Insights on Portfolio Health, AI Integration, and U.S. Investment Opportunities

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Greetings my fellow investors and truth seekers, this is the Truth About Real Estate Investing Show for Canadians and if you’re addicted to social media like I am, there’s not a lot of good news within our community.  It’s not all bad, we just had Kelly Caldwell, Victoria Cluney, and Milena Simsic. Spencer and Ashley with their AirBnbs, Zac Killem whose company Front Lobby will thrive.  In general those with healthier portfolios as in not over leveraged, focus on cash flow and operational execution are doing just fine like many past guests of this show. I was just speaking to one investor/Realtor while preparing this episode who did just that, he’s buying more multifamily buildings and completed two flips in the USA. 

Off the top of my head, I can think of two past guests in significant financial trouble, one has already declared bankruptcy, the others owe a lot of people a lot of money to individual investors, not just banks.  Individual investors post to social media and tell others to warn them. I know because I have friends everywhere in the community and the messages arrive in my DM’s.

Both were newer to real estate as they made the switch to full time within the last five years or so.  I’ve left the episodes up because as far as I’ve know, there was no criminal intent nor are they being accused of any.

I run a real estate investment business called iWIN Real Estate where we are always looking to learn, evolve, and adopt best practices to help our clients optimize their investments and time, the only non-renewable resource. We started investing in single family, then multifamily, then student rentals, basement suite conversions, to garden/garage suites and it’s gotten unaffordable. We use Ai all through out our businesses.

I used Chatgpt to research case law when sellers accepted a higher competing offer when we had already accepted their counter offer.  I’ve used Chatgpt to proof read my clauses for counter offers which saves everyone time: my clients, my lawyer, my broker. 

I’m working on creating a digital duplicate of myself as I’m really busy booking calls to discuss USA investing. 80-90% of the questions are the same: what is the legal structure to own US properties, how do you get a mortgage, what are the fees like, etc… all repetitive I could have an Ai twin version of myself do. 

If you think I’m crazy, check out the found of LinkedIn, Reid Hoffman’s two way interview of his own Ai twin: https://www.youtube.com/watch?v=rgD2gmwCS10

For anyone in sales or customer service, if you’re not afraid for your job, I don’t know what will. This is one reason I diversify my business, use Ai tools, own cash flowing real estate.

The owner of Property Guys was on BNN talking about how 25% of Realtors in the USA will leave the industry after those historic lawsuit settlements.  This August, listings will no longer display co-operating commission for buyer agents hence buyer agents must negotiate commission from the buyer.  Property Guy mentioned there are two lawsuits in the works in Canada which confirms the rumours I’ve heard.  The implication is the public will be more aware that Realtor commissions are negotiable, they always have been and it my experience, sellers who want top dollar when selling will continue to offer co-operating commission.  Most of the professional investors do it. I do it, I actually offer above market co-operating commission and use it as a marketing tool and negotiation piece. I mean it’s worked for me, the last four houses I sold, I did so, on average in 22 days on market.

Point is, I’m a Realtor, I’ve worried for my job since 2010 and never been more worried with Ai, class action lawsuits and competition among other Realtors at their highest levels ever.  If only we had as many doctors and Realtors. Imagine how good our health care would be.

For complete business and investment sense, I of course partnered with SHARE, a tech enabled asset manager that allows Canadians to be US landlords without all the heavy lifting.  My 17 listeners know I’ve conducted well over 300, hour long interviews with successful and some no longer successful real estate investors work, invest, blood, sweat and tears.  In terms of cash flow and overall returns to effort, I haven’t seen anything before that beats SHARE’s offering.

In short, I’ve seen how the top investors implement their real estate investment business and can separate the hype from results. Those with results did not overleverage, were in control the whole time, delivered operationally to renovate and rent as fast as they could.  Those who didn’t are the ones making all the headlines in the news for declaring bankruptcy protection or bankruptcy or have their names dragged through Facebook groups for owing money. 

I had a call with a newer investor who’s got a great investment property in BC, she AirBnb’s the triplex in the summer months then rents to students during the school year.  That’s investing on steroids and she’s rewarded with six figures of rental income.

The investor asked why I call in long-term single family rentals boring?  To me it’s not exciting, there’s nothing innovative about it vs. what gets all the attention and likes on social media, note how many of those influencers have gone quiet or done major pivots. I know one big time condo agent appears to have pivoted to coaching Realtors which is going to be really tough in this market.  My clients and I’s investing is as passive as possible and we’ve done quite well. Our biggest challenge is under rented properties due to rent control but over the long-term, we’ve all done amazing with market appreciation.

Compare that to Airbnb in the summer where this newer investor does all the client interaction and only outsources the maintenance and cleaning to a property manager for 10% PM fees. Student rentals in my experience are a niche investment that is much more challenging to insure, manage, and get cheap financing.  My last student rental mortgage was with Home Trust at over 8% interest plus 1% lender fee.

Again, a wonderful business for the active investor.  Just be prepared for plans B and C and D should the municipality turn against student rentals or AirBnb.  Just last week, 10,000 protesters in Barcelona took to the streets, some even using water guns to shoot at tourists. The Mayor of Barcelona is banning 10,000 Airbnbs in the city… this makes me thing I need to buy some shares of hotels… source: https://www.ft.com/content/287c1d53-7dd0-410c-88bb-f43277c851b6

In my city, the City of Hamilton implemented rental licensing in the student neighbourhoods with plans to expand across the entire city and the mayor is former NDP leader Andrea Horwath.  To conform to licensing could costing landlords from a couple to several thousands of dollars in order to comply along with ongoing fees.  Thankfully I’ve sold my student rentals and I’m grateful for having done so as I look out the window of my office and know there are basements being flooded all over the province. There’s plenty of investors struggling out there already who don’t need this.  This widespread flooding event will push up insurance rates yet again, more housing cost inflation we can NOT pass onto the tenant in a rent controlled environment.

As someone who despises risk, I’m removing basement flood risk by divesting local houses and investing in houses in the USA that don’t have basements. I’m advising friends, family and clients to not invest in suiting their basements as it makes more sense to allocate those funds to buying a house in the USA.  To close on my house in San Antonio I need $97,000 US$ including a $10k reserve fund. A typical basement apartment conversion is $160,000 in my experience and you’re vacant six months.  How long depends on the municipality and the quality of your contractor.

My San Antonio tenants are renting the house back from me so I have zero vacancy and can defer my renovations till after they move out which I hope is never since this is Texas and there is no rent control

Only in colder climates do we need basements that go below the frost line to prevent heaving.  The same problem doesn’t happen in the southern USA making housing a lot less expensive to build, no need to ever have waterproof let alone flooding if you avoid coastal areas and Florida.

Even if you wanted to buy a turnkey duplex in Hamilton, Barrie, Oshawa, Ottawa etc… I’ve chosen those cities as prices and rents are similar there, I’ve calculated the capitalization rate = $ Net Operating Income / $ price at 4.1%. 

Compare that to what my clients are getting, low five to mid 7 cap rates in the USA.  The numbers don’t lie, the laws are landlord friendly, no rent control, and commercial style mortgages for us Canadian investors. I make way more commission selling a Canadian property than an American one but I want happy clients hence I recommend US investments over Canadian ones. Diversification and cash flow reasons alone make plain sense. The truth is also it’s way easier selling US income properties. I’ve sold way more US income properties than Canadian ones this year, never in my career since 2010 as a Realtor have I seen so little interest by investors to buy local income properties when the timing is ideal to pick up deals.

I do truly worry for my fellow real estate professionals in Realtors and mortgage agents/brokers. There’s a lot of them already and if they make a living focusing on selling local real estate investments and they not able to sell US products, I won’t be surprised to see many of them leave the industry.  

To me, it’s all a matter of education before investing in the USA via SHARE by Canadians is the norm, I honestly love my work, SHARE is the partner every lazy investor like me is looking for except they don’t take any equity share of the investment. Control and ownership remind 100% mine and Cherry’s. 

I’m going to record a video comparing a new condo investment vs. a duplex vs. my client’s property. He’s from Montreal, has never seen the house that is a 7.6% cap rate that only cost him about $160,000 Canadian. 

Link is in the show notes.

There is no guest this week. I literally had invited a former coach of a defunct real estate “university” as they invest big, nice people but their name is being blasted on social media for not making payments on their private mortgages.  The coach didn’t respond which never happens as gurus generally love coming on my show.  This isn’t an indictment on the coach/investor. If they can survive they’ll come out a winner.  Even if they don’t, I believe them to be talented and will come back.  

Personally I don’t like my investments to be a roller coaster hence I choose boring as I don’t have thick enough skin to tell people I’ve lost their money or I can’t pay them back.  That’s just me. The world needs the self declared crazies like Steve Jobs and Elon Musk. I just know I’m not that and stay in my boring lane.

But I do have equity in SHARE, I have some say in the company’s direction as Head of Business Development in Canada and I don’t see a more efficient path to my company’s 10 year gold: help 200 Canadians become real estate millionaires.  I’m at 45 or so now and I can see it in my mind’s eye, 10 years from now enjoying golf and dinner with 200 Canadian real estate millionaires who’ve gained a lot of financial peace via their boring real estate investments.

I can’t wait but I’m totally enjoying the journey.  iwin.sharesfr.com if you’d like to learn about the deals my clients and I are doing, from there you can book a Zoom call with me. Past clients, I’m always down for coffee, dessert, breakfast, lunch, dinner, or golf. You know where to find me.

To Listen:

** Transcript Auto-Generated**

HELP US OUT!

Please help us reach new listeners on iTunes by leaving us a rating and review!
 

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Converting a Dozen+ Houses Into Triplexes with Kelly Caldwell

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We firmed up our Texas income property, is residential investing in Canada dead? A dozen plus triplex conversions in Collingwood, ON & launching a TV show with Kelly Caldwell.

Welcome to the Truth About Real Estate Investing Show my fellow Canadians! I hope you’re all enjoying a hot summer but you know what’s not hot? Condos.

I spoke to one condo investor last week who’s been abandoned by his Realtor who made all sorts of promises: the investor bought two condos pre construction with the intention of selling one via assignment the market and using the profits to pay down the mortgage of the 2nd, the Realtor promised to rent out the condo as well.

We all know how the condo market has fare in Toronto or Vancouver… not well. So now this investor who also happened to lose their job also now carries two condos that have negative cash flow $4,000 per month.

You know what never made sense to me about preconstruction condos? Was how the cost per square foot was higher than existing condos.  So often I would see pre construction condos being sold for $1,600 per square foot when used condos were $1,400 square foot. As a professional real estate investor, I invest for value, not to speculate. If buying new, one would have to speculate the price of resale real estate goes up more than $200 per square foot to make money.  The investment model never made sense to me hence we kept our clients away from pre construction condos unless there was a personal reason to own them.

For investment though? Double land transfer taxes in Toronto and tenant friendly laws and especially after Canada investors learn how technology has made investing in the USA so easy to be a US landlord, to directly own investment properties. If I could show every pre construction investor the benefits of a US single family house rental via SHARE, I don’t see why an investor ever buys a long term rental condo ever again. 

I was going to say maybe in Calgary, AB but ever the President of REIN, Patrick Francey doesn’t think it wise so.  You know another truth about real estate investing for Canadians? I’ve yet had a real estate professional disagree with me over diversifying to the USA. I once had a laugh with a buying agent for one of my properties, he was asking me about investing in the USA as he too is interested, we chatted, I shared financial projections and how landlord friendly certain states are, before I snapped back reality, I needed to sell my property so I could invest in the USA and advised how my duplex in Hamilton was a better investment to which we both laughed.

Last week we also hosted a virtual tour of income properties in the USA.  I showed internal and external walkthrough videos by home inspectors, I shared the economic fundamentals of the markets my clients and I have purchased in.  Special guest, friend and client Derek Wormsbecker (https://www.instagram.com/derek.worm.mortgage/) shared about his experience buying an infill, new construction house, 1,250 square feet, 3 bed, 2 bathroom, 2 car garage for $176,000 and rented it out for $1,425 per month. That’s a 6 cap rate that will cash flow with less than 35% down payment plus a commercial mortgage, the ideal mortgage for scaling portfolios.

If you’d like to peruse deal like Derek’s in Little Rock, Arkansas simple go to my website iwin.sharesfr.com, create a free account, browse real current and past deals, and book a call with me should you like to discuss. Again that’s iwin.sharesfr.com if you’d like to learn how easy it is to be a US landlord, maintain 100% ownership, while letting SHARE do all the heavy lifting.

Converting a Dozen+ Houses Into Triplexes with Kelly Caldwell

On to this week’s show! This week’s guest is the lovely Kelly Caldwell, who has converted over a dozen single family houses for basement suites AND garden suites. Together with husband Jeff Caldwell, they’ve become leaders in their community, Collingwood, ON filling in the missing middle working closely with local government as such they were invited to be a part of a new HGTV inspired series called Home Suite Home where viewers can follow along as Kelly and Jeff navigate the world of accessory suite financing, design and construction.  You can catch them on Rogers Cable TV this fall as well as Youtube: https://www.youtube.com/@itshomesuitehome.

Kelly’s journey is a wild one.  She was barely an adult when she was orphaned as Cancer took her father, her only parent away leaving her as the eldest sibling of two teenage brothers. 

Kelly shares about her remote investing way up north, how she managed the renovations, Kelly shares the numbers around a typical basement conversion and garden suite.  For the first time a guest talks about the benefits of polished concrete floors for both heating and finish. Fascinating stuff for real estate nerds such as myself.

If you can’t tell, Kelly is no stranger to hard work so please enjoy the show!

Instagram: https://www.instagram.com/itshomesuitehome/, https://www.instagram.com/the_dash_investher/

Realtor website: https://caldwellrealestategroup.com/

The dash poem: https://noahwatry.medium.com/the-dash-poem-by-linda-ellis-33fe4d54a1b4

ADUSearch: https://adusearch.ca/index.html

To Listen:

** Transcript Auto-Generated**

HELP US OUT!

Please help us reach new listeners on iTunes by leaving us a rating and review!
 

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Pitching & Building Tiny Homes on Dragon’s Den With Victoria Cluney

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Summer fun, failed home inspection, accepted offer in San Antonio, Texas, my friend Victoria is on Dragon’s Den for her Tiny Home village venture!!  All this and more on this week’s Truth About Real Estate investing!!

We are back from my friend’s cottage we rented along with friends and their kids.  It cracks me up how all my friends growing up had family cottages that were more like shakes compared to modern day cottages valued at well over a million dollars these days.

We rented from a friend for a couple thousand for the week which is great money but as a business or AirBNB? Not for me as our friends are hands on owner operators: husband is the handyman including having to unplug the septic system of feminine hygiene napkins in the middle of the winter that were accidentally flushed causing a back up to the wife being the point of contact for the renters. 

It’s a wonderful business for those who enjoy being in hospitality, just not for Cherry and I who have very active businesses, young family, and prefer our investments to be as passive as possible.

Speaking of investments, my accepted offer in Kansas City, Missouri. The deal died as the renovation budget came back too high, killing my numbers, specifically capitalization rate: net operating income divided by the investment value.  On to the next which came while I was at the cottage: an off market, detached 2005 build house in San Antonio, Texas, 2000 square feet, 4 bedroom, 2.5 bathroom for $265,000 plus $35,000 renovation and $2,300 rent per month. Cap rate? 5.1% even after those Texas property taxes and it still beats the pants off of anything I can find in Canada in the context of landlord friendly, historic levels of investment and high paying creation of manufacturing jobs in the State of Texas.

My partner in SHARE (iwin.sharesfr.com) put the deal together for me, held my hand for legal structure creation, ordered the home inspection, property manager inspection and quoting for the renovation.  I just review everything from the comfort of the cottage.  We close in a few weeks and provide more details on a future episode if you and my 17 listeners are interested!

Fun useless fact of the day about Texas: if you removed Texas from America, it would be the 8th largest economy in the world. Bigger than Russia, Canada, Australia, Italy, etc… A $2 trillion dollar economy and growing with a population of 30 million. Compare that to Canada also with a $2 trillion collar economy that’s stagnating with 39 million population. 

I have about 100 more reasons to invest in Texas from my research, much of it you can pick up for free https://www.truthaboutrealestateinvesting.ca/. I have reports and a free newsletter, just click on the link on the right hand side, type in your name and email and you’re good to go along with receiving invites to our free and inexpensive educational events.

Another fun useless fact of the day: it’s public knowledge the American economy is exponentially increase their lead on Canada’s from here forward, why aren’t more Canadian real estate professionals promoting investing in the USA.  My team at iWIN Real Estate is still really busy helping local investors almost entirely on the sell side. I make way more money selling real estate in Canada than the USA but I won’t shut up about investing in the USA.  Food for thought.  And if you agree with my philosophy please do share this podcast with your friends and family.  The writing is on the wall how hard it is to be a long term residential landlord in Canada.  BC just announced it’s now four months notice to evict a tenant if you’re moving in.  The trend is not our friend here…

Pitching & Building Tiny Homes on Dragon’s Den With Victoria Cluney

Real estate development for it’s lack of long term tenants makes more sense which is a great segway for this week’s guest Victoria Cluney fresh off recording a show on Dragon’s Den to pitch her Tiny Home community and manufacturing of tiny houses!!  Victoria is under a hush agreement about what happens on her episode but will share her experience auditioning, getting called back and pitching to the real life Dragons for the show.

Victoria is a returning guest of this show who’s on a great journey from small landlord of long-term rentals to short-term cottage “bunkies” to AirBnb’ing a motel to building a tiny home community, manufacturing tiny homes and being a part of the solution to solving this affordability crisis we’re having in Canada.

Victoria is also co-hosting the RE Resilience Summit (https://realestateresilience.ca/) Saturday and Sunday September 28 & 29.  Her co-hosts include Meghan Hubner and Elizabeth Kelly.  Elizabeth Kelly as you know is a regular and friend of the show, she’s one of the few good ones in our industry so if you’re new or old to real estate investing, you know the RE Resilience Summit will have something for everyone.

To follow Victoria:

Instagram: https://www.instagram.com/victoriacluney/?hl=en

WE BILD Meetup: https://www.meetup.com/webild/?_xtd=gqFyqTMzNzkwNjIyMaFwpmlwaG9uZQ%253D%253D&from=ref

Tiny Home building & community: https://www.tayridge.ca/

Please enjoy the show!!

To Listen:

** Transcript Auto-Generated**

HELP US OUT!

Please help us reach new listeners on iTunes by leaving us a rating and review!
 

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Managing Six Figure AirBnBs in Canada & USA With Spencer & Ashley

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New construction six plexes in Windsor, Ontario, tiny house communities, the status of real estate and investing in Canada, solving for happy, AirBnb investing: US vs. Canada, where is better, my show guest and I disagree. I’ll let you, my 17 listeners decide.  All this and more on the Truth About Real Estate Investing for Canadians!  What once was ranked #81 on all of iTunes in the Business category but much has changed. 

Real estate investing in Canada has really fallen out of favor.  I see it at work, my own listings, on social media: all the condo bulls have gone either quiet or pivoted to coaching. I feel so bad for the agents I see paying for paid advertising of new construction condos while there are nearly 10,000 condos available for sale right now per John Pasalis of Move Smartly.

Condo investors are rushing for the exits, unfortunately if you bought a small condo, there’s lots of competition and very few buyers.

My friend in Toronto with a 1 plus den however immediately rented his condo AND had three offers to purchase.  I’m not a condo investor but I’ve known for over a decade that the 1 plus den condo is the poor person’s two bedroom or the rich persons’ two bedroom so if you’re going to invest in one, make it a plus den as even in condo winter, the best practice is still working.

Housing inflation continues: my house insurance on my remaining portfolio in Hamilton, each one just went up $5-700/year. I’m not looking forward to rental licensing adding another $6-700. Our property tax is going up only 5.8% but they’re deferring a bunch of stuff so they only kicked the can down the road to be dealt with in the future.

This is why when a Canadian not from Alberta is pitching me a deal I ask them if their projected cash flow improves over time or gets worse? Between rent control and inflation.

But bless those who continue to create housing supply. I have an idea how difficult it is and we certainly need more of it.  It’s the only way prices will come down like we’ll see in small condos in Ontario and BC.

I just returned from Windsor, while I was there the sale of my daughter’s house closed yay! Milena Simsic and her business partner Brandon Finn were kind enough to host me as their speaker. It was a pretty sweet event. $20 admission got you stone over pizza dinner and there was tons of leftovers as funny enough, Milena and I don’t eat pizza LOL

For the first time ever, I gave a presentation with no power point slides, just a white board I borrowed from my office and drew a T chart: Canada on one side, US on the other and categories such as mortgages, landlord rights, cash flow.

The feedback was excellent, that you to everyone for coming and saying hi: Cody, Louis, Kyle, Matt, Kevin, Jonathan, Savio, and Mike Seal.  Thank you again to Milena and Brandon.

If you have not listened to my podcast interview of Milena Simsic: https://www.truthaboutrealestateinvesting.ca/how-a-nurse-became-a-millionaire-and-top-1-realtor-with-milena-simsic/

We really dug into her story and journey and if you want to be young and successful, she’s pretty much laid out hers on the show.

“Solving for Happy.”  I just finished Mo Gawdat’s book. I can’t recommend it enough thought caution to parents, it’s tough to listen to at times. Mo reads the audio book himself so each time he revisits his son’s accidental death he gets choked up and coincidentally someone decides to cut onions wherever I happen to be when it happens.

Some of the nuggets include accepting death, no amount of money will make you happy, do more of what makes you happy, recognize what doesn’t make you happy and do less of if.  In the absence of evidence based decision making, go with happiness.

I can’t tell you how much my work makes me happy I’m enjoying educating and sharing with Canadians about how much better and easier it is to be a US landlord and here locally while I get paid and have equity in SHARE.

Which reminds me, I’m hosting a free, virtual tour of USA income properties including the one I’ve conditionally purchased in Kansas City, MO for 1200 sq ft detached, 3 bed, 1.5 bath. Register here: https://us02web.zoom.us/webinar/register/5417189936607/WN_EQ_jWXpESF-r77oLzd28eg

Off market, BRRRR: $157,500 to buy, $25,000 renovation, equity uplift of hopefully 10k. $1,495 monthly rent. 5.9% capitalization rate which in other words is operating profit yield before financing costs.  Cap rate is a must know for all sophisticated investors because no one can tell you what your cash flow is because everyone’s financing is different. Pros know cap rate, it’s the lingo of our industry.

Link for full definition: https://www.investopedia.com/terms/c/capitalizationrate.asp#:~:text=Understanding%20the%20Capitalization%20Rate,cash%20and%20not%20on%20loan.

Managing Six Figure AirBnBs in Canada & USA With Spencer & Ashley

 On to this week’s show, as always, we try to focus on cash flow the young, lovely couple Spencer and Ashley Giles are Niagara- based real estate investors with a shared love of travel (they are literally vacationing in Nashville, TN right now, hopefully they find an AirBNB investment there as I hear Nashville is awesome), fitness, and dogs. They started investing in 2018 and have since expanded their portfolio to 13 units with a mix of short- term and long-term rentals. Spencer and Ashley co-founded Travelluxe Inc. in 2019, a short-term rental management company, which currently manages over 45 units across Canada and has expanded to the USA. We go into detail about that on the show including the numbers.

They were able to leave their corporate jobs in 2021 and 2022 to focus all their efforts on their businesses. Their love for travel has brought them all around the world where they are able to mix work and pleasure by creating systems that allow them to be location independent. 

Instagram: https://www.instagram.com/spencerandashley/

Website: https://spencerandashley.com/

Ellicottville Airbnb: https://www.airbnb.ca/rooms/53721048?locale=en&_set_bev_on_new_domain=1719192849_EAMTU0NWYwZTcwNj&source_impression_id=p3_1719192850_P3OWaZ8QQzOrJpJd

To Listen:

** Transcript Auto-Generated**

HELP US OUT!

Please help us reach new listeners on iTunes by leaving us a rating and review!

UPCOMING EVENTS

I have an FREE Virtual U.S. Property tour on July 10th at 8:00 PM EDT. Join me for an insider look at these dynamic markets, fresh off my recent U.S. trip. We’ll dive into the specific locations I’m targeting, explore the properties themselves, and crunch the numbers to show their cash flow potential. Register here: https://us02web.zoom.us/webinar/register/5417189936607/WN_EQ_jWXpESF-r77oLzd28eg

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Navigating Legal Structures and Taxes: A How To for Canadians Investing in the US with Carmen Da Silva, Tax Specialist, CPA in both USA&CAN, CFO of SHARE

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Off market, Accepted offer in Kansas City for a three bedroom, 1.5 bath, 1,200 sq feet for $183,000. Estimated monthly rent? $1500, 5.9% cap rate.  Potential for civil unrest including rent strikes in Canada and Legal and Accounting structures for Canadians owning US rental properties with Carmen da Silva, CPA in both Canada and USA. All this and more on this week’s Truth About Real Estate Investing for Canadians!

Greetings my fellow Canadian investors! My name is Erwin Szeto, host of this humble podcast since 2016, home of over 300 episodes where we speak to Canadian investors about what repeatable successes they have, where they made mistakes, what drives them so we may all learn from their experiences to improve our own investment portfolios.

This past week has been a wild one. My US entities have been created, I’ll applied for my employer identification number (EIN) so I report taxes to the IRS. I have funds after selling a few houses from our investment portfolio and have been eagerly awaiting to buy a house in the US then Thursday I get an email from Dmitri, CIO of SHARE, an off market deal from a wholesaler came available, we have a conditional sale, and I’ve ordered a home inspection. 

The deal? Kansas City, MO, Detached house 3 bedroom, 1.5 bath, single garage, 1,200 square feet for a whopping $183,000 including renovation. Projected rent: $1,500 per month plus utilities. Cap rate for those who know commercial real estate, 5.9% in a single family house.  In my experience, 5.9% cap rates are extremely hard to come by without significant development and renovations as you’ve heard many of my past guests of this show discuss by full time investors vs. I’m remote, passive investing. I’m happy to stay in my boring lane and happy for those who enjoy the excitement of active, exciting real estate.

Some quick interesting facts about Kansas City? 46% of the households are renters in KC, the Ford F150, the most popular pick up truck in America is manufactured in KC employing 7,500, and Panasonic is building a new electric vehicle battery manufacturing plant just west of KC, a $4 billion investment projecting 4,000 employees. Needless to say, I’m liking the economic fundamentals. (https://www.rentcafe.com/average-rent-market-trends/us/mo/kansas-city/#:~:text=occupied%20Households%3A%2054%25-,End%20of%20interactive%20chart.,54%25%20are%20owner%2Doccupied.)

As mentioned I’ve ordered a home inspection and the property manager will be quoting about $25,000 worth of renovations to optimize my rent return. 

When the email came in, I was literally finalizing my presentation I was about to give in front of 120 Dominion Lending Centres (DLC) mortgage agents and brokers.  My mortgage broker, Scott Dillingham who can get me both US and Canadian mortgages invited me to speak as he was announcing the availability of US mortgages to all of Dominion Lending Centres’ 2,800 mortgage professionals.

The feedback was overwhelmingly positive as this was a trade show and SHARE had a booth I was attending. It didn’t hurt that the two Chief Economists who spoke at the same conference has many positive things to say about the US economy.

Pardon the geek speak but my two favourite economists were speaking at the same event: Dr. Sherry Cooper and Benjamin Tal, both I’ve been following for over a decade as they’re sharing and very insightful.

Benjamin Tal, Deputy Chief Economist for CIBC mentioned how the housing crisis we are in is quite bad and if left to continue we could see some civil unrest of anti-immigration and renter strikes.  I’d argue we’re seeing both already.  Ben also mentioned we are in a recession in terms of real GDP per capita as in inflation adjusted per person.  When this happens, expect quality of life to decline which we are seeing now with health care and education suffering.

All this while the US economy is chugging along, Jerome Powell, Chairman of the US Federal Reserve has revised downwards the number of rate cuts in 2024 from three to one. Most economists are predicting four rate cuts for Canada in 2024.

Both Ben Tal and Dr. Sherry Cooper predict the Bank of Canada’s overnight rate to fall to 200 bps to 3% by end of 2025 and a steady increase in prices for detached real estate.  Condos not so much: buyers market for next year, year and a half.

For this reason, I don’t feel so bad for still holding several local properties in our portfolio. I fully anticipate appreciation to be there, just not cash flowing and worsening with inflation running so high. 

I also don’t know why immigrants continue to come here hence I asked Dr. Sherry Cooper, Chief Economist for Dominion Lending Centres. She had shared earlier that the federal government is still forecasting 500,000 new immigrants per year in each of the next few years.  I asked Dr Sherry if there is still demand and she said yes, there is plenty of demand for immigrants to come to Canada… while owning a home has never been so unaffordable in Canada. 

At the same time Canadians leaving Canada for the USA is at an all time high. A 70% increase from a decade ago. Exactly 126,340 in 2022. I have a feeling that number will continue to trend upwards.

Source: https://www.cbc.ca/news/politics/canadians-moving-to-the-us-hits-10-year-high-1.7218479

Personally, I’ve never been so busy fielding calls from Canadians to invest in real estate but they’re asking about SHARE and investing in the USA, not locally.  If you too would like more information on investing in the USA, I’ve written a free guide to USA Investing for Canadians. You can download it from www.truthaboutrealestateinvesting.ca/ once you have the report, you can check out current and past deals available for direct investment on the SHARE website and you can pick up my report on the best places to invest in the USA in 2024.

Navigating Legal Structures and Taxes: A How To for Canadians Investing in the US with Carmen Da Silva, Tax Specialist, CPA in both USA&CAN, CFO of SHARE

On to this week’s show!

We have a special guest today who we squeezed in before her return home to Tampa Bay, FLA to warm weather, pickleball year round, fruit trees in her backyard. The reasons are obvious why Canadians love Florida. Carmen is a Canadian living in Florida, she’s Chartered Professional Accountant Tax Specialist in both Canada and the USA. She owns 70 income properties in the USA, her 24 year old son even owns three rental houses in the States too! Carmen got into investing after selling her business, then in the 2008 real estate crash and bought a portfolio of single family homes in Florida to generate cash flow and replace part of her income.

Carmen is a passive investor as SHARE’s property management team takes care of everything so she gets to enjoy early retirement income.

As Carmen is a practicing Accountant who prepares tax returns for Canadian clients, she introduced clients to invest in US based single family rentals including Andrew Kim, CEO of SHARE and together could see how involved the process from legal setup to ongoing property management but the returns are life changing hence they knew they had to create SHARE, a technology based real estate solution for anyone to become a US landlord without all the hard work.

I’ve invited Carmen Da Silva, CPA in both Canada and US to return to the show to focus on the most common questions Canadians have about investing in the US.  The answer is different for everyone and Carmen takes the time to explain why.

Friendly disclaimer, I Erwin Szeto am not an Accountant, Carmen Da Silva is an Accountant but not your personal Accountant so you still need to seek your own professional, expert advice for your specific situation.  Our conversation is for educational purposes, tax let alone cross border tax is a complicated subject.

With that said please enjoy the show!

To Listen:

** Transcript Auto-Generated**

HELP US OUT!

Please help us reach new listeners on iTunes by leaving us a rating and review!

UPCOMING EVENTS

I have an FREE Virtual U.S. Property tour on July 10th at 8:00 PM EDT. Join me for an insider look at these dynamic markets, fresh off my recent U.S. trip. We’ll dive into the specific locations I’m targeting, explore the properties themselves, and crunch the numbers to show their cash flow potential. Register here: https://us02web.zoom.us/webinar/register/5417189936607/WN_EQ_jWXpESF-r77oLzd28eg

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

From International Student to Stock Option Investment Coach and USA Apartments With Cody Yeh

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What a week: we had a rate cut, I sold my daughter’s house, I got into a heated disagreement with another agent who doesn’t understand contract law, and hosted a sold out US Investing Workshop. Our best ever in my humble opinion.

We also have a great guest this week. What can we say about Cody Yeh other than he’s a young hustler. In a good way! He used to work as an Engineer for Honda in Alliston, invested in real estate, built and AirBnb’s a garden suite, quit his job, started a stock option education and coaching company, built and Airbnb’s a massive garden suite in Bowmanville, Ontario.  He’s lived all over Ontario now he’s bought an apartment building in Ohio.

All this and more on the Truth About Real Estate Investing for Canadians!

How much fun is this real estate market?  

We finally got a rate cut of 0.25% as the Bank of Canada is finally signalling the economy is as weak as everyone knows, one of the weakest among the developed countries, there are more condos being listed than ever before, local investment buyer activity still seems lows while my business in the USA investing in single family houses is going quite well.

I literally met with my clients on the weekend Mason and Melissa, not their real names. My team had been helping them find a duplex in Welland, ON, a hot spot for many Ontario investors in the $650,000 range that would rent for about 3,400-3,500 per month.

Mason shared how he didn’t feel right about the investment until he saw what we are doing in the US with SHARE and has since purchased a perfect BRRRR project off market via a wholesaler SHARE has a relationship with, the wholesaler actually wanted the house for himself as this house in Atlanta was a projected 6% cap rate which is a very rare find. In a single family house nonetheless.

If you’re not familiar with cap rate that’s totally normal, it’s short for capitalization rate, a common metric for commercial real estate: apartment buildings, retail, office, and industrial.  

It’s simply your rent minus operating expenses like repairs, maintenance, property management, bad debt, property taxes, insurance but before mortgage payments and income taxes. This is called net operating income or NOI for short.  Keep in mind, many listings leave out expenses for I don’t know what reasons like bad debt, the tenant not paying you, property management, repairs and maintenance. I literally reviewed projected financials for a duplex in Brantford that quote/unquote cash flowed over $700/month so I dug into the numbers and yup, omitted were property management, repairs and maintenance, bad debt and vacancy allowance.

Now divide the NOI by the purchase price AND the initial renovations 

You as the sophisticated investor need to be able to read pro forma, aka future performance financials. One can youtube better explanations with visuals and learn how to compare. Don’t let someone dupe you into paying top dollar for something with incomplete financials.

At the end of the day, Mason and Melissa got a sweet deal as I don’t know where you can find a six cap in a large, economically diversified city like Atlanta, GA in Canada.  For context, if Atlanta, GA was in Canada it would be the 2nd largest city based on great area population.

Real estate investing in the USA simply makes sense to have the majority of the rights. For example, in the State of Georgia, the lease agreement may set reasonable limitations on the number of occupants during the tenancy.  Pets and smoking can be restricted or banned in the rental agreement.  In practice, some landlords charge extra rent for each pet depending on size.

In Ontario, I have no such rights.  I literally had a tenant, a single guy moved in, a trucker so he made great income and wouldn’t be at the house much, the perfect tenant. Then his girlfriend moved in and bred puppies in my duplex.  My poor basement tenants rightfully complained about the smell and noise but legally, I couldn’t do anything about it.  I suggested to my basement tenants to call the city and police to complain.

The tenants with the puppies even left for a day, leaving the puppies in the house to cry all day and night, defecating all over the place and disturbing my poor basement tenants.

Versus in Georgia, my lease word be worded to allow me to charge for additional occupants and pets and limit the number of both.

Hence the reason I’m selling off a portion of my portfolio to reduce my stress, improve cash flow.

Speaking of, my daughter’s house is sold and it closes before the June 25th deadline before capital gains inclusion rate goes up on corporate owned investments.  Doing so saves me close to $50,000 in income taxes.

The sale took me three weeks. I was honestly expecting a better market since everyone knew the rate cut was coming, my duplex is legal, move-in-ready, vacant and staged.  As good as it gets but the buyer activity was so slow.  Showings were slow, I only received three offers, all I considered low but thanks to my 14 years of experience being an investor specialist Realtor and having studied negotiations extensively, I stood my ground on my terms and got quite close to it.

Funny story, the agent who brought the winning offer did his due diligence on me. He knew me as Mr. Hamilton from his REIN days.  The importance is my branding gave him and his clients a lot of comfort over the quality of the house they were buying.  This mattered because the City of Hamilton had been hacked so I can’t easily get my zoning verification to prove the legal use of my daughter’s house, a legal two family home or as most call it, a duplex.

I did have my permits, proof my permits were closed, ESA certificate, proof of insurance for a two family house but my word and reputation is what sealed the deal.

Now that I have sold four houses from our portfolio, I have some capital to deploy down south. We still have a significant amount of real estate in Hamilton and GTA so we’re still well poised to benefit from appreciation but not so much cash flow so we are refocusing my search for US income properties with better yield and cash flow so my new focus will be on Memphis, TN, Birmingham, Alabama, Kansas City, MO, and Little Rock Arkansas.  

Basically, 6 cap rates and up. I can’t wait! To start researching each city 🙂

From International Student to Stock Option Investment Coach and USA Apartments With Cody Yeh

On to this week’s show!

Cody Yeh arrived in Canada at the age of 18 on a student visa, initially lacking knowledge in income and wealth creation. Over the past 11 years, Cody has undergone a significant transformation, evolving from a student to a full-time project manager, and eventually to a financial coach, real estate investor, and stock options investor. The skills he acquired during this period enabled him to leave his full-time job at the beginning of 2020. 

Cody now has a stock options investing program and he’s buying apartment buildings in the USA.  It’s quite the journey.

To follow Cody, his website is his name Codyyeh.com

Please enjoy the show!

To Listen:

** Transcript Auto-Generated**

Subscribe on Android
 

HELP US OUT!

Please help us reach new listeners on iTunes by leaving us a rating and review!

UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

How a Nurse Became a Millionaire and Top 1% Realtor With Milena Simsic

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I sure hope interest rates are cut on June 5th! I could use the bump to help sell my daughter’s house.  That is the Truth About Real Estate Investing for Canadians! My name is Erwin Szeto, host of this little podcast, 17 devout listeners, thank you to all 17 of you who said hello and some of you joined me for dinner at the Multifamily Conference! I always appreciate the kind words both in person and on iTunes’ 5 star reviews.

I do have to say I’m grateful for our listeners and past guests of this show who share with me both how they make money AND unfortunately lose money.  I had one listener share with me at the Multifamily Conference. She has five private mortgages that have gone bad. I already knew this is a main area of losses as my wife Cherry has an Accounting practice specializing in Real Estate and private lending is the current #1 loser for investment categories.

I know some out there don’t agree with my stance that I don’t lend privately and probably never will. The worse case scenario that many investors are facing today falls outside my investment criteria.  As my regular listeners know, I’m very diligent and risk averse and if I ever did lend, I would be registered on title.

As for a real estate market update, activity is definitely increasing compared to Victoria Day long weekend. Showing volume is up, I’m getting offers though it’s mostly from what I call vultures: investors throwing out low ball offers looking for motivated sellers.  I don’t blame them, I would be doing the same.

My student rentals had considerably more interest so I’m guessing I’m not the only one steering away from long term, residential tenants.  While tenants in Ontario and BC have all the rights, I don’t see how rents don’t keep climbing as housing is not built, immigration is high, mom and pop landlords are generally exiting.

If you’re a parent or renter, I’d recommend taking action asap.  As many of you know my story, I bought each of my kids a house as a RESP when they were born. I’ve sold one and am selling another now and will redeploy in the USA.  Housing inflation in the USA has been 5.5% each year over the last 53 years so I’m hedging my inflation risk and building wealth for the family.

Speaking of kids, how cute is it that my kids participated in a Dragon’s Den style public speaking competition.  They were taught how to structure a business business pitch then pitched their fictitious businesses in front of a live audience including judges.

My son pitched his flying magic carpet business as an alternative to driving a boring car to avoid traffic jams.  The price of a flying magic carpet? Only $50,000 each LOL. Never forget talk is cheap, in real estate execution is everything, those who don’t execute go bankrupt as we’re seeing in our community.

The cash flow and effort involved never worked for Cherry and I for a large scale portfolio with investment partners in Ontario when commercial interest rates were 4% (we now dream of those days…even at 4% we were conservatively forecasting negative cash flow).  Today we’re at historic highs and I feel sorry for all those losing their shirts and retirement funds.

Keep it boring investors, focus on cash flow, and be passive as possible.  Unless you’re prepared to invest more than 15 hours per week and like being an active investor, go for it. Otherwise, keep it boring and go back to work and your family.

If you want to know the truth about how Cherry and I will be investing boring and for cash flow in the USA then, Saturday June 8th for a hybrid workshop meaning both in person in our offices in Oakville and broadcast online via Zoom webinar.  This is for beginner to experienced investors who have little previous experience investing in the USA and we’re teaching everything you need to know for a whopping $30 plus tax and Eventbrite fees.  That’s tremendous value considering attendees will be learning about the future of Canadians investing in real estate.  The writing is on the wall and from my research, my conclusion is buy American. Pretty much everyone at the Multifamily Conference was saying the same, it’s only a matter of education on how to at this point. 

Link to register: https://USAworkshop-er.eventbrite.ca/?aff=podcast

How a Nurse Became a Millionaire and Top 1% Realtor With Milena Simsic

On to this week’s show!

In the latest episode of our podcast, we had the pleasure of speaking with Milena Simsic, a remarkable individual who transitioned from being an ICU nurse to becoming a top 1% Realtors in Windsor, ON. Milena’s journey is a testament to the power of determination, strategic thinking, and adaptability.

Milena’s story begins in the high-pressure environment of an ICU in Detroit, where she worked for four years, including during the COVID-19 pandemic. Despite her passion for nursing, she realized that her financial goals and long-term aspirations required a different path. Intrigued by the potential of real estate, she saved diligently and made her first property investment, a sixplex within eight months of starting her nursing career.

In February 2022, Milena made the full-time switch to real estate. Leveraging her skills, discipline, and having grown social media presence of 10,000, she quickly established herself as a formidable player in the Windsor market. By the end of her first year, she had achieved $300,000 in gross commission income, placing her in the top 1% of realtors in the area.

We talk about why and how Windsor’s market is booming unlike the rest of the province and how an investor can take advantage of it.

What I love about having this podcast is getting an hour of time from busy, successful talented people such as Milena so we can drill into what makes her tick, her secrets to success, how it didn’t come easy but rather with a lot of hard work.

I’ve been lucky to have many pasts guests of this show and I happen to hang out with 7 figure entrepreneurs all the time so I have experience hanging out with talented people and I’d count Milena among them. You don’t become a top 1% Realtor without talent and hard work. 

If you’re in the Windsor area, you definitely want to the check out the Windsor REI Social, the largest real estate networking event in Windsor, ON. Milena has honoured me with an invite to be the guest speaker Wednesday June 19th, 6pm at the Winelogy Restaurant and Bar.  I’ll be sharing my journey from 20 year landlord in Ontario to my recent pivot to the USA and I have to same kudos to Windsor REI Hosts Milena and Brandon Finn for hosting a speaker on the subject of USA Investing.  Not many local real estate professionals would.

To register for the meetup: Link: https://www.eventbrite.com/cc/windsor-rei-social-429899

To follow Milena:

Instagram: https://www.instagram.com/milena_simsic/

Website: https://milenasimsic.com/

Facebook: https://www.facebook.com/windsocialrealty/

Please enjoy the show!

To Listen:

** Transcript Auto-Generated**

Subscribe on Android
 

HELP US OUT!

Please help us reach new listeners on iTunes by leaving us a rating and review!

UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Revolutionizing How Tenants Build Credit & Improving Rent Collection with Zac Killam

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Cherry and I have created our legal entities: limited partnership and LLC: limited liability company to begin writing offers and owing income properties in the USA.  Welcome to the Truth About Real Estate Investing Show for Canadians, my name is Erwin Szeto, a 20 year landlord in Ontario, Canada and investment specialist Realtor with over 300 past clients transacting on close to half a billion dollars for of income properties since 2010 with my team at iWIN Real Estate. 

In my experience, the writing is on the wall for investing in Canada vs. the USA hence I am selling a significant percentage of my portfolio here in Canada to diversify to the USA and I haven’t been this excited since I first got into real estate investing.

Where am I investing?  There are historical levels of investment going on in the USA by major corporations in microchip manufacturing and car manufacturing, specifically electric vehicles so there is much to choose from.

How I chose my target areas is I looked for the intersection of towns and cities with the best of the best past, I can still get value as in three bedroom detached houses for between $2-300k with historic levels of manufacturing investment and the creation of high paying manufacturing jobs.

The creation of high paying manufacturing jobs means my future tenants will have great, growing income to afford my rent and people naturally migrate to areas with affordable real estate and high paying jobs.  

But I’m in this for the long term so I need stability of employment. Without a growing industry or employment, the real estate market won’t go up.  Simply google “Foxconn investment in Wisconsin” (wikipedia: https://en.wikipedia.org/wiki/Wisconn_Valley_Science_and_Technology_Park#:~:text=The%20Wisconn%20Valley%20Science%20and,with%20the%20state%20of%20Wisconsin.) or look at Fort McMurray of Alberta which has been decimated by the downturn of oil investment and forest fires.  Oh yeah, maybe stay away from climate change and insurance risk like hurricanes hence places like Houston and Florida are off my list for investing.

Fort McMurry Median Price of Detached Home

Source: https://creastats.crea.ca/mls/fort-median-price

Based on my current research, I like Austin and Dallas, Tx, Atlanta and Savannah, GA, Phoenix AZ, and Memphis, TN for cash flow.

All of the above locations are landlord and business friendly hence you see all those areas attracting billions of dollars in investment including foreign investment and institutional scale property management firms with 800-3,000 houses under management are available to my partner SHARE to hire.

PM companies of scale do exist in Canada but they typically want 100 doors or more before they’d take you on as a client and there’s not many of them or they only manage their own massive portfolios, the rest are small mom and pop shops.

From my friend in Alberta who works for a public traded company with an apartment building portfolio, the same cannot be said for Alberta so while Alberta is great, I have many friends killing it in Alberta right now, I can de-risk my investments further and scale larger, faster in the USA including in the Texas of the world vs. investing in the Texas of Canada aka Alberta.

Speaking of scaling, my mortgages in the USA will be commercial which are 10 times easier to scale than mortgages in Canada due to affordability and not having to personally qualify.

In case anyone wants to learn more about how and where Cherry and I are investing in the U.S, I’m co-hosting a workshop with Cherry and the SHARE team on Saturday, June 8th.

We’ll go over the best spots to invest in the U.S., how buying property works there, what you need to know about taxes, tips for managing properties when you’re not there in person, and much more! Limited spots available!

Revolutionizing How Tenants Build Credit & Improving Rent Collection with Zac Killam

Zac Killam: Real Estate Innovator and Entrepreneur, a Top Forty Under 40 winner, has made significant strides in the real estate industry. He has built a rapidly growing multi-family real estate business of 500 units, leveraging his entrepreneurial acumen to drive success in this competitive market.

Beyond real estate, Zac founded Canada’s largest taxi advertising network, the second largest globally, and a PropTech company.  The other property technology company he’s know for in our community is getting national attention called Front Lobby, pioneering rent reporting to credit bureaus in Canada, enabling renters to build credit through their monthly payments, used by a small as mom and pop landlords to publicly traded real estate investment trusts.

Join us on our podcast as we explore Zac Killam’s real estate ventures and his innovative impact on the industry including how all landlords can better screen and improve rent collection while tenants build credit. A win win outcome!

https://frontlobby.com/

Please enjoy the show

To Listen:

** Transcript Auto-Generated**

Subscribe on Android
 

HELP US OUT!

Please help us reach new listeners on iTunes by leaving us a rating and review!

UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
FB: https://www.facebook.com/erwin.szeto
IG: https://www.instagram.com/erwinszeto/

Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.

Realtor to Uncovering Deals As A Full Time, Well Off Investor With Georges El Masri

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It’s a bitter sweet day as I’m selling my Daughter’s RESP: real estate savings plan.  This is the truth about real estate investing show for Canadians and the truth is investors are seller waaaaaay more than buying from what I’m seeing and hearing from other high level investors.

What I’ve learnt in this real estate winter is my small residential investment properties: single family houses I’ve renovated to be student rentals or legal basement apartments are much more liquid than any other piece of real estate.  My investment properties that I’ve sold, while optimised for income and location, they each sold in 7, 14, and 32 days.  Those are sellers’ market days on market numbers.

Compare that to apartment buildings, commercial retail, offices, industrial, multifamily, cottages, condos whatever, nothing in today’s market has more demand than the single family house in a good and safe neighborhood.

Industrial is hot too but you can’t say the same for any other category of real estate.  Talk to any local apartment building owner, CMHC isn’t in a hurry to refinance renovated apartment buildings, CMHC’s focus is on actually creating supply, the actual solution to solve the housing crisis.

That is the truth about real estate investing for Canadians and I happily put my money where my mouth is.  My name is Erwin Szeto, host of this little podcast since 2016 that has ranked as high at #81 on iTunes in the Business category.

As mentioned, I’m listing my daughter’s house that I bought for her back in 2015, converted it into a student rental for college students.  They were rough on the property so I had the basement legally renovated and converted into an apartment and rented it out long term in 2017.  The tenants were pretty good and stay up until April. They always paid and why wouldn’t they, the rents were well over $1,000 under market value.

I’ve since helped them find a new place, I’ve invested thousands of dollars to renovate, stage the property, the listing is live and I’m holding offer till after Victoria Day. Please wish me luck!  With any luck, by the time you listen to this, the house is sold with a closing date ahead of June 25th, the ridiculously, short notice deadline by our anti- landlord federal government.

Asking price is $748,888 for a turnkey, two family house. I’ve already done the heavy lifting: the six month vacancy and renovation, a renovation that would be around $150,000 to complete in today’s market.

https://www.realtor.ca/real-estate/26911061/89-clarendon-avenue-hamilton-balfour

Market rent is around $4,100 plus utilities, the house would be ideal for house hacking: live in one unit, rent out the other to help with the mortgage or a large family or a deep pocket investor.  The location can’t be beat, this is my daughter’s house of course, only an eight minute walk to the major shopping plaza featuring Walmart Supercentre.

Realtor to Uncovering Deals As A Full Time, Well Off Investor With Georges El Masri

On to this week’s show! We have an old friend in Georges El Masri returning to the show, host of Well Off Podcast, Georges used to work at the same Brokerage, the wonderful Rock Star Real Estate Brokerage but like many talented investors do, they transition out of service work into more focus on their own portfolio.

Like I’ve told many new Realtors, investors in my experience make more money and Georges will prove me right on today’s episode.

Georges is going to tell you it hasn’t been all sunshine and rainbows but he’s doing really well thanks to smart investing, quality education, keeping an eye on the numbers and execution.

As is the trend, the above market returns are often in the more complicated projects.  Those who solve problems tend to get rewarded and Georges shares how he uncovers deals, find hidden value add but adding apartments in commercial multifamily and small developments. 

Georges shares about different joint venture structures he’s negotiated so make sure to have a pen and paper ready, this interview is full of nuggets.

To connect or follow Georges:

Email info@welloff.ca

Phone 416.855.4902

Podcast: https://welloffpodcast.ca/

Please enjoy the show!

To Listen:

** Transcript Auto-Generated**
(00:01) it’s a Bittersweet day as I’m selling my daughter’s reses I call it a real estate savings plan this is the truth about real estate investing show for Canadians and the truth is investors are selling way more often than buying that’s what I’m seeing uh in well that’s what I’m hearing from my own clients and I’m hearing from other high level investors and Realtors I’ve uh what I’ve learned in this real estate winter is that my small residential investment properties single
(00:27) family homes that I’ve renovated to be student rentals or leave basement apartments are much more liquid than any other piece of real estate that’s out there my investment properties that I’ve sold three of them so far uh while I’ve optimized them for income in location they each sold in 7 14 or 32 days those are seller Market Days in Market uh those are those are numbers indicative of a seller’s market now compare that to apartment buildings commercial retail offices industrial multif family
(00:57) Cottages condos whatever nothing today’s market has more demand than a single family house in a good neighbor good and safe neighborhood so there should be no question why I’m bringing the same investment model with me to the states uh industrial is hot too uh I’m I’m hearing from experts that vacancy rates are below 5% which is incredibly low historically for the industrial Market uh but again you can’t say the same for any other category of real estate um talk to any talk to any local apartment
(01:27) building owner for example like if you do have cash you can find a good deal out there because there’s not much competition out there uh cc is not in a hurry to refinance renovated apartment buildings which has been a you know C has been has been a Lynch pin to many many apartment building strategies uh for for folks who do like the repositioning which is means you know to turn when you tend to turn over you renovate and raise the rents that whole strategy again it’s heavily reliant on cmhc ensuring the mortgage for refinance
(02:01) uh ver but based on where what I’m hearing on the street is cmhc is focusing more on actually creating Supply so there are supporting developers which is the actual solution to solving a housing crisis unless we you know kind of slow down the immigration anyways that is the truth about real estate investing for Canadians and I’m ha and I’ll happily put my money where my mouth is my name is Rano host of this little podcast in 2016 that is ranked as highest number 81 on iTunes in the business category as
(02:29) mentioned listing I’m listing my daughter’s house that I bought for her back in 2015 just months after she was born sorry that’s 2014 I bought it bought that house back in 2014 I converted it into a student rental for college students those students were rough on the property so when legal basements were available as a strategy I went ahead and renovated the basement legally with permits with the help of Andy train uh again converting that basement into a an apartment two-bedroom apartment with inite laundry uh and rented it up to
(03:01) long-term tenants back in 2017 those tants were pretty good uh and they stayed up until this most recent this past may this April April sorry uh they’ve they always paid and why wouldn’t they their rents were well over $1,000 below Market I say they as in as if they’re one because um grandma lived in the basement the daughter with her four kids lived in the top with her boyfriend uh I’ve since helped them find a new place I’ve invested thousands of probably close getting close to $10,000
(03:32) to renovate in stage the property the listing is now live I’m holding offers until after Victoria Day yeah I’m dating this episode which I don’t mind because we do the we record these episodes all the time uh please wish me luck with any luck by the time you listen to this the house is sold with a closing date ahead of June 25th the ridiculously short notice deadline by our anti- landlord federal government asking price is 74,8 188 for luck and I’ve priced for action again this is a turnkey 2 family house
(04:02) that I’ve renovated with permits to make that basement apartment legal I’ve already done the heavy lifting there’s no you know for anyone getting to this today that’ be they’re looking at a six-month vacancy uh in a due to the renovation and that renovation could be around another 150,000 to complete in today’s market that’s assuming everything can be done on time like permits and whatnot because uh for those who don’t know the city of Hamilton was hacked um by Ransom people they want
(04:29) their whole holding the city uh hostage and for for ransom to get their data back City refused so a whole bunch of stuff is not working at the city uh which could which or things are move to more manual processes which means slow anyways so this is a turnkey one so uh Market rent for this property based on my early research is around somewhere around 4,100 plus utilities a month the house would be ideal for house hacking as live in one unit rent out the other to help pay for the mortgage or for a large family or for a deep pocket
(05:02) investor who can put down a good amount of cash so to make this thing cash flow uh location can’t be meet can’t be beat again I bought this for the purpose for my daughter for her investment so it’s a good one it’s only an8 minute walk from a major mark from a major shopping plaza that features U Walmart Super Center so very convenient location on to this week’s show we have an old friend George Almaz returning to the show he is the host of well-off podcast he is a and but he spends most of his time as a
(05:32) full-time investor George and I used to work at the same brokerage the wonderful Rockstar real estate brokerage so George left I’m still there but like many talented investors do they transition out of service work and into more focus on their own portfolio when I mean transition out of service I mean like for example contractors or drafting people or Realtors or mortgage people it’s not uncommon for them to transition out of those service jobs into more focus on building their own portfolio like I’ve
(06:02) told many new Realtors investors in my experience make more money uh over the long term uh via passive investment and George will prove me right on today’s episode George is going to tell you that it hasn’t been all sunshine and rainbows but he’s doing really well you’ll be able to tell by based on the quality of his deals and so then thanks to Smart investing quality education he’s been through keeping an eye on the numbers and of course execution execution of those renovation projects uh as is the
(06:29) trend above above market returns are often available for to those who can take on more complicated projects those who solve problem problems tend to be rewarded and George shares the the problems that he’s taking on uh he also shares how he uncovers deals uh because that’s incredibly important if you don’t have a good deal you’re GNA have a lot of trouble making good money George shares how he finds deals off Market on Market how he finds hidden value that others Miss which generally includes
(06:59) adding apartment in commercial multi family so commercial multi family uh is is multi family that’s over four or six units anything over that and also he does small development work as well George shares about his different joint venture joint venture structures as he doesn’t have all the money in the world so he is uh partnering with other folks to passively invest in his projects so he’s sharing from his experience what he’s negotiated how they’re structured what the different splits are and how Equity
(07:26) splits are who gets what so make sure to have a pen and paper ready this interview is full of good nuggets to follow George you can email him at [Music] boy congratulations yeah thank you so two BO two boys yeah you’re going to make more money to Fe oh my God those it’s crazy it’s so crazy like diaper cost all these things you don’t notice it but your your costs go up a lot with the two kids but anyway um yeah so we got a a one month old right now he just turned a month old yesterday uh and we
(08:19) have a two and a halfy old and you have couple businesses sizable portfolio growing yeah portfolio is growing um so I’ve been focusing on that the last couple years just growing stabilizing things we’ve had some just like everyone else you know some cash flow issues on a couple properties so we’ve had to address those uh my wife is a realtor so she’s she’s taking over all the the sales on on the real estate side and O over the next I guess couple months she’ll be slowing down a bit taking care of our son so I’m probably
(08:51) going to have to step in a little bit busy busy yep all right y before we’re recording um we’re you know we’re talking about um my I I new new Realtors reach out to me all the time ask me for some advice and I always tell them in my experience investors make more money MH like you you actually have a story to share around that yeah yeah so when I was um this was probably around like 2016 2017 I was working with a a seasoned real estate agent and an investor so he was like a mentor to me um and then he would
(09:27) just tell me when 30 years ago when I kind of started in real estate I was so focused on building my real estate business and just selling and I was killing it I was doing so well but there was this other guy in my office who wasn’t doing as well as me on the real estate sales but he was buying one income property every year and I after a couple years I noticed like he’s really starting to build his wealth and and do so well and that made me realize that I need to start buying real estate and and he started a little bit later in his
(09:56) life but he’s done really well so uh that was kind of something that stuck with me so I kind of did the same thing in 2017 I bought my first property and then 2018 I bought another one and just kind of kept slowly building from there mhm and I remember I remember you’ve been on the show before I remember your your more your early properties were more simpler with the condos was it uh no the first one was a was a single family home kind of used as an illegal duplex in Hamilton uh Century home yeah in downtown like the old ones e i i yeah
(10:28) I don’t like them as much anymore but uh that was the first one and uh yeah I never bought condos always bought freeold got it got it yeah I just sold my 100y old house and I’m glad it’s I just got the quote to just to patch up the chimney $2,700 yeah yeah I can’t believe I still have a chimney in this Modern Age yeah cuz it’s a boil I have a boiler I don’t even know what’s using in the chimney but I need to fix it to to sell that to finish to close the sale so I’m fixing it okay yeah well 2700 is not
(10:58) that bad but you know to to fin to close off the sale I know it’s it’s it’s reasonable to do yeah but uh these These Old House problems I’m done done with it but that’s the thing when you’re when you’ve been investing for a while your criteria changes what you’re looking for changes so uh it makes sense it’s natural right and your criter changed a lot like you mentioned you started with the single family home with the with the non-conforming basement and you’re doing
(11:25) like before we start recording you’re doing some pretty advanced stuff now like you mentioned you’re doing a you have an 11px in Branford and you’re adding two units mhm let’s start there where are these two units going yeah um yeah paint paint us a picture what does an 11 what does this 11 Plex look like is it like a three story walk up like what does it have an elev it’s a two story no elevator yeah um it actually to me it looks like a school like like a a school that was built in the 60s or
(11:52) something some people say it looks like a prison but some schools look like prison yeah uh so it’s all brick um no basement okay um oh really yeah why no basement that’s odd I I don’t know so originally this place was a commercial building I think it was used as like a government office at one point and then it was used as a hall right so it’s it’s gone through multiple Transformations but um I’m not sure why there’s no basement there yeah uh but anyway it’s got five two-bedroom
(12:24) units six one-bedroom units and it had a laundry room so at one point this laundry room it’s like 300 ft maybe oh it’s big yeah like maybe 250 to 300 ft yeah it was used as an illegal suite and then somebody complained cuz they they put a kitchen and a bathroom and everything and they rented it out in the laundry room they got rid of the laundry units but they used the laundry room right um so somebody complained the city came shut it down so they kind of flipped it back to a laundry room right but when I purchased it the owner had
(12:56) plans to build an addition to turn it into a legal unit right so that’s one of the units we actually didn’t want to do the addition because there’s a big hill behind the property and we’d have to build a retaining wall there’s a flat roof we’d have to extend it it was going to be pretty expensive to to build that addition instead we requested to uh a minor variance to use the existing space to build a little Bachelor unit and it was actually approved so we’re we’re going to be saving a lot of money by
(13:23) just using the existing layout where you going to fit the bachelor you had a two 50 300t laundry room where are these two where are you fitting these two units so so it already oh no it’s one unit it’s going to be one unit but it already had like a shower and a toilet and a little bathroom in the corner it had a small kitchen already so what we’re doing we’re going to extend the bathroom a little bit to add a vanity cuz you need it for code we’re going to put in another window and then we’re just going to put like a
(13:53) small just a sink in a stove and then the fridge is going to go kind of it’s going to work out with the addition of the B there’s going to be a little slot for a fridge to go there as well so it’s going to be a really small space but I think there’s going to be good demand for that um for that type of space so we can another option would be to Airbnb it so uh we do have some flexibility there and Branford allows for Airbnb they’re friendly on that well actually I should I should say that I haven’t looked into
(14:18) that uh I would think so because somebody had mentioned to me that it is allowed but I’m not 100% sure actually yeah definitely check yeah the trend is not your friend for yeah I mean I Airbnb is not a priority rather rent it longterm cuz again for financing purposes I’d rather have that stable income yeah it’s true yeah you gave commercial financing on this yeah yeah like apart like apartment building sty well I have a vtb on it yeah so Al so you uh can you share more about uh vendor takeback mortgage uh so when
(14:48) you’re buying the property you negotiated it yeah so we we went to see it initially the owner wanted 2.2 million which was a little overpriced for us but we were able to negotiate and bring the price down to 2 million and then we got 1.3 million as a first mortgage from the seller so the seller provides the mortgage to us it’s registered against the property and that’s what a vtb is right and we negotiated 4 and a half% for two years interest only payments and then it bumps up to 6% for the remaining
(15:23) three years fully open so we can refinance at any time these are good terms yeah this is way better than the private one but we’re seeing for sure yeah 6% open that’s great yeah yeah and then sorry let’s take a step back how did you find the property I had an assistant reach out to a bunch of real estate agents so we compiled the list of agents that um have listed or sold apartment buildings in specific areas we had probably 20 to 30 agents on this list we sent out an email to all of them couple of them responded nothing
(16:00) that was really that all that interesting but uh we did have this one person bring us the Branford opportunity and we just went from there and then did you negotiate the vtb directly with the agent or the owner the seller we negotiated with the agent we had to yeah of course like yeah but the the nice thing was that the seller was there for all the appointments so I got to meet him we would go to like there was a McDonald’s close by so we’d go sit down have a coffee after it was it was a really cool experience it was my first
(16:30) time buying an apartment building but it was nothing like buying a house it was more of let’s build a relationship they want to learn about me what’s my portfolio like am I able to actually close on this building I learn about them um we It was friendly throughout the entire process we just cooperated worked together it was cool fabulous no I asked if you’re able to communicate directly with the seller because well you know most agents have no zero experience with vendor takeback mortgages yeah yeah it’s actually funny
(16:57) for a few months I had a few people ask are you interested in the btb yeah for for my own listings and that we haven’t had btb conversations in regular real estate for over a decade yeah for sure for sure maybe when I first started back in like 2010 when things were more of a balanced Market or you had something more complicated like mixed use yeah where there was no good financing all that sort of stuff but for this you could get traditional financing I could definitely do that I can get traditional financing but the terms were so good uh
(17:30) we actually got a second mortgage as well because we didn’t want to put down you know 700k so we got a a second at 11% uh which topped us up to about roughly 80% loan to value somewhere in that ballpark wow and this was a private from your own network or from my own network it was actually through RSB funds so somebody had a big chunk of money in their rsps they were able to loan it to us as a second wow yeah good for you yeah thanks someone off you met off the podcast or someone just no just someone I’ve known for a long time uh an
(18:06) investor yeah yeah it’s like so there’s no lender fee or anything like that it’s just just there’s no and just straight interest yeah pretty much I had to pay for lawyer fees like on their end as well kind of standard but that’s about it fascinating what what I find is fascinating is cuz well the folks who were in trouble in the news yeah it generally was quite expensive seconds were 12% and then there’s usually like a lender fee as well like 1 2% so it’s much more expensive for all parties
(18:37) involved versus you’re able to do this all internally sort of yeah I was able to avoid a lot of the fees yeah like there’s no fee on the vtb right no lender fee no nothing that’s what one of the really nice things about it right yeah and the point I’m trying to get across is like this is what Pros do yeah versus still retail investors yeah still they they pay more fees their terms usually aren’t as good um and that’s again that’s the point I’m trying to get across is and then at the
(19:07) same time the people that are in a lot of financial trouble right now are are have the have the more expensive mortgages yeah yeah I I’m a very cautious person like I I don’t want to put myself in a position where I’m taking a big big risk so although 11% like to me that’s that was a little uncomfortable cuz that’s the highest I’ve ever paid for a mortgage but when when I factored in all the numbers I ran I ran my numbers it still cash flowed MH because I’m getting 4 and a half% on the
(19:34) first right so the numbers still looked good and I knew I had an exit strategy plus as part of the negotiations we got three vacant units so we were able to to increase the the rent quite a bit so you mentioned you have you had exits and everything the so and you had three bacon units so it’s going to be easier to make the deal work mhm so even if you weren’t able to get the actra like you know like I’m guessing did the deal work still for you without the extra units like I’m trying to expain
(20:04) for the the for the listeners um what conservative investing looks like yeah right like for example when I’m looking at deals I need the deal to work as is M uh without all the other stuff around it like for example I’m trying to buy near manufacturing plants but like we know like you can’t rely on anything nothing’s ever nothing’s for certain that’s why I need the deal to work as is without any changes to it yeah it what what’s what was your experience like well we it was in the agreement so I
(20:34) wasn’t going to close if I didn’t get the vacant units but I also had a hold back so the lawyer um actually suggested this we got I think it was 10 grand for the units that were not going to be delivered vacant so we can use that 10 grand to hire par legal cover uh expenses like for the month for missed rent like that sort of thing 10 grand per unit right so that was yeah that was kind of uh which so one of part of this kind of complic complicated deal or one of the things that complicated the deal a
(21:08) little bit was that one of the tenants was being evicted and she’s from my understanding a professional tenant oh great yeah so uh we we have been kind of using the hold back for that for that one particular unit um but uh yeah I mean that’s the only sort of complication that we’ve experienced yeah you structed this deal quite well I had to because it was my first apartment building right and I and I do have a partner in this as well and I think a lot of people feel this way when you have other people involved like I
(21:40) feel this way for sure I would rather lose money than lose money for other people and um that’s why I’m just very careful very careful when it comes to underwriting this is super interesting because I have literally had a guest on who uh Ben Burger on he shared how the wholesalers he had he had bacon possession in the agreement U but the wholesaler but the tenant didn’t leave before closing yeah so yeah you and I would have done a hold back he didn’t his wholesaler was like oh it’ll be fine
(22:13) it’ll be be fine it’ll be fine wasn’t fine yeah be be cautious people yeah yeah talk to your lawyer or if you really want the place like you got a steal on it then maybe you just have to factor in how much it’s going to cost you to get this tenant out like you know it’s going to take you a year what what’s the cost of missed rent for that time hiring a pair IL legal all that just Factor all that into your underwriting yeah there there’s risks you have to accept yeah depending on all sorts of things like
(22:42) for example if this is a bidding war then you probably have to you can’t be as tough on your negotiation but yeah that’s pretty cool yeah and then and then tell me about uh tell me what the plan is now for the property so so you have approval to add the two new units so we we got a minor variance approval for the additional two units uh one of them was for the size of the unit actually no we just needed the one minor variant and we are working with Ken beac andem to submit plans to um put a second story on a storage unit so that’s the
(23:16) 13th unit on the opposite side of the building opposite of the laundry room there’s a brick storage room that was attached to the building and we’re we’re topping it up with a second story to build like a little one-bedroom Loft cool and how big is that uh it’s going to be probably around the same like 300 square feet small yeah it’s a micro unit yeah and then how much is it going to cost you and what’s kind of renting you get uh I I think like preliminary numbers it was going to cost about 150 roughly to
(23:48) build that 13th unit with everything and um we’re project or projecting that we’re going to get about 1,500 in rent for it roughly oh so that’s a good ratio of rent to uh to what your investment mhm plus utilities yeah so again it’s still early but we are looking to put a separate hydrometer there it’s going to have electric baseboard heaters and then water where we are looking to separate the water meters eventually but for the time being we’re covering water super cool and then tell me about the
(24:26) financing like tell me about the exit so we were talking about this a little bit earlier it the plan eventually is to take it to a cmhc loan right and they changed their policies late last year 2023 you can no longer refinance private funds directly into a sehc loan so we’re going to have to at least at this time take it to a conventional loan for two years and then refinance it it has to be an approved lender M so if you go on the CC website they have a list of approved lenders as long as your mortgage is with
(25:01) one of those then they’ll allow you to refinance the property and you I would again discussing before we started recording this is kind of dumb yeah you created Supply yeah right you this project is something the government should be supporting like you created Supply you didn’t just like remove affordable housing from the market like like most bur investor Department building people are doing you you literally added almost 20% Supply yeah to your building yeah well I I think from my understanding I’m
(25:30) not 100% sure on this but I think CC was getting so many applications over the last couple years that they wanted to slow things down a little bit and this was their way of doing that right and it’s working because tons of people that are in the apartment building space have VBS or private financing or Bridge loans or whatever it is well yeah CMC has enabled the financialization of apartment buildings yeah yeah exactly and I think when people get when people get a better understanding of that I I understand why the see you see has a
(25:59) slow down yeah because people like you know the media and and politicians are not happy about this yeah the removal of affordable hosing from from apartment buildings markets sure sure yeah I’m hoping they would prioritize you again because you’re doing what is you’re part of the solution you’re creating housing M I’m hoping that’s one of the threshold for you to get ahead of other people that that would be interesting actually like if you are adding units if if they would bump you up uh or or kind of wave that um no
(26:30) private financing Clause that they have but we’ll see things might change over the next couple years so wait private financing if you self Finance the whole thing would that still be no if it’s if there’s no mortgage if it’s free and clear then you should be okay but again so this is one thing that but this is one thing that I’ve heard some people are saying that they’ll pay off the the private just temporarily and then take it to cmhc but they’re starting to crack down on that right they’re they’re
(26:59) looking up the history to see if there were any loans registered yeah who just has like that kind of money lying around though well they they borrow it like PE notes or whatever and and paid off oh my God prary notes to WIP about the mortgage for either that or they register against another property if they have a bunch of equity in another building or something yeah yeah yeah got it interesting yeah cuz yeah that’s that’s capital for you it’ll find a way yeah yeah very so what so do you know do
(27:30) you have your approval lender in mind for this project I’m not even looking at that right now because the vtb we have good terms right now so we’re just doing we’re flipping a couple of the units we’re adding those two additional units you’re not ready for refi anyways not not ready yet yeah and yeah because you got into this project before you knew about this policy change well it was right around the time almost exactly when we closed which was we closed in September 2023 mhm and that’s when the policy had
(27:59) changed right around then mhm yeah fascinating but even even though even if it had changed 6 months prior I probably still would have done the same thing because we’ve got good terms right so okay yeah and then do you uh you’re underwriting so what are you projecting for your after renovation value so there’s um there’s a cagec calculator that I just found out about where you can kind of see how much you can borrow the the the loan amount that you’d be able to borrow or the value of the building and I punched in just
(28:33) yesterday actually all the projected numbers projected rents and expenses and all that and I think the loan amount that I saw was about 3 million it was somewhere between 2.9 and 3 million right right so we bought it for two once we complete these extra units turn over a couple more units then we’re going to be at roughly $3 million and you’re happy with that yeah that’s a big lift right it’s a big it’s a 50% increase right so and um you mentioned you have an you have you have a partner on this as well
(29:05) yeah is that Equity partner is this your wife who is this well my wife’s my partner on everything so I don’t count her as a an equity partner technically although she is but we have another partner so um yeah it’s an equity partner I don’t do I don’t really like to over leverage and borrow too much I know some cases it works but for me I’d rather raise equity and be on the safe side right my point my point about leverage uh borrowing all those sorts of things is like it’s double-edged sword
(29:40) yeah your your upside could be higher but also you have a your your window success is shrinking yeah right and again you know there’s lots of History like anyone who’s gone bankrupt is because they couldn’t service their debt yeah so you know be cautious with the use of thatt there’s a time and and place for that like if you’re buying your first property and you don’t have that much to lose you’re willing to take more risks right well say you have no debt too yeah right so you live in your
(30:09) parents house still exactly you have no rent or mortgage payments or minimum you can take some more risk but if you’ve been working for a couple years to build a stable portfolio and you’ve worked hard and sacrificed a lot it doesn’t make as much sense for you to take on that extra risk cuz the reward isn’t going to be as great mhm yeah yeah cuz literally I’ve had guest of this show who’ve had their previous games wiped out over the last two years mhm like all that all that Blood Sweat and Tears yeah
(30:37) to have nothing to show for it yeah exactly yeah but again like if they survive I say I say on the show if you can survive these times you’ll likely be you’ll be laughing 10 years from now yeah right but again right now it’s about survival for some yep so yeah so you mentioned you don’t like too much debt and it’s interesting because we’ll get to your other projects because you have several different your your projects are quite varied yeah and then you were sharing before we’re recording
(31:04) that your structure of your Partnerships is different across deals mhm cuz here you found a deal here you’re there’s quite a bit of lifting heavy lifting for you to do yeah even though you’re not like swinging hammers I know but yeah how how did you structure the deal on this one with your Equity partner yeah well so we actually um opened a new Corp and we were we’re 5050 on the on the equity side but the amount of capital that we’ve each invested is a little bit different again because I am
(31:37) doing so much of the heavy lifting yeah and um yeah this was this was the case here and this was my my first apartment building as I mentioned same for the investor that’s working with us as well so we just we both wanted to kind of experience what it’s like to to own an apartment building and we just struck Ed it this way for now but moving forward obviously things might change right on on other deals so yeah and this partner is is the equity partner they’re passive they are passive yeah yeah and then this
(32:10) is someone you already knew this is someone I know yeah um known him for a couple years um it’s always the case for us like I don’t really meet anyone on Instagram and then do a deal with them like that doesn’t I don’t think that really happens too often I think people want to get to know a little bit yeah I’m sure there’s some of that going on I think some people kind of specialize in that but for the most part the people that I know they build relationships with their Partners right and it takes
(32:39) time to get to know them they get to know you um that’s kind of more my style right right yeah this is someone you from like work or from church or something no it’s uh it’s actually another investor uh we’re part of like some of the same investment groups yeah yeah so networking works it works for sure yeah very cool you want to share to which group yeah I can share it one of the groups that I often attend is Durham Mari oh yeah Quinton yeah Quinn’s awesome he’s actually the the reason
(33:10) that I bought this building in the first place I I’ve consulted with him on the numbers like he talked me out of walking away because I was like oh my God this is you know bigger numbers than I thought that everything the refinance looks this way what what do you think and he was like no the numbers look pretty good I so it’s always good to consult with your mentors and and even pay a little bit just to get the the right advice right right yeah can I were you in his training courses or you student of his I yeah first of all I was
(33:39) a coaching client of his this was a couple years ago so he got he got me from single family homes to a fiveplex and a fourplex and like you know bigger properties at the time and then I’ve taken his apartment building investing classes as well God I’ve taken all of his classes his JV classes um vtb classes is everything yeah do uh I’ll I’ll post the link to his website in the show notes uh but yeah anyone can look up germ REI Quinton dusza yeah he’s been on the show I think three times yep yeah hopefully
(34:13) it’s not a stranger to anyone and what what I like about Quinton is his everything he offers is quite affordable it is yeah it’s amazing like his some of these courses that I’ve taken were like 500 bucks yeah which I’ve gotten so much value like just look at this one deal alone apartment so I took his apartment building class I got a vtb I took his vtb class and I have a JV partner I took his JV class it literally all came together in one deal and just that the one deal alone pays for everything I’ve
(34:44) I paid to to take these courses I love quality education yeah I love it more when it’s when the price is reasonable yeah yeah cuz there’s lots of stuff out there that’s really expensive yeah and yeah they don’t have much track record which is nuts even worse when some of them they’re producing like students who go bankrupt yeah yeah yeah i’ I’ve heard of these things there’s a lot of people offering courses I don’t know what’s good and what’s not I’m not sure I I
(35:11) don’t go out there and explore all sorts of courses but uh I just know the ones that I like and I kind of stick to them right well because you’re not a you’re not an active realtor anymore like I still talk to clients and when they tell me like the stuff that are taught I’m like yeah just the same conversation I have with you like too much debt your your probability of success shrinks yeah right like you know if your interest payments are too much and you can’t support it yeah what what choice do you
(35:38) have yeah that’s it’s a scary place to be in yeah for many super cool all right now can we move on to your your four Town hoses sure yeah tell me about the four Town hoses Yep they’re in Welland um picked them up in March 2022 right before the rates skyrocketed before the market it dipped roughly 30% are you okay with the price you paid uh yeah so 375 per per unit it was off Market sounds pretty cheap it’s cheap they’re they’re older so they’re built in the 1920s um the owner wow I don’t know if
(36:15) I’ve seen towns that old before yeah yeah it’s older for sure it’s it’s a pretty unique place because there aren’t that many town homes in Wellen that are like that there’s condo towns but these ones are Freehold um so yeah I got a vtb on that as well actually and I got 1% interest only for 12 months myage rates are going up my mortgage payment was $226 a month per property um so yeah I was trying to negotiate a longer term they refused but you know whatever I thought that’s an amazing amazing term I’ll take it
(36:59) they had four um tenants in the property and I was pretty confident that I’d be able to work with a paral to provide an incentive to the tenants for them to move on unfortunately three of the four refused and we had to figure it out from there right so we thought we’re going to have to probably duplex these we’re going to file an n13 for renovations all right yep we got um there were some delays and and things and the pargal that I worked with kind of screwed up a little bit on a few things but at the
(37:38) end of the day we we did get to our n13 hearing and they sided with us because we have our permits we have everything ready to go mhm and we were able to provide an incentive anyway to the tenants and now we’re in the process of of actually converting them so just to kind of put things in perspective once our uh 12 months was over we had to scramble to get financing for these and it was hard because you know we have couple mortgages it’s not that easy to get mortgages anymore rates were going up we were getting about a th a month on
(38:11) some of these properties in rent and the mortgage payment was two grand a month so we’re in that situation where it’s like man we’re we’re in some trouble if we don’t do something about this um so that’s yeah the the the process of converting these is going to increase our rent to about 2600 a month up and down so we’re going to be in a more comfortable situation and and uh your duplexing strategy is different like most people duplex into the basement MH here you’re doing main
(38:45) floor basement is one unit yeah and then second floor is another unit yeah yeah can you can you explain the the the the investment hypothesis to get you to that strategy sure so if you remember I mentioned that first property I bought in Hamilton the single family that was used as an illegal duplex so it had a main floor unit and an upper unit okay so it made me think because I had brought Ken Beacon Dam at the time through and he told me this is actually you can do this but you have to make some adjustments to to make it a legal
(39:17) two unit so I thought I can probably do the same thing with these well in town homes right oh so experience helped yeah and guidance yeah yeah expert advice guidance yeah if I were to do it in the basement an extra unit you’d have to um like Jackhammer the concrete run all your new pipes frame drywall all this stuff right so it was going to be more costly than just putting a hallway on the main floor putting separating doors and doing it that way so ended up being cheaper to to yeah I like cheaper plus the way we’ve set it up if we’re allowed
(39:56) to put a third unit in in the future we’ve we’ve got a layout which would allow us to put an extra like extend the hallway and bring an extra door down to the basement so you can have three units within this one space right right yeah so we’re we just found it made more sense for us to do that you mentioned like Jack har in the basement is it not enough ceiling height is that why no I mean I mean for your drains like you got a rough in plumbing right right CU you’re no Plumbing in the basement so you just rough in it’s an
(40:23) unfinished basement yeah but do you have the ceiling height or no we have from my understanding standing so I worked with Andy Tran on this who was awesome by the way anyone listening like both Andy Tran and Ken Beacon Dam are great for these kinds of things yeah I don’t know how many times yeah um we have I think just an up sealing height so I think what Andy was saying like if we put thin vinyl flooring we should be good um so yeah flooring put down some area rugs yeah so the floors are warmer yeah exactly so I
(40:54) think that’s it that’s that’s what we would do fantastic and what’s the budget for the Rena the the renovation itself we got quoted 50,000 plus hsd pretty much roughly not bad for duplex conversion but we had to work to bring that down like I had to scramble and just change everything because again like when you work with a designer they’re they’re often they have someone on their team that’s doing these layouts for you and they’re trying to come up with something functional and
(41:27) beautiful maximiz the and as an inv that’s not always your priority in this case my priority was doing this for like as little as possible and having a legal unit right so for example they wanted because the main floor has a powder room right so we needed to put a shower in there so they wanted to uh rip out the closet next to the powder room there was a a back door that led to the backyard they wanted to reposition that so move it from there put it in the living room repos like reframe the deck and do all this stuff
(42:01) right I’m like there’s no way we’re not I’m not for a rich home owner yeah like exactly if if this is your home and you want that’s fine so what we did was we we ripped out the vanity instead we put a shower where the vanity was and we put like this really thin floating vanity up against the wall between the shower and the toilet right so we we didn’t rip change any of the framing we just kept it exactly as it was and that which really brings the budget down yeah and the time to execute exactly that’s one
(42:32) example another one was upstairs the engineer suggested we rip out one of the walls we had to like um which is always expensive yeah yeah we had to um support the CU it was a loadbearing wall so we had to support it and more money yeah tons of money more money time tons of money so instead we literally just cut out one of the non-load bearing bearing walls and we opened up the space that way instead like how much did we save by doing that you create a doorway or pass through or just a window um it was it’s
(43:04) a large opening yeah it’s probably maybe 8 ft wide but it’s a non-load bearing wall and it was the wall between there was a bedroom and like kind of a small den and that we open it to create a kitchen and living room yeah it’s funny when people just make designs with no budget no budget in mine yeah but but again if you’re in experienced and it’s your first time working with a designer you might you have no clue like you might just be like oh okay this is what you suggest let’s do it you’re the
(43:34) expert yeah yeah but also it takes time obviously to to redesign exactly but I think for anyone listening you can push back sometimes and try to find more creative ways to to lower your budget because I don’t want to spend I could have easily spent 150,000 on each of these so a total of 600,000 across instead we’re at let’s say 70,000 with carrying cost per unit it’s a significant amount it’s like half the budget and just to work just to just to let investors listeners know what you’re
(44:04) doing is not that common versus when we when we do basement Suites it’s very cookie cutter this is how you fit in two bedrooms and that’s how you’re going to maximize your rent yeah exactly it’s like here’s here’s three layouts that we do all the time pick one yeah yeah versus yours was very custom job yeah for sure and you have to work with everyone the the contractor has to be on board like everybody got to work together to to make this happen and where’d you find this designer the well it’s Andy Andy Trent
(44:36) his his crew was the ones who they were the ones doing all the layouts for me they should know they should know that we’re on a well that’s it was my first time working with Andy right so I think once I did one he understood what my priorities were yeah yeah and he automatically adjusted the rest right and and he was so cool about it like he he didn’t give me a hard time because I I was probably not I was probably a little annoying you know just constantly making adjustments but he was really good and he he never got frustrated or
(45:06) anything which I appreciated it’d be nice if there’s like a internet widget and just like slide down your budget and then just automatically redesigns to fit your budget yeah yeah yeah that would be cool like a chat GPT type of thing lay this out for me for the lowest price possible well even just for us like we’re like what’s the minimum Mone need to put down to make this thing Break Even yeah be like that down all right do it reduce the budget by 60% all right I can still make money do it exactly
(45:35) exactly and where are you with these projects now so we did we completed one we’re actually hopefully closing on a refi today so that’s the nice thing these all have separate titles so we can refinance them individually or get a blanket mortgage which again we’re going to go to cmhc and get a mortgage across all of them eventually but uh yeah we’re refinancing the one today the second one we’re working on is about 70% complete same thing we’ll refinance that and then the other two the tenants are
(46:04) leaving hopefully end of this month in April fascinating you have four properties on separate titles but you bought them together with separate corpse so four cor yeah four Corps two Corps yeah so we we offset like the first one is under one Corp and the third one’s under that same cor right so they’re not adjacent so titles don’t merge yeah yeah yeah and hopefully listeners caught that cuz that’s a very expensive mistake otherwise yeah yeah so just to clarify if you buy two side by side properties two adjacent properties
(46:35) two adjacent properties sorry uh under the same either your personal name or under the same Corporation they will merge on closing you have disaster you’ve lost a lot of value yeah which is just a paper thing exactly you you can I think sever them later but there’s no to pay for exactly survey done go to the city Point yeah there’s no point of doing that so um yeah just buy either like put your name and then your spouse’s name on the other one or two corporations yeah yeah I think the only time you probably do that is if you’re
(47:05) going to tear everything down and build one house I’ve heard I’ve heard of people doing it on purpose for that exact reason to develop so if they’re buying multiple properties they want title to merge so it’s easier to develop yeah like you’re Drake buying in battle path I think I believe he bought a couple Lots so he doesn’t care if they merge because he’s going to tear them all down and build one super hose exactly we’re not Drake yeah yeah so actually speaking of uh severing it’s
(47:30) something that I’m actually exploring on another property we have before we go there I want to finish off these town houses you mentioned that you can bring this to cmhc as aplex even though they’re the separate title separate you have two owners y they’ll still treat it as one entity from my understanding they will I I did consult with a mortgage broker specifically for this situation and because they’re side by side as long as I’m the owner of the corporations then there shouldn’t be any issues any
(47:57) percent percentage ownership you have to have or just just that you are no I’m not sure if there’s um I’m not sure if I have to have a specific percentage but yeah I mean in this case it’s 50% so I hope that’s enough super cool yeah I was just thinking because yeah of another American lender thing example but anyways and then and then explain to me the benefit of going through CC for this now will be an aplex yeah um so through CC you can get 40 to 50 Year Ms instead of your traditional like a conventional
(48:31) lender will give you 25 on the commercial side right oh sorry this is spelled it out 40 to 50 year amortization and your payments are spread over 40 to 50 years which is I don’t believe anyone else can offer you that kind of amortization uh some be lenders like we got a be lender on actually the the one of the Town Homes they’re doing a 35 year M for us oh okay yeah can can you shout them out or um yeah it’s Haven I haven’t even heard of them yeah I mean it’s a be lender so probably not as many
(49:02) people know about them I’m not sure though if you can go directly to Haven tree I think you would have to do it through a broker yeah super cool you want to shout out your broker yeah I work with StreetWise oh Delia team Delia’s team yeah yeah Dalia another friend of the show I just saw her this weekend that’s super cool that’s why it’s like the whole old saying it’s not what you know it’s who you know exactly like all these I didn’t know about this yeah but I know D you y so that that’s
(49:33) been amazing cuz uh we got pretty decent terms on this through a be lender I think our rat’s like 7.15 which isn’t I know it’s sounds high but compare because we can’t get an A- lender right now just number of mortgages we have so a variable is like 6.9 right now 6.95 on CC exactly so you get 7.
(49:55) 15 but you get the extra five years yeah so and I’m guessing how were they for qualifying uh like did you have to give them much yeah yeah of course you have to give them everything everything yeah you got to give it was like getting an A lender for sure right for sure okay so there they still required a lot of diligence because my experience with Like Home Trust for example is they don’t ask for nearly as much as a SK Bank no in this case they ask for a lot but I was happy to do it yeah is sorry in 7.
(50:23) 15 interest rate was that fixed or variable it’s a one-year fix that’s really good yeah damn and then but you can renew yeah I I’m pretty sure and and if the rates come down next year like it might be better right so who knows that’s a really good rate yeah for one year is it open like no it’s it’s not open no I don’t think it’s open but it’s one year so I don’t care fixed yeah it’s only a year yeah this is great damn that’s that’s that’s cheap that’s cheaper than most yeah we have variables
(51:02) that are more expensive than that I think my helck is more than this oh for sure yeah cuz Prime is 7.2 right yeah yeah okay hopefully the listener picked that up H tree show it Street wise 7.1% on a onee fixed 35 year am obviously every sit everybody’s situation is different I don’t know if everyone would get that same rate but I know but this is a flip project yeah like that’s it’s usually the you guys usually pay the most no it’s not a flip like we’re keeping it we’re holding it uh yes I know it’s a repositioning
(51:36) right so it’s I think the finance is usually similar for a bur or flip I guess so yeah I mean there’s yeah I’m not sure I’m not too sure super cool okay so uh yeah four sorry I cut you off 40e 50-year amortization BC MHC this is the m select program M select oh no sorry the 50 year is mli select the 40 year you can get with like a standard cmhc loan oh so that’s still favorable yeah so that’s what we’re getting on the fiveplex that we’re refinancing now which we haven’t talked about yet but we are time do we
(52:14) have I know my nerdy listeners will appreciate keep we we don’t have to get into it it’s fine but yeah I’m sure my nerdy listeners would like to get to it and appreciate you going into this level of detail about all this sort of stuff and you know I love it when guests know this a little detail on their deals yeah is you be surprised if they don’t have detail on their own deals yeah yeah and that’s us a sign of someone who you know who’s analytical and a good operator yeah there’s there’s a lot to remember
(52:41) there’s a lot going on all at once but I try to remember the numbers as much as possible uh so standard mortgage 40-year amortization with CM cmhc what kind of terms are you expecting so on that one the way the way it works for one listening that doesn’t really understand the the rate is based on the 5year CMB Canadian mortgage Bond B yeah so um I think right now last I checked it was at about 3.
(53:14) 7 right and then the lender will add basis points as they’re spread so in this case they’re adding 200 basis points okay so we’re going to be at roughly 5.7% on the on the loan the interest which again like that’s way better than what you’d be getting cuz I had a oneye on that property with deard and my rate was like 7.
(53:37) 89 25 year M all right so my my payments are going to come down substantially my interest rate is going to be much lower it’s way better to go to sehc that’s why it’s they’re getting so many applications right yeah which is always concern because cc is the division of government yeah government’s not supposed to get supposed to take everything away from Private Industry well the SEI is is an an insurer so they’re not the lender the lender and there insurers out there yeah yeah yeah so it’s uh I mean I’m happy to do it
(54:05) because it makes sense for me but I I understand yeah there it would be nice if there were more options like that instead of just the one kind of monopolizing the market yeah because they offer the best rates in their government yeah exactly they have different cost basis than Private Industry but again like what you’re doing here with these tow houses for example is you’re doing what the government wants yeah well your benefiting Society you’ve doubled the housing MH right with your own with private funds yeah can we can we I want
(54:35) to stay on this example with the Ford Townes um just to give an example of a different uh joint venture structure can you share on that how the how this joint vure structure works so we have four Partners um actually kind of Interest interesting thing about this is initially we had bought one of them ourselves with no partner and then we added partner on later so we s they’re all Equity Partners um yeah we’re 50/50 on all of them 50-50 ownership 5050 ownership yeah yeah I mean every Situation’s a
(55:11) little different you got to also talk to the people and see what their Situation’s like at the time because we we just said we’re going to do duplex Renovations uh we need 70k to do these not everyone’s in the same position so we’ve had to kind of adjust based on the person’s needs and so for the new investor that’s not easy to do because for say a brand new investor imagine like you 10 years ago like trying to negotiate vure deals yeah on this it’s not a vanilla project no it’s hardly
(55:45) turn key yeah it’s not 100-year old houses in in well and yeah like I’ve never seen these I can’t even recall yeah no there’s some yeah there’s some of these yeah there’s some on like Bay Street and Hamilton but yeah okay so I can’t I I can’t I do have context of what these things look like um they’re not run down like some of the ones in Hamilton that you see right like the brick is all rotted and yeah you know the foundations thousands and thousands in Brick repointing yeah yeah yeah no
(56:14) it’s not like that first of all these have vinyl sighting so you can’t really tell by looking at it that it’s 100 years old um but uh yeah I mean it’s not like you said not just a simple Buy and Hold and do nothing to it right and then uh what did your partners have to bring Capital credit no in this case they they brought Capital all of them we had different exit strategies when we when we initially purchased and I think one of them was to get a commercial across all of them so that’s why we thought it would make sense for
(56:51) us to have our corporations on title um but yeah does make things a little more complicated because now we have to personally qualify for all of these mortgages while we’re repositioning the assets and that’s that’s actually because investing is not a straight line yeah it doesn’t always it doesn’t always go to plan but this is going to likely work out quite well like sorry sorry we haven’t even asked like what is your after repair value we just had one appraised a completed the completed one
(57:22) at 505 so let’s paint let’s start over so it’s 375 to buy yep what was your renovation 70 including carrying costs and that’s important cuz carrying costs are a cost because it was 50 for the Renault plus hsd and then the rest of that was carrying costs so that’s a pretty good uplift yep for appraisal 505 and you’re happy with the appraisal I’m happy with it for sure actually I could have gotten a larger uh mortgage on the refi but I kept it a little bit lower because again I’m I am
(58:03) conservative I don’t want to borrow too much and and be in a bad spot so I wanted to make sure it cash flowed after we refi right so you you do your own lead generation to find these prop these deals yeah so even if you had all the capital you needed how many deals do you think you could turn out a year I think finding deals is one of my strength right I can I can find a lot of deals but then um I just I need more Capital to do it important trying to get get across is um you know like there’s like there’s
(58:41) Northern Ontario investors they were just buying anything in a market where there were no buyers yeah how else do you acquire 200 houses in a market with population of 50,000 yeah right it’s probably it was probably a complete sub buyers market right but these deals that you’re unearthing they I think a lot of people would want them yeah I think so um and we’re making these deals right we’re like we’re creating these opportunities we’re buying things that because for example that building that
(59:11) we bought I think it was had been on the market a year before right the 11 the 11 unit and no one really seemed to want it it it just expired right so and then that’s not how I came across that opportunity it wasn’t an expired listing type of thing but um yeah like we I I even mentioned it because I was working with a real estate agent he was sending me opportunities and he’s like oh I heard you you got something I told him about the property he’s like yeah I went to see that last year I don’t think that was a good deal
(59:40) and then I told him about the terms that I negotiate he’s like oh oh we weren’t getting those terms last year so yeah yeah because things have changed like the market changed terms changed yeah yeah vacant units VBS like all these things make a big difference yeah yeah the deal got better the deal got stale yeah exactly yeah and people need to remember that you know people’s people’s situations change something obviously changed for the seller to get more motivated yeah the market didn’t help
(1:00:07) either yeah because I I think the Market’s pretty soft right now for for apartment buildings um I I don’t know about that because I don’t you don’t see them come up too often right a good deal on an apartment building you don’t you don’t see it go on the MLS often I think they’re often traded off market and there’s always demand for for those types of properties from what I’ve seen yeah fascinating it’s just the rates so high that it makes things more difficult the DCR the debt coverage ratio is one
(1:00:33) of the main factors of of the loan right and um yeah that’s all impacted by the the rate so you’re not even seeing you’re not even seeing increased deal flow more opportunity well because we’ve probably peaked in rates yeah I’m not really looking for opportunities right now cuz I have these different projects going on like my focus is 100% on stabilizing portfolio right yeah I think it’s a that’s a thank you for sharing I think it’s a great share is that you know take care of what you got yeah before you
(1:01:06) move on yeah and apologies for picking on the the investors up north in Ontario but they have like I believe uh 200 of their 600 units are sitting vacant mhm I don’t know too much about that whole situation but how would you feel if a third of your portfolio was sitting vacant you’d probably be very stressed out I can imagine units yeah yeah my point is someone someone was not watching the operation yeah not nearly as closely as you’re watching yours well mine is a much smaller operation it’s a
(1:01:36) lot easier to keep track of you know a couple units under Renovations than having 600 units how much of your portfolio is is vacant right now uh not much that’s my point yeah not much vacancy makes me sick yeah because it’s an expensive yeah I don’t like expenses I like cash flow yeah I don’t like things coming out of my pocket for sure for sure sometimes you need to you need to have vacancies to address certain issues uh certain repairs that sort of thing but yeah but this is a this is part of the plan yeah structural
(1:02:13) vacancy is never part of the plan yeah as in like no renovations going on don’t know when you’re going to have permits don’t have the money to renovate yeah no that’s a different situation altogether right yeah that’d be that makes me sick yeah fast all right cool and then you have another project on the go how many open projects do you have right now that’s that’s in the uh just just those uh town homes in the building but um the the the last thing I was going to say is we have this fourplex in St Catherine’s
(1:02:45) that I think at one point was two semi detached homes so it’s very early but we are looking at seeing if we can sever again maybe titles merged at one point cuz we were talking about that if we can sever this fourplex into two duplexes then we’d have a pretty significant gain in value just from doing that one thing alone right so just something to consider for anyone listening that has that type of property how’ you find the deal that one was on off market like I did a little flyer campaign um I I it was a very targeted
(1:03:16) campaign and this was a few years ago so um yeah how did you get the flyer in the hands of the owner did they live there uh no but we there is different ways we had vas try to look things up we would drive to different properties sometimes and like leave letters in the mailbox for the owner there’s just all sorts of different things that we did at the time yeah so you’re you’re you’re on the you’re on the round yeah you’re on the road yeah yeah this isn’t just this isn’t passive easy like you’re working
(1:03:48) yeah I don’t do that anymore now because I’m not targeting those types of properties but I I did that a lot before and it worked I was able to pick up good properties doing that right yeah and then we mentioned last time you on the show like this is not what you’re doing for realtor as part of your realtor business you’re doing this for your own portfolio for us yeah right because the amount of investment you’re making into acquisition is just significant yeah I mean I it just to me doesn’t make as
(1:04:12) much sense to go do all this work and get a $155,000 paycheck for it right uh so I’d rather pick them up and hold them long term yeah because that’s where the wealth is yeah exactly not the transaction yeah you need you need the transactions like as Realtors if if that’s your main thing you need the cash flow for most people but uh yeah longterm is the way to go yeah so my point when I I made earlier when when new Realtors ask me for advice so to give context pretty much always they have a job already so they
(1:04:48) want to do realt terms of parttime so if you already have a job you have income good income already I’d focus on being an investor not a realer yeah right because that because the the investor long term will make you more money yeah and there’s a good chance whatever you’re doing for a living is your highest and best use MH because you’re likely good at it you went to school for it right all sorts of things yeah versus becoming a realtor like it’s not easy yeah maybe they they want to do that to
(1:05:14) be around people more often and to learn from them and that sort of thing but there’s other ways to do that yeah there’s other ways to do it yeah cool and how did you identify the opportunity to did the fourplex work as itself the St St Catherine’s fourplex work work as a standalone deal yeah or just in your diligence you found the sever opportunity well we’ve owned this for a couple years but I just just thought of this recently I thought let me look into it so um so you’re already own it so yes listeners do look over your
(1:05:46) portfolio and see if there’s ways to extract more value yeah I mean there’s there’s always ways right and if if we can increase the value of this building by 100 Grand just by severing it it might cost us I don’t know 5 10 grand to do that then it makes sense um so we ordered a Freedom of Information Form directly from the city and that will help us determine if you know there was separate servicing for um for water Hydro like all these things as much information as we can compile we’ll send
(1:06:13) that over to the lawyer and and go from there fascinating yeah you stick your chat TBT first before it send to the lawyer I read this PDF I’m joking I’m joking and and you think you can do it I don’t know I know that there’s separate water servicing for each side oh good yeah um there’s separate hydrometers for each side but I’m not sure I don’t know if it was ever used as two semi detached properties well that’s a lawyer’s job interesting this will be fascinating for the listeners benefit like you you
(1:06:51) essentially bought wholesale and then if you’re able to sever you’re essentially going to go detail yeah like each indiv just like condos are more all condos are more expensive per unit a condo is more expensive than buying a whole apartment building yeah which is why apartment building owners generally want to condominium ISE them yeah but then cities don’t want it because it removes rental housing right but you know so many cities don’t like landlords so maybe like hey I I’ll I’ll stop being a
(1:07:17) landlord if you let me do this yeah yeah here you go we don’t like tenants either yeah which often feels the way as being a landlord yeah yeah but yeah what is how’s your experience with all these different cities you talked about Wellen talked about Branford talk about St Catherine are they all been are they all been friendly so far every city like Hamilton as well they’ve all been really good well and we had to get minor variances for parking that went well um the inspectors have been great no issues with them St
(1:07:47) Catherine’s I haven’t done any like conversions or anything there so I’m not 100% sure um Hamilton was great um yeah it’s it’s all been good no no no neighbor showed up for your minor variances or anything uh yeah the tenants the tenants 100% And they were smart too they came up with some good reasons um I was scared but Andy Tran was a professional he was awesome he just handled it and yeah I don’t know it’s the tow houses yeah the town houses cuz uh obviously I was getting M13 so I
(1:08:21) wanted to remove the tenants they showed up gave their reasons why the parking shouldn’t we shouldn’t be granted a minor variance for parking and he came up with his reasons and it worked out yeah my my right to park on the driveway is greater than someone else having housing no it was actually clever it was so we have 10um parking which is allowed and and well in but one of the TM is in line yeah so one car in front of the other one car in front of the other and one of the parking spaces was kind of
(1:08:52) like adjacent to the house to the house right so when you’d open your door if you open too far you might knock the the house so anyway she was saying that you know the parking’s super tight if there ever was a fire or something and you had to get out that the car might block your path and you wouldn’t be able to squeeze out of there and whatnot so it was it was clever and then the the the tribunal is it I think it was the council adjustments yeah Committee of adjustments yeah and they didn’t buy it
(1:09:23) no because it wasn’t an an emergency exit right like you’re not going to exit from the back of the house go around you’re just going to exit from the front or I think Andy was saying that if you can just exit from the back then you’re going to be outside anyway so you’re going to be safe um and yeah and then the the one of the committee of adjustments members said why don’t you put parking in the backyard instead and then Andy’s argument was well you know as Canadians we like to enjoy our yards
(1:09:51) in the summertime and this is going to be taking away our recreational space so they they that and everything everything he said made sense yeah well it cost you a lot it would cost you more money exactly I don’t want to do backyard fascinating and then um we’re georia we’re running out of time yeah no worries uh you have a podcast I’ve heard it yeah I’ve been on it the well-off podcast Y what can you what else can you tell me about your podcast uh yeah we just always have new guests mostly
(1:10:21) Canadians that are investing I’ve had actually people that are investing in the US as well so I’ll have you talk about that soon um yeah I’ve been doing it for a while but um yeah I would love to have you guys check that out too and um it’s always like as podcast hosts we appreciate you guys sharing this with friends and family so if you guys like this one make sure to share it let people know so that uh orone can get more listeners and and uh yeah leave us some reviews yeah we’re not the we’re
(1:10:46) not the fancy types either we just have good Investments yeah George thanks for much for doing this thanks for being so transparent your numbers and Deals sure happy to do that yeah because again like I said a lot of people don’t know the details of their own deals yeah and I appreciate that you’re that you’re trying you’re keeping a close eye on your portfolio to make sure it’s optimized and yeah you know eliminate vacancy yeah yeah that’s a big one and just making sure that people’s money is safe when they’re
(1:11:14) investing with us right that’s the biggest thing and when I say us I mean me and my wife but yeah very cool thanks again for doing this yeah no problem thank you for having me on thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.
(1:11:51) com below and I do the best to answer each of those comments and questions myself again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class that’s at investor training.com

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BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

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The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

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Multifamily Development In Toronto With Ming Lim

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We just returned from Cherry and I’s post tax season workation where I get my wife back, she gets a well deserved vacation as tax season is the toughest part of the year for Cherry and I, AND we get to tour awesome places for investment like Tennessee, Atlanta and Savannah Georgia!

Welcome to the truth about real estate investing show for Canadians I’m your producer and host Erwin Szeto since 2016, 300+ episodes later, ranked as high as #81 on iTunes in the Business Category in all the world where we invite expert guests on this show to learn their lessons from both success and failures, as the saying goes,from Otto Von Bismarck “’Only a fool learns from their own mistakes. The wise person learns from the mistakes of others.” Unfortunately many didn’t hear my warnings about private lending based on the learnings of others’ mistakes and here we are… if you ask any real estate Accountant or Lawyer where clients are complaining and losing money from, you guessed it, private lending.

Back to our trip! Tennessee turned out to be a bit of a flop investment-wise, as prices in cities like Chattanooga are comparable to other top investment locations, which did not compel me to invest there. However, it is home to Volkswagen’s major manufacturing plant, where they plan to assemble all their electric SUVs and recently voted to unionize. The sightseeing was breathtaking, both from high up at Lookout Mountain and 260 feet below ground—equivalent to the height of the Eiffel Tower—on a half-mile cave tour that ended with a 145 foot tall waterfall in a cave!! 

Oh and the food we ate the entire trip was excellent. We did make the mistake of ordering too many sushi items with Jalapenos but holy, southern hospitality all the way, we could not believe the number of 4.5/5 Google reviewed restaurants there were to choose from and prices were the same as here but way more options.

Next we went to Atlanta for an Entrepreneurs Organization event. Our hosts own the venue, a rooftop restaurant and we had a great time networking with other 7 figure entrepreneurs. I met one couple with a beverage company that distributes nationwide to Kroger and Wholefoods who side hustles with an investment portfolio of 30 houses.  I met another gentleman who bought a failing property management business with 200 houses undermanagement, immediately turned it around to make it profitable and over a couple years has grown it to 900 units under management. Mostly single family and he advised me, if he was in a position to invest more, it would be in detached, single family houses.

Sounds good to me! Funny how at an Entrepreneurs Organization event I met a couple highly scaled and successful real estate investors in one night.  America truly is the land of opportunity.

While here back in Ontario the CBC released a special piece on how bad it is to be a landlord in Ontario titled: Unpaid rent, arrests, arson: Fed-up landlords fight back:

https://www.youtube.com/watch?v=UpeqE3a3EUk

Back to the trip, I made the mistake of booking a hotel in downtown Atlanta… not the best area but thankfully it was a short walk to the touristy stuff and we walked over to the Coca Cola museum, one of 19 Fortune 500 companies headquartered in Atlanta, GA (source: https://www.knowatlanta.com/jobs/atlanta-fortune-500) and it just so happened to be their birth day which was a pleasant surprise. My favourite part of the tour was sampling the dozens of flavours they make. My favourite was kiwi lime from Thailand.

Next was Savannah, a 3.5 hour drive from Atlanta for three days and nights and it was awesome. Savannah is a gorgeous, historically preserved small city of 150,000 population but they draw 10-15 million tourist visits per year. Compare that to 12 million visit per year to Niagara Falls which is one of the natural wonders of the world.

Savannah preserved historical architecture makes it a lovely place to visit, again the restaurant scene fantastic, stereotypical southern hospitality was experienced and my favourite part was driving around the $7.6 billion dollar investment by Hyundai & the government to build a car assembly plant just outside Savannah.  The projected number of employees is 8,500 which is bigger than Toyota in Cambridge, ON. 

We drove into the Hyundai’s plant parking and were surrounded by hundreds of construction workers, we checked out a couple houses and neighbourhoods and I’ve found my niche of starter houses ideal for investment.  

I’m in the middle of creating my US entity in Wyoming in order to start buying houses and I can’t wait to diversify from Canada to the USA where the economy is growing thanks to government and foreign investment at historic levels. I should mention that Hyundai investment of $7.6 is the largest in the State of Georgia history, a state that’s bigger than the province of BC.

If you want to know where I’m investing and my insights on the properties that I toured in the U.S. while I was there, I’ll be sharing all of it on Saturday, June 8th at the “How to Create a 6-Figure Passive Income in U.S. Real Estate” Hybrid Workshop. Signup here : https://USAworkshop-er.eventbrite.ca/?aff=podcast

Multifamily Development In Toronto With Ming Lim

On to this week’s show we have my old friend Ming Lim of Volition Properties, Toronto Realtor and investor extraordinaire and the name volition is about living your life on your own volition thanks to financial peace from a great real estate portfolio.  The nice thing about investing in Toronto is one can’t really beat the number of high quality tenants to choose from. 

In my experience, the ideal tenant is gainfully employed and optimistic about the future as their credit history is valuable to them as they want to be able to get car loans and mortgages hence they can both afford the rent AND be motivated to be a quality tenant.

But Toronto is a top two least affordable city in Canada and one of the least affordable in the world so unless you have deep pockets for negative cash flow condos, you’re going to have to adopt an investment model of intensification and densification and that’s exactly why we have Ming Lim on as today’s guest.

Ming and I go back over ten years, he’s an engineer by training so he’s a bright guy, he doesn’t hide truths hence Ming share’s how some Toronto investors are faring holding pre-condo construction condos, very sad stuff. On the positive, Ming shares how CMHC’s MLI select program (read cheap, 50 year amortization financing) can be used to optimally invest and develop into multifamily properties in and around downtown Toronto.

For all you Toronto investors, you’ve asked “when will Erwin be downtown to meetup?” well Ming has invited me to speak at his meetup. 

https://www.meetup.com/volition/events/297931009/

Tuesday, May 28, 6:00-9:00 pm

The Kingston House

(676 Kingston Rd, Toronto), google maps: https://maps.app.goo.gl/VKQLkSEc5cVxoa9j8

4.6/5 Google reviews

I’ll be sharing my journey of being a landlord in Ontario for the last 20 years and how I’ve started selling properties here to diversify to the landlord friendly areas of the USA. I’ve just returned from Savannah, GA, I’m in the middle of creating my corporate structure in the States to be prepared to start writing offers in the USA this month and I can not wait!

I hope to see you there and please enjoy the show!

Ming’s Volition on Instagram: https://www.instagram.com/volitionproperties/

Meetup: https://www.meetup.com/Volition/

Advisory call: https://cal.com/volition-matt/30advisory?month=2024-03

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UPCOMING EVENTS

You are the average of the five people you spend the most time with! Build connections with empire builders and trailblazers at our iWIN events.
 
CLICK HERE to check out what’s coming up next.

BEFORE YOU GO…

Before you go, if you’re interested in what kind of properties I am looking at in the landlord friendly states of the USA please go to iwin.sharesfr.com for what I consider the best investment for most Canadians, most of the time.

I’ve been investing in Ontario since 2005 and while it’s been a great, great run. I started out buying properties in the 100,000s and now it’s $800,000 to $1,000,000.  How much higher can it go? I don’t know

To me, the remaining potential for appreciation does not match the risk hence I’m advising my clients to look to where one can find rental properties that are affordable range of $150,000 to $350,000 US$, with rents that range from $1,400 to 2,600/month plus utilities.   As many Canadians recognize, these numbers will be positive cash flow and are night and day compared to anything locally. Plus the landlord has all of the rights, no rent control, and income is US dollars which are better than Canadian dollars.

If you don’t believe me, US dollars are better than Canadian dollars, go ask 100 non-Canadians which currency they prefer to be paid in.

So to regain control of your retirement planning.  Go to iwin.sharesfr.com and check out what great cash flow properties are available in the USA.  

The best part is, my US investments will be much more passive compared to by local investments as I’m hiring an asset manager called SHARE to hand hold me through the entire process.  As their client and shareholder, Share will source me quality income properties, help me with legal structure and taxes, they manage the property manager and insurance provider while passing down to me preferred rates so I save both time and money.  

Share will even tell me when to strategically refinance or sell.  SHARE can even support investors all over the country for proper diversification hence my plan is to own in Tennessee, Georgia, and Texas.  Share is like my joint venture partner but I only have to pay them fees while I keep 100% ownership and control.

If your goal in investing is to increase cash flow, I don’t know of a better strategy for most Canadians most of the time.  One last time that’s iwin.sharesfr.com to see what boring, cash flowing real estate investing can look like on your path towards financial peace.

This is how I’m going to make real estate investing great again for my family and hope you choose the same.  Till next time!

Sponsored by:

This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me.  Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up.  If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next event.

Till next time, just do it because I believe in you.

Erwin

W: erwinszeto.com
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Disclaimer:
As a committed advocate for transparent and responsible real estate investment, I want to openly share my involvement with SHARE SFR (Single Family Rental) as an Advisor. I hold an equity position in this company and receive a referral commission for clients I introduce to their services. My endorsement of their business model – focusing on direct ownership of positive cash flow income properties – is consistent with my own personal investing since 2005, is based not only on a professional assessment but also on my personal experience and belief in their approach. Please note that while I stand behind my recommendations, it is crucial for each individual to conduct their own due diligence and consider their unique circumstances before making any investment decisions. As always, my priority is to provide you with honest, insightful, and practical real estate investment education.