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

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