**Transcripts are auto-generated.

Erwin  

Real Estate Investing has become such a craze online in the last five years and I’m so over it and recording today’s guest, Dominique Shannara, who is a real estate investor with a couple of small multifamily properties in Thunder Bay, Ontario, where she lives and she happens to also practice. Be a practising certified financial planner and a Chartered Professional Accountant. Hello and welcome to the truth about real estate investing show for Canadians. My name is Erwin Szeto. In case you’re new this show this is one of the top podcasts in the space, including being recently ranked number 81 in the business category and all of iTunes across the world. Dominique is a successful real estate investor believes real estate is an effective means to build wealth. But so why is she over the craze? I don’t blame her. I’m seeing many many questionable education organisations pushing real estate investing using questionable questionable methodologies and unqualified coaches. There was one influencer attempting to hype him and his coach up as they’re driving around together in a car around Ottawa. And they made some disparaging disparaging comments about a property that they were offering on saying was a slum and they needed a whole bunch of work. Funnily enough, the owner of the building saw the video and commented on the post. They also shared that the property was not listed for sale and they had received no offer the most are backtracked privately. I’ve seen the screencaptures they apologised and admitted the video was created to build their influence create hype on social media. So how embarrassing is that, such as the truth about real estate investing, there are many fakers out there. And they continue to post on social media, picking up fakers and other private mortgage companies in receivership there is $50 million in money missing. There were promises of high returns. The accuser is being accused of spending lavishly on private jets, and supercars and owning several luxury condos, all over the world. If you Google, Greg Martel and my mortgage auction Corp, you will find the news. I’ve posted the link to the CBC in the show notes. Really bad news for investors involved in yet another reminder that how important it is to do quality due diligence. It’s always required, never going all in on one investment. Experience matters. Diversification keeps one out of trouble. Speaking of experience, for example, cheering I made a investment in the development project using some of our registered funds. And the builder has over 40 years experience over 40,000 houses and condos. They are one of the biggest builders in Ontario. So when someone has that kind of track record, I do give me a lot of confidence versus a newer MC project. Like that happens to have $15 million missing. Very popular question out there as being a landlord hard. Yes and no, I’ll just say yes, to keep it simple. And to my experience is not nearly as hard as compared to all the other options out there, including having a job building a business, there is no easy money out there. And direct ownership of real estate is the most efficient strategy to becoming wealthy. I know because my team members and myself, we’ve all done it. Over 45 of our clients have done it as in making a million dollars or more intentionally on income properties. landlording is honestly much easier if you treat it like a like a well run business. And unfortunately, the majority do not. The majority are often the source of those nightmare stories. If my team and I can help you on your investment journey. Simply just reach out to us on Iwan at infinity wealth.ca My team and I would be happy to hop on a zoom to guide you help guide you and point you in the right direction. If you’d like to like to book a call directly with me understand my availability is not the greatest I think I have like one maybe two appointment slots for all May. And it’s May 12. Monday I’m recording this but reach out. I might have more availability in June. Of course there will be some homework involved. I will continue to evolve dossier. Again think that’s I when I have you i n at infinity wealth. That’s yeah, I’m a personal sad note. A good friend of mine shared with me that his daughter has an eating disorder, which is just terrible to hear his wife, the mom had to drop down and work from full time to part time to supervise meals, which can take up to two hours to oversee that the daughter finishes all her food. I checked chat DBT and it tells me that nearly one in five teenagers may have similar symptoms of eating disorders. My friend’s daughter also competes in a sport, her passion in her sport that takes up five, six days of her week. It’s unfortunately one of those sports that where certain look in body type is that is considered ideal. When I told cherry about our friend’s daughter, I explained to her that I’ve had the same concern for years. Hence I vetoed our daughters interested in participating. That’s that same sport a couple of years ago, even though I did go against both my or my daughter, my wife and my mom. Instead, I’ve chosen it Babies that produced the greatest physical skills, strong self defence, and spend honour does CrossFit Brazilian Jiu Jitsu, gymnastics and track, she will be we’ve asked her to choose a team sport as well, because we believe there’s lots to be learned from team sports of leadership, both being a good team member and being a leader. I specifically chose CrossFit because in our gym, and understand that we’re our gyms a little bit different than most, it’s a lot more chill, especially a lot more chill than what people think is a CrossFit gym. And folks who go to our gym, and also we there are folks who are very serious, there’s quite a few varsity athletes that attend our skip are in like AAA athletes that go to the gym. But for the old folks like myself, it’s pretty chilled. And for the more serious folks that are there, they’re always eating or drinking protein shakes in the gym, including the ladies that treat food as they treat food as fuel for the engine. They’re the engine, of course, and not something that should be deprived of, in order to be skinny, including, again, Nicklin, the ladies and some of those ladies run circles around me in the gym. My point is that I make decisions today based on what I see happening, risk I see happening 510 1520 years down the road. And that is why we bought each of our kid already. investment properties. You know, before the turn the age of one, one kid has a duplex. The other tip is a student rental. We’re also adding to our whole life insurance policy to pay for our massive tax bill from when we pass. And also that’s why we make business decisions today, in our businesses that push us out of our comfort zone. You’ll hear more about it eventually this other business that we’re looking at acquiring when it’s done. Yeah, because we’re looking for a brighter future. But also we want our clientele and our businesses to align with our core values, which include helping people and on the real estate side, creating rental housing supply, creating. My point is that we all know what the future problems are coming, like eating disorders, more concerned about my dad for my daughters and my sons, and how today’s young people can’t afford houses, thanks to governments all over the world, printing money. Whatever you invest in today, whether it’s a gym or buying an investment property, it’s both are hard. But time will pass and those who put the hard work in today will get ahead in life. on to this week’s show. Our guest is tired of real estate. Tired of the real estate investing craze, at least the craze has died down significantly during the downturn. Several education companies are gone. Coaches of some countries have gone quiet. Some of them going bankrupt, such as the real estate cycle, we can get flushed. We have domination, our owner of 100 wealth, who provides managed investments, financial planning, Insurance Group benefits and accounting services. She has CFO to her rental property business, her husband serves as the CEO oh, here’s the notes on the tools. And they have a plan to stop growing their portfolio at five properties. Even though Dominique attended, attended a weekend course years ago, and hired a coach of over two years. Well, I’ll let her explain. I don’t want to spoil it. But she’ll explain why she does not follow the hype of aggressive growth and wants balance her life running her own business, a self known real estate investment stuff that she does. She’s also young think we talked about starting a family. She’s still young, of course. Plus, we chat about why she hired an accountant, even though she is one and how she’s fighting inflation both in her work in her portfolio. Please enjoy the show. Oh yeah, it’s always a treat. To me. It’s always a treat to have someone in from the financial planning world on the show. So please enjoy the show. Hey, Dominique, of keeping you busy these days, tax returns a lot of them. How much of your business is accounting?

Dominique  

I’d say it’s mostly March and April of every year like we do taxes vary seasonally. So in March and April, it takes up like maybe 80% of my workday. But the rest of the year, we do everything else. So we focus on the investments in the insurance for the rest of the year. So maybe revenue wise, like 15 20% accounting stuff.

Erwin  

You wear many hats. Yeah,

Dominique  

I like to think I wear three hats. You know, I don’t want to wear too many more hats. And that’s part of why I’m not as actively involved in our real estate holdings anymore. Because it was it was a lot of hats.

Erwin  

They probably argue you wear more hats, but Okay, for the listeners benefit. Let’s go through the hats that you wear.

Dominique  

Sure. So I own my own business Chouinard well, so that’s where I offer those three hats services I mentioned. So we manage investments. So I’m mutual fund licenced we sell insurance like life insurance, disability insurance, we manage group benefit plans for employers, and then we do tax returns or other related accounting services. So that’s in my business separately from that we have four rental properties that we own personally with me and my husband. So I’m not involved in the operations of them so much, but I think just by being married by default, we still talk about properties a lot. And I tend to be more involved when it comes time to like mortgage renewals and those kinds of things. Tax Time, obviously.

Erwin  

So yeah, it sounds like your function is very much like the CFO. Yeah,

Dominique  

I’d say. Yeah. The wife of the CEOs hash guy that does everything.

Erwin  

Very cool. Very cool. So you have sort of designations as well.

Dominique  

Yeah. So I’m a CPA. So that’s the path I originally took. I went into accounting worked at an accounting firm, and then got into financial planning that way. And I’m a certified financial planner. So that’s the commonly known financial planning designation.

Erwin  

So I think you’re only this second or third CFP, we’ve had on the show. Oh, nice. No one listens. Anyway, it’s not

Dominique  

seven listeners? Or is it 13? Now, are you up to 13? Now,

Erwin  

it depends if people share the podcast thermometer on so yeah, right.

Dominique  

Or if they play it in the background, you know, they’re doing something else.

Erwin  

So my point is that not many financial planners hold actual real estate. Yeah, like some, some will do some REITs or whatever other investment, a passive investment vehicle for real estate, but you’re rare. Are you not? Is that your experience when you talk to other CFPs?

Dominique  

Yeah, like I would say, in our profession, like holding a property, and especially doing those strategies, like, you know, refinancing, what we call a burr in the real estate world, that’s considered pretty risky. If you talk to a certified financial planner, or someone that studies that area, like that’s considered a high risk strategy. But if you talk to a real estate investor, that’s considered low risk, because it’s real estate, right? It’s like, well, buying real estate is low risk. So what I find funny in bouncing around those two different worlds is the difference in definitions of risk. Because, you know, you go to buy a duplex and or even a single family, and you can argue, we all know, there’s a limited supply of real estate, and that there’s always gonna be a need for people to live somewhere. So from that standpoint, you could argue that’s low risk, but it’s this the fact of having a lot of your wealth in one thing, you have less diversification, right? And the fact that these values are not promised, right, like when we aim for an ARV when doing a project, like that’s based on a professional opinion, but you don’t know what your contractor is going to bill, you is not necessarily what they agreed to on the estimate, what breaks that year is not promised. So there’s a lot of aspects that I think everyday people would consider risky. But when you talk to real estate investors, they’re like, No, it’s the lowest risk investment possible. And it’s interesting,

Erwin  

right? Especially coming from your world. Yeah, especially if you network a lot with a lot of financial planners.

Dominique  

Yeah. Like I consider from an objective lens, like I consider the holdings we have to be like, kind of medium high risk, like what we’ve been doing, right. And we’ve only ever done one project at a time, and also people that do multiple construction projects. And that’s crazy, right? Once we experienced that three and a half percent rate hike last year, right, we were faced with the reality like, wow, if we had more going on, if we had more projects we took on, we could have been in serious trouble. Right. And so we grew our holdings, like fairly slowly, I guess, based on the hype that was going on at the time. But we’re just I say we maybe I should just speak for myself, I’ll let Richard tell his piece. But um, I think I’m just really glad that we took it slow and kind of took our own tolerance for risk into the picture, instead of just listening to the hype and what other people were saying like, Oh, take what you’re doing and just do double that, because hashtag fast growth.

Erwin  

Where did you see that? Because I

Dominique  

was discussing for a while, like I did a, I constantly do a purge, you know, I’m just deleting people, or there’s this newest Real Estate Group now, is it? I don’t know the name. I don’t want to guess. But there’s a newer one. And they started adding me on Facebook and you know, posting like, oh, we do this, we do that and have your investments been down last year, buy real estate instead? And I’m like, oh, you know, I keep deleting people. But yeah, the Internet can be a pretty, pretty unsettling place. You know, like, it’s just really easy for people to type something and post it and not really realise the consequences of what they’re saying.

Erwin  

Yeah, it’s really difficult to fact check. It’s actually hilarious when people are called out. I remember I remember seeing on social media giveth and taketh away. I remember someone posted that took a selfie outside an apartment building and so they had a tie it up. And then the actual owner commented, like, that’s my building, I had no idea is for sale. Right. And then he shared that he shared the DNS afterwards, the original poster apologised, saying they’re just trying to hype hype themselves. Yeah, social media is not real, you know?

Dominique  

It’s not and honestly, the people that I thought were incredibly successful. And, you know, people that I thought would have had millions of equity by a certain point all of a sudden disappear, right? And then you hear that they’ve gotten insolvent or that they’ve had to liquidate and it’s like, it really puts things in perspective, right in your mind, you’re seeing them post and do all these things. And so you have a picture of how they are financially or otherwise. And then you hear like, that wasn’t at all the real Look at all this equity was fake, right? It was just this kind of, you know, based on these inflated values and it’s just shocking. I think people underestimate how many properties or overestimate how many properties you need just to be financially secure or financially comfortable in the future. Right, like, you know, and I think the reason I think I look at it differently is based on again, being a CFP and doing financial projections for a living like if I build a financial plan for somebody, right, you punch in their property, estimating it goes up in value, 2% a year looking at the pay down of the mortgage, looking at the other assets, paying off your personal mortgage, eventually selling those turning it into an income. Just a regular family, having one or two or three rental properties can be extremely well off in retirement. And not everybody needs to retire early. Because if you just have a job you love, that’s your way of contributing to society. You know, like, I think retiring early became this other internet craze that people had, like, once you reach certain goals, it’s like, what else should be your goal. So people kind of felt the need to make retiring early their goal, because it’s just like a goalpost that you can move up, you know, and it’s strange, like, he asked me when I want to retire, my dad asked me that the other day, he’s like, do you want to retire, you’re probably gonna retire at 40. And I said, I’m retiring at 65. He goes, what I’m like, Well, why would I want to retire at 40? What do you want me to do? You know, I’m just gonna sit at home and watch Netflix and go take my dog for a walk at 1pm and go for a nap at three. And

Erwin  

I think you part of it is that you understand that the return, especially the cash flow is not nearly sufficient in this market that we’re facing. Even if you wanted to, if you really difficult generate enough cash flow in a short amount of time.

Dominique  

Yeah. But I think if you liquidate your portfolio, you kind of could write like, say you’ve got five properties, and you kind of sell one at a time and live off of that income. You could, you could do a combination of that, but definitely not on cash flow from rental income. I think people learnt that the hard way. You know, as soon as the interest rates went up a couple percent are like yeah, nevermind. So we have thankfully, we have cash flowing properties even still in today’s market. But our cash flow from what we got three rentals that are fully rented out one that’s ongoing and construction, but it’s just enough to top up our income a bit and to pay the taxes that we have to pay on our rental income.

Erwin  

Can you told me a bit about your investment strategy? You have three rentals that are fully tenanted what kind of property? Are they?

Dominique  

Yeah, so our first one we bought in I think 2015. That was a duplex. So we lived upstairs, rented out the basement, kind of classic starting point for people. So we renovated the basement into a one bedroom apartment. We rented it out pretty much right away. And then we moved out of there three years later into our second property, which in what if we did the same thing? So we’d lived upstairs, rented out the basement? So that takes us to what year 2019? Yeah, is when we bought our second property. So at that point, we had 1234 units, because two of them were in our basement was actually a huge house. There’s two different units in the basement. And then after that, what did we do we refinanced our first property at some point, so that was great. Then we bought our third rental and August of 2021. I think I’m getting my timelines, right. No, in August of 2020. Thank you. That was a 20 minute building. Yeah, I guess. Yeah. It was a vacant triplex for 80,000. That’s been vacant for a very long time. What happened to so that kept Richard really busy throughout COVID. So you know, basically revamping the entire thing, creating three units. And then that one, we did a refinance. So that was a classic Burr, I guess this was on Cameron Street,

Erwin  

in Thunder Bay. Yeah, all in

Dominique  

Thunder Bay. Then we bought our primary residence in November, so three months ago, and so we moved out of our rental and then rented out that unit. So that helped to offset the cost to our new place. And then last but not least, Richard just bought a, I think three unit building, which he’s currently renovating. So he closed on that like two months ago now. So in February, and that one, I haven’t even seen the spreadsheet on it. So I’ve been very, very removed from that one. But I’m, I’m trusting him with the operations and he knows what he’s doing by now.

Erwin  

So to me, this doesn’t sound very risky.

Dominique  

So if you talk to anybody in real estate, they would say like, this is not risky, right? Especially we’re doing one at a time. We have plenty of capital reserves, like we’ve got by now. Like we’ve got lots of home equity line of credits, unsecured line of credits that we have access to, that we’re able to do to basically use our own capital for renovations, which is super nice.

Erwin  

And your husband’s in renovations, like Sorry, what is Richard Richard right.

Dominique  

Yeah, so he was a painter wasn’t is a painter. Perfect. After only for years, and so he’s like, he doesn’t necessarily do a lot of the other trades, but he’s very familiar with them. He knows how to interact with contractors, which I think is a huge part of being a real estate investor, right is knowing, knowing the basics of all the trades, and then knowing how to interact with people and how to know which parts your job which parts their job, what to reasonably expect, right? How to monitor the job site,

Erwin  

you have contacts, and as well, you may already know who was good at what the job? Correct, they probably already know, would be on budget on time.

Dominique  

Exactly. And he knows like, what’s a reasonable quote, and what isn’t right, more than most. So I always said, like, if you know, if Richard left, or if you died or something, I would not own these rental properties. And you know, I’d be it’s very much a team effort. And it’s something that I think if you don’t have experienced in the trades, you’d be very careful, right? It’s kind of like going into a mechanic and having no idea and the mechanic could easily take advantage of you.

Erwin  

There’s a reason that I show up. When I show up to see my tenants I show up in my minivan, I don’t show up in the other car. Same thing with like, your protip for listener, you know, if you invest in Thunder Bay, or any anywhere outside Toronto, you show up and you look like Toronto, when you call and you have a 416 number, automatically, they think something else that they think they have impressions of you, which aren’t usually favourable for your pricing. Exactly, exactly. So where’s the risk in this?

Dominique  

Well, the risk is the leverage, right? The risk is that are you 100% of finance, like what? Well, the risk is that your payments on your mortgage and on your debt are higher than what you’re bringing in. So you have to make up that difference elsewhere. Right. And I think we all know people that right now they’re paying more towards their properties than what they’re making. So they have to go and thankfully, a lot of these people make good money at their jobs. So they’re able to make just minor lifestyle sacrifices to make it happen. But if you find yourself at that extreme, where say, you know, you need a grand a month just to keep your properties going and you can’t find it. You got to make quick decisions, right? If you have to sell a property quickly, you know that you won’t get what you want for it. Whenever you have to sell a property quickly, you have to take a cut on that amount and pay a lot of selling fees, breaking mortgages, mortgage penalties, right. There’s a lot of costs to not having your house in order that come in. And I think that’s risky. I really do. Like if you when you run out of cash, and you don’t have cash, and we’ve seen that we’ve seen people you know, kind of put on putting their stories like hey, I need cash needed, need alone need an unsecured loan. Once you’re at that last straw, sometimes the only solution is insolvency. And being anywhere close to that would spook me a lot.

Erwin  

So I’m gonna read some lines from your Facebook post that got some attention, your 69 comments. I don’t know if you’d call it viral. But a lot of people in my community community commented on it. It’s got attention to toxic positivity while avoiding any mention of insolvencies and losses, quote unquote it’s all been about your mindset, oh boy. And constant more and more and more. It’s just getting exhausting. I can’t seem to find a way to purge it from my feed no matter how hard I try.

Dominique  

I found a way by the way since then, I found a way to leave Facebook but yeah, I just started unfollowing like constantly. I alternate between unfollow and unfriend. You know, like if I, if I can see who it is, I know them but they’re annoying then I unfollow but if I see who it is, I can’t place them from a hole in the wall. Like I don’t know who it is unfriend. And I just had to do that for like two months. And yeah, eventually my newsfeed had better things on it takes time takes a long time. It’s from yours, you know, like, I think in 2020 is when it really picked up and I started whenever I get a friend requests, and it was someone with 46 mutual friends. And their profile didn’t have any red flags. I accepted it, right. But then it became hundreds of people, you know, over time. And now I’m like, Why did I accept all these people? And they’re all just trying to pitch their real estate something or get some investors or

Erwin  

me because I can tell because I have some friends and they’ll take a course. And then their social media profile, I will put, you know, goes nuts in terms of how often they post and what they post and they change their look. They change their hair,

Dominique  

all of a sudden they’re very polished. investment savvy, you know, storytelling. Yeah, they took a storytelling copywriting course on the weekend too. And there they are telling stories about how they made it from the bottom and now they’re here, you know,

Erwin  

you have two properties. So now they’re here. They’ve arrived.

Dominique  

They can teach you for only $2,000 a month.

Erwin  

And you speak from experience. You’ve attended some of these programmes.

Dominique  

Yeah, so again, with without names you know, we’ve been to like One weekend event at some point during COVID, actually, and then we’ve been part of a coaching programme for two years I was in there in the first year, it was like a joint thing. And then Richard did a second year. But what else? I don’t think I’ve taken any other like weekend things again, I was never big on doing you know, the too much information thing I think we all know, like, once, you can only receive so much information on investing, like eventually you just gotta invest. Right? Just Just do the investing. And lately, I don’t know what’s happened lately. But there’s a lot of those weekend conferences. Have you noticed that? Like, it seems like every weekend, there’s two or three real estate conferences happening?

Erwin  

Yeah, the greed is still high, in my opinion, even though Yeah,

Dominique  

yeah. And I wonder, you know, to an extent, I think that’s one of the hidden costs of real estate investing is like, do these people count their time that they’re investing and attending these events and networking? You know, all those hours, you know, you could be building a business, no one needs to attend them all? No, but I see people like attending a lot of them. And sometimes I wonder like, are they actually investing? I don’t know, like, I think a lot of them are or sometimes people are attending them as a coach or as a mentor? That’s a little bit different.

Erwin  

For them. They’re raising capital to show up to my events as well.

Dominique  

Yeah, I don’t know. I think I think time is the real wealth. You know, it’s like having time having control over your time. And when you’re spending so many hours a week on, quote, unquote, investing, like investing is supposed to be something you do without needing your time, right? It’s something you do, and then you put your hands up, and then you collect evidence. That’s what investing is? Well, I think it’s a really unfair comparison, when people compare, you know, building a real estate business to putting money in mutual fund, like it’s complete apples and oranges. It’s not at all the same thing, right? Like, I know some people that work in a sales role, like say they’re working a commission based job, and they invest in RRSPs, or TFSA, or what have you. And if they took away their time, from making sales revenue, right making Commission’s to go and build a real estate portfolio, they would make less money, right? They make less money from their commissions, and then they’d be divvying up their attention between these two things. And that’s what I think nobody’s factoring in. I don’t know, that’s, that’s the feeling that I got, I decided for myself, I was like, well, am I going to keep splitting my attention? 5050 between real estate and my business? Or should I go all in on my business? Because you can only wear so many hats, as you mentioned, right? And, you know, we’re not even parents, yet I realised at some point in the future, I’ll have a third hat that I’ll be wearing. And that’s a lot of hats. So you kind of have to decide, like, do I want to be a generalist that I do 17 different things and make a little bit of money at each one? Or do I want to be just really good at one or two things and get some of my free time back. I remember at some point, like my Sundays, were all dedicated to bookkeeping, for our rentals and my business to planning out the week ahead, when it came to the rental properties to doing our cash flow updates to doing you know, all this tracking and doing all this planning for our construction projects that we had going on and updating, you know, where are we so far in the budget? And I was like, you know, is this going to be my Sundays for the rest of my life? Is there another way that we can do this? So now that I even decided I don’t do our accounting anymore, we brought on an external accountant, and especially because we’re both incorporated now in our businesses. So there’s kind of a lot going on. So I decided, You know what, like, I, I rather have a third party, advise us on this and be more like in the the business owner seat versus the accountant seat? And I’m learning a lot from that. Right? So

Erwin  

you you want to okay, what are you learning? What are you learning from having an external accountant, second set up,

Dominique  

I’m learning the corporate side a little bit more. So we did, we’ve always been working with self employed people a lot, right? People that are not incorporated. And now, I’m getting to apply a bit more of those, like technical concepts that I’ve learned in school, or that I’ve learned through my CPA programme, but that I haven’t seen that much in detail in real life. So I’m learning a lot from that, you know, and as we know, you know, a lot of questions people have is, should I incorporate? Should I buy properties in my corporation or not? So doing a lot of that analysis for ourselves has been very interesting. And then what you’ve decided for yourselves or university for ourselves. I mean, that’s maybe another topic, but we we decided that we’re probably going to put a stop at five properties, to be honest.

Erwin  

I mean, not buying another one or whatever. Yeah,

Dominique  

exactly. If we buy another one, we sell one and, you know, buy a different one, but we’re gonna keep five, five properties. And so with that in mind, being that they’re already purchased personally. We’re going to keep them personally. And then we just To pay ourselves an income from our businesses, to supplement whatever other income that we need, so that we were able to control the taxable, you know, the taxable income that we have,

Erwin  

why Cabify? That’s No, it’s a, you know, full time real estate investor.

Dominique  

Because we don’t want to be, you know, neither of us want to be a full time real estate investor, we’ve made that decision. Right. And that’s been kind of pondering for a while. And again, I don’t want to speak too much on Richard’s behalf. But it sounds to me like, he likes the idea of having a business, you know, being a business owner, and actually having an occupation. You know, like, I think there’s something to that, like when you can go out and earn an income and do a job, you get this kind of immediate feedback loop, you know, like, say, yeah, like, you just do a job for somebody, you invoice them, they’re happy, you get paid. Like, there’s, there’s something to that, where you feel a direct, sort of looking for satisfaction. Yeah, you just feel like a satisfaction, like you’re actually involved in a community of people, right, I think, sometimes we lose sight of that, you think back to an old fashioned village, you know, you had the baker, you had the mechanic you had, you know, everybody had their job. And they all exchange goods and services with each other. And if you can go back to even a small, like a different version of that, you just have a more fulfilling life. And I think, you know, that’s what it’s all about is having a fulfilling life, where you say,

Erwin  

it’s gonna be that tiny, where you have that you can have that kind of small community where each,

Dominique  

you know, like, I’m, I’m a financial planner. So I do financial planning for people, I go and buy my coffee beans from our local coffee roaster. You know, I come in and say, Hello. And then I go in and purchase, you know, a nice coffee from our coffee shop nearby. And I go and get my lunch from the lunch person across the street. I know the owner like I, I’m really, I’m really all about that. Yeah. And it just feels, you just feel a connection to your community, when you just interact with people like that, right? Like, I’m involved on our neighbourhood Association board. And so there’s a lot of, you know, just being in contact with small business owners that have all kinds of businesses. And yeah, I think once you disconnect yourself from that, and you’re no longer you’re just, you know, sitting at home collecting dividends or collecting rental income, like, you’ll notice a lot of people that have quote, unquote, retired early or reached some kind of financial level, they pause for a while or maybe played video games for a year and you know, started pick it up maybe a, I don’t know, drinking or drug habit or something. And then they pause and then they go, Wait, is there something more to life? And then they go on, they start a business, they all do they all start a business because they realise that starting a business, you can still have some control over your time, at least in the long run, and you have more control over what you do what you focus your attention on. And even though financially they don’t need to, we all need some kind of belonging, like some kind of role that we that we play right?

Erwin  

Japanese called iki guy. Oh, yeah, there’s, there’s actually a word for it. It’s a neat words. It’s iki guy like it’s, it’s so memorable because it’s it’s a funny sounding word. Like Tim Ferriss talks about as well. The the Japanese believe that you need to have to have something to keep you going. My dad’s doctor even tells his patients never retire completely. Because you still need the mental stimulus to keep yourself going. He’s no television where people just like, like the body shuts the brain just shuts down. When it’s no longer challenged and doesn’t have a business you know, you can have a grandkid great character, you know, people have puppies, whatever, choose whatever it is you do, but you know, I’ll probably be always be in some sort of investment something because I enjoy doing it.

Dominique  

Yeah. And again, it doesn’t have to be a paying gig, right? I think that’s usually what occupation but you could be a full time volunteer if that’s your thing. And you know, that’s still a way to get that fulfilment. It doesn’t have to pay you money.

Erwin  

I don’t know full time dividend collector sounds like a good gig. So Dominique, you’ve met many beginner investors in all worlds, both probably in your in your local community and also in like the real estate investor community, like my word eToro. Far

Dominique  

Yeah, in our local community a bit less. So I only know maybe two or three real estate people in our city, but

Erwin  

I don’t know I don’t know how else to ask this. But what kind of advice do you give the beginner real estate investor?

Dominique  

Ah, honestly, my my main piece of advice is to know why you’re doing it. And I think I think I mentioned this to you before like, you know, we’ve all heard of this seven levels of why exercise that you know, we’ve all heard it, please explain. So you ask yourself, Why am I doing this right? Why do I want to build a real estate portfolio for example? And then your immediate top of the mind answer might be to have financial freedom or something like that. And then the second layer is, why do I want financial freedom? And then you answer that and then you kind of keep going deeper and deeper. And this is supposed to give you like this amazing, blow your mind kind of answer as to why you’re doing all this. Can you share yours? Honestly, no, because I have done the actual started a couple of times, and it didn’t really compute for me. And I realised that the reason why was because I wasn’t really trying to build a real estate portfolio, like my husband was trying to build a real estate portfolio. And I was participating in that. But I never said there was stars in my eyes, and I want to build a real estate portfolio. So it didn’t really work for me. But I think that I’ve seen some people’s answers is like, I want to start a foundation and I want to change the world. And I want to bring wealth to other countries and these kinds of really crazy, amazing sounding answers. And I’m like, but is that really what you’re doing? You know, is that realistically what you’re building? Or why are you doing that? You know, I think the reason why most people start is because they want to be a little wealthier, right? You’re kind of looking at your status quo, you know, like, Okay, keep working my job and keep putting a little bit of money away. And I’m kind of stalled, you want to be a step above wealthier? That’s where most that’s what most people want at the end of the day. And what does that mean? Well, that might be being taking some time back, right. And then what they end up doing is spending double the time working to build this real estate portfolio, they would work their 40 hours a week job and then work 25 hours a week to build this thing and miss the whole time of their kids growing up. And it’s like, well, I don’t think you had your your why exercise really thought through, right? Like, do you want time with your kids? Or do you want to be worth 20 million when you die, pick one, right? And then they tend to gravitate to be worth 20 million by the time I die, and then miss a lot of that time,

Erwin  

which is why I what I preach to my clients is you know, real estate as a side hustle is very rewarding financially, it doesn’t have to be a full time gig. Like I can’t imagine people doing the career advice, like quit your job, that you make six figures for you that you trained your entire life for and that you are in your highest and best purpose, quit your job, go be a full time real estate investor, be a full time landlord.

Dominique  

Or take somebody for example, that makes I don’t know 150 grand in their job, but their job is extremely stressful. So there’s a lot of people in that boat, right? They make 150 grand, they get that that’s a good income. But their job is like, you know, their boss is terrible. The job itself is terrible, their customers are terrible. And they’re like I need to get out. And the ticket we’re told is like, you know, retire with real estate. So go from this job 150 grand to owning a bunch of real estate properties, and then start that cash flow, then you realise I can’t make remotely that amount on cashflow, and then it’s like, well then become a property manager, or then become some other service. Be a realtor. And it’s like okay, but that’s that’s not at all, being a realtor is not at all connected to owning a couple duplexes is two completely different things now. Sales Professional, which which can be great, but well, your CFP, that’s what you were told originally,

Erwin  

how safe is a realtors income?

Dominique  

I mean, it’s just similar to any commission, right? You could argue as a realtor, we’re always going to need houses, right, similar to the argument about real estate being safe, but replaced anyway. So the person making 150 grand, you know, plan a could be retired with real estate, which we argued might be, you know, not the best solution. What about option B is finding a better job that’s more fulfilling, less stressful, and that might pay you I don’t know, 120. And then you make up the difference by investing in an asset. You know, like what about, you know, like, I’ve got so many friends and people I know that change jobs during COVID for jobs that pay them less, and there’s so much happier, they have more time, they sleep better. And just by having good financial habits, they were able to maintain a similar lifestyle and just be

Erwin  

happier. So only one Lambo instead of two.

Dominique  

Right? Yeah, no more the example of going from 150 to an amount less than that, you know, and I think that nobody talks about that, because it doesn’t sound very sexy, you know, go with less paying job doesn’t have to be paying less. But what about like, open up your other options, whether they pay the same or they pay less, or hey, maybe that new job will pay more that’s that’s obviously a win win. But you don’t have to, like, leaving a job you don’t like doesn’t mean leaving having a job altogether. There’s a lot of fulfilling jobs. There’s a lot of people I know that love what they do. And if you can’t find a job you like, maybe being a business owner is your thing, right? If you’re a harshly independent person, or you’re a very, you know, you’re like a type A kind of person, you’re self driven. Being a business owner can be awesome. And that’s something that I did that I never thought it would do. If you asked me 10 years ago because I didn’t know a single business owner. No, no, my parents were teachers. I sold most of my parents friends were also teachers are some kind of administrative workers. And I didn’t really know business owners. I didn’t really know what it was. I thought it was just kind of a separate class of people that I didn’t understand. And so is never computed to be a business owner that’s not on your career map when you’re in grade 11 careers class, you know,

Erwin  

you mentioned you were a financial planner. For those who don’t know, actually, I think there’s some people I still don’t know, how does a financial planner make an income and they make their money? Before you answer. There’s one thing I find, I find the all these novice investors who have hired coaches who are like they pay like $10,000 for them. They don’t ask enough questions. Anyone that any service provider you’re hiring? No, I don’t think it’s I think it’s fair question. How do you make money this? How does a financial planner make money in this? Like, for example, Google Mail article, Rob Carrick. I liked his stuff, because he okay. Yeah, he’s all right. He shared a link to a Google document with the list of like financial planners. I’m not sure if everyone knows there’s like a wide variety of financial planners, but the for example, the one in the list, he provided they were fee based. Yeah. And I think often is started at five grand for a financial plan. Yeah, I’m lucky enough to have context from charity that I know, a lot of work. Yeah. To tell someone what to do financially. Does that be accurate? Is that your experience?

Dominique  

Yeah. So I mean, most of those, they’re called fee only fee based is actually a totally different thing. But again, it’s only something you would know internally in our world, but fee only is like a flat fee, right? Like, here’s your fee, I’m going to give you a financial plan and basically like a roadmap to follow. So that is something that usually only CFPs do certified financial planners. And that’s something that I kind of do like off the record, like I’m, I’m able to do that. But I tend to believe that from the podcast. It’s not off the record, it’s approved. I mean, it’s not on my website, like if you go on my website, it doesn’t say Dominique does straight up fee financial plans. I just kind of offer it to people as it comes up. But a lot of financial

Erwin  

planners, do you explain why you don’t advertise it? That’s a good question. So

Dominique  

one of the main ways I make money is by managing investments. So say, or when you had 500 grand, and you wanted it managed by a financial planner, so I could manage your money, and then I get paid, like a 1% per year fee, minus a bunch of fees that I paid my overhead. And so that’s the way that I get paid for that it’s an ongoing fee. And for that kind of client, I do the full financial plan, right, we do a financial plan, we monitor it, we, you know, stay connected throughout the year onwards as their life changes. So for those clients, I’m already doing a financial plan. And by putting both on my website, if it’s confused a few people, they’re like, oh, like, do I need to pay you to do financial planning? No, no, like, by having your investments with us, you get that already? Instead of having huge paragraphs on my website, explaining it, I’m keeping it simplified for now. Maybe, maybe I’ll add a few videos. And also

Erwin  

Clickbank generally follows that same model. So I find and they’re the bit of the biggest marketers. Exactly.

Dominique  

So it’s a similar model as the bank, just that we don’t only have funds from the banks, right. Like, if I was RBC, I would just sell RBC funds, like we’ve got, you know, fidelity is one of the main companies we work with, I think most people know what fidelity is. And so we’re, we’re an independent investment broker at the end of the day. But yeah, that’s, that’s the main way that I work with people. And what’s nice about it is it’s kind of like having a lawyer on retainer, right? Like you, you know, you have your financial planner, somebody’s got their money with me. I’m with them, either until they leave or until I retire. And as I mentioned, I’m not retiring till I’m 65. So I’ve been here for a while,

Erwin  

which is like, what, 45 years from now?

Dominique  

You kidding me? I’m not 20 years old. I’m 29 years old right now. So yeah, baby. I’m not I’m not counting the years, let’s just put it that way. But I think as a business owner, the end of the day, you can just kind of hold on to the the main parts of your business that you should be doing. And then why would you retire at that point?

Erwin  

How many real estate investors do you think have a financial planner?

Dominique  

I’m not that many. I’ll tell you a couple of reasons for that. What I’ve noticed and from myself, also, like I’ve had some people that are real estate investors come up to me to see you know, if we could work together. And I have to say it’s, it’s a little bit awkward on both ends, right. So a lot of times, I noticed that real estate investors have been trying to find a way to say this very nicely. They they tend to be very, I don’t know, I noticed the very cost cautious except for when it comes to hire a coach. You know, like, they’ll watch every expense very carefully and ask a lot of questions about whether they should really be spending that money. Right. But if a coach has to be rather like

Erwin  

listening, but wants to be a property manager, you should hear this.

Dominique  

Yeah. So I’ve noticed that, you know, I’ve tried to, you know, for example, making a financial plan, right, if you’re a real estate, if you’ve got some real estate holdings and other personal assets, and you’re like, I want to know if I want to retire that’s a common thing, right? I want to know if I, if I can retire, go into a financial planner, that is perfect, right? But I noticed is that there’s a bit of a disconnect between how a financial planner would calculate your ability to retire with your real estate, versus what the client or the person with the properties would think, you know, like, they might have a bit of a wrong idea of what their cash flow is. And then you kind of have to explain it to them. It’s like it gets very granular. And I’ve just noticed a bit of a bit of a disconnect. I don’t know how else to explain that.

Erwin  

Are you going on? Are we times I’ve talked to people about like, like, we were talking before we were recording, for example, you know, one way to be able to retire in real estate is actually sell something for assets when you’re ready to, you know, when you’ve stopped working, right,

Dominique  

which if you use a financial planning software, that’s one of the things that you can actually put in, right, so I could put in 2037, selling duplex B and estimating it went up by 2% a year. So you can have all that math in there, which is nice. That’s really hard to calculate manually.

Erwin  

But I have these novices, it’s like they’re trying to help, obviously, they’re trying to help. Again, they’re novices though, so they just told me want to just keep refinancing it. Tell me why don’t why not just keep refinancing?

Dominique  

Yeah, that’s assuming that it’s forever gonna go up and forever that interest rates are 1.7% a year? And, you know, happen? No,

Erwin  

and again, my financial plan, Dominique,

Dominique  

that’s another thing, right, is that we know that you can take a loan against an asset and live off of that, you know, and mathematically, yeah, you could do that, right. But in real life, what happens is people don’t actually want to live off of loans,

Erwin  

you know, especially if I’m paying 7% on it. Like, you

Dominique  

know, that the math checks out, you know, you can do that. But people behaviorally, and that’s another financial planning concept, like, they don’t want to borrow against their assets and live off of that, like, in your mind, you’d be like this, this feels wrong. I know, I’m paying interest. I don’t like the feeling of this. So people don’t actually end up doing that in real life. And that’s actually another concept that ties into, you know, that strategy with Whole Life policies. Right. Okay. I know, you’ve heard about, you know, you build up this whole life policy, and you can borrow against it. And it’s a super nice thing. Yes, but most people are reluctant at the end of the day to go and borrow against their whole life policies. And I’ve seen it, you know, we manage policies, like people that bought them 1020 years ago, you know, that put 1020 grand a year into them, like, I do hold a few of those policies. And, you know, it’s now they’re in retirement age. And, you know, we mentioned like, Hey, you have this cash value, you can borrow against if need be. And now, you know, all of a sudden, they kind of forgot that initial conversation 20 years ago, and they’re like, Wait, borrow, I gotta pay interest. It’s like, Yeah, you, you were told was not with me, but with someone else. Some other advisor that’s now long gone, and they’re hesitant, or they’re reluctant. They’re like, well, I rather not take out a loan. And I’m like, well, it’s not a loan, it’s a policy loan, you know, it’s not the same as having a loan with the bank. It’s a loan against your own assets. People, when you see the math, you see that a checks out. But when it comes to like, day to day behaviour, they’re reluctant, and people don’t like having loans they don’t like to. So it’s a very advanced concept, at the end of the day that only, like an advanced investor would be super comfortable doing.

Erwin  

Because the alternative is a sell. And I have a massive tax bill,

Dominique  

right? Or the alternatives to live off your other assets and consider that policy to be what you leave behind at the end of day, right, which actually, a lot of people do, I think we’ve got a lot of people that have Whole Life policies for 234 100 grand, and they’re never going to need the cash value from it realistically, right? They’re doing well, they’ve got businesses, they’ve got other assets, unless they live to like 110, they’re never gonna have to dip into it. The

Erwin  

whole financial education, everything, especially I always see people ranting about on Facebook, they don’t teach this in school. I really liked the way that I think it was. Actually, you mentioned the psychology money, like the 401k, for example, is not that old, because previously people didn’t have money to save. You didn’t need a savings plan,

Dominique  

or everybody had unions, and they had like pension plans through their work that were completely sufficient to take care of their needs.

Erwin  

And then, for example, I had two gentlemen that are starting to read. And they were telling me how these market dealer is. It’s only like 15 years old, because chains have never been this rich. That’s probably like when you’re telling you’re talking about this mindset that people have like they have trouble borrowing borrowing against their whole life policy, even though it checks out. Like that’s just Yeah, because they’re doing it for the first time.

Dominique  

Yeah. And again, I think they don’t have to either right like a lot of people should take if you’re an adult, you know, you’re in your 30s 40s whatever. And you still have room in your TFSA for investing. You still have room in your RRSPs if it makes sense for you to use them. Just maxing out both of those can put you in a really good Financial Position, right? If you’ve maxed out your TFSA, and your RSP, and you’ve got a rental or two, and you otherwise have a good income and like a reliable job that your skill set is always going to be needed. We already in the 1%, right? And I think people don’t realise that, like how well off you are, once you take some of those boxes, and I think I’m in a unique position, because I see people’s finances all the time, right? Like, that’s my job. So I, when someone comes to me and goes, like, Am I doing okay, and they’ve got, you know, only, quote, unquote, three rental properties and a really good job and a half paid down house. And I’m like, Yeah, you’re actually doing great. And sometimes they don’t get to hear it, because they only see themselves, they only compare themselves today, to where they would like to be where to they would like to have three more million dollars and a Lamborghini, and they don’t. And that grounding that you can get by talking to a professional, I think goes a long way. And that’s what I get, you know, I don’t have a financial planner of my own. But I have an accountant. That’s part of what I wanted is I wanted to have other professionals, right, that could be like a third party, but grow along and see how you know how I’m growing in my business and be able to advise, like, sometimes you just want to ask someone like, Do you think I’m doing all right? Do you have any things you think I should do slightly differently? There’s value in that and yeah, like, you know, you mentioned people hiring coaches, but rarely financial planners. If you just had a financial planners perspective, even I know, like, you mentioned a financial planner, full engagement, sometimes like five grand a lot of financial planners do smaller engagements, you know, where it might be 500 bucks for like a detailed consultation or 1000 bucks for like a simpler one page sheet of recommendations. There’s other probably

Erwin  

simpler as well, versus like someone like myself with I don’t know what someone would charge me. Because there are just so complicated.

Dominique  

Yeah, you and I probably have similar, you know, in terms of complexity, yes. Probably a bit more complicated

Erwin  

for corporations. Yeah, like businesses, we only have

Dominique  

two corporations and for rental properties, but I consider that to be compared to what I see that’s fairly complex. Yeah, right. Yeah. And if I went to a financial planner there myself that can you build us a financial plan, I wouldn’t get a lot for 500 bucks. 500 bucks would be like, a consultation, where we go through a few of my top of mind questions and where I might not get complete answers, right. But even then, like, I’ve paid a few one time consultations for professionals in the past, and I got a lot of value from that, like paying a CPA for an hour, like, let me drill your brain with stuff that, you know, I want to get a second perspective on, I think there’s a lot of value in that, like, I think we shouldn’t limit ourselves to hiring like a business coach only, and then slashing all the other professionals, although I don’t want to put all CFPs in one bucket, right personality fit is important. So if you walk into, I don’t know, some random financial planners office, and the financial planner doesn’t really get what you’re doing with your real estate, like they’ve never seen it before. They don’t really get it, maybe that’s not the right person. Right. But there’s not many like you that they want. If they don’t know what a burr is like that might not be the right person for you, if you own multiple properties, because they might not really get what you’re doing, right?

Erwin  

There’s not many that I can imagine ones when you

Dominique  

charge a flat fee, right, you’re not gonna get a flat fee person at the banks, that’s only independent firms. At the bank, they’re only going to do a financial plan for you if you have at least 250 grand in mutual funds with them. Right, which most real estate investors don’t. If you happen to have that, then maybe, maybe they’ll do a financial plan for you. But I kind of doubt that they’re going to incorporate all your rental properties into the mix. It might be a little above and beyond

Erwin  

what is your opinion on on like mutual funds and ETFs?

Dominique  

I think, again, like as I mentioned before, I don’t think it should be compared to real estate at all, because it’s not at all the same thing. But I think honestly, it’s a safe, steady investment that isn’t leveraged. If you have it in a TFSA all the money you make is tax free, that counts for something. And I think people should work closely like if you took your real estate holdings and you know, did an actual rate of return calculation and compared it to a good mutual fund over a 510 year period. You know, it’s not completely off base. I think if you look at your mom or your grandmother’s mutual funds in a conservative portfolio, yeah, the returns might be a little underwhelming, but she’s not going for high returns. So you can’t compare your your grandma’s mutual fund to this really high risk strategy that you’re taking on. What makes real estate higher and returns when it’s done correctly and an upwards market is the leverage part. Right and that’s also it makes it risky if we just bought properties in cash, and then just held on to them in a 50 year period if the market wasn’t this crazy, in Toronto, for example, you know, we would make moderate returns, and then you back out all the fees from selling and you know, it’d be kind of like buying gold. If it wasn’t for the leverage, you would just be buying it and holding it and eventually selling it.

Erwin  

You said the word word does? Well, not all financial planners like real estate, that’s like a gold.

Dominique  

Well, and again, the financial planners depends on they get paid, right? Like if their fee only they charge a flat rate, they might not hate real estate, like if you just own an apartment building, and you tell them I own this apartment building, they might be like, Cool, good for you. That’s a pretty safe asset class. But if you’re flipping and you’re like, aggressively doing these hardcore renovations, they might have an aversion to it because it feels risky, right? And planners tend to be a bit more risk averse, and they just, they’re not enthused, they’re not excited for you that you’re taking on a lot of risk in a shaky market, like they’re not going to be excited with you. In the same way. So sometimes I think real estate investors look at that, and they get kind of bummed out, they’re kind of like, oh, this person is super lame. You know, it’s like, when you have a lawyer that all they have all the time to say to you is like, well, I don’t know. Well, I don’t think so I don’t think you should do that. You can find a lawyer that’s not like that. There are some that are a bit more balanced, where like, you know, they’ll kind of level off with you, but they’re not always going to be giving you bet news. Same for a financial planner.

Erwin  

What’s your thoughts on gold and silver and Bitcoin?

Dominique  

Well, I don’t I’m not going to speak on Bitcoin because again, speculation, but like gold, silver, I mean, you know, if I had many millions of equity, and I was like, looking to diversify in another way, maybe I get a bit of gold? I don’t know, it is so well, preservation strategy, right. And I think people hype it up as being this anti government thing nowadays, you know, like, don’t trust the government don’t trust the stock stock market buy gold and, okay. But again, it’s it’s not, it’s not going to be a wealth builder is just a wealth preservation strategy. It could be like, your safe thing that you keep aside that if something crazy happened, you could always trade it in for your money, I guess. I don’t think much of it. I just think it’s, it’s too hyped up as being this, you know, anti government alternative nowadays? And

Erwin  

how do you advise your clients on on handling inflation?

Dominique  

I think I mostly advise people honestly, on just making sure they’re, they have a skill to offer the marketplace. If you’re a business owner, just focus on growing your business as much as you can, so that your, you know, your revenue keeps up with inflation. If you’re a sales professional, get better at sales. If you are, you know, otherwise climbing up the corporate ladder, just make sure you know your value and that you’re negotiating your salary. I think that’s the biggest thing people can do. And so you kind of have to know, like, look at yourself, look at your family situation and go okay, what’s the best use of our time? Is it to increase our income? Or is it to cut our expenses? And for some people cutting the expenses is the best place they can allocate energy. But for most people, it’s increasing income, or for some people, it’s both right. So you take take an example of a stay at home mom, right? Like, she’s home, she’s not earning an income. The thought of starting a side business while caring for a three month old is maybe not super great, right? So this person might be best served by watching their expenses and just cutting things like takeout, right, you can, you can save a lot by just cutting those extras that we’ve gotten used to write all those quick, convenient services.

Erwin  

Disney plus. Shirky, Christian Freeland

Dominique  

Yeah, never, never mind that but just cutting like a skip the dishes. Purchase once a month is way more, you know,

Erwin  

I’ve been opposed to never bought a Starbucks.

Dominique  

So I think even just looking at your family unit, you know, also in us is like me and Richard, right? We look at okay, as a family, right? As a family always look at your family as a business. I know sounds kind of, I don’t know. That’s how I look at everything. So you list out like, what are skills? Right? What are our income sources? What are our core expenses? What can we do about them? So for us, like one of our largest expenses is our mortgage on our new house. And because we have a lovely variable 6% mortgage. Fantastic. So one thing we can do about that is to use some of our rental income to offset our customer mortgage, which is great, but otherwise, we’re just focused on having better businesses, right, like getting better at getting leads and getting better at sales and doing valuable work work that people find valuable, so that they’re happy to pay for it. You know, I think if more people focused in those areas, even people with a job right like if you have if you’re employed somewhere you have a regular T for job, and you want to make more money instead of just waiting every year to see if you’re gonna get To raise maybe it’d be more proactive about it right? Like, try and put yourself in your boss’s shoes, like what would be more valuable that I could be doing. And it doesn’t have to be working overtime, it could just be like doing different things in your job doing things a little deeper. Or just asking your boss like, what would be more helpful to you that it could be doing to go up in my career? Right? I think those are things that people have just kind of been comfortably just doing their job for a while. And maybe it’s time to be a bit more assertive.

Erwin  

And for the full time real estate investor get better at raising capital.

Dominique  

Yeah, I think we could have a whole other conversation around, you know, the security around lending out money or using lent money. Oh, yeah.

Erwin  

You even mentioned, your properties are all just your your own. Like even though you went to those like those, like the group that you’re a part of that you tend to, like they were all about? Oh, PM.

Dominique  

Yeah. And we just never like we’ve thought about like, Should we have a joint venture, you know, but for us, it would have just been like, there wasn’t a huge advantage, because we had some of our own capital, whether it was cash, or like very low interest, secured line of credits, like we have capital, we have the skill set, we’re in the location. So there wasn’t like a missing gap. Like we didn’t need someone’s capital that badly, we were able to qualify for mortgages. So I think if there was like, a big gap in something, whether we couldn’t qualify for mortgages, or we had no money, maybe that could have been something that would have made sense, but I’m kind of glad we didn’t do it, you know, because then when you don’t have a business partner, you don’t have to go and like crawl back to them, when things aren’t going well, or when the interest rates went up, you know, I feel like having to present like a quarterly report of your financials to your JV partners like that, that makes it a business. And that’s not passive by any means, you know, and it just adds more weight. Like, if I’m going to lose money, I rather just me lose the money and not have to crawl back to somebody else to say that they lost money to

Erwin  

even the quarterly reporting was pretty easy for you to do what I call like investor relations, like keeping your

Dominique  

capital. So either it would take up more of my time, or I would be paying my accountant more to actually have a quarterly report ready for us. So I think that’s another phantom costs, right, and other costs that

Erwin  

don’t pay your accountant as a real cost. Yeah, and not

Dominique  

just to do your tax return, but to maintain your books throughout the year. And if you’re gonna have to do reporting for JV partners, you need quarterly, like completely done up financials. And there’s a cost to that. You know, like, we happily pay several 1000 for bookkeeping and accounting every year, and I’m glad to do it. But I think a lot of people don’t realise the cost that goes with that like, but my business is super complicated, you know, like, we get income from all kinds of broker, all kinds of insurance and investment companies, right. And it all has to be reconciled. And, yeah, there’s a lot to that. And we got payroll, and you know, business loans, that kind of stuff.

Erwin  

Really difficult question. Asset allocation convention, many different categories of investments, mutual funds, gold, silver, whole life, owning real estate outright. We haven’t even talked about passive real estate, like either private equity, or like REITs. How should one split it up?

Dominique  

I think I think for most people, it’s easy to kind of look at it as a pie chart, you know, you look at a big circle, I

Erwin  

literally have a picture in my head,

Dominique  

you could draw it out on a piece of paper. And then for you know, anybody listening to this, I guess, just draw it out and then drawing the circle, like, what do your assets look like right now, right, for most people, is probably equity in their rentals. And then a separate part of the pie chart is like equity in your home, like your principal residence. And another part of the pie chart, if you’re a business owner, like myself is like the actual value on paper of your business, what it would sell for. And then another part of that would be whether you’ve got a pension through your work, you know, looking at the actual value of that pension, I think is important.

Erwin  

Do many people even know how to value a pension? I’ve googled the manufacturers

Dominique  

statement, you don’t have to do a crazy formula, like it says on your pension statement somewhere down there. Like, if you were to transfer this out, it would be 542,000. Like there’s depends on the pension or like it depends. But that would be part of your part of your asset allocation. Right? Or if you’ve got RRSPs would be part of that too. So I think for most people, just knowing where they’re at right now is helpful. And then you have to ask yourself, you know, maybe involving a financial planner be good idea too, but just looking at yourself, like, are you comfortable with this allocation like does that does it make you uncomfortable? That 80% of your wealth is in real estate? Some people might say that makes me comfortable? Because real estate safe Okay, fair enough. As long as there’s many different types of real estate or maybe your spread in different sectors, like if all my my real estate for example was any various Small town with no economy, or that was relying on one economy, I’d be pretty spooked. Right? It’d be like, well, all it takes is for that one industry to leave or to close down. And then my properties actually go down in value tremendously, because nobody wants to live there. So that would be something to be concerned about is the different types of real estate, the location, you know, the concentration, are you buying all these properties on the same street? What if that street ends up being the crappy part of town eventually, right. And then looking at those other asset categories is like, if you have RRSPs, and they’re in mutual funds, for example, and you’re not super impressed by them, maybe actually make an effort to see if there’s better mutual funds out there. I think people just assume they’re all the same, or that they’re all bad. And then sometimes people bring me their mutual funds. And I’m like, You’re in some conservative portfolio, like, of course, you’re not impressed by its growth. And I could tell that you’re more comfortable with risk than someone in a conservative that would normally be an in conservative folio. So let’s change that. And that can be a huge shift. But for me, like right now, the our main wealth is in real estate, because we agreed to start with that right away, because you can take advantage of the leverage. But I’m planning like, as soon as we sell our first property, I think we’re planning on selling one of our properties in three years. And when it renews what, what our 1.7%, mortgage renews, I told Richard, like, what I want to do is I want to sell and take all the proceeds, and put them in our TFSA is and mess them out. That’s my goal, like I want to start having that more like genuinely passive source, I want to use up that TFSA room because it’s going to be over 100 grand each by then. And, you know, then you have 200,000, that is earning money completely tax free, like all the money you make is tax free. So if you make, say, 8% a year on average, that’s what 16 grand a year tax free. So you can either take it out and use it or you can let it grow. And isn’t that amazing? Like, that’s no work. And if you have a property that cash flows, 16 grand, like you have to do a lot of work for that.

Erwin  

Okay, you know, 8% cash on cash return? Yes, please wear?

Dominique  

Yeah, I mean, we kind of have that here to be honest. But you know, it’s a lot of work. And there’s a lot of risk. And as soon as a tenant leaves, you’re spending a month working to fill that vacancy, like, that’s work, I’ve seen Richard work to fill a vacancy, like, he’s on the phone, like for weeks, and then he drives there to meet with somebody, and then it’s, it’s a dud, or they don’t show up, or they were looking for something different than he drives back, you know, you forget how much time you’re spending. So I’m looking forward to changing our asset allocation a little bit, to having that truly passive piece as a part of our overall portfolio. Like, we’re still always going to have those active properties. But I don’t want to have 25 of them. You know, like, I don’t aspire to that at all. I don’t see the appeal. And thankfully, I looks like Richards on the same page as me. So I think that’s a big part of it is agreeing with your spouse on your on your investment strategy, or the CFO,

Erwin  

you cut them off from financing, there’s just cut off. Yeah. Well, would you be putting your 100k TFSA into place today?

Dominique  

I would be Well, honestly, I’ve been it’s been three years, I haven’t fully drawn that out. But honestly, probably just some kind of growth funds, like I’d have it spread between a couple of different funds, like usually we build like four or five fund portfolios that are complementing each other. And then that way, when you if you need money from it, and you’re in a market downturn, not all five funds are going to react at the same time, right, some will be up, some will be down. So for example, like a Canadian value fund would have been up during all of COVID, like weirdly, keeps going up versus a growth that global growth fund was doing the opposite, during that same time period. So if you’re invested in a couple different funds, they’re all you know, kind of hovering at different rates. And so you can access capital without taking a loss.

Erwin  

So you would find the fun though, you’ve never tried to try to own individual stocks that would mimic

Dominique  

I don’t have interest in that because I honestly like part part of what I do I’m so big picture and everything that I just I don’t have an interest in individual securities like I don’t. And that’s why I stick at the mutual fund level because I like the idea that there’s these portfolio managers that like all day, all they do is trade stocks, right? They research the stocks, they buy them to sell them and I just don’t have an interest in that. Like I opened up a self directed TFSA for myself at some point I bought a couple of stocks but I realised like I’m really uninterested in it. And I don’t want the human emotion aspect to kick in when it’s my money. I almost want to be removed from that and have someone just making rational decisions in the background. fascinated me.

Erwin  

That’s pretty cool. I really liked the idea that you’re doing five different funds. This made it so they they move differently. That way you’re never caught in any market.

Dominique  

That’s not Never Never say never right. But yeah, you would think but they’re not all down at the same time. Yeah, normally trying to

Erwin  

think of a scenario where that happens, basically a meteorite hit ever hit Earth.

Dominique  

I mean, last year was a really weird year for like more conservative investments, you know, because the interest rates went up so sharply that the bonds got all devalued. So people that were invested very conservatively last year, were like, totally let down by the returns were like people that thought they were in the safest investments in the world might have been down like five or 8%. And they were like, holy man, like it was the first time it happened in 100 years. That was very, very interesting. But going forward, they’ll say, for investments to do really well, because again, like, the interest rates are up, right. So the interest rates that you make on a bond are higher. And that’s great.

Erwin  

Fabulous, Dominique, this has been very enlightening for me. Thank you so much for coming on the show. Where can people follow along your journey?

Dominique  

So I’m mostly on Facebook. So I’ve got my personal profile that people want to connect personally. But please, if you post a lot about coaching and stuff, yeah, I might unfollow you don’t take offence to that. And then I’ve got my business page as well on Facebook or my website. And then I post on Instagram too. So just under my name, domination are

Erwin  

fabulous. And live for listeners benefit. I’ll have it all posted in the show notes.

Dominique  

Oh, and on LinkedIn, I post a lot of like business stuff on LinkedIn. So for the entrepreneur types, or real estate people,

Erwin  

any final words for the listener, especially someone who’s newer, or someone who’s in a tough spot, but Dominique, just listening to you like, two different people. But Dominique just said, his observation because you’ve been like, I can even observe your own journey. Like you’ve been like the rah rah rah buttons. Right? And here you are now. It’s very different. And it’s totally cool. I think every restaurant is going to journey wild about that experience in themselves. There’s no right or wrong for anyone. I do think is wrong to lose money, though. Yes, yeah. Yeah. Any final words you want to share?

Dominique  

Honestly, like I think, what are you publishing this episode? Just based on timing? Is it after before the tax deadline? Deadline after the tax deadline, okay? Well, if you if your accounting stuff was a mess last year, and you know that you should do better just bite the bullet, get an accountant. And if their fees are higher than you thought, that’s probably a good thing, it means they’re actually going to take time with you. So I think people should go invest with an accountant. If you know if your great aunt does your bookkeeping, that’s, that’s great. But you also need an accountant to bring it all together. So I think if more people invested in working with an accountant, the world would be a better place. And it’s not really a shameless plug at all. Like I, I don’t really work with real estate investors that much like if they have one or two properties, sure. But as soon as it gets to like corporate stuff, or having multiple holdings, I recommend going to an actual accounting firm.

Erwin  

I might know of one.

Dominique  

You might know of one, I hear that your wife does accounting stuff. So yeah. And then on the investment side, that’s my final word honestly, is just the investment side. Raised professionals, not not just coaches.

Erwin  

Fabulous, Dominique, thanks so much for doing this. All right, nice being on this podcast.

Erwin  

Before you go if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already then sign up for my newsletter. Sign up for yourself but so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell I love teaching and sharing this stuff.

 

 

To Listen:

 

On iTunes: https://itunes.apple.com/ca/podcast/truth-about-real-estate-investing…/id1100488294

On Stitcher: http://www.stitcher.com/s?fid=87335&refid=stpr

On Spotify: https://open.spotify.com/show/6Z8yd37AQfQI5DK0J0Xwzz

On Google Podcast: https://podcasts.google.com/feed/aHR0cDovL3d3dy50cnV0aGFib3V0cmVhbGVzdGF0ZWludmVzdGluZy5jYS9mZWVkLw

Youtube: https://youtu.be/rYg24zQQFQI