**Transcripts are auto-generated.

 

Erwin  

Hello, welcome back to back to school and back to routine. On top of that welcome to another episode of The Truth about real estate investing show where we’re here on this journey together for the most efficient path to our financial goals. I believe the same for investing that we all have different goals hence no different than like fitness. In my experience with investing and having 500 clients, including 45 self made millionaire investor clients, the speed and efficiency one can arrive at their goal can improve with education. What this downturn in the market is showing me is how sadly, how many made I made good decisions around math cashflow management, renovations, speculative purchases and being over leveraged. It’s really sad out there. Fortunately, that’s not our clients experience them just speaking to other stories I’m hearing about from other groups of the current market will sadly flush out the weaker investors and investments in while in my experience we’re hearing from our clients that they are ready to buy in getting ready to buy in this dip. Just this past weekend at the meeting, I was sharing an MLS listing how this is the first time I can recall in a really long time where the pictures in the listing show a property in the middle of a renovation, for example, the kitchen is no longer there previous kitchens and taken out. So you just see patched drywall, and the bathroom, for example. There’s no toilet, the walls haven’t been painted yet, the tile shower has not been grounded yet. And then doing some for some context. Unfortunately, the seller purchased earlier in the spring, near the peak. And they’re renovating and looks like they ran out of money. So now they’re actually listing the property for a couple 100,000 less than they purchased it for. So these are not my clients. But yeah, like I mentioned, some of the weaker investors will be flushed out in this market. It’s really sad. It’s really sad. For ourselves though we don’t know if our timings gonna be perfect. We have no idea. But from the research from doing a lot of reading, this could be 2008 all over again, I don’t think this will be bad as bad as 2008 Real Estate this can be the best buying opportunity of our generation. Only time will tell I my crystal balls is as good as yours. On a personal note, I’m trying something new with my morning routine. I’m sharing kids, this helps anyone can walk into their office early before anyone else does. While it’s quiet to get my non urgent important work done. For example, I’m recording this podcast, I completed a new book and I’m writing. I’ve been prepping for all these presentations at the give including the one meeting that does pass on September 17, I had to work on a condensed economic update, which will form part of my presentation for the November 12 wealth hacker conference. Then uncovering some really interesting stuff, I think actually caught our government and some lies that are published on their own website. And I’ll be sharing these sorts of things at the wealth hacker conference. For those who don’t know, the conference is a summary of China’s journey as entrepreneurs and investors to the present. When I first started, I used to be all about making tonnes of money. Before I own a couple properties. I actually had a goal of owning having 100 property portfolio but my ambitions have since tempered you know after we got married and had kids parties changed, but we are always looking for efficient means to grow our businesses our investment portfolio and add to our cash flow streams. Hence we have leading experts on all the topics that you the listener interested plus I’m personally interested in well, we have someone who retired from stock investing. He’s a faculty member of soccer academy and Derek Foster. We have a cryptocurrency expert coming on it but also we have Jesse it sir, because he he’s at a point where he’s all about balance, Jesse is worth over 200 million, so he’s very rarely rich. But once you achieve a certain point of wealth and success, focus on it’s a change towards balancing happiness, raising your kids time with their parents, because our parents won’t be here forever. I think we all know that cherries talk will focus more on cash flow management as a subject that’s extremely important in this current market, and will likely save many small businesses and real estate investors from losing their shirts. Now she probably helped some into prosperity as well. But yeah, many small businesses and entrepreneur, real estate investors lost their shirts in the last two and half years. Again, that’s not our clients experience. This is what we’re seeing out there in the community. So that’s the IQ side on the EQ or emotional quotient side. It’s been too long since our community of investors has been together. I literally want to shed tears that sets multifamily conference in May, as I haven’t seen so many of you in for two or more years. Thankfully, I get invited to some of the smaller private in person events, but that’s hardly inclusive, like the smaller events might be 30 people at the most, usually the more like 235 But here’s an invite to the to be more inclusive to our wider community. And based on who’s already bought tickets and our sponsors, pretty much all the who’s who’s gonna be there. If you’re from out of town, please start making your plans for the road trip now. I plan a road trip like connect with others in your community, in your local community. For example, why Friends from Ottawa give me a large, pretty large contingent. We’re all going to somebody’s going to carpool. And you know, just do the journey together, meet up at the Big Apple together.

 

Erwin  

keep that conversation going on real estate and whatever else you’re interested in building wall. Speaking of road trips, I drove our model wide Tesla, two hours north for a golf tournament. This is a buddy’s golf tournament. Thank goodness it was basketball as I was terrible, more terrible than usual, having not swung a club for over two weeks. Joining me on that road trip was good friends who St. droughty, the real estate lawyer and Kevin Hayden of empire mortgages. From my experience in real estate, we’re seeing the best deals I can recall over the last 12 months. But you know, I like lots of data. So Kevin, and Kevin and Hussein being in the same industry as us, they shared their experience. And they’re also seeing great deals. Some even mentioned, they’re seeing prices back from like 2019. There are some sellers who are that motivated, they’re willing to give up the the appreciation from the last three years. Yes, the real estate market could continue to decline, as fear is at a high. And right now we’re not seeing much competition from regular homebuyers. It’s the more ambitious types like investors who are ready to get an earlier again, I think the market will keep continue going down. But again, I could be wrong. No one has a crystal ball. And we of course, in evaluating deals, being more conservative with our cash flow forecasts, or stress, testing higher interest rates, and expecting longer, longer lead times for permits and renovations. On the positive I’m hearing is that with so many big players postponing projects, like big players, like no other condo developers, there will be there’ll be more contractors available for work. Actually, that came out in the last unemployment report. When August is unemployment number came out of 5.4. The largest industry for lost jobs was actually construction. So unfortunate for them. Fortunate for us that we might have more labour available to do our own rentals. How long does that last? I don’t for very long, maybe 12 months, but we will see onto this week’s show. Our guest Andrew Hines, I believe leads little little to no introduction. He graduated from the top one of the top business schools in Canada based on my biassed opinion of also graduating from the same school. And here’s one of the good ones that’s out there. Having shared his losses early on investing in Ohio early on in his investor journey he has since built townhouse complexes. He’s invested in high end student rentals. Currently he’s focused on diversification by developing and building in Florida plus a start up 90 acre high in glamping. campground, of course, I think most of you know Andrew for him also from having one of the top podcasts in the Keene real estate investor space. We of course talk economics, we talked about where the markets going, when and where Andrew thinks there will be opportunities. So have those pens and notepads ready. This is a good one. Please enjoy the show. And your thanks for coming in. Thanks for having me. Let’s get you busy these days.

 

Andrew  

A lot of things my baby boy number one eight months old, almost nine now. So yeah, that’s that’s been a change, we’ll say. And, you know, we’ve got a lot lots happened actually, since the last time I was on here. I think it’s been what a couple years now bring about long. I think it was like, right, like, started 2021. So anyways, yeah, and we headed down to Florida since then, and, you know, got into investing down there and also picked up a campground and that’s had that’s had a lot of, you know, learning experiences included, and been something I think we’ll probably talk a little bit more about today. And we’ll

 

Erwin  

definitely talk about both those things. Just Just so we’re clear that they’re mutually exclusive. But campground is not in Florida,

 

Andrew  

campgrounds. Tober. Mari and then yeah, the Florida is an entirely different endeavour. Yeah,

 

Erwin  

yeah. It’s just those those two items keep coming up in our community. Florida, generally, us investing Florida seems to be by far the most popular destination for us investing and recreational, recreational short term rental is like Yeah,

 

Andrew  

yeah, so I don’t take any credit for the sort of short term rental side of things. With the Florida side of things. I feel like this always happens to me. Anytime I talk about something a lot, a whole bunch of investors end up in the same area. So I used to talk about well, and all the time, and then all of a sudden, well, it exploded. I was you know, early on, I’m like, There’s no way I could have any impact on these things. And I’m not tooting my own horn, but when enough investors because it doesn’t take that many to drive prices up in a market or to create a little bit of a movement towards the market. So I started talking about Cape Coral last year, and now actually have like a little community of people I know, says, you know, other people thought, yeah, we’re gonna get into Florida. Hey, you know, we’re looking at St. Petersburg, we’re looking at Tampa, Sarasota. And oh, Andrew, how do the numbers work where you are? And then I tell them the numbers are like, Okay, we’re coming down there. Yeah. So it’s funny, you know, community is really what it comes to. It’s not it’s not me, per se, but the community like people talk to each other. And the word gets out when there’s things that make sense. Yeah. And I think southwest Florida when we can dive into the numbers or what have you makes a tonne of sense. And a lot of the economics haven’t made a tonne of sense. So I think when you have something like that all it takes is some chatter for and people flocked to it.

 

Erwin  

It’s gonna be we would talk forever on how you got to Florida. We’ll touch on some of the things but yeah, the whole time for sure. X and

 

Andrew  

yeah, high level we can go over all of it. I mean, I think it’s not for the faint of heart, no one’s gonna go invest internationally, you know, if they weren’t compelled for a very sincere reason to do so.

 

Erwin  

Alright, you just said a mouthful person. My intention is I don’t mean to put words in your mouth but how glad Are you that you started a lot of this stuff before you had had your first child?

 

Andrew  

I wish I had done so much more

 

Erwin  

is the funny thing is like for my experience, like for example, the majority of our clients, they don’t come start investing in real estate till their kids are a bit older. Like eight, nine years old, or in high school or after university

 

Andrew  

that’d be easier. Yeah, I mean with with a newborn. I say this to people because I had no idea I thought everyone was being dramatic when they would tell me the horror stories. Tell me the horror stories of having a kid and how Oh, you’ll have no time enjoy your sleep where you can I’m like you’re being dramatic. Could you stop you know, let’s just take it easy. No, like the like the old nice dead. And this is like a new version in Jordan and I say the same thing like the oldest died and now we have you know the current current version, which I mean, love them. He’s so much fun. We just had to accept that like that life doesn’t exist anymore. And now it’s you know, Andrew and Jordan 2.0. And, but we’re we’re changing in a positive way. Like I mean, I Speaking for myself, like just really reaching out to people are really getting help building my team. Like these are things that I could coast by before and not do these things. It became a make or break scenario. Like I had to do it or I was done.

 

Erwin  

So I apologise for the hardcore real estate nerds like myself for listening, which is like dying to get into Florida. chemtron investor Yeah, but remember, we you and I use the golf a lot together. Every almost every week, almost every week. For example, when someone can’t make a tee time like they can’t the last minute the first people aren’t calling are people like yourself the old view? Single you are not single, the people who didn’t have kids. First People I call savvy call people like you, like Charles like Steve for before he had a kid. Yo, we needed me to force like I’m there. That’s the no did you?

 

Andrew  

Yeah. Well, I mean, I think that there’s room for that to come back. But I think as you know, yeah, like having a nanny, like we had a nanny over the summer. She’s left now we’re trying to, you know, sort that out again. And, you know, just everything in between a personal assistant and a nanny. And, you know, building out my team with my businesses like those are all things that can maybe help me get back on the golf course a little more often. So looking forward to that, because my game, sir, sure did suffer this year.

 

Erwin  

Actually, you’re just sharing now with your journey. And now being a father is a wonderful analogy for this life and business in general. You can’t do it by yourself.

 

Andrew  

No, you can fool yourself for a while, which I did. And I did have some help. But it didn’t have the kind of help I needed. And you hit that breaking point. Like, I think we all acknowledged procrastination is sort of the signal like I must be doing something wrong. If I’m procrastinating on this. It’s like your body, your mind is telling you you got to do to adjust here. And I think the next stage is like this point of despair, where it’s just like, what’s the point, I have no hope of catching up on all the stuff I have to do, which I was sort of getting to, even before before we had the baby. So then baby comes along. I’m like, wow, okay, well, things have to change. There’s no no way they could stay the same, which I think was a really positive thing. So I can thank my son for that when he’s a little older and can understand. But yeah, that that helped me, you know, push along. And you know, I hired my full time video editor full time assistant, both of them in March. And I’ve brought on an operations manager for my construction company. I’m now using a general contractor in Florida. These are things I wouldn’t have done before, I would have general contractor than myself, you know, try to try to do everything and then you know, burnout. And you can’t grow that way. And I think even with our campground, which we’ll talk about more like the team building, the amount of people that are in that organisation, the amount of help, and that’s been a learning experience, seeing just what can be outsourced? And how if you set the pieces up, right things can manage themselves, you have to have oversight, but you don’t need to be involved on a day to day.

 

Erwin  

Right. Okay, so I hope people are taking note, did you set a lot of really important points, oversight? And then you didn’t mention it, but I know you’re good at math.

 

Andrew  

Yeah, I like back of the envelope. Simple math, right. Things need to make simple sense.

 

Erwin  

Yeah. And so you’re managing your numbers, which is a great, so while you’re scaling up, so this is a really good segue as we get into real estate while you’re scaling up, you’re still watching everything and I think that’s been something that’s been missed by a lot of investors that we were talking about. Recording is many people missed on their numbers. And I’m talking about like overlap. For sure over leverage buying on the way up paying too much interest. You know, And yeah, it will

 

Andrew  

a lot of people aren’t cognizant of the ability to lose, right? I’ve lost, I lost back in 2012. I think a lot of people, you know, pie in the sky, like, you know, hey, look how good I’m doing. But the market was doing good. It wasn’t necessarily us it would did good. I always took a very clear look back on my projects and said, Well, if the market hadn’t gone up while I was doing that deal, would I still have been happy with that deal? Would I still have made money? And the answer wasn’t always yes. But the market saved me just like I saved a lot of people. And I’ve spent a lot of time pondering these things, I slowed down on my investing come like 2017, because the numbers started making less sense to me around here. And that’s when I started thinking, well, we’ll wait for this market to kind of cool off. But then it was obviously taking too long. So I started looking, okay, well, maybe Florida, maybe there’s other markets I can look at, I didn’t really want to go up to Sudbury and I was kind of battling my own challenges with no time. So was I going to take on distance investing, when I wasn’t really you know, delegating properly. So people, you know, long way of saying, you know, people weren’t really focusing on the fact that the deals didn’t really make as much sense anymore. They were counting on things to go up, they were counting on being able to have breakeven cash flow and low interest rates forever, which was never really that reasonable. So I was, you know, for me, I was thinking, let’s go find markets that haven’t been gone up by like crazy amounts, where the numbers are close to working, and it see what we can do. And that sort of led me to Florida and then also into the Airbnb side of things where, you know, you’ve got stuff that can generate a lot more than a typical rental.

 

Erwin  

Okay. Apologies. Gonna put a bit of a caution on this. I think for newbies, they need to focus on something preferably closer to home.

 

Andrew  

Yeah, for sure. Like me put it this way, like to hire a GC is a huge risk, I think across the board. Most new investors who hire a general contractor are probably going to get burned in some way. Because you don’t know how to ask the right questions. You don’t know how to vet these people in you probably are a little bit optimistic and want to trust when you shouldn’t. You know, I think that that’s something that people do. I did it early on, I wanted to trust the property manager I worked with in Ohio back in 2012. And the guy stole my money, he took my money, a lot of my house to be destroyed, and did it in a way where he act like the victim, like, you know, hey, you know, we’re just doing our thing, like getting things done. I’m like, Yeah, but how about that money? You have? Oh, yeah, I can send that to you. It was one of those. Oh, I’ll send that to you. Yeah, no problem. Call him again. The next week, can you send that to me? He owed me like 1000s and 1000s of dollars. And he said, Yeah, I’ll send it right over, never sent it. And eventually, after like months and months of that, Oh, this guy is actually just screwing me and pretending that he’s going to pay me like keeping things positive, I’d never witnessed that, you know, Service with a smile, we’ll call it or disservice with a smile. So I saw what people are capable of. And I’ve seen it in the contracting world, like, people are capable of some pretty nasty stuff and just sort of place your trust in a general contractor knowing that I would say there’s a good number of them out there that are willing to take all your money and not not do a good job. And that’s totally fine with them. I really started to focus on how do I find people who would have something to lose if they treated me that way. You know, the old way was I’ll do so much business with you, I’ll make them want to treat me well, because they know I’m going to do business with them with them long term. And the newer way was like coming into Florida. This is too new. I don’t know anybody here, I’m not even from here. Like I mean, I’m assuming most contractors, dollar signs light up in their eyes when they see somebody in that situation. Fortunately, I was coming in with some good experience and lessons learned. So I went to the RIA in Fort Myers, Florida. So on Gulf Coast, which is right next to Cape Coral, where I ultimately decided to invest, I wanted to find community, because I think community is so important. So then all of a sudden, I’m speaking with people who have been in this area for 10 years, and everybody talks in the investing world, everybody talks. So if you’ve got people who are doing good business, and that and you know, they’ve been able to do joint ventures for 10 plus years, and nobody’s talking trash about them, they’re still you know, they’re still coming to meetings. Now, all of a sudden, I think I’ve got a much better starting point to start interacting with people because they got something to lose. That’s the big thing. When I go to new markets now I’m looking for do these people have something to lose if they if they do something sideways? new investors don’t think like that, because new investors just want to trust that hey, this GC says they can do this. People talk people, people promise. I would say in the contracting business. 99% of promises are not fulfilled on time anyway, they might be fulfilled, but they’re not fulfilled or not fulfilled on time. We’ll have a forming contractor. Tell us Oh, we’ll be there on Friday. Don’t show up. Oh, okay. Something came up. We’ll be there on Tuesday. They don’t show up. Hope Thursday’s the day. Thursday happens. Oh, well, we’re all off today. Well, hang on. You said you’d be here on Thursday. You’re on vacation. You know that type of thing happens. And without experience. People just don’t know that this has come didn’t budget for didn’t budget for it. So you know, it started with the student rentals for me to GC my own stuff. I only had two to four months to do an entire renovation with an addition. And you know, getting anything done in four months is where the general contractors almost unthinkable. So we would do you know, partial guts, build an addition and close it and have students move in within a four month period. And so getting into that, that’s why I had to GC I wouldn’t have been able to do those projects otherwise. And still to this day, I don’t think I could have done them in the timeframe we did, unless I had my own employees working for me full time doing my own work, and some some subs, but I mean, at that time, I had probably 50% internal workforce. And then 50% sub

 

Erwin  

I know you mentioned before, can you share how many employees you had at that time? Or

 

Andrew  

just like four four or five like so like main carpenter site, super a couple of general labourers, and then another site super on a different site. But yeah, now I, now I’m about to have two in that. And then I have subcontract with my assistant is subcontracted my video editor subcontracted, but they are full time for me. Got it? Yeah. So but you have four or five employees on the tools? Yeah, probably three on the tools. Plus subs. Yeah,

 

Erwin  

got it. And it’s a, I think there’s more interesting to talk about here, just want to end the point with generally people who scale have in house staff, it has staff is so critical. Yeah. To keep the cost under control and schedule on control. It’s

 

Andrew  

tough, though, because like, then you’ll also see people who make a really good relationship with a general contractor and crush a lot of business. But you got to acknowledge that that general contractor is making a lot of money, like they’re building in a profit margin for themselves. And if that works for you, and it works for them great. In a market that’s going up in value constantly, that tends to work better. In this current market, I think we’re gonna see more people shift to this model with, you know, hiring your own staff, keeping them busy, like not Petia is a good example. He’s got his own full time crew that works on all his projects. So he knows, people aren’t going to say, Hey, I will be there tomorrow. No, you’re there today, or you’re not getting paid. So that’s very different in the employee relationship. That’s why things get done fast. Because downtime is huge. Like you’ve got, you know, between one trade and the next people say, hey, I’ll be there on Monday. Well, you say, well, this trade is finishing up Friday. So you’d be here Monday, they say Monday, but then they don’t show up until Wednesday. Now you’ve got two more days that the house was just sitting, if it’s your own employees, and they’re capable. Now all of a sudden, you’re moving a lot faster, less interest payments. However, you know, of course, the issue is you need to have enough business to keep these people busy. And people didn’t

 

Erwin  

understand that. Yeah, like I literally, I think we both literally know people who will take on projects, just to keep their stuff busy. Yeah. Yeah, I think risky. But I think Matt’s

 

Andrew  

actually offering his services out to other people, because I think he kind of scaled down a bit of his operation. So now he’s actually contracting for other people now keep his people busy, right, until, you know, things kind of come back around, which I mean, that’s another discussion we can have when you know when where’s the bottom? Where’s the bottom? If they keep raising interest rates? We’re not going to find that bottom for quite some time. But we’ll see. But anyway, so in the meantime, yeah, you know, he knows he’s got good people. He wants to keep him busy.

 

Erwin  

He’s smart. No, he’s a smart guy. You need to have him back on the mat if you’re listening, but you’re not.

 

Andrew  

He’s absolutely not listening. But you know, somebody can tell somebody will tell him tell him that. Yeah, yeah, definitely. He’s always a great conversation.

 

Erwin  

But again, a smart like, there’s lots of people still need renter contractors, and actually, it’s a part of a bigger story is people who do renovations, they’re still in short supply, even though there’s all these projects, like, for example, talk about Matt. Yeah, he’s pausing his own investing, yeah, to service other people as a contractor. And so my point is, contractors are still busy, even though there’s tonnes of projects being put on hold or not even happening,

 

Andrew  

but a lot of people are mid project. And I think what we’re really gonna see is it’s going to take like a year before you start to see a lot of developers didn’t do a new start, like they had something that was early in the in the stages, and they just decided, hey, you know, we’re ready to go for permits. But let’s just wait. And I think that that’s going to be a very common thing to see in the next couple of years unless these interest rate hikes level off or start to reverse. Because building expense has not gone down directly. Not yet. Anyway, maybe it’s true and labour, material and labour. I mean, maybe, maybe we’ll see once you know, a bunch of people get laid off. Now you’ve got all the sudden more supply relative to your demand. And maybe now we start to see it’s easier to get a contractor. It’s easier to get employees. And I’d be awesome. That’d be kind of cool. Yeah.

 

Erwin  

Like I wouldn’t mind starting to do some flipping through. Well, I

 

Andrew  

mean, we’re getting to a point like this whole market is changing. And now there’s a lot of people who will cry over the Spilt Milk and the money that they’ve they’ve in their head unrealized losses, versus looking at Holy crap, what an opportunity to buy a whole bunch of cheap real estate and cost average and do really well yes, the interest rates are higher, but the prices are going to come down relative and rents are on their way up. So there’s a huge opportunity coming, and one that I don’t think we’ll pretty much ever see again in our lifetime, which I think real estate is going on the other side of all this, the next boom period is going to take real estate out of the reach of the average Canadian completely.

 

Erwin  

I’m glad you say it because when I see it, I don’t believe it.

 

Andrew  

I 100% think that you’re already looking at affordability people can’t afford, you know, even their gas bills anymore. Like we’re going to a renter state and, you know, do you want to be the owner? Or do you want to be a renter, like, you know, build up your rentals. Now, the challenge will be for anybody buying something fundamental that can weather the storm, you know, the interest rates can survive a 10% interest rate. Because it seems like that’s the direction we’re heading. I mean, to undo the damage they’ve done with all this money printing and the fact that they’re still printing it. You know, when will be the right level of interest rate hikes, I didn’t think they would go this far. I didn’t think that they were willing to do something so ruthless when they were so generous before Oh, here it takes her to do all this. We just want to protect you will drop interest rates,

 

Erwin  

we’ll have appraisers that are going to come in because they shouldn’t come in.

 

Andrew  

It just it’s just crazy how they just flipped a switch. And now Now they’re out now we’re going to be responsible. Like there’s literally that quote of Justin Trudeau saying you’ll forgive me if I don’t think about fiscal policy. Like exact quote, you’ll forgive me he last. You’ll forgive me if I don’t think about fiscal policy. We’re going very much the other way now. So who knows where we go, how far down it goes. But I think that the, you know, there’s never a right or wrong time to know there’s probably a wrong time. There’s no right time to buy in this process. I think it has to be fundamentals, you’re going to find even if the market averages, you know, at point A, you could still buy something significantly below average, for a number that makes a lot of sense will cashflow even if rates go up further. That’s I think that’s where people’s heads need to be at

 

Erwin  

the sad thing that was that the best the vestments that our clients are transacting on, take a lot of capital. Like, for example, the opportunity that we’re seeing that we didn’t see we’ve almost never seen is single family to triplex conversion opportunities. That takes a lot of cap, you know, a tonne of capital. So that’s said the best opportunities are for those who have deeper pockets. People who prepare deeper

 

Andrew  

pockets can raise the money, yeah, more experience, for sure. Able to do those projects. But I mean to go in take all that time, especially when it’s so hard to get contractors. Now you’re looking at a project like that a year turnaround, probably in a year. Where’s that value gonna be? I mean, I think we can reasonably assume the rents will be pretty good. But will that work for you know, if you have to leave a few $100,000 in the deal? Is that okay? I think for lots of people it is, especially in our networks. But there’s a lot of people that that eliminates from that game.

 

Erwin  

Thankfully, we’re looking at some for example, where they have they have garages, two car garages that are hooked up hooked up for utilities. So we’re just we’re like, we never saw these opportunities, like six months ago. Yeah. Or like there’d be like 50 offers on? Yeah, I’m exaggerating, it’d be like six to 12 to 18 offers. But again, it takes a deep pocketed investor to be able to do these things, which is kind of sad for me, because I always I’m always pushing for the logo. I just want to see

 

Andrew  

the newbies. Yeah, when people buy the camera. Yeah, I don’t think there is an easy way to start from scratch. I mean, like, I know, a lot of people have listened to the podcast and when things were going up that worked. But now I feel like getting in and working for somebody, like just get into the industry somehow even part time work outside of your full time job. If you can volunteer. Come work for somebody like you and get coffee and just learn

 

Erwin  

for buddy up. Yeah, buddy. split everything. Split the mortgage. Split the work. Yeah, right. I ain’t gonna wind up. I ain’t going to Saskatoon to invest.

 

Andrew  

Yeah, that’s always how I felt. I didn’t want to do the distance. I mean, of course, Florida. I mean, but I kind of want to go there. I want to go down there. So I’m looking for excuses. So that you know that kind of works, but and Tomori to Okay, yeah,

 

Erwin  

you’re saying to me things because we’re going in different directions. Too many notes. Too many to me. opportunities for learning here. Let’s start with Florida. Cuz you mentioned it first. Yeah, it does. I’ve seen your numbers. It’s I can’t believe how cheap land is the start off of there. Why is the land so cheap? It’s not

 

Andrew  

as cheap as it was when I started. Well, yeah, so So may 2020. I started I don’t know, when I started buying, I think was right around the end of May 2021. I started closing on lots and they were like, anywhere from 23,000 up to 31,000. US saw us figures. Now lots are closer to like 45 in the areas that have been looking. And even

 

Erwin  

with everything’s coming down. Oh, yeah. Yeah. foreign markets strong. Yeah, I

 

Andrew  

mean, because North port and Fort Myers are in the top 10, two of the top 10 fastest growing cities in the US. So that area, like although the the interest rate pressures, you know, obviously to bring values down. The in migration is pushing it the other way. So that market hasn’t been hit like Ontario has. So

 

Erwin  

just to add to that, though, the insider information I’m getting a lot of people bring cash,

 

Andrew  

tonnes of cash. Yeah. 50% was with as of the last Remita meeting I went to it was 50% cash investors. I don’t know what it is now. But like over this boom period, 50% cash investors. Well, people serve cash buyers, sorry. And that means something different in the EU in the US in general, because when you say I’m buying cash, you can’t go get a mortgage. Like you can’t actually close with a mortgage whereas here you just don’t put their financing clause in and then you can still you can still add them or if they don’t do that they’re

 

Erwin  

if they have the cash but it’d be interesting context is often I have the financial means.

 

Andrew  

cash offer I have the financial means yes. Yeah, it’s literally cash. Yeah, literally cash. Yeah. So their real estate board was was saying 50% cash. So yeah, that’s big, a lot of money coming in. They’re easy. Yeah. And, and the biggest thing was relative price point, we talked about the lots for cheap. Well, the houses were cheap too, compared to here. Like if you think about what you get, comparatively. And I just looked at that. And I like we love Naples, which is about 50 minutes away. And we spent a lot of time there for last seven, eight years, every every winter, we’re down there. And so you know, I started going to the races just to see what was going on. I saw people flipping and doing things for low margin. And I’m like, I’m just not going to do that at a distance. That’s not, that’s not my skill set. And with my available time, they’re not going to do that. So your risk tolerance. Yeah. And but then I heard a guy that I ended up partnering on a deal with Dave, he was speaking on stage, he’s like, hey, you know, I build new construction. And here are our numbers. And the numbers didn’t look fantastic. But they look decent. And I just looked at what was the completed product? Why can we build for I’m like, I need to get a foot in the door with construction down here. And so I use it as an opportunity. I funded the deal. I actually completely self funded the entire deal at this point. No mortgage so far. And I don’t think we’re going to be it’s it just didn’t work out that way. But it was an opportunity. He introduced me to the builder. I said, Hey, you know what, I’m going to have to do this on my own too. So I am going to be dealing with Sherry, who he introduced me to, and we’re gonna build more together. And I’m treating this as part of a business strategy that I’m building out in Florida. Is that cool with you said yes, that’s cool. We have great relationships, he and I and I still use them as my realtor down there when you know, I’m looking for stuff buying stuff, asking him what I should build, you know, Hey, what should I build Dave? What’s gonna sell well, so he’s, he’s available for all that stuff. And yeah, that’s gone. That’s gone really well. So I kind of lost track of what what direction we were going with this. So feel free to direct me what you want to know,

 

Erwin  

ideas and what you’re investing in. Like? Yeah, it’s square footage cost per square foot. So

 

Andrew  

the first one I’m building which were drywall now pool is dug. We’re gonna be done.

 

Erwin  

You’re renting it out. You’re gonna rent it out.

 

Andrew  

This one I’m gonna sell. Oh, first one. First ones for sale. Yeah, spec. Spec builds spec builds. Yeah. Sorry, just

 

Erwin  

for the listeners benefit spec build is when you build it first. And then you sell it.

 

Andrew  

Yeah, exactly. So I guess I’m technically more of a developer on the deal than the builder. Because I’ve hired a builder, although you could call me the builder because I own a lot. So I hired the GC. And they did all the permitting everything. I spent a lot of time obviously getting to know what their operation and all that. But also Dave helped with that, you know, create a new connection. And yeah, so we’ve got 18 180 square foot, plus a three car garage. It’s four bed, two bath. There’s also an outdoor kitchen, there’s about a 250 square foot area for the outdoor kitchen on the patio. And then there’s a covered lanai. So that’s that’s a covered patio, but then there’s a cover Lanai, which is not covered, it’s the screened in area, with a pool, and all of that, I think my all in cost, including the lot, we’re going to be around 420,000 And that one,

 

Erwin  

so we’ll buy a bachelor condo, GTA for that.

 

Andrew  

So it wouldn’t be that number anymore. But that was based on what I could buy the lot for and what my building costs were when I started. But initially, when this was a concept, we were looking at maybe 499 list price, which wouldn’t have been a huge profit would have been a very small profit, that spec went up to 599. As of like, by the time I broke ground, that was what we were expecting we would list for, and now we’re sort of back down to thinking we’ll list it for you know, 580, something like that, at this point. Now, you know, granted, there’s another two months, but there’s a good good buffer in there based on what I paid for what I’ll be into it for. So I have another one going not too far from that like within a kilometre, or I guess mile we’ll talk miles This is Florida. And that one is downs, even bigger 2150 square foot. I think 2130 Actually, outdoor kitchen This one also has a hot tub and three car garage. I’m trying to stick with three car garage and everything just because I mean envy like I want a three car garage. Let’s all build it until I finally get one. Okay,

 

Erwin  

all kidding aside, it’s an investment you’d like. You think you have your investor cap on.

 

Andrew  

No matter what I mean, triple growth car garage is going to be a selling feature. Right, right.

 

Erwin  

That’s the want people to think that they need to the way they invest is how they would want to live.

 

Andrew  

Oh yeah. No, and I am calculated. I do like to think of things like hey, would I live in that? So I go after a consumer that would think similarly to me in certain ways. But yeah, I’m setting these up for families. The big thing is like the general contractor I’m working with it had set models they were already building and I am working with those models. So the big benefit there is Lee Times weightless. They know what they’re building, they order their trusses early. They order all the materials in that day and the mechanicals they need early. They’re soft costs and the saw in the process for for generating permit packages, it’s all very simple because they’ve done it so many times. So I’m very much okay with that. Of course, some people you know, I want a custom house, that’s super unique. Yeah, that’s not what I’m doing. And that would cost more to do. Yeah, this is kind of working within their parameters. But that works well for me. So I’m going to do my own things that are going to make these really awesome for the ones that I keep Airbnb, like, the second one I was talking about, I’m keeping that I did things that I wouldn’t have done if it was just resale like putting in the hot tub. I don’t think that necessarily I’ll make that back. But maybe it would

 

Erwin  

be hot for vacation rentals. Yeah, certainly

 

Andrew  

means especially like, if you think Florida and like January and February. It’s not it’s not as hot at night and stuff like hot tub would be awesome. Like anytime we go to Florida in the winter, where we want the hot tub. So putting that in was was big, but you know, just certain other things, I’m going to put in a bunch of palm trees in the back to just you know, make it go for Airbnb, and wouldn’t do that if I was just selling it. So there’ll be different things like that, that I do. So the bigger one, that one down will be in for closer to 450. And I think the values cost us 450. Yeah, yeah, the value on that one, probably somewhere around six or over six. So not actually as good of a profit margin if I were to flip it, but for me, I wanted you know, a nice big one that would work really well for Airbnb. And that’ll be kind of the starting point for Airbnb down there. And, and then we’ll go from there. But my plan is, you know, keep one sell one, keep one sell one, I bought 10 lots, and just keep sort of buying. I’m going to build a few more before I buy. Because I mean, maybe those prices come down a bit. And there’s no rush like now they’re plentifully available, whereas before they were a little harder to get. So we’ll, we’ll keep that moving

 

Erwin  

so many questions. Okay, what made this location make sense for you?

 

Andrew  

Well, Gulf coast here at great sunsets, you’re within an hour Well, probably 45 minutes from from my lats to like great beaches like Fort Myers Beach, which is like, you know, world class beach. And I think the Gulf Coast in Florida is just better for

 

Erwin  

Strong’s convention centres.

 

Andrew  

Cape Coral is more of my friend calls it the Simcoe of Florida like oh, it’s a very it’s very much a value play. Like it’s among the it’s like your, you know, bang for your buck, call it and I think from a vacation standpoint, as well is people get to go down warm climate that’s below the where they call it the frost line, you don’t get frost down that far in Florida, typically ever. And so you get all the warmth, you get to be in southwest Florida, at a price that otherwise you can’t really get in southwest Florida, especially being that close to water. Cape Coral is really unique because it’s the Canal City. There’s canals running everywhere. Not every law has a canal and my lats don’t I’m avoiding that. But there’s a lot of people who will have their their boat right out back from their house. And so they can take the saltwater canal through the city and get it out to the Gulf Coast. So it dumps onto a river that runs between Fort Myers and Cape Coral, and then they can go right out into the Gulf

 

Erwin  

a bit of a geek I can’t imagine the infrastructure cost to have it took a while.

 

Andrew  

Another thing that’s great about roads are expensive enough, it is the weird thing about kypros I feel like they thought the city was gonna be so much bigger than it was back when they they originally sort of organised it and put in all these roads and lots because the whole northwest part is like very very scattered like there’s one house on a street and then you’ll have a whole bunch of vacant lots on either side in every new house going in is really nice, you know, nice house more expensive houses. It’s a very very up and coming area. But all throughout Cape Coral, you’ll find just a vacant lot here vacant lot there. Don’t like you’re not like here No, I think for the longest time it was fairly stagnant. People weren’t really building much that’s geared up more in the last few years. And I think as values were coming up it was kind of helping things a bit. But you know, it’s the chance to get into a place where there’s no HOA like there’s no homeowner’s association where you’re when you’re restricted on what you can do we’re going to be a condo board right basically yeah similar to a land condo or like a common element condo where they can tell you how you can use your property and what you know what you can and can’t do so for it’s like an Airbnb or is paradise down there because you can actually Airbnb your property whereas like in Naples say like everything is a gated community of mine it’s like one small pocketed area and in all those gated communities you can’t even rent out your place well not all but some of them you’re not even allowed to rent your place so let alone Airbnb it or long term rental anything like that. It just to

 

Erwin  

clarify for the listeners benefit. These organisations determine how you can operate your property or even how you live Yeah, I like to have like no pets

 

Andrew  

like you can’t have no pets or you can’t have a trailer in your driveway and you You can be put away to be put away. What what colour? Are you going to paint your house? We need to approve it before you do it like things like that. Like they’re trying to dictate everything that you as entrepreneurs love being told what to do. Yeah. So I mean, it’s like the same reason I avoid condos, I would avoid HOAs these condos, it’s like there’s a loud slamming coming from your door, my wife’s condo. She sold it now. But they, the neighbours were all saying that the door kept slamming, we’re like, Well, there’s one small problem. No one’s been in the condo for three weeks. So this couldn’t have been us. But you get into things like that with condos. So

 

Erwin  

but all condos are do that with the negative pressure in the hallways like the doors? Oh, yeah,

 

Andrew  

exactly. It was just silly. It was just silliness. So, you know, just just getting away from all that you’ve already got the municipality telling you what you can and can’t do, let alone you know, let’s not go go there. So I really like it. For those reasons. I think that there’s a huge value play from an Airbnb standpoint. And then if that doesn’t work, I mean, rents are being pushed up. And the price point makes a lot of sense for the actual value of the house. So I’ve got some exits, I can sell them, I can rent them long term. I mean, they’re not going to be cash cows long term with the interest rates. But you know, there’s a play there. There’s there’s several ways to write to sort of quote unquote, exit as needed

 

Erwin  

if needed. It sounds like you’ve taught business before. All this lingo I don’t even know about US News and people.

 

Andrew  

I don’t know. Like, I don’t know how much of it was was, you know, formal education or just experience like going through? Like, I think I’ve always been a bit of a critical thinker. Even as a kid, my mom told me, like, yeah, I just see a sit in there, like just often space thinking. I think I’ve always sort of done that just kind of evaluate things critically ask a lot of questions. And what if What would I do it right. And the negative to that is it’s caused me to be very slow at taking action in recent years.

 

Erwin  

Think of all the condo speculators right now trying to figure out how to get other cars there,

 

Andrew  

which I was our contract. I was purely saying, don’t do that, from the start of the podcasts. I’m like to go speculate on on condos in Toronto. Sure. It seems great. grass is always greener, what happens when that changes, you have no exit. If you have no cash flow, imagine being in a place where you have no cash flow, and it’s worth less than you paid for it. That’s just a lose lose scenario. One you never want to find yourself in. So just I think that these are the discussions with the podcast that people really enjoy hearing, like breaking ideas down and saying why is something inherently just not a great investment relative to another investment? Not to say that somebody with 1000 properties, couldn’t pick up a few pre constructions in Toronto and do really well. It’s just, you know, can you afford to lose? And will you care if you lose? You know, those are two important questions to ask yourself, which I think a lot of people don’t. People don’t ask themselves, they would care. But they don’t ask themselves that question. I just want I want to get into a couple of contests. I see people making money. Yes, that works until it doesn’t work. And some people won in spite of themselves. But it was a risky position. And it is. But for some people that makes sense. And some some it doesn’t. And there’s there’s no hard and fast rule. That’s good. That’s bad. For some, it’s all relative to whoever’s in. Yeah,

 

Erwin  

I don’t want to beat up on condos. But here’s a current example is people with cancelled condo projects, right? Versus I bought a house like I personally like to buy when I can see in touch. You don’t want to buy a concept. Yeah, buy paper. Yeah, I don’t want that’s just me. And then for example, I bought in 2020, versus people who bought bought a condo, and now they can’t close. So sorry, the price is cancelled. So yeah,

 

Andrew  

so pre construction, and those agreements probably gave the builder an out, we could we could choose not to build this. And if we do then then that’s that

 

Erwin  

attending. So one friend has agreement. He’s gonna get paid interest, okay, on percent on his deposit. 6%. But he lost on how much equity appreciation? Yeah, during that time. You know,

 

Andrew  

I mean, he was he was still would have been up if it was Bill. Oh, yeah. Yeah,

 

Erwin  

I told like we did the math, but the builder wanted more money to close. So even with the extra money, they would have made sense. Yeah. But he backed out. And then so like all so with the terms opportunity costs, I made equity gains on my properties. Yeah, he’s what he’s got his money back with 6% interest.

 

Andrew  

At the end of the day, though, like, we’re all seeing our real estate values come down to three now, right? So it’s the ability to not care about that. That is going to be the proof of whether you were doing it right or not.

 

Erwin  

I care about everything. Like, I have a basement rented for 1200 bucks right now, like 1800 a day. So I still care. No, not hurting,

 

Andrew  

like care. Like, you have to care in the sense that it adjusts your strategy, but not in the sense that you’re going to lose sleep over it

 

Erwin  

or gently funding your doctor tenant. No. Hey, you said you were gonna buy a place when you moved in this role of your short term thing, because my rent would be $100 higher if they laughed, they laughed.

 

Andrew  

Sounds like it might be a time to do an N 13 Rescue renovation and

 

Erwin  

it was too late. It doesn’t mean anything. Sorry. I digress. Any other final thoughts on Florida you’re liking it. You think you’re gonna go through with all 10 all 10 Lots, build and sell Oh, well. I

 

Andrew  

actually have a One coaching student that I made that wanted to be brought into the fold on what I was doing in Florida. So I brought him on, he’s actually buying one of mine that are ready to go for permit, because it’s already had the survey done. So one of them will be gone. I’ll keep building and, you know, until the numbers change, why not? Where else is going to make as much sense? You know, I guess that’s rhetorical that for me, like, I think that that just, you know, people are still going there, you know, whereas this market is going to keep dropping for quite some time. Who knows? Like, I hope not. But in Florida, I think, yes, there will be pressure downward, but it won’t, it won’t be hit as as extremely, because they only recovered their 2008, high about two years ago. So like, you know, we had a drastically different economic climate here in Canada than they’ve had there. And to them, they were they were screaming, hey, this is unsustainable, look how high you know who can afford $300,000 for a house, I’m like, you don’t know.

 

Erwin  

Like many Canadians in urban Canada,

 

Andrew  

like coming from where I’m coming from, I have a good perspective on this. Not to say that, you know, things should be that much higher. But specifically, from property managers down there, I’ve heard them scream, you know, how can people afford to pay more, and I don’t know how they will. But they’ll find a way. Like, it’s all supply and demand. If people need a place, there will be you know, maybe families move together. And you know, two families live in one, but you’re gonna have it, it’ll happen and it is happening, the rents are going up significantly. So these are just conversations from year and a half, two years ago, there was nothing

 

Erwin  

there. Again, they’re getting strong population moving in, and moving away from other

 

Andrew  

families like so you’re gonna see all kinds of new industry popping up in there in that area, Southwest Florida specifically, and other areas, too, but I’m not really focused on the other areas.

 

Erwin  

I think most people know if they’re listening to this podcast, generally know, the world’s pretty effed up and a lot of places very much. So pretty much all of those millionaires are going to somewhere where it’s not effed up. Yeah.

 

Andrew  

And I don’t think like the USA or in general is that place but I mean, where is that place anymore? Like, third world maybe go to the go to the third world less organised.

 

Erwin  

You want to go? I don’t know. No, no personal safety. My wife’s never going to agree to any of that. The only reason that private island on the whole island yourself I don’t know like and I feel it’s the thing that is also that I still conservative, I was lucky as messed up as we have things are here. And it’s messed up this world is this is way more messed up than the rest of the world. Yeah,

 

Andrew  

it’s like a competition who can be more messed up like everybody’s fighting for it at once. Justin Trudeau raises up the ante and then Joe Biden does similar. And here we are right back.

 

Erwin  

Like, like throwing lip matches at China like geez guy.

 

Andrew  

Yeah, it’s an interesting, interesting world, to say the least. And it’s that all you know, I think that all contributed to my being a little bit slower to take action in the last few years, just like trying to spot where are things going, you know, what’s actually going to happen. And so far, I’ve been right about way too much about all this in the economic direction. I’d love to see, you know, opportunity turned around. And I again, I do think there’s a lot opportunity coming up right now.

 

Erwin  

But from the outside view, will you’re right here, you can tell me if my view is correct. You’re still buying hard assets and assets that will produce

 

Andrew  

Yeah, yeah, just you know, it’s got to pass that fundamental test, right, like back people used to do 1% rule. And then that went away for a while. Well, that’s obviously coming back. And, you know, maybe we can up that to a 2% rule, who knows how crazy things get. But that’ll be all stuff that we have to remain aware of, like, can we find deals like that, and, and I think with more opportunity, like more properties on the market, you’re gonna have more opportunity to have sellers who are in a situation where they got to sell, and there’s a number that works for them, that could really work for you as a buyer. And those are the deals that we as investors need to be keeping our eyes out for.

 

Erwin  

We think we’re seeing that right now. Time will tell it’s

 

Andrew  

without question. If you have more property sitting for longer, there are going to be people with personal situations that just they can’t wait. And those are, those are opportunities, because you can do them a real solid by by getting them out of the deal they need to get out of for a number that works for them, but it also really works for you.

 

Erwin  

And I just like to add to that people, some people will say we’re bad people, but the seller needs the Quiddity

 

Andrew  

Yeah, sell it right. You’re making them an offer and they have the right to refuse it. So but if it works for them, they’ll accept it.

 

Erwin  

Yeah. Would you prefer no liquidity? Yeah. Would they prefer the bank ticket back? Oh, you want the bank to take the property but we’re the bad guy. Yeah, exactly.

 

Andrew  

Yeah, the whole thing with the wholesaling thing I always had like I always felt a little bad for the seller So Michael, you get it for so much less but some of them are perfectly happy with so much less I don’t agree with ever like misleading them or anything like that. But I mean, if you’re transparent with them, and they say hey, yeah, that works. I can do that. Yeah, then you have a deal.

 

Erwin  

My experience is a lot of those sellers just hate Realtors I don’t blame them. So they refuse to work with a realtor. They’re generally refusing the best exit

 

Andrew  

possible. Oh, yeah. Like the ones who take the wholesale deal. They take less money knowing but I think A lot of them, it might not be a hate, but it’s like, well, we just don’t want people coming through here. We don’t want to go through that. I think that’s a big pain point for people. Oh, really like three months listed with people coming through here all the time. Like, I don’t want to do that. Look at how messy this house is. You mean, you’ll just give me this number and we can be done with this. Okay. Yeah. Amen to that. They don’t know what I can do. They haven’t called

 

Erwin  

anyone. Seriously haven’t just we can help them a lot better than anybody else can.

 

Andrew  

Yeah. And no doubt. There’s always other opportunities, other ways to proceed. And you’re right, they probably don’t know.

 

Erwin  

Excellent. So we talked about one 2%. That actually leads me to more aggressive strategies, like short term rental. So that kind of brings us to what’s Wait, what’s the, what’s the campground called?

 

Andrew  

So the campground is Maple Ridge family camp. And that’s in Miller, Lake Ontario, about 20 minutes south of Tobermory, and torn was beautiful. Yeah. And I spent a lot of time up there. So my mother in law has a cottage in just north of sobble. So we would go up to Tobermory as like a little day trip, and we would go to Lions Head and the Grotto, which are all you know, within a 40 minute drive of where we were. And so when this opportunity came up, where we’re like 20 minutes between all those places, I’m like, wow, this is this is pretty much the most central you could be on the Bruce Peninsula, in the middle of all the things people want to go see. And we knew Airbnb was a big thing. Like there were cottages up and Saville getting like $1,200 a night on like weekends and high season during during the lockdowns. So, knowing that I wanted to get into Airbnb, but I wanted to do it in a way that I could scale. Like, there was actually a, you know, a possibility of, you know, generating a million dollars in revenue. And when the campground came up, initially, I was hesitant. But I did see that the opportunity to scale was there. So what we did is we actually came in, and we had a bunch of seasonals, 25, seasonal renters that had trailers on the site, and

 

Erwin  

started just to slow it down. They rented the spot. Yeah. So they pay for parking, they basically

 

Andrew  

pay for parking and utilities, so to speak. Yeah, so they have a connection desk, or Yeah, we have 14 of our 25 had sanitary connection, but get this, the owner was actually pumping out the tanks of the other 11. So they had like a tank on the ground that hold like 300 gallons of sewage. And he would come around with his little honey waggon on the back of his lawnmower, and he would pump them out and put them into the mains sanitary drain. So we obviously looked at this for like, there’s just no way, like, that’s not happening. And so we had to give the the rough news to the, you know, the existing tenants, they, you know, their contract didn’t get renewed. So the previous owner didn’t renew them specifically at our request, because we didn’t know exactly what we were going to do. But we ultimately gave them the news that we’re not renewing and we we asked them to, to leave so to speak. It was unfortunate and obviously it was news that they didn’t want but they were paying less than $2,000 per site per year. And those numbers were so far from making any sense at all. We just couldn’t keep that it would just wouldn’t work. So yeah, that finally did all unfold. We got everybody off sort of you know, mid May and then we we you know we’re renovating we bought some trailers some of the people leaving just said hey, you can buy our trailer we were able to make use of one of those in our glamping facility and then we’ve got how many did you buy and how many were of use Ah, if we probably bought like five five from people leaving and out of those like some of them will make good employee accommodations for next year but they were not at the calibre that we would have needed to to rent out on Airbnb. So what we did to start is we went in with glamping tents so we had platforms built we put 230 square foot tents with queen sized beds in them and we had our management team deck them out and Pauline has great vision she you know she could moonlight as a designer I guess she started does with us and she so she decorated them and made it all work and we got those listed at the end of June. We were full for for July on those you know renting around 200 bucks a night and

 

Erwin  

just take a pause there like if hotel doesn’t give you a Twitter night

 

Andrew  

that would be the next one okay, but these are like an experience like people want to go there to like Instagram shot like we’ll have people like go do yoga poses and post reels and tag us. You know there are people who want an experience so even going into the fall now as weather gets cold we figured our trailers would start booking up more because they have heat and no people are still booking the tents even into October people are booking the tents. I’m like, Do you know how cold it gets the camp and October heated? Not the tents.

 

Erwin  

Oh, but when it was heated sorry.

 

Andrew  

The trailers are heated.

 

Erwin  

Okay,

 

Andrew  

we’ve got right now I think we have four or five trailers for rent on Airbnb and they do have heat sources. And the tents are not they’re not but you know got extra blankets, it’s still really cool. But, you know, camping in October, you gotta be ready for that. So, yeah, that’s sort of how that progressed. And, you know, the hardest thing has been manpower, you know, we spent a lot of time making the site look better cleaner, you know, getting rid of extra brush, you know, prepping sites, merging sites, there might have been two sites that really small we merge them together. And our tent glamping is phenomenal, like the sites are completely treat in, you know, the, just check out our stuff for anybody watching or listening to get away glamp and see how nice these these 10 sites are. So it was a combination of, you know, being so secluded, and then having a really unique experience has done well for us. Plus, our location is right in the middle of all these prime things that people want to go to. So that that part’s worked out really well, we had a good solid year, but we started late. So we’re looking forward to next year, having a proper run out will be advertising through the winter. We’ll be looking forward to having people you know, tenting with us in May, whereas this year, we didn’t have any glamping rentals pretty much until the last week of June. And that was very minimal. Yeah, he’s it’s been a roller coaster, but we’re finding our bearings. Like it was just such a such a learning experience so much to know. But you look at full on business, it’s a full on business, while you’re doing it up. Yeah, so we still have that traditional camping part. But then, you know, we’re our focuses and growing the glamping. Because traditional camping, you know, you just you get a lot of people who are just looking for a cheap place to stay, it’s cheaper than that cheap. And you can do that doesn’t really fit that well with our clientele. You know, I’d say with our camp, our prime clientele is families who want to go for an experience. But the reputation of the site over previous years was a good place to go to do group camping for parties. And that is just in complete opposition to families and they don’t they don’t mix well. It’s like oil and water. So what we’re transitioning away from is the group camping we don’t really want that on our site, because it just attracts people who want to get a bunch of friends together, drink, make noise. And these are things we had to learn. We thought hey, group camping, that’s kind of cool people tent on bigger site. Now that’s not so great for us. But you know, we have wild campsites that are secluded for people who want to do the traditional camping. And then we have a lot of pull through RV sites. So people can come in stay for a few days. We have a sewage dump area. So when they leave,

 

Erwin  

does anyone have experience running a campground? No, but I mean, they’re all learning on the fly.

 

Andrew  

So Zach, in our ownership group, he was family they do RVing. So he kind of had some perspective with that, okay, as a consumer, as a consumer, showed Zach, but yeah, shout out to Zach. He’s listening. Yeah, he’s not listening.

 

Erwin  

He’s enjoying his vacation wherever he is. Zach’s been

 

Andrew  

travelling the world for the last eight months, but our management team does. So our management team have been managing trailer parks and campaigns for, you know, I think 20 years, so you’re not flying blind? No, no, they’ve been they’ve been huge. And then we’ve empowered them to hire as they see fit. And then we’ve also brought in help where needed, but next year, a big change will be we’re actually going to be providing guest or employee accommodations and bringing people in from out of town because it’s hard to find people in that area because every available unit isn’t for rent, everyone’s Airbnb, everything out there. So it’s actually hard to find started when

 

Erwin  

you said Oh, play accommodations originally, I thought you meant your own. But you’re, you’re gonna be accommodating. You’re kinda like a motel.

 

Andrew  

Yeah, exactly. So we’re giving like we’re gonna give employees a trailer to stay in so that they’ll still use our main showers but they can use the trailer to stay in Cook, do all that stuff and you know that’ll allow us to bring people in who want an experience we can get people and once we do that we have we have just unlimited opportunity with things like workaway.com and you’ll get people who want to travel and go to a cool place and work you know we’ll be able to accommodate them and hopefully get a little bit more help for next year. Yes provide internet we have internet at the clubhouse so like they wouldn’t have it in their trailer but they would have it we have really good cell phone signal on ourselves. So people can Yeah, you can use your you know I have like 50 gigabytes with bells so I mean I’m sure people have good cell phone package can just use that.

 

Erwin  

I hope none of our staff are listening to this. This was for their zoom background and like yeah, Dragon injuries aren’t you are all these campsites are they all great? Like you mentioned trailer you mentioned tent you mentioned just like out in the woods campsite, they’re all great. They’re not perfect.

 

Andrew  

There’s there’s better and worse ones. I don’t love our art pulled through trailer stuff. I mean, I think it’s it’s functionally good. I just don’t think it looks that good. So we’ve talked about things we can do and you know, maybe we shut down because we have like, I think we have 20 of them in a row you know, shut down 10 of them for everything except for the long weekends and that way people can book to side by side and now we can you know set up a picnic table in between. So we’re always looking at how can we make this cater to families better give people a better experience and repel those who just want a cheap place to stay or why come party because that’s just not you know, I’m sure there are campgrounds out there cater to that. But I just not what we want to cater to.

 

Erwin  

It seems to be general thing, like, for example, that we’re disrupting the short not that long ago. And like they’re they’re trying to clamp down on numbers, like, for example, limiting how many overnight guests you’re allowed. Yeah. Right. So it’s, it’s a problem everywhere.

 

Andrew  

Yeah, if you’re in this hospitality thing, Airbnb or camps, you know, volume hurts you like getting a lot of people in like, it just creates logistical and operational like problems. So it’s actually much better to try and focus on people who want to experience value, at least in my, my perspective, it is, and we’re looking forward to transitioning more that way.

 

Erwin  

That’s exciting. That’s pretty cool. Because I think a lot of people are looking at these opportunities.

 

Andrew  

Yeah, not not a simple, you know, simple project to take on, but we’ve got a good, you know, good diverse amount of experience with our ownership group. And it’s, it’s come really well into play. And then I’ve certainly learned a lot about delegating, you know, even better than I was, like, I was already decent at delegating some things. And now this year has forced me to be that much better. And I’m really actually happy to see how well it’s worked.

 

Erwin  

How many people were on the management team were

 

Andrew  

to two main, two main managers, we have two more employees that are working sort of semi full time hours right now. And we have a bookkeeper that actually is working out of the Philippines, he’s a CPA. So he and he’s busy, like there’s a lot of work to do on these books, a lot of transactions. And then of course, my assistant, she’s helping out on on this, and then our ownership group is there’s four of us. And we all sort of handle different things. I’ve sort of handle general oversight, specifically of the accounting and bookkeeping, and, and the management team. And then the other guys help handle acquisitions, certain operational problems, all oversight, none of us are, you know, full time on this, none of us are hands on site, although we have had, you know, you know, Mike goes up or Jake goes up, and they’ll spend a day or two on the site, dealing with management, you know, helping out a little bit, things like that just to integrate, make sure that we’re hearing them. And then we do a weekly Tuesday meeting where we go over what’s happening, how do we kind of go what do you need from us? Which direction do we want to go? What do we need to be thinking about for next year? How do we adjust our marketing or our positioning in terms of who we’re attracting? And a lot of these that came out of necessity, because we weren’t doing that originally, like we do a management team like or an ownership meeting, but we wouldn’t do a management meeting meeting and we really started to see there was a breakdown in communication. So doing that weekly meeting has been huge for us and just you know, now we’re on the same page and they take care of everything for us they run they run our sales on site, we you know, I just check the bank account and I see the sales coming in it’s July and August with the campgrounds fun like all the Airbnb payments, rolling in watching the account, you know, grow and then you gotta be prepared for the offseason when it doesn’t any plans for what the winter by the bylaw. We are not allowed to have stays for more than seven out of 10 months, which is a weird way of putting it so so basically seven, that’s how much you can operate. Yeah, I can’t so so that’s like eight and a half out of 12 months we’re allowed to operate. So we’re we’ll be shutting down for for the winter. We’ll be back open. You know, we’ll we’ll be starting operations again in April. And yeah, it’s weird. Why would they say seven out of 10? Why wouldn’t they say it out of 12.

 

Erwin  

But I’ve heard it with other recreational places, for example, like the boys and Innisfil. Jeez, I’m terrible. Anyway, they have to close them for one month because the policy there is if you’re if you’re open 12 months, people live there. So you need to invest in hospitals and schools. Yeah. Okay. But that’s 11 or 12 months. They’re like, obey your G You’re really restricted.

 

Andrew  

Yeah, I mean, but if I interpret seven out of 10 That’s, like I said, it’s like eight out of eight and a half out of 12, whatever. But we could, you know, longterm look at you know, and we’re thinking out loud, you know, there’s tonnes of land there is the potential for severance and development. Yes, I think there is. We haven’t really explored that. So that’s certainly on on our mind, and then, you know, maybe go and get a bylaw amendment or a minor variance to allow us to do something in the winter any skiing or snowmobile trails and the snowmobile trails right in the area and money Yeah, so we are allowed you know, we can go into a site plan control and actually start building more structures on the site. We can go get an amendment to the bylaw that allow us to maybe maybe we you know put a little cross country ski facility there or you know, offer winter stays for you know, for people who want to do that kind of thing snowmobiling and what have you. These are potentials I don’t know if that’d be pushing my business downhill which I would prefer to do. So yes, that’s possibilities. We haven’t gotten there yet. haven’t felt we needed to add more. I want to stabilise what we do in the summer before we start thinking to

 

Erwin  

specialise the summer. Yeah, and then we’re going to grow the summer part is it more trailers more tents?

 

Andrew  

Yeah, we’re gonna keep acquiring more units. So the tents did really well. We have three more that we didn’t even set up this year. So we’ll be setting up the remainder of those will be acquiring more trailers. You know, the big thing for us has been finding finding trailers just Kijiji marketplace. And hopefully they’re most So you’re renovated on the inside, don’t need too much. And you know, if we need to paint the outside, give it a theme, decorate it, you know, we’ll hire a designer to help us make it really cool. And we just we want to make we want to focus on the memorable, you know, whatever, whatever that might look like, but something super unique, where people are going to Instagram it. They’re gonna say, wow, look what I stayed in, like, I’ll never forget this experience, right? It’s not a hotel room. It’s something that they’ll remember.

 

Erwin  

That’s pretty cool. We were organising any like real estate investor,

 

Andrew  

I was thinking about that. We don’t really have the space as of right now inside we have lots of outdoor space

 

Erwin  

but even just to coordinate like these, yeah, 50 spots or

 

Andrew  

we’re gonna do we’re gonna not Yeah, so that’s, that’s something that we can definitely consider I was thinking about that we just never got to it this year. But, you know, as we we, you know, scale up and get this next year in the works. There’s, there’s so many places, that’s the nice thing about it, it’s just like endless opportunities to add value. We have we have 90 acres, some of that is like marshland but we’ve still got tonnes of space tonnes of sites where we can convert them into glamping where you know, a single tent site can generate $45 A night whereas glamping tents could do you know 200 plus 250 I mean, we may increase our prices even more for next year just based on the demand we had this year. So you know, just thinking in terms of an operational strain on our septic facility on our well on our management team, you know, we’d prefer to to focus on the value experience where people are paying more getting an experience and then you know, we can give our management a break we’ll come back and we don’t need to drive you know 1000 People through the site a day or we can we can do much less than that and you know keep our sanity get really good reviews and and grow the business more organically that way

 

Erwin  

are you doing to drive traffic on Airbnb are we’ve done really

 

Andrew  

well with our Instagram like our Instagram page, we ended up partnership with explorer Ontario and got like US government, right zip tourism is a tourism is a tourism website. I’m not sure if it’s government, but I think we paid them like $500 for a partnership sponsorship. And they they promoted it. We had 16,000 comments on the post. We got so many bookings I’m sure we got between 20 and 5025 and 50 bookings out of that because they can’t directly trace them you know, people go to Airbnb and booked but it was well worth it. We did it again with the airstream got a bunch of bookings on that those promotions were very, very lucrative for us. Good luck, good return we’ve got we’ve got our Google AdWords, you know, working away for us for the campground that’s been, you know, steady and not not that we’re spending a tonne. But we’re getting very targeted, you know, people wanting to camp in our area. And we know that that’s ideal, but there’s so much more we can do. During the policy standpoint, I

 

Erwin  

should ask this earlier. Is it all on Airbnb or is it

 

Andrew  

so yeah, we’re on Airbnb, we’re on booking.com. And our preference is obviously to people to book direct at grotto. getaway.com. And yeah, they can see all our listings there and book and we’re going to have for the upcoming season, we’re going to have our new launchings coming up first on our website, so yes, they will be available on Airbnb, but we’re going to do like special promos where people can book early through our website, because we want to start doing more that way. Because obviously there are certain limitations to working with Airbnb. And it’s very expensive. But Airbnb has been good. I’m pretty sure we’ll have our super host by the by March 1, I think October 1. And I think we have like, last time I checked like 130 reviews. Since it and we didn’t even have retros until the end of June. Crazy. Yeah. So it’s it’s been interesting process tonnes to learn a little bit more intense than, you know, passive real estate. But,

 

Erwin  

but this is not passive. No, I

 

Andrew  

take it can be made more passive by having good teams though.

 

Erwin  

Can you share some numbers? The acquisition cost is this property,

 

Andrew  

New Year 1.5 million to acquire. And as far as revenue goes, I suppose cheaped a lot of people 2.9 Yeah, see, like, you know, revenue targets like I don’t know how much I should say right now, but I you know, just out of respect for my partners, but we did well, we didn’t do as well as we wanted to this year, but it’s a startup here. And you know, treating it as a new business. So we’re confident with a full season next year it’s gonna you know, it’s gonna be a profitable year. And I’m just gonna wasn’t as well because we were delayed the delay. It hurt us the most right? And like if you think about Airbnb, and he photos, right, and you don’t want photos with trees with no leaves, so you need trees with leaves, and you know, tents, trailers, you know, some of those things were it was just like, when’s the ideal time to buy a campground if you’re going to do this? There is no ideal time. Like no matter what, like you’re gonna buy it mid season, no one’s gonna sell you a campground mid season because that’s when they’re making money. Yeah, pipi price, peak price and they’re making all their money. They want to wait until October until they’ve milked every last cent cent out of that campground then they want to sell it which is exactly what the owner who saw the task did smart. Hey, why would you? Why wouldn’t you? Knowing that like we, you know, we did our best, but I mean, you don’t really get leaves on the trees until mid May anyway, we should have been ready to take photos and it just didn’t work work out there. That way, we didn’t have enough help. So we’re kind of acknowledging these things, seeing what we needed to change. And next year, we’ll be ready or

 

Erwin  

injured. We were way over time, but you are a wealth of information. So I apologise.

 

Andrew  

Oh, cool. Yeah, I have no idea what time it is. But yes, before

 

Erwin  

we overtime for this, and then we’re gonna get into chairs, YouTube after this. Final thoughts, General,

 

Andrew  

general thoughts on the market on anything? Yeah. Interesting times, I think like people who are thinking about getting started, I don’t know how much of your audience that is. But never been more important than to focus on the fundamentals. It was always important. But now I think people are really starting to internalise how important that is, you can’t expect your property to go up in value. In fact, why not invest with the expectation your property’s gonna go down in value and still be alright with that, you know, maybe you can start looking for cash flow plays where you don’t care if it goes down. 100 grand, you know, it was all relative to what you pay. But you know, you can you can still invest here, I still believe Ontario’s a place you can invest in becoming more and more lucrative by the day. But you know, somebody, someone like me to go and go to Florida? I don’t think that that’s for everybody. I really don’t I think that you have to have a certain skill set certain experience. And you got to be very diligent, and I was prepared for that. But I don’t think new investors necessarily would be which I agree with you, you know, saying invest closer to home when you’re starting down the road? Yeah, you can look at something like that more seasoned investors. Yeah, I know, tonnes of them reaching out to me wanting to do it, and they’re probably ready. But not everybody is.

 

Erwin  

Because we’re finding property we can we can buy for less than build costs. So that’s a pretty

 

Andrew  

good guy. And that’s gonna become more and more common. And I’ve always said, you know, buy for less than cost a replacement, because I mean, they’re not making any more land. And if you can’t build it for that price, the long term outlook on that property is probably pretty good

 

Erwin  

in labour and construction is scarce as well.

 

Andrew  

So it is like it’s not getting cheaper to build things right now. And will it if demand comes down enough? Yes. But where we’re at right now, I think that’s a great strategy, buy for less than cost of replacement is a good strategy right now. Doesn’t mean that’s perfect doesn’t mean every property that fits that bill is going to be a good one. But it’s it’s probably a good starting point. Yeah, no one rule is perfect. And not for everybody, even if it’s perfect. For one. It’s not it’s not perfect for all,

 

Erwin  

like, you might want one 2% rule, but you’re gonna buy a caregiver like Andrew.

 

Andrew  

Yeah, that was that was a different play. That was that was real estate adjacent, you know, as a business with real estate component, which, you know, the big thing was owning land and wanting to own a lot of land and check that box. And we’re getting it to a point where, you know, it’ll satisfy cash requirement too. And that’d be a great way of hanging on to a bunch of land

 

Erwin  

the dumbest question for you Sure. That’s gonna ask him you on the way I’m gonna Jim Crow. Don’t do that.

 

Andrew  

I don’t think that is allowed. But I know that, you know, there’s a lot of hunting out that way. You know, it’s a very much a hunting culture, you know, especially in like the surrounding sobble area. I would assume this area too.

 

Erwin  

Because I’m just thinking like, if all hell goes a handbasket, you need to live somewhere off the land, but you can live off the land easier than I can live off

 

Andrew  

the land. grow some food

 

Erwin  

on your animal friends, you don’t want to hurt them.

 

Andrew  

Yeah, I mean, like, have some chickens, maybe eat the eggs. I mean, I eat vegan but I mean, like, if it ever came to it, I would you know, but I don’t feel like I need to so I don’t, we’re just

 

Erwin  

crazy, cuz you’re a big guy. Alright, Andrew, thanks so much for doing this. Yeah, thank you had fun podcaster and yeah,

 

Andrew  

this is this is such a cool setup, man. It’s cool. I’m looking forward to having you back on my podcast and we’ll we’ll dig into what you’re doing. Can’t wait.

 

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 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 it 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 but So many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell I love teaching and sharing this stuff

 

 

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**Transcripts are auto-generated.

 

Erwin  

Greetings, everyone. Welcome to another episode The truth about real estate investing show. And there is literally so much going on in the world right now. And what often comes back to me practising gratitude that I am Canadian. If you don’t believe me, ask our friends or ask your friends and we’re a family in China, Pakistan, Sri Lanka, Russia, Ukraine, and of course, even New Zealand. If you can believe it, New Zealand, a country with a population of only 5 million people has a higher average house price than we do here in Canada, hence, they’re experiencing massive brain drain people are leaving the country, talented people are leaving the country. And that’s usually a bad thing for an economy when smart people you know, for example, like doctors and leading entrepreneurs when we’re taking their talents and their job creation elsewhere. That’s bad for an economy. Hopefully that hasn’t happened here in Dublin, Ireland, over 100 people waited outside in line, a house for rent one house, there’s my house for rent 100 people waited outside to view the house thanks to inflation, rising interest rates in the inability to raise rents to match rising costs of living thanks to rent control, Ireland serves as a sneak peek into what we may run into as we to operate under rent control. And hopefully this is not a feature we have to look forward to, in Ontario, in Canada might imagine anywhere else, where there’s rent control, and rent control provinces with lots of growth. You know, like BC, for example, like Nova Scotia, for specifically for Ontario, the smart Prosperity Institute just produced a report stating that the housing shortage in Ontario is 471,500 units. 471,500 units is how much the current shortage is. And 1,034,900 new units are needed to keep up with demand over the next 10 years, for a total of 1.5 million units. So we need 1.5 million units to be built over the next 10 years. Unfortunately, the government also paid for a study to be done. And there’s only going to be 700,000 new homes to be built over the same those same 10 years. So again, this is revisit the supply versus demand demand is there for 1.5 million. And supply is going to be less than half of that as 700,000 new homes to be built over that those same 10 years. Of course, the news really gets worse because if you’ve been following the news and speaking to builders like I do, I understand I’m friends with lots of builders, and who are part of builders associations, you’ll know and also it’s in the news, you know that many projects are being paused, delayed or even cancelled. So even less housing based on the current news is being built. There’s lots of unknowns going forward. However, here at iWin real estate, my coaches and I are staying on top of economic data. And that’s proven really helpful. I’ve mentioned a few times on the show, we haven’t had any clients with experiencing closing issues, because a lot of things they just worked out that we did. And it’s nothing like we’re seeing out there in the market. For example, we’ve had lawyers on the show, who described their regular retail consumer type real estate clients are having all sorts of problems closing on property, their appraisals are not coming in, and they’re not able to close because they don’t have they cannot come up with the downpayment necessary to come up with it for the shortfalls and appraisals, since the market has dropped. But anyways, we’re staying on top of things here. And thankfully, it’s worked out really well for ourselves and our clients. I’ve mentioned before that Terry and I, we ordered our appraisals on our properties for our refinances back in February. And thankfully that worked out that timing worked out very well. I’ve also been talking to people like my neighbour who works for a major consumer products company, they distribute and sell many products you have in your home, he specifically works in supply chain management, from what he can tell the Americans are about four or five months ahead of us in terms of economic terms, as in, their consumption is down, they’re buying less. You’ve also been well, if you fall, I like to read articles on corporate earnings. So for example, Walmart, their sales are down as well. People are consuming less instead of the article. She the CEO mentioned how they’re seeing sales down on, for example, four gallon jugs of milk are being replaced by sales of two gallon jugs of milk. So people are downsizing but they’re buying anyway. So the numbers don’t look good. The Americans are likely to four to five months ahead of us economically. And the theory would be is because they only like half locked down versus Canada as a whole country locked down pretty good. So they’ve had they’ve had more freedoms. So Canadians are still consuming heavily right now. So that’s my own experience. I was just in Blue Mountain Village and up north very popular recreational resort style area in north of Toronto, and it was absolutely packed A parking lot was packed, the hotels were packed, the restaurants were packed, the bars were packed. My point is, is that because Canadians were locked down, we’re taking that we’re taking our time now to enjoy our summer enjoy our freedom. And then my guess is in a few months time, we’ll start seeing Canadians start consuming less, you know, because stuff is expensive, might start seeing some pain in terms of job losses, for example, for just announced 3000 job cuts this week, they’ll mostly be in North America, Canada, USA, and I don’t see how we as Canadians avoid a similar fate. But please understand, I’m no fear monger. I do fear in the short term. But I’m bullish in the long term for real estate, am I investing and my stocks and my crypto I don’t most of all of its down this year. Hence, my team and I will be summarising all of our research and how we and our clients are taking action on this current market. Some are selling, some are buying. We’ll be sharing what deals look like in this market, and to prepare and also how we’re doing what we’re doing to prepare to weather the current storms. And we’ll share our own predictions for interest rates, where the market will be going in the short term. At our September 17 Ioan meeting, this will be a first time meeting since our summer break. So we have tonnes to share on what income properties are selling for why certain properties are taking longer to sell what the rental market is doing. Hence, this is a meaning you do not want to miss will be trying through the clickbait and the Bs by sharing what we’re doing with our own money and what our clients are doing with their money. And that’s all on September 17. At our island real estate office here in Oakville. Same place, same time, it’s a Saturday morning, so traffic’s been nil. The doors are open like 830 ish, there is no online option. You do not want to miss it. Understand that this market is the wildest I’ve seen. And I predicted early on that we could easily see 2017 happen all over again. But 2020 is making 2017 look like a speed bump in the road. I think 2008 2009 is a close comparison to what we’re seeing. I don’t think it will be as bad based on what I’m reading from the top economists in the world, and top economists in Canada. And to be honest, we invested back then we did quite well, we did more than survive this cycle. And I think we’ll do more than survived the cycle as well. On a personal side, I’m now volunteering at our local Brazilian jujitsu club during my kids class, I must have ADD, as I have issues sitting around and watching classes, then the problem got worse as we parents were asked to wait outside the amount of class area. Yeah, so it’s a poured beer for parents to do a bore parent, such as myself where he spends too much time on their phone. So what I decided to do was I bought a uniform, and I volunteered. So now I’m an extra set of hands and eyes and ears to make sure the kids don’t hurt themselves. Plus, you get to observe the instruction or close and provide some pointers to the kids. The best part is I’m learning the curriculum, so I can practice the kids outside of class and you know, have more in common with them and spend more time with kids as I honestly work enough as the kids seem to dig it so far. So I’ll guess I’ll keep this up until they’re sick of me. Oh, by the way.

 

Erwin  

Our our September 17 meet up. Link is in the show notes. If you’re on our emails or you follow me on social media, you’ll get the link you’ll see the link there to purchase tickets, clients, of course you go free onto this week’s show. We have with us a young rock star and just stanza who was 24 when we met 24 years old when we met and the owner of the title of the youngest client we’ve ever worked with. He’s young Hustler, who when I met him, he had three jobs. He is an architect by trade. So that was his day job, bartender for evenings and weekends, and a landscaper with the remaining time he wasn’t sleeping. Thanks to all that hustle and saving money by living home with his parents Young Joe saved up enough money for his first investment property. That was back in 2019 January 2019. And now he has five investment properties. Crazy enough he’s made his first million is actually about a year ago, he crossed the million dollar mark in terms of increased his net worth. Hence he’s also the owner of the title as the youngest of our 45 self made real estate investor millionaires of age of 20 I think it was 27 at the time anyways, if someone challenges him will will will sharpen our pencils and figure out the exact age of Joe. Joe is here today along with coach Coach Tammy from the AVID real estate team, my team to give us an update on his expansion project how that went in Sudbury when he was looking for diversification and his lessons from it not going so great. But you know, Joe’s smart and talented hands he bounced back pretty well. He got a gem of an expired listing and Hilton, that coach Tammy helped Joe with that was eventually priced well under market because the property failed to sell. It was rough later found a hole in the roof that could fit a soccer ball through and a challenging tenants with previous orders against them from the landlord tenant board. We talked numbers on this most recent on this most recent deal so have your pens and calculators ready or email us at Iowan at infinity wealth.ca And we can send your coach Tami’s draft numbers. Please enjoy this show. Okay, Joseph what year to be me?

 

Joseph  

2019 2019 you’re how old 24 When we met once you 23 Then turn 24 Once we bought four and then I turned 25 Okay, so

 

Tammy  

you wanted January 2019? Yeah.

 

Joseph  

Yeah, right after New Year’s that whatever that first event that you put on.

 

Erwin  

That’s big event. That was the one on the hill, Shawn Allen for referring you. Yes. Yes. Thank you, Shawn Allen.

 

Joseph  

I was going to like networking events and stuff like that. Prior but Sean’s lives in London. He was doing a networking event in Toronto we loop buyer Byron says by thing I can always always mess it up.

 

Erwin  

Your European

 

Joseph  

I can’t roll in our for my life. Didn’t matter. How’s your Italian? A horrible absolutely horrible my mom is very upset with

 

Erwin  

is your Italian better than his? Yeah,

 

Tammy  

probably my probably better than yours. And I just married one.

 

Erwin  

That’s the show is going off the rails? Why were you going to real estate meetups you you had at the time you had a career in your training. So you’re already making career wise as much money as you could?

 

Joseph  

Yes. But I think I was kind of looking to I don’t really know what I was looking for it to be honest with you. I had a few things that I wanted to I had a lot of money saved up

 

Erwin  

from that wasn’t that much money. It wasn’t more than to notice a lot of money to me. It

 

Joseph  

was a lot of money for most 2423 year olds. It was a lot of money for Yeah.

 

Erwin  

$80,000 Yes. That I worked very hard for but listen to your credit cards now. Yes. really different. Yeah, that’s fair. Yes. It was a lot of money.

 

Joseph  

Yes. Life Saving at the time. It was like my life savings.

 

Erwin  

Yes. But you blood and sweat it before since you were 16?

 

Joseph  

No, like more like right after more like after school kind of thing. Okay, but like still like working two three jobs study

 

Erwin  

for it. You basically never had to date your life. No. Until oh, gee, until real. It’s all downhill from there. To your parents. Yeah, they got you good. till you’re 24 to get debt free. And the new meta Yeah, exactly. Exactly.

 

Joseph  

Yeah, no, I just wanted to kind of I wanted a little bit more for myself. I wanted to have a little bit more ownership of something. And I think the initial plan like in all honesty, the initial plan was to take the 80,000 by Tesla. Yes. Because the shares, right? No, Tesla Tesla car okay, but I don’t know what changed it. I think I had listened to a few episodes of bigger pockets or something along those lines. And that got me hooked up my show. No, I’m sorry. Sorry. I found you later on. I’m sure it all down here. Yeah. And then that kind of got me into it. Rich Dad, Poor Dad, my kind of dad went through pretty traumatic kind of heart attack experience. And then that kind of shifted from there. It was just kind of like I need to do something about this. And that was kind of like November of 2018. And then I started going to like a networking event every every other week. And then stumbled on to Iowa and grew up from there.

 

Erwin  

Like your yada yada your your father’s health scare.

 

Joseph  

Yes. Heart attack.

 

Erwin  

Why was that a trigger for you to

 

Joseph  

he thinks simultaneously as he was having as he had a heart attack I was like really deep into the weeds of reading Rich Dad Poor Dad and cashflow or not cash, not cashflow. tribit and Cashflow Quadrant and all those other books, and kind of still listening to real estate podcasts and stuff like that. And so I think he would just like the connection of the two and just that was just that I was just, I was hooked after that. And it’s always something I’ve always really wanted to do too. Like he’s always really like this like not necessarily in the investment side. But just like real estate in general has also been has always been like a something that really intrigued me. So it kind of took over from there was a

 

Erwin  

kind of, it’s not uncommon. We’ve actually had a lot of people on the show where a major life event usually with their parents that got them really going like really crank the crank up the temperature on their want to hustle to do more quickly. Was it just like you realise like Life is short?

 

Joseph  

I think. Definitely a little bit of that. I really don’t know, I never really I didn’t really take much time to think about it. It was just like, I’ve always been someone that was just like if this one needs to get done, I do it. I don’t really have any second thoughts about it. I just, I’ll learn as I go. So I’d really didn’t learn take time to learn that much about real estate before just jumping in, had the money to it’s not like I was like had to save up that much more to have all the money. I didn’t have all the money but

 

Erwin  

as you didn’t just have not not have all the answers. You didn’t have all the money.

 

Joseph  

But I think I’d have been exposed to real estate or a younger age through a series of different kinds of people in my life and that kind of helped to kind of make the job into it. Yeah,

 

Erwin  

the finding the money piece you actually detailed more now, just a year ago, the last episode. But unfortunately for you, we’ve gained about four listeners, I’m sure like both from 13 investors now to 17. So we need to, we need to spend some time to bring the other four listeners up to speed. Got it. Okay. We did that for them. Hopefully that was worth your time. For listeners will be appreciate that we brought in Georgia to we spent some time to bring you up to speed. And if you’re interested, go back and listen to the episode with George Costanza. This is your third time. Fourth time

 

Joseph  

fourth time. Yeah, we’ve we’ve done a yearly update every year since I started.

 

Erwin  

Okay, so what’s keeping you busy these days? Well,

 

Joseph  

in the next few weeks, I’ll be going to Greece. So that’s really been kind of doing a little backpacking trip for myself in Greece, just I needed a vacation. Yeah, I needed something just for me. I’ve really spent like the last four years really haven’t gone on anything major. A road trip here there been like nothing overseas or anything like that. So I just decided it was time to like treat myself. Um, besides that I’ve been in the last kind of five to six months been liquidating some assets and whether it’s in crypto or in or real estate to kind of make room financial flexibility for the market right now. And to kind of start taking advantage of the market in the kind of the next few months is kind of my projection. I don’t know everyone’s different. But that’s kind of what I’m feeling out right now. So

 

Erwin  

what did you sell off real estate wise,

 

Joseph  

I sold ours. I

 

Erwin  

know, we haven’t sold anything in Hamilton.

 

Joseph  

I have not sold anything in house firm. I’ve we’ve actually recently purchased something in Hamilton. But I sold off a property that I purchased in February, there was just a bunch of stuff that was going wrong with it. And so I decided my budget, my money was better used somewhere else than in something that wasn’t making them money or it wasn’t I didn’t have any sort of time horizon to start making money. And so it just made sense to kind of liquidate and move on to transition those assets into something else.

 

Erwin  

So what got you into Sudbury? What was what was the month? But because this is about 12 months ago? What was when you get inside?

 

Joseph  

When did I get in? Must have been March? It must have been? No, it was February of last year,

 

Erwin  

February of 2021. Yeah. What were you going through

 

Joseph  

a series of reasons I actually really liked the city. I think it’s a great place for investments. But I think the approach that I had was wrong, but that’s a different conversation. I went there just more for the from the cash flow perspective. Hamilton wasn’t cash flowing the way I wanted it to

 

Erwin  

cash flow if anyone wants to do more, more is always the answer. Yeah. How much cash? Would you like more?

 

Joseph  

That’s fair. That’s fair. No, I just wasn’t cashflow in the way I wanted it to. And I was trying to find a market that would cashflow a little better for me. And I liked the kind of future prospects of Sudbury with green energy becoming a major player in the space and having so much nickel up there and whatnot. So it was I think it was more of a nickel play, to be honest with you than it was a real estate play isn’t wrong. No, there was nothing wrong with it nice to actually really liked the city. Like I still have a property there right now. But the it just the renovation that I was doing there wasn’t really going the way I wanted it to. And so I just decided that it was time to kind of cut ties.

 

Erwin  

So this is a trick about real estate investing. It’s not always rosy sunshine and roses, is it? No, it’s not. So where did you find this contractor that didn’t go that went sideways? Fantasy coaches and legal troubles didn’t?

 

Joseph  

Oh, yes, we’re still I’m still dealing with the legal troubles actually, right now. So yeah, not not fun. Do not recommend it. But yeah, I found them through the network kind of through through people that I’ve met down there.

 

Erwin  

Sir, I’m sure.

 

Joseph  

Since found out that there was people kind of certain connections that I didn’t make at the time, that kind of may have changed my opinion about hiring a certain individual or certain company. But nonetheless, I tried to look at it more like a like a lesson rather than a mistake. Right? And so I’ve been really, over the last, probably the last, I’d say five to six months and really kind of analysed since we’ve kind of since I decide to sell it really analysing what What mistakes did I make and how do I avoid them? And how do I kind of improve my process going forward? Whether it’s in the hiring process, or in the vetting process? Or how do I really kind of iron out and don’t have these, essentially these these issues that came up from from this one guy? And it seems like it was just one thing after another with him and that was a complete fault of my own for maybe not vetting them properly.

 

Erwin  

Yeah, there’s a lot there though. Yes, great. Responsibility. Part of like taming I do is we also take responsibility for referrals we make again Oh, I know, I can think back to one contractor that’s had legal issues with our clients. And I’m we’re getting on the phone with him and yelling at him. Like you’ll never yeah is pretty. I’ve never yet I

 

Joseph  

almost haven’t seen you. I pretty much

 

Erwin  

never yelled in the business transaction in a business relationship. Right? I’ve had issues with other realtors and stuff like that. And yeah, people on my team, but still professional, because I still need things to progress. Right? We still need to keep it professional. But yeah, that Jeff guy yelled at him. And he just lied his teeth and everything. So the people that the folks that made the referral to you to general contract, did they? Do you have an escalation point?

 

Joseph  

Did I have an escalation point. And so

 

Erwin  

I got from corporate world, right, it was a big blue for seven years. So if someone in the company, if I’m working someone in the company, and they’re not doing what they said they’re supposed to do, I go to the boss, that’s just how it works in corporate, right, like for when we intervene and make referrals, we’re not their boss, but we’re often their number one referral source. So there’s some accountability there, we have some leverage in the relationship. So if our clients not happy, then we make the phone call, and let them know, we’re not happy that our clients unhappy, right? And then they know, because of our business relationship, like where basically, they don’t have a marketing budget because of us, right? They don’t have to go find clients, because we were making all the refer to we bring them clients. So if they want that St. Say stream of clients to continue, you have to make my client happy. And that’s often not hard. We’ve had many folks come to us because I like working with our clients. So what my question is, like, was there is there an escalation process? Because with us, absolutely is

 

Joseph  

in there? Yeah, there definitely is. I mean, like, even when I have issues, if I have issues with a renovation that I’m doing in Hamilton 99% of the time, it’s coming from you or someone else that is in the group, and it just in through conversation, like it will call each other talk to each other. And it’s like, oh, what’s like, what’s going on with this property? Oh, this going on? Not really happy with this. But we’ll get there. And then all of a sudden, that problem is fixed. And I call Tammy, I’m like, what would you say? Like, why are you what what’s going on? Why you’re getting involved. And but it just is nice, because it was like it was always like there was someone there kind of watching out to make sure that everything was going smoothly. Besides just me, I didn’t have that same experience there. And not to say that there was anything particularly wrong with it. I just didn’t have that. I think coming from an experience here with the group that you’ve put together, where everyone’s kind of family and everyone kind of works together to help each other out. There. I felt it was a little bit more lone wolf. more basic. Yeah, yeah. But just there wasn’t a network that was set up that is set here. And so I think just through a fault of my own knots, assuming that the process would be very similar, I didn’t do probably a well enough job of kind of understanding what needed to be done at the time.

 

Erwin  

But and what your experience isn’t different than what was No, I

 

Joseph  

imagine, most people have a similar experience, if they’ve had a contractor relationship go south,

 

Erwin  

like most Realtors offers offer basic services for join a search, they can book your showing appointments, open lock boxes, you know, ask you if you’d like the property or not, right, prepare all the paperwork and stuff like that, you know, it’s just for Tammy and I, we this is how we’d like to like to be service. Like as realtors, we’re paid a lot of money. Right. So I think a high standard of care is appropriate, including yelling at your contractor, if we have to call him threatening their business.

 

Tammy  

You know, I don’t even the vetting processes, it’s can change. And you have to roll with a little bit too, because, you know, even the contractor that we had, where things had went south, we had multiple people working with that person who had success as well. So it was really hard to know. And sometimes those things happen. So I think a big thing is to know when to recognise it, and when things need to be addressed and fixed or walked away or that kind of stuff, which you know, you did afterwards. I think that was that’s important too. And to know that it’s okay to walk away sometimes from things as well. failures. It’s

 

Joseph  

yeah, that was that was probably the biggest challenge for me was walking away, not because it wasn’t a smart financial decision, because I made money on on the sale. It’s not like I didn’t make money on the sale, even though we were only halfway through the renovation. It was I think there were a lot of it was there was a lot of ego involved. I was really kind of caught up in what is my image? And what does it look like if I quote unquote, fail? Yeah. And that held me back. So these issues are coming up back in November, and I realised that we close in August, renovation started mid August. And by the time November hit, I kind of taken like a month away and my brother’s wedding was in October and it hadn’t really gone up for like probably about five weeks. And then I started going up pretty consistently in November. And there was no progress made since mid September. And so I was going up every single week to and no progress was being made every week. I mean, like maybe one thing here or there but like in all honesty like I do more on weekends at my property than this guy did in the whole week.

 

Erwin  

And they have a crew.

 

Joseph  

He has a whole crew exact, and that’s his only job. Yeah. So that’s how they make a living. That’s not how you make a living.

 

Joseph  

Right. And so I think I kind of got caught up for probably about two to three months, not wanting to sell more from an ego standpoint. I wanted to, but a lot of it was I wanted to push through for myself, I wanted to kind of overcome the obstacle. But the thought that was rolling through my head is maybe it’s better to sell, maybe it is a good time to sell. And I was really battling with it. Like I was researching prices, what can I get for the property? What would be? What would be my exit? How much kind of leeway do I have before I start losing money on this deal? And a lot of not wanting to sell was because I didn’t know, I was worried about how people would see me. And then I think I think it could have been a conversation that we had over the phone at one point. I think you mentioned like your like you mentioned something about, it’s okay to make mistakes or we. Yeah, exactly. And it’s okay to kind of let go if something’s not working out,

 

Erwin  

like my crypto stocks. I wonder if you’re talking about? Sorry,

 

Joseph  

no one I sold some crypto to back in February. Yeah. And so I think realising when I finally came to terms with it’s okay to kind of make them realise that you’ve maybe made a mistake. And that the important thing is how do you adapt from that mistake? How do you kind of manoeuvre when you have made a mistake. And so looking at the property, not really seen a time horizon when this renovation would be done already firing the contract or having nobody out there, I realised my money was spent better somewhere else. And so keeping it in what I would call a dead asset wasn’t really an option anymore. And so that’s when we kind of started the process of selling.

 

Erwin  

Thank goodness, you didn’t lose any money.

 

Tammy  

That’s what I was thinking.

 

Erwin  

It was tough. It’s tough when you’re losing money in real estate, because it’s leveraged.

 

Joseph  

I can. Well, that was that was, I think that was the biggest fear. I mean, we’ve had the conversation, I think I’ve had conversation with both you guys about that particular situation we had went to sell it and then two days was coming down and market was, at the point when we were selling it was beginning of March, we just have that huge run with February, I had sold it at a premium price off market was gonna make a good amount on it wasn’t really upset about it a day before we closed, he put a lien for basically the full price of the contract that I have already paid him 50% for. And so that kibosh the deal. And for the next kind of three months, I proceeded to hold the property while the market was falling God. And we did some legal manoeuvres to be able to sell the property. And then luckily, the same buyer was still interested in buying it. And I said, I’m only selling it to you if we’re selling it for the same price. And they said that’s not a problem. So I lost a little bit in the holding costs. And then they got a realtor involved to make sure that they were secured. So I lost more than I would have gained if I had sold it back in February. But all in all, it wasn’t a loss.

 

Erwin  

Well, how would you rate your stress on

 

Joseph  

this deal? Oh, very high. Very, very, very high. I think for about three to four? No, probably since October from August to April of this year. I don’t think I slept very well down. Yeah, that was a long time. I’m doing I’m doing a lot better now. But so that’s all it matters.

 

Erwin  

And how far was it the drive?

 

Joseph  

Average out four hours, four hours each way? Okay. Depends on how you drive really like three. But if you stop for lunch and stuff like that three each way. Oh, mine the drive. I think there’s there’s a lot of young people here. But if you have kids, and you’re doing this, but I think there’s a lot of young people who don’t have a lot that they’ve saved up where their time is not worth as much. And that drive may be worth it for them to go out and buy a cash flowing asset. Because they may not be able to afford anything in the GTA and I think that’s fine. I just think you need to approach certain areas with certain strategies, you

 

Erwin  

can just partner with you. They don’t have to do everything themselves. That’s fair. Yeah. This this whole thing, like people like opposed to partnering, because I’m like, I’ve told I’ve told him to the family, you know, before the pandemic, for example, I was like, I have like cousins, so their brothers and like, you know, you too can buy like a 4000 square foot house for like under 3 million, versus you’re both gonna go spend about 1.5 and have way less square footage.

 

Joseph  

I think a lot of people like the pride of ownership, especially something is just there’s

 

Erwin  

I have a small ego some days. Money has been cheap. Yeah, I have no limit.

 

Joseph  

I would agree with that.

 

Erwin  

So it’s actually been it’s been in the news lately. Really? How bad friends are for example, Well, that’s why the only way for an average Canadian to afford rent is to share two bedroom with somebody. Yeah, for sure two bedroom apartment someone so I don’t know understand to me there’s no difference why two people when co venture on a property, right for me, I’d rather co venture with someone and buying like Hamilton an hour away versus four hours away. Right? And then I can divide the work down the middle. It doesn’t have to be Hamilton, it can be Oshawa, it can be Barry, whatever, right? My point is, I don’t wanna drive over an hour. And again, if I partner with someone, we can split up the work, you do the maintenance, I’ll deal with the tenant type stuff. You know, I mean, that kind of division. We don’t see that among our clients. You’re typically married couples, where one partner deals with a tenant that one deals with the tools and the maintenance. Right. So I don’t see why two people who aren’t married can’t do that.

 

Joseph  

I would agree. I don’t have anything to add to that. I think you’ve said it. Well,

 

Erwin  

wow. time you see something you

 

Tammy  

JV with Joe? No, it’s true, though. It’s it? No, it is good. It is good JV with Joe

 

Joseph  

coined a new term. To get

 

Tammy  

into the market, though there is a lot of people or maybe that you’re established or maybe some people can get on title. Some people can’t like it is a good good way to get in the market for a lot of people. No 101 was a JV as well.

 

Erwin  

And we have clients like just buddies who got together and bought a house

 

Tammy  

and mobile JV later, I mean, but what’s wrong with JV in first two, right? Yeah,

 

Erwin  

as long as our hard working people, like your hard working folks and hard working people,

 

Joseph  

I think it also comes down to what is both parties bring to the table, and like sometimes just the typical money, right, like the money partner and the working partner or the active partner, that relationship works, but sometimes you also need like, it depends on the size of the deal and the type of deal, like to active partners can be just as beneficial. But yeah, I see no issues with partnering. I’m actively kind of bringing on partners and looking for partners and and speaking with people about partnerships all the time. Yeah.

 

Erwin  

So the separate properties having a headache.

 

Joseph  

Yeah, your first one went well, the second one didn’t go so well. Okay, and you’re keeping the first one. It’s I’m keeping it there for now. A cash flow is fine. I don’t have any headaches. I haven’t driven there in six months.

 

Erwin  

Is it still there?

 

Joseph  

It’s it’s yes, it’s still there. So it’s just if I ever need to liquidate something, it’ll likely be the first one that goes.

 

Erwin  

So this is February 2022. Would you would you liquidate it, or do you keep it

 

Joseph  

if I knew what the market would have done right now? Yeah, I probably would have liquidated I kind of I sold in February not because the market was at a high I’d like to say that I like had enough foresight to say Oh, now’s a great time to sell. The reality is I was just fed up with property and I sold and I just got lucky enough that I sold when the market was at a high I’m surprised the

 

Erwin  

buyer took it still.

 

Joseph  

I will not comment I don’t know who’s listening. Yes. 17 people I know who includes that.

 

Erwin  

Give me your name is not that Google because there’s there’s enough stanzas out there that that makes you heartless

 

Joseph  

that a compliment or is that

 

Erwin  

just have names like You’re like I say I met you in like a thing. Like when I go to LinkedIn like Joe Costanza, like, damn, there’s like 40 of you in Toronto. Like, which one that I talked to? Like that. So your current deal wasn’t the easiest. But that’s a good point. There’s a good story to that is not easy deals are often the best deals. We might bless the last ugly house I bought mouldy basement contractors wouldn’t go in because there’s cockroaches. Right? I asbestos knob and two, I can I’m just shocked the bank lent me money on it.

 

Joseph  

Well, you did bank finance loan on that. I gotta

 

Erwin  

be lender. The lender called me the day before closings. Like did you know you have asbestos? Did you know you have knob and tube wiring? Right? Yeah, I did this for a living. I can’t believe I still got my mortgage. Because most lenders will not touch that stuff. Really? I didn’t know that. My basement was leaking.

 

Joseph  

Well, yes, I was in that basement. I know. Yes. I did the drawings for you on that on that deal.

 

Erwin  

Wait, did your mother say something about that house?

 

Joseph  

My mother? Well, yes.

 

Tammy  

She was faith in her when? Yeah.

 

Joseph  

Because I think I FaceTimed her while I was in the basement with an stupid made no mask on black mould on the wall.

 

Erwin  

Just work really.

 

Joseph  

They painted over it. It was pretty bad. It was pretty good. Yeah, it was pretty bad. I probably shouldn’t have been down there. But I was down there anyway. I’ll find her in 20 years.

 

Erwin  

But it wasn’t pretty was it? No, it was not pretty. Your mom would never invest in it.

 

Joseph  

Ah Uh, maybe now, but not then. She’s come around. She’s

 

Tammy  

coming around John’s place. I think

 

Joseph  

she’s I really pushed your boundaries. Yes.

 

Erwin  

But yeah, I had to deal with a lot of crap as a student rental too. So the deal with that student rental through the pandemic tends bail. Right. I think too much five to seven times bailed. Students. Yeah, yeah. Now it’s all turned around. Because I’m finding out that rents are now six $700 a room?

 

Joseph  

Yeah. Well, yeah. That’s it’s a it’s also a killer area like you are right beside this.

 

Erwin  

Yeah. But it wasn’t easy. No, it was easy holding this whole time. But I paid 400 grand for it. Now. I’ll be in humongous demand come next rental cycle. Right. Yeah. Because I hear like, even made the news. How little rental supply there is for students. Right. So payback time. But yeah, hard houses are not easy to finance. You didn’t want to go in the basement. Your mother would probably not want to go to my basement if she knew. I think I took my deal over yours, though, because I didn’t have a tenant.

 

Joseph  

Yeah, I would have taken your deal over mine to the I think mine was a little bit of a headache. Yeah, from day

 

Tammy  

one. Irwin tried to buy it off of you. Half a

 

Joseph  

dozen $5,000. So a big commitment

 

Erwin  

to excuse me, came down when I heard there was issues that the tenant,

 

Tammy  

no, no, this was that was a score. We just for the record, we do call it John’s place. So if anyone’s hears this, or if you go on Joe’s Instagram, it’s John’s Thomas the tenant. Okay, so what have we

 

Joseph  

purchased the property back in? November is when we closed or when we when we offered on it. We’ve got an accepted offer. We’re supposed to close in January, November 2020 2021. We’re supposed to close who you’re supposed to close in January. And they were kind of going through

 

Erwin  

Washington will bring us back a little bit. Okay. The host previously failed to sell that or not. Okay, so

 

Joseph  

I had found this property listed on the MLS back in November of 2020. I went to go see it. I offered off market on it, when they taken it off their offer Express and that fell through. And then every kind of two or three months. Why did it feel to sell the market was on fire? They were they were trying to sell it for 850. Back when it was probably worth like 600

 

Erwin  

or 600. It was that bad? Well, it was

 

Joseph  

duplexes at the time, were selling for around 800. So they were trying to sell it as a legal duplex, which it was at 800. The problem is it needed 200 to 300 Depending on how much rental you wanted 200 to 300 of work. So no one’s gonna buy it for 800 or whatever they listed it I think it listed initially at like 850 At some point at one point. So I’d offered on it. Even when they’re asking when their offer fell through at 800 or whatever when they’re listing fell through at 800 I offered some really probably insulting offer at like 600 or 650. Obviously, that got the client and they ended up selling it back in or they ended up getting an accepted offer on it at 750 Back in a must have been mid mid 2021

 

Erwin  

Sorry, except to that how much at 750. And they didn’t take it and run this sale

 

Joseph  

fell through. So I was checking in on this property probably every two months I would call the realtor at some point I ended up getting the owner’s number and I was calling either the realtor or the owner like every two months, just like what’s going on with your house are you guys selling and then for a little while I kind of went off market and I thought okay, so they they told me that it sold it must have closed and now it’s done. So I didn’t really think anything up but then I drive past the property every time it was a shitshow so I really wanted to see what they were doing with it just out of pure curiosity and the roof was absolutely mangled. And no one had done anything about the roof and this is like six months so it’s stuff growing on or whatever it was no like there was little holes in the roof. There’s holes in the roof when they when we ripped up the the ashphalt Yeah, there was like holes. I got pictures I’ll show you after there was like, very large loads, like, like soccer ball size holes in the like in the sheeting.

 

Erwin  

Oh my god. Yeah, you’re gonna need 50 for that. I know. A lot banks when finance that there’s pressure finds that

 

Joseph  

nobody found it. It was anyway, so yeah, so then I think I had reached out to them at one point because I’m like, Okay, this thing definitely has not sold yet. And this is must have been like October of 2021. And I got into kind of a little bit of a yelling match with the with the realtor. At which point I was like, Okay, I’m just getting a Tammy involves and no,

 

Tammy  

I’m gonna stop here and tell you what happened. Okay, you tried to do the deal without me. Just fine. Okay. You tried to do it? Yeah. But there was no what happened? was they were going to use one of their other realtors to represent you because they didn’t want the selling agent to represent both of you. So they said, I’ll bring in a realtor and you said, no, no, no, I have a realtor. I was only going this way if I was gonna get a deal, and No, you weren’t gonna have a Realtor you don’t know probably right. Yes. So you’re like, No, no, I’m gonna bring in my own realtor. So then I call him like, oh, so yeah, he kind of talked with Joe. And they’re like, yes. And that’s where we went. That’s how I came in. Yeah.

 

Joseph  

And then, as you call me, yeah. It wasn’t on market. So I figured I’m gonna try for a market sale. And they were actually just about to list it. They were just finalising some paperwork to get him out with a tenant tenant. And he was so close to being out. It was so yeah, it was really close to being out.

 

Erwin  

This was an unethical thing. He wasn’t when he got terrible tenant,

 

Joseph  

he did not take care of the place. I think the owner of the property didn’t take care of the place either. So between the two of them nothing was getting done

 

Tammy  

very very I mean, just that when the land when we found out the landlord tenant Board gave him a warning that if you do any of these the list of items, you’re gone and it’s instant, and it was smoking in the property smoking on the property, obviously not paying rent it refusing the seller, the owner landlord to come to its own property. And swearing at people on the like, there was a massive list that he couldn’t even like look sideways. Yeah, I think

 

Erwin  

the yellow people on his lawn you don’t get up? Yeah.

 

Joseph  

Well, no, it’s not yellow people on his lawn. It was yellow people who are trying to get into the property to view the property.

 

Tammy  

Not to mention it a bat by the door. Yeah.

 

Joseph  

Anyway, so.

 

Tammy  

So we did agree on bacon possession? Yes. Well, it’s too close in January.

 

Joseph  

We’re supposed to close in January. He didn’t. He didn’t leave. They extended the the court hearing date to

 

Erwin  

did he

 

Tammy  

agreed to leave? Did he not even agree, but he was supposed to leave a certain date because he instantly screwed up off the list, obviously. And

 

Joseph  

the court had said, you’re out by January 6, January 7, so

 

Erwin  

we slipped up. So now they have an order, you have to leave.

 

Tammy  

And we found one judge that said, Okay, we’ll hear you out again, we’re going to extend it. And so we extended our

 

Joseph  

and then yeah, so then the closing date, the closing date got extended to right after their next hearing, because we were like, Oh, for sure. He’s gonna get kicked out and already been kicked out before. Like, he’s already broken all the rules that he said he wasn’t gonna break and he’s not paying his rent. So I mean, like, add all that together. They gotta, they gotta let them they gotta let him go. The court hearing finishes, they’re like, Okay, we’re gonna issue the paperwork for you to leave. We’ll just find that we’re gonna find a date that works for us, and we’ll get back to you. So I go, okay, February, I’m counting 60 days is what they give you. Like most of

 

Erwin  

paralegal involved, too. Yeah, there’s legal. There’s been done on the

 

Joseph  

on both sides. Yeah. And so I’m like, we’re talking, I’m like, Okay, well, 60 days from the date that he’s supposed to close. Okay, let’s push the closing date. 60 days out, they have the according to the LT landlord tenant boards website, maybe I’m wrong, but they need to find hearing a decision in 60 days. So let’s go 60 days. So 60 days comes in passes. And we’re supposed to close on the property. And he’s still there. And word from nobody’s told us anything, which, you know, I didn’t expect anyone to tell us anything, because we are not are not the owners. But still, like, I would like to know kind of what’s going on with the process, couldn’t get in touch with anyone’s lawyer to figure out what was going on with the process. No one wants to get involved. Closing Date comes again, closing it comes again. And so we had a conversation, we wanted to extend again, and we had a conversation with the seller who like if you’re not going to sell on, if you’re not going to close on this place with the guy in there, then we’re just cancelled, we’re off of the deal. And we’re just going to sell another property.

 

Erwin  

So another property of theirs.

 

Tammy  

They needed to Yeah, they needed something. Yeah. And this was the one they were going to sell. And since it obviously was kept, you know, in for a long, longer, longer, longer. They finally said no, either you’re gonna have to take it with them or the deal is dead, because according to our offer, it allowed us to extend, extend, extend, and then somebody extends extensions. And then, you know, that was at yet agree. And they said, No, that’s enough. So he had to come up to the second possession. Yeah, big concession. Exactly. So he had to make a decision.

 

Joseph  

I mean, I had to make the decision at the time. And the reality was when we close on the property, we had it under contract for 745. And it was probably worth in the nines, really low nines. Well, you

 

Tammy  

have to figure at this point, the markets going up and up and they know that too, right?

 

Erwin  

Oh, sorry. What did you get accepted for?

 

Joseph  

We got to sell it for 745. Okay, legal duplex Sorry,

 

Tammy  

sorry, but it’s worth noting that that was October November 2021. Things are selling for like a million now. We’re into the early 2022 and everything selling for exactly

 

Joseph  

yeah, like that. That property just as it was with the shitshow that it was probably should have sold for around 900 When we bought

 

Tammy  

and sold it with that tenant made money because the market was going nuts. Do you remember that a soccer ball size holes in the roof? You can see that you could? Well, it was Yeah, from the street. We had a home inspection. Yeah, like we

 

Joseph  

knew what we were we were on the roof that had the holes in it. On the roof, just in step in the halls. So Joe ticket, yes. So I decided that we were going to close on close with him in it. And then the next day, and then the potential cut bait decided to fish. Yes, exactly. And then proceed to the next three months of me dealing with the landlord tenant board trying to get him out. And still landlord 10 board had not given us an issue had not given us a date. And so 120 days pass, and they finally give us a date. That’s a month from then by that point I had already signed with him and then 11 saying where I needed to start construction at some point the market was kind of doing the dip, and I needed to figure out okay, what are we doing with this place? Yes. So we did a little bit of cash for keys with the property to get them out. And then we started renovations in July.

 

Tammy  

So Joe did, did we try

 

Joseph  

catch Ricky’s earlier? No, nobody tried to catch it wasn’t it wasn’t I was waiting. I’m like, okay,

 

Erwin  

16 on the place.

 

Joseph  

I offered. I was like, Hey, listen, we’ll like we’ll, we’ll pay a little bit more if they do Cash for Keys. I got no problem. They’re like, No, no, no, we’re already in the legal process. We shouldn’t we should have them out soon. Obviously, closing day comes, he’s not out.

 

Tammy  

So even you took ownership on closing date, if Joe’s automatically offering Cash for Keys, except the landlord tenant board, again, was still so close to happening and felt like any day.

 

Joseph  

Every time I call them. They know any day now we’re gonna get a notice. And then two months go by I’m like, I can’t wait anymore. This is too much.

 

Tammy  

He did the sign the papers did the Cash for Keys. Everyone’s agreeing. He’s ready. That day comes and guess what the notice comes in that Oh, yeah. He’s he’s got to move out.

 

Joseph  

The day before he was supposed to move out. They gave me a notice saying he needs to move out. And it gave the day in two days. I’m like, I’m sorry. Yeah. saved you. $5,000. But

 

Erwin  

whatever. And how much in rent arrears did you have?

 

Joseph  

How much of what your rent rent? Did? You actually paid rent every single month, every single since I took over? He paid rent every month to me. So just give him

 

Erwin  

his money back? Basically.

 

Joseph  

Yeah, so it didn’t really cost us anything. But it costs us time, which in some respects may actually be more valuable.

 

Erwin  

So I haven’t heard how things are going now. So that was when when was that? What was the Cash for Keys? When did he move out? July? July 1. Oh, just last month?

 

Tammy  

It’s almost been Yeah. Almost a month. It’s

 

Joseph  

been it’s almost been two months of renovations. Yeah. Six weeks? Yeah. How’s it going? It’s going well, it’s gone. Well, the permits sorry, this

 

Erwin  

isn’t a problem. Number five properties you have now five? Yeah,

 

Joseph  

that’s four in Hamilton, four and Hamilton. Right now.

 

Erwin  

Those are the ones that are 20 years old.

 

Joseph  

Yes, 2828 still feels like I’m moving slow, can

 

Erwin  

turn on the social media. Go talk to your friends and find out how much they’re worth how many houses they

 

Joseph  

have. That’s not the point. That’s the expectations that I put on myself. Okay. Sure. Anyway, the renovation is going well.

 

Erwin  

But we wasn’t renovation plan. What are you doing so

 

Joseph  

initially, so for the listeners, it’s a one and a half storey house with a back split attached in the rear with a 400 square foot garage. So there’s about massive there’s about 3500 square feet of living space combined.

 

Erwin  

Oh my god, it’s

 

Joseph  

huge. It’s pretty large. Like the back unit is about, like 1500 and the front one and a half story is probably about maybe it was probably less than 3500 Sorry, it’s more like it’s more like 3000 It’s a probably another 1500 for the front’s we bring into my house. Garage. And then yeah, and then and then the garage as well.

 

Tammy  

So the front back duplex, not very typical up and down.

 

Joseph  

Yeah, it’s a front back duplex. The first the front unit is basically like your typical one and a half storey house like that typical kind of like century home kind of

 

Tammy  

main floor upstairs and still has the basement as well that

 

Joseph  

and then the back is kind of like a like a back split it’s basically it’s designed very similar to the back split there’s a basement to that back unit as well as kind of a second floor and then like a half level Okay,

 

Erwin  

so when you take possession once the way if you took possession tenants out, what would you rent this place out for? As is so you didn’t lift a finger?

 

Joseph  

Oh god. Oh, no, I wouldn’t

 

Erwin  

tend to take

 

Joseph  

they they took real advantage of this place. There was holes in walls. There was yeah, this

 

Erwin  

is bad. You don’t think okay, money compensates for everything. Someone would take it for like $300 a month.

 

Joseph  

Okay, well, we’re like, basically don’t consider that. Anything under 1000. Just entertain me. Okay,

 

Erwin  

what would the what the one and a half story ran for was the back split run for?

 

Joseph  

What would the one and a half so the garage you can rent? Right now currently there’s tenants in the back unit. They’re paying 1800 Plus utilities. You filled it? No, there were already they were already there. Oh, and 1800 plus future? Fully tenant. No, they did not get along with Okay,

 

Erwin  

so that’s probably probably the reason for the order as well. Yes. Okay.

 

Joseph  

But that that back

 

Erwin  

unit, that’s really good rent 1800.

 

Joseph  

It’s not when you consider what it could rent for I know. It could probably rent for around 20 to 2300. And that, and they’re not, they’re also using the garage, which I could probably rent for an extra 200. So they’re about six to 700. under market value. We’re keeping them because like you said, 800 1800 is not that bad. Right? The reality is, I lose about $700 of cash flow every month from potential cash, cash for that we’re not we’re not doing anything to earn.

 

Erwin  

One and a half storey rented out, as is John’s place. How much food costs that you could have gotten 1800 For just cleaning it up?

 

Joseph  

Maybe 1800 Probably for that front unit if we want it to occur.

 

Tammy  

That’s not bad. Because it is a full house. If it’s cleaned up. It’s basically full house. I

 

Joseph  

mean, full houses in Hamilton are renting for like 3000. Right. Okay, what’s the plan? So the initial plan was finished the basement and finished the main unit.

 

Tammy  

Can I just say Joe’s initial plan was an initial plan. Remember, you were all over the place? Emotional, legal basement Hold on, or Airbnb, maybe? Well, you’re right, we had

 

Joseph  

a submariner dealing with this, I was the SA there was all everything simultaneously. The initial plan was to renovate to fix to the basement, then do the main floor of the everything on the first house, the basement of the first of the main house in the front, and then do a full kind of cosmetic gut of the front unit. First and second floor.

 

Erwin  

We’re going to turn that into a duplex. We’re

 

Joseph  

essentially doing a legal triplex on the mountain.

 

Erwin  

Do we need to edit this out? Yes.

 

Joseph  

Sorry, sorry, we’re gonna do it all legal. But

 

Tammy  

otherwise, he was gonna do like proper, proper everything, everything’s gonna do stuff. But yeah, like underpin it to where we’re

 

Joseph  

going to lower the floor and everything saying, this is the thing is my my perspective is, I don’t want to ever have a rental, what I wouldn’t live in. That’s my golden rule for me. So if I wouldn’t live in it, I don’t want anyone else living it. I know, that’s probably not the best, like investment advice, because you can make money on things that you wouldn’t live in. And you can make really good money doing that.

 

Erwin  

Well, this is a state. This is clarify, though, when I was 22 years, I’d much different standards than I do now. So I sometimes I’ll speak to the 22 year old would you live here.

 

Joseph  

But still, so it was it’s a six foot five basement, and I wanted to drop it down to seven. And I don’t have the numbers on me. But like I rationalised that somehow at some point. And it kind of made sense in my head. The numbers, numbers got a little out of hand at some point, which is partially the reason we’re not doing it right now. So you didn’t actually do it. We’re so we’re not doing the basement anymore. And the reason we’re not doing the basement is with the market the way it is, I want the renovation to go quickly. I want to be in and out of this place. I don’t want like if we had the same market that we had back last year where everything was just moving. Yeah, sure, I just do the basement because the reality is from going to hold it with the appreciation that we are seeing in the market last year. Even if renovation goes slightly over budget, the market is gonna save me I know that’s horrible advice. But that’s the reality for a lot of investors last year or the even in 2020 the market save them for a lot of things, the market wasn’t really in our favour here. So the plan was be in and out of this property and get our money back. And then we will look at doing those renovations later down the line. As long as it’s stabilised and cash flows and it covers all expenses then in the future we can look to kind of increase our position and the property and that’s kind of it we knew buying the property that it would be an evolving kind of property as itself you don’t need to do all all the work phase one in phases every year or probably in like two years we’ll do that back unit kind of slowly kind of do what we need to do. We also found out that we actually can’t do the basement until that back units on because there’s some electrical wiring that needs to get redone in that place to run more power to the basement. So the reality is we would have to do the whole house if we were doing the basement so it just financially didn’t make sense. So we just settled for just doing a cosmetic on the main floor, which came out to be about 100,000 When everything included that the

 

Tammy  

front main and upper main and upstairs Yeah,

 

Erwin  

so basically like cosmetic.

 

Joseph  

Yeah, that’s just cool. I’m well we did we opened up structural wall we did a little bit more than just cosmetic.

 

Tammy  

So I needed a lot higher standards than I do. Yeah. shows live in there. But

 

Joseph  

very small when we’re in there without the wall. Yeah, no, you haven’t seen it with the wall

 

Tammy  

guy. I know we’re gonna come you know what everyone we should go by

 

Erwin  

go yeah, we’ll check it out. For me as it progresses in the market with historically high rents. I don’t need to do too much.

 

Tammy  

Well, we should do in the day two and get it approved with the tenants for a visit just so we can see that back unit because it’s really unique how it circles around and the space involved. It’d be nice to see the whole thing not just the front.

 

Joseph  

Yeah, yeah. Yeah, she’s sure she’s going. You let me know when

 

Tammy  

it’s John’s place. Remember John’s places?

 

Erwin  

So what’s the rent gonna be on this place? So you spent 100 grand spent 100 grand

 

Joseph  

the rents right now I’m projecting you can correct me if I’m if my numbers are wrong, but I’m projecting around 2600 to 2700 for that, just for that front unit, because it’s basically the full house.

 

Tammy  

You’re gonna be good there at least. Yeah.

 

Erwin  

Yeah, we’re seeing we’re seeing like whole semis go for like 32 Yeah, you’re

 

Tammy  

gonna get probably close to the three could be could be three just because

 

Joseph  

I did my numbers. I’m very conservative with my numbers. I do all my numbers. I’m 20. Never guess right? I did all my numbers at 2500. So anything more than 2500 is gravy for me.

 

Tammy  

My my I my rental is a one and a half story as well. I have four bedrooms, two bathrooms, and I put tenants in last year getting 25 Friends gone up. So yeah, you’re definitely going to be at least at the numbers you just said at minimum. So I do like to run my numbers conservatively too. But when the time comes to actually rent it. Yeah, check in again. Breathing

 

Erwin  

stretch. 3000. Stretch, stretch. Over 3000 My friend Christians successful guys message me here. You put up you stretched his one bedroom? Yeah. 2200 for a one bedroom

 

Joseph  

probably get free with the garage. Garage. I think not

 

Tammy  

even and you know what else? You’ve done a lot of landscaping outside which I noticed which is huge to me. You did or your mom’s?

 

Joseph  

Mom, I like to I like to put a little I like, no, no. I like to put a little spin on every property that I I like to put a little bit of work into everything that I own that within reason.

 

Erwin  

I throw a bunch. Yeah, I

 

Joseph  

don’t think it’s the best financial advice for anyone like investment advice, but like, I do a little bit of myself.

 

Erwin  

I tried to kill the vegetation on my other property.

 

Joseph  

It looks great. I think it looks good, right? Yeah, it does. I killed all the vegetation on my other places through the art, this will probably all died as well. But

 

Erwin  

apologies the listener this sounds very dramatic. How does this compare to your other three other properties in Hamilton, or any of this this dramatic?

 

Joseph  

No, no, they

 

Erwin  

were all pretty straightforward, pretty boring duplexes. Yeah, I know that didn’t feel boring to you at the time, because I know you were sleeping in them and renovating and resolve. So I know it feels tough. But looking back at that compared to what you’re doing now,

 

Joseph  

I would not I wouldn’t 100% would not have been able to do what I was doing now, dealing with the stress associated with it. I did definitely grow through the process. And I think I mean, like my purchases have gotten gone from like, basically doing no renovations to a little bit of renovations to a full gut to now dealing with

 

Erwin  

the first property. You did a whole basement suite. Not really, really it was

 

Joseph  

already partially done. Okay. Right. And then the second one, the basement was already done, but the upstairs needed a full guide. Yeah. And then the third one, okay. The whole place needed a full gut. That would have been your more more work one. Yeah. That was the that was the biggest shock was doing the third one. Yeah. And then the fourth one was just like property. Yeah, John’s place was just like doing the tenants and then dealing with all the other crap and then doing a full guide then let’s

 

Tammy  

just add that the third property with all the surprises and the extra work you needed to do and all the gut but then when we got a foreign though, what you refight for he was like, it was worth it. Oh, yes. Different. It’s very worth it.

 

Erwin  

So what would you say the beginner so for example, I see a lot of courses out there teach to go after your John’s house. Basically, they teach that look for the off market. Look for the complete disaster soccer ball size holes in the roof. The Vanquish in my mind, when you think a beginner should take something on tape or something like that on?

 

Joseph  

I think you need a baby step your way. You can’t like at some point you need to jump in. But I think you need to kind of take your time to get to a certain point. And not necessarily sure if that because I can tell you from my experience, if I took on John’s place when I first started, I probably would have been turned off from the whole process.

 

Erwin  

It shouldn’t be 5k It would have I

 

Joseph  

could have made 5k. So I’d say no, I think like you need to kind of build up and get I mean, I usually wouldn’t recommend a turnkey property per se. But I think like even if you want us to do that turnkey route would be a good way to kind of get your feet wet with that in terms of buying a property that needs a little bit work, maybe find something that needs a small cosmetic workup rather than a full, a full gut. Right? I think of the comfort level, at the end of the day,

 

Erwin  

I think of a scuba diving analogy, when you scuba dive as a beginner to go to take any advanced course, they only allow you to do one at a time. So for example, you see you’re a recreational scuba diver. Now you want to do what’s called penetration, you’re gonna go and you’re an enter a wreck, right? You can enter a wreck, what you cannot do is do that at night, because Nate is a different advanced level diver. So you can only do one thing at a time. So take real estate investment properties. Dealing with tenants is one skill set risk factor. Yeah, dealing with renovations and contractors, another risk factor, dealing with a major renovation, where you need permits, and you have mould and knob and tube wiring, asbestos, another level, right? Dealing with the LTB situation, another level. So I think to each their own, they have to decide what level of risk you want to do whatever stage in life and you are on a stage investor, you are just imagining, like, I know that this was stressful for you and your family.

 

Joseph  

Yes, for sure.

 

Tammy  

You know, and I just want to add that I agree to that. I do think it’s, it’s nice. And it’s that nice the steps that you took building that up, and it’s nice for people, but we also have a lot of new investors that come to us wanting to do, let’s say, a duplex conversion. And that’s a really big project as well. So

 

Erwin  

that’s a vanilla one vacant house, good bones,

 

Tammy  

you know, and all kinds of, we’ve seen all kinds of things that can come up and so on. And everyone’s a little different on how they roll with stuff. But again, going back to trying to have that good team around you. And I don’t just mean me, and I don’t just mean you know, that all does make a really big difference. Because new investors, if you’re just gonna start out Yeah, it is nice to have that smaller project first, but at the same time, it’s not so scary when you have a bigger one if you have the right team to so it really kind of depends on what you’ve, you know, surround yourself with and, and how you deal with things. And we all learn that from each other. Like I always talk about James on our team, he can have things off his back, and I’m like, nope, oh, my goodness, I’m not sleeping, I can’t can’t eat it. You know, we’re all a little different, how we handle it, but trying to learn from each other and doing the best. We actually

 

Erwin  

had John’s house and you had your surgery team. Yeah. You want to wash your shirt.

 

Joseph  

But I think I think taking steps is not a bad thing. And I think I’m more took them out of necessity. I didn’t have the money. When I started to get into something that needed a full guide. At least I didn’t know how to find the money. All the money. Yes. Well, I wasn’t doing all myself. But yeah, I did a lot of it myself.

 

Erwin  

The stuff you didn’t need a licence for Yes. To do an electrical. Probably the tiling drywall.

 

Joseph  

I did. Yeah. And but like I did it more because I felt I was we were looking for those properties more because I couldn’t afford a profit entity to forgot. And I didn’t know at the time, I was too inexperienced to know that I could just go and find the money or borrow the money to do this work. Right. So I’m just looking at how much money do I have? What’s the renovation that needs to get done? Like I remember when we bought red Street, the first property that I own, like, coming to closing I was like, I actually don’t even have enough money to close on this place. Considering all the closing costs.

 

Tammy  

Is that the when you call me you’re like, I have to call my No No. Money is the one yes, that is. But then you you worked

 

Erwin  

out the neural comes through.

 

Joseph  

And then that did come on? Yeah, see? Yeah. So I think taking those steps were necessary for me because at the time learning through that experience and learning through kind of, like how to find money, how to borrow money, like I we bought the property, I didn’t even have the money to do the renovation. I was like, I’m just gonna rent it out. And we’ll deal with it at that point. And then the bank was like, Hey, do you want a $50,000 loan? I was like, Yeah, I’ll do that. Like that. Yeah, sure. And then we did that, like I was. So last minute, I was just like, I guess I’m doing the renovation now. It was just like, and then the rest is history. From there

 

Erwin  

funny how anything how things worked out. But you had all the answers from the beginning. When we met you when you were 24.

 

Joseph  

I think it was good for me though to not have the answers. Because it for no one he has all the answer. No, I know. But I’m saying what I’m saying is like

 

Erwin  

if a kid you’ll find out how many answers you do not have.

 

Joseph  

Try not postpone that right now. Not in I got too much Bill introduced filter for that stage of life.

 

Erwin  

You’ll be grateful when when you have your portfolio and then you have kids and you don’t have to worry about this stuff. Imagine having kids and then trying to build a portfolio. Yeah,

 

Tammy  

that’s crazy. I’ll never forget when when Joe and I first met and when we got the first property, and you were nervous, of course as you should be right and it’s I get it and and I remember saying to you, you’re 24 years old and saying, Do you know like we were closing your eyes? Oh my god, I can’t believe I can’t believe it. And I said Do you know how many people say I wish I started when I was 24 And you did it. You did that. You absolutely did that like this just so on

 

Erwin  

the record is our youngest Korean. I don’t really I Yeah, well, you do. Who’s you bumped up?

 

Joseph  

But whose wasn’t there somebody after me?

 

Tammy  

Well, somebody met Joe. I think they were 23. I was like, no. You’re waiting? No. They’re you know what they’re like most people, including myself who want to and talk about it and think about it, don’t do it. You did it.

 

Erwin  

There’s huge. Yeah.

 

Joseph  

I just do things and think about consequences later. I think that’s

 

Tammy  

gonna make some calls. No, getting. You did good. You did very well. Good for you.

 

Erwin  

Especially where we’re talking about rents and stuff. What are we seeing in the market for rents? Rents are our showings, up down? We’re in the middle of August. Yeah, I

 

Tammy  

was able to book this morning, went out with a client to see some houses had my pickings of 12 that I thought could possibly work, how to narrow down a little bit, we went to go see six houses this morning, very focused on one lot. It was yeah, it was an experienced investor, we were able to soak it all in. And we were able to narrow down the properties that also meet all the criteria for a garden suite. And that was just Hamilton. So it was great. So we got got to see quite a few and go from there.

 

Erwin  

I was like, compared to like, six months ago, oh, six months ago, they

 

Tammy  

would call I would even like go there’s one or two if you want, and I don’t think one’s really going to work. But we could show you

 

Joseph  

finding that a lot of people are now starting their search. I’m still people holding back a

 

Tammy  

lot of people holding back, but I am hearing a few people more calling me saying you know, Okay, we’re ready. Now we’re ready to get back in which is smart. Because right now is a really good time. You know, August 2022. Right? That’s right now is good time. I had a client yesterday, I called her up. I said, Hey, I just noticed this change on the listing we saw a month ago. And she’s like, let’s do it. weoffer done, you know, and we were able to get in and get it for a great price paid for 75. And well in for property recently. And but yeah, so we’re noticing that it’s a really good opportunity. We’re noticing a lot more, there’s certainly a lot more choices on the market, a lot less competition, a lot of houses sitting 3060 days, houses that are sitting there more ready to sell. So the house for example that we picked up yesterday was 525. We offered for 75. They had a couple other offers fell through so we went in firm they loved it took our price. So that’s what we’re seeing those kinds of changes. That because these houses check off boxes for us to check off, but this one in particular is already a duplex and welland on a 60 by 120 lot that houses all the way to the left, we’re looking into severance possibilities and the land and if not, we have a double car garage that we’re gonna turn to a garden suite, massive growth opportunity

 

Erwin  

for five. Okay, how much would have costed six months ago?

 

Tammy  

Well, it was listed six has been listed for a long time I’ve had my eyes on it, it was listed originally about 650. for probably about that long ago, I saw it go down to six. That’s when we saw it held off for a bit because I had a low paying tenant. I noticed the other day, I’m like, I just read that that tenants moving out. So that’s why we jumped on it because now it’s fully vacant and paid for 75 and went all the way up as key. That’s it exactly. Same as you

 

Erwin  

know, an argue that selling vacant is key as well as the seller if you want maximum money. Well, yeah.

 

Joseph  

But as a buyer, like the follow up, like if you’re, if you’re not following up with properties that like Why have you been surprised we’ve done it like all the time, I got my first deal the same way. The fourth deal the same, we’re just following up just be like, Hey, what did you guys sell? Would you guys sell for? All right? If they have sold and you don’t get it? And that’s fine. But like what did you guys sell for? Because I want to know, like, you know what, we have my own knowledge. So I’m going into next one, I can actually put a competitive offering. And we really

 

Tammy  

play the market because Joe and I have obviously been working together for years now. But in the market where houses were selling crazy prices were up the house that you’re talking about that you picked up was because I would talk to him about expired listings, I saw properties that are expired or sell properties that are cancelled, and so on. And these might be some opportunities down the road that we can take a look at that we’re not seeing so much in this market, because they’re actually on the market sitting that home. But before when that, you know, isn’t the case. And the only reason that house didn’t sell the way it did was because of that tenant. So another kudos for you saying listen, let’s let’s push let’s push the envelope here and then we’ll jump in and we’ll take it and take that risk a little bit

 

Joseph  

like even after like right now like we’re after this we’re gonna go see something of a showing we do we have showing and we’re gonna go look not because I don’t want to buy it at the at the price that the house is at right now. I don’t want to buy it. I don’t want to buy it at the price the house is now but yeah, it’s been sitting for 60 days. Yeah, so if they do a price reduction, I want to I want to be the first one that seen it already. So that if I want if I want to put an offer in already, and they say they dropped they go from 800 to 700. I’m just throwing ballpark numbers out there. I want to be the first one to put an offer firm at 700 Because I know I can buy it for 700 and I can do what I need to do for 700 Because I’ve already seen the place yeah So that’s, that’s the

 

Tammy  

most important part. I keep telling you, you got to get out. You got to see him. You got to see them. You got to see them. Because then once you have when an opportunity comes, you’re ready.

 

Joseph  

Yeah. I’m kind of at a waiting stage just kind of seeing what I’m doing. I’m pretty liquid right now. Just kind of waiting into nice. Yeah.

 

Erwin  

So you know, this conversation before? We’re 24 year old think about 20 year old you put so forget everything you think about you think about a 24 year old you would think Auntie so? So let me let me push that further. 24 year old you mean 20 year old you? You don’t know. 28 year old you’ve never met before? complete stranger you meet at a networking networking line? What would you think about a guy

 

Joseph  

28 Year 24 year old me would probably be pretty impressed. I don’t know if

 

Erwin  

because how much? I don’t always ask but I’ll ask you. How much is 20 year old you worth? Compared to 24? year old you

 

Joseph  

20? Well, six figures or seven figures? For sure. Millionaire?

 

Erwin  

Yeah, what would 24 year old you like holy cow, you have five properties are worth a million. And you only did in four years.

 

Joseph  

24 year old me would be probably be asking a lot more questions and trying to do the math in my head of how long I’d have to work to get to that point. And I think at 24 I was doing those numbers in my head, which made working for someone else not make sense. Which kind of started that trajectory. I don’t know if what 24 year old me

 

Erwin  

would think. But your 44 year old you’d be impressed by 20. Yeah, yeah. 100%.

 

Joseph  

I’m not impressed by myself, though. But

 

Erwin  

Are your parents impressed by you? I think I think so. Whatever your mother. Yeah, thank you. I’ll tell. I’ll tell her myself in this room.

 

Joseph  

You guys are friends. You guys talk all the time. On Instagram. On Facebook, like they have their own conversations. I’m

 

Erwin  

not gonna have a bunch of new Instagram followers. I’m gonna ask her after this. Are you proud of Joseph? She’s gonna say yes. That’s some other questions running out of time. Can you say your parents are retired?

 

Joseph  

Yes, they are retired. Now there.

 

Erwin  

And the former teachers, so they have very nice pensions. Yes, they do. And what do you think their retirement life would be with if they didn’t have those pensions?

 

Joseph  

I always thought because we were talking about this the other day. And so I asked them and don’t cool. Yeah, I did. I talked to them. My, my parents have always wanted to do something like this. Get involved in investing in real estate and stuff like that. And for the listeners, if we didn’t kind of mention on this podcast, I have two joint ventures with my parents. So that’s what I mean, when they say get involved. But I think from what they told me, they would still they would have started to invest, because the pain into your pension, although it’s great when you retire. When you add up all the money that they’ve paid into the pension, it’s actually really quite substantial. Right, which is why they’re able to retire now with the pension that they have. My parents are of the mindset that they think that they would have invested in something while they were working, instead of kind of putting their money away in the pension. Because for them the pension plan was the retirement plan. And so they didn’t have to worry about it. So they didn’t think about it, or they’re finding out now that the pension is not enough. The pension, is it? Yes, it is. But, but when you have a family that you’re still, like, kind of like dealing with and you have elderly people that you’re taking care of, and maybe those elderly people haven’t planned for their retirement. Right. things add up. Right. And it’s enough to have a good life. And but it’s not enough to have a what I would consider a fruitful tool to help us help other people Yes, to be able to help out people that yeah, that you love. It puts strain, there’s still there’s still money issues. Let’s have it that way. Right. It’s like the pension does doesn’t eliminate the money. Issues. Right. So my parents are of the mindset that they would have started investing earlier, if they didn’t have their pension. I don’t think they would have if you ask me, because my parents have been very risk averse their entire life. I think the only reason they started looking at investing is because mine invested my investments were going well. And I was showing that I was working hard at them. And I was at networking events every weekend, constantly reading up on things constantly looking at things. So I think the confidence they had in me was what got them into this. I don’t think they would have done the same thing. If they not if they were not paying into their pension. So long and short of it. I think that it probably wouldn’t have worked out very well for them if they had not planned if they hadn’t had a pension. Do you think you have any issues retiring? I don’t know. See this. What is retirement Of course you do wonder about everything. What is what is what is considered retirement? Like I think for a lot of like investors at retirement is just really entrepreneurship like being able to live all over the map live their life on their terms financially free. Right. Right. Like I look at you and like that looks like your life to me looks like retirement. I know you for you. It doesn’t look like retirement because it’s a lot of work. But you’re able to live life on your terms of doing what you want to do to some degree. Yes. All right, for me that that is the goal right now retirement where I put my feet up and not do anything. No plans.

 

Erwin  

If you want it to go by the age of 50. Do you think Yeah,

 

Joseph  

100%. But that’s is am I going to be satisfied with that? Is that the question?

 

Erwin  

Here’s one thing though. Do you lose any sleep? No, the idea of I don’t even be able to put up your feet and do nothing.

 

Joseph  

I have 50 I haven’t thought about it on me because

 

Erwin  

it’s not a worry. We were discussing before your mom’s gonna come summer 17. Next, I

 

Joseph  

will force her to come. Yes. September 17. Right. Next Saturday. Yeah, I’ll make her come.

 

Erwin  

Awesome. Because Tammy, we’re going to talk about what people are doing these days. It is funny, because I see all this fear stuff on social media. Like, there’s one lady who’s a broker, whatever she’s like, and what mind? Are you buying anything in today’s market? Message me if you are? Like, yeah, that’s view. We’re getting stuff we couldn’t get six months ago, we may not be able to get six from some experts six months from now. So we’ll talk about what what people are actually buying me. We’ll talk about what Joe bought today, at the September 17. i When meeting. Yeah, but yeah, we’re gonna just tell it like it is. I think the world is very scary. Right. But you know, we had to figure out how to navigate it. And then preferably profit from it. When talking about that, trimmer, 17. So you guys see you there, I will be there, I’m gonna be on your mom.

 

Joseph  

Do you have to invite her because I if she if I tell her to go, she will not go

 

Erwin  

to me will sign her book to see if she comes.

 

Joseph  

That’s it means a lot there.

 

Erwin  

Any final thoughts? Any final thoughts? Because we’re way over time.

 

Joseph  

I think a lot of young investors over the last year, and even now made a lot of decisions based on ego and based on and that ego kind of put them in situations where they’re over leveraged, and maybe they’re now kind of in tough situations.

 

Erwin  

I’ll add to that they’re following charismatic leaders who are no longer around

 

Joseph  

charismatic leaders who have probably liquidated most of their portfolios as well. And I think that people really need to step back and look at it from the long term perspective. Right? If you have to sell you have to sell that’s just the nature, right. But if you’re upset, because you may be down on the equity that you thought you would have had, or you may not be able to refinance for what you thought you would have had, like, you have to look at it from the long term perspective and long term perspective needs to be I’d say at least a minimum of five years, if not more, right? I

 

Erwin  

know that someone should, they should, if they’re gonna take advice from someone, they better be reading the economics, they better understand economics, because I predicted I predicted this year would be another 2017 Yeah, so if you knew God, this was your year was gonna be 2017 Are you really going hard? All right, in the early part of the year

 

Tammy  

I just want to add that we’ve been working together for a long time and I’m very proud of my son Joseph. We have an inside joke that I’m like his mom and yes old enough to be so but yeah, I think that no matter what age of anybody is going to be starting to get into real estate. You were smart that you said you know what I thought about this and I went for it and I’m doing it and a lot of people sit back and don’t always do that and you know, it’s proud of you for doing it. It’s obviously you know, young age is pretty impressive, but at any age getting into real estate is great but yeah, it’s been a pleasure working with you, Joe. We’re not done we’re going shopping today

 

Erwin  

amazing Marty come in use social media handles you guys want to share you guys got a book or something you’re coming up with

 

Tammy  

I have no book time I have a butcher Zito care if any chapter I know I didn’t even know I was so definitely going to take a look at this book. Thanks for free copywriter when you guys heard it here free copy

 

Erwin  

will cure insomnia. Social media handle

 

Joseph  

Yeah, they can follow me on Facebook or Instagram. Joseph Costanza for both Facebook and Instagram.

 

Erwin  

You lock that up or you’d have to compete for those those handles nothing. Just Joe Costanza. Joseph

 

Joseph  

Joseph Joseph Joseph Costanza, one full word on Instagram.

 

Erwin  

And you have a fat wallet just like George Wright died, voted sure

 

Joseph  

that I would not consider myself loaded but yes, sure. Pretty sure 24 year old you would consider 28 year old Yeah, probably but yeah. Oh my standards have changed.

 

Erwin  

Alright, well thank you guys for doing this. Thanks everyone. Good luck. Good luck in your property search

 

Joseph  

yes

 

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 forget the cash flow reduces your risk. The more you have, the more lumps 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 announced 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.

 

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**Transcripts are auto-generated.

 

Erwin  

Greetings everyone, real estate investors and stock investors, aka wealth hackers, as I like to call them, How’s your summer going? Best summer since 2019. I certainly help So Jerry and I are having a blast and have much to be grateful for one of our accounting clients AJ Callen and Manpreet Hendra superpower, a couple, I think, most know, AJ is retired engineer, and he went full time in real estate, and around the mid round, 2015 ish. And Manpreet is extremely popular real estate lawyer. She’s done some of our deals. We’ve referred her clients in the past. They are a super power couple, and they’re tearing things up in the multifamily space. No surprise there. Everyone in the spire knows them. They invited us to I don’t know why. They invited us as little plugs Jerry and I, my family and my kids. They invited us to search the shore, which is a private 500 property, summer resort, and they’re all vacation properties. So it’s a three season resort. None of these properties are winterized. Some of them are trailers, some of these are telling trailer park but a bit nicer a lot of these houses are quite nicely renovated, including AJ Manpreet, has quite nicely renovated their properties not quite on the beach, but we met on the beach, there is a beach within this rich summer resort for some fun in the sun, and a catered BBQ dinner back at their house, which is also within their resort. They’re celebrating their 10th anniversary, and party and style. Because it’s kind of like we’re partying like it’s 2019. With COVID restrictions a lot reduced, the entire thing is done outdoors. So that’s very nice. The day was awesome for many reasons other than of course hanging out doors. Cheering I get to meet and network with some movers and shakers from the keestrack community real estate investors with like as little as 40 doors to 400 doors and growing. Normally, I’m pretty socially awkward at these types of events, like regular, you know, regular like weddings and anniversary parties, where I don’t know anyone. But in this case, we all had real estate in common. So it was cool to mix. Family Fun. And kids are they’re going to beach and join the barbecue joints.

 

Erwin  

At this resort, and pretty much all the property owners own one or two golf carts. So my kids and I took a Jays actually is actually we took Manpreet Sacco cart, golf cart for a ride. It’s a bit nicer than your typical golf cart. Anyways, I posted on my Facebook, but it’s fun to combine family and fun and business and learning. Hopefully it wasn’t prying with all my questions. I asked a lot of these investors a lot of questions what they’re up to what are they seeing opportunity, as I’m naturally inquisitive, as you can probably tell from the show. And I firmly firmly believe that learning is through listening that speaking. That’s why you don’t see me speaking much and letting the people who know what they’re doing talk and hopefully I get invited Marquis buyer meetups, it was a lot of fun to learn a lot and so little time. Hopefully, you’re all out there maximising your summer in time, as time is your most precious resource. See how much folks are travelling these days to try and extract to continue? As I record Airbnb reports, their earnings today, it’s August 2, I imagine they’re going to kill it. And just from experience and talking to other Airbnb investors, they’re all pretty booked. So it sounds like yeah, travel travel is is hot these days and I expect the trend to continue. So how do real estate investors capitalise? Well today it just so happens we have an Airbnb expert who manages 100 doors for Airbnb use, and only owns one Wildling ones one of those properties. The other 99 are not owned by him. He manages them for other landlords. Avery actually recently bought a 250 acre property, he’s going to develop into a vacation resort, similar ideas where I was just talking about insurance in the shirts an example. But wait to hear the numbers. They will astound you. I’m at Avery birch at a conference in New Mexico just a few months ago, I was having real estate in common and being filled with seven figure entrepreneurs we connected right away. So we’ve been we’ve been texting we’ve been chatting our zoom booked with them I think tomorrow as well to just chat about some other business opportunities. But do you see what extent I go to to bring you my 17 listeners interesting guests. Every is definitely interesting. Ever since COVID, restrictions loosened. I’ve been enjoying going back to conferences and networking events with like minded investors and entrepreneurs. So if you’re looking for the next camp Miss conference, you’ll want to save the date, Saturday, November 12. All day for the wealth hacker conference live and in person, there’s no zoom option. There’s no virtual option near the airport with plenty of free parking, just go to www dot while hacker.ca for details. And also if you’re following me on social media or on my email list, you’ll see opportunities for no save money. We have promos running from time to time, but the truth about the conference pricing, the sooner you buy, the more you save, because the prices will just consistently go up until the date of the event. And if you’re one of those who likes the VIP experience, those tickets will sell out. So you probably wanna take advantage of cheaper prices and making sure you actually get a ticket so you avoid disappointment. We’ve hired speakers and sponsors for all the things that you need to be on the most efficient path to your financial goals. So you may have more freedom in your life, and how you spend your time to be building your own business or folio, to be retirement to be travel, whatever it is, you’re going to take away some have some takeaways from the conference wealth hacker.ca for details after interviewing Avery, maybe I’ll diversify into Airbnb a bit because with all the experience every shares today and operating 100 Airbnb s, we get an insider’s look into what which property style. For me, Airbnb offers the highest return, including what every avoids. And also he shares a story about how he identified properties to start managing for, especially for younger investors out there who don’t have a lot of capital. Again, Avery does not own the vast majority of the properties he manages. So he actually gives some tips on how he got started. And I don’t see why anyone and young hustler cannot do the same. Please enjoy the show. 

 

Erwin  

Hi Avery what’s keeping you busy these days. 

 

Avery  

What keeps me busy running a skid steer, building roads that are new property. 

 

Erwin  

Okay, I’m cityfolk explain what that means. 

 

Avery  

I am running this piece of equipments to build roads, because in 11 days, we have our grand opening for our adventure getaway resort. I don’t know if the video is clear, but got about 300 acres of wilderness and a lake and trying to get people in to see it. 

 

Erwin  

Alright, so the shameless plug, we do have a YouTube channel, folks. So if you want to see every we are doing this video, and Avery’s background is stunning. So check it out on our YouTube channel as well. So every what it is in your background. 

 

Avery  

So what we’re looking at behind me is I’m standing on the peak of a mountain overlooking a lake. And we’re looking at Raw Nova Scotian wilderness is about 40 minutes away from the main city and just untouched forest. What we’re trying to promote get people outdoors. 

 

Erwin  

Sounds amazing. Okay, so we are Canadians. Everybody that listens to this show. What’s the main city Halifax? What is it? 

 

Avery  

Yeah, we’re based out of Halifax, Nova Scotia. 

 

Erwin  

And I love Halifax. It’s funny, because like when talking to people, oh, we’re asking people about travel, like, Oh, I’m going to Nova Scotia. And like, that’s very much like leaving the country it’s like from from Ontario. It is it’s very different colours are totally different, like car stop for pedestrians. 

 

Avery  

That is it’s funny. We’re trained at a very young age to do that. And so that’s why it keeps working. 

 

Erwin  

Yeah. And so yeah. Again, I love Nova Scotia, I love vibe. So we got introduced through a mutual friend at a conference. So we both members of entrepreneurs organisation, for those who don’t know, just stating facts, and I hate to brag about anything, members of entrepreneurs organisation are required to have a seven figure business US dollars. So that’s a million dollars of revenue US per year. And every built the master pretty sizable, real estate business. Can you tell us more about it? 

 

Avery  

Absolutely. We’ve been operating for about five and a half years at this point. And over the course of this time, and through a pandemic, we’ve become the number one and the largest air b&b operator in Nova Scotia, in Atlantic Canada. And along the way, we’ve now grown to have 100 different properties under our management’s and we’ve got about a staff of 20 people that run the show. Now we’re growing into developing, which is why I’m standing on the peak of a mountain because it’s the only way to get cell service, but we’ve moved from managing and to creating. 

 

Erwin  

Okay, so we’ll get into the development because I want to get into it. But I want to know, folks understand how you would dig into managing 100 different properties. So you own all these properties. 

 

Avery  

We don’t own any of the properties. I’m one of them. Well, we just got one. Wonderful 100 Okay, got it. Yeah, no, we don’t own anything. We have either management contracts with the people who own the spaces, or we’ll take on commercial leases in the right zoned areas and turn them into essentially a boutique hotel. But we’re essentially catering to people that come into the city for seven days to 20 days. That’s our typical. 

 

Erwin  

So what’s gets gets covered in the news is often you know, we’re a tenant, like a regular tenant will sign a lease for the landlord. And then without the owner knowing the operating Airbnb, is that what you accomplished? You duped 100 homeowners into renting out to you and you convert them into Airbnb? 

 

Avery  

I wish I was that interesting. No. Yeah, I hear that story a lot. To get our very first property I would say I wasn’t very exact with what my intentions were. However, once So I had that one, I could point to it for all the ones to come and say, Look, we’re successful. This is what I plan to do, please let me do this. And then later, I’ve become very close friends with the person who gave us the very first property. So we’re all good. But yeah, it was a it was an interesting start. And then from there, we’re 100%. aboveboard, and landlords love us because we are just super, super diligent. So we treat their spaces, like nobody else does. sort of funny. 

 

Erwin  

What’s the terminology for this? There’s all these new terms like house hacking, for example, I only learned like two years ago. Is there a common term for this? 

 

Avery  

Yeah, in in the short term rental space called Master lease. So you Google that master lease, short term rentals, you can learn all sorts of things about it. Essentially, we get a lease furnish rent for a markup, we’re catering to clientele that need to be in for different things that a year. Interesting. 

 

Erwin  

Okay. Okay, just to put out a joke because it’s in my head, I have to say it is in real estate here. Master bedroom is no longer the master bedroom. So that’s the principal or the primary bedroom. So maybe, maybe you and I here, we’ll we’ll start the term primary lease. Funny, James, yeah, let’s do it. He managed to start promoting it. We have primary leases. And then you’ll coined the terms. 

 

Avery  

I sort of like that, like in pitch and saying, Yeah, we’re the primary lease holder. And here’s what we do. That’s great. Thank you probably like that. 

 

Erwin  

Yeah, it’s very politically correct. Because we’re inclusive on this show. The capitalist socialist, we love them all here. As much as him today. What is the typical property is their typical property? Are you talking about apartment buildings? 30 units are you talking about like single family homes that on you know, on Main Street, Halifax,

 

Avery  

Anything go? The only one that we don’t touch is condos. Some cities as we’ve looked to scale out our condo cities and some cities, our apartment cities, for instance, Calgary is primarily condos and Halifax is primarily apartments, they’re completely flipped of each other. So well touch apartments will touch single family will touch duplexes, basically anything but condos is everything. And they each have different things we looked at, and we’ve got tools that we’ve analysed, but every different property has a different strategy. And what we start seeing over time is that different properties, they only have only so many buckets that we fit into. So once we’ve developed the strategy for X, when we see x come along, again, we just rinse and repeat. Yeah, I think that’s a good answer to that. 

 

Erwin  

Tell me about Okay, so what would you do like a regular single family home? And a Suburban? Or actually, do you have a preference? Do you prefer a more urban setting, or suburban or rural, or you probably have a model for each, don’t you? 

 

Avery  

Yeah. It’s in different growth cycles of the business where the preference has changed. At this point. In our lifespan, we’re now looking for very unique combinations, something that we can truly put our mark on, and no one else can duplicate. In the past, we’ve really focused on commodity I think Airbnb fell into two buckets, commodity, and once or niche. So for a commodity, there’s no brand loyalty, except to Airbnb or VRBO, the platform, but that we’re a brand within a brand. There’s no loyalty for commodities, people need to be in the city, therefore, it will stay busy supply just always comes, it never stops. Unless there’s a pandemic, then we’re gonna get scrappy, or niches and once like what we’re building, it’s not a commodity. People don’t need to be here, they will wants to be here. Therefore, loyalty means people come back, because it’s unique. So there’s two buckets that we really look at. I don’t know how he got here. But fun fact, 

 

Erwin  

That’s just a good point. But the journey like you didn’t know what the journey would look like from the beginning. 

 

Avery  

No. One, like, let’s get five. Let’s get 25. Let’s get to 50. And then before you knew it, okay, I think the idea of what we’re doing now, 

 

Erwin  

Interesting, other than condos, is there any other property style that you don’t want, 

 

Avery  

There’s no style, it doesn’t work. It just comes down to working with your neighbours and the rules on the environment. So condos have the most challenging environments, therefore, we don’t even look at it. There’s so much opportunity that there’s no need for us to ever spend time there. You can you can run a condo it just takes extra work that we don’t want to do. 

 

Erwin  

Right? Yeah, cuz it’s, I live near Toronto. So it’s a big, it’s all condo people want to do it, but it’s because they want they can’t cashflow otherwise, but then your neighbours are not happy. 

 

Avery  

Yeah, it’s it’s extra work. Whereas in the park building, it goes through the management and they make a call. So when we come in and build a great relationship, we’re there won’t take. And we’re starting to get into a situation where we’ve asked to say we’ll take a whole floor. And that keeps it nice and separate versus an apartment building next door can be frustrating. So getting addition of doing a whole floor or a whole building, got it, the game changer total game changer, then we have complete oversight. And it’s really helps. 

 

Erwin  

That makes a lot of sense. Because for example, if I’m on a guy’s trip, and we know we’re going to be rowdy, we’ll ask the hotel when we book our rooms to be put in a section where no one else is. You’re trying to do the same thing you’re trying to isolate. That’s a great idea, right? I’m an empathetic person, right? When I want my sleep, I want my sleep, I don’t want to be disturbed. So please put us somewhere where we’re not going to bother anyone else. 

 

Avery  

And if you said that to us, we would know exactly where to put you. No one ever says that that’s actually very polite, 

 

Erwin  

At least a checkbox you put in like you’re putting in maybe one of your forms. We do you need a place where you can be loud. four acre property where the the nearest neighbours half a mile away. 

 

Avery  

Oh, I’m gonna add that’s incredible. You need to be loud. There’ll be a checkbox. 

 

Erwin  

And maybe just be a group that you like, oh, sorry, we have nothing for you. Quiet or network? It’s like a filter for like parties that you know. So you don’t want them? Actually, can you do cater for party? Do you have any options for that?

 

Avery  

We don’t, it’s not our bread and butter. And some of our research along the way. We found some really cool spaces that do. And they can charge a premium. The one that I’ll never forget, as I saw one in Montreal when we were looking at growth there. And it said party pad and, and like the walls were stainless steel and the rest was tile. It looked like at the end of each reservation, they came in with a friggin pressure washer. And just spray the whole place that like it like it was expensive. But it was like it was geared for parties. It’s like a bachelor pad place. I don’t know if Halifax would support that. Maybe just not a bread and butter. 

 

Erwin  

And then this seems like a pretty hot topic or hot button issue for people to who are avoiding doing short term rentals. And then also always, it often makes headlines as well. How do you prevent it? And when I’m trying to find party? I mean like excessive drinking, excessive substance abuse, excessive noise and property damage, of course. Yeah, sure, sure. But I’m talking about like, you know, five people having a beer watching hockey night in Canada. disrespecting disrespecting the state. Yeah, yeah, actually, as literally on the golf course. Yesterday, I was asked on the golf pro about they ever have problems. Yeah, we call the cops like, what are people doing? Excessive drinking, reckless driving with the golf carts. These things happen. 

 

Avery  

I think it depends on the location, we’re mostly focused around commodity. At this point, we’re just starting to build out niche. I suspect we’re gonna have more of that, now that we’re diving into that market. But if it was a golf course, that to me is not commodity that is niche. So probably more people have means that want to have parties will probably go versus on the commodity side. It’s because people need it, they’re not going on a party, they might be relocating moving into the country there temporarily as a student, very few people come to our spaces to just have a weekend away, only in peak season. But there’s two things that really keep parties are people who disrespect the space away price and minimum stay requirements. That was a game changer. When we’ve had we’ve had problems in the past. There’s got to be at least one. And it’s almost like clockwork, but I think we might have snapped the habit. It was like once once every year for four years in a row was a bagel, drug party. And we’d have to go and it’s like, it was like clockwork, yeah, there it is. All right, do the thing. We got used to it, but never any damage, very respectful people in Nova Scotia, they just wanted to have their time. However, they became loud and disruptive. So we had to kick them out. There’s rules around that if you wanted to dive into that subject, but you can get bring the police in, they’re not actually a tenant. So they’re a guest in your house means you can forcibly remove them, etc, etc. So there’s mitigation. But why that happens over and over and over was price. It was in the winter, when we were most eager to get bookings. And we lowered the floor too low. And that allowed it to be something attractive for let’s say, if the space was $100 You know, for people chip that is 25 bucks. So don’t be the lowest priced in the market. It’s not it’s just not 

 

Erwin  

That’s actually wonderful advice. 

 

Avery  

That’s the biggest takeaway. 

 

Erwin  

And that’s pretty much all you need to do the screen 

 

Avery  

Yeah, price in there’s other things too. Okay. Another one other big screening test. think that our managers use is if someone is reserving a space within our city limits, like if it says they’re from Halifax? Well, they better give us a good reason as to what they’re doing. And we’ll actually meet them on checking, just to make sure the argument or anybody else is not from Halifax. It’s all automated check in. You’re coming here from Arkansas, you know, you probably need to be here. But if you’re if you’re from Halifax for one weekend, and like, I don’t know, I don’t think we believe you. So that’s a very small percentage. But those those two things price and anyone in the local area meet on check in and if they’re carrying bottles of vodka, and we’ve actually caught people in the process and say, no, no, you’re not doing it, you can cancel and give your money back. Just leave. Okay. 

 

Erwin  

And there’s no recourse for them to like, leave like a one star review or something like that. 

 

Avery  

They know what they mean. Sure, anybody can do that. But in these scenarios, people know what they’re doing. They’re having a party, anything that people who have had party, other spaces have lived the best reviews because they felt that which is sort of funny. Hey, we know we were really ridiculous to deal with. So you did great five stars. 

 

Erwin  

Okay, I think there’s a Nova Scotia thing. I don’t think it’ll happen Ontario. 

 

Avery  

It’s East Coast hospitality. I think.

 

Erwin  

That’s hilarious. It’s funny, because I booked an Airbnb for Ottawa recently. And I know I understand their concern. So they ask the audio in town for like, I’m here. I’m coming from from Toronto, with my living staying with my wife, my videographer, and we’re here for business, taking some meetings. You know, I’m 40 plus years old. Feel free to Google my name. You know, I’m not a partier. I didn’t say that. Right. I didn’t say I’m not a partier. I think that’s probably a red herring. 

 

Avery  

Or something I just thought of. And one thing that’s always stuck with me, for anybody who’s listening that wants to get into the Airbnb space, or was already in it, and has had a very unfortunate booking where people have been disrespectful, the percentage of that happening is so small. Anybody who’s experienced that as an individual property owner, or maybe two, it’s just, it’s just bad chance that roll the dice because we’ve got 100 units, we have one incident in your 99% just fine. So like 99.5% Fine. So anybody who gets one stays just truly unlucky. 

 

Erwin  

This is all fascinating. Okay, if you don’t know how much time you have, I have a lot more questions. I’ll ramble. Okay, question around management, then. Have you ever had a short term person stay in cause damage, and you’ve had to go back to them to get money? 

 

Avery  

Yeah, it’s always small things never anything big. And you just do it through the resolution centre, Airbnb, though, they’ll cover it, you’ll always get it somehow. The larger the cost, the more annoying you have to follow up with Airbnb, but it’s all quite easy. And when it comes back, this might take some time. 

 

Erwin  

Maybe it’s a cultural thing. I’m just impressed how little problems you’ve had, or it’s just good screening. 

 

Avery  

I, I don’t know when you probably do have problems. I’ve just I’ve built a good team. We’ve got good processes, and we’re just diligent, so it might just be Halifax is a very special place. Yeah. It’s pretty smooth, very smooth. 

 

Erwin  

For someone looking to start a to say the same wants to do Airbnb their own property. What do they need to start with? 

 

Avery  

Find a place that is absolutely fine to places. dishevelled that is not nice that is not put together but no, seriously. The places that are nice means there’s demand means the landlords have power and why would they trust you places that are just shovelled means they’re not in demand. And if you come along, making an offer, let’s actually get looked at and typically place people who have to shovel places or small mom and pop landlords that you can actually have a conversation with the decision maker. So grab a dishevelled spot for a low rent, and then paint it. We used to not paint spaces because I don’t think I’d get the cost out of there. But you sign say, hey, I want a two year lease on this spot. You can get the value back from that painting. So painted, decorated really well celebrated works in your listing, and you’ll make the best margin and you’ll be able to get your foot in the door right away. Do not go premium to start I made that mistake. 

 

Erwin  

I think I’ve made that mistake too. By everybody was nice. 

 

Avery  

My very first face was dishevelled but we quickly after thought we need to go premium. So I did start with the dishevelled space and then looking back at it. That was the best decision now we do it time and time again we look for places that are not perfect. Because we get a good deal. We have a good conversation and it just goes longer now will sound like five year lease. someplace, 

 

Erwin  

Right, but I’m thinking whether the dishevelled place like, the landscaping will likely need a lot of work as well. And that’s something you’ll take care of a typical dishevelled property, especially rental properties. And this is why neighbours often don’t like rental properties is the light, like, for example, the landscaping has been taken care of. So that’s something you’d take care of as well take care of it. 

 

Avery  

Our goal is, we never want to talk to the landlord, we run the property as if it was our own. So we’ve got we’ll bring in landscaping, bring in all the cleaning, we’ve got our own maintenance, like if we’ve got a problem, we just deal with it. And then after the fact that here’s some stuff we’ve paid for, and we get some of this back. No, well, all right, we make the margin we need and to serve as our customers, it’s a cost of doing business. That’s how this up for a while it’s it’s not looking at who I was what, just at the end of the day, this is the business, we have the space to maintain it. If it cost us it’s unfortunate, but the margin is still plenty, 

 

Erwin  

Just to clarify, is looking for to show a property are you still looking for in good neighbourhoods? 

 

Avery  

Ah, whatever the data supports, neighbourhood doesn’t matter. Right? Okay, there’s a there’s a customer for every neighbourhood.

 

Erwin  

This is cool. Like he every I find a lot people meet again, myself, I’m I my decisions are largely data driven, versus people are largely emotional motional decisions like, again, like I have a realtor business, I’ve worked with people on the ground, and I’m showing people invest in properties. And people will say, I don’t like the kitchen, I don’t think this is a good investment property. Right? Something something like that. I don’t like the colour of the countertop, and like, but they don’t understand, like, you’re not the customer, you’re not the one who’s gonna be renting it, I know you’re buying it, you aren’t a customer that way. But your your audience for the for who’s gonna be paying you rent, right? 

 

Avery  

So they should be looking at the numbers versus how the kitchen is spit out. That’s yeah, they’re not the one buying the kitchen. 

 

Erwin  

Exactly every piece of real estate ever I ever look at or recommend to a client is because it’s it’s all data driven decision, all I see is ones and zeros and dollar signs. Right? I don’t care about anything else. Like it. Obviously, there’s soft parts of it, like how I judge a quality safe neighbourhood with nice neighbours and stuff like that. But again, all I see dollar signs behind that is I don’t know if it’s a nice neighbourhood scenario, nice school and get more rent. So again, it comes down to $1. Figure. 

 

Avery  

So there is a platform for that, that we use that anybody listening, listening, who hasn’t looked it up, just make data driven decisions. There’s a company called Air DNA, we’ve all used it. If you haven’t use it, I should get some promo from this company. I’ve recommended them to everybody. But it’s the only way you make decisions, you just literally can type in the address. And it will spit out comparables, it’ll show you a seasonality chart tells you exactly how much you’re gonna make by making this type of listing. So just you run the cost this much will make this much. Here’s the neighbourhood. Okay. And your work? 

 

Erwin  

Yeah, I’ve used air DNA as well, or dna.co. So erdene.co is a great for that as well. I paid for it as well. So I’ve used it fully. I actually find it pretty helpful. Just even just go look at to serve your neighbourhood for me. VRBO and to see what kind of availability they have as well. 

 

Avery  

Yeah, and it’s funny you can you can surf and see how much your neighbour is making on their property because it tells you it scrapes the data and says this property is making this much funny when you can see oh, no, I know our neighbours making 70 grand on their basement suite. Interesting. Interesting. Fun to know. 

 

Erwin  

Yeah. And then, obviously, the term the marketing terms hack, I’ll dig into why they get more rent than I do. I’ll go through their listing and understand try to understand what features they have. And maybe that’s why they get more rent than I do. For example, your friend of mine. He has vacation properties in Niagara Falls, and his his niche his go to strategies hot tubs. Yeah. All right. That sounds good all on Tom’s, I believe he said that his properties get double the rental income of properties that don’t have hot tubs within his own portfolio. So he’s you better believe he’s getting a hot tub for every property even though it means his maintenance costs go up, his cleaning costs go up. But the rents are more than covered. 

 

Avery  

That’s actually a strategy of vacation. The world’s largest short term rental manager. They have a hot tub programme, where if you want a hot tub it your stays, they will pay for it cashflow it, and take it off your monthly earnings until it’s paid for. So they know how well hot tubs work that they’ll put their money where their mouth is and they’ll buy it and then you pay it back. increases revenue by 30% on average. 30% Wow. Market dependent Yeah, it was also steady but hot tubs which ones do the best and near colder areas, mountains and activity doesn’t make the same effect in a city or hot places of course. So if he’s in the mountains, the absolutely like if you’re at a ski if you’re at a ski hill and you’re like a hot tub isn’t SVP of activity called M mountains. So it’s not triple whammy. 

 

Erwin  

I have this FOMO issue. I feel I feel like I’m just questions I’m not asking. I’m sure my listeners really have a full, full of questions as well. And David asked this question, 

 

Avery  

Then travelling with some of the really hard part is done some of the hardest ones that you will learn anywhere else. No, actually ever, ever, ever, ever did. 

 

Erwin  

To me. It’s a ridiculous story. So I just got back from Belleville, which is like, to me the vibe was like Niagara than the lake east of Toronto, right? We rented out a shack, they literally called the The Shack, they were very transparent what it was. And when we got to the property, my friend booked it. So I had no idea I was finding out when I saw the property. So it was actually the original house on the property. They’ve since the owners have since built a beautiful custom home, it’s probably over 3000 square feet with a pool and beautiful head of another house on the property as well. That was probably the second house that was built on the property. We’re living in the original. I was on the property tiny, it being called really as a one plus one one bedroom. And the attic was finished and had four bedrooms, the place including the attic, under 700 square foot for sure. As the kitchen has a bathroom, low ceilings, whatever. We paid $460 for the night. Literally a shack. 

 

Avery  

It’s amazing what will go if the value is there. I don’t know what the value. But you had a shack in the woods that is a customer Hey, work for you. 

 

Erwin  

And for that market, there was nothing else that was actually the last property available at market. It was just there. Nothing else specifically, it’s just Prince Edward County. So there was nothing else the demand was just that high. Because like Niagara on the Lake is the weekend. I stayed at a hotel the night before all the hotels were sold out. The vacation demand was just that crazy. So it wasn’t like actually spectacular, but it was more so supply driven. That’s what I would say. I think some people would think that’s a nice experience. When I saw the place like, yes, we’re in the middle of the country, the lake is you know, 100 metre walk away. Right? But when I first started like, you know, let’s go back to the hotel, just by the highway. But again, I’m not their target customer, obviously. But they got their money. So I’m very impressed get on them. I’m a social capitalist. So you got that money get on you. You are in debt. You are in debt. Like I don’t feel robbed by any means. If this is the last place available to rent, you burned it. All right. I don’t know what my point was. But there’s to your point about niche. I actually think some people would have liked this experience like a rustic experience. And like for example, I want my kids to like the cottages my my kids see these days are all a fully renovated. It’s not like for my generation when When did I friend’s cottage is when I was growing up? You know, the shock and awe of it? Yeah, like for example, the walls between bedrooms wouldn’t go all the way to the roofline, right? Oh, yeah. That’s whatever. Right? You know, I mean, so there’s basically no division between rooms really, you can hear everything. You know, I mean, that was my that was my context for cottages. You know, they’re not winterized. Like the heating is done through a wood stove. There is no gas furnace, there is no air conditioning. Am I right? Is there a market there is a market for this experience 

 

Avery  

Making a big comeback pandemic ignited it’s and it was strong before. So what makes going anywhere, but it puts tremendous pressure on the space, local travel and whatnot. But that’s what we’re doing. We’re we’re building these tiny, you think 700 square feet small. We’re doing 200 hanging, just to get away in the woods. Our nightly rate is much less to get away.

 

Erwin  

Okay, yes. Tell us about the development are your 200 square foot. What? 

 

Avery  

Oh, cabinets. It’s a small cabin. winterized. It’s got a propane stove on the inside. Right off of the lake comes with hot tub comes with hiking trails, or wheeling. It’s just it’s an adventure getaway. So it’s not so much the space and the size of the space that matters. It’s what value does the person get for being there? One thing that inspired me for just how simple things can be is I once read the story five years ago that someone built an igloo. And what’s the park in New York again, the main one central park, Central Park, they built an igloo in Central Park, put it on Airbnb for $16 a night. And they had customers it sold out instantly. It’s like, Oh, that’s great. It’s you could do any anything. They took snow from a park that wasn’t theirs. And they said come on in. We’re open for business. That’s amazing. So we got shut down after a week but you know, they made 600 bucks. So there we go. Great. It’s again, it’s not the space. It’s the Experience, space is just a vessel to have the experience. We’re building tiny combinations, building glamping accommodations, like Safari tents with really nice furnishings, nice stove inside. And what it comes down to is all the amenities that we get. So our turnkey costs for Safari tent is around 5500 set up, and then in peak season, they will turn out 4040 500. So basically pays itself off in about 40 days, retirement, right. And then the rest is product. So we can invest that profit into the property and the amenities. And that’s what we’re doing here. It’s essentially a place for people to get out of the city, unwind, kick back, relax, and then get back to do what they do best. So try to peel back the onion and prove people’s life. 

 

Erwin  

This is wild. Because again, you have because why I want to talk to you just again, you have a large data sample to draw from to make your decisions and to share on the show with our listeners are 17 listeners. Yeah, no one listens to the show. By the way. I don’t know why you drink. What do you decide to come on? I just like talking to you. So you could have done anything. And this is what you’ve chosen to put your own your own money into. Yeah, you start off you started off pretty early in the podcasting. Like you want you want Unique and this sounds very unique. And there’s no ski hill, nothing like that. It is just like that’s coming in your screens. Sorry. You’re saying go build a ski hill. 

 

Avery  

It’s gonna be one run, it’s gonna be just for me. But yes, buildings. We’re gonna pump from that lake and put the water onto this. And then go snowboarding. But just for me 

 

Erwin  

What I mean just for you, okay, so your your intake, your ATV up the hill are tearing it up the hill. 

 

Avery  

I’ve seen these things on YouTube where people can, I can make an electric winch setup for like 5000 bucks, you can pull me up. I don’t need a lift. I don’t need a fancy tow rope. I just need a motor and a pulley. And then you’re done. So I $1,000 I can get up there. 

 

Erwin  

We’ll just be able to use this. 

 

Avery  

Yeah, once we work the safety part out because I don’t think $5,000 winch is very safe. So maybe, maybe we’ll invest a bit more but it’s starting for me. And then soon yes, we’re doing a Nordic Spa here. We’re doing rock climbing, skiing, all sorts of things. 

 

Erwin  

Nordic Spas are like really hot here. 

 

Avery  

Like everywhere, everywhere. So the one secret sauce that we’re looked at is not exposed kill it happens in the woods kill it. And activity arcs kill it. Why aren’t all these three things in one place? We’re doing sounds like it’s gonna be like a bachelorette Haven. Oh, yeah. So you held your whole and Bakmi real Why am I bringing this up? Well serve all kinds of people, people who want private we can put over there. And people who want not private can go over there. This is this is this is huge. It’s like 300 acres over here. Looks like a screensaver back to the checkbox and said do you want noise? Yes, you want no and no. 

 

Erwin  

One thing that drives you bonkers but nor exposes you have Be quiet. Yeah, so actually going to what’s called a banya. I’ve never been to one of these before. I’m going to pick up some Russian thing. Apologies for my ignorance the listeners might have one of our 17 listeners actually knows what I’m talking about. But yeah, like the Russian spa, where you are allowed to talk and socialise and even have an adult beverage like sauna in and like hot and cold treatments whenever. And then my own experience. I’ve been calling Collingwood in Ontario, which is the private best ski is the biggest public ski resort in Ontario. It’s a massive bachelorette destination is Blue Mountain. Yes, Blue Mountains, a massive bachelorette destination in the summer. And the wishes are off season because the Nordic Spas and quote unquote, mountains that’s Ontario. It’s not it’s not mountains, like out east or west or Alberta. But yeah, it’s mountains. And yeah. And it’s it’s an hour from the city, but they draw and they charge ridiculous amounts of money and they’re busy. Yeah. So I imagined that can’t be the same for you.

 

Avery  

You know, there’s actually really, you’re totally right. And thank you. This is a fun. There’s this conversation around reoccurring revenue. Building a business around reoccurring revenue is the smartest way to build a strong company. And for the longest time, I started searching everywhere else to think how can I have a company that has recurring and someone made it evidently aware to me that we do have a reoccurring revenue business, but it only really gets activated in the niche part, not the commodity part. Because we built the space that is accommodating, affordable, and people keep coming back over and over and over. So with that knowledge we’ve considered maybe we had a subscription or something but Airbnbs can be reoccurring. revenue, which is an incredible investment. 

 

Erwin  

Fascinating. And then Okay, so for the novice explain, why not just build your own platform, have your own website and do all your bookings on your own on your own e business business whenever. Versus why would why would you host on Airbnb like, for example, what is Airbnb? What do you have to pay? What do you have to pay to Airbnb? 

 

Avery  

Airbnb bills the customer, not the host. And unique way that we don’t really feel it. But they’re marking it up 10 to 14% sort of theory, no explanation, but we never see it. So it doesn’t feel it doesn’t hurt. We don’t see it. We don’t hear it. We don’t feel it. So I just don’t, it doesn’t even happen. Other booking platforms like booking.com bills, the house. So we actually get an invoice saying, hey, this money, it feels different. Airbnb did something right in their design, that it’s a no brainer. And for the novice, the big lesson, I learned years back that led to my growth to come here was sell in bulk. Don’t sell individually, you’re going to spend the same amount of time might as well sell in bulk. Airbnb is the world’s largest platform, Wi Fi. I’m not trying to win that race. So work with them. Well, let’s do better. 

 

Erwin  

And what was your experience with the other platforms like VRBO, for example? 

 

Avery  

Yeah, we started on Airbnb natively. And afterwards wanted to bring another business depends on what their DNA again gets the demographics of where the buyers are coming from. Most buyers in Canada are Airbnb, the largest holding of VRBO is us. And booking.com is European. So depending upon what customers are coming to your market, you might want to consider those two channels from our experience. So we went through setting up on booking and VRBO and Expedia and these other ones, it really became so clear why Airbnb became a unicorn. They made it easy. And the others made it unfortunately, complicated for no reason. No reason. So that’s the difference. Airbnb is just effortless. And that’s why it took off. 

 

Erwin  

So okay, I have a lot of questions. There’s actually a question I miss. Apologies for coming back to it. So for your business, I’m sure people who want to start this business I’m sure they’re wondering, how do I convince a homeowner property owner to rent to me? That’s a good one. Like what kind of shirt use do you give them? Like? Because again, I’m sure the same people have read the same headlines. You know, see, you want to Airbnb you want to do? What’s my property? It’s gonna be bachelor parties and your people puking throwing the tech to the window, kinda like all those stories to get around student rentals as well. 

 

Avery  

That’s, uh, I actually coach someone on on that question. It’s really anything that you can offer is going to help you’re going after the disabled space is the best way because you’re gonna get your foot in the door. It’s all about getting your foot in the door. When we want when we see a listing that we like, well message, say I love the space. And like I said, the viewing in person, you do the pitch, you don’t do the pitch before you meet otherwise, you’ll never get the space. And we don’t say Hey, I like your listing, can I Airbnb? It would answer that, I don’t know, right? So anyway, love the space would love to love to view it, then you’re there you meet and say, hey, you know, this will actually do really well for what I’m looking for. And here’s what we do. I can say what we do now, because we’ve got that. But once you have one space, you can point back to it and have success. So getting the first one, it just requires a little bit of grit and cool offer that a friend of mine came up with for him starting was huge offer, like I can pay you six months in advance rent right now. And I was like, oh, that’s clever. So having the ability to do a heck of an offer. Yeah. So like, you want to get your first space, make an offer, they can’t turn down and call it marketing. Because every space after that is going to be a lot easier because you can point to saying I’m successful. And I’m going to do it again. Versus in the beginning. I don’t know what I’m doing because I have this. It’s the bad pitch. So six months up front was one thing and see money talks in real estate. So if you can put more down up front, it’s fine. You just gotta believe and you’ll make it back. And then if you don’t have that money to put down, it’s really talking about character. It’s like, this is my job. I have stable income. I want to create a side hustle and get into property management. I’ve made a surefire plan. Here’s my steps. This is why this space works. I’d love to have it and then you just have a conversation. It’s just negotiation, you’ll get turned down four to five times. But the fifth one just look at five places. Four to five, I think as the fifth place so it’s not like KFC you didn’t thinking 1000 pitches at the time. Yeah, so it’s much better than that. Yeah. 

 

Erwin  

So as the 100 Proper 100 properties Under doors, how many clients do you have are some of them bigger, and they have a sizable portfolio or a lot of these, like, Mom and Pop landlords like one, three properties. 

 

Avery  

It’s mostly Mom and Pop. But then we started working, we started working with small to mid size property management companies. And at this point, we have organic referrals because we do a good job and are accountable. So what’s actually happened on our side is just kept showing up. Number one rule of entrepreneurship just kept showing up, and they’d start sending us spaces. Hey, this one just come up came online, do you want it? So we’ll get first kick at the can because we are reliable. They always pay. We always maintain it, and they don’t hear a peep. So we’re like their outsourced management company. It’s just easier to rent to us. 

 

Erwin  

Okay, that’s fascinating. So apartment management, wants you as a repeat tenant, scalable repeat tenant, and they still they still get paid their regular, 

 

Avery  

I get paid, they get paid, they can start cutting back on their service request, because we’re taking care of most of the just because we have to it’s like a nature of the base. Like we’ll work with them. And we’ll we’ll offload as much as we can to save money. But at the end of the day, if I’m looking at $100 Night reservation for two weeks coming up, and I’ve got a plumbing issue. No, that’s getting planted today. So well, yeah, they like us. Because exactly they they like us, because we run their property, they just forget it exists. So that’s why we keep getting more spaces. Oh, wow. Fascinating, right? It’s so simple. 

 

Erwin  

It’s so fascinating. And there’s another question I’ve missed is are you worried about or any of these areas? Do you have issues with legislation? Like you see my posts on Facebook, I highly recommend everyone like my Facebook and see me Duff doing watch he does golf balls. In in Ontario, we have a lot of issues around lashes, a lot of condos, and then national we’re seeing a lot of municipalities now, banning short term rentals. London was the was the latest case where I can recall of one is not allowed to rent out their property in less than 30 days. Are you seeing that in your market? Or do you have any concerns? Can you still operate in that environment

 

Avery  

That’s coming down the pipeline, there are certain neighbourhoods like what it really comes down to his only issues come from respecting neighbours, like that is where all the push comes from. So there’s certain properties we have in certain neighbourhoods that we’ve just flipped to do 30 Day minimums. And all all this regulation we see around the world, when I keep repeating to people that ask this only affects things under 30 days. And the reason why is because if you look at the Tenancy Act in your province, it states how many days sublet can exist in a sublet is anything after 30 or more days. So there was never any rules written or anything below it. And that’s why they’re all being written now. So if you have someone for 30 days, or plus, it’s already written into the provincial and federal code from decades ago, it’s not going to change very quickly. So that even might get bumped around. And coming years after they push all the everyone to 30 day minimums, then we might address that as well. But that’s our strategy. So we really focus on getting those longer term reservations. People that come to stick around 30 days or 45, when we have some properties in downtown commercial zones, and if they want to come in and say no Airbnbs over a commercial operator, this is a commercial property. And here’s our commercial lease. So this is what we do. We host people that the end of the day regulations are only impacting areas that are zoned for residential that are being flipped in the Airbnb is because the neighbours are annoyed. All it is. And we look for commercial areas, and we look for 30 Day minimums in neighbourhoods. That’s it. So we’re proactively adapting to that, just expecting it. We’ve been making a slow shift for the last couple of years. So whenever it comes, won’t affect us. But that’s the strategy. 

 

Erwin  

Can you elaborate on what you mean when you look for commercial areas, 

 

Avery  

Like we’ve got apartments that’s above a pizza shop. It’s on it’s on a main strip. And while the our apartments that building is zoned commercially, so we can operate it, one that we took it on was downtown, it was above a convenience store what was apartments. Again, the zoning allowed us to make it into a boutique hotel. Zoning matters. We don’t actually dive into like, setting all these things up on all these permits and whatnot, but we look for the right safety net. And if the student situation comes where we’re talking to them, we say well, we’re in the right spot. And we haven’t had problems yet but we have a we have contingencies for it that does come up Long, that’s been our growth. Now it’s really focusing on commercially zoned areas just to be able to the race. When I look at an investment now it’s like, okay, commercially zoned on Airbnb site, what we’re just did were opened up a hotel, they actually took on a 25 unit, abandoned hotel, and, again, partially zoned, we just made an Airbnb. And we’re gonna start doing more of these because they’re awesome, the margins are incredible. It just needs a really good interior decorator, and you’re done. I’m gonna apologise to everyone because I think modern listeners are gonna buy every single abandoned hotel in the next 30 days across the country. I’m going to show on Netflix about motel flipping. Now, I can see why if we did, our first one is motels, if you know the historical hotel in your mind, they’re never very appealing. So make it appealing. And you already have spaces. And there’s a market for it. And so they just don’t do well online and they don’t look appealing. So you fix those two things. And you had a bargain on your spaces. 

 

Erwin  

Fascinating. Clean it up in that hot tubs. You’re probably good to go. That’s it. Clean the hundreds. Yeah, I can’t imagine the reviews if you don’t have a clean hot tub. Oh. Bad thing in my mind. I get so every Can you to rank for me your preference for investment then. So unique will come will be at the very top, I’m guessing. And then build a commercial? Yeah. And then below that would be like a commodity regular residential. Yeah. So that can be I can be urban, that could be Suburban. 

 

Avery  

Exactly. If I was going to rank in that order. That’s I never thought of it that way. But that’s exactly how we’ve morphed over time. So to do things that are niche, again, finding space to make that happen, a little more challenging. That’s why we’ve jumped into now by personal plans. And we’ll build a tiny accommodation, because we’re doing our thing you can hear like we’re off away, expensive in the city easier, just so we’re going more into unique now because it’s stronger in the long run.

 

Erwin  

Got it every day. But I want to thank you because that’s a really helpful point. Because from from what I’m hearing from investors, often they look to Airbnb to convert whatever their rental is, what the current use of the rental is, for example, it can be a condo, it can be a single family home in the suburb in suburbia. And then I think it would go Airbnb, but you’re saying that’s, that’s a bit lower on your on your preference level for an optimised investment. 

 

Avery  

Exactly. We still one arm of our business, and we’ll keep growing that and that’s fine. But so here’s a here’s a really good example for this. This is a startup and wanting to share, it blew my mind one year ago, when I dove into it. And why we started becoming developers is an average city space, it takes something here’s a number that can sort of translate across almost majority of cities. For average space not topped here, if you’re just gonna say like, let’s go on the averages. Take something like 18 days to break even and remaining 12 To profit. Yeah. So the margins okay, but you got to sell every one of those nights. So if there’s turnover days that you don’t capitalise capture, you’re just losing profits. So there it is 18 breakeven 12 profit over the course of the year the summer is different the summer peak seasons like five days, breakeven candy with our cabins is three, three days, four days to breakeven rest profit. So it’s quantum to quantum shift. It’s almost like eight times better so we can take comfort if there’s vacancies we don’t need to lower our price we’ve established this is what this is worth. This is our price but slower in the winter and that’s fine we don’t need to sell and that’s what sort of happens in the commodity space and Airbnb is during offseason well it takes 18 days to break even so that’s not happening and like oh no no wins the race to the bottom. So this is why we’ve made the switch is just it’s a lot more consistent in the cash the margin goes from like 30% to 6570 crazy.

 

Erwin  

I have a feeling your winter months gonna be busy like just what I see here like like ski has slammed private membership ski clubs I think they’re all their initiatives are double Wow. Like they went from like no one no one was interested failing businesses to having like waiting lists now for private ski clubs. Right? Oh, what a pandemic will change. I don’t know what’s gonna happen going forward. I don’t know if people will change you know, I mean, it like for example, even though we’re we’re all this recession talk. For example. Amazon Prime just had their best Amazon Prime ever. Right? Which is like a week ago. Yeah, it is the best ever. Even though we’re approaching, we still have supply chain issues, we’re approaching recession or we were in a recession already. But just because I my guess is part of it is because they have so many new customers. Right. And I think people have had a taste of more outdoor experiences. And I think that might persist. It may Trump may come down a little bit, I still think a lot of it will persist. Right? 

 

Avery  

Yeah, there’s, there’s definitely some things that have become sticky. And one trend that we’ve noticed as people became more familiar with their province, their country, travelling internationally might not be the question. And even now that we can, we’re still finding new spots. And, you know, within three hours that we really want to do, we’re now talking about exploring Canada. And it’s, it was a thing like, where the pandemic, people had the shift of I need to go to Paris, well, you can just go to Collinwood, actually, and now you’ve been exposed to it, although you’ve always noticed that you’ve never actually been. That’s, that’s a trend that sort of has stuck around. And it’s been motivating us. 

 

Erwin  

And then we have barriers. Now, just our airports are too busy. People’s luggage is lost. I don’t really want to go too far. And then crossing a border, all issues around COVID Stuff like I personally don’t, and I fight with my mom with my kids. I definitely don’t want to be crossing a border, right at this moment. Because I don’t want to be you know, so you test positive when you’re trying to cross when you try to come back to Canada. Now you’re stuck with my kids. We’re all stuck here. Now. I can imagine what the expense is going to be. So I’m naturally worrywart. All right. Again, I’m so sorry to my listener, because I’m sure there’s a lot of questions that they want ask how much is 300 acres costs in Nova Scotia? 

 

Avery  

Oh, sure. Who Yeah, when I first was 250. And when I first got into this to say, let’s figure out real estate, I thought like, Okay, that’s a good chunk of change. I don’t have it, but I’ll find it. What have later learned is that it is such a bargain, especially for anybody in the US. So this was 750 grand. 

 

Erwin  

Excuse me, his exact square foot condo in Toronto. Sorry, we need to reiterate this out. How much land Did you buy for 750 K. 

 

Avery  

We we have a small town of land 250 acres. Small small Township is what we have. I guess whole background behind me this is just a smidgen of it. You can see this. We have a lake on this Canadian dollar. Yeah, and it’s got some cool zoning too, that allows basically anything except fish processing and tires. I don’t know. But we can do anything here right you’re good? No fish processing. We don’t have it. 

 

Erwin  

So no fish processing your entire processing. That’s that’s your invitation. Okay, that’s it. All right. 

 

Avery  

Yeah, no, but this is a cool investment. And later after the ACA realise just how, how good of a deal. Nova Scotia and Atlantic Canada property is it’s almost oceanfront, we looked at a piece of ocean and Brian does 40 acres per 60 zoning was weird. We left it’s still under percent. It’s my most popular speech. We part of the process looked at 258 islands that was connected by a small causeway so we could build a road that was 2 million island. It has like 14 kilometres of ocean frontage. It’s crazy. The everyday mind. 

 

Erwin  

Thanks for projections on what this twinner for the acre property is gonna generate, like seven. This is This is insane. Well, what are the property taxes on 250 acres? No, no. Who cares? Please cash probably counting all sorted out. 

 

Avery  

It’s so the easiest way to break it down is to say how much how much does a space generate? Use the word space because not a cabin. It’s not a dome suntan like whatever space that’s matters because we’ve had scope creep and we’ve dialled back our cost per capita. Any space in this atmosphere we generate 30,000 Every year, excuse me. 22 inch square foot. very grand. Yeah, low end 25. If we really nail it, we can get 45 but I think it’s gonna fall on 30. So for each combination we put up, we just run the math. So we want to turn that Since we’re a million dollar operation, and the goal is to get to 40 spaces for the next three years, however, we’ve totally deconstructed our, our scaling model. And that’s part of our secret sauce, which anyone wants to talk about in this call. But essentially, we’ve just driven down the cost to get to, I think you can hit a million dollar business in our first nine months, which would be awesome. I can only do that because you’ve done it before. But I want to do it again. And and under a year. 

 

Erwin  

You mentioned you didn’t have the money, how are you? Financing capitalising this?

 

Avery  

There’s really cool programmes that exist. We had, it was a mix of private investment, we brought in sort of a 350 private investment, the land cost 750. And to develop it out, we’re gonna do one and a half million. So the bank saw half a million. Yeah, as our project, build out, the bank side is okay, you need you need to have X amount percentage of one and a half million, and then they’ll fund the rest. So one method was we did a vendor take back seller financing to get part of that downpayment, finance the rest of the friends and family. And then the bank came in, in Canada, there’s a federal Canada backed loan, up to a million dollars the loan over 20 years really favourable interest, and we’ll start with Business Development Bank of Canada. No, that’s the only one that doesn’t do it. But any bank, however, anybody? We’ve got the most success at credit unions, I love credit unions, credit unions will take a chance on you. And whereas big banks, put your number in a computer, and it says sorry. Peter said no. Anyways, it was a mix of credit union know about federal programmes, and then better take back mine with private financing. It was painful process, but we figured it out. 

 

Erwin  

Oh, financing developments are painful processes. To listener like listener like this is a straight up shows culturas about real estate investing, these things aren’t easy. This sounds crazy. 

 

Avery  

We’re going to scale again, though, is vendor take backs. That’s been our biggest tack to scale our business, we’re using that to buy our properties that we have landlords that Airbnb is with. We’re using that to buy development properties. Make a deal? Hey, I’ll give you your asking price you contribute 100,000, this will pay it back over two years plus interest depends on the discussion. It depends. It always depends, right? 

 

Erwin  

And of course, to me, it means of course, you’re speaking directly to the to the owner, you’re not going through an agent to have a VTB discussion when we went through the age for this to be able to have a good agent offence.

 

Avery  

Oh, yeah. But it also came because we had went looked at for three properties. And the last one, we went to go make an offer on someone else took it on the night of my wedding. And I was like I’m done. I’m done searching to come back to the drawing board picked five places and said, What’s your ideal space? We ended up with this one. And by this point, we had been done all of our research, we know exactly what we needed. And we have been turned down multiple times. So when we came into this meeting, we just said we want it. We’ll give you the price. But we need your your seller to play ball with us for some seller financing. They can throw 100 grand our way, we’ll figure out the terms are in and just sheer confidence after failing is what got us through. Because the first people didn’t too complicated. But sheer confidence in a very good agent is how we got it done. 

 

Erwin  

Yeah, you won’t keep that person’s number for life. Most agents, in my experience have no idea what vendor financing means their learning in this market. works a lot better in a buyers market too. Yeah. Oh, and just just out of curiosity, and I’m sorry. I know. We’re way over time. So I’ll let you go soon. Curiosity you choose to cut down on roads to build. How long are these properties sitting on the market? Like for example, like this, this 250 acres that you you’re you’re developing? How long? How long was it available for? 

 

Avery  

That’s a good question. I don’t think it was too long. I think it was maybe different targets. I think it was like 150 days. So anyone could Yes. In some at some of them, like the person we looked at had been on for years on and off. Although there’s a huge there’s a huge boom for people buying houses and markets. Some houses are on for day, most per day. Yeah, that didn’t seem to affect large land parcels, small home sized land parcels maybe more affected, but medium and large, lots of opportunity. And then the cost per acre is way less too. So, you know, part of our follow up plan, if we failed was, we could cut a chunk out and sell it for some capital. So if you can finance a medium sized portion like anything that’s like maybe 10 acres and above, less competition on it. 

 

Erwin  

Every year, apologies. I didn’t ask any early journey questions. How did you fall into this business? Oh, that’s yeah. I for short term rentals, 

 

Avery  

my whole life, I’ve thought I was an entrepreneur. So I kept trying and trying and trying failed and about 10 Different things that had no connection or relevance, just being part of the story. And I was running a painting franchise, college pro student works, this kind of thing. And that taught me all the fundamentals of how to run a business. So then all those my failures started producing. And one day a friend named Keith, which a room on Airbnb, I tried it. I had two bedroom, not one bedroom paid for my whole rent. So I thought, well, this is great. 

 

Erwin  

So your house hacking. 

 

Avery  

Alright, so I live in a two bedroom I had one and I rented out the other room and one room paid for my rent. Okay, I’m living for free now. This is great. How do I do more? And then I got home. And when I look back later at why this really stuck for me and why I love promoting it to others is totally inhibits my core value of fun. I just I can’t get involved in anything that I can’t have a little mayhem. Okay, Austin and Airbnb allows that allows flexibility and time freedom. Investment. I love promoting it to others because you can get the full 40 Hour Workweek you can train it, you can put whatever you want. It’s whatever you want. It’s blank, blank canvas big or as small as you want to go to market. 

 

Erwin  

Hey, I’m thoroughly enjoying this. I’d use up your whole afternoon if I could. But I only asked you for an hour now. Any anything? Anything I’ve forgotten to ask anything else you want to talk about? But what actually no, I said I asked you, you’re going to explain where the name of the of the resort came from. I don’t know if that’s even the right term. tortures peak orders peak. 

 

Avery  

Well, there is a lake a very well known lake in Nova Scotia called porters lake. And this is right up against it. And that’s at the very end and it has a mountain on so borders peak with it just it gave us the right alliteration sounded good to say. It was multifunctional so we can grow into it quarters peak spa orders keep refining orders thanks snowboarding orders people. There’s so many effects everything. And we also we also get the natural SEO for when people type in orders Lake orders. Oh let’s partner is key. So we might get accidental visitors. They’re just trying to go to the lake. 

 

Erwin  

I frickin love it. It’s such a I studied business in school. So I’m a bit of a marketing business geek as well. You borrow from an established brand, which is Porter’s Lake to build it into your own business versus some people would do Avery’s resort. Did you know SEO value? Yeah, so when you’re typing, you go to Google and it’s almost already on Apple Maps. We’ve even done frickin love it. And then the URL is Porter’s peak.com. Yeah. Good for you. And then I mentioned the opp before we start recording I thought was I thought it was Porter’s Porter speaks. Speak Porter speak. Probably I probably actually help people remember the name Porter pushers peak. Obviously there’s no apostrophe. Yeah, just Porter Porter’s peak. Anything else or anything else you want to tell us about the development that I haven’t asked? Other than the Instagram is also Porter’s Porter’s peak. 

 

Avery  

Follow our Instagram, one of my co founders, my business partner, Victoria, she runs the Instagram and it is not only entertaining, there’s also educational and it’s also going to make you want to come here. So our Instagram is very lively. Please check it out. And this is something that we’re growing. We’re going to be taking this model across the country. And a dream of mine is still a company across Canada and this is this is our knee. It’s our bread and butter and you are interested to learn more or want to learn how to do it yourself. I’m happy to take your email and If you need to talk I was wondering if we’re not working together I will happily help you. Because you know, there’s no such thing as competition that space is part. I don’t want people competing for your time. Competing with me for your talk doesn’t exist. Oh, time lab. Oh, God. You’ll pick up all this barley appointment slots in your town, we I’d love to take this offline too. This is a fun chat. I want to learn more about what you do to r1 podcast. 

 

Erwin  

I’ll stop the recording that and we can keep going. I don’t want to bore the listener with what I do for listener one, one last time, use the Instagram Porter’s peak, all supporters peak.com. Avery, thank you so much for doing this. I knew you’re a big time, man. Is this ever fascinating. I love how we got into the weeds. You know, I was actually thinking like, how am I going to title this show? I think the title of the show is if you’re gonna listen to a podcast on Airbnb, you have to listen to this. So thank you so much for being a wonderful guest and being so open. Yeah. And you know, it’s hilarious how we met introduction. We were both at the same conference in our mutual our mutual friend met you there. You already knew me. Well, it’s Oh, yeah, yes. And you meet this every guy. Right? And if if you weren’t there, I wouldn’t have never gotten the introduction to you. So my point I’m trying to get to his folks is like, you need to get out there. Right? You can’t just sit back on your Facebook or Instagram and think you’re gonna meet people and make connections. Alright, so yeah, okay, point. Yeah, get out there. Shake the tree when you’re stuck when someone’s gonna take up all your time. So I get the value by 70 listeners getting all the value for Avery this amazing, thanks. Thanks again so much for doing this. Let’s go check out the recording. Oh, in any final words, anything else you need other final words, 

 

Avery  

Go out there and get your first base started and you will never regret it. 

 

Erwin  

Alright, thanks 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 to 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. 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.

 

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**Transcripts are auto-generated.

Erwin  

Hello and welcome to another episode of The Truth about real estate investing show. How’s your summer going? Are you making the most out of it as just the answer? Our keynote speaker for the wealth hacker conference says summer hard because no one includes the timber as part of summer. Technically it is. But people go back to work in school and some separate September so it’s not for many part of their summer. So anyway, there’s really only eight, nine weeks of summer to enjoy and create those memories, especially after those last two years of lockdowns. When was the last time you saw your mom. For me it was as it was 2019 as lockdowns in China in Hong Kong are tough. But finally she made her way back from Hong Kong to stay with us for and with no return date. I haven’t spent mom in over three years and my parents aren’t getting any younger. So we’ll be looking forward to enjoying the next couple of months with my mom and making memories. So yeah, summer hard out there. This week. Our kids were at the cottage sorry, not on a cottage. They were at an overnight week long overnight camp, while cherry and I are at Cata cottage at a friend’s cottage so we had a blast. We had a whole week without the kids, which was weird. We did miss them of course. But we talked about opportunity to catch up on sleep. We were working less working less but still yeah still working while on vacation, such as the life of an entrepreneur. And some of its fun. I got to meet up with a bunch of Belleville investors, including HGTV zone Stephen Phillips for around a golf and a tour of Belleville for investment properties duplexing and other development opportunities. Why Belleville because much of who I consider smart money in the Durham Region are making the trip to Belleville to invest. Hence we’re doing some r&d rip off and duplicate that research and development. For example, clients of ours picked up a large bungalow on a good sized lot for $400,000. Those are prices that we paid in Hamilton back in like 2015 2016. Hence opportunities for cash flow are greater. Even though the prices are what we used to see you like 567 years ago, the rents are quite high. So again, great mix of more affordability and greater cash flow potential. My whole investor team of coaches we all make the trip out. James Tammy Jamil, Kristen, Tim and of course Steven Steven HGTV Phillips hosted us. Steven is of course local to Belleville, so he host us and find style. We had a country’s private dinner country style private dinner made with local ingredients and we drink local wine and nothing beat the company I had I had a blast and after seeing the opportunities in Belleville, there’s nothing more than joy in life than that great company and around, especially with like minded investors who you know are action takers and wanting more out of life are driven. And also of course, investment opportunities. So we’ll run out another tour soon. So if you’re east of the Greater Toronto Area, you need to put this town on your list. Come check it out. Likely it’s new to you. Towns are only 50,000 people. So unlikely any of your listeners are live to live in Belleville. So if you’re new to town, you definitely want to get in touch with someone who knows the area and knows contractors and knows property managers and knows what what the opportunities are. You definitely want to reach out to our team, especially since we have Steven Phillips on the team. He has been featured in or made appearances. I think this term whatever he’s been on HGTV like 2426 times anyways. But in this current environment, this is the best I’ve seen in the market in terms of opportunity to buy and cashflow since the crash of 2017. And for those who remember studied history in 2017, you know in the summer of 2017, and that was probably near the bottom. And since then prices doubled almost five years later, what the next five years health have in store for us I have no idea nobody knows. But all the smart money I know and I follow are bullish long term and of course cautious in the immediate term. Speaking of smart money, we have one of our lawyers who think of droughty on the show who is an active entrepreneur, real estate investor stock investor, who comes from several successful generations of entrepreneurs real estate and stock investors, who seems is a trusted adviser to Chennai since he understands the problems faced by families like our own who, who have assets and businesses just to care about preparing futures for hence he helped us prepare wills will wills whatever.

 

Erwin  

He’s helped us with our family, family, future estate planning whatnot. And he’s handled most of our recent real estate transactions including the refinancing of now five properties we refinance finance three and then we just now we just refinance two more. That is right. We are free of capital, improving our cash flow positions, ready to take advantage of these these dips in the market, both stock and real estate and crypto. We’ve seen it as a good investment when he sees one hand sees he was one of the first to sponsor cherry nice wealth hacker conference. If you too are interested in sponsoring, please reach out to us by responding to any of the email has received from us, or just reach out to me over social media, Hussein and I discussed several topics, including what investments he likes, and absolutely refuses to assist clients with. Yeah, those investments are just that bad. He won’t accept your money to help you to help you with them how someone as successful as himself wants to raise humble children, investing in physical gold of Ghana. And of course, we’re talking about real estate investing and stock investing. As always, it’s fascinating to see his brain so please enjoy the show. Having seen your own horror, you are excellent. What’s keeping you busy these days?

 

Hussein  

Not enough golf. That’s for sure.

 

Erwin  

Not enough. We were just out yesterday, last this week. Yep. What’s enough? What is enough,

 

Hussein  

I’d like to be playing twice a week, twice a week. But in all seriousness, works, keeping me pretty busy. And I welcomed the new addition to my family a few months ago. So that’s also keeping me busy. Being a father of two now is its own unique challenge that I’m really enjoying at this time.

 

Erwin  

You seem surprisingly awake for having a newborn at home. I have

 

Hussein  

a wonderfully supportive wife and very caring parents.

 

Erwin  

Are your parents doing? They’re enjoying

 

Hussein  

their loving grandparent life? You know, they say nothing better. Right.

 

Erwin  

Can I ask how long they’ve been retired for? Are they technically Would you consider them retired?

 

Hussein  

Yeah, I would say they’ve been retired. I’d say that they’ve been fully retired for the last five years, I would say, Okay, I mean, they still have their interests and their ventures that they do from time to time. Right. But it’s now more passive, you would say, more philanthropical if you will. Right. But fundamentally, their focus and their time commitment is largely dedicated to being grandparents now. That’s pretty cool. Yeah, I mean, there’s nothing I mean, as you know, especially from our cultures, the influence of a parent on the next generation is the grandparent to the grandchild, is the best way to inculcate them with the values, the traditions, the morals, the ethics, that you want them to have, right. And for me, I’m very fortunate that my parents have graciously agreed to assist with those objectives. It also allows me to have free time to pursue still things that I enjoy. While not they completely abdicate my responsibilities. But I really enjoy the ability to focus on building my law, practice networking, and building my connections within this community. Because, in truth, I’ve only been in this community for the last six years, which is not the longest time and especially when you had zero connections coming to this community. It’s always a work in progress this early to keep building your network and your connections, not just from a professional perspective, but just from a personal because it does take a village to live life event. And I want to build those relationships, I want to have those networks. And I want to create a stability and a foundation that if my children want to stay in this area, they don’t have to start from scratch, and they have the advantages of you know, parents are established in the community.

 

Erwin  

That’s funny, because you could choose any community that you choose this bunch of crazies.

 

Hussein  

Honestly, I truly love it here. I think the quality of life that’s offered here, as long as you make smart choices, and you still have to work hard, it’s not handed to you. But the quality of life here to practice, whatever career you want, whatever religion you want, whatever lifestyle you want. I think it’s something that as Canadians, I think, our generation and the generation coming up, takes it a little bit for granted. Like the quality of life we can have the freedoms we enjoy, are not appreciated. And I want to make sure that at least I do my part to instil that and like, for example, not to get political, but the recent election, right. I wasn’t thrilled with the choices available, or federal provincial election that just came. I wasn’t thrilled with the choices available to anyone was based on the voter turnout. But I appreciate the opportunity to still have a say. And so I insisted on taking my daughter with me. She’s still below five unvaccinated right now, but I still wanted to take her with me to you know, to experience that to know that it’s an important step to take, you know, and it’s a privilege to be able to exercise your world.

 

Erwin  

Did you explain your daughter who you voted for? And why?

 

Hussein  

No, because it’s my job is to teach the importance of voting not to influence our political ideologies. That is something I want her to form for herself.

 

Erwin  

I know but even to educate, you need to say something. These are the three main parties as far as their platform,

 

Hussein  

there will come a time when eventually I would hope that she would take the time to be informed actually read the platform’s not just go with what the talking heads are saying. And actually make an informed decision and vote for your interest because we see this happen it In the US, and almost everywhere in our where people have the privilege to vote, they go with the talking heads they don’t actually vote with. How does this make my family’s life better? Which policies advance? Us? No one thinks like that. It’s too much black and white. And the reality is platforms are grey. And you have to identify,

 

Erwin  

yeah, and it can be largely lies to you Sure.

 

Hussein  

I mean, politicians say one thing to another. We all know that to be true, but at least when you’re voting these vote with something otherwise, what’s the point? Yeah.

 

Erwin  

Nachi. I usually ask other people that are there. It’s a Tim Ferriss model, right? Yeah. You as someone who that’s who’s smart, and well read on the subject, if you have similar values to them, like, for sure. Oh, yeah, I had the toughest time trying to at least try to give like the Coles notes to my kids. We rode our bikes to go vote. Chair and I insist on voting because that ensures our right to complain about what happens. Because my thing is, if you don’t vote, you don’t have the right to complain. So yeah, I rode my bicycle with the kids and just trying to Coles notes, because they have no idea what that what’s going on when we the NDP or what they stand for whatever. Anyways, that’s funny. Anyways, I want to go back to your parents for just another moment, just because we don’t have much opportunity to have people on the show who are on the other side of hustle, right? We’re your parents worked hard.

 

Hussein  

Yeah. My parents, my grandparents and my great grandparents, like they worked hard. And they all sacrificed to some degree for their quality of life, because they wanted to set up future generations. And this is when I talk about importing values, it’s that you could focus on having everything for today, or you could focus on this much is good enough, because I want to leave a legacy for tomorrow. And that’s a choice that everyone has to make where that boundary lies. But I know that like I was fortunate to be privileged enough that my forefathers and foremothers were disciplined enough and motivated enough that they maybe did not enjoy all the day could enjoy. But they took enjoyment in the thought that my future generations will have more options. And I think that’s what we all want for our kids is that they should have more options. And that they should be able to pursue with hard work, what they enjoy, versus doing something simply for the necessity that this provides me a paycheck to put something on the table. And I think that’s the motivation, right? It’s about and I find that, you know, today’s when I’m when people say like, what’s your advice, and I’m like, work for your passion, right? Because often I find if you work for your passion, not everyone, but you will be able to get to a point where the money will flow, as long as the idea is solid, and your passion is solid. Because hard work is almost always rewarded. I find, especially in this country, too, I still maintain that if you work hard, and you are committed, disciplined, educate yourself, which is all part of hard work, you will get somewhere and the financial rewards will come. But also plan for tomorrow, save right? Like Canadians right now have record saving simply because property prices are still at ridiculous highs. But my question is, is where would your savings be if you took out your real estate value from there, and you have to have a hedge, like we’ve seen the softening in the real estate market, to some degree in some areas, and people are understandably stressed. And it shouldn’t be that so much of your wealth is tied up to real estate. Because while it’s a great tool for wealth generation and everything else, liquidity is also important. How are you taking advantage of opportunities? How are you also going to be positioned in the event that life throws you some curveballs, whatever they may be, you have to have some liquidity and you don’t want to have to sell properties. Like imagine if you had bought a property in 2019. You did you’ve done really well, you’re still up, but it’s gonna sting. And I find it hard to believe anyone who tells me otherwise, that if you didn’t sell in February, and you have to sell in April, or may you know that you’ve left money on the table from the peak right? So you never want to be in a position to be forced to sell it should be that it’s a choice. It’s you want to be the master of your own destiny.

 

Erwin  

And I want to say that this this correction or having as came faster and harder than I expected.

 

Hussein  

I think then a lot of people expected right because I mean, and it’s also surprising to me to some degree because the rate increases what telegraph people have been talking about it coming coming coming but for some reason it still caught people off guard

 

Erwin  

well I asked to add to that the run up was caught me off guard to how hard and fast and hard in the run up was was well for like December for January, February. Yeah, I mean, that was crazy. Because it was it was predict all the economists were saying you know, the trigger point for this tick box trickle down will be the first interest rate increase. Alright, so my teens followed and we’ve known

 

Hussein  

it’s interesting again, I mean, you know, who has seen them real estate market do as well as it did during COVID? Two, right, people would have thought people have been hesitant uncertainty around it, but it didn’t stop anything. You know, it ran on steroids

 

Erwin  

when people were just bored. I have all this time for a side hustle. Now. This is an income property.

 

Hussein  

Exactly. I think investors are a big reason that the property prices got driven up so much, because I don’t think it’s first time homebuyers are buying it right. They’re the ones kind of suffering right big time or this market.

 

Erwin  

I feel so bad for them so much political rhetoric and was around supporting and making, you know, making programmes available for the first time homebuyers benefit. You know, like, like waving the land transfer tax in Toronto, being able to use your RRSPs and stuff like that for to borrow for your first home. And they’re Yeah, they’re the ones getting whacked. And this because we were discussing on the golf course, like what your experience is. So for example, we had a guest on just few weeks ago, who does mostly regular real estate with regular agents, regular real estate, people buying and selling homes. In his experience, there’s lots of trouble closing, appraisals are coming in low. So then homebuyers who bought near the peak around the peak, they don’t have enough downpayment to cover. So So closings are being pushed, some people are walking away trying to walk by or some buyers are walking away. And our experience here of working with our clients is extremely different. Every time we’re together. We’re talking economics and what we’re seeing in the market. And our caution, right, like, for example, in this market, like our criteria, our investment criteria is so different as and we want multiple exit strategies and multiple ways to improve a property. So I prefer example, in this market, I want to be able to be able to basement suite, and ideally garden suite as well. Right? Unfortunately, we’re picking up the pieces for another investor who is working with someone else who doesn’t have a good read on the market realtor that doesn’t have agreed on the market. They bought a property in April, May, that had no exits, the sort of vanilla single family home, can’t speak the basement, can curtain suite, and they were paid for it. Anyways, my point is, what are you seeing in the market in terms of like closings appraisals? And then also I had to ask, start with that sort of that?

 

Hussein  

Well, I mean, we have a couple of clients that who are selling, who already bought and now are selling after the fact that bridge, and their buyers are potentially going to walk away, or have at least indicated that they may have trouble closing one of them sent a letter asking for a $60,000 price reduction. When I mean, our client basically told them, you know, wow, I can’t say this in polite company, their response. But that was their response, then I have another one that basically is the trying their to get an extension to the deal, because they’re to bring in foreign money from their parents abroad to help bridge the appraisal gap.

 

Erwin  

And these investors are these regular homebuyer and my understanding

 

Hussein  

is these actually like buying principal residences, regular homebuyers, or just, you know, caught with their pants down a little bit, right, because in both cases, their appraisals came substantially lower than what they bought the properties for. So they’re panicking, understandably so. And my clients, the knock on effect is there as well, right. Like, I’ve already had to connect my clients in preparation with litigators, because you also have to move fast, because you have an obligation of mitigating your damages, and so on and so forth. So you got to make sure that you’re set up to have that success. So that, you know, when this goes before a judge has it, may you have done everything, right, I want to basically create, like, you know, the perfect platform for them to recoup and mitigate whatever stress that they have in their life. So that’s the one side but for the most part, I would say that my clients have been okay. And that they’re, in fact, I see a number of them taking this opportunity to identify deals and are actually quite aggressively purchasing, some of whom are mutual friends, you know, who have done very well for themselves during this market. So it’s all about identifying where the opportunity lies. And the conviction of your business model, like, you know, and most of our clients is barriers or investor oriented, and they’re okay, because they just have had to adjust their numbers, make sure that thing deals make sense. And as long as they’re doing that, they’re going to be okay, because you have to remember this right. One, based on the immigration numbers coming into Canada,

 

Erwin  

we just set a record for this quarter for the highest immigration ever

 

Hussein  

in new units coming online. Or just the correlation is just not there. There’s far more people coming in to put pressure on the market. Investors have been in the game for Few years now have done exceptionally well. They’ve got a lot of equity. So they’ve got a lot of firepower. Even with rising interest rates, they have a lot of firepower and those who know how to use jayvees. Effectively. Again, there’s a lot of people who’ve learned how to use these tools in manners that can move them along. So I don’t see prices falling, because I think the pressures are there. Now certain areas, maybe because they’re just not desirable. But I think core fundamental locations, as long as the location is good, I think the opportunity is there again, do your own analysis, do your own risk tolerance, run your numbers, I am in no position advising somebody, I’m not saying go buy right now or anything. I’m not saying go sell anything. I’m saying analyse your situation. And be I always tell people be nimble. You can’t be static and flat footed, in investing in any area, whether it’s real estate, stocks, whatever you’re investing in business, you have to be nimble, you have to adjust, right? Like if you if you own a canning line, for example, even that, like you got to be able to know like, how is the tech changing? How can I get more efficient, right? Because if you have to pay higher salaries as wages across the board have been going up, you got to recoup that somewhere else, because fundamentally, nobody wants to be hurting their margins. And you don’t want to be fast, because when you pass on cost to your customer, there’s always addressed that they might go and start looking for somewhere cheaper. Yes, you hope that your quality of service, your history of relationship matters. But if someone’s willing to do something for cheaper, money often talks

 

Erwin  

often talks to winning earlier points about being nimble, a mutual friends of ours are doing the same thing, we’re talking about being a bit picky in terms of what you’re buying. So for example, I was talking about, I want multiple options to add value to my property, we have mutual friends who are doing several and built, right, so the buying a double wide lot, the severing it down the middle, basically, to create now to lots and then building on the now empty lot. Right in that deal was not available six months ago,

 

Hussein  

because they were going for the numbers would make sense, right. And now with a reduction in pricing, the numbers start to slowly make sense. But again, it’s important, it’s important to make sure that you get the right help talk to experts. And make sure when you’re getting into the game for new investors, get your performance evaluated. And then after you go evaluated, get it evaluated again. Because the worst thing is in your first one, if you get burned and you lose your savings, yeah, it’ll set you back. So make sure you take the time, pay, you know, take people out to lunch, you know, whatever it takes, but get them to give you the time to actually intelligibly review that pro forma for you.

 

Erwin  

For listeners benefit Hussein and I are available if you’re a member at rattlesnake or a joke, I’m talking about the premium golf golf courses. I just I just I forgot where I was going oh, and like to your point about protecting your your savings, your investment capital, I cannot believe the things that people putting money into. And you’ve seen, you’ve seen some crazy pooled investment funds that people are putting their money into without, I’ll say it actually there’s a there’s an article on the Globe and Mail just about two, three weeks ago about how all these investors are investing on stories rather than any sort of the businesses are the leaders ability to execute on their vision and performance.

 

Hussein  

So and I see this very respectfully, I don’t mean it insultingly at all, but I call it the lemming mentality. They’re just following along. Because that’s what everybody else is doing. They’ve heard Oh, well, my uncle did this, my arm did this. And my friend did this. And whatever it is, and they just go into keep going in and in and in and into these ventures. They don’t understand the project, they don’t understand the rate of return, they don’t understand who is actually the person driving it. And they don’t understand the fees that they’re paying on the capital. I’ve seen some of these proposals from some of the bigger name players out there. And they have like acquisition fee development fee, like they have a fee for literally everything. And I will say that if you have the capital, right that these people need, because ultimately they need your money. Yes, they aggregating it together with other people for you providing them a need to negotiate, negotiate for yourself the best deal you possibly can. And also have a firm understanding. Your question always should be how do I get my money back? Even if you don’t get a return? Right? But at least make sure you get your principal back. You and I have both seen stories where people have lost their principals forget their actual return that they were hoping to make. But they’re not even getting back 100% of their principal. And in a real estate investment with the way the market has been for the last four years. That’s inexcusable.

 

Erwin  

How does it happened?

 

Hussein  

Right and that because you didn’t do the due diligence, you just trusted what other people are saying. Remember, nobody looks after your money. The way you would look after your money. So take the time to ask the questions. And again, like this might seem like I’m trying to generate business for myself, but having a lawyer review like these agreements, what’s it going to cost? Maybe anywhere from 350 to seven or 50 bucks. But when you’re investing 50,000 100,000 200,000, what is that value compared to what? That peace of mind that someone who is experienced and seasoned is telling you this is worthwhile? This is worth doing? Or no, don’t do this. Because I can’t tell you the number of times LPS jayvees. I’ve had to tell clients, mortgages, private mortgages, we have to actually review and I showed the clients it because they’re like, Oh, well, look at this. I’m getting speaking to private mortgage, I’m getting 7%. Unbelievable. And I’m like, Yeah, you’re getting 7%, which have been 4% in fees. So what is your actual rate? It’s 11%. And they’re like, Oh, I didn’t know that. And unlike read it understand what you actually paying, always understand the bottom line, and then make a decision. If you’re then okay with it, at least you’ve made that informed decision, right? So therefore, there is no surprises, you might still be okay with the return, then that’s fine. But know that this is what is actually costing you. This is what your money is worth. And this is what you get and how much they’re making on your money. Always understand that everyone has a right to make money, everyone’s in this to make money. But understand the ratio, how much are they making? versus how much are you making on your money? Keep that in mind? It’s still your money? Yes, they identified a project, yes, they had an idea. But it’s still your money or

 

Erwin  

activity for recording. And we’re not going to name names, we’re talking about a large syndicated mortgage that pulled a lot of money together. And they’re paying fixed interest rates to the investors. And what the, what the developer was doing was they had to develop land, right, and to bring it ready to shovel a shovel ready, and maybe even build some stuff on it, I find a lot of people do not have enough context, like the saying is, it’s all relative, right? And how bring it to investment terms is every investment relative to another. So for example, in the syndicated mortgages, these pooled funds for developments, like it was paying like 8% a year. And then if everything went, Well, you get another 4% per year on the backend. But then for me, judging the risk of what the development was doing that return, if everything went well did not make sense to me,

 

Hussein  

can this and that’s the other thing, like the rate of return has to be relative to the risk, your money’s assuming development has inherent risk is 8%. Sufficient for the amount of risk your money is taking? You know, and because developers like especially smaller ones, who don’t have a tracker, so that’s a thing always check track record. And relating to that, for the small ones, if something goes wrong, they’re going to be delayed paying you out? Where are they going to get the money to keep paying you these returns, the risk of them going under is lower. So you have to think about what can you get upfront from them? Can you get a lending fee? Like, you know, is that available to you think about what options are available to you to structure it to make it in your favour.

 

Erwin  

And then I don’t think enough people understand like my money secured on where the second mortgage on the property was a second mortgage mean, there’s that question to ask. And then the question I ask is, even if things go sideways, how long it’s going to take to get your money back. If you can get your money back

 

Hussein  

and understand LTV, understand how LTV is being calculated, and make sure you’re not being fooled in the way the LTV is being calculated, right.

 

Erwin  

And from my experience from these deals have gone sideways, the appraisals were done, appraisers were done based on finished value versus current value, current appraised value. And so then LTV was loan to value was completely inflated. Exactly right. So but again, I don’t think beginners know enough to merely make this analysis. And that’s why I like talking to you. Because there’s a bunch of lawyers who won’t give opinions on an investment. Sometimes they don’t have the context. Like for example, if they’re new grad, they won’t have the context to say I’ve seen lots of these deals go sideways, right versus you see lots of stuff go sideways.

 

Hussein  

Unfortunately, I wouldn’t say lots I’ve seen enough that I know not just from my legal capacity, but just from being informed and be informed I care I care about. It’s like a hobby, right? Everyone has a hobby. For me Finance News, how markets work, how the economy is performing. It’s like a nerdy interest for me, right? Because, one, I’m actively involved in this space, not an interest in stuff because I mean, that’s for as you know, for personal or religious reasons that’s out of context, but from just in how to invest in ways that you know, generate returns because ultimately, the way my ancestors left things better for future generations. That’s what I want to work hard and make things better for my kids and my grandkids and you know, and leave something for them that’s built in a way that solid and how do I do that? If I’m not informed? I don’t erect not just what I’m working hard for. But what’s been done privileged enough to have been left behind by people that come before me I have an obligation to safeguard and grow. And that only comes from being informed.

 

Erwin  

Then an interesting about your story and journey is that you have the benefit of, of coming from multiple generations of investors, entrepreneurs, business builders. On this show, I think we rarely have someone who’s beyond a second generation investor, and as reading psychology and money in the book explained how, like, for example, RSPs are not that LOLed Rs, what do you remember when RRSPs or 401k? Is became a thing? 70s 80s?

 

Hussein  

I would have to assume maybe 60s.

 

Erwin  

Right. So my point is that the concept of saving for retirement is not that old. Really? No. Right, let alone investing.

 

Hussein  

But the concept of retirement itself is quite new

 

Erwin  

people died younger back then. So they didn’t have to worry about the

 

Hussein  

worth. I mean, think about it, right? Like, I mean, the old farmer types, given that we see them, right, the 8085 90. And they’re still going in tilling the fields. And you know, they still care, right?

 

Erwin  

I point is, and I don’t know, oh, you told me, I’m always thinking about the future. I like a little bit of neurotic about these things. Like, like, for example, I have a nanny. And my plan is to keep her until I need a nanny is my boy, right when I’m at I’m not telling fields. But I’ve planned for these things like financially my investments plan. Yeah. I don’t find enough people are planning for use it tomorrow. But really, we mean, yeah. I mean, 3055 generations down the road. Yeah. Are we anomalies? I think probably not amongst your clientele.

 

Hussein  

Even then, like I see there’s a mix. I wouldn’t say we’re anomalies. I think there are lots of people who are genuinely trying to create financial freedom, wealth, freedom, however you want to call it for multigenerational, and they’re working in their own way towards it. But I think there’s a lot of what is a social media age, and I don’t want to sound like an old grandfather on this, you know, back in my day, because you’re young. But having seen that I find is a great desire for instant gratification. There’s this great desire that I mean, x on this deal that said, I’m going on a vacation to Bali, I made x on this deal. I’m gonna get myself my luxury sportscar. And it’s like, okay, you got all your vacation to wherever you got your luxury sports car, you got your fancy watch, you got all these beautiful things you’ve gone and bought, what have you actually left in the bank that if tomorrow, God forbid, you got hit by a bus, and you couldn’t work anymore? And you need care? What do you have left? Can you afford it? What is your quality of life going to be? If suddenly you cannot work and you cannot do anything? And people don’t actually want to stop. They say it’s more but they say oh, it’s negative thinking, oh, you know, you’re manifesting failure. I’m like, It’s not that it’s a in my view. It’s only by the grace of God, or whatever you believe in, or if you don’t believe in anything, whatever. But it’s luck, that you have health, that you have opportunity that you’re in Canada, like, it’s all so much of our life is luck. And I’m like, we can’t just apply luck to 100% there’s already so much luck in what we do and where we are. That you have a responsibility to wonder and ask yourself, what is that luck changes? What does my life look like? And I motivate myself by saying that even if my luck changes, my parents, my wife, my kids, my grandkids, they’re gonna be okay. And myself too. You have to look out for yourself you can’t always be about others to you know, you have to look out for yourself, will I be okay? Will I be able to get whatever care I need? If something happens to me, will I be able to still have the quality of life to pursue the interests that I want to pursue? And all of that costs money and it’s only getting more expensive? So if you’re going and spending every there’s a time and a place I’m not saying don’t enjoy luxuries, and don’t have a good life at all. Go see the world go by yourself whatever you want. But make sure you’re still planning and being proportional in what you’re doing. And I just find this too much off. Oh, well the next deal I’ll save but that next deal I’ll save never seems to come

 

Erwin  

for an exercise just to understand our clientele and business. I was going down my client list especially are our clients had been with us since for like over 10 years and whatnot. And funny observation they made was how much our clientele is just like in the book, The Millionaire Next Door. Our clients are frugal people. They don’t dress with Flash. They don’t drive cars that almost none of our cars have premium vehicles as in like, you know, Acura Lexus Tadelakt, right. Almost none of them do. And even if they do, often they probably bought it used. And again, looking at them, you never know they’re, they’re real estate millionaires. But again, yeah, a lot of them are very frugal and And the reason I share this is because those with SEC financial success to people who aren’t sort of posting on social media, how much flash and dash they have. That’s true by rich clientele are they be sharing was nothing on social media about how successful they are financially? Like it’s interesting. Why do you need to you don’t need to.

 

Hussein  

But I always ask myself when I see it, I’m like, What is this person trying to show me? Right? And I’m not going to form judgement and pass it. But I always ask myself that question. Regardless, when people post on social media, I see the physical of the obvious of what they’re trying to show. But I always ask myself and within myself, what are you actually trying to show me? Right? And each have their own, everyone has to live their life and how they want to do it. But personally, it’s I find it very curious.

 

Erwin  

For example, I have lots of clients will come on the show, because of that private, and like, Oh, I’m not special, blah, blah, like, I’m like, look around yourself, and tell me who’s richer in your inner circle? Right? For example, if a client is a teacher, a retired teacher, like, do you know when teachers are at a higher net worth than yourself, and they don’t want to share, right, and my point to them is, you’re not gonna inspire anyone if you don’t share. So that’s my point. My observation of law in human behaviour is people won’t do things unless they think it’s a it’s low risk, and they think they can do it. So literally, actually, now that I remember this, that’s the kind of same kind of talking about the retired teacher, another client of mine, I was telling him how her about her successes, and he’s like, I know her, how come I’m not like successful, I need to try harder. And he did. Right. So he was inspired by the actions of another person. Right? The whole the whole term of social proof. You know, when you hit the when you drive the ball, 260 yards be like, Okay, I maybe can do that, too. Right? It’s humanly possible for Hussein, maybe it’s humanly possible for myself, you know, me, for sure. Alright.

 

Hussein  

It’s always possible if we apply, and people often, but not everyone knows what’s possible. They put limitations, they put your hand brakes on their own ambition. And I just find that some very skilled, very talented people if they just had some discipline, right, like, it’s what we talked about offline, where I don’t recall again, who said it, but there was some very successful US investor who said that if you put $500 a month into an index fun, but how many people do like, I guarantee you that in our generation, the next generation, if you told someone, you put $500 away a month, then you’ll be a multimillionaire in 20 years, how many of them do you think would have the discipline to do that, I would venture the percentage would be quite small, because they won’t be willing to sacrifice at $500 a month right now. Because they might mean a night out less a meal out last night, the newest sunglasses, that’s more important. Even if you could guarantee that, that in 20 years, you’d be a millionaire, if you did that.

 

Erwin  

I mean, it’s forced on my kids. Give me your login.

 

Hussein  

A lot of successful immigrant parents, who literally when the kids have started working very successful, great kids, but they but they literally require their kids to give them $500 A month, some frame is paying back for their education or their pet, what the parents are doing is they’re doing exactly that investing $500 in an index fund for them. The number is different, whatever it may be, but I know a lot of immigrant parents, especially who do that for their kids out there starting out professionally to keep them discipline. Plus, there’s also like some family planning and all that like family law benefits and all that to that kind of structure as well. So it’s like, you can kill many birds with thinking like that.

 

Erwin  

So what was the diversification

 

Hussein  

but this is only a small amount of the portfolio. It’s not diverse.

 

Erwin  

So you and I have been talking about gold offline, we’re actually we’re talking another thing that we talked about a lot. Now we have some pretty cool conversations. And we were talking about that, that gold discovery, for example, in Uganda, which is hopefully positive news for all those involved, understand a Chinese company that invested $200 million to help find that gold, but I’m sure everything’s gonna work out. Well, the poor people will get their own gold and everything like that. Anyways. But the headline was 31 million tonnes of gold ore discovered in Uganda, right? And then which made me dig deeper. Because it’s hard to find, how much would actually braille to repeal the protests? And I think the number was 31,000 tonnes? I think. So that 1% Yeah, what about 1% of the autodiscovery will be will be converted into actual gold. And why this is interesting to me is because as someone who just likes to geek out about economics and hard assets, I went looking for that news article news item because Michael Saylor mentioned it, Michael, Sylar being the CEO of not sure if he’s the founder, CEO of MicroStrategy. So one of the biggest had coined celebrities out there out there. He called that equal to that. That finding, because based on Google, I don’t know if it’s accurate. But the first result from Google, when I Googled how much gold is there in the world is about 20s. I don’t know what the date 27 million tonnes of processed gold existence in the world. So then 31 million tonnes would sound like we’re basically doubling the supply. And that’s when he said, right, basically, this new discovery basically doubles the gold supply. So folks, don’t please quote me on this, go ahead and look it up yourself. So that’s why I was digging into it. But in fact, it’s a 1% change.

 

Hussein  

Yeah, that’s the thing, right? is similar to what I mentioned earlier in this conversation about the social media and people posting and you, you take your take the obvious as what they’re saying. And then you ask yourself, what are they actually saying, right? It’s the same thing. Everyone has a narrative that they’re trying to push. And if you just go with the narrative they want you to take, sometimes they could be fine, that could be great and awesome. But it could also mean that you’re missing the point of what’s in your interest. Because you’re basically just accepting someone else’s narrative, and then adopting it into your life, and then you percolate it down. And sometimes this can be very, very damaging, right? It’s

 

Erwin  

because my understanding of gold would be incorrect. If my understanding was the same as Michael sailors versus 1% is not the end of the world. It’s not gonna change, not gonna change the hardness or overall value of gold.

 

Hussein  

No. And that’s the fundamental thing about gold is people just keep talking about gold is just like this jewellery item, right? Like this luxury item. But gold has so much functional use in industry, that people just and that’s where the when people say like, Oh, why are you so bullish on gold? And why do you like gold so much? It’s because it has functional use. And especially as we go towards electric vehicles, and all these other things, in my opinion, again, do your own research goal is going to play a factor in that to

 

Erwin  

you things can be needed for the production. It’s a fantastic

 

Hussein  

conductor, one of the very best existed like back in the day, McLaren used to use gold in their vehicles.

 

Erwin  

No G. Like the f1. Like

 

Hussein  

no like they’re the road supercars.

 

Erwin  

Like, but yeah, it’s it’s dropping weight, how much gold,

 

Hussein  

not not a lot, but because of this conductivity, right at those temperatures at those speeds, those heat, and I eventually they’re going to need to do that. And especially when you think about it, right, right now we use cobalt for batteries and things like that those are at this time, or more unstable sources, more volatile countries, gold is going to have more opportunity. And not just that in aerospace gold is used so much in planes and things like that. In defence systems gold is used, like, and then obviously it’s appealing jewellery and all that is, has been there forever. And again, though, thing ask is, and again, someone can much smarter than me who’s listening gear will correct me but from my understanding, almost nothing you can point to that has been a symbol of value and status, since as far back as history records, like it was value, like what else? Like I mean, animal skins, like no doesn’t have value today, right?

 

Erwin  

That’s not good for world culture.

 

Hussein  

That’s what I’m saying. Right? Like, gold is retain value, despite the world changing immeasurably dozens of dozens of times over 100 years, right? Like different systems, different countries, different cultures, different, different. Everything in gold has always retained value. Okay, if you own gold, you were successful and rich, no matter what time you lived it.

 

Erwin  

Right. So you said the word you said was retained. That’s why all your heard. So your your your gold investment is probably the right where the investment is you’re trying to store wealth, of course. Right. And so that’s your primary objective for gold. Exactly. Okay. And another conversation we

 

Hussein  

had and it’s and it’s fantastically efficient at transitioning wealth to the next generation. It is heavy, though, if you have a lot of it. But how do you show ownership it’s much easier to slide it down.

 

Erwin  

Hopefully no accountants are listening. And American conversation, you mentioned how it can be used as collateral. I’ve never actually I don’t have any personal experience or know many people with experiences using it as collateral for for like, can you give me any

 

Hussein  

you can borrow, you can borrow against gold, right? On a small scale, like bigger institutions do do it. But think of in a small scale, right? When people have like how does a pawn shop or you give them gold? They’ll give you cash you give them but you pay them back to cash. You take your gold back, right? They’re bigger institutions, same thing. You deposit gold at certain financial institutions, they’ll be willing to do lend against it.

 

Erwin  

What What would the minimum be? And that’s something we can discuss offline. Oh, yeah, it’s significant.

 

Hussein  

We’ll dive into that. As an offline discussion, no

 

Erwin  

one ever heard of these things. It’s funny because like, when you talk to people who have experience with with wealth, you learn all these other opportunities. Like, for example, I never knew what whole life insurance was before, because that wasn’t the crowds I was rolling with. Right. And partly real estate, is one of

 

Hussein  

the best tools is Yuming. It fits your other values and everything. But from an estate planning tool, it’s absolutely one of the best tools for crossing wealth down. And in fact, like whole life insurance is how the Rockefellers, the Kennedys and others actually transition their wealth.

 

Erwin  

Don’t talk about it, though, at least in my circles, yeah. Remember to worry about the leaves, how they’re playing and not playing. They’re playing golf really great right now, I’m sure. Before we started recording, we talked about other investments you do outside of real estate, and you’ve been yourself and your family and looking for trends. Any trends you want to share right now?

 

Hussein  

It’s not about like,

 

Erwin  

Should we be storing guns, the Trudeau Government is gonna take them away.

 

Hussein  

It’s not about so much transit, just thought about how do you analyse an investment, right? And I say that you can either do what everybody else is doing for the last 12 months and say, Okay, well, I’m going to do that,

 

Erwin  

because a lot of those things aren’t working right now.

 

Hussein  

Or, or you can think, how do I move this to wait, what do people need? What do people need to live? And where are they going to want to go 20 years from now? How are they going to want to go there basically be the creator of trends, especially if you have fun. Again, I’m not saying this is put 100% of your investment into it, be strategic, have you conservative investments, but also don’t put everything into what everyone else is doing? Put some allocate, my personal belief is 15%, to taking a little bit more risk, informed risk as we’ve been, it’s been a theme throughout this conversation, but think about what people are going to need what’s going to matter in this world, in your opinion, and from do your research. 20 years from now, because you can put your money in, in this 20 years from now, think about how much it’s going to be because for example, the example I give is, what was Mississauga 20 years from now, it was really started to build up. But how much of it was farmland and things like that. But if people saw that, you know, Canada’s got a population problem, they’re going to have people coming in Toronto only so much. This is the corridor to Niagara Falls, this is a logical place where things should develop, if you had the vision and started buying land in Mississauga, right? Instead of just keeping on buying in the city of Toronto, right? If you were an investor, and you had some money, and you decided to move your money to Mississauga, today, where would you be? Right?

 

Erwin  

Where will you be loaded?

 

Hussein  

Exactly? Where’s the opportunity? Right? And again, there’s still that same opportunity, you need to think about where Will people live? Where will people move? Are you willing to? And also you will take the risk, right? Because, I mean, there’s this whole concept of is the urban boundary going to move? Yes or No? Everyone can have their own school of thought duck for one, or I guess moving.

 

Erwin  

But

 

Hussein  

imagine before he won, right? Like, if you in late 2021, early 2022. If you started buying up land along projected errors, or whether expected urban boundary may move, right now, it was a risk. What if he didn’t win? What if he doesn’t follow through? What if you were you thought it was going to move it doesn’t move there and moves down the road? You might get burned? And with anything they risk, this risk? But if you it doesn’t move, usually turn up? Why can’t even you know, I’m not going to speculate on here, I have an idea of what multiple that means your property value change,

 

Erwin  

right? So you’d have a large piece of the land or your doesn’t have to be it doesn’t have to be you can reopen to like, you know, a single family home on King Street where the LRT might go through.

 

Hussein  

Why not? Like it’s everyone has to play to their scale, right. And this opportunity for small players opportunity for medium sized players opportunity for big players. opportunity exists. It’s all about your risk tolerance and what you’re willing to do with it. Right? And identify opportunity. Investing doesn’t have to be sexy. To me sexy is making money. So yeah, right. Next year, you know, it’s not about the flash, it’s not about showing the lifestyle or showing your asset off. You know, like, if that was the case, everyone would just have beachfront property in Miami and everything else wouldn’t be done. You know what I mean? So it’s about what are the returns How does your bank balance look? Right? And again, like, keep working till your bank balance looks like a phone number and I don’t mean 911 So

 

Erwin  

401111 If you’re what the memory I forget the what the city number is if you need the city, what are you looking at these days?

 

Hussein  

Honestly, I like resources. I like commodities a lot. I like resources,

 

Erwin  

in particular commodities because like oil is pretty High and gas is pretty high and coming down. I

 

Hussein  

mean, we it is interesting with export controls going on. I think copper is an interesting space to be in, I think nickel, cobalt lithium, these are markets that are again, quite interesting to invest in.

 

Erwin  

So you’re buying futures are you buying? Are you buying real estate in those areas where they’re being mined?

 

Hussein  

It’s a combination. It’s a combination of actually identifying opportunity, right. And then the other thing is anything waterfront, I’m interested in anything because water is going to be, in my opinion, one of the most sought after commodities, clean drinking water is in short supply, and it’s going to be needed. And especially in Canada, if you can get a property with riparian rights, you can use the water, there’s a lot of opportunity there. And then make and they’re not making more often either made me when people say manmade lakes and developments. I’m not talking about that what

 

Erwin  

I got one that’s gonna make me make me a lot of money. I got to drink it. God, that’s a terrible idea. Colleges, thankfully, colleges,

 

Hussein  

if it’s called riparian rights, but even just even without it, right waterfront properties are limited right? Now they’re going to have depth they’re going to flow. Again, if you’re looking for something in quick returns, don’t ask me for real estate buy, because I don’t look at my real estate for quick returns. I look at my real estate a minimum 10 year horizon, because that’s because, honestly, I’m busy. I don’t have time to be keeping up yearly. If I have a 10 year horizon, I commit to the plan, I have to be careful conviction. And then I see through I can’t tell you the amount of times you see people oh my god, I got this 10 year plan, but oh my god, the markets dipped two months into it. Gotta sell gotta sell. I’m like, what was your 10 year plan, you clearly have no conviction in your plan. You have to believe in it. Like when people react. It’s the same with anything, right? Like, if people are reacting to the market and not their plan. I’m like, your plan was worthless. So yeah. That’s That’s it. And again, I don’t mean any of this out of arrogance, or you know, I’m better than anyone. I’ve made mistakes, like, you know, as I’m sure a lot of others have,

 

Erwin  

I’ve made plenty but But ultimately, I live in a lot of fear.

 

Hussein  

Ultimately, why like to come on here is, you know, if you don’t share your experiences, how are people going to learn and avoid the mistakes you made? I feel like one of the decent things you can do as a human being is be willing to share that I’m not perfect. I’ve screwed up lots and lots of times. But I’m still here, I’m still standing and I’m still striving to be better. And if someone as flawed as myself can do it. So can you

 

Erwin  

we talked about cogs briefly. Are you seeing anything in the cottage market coming across your desk? No one’s coming in being very quiet. Oh, no one’s even off. No one’s even buying a

 

Hussein  

very for me and you and I’m sure other other lawyers may have more. But I’ve just not been See I’ve seen like maybe like three college deals this month, which is lower than average for me, but and to our sales that were forced by family dynamic more than anything else,

 

Erwin  

right, like an estate sale or divorce. Well,

 

Hussein  

just I think just not vanilla. Not getting along. The the decision was to sell the generational asset. Got it. And then one was just someone deciding that you know that meats had a decent year in their business and they wanted a cottage for their family. So they decided to buy one. And they took a good opportunity got a good deal and negotiated themselves a private deal, which is quite quite impressive. Like I really respect to that hustle going in knocking door to door to cottages they like saying, Hey, are you interested in selling and finally getting a deal? What month was this? In May?

 

Erwin  

There wasn’t really keen on a particular location. They wanted

 

Hussein  

to be in the corner this like they they 100% wanted to be on stony Lake, and that’s what they want to.

 

Erwin  

Cool. Yeah, I guess I’ve just heard anecdotal stories about some softness in the college market. But again, anecdotal, very limited data points.

 

Hussein  

Yeah. I mean, I’m sure there will be but ultimately, waterfront property, it’s solid, and effective. There’s opportunity, I would say do your due diligence, make sure it’s the right, it is a draw opportunity. I’d encourage you to execute right now.

 

Erwin  

And then people can bring you opportunities to review for sure what stage can they bring you an opportunity to review

 

Hussein  

at any at any stage, right? And honestly, depending on the relationship I have of where you’re coming through, you know, it’s quite inexpensive. Like, you’d be surprised that it’s actually very reasonable to actually just, you know, get on the phone with me for 1015 20 minutes and just say, Hey, these are my thoughts. You don’t have to you can take it or leave it but it just do not have another data point to add to your calculation or analysis.

 

Erwin  

Right. So what’s the downside? So if there’s inter, if there’s a tick tock influencer, touting out a new REIT that is formed, and I want to bounce it off you I can do that. Absolutely. All right. But the dance really well. I’m sure they can build condos like no tomorrow.

 

Hussein  

I

 

Erwin  

I make that up. I’m

 

Hussein  

Joe Granick. I was feeling I should have a better social media presence and I think about two things. One Who the heck is going to want to see my ugly face. And the other thing I think about is This, I can’t move to see my life. So I’m like, I anger moves. I’m not funny. And I’m ugly

 

Erwin  

social media and for me, are you to go the other approach to just show your fancy cars or something?

 

Hussein  

Yeah, that’s me, though.

 

Erwin  

We’ve seen it. Well, thank you for doing this. Any any final thoughts you want to share? Do you spend a lot of time for loss for sizing? I say that, right?

 

Hussein  

Honestly, it’s very simple. It’s be truly yourself. Have a vision, trust your plan. And ask questions from everybody you meet. You never know where they might be. But ask questions. Because you might be shocked at the answers you receive, and how much knowledge you can gain. Always be asking questions,

 

Erwin  

asking questions, how are banks these days on lending, on executing on lending,

 

Hussein  

I’m not a mortgage broker. But this experience, they’re very slow. So make sure you give yourself enough time to close to get instructions, be thoughtful, and get advice from the experts on whether you need to do fixed or variable in this evolving rapidly changing market and ask what programmes have available don’t go with what the first thing they’re trying to pitch, you see what’s available. And unless you’re very happy, or you have established relationship, shopping around, go see foods hungry for your business. It sounds a bit mercenary, but it is the beauty of a volatile market is people are hungry for your business, because it’s not as easy because at one point, it was so easy that they were motivated to fight for your business to struggle for your business. But as the market is evolving and changing, the balance of power is shifting to the consumer now versus the institutional side. So you can push you can say like, Hey, what can you do for me? Right? Because remember, these guys still have to lend out X amount of dollars, they still have their numbers, their quarters, they need to add,

 

Erwin  

and you expect service levels to stay at these levels. Because Because for recording, while simple, well, simple is laid out 30 minutes and who was it in the States was a Morgan Stanley, which major bank just laid off JP Morgan, JP Morgan was a 600 and 1000. I believe in mortgage people. And you think that we might see some of this in Canada as well.

 

Hussein  

That’s what I’m that from? Like, am I very active on Twitter to get news, I find it to be quite reliable source.

 

Erwin  

Twitter killed me on the provincial election? I thought Ford was going down for sure. No, I think that’s part of it as part of who was on Twitter, as certain political leanings on Twitter or a not on Twitter, or whatever, and whatever, it doesn’t matter. And my point is that, you know, there’s

 

Hussein  

an expectation that there’s going to be some kind of, it almost seems like there’s very few people who don’t believe we’re going to go into recession. Some people say we’re already there. Some people say will be a technical recession, whatever the case may be, and generally, layoffs, and recessions go hand in hand. I hope no, because I don’t want anyone to suffer. We’ve already come back come out of two years of a lot of turmoil and uncertainty, which sucks? Well, a lot of families have struggled one way or another. I don’t wish that for anyone. But if you asked him my honest expectation, I think there will be a short recession that will follow layoffs and going to question will service levels improve? Honestly, I’m not optimistic. Because ultimately, in my view, financial institutions don’t care about customer service. They care about shareholder service. And if they’re not paying wages, that means more on their bottom line. I hope I’m wrong. But my own personal experience of banking and stuff. I do have a very good small business advisor right now who I’m happy with. It’s no reflection on her. But having said that, the overall like at the branch level, the service you get is horrific. And a lot of it is just the training that good people like some of this new stuff may young but if you get no training, how are you going to know how to do your job? Right. And because it’s such a high turnover, banks are not investing in training in any meaningful way. Again, my opinion my experience if you’ve had different Daniela me, I’m just honestly sharing my opinion,

 

Erwin  

but you see what I’m going through with my with my refi. Yeah.

 

Hussein  

I mean, it’s been a joke, quite frankly.

 

Erwin  

I think we’re on a fourth revision. Yes. Yeah. Unless there’s context like we were ready this, like everything was was to be done. We’ve had to send it back like either us either. Yeah, I think we’ve sent about four times as in there’s mistakes in the file, like very, very bad mistakes. And most of them are in the are in my favour, so they won’t even go through anyways. So it makes no sense to allow these mistakes to go through by a four four revisions. And we’re almost there. We’re almost there. And then the feedback that we’re getting is also that they’re short staffed behind the back office, so to hear that there’s gonna be layoffs when they’re already short staffed. Oh, man. Things piling up worse for servers because the people that are are are trying to work overwhelmed.

 

Hussein  

Honestly, like sometimes like we get the exception where they get instructions to us pretty quick. But for the most part, like, especially if you’re going to be lender, give yourself a time, really give yourself time. Because you don’t want to be stuck where especially with people needing to use those funds to sell, buy whatever is going on. You don’t want to end up paying that like it’s it’s painful, it’s very stressful if you cannot close because your mortgage funds didn’t come through or whatever right?

 

Erwin  

Initiative ratio of the lenders that aren’t closing on time. This is a specific

 

Hussein  

B lender, I won’t name them. But from my own experience, and I’m not talking about like one or two deals I’m talking about having done about 15 to 20 deals with them in the last few months. Plus talking about the fact that having spoken to other counsel about this specific be lender 70% of their deals are closing on the day of closing.

 

Erwin  

Oh my God, that’s hard. That’s gone up a lot since we last talked

 

Hussein  

there. This is one specific one. All right, that just is very problematic.

 

Erwin  

Is it an appetite for lending? Or is it honestly,

 

Hussein  

I find there’s I think there’s systems and processes in this space. Like they’re very good in commercial space. They’re brilliant they so that’s it’s odd that they suck. And there’s no other word for it in the residential space. They’re terrible and have been for a long time. And it’s just gotten worse,

 

Erwin  

right? Because the demand is only getting greater for be landing in this environment, they

 

Hussein  

don’t review the file, you can send the file three, four days before they don’t review it till the afternoon after closing. They want to slam and they don’t pay attention to Nikki and half of it is asking for documents you’ve already submitted. And then they just go radio silent. So maybe at the end, it could just be a staffing issue could be whatever, right. But to me, it’s unacceptable. If a client has done everything in their possible power, there’ll be no mistakes anywhere along the chain. And you cannot find on time for a simple residential deal. There’s nothing complicated to it, nothing unusual. Some of it is owner occupied principal residence. What’s the issue? Why can you not close it? To me? It’s ridiculous.

 

Erwin  

And can you comment on the level of risk you’re seeing in terms of private mortgages these days, honestly, I’m

 

Hussein  

seeing a lot less. I’m seeing a lot less and less deals, I’m seeing a lot less deals, but they’re still there. It’s still going and I know some private lenders is just not lending. Look, I know clients, we used to use private lender x a private lender, why? And they just seem like until the fall, we’re just not issuing any new deals. So I’ve seen that also that that avenue of capitalist right up that avenues capital is dried up for certain clients, they’ve had to go to other private lenders. And I’m seeing the private lenders and are trying to get more upfront fees. And I’m seeing the LTV go down like before you it wasn’t uncommon, you could push up to 85. Now I’m seeing 7075 isn’t one of the sweet spot.

 

Erwin  

And then how many of these at the end of these terms at the end of private mortgages? How many you seen are being discharged cleanly?

 

Hussein  

Well, I mean, all of these are new, right? So it’s hard to tell like speak to me in a year but invite me back and we can evaluate this question but for the most part like my clients that have had to borrow private money have been able to pay back and you know, it’s been clean and it’s been good

 

Erwin  

just as someone who’s paranoid in this the last five years and like no, this isn’t the market want to Linden I don’t know what this is going to end. Now finally, I’m right. Finally, finally gravy trains ended. This is a hard thing to do. I did not want to would not have want to have funds landed out in. Right? You’re saying thanks so much for doing this. Appreciate that. You want to hang out with me when you can hang out with much cooler people and much more successful people funnier people than I.

 

Hussein  

Not at all. It’s a pleasure always to be with you or when thanks for having me on the show. And I’m sure we’ll get out on the golf course sooner rather than later. Hopefully,

 

Erwin  

it’s going to be cheering once you thanks to see no worries.

 

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.

 

 

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