**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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**Transcripts are auto-generated.

Erwin  

Greetings everyone, to another episode of Real Estate Investing show. This episode is brought to you by charity nice wealth hacker conference on November 12 of this year 2022 After the success of our first conference in November 2019 and several postponements yet, many postponements, who knows why we’re finally back to 10x. For the conference of the year for investors and entrepreneurs alike, we have extra speakers on business building real estate stocks, cryptocurrency and they will all be sharing their secrets to building wealth in the most efficient manner, building wealth efficient manner. To me that’s what a wealth hacker is all this during a one day all day live and in person event, there will be an online option just good old fashioned networking, live and in person. And for many of you this will be a homecoming to see all your friends from all the other real estate organisations like green tea spire Rockstar legacy slash Rich Dad, I went stock hacker we’re all cool people and we’re inclusive like that. Don’t miss out as it’s pretty safe to assume that all your friends will be going as over 1500 like minded individuals attended last time get your tickets today at wealth hacker.ca Even better if you’re on my emails to be informed of all the promotions that are going on. If you don’t know where that where to find that I don’t know help you simply go to the website for this podcast is about real estate investing.ca Just about real estate real estate investing.ca is putting your name and email and you’ll be on our email list to be informed when new episodes come out. Any sort of promotions we have going on completed about hacker conference onto the show summer session we’re having that we’re definitely in a recession. Don’t get me wrong. It’s a real one too. Since we avoided the long run when the pandemic hit banks all the government stimulus money and rock bottom interest rates, it didn’t last very long. Unfortunately, the governments around the world including our own have overshot SPENDING PART and stimulus part hence we find ourselves where we are today. Stocks crypto real estate all are down after getting going way too high in 2021. How low we go is anyone’s guess. And how sooner how much appetite do our governments have for job losses the bad economy until they reverse again, and cut rates is anyone’s guess a lot of people I’m reading are predicting later this year, as in like fall with a fall December maybe even early next year. So to me it’s not if it’s about when CMHC just came out with a study that Ontario needs to double its most ambitious goals for creating supply to achieve affordability. Good luck with that, with all the government red tape, no taxpayer in our pocket to add to that add to that the lack of construction labour building all that not possible Volcana just immigration record for the last quarter. So we have more people coming and not enough supply coming.

 

Erwin  

That’s a formula for Guess what? Yeah, and of course, you know, go ahead and blame the investors. But rents for single family homes have now gone up over $3,000 per month on the single family homes in the areas that we invest so the Greater Toronto Area. That’s right, rents are at historic highs since buyers are delaying buying due to rising interest rates are not buying at all. And that’s kind of the thing my I’ve invested for my kids. I always worry about one of the generations in our family line that will never be able to afford a home. Hence we’re building wealth now. getting prepared for that so that we don’t have future generations of tenants only renting anyway. But personally, I always thought of renting as making the landlord rich rather than paying oneself units market dependent To each their own. I’ve advised family to rent before as they live in a less desirable neighbourhood downtown and in a building less desirable neighbourhood and building instead to invest for a property that actually cash flowed outside Toronto. Luckily, I was right condo prices went down during the pandemic. And due to the mass exodus from urban condos, and prices for suburban houses Rose 30 to 50% of the pandemic. So luckily, this family member took my advice. Back in February each week, we couldn’t believe what any property was selling for everything was selling for crazy prices. We’d be lucky if there’s only four offers. We wouldn’t be surprised if there was over 10 offers for pretty much everything we’re looking at. But now the pendulum swung the other way. We can’t believe what discounts our investor clients are getting. Plus home inspection and financing conditions. It’s totally crazy times we just had a client buy a huge house by our standards. I know for many of you that chose this but for Verona or buying property investment property especially single family homes 1900 square feet is huge. This property was one and a half stories and welland Ontario and we got it we picked it up for for probably around $150,000 off the price. You paid for it and below five hundreds, right? So we paid a little 500 Is this house probably would have gone for over seven and much earlier this year. So when you include the basement so 1990 square feet doesn’t include the basement but once we include the basement, there is sufficient space to convert the single family home into a triplex so three units, three apartments. It will all be done with permits and whatnot. And that’ll be all done within the existing structure. So the plan is to triple the housing supply one property without a cent of public money, all in our clients looking at spin around video hundreds to have friends over $5,000 per month when done. I’m calling that a winning buy and hold investment, cash flowing property with opportunity to refinance, take much equity out, coach, Chris will be Captain Hook. And I will detail this deal on a future YouTube episode. So we can go through the deal in a bit more detail. For example, I’m a real estate geek. So the fact that having data points like for example, this property, the sellers accepted our first offer. So it was a bit of a shocker. Yes, a bit of a shocker. I’ll be blogging more about the subject of real estate investing, and including all the drivers for the decision to invest in real estate. I enjoy researching, I enjoy writing, I enjoy sharing. And I have to do a lot of research as well, because my wife and I, we decided to build an eight figure real estate portfolio. And that’s only very nice money. We are the only investors, we have only one property that’s joint venture, student rental, one student rental out of our portfolio, it’s worth, it’s in the figures, the rest of our investment risk reward is all ours. It’s just our choice not judging anyone else’s choices. It’s just we have the capacity to do so without having to take on outside investment. And, you know, we have enough going on in our lives. We don’t want we don’t need partners in our real estate, besides the bank. So yeah, that’s probably work. I’m always reading up on the news, usually from paid sources to avoid fake in mainstream media because I don’t want people making money off telling me what I want to hear. I’m a truth seeker. I don’t care if the truth upsets me, I still want to know the truth. And often paying for information is the most efficient path to finding quality content as we show we have business coach Marianne Gillespie, who I been working with since around 2014 back when there was no zoom, and manage that because Maryanne or coach MMG mag, as she’s known, we did coaching over the phone, and she lives in Ottawa, so I never really got to see her to see her face. But as for as long as I know her, she’s been running long distance and high energy. And ever since meeting Marianne, she’s beaten cancer. Again, I couldn’t I wouldn’t have known that she was dealing with cancer because it was all over the phone. Because she didn’t tell me she had cancer nor she’s dealing with it. And she lost 150 pounds. Again, I didn’t know her over the phone.

 

Erwin  

She never complain never whine never told me about it. The focus is on me and my business growth for the first time publicly on the show. But two three years ago, Marian shared with me and our audience. 17 listeners are her parents died when she was 16 years old, and was homeless for some time in Ottawa, so not the friendliest of climates. On our last episode, about a year ago, Marian shared how she completed her first Ironman Triathlon in Tulsa. I don’t know what state is obviously in America, it was done during the lockdown and pandemic. Remember, she has cancer, she had cancer, so she’s immunocompromised, and only based on the timing, she only had one shot of the vaccine, but she still travelled to Tulsa and finished an Ironman Triathlon, which takes the requirement is to complete it within seven to 1718 hours. Fashion that 17 to 18 hours of biking, running and swimming. Again, that was over a year ago. And then this past weekend, very and not only completed, competed, completed, competed in the multiple law, Ironman, but she won first place. I don’t know how she does it. She’s an iron woman. She’s an amazing human being. She’s also a successful realtor, such as some real estate spin to this show. She’s also a pretty good accomplished real estate investor. So obviously an entrepreneur, he’s a member of several of the most exclusive mastermind groups in the world, therefore has a lot insights into the market economy. And she gives her updates as well on the economy. Real estate markets if you’re not inspired by the show, I don’t know what will please enjoy the show. Marianne let’s keep you busy these days.

 

Mary-Anne  

What’s keeping you busy? Everything work triathlons, Ironman, volunteering, you name it and discovering the world endless possibilities

 

Erwin  

and you find time for all this

 

Mary-Anne  

you know I I’m really good at time management. I guess I treat time like a currency. That’s all I treat it like a currency. I’m like it’s it’s a it’s a currency to me. So it’s like time given time spent that’s how I look at it.

 

Erwin  

What aren’t you willing to spend this currency on?

 

Mary-Anne  

Um, you know, the older I hate saying that but the older I get, the more I don’t want to spend it on small insignificant, you know, irrelevant conversations like it’s weird. Yeah, it’s just weird. It’s like small talk like going to an event and you know, having just a lot of small talk and not really learning much to elevate or grow myself like you get you get really picky about what you’re getting back for the time that you spend. So that’s that’s really what I want spend my time on is anything that’s not growing me at this point. Cool. Yeah. Trouble. Yeah, like I mean, you know, I was just saying that, you know, went to a mastermind and it was just as when you’re the smartest person in the room of a mastermind, you know, is that really the best use of my time in as a business coach myself, I’m like, that’s not the best use of my time. I didn’t really get much back from it. So that type of currency just yeah, that doesn’t happen anymore.

 

Erwin  

And there’s masterminds everywhere. So can you give some background or context on the masterminds that you belong to?

 

Mary-Anne  

Yeah, I belong to about five or six really great masterminds in the different, you know, one of my favourites, obviously, I love Dan Sullivan. He’s a strategic coach. And he has done a great job, you know, with what some of my favourite masterminds, because it’s exposed me to as I was just saying brilliant minds, like Peter Mantis, and other people who are really, like massive thinkers. And sometimes you can like walk around and think I’m like a really big thinker. And then you sit in a mastermind, and you’re like, oh, boy, I’m like, the smallest thinker of this group. And you know, that to me, charges me up. So those are the type of masterminds I’m part of, and some of them are big. And then I’m part of a smaller mastermind, where there’s 10, business owners, and we look at each other’s businesses, and we evaluate them. And we really help each other move forward and support each other. And some masterminds that I’m part of are just simply supportive. You know, sometimes, as CEOs, the best masterminds are the ones where you have and I think you mentioned this earlier, where you have, you know, similar problems and challenges, and maybe you just don’t have the outlet even to discuss them. And you know, and it’s hard, like, Who do you go to, you don’t want to go to your spouse, you don’t want to go to your friends, because they might understand, and you definitely don’t want to go your clients. But you might have that point where you’re like, Look, I’m just having like, a really hard time retaining staff or something like that, or I’m having, you know, I’m having one of those months where, you know, I feel like everything is just crap and not going right, like, who do you talk to about those things, it’s sometimes it’s not always great to be in growth, growth, growth, growth, mastermind, sometimes the masterminds you want to be part of are the ones that are just gonna be like, I just need to like vent that there are months where I just want to throw in the towel. And you know, and that’s okay to have that vulnerability and those masterminds have become something that I really value is the masterminds where we’re, we’re not complaining, we’re just a little bit more vulnerable with each other.

 

Erwin  

Right. And that’s not easy to come by in like, casual masterminds usually has been blocked commitment training, and this is my own experience.

 

Mary-Anne  

Yeah, you can’t, you can’t like the more casual they are, the harder it becomes to get that trust and bond and drop all those barriers and drop the egos and drop the you know, on this I’m not gonna it’s like you just be raw and be real. So it does take a while to build that trust foundation.

 

Erwin  

It was cool. Once you have that trust in the these I feel a lot people drop the ego. And then it seems like everyone’s humble. Yeah.

 

Mary-Anne  

Well, we’re just a little like, we’re all hustlers. You know what I mean? Like, we’re all hustling, we’re trying to get to where we need to get to and it’s like, you know, there’s no point. I mean, there’s no point in having an ego deep down inside, we’re just all exactly the same journeys a little different.

 

Erwin  

And I’ll readily admit things when I didn’t when I what things I’ve done for ego. I’ll even say to my mastermind. This makes my ego happy.

 

Mary-Anne  

Absolutely. Absolutely. I’m with you on that one to self awareness is a big deal. Self awareness is a huge deal, or at least I think it is. So yeah, I like it. So that’s my favourite thing about masterminds. And it does take a lot of, you know, you have to be prepared to be like, Hey, I don’t like this mass, right. I’m out. You know, exit easy exit fast. If you don’t like it. You’ll know, first mastermind session.

 

Erwin  

Are there any entry level masterminds you’d recommend folks look into? Yeah, like,

 

Mary-Anne  

I mean, I guess if somebody’s looking, okay, I again, I really liked Dan Sullivan. Because, you know, I do like that you can his packages, like you can bop in anywhere. Like I don’t fly to Chicago and do it. I can do England, I can do anything. I think like with Dan, he has entry level. So he you know, when I first started dabbling into more professional masterminds, that’s where I went, right? So you and I were just talking about EO but you know, a strategic coach, it’s just it’s a nice entry level mastermind that gives you a lot of opportunity to elevate it and go to a whole different level. So, you know, when I started there first I started at the very basic and I was like, let me just see, you know, test the water. Let’s see if I like this. And you know, I did, obviously I did. So

 

Erwin  

yeah, so we came to Ottawa just to do this podcast with you. And I was just thinking, as you mentioned that you had mentioned how Strategic Coach, you can fly in Chicago. In England, there’s no options here for High Level Mastermind.

 

Mary-Anne  

Well, you know, you can try it like I think if you look we were talking about this is that, you know, Ottawa can sometimes be vanilla, you know, you’ve got different flavours of ice cream, Ottawa would be what I would refer to as a vanilla ice cream city. It’s not to me, I don’t find it’s the best place for mastermind. I find that it’s it’s very high population of government workers in the city because obviously we’re kind of like Washington, right? So we have a huge amount of government, huge amount of city like so, you know, just the amount of actual business owners that are, you know, that would be appealing is I think far significantly less here. So a lot of us do go elsewhere, and it’s just I haven’t had much luck. finding great masterminds in

 

Erwin  

Ottawa. Right? It’s one of the benefits of me living the GTA is that you know, AEO is, I think six, seven times the size of the Ottawa chapter. Yep. So we don’t have to go far for some pretty good people.

 

Mary-Anne  

Yeah, you don’t have to go far. It’s like, there’s always a toss, though. Like, you know, you have Ottawa, which is beautiful. I mean, it’s a gorgeous. Yeah, it’s like beauty. Like, I mean, you know, it’s a struggle in this nice building, man, like, you go up to like, a, like, within 15 minutes, you know, I could leave my house for 15 minutes, I can be up in Gatineau riding a bike swimming in the lakes, like I’m there all the time. So it’s like you have this massive playground. If you love the outdoors, if I go to the GTA, I would lose all that. So it’s like we’re you know, so that’s the battle that I was gonna hop on an aeroplane. 45 minutes later, you’re in the GTA. So it’s kind of like that’s what I like about it. I don’t mind it so much. I wish there was something a little bit more localised, that, you know, some of the big business owners would pull together and start doing some great creative masterminds. Maybe it’s something to eat, I don’t have the time to organise that stuff. So I’m like, and it’s not my jam. But I like to participate in them. I don’t like to organise them. So I don’t mind hopping on an aeroplane going 45 minutes and travelling somewhere or going to Chicago, it’s an hour and a half flight. And it’s totally my favourite city. Like, I love Chicago. Sound like, I don’t like doing that. So to me, it’s a little bit of fun to do it. And it’s Ottawa like, you know, as little as it is, is freaking gorgeous. So

 

Erwin  

we look in strategic coach, and that was one of the barriers for us was that there wasn’t much of a presence in Toronto.

 

Mary-Anne  

No, I mean, it’s, it’s not a bad that I mean, that’s where Dan lives. So I mean, it’s not bad. It’s just you know, what, they cater to a very niche group, very niche group. And what

 

Erwin  

you said like, the more serious the mastermind, the better attendees were the stronger attendees, people with larger businesses will be in Chicago, for example. They won’t they won’t be meeting up in Toronto

 

Mary-Anne  

now. And then if you go to England, you have this whole different exposure businesses, and you have like, so, like, it’s amazing to do the stuff that they do there. It’s absolutely fantastic. So but there are like, you know, there’s pocket and masterminds. The, the hardest thing is about a mastermind is is like the I guess the easiest thing maybe is is that are you measuring, are you given the tools to take your business to the next level, that to me is like I can sit down to have jams or talk with any CEOs and business owners, we have some really genius ones in our city. So I mean, they’re pretty lenient with giving their time out. So there’s amazing talent everywhere. But I you know, the difference between a great mastermind, and in a Business Mastermind, they’re different, you can have a great mastermind, where somebody hosted talks and syncs up the whole group and like your brain story. But then if you don’t have any accountability, you don’t have any structure in place to take your business to the next level by the next time your groups meeting. That’s where the accountability comes in. So I’ve been part of both and I love those masterminds, where it’s like, you’re given tools to say, next time we meet, you know, and that’s kind of how we do it at strategic it’s like, once a quarter like you got to bring your you got to bring your game like you cannot, you will be odd if you’re sitting in a room in a small group, and you have not done anything in the quarter. So there is an immense amount of pressure to to bring your business next level each quarter. And that’s, that’s a great mastermind, in my opinion. Cool. Yeah.

 

Erwin  

If you wanna talk more on the business stuff after we’re done recording you’re doing so this is real estate shows with ultimate real estate. Oh, yay. I love it. What can you tell us about the real estate market? So today’s June 8, just to give some context? Well,

 

Mary-Anne  

I’m only kidding. I was only a few months ago. I told everybody I weren’t actually I don’t know how like, it’s just it’s not hard to predict what’s happening. Like if you really study some of the key focal points, but I was laughing the other day, I said, the two words that I’ve been dreading to hear again, in real estate, and I just started hearing them in the last week or two is the word lowball. And I’m, like, Dad, it’s back. All the it’s like I was saying, it’s like the Wizard of Oz. And you have like the Munchkins coming in, and they’re like, We represent the lowball kids. And they’re just like, marched into the front line. They’re like, here’s our chance, guys. And they’re like, let’s lowball. And I’m like, so for me, I’m like, oh, man, Are we seriously gonna start lowball you again? So, you know, opportunities. I’m very optimistic. I think that there’s an opportunity in every market.

 

Erwin  

Do you think, though you are a realist, I am a very realist. You’re not You’re not just like, oh, sunshine, rainbows everywhere? No, no, I’m like,

 

Mary-Anne  

like, if you think he’s gonna go up again, you’re crazy. But I also was like, I don’t understand why people rush it. Like, it was crazy when you watch what happened, because my background is also like, I’m fascinated by neuroscience. And so, you know, I study what happens with the brain. And what happens like what happens? Like it was crazy, watching from the like, watching people’s brains go the FOMO the fear of missing out for two years, and it’s like, if you watch what they did, it was a colossal mistake, colossal mistake. We were guinea pigs in this terrible experiment where they decreased the rates three times in March 2020. Like Have you watched it was like kaboom, kaboom, kaboom. It was like a week and a half between three rate changes, and the rates were already pretty spectacular. So we were already trending into a seller’s market. And it was like, I don’t know why they did that. I have no idea why they did that. I know that the GDP and you know, our housing industry, we are the number one country for, like for our housing industry

 

Erwin  

as a percentage of GDP.

 

Mary-Anne  

It’s huge. It’s terrible. Yeah, it’s

 

Erwin  

really a sign of a good healthy economy.

 

Mary-Anne  

So I get it that we had to keep our hosting industry going, but it wasn’t going anywhere. Like, why did they do it? Like, I’m like, Why did you panic every week and a half.

 

Erwin  

So it was like, That stimulus housing market did not need that much. They

 

Mary-Anne  

didn’t need that much stimulus. And they didn’t need to keep it for two years. Like it was totally irresponsible. What they did, they could have stopped it. After six months, they could have adjusted it. And they just totally made this like situation where it was like FOMO fear of missing out everybody was like, oh, Ron, rates rates rate, and we were watching the prices go up 1020. And then all of a sudden, it was obvious, we called it in this Aimia. We said, Look, you’re gonna you know, December of 2021. I said it on a podcast, I said, we are going to have a big problem. I said, like we are shutting down in January, Christmas, everybody had their first Christmas after two years to spend with friends and family. So they buggered off. Nobody was interested in real estate. So there was a pent up newness, but then you shut us down completely in January of 2022. I mean, it was just a few months ago, like you know, so we were shut down, which stopped the real estate market, which caused a massive pent up problem. And what they should have done is they should have changed the rates at that point and said, Okay, we’re going to increase the rates so that when so there isn’t a big explosion when we come back. I mean, you can see it, I saw it. So then that’s where the rates went up 20% In a lot of cities in February, and it was crazy, because you had all this pent up issue. And then it bounced out starting in March the last 90 days. So we lost all the profit, or we didn’t lose anything really. It just bounced out the February. So you knew like you could see this stuff happening. So it was very, and I don’t think people are stupid for entering into the market, because the payments and the interest rates, you can run the numbers 100 times. But I think what they’ve done is they’ve caused a massive mess. And if you follow what they’re doing with the prime rates right now, and you go back to what they did in 17, and 18, it’s the same thing. They’re doing the exact same increments, they’re doing the exact same thing. And it worked back then. But the prices weren’t the same back then. So you have to kind of look at the balance with that. So realistically speaking, I don’t believe that they have a clue what they’re doing at this point. So I think that, you know, my next guess is is what are they going to do in July? So I believe that they’ll finish the year at 3.95. And I think that’s what so we’ll have another quarter of a point. The question really becomes, are they going to do it in July? Or are they going to wait till September? My guess is they’ll probably I think they’re going to wait till September. I think not every area across Canada is dropping as fast as they want it to some areas have had no drops in pricing. Some have had 3% Some as 6% Sometimes 16% Barrie Ontario has had massive I think over 20% Drop in pricing. So Hamilton Yeah. Hamilton as well. So article, so if you’re in Ottawa, yeah, we’re about 16%. So it’s like, you know, when you’re looking at that the adjustments that they wanted happened. So not everywhere, though. So you know, you’re looking at I think it’s Brampton hasn’t changed much or like, you know, yeah, certain areas have really not adjusted right now has certain areas. But I mean, certain certain areas haven’t. So it’s those areas that I wonder if they’re gonna say, Okay, we have to keep going. Personally speaking, I think we’re dealing with very uneducated people, I think handling where this is gonna go based on what they’ve done before. I think they’ll wait till September, and then they’ll do the quarter point in September. And we’ll finish here at 3.95. And we’ll move into a buyer’s market,

 

Erwin  

how long how long do you think for the bearish market?

 

Mary-Anne  

I would say two to three years, two to three years is a is what I’m guessing at this point. I can’t see us getting out of it. Because, you know, the inflation is here to stay. Like I mean, I not really sure what people think or there is gonna happen. I mean, when all of a sudden they’re gonna be like, Okay, we’re gonna reduce, like, they added a gas texture and all this, like, you know what I mean? Like, this is so crazy the stuff that they’ve added to to make inflation worse. And I think at this point, people are financially okay. Like, they’re, they’re going to slow down their spending, they’re going to travel less, they’re going to you know, do whatever, you know, they spent a lot of money in the last two years. And so I think it’s going to be here, the buyer’s market should be about two to three years.

 

Erwin  

Yeah, totally fun. What do you think it’s gonna be for realtors in

 

Mary-Anne  

what do you think it will do for realtors? Yeah,

 

Erwin  

you’re closer to it than I am like, how many realtors are do we gain a lot of realtors in last few years? Oh my gosh, no, we’re gonna lose something in this.

 

Mary-Anne  

I’m hoping we do.

 

Erwin  

Your businesses.

 

Mary-Anne  

We work with great realtors and we love them to death. But we’re seeing that okay, this is a skill driven market. So you have to remember is is that even pre COVID, what we had is, we were in a great market for about three to five years pre COVID. So we were on an upswing anyway. So it wasn’t tremendously difficult to be a real estate agent pre COVID, the few years before COVID. So if you’re looking at realtors have had their licence for about five to seven years, they’ve never experienced a skill driven market, a skill driven market is very challenging. It’s it’s frustrating, it’s exhausting, it’s consistently you have to work twice as hard in the skill driven market. So it’s basically you know, we’ve entered that. And so what we’re seeing in our company is tonnes of Realtors reaching out to us going, what am I doing? Like, I don’t know how to do this. I don’t know what to say. We had a team owner say that they had a realtor on their team for a year and a half that came to them the other day and said, Listen, I don’t know how to put conditions in an offer. Yeah. I like why, what is this? And I’m like, Oh my gosh, that’s they literally just wrote offers, they’re like, with no conditions are like, and I’m like, oh my god, this is crazy. So you know, you’re gonna see a skilled your market. And I think, I think a lot of it, yeah, it’s gonna be

 

Erwin  

a presentation in person before.

 

Mary-Anne  

They don’t even know how to write clauses. And I’m like, they don’t know how to navigate this. So they don’t know how to get clients, they don’t know how to, you know, if a seller, you know, they don’t know how to explain the market. I mean, you could ask like, Soul listing, they don’t know anything. And it’s like, so you’ve got this layers market, and they don’t get it. And so it’s like, and it’s moving so fast that it’s like so what you’re seeing is this, these brilliantly experienced skilled driven realtors who have sat back the last, let’s say, seven years or five years and said, okay, like, you know, like, they’ve watched this change in real estate come up the pipeline. And they’re like, man, these kids don’t don’t know how hard it is. Now, all of a sudden, they’re like, they’re up here. These skills are Realtors going, I know how to handle this. I have a client who has 188 closings happening right now. And they have 188 closings and their market dropped 20% and pricing, you tell me like what kind of skill you need to navigate through that you need a massive amount of skills to navigate through that a normal realtor would probably be like, if they had two closings that weren’t going to happen, they lose their mind. They’d be like, ah, you know, what do I do? So you have to be really, I think what we’re gonna see is a big drop in real estate agents, for sure. So you will see a bunch of them that were, you know, the part time, the part time ones are gonna go, this just isn’t worth it. Like it’s not worth it, they’re going to have to work with clients a lot longer. So you know, you’re going to work with buyers and sellers now, like one thing we’re seeing as well, is people coming to us going, Okay, I would put a listing on the market sell in five seconds. They don’t know how to price, or they’re like, What do I do if? How do I market a property for 60 days? They don’t know. They’re like, what do I do after a week? Right? After a week? They’re like, oh, like, what do I do? And I’m like, Well, you have to have a marketing strategy. Well, what’s that? So So you’re seeing this really big gap. And I’m not saying the gap will get bridge, it’s going to take a while and you’re going to see a lot of real estate agents who had a very lucrative past few years, they’re going to probably have our clients, I’m not going to brag, but I am going to say our clients like they’ve got us pushing them behind. So we’re navigating this, we knew this was coming, we prepared to November, we said June, July and August, we’re going to be slower, it’s gonna hit balance, and then we’re gonna move into likely a buyers market in the fall. And we said that since November, so they’ve all had a chance to prep for it. We work on the skills every week. But I think yeah, what we’re seeing is coming down the pipeline, a tonne of real estate agents reaching out to us just going help with skills, like what are we doing? How do we price houses? How do we market houses? What are we doing? And that’s good, because the consumer needs better representation. They need better representation. Yeah, so

 

Erwin  

I’ve heard I’ve heard lots of Realtors getting thrown under the bus for like, like the you’d like you mentioned, prices have dropped 20%. But you signed your contract in February, for an inflated price. And now all these people can’t get financing,

 

Mary-Anne  

they can’t get financing. And then they go to a real estate agent who’s making, let’s say, $20,000 commission on that deal. And they go, What do I do? And if the realtor doesn’t know, because they’ve never really navigated through something like this, then you’ve just realised that the person that you hired, like, let’s pretend like I mean, if you, let’s take it out of real estate and say like, if you hire somebody to do brain surgery on you, or give you a, you know, a prosthetic leg, and then all of a sudden you’re like, and the leg goes on you or whatever the case is, and you’re like, oh, it’s not working, and it’s not attaching. And then the person who designed is like, Oh, I don’t I don’t know what to do if it doesn’t work. I mean, I just am ated I just don’t know, like that, like what a terrible feeling that would be for a consumer. That would be, you know, terrible. So a lot of realtors are awesome. But at the same token, you know, I don’t think many of them were really looking at the economics portion and understanding. You know, I think this is an opportunity for every real estate board. Unfortunately, it’s like speaking to deaf ears. But I think this is a massive opportunity for industry to frickin change. Like, you know, we’ve been fighting this a long time, it’s way too easy to get your real estate licence. It’s a joke. And it’s like, and you know, I am, I fought boards on this I have, you know, gone to Rico, I’ve gone to Korea, and I’m like you should not be able to get your real estate licence is easy, you should not be able to, you know, handle these type of transactions, if you’re not familiar with a more higher level of understanding of real estate, you know, you really need to understand real estate, it’s not acceptable. If you’re talking to a real estate agent today. And they don’t know, you know, how much the prices have gone up in the last two years, and they don’t know what the economy is doing. And they don’t know the average effects, or they don’t even know average days on market. And we still

 

Erwin  

put some onus on the consumer, for picking that realtor, we do but like

 

Mary-Anne  

the consumer consumer, like, you know, you got to remember sales. And then you also have, you know, the consumer is also concerned about money. So sometimes the consumer doesn’t see the big picture. And they have somebody that sits in front of them. And they say, well, realtor, Asus is going to represent you for 5% and list your house. And then your friend who errorCode has their real estate licence says don’t worry, I’ll do it for three. And the consumer does what because the economy is, you know, inflation, the cost of living has gone up the consumers thinking, wow, you know, I have a million dollar house 2% is not small change, and they’re like, I can get 2% more on my pocket. That’s amazing. And so I think the message, you know, comes from the real estate boards to start, like, I think the consumer knows, like, you know, the amount of great knowledgeable, highly skilled realtors, like, you know, we’ve been saying this for years is gonna go to people with teams, people who invest in growth and development like your team does, like, there are many, many teams out there who are very serious about growth, very serious about numbers very serious about making sure that they their clients are with them for life. So sometimes when you dangle money at people and say, well, they make poor decisions. And that’s, that’s been since the beginning of time. So the real estate board needs to do a way, way better job at, you know, making the standards for hire. And they need to also the biggest thing that we’re advocating now, which I firmly believe is if you do something unethical or illegal in real estate, it should be an automatic despairing of your licence, it should be automatic. And there are way too many incidences that have happened recently, and over the years in real estate with realtors in Ontario, even where they’ve gotten a slap on the wrist. And they’ve done things that I just would be like, that should be an automatic despairing of your licence. And then if you have things like that, and you’re like, and you have a standard, and that’s all they have to do is just say, if you do something that breaks a rule, and because you didn’t know the rule, or you did something that you know, directly caused client irreparable harm, like advice on the wrong decisions is that you lose your licence for good.

 

Erwin  

That’s happened so many times.

 

Mary-Anne  

I’ve seen that happen so many times,

 

Erwin  

you so you sat on the you sit on the board.

 

Mary-Anne  

You see it all the time. But that’s the thing is like there is a person who forged 170 I think 172 or something, something like that. It was an obscene amount of forgeries on contracts of signatures. Obscene, it was a public case, and the person got a six month suspension of their licence. If you make a conscious decision to forge hundreds of signatures on a contract, that’s it, your licence should be gone, you made a conscious decision to do something that was completely unethical, you lose your licence, but to get only a slap on your wrist for six months. And you know, in a miniscule fine, and the person never they just transfer their their brokerage licence to a family member. And they continued for six months advising and doing whatever. And I was like, that shouldn’t happen in our industry. And when that’s your standard, you know, and then can you imagine what else is happening? So hopefully, I know, that’s a bit of a rabbit hole. But hopefully, hopefully, you know, maybe somebody in the real estate community will hear this and be like, You know what, it’s a valid point. There’s just not enough penalties for people who are doing things and advising clients that are hurting them.

 

Erwin  

It’s crazy out there. I heard something yesterday about professional services, businesses, and the highest level that you can offer in terms of services to be someone’s strategic partner. Yeah, or like a board member to there. So for example, we, you know, we are most of our clients are real estate investors, they can own three property five property, whatever. And then how I view us as our services is that we’re like a board member for their investment business. Yeah. And that’s our relationship. Yeah. And when you have that kind of relationship, it’s all about long term it is alright, when our thing is to protect our client, make good decisions, get make good, strong investments decisions, whereas I find I’ve even seen influencers say, oh, go get your real estate licence and start some pre construction condos. Yep. And like, you make all this commission like, I’m sure there’s a whole bunch of people, not all of them, but a whole bunch of realtors who got into it, just chasing money.

 

Mary-Anne  

That’s all Yeah, it’s funny because the two things that you know, I think we have in common right now. thing is, we don’t coach realtors who just want money? Yeah, we’re proud of them. And we have century clubs. And you know, we’re they work very hard, but they have bigger, they build businesses, just like you said, your team is very similar to the ones that we coach and like, I love your team. It’s a growth oriented team. But your team is like, astronomically smart, like very, very intelligent. And you know, it is continual learning. It’s continually, you know, participating in the growth of your clients. It’s really it’s treating your clients like, there are like partnerships like you guys treat your clients like that is a very different environment than what you see like you’re not chasing GCI, you’re looking at finances, because it’s a business, but at the end of the day, and you have those goals, but for your team, it’s such an intelligent team. And that’s, you know, where the industry is going right now. And that’s also, you know, where I think, you know, that’s where we like to work with clients, when we get a phone call from somebody, I can smell it a mile away, when they’re like, Oh, my GCI is down and then they’re like, I just want to like, you know, can we coach with you guys, and like, let’s get our GCI up. And it’s like, no, like, no, because what’s going to happen is, is if you see your clients as just a meal ticket to GCI in the real estate industry, then you’re going to always be chasing GCI, but you’re never going to have their best interests at hand. You’re always thinking about your paycheck or your GCI. And you’ve got to see people as each individual that you do business with, just like your team does, each individual that you do business that you represent, is a human being that has life goals, like this is their biggest financial investment of their life. If you don’t even know what your market’s doing, and you don’t have a clue where it’s going, because you’re not investing that time, then that’s something that I think is not in alignment with where we are as a coaching company. So that’s why we spend so much time studying the market and educating our clients and say, here’s what’s coming down the pipeline. And we get the calls almost on a weekly basis from our clients, just saying, hey, you know what, I don’t know how you predict this stuff. But they’re like, it’s awesome. You know, and like, when we said, back in November, we’re like, it’s going to be a skill driven market for the rest of like, probably your careers, you know, at least two to five years. I’m excited. I love it. I’m like, let’s go, let’s

 

Erwin  

1. Like if I like working for my money, well, I

 

Mary-Anne  

love working for it. But it’s also challenging. It’s like, you know, you have like, when you look at it, like look at Ottawa, if you had a 40% increase in 60%, you know, drop in the increase in prices, you’re still looking the average seller’s market is about a 5% increase in prices per annum, and you’re still looking at it, and you’re going, Okay, well, you take the 16, away from the 20. And you’re like, you’re still left with a substantial over 20%. Still, you’re left with as a profit that you didn’t really do much in the last two years to get that you take that over two years. So you’re like, you’re still 11 12% per year of growth in your pricing. And that’s amazing. That’s times and I’m like, what, like, when did that become bad? I like you know, but being able to articulate that to a seller who’s sitting there going, Oh, I lost 20%, you didn’t lose 20%, you did not lose 20%. Okay, you didn’t have it things, the real estate goes up and down, just like anything, but it’s like you didn’t lose it. You know, it’s gonna come back to you know, at some point, but the reality is, is like, and that’s what I think is exciting. We’ve seen a snapshot of where pricing can go, it will go back there, not for a long time, but it will go back there and you look at it and who knows Canada’s a bit crazy sometimes, you know, maybe it will go back there. We don’t know what they’re going to do with the interest rates in the future. I mean, it is it is unknown. So I think you see a snapshot. And when we talk to sellers, you’re like, Hey, listen, this is like the best market, you’re still capitalise on great profits, excellent interest rates, in my opinion, still, and it’s like, make it rain. It’s a perfect market, more options, than that’s

 

Erwin  

to toot our own horn, in December, January, February, called down our list and told everyone, if you want to sell the next 12 months, this is time to sell. Yeah. And we had some clients take us up on that, and they’re very happy for it.

 

Mary-Anne  

I said the same thing. I was like, you know, what do somebody said to you, it was a seller the other day, and he was like, sorry, I agree. And I don’t mean to laugh, but it was his face when I said this, and he was so angry. He’s like, Yeah, I’m just like, really angry. Like, I should have sold them. February. That was the best market ever. I said, Okay, let me tell you something, if everybody knew February was gonna be the best market ever to sell would have been the best market to sell would it? And he looks at me, he’s like, fairpoint he’s like I said, Yeah, I said, it’s like, it’s not gonna you know, if we all do, we rushed out. We were like, hey, guess what, it’s February is gonna be the Rockstar time to sell go ahead and do it. You’re gonna make so much money was gonna be incredible. You’d have so much inventory on the market, it would have been the best time so he’s like, that’s a good point. I said, take what you have. I said, see it as a whim still. And I said, You know what, it’s reflective. Not only now, are you getting that profit, but you’re also getting about 2% off purchase prices now in negotiation. So it’s great. It’s wonderful. And you’ve got some sellers who are totally panicking right now. So you’re getting even better deals. So I don’t know about you, but I’m like, I’m like got my public company ready. I’m like, let’s go. I’m excited over the next two years, like What is up?

 

Erwin  

I want to say to you, because just to give the listener some context, I think days on market in my market in Hamilton, I think we’re I think we’re just under 50 days on market, average days on market. And I think today, today’s placed a little bit a little high. So if I go back to like, February, I think we’re like 14 days. We you bet that year.

 

Mary-Anne  

Yeah. You were like you were less than two weeks, you’ve moved in your area, Hamilton has moved into a bar smart Irish bounce market right now. So you’re a bounce market? You’re actually I think you’re pushing over 60 days? I think so. So with that being said, it’s just

 

Erwin  

something. I don’t know the latest stats. Yeah, cuz I haven’t looked at base stats yet. So yeah. Is it already 60 days? Yep. So you’re sitting here sitting here roughly as well.

 

Mary-Anne  

It’s about that here as well. I mean, it’s see the thing is, is the hot, beautiful houses, like the gorgeous houses, they’re still flying off the market, we’re still hearing aid offers six offers, you know, what we’re seeing is we’re seeing some sellers, who are who are trying to get February prices. And this is the frustrating part for consumers. But yeah, they’re trying to get February prices, and their agents aren’t educating them, or they don’t have the skills to educate them. Again, that’s a skill driven, and we just had a client who is so devastated. There was eight offers on the property they offered 300,000 over asking, and this is why I think there needs to be some changes. So anyway, the houses on the market, we are in June, we all know what the markets doing, you have to live in a squirrel hole not to understand that. And so they had it on eight offers this offer was 300,000 over asking, I saw the stats and the comparables, it was a great offer. And the agent called all the realtors and said client didn’t get what they wanted, they’re pulling the house off the market. I hate that, yeah, you should lose your licence. I’m like, lose your licence. Because if you have a seller that did that, and put all those people through that, put the realtor through that too. But the realtor should have known better if that was the strategy that you had, that’s not okay to do that to people, like in my opinion is not okay to do that to people. There are laws in place that say if you get everything you want an offer, you have to sell the house, this is not, you know, putting a house on MLS and doing stuff like that is it ruins our industry, but it also is really poor poor on a human being to do that to other people. You know, you have eight families that fell in love with your house, and then you just literally because you’re greedy. And you know, and you had an expectation and you played a game with with the public. This is why so many buyers right now, like that’s going to have more of an impact. That type of behaviour has more of an impact on our market. Because think of all those buyers who are devastated.

 

Erwin  

And they think all things were ignored. It looks unprofessional.

 

Mary-Anne  

It’s unfair, it is unprofessional. It’s like there are laws in place that say if you put a house on the market, and you advertise a price, and it’s you get an unconditional offer that matches everything. You know what, you’re not supposed to change your mind. Like they do that? Because if you think about that, how do we know that that realtor didn’t put that that wasn’t a friend of the realtors that put their house on the market just to get more clients? We don’t know that the consumer doesn’t know that. I don’t know that. So you know what there is laws and rules in place that are being executed that prevent that from happening. And you know what, nobody’s reporting it. And, you know, we’re just watching stuff like that happen because it’s a game that they’re playing. So so there is some challenges right now as

 

Erwin  

well as the open bid thing gonna happen.

 

Mary-Anne  

Yeah, so there Oh, that’s a hot topic. Yeah. So open bidding you know, is BC so BC is launching, you know, BC is the first province I think that is like kind of putting it into place. So they voted that they’re going to they just don’t have the date yet. So it is going to happen in BC. They just don’t know the date yet. The agency with the also implemented in BC is a mandatory mandatory cooling. I love so you talk to the agencies and sir okay with both of those. Yeah, associate our problem do you see there?

 

Erwin  

It’s like seller, like lost the deal. And like after like 30 days, day, like they walk they walk and like my poor seller.

 

Mary-Anne  

I know. I know. So so it’s kind of like, it’s like, but they do stuff like that. And it’s funny because it’s like I you know, I think there’s bigger things that they have to focus on in my way bigger, the bigger, bigger things you need to focus on. But

 

Erwin  

this is low hanging fruit. Yeah.

 

Mary-Anne  

I think the the open bidding process is ridiculous. It is the most ridiculous thing I’ve never personally heard of before. I’m like, you know, I think auctions are good. But there’s like, it’s funny because there’s a company called unreserved in our city and I think it’s in GTA as well. I’m like, it’s called unreserved which you would think means there’s no reserve pricing? Like it’s unreserved, it’s an auction. So, how in the world can you not meet the minimum reserve? Like it’s not it is reserved, like it doesn’t even make logical sense. And so you see all these people doing auctions, and first of all, like, you know, the consumers provide their their information, but then also they’re getting called afterwards, you know, saying, oh, yeah, so you know, nobody won. But here’s the thing. Do you want to bring your bid up? Let’s negotiate. I’m like, Okay, so is it working? Is it really working? So so we really look at that there are we do coach a company that is as spectacular, they’re going to be coming forward and launching out some great auction sites and whatnot. And they’re, they’re doing it the right way, a very regulated way. But there are some reserve reservation companies like an open bidding companies that just you know, to me, I don’t understand, if you have deep pockets, isn’t the person with the most money still gonna win?

 

Erwin  

The whole process is weird. Let’s see what happens if I have a million

 

Mary-Anne  

dollars to spend on a lake house. And I’ve always wanted to be on that lake house. And I have the most money out of all the people bidding, I’m just gonna keep bidding until I get to my million dollars. Like, to me, I don’t even understand who this benefits, because the richest will always win in that situation,

 

Erwin  

I think in theory should benefit the seller. Because if you look at how eBay is designed, it’s open bid. It is and how does eBay work? They work off a commission. They want the highest possible price. Yeah. So what did we fix? You fix

 

Mary-Anne  

nothing. It just encourages, you know, it encourages more higher prices and encourage that. I think the whole awesomeness about real estate is is that yeah, like you have a seller who has their house and like, you know what this is, it’s worked for centuries, you know, and if the more skilled your real estate agent is, as a buyer rep, the more you’re going to be able, there’s no better feeling for a client and a realtor to say, you know, going in and getting you know, I hear it on the phone now where they’re like, Oh my God, my clients so happy, we just got 25,000 off the price, or we got this. And like, that’s what real estate is sales, it is sales, you know, so to me, it’s like if I want to go to right now I can’t find a car. I’m like, you know, Ottawa has a very bad selection of vehicles right now. So it’s like, you know, if I go into a dealership, and there’s supply and demand or whatever, and we’re all bidding on one car, it’s the person with the highest pocketbook that is going to get it. So I don’t believe a system that penalises people for not having enough money to purchase things. I believe that’s crazy. Coming from a family of immigrants. I’m like, you know, I think to myself, I like seeing the little guy win. I love seeing the little guy win. And I’m just like, and I think if the little guy chooses an excellent realtor to represent them on their transactions, and they’re able to negotiate, you know, great prices for them, the little guy wins. But that little guy is never going to get ahead, if you have open bidding, and always has to pay the highest price humanly possible, right? That’s a one sided win.

 

Erwin  

And I’m pretty sure there’s been social studies on Open Bidding how egos get in the way. During that study, I think people are the people are bidding on $1 bill or $100. Bill, then people bid over $100 to buy $100 Because their ego has gotten away the competitive, of course. So to me, this has benefits sellers. Yeah, this is driving prices up. And then that that was what the government wanted. It’s

 

Mary-Anne  

not but again, there’s one thing that they the government should do the standard real estate, stay out of it, they should just like, bugger off, just stay out of it. And you know what, like, the whole real estate system, to be honest with you even look at open houses, I think open houses were first designed, if it was like 1906, or something like that in Texas. And they were designed literally after everybody went to church, it was a new home developer. And it was a sales rep. And he was giving away cases of coke. And coke back then was like, you know, a really, it was like a big deal. And anyway, and they had an open house. And then so it was on a Sunday afternoon after church two to four. And so how is it possible that literally so as time has passed, and we’re still doing open houses two to four and Sundays, like it’s so archaic our industry that I think, you know, one of the things that you need to start to see is the evolution of how we do things, but also the government staying out of it, evolve it so like, why are we paying board fees? Like you know, we talk about GCI money while there’s how many realtors in the GTA a lot? Yes, there’s like one in four people. For friggin people have their real estate licence? Is

 

Erwin  

it really that bad?

 

Mary-Anne  

Or one in seven? It’s like one or 417? It’s I think it’s one in seven employable people in the GTA have the real estate licence and majority 80% only do one transaction a year. That’s not the point, though. Think of this wonder last year? Yeah. What’s crazy is that all of them are paying monthly dues. So who’s really benefiting? Here?

 

Erwin  

Were those money go?

 

Mary-Anne  

Where do you think it goes? It goes to our governing boards and what do they do with it? Like honestly, they don’t do?

 

Erwin  

They’re not happy with anything for me?

 

Mary-Anne  

Yeah, like, I mean, it’s a whole can of worms. But I mean, like to be honest with you. I think that’s, you know, it’d be nice to see, I don’t know, I don’t own a brokerage, but I can only imagine the frustration level if you own a brokerage and you look at these things, and you’re like, what is our governing boards doing to like, elevate our industry to a different level, like what, you know, we don’t have great courses available to us to increase our skills like that’s, you know, to as a coaching company, I’m lucky we know because guess why, like, they come to us for that. But at the same token, you know, if I if I wanted to work for an organisation, I would blow them up and I’d be like, you know, Korea, Rico everything. I just blow them all up and redesign everything and say, Look, if you’re making that much money on fees and whatnot, what are we really reinvesting in him? set higher standards, huge way higher standards, this should become a very, if you’re making more than a brain surgeon, then you should have a standard that is just as high to get into real estate

 

Erwin  

and you have those problems with brain surgeons and preterm realtors.

 

Mary-Anne  

I usually say, this is a fair point, you know, all of a sudden, you’re like, what do you do for your past like, I was a brain surgeon, but screw that bad. All I have to do is sell 10 houses a year. And like, honestly, this is easy. But you know, I’ll just do this. And I’m like, yeah, that is the reality. Yeah.

 

Erwin  

I have to ask about Yes. What do you do for fun? Oh, my God.

 

Mary-Anne  

What do I do for fun?

 

Erwin  

I want to do for fun is does that sound like fun to me? Yeah.

 

Mary-Anne  

I mean, like, here’s the thing is, you know, I’m a firm believer in mindsets, right, like so. You know, you said, I am a realist, but I do arguments for fun. I do Ironman triathlons, and I’ve been doing them for over four years now.

 

Erwin  

So I get one of the distances for an Ironman

 

Mary-Anne  

so an Ironman like it. So you do three sports, you swim bike and run the total, you know, for an Ironman, I believe, Oh my gosh, I’ll go by memory. I think it’s 126 miles total all in.

 

Erwin  

So how long does the swim how long does the swim take you swim takes like,

 

Mary-Anne  

I would say for an Ironman, I can hammer out the swim in about 45 minutes. That’s a long time to swim. When you swim four times a week. 45 minutes is nothing. And that’s open water. Yeah, that’s the scary part is it’s it’s open water. And I mean, like if you go back to Florida, I didn’t Florida November, where it was historically, the worst swim I think they’ve had ever and we all got pulled in by Riptide. And there was like, there was 2000 people swimming and about five to 600 got pulled pulled in with safety. It was a riptide that they didn’t see happening. So it threw us into the middle of the Gulf of Mexico. So that 45 minutes swim turned into an hour and 25 minutes. So that’s how bad it was. And all was okay. Um, everybody lived, you know, you know, some people die in this but everybody lived but I mean, the race is over for like five 600 people within 10 minutes because they swam out. Nobody warned us in the pros even said it was the hardest one they’ve done. So you kind of go into the amass why you train so hard is because you know what, that 45 minutes became an hour and 25 minutes, and then your arms are like Jello pudding after because you’re like you’re swimming for your life at that point. So that’s the hard thing about swimming is is that you just, you know, one of the legs is always hard, but you just don’t know which one what you’re gonna get on race day. So you have to train for everything. So that’s why we go out in bad weather. That’s what we train in bad weather. You know, I always talk to, you know, water safety first. And I’m always like, you know, they warned us, they said, there’s only one thing that can go wrong. Every now and then. And they’re like, every three years. They’re like a rip tide comes in. And I’m like, Well, where does it come in? And they’re like, it comes up there. I’m like, okay, cool. And it came exactly where they said, so that one conversation really helped me in that race. Because like when you’re swimming and all you can see is you’re being thrown out into the into the middle of the ocean, and you’re seeing the distance and you don’t know what’s happening you’re looking at you’re going oh my gosh, like why is everything getting so far away when I’m swimming this way. And then all of a sudden you see people screaming and hanging on to the boys like Titanic you’re like oh shit, you’re like this just got real so and then you jump off when you’re done you transition you’re and you’re wet. So you have a you know, you got to your time do you have to go fast. So then you run your bike rack, then you do build you get on your bike and then you do about 112 miles on your bike depends on what kind of course you have. Sometimes the bikes, there’s flat rolling and climbing. So I just did Victoria and that’s like a 3500 foot climb. I could arm in Tulsa last May a year ago and that was close to 5000 feet climbing. So I’m doing more trauma blah. Mantra blog is next to three weeks from now and that’s a big climb so like say like I like the climb ones because I’m really good at climbing so but 112 Miles they’re on the bike and then as soon as you’re on the bike you rock your bike put on your running shoes and away you go run a marathon which is over 26.2 miles so it’s like so the heart the hardest thing really is is keeping your body going you have like 17 hours to do it all

 

Erwin  

and that’s a requirement because you up if you fail to finish if you do not right yeah

 

Mary-Anne  

if you don’t make yeah but you have to like hit all the time so like your swim has a time cut off your bike has a time cut off and your run does so even if you’re a super ultra fast runner if you go over the time limits in either of the first two categories you’re out so like you can’t sit in transition just be like I got all the time in the world you got to keep going so the

 

Erwin  

Florida swim a bunch of people got eliminated immediately Yeah, because no fault of their own really

 

Mary-Anne  

no fault of their own they well I mean you can say that but you would be very shocked how many people do Ironman without the proper training. So if you train properly the way that that you should for an Ironman, which is part of the fun, then there’s no condition that should mess you up. Like it shouldn’t do things without proper training. Yeah, like there’s there’s a whole movement right now with Iron Man’s in business and you’ll see it on Facebook and stuff and you see they’re in their stuff. have admitted, I spoke to somebody at the most recent Ironman of Victoria, who was telling me that they only do Ironman for business purpose, and like that they’re only going after an Ironman goal, because they’re like, this is the best marketing for me in my business ever. And I’m like, do like them. And the dudes like Not at all. He’s like, I hate everything about this. And I’m like, so there’s a whole movement that you can see in the business community right now. And I’m seeing in actually real estate, where people are trying to do Iron Man’s because they want that for their marketing. It’s a business decision, right? As opposed to a lifestyle decision. For me. It’s a lifestyle decision, I wake up and all I want to be is on my bike. You know, I love swimming. So I’m in the pool at five o’clock in the morning. You know, I love going for a run. I was running last night. So like, for me the competition is the motivator and challenging your brain to go to the next level? You know, it’s like it’s amazing. You will never doing it for business would be ridiculous. Like it would be I mean,

 

Erwin  

that’s better than I’ve read about people who climb Everest for business, but they’re even climate they get carried up by a Sherpa. So I’ve seen that too. I put that worse than running, because you still have to do the Ironman yourself. Oh, yeah, there’s no Sherpa for it.

 

Mary-Anne  

You get disqualified if you have a shirt but you’re disqualified. But you’ll see people like they’ll pick the easiest argument and they’ll be like, let’s just get this over with easy. There are some easier like let’s be fair, let’s be fair. Armand Cozumel is an easy one. Okay. It’s like you’re in friggin Mexico. You literally just swim is known in Cozumel like, This isn’t good. So if you’re thinking about doing an Ironman, you want an easy one. I am not saying it’s always going to be easy. I don’t want to make it sound because it’s you’re still doing the work. You’re still doing the distance. But everybody knows. There’s a couple Ironman where you jump into the water. And there’s a curse. Yeah. Okay, so So the current will carry you. So that’s the first thing. And then if you have an Ironman that’s flat, you can have you know, the only downfall you have is you know, a flat iron man, that’s easy on a bike, like you just get into the coach position, you got to have you still have to be physically fit. But where that can go wrong is if there’s heavy winds, right? Like in Florida, it’s a flat course. So 112 miles on a bike flat. But we had such high winds that day that it was like 112 miles of FML. Like, that’s all it was, it was like you were just like, oh, like, you know, you’re like, Oh my gosh. So you know, you run into different different challenges. But there are there are harder arguments and there were easier arguments. So you pick your flavour either way, you’re still doing the distance, so it doesn’t matter. But if you are doing it for a business purpose, pick an easier one. Don’t put your life at risk. That’s the thing is don’t put your life at risk. Because now cardiovascular wise and body wise, you know, you can damage yourself for good.

 

Erwin  

The drift diving is beautiful and Cozumel. You can do after the race?

 

Mary-Anne  

I think it’s I think it’d be great to do it. I just you know what, honestly, I’m terrified of Mexico. So I’ll never go there customers a little different, because that’s what they all say until it’s not. Well, it’s

 

Erwin  

an island, right? So you have to make an effort to get there.

 

Mary-Anne  

Well, like I’m telling you, it’s an island, I don’t care what it is. I’m like, I’d be that one person that ended up in Cozumel. And they’d be like, ah, the drug lords decided to take him out this weekend. And he just decided Cozumel was over. I’d be like, that’s what it is. I’m like I’m just so terrified of Mexico. I’m like, I don’t even know if I go back ever

 

Erwin  

have a look, see if there’s anything in crime on the island. Because it’s different. Like, for example, like when you’re in the beach, there’s no one become like, there’s way less vendors that bother you compared to like mainland Mexico. Because again, it’s just harder to get there.

 

Mary-Anne  

It would be but I’m like, there’s a lot of beautiful places in the world that I’d like to see. So I like I’m like, You know what, not that I don’t want to see that. But, but when you’re doing an Ironman, like the biggest thing is there’s just a guy called Mike Riley. And he has written a bunch of books, and he’s the announcer and he’s the commentator, and he is the they call him the voice of Ironman. And you work really hard. Like, no matter what, no matter what you choose for an Ironman for whatever your reason is, you know, if you’re training or if you’re training hard, like you put in the work, and you know that work is daunting, you know, you you wake up, you do 16 hours of training in a week, a lot of the times and if you’re competitive like I am, like, you know, you put a lot of work in it yesterday is like five o’clock in the morning in the pool. My swimming is pretty fast. And it’s like so you don’t have to just float around at 5am and swim like, you know, to have half asleep. It’s like go swim. And it’s like, yeah, it’s like, like yesterday, I was like, Oh my gosh, are you serious? Like Oh, I gotta swim swim. And it’s like so you don’t like it’s none of the exercising is like relaxed. So anyway, so that kind of happens. But Mike Riley is, you know, there’s this he’s got this voice and like when you come across the he doesn’t do all the races. So you want to get like the race that he’s at. And when he calls you. It’s the way he says it. He’s like, and he his books are great, by the way, and he literally is like he goes Ariane Glasby you are an Ironman. I’m going to tell you I still when I say that like no word of a lie. There is no better there’s no better Feeling mentally, to know that you gave everything you got, and all the training you did and everything because you don’t know what race day is gonna give you. That’s the scary, the scariest thing is showing up at the starting line. It never gets easier. You always last weekend, I was like, I don’t know what I’m doing here. I’m like, What am I doing? What am I doing, and then it’s too late, you’re like you’re in the water is like, go, you know, and it’s like, now you know, you’re racing. And then when you cross that finish line, and he screams that your name, because there’s not 100 people around you, you know, the course widens out and there’s tonnes of people everywhere you get your own red carpet. And when you’re when you know that you just put yourself through something that very few people will do. And you did it, and you made it through it. And because you only only you know, the mental journey that you actually it’s 90% mental when you’re on race day, and you know everything because you’re not allowed music, you’re not yet no music, no headsets, no support, you’re on your own the whole time. So it’s a very lonely experience in your head. And the stuff that goes through your head is the worst parts of you. It’s the worst parts of you, it’s you know, it’s the stuff that tells you you’re not good enough. It’s the stuff that you know, I don’t like to get emotional, but it’s like so emotional. It’s the stuff that tells you that you can’t do it. And it’s fresh. That’s why I’m emotional is like it’s fresh, because I just went through it again, and you sign up for it again. But what happens is, is that when you have music and you’re working in and you’re running and you’re doing things, you zone out, you can you get into a rhythm and your head goes into a different space. But when you have no music, and you have nobody there with you, and you’re feeling the pain of swimming, and then you know 112 miles on your bike, and really hard, you made it through because you’re worried you know, and you’re turning and you’re doing everything you can and then you’re running, and you’re like I gotta get through this. Every shitty thing you could save yourself comes out everything, you know, you just nail it, you know, can’t do it won’t do it. Why are you doing this, you don’t belong here, this person’s passing you you’re gonna give up your body hurts. Give up quit, you can you can quit, who gives a shit. Like so much stuff goes through your head. That’s the worst parts of you. And I’m not used to that. Because I’m like, I’ve tried so hard in life. And it’s like, so I’m not used to that shit. But you know, everybody’s going through it. And then when you cry when you get there, and you fight it, it’s not about putting your running in place. It’s not about the biking, it’s fighting every bad thing that you could save yourself and you’re fighting it. And you’re going, you’re your mind’s going, quit, stop. Don’t you don’t need to do this. And you’re fighting it and you’re going stop it. I can do this. And you’re like that’s all the narrative over and over and over again. Because you have no you don’t have a Mariah Carey singing in the background. You don’t have Bon Jovi pumping you up or anything like that. So you’re like pushing and pushing. And then when you get to that finish line, and Mike Riley says those words. That’s a badge of honour. That’s why I have a tattoo. You know, I have a giant Iron Man tattoo in the back of my calf. Because, you know, somebody said to me the other day, they said, is that an ego tattoo? And I say no. I said, first of all, we put it on our right calves because when you pass bikes, they see it. So they know, it’s a badge of honour, it means that I did it. I didn’t just, I like, I want to remember the rest of my life that every and that’s why I sign up all the time. Because when you get comfortable, you enter no man’s land, and you’re dying. That’s what you’re doing in life. If you’re comfortable, and you’re not pushing yourself, you’re just dying, you’re waiting for your life to end. Or you’ve basically said this is all I’ve got in me and I’m just gonna you know, take it comfortably. So I like to remind myself, push yourself, get to the next level, be there you know, don’t stay comfortable. Always remember that, you know, if those words are in your head all the time and you fight them in a moment when Mike Riley says Marian Glasby you are an Ironman, I’m like, Yeah, I can do anything. I can do anything. I can literally do anything. So don’t stop keep doing it. And so that’s awesome. So that’s what I do for fun.

 

Erwin  

What Blizzard asked me context. So you know, you know I was kid around or something. I often sit around but you’ve had an easy life having you know, a silver spoon, you know,

 

Mary-Anne  

rich family and you know, yeah, no, no, I don’t think I’ve ever I was saying this an interview the other day they said, you know, What, did your family leave you? Like, you know, most people look at legacies and families and like what I said, I can honestly tell you, I don’t think I’ve ever been given anything. I don’t think I’ve ever even gotten like, you know, some people are like, oh, a parent dies, you get like a you know, I don’t even know what you would call it like a bursary or something or a gift or like a house or anything. I got nothing. I got absolutely nothing. I don’t even think I ever I never even got a car bought for me by my family. You know, I mean, because all of this happens so young. So I’ve been on my own I would say since you know I was a teenager, I’ve been on my own and a lot of people they you know, we go through I’ve had probably, I think never stops. Like I’ve always had something challenging and difficult come in my life and it’s like, you know all the time. And it’s like so you know, being homeless not having a family surviving cancers. Like I don’t

 

Erwin  

know, you didn’t tell me when you have cancer? No. Crazy.

 

Mary-Anne  

Yeah. Well, I mean, like, What’s crazy is I like you just started

 

Erwin  

just to give some context. We’re still working together, and you were dealing with cancer and getting treatment. And you didn’t tell me?

 

Mary-Anne  

Yeah, no, no, I have, like, you know, one of the this is the only podcast that I’ll ever say it and you know, and I won’t say it again. But I currently have two tumours. I currently do and we’re going in for treatment and surgery in July. So yeah, so So you are the only person that I’ve ever said that to, you know, in this context, but no, you don’t have to look like that. It’s okay. Like, they’re small. They’re tiny. So we caught you know, when your former patient, you know, they test you all the time. And the accident in Tulsa, in my Ironman is what discovered them. So a year ago, they were discovered and we’ve monitored your one and it grew and another one came in. So now we’re going to rectify it. But it was actually the accident in Tulsa aren’t man it was meant to be it was meant to be. Yeah. It never would have been so easy to get to tell us that wasn’t it? Yeah, it was a terrible accident experience. But the thing is, is like

 

Erwin  

the listener, go listen back to Mary Ann’s previous podcast. She details her first Ironman. Only having one shot travelling in a pandemic. Terrible first. Ironman,

 

Mary-Anne  

I don’t think I’ve ever excuse my expression. I don’t think I’ve ever shit my pants as much as that. And it’s like, either you know it. I’ll tell you what I said to somebody the other day I said that. They said to me, yeah, it was on TV. They said, Do you ever get scared? And I said, I’m scared all the time. I said, when you’re at that started, like you’re scared all the time. And I said, so why did you I said, because you learn and I think I learned this very young. And I it only came to fruition in my head the last year or so, where you realise if you’re scared, you can either be scared and terrified, or you can be scared and exhilarated and what you learn is fear of being scared is something you can’t control. You can’t not be scared and something. It’s just a JSON natural instinct, you’re not a psychopath. You can’t turn that off. So it’s like, yeah, I’m scared. But I’ve learned that that being scared is where I belong. That’s where I belong. That’s where the biggest awesome opportunities happen is when I’m scared. I know that that’s a good feeling. And I don’t look at it and go, I’m scared and I gotta bail. That’s not what I do. I go, I’m terrified. I was scared. I wrote with 20 year old pros and Olympians on Sunday, a ride right after my arm and that I shouldn’t have written. It was a very tough ride. And you know, what was I scared? Yeah, I was scared. But I knew that that was where the best opportunity for growth was going to be. I’m so proud of the ride. I did. And I’m so proud of the people I met, and it was a next milestone. So you’re always moving yourself through stuff like that. And you’re always saying, How are you scared to start something? Because if you are, you’re just you know, I’m still going to wake up tomorrow, I’m skilling, I’m going to regret it. Like, what’s the worst thing is going to happen? So when you’re scared, how do you perceive it and like, I frickin love it. I’m just like, so now I look at being scared to something like that. But I was truly, truly terrified. In Tulsa. That was truly the most it was terrible conditions. There was no support World Championship. I’m all by myself in Tulsa. They removed the vaccine, the mask mandates I wasn’t vaccinated. I literally was like, scared to death.

 

Erwin  

I mean, you’d come up, you’re compromised, or compromised. I

 

Mary-Anne  

was scared to death. And a lot of people might be like, That was a stupid thing. But you have no idea how hard I worked for two years to get to that moment. I could not let it go again. I pass it up once. I was supposed to do Florida the year before I pass it up. And I regretted it. And that feeling of regretting Florida and not doing it. I was so upset with myself that I was like, No, I’m gonna go to Tulsa. And I’m going to do it and I was terrified. And I will never forget, like I said this before, when I crossed that finish line. And Mike Riley said that you’re an Ironman. I was like the cheering for the Canadian flag. I had the Canadian flag at the end. I was in so much pain. It was ridiculous. I looked like I was pregnant. I had a huge belly because it was swollen. I had my flag. And I saw an eagle on the Run course. And I remember just going dead like I was like, because it was just standing there. And I was like looking around. Nobody else was looking at it. And I’m like, oh my god, I’m dead. I’m dead. Like I’m actually I must have died because like, why is it like I’ve never seen an eagle. They’re amazing looking. And it flew off. And then I was like I realised later there was a bunch of people that didn’t see it. I was on Facebook. And I was like, Oh, thank God because like you think you’re crazy. And so anyway, so I remember like I took the we have special needs bags, and I remember it was right before the universities in the pubs to go to the finish line. I remember going into the special needs bag, and I had a Canadian flag and I had a Canadian shirt. So I threw all the Canadian shirt and I was like and I threw around the flag, put it around my shoulders, and I rounded the corner and the lineups because this was one of the first Ironman stern COVID that ever happened. It was the World Championship first one in Tulsa. So the crowds were like 10 deep on each side, and it was dark out like it was nighttime, so there’s spotlights on us. And then it was like all these patio lights and crowds everywhere. And I had the Canadian shirt and I had my Canadian flag. And everybody started screaming because they hadn’t seen the Canadian in two years, right? They were like, they’re like a year and a half. It was like we were banned from travelling. So it was like, it was unlikely. It was weird. And they’re like, Oh, I got a Canadian and Eris are going Canada, Canada, Canada. And it was like, I was so nervous. Like, Are you effing kidding me. And I was like, and I had met Mike Riley at a at a coffee shop just about three days before. And he took my name, took my number, took my details and my story of what I’ve been through. And because I lost, like, over 150 pounds, and he I remember, I was like, he’ll never remember me and stuff like that, but whatever. And so I have my Canada flag, and the crowds are screaming Canada. And I was just like this, I will never experience this again. And they’re like, go and then a couple people like Putin, we love Putin. And I’m like, okay, great, whatever. And so I’m running around the corner, and I can see my Briley I can see the finish line. And you know, at that moment, you’re like, This has exhausted and painful as I was I ran, like I just ran, it’s like something takes you over this adrenaline of what your body can do. And it takes you across. And all I heard was Mike Riley go. And here we have varying Gillespie from Canada. 150 pounds, the crowd goes crazy. They’re like, yeah, and you’ve got all these people screaming, and you’re going, that’s it, I crossed the finish line. He says you are an Iron Man. And there was transformation at that point. The old person who I was the butterfly became the you know, the caterpillar became the butterfly at that moment, you shed, you shed who you were, you don’t you never go back to who you are, it’s like in that’s the awesome part about it. I love it. What’s next? Well, I’ve got trauma. Um, so I’ve got well, in sports, I’ve got you know, I just did Victoria, I finished, I finished in the top 18. So I actually rolled down for world. So I did qualify for worlds and, and that was amazing. And I finished top five in the bike, which was even more amazing, considering four years ago, I didn’t even own a bike. So you got to put all this in context. So I’m doing triathlon in a few weeks, and that’s going to be the Ironman down there. And then I’m doing my big race, as we call it is the PTO professional track on organisation, I signed up for that in Edmonton in July. And that’s my big race. So I’m going to try to race that hard. And I’m going to try to win that race. And then I got into the Berlin marathon in September. So I’m going to see if I can qualify for Boston Marathon in September, and we’ll see what’s in between, like, we don’t know yet. So so we’ll see what’s in between. And I, you know, physically, like, I totally believe like, whatever you go through, regardless, if I have, you know, as somebody who’s a person who’s been through a lot, you learn that there’s always a path, you just have to kind of find that path, right. So like, regardless, if I have two little tumours, and they’re being removed and stuff, it doesn’t matter, like you know, I know what the recovery looks like, I know what the process looks like. And I know that I can get through it. So you know, it’s after my big races, and I’ve got enough time between that and Berlin, that everything’s good. So it’s like, and I’m super positive and super strong. So it’s like, so everything is really positive. So you just have to kind of like, for me, it’s, you know, that’s what’s next there for for business. I really, really, I mean, we are just this is my favourite thing to do is to just, you know, really take things to the next level, I’ve been during COVID, we almost have to put a pause on all of our business growth. You know, as far as expanding the company, as far as getting grilled, been, it’s fully launched, like, all the projects that we worked on had to almost be mitigated a little bit into a bubble, because we care about our clients. That’s it. And so when you’re putting a lot of extra time into research, and then you have to get them through this, and you’re doing extra calls, because you have to move people through different navigations of different markets. Like right now we’re spending, I’d say an extra, like, gosh, we’re working 16 hours a day, helping all of our clients navigate through this new change. And once they’re through it, and we’ll we’ll be okay. And so then we’ll be into our phase of growth, our next phase. So major expansion, major leverage, really going full tilt with girl abundance, and really changing females in business is just a huge advocate for me right now. So more females in business,

 

Erwin  

building actual businesses, tell us more about your abundance, who’s it for.

 

Mary-Anne  

So Girlboss is for and it’s evolved a little bit. So we have a core group now that is helping and so we had to we were really looking for the right project manager who I found now, so who’s going to really help develop that, but girl bonus is really it’s my passion project. You know, I met so many amazing, brilliant women in my life. And you know, I love men too. That’s not the difference here. The difference really is is that there isn’t a lot like there’s pay equity issues. There’s, you know, there’s the confidence of building businesses, you know, getting into investment, the amount of women who reach out to me for investment, real estate or the business in general and they’re just like, you know, there’s not a lot of options, you have a fluffy side, we have all these people helping women in business who are fluffy, very like life coaching, I almost call them. And it’s like, you need to drop that. If you you know, you need to be okay with being powerful, strong business women, there was many mirror ads on that, like it’s time to stop, you know, really putting us against each other. And if you talk to a lot of business women, it’s weird. They don’t support each other. It’s very, you can talk as much as you want about a bit in inner circles is completely true. It’s there is a pack mentality, where it’s like the really strong, aggressive business women, it’s almost like they can’t be feminine, or they can’t be nice, or they can’t be you know, they’re they’re categorised differently because they’re ambitious. An example, somebody said to me, a male said to me the other day, he says, You have a really big ego. And I’m like, Okay, I said, I don’t understand, like if I was a guy, like, why would you say that? He’s like, Well, you’re like you no covenant and walk around saying like, you can take people out. I said, I can’t because I have history to prove it. I said, we make over 200. Like, we bring 200 businesses that have never reached a million dollars capacity of profit. Every year we bring to her new ones in Canada, like, what are we actually doing for the economy and for businesses, I think is pretty awesome. And I’m like, Yeah, I have an ego. And I say, but there’s nothing wrong with that. Why is that bad? Like, like, Would you like me? He says, Well, you should be a little bit more humble, a little bit more lady like, like, as far as that goes. And I’m like, Whoa, like, Dude, you need to like, seriously, like, that’s the wrong thing to say to me. So So anyway, so that conversation as well. But your abundance is essentially like what we really want to do with girl bananas is we want to take her abundance to I want to help every single business woman who isn’t a hobby basement person, I want to take the women who have brilliant business ideas, and I want to help them and I want to support them. And I want to have a team around me that brings amazing skills into the equation that we can all help support them, we’re going to invest in their companies, we’re going to build this like it’s amazing what we want to do. And we’ve already we’re just about to start the application processes for for ideas and business woman’s do that. We’re going to start with big contests. So we’re excited about all that stuff that we’re launching into. But I think the biggest thing is is like when I went to Egypt right before COVID, what really made me understand because this journey has been amazing for me. But it’s time for the next journey. I’m very excited. And when I was in Egypt, I was sitting there and I was sitting down having tea on the Nile. And it was absolutely unbelievable. And I was having tea with these women. And they were all from there. And I think we were actually in Aswan, and we’re all sitting down having tea. And they were fascinated with me. They’re like asking her questions, right? Like, you get to do this, you get to do that. What do you mean? And they’re like, oh, my gosh, you weren’t forced to having kids and you like, like, like, it was really incredible, right? And so then I just sat back and I said, and I said, I want to hear from you guys. Like Give me your business dreams. Oh my gosh, the ideas they had, and the businesses that were in their heads, and their creativeness. And they have nowhere to go in order to support them. You know? So when you see what is possible, and what what what we can support and help and move forward with women in business. It’s not hobbyists, it’s not like I don’t think there’s anything wrong with having a business. That’s a hobby, but what I’m talking about is women who have vision, women who see things differently than, than other women do. But they’re in a circle that doesn’t support that, you know, it doesn’t mean their circles terrible. It just means are they in the right environment? And where can they go? Where can they go to be going back to our original conversation about masterminds? Where can they go? What can they do? How, you know, how can they how can they who is there to support them. And I’m very much not about like having segregation of the sexes, because I think the sexes should be together because that’s how you’re going to evolve as a as a society. But I think that there is a very big need right now. And you’re seeing a lot of banks and companies see that too. And they’re giving us funding, like Scotiabank has an amazing programme for women in business that they they give funding to and they help support. So you have all these outlets that we’re approaching. And that’s what we’re doing right now is we’re seeing where we can get some funding and start to go give us the give us the funding so that we can start to create programmes, and we can start to help people.

 

Erwin  

And then, like more tactically, what is it you guys meet in Chicago? Like, more tactically?

 

Mary-Anne  

No, we are, this is what we’re deciding now. Our headquarters is gonna be Ottawa. So we are going to have our headquarters in Ottawa. This is natural. This is where we’re going to be. I was thinking Toronto, but I was like, it doesn’t make sense if I don’t live there. So our headquarters are going to be here. We’re not going to limit our team though. Our team is going to be all over Canada. So we’re going to pick the best of the best for the team. So different people representing different areas of businesses. So our team is going to be everywhere, and then we’re going to do it exactly as my favourite masterminds. We’re going to do it quarterly. So every quarter we’re going to be bringing in and we’re going to have things that all the small business owners or the women in business are going to have coaching support and development and things to do every quarter in order to move their businesses forward. With the ultimate goal of launching their businesses, because you’re not busy enough, not busy enough, life is short my friend you know what I’ll do you know what, I’ll do a lot of rest when I’m when I’m under the ground and in a coffin somewhere or in ashes somewhere spread all over Hawaii or something like that. I’ll do it at that point. I mean, at that point, I’ll rest.

 

Erwin  

How do you feel physically because you just use a 20 year old?

 

Mary-Anne  

Yeah, like a 20 year old. I don’t even know how it’s possible. But like a 20 year old. I mean, I really. I take care of myself though. Like I really do. I focus on what I input what I output. I was laughing I’m like, after an Ironman. You know, I go on for days of every wild fantasy of eating that you could possibly imagine. Like, it’s dangerous. What did you eat? I don’t think I didn’t eat anything. I mean, that’s the crate like I cheeseburgers ribs. You know, pizza is like it you know, okay, Putin crazy. I OD on cheese. Like honestly, like you can’t eat cheese before racist. But like I’ll OD on cheese. Like you name it. KFC. Only the skin not the chicken. Like let’s be real. Who needs the chicken? Let’s go for the skin. Like you name it. I’m on it, like a bad smell. And I’m like,

 

Erwin  

what? What’s your regular nutrition look like? Then? My

 

Mary-Anne  

red? Yeah, so I’m sponsored by FTC, which is a nutrition company. And they’re great. And they’re awesome. So I haven’t agreed drinks. So I for breakfast, I always have their green drink. And it’s like a game changer. For me. That’s That’s what I think really gives me a lot of fuel.

 

Erwin  

Is it a breakfast replacement, or no,

 

Mary-Anne  

it’s not a replacement. Green Drinks are really good in general, like you don’t have to go with one over the other. But the green drink that I have is like a recovery and you know, green drink. It’s amazingly delicious. But what happens is is like you’re supposed to have your green drink on an empty stomach in the morning, and then let it sit there for 30 minutes, then you can feel you’re like holy smokes. Most green drinks will work really well if you follow that. So I have that as kind of like my launch to the

 

Erwin  

day. And then when you get up that’s the first thing. I have.

 

Mary-Anne  

Like right there. It’s like right on my counter. I’m like, I travel like it never leaves my side. So I have my green drink do that I don’t have any alcohol, no alcohol, no drugs, nothing. Like I know drink. Everybody knows that. I don’t smoke. I don’t do any of that stuff. Even in in cheat moments. I don’t you know, I went out for after the ride and everybody had drinks I ordered because we got a free beer. I had a cider. I took one sip. I was like that, like it’s gross. So anyway, so I don’t do that. But in everything else is super lean. Right? So I we have to consume a lot of food. So but I’m pretty much keto. So I follow a Keto regime quite aggressively. And then about two to three weeks before racing. I go into carbs. And so then I start to build my carbs. And

 

Erwin  

what kind of cars give me more specific pasta. Yeah, I

 

Mary-Anne  

mean, not about passes shit like that. I only have about two days before. So I’m really healthy carbs. So I usually eat my carbs in liquid format, or I’ll do them in vegetables. Yeah, I’m pretty diligent. I don’t want to I like liquid carbs. I don’t like big heavy carbs. Like having pasta stuff. It just doesn’t suit me.

 

Erwin  

What’s a liquid carb?

 

Mary-Anne  

So again, it’s like FDC has his called glyco. And it’s, it’s amazing. And it’s absolutely awesome. It’s drinks and so it’s just fuel. It’s just really good. Are you ever gonna

 

Erwin  

retire from the army? No. So you’re gonna look you’re gonna eat like this rest of your life.

 

Mary-Anne  

But I like it. Like if you feel like you’re 20 years old and you’re not 20 years old and you have more energy than you’ve ever had in your life and your your athletic performance keeps increasing. I think it goes without saying I want to keep it up. I don’t ever want to give it up. Yeah, I might change like I mean cycling is my passion but not change

 

Erwin  

as you speak. I think you can come up with Jesse Itzler. I can’t wait. Because he pushes himself like crazy to is only his nutritional regimen is nearly as strong as yours.

 

Mary-Anne  

Now, but he probably has a chef now. To be fair, I cook my own shit, right? So it’s easy. I go with whatever is easy. No, probably doesn’t. But it’s like, you know, I don’t know. Like, for me, I vibe on how I feel like I’m very in tune with how my body feels. If I gained three pounds, I don’t feel good. Like you when you are doing like 17 hours of exercising in a row. You can feel like if your body is not in alignment, and you’re just so slightly off, you can feel it. You do not want to be like you do not want to feel like shit.

 

Erwin  

You mentioned I guess your earlier Yeah. What’s your legacy gonna be?

 

Mary-Anne  

It’s gonna be girl buttons. So yeah, my legacy is like going to be girl abundance.

 

Erwin  

On Air man. Yeah, like,

 

Mary-Anne  

I am going to be branching into some of that, like, you know, I really do want to journal my story, especially after this year, I’m going to wait for the PTOs and then and then start you know, putting a book together and some some things around that because I think female in sports is actually really important as well. But I think like my legacy is is that I just want to I want a lot I want to leave. Like my ultimate goal is I want to see my original goal was to bring as many Canadians into millionaire businesses that I could and consistently well like I mean, I’ve welser pass what I wanted to do with that to see so many people become millionaires who are giving back and doing other things like, that’s cool to me like, that’s number one. So I’ve really I think made a difference that way, I hold back a lot on sharing my personal journey. So I am going to start branching out into that, which is going to be level two of my mind kind of legacy building to sort of share that and let people know that, you know, your possibilities of what you can do are limitless. And you’ve got to try to do it. And then my third and final legacy is going to be I would ideally like to get into to build girl, but it’s to the point where there’s 100, new Canadian female businesses being owned and developed by US per year. And we’re investing in them raising Yeah, that’s my goal. And then and then I’m done. Like, yeah, like I want to do is like maybe, I don’t know, figure out a way to like, sell cheese curds on the side of the road somewhere? I don’t know. I don’t know what I’ll do at that point. You know, serve. Who knows?

 

Erwin  

Surfing good. Nada.

 

Mary-Anne  

Hawaii, I do not want to stay in Ottawa much longer. Now.

 

Erwin  

where can folks follow along? Where can people learn about girl abundance? Yeah. So

 

Mary-Anne  

so what I would suggest is follow me on my red apple coaching staff for now. So go to Red Apple coaching. You can find me anywhere. Maryanne Gillespie, red apple coaching. I’m like literally everywhere. But I would suggest like, you know, follow me there. Because our plan for launching at grow abundance is like we’re literally in the funding stages right now. So we should have that wrapped up in about 60 days. And we’re gonna post all that stuff on our other social media sites first, and then we’re going to start to launch it. And then we’re going to be starting our application process to females to win their business ideas within the next 60 days, which I think is going to be super crazy. Awesome. I mean, I can’t even imagine what we’re gonna get for applications just to see what what some of these awesome business owners have the ideas that females visit, like I’m just to sit down. So we’re also assembling. We’re over the next 30 days, we’re gonna assemble our board of directors finally, and just make sure that everybody’s all these strong women who are going to help and get our coaches together. Amazing. Yeah, I’m excited.

 

Erwin  

Coach, thanks so much for doing this.

 

Mary-Anne  

Thank you. Thank you for having me. I mean, this is awesome. I mean, a little bit more serious this time, but I love it. I love it. And hopefully you know what, hopefully people get value from it. That’s it. Yeah, one little thing from these kinds of things, it changes everything.

 

Erwin  

I’d be disappointed if our 17 listeners are not inspired.

 

Mary-Anne  

I love it. I love it. Thank you

 

Erwin  

before you go if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already, then sign up for my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s much improved demonstration over the one that I gave to my cousin chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself, I got into real estate for the cash flow but with the rising costs to operate a rental business, it’s just not the same as it was five to 10 years ago when I started there are 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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Erwin  

Hello my fellow wealth hackers, happy summer to you all. And shout out to all those who are finding better deals out there today it was better than the deals that were available five six months ago. Even though I wasn’t very good social sciences I do find the market behaviours interesting. For example, duplexes east and west of the Greater Toronto Area where we service investor clients, the cash flow better today, even though interest rates are way higher. But anyways, our cash flow still better today than it is five six months ago, when duplexes would receive five to 15 offers sometimes 20. Today, they’re still selling, but it takes a week or two, and often a conditional offer will win. So how’s that possible? How can cashflow be better when interest rates have doubled, prices have fallen so much that mortgage payments and in turn cash on cash investments, cash on cash return has improved? So again, because the price has fallen so much your mortgage payments so much smaller? And yeah, you can cash flow a couple 100 bucks more today than you could live six months ago. Crazy. In the stock world. One of my favourite companies Costco or cheering I reliably spend hundreds of dollars each week. The stock is down considerably over the same period. Why? Profits are expected to decline because they like many other companies in their space like Walmart and Target. They purchased too much inventory and or some of that inventory have arrived late. For example, I tend to just perfectly I’m being sarcastic. But I wonder patio furniture two months ago, paid full price, nothing was on sale, even bought something off the showroom floor. They wouldn’t discount it one bit because it’s all they had. This past weekend, while I was reliably ordering our weekly hundreds of dollars of sacrifice to the Costco masters. I noticed Costco was offering huge rebates on patio furniture, patio furniture in mid June, which is peak patio furniture buying season is The Strange Days we live in. My point is that the pendulum is swinging in the Investor Buyers and consumers favour these days. Consumer favourite things really early gas prices have calmed down a bit already. I still think it’ll be elevated. But all the things that aren’t affected by Russia and Ukraine, while other stuff is getting cheaper. So again, as an amateur social scientists, it will be fascinating for myself to observe chain I personally raising capital, I’ve been mentioned that for quite some time, we’re still waiting for our refinance stuff to come through the bank made some errors on our paperwork. So the bank, notice that they actually valued our property, one of our properties and double double the appraised value. So that mistakes no good, so that’d be rectified. So we’re waiting for our correct paperwork to unlock some of our capital and our rental properties. I also had deliberately left cash on the sidelines and both my RRSP and TFSA accounts with the intention to stick it in the stock market after we’ve bought them hopefully in the next few months. 

Erwin  

And honestly, if you show while we’re talking about stock market bottoms, we have my stock my friend Derek Foster, who is successfully retired, and he retired a long time ago. 2004 was the last time you worked a job. And Derek is retired, tired. As in he’s enjoying his time off chilling, raising his eight. That’s right, eight kids. So it’s not like he has nothing to do. But my point is that he’s not pursuing any business ventures or creating any new trading programmes or anything like that. He’s chilling out. He’s truly the classic definition retired. myself as a wealth hacker, I have a natural interest in studying those who got rich, preferably in lazy ways, like Derek has done for almost two decades. He also has written about time six best selling books on the subject. Recently, he’s been navigating the stock crash quite masterfully, as at the time of recording, which was about two weeks ago, which doesn’t really help you. Anyways, the stock market was down at the time of recording 15% while their own portfolio was down overall portfolio was down 5%. Hence, he’s completely outperforming the market and likely outperforming pretty much every professional money manager out there. Is there any wonder why we hired Derek to help us teach stock hacker Academy? I think on a recent visit to the nation’s capital model while we’ve been invited Derek and his wife to lunch, and to record this podcast at our Airbnb, it’s great to catch up with Derek and more importantly learn how he’s investing in stocks these days. So that you listener and I may learn and hopefully create another passive income stream hopefully a really successful one. Just like Derek please enjoy the show. 

Erwin  

Hi Derek. What’s keeping you busy these days?

Derek  

Oh, the kids I guess I don’t know. You know nothing else basically.

Erwin  

How many kids? 

Derek  

Eight. 

Erwin  

Is it expensive to have eight kids. 

Derek  

Yeah

Erwin  

I have two. It’s pretty expensive. You have Four times as many as I do. 

Derek  

I mean, it can be expensive. And is the car expensive? It depends if you drive a BMW versus if you drive a Hyundai or whatever kind of thing. Yeah, I mean, of course it costs money to have kids and stuff. My kids do some activities. I guess there’s a bit of a cost like they we chose to send them to a private school so we spent a little bit of money there, but they’re not going to competitive hockey or anything crazy like that. So yeah, so it costs money I guess.

Erwin  

Hockey costs more than private school?

Derek  

I guess it depends on how much the hockey costs. Yeah, this is not a posh fancy private school. This is just Yeah. Okay. Yeah. So easy, really affordable, I guess.

Erwin  

Can I ask why private school over public? 

Derek  

We thought that the education will be better their peer group would be better? That kind of thing.

Erwin  

Yeah. Yeah. My wife and I talked about it. There’s none that are that close to us in our public schools only formula hawk. 

Derek  

Yeah, that’s actually we’re sorry, I’ll cut it in half. But we’re, we live in our neighbourhood. There’s a there’s an elementary school within 10 minute walk or whatever. And there’s a high school within a 10 minute walk the opposite direction. So it’s really well situated for that. But yeah, we just felt that the education was better. their peer group was better. They were getting more attention, whatever. So it was it was a hard hurdle to jump. But that’s what we did. Yeah.

Erwin  

And you just teach them how to be rich?

Derek  

Yeah, but what about everything else? Right. There’s so many things. I don’t.

Erwin  

 What else is important?

Derek  

I don’t know. Let’s let’s I don’t know. Yeah.

Erwin  

You’re off the rails already. Oh, how much Korean Can you speak? How much? Because he caught me off guard when we were eating dinner that one time.

Derek  

I was just trying to impress you because you don’t know Korean. Right. So I say a few words. I could be saying random words that would impress you. I guess I would say I guess I can speak enough Korean to get into trouble and not enough Korean to get out of trouble. Is that fair?

Erwin  

So that you’re comfortable? completely comfortable at a restaurant then?

Derek  

Restaurant? Yeah, because it’s fairly limited. I can’t carry on a conversation. I mean, my wife’s Korean. So I can speak to my stepdad because he understands my Korean, which nobody else really understands. Yeah, I mean, if there’s like a Korean drama on, I’ll understand 10 or 20% of what they’re going. And because you get context to get pictures, whatever, that kind of thing. I would not call myself anywhere close to being fluent. But yeah, I can converse with my wife’s parents, especially her dad, but no, not not that good. No.

Erwin  

And then when did you start getting serious on investing?

Derek  

Ah, that’s a good question. I think in my teenage years, oh, sorry, serious. I mean, I started investing, I didn’t do it. Well, when I was 18, or 19, against what I do, I bought, okay, so I was working at RadioShack. At the time, it’s now called the source probably a dying business. But by this is going back to the early 90s. So we’re really going back in time here.

Erwin  

Does RadioShack even have physical locations anymore in the states, companies?

Derek  

They are separate companies. So RadioShack in the States was called Tandy, and then RadioShack in Canada was part of inter 10, which then stood for international Tandy Corporation. They were separate companies, I don’t know the history of when they split off or that kind of thing. But it was they started working there. They had a share purchase plan for employees, I started buying some shares. And, you know, this is what I was, like 18 or 19, I thought, Oh, this is a good company, I mean, seems to be busy. I didn’t know anything about investing. So I bought but my life savings at the time, I think I’d saved up $5,000. And I bought 200 shares of inner 10 or RadioShack stock here in Canada. And it was 25 $24 a share. And the year before it started working, it was $60 a share. So I figured I was getting a good deal. So that was my basically first stock investment.

Erwin  

So looking back, what kind of diligence would you have done instead? Compared to what you did at the time? 

Derek  

Well, I didn’t do any diligence. So I think doing some is better than none. I was just working there. And I thought, Oh, they make money. You know, I mean, I see customers coming in and stuff. So I just bought shares, but I had no idea of what they were doing. I mean, by the way, I bought for $24. About a year later, they went down to 12. And so I bought more and then they went down to six at which time I sold them. So that was my first foray into the stock market. But yeah, doing some research and stuff, having an idea of the company you’re dealing with is much more beneficial than not having a clue what you’re doing. So at that time, it didn’t have a clue,

Erwin  

Right! And then for for listeners benefit your six time best selling author, you have what I would think most of our listeners are looking for all 17 listeners is you have a whole bunch of freedom in your life.

Derek  

Yeah, I mean, the kids curtail that to a degree but yes, generally speaking, yeah.

Erwin  

You could argue that’s a choice. 

Derek  

Yeah, sure. Yeah. 

Erwin  

You haven’t had a boss for over 20 years. 

Derek  

As long as my wife doesn’t count then Yeah, we’re good. But yeah, I guess the last time I worked a regular job would have been 2004. I was teaching at a university in Korea.

Erwin  

But you loved that job. Didn’t you?

Derek  

Loved it. Yeah, I liked the job. Yeah, I was teaching English. I can speak English so I can teach it right. So yeah. Yeah. No, that was a good job. That was that was a lot of fun. That was good for that time in my life. It’s quite exciting. Actually. It was high octane kind of lifestyle. I would go out with my students. And yeah, it was it was a lot of fun. But yeah, that was that was my last real job. I guess.

Erwin  

Wish I knew you back then. Actually, when was the first year did you come up with your first book?

Derek  

2004. After I left Korea, we came back to Canada. And which one was that? Stop working? Here’s how you can love this book. Yeah, there you go. Yeah, that was my first book back in 2004. dog eared it up. Here we go. Hey, you read it. But yeah, that was that was my first book. And it was just basically talking about how I was able to retire at the age of 34.

Erwin  

This is a phenomenal book. Thank you. I can’t think of someone coming into high school who shouldn’t read this. Like I think this is

Derek  

A basic foundational book. Yeah, it’s very, very simple. Um, I remember when I was when I was writing it, you know, some people get like professional business editor to check the book or something. And I at the time, I asked my mom, I said, Hey, I’m writing this book. Can you read it? So it might work for you to get and she’s like, what’s the dividend? ended like, wow. And then no. But then suddenly I realised like, hey, and that’s the key because prior to that book, a book came out by the name of The Wealthy Barber, I’m not sure if you’ve heard that I’m going way back in time. But he made it very simple. And when my mom asked, What’s a dividend that kind of clicked in my mind, it’s like, okay, I want to, I want to really simplify this. So I went back and rewrote a lot of it and made it much simpler and stuff. And I think I think that was the key because it reads very easily. I don’t think there’s a lot of jargon or that kind of thing.

Erwin  

And we’re jumping all over the place. But you mentioned dividend, what’s a dividend? Why is it important that you invest in companies that pay dividends?

Derek  

Yeah, no, that’s a fair question. With investing in the stock market a lot. There’s, there’s all these little phrases, people say like buy low, sell high, and that kind of thing. And the whole premise was basically, I mean, the analogy I give, I think, in the book is, you know, you have you have some money saved up, let’s call it the seeds. And the typical investor, the way they think, is they want to plant the seeds, and they want to grow a tree. But as soon as the tree grows, they want to chop it down and sell it off for firewood, make a quick gain and get out. Whereas dividend Based Investing, yeah, you’re still planting the seeds, you’re growing a tree, but you’re not cutting it down, what you’re doing is you’re coming along, and you’re harvesting the fruit, because then you can come next year and harvest the fruit again, and again and again. So a dividend is basically when you have a company, the ultimate goal of a company is to make a profit. And if they do make a profit, the management has to determine what they’re going to do with that profit. Now, some companies will take that and reinvest it to grow. And that’s, that’s reasonable. Some companies will take a portion to grow and return a portion to shareholders in the form of dividends. In other words, they mail you a check, they send you a check, and that’s it. 

Erwin  

You basically built a career. Is that is that the right term? You built the career collecting dividends?

Derek  

Yeah, like I mean, I started investing. As I said, that first foray, I’ll go back here, because you’re jumping around, I’ll jump around, too. So so after investing in RadioShack, I think I bought a junior mining stock where I lost 90% of my money or something. And then I said, Okay, I’m never investing in stocks, again, stocks are simply absolutely too risky. So again, this is the early 90s. So ETFs weren’t really common, or I didn’t even know they existed, but it was they probably existed, but they were in their infancy. So I looked at a mutual fund, there was this mutual fund that a that I was interested in, called the Templeton Growth Fund. And it started in 1954, their advertising material, they had this big chart, they said, had you invested $10,000, you know, in this fund in 1954, it would now be worth and this is going back to the early 90s, something like $2 million, or two and a half million, whatever it was at the time. So I thought, well, that that makes sense. I don’t know about investing, but I’m going to invest in these mutual funds. So I started buying that I bought mutual funds for a few years. And then I was still interested stocks, I read a few a number of books about stocks, I guess. But one thing book by Peter Lynch really grabbed my attention. And most of it was too hard for me to follow, because he talks about finding the next hot stock and the next, you know, up and coming thing, but I’m dealing with a small intellectual horsepower engine type thing, I don’t have the ability to determine what the future is going to hold. But one line in that book really drove it home for me. And he said you could do a heck of a lot worse than simply investing in the stocks and the Moody’s Handbook of high dividend achievers. And so again, this back in the 90s, but there was actually a book that they published every year called The Moody’s Handbook of high demand Cheevers. And I went to my, well, my local library didn’t have it, I had to go to the downtown library. But I was flipping through the book. And it was a list of companies that have managed to increase their dividends for 10 consecutive years. So you know, they started at this amount, and every year, you got a pay raise. And the light bulb just went off. I said, this is what I want to do, you know, I started buying these companies. And, you know, if I bought 100 shares of ABC Company and paid $1 a share, I’d make $100 a year, and then it raised its dividend to $1.10. You know, I’d make $110 and 120 130. And it just kept going up. So that’s basically what I did. I started investing in that.

Erwin  

And do you still hold a lot of these things? 

Derek  

Yeah, I did for a long time.

Erwin  

We’re recording we’re joking around, because in your book, you detail a lot of the interviews in newspapers and podcasts and just speaking to you and reading your books. Yeah. You mentioned a lot about just buying and holding forever.

Derek  

Yes, yes. Yes, you sold. That’s fair. Let’s let’s back up the truck a bit here, though. So when you’re looking for these companies, you’re looking for something that’s simple enough for a six year old, illustrate with a crayon, you want to keep it very, very simple. So the example I think I gave my book, I think I dedicate a whole chapter to it would have been Colgate Colgate toothpaste. I mean, you know, we all brush our teeth, we hope every day, right? It doesn’t take a brain surgeon to figure out what Colgate does. And brush your teeth. It prevents you from getting cavities that might freshen your breath, whatever. And the interesting thing for me and I’m guessing are boring guys, you know, if I if I go to my local supermarket or Walmart or whatever, and I look at the toothpaste style, you know, there’s two major dominant brands and it’s Colgate and crest. And when I was a kid, it was Colgate and crest my dad was a kid it was Colgate and crest it’s been around for over 100 years. Right? And it’s simple. It doesn’t change. It’s just you you wake up in the morning, you brush your teeth, whatever, you know, if the economy goes bad if something else happens, people keep brushing their teeth, and that’s a very reliable, you know, dividend paying company. So for many years yeah, all I did was was buy these companies when there was a some sort of short term issue and it could be anything I mean, I’m thinking back to the if I’m going way back in time here but back in the late 80s. Coca Cola developed new coke because they were losing market share to Pepsi and that was that was an absolute fiasco and you know, Coke shares went down but it was a good opportunity to buy Shares cheaply, you know, whatever. So I bought these kinds of very, very idiot proof, simple stocks, and I, you know, bought them over time and my dividend income kept going up. And then at a certain point in time, I was able to retire at the age of 34. So I did that. But yeah, right now, so I’ve sold that I had a lot of those stocks well over a decade, I don’t know years and years and years and just sit there and collected evidence do nothing else. Very, very, it’s very simple to do. But in the last couple of years, COVID has sort of walked out the system a little bit, too. But stock valuations are incredibly high. In my opinion, there’s a lot of speculation in the market. So yeah, so I’ve taken profits on a lot of them. Now, part of this was the Canadian political system, too, because like we had balanced budgets, five, six years ago, and then the Liberal government has increased the deficit. And then during COVID went up, huge amount. I mean, I think the total national debt has doubled in the last few years. So the economy has been mismanaged, or that public finances have been mismanaged, whatever my feeling, rightly or wrongly, was that at some point in time, and I still feel this way that taxes would have to go up. And now we’re getting into complicated taxation issues. But basically, capital gains are taxed at a 50% inclusion rate, they call it in other words, half of your gains are taxed. But back in the day back in the 90s, there was taxed at 75%, my feeling is at some point in time, the taxes will have to come up. And that’s a nice juicy target for the governments because you’re taxing the rich, you know, making everybody pay their fair share. So I thought I’d beat them to the punch and sell take profits now at a lower tax rate when I feel it’s going to go up in the future. That’s one point. And number two, stock market values were kind of at nosebleed levels. I mean, it was, you know, looking at a variety of metrics, whether it’s a cape Shiller metric, or whether it’s the total market capitalization of GDP, whatever valuations are very, very high. So will it be a crash or not? Who knows? But if you hold them for the next decade, your total returns are going to be relatively low? Because you’re starting at a very high valuation level. So yes, so I took some profits to answer your question. Yes.

Erwin  

And then you’ve been pretty public about it that you’re you’re very heavily cash these days. 

Derek  

Yeah, I have a lot of cash. I guess I was a little bit early on that. So here we are, what we’re June of 2022. I started selling a lot of shares back in February of 2021. So a little over a year ago. I bought some stocks too, by the way, but yes, I rotate your rotated some to more defensive stocks. Yes. Triggering the capital gains paying my taxes. Hopefully. Well, I don’t know if I hope so. But lower rate if I think taxes are gonna go up, but yeah, I have carried a fair amount of cash. And I mean, it’s certainly well this year because the markets have been a little bit rocky, you know, since since January, I guess of this year. You know, they I don’t I don’t follow it that closely. But I think the NASDAQ’s down whatever, 20 25%, nearly 30% something and the s&p is down. 20%. And, you know, so

Erwin  

That’s something on Twitter that basically the retail investors money is out of the market now that.

Derek  

Okay, I don’t I don’t know about that. I show it to you later. I shouldn’t trust you. But anyways, yeah. So the markets have been down. So having a lot of cash is good. I mean, my my portfolio if it was an index, it’s off about 5%. From the highs. So it served me well. But yeah, valuations seem high. And there also seems to be this. And

Erwin  

I tell this to people all the time, like you call yourself the investor, you’re way brighter. And I always tell people do not discount Eric Foster. Fresh off the fact that you’re only down 10% When the overall market is down. So not not TSX? Because you’re more you have much more international exposure. Yeah. But the point I’m trying to get to is s&p is off at least 15% right now.

Derek  

Yeah, I think it’s in that Yeah, cuz it’s come up a little I don’t know the exact amounts or whatever. But I’m not completely in cash. No, you’re down

Erwin  

5% in view, including your cash. Yeah, that’s the whole portfolios. Yeah. So obviously, you are significantly better than market share.

Derek  

That’s not a big deal. Yeah, buffers it somewhat whatever. And, you know, the holdings are more defensive in nature and stuff. But we’ll see. I mean, I could be dead wrong. Who knows? Right. But valuations seems stretched. And yeah, that’s what

Erwin  

I know. You say you could be dead wrong. When you said you mentioned decently a while back who you’re saying how to you it wasn’t the potential for the upside. And the amount of upside was not worth the amount of downside risk that you felt was coming? Yeah. Back in December?

Derek  

I don’t remember that specific quote. But yeah. You know, yeah, I mean, it’s just right now valuations are high. So how do you get the additional growth? You know, what I mean? How do you, you could buy a company and its future is very bright, and it ends up, you know, incorporated in that price, the projecting that earnings grow 40% a year over the next decade, which would be phenomenal, and you buy the shares, and earnings only grow at 25% a year. And let me be clear, 25% of your earnings growth is absolutely off the charts phenomenal because it fell short of expectations, you as an investor could actually lose money on that investment, even though the underlying company has done quite well. And so the market seen price for perfection. And the other thing I was gonna say is interwoven in that there’s this element of craziness. I feel what I mean is, I mean, Tesla, earlier this year had a market cap over 1 trillion with a T dollars. That doesn’t make sense in my mind. I mean, Tesla’s are cool and all that but I don’t know if it’s where worth a trillion dollars? Maybe I’m wrong. That coin I think it’s a little bit crazy. I could be wrong. Nf T’s are absolutely off the wall crazy. You know, you look at companies

Erwin  

That can’t sell your body and you show you how cool they are. Finding one for 60 grand.

Derek  

Oh, there we go. Good deal. No, I was gonna say like Gamestop is a company and dying company and that, you know, GameStop and AMC. And what else? I mean, hertz I think was already bankrupt and the price spiked up. Anyways, the point is, there’s also and that’s facts, like the special purpose acquisition company. I mean, all of these things out in the market is just frothy. It’s an element of craziness and stuff. And it just, I’d rather be defensive right now. I’d rather turtle I guess.

Erwin  

 It’s kind of like a sign of the End of Times. 

Derek  

Well, I don’t know, end of times, but it’s it’s, it’s definitely I mean, Buffett Buffett says it well, and everybody requotes it but you know, it’s be fearful when others are greedy, greedy when others are fearful. And, you know, when I look at the markets, I think there’s more greed and fear right now, I still do. You know, valuations are high. So so, you know, I could be wrong. I’m not a market prognosticator or anything, but I’m quite content to have a healthy dose of cash and then a lot of defensive holdings.

Erwin  

As an exercise to see how much fear there is in the market. I go check like the CVC or CTV see if there’s any talk in the first page or two of the stock market? Sure. Still nothing? Yeah, no, I don’t know. I don’t think so. Like more great way more great in the real estate market.

Derek  

Yeah, I mean, the thing is to Irwin, like I’ve lived through the 2008 2009 financial crisis that was that was quite drastic. And then in the 2000, stock market crash as well, but I wasn’t really in tech stocks. So that wasn’t as painful as 2008 2009. I’ve seen it before, goes through progression. But but you know, I could be wrong. I don’t know. I’m just happy to be defensive right now.

Erwin  

So defensive and tech stocks, those words go together.

Derek  

Yeah, I’m not smart enough to understand tech stocks. I’ve been looking though, because some of that some stocks are really quite beaten up. And don’t you look and I mean.

Erwin  

Okay, just for the listeners benefit. Again, don’t listen to Derek is being modest. I because when we talked, we’ve talked about tech stocks, often when we’re not recording, and we keep breaking this even conversation today, we keep bringing it up. Do they have a moat? Do they vote? Yeah. Like, I’ll take an example like a company. Everybody knows zoom. Yeah. All right. Does zoom do anything actually unique? Like, for example, Microsoft Teams, I have all these friends who use Microsoft Teams like sounds very similar. Okay. Like, I can use FaceTime on my phone. Yeah. Google has its own built in video chat feature. Yeah. On the desktop. A seasonal all these technology companies don’t have modes. Yeah. So you’re dealing there’s no, there’s no way for them to defend their business. 

Derek  

Yeah, yeah. So I’m the wrong guy to talk to and probably, you know, probably go on the street at people that have 100 know more than me about about tech stocks. To be fair, you know, I don’t I don’t even own a cell phone. Right. So I’m pretty 1980s. As far as that you have that level of freedom. It’s kind of doesn’t matter. Yeah. So so yeah. So I don’t know about that. I mean, I guess some of them have first mover advantage, like, if you’re the first one to do zoom, or whatever, you know, then we’re in RvB. You know, it’s your first mover here. Sure. But then again, I’m going to date myself, but there was a company called Netscape that had first mover advantage. And Microsoft ate their lunch. So I don’t know, you know, I just don’t know. So I’ve been, I’ve been looking at the tech space, because there’s a lot of interesting stocks, and some of them like Netflix. I don’t think Netflix has a moat. I think Netflix is an online blockbuster. And I know that’s a crummy thing to say, but they don’t own a lot of their content. Right. And with so many other streaming companies coming online with their own content, they’re not gonna licence it to Netflix anymore, and the offerings and Netflix that seems to have shrunk over the last few years like what you were able to get, you know, has reduced.

Erwin  

There’s not as many blockbuster movies on Netflix.

Derek  

I don’t think so. But it was their stock is down. What is it? 80% 70% I don’t know exactly. It’s done a lot. But I don’t think there’s a moat there. So I’m not interested in buying it pals down a lot. That’s an interesting one. But again, I’m not sure that there’s a month Shopify Shopify is down 80% Do they have a moat and they’re really cool company in their auto base too. But maybe they have a moat I just don’t know. I wish I was smarter. I don’t know I can’t you know, so I’ll err on the side of caution with most of those Amazon looks intriguing. And I think they have a moat because of fulfilment to replicate that model would be very, very hard. I’m sure there’s ones that are there. I’m just not smart enough. I don’t know but it’s beginning to get interesting in the tech space. But yeah.

Erwin  

As a real estate show and speaking to real estate investors, I find generally they’re extremely defensive investors. Okay, for some reason I find there’s a whole bunch of people who go into stocks and this whole vert like a whole other category investing that’s not real estate and this ticket enormous amounts of risk and I saw myself too I have a bit of weeds dog I have some Chinese stocks I have some tech stocks is so so far from my real estate philosophy and investing okay all right, jump to the casino. It almost is it’s it’s definitely in between falls in between that say for sure. Nothing’s gotten to zero yet. Anyways, my point was that I don’t think I’ve mentioned this on the podcast is I mentioned to you at lunch and told us to couple people and we’re talking about tech stocks and zoom or Pay Pal like square. And then I asked the question, okay named three tech stocks you think have a chance of ruling the world. And those names usually are Apple, Google, Amazon, Microsoft. Yeah, I’m like, Okay, why don’t you start? They’re trying to pick one of these crazy ones. 

Derek  

Yeah, yeah. I guess people are looking for 100 bag or something. And sometimes it works. But I think the difference to Irwin is so your real estate investing is more of your core like your family eats based on your how your real estate does what you’re

Erwin  

eating. holdings.

Derek  

Yeah, so the only real estate I own is I own the house I live in, right. So I think I have to sign that treat my portfolio like an 80 year old widow, I’m going to be very defensive. I don’t want to lose what I have. Because that’s the only thing I can come up with. Does that does that make sense? Right? Yeah.

Erwin  

And then you mentioned like the movies, the movies book of growing dividend.

Derek  

That was back in the day. Now there’s a thing if you can go online, Google dividend aristocrats it’ll actually it’s a good list of companies that have increased their dividend for 25 consecutive years or more. But yeah, same same. Going back before internet days. But yeah. 

Erwin  

You currently hold any of those dividend aristocrats? That’s a really good question. Because I’m sure the point of this podcast is to learn Yeah, learn what you did. Yeah. What you got? Yeah. And now how do we repeat it today? 

Derek  

Yeah. So about a year ago, as I mentioned, so I shifted out of some of the valuations were getting really, really high. I mean, I think the example I gave at one of our talks a while ago, I just brought up Coca Cola, okay, Coca Cola back in the 90s. And late 90s, had a halo around it, because Warren Buffett was a big shareholder. And every thought, okay, Warren Buffett smart he is, you know, so Coca Cola is a great company and whatnot, but it traded at some ridiculous P E ratio of like, 50, or something, oh, or whatever, I’m just pulling from my mind, it was very, very high. And the thing is, I mean, Cokes, a great business, and it’ll continue to be a great business. And so there’s not a lot of growth there. I mean, there’s some and they’ll grow in Asia, and they’ll grow in some emerging markets and whatnot, and that I get all that, but they’re not going to grow at 20% a year, they’re gonna grow at six or 8%. You know, they’re gonna plod along, you know, a little bit of volume growth, a little bit of pricing growth, whatever, there’s no way they’re worth the price earnings ratio of 50. Sony was had you bought it in 1998, you know, at the P E ratio of 50. And you held it until now, your total like it’s gone up like, I don’t know, 20% in 20 years or something like you would have gained 1% a year. And the dividend was abysmally low at that time, because evaluation was so high. So had you bought it then and held it till today, your average return would have been something like 2.3%. Here, I’m just pulling out I don’t remember this. I don’t have the numbers in front of you. But something like that, like you would have made 2% a year you would have been better off putting it in a savings account and you know, at the time, right? So the price you paid does matter. So the dividend aristocrats in general, the prices have crept up because people want that and whatnot. So when I was selling some buy, like I sold some dividends, I sold Johnson and Johnson, I sold PepsiCo, I sold, you know, Colgate I sold Procter and Gamble, because at the time, I felt valuations were too high. And I was looking for similar type valuations. And I found some, interestingly enough in the UK market, and there was a couple of interesting things about that. Okay, so first of all, the UK market when I was buying about a year ago, the price of the general market was roughly similar to the price that had been in 1999. In other words, the market hadn’t really gone up now it had gone up, but then it come back down, and it had come back down mostly because of Brexit. And everybody’s worried about Brexit in the UK, you know, splitting off from, you know, from from the European Union. But there’s some interesting companies in the UK. Now the UK as far as global, the GDP ranking, they’re probably I don’t know, fifth or sixth biggest economy in the world. They’re not super large. And even within Europe, like Germany’s economy is much bigger than the UK. But the UK has this unique position where they ruled the world for 100 or 150 years. And so they have some interesting global companies. And so you combine world leading companies with cheap valuations. And the other kicker was because the UK has become a financial centre, there’s no dividend withholding tax. So if you buy US stocks, there’s usually a 30% dividend withholding tax, and there’s a wh then form you can fill out like if you have a brokerage account, they will automatically do it for you. So there’s still a 15% withholding tax, but UK stocks have zero withholding tax if nothing, so it’s also tax advantaged. So you get like three check marks in a row. And so it was a it was a good ground to look. And so for example, I bought some shares in Unilever. Unilever is very similar to Colgate or Procter and Gamble or whatever, you know, it’s a global in nature. It’s you know, a lot of the brands use from Unilever, if you’ve ever used a Q tip, if you ever use Vaseline if you’ve ever used x body deodorant, whatever, they have all sorts of brands, you know, Ben and Jerry’s ice cream male in that and Bryce is on bike lock. So but yeah,

Erwin  

Sorry. 

Derek  

That’s okay. Yeah, 

Erwin  

That’s a Dove soap? 

Derek  

Yeah, Dove soap, whatever, anyways, you get the idea. They haven’t, you know, they’re a global behemoth, reasonably valued, you know. So that would be there’ll be a 4% dividend, whatever that would be an example things that are more disagreeable that people like I bought a lot of shares in British American Tobacco. Why? Because it was so cheap. It was cheap because everybody knows smoking rates are going down every year. They declined two to 3% a year which is great. Great for breast health. In addition to that, a few years ago, British American Tobacco bought Reynolds America, Reynolds America on some brands, the United States, one of the big ones being Newport. Newport is the large in fact, Newport is gaining market share every year, but it’s some it’s the largest menthol cigarette in the US. And when Joe Biden won the presidency, they were talking about banning menthol cigarettes now, will that happen? I don’t know. Maybe, maybe not. But the price went down quite a bit. So you could pick those shares up at a price earnings ratio of I don’t remember eight, maybe, and a dividend yield of 8%. That’s pretty lucrative. Now you got to say, okay, are they about to go bankrupt? No, I don’t think so. They’re not going to outlaw smoking. And they’re even moving to the lower risk categories, like the non combustible tobacco products, whatever. Very interesting company. Now, the other interesting thing about that space in the US and some other markets is they’ve banned advertising, you are not allowed to advertise a product. So what does that do? Well, that does two things. First of all, it solidifies your position in the market, no one can come take your market away, because they’re prohibited from advertising as well. That’s number one. And number two, there’s no, you know, if one company advertised, the other company has to advertise to in order to keep the market share. But if the government passed a law saying none of you are allowed to advertise, well, suddenly, all that extra money falls to the bottom line. It’s an incredibly profitable business. And the interesting thing is volume declines, you know, two to 3% a year, but prices increase, you know, eight to 10% a year.

Erwin  

Sorry, their revenue volume or strong stock volume. 

Derek  

Sorry, I’m talking about actual number of products sold, sorry, the physical product, right, the number of cigarettes consumed or tobacco products consumed every year revenues are the revenues go up because they’re able to jack up their prices, you see, because prices are rise every year with them. So you got to think this through, okay, so there’s no competition. Well, there’s only there’s an oligopoly, right? There’s a few new, there’s no new entrants, no new entrants, everybody’s rational in their pricing. And think about it, too. There’s no capital costs, because if your volume is declining, you don’t have to build new factories, whatever, right? Like in a growth, like a Tesla type company, if they’re going to grow, they’re going to have to build more factories and stuff. So capital expenditure is going to suck up a lot of the money with a tobacco company, they’re not building any new factories, so all of it falls to the bottom line is very profitable. So I’m not saying go buy bridge, but I bought it, you know, I bought it as a year ago, whatever, 3940 bucks a share, and it’s plotted along, I think it’s at 4344 $45. So, you know, it’s not gonna make you rich, but it’s a nice liquid of 8% dividend, which is pretty good these days, you know, and then what is the savings account paid? 1%? Half one, I don’t know, whatever it you know.

Erwin  

Well, I’ll compare a percent to for example, I know a lot people private lend. Okay. All right. The private and I’ve said for years, I don’t think it’s the market to be private lending. Okay. Just me personally, because I’ve worried about days like today. Okay. Yeah. When the markets come down. Okay. So 8% Yeah, it doesn’t make you rich. But that’s pretty nice. Cash flow.

Derek  

As long as you can rely on it. Yeah. And it should grow over time, too. I mean, that was the interesting thing is I had shares. I’m going from memory here, but in Pepsi, right. And the projected growth of Pepsi and their earnings was between six and 8% a year they expect their earnings to grow over time, which kind of makes sense. British American Tobacco same 68% here, but Pepsi’s P E ratio was like 2829, British American Tobacco was eight. So you know, 70%, cheaper, you know, with with dividend, that’s three times as much. Now there’s an element of risk there. But good value. Anyways, you only bought it a year ago, but the stocks actually appreciated for a little bit. It’s appreciated a little bit 10% or 8%, or whatever. Yeah, I don’t care about that. The dividends pretty good.

Erwin  

And then I remember I remember when we started talking about sorry, you came in. You were a guest speaker at one of our events. Zoom was new to everybody. So I don’t remember the camera working. 

Derek  

That’s probably me. I’m an idiot. But anyway,

Erwin  

For the time was perfect. And you handed us a whole bunch of great stock tips. And I was I was writing them off to so I don’t leave people hanging. You talked about you’ve mentioned Disney. You mentioned southern core. Okay. Yeah. In Berkshire. You mentioned GE, who was crushed hard. Anyways, all 10 picks you gave give you five American five Canadian. They did phenomenally.

Derek  

Yeah, that in fairness, the market did well in that time period. So I know it takes off too. Yeah. I mean, Suncor is interesting. I mean, I sold Suncor and I bought BP in England. And also shell I bought those two just because they’re more global in nature.

Erwin  

Actually. Um, but there’s there too. They change your name, beyond petroleum.

Derek  

or whatever. But anyways, yeah, marketing thing.

Erwin  

We’re borrowing probably on petroleum. 

Derek  

It’s kind of but yeah, there was a risk in the oil sands here with I think the current government in Canada is kind of against oil in general. And so I just thought that there was a certain risk element to that. So I bought again, BP and Shell, which is kind of interesting, because there’s two British companies BP and Shell shell was a joint venture between England and the Netherlands, but now it’s based only in England. But anyhow, that’s an interesting thing, because the or the UK is only like the fifth or sixth, I don’t know, biggest economy in the world, and that they have to have the super majors. And why is that because 100 years ago, Britain was very impressed. And so that’s where they are. But they’re but they’re global in nature. They’re not necessarily British companies.

Erwin  

But you’re seeing the stock still get whacked just because of Brexit, even though there.

Derek  

Oh those stocks are whack because oil was trading negative for a day back in 2020. Right. So oil…

Erwin  

 That’s when you’re picking it up? 

Derek  

No, I didn’t pick it up that cheap. I’m not that smart. But But even still, the price was relatively cheap. So yeah, I’ve sold those now. But I mean, I bought them. These are fairly big companies. And I mean, so you’re able to buy them. And then within a year, I mean, I think shell went up about 40% and plus a dividend. And BP was last because it got hit a bit, but maybe 20 25%, whatever. So good, good returns. Everybody’s all gone home oil now. So it’s time for me to move on. As far as that goes. Yeah.

Erwin  

You just sold news to convert into cash and rotate. 

Derek  

Those ones did I know I think I’ve raised my cash position a little bit. Yeah, I think two is Disney. Sorry. I’m just gonna go You mentioned Disney. And the reason Disney I bought in the shadow of COVID. And because their theme parks were closed, they were losing money. It was all crickets right. I thought the market overreacted. I didn’t figure COVID was going to be forever. And they have really cool brands. So I bought it. And I was just lucky because Disney plus came out around that time and it just exploded. So the stock went up like 100% and the year whatever it was, but then I’m like, Okay, now there’s too much optimism built in. So I sold it. I was lucky with that, because it’s the price has come off a little bit the last few months, but

Erwin  

109 Now okay, I don’t remember what it was. But anyways, yeah. And there is something that this is something that impresses me about she was you’ve done quite well in your profit taking.

Derek  

And that’s not normal. For me. That’s recent. To be fair, no.

Erwin  

You mentioned that the news was overwhelmingly positive news on Disney. Like, how did you gauge that?

Derek  

Just everybody was oh, Disney plus is growing so fast. Like the market gets euphoric about things. And it’s time to at least take some of your chips off the table. The valuations get high. I don’t know. Like with oil.

Erwin  

Because Disney got to like 180.

Derek  

I think yeah, I think it was somewhere around there. Yeah, I don’t remember I’d have to go back. I thought I bought the 90 somewhere. I don’t think I sold as high as 180. But maybe once is I don’t remember exactly. Now. But yeah. Yeah, that was that was lucky. I don’t know. It’s just when the markets in general get euphoric. Or everybody’s all gung ho about something. It’s time to move on, or at least partially move on. Take some chips off the table, right.

Erwin  

Yeah, sure. So low lows.

Derek  

But that hasn’t started. But that hasn’t been me for years and years. I just buy bought and hold. It’s just because markets are crazy right now. It seems to me, I could be wrong. But it seems valuations are high. Everybody’s euphoric. Everybody in their dog has made money in the markets. And it’s the place to be and it’s, you know, there’s the old story. I think it was one of the Kennedy clan or something, you know, he said all like this back in the 1920s. He said, Oh, I sold all my stocks when the shoeshine boys started giving stock tips. The point is, is a trickle down, and everybody was doing it. And it was time for him to get out. And he saved. I’m not saying we’re gonna have a 1929. But I just rather be defensive right now.

Erwin  

It’s funny, because everyone talks about real estate for I don’t know how long last decade?

Derek  

Yes, yes, yes, yes. Yeah, maybe? Yeah. Maybe.

Erwin  

We mentioned you mentioned over lunch. Do you think we might be into a recession in a year or two?

Derek  

I don’t know. But I think so. I mean, usually When oil gets over, what is it? $118 a barrel or whatever the price is now? 215? At the pumps? Yeah, it’s expensive at the pumps, right? 

Erwin  

So we Fx was the cheaper here is when you know what it is here?

Derek  

I don’t know where it is where you are. I know what it is here because I bought it. I don’t really think of it. That is where you guys are. But that cuts into people’s spending. Like okay, so some people Yeah, I can, I can weather it. I grumble about it. And I guess, you know, but but I can weather it. But there’s some people that are, you know, living kind of on the edge on the margin. That’s expensive. So suddenly, what happens? Well, they have to cut back on their spending. Right? That’s huge. I think. So you know, you have the increased price of fuel and just inflation in general, I think is causing, I think it’s going to cause people to sort of retrench on their spending. You have the government fiscal like, you know what I mean? Like, there was the syrup and all these, you know, financial instead Well, those are all ending those are fading away. Right. So yeah, they’re still going. What’s that? I don’t know. Anyway, so I could be dead wrong, but I don’t think it’s going to be all gangbusters and roses. And plus, the demographic profile for Canada in the States is not that good either. We’re an ageing society and stuff. Like I mean, there’s a big worker short, like there’s a shortage of workers right now. Why I think we were talking about that over lunch. I think a lot of the baby boomers maybe have walked away or something or you know what I mean, they’re like, they’re a couple years out from retirement. They’re like, Okay, I’m done. That’s good enough. For what? I don’t know. It’s crazy. 

Erwin  

And then yeah, no one really knows. Who knows, right? Yeah. First off, we don’t know what the central banks gonna do. So if they’re gonna keep increasing rates in the next year, I’ll bet we’re into recession. 

Derek  

Well, I think they’ll they’ll keep well, that’s the other thing too, is a big thing is central banks are increasing interest rates. And I think they’ll keep doing it until they bring inflation under control. And the way to bring inflation under control is to have an economic contraction, right. So but who knows?

Erwin  

So what are you looking for in order to start deploying some cash again?

Derek  

That’s a really good question. I’m looking for really good values out there. Like I would put more into British American Tobacco, but I won’t because I have this little soft rule with myself that I don’t like to put more than 5% in any one holding, because I’ve made mistakes in the past. And if I do make a mistake, I don’t want it to be too too painful. We talked about that too. Let’s talk about some of the mistakes here. So about a year ago, I bought shares in Alibaba, that’s a Chinese tech company, kind of like the Chinese equivalent of Amazon sort of you. They’re a big, big company. And they do like everything. So So Jack Ma, the founder had a little bit of falling out with the Communist Party in China, and they sort of wrapped his knuckles, and he disappeared, you know, and well, I sort of figured, okay, that’s the Chinese government doesn’t want to kill Alibaba, because, you know, it’s sort of a crown jewel for the country. So the stock price had declined, so I bought shares. And now they’ve declined, like, 60 70%, I don’t know, 60%, from where I bought it, or whatever. So that’s huge. That’s a huge loss, right. But the thing is, I think, originally, I put 3% of my portfolio, and I don’t remember exactly, let’s call it 3%. So it’s down 60%. It’s affected my portfolio 1.8%, or whatever, you know, you know what I mean? So it’s not catastrophic. So by limiting the room, I think my plan was to buy more, but now I’m too scared, rightly or wrongly. So those mistakes will happen. But if you minimise how much you put into any one thing, you know, you can limit the downside. So you want to diversify. But so with British American Tobacco, I would buy more, because it is still very cheap. But I don’t want to I’m bumping up. In fact, I’m slightly over 5%, because the price has gone up. So I don’t want to buy any more of that just in case tobacco is outlawed. Like who knows? Right? So you don’t wanna put all your eggs in one basket? Or at least I don’t. So if that makes sense.

Erwin  

I think it’s brilliant. I found a lot of speaking to a lot of newer investors that they would have over 10% in a single stock.

Derek  

Yeah, I mean, it depends on what else they have. Like, if if they’re 90% Real Estate and 10% of stocks. Maybe that’s not a problem. That’s just that’s the way I do things for me. Yeah. 

Erwin  

And it’s worked out pretty well, hasn’t it? It’s worked out. Okay. Yes. Any idea when you think the market will be a time for you to get back in?

Derek  

Who knows? I have no idea. I just haven’t seen power on the table buys right now. I’m looking, some things are interesting. It could be individual stocks, it could be the market. I mean, I am I am buying things to six, six months ago or around that timeframe. There was an interesting thing, at&t, everybody has a TN T It’s like the Telus of the United States, right? There’s only they have a similar market to actually there’s three main players in the US. There’s three main players in Canada, right. Like there’s in Canada, there’s BCE, TELUS, and Rogers, right. I mean, there’s also shot as a fourth player, but they’re being taken out in the US. There’s 18, T, Verizon, and T Mobile, I think, or something. Anyway, so there’s three. Right? So that’s called an oligopoly. Usually when there’s a small number of players, they don’t do kamikaze pricing. Okay, they want everybody to sort of make some money. But ATMs are banks. Yeah. Banks. Very talented at making money. Yeah, absolutely. Right. So I don’t think anybody’s gonna go off the rails and the pricing, maybe I’m wrong. But AT and T they were they had this plan, like maybe a decade ago, they were gonna buy all these media companies and whatnot and consolidate. You know, if you subscribe to the at&t holding, then maybe they give you HBO for free or whatever. Anyways, it didn’t work. They squandered a lot of money on their acquisitions. And they, you know, so a new CEO is taken over, and they’ve spun off Direct TV, which is a dying business and they’ve spun off Warner Brothers discovery like they merged it with Discovery spun it off. So anyway, so six months ago, the price was so beaten up everybody’s so pessimistic that I bought some shares.

Erwin  

And then you wait for extreme pessimism to get in

Derek  

 I like extreme pessimism. This the price is that prices that afford. But yeah.

Erwin  

I have some property for your north in Hamilton. The smokestack? 

Derek  

Yeah, maybe? Who knows. But yeah, so So anyways, yeah. So so so they did that. And then, you know, a month or two ago, they spun off Warner Brothers discovery. So So now, you know, for any at&t shareholders, they also the Warner Brothers discovery shares. So I sold off the Warner Brothers discovery shares, which lowered my cost of 18 T. And I’m content to hold like it. So my point is very long winded Lee, is there will be opportunities from time to time, and you have to just look for them. Right? Like so. So could be stock specific, or it could be market specific. And I have no idea. I’m like an 80 year old widow. I’m very scared of losing what I have. So I want to be very conservative. I guess.

Erwin  

Again, I something I think that was missing from a lot of investors I’ve spoken to is that they’re they are just way too aggressive with their with what they’re investing in.

Derek  

Yeah, yeah, I guess I’ve made mistakes enough to know how painful it is like once you touch a stove element, once you tend not to do it again, same kind of thing.

Erwin  

Oh, you detailed in the book quite a bit on specifically start working about paying yourself?

Derek  

Yes, that’s to accumulate the money. That’s a different phase of my life. Right? But yes.

Erwin  

And what I’m trying to get to is for someone who’s like new to investing new to stocks, whatever, in any guidelines on how much to pay yourself,

Derek  

The more you pay yourself, the faster you get there, right? 

Erwin  

We’re talking about over lunch. And my argument was, I don’t think a lot of people get with their money. I think that’s an our listeners are excluded from most of the conversation. Statistically, anything close to two thirds of Canadians who do not have a pension will never retire. Doubt that’s our listener or 17 listeners. So paying yourself is basically you know, build a savings account. And then once you have an emergency savings, then start investing, right? Sure. Any guidelines on how much to pay yourself?

Derek  

Yeah, the financial community always says Pay yourself like 10%, or whatever. And I guess that’s a good starting point. Think, first of all, pay yourself something. I mean, I don’t know, I want to feel like I’m making progress or whatever. So So you know, again, this is for early stages starting out. But in order to be able to buy stocks or buy investments of any sort, you have to have some money, some capital, right? In order to accumulate that capital, you have to set some aside. But the faster or the greater amount that you set aside, the faster you’ll get to wherever it is, you want to go, right. I guess I’m fortunate, like, I’m not attracted to trinkets or, you know, landfill crap, basically, you know what I mean? Like, it doesn’t, it doesn’t thrill me, like, you know, it doesn’t excite me in the least. And I think that’s what a lot of people like, that’s not the way I want, I think people should invest. But if you look at the lotto 649 commercials, they don’t picture a guy, you know, getting into a Lamborghini and driving up to a mansion and stuff. No, they always say imagine the freedom and they just have a guideline on a hammock at the beach. And I think that’s what people want, I think that’s what they’re migrating towards, is just, you know, the freedom not to be inconvenienced by an alarm clock or a boss or a commute or, or whatever it is, you know, whatever it is they you know, so the faster you want to get there, the more you save, it’s as simple as that, with investing or let me broaden that with financial freedom. I think at the early stage, the more important factor is being frugal spending your money wisely saving a high percentage of your income, once you reach that stage, then not losing what you’ve saved or invested. And also doing it well getting a reasonable return, it becomes more important factor. Does that make sense?

Erwin  

I actually a friend of the show Anderson, he actually drives Uber. Okay. And like skip the dishes. Sure, sure. And then all that income from that. That’s a side hustle. Yeah, all that income goes into his savings.

Derek  

Okay, so he’s made a plan for himself, right? Again, because I’m wired this way. And maybe it’s a Scottish ancestry. I don’t spend money easily. I never had to make a budget because I just you know what, I mean, I just automatically save I don’t know, I just not really like I don’t drink coffee. I don’t smoke. I have an occasional beer, but like, I don’t really have any expensive hobbies, whatever. Obviously, don’t spend a lot on wardrobe as you can see, so there’s nothing really that sucking about, you know what the kids maybe I don’t know, but you know what I mean? So it’s like, okay, the feed Yeah, there we go. Right. But no, but I don’t know if I want something I get and I just don’t want a lot. Does that make sense?

Erwin  

 It also makes sense like to share to the first people I met who are financially free who I consider financially free in real estate one she lived she on two triplexes. No car, no kids had a dog. Okay. And she lived in one of the triplex one of the units. Okay. And she had no job. That was enough. That was enough to meet her needs. Yep. Right. And then another friend, he drove like a beat up Mr. Mazda on six student rentals in St. Catharines, Brock University students, and he resigned from his really nice government job. Right. But my point is that they’re both frugal. Yeah, yeah, they didn’t have much flashy. 

Derek  

Alright, frugal roads, greets people the wrong way. It rubs people the wrong way. It isn’t self denial. It’s just spending wisely. You know, it’s sort of like I think in my book, I talk about life enhancing a non life enhancing expenses. So, you know, if you like coffee, and you like going to Starbucks every day, let’s say, by the way, I won’t share. So go ahead. But yeah, go treat yourself. Absolutely. 100%. Right. But if you’re doing that, maybe you can’t do something else that you know, but for example, minimising your taxes would be you know, if you pay more taxes, it’s not like you’re gonna get more services. So, you know, that would be a non life enhancing expense. You want to be very vigilant about reducing that that kind of thing.

Erwin  

I sold puts on Starbucks after you said you bought it. 

Derek  

Oh, there we go. That’s my guy.

Erwin  

Actually, wish I had more. Yeah, like you said, makes me sound terrible. I don’t have a budget either. I focus more on making money. Okay, fair enough. Yeah. Yeah, I couldn’t possibly consume as much as my portfolio makes. Yeah. And even still, I’m just frugal person. I don’t like spending money into like, lavish things. Just immigrant upgrading. Yeah, there we go. Right. Yeah. Yeah. Cool. So while we covered a lot, any other tips that we can pass on to the listener?

Derek  

Keep it simple? Like, I mean, I know a lot of people you don’t get rewarded with more money if you come up with a complex idea, you know? So again, I find the best though. Well, yeah, people that invest the money and that is exciting, right? It’s exciting. But you know, I mean, I’m not saying golden bytes Colgate today, but that you wrap your head around that you can understand that you know what I mean? Coke, you can understand it people get thirsty every day, you know, and, you know, there’s Coke or Pepsi or whatever, and there’s only a couple other players and you know, a new new drinks company. I think Blackwall came out like that’s what is it? National beverage I think is a company that makes it look while the flavoured water drink anyways, that came out today. These companies have moats that well, that’s that’s my that’s my point. They came out with it. They attacked a part of the market that was under service right? And it took a couple of years but Coke and Pepsi reacted. And so Pepsi bought brought out bubbly or bubbly or whatever you want to call it and cold More recently brought out, aha. Now the interesting thing is, you know, five years from now or 10 years from now who’s going to be the market leader in that category? And I’d put my money on either the Coke or Pepsi brand, because they already have the infrastructure, right? Anytime, if you go work out at a rec centre, and you go and grab a drink afterwards, there’s a vending machine there. Well, it’s, it’s controlled by Coke or Pepsi, so you’re gonna get their rent, you’re not gonna get the other brand. And as far as shelf space and placement in the stores and stuff, where, you know, if Pepsi comes along and says, Hey, we want that space store is gonna cater more to them than this new upstart because, you know, you know what I mean? So I think they kind of have a brand now, one thing,

Erwin  

What in business sense is required to be to be a stock investor?

Derek  

I don’t know. I mean, you’re a shopper. You go around the store, look at what’s what people are buying. Yeah, one area where Coke and Pepsi was really flat footed, in were energy drinks. And because they don’t, I don’t think they taste like I don’t drink energy drinks, either. But you know, Red Bull came out whatever. And then horrible. They taste terrible, right? But Red Bull came out and then monster came out. And then what’s the other one Rockstar, whatever, right? And then there’s other ones now too. And so they were flat footed, they missed it entirely, you know, and the markets dominated. So what happened? Well, Coke has a distribution agreement with Monster so they get some of the money. And I think they bought 17 or 20% a month, just they own part of it, too. They might take it out totally someday, who knows? And Pepsi bought it rock star. So they have the Marketing Muscle now behind that, right? So they never really totally lose out. So my point is, I guess keep it simple. You know, don’t get into the complicated. I mean, by all means invest in some emerging technology, if you understand it, I don’t. So I play in a really small sandbox, and that’s fine. That works. Okay. That’s the tip I would give.

Erwin  

Right! Because we were talking about Ark, for example. Yeah. And how often a lot of them will disappear. Time on arches typically. Yeah, 10 other companies.

Derek  

I pulled a random number. Yeah, who knows, right? That’s not my style. That’s the thing about investing too. And maybe that talks or points to the point that you brought up, whereas some of the real estate investors seem to be like, pretty, you know, Intrepid, and just, hey, I’m gonna buy this, buy that and see what happens. Like, I’ll take a risk on this and take a flyer on that, whatever. But I think there’s different kinds of investors, some people are what’s called growth investors. So they’re looking for, you know, which company is going to grow, and I’ll pay, I’m not all that sensitive about the price I pay, because it’ll grow anyhow. And that can be very lucrative, like, I mean, people that bought Amazon, you know, 20 years ago, I’ve done phenomenally well, or Google or whatever, I’m not really that kind of investor, because I’ll end up buying something like a Nortel or dizzy or Alibaba or something like that. And then there’s the other time where there’s a deep value investor, you know, so they’re looking for some beaten up company as trading really cheap. I mean, for years and years, for example, Hudson Bay, which sounds crazy, but who shops at Hudson Bay, nobody does anymore. But because they had been in business for hundreds of years, they owned all this real estate. And so, you know, people would look at it and say, Oh, the value of the real estate is, you know, $10 a share, but the stocks are only trading at $7 a share. So this is a great deal, you know, and so that’s deep value, I don’t do that either. Because oftentimes, they they kind of go into business and they’re bankrupt. It’s right in the middle, like a growth at a reasonable price with a little bit of a value bent, you know, so, you know, you’re looking for companies that are growing, maybe not quickly, but they’re growing the tortoise type stocks, they’re mature companies, they’re paying dividends, and you’re looking for some sort of short term pessimism that allows you to buy them more cheaply. I mean, that’s, that’s basically what it is.

Erwin  

What sources are using to research these companies? Because for example, are you just googling?

Derek  

Yeah, that’s a good point. Sometimes they just notice things or come across things or hear things in the business media or whatever, like, you know, I look at the Globe and Mail National Post, and just sometimes things you know, sometimes things just just tweak my interest Value Line is a thing I use quite a bit value line assesses the companies and gives a basic snapshot and it gives a history of how their earnings have done and their dividends have done. I you know, that’s if I’m intentionally looking, yeah, but But you just hear things you hear, you know, like, I wish I could think about business headline off the top of my head a couple of years ago, oh, Chipotle had some salmonella in some of their restaurants, the stock price was beaten down, that would be an example. Remember that? You know, that would be an example. And so it’s like, oh, okay, that’s interesting. How much is the stock beaten up? Okay, is this a permanent issue or a temporary issue? So you’re looking for temporary issues, you’re looking for a short term problem that’s temporary in nature. So you know, okay, they had whatever it was a salmonella outbreak, is that always going to happen? Or they’re going to take steps to address that, you know, what I mean? And these sort of temporary things happen from time to time with various companies, and it’s a good opportunity to buy remember back in 2000. Again, I date myself, but I was looking at McDonald’s, okay. And McDonald’s was so beaten up the dialogue at the time was, oh, McDonald’s is, you know, their kid focused and demographics don’t support it anywhere. And they brought out the arch Deluxe, like a special hamburger targeted to adults, and they’re gonna lose their market share and stuff. And I remember looking, I’m like, nah, this is McDonald’s. I mean, they got it, you know, and did some research and stuff and again, McDonald’s is one of the biggest real estate owners like they own a tonne. There’s a real estate the United States It was so cheap. So I bought some shares. But long story short, I sold a couple years later, like a 10% profit now it’s up 10 fold or whatever, you know what I mean. So you’re looking for that pessimism, whatever that pessimism is you don’t know. And it’s temporary in nature. Does that? Does that make sense? 

Erwin  

Like the smokestacks in hamilton are temporary. 

Derek  

So so it’s not it’s not something like going oh, Kodak is not developing as much film because some people are using digital film. So now it’s time to buy Well no, because codecs basically, you know that business is gone, right. So that’s not temporary, that’s a permanent shift. Right. But if it’s a temporary problem, and that’s what you’re looking for some sort of, you know, as I say, like the chipotle having a outbreak and the restaurants or, you know, cold bringing out new coke or, or whatever the case is.

Erwin  

We mentioned Brexit earlier. I don’t know that much about it. 

Derek  

I don’t know that much about it either. But the UK basically was part of the European Union. They voted to separate and so they’re separating, right.

Erwin  

Does it really affect any business? Does it affect Shell’s ability to…

Derek  

It affects a lot of UK based businesses for sure. Right. 100% Does it affect Unilever? Maybe, maybe there’s I don’t know, I haven’t done that deal yet. Maybe there’s some extra tariffs that you know, Germany implements because of it. I don’t know. But I don’t think so. I don’t think it’s going to be catastrophic, if that makes sense. You know, it just didn’t what Unilever by the way, just throwing it out there is like I had Procter and Gamble. I switched over to Unilever. They have a lot of they compete in a lot of categories, right? Like, like, you know, Unilever will have their deodorant and Procter and Gamble as they’re doing that, whatever. But Unilever is more tilted towards emerging markets. So they’re more their growth is gonna come from, you know, some peasant in India buying their first bar of deodorant or their first Dove soap or whatever, like they they’re climbing the socio economic ladder and moving and so that’s Unilever’s growth path Colgate and Procter and Gamble, their growth, like Colgate is more exposed to emerging markets, let’s say Procter and Gamble, their growth in earnings is going to come from premiumization. So what they’re going to do is they’re going to say like you buy Crest toothpaste at $1 or two. But look at this. This gives you whiter teeth and a brighter smile. But it’s $3 a tube and can we convince you to move from the dollar tube to $3 or two? You know, that’s how they’re gonna grow. Does that make sense?

Erwin  

Fascinating. And Derek, I think, you know, we recently announced you as one of our wealth hacker conference speakers. Okay. He excited? Yeah, November? Well, of course, of course. You’re not nervous about public speaking, right. Last time, we had 1500 people this time, we’re hoping for 2000.

Derek  

I hope we get 2500. Let’s, let’s see what happens. 

Erwin  

It’s kind of crazy. Because have you done a big talk since because I know you’ve done other big talks. To me, it’s just a little bit wild. You know, we’ve been two years of social distancing. And

Derek  

for years and years, I was going to Toronto Metro Convention Centre world money show. And there was some other ones that I’ve done on everything just sort of shut down. And we were all talking online and stuff for a couple of years. So it’d be nice to be back and chatting with you. I mean, it’s just it’s a different dynamic. Right? 

Erwin  

And I mean, how was the online experience for you? 

Derek  

It was okay

Erwin  

Because it’s probably a couple 100 people for sure. 

Derek  

I don’t know, how do I know how I mean, you can’t sit without a computer. So but the thing is, like, in person you talk, you know, and then somebody’s listening in the audience. And they said, I want more information on that. And you know, you go have a break after that. There’s always breaks in between the talks, and people seek you out and they come and say, Hey, you mentioned this, how about this? And, you know, it’s more interactive? It’s, do you follow up saying, like, you can go back and forth, it’s more communicative? Like I can be going on a tangent because they hang on, hang on to that and then we switch directions online. It’s just not the same. I don’t know. Yeah, that’s my take. 

Erwin  

Yeah, no, I found online these days. Especially if it’s local. It’s gonna be local. It’s gonna be for most people is gonna be local. Toronto Congress Centre. Okay, the airport. So lots of free parking. 

Derek  

Awesome. That’s important. Yeah. 

Erwin  

You know what your talk is gonna be there yet? Well, it’s gonna be about investing in stocks. I’m sure. Right? Because it works for you. 

Derek  

Yeah, it worked. 

Erwin  

Oh, and then someone smarter than me just said the other day is funny. You laugh. I was talking to a cryptocurrency person. I was saying about my comfort level of cryptocurrency. Because, for example, if you’re in the crypto, you’re in the Bitcoin community, for example, if you’re wealthy, they have a rule of thumb, that you should have one bitcoin per family member. Right? That’s about $30,000 us each, right. So that’s one rule of thumb again, if you’re wealthy so if you have a big family, then you’re screwed. And I said, that number sounds so big to me. Versus if there’s a million dollar duplex triplex can’t write the check today. Yeah, and he said, That’s so funny. You say that I feel completely the opposite. Yeah. Stick a million bucks into bitcoin done by piece of investment, real estate. Does that work? Am I gonna lose my money?

Derek  

Yeah, people have to be…

Erwin  

And really sorry. My point is that you’re extremely comfortable in this area. You don’t always talk. But you’ve made a lot of money.

Derek  

Yeah, it’s done. Okay. Yeah. Yeah, it’s interesting, actually, because my dad had a business and for a period of time, he made a fair bit of money, and he bought real estate back in the late 80s and early 90s. Interest rates climb ended up in the NDP government in Ontario and there was rent controls and tenants wouldn’t pay him. But anyways, he basically lost everything. So I think I’m gun shy with real estate, but there’s not a logical reason. It’s more emotional, really, because so many people have made money with real estate if you know what you’re doing, and you do it correctly, but I guess back at that time, when I’m looking for my success formula, I just veered off into stocks. And I guess it’s hard to change something that’s working. So I just continue along with that, if that makes sense.

Erwin  

You know, you asked me at lunch. Why am I so interested in stocks? It’s just I enjoy making money. And again, I’m looking for yield. Yeah, you know, at lunch, we’re talking about like TV and tell us Sure, whatever. Yeah, yeah. Nice fat dividends and no tenants to talk back

Derek  

Yeah, I mean, I’m a little bit to that my my first book, actually, but if the dividends are recurring and stuff, you you don’t really do anything, the money just appears in your account. So it’s kind of nice, like, sorry, it’s lazy way to do it, I guess. But you don’t have to do anything. You just wake up and Okay, good. Somebody was deposit my account today.

Erwin  

I will write covered calls this because I, I’m on a type. So I need to you need to do so.

Derek  

There we go. Yeah. Yeah, I don’t I don’t really do much of that. either. I just collect dividends. And sorry, it’s very boring. I know. But it’s falling.

Erwin  

Boring. But you haven’t worked in? How many years? I guess it’ll be 18 years this year? Yeah. Yeah. Imagine that listener 18 years map having a job in the last 18 years? Yeah, so it’s been okay. And anyone can do this? I mean, we can repeat your steps. 

Derek  

Yeah. I mean, I absolutely 100%. I mean, again, it formula is pretty easy. You spend less than you earn and save the difference and start buying stocks and look for quality dividend paying stocks, I mean, this nine criteria in the book, but like you’re looking for recession, proof companies, right, companies are not gonna go to business like, again, the Colgate toothpaste, you look for something that is not gonna be changed by technology, something has a long operating history, something that’s has a history of growing their dividends, and you start there. I mean, and again, too, sometimes people are looking all or nothing, but think about it, think you’re starting out, right? So you’re just starting out, you know, you start saving a little bit of money to buy stocks, okay? It’s not like, Okay, tomorrow, I’m going to be able to retire. But think about it. Like, let’s say you buy some oil shares, and they pay you a dividend. And let’s say they pay you enough dividends to pay your gas. Okay, for the rest of my life, I never have to pay for my gas, this the company shares when I go, you know, to fill my car up at, let’s say, Petro Canada and they own some quarter shares. Well, the dividends have paid for my gas, so I never have to pay for gas again. So that’s one expense. That’s totally done. And then you buy some more shares, let’s say in Banbridge, or something, and that’s your natural gas. And it’s like, okay, great. I never have to pay to heat my home for the rest of my life. Again, you know that that bill is covered for that’s my life. And then you buy a food stock and great and never have to pay for groceries again. And eventually all your bills are paid. And then you don’t have to work right, and then you’re free, then you’re free. Yeah, you know, so you can see the steps. 

Erwin  

Derek, I have one final question. Because I think we’re way over time. I’ll be sorry. Do you have like a house? Most of my that’s entirely my fault. Do you ever have like a like you have too good to be true. Like spidey sense. For example, in your old older books, you talked about income trust, for example. Yes. It seems like I just see, let’s look back in history, there’s been examples of like, damn, this is really good. And then either the business fails, or the government takes it away. Do you ever have that anymore?

Derek  

Yeah, that’s, that’s exactly right. Like it’s like, you know, and it was it was just so beaten up and then then rocketed up so high, and everybody’s all euphoric and stuff. And it’s just like, this seems too good to be true. 100% 100% within them trust. That’s an interesting one, because I started buying income trusts in the late 1990s. And it’s hard to believe like you could buy like Pembina pipeline or whatever they were paying like 12 and 13% yields. That’s insane. Because it was those those are best profits from business right as the payout well, okay, let’s go with REO can at that time, I bought REO can. It was $9 a share? And I think it was paying like 90 Some cents a year. So it was like 11% yield. Right. And it was phenomenal. Okay. And why is that because everybody was focused focused on Nortel and JDS and other high tech companies, whatever. And so we wrote that pony for a while. But then the government changed the rules and you know, within a day, you know, got a big hair cut prices went down, so I guess he went some you lose some but yes, yes. To answer your question. Yes. Sometimes I do feel that way. Yes.

Erwin  

Anytime I see like double digit returns. I’m okay. My my spidey senses are tingling.

Derek  

Yeah, especially that’s a good point to kind of I know we’re over time but with stocks be very, very careful if the yields too high know why the yield is too high. Because oftentimes, that means either dividends about to get cut, or there’s some impending doom, you know, down the down the pipe. So I’m sort of talking about sides of my mouth because with British American Tobacco, I know what the risks are. And I feel they’re overstated. So I’m comfortable with that. But just be very, very careful. If the if the dividend gets too high there, there might be dividend cut coming coming down the pipe.

Erwin  

I’m seeing on these, these ETFs that have not very long histories that does pay huge yields. So I’m still looking into that I believe some of them still can recall some of them are a bit leveraged. And then some of them I think this sell stocks to pay people were sounds sounds almost Ponzi. So again, like listener, like certain advice, but yeah, be careful.

Derek  

Be careful. I mean Erwin you could give me certain amount of money and I could leverage it up to the hilt and buy the highest yielding payers and then sell covered calls on them or whatever, but it’ll work until it doesn’t I’d be very sceptical, I guess and do your due diligence because oftentimes that is too good to be true. So…

Erwin  

And I know people who are investing money in these things, I don’t know how much if it’s significant to them, but they’re investing money based on off of an influencer SEC talking about on YouTube.

Derek  

You gotta remember the guys on Wall Street and Bay Street and stuff. They’re packaging products to sell to people. I mean, a mortgage backed securities back in 2008 2009, herbage, those blew up in people’s faces. And I mean, sad because some retirees lost their their pension, like lost their retirement savings and all that kind of stuff. So you got to be very careful, but they’ll package whatever people will buy, right? So just Caveat emptor. Like, you know, the buyer beware be very cognizant and careful of those kinds of things there. 

Erwin  

Thanks so much in November 12, and you’ll be one of our keynote speakers can I personally can’t wait.

Derek  

November 12. And if, if any of your listeners have any questions, you can go to my website at stopworking.ca and fire me an email I do answer them, you know, so. Yeah, otherwise, I’ll see you on November the 12th.

Erwin  

Yeah. And of course, Derek. Thanks again for being a supportive stock hacker Academy and being part of it. 

Derek  

Okay, thank you. 

Erwin  

It’s been I think the course has been improved so much since you joined it. 

Derek  

Oh, thank you very much. Appreciate that. 

Erwin  

Thanks Derek 

Derek  

Okay. 

Erwin  

Before you go if you’re interested in learning more about an alternative means of cash flowing by hundreds of other real estate investors have already then sign up for my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s much improved demonstration over the one that I gave to my cousin chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself, I got into real estate for the cash flow. But with the rising costs to operate a rental business, it’s just not the same as it was five to 10 years ago when I started there. 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 your pocket like I did on a recent basement flood at my student rental in St. Catharines. Ontario. If you’re interested in learning more, but it’s true for free for my newsletter at www dot truth about real estate investing.ca. Enter your name and email address on the right side. We’ll include in the newsletter when we announce our next free stock hacker demonstration. Find out for yourself what so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell I love teaching and sharing this stuff.

 

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