** Transcript Auto-Generated**

(00:00) greetings friends welcome to the truth about real estate vesting show I’m your host ER CTO since 2016 I live west of Toronto and I’ve been a landlord since 2005 we have an excellent guest expert with TW who owns 12 apartment buildings uh where each unit each building has about 20 to 30 units and he’s just acquired two sizable properties in Alberta and you want to hear why he’s buying an Alberta and why he’s sold in Ontario and why he plans to be buying in the states within 12 months Mike’s journey of of immigrating to this
(00:33) wonderful country at the age of 10 with his family from Poland and when you hear what inflation was like in Poland when Mike was growing up needless to say it made sense to leave come to a country with much more security and stable currency and economy needless to say Mike beer has done very very well for himself considering where he’s coming from the first not going to lie I quite enjoyed last week uh as the kids were at overnight camp cherry and I were empty nesters the kids were up in Moka uh at a rustic camp where they slept in cabins without
(01:06) air conditioning but they did have a bathroom with plumbing however the campers were responsible for cleaning their own bathrooms no smart devices were allowed so no iPads cell phones let alone laptops just good old fashioned camp activities like arts and crafts canoeing swimming pingpong outdoor ping pong kind of interesting uh they even had motorboats uh at this Camp so my son was able to go kneeboarding and it’s not something something I’ve ever done let alone go to overnight camp and and he loved it so I’m happy to hear that uh
(01:37) this is now the kids fourth year at overnight camp uh We’ve uh it’s always been important for us to for the kids to learn how to rough it a little bit and be independent uh and they’re enjoying it they enjoyed it so much that they’ve asked to go for two weeks next year so two weeks of overnight King uh cherry and I are proud of our kids um of course they complained about the 30 mosquito bites each they got yet they still want to go back and then minor parenting wi my son’s camp counselor said that uh he was the best behaved in their in their
(02:09) uh in their cabin group so again needless to say we’re proud of our kids our investment of our time and effort is paying off no different when you invest time and effort into real estate investing we will continue to invest in our reses uh real estate savings plan I have at least one house uh per kid in the USA with no I have no intention of them living in in them uh I’m these are straight Investments to me if they decide to live in them one day that’d be just an added bonus uh we of course we are looking for
(02:38) something less Hands-On uh the truth about real estate investing is the younger generation is not that interested in being investors in my experience I see it in the adult children of my clients uh less than half of them have any interest of doing what their parents do as active investors in Ontario uh and then just what I’m noticing and I’ve heard it from experts as well especially folks in education uh the younger generation wants more balance they want less stress and um and from real estate investing standpoint who doesn’t want much better
(03:11) numbers and less risk which is why I’m divesting local my local properties and buying American uh so what did cherry and I get up to while the kids were away would you believe I golf more that that week than any other week in the summer add to that on Tuesday I went boating with my entrepreneur organization Mastermind Group which we call Forum everyone had a turn water ski but me I never grew up with a family Cottage like my friends uh never learned nor felt and I do not feel the running desire to be uh draw to get out of the
(03:46) boat a perfectly fine boat get wet uh and also a good friend of mine got hurt recently while water skiing so anyone who knows me knows I’m pretty risk adverse I am somewhat active and athletic but again why would I get into a cold Lake when it’s nice and sunny and warm in the boat yeah booting around Friday Harbor was and conversations with my with my buddies it was plenty stimulating in breaking news uh my friend Musa sent me this article as reported by the Global Mail yet another Real Estate club organizer uh this time
(04:18) Dano St Jean of the right Club re e t club uh an organization co-founded by Daniel along with other influencers that anyone who knows a r Club knows who the other organizers are uh he has received a stop order again I’m quoting the article so this is not liable even though people want to threaten me with things uh again there’s a stop order from the Ontario Securities Commission which is the regulator of investments in Ontario the highest level uh from the article Daniel has raised more than 25 million in promisory notes
(04:54) uh link to the article is in the short notes if you’re if you don’t if you’re techsavvy and you don’t have and you don’t have a Global Mail subscription um I actually have an apple News subscription as well I have both I have apple News subscription and Global Mail so I’m able to access it uh I can’t recommend enough the Apple news app it gives you access to so many news outlets it’s it’s a very good value in my experience and if you don’t you can just Google the article and you’ll likely found the the version without a pay wall
(05:27) anyways uh Kyle Ford who’s a past guest of the show he manages 150 million in private mortgages and he said on the show promissary notes are a bad word at his company friend of the show Ron Butler who’s who has an interesting uh vocabulary he’s extremely use against extremely against the use of promary notes saying they’re worth less than used toilet paper I paraphrase me personally I consider I lean towards more conservative side hence I don’t private lend nor do I borrow private borrow uh again as we’ve trying to bring back the term on this
(06:02) show these used to be called hard money loans before they’re ever called uh private um private money anyways it’s scary time for folks who have primarily lent on these complicated repositioning and development projects let alone business startups uh I’ve heard too many stories from friends who have lent money hard money with uh rates in the teens so like 12 13 14 17% only to have their borrowers not return payment and ghost them this is actually going on pretty uh a lot in SE several communities however I actually has some friends who’ve been
(06:37) around the business a long time who one friend mentioned to mentioned this to me and he’s been uh lending to Flippers he knows personally people he’s known for years and he’s still and he ran into this problem recently so folks never forget return of capital is something that needs to be evaluated before you do any risk will you get your money back money back say I always personally live with the quote uh the very very famous warm Buffet quote two rules of moneymaking rule number one don’t lose money rule number two see rule number
(07:10) one so avoid losing money it’s such a terrible thing to happen when investing to me there are better options out there as discussed by past past guests of the show like Tim Collins and Calbert mortgages I’ve posted links to both episodes in the show notes in the Cal mortgages episode near the near the end of the episode I asked my guest how they personally invest their own money for and um and if you listen you I think you would agree it’s a much more Diversified and secured investment versus lending on individual properties
(07:44) and individual investors on to this week’s guest uh Mike beer is an owner of a real estate investment company called Mike beer Investments the website’s Mike be.ca and beer spelled how you think it is like the beverage Mike be.ca they have developed an investing system that has been working for well over a decade and invest in apartment buildings in Canada uh Ontario and Al more recently Alberta as he mentions on the show uh his mission is to enable his each of his investors to provide their families with a financial future they truly deserve in
(08:14) the past he was a professional ski instructor and scuba dive Master how cool is Mike now he focuses on coaching for charity ice water plunges yes not just ice water plunges Mike walks into Lake onario in the winter Health obviously and Love’s personal self-development again website’s Mike be.
(08:38) ca please enjoy the [Music] show hey Mike what’s keeping you busy these days hey everyn how are you thanks for having me here I’m uh pretty excited I’ve been looking forward to this for for a while me too because we’ve known each other quite a while and have a a lot of mutual friends and you know I think the community in general needs to hear more positive news and that people can get ahead quite well in real estate investing you know I met you many years ago and then I still remember I don’t know even know if you want me to say
(09:13) this on the show but no it’s a good thing you were at these rain conferences with your Mr Hamilton shirt I can’t get that out of my head my wife said like who who are you seeing Oh you remember the Mr Hamilton guy oh who now has moved on many many many times and grew as a as a as a businessman right yeah it’s yeah it’s it’s been a fun Journey yeah but yeah we’re here to talk about you so tell us about yourself uh and this is a truth about real real estate investing like I said before we recording like tell us about your
(09:46) investing um so so right now I’m uh I’m an apartment building investor we invest primarily only in Canada for now uh mainly focused around multif family property and uh we essentially purchase average properties with investors and then turn them into pretty amazing communities MH so that’s the goal and then make some money along the side for for investors and their families and then hopefully get their you know get them to realize their dreams M uh and part of the reason why you’re here is because you’ve done well right and part
(10:25) again I know you’re not in the community as much as I am partly because I just hear all the negativity but you know thanks for being a Discerning investor and being at this for a while you’ve done quite well have you not you know what I I I never I never it’s it’s it always surprises me when someone says I can do well because I don’t necessarily think of it I haven’t done well but I kind of focus on this is pretty normal right now and then I focus on the future yeah but thinking back is a skill so so yes it’s I should
(11:04) be thinking more about yes all these things that have happened and all the lessons have led me to where I am today and you described your current portfolio as 12 buildings so let’s you you have wor three how many units do you have then so they’re so they they average between like average 20 30 units and then now we’re buying 50 plus uh unit buildings right yeah so right now we’re actually selling some stuff off and so the portfolio has shrunk a bit and then we’re building quickly too so right so sh going through
(11:39) a big shift right now yeah right so you’re well over 200 units right and then take us through the Journey what was your first income property so first income property you know what I’ll the Year sorry go ahead go ahead so over 10 years ago um I’ll tell you more about uh my most interesting first one of the first income properties so uh my wife has this friend he’s a he’s a realtor in and then they went to McMaster University together and we met for lunch with a bunch of them and then he you know I casually sitting now with him and he
(12:17) said uh you know what I I have 43 tenants I thought 43 tenants M how do you have 43 tenants I love it I want 43 tenants and it turns out he was investing heavily in student rentals uh since uh since he was like fresh out of University so right away within next I would say like next week he took me to see a property and he said we’re not buying we’re just learning and uh at the time I was uh working pretty hard in uh in the Consulting world you know traveling around a lot um I think making some pretty good money uh but from the
(12:59) early age uh I saw kind of my parents uh play the flicker in Lottery and I hate the Lottery lottery tickets lottery tickets because they were an immigrants and so was I uh but whenever I asked about like their future you know retirement oh we’re going to play their Lottery and we’re going to win they’re betting and then so iting the lottery retir ref to play the lottery it’s just so so I wanted to just secure my financial future that was the goal wait I think you’re more likely to hit by by lightning than win in the lottery I
(13:32) believe I think I think that’s the stat right okay sorry continue So So the plan was yes retire at whatever 55 60 and then live the you know live the the dream so that’s why that’s why I started kind of buying property so we went out to buy like look look at uh Triplex which was actually no fourplex and it was an illegal fourplex it was a legal triplex in Hamilton and he said we’re not this is your first property we’re seeing we’re not buying we’re just learning I looked at it looked at the numbers I like it I’m buying it mhm
(14:15) first one mhm and then I bought it MH so that was the that was the first fourplex I bought and then then we kind of bought another couple student rentals within months because I refinanced my properties like my home and kind of went all in uh and then my wife was uh kind enough to be very supportive she said sure let’s do it mhm and uh that’s how that kind of started actually pretty quickly F fantastic were the St rentals all around McMaster or yeah around McMaster that’s been a gift to many investors you know what it’s they they
(14:54) seemed expensive at the time wait tell the tell the investor tell the listeners what what’s expensive expensive it was like 300 something thousand it was like 350,000 crazy crazy high prices for uh for seven bedrooms or eight bedrooms and such and then for context I sold you know I sold my seven bedroom for over 860 recently so okay yeah so yes compared to today 300 doesn’t look so bad [Laughter] right but it it happened pretty quickly and then from there on I thought you know what I can do more yeah yeah and
(15:33) then what was the transition like cuz then when did you start doing apartment buildings then so so then it’s just uh like I joined some real estate clubs where where kind of met you as well um I bought uh like a sevenplex in London uh and then just uh and I met a mentor of mine mhm where he started kind of he was kind enough to to educate me through actually I didn’t I met him but he wouldn’t take me on so I kept harassing him nice hey he’s like no I don’t have any mentees right now M I kept at it and then and then he said
(16:14) finally fine you got to pay all this money up front and then you got to pay monthly like so he’s actually setting up barriers so I don’t like I I I don’t get coached by him so he was kind of like seeing how much I’ll resist before I’ll like give in but I said sure whatever whatever amount of money like I want to be like you Mr billionaire here right so can we shout him out or we need to keep oh absolutely yes so so my mentor is uh Brian pulus and then he’s uh I liked him a lot we connected really well because he’s uh he’s very humble he
(16:52) he immigrated here he had a furniture store uh where I think he struggled with his partner and such and then grew this this massive real estate portfolio so very inspirational but very down to earth and then I think we have a lot of the same kind of qualities where we’re not like we’re we don’t really love shouting from The Mountaintop but we’re more kind of reserved uh yet ambitious and driven right right right so so he’s kind of helped me a lot to kind of transition into larger and larger apartment buildings throughout it it it took a
(17:26) while and then I was fortunate of like when I when first started mentoring with him I I just asked him so so what do we do like what’s Step 1 2 3 4 5 well like what’s the what’s the recipe I want to become like a big investor now M and he said no no no it this is you got to build your own Journey like this is going to be about you kind of building your own journey I thought why don’t I just follow your journey and just make it happen faster but it doesn’t work like that so so with him we kind of worked on progressing um on this journey so that
(18:00) it’s fulfilling and it’s it’s the right thing for me at the time uh and then uh so I can so I can build on growth and continue to grow instead of just doing something stupid fast right away and then failing and then not picking myself up yeah people forget the old warm Buffett quote rule number one don’t lose money what’s rule number two see rule number one cuz I I mentioned that cuz people are losing their shirts left right and Center these days um but that was uh but for context for Brian is I think possibly the most successful real estate
(18:40) investor to com out of our community back from the rain days absolutely so so that’s the way I kind of found him I thought who’s the most successful real estate investor I’ve ever bumped into let me see if I can he can mentor me right um so that’s uh but I think what’s most important and I kind of realize it now it’s there’s got to be like a fit with with the mentor you got to have kind of similar values and and then I think Brian can work with pretty most people as long as they’re good people yeah right like Brian’s a good person
(19:13) yeah yeah it’s it’s crazy cuz I I watched that Journey like like I’ve known Kyle since he was in university oh wow his son oh yeah you remember these those days like I remember Kyle was telling me about the the student rental property that he lived in that they owned it was it was like it was like absurd it was like more than 10 bedrooms in water near water in water but love the hustle and that’s why I tell people like you know you send to kid University buy the house make them the landlord the business yeah well look
(19:44) at them now yeah he’s running the biggest Reit among anyone we know personally who started it themselves yeah they’re very successful in a good way and the they’re they’re I did they qualify a private read cuz they don’t publish what they own what like you know this world better than I do they are um they are on an exempt Market yeah yeah meaning they they offer they’re like a private like a they’re they’re available to the public and through exempt Market dealers but they’re not on a stock market yeah yeah yeah well but the my
(20:19) point is that um like their reports aren’t available publicly so let alone their portfolio right I can’t really look into it which is actually smart of them CU we won’t get get into that my point this in this uh my point in this is that he’s highly qualified right to to coach Mentor like the PES right yeah yeah and that’s a way to accelerate your growth pretty quickly because one thing I think one of the biggest things um out of coaching for years that helped meh wasn’t like a strategy or a book or or like a long coaching session where
(21:02) things are laid out on a map mhm it’s it’s like a split second of a of a comment so I said uh this is in the beginning years Brian I want to make this much like I want to get to this and he he said like this he goes that’s it and he laughed mhm and because he thought it was so achievable so almost funny and I think he did it on purpose he wasn’t laughing at me he was trying to drive a point with a comical way MH so that’s it I thought okay so if he’s laughing at it that means I can do it yeah that one little thing I think was
(21:40) the most impactful thing he said that kind of changed things for me yeah he basically gave you confidence right yeah cuz he’s a pro he’s a pro pro yeah and and he could he quickly tell you were thinking way too small I can appreciate that now now can you can you explain some of the challenges from going to student rental to going to apartment building that you had that coaching helped you get through um I think uh so so I was I I did things gradually so good I went to I I didn’t do this kind of crazy crazy Journey where I go from five to 100
(22:25) units borrowed all private money yeah yeah yeah with the OPM which you know I despise that term too because a lot of people say like I just heard it at a conference oh OPM this meaning other people’s money but um it’s you know like OPM the reason I I don’t like it is because it equals people’s life savings and they care deeply and they’ve worked extremely hard for that money so leveraging other people’s money I took a lot of time to make my own mistakes before I ventured into leveraging uh investor money because it
(23:08) was just so important Integrity is key for me and I wanted to do everything possible to learn and to respect other people’s money before I use them yeah like prove the process yeah right like you know cut your teeth with your own money yeah before you bring it to somebody else yeah so so I I kind of went linearly right so I did like seven 13 units 17 and then up and up and up then how did you fund them with other people’s money so So eventually by the time we got to the 177 we first we took some loan money from like private uh
(23:42) investors uh but I backed that with my net worth and then after we started doing Equity deals and then sorry at what point did you start selling the smaller stuff to trade up for bigger uh you know what uh that’s kind of not too long ago oh I seem to be waiting for cycles and but uh but now we’re selling like uh smaller stuff because we’re trading up for for bigger what do you consider smaller stuff so anything under like 20 units okay majority of the audience is beginner investors so none of them none of the 80% would own a 20 unit so that’s
(24:20) why I laugh but holding on doesn’t own a 20 unit but holding on to real estate is great so I I I wouldn’t sell them if I didn’t want if I if I didn’t have to where I didn’t have a bigger opportunity elsewhere and that’s why I’ve always told clients like like this Monopoly is won by owning real estate and charging rent right could you imagine playing Monopoly and not buying any real estate and just trying to avoid paying rent and going to prison and just collecting money at go that seems to be what most people do right but you’re doomed but
(24:52) not people here right not people listening nor will they be but like you you’d be doomed if you if you w a property owner in the game of Monopoly or imagine not collecting rent and then just uh having negative cash flow and continuing through that cycle yeah it sounds even worse [Laughter] right yeah so you found better opportunities then so what are these new opportunities that you’re that you’re selling off you’re divesting so tell me about why why this process why what made you think you need to divest some to and
(25:25) what is the new Venture so when when I previous s purchase these uh smaller properties like the S and and 12 and I thought why is the owner leaving some kind of like room on a table like he could have positioned this property better or improved the units and such and then now I see why is because I have some properties which were selling off they’re not 100% um fully renovated or turned over or uh uh beautified because we have other properties that larger deals where we can make more money faster right and I think that’s that’s kind of key word
(26:06) trading smaller for for for larger properties so Ontario has been on a on a good good run for a while but very I would say last few years has been you know very tough for for a lot of uh uh for a lot of investors so you can sit and wait this out it it will it will get figured out I think properties will do well here onario in time but um I don’t know if I have that much time where I’m willing to invest a bunch of more years to to wait for some of those properties to to fully achieve their Peak where elsewhere in in Canada and in the US um
(26:44) you can invest that money and be on a trajectory to to really realize value because there’s some economies like in Alberta where where I think that that cycle is just beginning the good cycle and and there is really economic demand which makes sense so like in Ontario previously um 50% of immigrants used to come to Ontario uh and then 50% rest of Canada and that has shifted so now only a third and you can correct me if I’m wrong it’s somewhere around a third only comes to Ontario and 2/ thirds elsewhere yeah
(27:22) because Ontario is very expensive for very expensive to it cost living so if you can cut your rent in half and then live in Alberta and then also increase your income by 30 40% and cut your taxes who cares if it’s cold right you’re polish that’s different right life is my family is from Hong Kong we’re from We’re tropical people speak for yourself fine and but you’re you’re talking like um like economics high level stuff but I I imagine you see it in your own building do you see less demand there’s less rent growth like CU again you have property
(28:04) so you have your own data like what do you seeing with your own portfolio and also uh and then your portfolio is mostly Kitchener watero Cambridge area uh Kitchener watero Hamilton London and then a little bit in Toronto okay and and are you seeing resistance for contined rent increases like what what are you seeing so the market the rental market has softened like we’re getting lower rents than that we were getting last year oh we’ve receded oh we’ve gone down yes yes in in Kitchener in in particular and then also in Hamilton too
(28:37) for uh for nicely renovated units uh we’re getting maybe I would say 5 to 7% less rent now and it takes vacancies are longer as well what what’s what’s vacancy Now versus last year so last year we had lineups of people oh okay French and now we have tenants oh you know what I’m looking at seven other units today so I’ll think about it wow I would say uh yes because we’re look we’re targeting tenants at the top of the market yeah yeah yeah which so they have a lot of choice that’s interesting too so so there’s softening of that and
(29:26) then also in terms of building and such in Kitchener waloo Hamilton and such it seems to be more of a buyer Market than sellers market right so all that put together yes the interest rates have gone down a little bit but there is there is quite a bit of uncertainty there fascinating because what I’m seeing in the small investor Market is uh from the from the from the resale Market most investors are selling right now more more are selling than buying um for whatever reason and then like you know like for for small real estate the
(30:03) best practice is you sell it vacant right so my point though is that know if if if existing landlords aren’t trying to rent their properties that would make you think there’d be more renters for your buildings right there’s you know what there seems to be more demand more there’s demand that I would say it’s equal or greater but seems to be a lot of product on a market available for rent this year right and it’s just I would just this this just happened from the beginning of this year like last year was a completely different story so it’s
(30:38) shifted quite a bit I don’t know how long this will last right like it’s cyclical it’s interesting well I again like just anecdotally I keep hearing the topic of Alberta coming up as in like young people that’s where young people generally I hear either going to Alberta or the states okay right it depends on their um what kind of uh job they’re in mhm right and and um like I posted I posted something on my social media about uh who where are uh where are millionaires going right so number one is uh Dubai right I
(31:10) think number two number two and three was either Singapore in the US number four was Canada right and I think it’s largely I think it’s largely what your background is yeah and I mean you know without a better way of saying it color of your skin that’s usually where you end up okay I my list knows I knows I love everyone I mean no offense to anyone but just just that’s just anally the trend I see like if you’re of a certain skin tone that you go to Singapore you know what I mean I think people know what I mean
(31:41) well you know just simp again let me explain that like Chinese because of what the Chinese government did to Chinese people like with the lack of Freedom during the pandemic a lot of them are going to Singapore okay right so culturally and then even here like Asians that they’re looking to move I often Singapore often comes up anyways I worked in Singapore I love it it’s great I love Singapore too I don’t know if I go back I I wouldn’t live there it’s just too hot for me but uh it’s you cold I do well sometimes hot sometimes
(32:15) you know just a mix but I digress um but for newer investors right there’s a lot of money to be made in in Ontario so if you’re trying to buy a single like a single unit M right um why fly out to Alberta and then look for stuff and then it’s going to be expensive why not look for an amazing deal here cuz you probably have a lot more time than like a larger investor yeah right so so the market is not dead it’s just there’s a little bit more work to be done here to to make money that’s a tough one explain to me
(32:54) what what what would the single unit look like uh like what’s what Market what price point um so I I don’t buy single units anymore but I’m thinking anywhere anything where you can get really creative around building value yeah yeah right into a property so so no longer just buying a single family home and renting it but uh adding multiple suits right that’s become easier and in Ontario uh offering some kind of like extra services on top of that MH mhm mhm um so I I’ll release this soon I’ve already done the math behind it um so my
(33:35) perspective for investors locally if they’re going to buy duplex you’re paying somewhere around 800 Grand it’ll run for somewhere low 4,000 right and then you work at the math fully loaded expenses you know fully loaded expenses what a projected financial report looks like CU you actually know what expenses are and I’ve done them for apartment buildings but I haven’t done them for like duplexes so so so commercial inv you know cap rate every and anyone listening to the show needs to know what a cap capitalization rate is absolutely
(34:04) right uh for a duplex the capitalization rate for my numbers and they’re pretty conservative it’s about 4.5 okay right yeah versus the house I bought in San Antonio’s 5.1 yeah that’s a big difference big difference right and I’m talking about a $800,000 property here in onario versus I bought a property for 265,000 American that’s awesome right and I only have one tenant does y have experience with density like yeah most most most duplex investors no your your usual biggest problem is the tenants conflicting with
(34:39) each other exactly so that’s what I experiened when I have that for plexus that the tenants started fighting with each other and then I figured okay so they have to be kind of similar in terms of tenant base they can’t you can’t have like an older grandma and a students living and a and a couple with kids to together because they’re going to be fighting mhm right so I’m then for my research that’s why I’m okay going back to single family like uh happy to have this conversation offline with you because I know you’re like researching
(35:11) the states so America America housing for rent which is one of the biggest REITs in the states they were asked the same question because they do a lot of building they build develop they develop their own rentals so the question was naturally asked why don’t you build more multif family and they said we’re building what’s scarce and that’s family detached that makes sense in their experience again this is one of the biggest reads in the US in their experience they’re saying that with multi family their vacancies are longer
(35:37) and they then they have to give up more rent concessions meaning what free rent or Renovations in order to attract a tenant to rent from to take it right and this is from arit which is a very capitalist organization and then they have everything calculated abut exactly right they build like over 300 houses a year like these folks are not insignificant like I love all real estate you know what like single I’ve made money on single family on on the triplex on on multif family on some commercial too right it’s just what do you want to
(36:12) specialize which direction you’re going to like we have some commercial but it’s more by chance because we bought a building and there’s some storefronts at the bottom but they have again longer vacancies and and my team doesn’t specialize in that space so we kind of treat him as a like a little step child right right right and then your valuation your underwriting has to account for that yeah there’s a longer vacancy yeah yeah but you’re a pro so you can do this yes but sometimes I uh I just let it be a little bit of I
(36:45) could probably run those commercial units much better but they’re only couple percentage of our entire portfolio like 2 3% of our entire portfolio are the commercial units so you got to kind of focus on the main thing make it happen right cuz you’re I mean as an investor you’re battling every day with noise right there’s stuff Happening Here stuff happening there yeah you have well over 200 units I’m sure there lot of noise so like for me like when I first half of my day I don’t typically do emails like I don’t look at
(37:17) my emails I tell people don’t like don’t I’m not going to answer calls I got to do what I need to do and then get the biggest things done during the day and then I’ll look at my email and get bunch of like operational meetings happening and all that stuff right cuz otherwise you just you’re just distracted and then you’re not going where you should be going and some balls will be dropped right here and there but but they kind of keep key things will get done yeah yeah there’s no perfect Focus yeah my point where with the commercial
(37:52) unit is like you you properly underwrite it knowing it’s going to be like 50% vacant or whatever yes yes yeah yeah because that my point was that uh I think many novices don’t account for that correctly because they don’t they don’t count for vacancy correctly on on Commercial units especially if it’s like retail or office absolutely the deal has to basically work if that thing’s vacant but because it’s such a small piece of our portfolio our team is not the best at kind of managing lease ups and vacancies around commercial
(38:23) units so I know that’s not our strength so we’re probably going to have a little bit more vacancy on these commercial units than someone that’s where that’s a line share of their portfolio right right so there’s a bit of uncertainty there tell tell me about what what it is uh is give me some broad or high level view of your portfolio is is it like more Suburban is it more urban are these along like major Transit lines so I typically like um bigger cities like Hamilton Kitchener London that’s close to something meaning
(39:01) Transit lines uh close to schools depending on the tenant type we’re trying to attract in that location uh we have very few student rentals I don’t focus on those anymore so it’s uh it’s all families and ideally like working professionals um so then because if you purchase an asset in a bigger city there’s going to be there’s there many ways you can dispos of that asset later meaning you can sell it there’ll be buyers but if you purchase an asset in a smaller small town it may cash flow may have better cap rates uh as well but
(39:40) then what’s your exit strategy and then are you going to find a buyer for it are you going to find a property manager are you going to find a handyman are you going to find an electrician because there’s probably two in that town who knows so I like the certainty of a bigger city bigger economy that’s kind of even close to other economies like Hamilton great right it’s close close enough to Toronto where people can commute and so is Kitchener it’s got the universities you know University of woo laor and and then other colleges and
(40:08) such so it’s almost like it’s all connected and a desirable place where people like to live mhm um like one of our properties is close to like a big large shopping mall and then an LRT in in light rail Transit which is like kind of like the street car right which is which is key so we got get a lot of tenants that don’t even need to own a car and they can get get to uh you know get around without it very attractive yeah who wants a car parking is expensive traffic is bad and then how do you know you found a deal because I I I bring this up because
(40:45) that’s often a mistake that new investors make is they can’t identify a deal and they get into a bad deal like you get into a bad teal you’re in a lot of trouble so you know what confuses me about a lot of investors they say they’re not not good in math Yeah Boy And then and then they start buying deals I don’t know how they do it I just literally don’t you don’t have to be great at it but someone does because the Realtors the performa they give you they it may not be exactly the reality wait wait wait how many how many how
(41:18) many reality realistic per performers have you seen from a realtor zero 0.0 yeah 0 Z so that’s the scary thing I think if um if Mike’s words not mine no I I I think I CH I joke cuz I’m licensed right you’re not that’s the standard out there that’s what’s done that’s common everybody knows it and then that’s the world we live in yeah yeah my point is that not everyone knows it that’s what I want you to say it yeah so this is the truth about real estate investing and and my experience is very much similar I I can’t recall a Prof
(41:58) forer I didn’t have to make adjustments to yeah which is typically always adding expenses and vacancy allowance yeah cuz somehow if they’re selling a new building and an old building it seems like the the repair and maintenance is the same but reality it’s not right aging infrastructure Plumbing electrical things will happen yeah 100-year old property with like a tiny repairs and maintenance budget but also I can’t connect with people that don’t want to do math or don’t understand math because I always been good at as a child and I went to
(42:31) you know University of watero got a Bachelor’s of mathematics and then computer science so so like when I have my big screen it’s 32 in and I have 600 numbers on it my wife looks at it and she’s like she goes what do you see in there the Matrix The Matrix The Matrix exactly because I know how to read this I know I can predict the outcome the the numbers they they speak right versus uh versus like the nicest performa so so a lot of um so when you buying a property whether it’s big or small you’ll see typical expenses they
(43:09) have to give you the actual property property tax utilities rent roll uh rent roll which sometimes is not even true so you have to kind of check it because they may project that the increase in a few months so they kind of bring that in so you have to verify the rent role because it may not be actual or they may be projecting vacancies to be rented for this amount but they haven’t rented it yet so but just kind of understanding uh the type of properties you’re buying because so that’s why I talked about commercial
(43:46) units is not our primary I would say expertise it’s more multif family because just seem so many performers so we know how how they’re going to perform whether if it’s an older building tow houses or newer they’re going to have different levels of expenses and uh and just making those realistic so you have a realtor portf performa then there’s a performa that your mortgage broker will do which will be different more realistic and then there’s one that you’re at least more conservatives and then the one you’re
(44:16) going to do MH so not to confuse people but but yours is going to be more most realistic out of the three on what’s going to happen and you have to be you have to be sophisticated to come up with a realistic forecast and just just see a lot of perform I see a lot of properties how they actually perform actuals yeah yeah yeah cuz the more actuals you see the better you can discern what a property will do and it’s especially common in smaller properties for for sellers to to not disclose the you know a lot of the
(44:53) things that have gone wrong or issues that have gone on in the property right yeah so you have a better dose of reality than than the novice would which is okay everyone’s got to start somewhere yeah but just uh you know verify yeah look at it look at the ceilings do you see any Stains have the roofs been leaking right how old is a building like if um I bought a building from early 1900s mhm and built in 1913 okay so we have a lot of like the operational costs are sign ific anly more because of the wiring because of
(45:30) the plumbing I mean things happen a lot more than they do in a newer newer building but uh so I was fortunate enough to kind of understand math from from a young age and then until this day it’s kind of the best scale and I thought I made a complete mistake I should have went to business school but it seems like it’s much better that’s uh I think all it’s all good and you can always do business school later but um but like to your point people who can’t do math and you know like I’m sure I’m sure you’ve seen deals and I’ve seen deals
(46:04) and I can’t believe someone did it and like like a property for sale or a deal and I like I see deals get sent to me because people are raising money and whatnot and I’m like I can’t believe they did this deal yeah someone can do math along the way but everybody’s can learn it I mean it’s not rocket science right like little bit of dose reality plus some numbers and then boom comes out like does this make sense yeah yeah and don’t try to tweak it till it makes sense cuz if you sit there for two hours you kind
(46:32) of you you’ll tweak it and then and then convince yourself it’s a good deal yeah now you mentioned you’re divesting someon Ontario and I don’t think we mentioned it yet but you’ve you have two deals in Alberta you’re you’re working on can can you explain so I think you already touched on why you’re divesting Ontario and yeah tell us about what you’re doing in Alberta so we’re shifting our portfol cuz I think that Alberta is at the beginning of a uh of a good real estate cycle so not only the rents are lower but also the uh the
(47:06) incomes are higher so just economically it makes sense and then you can find properties that cash flow uh which it’s it seemed like in Ontario for for multif Family Properties it became more and more difficult and then and then actually the execution of a business plan here Ontario because there’s a lot of uncertainty around landlord tenant board and tenants and such so it’s less it’s less predictable on if you can execute on lifting a buildings value here in Ontario so that’s another reason of uh starting up in Alberta and
(47:46) then I think in about a year we’ll we’ll start working in the US as well so business so demand like common uh you know economics and then also also predictability of execution of a business plan because when we’re put a deal in front of our investors we want to be sure we can execute it and there’s as few of things that are out of our control as possible which seems like in Ontario it has changed uh kitchen or water has changed substantially over the last 12 months and there’s a lot of pressure for uh on landlords um like what kind of pressures
(48:20) to not uh to not increase rents for new units to not turnover units to so basically they’re discouraging uh landlords from investing into uh into uh infrastructure into into buildings well not to get paid for it not to because above guideline rentals like I can’t believe how much negativity there is in the media about above guideline rentals that the LTB approved that the landl tender board the landlord the tenant friendly landlord tenant board approved above guideline rentals and then people resist them absolutely and then I
(49:01) mean util someone else needs to pay for my balcony someone else needs to pay my parking lot my roof I don’t have a car someone else should pay for the parking lot to be be refinished not me and and then at the same time I mean the city funds these kind of campaigns too and but the utilities and property taxes all that stuff has gone up right in a rent controlled environment yeah and so so it’s a it’s uh it’s become I would say One Step even more difficult so that’s that’s the reason right cuz we’re trying to execute in a
(49:34) business plan a good investment where we can remove some of the uncertainties and then also I’ll tell you um I’m looking forward to having a great relationship a much better relationship with our tenants meaning like a business and then provider client business relationship where they’re where we’re appreciative of them and they’re appreciative cretive of us um so that’s beyond the numbers yeah yeah well before we move on for the numbers like with rising cost of operating your business then your cash flow and profitability is being is
(50:10) reducing yeah right so it’s making it’s becoming less of an attractive business and you’re basically you’re saying it but not saying but tenant landlord relationships aren’t nearly as good as they used to be if you can have customers that appreciate you why not oh yeah life is short I see it all the time life is short right I tell I tell novices all the time like life is short like choose who you want your customer to be tell me what your tell me about your customer and then build a business around that like I’m all for working
(50:41) hard and then doing stuff and and continuing to kind of like go beyond and doing the hard journey I’m all for it and I’ve done it for for a long period of time and I came from kind of my parents and my upbringing but there is a point where there is a business decision that needs to be made does this still make sense yeah it’s not my ego talking it’s not fear talking it’s more about how can I make money and have a better life right and enjoy right more what we do and this isn’t just you I imagine your employees would
(51:15) appreciate a better customer relationship that’s even tougher actually putting putting your employees in in in positions where where they’re you know they’re facing kind of a diversity and then such on a daily basis yeah I agree I’m going to go somewhere else well I already started so tell us about Alberta tell us about what your what what these properties are like so we’re right now we’re buying 100 units there so it’s a couple couple different properties uh one is a comp like a townhouse complex and another one is a is a value ad uh
(51:51) multif family building so that’s uh so those are the first two and we’re looking to scale that up uh pretty quickly I think uh I’ve spent a lot of time thinking about and talking to investors about what they want and the old model was more about hey how can we increase value to properties in Ontario and then boom uh within 3 years four years or or five years get your money out and then and then sell the properties for a great profit but um that 5 years seems to go by so quickly MH like you think think 5 years okay I’m going to be able to do
(52:28) all this stuff but it goes by so quickly and then who knows where the market will be in 5 years where in Alberta we’re focusing on cash flow from day one because I think there’s a lot of certainty when investors get cash flow from day one try to accelerate the return of their initial Capital as quickly as possible and then we’re going to hold on to the buildings forever which is unheard of because everybody’s used to timelines but once you get your cash back and you’re getting cash flow yeah there’s you love
(53:01) your Roi then forever seems like a good thing right because that provides family with income replacement income whether you want to stop being um whatever you’re where you’re working right I just met a friend of yours that was a teacher and then he’s got his income replaced which was a powerful story I love that I love it yeah so so that’s kind of it’s it’s it’s offering 2.
(53:29) 0 that’s that’s where I’m going with so this whole shift is is with investor in mind how can I bring more certainty and then bring more cash flow bring more income to them for infinite periods of time so that’s that’s where that shift came from it wasn’t oh it’s too hard I don’t want to do this anymore I wake up at night thinking about you know if if this plan will no no no none of that it’s it’s more kind of investor first and then oh by the way this this sounds like actually pretty good plan so so that’s what we’re doing now and in these
(54:04) properties are they they’re existing are you building ex yes so so both existing uh so townhouse complexes existing and then um and then uh apartment building so these are the first uh first two how how old are they is this a value Aden they’re they’re both value ad uh one of them is about 30 years old and then the other one’s uh 10 and for context like that’s a lot younger than stuff in London on Hamilton Cambridge then the 1913 building yeah yes you know the city of London came back to me say oh that’s uh that
(54:42) property you have the seven units actually only a legal duplex I’m like how do you know it’s been like that since I have rent rolls from 1970s that show seven units yeah yeah and then what they say uh they just stopped just gave up yeah argue with you I guess maybe when they hear this podcast they’re going to come again knocking on my door but how do you [Laughter] know so yes 19th 1913 in the middle of a housing crisis you want me to kick out five tenants no it’s a it’s a good property no I I I like it no I like I like
(55:22) younger property like I can’t imagine who doesn’t like younger property just with more modern building building code less cap less capital expenditure needed up front you definitely need to be expecting surprises if you buy older properties and they’re not good surprises they’re always something breaks and something costs more operating expenses are higher right so you can you can still make really good money on older properties it’s just being an expert in that uh in the S side of the business and these properties
(55:52) what city are they in uh so Edmonton and we’re looking outside of Ed Minton and then also looking in Calgary as well so kind of I would say bit all over um but that’s not the only solution I think you can you can find good properties in many parts of the country it’s just uh what kind of environment do you want to be do you want to be in an Ontario and BC where rent controls are tough uh or do you want to be in some of the uh just like us right you have some more landlord friendly States and then less uh landlord friendly States like
(56:30) you though I like I prefer bigger cities just cuz I’m very risk adverse I I I want to be in a bigger city so I have more people to sell to more people to rent to more people to sell to right you know what I’m risk reverse too but but I like um I like sometime taking leaps into into calculated risks yeah yeah so when I was uh I remember when I was uh five I think I was five or six years old M and then and then we uh we we I could barely swim and my sister uh was a okay swimmer and we were going to pass like this uh I think it’s just a c
(57:06) certificates for swimming so you can like rent you could rent like a paddle boat or whatever right and back in Poland so so they so they said okay you’re going to you’re going to now um they they brought us to the pool my sister and I we stood on a like the olympic size pool Podium and I’m like 5 or 6 years old and it was pretty deep in there and we were supposed to jump and then swim length and then back right and I only knew how to kind of float on my back and then my sister looks at me she’s like yeah I’m not
(57:40) doing this and I I just jumped so I jumped in the water and and then like I can see the bubbles kind of coming and and then I see this hand kind of pull me up and the Lifeguard kind of pulled me out of the way water like this and then put me down and it started yelling at my mother how can you let this kid jump in the pool so so so now taking that skill and of Leaping which some people don’t have and then putting C and then calculating risks around it is kind of sometimes what you need just to go for stuff as long as it makes
(58:23) sense financially and with the economy and such but there’s like this kind of I like bringing out this this little bit of an impatient fire in myself and then calculating around it and having the team verify and then boom Going for something yeah see your risks are pretty calculated right going to the fastest growing Province per capita whatever it is is not that doesn’t sound that risky where it’s landlord friendly but a lot of investors will sit there and overanalyze and then over educate and then and then
(58:56) just not pull the trigger oh and I think a lot of that is just inability to do math right if you can’t do math and if you’re not a logical thinker then every thing that’s harder to come to the conclusion to do something yeah but you can always partner with a logical thinker yeah a problem solver right right with someone and then go with them together use leverage your your your skills both of you yeah and we have your website here and and that’s part of the point of it right like you you have the ability to you do take on Partners like
(59:26) absolutely so we’ve uh we do everything on a project by project basis we take on uh take on money Partners at credit investors uh onto projects and I think the key is that we try to keep our overhead as low as possible so that we can give the investor as much of a return as high a return as possible um while they’re actual owners of the opportunity um because I see that there are a lot of reads out there uh and and the returns aren’t amazing and I see that a lot of um a lot of their costs go into the the overhead of
(1:00:06) the property so why not be an owner but partner with somebody and you leverage economies of scale of of a 100 units um and go through this kind of Journey instead of um I don’t know I’m not even going to talk about mutual funds but but instead of um buying into something where you have tremendous overheads so from day one there’s already a little bit of a disadvantage right so that’s what we kind of do we do project by project basis but the project keeps growing M like so now focusing on 50 plus units and then and then sooner or later it’ll
(1:00:45) go up from there right so I think we’ I think we’ve established that you qualify as an expert how do you structure the deal because I’m sure many people are interested in that like what like from from the listeners perspective they they want to do deals like you do so they want to know how they should structure the deal to how what does the passive investor get and some people are listening for being a passive investor so they want to know what they get to okay so what did they get so are these hard money loans promis no it’s for 17%
(1:01:11) interest what are we talking about here no no no none of that so so the simplest way to structure a deal is uh so there’s kind of two two main ways one is with a limited partnership and then the second is with via a corporation I would say for for listeners that the simplest way to structure a deal is via a corporation where the corporation owns the apartment building and only owns that one apartment building um of course the bank needs a guarantor so so I become a guarantor for the project um and then the passive
(1:01:50) investors so it depends on a deal they own a share of the of the property and then and and then whatever that split is they own actual shares so they as directly as possible they own a piece of the actual building MH so regardless if we refinance or or such they get paid out uh the profits and then for us um we don’t take any uh like we don’t mark up any anything so in terms of uh handyman or property management or anything like that we pass that on to at cost to our investors so basically we only make money if the building makes money right
(1:02:32) do you take an asset management fee a find uh acquisition fee anything so so typically we just do like a a piece of the rental as a to pay our staff for administration but otherwise it’s all a cost right yeah and then property management is that in-house is that third party it’s a bit of a blend so we have a team uh teams established and and then all the the cities and for the emergencies yes we leverage a property management company and calls but for the dayto day that’s our team doing the work it’s just because it’s uh I found that
(1:03:07) it’s um once we have a presence in the city and then we have our our own people that do the things that continue to repeat themselves like uh like cleaning and and the garbage and handyman and all that stuff it’s just a costs uh because of the the the size of the portfolio they get driven down quite a bit and you ear mentioned about like utilities and property taxes going up I imagine your payroll has inflated as well naturally with inflation the way it is it is it is but we’re you know what um actually over Co something weird
(1:03:46) happened uh before covid we are paying certain P amount of money per unit uh and then because everybody was talking about delays increasing costs we hyperfocused on how can we reduce the costs of of renovating each unit we actually brought our brought down the cost of our units by about 20% sorry repairs and maintenance or renovation of an entire unit wow what did you do so we just got a dedicated team and then um some of the suppliers eliminated some of the uh Middleman man from the from the suppliers so basically
(1:04:29) got more direct and then and then promised more volume which happened and it was just because there was just this fear of how we’re going to do this if if our costs escalate like crazy so just hyperfocused on that um how do I reduce costs there and they actually went down over a period of three years all right right which was odd I didn’t expect that right but it’s just trying to work with whatever you’re given yeah and sometimes it works out really well I’ve been saying lately on my like on my platforms how uh middle people are at risk with
(1:05:05) the way things are these days but I I feel like like I’m like I’m a middle person you know like uh meaning like you a middle people people like in the middle here trying to trying to survive like I always have this always have this uh you’re the asset owner how are you the middle person oh maybe maybe you talked about kind of like people people working towards to make a living and and and and to better their life situation no I don’t mean middle class middle class where people are in a lot of trouble if they don’t own assets but that’s not
(1:05:38) what I was getting at I was more getting at like um like i’ I’ve posted a couple times I think a lot of Realtors and mortgage people that service investors or okay they they at you know some of them are middle people and oh that’s what you mean okay I get it like they’re you know they get they’re they’re how they get paid just adds to the expense of the investor and there’s lots of investors looking to cost save costs especially if they get get more volume right why why not order 10 kitchens direct from the supplier at the same
(1:06:08) time yeah cuz you were you were already doing significant volume had you you have a lot of stuff so so we’re just going direct more and then and storing that stuff which uh which helped a lot mhm yeah you my friend Caleb West he’s he’s actually a he’s in construction so he told me about that like they were ordering containers directly from China from the manufacturer for their builds to and they save so much money there so many middle people got cut out yeah yeah You’ got to learn from the REITs right they order skids of flooring yeah at a
(1:06:43) time from China well these guys are ordering the guys are ordering shipping containers full of materials right directly from the manufacturers yeah that’s what that’s what I mean like a lot of middle people are at risk with just relationships technology right but for the smaller investor um kind of building relationships with your supplier I think will drive your cost down too MH like if you forecast okay I’m going to do I don’t know three units this year and and build that relationship I think you can kind of
(1:07:12) work with uh with people to to to bring your cost down too yeah yeah you know when product sales are coming up for example and if you have the ability to store yeah you know that can work yeah so Adam’s question was you okay we’re a little over time you’re okay sure sure adma’s question was what would you do today investing cuz again we have a lot of younger investors on the show who are like under the age of 30 say you have 100 Grand saved can I talk about mindset a little bit because I think that’s super super
(1:07:41) important because to me the the mechanics of it is the 20% and then 80% of is the mechanic is the is the mindset right and for me uh I underestimated how difficult it would be to trans I into into this from being like a right poor immigrant yeah right that that mindset shift took a lot of books mentors and and such so so I don’t know if if you know my story but I know your story listener doesn’t know we we please go ahead go ahead so we grew up in in Poland uh until I was uh 10 years old and what city what city it was uh G
(1:08:25) which is cities in in the north of Poland uh and it was Communist at the time so the economy was extremely unstable I remember going to the store that to buy an ice cream for 20 Z right which is their currency is a still a currency it is but it’s stabilized significantly because they entered the European Union in 2004 and they’re not in the Euro sorry no oh they’re still not in the Euro okay no yeah no we we’ll leave that aside why not but uh um so we used to go to the store and something would I remember for
(1:09:00) for for 10 get an ice cream and then it was like a like you know those machine made ice creams and then they added a bunch of water to it so if you if you tilted like 6° it would just like the version of Str flation right yeah water and the next day we go and then today cost 20 oh wait sorry over over over a day over a day over day today is 20 same water content or do they have that too same water no product didn’t get better or worse it didn’t get worse either just caused double and then you how that for inflation and then a week later it would
(1:09:38) cost 30 right so so I saw my parents like frantically whenever they got money cuz my my dad was a chief engineer on a cargo ship they would frantically spend it so quickly and we would wait in a like there was a lineup a huge lineup and products weren’t readily available you you would go to the meat shop and then there were rations and such so you couldn’t buy whatever you wanted and it was mostly stores were empty but there was a huge lineup it was a two-hour lineup and then my mom was like go go go go go kids go line up and I’m going to
(1:10:11) and then I’m going to go to the front line and see what they’re selling right so they were selling a TV just one type of TV and my dad’s okay we’re buying it and we had a TV but the TV wouldn’t lose lose value as quickly as the money so so we would buy anything like just anything to have like that’s more tangible right because the economy is so unpredictable and just cash burns your hands literally because you need to you need to buy whatever a bottle of vodka is better than having money because it’s always tangible right something and the
(1:10:54) US dollar was extremely expensive and uncommon in in Poland so it’s more about what kind of products can we get to and then and then because ideally you would have bought US Dollars over over a TV the best thing were were the the rejects prod the products rejected from the West so some factories made like these Nice Nice Clothing that would go to like the Western Europe but they were rejected by the manufacturer so they would sell in Poland it was just so nice and everything like that so people would buy that up like crazy but anyway my parents
(1:11:31) decided that enough is enough so somehow they it wasn’t easy to get passports so they I remember my my mom bringing like kilograms of coffee that my father bought outside of the country cuz he was like uh he was he was allowed one of the few people that are allowed to leave because he they were trading with India and Europe and and such right so he allowed to get off the ship yeah yeah people weren’t allowed to get off the ship uh no most people weren’t allowed to leave the country right right right yeah but
(1:12:01) because he had the job he was able to get off the ship and then actually buy foreign products so sorry I need the history lesson was it the neighboring countries that didn’t want to polish or your government was trying to keep you there the government was trying to keep people there because they would never come back right right yeah right so they wouldn’t let cuz living was so hard you’d seek other opportunity elsewhere exactly communism yeah so so when so I I I joke because when people say on social media Canada is
(1:12:28) going to the Communists like you’ve never lived under communism sorry continue you have so so then he would bring back like coffee and then products and I’m like why are you bringing so much and a lot of it was for for bribes right which so so we had this like big coffee my mom comes currency it’s my mom comes to passport office nobody could get passport and he like here you go he’s here’s a nice like whatever European coffee and boom we got passports a week later so you used it for currency a barter yeah basically but but everybody
(1:13:07) did it so it’s not like a well yeah cuz nobody wants the money what would you rather take people people were probably lining up for European coffee too not just TVs so that has value it’s a it’s it’s hard to imagine but uh but we all had enough food and everything like that like everybody body was well fed and such it’s just more about there’s no possibility of getting ahead there’s no savings right yeah let alone investing well that’s yeah how do you save you don’t want to save that currency it’s devaluing so we were so we
(1:13:40) were kind of my a parents said where we’re going on vacation to Norway mhm said Norway okay awesome so we’re on a way uh in a car my sister she was 16 uh I was 10 years old um and then one hour before the hitting the Border they said by the way we are we’re actually going to be escaping the country and I don’t know why you would tell a 16-year-old 10 yearold that military police and Border guards are an hour away that you’re actually leaving illegally yeah I wouldn’t told them but they did so my sister started crying
(1:14:16) because she left her boyfriend at home but somehow we got through and then we got to Norway and it was like a whole different world um we lived there for a little bit they didn’t let us stay there but then my dad got up we got we got an option to move to Australia and Canada and because my my dad’s had one University friend living in Canada that kind of set the rest of my life that’s why I’m here wow how Greatful your parents for Canada you know what it was uh it was a crazy journey and uh where I’m getting to this
(1:14:48) it’s just um keeping something in your life that kind of drives you and for me it it drives me because my father and my mechanical engineer chief engineer was delivering pizza pizza right when we got when we got to Canada and then also working in the factory and so humbling right because he’s uh he’s always kind of educated and very studious and uh you know delivering pizza for $2 tips Ian come on it’s so so crazy so so seeing that his skill is so needed here as a mechanical engineer I mean on a ship like that’s that’s
(1:15:22) massively needed here it is but it’s it’s not as easy right yeah so then later he he actually got into like Drafting and and such but uh but that um that kind of showed me that you know what this is kind of a crazy opportunity that I need to do more so it drives me every single day just to do more and be more so for younger people that are starting out just find something that drives you right even if it’s you know what life is short and we need to make things happen MH um do you want to struggle for the rest of your life or
(1:15:56) you want to make something right realize your so if someone has like some money you said 100 Grand they have yeah just look at uh buy something or anything with calculated risk I don’t even care where it is as long as it’s it’s good real estate that makes sense economically MH right I don’t um something that will bring cash flow though like you don’t get get into negative cash flow situations which I think a lot of people do in hopes that something will happen but a lot of that what happens if you buy a negative cash flowing property
(1:16:35) it’s it’s kind of tough on a psyche too because every every month you see kind of that money eroding away but you don’t necessarily see that property appreciating and appreciating is on paper and bank account is is real so something that will Propel you and then help you emotionally to to like the investment because if you’re cash flowing negative on a condo you’re going to hate that condo yeah and your spous is going tote you for doing that deal yes no matter what you think is going to be worth in 5 years and who knows what
(1:17:09) it’s going to be worth in 5 years I already spoke to someone who uh had two preconstruction condos I think he was losing 1,400 on them each and he lost his job oh that’s so hard right and so the point is if you if it’s negative cash flow it is so much more risk than a positive cash flow property yeah right cuz positive cash flow property you don’t have to worry about it absolutely I mean and if here it’s not possible maybe it’s possible somewhere else or even the us or or whatever but it’s got to be you got to have a healthy
(1:17:41) relationship with your investment yeah because it’ll keep your relationship with your partner healthy right and then there’s plenty of space in plenty of uh places in US and Canada where you can invest a 100 grand in cash flow for sure maybe it’s not in your backyard but but it could be somewhere else now what are you looking at doing in the states same thing so I’m uh like I’m I’m very disciplined and we’re looking at multif Family mhm because of the cap rates because of the opportunities uh I like the the states
(1:18:19) that um I think you do as well that have good tenant laws uh that are favorable to uh to landlords mhm so I I I I kind of like the diversify a bit outside of Canada do you have any uh what’s different about the US investing for you then versus what you’re doing locally are you finding better affordability because in general for example like the vacancy rates are higher generally in the states just generally than than in Canada I I mean I I I keep reading that the vacancy rate is shrinking in Alberta andon Calgary while while rents and
(1:18:53) prices are going up uh what do you do you have any Target markets or properties in m in the states so right now I don’t have any any specific spots we’re kind of looking at a few different ones but it will be the same kind of model where it’s value add 50 plus unit buildings uh and just continue to kind of crank those out but we’ll pick a location and I don’t like to kind of pepper uh my investments around because we we want to build up a team in that City and like I mentioned we have a blended team between property management
(1:19:27) and our people so we have to have some kind of scale in that City yeah so you’re going to build up you’re going to you’re going to scale in one location so same thing different city right right but there’s you know there is a little bit of a currency risk between because the currency May shift between Canadian and us right plus we’re not you know citizens or residents over there so things are a little bit more difficult to start up but not impossible like you’ve done it yeah passive investing in like you know my wife so she can help
(1:20:00) you give you some advice on that too yeah on the structure and stuff like that yeah so so same thing always uh kind of multif family same tenant type similar type of type of areas but uh I think it’s going to be exciting mhm you know because I’m excited yeah there there’s one Alberta and then in the US there are many albertas yeah I think people forget that as well like we have I think what what how many how many cities over Pop I think what we have three or four cities with population over 2 million in Canada
(1:20:30) whereas the states has lots of them yeah right you and I like big cities like there’s only so many big cities in Canada yeah yeah absolutely um now I I mentioned it I mentioned to you before uh uh another time we were talking about like uh because you belong to entrepreneur organization like I do yes who referred you to entrepreneurs organization originally uh you know what it was um uh um no one referred me oh you found on your own yeah someone someone kind of told me there might be an organization like it so I actually didn’t get
(1:21:03) referred into it um kind so the the so so someone from within the organization didn’t refer me okay into it the word of mouth got to you yeah yeah yeah and it’s a it’s a wonderful organization I like the fact that it’s a it’s more of a supportive uh Mastermind of SL community of people that uh that help each other to do business and then and then mean well are you reaching out to other EO members in the States on your on your us due diligence uh not yet not yet I’ve talked so I haven’t I’ve done it a little bit but not to this the
(1:21:46) point where just just starting to I would say that journey in in the US but I have done it in elsewhere like across Canada I know the finance chair for Atlanta in case you’re looking in in Georgia oh he he manages 800 doors his his business so okay okay good yeah and that’s the cool thing about having these community and network of nice people yeah because my experience with EO has been they’ve been like the the the frequency of nice people’s just extremely high right because you have to be more helpful and and and open and and and uh
(1:22:26) want to be so I was actually going to join a different uh different organization which I won’t mention uh nothing bad about them but they are more of a like a coaching strict kind of let’s get you to the next level but for me I wanted to be part of a community MH right because it’s uh it’s harder and harder to find people that are driven that have achieved something and that can that you can kind of collaborate with B ideas off mhm yeah and and then everyone’s been screened because to be part of EO you have to have a you a
(1:23:01) million dollars US Revenue right right so then they’ they’ve achieved something right and and again my my experience is people are really nice so and we don’t you don’t always find that everywhere you go it’s a unique Community it’s a unique Community I I would say it’s just uh because sometimes we and with our friends feel like a little bit of an odd ball because you’re doing all this stuff and then being driven and then coming up with new ideas all the time and then in that kind of environment everybody’s everybody’s
(1:23:35) kind of coming up with new ideas everybody’s talking about what they’ve done to develop themselves and then and then at the same time are super helpful too MH so uh no definitely an awesome Community yeah it’s been fun what a gem no and then you’re in the we call it Forum but outside people call it Mastermind groups and you’re in The Mastermind group form with my wife yes yes that’s that’s been very helpful it’s been uh it’s it’s a Greek group yeah yeah absolutely there’s nothing like people selflessly helping each other
(1:24:07) bonding and forming friendships yeah watch over for her when she’s when you guys are in Miami okay we’ll do amazing any final thoughts you want to share anything we haven’t covered uh you know what um uh I would say is um cold plunge real estate cold plunge I love cold plunging so I discovered it in U during Co and it’s uh I’ve read I I took a course and I read a book by this guy Wim Hof whof whof this crazy old guy but but it seems like he’s uh he’s special man I don’t know how he does it he’s in human yeah it’s it’s it’s kind of weird but I
(1:24:52) there seems to be science around it that is good the cardiovascular system um and you feel good and feels like oh it’s just a such an Euphoria when you leave the water and then there’s just this crazy energy around it it’s like you’re you’re high on your own dopamine it’s uh it’s pretty it’s pretty amazing feeling so I do it um one for health reasons but keep in mind you only need to cold plune for up to 2 minutes which sounds crazy but you can do it work your way up to it this is a medical advice folks you probably want to do
(1:25:27) this under supervision the first few times talk to your doctor whatever but I I try to always push the boundaries right because to see if I can stay longer and it’s more of a like a mental and I’m thinking sometimes like I take cold shower like I haven’t taken a hot shower um unless I’m sick in about 3 years and when I take that cold shower every morning I’m thinking if I can do this I can do any anything M so it’s more of a pickup I would say to to the day yeah so it’s part of my kind of workout Health routine cold
(1:26:03) plunging amazing continuously I imagine you’re doing this under supervision as well if you’re testing your limits like you can’t just pass out Lake Ontario Oh no no we do it in groups groups of people go it’s it’s all like a good environment where people have done it for for longer period of time so so no no no no just don’t go out start swimming in the middle middle of lake onario in the winter no if you want to look up like anything else you wanted to cover is before I throw a c plunging any final words I would say you
(1:26:35) know what what I hear a lot um from Real Estate in from from uh I guess working professionals you know what like I hate my job and then I’m in between jobs or whatever I can always do real estate um real estate especially at a bigger level it’s not not easy so it’s not easier than your job I actually think it’s a lot harder because there are more risks and such and if you do math you’ll know you’ll find it you’ll find out so so it seems like that the shows they made it there is like romance around it uh around real estate around flipping
(1:27:15) there’s no romance being a landlord sorry but it becomes I would say if you don’t like it it becomes old pretty fast so so thinking about like if you’re thinking about real estate investing to what degree do you want to get into it and why right is it to save up for a retirement is it to save up for your income but remember it’s not uh like I mean if it was easy everybody would own thousands of units but it’s not so um so putting aside the ego and saying no the number of units is just a number um but what I currently need and
(1:27:54) do I love to do in my life and what real estate what is it what role is it going to play in my life CU you want to be happy right that’s at end of the day everybody wants to be happy but if you’re let’s say doing something where you’re miserable then figure out another way to incorporate into into your life or not so don’t treat it as a as like an escape be conscious of because I hear this all the time oh you know what I don’t like my business I could always do real estate I heard flips are good God where did they learn that from not this
(1:28:33) show so so get into real estate it’s it’s amazing I mean so many people made money into and real estate I mean people don’t know but Arnold schwarzeneger I heard him speak and he he made when he was bodybuilding he was saving every money to every every dime to buy real estate and then that’s how actually how he got rich so he could choose the roles wisely and build his career as an actor to have choices yeah yeah he mentions it in that Netflix special on Arnold it’s actually really good have you seen it yeah SE yeah so I highly recommend
(1:29:09) everyone to do it because yeah like you said because he had cash flow he didn’t have to do roles he didn’t want to do where he was being like inappropriate roles or whatever yeah right so he could he could be choosy and you know whenever you’re whenever you have strength in negotiation that’s generally a good thing who who would say no to that to have strength in negotiation and look he wanted to build a life that he he liked yeah which was to be a Hollywood leading man yeah yeah yeah so that’s what I kind of encourage the audience to do too is
(1:29:39) think about how do I want to design the life and then does Real Estate fit into it and then how right versus the other way around I’m escaping from my job because I Hate My Boss he’s a you know whatever and I just I’m going to get into flipping and buy a yacht yeah yeah because the yacht will fix all your happiness issues right you have a yacht you have a Lambo don’t you screw the overhead no I don’t have a I leave I live simply I have everything I need in my life right now I don’t I don’t have a lot of stuff it’s
(1:30:13) just not my thing and then where can uh where can people I see there’s a schedule a call on your website so sorry for listeners benefit we have Mike’s website in our background M yeah Mike beard. C the best place and it that has link to all our uh like uh uh social media handles and and then such and but when they click schedule a call who do they get they get your cell phone or any time of the day or they get a form I would love to take and give people advice but uh there’s only so much time I have so no now going forward
(1:30:49) just tell people listen to the show but but definitely no do check out uh the website I have some educational material and such and then and then also info around the Investments we’re uh we’re doing now and then upcoming exciting stuff we’re doing in Alberta is any of that on the website right now uh the Alberta stuff no not yet okay and then uh can people find like past deals or something like definitely yeah past deals uh check out uh YouTube there’s a lot of uh I’ve been doing like hundreds of videos around educational for Real
(1:31:22) Estate mostly less specific stuff but more what I like kind of mindset how to kind of break through and then form your own journey into real estate investing and and apartment deals why they make sense Too part of it makes me makes me a real estate investor because I’m so scared because I I read a lot I’m familiar with economic collapses you know so then you know what are you doing to prepare yourself for these things and even more simply like the government keeps printing money like crazy I think I just saw uh the
(1:31:53) government created more over 5% more money in the last 12 months wow right so but this is experience talking because you’ve gone through Cycles you’ve done stuff that’s kind of hurt you a little bit and then benefited you so so you’re just a wiser investor right but I’ll even just say like uh like everyone’s experiencing inflation is anyone happy with where inflation is right now so the natural questions are how do I protect myself from inflation and then spoiler alert everything directs you to assets so pick
(1:32:27) one whichever one you want right yeah go out and buy TVs M’s joking fol don’t do it CU When you mentioned that I remember like like just for my age like I remember when when Grease was falling apart economically and people were running out buying everything that could in the Apple Store and appliances like stoves microwaves laundry machines it’s crazy they’re trying to get rid of their C their drma I Greek I think that’s the currency they’re trying to get rid of their currency into something that they could resell yeah cuz they couldn’t res
(1:33:05) because they didn’t were confident reselling their currency their own that’s what that’s what they did in communist Poland that’s exactly what they did but we just went there a couple months ago it feels like such a Western Country they’ve gone up and up and up and up and and it’s just uh you know what if I didn’t have family here or Investments business probably move there my point though is where I’m getting is like you know like that happened in Greece I’m pretty sure they’re first world country yeah right and so you know
(1:33:35) for me naturally like who how do I prevent this and like you know I’d rather much rather have gold than a laundry machine or an Apple iPad as my hard asset yeah right course right the course right or even Bitcoin again not getting into device but for large sums of money how does Real Estate not make sense yeah especially if you have a tenant like if it’s your own house nobody pays you rent it’s different but if you have a cash flowing property m i mean you make money so many different ways uh it’s a definitely a
(1:34:14) blessing and if real estate dips by 10% and goes up two years before that goes up by 40% please don’t cry okay it’s it’s like that uh that you know like uh we’re recording this uh today’s uh April 15th like just last week how like how like the Japan real estate market and currency just blipped right and dropped uh like I think that stock market dropped like eight or 10% one day did nothing to my real estate portfolio my real estate portfolio didn’t blink you know what I I get this Canadians are so used to real estate
(1:34:51) going up and up and up and up and up continuously that that just they’re in shock if it goes down by 5 or 10% Like 5% even and then their stocks will jump and crypto will jump up and down like crazy but if real estate dips by 5% we’re like what what is happening in this world that leads the conversation it seems right among Canadians that’s what the first thing they talk about they don’t talk about Bitcoin dropping under 50,000 us they talk about real estate yeah yeah we have it too good it’s too stable and that’s why foreign keeps
(1:35:24) coming here yeah all right one last time Mike be.ca um thanks Mike thanks so much for coming in doing thanks for having me no absolutely I’ve been looking forward to this was amazing thanks so much thanks so much 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.
(1:35:54) 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 training.com

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

On Spotify: https://open.spotify.com/show/6Z8yd37AQfQI5DK0J0Xwzz

Amazon Music:https://music.amazon.ca/podcasts/40fe627d-dec7-4f5d-b7e5-90a550fffe46/the-truth-about-real-estate-investing-for-canadians

Audible:https://www.audible.ca/podcast/The-Truth-About-Real-Estate-Investing-for-Canadians/B08JJS91WR

Youtube: https://youtu.be/HrDl_LhaARM