**Transcripts are auto-generated.

 

Erwin  

Eighty fuor units, apartment units worth $14 million with no partners, no joint venture partners. Still, of course, that was some serious fast growth, leading to deleveraging having to get rid of some properties that had high mortgages high expensive mortgages with Kellan James Greetings my fellow Canadian real estate investors and realtors. This is the truth about real estate investing show for Canadians, the number 81 ranked pot business podcasts in the world per Apple iTunes, who knew a little podcasts that started from the guest room in my home office in my home interviewing successful entrepreneurs in the real estate investment industry, asking them about their strategies, tips, tricks, what works and didn’t work, getting to the details, the numbers telling it like it is, for example, best deals often come from like ugly properties, and especially today’s market. Today we have guest Colin James, he’s going to be sharing how, honestly how there’s very little operating cash flow in even in the apartment building investing space. We are not here to Candy Coat but real estate investing businesses are really like we’re not here to lie to you about the realities and challenges but rather than allow you the listener to leverage our collective experiences, so that you may learn from our guests and my own experiences from operating a real estate investment business of buying, renovating, refinancing repeating, sometimes it’s boring buy and hold. And eventually sometimes it’s selling income properties. Today, our guest is sharing his experiences and owning a portfolio of small apartment buildings in London, Ontario. Again, like I mentioned, he grew very quickly with our joint venture partners. So no outside capital or credit. But before we get into that, I want to say Happy Father’s Day to all the men out there who act like men and are good fathers to the children and grandchildren double Shut up to the single moms out there pulling double duty, you are amazing. And hope your children all spoiled you shout out to my own dad to will i will forever be grateful for for leaving the tropical climate of Hong Kong, where they’ve never seen snow. Hong Kong China, for those who don’t know, Hong Kong is very much like China these days. And I’m very thankful to have been raised in the Toronto area that pitch to my dad for coming to Canada coming to Toronto for a better opportunity. And which led to a pretty good great life for my brother and I being born Canadian is like winning the lottery. My daughter, our eldest child made me a lovely card with a handwritten note that was extremely thoughtful. My son, the youngest, who unfortunately inherited many of my worst traits, and he’s not the most thoughtful. He didn’t give me anything. It’s showing me at the driving range. His presence is present enough. He joined me at the driving range on Sunday morning, Father’s Day at 7am. So I get some balls he had some balls. I do find it hilarious how my daughter is extremely thoughtful and helpful. Just like my wife. My son only helps me around the house when asked to and when he comes home from school. When he enters the house. He leaves a trail from the door of in order you know one shoe and then the other shoe and a jacket and a hat, a backpack and lunch bag, water ball socks, etc. Again, he’s a lot like me, hence the reason we need a nanny actually golf thing. My son’s only seven so he’s not super patient, not patient enough to play nine holes with me with the old man. But we do enjoy our time together out in nature, doing something fun together. For the main event of Father’s Day. We hosted my brother’s family, my dad, my brothers in law’s for a pool party in our backyard and I smoked a ridiculous amount of meat. With Steve prices through the roof. And my love of smoked brisket. I finally tried smoking a whole 14 pound brisket from Costco. I made a homemade rub. I smoked the brisket on low from 10pm Saturday night till about 7am Sunday. I wrapped it and baked in another three hours on low. Let it rest for 30 minutes and served. My dad and brother are foodies. This is the brisket was as good as any restaurant and everyone was sent home with a doggie bag. Yeah, as you can guess 14 pounds of brisket goes a long way. Just guess what Jerry and I are having for lunch today. For those interested I’ve included a link in the show notes for a link to the recipe to how to smoke a brisket also share it to all the dads and parents who have invested or are planning to invest in real estate so their kids may actually afford a house. This market as I predicted years ago, maybe not predicted but I knew there was a risk of the risk that only the children of homeowners will be able to afford a home in this market. Preferably, you know, I think most parents want their kids to to buy a home near themselves. You know, quick story, one of my clients, their child, their partner is from the states and southern state and to ensure that that their child’s day local and that their grandchild would stay local. They bought them my house locally. That can only be done if you’ve you know made the right steps to prepare for this environment. Of course those with multiple smart income properties have set themselves up for properly for intergenerational wealth. I do say smart income properties as we know, not all income properties are built equally I give a presentation to some of Cherry’s accounting clients on the weekend on investment trends. One trend is with interest rates are currently high, based on like more recent history. It is I know on the big picture, they’re really not that high. But talk to some Canadians. I don’t think they’ll agree with that. They’re feeling the pain. So interest rates are expected to remain at these at the current rates for about 12 months or so. And we’ll see more sellers due to higher renewal rates, which, of course will be more expensive, and investors will be divesting what they no longer want to hold those holding preconstruction in small markets face the most challenges as demand in those markets are quite low. Many investors with single family homes including some condos and pre construction condos are selling or they’re considering selling due to negative cash flow. I know several condo investors who are bleeding over $1,000 a month per condo. Thankfully, our clients they own very, very few condos, I think I can count on both hands, how many condos my clients own for better income properties. So generally our clientele we do over 350 clients who generally the vast majority of our clients own houses on land, so they’re good, very good financial position. Some are even selling those single family homes to pay down personal debts, or even rotate that capital into something that can be a small multifamily. If you one of our 17 listeners is considering selling please do consider my team and I to help. I’ve been a licenced realtor since 2010. That’s a long time. I have all the grey hair to prove it. Our team has one realtor the year four times and 2022 our listings so the properties that we sold on represented our clients to sell. We sold them for 19% higher than comparable properties. largely thanks to a lot of hard work hustle and our commitment to excellence. If you’re interested email us at Iwan wi n at infinity Well, that’s ca again, it’s I went at infinity wealth.ca And one of my coaches or myself will get back to you. For those looking to begin their RESPA journey to invest need to own so the timing couldn’t be better to be a buyer. Motivated sellers are coming online. And we probably have about a 12 month window to that first interest rate cut, and all the buyers sitting on the sidelines. Well, you better believe an interest rate cut will trigger many of them to reenter the market, and then we’ll start seeing a more significant next leg up in the real estate prices. If you’re looking for a professional service provider who can help you maximise returns on your investments, time and effort. We can show you how at our next free training webinar, or one of our I would mastermind tours where we go on site, very hands on learning or if you’re ready to rotate. If you’re ready to take action, just simply email us I wouldn’t at infinity wealth.ca our track record speaks for itself. For fun. I did look up what our product what properties our clients were invested in 10 years ago, their returns averaged 800% 800 800% return on investment over those 10 years on the income properties that we help them acquire past never predicts the future. But for the majority of our clients. We hear it I win real estate have helped them create a portfolio of income properties that will help them retire comfortably and help them retire more than any other pension or RSP or savings plan. And nothing can make you happier. It’s providing the same service to even more hard working time people who enjoy working with professionals like our team and invest in real estate as a side hustle. To the beginners out there you are more than welcome to reach it. That brings us to today’s guests Kevin James, who has was recommended for this podcast by my wife’s team at real estate tax tips. You see accountants like my wife, cherry or they know who the successful real estate investors are. They know who’s actually making money. Hence Kellen is our guest today, talent has successfully transitioned out of his corporate job. His timing for explosive growth of his portfolio is extremely well timed. It deals were profitable and well executed, including his more recent deleveraging stage of his consult by consulting his portfolio paying off those more expensive private mortgages to manage cashflow, Kellan shares how his journey started, which was not that long ago. Tom’s been at this for I think about a decade or so again, that’s pretty good timing. Same with the timing of his deleveraging. He mentioned he talks about his story how I started the importance of coaching early on, he stays in touch with a group of 13 real estate friends to support one another. Kellan shares how he proceeded to grow both his portfolio and coaching business to fast leading unfortunately to burnout. Thank you to Kellan, for being so honest. I may tell him on the show over a year ago, but I caught him during his social media blackout period as the end he had burnt out. So he was in recovery mode. And also he was focusing on fixing his portfolio up and he’s here today to share the ups and downs the realities of becoming a full time real estate investor. You can follow Kellan at Kevin james.ca or on his Instagram Kellen dot James so please enjoy a truth about real estate investing show. John what’s keeping you busy these days? Hey, yeah,

 

Kellan  

just this last while I’ve been just in a stabilisation period with my portfolio so I’ve had like in 2021, I actually sold five buildings which was 15 units, and then I bought 51. So I kind of transitioned from some smaller multifamily is like two to four units. And I kind of got more into some of the apartment buildings. So you know this last while I’ve been doing a lot of turnovers and you know, stabilising the portfolio, you know, when you do that many acquisitions at the same time, there’s a lot to be. Yeah, there’s a lot to be stabilised at that point, a lot, a lot of units, the turnover and get rents up and just like kind of build that foundation, before I build the building any taller. You know,

 

Erwin  

can you give us an example of like a, can you walk us through some of the numbers on the recent acquisition?

 

Kellan  

Yeah, there was one that went really well, it ended up being one of my best burrs ever, probably my best. It was a just gonna be off the top of my head. But I bought an eight Plex, every so everything I own is in London, Ontario, at this point at 83 units solely owned no joint venture partners. And this eight Plex I picked up in late I think was late 2021. And it was a seller that I had been in contact with off market for six months trying to convince them to sell it to me off market, I bought another eight Plex off of them off market. Well, this is this could be public knowledge, really, this was the safe and family this is Ed group. So they owned tonnes of properties in London. So I was in touch with him off market trying to get deals done, I got one done off market with them. And they decided, well, they got in touch with the broker and the broker said, let’s let’s put all of this on the market and see what happens. So after a lot of back and forth, they decided they’re gonna hit the market, this eight Plex, they listed it extremely low. And yet, for some reason, while I know the reasons, but there was just not much interest in it, they listed that kind of flooded the market all at once with all these buildings. So anyone who was in that space, the medium size apartment buildings, you know, like six to 24 unit type stuff, they had already kind of picked through some of the other buildings, and this eight Plex was sitting there. And they didn’t have any photos. And it said bulk metering. So didn’t you didn’t think that there was any separate metres. And so I took a look at it, it was actually right across the street from one of the other triplexes. And they listed this eight Plex for 750, which in London is already an incredible price. But I put an offer in for 600. And they just accepted it, there was no back and forth. And it was actually because I’d already bought a couple other buildings from them. So they knew I was a legitimate buyer, they were kind of at their wit’s end with trying to sell something like 1000 units or something ridiculous in London. So this was one of the remaining ones they wanted to just get rid of. And for brokers like this, the legitimate buyer, let’s just take this deal, I worked directly with the listing agent. So maybe there was some, you know, double ending incentive there. And they accepted my offer for 600. So, you can imagine in London, you know, two and 1000 unit is not rare, you know, 200,000 plus a unit is quite common. So I bought it for you know, unwell under 100,000. And we actually ended up paying, so it came with two vacant units. It was all it was nine separate hydro metres, which none of the the listing didn’t have any of this information. And it’s a 100 foot by 200 foot lot pretty close to downtown. It’s in a rougher neighbourhood. It’s in Soho, in London material, but a huge lot with maybe some development potential as well. And I ended up getting all eight units vacant to the units were already vacant. And the other six we did Cash for Keys, I’d had to do quite a bit of Cash for Keys. Some of them I paid upwards of 10 grand, there was a couple of people I’d pay 10 grand, some of the others were a little bit less, but towards the end, you know, the people that are kind of sticking around for a while, paid a little more. And so we had all units vacant. We were only getting there we put them was a massive renovation, you know, probably upwards. It was well, I mean, we’ll see when my taxes are completed. I haven’t added it all up, but it’s something probably upwards of maybe 400,000 and Renault’s new metal roof and all the units renovated and they’re all one bedroom apartments. So we ended up getting them all fully rented at market rent. I think we got like 1250 For most of them and I think 1150 For the basement one beds, all plus hydro. And it reappraised at 1.75. So that was in Vermillion, and it got got to replace the 1.75. So I was super happy about that. And, you know, this was right in the middle of when interest rates and stuff were all getting really starting to get pretty high and loan devalues on refinances started to suck. But luckily, even with this one, I think I got a 55% loan to value on the refinance just because they’re just being so stingy with mortgages. And this is what the credit union and it’s still perfect for even a 55% loan to value. So I’m super happy with how that project worked out. Now it’s got you know, eight good tenants. And we’re actually in the process of doing a pre application with the city because this law is huge. There’s a it’s almost like a soccer field in the backyard says huge grass field. And we have a pre application into maybe build a 12 Plex on the grass on the land behind the property without having to tear down the eight Plex. So we’ll see all that goes, it’s an extremely early stages, but it could turn out to be my best deal ever. Especially with some decent sides to it, you know,

 

Erwin  

much to unpack. Yeah. Because culture is about real estate investing. So I have trouble with filtering myself, but sounds like the agent. Did you a favour? Seller?

 

Kellan  

Well, I mean, yeah, I worked with them quite a bit. Counter this took it, they just took it. Yeah, they were like, This is a legitimate buyer, you know, he’s bought a couple other buildings from you guys. Already, you guys should just take it. And I mean, I added it up. And I think the portfolio that I bought, like, I bought an eight unit 20, about two, eight plexes, a 24 unit and 11 unit all off of the same people, same broker, and I think it was, like 80 grand in commissions or something just from my, just the 2%, or whatever, you know, and that was when I went man, like, you know, should you call the listing agent? Should you use your own gate? You know, your own agent, should you get your realtor licence to get that $80,000 Check yourself for these acquisitions. Like, you know, it’s a bit of a debate back and forth. But, you know, sometimes it helps, I think, to work directly with the listing agent, but I know that’s a grey area. But luckily, I’m not a realtor, so I can talk about it.

 

Erwin  

That’s the thing as well, because being a realtor, you get really handcuffed a lot of things.

 

Kellan  

Yeah, yeah, exactly. I’ve specifically knocked my realtor licence over the years, you know, when you’re, when you’re trying to buy stuff off market having to disclose the realtor and people get all the stuff, oh, they’re going to take advantage and I like to just be a buyer, you know, oh, I’m looking to buy a house, you know, looking to buy an investment property. Like, they don’t feel like they’re being taken advantage of. Whereas if you’re a realtor, all of a sudden, they feel that way. So let’s get their backs up. Because yeah, yeah, exactly. I think

 

Erwin  

Realtors down there with used car salesmen in terms of in politicians, in terms of trust.

 

Kellan  

Yeah, yeah, exactly. Trust is not there. So that’s a huge part of it. You know, if I’m dealing with people, it’s nice to just say, I’m just a grassroots investor, like, you know, just trying to buy an investment property or whatever. And, you know, I was never big into wholesaling, I’ve done a couple of wholesales over the years, you know, when I find a deal, it’s just not for me pass it along to fellow investor. But same thing there, you know, like, your wholesaler, you know, that’s why you see a lot of wholesale company, or wholesale businesses are having a realtor on board, but not the one that’s doing the negotiations, necessarily, people getting in all sorts of grey areas, but I just like to, I like to not be a realtor as of now. Although, like, I look at my portfolio and go, Man, at some point, 20 years now, I’m probably going to sell this and kind of nice to get the commission checks on the sales of this entire portfolio, because my portfolio is over 13 million as of today. So the commission check would be, it’d be nice to pay myself.

 

Erwin  

Do you think you’ll actually divest your portfolio, and my plan is

 

Kellan  

to hold for 20 years, like, no one ever knows what 20 years holds? But yeah, I’ve never thought about the idea of passing it on to kids and stuff like that, who knows what that’ll look like? I really don’t think I can plan that far ahead. But I think that the reality is probably at some point, I would sell things off. I’ve seen what it looks like when people try to pass properties down the properties. The Zed group stuff was a decent example that I bought a lot of their stuff and, you know, the the original founders of the company, and like the son like they were running the business, and then it sort of, you know, once they passed away, things weren’t really being managed the way they should have been. And I don’t know, not really a lot to be said, for your legacy for your legacy. If it’s if things just get rundown once you’re once you’re gone, right. So I kind of like the idea of bringing buildings to their best use holding on to them maintaining Well, for a long time, and with the idea that at some point, probably I probably would let things go. You know, at that point, I’m sure there’d be millions dollars in capital gains tax to pay, but it’s, it’d be totally worth it. Because the exactly at that point, it’s irrelevant.

 

Erwin  

Just a pin VTV. And yeah, spread out.

 

Kellan  

Yeah, exactly. If I’m still well connected in the space 20 years from now, then there’s probably plenty of investors that could do some kind of creative financing with like that, and find some woodwinds. So, yeah, it’d

 

Erwin  

be funny. Like, I want to VTV whoever’s my turn. Yeah,

 

Kellan  

I’ve had sellers that I’ve tried to buy properties off of they’re like, I want to do a b2b. Like I explained it to them. Oh, that sounds good. Like, I definitely want to do that. And like you understand, like, they’re like, and I’ve had some like, we want it to be interest only, like, we want to know that every every penny of the payment is interest. Like, there’s no principal paid out and like, perfect. That’s what I want to write. Yeah.

 

Erwin  

What kind of terms have you seen for btvs.

 

Kellan  

So it’s funny, I’ve actually never done a VTB, which is kind of crazy, because I’ve negotiated quite a few and then just didn’t end up taking on the deals are passed along to somebody else. But so I’m not even too familiar recently. But I generally like to do interest only, like, if I was to do b2b, I’d want it to be interest only, I would want it to be with a lower down payment than what I’d get. If I were to go to a bank or credit union, those two things would be enough for me to justify, you know, going to the b2b versus going to the bank. But to be honest, like rarely have I found the b2b terms, at least in first position b2b terms for them to be better than what I’d get at a bank anyway, so a lot of times I just go with a bank, especially like the first 10 properties, so it’s just the I’m with Scotia Bank and the rates are super low. And it’s like, why would I go elsewhere you know, and then like, what second position stuff you can get pretty quickly. And like, as an investor, if you want, generally you can borrow as much money as you want, you can get as high leverage as you’d like to and, you know, we tend to glorify and, you know, a lot of people tend to glorify in the space, raising capital. But I feel like raising capital is something that is almost the default, and you kind of need to stop yourself from raising capital. So, you know, when it comes to like, getting a bunch of second position V TVs and things like that, like, you know, at some point, we need to say, like, how leveraged do we want to be and how exposed to the market do we want to be like, we all want to have some degree of exposure, and we want to, we want to ride the market as it goes up over the long term. But like, we have to understand that when market goes down, that we’re riding it all the same. And the more leveraged we are, the more we’re affected by in either direction. So I’d like to maintain somewhat reasonable loan devalues in my portfolio. And, you know, if I take on too many btvs, and second position stuff, and private loans, and too much of that you can get things can get out of hand pretty quickly.

 

Erwin  

Right? So for the dealer, we’re discussing, like you mentioned that the credit union give you 55% loan to value. So you have Are there any other types of this property?

 

Kellan  

No, I still just have it at 55% loan to value moved on. I mean, I could bring it to CMHC, or something, there’d be a tonne of capital to pull out if I were to do something like that. But I like to have some degree of like, safety net in my portfolio. I alluded to it earlier, but I liked the idea that, like if you’re building a tall building, you build the foundation differently. And so I’m really trying to build a large portfolio over a long period of time. And for me, I needed to have a nice solid foundation. So I could scale faster, but then end up with a Tippy build tipsy building. So that’s sort of been my mentality. It’s a lot of also I invest with no joint venture partners and, you know, just have full control over things I can choose when I want to, if I need to sell something, or what type of renovations I want to do. And, you know, I don’t ever feel like there’s no shotgun clauses or anything where all of a sudden, we need to, like, you need to buy it, or I need to buy it, or we need to sell it or I just I like to know that I can think long term with all of my decisions.

 

Erwin  

Yeah. That’s pretty cool. Because I literally spoke to an investor last week, who took a course in the course they were instructed to use their personal lines of credit to finance the renovations. Yeah, yeah. I mean, that’s like the opposite of what you’re talking about.

 

Kellan  

Like, I’ll be honest, I’ve done that myself. Like, I have personal lines of credit, you know, you get like a $20,000 line of credit with TD or Scotia. And like, you know, if you if you have some degree of predictability with the Burr and you see the ARV is there like, I don’t think personally, I’d be okay with leveraging, temporarily leveraging like that. But there has to be a very clear exit plan, you know, like, the plan isn’t ever isn’t to hold those lines of credit maxed out for years, right. So I’ve done a decent amount of that. And I mean, I’ve done like private loans and stuff, I’ve done the promissory note stuff, you know, but like, I’ve also learned a lot of lessons in that space, we’ve seen a lot of examples where that can get out of hand. And you know, about a year ago, even myself, I went, you know, like these loan devalues and getting on the reef eyes aren’t what I wanted them to be. So I don’t have as much as I’d expected to have had to pay out these private loans. And then I went, well, this doesn’t. This doesn’t play out Well, long term. And it doesn’t play out well at scale. I mean, actually, it could play a Well, long term, you know, you can always borrow more, borrow from Peter to pay Paul and that sort of thing, but, and ride it out and wait for the market to save you. But I’ve never been the type to do that. So, you know, that was why even myself the last this last year, I did all the refunds I could and then I sold a couple I sold a duplex and a triplex. And I took I don’t know, hundreds of 1000s and I just paid off private loans. And I just wanted to just be in a place where I’m never like, oh, the news came out, and it’s gonna affect how my life looks now. Like, no, I want to, I want to know that I’m in a place where things can happen. And I’m fine, you know. And so, this last while has been like Id leveraged and I’ve been stabilising, because I don’t know, I just I wasn’t comfortable with where, with how things look at 567 percent interest on these mortgages and additional private loans on top of it. So yeah, just like D leveraged and kind of got my myself back into a safe position, or what I consider to be safe. I’m a relatively conservative investor. So yeah,

 

Erwin  

seems that we’re there’s few of us out there. Yeah, at least what you see on social media.

 

Kellan  

Yeah, I mean, well, people see like myself, like, you know, in my first two and a half years, I went so I could tell my story, I guess from the beginning. So you know, I did computer science in school, paid my way through school myself. I lived at home, but I paid for my school. And then I worked for five years. I graduated in 2012. And then in 20, well, I guess, in 2016, late 2016, I bought my first duplex, I’d saved up 120,000 including my RRSPs and all that stuff and just live super frugally. I didn’t even I sold my car and walked to work and saved every penny I could and took the 120 Grand and I actually pulled money out of my RSP using the homebuyers plan, and I bought the place to 5% down and look for Free and then kind of moved on to the next birth project from there and everything after that was 20% down Scotiabank. And in two and a half years, they got to 10 properties, 32 units. So that was fast scaling, right. So a lot of people see that and want to sort of emulate that. But you have to get some unicorn deals to scale at that rate, especially without partners, things need to like, be really good birds, you’re getting all your money back and more things like that, you know, because otherwise you run out of money and, and then the only way to buy the next deal is to bring on a partner or borrow a bunch of money. And I didn’t want to do that. So I’ve always been focused on maintaining momentum of my own money. So everyone talks about your other people’s money, I like to talk about your own money, because I feel like that’s way to scale safely. And it kind of forces you to do better deals, because if the deals are good, then you get your own money, you get all your money out what why would you involve a partner and you know, it’s just going to be the same amount of work for half the result? Or are you going to do twice the number of deals for the exact same result. Or if you have two partners, you’re going to do three times the number of deals, you know, and like at this point, I’d rather own my 83 units than like 166 units with a partner 100 times over. And I’d rather have the situation I’ve built. So it’s just nice to know that, you know, if I have decisions to make in my portfolio that I don’t need to run them by anybody. And I can trust that, well, any of the results that I do get are my own and any mistakes that I make, I have to take the consequences. So it’s just full accountability. And you can sort of build in like that sense of partnership with your property management team, and with your GC and things like that I actually feel a lot of that good vibes that you get from partnerships are a good partnership without the equity stake, you know, I have that with my property managers, they want to turn units over to you know, and they want to get rents up, they’re gonna get paid more as well. And, you know, they’re in this for the long term with me, so it’s really just, yeah, exactly. For sure. Yeah. So these are the Phil less words. Yeah, I got a text from my property manager just yesterday, like, what do you buy in the next like, crazy building? Because I buy a lot of crappy buildings and make them nice, right? So it’s just like, it’s awesome to have that, like, you know, they’re on the same team, but they’re making money in their own way. And they don’t have to, it doesn’t have to be in the form of equity on my properties, you know?

 

Erwin  

So that’s what people need to remember. There’s partners that we can hire. Yeah, exactly. And pay a wage to we don’t have to give up equity necessarily. Exactly. Yeah, that’s what I say to my clients all the time, like, oh, JV with this person, like, you know, he can hire a really good property manager.

 

Kellan  

Yeah. Or like, oh, I have a friend, that’s a contractor. There’ll be my partner on this deal. So you can hire contractors.

 

Erwin  

Literally tell it to somebody, they’re really good. Hey, why not just hire them?

 

Kellan  

Well, they really like an equity stake in the building. I wonder why like, I was like, for my like, first few years before I like, kind of branded myself I suppose the guy who invested out partners because I did a talk at on Ria, Sean Allen’s event, Sean element, info drinks event? Well, some years back, Matthew Shay was there talking about building a portfolio joint venture partners. And then I went up and talked about building a portfolio without joint venture partners. And I was just I that was because I was like, Well, what am I going to talk with? It’s got to be something different than what everyone’s talking about. Everyone’s talking about burning. It’s like, well, I’m going to talk about this. And I realised it kind of stuck after that. And a lot of people resonated with the idea of it. I always thought it was the default, right? I always thought that’s how people build portfolios, isn’t it? But then, you know, I realised ended up becoming a niche, I suppose. I’d never would have considered building your own portfolio and each

 

Erwin  

have a question I’m gonna guess no one’s asked you. So that’s, no one gets our questions in advance. Because I didn’t know I was gonna ask you this. How many you’ve recorded properties you think you have in your portfolio pass?

 

Kellan  

It’s a good question. My second property I ever bought was a unicorn, I paid 127,000 for a duplex. And within four months, I had to replace the 250. I was only in for 150. And it was re appraised at 250. I have a six Plex that I bought for 365. This was years ago, as well. But even still, at the time, a six Plex would have been worth I don’t know, like, at least double that, you know, but it was a crack house. Like it really needed a lot of work. For lack of a better word. I mean, there were people like cooking on spoons on the stove. So

 

Erwin  

I’ll assume that’s crack. I have no idea. So basically, the listener can let us know if that was crack or not or something else.

 

Kellan  

Let me think this eight Plex, I think was a bit of a unicorn, I would say that I just did. Oh, yeah. I think that’d be varying degrees of what people consider a unicorn. Like, I would say that like 70% of my deals, if anyone saw them, they would have done like, so that’s probably a decent I don’t

 

Erwin  

know, I don’t know people. Many people could walk into a crack house and say I’m buying this.

 

Kellan  

Yeah, true. Maybe that one wouldn’t be Yeah, that one’s maybe not a good example, there was a triplex I bought for 147 and reappraised at 400. Not long after, but I’d put about 100 into that one. But I suppose if people saw what these properties could become, and what they are now, and they’re willing put the work in. Yeah, like, I think then at that point anyone would do it. Yeah, I’m trying to think like,

 

Erwin  

Let’s go stay on this triplex. What was the story there? What made it wasn’t an ugly property?

 

Kellan  

super ugly. It looks like a shack. They listed it for 150. And again, I don’t know how or no, sorry, they listed it. I don’t know one. I don’t remember maybe 170 or something like that. And I went in at one. I ended up getting for 147. I know people that walked through it. And then when they found out that I bought it for that price, they were like, oh my god, like That’s so cheap. I didn’t know that. can negotiate it like that. But it was it looked horrible from the outside. It had like wood siding, and I don’t know it was awful looking

 

Erwin  

at what side is not treated if not cared for. That would What does not do well over yours.

 

Kellan  

No, exactly. And it had like Joyce, like the Joyce. We’re all like bowing and stuff like it was it was really, really rough in the basement. And it didn’t have a lot of parking as well. It only had a couple of Pardons two parking spaces for three units, which isn’t ideal. But yeah, I went in, I asked the seller, can you provide vacant possession, they said no. But we can ask the tenants if they want to move. And they just put in a letter and said, you know, the new owner was asking if this unit can be vacant on the closing date. And it wasn’t like a landlord tenant form, or anything like that. It was just a request. And two of the units were vacant on closing. And then the third unit, the tenant was out a month later, because they were just in the process of moving. So I think that was a bit of a unicorn like I can’t believe I got it vacant without without any guarantee of it. So we put all new siding on it and a new roof and it looks really nice on the outside now and and I ended up buying the property across the street is the Plex I just referred to, it’s got all the parking in the world. So now we share parking with that building. So that was sort of a unicorn deal as well. I had a student rental once that I got a pretty good deal on it sat on the market for a while and think that it listed at like 300 or sorry, 300 at the time, and it was like it was a four bed and a four bed in the front and a Bachelor in the rear. And this was some years ago. So it wasn’t, it wasn’t like it was a pretty good price still. But I went in at 250. And then they were negotiating back and forth. And I just kept holding it to 50. And eventually they just accepted 250. And then I told people I got it for 250. And they went, how did you get that 250. It’s like, I negotiated on it. But it’s funny that property, they listed it I think at 275 250 and had a lot of people interested. And then they relisted it at 275 because they had too many people interested? And then no one was interested because they relisted too high. And then I still stuck at my 250 price. I think it’s something like that. Yeah.

 

Erwin  

So they’re gonna apologise to investors that were rehashing about the past that aren’t available today?

 

Kellan  

No, no. Yeah, I mean, if we can talk about, uh, you know, the Plex, again, I bought it late 2021. I mean, you know, a year, little, maybe a year and a half ago, it wasn’t that long. And that was 600 grand. So, like, there’s just been deals and deals over the years that, you know, people look back and they look at the price and go, That sounds completely ridiculous. But you can imagine, this eight Plex is a decent example of how I think anyone if they would have seen the potential in this property would have paid 600 grand for this eight Plex, you know, but it was sitting on the market staff for a month and no one bought it. I mean, I found unicorn deals both on and off market.

 

Erwin  

You asked me I was doing before this morning before this call. So I’ve already posted my new construction reconstruction. And of my portfolio I’ve only ever bought pre construction once. Yes, please. And this plays into the unicorn discussion. Right. I paid 275 for five bedroom student rental in Branford. Yeah, it does quite a few years ago now. And that property’s worth probably 600,000. No. Nice. Yeah, you know, I’m just thinking about my own portfolio. I think time has made a lot of my properties winners. I don’t know if anyone would call them everyone’s criteria for unicorn be different. But time has time has really helped out.

 

Kellan  

Oh 100%. I like to think of the unicorn deals of stuff that I got turned over and reappraised within four to 12 months, you know. So a lot of these like, like this second duplex took four months for me to bring it from the 127,000. I bought it at 25 in so I was in for a little over 150 and it retraced to 50. So that was four months. I’d like to think like for me, I’ve always focused on forcing appreciation. It’s the only thing we have control over. There’s a resonating theme in my portfolio, it’s all about everything that I’m trying to keep within my control, no partners and all that. So the unicorn deals that I liked are the ones that really made sense within four to 12 months, but everything turned into a unicorn when the market did what it did. But you know, it’s nice that like the market went up as much as it did in say 2020 And it’s dropped a decent amount this last file but nowhere near when it went up so well things are still extremely unaffordable for people trying to buy on paper people seem to be still doing alright, equity wise if they bought Well,

 

Erwin  

actually, it leads me to a good question. I think it’s a good question is I’m just naturally curious. Like to take the earplugs. For example. How did you find capitalise it. Like where the downpayment come from? We’re using, we’re using as a source of refi money as cash.

 

Kellan  

You know, at that time I bought the 51 units, right? So it was a combination of refinance funds and problem notes. You know, I borrowed some money that was my lesson learned is I got to leverage during that time. And that’s why I talked about the de leveraging stage that I went through. So good lesson. But yeah, a combination of refinance funds and some borrowed funds for those 51 units that I acquired, because I bought a 24 unit that was over a million dollars downpayment. So without a partner, that’s, that’s crazy, crazy to come up with, but bought it with libro credit union, actually, it was so 25% down, and I had no problem appraising, I think appraised immediately for seven or 750, when I bought it for 600, so a lot of money was made on the buy. And then it reappraised set at 1.75, but only got 55% loan to value. So I could probably bring it to their other lenders now that I’ve found that would give me a better loan to value but I locked into the half, I think it got a 4.9 or something on the interest rate. So I might hang on to just that loan for a while. But there’s a lot of equity to still be pulled out of that property. And I would feel half decent about putting a second on it. Because I could put a second on it and bring it up to say like 70% loan to value, it’s still not over leveraged, you know, but just trying to make sure that I maintain that lesson learned this last while you can leverage and D leverage at the same time. And so I’ve been in the de leveraging stage. And so therefore, I haven’t been in an acquisition phase quite as much. I’m expecting to reenter one in about six to eight months. If all goes well, we’re just still on a Cash for Keys blitz turning units over, I’ve probably turned 20 units over in the last year and a half some. So just paying a lot of people to leave and turn the news over again rents up because that’s the most valuable thing we can do as investors and I think there’s a very strong case for candidates to be a country of renters in the long run, and there’s going to be a lot of tenants that will never leave. There’s plenty of tenants in my portfolio that will probably not leave no matter how much I pay them. And I think that that decision will become easier and easier for them as the years go on. It’s locked in at the rates they’re locked in at and who knows what happens. I’m not gonna get into politics, but who knows what happens with all that. So while we have the option to do what we’re doing, I’m going to continue.

 

Erwin  

No, we’re not allowed to compensate your 10 for leaving. Yeah, exactly. Yeah. So horribly giving the money.

 

Kellan  

Yeah. Well, I mean, I just I saw an NTP NDP proposal about like units staying at the rent that they were with the previous tenant no matter what. And I just couldn’t believe that that was even a proposal, you’d end up with a country where people never renovate the units, because they have no reason to, like the reason the rents go up is because we make the units nicer, but otherwise, they just get rundown. One common

 

Erwin  

about them up is that they have challenges raising money, wonder why money don’t want to give you money.

 

Kellan  

And I honestly, I really, I don’t follow politics almost at all. I haven’t read a news article. And I don’t follow any news, the closest I come to following any news is just whatever, maybe you share on Instagram or like a few other people. Right. But like, that’s basically it. I just I focus on what I have control over. And, man, yeah, news. And I mean, that was a part of like this, I went on the social media blackout there for over a year. And that was another part of it, right? It’s just choosing what my inputs are, you know, we all like to think that we can control what we think about and but at the end of the day, sort of the you’re the average of the five, so the five people you’re around, but also the five news sources, or the five, you know, sources of information, I don’t know, I tried to be pretty cautious about what I expose myself to so same with books and things, right, you can read a book read like the 48 Laws of Power, or 48 Laws of Power zones, and, you know, crazy book, it’s all about, like manipulating people and stuff, you know, you got to be careful what you expose yourself to, but at the same time, like there’s some degree of like, mental resilience, understanding that like, Oh, this is this, people like that out there. And this way I understand it. So there’s some combination, I suppose of like, exposing yourself to things but still maintaining conviction in your own in your own beliefs. But then, but then also, yeah, not going too crazy with it, you know, choosing what you want to expose yourself to.

 

Erwin  

If you have the appetite for it. I’d read your book of Influence by Robert Cialdini. Okay, yeah. Which is I’m pretty sure every influencer has read it.

 

Kellan  

Oh, I haven’t. What’s it called?

 

Erwin  

The book of Influence by Robert god of influence. I’ll send you the link in the listener, I’d recommend you listen, watch it too. Because every politician, every marketer, advertiser, every good influencer that I see on social media, and like they’ve read it, or whoever they’re learning from his read it because I see I see people using that playbook very well. Good to know. Yeah, good to recognise these things. I recognise it all the time. Yeah.

 

Kellan  

I mean, I think it’s similar to like, you read books on negotiation, and you go, Oh, I’ve been using those things. Right. And I think that people who tend to manipulate read these books and all perfect like that’s how I manipulate Like, I don’t know, like for someone like myself, I read I read this man like, I didn’t understand that this is how people’s minds work like 40 Laws of Power is like don’t outshine the master and things like that, right? Like, you’re, you’re learning from someone, don’t make yourself sound better than them. Because then all of a sudden, they’ll recognise that you might take try to take over their power. And, you know, like, You got to be careful, like, as an influencer to like the people reaching out to you, why are they reaching out and friends that are trying to be friendly? Why are they trying to be friendly, right? Like, luckily, I’m pretty good judge of character met a lot of people over the years and networked with a lot of people and I generally know who is worth interacting with. And you know, who I can learn from and who’s a genuine person now you can kind of get a drift to that pretty well these days.

 

Erwin  

And you live in London, so there’s lots of opportunity to connect with people. Yeah, yeah. There’s a lot of people of your generation that invest in live in London. I don’t know

 

Kellan  

how much of that we had an influence on. So like Matt McKeever was a mentor of mine, and early days, and we started London On Fire. We have people coming from all over, not just Ontario, but like we have people coming from the states and flying in like Western Canada, like there was, you know, myself, Jeff, why Beau MicroSTAR there was like, a bunch of influencers that were really, you know, became a hub London of all places. And there were no other meetups, at that time. Really no other like grassroots, I suppose, like, types of just networking events meet up once a month, like, so people were coming from all sorts of cities. And I think it really spawned something. Now, every city has a meet up and this sort of stuff. But there’s something about that. And it all, it all came from some random posts on BiggerPockets. In 2016, we all had alerts set for our city, because that’s how it worked on bigger pockets at the time. You know, if anyone mentions London, Ontario, you know, get you’ll get an alert. And few of us got that alert, because we had it set. And we had a meet up with myself, Jeff, why beau, Matt McKeever and a few other guys. And we started around meetup and kinda, I don’t know, I’m not I’m never really sure how much of an influence that we had over things. But we still a couple 1000 people in that group. And we’d like 50 people coming out every month. So and just a lot of social media stuff spawned off that. So kind of cool to see, I don’t I don’t know how much of an influence we had. But

 

Erwin  

those guys, you mentioned going different directions. So you still connected with them regularly? Yeah.

 

Kellan  

So like, to some degree, I mean, Matt and I aren’t as in touch as much this last while he definitely went a different direction, like he was getting into NF Ts and Bitcoin and stuff like that, and a lot of politics. So it was it just wasn’t what I was doing. So I just like, so we’re in touch occasionally. But he’s kind of doing his thing. I’m still in the real estate space. So I’m doing that I have like a group of 13 friends, we have like, chat together, we tend to do a lot of our parties and group hangouts and stuff together. Most of us are basically all of us are real estate investors or business people of some kind. And I’ve kind of found we found in our tribe, I suppose. And it’s neat, actually, three of us, three of the couples in that group are getting married this year. So yeah, so it’s gonna be a crazy year. But yeah, it’s so important to get those to get those people in, I don’t know, to like, have people that you trust around you that that are like, excited when you’re doing things, but also like reeling you back in if you get too crazy with something and just finding that healthy balance,

 

Erwin  

right? Because you mentioned like, you know, social media blackout.

 

Kellan  

Yeah.

 

Erwin  

Was there anything else going on? During your deleveraging stage, we’re just trying to focus in on

 

Kellan  

your business. So I started a coaching business that got big, faster than I wanted it to. And so I took on too many students, I took on a lot of real estate deals, I got burnt out, that was at that point, like five years of just six year, you know, just like full pedal to the metal. And I went back because I got burnt out. So I find, I think it’d be really healthy if I just stepped off of social media for a month was the plan.

 

Erwin  

Because you are a content creator. You’re creating content like Yeah,

 

Kellan  

yeah, just like, Yeah, mostly Instagram. But yeah, like sharing a lot of that stuff. I had some YouTube going on. And I was doing a lot of coaching calls every week. And I just went, you know, I need to take a break from a lot of this stuff. I’m going to continue scaling my portfolio doing my thing, but it’s take break. So took a month off and then went out and really feel it coming back and turned into over a year. And during that time we we did a lot of travel. We travelled with some friends. We then went to Norway for a few weeks. We went to Australia for a month in New Zealand for a couple of weeks. Costa Rica, Dominican, we did a one month van trip, we have a sprinter van, and we took this van and drove out to the eastern Canada for a month. So he’s doing a lot of travel and that kind of that sort of stuff during that time. So and then I only really came back on social media this last, I don’t know a few months, it’s kind of want to get back into stuff again. So

 

Erwin  

alright, but you’re there to you’re there to share content. You’re not consuming so much.

 

Kellan  

Exactly. Exactly. Yeah. The only content I consume is generally not a lot of real estate content. It’s just like comedy and whatever, you know, like philosophy, that sort of stuff. Like I love stoicism and stuff like that. So yeah, like content wise when it comes to real estate. I mean, it’s a challenge at this point. It sounds ridiculous. It sounds cocky, I suppose. But it’s a challenge to find people I can learn from. They’re out there. I’m actively trying to find them. And I have found some But, you know, social media is not a place that I can go really to learn for the most part at this point. So it’s not really a useful use of my time. So it’s all wonderful clip

 

Erwin  

of ride day on. On the Late Show. He’s summarise stoicism beautifully. I’ll flip it to you over Instagram.

 

Kellan  

Yeah, Ryan Holiday, right, I’ve read a bunch of his books, egos the enemy still misses the key obstacles the way I still needed to read discipline, his destiny. These have become like core philosophies. For me at this point. I do something where on the background on my phone, I have like a phrase or something that I really want to drill in. And like, once it becomes a core philosophy of mine, I put it on a Google doc where I have a list of my core philosophies. And I look back at those and like all of those things I live. That’s how I live my life now, like one of them for a while. It was like, you know, Warren Buffett said the difference between successful people and very successful people. Is that very successful people say no to almost everything. Buffett says no to lots. Yeah, exactly. Yeah. I mean, Tim Ferriss has said stuff similar. No Bitcoin

 

Erwin  

no gold. Yeah. Tim Ferriss note almost every deal.

 

Kellan  

Yeah, you have to, you have to and like, man, there’s a lot of there’s a lot of stuff to say no to out there, a lot of distractions, a lot of things preventing people from maintaining focus. So that’s a core philosophy of mine now. And it wasn’t like always, but there’s been a few others that I’ve added to that list over the years. And Alistair Moses got some stuff I really liked. So trying to drill some of those philosophies in right now as well.

 

Erwin  

Like, like the simple one, two, or hell yes or no?

 

Kellan  

Yeah, yeah. The hell yes. Yeah, that’s a good one. That was a hard one. I didn’t I didn’t fully agree with it. I don’t know. But I get it. I get the spirit of it. For sure.

 

Erwin  

So someone like yourself, I’m sure you’ve invited way too much stuff. We invited to invest in too much stuff. Yeah. Have you done a hell? Yes.

 

Kellan  

Exactly. And I think it’s like, I think these come in waves. I think we have times where we’re very busy times were a little where things are slower. And I think when times are busy, it’s time to say no to more. And when times are slower. It’s time to say yes to more, you know, people who are like, depressed or whatever out there. Like they probably, well, if unless they’re depressed, because they’re overworked, they’re depressed, because they don’t have enough going on in their lives or whatever. They need to start saying yes to more they need to go out to groups, and they need to, like, do new things and learn new things. And you know, get out of the house and stuff

 

Erwin  

be more of service. Yeah, right. Yeah. And we’re going to find that opportunity. If you’re feeling depress, go be more of service. Yeah, go volunteer at a charity

 

Kellan  

now requires saying yes to a few things, even if it doesn’t feel like a hell yes. So I think that it’s everyone needs a different message. I think people who are overworking up here need to hear the hell yes or no thing. So

 

Erwin  

we’ve covered a lot of real estate porn, as I call it. Because the one thing you want listeners to understand is that the deals that you did, especially like the last one you wouldn’t have done without your reputation. By fair,

 

Kellan  

right, right. Yeah, I think confidence in my ability is a big one. And then cash on hand refund money on here. Yeah, exactly. I mean, when you have a decent sized portfolio, at some point, momentum gets built in, you know, if you have, you know, 10 buildings, you know, you refinance property number 10, you go back to property number one, and then property number two, like there’s always some availability of equity that you can take and put toward the next deal. So, once you’ve kind of got that portfolio momentum built in,

 

Erwin  

so I want to talk to the new investor. So you mentioned that you mentor, you may have a mentor investors one on one. So what do you tell a new investor today?

 

Kellan  

Yeah, so what I always focus on is people forcing appreciation, because it’s the only thing we have control over. So, you know, the goal for many years was build a high cash flow portfolio, which is very difficult to do with current interest rates in a city that, that I feel comfortable in long term, right? There’s plenty of like little towns or whatever you can invest in might have high cash flow, but I personally don’t have any interest in owning 100 units in some random town, you know. So I think right now the sweet spot for new investors is going to be first off, one of the best ways to structure your first deal is with 5% down and using a purchase less improvements mortgage, it allows you to get a building that might need some work, but still get it with only 5% down and still have an also get the renovation money put into that. And then house hack. So yeah, say a duplex with 5% down Purchase Plus Improvements, I think is the best way to start. It also means that the deal doesn’t have to be quite as good because you’re able to utilise some some leverage and get a get a quality building and just break the ice.

 

Erwin  

Also, these people can’t buy a nightmare like you’ve been buying. Exactly. will not touch it.

 

Kellan  

Know Exactly, exactly. I think the next deals need to be significant value add though. So at that point, ideally, something with some degree of predictability. So hopefully a unit or two is vacant, or at least seems like the tenants might be willing to accept Cash for Keys some kind of predictability and very clear ability to add value and a reasonable conservative ARV, so that if you’re able to refinance, you don’t have to leave too much money in the deal. But I think that people need to realise if you’re doing it without partners, you don’t need to scale as fast. You can do half the number of deals. So if that’s one property You’re great, you know, over the next five, seven years, you buy five, seven properties, you’re doing just fine, you know, and each of those a duplex or triplex, you know, meanwhile, you’re for the first while you’re living quite frugally, and trying to save as much as you can put all that money into reinvesting in your portfolio. You know, you don’t have to be frugal forever. But I think frugality in the early stages is really important because every dollar matters so much more. That’s when you’re starting to compound, the compounding. So the more you start with, the larger the compounding effect is in the long run. So those early stages of people’s investing journey, live frugally house hack, first one 5%, down Purchase Plus Improvements, and then the ones after that good value add properties, you know, in a decent town with a decent population that you feel good about owning property for over the long run, and an exit strategy if needed. So ideally, try to buy under market value so that if you need to sell it, you can

 

Erwin  

do this. Alright, cool. Can I know we started late, it’s my fault. No, no worries. Thank you so much for your time. If you want to come in next time, we can deftly do it in person, because I’m sure would like to say hi and shoot a YouTube with you.

 

Kellan  

I’d be happy to anytime that sounds great. Oh,

 

Erwin  

we haven’t mentioned on the show yet. You are currently doing a group coaching programme for eight weeks,

 

Kellan  

is it? Yeah, I’m doing like an eight week group coaching mastermind. So it starts on May 30 2023. And every Tuesday night at 7pm for a couple of hours. It’s all me, like, you know, I’m gonna have some outside speakers, but it’s gonna be myself hosting it, walking through all of the all of the steps for you know, not just basics of burning, there’s going to be like beginner, intermediate and some advanced stuff, you know, scaling your portfolio, strategic renovations, creative financing all of that stuff. So, yeah, eight weeks, it’s on my website, Kellan james.ca. And that’s where I also do one on one mentorship, one on one mentorship, I have to value my time. So it’s quite expensive. It’s mostly for intermediate to advanced investors who are looking to scale their portfolio and optimise it, it’s a lot easier to help people in that space, right? It’s when someone’s got a few properties under their belt, you can have one call with them and save them 10 grand easily if you’re just like, oh, I work with this lender or use this, use this structure instead or whatever. So you can really provide good value to people who have portfolios to work with. So

 

Erwin  

yeah, yeah, I was talking to a novice investor who’s trying to do a triplex conversion. Yeah, he’s gonna do a walkthrough of the contractor. I’m like, why don’t you just check with the designer first effect property can be turned into a triplex? Yeah. waste your time, your time, the contractors time.

 

Kellan  

Yep, exactly. And then maybe that saves them a couple of weeks of their time, and they can put that towards some kind of better use

 

Erwin  

respect to the contractor. Exactly. Because I wasted all these hours, my time for a project that can’t be done. Yeah.

 

Kellan  

No, I mean, like, we’ve learned so many of these lessons over the years that it’s so easy to just be like, here’s what you should do, you know, here’s the best use of your time right now. And oh, you’re looking to make that decision, that’s a good one, or that’s not a good decision, I’m going to suggest you not do that. And instead, go do this, you know, and if you compound that over, like my mentorship, six months, and then there’s extensions from there, so like, if you compound that over 612 plus months, like you get some serious results with with the right guidance, but you need an unbiased third party, right? There’s very few people out there that you can get advice from that’s going to be unbiased. But that’s the whole point what to do is to just, like, look at people’s situations and go what is the best thing you can work on right now? And and have it so that they never have any questions? Because that’s, that’s exactly what I wanted when I was investing in early days is, you know, oh, I’d rather than ruminate and sit on wonder about this question for the next two weeks. I could just ask someone, they can answer it, and I can move on, you know, get a lot more done. Things move a lot faster.

 

Erwin  

That’s the unbiased the qualified opinions as well. I have a friend with a bit of a nightmare situation. They bought a property that has a ground floor, commercial space triplex for commercial. Right. So the product was reviewed. The mistake they made was that no one knew the area that well. So in fact, when the proper vacancy rate, yeah, that came across my desk, I would have said, automatic is gonna be 50% vacancy rate. Yep, exactly. Right. And that would have killed the deal.

 

Kellan  

Yeah, exactly. I always for mixed use, I generally say that the residential portion of building needs to support the building and the commercial can be vacant 100% of the time, and still, it still works. And that that works. You know, maybe that’s overly conservative but and that’s probably what stopped me from buying any mixed use properties.

 

Erwin  

If I showed you the property you don’t need to completely agree you probably tell me just 80% vacancy rate

 

Kellan  

Yeah, I’m not not a huge fan of mixed use although I know investors that do quite well. My one of my good friends John, Kepler has quite a bit of mixed use stuff. No one’s down so it can be done well or should

 

Erwin  

be done. Tell me where the area got into high demand area. If it isn’t.

 

Kellan  

Yeah, exactly. Yeah. Maybe like a plaza where you can get some chiropractors in there with recurring revenue and that sort of stuff. Yeah.

 

Erwin  

Yeah. My family’s telling and then you have social medias as well world.

 

Kellan  

Yeah, Instagram Kellen James and my website talent jas.ca Fabulous.

 

Erwin  

And any any final words weren’t a bit of a tricky market right now. Any any final words for anyone that’s listening?

 

Kellan  

Well, people need to people need to be honest about how it’s harder to invest in the market right now. You know, you don’t want to be listening to people who are saying it’s, you know, it’s, it’s just the same, it’s all the same. Just Just keep buying and whatever. You know, it’s not about the rah rah mentality. It’s make sure that you’re buying solid deals, make sure you’re forcing appreciation. Make sure you have exit strategies. Don’t get crazy over leveraged. These are some good lessons to learn how you know when debts cheap, take on more debt and when debts expenses, maybe pay off some of that debt. It’s it sounds like common sense, but you’d be surprised how rare that is.

 

Erwin  

Yeah. common sensical with a window when there’s dollar signs. People

 

Kellan  

Yes, yeah, and the wrong India exactly the wrong incentives, getting advice to people with the wrong incentives.

 

Erwin  

Tom, thanks so much for doing this.

 

Kellan  

No problem everyone thank you

 

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 signed up for my newsletter. Find out for yourself but 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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