Erwin  

Hello, welcome to another episode of The Truth about real estate investing show. My name is Erwin Szeto and I trust everyone is out there enjoying the lovely spring weather. Fun, useless fact of the day, Denmark is slowing down their vaccine rollout because apparently they have COVID in the control, which is fantastic news for them. Statistically I can verify that they’ve got COVID pretty much under control. And that’s fantastic news for what is probably hopefully to hear calm as well. COVID less of a concern. It seems to be seasonal. I’m not a doctor, folks, please listen to your doctor. Not me. Anyways, but the Yeah, all positive news. Me I’m still planning on getting boosted in the fall. I have too many friends who’ve had bad symptoms several multiple days in bed. I have a low tolerance for suffering personally. So that’s my risk tolerance. Everyone else has their own risk tolerance. I just can’t stand being stuck in bed sick. I have too many things to do. Anyways, I trust everyone’s enjoying this lovely spring weather. I was lucky enough to get in a round of golf with some buddies, my first round of the season, unfortunately, was pretty darn cold. And I’ll use that as an excuse why didn’t play great. I shot a 118. But that was much improved over my 12 months go score the same course, were I shot 130 for my first round of the season. Yeah, my puting was garbage. And I swing way too hard. I swing too hard and lose control. That’s actually a good analogy for real estate. A lot of these companies and individuals who are who are not having a good time investing in real estate, you know, I’ve mentioned some of them the show, oftentimes it’s not because they’re bad people, it’s just they swung for the fences without having a good foundation in place. Anyways, golf prices are also a victim of inflation. Like many things, the posted rate at my golf course is the price of the public is up around 30% higher than last year, which I know it’s upsetting to many people. And I also heard the cost that they’re paying for bag of fertiliser, used by the golf course went up from $38 last year to $71. Last year. So this year, sorry, from 38 last year to $71 this year. That’s an increase of 87%. And I think we all know that fertilizers are used more for more than growing grass on golf courses. They’re used to grow food as well. And sadly, I think we know where food prices will be headed. Since fertiliser is used for going through too. 

Erwin  

One thing that’s not going up in price right now is real estate. And as predicted here, I believe I shared it on the show. And I shared it at at our real estate meetups. Now in real estate meetups hosted by Cherry and I, I predicted this coming we advised our clients that they’re planning to sell within the next year they should be selling early in the year ahead of the interest rate increases and some of them did and did really well for it. Obviously, they’re over the moon having peak. So congratulations to them very happy for them. Actually one of them just told me on weekend at our most recent meeting, but they’re handing me in the resignation this week. There. It’s time for the retirement. And we’ve discussed it, this would not be possible without investing in real estate. So yeah, maybe the lesson would be if you want to have an early comfortable retirement, consider investing in real estate. Let’s be honest, a lot of real estate is coming down in prices. We’re seeing prices down 5-10%. It could go down even more. Some see that as a bad thing. Not our client last week as we scored a detached bungalow for under 700,000. In Branford Zoning Bylaw allows for a basement apartment. And the early quote for converting the garage the existing garage to a self contained apartment was well under 100,000. The early number was like 70. So our client can be all in for hopefully under 900,000. For what will be a triplex early estimated rent would be around $5,200 per month. Plus we have a lender who will provide the construction loan for the renovations. This is all bleeding edge folks. This is probably be only the second in all Branford that will execute with like this with a garden suite in a construction loan. So the something that we’re staying on top of I do believe that garden suites the which would be an addition, or tiny home on the same existing property will basically be the last opportunity for a major value add renovation to a property. So hence you can appreciate that we’re all over this strategy and to know knowing everything we possibly can. Anyways, two months ago, we may have needed to pay easily 5 or 10% more for the same property while also completed competing against a ridiculous number of offers. Because just like most of us, you understand the opportunity here. It’s not that common. So yeah, our client jumped on it. Thankfully we’re in a bit of a dip right now. And because of that, we were able to compete against less properties. And actually, before I go on our our keynote talk for the May iWIN real estate meetup hosted by cherry and I is all to do about garden suiting. So again, that’s an addition or a tiny home, built on an existing investment property, typically in the backyard, where we’re talking about the ins and outs of it at the May Iowa meeting, so you probably want to be attending that at our live and in person meetings again, so we’re only doing live and in person, there is no zoom or recording option. It’s a lot easier that way for us. So how awesome is that? While there’s some people are out there panicking about interest rates and falling right prices. Historically, again, I noticed a lot of people have trouble zooming out, not for all of you, because you’re all educated folks are smart, if you can zoom out. And you will see that the rates right now are historically still really cheap. And our clients will gladly use this cheap money to create some serious cash flow. And who doesn’t want more cash flow in an inflationary environment? The cost of pump gas is just ridiculous. And I think and on my way, driving today, I think gas was approaching $1.90. Our Tesla cannot get here fast enough. It’s funny enough that people keep asking me when the Tesla’s coming. Our current eta is July. It just keeps bouncing around. We were supposed to have it this month or in the next few weeks. But we get pushed out to July somehow. Anyways, technically, everyone should want more cash flow in their lives. It just makes complete sense. Also, on the other hand, real estate is pretty much the perfect hedge against inflation. Preferably our ground on government is best. And if you do follow the stock market, Like I do all the best dividend paying companies are trading at all time highs. So the market is buying companies that cash flow, right? Quick sidenote, thank goodness we own some of these companies. It makes shopping for example, it makes shopping at Costco a little less painful, knowing that we own a slice of their business excellence. Not advice, folks. Anyways, I hope everyone out there has their finances in order. I mean, like their mortgage capability in order to go deal shopping because that’s exactly what Cherry and I are doing.

Erwin  

On to this week’s show. Today we have an old friend of mine Moe Hansrod drawn who’s been in real estate since the early 2000s as both a investor and a property manager, Mo is currently an owner of one of the owners of kW property management. kW stands for Kitchener Waterloo, not Keller Williams, with around 2000 doors under management that includes 600 clients, mostly single family homes, with the average investor client owning three to five houses Moe’s on the show today to share some truths about real estate investing. Hopefully I don’t get in trouble for this. I’ll be sharing some of his experiences having to pick up the pieces after what some out of the term Realtors promised to investors in terms of overinflated tenant profiles and rents by as much as 25%. So it’s not me saying bad things about realtors. It’s Moe. So please, yes, blame Moe. Moe is also an investor in a startup company called RealMe property, a startup real estate financial technology company offering blockchain based affordable investing opportunities in cash flowing real estate. Moes young friends are here with us today as Akshat and Rishard, who are super bright. I don’t need to tell you about you’ll realise that quickly when you hear them talk about their experience and their education. These gentlemen are going places and they’re here today to explain what is a fractional ownership? What is their business, which is surrounds fractional ownership of real estate investment opportunities. As always, anything said on this podcast is for educational may be entertainment purposes. And it’s not endorsement of any investment, no matter what. I’m licenced to talk about real estate. And that’s it. For investment advice. Please seek professional advice from a financial advisor, which is not me nor my guests. My unprofessional opinion. I’m excited to see where RealMe goes. As I’m sure many of you would like an opportunity for potentially an early exit of a portion of our investment properties One day, while offering opportunity to those with smaller amounts of capital to invest because everyone needs exposure to hard assets. If you don’t know what that means, please read Ray Dalio’s principles of investing in the change of world order. I’m not gonna post that here because the book is honestly like an inch and a half thick. Please enjoy the show. 

Erwin  

Gentlemen, Moe, Akshat, Rishard, what’s what’s keeping you guys busy these days? 

Moe  

Real Estate. 

Erwin  

Differently, though, for you too. 

Moe  

Yes, definitely for us, too. 

Erwin  

Because we have a bit of a generational difference here. 

Moe  

Yeah, yeah.

Erwin  

Sorry, Akshat how old are you?

Akshat  

I’m 25

Erwin  

Oh, gee, okay. 

Moe  

Yeah, he’s half our age.

Erwin  

You don’t you can only in real estate. You’re too young, Cause Moe bought it all.

Moe  

Oh yeah, that’s why we’re here. Right. So I actually met one of the people on his team online, actually Facebook. And that’s how I got connected with them. So I can start tell you what I do how I know you. You and I have go back about a decade, that REIN, probably more

Erwin  

Yeah 2008. Yeah.

Moe  

Probably nine up, but I didn’t get into later, right. But I mean, I remember you had the tiger cats jersey. He’d wear it all the time. So he would call himself Mr. Hamilton. And anytime I say I’m going to meet Erwin, or talk to Erwin if somebody knows REIN or knows real estate, I say Mr. Hamilton the guy says Oh him. Okay. So we’ve been part of REIN, you know, acquaintances, and we talk online here and there. And I was with, you know, I would attend with a few landlords and a realtor team. And, you know, we we picked up a lot of business from REIN, it was great. Stop going probably mid about, say like, 14,15 when things changed, and yeah, so we’re still landlords, we’re still investors.

Erwin  

What? You’re not you’re still a landlord? Didn’t you hear the market slowing or something? You know, it’s government has some new plans for I don’t know, whatever.

Moe  

They’re gonna try to slow us down. But, you know, Tiger is not going to change his stripes. Right. So I’m part of kW property management. I had my own company tried to do rentals. I met a girl named Trish Montag, and she ended up taking over my company and I do the intake, new client sales leads for kW property management, and we’re out of Kitchener. And we service about 75 to 100 kilometre radius outside of Cambridge, Kitchener Waterloo, actually expanding into Hamilton and Milton now and some in Brampton, and we’re in Woodstock. Brantford, Paris Fergus, air Trumbo, all those smaller towns outside of KWC as we call it.

Erwin  

He made up some cities there I think, but we’ll let it slide.

Moe  

If you live down there, you’d know them right? So but we’re up to about 2000 doors, mostly single family residential, the majority of our clients have 1 to 3 doors. A lot of our clients are working abroad and don’t want to sell their homes because they they’re unsure of what the future holds and they don’t want to be chasing the market obviously which is taken off down here. Well in kWC anyways and in southern Ontario in general. So we look after it for them we sell the units collect rent to the evictions, if necessary, and you know, your regular Property Management shop so we have an office downtown

Erwin  

Regular means different things to many people. This sounds pretty end to end.

Moe  

Yes, end to end yeah, so it’s a full shop full hands off. We got clients all over the world. A lot of clients we’ve never met before they buy property here we you know, as long as you have a Canada bank account and FINTRAC it, you know, you’re aboveboard, we can deal with you. And so we make it hands off for our clients. We do everything from you know, placing that tenant dealing with them day to day to cleaning, to doing their banking to doing their licencing if the town requires it, etc. And we have a staff of 15 downtown Kitchener, where our office is and we do some commercial stuff like warehouses, medical pauses strip plazas, we even look after shuttered McDonald’s. So if McDonald’s closed the restaurant down within about 75 kilometre radius of our downtown office will look after for them. Right now. We’re looking after one for them beside Google downtown Kitchener. So they’re still undecided what they’re doing with that piece of land because very valuable now. So they’re one of our clients. But our main focus is single family residential, and, to a lesser degree, we have about 5% 7% of our portfolio is student housing, but it’s a lot more work we rather stay with single family and I’ve found it as a landlord myself just to be a better business, less turnover, less wear and tear, less dealing with, you know, students, parents yelling and screaming about something, and children fighting etc. Right. So that’s basically what we do, who we are and what I’m into. And I’ve always been into real estate investing stock market. Now I’m into crypto and I know Erwin is into all these things as well. 

Erwin  

I like making money. 

Moe  

Yeah, exactly. 

Erwin  

And, and we’re not hurting nobody. 

Moe  

Yeah, exactly. Exactly. And I attended his seminar with Grant Cardone pre COVID. And that was great. And that being said, you know, it’s sometimes you know, I like to dabble in other things. So, I met Amna from x shot and Rishards team of RealMe property, and they will explain what they’re up to. And I’ve joined their team as consultant advisor/acquisition guy I, and kind of help them grow out what they’re trying to achieve. And we’ve already acquired a couple of properties out of town. ones in Kirkland Lake.

Erwin  

How long you been in real estate? I’m still trying to qualify you as an expert. I’m not sure we’re there. 

Moe  

Yeah, actually my first property I bought was in 89-90.

Erwin  

Okay, longer than you two gentlemen are alive. 

Rishard  

Yeah, of course.

Moe  

So fresh out of high school. Okay.

Erwin  

And then, and then how long you been in property management? You mentioned it before.

Moe  

Early 2000s. And then I’ve been with this particular company, kW property management, who took over my business, which was self run, I was running it out of my house. We merged in about 2011-2012. And 

Akshat  

Moe was a startup guy, huh? 

Moe  

Yeah, we’ve been going strong since and we’ve grown the portfolio. From about, like I said, about 150 doors combined to over 2000, and about 600 clients close to 600 from all over the world. So we got a niche market down there, we have a lot of people that come to us for help, advice, consulting, and you know how to help facilitate transactions for realtors, that may want some assistance for their clients. So we’re a full service shop, we do some leasing agent stuff as well, where some people want to be hands off and want us to manage their properties. I mean, just fill their properties and not manage. So I mean, it’s all over the map, sometimes we’ll get clients, they’ll be living in the basement of a triplex and want us to manage the two upper units and don’t want the tenant to know that they’re the owner. Sometimes I’ll get a call from China, you know, fill my unit and email me the lease, and I’ll deal with a tenant directly and I don’t need management, and they’re halfway across the world different time zones. So it’s all over the map, you’d think the person in China would want the property management, and the guy living in the basement, the triplex would manage on his own. But it’s complete opposite. Sometimes

Erwin  

We’ve seen it all then. 

Moe  

Yeah. And we have a mix of business coming in, you know, we have business going out, obviously, because of the sales market’s been on fire. So people that have been long term clients that are cashing out, but then again, I was telling these guys earlier, people that have bought properties, say back around Christmas, have seen substantial gains in their, you know, investments in are cashing out six, eight weeks later, in some instances. So it is what it is. 

Erwin  

But that’s not the norm. 

Moe  

No, that’s not the norm. That’s not the norm. 

Erwin  

So I’d actually like to ask normal questions. Normal questions. Yeah, that did not come out right. So here’s my question, because the show is called The Truth about real estate investing. And thats the thing I like about when gentlemen, like yourself, you have access to a wide database, essentially, yeah, how many of your clients are full time and you call full time investors? In t percentage. You mentioned earlier, your average client has like three to five properties.

Moe  

I would say 75% of our client base are probably investors and about 25% are working abroad or out of town and are just using our services to keep their unit rent in cash flow, make some money, while they’re, you know, either deciding whether they’re going to come back, or they’re going to sell the property at a later date. So I mean, some don’t want to be landlords there is it’s just something that has been thrust upon them because of job change or something like that. But yeah, it’s it’s kind of all over the map. And as I was saying, I do the client intake and half f it is, you know, talking to new investors, first time buyers, and half the business these days seems to be people that have went and did it on their own DIY landlords, got themselves into trouble have delinquent tenants, you know, it’s all over the map.

Erwin  

This sounds like regular people just doesn’t sound like foreign buyers, or, mega multinationals.

Erwin  

So foreign buyers isn’t really…

Moe  

Like, there isn’t like massive foreign buyers showing up, they are there. But I would say the majority of our portfolio are Canadian citizens, even if they’re living abroad. So they’ve bought these properties when they were here and moved abroad. I mean, I do have the, you know, calls once a while from the Middle East, Latin America, Europe, California, China, or like, you know, wherever, in Asia, where they want to invest here and Vancouver and Toronto had arranged now and so they’ve, you know, set their sights on, you know, kWC or other parts of southern Ontario. So, yeah, I mean, if we can, you know, get them to buy obviously, it’s business for us, and, you know, whoever our Realtors are, that were, you know, dealing with at the time. And, you know, they’re looking at all sorts of places in southern Ontario, so they’re looking at London. We really don’t go down there. It’s a little bit far we’ll help a few clients that are good clients. If they really want us to, you know, travel that far. We’ll do it for them. With multiple units 

Moe  

Yeah, foreign buyers, I think, you know, vs. 

Erwin  

I bring it up because they’re now banned. 

Moe  

Yes. Yeah. I mean, they’re, they’re banned. So we’ll see how long this lasts. See if there it makes any difference? I think the government’s gonna find out quickly that there’s just no worries. Yeah, exactly. 

Erwin  

Which is surprising cause it made headlines. Yeah. That’s what you got to talk about in the budget, there’s much more important thing.

Moe  

I think the big thing they’re going to realise, and if they asked anybody that was in real estate, what the real problem is, their policies, obviously, the as far as Ontario government, provincial LTB, guidelines, etc. And a shortfall in new housing. And I just, as I was saying earlier, I just don’t think there’s enough labour to keep up to demand and kids these days aren’t getting into Brick Lane, you know, framing all the things that are needed, because they’re, they’re getting into, you know, computer sciences, etc, to the comforts of Yeah, of not their parents. Exactly. And they’re not prone to physical labour. And I think there’s gonna be shortfall there. And I know, the government has said they want to build I believe 400,000 new units in the next few few years to you know, I just don’t think it’ll be enough. And I just don’t think they’ll reach that number.

Erwin  

Okay. So all right. Well, no, and I want to talk about other things, but I need I need to get one of these bad realtor stories. Oh, yeah. So can you tell me about the bus tour outside of Google.

Moe  

Yeah, I was telling Erwin earlier that. Yeah. So I mean, I think I’ve been dealing with lately is lately. Forever. That’s for the last few years. We’re noticing because of the Toronto prices, invest your money, like you know, especially investors that are reifying to take that money and put it to work in Toronto would just won’t work. And so they come down the highway to Guelph, Guelph is getting out of control. So they’ll come down to Cambridge Kitchener Waterloo, and they’ll think, you know, I was our area experts now. Yeah, we’re getting realtors that Yeah. Think they know the area. Meanwhile, they’ve probably been here once just go through town.

Erwin  

They know Toronto very well. Now they know Guelph really well. Now they know Cambridge really well got it

Moe  

Yeah, exactly. Exactly. And some of these realtors are over promising and under delivering. So they’re no, yes, yes, it believe it or not. And they’re bringing their clients down. And they’re telling them, you know, pie in the sky stories of outrageous rents at low prices as far as like, you know, units, they’re acquiring. And when by the time they get to me, I have to, you know, temper their expectations, so to speak. And we, you know, this is a common thread, I’m seeing a lot of realtors come down here. And they know that at the end of the day, once they get the sale, they can move on. And if they find a property manager, like me or somebody else, then you know, the issue is then foist upon myself or the other property manager to deal with. And like I said, there’s sky high expectations coming from these landlords. I was telling Erwin, a story of some Asian investors coming down with clipboards on a tour bus, like the same that would go to casino ramaa, etc. And instead of a gambling, yeah, different type of gambling and even argue it’s better. They were coming down to look at condo projects, downtown Kitchener. And one Saturday morning, I believe the realtor sold about 20 of them to these investors and then passed my number on. And when I finally spoke to some of these investors, they were under the illusion that, you know, the prices didn’t align with what I was telling them the rents would actually be because this isn’t downtown Toronto is not the street. You know, you don’t have guys from the stock exchange renting these places with six figure salaries. 

Erwin  

Yes, that’s not the financial capital of Canada. 

Moe  

Exactly.

Erwin  

Cambridge is not the financial capital of Canada. 

Moe  

Exactly. We haven’t we have to hold on, which has, you know, you know, which manufactures Lexus. So, I mean, there’s some high paying jobs there. There’s Google, but there’s only a few 100 people working at Google, and the majority of those people probably own their own unit. So these six figure salaries, they just don’t exist.

Erwin  

These these landlords aren’t gonna attract that tenant profile. 

Moe  

No, and it’s a blue collar area, even though Waterloo has the universities, the majority of single family, you know, tenants aren’t the same profile. So they’re not white collar. They’re mostly not educated. And the average wage even in the manual, even if you count some of the manufacturing outside of Toyota is still under $20 an hour. So once you’ve figured out the cost of living, there’s not much left especially if…

Erwin  

Wiat these are landlords who put up their money they must have done due diligence and knew this already.

Moe  

No, the realtor does the due diligence is the problem, right?

Erwin  

I’m sure he did a really good job to take care of this client. 

Moe  

Well, we do the clients that do come on, and I can convinced that, you know, you may be underwater, but you’ll make money with mortgage pay down and appreciation. You know, they’re the ones that, you know, after a while they gain our trust. And they understand that, you know, we weren’t the ones to put them in this predicament, but we’re here to help them out.

Erwin  

What was the rent delta between what the what they were sold, and what was reality.

Moe  

Anywhere between 500 to $1,000. So massive discrepancies. And, you know, the numbers just aren’t working anymore, unless you’re getting into bigger multi unit projects, where, you know, the cap rates may be above 4%. But just the prices have skyrocketed

Erwin  

And you can’t do 20 of those in the bus tour.

Moe  

Yeah. And the the lending rules have tightened. And, you know, we’re seeing even banks asking for asking us for like letters of opinion, you know, and sometimes we can’t lie, obviously, I don’t want to get involved in mortgage fraud. So we have to be honest of what we can get in rent. And then you know, you have realtors or mortgage brokers coming back and yelling, oh, you should have put 2500 down for that place. I’m like, you can Yeah, I was like, Yeah, you put up your licence, I said, you know, in reality only fetches 1800 dice. And even if the underwriter does due diligence, they’ll figure out that my number is closer to what he’s gonna find. And I said, it’s gonna be that dumb. They run comps. Yeah, exactly, exactly. And, but I mean, you know, at the end of the day, this is a commission based industry. Everybody’s chasing a quick buck, and they’ll move on to the next deal. And, you know, especially with mortgage brokers and realtors, once their deal is done, they’ve been paid, they wash their hands and let a guy like me deal with the fallout.

Erwin  

And that’s why I love the opinions of property managers. commission based, yes, right.

Moe  

Exactly. We have some commission based, like structure, but I mean, the day to day residual payments we receive, you know, the headaches from that don’t correlate actually, with what, you know, somebody on the other side is being paid as far as their, you know, outrageous commissions. And, I mean, I have nothing against realtors, you know, some, some realtors are my best buddies, but, I mean, their commissions have stayed the same ever since I’ve gotten real estate, which is, you know, half of 5% for one end. And, you know, house prices have, you know, in some instances gone up, like, you know, 500 to 1,000%. But the salaries from, say, 30 years ago, haven’t gone up commensurately. So, you know, these things don’t align. And, you know, but realtors, just because they’re making a lot of money, and the the biggest players in our town in our area, are doctors, lawyers, engineers, they’re not the you know, university educated. They’re actually realtors, some with high school education. And they’re good marketers, good salesmen. And they’re making outrageous sums of money. 

Erwin  

And that’s one of the problems of Canada. 

Erwin  

It is what it is, right? 

Erwin  

And this is part of the bigger problem, because as long as all thhose who are making money in real estate, that doesn’t really help the future of Canada. Which is why I’m guessing we have these young gentlemen here, who are gonna save us all. Yeah, so pay for the bill that we’ve kind of racked up.

Moe  

Exactly. Generation is social media generation, right. And, I mean, I like Gary Vee as much as the next guy. But I mean, the way he promotes things, sometimes it’s like he, you know, he’ll say, you know, everybody can just triple down on what they’re good at, and go make a tonne of money and not have any education, etc. Right. Not that I have an education myself. But I think, you know, there’s a, you know, we need people in STEM, like those areas and subjects and homeowners forward. Yeah, exactly. And yeah, if you can make, you know, or sell something online and use tick tock to, to sell it and promote it, and you know, have a business create good for you. But the majority of people are going to fail. And so I mean, that’s basically. 

Erwin  

All right. Well, I think we’ve qualified you as an expert on real estate. So hopefully, you’ve vetted these guys. 

Moe  

Yes, I’ll let them talk now

Erwin  

Akshat, Rishard. What are we talking about today?

Akshat  

I mean, you know, Moe covered his side of the story. You know, we met more through a social media group, you know, got connected and now we’re looking at the other side. You know, I always look at the older folks the experience folk, as not understanding technology or and

Erwin  

Now we’ve ruined everything for you people. Yes. Young people.

Akshat  

Yeah. But Moe was one of those few people that we really like, you know, we think he’s a great consultant to the team because he brings the experience and he understands technology is something that will move us forward. And hence, that’s why we’re here, myself and Rishard both co founders we met in Waterloo. He’s doing his PhD from University of Waterloo. I finished my degree? BBA at Laurier. This is our second startup. Just a quick background about ourselves. You know, I was running my first startup in 2016. I started, it was in the rideshare space. So basically how helping, you know, the younger generation, let’s say the college students carpool from point A to point B, because Uber is pretty expensive go buses, you know, you have to take multiple buses, whether you’re travelling downtown from Waterloo or Waterloo to say East End to see your parents. So when you start a carpooling platform, you know, using technology where we connected drivers with student riders, and you know, they just have to pay $10 $15 per seat, so the cheaper way for them to travel. 

Erwin  

Okay, okay. Did you make money on this?

Akshat  

So just a little story on that, in 2019, we pitched on Dragon’s Den and that was our, you know, our first go to pitch that came out on TV. And we launched it in 2019, as well, we had around 25,000 users in that year, myself, Rashard, and our third co founder, we sold it to a company down in Toronto. So we got acquired in 2020, just before COVID. And then we worked with that company for I would say, 12 to 14 months, and you know, myself Rishard and a couple of other people. He said, You know, we like the startup space. Let’s do it again. And that’s where we are here. Right. That’s where we started RealMe. I think before we get into the solution, I think the biggest thing, you know, I wanted to talk about is the problem we wanted to solve. People, you know, that are fresh grads, starting their families off, you know, they have, you know, not too much knowledge about real estate, as again, Moe was talking about how there’s, you know, real estate agents, I’m not generalising. But there’s real estate agents that are good salespeople, but they don’t know about the market, they don’t know about the area that someone wants to buy in, you have a lot of lawyers, but again, they’re not very well educated, you know, how to cater to the younger generation. And if you’re looking at from, you know, someone who’s 2627, talking to an agent, or a broker, they don’t even get taken seriously. Because people think, you know, us as a younger generation, we don’t have enough money, we’re just kicking tires, you know, looking for houses. And that’s where we wanted to come in, because we see the younger generation, you know, the 10 20k, they have saved up. So in some cases 50 60k, when they’re starting up their families, they’re investing, they’re investing in stocks, they’re investing in crypto, because it’s very simple. You open up our app, you put in your KYC know your customer details, and you can invest. We got thinking

Erwin  

Gradebook everywhere. Exactly. But then Dogecoin

Akshat  

Yeah, exactly right. Dogecoin, Elon does a tweet, it goes from a less than a cent to 40 cents in a day, right. And the younger generation is acustomed to that kind of technology. They like everything on their phone, everything done quickly, convenient, hassle free. And that was the biggest problem we wanted to, you know, address is younger generation want to invest in real estate, it’s a high switching costs, you got to put in a down payment of let’s say, 90 200k, get a mortgage, go through all the different aspects that the younger generation doesn’t like, and maybe don’t have the money to do so right now because of the house prices going up. And that was the biggest problem. Right? So one of the biggest things we do even before putting up a solution is talk to people in our target market. A lot of people you know, we spoke to they want to invest in real estate, but they don’t know how to, you know, we asked a lot of people, you know, why don’t you invest in REITs 75% of the people we spoke to they don’t even know what a REIT is. And there’s a huge major gap in terms of the you know, the education point.

Erwin  

You went to business school, I went to business school pay ever mentioned a REIT to us? Sadly, no, no. I think you’re on a lunch and learn they mentioned real estate to us. Brokers, brokers came in. Yeah, but there’s no nothing.

Moe  

Nothing on personal finance. I heard in Florida, they’re gonna be doing that.

Erwin  

I still don’t trust them. Like that’s funny, those Florida, I wonder if I’ll mention Bitcoin

Akshat  

We will get to the crypto very soon. I’ll kind of have Rishard kind of handle a solution piece. But I think, you know, that’s the biggest piece, right? Like, I think in the news, I saw, they’re trying to put in personal finance in the grade nine math education. But that hasn’t passed yet. I saw this news two years ago, I know me and Rishard, were talking about it. We’re excited. We’re like, you know, we learned how to do taxes, because, you know, we had our family members, you know, CPAs you know, we we know how to manage money because of that. It wasn’t because of the school education. And you know, that we got excited because we saw the government, you know, posting something like this. But soon we understood as we are growing up and getting more experience in the field, as you know, government will put up a lot of policies, but barely anything happens. And that’s why we wanted to be on the field and try to make a small change for our niche market so that at least people within that age group within that market can see a small, you know, customer gain for the solution that we’re offering. So, you know, I’ll have Rishard kind of handle our solution piece.

Rishard  

Oh, thanks, actually, then more manageable. Again. If you think about the entire In the market, right, the stock market, the crypto market, it has evolved so rapidly. And that’s why you have so many people adopting and coming into the market. For example, with the pandemic, in the last two years, we’ve seen so many people actually coming into the stock market and the crypto market than it has ever been before. But if you look at the real estate market, and if you ask the same target group, they haven’t really been been exposed to the real estate market, just because of the friction associated sure there has been a uptick in the number of people that are coming into real estate. But these are the same people that were already in real estate, not the newer generation, not the younger generation, like myself. And actually, we still have that entry to barrier becoming higher and higher, because with time, only the downpayment that you need to put in has gone up the mortgage, that the amount of income you need to qualify has gone up. So it has become harder and harder for people to like myself and actually to be a part of real estate. So we wanted to create a system that is accessible to anyone and everyone, because right now it’s not. And it is a problem for us, because as much as we love putting our money on stocks and crypto, like you said, it’s diversified, it’s not diversified. And then also, it’s dependent still, it’s in early stages, especially crypto whatnot, it’s it can be manipulated easily, like you, you try putting your money into some kind that was launched couple of days ago, hoping you make 100x 1,000x Like the people might be crazy. And if you really ask that when we did have a customer discovery, we talked to a lot of people we went to miles, we basically gave away Christmas gifts, talking to people understanding their pain points, we went to skating rinks giving away free hot chocolates trying to understand their pain point to a different audience, right, especially the younger generation, no one knew about REITs, everyone has forgotten about owning a house, most of the people at least for the next 1015 years, because they can get into it. But they still know the gains associated with real estate. They’re like, hey, my parents owned a house, they’re looking for another house, whatnot. So they know the importance of getting into real estate at a young age. And they also understand there may be there’s one friend out of their entire friend, group friend circle, someone who got into real estate now has done fairly well compared to the rest of the group.

Rishard  

In case it’s positive can you hand over Moes cell phone number? So they can call? Make a friend? 

Rishard  

For sure. So what we did was, again, for myself, and actually, it just looked at took a step back looked at all the research we’ve done. How much do these people have as disposable income, right? Most of the people don’t have that much as disposable income. When you’re young, you have bills to pay, you have debt to pay, you have student loans to pay. And if you look at the disposable income, it’s always in the range of let’s say, anywhere from even $50 Up until $50,000. Sure there are some people who are outside of those lines. But most of these people fall into this category. With this category you can the current real estate market doesn’t really address anyone within that range. You can buy a house for 50,000, at least internal nowadays, people in other age don’t think like, oh, we have to move to Calgary to buy a house. We still want to live here because this is where our families this is where our work is. This is where we have our friend circle is.

Erwin  

I know it’s cold here, but it’s called. 

Akshat  

Just to add on to Rishards point. I was reading an article average gift sites from parents to their kids, but it’s 130k for a downpayment.

Erwin  

That’s across Canada. What is it for Vancouver, Toronto? 

Akshat  

It’s probably doubled that right.

Erwin  

I think it’s close to 200 or Yeah, exactly. That’s, that’s what the reporting

Moe  

If it’s longer than 90 days in your bank, then it’s just yours not not a gift.

Erwin  

Yeah, so much is missed in the data that’s available. 

Rishard  

Yeah, there’s so much that’s missed. And also, we look at the ones who are not privileged enough to be a part of the real estate game. And thanks to our parents, but now we are privileged enough in a way to be a part of real estate in the real estate game. But use a research show, just talking to people showed us how many these younger people are actually underprivileged and cannot be a part of the real estate game for the next 1015 years. And this was a problem for us. And as being the younger generation we wanted to solve it.

Erwin  

You actually think they’ll be able to get in 10-15 years from now? I don’t know

Rishard  

I’ll let Moe handle that question.

Erwin  

How can you save fast enough to keep up with the market?

Akshat  

I think it’s not saving, it’s investing.

Erwin  

Okay, okay. So if you do the right things… oh my!

Akshat  

because it’s honestly about financial literacy right. From day one. Like imagine being a teen. You know, my dad is a CPA. He’s like, Akshat, let’s get a credit card. Let’s build your credit history. I had no clue what a credit history meant. Oh, because how School doesn’t teach me that. Right and having the privilege as Rashard said, right. Our families were privileged enough, right? These guys are CPAs these guys are business people. They know steps, right? They have RRSP fund for us, everything was set up, but around us and being in the target market where a lot of people weren’t, we could see the problem, we could feel the problem, even as buying, you know, the story us buying the first house was a huge issue, because we were on our own. Yeah, we got the help from our family. But it was a difficult, you know, process because we had no clue how to buy a house. You know, we’re second time tech startup founders, you know, we have a lot of we like, Yeah, this is easy. But as soon as you get in the real estate market, it’s difficult because it’s your major purchase that you’re doing in a tech stock, you’re investing maybe five grand 10 grand in real estate, you’re investing 100 grand.

Erwin  

And if you have known your title mortgage, exactly, right. It’s really it’s a big commitment.

Rishard  

Yep. Yeah. So that, like I should say it again, those were we ended up being we had a roadblock, okay, there’s no solution. It’s just like, Okay, you, you basically put your money in a random coin and hope it goes up by 10, next 100x, in the next 10 years, and maybe, maybe still, I’ll have a chance that real estate, right.

Moe  

I mean, as far as like financial literacy, like a lot of our clients are white collar, very educated, but some of them come in with no concept of how to invest or anything. And, you know, they were these tenants know, landlords, I mean, like, like, you know, some of our clients are doctors, lawyers, engineers, smart, smart people. But I mean, you know, the basic concepts of landlording elude them. And, you know, sometimes it’s like, we deal with people all the time. And sometimes it’s the ones that, you know, that are the smartest that out with themselves. Right? And, you know, I think you’re You told me your dad’s a doctor, too, right? Hey, yeah. So I mean, I don’t know, if you got him.

Erwin  

Yes, he understands a lot more of the poems and why, why we need to invest. 

Moe  

Yeah, so. And as I mean, you’re a father, you got a couple of kids, but I mean, make sure that you know, this is going to take priority, and your kids are going to know this stuff growing up.

Erwin  

We’ve already had discussions with our kids. So first off, my kids are eight and six. We already have discussions with them about what money is, wow. And what fiat currency is.

Akshat  

Because I remember when I was a I know, from mine, and Rashard, that we were outside just playing with our neighbours, that was our only.

Erwin  

Can’t see other people

Moe  

So, his children, it will be the rare circumstance where they’ll either, you know, figure out a way to buy their first property or investment property have their property, you know, I didn’t want to say that he’s probably already got them set up.

Rishard  

I was talking to someone else yesterday. And then he’s into real estate investment as well. And he said, Oh, I’ve already gotten the properties for my kids, but they won’t know until they get married. They will, I will surprise them with the gift, because I know for a fact they won’t be able to afford the house when they get married. Yeah, I’m like, wow, say it’s a you have to plan now, if you are privileged enough so that you can help your kids maybe in 20 years.

Moe  

Yeah, I mean, they’re already SOL, the majority of them coming out of school, you know, married in debt and nobody to guide them. Right. So this is going to be a common theme going forward.

Erwin  

we can blame whoever we want. But from my experience, second generation investors are much better than first generation investors. So who we assign the praise for that. Right there. Parents. All right. Wish, like more were you’ve seen this. You’ve seen second generation investors and how much better off they are? Yeah. Second generation anything second generation cop, Doctor? Teacher? Anything? Yeah. All right. You’re better at you’re probably better than your parents were when they started. Yes, no. So we can blame everyone. 

Moe  

Yeah. I mean, there’s lots of blame to go around. 

Erwin  

But we know that we know the path of success, though. 

Moe  

Yeah, yeah. 

Rishard  

So even so going back to where I left off, even with, let’s say, in our case, we had money saved up and had some help from parents and family too and still then you look at all the debt to income ratio, all of us, like, you know, we have all stepped up and we have a car that’s leased out and you add all that up, you still can’t get into real estate market, even if you have the downpayment, even if you’re making good money as we are both in the IT field too. 

Erwin  

I have both those things, and I had girlfriend, alright, continue that last one that you guys do, so please continue.

Rishard  

Well, so it’s hard. Even if you have the money, you still don’t have an entry point, especially in the in the generation that we are targeting. That’s when we decided together to come build a solution that can cater to the entire younger audience. And it doesn’t it doesn’t start from the younger generation it can It caters to the entire population, like you said more. There’s a lot of these folks who are really smart, who are who are doctors, engineers, who still don’t have that literacy enough to make that right choice. And people want an easier and easiest solution. Because with, with the day and time today, people are used to more of Tap, Tap, Tap Done. It’s even the checkout process, everything is becoming so much simpler, that you take away so much friction. But real estate is one of the biggest sectors in the world, but has remained the same ever since you’ve gotten to the point sure the prices are increasing, but the technology associated with it has stayed the same. That’s pretty bad, pretty bad. And it was outrageous. That’s when we decided to build the system where you can buy fractions of a house, we looked at Bitcoin, we looked at stocks, we look at what Wealthsimple is doing now, you can buy a fraction of a stock, you can buy a fraction of a Bitcoin, you can buy fractions of crypto, but can you buy fractionsof houses? No.

Erwin  

Shipment needs to happen.

Rishard  

That’s when we saw an opportunity. And the need was confirmed by other it’s by talking to people, we need to build this from ground up. We basically said hey, we buy a house, we divided into $50 units, you can now invest anywhere from 50 to 50,000, whatever the number that person wants to now you’re a part of the real estate.

Erwin  

Wait So are you guys capping it?

Akshat  

There’s a cap just to make sure I mean, Rashard, we’ll go into more governance pieces 

Erwin  

Well not for me, right. Yeah, so I’m not Catholic, right. All right. All right. 

Rishard  

Anyone who’s anyone who’s who’s already in the real estate market? I’m sure you are most likely that not an accredited investor.

Akshat  

Yeah, cuz I mean, you have probably two properties is worth more than 3 million.

Rishard  

The record is there, then you’re good. There’s no limit when it comes to that if you’re an accredited, but then sure, we still do have to play by the book, we need to ensure that we are looking at your risk to your risk ratio. And we are giving them advice through our partners. To tell them this is how much you can invest safely in this so that they’re not just taking a random bet on the real estate market. We are also still mitigating the risks through all these other partners that we’ve made. We’ve, for example, like more, comes with so much experience, we want him to advice we want him to tell us if we want him to tell me how much should I invest in this, this particular property, I want to diversify my portfolio as well. For example, we looked at REITs, right? When you when it comes to REITs you’re putting the money on the entire portfolio that they have. But I personally prefer putting my money in each house.

Akshat  

Because you look at commercial REITs right now, last five years, most of them are actually losing 8% Over the last five years, which is a crazy stat. I know COVID is a anomaly where you know, REITs are commercial rates went down because there’s pressure off of space. But you know, the as Rishard talked about, a lot of people obviously first don’t even know about REITs. But when they look at the returns, the younger generations, you know, used to 40 50% return in crypto, imagine showing them REITs they’re like, no What the hell, right. And that’s why using individual real estate, and you know, providing them an actual house $1,000 into this, and you know, we’re gonna maybe finance maybe cash, whatever that is, you’re leveraging your debt as well. If the market goes up by 10%, you’re probably making 20-22 back, depending on how you’re leveraging your debt. And that was the case, right? A lot of folks within the target market wanted to be part of individual fractional ownership, right.

Erwin  

As you just mentioned, something just run a clip, I just want to highlight it, a lot of people don’t understand our returns are so high, because we’re so leveraged   Exactly, exactly, you put on like put down 20% For example, then the returns are basically if property goes up 3%.

Akshat  

Yet, your cash and cash is great, even if the market is going up. 10 15%.

Rishard  

then the point being is that a lot of younger generation, they look at this news, write all that and then they’re like, Okay, it’s 23% 23% doesn’t really mean much to me when I’m making maybe 20% over four months, but they don’t see the leverage piece because you’re putting 10% down, let’s say you put 10% down 90% leverage and then you’re nine times whatever the profit that you’re making, so if it is 10% You’re making 90% on your downtime.

Erwin  

And that is just an example we don’t worry. Yeah. Are you guys actually finding landing for this 90% value?

Moe  

People yeah, like I mean, you know, I get younger generation though, you know, talk about crypto and stocks and you can get a mortgage for that stuff. You know, you can get a line of credit for whatever you want to do. But for you know, mortgages you know, it’s you know, you can’t beat it at night you know, and explain to people bad debt, good debt, etc. Right. And okay, You know, what are you going to do in 10 years? You’re gonna catch it, everything’s there, no, oh, well just stay in debt. The more the more debt you have, the more you make, right? And they don’t seem to get that right and explain to people that, you know, how does this person buy 30 properties while I go, they go further into debt, I said, you know, I tell them, you know, the, these properties, they appreciate the mortgage gets paid down, and you know, their equity increases, they’ll go back to the bank and borrow even more money. And I said, go buy it, and then, you know, rinse and repeat. It’s a common, you know, formula. And that’s just how it works. And, you know, the people that to realise that leverages everything, and this game, they’ll, you know, do better than the person that doesn’t, 

Erwin  

And this isn’t financial advice.

Akshat  

You know, example, like, I know, so many of my friends, they’re like, 2625, two years after university, they have money sitting in their savings account, a 30 40k. Because they’re working jobs, they say they’re making 80 90k in Toronto, they have money saved up, but they’re putting it just in their savings. They’re maybe putting some in stock, some in crypto, but most of their holding isn’t savings. Because they they think saving the money. They don’t think what inflation means, right? Last year’s inflation was what, eight 9% or something, something crazy. And for them another example right for them. There is this year OSAP Bill 30k, I can tell you, like 80% of my graduating class would pay that 30k Right away, if they have money sitting because like, then I’d wait there as long as like, when you look at the interest rate right now. 24, the government’s doing on OSAP it’s close to 1% you’re paying what let them borrow 1% pieces off, like, you know, understanding like from financially.

Erwin  

Like God, I go London. Give me 5%

Moe  

Or 14 for somebody else.

Erwin  

This is not this terrible for the gentleman, please. Let’s go back to the investment though. What is the investment? What is the underlying? Because that yeah, if the underlying is good, that protects the investment, right? Because we’ve seen Epic Fails of not very good investments. So please, what is the investment? So Metaverse is it plays in universe, 

Moe  

It’ll be actual real estate like brick and mortar, right? You know, where someone’s not going to wake up and decide to sell it right away. Right? So, you know, we’re going to do a mix of different things, see what works. You know, right now, it’s, even though myself we’re in kW car companies in kW, see, I would prefer if we bought these properties that we’re going to be getting funding for down our way. But the numbers just unfortunately, don’t work with how prices have skyrocketed. So our first couple of investments have been out of town, and ones in Kirkland lake, the home of Alan Thicke and found a property. And Elizabeth Kelly, I think, you know, her, she or her husband runs a property management company up there. So they’re helping us, we got a great deal. It’s a lower end unit. But I mean, the numbers are terrific for what we’re trying to do. And you know, what would be a down payment here, you can buy the whole unit up there. And then we picked up a duplex in that that one, Kirkland Lake is a four Plex, the duplex that we got off market is in Peterborough. And we’re looking to eventually move the current tenants out after their school term and raise Yes, students and raise the rent, I forget, I think you want us to Stanford for school, and the other unit is vacant, we’re going to be doing some work on that one and try to get top dollar for both units come trespass. Because that’s when that term ends, and you know, have a nice cash flowing property that we can either flip for, you know, a profit or cash flow and hold long term and see what the appreciation is like between two and five years. So, you know, depending on the situation, it’s gonna determine what we do with these properties, right, you know, might be buying hold, it will be the, you know, the majority of what we do, but I mean, you know, if the market dictates a flip scenario, and the money’s there to be made, you know, that’s how we’ll go about it. Right. And hopefully, these smaller investors can enjoy these types of returns, and it’ll be a little while, it’ll be a lot safer than crypto safer than, you know, the stock market. 

Erwin  

Real underlying. Yeah, that’s a real physical asset. 

Moe  

Yeah, exactly. The underlying asset is stable, and you can’t get a better market than Southern Ontario. And as I was alluding to earlier, yeah, Vancouver and Toronto are basically, you know, out of most people’s range, and, you know, so they’re looking at other parts of southern Ontario and we’re right in that area. And I think there’s lots of rumour run. So I think the next five years is when you’ll see another big leg up massive gains. And I think people will look back on this time, like, slightly post COVID, if you can call it that, where they’ll say, You know what the war is going on rate hikes are coming, this is actually a good chance to buy, because these are temporary, yeah, this is just going to be before the next run up. And, you know, even in the last six to eight weeks, because we’re talking in early April of 22, or now, with the difference between end of January, early February to now we haven’t seen the amount of bidding wars that were going on, you know, slowly, you know, conditions and inspections have come back on some properties, especially where we are that we’re doing the same thing. And, but I mean, I think this would be short lived, I don’t think a home inspector should get too cosy, because it’ll go back to the craziest soon enough. That’s basically what we’re doing. And that’s where I’m trying to help these guys. And they’re obviously taking care of the tech portion and the platform, and they have some great developers, and NF T’s will also be a part of it. I have no idea how they really work. So I just keep hearing it, and I’m trying to figure it out. But it’s one of those things that like crypto, I still, you know, understand the basic concept, but it’s hard to wrap your head around.

Erwin  

All security. Yeah. That’s Internet security.

Moe  

Yeah. Blockchain. I mean, you know, I don’t know what these guys have planned as far as the technical aspect. But they’re bright guys. And I believe they’ll have a solution that works. And it’ll be different than someone like Addy, where, you know, they’re looking for I believe, minimum $2,500.

Akshat  

Maximum is $1500. Okay. The holding period, I think, four or five years, okay, you have to hold on.

Erwin  

Folks, we love it, we’re, for sure. Feel free to like, I’m not positive as I don’t know, for sure what the cap is %1500,

Moe  

I thought was 2500. That’s where I got the number of I thought it was credit investment. I know, there’s another platform out there. They’re coming out with Willow, and they have a little bit of a different structure. But this one should be a lot easier for junior investors to migrate. And it will be more along the lines of something like Wealthsimple.

Erwin  

And then so can you describe the investment is a DOW, is it or is this blockchain based?

Akshat  

It will be tokenized, essentially. So you know, just to kind of go into a background about NFT’s right? The last couple of years because of COVID. Everyone’s you know, on their computers and Facebook changing their name to meta Metaverse, and everyone going into buying, you know, land on a server. Right? All the influencers are putting their own tokens out, right, you you look at the note, boys, right? They had a huge token offering for a lot of their followers, they raised $4 million. And the tokens are nothing tokens just provide, hey, the boys minted our token on a on a network and giving it to let’s say, Rishard and me, what this token holds is, let’s say you and they get some free merch, you know, maybe they get like, say meetups, exclusive meetups in Toronto exclusive meetups everywhere. That’s what the token meant, okay means for the influential membership card. Exactly. From a from a digital standpoint, well, how we are looking to use NFTs, and combining it with real real estate is when we buy real estate, we put it under a smart contract. So when we meant tokens, let’s say we’re using Etherium blockchain to make a smart art, get a smart contract together. And mentor token through that, what we’re doing is we’re making a set amount of tokens that are worth set amount of value for the real estate that we have on our platform. So now we are basically using digital contracts in order to give you a token, give Rishard token, you have more token, give myself a token. And when you hold this token, you will get obviously rental income. And when you want to trade it in, you know, we look at appreciation even before the house is sold to give you the appreciated value for token how real estate right now it’s done is I buy a house, I get investors, I sell the house, I give you the profits. But why can we change it how stocks are? Right real estate always is appreciating? Right? 

Erwin  

Not always, depends on where.

Akshat  

long term. You’re looking at, let’s say from 2000 to 2019. It’s in Ontario, it’s gone up eight to 10%. Every year has been a gift. Yeah, no bad performance. But sorry, Alberta. Yeah, you look at you look at from a being a safer investment and a long term outlook. But if you have tokenization and give tokens to let’s say, 100 people, and you provide them a appreciation if they want us trade it in when they need the money, it’s a better angle for them to get into real estate on day one, and try it out for themselves. Right and by providing them tokenization you can also provide governance as you talked about Dow we’re not there yet. But what we’re doing is providing individual decision making, let’s say we have a house in Kirkland Lake four Plex, you know, we want to sell it, we can, you know, send out a quick update on our application. Hey, what do you want to do. So once we have a majority vote, we can sell it. So we’re providing a vehicle, right, as a technology platform, what we want to get into the future is homeowners can list their homes, we’re not going to charge them 5% of the home value. So there’s a huge positive advantage for them. On the flip side, you have fractional investors, people that want to buy this token, this NFT. But now this NFT is backed by an actual physical assets that you can touch. So it provides you the best of the technology world, but also it has good hedges you against, you know, a scam, like how a lot of NFT projects have been. But the technology itself just tied to something in cyberspace. Exactly. But yeah, if the network shuts down, yes, there’s that but then you can back it up. And you can have those things in place as well. 

Erwin  

No, my point is more like a like digital art, like, for sure. Yeah. What is it? Like? How you have that? Fire? Yeah, across the market for it, you know, versus a house in southern Ontario. And so again, like, there’s a market for it.

Rishard  

There’s definitely a market. And then also, we want to be able to if you’re going after the younger generation, who are into crypto and all these other assets, digital assets, we want to be able to talk the same language that they are able to understand we don’t want to go to them and be like, Hey, this is the mortgage, this is the agreement you assign, this is what you’re getting all that stuff, we can still do it i There’s nothing wrong with it. But we we don’t want to reinvent the wheel, if it is already been invented by a different cryptocurrency the digital asset, we’re just building that together. There’s real estate on this side. There’s digital tokens. On the other hand, we are basically marrying them together. And we are basically telling people, Hey, instead of putting your money on an asset and betting on it, why don’t you do the same thing that you’ll be doing with crypto, but instead of just betting on it, why don’t you take a calculated risk with us, you’d not only take precision, but there’s also rental yield that will be paid out to you on a on a quarterly basis, or whatever that we get to that point. And nowadays, if you look at a lot of these crypto projects that are coming up, even even I saw a project a couple of days ago, where they basically the concept is you initially buy into these currencies, the digital tokens, and they want you to hold because more people hold this, this particular the token, the value gets goes up because of supply and demand. Again, just like how it is with real estate, more people holding and don’t want to sell it sell their assets. So there’s less supply on the market. So there’s the value for each token goes up. But now that has no there’s nothing backing it up. It’s just that me buying a digital token and just keeping it up, just because it’s gonna go up, it’s just manipulation of the market, I’ve, unless there’s a real, real utility to it. With our kids, what we are doing is it’s a house, you’re buying a house, and we are going to keep it without selling it. And so you can so can you if you want to sell this completely fine, but you will be losing out on the entire position that we would be benefiting our when we sell the house, but you will still be able to benefit it partially, there’s nothing like that right now you can’t benefit partially out of a position, either you by yourself, right? What we are creating is that platform where you can buy into whenever you want, you can sell whenever you want. And at the same time, if you hold it for a longer period of time, you’re gonna get more appreciation, and also you’re gonna get it rental yield, that’s going to be paid out to you. So it’s a simple system that the younger generations are aware of, and the real estate market not so much, but bringing two together so that now you can invest in real estate without actually having to gain more knowledge. But this will make them research into more into real estate. 

Akshat  

Exactly, exactly.

Erwin  

Something so at least we need the easier starting point than buying a million dollar house. I’m in this business. So I understand how hard it is to get someone off a zero to from zero to a million dollar investment property. Exactly. So you mentioned yield paid for people who are holding tokens is that paid in cash is that paid more tokens?

Akshat  

So that’s something we’re working on it probably wouldn’t be paid in cryptocurrency we can use stable coins which are basically like let’s say USDT is pegged with the USD dollar. So people get digital currency like that. So let’s flip it to cash if they want. They can flip it anytime or they can.

Erwin  

Okay, we all need cash in our lives. No one’s taken my USDT. When I go buy lunch first mind shawarma.

Rishard  

This little piece about that having USD T or digital tokens that that’s pegged to $1 is now you can Do whatever you want, right? You can buy more unit in the same house and you’ll stake it. Yeah, you there’s so much utility to it.

Erwin  

I think we’re not so there’s gonna be a couple people who think we’re not. And we’re talking to foreign language. So I have a few more questions, follow on questions, how does someone exit their investment. So say I buy, say a pub $1,000 bar to buy tokens, I put 1000 hours of fear to buy tokens, how do I exit?

Akshat  

So currently, we have a one year hold period, just so that we get the demand and supply side, you know, getting to a point where we can do the buy sell for now what we’re doing is, let’s say you hold Rishard holds a token for 12 months, he wants to give it back. He wants to make the appreciation. He just, you know, messages the company, we give him the money or the digital currency with a precision back to his wallet account that’s connected with the real means account. So he gets it back, let’s say in 24 hours.

Erwin  

And those are gonna be a limit on how many people can redeem.

Akshat  

Again, right now we are seeing a one year hold period. And the thing is, you know, we have a we have a limit on how much you can invest. Let’s say you can invest 100k 200k On a rainy day property because then when you look at the governance piece, you hold the most value then right? We want to make it truly decentralised where people actually have the voting power, or they feel empowered, let’s say, you know, our limit is 5k. Again, that’s something we’re deciding on and working on, as we

Erwin  

Addy is 15 to distract Yeah, that’s the math 1500 1500.

Akshat  

Yeah, so I think that’s the piece where we where we say, okay,

Erwin  

Sorry, I said that wrong enough is 1500 Yes, 1500 is the maximum,

Akshat  

let’s say our limit is 5000. So when you invest 5000, and you want that money back, it’s easier for us to you know, go to our wallet or our own fund and just give it back to you. Right, but rather than someone investing 100 grand. But now when you make that system, and you have people buying and selling, we don’t even need to be involved, we truly become a platform, you want to sell your token, someone else can buy it at appreciated price, and they can hold it.

Erwin  

Right. So I unfortunately, it wouldn’t be the most liquid thing and the bid ask and probably be pretty wide on it, like years of market makers for this.

Moe  

No, I mean, like I said, he’s gonna, you know, it’ll take a while to get to that point where it’s actually, you know, tradable you know, on a day to day basis, right. But up until that point where there’s, you know, enough users in the platform, you know, big enough, you know, you’re kind of be stuck in it. But the end, the end goal is to make it like basically, well, simple for real estate.

Erwin  

Any like structured exits, for example, like in five years, so we’re gonna sell it no matter what type of thing or…

Moe  

Nothing, nothing. You know, yeah, we’re

Moe  

gonna refi it? 

Akshat  

That’s all decision of the folks that own the tokens, because we let them decide because it’s, like a Dow, exactly. I mean, that’s where we want to get into right, basically, making everything decentralised. Right,

Rishard  

first couple of property properties, people like most gonna make the decisions. But once we get to that point where we have enough users being able to make that decision with still some expertise from people like Moe, we don’t want them just going crazy. Clicking a button. Yes, yes, yes, let’s sell this property to trigger happy.

Moe  

And, like, I mean, you know, like I said,

Erwin  

this isn’t quick money, you know, we’ve been at understand that this is still I mean.

Moe  

If we, if we have a market run, like we did back in late January, early February, you know, that’s where, you know, it could get exciting and, you know, be everybody can decide, okay, yeah, you know, what, the 51% want to sell? And, you know, the other one wants to hold, right. But me, you know, the 51% that sold would have been right, you know, this time around, right, especially with the you know, incremental dip, right. 

Erwin  

So again, it’s purely need to get off zero. Yeah. And if you can afford to buy your own property, you should probably buy your own property. Yeah. Make your own decisions,

Moe  

You know, likely not going to be the case, right? 

Erwin  

That’s not the target investor for this. I mean, I’ll just give a quick example, I’ve been criticised for not doing our ESPs right, because it’s not too much. It’s I have too much going on my life. I don’t have the time for it. Right. My kids already each own a house. So yeah, they’re doing all right. 

Erwin  

Yeah, makes sense. Yeah. RRSPs are RSPs like, you know, a lot a lot of that stuff is, you know, for the working individual nine to five, it’s set up to vote for them. And

Erwin  

RSP is so much smaller than our RSP it’s so small.

Moe  

At least it’s something you know, better than nothing, right? Yeah. But I mean, if you know what you’re doing, you’re just gonna do other things.

Erwin  

Really cool. And can you share what your criteria is for an investment property?

Moe  

We don’t really have a criteria whatever the deal is solar same as like, you know, your realtor, you know, your Realty, taking investors around and showing them places is always just a matter of what works. Obviously, cash flow and future appreciation come into, you know, they’re probably the top Two things.

Akshat  

Two most pointed right. That’s why we looked at Kirkland Lake and Peterborough, because you’re looking at a cap rate of at least seven to 8%. So now you can give some rental yield back to the folks. Because if you buy something in Toronto, it’s maybe a percent.

Erwin  

Yeah, that’s given my credit card. So you can take money from me each month, you know, yeah, exactly. Gonna make it work. Unless you buy cash. So sorry, are these properties that you mentioned, like computer brunkert, like, there’s mortgages on them?

Akshat  

Right now, we it’s all cash offers, you gotta move,

Erwin  

Because how else you’re gonna get more who’s gonna who’s gonna qualify for the mortgage,

Akshat  

Exactly. You have move the model get into the market, or then you can look into, you know, getting some private folks private funds involved, right? Like there is I know, the the pension plan does a lot of investing in real estate. So getting folks like this behind you, so that they can fund your operations, maybe work with banks on the commercial side, right, where we can get some money that’s asset backed, so we can get to 80% and loan 70% and loan that 30% could be people’s money put in. So appreciation could be leveraged as well, over time.

Erwin  

I mean, the structure and the regulation for this investment, does it fall under Securities Commissions or rallies all cities?

Akshat  

Again, we are looking at an LP structure. But if you look into let’s say, a token versus a security, right, there’s four criterias. So again, you know, we’re working through the legal side, we have some partners, but if we use tokenization, it doesn’t fall under securities for now. Exactly. And you look at some of these companies in the US doing it for I think the last two years and getting over 100k users. And there’s no you know, rules or regulations, because you’re basically getting smaller amount of money, you’re not getting 100k from a non eligible investor, you may be getting 5k from that person. So the limit itself is very small per individual. And if you’re tokenizing it and the transaction that happens is done through digital currency to a token, so your security has to be a cash input. So if you can change that, it currently, as of today, it doesn’t fall under that.

Erwin  

I can imagine how long things will take if the government gets involved with security.

Rishard  

If you really think about it also, like if we are truly a platform, at the end of the day, we are not selling securities, like looking at the concept of it. We right now currently, you see people, four people, five people getting together and buying a house. And they don’t have to go through exempt market dealer or trying to understand if they’re accredited or non accredited. When you’re putting let’s say me, and Moe and Asha, then let’s say four of us decide to buy a house together, put, put, let’s say, out of the 10 of 20%, that we are going to put, let’s say each of us take 5%. And 5% means 50,000, or 100,000, doesn’t really matter. No one’s going to check if you’re an accredited, non accredited whatnot, but you are still able to do it. And it’s completely legal. And what we are trying to do is the same thing we are trying to bring into for people, we’re trying to maybe bring 100 people together per property, we are trying to bring 200 people per property, we are not we are we’re basically bringing them together to buy that entire property. So we are truly becoming a platform, a middleman to actually provide, hey, there are these are some great opportunities for you guys to invest. And if and then on the other hand, we are bringing people, Hey, here’s how you can invest using tokens. And we are bringing two together, and then now it’s a close community for that house. But for let’s say for house that we have in Kirkland Lake, let’s say we get 200 investors through this platform. So it’s 200 people closed in and look with that house. They’re married to the house. Now they make whatever the decisions later on to do whatever they want without so it’s exactly how we would own a house. With four of us. It’s now with 100 people with the medium to do that communication. For first we can make easy decisions, right? Right now, let’s say mom wants to paint the house. We all agree we paint the house. But when it is 100 people, you can’t necessarily do it the old way. To make that decision, you need a structure. That is what we are bringing into our platform as well.

Erwin  

 I look forward to and this all works. Because I might want some early exits on some of my properties while maintaining a lot of ownership.

Moe  

Exactly. And I mean, it would be no different than you know, buying a stock and getting something in the mail, like a proxy vote or whatever. That were, you know, they expect you to chime in and you know, like I mean, it may not matter depending on you know who the major shareholders are. But the term we’ve bandied about is democratisation. So I mean, that that’s how we’re gonna look at it and small investors, they, you know, in that 1000 $2,000 range, there’s no way you can get in the market, there’s nothing you can do. You can’t even pay legal fees with that number, right. So I mean, to get up piece, you know, real estate and, you know, consider yourself a real estate investor. You might be the only way to do it,

Erwin  

Right! Could I ever, ever use like RealMe and offer up 49% of one of my real estate properties?

Akshat  

That’s something we looked at. It’s just is difficult because, you know, you probably have to put in a property in an LLC, like if you’re going in the States, and then using that putting that LLC in a smart contract, so that people can buy it. So it’s hard to do fractional we looked into and maybe in the future, okay, because it, it opens up your, you know, where we’re at, and gives you cash right away.

Rishard  

Exactly. So like I said, we wanted to start from that initiative, because we always believe in technology. And we, again, Moe is a great guy when it comes to real estate making those decision. But at the same time, let’s say for us to scale up, right, like, we can be going around trying to find properties every day, let’s say we grow. We want to get into the place of even for a in our case, example, we got a house and I wanted to see if I can sell a portion of it and liquidate that, but I couldn’t, I had to sell my entire property because that’s the only way to get out of the investment. So we looked at okay for us to become truly a platform. And to be able to scale this up, we need to really become the platform that connects the two sides. Right now we are doing this part right now, buying properties and doing all that. But we want to get to a point, there’s technology, you let’s say you want to put your property down, we do the evaluation using all of our the algorithm that’s involved, we say, Hey, this is the price that we can offer you for this many shares. And of course, mitigating the risk at that point as well. And then getting to that point where you can still own 51% 49% goes in here, they own 49%. And when you get to that point, again, this is very long term. But again, that is that is sort of the direction that we would love to go forward.

Moe  

And I recently picked up a triplex that we were going to throw it on the platform, and I was gonna do exactly what you’re saying is, you know, but I think you know, there’s a huge market out there for that. Because I mean, what you’re suggesting is, you know, what, I can avoid going to the bank and doing a refi. And, you know, giving him you know, all that information, I can just go to this platform, raise the money, you know, have it on there, right? joint venture partner? Yeah, so, exactly. And so I mean, but in that instance, you know, then you would have people that own these properties and decide, okay, something happens in their personal life, they need to sell that property, like, you know, what’s the exit strategy, they’re far more invested is going to take the house out, or you’re going to have to basically make everybody hold that investment. And, you know, plus whatever appreciation they have, and then take the unit back. So it gets a little bit complicated. That’s why we’re just doing it in house for now. And then later, as it grows out, then we can, you know, see what kind of model there is for that.

Akshat  

Because in that model, it’s very hard to leverage that as well. If I’m taking, say, 40%, I’m giving you 40% cash. Now, appreciation, how does that work? Do I get 40% off your returns? Or do I get 40% of just the appreciation, right? It gets tricky. And we actually did a couple of test runs. And I mean, we still made money for some of our family and friends that put in money within our first two three properties that we you know, we didn’t launch, we just did test runs on. It made sense. But it’s just that aspect of real estate has always done well with leverage, right. And in this case, maybe there’s a way we can do both so that homeowners happy because it’s easy for them. And then the fraction investors happy as well. 

Erwin  

So we mentioned stocks and shares a couple times and one of the things that shareholders don’t like is shared dilution. So how do you control how many tokens are issued for?

Akshat  

So each property, we’ll have a finite amount of tokens that are issued on day one, so the tokens can increase or decrease? Because on a smart chain, it’s a contract you’re writing. So once a contract is written, you can change it. So it’s, you know, you can say for if it was just a corporation, we can just issue more shares. But on a actual blockchain, you cannot. So the the people that get the tokens, there’s no more tokens that are made by us. But what we can do is these people can buy and sell within a platform or long term.

Erwin  

But this is the same tokens. These aren’t new tokens.

Rishard  

These are not Yeah, exactly. Imagine now once we get to the point where we have that many users, but finite tokens. Now you have that marketplace to buy and sell whenever you want

Erwin  

Like NF T’s and they’re finite. 

Akshat  

Exactly.

Moe  

Bitcoins finite, right.

Erwin  

Fully becoming finite. Yeah,

Akshat  

there’s about, I think 2 million left somebody’s mind. But then I think this crazy number 3 million has been lost by people.

Erwin  

Yeah, who knows how much was lost? And how many people will refuse to sell it no matter what.

Moe  

I lost some, but 100 bucks worth. I lost the seed phrase.

Erwin  

It’s only it’s worth 100 bucks today.

Moe  

It’s probably no it’s probably worth about 300-400 now, but I mean, I contacted

Erwin  

Coinbase Coinbase stuff

Moe  

You know what? I don’t want it to at least give it to charity. They wouldn’t even do that.

Erwin  

No, they can’t access it. It’s gone. They can access it. Yeah. 

Moe  

So just in the ether just sitting there. I stopped looking at it because you know, as can be 1000 bucks now, right?

Erwin  

Yeah, that’s a weird, crazy thing. Yeah, I had a friend who lost a bunch and went to see a hypnotherapist to see that you’ve figured out his password didn’t work out.

Akshat  

That’s crazy. He went to a therapist?

Erwin  

Hypnotherapist. Oh, there was a guy from my tribe members password.

Moe  

I was reading a story some guy from 2010 2011 in England, he he bought pizza with a bunch and he had a bunch of those. He there’s girlfriend threw away the drive that had the password. And he’s still fighting with city at somewhere in England to dig up the landfill. Half a billion dollars or something crazy and go and touch it.

Erwin  

It’s gone. How you find it too? 

Moe  

Well, he’s got all this stuff figured out. 

Erwin  

Yeah, people that would that would help them find it for a piece. Yeah.

Rishard  

So funny faces. I remember my password. But I did invest. So it was at that point when I was in undergrad doing my undergrad 2000 This was back in 2015 14. I think I wanted to test out so I put I think I put one buck or two bucks. And it’s it’s now I’ve somehow I was able to log in few days ago. It’s one buck two bucks. I think it was close to $20 but not so I’m like, only if I had put baby 100,000 or 10,000 Forget about geez, I actually tried it out but of course didn’t keep track of that, but not.

Erwin  

FascinatFascinating. Gentlemen, this is fascinating stuff. I wish you all the best. How can people follow on your journey?

Akshat  

So we have a landing page on real me property.ca So they can join the waitlist. So for the first 10,000 people, we’re going to be launching our MVP like our minimum viable product platform so that they can you know get into the first two investments. So that should be going live in the next 30 days. But you know, they should be able to sign up on realmeproperty.ca through their email and once our platforms live or at least for MVP use, they’ll be the first ones to use it.

Rishard  

Yeah, then they can also follow us on all social media at TikTok Instagram and Facebook as well. RealMeproperty and RealMe.

Erwin  

What do you guys putting on TikTok.

Akshat  

Right now on TikTok is more the education side, okay, telling people but…

Erwin  

How long are the videos? 

Akshat  

15 seconds. You’re giving them that quick word.

Erwin  

Test Moe, 30 years in 15 seconds and we’re done recording. You’re gonna dance your dance while you’re doing.

Moe  

Ssocial media part is taken by anti thing care of by some social media experts, we’ll call them younger people than I asked. Right? So. And yeah, our company, kW property calm. You know, you can find us if you’re looking for a place to rent or you’re looking for management. We have landlord forums, tenant forums and Instagram, Facebook, tick tock, we have kW property has accounts and you can engage with us there as well. And whatever you need, like I said, 75 to 100 kilometre radius, we can manage your investments. And the one thing that really separates us from everybody else is because of all our foreign clients, we do not touch the money that we don’t touch the clients rent. So majority of property managers take the rent, take your cut, give you the difference. Problem with that is embezzlement, fraud misappropriation of funds. I believe there’s a property manager in Waterloo who stole about half a million bucks being charged right now. So that was in the paper. And we have some clients that will have anywhere between like 2030, up to 120 grand storm. And so that being said, our system is different than everybody else’s. And the rent goes from intense chemicals to the clients account. We bill you separately. You can even pay us by credit card. If you click your mouse, we make it really hands off software focused and we can scale. So if you’re a landlord, and you’re looking for a good property management company, we have to be able to take you on.

Erwin  

And then the real estate market is gonna collapse. 

Moe  

No. I said no, no. I just say you know, I mean, like I said it’s that the sky is always falling right and if you listen to these people, they’ll they’ll tell you right you know, stop watching the news basically turn off Fox turn off CNN and every book. Yeah, exactly. Good book. You wonder how the, you know, you gauge the market or news, look at stocks, see how they do and then you’ll figure out what you know, I mean, I’ve been reading about like food shortages and then you know, there’s gonna be a shortage on fertiliser in Russia, etc. And I always tend to go back to the market. Whew, I look at McDonald’s, I look at Weston’s in those talks just keep climbing. So that tells me that the analysts and people following those things, which are huge institutions, are, you know, worried, then I’m not worried. Right. And those are multibillion dollar corporations and costs are just a new high. Yeah, exactly. So I mean, you know, you follow the big money, and that truly is big money. And, you know, you can base your decisions on that. Right. And so that’s a that’s basically it. So thanks for having us on. Appreciate it.

Erwin  

Thank you, you know, thanks for coming in. This is fascinating stuff. Yes, yes, the bail is one of these problems. Yeah. Any final words? Any final words?

Rishard  

No, I think you can make get in touch with us using our website. And of course, we are always looking for ways to improve test and 100% new people join our team as well as we grow. So get in touch with us. If you want to change the real estate game. Join us today. 

Erwin  

I offered my property 49%. Alright, thank you, gentlemen.

Akshat  

Thank you.

Rishard  

Thank you so much, guys.

Erwin  

Before you go if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already, then sign up for my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s much improved demonstration over the one that I gave to my cousin chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself, I got into real estate for the cash flow. But with the rising costs to operate a rental business, it’s just not the same as it was five to 10 years ago when I started there. Forget the cash flow reduces your risk. The more you have, the more lumps you can absorb. And if you have none, or limited cash flow, you’re going to be paying out your pocket like I did on a recent basement flood that my student rental in St. Catharines. Ontario, if you’re interested in learning more, but it’s true for free for my newsletter at www dot truth about real estate investing.ca. Enter your name and email address on the right side. We’ll include in the newsletter when we announce our next free stock hacker demonstration. Find out for yourself what so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell I love teaching and sharing this stuff.

 

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