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(00:00) the government’s made some updates to the budget but uh they haven’t done anything to for our family doctors to remain competitive and keep our family doctors and other medical practitioners in Canada so I’ve got nothing positive to say on that front and I’m deciding to stay more positive hello and welcome to the truth about real estate investing show for Canadians since 2016 that’s over 300 300 episodes probably about 350 by now we’ve ranked as high as number 81 on iTunes in the business category
(00:30) globally my name is urman cedo and as I’ve shared on past episodes I made the decision to begin diversifying my portfolio by selling local Ontario properties I have three closing I have one I closed one this past week and I have two more coming up uh this next week and I’m beginning the process of buying income properties in the USA my criteria for buying is simple it’s direct 100% ownership and control like I do here in Ontario but I want the best of the best managing my properties hence I’ll be buying via a company called
(01:01) share who is an Institutional asset manager it’s like being a Costco member I benefit from their buying power I get preferred pricing in this case under share I get preferred pricing on property management leasing fees repairs maintenance and insurance so while I had to pay share fees I save a lot on other in other areas in the news there’s this little company called Samsung they’re actually not that little I Googled and I found out they are the largest company in Korea in Korea South Korea by market capitalization as in if you
(01:32) add up all what all their stock shares are worth they are they are worth the most ssung recently reported earnings they actually reported earnings this week and they absolutely crushed it they tfold increased their first quarter operating profit now what they’re saying is AI will drive technology demand uh going into the future and going to the rest of this year so if Samsung is 10 Xing their operating profits where and how are they investing in AI I asked these questions that’s all I ever do all I ever do is ask questions which is like
(02:06) the nature of this show so I asked Google I read an article a couple articles Samsung is investing uh a combined $37 billion into building two merker chip manufacturing facilities just outside Austin Texas so um as many of you know I did site a site visit of one of them already only about three two three weeks ago did they announce the second uh the second record ship plant and they already have one already existing in anyways so the new investment will employ a projected 4,000 high paying manufacturing jobs uh and uh as my
(02:43) theory is well my investment goals is always to earn above market returns by investing and so my plan is to invest nearby where these plants are being built in Austin Texas uh I’ve already given the names of the neighborhoods I want to own uh via share the neighborhoods are called Hutto and Round Rock now that’s not advice I’m just sharing how I’m choosing to invest and as always I’m open to criticisms uh Noe my plan is to only buy one house in Austin as my plan is to own to buy in other cities proba at least
(03:14) three cities total before I ever Circle back and buy a second property in any one city uh my objective is diversification which and that’s not a problem for me because share is a n Nationwide organization that can cover me basically wherever landlording in the USA makes sense now keep in mind historically real estate in the US between 1970 and 2023 so that’s 53 years on average over that significantly large sample size real estate increased an average of 5.
(03:48) 5% each year and that’s compounding 5.5 compounded annual growth rate I personally think I have a shot at being that because of my very targeted areas for investment near historically historically levels of manufacturing investment into creating high paid jobs into largely Ai and Automotive manufacturing specifically EV anyways my clients and I were getting about 7% here in Ontario but I’m looking forward to being more passive uh with no rank control having the majority of Rights in my favor and of course beating the average I’ve got uh sources in the show
(04:24) notes of course as always so if you go onto my website truth about my email newsletter you will see the infographics from visual capitalist uh if you’re interested in learning more I have virtual tour tours of USA income properties coming up as well as a joint V uh a joint how to earn six figures investing in the USA workshop with my lovely wife Cherry CH Shan uh she will be presenting and I will be presenting as well along with uh members of the share team make sure you’re on my free Weekly Newsletter where we send a deal
(04:55) each week from the USA uh along with uh both free and for fee events simply go to my website www. truthout realestate investing.con the USA guide easy peasy just go to my website and enter your name and email we’re going to make real estate investing great again our friends in the USA have a bit of of a housing crisis themselves so we can help them out as we’re welcome to by the all levels of government there unlike here in Canada on to this week show we have my old friend Andrew Hines and his co-author of an allnew book John
(05:35) schinker Andrew needs Andrew Hines hopefully needs no introduction uh and John is an everyday hero a firefighter and recovering real estate investor uh Andrew has taken his sh turn sharing how he lost money investing in Ohio now it’s John’s turn to share how he made a bunch of money in Ontario and lost all of his profits in a re in the recent correction but it’s not all bad news John’s learned a lot he’s written a book in the meantime John’s short-term rental property in the USA is a winner and I’m confident you’ll
(06:05) agree especially when you hear his numbers on his uh on his vacation property in New York state when compared to his Niger Falls Ontario short-term rental the numbers are completely night and day as well as how he’s being regulated by that local government in this episode John and John and Andrew share their journey to writing this book so we may all learn from their mistakes and how to how to be successful in their book with in their book which is U similar to Tim Ferris tools of Titans where experts have contributed chapters
(06:37) to the book including yours truly the book is called real estate Titans tools tactics and wisdom for Canadian real estate wealth I’ve included a link in the show notes to Amazon so you can pick up the book and to follow John and Andrew they’re both available on Instagram and very active and uh I don’t know how howse to put it but I did chirp John he is a fireman he’s a young good-look guy he does appear in a calendar so he’s a good guy obviously because he’s taking a shirt off for charity who El what what other kind of
(07:12) good guy does that anyways please enjoy the [Music] show hello John hello Andrew uh what welcome to the first threeome we’ve ever done online for the podcast yeah we’re on to something here thanks for having us for the listeners benefit well the listeners who’ve been around for a long time no I’ve never had I’ve had two guests in person this is the first time we’ve done it online which makes sense since uh we’re all a little bit further apart uh but yeah let’s go what’s keeping you busy these
(07:49) days yeah who do you want to go first oh you spoke first Andre you you first all right well um when was I last on here on your show year ago 12 months yeah maybe a bit more than that um yeah so I got a two-year-old and uh I uh have been still busy in the US last time I was on we were talking about the new developments the builds um I’ve since sold all that off I did build three sold off the extra lots that I have sold those buildings and uh basically just decided that Kate Coral wasn’t going to work anymore given
(08:21) some of the changes in the market know you and I have chatted about this uh recently but uh basically things just got squeezed cost costs went up on building and then of course the market kind of came down slowly not as bad as it did in Ontario but it did come down in Southwest Florida too and um you know I just kind of decided that it wasn’t worth the risk for the P you know the perspective profit margin it uh you know just didn’t justify taking the risk so I I took a couple of small losses on some
(08:50) of the Lots just to liquidate them uh knowing that I was kind of getting a negative return on Equity at the moment with the stagnant market and then just you know paying property taxes on those slots so um shifted gears I’ve been doing some off-market acquisition right now uh making offers on land I was chatting with you a couple of weeks ago uh so we’re uh somewhere around 6,000 offers in 30 days and uh I got another 4,000 in change going out uh pretty much today so um yeah keep it rolling and that’s in Florida all in Florida right
(09:23) now yeah and I got the hospitality business up here we completed our second uh full season glamping uh we acquired a resort as well 9 Acres on the water in toore and uh so it’s all part of a you know the getaway group of companies sort of what we call it and um we do Luxury glamping and luxury stays in the area uh and we’re yeah like I said we’re expanding uh we we probably did a 75% increase in our sales year-over-year uh for 2023 and we’re looking to do a a similar growth again next year uh
(09:57) because we added a bunch of new inventory and you know new trailers T really awesome stuff um anyone wants to check that out they can check us out on Instagram at the gr getaway glamp and uh yeah that’s uh that’s the most of it writing a book we’re gonna talk about that today uh so John and I that’s why we’re here we’re talking about the book and uh yeah that’s had us both busy so uh both of our plates have been full and I will uh I’ll pass it back to you irn or John yeah before we just before we
(10:25) get to John just want to highlight for The Listener like I’ve known Andrew for quite a few years and it’s it’s good to see that you’re willing to share loss and also that you’re willing to Pivot when the market when the markets change yeah right because well how many people had losses right like I mean I had I had some wins too I I mean I I look at Florida and Southwest Florida in my first experience as as being um an okay Endeavor like I didn’t lose overall but it it didn’t justify the effort so
(10:53) that’s pretty much where I walked away from it like I apply when I’m doing Investments down there I apply my own internal rate of return if I can’t profit on top of that to me is effectively a loss because it could just put that money out in a passive investment yeah so that’s that’s in order to keep things equal I have to look at it that way right so for for those who don’t know like Andrew’s a smart guy so his money if his money is not working hard for him then it’s a loss essentially yeah if you know what
(11:18) you can Al invest in right like I know what I could I could go get 14% passively so if I if I’m not getting that actively why am I doing it you know I should be I should be able to do that and then some actively mhm MH and I was going to say like you made a lot of money in in Ontario investing as well I had some wins I’ve had some failures I shared both but uh yeah we we’ll all continue to have failures they’re only really failures if you don’t learn from them right y if you don’t cut them off and you when you need
(11:46) to so also we have John on the show so John this is your first time on the show first time on the show yes thank you what’s keeping you busy these days yeah the novel’s been one of the biggest things that Andrew and I are writing um we were fortunate enough to have you as one of our uh one of our interviewees in the chapter we really appreciate that your chapter is fantastic you gave a ton of insight and wisdom so we appreciate that but I actually approached Andrew for this idea about two years ago which
(12:16) I can’t believe that it’s already been two years already and uh I’ve told the story once or twice but I pretty much just sent Andrew a a DM video on Instagram it was just like hey man I’ve got this idea for a book I want to do this and this and we set up a meeting for a couple days later I pitched the idea to Andrew and he’s like yeah man that sounds awesome let’s go for it so it was a perfect match because I’ve written a book in the past so I have all of the publishing knowledge editing I’ve
(12:45) gone through the whole process before and Andrew’s knowledge it’s it’s uh you can’t really top that and his role aexs of guests he’s had on the show so it was pretty much a match made in heaven we both used our strengths and I just kind of brought Andrew a list of people I wanted in the book you were one of them and I had maybe 20 25 other people and Andrew was able to match us all together which was fantastic and that’s pretty much been the biggest project we’ve been working on but aside from that I guess your
(13:16) listeners wouldn’t know me my day-to-day work is a firefighter we just kind of talked a bit about that off camera and uh yeah that’s kind of what I do during the day I have a handful of airbnbs in Ontario and one in elville New York at Holiday Valley nice little ski area out there so that’s a lot of fun and over the last year it’s kind of just been stabilizing after everything that happened in the market kind of took a step back with everything and we’ve been stabilizing our Airbnb airbnbs and
(13:47) portfolio and that’s kind of the day-to-day right now so I asked before we start recording if anything’s if everything’s fair game he said yes you did can you share the story how you got introduced to my podcast yeah that was actually that was probably maybe four years ago now and uh my father was a big listener of Irwin and when I started learning about real estate that was probably four or five years ago as well and I was a big Andrew Hines fan and that’s why I actually approached him for the book I learned
(14:21) most of my stuff from from Andrew and then I was talking to my dad about his podcast and he’s like oh you got to listen to this Irwin guy he’s fantastic and you got to listen to him so yeah I started listening to Irwin’s podcast that I must have been 2019 or so maybe 20120 not quite sure but I’ve been one of your what is it 100 listeners or thousand listeners for 17 listeners okay I knew but yeah I’ve been one of The Originals I’d like to say thank you for listening and thank you to your father and uh I can’t let
(14:52) you off the hook for this either before we were recording we Andrew and I learned something very personal intimate about you that you do take your shirt off for a calendar yeah seeing as this is your first virtual threesome on a podcast I feel confident sharing that yeah I’m part of the firefighter calendar as a firefighter in the niagar region we do this for charity for pth stone mental health it’s a fantastic um it’s a fantastic organization so yes I’m willing to take my shirt off for a good
(15:22) cause sometimes and you get nothing for it this is all for charity all for charity yeah it’s a great time good char good time couple laughs are had and I think that’s a good segue into the book like people don’t write books to make money like there’s there’s not nearly enough money in it for for to cover all the time and effort that’s for sure it’s been oh it could be a thousand hours between Andrew and I at this point between all the interviews and storyboarding and the editing process
(15:51) and back and forth you know uh you know yourself know irn that we had to do kind of an update a couple months ago because so many things have changed in the market so it was almost like two full rewrites of the book and everything so yeah it’s a ton of time and effort but the reason I wanted to do this initially was when I got into real estate and flipping houses I really didn’t know much about it I kind of just jumped in because I knew real estate was a good investment but I I knew we were playing with some big numbers here some
(16:20) life-changing numbers but it’s also life ruining numbers at the end of the day and I didn’t know much about real estate other than what I’ve learned from Andrew and yourself irn so I wanted to kind of build a community of people I was able to speak to I think 20 or 21 investors and interview them for the novel and I just personally wanted to learn from the biggest names in the industry and that’s how it all got started so let’s start with what have you learned along in your own Journey because uh it’s it’s awesome you
(16:49) mentioned elville I need to hit you up later because uh we just got back from Huntsville and there was no snow right yeah El is a beautiful area but we can talk about that uh but the biggest thing in my real estate Journey was I started flipping houses about four years ago we were doing the nicer areas in St Catherine’s kind of the north end it was myself my father and sister we were flipping like higher end houses between the $600 and $900,000 Mark and we were making money hand over fist it was crazy it was all during that
(17:23) boom and that’s all I knew at the time I’ve heard about the 2008 scare whenever everything crashed but people weren’t talking about that two or three years ago very much there were people like both of you who understand it that would say that would reference it it’s not always going to be great but for someone like me that’s not been in this industry for very long I just did whatever I could to get more money make more money and get more properties so some of the basics of real estate investing went out
(17:52) the window but I ended up borrowing a lot of private money private financing private mortgages just to get more properties under my belt and then when everything crashed I think it was the start of Q2 2022 I was holding three properties with private mortgages private funds all between I think at that time $750 and $900,000 each of them between1 to $150,000 worth of Renovations into all of them and uh we ended up having to liquidate that at a huge loss for example I’ve told Andrew about the one house we purchased for
(18:30) 750,000 we put in anywhere between 100 and 120,000 and then um things got so bad we had to let it go for under 700,000 so major loss on that one we had a similar situation with the second house and then the third house we ended up turning into an Airbnb in niagar on the lake which is now doing wonderfully but that’s money we didn’t expect to have tied up in a property long term and yeah after a couple years of doing great uh it kind of all came to a halt at that point when the market crashed it was about a year
(19:02) of stabilization and yeah it was a very tough year and a lot of learning for sure and were you able to keep your lenders whole yep yeah at the end of the day everybody got paid back and everything but it was at a big personal expense unfortunately uh had to dip into the personal funds and everything but yeah everything worked out with the lenders and everything but pretty much all the pro the the progress we made kind of took a halt and but we were able to stabilize at the end of the day did you basically give back
(19:37) everything you made then yep yep in so many words yeah it’s too bad because we started I think we started in 2019 and like I said we were absolutely crushing it with a bunch of flips I still do have a handful of airbnbs which is great so I do have some of my portfolio left but pretty much well 100% of the flipping profit was G on and had to liquidate some more of the portfolio just to pay everybody back thank you for sharing John yeah for sure yeah who shares that e like yeah no problem you know keep on moving just usually go quiet like so
(20:16) many social media profiles have gone quiet yeah people just go quiet like they don’t share yeah for sure it’s been a hard time and I’ve been very open about it the whole time and my fiance has been incredible honestly would not have got through this without her we talked about it off camera she’s a social media manager and um she was doing very well before all this happened but when all this happened I didn’t have enough cash flow like our personal expenses were absolutely insane and we didn’t have enough money month by month
(20:45) even liquidating some of the portfolio just these private mortgages we were holding and paying back all these lenders and stuff we pretty much had to 3x her business overnight we did that in about two or three months just to just to to live just to cash be cash flow positive so thank you to Courtney for that shout out Courtney yeah no kidding think you owe her one I owe her lots I owe her everything that’s for sure and you kept your job through the whole process right I did yeah yeah that all went to uh private mortgages and stuff
(21:20) I’d get a paycheck itd go One Direction so yeah it’s been like I said it’s been tough but we’ve got through it we’re still paying for a little bit of it but yeah I think we’re kind of on the other side of it now so if you didn’t have your girlfriend in your great paying job where would you be um I would have had to sell all of our airbnbs for sure there would have been no question our oh well now that we’re sharing things our monthly expenses were about $22,000 that was between um just our personal house all
(21:54) the interest payments the private mortgages and stuff like that I’m only responsible for onethird of the flipping corporation that we had so for those three properties I was on the on the hook for onethird of all those properties but I also had my the private funds I I was borrowing so yeah it was lots of money going out every month and it was not going to principal that’s for sure so is that gross debt or is that total debt Andrew you had your mortgage license uh total debt service includes like yeah everything credit cards
(22:28) everything that’s not property related so anything directly related to 22,000 total debt a month yeah that was going out yeah okay did not the need for the plan A B andc uh yeah like you obviously on that one property you’re you you were able to turn it into a positive right of course like said you got money tied up in it but yeah but yeah like like I said at the start of this I wanted to write this book to avoid all unfortunately I started writing this book like as this was all happening so I thought I had a plan A B and C but I I
(23:07) didn’t know it could be that bad even my worst case scenario I didn’t know house prices were going to drop 20 25% overnight I didn’t know that no one was going to be buying homes everybody was selling off what they had and for that house I was talking about that we would have sold for 950 to a million and we had to sell it for 700,000 less than what we bought it for like I never expected it to be like that I thought minimally we could break even sell it in a timely fashion and but no it was definitely not like that well not
(23:38) everyone sold everything I’m still bag holding that’s because you probably used good uh investing principles like I did not so you were able to hold these assets could have been better I yeah of course that’s for another show but yeah John before we Sorry before we move on to the book can you talk to what were the relationships like because this was a family-run business the flipping business how about the relationships with your partners your your which you said was your sister and your father yep yeah um
(24:08) luckily for them they didn’t have to borrow private money like we all had to do the private mortgages of course but I needed private money for all the renovations and everything for my 3D so they were in a bit better of a spot than I was so everybody was stressed the whole time but luckily like yeah we’re family first and it’s hard with family sometimes investing and in life and everything but we got through it we figured it out and we still own that Niagara on the Lake property together as an Airbnb and it
(24:38) was figured out like we all had to help each other at different points but figured it out got through it and that worked so what would someone who read the book would they be able to avoid these Mist these these challenging times that you’ve had absolutely yeah so that was the goal so basically we used the book tools of Titans by uh Tim Ferris is kind of the guideline for the novel book the author yeah I see it in your background actually right there bottom left corner that nice little orange one um yeah F fantastic book but basically
(25:12) you can see four our work weeks on on my right I can see I can see the Spy but yeah go ahead sorry I can see it too yeah so there’s about 20 interviews with some of the top Real Estate Investors in Canada so people are able to start from the beginning with their story what they did to start their investing portfolios and then all the way up to who they are now so a lot of times it’s hard to look at someone like yourself Irwin and be like well how do I get to Irwin’s level so we wanted to give people everybody’s Inception story
(25:43) and then kind of the steps of how they built their wealth and their portfolio that’s kind of one section of the book is those 20 interviews but then the start of the book is a lot of Andrews knowledge being poured into the reader we have a couple chapters like Andrew’s golden rules of investing um how to F find your how to purchase your first investment property and things like that it’s very actionable chapters where you can even just print them out use them as guidelines and checklists and stuff like
(26:11) that so we’ve really broken it down to the base level for the newer investors and then we have those 20 chapters going into the expert stories sounds pretty awesome and something some everybody should probably consume at the beginning yeah the big thing like so we wanted to make sure that the process and methodology and and you know because it’s a buffet there’s all these different things you could do how do you synthesize like the different strategies and and pick what what works for you so a lot of it’s about finding that fit and
(26:42) then of course protecting your downside which of course is harder in Ontario now than it was before when cash flow is probably your biggest protector um which most people don’t have so uh we did you know focus and this is what created so much extra work is with the downturn and the the new interest rate environment and economic climate and and declining real estate values is you know how do you succeed now and and what’s going to work now because a lot of people can’t relate to how say you started or when
(27:10) all those years ago or how I started all those years ago um but they can get my two cents on now that I’ve seen 12 years of this like how would I start again if I had to start right now and I in a lot of ways I look at it as start starting again a lot a lot of what I’m doing although I’m coming in with a better better start than I came in last but you know I think that there’s a lot of opportunity right now it’s pretty exciting and I know you have your your ideas what you shared in the book too
(27:37) and uh I’m I’m super like this is probably the happiest I’ve been going into a new year from an optimism standpoint like yeah of course that nothing’s perfect but there’s there’s a lot of good stuff on the horizon yeah I like to agree especially where we are I know we’re we’re recording this January 2nd I know we’re releasing this in February but uh you know I think we’ve reached the bottom for both the US and the Canadian markets so yeah I I agree I’m I’m very
(28:02) optimistic oh so actually and question for Andrew Andrew John mentioned there’s uh what did he did you say golden rules of investing yeah the golden rules or Andrew’s golden R rules of investing can’t remember the exact title but yeah that’s one of the chapters Andrew can you share some of those golden rules maybe give me three oh put me on the spot um I’d have to see how we wrote it down but I mean obviously a big one is is cash flow don’t invest in Ontario no I’m kidding cashow FL number one um John
(28:32) what did we put in there I I we haven’t gone over that in a bit I share these things all the time but how how I exactly uh wrote it um you know for me I’m going to sound like a broken record you know if you if you listen to me uh you know have your plan A B and C be able to Pivot these are things that would be in those golden rules um invest in a way that fits with your own capabilities it fits with your why um there needs to be a there needs to be Synergy between what you can want and need to do and the in the strategy you
(29:00) picked so just because uh you want to do Airbnb Arbitrage or hospitality and you want to go full-time into real estate uh but you know at home you got kids and you got a full-time job like that’s just those those don’t fit you know you might be more uh set up to do more passive type of investing so um that would just be a little bit of a preview of some of the stuff we covered right let’s pick on John for example I think his story is actually a strong one in that um you know and you and I have talked about you
(29:29) know we talked about like what’s out there in terms of like social media marketing and whatnot all these programs that promise you uh if you take their course they can quit their job but you know we were just talking about John if he had quit his job he’d be financially ruined yeah for sure uh and that’s and that’s just reality of things and we all talked about and Andrew you mentioned cash flow and I was talking to an investor uh this morning about you know we’re talking about cash flow Ontario and my point was to him was
(29:57) you know we’ve never felt inflation as badly as we have the last two three years right and so a pro formula for a property a residential property say just use of something boring something very Vanilla single family home in Ontario anywhere right could be condo could be detached home your cash flow uh we all know your expenses are going to go up but we have rent control in Ontario so your cash flow is only ever going to get worse is this a good investment all for those who are listening like both John and Andrew are
(30:32) smiling I’ll let either you go what do you what do you think go ahead Andrew oh geez um yeah I’m here I’ll throw out something as an observation neither of you are investing in long-term Residential Properties that’s that’s a very easy observation right no we’re we’re not in I mean in Ontario for me to to me to invest in that kind of thing I got to get it out a price that makes sense for the headache right like that’s that’s the new reality you always had that risk but before we had compensation for that
(31:05) risk in the form of cash flow in the form of appreciation and 30% a year returns uh that was factoring in your leverage you know and a healthy cash flow like it was very protected it was very hedged it felt great uh and then we got into a place where you know returns as I can calculate them on my cash flow sheet are like looking like 12% which you can get more in private lending so now all of a sudden it’s like wait why would I do that for all the headaches that come with it you’re speculating at your appreciation right now I’d still I
(31:34) still uh would estimate that we’re going to get completely stagnant or 1% I mean of course in in 10 years time I expect real estate values to be up but I don’t want to bank on a big number there and uh knowing all that it doesn’t look great and especially when you don’t have cash flow you have no ability to Pivot so that’s why I’m not really um active in Ontario what I am open to in Ontario is the fact you’re not active in residential long residential in Ontario yeah I am open to a deal in Ontario like
(32:05) if it comes at the right price of course and I think people are sleeping on Ontario right now because everybody’s looking at the US so um I went I was in the US before most of the people who jumped on the bag vanwagon here but um I just acknowledge that that if if everybody’s looking South then I’m still going to pay attention to here um but yeah my activities are still South and uh for the time being will be I don’t think that the rules as they stand in the real estate uh you know uh so the
(32:34) landlord tenant board here in Ontario are going to stay the way they are I think that there will come a turning point once you know institutions own most of it uh where it’ll it’ll become much more landlord friendly but for now it is what it is I I hey I’ll still take a great deal and I still think there’s great opportunity here but yeah um just not my key Focus right now yeah and for me I’m not touching any long-term Buy holds or anything like that in Ontario I have a couple airbnbs in Ontario and they’re still cash
(33:04) flowing very well especially the ones that I purchased a couple years ago uh the one property we have a 2.7 interest rate and the cash flow is fantastic on that we have another similar one like that Niger on the lake but then the Niger on the lake property I mentioned earlier we have a we have a huge mortgage on it and I think our interest rat’s around 7% and even though it’s in on the lake renovated perfectly as a hot tub like it’s As Nice of an Airbnb as you can have and we’re barely cash flow
(33:35) positive so even at that point is it worth it not so much at 7% but the properties we bought a couple years ago yeah there’s still huge cash flow machines and everything but like Andrew said if you can find a great deal and maybe for me again I like the short-term rentals it’s a lot better for the cash flow but the biggest thing for that is just make sure you’re in a short-term rental municipality that’s favorable for it because a lot of municipalities are not so if they don’t have their
(34:05) established rules I would highly recommend not entering that area yeah mature you want mature bylaws they’ve been there a long time um one other thing I’ll add to that is now this is what I was getting at with people sleeping on on stuff like VBS and negotiating special terms and and all the things you can do in Ontario when sellers aren’t getting a thousand offers thrown at them that’s where you get to kind of create your deal and you can create sort of something that isn’t on surface level people wouldn’t
(34:31) necessarily see it but it could be a fantastic deal for you so not saying everybody needs to race to the US because I don’t think that’s the case um you might you know if you if you go that way you might have an easier time but not necessarily oh I just want to share with you both a Toronto realtor friend of mine tell was telling me he’s bus it’s insanely busy in downtown Toronto already yeah he was hoping for a quiet holidays nope with uh with fixed rates coming down uh they’re already seeing he
(34:58) shared with me a a tono semi semi detached home had 25 offers on it sold for 300,000 over asking so just with the just with the news that they’re going to come down obviously fixed rates have come down but they’ already had an effect of stimulating the real estate market which actually puts in Jeopardy the likelihood of the real estate rates coming down could be we’ll see in the short run anyway John question about your n [ __ ] on the lake property so um so when I see this kind of activity already happening
(35:28) in in downtown Toronto I gen that’s usually like kind of like our epicenter of real estate activity uh to me that’s the early indicator that’s the canaran the coal mine that we’re going to start seeing activity pick up uh slow it like Toronto be downtown Toronto will be the upper Center and it’ll Ripple out So eventually it’ll make it way up to Nag on the lake not not 25 offers but you’ll see buyer demand pick up probably very significantly over the next 2 years what would your plan be then with your nagon
(35:55) lake property you is that something you want to continue to hold or would you take the exit when you can we have it at a place where it’s cash flowing nicely now but it took a lot of work to get there but if they get back up to the prices we were seeing a year and a half ago i’ it definitely be worth looking at because that’s the one property that I I wouldn’t mind selling at some point just to get back the rest of the finances that I need to pay everybody back and then be completely whole again
(36:23) personally but yeah I think we would sell it just because again with the interest rates where are it’s not crazy cash flow positive it’s not in our slow season we’re cash flow negative in the main Seasons we are very positive but it’s almost not worth it kind of like Andrew said the return on investment just isn’t there on a property like that so if it does turn in a year or two I think we definitely look at selling so a question I’m I’m starting to ask folks is especially as we’re into
(36:51) this kind of like realate Market pivot is what is your next uh income property P purchase going to be so uh start with you John yeah for me I am liking over the Border definitely um elville New York uh they have Holiday Valley there and holmont the two ski resorts they have a casino right out there some amazing golf courses and some worldclass Trails it’s very big with like mountain biking out there I’ve got a property out there and my partners on that property I have a second one out there so it’s a
(37:24) good spot it’s just again interest rates are a little bit high right now so it might not be a terrible idea to pick one up before everybody starts buying again because you can always just refinance when the rates come down but I think the next place I’m going to go is somewhere like in elville because with our airbnbs we always want people to have a reason to go to these places all of my airbnbs in St Catherine’s and Niagara they’re right beside a beach or in Niagara on the Lake so it’s always going to be very
(37:53) touristy areas and people are going to keep coming to holid Valley like Blue Mountains blown up and it’s super crazy the real estate out there so I honestly believe that’s an area that’s going to pick up is Holiday Valley and elville so somewhere like that and I do like the 30-year mortgages out there as well so definitely looking over that way right so sorry just to uh just just from my own understanding you’re saying narland lake is kind of like seasonal versus elville is more the Four Season uh it’s
(38:24) not so much the Four Seasons in elville but it’s just so much cheaper there that we can make so much money in the High season that you can we cash flow very well there where Niger popular too though right it is absolutely yeah it’s kind of like kind of like the wet Seasons that aren’t great like early spring and and yeah exactly but yeah no it it is almost a Four Season place where in St Catherine’s and Niger on the lake it’s definitely more of a spring summer early fall type place can you
(38:52) walk us through some numbers what you think your next investment property would be like in elville yeah at bille so we bought this one almost 3 years ago now and we bought that one for 250,000 if we were to buy that same property same property today they haven’t gone up like crazy so we could probably pick up a comparable property for about 300,000 which is pretty nice there is not a big inventory out there which is something to note and also they don’t allow airbnbs right downtown in the core so we’re kind of like in
(39:25) Farmville we’re about 7 Minutes drive away from the uh ski hills and from the downtown but it’s nice quick drive so yeah if we buy that for 300,000 probably it cost anywhere between 40 and 50,000 to get everything to get it set up to how we like our Airbnb standards I’m talking like very minor Renovations all the furniture all the bedding linens towels all that get everything set up for our maids so we’re probably looking about 350 all to get set up for a for a middle of the road Airbnb in a nicer
(40:04) area Okay so I’ve been looking at Blue Mountain properties and this is this is this sounds much more affordable it is much much more sense doesn’t it and I had him on my podcast we were running through those numbers and and he did this incredible games room and I think you were at like 70,000 a year Revenue before John and now you’re thinking like I’m I’m thinking that games room could put you up to 100 oh yeah we’ve had it live for maybe a month now and we’ve already seen the bookings they’ve gone through the roof
(40:39) in both volume and price we’ve raised our prices about 15 20% and people are not having an issue paying for it so you’ll easily surpass a 100 then I think so and like I said we bought this house for 250 like couple years ago and uh I think our mortgage rates locked in at 2.
(41:00) 9% so for how many more years 30 27 years 20 yeah 27 years like I you can’t beat that so don’t sell that it’s incredible no we won’t ever that’s great does this can I find this property online uh yeah um what would be the easiest if I gave you the address or sure like can I uh yeah let’s shout at your property get it fully booked for the rest of this I appreciate that yeah 6365 Somerville so s o m m e r v i l l e so Somerville Valley Road yeah we’re booked up pretty good the next month or two um but shout yeah shout out to Pink wall designs they’re
(41:47) the ones that did our our garage they did the designs for our garage and then me and my partners on the pro project went down there and did all the work and it’s been amazing uh do you have a website or or Instagram for this property I might just no we don’t we’ve always talked about doing it we just haven’t done it but I could always just send you the link maybe could text it to you that would be the easiest I know in didn’t SEO running to the US but this sounds pretty awesome cuz I literally just got back
(42:19) from a ski trip where there was no snow but for my my research via chat PT is my understanding is elville even though it’s Sou Falls it gets more snow than Toronto which is crazy absolutely high elevation right it’s like 1500 feet I think if here in Burlington we’re around 600 feet above sea level so I think that that has something to do with it yeah definitely irn I’m just sending it to you right now sorry took me a second to get there oh good no for the listener’s benefit um under again so
(42:51) holid Valley which is the main which is the biggest ski resort uh in the area elville like definitely yeah it’s it’s huge and where like I’m in St Catherine so it’s an it’s about an hour and a half to get there where for me to get to Blue Mountain it’s two and a half three hours so it just makes sense quick quick ride over the border and you’re there and yeah I might place next year hopefully you allow me to book you direct US versus on Airbnb and absolutely of course that sounds great
(43:24) because I was on their Instagram and they were they were open for skiing like the first or second week of December just nuts yeah a couple weeks so it’s really nice yeah versus they had no snow and Whistler over Christmas right yeah for whatever reason lots of snow there I should stop talking about this so I don’t oversell the place for the next holiday I know that’s what I always do I talk about things too much and then everybody goes and does it yeah yeah that’s it yeah like I said with the
(43:52) interest rates being higher it is definitely harder to cash flow there um but it it’s still doable still someone could go with a bit of cash or even like if they use a helck at least is variable and then it’ll come down as rates come down right and it’s interesting they have a lot more land out there too so I’ve always had it in the back of my head of doing some sort of developing out there because you can get quite a bit of land for pretty good prices out there yeah because I found your property
(44:17) on Zillow and you have a huge Garage on it yeah you should see the garage now look up the listing there I just looking at it right I just sent it to you on Instagram irn I couldn’t get your phone number quick enough so here irn I’m putting it in the chat uh here on the on the zoom there you go oh you found it on B&B perfect oh wow okay I’m just gonna share screen so so folks on the YouTube will be able to see it awesome so would the gold would this fit the golden rules yeah absolutely would fit the
(44:55) golden rules yeah the big thing is your plan a b and c like you know what what would you do this is my biggest test is like what would you do if your plan a didn’t work out obviously their plan a here is go in run a Hospitality you know unit and be positive cash flow to some degree I’m sure you guys had a wealth building and goal in there as well um now as far as what happens if if things don’t go well well your first pivot might be to sell um would you necessarily uh make money that way I don’t know if Market values have changed
(45:27) enough that you would but then you so you could do that you might lose a little bit not a great plan B your plan C could be to rent it out just to families uh or do some sort of midterm stays uh if if for some reason Airbnb say was outlawed and you know this is this is type of stuff that that we talk about in the book is you know kind of examining what could happen and what you would do in each scenario and this one works out really well right now now would it work out well on a monthly um a monthly basis I feel like John if you guys could strip
(45:57) out the utilities and uh just do a simple monthly rent you might be okay and uh from what I hear New York state is actually not bad to be a landlord in as long as you’re not in New York City um so it does look like you have some um some uh contingencies but one thing to note about you know sort of the plan a b and c and having contingencies is that um it it becomes more and more important to have great contingencies the less Rock Solid your plan a is right if if you know that plan a is like you know 5050 shot of working then you know your
(46:29) contingencies need to be that much better if you know that you’re Rock Solid on your plan a it doesn’t mean don’t have contingencies but you know maybe you have to be okay with an outcome where you might lose a little bit if the worst happens like if we took John back to before he lost everything and said hey if if [ __ ] hits the fan you’re gonna lose 200 Grand per house are you cool with that he probably would have said no and picked a different um a different type of investing but if he was making a million on every house he
(46:54) might have said yeah that’s no problem John do you know what would this rent for this host rent for long is a long-term rental I haven’t looked it up in about three years uh to be honest with you I haven’t looked since we actually bought the property yeah and elal is pretty established with all their short short-term rental bylaws and everything like that they just said pretty much stay out of the main village and do whatever you want on the outside and we pay our our fees and and we’re laughing but no I haven’t looked at
(47:22) long-term rentals there for a long time and then our last plan that Andrew didn’t say is basically we could just use it as a vacation home at the end of the day if we wanted to because the prices are so low there and we love going there it’s beautiful and in the summer and the winter we love skiing and we actually don’t use it very much because it’s always booked but if we had to use it as a vacation home we’d love that too that’s the whole being okay with the other outcome right not every outcome
(47:49) has to be a profitable one um if you’re okay with it for sure how does the low season here compared to niag on the lake it’s want to draw a comparison uh basically a long a long analogy for the listeners benefit most of our listeners will understand Nag on the lake it’s kind of like it’s a what what’s what’s the equivalent in BC for our BC listeners the Napa no sorry it’s a oh it’s escaping the the line region in a VC ohok okag Valley Ok sorry yeah investor here apologies I’m
(48:23) an never getting kid all right all right so yeah John how how does this compare would low season like how would low season compare uh between the between the two low Seasons because they’re different right elville is busy abolutely ski season is it it is yeah so January February March we’re absolutely slammed every weekend every week is pretty much booked at our absolute premium prices and then like I mentioned there’s a season or two that’s pretty slow March and April are a little bit slower as it’s pretty wet but as it
(48:53) dries out May June July August are absolutely crazy and then September October what I didn’t know is they do all these festivals out out in elville way they do all these Halloween festivals and Beer Fest uh cider Fest all these different things so fall is absolutely crazy there too and then November December a little bit slower again and then picks right up again for winter and then how the rent rates compare between the two markets for short-term rentals yeah uh trying to think it’s not as expensive it’s it’s quite a bit cheaper to stay in
(49:31) elville it is a lot cheaper yeah and again 3.95 a night Canadian what’s your Nar on the lake property yeah it’s very different like again like I haven’t done the cash on cash in a long time but our cash on cash is exponentially better in elville than it is in Niger on the lake for us but again we bought the elville property a year and a half before we have that 2.
(49:57) 9 % mortgage rate versus a 7% in Niar on the lake if we had both properties at the same time it’d probably be pretty comparable yeah sorry I don’t have actual numbers for you right now that’s okay but just H like back of a napkin it sounds like you could probably afford two elate V Properties for the price of your nager on the lake property in gener more cash flow AB oh yeah two and a half times probably even yeah for sure so I I can understand why that’s that be your next investment property all right same
(50:25) question for Andrew think about like so let’s let’s just you know everybody talks about the 1% rule or they used to so what what if he does if he does 110,000 divided by 12 so that’s 9166 a month on average what is that out of the say you’re in for what 300 John on it yeah that’s pretty accurate I don’t know if we’re gonna hit 110 that might be a little aggressive but okay say I’m off by a bit you’re 3% rule you’re 3% rule if you hit 110 so right some simple math I mean to put it in perspective at a
(51:01) 2.9% mortgage rate that’s a Grand Slam in my opinion for sure yeah yeah I think we just create a whole bunch of competition for John let’s just push the air date back a little bit until we all uh pick up one as well that’s it yeah exactly uh now both of you guys are big on Research as well and Andrew you I know you’re big into the recreational uh stuff as well uh the question that comes to top of my head is how do you do research on these things in aird air DNA always seems to come up um how do you
(51:30) guys how do you guys do your market research for recreational use properties I mean I can speak like we will’ll try air DNA wherever we can like I’ll buy the subscription to the area um I haven’t done a lot of it like I’m not like the Airbnb master or anything um you know the hospitality when we when we got into toore it was it was pretty much a decision based on what we knew of the area we knew of the the offerings it had the popularity that was growing um and then the limited Hotel fac facilities
(51:57) but air air DNA was pretty useless for the area uh just didn’t have enough base of knowledge on the area to really be that helpful for us so um you know I I feel like we probably uh in hindsight could have picked even better markets but we like that market it was familiar and uh you know I’ve spent a lot of time up there and then sorry you mentioned as recent purchase can you share like high level numbers like how how did it make sense like how did you how that how were you able to come to the decision it was
(52:28) a buy uh Neptunes we were pretty optimistic about what we could do from a um from a a General Revenue standpoint and then also the ability to add units so nine acres there’s only five five cottages on that right now but the zoning allows so the as of right zoning allows for um pretty much as many as we can fit as long as we uh we respect the setbacks so we’re just in the process of doing that the development on that uh profitability uh is there uh we’re working through um those numbers to kind of refine them right now and a lot of
(53:06) it’s going to going to depend on the feedback we get from the municipality in terms of what they’re willing to allow uh but initially we we were quite hopeful that we could make the existing houses profitable but with the uh sort of like the post lockdown era um rates have come down quite a bit and made what would have worked say during lockdowns would have been very profitable less or so so um we actually were a little surprised that we were lower than we expected for season but we also came in low like we or came in late like we
(53:39) didn’t get into the market until we closed in mid end of May of 2023 so we didn’t really have any sort of runup with our U platforms Airbnb any of that like we we inherited some bookings from the previous owner uh but uh you know we’re optimistic that this coming year will will be a heck of a lot better but we’re also not waiting for that to happen we’re going hard on the uh on the development play because the zoning is there waterfront property uh so we’re pretty optimistic about what we can do
(54:08) there it’s just about finding uh one specific model from a construction standpoint that works really well and has a lot of character and you know getting kind of a volume building discount can you kind of paint us a visual picture with because I know you’re very eloquent you you mentioned de like what do these properties look like are they Cottages are they Yurts or so what what’s there right now um looks like you know little Bungalow style Cottages um and then there’s the main house which is
(54:40) you know distinctly not really a cottage it’s it’s on the the road front the previous owner lived in that building but we’ve converted it into one of the uh airbnbs that one is right now available for year round but we just haven’t done what it needs yet to really make it appealing for year round use um and toin Mar’s just like frigid and cold and you know desolate in the winter for the most part uh although we’re looking to change that uh can’t change the weather but we can change what to do um
(55:06) so that’s what’s there right now but we’re looking into a number of different things including like an A-frame um Cottage that we can kind of rinse and repeat um but we’re going to keep it interesting whatever we do uh make it Instagram worthy that you know big thing and then of course kidf friendly uh we do get a lot of families up at that particular location uh it works really well for families so it’s a key of being able to access all the the nearby amenities and then having a heck of a lot of stuff for the kids to
(55:32) do so I know I’m a lot older than both of you so when I went to friend’s Cottages they were usually very very basic I remember going to a friend’s Cottage where there was no ceiling it was just you know a peak roof and then there was yeah there was there was walls between rooms but there was no ceiling so there was no complete separation between bedrooms that’s what I’m saying so you had to be quiet anyone who snored you could hear it cuz again there’s no complete separation uh but Andrew you’re
(56:03) talking about like these had to be Instagram worthy where I stay was not Instagram worthy it was it was you know was Bare Bones no way it was for season you know I mean all the all the all the cutlery plate wear was you know they someone bought it from like the 1970s garage sale you know I mean and that’s what these look like like a lot of these hous the the existing ones like they’re not super great construction um they’re very basic they’re not like Instagram worthy in any way um but that’s that
(56:31) blends in in that market right you can do fine with that um but if we want to do better than fine which is what I always aim for right you never just aim for average um because if you aim for excellent and you hit average then I guess maybe you’ll be okay um but we we always want to go U you know the best we can go within reason and that’s the expansion this isn’t for your like your IG game I imagine there’s returns involved incremental that’s the big thing like we we’re we’re taking what
(56:58) works at the camp and and applying that at the cottages and people come to our camp and they literally want to do yoga po poses in front of the tents and take photos of it and then share it on their Instagram they do they do reals they do you know of them by the fire and and it’s it’s like a memorable Instagram worthy experience and we just want to make sure that we create that same thing because that drives our own marketing for us at no cost right like I mean yeah we invest in the experience but they
(57:23) they advertise Us for free and when we’ve done like on our camp for instance we’ve done it two years in a row where we got 177,000 or more comments of people entering for a free stay at our uh at our facility uh basically just tag somebody you know to to enter yourself for for um a chance to win a free stay and and 177,000 plus each time we did it so they went you know pretty viral explore Ontario we did like a a promo with them and like jointly posted and did the giveaway and it it worked out well so this is what we’re trying to do
(57:55) uh with the Cottages as well I’m laughing because I follow John on Instagram and I know how when you said people literally do yog poses in front of the where they’re staying John John for anyone doesn’t know John John is well traveled and goes to places just as nice as Andrew’s cam Crown just a disclaimer that’s because my girlfriend is in social media she’s a social media manager and influencer so most of this is against my will but uh yeah I have a couple photos are you looking right now Rowan yeah oh
(58:29) my goodness that’s where my eyes are diverted oh boy is this on Courtney’s uh Instagram no it’s on John’s like there like yeah there’s literally John shirtless I’m staring at somewhere really nice yeah I think that one’s Croatia yeah we’ve been on a few fun trips oh boy yeah but if firefighting and real estate don’t work out for me I’m a great photographer and video graer now all of Courtney’s Instagram is pretty much me doing all the videos and photos so I’ve got a another career
(59:03) there waiting for me at least there’s one of you in Bali and I don’t know it’s some sort of hollowed out palm tree that you’re sitting in this talking about John doinker inst on Instagram see maybe I’ll break a thousand followers now thanks everyn we should definitely have a Courtney up to the camp I’m sure shirtless photos of you up there John I’m sure people would love it perfect we’ll set it up that’s hilarious everybody just listening to this is probably uh really scratching their head right now yeah
(59:42) sorry everybody well that’s why I’m telling them where to find John’s Instagram so they’re let in on the joke oh boy so yeah so I guess that’s oh interesting it must be a kpi for Andrew’s business like how many times can they find their campground on someone’s Instagram it really is it’s a funny thing like how do you how do you not just be like if you’re if you’re trying to think about what’s your competitive advantage that somebody can’t copy sure they can’t copy your location but if if
(1:00:09) we’re like a cottage Resort there’s plenty of other Cottages around so how do we become distinctly different and like momentum and first mover advantage in that space is important like if you have a reputation people know you by name or they they know of what you stand for and your cool experience your brand precedes you then um I think that your your longevity is is much more protected and you’re getting free advertising for it and free advertising which is huge right because then that drives demand then your equilibrium
(1:00:40) price per night goes up just like John’s experiencing right now on his Airbnb all of a sudden you got a games room demand is up and your price went up because of it and that’s you know that’s the key longterm because average results like if you look at average results in Ontario for just about anything it doesn’t really make that much sense to go on to go in on it right now uh so it’s it’s doing better than average or getting a better than average price you know or combination of all all the above that’s
(1:01:06) why I need to book John’s Place in elville before before this episode gets out I want to see there yeah downward dog in the garage perfect so I I’m apologize because I think we’ve gotten away a bit from the from the subject the topic of the book uh but I’m guessing that both both of your Investments fall in line with what the book teaches cash flow first you know PL what interesting the the people we interview so many of them you see like the fundamentals coming out in what they’ve done right and some of them maybe maybe
(1:01:40) you would say hey for me I wouldn’t feel comfortable with that like because everybody’s going to apply those fundamentals in their own way right and some people have a different risk tolerance which is fine um you know not not every investment is for every person so yeah for sure I mean that was the point and you know when when I remember and John and I were doing the interview where we were talking about the my chapters and like my fundamentals like uh you know there was a pretty deep discussion there we talked a lot about
(1:02:05) it and I remember you really loving that discussion John so I did absolutely yeah it’s all most of your big principles compiled into I don’t know 20 pages into the like the first 20 pages of the book is all of your the basics of real estate investing and how everybody should approach it in my mind but then after that it’s more of a buffet of how everybody built their wealth so learn the fundamentals from Andrew read the chapters from all the interviewees like find what strategies you like take what
(1:02:37) you like discard the rest and then really Attack One Avenue of real estate and you’ll have a pretty good base from there and this show is kind of like a buffet as well like this episode specifically because Andrew’s Andrew’s recreational properties are significant scale like Andrew you have several Partners on them active Partners on am I correct yeah in in different different different departments like one for like daily operations like yeah you have like an Acquisitions team well the the the four of us uh we all kind of we take on
(1:03:07) different things we do have a significant employee base that works the sites for us so we had up to 10 employees at at the height of the summer at any given time um and that should probably grow this year between two facilities so lots to do lots to grow lots to do lots to grow versus John is you know we’re talking about 300 Grand American that’s that’s a very reasonable bite for most GTA people people that live in the GTA to afford that for sure there is still affordable real estate out there you just have to pick and
(1:03:39) choose what strategy is going to work for it and it just so happens that the Airbnb strategy Works fantastic for it moving forward in the future like I’ve done a lot of flipping of homes so maybe the next step for me is going there buying a cheaper property and do doing some Renovations there kind of combine my two skills we’ll see what happens out there MH and then like for we talked about like risks and plans B A and C um I think we just touch on the fact that you know if if John can get like a large a large summer
(1:04:10) um business then you really reduce the risk you really improve your cash flow as well right like f we talked about Blue Mountain for example like when I was growing up nobody went to Blue Mountain in the summer like almost nobody now it’s nuts right right no actually no sorry people tell me it’s busier in the summer than it is in the winter which is mountain biking too right a big it’s uh it’s like The Bachelorette capital of the of uh of Ontario and don’t don’t don’t ask me how I found
(1:04:39) out I’ve been to a bachelor party there that’s a good point yeah not Bachelor but uh again like there’s probably there’s probably still upside for John as well with with climate change and like I said there was no snow and anywhere almost anywhere in Ontario in the ski area versus elville hat snow right so John still has upside his Investments more protected than other people’s Investments and again Lower entry point really reduces risk for sure and they’re investing a lot of money into the town of el right
(1:05:12) now so I do believe it’s going to get more and more built up and prices have started creeping up but I think it’s going to really again I don’t want to make a prediction or anything but I only see it becoming more lucrative tone out there well the US economy is strong as well with a strong economy comes people wanting to spend more Recreation definitely yeah so less likely needs for plans B and C for sure all right gentlemen I have to go to hop to another interview it’s funny enough is I have to
(1:05:43) go have to drive to Andrew’s office now uh any final words where can people find the book yeah so it’s going to be released on Amazon and we are going to be doing an audible version as well we haven’t quite got there yet but that is one of our big goals um like we were saying we don’t have our official release date yet but we expect it to be out in mid February but uh we’ll definitely be releasing it on both of our platforms Andrew and mine on Instagram to release when the book’s actually coming out but
(1:06:13) as of right now we don’t have a date for it and what’s it called so it’s called Uh real estate Titans tools tactics and wisdom for Canadian real estate wealth I love it so a little bit of a play on tools of the Titans we we had the inspiration from that so we wanted to sort of build that into the title love it love Tim Ferris love for our work we love tools of Titans uh then I had something else but I totally forgot all right gentlemen thanks very much for doing this yeah yeah thanks for thank you for watching if you want
(1:06:45) 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.com CA /youtube to register for our next class that link is also in the description as well I publish at least two to three videos a week here so subscribe if you want to keep learning from seasoned investors like myself and my guests and if you’re just starting out feel free to ask questions and comment below and I do the
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** Transcript Auto-Generated**

** Transcript Auto-Generated**

(00:00) welcome to the truth B real estate investing show my name is Erwin Szeto I am the host since 2016 we have well over 300 episodes of this show and guess what what topic keeps coming up in my DMs you are 17 listeners who’ve been dming me would like to hear from a litigator a lawyer that specializes in suing people to guest on my podcast you ask and you shall receive I had uh three in have introduced to three lawyers who are interested in coming on the show and interested in taking on clients to uh to sue borrow
(00:31) to repes well probably willing to represent both sides anyways so I’m working on a few and that’s just the State of Affairs right now in the in the community though I should note the problems are generally isolated in certain groups unlike rain and Rockstar hence we just had CEO of of REIN Patrick Francy on the show and co-founder of Rockstar Tom carazza on the show Tom was just on Nick was on about roughly about a year ago as our to celebrate our 300th episode respectfully I keep hearing news about Investors within the community
(01:03) declaring bankruptcy or bankruptcy protection where investment strategy where the investment strategy was on the challenging side including major Renovations like basement sweding or Garden sweding or trapx conversions or whatever in small towns with small economies some of these towns even lack the basics of real estate investing like a growing population like Tim Ontario where the pop population actually shrank according to stats Canada pop like real estate investing works best in growing areas so where areas have growing incomes because
(01:40) growing incomes typically attract more people to move into the area which pushes rents and prices up again to pick on Tim Ontario I’m sure it’s lovely over there home of sh Twain the population actually shrank uh I’ve included uh the um in in the show notes I’ve included a screen capture from stats Canada between 2016 2021 they actually shrank by a couple hundred people point is most of Ontario did not shrink most of BC did not shrink why would anyone consider investing in a place where people where the population
(02:14) is shrinking sadly I heard news that uh this earlier this week or last week that one of the past guests of the show had declared bankruptcy I don’t know any of the details other than she was sanctioned also by her local Securities Commission uh but I haven’t heard about anyong doing so I’ll leave names out and the episode will will at Le stay up until I have more information I do want to warn and remind our 17 listeners that this is a recession that we’re going through uh I don’t know if You’ want it
(02:42) seems like a recession real GDP has been declining for like six quarters the economic picture for Canada is not that great right now uh and partly due to historically High interest rates that we’re in right now so there were so should be no surprise that we’re seeing bankrupcy es among those who speculated or they risked excessively or they overleveraged there was tons of lessons from the 2008 financial crisis where those who went bankrupt could not make payments on their debt hence it would make sense to not over
(03:15) leverage which is kind of wild because private mortgagees seems to be all to rage in in certain circles versus back in my day oh listen to me I just turned 45 and I’m talking about back in my day um prior to I don’t know about 2018 most Jun Venture deals most OPM other people’s money deals were for Equity not for debt so at least with Equity yes you you give up half of the ownership but you don’t have interest payments that could potentially bankrupt you so anyways I do have an ask for you my
(03:52) 17 listeners if you do want to help people uh that you care about then please share the show with them in my newsletter we do vet guests on this show and I’ve repeated it many times on this show I do not lend money privately I’ve never found retail opportunities to lend to be worth the risk in the worst case scenario Visa Mastercard collect 26 to 29% interest on unsecured loans why would I accept 15 to 70% on a promisory note the investment in oneself in one’s own properties maintaining direct ownership and control still remain
(04:25) undefeated as the best investment in my experience and I have I have over 45 clients to prove that mult millionaire multi-millionaire clients to prove that boring investing works perfectly quite well Terry and I are headed to Savannah Georgia for our next stage of portfolio building if you have any vacation or real estate tips I am all ears onto this week’s show we have returning to the show my friend Seth Ferguson and I want to thank him for hosting the biggest real estate investment uh real estate invent of the Year May 24th to 26th the
(04:56) Friday is more of a 101 for beginners then the main course is the Saturday and Sunday and I’m excited to see all my friends there from the community there hopefully our 17 listeners and and will be there i’ love to see you uh please stop by say hi if you see me I’ll stand up like a sore of thumb I promise you that and also I’m excited to see Wolf of Wall Street Jordan bord speak I don’t know his full story outside of the Leonardo DiCaprio movie I know he did go to jail for doing awful awful things
(05:23) with people’s monies uh but I do know he’s got some great great lessons to share from his loss uh and how if he could do it all over again if he just played the long game and been more honest he would have been like like 10 times more successful hopefully he shares that story because I love to see it in person Robert hyck of dragon dead and Shark Tank is the other keynote speaker along with SE the secret guest Seth will reveal on this show uh Seth’s pretty awesome too uh I enjoy interviews done by Seth and I enjoy seeing Seth
(05:55) speak uh I don’t know if he mentions it on the on the show but he actually the feedback on Seth’s talks is usually among the highest among his guests uh so on today’s show Seth shares the journey to the third multif Family Conference how and why he chose these speakers how this year will be drastically different than the year’s past much uh new and improved if you will we’ll discuss why Seth from Milton Ontario owns no income properties in Canada and focuses his efforts exclusively on uh the southern
(06:23) USA along with some of the numbers so you may want to have a pen and pencil ready to take notes and uh yeah please enjoy the show also multifamily conference.com Toronto Convention Center is the location May 20 Friday May 24th to 26 yeah please enjoy the [Music] show hi Seth sorry what’s keeping you busy these days oh a whole lot a whole lot nothing uh well a whole lot of nothing really we got like conference coming we got real estate we got all sorts of stuff yeah yeah nothing e nothing like everything has a seven fig budget I don’t know what
(07:14) everyone calls that nothing oh man yeah it is uh yeah it’s just uh yeah just trying to fill out uh figure out how to fill up my time and uh you know take myself away from uh the family as much as possible no I’m just joking just crazy just crazy which is hilarious cuz you coached your child’s hockey team not busy enough yeah I I added on the coaching so we’re on the ice a whole bunch and uh yeah what else am I oh I’m writing a book like all this kind of stuff so you’re writing a book too oh yeah well the huge history
(07:45) nerd kind of stuff right so history of what oh uh yeah buildings what no no no no no so it’s uh I’m I’m writing uh I’m doing a book on the eth regimen of foot during war of 1812 so I’m basically covering uh the regiment from 1810 to 1816 uh so it’s a very it’s a very geeky non-fiction like historical type of study okay hang on refresh my memory it’s been a long time since grade 10 high school history what was the War of 1812 yeah so the War of 1812 uh you know it was fought between Great Britain and
(08:18) the US so it really stem like brost and tea party stuff well yeah well that was like more of the American Revolution so fast forward uh to you know 1810 1811 there was a lot of tension and terms of the uh you know just trade with uh France who Great Britain was at War uh with at the time and uh the impressment of American Sailors boarding us ships there was a whole lot of stuff uh so uh the US declared war in Great Britain and then there was a you know three year and a bit War fought over that only three years they lucky yeah well a lot of
(08:51) stuff happened with it but you look in Southwestern Ontario so you’ve got you know Fort Erie Fort Georgia niagar on the lake you’ve got Fort Niagra you know Lundy’s Lane everybody know shopping well that shopping center is part of it built over um a battlefield uh so that that was one of the bloodiest battles of the war that was fought there oh okay yeah so cuz you’re not busy enough exactly not busy enough wait how wait just to give folks some context like how how many people attended the multif
(09:20) Family Conference of uh last year yeah so last year we had 2500 people 2500 well 2500 and change yeah that’s a lot yeah it was a lot of people yeah and we’re going even bigger than here so it’s going to be insane wait you have a bigger room how you going to make this bigger you already had a humongous room we did but we added some more square feet so you you’ll appreciate this with knocked down a wall yeah so you’ll appreciate this with with your uh your conference so we have about 180,000 Square ft just on the main floor
(09:50) and then we have all the rooms underneath so we’re so you like double that essentially in terms of uh space so yeah we’re really big wait wait wait are you doing two states no no still the main stage uh but in terms of the room in terms of uh and how we configured it like we can we can definitely add another thousand people right right right yeah yeah what what’s okay so actually let’s revisit so uh like last year was the first year you did a whole Friday segment just for like 101 investment training yeah yeah for
(10:21) for sure yeah so uh for context in our first year we ran uh the Saturday Sunday uh so two days mainten stage it was great mhm and during just out of the lockdown yeah man that must been so stressful oh so stressful for so for for history lesson just a few years ago you were the first big conference out of out of Co we were yeah and the interesting thing so in terms of venue shopping everybody was kept asking me hey why did you run it in a hockey arena and just convert it well the truth is those guys were the only people who snuck Us in
(10:54) during the lockdowns all the other venues wouldn’t let us in the building but um the ca Center let snuck Us in and we did our site tours and all the planning even though everything was locked down and that’s the only reason we were able to get in there and and actually run the run the event um but what I found the first year was We attracted a you know a decent number of people who were who were new to apartment buildings so maybe they were doing fix and flaps or some other type of real estate and they didn’t
(11:21) understand apartment buildings so when you know first year we had Joe Fess i’ say now he’s at like 3 billion in AUM um when he was on stage yeah so his portfolio he manages a portfolio of 3 billion oh yeah insane right so but when he’s on stage and talking those newer people weren’t able to absorb as much as he was giving out because they they didn’t have that foundation so last year we added a Friday workshop for beginners so this is where you know we we’re going to hey just give you all the basic
(11:48) foundational stuff so that way when you know Grant Cardone last year or Alex Rodriguez was on stage talking about their portfolios you’d be able to follow along a lot better um and that was crazy we thought we’d have like 300 people we maxed out room capacity at 500 and something we couldn’t fit more people in uh so this year we’re splitting it so we have our beginner Workshop just the same uh and then we have an advanced investor Workshop where it’s more focused on scaling uh Team growth uh brand building
(12:16) at scale like lead gen at scale that that type of stuff so you know if you’re an experienced operator we have a full day workshop just for you on the Friday and then if you’re kind of new to apartment buildings full day workshop that’s going to bring you up to speed you can be like 10 steps ahead of everybody else uh By the time Saturday and Sunday rolls around I love how like how how the conference has evolved oh yeah to yeah because you yeah you you always need information you need data you do send up surveys and you need
(12:43) information on how to improve yeah and then to see you delivering on the improvements that’s so cool oh yeah well like that’s the thing with with uh with any any type of product right you you talk with people face to face you know your good friends will tell you the the truth like right off the bat but a lot of people they they won’t give you the the real things that you need to know about so that’s why we always survey and then you know we read through and I read through every single one like the team does too
(13:09) but like I I read make sure I read through each one and we actually take it to heart like it’s like oh okay well we have a decent group of people saying this well how can we change it to make it better and because I want to as we scale this conference like we’re scaling this to be the real estate event anybody goes to and uh to do that we have to be the best so we’re always looking to improve CU I thought the first conference was incredible yeah it it was it was good um but like it’s first time with anything
(13:39) right like like there’s always things that that you want to improve on and and as you scale so like a thousand people versus you know 3,000 people there there has to be changes behind the scenes in terms of the framework to to allow you to scale to that size so and that’s that’s what kind of what we’re focused on right now is hey how do we deliver the the the top uh the best in class experience but also be able to impact thousands and thousands of people at one time uh because you know when you start
(14:07) adding a lot of people uh there’s the logistical stuff you want to make sure everybody feels included that that type of stuff yeah more things can break and oh man yeah well last year um our registration system um crashed on the day of so you know like we pay so we pay a lot of money for our registration stuff like it’s not just like we’re not using event braer like we pay a lot of money for this stuff and you know I didn’t even notice oh yeah well speaking of things go wrong behind the scenes so our team was incredible
(14:41) but we had the one thing I wasn’t happy with was people came and we had like the lineup was was pretty big like we had a lot of people but the reason is our whole registration system was down and um the conversations after the fact were not good in terms of us for in in that system because hey like we paid you guys a lot of money to perform and your system did not perform at all and and so that just tweaks and and making sure now this year because it happened last year it’s like okay well we’re running with a
(15:10) different company but hey what happens if this crashes what’s our plan B and last year we didn’t have the plan B so now it’s just like adding in different systems and and operations to make sure everything’s Flawless you know again as an observer like I didn’t know it was down and I know the lineup was long but they got processed pretty quickly yeah yeah but but like this is like I’m a perfectionist right so which is hard when you’re when you’re dealing size of quantities yeah like it
(15:37) was great and like our event is an amazing event but I like that that’s my personality I always want to make it better the next year so it’s like okay like generally it was good but where can we nitpick things to really bring you up to the next level and and that’s what uh that’s what we are ruthlessly doing um so yeah like like this year we we’ll we’ll have some changes in terms of how things run but it’s just to make things better right right yeah for sure and talking about trying to make better you
(16:04) had Mr 10x last time we did yeah you had M you had the Alex Rodriguez who I think uh I’m sure many people underestimated him myself included because I didn’t know his story and his and everything yeah yeah well actually let’s touch on that for a second because I got so much um so many messages on Facebook Instagram or emails about hey why are you bringing Alex like he’s just a baseball guy it’s like oh I got better certain people were like oh didn’t he date he used to date JLo right that’s how they knew him so they didn’t
(16:39) know he was a baseball player well well even Darcy was like who cares about A-Rod I just wanted to see JLo and uh but but who’s married to Ben Affleck now I think I think I don’t follow these things but yeah I think yeah I’m not I’m not sure but but yeah so but I was so excited to have him on stage because I knew what he was doing like with A-Rod Corp like he’s a sharp guy he knows what he’s doing he has a great team he has a great portfolio and so on stage I thought like my personal I thought he
(17:08) knocked it out of the park to use a baseball ter right like he was great and a lot of people came up to me after or shot me messages being like hey like I had no idea yeah no idea um and and that was you know I I was really excited for that cuz I could just kind of tell everybody kind of knows A-Rod but they didn’t really understand who he was as a business person he was playing in the miners and he got his first duplex so like he’s been in the investing game for a long time and I I think he surprised a
(17:37) lot of people which is great I love that everybody knows Grant Cardone but in terms of A-Rod like he was he was great yeah yeah actually had some Insider information I just my coach shared with me how how she knew many people and who who knew a rod already knew he was legit yeah so I was actually got the benefit of going in knowing he was incredibly legit yeah yeah and now again talking about passing trying to beat last year which is tough when you have Grant yeah you have three speakers coming up for this year yeah we got three big guns
(18:08) coming out yeah um and so we’ve announced well we’ve announced two should use the word guns because they are Americans three we have three headline speakers yeah yeah yeah so Grant and Alex were exceptional um and uh one of the things we wanted to make sure that we’re doing is keeping it fresh right like a lot of people said hey bring Grant back you know maybe we we’ll look at it next year but uh we want to keep it fresh and deliver different perspectives um and I think the lineup we have this year is going to
(18:36) be a lot of fun um so we’ve got uh Robert herc you know longtime uh you know Canadian uh immigrant uh longtime um you know star on drag stad Shark Tank he’s now executive producer of Shark Tank um and he’s seen a lot of pitches so uh you know one of the things with with our audience is a lot of people want to learn how they can improve their Capital raising skills so Kevin ol was our first Speaker the first year he was awesome he was great he was great um did the audience like him oh yeah we really
(19:09) enjoyed him yeah yeah Kevin scored really really well and this is the thing with like marketing like we get hate mail all the time uh dep no matter who we like bring in as a speaker we got hate about Kevin oier we got hate about Grant Cardone we got hate about uh A-Rod and this year we’re getting hate to so it doesn’t really matter right but but we want to keep it fresh so Robert can bring that perspective um in terms of the capital raising the scaling the team um that kind of thing um and then we’ve
(19:36) got the Wolf of Wall Street himself Jordan bfor uh coming in and in terms of like running you know like we run sales teams and stuff in terms of tone and how you can present opportunities and stuff I don’t think there’s a better guy uh so I I’m really looking forward to uh Jordan and he and we’ve got him set up so he’s going to be running a workshop just for our VIP so he’s on the main stage but he’s run a workshop just for our VIP VIP attendees in terms of how they can structure their Capital raising
(20:05) pitches and their presentations and and how they can uh just interact and Converse with possible investors uh better I think that’s going to be worth the price of admission in itself so so really excited because uh for anyone who’s followed Jordan Belford’s career they know like if he just stayed clean yes not in his maybe both both in his substance abuse in his business yeah for sure like he he had um what Steve Madden shoes lined up oh yeah yeah like he could have ipoed that yeah 100% And he I
(20:38) don’t know I don’t know how many hundreds of millions he’d be worth oh huge and and you just look at the the sales team he built he was able to take people who were just regular lay people like lay men and bring them in teach them how to sell and they were incredibly successful you know yeah things went off the rails 100% right um and yeah like he did his time but in like if you look past it and look at hey like what’s he actually saying like what what value can he bring like we’ve learned so much in terms of how we run
(21:10) our sales team from from um from what what he’s done so I I’m really excited to have him come in for sure and plus he’s got a couple good stories too so are you going to ask the cliche is he going to do the cliche uh s me this pen no no no is that a l is he sick of it well like yeah like like we we’re going to take it from to a totally different like place with it and yeah what well well say Inn so if somebody asks you sell me this pen what’s the right answerin sell me this pen what what’s
(21:41) the right answer there give me you have a pen I don’t have a pen supply and demand yeah exactly which I stole from the movie well well the the best answer is well how long have you been in the market for a pen yeah yeah right so like you go into Discovery so I Ed up with a question do you have a pen 100% I got this 100% like so many people are like oh yeah this Pen’s amazing blah blah you don’t even know cell yeah you don’t even know if the person wants the pen or not yeah yeah that’s super cool
(22:15) um I think I think the lesson out of Jordan B for was is at least to me is that if you just if you just keep it clean and play the long game yep you’ll be you’ll be like he like I’m I’m a guy I I own Steve Madden shoes I like the product and he could have taken that he could have been the company that took it public 100% Y and if he kept some stock like I don’t even know how many hundreds of millions he’d be worth 100% And and like you just look at you know in in terms of the even just
(22:44) the sales training side like he has so much to offer in terms of how you structure or pitch how tone and how you can influence people and all that kind of stuff like sale like you’re selling every day like what if you go on a date you’re selling if you talk with your kids you’re selling if you talk with your spouse you’re selling you talk with a prospect you’re selling uh so that goes such a long way he sold people on his script in his book oh yeah 100% 100% so like like there’s I’m I’m really
(23:12) excited uh not only have Robert coming but also Jordan I think they’re going to be fantastic and then the third speaker at this time we have’t announced but by the time this comes out so we’ve got uh Grant’s wife Elena Cardone coming and uh you know she she is bringing so much to the conference this year because you know most people don’t know this grant touched on it a little bit last year in the VIP room um but Elena was the person who pushed them to go big with everything and start raising money uh so
(23:40) we’re getting the the brains behind the operation so to speak and um she brings so much in terms of how couples can work together to build an Empire um and what and her roles in in the company and what she’s doing so really excited to have a really strong woman on stage and uh and yeah so she she is the third yeah I saw her speak at 10x conference back in Miami and she’s excellent and I think she has an important story to share yeah um like not every entrepreneur partner in the couple needs to be the person
(24:10) that’s out in front the face yeah right they’re like every you you agreed to we talk about loss but for example the gentleman who have the that that portfolio of Northern Ontario that’s failing is didn’t have anyone watching the business business closely to make sure everything was like running properly yeah yeah that and that’s so important and and quite honestly like the person behind the scenes is I I you could argue more important than the face right like you know even with our organization I’m the
(24:39) face but you know we you need to have really solid people in the background making sure that that person’s supported and they have everything they need right yeah like Batman has the Oracle like you know every everyone needs that person in the chair who spends most of their time in the chair to make sure everything’s okay yeah 100% so I think it’s going to be a really unique person perspective um that Elena is bring and you you can notice like each one of our Keynotes this year is has something different
(25:05) like a different spin or a different angle um because you know we want to make sure people are getting uh not just like the same message all the all the way through like everybody has something unique they can offer and depending on where you’re at in terms of scaling your portfolio or where you’re at um you can get something else uh from everybody so want to touch on your own your own investment Journey yeah this is I forget how many times you’ve been on the show now so anyone was U I don’t want to
(25:31) spend too much time on stuff you’ve already spoken about for example I believe the first episode we did together was I think like 2019 it was a while ago it was a while ago and the title was worst joint venture ever so folks wanted to see listen to that um yeah just just could you just give us like the 30 second version of yeah yeah so uh went through a a messy uh separation and basically lost uh everything and uh was the shittiest time of my life and uh started from complete scratch so you know we were kind of
(26:04) talking off air about um you know challenges when people have and how it actually like helps them perform better 100% so I kind of went through the ringer and uh a lot of really bad stuff happened but I survived out the other side and uh I would not be doing what I’m doing today if that hadn’t have happened had hadn’t have happened so in one way it was It was kind of good uh because it uh gave me a different perspective perspective on um on life and how things work and um quite I I tell everybody now they’re like oh that
(26:35) like aren’t you scared like running the conference and doing all this big stuff I’m like I really don’t give a anymore because if I survive that I can survive basically anything at this point right yeah and so to get some more context in history you had a portfolio of properties inario yeah yeah so so we did like lots of like we were doing like residential stuff um and then that kind of all blow up so listen to that podcast for all the the nitt nitty-gritty details um but yeah it was just a bad situation and uh that was uh liquidated
(27:08) and then uh basically started from square one so when you start from square one yeah I noticed you didn’t do anything else in Canada in terms of investing yeah yeah can you can you elaborate on the decision why not to do Ontario and I have all these Alberta Bulls tell me they why you to do Alberta yeah for sure so when when when that happened I already knew I wanted to do multif family and apartment buildings that that’s really where I was where they have those in Canada you know sth I don’t know if
(27:40) anyone told you they do but I I think and this is kind of what I found and you know when we’re raising cap like interest little bit of um a tangent here but when we’re raising money for a deal we found that an American investor will make a decision quicker and invest more money a Canadian so like we yeah we’ve got and even like even with the conference like we track all this stuff a Canadian will take usually two weeks longer from becoming a lead before they purchase than an American so like very
(28:14) different um outlooks and um you know personalities like obviously it’s a generality but um but that that’s that’s on on the whole it’s not the first I heard generally Americans are more entrepreneurial they more risks 100% including their government will take more risks as well 100% so you know when I started looking for people to help me and teach me the apartment building investing side um I went I went to the states um a couple reasons number one I I didn’t really know or I I didn’t know
(28:44) of any larger person um in Canada doing it at at a large scale obviously there are people doing it but I didn’t know at the time um and a lot of them are buying in the states anyway yeah exactly exactly and I remember I won’t mention but I I bought this like apartment building investing course uh from a very well-known organization and I got a binder in the mail so it was this huge thick binder and it it was like I think 1,500 bucks or something like that and I was like are you kidding me I just paid
(29:14) ,500 bucks for this binder I was like there’s got to be a better way so um I I found a couple uh people who were doing it at scale in the US and uh I never really looked back so all of the the kind of the training stuff the the side kind of scoop I I’ve got was always us focused and to me it makes a lot of sense you look at Canada versus the us we are a drop in the bucket just population size GDP like there is no comparison a and um you know so so if you’re looking to uh you know build a sizable portfolio and you know raise a
(29:51) lot of capital yeah you can do it in Canada but like we just want to go to the bigger market and it made a lot of sense and and just add to that making more sense like you mentioned GDP so then I’ll just go further like GDP per capita oh for sure meaning per person 100% And then you add to that each American generally costs less than a Canadian as well yes for example uh you probably like what is the minimum wage for Florida so for example minimum wage in Texas is 725 an hour very different from Ontario which is about $10 versus
(30:21) what is in Ontario 16 oh maybe even 16 and change I’m so yeah end of the day well yeah so a minimum wage a Canadian is in Ontario is 60% more costs more oh 100% like our labor is more expensive our we can argue that our government policy makes the cost of living more expensive like we can that’s a totally different episode but yeah 100% and other add to that like I think most people are familiar with um where immigration comes from in in the States and it’s generally it’s generally lower end yeah and while people I’m not going
(30:53) to get political yeah let’s just straight talk straight economics an economy Ben benefits from lower end like so for example to Canada our our our our skill level is quite ubiquitous it’s quite even we don’t have that lower end y but we need we need it though we need it right I don’t need someone with a University degree to make my burger yeah right I you know someone who has that who’s worth 725 an hour should have that job yep right and equivalent would be $10 an hour in here someone should have
(31:25) that job and then the economy all moves better yeah 100% % and the Americans are full have plenty of that oh 100% And and then you just like this is the thing that really like when you when you uh when you’re looking for a visual pull up a list of all the Canadian major metros with over a million people yeah it’s a short list yeah you especially if it’s two yeah 100% there only three there’s only three cities which is insane then you look at uh pull up the US list major metros over a million people insane and
(31:56) and and that just shows you how small we really are um so and you look at and it’s not just like in real estate in business like as soon as you can and if a Canadian company can enter the US market the potential is so much greater let’s just give a quick example we were talking before we’re recording yeah so I want a question to The Listener to our 17 listeners which city do you think is bigger in terms of like Greater Vancouver Greater Vancouver I’m going to talk to the camera okay all right which
(32:23) city is bigger Greater Vancouver or greater Tampa Bay Florida put it in the chat before we give the answer put it in put it in so for the listener I want you to like think about it like so which one do you think is bigger but the fact that I’m asking I’m pretty sure I’m going to guess which one’s bigger yeah so what remind me what was Tampa what was Tampa again Tampa is what 2.
(32:43) 3 million I think oh no 3.2 I think you said 3.2 before recording before recording and then I CU I think I messed you up cuz uh cuz Vancouver is about 2.7 that that’s right yeah and then uh I I me uh and then DFW was 7.6 Lord is that big yeah 7.6 for the for the MSA yeah so that that’s Dallas Fort Worth and Arlington that’s see that’s big than great Toronto area oh huge right so like that’s that’s just like that’s just one city yeah our economic capital yeah of Canada is smaller than Dallas Fort Worth Texas
(33:16) yeah and and you look at um and then you want compare GDP it’s not but you look at just the State of Florida right so it’s it’s insane so you know with us and obviously you know we have big aspirations right and and so um for for all of those reasons it makes more sense for us to help Canadians move their Capital to the States because there’s a a large interest in that and then if your priority is to maximize your return reduce your risk it makes a lot of sense oh for sure like like we’re
(33:47) talking about real estate yeah why not invest in the largest capitalistic Juggernaut there is in the world the USA right yeah and then like you I’ve talked about this many times like Texas is they have like I forget like they’re bringing like 6,000 jobs on just in record ship manufacturing might be eight and just and so the amount of job growth just in Texas alone is just ridiculous yeah yeah and and and you look at those types of States you know people are kind of fleeing the coast uh because of you know
(34:14) policy and affordability so if you have a family and natural disasters yeah and and natural disasters yeah so you know like like you’re looking for you’re looking for work you’re looking for an affordable place to raise a family you’re looking for you know a good community um yeah so like there’s so much opportunity um in those States and you know we look at Canada then we can talk about you know the whole rent control thing so in Ontario BC like you know you’ve got provincewide rent control in
(34:43) the states you’ve got rent control in California but rent control in California isn’t as onerous as rent control in Ontario really every everybody complains about rent control in California yeah well they don’t know that in Ontario it’s it’s even worse right so um you know just on the the what is rank control in California um so rank control in California um I don’t want to misspeak here but I’m pretty sure it is tied uh to some type of index um you know I’m going to say something wrong here because we don’t
(35:18) even look in California but but in terms of like the comparison when I went through step by step it’s like oh um like Ontario um is a lot more onerous in terms of like the restrictions and everything so I don’t want to misspeak but that’s okay yeah for sure cuz rent control is also a broad term just like rental licensing it’s it’s it’s every every municipality does it differently for example there’s one state in this in the US I don’t remember the name of it but the rent control is you may not go
(35:43) over 10% rent increase exactly which is okay that’s pretty good yeah yeah so and then then we can look at the history of rent control right so we have to go all the way back to World War I when rank control was instituted on a massive scale but that was because we were re bu Europe was rebuilding from World War I like it was destroyed we have rent control government steps in and government stepped in in terms of many different uh produce Industries and everything too um but that’s really where it started um and then it’s a good
(36:13) talking point with in the elections it sounds good but if you look like there’s a number of studies that show that I’ve looked at it a a market without rent control rents are actually more affordable and you have a better product uh because you have more incentive for people to to reinvest so yeah we can go on that tangent forever uh I I want to go more tactical cuz you’re actually living it CU your your properties in the states I imagine because you’re talking about Sun Belt yeah for sure Sun Bel is
(36:40) from what I’m reading on Twitter uh shout out Jordan Jordan Parson sorry uh shout out Jason Parson’s on Twitter who who’s in the space his tweets are excellent there there wonderful reports he puts out there from what I’m reading is that there’s because um just like the pendulum swings when when the Sun Belt stat got really hot a lot of Builder developers were building building these properties whatnot and so they right now they’re at a point of overbuilt yep and so rents have come down and there’s no rent control but I
(37:10) just said rents have come down yeah the the market takes care of itself like like that and and yeah so depending you know you look at places like Orlando you’ve got over supply for sure um but you know the market that’s the E and flow yeah um and and that’s what creates opportunities um no matter which state of the cycle you’re in like there’s opportunity as long as you’re in it for the long the long term right yeah so can you share What markets are focused in and why yeah so we’re we are really hot
(37:38) on Tampa right like we are trying so hard um to to get into Tampa uh right now uh we feel there’s a lot of Runway left we like the markets um we we like we like the area we like what’s going on in terms of the economy we we like the policy in place um so we are fighting tooth and nail um to get to Tampa so we we should have a uh an announcement to make pretty soon on that but like we are working so hard uh to get to get in there imagine you’re not the only ones like Tampa Tampa’s been growing like
(38:10) crazy oh for for sure yeah there there is a a fair amount of competition for sure like it’s like any market right any any Market that has uh a lot of Runway left like you’re going to be competing there uh so Paul our Acquisitions director he’s been working really hard um and you know he’s he looks at like every deal there is um also like we we we’ll look at at a number of other different markets in around Florida um but yeah we we are trying so hard to get our first one in Tampa what what kind of property are you
(38:41) looking for in Tampa yeah so our buy box is uh to Value ad Class B type of asset um and we’ll look at anything from 100 units to about 300 units uh give or take um and uh and that that’s a range where we feel really confident in so we’re able to do the there uh that that’s within our skill sets and uh we’re looking for that traditional value ad so we’re we can come in uh depending on some of the deals uh that we’ve been looking at um it’s either an operational play or there’s a fiscal Improvement
(39:11) side oftentimes the combination of uh of both but we’re we’re looking for a place where we can acquire the asset you know add some give something back to the to the community uh make it better um and and improve it for everybody so uh not only for us and our investors but also the people living there right we’re giving them safer better housing can you elaborate what a b-class property is oh for for sure so when we’re talking about uh commercial real estate and in multif family specifically you’ll hear all
(39:41) sorts of um you know ways of describing things but generally speaking you’ll have uh class ablea which is going to be the best location in a major Metropolitan uh City Center like the best location there ever is that that’s the class ablea brand new asset then you have a class A asset generally you’re going to be within 10 years old uh topof thee line amenities uh you know everything’s like topnotch like it’s a great location great building top quality you can probably attract doctors and lawyers as for sure yeah yeah you
(40:14) that that’s that’s you’re going to have your higher income people there that’s where depending on the market you’ll have like your granite countertops like really nice stuff Class B is going to be you know let’s call it you know that 20 year old year old type of um type of range uh it used to be a Class A but now it’s just older uh you won’t have the same modern amenities because it’s you know 20 years removed uh but still solid property good location it’s just a little bit older you have a little bit
(40:40) of deferred maintenance there that you have to go in and that’s that’s really what we’re looking for that good quality asset where we can come in and proof it bring it up maybe it’s got the last time the kitchens were done was you know 2005 so we can come in and uh and improve it do the kitchen Rena you know change Landscaping bring it back uh to life that type of thing then you have class C and class D Class C you have more deferred maintenance like you can tell when you see it it’s like ah it needs
(41:08) some love uh amenities are very few because it is older um and then class D like you’ve got it’s it’s really rough at that point yeah so so those are the different classes so we really like to live in that class b space you know good quality assets uh stable assets we’re not acquiring a place where there’s like 20% occupancy where you have to go in with a bulletproof vest or anything like that but uh but yeah good quality assets and good locations something went very wrong if you’re only at 20% vacas something is
(41:41) very wrong like City housing were or like sometimes you have a flyers rip through like a bunch of buildings and stuff and roof is leaked or massive infestation of some sort yeah and and those are heavy lifts and that that’s that’s not Power by box at all like there’s people who will take those on and uh that’s all the power to them but that’s not kind of what we’re box is the corporate lingo for this these are our field posts buy within it yeah for sure because when we’re uh meeting with um a
(42:13) new potential relationship in terms of on the on the brokerage side or a lender they usually ask hey what’s your buy box basically they’re saying hey what are you looking for and to talk like a pro you need to know the lingo yeah yeah you kind of throw the lingo around but yeah it’s just uh looking for that 100 to 300 unit range Class B traditional value ad that that’s really our uh bread and butter any amenities you’re adding and and ke you share what they are would be yeah yeah right so um like adding a gym
(42:41) perfect right because especially when you have markets where you have a younger demographic moving in you know people work out now like like you need a gym and that one treadmill in the corner doesn’t cut it so uh at a gym uh you can uh replace you know tennis courts are you know kind of P so take out the tennis court put pickle ball yeah pickle ball yeah pickle ball uh I’m just joking is that really a thing well actually there have been some properties um where they have uh they’ve put the pickle ball
(43:13) on the tennis court so nobody plays tennis anymore so that that is true um and then you know you can take out those tennis courts uh you can add a playround if you have lots of families on site or you can add a barbecue pit you know I love the barbecue like I love barbecue so do you I I see all the briskets you do so well especially if you’re in Texas or Florida florians love barbecue too they do I so I’m I’m heading to Miami on Thursday and we’re hitting up a new barbecue place for the entire trip so um
(43:42) yeah so B basically you want to look at your tenant profile and really understand hey like what do these people need like what’s going to attract them and if it’s not a tennis court well what types of people are living here are they f are their families well yeah well throw in a splash pad throw in thrown a playground you know make it a community people want to live um that type of stuff yeah yeah I like the barbecue I enjoy it and also all my guests love it oh for sure Barbecue Pit so you know let’s say you know you have a younger
(44:12) demographic um you know like in their late 20s and 30s you you got some families but throw in a couple barbecue pits make it really nice add some pergolas some seating around the family can come down you can cook on the grill you can have a little party it’s great for Community appreciation nights so you can bring in a couple chefs they’ll cook food for all the residents there like you can make it good right yeah uh is there more to a buy box like is there a price per unit is there a cap rate you want to get in at then what you want to
(44:44) uh your arv all those sort of things yeah good good question so we don’t really look at cap rate um that’s not really we’re going to offend some people well yeah all about the C oh man so and generally so all the most I’ve been very fortunate in that I’ve been able to build relationships with some very successful uh multif family investors are very very successful and I don’t ever hear them talk about cap rate so there must be something to that uh they’re looking for hey how can I create
(45:16) value in the deal that’s what they’re focus on and what can I control because we can’t control interest rates we can’t control government policy but what you can control is what you buy the property at what Renovations you do when you do the renovations like your business plan your marketing you can control that stuff so that’s what they focus on so you know price per unit again like that’s so subjective because you know price per unit you could have uh you know a B+ versus a B minus asset the price per
(45:47) unit is going to be different so you have to look at a number of different metrics right you have to look at your irr for the deal internal rate of return uh you have to look at your cash on cash cuz that’s going to give your you your annual uh return and then you want to look at your Equity multiples like we attack it from price per square foot we look at you attack it from all sorts of different ways because each metric will give you a tell you the same story in a different way yes um so yeah we we don’t
(46:14) look at cap like need SLE data points to make a decision 100% it’s not like oh yeah we we only buy at a six cap well but why though like like what what does that mean um so yeah so B basically what we’re looking for is we’re looking for a good quality asset and a good location maybe there’s been some mismanagement maybe it’s part of a greater portfolio and it wasn’t getting the love and attention it needed you know maybe uh maybe we see an angle where we can improve the marketing maybe we see a
(46:44) trend in the area where you know that asset hasn’t caught on to it so hey if we make these changes we can attract this huge demographic that’s now moving in so it’s really like any business like what’s your SWAT analysis like what can offer um and what what changes can you make in the deal that other people aren’t necessarily seeing all right slat strengths weaknesses opportunities uh threats yeah 100% right so and you know if you’re acquiring an asset and across the street is a brand new you know 450
(47:14) unit class doublea asset and you’re you’re looking to take your B+ asset to an a you know that’s going to be a huge threat so you probably don’t want to do that but if you have a class you know a Class A ass across the street and you’re in that class B totally different markets and you’ll actually get business from the class a asset when you when they price people out they’ll come over so you have to you have to look at everything together so it’s hard to say yeah you know I only buy at a eight cap
(47:43) well like that’s not a I would argue that’s not a sophisticated way of looking at real estate like you’re pigeon holding yourself on one metric and and you’re missing out on what’s really going on right yeah and we talk about loss we talk about lost before recording during this as well like for example the folks who are you know losing their shirts up in Northern Ontario like I don’t think they probably understood their irr nor nor their internal rate of return nor their cash on cash yeah because if you’re sitting
(48:12) vacant there ain’t no cash on cash no there a negative cash on cash yeah and like even irr so like a lot of investors um on the lp side so you know passive investors you know one of the first questions they’ll ask is hey like what’s the irr what’s the Equity multiple in the deal but like irr tells such an important story because it tells you the time value of money for like you know how the money’s locked into the deal right so you know I I always use examples where hey like here’s deal a
(48:40) you get x amount per year or he’s here’s deal B you get a slightly larger Chunk in year two and then you make a little bit less money while the irr is actually higher because you have more Capital being returned sooner and then there’s opportunity costs you can invest in different opportunities and all that kind of stuff so um yeah so whenever we’re speaking with people it you have to tell the whole story so you’re looking at many many different things I hope all investors appreciate irr
(49:05) internal rate return is incredibly important when whenever you’re going to whenever your investment plan has includes a refinance 100% some return of capital 100% because like a straight return on investment calculation do you are you doing the return on calculation based on today or after refinance yeah well and and that’s that’s the thing too so what we found is cuz as markets get tighter um like our rule of thumb is we never never never promise a refinance in a deal ever because it may or may not
(49:36) happen we just saw this the past couple years so if your deal uh like lives or dies based on a refinance that’s not a good deal right because that refi may not be happening so when you’re looking at your irr you want to look at irr without the refi and then you have your best case scenario hey if we do refinancing your three this is what your irr will look at at that point uh but you never never never want to bank on having the refi refinance cuz it it may not happen MH yeah so we’re talking a lot about us investing right now and you
(50:08) actually have data to back that up like for example before we’re recording you mentioned uh 70% of your audience wants to hear about us investing oh yeah yeah with the conference huge huge appetite huge appetite and and this is majority of Canadians you’re surveying as well yeah yeah yeah yeah that’s how Canadian audience so I’ll apologize I know that I know this is a Canadian real estate show but a like 90% of my audience wants to hear about us investing and you have 70% want to hear about us investing huge
(50:36) topic so apologies we’re not talking about Canada right now we’re talking about Canadians investing in the US yeah and you look at you know content we produce and everything every time we talk about us investing for Canadians it pops every single time so there is a huge demand for for that knowledge and quite honestly I I think it’s a number of things number one obviously the lies and all that kind of stuff but also the um there’s not a lot if you’re a Canadian looking to invest in the US
(51:04) there’s not a a lot of good material there to help you because 99.9% of stuff is made for a US audience so if you’re Canadian it NE it doesn’t necessarily line up with what’s best for a Canadian investing in the US so if we’re able to produce top quality content like you know you do a lot of stuff like we pump out a lot of stuff too if we’re able to deliver quality content geared towards Canadians I I think that’s a a missing link or a missing piece right now in the marketplace and I we mentioned GDP
(51:36) earlier the GDP of Texas is actually very close to the country of Canada oh yeah pretty much and that’s one state that’s is one state the population of Texas is around 30 million yeah and the population of Canada is almost 40 million it’s over 40 million now but Bas the GDP numbers are a little bit older so I’m trying to match up population yeah so again the the Americans have like 25% less population than us in the same GDP state of Texas alone yeah it’s like it’s insane like the research all
(52:07) points to One Direction really oh 100% 100% the only thing the only biggest benefit we have is the biggest benefit to a Canadian investor especially Ontario or BC is that we can’t build for whatever reason we can’t build fast enough so then a for that restricts Supply artificially restricts Supply hence we have uh you have a demine supply balance which drives prices up for for sure and you know there we can go even deeper in that but like it’s not like the the housing crisis isn’t just reserved for Canadians like there’s a
(52:39) housing CR like you look in the states like there are markets where it’s hard to get a home like it is a challenge it’s a North American challenge right and Grant’s Grant’s been Grant in his uh his 2024 review was like he said like we’re really short on building oh huge and this year’s and this year is just just we have we have Americans have similar problems that we do because rates are high they’re not investing they’re not building Y and this will C this will bite them on the butt oh for
(53:03) for sure like we have such a housing deficit right now in ter in terms of like starts that have to happen and and this is a problem that’s going to be around for the next hundred years like it’s not going away it’s not going to get better either because the Americans have trouble Staffing builds as well no different than us yep yeah we need trades we need qual we need competent people who who are trained 100% yeah but the Americans have an advantage in recruiting trades over us well they do 100% 100% um and like that’s and we can
(53:32) talk about like how um how governments are angling in terms of who they want to attract and everything but uh yeah for sure so I want to bring it I know you’re you know you’re big and fancy buying 100 300 units at a time I want to we have a lot of young listeners like who are like you know under even under age of 30 nice so say you were 25 years old what would what would be the first property you buy oh man yeah so if I could go in a time machine yeah I would erase the first like 10 years of me in real estate um
(54:02) and so if I could go back and here’s Seth like reading books trying to learn about real estate investing I would slap myself a little bit and say don’t worry about a house buy an apartment building like first first deal and like this is a little bit like controversial but a lot of people say oh well I want to start with something small because it’s safer I argue the bigger deal is safer than the smaller one so hear me out if if you’re listening right now and you’re like oh that’s crazy give me a minute to
(54:30) explain so what a lot of people do they’ll buy their first investment property maybe it’s a single family home a duplex uh they have to qualify for the loan on their own right because it’s based on their income the bank doesn’t really care about the income produced by the property the cash flow is going to be so tight number one it doesn’t give you much wiggle room but also um like you’re not able to afford Real Property Management because you have to self-manage because the property doesn’t
(54:54) produce enough uh cash flow and there’s a good chance you’re screwed up exactly right so so right off and then if like a duplex one tenant moves out there goes 50% of your Revenue yeah so for all those reasons like yeah sure the purchase price is smaller but you’re doing a loan you have no idea what you’re doing you’re going to mess up and then you have no like wiggle room like you’re screwed if you make a mistake like I I remember with one duplex you know we had an $88,000 repair bill
(55:20) because of the drain out to the Sewer the a tree route like busted through it 8 Grand that was like three years of cash flow on this property gone yeah right now you go on an apartment building it doesn’t have to be huge maybe it’s a 25 unit building much stronger cash flow different types of debt you can get on there right you’re able to have Professional Management because there’s enough money to pay the person so even if you’re new you have a manager who’s probably managed 10,000 units they can
(55:47) guide you and help you out and plus because the deal is bigger there’s probably enough meet on bone to partner with somebody who’s done at least a couple deals and you guys can do the deal together and everybody’s better off it’s more stable you have you have better cash like all those reasons so for now like if I could go back in time I would push myself hey get educated about this world of real estate like understand how it works and then go do a big deal right off the bat like 100% What markets are
(56:17) we looking at for this example hypothetical 25 unit building it doesn’t matter like the the markets irrelevant um you know I have friends who are crushing it and California I have friends crushing it in you know the Tennessee like the Market’s not important it’s more the market will impact your business plan and and what you place important like what’s important to you if you’re a cash flow person and like you don’t really care too much about appreciation you can go in into you know some Midwestern Market
(56:49) well the mid Midwest is is pretty hot but like you have to find out what’s important to you what your goals are for investing and then you want to find a market that that kind of fits that right um I think most people are more interested in cash flow these days of rates being so high for sure well cashow probably not so California is likely off the table well cash flow is the lifeblood of a real estate deal you need the cash flow um so but you want to look at a market that can support itself that is diverse in terms of its economy you
(57:16) don’t you just don’t want an agricultural based economy there there’s not diversity there or you just don’t want oil and gas like you need a mix uh you need a a growth in uh in terms of the population in the right demographic so if it’s the over 55 age group maybe you might want to think twice unless you’re in senior living right but you want to have those young workers who are in the prime working years of Their Lives who are going to have the families like who are going to contribute to the
(57:43) economy like they’re moving there to work so you want to have good government policy in terms of uh job creation and how they treat business uh preferably you have a city or an area that is actively trying to recruit businesses to move uh you get lots of incentives like that that’s the type of stuff you’re looking for um because if if you’re talking with an investor and saying hey Mr Mrs investor you know I have this deal it’s in this market this is what it looks like but oh like the the market we
(58:13) losing 5% of people every year like bad Market yeah like like you want to have some Sizzle in there oh yeah like our Market is has been in the top 10 for growth in the entire country for the past 5 years state of Texas 100% right like like like you want a growing economy and that’s what’s going to push um push your deal um give you that extra like push uh behind your sales so that was a long very long answer but I think most people can appreciate like where would a young family or young person want to want to move to yeah 100% right
(58:45) yeah and then generally those they want opportunity they want to pay less tax they want lifestyle yep so generally that means includes good weather great nature good schools those are the yeah 100% right so it’s not that hard no there’s honestly like there’s there’s like 20 Fant there’s at least 20 fantastic cities we would we’d both invest in oh for for sure like and like I I’m in that demographic now well I’m almost 40 almost there but it’s like where would I want to live like with my
(59:14) family it makes it really easy I wouldn’t want to move to California no no definitely not but but like you just ask yourself so if you’re 25 like do the market research and and the the thing I I’ve kind of learned the longer I I’m involved in this is like it’s not rocket science you you just have to be that much better than everybody else so a lot of people getting involved in real estate they’re like oh well you know like I’ll just kind of learn no like like really understand what how money is
(59:43) made in real estate understand the markets like what drives real estate what are the top investors what are they doing how do they look at properties if you’re 25 and you can nail that like you have such an advantage over over the 80% it’s that 8020 per principle all those poor people buying preconstruction condos like you have such an advantage and then if you’re able to have um you know a a an investor conversation with somebody and you’re able to follow that and deliver value to that person and and
(1:00:14) present things in the right way and have and and demonstrate your confidence and your knowledge it goes such a long way that’s oh so you mentioned like if when you find the pro the deal you want in Tampa for example yeah you’re going to raise the capital can you elaborate on what is a right mix of uh cash versus U mortgage oh yeah yeah so um it’s going to depend on the deal itself because there’s there’s wiggle room there but generally speaking we’re looking at you know a 7030 a 6040 uh so what I mean by that is we
(1:00:51) have a 60% debt 40% Equity or 70% debt 30% Equity um at no time do we like you hear people online talking talking about oh yeah I can get a 90% LTV through whatever program well yeah but that doesn’t really insulate yourself uh so you have to protect the deal and you need that Equity buffer um let’s just elaborate on that because some folks missed the missed that point with the the poor folks with the all the vacant properties in Northern Ontario and it’s not just them there’s other there’s
(1:01:24) other issues out there uh but I just want to elaborate on those deals specifically because those are 100% loan to value yeah there’s a for First Mortgage I don’t know what the rates are I’m going to guess six yep which is still expensive the seconds are like eight which bring you up to I don’t even know I think that brings up doesn’t matter and then there’s promissary notes that are paying like 177% y right so there’s no equity in these deals so just elaborate how Equity gives you buffer is
(1:01:52) you don’t you’re not paying any interest on the equity piece exactly which keeps payments lower yeah 100% And depending on depending on how you structure the deal like you’ll have returns that get paid own and everything but it’s a split on the profits of the deal and and really at the end of the day people get themselves in trouble with lenders because the lender wants to make sure that their money comes back to them so and that’s why lenders look for a debt service coverage ratio of like one and a
(1:02:16) quarter and what I mean by debt service coverage ratio is hey like how much Surplus does the property produce in excess of your debt service requirements so mortgage payments so A lender is going to want about a buck and a quarter one and a qu so that way on the day of acquisition that they yeah wow so so that that way um like they have that that wiggle room so in case like something happens with the property occupancy drop something like that they know they have a buffer because if you’re going in at let’s say 90% debt
(1:02:49) that buffer is so small so all it takes is a a dip in the market now the lender scared and now you start uh the ugly legal stuff that nobody wants uh so you need to have that uh that buffer there cuz at the end of the day let’s say worst case scenario you’re planning to to exit in year five and the market is the worst Market we have ever seen you have Equity built up in the deal like you can you can weather that storm um the last thing you want is that gun to your head which is where a lot of operators are um or got into last year
(1:03:21) where you have short-term debt expensive debt Market shifted now they can’t get out of that into conventional and you’re stuck it’s either you sell out a loss or you’re like taken to the cleaners so um yeah so so you want to make sure you’re you’re being safe with it and again no one went bankrupt for having too much Equity no no for for sure right and and so that that should be a red flag if you’re looking at an investment opportunity and they’re telling you oh yeah we’ve got 90% debt yeah maybe the
(1:03:48) numbers look good on a spreadsheet but in real life that’s not really how it works so this is likely the challenge both of you and I are running into as well because there’s a lot of marketing out there courses that are like heavy heavy debt oh yeah investment strategies so like I get people asking me like because my I’m like my plan is to put like 30 30 4 to 30 to 45% down on properties in cash yeah and people are saying why so high like what do you mean High I’m trying to at least Break Even
(1:04:14) yeah how low can you go yeah exactly and and it’s you know you always have to assume like what’s the worst case scenario and this is where Paul on our team like he’s really good at this kind of stuff like we we have our model and we try and break it so we have our underrating model hey this is our forecast for the next five years for the for the asset well now like how can we break this and make the deal fall apart and then we want to shore up those weaknesses and so yeah going in with high debt is really good if everything’s
(1:04:41) great but if if everything’s going to be perfect right like but like nothing ever like uh goes perfectly so you have to expect some choppy waterers in there and what happens like right yeah yeah yeah be a little weather storms yeah and everyone who had the storms usually have heavy heavy Equity or massive cash reserves or on the small scale people still have their day jobs and their six figure jobs so money’s still coming in yep 100% all right uh Seth you’ve been so generous with your time where can people
(1:05:12) learn more about uh multif Family Conference yeah the best way about the conference is just go to multifamily sen new speakers and uh yeah it’s May 24th to 26th in Toronto so it’s coming up pretty soon fantastic I can’t wait to be there it’s like a reunion it is yeah yeah it’s unfortunately like you’re just mad bit everyone wants your time that day but uh for the for the Schmo like me just it’s just nice to see all my friends there well you’re a celebrity so no no hardly not like not like the
(1:05:49) folks on your stage and uh your podcast is restarting yeah yeah so we’ve uh we ran for like 450 episodes before yeah yeah it it ran for a long time and then it just yeah so we totally knew uh we’re taking a different angle on it and it’s called the cool podcast so because you know one of the things before is we were we were just real estate and I I didn’t think it uh I didn’t feel it gave me the leeway to talk with some really interesting people who I wanted to speak with so now we’re uh talking with people
(1:06:21) who are pushing boundaries in their niches and in their spaces real estate but also you know we just interviewed um a a really cool musical artist um about kind of how the music industry works and how she’s uh making Headway there so like that’s really cool stuff to me so um it’s more General business and that aligns well with all the stuff we’re doing on on my end too yeah it was in the news that Rod Stewart estimate no one knows like these are private deals but Rod Stewart sold his uh his his song
(1:06:52) catalog for 100 million it’s it’s insane and actually we were just golfing at the golf simulator with with a guy who who on his shelf he has like music rights like it’s a fund and I think that’s so cool um and and so yeah we can talk with people about that and uh I just want to speak with people who are doing really cool in in their space yeah who are making money like yeah making money is to me to me nothing nothing more fun than making money yeah Seth thanks very much for doing this oh I always want to
(1:07:23) give my guest a final chance a final like the final a word any final thoughts like we’re like we’re recording this February 20th y a lot of turmoil right now actually inflation I don’t know if you probably I don’t know if you caught this morning um Canada’s inflation rate came in well below expected 2.
(1:07:40) 9 oh no I did not see that it it just broke this morning from Scotts can so uh yeah things might be picking up real soon yeah well we um like it was kind of interesting so uh like Grant and Alex last year at the conference uh both of them had really big targets for the next you know 12 18 months like Grant wants to double his portfolio and I I think you know the opportunity presenting itself now uh I think we’re setting ourselves up if you take some action now you know two three years from now I I think you’re in a really really good
(1:08:12) spot yeah yeah I know you didn’t have this dragon or sorry shark Barbara corkran was saying that the American Market’s going to bounce back as soon as we have Cuts yeah which are expected for pretty soon that’s actually weird because we Canada cut first sorry Canada increase rates first yeah and like everyone was expecting the Canada to cut before the Americans but right now it’s looking like the Americans might cut before we yeah and then depending on election results too like uh you know depending on who gets in like you can I
(1:08:37) I would expect some pretty aggressive policy if uh if the Donald gets in there to kick poli’s already aggressive well yeah but like it’s the Donald like he’ll go in and one more can you do and yeah and if because long-term forecast already for the I promise you the last words I don’t know if you what your research is showing me but my research for the Canadian dollar is it is expected to perform poorly against the US dollar yeah yeah and that’s you know over the long term yeah yeah and like all the
(1:09:10) like we talk with people who are way smarter than like I’m like down here we’ like we talk with really smart people and they they concur with exactly what you’re saying cuz like so how Canada benefits from the US growth is you know we build our pipelines we we get our and we mine our minerals yeah like we’re still the the heers of the land and the Sea like we’re not we’re not investing we’re not building anything no we’re just harvesting what we got in the ground I I want my money in USD 100% yeah yeah yeah
(1:09:41) cuz like yeah I promise you the last word but it’s all good but like I was playing with the we were playing with Google’s uh AI tool um I forget the name of it it used to be called Bard it’s they renamed it like genesis or something like that whatever but it’s like wow this is pretty impressive and I was already like over the top of chat gbt and like yeah and then and then open AI came out with the stop me if you heard this before open AI just released that that they can now do text to video
(1:10:08) did you see video yes I saw that yeah they had um they had two pirate ship sailing in a coffee cup and um yeah yeah that that’s really cool so it was absolutely insane did you see the one where like the text promp was like a drone video of gold brush California no I didn’t see that that one no it was absolutely insane yeah it was like your drone video going over the river and on each sides of the river is like housing and people dressed in that era yeah like and all in the prompt was just a few words yeah it’s like it’s incredible
(1:10:42) what’s going to happen over the next 10 years like I don’t think we’ll be able to recognize like marketing and creation of Assets in 10 years from now it’s going to be insane yeah and so where I’m going with this is like I’m not smart enough to build anything with AI or an AI tool or nothing like that yeah but what I do know is I saw an article that Sam Alman himself the president CEO whatever leader of CH open AI he’s trying to raise 10 billion to build microchip manufacturing because he still
(1:11:07) sees there’s going to be a shortage yeah we need our own microchips even though the Americans going to be building microchips like crazy yeah so I’m not smart enough to do like get make money out the microchip stuff and the AI stuff and all this sort of stuff but I’m smart enough to buy a house near one of these manufacturing facilities right so that you know these really smart people working at these places can rent from me or buy my house yeah exactly y I’m not going to over complicate anything yeah just keep it simple and
(1:11:35) collect the rent checks that’s all you have to do forget about it yeah I don’t to overthink this s thanks so much for doing this thanks for coming in thanks for having me and that that H uh looks really good so oh yeah for the folks who are listening Seth brought in swag so you know to encourage people to bring more wear swag I’m wearing swag while on the show thank you s sweet thanks everyone thank you for watching if you want to learn how to invest in real estate from scratch my team teaches beginners how to
(1:12:01) use the number one investment strategy that I personally use in a virtual free training class every month go to investor training.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 trining doca youout thanks again for watching see you in the next video

** Transcript Auto-Generated**
(00:00) hello and welcome to the truth about real estate investing show my name is Erwin Szeto and I want to say Happy Belated International women’s day oddly enough uh International history of women’s month is celebrated in October in Canada versus uh the west of Russell World celebrates it in March so happy in happy women’s History Month to everyone not from Canada anyways I want to shout out all the lady investors especially the moms and even more so the single moms out there uh I believe the women of real estate are incredibly awesome I
(00:33) happen to be married to one and I wrote a poem on the subject uh from from my own experience of working with uh I’ve shared before about half my clients are women including the married couple uh half the time the wife is the driving partner of that relationship so for the first time ever on the truth about real estate investing show I’m going to read you a poem in the Realms of brick and motor where dreams are built and sold a story of empowerment encourage dozen fold on International women’s day we raise our
(01:03) voice in cheer the women leading boldly year after Valiant year among my clients women shine their Vision clear and bright during Investments forward driving Investments forward with insight and foresight husbands too in Whispers confess their admiration pure their growth of our net worth they say her genius did ensure to the wives and pillars strong upon which Futures stand with who with a Keen Eye for Value navigate the land their wisdom in selecting the right property to seize shapes the fabric of success with
(01:35) remarkable ease and let us not forget the Single mother’s might juggling life’s many roles through through day and night the resilience of astounding a beacon so profound in them a well of strength and love abundantly is found so here’s to you the women in real estate who Thrive your influence is boundless helping dreams to come alive on this International women’s day your Praises we sing loud for the dance of progress you stand both strong and proud your freedom with these heroes in transactions large and small reveals the
(02:07) true essence of empowerment of all to Every Woman navigating the path of wealth and home may you always be celebrated and never feel alone again shout out to to uh all the women in real estate investing on a personal note U my family and I including my Superstar wife Cherry we spent the week of March break up north skiing sort of uh Cherry’s got a banged at me so she worked in the Chalet pretty much the whole time while I skied half the time as the ski the ski hill it’s a it’s huntsville’s uh Hidden Valley
(02:39) Highland ski uh so it’s bit on the smaller side but it’s perfect for kids I want to shout out to uh again Hidden Valley Highland ski camp for entertaining my kids and for training them I can’t recommend it enough for any parent who wants their kids to to learn how to ski so we’ve been doing this about at least three years now where our kids spend both the Christmas holiday break and March break in ski Camp uh we do live in Canada hence I believe the life skills for a Canadian include swimming skating and skiing intermediate
(03:12) levels are just fine I just want my level kids to be safe when they’re playing with their friends uh our family friends uh their teenagers actually had their ski school day cut short as too many kids were getting concussions from crashing into fences or trees so that’s not for what I want for my kids hence uh I’m planning ahead speaking of planning I have enough clients with adult kids where their kids want nothing to do with the family business or the real estate portfolio versus what kid would say no
(03:42) to an inheritance of stock like apple or or Microsoft my point is to increase the probability of my kids wanting to learn to and be investors the need something a bit more easy a bit more passive than what Real Estate Investors are going through uh locally to manage their own port uh take Airbnb for example earlier this week cherry and I had our worst experience with the property that we booked through Airbnb uh when we showed up this is this is for our March break so when we showed up the heat was off so we when we arrived the house was
(04:14) freezing and the thermostats weren’t doing anything not a good first impression uh there was no welcome email with instructions on how to operate the house no manuals inside the house either uh so we called and I spoke to the owner’s father and he was able to walk me through how to turn the propane furnace on that was outside the house so that was the first for me I’ve never seen a furnace outside the house before but even with the heat on uh the radiators on the main floor and in the main floor bedrooms they weren’t heating
(04:41) up and that’s where I was sleeping so that’s concerning to me uh there was also a fluorescent light in the basement that was a ceiling light that was loose and it was drooping down from its Mount I’ve never seen that before uh half the closet doors were off the railings the wood fireplace hadn’t been cleaned uh the owner and the cleaner who came by to clean it up after we reported it they didn’t know how to operate it or how how to open the flu so we had no plan B either then at bedtime as we were
(05:09) getting ready to go to bed uh we actually looked at the beds and we found two bed pillows that uh the kind that you’re supposed to you know rest your head on when you’re sleeping they smell like bad body odor pretty gross some of the best then so then we looked closer pulled back some of the sheets and then we found we pulled back some blankets and we found some bed sheets that had old blood stains on them uh my pillow was wet to the touch uh so I just tossed it on the floor I wasn’t so lucky even when I went to go
(05:41) find a clean pillowcase as the next one I found was yellow U this is hardly a good experience the neglect of the short-term rental is as bad as I’ve seen the worst in my experience and uh how are how is anyone expected to relax with these sort of problems going on uh the owner did come by to check on us in the afternoon uh in her standards for operating a short-term rental with prices at $500 per night are well below my own uh and who do I criticize apparently she’s making the money hangover our fist um anyways we decided
(06:12) to cut our losses short we didn’t feel comfortable uh once Airbnb agreed agreed to cancel the remainder of our reservation uh but unfortunately we only got 30% reduction on that terrible terrible first day uh that that was the decision of the owner I don’t believe that was airbnb’s call to make anyways we pack up the house and uh mind you when I when we showed up at the house when we first checked in when the heat was off it was only 15 degrees inside according to the thermostats which seemed accurate and when we when we
(06:42) arrived to pack up the house it was 26 degrees it was only 24 only 24 hours that passed the owner had warned us there was no way to control the temperature inside the house and I’d gone through and and set the temperature at like 21 22 degrees on all the thermostats I could find yet yeah yet the uh the furnace was just on a runaway was running away I don’t know what would happen if we stayed any longer so no surprise the previous guests before us who left it before who left before we arrived that’s why they
(07:14) shut off the furnace and the owner instructed me to regulate the temperature inside the house was by opening Windows in the middle of early March there’s still it’s it’s a warm March but it’s still like cold outside what a waste of propane and lack of client care anyways so we packed up the house while the kids were in ski Camp uh a cleaner showed up and gave us grief for not leaving earlier uh like it was our fault the house is gross and that’s why we’re leaving and it was also too hot uh we
(07:43) drove 15 sorry 10 minutes down the road as we booked another airBNB uh and we were greeted with a beautiful custom home Mansion uh well there’s probably 4,000 I think it was about 4,000 square feet on a massive lot backing onto a pond it was even better than the pictures uh we had a wonderful remainder of our March break after our very bumpy start uh we honestly can’t wait to go Wai in next year uh while my kids are my kids are old enough now they don’t need to be in Camp anymore so yeah we hit the
(08:15) jackpot with that property uh with an added bonus we saved $1,700 for making the switch though I still think that first night’s day at that crap hole should have been free uh my point is I couldn’t do what the Airbnb owner did have to deal with customer complaint calls and deal with Airbnb uh and again the owner is likely making really good money um and her experience was that you know lack of Maintenance was perfectly fine she’s still making money hand over fist U she actually said she couldn’t take
(08:45) care of Maintenance because the place was always booked she never thought to you know block off some time so you can get some work done no um but to operate a business like that and not care about customer experience and argue with customers and be fine with being a SL Lord of short-term rentals uh I know my kids wouldn’t do it and I wouldn’t I definitely wouldn’t do it either hence I choose to Outsource all my management on my real estate Investments going forward uh all the heavy lifting it all the heavy lifting
(09:15) that I have to do for investing in in the states is my my due diligence and honestly I’ve had a blast doing it because I’m a real estate geek and I enjoy travel so I can’t wait to travel with cherry to Atlanta and Nashville and in between and uh yeah oh and then also recently I I stumbled upon uh trion’s website the rental listings as well so so they’re one of the largest reads larger reads in the states so again uh I’m enjoying what I what’s called in the in the in the industry any industry uh
(09:51) R&D you know most people understand R&D as being uh research and development uh I I Al it’s also known as ripoff duplicate so I have the rental listings of Trion which is uh and they own 36 or 38,000 single family homes in the states so I have the rental listings I have their addresses and pictures so I can look up what they paid for and when so anyways combine that with public knowledge of the billion dollar Investments being made by Intel Samsung T Texas Instruments LG Honda Toyota hyundai Tesla all in
(10:29) business friend friend L landlord uh landlord business landlord friendly Southern USA and it’s actually nicknamed the battery belt for their green electric and Battery manufacturing Investments all the locations are just outside major centers like Columbus Ohio Atlanta Georgia I know Columbus is a little bit on the Northern side but they’re they’re one of the anomalies of being landlord friendly in the north uh Rally North Carolina Dallas and Austin Texas these are all CI cities with growing population and growing economies
(11:00) and identified as among the best cities for investment in the USA so my plan is very simple I’m going to buy hoses in between these major centers and the new manufacturing companies being built that will employ thousands of manufacturing employees anyways I’ve mapped the new major employers out on Google Maps uh I know my target neighborhoods my investment criteria and I’ve partnered with share the asset manager to be my One-Stop shop to you know find me deals manage the managers Al all sorts of
(11:30) things uh I’ll pay them their fees and they get to do all the landlord duties while I get to keep 100% control and 100% of the equity this is the best joint venture setup I’ve personally ever seen if you two would like to learn how cherry and cherry my clients and I are investing in the USA we are hosting a how to invest in the USA Workshop Saturday morning April 13th we have experts in all areas including accounting accounting legal structures financing Acquisitions and of course management note that we are keeping our
(12:01) investing simple and boring and only discussing single family homes in at the workshop because they’re affordable at the 100 100,000 to $350,000 range and I can get cap rates between 5 and 7% which pretty much beat anything here in Canada when adjusted for risk uh links in the show notes on to this week’s show on today’s show we have one of my mentors in broker uh Tom Tom crit is the broker and Co under Rockstar real estate brokerage where I belong and have been since 2010 uh in my experience they are the best leaders and
(12:36) influencers in the community uh if results are what matters to you like they do for me Rockstar members uh their thousand plus members are very well educated and more importantly they are very successful especially when you adjust for risk no get- rich quick schemes at Rockstar and on today’s show Tom Tom discusses how Rockstar members have weathered the current storm uh spoiler alert it’s been pretty good we talk about how the pandemic ruined my Bitcoin gains while Tom has accumulated more than he will he’s willing to share and
(13:11) he’s laughing all the way to the bank and I I as I say that I I know the R I don’t know if that saying works when you’re talking about Bitcoin and Bank you know what I mean anyways Tom and his brother Nick kader are hosting the next your lifee terms event live and in person Saturday April thir April 6th at the international center near Pearson Airport this is likely the largest room uh a thousand plus attendees are expected uh and and these will be successful action takers uh and uh the talk is always the talks always fresh
(13:46) for example there’s speakers there speakers that they have out that they’ve never had before there’s no repeating content allowed uh cherio will have a brand new presentation and she’ll have a booth there as well I’ll be there of course networking I’ll be wearing my USA hockey jersey if you’re a client of mine uh and I do know someone who knows someone so I can save you the couple hundred bucks on tickets uh and for everyone else I have Link in the I have link and details and the link to
(14:15) register is in the show notes uh URL Fe if you have a pen handy it’s www.yourlifeyourtermsevent.com please enjoy the show hi Tom what’s keeping you busy these days I was just thinking about when I first met you and you decided you were going to get into real estate and for whatever reason I think it was a Greek restaurant in Burlington we had lunch was that where it was and uh Nick was saying something to me like you know we got to sit down with this guy Irwin he’s thinking of leaving his job and going
(14:52) into real estate and real estate investing full-time I’m like okay you know let’s go and uh Greek food I love so that wasn’t easy sell and I remember sitting down across and and I thought okay this guy’s pretty crazy like us so he kind of fits because uh he wants to quit his job I remember it was a decent job what was it I I worked for a company that was acquired by IBM okay yeah so you were you like a data analyst or something I was in product management so it was it was a nice position for me
(15:21) because uh my workers highly respected I worked between like clients and internal clients to help design product that would deliver what they wanted so I kind of like that intermediary between clients internal clients in our development staff and why what was what had gotten into you why did you want to quit again I forget I I always want to get rich in life it was always my always in me that just my nature I always want to be rich and after reading Rich Dad Poor Dad I realized it was not going to happen while working a job got it and you
(15:50) wanted to be rich and how do you define that rich in time rich in money Rich money I was young more money than marrier got it I was not even a point where like I didn’t want kids because they just getting the way of having makeing more money that was my mindset back then got it got it um I think I just watched is it true I watched something it was like a a Chinese comedian sing for New Year’s yeah I was talking to Tim about this briefly and is this is this a real thing so you don’t say Happy New Year to you
(16:22) know in on the Chinese New Year it’s not customed to say Happy New Year you say I hope you get rich it’s it’s it’s it’s it’s a loaded thing but it’s also rich in what though money Health okay so it means I wish you wealth in all facets of wealth yes okay okay he’s he’s taking the Liberty but yes but you know but again like generally Asians priority is money yeah yeah you get it like it’s po it was a historically very poor culture sure so like you know no money no eating
(16:51) right so you know you know you know croatians are have similar background as well you don’t have money you don’t you’re not eating yeah yeah I remember just the way my family I think would try to show wealth would be they had nothing so if you went to visit and this would be my family in Croatia they would put any P they had any cheese they had out any bread in an abundant way to kind of show that they were welcoming you to the house and to show you that they had something to offer you and they had no
(17:19) real Financial wealth but that was the way they kind of tried to show that they were welcoming you you know putting some food on the table Yeah weird times lots of different cultures have different ways to express that but I remember you you told us you were going to quit your job and then you went and did that took a lot of balls man do you looking back at that moment do you are you happy that you did that do you regret doing that uh so I don’t know if you remember it was a long time ago was 2010 we’re talking about I
(17:48) actually went on sabatical for 30 days okay and that’s and I had my license at that point so I give it a go so I give it a go and then I was doing all right right I think I did two or three Deals in that month and then if I extrapolated then that would be more money than I was getting paid at the job and I was enjoying what I was doing I knew that this would help me become a better investor as well so then there was more there’s more wins and also I could keep local right I was living in Burlington at the time so go train downtown you
(18:17) know and it was yeah hard Jam in there everybody was reading the newspaper yeah everyone’s reading the newspaper it’s and especially the ride home is packed like you I almost almost never got a seat so you for that’s usually me cuz I play basketball at work I was that guy but yeah like that was you know a key part of the journey and you know and it’s weird cuz I’ve only ever been at Rockstar I’ve been a realtor for since 2010 only ever been at Rockstar so this is my only context yeah wow and before we’re recording like like
(18:54) we’re we’re recording this on February 15th like there’s been all this turmoil in the industry uh like just just last week there was big news in the CBC and the globe mail a certain group with like 8 600 units in like Northern Ontario mostly like they’re Grant bankruptcy protection and digging into it it’s it’s it’s bad I don’t know how much you dug into it not much I just know that there was a bunch of stuff lent out on promisory notes and that’s really all I know the houses were
(19:23) up north somewhere well the the bigger issue well that’s a big issue part of the issue as well is like there’s 200 units that are sitting vacant that are not that are not habitable wow right and I was thinking like how far is this from Rockstar theory for how to invest oh jeez right cuz I’ll go OG on you uh cuz you always share your family story of back in the uh late ‘ 80s mid 80s late ‘ 80s and the early ‘ 90s yep can you share that story yeah I think maybe that’s what defines how we think about
(19:55) real estate over the last 15 years was that era our father was running a drywall company and then he started flipping properties on the side just like everyone starts flipping properties on the side in the late ‘ 80s it was in uh Moga just north of square one off Eglington and kind of Highway 10 and those subdivisions up there were going up in the late 80s yeah that’s gorgeous area beautiful area he started flipping properties and he did really well on a couple flips new construction bought them sold them and then 1990 hit and he
(20:22) was holding this one new construction again that he bought off paper on assignment so like it was a trailer on a gravel parking lot guy walks out buying the house my dad buys the paper from him and it was a 4,400 ft house house enormous pretty big three-car garage and back then he bought it for 750,000 and with the hopes that it would go up like like all real estate was going up and instead of it going up four months after he bought it um TD raised rates I mean the Bank of Canada raised rates but in this one month interest
(20:53) rates went up and if memory serves it was 2.9% in 30 days so it was like a 3% raise in 30 days and that absolutely decimated the real estate market and not only the real estate market it really ripped apart the highend or what I would call the luxury Market yeah 40 44 qualify yeah so that house we were looking to see if we could sell it and we would we would sell it for like 450 we thought and at the time we couldn’t afford to sell it for $450 we would lose so much that our family home in Miss Saga would be in Jeopardy so uh my Dad
(21:28) decided to hold on to it I became the property manager because my English was stronger than my father’s and we rented it out and even renting it out I remember roughly it was about $1,000 a month negative so my dad’s drywall or our dad’s drywall company was struggling because it was a recessionary time and we had this property that was sucking $1,000 and the price of it was under under what we purchased it for and then the the tenant skipped out on rent um and uh I remember going to the house and
(21:58) it was vacant at first I remember going to the house and them telling me hey just come back in a couple days and we’ll get you the rent I used to go pick up the rent I remember being inside the house when they told me this beautiful carpets baby grand piano like I remember being impressed with this house and just the way it was furnished and everything so when they said to come back I didn’t really think of it I used to cut the grass on that house and stuff and uh full service product management yeah
(22:23) what I was doing yeah I was like my old Thunderbird like I stuck in a lawnmower and I went to go cut the grass and do all kinds ofd who knows what more in a Thunderbird okay I got the image in my head yeah two car girl two car sorry two door Thunderbird with light covers and a bra on the front with a lawnmower in the back going a cut grass and uh i’ cut the I went back and the neighbors are like hey they let they moved out in the middle of the night and I’m like what they’re like yeah the house is vacant
(22:49) we’ve looked through the windows and then I went and the house was vacant they skipped out on one month’s rent and at the time one month’s rent for our family was absolutely massive like we needed that money do you remember what the rent was I don’t I just remember the negative I remember the negative was like roughly a thousand and uh I had to tell my father which was also that was just brutal had to rent the house out and renting out a larger house when times are tough took forever it was basically just us
(23:14) Executives who would rent out that house and even renting it out again in a recession not easy it was not easy no I don’t know how many months um I was in university then uh but I remember being vacant for quite a few months because I would have my friends over for some parties and I remember one of my friends jumped off the twoot sorry jumped off the garage roof he jumped off the garage roof of that house and landed on his chest on the grass and he didn’t die I remember seeing him bounce off the grass
(23:45) um so yeah we had some kind of crazy parties in that house and stuff but we eventually rented it out and uh that just taught me that you know going through that experience was really really tough and it just taught me that um when when we looked back there were some real estate or some properties that really um were the most liquid if you needed to rent them out if you needed to sell them in bad times if you needed to refinance them and it was starter homes it wasn’t these luxury properties starter homes always had a bit of a bit
(24:15) or a bit of demand M and I just always stuck with Nick and myself we like huh starter homes always seem to be like the most liquid real estate so if you’re going to get into real estate probably should just get starter homes and you should probably not do um reconstruction like our father had done because by the time you sign the paper or the time between you sign the papers and taking possession a lot can change it can kill you it the market can change it can change greatly Fin and I know that’s very conservative thinking and I know
(24:42) tons of people have made amazing money on preconstruction and I’m not denying that’s it’s like absolutely fantastic for them this is just our family story and what works for us so we always then steered Nick andai to starter homes that were resale because we thought oh well if they’re resale we know what the rent’s going to be and if it’s a starter home we can we know we can rent it out to a family regular rent we know we could do a rent to own strategy on it if it’s close to a college or university we
(25:05) know we could change it into a student rental which we had done we have a property that we ran as a rent owned that particular one didn’t get bought out we changed it to a student rental for a few years now it’s back to a single family rental so this the starter homes just have a lot of opportunity a lot of you know options there’s options flexibility to it if you want to throw a credit line on a starter home the banks are typically willing to do that so it’s just easy so it sounds pretty boring but
(25:33) we’ve just always thought resale and single family homes and when I say single family I should qualify that like we mean fully detached but you know if it’s a semi- detached town home like those kinds of properties ideally single family if we can and that just became like our our thing we would just buy resale and um yeah that’s what we learned in real estate and then when we when when we went off to start Rockstar it was really just because we had no more money to buy properties ourselves so we thought okay well we
(26:03) have these real estate licenses that we got to bypass Realtors MH and uh why don’t we just use this license to try to help other investors because this is going to sound crazy irin but in 2006 and 2007 there weren’t a lot of Realtors who worked with investors yeah I remember those days yeah there you couldn’t find anyone so most books most books taught to not work not yeah don’t even yeah yeah if it was a real estate book it was like investors asked too many questions you don’t want to deal
(26:28) with them and The Brokerage that we first went to in Oakville they didn’t they told us we were going to fail when we told them we were going to work with investors they didn’t think we were going to succeed at all well because also add to that most investor books that were training investors like write a 100 offers yeah and that was the books I WR I used to do that I used to write all those offers and I used to piss off all these Realtors to win one yeah and and I would say things like legally I know you must present my offer I know
(26:55) you must present it I legal legally I know you must present this and then I flipped and I got my license and then I dealt with these investors and I’m like oh God yeah you don’t realize the politics of of real estate is that you’re trying to keep relationships with other real estate agents so you don’t want to piss them all off with your crappy offer yeah exactly someone off they may not ever talk to you again I’ll never forget I found a single family home in Burlington that I couldn’t buy
(27:18) Nick and I didn’t have the money but it was it was a single family home in Burlington for it was I I want to say like 283 285 if you could believe it 283,000 and remember telling this investor oh my gosh I found the property it’s it this is the price and here’s what you’re going to get and rent on this property this thing is a winner and he had read some real estate investing book where he had taken the purchase price of the home and divided it by the property tax and the ratio that he was came up with he said yeah he said in the
(27:47) book that if the ratio of purchase price to property tax was this that it wasn’t a good purchase and I remember it just finally hit me I’m like wow some investors just speak with cra crazy you know some crazy ideas and then I thought oh my gosh was that me like back in the day cuz I probably said some things to realtors that just sound the 1% rule or yeah yeah well the 1% rule if you could get the 1% rule that was like that was crazy that’s what got us into student rentals because they were hitting the 1%
(28:16) and we’re like holy smokes back in the day yeah yeah yeah but anyway that’s so yeah so our personal journey is heavily influenced by the early 1990s and that real estate crash lasted property prices went down for six years so um that heavily influenced us and just guided us to starter homes the resale Market super boring and over the years people have come to our faces and told us you guys don’t really know how to make money in real estate you have some those people yeah you have to be doing this we’re now
(28:44) bankrupt oh really yeah and it just never even phased us cuz I always just thought like well this is my journey that’s your journey this is what’s working for me I’m doing the math on these things I like what this you know does and we’re going to stick with it and our accountant really early he’s since passed away but he was a mentor to us I’ll never forget he said that when he was younger him and his accounting buddies would look at businesses and as businesses would grow some of them would
(29:06) grow almost exponentially and they would always admire those people and those businesses but you know now later in his life as he reflected back with his accounting buddies they realized that it was the turtle who wins the race that a lot of the businesses that really ramped up some revenues that wasn’t really a sustainable thing it was like either they you know a got lucky or B were not doing something appropriate and they the revenues really Skyrock rocked but the business itself wasn’t built on a bed a
(29:35) Bedrock of a solid foundation and they came to learn that like oh the people who just do things at a steady Pace just year over year over year at the end of the day tend to win most often and that also stuck with us and we’re like you know what these little starter homes they’re the turtles yeah they just you know day in day out they kind of work away for you and at the end of the day they’re not the most exciting but they’re likely going to you’re likely going to survive the journey MH I was
(30:01) just reading an article about looking back on GE and that actually fits into that as well when Jack wal was like he was like the go he was he was like the Elon Musk time I remember right and then then I I remember I remember when GE Capital started and this is exactly what you’re talking about GE Capital started to finance their customers to buy more of their product yeah was that what it was yeah so it’s like inflated so like yeah we’re number one or number two in this in this and it was vertical but
(30:30) we’re we’re feeding it yeah yeah yeah yeah yeah it’s like they had control of the Monopoly board and the bank so they just threw in more money into the board sounds sounds familiar it yeah that’s that’s oh sorry I want to touch back go back to your the the the property your your father bought what is it worth today just yeah I haven’t looked I haven’t looked that in in years I guess it if I have to guess it’s at Miss Saga Road in Eglington in missa over 3 million somewhere yeah it’s probably
(30:59) something like that yeah yeah four maybe yeah I should go look years ago I kind of like blocked it out of my mind for so long because it was such a scar in our family but um yeah and the turtle would have won eventually if you could hang on yeah if you just held on and that’s the thing like if you can handle the leverage the whole key to getting ahead financially is use to me is in the existing Financial system is to use leverage and then be able to you know smartly manage leverage and if you can’t handle the leverage it’s the market
(31:30) telling you oh you weren’t too good at this game and we’re kicking you out but if you can manage The Leverage you’re likely going to get ahead I mean you know I always look at real estate I’m like a real estate as an investor you put 20% down historically in the Toronto area real estate will appreciate at 7% a year 7% on a 20% down payment it’s 35% return and it’s a good way to financially outpace the currency depac in this country and it’s a good way to get ahead financially but if you overextend yourself with that
(32:00) leverage and you can’t manage it you get kicked out of the game mhm it’s like a reboot so it’s much tougher market today I was actually talking to a a Toronto agent friend of mine he was like he’s he’s he’s doing the math in his head he’s an engineer by trade but he’s real practice as a realtor he was telling me to cash flow on a downtown Toronto condo you need to put down 50 to 55% just to cover the hard costs so mortgage taxes Insurance condo fee I’m like that’s a lot of money to put down mhm and then
(32:28) other things happen tenant turnover lease fees bad debt right repairs and maintenance Property Management all those things happen property tax and Toronto’s increasing what 10.6 10.9% or something I think with the threat of 16% if the feds don’t kick in some money yeah what could happen yeah it’s an election year yeah they probably W yeah they’ll probably pay it’s election coming soon they’ll probably pay so so what what should investor do today based on your based on Rock philosophies I think I’ve just heard
(32:57) that story like I’m 51 years old now I’ve heard that story since about 1998 like in 1998 property prices had gone up um for two or three years and somebody told me oh my gosh like you got to be careful with the real estate you know property prices have gone up now two or three years they always go down because if you grew up in the90s you were used to property prices going down then I remember in the tech boom of the early 2000s people were like oh tech stocks are where the money is real estates way
(33:22) too hard and I was buying student rentals then and you couldn’t convince anybody to buy student rentals everybody was like you know Cisco Nell pets.com like that was the that was the era.com yeah that that was the era then that kind of crashes down greenpan lowers interest rates real estate catches a bit of a bid and then 2008 hits and people in this country were convinced real estate was going to crash we started RockStar at that time and people were telling us oh my gosh are you seeing what’s going on in the in the US it’s
(33:54) going to collapse here in Canada and then in 2017 similar things you know prices came down and right now interest rates are High um so it makes it quote unquote more difficult than in the year 2001 when interest rates were lower so I guess my message to anybody listening that’s going to go into this is you have to understand that real estate and our money game now is very cyclical cyclical every three or four years there’s a big amount of debt in the world that’s getting refinanced and and in between
(34:24) those times things get a little wonky so a lot of new debt came out in the pandemic our interest rates were really low um to kind of create a little bit’s under selling yeah a lot to create a lot create a lot of debt and then inflation gets hot interest rates go up everything gets a little kind of scary and then we’re hitting a Time whereas if I had to be a you know if I had to place a bet on where I think interest rates head in the next year it’s going to come down and it’s going to take some pressure off
(34:51) things to make that condo example that you were saying to make it cash flow a little easier because interest rates are going to come down and have no crystal ball I have no guarantee to that I just mean over the last 20 years this is what I’ve seen it’s like interest rates kind of trend up like in 200 2008 interest rates no one remembers but interest rates we were getting some mortgages in the high fives close to yeah close close to 6% and people were telling us Tom these purchase prices I’ll never forget
(35:17) this Hamilton property at $225,000 no more cash flow no more cash flow game’s over and interest rates come down prices go up and you know the party kind of rages on so I don’t know if this is the end of real estate for the Toronto condo or for the resale Market in Toronto I just think we’re in one of those Cycles where rates are high and if your formative years in real estate are 2008 onward all you know is cheap money cu the Cycles have been so so high with debt and so low with rates that that’s
(35:51) all you know and we’re finally coming to a place that’s kind of outside of the you know the recent norm and it makes it difficult for people if the numbers don’t work and you can’t handle it then I wouldn’t buy but I don’t expect that to be the case for the next 10 years there’s just too much debt in the world for rates to not come down so I got to think things are going to get a little easier again MH on the same side my friend that was telling about the condo he he Al telling also telling me that in
(36:20) downtown Toronto duplexes are on absolute fire sure right CU people are want and these are these are house hackers these are these are folks who are planning on living in one of the units and they need the income from the other unit to live and like oh God thank goodness my duplexes have taken a haircut in the last few years yeah yeah yeah yeah I think it’s just everything goes up and down like Nick and I don’t look at real estate like any property we’ve ever looked at we thought would we would we buy this if we had to hold it
(36:49) for 10 years at a minimum right even if we were doing rent to own stuff which we were ideally selling to a tenant buyer at the end of 3 years um which didn’t happen but we had to plan that it if it did we were going to be okay with it and if it didn’t we kept the property so we’re going to be okay with it so the way we look at it is like do the numbers work for us in our lives right now could we hold it for 10 years because when we were younger I needed the cash flow so the numbers that we’re talking about the
(37:16) Toronto condo and different properties around Toronto right now if they don’t cash flow it’s not really appealing it wouldn’t be appealing to the Tom that was in his 20s but as your financial situation changes someone might might want to buy a Toronto right now doesn’t matter if it’s 40% down 50% down because they might want a condo for their family for their son for their daughter for some reason they’re in a different Financial place and the number is not a big deal so I think you have to match
(37:40) the finan the conditions of the real estate market to your current situation are you in are you young willing to take on a lot lot of Leverage and a lot of risk or are you a little older and you’ve accumulated some assets and now you’re at a different place in life so it’s just there’s just no one answer but I do but I do know any investor who looks back always says it’s harder today yeah like I’ve never met the investor there still harder today it’s still harder today never even when price is
(38:08) down it’s still harder today the banks change their rules the down payment rules change the qualification changes but things always change I’ll give you an example in London Ontario where we have a lot of investors who buy student rental properties around Western they’re about to change the bylaw as we speak right now to go from five bedrooms up to allowing seven oh great so now we were in a situation where people were like oh well the numbers don’t really work yeah five bedrooms I can’t earn enough even
(38:33) though uh per room up there it’s common to get a th000 we’ve seen $1,200 a month um in student rentals but now if you can add two more bedrooms we we know a bunch of investors who have unfinished basements that weren’t finished because they couldn’t legally add two bedrooms now they can legally add two bedrooms and it’ll get another $2,000 a month on that property what’s that going to do to the opportunity there probably increase it so I just think you can’t take a moment in time and make a definitive
(38:56) answer that this is how it’s going to be forever real estate’s like a changing game so is is uh I want to get to I want the listener to know what what properties they should be looking at is the London student rental an ideal for anyone to get into yeah okay so also another thing want to clarify as well is like a high amount of Leverage is different for different people to me like to me a high amount of Leverage was 20% down cash maybe even he in a schedule in a schedule A Bank mortgage for cheap that was high leverage for me
(39:29) versus we see all these people out there with first private first private private first for 6% private second for 12% oh God yeah promisory note for like 15 177% yeah right and also I want to throw in I’ve been saying this on the show a couple times now we used to call these hard money loans we got away from it it’s true yeah we don’t use that language as much yeah because I remember a good friend of mutual friend of ours like he would use the term when he when he was building his Mansions when he’s
(39:57) he I have hard money loans versus people like BR I priv private I private borrow yeah like no it’s it’s hard these are hard money loans that’s sorry I can I digress back to uh what is a best practice investment in today’s market um so on okay so first you just give me a flashback I remember when Jim flarey the Finance Minister in Canada briefly allowed 0% down payment and 5% down I don’t know if you remember four investors for declared rental properties the cmhc fee was like astronomical but I
(40:28) can’t crap on what you just said too hard because when that came out Nick and I were like all over that we were like wait a second you can do 0% down and if the numbers worked and some numbers still did work at 0% down your cmhc fee was astronomical but anyway you just I couldn’t qualify because already had properties so they would never give that to me it it was tough yeah yep and um I I tried though yeah of course why not yeah 0% down it’s like an infinite return even five yeah um but for today
(40:57) for for I mean it’s it’s a tough question to answer today because you you know whatever answer I give has to be mapped to somebody’s short-term objectives and their long-term goals like look at your all of our short-term objectives mine and yours like look at yours right now you’re making a change in your portfolio like it always is kind of Shifting but if somebody I’m a different age and different yeah you have different things bother you in a different way at this age and at this stage of life than it did a few years
(41:21) ago so you want to adapt accordingly and you know to each their own of course but I would say that um to anyone looking at the Ontario market right now what has been popular if let me answer it that way right now has been student rentals because student rental demand is always strong and I’m not talking about the the recent massive influx of international students the big universities always have demand so McMaster Western Queens these places always have strong strong weth to yeah like Western has like last time I
(41:54) checked was 37 38 39,000 students if you add in faculty in the hospital there we’re talking at like 40,000 50,000 people and they have a college in town too to put more pressure on that market yeah Fen Shaw’s there as well you’re right so um if you can buy a property around Western in good Economic Times or in bad Economic Times there’s always students and uh those properties make a lot of sense because you also get to go to market rent quite frequently so if you rent out to a group of students
(42:23) after 3 years usually that group is moving on you know within 2 years 3 years four years usually you’re moving on to get a new group of students when that happens you can take your rent back to whatever Market rent is and as a as a way of an example my son is just leaving Western this year he rented out what I would call a slummy house we don’t own this particular house uh for $615 a month utilities included three groups of students came out for next year just a couple weeks ago they took it on the first day for 925 a room plus
(42:53) utilities 925 a room plus utilities he was renting just a few years ago we signed that leasee or he signed it at 615 utilities included right so like 50% increase over 3 years it’s massive so student rentals are interesting and now if they’re changing some bylaws and you can add more bedrooms legally in there you can do it properly and I mean making like safe clean functional properties so student rentals can be really interesting and and I would say to anyone looking at real estate that could be a way that you want to look at it or
(43:23) you want to buy a property where you can add a duplex a second second unit or a single family home on a lot that in the future you could drop in a g Garden Suite a laneway suite or change the structure of that house because going forward like look what you said about Toronto with like duplexes being on fire I think we all know there’s going to be a continued housing shortage in this area so that if you can add on to the property and add out their income streams those are huge so you know if you can go to the Niagara area right now
(43:51) and find a property where you can duplex it legally and then potentially even add a third unit on the property m at some point to me those are gold because if you look at the population growth in Canada as much as Canada has problems I don’t think we can deny like Canada has problems has government problems Canada has There’s real estate problems there’s government problem there’s problems at all levels in in Canada and all over the world too all over the world China like us us with their issue in Texas the
(44:18) whole world we’re we’re going through a moment here for sure but it’s crazy times it’s crazy it’s yeah bitcoin’s over 50,000 again these are historic times man yeah ride Bitcoin down to 16,000 or whatever it was and come back has been been a journey but on the real estate PR keep me focused here don’t don’t throw dangle at the Bitcoin topic there um the the Niagara region like if you just look at fundamentals like the population growth of Canada is going to continue whether one way or
(44:44) another through International students legal illegal whatever it is you know we’re getting more people in this in this country no way dips below half a million ever again yeah yes we’re going to have yeah so the population growth a big percentage of population growth in can of the legal immigration that I track 44% comes to Ontario so we get like a huge amount in Ontario within Ontario a huge amount of that comes to the Golden Horseshoe Niagara happens to be positioned against you know the biggest economy in the world um the
(45:12) population growth is going to expand they’re going to put a new casino in Niagara there’s two new factories going up Welland is getting a battery Factory from I believe it’s a South Korean uh company don’t hold me to to to that but there’s a new battery plant going to go in and well and there’s another new Factory that I’m forgetting the name of that um plans in thoral there’s a new golf course I believe being built in the Niagara region so you could just see like that area is going to just continue
(45:36) to expand continue to pill in population growth so if you didn’t want a student rental I would say hey check out the outskirt areas of Toronto specifically the nigar area would be an interesting way to uh to get into real estate for sure I’d throw in as well like a basement apartment strategy Garden suet strategy would be wonderful near a university as well yeah that would be great those are really hard like in my my experience those are really hard to find a lot that can handle that or a property that can handle that but man
(46:03) you got a you got basically an Ontario Golden Horseshoe unicorn if you can do that oh my gosh and I know some people who have built like nine unit student rentals by these universities as triplexes so they can convert it to like a proper Triplex or they can rent it out as three three-bedroom student rentals and with a lot big enough if they wanted to they could put something else in the back so you’re right yeah that’s a unicorn if you can find that kind of thing and the bank loves it they’ll Finance it properly yeah like versus my
(46:29) student rentals yeah well back in the day get the best back in the day yeah student rentals were not like this back in the day like especially around McMaster like do you remember going into some student rental a friend of mine had a room when I was in university we went to visit him to get to his room you went past the furnace and there was like a curtain hung off like I guess from the HVAC ducks that you kind of pushed to the side and now looking back at that time we didn’t even think anything of it but now looking back I’m like oh my gosh
(46:56) this guy’s room yeah he was on the back side of the furnace room just with some carpet and a mattress on the floor that was his room that he was renting out so McMaster area was wild it’s better now it’s come a long way I’m sure there’s some of those properties still out there I remember seeing like Bas and bedrooms with no windows yeah people had just a room there was no windows like like that’s wild wow and that was not that uncommon and the low ceiling like 6 yeah I remember the low ceilings I remember
(47:26) one bedroom in a basement that we were looking to buy this property we went into the basement and the bedroom um I think it had a window but you’re making me think maybe it didn’t but it had this little kind of doorway that was maybe only 4T tall and the ceiling was slightly crooked like it wasn’t a proper doorway and and it was maybe 4T long so it’s was 4T tall and about 4 ft long and you just kind of look down and it and you there was no door it was just this little weird hallway thing off the
(47:49) bedroom and you walk through and on the other side was a bathroom and like how did this like how is this bathroom here how does this exist exist so uh and you wonder why we have rental licensing coming fromon area yeah yeah by the way we we we dug up one of Nick’s houses by McMaster because we didn’t have the money or he didn’t have the money I wasn’t involved in this house to pay for like a Waterproofing Company so we dug it up by hand he got like six of us out there and we dug it up by hand and then uh he
(48:20) sealed it all up and we threw back all the dirt and uh you know he sealed the cracks but in one area where they punched a pipe through for something to do in the basement maybe they’re adding a kitchen somewhere or something they forgot to seal around the pipe no so a couple weeks later there was still a water leak and they had to redig back down anyway we’ve seen a lot of stuff do you guys still have that hose yeah Nick still has it yeah yeah so speaking of Nick famous quote from Nick is uh what is it those who deal with the most [ __ ]
(48:52) what is it win win thank you thank you cuz we were talking about like stages of career you talked about the you know our neighbor to the South is world superpower and i’ I’d actually argue the superpower by far with with we don’t even know how bad the evergr issue is and not just evergr anyone who’s behind evergr as well who is the number two three four building biggest Builders how many vacant homes are there in China we don’t know how bad this situation is so I think I think things are I don’t know
(49:20) all this you you read the brick talks stuff stuff too I don’t know how much you believe like bricks will actually catch up and actually be a significant thing like China has so many cracks in their economy it’s just nuts but anyways anyways end of the day not that much is going to change with the US there’s still going to be even if someone passes them there’s still going to be an incredible world superpower lots of jobs sure and so like everything combined I’ve done I’m done with dealing with
(49:44) [ __ ] right I’ve got I’ve got a B officer I got call back because she’s because she’s calling me because I have a I have a duplex that’s close to Mohawk College okay so I fall within land uh landord licensing okay got it I’m like I so I have at least I have three properties in Hamilton that will qualify into the current pilot for for rental licensing so and that’s just not worth it to me I’m I’m tapping out why do you is there a lot of work you have to do on that property no this is why I’m partly
(50:14) pissed these are legal duplexes like my my Hamilton Mountain property so why is she calling you CU because rental licensing if you’re in the W if you’re in that Ward you you have to go get rental licensing okay got it you don’t have to invest in the property you should have to I may have to do some okay got it uh but again though these my basements were done with with permits City’s already City’s already signed off on everything right I why do I need an HVAC inspection in Esa I haven’t done
(50:40) anything right and all the just all these extra costs I don’t want right so I’m done I’m done just I read too much news so I’m I’m done dealing with [ __ ] and we know where you’re going you’re wearing the Hat of where you’re going yeah yeah cuz oh man I loved it I’ve never been to Texas before you’ve been you’ve been you used had to travel a lot especially when your corporate work uh yeah y Dallas San Antonio Austin yeah I loved it my trip to San Antonio and Austin I just loved it I had no idea
(51:07) pulling up to a gas station we were just talking about this pulling up to a gas station having brisket just ready at the gas station there with picnic tables outside and going getting some fresh meat and eating it there amazing I remember being the whole the whole foods whereever Whole Foods is originally out of Austin or San Antonio I forget I think it’s Austin I don’t know but I went to whole see a lot I didn’t see a lot of presents from Whole Foods okay well we went to the Whole Foods like flagship store and their Hot Table had
(51:29) this like fresh barbecue and you know they were just selling it by the pound so you could walk up there and just say how many pounds you wanted you would wrap it in paper and you could just go outside and eat it it was like oh my gosh this is amazing yeah it was sunny and warm and uh it would be nice on a day like today it would be yeah seemed they seemed like a great place I could I could definitely see the attraction yeah cuz we’re just talking my single family homes before recording I just got an email u a property I I’d liked on
(51:56) realtor.com so that gave me a price update they just dropped their price by 25,000 from 300 down to 275 oh North atin only for 275 in Ontario not even Tim actually maybe Tim’s Ontario 275 and I think I can rent it for I may have to fix it up a little bit but I think I can rent for 1900 like these are the old these are these this is like Hamilton Mountain 10 go numbers it’d be interesting to look at the appreciation in those areas just to see and what you personally expect I think we get a strong appreciation in Canada
(52:30) because of the concentration of population around a few major centers whereas the US you just have a lot of choices even in Texas you have a lot of choices but then you can choose Florida and have a lot of choices so we’ll get to Florida in a minute yeah but it’s just I’m I’m curious to what happens to the appreciation in those areas just because we don’t get the concentr you don’t get the concentration of population like you do here um not that that’s good or bad and that might not be
(52:53) important to you but it would be something to look at like historically what happens in those areas around appreciation because one of the things I like specifically why I targeted Austin was because the prices have already come down at least 20% and realtor.com picked Austin to come down the most of the country so I’m looking at like Warren Buffett style like Austin pretty much is on almost every top 10 list Texas is obviously on every top 10 list right so this is capital tons of jobs prices are come I’ll probably get
(53:23) something from from like I’ll probably get the house if I bought something today i’ probably get like at least 30% off the peak I’m surprised to hear the prices have been coming down recently with just all the demand of people moving into Texas so what what is driving the is it just a interest rate moves there that have made affordable I think just went up too much went up too much too fast okay so it’s a bit of a correction yes this is a correction so I think okay so over 10 years it’s up just
(53:45) recently it’s down oh yeah just like about 2021 is is when the decline started yeah so probably declined in 2008 during the financial crisis came surpassed the 2007 High awesome yeah’s there’s there you been com mother sh no that’s R’s com love it it’s highly offensive as long as you like offensive comedy I love offensive comedy especially Asian jokes I just die just bring on come pick on me anyways uh but I’m uh again just I I completely agree with your point because America like
(54:19) there’s so just like greyber talks about like in the states like there’s so many cities with a population of 2 million or more in the states not like Canada shocking yeah there’s so many options for to move around to where to get a good job which is why uh the property I’m talking about that’s 275 it’s in uh Round Rock which is it’s the neighborhood North North Austin and it’s kind of Northeastern and so about 15 minutes down the road is where the Samsung plant is being built to build microchips oh
(54:48) awesome yeah so it’s a it’s a 4 billion dollar $4 billion investment they’ll have 2,000 full-time manufacturing jobs wow and Sam you know being a Korean company they’re back in Korea still recruiting suppliers to come back to come to Texas and support their bill awesome so that’s how I’m trying to defend and try to be offensive and defense at the same time makes sense so that’s and then that’s my thesis for the entire States as well so for example like Phoenix I’m looking at as well
(55:13) because that’s where Taiwan semiconductor manufacturing compan is open right the world’s largest microchip manufacturing they make for Apple you and I were both Apple people right so then that’s how yeah that’s how I’m defending mine and and and but I’m not I’m kind of preaching to the here about there’s us there’s advantages to the USA investing cuz I know you you you well before I was looking at the US you’ve been looking at the US yeah I think the way to me the biggest thing it’s the
(55:37) everyone’s going to be different to me the US presents a currency play because the US dollar to me is going to hold its value like I mean we’re just seeing it around the world that Fiat currencies are losing value one after another they’re losing them faster and faster the Euro last 10 years has been terrible the Yen oh my God the yen yeah wow for anyone wanted to go on vacation get a cheap vacation go to Japan cuz the Yen’s on sale it’s so cheap yeah I was just telling Nigel he’s got to take me um but
(56:06) uh the uh we were just there to go yeah yeah cool I would love to go um so to me it’s just a currency thing like if you look at the Canadian dollar if you have just Canadian dollar exposure and you don’t have any US dollar exposure and that’s important yeah you may want to consider especially if there’s another generation in your family that’s going to hold real estate you may want to consider getting some us exposure to some property just for the the US dollar exposure if it’s just that um there’s
(56:33) all kinds of other things you need to take into account um but to me that’s just the big picture way to look at it that if you just have Canadian dollar exposure in your life um getting a property in the US would be one way to get US dollar exposure and I think that’s a probably a really good financial decision over the next few years I’m also a Bitcoin guy as you know so to me Bitcoin is the apex predator in the room and everyone should have exposure to bitcoin but that’s a big leap for a lot of people so for them on
(57:02) their own Financial education and financial Journey if they want to get exposure to something beyond the Canadian dollar then at least consider getting us exposure and for Canadians getting an investment property in the US is like a pretty straightforward way to get it MH and I know rockar is a big fan of the build to rent model in in Florida I think we’re more a fan of the people we know like real estate to me yeah team is incredibly important yeah like again we were talking like there’s all these groups and they built poor teams and
(57:31) they’re bankrupt now it’s just completely sad yeah yeah and I think over the years people have asked us for specifically Florida just because so many Canadians vacation there um so much warmer than everywhere else yeah even especially important in the winter that nowhere else in America really is that warm yeah yeah yeah I was just down in Naples and uh nice it’s it was really yeah it makes you question what hey what am I doing up here in Toronto in the winter but anyway um the uh you get the US dollar exposure
(57:59) and uh I forgot what I was going to say there oh the team um the reason that we like Florida is we just know this you know we’ve known Jim now for 15 years we didn’t know the full scale of what he’s doing down there and uh they’re building brand new homes every year in the scale of five six 7 800 and they’re building per year and they’re building them with a tenants in mind so they’re building them so that they know they’re going to rent them out so that the property management can be the easiest thing on
(58:27) them so they’re building them with certain kitchen cabinets and certain counters and certain floors and you know they’re building them with uh roofs that have the proper tie-ins for hurricanes they’re building them at the right elevations so for a Canadian with a lot of variables to deal with when you go into Florida um this is one are a lot of variables what people expect yeah oh yeah for sure this is a a team of people that we feel we can hand off people to that are building the home they’re
(58:51) property managing the home they are handling the maintenance on the home so you’re you’re kind of covered right there’s still risk of course um but that’s what finally got us into Florida it’s like oh we finally found the team that we can say hey irn you want to go down there all right here’s the guy we trust go see him his whole team is going to take care of it they’re managing like 2200 units they got it all figured out now we went down and did a tour to check it out firsthand ourselves multiple
(59:14) times n and I have been down and uh yeah it’s been great and just to when I first saw uh the number of homes they build a year I thought it was a typo I thought there was an extra zero yeah yeah cuz they’re a home builder they’re like a home Builder that used to build subdivision homes they’ve just dispersed to do rental properties in different communities around Florida cuz to give context they would be a top 10 builder in Ontario based on their volume maybe top three yeah I don’t really know I
(59:39) guess maybe they would yeah well just think like mamy can’t build 800 c a year could they I don’t know don’t put anything past mam I don’t know I drove I drove through a madamey subdivision in Florida oh cool and they’re Canadian company yeah I didn’t know they had no idea they expanded right right right unless I miss saww but I’m pretty sure it was the same logo with the same company name on there and these are houses I removed the condo thing cuz it’s way easier to build a verticle like
(1:00:05) to like H these are house builders like that’s an incredible volume yeah building uh the vast majority are infill lots so they’re getting infill lots in existing communities and building brand new homes in there yeah because my context is Steve Ford we know a rockstar member like he builds 100 houses in the season his the Builder they works for right and that’s a whole season like so for to do hundreds hundreds yeah it’s kind of was the appeal to us is that these guys are like the real deal they’re not just building one home
(1:00:34) a year and selling it to an investor they are really doing this for that’s their livelihood that they’re in this business right yeah incredibly end to end yeah right here’s a product we’ll manage it you know it’s brand new yeah yeah yeah and then Canadians get some US dollar exposure I don’t know we’ll see how it goes I don’t know I’m question no LTB right now there’s no rent control I mean real estate you always have to like the the successful real estate investor just has to roll with the punches like
(1:01:02) as you see it with bylaw officers calling you and stuff you just you don’t know what’s coming um so yeah no rec controls the property manager we were speaking down there she was shocked when we talked about our landlord board up here she basically at one point said oh you’re California and we’re like oh is that what you would think of us and uh she said there 45 days and their cash for keys there was like $200 which shocked us but the reason it’s so low is because the tenants know they’re going to be out they don’t like
(1:01:30) to stand on so yeah they you don’t have to pay much to get a tenant out who’s not you know giving you trouble or not paying you can just go up to them and say hey I’ll give you 200 bucks and you’re they they leave so yeah just a very different Market different culture yeah the relationship between tenants I’m pretty sure I don’t know if I remember this accurately I’m pretty sure like the tenant board there like you’re going to the proper Courthouse yeah there is no tenant board you’re going to
(1:01:54) like Court same law law system as everyone else yeah and then um you know yeah there’s still stuff to learn different areas different counties and you know there’s always there’s always new things as an investor uh to learn about and the different rules down there but the 45 days um was really interesting to us and when she told us that to for a tenant to renew she had to give them a letter allowing them to renew the lease and that to me was shocking because you know here if someone goes beond Le goes to month to month and
(1:02:26) there it was directly the opposite so you know I thought that was shocking yeah cuz here as as a commercial landlord like the tenants usually like like pushing you to resign a new lease yeah right versus tenants residential like I month to month automatically yeah I I I suggest all Canadian investors speak to an American investor see the compare differences for sure right yeah cuz like Florida Texas Arizona there Georgia there always going to be the Carol it’s different there is no separate division of government or or or
(1:02:57) laws that are specific to protect tenants and as I learned more even within the state different counties can have different rules for rental property so yeah you just need an experienced team yes you do and even hear within within like Georgia for example certain counties are are they’re more backed up than others or for tenant landlord issues so yeah it’s it’s still it’s still very area specific for sure yeah yeah so can we talk about Bitcoin sure I PEX predator in the room cuz I remember when I first met you
(1:03:30) you were the first person to introduce gold to me as an as the as a a store of value not as an investment I think people need to always understand that like like is that’s how is that still how you position Gold store of value I it’s losing it to me but yeah that’s what it was it’s losing it well if you just look at the ETFs that just came out the the gold ETFs are getting uh they’re losing um investment if you look at just the amount invested in Gold ETFs as the Bitcoin ETF that were’re just five or
(1:03:57) six weeks in they’re coming down in in uh the amount of Investments they’re holding and the Bitcoin one’s like exploding right so is that just partly a shift people are like to raise money for the Bitcoin they want to divest some gold I think so like a lot of investors to me if they were investing in gold they were probably in the store of value Camp because why else would you have gold unless you thought maybe it stores your value and then there’s a to me what’s a better store of value Bitcoin
(1:04:25) comes out and now I can buy as an ETF within my 401k if I’m in the US which I couldn’t until this year just a few weeks ago I’ll reallocate like I’ve seen the you know you look at the comand annual growth rate of of Bitcoin and as January 28th 2024 this year if you go back four years it’s 46% compound annual growth rate like that’s that’s you can’t deny that that’s an incredible growth rate so like if you a sophisticated investor just looking at numbers and you had your gold and you
(1:04:56) had it as a store of value and you consider Bitcoin a new store of value you’d probably want to reallocate some of your gold into Bitcoin and I was a big gold guy because of the store of value thing for sure um but the store of value like the history of money is that to me technology is constantly changing what money is and we are at this weird point in history where technology is in the middle of changing what a good money is again and most people won’t see it until 20 or 30 years pass and they’ll
(1:05:28) look back on this moment going oh my gosh like I guess Bitcoin really did do something interesting so business case is there for it now it does seem like we’re you know since came out in 2009 we’re now 2024 I remember I thought it was a tulip and it was going to die I remember when it went yeah I thought I would dismiss I’m like what is this garbage like I’m I’ll come out with the Rockstar coin how about that you know I just didn’t understand the characteristics of Bitcoin at all I didn’t understand that there was an
(1:05:55) asset a digital asset and that it was a network so I didn’t understand that Bitcoin was really two things in one um and I just dismissed it and then in 2020 is when I went down the rabbit hole and I freaked out and I realized I was wrong and uh started paying very close to it attention to it and now I can’t stop thinking about it because I I do believe it’s the Apex monetary predator and I do believe that it’s going to be a network that sucks in a lot of value and when Network effects begin they are very difficult to stop so by
(1:06:29) way of example I would share with you Voiceover IP Voiceover IP came across with tcpip or the internet and it almost destroyed the phone companies the phone companies as they exist today the mobile phone companies only exist because they sell data they’re not selling anymore like Bell’s not selling landlines anymore so this new network came in and uh destroyed an ex existing model and those businesses all had to change like dominant businesses with with all you’re talking about Bell Canada Rogers these
(1:07:03) companies all had freak out moments that had to change and um I just see it now happening on the monetary side that there’s a network an open- Source protocol it’s permissionless The Ledger on it is immutable um it’s changing things again where now the banking system is going to have its freakout moment as more and more monetary value gets sucked into to this network and to me it seems inevitable I know for many people that would sound like it’s crazy but to me it seems inevitable and that’s
(1:07:33) why it’s kind of captured my interest and then if you look at compound annual growth rates now with some history it’s just remarkable like it’s it’s kind of it it it makes you question like what are you investing in like why aren’t you paying more attention to this thing you know the whole Jour my own journey is like your life your terms you know we talked about Rockstar and stuff but really like I just want to live my life on my own terms and leave me alone mhm and that’s what got me into real estate
(1:07:59) now there’s this other thing that’s just kind of got my attention and you can’t stop thinking about it once you kind of go down the rabbit hole or when it’s dangerous it is dangerous suck you in it’s a Time suck yeah I don’t know you’re pretty you’re pretty good defending your time but that one’s that one’s probably a tough one that one’s tough especially now cuz I must be yeah like I must be thousands of hours in now so so yeah it’s it’s a tough one it’s a
(1:08:22) tough one yeah it’s actually one of the it’s sounds stupid I say it this way it’s one of my biggest disappointments of Co because the lockdowns meant that we couldn’t all be in the gym together yeah and then when I got back in the gym you guys were already like like a couple thousand dollar ahead of me on bitcoin I’m like I’m like f i i loost i i had all this opportunity cost I I could have made so much more money if not for Co I remember when I had my moment I was sitting in the office because our office
(1:08:54) was open but it was on lockdowns but we were legally allowed to be open and it was me and Nick and one other person the three of us and I had the moment where it all just made sense for me and I ran to Nick’s office and I’m like I was so wrong on bitcoin we have to get into this and you’re right it was just at that moment where none of us were hanging out together um and so I didn’t see you to like I was so when you had that moment it probably like I was like four months behind like in back corner
(1:09:18) had gone around yeah that was a pretty important four months yeah damn it so damn you okay it’s got a lot more to go every you’re good you’re good uh where can where was where’s a good starting point for anyone to learn about Bitcoin CU I you were the one that got me to read the Bitcoin standard by yeah I guess it just depends what your background is like yeah if you are into economics and money and you have a little bit of History um reading about that stuff the Bitcoin standard by safine amuse is probably the best start
(1:09:46) the first four chapters or 72 pages of that book laid down in a beautiful case uh for it if you want a shorter thing there’s uh a medium article by VJ boyapati and it’s called the bullish case for Bitcoin so if you just Google like the bullish case for Bitcoin VJ um you will find that Medium article he actually turned it into a book now as well but it’s it’s originally a medium article that is an easy read that lays out a wonderful description of what Bitcoin is both the digital asset and the network component of it and how to
(1:10:17) think about it so I think that would be like a really really good entry point into it and then of course Jeff Boo’s book really kind of connected the thoughts for me because he doesn’t talk about Bitcoin but in his book the price of tomorrow he starts outlining um technology productivity gains and how that works in a Fiat based debt-based money system and once you read that book it really connects a lot of things together and uh that that to me is if you’re not into the money side of Bitcoin but you just want to understand
(1:10:48) what’s going on in the world with technology yeah with technology Tech yeah that that would be a good read so if you’re a tech guy yeah me too but again it’s it’s more of like a macro book in general yeah totally y I think he us word this is why we get along yeah yeah for sure yeah macro understand macro you read this I think that’s why I like Bitcoin so much is like there’s just so many layers to it it just uh yeah it’s a remarkable thing like I really feel like fortunate to be able to be here at this moment in
(1:11:18) time for sure and Bitcoin standard I thought was a wonderful history lesson of nothing else even if you don’t like the Bitcoin orrect just history of money yeah it gives you like a context or a framework of how to think about things seashells yeah uh copper coins Stones silver how silver got killed by gold yeah stock to flow ratios how do they work yeah how and the the ultimate like you know there can only be one yeah there’s a line in that book it’s page the the top sentence on page 34 is this your Bible you have like all highlighted
(1:11:46) and yeah probably yeah I’ve read it a few times the top the top uh I think it’s there’s a new edition so it might not be page 34 anymore but page 34 the top sentence on that page basically the sentence uh the you know the idea behind the sentence is you can ignore Bitcoin but it’s at your own Peril because the hardest form of money always wins yeah so it’s like you can why I said there can only be one yeah so like you can choose to ignore Bitcoin and laugh it off but just know that your purchasing power in Bitcoin
(1:12:19) terms is dying over time so you can ignore it but you’re doing yourself an injustice at this to IGN it and we’re not saying load up no you should have some exposure yes everyone should have a little exposure yes you’re laughing you’re smiling at me yeah what whatever’s right for you have 2% 5% something I don’t know it’s just everyone’s different like like we said it’s like real estate everyone’s different what’s right for me is not right for you it’s not right for
(1:12:46) whoever’s listening it’s just you’re everyone’s on their own path you know so yeah yeah I’m I’m yeah I’m a I’m a bitcoiner now can we talk about marketing sure because part so again I told I told you I I like I study both how to make money and how people lose money so I I I dig into how these like recent bankruptcies I dig into I I research like what happened what did they do how did they raise all this money sorts of things so for example like the the folks who are in Northern Ontario who recently uh going
(1:13:23) through bankruptcy credit bankruptcy protection uh like for example it’s quite obvious just actually just a little bit of clicking that they for example they bought hundreds of thousands of Instagram followers oh jeez right okay so stuff like that and like to me like I’ve been around long enough to know when someone’s bought just when they have absurd numbers of of whatever followers I guess or or yeah or some even if someone even old old school is someone that had like an enormous email database but they didn’t build it
(1:13:53) themselves I know I know they bought it right this no different but you know ever since I’ve known you and then you introduced the world the world of Dan Kennedy to me which I greatly appreciate someone just recently complemented my Marketing Systems which awesome which I largely borrowed from yeah from yourself and and this fits into the whole your whole abundance mindset I don’t know if I said on the recording yet did I say on the recording yet like dreams so big that everyone else’s dream can fit
(1:14:19) within yours right because yeah you and Nick are incredibly transparent and everything you do is basically available to we try to be yeah yeah yeah and where was I going oh yes so I’ll just say like you guys seem to have done everything the right way you only have 20,000 Instagram followers yeah yeah I know how hard you have to worked for it you didn’t buy that no no and that’s largely my son who’s taking our content and doing stuff with it but yeah yeah no we didn’t buy it no and I don’t want too much too much attention
(1:14:53) on Instagram cuz just from my own experience my email database is what converts sure for sure yeah can we talk about that is that is that still where things are is that still is still building the email database is that still a priority or is it should you focus on your Tik Tok okay so when it comes to marketing the way I think about it is remember my life’s kind of motto is your life your terms I want to live my life in the way I want to live it and marketing so why we talk about real estate and that I’m a
(1:15:22) Believer in real estate is because the leverage of real estate gets me Financial gains that are enough that are going to allow me to live life or help me at least live life on my turns the reason we talked about Bitcoin is similar reasons the reason I like marketing so much is because if you understand marketing you can build a life on your terms because I found in business very few people know how to get a new customer they have an idea they can rent a place they can create letterhead they can create a website so
(1:15:52) if you understand the principles of marketing you are like going to do what really well in whatever business you’re going to open whether it’s a car wash a restaurant or real estate investor and the principles of a marketing are to your email question to build a database of people that have in some way shape or form raised their hand and identified themselves as someone that’s kind of sort of interested in you and what you have to offer and the best way for me to get people to raise their hand and
(1:16:20) identify themselves is by getting them to share their email address with you so yeah to answer your question email is still amazing because you own the email address on Instagram Twitter Youtube Tik Tok those companies control the users that are subscribed or are following you whereas an email you own that email address so you get to email it you have to might be fight with a CRM system to like get your email out and there’s like spam complaints and different things if you’re doing it incorrectly But
(1:16:49) ultimately you own the email that’s a very powerful thing to me in business the relationship that you have have with your database is the most valuable thing you can have because there’s going to be some people who love Irwin and what Irwin talks about so much that it doesn’t matter if irn goes and starts a business that’s you know you can go start a restaurant tomorrow but you’ve established a relationship with the people they trust you and if you’re going to start a restaurant they’re
(1:17:15) going to come and eat at your restaurant because of who you are and what you represent to them so the a business owner’s relationship with their database is the number one asset that they can have it’s not the office space they’re in it’s not the name of their company it’s that and so few people understand that and an email address is the best way to build it then you can layer in physical mailing addresses phone numbers if you want to start texting people you can start doing all these weird weird
(1:17:40) and wonderful things but email is an absolutely critical way it is the best thing to be building because if you get shut down of Instagram you’re still going to have your email addresses or when uh musically when that went down I remember that was a huge such not a music guy but sure okay I believe you was but then was was what was Tik Tok before musically was sorry was Tik Tok musically before I think that’s what happened I think what that but then all these influencers they’ve lost their million subscribers or whatever yeah and
(1:18:11) then it’s on you once you have a database the onus is on you to prove to prove that you are sharing valuable information like if everyone just sped out to your email list garbage people are eventually just going to unsubscribe and you’re gone so like now I like that relationship share part it’s like oh the onus is on me the business owner to share such good value that people are going to keep interest in me and then every once in a while you’re going to ask to do business and because you consistently offer good value people are
(1:18:38) eventually going to come to trust you and with trust they’re going to come to like you and when you make an offer to do business with you some people are going to raise their hands and say I’ll take the next step and I’ll proceed to do business with you and it’s just to me the most wonderful way to do business is that build a database of people who are in your topic or area of expertise offer a lot of value follow up consistent consistently with that comes trust and the uh the person who’s reading your
(1:19:05) information or following you they’re going to like you then the ultimate sale is easier so it’s it’s just like a beautiful thing and to me marketing once you understand the principles of marketing you can go to Texas tomorrow use the exact same principles that you’re doing Irwin here in Ontario to build what you want to do in Texas and it’s going to work M just like real estate has principles to it marketing is going to have principles to it so it’s total freedom like it’s it’s it’s the
(1:19:31) biggest thing and nobody believes me and understands it and it seems like in the real estate World everyone just runs around on Instagram trying to get followers and everyone just yeah it it just seems like everybody you know what I guess the way to look at it is there are principles to anything there are strategies and tactics and in the marketing world everybody plays with the tactics everybody does like the quick new thing on Instagram that’s a tactic the quick new thing on Tik Tok that’s a tactic the quick new thing on Twitter
(1:19:59) it’s a tactic very few people have a strategy around their marketing and very few people understand the principles of what they’re doing and I think what Nick and I have done over the years is we tried to understand the principles of what works in marketing then Implement a strategy for it and only then choose the tactics we’re going to use in that strategic implementation I think the I think that where people most fail is like anything we like we call it the content treadmill yeah like the regular communication with your email
(1:20:29) database minimum a week yeah uh I think we’re two I think you guys are like three times a week and that’s that is the content trial you have to keep MH keep in touch with your database and then some some of these people you call as well so like oh that’s work like yes it is work but this is how you get results yeah it’s called sales yeah if you have a business like if I had a Subway sandwich shop that was next to subway station that was was really busy I probably didn’t have to do the content
(1:20:57) Triad Mill because people are going to be walking by every day and some of them are going to be hungry and they’re going to sell them a sub that’s something corporate has done your marketing for you yeah there’s that there’s that to yeah so but let me but even if I wasn’t to go to the corporate level if I was just a noname sandwich shop in front of a busy place I’m going to get some business but when you’re a service-based c uh company and you don’t have potential customers walking by your
(1:21:20) physical location well then you better be doing something to get attention and that’s why you have to produce content so you do a really good job at this you’re putting out emails and podcast I know you are in videos and you’re hosting class and you’re doing all these wonderful things and that’s how you get people to see what you’re doing so it is a Content treadmill in business especially service based businesses but there’s no really other way to get people to kind of walk by your store
(1:21:45) unless you’re putting out content if you’re putting out content you have people kind of walking by your store just virtually mhm you know so yeah it’s tough but I mean the opportunity for anyone listening who does the content is incredible because no one’s really doing it yeah everyone’s just kind of like half people can’t stay with this no like how many podcasters we know just even our in our friends group who haven’t made it past a year yeah let alone six months yeah yeah are there a bunch yeah
(1:22:14) I don’t even track yeah yeah but I guess that makes sense people start and then kind of give up on it yeah and that’s where there’s a there’s a time and place for giving up but those who can or just even just keep like keep shifting like for example no no different than my my investment Journey like it started with single families did some non-conforming multies and then the city was cracking down so then we went to student rental because we could get it done pretty easily and we can conform with all with
(1:22:39) all bylaws and whatnot and then duplexes CU like oh because student rentals the financing was difficult so then legal duplexes oh completely clean for financing then do that and then like oh do is cash flow enough oh we got a garden Suite now right so but again sticking with you got to roll with the punches yes yeah and then but I’ve been punched too hard so I’m going going south yeah yeah well you’re just changing your approach and I’m sure there’s listen there’s going to be punches for you in Texas
(1:23:05) let’s face it it’s like real estate like there’s always punches I mean no worse guns yeah yeah yeah I never really thought about that we were talking about it earlier yeah I don’t know I’m not too scared of the guns you brought up the guns in Texas I don’t know I’ve researched it too much you dig into Vic I dig into my personal safety okay I do have to admit the last time I was in Florida I Hon the horn at somebody and I just then I remembered I was in Florida I’m like holy [ __ ] duck I don’t know
(1:23:30) what’s going to happen but uh they have a gun in their cuz when I was in Texas like I did not see anyone carrying a gun law enforcement so I was thinking I was thinking about it like if it was me it be such a hindrance to like to like wake up every morning and Holster up or whatever and then like there’s all these private businesses that don’t allow open carry right so you can’t you’re not supposed to carry the gun and so so yeah I guess everyone’s gun is in their glove box I guess I remember going into a
(1:23:55) restaurant long time ago at a marketing conference in Scottsdale Arizona and the restaurant said I I don’t know if that’s a conceal in K State or whatever you call it but the restaurant the entrance said this is a like a No Gun Zone please leave your guns like in the car or at home or not in the restaurant and I’m like this is wild I’ve never seen this kind of sign as you enter a restaurant before so uh I guess I guess in that state maybe you can have concealed weapons on you um recently I was
(1:24:23) somewhere was it last year I was in Arizona maybe it was in Arizona I saw somebody holstering a gun walking around but uh yeah different uh we we need to talk about the conference your sorry your member event it’s not even really a member event because you do allow Outsiders yeah we kind of usually have like about 50 to 100 tickets for people who aren’t clients of ours so not many no yeah no um so it’s uh yeah it sounds like a lot to some people but there’s sometimes over a thousand people yeah
(1:24:49) last time was our biggest one we hit 1100 people um this started you like this started with our account you know how this like started with our accountant who would come out and just talk about like a tax tips for Real Estate Investors and someone was like can you do that again and it just rolled um so it started with 50 or 60 people at the Holiday Inn in the basement of the Holiday Inn at Bronte in qw in Oakville but anyway uh yeah Saturday April 6 will be the next one we haven’t released the the um speakers yet but um there’s going
(1:25:15) to be a thousand people there and the sponsors are always uh great people and uh yeah because you don’t let anyone sponsor I know yeah yeah yeah yeah it’s it’s yeah we kind of are a bit chosy on that and uh yeah it’s fun so the next one’s Saturday April 6th and if you’re following us in any capacity you’ll hear about it because we make a big uh Big Show about it um and yeah we’re excited for it it’s nice to get everyone together it’s like you know how it is with Real Estate Investors we don’t all
(1:25:40) get together it’s not like going to the gym every day where you cross path with people or the your favorite restaurant you see the it’s a bit of a reunion where we can all sometimes just commiserate like about interest rates and like the tenant board and sometimes it’s like a support network you know when things are going great you’re cheering and when things aren’t going the best you’re kind of just supporting each other so to me it’s an important event and uh we have fun with it you know last time we had Jeff Booth
(1:26:05) out there that was a really good talk and uh this time I I think we have some great people and uh I’m just not going to share just because we haven’t put it out yet but yeah Saturday April 6th you’ll hear about it yeah if anyone enjoyed this podcast for example like what we just talked about today you’ll do basically in a longer format that day we’ll talk about macro I’m sure we’re going to talk about Bitcoin yeah we’re going to talk about development or like yeah we’re going to dive into the
(1:26:28) Ontario Market pretty deep this time yeah and also very micro level you’re talking about specific markets correct like what specific rental properties are doing correct right you get you know go from the again you go from like the global all the way down to the property right yeah numbers profile neighborhood yeah right yeah and I think we like to have fun with it I think this this this time the theme is going to be Indiana Jones last time Matrix is it I haven’t seen anything yet I can’t wait not yet
(1:26:52) we haven’t released anything but Anthony on the team has an old motorcycle that kind of remind us of an Indiana Jones kind of motorcycle so we think we’re going to try and tell the hall that it’s not operating even though it totally is and it’s just a prop we’re going to try and bring the motorcycle to the event I want to see you Nick crack the whip on stage I want to hear it from the back of the room like oh my God yeah yeah yeah we’ll have some fun with we are ordering some whips and some Indiana Jones hats for
(1:27:17) those are toy ones I want to see a real I don’t know is it a bull whip I I want to hear it I want to see someone crack it on stage even better if you have a Target to hit with like a oh man and everyone I just want to thank you like thank you for supporting us and being part of this you know Journey you’ve uh you know you you came on um and have done your own thing in an incredible way so it’s been awesome for us to watch what you’ve done as well so congratulations on everything you’ve done and it’ll be uh when you’re the
(1:27:45) mayor of Austin or San Antonio or whatever you’re going to have to let us know I don’t want to get shot at but you guys took a flyer on me because I don’t think I’ve mentioned that in a long time cuz uh at the time I was the only person to join the team who was not a member mhm yeah yeah wow really was that the case and I think I’m the only one that’s worked out yeah maybe anyone else is it CU actually it’s a rule it’s a rule now you may not join the team unless you’re a member yeah we
(1:28:09) have some people on the team that have been friends of mine uh that have joined Rockstar now over the years that’s different you didn’t know me yeah no we didn’t yeah yeah yeah you’re right you might be the only one irn yeah set the president set yeah cuz again like many people didn’t stay I think almost nobody stayed so yeah I probably G gave the wrong expectation let’s let everybody else in oh my God this is terrible it’s not a numbers game no yeah yeah y yeah we’re kind of choosy who we yeah we’re not a
(1:28:42) bro Rockstar is not a brokerage that is looking to attract a lot of Agents we’re kind of consider ourselves a boutique place that’s doing a pretty specific activity and um yeah and certain people fit into it and certain people don’t but we’re not trying to get like a million real estate agents that’s like the last thing we want right we’re really trying to work with investors and and you know build something and we’re not just trying to talk about real estate we’re trying to talk about all aspects of Life how to
(1:29:09) make it all work yeah and it’s a complicated business and there’s lots of rules and stuff we have to follow I can’t imagine having to hurt all these cats and lots of personalities yeah lot personality Tom I like to give my guess always the final word like anything in general you want to say anything anything don’t e just don’t say don’t eat the ell you know what you saying that you you mentioned something about dreaming big and stuff earlier I somebody had a big impact on me once I was a author and then I I um and I
(1:29:39) forget the name of the book and uh in the book it basically said if you want to have a big impact in your life then you need to impact your community and if you want to have a big impact on your community you need to have an impact on your Province and if you want to have an impact on your Province you need to have an impact on the whole country basically saying that like if you really wanted to leave a lasting impact of what you’re doing you have to think bigger and Beyond yourself one level higher and
(1:30:16) it’s kind of always stuck with me like what can we do as a business or in life with my relationships where I can impact people Beyond me directly and it’s just something we try to live by by doing different little things and it might sound cheesy but to me it’s like you know we’re trying to impact people and we’re trying to do it at a level that’s beyond us and it’s forcing us to think a little bit big in our small little business we are trying to think big you know so it’s something that stuck with
(1:30:46) me yeah I think you had a lot of impact yeah you probably have a couple hundred million years in your among your clientele like so that’s that’s like how many people can say that yeah yeah yeah but thanks everyn appreciate it man thank you thank you 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.com my guests and if you’re
(1:31:25) just starting out feel free to ask questions and comment 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 tr.com

** Transcript Auto-Generated**

(00:00) greetings everyone I just returned from a trip to Calgary to meet up with some clients real estate investor friends Cal mortgages and attend a friends wedding in Calgary and Canmore Alberta welcome to the truth about real estate investing show for Canadians my name is Irwin I am a Canadian host and producer of this show since 2016 300 plus episodes that’s and they’re all over an hour long over 440 million in investment real estate transactions uh as I my team and I are the four time real for the year two
(00:30) investors in Ontario Real Estate presently I have 45 millionaire clients U that’s millionaire and multi-millionaire real estate investor clients and I’d like to get that number up to 200 within 10 years I’d also like to have dozens and dozens of clients who cash flow over six figures a year uh again I just recently returned and canmore and B are so beautiful Lake Louise Shad out Lake Louise if I couldn’t live in BCR or Ontario like like most Canadians I’d probably end up in Calgary as I like the vibe the mountain views
(01:02) are they’re always there and they’re incredible people are nice world class G is only two hours away uh now apologies to my uh Edmonton bull friends and Edmonton edmontonians admittedly I’ve never been uh but uh you Edmonton bullish people need to really talk to your friends in Calgary as they don’t seem to have many nice things to say about about the about living in Edmonton maybe it’s a hockey rival rivalry thing uh apologies for their ignorance I just Google mapped it I had no idea that M
(01:34) antonians have to drive through Calgary to get to banned for Lake Louise or Canmore uh investment wise no I’m not interested in Calgary Edmonton uh the stuff is pricey holy cow and then forget camore where where I met with an old friend who is a city counselor in Canmore and he he informed me that the average house price in camar is $1.
(01:55) 4 million Canadian uh and also I was speaking to a Garian and Ryan day of Calbert home mortgages uh when we compare numbers uh he was sharing how he recently uh acquired a duplex with the gar detach garage and his combined rent uh the rent to price ratio uh is the same as I can get in the US on a single family home so I have less tenants and again I have the same rent to price ratio um and also for for those who already own multi Family Properties like including duplexes or triplexes ask any one of those investors if you don’t ask
(02:33) anyone of those in any one of those investors uh because aside from how expensive it can be to renovate a base a basement apartment uh I heard from a GTA contractor just yesterday who came into Rockstar real estate to uh to share about his Services the estimate uh including the permit time and the execution of the renovation you’re looking at 5 to 7 months so you’re 5 to 7 months with the V vacant uh assuming everything goes on time and uh the budget should be around $130,000 just for the renovation that doesn’t does not
(03:04) include carrying costs and again that’s assuming everything goes smoothly and we’re also talking about a house that’s probably at least 70 years old uh in my experience uh tenants so again I’ve done a lot of duplexes I have a good number of them in my own portfolio so in my experience tenants do fight uh that’s natural this this human behavior there’s noise transfer there’s smell transfer I had this one tenant complain about uh every time the basement tenant was smoking weed in the backyard now the
(03:35) tenant has a right to smoke in has a right to smoke weed he was actually smoking weed in the shed in the backyard yet my main floor tenant always complained about it anyways I’m looking to simplify I’m on a different Journey the most which is totally cool everyone has to go on their own Journey I’m looking to earn US dollars because US dollars are better than Canadian dollars if you don’t believe me just look at the amount of debt our country is taking on compared to the Americans Americans take
(03:58) on lots of debt too the Canadians are just especially good at it in terms I’m talking about government anyways I’m looking to make my investment more passive and as passive as possible with as little risk as possible I’m also making plans to fly out to Atlanta with cherry to Vacation post tax season we’re going to check out some properties we’re going to make it make this road trip we’re going to drive up to through Chattanooga through the lookout mountains we’re going to make a stop in
(04:22) Nashville of course uh and continue on our way to Memphis along the way we’re going to hit some serious iconic attractions like look up Mountain that I mentioned which is in Chattanooga which is on the border of Tennessee and Georgia we’re going to visit the Coca-Cola Museum and of course you know when you’re when in Rome the whole thing we’re going to visit graceand Jerry and I aren’t Elvis fans but again when in Rome you got to check out the the the home of Elvis Presley anyways tax season
(04:50) ends April 30th and that’s when I that’s when I joking jokingly say I get my wife back we sold uh we sold one of our student rentals which closes May 6 hence we’ll be shopping in May for a new income property or two while on our trip I had have I I’ve had or have three listings of income properties at the moment all the different stages and we’ll I’ll update you next week on what I’m seeing in the market on the ground and uh it’ll likely surprise you on to this week’s show someone who’s polar
(05:21) opposite to myself I like lazy investing we have uh a fully involved active investing investor uh including having executed on 150 or some deals in 2023 so 150 deals so that’s like almost that’s almost a deal every other day basically and that includes 50 flips that’s 5- Z and this is this is luk Luke boy wrong who is as far as everyone knows is legit he’s not one of these uh fake gurus out there Luke lives in Ottawa yet he has flips as far as way a far as away far away as Vancouver and while flips are sexy
(05:58) people love to watch them on TV or take coures on Flipping well I’m sorry I’m I’m sorry not sorry that we have Luke to share the behind the scenes on why he’s flipping and it’s not what you expect Luke is the founder of bliss realy former lawyer he also has his NBA smart dude obviously one of he’s one of Canada’s leading investors he has a massive team around 30 people and he has an even more massive advertising budget but don’t worry L going to tell you how he would start how he would start uh his
(06:29) business over if he was a brand new investor today so again he’s a legit investor and he even has some stories about fake it to make it investors who failed to close on buying wholesale deals from him so listeners never forget the community is a very small one we all talk we know who is who is fake it till you make it and we know which uh we know who the gurus are who are fake it till you make it and where they learn those strategies from so as the Warren Buffett says it takes 20 years to build a reputation and five minutes to ruin it
(07:00) if you think about that you’ll do things differently Luke also recently launched his podcast the selfwealth real estate podcast available on Apple podcast and my favorite platform Spotify again it’s called self wealth real estate podcast please enjoy the show Hi l what’s keeping you busy these days uh a lot of flipping houses a lot of Renovations going on that’s what’s keeping me busy that’s interesting because uh from what I know of you is uh you do a lot of wholesaling and now sounds like your mark business has done
(07:36) a pivot yes yeah uh basically our buyers a lot of our buyers stopped buying flips so we started buying them ourselves if they made sense to flip and started flipping them ourselves um you know we had about 35 employees in the business and if we were just relying on the wholesaling we would have had to drastically shink uh shrink our company and get rid of a bunch of people and we didn’t want to do that we have a really good team so we kept uh we kept our team and decided to Pivot switch into flipping and now we’re he we’re flipping
(08:06) heavily um we’re still wholesaling I think uh I think 2023 we did something a little over 150 deals in the year um sorry just wholesaling or flips combined so about 50 something flips I think I don’t have the exact numbers in front of me but I thought it was more 5050 but I guess I guess what really happens the wholesale deals are also much smaller deal smaller assignment fees um whereas the flips are well some of them take a lot more time uh bigger projects for sure fascinating and but like your staff
(08:42) though like wholesaling and flipping are really different businesses like did your fli your your St your in office staff now got strap on tool belts and start hanging drywall like what no no I mean and when I say 30-some plays that’s without contractors we actually have in our Ottawa brand we have two contractors and a construction manager and Ottawa is like our best flipping Market we flip a lot in Ottawa um and that’s partially because we have the team here and I also live in Ottawa now so I go see the job sites and
(09:14) things like that and the price point makes a lot of sense for flips so we flip a lot in Ottawa and uh yeah and then a couple other people who had different roles like one of our we call them closing concers like a transaction coordinator became a project manager for us so um the way the way I run the flips is I have my construction manager in Ottawa and then I have two project managers that are kind of like assistants to me and so they coordinate with all the contractors and and the details they know the finishes we want to use and any
(09:42) questions they have from contractors they they either Loop me into the call or they relay the questions to me to get answered and then uh so they’re kind of extensions of me to get these Renos done and and that’s how we we manage about 20 flips at a time yeah in different phases uh how many of those those are local versus across the country um I would say a a little less than half are in Ottawa probably about a third are local uh 30 40% and then a good amount in um in the greater Toronto area but that that range is a decent
(10:18) amount I mean we’ve done when I say Toronto for us it’s everywhere from you know Hamilton Niagara region Kitchener uh Stratford North Bay Midland aelia these are all flips we’ve done this year Peter bro Lindsay so those are uh Bowmanville those are all stuff we’ve done this year so it’s a pretty wide area that we cover that way um and then we have uh a few flips going on in Vancouver um and occasionally stuff out in Montreal as well those are I find it much harder to do the stuff in Vancouver in Montreal
(10:54) just um Vancouver in particular we just aren’t set up well for the flips and the distance makes it too hard for for us to check out easily we have you know a couple on the ground team for our acquisition like for a wholesaling business but it’s we’re not set up to flip well there so um I would say our Renos took way too long on the last couple projects there and the next ones we do we’re going to do much only focus on ones that are smaller Renos just the difficulty to manage Renos at a distance
(11:22) can sometimes be a little too hard so it’s more the distance than say like learning curve or like mature m maturing of the team there’s um an accountability aspect that if you’re not showing up regularly makes it harder in Ottawa and this might be Overkill but our construction manager basically drives from job to job all day so um you know he’ll he’ll visit every job site at least a couple times a week that we have ongoing in the auto area and that kind of keeps accountability going it also allows you
(11:54) to catch stuff ahead of time and um and this is it it’s a bit of a management error I would say on our side but there’s also an element where it’s kind of out of sight out of mind if you’re not I don’t know for some reason both myself and the project manager in charge of it it doesn’t we don’t prioritize it mentally as much the Vancouver job sites and so we’re not as on top of the contractor to make sure they’re showing up every day and everything’s happening the way it should
(12:22) so I would say other people could manage at a distance better than we did um especially because we do have some two people locally who can check in on the job site if we wanted them to um plus we have a really great realtor we work with in Vancouver um who obviously lists all of our properties and also we’ll check in on them whenever we ask her so um I think we could do a better job of it but we haven’t been so um kind of acknowledging we have some weaknesses and instead of trying to fix them where we’re not uh it’s more balancing how we
(12:56) operate to make sure they’re not going to be it’s not going to be it’s not going to affect us negatively in the future so thank you for raising that uh sharing your experience and and doing heavy construction like maybe that’s not return but active construction whatever it is because my advice to my clients is if you’re doing a major Rena even if it’s like a kitchen redo bathroom floor like that’s going to be a couple weeks and I’m sure it’s faster for you but like for example like a basement
(13:27) apartment that can be that can be months for example and so my advice my clients is someone needs to show up at least once a week and almost all my clients resist but your experience is the more often you show up the better absolutely at least once a week on an active because I’ve seen basement apartments take a year two years right it’s uh you get excuses from a contractor you’re waiting on you know I don’t know the architect hasn’t done the drawings they’re dragging things out you need to
(13:55) find a new architect you bring in this contractor they’re blaming delay on the plumber etc etc and just time disappears and time is money especially if you’re carrying something on like a private mortgage to get those Renos done really costs money so you have to be really on the ball with your Renos and I mean one of the nice things is if you’re showing up several times a week to the job site and the contractor is not there you f figure out pretty quick you need to fire them and move on to the next one right
(14:21) like they’re not there once like oh yeah well I gave you a heads up that we were going to be off this week for this reason okay perfect so you’re there all of next week great show up next week they’re there hey what’s going on Cu uh this isn’t working because they will not volunteer information that they’re not there yeah and it helps to put up cameras too um we’re not religious with doing this very well but we we use uh a combination of wise cams which are pretty cheap you can put in the memory
(14:45) card in them um so you can watch the playback without subscribing um with uh I mean on a longer Renault it’s actually worth paying for internet but we often use like SIM card internets with I think it’s called a rocket Hub or something like that so it’s a wireless mod we put a tablet SIM card in it and then um it’s enough data you know four to 10 gigs a month it’s enough data to uh to be able to put up a camera or two on the job site so it helps for you know protection of tools and break-ins and
(15:14) things like that but it also you know you’re pointing at the driveway you know when the contractor shows up right yeah yeah I have friends who would uh they they pay a neighbor to be able to put a camera on their property steal borrow their internet to put train the put the camera on their yeah absolutely and then um and then they they catch people stealing materials from their site for example y so yeah good good Pro good Pro tip for the listeners benefit uh now Luke before we’re recording um like you’re probably one of the biggest in
(15:47) wholesaling definitely wholesaling for sure in in Canada um and and before we’re recording I asked you how’s business can can you share how how’s business we’re recording in January by the way 2024 yeah um I mean it’s uh I think everyone’s hurting in the industry we we like I was saying earlier we have a big team we’re basically flipping to pay the bills and stay in the black we’re not we’re not trying to make uh make a bunch of money uh though I am optimistic we’re we should be making
(16:17) money in 2024 um but uh it’s nothing like obviously 2022 2021 it’s nothing like those years where the market was crazy hot um because we have the overhead we have plus uh buyers aren’t buying the wholesale deals so our margins get thinner we sell fewer of the deals and then we need to flip which takes a lot longer um to uh to get the money out of a deal right so to carry these properties now too yes absolutely and then you know obviously there’s a reason why we were wholesaling instead of flipping was you know you
(16:51) don’t have all the transaction costs uh on the front and back end of the deal so uh the flips have to make a lot of sense so you know your property tax bill must be enormous sorry your your like you mentioned Toronto Toronto has double double the land transfer tax yeah land transfer yeah every time um actually a little does Vancouver have anything like that yes they do oh God no but it’s not sorry it’s not I don’t think it’s double I’m trying to think I don’t think it’s double uh which is good actually I I
(17:23) interrupted you sorry no no no and well I was going to say one of the nice things Vancouver is they have a different structure for realtors and the way they price things um again you know typic whatever you expect is typical but they typically charge something like 7% on the first $100,000 sale price and then two and a half% thereafter total this is for both sides so it’s it kind of makes them you know hey we have to fill out the paperwork we have to create the listing we get you know more early on in at the for the just for creating
(17:56) the listing we get more on the first 100 000 so if you’re listing a $200,000 house versus you know whatever like it it doesn’t make as big of a difference in the sale price so when you’re listing Vancouver is an expensive Market when you’re listing a house for you know a million and a half um it actually costs a lot less of commission than it would in the GTA and I’ll just add to that though like people are free to negotiate I do believe that structure is legal in Ontario as well I’m not a lawyer I
(18:22) haven’t looked that I know you’re a lawyer but I I should probably look that up after this show if if because I’m pretty sure that that commission structure is legal in Ontario as well yes the question is how do you offer it to because the other in in Ontario depending on the city you’re in the buyer side agent’s expecting between two and two and a half percent whatever’s the norm in the market you try to undercut that they may not even show the property I know that’s the reality of
(18:48) the market yeah the reality is they may not even show it so I always pay the buyer agent whatever going rate is in that market and there are some markets where it’s 2% there somewh it’s two and a quar normal some two and a half so we pay whatever is normal in the market but um that means in Vancouver it means we’re paying about three and a half on the first 100,000 and about one and a quarter on the next on everything thereafter to the buyer side which is a just an interesting structure and I didn’t realize that you know uh going
(19:17) into that market in the first place which is nice and uh yeah I just add to that that comment it’s a with technology and I think we have like 70 or 90,000 registered agents on the Toronto real estate board alone like you would think prices would come down like commission like total the commission total commission number would come down so you would think but the result is instead the marketing spend for realtor goes up right Realtors just instead of bringing their commission down they spend more on marketing is what I
(19:52) usually see because they make so much when you do get a good client right or or get a full a listing with a full commission you do make um such a large amount that instead of cutting down what you’re going to make you just find more I find you typically Realtors find more clients but a good realtor is worth their weight in gold and from someone who does a lot of volume thank you for the kind words now I want to move on to um we’re like you mentioned how it’s tough times for many people and you and I were
(20:22) discussing before we started recording how uh there’s a lot of people who are talented and are having a tough time and uh just like yourself uh I don’t think you’re having as tough time as many a lot of people we know uh but I was saying how um like if you’re talented and you’re hardworking survive this period and you will Thrive over the long term what what what do you think about that oh absolutely and you know what the biggest difficulty for my company if we’re talking about that is just the size
(20:54) right I have 35 employees of overhead to pay we have you know High marketing budget Systems Technology we have big overhead to pay if it was just me then I would just do fewer deals but you know i’ make a little less money but you’re not worried about I I would say kind of um making sure you’re not losing money right overall or not losing a lot if you’re you can cherry pick right now you can be a lot more cautious as an individual investor but you can still do deals there’s still ways like there’s still opportunities I
(21:26) mean with Bill 23 with three units going in some cities allowing four or more um I find there’s still opportunities in this market to even get into the rental space right now um I just got final occupancy on a Triplex conversion in Ottawa um you know I built I finished a Coach House in 2023 as well in Ottawa so there’s definitely ways to I think uh to continue getting good properties now because you don’t have the same competition I mean we were almost almost exclusively wholesaling for a while there and then when the market shifted
(22:02) we started buying not only our own deals to flip we started flipping other wholesalers deals because we’re like hey if people aren’t buying our deals then they’re not buying anyone else’s deals either so there’s good deals out there let me go buy them to flip and we started doing that um and we bought off the MLS in this market a lot of stuff still sells well on the MLS but there’s still opportunities on the MLS to buy um more than there was before because the difference was I found it was very very hard let’s
(22:32) say at the beginning of 2022 to find a deal that made sense to flip on the MLS because there’s so much competition there was so much interest you were really really looking for an absolute needle in a hyack now properties are sitting a little more you have more opportunities to negotiate to find better deals um it still takes work but you know there’s always when I started flipping when I started my business my first couple deals I would say were listed poorly or incorrectly and I bought them off the MLS and that’s where I made uh that’s
(23:03) where I started off with flipping so I think there’s more opportunity to do that now than there has been in a long time so yeah I think there’s a lot of opportunity out there right now but it makes sense to be cautious as you do it and if you’re just an individual or you have one assistant or something like that you don’t have this big overhead to worry about so you can wait for the right opportunity you’re not rushing out there to uh you don’t have to be a Rive right now and I think that is also a strength which
(23:31) means you’ll have your reserves you’ll be in a good position as the market recovers which I really think it is going to be recovering well in 2024 right that actually going be my next question is you’re seeing opportunity now how do you think it’s going to play for the rest of the year I’m I’m seeing a I think there’s a lot of this comes down to buyer sentiment both on the investor side and the retail side um I used to sell all of my flips in multiple offers but with buyer sentiment changing buyers don’t
(23:59) want to compete and um and so it didn’t make sense to sell things in multiple offers and it hasn’t for you know a year and a half now um or more than a year and a half now but uh you’re starting to see a lot of people who think the spring market so we’re we’re recording this in beginning mid January of 2024 we’re we’re starting to see a lot of people thinking that the spring Market’s going to pick up and some people are thinking well if the Market’s going to pick up now is the
(24:29) time to buy so I just listed a property three days ago um in Ottawa in a very good area of Ottawa that I ended up spending this was a fire damaged house or smoke damaged there was a a fire that started in the basement smoke went everywhere so I did quite a bit of renovations to this house like extensive and it’s really beautiful um if anyone’s seen it on on my my Instagram it’s the one where like I took uh these vintage uh I I like the design stuff it excites me I took these vintage um National Geographic Magazines that I found in
(25:04) another flip and I cut out like all the interesting bright colorful pictures from them and I glued them onto the wall as an accent wall in a powder room um so that one that one’s uh oh wait you did it personally no uh I was there with my construction manager and his girlfriend we all went like select it yeah I Instagram uh Luke self wealth that’s right yes l Sor L I’m it’s right in front of me but I said spel it wrong Luke luk is Lu there’s no um I don’t know how else you spell Luke oh LK
(25:41) is the other popular yeah yeah it’s the French way of spelling Luke my family’s French so there you go um but so we did a beautiful Renault to it and it’s in a very desirable area of Ottawa with not much like there’s actually only one other listing in that neighborhood and it’s sold conditional so there’s nothing on the market I would like to to get into the eights and so I said well let’s be a little aggressive with this let’s see what happens and we listed for 500,000 three days ago and I’ve have 111
(26:11) showings booked so far in three days that’s wonderful yeah in this market right so who knows I’ve gotten a few was 111 showings show us that there’s buyers out there for the right product in the right area there’s buyers out there I have some rural listings right now I wouldn’t put those in mult and try to do multiple offers in a rural listing they they need the right exposure one’s on 10 acres one’s on Seven Acres they need the right exposure on the market it takes longer but the right product in
(26:46) the right area I’m seeing that there’s clearly demand for that product and as people are worried that prices are going to go up this spring you’re starting to see buyers coming into the market now let me snap this up before prices jump this spring so I’m optimistic things go are going to go well we’ll see how uh how inflation holds and how that affects interest rates but um people are optimistic that we’re going to see some interest rate Cuts this year and if that start happening I think the Market’s
(27:17) going to recover well enough I mean we’re not we’re not talking early 2022 kind of craziness but um I’m expecting to see some positive people craw coming back to the market slowly that because people have really been sitting on the sidelines especially investors as they see the opportunity okay interest rates are starting to fall if I buy a bur now I can get a good price on the product when I refinance I’m gonna rates are going to be lower so if they’re judging the market right that can be a
(27:45) good opportunity to get in sooner and uh and then um do better than you’d expect if you were buying when the Market’s already recovered you’re going to be paying a lot more MH yeah with the bond market coming down already we’re receiving cheaper fix rates right uh and the good friend of mine who is an agent downtown Toronto he told me it’s nuts for houses in downtown Toronto not condos because uh good I’m doing a flip in downtown Toronto right now so and you so you pay the double land transfer tax your buy be
(28:18) the double land transfer tax so he was telling me about a property it was listed way low 750 and it drew 25 offers and it ended up selling for almost 300,000 over uh so my money is on you getting at least a dozen offers um I’m hoping so I’m thinking and that’s the thing if I get a dozen offers I’m taking an offer um there’s no way that I get a dozen offers and I think oh I Can Do Better waiting there’s no way if I get two offers and I don’t like the best offer then I may you know cancel and
(28:52) realist at at around where I want to be but if I get you know 10 12 offers on offer day there’s no way that that’s not the best I’m going to do so I will be taking whatever the best is at that point now again as a professional investor would you get this many showings if your property was tenanted no as nice as it is my poor tenants I mean we’re talking this is backtack showings constantly they’re double booking uh time blocks and stuff like that so the poor tenants would be driven insane yeah
(29:28) yeah I I just want to throw in there that the it’s almost as if it if a property is tenanted it’s almost a stigma against the property yeah and then like I would say where a lot of my rentals are when I’m you know and I’m talking like bungalows in Ottawa or things like that or condo tow houses um I would expect them to sell for almost 50,000 less tenanted I would expect that because the unless it’s a very sorry unless it’s like made for investors as a product then at that point the fact that it’s
(29:57) it’s a rental is fine but if even as a duplex your best buyer and it may not be a full 50,000 discount on a duplex for tenanted but your best buyer may be someone who wants to live upstairs and rent at the basement right so having the upstairs vacant would be and and honestly getting good rent in the basement with the upstairs vacant is probably the best way to sell a duplex of um in my opinion but yeah if it’s just a single family rental some of mine are uh yeah you’re GNA do way worse with a tenant in there a friend of mine bought
(30:33) a a duplex in downtown Toronto and he asked me what should do what should you do with the basement he’s going to live in the main floor he’s going to house hack I said absolutely don’t rent it to a long-term tenant you’re living in it you were allowed to short ter rental so that way you you know you avoid the RTA the LTB right yeah and in some ways it’s almost better to not have bought a legal duplex in that way because then you’re renting just part of your house um from because you’re living upstairs if it’s
(31:01) uh an in-law suite yeah even if it has a separate entrance you you’re essentially renting part of your house and now it’s you know you’re not you’re not having issues with the Airbnb rules in Toronto yeah I would think yeah I don’t have any in Toronto I don’t either I just don’t have enough friends who’ve had nightmare stories with could you just imagine like you’re renting at the basement of your home say you live there and you rent at the basement of your home and the Tenant
(31:25) doesn’t pay you rent now that they Park their car in your driveway there’s no way you’re not seeing them right and they’re in your home and not paying rent so this is why to my friend I would not do long-term tenant in your house you know he doesn’t need the money you know just do short-term rental hire someone to manage it and I would think even if you do longterm in your house if you can I would try to get a property manager or someone else to manage it just pretend you’re a tenant as well because if
(31:52) they’re angry at let’s say the landlord you don’t want them taking it out on you while you live there right it’s a good Pro tip it’s a good Pro tip uh but you know with affordability the way things are like almost everyone is trying to avoid long-term tenants right because it it’s almost impossible to cash flow anything in Canada long-term rentals especially are the problem we’re hoarding houses and making it other people can’t afford to live in them okay I hope no one I hope
(32:19) no one clips that because you have a lot more property of most people quing Luke Luke just told us what everyone’s problem is we need to we need to vote these people one of my favorite things to do when we’re building or renovating is actually adding units because I feel like I’m adding to the housing stock I actually take personal pride in that when I build a coach house it’s a new rental when I do a duplex now two families can live in that home um my uh property in Welland it was a 12 unit purpose buil apartment building I
(32:48) converted it to 17 units so I added five new units to the building um that that kind of I don’t know it gives me a pride that I I’m creating more housing uh when we have such a shortage of it and if someone gives me [ __ ] about you know oh you’re taking housing away I’m like I’ve added housing to the housing stock what have you done I agree that’s why that’s why I really like the model versus like pure like buying apartment building and renov vict and stuff like that like you know
(33:17) versus when you’re creating when you’re creating housing units you are benefiting Society yes absolutely right Supply is what we are lacking we can’t control demand we can control Supply though so let’s let’s do the the right thing and there’s so much more the government could be doing to incentivize Supply instead so both provincial Federal and all so many municipalities they just put up so many roadblocks that make it so much harder than it needs to be um and they’re letting it all so much
(33:44) Im so many immigrants so we’re g to have such an issue with housing and uh I don’t know I think it’s going to get more and more combative between people you know blaming landlords when realistically I think um it doesn’t make sense people blame landlords because they’re like they’re taking hous out of the housing stock like no they’re not leaving the house empty somebody’s living there it’s in the housing stock even the Airbnb rules are in my opinion really dumb because if you take um first
(34:10) of all if I’m visiting another city and I have my a family with me and I have a dog it makes way more sense for me to stay in a house rather than a hotel but on top of that if you have enough airbnbs operating that they replace hotels instead of building new hotels they’re going to be building new condo buildings or apartment buildings or if they don’t need more because there’s airbnbs significantly replaced it you’re going to have see hotels converted into long-term housing so if you let the free
(34:34) market decide too many airbnbs hotels aren’t busy perfect now these hotels are being turned into apartments that might join up two rooms and you know and make it an apartment so you you’ve seen like around the world it exists where hotels motels eventually get converted into long-term residences M you would see the same thing except you know you see fairbnb come into Toronto they um they write all these articles they they get interviewed on all these articles about how airbnb’s ruining the housing stock
(35:05) guess what the founder of fairbnb is a municipal lobbyist who was paid by the hotel industry to write all these articles and interviewed they did a really good job at lobbying the government and changing public perception to make Airbnb the issue it’s yeah which is dumb because if you look at the source problem like just look at Zoning for downtown Tor for example you can you can you’ll get full full support to build a office building which you can’t which nobody wants you want to build a condo Tower
(35:37) everyone’s going to fight you true and then it’s going to be rent control I know I know it’s not rent control right now but when Doug for leads office which you will eventually do you does anyone think the 2018 rental exemption rental control exemption stays right if we get an NDP or liberal government which is likely because duck for can’t stay in office forever yeah but I and that’s that’s why I don’t actually think the the rent control the removing rent control actually helped that much uh in
(36:06) building new housing stock Because by the way that they removed it um like when Kathleen win removed rent control um and Doug for put it back he didn’t put it back like retroactively so it basically means oh okay so if I build something new takes me five years Doug Ford’s out of office by then no now I’m no longer getting exempt from rent control control and why did I you know build this like it didn’t help the idea that I was going to be able to um keep R along with Market kind of thing yeah because things change so
(36:37) if Doug for had retroactively said okay no no we’re going back anything built after was it 91 96 something like that uh that Kathleen went had got rid of there was a it was somewhere in the 90s um that if they went back to those rules then you like okay so I may temporarily lose the ability to increase rents but then as another conservative government comes back in eventually they’ll retroactively make the same rule so I might as well I can build I can build I know at some point you know it’s not
(37:04) like it’ll be 20 or straight where I can’t increase rents above you know the cap two and a half percent or whatever or lower all right Luke we can talk about the subject forever I’d love to over drinks but I think a what I what our lessener would really benefit from would be for example if you were to start everything over again uh so say you’re say you’re brand new uh what are what are your first steps as as a brand new wholesaler in this market wholesaler flipper um I think the big thing is uh
(37:35) not spending a ton on marketing cost so I’d probably be looking for um I mean assuming I’m starting with not a lot of money um and I’m just doing it on my own I’m looking for uh I’m looking for deals on the MLS right and now those are hard to wholesale but if you find a good deal you can flip it so I’m going to networking events and I’m finding a partner who’s willing to fund a good flip someone who knows what they’re doing and they say okay you’re right these numbers look good let’s do this
(38:04) deal um so they’ll fund it so they can get a share of that profit and then um yeah I’d be looking on the MLS um the the like I said my first two flips when I started doing this whole full-time in 2016 um and I already I I bought my first rental in 2007 so I already knew how real estate worked so I was fortunate in that way but my first two flips that I bought in 16 um when I went into a fulltime one was listed low but on um outside of Toronto board and it it was right before the Thanksgiving long weekend so it didn’t
(38:40) hit treb until the Tuesday but I saw it on the public realtor.ca because it had showed up I think it was a Fergus board or something somewhere near GF so that’s why it showed up on realtor it’s a nice place but it didn’t but the property was in Bron so it didn’t show up on treb yet because it hadn’t they’ listed it on the Friday but they hadn’t managed to cross list before the weekend so it didn’t show up on all of the alerts for all of the local Realtors and yet the price was
(39:06) right so I went in I managed to see it on the Sunday we got a deal signed on the Monday before it hit the market to everyone else on Tuesday and it was a really good price um I think it was a semi I ended up making 80 grand on that um in a good market and then another one was listed uh impac had his four bedroom but they and three three to four bedrooms can depending on the area they may or may not be worth more as a three bed or a four bed in this case in Brampton in that area it was in more bedrooms tends to be better so they’ taken down a wall
(39:39) they listed it as a three-bedroom because they wanted a bigger Master listed it as a three-bedroom impac still had it as a four-bedroom so I did some renos to this but the biggest thing I did was I put the wall back up so now I’m selling a four-bedroom in an area where four bedrooms self for more and uh I actually bought that one I think there was five offers on it I bought it in competition and then I flipped it and I made like 75 grand um and the wall doesn’t cost that much money to put up no no very little
(40:05) wall way worse we refinished it we put new uh I think courts counters in like I still I think it was ended up being a 40 Grand Renault and with the way prices are right now on Renovations it’ probably be a 60 or 70 grand Rena these days but um it wasn’t like a crazy Rena I didn’t have to redo everything the upstairs bathroom was already good I kept the cabinets there was a lot I could keep MH uh so yeah it turned out quite nice made a good profit and that was buying it in competition on the MLS because I saw
(40:32) something the other buyers didn’t see that four bedrooms in the area sold for a good amount more than a three-bedroom and uh yeah I was able to find a buyer that way that’s want go deeper into that hack you did with the with the MLS uh for the listeners benefit uh for example I if I’m listing a property in Hamilton I list it both on Toronto board and Hamilton board now there’s lots of RA lazy agents if they’re an out Town agent they’ll list it on the Toronto board only and then that way the Hamilton
(41:00) board agents do get do not get notified so then if you’re if you’re trying to buy that property you’re not competing now with the local market which is significantly generally significantly bigger than the outside of Hamilton Market yes so so that is that’s a for us that’s been a regular opportunity because again now you’re dealing with notown agent who doesn’t know the market well they probably don’t even want to make the drive they just want to gone they don’t know the market
(41:26) Market they don’t want to come out right so they just want usually generally they want it they they just want to get the deal done and you know what this agent was going to list it on toron board it just didn’t get cross-listed in time but I guess what I’d say about that is if you’re looking for opportunities you’ll find it a kind of stupid quote that I I like is uh you can’t get hit by the money truck if you’re not standing in the street so if you put yourself in a position where you’re regularly looking
(41:52) for opportunities you’ll find them but you have to be putting yourself in a position to look for those opportunities now as a source for for deals you we were we were talking about like you’ve had not so great experiences with uh V inv investors who are not that experienced yet yet their social media profile tells tells you that they’re done 50 deals in the last two years or something can you without naming names because you know we innocent till proven guilty we’re not interested in getting sued by anyone uh
(42:26) I’ll the term you I don’t think you mind the term you used was fake it to you make it and and I’ll I’ll elaborate on that just for the listeners benefit because we’ve seen that through history like for example Elon Musk even though my I’m a fan of Tesla I own a Tesla Drive Tesla the very first Tesla that was on the stage that they used to pitch and raise money for Tesla did not drive right they had you they had to push that car on the stage it did not it did not go anywhere right yet he
(42:55) he was able to raise millions of dollars so so fake toam make it has been big through history um and unfortunately you’ve had to deal with these people and real business transactions yeah so you know one example one thing that I look at is um and you see this from dealing with investors it’s having a a good eye for this some investors are really good at doing real estate and either aren’t good at or don’t put much work into raising money some investors are really good at raising money they’re not particularly
(43:27) good operators of real estate and if I had a choice I would invest with someone who’s a good operator of real estate every time over someone who’s good at raising money I can’t agree more um and you may even get you know they may even be offering better returns let alone you know the result will be better but they may be offering better terms because they’re not focused on raising money so they’re not as um they don’t have as many people offering them money which means you know a lot of
(43:54) people don’t like some people don’t like raising money I don’t particularly like raising money I’d rather not have to do it when I do it um because I’d rather just focus on real estate I love real EST yeah let’s just drill it down down a little bit so I’m the same way I don’t want I don’t want another person wanting to hold me accountable to something I don’t want to be answerable to someone else that’s why I became an entrepreneur right so I don’t want to be answerable to an
(44:17) employer so that’s that’s personally why cherry and I do not have Partners in our investment property so sorry continue yeah and I also find like I don’t like the idea of losing someone else’s money so I’m basically let’s say if it’s an equity deal um I’m going to protect your downside but then also sharing the upside and it’s like well why am I doing that yeah same yeah I I’m like I’m doing all this work you’re not doing any work I value work over capit and credit right like you know like help
(44:46) like that’s that’s that’s my personality as well I prefer people to help then I prefer like gifts or anything like that yeah sorry continue and and yeah and just a quick my first few flips I did with someone else’s money and I would partner with someone and they would get half of the profit for putting in the capital for down payment and Renovations and carrying costs so they’d put in all the money I would do all the work find the deal manage the renovation sell it Etc and then they would get half the
(45:11) profit so um that actually can be very very good return for someone but for you know they were taking a chance on me as well so they made really good returns uh and I didn’t need the capital so it’s a way for people to get in but obviously you don’t want to be losing someone else’s money but yeah back to the fake tell you make it so I’ve seen some of these people who are kind of more about raising money than they are about operating and one example is someone who’s kind of wellknown as an investor
(45:38) has a lot of Partners or raises a lot of money um they called us up for one of our wholesale deals this maybe a couple years ago now um and they had um a JV partner that they brought in that was going to buy the deal on paper or actually buy the deal right because that’s the way the JB partnership works so they’re going to be the owner they’re going to finance it they’re going to put up the money exactly yeah so this investor asked us oh can we push the closing back uh you know a couple weeks
(46:08) and you know we spoke to the seller and the seller said no we can’t we’re buying something else we come to the week of closing the JV partner can’t reach the investor hasn’t heard anything from them they’re very frustrating this JB frustrated this JB partner passive partner can’t reach their part their investment expert partner exactly supposed to be putting in all the work and so we get to like the day before closing finally hear back from the investor and they’re like no we need
(46:34) that extension we asked about we’re like okay now we have no choice obviously you know we go back to the seller with eggot our face basically saying we can’t this isn’t going to close we can’t close you know tomorrow we have to push back puts them in a bad position makes us look bad we managed the deal does end up closing but uh there was a lot of frustration on everyone’s part just lack of responsiveness probably taking on too much at once for this investor doing too many things at once MH um but that
(47:02) that’s a really bad business model to not communicate with everyone going on and um yeah so it it was it was not a great experience another one we’ve had is uh a group kind of a training group that some heard of sorry A Tribe if you will yep um there was a lot of more I would say instead of focusing on the fundamentals of real estate how to invest they focused on mindset which mindset can be really important if mindset is your issue but you can’t also get out from the fundamentals so we ended up being I can’t mind myself mind
(47:41) set myself to be Elon and then build an electric car um I have my shortcomings in the engineering space sorry uh so it it becomes more uh difficult we we ended up to the point where we almost wouldn’t work with people who were associated with this because this happens to us several times they would essentially lie to us we’d be like okay so you have your financing in order um you know you’re pre pre-qualified or you have a private lender you have the cash available like oh yes we have it I have lots of cash no problem we won’t have
(48:18) any issues paying your assignment fee and closing on time etc etc this happened with several at least three that I can think of people associated with this group that um they buy the deal from us promise all these things give us a deposit and then we see them on social media trying to raise money for the deal and then they can’t illegal well and they’re firm on the deal at that point oh my God the risk yeah they’re firm on the deal and then they can’t raise money they all like this is all like you
(48:49) know like burn the bridge burn the ship we’re going to make this work strategy yeah and I mean we hate that because we’re you know we’re a lot of our sellers are in positions where they need this to close like we’re trying to help them out and if one of our buyers can’t close our contract typically has relieved of liability but that doesn’t matter in the same way as like this is screwing over the seller yeah if you can’t because these are human beings right yeah um so you know we’ve had to
(49:19) negotiate some extensions and I think in all three of those cases I we had to find another buyer kind a last minute and we are able to so you know we might be double the work for you now well and we might be walking away from an assignment fee just to get the deal to close um L income too you’re working for free now yes yeah um and so it’s we typically don’t ask you know our buyers to prove uh that they have the money but that’s something you know sometimes we may have to uh if they can’t show that they’ve had experience
(49:50) and know what they’re doing because buying from a wholesaler for your first deal ever I don’t High I don’t recommend it highly unless you you really you know have done your research and you know what you’re doing because construction background like that those things will help you absolutely there there’s just more complexity to it in terms not complexity but you’re typically not able to finance the assignment fee except with some mix like uh one I work with closely is Calvert out in Alberta and
(50:15) they’ll Finance the assignment fees as well as long as the deal makes sense and they they run the numbers on the deal as well um to make sure they agree that it makes sense um but a lot of a lot of banks won’t lend on the assignment fee we’ve seen it happen a few times um but typically they won’t lend so what I mean by that is if you buy a house for uh we buy the house for 500 you’re buying from us for 520,000 the bank will look at okay we’re going to lend you 80% of 500 not 80% of 520 so you have to pay the
(50:42) 20% of 500 which is 100 Grand plus the 20K in cash so you need 120 instead of uh 80% of 520 would be uh 416 so you need 104 instead of 120 right so you’re you’re you’re funding more out of pocket and cash um so that’s one thing and then it just um yeah a little bit you’re buying a property that needs work or the seller’s in distress so you need to be willing and able to accommodate a little more M and then there’s usually have a pretty decent Siz project scope size ahead of you in order
(51:18) to execute and get your money out often but we we also have TurnKey situations because we we look for a combination of seller distress and property distress one or the other or both the typically the best deals are going to be ones where there’s both but sometimes you have situations where it’s kind of seller distress but the property is not in particularly bad shape um so it’s more sometimes it’s the ease for the seller sometimes it’s speed that they’re looking for um and you know sometimes the property is in good shape
(51:46) for example but they’re um going to go into power of sale and they need to sell really quickly because the sheriff’s coming kind of thing and they want to sell quickly so that might a situation where the property may not be in bad shape you know it’s always going to need at least some paint and things like that but it’s not in bad shape um but they need speed uh to make it happen and yeah so and that’s the importance of being able to close on time yes yes so I’ll just add that there’s U like your
(52:15) experience with with that one group that was focused on buying with no money down and all sorts of things like there’s several groups out there and I’ve heard the same story from many vendors not and other groups as well how they will turn down that business they i’ I’ve heard from even like mortgage brokerage groups who refuse business from certain groups the training groups like please don’t send us anyone don’t tell them you know us that’s us red flag when you see enough people of it it becomes a pattern where
(52:46) they must have been told to lie it’s not just that that’s almost the difference between fake it till you make it and like lie about it I think think that’s push I don’t know um I think it’s pushing it past just like trying to give the perception that you know what you’re doing versus fullon lying oh yeah no I have the money lined up I have it all you know we’re all good and then they don’t you know that’s a bit of a different situation to be and I feel like that particular group was teaching
(53:11) people to lie which is not a group I’d want to be part of and now the consequence is there’s all these people declaring bankruptcy and uh and they’ve got and they owe money to people they owe money to friends and family like it’s I’ve never seen it this bad before and I was I was in the community investor Community back in 2008 when we had the financial crisis when we had a real it wasn’t that bad right yeah this this period now is way worse than anything I’ve seen in my career in terms
(53:40) of like Financial like U disaster yeah I just had one property of Ruby house back in 2007 2008 so it wasn’t you know if anything I don’t know I feel like it almost helped me because uh I was I had an RBC mortgage on it and my payment was it was a variable mortgage but my payment stayed the same so I think I was four years into the mortgage of a 25 year uh amortization and I think I had 11 years left on it after four years on a 25 year right because I was paying down so much more in principle because the interest fell
(54:13) by so much um but yeah I mean so if anything it kind of helped me out at the time but it’s different now and I mean some of the people some there’s a balance between taking enough risk and not and taking too much risk and I think I understand people taking a lot of risk early on when they’re just getting started they don’t have much yet your first when when they’re single no kids yes and your first and they have job they have job income coming in to to you know to balance out the risk yes
(54:43) well and I understand why some people do like uh they might do an in-law suite instead of a legal duplex right on your first deal but once you reach a certain scale you know like you or I I don’t want an illegal unit in my portfolio it’s too risky for me if something happens what if insurance doesn’t cover it Etc so you’re you’re you can take a little bit more risks in your first deals but as you build more you have more to protect and that yeah that becomes scarier so I don’t want illegal
(55:09) units I don’t want things that I know aren’t up to code I’m not willing to take that kind of risk at my portfolio anymore um yeah yeah I saw a talk by uh these uh Reit owners very famous story out of guf two brothers and their friend I think everyone knows what I’m talking about if you know if you’re in the if you’re in the industry you know what I’m talking about but I remember them saying uh you can only live in so many houses so we had to uh scale up into commercial properties because they were doing they
(55:36) had like they had over like 50 student rentals in guol right so they’re making lots of money but again like you you can’t you can you can’t live in 50 properties yeah very hard to mortgage and everything right yeah oh can I just show I just want to show you this quick chart and I’ll talk about to The Listener benefit so this is the overnight so this is a benefit for anyone who’s watching on YouTube like this is the over Bank of Canada overnight lending rate you and I were just talking about uh back in like
(56:03) 07 yeah the rates were almost just as high right I don’t know if you remember but I was doing like 25% down and 5% mortgages back in 2007 right so like and then we’re pretty much at the same level interest overnight uh interest rate wise but people were not screaming and crying about like going people weren’t going bankrupt in the community back then and my comment is about like how hyper overleveraged our community is and and Canadians are in general when when we have seen rates at this level before
(56:37) yeah and I feel I feel bad for the people who I think were doing it relatively right but there’s there’s times in my journey as well where if I was caught at the wrong time it could have caused me bankruptcy as well luckily I’m established enough I’ve been through enough and I’ve built my portfolio enough that I have a lot more reserves and protection and I’ve been doing it longer but if I had kind of decided to scale up and bought my first you know unit that needed a lot of renovations right at the wrong time and
(57:04) that was like you know my second or third deal or a few deals in and I’m I’m making this one big jump into the next property and at the wrong time as everything went wrong with you know rates and construction expenses and you know that could have there could have been times when it would have put me in a bad position and I feel bad for people who are like that then there’s others that I feel less bad about because it’s you know you had um you had a long time to build this but instead you didn’t
(57:31) structure your business in a way that was you made the assumption that the market would always be going up and that’s a really bad way to run a business if you take that risk for one deal that makes sense you have a portfolio and you take you know you have a portfolio of 10 properties and one is a risk that can be okay because you have everything else as a protection everything else is stable and protected but if you buy 10 deals and they’re all kind of dependent on the market you’re putting yourself in a really bad
(57:56) position um and you know where you can’t do your other deals without getting the right refinance on your other ones and they’re all variable and you know and you’re not going to qualify if they’re at too high of a rate you’re putting yourself in a position where you’re risking your portfolio continually all the time that’s bad decision making yeah I saw a young gentleman buy two properties first for first two deals ever bought them at the same time in Trenton Ontario two duplex conversions and his plan was to use his
(58:28) personal line of credit for the renovation money to do two basement conversions I hope you had a lot of room personal line how big can a personal line be well if you’re pretty rich you you have bring personal lines but I’ve seen doctors with big personal lines but otherwise this was no doctor yeah H that’s risk I mean I don’t know about you I see a lot of duplex conversions coming in at like 200 Grand yeah if like the I’m seeing ret retail retail for just the basement alone usually around 160 and then you
(58:58) know the main floor often needs work so yeah you can get so the total budget will get over 200 yeah and it depends what you have to do right do you also have to do the driveway are you you know are you digging a lot of uh window wells right to the footing you know that kind of thing it a really big property then yeah the basement’s going to be more yes exactly fantastic all right Luke thank you so much for being generous with your time you we’re way over any final thoughts you want to share like first of
(59:24) all um like do you have a book coming out you have a speaking engagement like what are you up to uh well uh I am going to be interviewing you on my podcast shortly so we have the selfwealth real estate podcast which you can find on all the podcast platforms um follow me on social media as well Luke self wealth I’ve been posting a lot more content about real estate flips I’ve going on my rentals Etc um and yeah that’s about it just uh follow me on socials follow listen to the podcast and uh my my last advice is
(59:54) like like if you’re not in the market now start looking and make sure you know how to recognize an opportunity because I think there’s opportunities coming this year thanks so much Luke and I’ll for listeners benefit I’ll have all the links in the show notes and then like Luke like like we like we were touched on earlier like the people who got burnt in this period like if they stay with it won’t they be fine learn from the mistakes first of all learn for your mistakes yes yeah exactly like if you’re if you were able
(1:00:24) to through this this was one of the worst times for a lot of investors nowadays and I mean this wasn’t like the 08 recession in the US we weren’t hit nothing this was bad but it was bad because like you said there was a lot of Leverage that got expensive and that affected a lot of people um but things are going to get better and uh I’m not saying it’s going to explode like it was but things are going to be getting better so if you able to get through what is kind of the worst time and keep restructuring your stuff working on what
(1:00:49) you’re doing there’s going to be a you’re going to be rewarded going forward and even if that just comes down to holding your long-term rentals longterm too many immigrants coming in not enough housing being built I don’t see any way real estate doesn’t get more expensive and that you don’t do well holding your your portfolio that’s a great place to end it thank you so much Luke thanks everyone thank you for watching if you want to learn how to invest in real estate from scratch my team teaches
(1:01:13) 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.com destion as well I publish at least two to three videos a week here so subscribe if you want to keep learning from seasoned investors like myself my guests and if you’re just starting out feel free to ask questions and comment 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
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