**Transcripts are auto-generated.

 

Erwin  

Hello and welcome to another episode of the investing show. My name is Erwin Seto the fourth time winning agent to investors hosted the podcast, which is this one, the number 81 podcast for iTunes and all business are focused on bringing you true experts masters of their craft. And we have a great guest for you today in real estate coach and educator Elizabeth Kelly. The term coach has been used very lightly these days. I see folks with one two properties, a 12 months experience. Some even with like longer experience, but they have like one property as a side hustle, and they call themselves coaches. Kelly has a bit more to her resume than that her own property management company manage hundreds of doors. Her own portfolio is very significant. She was a full time real estate investing educator every state Canada Having personally taught a couple 1000 investors including many of the influencers and coaches you see today on social media. Many of them offer products that they learn. For example, rental rental was a hot topic and rich, rich dad. You see today, several wholesalers and rent to own experts that Lizabeth personally taught today we touch on a couple subjects such as investment in real estate education, and some of the different options that are out there. And there’s more than ever. Some do offer better value than others. So we talk about that Elizabeth shares about her career as an investor journey to arrive at where he is today. His strategies when she started out back in 2008, very different than how she invests today. Her goals are different the markets different. I think it’s something that’s really important to investors today. As always, my intention for you my 17 listeners is for you to see how a professional investor investor is at different stages of their life lessons that you may learn so you may avoid mistakes and hopefully make even more money and we will offend many when we discuss what’s working and what’s not working. This may shock you many sad investments getting a lot of hype that will not work in 2023. Make sure you have listened before investing in any coaching or courses or even buying property. 2023 is going to be a fascinating year and here at Iowa State. We will be arming our community with the best information possible. We will be doing sharing the free webinar. We have one coming up soon how to sell a tenanted property for maximum return on January 8 17, followed by our Iowan in person networking meeting on Saturday morning, January 28. Tonight, Saturday morning, I think it’s 29th 28th written whichever it is the last Saturday of January. My team and I share our bold predictions for 2023 For our target investment markets. And we have a real estate investment trust in the house. Whereas propone of Equitana will be giving you a brand new presentation to explain how professionals buy apartment buildings, how they screen them, how they find them the numbers they need before even looking further into information. I know there’s a lot of courses and coaching that’s being offered out there. So here we’re giving it away for a very nominal fee from a very serious professional that yeah, and the second time they are a real estate investment trusts as in they are they’re also regulated on their Ontario Securities Commission. So these guys are legit. So learn how professional invest or at least learn how investing in a REIT works, including clash cash flowing from day one. If you’re on my email newsletter, then you already know how to register. If you don’t go silly. Join the 10,000 Plus hardworking Canadians already on our newsletter, you can go to www dot Koozai real estate investing.ca. Again, that’s www dot truth about real estate investing dossier. Enter your name and email and you will receive an email when we have events and new episodes of the show available. New to 2023 we will be producing a lot more free educational videos and podcasts. So if you have any suggestions or topics you’d like to see covered, please let us know. You’ll see again on our email newsletter, we’ll let you know we have new pieces of educational content available. We’re doing a lot more YouTube. Our YouTube channels also call it truth about real estate investing. So without further ado, it’s my pleasure to introduce you to you my friend was with Kelly. Hi Elizabeth. What’s keeping you busy these days?

 

Elizabeth  

Not too much. had a fantastic holidays. Lots of time quality time with the family enjoying the weather. How about you what’s going on with you?

 

Erwin  

Anymore holiday I’m actually we’re actually going on holiday next week. I think you know that right?

 

Elizabeth  

No, but tell me where are you going?

 

Erwin  

Just cruise. My daughter was sick before the holidays, so we weren’t able to fly. Gotcha. So we had to rebook everything for this coming week. Gotcha. Yeah, so I haven’t really completely decompressed yet from 2022.

 

Elizabeth  

Yeah, you had a crazy busy year, that wealth hacker conference was awesome. Thank you. I really enjoyed that.

 

Erwin  

Appreciate it. Yeah, we’ll do something similar. I mean, that we’ll talk about at lunch. Yeah, that’s some brainstorm ideas. Sounds good. Yeah. Our vision for 2023 is a bit more balance.

 

Elizabeth  

That’s a great vision to have. And I think there’s a lot of people who are in that same situation. I think, you know, the way we started 2022 In the beginning with you know, it was so hard to find properties and everybody was kind of buying, buying buying and then you know, the the steep decline started a couple of months in and I think people got to the end of the year. I think people are kind of worn out right now. And people are maybe a little uncertain about what’s coming and, you know, rethinking things. And it takes a lot, I think to admit that you know, the strategies or the things that you were doing or the way that you were thinking before, they’re not serving you anymore. So what does that new game plan look like? And I love that you’re, you know, one of the front runners in terms of, hey, we need to revisit what we’re doing because it’s not working for us.

 

Erwin  

Because for example, we’re going to talk about it is like, where your career like day job career, I don’t know what the term is, like your day job career, talk about admins, as well. And then just even what we’re seeing, I don’t think anyone expected the recession to come this quickly. And just like you’re saying in how the real estate market behaved, you know, like, beginning of the year, like no one can hire anyone. Yep. And now we’re seeing what was it Salesforce isn’t just announced 10%, layoffs and Amazon? Yeah, Amazon is 18% I believe it is. And having dinner with someone who works in a mid level pharma company, they’re gonna lose 30%. So jobs are one like we haven’t had jobs at this much risk. Since 2008, I think,

 

Elizabeth  

yeah. Here’s the interesting thing that when I was driving here this morning, I was listening to the radio, which I don’t do very often, because I’m not a big kind of listener of, you know, that kind of stuff. But what they said was that the number of jobs that were created in the last little while was much higher than they anticipated. So now they’re saying that’s probably going to lead to a larger interest rate hike, because obviously, inflation is not as much of a problem because of all these jobs that have been created. So it’s almost like this crazy, you know, on one side, we’re hearing all these companies and you know, layoffs and everything else. And then they’re like, Oh, what the actual stats, say this? And you kind of go like, where’s the balance? How do you know what to believe? And then at the end of the day, what you’re left with is, hey, these next interest rate hikes are going to be bigger.

 

Erwin  

I’m fascinated by this stuff. Yes. My thought is that like, how much job losses is enough? Because like, the US Fed notes were just released yesterday. And so people were poring through them. I’m not that detail oriented. So as read the news on them. And that was what this was what the meeting notes with Jerome Powell, and all the other staff, the US Federal Reserve, was that jobs are still too high. There hasn’t been enough losses yet. Oh, so they’re going to either have more raises or hold rates longer than they expect. Yeah. Right. Like, I can’t, I can’t believe that someone’s job, well above our pay grades to decide how many job losses is enough.

 

Elizabeth  

And at the end of the day, those are really people there’s a families that we’re talking about. And that to me really speaks to why I could never be an employee again. You know why I could never I mean, it’s one of the many reasons why I’d never want to be an employee again. But literally, I could be doing an outstanding job, I could be amazing at what I do. And my livelihood is still dependent on somebody else’s decision, somebody else’s whim or what the numbers say,

 

Erwin  

I have this friend who’s a C level executive, for a big company. So they have like board meetings and stuff, whatnot. So I’m trying to plan vacation around their schedule is really difficult. Right? For example, we looked at cruising for a certain date. So to have a cruise that worked for their schedule, cost 50%, more than the week after. Wow. As a group, we’re like, I don’t think any of us are willing to pay an extra $2,000. We love

 

Elizabeth  

you on all but we’d love you just to have your company. The rest of us are paying for it. Yeah, exactly.

 

Erwin  

So same thing why lofts investors are investors is to be free of these sorts of whatever on our time, like loss of control of our time. Yeah, I have a family member who’s in government, federal government in Ottawa. And they were just recently announced they’re required to be back in the office two to three days a week. It was actually funny conversation because she was like, Aki believe it. And like, so my question was, what was it before the pandemic? Oh, we just mean the office five days a week. Like, oh, so you went from five days a week, two to three days a week? That’s pretty good. Yeah. The world does not last, at the end of the world.

 

Elizabeth  

No, but I mean, I suspect you and I were talking earlier, you know, the idea of going back and working for someone else and having to be sitting, you know, at your desk in the office for 9am Every day. For a lot of us as real estate investors. That’s not something that we value or that we want to write.

 

Erwin  

Right. Something I want to cover was you and I are real estate investors. But we also both have day jobs. Is that the right term? would you what would you call it?

 

Elizabeth  

See I don’t think as a coach, I don’t do it because it’s a job I do it because I love it.

 

Erwin  

Okay, you have a career

 

Elizabeth  

it’s my like, passion project. It’s something that I never get as much fulfilment from achieving my own goals and doing my own things as I do from helping other people achieve theirs and to know that that ripple effect of you know someone doing their first deal or someone that You know, securing a property that’s going to provide good cash flow and get them one step closer to leave their to leaving their job. That makes me way more excited than anything I could do for myself.

 

Erwin  

Do you want to preface that by saying, not everyone can do that? I don’t know you’re in a special position. Yeah.

 

Elizabeth  

I don’t know that. I would say not everyone could do it. I think theoretically,

 

Erwin  

specific, specific to what you do. Oh, yes.

 

Elizabeth  

Okay. Yeah, that that makes sense. Because one

 

Erwin  

thing I don’t like, and you and I both agree on this policy is putting putting words in your mouth is like, what that’s being sold out there. Like all these marketing things, like quit your job. Pursue your passion. You never know, working on a day in your life type thing. Yeah, right. Okay. So then the example I often give is like restaurants and gym owners, they may love it. Those are the two businesses that banks don’t lend to. for a reason. Yeah, she’s at the highest default rate. Yeah, or the highest failure rate. So yes, you can work in your passion, you may not ever be able to stop working your passion. Yeah, you can work stop working your passion, because you have your portfolio. Yeah. But

 

Elizabeth  

honestly, my portfolio gave me the ability to follow my passion. It’s not like I follow my passion because of like, Do you know what I mean? Like, my passion is what makes me really happy. My portfolio was like my fallback. And no matter what I was doing real estate helped me build my net worth to the point where I did have the freedom to choose what you know how and what I wanted to do. And I had some health challenges in 2022, they were unexpected. And my passion gave me the ability to be flexible, so that, you know, there were times where I was, you know, spending more time in bed than I had thought or I was, you know, I had a couple of surgeries that I was recovering from, and none of this was expected or planned. It wasn’t like I started the year and said, I’m gonna go on a health journey. But it also gave me the money to hire the professionals to help me recover quickly. And it gave me the ability to hire people to support you know, a positive mindset and all those other pieces that go into it. It’s not just your physical recovery, it’s your mental recovery, because you go through life, and you just kind of assume that your body is going to be there for you and your mind is going to be there for you. And then you reach this point in kind of middle age where you go, you know, this stuff isn’t forever.

 

Erwin  

Aren’t you younger than me?

 

Elizabeth  

I don’t know how old you are. We won’t get into it. Middle Age, like the 40s middle age, because most of us are gonna live to be 80 to 90 No, we’re

 

Erwin  

living to 105 Okay, tofu for lunch, fantastic genetics,

 

Elizabeth  

and you take good care of yourself. That’s awesome. The general population what is the average age like 84? Something like that? Is the average lifespan.

 

Erwin  

We is midlife crisis, like now, which for us that?

 

Elizabeth  

Well, I wouldn’t say I’m in a midlife crisis. I say that.

 

Erwin  

You said midlife. But yeah, no. But like so then like if we’re going to have a crisis would be nourished? Yeah.

 

Elizabeth  

I mean, we’re going we’re a long way from real estate now. But I think it’s very common for people in their 40s to, you know, you wake up in the morning, and you don’t jump out of bed anymore. Like, you know, your knee hurts or your back hurts, or this hurts, you know, and you don’t have the same energy that you did. So I think it’s very common for us to start thinking about what is the next half of my life look like? You know, because when I was younger, I didn’t know what I didn’t know. But now, and I’m assuming, you know, you have ageing parents as well. So, you know, we’re sort of confronted with this idea that, you know, this is what my parents are going through this is what they’re dealing with. This is the mortality, how am I going to plan and prepare so that I’m not living that? Because my husband and I, we don’t have kids? So we can’t say okay, well, our kids are going to take care of us. Because they’re not, we don’t have any. So we need to make sure we plan and prepare better so that we don’t, you know, end up dumped in a home somewhere. With no assets and no one to care for us. You

 

Erwin  

bring up a good point. Because when I speak to when I speak to an investor for the first time, often they they’re very novice, and they haven’t planned. Right. So now they’re looking for how to get to some sort of form of financial security, financial freedom, financial peace, product, unfinished piece versus me, I have been constantly planning.

 

Elizabeth  

But you’re you You always say that, you know, you’re a worrier, right and you have anxiety, so that planning piece goes with it. But there’s other people who are worriers and have anxiety, and they do what I call the ostrich manoeuvre, which is where they just stick their head in the sand and hope that everything’s going to work out. Government will take care of them. Yeah, but I think we all pretty much have a good idea at this point that we have to take care of ourselves. And quite honestly, I love that I have the power to do that. That the locus of control is within me and I don’t need to rely on anyone else. Okay,

 

Erwin  

so let’s get into the journey. How you got there? Yeah. What did you do for a living for real estate?

 

Elizabeth  

So I had a few different careers. I have a degree. I have a science degree in kinesiology. And then I don’t think I knew that. Well. I do very little with it unless somebody gets sick, and then I take a lot of attention. And then I have a post grad certificate in sport administration. So For a long time I did I worked for not for profits, and I did fundraising ran charity events, I worked for United Way and for the MS Society and that kind of stuff. And then I moved into I got my insurance licences and I worked for State Farm at the time. And I did home auto and life insurance. And then we had my husband and I built a portfolio. And he was finding it to be too much managing the properties we had and working full time. So we made the decision that that I left my job and I started managing the properties full time and grew the business. And then he left his job in, I think it was 2014 2012, or 2014. I can’t even remember at this point. But he left his job. And then we were both working full time in our property management company. I also got my mortgage licence. And I was working with investors to help them secure funding and private mortgages. And then my husband got sick in 2017. So I had to give up my mortgage licence and get right back into full time property management, then I was teaching for Rich Dad for eight years as well, because you started for teaching for Rich Dad, yeah, 2012, I taught three courses for them. And I loved it, I absolutely loved the opportunity to get out and meet with new investors and talk about their journey and help them plan their future. And then I saw how much a year later, two years later, the same students would come back and connect with me or they messaged me on Facebook. And they were struggling. And they sometimes they hadn’t even done one deal. They didn’t know where to begin, there was all this theoretical knowledge out there. And they didn’t know how to take the points or the parts that were most relevant to them, and work that into a plan that was going to help them achieve their goals. Always the gap between theory and application. Absolutely. And I think that’s one of the biggest challenges for new investors is that there’s so much information now,

 

Erwin  

like you could argue too much. Yeah. It’s really terrible.

 

Elizabeth  

And when you’re starting out, you don’t know what’s good advice. And what’s bad advice, right? Same as you don’t know, like, who can you trust? Or who should you put on your Power team? Because you learn some of those lessons the hard way.

 

Erwin  

And also just different, like your portfolio is extremely different than mine. Like it’s everyone’s values, goals, resources is totally different. Yeah. Right. And that’s one very specific and very custom I think everyone’s playing it should be very customed. To them.

 

Elizabeth  

Yes. And that’s one of the things I was talking to one of my clients on Wednesday about it actually was that because there’s so many opportunities, and there’s so much flexibility in real estate, that everybody’s journey is going to look different, but it makes it look the same. But that makes it that much harder to figure out, what should my journey look like. And when you don’t know what you don’t know, it’s really hard to sit down and say, Okay, I’m not making a decision on this property. Because I’m missing, you know, these pieces of information. So all I need to do is get these pieces of information, and then I’m going to be confident in making a decision to move forward. So you get some people who make decisions, because they just get so frustrated that they’re like, I just have to do something, you know, I set these goals, I have these numbers, and I just better do something because otherwise I’m a failure. And then you get these other people who are like, I’m so afraid of making a mistake and being a failure, that I just can’t make myself do something. That’d be like every day. But I don’t think that is you. I think that that’s maybe the way you see yourself, but I look at you and I don’t see that. But I see a lot of decisions made to get to where

 

Erwin  

you are, that’s mostly cherry.

 

Elizabeth  

But you have to agree, right? You guys are a team. And this is another challenge that a lot of investors have a lot of my investors that I coach our couples, because it’s very challenging to go from, you know, I have a job and you have a job. And we spend eight to 10 hours a day apart. And we need to come to a consensus on like, how to manage our household. And then all of a sudden to be like, Hey, we’re business partners. Now we need to have consensus on how we run our business and how our finances interact. And that’s a very different journey than Hey, I’m doing this by myself. And I’m the only one who I need to, to make happy,

 

Erwin  

short answer. It’s complicated. It’s always

 

Elizabeth  

complicated. Life is complicated. But it’s good. It’s beautiful.

 

Erwin  

So where did you start putting in real estate? Like, did you just start investing on your own? Or did you or in combination with taking courses or

 

Elizabeth  

so I met Emma in 2005. And he already had a couple of investment properties with his business partner. And the more we kind of talked and the more I saw what they’re doing, the more I wanted to be part of it. So I bought a couple of condos as my sort of first investment properties. And we were doing I mean, this was a long time ago, we were doing duplex conversions in new markets and, you know, buying single family homes and you know, doing rent to owns and those kinds of things. So in 2008 we started taking courses with Rich Dad, and yeah, it was actually because then we turned around and bought a whole bunch of buildings really quickly. And it was amazing, like some of the people that you know, we took our courses with and we connected with like Denise and Stuart McPherson. I mean, we’re still friends with them 15 years later and we met them at Rich Dad, you know, so yeah, some of the the networks that you build and the people that you meet are tremendously beneficial years in the future, even Michelle And might go check. I mean, I had some challenging days building a property management company, and Michelle was my go to phone call, like these people that you place in your network, these people that you continue to build relationships with, they can be absolutely essential to your growth.

 

Erwin  

That’s hilarious. I didn’t know. That’s how I knew Stewart and Denise because I met them through rain. Here from the other part, Rich Dad. Yeah, not that it matters.

 

Elizabeth  

No, it doesn’t matter. And, and quite frankly, I think that, you know, that’s part of one of the challenges for newer investors is like, where do you put your time and your money? How do you choose to educate yourself? How do you learn what you need to learn in order to, you know, be confident to make those decisions moving forward? You know, what kind of strategy do you want? You know, are you focusing on cash flow? Are you focusing on network, you know, all these critical decisions you need to make at the beginning? It’s like, I don’t know, it’s like, I would imagine the high school kids feel right now, you know, they’re, they’re a year younger than we were, they’re 17. And they have this tremendous weight on their shoulders, and they feel like they need to, you know, make this decision about what they’re going to do for the rest of their life. Like,

 

Erwin  

what did you go to school for business? Okay,

 

Elizabeth  

so you’re kind of doing what you thought, but clearly, I’m not doing anything in terms of my degree. And I was actually talking to my god daughter on New Year’s Eve. And I said to her, don’t be so afraid that you’re going to do something that you’re going to make a decision, and you’re going to end up not wanting to do it. Because sometimes doing something and figuring out the answer is no. gets you closer to Yes.

 

Erwin  

It’s often your best education. Absolutely. No, I must have been finished university. Yeah. All right. Michael Delvin. finish university.

 

Elizabeth  

Yeah, I mean, unless you’re something like an engineer, like my husband, or you know, you’re an accountant, like cherry, like, a lot of us who take these more general degrees don’t end up doing very much with them. Or we end up in a very specialised branch, where that’s when the experience comes in. And it’s way more useful than anything we did in university. I mean, I wrote a lot of psychology exams, I can’t remember most of what I learned

 

Erwin  

was like more options for education than ever, everywhere, formal post secondary courses being offered by real estate people. There’s never been this many options. Now, when I started out, I think there’s really only two, I didn’t know that Rich Dad was available for courses back then I joined rain. And like, really, they were like the really the only ones. And they weren’t even not based in Ontario,

 

Elizabeth  

I don’t see rain as sort of being in the same category as some of the other ones. Like you look at Rich Dad, and key spire and some of the other big ones. I mean, they’re, they’re all different. They’re all different. But a lot of the formulas are the same, like the process is the same, and the end goal is the same. So really, I think what you need to focus on is what is the quality of the information that’s delivered? You know, our need? Yeah. And if you’re someone who’s looking to really gain information, then your focus should be on who’s going to provide the greatest quality content, who’s going to teach me the most and less about, you know, are Is this a place to network? And I think that that’s one of the things is that there’s so much competing information coming at people now. It’s how do you make a decision about what’s the right thing for you,

 

Erwin  

is thinking about my own journey, and I’m cheap. So let’s start with that

 

Elizabeth  

frugal, the words frugal, and we’ll use both.

 

Erwin  

So I don’t poopoo on a certain organisation. I’ll use a timeshare sales thing and with the lever as an analogy, I remember cheering I sign up for this presentation. Yeah, I forget what we got for free. I think we got a free night or to it like up in Collingwood. Oh, I

 

Elizabeth  

think I went to the same one. Yeah.

 

Erwin  

So we saw the dog and pony the required pitch that you had to go through. And it all sounded wonderful. The salesperson who wasn’t really a salesperson. Yeah, but she was a she was a timeshare owner. She’s really just sharing her experience. Yeah. Lovely Lady, lovely lady. You never would have. She was a professional salesperson. Wonderful pitch. It all sounded wonderful. But cheering I went in with a plan. We’re not buying anything. Right. And like, wow, I was so tempted. Yeah. Because I want to do my due diligence afterwards. So then the other pitch, I said, no, they brought in the closer. I still said no, he got mad at me. Whatever. And we said we’re not buying anything today. Yeah. And then my first thing I did when we left the room got on my phone. I did GG I wanted to do gene check. Can I buy this timeshare from someone else secondhand? Yeah, and I quickly found out I could buy the exact same thing that they’re selling me for 10 at 20 cents on the dollar. Wow. Because their senior people who no longer wanted it. Yeah. So I get pie for pennies on the dollar privately and get the exact same thing. Yep. But then you think about all the people who signed on the spot? Yeah. Was it doing the basic due diligence? Yep. And I see the same with these courses and networks and memberships. Right? The analogy I give is often you know, it’s talking to someone. Some of these membership groups are like $30,000 And like, Okay, do some comparison shopping. What do I get for $30,000? Versus I can hire a one on one coach for usually a third the cost somewhere around a third? Yeah. 30 to 40% of like 30 to 40 cents on the dollar I can get Hmm, I really quality coach one on one?

 

Elizabeth  

Yeah, I think it’s about knowing, knowing who else is out there, like fully researching all of your options. And some people, you know, it is I mean, we were in, I think we sat in probably a similar room to you. And we had the same thing, my husband and I said, we’re not buying anything. And we had just taken our negotiations course with Rich Dad. So we literally sit and picked apart all the different negotiation tactics in there, we’re keeping notes, and then we went out afterwards for lunch. And we compared notes about what strategies did they use? But what are they good, they were relatively decent. They definitely weren’t professional sort of salespeople, but certainly they were, they were probably my estimation, they are probably realtors, something, you know, starting newer realtors, so they would make the commission on that that was my estimation. But I think it’s really hard for people who are starting out to have that critical thinking, it’s much more likely that we become emotional. And I think sometimes that’s where some of the bad decisions get made. You know, whether it’s looking at a deal, whether it’s looking at a partner, whether it’s looking at investment opportunity, is people get emotional. And I don’t want to in any way disparage I mean, if I hadn’t spent my time with Rich Dad and I invested double what you had quoted for my education at rich dad. But the way my husband and I looked at it was he hasn’t had an engineering degree, I had a science degree, we both invested money and time in this, if we were going to invest in our real estate education, then we just needed to make sure that we took action and made it happen, which we did. The challenge is when you invest that kind of money, and then you still don’t have the pieces that you need to move forward. And my husband is the personality type where he is supremely confident that no matter what happens, we’ll be able to figure it out. That is not to say that every deal we did made money that we never made a mistake that everything was roses and sunshine, it definitely wasn’t we learned some hard lessons. And we learned some expensive lessons. So you just need to be prepared for that. And recognise that, you know, sometimes you’re going to pay more if you go to a dealership than if you bought a car privately, because there’s overhead to pay for and there’s advertising to pay for. And there’s all those other things. So there could be other options out there that are not as as expensive, or that might be a better fit for you. But there is a I believe there’s a time and place for you know, group collaborations, group education, those kinds of things. Just do your research and know what you want and need.

 

Erwin  

Just exactly to your point. There’s so many options, and people need to know what’s right for them. Yes. So a lot of these programmes a lot of the more expensive programmes are meant for people who are going to go full time. Yes. All right. I think they all know, maybe 3% of the people that go through will be truly successful full time, maybe 3%. So then knowing that, it’s like when I went to, like when we’re having our first child cheering I went to these breathing classes at the hospital for like,

 

Elizabeth  

do you mean like Lamaze? Yeah, and no. birthing classes?

 

Erwin  

The objective was so that you could go through delivering the child? Yeah. Without taking pain medication.

 

Elizabeth  

Right. Okay.

 

Erwin  

So my first question was, how many people take the epidural? Yeah, impossible nurse at 80%. Like, okay, we’re gonna do this, we’ll just do that.

 

Elizabeth  

And then you look at it now, when fully a third of births are C sections. So I mean, it’s not even as much of a factor at that point, like you don’t have a choice in the matter.

 

Erwin  

My point is, if you go in knowing you have a 97% chance of not leaving everything that you’re never going to teach there. Maybe it’s not for you.

 

Elizabeth  

Yeah, that’s an interesting point. I hadn’t thought of it like that.

 

Erwin  

Because generally, my clientele is all side hustlers. Right? They’re looking to build like a portfolio of like, one to 10 properties, and keep their job. They like their job. And so do they need all of that? I don’t think so. Personally, the challenge

 

Elizabeth  

I have, with some of the sort of bigger education programmes is it almost feels like you come up with kind of just enough to be dangerous. So you have, you have, you know, a lot of theoretical information. But again, it takes us back to where we started today, which is, how do you take all that theoretical information and shape it into a plan that makes sense for you, that’s going to enable you to achieve your goals in the shortest amount of time possible. And it still doesn’t give you all the people that you need to know and all the information that you need to have in order to make decisions and those kinds of things. So I mean, I’m a little biassed, I’ve had coaches most of my life, and I fully believe in the value of coaching. And I think that that’s kind of the niche that coaches fulfil, is that it helps people when they have that knowledge, it helps them figure out their individual journey.

 

Erwin  

I’ve had a course. I’ve had coach for almost 10 years, same coach.

 

Elizabeth  

It’s Marianne Gillespie. She’s amazing. Yeah, she’s super inspired something special. Yeah, she is.

 

Erwin  

She’s so humble.

 

Elizabeth  

She’s pretty amazing lady.

 

Erwin  

Okay, so what I find more recently, the last five years, last couple of years, I don’t know within within 10. So we haven’t had a bear cycle within the last 10 years, which is also the same time some of these groups were created. Yes. So then what I find his missing is experience, which is why we have you on this show.

 

Elizabeth  

I appreciate that. Now, let’s

 

Erwin  

talk to your investor journey because your investor journey has changed. Yeah, like your original goal is very different than what your goal is today. Yeah. And that’s why I want to discuss it because people’s goals change. Yes, people change. People situation change, and gamble, just so we talked the beginning, everyone’s investor journey will be different. Everyone’s goal is different. And that’s why I kind of one minute talk to your journey so people can can see what they like about your journey. Maybe they were like, oh, I want to do that. Oh, I like that. That makes sense. To me. That’s where I am in my life. I want that. Yeah. Right. So you’re all over the map.

 

Elizabeth  

The first thing I think that people have to get comfortable with is the idea that, and this was part of my journey was I thought, you know, everybody talks about buying real estate and buying real estate and buying real estate. And unless it’s a strategy, like flipping, very few people talk about selling. So I’m like, if I want to sell my portfolio, I must be a failure, I must be a bad investor. And it took a while for me to come to terms with the idea that I want things in my life that serve me. And at around the same time, when I started thinking about wanting things to be different, I hired my high performance coach. And what he helped me understand is that high performance is not about never making a bad decision or never changing your mind. It’s about your ability to recognise where you are, where you want to be course correct or pivot as fast as possible, so that you are minimising the amount of time you are doing stuff that doesn’t serve you. So as soon as I learned that piece of information, it was like a light bulb went off. And I was like, I don’t want to do this. I have bought myself freedom from my job. But I don’t have the time freedom that I want it. And so I started having conversations with Emmet. And Emmett was struggling with the same thing where he was like, no, like, we worked so hard to you know, buy these properties and build our portfolio and blah, blah, blah, I’m like, but we’ve we’ve increased our net worth. Now we want to buy our time back. So if we sell our properties, then we have this pool of funds. And we can move into different things, we can move into land development, we can move into new construction, we can sit back and do a bunch of private lending for a while until we find you know exactly what we want to do. And as we started to make those decisions, all of a sudden, it was like the stars kind of aligned for us. And you know, things kind of became clear. And it was at that time, when we started selling the properties that my health started becoming an issue. And it was almost like the universe. And at first I was very upset. And I was struggling and disappointed. And I was like I’m still yelling, and why am I struggling with health issues. And I realised it was basically the universe going, this is the time for you, you made the right decision. You’ve given yourself time freedom. Now you can choose how you want to spend your time. And that made me so excited. Because now I get to choose. And this is one of the great things about being an entrepreneur, I get to choose my clients. Just because I do a discovery call with someone doesn’t mean that I’m automatically going to take them on as a client, if I don’t feel that they’re, you know, coachable and open to feedback, or if I don’t feel that I have the right skill set or the right experience to serve them fully, then I’m probably going to refer them to somebody else, somebody like Christian who is, you know, an amazing coach and super skilled and experienced in his own areas, he might be a better fit for someone. I don’t have to take every

 

Erwin  

geography because His specialty is within a certain small radius. Yes,

 

Elizabeth  

yeah, exactly. So I don’t have to take on every client the same as every client doesn’t have to choose, you know, a specific like, each coach, just because you talk to a coach doesn’t mean you have to work with them. Just because you talk to a realtor doesn’t mean you have to hire

 

Erwin  

them. Just because you like it or Instagram doesn’t mean you have to work with them. Exactly.

 

Elizabeth  

Exactly. So, you know, the ability going back to what we were talking about the ability to recognise that what’s going on right now in my life isn’t serving me, what does it look like if it does? And asking those kind of bigger questions because I think a lot of what we spend time doing as real estate investors is doing, we’re doo doo doo doo doo doo, I find a job or find a property run numbers, you know, look for Power team, like we spend a lot of time doing sometimes we don’t spend enough time sitting back and going, what do I want? What is the life that I want to create here, I have a couple of new clients who started with me recently, they don’t want to leave their jobs. They just want to make you know, $20,000 a year because they want to, they want to have a really good travel, trip plan, whatever it is, you know, whether it’s two trips a year, whatever it is, they just want to travel and they want something that’s going to fund their travel, they work for the government or they you know, work in Department of Defence or whatever. And you know, so they’re going to have a good pension, they’re gonna have, you know, a relatively easy job. They just want to improve the quality of their life and that’s okay too. But they’re being required

 

Erwin  

to go back to the office.

 

Elizabeth  

I wouldn’t want to go back to the office myself, so I can’t really judge on that but

 

Erwin  

I just have to give up that kind of income though.

 

Elizabeth  

It is Yes, it is an for me it is pretend that when Emmett left his job, that everything was roses and sunshine would absolutely be disingenuous, because it was tough. You know, we didn’t do a great job at the time of saying, Okay, how much is the income that needs to be replaced? And, you know, what does this look like? So he went from six figures as an engineer with, you know, full benefits and everything else, we went down to literally zero income. So then all of a sudden, the money that we were churning and continuing to put into our portfolio into renovations, repairs, upgrades, and growing, all of a sudden, we couldn’t put that same money, and we had to take the money out to support the household, and neither one of us had business degrees. But a lot of people when they become real estate investors, you don’t realise now you’re a business owner. So you need to know about it. And you need to know about marketing and social media, and you need to know about budgeting and financial planning and cashflow analysis and some legal stuff, do some legal stuff, like, you need to know all of that all of a sudden, and there’s not very many people, you can call for help with that.

 

Erwin  

So that’s why you need a coach, if you’re going to be certainly serious. Yeah. And there’s,

 

Elizabeth  

again, you need to know what you need. So if you are someone, no, but then you have to do your research. But so for a lot of people, they choose a coach who just helps them in one strategy, which is fantastic. But then it takes them back to they don’t have the business foundation they need. They don’t have you know, the corporate structure setup, or they don’t, you know, have their financing piece in place, or, you know, they’re missing pieces on how to like analyse markets and run numbers. So they know a strategy, which is great. But there’s other pieces that are missing.

 

Erwin  

And then I’ll add to that the piece I think that’s missing often is experience to know what a deal looks like.

 

Elizabeth  

Yes. And you know, what, honestly, people’s ideas of what deals have looked like in the last two years, there has not been the number of deals that there used to be, I mean, with with the amount that people are paying for properties, and the bidding wars and the inability to put in, you know, conditions, a lot of what people were buying as deals were not deal. So we need to get reacquainted with what is the deal look like. And the fundamental is we need to be buying under market value. That is a fundamental that has always been true in real estate. And it is more so true. Now, as the market is continuing to decline. Because I don’t for a second think that, you know, as of next week, the market will start to recover. I think we’re probably looking at two years, before we really truly hit the bottom because now we’re about to go through a phase where all those people who were qualifying for mortgages at the stress test, were above the stress test, all those mortgages are coming up for renewal. And there’s people who are not going to be able to afford to be able to pay 7% interest,

 

Erwin  

there’s probably gonna be some inventory, some distressed sellers coming on the market.

 

Elizabeth  

Absolutely. Absolutely. So that presents opportunities for people who have done their homework and who have educated themselves. And they’re working with a good mortgage broker and they have access to capital, they will have the opportunity to buy under market value.

 

Erwin  

Here’s the other challenge that was that. I find some novices are depending on inexperienced coaches for to to help them to qualify what a deal is. I spoke to an investor just two weeks ago, horrific deal that her coach that her coach checked off on both her realtor and her coach past it. I said, if you were my client, I wouldn’t even have shown you this property, let alone let you write an offer on it. Yeah, right. I knew right away, this was the no go. It’s possible. The coaches just simply experience. If they just believe what they saw on a spreadsheet, it looks like a good deal. Right? The realtor, they’re at a market. They’re under market realtor. They could have the best intentions. They just didn’t know any better. And then let them the investor definitely did not know any better. Yeah. All right. So again, we say do your homework, it means a lot of things to different people.

 

Elizabeth  

It does. And so many of the fundamentals that have been taught since 2008 have been very much applicable to a growing market. And there’s not a lot of people around who have seen how to function in a market like this. And I’ll be honest, I’m not buying right now. I am not buying right now. Because next week, next month, next year, it’s going to be worth less than when I buy four. So I would prefer to buy when prices are lower, because it’s gonna make my cash flow more appealing. Even if the interest rate is 1% more.

 

Erwin  

I’m okay with that. Because again, because you’ve done like everything. I’m sure there’s lessons for most everything

 

Elizabeth  

you think and where you want to go now.

 

Erwin  

I don’t have the time for it. Here’s one question you want to ask? Because if I recall correctly, you used to do a lot of small town investing? Yes. Yeah. Would you do that today?

 

Elizabeth  

I’m not right now. So again, this is part of knowing and understanding the fundamentals of different strategies, how to match them to your market and how to then coincide with your goals. So let

 

Erwin  

me pause you there. Yeah. I think the better way to frame this question is and I think a lot of listeners will pretend appreciate this as if they’re on someone’s list. For example, someone who puts together rental owns. My experience has been that 10 times when I get the email. I’ve never heard of the city before. town or city? Where’s located before? Yeah, and it’s in Ontario even. Right? I grew up here. I don’t know the name of the city. And to me, that’s a red flag. Okay, what do you think about that?

 

Elizabeth  

Well, I don’t think that’s necessarily a red flag. So I bought in smaller towns, because I bought for cash flow. So typically, you’re going to be paying less money, and you should be generating a decent cash flow. If you’re buying in a small town and there’s no cash flow, you’re not going to see appreciation either, because appreciation comes from the larger markets. So I mean, you’ll you might see a couple of percent a year, but you’re certainly not seeing what you would see in Toronto or Vancouver. Oh, but there’s in between, though, yeah. So at but then there’s in between, there should be a bit of a balance between cash flow and appreciation. And you should see a little bit of cash flow. And you should see slightly more appreciation than in what I call tertiary or smaller markets. Whereas when you buy in tertiary or smaller markets, you’re primarily buying for cash flow and appreciation. I mean, we should always consider appreciation is gravy. Obviously, in a market like this, there’s not a lot of appreciation, but the cash flow was my primary concern. So if you’re looking for cash flow, and you have done your analysis, and you you know, the economic fundamentals of a smaller market are good. I don’t have an issue with that. What I do have an issue with is when people are trying to have everything in one deal, the likelihood that you’re going to get cash flow and appreciation to build your wealth in one deal is is highly unlikely, especially with the prices in Canada, you can get that more in the US to be honest, I’ve been looking at deals in the US lately. And it’s definitely because your prices are just lower. They’re so what I go back on buying in smaller towns, no, because it gave me the cash flow and the ability to be able to create the wealth that I needed to then sell, reposition myself and go with strategies that give me time freedom.

 

Erwin  

Just try quantify for the listeners benefit the Calvert, for example. I think their threshold is they don’t invest anything on any. They won’t land on any property in that town less than 50,000. Somewhere, right? Yeah. 1000 for you. Yep. So

 

Elizabeth  

well, no, my town. I mean, Kirkland Lake is 10,000. Right?

 

Erwin  

Imaginary, your expert was a little bit different.

 

Elizabeth  

I wasn’t always I didn’t start out an area expert, I kind of became one because of spending so much time there. And being so active in the market. I think that’s another challenge that new investors do is they try to become an expert on everything at once. It’s important for disaster. It’s important to pick your niche, you know, choose your market, choose a strategy, become an expert, and then grow from there. Don’t try and know everything about everything all at once.

 

Erwin  

No one will ever pull the wool over your eyes. If you are an expert in that subject area in that neighbourhood 100% in that property strategy.

 

Elizabeth  

Yep. And I love it. You know, I get people calling me for property management. And they’re going, Oh, my realtor told me I could rent the unit for this. And I’m like, no, no, you can’t you can’t rent it for that. That number doesn’t even make sense. So

 

Erwin  

it’s important work. If you offered your lease, go on Kijiji Facebook marketplace, check with rents were before the festival festival, your Realtors telling you?

 

Elizabeth  

Yep. And putting the right people on your team. You know, do you know the right questions to ask to make sure that you know your accountant and your lawyer and your mortgage broker and your realtor that they’re the right people for you? Because let’s face it, how many realtors are there in Canada? Right. And there’s a very, very small percentage of them that I’d actually want to work with.

 

Erwin  

Yeah, just being in the same room with Yeah. Long works.

 

Elizabeth  

I like most people, so I’d probably be in the room with them. But, you know, as investors, we’re looking for a very specific skill set, especially when we’re starting out and we don’t know what we don’t know yet. So until we are the experts, we need to have high integrity, high quality people around us who are the experts, and can share that knowledge and information to make sure we’re making good decisions, and not just making a decision because they need to pay for their BMW next month.

 

Erwin  

It’s funny because people I find, I find generally people have a healthy distrust of large corporations. And surprise, they don’t have the healthy mistrust of people selling them stuff.

 

Elizabeth  

That’s a good point.

 

Erwin  

Here’s an example. I often give people like one of the one of our big banks was investigated, and they were found guilty of pushing products on their customers that they did not need, particularly targeting seniors. Right. And I remember them interviewing people at the branch level. Insane. Like why did you do this? Because my job counted on

 

Elizabeth  

Yeah, I had a quota I had to meet I remember that.

 

Erwin  

Yeah. Two things. The institution was doing things I shouldn’t be doing. Yep. And human beings at the frontline. Were doing it because it meant that meant that they can make a living.

 

Elizabeth  

Yep. And that was probably the primary one of the primary reasons why I left. My job was because I didn’t want anybody else’s ethics and integrity to dictate how I how I conducted my business.

 

Erwin  

So where’s the same mistrust for all these other influencers out there? And I mentioned I say that because my predictions for this year as we’ll see a couple of them go bankrupt.

 

Elizabeth  

Yeah, I could see that. I could see that. I think we still have the idea that what we see on social media and we go Oh, it’s on the internet or it’s on social media and we know we tell ourselves, that’s not reality. But we see these people living these lives and we’re like, I want that life. And that emotional tie to wanting that life overrides any sort of intellectual thought about is this really the life that they’re living?

 

Erwin  

That’s how marketing designed to work. Yeah, influencer.

 

Elizabeth  

Marketing is designed to make everything look like roses and sunshine,

 

Erwin  

which is funny, because the way I designed my marketing is, well, I do a lot of the same stuff. But I invite people to come meet my clients as well. So you can ask them yourself, what their life is like.

 

Elizabeth  

Yeah, and I think I mean, I’m not a big one for posting, you know, deals that I’m doing and stuff that I’m where I’m not a big one for posting that all over social media. And I actually

 

Erwin  

just see on the right side of the Ontario Securities Commission.

 

Elizabeth  

But I was talking to a marketing consultant yesterday, and she’s like, you need to do more videos. She’s like you, you need to share more about your life. And I’m like, Do people really want to know about my life? I don’t know, I guess, but to me, it’s not second nature to be like, hey, like, here’s what my house looks like. And here’s, you know, what’s going on with my dogs. And

 

Erwin  

like, that’s just Ricardo knows. Yeah.

 

Elizabeth  

I don’t know. Maybe I was just maybe I’m old. And I was just raised differently. But it doesn’t. I don’t know. It doesn’t

 

Erwin  

depend on your goals. If you want to influence in game and grow whatever you’re growing, because just just like it just the hustlers. How he promotes himself versus grant. Yeah, very different. Yeah. Net worth is very different to Yes. Right. Like grant literally did flying in his private jet to wealth. Conference, right. Early. Right. brought the whole family versus Jesse flew American Airlines. fly business class. Probably. Yeah. But he’s so rich. Yeah. But he doesn’t have a private jet. No. But he’s,

 

Elizabeth  

I mean, he just showed up. He’s richer than grant. Yeah. He just showed up. And he’s wearing like, his his like casual clothes, and he looked like a surf bum,

 

Erwin  

you would then know you’ve no idea how you’d have no idea how successful he was, was just looking at him. No, all right, very different, very different, how they present themselves in the media and their social media. Right. But it depends what your goals are, though. Like grants trying to raise funds for his fund fully cool. Yeah. Right. And for selling his courses, whatnot, Jesse’s just like, doesn’t really care.

 

Elizabeth  

I think that’s important to going back to what you said, in terms of doing your due diligence, I think it’s important to look at people’s motivation for doing things.

 

Erwin  

To try to sell you something, you should raise your level of due diligence.

 

Elizabeth  

Yeah. And I think, you know, like, for someone like you, your goal is literally to educate people to share knowledge and information. My goal is to make my clients rich. Well, that’s one of your goals. But but the reason why you do so for example, the podcast, I mean, you don’t do the podcast, in order to make your clients rich, you do the podcast, because it gives you a platform and an ability to be able to pull these high quality individuals in and be able to pick their brains and ask them all kinds of questions, and then share that information and give back to the community.

 

Erwin  

What are some teen listeners were likely to get richer for this?

 

Elizabeth  

I think you’re at 18. Now 18? Yeah.

 

Erwin  

You told your mother about the show.

 

Elizabeth  

Thanks to one of my clients, BB. BB is with us now your 18th listener, she’s thrilled

 

Erwin  

about it, appreciate it. But that is the desired outcome for the show. Because if you don’t want to work with me, totally cool. Even like, I want to work with you. Yeah, I’ll bet you any money that our 17 listeners, their net worth is higher than the average Canadian. I’ll gladly bet money on it.

 

Elizabeth  

Yeah. But I think it takes a certain type of person who listens to podcast to I think, in general, those people are people who are thirsty for knowledge and information, and who are coachable and open to new ideas and feedback. I think if if you believe that you’re right, I mean, I’ve seen people hire coaches, because they just want affirmation that the decisions they’re making are right. And when you when you tell them that they’re wrong, they don’t like that. Yeah, they suddenly get mad at you. And they tell you, you don’t know what you’re talking about, or that you’re disrespectful or you’re not listening.

 

Erwin  

And trying to save you money. You’re being disrespectful. don’t appreciate

 

Elizabeth  

this. This doesn’t look like a real deal. To me. There’s too many risks associated. You don’t know what you’re talking. Okay. Yeah, absolutely. I mean, it happens, right? Not everything is a fit for everyone.

 

Erwin  

That’s why sometimes I’ll put them up and sometimes my mortgage person or a lawyer and they’ll kill the deal for me. Funny, well, it’s it’s part of business. Let someone else be the bearer of bad news. Why should it be my job? It’s their job to be the bearer of bad news. You’re not getting financing on this, this deal sucks. I mean, I’m speaking as if I’m the mortgage person. And then they’re not mad at me. So one of my questions I have prepared for you. I have thought about a lot well in advance.

 

Elizabeth  

least five minutes before we started.

 

Erwin  

What’s not going to work in 2023 in terms of real estate strategy, and what will work though, so let’s start with what’s not gonna work.

 

Elizabeth  

What is not going to work I believe, unless you’re buying at a really steep discount is short term stuff, things like flips where you know your return is dependent And Tom being able to sell for a certain price, you know, we’re always one interest rate hike away from another big significant drop in pricing. I don’t believe buying at fair market value is something that’s going to work. So I always believe things that will work will be things that add value, adding units to existing properties is one of my favourite go twos. Why do it a lot with my clients were

 

Erwin  

getting to working with what’s not working first positive

 

Elizabeth  

more than negative, what else won’t work, it’s gonna get harder and harder to use private money for stuff. Because the interest rate is the interest rates as well as the borrower or the interest rates are just continuing to rise as it costs more for people to borrow against their HELOC or wherever whatever the source of their money is, unless it’s cash. Another thing that’s not going to work,

 

Erwin  

anything specific to a strategy like Java, like short term rentals, midterm rentals,

 

Elizabeth  

what I’m seeing with my clients is that, in general, short and midterm rentals are really struggling. Because there’s just less disposable income out there. And people are less willing to take vacations, it’s costing them more. I mean, you think about all the people in the pandemic with money at 1.5% people were doing renovations people were I mean, they, they couldn’t travel outside of the country, but they were you know, renting cottages and doing all kinds of stuff. And that was working really well. But now people are like, okay, it’s costing me, you know, eight, nine 10% to borrow my money, I’m not going to take a vacation and then put it on a line of credit at that rate. People are quite honestly worried about their jobs, you know, there’s less hours available, there’s less money available. So those kind of strategies are struggling a bit right now. And especially like even think about it, you know, the ski hills? How many people have, you know, bought vacation rental properties in markets that have skills? And I don’t know about you, but I don’t see. No, no, exactly. And

 

Erwin  

Blue Mountain only had one chairlift working last week. And we’re we’re early January right now. Yeah, that’s insane.

 

Elizabeth  

It is. It’s a crazy year and years like this happened. But it is challenging for people who are counting on people coming to go skiing, that just isn’t happening right now. So the ski this ski hills, unfortunately, are a couple of years of COVID restrictions, and then and then no snow. So definitely some of those strategies are are not as popular right now. What’s working well,

 

Erwin  

before we get there, because I asked you this question before, offline. of my personal people. I know you have more New Brunswick experience than anyone I know. But I asked you how many people have asked you about New Brunswick? From the from listening to the show, for example, I’ve had one person recently contact or just recently though, the show was a while ago. Yeah, yeah, no. And I bring it up because I see all these bills running to New Brunswick is still I hear from mostly multipart Milton buyers, which totally shocked me why no one asked you. Yeah, because I don’t know. Like, like, for example, what I often do is like, pause for 30 minutes brainstorm, who I know who invest in New Brunswick. Eventually, I suppose people should get to you. Yep. Right. You’re not selling me anything. Elizabeth Kelly, what’s your opinion on New Brunswick?

 

Elizabeth  

I haven’t had a great experience there. I’ll be honest, the market was very flat for a long time. So there was no appreciation. So you didn’t have the opportunity to refinance and pull out equity. I found the tenant profile quite challenging. So I was constantly putting money into units, which would chew through the cash flow that was generated. So basically, St. John, New Brunswick, in my experience, should have been a secondary market based on the population. But it functioned more like a tertiary market because you were buying for cash flow, but in you weren’t but you weren’t seeing appreciation. And the whole maritimes was like that. I mean, I bought in 2010 there in 2011 2012. I did rent to owns there I had multi unit apartment buildings there. So my rentals did okay. But I had one that was a spectacular went down in flames. And it basically wiped it everything for the other ones,

 

Erwin  

either pretty substantial portfolio, you know, beginner novice, New Brunswick investor,

 

Elizabeth  

no, but these were, you know, some of my some of our initial purchases when we were just coming off the the rich dad courses and the education. So we had a lot of theory, but we didn’t know how to apply all of it. So every market is different. Every market is different. And you know, we chose a realtor who had turned out didn’t have the best integrity and ethics. It was long distance management and our first property manager. Our first couple of property managers ended up having some challenges with, you know, ethics and theft and some of that stuff. So it just every time we turned around our cash flow was getting killed. So yeah, that was probably part of the reason we started our own management company in Kirkland like

 

Erwin  

any reason you see the rush for people to go buying in New Brunswick,

 

Elizabeth  

they’re buying based on price per unit. Again, they’re it’s the same thing that we did, you know, we ran the numbers and the numbers look good. What we didn’t understand was the reality behind those numbers,

 

Erwin  

vacancy and maintenance and renovations will be higher than expected. Yes, because you have

 

Elizabeth  

I mean, not everywhere in New Brunswick. Obviously, there’s people with higher incomes and that kind of thing. When you’re buying at, you know, I don’t know 75,000 A unit, you’re not attracting the a plus plus tenants. And you need to know that’s one of our biggest challenges was we didn’t understand the different neighbourhoods. So we bought in lower end neighbourhoods than we believed we were buying at a

 

Erwin  

friend do the same thing in Hamilton. He was the Waterloo in Toronto party manager for large, large corporations. So when he started investing on his own, he continued to invest in Waterloo, but he also bought some buildings in Hamilton. And he had it he gave it to him. Yeah, worse tenants.

 

Elizabeth  

Yeah, it’s a real challenge. I mean, you need to if you’re buying in, you know, one of the worst neighbourhoods of the city, you need to make sure you’re running your numbers and you understand you’re going to have higher vacancy rates, you’re going to have higher repairs and maintenance, you’re going to have higher debt, higher garbage, and you’re going to have greater damages. So the rents that you do that you are able to collect need to be high enough to offset that. And people were buying in New Brunswick, quite honestly, because it was so easy to evict tenants and be able to you know, do the rentals and turn the building over. But you can’t do that now. Because they they change that. So that makes New Brunswick a different animal. Now,

 

Erwin  

I want to ask as well, what about multifamily in general? Because I keep asking people like Cory sprawl, like, I have friends all over the country who do buy apartment buildings all over the country. Yeah. Right. And they all keep telling me, there’s too many offers on them. Yet I see all these courses. I like y’all multifamily, but doesn’t seem like that’s what the value play is. What are you seeing?

 

Elizabeth  

I’m someone who’s on multifamily buildings for for 12 years, 13 years. I don’t love them. I never really have,

 

Erwin  

oh, I’m banned by a lot of people. I know.

 

Elizabeth  

I know. But I, I just, I just don’t love them. I never have my husband has loved them. He’s bought so many of them. And I just I think i It’s because I’m, I prefer to stay in something that I know is easy to sell, I prefer to stay a little more liquid. So I would rather stay with smaller buildings, I would rather stay with, you know, for plexes, that there’s always going to be lots of buyers for it. And you know, if someone has a multi unit building, there’s not always a guarantee that they’re going to be able to sell it at top dollar or within a reasonable amount of time. And I know that that’s exit strategy, but the reality and there are some people who are buying you intend to never sell buildings, but the reality is life changes changes, things happen, you get married, you get divorced people, you know people are born people die like that is the reality of life,

 

Erwin  

midlife crisis, you wanna start travelling full time, whenever you need the money for

 

Elizabeth  

exactly like I look at, you know, my my husband’s best friend, he passed away unexpectedly at 36, he left behind a stay at home mom with two kids who are one and a half and three years old. Like she never in a million years would have anticipated that. And it took a while they had a couple of big buildings. And it took a while and she was stuck trying to figure out her finances and look after the kids and deal with all of the estate and all that kind of stuff, as she’s still trying to figure out what to do with these buildings. And they sat for a while before they sold versus a four Plex will move pretty quickly. Whereas a four Plex, I mean, she could have even, you know, gone to a JV partner or whatever. And again, it’s this is a relatively new phenomenon, this demand for multi units. It wasn’t like this. Five years ago,

 

Erwin  

there was demand, but it’s gone way up. Exactly. And that makes

 

Elizabeth  

me think that it is not sustainable. Right, which was the same feeling that I had for the exponential increase in valuations in New Brunswick during COVID is that it’s not sustainable.

 

Erwin  

Same thing with the job market. Same thing with the stock market. It feels it feels like the lesson from the last year has really been anything that’s on fire is going to come down. Yes. Good luck. I’m now flaming.

 

Elizabeth  

And I think people think that they’re buying apartment buildings for cash flow, and they’re not their wealth building strategies, correct. Because every time you refinance and pull out capital, you’re wiping out your cash flow again,

 

Erwin  

Quinton Sousa was quite upfront about it when last time he was on the show. Like his cap, I think you’ve seen his caps, like four and a half percent. Yeah, there’s no cash flow.

 

Elizabeth  

No. I mean, he knows his numbers and and he knows what he’s doing. Quinton is a very smart man. But people I think, again, it’s part of setting up the expectations and knowing the reality behind the theory. The reality behind the theory is I bought in a bad area in New Brunswick, and I ended up with a less than ideal tenant profile. If I had known then what I know now I probably wouldn’t have bought all of the buildings I bought in my mind about some of them, but I probably wouldn’t have bought all of them. And it’s the same thing I think with multifamily where people are like, Oh, I’m gonna get you know, $250 per door and at 10 units, that’s 2500 a month I’ve replaced my income now I can leave my job. And the reality of it, at least in the first five years is you’re not going to see cashflow.

 

Erwin  

Do you like your time profile income Looking like, for example, or any of your apartment buildings? Carson? So I’ll just preface that by saying, I’ve never done multiple buildings, because that’s not my target target tenant profile, right? I’m way too soft skin for that market. Right? Tougher than I used to be. You have to be you have to be yes. Right. Versus I knew I wasn’t. Yeah. So I wasn’t, that wasn’t gonna be part of my strategy. Right? Okay, I believe Life’s too short. As much as I love money. That wasn’t gonna be for me. Right? Right. So that’s why I stay small, much. I’m gonna guess that my Tinder profile makes a lot more money than it just makes sense. Yes, I live in a house duplex whatever, by rent is higher than any apartment building.

 

Elizabeth  

Not only that, but you typically have people who are employed and who actively take steps to protect their credit, void. And who care about their credit, you actively take steps to protect their credit, because they’re the people who could conceivably in the future become homeowners. So as part

 

Erwin  

of my criteria, tenor criteria, works as chairs with a credit.

 

Elizabeth  

So what we did in Kirkland lake was we intentionally bought a mix. So we had some more entry level kind of lower end type buildings. But we also when we did renovations, we made some really high end units. And that I found was a much more successful strategy, I did a better job of reading the market and what the needs were in the market, and then finishing units like that. So our higher end units were fantastic, they were much, much better, we got a higher calibre of tenant, they took better care of the property. And they were just more enjoyable to deal with. But that was part of the reason why I loved rent to own so much to was because, again, you get a higher calibre of tenant, you get people who want to be homeowners, people who, you know, they’re willing to cut the lawn, and they’re willing to shovel the snow and they’re willing to look after the maintenance needs of a property because they have a vested interest, this is going to be there. And that was why probably one of the major reasons why I loved rent to own so much

 

Erwin  

we didn’t cover rent to own versus working versus not working. So rent

 

Elizabeth  

to owns right now are a better strategy, because we’re not in the crazy bidding war. So people who are trying to do rent to owns early in 2022, we’re just getting priced right out, the numbers weren’t working, it wasn’t making sense. The biggest obstacle right now for people who want to do rent to owns is trying to put a future valuation on the property. And the majority of the return in a rent to own comes from the the lift and value from purchase price to future purchase price. So that’s the biggest challenge right now with rent to owns. But if you you know, you’re willing to be somewhat flexible, you’re willing to, you know, give people a one year extension, or, you know, if let’s say you price it at a $40,000 increase, and it only goes up 30, if you’re willing to come down that 10. I mean, you can create scenarios that makes sense, rent to owns is probably one of the best strategies right now for cash flow to

 

Erwin  

what else is working, you’re gonna be working in 2023.

 

Elizabeth  

I love private lending right now, that’s kind of my go to, is I just enjoy, you know, seeing what people are up to looking at different deals, looking at different markets, I know how to do my due diligence. That’s one of the biggest challenges for new investors who go, oh, private lending, this should be easy, I’ll do this, and they don’t know how to screen and vet, you know, what the deals are, who they’re lending to what the market is, and what the security or the protection is for them. Prom notes are not a way that I would go right now, as valued

 

Erwin  

by more listeners, as you as you speak, I’m sorry, multifaith, poopoo, mouth, New Brunswick, poopoo, multimode, fibre promissory notes.

 

Elizabeth  

And to be fair, this is me. And this is going back to what we talked about. Everyone’s different, everyone’s different and people’s risk tolerance is different. And people’s goals and objectives are different. So I’m speaking now as someone who’s been investing for almost 20 years, and what works for me, I know that management of apartment buildings is much, much more intensive than it is for managing smaller properties. My smaller properties I virtually never hear from anybody. My larger buildings, there’s always issues, people complaining about temperature about their tenants next door about someone leaving stuff in the hallways like constant issues, and duplexes. I mean, I you could go a year without hearing from your tenants in a duplex.

 

Erwin  

Oh, private lending. To teach my kids. So my kids lent out they each lent a stuffy Yeah. To to a friend. Oh, right. Yes. And they asked me. Oh, do you remind them to bring them back? And when we next playdate we had together and they didn’t they forgot. And then this was the learning moment. I said, you don’t learn things like that. If you do, don’t expect them to come back. I think you almost have to do the same with some of the private lending. Yes. Yeah. The expectation someone’s not coming back. Yes. All right. I don’t know if everyone does that. Now

 

Elizabeth  

most people don’t and Christian Spiroflow go and I talked about this a while ago on his strategy, I think is I think you said for every four deals that he does, or three deals that he does, he anticipates one of them isn’t coming back. So the returns from the other ones need to be high enough to cover that.

 

Erwin  

Right. So that’d be smart. Right? But that’s part of your depth. are hard enough rates. And the risk has to be low enough that they come back

 

Elizabeth  

exactly. But that’s part of your due diligence process. So I don’t lend money on properties that I’m not willing to own myself. So I look at the property, I looked at the loan to value, I make sure there’s enough money to cover my money if I have to take the property back over plus legal fees, and all the other things. So I better want to own that property if I’m going to because again, I don’t like prom notes. So will you lend on someone’s home? No, way too emotional, way too emotional. And it just everything gets cloudy with that, you know, an investment property, I quite frankly, don’t want to own a bunch of single family homes with people living in it that I then have to evict and all the other things. So I would rather own someone’s investment property and manage it a tenant from the beginning. And I have no issues with property management. I’ve been doing it since 2005. But it’s very different having done rent to owns with homeowners, it’s very different to work directly with a homeowner. And there’s a lot more concessions expected to, you know, if you’re lending someone money for their house, it’s usually like personal debts, they’re paying off its credit cards and those kinds of things. And if they’re coming to you, as a private lender, it means that, you know, they’re not able to get a line of credit from a bank. So there’s already some credits and some different issues there. And now you’re coming in and bailing them out on their home. But I feel that there’s sometimes a bit of a feeling of entitlement, like you’re going to take my home away from me, and you’re painted as the bad guy. Whereas if it’s an if it’s an investment property, it’s much more likely to be business. I don’t want to be the bad guy for anybody. I mean, I will, but I prefer not to set myself up in that scenario.

 

Erwin  

What kind of terms are you looking for, if you’re gonna live on someone’s income property,

 

Elizabeth  

um, it depends. I’m willing to go to 80. Right now I’m looking less than 80% loan to value because I anticipate the market declining by another 10 to 15%. So I want to make sure that I’m protected. And then there’s still money for a realtor if needed. The interest rates I’m looking at right now, probably 12. It just, it’s costing what six and a half 7%, to borrow money from HELOCs. So 12, to me is kind of where you’re starting, you know, typically, I’m looking six months to a year when you’re doing private lending, it’s usually shorter term stuff.

 

Erwin  

And then like, how would you structure the payments, so you’d want the monthly payments? Are you going balloon,

 

Elizabeth  

I don’t like balloon payments at the end, we could do a balloon at the beginning. But I really prefer seeing that someone can manage their cash flow. And I prefer to receive I obviously take my lender fee up front. So I usually charge a one one to 2% lender fee. And then I prefer to get monthly payments. So they know that they’re managing their financial situation. Typically, for most people, when they’re struggling financially, the non payment is the first sign that they’re in trouble. So if they’re not having to make monthly payments to you, you don’t get that sign that they’re in trouble until it’s too far gone for you to help

 

Erwin  

you steal your mortgage business. No, no, I gave it up. It also is gonna be working in 2023. Mentioned cash investing, if you’re investing cash, you

 

Elizabeth  

have a lot more you yeah, oh yeah, you have a tonne more flexibility. In terms of other stuff that’s working, I think land development, I think there will be people who will be who were land banking, who might be in financial situations where they would need to dump land. So I think land development might be a great thing. We still regardless of whatever’s going on the economy. I mean, we still I saw Andy trans email that came out a while ago talking about how we’re 880,000 People came into Canada and 2022, we didn’t have enough housing for the people who are here already. So anything that involves adding units, I think would be beneficial. Anything that involves converting unused office space to residential, I think is going to be huge.

 

Erwin  

I would love to be able to rezone my office to be residential.

 

Elizabeth  

Well, you have such a beautiful office, I mean, this is a great little place. But anything that basically adds units, anything take existing properties, I think that the coach houses, you know, third suites, those kinds of things are going to be hugely successful as well, you may not be able to refi and pull 100% of your money out. But the boost in cash flow is going to make a big difference. And I think there’s going to be demand for units like that.

 

Erwin  

Just to elaborate on the 800,000 number. It’s, it’s new immigrants like new Canadians, and then you add a lot of the work visas and student visas. But they’re all here, they all need a place to live to

 

Elizabeth  

doesn’t matter what piece of paper they’re here on,

 

Erwin  

somewhere to live, but don’t wanna stay in a hotel.

 

Elizabeth  

And it’s not like rent rents have gone down. And it’s super competitive right now. It’s super competitive. So I think that there’s always going to be demand and basically anywhere where you can, you know, buy you know, a single family house, add a couple of units, you know, you buy a piece of land and you build something on it. Those strategies, I think are going to be promising. The offsetting will be as inflation continues the cost of materials and labour, right. So you have to make sure you run your numbers and you know what you’re doing ahead of time.

 

Erwin  

Just to add to that, where these immigrants are going If Rockstar produced a really lovely infographic, this sounds crazy, when yesterday when you see it, you see a picture of the map of Canada. 50% of Canadians live below our largest US Canada border. Really basically, like, b2b Beyond the Golden Horseshoe of Ontario. But yeah, 50% of Canada lives there. Wow. That’s insane. That is insane.

 

Elizabeth  

Not to see that graphic. So it’s

 

Erwin  

not crazy. That’s why people will always be like, Oh, I’ll go invest here government, New Brunswick and Alberta whatever, like 50% and up around the Golden Horseshoe.

 

Elizabeth  

Well, that’s it. And I think part of the reason for the growth in New Brunswick in some of the Maritime Provinces is because Alberta was doing terribly. So everybody who was working in the oil fields all went back home to New Brunswick, and Newfoundland and all those provinces. And now that Alberta is doing better, everybody’s going back again. So the population has actually dropped. So your tenant pool has actually dropped when you’re investing in the Maritimes right now. It’s just like, internal migration, right. A lot of

 

Erwin  

a lot. Of course, instructors are not gonna like you, Elizabeth Kelly. Okay,

 

Elizabeth  

I just do my own thing.

 

Erwin  

That’s your own thing. Are you taking more coaching clients on? I do have a couple of openings? Yeah. Just a couple. Just a couple. And where do people where can people find out more?

 

Elizabeth  

You can? I’m really hard to find not. You can find me on Instagram. You can find me on Facebook. I do have a website, EK consulting.ca. You can find me lots of places and obviously always at wealth hacker, and I’ll be at multifamily as well.

 

Erwin  

Only the primary tickets. Sorry.

 

Elizabeth  

And then. And then we are having another summit coming up as well. We have not announced the date yet. But we had we hosted my friend Cory Sperling and I hosted a summit which you were part of thank you for that. In October, people that actually still grab recordings resilient summit.ca. And it went so well. And the feedback was so positive that we’re really excited to host another one

 

Erwin  

announcing time yet

 

Elizabeth  

not announcing it. Yeah, it was a three day event last time, it was a three day I think people found that a little overwhelming, they didn’t sleep. So we’re gonna look

 

Erwin  

at going to the consumer on their own schedule. They don’t, they don’t just sit there for three days. And that’s

 

Elizabeth  

one of the best things about the recordings like Cory and I were really surprised. But you know, we go in and look, and there’s still people here in January watching recordings from presentations that were in October, like, the information is so evergreen, and it was we’ve covered such a range of topics about how to be resilient in tough times that people are still watching them and learning so

 

Erwin  

much the way it should be like if it’s a especially if it’s an evergreen topic, for example, like apartment buildings, like probably the consumer a couple times for the stick. Yeah, absolutely nothing to do it.

 

Elizabeth  

Yeah. And you know, you talk to people like Cory and he loves apartment buildings, and that says life and that’s great. It works for him.

 

Erwin  

I’m sure he doesn’t like all the competition out there. No.

 

Elizabeth  

But that’s the importance of knowing what you being the architect of your future, and designing the life that you want to live. And knowing what you want. Please leave it there.

 

Erwin  

Thank you, Elizabeth.

 

Elizabeth  

Thank you so much. It’s always a pleasure.

 

Erwin  

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

 

 

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**Transcripts are auto-generated.

Erwin  

Hello, welcome to the truth about real estate investing show. It’s Erwin Szeto and we have a pretty amazing guest today in Victor Menasce who was quite big time. For example, he just closed him in his group Western capital, they just closed on a 1700 acre property that’s 1700 acre property with the plan over 23 years to build 1000s of houses, but he didn’t start there. In our discussion with the victor we do rewind back to Ottawa 22,006. When Victor started out his side hustle operating midterm rentals. Then he dove deeper into real estate investing when he found the opportunity during the financial crisis of 2008. By building a team in Philadelphia, Pennsylvania, us in buying up a lot of distressed properties. Victor shares a lot about how to scale up a real estate portfolio con novices can start to get started by interning slash volunteering on divan projects to gain invaluable experience for a smoother transition from side hustler side hustle developer to full timer for those who followed me for a while you know, I like to go slow and I do not like risk so hence I think it’s brilliant path for men need to take before they go full time is to learn from pros who are actually full time themselves and successful in doing so. There’s also Victor strategy of buy on the line move the line for investing in gentrifying locations, we’ve been practising the same strategy in our local markets, I just don’t didn’t know there was a name for it. So for example, in Hamilton, the old rules were to to invest South Main Street and West of James Street, myself being a rule breaker. We didn’t we didn’t always listen to those knowing that affordability would cause areas that were outside of the ideal areas to appreciate. And that has worked out quite nicely. If you two are looking to build out a team in the areas east and west of GTA where property is actually cashflow, then don’t miss out on our street smart tours new 2023 will be operating tours of income properties in Oshawa, followed by a mastermind lunch for which I’ll be in attendance as well. This is a wonderful opportunity for investors of any level especially novices to see how we the four time Realtors of the year at I win real estate to investors service to our clients, enabling them to build multiple intergenerational wealth, we have over 400 clients and among our clients, we have close to 50 clients who have generated a million dollars or more in net worth increases. So make sure you’re on our email newsletter of along with the 10,000 plus other hardworking Canadians. And that’s available at www dot truth about real estate investing.ca. Let me slow down WWW dot truth about real estate investing.ca. That’s my website for this podcast. On the right side, you can put in your name and email address and you’ll be put on our newsletter, I hope to see some of you in 2023. At one of our island real estate meetups or at our street smart tours, like I mentioned, we generally do Hamilton on the west and we do our show on the east. Like Victor, our guest says there are going to be some great great deals available in the near future. Learn what a deal looks like and work with an award winning team of professionals who produce successful multimillionaire investors like ourselves, by the way pitchers also the president of Oreo. And if you’re in the Ottawa area, you want to check them out. In my experience, the value and quality of the group at Oreo can’t be beat. Hence, I’m a paying member as well. Please enjoy the show. Victor, what’s keeping you busy these days?

 

Victor  

Oh, my goodness, we are so busy with projects, projects that we started before market conditions changed. And it’s been very interesting to see how the marketplace has changed. It’s forced us to pivot it’s forced us to pause a few projects that made sense a year ago and now don’t make sense in the current macroeconomic environment. But it’s important to be agile. And so that’s been a lesson that we knew and felt like we had to relearn it again. Okay, that’s a lot there.

 

Erwin  

To me, it’s a lot because I’ve seen lots of people attempt to pivot and pause. Anyways, there’s a lot to get into. Okay, but I’m gonna I want to come back to this, because I want the listeners to understand where you’re coming from. Okay, so you’re pretty successful. So let’s see, let’s start. Where do you go to school?

 

Victor  

So, so interesting. So my family background. My parents, both professionals. My dad was a dentist had his dental practice on Park Avenue and 73rd in Manhattan. My mom was the second woman in history to graduate in architecture from Cornell so she worked as an architect in Manhattan on some landmark buildings, and then they decided that it wasn’t a good place to raise a family. So we moved to Halifax, Nova Scotia, of all places.

 

Erwin  

Oh my god, that couldn’t be more different. Absolutely.

 

Victor  

So I grew up in small town, Halifax, went to Dalhousie University did my electrical engineering degree at Dalhousie and knew that I wanted to be doing microprocessor design in fact, for my fourth year project ended up designing a small eight bit microprocessor and that gave me the entree to get into the into Bell northern research in Ottawa in their microprocessor development team and That was the launch of my electrical engineering career, which I did for close to 20. Some years, right? Wait, is that Nortel? Yep. Bell northern research was the r&d wing of Nortel. And I was loaned to many different organisations I was loaned to Motorola to work on their microprocessors. And we ended up doing some partnerships with IBM and Hewlett Packard and all kinds of different processor based things. And that was when I was at Nortel. And then after I left Nortel joined tender semiconductor, which was a private company at the time. We were designing chipsets that were used for embedded applications. And again, microprocessor system design, and had chips designed into all kinds of applications all over the world cellular base stations, you know, I’ve got a chip in the Patriot missile, I’ve got chips all over seatback displays, and in most Airbus aircraft, all kinds of weird and wonderful applications. And that was most of my electrical career was in microprocessor design. And then I rose through the ranks into senior executive roles, did five m&a deals, did one IPO did one startup which was acquired, and actually to start ups, both of which were acquired. And then I think it was about my 18th trip to Tokyo, and a year and a half, we were building a new cellular network with the number four carrier in Japan called Wilcom. And it was just burning me out physically, emotionally, to be doing that, that 12 hour time zone trip every few days. And I simply decided to be to take a left turn in my career and move into the world of real estate investing on a full time basis. What year is that? And how old were you? That would have been 2009? Oh, interesting

 

Erwin  

timing. Yes, absolutely. Sorry. Quick question. A few quick questions, because that was a mouthful, you just, yeah. Because you probably just ploughed through like 2030 years of career there. Yeah, I imagine you were friends with Terry Matthews, then to

 

Victor  

Terry was the chairman of our company, he was the chairman of tender semiconductor. So we got some exposure to him. And he had some very interesting philosophies about even when you’re a private company, run it as if it was a public company, so that when you do go public, the transition is inconsequential. You don’t have to change anything, you’re already a public company, just by virtue of the way you operate. And so he taught me an awful lot about corporate governance, how to put that core executive team together. And it turns out that that team that you put together doesn’t matter what the business is, that core team could be the same for a hotel for a semiconductor business. For a real estate business, for a restaurant, you need that same core team, the same functions exist in every single business, one of those functions, Well, number one, you need your executive team. So there’s seven functions. Number two, you need the folks that are developing your corporate systems, your corporate governance. Number three, you need folks that are communicating with your existing customers. Number four, you need the technical folks, the folks that are actually executing the business, if it’s a construction business, maybe it’s your site supervisors, then you need a quality assurance function, you need the Treasury, these are the folks that are watching the purse strings, they’re not deciding what your financial policy is, they’re implementing the policy that’s been set by the executive team. So it’s your financial controller, or your CFO. And then finally, you need to a group of folks that are talking to prospective customers. So those are the seven functions, every single business needs those seven functions. And it’s very rare, I would say it’s impossible to find the skill set for all seven of those functions in a single individual. So you may have listeners who are thinking, well wait a minute, I’m running a real estate business, I’m a solopreneur, I’m just going to grow organically from one to two to three to four as my revenue grows. But my message is that you will get trapped in a low Earth orbit that you will never escape. Because you don’t have the skills, you don’t have the skills to perform all seven of those functions. And even if you did, there wouldn’t be enough hours in the day, then you’re probably thinking, Well, I’m trapped. How do I grow from one to two to three to four? I need seven people? How can I feed seven families, when I haven’t figured out how to feed one? Well, I’m here to tell you, you gotta go bigger. It’s the hardest thing to do are small projects. Because small projects don’t generate enough profit to feed seven families or more. And you need to feed seven families or more to have a sustainable business. So you have to go bigger, otherwise, you’ll get stuck, you’ll get trapped and you’ll never escape. This is awesome. Good. I’m

 

Erwin  

glad. I’m excited. Hopefully we haven’t lost a bunch of people. I want to go sideways with this

 

Victor  

method to their madness. So think about it for a moment. If Imagine for a moment that you want to let’s say redevelop an apartment complex. Okay. And let’s say it’s five doors. And let’s say those five doors are going to generate, you know, a few 1000 A year of positive cash flow. And you might get, you know, maybe 100, grand 200 grand worth of value creation in a short time period. That’s not enough to really hire anybody. But what if you’re doing 250 300 units? What if you take as part of that a developer fee? That is calculated as a percentage of your heart construction cost? And now you’ve got a developer fee? That could be I don’t know, half 1,800,000? Do you think you can hire some skills for that amount of money? Absolutely. And that’s just one project. And guess what? The effort to manage that 250 in a project is identical to the effort of managing that five unit project, just add a zero or two, or add a comma. But the effort from a management standpoint are virtually the same. So why would you put all of your time and attention on something that’s small? And I get it, people will say, Well, I don’t have the money. They look in their pants pockets. And they say, Well, you know, they rub their two nickels together and say, I don’t have the money. So I’m just going after what I can afford. But I mean, if you did that, I mean, think about it for a moment, think what would happen, if everyone who aspired to be a doctor said, Well, gee, that’s really hard. And boy, it takes a lot of money, and I don’t have the money to do that. So I’m gonna go and be a nurse instead. It wouldn’t make any sense. Now, no disrespect to nurses at all. But if you’re aiming for one thing, why would you not aim for that one thing? Why would you go somewhere else? It’s that simple. And clearly, there are proof points. People went for years and said, you can never break a four minute mile until Roger Bannister did it. And then within a year, how many people had broken a four minute mile? This is not a four minute mile, what we’re talking about here, there are proof points are examples of people out there doing this. Okay, there isn’t a university course that shows you how to do this, I get that. But you’re not inventing anything new. The information is out there exposure to the right people as possible. And when you have that exposure, all of these things that seemed impossible or out of reach all of a sudden become normal.

 

Erwin  

Okay, so Victor, for the listeners benefit, can you describe your portfolio at all, to paint them a picture of what you’ve done?

 

Victor  

So well. So today, we’re focused, we’re probably 90% new construction, we’re primarily focused in the United States. We do assisted living, new construction, multifamily apartments, storage, we have half a dozen storage projects currently underway. We do a fair bit of land development. Right now we have several 1000 acres currently, that we are going through various entitlement processes on and it’s all about value creation, you can make a little bit of money, you can do the arbitrage thing and buy something for a few cents off and try and squeeze out a few nickels that way. But that, in my opinion is not the ticket. It’s really about value creation. So you know, let’s talk about picking asset class, anyone you want want to talk about land, you want to talk about assisted living, we talk about any of them, just in terms of how you want to be differentiated in the market, and how you create value, because that’s really what it’s about. It’s about creating value solving a problem. That is an acute problem in a marketplace where people are willing to spend money to have that problem solved. That’s all businesses. That’s all real estate is if you’re going into a market that’s over supplied, you’re wasting your time. So it’s really about solving a problem. So pick an asset will run with it.

 

Erwin  

Let’s do multifamily, just because it’s a term pretty popular topic. Have you ever Warrington, kind of associate with it?

 

Victor  

Yeah, absolutely. So not all multifamily works. The nice thing about multifamily of course, is that in a market, that’s a fairly tight market, meaning low vacancy. Generally speaking, market rents will come up to the point where it will justify new construction, you can often go into secondary and tertiary markets, where the rents on a per square foot basis. And when I talk about rent, I think through the lens of a developer, so I don’t talk about 1000 bucks a month or 1500 bucks a month, I talk about dollars per square foot, because there’s a ratio of what it cost me to build that thing in terms of dollars per square foot and how much I need to get back and rent in dollars per square foot in order for the math to work out. And that’s a function of heart construction costs, land costs, development charges, all of the things that go together in creating that product. Today, the cost of construction is such that in most markets, you need a lot of dollars per square foot in rent. In order to justify that new construction. In the Toronto market. You’re talking between four and $5 per square foot in Ottawa, between 350 and $4 a square foot in rent. So what does that mean? 1000 square foot apartment? Yeah. 3500 To $4,000 It’s a lot of money. And people talk about is, you know, the lack of affordable housing? Well, yeah, but it doesn’t matter who the owner is it cost so much to build, that doesn’t matter who owns it. And whether you own it or rent it, the cost of ownership is identical. So it simply comes down to what does it cost to recover that initial investment in a reasonable timeframe. And that’s what we do. So we want to go into markets where there’s appreciable demand a shortage of supply. And, and the numbers work. We also want to see a certain amount of impedance for a new product coming into the market, so that it doesn’t get over supplied too quickly. Because at the end of the day, you’re making a commitment for 25 to 50 years. You want to know that, that those market conditions that you saw on day one are gonna persist for at least a good long time.

 

Erwin  

Okay. Okay. Selfish question. Do you do New Brunswick? I only mentioned it because I see lots of people running that where?

 

Victor  

Yeah, we do not do New Brunswick, because the incomes are very low. And yes, you can buy things inexpensively, but there isn’t. And we’ve looked, many of the properties are very small, it’s very hard to get economies of scale. So here’s the thing in multifamily investing, if you are using fractional third party property management, meaning you are you are getting a slice of a property manager who may have a dozen other clients, how do you know you’re getting sufficient mindshare from that individual. They’re not on site, by definition. So the minimum that you need to hire an in house property manager full time, the minimum you need is 75, doors, something in the range of 125 to 150, doors is better. But the minimum is 75 doors. So if you’re talking about a 30 unit building, you’re in no man’s land, you’re in the same swamp with the folks that have a five Plex or a three Plex, you’re dealing with third party management. So you’ve got to aggregate enough doors in a small radius so that you can hire that full time management. Otherwise, you’re paying too much for property management, and then your numbers or your numbers don’t work. So you know, it’s economies of scale, making sure that you’ve got the economies of scale. The other thing of course, as well is in those smaller, smaller product, those tend to be not amenitized. It’s a basic apartment, however many square feet and that’s all whereas in a larger complex you can afford the amenities. And so what do we mean by amenities? We were talking about? charging for electric vehicles, we’re talking about e commerce delivery lockers, both refrigerated and dry. We’re talking about fitness facilities, maybe a pool, all of these things that become part of a lifestyle decision. Not just, you know, there’s the place of stainless steel appliances.

 

Erwin  

All right, and before we’re recording we’re talking about Grant Cardone seems to be doing these things as well the value so value added amenities. One

 

Victor  

of the things I like about what grant does is he’s in he’s in markets in mostly in Florida. markets like Port St. Lucie. He’s not in the hottest markets,

 

Erwin  

which is interesting, because he said he needed a private jet to get to go look at properties. If they’re all in Florida. Does he really need the private jet to get there supposed to be it’s supposed to be a time saving device.

 

Victor  

I know a number of folks that have a jet and especially if you’re going into secondary markets. So for example, if he’s going into Port St. Lucie, he’s not going to fly into Miami or Fort Lauderdale. He’s gonna fly into Melbourne or someplace like that. That’s closer. So yeah, absolutely. It’s a time saver. But, but what he’s doing with his properties, and this is the part that’s interesting is he’s taking properties that would have been, let’s say, a B, or B minus property. And he’s improving them. He’s adding amenities, he’s spending half a million to a million on the swimming pool, and that whole complex, so he’s giving people something that if they’re downsizing from a single family home, they could never have amenities of that quality in their own house. So they’re not feeling like they’re taking a step backwards. By downsizing from a single family home, they’re taking a step forward into moving into this apartment complex because there’s amenities that they could have never had right at their fingertips. And so that’s part of the attraction creates that value and that perception of value yet, when you look at the cost, add that on a per unit basis. It’s actually remarkably

 

Erwin  

low. Sounds smart.

 

Victor  

It is smart. It’s very smart. Very cool.

 

Erwin  

And so so not a fan of New Brunswick. Where are you a friend a fan of in terms of towns, cities, will I even know that recognise these names?

 

Victor  

Sure. Absolutely. So we’re in Spokane, Washington. We are in Houston, Texas. We are in Lake Charles, Louisiana. Probably not a town you’ve heard of and I’ll tell you why we’re there in a moment. We’re elsewhere in Ottawa, Canada. We stayed out of Ottawa for a long, long time. Because the market was too expensive. The rents were not high enough. And today they are. The numbers do work finally in Ottawa, so we are quite active here and it would have been natural.

 

Erwin  

Oh sorry, just for the listeners benefit you live in Ottawa.

 

Victor  

Hi Have an ROI. Absolutely. It would be natural for me to invest here. And yet we stayed away from it for a long, long time because the numbers didn’t work. Yeah. So we like, you know, we’d like markets that have a strong influx of jobs, influx of population, high paying jobs, and a shortage of supply. So we go for that. We also would like to stay away from markets, where the regulatory environment heavily favours the tenant to the detriment of of the landlord.

 

Erwin  

You are in Ottawa, you understand? Right? Yeah. Punitive to her. You are in Ottawa, you are in Ontario.

 

Victor  

Yeah, yeah. But you know, so we stay away from New York, we stay away from Chicago, we stay away from San Francisco, places like that, that really are very unfriendly to landlords.

 

Erwin  

Sorry, Victor, in your real estate business. What is your position? And then can you tell me about your we talked about earlier, but the seven positions to seven functional? Sorry, have a business? How many of them do you perform? How many people are on your team to perform these functions.

 

Victor  

So our core team is actually fairly large. So we have five partners in the business. I’m a senior partner, and we’re geographically distributed. Most of us are in the auto area, we have a team based in Utah. And that was a merger with a team that was based there, we had done a bunch of projects together, and then finally decided to merge the business. We have local partners in the major markets that were invested in. So and I think that’s super important. So for example, in Houston, my partner is the gentleman who has not partner with us in every single project, but he’s involved. In fact, his entire family’s involved on several projects, this gentleman has built so far, about 10,000 units in his career, and he’s someone who’s never going to retire, he’s just gonna keep doing it, because he loves it. And yet, he doesn’t necessarily want to do the heavy lifting on everything. So it’s actually a very good relationship. Because he gets to have his hand in more development projects, we get to learn from his experience, he brings a tremendous amount of experience to the table. He’s built millions of square feet of concrete parking, and just all kinds of different assets. So tremendous wealth of knowledge and experience. And, and his son is involved in the business. So you know, on our average staff meeting, we meet every single day, five days a week, 915 Eastern time, every day 615 Pacific Time, we have about 12 people on the call, every single day. So we’ve got admin staff, we have a few interns, we have folks that are focused on marketing. So we all play different roles. We have a team that’s focused on underwriting a team that’s focused on due diligence, we have a team that’s focused on investor relations and capital raising. So there’s all these different aspects that map we have an in house CFO, super important. And actually, I want to spend a moment on this, because oftentimes, you’ll hear people talk about, well, you know, they transition from doing their own bookkeeping to maybe hiring a bookkeeper? Well, yeah, that’s a step forward. That’s

 

Erwin  

a big deal. That’s a big step for a lot of people.

 

Victor  

Well, it is, but you’re still repeating the same fundamental mistakes, because what is a bookkeeper do bookkeeper runs behind the business, trying to document what the heck happened, and hopefully try to get it to reconcile at the end of the month, a financial controller drives the business, no check ever gets written by the business owner, the Financial Controller produces the check from the accounting system puts it in front of the business owner for signature, and everything. The books are correct by construction, you can reconcile the books any minute of the day, seven days a week, because it’s all correct by construction. You’re not ever having to reconcile the books. So Financial Controller implements the policy, and they’re driving the business as opposed to scurrying around behind the business figuring out what happened. They both spend time in the accounting software. So looks from a distance, like they’re doing the same thing, but it’s vastly different.

 

Erwin  

You mentioned in how CFO, and those people aren’t cheap. And also when you said the handing off the bookkeeper. If you only have a book here, this still means the individual is still the CFO as well. And we’re in the other hats as well.

 

Victor  

Right? Yeah, absolutely. But again, like you

 

Erwin  

said, like, Gee, I don’t even know how many properties you need to afford a CFO, just the CFO.

 

Victor  

There’s ways you can get skills. We’ve been very successful in bringing in interns and integrating them into the business. And when we say interns, I’m not talking about getting someone on a four month webcam at a university. We’re talking about folks that really have a very high set of skills, but they actually want to learn real estate. Okay, so they will contribute their skills to the business in exchange for learning how to do development, because I recognise that sitting behind a desk looking to Google for answers is not the path or you have to be in the trenches doing it every single day. It’s like learning how to swim by reading a textbook. You can’t do it you Gotta get in the water. Sorry, Victor, Are

 

Erwin  

these like 2030 Somethings that just

 

Victor  

No, no, we have, for example, one person is a practising lawyer. Okay, we have someone who’s a full fledged CPA. Interesting. We’re bringing in very, very high calibre skills in those types of roles. We’ve also had very good success, bringing people from the military, both Canada and US. In the US, they have a programme called Skills bridge, where the the army or the Air Force or whoever will pay for their salary for a period of time for them to train as part of their transition from armed services life to civilian life. And it’s good for them, and it’s good for the business. Same thing exists in Canada.

 

Erwin  

I did I know that. That’s pretty awesome.

 

Victor  

It really is awesome, because they come with very high skills, very high skills, but they are lacking some of the practices that are normal in civilian in the civilian workforce. But, boy, they bring a tremendous amount of systems and processes and discipline. And we learn from them, too. It’s wonderful.

 

Erwin  

I sounds awesome. I think we have headcount for accountants give you some military counts.

 

Victor  

Exactly.

 

Erwin  

Exactly. So Victor, it sounds like you’ve really adopted well, your corporate experience your startup experience into into a real estate business. Now I’m trying to think of like the like the investor that has like three, five properties, how do they start towards getting closer to you? So for example, I’ve had guests on this podcast who are quite very successful, like, these are folks who, you know, were worth like, five 10 million, but they get stuck. Because there’s not enough money being made to afford even like a chief operating officer type role, even like a Director of Operations type role slash pay, right. So they never, they’re never able to shed that hat. You know, they still maintain that function, that now these investors are still in their top 1% note, like, totally, probably even top 1.1%. But I still see many people don’t get to be on that level, where they can have much more expensive folks to handle these functions.

 

Victor  

Well, it’s a mindset issue, because they’re trying to do it all themselves. Okay. So it’s

 

Erwin  

deposit there. I’ve been I’ve been Pooh poohing a lot of all this mindset stuff that’s out there, because I see all these mindset coaches out there,

 

Victor  

some of them. Absolutely. Yeah. So, okay, so what do you need to be successful? You need three things, right? You need the knowledge. So people will go out, they’ll get a course they’ll attend the workshop, and they say, awesome, I’ve got the knowledge, I’m all set. And that’s not the ticket, you’ve got a third of what you need. Congratulations. And then like you said, you’ve got the mindset folks out there saying, Well, yeah, you’ve got the wrong mindset, you need to go get yourself some mindset. And so then you say, alright, I’ll work on the emotional fortitude to figure out how to push through when things get difficult, and how to think creatively and be resourceful and all of those sorts of things. And that, too, is not enough. So what is the ticket, you’ve got to be immersed in the environment, where other people are doing what you want to do? Why is it that all the elite figure skaters in the world train here in Canada? It’s not like they don’t have ice in Japan. Right? Right. Right? They they train either Montreal or in Burlington, Ontario. Why do they train here, because they got to be training at that elite level with other people that will push them and challenge them. It’s no different. So you know, when you hang out with other developers, things that seemed strange and out of reach all of a sudden become normal. So that’s who I hang out with. That’s who my mentors are. My mentors are folks that have done hundreds and have done billions of dollars worth of deals. And so you the few things happen, you figure out what is possible. Number one, you figure out how to solve problems when they arise. And then you figure out what those people are concerned with, so that you can actually have an intelligent conversation. If you walk up to somebody who’s a billionaire, and you want to engage them in a manner that they’re going to be interested in you. How do you do that? If you have don’t have experience interacting at that level, they’ll ask you what you do and and then five minutes later, they’re off talking to somebody else. You’ve got to find a way to establish a rapport so that you can build those relationships. Because at the end of the day, it’s about building those relationships. This is a team sport. And it you don’t want to just look at someone who’s a high net worth individual as someone with dollar signs on their forehead, because they don’t want to be used don’t use people nobody wants to be used. And people with money have their guard up because they know that there’s folks that want to be close to them for one reason one reason only and that’s because they have money so they’re their guard is up They don’t want to be used any more than you were i? So don’t use people. So how do you how do you break through that? How do you develop a relationship, and it starts really at that personal level.

 

Erwin  

So get away, be be a volunteer, be an intern, be a

 

Victor  

volunteer, be an intern, collaborate with them on a charity, something that might be meaningful to them, there’s so many different ways that you can develop a relationship with them. That’s pretty cool. Now you don’t necessarily need to, you know, if someone has is, let’s say, a big brand, you don’t need to necessarily develop that relationship with the figurehead. Look at who’s in their inner circle, you probably going to find equally capable people in their immediate inner circle. They all know the same people, they might be easier to develop a relationship with, as really the first step. So for example, I’ll pick a name. Imagine you wanted to develop a relationship with Oprah, that might be difficult, might be harder to get access to Oprah. Probably easier to get access to Stedman, her boyfriend, he knows all the same people travels in the same circles. Right? Right, right, right

 

Erwin  

off ask, because I’m pretty sure that listeners thinking, how can they get in touch with you if they want to be an intern?

 

Victor  

We’re pretty full right now, with insurance. It’s a request we get often, but so let’s talk about what makes a good internship. Sure, because I think that that’s valuable to talk about, we’re running a real business with real deadlines, real priorities. And an internship is not a paid position. The deal is you get exposure to the business, in exchange for making a contribution to the business, but we’ve got to be able to count, if you take something on, we’ve got to be able to count on you to deliver if working with us, or whichever business it doesn’t matter, ends up being your 10th priority, after the kids are put to bed and after everything else is done. That’s when you take the leftovers and you put whatever energy is left into into the internship, that’s not going to work. That’s not going to work, it’s got to be a commitment of a certain amount of hours. And on a regular basis. It can’t be all give you two hours every two weeks, that’s that’s not going to do it, it’s going to have to be on a regular basis. So that you can be part of the flow of the business doesn’t mean it has to be a full time engagement. But you’ve got to be able to commit enough hours to be part of the flow. The business could be two hours a day. Or it could be one hour a day. But it’s got to be every day so that when someone calls you can actually respond. I think those are those are the keys

 

Erwin  

with all this work from home with all this work from home stuff now Oh, absolutely here than ever. Yeah. And I imagine you don’t need someone to go down to Houston and go click rent or something.

 

Victor  

No, no, no, no, no, not at all. I mean, you know, for example, we have someone, she works full time for the federal government. And she used we’re working on a small apartment building. This is a guy out of Norfolk, Portsmouth, Virginia, a suburb of Norfolk, and he got some land to build what he thought originally it was going to be a few row houses. And we figured out that he could actually get higher density, it’s going to be like a 12 unit apartment buildings. And that’s the sort of thing that we would necessarily do ourselves that we wanted to help him. And so then he seemed to have some of the right attributes. So we actually handed this project the managing the this project off to one of our interns, and she’s managing it fully. She’s interacting with the architect, she’s coming back to us and saying, Okay, here’s what the city said they want, you know, this kind of exterior cladding materials, they want all this setback over here, they want all these different things, what do I do? So she’s getting guidance from us, in terms of how to interact with the architect and how to get some of these problems sold into closure. And she’s getting real life development experience, without having to go out and raise, you know, a few million dollars on her own and go build this building. But she’s she’s getting that hardcore hands on experience. And it’s awesome. It’s awesome. For her, we’re getting a project done without having to do a lot of heavy lifting on it ourselves.

 

Erwin  

That’s pretty cool. I have like the occasional investor reach out and say like, I have like one, two properties in an area that’s going to be developed, say someone has like one two properties across the street from the coast station. Right. And they’re working on in the land assembly, but they’re not developers. I think technically, they’re a developer.

 

Victor  

Right, right. Yeah. A lot of those types of situations. In fact, we opened a consulting division about two years ago, okay, this specifically for that, because we often find situations exactly like you described, where someone says, I’ve got a piece of dirt, it’s in a great location, what can I do with it? Right, right. Now you can go hire a plan, or you can go hire a consultant who can help you get through the zoning process with the city, but they can’t tell you whether that makes economic sense. They’re not looking at it through the lens of a developer. We’ll take it through our entire underwriting process as if it was our own project. will tell you It either makes sense or doesn’t or here’s what needs to change for it to make sense. Or, you know, here are your risks, you know, the city is never going to give you two curb cuts, you’ll only get one. So are you going to need a traffic turning lane to get that volume of vehicles in and out? All of these different things that you don’t necessarily think about? That can be impediments to a project? You might say, Okay, I’ve got utilities there, right? They’re there in the street? Sure, there’s utilities. But do you have the allocation? Will the city approve 200 More toilets going into that sewer pipe or not? You need to know. And most people just don’t know how to get those answers quickly.

 

Erwin  

We do. And then where can people find more information?

 

Victor  

So we’re companies why street capital.com Feel free to reach out to us. I’m Victor am at Wall Street capital.com. And I’m hosting the real estate espresso podcast. It’s a daily show seven days a week, and it’s on more than 20 different platforms. So wherever you listen to podcasts, you’re sure to find the show. And it is literally your morning shot of what’s new in the world of real estate investing. So we’d love to have you as a listener, and we can continue the dialogue that way.

 

Erwin  

Victor, I have you for 15 more minutes. Sorry, just because I love where this is going. Oh boy, I don’t know where to go next. I have so many questions. Sorry. When you when you started off as an investor, then did you go straight to something with scale, then you skipped the whole single family home? Exactly.

 

Victor  

So where I started, my very first investment was 2006 in Ottawa, and I saw an opportunity. I’ve always taken a business, a business approach. What’s a problem that needs to be solved. Otto is a bit of a unique city like Washington, DC, the nation’s capital, where you have a number of folks coming in and out of the city on a medium term basis. The government tends to spend money in six month increments for whatever reason. So 12 month unfurnished lease is of no use to those folks. And they have a housing allowance. But a housing allowance is not going to get you into a sweet Hotel. That’s too expensive. So there needs to be something in between. And back in 2006, I saw that opportunity. And I saw that there was a shortage. Airbnb didn’t exist at the time, and found out what the number was the number was $1,600 a month was the housing allowance for a one bedroom apartment range between 60 and $1,800. Back in 2006, I said, Okay, can I deliver a decent quality turnkey product for that price point, which turned out to be about 35% More than the unfurnished lease? And did the business case make sense for me to spend the extra investment to deliver that turnkey product in exchange for that higher rent? And clearly the answer is yes. For about 1015 grand and furniture, I could get 35% more rent. So that made an awful lot of sense. So that’s where I started.

 

Erwin  

Okay, now, did you do one? Or do you do like 100 of these? No, I

 

Victor  

did like half a dozen. And they were all within a four block radius of Parliament all within walking distance of Parliament. So we had military officers, contractors, senior folks in the post office, you know, sometimes even graduate students had a graduate student from Saudi Arabia paid for the whole thing upfront cash. I’m surprised it wasn’t gold bars, but it was

 

Erwin  

barrels of oil. That’d be acceptable. Yeah. And then, and then what from there.

 

Victor  

So from there, of course, this funny thing happened in the states around 2008. That created an awful lot of opportunity. And so I really saw the opportunity to go south of the border. It looked to me like the opportunity of a lifetime. And it was, and, in retrospect, I made a tonne of mistakes. I went too small, I ended up partnering with the wrong people. I ended up forgetting everything I knew about business and thinking that I could scale small, small projects, small buildings, and made the same rookie mistake that probably a lot of your listeners have made themselves. So wasted a tremendous amount of time, in many respects, squandered that opportunity of a lifetime. Where I ultimately was successful, is found a couple of partners in Philadelphia, and we pioneered a strategy that I call it by on the line move for line. And what that line is, is that line that exists in virtually every city, where on one side of the line, you’ve got a hot, gentrified neighbourhood. And then on the other side, you go a couple blocks too far and you’re in the hood. Now we don’t have that quite so much in Canadian cities, because we’re a bit more homogeneous. But in US cities, for sure you have that.

 

Erwin  

We have that and I went to school in London. We had that we had Adelaide.

 

Victor  

Absolutely. Absolutely. I mean, even Toronto, if you think about it at one time, the beaches was on the wrong side of the line. Crazy. I mean, today it’s hot, hot, hot, so expensive

 

Erwin  

now. Yeah, that’s crazy.

 

Victor  

But that it took a certain amount of redevelopment of that area for people to say Uh, oh, I can actually live here, now the line has moved. And when that transition happens, you get a great multiplier. So what is the strategy you buy on the wrong side of the line, not too deep, not too far, and redevelop on that line. And now the line is on the other side of your building. Now, if you just do one or two, the market doesn’t notice they don’t care. But if you put a little bit of scale behind it, maybe bring a few friends along, put a little bit of scale behind it. And all of a sudden, the market says, Oh, the line has moved. And now when you go to get appraisals, there’s no comps for new product in the hood. So where are they going to get the comps from the great neighbourhood immediately next door, you might not get 100 cents on the dollar on your appraised value, maybe you only get 95 or 97 cents on the dollar. That’s good. And now fantastic. That’s good enough, because you bought the land at a deep discount. So that’s where we started in Philadelphia. And over time, we probably bought, I don’t know, 8590 properties within a 10 block radius. Our very first deal in Philadelphia, we bought 15 properties in one day, from the Philadelphia Housing Authority and an auction for $350,000.

 

Erwin  

Victor, so did you find a partner first and the deal first,

 

Victor  

we found the partner first. Okay. Because you see, at the end of the day, a good deal badly managed is no deal. So what is what is the differentiator in that it’s not the deal? It’s the manager. It’s the people. Have you got the right team that can manage the stream of investment? If you don’t have that? Why are you looking at deals? Right. And that’s I think a mistake that a lot of people make is they start with a deal. It’s never about the deal. And we were offered deals in the wake of 2008. That looked amazing. We were offered a beautiful property in Keystone mountain Colorado, the ski in ski out property, it made it as beautiful, huge discount, and said, Well, I’m not going to put a team together for one deal. Didn’t make any sense. And we let we let it go. We didn’t have the team in Keystone, Colorado. Right? So it starts with the team, I went down to Philadelphia, I saw what this these folks were doing. I saw literally a decade of investment work to be done in this one neighbourhood and said, Yeah, we can bring some more capital. And we can go attack this neighbourhood. And we did. We did a lot of land assembly we started of course back in those days in 2011 2012. It didn’t make sense to build new because you buy things for a fraction of construction cost. So what did we do, we bought older buildings, turn of the century 1910 1920 construction, and we demolish the inside. And we put a new building on the inside the cap the old stone or brick, facade and structure. And so we’re delivering new product in in a historic setting, which was kind of cool, because then you could all do all these neat things with exposed brick knishes and all kinds of cool things that you would never find in an older building a bit, you got rid of all of the mould and the lath and plaster and we got rid of the six foot ceiling height in the basements we would dig down two feet and underpin the foundations, we could underpin the foundations on a on a building for like 2030 grand. So you get a whole extra floor for a very, very small investment. Right. So we do all those sorts of things. And that was really how we started in Philadelphia. And from there, it was a small step to you know, some of these buildings were too far gone, we had to motion so we built new on those locations. So moving into new construction was a small step. And then getting going to the Zoning Board of appeal and getting additional density was a small step. And then doing land assemblies was a small step, and on and on. So every step of the way, we took one additional step in our development as real estate developers. And then we farmed the area. So when I take people on a tour of North Philly, we have to drive slow, because I’m pointing out well see this four Plex over here, we did that one. And then we did this, these nine units over here. Because if you drive too fast, you run out. So you know, we bought an awful lot. And we developed an awful lot within a very, very small radius. So what that allowed us to do is what I talked about at the beginning, which is we could get that critical mass, where we brought the property management function in house. And yes, it wasn’t one building. But we had enough units within a five block radius, that we can effectively manage it as if it was one building.

 

Erwin  

So Victor, have a lot of questions about partnerships. Sure. So I want to spend too much time on this partnership is a little bit a little partnership. So a little no vote. Sure. But the question that comes to mind is what did each party bring to the relationship to the partnership near a Philadelphia example?

 

Victor  

So one of the partners had a very strong desire to be a property manager in Pennsylvania, you’ve got to be a broker. You need a broker’s licence. He was the broker the broker of record on the brokerage and so we they basically built out that company with a property management division and construction division. And it really an investment division focusing on on new projects. The other partner had a tremendous amount of experience finding deals, and his expertise was cellular towers, believe it or not, so he would find assets that had cellular towers on them, separate the cellular tower, from the building, sell the cellular tower for profit, but then you would often get the building for either for free or for a deep discount. So we did that with a stadium, believe it or not

 

Erwin  

a stadium for cheap.

 

Victor  

I’ll tell you the story. It’s a cool story. So this is Skylands Park. It’s an hour outside New York City to New Jersey, and it was built in 1993. For 11 and a half million dollars. It went bankrupt a year later with 26 million in debt. Don’t ask me how they did that. But somehow that happened. The folks who bought it, owned it operated it. It was the New Jersey Cardinals and then the Sussex Skyhawks, they’d set league attendance records. This is all a minor league ball 4200 seat stadium, and 18 luxury boxes parking for 2000 cars, 46,000 square feet of buildings, batting cages, commercial kitchens, like a full on stadium. Okay, the husband died, they lost their team franchise. It’s now 2010. This thing is bleeding cash. The wife doesn’t know anything about baseball, she just wants to move to Florida to be close to her kids. So she hands it to a realtor who puts it on the MLS folds his arms and waits. Well, that’s not how you sell a baseball stadium. I’m just saying. So we came across it, the only reason we came across it is because this stadium had a cell tower on it. The cell tower had revenue on it from Sprint, Verizon and T Mobile. And you look at the revenue from those three carriers, and it came to 50,000 a year. Now when you value a cell tower, you think of it about a 7% cap rate. So you take $50,000 divided by point 07. And you get $700,000 and change. So the value of the cell tower, in jest as a standalone piece, if you separate it from the stadium as an easement, the value of that cell tower was 700 grand. Okay, so they had this property listed for 2.2 million. It’s at the bottom of the market. They got a cash offer for 1,000,005, which they rejected. They got a financed offer for 1,000,008 that they accepted, but their financing fell through a couple of years into this, they’re now getting desperate. They want to sell this thing. We offer them 950,000 Cash, which they accepted. We knew we could sell the cell tower for 700 grand. So we got our basis on the stadium down to 250 grand, but it gets better. As soon as we had it under contract. We knew we didn’t want to own a stadium. We’re not baseball people. So we started looking at who would want a stadium where their former major league players who would want to do a spring training camp or you know, as a big parking lot. Can we set up a drive in movie like we thought all kinds of different, crazy ideas. And anyway, we came across a guy who was looking to restart the Can Am league because at that time, the draft in Major League Baseball was there reducing the number of rounds in the draft, so there’d be a lot of really good players that would never make it into the majors. So they wanted to grow minor league ball. Okay, fine. He said I might want to buy your stadium. But I need eight stadiums. In order to restart the league. You’re one eight of my problem. I said, Okay. So would you like to take an option? Or how about a right of first refusal on the stadium, so you know, get a tied up, and then you figure out what other stadiums you need to go get a bet at least you have a piece of paper that you are at least connected to this stadium if you really want it. He said, Okay. He said, What would you want for right of first refusal? We said how about 250 grand? So he said, sure, but I want the interest on that. 250 grand How much do you want? 8%? Okay, done. So for 8% interest on $250,000 We bought a 4200 seat stadium on 28 acres of land and outside of New York City. And all because we had this there was a cell tower on this property, we would never have found it if it weren’t for the fact that there was a cell tower on the property.

 

Erwin  

And no one else needed to look for these things. No, the realtor didn’t realise it even income generating asset on the property. Exactly. That’s pretty cool story. Yeah,

 

Victor  

it is. So to finish the story, we held it for about nine months. We had a college team that played 13 games they came in brought in new clay and levelled it out and it looked great. I mean, it wasn’t laser level like the it like it would be in the majors, but it was good enough and eventually sold it about nine months later for, I think about 900 grand. So that’s after we sold the cell tower on closing day. So we made a little tidy profit. We weren’t greedy was a good deal. Good deal for them good deal for us

 

Erwin  

thinking about it or send out the email of someone else. Someone else bought it suddenly got a pretty good deal. But yours this again?

 

Victor  

Oh, gee, was I have to go back and look, it’s been a while I think we got it under contract in 2013, I believe.

 

Erwin  

Sounds like we got a pretty good measure that was an hour from Toronto or an hour from Ottawa. But that’d be worth. Absolutely. Okay. So what’s, what’s the law? What’s the most recent partnership that you got into? Like, what was what was the you look, you were looking for just preface that most people I find, like, for example, my friend of mine is going to Orlando to buy an investment property. And they did look for versus you’re saying, Go find a partner first. It’s very different.

 

Victor  

Well, the example I’m gonna give you is one where we actually found the deal first. And it just turned out that way, and this was one and by the way, we don’t go hunting for deals. You’ve probably figured out by now we weren’t looking for a stadium that came to us. And this, this next one is no different. This one came to us as well. This is a parcel of land. It’s just on the edge of Colorado Springs. It’s 17 183 acres. And it’s called the Norris ranch. Mr. Norris, his father was the Marlboro Man and the cigarette commercials. Oh, cool. So the original Norris Ranch was 20,000 acres. It’s a massive, massive property. And the remnants the last piece was eight parcels are seven parcels that comprise 17 183 acres all contiguous, and we got this under contract for 10,000 an acre. And at first we thought, we weren’t really interested, we thought, wow, it’s too big. It’s too complex. It’s to fill in the blank. We weren’t interested in it. And then we thought about it took us a couple of weeks to wrap our minds around it. We said, yeah, we can do this, we did a little bit more research, we learned that we could get a zoning overlay and an annexation into the city. That would be legally binding, without having to do a full plan to use development where you have to map out every lamppost manhole cover and fire hydrant, we could just do a zoning overlay. And that will create a tremendous amount of value. So we got it under contract and basically went in immediately into the planning process. We wanted to do diligence, we had a lengthy due diligence period. And so we’re making sure that there weren’t issues that would stop us. There were, you know, no endangered species on the property or, you know, any of those sorts of things that could potentially stop the project. And then we continued to move forward with it, we had a couple of different pathways to raise the capital. And they did involve partnerships. We ended up choosing two partners, to actually three partners that were not initially on our radar. One of them is a gentleman, two guys that own 640 acres to the south of us. And so they were already active, developing in that market. And so we felt that having that local presence, that expertise would be valuable. One of those two guys, his father was the previous county commissioner, his wife is the current county commissioner. So we said, okay, these guys are pretty well connected politically, you know, this guy has all the candidates for mayor to his house for a barbecue, right? So we have that kind of connection. And so we invited them into the partnership. And then they brought another individual, very high net worth individual who had sold a defence company for a few 100 million dollars, who would also be interested in so we brought him in as a partner as well. So we’ve forged together that partnership, eventually, this is a multi year project. This is a project that is going to span economic cycles. Clearly, we already initiated the annexation petition. And eventually we know once the master plan is completed, we’ll get the zoning overlay and utilities brought to the property and all of that, but we should see something in the range of about at least somewhere between a 20 to 40 times multiple on our investment just on the land just on the land. So it’s a it’s a fairly significant left.

 

Erwin  

Okay, so where did these had this deal find you

 

Victor  

as an individual who basically knew of Mr. Norris, but it was too big for him. So he brought it to one of our partners and said, you know, who might be able to do this. He knew he had something and he just didn’t know what or how or and often turns out that way that people hear about something and they don’t know what to do with it. So it’s a matter of finding a home. We’re in discussions right now on a property in a 1500 acre property right now. And we’re not sure if it’s us or if we need to find a home for it. But we know that it’s going to have to be the right team. This is an act, the 1500 acre property is an active agricultural property. That’s that’s producing a very high value crop. So, you know, we’re not farmers. So we’ll see what happens with that one. But it’s all about putting together those partnerships, those relationships, we’re heading to, to New York and a couple in a couple of weeks to further that conversation and see if we can put together the right partnership on that one.

 

Erwin  

Fascinating. All right, Victor, if the listener wants to help you out, how can they help you? How can I help you?

 

Victor  

That’s a great question. Yeah, we’re always happy to talk about deals, you know, we’re pretty full right now. So we don’t have the capacity to take on a lot, that’s for sure. But sometimes we can make an introduction or we know somebody that might be able to help. And, you know, just, we’re love to develop relationships, love to have folks connect with us through the podcast. And we often speak at live events all over both Canada and the United States. So happy if we happen to be at the same event. Come on up, say hello, and love to connect.

 

Erwin  

Amazing. And then Victor, I question. I was so immersed with everything you’re up to? What’s your outlook for the future? It’s November 25. A lot of people are scared out there. Like you’ve mentioned you you’ve had to with even with your own portfolio had to pivot, you know, to put things on pause. What what do you see for the future?

 

Victor  

Yeah, absolutely. I mean, we’re definitely in a very uncertain environment. I mean, investors like certainty. And that’s the one thing that you can’t get right now is certainty. No one can tell you with any degree of confidence what interest rates will be in 24 months, they could be up or they could be down. That’s why we put things on pause. Things that made sense a year ago, today’s interest rates look marginal. And if they go higher, we’ll be upside down. I can’t take that risk. I wouldn’t take that risk with my own money. And I certainly can’t take that risk with investors money. So so we’ve had to put some things on pause. So I mean, virtually everything in multifamily apartments, new construction, virtually every not everything, but virtually everything almost has to has to be paused right now unless you can get really good financing terms. And we’re working on that. And so if you can get a really solid rate, lock, long amortisation, permanent financing, you can still do deals in today’s environment. But absent that, it’s really, really hard. We’re looking at some redevelopments. We’re in discussions right now. And redevelopment of a building in the downtown core, was at one time an office building turn of the century building gorgeous, gorgeous art deco building, think, Empire State building type vintage, that would be redeveloped into apartments in the downtown core, it’s literally right on top of the subway stop, amazing, amazing location, and the rents in that location would certainly support the redevelopment of that of that asset. So we you know, we look for those types of things. And think about all of the deals that have been done in the last 24 months, if they had a value added component to them. They were almost all financed with bridge debt, which would be variable interest rate, with the idea that once they got released up and stabilised, they would refinance into permanent financing. But those assumptions would have been, hopefully a cash out refinance an interest rate within the threes, maybe the high threes, if in the worst case, but now you’re into the sixes and sevens. So not only are you not going to cash out refinance, you’re gonna have to write a big check to get into permanent financing. So you’re upside down, you’re stuck. So how do you do that? Fear that sponsor that’s upside down. What do you do? Do you go and do a capital call with your existing investors? Not happy about that? Do you sell the equity which is diluted to everyone? But what are you selling? You’re gonna say, well, we screwed up this project. Come invest with me. I like it’s a very weak value proposition. The number stank, because you’re upside down. So what do you do? Do you just extend with your lender until you run out of oxygen? The bunch of them? Well, a bunch of them well, so there will be opportunities in the next six to 18 months to buy assets that we’re partway through that repositioning. By the way, there were a lot of repositioning that failed in the last 24 months, they got delayed because of COVID or what have you, and they got into trouble. But then with rent growth, with market rents increasing in so many markets 1518 22% per year, that wallpapered over those mistakes, and so they came out on the other side and still survived, but they were, they would have been in real trouble if it weren’t for that, that rent growth was stopped. So they’re not gonna be able to play that trick a second time. So I think there will be opportunity. It’s not yet. Not yet. So sit on cash, be prepared to be conservative in your underwriting, be prepared to negotiate hard, and don’t be scared to walk away from a deal. It’s the seller who has the problem, not you, the buyer, don’t ever be a desperate and anxious buyer. Be a very patient buyer. That would be my advice.

 

Erwin  

Now I need to go call my flipper client to get rid of some of these properties.

 

Victor  

Yeah, flipping in today’s environment would be a very risky proposition. Because think about it. I mean, a lot of people think about what is the deal? You know, they say I got 10% off, that’s a deal or I got 30% off. That’s a smoking deal. No, no. I mean, think back on what we’ve talked about here, about 1800 acres, almost 70 or 83 acres for 10 grand an acre. That’s a deal. That’s five cents on the dollar. That’s a deal. I have way more upside than downside. That’s what I’m talking about.

 

Erwin  

I don’t think you shared your email address vector.

 

Erwin  

Better. Thanks so much for this. This has been awesome. I have like 23456 pages of notes. I imagine the listener probably will have twice as much. Thanks so much for doing this again. Where Can folks listen to your podcast?

 

Victor  

So it’s the real estate espresso podcast. It’s like the Italian coffee spelled ESP R E S S O. And it’s on virtually every podcast, listening platform, Apple, Spotify, Stitcher, pod bean 20, plus different platforms.

 

Erwin  

You’re regularly that the reo meetings in Ottawa so people can find you there as well.

 

Victor  

So I also run the Ottawa real estate investors, organisation and president of that organisation, we have about 400 members we meet once a month, face to face, and it’s a very active community in Ottawa. And if you happen to be within Ottawa, within a radius of Ottawa, we actually have a number of members from Toronto and from Montreal who commute once a month for those meetings. Because they get a lot of value. It’s crazy cheap, it’s $127 a year to join It’s nuts. And there’s no run a run to the back of the room, sales pitch or any of that stuff. It’s just pure education. We bring in great speakers and give people the opportunity to rub shoulders with their fellow investors.

 

Erwin  

And you have million dollar executives setting up projector equipment. See that myself? Because $127 a year there is no budget for staff for listeners benefit like literally the Victor and Christian are million dollar executives literally selling laptops and connecting cables and putting up projectors. It’s true. It’s true. Victor again, thank you so much for doing this. Wow, what a treat. Well hopefully listener enjoyed I’m sure the listener enjoyed and your emails gonna blow up. Apologies in advance.

 

Victor  

Well, it’s great to connect great to connect with you in Toronto a couple of weeks ago and have an awesome weekend.

 

Erwin  

Yeah, I told you I get Christian crap for not give me a heads up because I didn’t know you were coming and then this year front row thank you for the support Victor. Have a good weekend, my pleasure.

 

Erwin  

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

 

 

To Listen:

 

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Youtube: https://youtu.be/XzbBX_Nx9J8

 

**Transcripts are auto-generated.

 

Erwin  

Hello, welcome to another episode of The Real Estate casting show. We have a whole bunch of great stuff lined up for the New Year guests that we have to put up our fantastic include today’s episode, we’re rolling out a lot more educational content. So stay tuned to our YouTube channel, my Instagram, this podcast, we’re basically doubling up in terms of the amount of education that we’re providing and sharing on this on our all of our channels. There’s a lot of bad advice out there. And it saddens me how much how many people are out there interested in lending their own pockets rather than actually helping people get ahead in life. My team and I are taking it upon ourselves to put out stuff that actually works. So that is the treatment real estate investing show. Straight up. Last week, I met with my clients, a whole bunch of our client, my clients who you know, from five to the last 10 years. For those who don’t know, I’ve been a realtor and coach, investor specialist realtor since 2010. So I’ve had I’ve had lots of clients with me for like 10 or more years, and they are doing outstanding. Sadly, there’s a lot of people who are suffering right now who are struggling, some may be approaching bankruptcy, some are being forced to sell, feel really bad for those folks. And at the same time, there is an incredible opportunity on the horizon. So anyways, we have it sounds like a bummer. But we have a wonderful guest today. Actually, I think Dana’s extremely refreshing. I’ve been going down this rabbit hole of investigating what happened with some of these companies that went bankrupt, trying to understand what went wrong, speaking to one of them as well, but that’s that’ll be, that’ll be for another episode. Today we have someone who’s actually successful, and she caught me off guard. We’ll be honest, Diana’s Instagram handle is extremely underwhelming, not underwhelming. It just investor girl, Diana, when it really should be sophisticated investor, Diana, but I get it. We’re Canadian. You know, we’re supposed to be humble and modest in our marketing or social media, whatnot. But screw it, Diana is legit. She shares her experience in numbers flipping more recently, she exited successfully exited a $2.3 million luxury house in Toronto. She sold it this year in the middle of this massive decline. She just did a century home in Hamilton, Ontario. And she even does private lending on a property Windsor. We talked through much of this. So there is a bunch of numbers in this episode, including deal numbers and mortgage rates. And that’s particularly important because a lot of the capital that Diana uses is private. So but now, it’s not talked about enough, I think, or maybe talking about too much because there’s a lot of people hurting from too much private money. But Diane shares how she personally lends her money and she talks to her experienced borrowing as well on these projects. Diana has taken expensive courses and Masterminds as they leave. She mentioned three of them on the show. The quality of some of them were questionable or questionable is questionable. As folks from those masterminds, which were years ago, folks that she met at the mastermind, are now unfortunately bankrupt, financially, potentially other ways bankrupt. But that’s right, some courses members, coaches, Financial Group real estate influencers, there can be a negative return on your investment of your money and your time. I myself have the same challenge. I was looking for Zhan YouTube for some training videos to watch in terms of like personal fitness. There’s like so much that’s not good. But yeah, the internet in social media can be both wonderful, and it’s truly terrible at the same time, it is your job as a discerning investor to conduct proper due diligence on anything you consume, and invest in including your time and money in education. Diana, however, with her conservative nature and her projections in her husband as a still general contractor, my understanding is he does that for a living. They have navigated this declining market and exhibited flips, profitably, some very profitably, some less profitably, but all profitably, which is which is a marvel in this declining market. Again, it’s not without challenges, Diana goes through many of them. And they were some of them are doozy. And that’s the point of the show. We discuss both what works and what doesn’t work, so that you may learn from the lessons I may learn from the lessons as well. So side note, I’ve noticed a trend where an investor’s ability to execute on construction or renovations will make or break their deal, especially the folks who are attempting to go full time in real estate. In my experience, if you work continually with the best of the best contractors, in my experience has been instrumental to my own portfolio, my clients in our success, those unable to execute, they’re in for a whole pile of hurt, especially when they’re if you’re paying private money or anyone should have if you have a vacant property. No one likes vacancy, right? I don’t like that. You can see I don’t like paying into vacant properties and then some least folks who tried to become full time investors, flippers burn investors. Unfortunately, they have multiple properties that are vacant, burning a massive hole in their pocket. It’s not that any contract is perfect. I had some samples of that when I have the term my own properties. Anyways, there’ll be another episode. But if you marry one, if you marry a great contractor like Diana did, she’s married to one, you can mitigate a lot of risks with hiring the right contractor and proper oversight. That’s something that we do for our clients, we connect them with the same contractors that we use personally on our own properties. And we regularly check in with our, with our contractors, because we need updates on quotes and renovation statuses. And while we all have those conversations, for our own properties, we’re having those conversations on behalf of our clients. As we hear it. In real estate, we do volume, as you can imagine, hence, we are usually our contractors top referral source, and we’re all looking for we as a team, we’re all looking for that Win Win, win result, and win for the contractor. We want them to make money win for our client, we want them to be a successful real estate investor A win for us, because we want a happy client who buys more houses and sends us referrals. That’s been our model for a successful business. We are in this not just for the long term, but rather intergenerational relationships to create intergenerational wealth for ourselves and for our clients. As we literally have already three generation clients, we have grandparents, parents and their adult kids as our clients. So and that only comes when you produce results for folks. And that includes our general contractors, some of them our clients, as well. So without further ado, I give you Diana, hi, Diana. Hi, what’s keeping you busy these days?

 

Diana  

actually feel like I’m not busy? Because, yeah, real estate wise, I feel like you know, all our deals, like last year was super busy. So much going on. Now with the transitions and you know, recession coming, or maybe we’re in it, I feel that, you know, like, thinking of February, like, I could not make any numbers or Alright, so things just went very slow. At least on the active side, I mean, some private lands, we were doing it but you know, we changed, right? We did a lot of, you know, last year, I was doing seconds would not even touch a second this year. You know, so just even just the word just so many changes happening and having to adapt to what’s what’s going on.

 

Erwin  

Yeah, I don’t know if anyone thought that things were shift so violently, not violently. But

 

Diana  

I felt like I felt this year things were going to plateau. To be honest, I did feel like that they were going to plateau. And I think that’s why for like the flip does telling you about I think, you know, I did We did well, like it went fine was because I had that expectation that I don’t think things are gonna go up and I felt this year was going to be like a plateau. And it really solidified when we did that super high up. That was just like, Oh, wow. And obviously not counting at the plateau from that top. I mean, as in like from last year, you know, I was thinking that this year would probably be more of a plateau type of thing. Pretty cool.

 

Erwin  

Can you tell us about your most recent flip? Because I’m sure we both think you’re insane. Because we’re recording this. We’re now mid November. So when When did you acquire the property?

 

Diana  

So this one actually came with a lot of problems? Because we bought it last year? So we actually bought it in September of last time? No, no, it wasn’t a bad time. We were supposed to though we if everything went as planned, actually, we would have been selling at the height of the height of the market. So we would have actually probably made a lot of money. And I mean, so like you would have been like like that we probably added we were probably added maybe like a 50 60k to it like Yeah, well what happened was, so the person that was selling the home, they were losing the property, because of a business deal that they did that they were waiting for that money to come back. And they were it was just like a huge deal. And they needed some time to wait for that money to come back. So we did a right of refusal of right of first refusal, and to allow them to buy back the House. And so when we looked at the contracts for the business, and when the payments would be coming back, it should have actually come back within that year. It was literally actually through the contracts they should have been like within that month, like that’s how but the banks are going to already foreclose on it. So we learned a lot about contracts for straighter refusals and knowing how to write contracts properly now, because that was a problem. So because the guy was stalling because he wanted to buy back his house. He kept on using many stall tactics. So imagine that we started negotiations in January, and we didn’t find out, you know, 2021 and we didn’t finalize until June. And then yeah, and then he didn’t close in July. The closing was in July. And then so we didn’t think to put it on the market in August because cuz we’re just like it’s slow season, let’s wait it out. And then we put it on the market mid September, and then that one really fast a week and a half, we got an offer, which I would say was very surprised because the stats right now are 30 to 60 days. So that was like, amazing. And we got her number which was same thing that was amazing. We were really happy about, you know, that, that it went at least at what I went well, in that sense, it’s so it’s, I felt like for all the stress that we had to go through with this guy, we still reap the rewards of it. And it was because like that, I did the analysis with thinking what happens if issues come up, and making sure we were nicely padded, because we knew this was like an emotional type of home. So you know, with that comes a little added baggage, which we kept, we got all of it, you know. So, so it came with its drama, but it went really well. And I attribute it to like that conservative numbers. Like I think it’s so important to like, run the numbers and make sure that it makes sense and you’re not hiding it. Or one of the things that I see a lot of investors do is predictive values, you know, oh, you know, it’s this and I do the flip. And by next year, we’ll be up like another 10%. So I’m good. I don’t do this. Yeah, scary stuff. I think very

 

Erwin  

scary. Yeah. Now we know it’s really scary, but even in any time. Okay, so Okay, so I’m having trouble. The timeline. started negotiating January 2021. You closed in September 2021.

 

Diana  

The actual clothes? Yeah. The actual one with the with the new sellers. Yeah. And sorry, the no, sorry, the the offer was in October, like we put it on the market in mid September. So we went probably firm like, end of September or beginning of October. And then we close close at the end of October or I would say like is actually November 1. So beginning first day of 2021 2022. This is on 2022

 

Erwin  

or sorry. Sorry, I’m asking when you got into it when you got into the

 

Diana  

last year. Yeah, yeah. So I bought it last year, September. And we just sold it now. I don’t know if first

 

Erwin  

so the timing is terrible. It can be worse but but it looks like you did the homework to make this work out.

 

Diana  

Yeah, yeah. And like that we had Plan B’s and stuff because we did discuss because of all these issues if we had to hold it then what would happen so we also weren’t in a situation where if let’s say things were just really really bad like I know other people were they have to hold it we were we were also able to hold it but are we were trying to maintain plan A and see see it through because like that at the point is still everything still looked favorable. It was just Yeah, it was still favorable is just like got another couple of months still waiting kind of a thing. But things were still things were still good. Okay,

 

Erwin  

so tell us about the property. single family detached

 

Diana  

single family detached? Yep. Like three bedroom. They got two and a half story. Oh, yeah. I had like, also like a huge, like workshop in the back. So we never did anything with that. We left that out as was because there wasn’t enough space at the front to do what you needed to be able to actually make that an accessory dwelling. Maybe now you could maybe maybe with all the changes. Yeah. But our strategy was just to like that foot just to flip it and just single family home like a quick and like that, because we also at that time also had in mind was that we were selling it back to him. Right. So like, he probably wouldn’t have wanted that. And for us, it was just, it just didn’t we weren’t sure if it mates or actually even in running the numbers to be honest, at the time, it didn’t make sense to put the money into it because it was quite expensive to, to put it in and the timeframes and everything because we did we wanted this to actually be like six months in and out that was the plan like so. So in six months, we wouldn’t have been able to get the permits and everything done for the back unit. So it was just not really in our plans.

 

Erwin  

So the plan was to do like, How bad was the property? Didn’t you a lot

 

Diana  

it wasn’t actually bad. Okay, it was actually not very much renovations needs to be done. I would say bad in the sense of we did have to get both the roofs done. We had to go okay, yeah, so we had that was there was so there was like a water issue upstairs in one of the window like one corner of the house. So we did need to get both the roof done because that was bad. The basement so there were some bad things actually. It’s not I’m saying like yeah, it was literally, like, aesthetically, it wasn’t bad. But the basement for example, is unfinished and it was like leaking from everywhere that like I don’t know what place didn’t have water coming out of it. It was just leaking like crazy.

 

Erwin  

Not that bad. It just turned into basement leaking everywhere.

 

Diana  

But it was it was actually not expensive to fix. Because the way the way the leaks were coming it was just like deteriorations like for example, leak was coming through the window for example. So it’s just you had to do proper sealing and fix the area around it. And then there was one crack going through, which they’re able to do, I think it’s called the injection molding and fix it. And then like that there was plumbing that went out to the, to that workshop. And that wasn’t done to code at all. And that’s where a lot of the water was coming in. Well, there was like a flat there was like a, like just plumbing going straight like that. So it was like maybe two feet from the ground, not even like from the floor from me like a foot from the underneath. So we completely just took it out to because that was like where the major water come was coming out. And then we from the interior, we waterproof the whole basement.

 

Erwin  

Not that bad to have a waterproofing job. I

 

Diana  

mean, it’s not that expensive. Like when I think of like exterior waterproofing, that’s like insanely expensive. This wasn’t like even though it had like a lot of water issues. It wasn’t really it wasn’t expensive. Renovations, defects like like it wasn’t like there are some where you have to do the waterproofing from the outside. So I feel like those ones are really bad type of water or like water issues. And so this wasn’t that type.

 

Erwin  

So did your husband’s team do the interior or interior waterproofing? They did? Yeah. Contractor for no. price difference? Yeah.

 

Diana  

Yeah. My husband did it.

 

Erwin  

saves you a ton of money. 1000s of dollars.

 

Diana  

No, no, we’ve had companies come in. But again, maybe because there’s our subcontractors they charge differently to like clients, because it’s odd to me. I was like, I know, there was one job that we hired someone else to do it for a different one. And I can’t say I remember what it was. So this number may sound ridiculously low. But I know it wasn’t a big deal when two though. But they did a waterproofing and it was like like a 1500. Yeah, but again, it’s like we didn’t know them. That was the first time we had met them.

 

Erwin  

If it’s not a huge drop in costs, that’s close. Just in my experience. A lot of people are proven copies of markup like crazy. Like, that’s my own property. My own property in Hamilton. It was it was over 10,000 for interior interior. Yeah. It was the entire perimeter, though. Yeah, it was the entire perimeter.

 

Diana  

Which kinda did you use the like the blue skin? I don’t know, all the terms, like the blue skin the whole thing? Because we didn’t have to go to that level. We went to

 

Erwin  

a higher level. Yeah. Because because the city wanted it. I hadn’t needed an engineer to approve it all.

 

Diana  

Okay. Yeah. So I think it also depends on like that, I think it does depend on the level of helper, but it was because ours wasn’t not by that we didn’t need to do Blueskin because we weren’t contemplating having to do the Blueskin. The two layers, I can’t remember what they were, but I know one of those Blueskin. We didn’t have to go to that level. That’s why I say like, it wasn’t bad. Like, it sounds bad. But you know, there’s always those kind of, and I’m just talking because I’m with it so much with my husband, like, I know what he does

 

Erwin  

is different than a newbie, yes. Yeah. Like, for newbie is not bad for you.

 

Diana  

And I can give like a really funny example, actually. So on another project, we were doing a luxury flip. And this was in Toronto, and the whole house was guided. And the first thing we had to do was the roof because there was terrible leak problems in there. And so and this, we bought it in just before spring, like in in February. So everything is melting. This one was probably two, this was probably two years ago. 2020 or 2021. Okay, maybe this one was so actually yeah, sorry. That was last year. Yeah, cuz we did both. Both of those happened last year. Yeah. So that one was really funny because my husband sends me pictures of like waterfalls, basically all over the house.

 

Erwin  

Like nice ones are like your house is leaking. The house is leaking.

 

Diana  

Like, we were having water coming in from the windows. And then one side of the house was just like leaking really bad. Like it was like we I just cans all over the place. Right. And it was just really funny, because that didn’t traumatize this. But nothing was done to the house, right? Like it was just a fully gutted house. And as experienced investors, we know you have to get the outside done before ever wanting to do the inside, right? Because oral it’s what happens you destroy the everything right? So like that we knew that house, we knew that roof had to get done. And we gutted the whole place because that one was a full gut like it had to be gutted were to the studs, like all new insulation, I was like we basically built a new house that one that’s how the extent of the amount of renovations we had to do. Like for example, an experienced investor would know that you do get the outside of house done first make sure that you know you’re gonna be able to protect everything you do inside right so like that. So we got the roof done first. And then everything interior started to get done, but it was just really funny to see the pictures. And again, I’ve never seen something to that extent of like that kind of problem. But But I can tell you that when he sent me the text message or the videos, all I ask is like, is this a problem? And he says no, don’t worry, I And then as when he tells me I’m like, Okay, I’m like, as long as you tell me that we feel good about this, I feel good about it. But if he tells me, we’re in chaos, then I thought then I would be in chaos. Right? So I can I can tell you that also, I’ve never seen it to that extent of a problem. But I can tell you like that he was fine with it. He said it was no problem was not affecting anything. And yeah, it didn’t do anything for us. And there was nothing to worry about. But it was just like something funny to show that a first time home investor, no, first of all, they would never I don’t think you I hope you never know. But you as a first time so you shouldn’t

 

Erwin  

have it was three seasons of HGTV, good to go. Listen, we’ve done half an

 

Diana  

hour. Yeah, that’s true. So this labor do not do those kinds of projects unless you have a really good team because like that, that would give you a heart attack and a half, if you didn’t know what you were doing.

 

Erwin  

For novices. They don’t even they don’t know how to qualify a really good team. Right. That’s what we’re seeing now that’s out there. So let’s start with the Toronto flip. Where did you find the deal? MLS? Okay, okay. Yeah, people who say there’s no deals on MLS,

 

Diana  

I know I find it really funny. And to be honest, when people tell me things like that, you’re closing your eyes to opportunities, because for example, I look everywhere. I’ve done all of them. I found a deal like the Hamilton one. That one was private.

 

Erwin  

We’ll come back to that. So you find it on Toronto, you find it on realtor.ca. That’s right, this proper term realtor.ca That sounds like a disaster.

 

Diana  

Yeah, it was a full gut did actually when we saw when we saw it, for example, no one so already the third floor was gutted. So there was no installation up there. Oh, no kitchen. Period, no kitchen at all. Like it was in mid demo. Yeah. And then also another thing I noticed was that when we were closing, the previous owners hadn’t paid their taxes so they had to like they have no money. Yeah. So yeah, although but they had owned it for a long time to so I don’t know if it’s like maybe it was like a rented property neglected neglected. They

 

Erwin  

were bad with money. Yeah, maybe but I’m thinking maybe they

 

Diana  

were trying to see if they could do it themselves and then maybe just

 

Erwin  

why you can’t afford your taxes. You thought you’d get into renovation? I don’t know. winning formula. Formula. No kitchen partly gutted bathrooms were their bathrooms.

 

Diana  

It had a bathroom. But one you don’t want to even set foot. Yeah, like Yeah, it was not maintained or anything that definitely that type of thing.

 

Erwin  

So how did you finance the purchase? All private money because

 

Diana  

you can’t? Yeah, I mean, no ARB lenders are gonna definitely lend to that. Right.

 

Erwin  

Do you care to share who you probably borrowed from? Or? Oh, I

 

Diana  

don’t even know actually, because a broker just it was like, a make or something. Okay. Yeah. Something like that. Okay. I don’t actually know, like, the actual name or anything. It was just a broker that found it for us. Do you still like this broker? Yeah, yeah, actually, he gives me a really good dad deal, sir. He helps me you know, get deals and stuff started this.

 

Erwin  

Can you give us an idea what what the terms were like that one? Oh,

 

Diana  

my God, I feel like I think it was very standard deals, I think it was probably like 2% lender fee. And like six point something or seven, something somewhere in between there. So I can tell you like that, like the loan itself. And I tell people like, again, you have to have experienced for this because I think we were paying around $7,000 a month to cover just the mortgage. Right? So it’s like, you definitely do have to know what you’re doing right? To be able to have the guts, right for that kind of thing.

 

Erwin  

So this is negative 7000 cash flow. Good. Sounds great. And then how much did the house cost?

 

Diana  

1.4 foot boy.

 

Erwin  

Okay. All right. And then how should you put into it? Renovations budget

 

Diana  

450,000. It was a big project. Right? Because his interior and exterior work like like I when I say we built a new house like that’s basically what we did. We built a new house.

 

Erwin  

Yeah, that’s That’s enough budget to build one of my bungalows. Yeah.

 

Diana  

We basically built a new house,

 

Erwin  

then you and your husband served as general contractors, right? Because you’ve experienced that. And that saves you a lot of money.

 

Diana  

Yeah, it definitely definitely helps. Because especially like that if things are going wrong. At least we’re cutting into our budgets to just make sure that it happened. Right. So So yeah, I feel like it’s always good when you haven’t like when it’s your teams, right? Because it’s, you can always sacrifice or move. You can move things around a lot easier. Right? Or what I would really say what is the biggest thing that I noticed and especially between people who hire and then let’s say, if you have your own teams is that my husband goes above and beyond, you don’t get that from people that you hire very often right? To go above and beyond. Yeah, exactly right. So I feel like I noticed, I always noticed that kind of thing when people tell me about their projects that, let’s say, because I could tell you that I pay him retail. But I can tell you, for example, like, I’ll pay him retail. But if things go wrong, usually we still stay within that budget, there are times that we may have to go a little over. But for example, like that, I think like another person would be like, not my problem, you know, whereas like, we’ll try to make sure that we try to work within our budget, you know,

 

Erwin  

just for you, this is impressive. I know yours this, you know, I should just automatically assume you’re so sophisticated. And my policies, I don’t believe anything I see on social media. So the worst of people. So when you hear so many stories, right? You just feel like, Oh, God. And then how long did it take you like, this is a very big budget.

 

Diana  

That was a huge project. And can you imagine we got all of it done within six months, seven months? That’s impressive. Yeah. And I can tell you, though, the last two months, was the most stressful things of our lives, because we were non negotiable having to get it done within that time type of thing. So that one, I would say that one was a very stressful one, because what was the deadline? Because we wanted to, we just wanted to meet, we wanted to make sure we’re catching the right market and for this one luxury home. Family. But what I mean is also like in the luxury home area, specifically as a single family home, you’re only dealing with a very small clientele. Right. Yeah. And that clientele is in that march to the summer timeframe. Right? very price sensitive to Yeah. So to us, it was because other ones like for example, I feel like investment properties, they’ll almost any time of the year because it’s about the investment. Right. But when you’re dealing with families, that’s a whole different story. Right? They want to buy within a turn timeframe. And so we were like it has to be we want to make sure we catch that good market. So

 

Erwin  

through as a full business. Oh, yeah. Investment. There’s a lot of planning involved in this. You’ve even thought it through to who your customer is.

 

Diana  

Yeah. Yeah. I mean, especially if you’re dealing in the luxury home. I mean, you need to know like how that works. Right? It makes sure you know, where you’re, you know, what’s plan? Well, my point is not everyone thinks this through, Oh, yeah. 100%. And it shows like that the importance of like planning things, and that it’s not that simple, right? It’s like there are and kind of graduating through it, right. Like, don’t make a luxury flip your first one probably not a good idea, you know?

 

Erwin  

Yeah. And then, and then you staged it listed, listed, and then have the, the song go,

 

Diana  

it went well, that one actually was on the market for I believe, a month, maybe even a month and a half, but then it closed quickly, within a month too. And that wasn’t like the height of the market to write that. So it was like that, like what we, for example, expected I was when I was looking at I feel like luxury market always is like, that’s normal, you know, like that, at that time, we’re hearing other properties, like bidding war, and then sold that day, right. In the luxury market. I wasn’t seeing that I was still seeing like, you know, 30 to 60 days for the luxury market. So so that when that one fell through like the exact what we expected, right, it took like 30 days or, or maybe a little bit longer, like between 30 and 60 days for it to go. And then a month later it closed. Can you share what you sold for? 2.3? I believe it was 2.3 2.4 2.3. Somewhere around there. 2.3. Yeah, not 2.4. Yeah, sorry. 2.3.

 

Erwin  

She made a couple $100,000. Yeah, we

 

Diana  

did good on it. But remember, we have like a lot of holding costs. So it’s not like amazing, but we did good. But again, you’re supposed to do good in the luxury home. Right?

 

Erwin  

Oh, don’t be saying on the show. They’re trying to do the fair now.

 

Diana  

I meant it in a different way.

 

Erwin  

But the market was right. And you had the ability to execute. Yeah. And you have the funding to do so. Yeah, you had the pockets to do it.

 

Diana  

Yeah. But what I what I mean is though, like when you are getting into more expensive houses, you’re spending a lot more because you need this house to look amazing. Because your clientele is amazing. And the clientele pays amazing. My Nemorino like, I feel like it’s because of that, but again, like if you don’t do your numbers, you could screw it up royally too, right. Even in the luxury. Yeah. Because I mean, if they’re not,

 

Erwin  

that’d be done. Right. Yeah. Has to be done, right? Because I’m sure your staging Bill was enormous. Not as

 

Diana  

much as I thought it would be.

 

Erwin  

How many square feet was that? us,

 

Diana  

I think the Oh my god.

 

Erwin  

Did you watch in Toronto? Was 2.3 is a decent amount of money?

 

Diana  

Yeah, I can’t remember maybe 2800 Without the base is pretty big, but it’s three floors to. It’s pretty. So it is. I mean it is big. Yes. Because we did for example, like the whole third floor was the ensuite just for the master bedroom. So we had like the bathroom or walk in closet in the bedroom. So the whole third floor was like just for the master. And then three bedrooms and two bathrooms on the second floor.

 

Erwin  

Okay, so actually, this is a good question like, Would you do this deal right now? No, not at all. So even if you could buy this house again, for one point for what to do it?

 

Diana  

I mean, I’d have to run the numbers. But yeah, definitely. I would not do a yeah, this is way too unstable of an environment to go into something like that. And to be honest, I mean, when you’re going into this kind of thing, what suffers the most the luxury market too, right? Yeah,

 

Erwin  

well, yeah, the higher the higher. Because people I don’t know, if people who dig into the stats will know, it’s the entry level stuff that’s still transacting, which is partly bringing down the average price. Because anything that’s a good luxury. So for example, like anything on Treb, that’s over $2 million is probably not moving. Right? Yeah.

 

Diana  

Well, well, you were telling me last time on my show, right. That you said the reason why mine did was because it was under 800. Yeah. So I just found that interesting. Because yeah, like you just know like that. You don’t want to be in it like free market right now. Yeah. I mean, don’t do it.

 

Erwin  

4 million, for example, in Hamilton is not moving. And that’s really that’s really nice for Hamilton. Yeah. Mark is different.

 

Diana  

Yeah, yeah, exactly. It depends on the market to be talking

 

Erwin  

to your Hamilton flip. Sure. Okay. So where did you find that one? That one was private. How did you get them like flyers?

 

Diana  

flyers? Yeah, there’s flyers. Yeah. And like that, like, just something that you always know about? That’s very known in at least in the real estate community is that homeowners wait to the last minute are in denial about the problems are going through. So he’s like, textbook case. We were like, literally two weeks before the House is getting possessed. And from the bank from the, like getting possessed. Yeah, to go to the bank and like them to do the sale. So we had to act quick. Because obviously, it goes because imagine like in the height of the market. So in the height of the market, we bought it for 500. It appraised for 600. So probably fully sold with the if the bank took it, it probably would have sold for 600. Right? What would you get it for? 500.

 

Erwin  

Okay, so it was worth 600 At least

 

Diana  

it got appraised for 600.

 

Erwin  

All right, and then you said it wasn’t that bad in terms of condition. But yeah, your qualifying is not your average person’s Yeah. 600 in health is not disaster.

 

Diana  

No, no, no, I like that. Like the main floor. The only thing we did on the main floor was paint. That’s it. That’s it. Okay. What else stairs just where the second floor is where we had more renovations done. So like that one area, there was a leak problems. We had to fix the ceiling and just have that fixed. Like the damage from the roof leaking that damage from the roof leaking. Yeah. But then also what it was actually a one bedroom house. Oh, so they opened concept, the whole second floor. And he had his office was two bedrooms. So just open concept and just a master and then a loft upstairs. Yeah,

 

Erwin  

that’s permanence. Right.

 

Diana  

No comments about what they did there by

 

Erwin  

Adam. I remember Justin Hamilton in the house that we’re looking at the panel had an ESA and in my experience, it’s like one in 10 panels have an ESA sticker on it. I don’t know who does rent work and Hamilton but yeah, yes, I joke. I bet you $10 And there were no permits for those walls being taken out. Well, we heard

 

Diana  

that because she didn’t do any of the work. So this was actually the previous not him. It was actually the previous owner, the piers were owner who apparently was a woodworker, so he probably was just like doing whatever he wanted in the house. Right? And he’s the one who put like that illegal plumbing and that was just like one foot off the floor. So you can imagine that in the winter because there was actually a bathroom in the workshop, but obviously probably wouldn’t work in the winter probably I don’t know what they did there. Yeah, I’m

 

Erwin  

glad it took the plumbing.

 

Diana  

Yeah, no, I understand why took it out right. Or we took it out I should say.

 

Erwin  

So what did you do with the second floor then?

 

Diana  

I added the two bedrooms back in see the put on walls we put in walls? Yeah. But again, like do you like It wasn’t that big of a deal, right? You just put the walls up a couple grand no big deal. Did the house we had to do all the flooring because of the water damage because there was water damage. And there was previous water damage in the master bedroom. But there was no evidence of like, like they must they had fixed it already which the I mean, the homeowner said that was fixed. But there was water damage all over the floor. So we had to fix the second and third floor, we did flooring, that one had a new bathroom done. We fixed it because it was very the old style bathroom where you cannot even sit down if you’re a tall person because like your vanity is like right up to your knees when you sit on a toilet. So so we had to do the whole so that so the upstairs is where the second floor is where the most work was done. We added the walls, and we added a new bathroom floors and paint and the whole house like the whole house was painted. And then just second and third floors where we did all the flooring. So what do you think your renovation budget was? Our renovation budget was? So I did actually we just did the numbers because I thought it was 60. But I forgot about like taxes and stuff. So it’s like 65 Plus HST, sorry, them and HST the answer was 75.

 

Erwin  

Yeah, that’s not bad. And then how do you finance it? Also private? Yeah,

 

Diana  

that one was private. Similar terms. As you know, chimps are bad. The terms aren’t bad. Yeah. And these are not people that we know, like, are the brokers founder for? I can’t say remember what this one was actually, I think it was the same, like around 7%. And this one was, and then this one was broker plus, I mean, both of them were broker. The other one was broker, but it was one in one or something or 1.5. And one point, I mean, 1.5, and point five for the broker. But this one was, I believe, two and one for the broker. So that one was three 2% lender fee plus one precise, 1% broker. Yeah, whereas the other one was 1.5 to the broker, sorry, point five to the broker and 1.5 to the lender to the blenders for the listeners

 

Erwin  

benefit, but there’s lender fees broker fees. And so we’re, for example, overseeing 1% broker fee, it’s 1% of the loan amount that goes to the broker that’s an appropriate is paid, the interest rate is goes to the lender, whoever is actually has the money. And then the lender is also taking 2% lender fee based on the amount of the mortgage. Got her a complete novice. And then how long does how long this run will take.

 

Diana  

But that long, right. This one was not that long. That was like, two months. Yeah. Pretty good. Is a two month project.

 

Erwin  

No kitchens, no bathroom. Don’t you just use the

 

Diana  

bathroom? Yeah. Because it wasn’t. Yeah. And like that, for example. My husband doesn’t do exterior work. So the roof was done from like, one of our supply whenever, right.

 

Erwin  

Half story, it was one, two and a half, three and a half story. Yeah. So those those are really tough. Yeah. Because they’re steep peaks. Yeah. Okay. And then can I ask what you sold it for? Seven. But you sold for eight? And you

 

Diana  

know, 754? I think that sounds right. So I’m 54. Yeah, because we were above because our our numbers, we want it to be above 750. So that sounds right. 754

 

Erwin  

is a pretty good. Yeah, we did go up 500 for the house. 7500. Rent a budget. Plus your carrying costs and costs. Yeah. For only two months.

 

Diana  

No, no. What do we know? This was my this is the one hole we were there for a whole year. Remember, even though the rhinos were to mind member? The whole problem with the homeowner your

 

Erwin  

dirty clothes. So you had to pay carrying costs the entire time? No, so

 

Diana  

we had money. So we we weren’t sure what was going to happen. So we ended up paying the house in full. You pay cash, we paid that house. So we had a six month term with with the lender. And when it was time to renew, we decided not to renew because we weren’t sure of what what happens. So we just paid it out in cash instead. So we did that for the purpose of not knowing how long this would happen. And we didn’t want to put ourselves in a bad situation.

 

Erwin  

Damn, good thing of cash. Good, Lord.

 

Diana  

I mean, like,

 

Erwin  

when you can renovate credit, you had to close on it, but you didn’t have control and you couldn’t renovate it. Is that what you’re saying? How can you the holder for six months?

 

Diana  

No, no. So our plan was it to be in and out in six months. So we did a six month term with the lender. But because we had the negotiation problems with the buyer, first right of refusal, then midway

 

Erwin  

he was like saying he was going to buy it but then never bought it just drags you along.

 

Diana  

No. What was happening was basically we had our APs. And so we put the terms together. And we with our lawyer was send it to his lawyer and he would take two weeks to respond by. So imagine every single response by would be two weeks and he would try to change something small every time to make an excuse, waiting for his money. And so basically in the end, we just agreed to all his da, and we’re just like, whatever you get it. And we’re just like, because we knew he, after a while, we realized it was just a stall tactic. And then we just agreed, and then he couldn’t close. How long was that negotiation

 

Erwin  

period?

 

Diana  

From January to June? Good lord. Yeah, it was six months

 

Erwin  

to negotiate a sale.

 

Diana  

So that was like, for example, a huge learning experience for us. And first right of refusal, for example, terms become very important, right? Because with our lawyer was, since we didn’t have a defined negotiation terms,

 

Erwin  

you need the end date that right refusal? Yeah, well, we that we

 

Diana  

had an ND to the bigger part of it, but we didn’t have like negotiating back and forth, like allowable time for you to respond back. Right. So for example, then it becomes ambiguous. And then the lawyer is like, well, two weeks is allowed. And so he was doing his maximum. Right. So it was like that, because because there were certain things that were ambiguous, we have to go with what seemed right, or what seemed acceptable, like even for the appraisal, actually, some of that time was also the appraisal he took, he took a month to get his appraisal, where we were, we got it in a week, you know, like, and so he was just taking his time, because he’s waiting for his money to come. Yeah, so we have pretty like exciting type of project. But then use it

 

Erwin  

like that’s a really good lesson. I’ve heard this one before.

 

Diana  

Well, to be honest, yeah, good. Using our first right of refusal, I think, I don’t think that kind of project will ever come again. I don’t think it’s very normal like that. This guy knew a lot about a lot about law, like the this guy works on like crazy as business projects. Like he knows a lot a lot about the law. And he’s a lawyer, he’s an accountant, but the kind of projects he works on are like hundreds of millions of dollars kind of negotiating. It’s professional, I was negotiating, it’s a professional 100%. So I can tell you that I learned a lot from him. But the guy was actually really super nice. Actually. I learned a lot about his business to be honest, me and him were chat a lot. I would like ask him because like, you know that his contracts for his business? I mean, I didn’t know this. But I feel like everyone does are very similar to the way we write our contracts to like the same terminology gets used. I found that very interesting. Actually, like they have finder’s fee like he was the Finder and his business deal is really cool. Actually, I really enjoyed reading his contract. Right.

 

Erwin  

Right. Right. It’s actually a Dan Kennedy lesson that whoever writes the contract is in control. Right? So if the professionals if they’re in control, and they know more than you do that you’re an advantage disadvantage? Yeah. He probably knew this the whole time.

 

Diana  

Probably. Yeah. Or Yeah, or like that. He just knows some, like, he knows a lot of lawyers like, because the guy is also much older man. So he’s very well connected with things because even a little thing, for example, in the market, this is how well connected he is in the market. The house should have been appraised at at the height of the market, probably around 760, the lowest and around 800 The highest. That’s the numbers we were expecting. And ours came out at the lowest at 760. That’s what you got to pray. Oh, no, no, sorry. We got ours got praise at seven 790. Do you know what his got appraised because this connections 725. So imagine when we have to go in the middle? Great. It was but it went to 760, which was our number anyways. Okay, because it’s funny when we first sent him the offer, we sent him I think 762 or something like that was our offer. Because like that, to me, I’m about being very fair. I was like, this is the fair number. I think this is so kovanda funny that we ended off in that. But again, it was more not about being fair. He was stalling. That was his thing. So he was willing to spend the money to just wait until he got to it to like the hopes of being able to buy it back, which it just didn’t end up happening. Right.

 

Erwin  

So some rough numbers. Let’s see You cleared over 150 on this. No, no,

 

Diana  

no, like ADK 60 to 80k.

 

Erwin  

So on a deal that went completely sideways, you still

 

Diana  

can you imagine if we actually bought at the height of the market like that would have been like a homerun. Right, right. Yeah. Like like 50 or something. Who knows? If we got it and if we sold it when it was supposed to be in like February March, we probably would have been laughing

 

Erwin  

but this is the truth about real estate investing because of your sophistication. The fact that you had cash to be able to carry it your contracting background and how you did how you analyze the deal getting in he’s told me he has to make a pretty good amount of money. Like you know, like we were talking before like before the show before we recording, there’s all these other flippers are bankrupt. Yeah. Versus you made a pretty good amount of money. I know it’s not as much money as you wanted. No, but

 

Diana  

I mean like that, like we’re hitting a recession and we’ve made that kind of money, right. So that’s just the numbers.

 

Erwin  

Yeah, terrible.

 

Diana  

Yeah, and this is like I everything, you know, everything’s dying, you know, I don’t know, I like everyone’s liking

 

Erwin  

ourselves. Are you guys proud of yourself? Yeah, I

 

Diana  

think like that, like, to be honest, it definitely is. And even the private lends to that I do. Like, they’re all been going well. And I feel like, I feel like it’s really actually helped me solidify specifically actually, on the private lending side, I started making changes to things like that, like, for example, I only go on first right now, just because of how things are. And I feel like all those things that I did, really helped me to make my deal safe. And I made some other changes, too. But I feel like that was the because before the last few years, I was doing seconds, you know, I felt very comfortable at the market, I was okay with it. Whereas like, now, I’m like, No, first, and like, under like, 75, like one is that like, 60% loan to value, you know, like, now is just really being careful with the market to tell you how crazy things are. And for example, you know, I kind of lost actually, what do you call it, like, I lost faith in the appraisals. So there was this deal in that I was private lending to. And I look at this deal. And there aren’t enough deals around for meat and like, not enough property sold, that my expectation was I was going to really lean on the appraiser for the valuation of this property. And I remember talking to lenders, because they had bought for bought it for, let’s say, 300, or 325, something like that. And his, the appraiser appraises it for the exact same number. And when I was looking, I’m seeing things at like 250. And I’m seeing renovated properties as 325 and 350. Like, or like I would say, like, yeah, like renovated properties as a 350 and higher listing, maybe 360, or something. And this appraiser appraises at that.

 

Erwin  

And this property was like needing renovation,

 

Diana  

like a full gut cosmetically. So I was just, I was like in shock by that appraisal. And the funny part is that I kind of checked his listings, because I was like, What is going on? Like, how can you do that? First of all, there’s no pictures of any other houses or like, you know, when they when it’s like those MLS listings where they just see soon or coming soon or something like that. So they had no pictures, which is strange, because

 

Erwin  

like, sold, you know, these were sold properties, but no pictures,

 

Diana  

but they had no pictures. Like, yeah, like, I feel like those happen, you know, when it’s construction type ones where they’re in the middle of a construction. So they don’t show you the pictures, but they kind of put the listing up or just to see if anyone’s interested or didn’t even know but you don’t like it busy. You have that? Yeah, but then you have the picture of the house. I’m in the front yard. But don’t you see those ones? Usually I feel like people do that are the ones that are like in mid renovations, or like they’re just trying to see like drum up business, I guess? I don’t know, you know, that’s better than me. A

 

Erwin  

picture of the house outside? Yeah. At a minimum an artist rendition, right. At a minimum? None is weird.

 

Diana  

Well, that was an eye thing I was gonna say maybe is just the way like realtor.ca. Or actually, I was looking at how a sigma, maybe how how sigma displayed those specific properties, because that’s gonna say, so I look at them. And I’m just like, I’m not seeing pictures is really weird.

 

Erwin  

So that’s a good point that you double checked, the appraiser went back and you’re checking the appraiser.

 

Diana  

Yeah. Because like that, because I usually do my analysis. And then the appraiser to me normally is just a clarification on the numbers that like, close like resemblance like, okay, my thoughts are right, or vice. Yeah, but when I realize Yeah, you that’s what I mean. That’s I kind of lost faith in them. Because I had two situations like that. That was this one was just the worst one, but like that, like we were so far off that I just got really confused on why so I made me look into his because I was like, what are you seeing that I’m not seeing? And then by chance, I don’t know how I see a property. I happen to see the a YouTube video of it, like a listing of showing the property. And I was like, Oh, that’s weird. Why isn’t it on the listing? So then I was thinking because I know like Hamilton has their thing where like, they kind of segregate themselves,

 

Erwin  

like Hamilton has a share with Toronto.

 

Diana  

Yeah, yeah. Or even on realtor.ca Because I’ve checked everywhere like I was like trying to check out this listing, like trying to find this listing wherever I could. So I was thinking like that because it was strange that I found a YouTube of it showing the property the house and the property or house cat. It wasn’t dynamic or anything, but it was livable. It was an okay conditions just dated and then not even date it just not really. I don’t know, nicely done, I

 

Erwin  

guess. Okay, so, like a 10 or 20 year old renovation.

 

Diana  

Yeah, maybe something like that. We’re like you know, like it A time when people love to put so much colors on the wall. I did that to me. Like it was kind of like that, like a little like you can tell a family’s living there, you know, like, massive blue bedroom because it’s like a boy must live there like pink bedroom because, you know, like, that kind of thing going on. Whereas like, I feel like when you go to sell, you just paint the whole house gray. Right? So just not ready. So it was like that, like it was like lived in but it was livable, and it wasn’t bad. Like, maybe super, very minor cosmetic. And they were comparing that to my rundown, their rundown falling apart house and saying that they were about the same price. Right. So then I go and tell the guy and the thing is, so this guy, a friend of mine, like lending to him. And he had all the money to fund for it. And obviously I asked for proof of it and everything. And he just wanted to work with me. And he’s just like, I want to work with you on a lend for you. So he’s like, even if you don’t lend at the amount, I’m happy to do whatever managers want to work with you. So I ended up lending to him to the number that I felt was and doing 80% of that. So he for him, I think it came out to around like 55% loan to value from the appraiser he got there was something like that. But it was because I didn’t feel comfortable. And I but I felt comfortable because I saw that he had enough money to do the project himself and get it done. But I just wanted to like that make sure my money was super safe. And I just had to do my numbers. And I couldn’t even take that appraisal as as like for anything. Like I was just like, I don’t know where you got that from closely. As like one they were very far away from the house already. But again, I understood that because there weren’t enough of them close by. But still, I was just like, why didn’t you use this one? You know, like, this one’s

 

Erwin  

pretty that 325 That was in Windsor. So that was the Windsor one. Right? Windsor is cheap. Yeah. Okay, then everything worked out. You got your money back.

 

Diana  

That one’s still on the go, actually. So that one is not a flip. That one’s a burr. So they’re planning to refinance it.

 

Erwin  

So it’s pretty recent. So they picked it up for a pretty good discount already.

 

Diana  

Yeah, like it was. I don’t actually remember sometime this year. I personally didn’t think it was a good deal. I even told them, are you sure you want to do it? And but he was like, I’m ready for him on it. I’m confident and numbers. He’s like, I’ve done this one before. So I’m like, Okay, I’m just letting you know. But again, like I was like, I’ll definitely help you out. And I definitely like that, like, that’s one of the things I like about private lending is also just knowing what everyone’s up to, you know, like, I like having that relationship with them. Like, how’s things going? Or I usually ask, like, hey, when you’re done you can we talk about it, how WANs and whatever, whatever, you know, I even had one guy, for example, he was having problems selling the property. And I was helping him out trying to, you know, give him solutions to help sell it out. And he was able to sell it this other person. So I kinda like a little bit of the end, which is a little nicer when you’re don’t know someone at all. I feel like it’s nice to lend to someone that you kind of do know, and can actually have that back and forth conversation.

 

Erwin  

So everyone you’ve learned to they’re still taking your calls. I ask because I hear lots people aren’t returning calls. Oh,

 

Diana  

really? Oh, no, I actually, although, you know, it’s really funny. Yeah, they actually everyone did. And but again, the way maybe it was the way I came about it. Because when I saw this whole thing in September happening with just like, everything kind of going crazy, because I was just hearing so many weird things like people weren’t getting there. People weren’t getting refinances, or not the high, like not even 85 80% loan to value or 75% loan to value. I went into like panic mode, and not panic mode, but I wanted to like let all my borrowers know what was going on. So I sent everyone a message actually, I’m like, Hey, this is not panicking. I just want you guys to start looking into your refinance options. Yeah, cuz all of them are burst. Yes. Because like that right now, for example, I would never lend to a flip right now. Unless if it’s like a super stellar crazy, amazing deal. But so all of mine are barrage right now. So I told them, I’m like, go talk to your brokers figure it out, make sure you’re still okay. And if not, like start making your plans now so that you’re ready and prepared for whatever your options are. Right? So I kind of like mass messaged all the people that I told them that because because obviously if I’m hearing information, I’m going to share it especially cuz I’m like, like what I said, right? Like, if you guys fail, I’m failing. And I’m like, we’re not going to fail. You know, this is not an option. Right? So I let everyone know and yeah, everyone respond back. Some of them were Thank you, you know, thank you for that. Other ones like, oh, like he was a broker. So he’s like, Oh, he’s like, you know, I haven’t seen anything on my side. It should be fine. So yeah, everyone responded back so

 

Erwin  

let me excuse me still happening are here. Some appraisals are coming in late, but then usually just go to the switch to the lender and then the appraisal will come in. Yeah, I’m hearing. I’m hearing appraisals are light that’s the really the only real issue for people who can qualify for stuff. But the bigger thing is bankruptcies. And again, anecdotally, I have clients, I have nothing to do with these private lands because I don’t private land. So I’m biased. Obviously. I have clients telling me like, people aren’t calling the back. If you believe like money, too.

 

Diana  

Luckily, I don’t have that. But again, I like chatbot check up on my people. Like I like I run the numbers with them, too. You got to, I need to make sure they can afford

 

Erwin  

a little due diligence. Yeah, and we’re gonna get into that. Very, very important. So you’ve invested heavily in your education. Yeah. You mentioned a certain rich company. When you What’s that? What year? Were you with them?

 

Diana  

I don’t even know. Definitely before. COVID. Like we said, per day, your time all right. Yeah.

 

Erwin  

Yeah. So like, 2018 or something? Like,

 

Diana  

yeah, maybe around there. Yeah. 1718. Somewhere around there. Yeah.

 

Erwin  

So you’ve been you’ve you’ve taken some of their courses. Nothing crazy. No, no,

 

Diana  

I didn’t do any like mentorship, because I was just more like, we were kind of going into the next phase where we need to start figuring out how, like, that’s actually what Rich Dad Poor Dad did. For me. I never understood how people were getting big off things. And are not in Yeah, or especially when you’re told for example, like don’t work with others, you know, people are gonna scam you. And like, I would always be told a lot of these things like people are going to scam you and stuff. So I was just like, bad advice. But I mean, yeah, like, there’s not bad advice, but at the same time, it’s not. It’s not advice to like, yeah, like, you just have to be careful with the way you go. If you’re gonna do partnerships, definitely, you’ve got to do like, in itself, that thing has due diligence. And that takes forever to find people that you can. But so my mind of how

 

Erwin  

Steve Wozniak and Steve Jobs partnering? Yeah, we never would have apple. Yeah, right. So it is possible. It’s a lot easier, in my opinion is a lot easier. Because real estate such a, there’s so well insulated by the market. But still people managed to screw it up. Continue, you’re learning about, you’re saying that you were learning how to scale. That was one of the was it that was my

 

Diana  

thing like that we were doing burrs and flips very slowly, though. Like, I think even a year, we didn’t do them, I think we got traumatized by one, it was like, so stressful that we were, let’s take a break. And then we realized, for example, like the community is important, it’s good to have we didn’t have any of that. What else was, what was the other thing? And it’s just I didn’t, I always thought you had to do things alone. And and like that, like your money kind of depletes after a while. Right? So that was that was one of my issues. Like I’m like, How am I supposed to grow, which is me and my husband, I just didn’t understand it. And then reading Rich Dad, Poor Dad, and going to the courses really, like was one of the kickstarts to figuring out, this can actually be done. And it’s okay to you know, do partnerships or like to group things together, have a community, all that stuff, you know, specifically not working with people was the big or, for example, I didn’t even know there are communities out there that could help you. Because I think that’s one of the biggest things, you know, you have a downer, having like something stressful happen, you can go talk to people that understand you, right, because being an entrepreneur is like completely different to a person who has a job, like they don’t understand the kind of stresses and things that you go through. So those kinds of things that really kind of kick started, because it was like, Oh my God, there’s people that can understand me, you know, the people that can help and that are, they’re willing to help and share because I think that was also a mentality that I got somehow that, like, people don’t like to share knowledge. And, and so, you know, like, you’re trying to figure all this out on your own, and it’s so hard to do a whereas like, if you have a community, you know, you can help support each other in so many different ways. Yeah, bounce ideas and just problem solve together and things like that

 

Erwin  

the quality of community was important. Yeah, I mean, some of the lessons of the last like six 810 months is quality matters.

 

Diana  

Well, and even coffee and all different areas and all different areas,

 

Erwin  

like contractors, for example, quality will matter. Yeah.

 

Diana  

Yeah. Like it’s really funny. People tell me because our projects always go well. And they’re really funny because people are like, how does it happen? And I’m just like, my husband and yeah, you have more control because like a contractor can just disappear on you if they want to my husband cannot disappear from me. I know where he lives

 

Erwin  

and beyond Rich Dad, you were part of a certain tribe.

 

Diana  

Yeah, it was part of cash flow tribe. I was also I’ve been part of so many. I mean capital Tribe i like paid for because I’ve been part of other ones. I guess the free ones. I think you also get to a point where, like, once you’re building that community, and you’re the people, I feel that you get to certain levels that, for example, there’s like that all these different groups. They’re very entry level and have an entry level. Yeah, yeah. But it’s Yeah. But I mean, as an even information, I feel like it just gets very entry level. And then it’s really about getting to know the right people and getting into the right communities. But to learn things, like let’s say, right now, I’m in Marstons. Group, but that’s because like that, like I’m interested in capital raising, and he has done, you know, he’s raised $250 million, like, the guy is, like, very experienced in the area. And, and I have, you know, like, I’ve not done that much, right. So then I went into his which, and that type of thing, to me, capital raising is a much more advanced type of this, like something an advanced, I don’t know, real estate strategy, I guess you’d say. Whereas like, I was like, Yeah, I know how to do a flip. Yeah, I know how to do a burn like I get it. You know, is this

 

Erwin  

more of an offline, we’ve had some past guests who’ve done very well, I can share with you how they do it. I know exactly how to do it. I’m friends with a lot of them. Because that’s helpful. Yeah. I always love to learn $30,000. Thank you. So sweet of you. Like some quick tips, for example, like, for example, my friends who raised lots of money, allow the system so people that you and I both know, who have lots of joint venture money, they usually have one whale investor. Oh, yeah. Right. That’s usually like 80% of their funding.

 

Diana  

Do you have any whales out there?

 

Erwin  

Actually, no, some of them listen to this. I’ve actually no, I know, I’ve had some guests that track whales on the show. That’s not the point. Just joking. By just by them. They have like their personal interests. Were rich people do the same things. For example, like boat clubs. All the rich people belong to them. Yeah. And if you’re interested already is in boating. Just talk to people at your boat club. Like literally, I know, people who have raised millions and millions of dollars at the boat club through one individual. Right

 

Diana  

here. You actually we started getting into golfing for that exact purpose. And you I know you’re in it too. And I’m like, I know the golf. We’re just like, we’re not. Where do you go? We just go like right now we’re learning. Okay, so we’re just going to the T zone. Okay. Oh, we’re actually going to play yeah, we first need to learn how to play properly, right? We don’t want to embarrass this especially going to talk to people and need to like actually know how to play first.

 

Erwin  

Hopefully no one hits on this. But for women, that’s less important. And it seems that’s just from the stories I hear from my field friends who are actually no log log clubs have extensive beginner lessons specifically for women. So they’re all on the same level. And lots of them are just loaded. So don’t be don’t be afraid of joining one of those. Because again, like a lot of them have the wives of the loaded. They’re loaded to Yeah, right. And in my experience, there’s plenty of women who are responsible for the household investments. Mm hmm. Right.

 

Diana  

Yeah. Like, isn’t that very common? I feel like yeah, so because usually the man’s like out working and stuff, and then they leave like, okay, especially if we’re gonna be the housewife might as well like, make sure all finances are taken care of,

 

Erwin  

I suppose. Yeah.

 

Diana  

I’ve seen both. Oh, yeah. No, for sure. Both. But I feel like it is very common for women to or the wives to kind of take care of now, I’ve just seen it on my side, the families that

 

Erwin  

in my experience, my clients, even if the wife, that’s the one that’s steering the ship on the investments, they all have jobs to now that I have maybe a few of them are stay at home. But very often, they have full time careers, six figure careers. And there’s other driving the household investment driven work. So for yourself, I wouldn’t be afraid to join any of these women’s clubs, especially at the beginner classes. I know it costs money, but I don’t think that’s an issue for you. But I want to get to like you’ve met people who are now bankrupt, as well as being a part of these groups.

 

Diana  

I meet a lot of different people, which very helps to learn from everyone’s mistakes or whatever they do even their successes,

 

Erwin  

but you saw the red flags before they got into trouble. What are some of these red flags? We’re not gonna name names.

 

Diana  

But I saw very, very big red flags was disorganisation was one you know I remember asking for information on a deal whenever you want me to lend you money. I need details what’s and and I wouldn’t even get the basic like I have my first level I don’t even go full on like I have my first level I just need to see if it’s even worth it to me to go further. Like I have like phased approach I’ve like to generally but sometimes even a third like I have two to three phases before I like to go through your lending, I mean, sorry, I’m lending you money, right? And so I couldn’t even get through phase one, you know, so that one was already a very big red flag. You raised

 

Erwin  

a red flag with them. You were going to due diligence. Due Diligence you’re gonna do, we can’t work together. This is not a good fit.

 

Diana  

Yeah, this appeared. And and that was one and that happened twice. Yeah, same person. So then, so when the second time it happened, it was kind of like that came into my head, okay, this guy doesn’t have like, he’s just looking for easy money. And now it’s like, I don’t give easy money.

 

Erwin  

Wow. And we were speaking before we were recording this individual investors now bankrupt most professionally and personally.

 

Diana  

I don’t I don’t actually fully know the details. But yeah, at least professionally, personally. Yeah. Okay.

 

Erwin  

It’s very sad situation.

 

Diana  

Yeah, it’s crazy. But it’s like that when you’re very. And one of the actually, this was one of the big issues that I found was that when you’re finding a team, don’t find people that are the same as you. Because I saw that I was saying that this is going to be a big disaster was because who’s helping run the numbers in the business? You know? And I was so worried about that. Because I saw I saw that I saw. Well, that I mean, that was small indicates, but I saw like the deals, I had deals come to me to that they actually did make it to me. And they, again, we didn’t even get past phase one. Like it just didn’t work at all. I was looking at these numbers. I was like, you want to be in debt? 300 A month or 1000 a month? Because I don’t want any of that. No, like it was just create these deals that I was just, but then it was

 

Erwin  

like the deals that were cashflow bad now and worse later,

 

Diana  

yeah. Oh, that’s

 

Erwin  

a that’s a great offer.

 

Diana  

But it’s because they didn’t have someone behind them to actually, you know, check the deals for them make sure that they were good deals,

 

Erwin  

right. That sounds like a terrible business. Yeah. And

 

Diana  

that’s why it’s so important to have the right team, it’s like, you have to have people that are opposite to you to make sure that this is your weakness, but it’s their strength. Right, right. You have to have that kind of thing. Because if you don’t, that this is exactly what happens. I feel like in general, I mean, I feel like in general, if something is going wrong, like you’re missing someone in the team to to make it happen. I mean, yes, there are, let’s say probably situations where you go bankrupt, and maybe I don’t know, I don’t I don’t know enough. I’ve never seen like, I think they’re the second people I’ve ever heard that are bankrupt. So I don’t know really how that works. But I just feel like maybe there are some people that go bankrupt, and it’s just happen, like just everything aligned badly. I don’t know. I don’t know if this is that a thing? Because that happened or is usually it is just like,

 

Erwin  

This is real estate. Bull Run for 12 years. Right? You have to do something really wrong. Right? And when we’re talking about partnerships here, like back to Apple, it’s not bad example. Steve Jobs and Steve Wozniak, they’re completely different skill sets, right? And then when Wozniak bowed out, then you have Tim Cook. Tim Cook is very, very different. He’s an operations person. Yeah. Great. He’s about the execution versus jobs about you know, product development. Very, very different talents. Yeah. All right. Well, class, obviously. But I can’t believe like this partnership that we’re talking about. They were very similar people.

 

Diana  

Yeah. But everyone seen another one, they go through a foreclosure and they were actually very different. Super super. What is it called, like, extroverted, you know, meeting everyone. And then the introvert, like, probably doing the numbers operation. I mean, I know they did operations, but like, so I’m assuming that they would run the numbers. And then same thing going through, they’re going through a process to and it’s just very interesting, that I mean, they’re opposites. But someone dug the hole for someone or they were trying to grow too quickly. Like, it’s, you know, there’s so many different factors. So, yeah, I think that’s another thing. For example, for me, I’ve never been a person that wants to grow super quickly, because that’s another issue that can come up. You know, when you’re growing so quick, like, really quickly. You just don’t know what kind of things you’re missing. Things can get left behind, just because your goal is way over there. And you’re in the future. But you forgot about what’s happening right now. You know, so there’s just Yeah, it’s so interesting to see different ways of also how failures happen because it’s also to be honest, for me nice to learn from their mistakes and just be like, Okay, I should not do this. Some of them. I mean, some of them already knew I was like, probably shouldn’t be doing that.

 

Erwin  

But you don’t know. That’s why I never say anything. I’m sure lots of people thought jobs would fail. Lots people thought Elon would fail. And Elon will say like, Tesla almost went bankrupt three times. Oh my god. Yes. SX, if I think it was Falcon nine, I think it was a third or fourth attempt, I

 

Diana  

think sleeping in his factory or office just trying to get things to work.

 

Erwin  

The Falcon nine, I think it was talking nine if the third or the fourth attempt didn’t have didn’t happen, they were going bankrupt. Yeah. Right if it didn’t work, and that’s probably when

 

Diana  

he was sleeping enough, enough is trying to make sure happens.

 

Erwin  

But my point is that there’s risks. And also also these companies that have been have gone bankrupt. Like for example, I’ve always done buy and hold, like I buy, renovate and hold I flip. But I do a conservatively because my experience with construction and contractors is it’s not that easy. So I do one at a time. Right. So even if one goes out of the disaster, it’s not the end of the world.

 

Diana  

That’s what we do. We also do one at a time, too. But like

 

Erwin  

the gentleman we’re talking about, they had just the bankruptcy statement. There’s like nine on the go. Yeah, that’s five hour radius. And one of them’s One of them’s in the Caribbean.

 

Diana  

Yeah, that’s exhausting. One of the reasons why I like private lending, you know, how some of my past is done working, so that I can like work put my energy into like the what the one maybe like that we may try to expand to go I mean, now it’s things are changing. But I do plan to expand but like that, like, you can’t go from like nothing to like a million so quickly, because it’s just, to me, that’s inevitable. Like, you see it happening, you grow so quickly. And you’re not any fear, especially maybe not, I don’t know, I don’t know what the situation but like, I’m just saying in general, like, if you don’t hire enough people, you don’t know how, especially the people that maybe making sure you have a good trusting to grow that big. Like you just that’s going to fail. Yeah, if you’re gonna grow quickly, like you have to have like a quite a few trusted people to just manage all that, because that’s just a lot of work.

 

Erwin  

Right? Difficult out there. But congratulations on your success. You’ve done really well. You should be proud of yourself.

 

Diana  

Thank you. Saying hi from you. You have so much experience I don’t

 

Erwin  

I don’t have the most experience has talked to a lot of people. So I know and again, I know a lot of people are hurting. And sure you are if you if you face some difficult challenges when you came out with it quite profitable. Right. So congratulations on your success. Thank you so much for coming on the show. Working people in your social medias exploded. Is that where you spend most of your time in terms of like sharing? Content Creation? Specifically Instagram?

 

Diana  

Yeah. Instagram, Facebook also just started LinkedIn.

 

Erwin  

Frequency tick tock. No. And then where can people find you?

 

Diana  

Like on Instagram investor girl, Diane? Actually, LinkedIn is the same. I left the investor girl Diana. Facebook is a little more complicated. It’s like my full name. Spell your full name. If you want to share, the group might be easier to find, because it’s labeled as read. But it’s the real estate investing district is what the group is called. Real Estate Investing district. Yeah, and it’s probably actually easiest. If anything, I’ve now my dad lives raza.ca Which that links to all my social medias. And we have a challenge if anyone’s interested. It was challenge yeah, it’s to help people set their goals. So if you’re looking to set your goal if you don’t, if you are not motivated or energized by your goals probably have the wrong goal. And so we’re doing a five day challenge to help you identify your goals and try to see if we can motivate you guys to find your goals. Okay, cool. Because you don’t realize actually that some of us have the wrong goal and we wonder why we’re not able to accomplish it.

 

Erwin  

Yeah, that was just our chairs presentation on Saturday was related to goals. All these feel things like buying more properties is the answer when at the end of the day, really, you need income and cash to retire. Properties are not income and cash

 

Diana  

so I always found it especially when I started going everyone was like always about the number of doors Yeah, and yeah, I didn’t never got that. So I’m like I technically don’t have very many doors because all my money is going into private lending or like that we’re

 

Erwin  

doing it all wrong. Obviously all that money in the bank wrong

 

Erwin  

and I just because honestly some of those people with lots of doors who don’t cash flow there, and if they didn’t run their numbers with

 

Diana  

you, you’re gonna see all this craziness happened to people that are going to really struggle with like all these doors and because we’re gonna go through a phase of a lot of people also probably having to go through evictions right now a lot of people Mr. I mean, I know employment is still high, but I don’t know I have forecasted that employment is going to get worse. I think employment will get worse if that happens. We’re gonna go through a whole bunch of evictions and if you go Got a lot of doors and you can even withstand a couple vacant properties or people just not paying. That’s going to be a crazy thing that I think we’re going to be seeing next year is that we’re going to see a bit of chaos happening. I think, firstly, curious on your opinion,

 

Erwin  

greed was so bad, right? So for example, we have this one client, we a recent client, who has new construction condo just closed a few months ago, even though he’s rented. We split today’s interest rates after heart costs. He’s negative $800.

 

Diana  

Oh my god. Yeah.

 

Erwin  

Right. What about these people have multiple?

 

Diana  

Yeah. closings and new construction condos on variables?

 

Erwin  

Yeah. Well, yeah. So is this gentleman? Yeah, negative 800. Right. And we’re in for probably two more raises. Yeah. Imagine if he had like, three or five of those, if you had five to be negative 4000 a month. But what if your vacancy

 

Diana  

is crazy? It’s really crazy. But I think I don’t understand that let’s say people did was like that. Like, for example, we actually went fixed on our all ours because it was just like, the rates were so amazing. I was like, What is saving a couple extra pennies and going variable? And I also felt like that like yeah, I was just like, why did people worry about the variable I don’t know. Like, at least my my holds are, are on fixed. And I mean, we actually went through a refinance. So that was kind of a nice hits. I was like, oh, in a negative way. Obviously not nice and was a bad hit. Not bad. We’re still cash flowing, but just kind of sucks to see some of your profit go away. You’re like, Okay, goodbye, little dollars.

 

Erwin  

You need to change your handles. This should be sophisticated investor day, and just an idea, just royalties. History. Thank you so much for doing this. So great talking to you. I’m glad we get to spend some time. I don’t know how else to say it. But I think people should like bounce questions off of you. If they’re looking at joining clubs, because you’ve been you’ve seen some crazy stuff. Of all the people I’ve talked to you’ve seen some of the craziest stuff in terms of people who were didn’t get the greatest guidance in their bankruptcy court.

 

Diana  

Alright, so yeah, thanks so much for having me on the show. This was a lot of fun was fun chatting about this, all this stuff. And yeah, thanks so much. Thank you.

 

Erwin  

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

 

 

To Listen:

 

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Youtube: https://youtu.be/qeQGKG-4aGE

 

**Transcripts are auto-generated.

Erwin  

Welcome to another episode The truth about real estate investing show with me Erwin Seto as your producer and host. The truth is we do have more than more than 17 listeners of the show. And I want to thank every one of you who has left a five star review on iTunes and share the show with people you care about. Davis thanks to us and our wonderful guests that we have ranked number 81 And all of iTunes in the business category. When I started this podcast in 2016, I had no idea this podcast would be a top 100 in any category in the entire world. So I’m speechless. Shout out to my friend Jay Wong, who is a mega Podcast Producer for sharing this on social media letting me know, I don’t check and ask for you my 17. Listeners, please do continue to share this podcast. And if you haven’t, please do leave a five star review. For the most reason comments as well. I do read some of them, I generally avoid them. And because I try to avoid the negativity that’s out there. But for those of you who do care about the truth about real estate investing, there are many unqualified real estate experts out there. Many of them are good people don’t realise they’re unqualified, and they have, unfortunately bad advice. And sadly, a lot of them paid a lot of money for inexperienced but charismatic coaches. I was chatting yesterday with a recently bankrupt real estate investor, who has been advised against coming on the show by their lawyer, but I’ll share my thoughts. I did bounce my thoughts off of this individual agenda and bankrupt investor owing almost owing almost 10 figures. It’s Yes, very sad. There are several real estate investors and businesses that who are going bankrupt. It’s still early. There’s many rumours out there. I haven’t seen anything like this. Since 2008. This actually, I think it’s much bigger now, because of the amount of good and bad of social media, like they think the popularity of social media. Again, more people were able to raise capital and gained fame. They social media, and then more investors have ponying up money. Hence, there’s more companies that are going bankrupt. Again, many are good people, they unfortunately just put their trust and 10s of 1000s of dollars into memberships and coaching programmes, who often did teach a lot of good stuff. But many too many investors bought too many properties too fast. Without proper systems execute. mindsets, not everything, anyone who tells you that can feel free to come hang out with my friends. Because even like Cory Lee, who was on the show, a very successful entrepreneur, we joked in the show, you know, vision might be 10%. Without execution, the other 90% You’re going bankrupt. So, and also the quality of the deal to me is everything, not mindset, quality, coaching and mentorship is everything as well. But to me, those are based on track record. And again, there are laws on successful coaches out there right now. Anyone I say so rightly or wrongly, I evaluate a coach or membership group based on their client outcomes. How are their customers? How are their coaching clients doing? I personally was lucky. My own first joint venture partner, my ex now my ex wife has a renovation business. Her father who mentored us was an office investor, but he was a very successful master plumber, I experienced firsthand how difficult renovation projects are and including staffing them. I’ve personally swung hammers removed, removed rusted out plumbing stacks from 100 year old properties, and slung paint on walls and ceilings. I didn’t do it long because I wasn’t very good at it, and was hurt myself many times. I’ve had my own burrs, mail flips, go over budget take too many months too long to complete, putting strain on budgets. For that reason, we only ever did one local project at a time. And that’s all my team did handle. It had to be local, because it needs to be close in order for time purposes. And also for staffing. We teach our clients the same again. That was how I learned how to real estate invest. It’s always worked out for me. This is the same thing we teach our clients and will only work with the best the best contractors as their there’s only so many of them. To me from my experience. Again, staffing, a renovation project is not the easiest thing to do. Hence, we are ultra conservative on how many projects we take on at a time. This may have kept us from scaling up big but also took us from being overstretched, as generally, again, we only ever had one vacancy in our own portfolio. We’ve only ever had one vacant property at a time. That was the property that’s being renovated. So we always had rental income coming in to cover everything else. And we’ve also had past guests of this show who grew really big portfolios 50 doors 100 doors 100 properties like Russell Westcott Jared hole, Ben Westerfeld. They’re all good people, but they shared on the show the lessons they’ve learned. So hopefully everyone’s had a chance to listen to those. The pursuit of a big portfolio and the rush of raising capital was not the way to necessarily build a successful investment portfolio. successful investment portfolio is one that makes money. Making money is the key performance indicator. Now how many doors are property about the properties one has, it’s making money. And that includes cash flow to cover everything. And that means different things for different people if you’re a real estate developer, and cash flow means very, very different things to versus myself as a small residential real estate investor, making money, a good return enough on your time is important. And also on your grief. That to me, that’s a sign of good investment. Joka stands who has been a client of ours, he used to drive I think about four hours each way to Sudbury. So that was his choice. I let him know my thoughts on that. But again, that was his choice. He felt it was a good return on his time, that wouldn’t have worked out for me that everyone has to make the decision for themselves. Again, while being a visionary is great. Visions great. But without execution, that business is doomed. It’s well documented that Apple would be nowhere without Steve Wozniak. And then later on Tim Cook, who is now the CEO of of Apple, Elon Musk did not do this all alone. He’s not just a great visionary. It’s my opinion that that’s one of his greatest talents is attracting top talent, right, because you still need to execute. Vision, ideas that are great, they still need to execute something that people will pay for the risk is great in every business, Apple Tesla SpaceX of all nearly gone bankrupt several times. I believe novice investors and novice coaches do not understand the risks. As these recent bankruptcies in the real estate market involve investors holding multiple flips at the same time, they’re either flips or their burrs, or their developments with no rent coming in finance with expensive private money. Right? No investments without risk. But to me, it’s all about mitigating risks through continuous improvement, implementing best practices, surrounding yourself with a quality team, a quality coach and quality mentors. None of our clients like these interest rates, from my speaking to clients. And I still, you know, I speak to clients all the time, I speak to my coaches all the time how our clients are doing. And our worst case scenario for our clients is, like the worst among story among our clients is they might have to sell a property or two, they’re taking profits, right? They’re taking profits. The funny thing, though, is that listen, these are what we’re coaching our clients to do. If you’re tight for money, sell a property or to take your profits pay off some of those debts. Right? The funny thing is that probably at least 80% My clients say no thanks. They expect their investments to improve over the medium long term range. So they’ll suffer you know cancelling Netflix or Disney plus or eating home more often, or cutting back on expenses in exchange for greater future returns. So if you do want to learn my best practices for from investing since 2005, being an investor being the original investor, specialists, realtor since 2010, my team of award winning coaches who have done 100, duplex conversions, and another 100 or so student rentals, then do make sure you’re on our email list to get our offers, including I have a free book. It’s the only real estate investing playbook. We have webinars, we have one coming up in a week or two on how to convert a house into a triplex which takes advantage which is teaching folks how to take advantage of the new Doug Ford legislation, which will allow us to do so to create triplex is by right, we have street smart property tours of Hamilton and Asha coming up where the rubber meets the road. And we actually apply our theory to looking at actual investment, income properties. You don’t want to miss it because from my experience, well, we all have to work to invest and then we invest to live. Now speaking of folks who invest to live we have client and single mom Arminda some out as our guest today. Armando is a student rental investor, who is being going benefit massively from the over 40% increase to the market rental rates for student rentals. As per the short title, her current cash flows by $1,500 per month between just two properties $1,500 per month, across those two properties, that cash flow will more than double, possibly triple with the new rental rate with the new market rental rates, the inflation on student rentals and such as the benefit of buying rate, using a fundamentally sound investment strategy, renovating with a return in mind and the importance of mentors, friends and community quality. If you’re interested investing in property investment properties, like I’m into my award winning team of investors, specialists realtors are ready to go. You can find us at www dot infinity ball.ca You can find me on social media, if not already. Give you Arminda Arminda what’s keeping you busy these days?

Arminda  

Oh, quite a bit. Actually. You know, I have two kids that are now one is in dental school. One is adventurism school. We have three dogs. I know I’m pretty busy. I actually tell my friends all the time. Now that the kids are older, I feel like I’m busier than when they were actually younger. One of my friends said is because we facilitate them in their world of trying to be adults, and we’re just facilitating and that keeps us busy. And I actually agree.

Erwin  

Oh, I wouldn’t I’d be easier like you’re not shuffling them around for like soccer and dance and all those sorts of things.

Arminda  

100% But then I have my daughter Alexia was in third year dental school and she’ll be like Mom, can you please go to such and such central office and go pick up a jar of extracted teeth? Because she has assignments? And yeah, so that’s what I’ve been doing the last couple of weeks doing it on different dental offices to go pick up jars of extracted teeth from unknown people.

Erwin  

We were in school. This sounds like real stuff.

Arminda  

Yeah, she Yeah, she’s in school. And it’s real stuff. And she’s already seen patients and a lot of her projects. Actually, she has to have real teeth to mimic a situation. So yeah, so yeah, if you saw my laundry room where we keep jars sometimes of unknown people’s teeth, it’s quite interesting.

Erwin  

I have so many questions, but I don’t think I want to know,

Arminda  

I know. Yeah.

Erwin  

So you said nothing about nothing’s off limits,

Arminda  

nothing’s off limits or when our school costs. Okay, so yeah, so school for Alexei presently, it’s $50,000 tuition a year. When that’s just tuition, tuition, along

Erwin  

with lab fees, or books or anything,

Arminda  

everything’s included in respect to that. But then there are extra things like her loops, which can cost up to $4,000. What is that? So the loops are, you know, those looks like the magnifying glasses that they were that were Yeah, with a miner’s lamp on it. There’s that? Yeah, it’s about 4000. And she has a pair and she just invested in another pair right now, a little cheaper, because the magnification is a little different. So all in you’re looking at about six or $7,000 just on lips alone. Becoming a dentist. Hopefully, it’s all gonna pay back one day, but right

Erwin  

now. Yeah, it’s expensive. And this is after four years of undergraduate

Arminda  

after four years. Yes. So she went to McMaster University for four years, she got an honours in biochemistry. And that cost about $45,000 for the four years, minus the living expenses that we were lucky enough, we’ll probably talk about a little later of owning a property. So there was no fee in terms of rental. But yeah, that was about $45,000.

Erwin  

Just tuition alone, just tuition alone. Computers and books.

Arminda  

Computers on top, give or take because we did get a new laptop when she started university. It’s pretty expensive.

Erwin  

Okay, so 50k a year for dentistry school plus other stuff. Yeah. Six to 7k for the ocular. Where but yeah, wow. Yeah. I thought there’d be some deflation there. But obviously not no, no. And then she’s lives for free.

Arminda  

And, of course, and then obviously, so we had to make the the decision. Does she commute from Toronto, or from Mississauga where we live to Toronto, or the she rent? Now dental school is not like an undergrad. So they’re in school from eight in the morning until five? Oh, yes. So the commute would have been a little bit a little bit nerve racking for her an hour each way each way. Right. And now let’s put in if there’s an accident, if you know the wintertime right road conditions, so we thought that just for her own mental health as well. It would be better to rent so she hooked up with the partner with a dental school friend. And they rented a condo in Toronto.

Erwin  

Remember, we discussed this we did. One was it?

Arminda  

This was 2020. Oh, yeah. You can’t near the bottom? Yeah, no, yeah, I actually contacted you because I thought, should we invest in Toronto. But the prices are crazy, as we all know. So we made the decision to rent. So she got into this lease with her friend. And of course COVID hit right. And well, it had hit in March of 2020. And this is now July of 2020. And everybody was still very unsure of what protocol dental school was going to take in terms would it be hybrid would it be in person online, and it was just very fluid. It kept changing. And we actually ended up paying for a year and she barely even lived in Toronto. Oh nuts. Yeah, because a lot of it was online. She would go twice a week for an in clinic lot of assignments. But she was mainly living in Toronto. So we were paying so her and her roommate have found a really nice apartment place on shooter and Jarvis more or less. It was really nice. It is really nice. They were actually the first ones to move into this this place on the sixth floor brand new brand new two bedroom. Two baths, which was very important considering they’re both dental students have the same schedule getting up at the same time of the day. So yeah, it was perfect. Until like I said, COVID hid in here. They were paying and they had to have internet so we’re paying internet, you know, hydro, at least the minimum payments for hydro because obviously they weren’t living there. So it wasn’t a lot of usage. But for that year, yeah, it basically were living at home Right. And then how much did it cost for so that when they first signed the lease was 2450. It includes the parking space.

Erwin  

Oh my God, that’s

Arminda  

yes, it is a very good deal. And you know what? So we agreed because Alexi does have a car that we would be paying a little bit more because she has a car with a parking spot. And then her roommate was had a budget of $1,100. So my daughter now we concluded that it was worth Alexa paying a little bit more because Alexa actually has the bigger room with the ensuite bathroom,

Erwin  

and probably gonna feel like they have time, but I knew you were getting a deal.

Arminda  

Yeah, I know. You seem very positive when I spoke with you. And I was like, Okay, I told Alexia we got assigned, because I’m getting good vibes from Erwin. So I think we’re on the right track.

Erwin  

Yeah, no. You’re like $1,000 in our market. Based on today’s market, today, to to bed, two bath with parking, you probably won’t be paying more than $1,000 more than the than what you paid.

Arminda  

And it’s a brand new apartment. They have a beautiful pool, they have gym, and you know what, it’s 24 hour security concert building as well. Very, very safe, which obviously, you know, dealing with my daughter for the first time. I mean, she had lived in Hamilton, but I kind of felt like it was a very safe space when she was living in Hamilton. So now here she is, for the first time, you know, raise suburban, right, going to the big city. So at her condo, it’s so secure that they have fobs. And you actually cannot go between floors. Yeah. So she currently got a dog as well. She must have, you know, the dogs that we have at home. So a year ago, she got a dog, and she has a dog sitter for her dog, nya. And actually, she’s very lucky because her dog sitter, once again due to COVID, her work change and now she works from home. And she lives on the second floor. So this is all to say that whenever Sonny takes care of Nya, she actually has to use a Lexus fob to go to Lexus floor and go pick up nya. So you cannot between floors at all.

Erwin  

Amazing. Yeah. So the reason I have you on the show is Yeah, I mean, I’ll tell you why. No, you didn’t. Okay. It was over Thanksgiving. I was talking about my clients. One of my clients is a teacher. So teachers have a pension sports, usually around, like market value for the pension is close to $2 million. And then she has a nother enormous for real estate portfolio, I think like six properties, right? So she made around $2 million, right, just with her investments. And I said to her, what was harder earning teacher’s pension or earning your real estate $2 million in net worth. Right. It was a good 10 years for the two mil as a side hustle while she was a full time teacher. Yeah. Right. And then also, she takes care of the family. Like beyond being a breadwinner, right. Also, like all the net worth for the family is from her. So she’s able to take care of extended family as well. Like all the times and stuff like that, like five 6000 a month. Right. And I said to her, I hope your family spoils you. Because you are the household hero. Yes, yes. All right. I’ve met a lot of people, and not many people can do what you do. And what I find with real estate investors, the ones who aren’t bragging on social media, is it generally incredibly humble. Very private to. And so when I thought about Wow, household heroes,

Arminda  

I thought about you and Frank. Oh, what an honour. Right.

Erwin  

But you tell me who drove the decision to start investing in real estate? Well,

Arminda  

to be honest with you, I have to think Carol Dias, our good friend, Carol Diaz. Yeah. Honestly, this, you know, we always had this vision of having more than just our own primary residence and, and not talking about financial freedom of one day, not only being able to help the kids, if we could, but even for ourselves. We have this the stream of, you know, Frank retiring, and we were going to have our primary residence, possibly either rent or buy a property in Florida. We love Miami. And we also have property in Portugal. So our plan was to couple of months here in Canada one day, couple months in Portugal, and the winter in Miami. So Kara once invited us to her cottage or beautiful cottage. And she said, Well, you know, now that Alexa is going to make mess. You should seriously think about investing in the house, the house there, right? She’s she had done the same thing for her son, Zack. And she said, it’s pretty amazing. And obviously I was like, but how do you go about it? I still have a mortgage and she said, You know what? I’m going to take you to one of my meetings and and she wanted me to meet you specifically, Mr. Hamilton. And she’s like, You know what, and I’m here and I’ll guide you through it. So that’s exactly what happened. And yeah, she was actually my motivator. I think her all the time. I still get together with her often. And I would say Kara fills in for you. She’s very Be humble person. And she’s always willing to share all the information. She actually shared with me how to write a proper receipt. I remember she’d be like, Okay, here’s my a copy of mine. I’m going to share with you. This is exactly if you ever get audited. This is what the government dinos looking for. So it’s very important to have that that network of friends who are amazing, right, Margaret was another person. Tired. She I know. I know. Right. I think she’s off to Paris right now. So I Yeah, so she helped quite a bit to I remember when we had to go through the building inspector and drawings of how we wanted the basement to look. And it was like, Oh, my goodness. And she helped me out with that as well. So was the network. Yeah, it takes it takes a village, it takes a village. It really does. And then you made it really easy to or when I remember asking you, and you probably don’t want to risk I we were at one of the first properties. And I said, Are you not afraid of having all these mortgages? And they said, No. As long as there are tenants, you’re okay.

Erwin  

Yeah. So someone else is paying for

Arminda  

right? And just the way you said it, and I remember you’re sitting at one of the sofas on one of the sofas, and it was like he made it sound really easy. I think we got it. The key is as long as we have tenants, okay, we got this.

Erwin  

Right. Yeah. Well, your daughter is moving in.

Arminda  

She was moving in. Yes. Yes. She was moving in there pay rent or you buy a house. 100% 100%. Right. And it was amazing, because she moved in, and probably jumping a little bit ahead. But you know, that house ended up having seven rooms. So for the years that she was there for three years. Yeah, it was getting rent from six rooms, which was absolutely amazing. And she was there for free. And, you know, kept an eye on on the place as well. As she enjoyed the process. She really did. She really really loved it so much so that she actually was encouraging her brother who else was now adventurism school. He’s at George Brown, in Toronto Waterfront Campus, and she actually wanted him to go away, because he also got accepted to a programme at Georgetown college. But due to our circumstances for Leandro, it just it different times, as you know, we went through lots of different times, and he made the decision to stay closer to home. It’s worked out certain colleges far, isn’t it? It’s, it’s an earlier, as far as far as I know, that’s for Carol has her beautiful cottage and she said, Well, if you need a place, you know how to reach right.

Erwin  

And you can it’s not easy to buy a house in a typical church.

Arminda  

Well, he’s got the Waterfront Campus in Toronto. Yeah.

Erwin  

So it’s crazy expensive.

Arminda  

They’re crazy expensive, right? Luckily, because Alexia is at the Faculty of dental school, at U of T, he walks 20 minutes. So on the days that he has clinic, he stays with Lexia. And he walks to school, and then that’s where her car comes into, into place. And he drives home because he’s got his licence. So he’s, he’s also my little Uber driver. Now, he drives me around everywhere, but all worked out, worked out really well, at least for now. We’re going to take it year by year because truth be told, as he gets busier with clinic isn’t really feasible that he’s sharing, you know, a room with a sister, we’re not really sure, you know, so we’re going to take it year by year and just do it that way.

Erwin  

So the decision to invest, where do you think you and Frank were like, even in your interest in doing so?

Arminda  

Percent? Percent? Yeah. 100%. And, yeah, with with Your wisdom that you provided contacts, we got in contact with, I believe, Dion. Berg about Yeah. And he, yeah. And he actually thought that we would be excellent investors. We had a plan, you drew up a plan. And our plan was to acquire five properties. He said it would be attainable within a year. And that was going to be our plan. We started off really well. We got two properties right away, literally within a month of each other. Right? Purchase the first one November of 2015. The second one came December of 2015. And then we stopped a little bit because of the renovations of both of the homes, right. They were family homes. One was actually an estate sale. One was also retired couple who had been living the same house for six years. So we had to convert it. They’re trying to speak right. Yeah, they were Yeah, just, you know, make the rooms more for students. So yeah,

Erwin  

it’s didn’t prepare us now. You know what I mean, right? Yeah. Yeah, I know. What you paid for.

Arminda  

Yes. Oh, no. Present. Yeah. Yeah. So ballcourt went for $366,000. And I know, right, and Oldfield went for 370. So yeah, they were pretty much the same price.

Erwin  

Okay. Do you want to go to work today? Yes, I’d love to. Oh, you don’t know I do.

Arminda  

Oh no. Like, is it close to a million? Possibly, or is that too much?

Erwin  

Maybe maybe like earlier this year? Okay. At the peak? Yeah, yeah. But today, I think conservative would be my beat,

Arminda  

which is amazing. Yeah, absolutely amazing. And you, you’re on our emails so

Erwin  

that we Yes, yes, I

Arminda  

just Yes. I saw that. It’s speaking up again, which is great.

Erwin  

No, I don’t. I think it’s pretty hot. Actually.

Arminda  

Is it really hot? Oh, yeah.

Erwin  

I saw two this morning. That sold, one sold done firm. It was only in the market for six days. Yes. And the other one was, has a conditional offer conditional sale. And it’s only been seven days. Wow. Yeah. So things are moving. That’s really good to know. So when people ask me about the real estate market, like it really depends, yeah. Right. Because here we’re talking about niche market. We’re talking about near McMaster University. Yes. And then I’m in malaria as well. So my experience was pandemic soccer. Yes, I think I got worse than most. Did you have any vacancy during the pandemic,

Arminda  

only for four months. So that wasn’t bad at all. Okay, it wasn’t bad. That’s not bad. Obviously, it was hard to get students and I get it because having my own daughter, having paid rent for a year and really not having used the condo, I totally interested in where they’re coming from. So I remember showing the place and they were interested. However, they didn’t want to move in until September. Right. And this is March. So we agreed halfway, and I said, Okay, possession July 1. So yeah, you know, for those months that it was vacant, although I knew there was a group coming in, but they weren’t interested in signing me first. Right. So yeah, not quite four months, but it Yeah, but it worked out. It worked out.

Erwin  

So again, the price is very, I’m gonna get your stuff probably pretty nice. One really nice house sold for missile for asking 950.

Arminda  

Wow. Yeah, that’s amazing. Full asking. That’s amazing. Yeah.

Erwin  

So again, when people ask the cup, what’s the market? Like? Do really depends. And I think one of the hardest, my opinion, I looked at a lot. So student market is possibly one of the hottest markets.

Arminda  

It’s all about supply and demand, right? supply is low, demand is high. So that’s great to know.

Erwin  

It’s actually funny, because I know that many people got out and even just talking to our clients like Evelyn and it was telling me like she saw her neighbours Yes. Convert to either a regular families, from student to regular family, or they sold during the pandemic, right. So yeah, like you said, supply demand. So there’s way less supply rentals, right. And the demand really hasn’t changed? No. And so it’s kind of like the pendulum has swung the other way,

Arminda  

which is great. Yeah, because the student numbers are still going to be the same. Right? Same. And now that everybody’s back at school, and yeah, it was that insurance as well. Student res no student res. Exactly. And so a lot of parents, like I read it, a lot of the emails are scrambling to oh my goodness, I had parents reach out to me knowing that I have rentals. And unfortunately, it’s hard to turn people away and they’re like, Do you have any friends? And I’m like, You know what? Everybody’s okay. Right now. Everybody’s got

Erwin  

students. Yeah. Yeah, this is the highest ever had people reach out to me, like from all over the city. Right. Right. People, right. Even ask them to hire a realtor to help them find a place like, wow, there’s, I’ve never Yeah, never heard of that. No, I’ve been a realtor since 2010. No one’s ever asked me for rent realtor service to find a student rental. It’s crazy, right? Oh, it’s totally crazy. And just like your experience, like, I’ve never seen so many inquiries about friends of friends looking for a place. Yes. Like they’re great, blah, blah, blah. And then we started seeing rents like skyrocket, right? Right. Yeah, yeah. So in the summer, like Jamil is on my team, like you’ve seen 800 room for vanilla hosts. Wow. Yeah. And then red panda. They rented out medicine University of Guelph. Right, but this is what we’re gonna think we’re gonna see coming. Yeah, apparently was a really nice house. Seven bedroom. Yes. 7500 a month. Wow.

Arminda  

That is yeah, that’s, that’s, that’s excellent for us to know. Yeah. The flip side is being a parent who also pays rent. It’s scary. Oh, it’s terrible. So I always tell even my student rentals, renters that I get both sides. I totally understand both sides. Right. So yeah.

Erwin  

Oh, my site is

Arminda  

no, small amount. Right. So

Erwin  

yeah, it’s the realities of inflation is is terrible. It is. It is. Right. It really is. Including my properties. And also we took a hit. We took a haircut during the pandemic as well. So this is just yeah, the belly, but I’m not gonna ask them. No, yes. Just move on. And we’re advertising for this. That’s what the market decide. Yeah. So it’s actually my opinion that the probably the most optimal investment right now is student rental. Preferably, I guess, some sort of multifamily like a duplex or triplex that’d be perfect. Right. Right. But, you know, nothing’s perfect. Nothing’s perfect, right. So I actually didn’t know that your plan was to buy five properties. It was it was just life happened. Life happened for God’s sake. Okay, I have no idea. Yeah,

Arminda  

we kept it private, I think because we ourselves had to digest the information. So life was going really, really, really good for us. We, like I said, had those two properties, Frank being in the construction industry, obviously, those houses, they do look very nice. We made them look nice. And then we thought, You know what, we needed a little break. So the students moved in, and we’re like, we’re going to take a little break, and 2017 Reach out to Orion again and see what’s out on the market. We took a nice vacation Christmas of 2016. We did a cruise. And then yeah, March of 2017. Right at the beginning, Frank was diagnosed with glioblastoma, which is the deadliest form of brain cancer. And our world just flipped completely, completely.

Erwin  

The reason why, just looking back to the fact that you guys were built buying property, I had no idea. I didn’t know what Frank was sick. Yeah. And then when Frank ideal, I actually was wondering, was this all part of the plan for his legacy?

Arminda  

Not not in terms of long term short term, right. Like I said, you know, we thought Frank was always a very healthy person. He was very proactive about his health. He was the one like, it’s time for us to go to our physicals and all that. But as we learned, glioblastoma is like playing like life played Russian Roulette on us. Honestly, there’s no rhyme or reason. As a doctor explained, he was just very unlucky. I life happens, right? And so yeah, so our plan was to have financial freedom, help with the kids, like I started telling you, you know, travel, we love to travel, we travel a lot. But yeah, I wouldn’t when life happened, it very, very happy that we have those properties, because there was a sense of, okay, you know, what, if I need to make financial changes, I do have those two properties that I could always tap into, you know, I’m happy to say it’s where we are now, almost five years since he’s passed and still have those properties and long term is to keep them, my daughter is going to have a really big debt. Once she’s she’s done with school. We don’t know what kind of help she hopes to open up from practice, obviously. So right now, I don’t know what those properties what the end goal will be. Will it be to help them? We will see, that’s pretty

Erwin  

cool, though. It is way better debit to selling one house,

Arminda  

one house, just with one house, right? Yeah, that’s pretty attractive. Is it really honestly, and I try to preach this too. I know, things are different. Now. I got into the market at the right time. I know it might be a little more complicated now with the prices. But I’m just so blessed that the universe at that time worked in our favour. It really did. Because my reality is at 45, I became a widow, my son was 13. So he was in grade eight, when his dad passed away. Alexia was a third year at McMaster. And all of a sudden, I had to be everything, right? And, you know, the interest of landlord and landlord. And, you know, the only role I really recognised within myself was the role of mom, because everything else was taken away. I mean, I remember the first time the students called me, the fridge broke down, and I was like, Oh, my gosh, can’t call Frank and say the fridge broke down. So I had to learn a lot. I had to learn how to not be afraid to sound like he knew what I was doing. Because he would always take care of that stuff. Right? I will take care of the administrative making sure, you know, everybody’s paying rent on time and in getting things ready for tax season. But anything went wrong, frankly, go to the property fix it. Right. And all of a sudden, I had to go into my rolodex, so to speak and and learn how to contact plumbers, electricians, like roofing company. And yeah, I’ve been able to do it. Thank God, I’ve been able to

Erwin  

do it. I tried out a new roofer in case you need one. Yes, you

Arminda  

did. Honestly. I’ve used them twice. Yes, yes. So and that’s what I do. I reach out to people that I know and it’s like, do you know, right? It’s all about networking. Do you know a roofing company? Do you know a plumber? Do you know an electrician? Yeah. And so yeah.

Erwin  

You random. Your landscaper referred you to like I haven’t talked to him in ages. I need some work done.

Arminda  

Robert. Robert has been my eyes don’t share his information with anyone. He’s awesome. Honestly. He’s awesome. And he? Yeah, he does. You know, by the time you factor in driving to Hamilton, great cutting bras and all that it’s not worth it. And honestly, it’s just great because I know he goes every week. And then any extra little things like I need like one of my backyards needed a little bit of decluttering and he said, You know what? I can do that for you. So it’s nice to have people that you can reach out to and help you out.

Erwin  

Ask them work for him. He probably won’t.

Arminda  

Reminded me of the one year the one that gave me his content.

Erwin  

Well, this is the job. Right? Our job is to see people successful. Yeah. And the crazy thing is a lot of people don’t know, because it’s no one’s public about social media is not real. Right? I hear every week about people going bankrupt, right? People who are just way too aggressive, trying to get rich quick. Yeah. excessive debt, expensive debt. And they paid like coaches like 15 $17,000. Yeah. And like, I’m all for coaching. But I’m also all I’m an investor, I’m all that returns, right? Whatever you paid when you invested in investing in yourself, the red one return. Now there’s all these people with massive negative returns and bankruptcies. Right, not just their own bankruptcy, but they also lost their partner’s monies. Right? Right. Terrible. Yes. There’s nothing like, you know, versus what we were teaching is very conservative, very concerned. Yep. All right. That’s a little aggressive in the student rental side. But the your daughter is in the house, you have a community of people, you’re basically your neighbours or your friends. Yes, yes, for sure. For sure.

Arminda  

You know what I’m actually I would be more afraid to be honest with you to be landlord of non student rentals. I think it’s really easy with them. I always say, you know, when I think of like renting out to families, and like I said, you know, you see a lot on social media. That scares me more than having student I always say if you’re good to them, they’re gonna be good to you. And it’s a two way street. Right. And I’ve been very lucky. I mean, obviously, after my daughter loft, I’ve had a few other groups. I have one house that actually, Oldfield is very blessed house because they find tenants for me. So I don’t even have to at least be yourself. Yeah. Because that house is actually it’s my master students, PhD students. So I just they find them each other. And it’s like, oh, I have a friend blah, blah. Okay, fine. So I haven’t advertised or field since I bought it actually didn’t even have to advertise it to me, because all field was a group that was living across the street, walked across, and they said, Oh, are you going to be renting this house? Is it Yep. And they’re like, we’re living across the street. But we like your house better. So.

Erwin  

Yeah. Yeah. Most most and rentals are not nice. Or they’re tired. Or they’re just, for example, anyone can go look, anyone go look for rental ads? Yes. Because we always got this. I don’t know if you’ve ever asked. But we got this consistently from our clients, like, Hey, I went up to GG, one on the university’s website, and the rents are much lower than the word you’re telling me. And like, Why do you think they’re not rented? Exactly. Why do you think it’s cheap? Because nobody wants it? Yeah, exactly. Exactly. Versus we always priced higher. And we were never vacant. Have a good product.

Arminda  

Right? We know what you have. Yeah. So

Erwin  

I don’t know if we need to get fairly. We don’t need to get product to have to get 800 room.

Arminda  

Once again, right. Supply Demand has made people things change a bit. Yeah.

Erwin  

And that’s the nice thing about stream rentals right now is pretty much every landlord out there who’s been around for a while we have legacy rents. 356 10 year old. Yep. leases, right. So that way under market versus students will turn themselves over naturally as they graduate and move on. Yeah, right. Exactly.

Arminda  

So every two, three years, usually that’s that’s how long they stay. Then you can oppose rents. Not a problem. It’s like it starts all over again. Clean Slate.

Erwin  

Wonder if I can get 7000 for our house. Oh, my

Arminda  

goodness. Oh, my gosh, well, at this rate?

Erwin  

Well, I’ll need to talk. Make sure we got we’re on the same boat, for sure. Booking the same page in December. I hope I tend to leave.

Arminda  

I think mines are going to be staying until the end. I think they have a good deal with me. So I don’t see them

Erwin  

leaving. There’s a reason for that. Yeah, but they will leave.

Arminda  

Right? Eventually they will. They will.

Erwin  

All right. Versus I have tenants that I don’t think will ever leave. But like my regular tenants are like families, right? And that’s what I’m saying. Or even individuals, right, right, are like in their 30s or whatever. I don’t know if they’ll ever let

Arminda  

you and especially the way the market is there. Yeah. Even though it’s cheap now. I know. But who has money for down payments? That’s a problem, especially first time buyers, right?

Erwin  

So I don’t have ever told you. When you told me about Frank’s passing? Yeah. I’m a very, I don’t know how to say it. The first thing that came on my mouth was thank God they have real estate. Yeah, for sure. Thank God, you have those two properties? Because even at that time, you probably made at least 100 grand and each of them. Right. So you had immediate capital as available to you pretty quickly. Yes. Did you want to divest them, but you didn’t just stick with the plan to hold on to them? I stayed with the plan. Even thinking about selling them?

Arminda  

No, no, no, really. Luckily, we also had life insurances, so I knew if anything first I’m going to use those funds, and just let those properties keep growing. So yeah, I never and you actually you didn’t message me that he texted me and he said I’m really sorry, but I’m so happy that you have those properties. And so am I and so I realised that I was scared. I wasn’t sure what my future What’s gonna look like? But yeah, I never thought to be honest with you, I thought of investing even more I thought, okay, so I got this life insurance money, what should I do with it? Should I invest in real estate? And I almost reached out to you start looking again, what stopped me was because now I didn’t have Frank to do the construction. And I know that’s where we saved a lot of money. Right? He knew how to build stuff. And I was like, What am I getting myself into? I’m still no looking back. I think it was a mistake on my part to not have invested

Erwin  

these little accounts. I was right. I know, the pandemic renovation costs are a lot less.

Arminda  

And yeah, and now I know that I’ve had people that I could have reached out to. But all of a sudden, like I said, around, the only way that I recognised myself was I just killed myself as a mom. And slowly I had to adapt myself into all these different roles, right. And I thought, you know, what, I’m going to continue the legacy, you know, the legacy was at least five properties, right. But yeah, so we hope to continue that, once. Now. The kids fully will become my partners, as I get older. So you know, the big is still there, right? The hunger is still there. We’ll see what markets will will make sense to us as well. But yeah, I never thought about selling to be honest with you. I knew how much it was a dream of his to have, you know, we have, like I said, our principal property and then have a property for each one of the kids, you know, if we could help them that way. So it was like that was going to be and it still will be the last thing that I do to sell those properties

Erwin  

may ask how much you rent them for right now. So right

Arminda  

now, as some of them leave, I’m starting to slowly increase right. So like I told you my Oldfield health, someone that’s PhD masters students, they help bring students in. So I started that place with $530 a room, I still have one person that’s still original, believe it or not, really, because masters PhD was seven years ago. Yeah. So he’s still their career student. Yeah. Yeah. And then I slowly raised to 560. And now the new ones that have brought in I’m $600 a room.

Erwin  

Okay, so So below,

Arminda  

it is below.

Erwin  

So fantastic. It’s still dreaded right cigar when you started? Can you imagine getting 600 a room,

Arminda  

so I was already thinking asking 500 was like a lot. And so and ballcourt they’re getting a really good deal. $550. But this was during a pandemic, and I was really afraid. I thought, You know what, I’m gonna go a little bit lower guarantee your group, then ask the

Erwin  

600 they will see, yes, this happens.

Arminda  

They’re happy because they keep bringing so a three of them have for the year they have the coop, and they want to Hang Hang on to the room. So they rented to somebody else’s. They they sublet right to somebody else, so that they can come back because they know they have a good deal. And that’s including everything, right? I pay for all the bills, internet and all. So they have a really good deal.

Erwin  

That’s a really good deal. So for one, we’re releasing our properties, we actually, we usually have an idea who the captain of the house is yes. And it’s usually then that we reach out to, to to lease out our home for us, we actually usually ask we offer in the money couple $100. And then we also offer money to each of the students to compensate them for their for the disturbance, right. So basically, we let them we write the Facebook ad for them, and write them what what to put and then they go and post it on Facebook, in the students off campus housing group, right, like, Hey, I got a great place. If my family look at it, come DM me, right. And then they become our leasing agents. And it’s a fraction of the cost of hiring a leasing agent. I never sent Yeah. And then also they provide they endorse what we do, because we do good work. Yes, we’re responsive, our properties are tight. And then also we have the buy in from the whole group to you know, leave the doors available and clean. Yes. Right for showings. And again, this has worked has worked really well for us versus paying like a month’s rent or something for our leasing agent.

Arminda  

100%. So I kind of did the same thing. So I call them my PR. Like I said there is a solution. Yes, yes. So usually, I always said, You’re the first one that reached out to me when you were looking for a place where you become a PR of the group. So anything that I need, I usually reach out to the PR of the group. And I do the same thing. Like I’m I’m very blessed as well. But like I said at the beginning, if you’re good to them, they’re going to be good to us, right? So I to be honest with you, I have never really had to go and show the property because they themselves do that for me, similar to what you’re saying. So I’ll put the ad and I’ll say You know what, I have a group that’s interested Are you guys okay with showing Come the place. And they say, Yeah, not a problem. So then bring them box of doughnuts as a thank you. Gift Card or something. Yeah. And it works out.

Erwin  

I imagine masters and PhD students are pretty serious. Yes. And around.

Arminda  

No, no, they’re not very, very responsible students. I’ve never had any issues. And then your other group, do you know what programmes or any other group? So it’s a new group. And I believe they’re all in engineering programmes.

Erwin  

So typically, you don’t have much time to goof around either. Yeah, they have so many labs do they

Arminda  

do? They’re very busy. And usually the engineering programme is a five year programme. So that means usually they’re there for four years.

Erwin  

Got it? In St. Catharines. I’ve had a lot of luck with teachers, college students. Yes. That because it’s really competitive programme

Arminda  

to get into because it’s a concurrent universe. Yeah, right. Yeah.

Erwin  

It’s broken current. So my point is, this seems the heart of the programme, often the better the tenant is, for sure, like engineers difficult to get into a scene course load. And labs. Yeah, there’s no time to goof off,

Arminda  

you know, and actually, what I find interesting, they usually asked me, how quiet is the area? Right, right. And I always tell them, it’s a very quiet area, because you’re you’re out of the fray. Right. And closer to 14 knows on that side, which is perfect. Honestly, the bus Yeah. All in they have hot food. Yeah, I have to cook. Yeah, they don’t have to cook. And I always tell them actually, the way the bus erode is it’s perfect. You’ll always get it’s guaranteed you’ll get to the university as to where the closer they get sometimes sight Emerson in those areas, the buses are full. And guess what? They don’t get it. Right. So

Erwin  

yeah, yeah. And that’s something that was something that was we were it wasn’t with our strategy was to just stay out of the extremely hot area. Yes. Even though the demand was massive for like, you know, within 500 metres of the school. Yep. Often the properties were rough. Yes. Often, that’s where the most of the garbage was. Yeah, like garbage blowing around and people urinate on lawns. Versus your properties are about 15 minutes, but about 15 minutes. Yeah, yeah. That’s kind of been a pretty consistent baseline for any property that we do. Yes. For any university. 50 minutes. Walk or bus? Yes. All right. That’s it’s worked out really? Well,

Arminda  

it has, because that was my concern, to be honest with you, or even the first time when we, you know, I looked at Klein, which was like, location was perfect. But the house would have needed a lot more work. And what we the vision was different, right? It was probably

Erwin  

twice the age twice. Ch right. But 1920s versus 1960s. It’s very different. Very different.

Arminda  

Very different house. Right. And so yeah, so but I was concerned and usually their that is their number one question how far though, like, how long will it take me? And I always say no, no. Right. I know. But I always use my daughter as an example of her loving the a little bit of if you want to call it a little Kimmy. It’s not me. It’s just Yeah, it’s a little frustrating. Yes. Yeah. It’s perfect. Actually, a lot of students just love walking. They’re like, You know what, after Dave, being in school, it’s great to just walk home. So yeah, I wanted to walk in. It’s about 25 minutes if you Yeah, keep up the pace all the young people there. People, right. Yeah. So instead of going to the gym, walk home.

Erwin  

I’m not even sure back then, like 14 was had all the hot food.

Arminda  

They did, but they did. And you know why now because when we were doing the renovations, that’s where I would always go buy food. So yeah,

Erwin  

like literally you have no reason to cook breakfast or dinner. Nothing is

Arminda  

possibly get I think 10% off on Tuesdays students as well. At 14. Yeah. Board. Yeah, no. So

Erwin  

sorry for the listeners benefit other than being close to school. It’s incredibly important to be close to grocery stores. Yes. Right. Yes. Maybe less. So now with UberEATS and all that. Yeah. But it’s definitely it’s that’s a big deal. It is. Yeah. And close to transit, for sure. For sure. Which is all those all those partners made that right? Yes. Yeah, I did. I did. And also, of course, sorry, I apologise. Some people do listen to these things. We renovate to with as much life safety as we as we can. Yes. And we do our leases as one. Yes, it’s still doing that. Yes, still doing that. So we operate everything that keep the fire department and local bylaw officers happy 100% 100% Sure. Experience has been a good one.

Arminda  

It’s been awesome. It’s been awesome. And you know, I always say to them, my daughter lived in one of those houses. And the reason why we also purchased was because we knew once again through Carol, the garbage that is out there and the thought of you know, we’ve always protected our kids, right. They’re suburban, they live in homes. I mean, I grew up sharing bathrooms, right? Our kids have no concept of that. So going from homes that have everything in anything and then moving into one of these houses that you know, I mean, she had a friend that actually had mushrooms growing between the baseboards, believe it or not was in the basement. Right closer to that. Yes, it is bold.

Erwin  

closer and advanced stage a mould inside the house.

Arminda  

That’s scary. That’s terrible. Yeah. So can you imagine what’s actually going behind the walls? If you’re already starting to see that?

Coming to where that is?

Arminda  

I actually thought pictures because I couldn’t believe it myself. And it was crazy. Yeah. So I knew that we had to have standards, right. So I’m one of those people, whatever I want for my kids I going to want for other people’s kids too. So yeah, and that was the other thing too. Basement rooms, right. People are like, Oh, how many basements rooms do you have? And one house has no basement rooms. And the other one house for me like, well, I’m like, Come and check out the place. My daughter actually prefer to basement room versus an upstairs room. And here are the reasons one of the main reasons was she liked more of her privacy when you’re upstairs. It’s also the common area. So can be a little bit noisier. Yeah. So I’ve had no problems once they walk in, they’re like, Okay, yeah, we like these basement rooms.

Erwin  

I find out that boys prefer the basement because it’s cooler.

Arminda  

Yeah. I’ve had actually I’ve had groups of girls groups of mixed boys and girls, and now it’s a group of guys and no complaints whatsoever.

Erwin  

And the guys or the engineering students are Yeah. What do you think pay for frankly, think about all this.

Arminda  

I think it’d be pretty proud. Honestly, I think so. I always, you know, it’s a question that I always every decision that I’ve made since he passed, I always think, what do you have agreed with this decision? Is he okay with, you know, the things that I’m doing? But one thing for sure. I know, he wants me to hold on to these houses, not only for so that I can have some financial freedom one day, but definitely to help other kids because that was the end goal, to be honest with you was to help out our kids.

Erwin  

Okay, in that situation, do you think they’d be without these houses while they’re still in them, but I’m gonna be an option to wipe it out.

Arminda  

Like we just said, if if we decide, you know, what, Alexia, you have this big debt, she will have a big debt, and she’ll have when she’s on these for years. proximally a debt of $300,000. That’s just the reality. And then she hopes to open up her own private mortgage, mortgage writer, and it’s insane. It really is. I wish I could have helped her but obviously, with our situation now, and, and with Frank not being here, even a friend Frank was here, to be honest with you. We’ve got to be real, like it’s $50,000. That’s a lot of money. Plus my son who’s now also on denturism. School, and his tuition is $23,000 a year. So just tuition alone,

Erwin  

maybe there’s less things on YouTube. I know really enjoy school anymore. We can did you even try to save you? 23 grand a year, right?

Arminda  

Yeah, so the material, the materials are just as expensive.

Erwin  

Yeah, just go on. AliExpress. Right. For months,

Arminda  

you know what they actually do a breakdown of how much you know, the courses, just for materials. It’s over. $6,000 right. And I know with Alexis tuition to a big part of it is all because of the materials that we use.

Erwin  

So please just keep holding on to them. Yeah, that is the plan. All right. You guys gonna suck up the debt then.

Arminda  

They realise how fortunate they are. They really do.

Erwin  

Yeah, cuz the motivation for me to buy my house for my kids was I didn’t want to pay for the university. I wanted someone else to pay for. That’s what the investment properties were for, as budging for like a 70k tuition for your tuition. How many years is Landrieu have

Arminda  

three his his preps three years. And then that’s it, you’re done. And then he’s shaped be done. But Alexios route was completely different, right? So we did. She did her four year undergrad at McMaster. So that was her biochemistry degree. And that was like I said about $45,000. And now we’re looking at 300,000, another four years. Now, if she decides to specialise. We’re looking at even more, so she may not be done. So

Erwin  

here’s the other thing about why I bought the property says she’s one of my clients. His name is Rob Don’t say his last name. He made the point to me. He’s sharing me with his own experience with him. His daughter is also He also bought a house for his daughter. I bought a couple for them. First Daughter and McMaster University. Anyways, his point was he shared with me a conversation with his daughter. She was interested in potentially going to medical school, but then she thought I can’t afford it. Maybe I should work a couple years. And his point was, I think there’s too much risk that she won’t go back to school, just because it’s hard to go back. Right when to take a break. It’s hard to go back. His point was like, I don’t want her to make this decision of going to med school or not over money. Right. That’s right.

Arminda  

You know what it looks it took a year off. So I think it also depends on how motivated you are. Getting into dental school is extremely hard. I don’t know if you know a little bit about the process, but we only have two dental schools here in Ontario. We have EFT and Western, is it

Erwin  

it’s very competitive. In Canada. There’s not many periods

Arminda  

no not not many. There’s one in BC, and Dalhousie in the East Coast, we’re number four. And that’s all we have. So when you think of how many students apply, it’s a very, very competitive school. There are a lot more options for med school. But when it comes to dental school, and so she took six months to study for this big exam, which was a six hour exam, so called the debt, right, there’s the MCAT, which is for medical school, the debt for dental school. And then a series of other basically tests she had to do she had, it was really, really hard process. So she graduated in 2019. And so she took those that year, well lit six months after graduation, so from June and she wrote her debt exam in November. So you write the exam, and then you have to wait until February to know if you have been accepted for even for interview. So then she got an interview process at U of T. And then only after the interview that she got, yes, you’ve been accepted. And over 2000 apply only under 100. I think her programme has 98 per year. So it’s very competitive. And yeah, obviously, you have to have excellent grades and your perfection and your perfection. Oh yeah, your your GPA has to be a four. But they don’t longer just look at your GPA, you have literally ethnic tests that they do. They want to know where your ethics are, believe it or not yet, like where your ethics are. And then the final is imagine you’re putting in groups. So you go into different into different rooms, I should say. And they’re given questions by a professor. And it’s all based on their personality as well. So it’s a very, very long process to get into dental school. So she for her it worked out, she was going to attempt to write while she was in fourth year, but she was doing a thesis and that alone was was quite a bit. So and you know, obviously with dealing with her dad’s passing, it’s interesting, because once somebody that say that to her, Oh, you’re going to take a break, you’re never gonna go back. And I think that actually even fueled her more to say, You know what, don’t assume anything. We’re all individuals. We’re all different people. We want different things. So for her workout,

Erwin  

do you feel reassured to have a knowing that you have investments that she can go on?

Arminda  

Oh, 100% or a specialist? Yes. 100% 100%. But we’ve always Frank and I have always done investing in, in our kids futures in different ways. So real estate has just been one, but we actually invested in CST Canadian scholarship trust fund from the day they were born. I mean, what that is, okay, so that’s the private version of our ESPs. Okay. Okay. So that worked really well. That was once somebody to who said to me, your daughter’s to have you thought of an Educational Fund for her? And I was like, No, I’ve just heard of our ESPs. And, and so he said, Well, there’s a company called Canadian scholarship trust fund. And, and these, they’re really great. And you know what, that was the best thing. So yeah, when Alexei was two, we started so we would contribute $200 a month. So when she turned Oh, four, she she turned 18 Because she’s a December, baby. So when she was ready to go to university, she had $30,000 in this account that had been saving. So University costs, nothing to be honest with you, because we have this and then they the grants as well. So with the grants that she also got, every year that she was studying because of this, of this trust fund, we were lucky University costs are nothing. And the same thing now for Leandro, so Leandro because I knew what I was getting myself into. So the earlier you start, the more shares you have. So I started as soon as Leandra was 00 months, and happy to report that I just received $45,000 from this font. So what I did once, there’s a seven year difference between my kits, so when Alexia finished I call the company I said, Well, I’m used to putting in $400, because I was putting in 200 for each one. Can I now do this just for Leandro, they said absolutely. So 400 for you and a full $400 Really, because I was used to it right? It was like the little mortgage payment that we were used to doing. So yeah, so I just got $45,000 principal payment, and he just got a grant of almost shy of $10,000.

Erwin  

Now No, I want to know why I’ve never heard never heard of yeah,

Arminda  

look them up Canadian scholarship trust fund. I only have great things to say we already had. So right now, I’m okay because then that’s why maybe why I hadn’t had I didn’t have to touch or even think about selling the properties because we had we had this we also had critical illness insurance, which was amazing. So as soon as Frank pass was diagnosed, we had a critical illness insurance for $100,000. And we were able to collect that right away. And we also call Like the insurance money that we also had life insurance money. And so that has

Erwin  

helped us tremendously. Because if you had this pretty well planned, we did

Arminda  

or when honestly, we had everything really well planned, except for one thing, we only made, I think one big mistake. So when we basically got a home line equity credit line, we got that from our principal residence that we actually were able to pay off, we bought our principal residence in 1999. By 2012, we were mortgage free. So we were doubling up our mortgage payments, obviously, the property was a lot cheaper than what they are now. But in 1999, we paid $207,000 For our main residence. I know right and at the prime of the market now and I don’t live in a big home, I live in a detached semi detached it, but it’s a wide lots. So you know, it’s it’s comfortable for us. It’s funny, because every time Frank working in construction, obviously it was at every site, you can think of an every time we thought about upgrading to a bigger home. My question to him was, will it change the way we live our life, though? We love to travel, we were very blessed. My kids have seen a lot. We were travelling twice a year. So that was always my question having a bigger house, will that mean a bigger mortgage? And the answer was always yes. So I’d be like, No, I’m happy. And I was privileged because I was a stay at home mom. So for me, it was really, really important. You know, being there for my kids being the first face that they would see in the morning being the one picking them up after school being the first person to hear about how was your day at school? That was just important for me. And for Frank, we agreed. So he was the sole breadwinner of the family. And yeah, so at the peak, the houses were going for $1.2 million right now. But yeah, sorry, I kind of lost my train of thought we’re talking about so many things

Erwin  

that you had to regret. So

Arminda  

sorry. So the regret was when we took out $200,000 to invest in these properties in Hamilton, I remember vividly the bank person saying to us, do you want to get life insurance on it? Right? And I said, No, what’s $200,000? Right? We honestly thought we had a plan, we were going to do what we did before we were going to double pay, right? So we knew that one payment was all towards principle. And yeah, would you already so much money? I don’t know. 200,000? Didn’t seem like a lot to be honest with you. And he’s like, Are you sure? And we’re like, No, we’re gonna pass on that. This was 2015. And he was diagnosed in 2017. So I still have a mortgage now, because that was our only mistake was not having gotten life insurance. Now I personally have life insurance on my mortgage, God forbid something happened to me. At least the kids are okay.

Erwin  

You got insurance for that via the bank or the bank. But I also have

Arminda  

I have private life insurance. Believe it or not, my kids already have life insurance too. And critical illness. And a lot of people like they have life insurance. So yeah, because their principal will sorry, their payment will be the same for the rest of their life. And with inflation and rising costs, they have pretty good insurance, I’m paying for them. But one day, they will take over $150 a month for $350,000. In the critical illness critical illness is 100,000. So it’s 100,000 critical illness 250,000 Life insurance

Erwin  

that costs you 150 a month and 150 a month. Right?

Arminda  

That’s I think it’s pretty good. Think about it one day when they’re in their 50s. And people are paying 1000s of dollars, possibly, they’re still going to be paying 150 And the way the critical illness insurance works. If you don’t use it in 20 years, you get it

Erwin  

all back. Because you know how know how lucky they are? They do they

Arminda  

do? They really do. You know, they honestly, we are three of us were team. They know everything, every decision that we make, actually in the process of selling a property that we own in Portugal right now. So yeah, yeah, that one we are going to sell because we don’t use it. We don’t need it. And so yeah, we were in the process of taking care of that. But every decision that’s made, it’s made between the three of us. What’s the

Erwin  

process like in selling a property located very complicated. So

Arminda  

the way the law in Portugal works when a spouse passes away, so when Frank passed away, not only do I inherit property, they inherit as well, automatically. It’s just to protect yeah, see here, everything even though they’re minors, it doesn’t matter. They get their share automatically. It’s kind of to protect kids. So it complicates things, though, right? override a will if I had a will, right. But we didn’t think about a well. And so we actually were waiting for Leandro to turning teen so we can sell this property, it would have been even more complicated. You can’t sell it because he’s a minor. We could have we could have earned but the thing is, he would need to have like a sponsor. So I couldn’t be a sponsor, because of obviously conflict of interest. Oh, yeah, it’s very complicated. And even now, there’s a big possibility the three of us might actually have To file to Portugal to sign I know the sale the contract because we need power of attorney. Well, in order to have power which need to have somebody with power of attorney, we need to go through the Portuguese consulate and that is a nightmare right now even to try to get an appointment to go there. It’s months on it. So my lawyer said you might have to come here which of the worst not the worst, but right now with Alexa adjustable rate? I don’t know. But you know, right now with Alexa being in dental school, she can’t just like Leandra next week actually has the week off, it says reading week, but not Alexia. So an all three of us have to be present. But it is a very complicated process. It’s not like here at all. No, not at all.

Erwin  

That’s the thing that people need to consider. Like, for example, I see all these people and understand that the path but because I’m so risk averse. I’m not the right person to ask. I see people for like investing in Ontario, and like, oh, I can do whatever I want here. So they only go to New Brunswick. And then they Oh, I can’t do what I want to do here. Then they go to the States, and like, oh, I can’t do what I want to do here. Then they go the Caribbean, right? Yeah. We’re a property laws so different everywhere you go. Yes, it is in like, for example, my friend who has a property in Costa Rica. But you know, here like we have a legal description for our property. Yes. Very, very specific. His legal description is like how many metres away? He is from the main intersection?

Arminda  

Wow. Yeah, that’s that the sanitary every country has very different laws.

Erwin  

Yeah. Like, to me, that’s like, that’s too much. That’s I’m incredibly risk averse. There’s so I’m the person that talks about making money fast. So

Arminda  

this is always said it’s long term. Right? What’s your long term goal?

Erwin  

Yeah. Get Rich, slow. Yeah. I mean, we none of us predictably get these properties or shoot up so quickly. Nobody expected the money, governments to print so much money in their global command dynamic. But yeah, near misses don’t sound that bad. No, but I think the listeners if you are investing, if you have more than I think if you have any sort of complexity in your investments in your assets, I think wills are a thing. For sure. I’m not anyone to talk, though. Cheering I only got ours done like two years ago. So we waited.

Arminda  

Yeah, yeah. Because, you know, even when it comes to wills, and things like that, nobody really wants to talk about it. I didn’t have a will either, to be honest with you. We didn’t have we didn’t have anything until Frank was was diagnosed. And I’ll never forget the surgeon. After he Frank came out of surgery, he said to me, you know, this is fatal, you know, that he’s going to pass away. And like right now I can say these words, see, would actually understand what they mean. But at the time, you know, you always have hope. And he said, Do you have a Will you have power of attorney? Do you have medical direction. And I was like what it was, I suggest you get that done as soon as possible. While he’s still coherent, while he still understands. So imagine my position or when knowing that my husband, literally, the doctor is telling me he’s going to die he has between seven months to 14 months to live. And how do you bring up we need to get a well done. So somehow I did. I don’t even remember exactly how I started the conversation. I think we’re in the hospital. And I think I said something like, You know what, maybe this is a sign from the universe that we need to get our paperwork. And we did, he came out of the hospital. And the next day, we’re at the lawyer’s office getting it all done, because I knew I was literally racing against time. Right. And because the minute he started with radiation, which was like a month after his surgery, he changed and he just was never the same Frank and I think that’s why we kept the so private. Had you seen Frank you know, the person he became with the illness? It was just I didn’t want people to see him that way. So I I was protecting him so even though the image you have a frank as a Frank, you know, being there and so we I just wanted to protect him. I wanted to like I said, the image you had of Frank was Frank, working at the houses and being so happy. Remember, he was me wanting to make sure how the basement was and even that house on Oldfield, we, we got it because we had no conditions on it. And, you know, he just became a very different person. And they took his driver’s licence away from him automatically. Wow. And, yeah. And he had bought a new truck. He had it. He had bought a new truck. You wanted this Ford truck. He bought it January of 2017. And he was diagnosed in March. So he drove it twice. He drove it twice. And yeah, so that’s why we kept it very private. A lot of people didn’t know he was sick. And then his funeral was very private, too. We had there were 20 of us at his funeral. That was a decision my kids made especially Alexia, I remember rehearsing. I don’t want people to come and tell me. You know, your dad was a great man. I knew my dad was a great person. Right? And yeah, so those have been our choices.

Erwin  

Well, I still think you both qualify as household heroes.

Arminda  

Thank you so much. It’s honestly, we’re trying our best, right? We’re trying our best. And like I said, like, I think we did everything. You know, well, we read we prepared ourselves. We thought we were going, like I said, travel when it’s continued travelling a lot. That’s one thing too, we’ve been able to do. I mean, pandemic did what it did. But in 2018, we did go to Portugal 2019, we were very lucky. We went to Italy. We went to Greece. And we did Portugal. So we were gone for a month. So that’s something that was very, very important for the kids to, to explore the world, right? We just went to Punta Cana this summer. So we’re still continuing with a lot of them. And now we have three dogs. So that’s the biggest change that I think that’s the only thing he would not have agreed on with us. He thought dogs are cute. But you know, it just wouldn’t really fit our lifestyle because we love to travel so much. wouldn’t change them for anything right now. They’ve been they’ve been you know, part of our healing process. So but we always say it’s not an end we actually made a little another little investment you we have a little resort style cottage in Muskoka. It’s basically you know, like srixon shores or they’ve turned used to be trailer parks into trailer home parks. So, so we did that and also 2020 because of the pandemic. We’re like, where are we going to go we have the dogs we like to travel. And Alexei came across this resort called Great Blue and lantern Bay, which is in Costa Gravenhurst. And we went to go check out this place, and we fell in love with it. So my best friend and I went on in as partners and we co own this little place and it’s great. It’s like a resort style place. So we have our own private beach pools. We have you some kayaks. So if I ever post say that I’m in Muskoka, that’s where we are. There’s a marina. So whoever has a boat has the marina. And so that’s another thing we’re like, would Frank have agreed with this Muskoka lifestyle? Because he didn’t believe in always going to the same place? And that’s exactly what we’re doing. Keep going to the same place. Right. But yeah,

Erwin  

what would you tell someone who’s who’s on the fence about investing?

Arminda  

Oh, go for it. 100% 100%. I tell my best friends all the time. They never took the plunge. And I tell them, Frank, that was the biggest thing Frank wanted for them was to invest. But they’re like, well, we don’t know what university our daughter is going to she ended up going to McMaster Believe it or not. And I remember saying the same thing Karen pearls like it doesn’t matter. The rule that I’ve learned is you should be within like a certain limit, right like area, and McMaster makes perfect sense. Even if Alexia goes somewhere else in either back to subsidise for her friends like I can help you for her rent somewhere else. Because it actually ended up happening with her daughter, Nicole, who went to Laurier believe Nicole went. So she she said, you know, she’s not going to McMaster. But guess what, I have enough now coming from McMaster that I can use that to help pay her rent. So yeah, so I, I always told my best friends do it. Do it the way we did it, right. And you know what? They haven’t invested. Their house has paid off. And I’m like, What are you guys waiting for? Right now? They’re like, well, the markets different. That’s a great market. No, it is right. So I got to have the conversation with

Erwin  

Americans or Arkansas like almost 30%. It was actually in the paper this morning, they held like Toronto was down this and Hamilton is also down this. They’re only they only have space for like three cities. Like how terrible it is. So prices are down.

Arminda  

What worries them, to be honest with you is, so if I have kind of that type of mortgage, I guess they always say, well, we’ll have we’ll pay a lot more for the properties than what you paid. Yes. Our mortgage will be Yes, exactly. So how do we make the numbers work? So that’s what they always worry about. How do we make the numbers work? Because they know my situation, right? Like, is very profitable for me right now? With 12 rooms, right? I think I’m there’s like a net at the end of month of $1,500 each and both together.

Erwin  

That’s pretty good. That’s

Arminda  

really good. I know, right? It’s a lot of money. And that’s why I also had wanted to invest because I was like, oh, maybe that can actually even help cover another mortgage or you know, or eventually we’ll we’ll get there again.

Erwin  

Ya know, in turn are gonna find all the property within 12 months, are

Arminda  

you Oh, yeah. See that? Maybe that’s what we got to do. Like what

Erwin  

markets different, you know, 10 months ago prices are high interest rates are low. Yeah. Now interest rates are high prices are low. Well, would you rather have?

Arminda  

I know right, the lower price, the lower price, especially if you have tenants who are praying for your Yeah, your mortgage. Right. Yeah. Specifically student rental rentals. I love them.

Erwin  

But the rent though is wet. Well exceeded inflation. Yes. Yes. What else do you want?

Arminda  

It’s it’s a win win situation for us. No pun intended, but it’s a win win.

Erwin  

Ya know, my two cents about that no matters. But I think Frank would be incredibly, incredibly proud of you all.

Arminda  

Thank you so much. For the kids. Thank you.

Erwin  

Great. I remember Leandra would was, I think he was doing the I forget which dance you were teaching me one of the dance that the cool kids are doing? He was 11 at the time was 11. At the time. Yeah. Because we’re in a we’re in a an empty property probably was an estate sale. So it was empty, very tired, looking. Bored. And, yeah, here he is. Now He’s the mayor.

Arminda  

And honestly, I, a lot of people asked me, Are your kids closer to you now that daddy isn’t here? And I’m like, No, we were always like this, where we set a very strong foundation, strong base, we believe in doing things together. Now, they have a different appreciation for their mom, possibly, they see that no matter what we don’t quit, no matter how hard things get. We just we push through it. And we have and I think if anything, that’s the legacy that I hope to leave for them now is no matter how hard life gets, you just push through it, and everything will be okay. The Universal may not always be what you want it to be. Like, obviously, we wish Frank was here. You know, there’s always like, I wonder what life would have been like right now, like, how many more properties would we have had, but that’s going to be left in that other lifetime. And now we could only move forward right and have different dreams and continue.

Erwin  

Just not necessarily are better. Yeah. You know, having the outcomes that you have two kids in school to Happy Healthy Kids. Exactly. It’s it’s more important.

Arminda  

100% Because you know, the odds, when you think of like, all of a sudden, that could have gone the other way, right with the loss of their dad. And especially Andrew went through a lot because Alexi was away she was sheltered by being in school bully, enter was there he was my right arm taking care of daddy. So he he has, he’s, you know, he’s 18 Now, but he’s very mature, because he’s seen a lot. And yeah, like now today he came, he chose me. He’s my Uber drivers I call him.

Erwin  

So there’s different levels of like, financial, whatever. Like there’s financial security, or financial freedom, which is the other end of the scale. There’s financial, bad, dammit, if it wasn’t Tony Robbins book, how would you describe your situation like you’ve never gone back to work, I never

Arminda  

gone to back to work don’t. So we also have a little construction company as well, which my brother manages in the sense of he, so he’s doing what Frank was doing, right. He always my brother always worked for us. So right now, you know, between whatever I, whatever profits I get from the company, I have a salary from the company. And that’s that, and Frank had a pension. I forgot to mention that to you. So he worked for his union was local and 183. So because there was a 13 year difference between Frank and I are 55. He got his pension. Even though he was still working almost like a teacher’s you can still even get your pension. Because of the age difference. He didn’t get his full pension right away, which was a smart thing to do. So I will get his pension for the rest of my life. As long as I’m living. I get his pension so that that’s another source. I know no other source of income.

Erwin  

I gotta imagine French pretty proud of himself.

Arminda  

Yeah, he is honestly, like, like I told you, we did almost everything perfect. Except getting that life insurance. principal residence. But nothing’s perfect, right? Nothing’s

Erwin  

perfect. Those who wait for perfection often don’t do anything. 100%, which is way worse.

Arminda  

Yeah. So a lot of people wonder how does she do it? Well, I got to thank my husband. Obviously, it was a collaboration between both of us, where we’d be like, yeah, maybe we should get this and maybe we should get that and, and we were really prepared. In case things went bad. Not that we ever thought they would. Right. But here we are. Right.

Erwin  

I mean, thank you so much for doing this. All right. Thank you. Oh, and FYI, Margaret, and Carol is still yet to come on the podcast. You’re the first one here.

Arminda  

Really? Oh, no. They have a lot of valuable information. They don’t think so. Oh, they do. They do while they’re both travelling.

Erwin  

Before they were travelling. They were invited.

Arminda  

Yeah, you gotta get them because honestly, I owe like I said, I owe everything to Carol. Especially all her guidance, all her guidance. Even I remember the first lease before we had to use the Ontario leases. She was like, here’s a lease here’s we’re gonna do she sometimes I gave her. Okay, so. So we have to thank you. We have to thank you. Okay, it’s partly part of the job. Yeah. So yeah, but you know what, she made it easy for me. And I was willing to do the same for my best friend. I told her listen, the tools that I was given I will pass them on.

Erwin  

So you better believe I’m gonna give my least to Carol was a lawyer like free lawyer review. You get a free lawyer review to

Arminda  

honestly what having really good friends, right? This is what what? Yeah, even the first meetings that that we went to. She took me as a guest. So that’s how I learned a lot of stuff,

Erwin  

man. Please take the first step. Yeah, we thought we saw the meetings, not as frequently but we still have them. Yeah.

Arminda  

And even all the things that cherry put sell. It’s so valuable. It’s it’s absolutely amazing. So you guys are a wealth of information. We try. No, you really are you don’t try you guys work really hard. work really, really hard.

Erwin  

could work harder.

Arminda  

Oh, I know. I don’t think so. You know what you got to live life to

Erwin  

share what’s going on Portugal? We can talk to her about it. Oh,

Arminda  

and you should? Honestly obviously Portugal is such a hidden gem like people think of Italy and Spain. Portugal looks exactly the same. A lot cheaper,

Erwin  

has grown. America is not nearly as attractive with Exchange

Arminda  

right now. No. No, it’s not. It’s nice to go to Europe. Right. Have you been to that side of the world?

Erwin  

A long time. Yeah. All right, Myrna thanks so much for doing

Arminda  

this Q. Thank you so much. It’s been a pleasure and an honour. Thank you so much.

Erwin  

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