**Transcripts are auto-generated.

 

Erwin  

Hello, welcome to cash flowing Windsor, Sudbury arson, leading to sleepless nights, putting corporate with 27 year old Boston. Welcome to the truth about real estate investing show for Canadians. My name is Erwin Szeto and I’ve been a real estate investor since 2005. licenced real estate since 2010, full time realtor of the year to investors. So I’ve personally invested through many, many good times and never have I seen so many bad times such a bad time as we are in today. Everyone’s experience is different, though. You know, like our guests, Allison, he’s doing quite well, yes, he’s had some challenges, obviously. And we’ll get into that mantra view. But there’s a lot of flippers speculators out there who are having the toughest time, even those who pose who bought pretty smart over the last three years, even they’re having some challenges. But generally, anyone who invested the longest, for example, if you’ve bought before 2020, you’re generally faring quite well. I spoken to listeners who are negative $1,000 or more negative cash flow, a lot of them are having invested in pre construction condos. And then I’ve even spoken to some burr investors, folks who have renovated, done significant renovations and then they refinance those properties, taking a lot of money out. And now they’re negative cash flow. Many people are selling to get their debt under control. And thankfully, we have taken on new clients and we’re able to help these folks out. We all got into real estate investing to gain freedom and get more control over our lives, control our financial futures. Get ourselves Financial Peace. Unfortunately, when it gets out of control, then we’ve lost control. We’ve lost peace, we’ve lost freedom. But thankfully, many people who invest in REITs are invested for the long term. They’ve honestly have lots of equity in their properties. So our even our clients, they’re selling and they’re taking significant profits of six figure profits. And of course, they return their capital, and they get they reduced their debt. Then even last week, I put out a request for income properties, as we still do have some clients or are in the market for small multi families. So my request was specifically for duplexes are better last week, and I’ve never received such a large response. Numerous legally, small multifamily properties and top towns just outside the GTA, which are the ones that cash flow which fit the sweet spot for our clientele. One interesting observation. Almost none of these small investor small market multi investors are overly motivated to sell. Why? Because they invested right, those who invested purely for appreciation without an eye on cashflow. Those are the ones who are having a tougher time. I even spoke to an investor who is operating Airbnb, in licence in a town with very strict Airbnb licencing. The location is fantastic. It’s an area that that draws tonnes of tourism, but they are having difficulty selling it. Just know that anytime you’re going against the local bylaws, including if your property is not legal, it’s for example, if it’s not illegal duplexers Or you have units in the property that are not legal, then that will be a different one difficult property itself in this in this market, because the financing is more difficult. And honestly, buyers are just being pickier these days because they can be there’s a lot more property to choose from. But understand that’s only for the short term. Interest rates will not stay high for forever. And again, this is why here at Island real estate, we’ve always focused on legal small multifamily properties. Because one one focus is on cashflow one can survive these tough times. And when it’s time to sell, there’s more buyers for for quality properties. And also, as predicted, with housing affordability having having eroded over the years, people honestly need more income to qualify for property. So buying a property that has tenants that that pay rent, helps pay the property so people can afford more when they’re buying an income property, especially if they’re planning on living in it. Also understand we are in the middle of summer. So it’s called seasonality, where the long term rental market and the resale markets they just come down even for you know, thrive like myself. For anyone watching the YouTube I am recording this. We rented a cottage. We are technically not working this week, sort of working a little bit, but many people are on vacation. So a lot of people are not focused on buying or leasing right now. Add to that the bank you can raise interest rates another point two 5% last last week, bringing the overnight lending rate to 5%. I know many people are unhappy with that. But the markets did predict it. For anyone who follows the news, pretty much every bank predicted that that would happen. And also pretty much most of the smart money. Thanks. So there’s a chance of another increase later this year. I know some people who think there’ll be impossibly too. And also there will not be any interest or an interest rate relief until that as soon as June next year, June 2024. So elevated rates will be here for a while. So for many it’s survival mode. For others, they’re just for those who are honestly, it’s the ultra rich are just getting richer because they’re the ones who are still buying a property while others are fearful. For tonight, we’ve had some we had some issues with one of our portfolios in Catherine’s two. So in order to improve cash flow, I had to fire our St. Catharines property manager. As our rents were underperforming rents were coming in lower than expected leases were being signed for less than I expected. And also we have a vacancy. And as a discerning investor, like any investor, I personally hate vacancy. I think we all hate vacancy. Now, I don’t like to use the word hate often, I use it sparingly, but nothing ruins a real estate investment like vacancy, ask any flipper or burn investor. So after an onsite tour, they did back in May, I took notes, I took pictures, I spoke to the tenants, after the onsite tour with the property manager I knew that I can trust them to take to to continue working there. So I actually immediately assigned all the work to my handyman, who I trust who I’ve had working I’ve been working with for close to 10 years, he referred me to a local leasing agent. And I’m happy to report that we sent we signed a lease and our property will be fully tenanted by September. So the previous property manager was either negligent or didn’t know what they’re doing. Because my property was experiencing mace vacancy because it didn’t show well. I have burnt out light bulbs, and badly needed to paint job. One door was one bedroom door was broken. One bathroom had drywall damage, all generally minor things. Hence, the previous student tenants did not renew their leases. Nor did new tenants want to sign. I don’t blame them. In the end, the work to repair the property was under $2,500. And we signed three new students for close to $2,000 rent per month between the three of them. So we got near top of market rents higher than what the previous property manager was signing for. And all the existing tenants are happy with the change of management, I’m saving money. And now I’m making more money as well. If you want to get an under street understanding of how much of the landlord’s market it is in the student rental market, for those who follow the news, like you know, there’s a lot, there’s a lot more international students in Canada than ever. So the smallest bedroom in this house is just under 10 by 10 to 110 feet by 10 feet, which is normal for most in rentals, it’s just common that there’s always one small bedroom in every house. So this room used to fetch only $400 for the room before the pandemic $400 per month before the pandemic, we just signed the the tenant just signed for 575 For that very same bedroom. It’s the same bedroom, like we made a painted it, but nothing else is different about it, it’s still the same size, that’s an increase of just over 44% just over three years. 44% just over three years. So thankfully, that beats inflation. I’m very happy with this investment. But the lesson is that not all real estate professionals are are equal. It’s not uncommon for things to not work out with the property manager. I’ve been through about six property managers myself personally, one just needs to keep tabs on them and take action when necessary. We disagreed on management styles to them vacancy was acceptable in this market. For me, I don’t know if I know better. But I have clients that own about 100,000 rentals, and we all catered to the top 20% of the market, I was the only one experiencing vacancy. So I knew something was wrong. So here it I wouldn’t real estate we play to win. I enjoy winning, I enjoy cash flowing, I despise losing aka vacancy. So make sure everyone on your team is playing to win. And everyone’s rowing in the right the same direction both and that’s the way to go. Investing in make sure everyone on your team knows how to achieve those wonderful returns. If you are an investor and can use a second opinion on how your existing portfolio is performing, maybe you have some properties with equity in them, but they’re negative cash flowing, then feel free to reach out to us at I wouldn’t have any the wealth.ca The year is halfway over the value to you is to make sure that each property is serving. And if they’re not, we can suggest better uses for your investment capital. Just like the stock market, things change frequently, several investment strategies no longer makes sense. It’s time to review and reset your portfolio and set it up for future success. It’s a 30 minute call, there is no charge, just reach out to me the ball and one of my coaches will get back to you. If you’re more on the information education wave right now, we do have an upcoming upcoming meeting all online. It’s actually next week. This next coming Tuesday, Tuesday night at 7:30pm. It’s all online on Zoom, where I’ll be sharing the latest market update. I’ll be talking about interest rates, I’ll be showing the data on when we’ll see an interest rate cut. I’ll be also talking about something that’s a massive interest to myself, artificial intelligence, and I’ll be sharing specifically what AI tools that I’ve been using today in our business, AI is already causing massive disruption. And for those, in my experience has been for the good. It’s gonna be great for those who know how to use the tools in order to be more productive. I’ve already saved myself 1000s of dollars in using certain AI tools and I cannot wait to show you how. As always, I’m on a mission of truth seeking to find out what works best and what doesn’t work in my business and portfolio of real estate properties. The next I’m gonna meet again is Tuesday, July 25. At 7:30pm Eastern Standard Time, also from my team, Coach Tim Hahn will be sharing how he and other clients are dealing with high interest rates in rebalancing their portfolios. These unprecedented times as we navigate the uncertain terrain of high interest rate environment, we understand that managing your investment properties may seem more like a burden than an opportunity. This is an opportune moment to rethink your strategies seize these opportunities, these high interest rates are currently yielding. Yes, that’s right. The smart money is taking advantage. They’re being greedy right now. While those are beautiful, there are great opportunities now. Many sellers are being squeezed by high rates. So being a buyer as a winner is a winning strategy in this market, just make sure that you’re set up to be a buyer in this market. In the face of change. Knowledge is power. embrace this opportunity to enhance your understanding, refine your strategies, and prepare for success. Your investment properties don’t have to be a source of worry in these high interest rate times. Instead, let them be a powerhouse for your wealth generation. Leverage my team in my team and I have vast experience, close to enjoying in person experience. We are hosting an island match my tour the following Sunday, July 30. It’s a Sunday, the following Sunday, July 31, in Kitchener Waterloo where we will be touring to income properties, and there’ll be a lecture as well. There’s nothing better than learning hands on on site in person hanging out with like minded people. And that’s from my experience. Unfortunately, I won’t be any good their chairs Sign us up for our old family, family camp, a Family YMCA camp, so I won’t be in there at that event, but Tim Hahn will be so make sure you’re on my newsletter to stay connected with all of these all these best in class educational events. One can register on my website, www dot truth about real estate investing.ca On the right side, just give your name and email and you’ll know cuz then you’ll be registered to receive all the latest and greatest events information. And if you have friends and family who you care about who care about improving their financial futures then please invite them along to onto this week’s show. We have a very real conversation with full time professional investor awesome. Yeh, who does it all? He does wholesales, flips, burgers, negotiates his own Cash for Keys. He’s gotta get steroids share about that. Several good stories to share. He’s a podcaster and meetup host. And honestly, it’s not all not all pretty, which is why this is shows called The Truth about real estate investing. Austin shares how he’s had to rebalance his portfolio, how the wholesale market was down when his short term problems are because again, he’s very successful. But he does have short term problems, which, but his success has led him to be able to transition out of his corporate job. It’s only 27 years old as well. And also he started off investing in Windsor Sudbury, and now he’s even in downtown Toronto. His career has definitely changed a lot, which is what I really enjoy about this episode and learning about Austin’s journey. Again, he starts He also shares how he started learning at local local investor groups connecting with locals to build it as teams. We walked through the numbers of a couple of his deals often isn’t candy coated the challenges that come with buying ugly, ugly properties, including a case of arson, or as part of property was intentionally burnt down by criminals. The phone calls partner got in the police that’s how he found out about it must lead to sleep, sleepless nights with insurance we get paid out and how Austin’s the markets they targeted before the markets and properties he’s used to target how they’ve evolved over his career. This is a very real truth about real estate investing episode, where problems are not always worth the profits. However, hopefully, my friend one of you or 70 listeners can take away how to improve upon your real estate businesses. Leverage the lessons from this episode and the 300 Plus episodes before this one to follow Austin. You can find him on Instagram and Austin. Yeh. A U S. T I N Yeh Ye h six. Number six. Awesome, Yeh. If you want to follow Austin’s podcast and network meetup, check out him on Instagram at prize network event. All right, please enjoy the show.

 

Erwin  

Hello Austin, what’s keeping you busy these days?

 

Austin  

A lot is what is keeping me busy nowadays. We talked a lot offline but I guess we’ll dig deeper into it. I’m going through a couple of apprai bought a couple of properties last year, going through appraisals. That’s a little bit of a mess. I’m doing some fixing and flipping. I’m doing wholesaling, wholesaling has slowed down pretty tremendously despite the market picking up on the MLS doesn’t necessarily translate to to investor demand all the time. Yeah. So I mean, there’s a lot of things, buying properties, selling properties, selling a decent amount of my portfolio, a decent amount, but selling some of my portfolio where interest rates have gone up significantly non payment of rent with tenants dealing with that we can go on and on. But that is it in a nutshell.

 

Erwin  

Okay. Okay. Yes. For listeners benefit. I asked you before recording how many properties have come through your portfolio?

 

Austin  

Yeah, I would say about 30 to 33. I’ve owned 25 or 26 concurrently. Right now I’m probably at 17 ish or 18 ish. Now. I don’t always be tucked off. I don’t always keep track. I guess to my detriment, but that’s sort of mental math. I think that’s where I’m at right now. I sold a decent amount over the last couple of months for sure.

 

Erwin  

How do you decide whether or not you’re going to keep a property?

 

Austin  

Well over the last few months, that was pretty simple. The market decided for me right? Fortunately, I started investing at a good time, right where the market was was doing its thing prices were appreciating year, what year that was end of 2018. I got my first property I closed on a December 2018. And the market was doing obviously pretty well. A lot of my portfolio to begin with were single family houses, scaling up to duplexes, triplexes, five units, six units and eight units. A lot of the properties that became negative cash flow, were the single families because of obviously what interest rates did and so that was, for me, my thought process and selling it. I thought the market wasn’t going to recover very quickly would probably be sideways for a while. Obviously, I was proven wrong, but it was going to be sideways. I wasn’t gonna get appreciation these mortgages were with RBC. So I was paying interest only so not getting equity pay down and they were cashflow neutral. So what was the point of holding them? If I didn’t have faith in the market recovering at that time during it was like may ish, may ish around that period. So it was a pretty no brainer for me. The difficulty I faced they were all tenanted. Right. And so really the active buyers over the last few months were first time homebuyers or people end users. So I had to negotiate with the tenants Cash for Keys, get them out and then list the properties for sale. So the vast majority of my sales have been the smaller single family homes, but these multi families I have fortunately, I haven’t leveraged to 80% loan to value. I quit my full time job in February 2020. So I wasn’t able to leverage them anymore after February 2020. And we know the market roundup since then. So yeah, just got rid of the single families kept the Maltese for the most part.

 

Erwin  

So you’ve been through a lot. Yes. A lot. Five years. Yeah. What have you learned?

 

Austin  

I learned a tonne. So let’s get started with

 

Erwin  

the back. You invest. So you live in Toronto? Yes. Where do you invest?

 

Austin  

I invest in Windsor and Sudbury other tertiary markets. I’ve invested in like a small city an hour out from London. What’s called it’s called Stratford Ville.

 

Erwin  

Excuse me. Yeah,

 

Austin  

it’s like a population for Ville Yeah, not sure. Yeah, Stratford Ville. I know what you’re thinking and it’s not the same one. When I tried to send it out to my wholesale list, everyone was thinking about the other one too. I was like, no, no, this is Stratford bill. That was actually one of the tenants that actually stopped stopped paying recently that I had to deal with. Are they still alive? They’re still alive. I guess if we’re gonna get into that sooner to audience will know what that means.

 

Erwin  

Population of Stratford Ville that’s like 1000 2000

 

Austin  

Oh my god. Yeah, it’s very small. It’s about it’s about 25 minutes from St. Thomas. I want to see 45 minutes from London. But funny enough like I honestly don’t know what really drives the market there but the house prices there are quite expensive.

 

Erwin  

Ontario is messed up man. It’s more expensive

 

Austin  

than St. Thomas and some of these other bigger cities so like I don’t know what the appeal is exactly. But the court for me it was just like a burr it was a flip and I was gonna you know, I might as well keep it because it’s a duplex. I got it extraordinarily cheap. So sort of my investment philosophy and it’s changed since then was to just find deals that I can be in and out of very quickly. Get it at a make money on the buy, complete the renovations Burt refinance my money because I’m a wholesaler so I’m able to get great deals at pretty steep discounts. So for me, I wasn’t really market dependent. I would go wherever the deal was, and that has led to some headaches now. So I’ve definitely realised why being focused in a particular market is better than spreading your portfolio wide. But it’s also at the same time I’m not gonna say that it’s a completely bad thing because it’s helped my net worth tremendously as well. So like there’s been pros and cons of doing God.

 

Erwin  

How do you source property as a wholesaler? Yeah, as a wholesaler so

 

Austin  

I was an investor first, right? So I was buying properties and a lot of what I was doing was just networking with other investors in Windsor. That’s where I started off, then doing Kijiji before Kijiji, became super popular going on Kijiji every day, refreshing the page, being the first person to contact any new advertisement. They’re cold calling realtors, it was a popular one that I was doing that and now as well, right, just looking at expired listings and making those cold calls door knocking, doing low cost lead strategies is how I got started off with low cost high effort though low cost high effort, but I was an investor first and I wasn’t willing to you know, like as investors a lot of the money’s in like thrown out in the market a lot of the time so I didn’t have a lot to start off with. But I realised that obviously you can’t scale that way in the wholesaling business because the lead flow is inconsistent, especially when you’re doing it full time. You’re getting leads maybe once Are you getting deals maybe once every three or four months if you’re doing that good deals, but it’s just not consistent enough. So then we started moving over to like flyers we did bandit signs, which are those we buy houses, signs and just sticking them down in grasses in high traffic area, digital marketing SEOs, we did a little bit of everything. Everything works, you just got to obviously work it hard enough. And right now kind of what we’re seeing in wholesaling, we’re putting a lot more focus back into the high effort, low cost strategies, because what you’re seeing in wholesaling is your assignment fees are slipping out, right, just generally people are less willing to give 5060 $70,000 assignment fees were used to be or normality. If you didn’t get a 50k assignment fee, at least once every month, you are doing something wrong as a wholesaler, but your marketing costs is also increased as well. And your buyers had slowed down as well. So even if you get the deal dis Boeing is another story. Kind of what I was alluding to earlier, is is not the markets picking up but a lot of it is and users right, and your buys this is mostly consisted of investors. So how many cash buyers are really active. Now, there’s still a decent amount active but nearly not as much as what we’re seeing before. So as the margins are selecting expenses are increasing and wholesaling. We put a lot more emphasis back into high effort, low cost strategies to get us through sort of this downturn. That was a mouthful. Now, that was a mouthful,

 

Erwin  

when he came into the office asked you about how has the market gone for a wholesaler? Yes, because you’ve you’ve gone through, like the biggest downturn we’ve had, and in my recollection. So how did you fare in the downturn? And you’re saying, let’s start the downturn. The downturn?

 

Austin  

Yes. So here’s the thing everyone was live on. There were wholesalers everywhere, and everyone is living off the high of wholesaling, you could get deals under contract, that for me, were marginal deals. I was like, I wouldn’t do this. But you know, I’m not to tell people what their business plan is, if someone wants to buy it, sure. That’s your business plan, I trust that you run the numbers. So people were paying, you know, wholesalers market as is value, I’ve wholesale deals higher than my marketed as is value, right, because the market was just so crazy. And as a result of that, we pivot. So we’re doing a lot of very, we had a team where everyone was getting paid, or majority of people were getting paid variable, right, based on deal flow, they bring in so on and so forth. But when you’re bringing in the type of assignment fees that we were during a hot market, it made sense to start fixing your costs so you can keep more of the spread. So near the end of 2021, we started making hires or transitioning people to fix salary plus commission. So we were keeping more of the spread to ourselves. But that wasn’t necessarily prudent in a downturn market, right. Like we started our wholesaling business during a hot market. So I don’t think anyone saw what was going to happen in 2022. So that definitely impacted us drastically with deals that were getting under contract, it was impossible to find a buyer crickets, sometimes we’d have one people reach out, sometimes we wouldn’t have any people reach out. And that it was during that time where, you know, our fixed expenses were now high, we’re paying like 25 $30,000 a month and fixed expenses, bringing in zero costs, non zero cost bringing in $0 in revenue. So I mean, how long can you operate a business like that? And what was really worrying me is is that with wholesaling, advertising is what drives your revenue. If you don’t spend dollars in advertising, how are you going to get deals unless you do the high effort stuff, right? And so with your fixed expenses, really high, man, like you don’t want to spend $10,000 in advertising, right? It hurts. Yeah, and especially if there’s no buyers, which is what we’re seeing. So we’re in negotiating with people being like, hey, look like this is where the market is right now. Like, are you okay to go back to variable, but you can get a higher percentage of the variable assignment fee, right? So and have that go have a discussion go, obviously, like they knew what was happening in the market as well. So not well, so we did our best to try to pivot. So we’re like, okay, let’s bite the bullet and start advertising, start doing different things, start connecting with realtors directly taking advantage of a realtor as buyers list, we were able to move maybe a deal a month, but during that, like, super downturn, but that’s not enough to keep the lights on. And after a certain point, we did have, you know, lay some people off, change your business model, slow down and take a step back and rebuild it upwards. So we were impacted from it. But very fortunately, during the good of the market, we’ve made a lot of money. So we’re able to sort of sustain that downturn, but we didn’t want to just burn all that money. So we took a step back, took a look at our business and slowly agree sort of like rebuilding it to make it profit which it is profitable again, but taking things slower and steady now instead of just like, you know, trying to maximise margin without any regard to risk. So yeah, I mean, that’s a big learning lesson that we had there.

 

Erwin  

Right. So now we’re recording this in May. Yes. Everything looks like we’re well past the bottom. Yeah. Is that your feeling as well? We’re well past the bottom.

 

Austin  

Yeah, definitely. sentiment has picked back up again. A lot of it is end users I find so what we’re seeing on the AMA last year, anyone who goes on Twitter, they see Realtors consistently tweet out like Oh 20 offers 30 offers, which is not untrue. A lot of great listings are getting that but that doesn’t necessarily always translate into the off market world because think about it like we have a different clientele. Oh, we’re targeting investors and have numbers and proofer investors. Not necessarily if anything, they’ve gotten a little bit worse than that may try there. They’ve been a few more rate hikes and since May and no one was buying in May. So we’re finding that these multifamily properties that are cashflow negative on onset, there’s not much interest in and people want vacancies people have people want vendor take backs right to be able to cash flow a little bit during the transition phase. And with the single family homes, people want very large margins on it, understandably so because I’m doing flips as well. And on my flipping side, I’m sharp, right, I’m like low balling the numbers really need to make sense for me to get into these deals. So we are finding the market is picking up on wholesaling, definitely don’t get me wrong, but not nearly the extent of what we’re seeing on the market. Right. But that being said, there is good opportunity out there. I was speaking with another wholesaler who had a deal out there, no interest, no buyers. So the whole tale that they closed on it, cleaned it up, listed it and made close to six figures in profit. So they’re operating like you know, it’s investor psychology, there’s a deal that we marketed at $550,000 as his value for 470,000. No interest in it, we had one or two walkthroughs no one wanted it. So we had to let the deal go. And the seller listed on the market one week after we let the deal go is sold for over 550 K. So the numbers are on point, right? It’s just like, investor psychology, if someone was to negotiate us from 550, down to 470, they would buy it. But if we listed it out for 70, they want to negotiate us down to like 400. So there are opportunities out there in the market right now in my opinion, but you do not you do need to be a little bit wary of you know, you got to make sure you crunch your numbers and you have confidence in these deals.

 

Erwin  

It’s interesting because you’re we’re talking about buyer psychology, investor psychology, because I’ve spoken to many people like oh, we’re going to wait for the crash to buy gonna wait to the crash the VI word those people go

 

Austin  

Yeah, for sure. And for myself, speaking about investor psychology, I would consider myself a savvy investor. But sometimes it does, like you fall victim to it at times, right. So when I listed a single family home last year, it got appraise for like 330, or 340 K in 2021. Or like 2020, maybe, and I listed it on the market to D leverage wasn’t cashflow positive, like sort of the reasons I mentioned earlier in the podcast, and I got an offer at like 270. And I was like no, like, there’s no way the property is worth more. You know, I was talking myself into like, I’m not selling it at that price. Because it should be worth more than that, like people are just scared, so on and so forth. But that’s invested in the market dictates what it’s valued at, right. So like, after a few days, I took a step back, I was like I’m not going to get any better offers. And so we negotiated with that party and just ended up selling to them. So even a savvy investor can fall victim. And speaking of that, like I bought in a couple of properties in November 2022 and December 2022. Right, which were good deals, obviously, because markets picked back up since then. But going into those deals like knowing that the market was was in a downward trend, I was able to negotiate different things, but I still didn’t feel confident with 100% Anyone who says, Yeah, I’m buying this deal. And I’m going 100% confident like, you know, all the numbers, check out so on and so forth. You probably have probably maybe the same investors that if things change and the tides change, you’re gonna get caught again, like even for me what the numbers checked out, things are perfect. I was able to negotiate vacancies, all of that stuff. Still in the back of my head, there’s a voice What if the market corrects further? Right? It’s just that little voice in your head and that is investor psychology? 101. I tried. I almost talked myself out of those deals. I’m glad I didn’t. Because now with the market picking back up. All of those are, I mean, several, not several hundreds but 100,000 Plus and equity on several of those projects, right? But if I was to fall victim to the fear and that voice in my head, then I would have lost on all this opportunities.

 

Erwin  

So you’re connected with the wholesaler community as well. Yes, I’ve noticed love gone quiet. What have you noticed, um, like some, like well, including the organisations they learned from they’re gone. Yeah,

 

Austin  

a lot of the smaller players I think you’re referring to have definitely gone quiet, they either didn’t have the relationships with the buyers or they’ve never really had the skill set per se because at that time you lock up anything like even things close to market value, and you could still make a 10 or 15k fee, right? So those wholesalers or what have kind of came and went, but the wholesalers you really do treat it as a business or are still actively marketing deals I can name a couple off the top I’m not going to name names so that they name a couple top of my head that are still actively marketing we’re still actively moving deals right but they’re not probably obviously not making as much money that they would have been in the past but honestly it’s with any business right business moves in cycles the ground when when the pandemic hit all of these restaurant can I swear or no? Okay, all right, these restaurants ate shit, right? Like when the pandemic hit and they’re struggling now it’s it’s our turn to stop I got it right like and it’s our turn to show resiliency. Not every restaurant survive during the pennant. Same thing with wholesalers. Same thing with real estate investors, same thing fixing and flipping Right? Like, it’s our turn to eat shit and the resilient the risk mitigated, those will survive, right? So a lot of wholesalers are quiet, some are still moving deals, some have pivoted, their strategies are seeing all these different unique things. I’m seeing wholesalers say, take this like survey, and we’ve done it as well take the survey and you can win XYZ, because they want to see which active buyers are still buying. And you can make those phone calls what exactly you’re looking for what price I have this lead what prices need to be, and you work one on one with these buyers. I see other ones that say we have no price, throw an offer, just so they have an idea, which is kind of clever and kinda it’s risky, but it’s sort of clever, too, because people want to feel like they got a deal, right? And that person made like a 90k fee on that, right? They’re like, Okay, I’m gonna negotiate around this ballpark, boom, did it that person like you’re just, there’s no perfect answer. I think everyone’s kind of throwing stuff and seeing what sticks, which is the beauty and the risk of entrepreneurship, right? You just end times like this, you got to figure out what’s working for me, what I’ve been doing is I understand the markets picking back up. A lot of it is like, you know, end user so we’ve been cold calling a tonne of Realtors, we’ve been SMS blasting a tonne of Realtors, when we have a Hamilton deal, you’ll probably get an SMS blasts, too. It’s just like blasting like, hey, we have this off market deal. Bring your buyer client, here’s the buyer’s package. Let us know if you’re interested. Right. So we’ve been catering towards end users utilising Realtors because realtors, they want to commission you probably know a lot of realtors want to make a commission, right because they also are not making as much as they were before. So we’re kind of pivoting who we’re targeting to and that way it hasn’t worked yet once or twice. But, you know, that’s enough for me to build proof of concept and continue down that path. It just, there’s no perfect answer to this.

 

Erwin  

Let’s go back to early days. So can you give me an example from like the early days that you think was a good deal? Something you’re happy with? Yeah, pick a city.

 

Austin  

sure most of my portfolio was in Windsor.

 

Erwin  

What did you buy in Windsor?

 

Austin  

So for example, I bought a I bought a duplex off the market with a vacant land beside it. And this is when I was just doing all of the different sorts of high energy marketing strategies low cost. This was via Kijiji, I constantly refresh the page got in contact with the seller who just literally listened so I was the first viewer

 

Erwin  

on MLS. GG, GG GG also for sale by owner for sale

 

Austin  

by owner that was back when nowadays, Kijiji listings are worth more than what the MLS listings are. So times are a little bit different than what was the first person that spoke to them build rapport and then had my contractor through their go through their through an offer. So this one was a duplex vacant possession, which is amazing, vacant land beside it. I got it under contract for 250,000. And it was worth like we got it appraised by the bank. When we went through bank financing. It got appraised at 330,000 as is. So we did like very cosmetic renovations and then got it further appraised at 370. We refinanced that in February 2020, February 2020. And we haven’t refinanced that sense. So it’s probably worth closer to half a million now because of that vacant land because of what happened in the Windsor market. Right. But a more recent deal. I mean, I don’t know if you have any questions, or did you want me to go code?

 

Erwin  

Let’s finish off this example. How big was the law?

 

Austin  

The law was 65 feet by 100 and feet by 150 feet depth,

 

Erwin  

I believe. Where was the vacant lot? What was that?

 

Austin  

Yeah, so the vacant lot was 30 feet and then the duplex was 30 feet or 30 feet? Yeah. Okay. Yeah. So they’re just like a double wide lot. Yeah, exactly. So we haven’t severed it yet. It’s a long term thing we could plan to develop on it. If I choose to go down that route. I can sever and sell it off. But I’m just land banking right now because the refinance of the duplex paid for that lot. Pretty much

 

Erwin  

abuse areas. Good tenant profiles. Good. Yeah, it’s

 

Austin  

like a student rental area. So a lot of students are in transition tenants every year which, which I like so it’s a decent area for student rentals. Not so much for families, you

 

Erwin  

know, and so were you driving to Windsor to do this deal?

 

Austin  

No, no, no, no. So I never I’m a pretty lazy guy in terms of like driving well, it was a struggle for me to drive down here too. And it’s only a 35 minute drive. Windsor is what four or five hours four hours away yeah and even hold sway when we get deal with like they’re all Sudbury we got deals everywhere, right? Like I am a firm believer of hiring things out right and just hiring it to the right people. So

 

Erwin  

look, I’m not a concert or you never seen this house.

 

Austin  

I’ve seen it when I visited Windsor. Yes but during the entire burr process I don’t think maybe I went there once but even that I don’t remember even stepping foot there. I had just like referrals right like just when I was grinding away at Windsor when I was initially starting. I would visit there every week and meet Realtors meet investors meet contractors in Meet people. But once you have that team set up and reliable people, you don’t necessarily need to be there per se, right? You just need to have people that you can trust rely on your Power team. And so my contractor knows way more than I do. And so I’ll get him in there to look through what needs to be done. So on and so forth, get a home inspector in there, I usually get home inspections right before putting in a clean offer. I almost always like to get a home inspection or a contractor in there. And yeah, I mean, they know way more than I know. So there would be no value of me going there. Right, right. So yeah, I just I just trust the professionals to do it.

 

Erwin  

How did you build a reliable team? Like this? Is the winning early properties? Like yeah, you didn’t have much of a rep or relationship with these folks? How did you do it?

 

Austin  

Yeah, I go through because I’m all over the place. I kind of go through like a systematic approach. The first thing I do is to jump in these to these investor communities on Facebook and say, Hey, can I connect with an investor in Sudbury? can I connect with investors in Windsor? Few people message or I’ll use a search function, see who has asked that question before or has invested their D on them. Get on a call, ask them who their realtor is contractor, whatever they’re willing to share, right? Get on like three or four calls with these investors, and then call their power team. So if they shared realtors, I’ll get on three or four call with realtors, I’ll get an understanding of good and bad neighbourhoods, I’ll get referrals from realtors and contractors. If a realtor doesn’t know a contractor, I’m not even going to use them, right? You’re not investor oriented. So then my contractor list continues to build out right Property Management list starts building out because the investor share it and the realtor share property managers get on calls for separate property managers. Then ask them what are good and bad areas? What are the rent rolls up, like two bedrooms, three bedrooms, one bedrooms? And then ask the property managers do you know any contractors as well? So it’s almost like, what do you call it like a like a tree diagram where it starts off with a couple investors in the branches out to multiple realtors, branches out to multiple property managers, contractors, and just go down that list and, and get a feeling of at this point, I kind of use a gut instinct as well of of who I trust, who I don’t if they’ve been mentioned several times, things of that nature, right. And I go through the same thing in Sudbury and Windsor. It’s just following the same sort of systems. But I do go down there, at least a few times before decide to commit to invest there, right just to meet not only people on my Power team, but to meet the investors to build a relationship with these people. Because seeing and speaking to someone face to face is different than just over the phone. But once I have that all set up, I find I don’t need to step foot in those in those areas. Again, unless I’m doing Cash for Keys conversations. That’s the only time I would I would step foot in the cities.

 

Erwin  

Yeah. So we were talking about what is the work that’s high enough value for you to do personally and personally.

 

Austin  

So people love to say property management’s that $30 An hour tasks Yes, and no, it is when you’re just like your property is fully stabilised, and the collecting run getting snow grass removal and small tenant complaints, it becomes $1,000 An hour plus task when you’re dealing with tenant troubles because your property manager, no matter how good they are, and I’ve worked with so many different property managers, they’re not going to care to deal with the tenants in a similar situation as you they’re going to serve the notices. And that’s pretty much the extent of it. They’re going to go to the paralegal and all of that they’re not going to build their relationship with a tenant and why should they they’re managing 200 units, what makes your unit any more special than another investors unit? Nothing, right? They don’t have the time capacity or the resources to speak to every single tenant. And so I’ve had situations, like the most recent one in Stratford Ville, for example, one of the see you’re dying of laughter now, one of the one of the tenants. So I got an email from the property manager, it was an N five saying that the tenant upstairs threatened to kill the tenant downstairs and you know, all of that, then they miss me rent on top of that. So I got like two notices. Kudos to her for filing the paperwork. Obviously, that’s your job. But then I was like, Okay, I know how this goes. It could be a year long process nonpayment or it could be a year. If they got evicted, they’re definitely going to destroy the unit. Let me just pay them a few $1,000 Or like, negotiate with them, figure out what exactly is going on. And then have them and then hopefully get them to sign and 11 and transition at a landlord. We’ll see Oh, my God, a tenant don’t need to kill another tenant. This is not going to be an easy combo. And I knew that going in. So I got the phone number, call the tenant, I was like, hey, look, I got this notice from the landlord. They said XYZ. Like, honestly, there’s always two sides of every story. Like Was there something that the other tenant did? Like, you know, like, kind of figuring out their side of the story

 

Erwin  

to them? Let’s see here on the hair. Yeah, and like I know,

 

Austin  

it may they’re going to stretch scores, right sides, every story, all that matters is that you’re hearing them out and you gain the respect and trust so I heard their complaints and all of that, like look like and then obviously making it seem like leaving is the best option. I was like look like obviously you too, are going to have problems in the foreseeable future that it’s going to be constant bickering about and like man if this escalates any further, not saying that it will or won’t or then criminal record this that immediately No, like, it’s going to be huge issue for you. And honestly, like, I sincerely apologise that you’re going through all of this. And I know that moving is expensive for you. But what if we can work something out? Right? Because I don’t want this to escalate any further. It’s no way to live. So why don’t I give you some a few $100 for moving expenses in some time? Release? Yeah. And then they were just like, Sure, fine, thank you for understanding, so on and so forth. But do you think a property manager is going to do that you think a paralegal is gonna do that? No way, a paralegal just serves no, like here, take this money and leave, or their paper pushers, right or transactional. They’d be like, This is what you did, this is what it could lead to. But they would never sit down and spend an hour two hours of their time speaking with a tenant. And that is a task that will easily add 1000s of dollars will save you 1000s of dollars and a tonne of headaches. So all of that I do it myself. I tried to do it over the phone. But if I find over the phone is not working out over the first phone call. I’m like, Hey, how about we set some time and grab coffee with each other? And I hate doing that, because you’re driving, I haven’t found a way to systemize it

 

Erwin  

because you’re going to Sudbury or Windsor? That’s hilarious that you said that because I’ve talked to novices. When I raise issues of being a landlord, especially when you have a lot of tenants, your rough air and beverage and tertiary markets. Yes, there was an audience to just build systems around it how?

 

Austin  

Like yes and no, right. But because again, you’re dealing with these tasks are very high value. Most property managers don’t know how to do it, and most most paralegals don’t know how to it’s like almost like sales and negotiation. Yeah, exactly. So

 

Erwin  

a high value skill. Yeah, they’re usually held by high value people.

 

Austin  

Yeah, yeah. Like people, man like these negotiations when so left, when I first started them out. I was a complete novice, but I would try to do it myself. And I’ve learned from experience like how to, you know, navigate around these conversations, especially like with sellers and wholesaling as well. Same. A lot of them are the same profile as tenants, right? Motivated sellers. So you can outsource these out, but it’s not going to get the results that you want. Right. And that’s the troublesome part that I’ve been facing for sure.

 

Erwin  

And then, like I said, like just just throwing off often people just offering them, let them out of their lease is a big weight off their shoulders.

 

Austin  

Yeah, exact, but it’s like how you position it? Oh, like, I’m gonna let

 

Erwin  

you out and like, if you want to leave, it’s okay. Well, we can we can break the lease.

 

Austin  

Exactly. It is Oh, moving costs is expensive. I know how to act on it. Why don’t we give you some time? Right? Like, how about I helped me with it, let’s say it’s positioning a lot of the times, right. And it’s like trying to be a problem solver. Exactly. And the only way you solve a problem is is by spending the first 30 minutes building rapport and understanding, you know, like, their situation, because if you’re going there and trying to solve the problem without having that small talk or that understanding in the beginning, why would they trust you or be capable to solve their problem at all right, Mr. That’s something I’ve realised to

 

Erwin  

this conversation. I’ve I’ve attended the Oasis rent today. And she said that she’s behind his father passed. Yeah. So I or phone call today, because it’s due today, barring a senator Uber, an Uber gift card first. Because you can use it for Uber Eats. Yeah, I mean, yeah, here’s dinner on me. And then then I’ll call Yeah, did you get it? Cool? Are we are we are we good? today? We’re good for rent today.

 

Austin  

Or at least have an understanding. Is it? Oh, no. Okay, let’s figure it out. Right. Like people, as soon as a tenant doesn’t pay rent, it’s like, it’s D Day. It’s like, you served them with everything. Let’s get them. I was like, dude, like, these people have lives as well. Like, what if? What if they got let go? How are they going to pay rent, if they gotta let go with a job? You You almost have to cooperate with them to some extent, because you know, that the cards are heavily dealt in their hands with with the regulation, so you gotta get on the phone. Exactly, exactly. And understand, right? Because sometimes the more you understand, the more you realise that some times patience and cooperation with them, figuring out a payment plan goes a long way than just hitting them with all these notices. Because as soon as you do that, when you call and you think they’re going to pick up hell no, because they think they’re gonna get evicted. Right. So they start that’s when people start dodging and ignoring. So you got to go in with empathy or sympathy at the very least.

 

Erwin  

I’m sure there’s many times my show, I explained to my my team members, like contractor park managers, I say to them, you know, if you spend $10,000 a year at a restaurant, how do you expect to be treated? Right? My tenants all pay me over $10,000 a year. Yeah. So like, I need something I need some that that translate to them. Right? So yeah, so yeah, I’m not the I’m not the guy that immediately enforce. I usually exchange emails at least first.

 

Austin  

So I do serve and force first but I give them the heads up. I’m like, Hey, right. People just serve it and they don’t even speak on the cake. This is like, this is the process, but like, don’t worry about it. Like it goes away as soon as you pay. Yeah, exactly. Or like as soon as we figure it out quite like if you let me know what’s going to take you a few weeks to pay let’s figure that out sort of situation. I’m like don’t even worry about it. Right like

 

Erwin  

because she got back to us right away. Their father passed like we’re I’m gonna hold off. Yeah,

 

Austin  

yeah, yeah. And I think that’s reasonable. But like, you’d be, it sounds reasonable. Everyone would be like, Yeah, that makes sense. But like, how do you find that out? By having a good rapport with them? So most landlords will never find that info. Wow. Yeah, yeah. But

 

Erwin  

we’re small enough that we can we can have these relationships with our tenants. So actually, when I asked you like, you have a decent sized portfolio, yeah. Do you have anyone else on staff? Do you have like an operations person or assistant

 

Austin  

that is i? Yeah, so I find honestly, the most difficult part is like stabilising the asset, but once you stabilise it’s not, it’s not a whole tonne of moving parts for the most part, right? Like if you find a good quality tenant and all of that, like your property manager does handle the bulk of it, it’s just not the beginning where it’s a disaster, like, okay, like, let’s choose finishes, how are we going to add extra bedrooms, all of that stuff, that’s where it becomes a little bit busy. But I don’t take 5678 projects at a time now. Right? Like I take like one or two projects, Max, and once I stabilised then I’m on to the next one. So it’s not like I’m killing myself with my business as well. And the people who do do a great job when they buy tenanted this a lot of like big operators who crush it, that’s just not my business model. That’s just not who I am. That’s just not the scale I want to get to. So I’m totally cool with just doing things myself and want to stabilise then barely takes any of my time.

 

Erwin  

So I actually just had Calvert mortgages in yesterday. So because they’re private lenders they have I don’t want to spoil it. But they’ve had a number of power sales.

 

Austin  

I’ve gotten some of them that fell across my desk as well as Okay, you want to wholesale it.

 

Erwin  

Whereas going was we’ve covered at some of the show the commonalities between investors that that failed, not fail, but there’s bumps along the way. Everyone takes losses, right. So these power sales, what was common was, well, they’re borrowing from culverts, they’re paying, you’re paying the private money, it’s expensive, and also multiple projects, and buy multiple projects. That means renovation projects, significant renovations, so they have multiple vacant properties. Yeah. Right. So you mentioned that you use you’ve done as many as like, five, six at a time. Now you’re done more like one, two? Yeah, what happened? Yeah, so five, six, that means you make some big money.

 

Austin  

When I was starting off, it was like aggressive growth by any means, right? I was like many of the investors were like, oh, grow, grow, grow, grow gross. Yes, this is scale. As long as they count, it wasn’t flipping but sort of the same principle where you’re you have a tonne of renter’s going on. And I thought that was the way to one raise money and to that was the way to become rich quickly. Like I looked at real estate as as much as I never talked about I’m like, oh, long term like we say that to ourselves, but our actions say differently. Am I believe that real estate was a long term investment, but my actions clearly show I was doing something different. So it was I scaled aggressively right before the pandemic of 2020. So like, I had like four closings, right when the pandemic hit and I was like, this is where like, like being a tonne of trouble pulling up from a tonne of lines of credits. I’m not going to make it out from this like who knows, right? Fortunately, the market picked back up I did like even getting these deals at a discount like getting it at a discount in a falling market. You don’t know how far that you know, that night falls and you don’t know how how marketable or liquid your property is during a falling market. Right? There’s just almost went through the roof. Yeah, it was definitely really stressful my expenses really, and I was living at home with my parents. So that was a big plus. But it was not good, good for my mental health those couple of months. And so market recovered, ended up doing really well on the deals as with anyone who bought during that time, but I was very fortunate where I was almost given like a second chance, right? Like I, my ego, just I was humble. And I was like, alright, like, Let’s do slow and steady growth. And there’s been times where I stepped out of my comfort zone again. So we’re talking offline about So after doing slow and steady again, you kind of investor psychology, you see, like, people making money hand over fist and people who are newer investors like unsavoury that are just making so much more than some overly prudent investors right. And I fell to that camp of of overly prudent during that after COVID Right after that sort of scare I had and I was like, okay, like, let me let me get a six unit got it under market value, so it appraised higher than when I bought it out. And then I took out like the bank only gave me 50% loan to value data on a commercial loan. And I had to raise the rest through promissory notes. So I want 100% loan to value plus construction on it. And man like so the deal went, I could surface level I could say that it went perfectly in terms of turnover all the units I got a full burn all my money came out cash flowing like crazy now, but what people don’t realise during that time from when I closed it got all that private promissory notes to when I refi it was a man it was like beyond stressful. It was like if one thing went wrong, like how am I you know, like how am I gonna dig myself out of this situation? It’s the peace of mind is what I’ve realised is extremely important. So although that deal went through quickly. And again, if I was egotistical if I didn’t have that experience at the beginning of COVID, I would have continued doing that. I’m like, Oh, my God, full burn none of my own money, cash flow and multifamily. Let’s do this again, right. But now I don’t I don’t feel comfortable doing this again, right, like I want well, it’s almost like, you know how crypto borrows the portfolio. A lot of them then sell off, they just hold hold hold. You could say like, I like sold off. I was like, Oh, I got like, the strategy worked well, but I’m not doing it anymore. Right. So then I stopped myself early. And thank God, because if I continued on that path, like who knows, you know, like, who knows now, like, if I got a tonne of projects, I’m pretty sure, I would have been in trouble too. But I’ve learned, I’ve learned from my experience, my short four or five years, I’ve learned a lot from it. So raising

 

Erwin  

raising capital lessons. So how did you grow so quickly? Yeah, you’re independently wealthy?

 

Austin  

And no, no, no. So I did a lot of joint venture ships. I’m starting off. So at the beginning, everything was my own money. It was like scaling with my own money, then it hit a point where it’s only one project at a time with nothing wrong with that, right. But again, this is like before the the COVID. So I was like, alright, let’s, let’s try to do multiple projects at a time. And there’s only really two ways to do multiple projects at a time, right? Well, there’s a couple, you can get a VTB and stuff, but I wasn’t that experience where I went down that path. So it was like, I either take private money, or I raise capital through joint venture ship route. So I was like, let’s, let’s, let’s do some joint venture ships, right? So it’s 5050 5050. Partner, they carry the mortgage, the younger renovation money, they Yeah, 100% of the capital. Right. So that’s kind of how I was structuring it. And like the the joint venture ships went went really well. So what I will say is, is that I do I am pretty prudent when it comes to running my numbers. So like, fortunately, all of the deals worked out really well. But at the same time, like I did realise, I bought myself another job to some extent, like most of my partners are fantastic. But then of course, there’s like, times where they give input on things that they shouldn’t be giving input on because they haven’t done this. Like it’s like almost penny pinching, like, let’s try to Cash for Keys budget $2,000 listed like this would add like 5060 grand in value, like just let’s they want to get five grand, the tenants skim five grand like No, no, no. 2000 I’m like, alright, what you know, like, so there’s those sorts of feedback that I got, but for the most part, investors are frugal. Yeah. And I understand on the other side of things, I would, if you’re not the operator, and you don’t understand the full picture, you would think like, why not just negotiate lower, you’re the expert, but it doesn’t work like that.

 

Erwin  

We’ve seen Cash for Keys for like, between 515 1000 Yeah,

 

Austin  

I paid I paid 12 grand for Cash for Keys before like, and that instilled that as a perfect return on investment. Right. But

 

Erwin  

I need to find the example. But I remember several years ago, rent control building in New York, the developer writer bought it. Yeah, they’re gonna tear it down and put up something big, right? One tenant, one that one holdout your guests casualties for the very last tenant, they probably like 50, grand 40 grand, or a million. Wow, I find the article. That’s crazy. And I’m just gonna delete that. So no one gets that idea. Right, right. Yeah. Like, you know, someone was standing the wave of a large condo development, right. Yeah. But yeah, so yeah. So for yeah, that’s, that’s tough that you’re getting? You’re getting input from people who don’t have experience? Yeah,

 

Austin  

yeah. So I don’t want to phrase it such that like, it happens very commonly. It’s definitely happened a few times. But most of my journal, I think having jayvees was essential for my journey for my growth, for my confidence on social media as well. Like, of course, social media is all about like the number of vanity metrics, but it was essential for my journey. But the last couple of property actually, the last two properties were still joint ventures, one of them was myself and the last two bigger, Maltese are not bigger, like, like six, eight units. I did that myself, but one of my other business partners, like we’re both putting capital, but I figured, like, now control matters a lot more to me, and I’m okay with having like slower growth as a result of that. That being said, I still I still do joint venture ships with people that I have a good relationship with. I have done properties with me in the past. And I think that’s really, because people do JV successfully, a lot of people will like to shit on jayvees. But people do it successfully and grow a business with that. It’s just a matter of putting the processes in place. You want to work with people who are easy to work with, and do repeat business with her. So when I do jayvees, that’s the angle I look. I’ve turned down so many people, which I would have never done before or the capital. Yeah, let’s let’s partner now. No, it’s like, if you have capital, it doesn’t matter. Right. Like, I need to see a long term relationship with you. So yeah, a lot of the growth was that and then full bursts, full bursts plus some money out so leveraging off of that

 

Erwin  

it does seem like every partner who does take on partners Yeah, has a journey. Yes. And usually the first they within the first couple, there’s people they don’t get along with. Right so how many JV partners do you think have come through your world? Probably like a 10 a 10. And you currently still have

 

Austin  

I have four or five now. A couple of them most of them have been repeat like of those that Most have been repeat,

 

Erwin  

which is good. So what’s one of your lessons learned?

 

Austin  

qualifying people at the beginning, making sure their intentions are aligned, and then walking them through worst case scenario, almost selling them out of it, right? Like not like letting them know the realistic picture, right? So

 

Erwin  

just tell them it’s sunshine and rainbows. So

 

Austin  

right now recent JV combo I had like qualifying I was like, where’s your source of capital coming in a HELOC? I was like, Are you guys I gotta know, man, like 7% rates, like, what happens if I can’t pull a dime out until like, three or four years? Are you okay with that? Because, you know, like, that’s gonna be stressful for you. So that conversation, right, like walking them through, if they thought through the whole picture, because here’s the thing, like, I’m an investor, you’re an investor, most people that listen to this podcast are investors, you guys, when you’re injecting your own capital, you know, the things that are in consideration, in your mind, communicate all of that to the partner, as well as some people like to hide things with the partner. So being completely transparent in that sense, making sure it’s not every dime that they have, they need to have a decent amount of reserves that are not invested into real estate, that’s pretty important as well, stable, full time income, sort of the long term view looking three, four or five years out what their expectations are at the beginning, everyone’s expectation was I want a full burn. Now I set the expectation that that may not be possible, right. So a lot of it is just being realistic,

 

Erwin  

interesting. I’m enjoying this person listening during this, we’re joking around as well, because like your path has been very aggressive, tertiary markets, you don’t invest within four hours of where you

 

Austin  

basically, it needs to be at least four hours away.

 

Erwin  

And you mentioned that you want things to be easier. Yes. So you’re choosing easier properties, like less seems like you’re buying less disasters, got better markets,

 

Austin  

better markets, better neighbourhoods. So I do still see the value in tertiary markets, right, because there’s more information asymmetry there, there’s I find this usually better deals and the disparity between knowledge of like local, local investors or local realtors, and you know what’s and what the value is truly worth strategic Reno, I feel like that info is more, more people are savvy in these big cities. So it’s a little bit harder to operate the business model that I want. That being said, I’ve ran into so many troubles with with some of the less desirable properties that I’ve had, right where it’s like not good neighbourhoods, we talked about a property we talked about this offline, a property being burned down by an arsonist, and the worst hit one of the worst neighbourhoods in Windsor. And that was such a pain in the ass. So that was one thing, nonpayment of rent tenants losing their jobs and these are mostly concentrated and not the most desirable neighbourhoods. So if I am to invest in these tertiary markets and needs to be in high quality neighbourhoods, right and I am okay to sit with for five months vacancy to find the right tenant. So I just really adjusted my expectation on a lot of things. And even slowly moving my portfolio again to some of these like bigger cities, like I wouldn’t say I would come down to Toronto, you need big money and you need big financing to be able to make that work but like London, Ontario, right, that’s a more stable market, then then like Sudbury or something like and not to shit on Sudbury and all this more, I still invest there just has to fit my current my criteria has changed for sure. But

 

Erwin  

two hours drive instead of four. Yes,

 

Austin  

exactly. But I’m okay with that. Like, I’m not driving everywhere, right? So less headaches has been a priority for me, because I’ve had cases again, houses burning down tenant quality being crap, and I’m involved in all of that, and I just want less of that. You know, that’s not why I got into investing. I’ve built great skill sets doing those things, but I don’t want to exercise those skill sets anymore.

 

Erwin  

Julie Broad Grover wrote a great book called The more than cash flow. But there’s more to being an investor than just what what it looks like on a spreadsheet. Yeah, because they detail themselves about a multifamily. They bought in to happen that the property manager in a tenant got in a fistfight, and then the tenant actually got injured quite badly. Right. So there was lawsuits. Right? It probably wasn’t gonna get area. But yeah, it seems though there’s comic there’s, you know, Stan about areas Yeah, you have less trouble right because I’m sure it looked great on the spreadsheet,

 

Austin  

but I want the quantitative part looks great qualitative is diff I almost neglected qualitative a lot of the times for for quantitative and that I’m finding that balance of why both are so important.

 

Erwin  

Because we’re joking how I my clients are buying pretty lazy for offering it compared to what you’re doing a bit later, but I want to go on more about this this house that burned down what was it triplex or

 

Austin  

a four unit so we got it during COVID as well. So it was it was a really good good discount. It was the house that was filled with drug users. It was a drug house right bad neighbourhood drug house

 

Erwin  

with finances RBC

 

Austin  

finance Yeah, but they,

 

Erwin  

we would the appraiser say nothing. Letting go in right it’s COVID

 

Austin  

Yeah, I certain COVID. Yeah, okay. You know, things appear better and photos sometimes. But yeah, so I mean it was we got it financed and then served notices on different things got got everyone to agree to leave, they don’t really care. I mean, their mobile The house was kind of beat up as well. And so sorry, it wasn’t RBC with Scotia. But same thing. Same principle it was during COVID. So photos,

 

Erwin  

so photos No, no on site appraisal. Exactly.

 

Austin  

Yeah. And things weren’t going as planned to everyone. Everyone signed everyone agreed to move out, move out date no one moved out. LTB serve the eviction notice Sheriff eviction was scheduled. And then what happened during COVID? No evictions. Right. And so got the sheriff eviction notices but no Sheriff obviously came and so the people were just sitting there rent free, whatever. I didn’t think too much of it because I was like, Yeah, once they leave the upside was incredible. It was like a pretty big four unit now it’s vacant. It’s like I’m gonna make a lot of money on this thing. Sorry Jeff, a partner on this one as well. Yes, I had a partner on this. And they were chill. They’re cool. They’re chill. This was a great partner to work with. Yeah, the numbers are perfect. Everything was panning out as planned. Cash for cubes is only $1,000 A unit. So then what ended up happening is is that obviously we’re sitting we’re waiting until the sheriff comes or whatever they are able to come and the house went on fire got a call from my partner on night and I say love and pm I ignore it. It’s 11pm sleeping or whatever. Call them tomorrow then they call it again. If they call it twice a night picked it up they explained Hey, our house is on fire the police called me I was like oh my god Alright, so we told your partner because we’re on title or yeah and then and then they called me and so I mean it was like there’s nothing we could do there was very limited information house is on fire what can you do just fire department comes puts it out wait for the information tomorrow sleepless night and I don’t hear back from anyone the police anything I call the police no new information anything that they could share went on Google search for my property my property is on the on a bunch of news articles and then one person passed away from that fire. So now this becomes like a liability thing right is there because the house had not been to but the insurance was aware I was aware everyone was aware it’s not like we hid that from anyone right like oh my god it’s it’s a knob and tube thing like what? My mind is running a million miles per minute right? So I’m like, Oh my God, if it is like this is I could actually face like legal troubles because someone has passed away. So started speaking with lawyers and all of this stuff. And started making the drive down to Windsor. Right? The day after I spoke with the lawyer lawyers turned back around man don’t don’t make that drive Don’s like why he’s like, look, this is going to be police. They’re like, what if they pull you in for questioning is like why he’s like what like, what do you plan to get out of it? I was like, Look, my house went on fire treasonable. I want to see what’s happened if everyone’s okay. He’s like, Yeah, but like, what, what do you plan to get out of that? Like, what if they pulled you in for questioning? Like you don’t just just like, wait, wait and see how this sort of pans out? Then someone else passes away? None of these people have next and kin from their injuries from the part of the injuries? Yeah. And I was like, Oh my gosh, this is like a disaster situation. I cannot sleep. I feel terrible. My stomach is turning. And really like I had no one to help me out. I’ve asked for help, right from like, coaches, mentors, and they were just like, go go through insurance. And they’ve gone through a situation like that. I don’t think they’ve had anyone passed away. But they’re just like, just figure it out. And we didn’t even get on the phone with you. I mean, they left a voice note. Yeah, they left the voice. No, I left the voice. No, I received a voice note sort of thing. But yeah, no, not not much. No. So I was like, Okay, I guess I’m in this on my own.

 

Erwin  

So I know we’re gonna do it. But but this is a coach you’re paying for?

 

Austin  

Yes, this is this is a coach. Yeah, they wouldn’t get on the phone with you. Because you’re I got a message and that was about it. And it was basically like, Go run it through your insurance to figure everything out. So that’s it. All right. Yeah. I’m got to figure it out on my own now. So well, of course, I like speaking about this right now. I was telling you like it just it gets me a little bit upset. Right. So I don’t like to dive too deep into it a lot of the times because I do get a little bit. I get upset. I hope people understand why.

 

Erwin  

Especially at the move the forgive and forget. Yeah. So

 

Austin  

anyway, so I spoke with the insurance people, the lawyer so on and so forth. And about a week later, just sitting patiently waiting, find out that it was an arsonist, right. So it’s like, okay, like, really, it’s peace of mind that there’s nothing I could have done to not prevent this from happening. Who was one of my customers? How quickly did you find the day in a week?

 

Erwin  

That was pretty quick? Yeah, it

 

Austin  

was pretty quick. The Ontario Fire Marshal and everything’s everyone was there. Do you have any idea how they figured it out? No, I didn’t. You know, honestly, like when I found that out, I was like, I was like, Okay, great. Like, this is not something I could have done differently to prevent like, stop arson, bro. No, it’s just the person went to jail. And it was probably drug something drug related, because it is a known drug building. Right? But here’s the thing, had the sheriff been able to come in the evictions weren’t held up. Everyone’s life would be intact. Right and nothing like this is almost like I don’t even think I could have projected for something like this to happen, right? Like if everything went as it should. and all of these pandemics sort of rolls in come into place like, then no one’s lives would have been lost. And the deal would have went as planned. But yeah, that was that deal. And in a nutshell, so insurance tried to screw me over. So we had to hire a lawyer to be on there. But apparently, with insurance, insurance provider reuse, I’m not going in a name is what they said that like, our insurance broker was saying that after a year, if there’s no payout, then you can’t go after the money show. Right? Yeah. Or like become significantly harder. You have to go to court and all so they were they were winding down the shot clock, the insurance people, so they’re ignoring us. So we had to hire a lawyer on retainer to be on there. But was there any any reasoning given for the delay? Yeah, they were just like, we want to speak with your property manager and my property managers like dude, like, I have nothing to do with you know, obviously, I understand property managers like, dude, like, they’re going to try to blame something on me. Oh, it’s arson. Yeah, no, yeah, exactly. Exactly. It’s arson. So what they were still super worried. They’re like, Oh, they’re gonna say I didn’t visit the property enough this that whatever. So they were worried for hours. Yeah, I don’t know, man. Like there were a little bit worried. Eventually, we convinced them to do it. So they ended up doing it. We hired a lawyer for the property manager, which I think is responsible for the property match and want to have a combo with an adjuster with the lawyer. It’s good, right? Getting a lawyer doesn’t harm anything. So we paid and then they had the Convo and then the insurance company went MIA on us and for like eight months, and then following up. Yeah. And then the last day, the last day before the payout, our lawyer said we can register this sword. I don’t remember the technicality. We can register something that shows we’ve done everything we can and then we have to take out the cord after that, that last day, they paid us out. And it’s like, okay, hallelujah. Thank you. But it was it was

 

Erwin  

like they’re checking to make sure you’ve covered all your bases before they decide to pay you.

 

Austin  

Yeah, no, they were just trying to run down. Yeah, exactly. If we didn’t register that. I don’t remember what it is called lawyers, like you could get into a heap of trouble because a good insurance company said we are will pay you out by on a day to day last day. That is like you have to spend 3000 4000 to write this letter. It’s like, oh, no, he’s like, it’s up to you. I would suggest you do it. Austin. I was like, God, I have to spend another few 1000. Let’s do it. Because I don’t trust these guys anymore. But when we registered the letter, they ended up releasing the funds to us bad areas, bad neighbourhoods, right? These are unlimited measures. So what do you do with the property? Now it’s just vacant land at the moment, because by the time all this got settled out, it was near this near the peak of the market, right. And so the market interest rates started going up. So we didn’t decide to develop or do anything on it. We’re like, let’s just hold off on this. We own this land free and clear. Plus, we have an additional payout, we can explore developing it later. Clear. The insurance paid out large, so you have to pay pay out Scotia as well, because the property is not there. So we own the land free and clear. And we have like a payout as well. So we’re just sitting in just land banking at the moment. Vacant land is not really as saleable right now. Yeah, in that area. So

 

Erwin  

an area Exactly. Someone wants to build a custom home, we like really beautiful three 4000 square foot home and doing that.

 

Austin  

The other thing is zoning, the zoning, it was grandfathered in the four unit so it’s really illegal non conforming for Yeah, so now it’s like a get somebody’s going to be able to build a four probably not unless, you know committee of adjustments, and I doubt they will. Maybe there’s precedents there’s a lot of four units and six units, but all of them have been grandfathered in, but you’re chancing it. Yes, yes, yes, you’re you’re spending a lot more money and taking a lot more risk than you would have otherwise. But I don’t worry about that one too much now, because there’s really no there’s no risk. It’s just lad now. Right?

 

Erwin  

So when we talk to my realtor like Matt Bigley about it, in case, because a lot of cities have changed their their bylaws and zoning to allow for more units. Yeah, I would think Windsor is not far from that.

 

Austin  

Yeah, the lot size is quite small. It’s 30 frontage. Oh, and it’s but it’s deeper. Right. So the 14th, it was built really deep. And the parking was at the back. I just don’t think it would have the side offsets and all of that. But still, like, I’m not in a rush to do it. Bad area one because I know development. Like I don’t want to really develop in a bad area. Because I know there’s going to be break ins materials being stolen. Like I just can’t even I can’t even imagine the amount of headache it’s going to be so I’ll wait till the market recovers and sell it off. Because we’re not we’re not really losing anything by holding it right now.

 

Erwin  

Yeah, yeah. So just to not scare folks, my client at a different insurance company, like the same one I use, so they had to fire the tenants guests and properly dispose of a cigarette, right on the house. So like a bedroom was lost. But if you lose a bedroom, you lose a lot. Right? So like the she got a pretty much a brand new house out of it. But everything was quite smooth.

 

Austin  

Yeah, you gotta watch out with which insurance company that you use, right. And these are like learning lessons for me is like what’s the most affordable option because you don’t imagine a house is gonna go on fire. Arson. Yeah, homerun. Yeah. And so like now, I’m much more wary of that, right. Like I look through the insurance coverage or I’ll speak with my broker and it’s something The brokers fault because I like, you know, it’s ultimately an investor’s problem just to go get me the cheapest one. So it’s not his fault. It’s my fault. I’ve taken accountability for it. So I’ve learned from that as well.

 

Erwin  

Yeah, yeah. All right, this isn’t all scary, because you’ve done well for yourself.

 

Austin  

Yeah, I’ve done I would say, I’ve done really well for myself, where I’ve gotten to the position where I can definitely choose to work or not to work. Yeah, so I’m scaling in a much more responsible manner. I don’t feel rushed to do anything, I’ve hit my major goal of quitting my full time job, obviously, selecting entrepreneurship, but having the ability and the finances to be able to make that selection without being stressful, right like, because during the during where wholesaling was drying up, and you know, we’re putting a lot of money into or like we had savings and wholesaling, but the bank account and wholesaling was was was going down. I wasn’t trust, like I had my liquidity I’ve done well for myself, I participate in the bull market, I didn’t over leverage, again, the last time I refi, it wasn’t like when I quit my job, which is in 2021, in February. So all of these properties were below 80% loan to value. So yeah, I think I’ve definitely adjusted my portfolio accordingly. Since I’ve gotten started investing,

 

Erwin  

what would you tell a new investor? So that’s a question What would you tell a new investor today to do

 

Austin  

be irresponsible with your growth? Right, and, and realise that in social media, not not everything? Not all the answers are in social media, social media is like basically just a contest of who’s doing the biggest and best things. And you see a lot of people go quiet when when things hit the fan, right? So do things at your own pace, understand risk, right? Understand that mindset is important. But mindset isn’t necessarily an excuse for ignorance. I feel like that’s a lot of people’s downfall is mindset was number one. Were all mindset triumph, risk mitigation in their back of the voice in the back of your head can definitely hold you back. But it can also keep you’re responsible. Right. So understand that risk management is extremely important. In real estate, it’s a long term investment on slow and steady growth is the best way to go about it. Right. For most people, for most people.

 

Erwin  

It’s funny, because like, I have some friends who are like, very, very good entrepreneurs. Yeah. And one of them said to me, like mindset important. Or being a visionary, important? Yeah. But there’s lots of them. Yeah, it’s actually the execution that’s hard. You need both

 

Austin  

you need like almost like both. Either you have the skill set in both, or you need, like a partner who’s able to bring that other balance, because you could get out of control. Right, and then take on more, you know, people who have, everyone has probably known people in the community. Yeah, that’s gone. Well,

 

Erwin  

you’re you’re you’re in Yeah, certain communities are very aggressive. Yes. Right.

 

Austin  

Yeah. You know, like, some people make it out. Some people don’t. But we’re just crazy. It’s not supposed to be Yeah, but the people who make it out, you’re like, even me, like I was earlier. For me, it was 2020, where I’ve had that thing, like sorted down to but it was a split. I survived that. But that was enough as a for a wake up call for me where it’s like, let’s change the way that I approach things. But not everyone. Is that lucky?

 

Erwin  

So say, say Austin is beginner today. Yeah. What are you telling him to do? How are you telling him to invest? How am

 

Austin  

I telling them to invest? Yes. So in this current market that we’re in Sure, sure. Sure. Yeah, honestly, when I got started off at about $40,000 saved and I know I’m I kind of what I was talking about earlier is like, invest where there’s like a little bit of headache. But the reality is, when you’re capital constrained, it’s better to be in the market. That’s what led me to be successful, I was able to get in the market and just not participate at all. So I would find a market where you can stretch that $40,000 to make it work for you. Whether that be entry level fixer flips or entry level burrs to first, like understand the mechanics are real estate with relatively low capital risk, right? cash flowing assets, exploring the borrower partnering with someone who has capital, both the guys starting off investing and working together through that, and then slowly scaling your portfolio down that way. That’s one thing I feel like I’ve done right in my investing journey is that rather than complaining that which is a lot of people, oh, I can’t invest in Toronto, dadadada da, and we have this much, I didn’t do that I got off my ass, and I found an opportunity that I could take advantage of. And that’s what led to the majority of my wealth, how to not made that first step I wouldn’t be I wouldn’t be sort of where I am. And now I’m repositioning, right so I had to go through that headache, I had to learn those skill sets. I have to be willing to eat shit, for lack of better words, to be able to build something, sell things off and then be able to slowly pivot back in to some of these major markets, right? So it’s better to be in the market than not to be involved at all right? Because if you’re sitting with 40 or 50,000 and waiting to be invested in Toronto, Hamilton, London, Ontario, but you’re gonna be waiting forever.

 

Erwin  

Yeah. So say I want to start in Windsor, for example. How much do I need to start? Push capital a lot

 

Austin  

more, a lot more. So I think most single families are going for like 400,000. Now I would almost move it towards Northern Ontario. Honestly. Get to sort of started off and how far north Sudbury, Sudbury, right. Well, it sorry, it was a single single family home in Sudbury, Sudbury, it depends on which area I like you can get some the two hundreds, you can get some of that three hundreds, right. So you can make the numbers work there in Sudbury still. But again, like just understand that it may not be ideal, but it is a stepping stone because sometimes it is easier to get in the market. And he just did not participate at all right? Because you learn the most when you’re involved in these transactions. So yeah, I mean, I would look for a cash flow and market summer something that you can afford, whether that be turnkey, or whether that be a value add ideally value add to make your money sort of work for you. And if you don’t have enough for value add, find someone who’s new again and kind of partner up there and build a home base and scale from there. That’s exactly my blueprint in Windsor. And I’ve made mistakes like on how I’ve gotten about like how I’ve gone about like bad neighbourhoods, so on and so forth. But the general blueprint, I would do the exact same, maybe like some of those small decisions I made that were wrong. I would exchange but yeah, and then and then from there, again, you can reallocate your portfolio accordingly.

 

Erwin  

Right. But let’s restart our Austin. Yeah. What about modern day?

 

Austin  

Modern day Austin? Yeah, that is good neighbourhoods.

 

Erwin  

Because you said you have a house in Toronto that you’re working on? Yeah. So

 

Austin  

I would never I would never prior I would never, ever imagine Toronto, I was always a cash flow. Why would anyone do anything in Toronto? Yeah, so I got I got a deal in Toronto, 830k. And little Portugal, a semi detached house 92%. And vendor take back 3.2% interest rate, I can do a duplex conversion, I was looking at a couple of options. And architects said I could do a duplex conversion on a pretty decent budget there. I could do a single family flip. Or I can live in it myself. So you have multiple options. multiple options. Yeah. And here’s the big thing is I don’t mind living in it myself, if none of those things pan out. Right. So like fiance approval waiting, but yeah, no, no, she’s approved. She’s, she would love to live in a semi and near downtown Toronto. So yeah, I mean, that has multiple exit strategies. And also, I mean, you think about it like the VTB. Right, the VTP is 3.2%. So the carrying cost is not significant for a project like this. And again, like you’re talking about around less than a million dollars for a semi an a primary. So I feel like the risk is, is relatively low there. I would have to go back to 2017 2018 Prices for me to lose money on this deal.

 

Erwin  

Yeah, how’d you get through the BTB. On this week,

 

Austin  

the guy owned it out in cash, he was somebody nine years old. First, we’re doing everything traditional. And I was like, oh, man, the numbers aren’t gonna work as much. If I get private, too much risk, so on and so forth. I was like, Hey, do you own this in cash? She said, Yes, that’s it. Do you know what undertake pack is? No, then just explained it to him. And the guy was really cooperative, right? Not every seller is going to be super cooperative, but he was. And so he was, we started with 95%. And then he’s like, I’m okay. Then the lawyer is like, No, I don’t I don’t like 95% too much shots. Like, he’s like Austin, can you do any better? It’s like, 92. And he said, sure. Yeah, I’m not gonna sell myself short. So he said, 90? Yeah, it worked out. It worked out really well. This one isn’t really as much of a negotiation tip. The person who was just really easy to work with? Yeah, all good. No one can be like 92. Now, it just ended up being locked that the guy was super flexible.

 

Erwin  

What was it about the VTB that was attractive to the seller, he

 

Austin  

79 year old. So different sort of person, not not an investor with apartment buildings or anything like that very much an investor who has bought one or two properties at a time, sit on it for 10 years started to appreciate it’s a different sort of investor than you and I are right. So obviously, their priorities, their goals are a little bit different. The guy 79 years old, he’s like done holding properties. He’s done what he’s done in real estate. And so he just wanted to, I could tell that he just wanted to make sure that the next generation or whoever’s buying this to succeed, or almost like a mentorship, sort of role, and you can get that vibe from him. We sat on the porch, and we spoke for an hour just about random, this building rapport and all of that. And I could tell that he was like, he liked being that guidance figure. So he wanted to just make things work for me. Right? So it wasn’t about what’s appealing of a VTB. Surely there’s nothing appealing for him and a VTB right, like save on capital gains this that what who cares? The guy Sunday nine, right? Not a huge deal. And he’s made a lot of money in real estate already. So it was just more so I explained to him like, this is how I’m looking at things. He agreed with me through my thought process. I was like, This is what I need to make it work because it’s how it changes the numbers and he was just willing to give that right so it’s almost like knowing, I guess it is knowing who you’re negotiating with, right? Like I feel like elderly people who have had all the success in the world. Some they fall into two camps, one of them stubborn in prices. If you don’t meet my price, then doesn’t matter. I can just hold on to this thing. And the other one is they actually wants to get rid of the port. folio and doesn’t mind taking that sort of mentorship or guidance approach with the person who’s buying in next. And that’s where he fell into.

 

Erwin  

So how did you find the property? Yeah, this

 

Austin  

was from a bird dog, actually. So I have a couple of bird dogs and the wholesaling programme. And one of the things that we do is multiple things that we do is again, expired listing, Kijiji ads, door knocking, cold calling, so on and so forth. This is from DGI, we’re just one of the first ones to reach out. The guy was, first he didn’t want to negotiate on price at all, so 870, and that the numbers didn’t work out at 870. We had it under conditions for a month 30 Day inspection condition. By the end of the 30 days were like, look like we tried our best, whatever way we caught it, whatever quote, we get, the numbers aren’t going to work out. So by the end of the 30 days, we’re like we’re still interested, but it needs to be at this price has to change because it was under contract for 30 days. Let’s just get this to the finish line. First, he wasn’t negotiable. And so by waiving conditions and negotiating the price lower, we got the deal done. But again, we’re competing against another wholesaler on this deal, a really big and more experienced wholesaler as well. And same thing the guy was not willing to budge on pricing. I guess the other wholesaler tried to push too much on the pricing aspect. So we just took it down. Instead, we weren’t able to find a buyer and we weren’t able to do it ourselves. Not at the price. We got it under contract for somebody sounds pretty cheap. It is it is but it’s located on Dufferin. So right on the main road. So you do take it here on price. And you do take it here because on a busy road or main road. Yeah, so marketability is going to be something to consider 870 is still a good price. Don’t get me wrong, but its marketability this risk at that point, it’s not like a no brainer price, like you want to get it at the lower eight hundreds, right, especially when he wasn’t giving any VTB or anything. So private money and all of that you add that in your transaction costs before before doing anything in the property, land transfer tax all of that, like it’s probably like low, mid nine, hundreds, for touching anything. So it didn’t work out for a lot of people, including ourselves. But at the again, at the end of the condition. A lot of people if they dedicated that much time with you throughout the process, they would rather just work with you then start from square one again. So we had that advantage. 30 days passed and the markets picked up. So we started seeing recent comps, and we’re like, oh, these numbers are juicy. But let’s get it down to this price. And it all worked out.

 

Erwin  

Yeah. So deal made sense to you not done. Yeah, the deal made sense.

 

Austin  

Especially with like the past 30 days have been insanity. Right? So the column started showing as Alright, this is like we Yeah, yeah, I think I could, but you know, like a lot of that competition is the turnkey assets because its end users. Yeah.

 

Erwin  

Is there anything wrong with the property that?

 

Austin  

No, no, no, no, there’s nothing wrong with it. The other wholesaler who’s really experienced as well, we chatted through it after I waive condition. He’s like, Yeah, like, his his thought process was exactly aligned with mine. Right. And he’s seen probably five to 10 times more properties than I ever saw. So yeah, I mean, we both didn’t catch anything. And then how much this is renovation budget renovation budget is about 85 grand. Let’s see. No, not much at all. Yeah, like if I was to show you photos of it, it is not a garbage property. It is in decent condition. But not Toronto. good condition. Like you take this and you throw it in Windsor rentable, throw it in Sudbury rental, throw it in London, Ontario, probably rentable, it’s just not up the price optimising in our market, then when you think instal for initially I was hoping for 1.1 but now just the way that the market is going, I wouldn’t be surprised for 1.2

 

Erwin  

Fantastic. All right. Awesome. Thank you for being so generous with your time for sure. Any any final thoughts you want to share?

 

Austin  

Not necessarily I think real estate there I guess this is more of a shout out to you. I like the conversations that we have because not everything is just like you know all all roses and things are going well like things do happen in real estate investing and I feel like this is the the only podcast where I’ve been given the platform to not only share the successes but a lot of the struggles I’ve gone through it if you look on my Instagram, you can’t really maybe I share struggles here and there but you know like a lot of it’s on stories it gets lost or whatever the case is but investors who achieve big things have gone through their fair share of struggles right and I think people need to realise that I’m speak to many first time investors who get into like just one I was speaking to on Instagram don’t know names they got into investing with their first asset they thought things were gonna be great and then baseman leak they have to do exterior waterproofing. open work permit that the Lord and catch oh yeah, this is the reality of investing, right? Like not everything is all rosy. And if it’s your first property where you get caught offside, it could really deteriorate you from from moving forward. So really just make sure to do your due diligence and be slow. Hosts Yeah, title, or even then like I don’t think there was moisture or a significant audit. No, I wasn’t doing the due diligence there. But like these are things that can happen if you get too ahead of yourselves, right. So educate yourself. Take Action don’t get stuck in analysis paralysis, but that also is not an excuse for being stupid and just rushing into things.

 

Erwin  

Yeah. Crazy. Yeah. Inspect the house. Your novice inspected.

 

Austin  

Yeah, yeah. But it’s like I don’t I it’s hard to blame them as well like bad advice from a lot of people. Right? Oh, there’s

 

Erwin  

tonnes of bad advice out there. Yeah,

 

Austin  

I just feel for these people. When we have the conversations like, what can you do? It’s like, you gotta go through title insurance and just hope for the best. So you got to see if they’re going to buy the seller is going to give you any sort of reimbursement, which they’re not right. I highly doubt it. If it go to court, probably. Yeah. If the seller knew about this, and what are the chances is

 

Erwin  

one, like a Porsche,

 

Austin  

I don’t know what it is. I don’t know what it is. But even that it’s still even a small one is 1000s of dollars that it shouldn’t have have costs.

 

Erwin  

No, hopefully, it’s like, you know, in rail or something. You know, a few 100 bucks, right? Yeah. Yeah. It’s not like a, you know, like an addition on the house. Yeah, yeah. And awesome. Where can people follow your journey?

 

Austin  

Yeah, on Instagram at Austin 86 on Instagram, and then I have my link tree on there. And you can just take a look at everything. What’s the six, four? I don’t know. Since I was young. I just it was the only thing available my my email is the same thing. Austin needs six at Gmail dot everything’s just Austin J six.

 

Erwin  

Oh, just because there’s too many Austin news out there.

 

Austin  

This is what Google or Hotmail recommended a long time ago. And I just went with it. Cool, nothing creative about it. Well, you’re

 

Erwin  

in the sixth. So I guess it works out. Before we go, you’ve been trying to buy condos off market?

 

Austin  

So yes, yes, yes, I have.

 

Erwin  

I have assignments, I’ve been looking for new construction assignments. I’ve had success

 

Austin  

with it before in the pandemic, which is why I’m trying to repeat it again. You know, peak fear, people want to hoard liquidity. And condo assignments are something that require a lot of liquidity for people for you to pay out profit. Most of them are international buyers. So you got to put 30% So with my first condo,

 

Erwin  

especially if they’re not appraising they I come up with even more money to come in. A lot

 

Austin  

of them are like what the ones I’m looking for, they need to have a lot of juice in the deal, which there were quite a bit, but they require a lot of capital, like the first time I did it, which is the primary I live in right now. I got it for 600,000, march 2020 assignment deal, and 730 square feet in downtown Toronto pre con. Right. So I live in it now. And then we just sold it. So I was looking for another one now where it’s like, how can I get 150k equity on the buy, not compete with a lot of people because either people are fearful of that people are not actively looking or people just don’t want to throw the liquidity and not so I’ve been on the hunt, but I’m just not. It’s a little bit different than it was before. Before people were asking for a little bit more reasonable profit or breakeven, and then march 2020. Now, they’re still great prices, right, but they’re still asking for profit. And so the injection is 330 350k for the best deals, right? Because most people can’t afford that. I could do that. But it just limits my ability to make any sort of investment moves. And I’ve kind of abandoned in that. And that little Portugal fortunately I did because a little Portugal deal fell in my hand. And that’s an that’s an even even better deal. But you know, when everyone’s running away from from a strategy, it’s there might be opportunity there, especially if you’re looking for a primary. There may be opportunity there for you. Yeah, you just need the cash.

 

Erwin  

That’s super cool. Because we’re DM diva. That is super cool. And you’re posting like you’re doing station with folks. Yeah. What do you think a good price to pay isn’t per square foot.

 

Austin  

Really, like anything needs to be below 1000 square. So young and ag like the person was willing to do I think it was 920 per square feet. So it was a three bedroom, two bath. No parking, though. And I think they wanted 760 And it was 800 and something square feet. And I was like No thank you. I’m like Sara has to be below 900 square feet. And there are entertaining it. Then someone came and scooped it up, over negotiate. But that’s okay. Like I’m not that’s not my bread and butter strategy. If I get something that is too good to turn down. Yeah, I’ll do it. But if it is not too good to turn down, then I don’t care enough to do it. I’ll buy resale and then just work on getting leads that way.

 

Erwin  

I just love the I just love the idea that you’re trying to find a deal for a primary. Yeah. Because I’ve told people to do that you’re looking for a deal. Go find someone in the assignment market.

 

Austin  

But it is still a numbers game. You got to pick up the phone and call see he was negotiable, who’s not people who are signing 2019 deals. There’s not a tonne of meat on the bone 2020 Not like these are like 2017 2018 that are about to be completed this year or next year. That’s where there’s meat on the bone, right and I’m almost trying to convince them to take minimum profit, which has not been a very successful endeavour. But again, I’m not in any rush. So that’s okay. Awesome.

 

Erwin  

I think it’s a pretty good pro tip there. Yeah. All right. Thanks, Austin for coming in.

 

Austin  

Yeah, appreciate you for having me.

 

Erwin  

Before you go if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already. Then sign up for my newsletter. Find out for yourself what so many real estate investors are doing today. are certified and increase our cash flow and if you can’t tell I love teaching and sharing this stuff

 

 

 

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