didn’t know about that kind of insurance until I I learned could have been dangerous we all have to learn right could you could been months with our friend well I would have been ruined months more did that the ruin part of that book didn’t come true thankfully but I could have been completely ruined and I think he was banking on that he was banking on the fact that perhaps I didn’t have the right insurance I didn’t have insurance and then that would have completely ruined me
(1:04:56) you mentioned before we’re recording he had tenant insurance so he did yeah properly he should have canceled it first and then done it well perhaps but insurance didn’t really C like it I don’t I’m not an insurance expert but I don’t think that the insurance from his side even when he was declared at fault by the the company clearly they they they saw him at fault I don’t think it covered a lot of the rebuild part of the uh process I think it and then he also made claim to some of his belonging yeah so no doubt some of that insurance even
(1:05:29) covered that right so I don’t I don’t know what the ratio of his personal insurance and like I mentioned it was the same company so you know I was like and I even said to them well why don’t you just kind of Talk Amongst yourself and decide what covers what yeah you know you guys talk directly because my understanding of insurance is that your insurance will sue him his insurance because right the is liable right and they’ll Sue because he’s got insurance so they actually have recourse but I’m not sure they Su approbation or
(1:06:01) there’s like a a process where they kind of uh lock down your uh policy or something like that and they don’t release it until they’ve decided whether they’re going to sue and uh I don’t know what they did but that that was a part of the process and uh again what I don’t know how that like would would an insurance company Sue themselves or would they kind of Sue the person personally would that be a process like if you cause they just settle or they would just cut bait and they know that they’re not going to get
(1:06:32) anything right they’ve got a they’ve got to honor their policy but then on the other side they know this guy’s a dead beat and he’ll never pay up so why why just you know that’s why that’s why has Insurance um but so I’ve actually had this from from my clients as well is that one attendant caused a fire if um my my clients had tenants the upstairs who weren’t at fault for the fire they didn’t have tenant insurance but they didn’t have the money for a hotel so then they asked my client for funds for a hotel and that’s what tenant insurance
(1:07:03) is for that’s one of the things the tenant insurance covers so could you imagine if your tenant asked you as well Hey Kevin you put me up in a hotel four stars are better it’s in the book but I I texted him I I said okay this was the next day and I said who who started the fire and he he initially said I don’t know I got a lot of things to deal with so there’s some bad words in there but uh and I said you know you can tell me who you know who started the fire who started the fire and then his response was was it
(1:07:38) you like you were in the home without him knowing gu the worst the worst at this point his son was in jail for arson and of course I didn’t know at the time that there were charges no the police didn’t tell me nobody no the the I talked to the detective he didn’t tell me I I still didn’t know I didn’t know from the victim didn’t tell you these things uh the case that went to the courts I never I never found out how it ended I I was not notified at any point during this this case why wouldn’t they want you as a witness you’re the victim
(1:08:15) I don’t know but I had no involvement and nor did they tell me or or or share any information I had to go looking for it and I eventually did get I did get the information from the courts but it was a process it’s in the book but uh you know honestly it was not uh it was not uh it was not great to think that that something like this would happen and I would be left in the dark completely about what was going on you know even at the fire at the point of the fire they posted a cop there for like two days straight to keep everybody out of the
(1:08:48) house and that cop didn’t even tell me what was going on he did you know I show up right at the point where the fire happened and I’m there the same night and the cops like like well call the detective I can’t tell you anything but you can’t go inside now what are you doing with the house now the house is rebuilt I move back into it and uh I’m living there so that’s where I’m at now uh what comes next I don’t know uh don’t basement sweet it out I don’t know if I I can do that again I’m still not quite there but uh that’s really the
(1:09:24) only option sell the house or rented you know I think number one is the are you going to do any more investments in Ontario yeah perhaps it will happen you know we I’ve been looking at uh other other properties I’ve been looking at the maybe a property closer to the city I I I would I would do it again uh I just it’s you know I’m taking time to recover and you know like to be fair I I expected him to come back I expected to see him I expected him to consistently return and and to fight and to be a problem you know I I knew his car model
(1:10:06) and his plate number and I would you know I’d scan the plate of any car that I saw that was like his car I’ve only since started to just sort of ease up on the sort of the the sort of reflex things I used to do he came well he came to the house after the fire and he he he was you know he drove up he came to Hamilton from aswa no he came to my I was in aswa and he came to the house okay okay and I don’t know why I was there at the time but uh I was working on the door he had destroyed to the garage so um so I’m
(1:10:39) there and then he drives up blocks my car blocks like blocks my car in the driveway he comes out of the car starts screaming and hollering at me he brings two other guys out of a out of a Jeep he uh he kind of comes around my car and then he there’s a box there and he kicks the box at me you know uh which thankfully didn’t hurt that much but you know continued to scream and and and act violently and uh even said that he would uh he’d be on me like for another couple years that I couldn’t get rid of him oh please no no I didn’t but at some point
(1:11:18) like I had to just kind of keep my cool I was angry and yelling too uh but you know I I I expect that to reoccur like that was like a month and a half after the fire I expected him to continue that sounds for a harassment yeah and he was scream where’s my chair where’s my where’s my uh he doesn’t even live there anymore he went where’s my rubber mats he had rubber mats in the driveway and he was screaming at me for rubber mats you stole my propane tanks well whatever is here is here you got propane tanks go
(1:11:48) get them so he told his buddies that he came that came in the Jeep and they went to the backyard and got the propane tanks because he was a big growop Enthusiast but oh yeah he was running a growop in my house as well so he had this little like one of the bedrooms in the four-bedroom house and one of the bedrooms he had this uh sort of hydroponic tent that filled the entire room and he was growing all sorts of a legal amount or well obviously a legal amount because he that that tent was probably filled with all sorts of plants
(1:12:22) and he had all this paraphernalia for growing and sting and all this uh uh uh that’s why he really bed at a lot of my inspections I didn’t know at the time but he would really got bent out he destroyed the house when I tried to inspect the house uh and that that ultimately I would learn later because that really put him out because if I inspect the house and I see this big grow up in the house that’s that’s bad for him and he had to clean that up shove it all in the in the in in the in the closet so you know I learned after
(1:12:54) the fact a lot of the really a lot of this act you know a lot of this Behavior where where sort of stem from you know what I mean he was in the wrong and he’s giving you a hard time well yeah you know sometimes you just don’t know why you know I in a lot of ways I thought his behavior was very erratic and I didn’t understand at the time okay I want to inspect I got in there I left it it took me about 20 minutes 30 minutes you don’t have to go and destroy the back sliding door he smashed the window and he smashed the door to the
(1:13:24) garage he smashed he you know he he uh he smashed the garage door sh he filed off the handle off the like you don’t have to go that far it seemed very erratic and overblown so uh yeah at some point I was um I didn’t understand that but that that that understanding would come over time when I started to fill in the blanks with some of this and writing the book kind of helped as well a little bit in a way of like okay well help help in the blanks you know it sort of prompted me to talk to people like neighbors talk to
(1:14:01) uh you know working with other people that were sort of like the the fellow that uh the vehicle he was um burglarized his vehicle before the fire he started the fire but just before that he went into that vehicle and stole um um it was a fishing electronic fishing gear thing uh so anyway I eventually managed to talk to him and we had a long discussion about what happened and what kind of played out and uh and why he wasn’t charged for that for theft and then you know Barry is the tenant but Barry eventually actually gave him a a
(1:14:37) personal check to pay for the for the device and the cops Let It Go in the moment so you know a lot of this was a process of trying to fill the blanks in right for me when when you’re like blind to all that’s going on and just trying to understand uh after the fact you know you try to understand where where does this come from how does this happen why why are those folks like they are you know I do get into a little bit of this like why what do I know about these people why would they be like that why would he be
(1:15:12) like that you know what I mean so uh it’s a it’s a process of discovery and uh I just wanted to know more and so that’s part of what the book’s about as well I want to Chronicle the experience but I want to to understand things better because a lot of it I was in the dark like you know one day there’s there’s a house and the next day it’s burned completely destroyed what you know uh for me it’s hard to just sort of accept you know I want to know I want to know more right and then you were on the CBC discussing this in your property yes of
(1:15:51) course the CBC um you bring it up uh the CBC interviewed me on the national that’s uh that’s me going into the basement so this is post fire how how long after how long just after the fire so you see all of the that’s the drywall burning and then the the beams were all burned out it primarily went out actually oh just briefly you see the uh that clump of plastic whatever this we believe the Fara started and that’s yeah it seems obvious where that oh there it is so all of the sort of clump of plastic uh burned like it seems like that he
(1:16:30) kind of made a pile of some plastic something and maybe it started that way or maybe he had a like look like that right there see see that uh it looked like maybe the piece of a car in a way but it’s possible maybe that he dropped a uh uh a candle or something or it and then it started to burn and you never really kind of stopped it or noticed it right I don’t really I can’t well end of the day they were they were convicted is that the term or they were charged with arson right so the sun was charged with arson
(1:17:08) now uh I like I said I don’t know the outcome of that that charge so weird but I feel like um and he’s in an asylum or something yeah I feel like he was committed to a a mental uh what do they call these folks the places a mental institution or something like that uh and I I would presume that you know they considered him a danger to society to society so they they they wouldn’t even let him out on supervised visits but even more strange or perhaps interesting was that the ARs inch charge came with a uh peace Bond against his
(1:17:44) father so he was ordered not to uh not to be anywhere near his father who who they live together right the father is the fellow on the book on the cover but He was ordered not to be anywhere near his father for a certain amount of time and also ordered not to be at the house so not only is the LTB taking eight months to get around to give me possession of my house legally the tenants at least one of the tenants wasn’t even legally allowed to be at the house but still was a tenant legally so it’s just all you would think that it’s
(1:18:20) you would think that if there’s a peace Bond on somebody that legally doesn’t allow them to go to that prop that that’s enough to just and the tency yeah terminate the tency it’s over nope nope do you see why I’m scared you should be I am I’m sorry to say but uh you know I don’t want to I don’t want to freak out but uh there are is a bit of a Minefield right now and you know we really want to improve this environment for everybody involved and uh same here for the betterment of our society yeah you know love to see
(1:19:02) there just needs to be basic Justice and uh and incentives need to change and we need to just you know change the behavior you know we need to uh make sure that people if they think about doing something bad they think twice so let’s start with what what are the lessons what could have been done differently with the screening What would would you B if if fast forward to today’s times because technology today is better than ever and for tenant screening tools what would you do differently today and you’re a tech guy indeed I am
(1:19:36) um first thing I would do differently is number one uh don’t just trust what people say honestly I I I I think I I’m trusting perhaps to a fault but I think that you know I don’t always just accept that people will say something and they’re not going to lie to you so I think that that was first and foremost a lot of the stuff that he showed or said I just trusted it on on on face value and people will lie to you when that happens and I think that we you know trust but verify as they say right and I didn’t do as much verify as I did
(1:20:14) trust so that’s that’s number one I think two I I would have made use of uh the the the screening tools that were available even then and there are some great robot screening tools that are available out there now anything from rent Panda to single key to front lobby they do their own sort of screening rent check all of these tools are out there and were out there at the time uh to you know take advantage of of of screening better I I accepted the um the credit report from him directly and you should never ever accept the tenants credit
(1:20:50) report you go to a you know go to a reputable place go to eifax go go somewhere and get the report on your tenant yourself and get it directly from an institution that you trust uh so that that is everything G be photoshopped of course everything assume everything has been photoshopped so how would you how would you operate differently right manipulated anything can be manipulated so all of those things also I’ve also looked at his former landlord and uh often they say go two landlords back or even sometimes even further uh and I I
(1:21:24) you know I left it at that and so there was a glowing reference and that was that was it so that’s another thing I perhaps would have done differently or or tried to improve the process uh some of this is just low Tech you know what I mean one of the one of the biggest things I could have done differently was just trusting my gut you know there were things that he did that were unusual but they serve to move the process along faster right he was eager to rent even I think in the early days in in the first initial contact he was ready to sign the
(1:21:57) lease before actually seeing the property now I you know uh I was adamant that you need to see the property and eventually he came to see the property and he for a local person that’s really odd right so that that that should have set off red flags and you know my gut was feeling something unusual about this but in in my infant landlord stage I didn’t really you know I didn’t know better but that kind of thing is like trust your gut when something feels odd don’t you know stop and think about it stop and and and figure out what you
(1:22:30) know uh so there’s these little red flags that he he kind of had to tell me told me that okay maybe there is some uh uh uh something going on and it’s totally a low Tech situation you know what I mean look at look inside their car try to go to their their property and and see how they’re living now you know what I mean meet their landlord at where they live now to verify that they’re you know what I mean do these things and sort of trust your gut you know um and that’s one thing I perhaps I could have done better you know talking
(1:23:02) to the landlord reference we did that and it went well of course you know uh another thing I I I think I I should have done better uh is get ID get get more details I I kind of left I you know I understand the idea of feeling you’re intruded upon by providing all of this information but I should have at least gotten a driver’s license photocopy or something you know what I mean that’s standard practice and I I didn’t do that so I just came back from China I feel like they’ve seen me naked I hope not to to give context uh
(1:23:37) every pretty much any uh any my train ticket uh to get into any major attraction to buy the ticket they had they required my passport and then my passport became my uh like my entry my my use how I entered so they’d had devices to scan my passport and then they that’s how they verified I had a ticket the ticket itself was useless what about the scoring system they have some sort of a score I’m just a tourist so I don’t think I so they didn’t actually affect you in any way or did you see people being scored or did you have a sort of a
(1:24:10) score attached to you somehow while you’re moving around again I’m not a citizen so I don’t think they maybe but again yeah maybe if I if I did some sort of wrong I’d start a file oh hopefully that’s not the case yeah you know but there there’s cameras everywhere interesting yeah cameras and so from like for for like that Society ask someone for their picture of their passport no right here I have it on me at all time yeah you would get in trouble I guess if you didn’t uh produce yeah in China you’re required to carry your
(1:24:39) passport as a as a non-resident yeah I think I think that’s part of the reason why they they require your passport for entering any any sort of very like for example for a Canadian if you’re going to the C the analogy would be if you’re going to the CN tower you have to have your passport if you’re a non-citizen like the citizens had their own smaller card but again they’re using their anation card to gain access to train to to the to the major trains and the uh major tourist attractions so yeah really weird a lot of uh so asking for ID is
(1:25:09) like no problem for me implications there you know tracking people and you bring all that information to the top and then they know exactly where you went every every moment they know where you are imagine your 10is social score now though I can only assume it’s low but uh yeah so those are some of the main things I would do with screening but they um and our our Wiki databases has a ton of screening uh uh screening processes that come from all different places from different uh we actually bring together a lot of different uh
(1:25:45) people that are known in the industry like a fine uh rent Panda has a really great screening heart har togman who runs rent Panda he great insights about screening and how to approach that um you know a lot of this stuff is just like trusting your gut and trusting when you see something that doesn’t fit doesn’t make sense and being patient I think what what tenants do that are when they’re professional or they’re looking to do bad things they want that process to go fast fast and you screening yes you want to slow it down you want to run
(1:26:22) you know you want to take a piece of paper like a a pay stub or something like that I should have verified his income better as well by the way but you want to take that and you want to just stop and look at it and take your time look for inconsistencies look at the date is it really out of date look at look at the uh look at the address is it the same address as the address he told you was his last you know on and on and just slow it down and focus you know what I mean yeah and call the employer yeah and call the employer of course and
(1:26:51) call and verify and you know always trust and then verify or verify then trust depending on who we talk to I just I just put everything in the hands of folks like Ren Panda all uh Hart’s been owner of Ren Panda’s been on the show Hart uh Viller has been on the show twice already and waiting for him to come back a third time Zach kilum is a good old friend of mine from front lobby yeah and they’re all great and the idea with these Services they’re amazing and to use them as a as a part of the process is important I always say to the
(1:27:25) landlords don’t really ever uh give up that active process you know what I mean use these services use your tools use open room.can the tenants but do take an active process with this you know what I mean because when you combine it all together when you have rent pan to screen your tenant or you have single key screen your tenant and then you are actively involved in screening them as well and then all of that tied together it’s going to be very difficult for a professional career professional tenant to get past that sort of uh wall and
(1:28:05) sadly the way it is now though it’s not a guarantee that they won’t get there right you know we’re still seeing people that do all the right things and still these professional tenants are finding ways to you know what I mean so we have to be extremely diligent all the time and use all the tools you can like there are there are such great tools now like rent check does some uh background checks on on people they can do that you can do criminal checks I think um is a front lobby but some of these Services now they they they offer a more in-depth
(1:28:39) criminal check and they do uh other background checks on people that can really kind of uh uh surface some things that you might want to know especially if it was an RS in charge right and things like that so you know um yeah you know use the available tools you can and then you know be actively involved you know I do want to add though that with my from my experience especially my including my clients it’s not the we uh I can’t nothing comes top of Mind where any of my clients were Expos had a had a professional tenant it was more more of
(1:29:14) the problems came from a tenant who broke mentally or health during the teny right so the story I’ve been sharing is U my client in Branford the tenant’s Health C basically just fell apart uh they were uh stuck in a bed plugged in on life support no rent was coming in uh wasn’t paying utilities but the the Utilities Company knew they couldn’t shut they couldn’t shut it off because if they shut it off he’s dead and but again now we have the private landlord bearing like Bas paying for this person to be there yeah that’s tough and
(1:29:48) there’s no and and uh and that’s what this that’s what the systems become it’s on it’s on the private landlord to support for those who can’t protect themselves right and that’s certainly a bigger conversation but it’s true it’s it’s the environment now that it’s the the the the work of social Outreach and and even uh you know housing social housing is has been put on the private landlord uh to a certain degree to extreme degrees and it’s a you know it’s a burden that ought to be footed put by the different levels of government but
(1:30:23) they have they have sort of sh their responsibility in that uh and and and even more sort of absurd as the government has started to get into you know meddling with private yeah uh the private Market interests you rent eviction bylaws and things like that whereas when when they should just stay in their Lane and focus on social housing and increasing more beds and more more uh more properties and more robust systems that allow landlords that um that are frankly just running their business allow them not to go and be
(1:30:53) ruined by an event that is unexpected don’t meddle with the private when when like you mentioned Singapore you were in Singapore I was in Singapore I think Singapore has somewhere around 200 mli sorry two around two million public housing units where the average rent is about four or 500 a month for an apartment Hong Kong the average rent is about 3400 a month for uh for a government assisted uh supported building and they have about 2 million citizens in those in those units right and why can’t we be like that why can’t
(1:31:23) we have our government all levels of government focus on social housing and then provide beds for people as as is their directive versus making us a political problem of course um but again like you know for me I’m just exiting the environment just going to an easier playing field and a lot of this is all like multiple levels right you’ve got anything from the shelters to the hosts to the uh uh the social beds to the to the temporary housing of of like hotels you’ve got the more long-term housing you got subsidized housing you got all
(1:31:56) these levels of social hotels yes all of these levels refugees in hotels and then you got the Peter BR style like um uh small sort of ouse type of houses that are transitional housing all of these things are all on the table and the government could rightly just focus on that and then do that well and become more like now certainly Singapore is not an ideal uh in a lot of ways but to be able to get to the point where we could have you know every single person we we the government has enough money from taxes it would be to get it to get to
(1:32:30) the point where the government actually is doing their uh jobs and and providing for people that need supports for housing to to get them supports for housing so then you know the the private landlord is not having to yeah don’t make us do it support freeloaders for for six eight months or 12 months you know I mean like uh we we see AAR now go over $100,000 and it’s uh uh it’s it’s crazy that the LTB is still their jurisdictional limit is 35,000 where it’s not long now to get the 35,000 even rents are dropping but it’s doesn’t take
(1:33:06) long so um that’s enough money for a house or two in the states to buy you know I I I can imagine that some professional tenants are taking that money and buying houses with them that’s not encouraged them so Kevin let’s talk about uh I think every Ontario landlord should be a solo member would you disagree yes I I I I do agree and I think that also that every past landlord should be a solo member and every potential future landlord should be a solo member so there’s a ton of home there that are possibly going to be uh renting out
(1:33:46) their basement or renting out of property or investing in a property everyone that is uh likely to in involve themselves in rentals ought to be a member learn about how our environment is in Ontario yeah and know before you go and do it you got to know as much as you can that’s so important so I appeal to anyone whether it be a homeowner or not whether it be a former or future landlord we want to have uh everybody that’s that’s that’s involved in this and has a stake in this right and we have upwards of 4 million I think uh
(1:34:20) homeowners in Ontario right now uh I think north of 600,000 landlords uh perhaps so there are a lot of landlords out there period anyways um yeah and and really just to get to the point where we can be actively involved in in in changing the course of this this Justice conversation because the government it’s been said is often uh uh worried about the tenant population because of their numbers but what’s important more voters amongst them there are way more voters that are homeowners a ton more voters they should
(1:34:57) be worried about people that own properties that could rent or will rent or might have rented in the past that is a constituency that is the powerful constituency and if we built that fear for that group of people in the government there may be a point when they start to take notice and start making real change right it’s power in numbers so regardless we we just ask uh our our our landlords or anybody that would like to register with solo to learn more about this process learn more about the RTA learn more about anything
(1:35:28) you want to learn um go to members. solo.cup you can get into our Facebook group you can get into discussions you can get into uh webinars Wiki we we do a ton of educational content and try to uh uh try to just learn from our experiences you know what I mean every single part of my experience not only went into a book it went into uh every part of everything that I learned from my experience went in you know was injected into solo and so what we have is this sort of this thing that is growing and it’s growing fast but it’s every landlord’s
(1:36:11) experience is just being brought into the solo Collective and we try to pass that on to every landlord oh you’ve got fraud charges well pass that on or you’ve you you know you built an Adu in the backyard well pass that on learn about how to do that oh you you work with the sheriff and you got possession of your property pass that knowledge on you know it took 14 weeks to get peeled to come out to uh do an eviction a possession Handover pass that on that information you know what I mean yeah so like a cloud of knowledge it’s just a
(1:36:43) very uh a growing group of people that is is building that idea of just building knowledge within the group Source knowledge and that’s yeah that’s that’s what we’re after you know we’re after landlords that come to us we help them the best we can and they come back and help us help others because through all those experiences we learn so much right I’m not saying people should only join solo I think there’s so many great organizations I think it’s just one of um and I believe every landlord should get themselves educated because they
(1:37:14) saying I I don’t know if I got it from someone else let’s assume someone else got it because I’m not not a smart but the thing was uh you either learn how TB RTA works or the tenants going to teach you which you would which would you prefer right right that makes a lot of sense and it’s it is true though you’re G if you don’t learn it that way you’re G to learn the other way and the other way is hard way the hard hard way and then the cliche a pound an inch of uh what an ounce of prevention is worth a pound of the Cure and and you
(1:37:46) know so joining solo would be prevention using these screening tools you recommended would be prevention and that’ll prevent you from the tons of pain course and you know people only have so much time in the day yeah and it’s understandable you know what I mean and we can’t we can’t learn everything in a minute and we only have enough attention span for yeah x amount of information passive we we we’re very directed in what we do and we really try to hone in on what people need to know the best we can and provide you know a
(1:38:18) lot of people learn in different ways you know someone might learn by watching a video where others might learn by reading information or maybe people like to read a book or I’ve never made an audio book yet but maybe that will come people want to hear the book but at some point uh we try to offer every kind of way that people can actually get themselves into a more learned position because I often hear from people all the time I’m thinking about renting out something or I’m thinking about this or you know um had a bad experience with
(1:38:48) renting how is it how are things right now you know what I mean my friend went to lb uh uh I could I could rent my condo out I was thinking what what do you think is imp possible or a good idea all of these questions come up all the time and it’s the prevention aspect it’s the taking a little time learning a bit more learning about the market learning about your you know the environment of Ontario and learning about the risk that you you face you know there’s a lot of this Doom and Gloom but understanding really understanding the risks involved
(1:39:21) and making an informed choice you know more than anything you know you if you choose to do something I made a choice that was not an informed choice you know I rented my property and I did not inform myself in any way shape or form so when you know and then you can decide you can make a better decision you can say maybe I don’t want to do this or maybe I do want to do this I can accept the risk I can you know I got I got a little bit of savings I can you know I got a little bit of a buffer maybe $20,000 savings I can I can handle to
(1:39:54) wait for the LTB I can embark on this uh you know so each to their own but making that informed choice is just a safer for everybody in this environment right now for listeners interested in helping out solo for example it’s it not for example it is a nonprofit no charge membership right if someone wanted to help out how can they help yeah so they can get in touch with us there are several ways there’s a ton of information on the website about uh uh you know um about us and how to how to contact us maybe getting on the mailing list but
(1:40:28) more than just that you can perhaps email us at solo solo.con teers we’re always looking for people that have you know skills in particular Industries you know in in Tech or in other other avenues that can bring bring that to the table you know we’re always looking for volunteers so just open the conversation say hi you know uh I saw you on on a podcast and in the CBC or exactly so so you solo solo.
(1:41:02) con say I’d like to help out and then we can have that conversation and you you have opportunities for sponsors because we at share are a proud sponsor yes of course uh we have recommended professionals and our recommended professionals we do we do vetting of the professionals but we we welcome this you know what I mean and you get in front of our small landlord community 8,300 of them yeah of course and so you you know we do some vetting and then uh you know of course you can uh sponsor and be on the website and uh you know be part of the recommended professional list
(1:41:33) anything paralal we’re always expanding that list the pargal collection agency screening tools on and on and on and we have a lot of deep Integrations that we you know we’re trying to build even more on that concept because this is really what support solo at the end of the day we really you know we want to keep the lights on and obviously we have to do that with uh uh W with money and so these are avenues that we have um to to make that possible any inperson events for planned for 245 oh yeah we have uh you know uh we have
(1:42:05) an annual Gala that we run and we run that in the fall and that will uh there will be a third annual Gala we do meet and greets all the time we were looking at doing it in Ottawa uh perhaps again Niagara Falls we did one in Niagara Falls so we try to do little gett togethers as well we don’t actually have it on the on the table as as far as the date goes but we we might do two of those in in a year uh maybe more depending on if there’s local landlords that want to get together oh there are right uh High friends call yeah we do
(1:42:37) that we we love to do that and then our our board will try to get out there wherever that is you know um and we do we do events that are smaller local associations so I’ve spoken at Peterborough Landlord Association we’ve spoken at the Brampton Landlord Association so local local associations we go out to their events and anytime they have uh they they welcome us to speak or they they want us involved so we work hand in hand with those guys and we support them the best we can um and yeah we uh we’re we’re lobbying the
(1:43:08) government so we have uh Lobby days at Queens Park we did that U last last November looking to do more of that although that’s not a public uh public thing um and yeah we we in the past have done protests we don’t really see a protest happening this year but it could could come up that we’ll protest maybe a federal one well you know that’s that’s that’s what I wanted to point out that this year seems like a very uh political election year we’re obviously going to get a federal election but it’s entirely possible that Doug Ford calls an early
(1:43:41) provincial election they’re a sort of ride on the uh coils of the PC party right especially if they’re on the ascendency in the federal level so we could see to dominate yeah we could see a federal and provincial this year which would sort of be uh kind of a big transition year for political interest and especially for landlords um and what what is it going to look like uh uh Pi PF uh in the federal level will he uh will he improve the lot for small landlords or not so you know looking at that and understanding what what those policies
(1:44:18) are what you know what ramifications they are they they almost can’t get worse but yes they can get you know if Pier does nothing but kill the new capital gains inclusion rates that’d be massive I think yeah maybe you sent that to me but yeah I think it’s likely yeah it’s it didn’t pass it’s not gonna he’s going to kill all that stuff and you know you know what great news that is it it is great news you know what I mean uh less tax is always great news and uh for landlords yeah you know we’ve already had a rough go I I I just um
(1:44:54) I don’t know yeah it’s it’s it’s good it’s good news because on sh landlords are pretty much only in it for Equity gains so capital gains right so if then then you’re going to tax us so you just took away some of our benefits of being a landlord right yeah there’s been talk of like uh unrealized gains Tex this idea where they would go after won’t be under po be assessed unrealized gains but obviously PV would never do that so yeah um that can be down the road for the next govern you don’t know right you never know right PF could come in and
(1:45:26) maybe it’s not a landslide he was thinking and then you’re another minority government and then NDP is now you know holding the sway of Power with pev and maybe that Dynamic looks even more weird so you have dental care and other things that NDP is pushing just to keep him in power like you know the the unrest is the sort of the challenge I think on the federal level right anytime there’s this sort of transition time where they go back to like uh Joel Clark and you know ascending uh or uh until there’s some sort of like a
(1:46:00) normalization and then I think you had uh Mo Rooney come into the into the mix and then kind of stabilized but this sort of uh transition period where one guy leaves and another guy and then you have maybe a temporary uh person comes in like uh Kim Campbell or Paul Martin comes in takes over the spot and then he kind of loses and then that kind of unrest and uh in the environment really I think yeah spells trouble for a lot of things you inaugurated right and we have a lot to deal with we have usmca is coming up to be re renegotiated the
(1:46:34) possible tariffs there’s a lot of you know things that need to be tended to that kind of will they or will they not but this this unrest at the federal level can spell some challenges so I just hope for you know a resolution people will vote you know waiting till March I don’t know if that’s a great idea a but they will vote they will put somebody in power you know and then it just sort of normalizes the the environment where you know they can focus on dealing with the problems and dealing with what what has to happen
(1:47:06) right and then based on the current polls The New Normal is looking like the opposition party will be the block back claw and that’s not a first not a first that’s definitely interesting because their agenda is really different it’s very unusual that they don’t have a national interest agenda exactly one party is is got so much power but it’s not uh um it’s not new of course but it’s it’s kind of sad see the Paul because that’s not new yeah it would it would take everything to the right you know what I mean like every single um
(1:47:38) everything is right laning at that point NDP is like Niche the Liberals would be completely destroyed and then you know it’s a whole new candidate it’s it’s good still it’s good good though it’s good change has to happen um Kevin you’ve been really generous with your time or over time uh any final words you like to leave for like a newer investor or someone considering entering the market yeah you know I would say most important just take your time you know uh really look at what you can learn out out there in
(1:48:17) the market you know talk to people uh join solo reach out to any of us you can call our phone number 6477 N2 4951 it’s on the website just really learn as much as you can about what you’re embarking on and uh and then and then go for it you know what I mean there is uh there is no shortage of people here at solo that will do anything we can to help out whether you’re a landlord in crisis or you’re a landlord learning to be a landlord or you’re a landlord that is somewhat reluctant we’re here to help mhm so uh reach out there there a still
(1:48:56) lesson from Mo Buffett that I’ve always referred to he was actually answering Tim baris’s question about uh about being a stock investor and and Warren’s answer was uh if you’re not willing to invest 15 hours a week in researching stocks uh then you are a thus and amateur invest in the index go back to your life right and I think for someone who’s going to get into real estate investing I think is no different you should be investing at least 15 hours a week to research or else you’re going to run into into a
(1:49:26) lot of problems I agree it makes a lot of sense you know what I mean you’ve got to take on that responsibility and take it seriously right uh I perhaps maybe didn’t take it as seriously as I could and I’m not the first to share this you know we will tell you the same right the take it seriously take the time you know stock investors too take it seriously is it 15 hours or a week or 15 like just take the time to take it seriously because the the ram ifications could be catastrophic if you go wrong so just uh
(1:49:58) yeah it’s a great it’s a great thing to be guided by you know even if it’s Bitcoin even if it’s gold take 15 hours a week for a while before you get into it yeah there’s no um some people are in precarious situations maybe they’re in a in a bit of a hurry but I think most people when they’re looking at investing they’re not they’re they’re only rushed by their own personal you know need for something or they feel that the econom is in going in different directions fomo or formal foro yeah so you know don’t you don’t have to rush take your time
(1:50:28) learn understand read a few books I’m sure you have many book recommendations but you know learn learn what you’re embarking on and getting into and it is still good it’s a good environment it’s a good uh Ontario is a great place to invest you know you can be a landlord you can be an investor you can be an owner and live in your property and there are Equity gains in real estate real estate’s still really good to invest in um so uh we want a healthy market and so that’s that’s what we’re after and we just hope people take the
(1:51:00) time and take it seriously I like chat gb2 chat GPT as well for research Source I was actually messing around with it BEC after the whole uhh Trump trolling Trudeau about Canada being the 51st state and then the new y New York Post came up with an article like absolutely not we don’t want Canada some of the points where you know our lack of our we have very low GDP we’re our GDP per capita is about 70% of an American so we we we earn our revenues per do per Canadian much lower 30% less than an American um and what was it uh if Canada
(1:51:38) became a state it would be the fourth poorest state in the of the 51st 51 states below Alabama now factor in that so we’d be the fourth lowest yet our average home price in Canada is just under 700,000 Canadian Alabama’s average home price is 225,000 American it’s wild but if that were to happen hypothetically I don’t think in a hypothetical we become the 51st state do we get richer or do we get poorer those with hard assets will win it’s always the way they’ll you will if you with hard assets will definitely outperform
(1:52:20) outperform those without so this be devastating for yeah you know I uh you know we’re we’re a branch plan economy in the end economically we we’re so tied to the US in in a lot of ways we are kind of another state even though we’re not obviously we’ve we’ve struggled with our own identity as a Canadian whatever culturally you know our Reliance on on on immigration while good is is often uh been challenged by a lot of people our country especially at the top I think Canada is you know in need of an identity and to uh you know
(1:53:01) uh we always often look to our Southern neighbors for uh monetary whatever or Identity or uh or cultural interests you know what I mean all this stuff tends to bleed into us in un unusual ways we send all our comedians to them so we you know I um I don’t I think this would be in a way you could make the case that this is often just a symbolic thing he trolling because it is a trolling move because it’s mostly symbolic as a North American environment we’re so directly intertwined with 1 Point whatever billion trillion dollars of goods that
(1:53:40) go back and forth that we our our supply chains are like one big entity in in the end anyway we’re very much like one other states if you look at the amount of trade that’s done yeah exactly I’m I I’m I’m a Nexus card holder I can walk across the border like it’s like it feels illegal yeah you know what I mean largest undefended border in the world yeah exactly so you know this this environment is uh we kind of you know uh we’re we’re we’re we’re missing the real point of how you know our sovereignty sort of uh rears its head how do we how
(1:54:12) do we culturally uh abide by our own uh set of rules and how do we find our own identity within this environment where we’re overpowered by the Captain Americas of the world you know what I mean there’s no Captain Canada that is you know overtaking the US right so well there’s a captain conu I think but anyway you’re right at the end of the day I think we’re you know these are these are distractions from our real questions of you know sovereignty cultural identity identity in the end what what do we do about Media news
(1:54:42) interest what what stories are we telling ourselves what are what are we as a country what do we want to be as a country those are the real questions the the the fake questions are these you know uh pictures of you know Trump in front of a a Switzerland he’s got a picture of him on a mountain next to the Canadian flag with the freaking mountain is in Switzerland what’s he looking at not Canadian so this is often I think uh where where we’re at in the world in our sort of discourse where we’re often distracted by you know uh distracted by
(1:55:21) shiny yeah squirrly things but agree it it keeps us from our our real our real questions which are are you know fundamental like if if PF comes in and and defunds or uh disbands the CBC we have a lot of sort of cultural uh questions to have to answer yeah I’m gonna watch my hockey net in Canada well of course that’s already been bled bled into sports net and it’s starting to look like uh whatever you know you think that they’re just on the precipice of charging people no longer making accessible even on Saturdays but you
(1:55:55) know we have some very serious cultural implications that might come from losing CBC but then is it a state-run operation or is it not you know these are Big questions right so uh my hope for the future of this stuff is just so we we have those those kind of conversations unless the you know uh all the people are saying that we’re going to take over Canada at end of the day I think we all need to uh rely on ourselves to build our wealth and take care of our families absolutely of course that should always be Priority One over what what Trump is
(1:56:30) saying yeah you know it’s important to trust yourself because you know you know what’s right for you and your family and don’t let other people tell you what uh uh what’s right for for you what’s the right amount of free speech what’s the right amount of phone time you know a lot of the conversations about whether kids should have a phone until you know whatever age you know a lot of these questions are very person for for you I think the Americans going to ban Tik Tok soon so we don’t have that choice it’s it’s likely it’s going
(1:57:00) to happen but uh you know I I tend to think these things will always backfire so people will want it more and they will get it more and they’ll side load Tik Tok left and right and it will be even worse for people but one never knows right Kevin thank you again for doing this well thank you irin I appreciate you having me taking the time and uh it’s been great thank you so much solo.
(1:57:41) por 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 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
(1:58:05) you’d like us to have on the show drop 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 and we’ll see you in the next episode until then stay smart SM stay curious and keep building that future catch you later

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** Transcript Auto-Generated**

Transcript:
(00:00) greetings from Phoenix Arizona uh where the opportunity sadly uh will be improved as with the unfortunate wildfires in LA and that’s not the reason I’m here I was actually here for other reasons for a workshop and Retreat and also obviously look at real estate um and the opportunity is likely great in uh the Arizona and Phoenix area anyways uh this show show this show this week’s show is titled ont rental market update with rent Panda and R rent panda is going to be sharing the owner be sharing what he is investing in himself
(00:37) where to advertise rental properties and where to look for tenants which markets are expected to outperform in Ontario for specifically tenant demand all this and more on this week’s truth about real estate investing show for Canadians since 2016 that’s right this show while not impressive in Flash is one of the the two longest running podcasts on real estate investing in Canada many shows podcasts have gone away many just just started almost no one else out there has over 300 300 hours of podcast content but uh even still this Market is forever
(01:07) changing my own investment strategy has changed based on what the market is telling me hence we all need to be up to date hence we have the founder owner of rent Panda my good friend Hart togman back on the show R Panda now manages properties all across Ontario and times uh and time the timing is uh special uh vacancies across Ontario are rising credit ratings among tenant applicants are declining inflation’s High landlord tenant board is at worse relationships between tenants themselves and tenant and staff Property Management staff is
(01:39) uh it’s all declining uh what better time to expand one property property one’s Property Management business part is obviously a good guy and he details for us his preferred investment strategy student rentals as well as which uh which which is actually a great Segway into me reading for you a chapter I just wrote and for my upcoming book the chapter is the best deal our client ever invested in it’s not what you expect it’s not one I would have ever anticipated either because I would have bought all of them the year was 2019 2013 non-conforming
(02:12) multif Family Properties were being cracked down upon in cities everywhere especially in Hamilton for a good reason tenants were getting hurt many were even unfortunately getting really hurt in fires due to lack lack or poorly maintained Fire Safety Systems uh if you’ve everone owned a property needing a window in a basement room where there previously was none or had to replace a fire escape you know the cost can be very significant uh fire escapes range between 30 to $70,000 for just just a three-story triflex University and
(02:43) colleges were growing in student population and needing more off campus hosing from private lion Lords uh student rentals uh in my experience are a best practice assessment for small landlords as the building and fire code requirements are significantly lower than that of a duplex we only have one kitchen so we don’t have the same fire risk and fire separation requirements as you would in a two or three or four family home now about the investment my property property manager and good friend Roger gave me a tip about a large
(03:11) home builder host Builder near Brock University in St Catherine’s who had new construction houses suitable for student rentals this was a high quality Builder they had won numerous awards for the nager region uh who had built now this is different this is Naga region back in 2020 2013 so the market wasn’t crazy hot uh they were actually build houses as they were sold as in they didn’t just sell it the whole plan it’s more like you know Mom and Pop would go buy a house and then they’d start building it one by one really different than the the
(03:43) world we see today and you one only needed a 5,000 total deposit 2500 upon signing another 2500 within within about a month this is over 12 years ago so so my my memories AR aren’t perfect now these were four bedroom uh four bedroom houses uh 1900 and 1700 foot semi- detached or town houses respectively uh but because we were PL buying off a plan uh working with a quality Builder who had capacity to do um custom work for us uh I was able to design the house to be an ideal safe city building and fire C compliant
(04:22) property for uh as many bedrooms as I wanted uh so I met with the vild designer and made the following changes to their plan he Shrunk The the principal bedroom formerly known as the basor bedroom to allocate more space for smaller for towards the smaller bedrooms to make them more equal in size converted the the dining room into a bedroom that I can now rent for 6,000 per year uh remove closet doors remove closet doors saving thousands of dollars these often get uh closet doors often get removed or damaged by students so
(04:55) why bother providing them and nobody complained not one finish the basement to include a three-piece bathroom that means a standup shower sink and toilet of course uh also in the basement would be two bedrooms each with an egress window which is an oversized window to allow some more sunlight and uh at the time the requirement was 4.
(05:21) 1 square feet in size which can be opened without tools for a person to climb out in case of fire uh all the walls and ceilings were insulated with fire rated sound insulation and drywall uh again these were all fire rated products we were basically following the Ontario building code as if the property was a multif family property ruins for the basement kitchen were installed uh at the time basement kitchens weren’t allowed nor will we be planning on on providing them uh to um so to limit fire risk uh but so we only did the ruins and so should the
(05:51) bylaws ever change or should our clients ever want to Suite the basement it would be extremely easy to do so uh no carpet we replaced all the pl all the carpet and the plans with uh car with vinyl plank as it is waterproof and Incredibly durable vinyl plank is basically the best practice of pretty much every real estate investor I know out there uh because it is so durable waterproof uh if there’s ever flood you can really generally just mop it up and it’s a much cheaper fromall it’s usually like half the price of a laminate and again way
(06:24) more durable than than carpet um yeah it’s just so many winds and and it’s way faster to install less tools are needed to to install vinyl plank or I old school because when vinyl plank came out it was called vinyl plank later it was called luxury vinyl plank so the acronym is lvp which I absolutely refuse to use anyways my requested change is added around 40,000 to the per to the price of the house which is a fraction of what it would cost us to have contractors renovate uh and existing house and so that would also have taken longer and we
(07:04) could have been at risk of having to get permits and of course there’s always delays in any sort of renovation project um the best now the best part here why this investment be uh became the best for that our clients have ever done was uh they can now include the cost of all these upgrades these $40,000 upgrades into the mortgage as the host would apprais for for all the work that we getting done and then and then in turn they can invest the minimum 20% down payment plus closing costs so by minimizing the investment dollars the
(07:33) return on investment ballooned as and also on the because because the investment property that costs 315 to buy $315,000 to buy these are we were renting them for $ 3,150 uh inclusive per month inclusive of utilities so that makes the gross rent yield to of uh annual rent to price at about 12% which is something you don’t see in Canada anymore so needless to say many of our clients bought these properties and of course they’re ecstatic for the returns uh the M now it wasn’t all sunshine and rainbows management of student rentals
(08:10) is not the easiest for people who want to self-manage or even from property managers uh it was a rocky ride for many some didn’t make it didn’t sold earlier than ideal um but from the few who got lucky Who had who happened to u to hire what turned out to be the best property management company in town uh Shad out to Adrian kulakowski and student rentals 101 now fast forward to 2023 when our client decided to sell one of these properties uh he sold a townhouse while the market was still pretty hot in 2023 they sold the town house for
(08:45) $84,000 in multiple offers to a mom that was desperate for a house for her kid for her kid going to Brock University now on price appreciation alone the return on investment was over 400% that 10 years over a 10 year period 400% return not factoring in uh mortgage mortgage payment the pay down of the principal of the mortgage over those 10 years and cash flow now Winterberry is the name of the street back in 2012 when we first found the area it was just the road line with empty dirt Lots on both sides of the road uh fast forward to today
(09:22) Winterberry is known as the top destination for student housing for Brock students uh it’s basically a household name for Brock University students the B the bus service drastically improved which I helped as I personally lobbied St Catherine’s transit to reroute its bus service and have pickups where our our client’s properties were located uh and what we found out was the students do appreciate the newer more modern housing style bigger bedrooms bigger house stainless Ste appliances stone countertops in the
(09:55) kitchen and bathrooms uh versus the majority of the houses in St Catherine that are rented to students were built in the 1950s they’re smaller not renovated and a lot of them do not have basic Fire Safety Systems maybe just smoke alarms but none of the none of the egress windows that we have and also fire and sound separation we had in the walls and ceilings so and then that all this translated into a big difference uh as we are my clients were able to charge a premium rent premium rents have equated to above Market values for our
(10:26) clients rental properties um because inv investors indeed value cash flow uh my clients town houses and semis actually sell more than bigger houses in the same area built by the same Builder because the incs justify those prices now these are uh these are the rewards of highest and best use investing and with a little luck um we got a lot of luck uh sadly my wife and I didn’t buy any of these as we were focused on basement apartment seding strategy uh yeah I’ve always admitted I’m not we’re not perfect university student
(11:02) rentals in general is the preferred investment strategy for the small investor since students uh student non-payment of rent is very very rare in our experience hence one avoids the risk of ending up with the landlord tenant board which overwhelmingly favors the tenants uh We’ve also been lucky with all the price and rent appreciation uh regular turnover tenants as they graduate school and leave to return home uh as TS move turnover it allows us to raise price rents to Market market and that’s just beneficial to the investor
(11:32) which is not less common in regular rentals uh Rich parents signing as guarantors helps us out as well but again it’s not always Sunshine rainbows declared student rental uh Aid lender financing is basically non-existent student rentals with A- lender mortgages at A- lender rates were either not student rentals at the time the bank appraised the property or the appraiser did not for some unforeseen reason did not notice the host with six six or seven bedrooms was near a university or college for some reason they didn’t
(12:03) think that property would be used as a student rental uh my last mortgage on a student rental was 10% from a be lender maximum 65 loan to value uh and that 65 loan to value perc loan value was based on the original value that I purchased for the home they would not recognize recent appraisals uh during re during the refinance process to allow me to take back more My Equity point is from a financing perspect effective student rentals are not scalable in my experience uh investors have to be prepared to have their Capital tied up
(12:35) until they sell why because student rentals are not a recognized use by most zoning bylaws hence Banks don’t want to uh lend on them the way that we’ want them to then there is rental licensing uh which can be another couple hundred dollars per year in Cost Plus a couple thousand UPF front between licensing fees and renovation requirements to get into compliance and that is the truth about real estate Investing For for Canadians and student rentals in my experience now if you’d like to learn more about uh other best practices in
(13:07) real estate investing uh we do have two webinars coming up uh one is on September 8 sorry January 18th uh where we will be hosting a virtual tour of properties my clients and I have purchased in the states they’ll actually be hybrid so we’ll have some seats available in person and online as well also on January 25th we will be uh teaching the best practices on how to sell a tenanted property our Focus will be on Ontario as that is our experience uh but I’m sure our um our lessons and experience can be translated to places
(13:41) like a BC and Quebec where the laws favor the tenant uh but again this is a bit of a specialty of ours uh because honestly not many real estate professionals are landlords let alone have as much experience as we do in owning as many properties as we do with tenants and and um yeah it’s kind of the sad thing about real estate investing in Ontario that the best practice uh for uh selling a rental property is to sell it without a tenant and to get it without a tenant it’s uh there’s some there’s some hoops to jump through and
(14:16) again we are specialists in this area January Saturday January 25th we will be hosting a free webinar on the subject and uh hope to see you there now on to this week’s guest again Hart is a friend I refer him clients all the time for tenant location services this may sound like a paid endorsement and full disclosure heart pays me nothing we receive zero compensation for me having heart on this show and me sending him referrals it’s too bad we’re selling the rest of our Ontario our rest of our Ontario portfolio in the near future as
(14:48) I could have asked him for some favors but no nothing we get nothing which I don’t mind uh as my judgment is not clouded uh we get along well because we’re both on a mission to help Canadians get ahead in life without taking away too much time from their lives and families by streamlining their Investments that we we help we both in different ways help them sleep at night and we both volunteer for nonprofits that support landlords Hearts company rent panda is an expert on rentals providing both property management and
(15:12) tenant location services while also using the same tools that we recommend on the show like single key and front lobby any Ontario landlord not using these companies is exposing them to exposing themselves to unnecessary risks again Hart is a professional and he uses these as well uh the risks that I mentioned they’re uh these risks don’t honestly exist in landlord friendly USA but I agress you can find Ren Panda along with a bunch of free online resources that every landlord Ontario landlord needs at rent panda.com
(15:45) [Music] top I’ve got a one and a half-year-old at home I got a new baby on the way in March I don’t think I do that so yeah no I think I do that I don’t remember that none of that doesn’t matter okay you don’t have to remember everything thank you thank you yeah so we’re gonna have two under two so that’ll keep me busy um on a journey of self-development we didn’t talk about this beforehand off camera but um I’m in a new mindset of personal development is business development which has been awesome um so that’s been about a year in the making
(16:30) and uh yeah then running rent panda on the day-to-day day so all of our rental services from software Leasing Property Management paralal Services running teams figuring out new systems dealing with the Canadian real estate market and uh yeah trying to just make the world a little bit better than the day before that sounds like a good good day-to-day overview do a lot of hard yeah let’s start with the self-development hard like what kind of hard you mentioned ice cold plunges before we were recording yeah I mean this like a
(17:05) cold shower actually like this is ice buckets um so not on the day-to-day but uh we’ve got a family Cottage up in Moka so I like the winter time best because I can drill a hole in the ice and properly get in the lake um we were up there last weekend and so sauna to cold Plunge in you know November water temperature is a lot of fun and I like seeing other people fun for you yeah it’s fun for me and when I go with other people it’s fun seeing them suffer for the first time cuz I enjoy it now so you got to push to
(17:35) the next level um but I think ultimately you know probably almost 15 years ago now I got into the world of mountain climbing uh my brother who I only realized today has has seeded all of the ideas that got me into all this crazy that I do on the dayto day but my brother came up to me I was you know 20 years old 22 maybe and he was like hey let’s go climb and kill Manjaro and I didn’t know what kilan jaro was and I was like sure you know older brother asked the younger brother to do something I’m game of course I would do
(18:04) that right and uh we ended up getting intestinal parasites that they thought was altitude sickness did a 16-hour trick through the night to get off the mountain and we were sick and vomiting on the side of the trail and my brother looked at me and was like I am never doing this again and I got hooked into mountain climbing like I just absolutely loved the experience and the camaraderie The Challenge and your face says it all it’s essentially extended suffering um so since then almost every year I’ve done a mountain climb um I run a charity
(18:37) called Summit for sick kids which is raising money to uh fund the oncology department and cancer genetics research by climbing mountains um but essentially you know extended suffering is is part of my life and I think uh ultimately true growth happens in that area of suffering and the discomfort and I think Society these days is very much positioned to make things as comfortable as possible you know people are looking for better faster easier more comfortable less work order it from your phone order it from the computer and I
(19:11) very much believe in getting your hands dirty Doing Hard and suffering to grow you know it’s not masochism but you know s a good amount of suffering really pushes you out of your comfort zone and makes you uh Excel as a human how old are you again remind me 37 37 yeah so good did you say you climb a mountain every year then trably to yeah anything local or you always traveling no I mean we’re we’re in flat country here um Rattlesnake Point looks challenging yeah yeah rattles snake point is like you know I want to throw my kid on my back
(19:47) and go hiking Rattlesnake Point with the family oh I mean go vertical don’t go walking fair enough there is good climbing at rattlesnake um so the last one as an example was Wyoming which is relatively accessible from here uh um or Denver is some good mountaineering but we flew out there and then did five days in the back country through Wyoming um and the Tetons are like absolutely beautiful you understand like you fly in and people call it God’s country because it’s just flat planes where you can imagine like millions of Bison used to
(20:17) roam back in the day and then it just kicks up into these beautiful snow cap Peaks um so yeah we did some climbing there for 5 days uh the last big big climb that we did um we did one in in Ecuador we did um akaga down in Argentina we did five mountains in 5 days as a challenge in the col or not Colorado the um Canadian Rockies so that was just like out of out of B go out and for five days straight just climb one mountain every day uh but you you get a sense of um purpose when you’re in the mountains and especially with those that
(20:51) you’re with you know no one makes best friends for life or like true deep connections sitting at the spa or going for a walk or sharing a dinner you know you share a tent with someone and you climb for 5 days and you battle the elements and you suffer together and you kind of rely on each other to survive it creates really deep connection so I think it’s just this level of life that I really enjoy sucking in as much as possible you talk about like modern day we trying to make things easier yes like in my business I always tried to make
(21:24) real estate investing as easy as possible for my clients yeah and it’s never been harder in Ontario hence I’ve Tapped Out y you mentioned some good places to invest in the states no interest too easy not necessarily too easy on that front I do think there is an element especially for new investors that are are starting out you have to be conscious that there is a journey right and not to just bring it back to mountaineering which is cliche when you talk about mountains but since I’m actually climbing mountains maybe I’ll
(21:58) use it but you know when I climbed Kodi I had a different mentality I was a young Mountaineer it was all about getting to the top I got to the top and I have a picture I wish I brought it in or have it on my phone but I’m I’m it’s not on your Instagram no nothing uh maybe it’s on Instagram but I think it was pre- Instagram days but it was me and my climbing buddy Adam and you know he’s my my co-founder of the charity were kneeling at the top with our sponsor flag and if you zoom in close on me my lips are blue my eyes are glazed
(22:28) over I have no memory of that moment absolutely zero I remember climbing up we started at midnight but by the time we got halfway up my memory was gone I was hypoxic it was freezing I wasn’t doing well and we were on a rope team right so it was the guide me and Adam roped together so if one of us Falls the other two are going to save that person um and on the way down I remember sitting down in the snow and feeling warm and fuzzy and having this thought come over me as like oh this is how people die on mountains right like your
(23:00) brain convinces you like this is warm this is comfortable your brain actually convinces you you’re warm and like don’t get up and that’s it and you literally hear stories of like near-death experiences on Everest that’s how people die and your brain is wired to make you seek Comfort um but nowadays when I’m out engineering and and my point is you know I got to the top and don’t even remember it and so if you’re doing something for that Pinnacle moment you know people climb Everest they spend hundreds of thousands of dollars a years
(23:29) training months on the mountain for five minutes at the top so if your whole goal is to be at the top in life in anything it’s a fleeting moment right because you get to the top and you realize you’re on a false Summit there’s actually another one behind you or you turn around from the top and you die on the way down or you suffer on the way down and I think real estate investing is is the same you know a lot of people see successful Real Estate Investors they see people with time freedom and freedom in life and
(23:59) they just want to get to that point and they suffer really badly and not the kind of suffering that I like but they suffer really badly throughout the journey every time a tenant calls they haven’t even picked up the phone and they’re sweating or they hire a property manager and every time their property manager calls they get emotional and angry that they have to landlord essentially and I think when they’re on that Journey they they forget about enjoying the journey and like what is the pur purpose of life if not to live
(24:25) every day and try and enjoy it and life is there to beat us down right and so if you can’t find a way to enjoy the journey you shouldn’t be doing it and there’s lots of other ways to make money and yeah us investing is a much more painless way to invest these days and if you think about yourself as a real estate investor you know you were Mr Hamilton right you were a real estate investor that was like I know this Market I’m in this market I’m G to make money in this market I’m going to show others how to make money in this market
(24:56) and others and as a real estate investor in person you tapped out like you said right you went this is enough this is the level of suffering that I’m willing to take and you pivoted into something that was comfortable for you and I’m sure there’s still some suffering involved and there’s still work to be put in um but you’re on a journey where you can enjoy that journey and I think so many investors are just reaching for the top and they’re on a journey that they’re really going to hate and they’re going to tap out without having seen the
(25:28) top or or seen a glimpse of the top um and that’s where I think people get into it without asking themselves what type of investor they are right and I know right now in my life I’m a student rental investor right I want cash flow with properties that I don’t care about the appreciation on I know they’re going to be a bit more painful right there’s that part of me coming out there’s going to be more calls you got to parent you know the students sometimes but it’s good cash flow and it’s setting me up for the next stage of my real estate
(25:55) investing career which may be a us property which may be more passive investment which may be private lending like you can pivot throughout but when you’re on that Journey you should try and enjoy every step of the way versus just aspiring for the top it was enjoyable for a large part of it yeah like a good I think I have about four dozen clients who have made a million or more in real estate investing y wouldn’t have been possible without Hamilton and St Catherine’s and AWC and all that yeah but uh yeah you we we we were joking
(26:26) before you were recording that I I called you a sis I believe fa cuz uh Ren Panda uh you yeah you refresh my memory because when I first met you you were already offering leasing services on top of promoting uh lease properties available for lease on rent Panda yes yeah okay so take us take us to why why did you start the business yeah it’s a good question so to my brother walking in the room and saying come climb kill Manjaro I only realized this literally today that um I was sitting in my office working in advertising at the time I’d
(27:04) been in advertising for a decade or so um and I came up in advertising doing the the standard things so I I worked for agency side doing client management and account management and i’ been working at Big Brands you know worked on General Motors Tropicana Del Monte um worked that life and then said you know I’m really sick of pushing capitalist product that people don’t need um had a little existential crisis and came back and and decided you know I had dabbled in the world of nonprofit but I realized that there was a world of advertising
(27:40) for nonprofits that was really awesome I could still do advertising and Leverage What I knew but help causes um and so I was in that world doing advertising for causes sitting in my office and my brother called me up and said hey I’m in thunderbay he had moved to thunderbay he was doing his PhD or finishing it up at UBC and moved up to thunderbay and had a really terrible renting experience where I may have mentioned this story to you but there was a website called homeseed homes and that website in 2016 was still
(28:12) based on the premise of you go on the website and see um rental listings and very very cursory rental listings you would each transfer the owner of that website $20 and then they would send you a Word document with a description of all the properties and the phone number of the landlord to call and that was the way that people rented properties on like the majority in thunderbay in 2016 so like it sounds like 2001 right it sounds like 1995 a Word document yeah a word doc for $20 on the tenant side this is not even
(28:45) just landlords paying for them to be featured but the tenants had to pay 20 bucks for a Word document of listings and so my brother called me up and my rental experience in Toronto was vi at.ca vi at.ca in 2016 the Pinnacle and that was that was it right but it was are they still around do people even talk they are still around are they still as no they’re not the same they’re not the same so they they did a few updates but they’re essentially just a little bit of a bygone rental marketplace right um just correct me
(29:17) from wrong but from my memory uh vi. was dominant for commercial apartment yes like almost every apartment building owner the reats were basically all using all their listings were Ona most small landlords as well so this was pre Facebook Kijiji was a little bit but there was essentially view.ca and Craigslist and so that’s how most people found it and view.
(29:42) ca was expensive for landlords to post on um but if if you drove they’re dominant in this if you drove around Toronto you probably can visualize their like blue and white view at.ca signs um and they were the dominant player and so in 2016 Thunder Bay was pay 20 bucks and get a Word document and Toronto was this website that PDF no no yeah we can’t be bothered to save it as a PDF no um and in Toronto view.
(30:09) ca I think at the time had last been updated in like 2011 like it said you know on the bottom of the website last updated in 2011 so it’s essentially an archaic website that was running the majority of the rental Marketplace so my brother was like what is life like in Toronto what is life like in Thunder Bay and we had that you know cliche moment of there’s got to be a better way so at the time you know Tech is hot let’s build a prop Tech can’t be that hard and let’s build a better Marketplace so we built a standard Marketplace and we went out and
(30:42) stole airbnb’s Playbook when they were in their early days of getting in the door of every single landlord right they couch surfed their early airbnbs to talk to those hosts and understand you know the mentality of the host and so what we did was any one that listed on the website it was completely free we offered free photography so we taught ourselves basic crappy real estate photography bought ourselves a $500 camera and went out to every single landlord who listed on the website for free and took photos and what that did
(31:15) was not only did it give us us give us a sales platform to push them through to added value tools on the website but it helped us have conversations with landlords and understand what they were looking for and so at the time what they were looking for was being fed by us and and we asked a lot of leading questions unknowingly and they wanted more tools so we built a showing schedule or we built a screening tool we built you know background checks credit checks we built a profile for tenants you know just like
(31:42) on Airbnb where we thought down the line this is going to be a rating system um we built a lease Builder we had enform Builders and we just kept adding software to the platform thinking that if you build it they will come right and as we expanded if you add more tools we will get more people and we pushed and pushed and pushed and every time we didn’t hit the metrics of how many people we wanted on the platform which in our minds was prop Tech so it’s got to be a hockey stick or else you failed um and we we weren’t hitting those
(32:11) hockey stick curve numbers so we just thought we had to add more and we had to add more and we had to add more and I read a book and I I forget the name now but it was something along the lines of like lean customer development or customer development and it was about talking to the customer essentially and we realized that we had spent hundreds of thousands building what we thought people wanted as opposed to actually going back to those original routs and talking to people and this was a couple years span so we kind of stopped
(32:38) everything and my brother and I said our prime directive is have conversations so we had probably over a thousand one-on-one half hour coffees with all of these landlords that were on in Thunder Bay in Thunder Bay we were in gu at that point Kitchener waterl anyone who was a landlord we just tried to talk to and had one-on-one convers ations and we built this standard list of questions that we asked but what I learned from the book was the magic question at the end was you know we’ve walked you through these various things that you
(33:08) may or may not want but you know what is your problem and and they all identifi their problem as a fear of unpaid rent and tenant cause damage which is every landlord right but ultimately we said if you could wave a magic wand and come up with a solution that solved that problem what would it be and in our heads they were going to say an AI based tool that would post my property and Screen my tenants and you know give me recommendations so I can just say thumbs up right and we were thinking Tech and they looked Us in the eye and they said
(33:39) find my tenants and manage my properties right and we had this aivy moment where we’re like holy we are building product and they want service right in this realization that real estate is a people business and they just wanted technology the answer it’s the human right yeah and so Tech can make it better and faster and easier and cheaper But ultimately they just wanted to hand it off to someone and so we we did a fundamental pivot of the business and just said we are no longer a prop Tech we are Tech enabled real estate right we
(34:09) will use the technology but we will have the people on the ground to empower Leasing and property management at a quality and scale that isn’t there right now and that’s been the journey that we’ve been on for three and a half four years now see you’re part of the problem making things easy yeah people get their evenings and weekends back while you go work yep for sure for sure making society’s soft heart yeah our clients may may uh disagree but I think every everyone wants to be an investor right and doesn’t want to be a
(34:43) landlord and so I think property managers are essentially just hiring out the landlording of investing um and so if we can do that I think that there is a true way to do it that is both in partnership with investors um so I really hate when investors come to us and say I don’t know anything about landlording just do it for me right we we try and teach people how to property manage so then they can hire property managers I don’t think anyone should hire a property manager without knowing intricately what that property manager
(35:14) does you don’t have to necessarily do it yourself but you should know um but you know it’s it’s very hard to manage a client that doesn’t know what we do that doesn’t know what landlording is that doesn’t know basic RTA um so for us we’re actually designing like a landlord 101 course all of 2025 is about content development for landlord education even bite-sized because if everyone that comes through us or otherwise every other property management company every other landlord can just get a little bit more knowledge than they have right now
(35:46) I think the entire industry would be much better everyone would be more comfortable not in a bad way but um it would help and and we’re dealing with a difficult rental market and like you you alluded to beforehand we are in a rental market right now where I before we get there yeah let’s talk about let’s talk about what uh about teaching uh investors like the basics of landling or like RT residential tennessy act yes what don’t people know I me everything unfortunately um it’s my house why can’t you just kick
(36:16) them out that one yeah um what is the Ontario standard lease um is my property rent controlled like it’s it’s surprising and sad to me the amount of condo investors who’ve invested in a condo and in my head the only reason to invest in a new build condo like yes there was some good returns over the last few years but the only reason to invest in that as opposed to a single family home you have no control in a condo right you lose all control the only reason is because all of the new build condos are non-rent controlled
(36:48) right and in a city like Toronto there will likely be consistent demand for condos in the long term right now we’re going through a tough time um but the amount of condo investors that come to me and I ask if they’re rent controlled or not or our entire team and they’re like What’s rent control is it’s dumbfounding like excuse me really what excuse me yeah and people say hey should I that makes sense that’s the person who bought yeah yeah versus like I’m used to talking to very educated people like EO members for example and and like they
(37:19) express no interest in being a landlord because they understand RTA y the challenge of evicting a tenant you you don’t have control if you have aant B yeah and and I think that there’s there are more nuanced things that are standard for those who have been in it for a while but you know basic maintenance right I’ve seen so many leases which says you know the first $500 of damage the tenant has to pay for seriously yeah where do this lease come from they they come so one thing that I’m finding as things get harder is
(37:52) more um you know experts come to the Forefront yeah and a lot of people and like Facebook forums are terrible Facebook groups but you know someone poses a question right hey my tenant clogged the toilet who has to pay for that or or who has to fix it right not necessarily who has to pay for it but who has to fix it and I literally was in the parking lot of of your office before I came in and I read this forum and half of the answers were the tenant right and people will just say you know whose obligation is it to fix it well it’s the
(38:22) tenants well no it’s the landlords right the landlord has an obligation to repair and M main the property M if there is negligence that cause that damage the landlord has the right to go after the tenant for the damage but right but for the RTA it is the landlord’s obligation right and people say oh what about changing light bulbs it is it is one line in the RTA right repair and maintenance obligations are on the landlord and so all of this misinformation from people that think they know the right answer or will just
(38:54) jump at an answer to say oh you know my tenant flushed a TV down the toilet whose responsibility is it well yeah the landlord can likely go after the tenant for negligence but the answer is not that it’s the tenant’s responsibility all of the onus falls on the landlord so there’s this massive world of misinformation and we’ve just gone through an election it’s not you know Russia getting involved with misinformation it’s just people that think they know the answer that are propagating incorrect answers so i’ I’ve
(39:20) actually started a property management support group on Facebook and so this is acknowledging that like I’m in competition with other property managers I want to build a network and community of property managers who can all lean on each other and be voices of reason because when you go to these Facebook groups all of the top contributors with correct answers end up being paralegals property managers people who are you know highly seasoned investors who are trying to push positive information but are usually overshadowed by just masses
(39:51) of gray area information and incorrect so yeah I think investors these days were in a perfect storm where money was cheap people ended up investing right and so there’s way too many small landlords that got into it without knowing what they were getting into and now in this market there’s a lot of people who wanted to sell a property who think well I’m not going to get what I want from the sell from the sale let me just rent it out right and and those two groups end up being landlords without actively pursuing landlording which
(40:23) involves educating yourself on how to be a landlord and joining groups and talking to people and surrounding yourself by with with friends who are investors so that you can actually ask someone who knows what they’re talking about and we just see that all on Facebook and Reddit and the masses of crap information that’s joys of social media yeah had a joh argue with me about how Canada is great for investing and the he just he’s just he’s just spting off uh economic rhetoric right and again he’s not even fully
(40:55) versed because you know for example NE Bruns just voted liberal conservative government six balanced budgets eh no we don’t want you anymore you’re You’re gone placed for the liberal government and uh so they’re going to have rent control starting next year 3% um and so you know it’s it’s all there textbooks have it all there what happens rank control yeah right yeah and fixed term leases I mean it’s like you talk to the people in the note and there’s a few key things that have caused this situation that we’re in
(41:28) right now right fix term leases rent control just basic things that if you look at other balanced markets they don’t have them right if you if you play with an open economy things balance but yeah anyways and the politicians know because there’s no way they don’t know it’s just they do it for a short-term voteing anyways gross yeah I dig gross so how is how is the rental market going so first off how many markets do you cover uh so Tech technically all of Ontario yeah um I would say very you have you have your so you have your like
(42:03) hands in the pies of all these different markets within Ontario so you know you have a good feeling of yeah and how we’ve built the business is that we have Regional centers um and we’re transparent about our operations so on the property management side we have no humans in offices in any specific region we have teams actually across the globe so that we can be 247 with our team um everyone works from home and property manager just property manag we’re not Leasing and property managing in that way we can cover
(42:36) Property Management within every region in Ontario and you know hopefully soon to be National and maybe International um but what is needed on the ground is leasing operations and the trades uh so on the trade side we have a network of Trades and we’ve actually just partnered with bid me which is a contractor bidding platform um so that if you’ve got a leaky tap and I’m managing your property we send out that work order through bid me and we have a network of 5,000 contractors who bid on the job so we get better pricing faster response
(43:06) times and in that way they cover Ontario we cover Ontario and the two companies are aligned um so we can offer better service in that way and then on the leasing side we’ve hired key individuals within Regional centers so as an example we cover the the near North right let’s call it like Barry right but we also cover ailia and Midland and all the way out to Owen Sound if you’ve got a property in tobore we can probably get there but we may say Hey listen you know it’s not going to be the quality of service so we’ll recommend you to a
(43:38) local tobore property manager the goal is that we will cover absolutely every area but I would say 95% of where people are investing were covered with key people in a region and each person can cover you know 15 200 km radius yeah so from thunderbay in the north down to Niagara in the South and winds in the west all the way out to Ottawa in the East fabulous yeah so that’s why asking questions like of like how’s the market to to you versus someone like oh I have 10 properties in Ajax yeah and they’ll it’s even better when they say they know
(44:09) everything right let me tell you how it is out in Windsor so how is the rental market so where you want to start well I think you brought up a good point of um how is the rental market is a bad question to ask not saying you asked a bad question but it’s a great segue into the rental market is a market that is harder to make money in than it used to be right and that’s why you’re wearing the hat that you’re wearing but looking at even just the Ontario rental market versus the Canada Canadian rental market um it’s a very hard Market to
(44:47) participate in um you know money has gotten more expensive it’s getting cheaper again um but you know less properties are cash flowing properties aren’t appreciating like they used to be and and a lot are depreciating so as an investor it’s harder but also when it comes to the fundamentals of renting out a property and managing that property there are less quality tenants than ever before um so we rent we we work with single key and run all of our rental reports through them and and have partnered together we ran a report on
(45:17) the quality of tenant which is very qualitative in its explanation but it can be put down to qual quantitative metrics right so average credit scores have dropped cons consistently over the last two years um the number of collections reported per set of applications has gone up so now we’re looking at 18% of all applications have collections in them and sorry what percentage 18% 18.
(45:44) like 4% I think was the last um and Bank these people have no hope of renting something like they can’t even get a credit card yeah so I mean we see a lot of like Capital One credit cards these days because Capital One will give anyone a credit card um and bankruptcies was astonishing so bankruptcies has doubled in the last year so the the numbers so they’re not they’re not going bankrupt but that they have it on yeah reported bankruptcies um at the same time income to rent ratios have shifted quite dramatically from the age- old you know 30% and under is a
(46:17) good amount right so usually you don’t want to spend more than 30% of your income on rent or on housing costs in general um the latest St and we actually pushed our our data data provider so we work with door insight as a data provider on the secondary rental market um right now if we look at the GTA household income not just personal income we’re up to 44 45% of household income is being spent on rent and that’s the average that’s just rent that’s not utilities just rent not insurance it’s an astronomical number
(46:54) when you also couple that with a market where everything is more expensive so we touched on this before we start yeah but you know there’s there’s an affordability crisis happening across the board so when you’re spending 45 and this is average again so when you’re spending 45% of your income on rent and then you add on utilities and insurance and you know your car expenses and your schooling expenses there’s not much to live on at the end of the day and so when you go to look at your housing situation if you’re at that 35% rate
(47:26) right now and you need a bigger house for your growing family and you’re in you know a rental mindset you’re not looking to buy you’re just looking to rent do you really want to move for a little bit more space or an extra bedroom that’s then going to push you into 45% or 50% of your household income and lose your rank control right so those that don’t have to move aren’t moving so what that happens is you know we’ve got all these people with Collections and bankruptcies and lower income nowhere to go nowhere
(47:53) to go and all of those who you know don’t have to to move aren’t moving so when you’re an investor with a property that you’ve bought you know when money was cheap and you’ve put a lot into it and you need a certain number to make your numbers work and you’ve pegged your rent number and you put it out in a market where there is now an over Supply because all of these investors flocked to these markets and now no one’s moving and the quality of tenants is low you’re in a situation where you’re screwed right and now finally you know it’s it’s
(48:24) not a good thing for investors but rents are dropping right and rents have been dropping for the last 9 months and whatever the CBC says is is incorrect CU you know they still say rents are going through the roof but rents are dropping and I think it’s a good thing because rents need to stabilize and they need to balance with that affordability crisis that’s happening because a lot of investors will talk about the housing crisis right they’ll say I’m building more housing because there’s a housing crisis I should be able to find tenants
(48:51) yes we can find you tenants but they will be on ODSP and they will be struggling to make ends and they will not be A+ tenants without a lot more work and a lot more effort and a lot more time so vacancy rates are you know true vacancy rates are probably four to 5% whereas cmhc reports you know 1.8 to 2% um the time on Market again the MLS will report time on Market is like 7 to 10 days well the MLS does not capture the rental market in reality in Welland right or in Kingston so time on Market our average right now is around 42 days
(49:25) right we’d love that to be well under a month but it’s just not because to get the right tenant takes more effort takes longer and as a business we are spending more on every single contract than we ever have in the past so it’s that’s more money on Advertising it’s more time and effort more trips out to a property means more gas and gas is more expensive than it used to be and so the cost of everything is going up which means as a business our margins are shrinking and at the same time you know it’s taking
(49:54) longer even with that extra effort so investors are more emotional right because I’m an investor myself sitting on vacancy sucks so when you are sitting on vacancy longer you naturally go hey leasing team property management team what the hell’s going on the whip do more exactly and so we spend more money and then it’s just this vicious cycle and and I think it’s part of the education that I wish was out there where you know like rentals.
(50:20) ca does a good job of producing a monthly rent report I wish that there was a you know communal rent report where everyone that has data got together and it was democratized data on the secondary rental market to say here’s what the actual data shows because when you look at cmhc numbers and you listen to Realtors who are selling investment properties and trying to push investment properties everything is still sunshines and rainbows but it’s just not the case and and um you know it’s part of that property manager support group because
(50:48) it’s harder as property managers and we want to get together and say hey not only do you have a shoulder to cry on when your clients are all you know barking at you left right in center but let’s work together to re-educate on what’s actually happening out there so that we can kind of temper things and hopefully balance the market a little bit yeah that’s mouthful it is I was literally looking at a pro forma from a friend for a um a multif family in pul cor because um he he has at least nice performance so I just wanted to look at
(51:18) the numbers and you know for vacancy they had 2% for cobor sound reasonable yeah yeah so the it does sound reasonable because um digging deeper into how the rental market is doing to I didn’t even finish my last point but um how the rental market is doing is the wrong question because how the rental market is doing within a city within even neighborhoods and within an asset class in those neighborhoods is really the right question to ask um so Port curn I would say is like a tertiary Market if not like a fourth tier Market
(51:54) um and they are doing really well so if you look at um not even just like Belleville but napan right like if you go outside of the tertiary markets there’s a lot of interest in those markets interesting more and more people are moving there there’s more businesses that are moving out there because everything is more expensive you know and so when you’re living and working in an urban center as an employer you’re looking at other opportunities right so those non-urban centers are starting to grow and so from a rental perspective there’s opportunity
(52:22) there um it’s you know we’re invested in tertiary markets we’re invested in student rentals there too uh but you know Peterborough was hot a couple of years ago now Peterborough is still stable but even if you go outside of Peterboro there’s some markets that are good um or if you look at you know Welland as an example wellend is kind of oversaturated if you drop down into like Fort sorry explain oversaturated like the builders built too many the investors built too many the investors built too many um from what we see at
(52:49) least so you know a lot of people money was cheap they dropped you know they heard about wellend it was cheap to buy up a property they converted a single family home the town was easy to work with exactly yeah so they they would the permits were easy to get yeah and and from like a typical real estate perspective if you look at the numbers the you know the um the days on Market has gone through the roof and also the months of of inventory is quite high it’s not usually a number that we look at in rentals but it was an
(53:17) interesting one that we started looking at a couple months ago because as you know the the inventory started to escalate and more and more people were investing there the men never caught up and so the number of new units on the market was let’s say 100 the number of units rented that month per month right the number of units rented was 48 that happens two months in a row three months in a row four months in a row all of a sudden you’ve got three or four months of inventory sitting there which means your time to lease starts going through
(53:46) the roof um so that’s a market like wellend right now it’s starting to bounce back thankfully so it’s it’s stabilizing but if you go out outside of Welland and you look at some of the smaller markets there they’re doing quite well and so 2% vacancy in Port Port curn in a multif family actually sounds reasonable to me um you know cities like Rockville or you know Cornwall they’re little cities that are kind of not gold Minds I don’t want to like push people out there but there are cities still with opportunity um and as
(54:18) like a a stable Ontario investor talking to someone who’s been telling me to get out of Ontario for a while um I still think that within an asset class and within certain markets there’s still an opportunity in Ontario um if you understand the tenant Dynamic right and it takes more work to do it so again maybe that’s the mest to me where I’m staying in Ontario for now you yeah you are yeah but there’s I think that there’s also something to diversification of a portfolio so I probably need to listen to more of your
(54:48) style of advice and diversify but do you have any assets in US denominated US Dollars no not yet no gold no Bitcoin no Bitcoin just yet although you caught me on the steps of your building reading up a building up a book about Bitcoin so um I think in my journey of investing not just real estate investing but investing in general I’m still at the very start of that Journey because the last eight years of my life has been pouring everything possible into rent Panda and now finally I’m like hey maybe I should
(55:20) diversify outside of just rent Panda into my own stuff right um and also you know I’ve seen a lot of Real Estate Investors do really well and it’s hard to sit at the table with people who have made a lot of money while you’re being the garbage man without saying hey let me be the garbage man and the Monopoly man investor behind the scenes so I’ve started to to do both it’s interesting just think being around entrepreneurs Organization for example like I meet many people who cash flow very significant money y like you know low
(55:50) six figure half Mill Mill a year in cash flow from their businesses yeah and that doesn’t exist in real estate investing so there really is I think really there needs to be some sort of balance between the two for sure you know if you’re making a mill a year you’re going to be banking something you’re like I need to put this somewhere yeah yeah for sure and and my hope with Ren panda is that we start to scale to a point where it can be a little bit more passive for me um because I think diversification of my
(56:18) skill set and my day-to-day life is part of that personal development and so you know I’ve been on this journey of working out more thinking about mental health more thinking being a father first um you know I have this vision board now of being an active dad right like I want to be the dad that at 18 when my kids 18 I can still physically dominate him right I can drop out there on on the hockey rink or the basketball court and still be an active Dad yeah um and I think doing that now will help my business but at the same time I should
(56:48) be a business person and a dad and a real estate investor and an investor outside of real estate to make sure that me and my family and my community are are uh protected and supported yeah kids are in martial arts I don’t think I’ll make it to 18 that I can beat them no yeah we’ll see we’ll see yeah because I’m trying to make them good athletes yeah the good athlete that does martial arts is tough to beat yeah maybe just raw power though like just a little just stronger than them yeah they’re doing Jiu-Jitsu so they just
(57:21) grab they grab your foot and you’re done right there’s nothing you can do cuz you can’t even reach them in the class at that night then I’ll get hurt because I’m too old for that fascinating stuff yeah so what Mar so yeah so you’re mentioned like the Beyond tertiary markets are what’s working which is fascinating but uh I guess I guess the point is also just to avoid oversaturation by the investors because uh like the gentlemen who went went went up north I don’t know if you had much interaction with them but they
(57:50) they were in like like Timmons for example like markets with like shrinking populations but they had like 200 houses in a population of like under 50,000 people yeah and that issue is it kind of underlines the problem of over Supply or or over intensification because you know it was Tim and Sudbury Susan maray and I think Kirkland lake and also they’re all really far from a major Center like Cornwall at least is a reasonable distance to OT Montreal isn’t it and a lot of the other places you mentioned they’re all on the 401 y for sure like
(58:26) so him I think s St Marine what like they’re all really far from each other yeah so I think that that’s actually a good point in terms of the opportunity that I see out there so I’m heavily invested in thunderbay we started our business in thunderbay so we know it quite well we have a team there um we know the intricacies of the city and of investing in the city um but it’s it’s a big opportunity I think these guys capitalized on until they pushed too hard hard and too fast and flew too too much vacancy but when you go to the
(59:01) North like sus Marie is a center unto its own right and so when you’re in the north if you’re in North Bay and Sudbury and Timmons you kind of look to and maybe I’m going to get you know whipped by those who live there but sus Murray is the center um and I say this from a Thunder Bay perspective where Thunder Bay is the big city for a lot of people because if you go out across the Canada Highway and there it’s yeah it’s it’s like the transc Canada highway there by way my brother lives 5 minutes off of it and he’s just got a regular house um
(59:33) everyone comes to Thunder Bay you know it’s got the university the college the hospital all of the industry and infrastructure is in Thunder Bay and there’s a ton of small communities outside of thunderbit and they’re very very small as opposed to you know yes outside of ottawa’s Cornwall which is a significant size city in comparison to the north MH but when you go to the North or even just the near North you you get into these situations where you can really dominate a market um and it can be dangerous to do that because
(1:00:03) as they’ve shown you can own a very large percentage of the rental housing within that City and so you can start to shift the dynamic and we’re finding that in thunderbay both as an opportunity but also as a risk is like from a student housing perspective we could look at creating a small fund and buying up an entire neighborhood right our last purchase or two purchases ago was a 22 ,000 house this last one was $300,000 each of these homes will gross between four and $55,000 a month they’ll net let’s call it $2,000 a month on
(1:00:38) average if you told a Toronto investor that they were going to net 2,000 bucks a month they’d ask you where to sign they’re also in the mindset of appreciation is going to be through the roof whereas in thunderbay it’s not the case you know you’re at one and a half 2% annually maybe yeah to investors probably want everything yeah yeah and so you know it’s right for us at this stage in our Journey but you can own a neighborhood right we can turn a neighborhood into a student ghetto right or we can take a student ghetto and make
(1:01:05) it better quality student housing we can you know change the the zoning bylaw like we can work at an act advocacy level to actually make change with the city and rezone that for boarding house um so I think that there’s huge opportunities but you know we’re not looking at it as the Canadian rental industry we’re not looking at it as the Ontario rental market we’re not even just looking at it as Thunder Bay we’re looking at it as a neighborhood within Thunder Bay in an asset class for a specific tenant profile and we we’re
(1:01:36) specifically targeting East Indian International students attending usually Confederation college for it programs so like you get super Niche and you can create good businesses out of it and you know that’s where I think we’re at in this industry where you know a a Canada wide rental report is almost useless you need to really drill down to the micro to understand who you are as an investor and where you want to go and educate yourself within that that realm investors can never forget that real estate is is almost Street specific 100%
(1:02:12) as literally on stage debating vacancy rates of Memphis Tennessee right and uh and uh the other gentleman with the mic said oh the bacon is really over double DED there I wouldn’t invest there I wouldn’t recommend it right and I was just talking about my client who bought a house there yeah so then I checked with our CIO goes like we literally just had an appraisal there last week and they said the appraiser said 5% vacancy expect a tenant in one in one month right right so and but again it was a nicer suburb Y and again like every
(1:02:40) everyone’s context is different yeah someone has a Reit like they’re in their say they’re doing new builds they’re in a different neighborhood than I am yeah right so it is and then yeah so I I knew the question is how is the market wasn’t uh you know yeah but it’s the perfect question to ask someone like me because because I love to talk about the fact that um most investors ask the number one question like been at events and it’s like hey what does a three-bedroom house go for in the Niagara region what like that’s not when I talk to you I get
(1:03:18) really specific yeah exactly West Mountain three bedroom upstairs with a dishwasher and one parking spot like spefic renovate this year yeah and and our team is interesting in that you know Jack who’s our our director of leasing just wrote to me and as we do it like 11:30 last night and like hey can we do a survey of all of the tenants that come through our system which is a lot and on the website and with our day-to-day interactions and ask them you know what they’re looking for and what the value of things are like amenities and it’s
(1:03:52) something like there’s no report on the value of ameni and I’m sure you’ve been asked this question by clients a lot of like should I put a dishwasher in right or should I rent laundry or furnished or unfurnish right what percent does that move the needle and we can make guesses and we can look at comparables and and guess but no one has ever surveyed to my knowledge the tenant pool and said like hey here’s a house now here’s a house within sweet laundry the exact same what would you pay for this and how much
(1:04:23) would you pay for yeah and quantitatively mapping that data to say a dishwasher is worth 3750 a month to a tenant and I think that’s the type of mindset that we need more of in this Marketplace and I give kudos to jack for mentioning that because like to think about the rental experience as a Hospitality business is something that we’ve tried to do more and more and he’s got a Hospitality background so he’s like hey yes our clients are landlords but our stakeholders are tenants still and so we need to understand both sides
(1:04:53) of the coin and if we can Pioneer dat that helps investors and tenants on both sides of the coin let’s do that and we have the Forum to be able to so it’s that kind of cool stuff that like brings me back to the days of when we were a prop Tech saying hey if we dominate every market and we are the rental Marketplace the data set is really where we can affect change Mar I want to ask you more about your international student strategy in Thunder Bay yeah like uh paint us a picture like are these are these houses
(1:05:26) these these apartment buildings what is it yeah so we’re still on the route of single family homes turned into either multi-unit student rentals or single unit student rentals um and we’ve looked at some commercial uh and converting that into residential but right now we’re looking at single family homes mostly in this market that we can put five to nine bedrooms in um the city’s cool with this like so some will be falling under like the board in house ruling and and we’ll adhere to that in others um you know we can be
(1:06:02) non-conforming because we’re looking to reform some of that zoning bylaw and push that through um but ultimately for us it’s about building safe quality student housing for a demographic that is really in in poor quality housing right now um so youve probably heard stories of you know the stereotypical Bramton landlord that has too many people in their house right they’ve got three room room and there’s nine people all sharing a room um we actually talked to the uh the college and the university in Thunder Bay and they were telling
(1:06:34) stories of not just um you know multiple occupancy within a room or or double occupancy in a room or triple occupancy in a room they were talking about bed sharing which was the first time I had ever heard about it but if you think about an international student coming to the country they’re paying more intuition usually three to four times what a local student is paying they’re being supported by family but they’re also also pushed to work hard and move towards PR so permanent resident yeah yeah so they they
(1:07:03) are um in school eight hours a day they also have part-time jobs because they want to make extra extra money um they’re looking to build credit they’re looking to stay on the good side of the university and the community uh and they’re looking to save money and so we found cases of people flipping beds so a student will rent a bed for $150 a month month versus you know or a portion of a bed I should say and they will have it for 12 hours and you know when they’re at school and at their job someone else will be sleeping in that bed and that’ll
(1:07:36) be in a room that’s double occupancy so you’ve taken a $800 a month room cut it into 400 per bed and cut it into 200 per 12-hour cycle in that bed and so that was the situation that we were dealing with in Thunder Bay and we saw it as a massive opportunity to come in and provide quality student housing it’s profitable for us it’s cash flowing property we’re bringing up the quality of housing like the actual houses are usually Sentry homes that need a bunch of work um but they can be retrofitted into high quality student housing so
(1:08:12) that’s what we’re doing and as an example um we bought one it was $220,000 to buy we put about1 to $120,000 into it and that place is grossing 50 2 to 5400 a month um and netting around 2,000 bucks usually more but that’s $2,000 with vacancy cost in there we’re paying our own property management fees so you know Ren Panda has investors in it so I’m not you know getting property management for free so we are paying for property management we’ve got repair costs banked away in there and we’re putting that at 5% vacancy at 5% so
(1:08:50) we’re running our numbers very conservatively and that net number is after all of that so it’s it’s it’s the true net what’s different about international student rental property versus like a regular rental property so if someone want to do like what what is the property how do you cater towards this this demographic yeah so the first thing is to our conversation before making sure you are the right investor for it because student rentals in general require more handholding than aren’t you well exactly so if you hire a
(1:09:22) property manager then for all intensive purposes the only difference is higher turnover um because typically you know yes students will stay for four years but the numbers show that students were really staying for like 12 to 18 months especially when you’re doing room rentals um you rooms will turn over a lot faster than the full house but you can imagine you know four or five kids getting together getting on one lease people are going to get into fights disagree move on after a year two years the group is going to break up so you
(1:09:57) need to account for higher vacancy cost and that’s why we put ours at 5% um and then if you’re not property managing right if you if you sorry if you don’t have a property manager and you are property managing yourself you need to be conscious that not only are you the landlord and the property manager you’re also kind of a parent and so when you set up the property you need to set it up thinking about a 17 to 21y old kid living in that property yeah so you should have you know a booklet of how to live in that property and we
(1:10:29) create a booklet for all of our our rooms and our houses and that’s on the bedside table when they move in day one that’s got a QR code on the front where they can pull up a video because everyone’s on their phones and they don’t actually read anything a video of how to use everything right common area rules how to clear out a lint trap how to unclog a toilet right like what to do if the shower starts backing up all of these standard things where a lot of investors who are placing families think oh it’s a family they know how to live
(1:10:56) in a house students do not know how to live in a house and when you’re dealing with International students literally like I I can’t I have University students who don’t know how to change a light bulb right right so so they you know the age-old question how many University students to take the change of light bulb yeah none because they can’t do it right yeah they literally called us to do it yeah exactly Life Broken it’s noten right the life bul is broken yeah for sure uh yeah we get calls all the time like the toilet’s not
(1:11:27) flushing properly okay what’s What’s happen is it not flushing is it going down slow is it running like there’s no question about that so um whether you’re property managing or not like the the repair costs are going to be higher right there’s going to be more wear and tear and there’s going to be more unnecessary calls right so you may have to have a plumber go out there when there was nothing actually wrong or your handyman is going to be visiting the property more um we like to do mandatory cleanings as part of our student rentals
(1:11:58) whether that’s local students or International students I think that’s a very good thing to have in place we pass along that cost or you know in some cases we eat it if necessary depending on how the market is doing but a cleaner just like with an Airbnb a cleaner is your best eyes on the property and when you think about the high use areas of a house its bathrooms and its kitchens right so and maybe like the front entrance way so clean the flooring in your front entrance way especially in the winter time so the salt doesn’t rip
(1:12:29) into your vinyl flooring or hardwood flooring right have your stove cleaned on a monthly basis like full-on scrubbed clean because those students are not cleaning the stove ever right so a deep clean once a month replaces a standard family who’s you know scrubbing it down once a week um bathrooms should be cleaned properly and regularly and when your cleaner is there have a checklist of things for them to go through right notice any light bulbs that are burnt out flush every toilet and see if it flushes properly um clean out the hair
(1:12:59) from you know your your drains especially if you’ve got lots of girls in the house not to be stereotypical but if you got hairy people in the house clean out your drains and just hiring a cleaner without a checklist of things that they should be checking is also kind of being lazy so it’s it’s in this world of you got to work harder for it but it can be lucrative and we know lots of landlords who have appreciating properties in Toronto and Kingston and London and you know waterl as a great example who have cash flow because
(1:13:28) they’re student rentals and appreciation so I think it’s a very strong lucrative Market I know you’ve got past experience in student rentals and I think it’s like the flavor right now because no one wants long-term tenants right and and I think when we did it we saw a really big opportunity because we had connections to the university and the college we understood the Dynamics of Thunder Bay and we specifically went yep it’s East Indian students coming to the city um primarily male and that is the demographic that we can capitalize on
(1:14:02) but is also in the most need uh so it it’s incredibly important for us to actually solve a problem because back to my tech days like you build a product to solve a problem and I think that’s what rental housing is is you see the problem and you know if I was a type of landlord that really loved luxury housing right and I wanted to buy a luxury home and have an executive live in it I would not be investing right now because it’s a terrible time for you know executive luxury luxury rentals so you just have to know who you are Market yeah exactly
(1:14:34) all the short-term rentals are going to midterm yep yeah there there’s no there’s yeah there’s there’s nowhere to hide in this market for sure do do you does rent Panda do student Rental Management across the province yeah for sure so it’s actually an interesting question and maybe you’ll have an answer to this but we often get asked as a property management company if we do student rentals and I think it’s because a lot of companies out there who are property managing will just say no to student rentals yeah and for us I’ve
(1:15:01) always looked at it as a rental is a rental and we’ve built our systems with tech as the backbone so we don’t care if it’s a you know Annoying family not annoying but if it’s a needy family or a needy student or a room rental in your basement and you live upstairs like for us a rental is a rental and it all runs on the same Tech system and you know some of the the setting up of a property is different um but as a property manager a work order is a work order right a repair is a repair a call is a call an email is an email the Cadence of
(1:15:38) that may change but that just means our pricing has to change and and I think uh when we started Property Management I I hated the concept of a percent of monthly rent as a fee right because it’s just a way for property managers to make more money on more expensive property that is not more expensive to manage and if was true it should actually be that less expensive property is more expensive to hire a property manager for and that’s student rentals right some people will put a premium on student rentals um but we wanted to build a
(1:16:07) system where for us it’s flat rate management and we know how much it costs us to manage a property so a duplex per unit is easier to manage than a single family home because it’s one system right it’s one furnace for two properties or two units so that is more efficient for us to make AG you know when we need to inspect two units it’s more efficient than inspecting two single family homes because there’s travel time and there’s you know lockbox entry and all the tiny little things so we charge less per unit for a duplex
(1:16:38) versus a single family home you know a 20 unit building is a different model per unit than a single family home so we tried to change the game and make it fair and actually be transparent of you know if it costs us less to manage your property we’ll charge you less to manage your property um and so you know executive rentals people when they were big people were flocking because we could manage your $10,000 a month rental for $99 a month right versus even in Toronto people were still charging three four five% in management you go up to
(1:17:10) Thunder Bay standard is 10 to 12% in management you go short-term rentals in thunderbay you’re paying out 25 to 30% in management so um yeah I think that there’s there’s still an opportunity to innovate within the space but uh you have to build the right system for it so yes so the answer is yes so yes we do certain rentals you pretty much so what you cover pretty much every real estate strategy then what don’t you cover Airbnb like what yeah so we don’t do short-term rentals um we used to because we fall into that habit as most people
(1:17:45) do of chasing shining objects yeah um and you know 25% 30% management fees look real good especially when the Airbnb is doing well um but we found that at the time it’s a separate system it’s a different business we inject Hospitality into property management but that is a Hospitality business um one day we may parse out a division that is doing short-term rentals but for us it’s long-term and even in the midterm rental space we again started to dabble in it um and you know we push it out to those who do it full-time and proper right and
(1:18:18) there are companies out there that do that but um for us even midterm rentals when we get into tenant place it doesn’t make sense right if we’re going to charge a month’s rent to place a tenant and you’re an investor that wants a midterm rental of 3 to four months doesn’t make sense logically to pay out A month’s rent so we can’t make it sense make it make sense from a business perspective so we’re just not going to do that um we can manage a midterm rental because it’s very similar to a long-term rental but we don’t do lots of
(1:18:45) them and really I like to paint the picture of us being the rental experts for you know standard long-term residential housing and that can be a room rental in your basement or your you know 500 unit purpose built apartment um because that’s all the same within our our sector yeah right you’ve been very generous with your time anything else you want to tell us about Ren Panda I mean ultimately I I think um we’re we’re trying to build a world where everyone can be a landlord um and I don’t think it’s a world where
(1:19:22) everyone should be a landlord but truly the vision is that everyone can be a landlord and it’s just about having the right products and services and tools and team to do it and I do fundamentally think that real estate is an amazing vehicle for you know wealth generation and generational wealth and it’s it’s something that more and more people can be a part of and we’re truly on that path to do it but I I do think there’s a lot of egos that need to be shed and so we’re trying to build kind of like the Allied powers of the real estate space
(1:19:56) and bring together Partners who can do it well who have the same vision who can really help support landlords um and you know other elements of the business are adapting for this Vision so one of my my aspirations for next year is to actually invest in properties as a business and offer our employees fractional ownership of that property because you know if you’re a property manager or a leasing specialist in Cornwall you know you may not have aspirations to own a property and it may not be realistic with the
(1:20:29) salary levels in that region so as a company can we enable landlording for our staff for our clients you know can we work with rent to own operators to help tenants become landlords um and so we really do want to facilitate that as as a vision um and I think that there’s a lot of growth that the Ontario and Canadian rental industry needs and it needs to catch up to the states right and and there has to be advocacy and for that goes along with it and so there’s groups like Solo or I’m a part of the landlord self-help center board um and I
(1:21:02) don’t think it’s it’s a solution that’s solvable by one entity so my my call to action essentially is not just for the investors out there but for other uh other companies other organizations other associations out there to really have an open mind to band together and to help push this industry forward to where it needs to go because as a private sector we need to push the public sect seor and government and the individuals to to do some reform and make it better for everyone where can people learn more about R Panda uh on rent
(1:21:40) panda.com if you fill out the form on rent panda saying you’re interested I’m going to be giving you a call still so I I have that mandate now we’ll see how long it lasts for but um I connect with every single new client that we’ve got coming on board and i’ like to talk to investors too because just like this you know it’s always great to have a conversation we learn a lot from our investor networks um so rent P.
(1:22:02) C is probably the best place there you have resources on your website as well do you know it yeah so we’ve got a rent report that we put out in partnership with door Insight um we’ve got a lot of blogs that are just educational we have all of your n forms on the website and um starting in January our Instagram is just going to be flooded with uh with educational content I’d love to release like a landlord 101 course and make it mandatory for everyone in Ontario but until then it’ll be free educational content um to to just hopefully make
(1:22:35) things better for us all you may talk a lot of condo investors out of buying a place with with education heart thanks for much thanks much for doing this thanks for fighting the good battle my pleasure thanks for being the the sadus as I called you because someone’s got to do it yeah someone’s got to do it well we we’ll go for a cold plunge one day so yeah 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
(1:23:03) 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 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 Dro me a line my DMs are open on social
(1:23:27) 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 and we’ll see you 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**

(00:01) welcome to the truth about real estate investing show for Canadians my name is Rano did you know that the city of Toronto has passed the renov eviction bylaw which comes to effect into effect next summer uh while I am all for protecting the rights of the vulnerable which means the tenants um I Still Believe In Balance uh friends of mine were in the news because they needed to upgrade all the plumbing in their apartment so ceilings had to come down in every unit on one particular floor as the buildings 50 years old so of course
(00:32) much of the infrastructure does not support modern day living or standards or code uh speaking of modern day living my friends were upgrading sweets to have on Suite laundry and dishwashers naturally plumbing and electrical upgrades would be needed and this is a good investment uh as who doesn’t want a dishwasher on sweet laundry and willing to pay for it most are uh when you increase the value uh and increase the rents of properties that improves the value of the building which is what every real estate investor
(01:04) wants to do uh but because of our immigration rates they’re growing faster than we can build uh housing rents have skyrocketed and vacancy rates are at historic lows uh inflation is driven of build costs uh so new construction landlords are in a really hard place as rents uh that they need to break even on hard costs are hardly affordable for the average Canadian uh a friend of mine from the gym was telling me how his mortgage on his new construction GTA located Bachelor siiz condo is is over $2,200 plus he has a $400 plus condo fee
(01:39) but his rent is only $2,000 not a good investment in most people’s books and 2,000 rent for a bachelor 400 foot apartment that’s a lot of money for the average Canadian uh now with anti- eviction bylaws spreading across Ontario first it was Hamilton yay my favorite then London Ontario now Toronto and I know Auto waterl are considering it and who else who else who knows who else is considering it the question begs why would a landlord renovate say Life Safety Systems need to be updated like fire safety systems such
(02:11) as sprinklers which would need Plumbing obviously fire escapes floor wall ceiling fire R of separation is complicated expensive disruptive uh you wouldn’t want to live when around in a unit when these things are being done uh Leen plaster is when Airborne is just nasty uh but they are life but these types of fire rated safety upgrades are indeed life saving so how will a l get these renov types of Renovations done without renov without with these renovation law bylaws in place now again I Believe In Balance I absolutely
(02:47) believe in protecting the vulnerable now keep in mind now with these renovation bylaws the onus is on the landlord to rehome the tenant during the renovations in a similar unit at similar rent or compensate any rent differential and if the landlord fails to do so the rents the the fines are in the hundreds per day uh so for an n11 eviction for renovation it’s really not financially feasible because in reality the landlord would have to put up the tenants in an Airbnb or hotel which again they can’t recoup that cost and so so and my
(03:24) opinion the investment hypothesis in Ontario only gets worse on the positive I just recently became a member of solo that’s an acronym for small landlords sorry small owners landlords small ownership landlords of Ontario it’s a not for-profit uh organization to lobby and support uh small Ontario landlords Provide support to landlords with tenant issues beyond the scope of what the landlord self-help center provides uh I’ve spoken to a couple of the board members interacted with members of solo on the free Facebook group and folks are
(03:55) truly helpful and there’s a lot of sad stories of LW um you can check them out at solo.com groups solo landlord just do note that they do verify their members uh there’s over 8,000 of them uh again it’s pretty helpful group it’s uh but they do have the most stringent screening I’ve seen in having to prove that one is indeed a landlord but it was pretty fast like you know I think I was approved within 12 hours no big deal now Shar and I like happy to announce that Shar and I are proud sponsor ERS starting January 1st of solo and Hope to
(04:33) support their efforts in supporting small landlords who honestly get the short end of the stick I look forward to a mutually beneficial relationship in 2025 uh and now in case you investors out there don’t want the short end of the stick uh for those interested and learning more about what I consider the best practice for investing in real estate I want to personally invite you to the to a free hybrid training event which means both in person and Via Zoom webinar I call it how Canadians can Leverage us real estate for Passive
(05:01) scalable and tax efficient income streams on Thursday November 28th towards at 7:30 p.m. for those in person 8m Eastern Standard Time For Those online here’s what you learn where to invest and capitalize on a trump government how are clients are making money on the buy executing perfect burs without leaving home diversifying to USA for better cash flow and returns in landlord rights links are in the show notes on to this show in this episode we sit down with Christine trainer from Victoria BC a seasoned real estate
(05:33) professional season is putting it lightly uh she’s navigated this industry from multiple angles she started as a pargal in mortgage enforcement SL forclosures she became an appraiser in 2002 yes ladies and gentlemen she has experiened Beyond five years like a lot of the gurus who are going bankrupt these days anyways we’re she worked for a high-end real estate developer then she bought a real estate appraisal firm bought two more with creative financing and in 2024 sold those businesses for a seven fig exit now with all this money
(06:07) and free time what’s keeping Christine busy well her current Venture is in Edmonton Alberta as a real estate developer multif family investor Christine shares a wealth of knowledge and insights so that so be be ready to be inspired for those looking to raise Capital specifically registered funds like the RSP rrsps and tfsas Christine is involved with a mutual fund trust as part of a 94 build so you want to hear her experience on that and the benefits of uh Christine shares how and why she chose to invest in how why she chose not
(06:38) to invest in tenant friendly unaffordable Victoria BC for landlord friendly Edmonton which is something pretty much every BC Ontario Quebec investor from a tenant friendly jurisdiction is considering Christina is an advocate for empowering women around investing in finances and she is the host of she builds wealth a free online community where she leads women in conversation around real estate investing uh business money and mindset she is also the creator of she builds wealth a foundational course for women in
(07:10) Building Wealth in real estate to follow Christine you can find her on Instagram at christine. trainer s trainer with a y t r a y n o r. re investing that’s one word or her website it’s a lot easier www. Christine trainer that’s CR oh that’s bad c h r i s t i n e t r a y n o r.com please enjoy the [Music] show hi Christine what’s keeping you busy these days hey irn um goodness what’s keeping me busy um besides two teenagers real estate obviously that was a one of the shortest answers ever on history of this [Laughter]
(08:04) show uh so I invited you on the show because you have a a sizable Edmonton build project going on but even before we get into that can you can you tell the listener a bit about yourself yeah absolutely so uh my background irn we won’t go too far back but um I my background was as a real estate appraiser for gosh over 20 years so I got into uh real estate appraisal and um I recently exited um so I eventually ended up buying real real estate appraisal firms and I recently exited those businesses this spring and um yeah
(08:41) so that sort of you know how I kind of got into real estate investing was just um yeah seeing all the deals coming through the office and what people were doing and what was working and what wasn’t working right and now it’s in your bio you had a seven figure exit so I imagine you did well yeah yeah yeah no I did it was it was actually really fun I um ended up buying the first company through creative Finance before I even knew what creative Finance was so I was approached by someone who was wanting to buy a company um and she wanted a
(09:11) partner um she wasn’t designated as an appraiser it was actually her mom’s company and um so she asked if I wanted to buy it and um after saying no the first time a couple years later I’d seen that something hadn’t sold and decided to jump into it and at the time you know didn’t have funds to purchase a company and um she’s like you don’t need any money and I was like how do you buy a company with no money like I never never even entered my my mind right and so end up buying it on a 0% interest um you know fiveyear term and then the company
(09:40) at the time was you know doing well enough to pay us both an awesome salary as well as pay this you know creative finance loan and that was kind of the the start of of kind of wrapping my head around okay there’s some interesting things we could do here and now again it’s from your bio so I’m not asking you anything that’s not public yeah yeah yeah so you bought out your partner you did you elaborate yeah yeah so about a year or a year and a half I can’t remember the exact time but into the purchase uh we just both kind
(10:09) of knew that it wasn’t the best fit like the working relationship wasn’t wasn’t just wasn’t really jelling I guess you could say there was nothing really negative going on but it was also just feel like okay we’re not we’re not really suited to be partners um and so we mutually agreed it was like okay who wants the company you know do you of course because it was her mom’s company it was like if you want the company awesome um um you know you can findy me out and if you want me to take over the company I’m happy to do that too so she
(10:34) had a chance to kind of mow that over and she was like yeah um I want you to take the company um and so I made her an offer and um bought her out and by that point we’d also purchased an office space so bought her out of the office space as well and um and yeah and so I was essentially on on my own and then shortly after that um someone else had approached me anaser who wanted to come work for me he was like youve got to meet my dad he’s got a company he need to sell it he needs to retire um you know I know you bought this company do
(11:03) you want to buy you that’s TR to connects you with him I was like oh sure I’ll have a conversation um and so I ended up connecting with him and um you know basically two months later um had bought his company also St of Finance um and so it was just like okay that that worked out really well and because I already had all the systems and processes in place um you know from the initial company you know it was really an easy transition to kind of just you know not close over to the other one um and then you know basically two years
(11:32) after buying that company um someone else had approached me about buying a third company and had kind of said hey I know you’ve bought these other two it was actually a group that had purchased um a company from Simon wanting to retire and um and they sort of thought it was going to be a really easy thing to run off the side of the desk kind of thing which everything else they had going on and realized there was a little bit more to it than than they wanted to take on and so they’d asked if I wanted to buy it and so I bought that third
(11:57) company so um yeah just so people hear in kind of what was going on it’s a pretty um intimate industry right like you know there’s not necessarily I mean there’s a lot of appraisers but in terms of firm owners and who’s doing what everyone kind of knows everyone so um yeah that’s kind of factory there now you living in Victoria BC uh were these all all these companies localish yeah they were all in Vancouver Island so um yeah one one was kind of Greer Victoria um all over the island and another one was in the CCH and
(12:26) Valley um sort of a pocket kind of the dunan area and then um the other one was also great Victoria so yeah all on the island amazing and then can you elaborate on creative financing like vendor takeback mortgages also 0% oh like on you mean like on the purchase of the businesses any of them even when you bought your partner out yeah so well so when I bought the first company essentially it was just um yeah vendor take back on on the purchase price um and it was a 0% interest and I think that um just came from probably
(12:59) the relation ship and um maybe not I mean I don’t really know but yeah so that was just sort of a fiveyear buyout of okay here’s the price and we’ll just pay this out monthly over five years um so that was pretty straightforward on that one and then when I bought my partner out it was basically the same thing it was like okay I’m going to pay you out and I think I paid that out over two years um so the the original yeah so again the companies were doing well right so there was enough cash flow in those businesses to pay them out so it
(13:25) was like let’s just get that done right so I agree we agreed that I would just keep paying her her regular monthly salary um until until it was paid off um so that worked out really well it was like I I still paying her but she was just wasn’t there um and that was while the initial loan was still going so I kind of had two St of Finance um bu a taxing at the same time um on the first one and then on the second one um it was so interesting so um the owner had wanted just had a specific number in mind and this is right before Co it was
(13:56) January of 2020 and when we so we were kind of negotiating like you know in the the late fall of 2019 but actually have purchased it January 1st 2020 and so he had a number in mind and you know with smaller companies it’s really like a lot of the order like the the value is attached to the work that’s coming in obviously right and if that person is no longer there you know you run the risk of those orders maybe not coming in right because that person’s going and so number mind yeah exactly right and so I was like if if it you know if you’re
(14:26) planning to he was still planning to work for a couple years and um essentially I said to him whatat about if you stay on for two years because that’s what you want to do anyways and I’ll pay you a percentage of each order that comes in right instead of your number I’ll pay a percentage if it ends up being more then then great for you um and if it ends up being less then that’s just what it is and so he agreed to that and we had a two-year um buyout and um so just every order that came through the office he got paid a percentage
(14:51) every month um and anyways in the end because things obviously went crazy during Co I ended up paying him double than what I would have paid him if I agreed to his first number um which is kind of crazy to think about but it was still a win-win right like it was still a win-win like I I would have been better off if I had taken um his number but I was like yeah I’m not sure like what if you just disappear so for me it was just that balance of of risk and um that’s what felt better to me at the time and you know hindsight who knew but
(15:20) um again you know because the work was coming in if if the real estate market hadn’t have gone crazy like it did during Co right he wouldn’t have you know he wouldn’t have been double we wouldn’t have known we couldn’t have known that market was going to go as crazy as it did right so have so many questions owners on this show uh just is a fun fact for the for the listeners benefit population of Vancouver Island is 864,000 sound right roughly yeah sounds yeah sounds about right I think VI Creator Victoria is like around under the
(15:51) 400,000 I think that’s the top my head so yeah but the island it’s pretty small sound that small but I mean compared to you know big cities now as an appraiser you know on onario was pretty Bonkers for appraisals for the last I don’t know how long it was only until we until things went sideways the last two years or so where appraisals we were having any sort of trouble with appraisals but for a good portion of my career being I’ve been I’ve been a I’ve been in a been a realtor since 2010 so almost my entire career of being
(16:25) a in real estate investing full-time with Investments is appraisal pretty much always came in whatever our clients PID for it and and with properties and at least well actually you probably you probably seen prices decline as well uh in the west as well prices have declined significantly here in the East and U so now people are ask asking this questions how come those properties are praised but anyways my bigger question is what are some of the what are some of the things you’ve seen in your career that are interest peaking yeah I mean I
(16:58) did I did see it in that sort of 070809 time period um as well because I started in the early 2000s um and so I definitely saw it with like that preconstruction uh stock where people bought property say in ‘ 06 um you know just like now people bought pre-construction property in the peak of of the market and then you know they’re not getting that appraisal done until two years later when the project is ready um and I mean the values you know depending on on price could be a CLE $100,000 um less right and of course do
(17:27) an appraise that you’re basing on current sales right and so um I think that’s always the challenge there is I will say for anyone doing pre construction um there’s only one lender um that I’ve ever seen that I know of and and I believe this to be true um and it’s RBC and they’re the only lender who um will actually so if you buy a preconstruction property say today they will order the appraisal today and they do not recheck appraisal income like you’re approved at the time’s purchase so you know I have to to sell
(17:58) preconstruction um projects as well I took a brief um break during break from appra but we would always say go to RBC right if you can get qualified with RBC because then you know you’re GNA you’re going to be good for that mortgage right if you change your job or if something happens or you know just to protect yourself so um but yeah definitely you know people and people always ask like you said how did how do they have praise because when the Market’s going up it’s easy to be kind of optimistic right things are moving prices are increasing
(18:25) um and so a lot of what we kind of saw in the 2022 and I don’t know if it the same in Ontario but the market kind of peak here in March of 2022 and you know people that bought property you know say February March during that time period and they were waiting to get those appraisals um you know and they might have gotten caught up in the hype I mean even on those two months later they were coming back to $100,000 left potentially in some cases where people had overpaid right so you know unless you’ve got that extra cash
(18:51) um people didn’t have the ability to close so definitely have seen a lot of that and the other thing we see a lot of is people you know on the appraisal side not properly plan their renovations right so people you know spending money on Bas and Suite are renovating um and you know cost overruns and then not being able to actually refine it so let’s just say you know you bought a property for a million dollars you’re spending 200,000 you know in their mind it’s going to be worth 1.
(19:18) 4 right and so that was their plan you know air close to refinance and pay off credit cards or line to credit um and and you know the biggest thing we all know is like you know crost doesn’t always equal values right so not properly mapping construction projects um is a big one too I’m guessing that’s from the more novice investors or can you can you paint broad brushes on who’s making those kind type of Errors H I wouldn’t say it’s novice or when as shocking as that sounds um yeah I mean even on new construction stuff too right I mean
(19:49) we’ve seen like people that have done you know probably built like you know 20 new 20 stuff builds you know they’re actually Builders um you know and and cost overruns not getting handled properly or not getting their financing sorted um you know I think people just a lot of people just don’t do their homework right it’s like I did this before it wasn’t a big deal right but markets change all the time lender requirements change all the time so just because something worked last year right with your financing doesn’t mean it’s
(20:14) going to work this year you know um so yeah I think it’s I wouldn’t say it’s notices you’d be surprised y yeah that’s that makes sense uh I have a friend good friend at uh one of the home builders associations in Ontario and it it it’s the medium it’s medium and the small size developers Builders who are are really hurting it’s the it’s the large absolutely large ones with deep Deep Pockets who can pull land for cash that are sitting pretty at least they not stressing yeah totally like they’re they’re fine right but if
(20:47) you’re relying on those um you know pre-sales or that that financing um to to move forward it can be definitely be a challenge this is why I’ve stayed out of it largely guess yeah I’m I’m very risk adversed with my with my real estate and uh portfolio but uh you are a developer it’s not a bad thing I think I think kind of the point of the show is also like I meant for this to be a buffet right yeah everyone can learn from people in all different walks of life specifically real estate investing this is real estate investing show yeah yeah
(21:18) and then people my intention is for people to take take a deep look at my guest and also themselves to understand who they are and what they’re capable of yeah and if they can do what what our guests do right so that’s why you’re on yeah I love you are developing and again you but you also have a wealth of what sorry you like you have like a 20y year career in appraisals yeah I did get my I think was a couple years ago got my 20 year like P or whatever they send you in certificate like how could it be 20 years I still
(21:48) feel like I’m 25 right like how like how is that even possible but um two major Cycles two major Cycles yeah 100% you’ve seen the worst have seen the worst for sure SE want be developer totally it’s like if that doesn’t mean but I think that’s a good thing right you need to see what can happen right abely The Bad The Good the Bad and the Ugly right and and be aware of the risks and and challenges that can can happen with whatever you’re getting into so I think that that you know having been on the real estate appraisal
(22:19) side you know seeing you know lots of foreclosures come through the office where people are having challenges um you know that’s also equi me to feel confident in in moving forward in the decision um that I’m making yes you are you have a much more you can make a much more educated decision than myself that’s too what’s a good investment what’s not well I wouldn’t go that far but it’s also just um yeah I think it’s and I also think too it’s not getting caught up in the hype right like I think that that’s what that’s the biggest
(22:47) thing that happens right is when you’re in a cycle where things are hot and everything’s moving and everything gets caught up in the hype and you know buying frenzies and you know paying for properties and you know you’ve got to be able to look at things I think with a longterm you right of you know are you going to be happy with this is this is this purchase going to make sense over the long term right um because you know if you’re in a situation where you need to refinance for some reason and you bought at the peak of the market you
(23:10) know you’re you’re not going to be able to right so it’s like does your plan make sense with with what you’re doing oh and by the way I checked RPC stock after what you mentioned and they’re doing just fine yeah so the market seems to be okay with what they’re doing totally and you know what’s funny like I’ve had a lot of mortgage brokers who I mean because obviously most of my clients were mortgage brokers right Banks mortgage brokers credit unions and they would all try to tell their clients like oh yeah you can actually um you you know you can
(23:39) qualify for this you can get you pre-qualified but they’re always running checks you know at at the end right and that’s so people run into trouble and so I’m honestly here doing anything preconstruction um talk to RBC a mortgage specialist there who does these types of deals I’ve got someone I can recommend um if if anyone needs and um it’s incredible right because you protect yourself so so yeah even with their lending practices they do seem to be doing okay which is a good thing all the condo P out there I’m
(24:05) surprised more people didn’t go to our BC I don’t know if it’s a thing that’s not well known I I honestly don’t know yeah it’s like like nobody knows no one’s heard of RBC before kind of right like that’s that’s where I would go we only have what five big Banks well yeah and I think the other thing too is they’re not accessible right to the broker town right they’re only like like Brokers can access RBC right so that’s probably one piece to yes thankfully a lot of my friends who are in the broker channel will tell you
(24:36) what’s best for you yeah yeah yeah and that’s not always true with all everyone that’s piding commissions all right so let’s talk about developments what what what spurred the interest into being a developer so so tell us about the journey to becoming a developer and yeah let’s start there yeah yeah yeah well I feel like I always knew that I wanted to shift into I mean I’ve always been invested in real estate um you know I bought my first condo when I was 19 um it was a foreclosure um you know I I bought a property that was a development
(25:07) site I think in my early 20s I didn’t hold it long enough but I still doubled my money like little little things that um but I always knew I want to shift into it in a bigger way and I think um it wasn’t really until things had kind of slowed down after the peak of of March of 2022 that I was like okay I think it’s time like I think I can actually create space in my life to uh really explore this a little bit further in the way that I want to because I was always really you know I was busy with appraisals right running free firms um I
(25:34) got a family as well and so it just felt like um I didn’t want to just jump jump into things without actually having the proper knowledge and education I I felt like I knew I knew you know I had a pretty good Baseline and knew a lot um but I knew I didn’t want to jump into uh doing developments on Vancouver Island um for a few different reasons I mean it’s an appreciation Market here and I do invest here and it’s an incredible place to live and invest um but I knew that I wanted to i’ always kind of had my eye in Alberta um and Edmonton
(26:00) specifically and so i’ kind of been following that market and so um when it kind of had this time and the space um yeah I just kind of started diving into it a little in a little bit of a bigger way and I ended up hiring a um a real estate Co so I end up sing someone to that knew Alberta and new new construction that I felt could fill in the Gap right like with the know I had could fill in the gaps and help me um kind of get get on my way so that was sort of the first thing that I did and that was really invaluable
(26:29) um in terms of getting getting the right information to feel comfortable moving ahead so and then also opening the doors to contact right contacts and assist to projects and and things like that um and so yeah so I yeah just sort of Dove Dove all in and um yeah here we are so I’ve got I think at the moment I’ve four yeah four projects actively under construction and then um I’m also working on a 94 unit equipment building project um as well that’s a mouthful and then you had so little to say when I asked what was keeping you
(27:03) busy well I said real estate investing I said real estate investing and teenagers I real estate investing three words yeah yeah real estate in they cover four projects in their construction and a 94 unit building all in three all in three words yeah I mean do you car a shout out your coach yeah I know I’d love to so I end up hiring Russell westcot um and I think he’s been on your show um and I think only three times he might be up there with the totally so I ended up doing some research just on sort of the market that
(27:39) I was looking at and who was kind of doing what and and um had kind of been doing it for a while right there’s a lot of coaches out there that I think are you know incredible and it’s just about finding the right fit so I did actually jump on quite a few calls and interviews of people and just to check but just just personality I think was a big thing too um and I just really jobed with with Russell and so got to work um and uh yeah was able to kind of fairly quickly after uh starting to work with him you know was able to kind of acquire my
(28:07) first deadening property and and just you know started building from there that’s amazing and before we’re recording I mentioned that how so many people don’t comparison shop yeah you did say that yeah I think it’s important I think I think you need to why not like we’re investors first of all which is partly about comparison shopping for Investments where will my money work work the hardest and no different or will get the greatest return on your investment for your coaching dollars your education dollars totally and I
(28:35) think it’s like if you’re if you’re considering on like it’s like learning anything right like you know if you want to learn I don’t know Spanish for example right or whatever you tennis like you’re going to you want to learn how do you learn who do you want to learn from what’s their experience do you je with that person right um you know and so those were all big things for me to consider and and I think you know the funds that you’re going to spend you know in working with a qualified coach to learn the specific
(28:58) thing that you’re wanting to learn is going to be you know it it’s going to come back to you like I don’t even know thousandfold right by investing in the right education for where you’re whether it’s investing or something else you know it just F TRS your your you know your end result I guess you could say can agree more um there’s all these newer organizations that are charging between 20 to 35,000 or more and but there’s some of the best coaches don’t work for an organization they have their own like the Elizabeth Kelly the Russell
(29:32) westcotts like Quinton dusa used to coach Julie broad from from the Nao used to coach and she in my opinion she was the best before she retired out of Nyo okay no I’ve never yeah but she since moved she I believe she’s mostly in La now but um okay yeah my point though is that for low five figures somewhere over 10 grand you could have pretty much any of these coaches on a one-on-one basis versus folks joining organizations that charge a lot more and the coach that you get will have nowhere near the experience of one of these folks that I
(30:05) just named well that’s exactly it and I think there’s a time and a place for everything right like I think some of the larger organizations do offer that like connection with other you know investors and like there’s other there’s other reasons maybe to join you know those types of groups but from a coaching perspective I mean I couldn’t agree more right like you’re going to get placed with a coach who you know may not have experience in what you’re trying to achieve and what you’re trying to invest in and also you know what is
(30:30) the training that that coach has gone through how long have they’ve been a coach how long have they’ve been a real estate investor right like a lot of the organizations you know they’re essentially if you’re in their Community you can become some coach right and and you might not necessarily have a lot of experience as an investor right so yeah I think it’s really important for you people to just kind of flush out what they’re looking to to learn and and see who’s out there right like you know until you start listening to podcasts
(30:53) and Googling and asking around who who’s doing what where um right then you come get a Vibe for who we might want to reach out to and then see if they’re a good fit you know I look at everything almost at an Roi perspective let me try a lower price thing first before I go after the biggest price thing yeah totally for sure I agree so tell me tell me about these projects you have um like for the listener benefit like paint me a picture what what what are these projects that that you have under construction yeah so um I’ve got so at
(31:27) the moment I’ve got two six units in filds um so those are essentially um you know older houses you know kind of like one level older Bungalows that were torn down sort of one previously one small single family home usually around a th000 square feet um and essentially what’s being built there now is a duplex if you picture a duplex uh twostory duplex with a basement and the basement have seat and then um a detached garage with two sleets above so in Edmonton everything’s got um rear Lane access so it’s really conducive
(32:00) to the detox garages the we right really unlik Victoria R Island right that model doesn’t really work because you don’t have access um to the back but um yeah so two projects like that one’s going to be complete actually next month um which is exciting and the other one is just starting construction and um yeah so that’s those two and then I’ve also got two 10un um construction projects as well happening yeah I can see a little bit of so that’s my latest 10 unit um what you thought there oh let’s PA you there folks I I’m
(32:36) I’m on Christine’s um Instagram page right now uh so let’s promote show your Instagram page christine. trer with a y. R investing we’re looking yeah this looks serious what what was on this property before did you tear something down or was this an empty lot on the one that we’re looking at right now win yeah so that’s my yeah okay so that’s a six units that’s the garage Suite um that you’re looking at right now um okay so on the six unit project that’s a garage enormous how many square feets this garage Suite uh the garage I think it’s
(33:24) about just under 600 yeah that’s the garage Suite that looks very nice nice yeah and the not the 10 unit that’s also under construction so um so I can break it down for you so the so the six units they typically have like older homes on them so like sort of a th000 foot two-bedroom Bungalow kind of thing right that hasn’t been modernized um and so they’re essentially replacing you know what was one unit with six units um and then I’ve got two 10 units under construction as well so the one that you saw of about the beginning of that video
(33:53) and the one that you paused on there now they two separate projects um that’s the site of our 94 units so I kind of just Little up a tour of of the stuff that we’re working on but um the 10 units so I’ve started investing in a neighborhood in Edmonton I don’t know if you’ve heard of it or when or if any of your listeners have but it’s called blackbord so essentially it’s um yeah it’s the site of the old municipal airport in Edmonton and um it’s basically the same size as Downtown Edmonton um it’s going to be home to
(34:23) 30,000 people on completion and it’s about 10 15% built out right now um it’s I think it’s 536 acres is the total site and um entally it’s owned by the city of Edmonton and um yeah it’s it’s one best new in Canada for 2023 and it’s all you know green and environmental and it’s a public bu community so upon completion it’s going to have all the schools um all of the you know spop Services Etc um yeah you can see it there youle photos that’s the original um air traffic control tower is it staying trffic control tower yeah staying isn’t that
(35:06) hilarious it’s part of the part of the development yeah but um yeah so all sustainable um you know geothermal heating and and like I said one best seing in Canada for 2023 so it’s it’s pretty neat and um it’s yeah like I said what 10 15% built out right now but um it’s sort of this upand coming incoming area and we’ll be home to 30,000 residents on completion so I kindy of equate it to it’s it’s kind of one of those areas there’s a couple areas that come to mind for anyone that knows in island or I don’t know if you do wi and
(35:36) and I can’t speak to anything in Ontario but there was these two developments in on V Island one was the old Gravel Pit in cwood um and is now Royal Bay and um the other one is is West Coast um and they’re both you know and they’re both sort of in the Westport area of of Victoria and when people started building in there and the development started happening this kind of back in 2006 everyone was like who would want to live there you know like it’s you know there’s nothing there yet and why would you want to invest there in places are
(36:06) expenses and you know kind of that that mentality and now it’s like you know those two areas are like one of the places to be right and so anyone that purchased there you know obviously years and years ago um now it’s like this is where everyone wants to be so it’s um I kind of feel like like blord has kind of the same vibe in terms of Remington um but I mean it’s got the new LRT station that just opened there um it’s Lally 10 minutes to downtown um no no no it’s it’s and it’s literally the same size if you look at what the
(36:38) size of the city of Edmonton is um this is literally you know the same size and so I brought um yeah two 10un buildings um under construction there right now and I’m and I’m yeah pretty excited about what this new um commic exp to the new communities are are usually a hit because then Community is kind of on the same level yeah as in there’s no like eyes sore properties yeah like everything around you is going to be brand new and and it attracts you know a specific type of person that wants to kind of live there
(37:12) right people with money yeah exactly who people with money want to live among right exactly right and so whether that’s you know you’re looking at that from a tenant perspective right I mean that’s the kind of tenant that you want right is is I love you know building sort of A1 Properties that are going to attract a really nice um Quality tenants you can see how big it is sorry the 94 unit project is is in is in blatchford or they all in blatchford or well no so my six unit info because info because this is the new community the
(37:44) infills aren’t in Blackford um but my two 10un buildings and the 94 unit Department building are in Blackford as well so yeah three of them are there and they’re essentially um you can kind of from where you’re if you’re standing there you can see them all um at the same time difficult yeah so it’s um it’s exciting and and they’ve got um some of the and it’s an area where you know because it’s owned by the city of Edon they’ve got sort of a builder list um where they release land right and um you got to be on that list to be able to
(38:15) acquire s um and some of the builders in there are selling them to investors as pages right where you can buy a specific um you know Pro multif family project and some of them are selling them off individually is that your plan are you’re planning for long-term rental hold yeah these ones are planned as long-term rental yeah so that actually is footage um a flashboard as well sorry are these yours no that’s um I B so the one the the 10 unit they saw this is the same Builder um but uh yeah know that was just some footage from
(38:53) when I was there cool yeah so it’s a cool thought I mean yeah I think k I love I love the new construction and the turnkey opportunities um I think they’re just yeah you really do get a nice Quality quality tenant for sure and and in great areas and and I’ve got an investing principal I think a lot of people have this but you know I won’t invest in anything that I wouldn’t live in myself so I don’t live in Edmonton I have no intentions in living in Edmonton but is it in an area and is it a product that I would be you know happy to move into
(39:24) with my family right if I was going to live there um and I know that that’s not everyone’s philosophy and it’s not necessarily the right philosophy but it is one of mine that I have to be able to um yeah have have a quality project that I feel good about right philosophies like that example I’ve had rentals well I’ve had student rentals right so My Philosophy is like at that age and if I was a student would I live there right okay okay you’ve got a on it right at that age when I live there yes okay yeah I that demographic and that
(39:55) income bracket when I live there yeah yeah yeah okay that’s good actually too I like that I feel like I could get behind that as well you you like Victoria I like Oakville like they’re they’re generally nicer areas but we can afford to be here that’s why we’re where we are yeah yeah totally right and um yeah I mean I love Edmonton I don’t have any reason to live there um and that’s the thing it’s like you know I think adminon seems to be I know there’s a lot of places in Canada but as far as sort of a bigger city in Canada it is kind of one
(40:28) of those places where you can you know it can be professionally managed um and the numbers still work right so it’s it’s not a situation where you know I mean I know someone who’s investing in edtion and they live here and they’re flying back and forth you know every couple weeks to deal with issues at properties and you know that’s not really how I rule right it’s got to be proportionally managed and and taken care of so yeah it’s a fun SP for for for the listeners benefit who doesn’t know how to get in into a project like this how
(40:59) did you get into it um well I would say I mean I’m gonna I’m G to uh I’ve got to credit Russell with that right I mean I essentially you know started working with him so I’d say find a coach or Mentor that um that you’re wanting to work with and and what you’re looking to specifically achieve through working with that person um and essentially he was able to connect me with people that were putting these types of projects and Deals together um and so I just sort of ran with it and now you anything that I do is buil on
(41:29) relationships right and so um you know and now now in a situation where it’s like you know in terms of acquiring projects and and properties um you know because I built up those relationships um I’m able to kind of continue to work with that group and um you know have to S of the stuff that they have going on so I think it’s all about people right it’s all about connecting with the right people right people is the key is the key word yeah connecting with the right people right um yeah and I think you know I like the turnkey model um I like
(42:00) the fact that you know through relationships I mean Russell’s been doing stepan Adon for 25 years he’s been working with a group for you know 20 years they’ve been working with builders for 10 years you know the same Builders and so to be able to kind of toop into that and have access to that without you know me having to go yes I could go hire a builder right I know people that you know hire a builder from ad mention but guess what if you’re not there who’s managing us right if you’re not on site and advention every day who’s managing
(42:26) your construction site right um I think that’s where sometimes for for me the appetite for risk is you know to what you said earlier you know I need to be able to sleep at night I need to be able to know that you know I do work with um private investors so I need to you know be able to feel comfortable with the information I’m sharing with them um and so it’s through those relationships that I can do that right because I’m getting updates on projects I’m getting you know video tours regular updates and I had to ad mention you know
(42:51) fairly regularly too um to check on things and and anytime I’ve you know popped there everything’s been exactly as what I was told right there hasn’t been any surprises but I think you do run the risk where you know if I just call up a builder right and I intend to go build a house on at slot you know am I going to be able to trust that everything’s taking along I I don’t know maybe but I feel like there’s more risk for me I think you can quantify risk based on your work experience yeah but but you know what like I know people that are doing that
(43:24) and and I also feel like there’s there’s just more more risk and and I like to kind of drisk you know any situation um as much as possible yeah drisk I think that language has been used more often in the last two years five last 10 yeah at the conference you were telling me about about the the return math like that’s that got you interested can you share about the Returns on your investment that make that made you interested in being an investor in Edmonton oh yeah yeah um okay so I don’t have anything open on my screen right
(43:53) now but essentially sort of kind of looking at the info um at the inso projects so we’ll start with those because those are kind of the smaller ones so sort of the six units um and I know a lot of people on on sort of the similar sites are doing eight um and you can do Eights on similar sites so if we’re talking six or eights you know we’ve all probably heard DHC mli select financing and um you know that’s where you can get up to and just de clear up to 95% loans to Value um you’re not always going to be guaranteed that
(44:22) you’re getting 95% um even if the building or the project does qualify because there is some underwriter discription that um plays into that but yeah essentially to be able to get into a project um and on some of the deals that I’m doing essentially it’s a 5% deposit and you can either structure it to do completion financing or construction financing so in the construction financing um you know you’re able to include a lot of your costs like your soft costs related to you know that project um and so you’re really into the deal you know for very
(44:54) little right um on the end of the day um so on on the first one I did it’s done as construction financing and I think I’ve got about a 90 $90,000 development management Fe that’s coming back on that um and so that’s going to be direct um pay back to to my ancestors um and so I don’t have the numbers on that to tell you exactly you know how much we we’ll be into that project for but you know it’s it’s going to be less than it’s it’s going to be less than 5% based on how the numbers are working out um and so that’s pretty incredible and the only
(45:28) reason I’m appra I would never say again I’ve seemen to many things on the appraisal side to know that this is not a good um situation but you know you hear 95% financing and it’s like oh God that just doesn’t sound like a good option but because there’s already equity on these projects right so for example if they’re being purchased around the 1.
(45:49) 67 range um but they’re appraising at 1.93 1.94 you know you’ve already got some good equity on these um in the deal so you’re not really financing at 95% if that makes sense you know what I mean like you’ve already got Equity there so that’s why the 95% financing you know in my mind is is totally different than if you’re doing a straight up purchase of a residential home you know for a million bucks and your mortgage is 950,000 plus your see Cs and you’re already overleveraged right at the beginning if you were to make de so um so yeah so that’s kind of what the breakdown is um
(46:21) on on like a for example and these aren’t subjective appraisals can can you talk to while you’re the perfect person ask how do they appraise these properties how do they appraise the after repair value is the lingo build value yeah well it’s completion value right so to be clear my yeah so for me as an a phaser I’ve got my CRA designation just to be clear for your listening so residential um and I never ended up getting my a so when I got into appraisal this is before the days that you actually needed a University degree I don’t have a
(46:51) University degree um and you could get into the anaer with just you know going through the program um but never did get my ACI because that would have involved getting a University degree and then and then getting um certification for commercial um but on these six plexes so it’s based all based on numbers it’s all based on the income right so um the appraiser that we work with in Edmonton essentially they know that we’re going for the CC financing and so they will kind of mirror what cc is looking for in their appraisal in terms of the numbers
(47:21) that they seeming to be wanting to use and how they want the project to be Quantified um so it’s all based on you know vacancy basically income and expenses right and um so I mean they’ll look at the rents and you know of course they ask us what do you think it’s going to rent for we give them our performance but they’re doing their homework to say okay is this actually going to rent for this what are the comparables um showing for rental and all of that from their database and so yeah I mean it’s it’s absolutely coming from a third party um
(47:48) appraiser just based on numbers right and what what the Market’s doing and and do they have comparable sales to compare to or people selling these um they do so they’re using primarily the income approach on it which is which is again one of the benefits of you know um doing commercial financing versus residential right so for residential everything’s based on comparables right um so your your house is only going to be worth you know what the house in the neighborhood sold for down the street or you know without
(48:18) knowing all the details around that um but on Commercial it’s based on the numbers right so it’s essentially a business right to become as business sustain itself based on the expenses and the income and um so these ones I mean I think the answer is yes right so they do take a look at um comparable sales but primarily um it’s based on the Inc and then there are like commercial buyers for these properties yeah Oh you mean on the flip side like if it’s a long-term Buy and Hold yeah because yeah well I mean investors I would say other investors
(48:54) are re or yeah I would for sure like I think a lot of people investing in Edmonton right now are investing in these types of six and eight unit infills for sure if you talk to like investor um like Edmonton investors this seem to kind of be a sweet spot Alberta yeah yeah I mean it does seem that way and I think for good reason though right like I feel like it’s like you know I don’t think people are necessarily getting caught up in the hype I think there’s a lot of Market fundamentals um that are really strong
(49:22) as to why um you know Alberto is having a moment right now which is a separate uh topic but yeah I think investor clients um you’ve also got the option depending on how you structure these um you can have them on one title or you can have them on two separate titles right so um and and with the CXC financing there is a 10-year Covenant if you are going for the M Source financing um but it is assumable right so if you were to sell the property assumable too yeah so you can actually yeah so um you are able to sell them within that you
(49:52) know in less than 10 years um if someone’s going to you know take that on right but yeah yeah yeah right so um so you’re not necessar like you can sell them within the 10year piece or timeline I should say Facebook profile oh yeah yeah yeah move around so that’s kind of the six units and then and then for the 10 units um those were done as straight up purchases and so for an example um you know the first one that that you saw when you were looking at I that was um not the one that was a drive with the one that was at framing stage um that
(50:30) was purchased in December for 2.82 two million and the appraisal came back before I remove conditions at 3.5 million so you know you’re you’re almost a $700,000 um difference between your purchase price and your appraise value so there’s some good Equity right in terms of um in terms of buying these projects right and and the builders you know they like to do these deals because they’re not not dealing with Realtors they’re not dealing with so they it’s a guaranteed sale right they’re kind of more in that build and sale model um and
(51:04) so essentially on those it’s like a 5% deposit and then nothing’s P till completion right so they’re funding the bills as well which is pretty incredible right so if you were to ask people I don’t know what it’s like in Ontario but if you were to ask people in Victoria like hey um if I give you you know 5% if I give you $150,000 do you want to go build this project for me and I’ll pay you when you’re done like they’re G to slam the door in your face right like they’re going to be like are you crazy um but in Edmonton it just it’s a
(51:30) different kind mentality there’s a lot of bigger con and I would say companies like my senses there’s companies and they’re just construction companies whereas here for example and I think it’s like just in Ontario in a lot of cases everyone wants to be a builder developer right they don’t just want to be a a builder right they don’t want to kind of share in that that win of like you know if they knew that the property is actually worth if they wouldn’t want to sell it you know um whereas in Edon fluence kind of just were were a home
(51:57) builder like they’ve already built their margins in so they’re already happy with the purchase price that you’re paying right they’ve made the money that they wanted to make on this deal so yeah there’s some really neat opportunities an interesting point some of the big players are just builders for example triell which is one of our biggest condo Builders here is just a builder they’re not really a developer they may be called a developer but they when they buy something they’re building it within like a few years right it’s
(52:23) not it’s not like you’re huge builders that you know who’ve owned the land for the last 30 years that’s like a that’s that’s a large scale developer and then we have the smaller folks today that are trying to do both yeah it’s not the easiest thing to do no and I think it depends on your business model right How They Se with things what their goals are but um but yeah there’s definitely been some attractive opportunities um in Edenton and I think I think it’s going to continue for the n a little bit for sure and my conversation with Russell it’s
(52:53) way easier sounds way easier to execute out in admon that it is pretty much anywhere else in the country anyone’s listening wants to challenge me on that I’m happy to hear it yeah well and I think it’s because the numbers work right like um the numbers make sense and I think you know the lenders we can see that people are moving to Edmonton right it’s one of the fastest population growth in the world happening right now and because the city is pro development right they they want to double their population in the next
(53:21) 20 years which is crazy right so going from one I think it’s 1.3 million to 2.6 million in 20 years is pretty wanted right so they’re building up infrastructure they want everything contained in inside the circle which is the Anthony H that goes around the city um to avoid Urban spra so they’ve got some pretty clear um goals that they want to hit and so I think it’s making it attractive for you know private investors to kind of come in um during this period in time and and create some some housing to support the city
(53:48) schools for the listener’s benefit can you explain why you can could you make this happen on Vancouver Island could you do the same type of investment I know the answer but I think for the best benefit they should hear it from you yeah um I’m gonna say no the answer is no you cannot do this on Vancouver Island or it’s not like Vancouver Island doesn’t need the housing no I think so yeah exactly so I think um it it’s all to do with and I might not be using the right teral but the the housing prices right so van of Island for example and
(54:19) like a lot of other markets are are appreciation markets right so Edmonton you know you’re going to get some appreciation but you’re going to get crash the numbers don’t work on them to a simple answer right so um what you’re going to get for rent you know I think the average house price is 1.4 million in Greater Victoria so you know that’s going to be averaged right and it’s never worked right so what was happening here is people would buy a house and to be able to cash flow if you’re an investor you would add you know one or
(54:44) two illegal sweets um and maybe maybe you’d Break Even I’m not condoning that to be clear but that was we would be what was happening for properties to just break even um and so a lot of developers here actually like a lot of build here is not happening so when you go if you drive around Vancouver Island or Victoria it feels like I’m going to say deadsville right from a from a construction perspective when you get off the plane in Edmonton every everywhere you turn it’s like Construction Construction Construction
(55:11) Construction it’s completely a different environment and it’s because the numbers work um and because the housing prices are so much more affordable um that’s why the numbers work yeah I don’t know if that makes sense but for the listeners benefit the average bace of a home in Edmonton area for last month was 440,000 ver you’re saying greater Victorious 1.
(55:36) 4 million yeah right and you can see here what you’ve got open ear is a 12% year increase right and then a detached is an average of 553,000 so still like 60% less than Victoria yeah and another thing that’s so interesting is is Alberta does have some of the highest they’ve got some of the most affordable housing prices but some of the highest incomes right so when you have a conversation and and perspective is everything right so if you have a conversation with someone in Victoria they’re like oh it’s expensive
(56:11) here if you have a conversation with someone in Edmonton they’re like I can’t believe how expensive it is here the housing prices are through the roof right but they could be making more money than someone in Victoria right and I think it’s just what people get used to like it’s you know the same thing like Toronto Vancouver um it’s what you get used to I don’t know if that makes sense but it’s like your housing prices are through the roof I mean what like it’s crazy right but that’s perception in advention right is that housing
(56:35) prices are crazy because they’re still the 20th most affordable city in Canada so I think that there’s just so much more room for prices to increase right like while we’re seeing rents come down for example in Vancouver and Toronto and Victoria which are like really expensive markets um I think rents in the last year in EV have gone up on average 17% that’s not the norm but that’s what’s happened in the last year right so um yeah it’s an interesting Market to dig into for anyone that’s you know considering it definitely interesting that I hear it
(57:05) all the time everyone thinks real estate prices are crazy no matter the context and I showed you my host in Texas which is a lot less than these prices yeah oh totally like hold on I’ve got something for you yeah it’s it’s fascinating right it really is fascinating of what what different perspectives are on different you know markets and situations and now you’re currently pursuing your mortgage broker license uh and I asked if I could ask you about specifically because there’s a lot of people out there looking to improve their cash flow
(57:40) situations their their active earnings can you can you elaborate while you’re getting your mortgage license yeah so um someone recently said so we were chatting and we’re Real Estate Investors we’re always chatting with active income and business and real estate investing and what we’re all up to and someone recently um said hey have you ever thought of getting your mortgage broker’s license and I was like what no like why would I do that you know I had never entered my mind um and I actually used to get ask that question
(58:07) quite a bit of why am I not a realtor why am I not a mortgage broker when I was an appraiser right people like why why are you an appraiser and not doing this that I hadn’t thought about in a long time and um I was like no I I haven’t why why would I get that and they’re like well think about the deals that you’re currently done in the last year you know how much have you paid in broker fees and I kind of did the math and they’re like that there’s a big chunk of your active income you know if if it’s something you want to look into
(58:32) um and then you know so I started kind of looking at the numbers and digging into it and processing it and really thinking about you know is this going to add value to you know my current um you know relationships and Partnerships like you know is that going to add value to what I’m currently working on and um you know I do work with some great broker Partners right now but I think um I think there’s definitely value of bringing things I say like inh house but having a bit more you know control over the process and being a little more
(58:59) intimate with the process um in terms of the investor relationships that I have so so yeah I just decided okay why not um and so I’m currently in the process of getting licensed I I just you know I’ve been away in Century so I’ve been back for a week well it’ll be a Week Tonight on the date that we’re recording this but um I as soon as I got back I registered for the course um in Ontario and I’ll be writing my exam this week and um you know licensing I think takes two to four weeks something like that but um but yeah and then my plan is to
(59:31) get licensed in you know once that’s established to get licensed in Al on DC as well um so yeah so I I was there when you had that conversation I wasn’t I wasn’t overhearing actually did over here some of it but just to show just to demonstrate to The Listener what an action take you you are that conversation was 2 and a half weeks ago right yeah and you’ve taken action on it yeah and I was was away in sanini for a week so I couldn’t I didn’t I decided not to take ason alls away but reasonable reasonable yes I gave myself
(1:00:03) a week um well way but yeah I came back and it was just yeah and I think too like I mean to be fair when I mean I was a real estate appraiser for 20 years so you know I’m a real estate investor so you know going through the course you know was not that challenging right because I’ve been in this world for a long time so for someone who’s new um you know it might take them a little bit longer which is totally fine I think they give you six months to complete the course you do it at your own pace um and then you can you can write the exam but
(1:00:31) yeah I’m excited I think it’s going to bring um even more value to to my partners right um you know with having that appraisal background now bringing the broker piece um into it and be being able to help other Real Estate Investors right like I think I’ve got sort of a an intimate knowledge of of you know with my own projects and and the appraisal backgrounds I think I bring a little bit of a different perspective um you know to the people that I’m working with so it translate U really nice be another another
(1:00:57) that yeah there nothing else you can just do your own deals and save a whole ton of money well exactly right I mean why not because I’m already intimate with my own deals anyways right so um and my understanding is there’s a disclosure requirment of course um but that’s not that’s not a barrier to doing your own stuff so be interesting to see how that plays out but yeah I’m excited cool now what’s next for you in your journey I know you have involvement with the with the mft what’s that stand for again uh mutual fund trust so yeah
(1:01:30) so I so currently we didn’t touch on this but we’ll touch on it if we have another minute um so I’ve also got a 94 unit apartment building that um we’re in the process of onboarding investors for now and and we will be submitting for our DP which is our development firm at any day and um so my my partners on that project own an mft which is a mutual fund trust and so we have partnered uh with their MF to allow investors to use uh registered funds so RPS tfsas um that L that type of thing um to invest in in real estate and in this 94
(1:02:05) unit kind of building so I would say that’s probably the biggest thing that I’m working on right now the other four projects that I have actively under construction are all really just kind of ticking along right um but this one um you know we’re actively working on getting all the pieces um dialed in and complete for that and it’s it’s F to offer a project where people can actually um invest their registered funds m um because think a lot of people a lot of the conversations that we’re having anyways are you know people are
(1:02:31) you know have to registered funds with you know one of the banks or somewhere and they don’t even open the mail right and when they do open the mail to read the statements they realize oh boy this is like not a very good return um and they love to continue to expand their real estate investing that don’t necessarily want to be active or maybe don’t have the cast you know kicking around um and so that’s been great to be able to offer that but I would say that’s my my next kind of biggest thing that I’m focusing on and then and then
(1:02:57) the bigger picture is to um sort of formalize I’m formalize going maybe a weird word but kind of just yeah I’d like to I’m I’m working on um creating a real estate investing s and um yeah not sure what that looks like exactly yet but that’s kind of part of a bigger Vision that I’m actively working on and um yeah calling in my bizy I’m going to say um of um yeah of of someone that I’m going to create with I don’t know who that is yet um but it is on the vision board and um yeah that’s kind of what I’m working on and among everything else
(1:03:34) super cool and with the mutual fund trust what is you’re offering investors is it Equity is it yes mortgages is it what is it no no no yeah so anything that we do is is equity so essentially um anyone who invests in the 94 unit apartment building is an owner of the building so you do get equity in in the building um and you know it’s it’s obviously the more that you invest the more Equity that you have so it depends on what your investment is on that particular project irn um it’s a $7,000 minimum investment
(1:04:06) um and that’s to keep us on side with Securities um commission rules and requirements um in terms of what the cital raises and the amount of investors that we can onboard um so yeah so it’s it’s equity in the building so you are an owner of the apartment building and um it’s a longer term hold for something like that is you know you’re kind of in that five to seven year um C window right when you add your construction uh timeline um the construction and then your your five your hold to tie in with your yourage how long do you think it’ll take
(1:04:38) to get built um it’s about a two-e construction period That’s not sound bad and this is a highrise no so it’s a low so it’s a lowrise four story uh building 94 units don’t see any of those onar perlex well land is land you well you know there’s no different Victoria Victoria land is crazy expensive yeah yeah so you’re going You’re Going vertical yeah yeah yeah no the land prices are are it’s a different world in in admington orone just put it that way in terms of uh you know prices and construction costs and and anything that
(1:05:19) um that I’m doing one the other things that I should touch on is any any project that I’m doing in on boarding inves for is you know there’s always going to be equity on on the buy and so you know on the 94 unit building for example I don’t have the numbers open in front I think it’s about $4 a half million dollar of equity um on the buy that’s available to sh Anders so um I mean it’s just kind of creating that and then what’s the exit how how are the um how’s the funds available to pay out investors yeah so that’ll either be on
(1:05:55) at the end of the fiveyear hold period that’ll either be on sale or on refinance so even though you can’t technically I’m going to use the word refinance it technically would be a sale like but it could if we were going to hang on to the project it could be a sale to a new ownership group so a call it to refinance you have to structure it as a sale um so we’ve got a couple options um there and I think given the location of the building um the fet of you know brand new construction um I think there’s going to be a lot of um
(1:06:24) you know possibilities not for someone that INSP and are the 94 units are the individual title like could you sell them off piece by piece um they are uh let me get this right because who’ve been working through this um they are individual well we’re not sorry we have’t made that decision yet um they we’ve not made that decision yet but I think they they are structured so that they could be sold off individually or if we don’t um do that at the beginning everything is going to be set so that we can do that basically just getting the Str plan done
(1:06:58) um but we’re reviewing sort of the tation um and different components as to what makes the most sense but um but the long and the short answer is yes that’s likely a possibility but again when you’re under the state financing you’ve got that 10year Covenant right to be able to get the financing so you wouldn’t be able to sell them all for 10 years individually individually individually yeah yeah not not the cleanest cut there has to be decision made yeah exactly it’s nice that you have the choice because all these things
(1:07:31) are difficult here in Ontario yeah yeah yeah yeah funny that we have different lingo as well across Canada you call it strata we call it condo oh yeah I didn’t really think about that but you’re right actually they essentially mean the same thing yeah we have Pondo boards you have what do you call it strata boards strata Council strata Council yeah You’ think it’ be the same we’re in the same country like why wouldn’t they just standardize it you know so we’re talking about the same thing different countries I get but provinces you’d
(1:08:04) think it would all be the same I’d never thought about that before but you’re so right there are different terminologies I’ll chat gbt with the differences later yeah yeah it wouldn’t find out let me know conceptually they seem the same the tax handling is always different as well but then you yeah you have layers complexity not the easiest yeah let me know what you decide because yeah as well all right how do you how you doing for time we’re at a time but how you doing for time I’m I’m I’m good you’re good I’m good yeah yeah CH gpg says I
(1:08:39) should ask you you you seem to have a strong work life balance especially with your passion for spending time your lake house we didn’t talk about your lake house that you bought no oh my God that’s a story for another time I the best manifestation story behind that that’s right go ahead how do you manage balancing your high-paced real estate career with personal time for family and hobbies like you mentioned you have teenagers how don’t bance the time I feel like it’s always been family first for me always like kids kids first and
(1:09:12) so it’s like in my calendar everything goes you know the school soccer games the non-school soccer games the dance recitals um it all just kind of goes into the calendar and and when when you are an entrepreneur in Earth I feel like you’ve got ultimate flexibility right like even when you have a lot of things on the go you’ve got control over your time which you don’t have when you’re in a 9 to5 right so some days it’s like this is happening I need to at 2 o’clock I’m done I got to go school pick up and and we’re off for the afternoon I’m not
(1:09:39) back till 6 and maybe I’ve got a couple things I’ve got to you know deal with that evening right that I need to off my desk um so I just kind of feel like for me every day is different like I don’t kind of jump into a into a specific routine um I was very regimented and routined for like a long time and um you know I just sort of thought wasn’t really working that well for me so I like the freedom to just go with the flow in a way um and Summers I mean Summers we live up at the lake um so we just basically spend two months up there
(1:10:06) and all the friends and family are over all the time and um so that’s our you know family family 10 247 for sure amazing all right any final thoughts you want to share I know you’re you’re big on found uh for helping out women as well any final thoughts in general you want to share Before I Let You Go yeah yeah yeah um let me think about that um yeah I do to touch on that I do love I do run a free community online called she build love um for women that want to learn about real estate investing and um we did a chat about like tomorrow we’ve
(1:10:40) got some coming in to chat about um you know investing in the US and what that looks like um you know we’ve got someone coming in to chat about joint mentors in two weeks right like just different different people coming in chat about different things um and so I just love that because there were so many women in my world that sort of felt like real estate investing wasn’t for them and wasn’t possible so I love just sharing yeah like I think it’s just this this sort of misconception that it feels like it’s more complicated than it is maybe
(1:11:05) not that it’s easy but um it is available to everyone and I love being able to share um that and information with women that are interested in up exploring it so um yeah that’s something that we do um Wednesdays uh 10: a.m. PST 1 pm EST um and replays are available on not so that’s just sort of a fun um fun a de that I work on to and um yeah I would just say yeah if anyone wants to chat about Edmonton um or new construction Edmonton I loveing real estate in obviously um andon because my market so yeah and like always open for
(1:11:40) conversations or sharing information amazing thanks so much for doing this yeah thank you okay can I ask you one question before we before we go and Jo know have you been to swis La recently I not that I Haven been on my mind but uh okay inside joke but you know yeah just wish La just yeah just bonded over that at the conference but uh yeah well thanks for having me on when it’s been so fun and um yeah we’ll stay in touch amazing thanks so much for doing this yeah thanks take care bye all right friends that wraps up
(1:12:20) 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 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
(1:12:45) 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 drop 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 and we’ll see you 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) 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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** Transcript Auto-Generated**

(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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On iTunes: https://itunes.apple.com/ca/podcast/truth-about-real-estate-investing…/id1100488294

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On iTunes: https://itunes.apple.com/ca/podcast/truth-about-real-estate-investing…/id1100488294

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On iTunes: https://itunes.apple.com/ca/podcast/truth-about-real-estate-investing…/id1100488294

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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
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