Reining in Canada’s population growth. Rents are flat across Canada as International Student interest has cratered. How does that affect your investment hypothesis? Short-term rentals part 2 with experts Spencer and Ashley. “Marry Sooner, have more kid, ignore costs says uber capitalist Kevin O’Leary, a big announcement and so much more on this week’s Truth About Real Estate Investing for Canadians!

My name is Erwin Szeto, your host and producer since 2016 and 300 plus episodes later.  Thank you to my listeners and the kinds words you shared and thank you for your updates and personal truths about real estate investing.  I did not know so many of my fellow podcasters are no longer releasing new episodes.  Many of them are my friends and there are some I believe should stop, a simple google of the names of folks who borrowed tens and hundreds of millions and going bankrupt will let you know who gave them their platform, promoted them and some even earned commissions.  

Always follow the money, understand how folks make money and factor that into your screening process. 

Did you know that the front runner to become our next Prime Minister of Canada said he would reduce our population growth to match the growth of new homes built and factor in health care access and jobs.  Makes sense no?

Source: https://www.cbc.ca/news/politics/poilievre-immigration-cut-population-growth-1.7308184

A couple problems, housing starts across Canada are way down as building and development costs are extremely high.  New construction sales are low as the market needs to digest the historic number of new construction condos, mostly small ones which could take 1.5 to 2 years per Benjamin Tal, deputy Chief Economist for CIBC.

Link: https://x.com/MikePMoffatt/status/1837899997905301511

Combine that with flat rents across Canada as demand from International students have cratered:

The federal government wanted a 35% reduction in the number of International students and the stat I’ve seen is applications are down 45%.

The Globe and Mail is reporting google searches for student housing near universities in Waterloo, Hamilton and Kingston are down 46-55%.

https://www.theglobeandmail.com/canada/article-university-students-housing-rents/

Personally, my investment hypothesis is forever changing from experience and what real estate experts are telling me about their own investing.  My hypothesis is focussed on cash flow, long-term growth in rents and prices.

For a local investor, knowing that rents are flat in the current market and reduced demand from international students and immigrants, what do you think will happen to your cash flow and price appreciation long-term?

I still have a number of properties in Ontario, Canada so I’m concerned if lowering interest rates and lack of supply will push my prices up.

With the economic and immigration landscape the way it is, should a Canadian investor invest their hard earned money into local markets? I know I wouldn’t deploy more capital into long-term rentals.

Legal short-term rentals and hotels, that’s another matter as small Airbnb operators get squeezed out by governments which is why we have Ashley and Spencer back on the show but before we get to them…

Can you believe Kevin O’Leary said “Take my advice. Get married sooner and have more kids. Family is everything! That’s what it’s all about. Do you agree?”

Kevin said so on his social media, I’ve linked to the Instagram post. Source: https://www.instagram.com/p/C_6eDr9NgRq/

Kevin explains how he wishes he spend more time with his kids where they were young and I couldn’t agree more.  I’ve interviewed hundreds of successful entrepreneurs and investors almost all of them would agree with Kevin how parents never get back those wonderful years of development while kids are young.

My decision to make my portfolio more passive by delegating to SHARE in the US frees me up to spend more time doing what I enjoy, my work in helping hard working Canadians’ journey towards financial peace and time with my wife Cherry and the kids. All the while still being a direct owner of what I consider the best asset class: real estate while maintaining 100% control while someone else does all the heavy lifting.

SHARE’s business is exactly what I envisioned for my own professional services to my clients: to make real estate investing as operationally easy and passive as possible in Ontario but that’s just not possible with affordability so bad, one can’t even cash flow enough to afford property management combined with rent control and tenants having all the rights.

Now I’ve got some big news to share that I’m incredibly excited about! As you know, my real estate journey started all the way back in 2005 as a novice landlord then I got serious in 2008 when I first began formally learning about investing. Since then, I’ve always had my eye on the landlord-friendly USA as an ideal place to invest—better cash flow, more stable tenant laws, etc. But the challenges of getting financing, building a power team I could trust, finding the right deals, and managing properties from across the border kept me from jumping in.

Well, I’m thrilled to announce that I’ve recently taken on a new role as Head of Business Development in Canada for SHARE! This partnership is a game-changer for anyone looking to invest in the US market like I’ve always wanted to. SHARE has eliminated all the hurdles that once held me back. Financing? We have the contacts, one of them emailed me today they have 4,500 lenders signed up ready to lend to Canadians. Deal sourcing including off-market? Check. Ongoing property management? We at SHARE can handle it all.

With SHARE, I get to be a passive US landlord. I’ve been a landlord for 20 years, I don’t enjoy it and will gladly pay someone else to do it while I still keep direct ownership, full control, and 100% of the equity. It’s a dream come true for me as control and 100% equity was how 45 of my past clients made $1 million or more investing in real estate, and if you’ve ever been interested in US real estate, now’s the time to take a serious look.

If you’ve been waiting for the perfect moment to invest in the US but didn’t know where to start, this might be it. 

The best please to learn more is: https://iwin.sharesfr.com/ or our US Investing workshop coming up Oct 19th or my free training even in late November.  The writing is on the wall, I don’t see a future for everyday investing in Canada when the deals we’re finding at SHARE are so much better.

50+ Short Term Rentals Part 2 With Spencer & Ashley

On to this week’s show, a topic I’m a big fan of, avoiding long-term rentals in tenant friendly provinces like Ontario hence we have Spencer and Ashley Giles back for round 2. If you didn’t already know, vacation rentals are a business, 24-7 for some like Airbnb managers like Spencer and Ashley Giles who are back to share more, dig deeper into the strategy including operating and owning in the USA. 

Their management portfolio is 50 properties at time of recording spread across much of Ontario and Up State New York so they have a lot of diverse experience to share.

To follow Spencer and Ashley Giles, their website is https://spencerandashley.com/ and https://www.instagram.com/spencerandashley/ on Instagram.

Please enjoy the show!

To Listen:

HELP US OUT!

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.

Summer hard 2024 complete, back to school, back to learning about investing. Is anyone investing in long-term rentals anymore? What we’ll be learning about at the Real Estate Resilience Summit – Business Edition!  All this and more on this week’s Truth About Real Estate Investing Show for Canadians, I’m your producer and host Erwin Szeto since 2016.

The Bank of Canada just made their 3rd consecutive rate cut of 0.25% after what has been the quietest summer of real estate in my career history, landlord since 2005, investor specialist Realtor since 2010.

The market has spoken, rental properties as investments in Ontario are out of favour across the board.  I have friends with very nice apartment buildings for sale receiving no showings.  I’m seeing the most lopsided investor imbalance of listing/selling vs buying.

Listings of rental properties locally has never been this slow in markets once popular with investors and multifamily.  

Elizabeth Kelly’s Real Estate Resilience Summit – Business Edition couldn’t have come at a better time as Canadian investors have never had a harder time finding opportunities.  

I was having dinner with a coach recently who informed me that it’s been months since she’s seen a deal she’d be willing to put her own money into.

On the flip side, we at SHARE, a tech enable asset manager who in my experience makes building a fully managed rental portfolio the easiest I’ve ever seen.  Fortunately or unfortunately, that can only happen in the USA thanks to the size of their economy, fastest growing in the G7, combined with low taxes and landlord friendliness.

I was literally telling my little cousin about a deal I was reviewing in Kansas City.  He’s looking to invest, he’s in real estate, his dad, my uncle was a big time broker.  Point is, he knows a deal when he sees one and he’s family.  Back to the deal: An off-market, 1,200 square foot bungalow, 3 bed, 1 bath built in the 1950s.  Most investors know this type of property in their own target markets as it is typical for basement suite conversions and would cost around high $600 to low $700k in most investor target markets like Hamilton, Oshawa, Barrie, Kitchener-Waterloo-Cambridge.

Back to the deal in Kansas City, MO.  Price from wholesaler including their fee $152,000. Renovation quote to bring the property to rent ready: $20,000.  Projected rent: $1,300 per month.  For Canadian investors who’ve been around for a while, we’ve turned back the clock on our real estate market over 10 years.  Cap rate for those who understand commercial real estate: 5.9%. I have the home inspection report from a 3rd party inspector, I have the renovation quote from the property manager, personally I would do the deal from the comfort of my home. 

This type of deal can be done as a low effort side hustle.  I do think it’s wonderful what all my developer, flipping investor friends are doing but I personally don’t want to invest that time and effort nor would I choose a strategy where the linchpin is CMCH, a government institution.  For those strategies, I’ll have experts in those fields as guests of my show like best selling, co-author Russell Westcott out in Edmonton who’s building, developing small multifamilies all the time and he’s also investing a lot more time, money and effort than I’m willing to.

There is no right or wrong in real estate, it’s just what is best for you.

After saying there is no right or wrong in real estate, I’ll read to you a quote from one of my newer clients who’ve I’ve been trying to coach out of a jam they got into before they ever met me.  This is what they wrote me this week.

“Hey Erwin. Just want to let you know that everyday I’m grateful for your wisdom about my private lends. I ignored red flags and didn’t act fast enough so things are still quite painful. But, we would’ve been wiped out if you hadn’t shared your concerns with me. Thank you beyond words.”

Also this week, I was congratulating one of my long time clients who we helped sell their income property in the GTA and realize over $500,000 in capital gains which everyone knows is taxed better than lending interest. 

It should be no surprise that the long-term real estate investor is winning even in this market and going forward, I fully expect my clients and I to translate our success here to landlord friendly USA.  My only hope is to reach and educate as many people as possible so they can be successful like my long-time clients.

Speaking of education, I’m offering a free training webinar, a real estate 101 investing on September 17th, 8pm EST, anyone new to real estate investing or USA investing should attend this so if you have friends or family interested in investing, they need to attend so they can at least compare any and all opportunities they review against a single family house rental property in landlord friendly USA. SAVE YOUR SEAT HERE

I review deals all the time and it’s tough to beat SHARE’s offering of fully managed from acquisition to ongoing management to disposition, and when compared to any condo or duplex in Canada…. There is no comparison.

Building Resilience: From 100+ Unit Investment Portfolio to Active Business with Elizabeth Kelly

On to this week’s guest!

Award-Winning Real Estate Investor, Coach, Speaker, Educator & Proud Entrepreneur, my old friend Elizabeth Kelly who tells it like it is.  Elizabeth shares about her wins and losses in real estate.  She’s been an active leader in the community for nearly 20 years and is here to tell us about how we Canadian real estate investors can be resilient, what she sees for our collective futures in real estate and she’s hosting the 3rd annual Real Estate Resilience Business Edition of the summit on September 28-29th.  

Myself and SHARE are proud sponsors of the summit. I will be joining an expert panel on USA investing with friend of the show Glen Sutherland.  My wife, the lovely Cherry Chan will be a speaker as well and I’m super excited for the other speakers as well.

On today’s show Elizabeth shares her personal journey from mega real estate investor to entrepreneurship adjacent to real estate, the challenges of affordability for investing in local markets even after learning the hard way when back in 2010, she bought 100+ units and struggled with systems and operations.

Any and all investors should give this episode a listen to learn how to both win in real estate and to avoid losing which IMHO is another way of winning.

For more information on the Real Estate Resilience summit go to: https://realestateresilience.ca/

Please enjoy the show.

To Listen:

HELP US OUT!

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.

A broken Canada? No way. We’re richer than ever but tell that to young people who don’t have rich parents, living on their own paying rent. $1,800 for a basement apartment? Welcome to the Truth About Real Estate Investing Show for Canadians.  We’re a little podcast that started in 2016 with well over 300 episodes, each an hour long and these days, we have an unpopular opinion depending on where you stand.  

Friend of the show, Scott Dillingham, owner of Lendcity who can co-broker as in accept referrals from other mortgage professionals to aid their clients in obtaining US mortgages with US lenders beyond the Canadian banks has been signing and onboarding over 20 agents and brokers.

I spoke to some of those veteran mortgage agents and one of them said “I see no business case to invest in a Canadian investment property unless the parent is buying a student home for their kids to go to college or university for ten years”

What I love about mortgage professionals is they know numbers hence they’re fans of US income properties over Canadian ones and I’ve yet to have anyone want to debate me I’m wrong.

Sure, they’re is good business to be done flipping, wholesaling, and developing which are active businesses, hardly passive investing but I’ve yet to have anyone disagree with me that US long term rentals are better than Canadian ones.

For that reason, I have a bad feeling for investor focussed real estate realtors and mortgage professionals going forward.  My advice to my clients is to diversify to the US, hold, maybe sell some Canadian properties if they’re unable to hold them or they no longer serve them.

I could be wrong but based on the information we have right now… for example, my colleague Tim Hong posted a reel to his instagram showing the difference between tenanted, 3 bedroom properties and vacant or owner occupied 3 bedroom properties in Kitchener-Waterloo.  Tenanted properties were selling for on average $60,000 less than non-tenanted properties and took 65% longer to sell: 38 days on market vs 23.  

Link: https://www.instagram.com/p/C-LRvqEvWyf/

This current market is telling us they value rental properties less than regular properties.  We are seeing the same even for vacant, legal duplexes in Hamilton.  My investment thesis was the house with the basement apartment aka mortgage helper would be the most desirable property as it would be more affordable than a single dwelling home.  Live in one unit, rent out the other but no, the market doesn’t want to be a landlord.

That may change as rates are cut further but the math is the math. Income properties in the USA have better numbers with less tenant risks, no rent control, no landlord tenant board.  To me, the more Canadian investors get educated on how easy it is to invest in the USA, the better so they can avoid the troubles I’ve had from three basement floods and four visits to the Landlord Tenant Tribunal, easily one of the most depressing places to me. 

And I can’t wait to lead the journey for many.  Speaking of, we are back on September 17th with an all new Free Training, a 101 of real estate investing to now incorporate the best practices of both local real estate investments vs. USA.  I’ll got more into detail about the house I bought in San Antonio, Texas for $120 per square foot or $265,000 for 2,200 square feet and $2,300 rent per month.  I’ll share my latest from my economic research including which market we’ve taken off the list for top areas to invest in which will again be an unpopular opinion but we can as we at SHARE can service all of the USA so we may cherry pick the best markets for the best returns.

“A Broken Canada? No way. We’re wealthier than before the pandemic…”  Some brighter news as per the headline of a recent Toronto Star article.  House owners and those with stock portfolios are generally better off than before the pandemic in terms of net worth.  I have no argument there. Where I disagree is in every conversation I have with someone from the real estate community or anyone younger than me with limited assets. They all complain about the lack of affordability and how they can make more money and pay less tax elsewhere.  Usually the USA or Dubai.  For lifestyle, I hear a lot about Mexico, Costa Rica or southern Europe.  The grass may seem greener on the other side but the truth is, we all know talented people who are investing outside of Canada, preparing to leave, or have left. Am I leaving? Just my capital.  I doubt my kids stay in Canada after University but they may have to leave for university as it’s so competitive to get into our excellent programs here while spots are reserved for international students.

Sadly, I won’t be surprised if my kids have to be international students somewhere outside Canada.

College Instructor Invests in Real Estate: Duplexes, ABNB, 11 Plex

Speaking of education, we have a college instructor on this week’s show! Brian Gordon is an old friend of mine from years ago, he works full time for the largest appraisal company in Canada, if not North America in Management.  Prior to that he worked as a Senior Property Tax Analyst for one of Canada’s largest REITs, if not the biggest.

Linkedin: https://www.linkedin.com/in/brigor/

Brian has been methodically growing his own real estate portfolio over 7 years consisting of duplexes, a AirBnb in Blue Mountain, more recently an 11 plex development where he’s adding two additional units.

As mentioned Brian is the course creator and instructor of “Real Estate Investment Strategies” at George Brown College, a comprehensive, yet affordable course which is one of the big reasons why I wanted him on the show.  Real estate investing is largely about return on investment and that includes one’s education.  This course is only $392.24 for 20 hours including private 1 on 1 consultation time with Brian.  What an absolute steal.

Link: https://coned.georgebrown.ca/courses-and-programs/real-estate-investment-strategies-online

Needless to say, I thoroughly enjoyed recording this episode for you all to learn Brian’s tips and tricks so we may all improve our own businesses and you’ll want to hear about where Brian’s next investments will be and his views on Canadian opportunities.

Please enjoy the show!

Follow Brian on Instagram: https://www.instagram.com/acquiring_wisdom/

To Listen:

HELP US OUT!

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.

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:

HELP US OUT!

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.