** Transcript Auto-Generated**

Erwin 0:00
Losing 175,000 land, private funding, accidental long term landlord, finding joy and a cottage short term rental scaling to a motel Grossing over $100,000 in 90 days so far, and you’ll never guess where that motel is. All this and more on this week’s Truth about real estate investing show for Canadians Konichiwa. My friends from Osaka, Japan. Hello my fellow wealth hackers cerwin cedary here, I wasn’t sure I was going to be able to produce this episode this week because the jetlag has been a bit of a B. Japan standard time is 14 hours ahead of Toronto time. So that’s 17 hours ahead of Vancouver time. It’s actually easier to book a call with one in Vancouver. For some I can do call someone in Vancouver at like four therefore pm and it’d be like my 9am this time. So it’s yeah, it’s better than Toronto time. A friend of mine asked me if I was looking at real estate while here in Japan. And while we’re having a blast here, this is my second visit to Japan, first with chariot kids. What I love about this country is how polite and respectful the people are, how dedicated the Japanese are to their craft and how they go outside the job description to deliver value. First off, there is no tipping here in Japan. Excellent service is part of the standard inclusion in the price that one pays, including taxi drivers to waitresses, taxi, taxi drivers here will even wear suit and tie as well. One waitress even tracked down my daughter’s e meter. Long story short, long story short, my daughter left her Kobo e reader in the bathroom of a kabuki theater. We thought she left the restaurant so charity called the restaurant. They didn’t have it but the waitress took down chairs email, she on her own volition she contacted security. It’s a big business big building. So check the security. Luckily someone turned it in in the waitress and we got Sherry to let her know that to go where to go pick it up the next day. And we did. Awesome. Oh, that’s interesting. What’s interesting here is the streets and subways are spotless. There are no public trash cans. It there is no litter. Everyone’s expect to consume their own food and drink. Take a container and take it back or just consume it where they bought it or take it take it home to to take it home and put it in their own garbage. Personally, I’m a big fan of being organized efficient manners and kindness. Japan has it all in spades. But that’s not enough. Benefit. You’ll know I’m big on studying economics, Japan leads the g7 nations in GDP per capita Well, ahead of even the Americans. While we in Canada, we’re second last only to Italy in Russia projected to fall behind Italy pretty soon. So we will be last among among g7 nations are also lacking in kindness these days. As hate crimes are skyrocketing back home. Since October 7, hate crimes have doubled. So just in a month and a half, hate crimes in Toronto have doubled the entire totals from last year and 2022. I don’t know what my Canada is coming to will invest in China. Sorry, in Japan. Japan’s been up in China. No, I haven’t considered it because like many developed countries, Japan is dying. Their birth rate is among the lowest at 1.3 per woman, according to the World Bank data, which is well below the 2.2 required to maintain a population. And so we’re stuck here in Japan. Also in Canada, we’re stuck with a declining population. I don’t know. Short term rentals or hotels seem to make more sense here in Japan. Partly because tourism is extremely hot here. It helps that the yen super cheap. There are and I’ve noticed in just walking around town, both in Tokyo in here in Osaka. There are a ton of boutique hotels and a ton of tourists. It also looks like all the newer buildings are happening the hotel condos for for regular residential use. Where the Americans do you have the Japanese beat is there cheap, affordable real estate all over the country. Outside of California and New York, they have a culture versus compared to the Asian culture. American culture is the men in American culture are more likely to raise help raise kids. And then that when you combine those two things, along with many other things, they have more kids. The Americans have a higher actually have among the highest birth rates among the g7. So as I do research all the time on this sort of stuff, I enjoy keeping you enjoy understanding how to how to optimize my in be efficient with my real estate portfolio. So I’ve done a lot of research on the Americans on markets where to invest. So I’ll put together work to aggregate all my research so in to share with the community will charge so whenever you might activist so that can stop repeating myself why places like Texas is a better investment than Alberta? Yes and that burning US dollars is better than Canadian dollars. If you don’t believe me ask any Japanese bank which currency they prefer to, to convert currency for or have a relationship with a bank with Right? Or really you can ask any bank in the world which they prefer which currency they prefer. Which country do they have more relationships with banks. Now the frequently frequently asked question is am I investing in Florida? No. I do love Disneyworld. I do enjoy my trips to Fort Lauderdale. I love Florida big fan of visiting there. But I despise risk with my investments. And that includes inflating insurance costs anchor a case, I just want boring, uneventful cash flow. And I want to make money in US dollars in our spend US dollars when I travel. And I can’t wait to do more site visits, like in places like Memphis, Tennessee, Las Vegas, Nevada, Phoenix, Arizona, all some places to visit, I could argue that are much more fun places to visit, then Edmonton, Alberta. And again, they all have great economic fundamentals, with each with 1000s of manufacturing jobs on the way the Americans are investing. I think three quarters of a trillion dollars Americans are investing in bringing in reshoring manufacturing back back to the US. Go ahead and try finding those kind of numbers in Canada or anywhere else in the world. Again, I’ll work with you on that US research report so that you may compare any of these landlord friendly markets have no real control no LTB against whatever city or province that you’re looking at. My agent Dad always raised me to look out for what is the best the best is usually the let me to humble me. And let me know that there was always someone better and a no different real estate in my investments. Which means again, finding the most effective investment that will get you the listener and myself towards our goal of early retirement or financial peace as fast as possible. My research says for most people, most of the time, it’s boring cash flowing properties in the sunbelt states, if you buy it right and managed by top tier property management, proper above board financing, and that’s all possible. And six months ago, this wasn’t possible. As far as I knew. This is exactly what we’ll be teaching on Saturday Jay with their team in partnership with share single family rentals and lens city with Scott doing them at our island offices in Oakville which will be available via virtual zoom as well. We’ll have about 40 seats in person. Those sold out within the first two weeks last time. So the details are in the newsletter, in our email newsletter in the show notes so make sure you get make sure you purchase especially if you want in person a spot in person. Please book that ASAP. On with this week’s show. This week we have the lovely Victoria Clooney on the show who has a very different journey will be very different journey but she is the first on this show. For in understand we’ve had somewhere on 330 episodes to interpret the episodes. She’s the first career Canadian versus fourth personnel to be on on the show. Victoria shares her journey of how she stumbled upon being a landlord by renting her home when she was transferred for work worked in different phases, which is common among among among military personnel. Apparently, she while she made great money. It wasn’t until she discovered or she developed her cottage property. She built additional

additional cabins on our cottage property for short term rental purposes during the pandemic. And that was when she what she realized that she enjoyed most about investing in real estate returns now has since leveled up in her into commercial recreational property. Specifically, she’s bought, renovated, rented sort of and she’s about to refinance a motel in Lunenburg, Nova Scotia, which is a vibrant and historical coastal town known for its unique architecture and rich maritime heritage. If you if you’re from out east, you know exactly what I’m talking about. It’s the perfect location for a vacation property. And could you do yourself a favor, check out the breeze motel on Instagram. I got the link in the show notes as well as pictures. It’s stunning. So also understand it has a little bit of sweet, smooth and easy journey from for Victoria. And she shares on today’s episode, including the she’s owed $175,000 from a private borrower. She hasn’t heard back from them in a year. Unfortunately, this is someone that I’ve always known as a bad operator. Always do reference checks people. Again, I do think this is a good episode. And as more and more best shooters, especially specifically Canadian veterans want to precipitation away from long term rentals. Commercial is one way to go. So in Spa Victoria Chikara on Instagram, Victoria Cooney, that’s one word. She has her own meetup called invest her in Ottawa. And please know the show.

Hi, Victoria, happy Halloween. I know this office, this office will be released in about three weeks time, but Happy Halloween to you and what’s keeping you busy these days other than dressing up.

Speaker 1 10:48
I do have my costume fear. I opted not to just because it will be presented later on. But keeping me busy. I’m juggling a lot. I Yeah. What am I working on. So we’re just closing up a very, very busy season with our motel it was was our first season that we opened our motel going through some refinances right now on a couple of properties, working on a development project with some partners. And I’m starting a partnership with the tiny homes company. So those are some big things keeping me busy. Also my family, we’re going to be doing trick or treating tonight. Work.

Erwin 11:35
Okay, where do we start? How long? How long have you been? How long has your military career been?

Unknown Speaker 11:40
I joined in 2001. So we’re just over 2022

Speaker 1 11:45
years of service, it’s you know, it’s it’s even hard for me to believe that it’s been that long. I really do. I can remember the first day that I joined and the feelings that I had. And now to look back of a full career. It’s just amazing.

Erwin 12:06
My cousin joined DISA, he works on the electronics in your in your your large shipping airplanes. Okay, all right. What are the big ones? The ones that deliver tanks, for example?

Speaker 1 12:20
Okay, great. So I also saw Navy, that’s the uniform that I wear. But I actually work the Air Force right now and have been working for the Air Force for quite some time. Fabulous.

Erwin 12:31
So you might want to, and I was super excited for him because it’s a wonderful career. It’s amazing person. It’s fantastic. Yeah, pension. Training. Wasn’t that hard for tolls? No.

Speaker 1 12:47
Overtime, that’s for sure it. And it is the military is I joined when I was 18 years old. And so it was a big shock for me. And 2001 is a lot different than 2023 type of service. But you know, what you learn from it is incredible. Anybody in the military, you can just tell the difference in the way that they carry themselves the way that they can adapt and overcome and the organizational side of things and just the push through things like there’s a different way I’d hire somebody from the military any day.

Erwin 13:29
My cousin told me he’s also when he was roughly 18. Great. And it’s like he’s making money while he’s getting his training. While his friends are all paying money to be in college and university.

Speaker 1 13:41
You don’t even want to know like I just came out of two years of a master’s program that was fully sponsored by the military. So I just completed my master’s of organizational psychology that I did full time at Carleton.

Erwin 13:54
Okay, and then what do you got to do with that degree?

Speaker 1 13:57
So now I’m working for the forces and the position that I’m in right now is specific to the degree so really, they pre posted me so I came from Nova Scotia about two and a half years ago to go to Carleton and then when I finished then I was then posted to work for the Air Force on the selection side. Alright, I know you’ve more Scotia. I am well okay, I should say. That’s where I spent probably the most chunk of time in my life but my dad was also military. So I was born into the military. We lived in Germany. We lived in southern Ontario for a while. Cambridge, Guelph, and then I moved to Nova Scotia when I joined the forces because I went navy.

Erwin 14:47
Fascinating. And then how long you plan on staying there? You’d like it sounds in Ottawa. We land in part of the armed forces. Oh

Speaker 1 14:58
armed forces. So I’m under obligatory service for three years because of the school program. And that does get me to my 25th year of service. And at that time, I’m going to be fully pension. But I do love what I do. There’s a real sense of pride, loyalty, of course, with the military. And so I don’t want to just walk away, but you know, from an investing side have been investing for a long time as well. And that’s going really well for me, and I have a real passion for that. And so I’m thinking that I might just transfer into the reserves. So I’m Reg force, which means full time. And we want to put our roots down here in Ottawa for the first time, I want to finally, you know, secure myself somewhere, and not always have that in the back of my mind that I’m going to be moving. And also for our sons really important. So my, my plan, and that can always change, but is to transfer into the reserves, when my obligatory service is done.

Erwin 16:04
Super cool.

Unknown Speaker 16:06
contracts.

Erwin 16:06
How is how’s the pension work? This is an investing show. Is it like teachers like what is like 60 70% of your last five years pay typing? So

Speaker 1 16:16
it is five years last five years pay. And if I get to 20 years, or sorry, 25 years, it’ll be 50%. Fabulous. And I’m under the, this whole lamb I’m under the grandfather clause. So I’m actually at 20 years I was pensionable. So now, I’m going past my 20 years. And I can become an immediate annuity, which means that I would then start to collect my pension right away, if I retired.

Erwin 16:45
That’s awesome. It’s pretty good.

Speaker 1 16:47
Um, it’s, you know, at 18, I would look back, and I’m just so grateful that I started when I did, because now I can, you know, live another life after this. Why I’m still

Erwin 16:59
young. Exactly. You know, what it is today, if someone joins today is the pension different. So

Speaker 1 17:05
the pension, now you have to go to 25 years where before it used to be, they take you on shorter contracts. So you can do each occupation would have their own length of time, but it’s typically about three years that you would sign for, and then you would get offered another contract. And then basically, another one that would take you to 25 years. And you can continue, we’ve got some people I ran into somebody yesterday, who’s at 39 years of service right now.

Erwin 17:36
They enjoy that much. They do. So for example, like my cousin’s housing costs are like a joke. Is that pretty much true, if you want, if you wanted to, like the your whole,

Speaker 1 17:47
depends where you live. So certain areas will have, they call them pm cues. I think its primary military quarters, and so are personal military quarters, one or the other. But then you can have, it’s like rentals, and you get on a waitlist, and depending on the area will be how available that they are. But they’re quite affordable compared to what it would be like, I don’t know what autos are, but the options are there. And so because you’re being told to move, really sometimes at a moment’s notice, it’s out of your control, you’re going into areas that you might not know, there’s two sides of the military, there’s going to be somebody who will go into pm cues their whole career, and never buy a property. Or there’s people like me that every time you get posted, you’re accumulating properties, and you’re investing in those areas.

Erwin 18:44
That’s awesome. Yeah, Mike, like, I’ll get off this topic soon because his listeners bored. But I think it’s important for young people, there’s a lot of young people listen to the show like this is an option. And the pension is incredibly important, because I think the statistic is somewhere around 50%. If you do not have a pension for those Canadians, the average Canadian 50% of them will not who do not have a pension will never be able to retire. So here’s why I think it’s incredibly important. And in the Canadian Armed Forces pension is likely one of the good ones. This is like unfortunately, fight for Sears employees like their pensions gone. Good job

Speaker 1 19:19
security that you have current and then afterwards and knowing that I remember 2008 I was posted to Virginia. I was actually in Norfolk, Virginia, during the crash of oh eight and, you know, you look around and people were losing jobs, banks were just shutting down, they’re open one day closed another the housing crisis that was going on, and I remember just feeling so secure. And I had properties then too, and I knew that I could still pay my mortgage. I knew that regardless of what was going to happen, that all those bills were still going to be covered. You get that job security, you are able to be banks love me, because both my husband and I are military. And so having that is also just great for credit. Great for lending. Financing.

Erwin 20:11
Yeah, I’m like other gurus out there. I’m not anti job. No, no, I’m pro highest and best use 100%. You know for like, I talk to people about active real estate investing all the time. And I let them know what the risks are and what the pay can be. But if someone’s highest and best, it’s hard for, for most people to make five figures as a real estate investor. versus you know, in a job, it’s pretty easy. And you don’t want to risk your own capital.

Speaker 1 20:41
Absolutely, we’ve got a great quality of life that’s important to us. And so we were not eating, you know, ramen noodles every night. Like we live in a nice home, we use a lot of our, what we earn for with our paychecks, our salary affords our lifestyle, and then my investments, I just keep regenerating it back into what I’m doing. And so I’m able to almost live these two streams, and it gives me a lot of comfort and happiness. And I also know that we’re setting ourselves up for the future.

Erwin 21:14
So let’s talk about real estate investing. So how did you start as a real estate investor was it just due to just kept properties whenever you moved, you bought something when you moved to a city kept it, rented it out, and you just kept going that way.

Speaker 1 21:24
Like it really started to unintentionally I was very young. So I was getting posted from Ontario to Nova Scotia, I was about 20 years old. And that was 2004 and decided to have a pre construction townhouse. And so I went through the process of picking out the flooring, picking out the cabinets, you know, the contractors would give me samples, and I would choose them. And I felt really out of my element because I was about 20 and lived in it for the first year saw the market what was happening with the properties around it was a brand new subdivision, and then sold it and did it again. So I made profit for that first one, and then move to a bigger one, which was a house. And so now I have allowances that I’m dealing with. And so I’m just starting to, I remember thinking like where’s the sockets, light sockets, gonna go in the rooms like picking the colors of the roof and the siding and all of that. And then from there, saved up enough to buy a bungalow. And then I got posted to the US. And at that time, I needed to rent out the bungalow, because I was going to lose a lot of money if I went and sold it three months later. And so then I put tenants in that bungalow. And I remember I was looking back through my emails, I don’t know, like a month ago, and actually found my old emails where I was putting ads out and I’m talking to my friends, having them. So that’s one benefit of the military is that you’ve got all these, you know, brothers and sisters, family members, essentially. And so we’re kids, I’m in the US. And then I have my friends are now looking out for my bungalow with tenants, I put tenants in it. I returned a year later, and I didn’t have the heart to ask the tenants to leave to move out. And so I again had saved up enough money and I purchased a condo, lived in that and then saved up enough money just outgrew the condo and then moved into a bigger house. And so really, I started to like leapfrog my way through and there was about a 10 year period. So I’m going through all of this and I’m accumulating and every property I’m making some returns on and I’m just slowly getting through everything. But I’m not savvy, whatsoever. There’s not really any social media, I don’t think to look into investing, I’m no intention, I’m just figuring it out. And then I got so resentful of being a landlord. I also was not. I was too cheap to hire property managers. I was never raising rents. I was just maintaining and but still just in that mindset that I didn’t want to pay for property manager. So as a result, I decided to sell everything. And by that time I’d met my husband and I had convinced him to rent out his condo in BC. And so we had, you know, properties all over, decided to sell everything. And then we saw the money. It was the first time that I that actually tapped into the returns and saw the funds and we knew right then in there that all that resentment all of the headaches or fearing the phone calls from the tenants was worth it. We just need to be strategic about it. And so that was where that was a big shift for me. And so we took our funds and we went right back into the market, but this time now purchasing duplexes. Smaller multifamily Lise, and then I even purchased some monkeys on a lake. And I turned that into a glamping retreat. And so once I decided to become intentional, things just like opened up, I started to research, I started to educate myself and look for the opportunities instead of just getting by.

Erwin 25:23
Fantastic. Yeah,

Speaker 1 25:24
it was really, I mean, I look back, and I’m really proud of the the young girl that was figuring it out, obviously, I wish that she knew she had somebody in her life to say like, No, this is, this is the direction because there was nobody in my life that was doing what I was doing. And so I was just figuring that out. But now, now that I know to be intentional, and look at everything, strategically, sky’s the limits. You know, I’m almost like a kid in the candy store. Now I’m just making up for all this time, and I’m just trying to absorb and, and just grow.

Erwin 26:04
I remember those days, early those days, like early 2000s, there wasn’t much real estate education or meetings or networking. Rain was by far the biggest outfit. They were fantastic. But if you didn’t know about them, really, there was only the rich dad, then back back in the early days a rich dad in Canada, it was largely American stuff.

Speaker 1 26:22
Yeah, yeah. And so that just wasn’t my scene. And I wasn’t social media. To me, again, when you’re in the military, you’re not very drawn to social media. It’s not something that especially in the early days, nobody really knew how to handle it. And so for me, I was never on it. And I never really had it. I mean, you had your normal just like Facebook for your family. But up to very minimal. It wasn’t until I had the glamping retreat. And it was beautiful location that I didn’t want to inundate my family with all these pictures of but I wanted to take pictures all the time. And I posted it on Airbnb. So I decided to create an Instagram account. And I called it bunkies on the lake and it blew up like this account all of a sudden, we’re getting so much attention from guests people who want to stay now we’re converting these people into guests. We had the the news reached out to me to do a segment we had photographers wanting to come. And it was that time I dislike I realized the power of social media for business.

Erwin 27:33
Okay, how do I find it? Or what do I pay? So

Speaker 1 27:35
now so I’ve sold it? And so it’s owned it but you can I believe I changed. So I kept the account. And I just love the pictures. I think if you look up Clooney, STR, you can find them? If not, I’ll send you the link to it. George Clooney. Yeah, I know, spelt a little different. But I wish we had those connections.

Erwin 27:57
Okay, we want to promote them necessary. Because I know you have a motel business,

Speaker 1 28:01
I do have a motel. So really, it’s, you know, that transition constantly just growing and using the skills and knowledge that I’ve developed throughout this whole life in this journey. And just being able to maximize it. It’s been the theme.

Erwin 28:19
So I want to I want to spend some time on this. So you went from single family, long term and some small multi residential long term rentals. Right? And just from your energy pickup, you’re more excited about the recreational property? Very

Speaker 1 28:35
much. So it’s no, I still have the long term like a really I like having a diversified portfolio. And for me, it’s pretty uncomfortable with the long term rentals. I’m not comfortable with the short term. But yeah, long term is fine. You know, it’s there’s a lot not keen on what’s going on right now between the landlords and the tenants. I talked about feel good investing a lot. And so when I’m looking to purchase and the rates are the the price that sellers wants today does not reflect what the revenue is coming in. But there’s nothing that we can do about it. And I’m not, I don’t feel good about coming in and clean, sweeping tenants. If tenants you know, that’s the worst thing that they’re doing is paying under market value. I wish that there was a mechanism in place where we can balance it, I think that there’s it should be fair, but that’s not where we’re at right now. So I’m not going to purchase a property to intentionally remove good tenants out of that property. But I was seeing a lot of that happening around me I’ve seen that that was a lot of the messaging going on. And for me, I just like came to a day and I remember it very vividly and just said like I’m only going to focus on feel good investing. I’m not doing this because I have to invest in Real Estate like I like the returns, obviously, I see the end result, and I have that vision. But there’s other ways to make money. And so I have these standards that I maintain in my life, and I need it to feel good to me. And so yeah, the motel was a big part of that feel good. Investing A, I can choose the revenue. So the effort that I put into that motel is really the results that we’ll get back. And we can change our pricing every day if we wanted to. We don’t, but we have the control. So it’s just like taking back control of my investments in my assets and business.

Erwin 30:43
Okay, you bring up the like the moral and ethical side of real estate investing, because it’s one of the reasons why this show exists. And I’ve had guests on, like Austin, yeah, it was extremely transparent about the Cash for Keys process on the show. And the reason why I asked I asked Austin, if you can share it, so people can learn the truth about what the process is like? And then make a decision for themselves if that’s right or not, right or not for them. Yeah. And he was explicit that the property manager won’t do it. So he has to do it himself. And that’s generally the case, it’s hard to hire someone else to do it for you. You can’t just delegate this. Yeah. And again, people have to decide like, you know, decide what investments right for you what fit does it fit your values? Does it fit your time schedule? Does it fit your capital, your risk, your risk, and all those sorts of parameters?

Speaker 1 31:29
Absolutely. And if somebody wants to do a Cash for Keys, and they have that conversation with the tenant, and the tenant willingly wants to take the money, okay,

Erwin 31:38
you’re compensating them for their for their trouble. Right? It’s,

Speaker 1 31:43
it’s where you’re buying these properties on under those pretenses. And that’s the only way that that is going to be able to service the debt. A lot of people are getting in trouble with that, and then they’re resulted they’re resorting to measures that are not what I would consider ethical. And so for me, it just doesn’t align, it doesn’t align with my values, it doesn’t feel good. I have tenants right now that are under market value for a duplex, I bought it in like 2018. So that duplex has gone up quite significantly in value. And instead of refinancing and pulling all the money out, I’ve just done a HELOC. So I’ve been able to maintain the mortgage low, I’ve not touched the the rents more than what I’m allowed to do and those tenants in there for like 2025 years. You know, I know that like it is what it is. But it’s a great duplex and it cash flows. And then it gives me a nice chunk of change on the HELOC side.

Erwin 32:45
Super cool. And so I’m familiar with it with the groups that you’ve actually, let’s touch on that a bit. So you’ve taken a lot of educational courses as well, because that’s my understanding. Yes,

Speaker 1 32:56
and no, to be honest, like I have done more what I would call experiential education than what I’ve actually paid for education. And my background is research. And so I have a very strong sense of what it takes to research information. And so I have taken educational courses. But I’d certainly not as much as I would like to like I am looking for educational courses that I would want to take that I’d want to invest my time and money into. Got it.

Erwin 33:32
And can you were these courses good value. And that’s part of I think people get it. I’ve had some people stop me and say, Hey, I know what you were saying without saying yeah, thank you. Yeah, stop me about my show.

Speaker 1 33:45
So I start so here’s what I’ve started educational courses, and I have not completed them because my time did not feel like it was got the values that I was looking for, you know, and I’ve been, I’m very I’m a straight shooter. You know, I’m very diplomatic and polite, but I’m also very direct and so I asked those questions up front to say to see if it is going to meet my needs because I’m not looking for mindset. I’m good on the mindset front I’m not looking for foundational level information. What I am looking at now is business I’m looking for that higher level business scaling operational side of things which is very challenging defined and what I don’t I don’t appreciate when, you know, you talk to people that are providing educational programs and you’re very upfront about what you’re looking for and they just kind of whitewash it and just say like oh this is for you

Erwin 34:52
what’s interesting because you know I’ve I definitely show like like for example like Alex holder that Uppsala never air but the biggest lesson And none of that was like I said to him, so for those who don’t Alex, he’s, he’s a he’s one of the owners of Clydesdale capital. And they’ve he’s bankrupt personally in Britain in business. And he took, you know, some very expensive masterminds and whatnot. And, you know, within 15 minutes, I said to him, hey, you’d be probably fine. Only our small portfolio, small Maltese, maybe like a 10 Plex to approximately be fine. But for the scale that we’re doing with, with all the money you guys had, and expensive money to like, paying like 15 17%, or whatever, like, that’s really hard and complicated, right? So like, mindset won’t save you from difficult operations, and expensive money. Not

Speaker 1 35:43
at all. And that’s, it’s why I think I’m certainly coachable. And I’m somebody who is a life learner. But I’m also have very high standards. And what I’m looking for is a level, when I think about the, the experience that I’ve had in the military, you know, the leadership, the instructional techniques, the ability to go into circumstances, and adapt and overcome, like all of those problem solving. It gets you to a level in your life, where you can really go into situations and feel confident that in your ability to be able to pivot to be able to recognize at what point do you need to back out what point you need to keep pushing through. But the the other side of it too, and understanding like from an educational standpoint, that I have organizational psychology. And so, again, that is on the human behavior side of things. That’s the structure of employment, it’s workplace behavior, it’s team building, all of that stuff is there. I need like the entrepreneur side of things like the, you know, really, which is tough to find.

Erwin 37:00
You should ask me,

Speaker 1 37:00
I Well, I think we might have talked about it that for sure. For sure. So that’s where there’s a lot of information out there. And I tell people that you don’t necessarily need to have coaching. I think that mentorship is good when you have the right fit, who your mentor is, surrounding yourself with a network of people, individuals that you look up to who have the same morals, the same values is going to open so many doors for you that you don’t necessarily have to go and pay for somebody to do that.

Erwin 37:38
Oh, no problem paying. It’s just there’s lots of options that are not expensive. No, it’s such great value,

Speaker 1 37:47
and amazing value, and it’s every single month, it’s you know, I walk into that room and you just feel uplifted the way that people are and the sophistication that Oreo brings. And and that’s a big reason why I’m part of that community is because of the integrity and the ethics and the education that it brings.

Erwin 38:07
And the the one day workshop, you guys are hosting the underwriting, the underwriting, the fundamentals of underwriting is that right?

Speaker 1 38:18
Yeah, I’m super excited about that. I think it’s going to be a educational and just the fact that it’s going to be real life case studies here in Ottawa. So you can relate it, you can actually relate it and they’re going to be recent case studies too. So we can actually look at what the rates are and be able to apply that to day to day.

Erwin 38:43
folks listening, you’ll likely hear this after the course. But I apologize to Christian as well. I wish I had more lead time to help guests promote this. But I told them let’s do it again. And let’s open up to make it hybrid as well. I said I saw him like you guys can post your pardon oak in Ottawa. I’m happy to host part of it here in Oakville. Because I’ve seen the comments on on social media, like Will this be hybrid? Will this be online, like will just be in Toronto?

Speaker 1 39:14
We’ll call this the pilot project and we’ll get all the kinks out for this one and then open it up because I mean, once you do, do it, then it’s easy to duplicate it.

Erwin 39:24
And the price is the choke, it’s 150 bucks and the money goes to kinetic food bank.

Unknown Speaker 39:28
A tax receipt for

Erwin 39:30
it. Do you Okay?

Speaker 1 39:34
Proceed. So it’s a it’s gonna be a great event. So it’s really it’s, that’s the that’s the good stuff, right? Like that’s the stuff that I am willing to pay for a good. Exactly, exactly. So it’s just about being wary, I suppose. And I always just go back to the standards being able to go with Your gut asked the questions be very clear with your expectations. And sometimes you’re gonna get disappointed too, like, anything that I go into if I get if I pay money for, I think about that worst case scenario, and I think, Okay, well, if I don’t get the value, it’s a lesson learned and my eyes are open, and I just won’t repeat with that stream.

Erwin 40:22
I’m cheap. So I comparison shop everything in my real estate, including the courses I take, and memberships.

Speaker 1 40:32
Well, then I’ll just go direct to you because the time and but I need the good quality. And

Erwin 40:39
we can talk about offline, but I’d suggest Entrepreneurs Organization for the operational stuff. I love that. Yeah, it’s a nonprofit. So it’s stupid, cheap. Lots of I have lots of friends. I’ve referred to them. They all love it. Like Melissa deplete who I believe you know,

Speaker 1 40:54
I think I saw a post on that. So I think she was just starting out. That’s awesome. Yeah, I’ll look at that for sure. Because it’s that’s the thing. It’s like where there are so many groups, there’s so many events and activities and networking opportunity. And it’s finding again, that right fit to put your time and cheap.

Erwin 41:13
Like Gloriosa nonprofit, entrepreneurs, organizations, nonprofits, so it’s like stupid, cheap. And for tremendous value. You’ll like it just for the networking alone. Alright, let’s move on. Let’s get back to the motel. Yeah. Tell me about the motel. How did you get into it?

Speaker 1 41:29
So feel good investing. And then literally, I had my property manager. So when I owned the bunkies on on the lake, I worked it for a year. So I ran the whole thing myself, figured out Airbnb communicational. That

Erwin 41:46
decided there’s this this is early days, Airbnb. 2018.

That’s, that’s that’s pretty early. Pretty

Unknown Speaker 41:55
early days. Yeah. So

Erwin 41:57
because I had an Airbnb and I was like one of three on Hamilton Mountain, which is a suburb of I don’t even know how much. That’s called 160,000. Population. Today, it’s flooded.

Unknown Speaker 42:10
I bet. So

Erwin 42:11
yeah, so I would guess you’re pretty early adopter, at least specially compared to today, because it just exploded. Oh, yeah. So Oh, yeah. So you had to figure it on your own? There were no courses back then. No.

Speaker 1 42:23
All right. And I didn’t know about them if because back then I wasn’t on social media. And I wasn’t really like understanding the whole I didn’t know that. There were people like me that were out there, which is very ignorant. Like, I can’t even believe that I didn’t even think that there were more investors, but I didn’t even call myself and investor. And so just did it. Just figured it out. Got great. Like everything was great super hosts right away. But it was a lot of work. And so also decided, okay, well, I’m not going to do this for life, hired a property manager.

Erwin 42:57
So before we get to that, let’s talk about the monkeys. How many were there? And then like, what, what, what was this? Was it like a bachelor was there bathrooms for Season? Like what was it?

Speaker 1 43:06
So we wanted a family cottage for probably about two years. And it was Mother’s Day, and I was on Kijiji, and this ad came up for unique cottages. And right away, I was like, I need to go see these and I could tell that they were special. And so I made my husband drive me in a snowstorm.

Erwin 43:26
I got permission of a ton of selling colleges.

Speaker 1 43:30
I know right? Exactly like they. There was a snowstorm on Mother’s Day. And I remember messaging the owners right away, it was a private sale and said, Can I just walk the property? And they said, Yeah, no problem.

Erwin 43:44
And snowshoes. It

Speaker 1 43:46
was it was from the minute and I wasn’t tracking Airbnb, I wasn’t thinking about that. Of course I always try to monetize and I thought well, we would Airbnb our cottage when we’re not using it. But we got on there and there was a cottage down this lane. And then on the other side of the lane quite quite a distance. There’s these three bunkies And so what the story was, it was owned by three families. Each one had a bunkie it was electric. So they were power there was power but there was no running water. But they were done beautifully. So each bunkie had a queen bed and then two singles up top and so they were to level bunkies Each, no bathrooms and the cottage was where it also had like a second level and this was their congregation area. So this is where they cook their dinners and and slept or they did have extra sleeping there. So

Erwin 44:48
so there’s like the inlog have recovered. Then tiny homes then garden suite. Yeah, essentially it’s a garden suite for better yeah, no bathroom. It’s just a bedroom. That’s pretty

Speaker 1 45:00
much pretty much exactly. And so they had an outhouse on the property and you had so we I walked it and it was

Erwin 45:10
I know. Sorry, hang on, where? Where is this cottage and then what years this? I don’t know the last time I saw an outhouse.

Speaker 1 45:17
I know that there was a legit outhouse. So this was in Lunenburg County, Nova Scotia, Lunenburg. It’s beautiful, beautiful, and it was only 30 minutes from where we lived. So for us, we could just like scoot down, it was direct on the lake, little lake Cove, Butler’s Lake, and I just You just, you know, when you know, I’d seen enough cottages, asking 160,000 for this. Okay. So right away, I messaged them, and I said, We’ll take it. And I found out shortly after that there was they received 70 other messages from people. But I was like, Quick Draw quick decision. And they stuck with me. So there’s a lot. Yeah, it was, especially for 2018 we hadn’t like hit the big COVID bubble or anything like that. We were just entering into it. And we ended up putting septic in, in the ground. And we actually think the outhouse did operate it with an outhouse. So for the first season because, and that’s where the glamping came into my mind because there was no running water. So I couldn’t market this as like a luxury cottage, but I, I really beautified them, and so people could have it was you know, glamping so you had the luxury of really nice inside. And they had the lake view so they were direct on the lake. We were able to use our cottage on a regular basis and then the bunkies were the rental side of the house.

Erwin 46:59
So just just to film the listener like I’ve been to Lindenberg, the the top snow for tall ships. It’s like a recreational area of Nova Scotia. It’s tiny but beautiful food’s fantastic. Yes,

Speaker 1 47:11
very touristy, South Shore. It’s just gorgeous to go to Lunenburg and

Erwin 47:18
the Bluenose visits there Yes, yes. For listeners benefit if you remember what a dime looks like I know we have some young people on the show don’t carry cash. But on the dime is the blue nose so the replica blue nose so the famous ship that one Canada and some big race against Americans that it does dock in Lunenburg? Yes, yeah. And I believe I saw it there and I believe I went on board a long time ago. Yeah.

Unknown Speaker 47:43
Is a very so

Erwin 47:47
super hot area. Super hot.

Speaker 1 47:49
So the bunk is in Lunenburg, which is the South Shore and then I know we’ll talk about the motel but the motel is in like the second area. Arguably, I mean, equally, very touristy will will fill Nova Scotia. So the Annapolis Valley which is also quite close to Lunenburg, fancy,

Erwin 48:08
especially with a monkey why decision to sell.

Speaker 1 48:13
We got posted to Ottawa and we wanted to keep it because we this was our forever cottage in our mind. And literally a week before we got our a week before we had to move, a giant tree fell down a hairline away from our main cottage. And we were actually we started gutting the cottage, we are fully renovating it, we put a septic into the because we wanted to have the water hookup, we were going to actually do like a bath house for the guests. So instead of outfitting each bunkie with a bathroom, we’re going to have one bath house. And so we put a septic system in that could house enough for all of the rooms with the cottage and the bunkies. So we had all these plans, but then this tree fell down. And the tree was almost the size of our cottage. It was giant. And in fact what had happened was when they were putting the septic system in, they ran over the root of the tree. And it was just like one storm and it went down.

Erwin 49:15
Right It was that ready to fall over. Just run over. Wow,

Speaker 1 49:19
it must have been and so to us that was a sign because we were still feeling uneasy about managing the bunkies the Airbnb even though we had a property manager, the lake is a family friendly lake. So we were very careful about making sure that the guests were not there to party that this was supposed to be a getaway like a very nice, serene, quiet type. And it just takes extra management and so again, going with what felt good at that time when the tree fell that was assigned to sell it. I put it up I sold it privately. I did the same thing as what the sellers did for me, you know Oh, I got so much interest in this, these bunkies because again, it’s unique and we’ve fixed it up. We’ve now made it. What years?

Erwin 50:08
Are you selling it? 2020? Okay.

Unknown Speaker 50:15
No 2021 2020 Harder.

Erwin 50:18
Yeah, harder. COVID Things were hot for cottage property. Exactly,

Speaker 1 50:22
exactly. So it was a good fit for us anyways to sell it at that time. And then, funnily enough, the woman lived in Ottawa. And she actually, she attends my meetups now, which is, okay, here’s the thing. All world talk about integrity. And I love this because I at the time did not know the investor world. I was not part of the scene wasn’t, you know, didn’t know anybody. We did a private sale. And I stayed true to her as well. And I helped them get through and get the financing. We did a assumable mortgage. So they assumed our mortgage, which was great, because we didn’t have to break it. And then they got, they got to mortgage a property that was torn apart. Because we got it the inside cottage, because we were going to renovate it. So I was aboveboard with everything I showed her the good, the bad, the ugly, I was just very open and upfront, and I stuck with her. And what I love now, I didn’t know that she was going to start attending my meetups. But what she does, and she comes to the meetups, and when people ask her how she knows me, she explains that how the way that I was back then is exactly how I am today. In throughout the wholesale process, and it just really solidifies integrity. It solidifies being honest, being upfront, because you never know. You never know.

Erwin 51:51
Yeah, versus we have people share on the show a nightmare stories with realtors and wholesalers.

Speaker 1 51:59
It’s a small world as much as you think you’re anonymous. Not anymore. Not today.

Erwin 52:05
Especially social media. But I will say that I find Canadians are maybe I don’t know, I don’t know how other people are. But I’ll just say that I find a lot of victims are very quiet about it. Not quiet to me. They’ll tell me in private, but then they won’t do anything legally. So it’s actually so the damages that are out there or not are much worse than then than what spoke talked about. Alright, that actually brings me to something before we talk about the new hotel. Like, can you share that you’ve lost money? Yeah, because we’ve all lost money. Anyone says we haven’t lost money, the line

Speaker 1 52:36
100% 100%. And it’s a it’s a hard lesson to learn. And for me, it’s something that I am, I’ve resigned to like, you know, there’s still a little hope that that comes back. You’re always hopeful at the end of the day, but it’s been a year now. And so I’m resigned to the fact that it has gone.

Erwin 53:00
Can you other lessons, or their lesson to impart on the listener on?

Speaker 1 53:07
Yeah, for sure. I mean, when I look back, I did not do the due diligence. And I invested based on a person and an organization that I thought had a good reputation, because they were well known. They were doing a lot of this. And so for me, that gave me more security than what I should have, which is like the actual due diligence of where that money was going. And understanding well, what’s the plans with it? What are the how are they mitigating any of the risks, and what’s going to happen if it doesn’t, you know, if it doesn’t go to the plan, the original plan, and so there was no specific property that it was attached to. And so for me, like I take that blame that. And that was a big lesson that I learned. I also have that mindset that if if you know how to make it once, you can do it again. And so when you’re going into private lending, there are risks there. And that’s the hardest part. And so don’t give everything that you have during that. And luckily, that wasn’t everything that we have. It was a big chunk of money. It was 105,000. And so that’s a lot of money. But the sad part is there’s a lot of people that gave a lot more. It’s really sad. It’s really sad, like my heart actually breaks for them for us. We know how to make that back, you know, and it’s, it happens in life in entrepreneurship. I’ve talked to a lot of entrepreneurs who are just like we’ve lost weight in our time. And it’s not something that you want to have happen but you have to have the stomach for it. But that It’s not the case for everybody, not everybody who does. Mundane is an entrepreneur. Yeah,

Erwin 55:04
back to, like, vision in sales is a lot easier than execution. You’ve owned property, you executed a pretty deep not easy strategy with bunkie. Airbnb. So it’s not easy. No, it’s not easy. It was local, it was in front of you. Right? Like, Nothing’s easy for them to pull the scale up, taxing and stuff. That’s another thing about mindset. But again, you need to take your eye off the operations. No,

Speaker 1 55:31
you have to be capable, you have to be able to, I was talking to somebody the other day, right? Who’s trying to market their Airbnb right now their short term rental. And they’re doing everything like they’re doing all the angles, and I was explaining to them that that’s the difference between people who are successful and not successful, the ones who are successful will continue to try, they don’t stay down, and where other people might try. And if it doesn’t work out, then they just kind of put their hands up and say it didn’t work for me. Where you have to have that perseverance, perseverance, you have to have the resiliency to be able to just keep going

Erwin 56:12
in for everything got into it. Or that was like one of the messages from Jesse Itzler. Just yeah. Yeah, that was presentation he gave, you know, he poured everything you had into it this evening. And

Speaker 1 56:26
you know, he’s given that I don’t know how many times but he does it almost anytime.

Erwin 56:30
Many times. No, no, no. Any real evening is always improving it to. I’ve seen a recorded version of it, he did better for us. You

Speaker 1 56:41
know, it was like I was tears in my eyes. I was trying so hard not to cry. And I mean, it was just such an emotional, but uplifting. And I’m a big fan. after that. I wasn’t I didn’t really know him much after before that. But even like back to the lending. I’ve talked to three lawyers on that. And

Erwin 57:02
I know I was making some introductions for some friends. Yes, I did. douchebags. Yeah, I say that.

Speaker 1 57:10
Thank you can it’s It’s a scary world out there. And so if if I have to learn these lessons, so be it like that’s the risk that I take, but also I want to talk about it so that other people can learn as well. And if you do have that inkling, then you have to go and you have to make sure that you’re asking the questions and not to be afraid to ask questions that you’re going to upset it or upset them. Oh, yeah,

Erwin 57:37
like I do, just to get ready to screw my tenants. I know who people have done business with in the past, I just go directly to them and ask. So actually, my digital does is actually very simple. Again, I know who people have done business with in the past, I just go straight to them without asking any without asking permission, nothing because they already know who I am. Perhaps most people will take my phone call. And and the thing about real estate investing is that there’s so many good operators, there’s so many good ones. So my policy is I just need one flag red flag, and then I’m not interested in doing business with them. They might like in business. But again, like there’s so many people who have zero red flags. So then, so when there’s when there’s like an ocean of people, maybe not ocean, let’s see a lake, whatever. I’m so sure full of great operators, but no red flags, I’ll just focus on that. Right, versus operators with plenty of red flags. Or even just

Speaker 1 58:29
I think that, you know, for us in this world, we know a lot of people and we have access to a lot of people. The challenge is for the you know, the normal people that are big investors that just want to get that passive income. They don’t think that they have that type of access. But these types of podcasts are great because this is opening those doors for people to say no you do. Even if you can’t like name people right now the access is there. You just have to seek it.

Erwin 59:04
And everyone likes passive but in my experience, direct ownership, educate yourself for everything got into it hungry these days a lot easier. But active on act like direct ownership is still and having control is still the best in my opinion. I

Speaker 1 59:19
agree. I’m, I’m an active investor. And I need the control because I trust myself I trust like I need to know what’s going on, to be able to have the pivot and be able to problem solve. And we just work through things like we’re relentless in pursuit.

Erwin 59:38
So tell me about the motel. Yeah, why why this isn’t get back into into recreational short term rentals. Whatever category this is in

Speaker 1 59:48
the motel again, had that epiphany feel good investing, and I hosted a virtual kitchen party for Nova Scotia because I was homesick And just like listening to the good music and and I still invest in Nova Scotia. So I invited my property manager to come and talk about short term rentals. And that kind of reinvigorated our connection again. And we started chit chatting. And so she really kind of came to me and said, I’d love to own properties, and not just manage them without the ownership. And I need property managers. And so for us, it was a great fit. She owned a short term rental company that really kind of blew up COVID had 30 Airbnbs that she was managing at whole business. And she has a good ear to the ground. She’s local. And so I said, you know, if you want, we can start looking at properties that would be more like the bunkies, like a glamping, or a retreat type space. And we did look at a motel in Lunenburg, there was one I think it was a 20 unit. And she called me up one day and she said, Hey, there’s a motel that’s coming for sale. It’s a pocket listing right now, do you want to go and look at it. So they brought me FaceTime. And just like the bunkies, as soon as we got there, it was 100%. Yes, we want this motel. Wow, that cookie, when you know the area, it’s incredible. Like you didn’t even matter if the motel was needing to be torn to the ground, we wanted this location. And the funny thing is, we did not have the highest bid. So by that time, I think about four people had seen the motel. We had the best reputation. They already knew Noel as my business partner for that. So they already knew well in the area. And all the realtors knew me in the area because I was a buyer, I was an investor for that area. So they knew that we would close that property, and they knew that we would operate it well. But we didn’t come in at the highest bid. And I’m pretty stubborn when I do my numbers. And I ran them very conservatively. They asked if we would go up and I said no, that was my top. And so they chose another bidder. And I asked if we would be the backup. And so when I found out the condition timeline was three weeks for this property, I knew we had it in the bag.

Erwin 1:02:23
Okay. I want to hear the full story. Why were they selling? Do you know?

Speaker 1 1:02:27
It retired? So it was a an older mom and pop operation and they were ready to retire?

Erwin 1:02:36
What was the asking? Eight?

Speaker 1 1:02:38
What was he asking a million? No, that’s that’s the thing. So seven, I want to say 799.

Erwin 1:02:48
Wow. And did you know them? Did you get a chance to talk to them during the process? We tried,

Speaker 1 1:02:55
but not as friendly people? Oh, so we did event

Erwin 1:03:02
North Nova Scotian. stereotyping, maybe it’s such a small town, Nova Scotia

Speaker 1 1:03:11
reputation was not great for this property. And so even they had very low stars. And I read the reviews as part of our due diligence. And a lot of the complaints were quite unfavorable. Not a very nice person to deal with. So that was part of the what I had to understand working with the seller in order to go through this whole process. We ended up getting it for a 35. So that’s what went to eventually. So the first piece the first buyers that got accepted, they put a three week condition for financing. And what we found out in the negotiations was it wasn’t actually just a purchase and sale an asset sale it was a share sale. Okay, so we purchased it we purchased the business entirely and what the land which came with the land to vacant lots actually so came off. So three, three lights altogether. One had the motel on it and then two vacant ones right beside it all waterfront. Oh my god. It’s really nice. Like that’s why you, you would do the same thing as soon as you would see it’s on Evangelium Beach, Nova Scotia. So it’s direct waterfront overlooks blomidon It’s like the view of the valley.

Erwin 1:04:40
So then what’s the plan? What was your plan going in?

Speaker 1 1:04:44
To be ready, and so to make it as easy as possible, so when I knew that I wouldn’t budge on my price because I really didn’t even know how to run the numbers for a motel. So I did my best from like a short term rental perspective, and I wasn’t comfortable to go up higher than what we were doing 725 or 825 was my max and I went 10 More 1000. That was my, my max. When we found out the three week condition, I knew that they were overzealous buyers. Because again, this was still COVID by this that was going on, we’re just kind of coming into the, the downside of it. But people were coming in hot. And so we, as soon as I heard that, we’re going to go back up, I made our condition deadline, a day after their condition to say that like we would not continue our backup offer past it, because I didn’t want the seller to extend anything with the first and I got all my people ready. I have I purchased quite a bit in Nova Scotia. So I already had an appraiser, commercial appraiser, the inspector ready to go, I had the credit union, that’s who we work with. So they were all ready to go. And the environmental. So we basically went and we told the seller that everybody is booked and ready to go as of I think it was like five days after the condition deadline. And all of them knew it, too. I was very upfront. And I said, Listen, we’re back up, I just want to book you for this date. And I’ll let you know if if if we don’t get this. So it really helped the seller and the seller did not extend when the original buyers wanted an extension and then came to us and accepted our 835.

Erwin 1:06:28
And then I’m sorry, what kind of how long were your conditions. So

Speaker 1 1:06:32
we put in, it ended up being just over 30 days conditions. So I put in like three weeks I knew would take to get the environmental, I knew an appraisal would take about three weeks. But what had to happen was because it was a share sale, I worked it in two phases, I did the due diligence as if it was a purchase and sale agreement for the asset. So I looked at just the asset itself. And then we did the due diligence for the business. And so as soon as the conditions were met for the asset, we moved into a share Sale Agreement. Fascinating. Yeah, I mean, I didn’t know what I was doing. So again, it was just you figure it out, the information is there, I talked to the right people. And it was not too bad. I mean, once you learn, the due diligence needs to happen legally and why it needs to happen. And then as well as financially and why that needs to happen then. Then it’s a you know, it’s a fairly straightforward process in the end.

Erwin 1:07:37
Okay, glad you think so. We purchased a company shares as well.

Speaker 1 1:07:43
Straightforward. You know, it’s kind of like taking over somebody’s house, I guess, like, and all of their passwords and all of their programs and what they’re doing. And so that’s been the hardest part because now we rebranded it and trying to take over the accounts and really just like change the, the perception of this property. So we went big.

Erwin 1:08:15
So who looked over their books, for example, we

Speaker 1 1:08:17
had an accountant in Nova Scotia. And it was really important to because, you know, our accountant is here with with cherry. But it was really important for us to have a local connect, because again, you’re dealing with local accountants, and so it was easier for them to be local to local, we

Erwin 1:08:37
really tried to bring your context, especially if they’re used to having more tell clients. Exactly.

Speaker 1 1:08:41
So everything was just like, Okay, what’s the easiest way to navigate this and so that everybody is communicating together and that they understand that we are going to close this property. But there were of course, delays. Not as many I think we actually ended up closing about 30 days after.

Erwin 1:09:00
Fantastic. So for listeners benefit, like people’s businesses records, a lot of them are good. No, all right. But a lot of sellers fudge things, or at least or accidentally think leave things out. So the classic real estate examples are like, you know, maintenance costs, or pm fees, or what they self manage those leave those costs out completely. Leave a vacancy allowance, all those sorts of things. My point is that it’s not always easiest to review someone’s books if you’re not from that industry. You know, so when Sherry bought when we bought our business, Terry’s reviewing the books of another accounting firm, so at least there’s been chairs done audit before. So, you know, we got lucky that way. Because you pay for that?

Speaker 1 1:09:43
Well, you know, it didn’t end up as much like the way that they were describing it that it was going to be an extra 25,000 for fees in order to get the ShareASale agreement and all of the due diligence costs. Okay, I think it really only cost us about five grand on the Counting side and maybe like six on the legal side? That’s

Erwin 1:10:05
incredible.

Speaker 1 1:10:06
Yeah, it. Again, these are people that I’ve used on a regular basis. And we also so my concern was more okay. Is there any legal liability? Like, is there any issues that might pop up over the past years that we might be liable for? Are there any contracts anything that they’re not paying? on the tax side? Have they been doing their taxes aboveboard? Are we gonna get hooked for that? Because when we bought the business, we assume all of the liability, when it came to the actual numbers of the revenue that they were generating, we, we knew that we would have a completely different approach. So we wanted to know, okay, are people staying at the motel? And what does it look like, at worst case scenario, if we were to rent it, or set the price at what they’re pricing it but we increased our price right away, and we fully renovated and completely just got it the place?

Erwin 1:11:06
Were there any staff? Did you take over any staff? So we

Unknown Speaker 1:11:11
did not take over any staff and enough staff?

Erwin 1:11:14
to contract? Oh, yeah.

Speaker 1 1:11:16
So there was no staff, which was great. The owner was the one that would be on site, then he had some cleaners. And we did take on one cleaner, but they weren’t full time employees. So it’s more contract right now. And our motel is fully automated. So we actually have no staff.

Erwin 1:11:37
That does this for listeners benefit. When you inherit employees? It’s somewhat it’s almost like inheriting a tenant. Yes. Don’t have to, but you have a contract with them.

Speaker 1 1:11:46
actly. Exactly. It’s, you know, that was, we were very happy to see that there were no employees. And our Lord was happy to

Erwin 1:11:55
write, especially with Noel, like, she’s gonna run things. So she’d like the team. Yeah, that’s right. Yeah. All right. All right. Tell me tell me about automation. Talking about automation. So like, when someone checks in, there’s nobody there type thing. Nobody there. And so, like, so like, similar experience to most people’s Airbnb experience?

Speaker 1 1:12:12
Exactly. So we run it like an Airbnb. And we set things up in in just in case. And so there’s been a lot of lessons learned, even just from the platform itself. We decided not to put it on Airbnb at the beginning, because the platform that we were using was not integrating with Airbnb, and it was causing too much confusion. So we just wanted to keep things simple. We had one platform, we use the check front, at first. And I wish we would have done more research before jumping the check front, but at the time, going through the rebrand the renovations trying to open. It’s almost like that became low on the priority list, which it shouldn’t have been it just ended up that way. So last minute, we decided to go with check front. It was good. It was just it wasn’t able to expand, so it couldn’t integrate to any other platform. And then halfway through the season, which I also don’t recommend, but we then transferred to web res Pro, which is what we’re using today. And that platform is great because it automates or integrates with Expedia booking.com, Airbnb. And so now what’s happening is we’re getting bookings from everywhere.

Erwin 1:13:35
That’s awesome. I probably am using

Unknown Speaker 1:13:39
web res, web res Pro.

Erwin 1:13:41
I’m probably using it unknowingly. Because it does I when I’m shopping for a rental. I won’t say when and where. But I noticed it on different platforms. Okay.

Speaker 1 1:13:51
Yeah, yeah, I said, and that’s why we went with it. And so it’s, it’s solid. I haven’t found it as you as user friendly for myself as check front. But again, that’s not really the area that I get into the weeds with but I still like to be involved with that my husband actually become a an expert with it. So he helps the background but

Erwin 1:14:14
are very nice.

Speaker 1 1:14:16
Very, yeah. Yeah, he’s, he, again, the military side of him is just like, pushed through, he gets the job done, no matter what. And I need somebody like that. And so we operate so well.

Erwin 1:14:31
Nice. Nice. entrepreneurs find a lot of entrepreneurs. We joke about it and private, we say like visions are great. You can’t execute you’re dead.

Speaker 1 1:14:41
Right? Right. Yeah. He, he’s, if you’ve read traction, like I’m the visionary in the relationship, and he’s the integrator. He’s the guy that is like gathering all the He’s much better technically than I am to and he just, he does it so Much easier. So

Erwin 1:15:00
it works. Yeah, we have EOS and all of our businesses. Yes, I love it. I learned from you. Organization, complete different, unrelated acronyms are similar for no coincidence. But it’s funny because the military

Speaker 1 1:15:15
really kind of operates EOS style as well, once I started to really learn the lingo, and it’s been a very natural progression for me to implement in my business to just because that’s what we’re used to. So,

Erwin 1:15:28
yeah, the structure, the structure that makes sense structure, do

Speaker 1 1:15:32
like structure. But But yeah, so we’re fully automated guest will reserve. And then they get, like a little message that will go to them. And then the day prior to their check in, they will get their specialized code, the codes are generated each time for every new guest. And then they get a nice big welcome message very similar to how Airbnb is operated. And we have security cameras all over the place, we make it very clear that there’s nobody on site per se. But we, if anybody messages us on email, like that’s one of our right away, we’re monitoring the email to make sure that somebody is responded to, we have somebody who lives in a cottage that’s like two cottages down, so we call him our concierge Newfoundlander name is John. And he’s awesome. Like if we need wood, or if the guest needs anything, John will come and bring it. We also will let guests go into get extra coffee if they want. And so we have all that monitored. And then of course, we’ve got the cleaners on site between like 10 o’clock and four o’clock during the day. And then Noel is 10 minutes away.

Erwin 1:16:47
And then has the financial performance been?

Speaker 1 1:16:49
Great? Yeah, it’s been like, better than I expected. And so that’s been I mean, the obviously, the biggest and best outcome of all of this is realizing the potential that you can have to earn revenue when you move into something like this. And so even from like a tax perspective, being taxed as an active income instead of passive because it’s a business is just like, very exciting for us. So from a and I can even like and I’ve shared this on I think I was at the summit and I shared that within the first 90 days, we brought in 100,000. Gross. And our mortgages again, around 500,000. It’s it’s pretty good. We’ve now gone yeah, now it’s the mean people are booking into next year. Weddings are sold out every single weekend. So a weekend for us is about 2600 bucks for a night actually, I should say just for a night.

Erwin 1:17:58
Sorry, it was 2600 you get a room but he had

Speaker 1 1:18:00
nine rooms. So if we book out all nine rooms, then that’s I think around 2600 I’d have to redo the math but it’s just over two grand for

Erwin 1:18:10
the listeners education benefit, like what kind of what’s the what’s the the term that all Airbnb hosts use? Like? What like percentage occupancy? Like what do you what’s your percentage occupancy for the year? And

Speaker 1 1:18:23
so when I was running the numbers, I have it at 40%. And so during that time, we’ve been even at around like 35% occupancy, and we’re making Wow, 100 grand every 90 days. So just over 30

Erwin 1:18:43
and that’s good enough for Yeah, I’m

Speaker 1 1:18:47
Oh, yeah. Once we and like, you know, this is just our first we just opened may 27. So we missed better this spring, we came in hot. We had one booking mechanism. And so now that we’ve been able to expand, we are very excited about what the outcomes gonna look like. I mean, even if we could get up to 50% occupancy would be amazing.

Erwin 1:19:11
What am I google? What’s the what’s the website? The breeze

Speaker 1 1:19:14
motel So www dot the breeze motel.com

Erwin 1:19:23
Are you at the breeze motel on Instagram? Yeah. INNOPOLIS Yeah, you got found you online. That’s pretty easy. You’re here you’re now on Annapolis Valley tourism site as well.

Unknown Speaker 1:19:36
Okay. Excellent. Good. The only job

Erwin 1:19:42
you don’t know every birch by chance to you. Avery birch. He was on my show us a no he’s got 100 Airbnbs under management mostly in a Halifax Okay, interesting. Yeah, let’s do this episode. I can introduce you if you like. Yeah, I’d love to as well. Yeah super cool so it’s on Instagram the breeze motel the breach motel.com Is your website that right? Yes, yeah. I was looking for the views. I found your your shorts. Yeah.

Speaker 1 1:20:12
Okay good. Sorry, I’m shorts. You have Instagram and what I’ve actually found so we have a social media team. They do all of the videography and manage it for us. But tick tock has been our alias. I will put up a thing on the motel and tick tock goes crazy. We get up to like anywhere between 200 to 400,000 views of me talking about the motel It’s nuts.

Erwin 1:20:42
Okay, Tik Tok the breeze I don’t have an account Okay, delete

Speaker 1 1:20:47
have to talk. So you have to look at me so Victoria Clooney because I don’t even have a breeze account on Tik Tok and I will talk about it and people are just absolutely love it. And tick tock is tick tock can be pretty brutal. Sometimes, like people are not the nicest, but we have got nothing but love for the motel. And it’s almost like all of Nova Scotia has just like swarmed this motel. They love it. And we get a ton of business from it. How

Erwin 1:21:18
come you don’t do the same? You know, if we don’t repost on Instagram?

Speaker 1 1:21:21
Um, I do sometimes. But again, like, I’m tired.

Erwin 1:21:32
I’m listening to your tick tock or Yes. Your voice in both my ears.

Speaker 1 1:21:38
Yeah, it’s, it’s really just user generated content. So what I try to do is I just talk about my experience. I don’t really, you know, I just tried to be like a real person, because that’s what I am buying hotel, trying to figure it out. And people love it. Like some people will even put in comments like I’m at the motel right now watching. Where we get a lot of hits on the website, we get a lot of lot of bookings are going to come through tick tock, which has been again, another eye opening experience.

Erwin 1:22:15
I’ve seen the comments, and has been going to the yacht motel since a young boy. Aren’t

Speaker 1 1:22:20
they nice to know while? Yeah, they had been there a long time. I think it’s about 60 years old. I

Erwin 1:22:26
stayed there two summers ago. The views are unbeatable. Can’t wait to visit once the rent is complete. Nice messages.

Unknown Speaker 1:22:32
They are really nice messages. Sounds

Erwin 1:22:34
bad. Where do you find the bad ones? I know your social media guy Ryan is awesome.

Speaker 1 1:22:43
He would eat that up. Love that. Again, good. Nova Scotian. Like we we hired Nova Scotia social media company, because we really wanted the voice of the breeze to be that East Coast vibe. The hospitality with like, you know, little bit. Alright. Swag,

Erwin 1:23:02
you’d likely have left less joke with Avery as well, because our context is different. I’m from you know, I’m from the GTA. He’s from Halifax. And he told me, he told me how he broke up. They broke up a bachelor party. And they, their guests apologize that you’re right, we should leave some left in a five star review.

Speaker 1 1:23:22
We just had, we actually called the cops for the first time. They’re not paying. So my husband. So we’ve had some issues with the media because you don’t in Expedia. We anybody who books with us pays up front. So that’s one of the that’s been amazing for us from a revenue standpoint, because even if they’re booking next summer, they’re paying right now. So we’re able to generate revenue, even if we’re not going to be in our high season, if people are still booking. But Expedia, what we’re learning is that they don’t collect the funds. So there was like a big about $11,000 gap of funds that we found was missing. And so it was because anybody booking with Expedia was not getting charged. So we had to go back after the fact. And long story short, but there was this gentleman that booked with us. I got a complaint from one of the guests of noise and it sounded like it was getting aggressive. So we don’t mess around like we call the police right away. They came out and did a check. And then we found out that he didn’t pay. Then my husband went direct to him. My husband is military police as well. So he’s connected and he knows you know what the rules are and where they can go. And the guy gave us a five star review.

Erwin 1:24:47
Too funny. Unknowingly not pay. No, he doesn’t have money on the credit card. Oh, that’s that’s what we’re being told about us. allowed?

Speaker 1 1:25:01
Well, that’s the that’s the funny thing. So I don’t know how that happens. And that’s part of the growing pains when you go through all of this. It’s like, what you think is logical that that’s great, is not and the fact that we have to then go back and charge people and so that was that was complex. We’re having issues like Airbnb is declining requests before even us getting to like as soon as somebody wants to book with us even though we that turned the instant book turned on Airbnb will decline it. So now we have to figure out why algorithm.

Erwin 1:25:42
And then what did your investigation show was it was a valid was a valid rejection? Because I know I know lots of Airbnb investors have criteria. Didn’t know if the algorithm accurate and like was it reasonable in decline? Oh,

Speaker 1 1:25:55
no. And we keep it all very open. Because you know, being a motel we’re not really checking people’s backgrounds like you would normally for any type of Airbnb, as long as they pay. We’re, we’re pretty good. Like we have all of these policies in place. And we are very clear with that. But no, it was Airbnb was saying that it was web res pro integration. And whereas Pro is saying that it’s Airbnb, so then you have to, you just gotta go through all the channels to figure out okay, where is the actual problem? And so that’s, that’s the challenge that you just have to get through. But once you get through it, then then you’re good for the next one.

Erwin 1:26:37
Speaking next one, are you looking for our next one?

Unknown Speaker 1:26:39
Yeah, absolutely.

Erwin 1:26:41
How is the market now? Because it’s all over the news like Muskoka, and like, swarthy cottages are just hammered right now.

Speaker 1 1:26:49
And that’s why I love motels is because with everything that’s happening with Airbnb, it’s almost in our benefit, because as soon as regulations come in, and bylaws were commercial, so they can’t touch us. We also we get commercial appraisals. So the motel just recently got appraised. And so after 10 months, it came in at 1.7. So we’re, you know, quite happy with that. And double. Oh, exactly. And that was just 10 months, like we’re getting that appraised much earlier than I was expecting to do it. But yeah, we it cost us nothing really, we just need an update letter from our appraiser. So I was like, Okay, well, I’m so curious, how do I not?

Erwin 1:27:36
Why don’t the sellers think about that, if you just ran a tight ship, I should have done that.

Speaker 1 1:27:42
But that’s why. So the location is obviously very important. We’re thinking of, we’re not thinking I will develop the two vacant lots that came with the motel as well, like, we’ll expand. And then yeah, we’re looking for the next one, that’s going to be good. And again, want to be conservative, want to feel good about my purchase, and want to know the pits in an area that the location is not the draw. And so it’s just a matter of making it stand out and have good operations.

Erwin 1:28:12
How big are these lots? And would the plan be to put additions on the motel or just standalone motels?

Speaker 1 1:28:18
Well, that’s why we left them vacant. And because we really just wanted to focus on customer service and feel it out to see what would be a good fit before we go and invest any money in making plans. But the whole three, three parcels is an acre. So we have about an acre for the whole thing. And so we’ve talked about putting like, more like modular type cabins on there. We could build another motel if we wanted to. Some type of wedding type venue, you know, making, trying to think about like, what’s the highest and best use, we haven’t even we’ve just we’re in the brainstorming stage right now. But we know that people want to come. And if we have wedding parties, it’d be great to have cottages for the bride for the family. And then the guests can stay in the motel.

Erwin 1:29:13
Tasha so your experience. Yeah. Okay.

Speaker 1 1:29:18
I wrote her name. So it’s, it’s fun. We’re having a lot. That’s again, back to the field good investing. It’s so fun. When we meet when my business partner and I have our meetings. We can’t help it just daydream about all of the things that we want to do. And it’s hard to actually get to the specifics because we’re just thinking about packages that we can offer. We want to collaborate with businesses, we want to really incorporate that local feel.

Erwin 1:29:47
My good friend that does that does that host that short term rentals that focus on weddings, which she tells me is that you know, it’s not like long term tenants are usually there’s bring your problem ones versus like when couples getting married. It’s just pure happiness. Yeah,

Speaker 1 1:30:05
exactly. And if you can, we want to keep things simple. People are splurging. And we have a range of prices. So we’ve got like two oceanfront suites, and those are going to be the highest price. They’ve got, you know, an extra room, they’ve got a full kitchenette in there. And so they’re the much more nicer ones. And then we’ve got everyone has a view of the water, which is the nice part about this motel. But just I guess he was, as you start to go back towards the back part, we just tried to offer different price points for people.

Erwin 1:30:46
My friend, I have another friend that also offers because if someone’s hosting a wedding, many chairs, just so happens to rent chairs by the chair. That’s another as another income stream. That’s

Speaker 1 1:30:58
it like, you know, food trucks. There’s lots of stuff. There’s a community center right beside us. So, you know, we’ve been just trying to trying to get over to be able to either rent that or acquire it somehow. Because it’s this. It’s untapped

Erwin 1:31:16
this area. And there’s so much mushrooms is awesome for like an automatic.

Speaker 1 1:31:22
Stay in one venue. Yes. Yeah. Yeah. Because most of the rooms that we have either doubles to double beds, or queens or kings. So we have a variety.

Erwin 1:31:33
Amazing. I mean, can we talk about your networking, your Meetup groups?

Unknown Speaker 1:31:37
Sure. Love to

Erwin 1:31:39
tell me about them? What are they called? Where do you meet? So I’m,

Speaker 1 1:31:42
I run a women’s networking group called invest her. It’s the Ottawa chapter. And it’s part of a larger group that’s based out of Ottawa, or, sorry, Ottawa, it’s based out of the US. And we meet the first Wednesday of every month, I tried to keep it very regular, so people can plan around it. And yeah, we average between 3550 women come out every single month, and we tend to go, it’s completely. So it’s not, the nonprofit is just completely free for women to show up and be surrounded by women that are doing things and it was a big gateway for me. Like I went to my first investor meeting here in Ottawa. And that was what opened my eyes to oh my gosh, there’s people like me doing this and doing even bigger things than me. And so it’s just encouraging women of all levels. If you’re interested in real estate, or you’re, you know, building multi families and subdivisions, you’re welcome to come and people come in and they might feel timid at first, or they might not think that they are ready for this, but they leave just feeling so good. It’s just such a welcoming space. And then of course, I’m also involved with Oreo, so I’m on the board for Oreo, and we meet on the second Wednesday of the month, and my Wednesdays are busy. And Oreos, amazing Oreos, a non at the membership is 127 annual, which is ridiculous because we bring in speakers, two speakers every single month, and the quality is impeccable, like the amount of energy the board that we spend to vet these speakers and it’s, it’s almost a it’s a job. So there’s about I think six of us on the board and each one of us have different roles, but we all come together and we make the decisions together and it’s a it’s an amazing community and so that one I think we have up to like 200 people come monthly for that one we’re at the Infinity center so it’s nice because we have a regular spot so everybody knows where to go and for a nice place always trickle out somewhere afterwards for good networking. Fabulous.

Erwin 1:34:05
And then where where can people learn more about investor and Oreo?

Speaker 1 1:34:11
In Oreo is WWW dot Oreo. So sounds like the cookie but it’s spelt o r e i o so Ottawa real estate investors organization.org That’s our website there and we always post we also have an Instagram account Oreo instant dot Oreo think that’s it? And then yeah, okay, perfect. And for me Victoria Clooney, if you find me I’m on all the social media platforms. Clooney is spelt CLU and E y. So sounds like the actor just spelled different. And then same so for investor that I just have that in my LinkedIn bio and it were on meetup.com which is nice because then if you read you stir or you sign up, it’s a free membership. And then you just get notified where the events are when they’re taking place.

Erwin 1:35:06
Amazing. All right, we try to thanks so much for doing this. It’s amazing. Thanks for having to learn a bunch. Both both loss and wins. That’s how she goes, Hey, how long have you been in business? How long has the motel been running?

Speaker 1 1:35:23
So since we’ve acquired it, we’re at actually, it’s gonna be one year in November. So are we oh my gosh, tomorrow is our one year anniversary of owning owned

Erwin 1:35:33
it since it’s been open for business or owned it. Since

Speaker 1 1:35:36
it’s, since we’ve owned it, the motel prior to us. People are talking about like back 50 years, which is not like some people have mentioned on Tik Tok. I think I did one video asking for people to respond with like connections that they had to the motel. And we had people saying that they had been there as a child, or that their parents went their grandparents like it’s a staple. And people are just so happy that it’s been revived. Amazing. Yeah, yeah, I’m really excited for this.

Erwin 1:36:10
So you’re making people happy, it feels good. And you’re making money,

Speaker 1 1:36:15
which feels even better. You know? That’s the that’s the point. You can do all of this. And you can find ways to match your passion. And you can make profit because making money is good. You just need to figure out how to do it. And I love doing it. Yeah.

Erwin 1:36:32
And you live in Ottawa, Ontario, yet you’re in your investment is not purview to Residential Tenancy Act, or LTV or the equivalent out there because your commercial, right? Correct. Amazing. Yeah. It’s attached to real estate to

Speaker 1 1:36:44
cool, exactly. So it’s in the world. It’s all very, we’re just building on the skills that we’ve developed throughout our experience with real estate. And now, it hones even more skills like now I’m looking at businesses, I love the idea of businesses. So when you know, Jerry was talking about hers, I was a champion for that, because I was like, I am very invested in learning more about buying business. I see the value in that.

Erwin 1:37:12
Yeah, especially with with investors struggling for cash flow, and like residential real estate in Ontario and BC, like, people need to expand their church. Exactly.

Speaker 1 1:37:20
So if you have the skills, and you can do it, which we do, we feel very comfortable in that world. Great. What’s next?

Erwin 1:37:31
passive, passive, you have a partner, you have a partner who’s your boots on the ground, day to day operational.

Speaker 1 1:37:36
And I would continue that model, like I was looking at a painting company the other day just for fun and think, who would be good to manage a painting company, and I can just keep doing what I’m doing from the business side of things. The same with the tiny homes, like I’m acting with partnering with a business that owns tiny homes that makes tiny homes and so I will have a role in that that is comfortable for me that, you know, expands on the skills that I have, but you find the people to do the work that they are.

Erwin 1:38:10
Is this house painting a residential painting?

Speaker 1 1:38:13
No, well, the tiny homes is there here local here in Ottawa. And so they actually build tiny homes and they’re expanding. And they also want to do good in the community. And they’re actually building like a tiny home community in Perth, which I’m super excited about. And so it’s just opening more doors to people when it comes to affordable, investing.

Erwin 1:38:35
Amazing in the wild, to have you back on the show and you’re more ready to talk to it.

Speaker 1 1:38:39
I would love to I would love to yeah, stay tuned for that. That’s exciting. Amazing.

Erwin 1:38:43
All right, Victoria. Thanks for doing this.

Unknown Speaker 1:38:45
Thanks, everyone.

Erwin 1:38:48
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.ca/youtube. To register for 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 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 at that investor training.ca/youtube Thanks again for watching. See you in the next video.

** Transcript Auto-Generated**

Erwin 0:00
Investing where positive cash flow areas of job growth and warm weather, we’re getting control of the retirement investment plan and legacy portfolio. All of this and more on today’s episode of The Truth about real estate investing show for Canadians. I’m your host Erwin Seino. Landlord since 2005. Realtor and coach to investors since 2010. Full time realtor of the year 400 million. That’s 400 million plus in client transactions and host of this little podcast that could. It’s currently ranked number 81 Business podcasts per iTunes. And that’s all over the world. Thank you to my 17 listeners, thank you for all the likes and subscribes and positive reviews. Five stars reviews please on Apple or Spotify. We have a different podcast for you today as I am be the one being interviewed by today’s guests of the show. Andrew kin CEO of share a technology based asset manager of single family rental properties in the USA, a focus on landlord friendly states of the southern USA. After months of research and due diligence on both investing in the US and on Share. I’ve conveyed to my wife cherried the risks here that we bear with the landlord tenant board with an eight month backlog just to get a hearing. Even if it’s something as little as not a little but non payment of rent, rent control. We’re only allowed to raise our rents two and a half percent here in Ontario three and a half percent in BC. That means that inflation is the risk for us to bear as landlords. So and then you combine that with the fact that our better simpler investments in the opportunities in the USA, it makes sense for us to sell some if not all of our rental properties here in Ontario, actually have three listings coming up in the next week or two for my student rental properties. On today’s episode, the tables have turned Andrew asked me all the all about the decision to invest in the USA via direct ownership of real estate. So direct ownership deserves some attention and definition. Unlike what others out there doing a lot of influencers and real estate gurus they are raising capital or OPM other people’s money, which is fine. This is a capitalist society, I’m a part capitalist as well. But this is different. A direct ownership means I own the property with full title, I have complete control over the house and do not share the ownership with anyone via joint venture or shares in a company. It’s just me, the bank and my wife Jerry, as always in how our nearly two decades of investing has been direct ownership, if done correctly, means higher returns. And that means getting ahead in life. I bear all the risk. And I keep and more importantly, what really happens, at least over the last 20 years or so is it to keep all the upside worst case I only quality house and a quality location that I can renovate move into or sell. That’s you can’t see the same for many real estate investments out there. This is how I’ve always invested. My wife and I don’t take on partners, you won’t see us asking asking people to raise capital or private lending or any borrowing or anything like that. It’s my belief you don’t need joint venture partners is I can show anyone how to invest just like my 45 Plus millionaire multimillionaire real estate investors. Using in the very efficient path with the least stress is possible via direct ownership. I can’t say it’s been not stressful last few years as an Ontario landlord. But let’s not take our eye off the goal, which is of every real estate investor, a comfortable maybe even early retirement, that is typically the primary goal of pretty much every investor that I meet. With easy financing in the US available for unlimited properties. The tax part I’m not worried about my accountant. So talk to your own accountant. The worst case is if you don’t if you do your taxes correctly, your corporate structure correctly, one will only pay the same total amount of taxes but it’s the split between how much you pay, you’d pay someone to the US and you pay someone to Canada. That’s the worst case I’m not paying more tax. The biggest risks to the real estate investor are removed. That’s for the interior. That’s for the Ontario investor. There’s a whole lot less risks when investing in the southern landlord friendly markets of the USA. There are risks but there always are. But I’m choosing to invest where my hard earned money will work harder for me, again with a lot fewer risks and greater potential for cash flow. Everyone has to do their own research and due diligence. I’ve done mine I’ve done mine including I did a site tour around Atlanta, Georgia. I think I looked at eight or nine properties from the inside I knew so I was inside of them myself. And I’ve grilled Andrew CEO share probably more than anyone else has. Poor guy was sitting next to me on that flight home from Atlanta and there are no there was no inflight entertainment for him to get to hide hide from before from Yeah, we had we were on like getaway or putting on a plane in economy class, just two plus hours of me asking questions. Have a listen to Andrew asking me the most common questions Canadians are asking about investing in the USA. Please enjoy the show. Oh, yes. And for more information on share investing in investing in the US, the website is www dot iWin dot share sfr.com. I think that’s WWW dot iWin dot share sfr.com mentioned Erwin or Iwan or that you’re in the pursuit of the truth about real estate investing in they’ll take good care of you. Please enjoy the show.

All right, Erwin. So what’s keeping you busy these days? Listing I’m currently listing three my properties. There’s no market for student rentals right now for duplexes. So I’m focusing on my student rentals, which have higher demand. So thank God, I had a diversified portfolio. So again, my plan is to sell the timing, the seasonality is correct to be selling a student rental. So that’s I’m prepping to sell all my student rentals. So that’s keeping me busy. And yet having to talk to my clients through these difficult times of being a landlord with elevated interest rates. landlord tenant boards backed up eight months just to get a hearing. And that’s just to get a hearing doesn’t mean you get a decision. So having to support clients through that, you know, having to support clients through challenging renovations, or unfortunately, defective renovations, like at this one client, who bought a turnkey property, but he’s got water coming into the basement. Right, bought a turnkey, from the from the builder, from sorry, a builder, a small, very small builder, and then his other property, then he has renovation, as base basement suite at the basement, the tenant moved out because the floor was put down on level floor. So the floors popping up in in the sharp edges on on flooring, so their child who’s still crawling around this too unsafe. So how to do cost to the client through yikes dealing with the manufacturer and the general contractor on Yeah, you’re like a real estate investment shrink or therapist. You know, the funny thing is like when I when I actually touched BTT asset manager is as like, this is what I always tried to do. Right, right. But we can never get to that scale that sort of we can never have all all great vendors and each of the positions. Like for example, property managers, I’ve personally fired five property managers. I just fired one earlier this year for my St Catharines properties. It’s just and then the tenant things is harder, right with you know, I have properties that are under rented by like $1,400. Right, because, and then for all the landlords listening, like we are subsidizing our clients lifestyles, and we’re backstopping their housing inflation. So everyone feels the same like I do. And, yeah, firstly, I’m tired of it. Yeah. So, you know, it says the right season to get rid of your real estate, why are you offloading? Why is it just because of the negative cash flows I had the headache or what’s the driving force. So, couple things, I want cash so that I can move that money around to better assets. One pay down some debts and take some profits when there were some headaches because again, like to these properties, that property manager are fired and so it’s been a bit of a headache to deal with that. This is not why I got into real estate, I didn’t get into real estate to be a landlord to like, deal with the stresses of being a landlord. And then, you know, found opportunity in the states awesome, where I can find better honestly better numbers on a single family home than a student rental. And then student rentals for anyone on a student rentals are difficult to finance. Versus I can buy properties in the States with debt service ratio mortgages, which is just a commercial commercial apartment buildings which is what the dream for every investor is to not have to self qualify for property for mortgages and I’m difficult to self qualify because I’m self employed and I have like seven corporations so mortgage people hate me Yeah, because the review like seven corporations to qualify me and then if they can’t qualify me there’s did all this work for nothing. Yeah, it’s a manual process. There’s no system for that. Oh, it’s brutal. Yeah. And then like, we my wife, usually my wife has explained to the mortgage company like what’s going on? Because that’s not easy to to interpret all this. So yeah, looking for it easier. Looking for opportunity. Yeah, I like I’ve been public about it. I believe that the markets gonna bounce back once we see Some, what’s the rhetoric? Like once the rhetoric changes for the Bank of Canada, the interest rates that they’re at least pausing, which they’ve already started to allude to, then we’ll see property prices go back up. And, and then my, my belief is that the Americans will cut after me after we do. So it’s ideal timing, I think, to be getting into, like the US market, or Canadian market, if that’s your choice, it’s not mine. But yeah, I see other opportunities. Did you start looking down sales before we met, or was that like, we saw you were actively kind of looking not actively, like, I’ve had, like, I’ve been around real estate investing since like, I’ve been a landlord since 2005. I started getting really educated in 2008. And even back then, like, there was some good content around how it’s easier. It’s more favorable for landlords, the rules and regulations in the States. But the entire time finding financing readily easily. Scalable financing was not available. Up until, like all the people I knew who were buying in the states were either doing cash like hard to cash, or they’re using all HELOC money off of their home. And these are Canadians. So they’re buying up to $200,000 house in Florida. All that money came from their HELOC. That’s hardly scalable or good use of capital, in my opinion, for investment purposes. So I’ve ignored the US market. I’ve always been a fan of America, like the American economy. And, you know, I drive a Tesla, and never thought I never thought I don’t want an American car. Never. Like my family had terrible experience with like Pontiacs and GM products. So never like we swore as a family we’d never own another American product and car. Now I drive a Tesla. Anyway, USA jersey. Yeah, and we’re in need USA jersey. Maybe it’s made in America to know it’s made in China. But no, I never considered the US never took the CEUs seriously until until just the last few months. Okay, so I know you’ve been diving deep. We’ve been spending a lot of time together. You’ve officially joined our advisory board we trip to down south like as one by the way. Yeah, yeah, that was definitely a good trip having dinner before dinner. That was awesome. Yeah. Yeah. So you know what was? What was the biggest eye opener for you like coming in and going down sell speaking to some property management companies like what were the biggest takeaways of that trip? So even before that, first of all, was the financing piece opened up? So our now mutual friend Scott dealing them? Because he thought he because he focuses on investors and because he’s dual citizen, he was able to open up shop in the States. At last check. He probably has more now at last check. But he had nine lenders ready to lend. I think he’s got Yes, but onboard another one today. Fantastic. But and every time we onboard another lender, like the term seemed to get better. Are you searching more aggressively? Yeah. Well, yeah, through I’m sure you’ve helped guide him into as well which lenders are more favorable, really great job. Like, I’m constantly pinging him like, like, I just messaged him again, got this one scenario, how can we help this one place and then go with their Canadian let me look on this side, as well as sat down south Mike perfect. So Scott’s coming on the show as well. So our listeners will understand better his background, but this high level, like he was the number one person at a Bay Street bank 400 units in one year, which is absolutely incredible. 400 mortgages. And he did, yeah, he got me several mortgages, tough mortgages, to student rental mortgages, which are tough mortgages, and I’m tough to lend to. So he’s always been great to me and my clients. And now he is the only Canadian broker I know of who can offer investment mortgages for Canadians on us properties. And from what he tells me, each lender can do like 10 to 15 properties. So now I have a year. Okay, so no one’s gonna get to that point, everyone’s gonna run out of capital way before they get to their mortgage limit. Just my experience, most people run out of capital before they run and mortgage the room. So now, so now I can do leveraged asset buying housing buying. So that’s that was the first thing that otherwise, if that wasn’t available, then I wouldn’t have gotten to Atlanta with you. Right, right. Because there’s no point in doing due diligence and American Properties and Property managers and share your in yourself that without knowing that I could scale a portfolio. I can get to like a 1020 30 property portfolio. Right. Right. Like that’s your experience too. Right? Exactly. You’re on 20 yourself. No one you can’t do that cash all cash? No, no, no cash, definitely not cash. So So then when we went to Atlanta, first off, one of the one of the REITs invest and they just bought a building. They don’t normally buy buildings. They used to do land developments, but they just bought a building in Atlanta. Oh, yeah. Like Atlanta is good. So so they sent me their pitch deck. So I’m reading through and like, this all makes sense. Like I went to business school. I’m old school and a real estate investor. I don’t this is not an emotional for me at all decision. I grew up I go based on job growth, economic fundamentals is the population growing. populations tend to grow when jobs are growing and incomes are growing. And Atlanta just tick so many boxes, right? Head Office to seven team fortune 500 companies 31 head offices for Fortune 1000 I went I took a selfie in front of the coat Museum, coke, Coca Cola had offices in Atlanta.

So just it’s check so many things. population is growing way faster than the national average. It’s a tech hub. The airport’s like, the one of the biggest in the world. It’s not Yeah, so it’s just jobs, jobs, jobs, jobs. Huge, huge population. I didn’t know all these things like area populations, greater Atlanta is like 6.2 million. So that’s for anyone who’s falling. That’s like 50% bigger than, than all of Alberta. And this is one city in America. Right. So, so going in, I was impressed. And then also the deals the past deals you guys have done. I was impressed by the numbers. You know, it seems like the ref ratio was if a property was 300,000. They were in for $2,000 a month plus utilities, single family. And then as someone who’s done a lot of renovations I’ve owned over 40 houses personally, almost all of them are very invasive mortgages. I’ve done top ups where I’ve added second stories. I’ve done lots of basements I’ve done additions I’ve done full gets guts where like, like the house is stripped down to just a brick wall. Even the windows no roof even I’ve taken a roof off of a property as well. Wow. Oh, yeah. Hardcore. Hardcore. And then versus I looked at your like the shares business model. Like your you got your econ major renovations. 50 grand, like an extreme major renovation? 50 grand like, Oh, yeah. 50 grand, you might see a stud 50 grands a joke. Right? Yeah. Like our average or our for basement apartment retail is 160,000. Canadian. Right, which is standard practice for us for renovation. And we’re and we’re looking at a hold of being vacant for like 612 months. Oh, yeah. Right. Like, how long does it take you to do a $50,000 renovation? Yeah, well, I think they quoted, you know, we tried to deploy depends on which property manager will you know, they internally target $1,000 a day, but probably closer to 750 to 800. A Day a day is their target. So we’re talking about some two months. Yeah. That’s your that’s your major. Gotta get Yeah, we we put that into the performance. So we got to get a hold ourselves to that sort of velocity. Right. All right. But yeah, 50,000? No, I mean, in proportion to the house price, I get a $200,000. House. It’s 25%. But I guess what’s 162? The price of one of those houses? It’s a lot. Yeah. But in this principle, simply 160 Canadian is more than enough downpayment. Yes. To get a whole house in the States. Yeah, yeah, it’d be all cash. Pretty close. Yeah. And the objective, the objective of a real estate investor is usually the one hard assets. And there’s nothing harder than land. My basement apartment doesn’t come with a new land, right? If I buy a garden suite doesn’t come with any land. Right? I buy a house that comes with land. So everything that seems fun, feels fundamentally fundamentally correct about owning a property in and around Atlanta. And then this meeting was meeting with the property managers how they went out when I’m telling them my story. Properties are 600 grand. It’s like, What world do you live in? Oh, yeah, what world you live in? Because, you know, we as Canadians joked How ignorant Americans are to us. I’m just equally ignorant to them. So, so remember to hear about like us having like million dollar duplexes or triplexes. And then for for us to tell them like eight months in the landlord tenant board, to for non payment of rent. Yeah, just to get a hearing. Like this is all foreign to them. The price points, the amount of capital at the shell out the tenant rights. We have rent control, which they don’t have. Right, right. Every law this was foreign to them. Yeah. So to them, this is like the worst this this investment makes no sense. Right? My investments make no sense. Yeah, right. What I currently hold. So then what do you what do you say to like other Canadians and like the, oftentimes when we speak to Canadians, there’s so many looming questions in so many gray spaces, they’re like, Well, I can’t physically go and touch and see my property or you know, what are the tax implications? So what do you say firstly, to, you know, the proximity question, not being able to kind of touch feel, see, put eyes on their property. Well, that was pointed my window Atlanta, I need to get a taste to feel like I get to see some properties. Thanks to you setting up those meetings with the property manager showed us around different properties. That was hilarious. That was a really, really nice properties first. That’s classic realtor, show them the nice properties first. And then like, let us like we always, we were constantly asked like, you’ll want to go see what a bad property to you is or a bad day. Yeah. And that’s like, we walked in the neighborhood like this isn’t a bad neighborhood. Walk here freely. So sorry. Like 3000 square foot brand new house has never been lived in three to 90 grand. Humongous lot. Yeah. Right. Like, these 3000 square foot brand new and like, you know, stone countertops and stainless steel. Yeah. That one was a bit of much though. They, but they’re so cheap. Yeah. And they it was funny, because we’re telling the Americans this would be 1.5. Back home. Yeah. If we listed for this price, we’d have 30 offers in like two hours. Pristine house. That was a bit overkill. But yeah, I hear you. But so yeah, proximity, I think to his throne. I’ve seen people proximity invest. And I’ve studied, I’ve, like I live in breathe real estate. So anytime there’s been like a massive failure in something, I study it. Because that’s where we did business school, we learned how to be a case study. Right? Right. So I kind of like each massive failure to me as a case study what went wrong where they do. So for example, in the case of like, epic Alliance, really not familiar with him, but that was a that was, I think that was like over 200 properties and more largely in Saskatoon. Right? So what went wrong? So small town? And then just a simple Google Streetview? Does one stop walking around the virtually walking around the neighborhood? You see, like cars were not nice, like windows were boarded up? This is not a good area. Right. Right. But that was enough for me to say this is not good. And what else did they do wrong? They used the same appraiser. The vendor chose they chose the same appraiser to appraise all the houses, right, a bank would never let you do that. Right has to be third party, you can’t be can’t be influenced. Gotcha, right. You need a third party your own inspection. So I have clients that do that allow us to write offers. And then they come for the home inspection. So I’m down with that. Right. And then I’ve been around long enough that I can run my own comparables, both for price of property and rents. Right. I’ve already been back check fact checking you guys on your, on your prices and rents. Right. And so I can do it. I would know I’ve had enough comfort now that I would do. I wouldn’t have to see the property. cheering, maybe we fly down, maybe fly down before the closing, at least for the first or second property. But that’d be sufficient. Because again, I look at I’ve been around a long time, you know, we’ve done over 350 transactions, I forget what the number is 400 million worth of real estate we’ve transacted in just in book value. So I have a lot of experience. So when I talk to clients, like I always tell them, your number one risk is the tenant in Ontario, number one risk of the tenant. And when I look at property, when I go see a property, the first thing I do is I don’t do what Realtors DO I DO what investors do. I go straight to the basement, because that’s where all the problems are. Right? You can see the if the electrical is any good. You see the foundation is broken or water damage. Right. And then I literally have had, how many? I might have had two houses with frozen pipes personally. And that’s the massive damage. Yeah. So now but we’re buying in sunbelt states, right? So temperatures don’t get below zero. So frozen pipes is removed as a risk. There’s no basements in sunbelt states. So I’ve removed that risk. Bad 10 Some teen toll from from the property manager. So I’ve spoken to the property manager myself. They’re gone in 3060 days. At worse. Yep. Right. So I’ve removed some risks already. Right, and there’s no rent control. So I removed another risk. I removed inflation risk. Right now I just benefit from inflation by holding on asset. So then I can do it. Yeah, I don’t think everyone can, which is why people still buy local, which I appreciate. Right. But everything you’ll get more comfortable as things go. As literally telling you a hands on investor yesterday. You know, he’s saying how I don’t feel comfortable right away, like buying a property right. Like, which is funny because he was just complaining to me how he had a sewer backup and need to rip up the floors himself. And take off the trim take off doors, right? He’s just telling me like, how much a headache you want. He doesn’t want that headache anymore. Like, you know, there is an answer. Yeah, yeah. And then also appreciate that that problem was in the basement of a duplex. Right. And that duplex is built in 1950s. So the drainage systems are failing. Our sewer systems are clay. So they’re failing they need to be replaced. First, and also you’ve doubled the occupancy of a property. So that’s another risk. Yeah. It’s also 90 for this property versus, like the Atlanta property I keep talking about as an example, that was built in 1988. And again, it has no basement. So it’s way less risk. Yeah. So again, holistically, everything just seems easier, right? So I understand that people think it’s a risk not to be able to see and touch it and do the drive to it. But then you will stack it up against all the other risks, all the things that you’ve de risked?

I think it makes sense. Yeah. And then like, um, so the proximity part, like, you know, having a good property manager, and then a great asset manager, like how how would you film your interactions that your minimal interactions with one of our preferred property management partners is, like, do you see a difference in sort of approach strategy protocol, the methodologies that they use with any sort of equivalent here. But first off is like, because when I talk to you, it’s hilarious, because your context of here is we’re very different contexts, like, you know, what your How long have you been property in the States? Over 10? years? Okay, so you’ve been over 10 year investor currently hold 20 properties in the States. All right. You know, I’ve been a landlord, almost 20 years. So our contexts are very different, right. And it’s hilarious when we talk to each other because we’re everyone’s talking different languages. Because I remember when I told you how property managers will still charge you rent if no rents coming in. I still don’t get that I still okay. That’s interesting. Okay. That’s that was that was that was a big tidbit for me, right? That’s a big tidbit. Yeah. Because in the States, that’s the market as in default, if there’s no rent coming in, the property manager is not charging you fees. Now they’re losing money. They’re feeling the same pain you are, right. So they’re intrinsically motivated to know that’s extra intrinsically, or extrinsically motivated, financially motivated to keep your place rented? Right. And also, they’re doing your renovations so that they’re motivated and financially motivated to get their renovation done, get a tentative, right so that they can collect PMPs, no monthly fees, which is what they want. Yeah. Versus here in Ontario, if a pm didn’t collect fees, when you weren’t rented, they go bankrupt, right? And many have, right, they can’t assume all the financial risks, the same risks that we assume as landlords. PMS here often, like, do the project management component of any sort of rentals and contractions. Yes and no. Like, the challenge I’ve seen with many property managers here is that generally they’re small. They’re mom and pop shops. And I’ve seen in, and many of them are new entrants as well, right? Like they’re. So the challenge I’ve always seen is people who get into construction who’ve never been in construction, like say, you went from working from a corporate job, to now you’re now in construction. Like the communication between people in a corporate environment is very different than tradespeople. Right. It couldn’t be more different, right? Because I remember back when I was in corporate, you read an email. If you don’t get the response. You see see their boss. Right. And you see your boss. Yeah. And then things just start moving better. And then if things are really bad, see, see the next person’s boss. Yeah. Right. And then you always get action. You don’t get that with tradespeople. Yeah, yeah. Yeah. And then and then the situation is worse, right? Like, like the labor issues, worsening as in people retiring, there’s, it’s hard to find good trades, right? So it’s a tough, tough business. So you’re combining people that aren’t used to working in construction, working with trades, and the labor pool of trades is just thinning, right? So it’s not easy. So and what I’m trying to get to is that I’ve seen PMS fail quite poorly at delivering renovation renovations, but also consider the fact that our renovations are much larger in scale. Right, right. Because we’re usually doing we’re often doing a full cosmetic on the upstairs above grade. And often we’re doing we’re finishing a basement, the basement. So that can be putting a bathroom. So that means putting in new plumbing, you have to put a new Ruffins if we’re putting the kitchen more Ruffins. Right. So again, we’re talking about basement apartments under 60,000. Versus your major renovations. 50,000. American, right. We’re talking about our projects are 12 months, versus you’re talking about two months, right? There’s a very different capital outlay and risk comparison, right? Right. Because people need to never forget your biggest risk as a landlord is they can see like negative cash flow, right? So if I’m only holding a property two months for renovation, but I’m probably getting good equity left, then I can live with that. Right versus a year. Yeah, if things go smoothly, the Assuming that you don’t have assuming the contractor doesn’t walk away, which does happen, right? Or they have staffing issues or it goes off premises, they all go over budget or overtime over budget. So very different risk profiles. Interesting. Okay. Now sort of switching gears the next biggest sort of question and big black box we get a lot from Canadians or that have are considering going south is the taxes, right? Like, yeah, it’s complicated here. It’s high here. And now you’ve got state and federal tax down south, how do you how do you kind of walk them off the ledge, or at least guide them through a dark forest? i This is a regular piece of advice I give on the show, one of the best wealth hacks in the world is to marry your accountant. Right. So I did that. But that was I love ya love for what? I make holistic decisions. So efficient, efficient. So unfortunately, because I married my accountant, my mind has a shut off anything when anytime accounting comes up. And, again, I have the team that can handle it. I’m not worried about it. Like the absolute worst case, is that my taxes no different. Right? Obviously, there’s more fees. But that’s okay. Because I plan I plan on building a 1020 property portfolio that will positive cash flow and pay for my fees. Right. Yeah. So I think that’s the biggest thing that you’ll need to consider is that you need to know if you’re buying for investment, like I am either on a couple properties to make this make sense. Yeah. Right. And then my corporation, that’s because this is I think it’s important, like my corporation, like I already have wills written for my corporations. So one of my corporations will own the US entity. So that my my my estate planning is still consistent. Right. So I’m not too worried about it again, the worst case is I I pay the same amount of taxes? Nobody would. Right, right. So I think people need to consider that. Worst case, you’re paying the same amount of tax. Right? It just may be split between two different governments. Right? Right. Yeah. So like, you know, your once your liquid, what is your sort of deployment strategy? What kind of house you’re going to look for, or kind of regions? Are you gonna look forward? Do you have a preference or strategy in mind, read sunbelt states, again, based on my due diligence of yourself, and Dimitri, like Dimitri is a wizard. Right? So I’m largely gonna defer. I’m at this point, now, I’m ready to defer. Right. So like my criteria is largely I’m good for renovation. I like equity up lifts. And also, my plan is to diversify. I want some higher cash flow properties, and I want some higher equity plays. Right, right. Like, I’ve already planned a trip to Austin, Texas, for example, for my research, Dallas and Austin, for example, are probably two of the best places for investment in the world. Right. So I probably want a play one, one each. Yep. But they’ll have different return profiles, which I understand I’m sure. I’ve plenty entropy Memphis. Yeah, we gotta get down there. Because someone tells me seven caps grow on trees. Yeah. We’ve got to get them there. But we can find them there for sure. And actually, I think that that deserves spending some time on the Memphis refresher where I’m allowed to share. I just had too much good too many people recommend Memphis to me. Interesting. All right. And then like you’ve shared that it’s a good really, really good casual play. Yeah. But because we’re talking about a price point under 200,000. American, I can easily afford a property there and afford properties elsewhere. Right. So I play one one around Atlanta. I don’t know. I feel like my Tandy shirt store. Yeah, I probably want one in Phoenix. Yeah. Okay, all right. Taiwan, semiconductors building a $40 billion microchip processing plant in Phoenix, Arizona. And I can already envision, yeah, taking some trips to the states paid from our properties. What’s your sort of counter argument to investing in neighborhoods that are kind of potentially bordering, you know, dangerous neighborhoods or, you know, crime ridden neighborhoods, but are showing early signs of good economic fundamentals? Like, that’s gotta be a common question. Right? I invest in Hamilton bands. And this is like, yeah, Hamilton, like 15 years ago, right? Oh, yeah. Looking at it now. I’ve invested we’ve, I’ve helped clients invest in areas where these steps streetwalkers, right, right. So, and also those hundreds were like 100 years old, right? Like, we’re not talking about that here now. And also my plan is to do

permits almost never see my properties. So as long as, as long as there’s several property managers who are willing to work with it, and happy to work with it, I’ll do it. Right. Because for example, in Hamilton, I’ll speak to my property managers, will you manage this? If they say no, it’s no. Yeah. Right. It’s not just know for me, like, I need like, three property managers. Because I need that level of redundancy. Right. All right. So if they tell me no, that’s a red flag, you probably shouldn’t have a property. Yeah, I think that’s a pretty good proxy, right? Like if there’s a number of property management companies in an area saying willing to say yes, to manage a property, because they’re often local. They know their local area. There. They are locals. So that’s, yeah, that’s often a good proxy. So we’re saying we’ve got redundancy, then that should show some signals that also that there’s a lot of investment dollars. Like one of my property managers in Hamilton is an ex BEAT COP. Wow. Okay. So he knows buildings very well. Yeah. Got a friend with a challenging building 30 unit on Main on the main street, one of the main streets in Hampton, it’s a trying to refer you some business? Yeah, he’s like, I’ve been through that many building many times. I don’t want it. Oh, really? That’s like absolute red flag. Yeah, that is this is level of diligence. I do. Yeah. Right. Like, versus my friend who bought the building probably didn’t, right. Yeah, it’s always good to do that. Like as much as we thrive to be a technology company, we still have boots on the ground that we got checked ourselves with. So we get our local PML agent to kind of say, Oh, you’re not up for lunch? Yeah, this is a good area. I think that’s this is great. We’ve done so many clients doing leasing here and selling investment properties. So yeah, that’s a good area. Yeah. So yeah, to us highlighting the PMS or proxies is a good is a good way of looking at it. Because I think people generally, people generally understand, based on we’ve already removed so many risks. Now, now to me that I’ve drilled you on this, after all those other risks that we’ve that we’ve talked, we’ve already girIs to now, the next biggest risk is the property manager. Right? Right. What if they fail? Again, I fired these five, maybe six now. All right. So what what, these guys are big. Yeah, they’re big. So we, you know, that’s the beauty of kind of the way our model works is we sign master policy, so they just service share, and we’re one line, but we bring a portfolio. So they don’t want to screw up the portfolios, we pull the whole portfolio from them and bring it to another big pm company. So there, that’s the threat and sort of surface level that we get as an institution. And then we kind of dissect that all into individual retail investors on our back end. So and all of our contracts are non sticky. So we can do 3060 Day termination notice in the pm and bring in a redundant or a backup. So that’s in every area, we’ve got at least two or three large players ready to go. And large players like they have hundreds of doors in the area A Yeah, if not 1000s of across the nation, probably like 20 to 40 50,000 plus, that are large institutions. Right. Yeah. Which is weird for Canadian because they don’t exist for us. Unless it’s commercial, right? Like, oh, yeah, so actually talking to investors, like, that’s telling, like, we’re, it’s funny, because he’s a he’s a builder. He’s building apartment buildings for rent, which is wonderful. And we’re talking about institutional property manager. And I said, you know, there’s none here unless it’s they only exist to manage their own portfolios. And all I got one is this, like, okay, Googling? Oh, that’s fantastic. Because, oh, you need to have 100 doors, but also they won’t work with me like, Okay. Mom and Pop don’t have 100 doors. Yeah. So what, what I want us to appreciate is, is that large, scalable property managers exist in the States? Yeah. It’s beyond our context. We’ve never seen them before. Yeah. All right. And then then bring it down to like the micro level, like meeting Tim, who is showing us around? Yeah. Tim is the boots on the ground property manager, your traditional property manager that we know of, and as Canadians like, he is well dressed, well groomed. He’s walked around with an iPad, as like he had everything on his fingertips. Yeah. Via the iPad. What are the rents? You’ve just wiped, touched on bugs on his phone on his iPad? And it was this what was the renovation? Yes. It was really, it was this was quoted this and then we ended up this and we’re in like, like we’re doing the floor touching up the paint. Like five $6,000. It’ll be done two weeks. Yeah. Oh, great. And then like, That was hilarious. Was but we the stone guy was late. They didn’t have they didn’t have the stone for the countertop for the bathroom. So we took the five extra days. Yeah. Okay. And by the Senate, the Senate disappointed Yeah. Because, you know, they haven’t been we haven’t pulled a metric, right like we want they have to be able to deploy their teams To do so much certain amount of dollars a day, and then that backlogs, everything right. And it’s like medical office where one person’s late and it has a ripple effect. But yeah, he’s in charge of all the construction team. So we those are hiccups. And he’s got to redeploy the team to a different project might work. Yeah. Yeah, that’s all custom software that they’re doing all these logistical planning. It’s it’s quite the operation, versus almost all my projects, and you need at home need a bylaw inspector. Right. So you’re, they always find something interesting, either live by their schedule, and they always, they seem to like to make our lives difficult. Right, I had literally had a home bylaw inspector. So first off, I appreciate that they didn’t have a third party, evaluate Maris stuff. But then when they throw in stuff that you don’t need, like, for example, you need a you need people on the apartment door, like we’re in the building code says I need that. I just think you need it. I think you should have it. He’s like, he wanted like this hot water from a hot water tank. A hot water regulator. So it doesn’t go over certain temperatures like we’re in the building codes exist? Oh, I think just think you should have it. Modern code has it? But yeah, I don’t want you to have it too. Basically, they didn’t really know the codes. Right. But they’re just being a pain mass. Right. And then when they’re biased, it’s even worse, like, oh, no, like they live in the area and like this area doesn’t mean more rentals, and then just make your life. Oh, gosh, right. So this is what I think investors need to appreciate is that when you have complicated renovations that require inspect city inspections, there’s more risk, right? I mean, more delays, more delays me more costs, right? If the real Pricks than this, taking one more, click Continue once more. Yikes. Right versus we’re talking like, you’re like if your shares renovation your strategies. All cosmetic. Yeah, I guess so. Yeah. What do we have to do to get to the highest rents? Essentially, is the math basic math. Yeah. It’s all cosmetic. Maybe you need an electrical permit? Yeah. But those are the easiest permits. You don’t have to go through the city for them. That’s my experience. Yeah. So we we try not to do some anything like massively invasive. Like, ideally, the scenario is that it’s still livable prior to our renovation. So that’s, and if it’s not, then we’ve kind of got to go a special financing route. But that’s for another day. And then the funny thing about the show is I’ve had, you know, I don’t even know what episode we’re on. And we’re playing around with 350. So I’ve had many investors on the show. And but I’ve noticed a trend, especially for Ontario investors is, if they’ve been around for a while, they may venture off into something really aggressive, like development or something, a whole bunch of them regressed to something much simpler. Like I literally have one friend who wants to only buy pre construction and not rent it out. It’d be heavy cash, but he doesn’t want to tenants. Okay, his plan will be like the exit like a year or two afterwards, because he’ll have a unique property. Because none of the property none of that no other unit in the building has never been lived in. Right. But point is he does not want the risk or the grief and long term tenant dies. It’s that’s that’s an extreme case. But also, I know plenty of people who’ve done who were like my path and very aggressive integrative patients. And now we’re simplifying like, my next property will be single family home. Right. So I’m kind of at that point, right is next investment with a single family home. Right, right. And actually, this is one of the questions that came up. I posed the question I asked, I posted on my Instagram, if you want to ask me questions, ask me questions. So it’s actually good question for yourself as well. Why not multifamily? Why not apartment buildings. Why single family home? Yeah. I mean, that’s the, you know, long ongoing, ongoing debate between single family and multifamily. You know, for one multifamily is at a much higher price point to get into. We’re talking like, let’s go say four, four units onward. It’s a higher price point to get into and often requires different financing strategies. I’m not a guru in sort of the retail investment of multifamily. But I know there’s a lot of strategies with jayvees and syndicating deals and having to kind of raise your financing to get into the house. So you know, we leave single families that easier entry point, and it’s, it’s a safer one, because now you can just kind of save for your investments and get into it and then but yes, but a multifamily on a per unit basis might be cheaper. But you don’t get the diversification you could get on a single family. So as you kind of deploy beyond more than one region, so that one multifamily still, although you have multiple doors and you’re hedging against other tenants, you’re still beholden to those local micro economic

issues, whether that’s, you know, the job growth population growth or lack thereof, any bylaws that might be passed, you know, like, is a multifamily within Ontario better than, you know, three single families across the country of Canada? You know, I don’t, I would say that you don’t really get the same diversification, you would in that single in the multifamily in Ontario that you would if you said I want to go Alberta, East Coast, whatever it might be. So we do think that there’s a way more of a hedge. And as we kind of build out the single family rental market, the margins are actually turning out to be better. With a lot of these new property management companies coming up, these institutional players that we’re helping unlock is turning out to be better. And Dimitri is probably the best person to talk about this. But their property management fees structure is a bit different. And then this is talking to us now. They don’t their cap rates and pm fees are a bit separated, the PMs fees are responsible for a little different scope, and you still have to pay additional fees. Like I think you have to pay a salary at the pay, marketing and so forth and so on. So that really chews at your noi. So over time, your SFR NOI is a lot better single family rental so far. Yes. Sorry. Single Family rentals. better over time. So let’s that’s a wonderful way to explain it. Yeah. Because I think we’re all in it for all i Yeah. So better than I usually want to start my that’s where I start my investigation. Yeah. Now now for myself. I’ve been around a long time. I have a lot of friends who do apartment buildings who are really successful doing so. It’s a lot of work to be good at it. Back to my friend who bought the apartment building that my property management will manage. He was buying retail, he was buying off MLS off realtor.ca. Right. Because he wasn’t in the community. He didn’t he wasn’t playing the long game. Right? He just raised some money. bought off realtor.ca. So he was overpaying? Yeah. Right? And also, this was a deal that was picked over by everybody as in like nobody else took it. Right? Because that’s the reality of apartment buildings, in my experience, is that the realtor, the listing agent for the prop firm, sorry, first of all, the owner of the building has likely shopped it to all their friends. And then if that doesn’t work, now, they bring it to a realtor and the realtor has shopped it to their other private clients. Because they wanted to London. Yeah, pocket deal. Right? That fails. Now it goes now it gets public listed. Right? Right. So all these people already said no to the deal. And now Now retail investor thinks you can make a deal. You can make a run out of this. Right? Right. You’re already you’re you’re already you’re paying more than anyone else’s was willing to pay. So already your risk is higher. Yeah. And on a building that when nobody else wanted, so there’s something wrong with it. Yeah. Versus like my friends who are successful doing this, you know, they’re there. They’re at the golf course, that the high end golf course is there at the community meetings for that that are meant for those the like the Hamilton disc department sociation, for example, old boys club, right there at the those dinners at those dinner tables. Right long game? Right. That’s the path to being? From what I observed. That’s the path to being assistant, departmental investor. Right. I don’t have that kind of time. Yeah, yeah. Right. And then even still, like you’re still retail investor, do you still need to build it your team? Realtors, engineers, property managers. And if you screw it up, you are ruined. Right, right. So like, there’s literally a story in the front page of health and spectator. Gentlemen. It’s public information. His name is Dylan Souter. Like he had a building with a pipe froze. And flooded part of that private property is now 90%. vacant. Right? So the pipe freeze is no fault. I don’t know. Yeah. These properties are old. Yeah, well, these buildings are 100 years old. Right? So how do you recover your 90%? vacant? Right? Maybe insurance pays for it, but again, like to play massive deductible. Anyway, the point is that I’m very risk averse. I’ve always invested in small residential, because it’s very, it’s a very liquid piece of real estate. Right. Right. Because of a single family home that will sell faster than an apartment building. Yeah, I to reduce risk, you want to liquid asset. So that’s why I’ve stuck with this path. And also, it takes it to me, it’s just so much time and effort to build a solid team. Yeah, right. I’m just so anal. I have Asian parents. That whole philosophy that says there’s always someone better. So when you have that philosophy, like you’re always trying to find a better realtor, always a better property manager. Like, that’s exhausting. Yeah, right. No different than being a child of an Asian parent. Yeah, so So getting started, you know, like a lot of, again, the Canadian. I’m gonna just hit you with all the Canadian hurdles? Sure. You know, there’s the tax piece which we covered the proximity piece we covered. Now, what do you say about the forex and the exchange rate with Canadians? You know, with Canadian dollar US dollar? How do you address that? Like, well, I’m buying this house at this price, but with this exchange rate, how do I, how do I dress that is now problem tomorrow problem? How do you how do you look at that? The way I look at it is, I find the first challenges that people need to understand study more of what the US economy is like. So some high level statistics you and I were discussing for before we’re recording, Canadian household debt is about a third larger than Americans household debt. Our productivity, a Canadian, is only 70% as productive as, as an American. Right? The Americans are investing trillions into bringing manufacturing back to the States. So the way I see it from a macro level is that we’re gonna be buying more and more products directly from the Americans, the value added products. So if you’re for all buy, if the whole world, not just us Canadians are buying more American products, that means their currency is gonna get more expensive. Yeah. So to meet today, so that means today, I’m, I should anticipate the currencies the US dollar should appreciate over time against the Canadian dollar. And if anyone who looks back 10 years, the American dollar is kicking the crap out of almost every currency. Yeah. Right. Like Japanese yen, Euro, Chinese Wan, like what other currencies won’t people like? British pound. So that’s the trend already. And again, we’re gonna be buying more American going forward. So more, Tesla’s are Tesla’s Yeah. Right? And there’s still, there’s still the country, the world currency, they’re still way ahead of everybody else. And again, I’m essentially going to be dollar cost averaging when I’m buying houses. So I’m not converting everything now. Right. But no one can predict anything. So dollar cost averaging has always seemed to be wildly advised. advisable to do by over time. Yeah. What’s your perspective on timing? You know, like, everyone’s like holiday interest, high interest rate environment, where’s the economy going? What do you say to that? I guess, both sides of the border? Does it change for you? Now that you are pretty well versed on the US side? Is it the same narrative that or same response you’d give to someone locally versus the US? Like, say they had two deals that they could both pencil? Today? They can pencil Canadian deal? I want to see it? Maybe maybe somehow creatively, if compensable in year one, I want to see it. Yeah, I want to see it because I was tripping a really close friend of mine. So I’m about to turn him has a four Plex in Hamilton and go What’s the cap? It’s 8.2. I mean, that’s amazing. What do you got for vacancy? He said 2%. Now for now, for I personally when I when I see vacancy, I lump in bad debt. Okay, right. Or non payment of rent? Okay. He’s a 2% a 2%. A. And a 10. Doesn’t pay you? Yes. Yeah. No, probably the pay like 10 25,000. Believe, right. So that number that not that potential expenses in the pro forma, right. And then the next question is, what is look like 10 years from now? Because we have rent control. So my challenge is, can anyone really pencil a deal here? Right? They may pencil it for in the context of an Ontario deal. But like literally, I was at a conference where someone was pitching in Florida properties. And when I rented one of my friends with like, he’s got like, his fund has like 1215 apartment buildings. I go, how’d you like those numbers? On a Florida property? Right? Because they’re like five caps. Right? You can’t find out Park building five cap you get when you buy it. And and I know what they do. It’s like a 510 year strategic whatever they call it, to get that property to a seven cap. Right. Versus I can immediately I can be in a five, seven cap within a few months in single family home estates in an area with strong fundamentals. Yeah, arguably better than better fundamentals than most stuff here in Canada. Right. Right. Especially in terms of job growth. You can’t even it’s not incomparable. Right because those drop ghost stories, that property for the same job ghost story, it has to be in either Woodstock. Woodstock. Not Woodstock. Woodstock,

let’s say Windsor Windsor for sure because they’re getting an Eevee battery plant. Right. So we have so few options here. But it’s even still a single family home in Windsor probably starts at $400,000 Yeah, it’s expensive, right and you still have the duplexes, so another 160,000 So then just again, side by side, it’s it’s pretty easy decision for me. Now your question was around economy. Again, people need to go dig into what the US economy is doing. And it’s phenomenal. Yeah. All right. But again, already I mentioned like the American is more productive than we are. Yeah, by quite a bit. So just if you look at the two economies, it’s because the Americans already had their financial crisis. They already had their massive housing correction. They’ve already learned their lessons. Mortgages, their 30 year fixed. Right, which is hilarious because people don’t really understand that means here. I did reread that, I think a chat TPT it like they’ve signed there. They’ve locked in their rate for 30 years. Yeah. And that’s the norm. I remember I was asking Scott dueling, I’m like, can you get a variable? Yes. I’ll try find one. To try find a lender that will do it. Yeah. Right. versus us. Canadians. We’ve we’ve actually, we’ve taken a lot of risk. Yeah. By doing five year mortgages and variable mortgages. Yeah. And then we may get spanked for it here. Yeah. So again, for economy. Again, I take a long term view. There’s no way that we the Canada, Ontario, BC, any of it, there’s an economic story beat a top 10 town in the States. Yeah. All right. Yeah. Yeah, I often, you know, to kind of add on that, it’s, you know, like, if you look at the average home price in the US, like 2006, we’re talking pre Bubble Pop, right, and then you take it, hold it for 10 years, 2016, that average price almost doubled. Right. So like, and I know, that’s a very macro lens, but it bounces back. And this is a long term hold is not a short term play, you will get your appreciation if you hold at the right time. But in terms of the download, and I’m always of mind where look, this is some of the highest interest rate environments we’ve seen in a very long time. And if a deal pencils today, it will definitely be lucrative in a few years, three 510 years time. So if you can lock it in, just because inventory is still scarce, they’re not producing enough of the rate of rental demand and growth is in the US. So lock it in today, get your 30 year fixed, so we can do the math on the tenure. And also, you know, the resiliency of the rental product is you know, this is where it plays strong in the down market. You know, in a down market rental demand picks up everyone needs to place to live. So at least we’re signing long term leases, 1224 months, you can ride that cash flow, if you need to, right, raise it, you can raise it, and then in a good market, then the house price just goes up, you know, so you have that resiliency and that liquidity options. So yeah, I have the mind worth like, yeah, if you real estate is your play, and you want to get in, you can’t time the bottom. And if you do time, the bottom and everyone else is coming in at the same like, you know, institutions have war chests, they’re ready to come in. But if you miss that down the bottom and interest rates start dipping and interest starts coming back in, you’re gonna miss out, you know, you’re gonna miss your opportunity to get some good A B C Class product. And you’re gonna have to pay a premium on it. Yeah, I don’t like doing that. Yeah, I like buying things on sale. Yeah. So it’s like, you know, it’s, it’s funny because we look at these performers. And we will present them it’s a year one two kind of looks a little flat. But then it gets positive. Yeah, it’s positive. And then in 10 years, it gets really positive. Right. So it’s positive and an eight, nine interest rate environment. Yeah. And then, you know, we’ll drop in and refinancing and, you know, accelerate that cash flow and expand your portfolio. So, but yeah, it’s, um, it’s often a big question, you know, for Canadians. I feel like the Canadians are way more conservative than a lot of Americans, which is why we always say that this single family asset in the US is actually a very Canadian investment. Yeah. So where Canadians are funny, though, because I, I’ve always hesitant to say it, because I fear what the response is always say I buy in red states. Yeah. Are you? Like, you know what? Like, we even though we’re conservative, technically, in Ontario, like, on American spectrum is not conservative, right? My point is, like, do you really, if you’re an entrepreneur, you’re a real estate investor. Do you really want me investing somewhere where there’s rent control? Right, right. So I don’t care about political spectrum. This is or at least our investment decisions. Yep. All right. And then back to the economics point, like my theory is that even Bank of Canada is saying, as soon as they cut rates, you’re gonna see housing prices go up. So they’ll be true here in Canada. They’ll be true in the States. Yep. Barbara Corcoran has been saying it as well. The Fed just paused raising rates for two consecutive sessions now. Yeah, the stock markets rallying and the bond markets tanking. Yeah. So again, no one knows for sure. but actually think last week may have been the bottom of the market. The interesting, like the five year fixed rates in Canada are coming down. So they’re doing they’re, they’re gonna stimulate the real estate economy. Sorry, the real estate market. My point is, is that interest rates are high now. It’s a buyers market many markets, I can lock in my price now or the next six months and also locked in my rate, my interest rate, but I can renegotiate my rate in a few years, when they bought them out. I can’t really negotiate my purchase price, right? Which am I which my estimation will be higher? So that’s how I operate. Yeah, buy low, sell high. Yeah. All right. So what do you tell somebody who’s like, I’m ready to kind of deploy in us or at least entertain the US? Is there? Like, how would you have done it? If prior to us meeting like how would you have gone? Oh, god, it’s so painful. Ask for a referral. Find out find out who’s a final who’s bought I I’m a little bit different cuz I have a large network.

So I asked her like for referrals. What I find challenging those many, many people’s biases, Florida, right? My own due diligence, nothing against Florida. This is my own due diligence. I’ve read too many. I have friends who got whacked in Cape Coral and Fort Myers. So another bad calling properties. It’s really sad. And unfortunately, people are saying like, hurricanes never come here. Famous last words, right? It’s like it’s worse things always happen when you when you say stuff like that. And then yeah, then they got trashed by hurricanes. Right. So that to me, that’s too much risk for my for my profile, and also what I’ve read up on insurance, it’s just not a fan of whatever add up. How insurance rates are going up. So then, and then what I find is the other bias, though, is that people are buying cross border. So they’re going to Columbus going to Detroit. Right? You’re choosing based on geography close to you. Yeah, it’s not the it’s not necessarily the right thing to do. So I’m really I don’t really even have a great answer. Yeah. Yeah, what I would do, it’s hard. Yeah. I always find that the common path is what happened to know an agent in this state that does rentals and right, there’s always somebody who specialized in their specific region. And you can get diversification, again, within same state. But I always try to convince them like, Look, you need to look at the country as a whole. It’s a massive country. It’s not just like one agent knows the whole country, they specialize in their specific region, but why not weigh the regions against each other. And even again, within Atlanta, or even Georgia, there are many awesome pockets to invest in. It’s not just Atlanta. So take a sort of grander, broader look at things. Because there’s still risk. Yes, you could drive there. But our goal is, so you don’t have to drive there. I mean, you could fly into one day and take off the next and then set it and forget it. So then when so what’s your I guess your next steps now that you’ve kind of discovered us? What how would you direct your clients and your network? If they’re saying, Hey, I’m ready to go. I’ve been telling them to go to go to our landing page. They’ve w.io and dot share sfr.com So they can see what properties are doing. Like you can see past deals. And all the numbers are there. Yeah, as a friend of mine, a friend of mine who’s already met with you and Dimitri, he’s like, I like the pro forma, because they have all the line items. Yeah, they don’t leave things out that other people leave out. Yeah, he’s an engineer. So he likes numbers. So yeah, all the numbers are there you can play with the downpayment, what the size downpayment what the interest rates are so for those who need to play the interest rates rates are like over eight Yeah, so that’s that’s why my plan is to do like 40 50% down right? Yeah. With cash not debt bearing money. So that’d be first thing to do. And just to book a call with either myself or yourself and they can do that from from that site for if they want book a call with me, they know how to reach me. And then just like go gangbusters on researching real estate and us Yeah, right. I’ve done a lot at CBT. You know, I literally just like these are the economic fundamentals and looking for give me give me 10 towns. Yeah. And it’s the same names keep coming up. North Carolina, Raleigh, North Carolina, Denver, Colorado, Atlanta, Georgia, Texas, Dallas, Texas. Austin, Austin, Texas. Right now the markets come up as well have been a night the night like gold digger. I go deeper like Houston came up for example, then I’m gonna dug further like, they have like, doubled the flood risk doubled. Their insurance is double the national average. Like remove that. Or like, oh, this this area gets hurricane tornadoes or move that. Alright. So did you get a lot of questions from the Tonys team? Do we address most of them? Hopefully. Yeah. Hopefully, but yeah, there’s always tons of questions. I saw voice questions, but I would just share so far.com answer your questions. Yeah. Oh, we hosted a workshop. Yeah, that we sold way more than we ever thought that was amazing. It was fun. And a lot of great people a lot of horror stories. It pains me when I hear that. So you’re doing them a service or when you’re here, like the real estate, Robin Hood. You know, it’s been a lot of fun. Just seeing people’s eyes open. Because that’s how I felt that the joke I’ve been sharing with you is like I felt I feel like I’ve been in the matrix. Right? This is the best that we can do. Because we can’t define anything outside of outside of Canada. So with make the best of what we the situation, was the best thing we can do. Yeah, buy a house. Buy a bungalow from 1950s. Sweet, the basement. If you have the money, put on a garden suite for $300,000 that will make a cash flow. Yeah, right now I’m into a million dollar property that won’t even appraised properly. Right. Because garden suites don’t appraise. Right? That’s, that’s a ton. Yeah, that’s a lot. There’s a lot. Not now. Like, man, I see these opportunities in the US and like, there’s so much easier. No rent control. No. LTB the numbers are better. And a scalable? Yeah. Great financial products. Yeah, the financing is easier. Yeah. So the the only downside is it’s further away. Yeah. All right, which again, isn’t the worst thing. Yeah. Typically in hot areas. So you know, take a trip. You know, try the neighborhood if you’d like a friend of mine was getting married in just outside Calgary in February. And like, dude, like, you know, I don’t want to buy anything Alberta. Can we just meet in Vegas? Because no one has a planned trip to Vegas? Because I can look at properties in Vegas. I don’t have any interest in looking at properties in Alberta. Well, what do you say to those? You know? Because Alberta is a you know, it’s a pretty landlord friendly state. I mean, province, so could American. But yeah, why not? Why not go there? Because aren’t the price points aligned with a lot of the US real estate? Oh, calories. Average Price is 600,000. Oh, wow. Okay, I’m out of touch. You’re out of touch, bro. Wow. You’re Hi level answer. My Alberta boyfriend’s always told me Alberta is the Texas of Canada. I say that to Americans? Yeah. Like, why don’t we just go to Texas? Yeah. And I can get it for cheaper and better numbers. And then a little more detail side like Calgary is on is a complete seller’s market. Now. It’s on our Bull Run. It probably it’ll probably be around to like $800,000 house. Oh, yeah. Which is fine. Yeah. I can’t wait to go to the buyers market. Yeah, and get something for value. Right. And again, based on my footnotes, one of my my study of the US economy. Here’s another here’s another way. I mentioned a question with a question. If you left North American as 100 people, can I pay you in Canadian dollars or US dollars? We’re going to take right US dollars? Would you find one person who say I’ll take Canadian dollars over US dollars? Right? What do you mean find a Canadian, the Olympic team has asked him at a very good number of associates like American dollars. Yeah. So the answer right there tells you you need to be earning something in American dollars. Yeah. Right. And then on the on the on the on the bigger on the bigger, longer term. Planning is, I want options in life. And I want options for my kids. So my plan would be to figure out how to get an E two visa. So that myself my family can live in the States as long as we want. Should my kids ever want the option? Should I ever want the option to live in the States? Right? Should my kids ever want the option to pursue their career, pursue careers in the states and get paid 30 to 100% more for the same job they do in Canada? And their housing would be a third of the cost? Yeah. All right. So I’m just letting people know I’m a hyper overprotective parent. So I think all parents want want to have options for the kids. So I’m no different. Yeah. And so that’s the path investing in Edmonton. Calgary doesn’t get me on that path. Right, right. Yeah. And it’s already snowing in Calgary. So I’m about Canadian, I can’t handle the cold. And that’s another thing that you mentioned before, as well as like demographically the states generally Americans are moving south. Yeah. So that’s why I was playing a road trip to Columbus, Ohio for Exam. Pull. So I’ve shelved that. Because if the demographic trend is that people are moving south for better weather, and no state taxes, then that’s where I want to be. Yeah. Right. I want all I want many things as possible to align in my favor for successful investment. Yeah, right. Yeah, it migrations of more common theme in the US people moving from state to state, not necessarily just staying in their home province and hometown. Yeah, because there’s so much job creation opportunities elsewhere. Yeah. It’s always from time to time. It’s so crazy when I used to live in the States that I would get, when I get phone calls from my friends who are living in the same city as me, I get a million different area codes, because they just didn’t change your phone numbers. So be looking like Wisconsin, pick up phones and go, Hey, are you coming upstairs? Or what? And I’m like, Oh, I didn’t realize you’re from Wisconsin. But yeah, that’s how it’s pretty crazy. Like most people are not from where they’re, they’re living in places where they’re not originally from. So you get, you get a lot of movement to go where the jobs go. Right. And a lot of the moves. So anything we left out? I feel like we pretty much covered a little bit.

Yeah, again, my diligence shows everything. I think the only thing one thing that that the only other risk factor that’s higher in the States is vacancies higher, yes, vacancy is higher. Because Americans can actually build housing. It’s still behind schedule is still slower, but you know, rent, but compared to here, yeah, there’s a stat though. Don’t remember right now, but rent rental demand or growth is gonna still outpace construction. So there’s still that and even with a new build for rent, they’re still leaving out a massive part of the market. I feel like those build friends are very good for people who are just getting priced out of the market. So yeah, there’s still going to be rental demand, still gonna still tick upwards. And stats are showing that, you know, new supply is not coming in fast enough. Maybe not as aggressively as in Toronto, but definitely still a national problem. So another thing, another thing that someone could do for to start out is I just went on realtor.com. I chose an area that I was looking for, I was actually looking for comparables to properties, the sheriff’s done. And started like in just researching rents and prices. Yeah. And then just to get familiarized with yourself with the area, because it’s just so different. Yeah. Like, like housing prices are coming down pretty fast, compared to what I’m used to. Right. So it’s much more of a buyers market, and even strong economic areas. Yeah, it’s just so but again, like you guys have probably accounted for vacancy allowance. Yes. Yeah. Well, by zip code by region, typically dial it up or down, depending on that particular neighborhood, because we look at, like over 300 data points per region we go into per city per zip code, then we take those into consideration of for both repair, maintenance, Age of home vacancy, all that. And the fear of the unknown, you don’t like the analogy, analogy for sure, that I always uses as a client of share, which I which is where I have, I’m gonna be acquiring my properties, as I’m gonna be doing through you guys. Is unlike a Costco member, I get to benefit from from your institutional buying power. Yeah, both insurance rates, your ability to get property, property managers will talk to you with it, whereas they won’t talk to me, right. And I negotiate my rates now, so I get better rates. Yeah. Now, can you do as can you get better investments? If you did everything by yourself? You wanted to be a retail investor? You want to be hardcore? And we are very active? Yes, yeah. Six to nine months, six to nine months. I have a friend who’s coming on the show. Like he’s looking for like a 30% return cash on cash on his us investments, but it’s highly active. He’s buying like pre tax pre tax sales. Yeah. And these are in towns you’ve probably never heard of, and he’s got to find the local team to execute it. Right to renovate it, hire find a realtor, all sorts of things. All doing it remotely for looking for a 30% return. Versus I’m looking for a leveraged 20% return. Yeah. All right. Well, I could sit on my ass and just Yeah, I look forward to meeting him after his first couple. No, no, no, he’s been doing for years. For years. Okay, so here’s a playbook Yeah, here’s a playbook okay. But also like the things that people don’t appreciate is like when people like there’s there’s court now someone there’s someone in my feed now selling doing a tax lien course. So my friend has shared with me like the first three years were terrible, right? Like, that’s beyond my appetite. Yeah. All right. I’m down for like two months vacancy. Two months carrying costs while it’s being renovated. I’m down for that. Right. And you get the equity lift sale. So you’re not buying turnkey, you’re getting older, you’re getting all the bonus parts. And I don’t believe that too much. Yeah. It’s all factored in the pro forma. Yeah. So I’m expecting all these things. It’s great. Anyone else moving out? I don’t think so I find, because we still need to have you back on part two for part two, your show because there’s so many things we didn’t cover, okay. Like, for example, that the, how tech has enabled you to make this business available to mom and pop investors. Because I think people need to understand that is a lot of investment companies. If they want retail investors, they generally want higher net worth. And they’re taking a percentage of the business. Yeah. Right. Which is one thing, which is one thing I like about share is I have direct ownership to the property. I want 100% between me and the bank and my wife. And I can you only charge me a fee? Yeah. I actually gave this presentation to a roomful of entrepreneurs. And real estate investors to understand this as well. Like, if you don’t have to give up equity, like you don’t, you keep the pioneers 100% of the pie to yourself. You do bear all the risks, but also you you keep all the upside. I get to pay a fee for someone else to do all the heavy lifting. To me, that’s a win. Right? I know, some people don’t like it. I just manage it myself. Yeah, go ahead. Yeah, try it. Yeah, I tell people, like we get a lot of clients to like, Oh, you don’t wanna retire? These fees are high. Like, look, we’re still cashflow positive on this site. Like, are you still working? Yes, when you retire in 10 years. So let us 10x Your portfolio and those 10 years. And then when you’re ready to retire, if you want to self manage fire us, but then when you realize you want don’t want to do the work, you can bring it back to us. So, you know, you could do the math on that you can see what kind of savings you get from firing us. But you know, by all means, go for it. But let us build your portfolio in the meantime, guarantee we want to retire you’re probably gonna say just keep going. And I think it’s an important point is the investor owns the asset. At worst case, is because I mean, people always ask me the worst case is worst case. I have fire you guys a higher realtor and sell the property. Yep, that’s my worst case. Right. So it’s the same worst case with any property I’ve ever experienced. Yeah. Except in you know, my poor friends who’ve invested in epic lines in Saskatoon, there’s no market for sale. There’s no market for resale. they overpaid for property. They can’t recover. Yeah. Versus I’m buying based on economic fundamentals. In an area I’d want to invest in strong job growth, growing incomes growing in migration, right. A maybe takes longer to solve in a property and around the Golden Horseshoe. Right. But although everything else is better, yeah. All right. Anything else? That’s it for now. It’s funny because I use I structured this podcast to have guests on because I always thought I have nothing to say. I have nothing of value to contribute. That’s why I always have guests. No, it’s good. I enjoyed it. 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.ca/youtube. To register for 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 guess. And if you’re just starting out, feel free to ask questions in comment below. And I’ll do my 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 at that investor training.ca/youtube Thanks again for watching. See you in the next video.

** Transcript Auto-Generated**

Erwin 0:00
Welcome to the truth about real estate investing show. My name is Robin Seto, today’s guest loves to travel and invest in properties in several countries. He’s originally from our nation’s capital, but he’s put down roots in Costa Rica. But before we get difference, while NTA I’m still buzzing after my recent return from Atlanta, Georgia, in the United States for meetings and taking up properties that are that are under management that front by a very large property management company, how large they currently manage 2000 single family homes across America for their institutional clients who invest in, of course landlord friendly states, so no New York, no California, I’ve been told by insiders that institutions are rebalancing their portfolios away from commercial way from commercial office and retail, even multifamily as cap rates are being squeezed. And appreciate that. If you have a pension or you’re investing in a REIT, there’s a good chance that you also are invested in these properties. Because if they because again, even Canadian REITs are buying down in the States, institutional demand is so big, that the property manager that we’re just that we’re meeting with, they just signed a new investor client, a single investor client, also an institutional investor, with 800, single family rentals to add their already $2,000 properties under, under under management. The this now we’re again, we’re in Atlanta, Georgia, and the pm already has 800 single family properties in and around Atlanta, Georgia. So who better to show us around investment properties at different stages? We visit we visited a bank foreclosure sale, we’ve been visited a host they’ve been renovated post post major fire, a couple of properties that are currently vacant. So they’re in between tenant turnover. So they’re in between tenants. So we saw before them renovated and after innovation. These are no these were major renovations. I think they range from like 6000 to like 19,000. So again, not major renovations. But that’s, that’s that’s what they’re doing between tenant turnover. I honestly was like a kid in the candy store, I was so excited to see properties. And, and I would especially in the properties of the property manager already manages, I’d love to own each of the houses that we saw. Each house, each house had gross rent yield of close to 8%. gross rent yield is the annual rent divided by the cost of the house. For example, one of the houses that we saw, we ran for over $25,000 per year, which is about 21,000 per month, but for the math 25,000 per year, and it was worth about 320,000 located in the suburbs of Atlanta. In Atlanta is greater metropolitan area is about 6.2 million people. That’s that’s actually about the same thing, Toronto, so it’s a little bit smaller than Toronto, but that’s okay. Tim, who is member of the pm team, he’s like their boots on ground, he lives locally. He works locally, other members from the pm company flew in from other parts of the country anyways, so Tim was showing us he was one that was able actually gets access to the properties because he you know, has the keys, or actually not only keys that everything’s using electronic keypads, but anyways, he shared with us how he inspects properties, and he coordinates renovations. When there’s tenant turnover. He shares what the timelines for for for these were generally I think the longest renovation between tenants, it was going to be like two weeks. And that already gone over. But again, it’s under two weeks. isn’t that big a deal. The budgets again, seem reasonable in my experience, no basement suite, none of these properties or no basement suite conversions because none of these properties have basements. They’re all built on a concrete pad. No garden suites needed since single family homes cashflow as is. So because there’s already cash flow, there’s no renovations or Tashlich keys needed. Since there’s no rent control and the landlords honestly have rights. I shared my experiences landed on in Ontario with our new American friends over dinner and drinks. And they stared at me with wide eyes like I was an alien. Needless to say, I’m excited to exit some of my real estate here and add some in Atlanta in Atlanta, Georgia. I’m also planning site visits to Memphis and Texas as I will want properties there as well. Again, it’s just diversification, economic fundamentals are there. If anyone’s interested, I’m happy to share my research. I mean, especially thinking about putting together a report to share all my research. You know, because I’m looking for a gold real estate Goldmine just like everybody else is. If you’re looking to learn more about investing away from long term rentals in Ontario, our next IOM meeting is Wednesday night November 15 7:30pm. Eastern Standard Time, we will have the CEO of shear enter Chem talking about missing in Florida, Texas and Georgia. I’ll share some sample properties as well. And the CEO of Pinnacle wealth brokers who dive in deserve flu who will be Sheeran he’s been both of them on my podcast. So check them out if you haven’t already. The point of the the Ireland meeting is they will expand and go into more detail and get into some numbers about these properties and these deals. So back to back to Darwin of Pinnacle wealth brokers, he’ll be specifically, I was looking for someone to speak on the subject of vacation properties, and short term rentals. So Darren owns over 400 acres across, I think, three or four properties. So he’ll be sharing about how the how the numbers break down on those. For those interested in joining, I have a link in the show notes. And also there’ll be an for you who are on our email newsletter, you’ll receive invites or straight to your inbox. on to this week’s show. We have friend Sal NTA, who has already exited his long term rentals in Ontario A while ago, and now lives in Costa Rica with his wife and teenage kids. Francoise has investments in New Brunswick, Alberta, Michigan, Florida Dominican Republic, Dubai, I think yeah, some of the Eastern Europe as well. Or he’s going there and looking to add some, and he’s also on his way to Panama. It’s like he’s trying to buy up all the spaces, monopoly on the Monopoly board, and he’s not gonna leave any properties for a little while for the rest of us. On this week’s show, he details what he thinks his ideal investment property is in Costa Rica. And also he’s offering a three day real estate investing conference that cherry my wife is speaking at in Costa Rica. So my family and I will be attending in person and that’s less in late January. You can get more information there at WWW dot invest in Pura vida.com. If you’re not familiar, Pura Vida means like Purelife it’s, it is the catchphrase for all Costa Ricans, again, invest in pura vida.com link is shown in the show notes or in your email inbox. If you’re on our newsletter, Francois shares a bunch of his research on where he invests and why and his path to leaving Canadian tax residency. We do pay a lot of taxes here and he’s not wanting to pay anymore. He shares his non negotiables are on wanting to live also I find as a parent myself, I find it interesting to hear about what the French wants kids are doing. They’re teenagers, so they’re in high school. I should know sorry. One is one is out of high school. Anyways, but the point is that they’ve left Ottawa and they’re the kids are with them in Costa Rica, but they still are continuing in their education. I think you’ll find it fascinating what he has to share but that these near the show

Hi, friends follow what’s keeping you busy these days.

Speaker 2 7:34
Right now is that making sure my bananas are ripe and looking at coconuts, things like that. So very different lifestyle. Just enjoying the beach and Pura Vida life right now.

Erwin 7:46
And you’re enjoying this in, in southwestern Ontario. Where do you find bananas around here?

Speaker 2 7:52
Yeah, so not not in Canada? Obviously. It’s in Costa Rica right now. So yeah, I’m actually even trimming my my cacti heads or cactus heads. stuff I’ve never done before.

Erwin 8:09
Okay. Is that naturally forming? Or did so put that there like hedges or cacti?

Speaker 2 8:18
Naturally forming but of course you can plant them and cultivate them, like cedar hedge where you can have huge hedges of cactuses, or cacti. But they grow like crazy. So you have to trim them. Which I didn’t know I thought these things didn’t grow very much.

Erwin 8:36
Yeah, I didn’t know you trim them. Yeah, because they’re not really like, like, they’re not really like branches, like our leaves. I know the needles of the leaves, but stop them.

Speaker 2 8:47
And yeah, it’s very, very messy. Very juicy.

Erwin 8:51
You have to send me a picture. But take your picture on your Instagram.

Speaker 2 8:54
I will for sure. Wait, hang on, you have bananas and coconuts on your property? Not me. No, but I it’s just keeping an eye on the neighbors. They have big plantations. So it’s very nice.

Erwin 9:08
How big? How big is the plantation?

Speaker 2 9:11
Some have a few 100 acres of bananas and different fruit and vegetables. So

Erwin 9:18
anybody want to just you’re allowed to help yourself?

Speaker 2 9:21
Well, if they fall over the fence, yeah, you can so too bad.

Erwin 9:27
So don’t trim those branches.

Unknown Speaker 9:29
No, those I want to keep Yes.

Erwin 9:33
Okay, are we gonna get pictures? Or do you post these pictures?

Speaker 2 9:38
Probably on my Instagram. I haven’t posted enough of that. I’ve shown mostly the beach but I need to show more the fruit and the wildlife here.

Erwin 9:47
Alright, let’s promote your Instagram because you’re about to post these pictures. Where can people find your Instagram?

Speaker 2 9:53
Yes, so it’s at Wine underscore and underscore real underscore est So wine in real estate, and yeah, right now it’s mostly beaches and stuff like that. But yeah, I’m gonna start showing that I didn’t think about it.

Erwin 10:10
Everyone’s got beach pictures in Ontario. No kidding.

Speaker 2 10:13
I know. Beach is more normal. But yeah, I’ll show that unusual stuff.

Erwin 10:21
So how long have you been living? How long have you been living in Costa Rica?

Speaker 2 10:25
So it’s been three weeks at the time of this recording. So not very long.

Erwin 10:31
Well, that’s more than most people take a vacation. So

Unknown Speaker 10:33
yes, that’s it. Yeah. Now we’re just testing everybody.

Erwin 10:40
And then how long you’re staying there? Sorry. You said eight months?

Speaker 2 10:43
Yes. Yeah, eight months. I am traveling during that time, but not back to Canada like Panama. I’m going to possibly Dubai. Places like that. Really? Didn’t

Erwin 10:55
you just get back from Dubai?

Speaker 2 10:57
I did. But I need to go back because it’s too amazing. Not not to go back. So it’s in the plans.

Erwin 11:05
Okay, we’ll get to all these. Okay, so hang on. First. Let’s just before we move on to from Costa Rica, what brings you to Costa Rica.

Speaker 2 11:13
Various things. So lifestyle number one, it’s the country of Pura Vida, which means pure life. And it is so true. And everything like the food is delicious. The weather is very pleasant right now. It’s rainy season. And it’s beautiful in the morning until about one or 2pm. And then it rains for a little bit. And it’s so lush and green. And it’s just amazing. And then for real estate. And investment opportunities are enormous here. There’s all kinds of construction and projects. And I sell real estate here. So why not mix my love of real estate nature. I’ve always liked gardening. So that’s kind of why I mentioned all the plants and just nice weather you’re around them. The water is filled with minerals. It’s just a nice calming atmosphere, you come back refreshed.

Erwin 12:07
And then where do you like where do you recommend for living in investing in Costa Rica. So really, pretty big country, isn’t it?

Speaker 2 12:17
It’s about the size of New Brunswick. So it’s not that big, actually. But it’s very mountainous. So there’s huge mountains and volcanoes. So if you want to get around, it takes quite a bit of time to drive across the country. It’s not like the province of New Brunswick with a big highway. You can’t really go that quick, maybe walk from one end to the other. Maybe it’s a 10 hour drive, while New Brunswick would be two, three hours so not as modern and of course with the big hills and 5.5 million people so it’s a bigger population than New Brunswick. But it varies a lot. There’s 21 microclimates. So if you live in the mountains, it’s cooler, it’s spraying year round, it’s always around 25 degrees, and that’s where they grow coffee. Where I am, I chose the warmer parts. So the northern part, which, as a Canadian, the further north, usually the colder it gets here, it’s the opposite. The more North you are, the hotter it is, and the more dry as well. So anything south has a lot more rain, longer, rainy season more lush, I chose a drier area just I just feel safer. I don’t know this country very well yet. So there’s less flooding and just less rain. So even rainy season. I mean, it’s a few hours here and there, not even every day. So it’s amazing. And it’s close to all the conveniences like International Airport, we have price smart, which is like Costco, but it’s owned by Costco, and Walmart and highways and paved roads, which is not everywhere in Costa Rica. And there’s many areas where it’s all dirt roads, so I would not want to be there right now. If you’re more adventurous if you’re on a holiday, yes, but living here every single day on that dirt road for a month. That like gets tiring. So here it’s more kind of modern, but we have all the nature and all that as well.

Erwin 14:24
And then so how well do you know the area then? Like, are you there for eight, eight months to experiment? Are you planning on bouncing around? Or yeah, no,

Speaker 2 14:34
I plan on my I know that province where I am going to Costa so there’s seven provinces in the country. And going across the is the more most northern province. So the hottest and driest one like when it comes to annual fairly well now. What I want to get to know eventually is explore the other provinces when it’s appropriate, but I also like to travel so this is a nice home base. I get to fly out Like I was saying to Panama in December, and maybe in March Dubai and other things, so I chose it as a home base. I do want to explore but I’m going to live in Guanacaste state where I’m where I’m staying right now.

Erwin 15:14
So where are you staying right now? Do you own the property or you’re just renting?

Speaker 2 15:17
Yeah, it’s my house. I’ve owned it for a few years. It’s in Playa del Coco. So if anybody knows Tamarindo, we’re about about an hour north of Tamarindo. So we’re closer again to the airport, about 30 minute drive at the most. And there’s no traffic here, which is amazing. Ottawa, I’m from Ottawa, so I can’t complain compared to Toronto and GTA. But the traffic was getting heavy. I mean, the light rail train and all that that didn’t really work very well. So I feared that worst is a cow crossing or big one as or something like that. So it’s actually fun. You’re like, Oh, something you crossing the road. And there’s never any rash here.

Erwin 16:03
Amazing. So you mentioned you sell real estate. So what do you recommend for like, prestigious questions? And what do you recommend for investment? What do you recommend for a living? Yes, the same?

Speaker 2 16:16
That depends like for me, I moved into an investment property, it was a short term rental. And my wife and I and the kids, we weren’t ready to commit to a bigger house and more money and do something else. So we just moved in. Now, but for investments, it’s best if you do, there’s a few opportunities, but number one, I’d say is construction. There’s a big shortage of properties. There’s lots but like well thought out properties, there’s a lot of little condos that’s that exists. It’s more villas, like a detached house with what we would call a tiny house in Canada or here they call it a casita or a cabana. So if you buy land and build those people snap those up like crazy, they don’t stay on the market. There’s never enough. So there’s huge opportunities for development for investors, and you have two incomes, you got the main house, and then the small house, and even the main house, you can design yet that it’s a locks off, you can have like two units. And if you build somebody builds that they’re gonna do very well, I’m working on a development here, probably 60 units, just like that, and I think that’s gonna be a great product.

Erwin 17:35
So the units, they’re gonna be essentially like tiny homes. Each unit is a tiny No,

Speaker 2 17:39
no. So there’s a main house like three bedrooms, two bathrooms, three bathrooms, whatever, you want carport, swimming pool, then usually in the back or front yard, depending on the layout, then there’s a tiny house. But that tiny house is usually one or even sometimes two bedrooms. And this came about because a lot of rich locals, the T codes, as they call themselves have staff so they could have been caretakers. But Canadians Americans are actually flipping that model around and they rent it out. And they don’t have live in staff. They just get people to come and make money out of their house. So they get to enjoy their house, relax and get a rental income. And then when they leave, they can rent the whole place out the two units or three depending.

Erwin 18:30
So sorry, you mentioned 60 units, or units

Speaker 2 18:34
60 houses. So there’s a large, like little subdivision that I’m working on right now. And there could be up to 60 houses, plus the Casitas and all the stuff that comes with it could be like a gated community of 60 homes.

Erwin 18:55
Fanta fantastic. And then how does financing work? And like land title and all sorts of things like here, we take it for granted in Canada, in Canada and North America. Well, I can’t save her for Mexico, but at least here in Canada, like our land title systems pretty tight. And what can be outdated technologically technologically wise, but otherwise? It’s pretty straightforward. Yes, like in Costa Rica.

Speaker 2 19:19
Very similar here. Because I’m I speak French I have invested in Quebec. I think you’ve had guests from Quebec as well or invest in

Erwin 19:26
many you don’t really

Speaker 2 19:27
know. Yeah, no, not many. Canada, most people know the common law, which applies to all of Canada except for Quebec. Quebec has the Civil Code. And the Civil Code is very much like the Napoleonic Code, which is what we have here in Costa Rica. And if you’re buying in California, they have the Civil Code and in Ireland as well. So, I mean, there’s many countries that have that. The differences are instead of a lawyer, you’re dealing with a notary and a notary is a lawyer. You’re really, it’s a lawyer that specializes in real estate. And then you do get a deeded title. So it’s yours. And it’s very clear, they call it planyo cadastro, which is like a survey just like in Canada. And there’s a number like a property identification number. In due form. The only place where it differs is if you want to be waterfront, the first 50 meters is public land, no one can own that piece of land. Except for old concessions, like if you own before the laws came about in the late 70s. The first 50 meters is for everyone, all beaches are public here, which is amazing. And then the first 150 meters, so from 50 to 200. That’s what’s called concession land. So you rent it from the government. So there you would not get an actual deeded lot. So that’s why most people buy about 200 meters and beyond from the water, which is great anyway, because on the water friends, you’ve got the salt and stuff eating away the house. So you want to be a bit further anyway and go enjoy the beach when you want to.

Erwin 21:15
And sorry. And then with the the 16th or subdivision. Is it like on the water? Does it have a view of the water? does these things matter?

Speaker 2 21:23
Yeah, they do. But I mean, here, it’s different. Most people want water views, because it’s very hilly. So a lot of people want to be in the hills looking at the water, but not near the water. Because as I said, it’s public land. So there could be a party at 8pm. And you have no control. So really, if you want a nice lifestyle, you want to be a little bit further from the water, maybe a five minute walk not far but just not right I did. And then there you can more your boat, do whatever you want as well. So that development will be a bit further maybe a 10 minute walk from the beach, which is great. Or you can rent a golf cart. A lot of people have golf carts everywhere. The

Erwin 22:10
golf car traffic jams.

Speaker 2 22:12
Yeah, it happens. People lining up and they’re going to get a coffee and there’s all golf carts everywhere and very different life or four by fours like little ATVs and things so

Erwin 22:24
awesome. Do you have a golf cart or an ATV? Because I do I’ve been HAKO and like I’ve been on the ATV tours and it’s lovely. Okay, let it go to the rain forest on an ATV. Yes. So with these, okay, so with with the subdivision, for example, let’s use as an example, like what is it cost?

Speaker 2 22:46
Yeah, so the the piece of land is actually not that expensive. So it’s about $2 million US to buy. And then each property, once they’re done really depends, like we’re so early, but I think they’re gonna go for around half a million US dollars each. So they’re not going to be huge. As I mentioned earlier, they’re probably three bedrooms, two bathrooms, plus a casita in the backyard. But once they’re done, they’re going to be worth a lot more. So I bought one last year for 375. And my neighbor just sold for 650. So there are some huge construction projects here in cocoa where I live plaster cocoa, and it’s causing some massive appreciation. Of course, don’t bank on it. It’s never the thing to do. But I mean, it’s a nice cherry on the cake here. So

Erwin 23:46
okay, let’s continue with it with the $500,000 House example. So that comes let’s cancel the three bedroom two bath and plus a tiny home. Yes, it’s

Speaker 2 23:56
a little pool. It’s very small pool like a diving pool or something. Nothing huge, but most people want that just to stay fresh. And then they actually go to the ocean nearby

Erwin 24:12
grandfer house and you get a separate tiny home. Because you’re like 250 300 grand to make. Well, that’s no garage like.

Speaker 2 24:21
Yeah, it’s not that it would be in a gated community. So there’s a gate. This will not be an HOA so not a homeowner’s association. It’s more up like a common feed just for the electric gate. And that’s it everything else is public. So there’s garbage service, city water, or town Water Town. Electricity as well. Okay, so fiber optics, the internet is great.

Erwin 24:51
You get fiber optic in Costa Rica. I don’t get fiber optic here in Oakville.

Speaker 2 24:57
It’s everywhere here. It’s crazy. So And you’re most reception is quite good pretty much everywhere even in the jungle, you’re like, oh, yeah, I’m, I’m streaming live on Instagram from the jungle

Erwin 25:10
and then how much would the house in the in the casita run for?

Speaker 2 25:14
So it really depends, again, high season low season, high season, I’d say, probably 250 US per night for the main house, the Casita, you’re gonna get less because it’s probably more like a studio, so maybe 125 A night.

Erwin 25:32
What about like, okay, and then what about like an annual number? I don’t do short term rentals myself personally. So Oh, yeah, the annual number even?

Speaker 2 25:42
Well, let me let me do some quick math that 250. But

Erwin 25:47
that’s because it’s not going to be rented up to 50 a night. 125 a night for three?

Speaker 2 25:51
No, that’s it. So you’re probably going to bring in about 80,000 US dollars per year, I would say, with the house. And then of course, you’ve got to remove all your expenses and stuff. And then you could provide extra services like a golf cart, eight or $10,000. You park one in the driveway, and you rent it for more. You can charge other services like airport pickup, drop off the transfers. There’s many ways to maximize your investment there.

Erwin 26:28
And then what are your expenses, then? What are your what’s the cost of operating this house?

Speaker 2 26:31
Yeah, so operating is not that expensive. Property taxes are? This one’s over 375. So it’s zero point 25% of the property value up to 375. And then it’s 0.55. So it’s a low, low property taxes, maybe, maybe 700 a year. That’s it? Yes. Very cheap, as I mean, there’s no snow removal. There’s really not much going on, they do garbage. And then water. So you gotta pay your water bill. For a house like that. You’ll probably pay around $40 a month. Water is very cheap here. Really, really cheap.

Erwin 27:15
But taxes are so cheap. That no hospital. Far difference, please.

Speaker 2 27:19
Yes, yeah, there’s there’s a fire hydrants, fire departments, police, hospital, hospitals, hospitals. Here, it’s like a two tier system. So there’s private and public. And yeah, you got pretty much everything. I mean, you are in a developing country. So it’s not the same. But there’s a lot of medical tourism. So a lot of people come for the services very modern, on the private side, public depends. And then internet, you’ll pay around $65 a month for quite a good internet. It’s all US dollars again. So not sure the exchange and then electricity, that’s where that is expensive electricity. Maybe $300. A month three or 400, depending on the season.

Erwin 28:15
Is that because you’re running Water Conditioning or just because rates are high?

Speaker 2 28:18
Air conditioning and rates are high 99% of the electricity here is renewable. So it’s solar, wind power, all kinds of things. So it’s very green. And yeah, they charge a charge accordingly.

Erwin 28:35
Right, because log green tech isn’t very efficient. No rain. It’s not efficient in terms of cost. But

Speaker 2 28:41
exactly. So it’s not cheap. But I mean, you may feel good about it. And yeah, so there’s that property insurance, you probably pay around. It’s very cheap here. Maybe 800 a year.

Erwin 28:58
Really natural. Like is it because there’s like no natural, limited natural disasters.

Speaker 2 29:03
Very limited, especially where I’m buying very, like I said, very little flooding a very, like earthquakes are very minor. There’s no hurricanes. You’re not like in Florida and Florida, you pay a fortune because of hurricanes and stuff. And Tornado Alley in the US. And that’s it here. There’s none of that because of the mountains. The volcanoes are very far so they’re not affecting you. So super cheap. Most people actually don’t even get insurance here. I would recommend to get hits. But it’s not a thing locally. Most people don’t insure things, even cars. They only insure them one way like if somebody dies or something. So very different culture. That’s probably why it’s

Erwin 29:48
cheap to people that have mortgages. That’s why they don’t have my house mortgage and they don’t have house insurance.

Speaker 2 29:53
Well, yeah, most of the market is not mortgaged. It’s a cash market for the most part.

Erwin 29:58
Okay, so sorry. This, are people buying these houses then cash 500 on us

Speaker 2 30:05
that I’m talking about, but the locals Yes. So it’s a very stable economy because very few people have mortgages, foreigners do locals don’t as much anyway. Okay. Which is great. So there’s not much like variation. It’s cash so people don’t speculation Well, that is not the same.

Erwin 30:26
Okay, so most investors I know have mortgages?

Speaker 2 30:30
Yes. Available. They are Yes. So that’s why new build is very interesting. Usually the builder will offer financing. So this project when it goes ahead, I will offer and my partner’s 50%. So it’s a low LTV 50% loan to value, usually around 8.5% interest, so it’s not cheap. And it’s five years, after five years, you got to pay it off or get a more local mortgage.

Erwin 31:02
No, no, no option to renew just five years it’s over. That’s because it’s

Speaker 2 31:05
builder financing, but then you can go I know quite a few lenders, and then they can offer you a mortgage on the new value. So as I mentioned earlier, let’s say you buy buy it for half a million, and at the end, it’s worth 650, let’s just say at 650, the new lender will offer you 6070, maybe I’ve had up to 80% of the new value. So it’s not a burr, but you’re pulling some money out and you’re getting a new mortgage on the property. Our flowers planned for 5050 to 60. Beyond that it depends

Erwin 31:44
are Kenyans able to build up credit in order to get to get like a better mortgage schedule a mortgage.

Speaker 2 31:51
No, because that’s not that’s not really a thing here. So most mortgages are more like commercial. So it’s the building that qualifies, not you. So they actually send an appraiser. And that’s what qualifies. You don’t need to have an income or anything left the check yet. But that’s not what makes you qualify. Interesting. That’s why the loan to value is lower.

Erwin 32:16
And then we’ll be direct. So say someone wants to exit in five years after the after the builder financing is over. You have an idea what the property’s worth.

Speaker 2 32:24
Yeah, so as I said, I think those that 500 will be worth at least six 650, if not more, because there’s right now, there’s the QSC K Peninsula. So it’s the cocoa players a cocoa, it’s like crescent shaped Beach, in that one. And there’s a long Peninsula that was bought by the owner of AOL. So I know that’s dating. That’s really old America Online, but it still exists. So the owner bought the whole peninsula and is by building a Waldorf Astoria resort, and houses their start at $5 million. us like that rock bottom pricing. And we’re a five minute drive from there. So we’re already seeing an influx like there’s new stores opening there’s a marina that’s been announced there’s all kinds of things happening here that will boost the values of these properties. So in five years, I think prices will be insane because we saw the same in a town about 100 kilometers from here, and everything doubled and tripled in value once they built all that

Erwin 33:33
so I felt bad about asking all these investor questions because my question my next question was going to be who should be buying these properties? Are these for self use? Are they for investment they for both? I’d say

Speaker 2 33:47
more investment so more investors people that may want to flee winter for a month or two and then rent for the rest of the year. Maybe come during the summer it’s actually quite nice during summer here it’s very quiet and very green and lots to do still and activities are less expensive offseason if you come during high season it’s not a cheap country here. So I’d say yeah investors for sure.

Erwin 34:14
So what what’s the temperature like what’s what’s what’s the what’s living like in the summer because you know, many people think to go that far. So for the wind, I know economies are expensive.

Speaker 2 34:26
Well that’s it summer is actually cooler here. So summer is more 28 to 34 degrees plus humidity so that’s cool for here. While if you come during March like March Break, it’s more 35 to 45 plus humidity so summer is quite nice. evenings are like 24 So it’s quite pleasant. A little bit of rain once in a while. But the rain here is warm so you’re never cold. I mean, actually stepped in in the street the other day was a bit flooded and it was like stepping in Hot Tub. It’s crazy.

Erwin 35:02
Alright, so first question. When Jerry and I are supposed to be there in January, what’s the weather like,

Speaker 2 35:08
though it’s the best time of the year in the 30s, the low 30s and drier. So because there’s no rains, it’s going to be a lot drier. Just really a good time to be here, kind of like Florida and it doesn’t rain for about six or seven months. So

Erwin 35:25
interesting, because I just for example, a lot of our friends who moved to Florida, a lot of them come back in the summer because they say it’s too hot. Ontario. Yeah, Lira when it tells me because what you’re saying last four seasons sounds like a four season destination. There’s not really many four season destinations out there.

Speaker 2 35:46
No, the only time I would say is normally September and October is extremely rainy. But I’m here right now it’s this is mid October. So far. I mean, like I said a few hours here and there not even every day. And we’ve had one day where it really poured but otherwise it’s very pleasant. So depends. I mean, if you got more time if you’re planning outdoor stuff, you got to be flexible, early. Everything starts very early. Like school starts at 7am people are out at 5am 530 It’s very different.

Erwin 36:22
I didn’t expect that for a Caribbean country.

Speaker 2 36:26
Yeah, it’s it’s slow, but they’re early. I don’t know how quickly to get things done. But it’s it starts very early. Very interesting. Very interesting. Because it’s it said the near the equator where eight degrees on the planet like to the equator, so the sunset and sunrise are almost always the same. It’s around like Sunrise around 5:15pm Sunset around 530. And then winter 6pm 6am. That’s about it. 12 hour days.

Erwin 36:56
That’s not so bad. This is predictable. Yeah. Oh, it’s

Speaker 2 36:58
quite nice. I find it relaxing. You know, your day, and it’s the same almost every day. There is no daylight savings, none of that stuff.

Erwin 37:07
Fascinating. How are you liking it?

Unknown Speaker 37:12
I love it so far.

Erwin 37:15
How long are you staying?

Speaker 2 37:17
So eight months. And if as a Canadian, if you come here you have 180 days on your, your passport, so Visa free entry. And then you can leave for a day and then get 180 days again. But if you want to drive you need to exit every 90 days. So right now I’m exiting every 90 days for it to drive. So now we’re about an hour and 40 minutes to Nicaragua. You could just go there. There’s buses that do that. But personally, I chose to actually fly out. I’m going to Panama. It’s another one of my markets I’m interested in so I want to go see it. And then just plan trips around it. And then when you get residency, you don’t have to but anyway, that’s about a year a year to two years process.

Erwin 38:10
So where else do you have properties?

Speaker 2 38:12
Yes, so well in Canada. So in New Brunswick, Alberta. They have properties in Michigan, in Florida, in Dominican Republic, Dubai, and here in Costa Rica, and then I’m looking at Eastern Europe and South like Sorry, South America as well.

Erwin 38:36
Eastern Europe like Ukraine.

Speaker 2 38:39
Yeah, well, not Ukraine, but I guess you could get some good deals right now. But no, bad joke. But I would say more like Albania, Bulgaria. There’s some great properties there Romania. Georgia. Everything that’s Ay ay ay ay.

Erwin 38:57
None of those are RNA on the euro. Animals. European Union.

Speaker 2 39:02
Yeah, summer and we’re using the euro, summer Euro zone, some are nine. It varies. Personally, I don’t really care about that. It’s actually maybe an advantage to not be in the Euro because then you’re not tied to that and the Schengen area as well, you’re not. If you go there, like Georgia, as a Canadian, you can stay there 365 days, and then you leave for one day or two days. If it’s a year with more days. And then you’re back and you get stamped again. You don’t need to emigrate, you could live there as a perpetual traveler if you wanted to.

Erwin 39:40
So just spend your life trying to collect places and different places.

Speaker 2 39:43
Yeah, well, because there’s advantages for business. Like some bank accounts in Georgia, you put your money in and you can earn 12% interest on just that checking account. So there’s there’s opportunities a lot of people don’t in there Local currency, the Georgian Lari. So it’s been quite stable. It’s about half an American dollar. 52 cents. That’s crazy.

Erwin 40:12
Yeah, just a second mortgage money to operate is. Yeah. And you’re going to do this?

Speaker 2 40:22
Yes. All right. And if you have a company there you pay 1% income tax. So it kids a very alluring country. And if they’ve pretty much invented wine about 1000 years ago, so sounds like a nice place to me.

Erwin 40:43
Why security wise, why, why? Why be in so many different places in terms of your password? And clarify your investments as well? Like, do you own a property like, like, it’s all yours like thing or like your shares in something like a REIT? Or how is your ownership?

Speaker 2 41:00
Yeah, usually it’s about 50%. I do a lot of joint ventures. So I find other investors that are like minded and want to partner to invest in these properties. And so it varies some I own myself with my wife, some summit partnerships. So why so much diversity? Oh, look at the world we’re living in. So if you put all your eggs in one basket, what happens if Canada gets attacked for some reason? It’s gone. No. I mean, we are very big sticks. Yes, we are very close to Russia. And I mean, there is internal, like fighting, I was in Ottawa with the trucker convoy and stuff. And it almost felt like the beginning of a civil war. So you never know. I mean, I hope none of that happens again. But whether you’re for or against, there’s some scary stuff and currencies as well. So I don’t want all my money in Canadian dollars, or American dollars, or colonias in Costa Rica are pesos or I want, I want them all. So if one goes down, I just move on to the next. So that’s a personal decision, but I like more variety. And it’s more fun. Have like,

Erwin 42:21
I have trouble keeping track of you have like tough currencies.

Speaker 2 42:27
Yes. Oh, yeah, I have way more than five bank accounts. But anyway, that’s, that’s another story.

Erwin 42:35
But, but you do have your boots on ground partners. And yeah, and most of these properties?

Speaker 2 42:41
Yeah, absolutely. Yeah, you need to I mean, like Dubai is super far and where I am right now. It’s a 14 hour time difference. So when you call there I mean, the next day over and over, so it’s doesn’t make it easy.

Erwin 42:58
And then what is your message in Dubai? Because I hear Dubai come up often. That’s Yes. I often hear it’s one of the best places to be investing. It really is.

Speaker 2 43:08
world class city. I’ve never seen a place so clean in my life ever. Everybody said it was clean. And when I went I was I was shocked. It’s crazy. how clean it is.

Erwin 43:19
So invest to be caught littering?

Speaker 2 43:23
Yeah, no, they’re, they’re like, Yeah, but I guess they cut off your hand. But it might not be a bad idea elsewhere to apply that. So I’m a bit of an extremist. So, Dubai, what’s good and preconstruction. They call it Off Plan. So you can because of Islamic law. A lot of builders will offer payment plans without interest. So when Islam if, you know, really, it’s it’s hard to have interest free loans. Yeah, but I mean, you do very well there, you’re able to buy places. Sometimes they have like an eight year payment plan. So five years up to the construction, and then you get the keys. And then you have three more years to keep paying the property or sell it or do whatever you want rent it, something like that, which is great. And as a foreigner, you can get a mortgage at that point, because it’s now built. So you can get a 60% loan to value mortgage in Dubai. And that’s gonna be traditional look with interest and amortization, things like that development. A lot of people do assignments, they buy entire floors of buildings, and then sell off other units. There’s so many things you can do open a business. You pay no income tax as a person so it’s really great.

Erwin 44:44
How’s Dubai? Are they still keep growing country they’re still trying not to immigration investment.

Speaker 2 44:49
Yes, all the top talents you go there and it’s other people with PhDs and very educated population and extremely wealthy Like stuff you find in Canada, that’s a luxury There is basic amenities. All the bathrooms and shopping centers have Butler’s people constantly washing them. It’s not it’s not like Canada at all anymore. People have driver like chauffeur and they have maids and nannies and very different population. And

Erwin 45:25
they were able to get cheap labor there from from neighboring countries.

Speaker 2 45:28
Absolutely. Which in Canada, you can’t. So that’s why when I’m there, I’m like, well, there’s no way I could hire all those people. I’d pay more than one iron. So it’s crazy

Erwin 45:39
downside of having these big oceans to cross? Yes, that does mean no one attacks us. No. So, so how did how? So you visited all these places? What is it about Costa Rica that makes you stay there?

Speaker 2 45:54
Yeah, here. It’s the people that called the Latin culture, I just find it very nice and welcoming. And it’s just, it’s delicious. I’m very, I like food. So it’s a big thing. There’s great food and Dubai as well. I just like it. And I’ve always enjoyed Spanish. So I started learning it when I was 14. I speak French. So Spanish is very close. Just a nice culture, the beach, the relaxed atmosphere. Dubai is not relaxing. It’s like Toronto on speed. So it’s a lot busier and much bigger, like highways and just construction 24/7 Here, it’s super chill and just enjoy. You can watch a plant grow and don’t feel bad about it.

Erwin 46:44
Alright, so it’s just it just fits your pace. Your pace. Yes. Goodbye. It’s like the big brands, big vehicles. Louie Vuitton, Gucci everywhere. And consumerism.

Speaker 2 46:55
So I’m more of a minimalist so Costa Rica, you can’t get a lot of things. So with you have to be a minimalist no matter what. So it’s a lot harder to find certain things while Dubai as a consumer culture, so I don’t mind some consumerism a few months every year, but I do like the minimalist lifestyle. Alright,

Erwin 47:18
I maybe Oh, Phil’s not for you then because the cost goes just down the road. And that yes, the opposite of minimalist.

Speaker 2 47:24
I know which we have here too. But I mean, it’s a mini Costco you would laugh when you’d see it, but no lineups nothing. It’s just nice.

Erwin 47:33
Very cool. Very cool. Yeah, so you’ve covered so many things. Is Panama gonna be a big, big piece of your investment? Journey?

Speaker 2 47:45
I’m really hoping Yes, because it’s a tax haven. So another that’s that’s my thing. I love tax havens. Costa Rica, is not that high. It’s not a tax haven. It’s not a low tax country. But there’s many potential benefits. Panama. Yes, I think there’s some great affinities in Latin America, it’s the country with the most banks and all kinds of terms. It’s very consumer oriented. So very modern, they have, they have a huge mall, like almost like West Edmonton Mall. But you’d never know. In Latin America. It’s not a common thing. So I mean, lots of conveniences. It’s a great place to invest. It’s growing. And the canal makes it very stable economy as well. So we’ll see me because it’s more for my kids. I mean, the beach life is great. But I want them to also have City Living MOHAI like more connections and stuff. So Panama might be like our, a few months a year we go there and live in the city and then come back to our beach home and just enjoy life.

Erwin 48:53
I mean, sorry, your kids are there with you in Costa Rica right now?

Speaker 2 48:56
Yeah, they’re 17 and 19. So yeah, they’re they’re here and we brought our cat as well on the plane. And that’s it for suitcases, the cat and the kids. That’s all that’s left.

Erwin 49:06
So what did they do for school?

Speaker 2 49:10
So my son was done High School. He’s 19. So he’s studying online in it. So you can do it anywhere. As long as there’s internet, and our daughter is doing grade 12 online, and then she wants to do real estate with me. So she’s already helping me out. We’ve been to a few showings and listings and

Erwin 49:31
so your daughter grade 12 online. What is that through? Is that a Canadian program she’s taking or

Speaker 2 49:36
Yeah, yeah, she’s finishing grade 12 in Ontario. She’s actually heading back in early 2024. To graduate with her friends. That is her choice. She could finish it online completely. There’s local schools but high school ends at grade 11 here, which is again similar to the Quebec school and then you go to college and then University So, we didn’t want to do that. I mean, not at that age.

Erwin 50:05
How does? So for folks who missed that you are from originally from Ontario, or specifically Ottawa? How does a teenager How does a student in Ontario, take an online school,

Speaker 2 50:17
so you can choose to be homeschool, that’s what they call it. And then you go to the school board, and then they issue a letter saying you’re going to be homeschooled. And then you’re exiting the school board and the whole system, and then you can enter, there’s TVO, ILC. It’s an online high school, usually it’s more for adults going back to school, but the system’s there. So if your child is over 16, they can do that online and, and choose to be sort of emancipated in a way. And with COVID, I mean, our kids were on line for years. So like, what’s the difference here?

Erwin 50:58
Right. So for she’s great fall, so there was no option to do grade 12 in Costa Rica.

Speaker 2 51:06
No, because it doesn’t exist. Right. Right. So fascinating.

Erwin 51:09
And then your son he’s doing it is the it course? Is it like it was a Google? Was it Harvard? What is it?

Speaker 2 51:16
Yeah, with some with Google he’s doing he’s actually not doing like a bachelor’s degree or anything, it’s more courses, and apply them applying techniques and stuff. So yeah, it’s, we have a lot of friends in it. And most upset, it’s more experienced than education right now. A lot of people graduate from university, and they have trouble getting hired. So we told them, Well, get the experience, then just do it.

Erwin 51:43
Can you name it? I’m sure some people will be interested.

Speaker 2 51:47
That’s why I’d have to ask him. Sorry, I’m, he’s an adult. So I told him study, do well, good luck. So I’d have to look at what he’s doing. But it’s a lot of it’s actually free. And then you pay for certificates. And he’s got a lot of experience now with like full stack programming back end websites stuff. Ai pixelart. Other things I don’t understand. This is so

Erwin 52:12
cool. Yeah, we’ve Harvard, they I believe they made all of their online, specifically for something around computers, either coding or software engineering completely made it all online available for like, really, really cheap. And if you want, if you want the I’m calling it diploma, I don’t know if it’s the right word, but there’s only like three and $50. Official, if you want a document to see completed it is like very, very cheap.

Speaker 2 52:37
It really is. And that’s what he’s doing. He went to Ottawa EU last year, it didn’t go super well. So we told them, Well, let’s take this opportunity. Stop it, and try something else. And now he’s doing very well, so and what they were teaching was old code that’s not even being used anymore. And all kinds of things. I’m like, That’s That’s useless. So sorry, all the way you but now it’s not wasn’t great.

Erwin 53:02
That’s amazing. Yeah. So how is your daughter been doing her high school online?

Speaker 2 53:08
Just right now? Just yeah, just since September is a month and a month into recorders. And how’s it going? Great. Yes, going 1995. And it’s in French that’s available. A lot of people don’t know this. But in Ontario, there’s French school boards and all that. So the whole online school is available in French. So she’s taking her grade 12 in French to continue her French education.

Erwin 53:34
She can’t do it in Spanish.

Speaker 2 53:36
Now, she’s not that good. That was another issue here. She needs fluency test. I’m like, Yep, good luck with that one’s not gonna work.

Erwin 53:46
Or she need a fluency test to go to school.

Speaker 2 53:49
Local. Yes. So if you go to a local school, they’re bilingual, but you still need to be able to understand some Spanish and write some. And there’s private schools that are English only. But I mean, I personally am not for that. I’m more learned a local language, but she wasn’t ready. So

Erwin 54:10
that’s cool. Yeah. Because I’m sure many people are wondering how they have a slice of what you’re living, right. At least be away for the winter months. Ever since the pandemic, I think it’s two things because people were locked down and didn’t enjoy that. And the other thing is a lot of people made a lot of money through the pandemic. Yeah, and now they can afford it. You know, I mean, some might just be really equity rich, but still, they can always exit and take your profits and use that money to to move away. Yeah. Like we like like, you know, we all know Rob break is down there to know you’re

Unknown Speaker 54:42
about 100 kilometers from me, so very close.

Erwin 54:46
That’s super cool. And then I don’t know where to go because you name some of the countries. Where would you like to go next?

Speaker 2 54:56
Well, we can kind of probably end this with how can people do this well, the simplest thing is just do it. I’m sorry, but a lot of people ask how how do you do anything? You you inquire you booked flights you go you start doing things so if your dream is to be in Belize or Panama or Costa Rica or Mexico, wherever France, Italy, make some inquiries and make your dream happen like I’m more into doing and not like being like paralyzed by analysis. what’s the worst that’s gonna happen? Here worst case which we eat more mangoes there’s three mango seasons, we’ll just eat mangoes they’re free. So I mean, of course you need to plan but you also need to take action. A lot of people talk about things for years, and they never do it. So I’m more into just do it.

Erwin 55:53
Right Potter flight? Yeah, yes. Yeah, yes. Start by just trying to see if yes, the effort.

Speaker 2 56:01
Rent. Yeah, rent an Airbnb come and stay for two months, three months do slow travel. That’s my thing. Now I don’t like going to a place for a short time I want to go and spend a few months. See if I like it. Are people annoying? Is it noisy? What are your non negotiables? Can you can you live without Greek yogurt? I have trouble without it. So I had to find my source of Greek yogurt. And I mean, there’s things in your life, you don’t realize that you need your do you need your feather pillow? Do you need? I don’t know a certain type of car computer or something, a gym, whatever. So what are your non negotiables? And then what place fits that model? And then go and try it? Before you buy? Obviously don’t just buy a place and and then hope it works?

Erwin 56:54
That’s all interesting stuff. And then how are you? You’re you are offering courses, workshops. What is it?

Speaker 2 57:00
Yes, yeah. So I actually help people realize their dreams like that of investing internationally. So I call it offshore Rei, and you can offshore your life as well if you want or not. I mean, a lot of people want just a winter home, or a getaway of some kind. And also diverse diversification. So I offer a 12 week program where I work with people and I help them think about what are their non negotiables like the list I just mentioned. For me, I need potable water. So I don’t like countries where you can’t drink the tap water. I did mention one country in there. So personally, anyway, I prefer when you just turn the tap on and drink the water I find it’s very telling that’s one non negotiable for me. Banking, how are you welcomed as a foreigner? Some countries don’t like Canada or the US anymore as much as some countries actually ban Americans from opening bank accounts there. So you have to be ready for that. Who doesn’t like Canadians? So like Dubai, for example. It’s harder if you’re Canadian and American because of reporting laws. So reporting requirements as parts of Europe do not want American or Canadian money anymore. Those are things that are coming so I’m I’m helping people realize that North America is not the center of the universe anymore. It’s more Asia where I guess you’re you’re from where your ancestors are from. So you have to be ready

Erwin 58:36
to do communism.

Speaker 2 58:39
Yes, but many French teachers about this morning. No, yeah, well, that’s it’s but I mean, Latin America has the doors wide open. And they do very well in in Asia and they have passports that allowed him to go to countries that we can’t as Canadians or Americans

Erwin 59:00
you mentioned it earlier. What’s the currency of Costa Rica not

Speaker 2 59:05
know well, they use the US dollar for real estate and like big purchases, real estate and cars or you can pay using the local currency that column C O L O N or colonias plural. So it’s actually not a bad currency. It’s been quite stable and becoming stronger and stronger lately, it’s actually kind of hurting the American dollar buying power locally. So I mean, it’s something Okay, Panama. Their currency is pegged at half of an American dollar, which is nice. You always know what it’s worth. So it’s important to know those things when you’re investing internationally and that’s something else I cover in my course.

Erwin 59:50
Do you know why Costa Rica cult is a is a culturally that they do to currency is that there’s a government

Speaker 2 59:59
it’s because For probably 2030 years and their currency was way too volatile. So the colonists, the local currency went up and down, up and down. So locals and I’d say 75% of people that immigrate here are Americans. So they kind of in a way imposed the American dollar. It just became normal. Kind of like in Mexico, you go there and they take a lot of, of US dollars that American all those countries, it’s kind of a dual currency.

Erwin 1:00:35
That’s funny. You mentioned that because the current like Colin colonias was volatile. People didn’t want and chose the US dollar. Yes. My jab at my my cryptocurrency listeners.

Speaker 2 1:00:48
Yeah, well, that’s. But then there’s other countries that don’t want the American dollar. So there’s that like, it’s, it really depends where you are with the culture. So yeah,

Erwin 1:01:01
I’m a geek. So I just find these things interesting. Like, for example, like, I’ve had a, I’ve had a close personal friend lived through two currency collapses while I lived in Moscow. Wow. And so if you live in Moscow, would you like to be earning your wages in rubles? or US dollars? Yeah, I know. That’s what that and what the government wants to do, and that, but there’s like, what protects you and your family? Exactly. Maybe you don’t want maybe you prefer to eat? Maybe you prefer euros or Chinese won. But my point is, like, a lot of places don’t people don’t even want their own currency.

Speaker 2 1:01:38
Well, that’s it. So it’s actually kind of shameful sometimes. And, yeah, so some people don’t realize that like Argentina, I mean, their their money went up, down, up down Colombia. And so you got to watch out when, when you’re investing in those countries?

Erwin 1:01:53
Yeah. reminds us that we’re lucky here. Yes. Nobody wants our currency belly to stable.

Speaker 2 1:02:00
Yeah, it’s kind of compared to those. Absolutely. It’s very stable. I mean, there’s more stable than that. But absolutely. It’s one of the stable ones.

Erwin 1:02:09
Interesting. And then what about the the January event that you’re hosting?

Speaker 2 1:02:13
Yeah. For those that want to learn about how to invest in Costa Rica in January, the 22nd 23rd, and 24th. It’s called invest in pura vida. So if you look it up, invest in Pura vida.com. It’s a three day conference, where we’re talking about everything you need to invest here. We’re gonna have all the legal teams that counting in Costa Rica and in Canada as well, we have none other than cherry chan joining us. So let’s give you awesome. And we’re talking about like financing, how to make it happen. I touched on it very briefly. But there’s a million other ways you could use life insurance, you could use RSPs TFSA. Is the list is crypto, if you wanted to the list is endless. So yeah, it’s a three day event, a lot of fun. And last week, we hosted one in March 2023. And we had about 50 investors. So we’re expecting about the same it’s not a huge event. It’s more like a mastermind, kind of. And we do a lot of fun things. And we’re right on the beach. So we’re at a beach club. And then we do a bus tour and look at properties and lots of networking. We have people from all over Canada, so eastern Canada, Western Canada, central Canada, some Americans are joining us. And lots of international investors, a lot of people joining have properties in four or five, six countries already.

Erwin 1:03:45
Having challenges dealing with 5456 properties in Hamilton. Accounts and

Unknown Speaker 1:03:52
time zones. Yeah.

Erwin 1:03:56
That’s hilarious. Do people put their kids through these things?

Speaker 2 1:04:00
So they can absolutely there’s a few people bringing their kids so there’s a swimming pool right there, depending on the age of the children. Yeah, there’s two swimming pools right at the beach club. And we’re on the beach as well. So if you’re coming as a couple well, you can go to the beach and take turns. There’s there’s not activities planned specifically for kids. But yeah, kids can come absolutely

Erwin 1:04:25
awesome. Yeah, my kids are I’m a bigger swing liability than my kids.

Unknown Speaker 1:04:28
There you go.

Erwin 1:04:31
plans to go with Ark plans to bring the kids because we’re all working. We’re all working on location. We are not on vacation. Yeah.

Speaker 2 1:04:39
But you can a lot of people I mean, that’s what I do here. I’m not relaxing here for eight months. You can do a lot of business here and it’s in Central time. So it’s like Alberta if you got lots of clients during winter will be like Saskatchewan times a one hour time difference with Ontario.

Erwin 1:04:57
Oh question. Where do you pay tax? too Do you pay taxes anymore? Still?

Speaker 2 1:05:02
So right now I’m still Canadian. So I pay taxes to Canada. Yeah. So by when I leave the Canadian tax residency, not my citizenship, but the tax residency, then yeah, I’ll have to pick residency. For now, it would be Costa Rica, because I have the most time in the country. But eventually, I can shop for a different tax residency and choose what suits me best.

Erwin 1:05:27
Fascinating. Okay, so I know you’re not accountant. So let’s preface that with a public listener. So what what does that mean? What does leaving your tax residency mean? And then what are you looking for a new tax residency?

Speaker 2 1:05:38
Yeah, so leaving tax residency, there’s, well, if it’s from if you’re American, you can’t that’s tied to your citizenship. So Americans, they have to renounce their citizenship, which is a big deal. So that would be a tougher sell. I mean, some do it. There’s a few 1000 people each year. But if you’re Canadian, if your tax residency, where you pay your taxes is not tied to your citizenship, so a lot of people think, Oh, you’re going to lose your citizenship know what you’re going to let go of is the health care. So Oh, hip, or whatever province you’re coming from? Canada, Ontario was 212 days, you can be gone? Before you lose? Oh, hip. And then there’s different criteria. So where do you own your income? Is it mostly Canada, then? Yeah, you’re still you still have ties to Canada? Do you still have dependents in Canada? Like your kids? That are minors, then yeah, you still have ties to Canada, you have a car? Do you have a principal residence? Do you have bank accounts, and then the list goes down. So there’s many ways to do it. But it requires planning, you need a good accountant to do that. And if you’re an investor, it’s not an easy process. Like for me, it’s going to be probably three to five years. before it’s fully done.

Erwin 1:06:59
Would you have to sell off your dream remaining properties in Canada, or it’s okay, you

Speaker 2 1:07:03
know, you don’t, you could keep all your investments, the only big one is the principal residence, you can keep it, but you need to rent it out long term, or sell it. So I chose to sell it. And that’s it and no cars, you can’t own vehicles. So I still have a car in Ottawa for my daughter when she goes back with friends and stuff. So when I mean, when that’s done, then I’ve got less ties, but I still have my driver’s license, I need to get another one. There’s all kinds of things you need to work through. So the CRA does not let you go easily. But it is doable. If that’s that’s what you want to do.

Erwin 1:07:45
So why the why decision to give it up.

Speaker 2 1:07:49
You can save a fortune. So instead of paying like six figures and income tax, I could pay a lot less so I could choose pan, like I said Panama 510 15%, Costa Rica is a bit higher, I think 25 is the top income tax you can pay. So that’s still much lower than Canada Dubai’s 0%. So if I want to pay no taxes, I could live there. And I actually teach the center coaching. So yes, yeah, teach people how to do it if you want to, but it’s, that’s for a very niche market. Most people want to invest internationally. And then the rest is maybe more advanced. It’s for a smaller population.

Erwin 1:08:37
I don’t know man, I we sent out our survey on us investing like I think it was like 10% of respondents were talking about immigration.

Speaker 2 1:08:46
Well, it’s yeah, it’s bigger than what a lot of people think. Cuz in Costa Rica, whenever I go somewhere, they’re like, Oh, yeah. Is there anybody left in Canada? Everybody’s moving? I’m like, yeah, there’s still people. A lot more of us. Yeah. growing like crazy. That said, there’s people coming and then I think it’s more long term Canadians that are leaving the newcomers. Newcomers are some of them are not staying. I mean, it really depends what what you were sold on and expectations versus reality and opportunities. Things like that.

Erwin 1:09:22
Fascinating. Thought and Francoise, I prepared you for this question. I’m not journalist but I like to say I tried to uphold journalist journalist integrity. So so we don’t get sued by anyone. I can’t name names. How else do I put it? I think you kind of fell in with the wrong group. A term I don’t know what what do you want to say about it? You can even say nothing.

Speaker 2 1:09:58
Yes, no. Now I don’t want to talk about it. It’s, it’s in the past. It’s good luck for them. That’s all. Yes.

Erwin 1:10:08
Maybe, to what kind of due diligence you should do before joining any group mastermind. Membership, whatever you want to say,

Speaker 2 1:10:19
Oh, yes. Well, of course, I mean, do your due diligence, just like buying anything I’ve said now, like does not apply for everybody there. Like I said, if you’re American, a lot of this doesn’t even work for you. If you’re Canadian, too, might not be the best situation. Oh, we got thunder coming in.

Erwin 1:10:37
That’s funny. It’s so sunny behind you.

Speaker 2 1:10:40
Yes. Now, it’s super dark, actually. Yeah, weird lighting. So, yeah, I would say do your due diligence, make sure you do a bit of background check before signing up with a mentor. Ask for references. And ask around not just references because most people if they’re smart, they’re going to give you a good reference. So if I ask about Erwin, what are your references? Well, he’s going to give me names of good friends and people that will put in a good word. Ask around others. And then yeah, make an informed decision.

Erwin 1:11:17
Excellent answer. And I’ll just add listeners, if your listener does, you can feel free to reach out to me. I’m on social media. DM me, and I’ll gladly reference check people for you.

Speaker 2 1:11:29
Yeah, well, that’s it. Ask ask someone and I currently am starting a group with my friends in Ottawa. It’s called the capital connectors. And again, we have no agenda. It’s more just networking. There’s no teaching nothing like that. It’s just business networking, not even just real estate, but business networking.

Erwin 1:11:51
Wait, how you gonna do that? Over zoom? No.

Speaker 2 1:11:57
We’re hosting events everywhere. So we started in Ottawa, but now I have one in Costa Rica on November 6, and then Dubai, probably in March. So it’s kind of everywhere and capital as in money, or the National Capital, and then connectors, that working. That’s all. That’s all it is. So we’re keeping it very simple.

Erwin 1:12:16
And where can people get more information on?

Speaker 2 1:12:19
We have a Facebook group capital connectors, it’s like a pink logo. So it’s hard to like hot pink. It’s hard to miss. And we’re working on our websites. You can also find us on Instagram capital connectors.

Erwin 1:12:38
And then your own business working or more about investing, investing offshore real estate.

Speaker 2 1:12:44
Yes, wine and real estate.ca I kept the.ca

Erwin 1:12:50
You don’t want to give that up to give up your tax residency.

Speaker 2 1:12:53
That’s it. So for the next three years or whatever, I’m keeping it then I’ll have to switch. Probably don’t really are

Erwin 1:13:00
you willing to give up the seat.ca? Yeah. Go Daddy. Just keep clicking. Yes, yes, yes, yes, yes.

Speaker 2 1:13:08
If you have no, still have ties to Canada, but at some point that that CA is only for Canadians. So at some point, you can’t have it. So

Erwin 1:13:16
you could partner with Canadian then

Unknown Speaker 1:13:20
my corporation is Canadian, so I could keep it

Erwin 1:13:24
and you can keep your corporation if you if you leave your tax residency.

Speaker 2 1:13:28
Yeah, just that your corporate taxes go up. So you’re more at 25 Because you have no personal tax so they just capture the taxes in your corporation.

Erwin 1:13:38
So fascinating. Yeah. This has been enlightening for me.

Unknown Speaker 1:13:44
Yeah, a good

Erwin 1:13:46
listener finds this just as enlightening. First of all, thank you so much for doing this. Hope you enjoy Costa Rica. Hopefully it doesn’t rain. Too bad. Oh, I saw the lightning. Lightning flash.

Speaker 2 1:13:55
Yes. Yeah, it’s really getting scary, but there’s usually a few minutes and then it goes away.

Erwin 1:14:00
So okay. Yeah, but you’re scary is not hurricane scary. No, no, it’s

Unknown Speaker 1:14:05
just very loud. Thunder really loud.

Erwin 1:14:09
Yeah, better ever. It’s warm. It’s gonna snow here soon, so I have no problem for you. First of all, thank you again.

Unknown Speaker 1:14:19
Thank you have a good rest of your day.

Erwin 1:14:21
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.ca/youtube To register for our next class. Then links 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, my guest and if you’re just starting out, feel free to ask questions and comment below. And I’ll do my best to answer each of those comments and questions myself. Again, if you’re ready to learn the nitty gritty about real estate investing from a professional investor register for our next virtual class. That’s at Investor training.ca/. Hey Youtube thanks again for watching see you in the next video

** Transcript Auto-Generated**

Erwin 0:00
Hello, welcome to the truth about real estate investing show. My name is Erwin Seto, this is the number 81 ranked podcast in the world in the business category per iTunes. No idea how that happened, some dumb luck. And we’ve been going since 2016. So anyways, we’re finally here, this week’s an exciting one for for us here at my business, I’m in real estate, as I am a big fan of sharing investment strategies that I believe will help people and I’ve done a lot of research, in all points to the fact that financing and investing in specific markets in the USA make a whole lot of sense. I actually just got off the phone with my with our loan, JV partner that I want to sell the property that we call them together. Because our insurance is up $500, our property tax will go up somewhere near the same amount next year. In who knows, after that, where that goes in that a move of our capital to the States makes a whole lot of sense. She agrees and will speak to her accountant, which happens to be cheering my wife on how she may do the same in following us to invest in the States. Houses are honestly just so affordable in the US that we actually do not plan to partner going forward, I actually encourage her to not partner with us because she doesn’t need us. And it’s actually quite easy if you know what you’re doing in order to buy houses that cash flow. In the end, we’re talking about the 100 to $300,000 range, so we don’t necessarily need each other in order to capitalize a 100 to $300,000 property. Yeah, it’s just that affordable. So goodbye to rent control, socialist business environment, here in Canada, the landlord tenant board, which is pretty much broken. And of course, the Residential Tenancy Act. Back to the happenings of this week and what’s going on. On Saturday morning, October 21. I will be hosting our first ever us investing workshop in partnership with my friends Andrew Kim and share his company share which is a tech based us real estate asset manager and the only Canadian lender that I know and Scott Gilliam of lens city, who announced just last month for the first time ever at our September meeting that his mortgage broker brokerage can now called lens city can now offer mortgages on US investment properties. This, yeah, that’s big news. Because again, I’ve been at this for a while. And this hasn’t been available as far as I’ve known. And also on scale. Scott’s talking about one can have like 1015 properties as long as, as long as the rents make sense. Yeah, 10 to 15 properties. Here is we’re gonna talk we will be talking about that more about that in detail at our us investing workshop. Again, the stars are aligning, especially with the way things are going here in Ontario, in Canada and obese or my PC friends are having not as bad issues as us in Ontario, but pretty bad still between affordability and tenant rights. Alright, so for you my 17 listeners, there’s gonna be more options for investment. And again, it’s not under a socialist government without rent control, and I can diversify my earning income into US dollars and sunny destinations. Yes, I know, I know some of your listeners are interested in Alberta investing. I know Alberta is all the rage Calgary is a lovely city. And as my Alberta friends tell me, Alberta is the Texas of Canada. But getting mortgages for me is easier in the US and likely for most people will be easier to get mortgages in the US than here in Canada. So why not just invest directly into the Texas of the world, no need to settle for second best on a personal messing front cherry and Irish trying to sell some of our portfolio here. We’ll have listings going up this month. And next. Specifically, these are our student rentals that are selling in Hamilton in St. Catharines. In order to take profits, pay down some debts and raise capital for our planned investments in the US. This is the slowest fall market. I can recall in my experience since being a realtor since 2010. But thankfully, our student rentals are in massive demand still, the there’s just so little supply. I think you’ve we’ve all seen the demand coming from international students. And there’s gonna be there’s gonna be rich parents out there that want that home for their kid. Because I know I do the same for my kid. I’ll keep you all posted on my journey, including my research findings from my visits I’ll be on I’ll be in Atlanta sometime soon. And I’d like to get specific dates for personal security reasons. But I’ll be Atlanta, Georgia, Ohio and Texas over the next three months. It’s a lot of work and travel. Thankfully, I’ll be with my fellow real estate entrepreneur friends. So we’re gonna have a lot of fun on this journey. And I can’t wait to love that I can’t wait to learn more because I love to learn, share my findings and help more people along their journey towards financial Pease, there are tons of inflationary pressures on the way if you don’t, if you attend any Mario when meetings, you know exactly why, because we share, I share my research they’re hard assets and cash flow are ones main defense against all this inflation that’s coming. And I’ll always be on the hunt for the truth about real estate investing for my fellow Canadians and you my loyal 17 listeners. on to this week’s show, we have the lovely Lana Gorjuss on the show, her asset management company and V Property Management since 2005. They’ve grown credit, they actually manage 168 units, including 32 of her own units. Her portfolio is incredibly diversified, including across the property management company from Ottawa to way up north like Innisfil and beyond what’s North Simcoe County to to Campbellton in Branford her portfolio is also diversified as she owns a commercial flex space, which is more recent, although remember her more recent acquisitions in Richmond Hill, Ontario, and also she has residential property, specifically apartment buildings in Cleveland, Ohio. So, again, I always love to learn for people with a lot of experience. I particularly enjoyed our conversation around investing in around in and around Cleveland, Ohio. Peters is the founder of stilettos and hammers a networking education Real Estate Investment Network for investors at every stage any and every stage. They even have the the host social events as well. So actually they have an upcoming event, a Halloween social on October 26. At night in a topical Ontario, I’ve got link in the show notes. Or you can go to our website, stilettos and hammers.com. So that’s all spelled out stilettos and Andy hammers plural.com. So you can go there go into her events and you’ll see where you can get more details and buy a ticket for her Halloween social. My plans to be there. I haven’t settled on a Halloween costume. But I’ll figure something out. So again, back to this show. Lana shares her journey on a strategic growth of her business, slowing strategic growth. And so there’s no get rich quick stuff here. How she built her portfolio in partnership with her commercial contractor husband, we discussed the state of today’s market now she she as a professional real estate investor is with along with her established Power team. Hello, she will invest going forward, also where she recommends to more beginners as well. When I came to Canada as an Iranian immigrant at a very young age, so be prepared for what I consider an very inspiring example of what dedication, knowledge, talent and hard work can achieve. I give you the Nick Lana Gorjuss

Hi, Linda, what’s keeping you busy these days?

Speaker 2 7:51
Oh, geez. I don’t know where to start. Property Management. Slips and hammers flex space crew

Erwin 7:58
already know when to start your kids too. I do I have one daughter, just one in a hyperactive husband.

Speaker 2 8:05
Yes. Husband, who has many great ideas and likes to create things. Help me keep them alive.

Erwin 8:12
So I’d like I mentioned before we’re recording, I just finished Elon busca book. So I’m very formal of not being an engineer is like planting seeds with the kids like you know, you know, Elon, engineer, right?

Speaker 2 8:24
That’s so funny. My daughter has been identifying as an engineer since she was two. What did you do? Tell me the secret. My husband’s an engineer. And she loves the idea of building things. So from two she’s been telling Mama, I’m an engineer and daddy’s an engineer. And you’ll say okay, honey. So what does mommy do? Mommy’s the cooker. Okay, that’s, that’s what I do. I cook and then she says, and sometimes you helping you clean. I know. It’s okay. It’s all she sees. Right? I pick her up, I drop her off. She doesn’t see me actually working. But she sees her dad always working reading the drawings doing what it is. You don’t take her on site. We take her on site, but they’re usually daddy’s construction sites. I run the property management company. I run you know, all the other stuff. So she knows mommy does events. So she has really fun parties. And then she cooks and she cleans and that’s it. And every so often crazy tenants call her. That’s what she knows. That’s what she knows. But she doesn’t understand what that means.

Erwin 9:23
You’re taking her on for property management? No, no, it’s a dangerous one.

Speaker 2 9:29
Part of it is also just I don’t want her I don’t want my child exposed to unpredictable tenants. Okay, we can read into your hands on the area that you’re in. Some of my tenants are wonderful. And then some of my tenants are not. So generally speaking, I won’t take her with me when I’m on like, I’ll take her to the vacant units. I won’t take her when there’s actual tenants. I take her with me to showings. Yeah, so that she’s experienced so she knows when we’re going to show units and she knows people are coming and they want so then show me Corona assessments every so often if Oh, you know me, that person didn’t smile, and that person didn’t look at me and that person didn’t say hi. So she has her own little radar, but I’ll never take her when it’s an occupied home. And you also don’t know what they have animals

Erwin 10:14
and bugs reached. rethinking my parents. I’ll take my kids for signings. Oh, yeah. And it’s like, always on their best behavior.

Unknown Speaker 10:26
Yeah. Oh, yeah. See, we do that all electronically.

Erwin 10:29
We still want to meet. Because because I don’t do the showings. Okay, that’s my last my last chance to fail.

Speaker 2 10:37
Yeah, no, Fair enough. Fair enough. Absolutely. No, absolutely. You need to have a feel and a sense for who they are. That’s 100%.

Erwin 10:44
Yeah. Enlightened. Like, I’m there for the like, I looked at the single queue report, I would get, you know, I need the whole story and everything. Yeah, yeah. Before I go. Yes. I don’t want to make the trip out either.

Unknown Speaker 10:55
No. It’s not worth it. So

Erwin 10:59
property management, yes. Is the how many? How many of the units are for clients? And how many of your own and then how many? Oh, Jesus.

Speaker 2 11:05
There’s 168 units? 168? Yeah. Okay. I think I think we’re at 168 Ah, trouble.

Erwin 11:13
Keep counting mine. And I’m just barely double digits.

Speaker 2 11:19
And then I’m trying to I have to go and do my math backwards. So 3030 32 I think it is our RS and then the rest are for other clients.

Erwin 11:30
And uncommon is for property managers to manage multiple cities. Yes. Because like you’re in the end is probably like four hours. Maybe less than that. Yeah.

Speaker 2 11:41
So I’m central I’m in the GTA. So going out to Niagara Falls is about two hours Ottawa is for Cornwallis for Barry, depending on the traffic will be an hour and a half from where I am. Brantford is about an hour and a half.

Erwin 11:54
So you have boots on ground and all these cities.

Speaker 2 11:56
So the way that we work, so we’re very automated, which is why it works. So my husband is he’s an engineer. He’s a very technical individual. And he’s all about systems. So he designed system. So everybody uses an online portal. I’ve got a service manager in each location boots on ground, and he has a team of trades, handyman and whatnot. So I only deal with my service manager, I don’t deal with all the little traits. And then we’ve got leasing agents in each of the cities. So they deal with the showings and things like that. But I do all the tenant screenings. So all the applications come into the office. So because of that I’m only ever really dealing with two, maybe three people in each location, tenants have to submit everything through an online portal, if there isn’t a work order that’s been created work doesn’t get done unless it’s an emergency. And then the emergency calls also are designated to the area that they’re in. So when the tenants call into the line, they choose the city that they’re in, and then they can, and everything kind of goes up that way. So it helps a lot. It alleviates a lot of the manual processes. And then because of that, and because everybody knows, right, my trades all know you have to submit pictures before and after no pictures, no payment. And then the work orders because it’s all kind of logged, if you close a work order, the tenants actually will come back and say, you know, wasn’t done or the work is incomplete. And they’ll send pictures. So we always ask for tenants to submit their pictures, the trades to submit their pictures. And because of that, we end up with a lot of accountability on both sides. So we have a lot less situations where people are being dishonest.

Erwin 13:30
Yeah, cuz yeah, because I do the same thing with my tenants. I’ll pick I’ll ping them once in a while. Like, hey, the bathroom was done. How did it look? Yeah. All right. Funnily enough how often they don’t reply.

Speaker 2 13:41
It really is unless there’s a problem, right? Problem. It’s never ending we just we’re have we have a property currently being read down, renovated, the tenants were there eight years, I think. And the painters sent all of their pictures. And then my service manager went in last night to look at that. And he was like, Are you okay, with the way that they painted? I’m like, Well, you know, physically, I haven’t been there wine. He sent me 21 photos of like, just horrible work. And I sent them to my I said, Do your painters really good at taking photos? He’s like, alright, and he sent them all to him and today to clean it up. So if you’re not on top of it, and you don’t have those systems, it will be very difficult to manage very difficult.

Erwin 14:18
Because there’s gonna systems are like literally as good as the people at the team. Oh, I agree. Yeah, I actually just heard that was a Steve Jobs, quote, his greatest achievement is not any product. It was the team that built those products.

Speaker 2 14:30
I can completely understand that. It’s very hard. It’s very hard. If you don’t have good people,

Erwin 14:35
where do you find the good people?

Speaker 2 14:37
Like God? Interestingly enough, a few of our service managers used to be our tenants, many, many, many, many moons ago. So and it’s funny because there are a couple of my trades like plumbers and electricians who are also my tenants when they were in school and doing their apprenticeships and things like that and we gave them an opportunity to work and now that they’re like Master electricians or you know, certified plumbers and they’ve got their companies they still work for us. Yeah, I’ve got a few tenants i, so someone researched them and they approached you or so what would happen. So in the beginning, when it was just us and just our portfolio in our properties, right, sometimes it was easier for me to just pay my tenant to go and do the work, because I knew that they could. And then my tenants would outgrow their spaces or whatever else. And then they would ask if we needed any extra help, you know, because they want to make an extra couple dollars here and there. And as you grow together and you realize that you work well, they understand your ways. It just it became kind of an okay, so now let’s give you another level of responsibility. Okay. Are you willing to now do this because they’re already locally there? They know the market people know them? We trust them. It just worked out really well that way for us.

Erwin 15:47
It sounds like almost a strategy. So one should intentionally do rent to trades. Students. So

Speaker 2 15:53
the students Yeah, absolutely. And it helps, right? Because they have a certain like, I had a tenant in one of our triplexes. Just Sunday, would they study? Yeah. So Sunday, they sent me a photo, there’s a huge bubble of water coming through the paint in their bathroom. And they messaged me at eight o’clock in the morning, by 11 o’clock, everything had been resolved. So the guy upstairs, something was wrong with the speedway on the toilet, he shut off the water, he went to Home Depot, he got a new Speedway, he connected everything, the tenant downstairs, opened up the walls to let everything dry out, everything’s good to go. And I was like, Okay, well, you know, send me the cost of the materials for the drywall on the paint, and we’ll reimburse you. And that’s it. So it helps to have people who know because then it alleviates a lot of the phone calls. But you can’t always you know, control that. And right now, we’re very fortunate my husband runs a commercial construction company. So we have a lot of trades who apply for work there. But they’re not certified. They don’t have to write tickets or things like that, but we can use them in the management company. So we are able to that and take them and place them in certain areas because he does quite a bit of projects in the regions that we manage as well.

Erwin 16:58
But it’s because your husband is because your business, your husband’s business. I imagine they go well. They’re they do large projects, generally go pretty much almost anywhere they do and is that why your portfolio is like,

Speaker 2 17:10
No, my portfolio is spread out because my clients as they were growing their portfolios. So when we were in Ottawa, so Ottawa, Ottawa Valley, Cornwall, that’s where our entire portfolio is, which is why we started out that way. And then we started managing property for other clients that were in the area. And then, you know, 2008, Hamilton became really sexy. So I had a lot of clients who were going out to Hamilton, and they would ask, you know, do you offer service in Hamilton? And it was like, Well, sure, but I need about 10 units minimum to be able to set up a team and this and that, and they just grew that way. So we ended up with, you know, clients expanding to Hamilton to Brantford and then I had a real estate agent friend of mine who had access to pre construction in Niagara Falls. And I ended up with clients who purchased like 10 townhouses out there one afternoon. So because of this at all, kind of we expanded with our clientele. And it’s just and then once you’re in the area, you know, people get to know you and then you expand and you grow. And it’s just all organic that way. It’s just been fun.

Erwin 18:20
Loaded question. What do you think your focus is these days? Crew stiletto in,

Speaker 2 18:25
so my focus folio? I know. So our portfolio to be completely honest, our portfolio kind of runs on autopilot. I’ve got long term tenants. I love them. I love the fact that they’re long term tenants. So nothing,

Erwin 18:36
nothing crazy. Not crazy, but nothing more hands on like, no MB or midterm. And we don’t cottage rentals?

Speaker 2 18:44
No. So we do do short term, but in the US. So we do have a portfolio out in Cleveland, and we do do short term out near the Cleveland Clinic. It’s like for traveling nurses. So at the Cleveland Clinic, they have a lot of very specialized health care programs and whatnot in the US, right. And they’re one of the best,

Erwin 19:03
like the biggest name they are. And I think health care. Yeah, I hear people fly in from all over the world for health care treatment there.

Speaker 2 19:11
And so doctors and nurses, right, so depending on the complexity of what it is that they’re doing, they might be there. They do a lot of training there. So if you’ve got specialized like, or nurses, things like that, they’ll come out to the clinic to get trained. So these individuals will look for short term ish rentals, right? So three midterm, I should say, three months, six months, whatever. So we do cater to that but on that side of the border, not over here.

Erwin 19:38
That’s the only thing you’re doing in stateside now.

Speaker 2 19:40
Stateside, we flipped. We buy multifamily. And we also have single family long term rentals. We’re staying away from the single family just because the market is at a point now where it makes more sense to buy the multifamily from a cash flow perspective and then we flip the singles because there’s still quite a high yield on I’m out that way.

Erwin 20:04
So we’re gonna grow your portfolio.

Speaker 2 20:05
Probably in the US right now. Yeah, yeah. Yeah, I’ve we probably would. We’ll develop out this way. So we’ve got quite a few properties that we’ve owned for going on to like 18 years that have development potential. So we’ll focus on that.

Erwin 20:22
What are the acreage is are they trying to like garden suites? Were you talking?

Speaker 2 20:24
No. So we’ve got like, let’s say triplex is on very, very large, deep lots that we can tear down and put up six, eight units. Oh, we’re

Erwin 20:32
gonna tear it down. Yeah. Oh, yeah. Yeah. So

Speaker 2 20:35
one thing we’ve learned, it’s so much easier to start from scratch than to try and rebuild from the inside or extend or expand to existing when it’s older. These are older, older homes, some of them were conversions. They weren’t built for purpose. So we have a few of those opportunities. And then we’ve got partners with land and you know, commercial spaces that have developmental opportunities here in the GTA as well. So that’s our focus on this side of the border. And then that side is where we’re flipping and looking at multifamily.

Erwin 21:09
So I need to I need to back this up because we do have many novices that listen to the show. Would you take on such a project triplex tear down to put up a eight nine Plex if you’re if you weren’t in the business of commercial construction?

Speaker 2 21:21
No. Like not, if I’m starting out today, short, 20 years later, even if we didn’t have the commercial construction company, we have the contacts that we would be able to do it. But if you asked me like 15 years ago, if I was willing to tear down my triplex to build an eight Plex, knowing a little bit too much for me, unless you have the right team there who can do it for you, you know, I probably prefer I mean, in my world, if you asked me right now, I’d much rather find ways to, you know, not actively invest in real estate, I’d rather just, you know, be the bank and find other ways to just not have to do as much work as you need to in the beginning. But definitely, if you have the right team, sure, why not. But not as a first I wouldn’t.

Erwin 22:05
Do you take out say I had a host on a lot. Yeah, I don’t. Because I think I find generally investors, the vast majority don’t want to do heavy lifting. I don’t blame them. And there’s many there’s many parts of heavy lifting that require a lot of skill. Just the financing piece. Yeah, there’s a lot of financing skill. Yep. And then not many people have had to wear that hat. And then the construction side is another hole at no time even before that, yeah, getting your

Speaker 2 22:34
permits permitting the drawing years. And it depends on who you have. So we had a illegal basement unit in Hamilton in the area that is now up for licensing that my client bought and we needed to legalize the suite. Unfortunately, the agent that represented her was not yet aware of the licensing program because it was very new at the time that she purchased a duplex or triplex it’s a bungalow with a basement. I think

Erwin 22:59
I know who it is. Guess who told her what she told her was a problem.

Speaker 2 23:04
I told my glide do but it’s all good. So interestingly, when we came time to legalize that sweet Dee draft or architectural firm, whoever it was that my client brought in was like, Oh, my God, we need to redirect the stairs. And we need to put in a window here. And we need to do this and we need to

Erwin 23:23
move stairs. That’s usually that’s usually big money. It was like

Speaker 2 23:27
it was going to be almost 100,000 We had to bring in a steel beam because the ceiling height wasn’t there. And we didn’t want to do this. And we didn’t want to do that. And they’re going holy moly, like what the heck is going on? And it just turned out that she’s not aware of you know, we’ve got Bill 23 We have changes. This isn’t a five year new home. It’s an old home, like we don’t have the same restrictions. Bring in another team, from permitting attainment to closing the permits, it was like 12 weeks as fast. Yeah, because you could take advantage of the fact that it was already existing. There were minimal things that need to get done right now. So your team is very important. Very underwater. 100 Yo, your realtor is probably one of your most important because

Erwin 24:14
it’s the person I think it is. I was embarrassed because she said like, Oh, my realtor owns a property in a neighborhood either. She still didn’t know about licensing was coming.

Speaker 2 24:22
That’s terrible. It’s hard. If it’s your team is gold, like your team is gold. They can really put you in trouble or they can really really have you propelling ahead.

Erwin 24:37
Financially thank you for sharing because about the you want things to be more passive. Yes. Because I think that gets away from some people. I think so. I find some people are just like, wait. Me Maybe it’s part I don’t know what it is. I think some some people just think the harder I work, the more returns it’ll be.

Speaker 2 24:55
And it’s not a sexy to say, you know, I’m passively invested in 10 million dollars worth versus I owner and portfolio of, I think but it’s what we do. I talk about it at stilettos and hammers all the time. I’m like, ladies, the goal, the end game is to be the bank by now but your goal when you retire is to be the bank you want stable, predictable. You don’t need fluctuation, unpredictable maintenance and unpredictable tenants and

Erwin 25:20
I just lose money. Yeah, it’s not

Speaker 2 25:23
a it’s not an easy game, right? It’s not an easy game. And depending on your risk tolerance and where you are in life, the I personally think that the passive route with the right people is much more beneficial,

Erwin 25:37
right? So again, like, oh, I guess no one gets your questions in advance, who’s the person who should be developing property tearing down a house and Bill putting up into multifamily?

Speaker 2 25:49
Who, um, it depends on who it is that you’re dealing with. So I would say somebody who is able to manage and handle surprises with ease. Somebody who doesn’t get easily stressed out doesn’t suffer from you know, major types of anxiety because it’s unpredictable. Obviously, you’re tearing down. So you get rid of a few of the unpredictable kind of aspects of it. But it’s still you don’t know, right? When sometimes the inspector doesn’t show up, and you’re waiting for an inspection before you can move over to next phase. And like, all of a sudden, boom, sorry, two weeks too late. So I think that personality wise, you need to be able to kind of go with the flow. It needs to be in my opinion, somebody who has a cushion enough, where if the money isn’t cashed out, let’s say it was an 18 month estimate for project completion, if 18 months hit, and now you’re freaking out, I don’t think this is the right thing for you. Because there will be delays. Yeah, and then there will

Erwin 26:52
always be delays. And you’re always over budget.

Speaker 2 26:55
Yeah. Always, always, it doesn’t matter how good you are, there’s always some sort of surprise. And then you need to have a team, you need to either yourself have the technical know how to be able to manage the team. Right? Or you need to have the right people in there who can successfully complete and if you don’t, it’s not worth it. Like don’t, don’t do it, because learning as you go is very, very expensive in this type of situation. Very expensive.

Erwin 27:22
The term due diligence used a lot, but I think people need to expand on it when defined due diligence. So for example, I had a client who’s looking at doing a build, like, it’s like, it’s over 30 units, they’re gonna build they’re trying to build, and they refer to builder. I said, Okay, what do you know about them? How’d you find them? What kind of reference checks? Are you done? Like, oh, I started speak at stage. And they were referred to me, like, great. What else? What’s it? What else do I need to do? I said, go speak to 10 other past clients,

Speaker 2 27:49
or check, Terry on how many reconciliation files have gone in there. How many times have you know, clients had to go in and bring Terry on in just to get warranty work done? It’s important.

Erwin 28:00
But again, like, I think that just because you see someone speak on stage is not enough due diligence.

Speaker 2 28:05
No, definitely not at all. And we’re in an environment right now. We’re speaking to people and you know, putting yourself out there as an expert is so easy saris, like, you know, that you have to be extra diligent, you have to be and you know, the last I don’t know, I don’t know about you. But from my view, the last maybe five or six years, it’s been very easy to make money in real estate. We’ve been in this uptick. So anybody, and their brother could buy a property and sell it a year later and make 2030 40% depending on where they were buying. So there are a lot of people who rode that wave, and they come in to be experts and to show you how to do things. But they themselves don’t have the systems in play, because they didn’t have the same challenges to kind of get into the game and it can become dangerous, right? The blind leading the blind, because this

Erwin 28:53
market that we’re in right now, I’m already talking to a friend of mine, Aurora comparing this to like, 1990. Wow. So almost none of us invested through it. And then people need to at least start looking back at what happened back in 1990. Yeah, right. That was like, it’s not the same. It’s not the same, because there was massive oversupply. Right. Crazy speculation. Houses and condos are built been paid for by investors. No one was moving in the wind enough to meet tenant demand. Yeah, not like today where? How was tenant demand?

Speaker 2 29:25
Oh, it depends on where you are. Interestingly, to met tenant demand is huge quality of tenant is not. So you know, I’ll get just even on a basement apartment, I’ll get maybe 30 to 40 inquiries a day. And out of that, maybe one would actually be qualified to view the unit forget, like going through an applicant just

Erwin 29:47
what city what city? What was it? What’s the rent?

Speaker 2 29:50
So right now, as an example, I have a unit in Hamilton, right? Yeah. The mountain. Yeah, it’s a really nice part of the city. Little bit day It it’s an older home good quality well maintained, but it’s older, massive lawn main floor three bedrooms single bathroom at 2495. tenant pays all the utilities.

Erwin 30:11
Yeah, so speak was top market.

Speaker 2 30:13
Yeah, it’s not. It’s not the cheapest house, but I mean, what you’re getting with it, obviously, you’ve got a huge space, you’re in a really nice spot. You know, it’s still very accessible. But it’s like, what I’m getting from tenants is, oh, it’s me and my brother and his wife and our two cousins, and we’re all going to move in and split the rent. It’s like, wow, six, three bedroom into three, six adults, two children,

Erwin 30:37
you know, the basic tenets of love all those footfalls? Right.

Speaker 2 30:39
So we’re getting a lot of a lot of that. And I understand it. Affordability is challenging. So people, good tenants who have a house to themselves, like good tenants with affordable units. They’re not moving, because what am I crazy. And then you’ve got people who have to leave because the landlords have to sell or whatever it is, it’s going on, like even Metrolinx is buying all this property. And they’re trying to place tenants and yeah. Oh, and it’s funny, because they will guide the tenants to withhold certain pieces of information. And it’s terrible, because they need those tenants out of those properties in order to be able to continue down their path. So it’s it’s challenging, the demand is there. But there’s also quite a bit out there as well. Like, there’s a lot of units coming to completion, a lot of conversions that have been happening garden suites that are getting added in that city that make it very competitive. So it’s not as easy as people would think. Or it’s not as easy as it was last year.

Erwin 31:36
Because on the flip side, so how many showings do you think you’d have in a week?

Speaker 2 31:40
Oh, goodness. Okay. So I’m very particular about how we do it, because you don’t want to bother people. So we do three days a week, and then we’ll do I’ve had, I’ve had personally, I’ve gone into Hamilton on a Saturday, and I’ve had 32 showings in a one and a half hour period

Erwin 31:56
in one house in one house. Okay. So I want to I want to I want to share with you what we’re seeing on the resale side. Yeah. So a friend of mine has a property $1.5 million in Burlington, your classic starter home? Yeah. Only 70 showings in the weekend. No offers. Right. So this is normally like any other time. Anytime last, like five years. Probably were sold already. Yeah. So that’s how slow this market is for resale right now.

Speaker 2 32:26
Wow. So that was Hamilton, like the unit that I’m telling you I had rented last year. And we would do maybe four or five showings in a day, last year. And now

Erwin 32:37
with rates high tenant demands is massive.

Speaker 2 32:39
It’s crazy. And it’s quite actually quite a few people who have come in who have sold their house looking to rent. So go, I don’t have a rental history. But I just sold my house and I got all this cash.

Erwin 32:49
Like it sounds okay. I’ll take you. That’s okay.

Speaker 2 32:52
Don’t pull my credit. And I’m like, You mean, don’t pull my well don’t pull it? Yeah. I was like, but don’t pull my credit. Because you know, I have plans in the next three to five years. I’m like, Listen two months and the 10 points that you’re going to lose. You’re good to go. But I can’t not pull your credit. I can bring you a copy of my report. No, thank you. It’s a strange market. It’s a very strange market.

Erwin 33:12
So Hamilton is just one example. Because we talking about it. Yes. They’re expecting to raise property tax next year by 14%. So the math on I own duplexes to in Hamilton so that math works at about $500 a year, per property. Yeah, it’s a lot. What do you tell your clients?

Speaker 2 33:30
So some of my clients, unfortunately, aren’t in a position where they can I have, I have a lot of clients who bought at the top of the market and Hamilton. There are some of them, where the only thing I can tell them is you need to find your reserves, because you’ve got to ride this wave. they’ve purchased properties with existing tenants. So the tenants are paying low rents, and those rents are not going to they’re not gonna increase in attendance not going to leave. So what we have been doing what we have been doing as management company is on turnover, right? We’re no longer including parking. So parking is now an additional fee, even though it’s Driveway parking, the tenant pays for that privilege. Nice. Well, you have to find ways, right? You have to find creative ways to do this.

Erwin 34:17
commercial lease then. Yep. So now,

Speaker 2 34:19
I can raise my rent however I want. And it’s always a separate lease. We do the same thing with garages. And then units that actually have the space and allow it we’ve installed like storage sheds for each of the individual tenants, because you’ll see and I’m sure you’re aware of many, many places, Hamilton, you’ll see that now these homes are being converted to Uptown, right? Basement, apartment, upper, maybe second level as well. So there’s no storage anymore. So we’re putting storage on the property and we’re renting that out. So we’re finding creative ways to increase cash flow where we can we’re replacing, you know, laundry units with them. coin operated as we can, or we’re moving into, there’s quite a few units that we’ve actually done this with where you’ve got these new ventless, all in one washer dryer combo units. So instead of having common laundry in the building, we’re putting these units when we’re renovating kitchens, because the tenant pays for utilities, especially the electricity, sometimes gas and water are included, but the hydro is not, these are all electric units. So it just decreases expenses. And we’re looking at ways of increasing income to help, right so if I’m charging $50, just for the parking, that will help offset that raise property taxes, if I can add a $60 a month $75 A month storage unit, because I know my tenants are struggling with the space for tires and bicycles and things like that. It helps

Erwin 35:52
I’m gonna invest in the States. Because I’m gonna get I know I gonna get resistance to all these things with tenants, because it’s not like we do on turnover is even still, probably the first thing I ever heard of it.

Speaker 2 36:03
Sometimes, yes, some of them, some of them have interesting things to say I use it as a tenant screening tool. Okay, you’re gonna be mad at me about this. My goodness, what would you do if we lost power? If there was a leak, God help us. But it is what it is. Unfortunately, you know what I mean? And I find that we have many tenants who are okay with it. And we put it in the ads. Like it’s not a surprise. Right? Like it’s very, we’re very transparent, very black and white. All of the information is there. We give estimates for the cost for utilities, we let them know that this right does not include parking. It’s like the first section of our ad is the summary, right? This is your rent? This is how many units? Is it the entire property or not? Parking included not utilities included or not? And then the cost for each of those things. So generally speaking, the people responding have read the ad and they’ve made a decision.

Erwin 36:56
I need to figure out a way to charge for street parking to know God, could

Unknown Speaker 37:00
you imagine that’d be great. I’d be golden.

Erwin 37:07
So what’s next thing? You said? You want to be the bank?

Speaker 2 37:09
Yes, I very much. We are already doing that. But I’d like to doing or we do lending. We do private lending. It works. Sometimes we’ve been very, you know, aggressive. And we’ve done high risk that was high returns, but a lot of headaches. So I think I’m okay with like headaches,

Erwin 37:27
if you will need to understand that can be headaches, we’ve had snow share headaches.

Speaker 2 37:31
We’ve done all kinds of things, right. So sometimes you’ll hear, you know, one side of things, which is like, Oh, you’re gonna hold a second mortgage. And the second mortgage is fantastic, because you have security against the building. And this is that, oh, what else? Okay, great. But you know, we did that. And then our investor didn’t pay. Yeah. And thank God, my husband, my husband is very much into like due diligence and reading contracts. Like I’m like, whatever, let me just graze this over, my husband will peruse line by line, like, he’ll sit there and he’ll read it. Thank God for him. But first thing he did is he contacted the bank holding the first and was like, Okay, I need to take over payments. And in the process of putting together the second mortgage, he made the investor, you know, give him permission to talk to the lender in first position.

Erwin 38:20
Well, if you don’t have permission, right, I want to pay you can you talk to me, right?

Speaker 2 38:25
So, but they won’t, unless this direction was given to them to quit. So thankfully for us, he knew how to do this. And we were able to take over the first mortgage. And because of that, we were able to keep that current and we were able to go through power of sale and sell the house to recover. But they don’t tell you that. So they’ll tell you. How long did it take to sell so thankfully for us, they they like up and left and went to Africa. So we didn’t have to get investor.

Erwin 38:53
Yeah. Oh, that’s that’s Oh, that’s nice. Yeah.

Speaker 2 38:57
So they have been left behind. They left the property vacant and so funny because they took like this, they sold the appliances they sold anything they could in the property when I know it’s okay, whatever do

Erwin 39:11
the previous owners. What was this? No, no, no, if you’re with us in power sales,

Speaker 2 39:15
yeah, it’s okay. So they did this all knowing that they were like, gonna, and then they defaulted on us first, because and again, my husband, God bless him. He was like, Okay, first mortgage is paid on the first, we want payment on the 15th. So they defaulted on us on the 15th. And we knew they would have defaulted on the first for the first. So my husband called them before that could happen and took over the payments. So the power of sale process altogether from the time that we serve the notice and then legally we were allowed to go in and physically take over the property. It was like 90 days, and then it took another 90 days to sell and close and do all of that. So it worked out fine for us. But let’s say if there were tenants in that unit or let’s say

Erwin 40:00
You were to, or you weren’t on top of it, and you you didn’t know, you were 100%. And now you’re first. We don’t know that. You have to be watching your account, make sure that money comes in, because that’s your that’s your your sign. Yeah, if you’re not watching it, then what are you going to do? If you don’t take it? I know people. So this has happened to

Speaker 2 40:16
it’s happened to us, it’s happened to us with our rentals, right? Like, there have been situations when, like, my dad was ill. And I didn’t realize my tenant had stopped paying rent until like, I don’t know, three months in, when I finally looked in the when I finally logged on, and it was like, wait, what? Or before we had the systems, right? If we weren’t checking the bank accounts every week, you don’t know or if you have a lot coming in, but they don’t like it’s one of those things. But nobody told us that when you’re when you’re investing in a second position, find out how much the first mortgages? And can you carry that? Can you carry it, because it sounds

Erwin 40:52
just so it was spelled out for the listener, you have to make payments to the mortgage half to so if your lender was a cash flow investment is now you’re talking like at least double the money at the door now

Speaker 2 41:03
at least until you get it under control. So now imagine used you have to get under control. It’s not like you, it’s you paying your lawyers until it’s done. It’s you paying mortgage until it’s done. It’s you if you have to, you know, replace appliances with these things. It’s all you,

Erwin 41:18
it’s now become an incredibly active investment. Very, very active as active but like I call active being landlord, yeah, you’re like, now you’re just your data, you’re in a day to day to get this deal done. Yeah, in order to draw money out.

Speaker 2 41:31
Yeah. So you have to be ready. And you have to have something on the side for just in case now. Is that gonna be

Erwin 41:37
to become a flipper, now? You want to be on the beach? payments.

Speaker 2 41:42
So it, but they don’t tell you? Right? So it’s one of those things like you need to know. So don’t go and lend $100,000 on a $10 million property with you know, 20% Behind you. Because if they default, can you hold a $6 million mortgage? Can you pay that? Just to recover your 100,000? Right, because you’re gonna do some work. Ours was minimal. It was like a $300,000. Mortgage. I think our payments were like 800 bucks a month at the time. Right? Not a big deal. Is that for us? Not a big deal. Right. But for some, but like for somebody like my mom, 800 bucks a month will kill her. Yeah. It could wipe her out. And then there goes your savings, right? Some people do this with RSPs, and things like that. So just be

Erwin 42:26
mindful, because you basically exited purpose. Good as clean as you can. Oh, yeah. made, I was still six months,

Speaker 2 42:32
in less than six months, we recovered our investment, we actually recovered these professionals. Well, he definitely weren’t, we didn’t start doing those things until probably 10 years into our journey. Also, because we didn’t have cash to do that until about 10 years ago.

Erwin 42:46
So we’re running out of time. Thank you so much for doing this. Thank you, especially on short notice. My pleasure. What’s what’s like, What are you teaching your daughter? Because the question, let me back up. Because the question is often like, the question is often that’s asked is like, what if you could do it all over again? What would you do? Right? But but the other way of asking you that is what are you teaching your kid.

Speaker 2 43:06
So the first thing that we are very focused on is to teach our child to trust herself, trust herself, trust her decisions. And if something is telling her that this is right to trust it and explore it, because I’ve come to realize that our instincts are usually right. It might need a little bit of, you know, further investigating, but usually instinct is pretty bang on. That’s number one. The second thing that we’re teaching her is that we live in a world where exchange is how you get rewarded. So what you give, and what you put out, will determine what comes back to you. If you’re not putting anything out there, you’re not gonna get anything back. And even if you do that thing that comes back to you won’t be there long. So you need to first go out and you need to provide value and exchange these kinds of things to other people. And then in turn, they will want to give back to you. That’s the second thing. And the third thing that we’re teaching her is that, you know, people who are earning a good living, it’s because they’re solving problems. So the bigger the problem you solve, and the more people that you help by solving these problems, the more money you’re going to make if that is what’s important to you. So you want to live in a big fancy house and you want to drive she wants to drive a Maserati, my dad bought her a little one for her second birthday. So that’s it. She’s going to have a white Maserati, and it’s okay, well, you want a Maserati, you have to earn a very healthy income and to do that you need to do these things. But if you don’t bring value into the world, and if you’re not solving a problem that’s helping others, it’s not gonna happen. So that’s what we’re trying to do and we’re just trying to make her remember that she has to be a decent human and You know, empathy and compassion are very important in this world, even if other people aren’t nice to you, you still need to be nice to them. And the rest of it will sort itself out. Right? So hopefully it works. She’s only seven.

Erwin 45:12
I’ll just add that the real estate, to bring it back to real estate. Because if you’re a developer, you’re building housing and you’re creating housing. Yes, I do a lot of basement conversions like creating a small amount of housing. Yep. I’ve created and I’ve created a lot of value.

Speaker 2 45:26
It’s a big problem that you’re solving. Housing is a big problem that nobody expected

Erwin 45:31
best in the universe. The problem is so bad.

Speaker 2 45:33
Yeah, buy. Every house that we add in, there was one person who may not have an option right now who has an option, right? So we talked about that to her a lot. People need places to live. So it’s your responsibility to make sure that if you want to do what mommy and daddy do, that the places that they live are safe, that the places they live are clean, that they feel happy. And, you know, it’s not just about cashing in a check. You know, these are humans that you’re dealing with. And it’s hard

Erwin 46:04
not to thank you again for doing this. Thank you. Thank you for having me. 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.ca/youtube To register for our next class. Then links 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, my guess? And if you’re just starting out, feel free to ask questions in comment below. And I’ll do my best to answer each of those comments and questions myself. Again, if you’re ready to learn the nitty gritty about real estate investing from a professional investor register for our next virtual class. That’s at Investor training.ca/youtube. Thanks again for watching. See you in the next video.

** Transcript Auto-generated**

Erwin 0:00
Welcome to the truth about real estate investing show for Canadians. Today, my guest is Andrew, he’s Canadian. He lives in the GTA, but he owns 20 income properties in the US. Funny enough, he’s never seen any of them. He is the CEO of a tech based real estate investment company called Share. I’ll have links in the show notes. They help everyday investors build a portfolio of fully managed rental properties in landlord friendly states in the USA.

Erwin 0:25
My name is Erwin Szeto. I am your host for time real truth of the year to investors with somewhere north of $400 million with real estate transactions under our belts 350 Plus investor clients who we help execute on burrs highest and best use positive cash flow investing. My focus has been on best practice investing ever since I started back in 2005. And in my experience, value investing, renovating for value. And investing for the long term has been the best strategy for my experience. And for most people most of the time. There are lots of newer strategies that are they do work. They obviously require a lot more effort such as like midterm rentals and cottage rentals. They’re great for people who want to be active business owners. Numbers are tougher than ever though.

Erwin 1:16
And my experience most investors want to be as hands off as possible.

Erwin 1:21
Why not? Why not earn money passively in one sleep, just like Warren Buffett preaches one of my clients who has been doing midterm rentals for nearly a decade. She’s extremely successful at it. For example, two of her properties are made the top five list for VRBO. In Hamilton for top grossing properties. She has to do business development work, she has to connect with and maintain relationships with local insurance companies and local employers in order to make sure that the flow of business continues to come in. She tells me it’s been tougher than ever. And that’s the truth about real estate investing. She is full. But again she hustles and she self manages and she meets tenants to him the keys for her for her Airbnb ease. Not everyone’s willing to do that. College investing no different has its challenges. Reliable cleaners and contractors are hard to come by in big cities, and they’re even harder to come by in remote areas.

Erwin 2:17
And so again, it is all possible within a skill and hustle.

Erwin 2:22
We’ve had plenty of guests on this show who have done just that. Just be true to yourself how much time and effort you’re willing to invest. My point is, there is no free lunch, do your own research, understand your own values and seek out the truth about real estate investing. Find out what works for you. For today’s guests, Andrew, he’s from Brampton. He has over 20 properties south of the border. And again, he’s never seen any of them. He also shared with me how wonderful his experience has been investing in entry level income properties in the US for as little as even under $100,000. For a whole house like a three bedroom one bath house via a program called Section eight, which assists low income housing. low income families afford housing. For example, rough the government roughly pays for 70% of the rate rent and is paid directly to the landlord, which provides the landlord and the real estate investor like you and I are more reliable in chemistry. The cash flows from these investments are typically better than anything I’ve seen here in Ontario. For example, cap rates are seven to 11%, which is better than any apartment building I’ve seen in many, many years.

Erwin 3:30
And again, these investments require a way less capital, somewhere in the range of 60 to 110,000. And again, that’s for a whole house. That’s less than many renovation budgets,

Erwin 3:42
let alone down payments for a house in Canada. I’ve written a blog post about it. And as always, I like to share my research. I’m not an expert on the subject. But when I do see great opportunities, I like to learn everything I can about them. Links will be in the show notes and in the email newsletter onto this show. Again, we have our guest today Andrew Kim. He’s got over 10 years experience investing in real estate he started in the GTA didn’t go so well because he was so busy, he couldn’t really handle manage them properly. The Cash Flow wasn’t there to afford a manager either. And then he went on to do build a portfolio of 2020 properties that are fully managed in a couple locations. Upstate New York, Florida. I think we’ve all heard of Florida, Atlanta, Georgia and Dallas, Texas. He’s a serial tech entrepreneur who has worked in Silicon Valley startups is now combining his passion for real estate investing with technology. Andrews company combines the expertise to handpick quality investment properties for Canadians in the US. Right, which includes writing offers, arranging ownership, structuring taxes, property management, financing partners, yes, Canadians can get mortgages to renovations and setting lease rates. It honestly doesn’t get more passive.

Erwin 4:55
And properties do again the generate enough rent to pay for top notch property.

Erwin 5:00
He basically it’s living the dream. In my experience, with inflation getting out of control, rent control, the uncertainty of receiving rent here in Canada, for mainly Ontario and BC investors, especially Ontario investors, I think it’s advisable even listen to this episode.

Erwin 5:17
And for those, for those who don’t know, we actually sent out a survey just last week on who was interested in receiving more information on us real estate investing 92% of you said you’re interested in attending a webinar, our workshop on the subject of real estate investing, and we collected a whole bunch of topics. So you asked, we will deliver, we are, we will be hosting a live in person.

Erwin 5:43
us investing workshop on Saturday, October 21, it’s just the morning. So it’s only three hours of your time, we will be doing this hybrid as well. So we do we are offering tickets for both in person, we are almost sold out of the in person tickets. And but again, if you for we literally had folks asking from BC as well, if we’d be if this would be available online. So yes, if you’re far away, you will have well, we will make this available to you online. So again, that’s a Saturday, October 21. So save the date, check the show notes in our website for links on how to register for that events. It’s we’re charging a mere $30. And it all goes to charity. So the content is gonna be incredible. We have, we’ll have Andrew and his team, including Carmen, who will be coming on the show. And also she is a CPA, she is a Chartered Professional Accountant on both sides of the border. So we will we will, we will be able to answer pretty much all your questions on structuring taxes. And also my friends got dealing him from lens city will be coming as well, because they just announced they’ll be offering mortgages to Canadians to invest for Canadian investors investing in the USA. So we’re going to cover all our bases. It’s just one morning your life, you do not want to miss this because again, 92% of you asked for this. So hopefully see you there. Again to follow. For anyone interested in following Andrew, we do have a website for it. We do have a shared website for it. It’s iWin dot share sfr.com. The SFR stands for single family rental. So again, it’s iWin dot share sfr.com. And you can go there to view current and past deals, you do need to sign up which is basically just given your email name and email address. They’ll ask you Where were you came from? If you just say or when are i when our truth about real estate investing, they will take good care of you. Please enjoy the show.

Erwin 7:45
Hey, Andrew, what’s keeping you busy these days? Oh, share my new company. It’s a venture backed real estate company, we try to help investors, both Canadian and American find high yield hybrid high returning rental homes in the US. And then we take

Erwin 8:03
a management role and we want to put your portfolio growth on autopilot.

Erwin 8:08
So first off, I want to say thank you for your service. I’m not military but I’ll take it

Andrew 8:14
it’s just because I know where you’re coming from. Like here in this business here I wouldn’t real estate we try to help the everyday investor as well.

Andrew 8:20
I think everyone knows the high our high net worth clients are the easiest to work with. Because they can purchase the cash right? And they can purchase many many properties. But I still want to help that pert that middle class person who doesn’t have family help. Yeah, to be able to acquire income properties. Yeah, and I understand your experience is no different. Yeah, high net worth people are way easier to work with. Yeah, high net worth people are easier to work with. You know, we love working with them. But you know, we our mission is really you know, financial security by way of real estate. And that’s why we got into it it wasn’t for the high net worth individuals for those you know, lower to middle that have are aspiring or want to target wealth for themselves and their generation after them their kids and they’ve saved up and accrued money to finally get into the real estate space. But you know, the failure rate in this world in real estate is pretty high, the risks are high

Andrew 9:18
with moderate to good returns so you know we are trying our best to mitigate those risks and actually help these individuals retail investors everyday investors Mom and Pop DIY errs to get in safely and start building their portfolio

Andrew 9:33
you know like that kind of goes back to my upbringing where it’s like I wanted to get into real estate and you know obviously now in Toronto just it’s much harder for someone to break in but I saved your millennial yeah I’m like at the tail yeah the tail end or tail the the very beginning of the millennial I think my or I guess that’s how you put it Yeah, last names Kim. So your your must be a crazy rich Asian. No, not at all.

Andrew 10:00
The I mean, I didn’t come from money definitely not low income family actually, probably what drove me to today. Parents were had some entrepreneurial attempts were not very successful and like what convenience stores? Yeah.

Andrew 10:17
I read the stereotype.

Andrew 10:20
Yeah, they added convenience store. We lived. Yeah, they first came to Canada. They lived in Rexdale, which is a Toronto.

Andrew 10:28
Toronto neighborhood. Yeah. And then I’ve gotten today. I my dad might have one we owned a convenience store. But I can’t remember but I remember there being like scares. But yeah, but in the like, they would give me this privilege kid lifelike, and all this extracurricular piano sports, you know, baseball, Kumaon, all this other extra stuff. And I’m like, looking back now that I’m a bear. And like, where’s this money coming from? Yeah.

Andrew 10:55
And yeah, like they declared bankruptcy when we were young. I remember them picking me up from like piano lessons. And there’d be duffel bags of clothes in the backseat? And I’m like, What’s this for? It’s like, just in case we get locked out of our house. Like get evicted. Right. And I was like, Okay, can we want to be Donald’s like, No, we got food at home, like, and also that was, and then as you get older in you realize that, wow, this is that that’s a lot of strife. And you’d see your parents arguing here, your parents arguing, and you’d never want that.

Andrew 11:23
To be witnessed of that and ever to repeat that. So that kind of I think, was some of my biggest drive for sure. It’s like, I want to eat McDonald’s every day.

Andrew 11:36
Exactly. I want to eat like everybody else eats out. Why do we always get to eat at home? Right.

Erwin 11:43
And you were pretty young. When you started that.

Erwin 11:47
You went to Silicon Valley, how old were you? Sorry, yeah, your first tech startup for you. So I’ve been in like, always had my foot into some sort of business online hustle, whatever it was. But my first real like venture backed like we’re outside investors tech company, was in 2011 was when I moved to first LA.

Erwin 12:07
Because we were in the YouTube Space in LA made more sense. We had a high a lot of high profile, angel investors, including like, its top executives from WMV, which is a notable like agency for actors. And then the CEO of YouTube was also one of our angel investors. So because we’re working with YouTubers la made sense. So we moved to LA and lived there for about four teen months of our family.

Andrew 12:38
So I was just married. So prior to getting married, I’ve my wife was my high school sweetheart.

Andrew 12:45
And she’s known that I’ve been entrepreneurial my whole life. And as we got serious, she’s like, You need to stop making these big, like swinging for the fence attempts, get a job, be stable, let’s buy a house get married. So quit my my first startup and then got a job. We bought a house and then my business partner reached out to me while my honeymoon is like when you get back, let’s talk. And then when he got back from our honeymoon, that’s when he had this idea. We started incubating it and then it was the same year that I moved to LA and quit my job. So she was not happy. She took the risk. So newlyweds bicoastal husband?

Andrew 13:24
Yeah, that was tough. I that’s the first I’ve heard that term bicoastal. Yeah. Because you were living on the West Coast. Yeah. My wife was in the East Coast.

Unknown Speaker 13:33
We don’t have a coast here in Ontario.

Unknown Speaker 13:36
We’re not doing it. There’s no Oh, Eastern Time eastern time zone. Because I wasn’t Victoria recently. And they call us East Coast and like, Okay, hang on. What ocean do we have? But with? Yeah. But I get it. I get New York’s were pretty much in line with New York. Yeah, New York is by different. Yeah, yeah. So she, she luckily worked from home. So she’d come out, spend four weeks and go back and forth.

Unknown Speaker 14:00
And then she eventually got pregnant. And then that created a whole new set of variables and risk. And then we sold the company. We sold the company to a company in the Silicon Valley in the Bay Area. So had to move up there. And now that I’ve sold the company, I don’t own my own schedule, I had to become an employee and then to earn out my stock because it was a majority stock deal. So I had to move up there working like six, seven days a week, 1214 hours a day newborn that’s sitting in Toronto, and you know, my wife could think Canada has 12 month parental leave, she could spend four weeks here back and forth, back and forth. But it was kind of miserable. So that’s why I said you know, screw it, it’s not worth it. I’ll build another company. So I quit left a bunch of stock and money on the table and came back to Canada in like 20 late 2014. Early 2015 Yeah, that was uh, but yeah, do have family. Yeah, exactly. Exactly. It was a hard pill to swallow because it came right back in winter. And I was like, I’m never coming back here. But good thing I kept my house good.

Unknown Speaker 15:00
You know, because it worked out for the better. Amazing. And then you you have been an Ontario landlord before. Yeah, yeah. I so my foray into real estate was just before moving to California, like the oh nine, like 22,009 2010, you know, read up among about the burst strategy found, like started looking at houses in Ajax and Barry, and at that time, you could get something like on the 300,000 price point for closed, dilapidated, put in, like 20%. CapEx, but it was work like, oh my gosh, and like, it really only penciled if you’re doing it yourself, like what I’m even doing is like self managing, like, there was no third party property manager, there was no line item for that. And my, my math was literally on pen and paper at that point.

Unknown Speaker 15:48
And I did that a few times, was intentionally maybe not looking at the numbers to tell myself I’m making progress. But it wasn’t until, yeah, I moved to California, and met my who is my now current business partner. She kind of she’s an accountant. And also in the real estate space. She’s the one that looked at my numbers like this is this is not a good investment. If you want to do real estate, let’s go look in Florida, right? And then just combine that with you’re out of town. Yeah. Young family. Yeah, you’re busy with the business. Yeah, you can’t be at an active real estate. Yeah. So I was living in California, she’s like, you gotta look in Florida, like you like, you’re here. Now you visa your tax ID number, like, it’s a lot easier for you now. And if you sell those properties, you could probably buy some of these cash and like, What do you mean, like, and it’s like, but like, how long is it gonna take for me to cashflow these things? And it’s like, well, as soon as we lease it up. So it’s like, Well, okay, well show me these properties. And you know, at the same at this time, you could buy something in Florida for $100,000. Like St. Pete’s pronounce count, like very well in our nice neighborhoods, for like, 100 110 you know, double digit net yields. So I was like, let’s go let’s do, you can get, like, over 10% cash on cash return with a 20% down. Yeah, yeah. Yeah. It’s nuts. It was nuts. These are unicorns. Yeah. So like, but no, these were all cash deals. But like, from like a yield perspective, it was very accretive opportunity. These weren’t desirable neighborhoods at that time. Right. And but what was the bonus was they like, look, I could get a property management company skimming off my rent, and I’m still not still cashflow positive, which for me, was just mind boggling. So

Unknown Speaker 17:39
knowing my typical all manner, I think you’re kind of the same way like, Oh, my God, let’s go. So to solve my units, bought a couple houses there, a few houses, and then kind of sat back. After I sold my company bought more. Now this was like, probably the my last purchase was like, 2013. And then that’s when I started moving to the Bay Area, worked with the company and then came back to Canada. 2014 15 may ask how many properties then you’re in the States? At that point? I think I had a bogey on. I remember, you’ve told me before, you’ve never seen any of them. I’ve never, ever seen. Okay. Please continue. How many houses do you hold? So now have over 20? Okay.

Unknown Speaker 18:21
20 hertz is never seen? Never, never again, how many times have tenants called you to fix something? So earlier on, it was it’s only it’s only ever property managers that has have contacted me, I’ve never, never dealt with a tenant directly. So, yeah, I’ve never dealt with 10 directly. It’s always a property management company. But even you know, even though the economics allow for a property manager, you’re still having to deal with them. And property management companies, you know, like their non razor slim margins. So if they have to go out to a house, like two times a month, it almost eats into the whole margin of that door. So you know, they don’t like going out for every single thing. They kind of like bundle it when they’re in the neighborhood, they can do that. But yeah, I would talk to property management companies, probably more frequently than I would have liked. Right. So just to clarify property management, because my experience here in Canada is it’s usually like, one person, maybe husband wife shop. Yeah. And they have some people that are may have contractors, right, like, so not people that are on staff even Right, right. But what is it more like? What’s the US? Yeah, so experience. And yeah, because of, you know, rental properties is is a major method of wealth creation for Americans, like it’s a $4 trillion asset class 88% are owned by mom and pop investors that own one to 10 units. So the ecosystem for like, sizable property managers from Mom and Pop property management’s to large institutional ones, run the gamut. Like you could throw a rock and hit two property management companies, because that’s not what it is like. Yeah, so like you

Unknown Speaker 20:00
Can like depends on how you want to search. But, you know, if you were to talk to your agent they could probably refer you to three property management company. So at that time the property management company we had there they would be considered a small one they had a couple 100 doors. Okay, there’s not that many around here Yeah, so like that would be a small and they do what’s what we do is called like scattered single family rental SFR.

Unknown Speaker 20:24
And then you know, they can move up the rungs of condos, whatever, but they those would be called your mom and pop shops then a couple 100 And then there’s a very boutique smaller it’s like a contractor but they have a software we can plug into it, I can log into the portal and take a look at things

Unknown Speaker 20:42
back then there that wasn’t as readily available, but it is today for Mom and Pop property management companies. So my experience investor with investors here in Canada is that you know, that on the on the less on the less expensive, more affordable end of the scale is like condos.

Unknown Speaker 20:59
If the unfortunately bought last two, three years, they’re negative cash flow 1000 or more.

Unknown Speaker 21:05
And then so like for example, in my business, we’ve always, we’ve always been more aggressive like so when we started back in like 2005 We bought we bought a lot single family homes, we can cashflow them, and then when we couldn’t it did student rentals and then let’s duplexing was available then we did those as well. understand all these have very significant renovation budgets, right? A basement suite apartment for example. Our our retail price retail price from general contractors has about 160,000. Right because it’s an invasive renovation. Investors market for for for that. So these houses that you own, are they what kind of properties are they apartment buildings? They they’re all single family. I got a couple of duplexes in there. But like I use duplexes loosely it’s like a house with you know, basement I guess you can call it a duplex, you know, top floor and main floor apartments but majority they’re all single detached homes and then your Airbnb in order in order to make it cashflow. Nope, they’re all long term rentals. They are the sort of single family the US single family is definitely long term rental is the safest real estate asset class in the world. My opinion.

Unknown Speaker 22:18
You know, they’re obviously got modest yields. And then you kind of got the risk level you can do short term rentals, Airbnb, higher yields, but higher risk. But in terms of plain vanila risk, and resiliency is the single family long term.

Unknown Speaker 22:33
I just find because I watched too much social media is that there’s all this hype behind Airbnb. But I don’t know if people realize Airbnb property managers usually take 23% of your rent. Yeah, yeah. And Airbnb takes them to Yeah, so like when we underwrite, like when I pencil sort of Airbnb opportunities, like, yeah, there might be some local boutique agency that will charge less but just for the sake of the exercise 20% on your revenue is kind of where you want to mark it off. Just like if you’re going to underwriting property management in like a mid tier market, mid mid cost market in the US, like you could roll with it. 8% is probably soft, right? Accuracy. Yeah. And then the alternative assets and friends who just who rented to the property management company, so they are Airbnb arbitrage the lingo. But then I’m just getting regular rent. Yeah. And still negative cash flow. Yeah.

Unknown Speaker 23:28
What am I doing here? Yeah, that’s why, like, I, it’s hard to make those things pencil. And in the turn rate is pretty high, the risk is hard, because you got very transient tenants, right? Like, it’s, you don’t know, if you’re gonna get one party in there, that’s just gonna ruin stuff. So your RNM line needs to be a little higher. And, you know, you got to be very cautious about that.

Unknown Speaker 23:50
A lot of people don’t even have proper insurance. Yeah, so they’re understanding like, they’re worried what if the insurance company doesn’t pay? Yeah, yeah. And like, and the reason why I’m like, kind of risky, but now kind of thinking about some short term rentals is one the pandemic really wanted, like, it would have been really nice to have a short term rental to kind of dip into in somewhere hot. So it’s more of a personal spend, but they did take a massive hit. And, you know, if the market goes downwards, you know, short term rentals vacation discretionary spend will go down. So that’s, that’s problematic for me, like, I don’t like that kind of risk. And then here more locally, as well as when clients who are property managers for vacation rentals and they’re sharing with me that all these all these pre construction projects that when they when the clients closing the property, they’re putting them on Airbnb. Oh, interesting. So we have because they need higher rents in order to cash flow, right. But my point is, there’s more supply. Therefore more competition for existing Airbnb, Robert Yeah. Yeah. And that’s what you saw like in Arizona to like in Arizona and Florida, certain Park pockets where there’s a lot

Unknown Speaker 25:00
lot of short term rentals, they got hit hard. Right, right and saturation cuz you got to compete now too, right? Like you go to Kissimmee, Florida and you kind of look on Airbnb, there’s like a million of them. Right, right. And then when it gets hits, it’s like a race to the bottom. We can lower the rates faster. My point, though, is that it sounds great. Yeah. But then, when you dig a little bit further, yeah, like, I don’t like competition. Yeah, it’s Yeah, exactly. Right. I don’t like people pushing my rents down.

Unknown Speaker 25:27
100% Awesome. At a stage in my career, like I like boring because I’ve done enough very invasive renovations. And, yeah, but yeah, let’s talk a bit more share in because I think the opportunity, like the opportunity today is like more important than ever. So first up, you saw my presentation that I gave to my to my meet up,

Unknown Speaker 25:48
property taxes are getting out of control. I don’t know what market is going to do. So for those who don’t know, Markham, like in New York region’s website, they shared the notes from the budget, and they’re talking about 93% property tax increase over a three year period. Thanks, because they’re blaming bill 23 I think there’s more things, because just even during the pandemic, like public transit, for example, still running during the pandemic, but they had like 10% of revenue, their typical revenue. So like, I always knew that bill is coming, the bills coming, right. And then as myself, you know, you were onto your landlord, I have a very much so in Ontario landlord, I can’t pass these inflated companies inflating costs to my tenants. So Hamilton is looking at a 14% property tax increase

Unknown Speaker 26:35
to my properties, that insurance went to $500 per year, which is about a 20% increase. And here we are in a rent control environment. And I think it’s only gonna get worse.

Unknown Speaker 26:45
Like, you were in the Toronto Star, for example, in Toronto stars, they sound very landlord friendly in the article they write. Sorry, sorry, they sound very tenant friendly talk. They call like these rent exact, like rent control exemptions, loopholes.

Unknown Speaker 26:59
The headwinds are worse than ever, for Ontario real estate investor. So

Unknown Speaker 27:06
naturally, so let’s just take a step back, when I started my real estate investing journey, I always knew the US was certain parts of the US were very landlord friendly. But then there were so many pieces missing for me to invest down there. Financing be a massive one, because of my experience, my friends who have bought in the States or internationally, it’s all HELOC, right. So basically, just you know, if the $300,000 house, they took $300, whatever, they have to convert money to us from their HELOC, and come out all at a HELOC, like there was no leverage opportunities. And then, and then all the other problems of coming, every real estate investor knows like, oh, like, Who do you trust? Finding people to find your deals? And then to me, massive risk area is the property manager, like you need the high quality property manager in order to take care of your investment for the long term. So many people are just obsessed with a deal. Yeah, like that. Yeah, you buy wrong and go really bad. More things can go bad over the long term, right?

Unknown Speaker 28:11
People need to appreciate that. So that’s what makes me really excited about share. So like even You even told you said it publicly. You guys have you guys do a lot. So I’m reading from the Toronto Star article. Your company promises to help with sourcing, renovating property management and even taxes.

Unknown Speaker 28:32
That’s, that’s, that’s a big commitment. Yeah, yeah. We know, it is a very Canadian investment as much as Canadians fear the idea of remote investing.

Unknown Speaker 28:45
So which is why we know kind of the pillars that we have to knock over for a Canadian to be able to invest in this not just Canadians out of state investors. So you know, I think Canadians from the major metros, Toronto, Montreal, Vancouver, all face the same, like issues that New York, San Francisco, you know, Seattle, all the major metros face.

Unknown Speaker 29:08
They’re trying to find affordable things out of state, you know, same problems apply where it’s like, I can’t physically get eyeballs on there. How do I do without a say taxes, cross border taxes and say same problems. So we identified each of those and said, Okay, well, we can build technology and process around each of them. At first, we will maybe refer you to a partner on certain parts like lending and then tax or whatever accounting might be, but for the most part, we can kind of box you into a very specific way to get from end to end on how to get financing as a sort of a Canadian as for national, what to think about as a foreign national and all the way to look let’s get your 10th home as a foreign national. So we decided like like that’s the place we want to play.

Unknown Speaker 29:57
You know, we get a lot of Americans but like, obviously as a Canadian

Unknown Speaker 30:00
You know, I have a soft spot for to help my fellow Canadian to get this asset class. And I think, you know, as risk averse as Canadians are they need to get in here. So let’s help them get in here. If they’re risk adverse, they should understand that the risks are being easier Ontario land. Yeah.

Unknown Speaker 30:17
It’s interesting, actually the common I asked you guys, I asked you to a different conversation. Like, for example, I literally have, I have a property manager friend who’s a professional property manager, who had IE, unfortunately, inherited a tenant. And that tenant has not paid since July last year. So even a professional tenant property manager cannot write cannot do anything about this situation. So it’s, it’s now September. So it’s been a year and a few months. And they still don’t have their eviction notice yet. They have their judgment from the from the landlord tenant board. But it’s been about two, three months. So they still don’t have their eviction paperwork, so they can’t get the sheriff yet. Right. All right. So people want to understand risk, like you and I had this conversation many times. The worst case scenario is

Unknown Speaker 31:07
here versus the landlord friendly state in the US is completely different. Right? Yeah. Yeah. I mean, there are probably loopholes in every single state. But that percentage of that, like somebody’s perfectly being able to box himself into that rare rare exception is small, right? Right. Like,

Unknown Speaker 31:27
like maybe a good percent, some, like, percent, like these are just rough numbers. These actually, this is just more of a gauge, but like maybe 10% of tenants in Ontario can box themselves and are educated enough to be a squatter, right? Whereas, and they know the rules. And because of the rules, yeah, they can box themselves in there. But in some of the landlord friendly states in the US, those rules don’t even actually apply. And maybe there’s like a point 1% of people that can actually slop themselves into the squatting exception. But yeah, we’ve not been faced with that. Exception. Right. But it’s not to say that there wasn’t one very legal savvy tenant, but for the most part, like the common problems you face, and from what I hear from the horror stories locally in Ontario, those are like eviction worthy events in the US. And you know, the turnaround time is just mainly administrative paperwork, and then we would proceed to the next level of evictions. Right. So what is your experience for an erection worthy event? How long to get your property back? Yeah, so we’ve, I mean, there’s a few scenarios. I mean, pandemic was kind of a weird one, where everyone felt that they didn’t have to pay. But also in the US, they released what a program called the E rap. So this might muddy our dataset, but you rap was like an Emergency Relief Fund program or something. So everyone’s like, our version is for Yeah, so like, they kind of but this was for 10 for landlords. So tenant tenants were like, Oh, well, I’m not going to pay my lease. And then they would apply for Iran. And then the government just give us a check. This to give it to you. Yeah, they give to us. It can’t really give the tenant Yeah, what it became an administrative headache, where it’s like, tenant, you need to sign this document. And it became an opportunity for property managers to actually cut like a little administrative percentage off the top, but the government did reimburse us for tenants that qualify for the rap program. But we did have like, one scenario of fraud.

Unknown Speaker 33:29
Somebody managed to a

Unknown Speaker 33:33
third party fraudster leased out one of our homes.

Unknown Speaker 33:39
And a tenant moved in. And then we realized it was was fraud and we had the mountain less than 60 days.

Unknown Speaker 33:47
Yeah, that’s pretty good. Yeah. But in all other cases, you know, we’ve we just kind of go through this procedure process most of its vanilla I would say like the longest turnaround we have and this was probably upstate New York and New York is not as landlord friendly as the other states we operate on and typically 90 days is not invested in New York. Yeah. And 90 days was like our turnaround time to get somebody back in out in in rare so but again, I can avoid that risk because not investing there. Yeah, yeah. Professionals haven’t said prevention is worth a pound of cure. Yeah, I would say like 30 to 60 days in is sort of get them out the door and you’re allowed to collect a security deposit in their Yellow Claw that yeah, we’ll pull that back. Yeah, we we are we all of our tenants we always kind of put up front land tenant insurance and reserve security deposit has to be there in order to come in right you know, a mentor of mine and it also was a vision from

Unknown Speaker 34:48
when as a brain Bushido when it first got your became a realtor back in 2010 was to make the process as easy as possible for the client, as in like, you know, like,

Unknown Speaker 34:59
kind of like

Unknown Speaker 35:00
Using a combo McDonald’s, you know, here’s six options which one you like. But

Unknown Speaker 35:05
the reality is that to actually execute that’s not the easiest, right? Especially with prices the way they are, you know, it could be $600,000 for home, it could be in a basement renovation for like, six, nine months. Yeah. You know, if they want to do a garden sweep and mop more cash out of pocket with, you know, hopefully a refinance in two years. Right. So we never got to that ideal situation. Now, you’ve because you’re a tech company, you’ve actually made the process quick, easy. Yeah, it is almost like a few clicks. Yeah. Yeah. Like, I mean, technology is great, because it’s an accelerant for us. So I always try to think of how we can automate people and move them through and and but they’re smarter than me. I know. But no, not at all. But, you know, we’ll really have to attribute to is the founding team, right? There’s four of us. But each of us cover a very specific part of the journey. Right? So Dimitri, he’s our head of investments comes from starlight, one of Canada’s largest private equity firms. So he brings that asset management piece, right, so he can understand how to scale that help biggest thoroughly, they’ve got a 25 plus billion dollars worth of residential real estate. Got it.

Unknown Speaker 36:21
Both here, Canada and the US. And then Carmen who is our CPA, both sides of the border. So she handles the accounting and tax and entity formation. She’s, she knows all of that stuff. So and then there’s Brandon, who’s our head, or head of technology, and then there’s me that just kind of

Unknown Speaker 36:38
gets to be on a podcast, right? So the subject matter expertise is there. So now it’s like extraction and building a platform that allows others to tap into that expertise without having to kind of bogged down the day to day, as much as I enjoy our conversations. I was really excited when I met Dimitri.

Unknown Speaker 36:57
Right? Because again, like, I’m very risk averse. I’ve seen many bad things happen. You know, I’ve, I’ve been through about five property managers in Hamilton alone, just fired my property manager in St. Catharines.

Unknown Speaker 37:09
Again, the market here is different property managers, my experience here are generally very, very small shops, right? Rare that they get to 100 doors, right? In the end, and I don’t blame them because it’s difficult. Right? If it tends not paying, how to it’s hard to bill your client for property management, or, or even just with a bit of rent control? Right. Everyone’s getting squeezed. Right. And, and a lot of people, a lot of investors have taken their properties back from property managers, because they can no longer afford property management. So PMS are getting squeezed. So it’s difficult business, just like you said, like, margins are slim. Right? Right. So I don’t fault them. It’s just every property manager I find has a shelf life. Because it’s not an easy job. Right, right. So

Unknown Speaker 38:02
Buffer, Nick. But when I met Dimitri, for example, you guys are telling me about these, you guys actually have much higher standards for who you hire for property managers. Yeah. Can you can you elaborate a bit on that? Yeah. So

Unknown Speaker 38:14
we the reason why we again, we want to be asset managers, as you know, we want to build such a aggregate portfolio for our clients that we can knock on the doors of the biggest property management companies that service typically only large institutions, because with that kind of volume and scale, they have to have certain expertise in house on payroll. One specifically we look for is like, do you have contractors on payroll that only take the 100% of their work comes from you. That way, we have control over the budget and timelines, because they’re the ones coming in doing the renovation work for us. They’re the ones setting the slot in their team. So timelines are pretty critical. And same with budgets. So the assumption is that if we’re getting them to do the rental work, they’re going to get the long the management contract. Now, when they get the manager, like, they’re, it’s in their best interest to kind of keep that budget low. And then on timeline. If they don’t, then we would walk. So we take those types of economies of scale, we pass that through to our clients. So that is sort of our core where it’s like, we need to work with reputable property management companies that have strong practices. We’ve got a good amount of team and good number of doors in that specific geography.

Unknown Speaker 39:31
I’m excited for that. Yeah.

Unknown Speaker 39:33
I think it’s a different experience of working with an institutional level property manager. Yeah. And again, in my experience, not many PMS can handle renovations. Right, because they don’t have staff. And it’s a tough business. Yeah, it’s a real contractor. Yeah. Right. And then to wear two hats, both be general contractor and be proper manager. And then it’s, it can be risks as well. Yeah, the GC side doesn’t work out. You’re over budget. You’re

Unknown Speaker 40:00
If you’re not on time, then your vacancies is longer. Yeah, clients, I can be happy. Tend to might be happy because you promised them that you can move in. But you’re pushed out two months. Yeah. Because my experience here is it’s rare for renovations to come in on time on budget. Yeah. Yeah, it’s tough to because like, when a contractor, a third party contractor comes in, they’re bidding on your business as well as 10 other businesses, and they’ll still take the highest bidding project, right. So all of a sudden, they’ve ghost you, and you now gotta you hit the Yellow Pages, if that’s still a thing, find, find another contractor.

Unknown Speaker 40:35
And then, and then you also help the client up front as well to actually acquire property. Because we were talking before this meeting, is that person owning property, personal property doesn’t make sense to buy in the States? Yeah. I mean, there’s there’s liability risk there. Yes. Yeah. I think everyone knows the Americans are extremely litigious, right? I don’t see what anyone that right mind would buy in their personal name is Yeah. And for an accounting perspective, for for national, we we advise Canadians to set up an entity corporation in the respective state that they’re buying. And we’ll help you do that. So we’ve got partners to do that. So we can actually set that up for you, and then buying the house under that entity. And then you can build your credit through that entity. And then eventually, that opens up a lot of doors. How hard is this create the entity? Oh, it’s very easy. We can set that up in under 48 hours. In most states, that’s hilarious. Yeah, it’s a tax ID number that takes a long time. And it’s the tax ID number you need to when you go for financing or refinancing or pawn sale. Because I spoke to one of your customers about this, and doing my due diligence on you. And

Unknown Speaker 41:45
he mentioned how creating an entity was like, you know, a lot a lot from work. Yeah.

Unknown Speaker 41:51
You know, that was a different time. Now we do it in house, you know, we were sending them to a partner and say, go to this website, sign up here and do this. And he’d ask questions, what does it mean for the share distributions? Like? Yeah, now we actually do that internally got through the same partner, but they’ve allowed us to, can take control of the experience. So now, because of our sort of onboarding and all that information, we already have a lot of information we need. So we’re just like, well, let us do it. Here it is, answer these questions. And we’ll tell you what these questions mean, as opposed to going online and being a number. But he was buying the property by clicking. Yeah, he has not seen it from what I understand. And I don’t think he’s either driven there visited the property. He told me he hasn’t. Okay. My point, though, is that traditionally to buy real estate investments is very different. Yeah. You got to, you know, get my client typically comes from the GTA. So they’re driving half hour, right? If there’s no traffic, yeah, it’s a Friday evening, there is traffic. Yeah, exactly. And then like,

Unknown Speaker 42:54
for a large period of time, we can guarantee we could still see the property that I wouldn’t sell and right. So I literally had had clients show up, like, sorry, it’s sold up, go home.

Unknown Speaker 43:08
And then, you know, going through the deal of going offering and then home inspection and then getting the contract to come in and you have the person come to draw, come and take measurements for drawings, and it’s like, you’re this past customers is clicking? Yes. Yeah, we aggregate we put boots on the ground. So we collate all that information, convert that information into hard, cold numbers and say, Is this what you like? Is this still good for you? So we kind of remove all that risk. But you know, it doesn’t come with some education process doesn’t mean they, they, they can just kind of show up and click they we we force them down in education funnel? Good. Yeah. So when you sign up and you’re interested, we actually send you some of our performance or underwriting and be like, this is your homework, read this through, write down your questions, and we’re going to come back and we’re going to meticulously go these lines. And so you understand how we are writing this. Understand your upside understand your downside. And when you give us the thumbs up here, then we’ll start searching. Right, right. Yeah. So education is key.

Unknown Speaker 44:12
Part of education. I think that’s incredibly important as well, because like this came like I’ve asked him at times,

Unknown Speaker 44:18
I coolants. The property, in terms of my understanding is just correct me if I’m wrong is I own the property Correct. No one else owns a property. This isn’t a fractional note. This isn’t shares of a private equity or read. No, I own it. direct ownership, you keep 100% of your upside. Our goal is to stretch that upside. So I can move into it if I wanted to. Yeah, if you wanted to, you could totally move in. You know, obviously, we have to go through the procedures, but that’s not a difficult thing.

Unknown Speaker 44:46
It’s pretty difficult here these days with tentative properties that you want to move in. Right. That’s I feel like that is one of the most clear cut ways to get a tenant out like is when to move in.

Unknown Speaker 44:56
But I’m not going to Yeah, I love Canada.

Unknown Speaker 45:03
I couldn’t I can just personally I don’t I don’t want to own a vacation property. I just don’t want to be pigeonholed into one place. So it’s not I’m just joking. My point is I have that level of control. Correct? Right, which in my opinion, is the proper way to invest heavy education, you control the asset? Because if anyone doesn’t believe me, just keep following the news on who loses money investing in real estate, right? Yeah. A lot of private lenders are getting whacked. It’s all over Twitter. Tons of private lenders getting whacked? Like their their capital is gone. Yeah, right. That’s okay. But I control the asset, right, so I can do whatever I want. Exactly. Right.

Unknown Speaker 45:43
I shouldn’t have asked this before, can I just you share for the acquisition, and then I do everything I want to, you could we do have a lockup period for our management fee. But again, it’s your property. If you decide to walk, we would just ask that you prorate our management fee from the lockup period, that lockup period could be anywhere from 12 to 24 months, right. But yeah, it’s your property, you can do what you want fire us, it’s your choice. But it’s not something I would recommend, obviously, because most your clients have do not see the property. Yeah, we’ve never actually turned over to clients. And they’re still with us. And in fact, I think majority of our clients fit over 50% of them are ready to buy another one or have already bought another one. Because I think the analogy would be like,

Unknown Speaker 46:26
I can get discounts at Costco if I tried to be my own Costco. Right.

Unknown Speaker 46:31
I just need to buy pallets of mayonnaise. Yeah. And then I can get the same price. Yeah, that’s, yeah. Yeah, you could totally under like, I think the disservice you would be doing and we should probably do the math on this is that, you know, if you take the property and run, you may lose some of the economies of scales we’ve provided Yes, right. Like the discounted PM, the discounted landlord insurance policy, because we can’t keep you on our master policy. So you’d have to go direct.

Unknown Speaker 47:00
So those cost savings will not be realized after.

Unknown Speaker 47:05
But yeah, again, it’s yours, you can fire us, you don’t like us, that’s completely up to you.

Unknown Speaker 47:11
The client experience sounds currently impressive again, because again, I can buy property based by clicking your guide me through the process of creating a US entity, you’ll

Unknown Speaker 47:20
you almost serve the function of a mortgage broker and putting me in place with and shopping your client to several mortgage companies to get them the best possible deal. You’re going to you’re going to you quarterback, the renovations

Unknown Speaker 47:39
and the property manager filling the property long term management.

Unknown Speaker 47:43
You even advised clients wanted to be ready for refinancing. Yeah, yeah. So yeah, right now, especially now, we’ll put those in the models upfront, be like, hey, look, this is the current rate.

Unknown Speaker 47:53
You know, we’ll watch like overnight, later renting different sorts of treasury like graphs, whatever. And we’ll say maybe in two years, let’s model out what this might look like at a refinancing. So you can get a better assessment on a more improved cash flow. So yeah, we do that we want to put everything all encompassing, you’re in financing your lending rate, make sure whatever your capital you’re bringing to the table, we want to know what kind of if it’s interest bearing or not. And we’ll put that into the model. Speaking of financing, what are typical terms you’re seeing today? Yeah, anywhere from Yeah, mid sevens to mid eights, it depends on sort of the house,

Unknown Speaker 48:28
your down payment size, and

Unknown Speaker 48:32
how invasive you want to get in the credit check.

Unknown Speaker 48:36
So say, for someone like myself, and many of my clients, they’ll likely listen to scenarios.

Unknown Speaker 48:44
Let’s do a scenario where someone’s coming home with some cash, because I have a number of clients who are exiting here to take profits, that they’re not worried about, like, Everything points to real estate prices going up war here in Ontario and Canada in general. Right. So But again, there’s still one take profits, pay down some debt.

Unknown Speaker 49:03
I imagine many of them will be interested in this as well.

Unknown Speaker 49:06
For all the lovely reasons of investing in the landlord friendly place with strong economic fundamentals.

Unknown Speaker 49:12
So okay, so let’s assume

Unknown Speaker 49:16
that someone with like 25 or 30%, down payment in cash, and they’re buying, you tell me, okay, well, yeah, so let’s say you, you come up with 25%. Down, you got excellent credit, let’s say 720 Plus assumed credit. The house has got in a great rental demand area, where the debt to service cover ratio is really good. Then I would say mid sevens

Unknown Speaker 49:43
only Oh, yeah. And that’s a 30 year fixed. no prepayment penalties. So that’s what we’ll say, Okay, we’ll lock that in because we can actually make that deal pencil cashflow positive, once a tenant in there, right. And then yeah, we’ll refinance that probably in two years. Right. So

Unknown Speaker 50:00
and no penalty at all to refund it. Yeah, there’s huge open balloons. Yeah, that’s that’s an American very common thing. It’s like a 30 year fixed sort of term. So it’s easy to do the math on that one. Right, right. From a cash flow perspective. So I actually do educate myself on this on us mortgages, because like, people tell me about it. They don’t really understand. Oh, yeah. 30 year amortization. I get it. Yeah. But it’s, but there’s no bass that that is the term of the mortgage. Yep. So it’s, it could be like 7.5% for the entire 30 years. Yes. Yeah. amortize? I mean, you could still like, if you want to, if you want, like, there’s so many, I think what we don’t realize, and we, in the US, there are so many different versions of this. So you get a five year term, two year term, three year term, but 30 year amortization, like there, and then there’s like step down fees, different yield maintenance. So I would say like, you can get up to like a 30 year term. But you know, there’s also short terms 2357 10 Whenever with 30, year amortization, but fixed.

Unknown Speaker 51:02
So yeah, I can’t speak for the broad nation, because again, you could walk down the street and get 50 versions of this, right. But 30 year amortization is a thing. Fixed terms can be different. prepayment turns, actually, one thing is pretty common. It’s like no prepayment. Penalties is a thing. It’s amazing. Yeah. So that’s why refinancing is so much easier. Because here refinance, we typically have to pay through an interest. Yeah, yeah, there’s no prepayment, majority of them don’t have prepayment penalties, they might have a step down, so that you can lock in for longer. But again, those are sort of the unique flavors when you go lender to lender. That sounds awesome. Yeah, it’s easy to do the math there, right. And it’s great when rates are low, and everyone’s competing against each other. Everyone’s competing against each other right now. So here’s the trick, I’m gonna say investing here is, I think the best option, the best options for investing locally are garden suites and student rentals. Neither appraised easily, right?

Unknown Speaker 51:58
All right. Okay, so I can get like seven and a half, I can cash flow.

Unknown Speaker 52:04
And I don’t mind sharing my credit. Right. If anything, if it gives me a better rate, yeah, it’ll get you a better rate for sure.

Unknown Speaker 52:12
Wow. Yeah. Because these loans, they’re meant to be non invasive, sort of, like non credit, check invasive processes. They underwrite the house, essentially. So it’s like, much like a commercial mortgage here. I guess. So yeah. Like they want to see that the rental income can exceed all your debt. And, and that personally, that if they’re, if you’re a shortfall, you can personally cover that delta. Interesting, because here in Canada, you typically have to be four to six units at a minimum, in order to qualify just on the property. Gotcha. But even still, if it’s like, many times, they’ll still want a personal guarantee. Right? Or to or to tie it to one of your corporation. Yeah, but as assets. Yeah. And I believe like, even if you were to buy like investment, like residential here, the big banks kind of limit you on how many you can buy with. But in the US with these DSCR loans, you can kind of do them over and over and over as long as the assets have well, performing asset. Well, the reality is here in Canada, it’s really hard to own five income properties, right. It’s just a lot of capital.

Unknown Speaker 53:12
And then the challenge of having enough cash flow. Yeah, right. So it’s rarely when he gets the runs up against that 10 property limit. Yeah.

Unknown Speaker 53:23
If you can win up to that 10, copy limit, let me know. Congratulations.

Unknown Speaker 53:28
You are you’re you’re you’re already are. Even in the past, before the pandemic, you were very rare. I think you were maybe 1% of the market that you could get to 10 properties. Right, right.

Unknown Speaker 53:39
More, I think that number went up to like two and a half, maybe during the pandemic, just because prices went up so much. People would got so much risk. So rich, but I digress.

Unknown Speaker 53:49
Great rental demand areas, that cash flow. Can you give me like, What are your top three? Yeah, I would say you know, the states wise, we would love we love Texas, Georgia.

Unknown Speaker 54:04
Tennessee,

Unknown Speaker 54:07
starting to look into sort of Midwest and what we like Ohio, Missouri.

Unknown Speaker 54:13
Florida has always been up there. But you know, there’s some headwinds there because you only change Yeah, so yeah, experienced yourself. Yeah. So the insurance rates are starting to tick up.

Unknown Speaker 54:24
You know, it’s still a great investment spot is just with climate change and insurance rates. It’s kind of questionable.

Unknown Speaker 54:31
Because I’ve, I’ve, I’ve had people on the show, who, who deliberately chose something last three years in Florida, because it never got hit by hurricanes. And then those are always Famous last words. or never.

Unknown Speaker 54:47
And yeah, I have one friend

Unknown Speaker 54:51
Bonnke coral. They lost I think like 80s 80% of shingles off the roof during the hurricane. So the house flooded from the top down. Oh my gosh.

Unknown Speaker 55:00
This is just after they renovated. Right? Right? They’re just waiting. They’re at a stage. They’re just waiting for the cleaners.

Unknown Speaker 55:06
Because the house is already renovated. They’re just waiting for the cleaners to have men to have the furniture delivered. Already just been completely renovated. And like, gosh, by like the hurricane, the storm was that bad to knock off damaged shingles that a major Wall your house permeable? Right? So a flood from the from the roof down to the basement? So another good job? Yeah. All right.

Unknown Speaker 55:28
So me personally, as much as I love Florida, I I’d be very cautious. Because again, I am risk adverse. I need to know somewhere I can always get insurance. Yeah, yeah. No insurance, no mortgage. Right. So, yeah. And then yeah, mortgages are inflating across the states. I’ve done some research in stage two, I noticed a couple of the major insurers. I believe they reduced half their portfolio in Florida. Yeah, over the last like few years. And that seems to be a trend. Yeah. Yeah, they’re starting to pull back because they don’t know what’s going to happen to that’s that state and some neighboring states because of again, climate change.

Unknown Speaker 56:07
Demetri my head of investments is the best one to talk about this, because he gets more intimately in tune with that from a sort of institutional level. But my understanding is there are big notable insurers that have like openly stated that Florida is an area of question for them.

Unknown Speaker 56:25
But then, the counter argument I always hear is like, well, that opens up the opportunity for, you know, other insurance.

Unknown Speaker 56:33
How big are these insurers? Well, who’s to say that they’re just not going to disappear? So yeah, you know, it’s, it’s it’s touching go if the client really, really is adamant about Florida? Well, we’ll help you source there, but and we’ll keep a pulse on it. I think, you know, we, we want to kind of also project insurance rates as well, that’s kind of our forecasting as some of our Forte’s or insurance taxes, but we’ll kind of keep a pulse on that. But we want to educate them, we’ll give them the sort of same sentiment, as we are talking about now. And if they still want to move forward, then we’ll let them because in my research, I believe that the lead the insurer with the largest market share about 15% and of the fastest growing is a state backed insurance company, right. Backed by state of Florida. Yeah, by the taxpayer of Florida. Yeah. And I think that was a byproduct of their insurance pulling out, but again, don’t quote me on that. That’s more of a Demetri question. But yeah, I think that was a byproduct of other insurers pulling out red flag to be a complete wreck to have to back through. Yeah, exactly. I I’m not, that’s not that’s too much. That’s too much of a red flag for me. Right. I cuz, because I have, like, almost all my properties have basements. So whenever we get one of those 100 year storms, keep coming.

Unknown Speaker 57:54
I worry about my basements. Right, right. So I’ve had enough worry in my life. I don’t want to like every time I hear about a hurricane coming to Florida, I don’t have to be Googling and researching see if it’s coming near my property. Right. That’s me personally, personally. So that’s so I’m down to invest in areas where where things make sense. Yeah. Right. So let’s what what what about Texas, Georgia and Tennessee? What do we have in common? That makes sense? Yeah. So the reason why we like Texas, and we like Dallas, a lot. I mean, those like you mentioned economic fundamentals, you know, growing population, job growth, household income, unemployment rate, those we look at all of those factors, like we plug into several 100 data points.

Unknown Speaker 58:38
So we like them because you know, they’re great for it. They’ve got They run the gamut. They have anywhere from you know, your institutional grade class A, you know, these are low risk homes, in very nice neighborhoods to

Unknown Speaker 58:50
the tertiary markets where you’re looking at higher yields and lower price points. So they’ve got a good array of those both areas. But I would say Dallas and most of the pockets of Atlanta, they got a lot of great A and B product.

Unknown Speaker 59:03
And that’s where a lot of institutions are buying up in droves. They’re buying a lot of homes because they know it’s very good rental demand. Appreciation. Same with Atlanta. Lance is home to a major a bunch of fortune 500 companies. It’s a growing population. You know, you can buy something that’s you know, 2000 build 1500 square feet for under 300,000. So great product there. So yeah, it’s close to major metro. It’s like a bunch of Hamilton’s right like it’s a good city. Great economics, good job growth. It’s got all the right factors. All these are a lot bigger. Yeah, I saw Atlanta’s greater areas but 6.1 million. Yeah, yeah, like Atlanta proper thing. Yes, about 400,000 But like the whole surrounding area. Yeah. There’s such nice pockets there. And, you know, as much as institutions kind of affect you

Unknown Speaker 1:00:01
owner occupancy inventory because they’re buying up for rental. There’s some benefit there for other investors because you know, they can help boost the rental rates and stuff like that.

Unknown Speaker 1:00:14
And they tend to keep a good upkeep of their homes. So those are all positive opportunities for other investors to sort of leverage and piggyback right. Can you give a range of price points for these A B and C Class property? Yeah, so we we go from anywhere from $50,000 homes which would be like yeah, this the tertiary no parking lot is C, the C Class homes to

Unknown Speaker 1:00:39
up to like, let’s call 400,000 for a class homes.

Unknown Speaker 1:00:44
And how you want to think about it is the A Class homes have moderate to low cap rates. So there we would look at the pencil those deals to kind of break even but they’ve got pretty aggressive equity appreciation year over year and less tenant turnover, some of the cost lines are a lot lower like allocation for RNM and vacancy and probably lower and then on the sea side, lower price point, lower appreciation but higher yields cash yields and

Unknown Speaker 1:01:14
yeah, higher risk too. So it’s not to say we favor one or the other I think a well diversified portfolio should actually be a spread across that

Unknown Speaker 1:01:25
and having good cash yield sitting on that cash and reinvesting into the a it’s a great cycle or even, you know, refinancing and buying cashflow heavy homes is you know, a good opportunity to so yeah, a well diversified portfolio you should run the gamut. Each state has their ABCs but they also have their sort of micro economic factors. So that’s why on our platform we’re like it’s good idea to diversify across states right bees here bees, their bees across Sunbelt Midwest. Yeah, thank you. So red state becomes a blue state.

Unknown Speaker 1:01:57
I don’t want to get into politics or but hurricane just all of a sudden pops up out of nowhere. No. Tornado but, but again, like

Unknown Speaker 1:02:04
this all sounds great.

Erwin 1:02:08
Anything else I haven’t asked. We’re running out of time. So anything else I should have asked? Do you want to share? Oh, question was sorry. Question I want to ask is why single family rentals, right? Yeah, so single family rentals are like after the only mortgage crisis, they became quite popularized and known as like a very safe and resilient asset class.

Unknown Speaker 1:02:31
The reason institutions haven’t touched it is because it’s kind of hard to operationalize, because you have scattered that’s why they prefer multifamily condos, but single family rentals strictly because of the resiliency of it.

Unknown Speaker 1:02:43
You know, in the market, that price point typically goes up.

Unknown Speaker 1:02:48
And then down, market rental demand goes up. So your rental rates can go up. And because of law, specifically long term rental, now short term so that way you get people who are signing longer leases, you can have a dependable repeatable monthly income to ride out down cycles. And then up cycles, you know, obviously you’ve got accelerating vehicles like refinancing opportunities and stuff like that. So to replicate so yeah, after though a mortgage crisis institutions realized how resilient this asset class was and they started entering on droves. And it is still one of the most resilient ones and what makes them resilient is not just like okay, it’s a single detached home it could be anywhere now it’s it’s a certain surrounding setup. Again, economic fundamentals where you want to be outside of major metros, certain radius, drive time rental demand percentage of home owner occupant vers renters, these are all factors that go into the classification of an SFR single family rental.

Unknown Speaker 1:03:48
Manager, then

Erwin 1:03:50
I always like to give my guests you know, a chance to share.

Erwin 1:03:54
Is there anything you want us to share about anything today?

Unknown Speaker 1:03:59
Without my repre a prompting you Yeah, like, I think a lot of questions. A lot of hesitation people get it, it’s like do we buy now we wait for later.

Unknown Speaker 1:04:09
And I’ve always been a strong proponent of like, look, single family rental, this is a 10 to 15 year hold minimum. Like that’s how you want to look at it. Timing, the bottom is impossible. And supply is dwindling.

Unknown Speaker 1:04:21
We are constantly bidding against institutions. So that’s a big Nick, you can Google like, funds deploy more capital. And there, you know, a few months ago, Blackstone just announced with along with a KKR or something that that they’ve raised another 100 and $10 billion to deploy in single family rental homes. So if you can pencil the deal today to be cashflow positive, everything kind of goes up. Everything improves over time as interest rates kind of subsides so you’ve seen the worst case scenario so lock in your assets, buy them now because in 10 years you’re it’s always the same sob stories like I wish I would have bought more. I wish I would have bought I wish I would have

Unknown Speaker 1:05:00
bought.

Unknown Speaker 1:05:02
But yeah, so if you can make a deal pencil today, snatch it up, secure it, and then ride it out. Right. And that’s what we’re seeing. We see savvy investors still buying deals. And inflation doesn’t matter as much as their Yeah, this is a great inspiration. Yeah, this Yeah, this flesh, there’s a very good inflation hedge because, yeah, the rent control pieces we can raise rents and we typically pick markets where the rental demand is strong. So yeah, rent rates have gone up. And that’s why they said so far as a great inflation hedge, which is one like, I’ve seen many performance. So when I when I saw yours and I see the cashflow goes up every month, every year. I’m like, let’s let’s do this. Yeah, the rents are going up every year. And so like the year 10 cashflow numbers are sick. Yeah. And like, those are modest numbers to like, like Dimitri is quite conservative, like I’ve seen some way more aggressive, and we actually peg our underwriting against everyone else’s. And oftentimes our cap rates are about a percent a percent and a half lower than everyone else’s just strictly because of the conservative nature of it. But the low performers I’ve looked at you can basically cashflow your day one. Yes. And one example is I could cashflow $800 a month in your 10. Yeah, we wouldn’t. Yeah, we’ll never recommend like our starting point is cashflow positive. It doesn’t start in any other scenario for us. It doesn’t make sense. Amazing. Andrew, thank you for thank you so much for doing this. Of course. My pleasure. Do you

Erwin 1:06:29
remember

Erwin 1:06:30
the landing page offhand? Yes, it’s I win dot share. S F our single family rental.com. Again, that’s I win, share sfr.com And I’ll have it in the show notes, folks, thank you for remembering. No problem. I got you.

Ewin 1:06:49
There 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.ca/youtube To register for our next class. Then links 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, my guess. And if you’re just starting out, feel free to ask questions and comment below. And I’ll do my best to answer each of those comments and questions myself. Again, if you’re ready to learn the nitty gritty about real estate investing from a professional investor register for our next virtual class. That’s at Investor training.ca/youtube. Thanks again for watching. See you in the next video.