Flipping, Private Borrowing & Lending In A Market Crash With Diana Lizarazo

**Transcripts are auto-generated.

 

Erwin  

Hello, welcome to another episode of The Real Estate casting show. We have a whole bunch of great stuff lined up for the New Year guests that we have to put up our fantastic include today’s episode, we’re rolling out a lot more educational content. So stay tuned to our YouTube channel, my Instagram, this podcast, we’re basically doubling up in terms of the amount of education that we’re providing and sharing on this on our all of our channels. There’s a lot of bad advice out there. And it saddens me how much how many people are out there interested in lending their own pockets rather than actually helping people get ahead in life. My team and I are taking it upon ourselves to put out stuff that actually works. So that is the treatment real estate investing show. Straight up. Last week, I met with my clients, a whole bunch of our client, my clients who you know, from five to the last 10 years. For those who don’t know, I’ve been a realtor and coach, investor specialist realtor since 2010. So I’ve had I’ve had lots of clients with me for like 10 or more years, and they are doing outstanding. Sadly, there’s a lot of people who are suffering right now who are struggling, some may be approaching bankruptcy, some are being forced to sell, feel really bad for those folks. And at the same time, there is an incredible opportunity on the horizon. So anyways, we have it sounds like a bummer. But we have a wonderful guest today. Actually, I think Dana’s extremely refreshing. I’ve been going down this rabbit hole of investigating what happened with some of these companies that went bankrupt, trying to understand what went wrong, speaking to one of them as well, but that’s that’ll be, that’ll be for another episode. Today we have someone who’s actually successful, and she caught me off guard. We’ll be honest, Diana’s Instagram handle is extremely underwhelming, not underwhelming. It just investor girl, Diana, when it really should be sophisticated investor, Diana, but I get it. We’re Canadian. You know, we’re supposed to be humble and modest in our marketing or social media, whatnot. But screw it, Diana is legit. She shares her experience in numbers flipping more recently, she exited successfully exited a $2.3 million luxury house in Toronto. She sold it this year in the middle of this massive decline. She just did a century home in Hamilton, Ontario. And she even does private lending on a property Windsor. We talked through much of this. So there is a bunch of numbers in this episode, including deal numbers and mortgage rates. And that’s particularly important because a lot of the capital that Diana uses is private. So but now, it’s not talked about enough, I think, or maybe talking about too much because there’s a lot of people hurting from too much private money. But Diane shares how she personally lends her money and she talks to her experienced borrowing as well on these projects. Diana has taken expensive courses and Masterminds as they leave. She mentioned three of them on the show. The quality of some of them were questionable or questionable is questionable. As folks from those masterminds, which were years ago, folks that she met at the mastermind, are now unfortunately bankrupt, financially, potentially other ways bankrupt. But that’s right, some courses members, coaches, Financial Group real estate influencers, there can be a negative return on your investment of your money and your time. I myself have the same challenge. I was looking for Zhan YouTube for some training videos to watch in terms of like personal fitness. There’s like so much that’s not good. But yeah, the internet in social media can be both wonderful, and it’s truly terrible at the same time, it is your job as a discerning investor to conduct proper due diligence on anything you consume, and invest in including your time and money in education. Diana, however, with her conservative nature and her projections in her husband as a still general contractor, my understanding is he does that for a living. They have navigated this declining market and exhibited flips, profitably, some very profitably, some less profitably, but all profitably, which is which is a marvel in this declining market. Again, it’s not without challenges, Diana goes through many of them. And they were some of them are doozy. And that’s the point of the show. We discuss both what works and what doesn’t work, so that you may learn from the lessons I may learn from the lessons as well. So side note, I’ve noticed a trend where an investor’s ability to execute on construction or renovations will make or break their deal, especially the folks who are attempting to go full time in real estate. In my experience, if you work continually with the best of the best contractors, in my experience has been instrumental to my own portfolio, my clients in our success, those unable to execute, they’re in for a whole pile of hurt, especially when they’re if you’re paying private money or anyone should have if you have a vacant property. No one likes vacancy, right? I don’t like that. You can see I don’t like paying into vacant properties and then some least folks who tried to become full time investors, flippers burn investors. Unfortunately, they have multiple properties that are vacant, burning a massive hole in their pocket. It’s not that any contract is perfect. I had some samples of that when I have the term my own properties. Anyways, there’ll be another episode. But if you marry one, if you marry a great contractor like Diana did, she’s married to one, you can mitigate a lot of risks with hiring the right contractor and proper oversight. That’s something that we do for our clients, we connect them with the same contractors that we use personally on our own properties. And we regularly check in with our, with our contractors, because we need updates on quotes and renovation statuses. And while we all have those conversations, for our own properties, we’re having those conversations on behalf of our clients. As we hear it. In real estate, we do volume, as you can imagine, hence, we are usually our contractors top referral source, and we’re all looking for we as a team, we’re all looking for that Win Win, win result, and win for the contractor. We want them to make money win for our client, we want them to be a successful real estate investor A win for us, because we want a happy client who buys more houses and sends us referrals. That’s been our model for a successful business. We are in this not just for the long term, but rather intergenerational relationships to create intergenerational wealth for ourselves and for our clients. As we literally have already three generation clients, we have grandparents, parents and their adult kids as our clients. So and that only comes when you produce results for folks. And that includes our general contractors, some of them our clients, as well. So without further ado, I give you Diana, hi, Diana. Hi, what’s keeping you busy these days?

 

Diana  

actually feel like I’m not busy? Because, yeah, real estate wise, I feel like you know, all our deals, like last year was super busy. So much going on. Now with the transitions and you know, recession coming, or maybe we’re in it, I feel that, you know, like, thinking of February, like, I could not make any numbers or Alright, so things just went very slow. At least on the active side, I mean, some private lands, we were doing it but you know, we changed, right? We did a lot of, you know, last year, I was doing seconds would not even touch a second this year. You know, so just even just the word just so many changes happening and having to adapt to what’s what’s going on.

 

Erwin  

Yeah, I don’t know if anyone thought that things were shift so violently, not violently. But

 

Diana  

I felt like I felt this year things were going to plateau. To be honest, I did feel like that they were going to plateau. And I think that’s why for like the flip does telling you about I think, you know, I did We did well, like it went fine was because I had that expectation that I don’t think things are gonna go up and I felt this year was going to be like a plateau. And it really solidified when we did that super high up. That was just like, Oh, wow. And obviously not counting at the plateau from that top. I mean, as in like from last year, you know, I was thinking that this year would probably be more of a plateau type of thing. Pretty cool.

 

Erwin  

Can you tell us about your most recent flip? Because I’m sure we both think you’re insane. Because we’re recording this. We’re now mid November. So when When did you acquire the property?

 

Diana  

So this one actually came with a lot of problems? Because we bought it last year? So we actually bought it in September of last time? No, no, it wasn’t a bad time. We were supposed to though we if everything went as planned, actually, we would have been selling at the height of the height of the market. So we would have actually probably made a lot of money. And I mean, so like you would have been like like that we probably added we were probably added maybe like a 50 60k to it like Yeah, well what happened was, so the person that was selling the home, they were losing the property, because of a business deal that they did that they were waiting for that money to come back. And they were it was just like a huge deal. And they needed some time to wait for that money to come back. So we did a right of refusal of right of first refusal, and to allow them to buy back the House. And so when we looked at the contracts for the business, and when the payments would be coming back, it should have actually come back within that year. It was literally actually through the contracts they should have been like within that month, like that’s how but the banks are going to already foreclose on it. So we learned a lot about contracts for straighter refusals and knowing how to write contracts properly now, because that was a problem. So because the guy was stalling because he wanted to buy back his house. He kept on using many stall tactics. So imagine that we started negotiations in January, and we didn’t find out, you know, 2021 and we didn’t finalize until June. And then yeah, and then he didn’t close in July. The closing was in July. And then so we didn’t think to put it on the market in August because cuz we’re just like it’s slow season, let’s wait it out. And then we put it on the market mid September, and then that one really fast a week and a half, we got an offer, which I would say was very surprised because the stats right now are 30 to 60 days. So that was like, amazing. And we got her number which was same thing that was amazing. We were really happy about, you know, that, that it went at least at what I went well, in that sense, it’s so it’s, I felt like for all the stress that we had to go through with this guy, we still reap the rewards of it. And it was because like that, I did the analysis with thinking what happens if issues come up, and making sure we were nicely padded, because we knew this was like an emotional type of home. So you know, with that comes a little added baggage, which we kept, we got all of it, you know. So, so it came with its drama, but it went really well. And I attribute it to like that conservative numbers. Like I think it’s so important to like, run the numbers and make sure that it makes sense and you’re not hiding it. Or one of the things that I see a lot of investors do is predictive values, you know, oh, you know, it’s this and I do the flip. And by next year, we’ll be up like another 10%. So I’m good. I don’t do this. Yeah, scary stuff. I think very

 

Erwin  

scary. Yeah. Now we know it’s really scary, but even in any time. Okay, so Okay, so I’m having trouble. The timeline. started negotiating January 2021. You closed in September 2021.

 

Diana  

The actual clothes? Yeah. The actual one with the with the new sellers. Yeah. And sorry, the no, sorry, the the offer was in October, like we put it on the market in mid September. So we went probably firm like, end of September or beginning of October. And then we close close at the end of October or I would say like is actually November 1. So beginning first day of 2021 2022. This is on 2022

 

Erwin  

or sorry. Sorry, I’m asking when you got into it when you got into the

 

Diana  

last year. Yeah, yeah. So I bought it last year, September. And we just sold it now. I don’t know if first

 

Erwin  

so the timing is terrible. It can be worse but but it looks like you did the homework to make this work out.

 

Diana  

Yeah, yeah. And like that we had Plan B’s and stuff because we did discuss because of all these issues if we had to hold it then what would happen so we also weren’t in a situation where if let’s say things were just really really bad like I know other people were they have to hold it we were we were also able to hold it but are we were trying to maintain plan A and see see it through because like that at the point is still everything still looked favorable. It was just Yeah, it was still favorable is just like got another couple of months still waiting kind of a thing. But things were still things were still good. Okay,

 

Erwin  

so tell us about the property. single family detached

 

Diana  

single family detached? Yep. Like three bedroom. They got two and a half story. Oh, yeah. I had like, also like a huge, like workshop in the back. So we never did anything with that. We left that out as was because there wasn’t enough space at the front to do what you needed to be able to actually make that an accessory dwelling. Maybe now you could maybe maybe with all the changes. Yeah. But our strategy was just to like that foot just to flip it and just single family home like a quick and like that, because we also at that time also had in mind was that we were selling it back to him. Right. So like, he probably wouldn’t have wanted that. And for us, it was just, it just didn’t we weren’t sure if it mates or actually even in running the numbers to be honest, at the time, it didn’t make sense to put the money into it because it was quite expensive to, to put it in and the timeframes and everything because we did we wanted this to actually be like six months in and out that was the plan like so. So in six months, we wouldn’t have been able to get the permits and everything done for the back unit. So it was just not really in our plans.

 

Erwin  

So the plan was to do like, How bad was the property? Didn’t you a lot

 

Diana  

it wasn’t actually bad. Okay, it was actually not very much renovations needs to be done. I would say bad in the sense of we did have to get both the roofs done. We had to go okay, yeah, so we had that was there was so there was like a water issue upstairs in one of the window like one corner of the house. So we did need to get both the roof done because that was bad. The basement so there were some bad things actually. It’s not I’m saying like yeah, it was literally, like, aesthetically, it wasn’t bad. But the basement for example, is unfinished and it was like leaking from everywhere that like I don’t know what place didn’t have water coming out of it. It was just leaking like crazy.

 

Erwin  

Not that bad. It just turned into basement leaking everywhere.

 

Diana  

But it was it was actually not expensive to fix. Because the way the way the leaks were coming it was just like deteriorations like for example, leak was coming through the window for example. So it’s just you had to do proper sealing and fix the area around it. And then there was one crack going through, which they’re able to do, I think it’s called the injection molding and fix it. And then like that there was plumbing that went out to the, to that workshop. And that wasn’t done to code at all. And that’s where a lot of the water was coming in. Well, there was like a flat there was like a, like just plumbing going straight like that. So it was like maybe two feet from the ground, not even like from the floor from me like a foot from the underneath. So we completely just took it out to because that was like where the major water come was coming out. And then we from the interior, we waterproof the whole basement.

 

Erwin  

Not that bad to have a waterproofing job. I

 

Diana  

mean, it’s not that expensive. Like when I think of like exterior waterproofing, that’s like insanely expensive. This wasn’t like even though it had like a lot of water issues. It wasn’t really it wasn’t expensive. Renovations, defects like like it wasn’t like there are some where you have to do the waterproofing from the outside. So I feel like those ones are really bad type of water or like water issues. And so this wasn’t that type.

 

Erwin  

So did your husband’s team do the interior or interior waterproofing? They did? Yeah. Contractor for no. price difference? Yeah.

 

Diana  

Yeah. My husband did it.

 

Erwin  

saves you a ton of money. 1000s of dollars.

 

Diana  

No, no, we’ve had companies come in. But again, maybe because there’s our subcontractors they charge differently to like clients, because it’s odd to me. I was like, I know, there was one job that we hired someone else to do it for a different one. And I can’t say I remember what it was. So this number may sound ridiculously low. But I know it wasn’t a big deal when two though. But they did a waterproofing and it was like like a 1500. Yeah, but again, it’s like we didn’t know them. That was the first time we had met them.

 

Erwin  

If it’s not a huge drop in costs, that’s close. Just in my experience. A lot of people are proven copies of markup like crazy. Like, that’s my own property. My own property in Hamilton. It was it was over 10,000 for interior interior. Yeah. It was the entire perimeter, though. Yeah, it was the entire perimeter.

 

Diana  

Which kinda did you use the like the blue skin? I don’t know, all the terms, like the blue skin the whole thing? Because we didn’t have to go to that level. We went to

 

Erwin  

a higher level. Yeah. Because because the city wanted it. I hadn’t needed an engineer to approve it all.

 

Diana  

Okay. Yeah. So I think it also depends on like that, I think it does depend on the level of helper, but it was because ours wasn’t not by that we didn’t need to do Blueskin because we weren’t contemplating having to do the Blueskin. The two layers, I can’t remember what they were, but I know one of those Blueskin. We didn’t have to go to that level. That’s why I say like, it wasn’t bad. Like, it sounds bad. But you know, there’s always those kind of, and I’m just talking because I’m with it so much with my husband, like, I know what he does

 

Erwin  

is different than a newbie, yes. Yeah. Like, for newbie is not bad for you.

 

Diana  

And I can give like a really funny example, actually. So on another project, we were doing a luxury flip. And this was in Toronto, and the whole house was guided. And the first thing we had to do was the roof because there was terrible leak problems in there. And so and this, we bought it in just before spring, like in in February. So everything is melting. This one was probably two, this was probably two years ago. 2020 or 2021. Okay, maybe this one was so actually yeah, sorry. That was last year. Yeah, cuz we did both. Both of those happened last year. Yeah. So that one was really funny because my husband sends me pictures of like waterfalls, basically all over the house.

 

Erwin  

Like nice ones are like your house is leaking. The house is leaking.

 

Diana  

Like, we were having water coming in from the windows. And then one side of the house was just like leaking really bad. Like it was like we I just cans all over the place. Right. And it was just really funny, because that didn’t traumatize this. But nothing was done to the house, right? Like it was just a fully gutted house. And as experienced investors, we know you have to get the outside done before ever wanting to do the inside, right? Because oral it’s what happens you destroy the everything right? So like that we knew that house, we knew that roof had to get done. And we gutted the whole place because that one was a full gut like it had to be gutted were to the studs, like all new insulation, I was like we basically built a new house that one that’s how the extent of the amount of renovations we had to do. Like for example, an experienced investor would know that you do get the outside of house done first make sure that you know you’re gonna be able to protect everything you do inside right so like that. So we got the roof done first. And then everything interior started to get done, but it was just really funny to see the pictures. And again, I’ve never seen something to that extent of like that kind of problem. But But I can tell you that when he sent me the text message or the videos, all I ask is like, is this a problem? And he says no, don’t worry, I And then as when he tells me I’m like, Okay, I’m like, as long as you tell me that we feel good about this, I feel good about it. But if he tells me, we’re in chaos, then I thought then I would be in chaos. Right? So I can I can tell you that also, I’ve never seen it to that extent of a problem. But I can tell you like that he was fine with it. He said it was no problem was not affecting anything. And yeah, it didn’t do anything for us. And there was nothing to worry about. But it was just like something funny to show that a first time home investor, no, first of all, they would never I don’t think you I hope you never know. But you as a first time so you shouldn’t

 

Erwin  

have it was three seasons of HGTV, good to go. Listen, we’ve done half an

 

Diana  

hour. Yeah, that’s true. So this labor do not do those kinds of projects unless you have a really good team because like that, that would give you a heart attack and a half, if you didn’t know what you were doing.

 

Erwin  

For novices. They don’t even they don’t know how to qualify a really good team. Right. That’s what we’re seeing now that’s out there. So let’s start with the Toronto flip. Where did you find the deal? MLS? Okay, okay. Yeah, people who say there’s no deals on MLS,

 

Diana  

I know I find it really funny. And to be honest, when people tell me things like that, you’re closing your eyes to opportunities, because for example, I look everywhere. I’ve done all of them. I found a deal like the Hamilton one. That one was private.

 

Erwin  

We’ll come back to that. So you find it on Toronto, you find it on realtor.ca. That’s right, this proper term realtor.ca That sounds like a disaster.

 

Diana  

Yeah, it was a full gut did actually when we saw when we saw it, for example, no one so already the third floor was gutted. So there was no installation up there. Oh, no kitchen. Period, no kitchen at all. Like it was in mid demo. Yeah. And then also another thing I noticed was that when we were closing, the previous owners hadn’t paid their taxes so they had to like they have no money. Yeah. So yeah, although but they had owned it for a long time to so I don’t know if it’s like maybe it was like a rented property neglected neglected. They

 

Erwin  

were bad with money. Yeah, maybe but I’m thinking maybe they

 

Diana  

were trying to see if they could do it themselves and then maybe just

 

Erwin  

why you can’t afford your taxes. You thought you’d get into renovation? I don’t know. winning formula. Formula. No kitchen partly gutted bathrooms were their bathrooms.

 

Diana  

It had a bathroom. But one you don’t want to even set foot. Yeah, like Yeah, it was not maintained or anything that definitely that type of thing.

 

Erwin  

So how did you finance the purchase? All private money because

 

Diana  

you can’t? Yeah, I mean, no ARB lenders are gonna definitely lend to that. Right.

 

Erwin  

Do you care to share who you probably borrowed from? Or? Oh, I

 

Diana  

don’t even know actually, because a broker just it was like, a make or something. Okay. Yeah. Something like that. Okay. I don’t actually know, like, the actual name or anything. It was just a broker that found it for us. Do you still like this broker? Yeah, yeah, actually, he gives me a really good dad deal, sir. He helps me you know, get deals and stuff started this.

 

Erwin  

Can you give us an idea what what the terms were like that one? Oh,

 

Diana  

my God, I feel like I think it was very standard deals, I think it was probably like 2% lender fee. And like six point something or seven, something somewhere in between there. So I can tell you like that, like the loan itself. And I tell people like, again, you have to have experienced for this because I think we were paying around $7,000 a month to cover just the mortgage. Right? So it’s like, you definitely do have to know what you’re doing right? To be able to have the guts, right for that kind of thing.

 

Erwin  

So this is negative 7000 cash flow. Good. Sounds great. And then how much did the house cost?

 

Diana  

1.4 foot boy.

 

Erwin  

Okay. All right. And then how should you put into it? Renovations budget

 

Diana  

450,000. It was a big project. Right? Because his interior and exterior work like like I when I say we built a new house like that’s basically what we did. We built a new house.

 

Erwin  

Yeah, that’s That’s enough budget to build one of my bungalows. Yeah.

 

Diana  

We basically built a new house,

 

Erwin  

then you and your husband served as general contractors, right? Because you’ve experienced that. And that saves you a lot of money.

 

Diana  

Yeah, it definitely definitely helps. Because especially like that if things are going wrong. At least we’re cutting into our budgets to just make sure that it happened. Right. So So yeah, I feel like it’s always good when you haven’t like when it’s your teams, right? Because it’s, you can always sacrifice or move. You can move things around a lot easier. Right? Or what I would really say what is the biggest thing that I noticed and especially between people who hire and then let’s say, if you have your own teams is that my husband goes above and beyond, you don’t get that from people that you hire very often right? To go above and beyond. Yeah, exactly right. So I feel like I noticed, I always noticed that kind of thing when people tell me about their projects that, let’s say, because I could tell you that I pay him retail. But I can tell you, for example, like, I’ll pay him retail. But if things go wrong, usually we still stay within that budget, there are times that we may have to go a little over. But for example, like that, I think like another person would be like, not my problem, you know, whereas like, we’ll try to make sure that we try to work within our budget, you know,

 

Erwin  

just for you, this is impressive. I know yours this, you know, I should just automatically assume you’re so sophisticated. And my policies, I don’t believe anything I see on social media. So the worst of people. So when you hear so many stories, right? You just feel like, Oh, God. And then how long did it take you like, this is a very big budget.

 

Diana  

That was a huge project. And can you imagine we got all of it done within six months, seven months? That’s impressive. Yeah. And I can tell you, though, the last two months, was the most stressful things of our lives, because we were non negotiable having to get it done within that time type of thing. So that one, I would say that one was a very stressful one, because what was the deadline? Because we wanted to, we just wanted to meet, we wanted to make sure we’re catching the right market and for this one luxury home. Family. But what I mean is also like in the luxury home area, specifically as a single family home, you’re only dealing with a very small clientele. Right. Yeah. And that clientele is in that march to the summer timeframe. Right? very price sensitive to Yeah. So to us, it was because other ones like for example, I feel like investment properties, they’ll almost any time of the year because it’s about the investment. Right. But when you’re dealing with families, that’s a whole different story. Right? They want to buy within a turn timeframe. And so we were like it has to be we want to make sure we catch that good market. So

 

Erwin  

through as a full business. Oh, yeah. Investment. There’s a lot of planning involved in this. You’ve even thought it through to who your customer is.

 

Diana  

Yeah. Yeah. I mean, especially if you’re dealing in the luxury home. I mean, you need to know like how that works. Right? It makes sure you know, where you’re, you know, what’s plan? Well, my point is not everyone thinks this through, Oh, yeah. 100%. And it shows like that the importance of like planning things, and that it’s not that simple, right? It’s like there are and kind of graduating through it, right. Like, don’t make a luxury flip your first one probably not a good idea, you know?

 

Erwin  

Yeah. And then, and then you staged it listed, listed, and then have the, the song go,

 

Diana  

it went well, that one actually was on the market for I believe, a month, maybe even a month and a half, but then it closed quickly, within a month too. And that wasn’t like the height of the market to write that. So it was like that, like what we, for example, expected I was when I was looking at I feel like luxury market always is like, that’s normal, you know, like that, at that time, we’re hearing other properties, like bidding war, and then sold that day, right. In the luxury market. I wasn’t seeing that I was still seeing like, you know, 30 to 60 days for the luxury market. So so that when that one fell through like the exact what we expected, right, it took like 30 days or, or maybe a little bit longer, like between 30 and 60 days for it to go. And then a month later it closed. Can you share what you sold for? 2.3? I believe it was 2.3 2.4 2.3. Somewhere around there. 2.3. Yeah, not 2.4. Yeah, sorry. 2.3.

 

Erwin  

She made a couple $100,000. Yeah, we

 

Diana  

did good on it. But remember, we have like a lot of holding costs. So it’s not like amazing, but we did good. But again, you’re supposed to do good in the luxury home. Right?

 

Erwin  

Oh, don’t be saying on the show. They’re trying to do the fair now.

 

Diana  

I meant it in a different way.

 

Erwin  

But the market was right. And you had the ability to execute. Yeah. And you have the funding to do so. Yeah, you had the pockets to do it.

 

Diana  

Yeah. But what I what I mean is though, like when you are getting into more expensive houses, you’re spending a lot more because you need this house to look amazing. Because your clientele is amazing. And the clientele pays amazing. My Nemorino like, I feel like it’s because of that, but again, like if you don’t do your numbers, you could screw it up royally too, right. Even in the luxury. Yeah. Because I mean, if they’re not,

 

Erwin  

that’d be done. Right. Yeah. Has to be done, right? Because I’m sure your staging Bill was enormous. Not as

 

Diana  

much as I thought it would be.

 

Erwin  

How many square feet was that? us,

 

Diana  

I think the Oh my god.

 

Erwin  

Did you watch in Toronto? Was 2.3 is a decent amount of money?

 

Diana  

Yeah, I can’t remember maybe 2800 Without the base is pretty big, but it’s three floors to. It’s pretty. So it is. I mean it is big. Yes. Because we did for example, like the whole third floor was the ensuite just for the master bedroom. So we had like the bathroom or walk in closet in the bedroom. So the whole third floor was like just for the master. And then three bedrooms and two bathrooms on the second floor.

 

Erwin  

Okay, so actually, this is a good question like, Would you do this deal right now? No, not at all. So even if you could buy this house again, for one point for what to do it?

 

Diana  

I mean, I’d have to run the numbers. But yeah, definitely. I would not do a yeah, this is way too unstable of an environment to go into something like that. And to be honest, I mean, when you’re going into this kind of thing, what suffers the most the luxury market too, right? Yeah,

 

Erwin  

well, yeah, the higher the higher. Because people I don’t know, if people who dig into the stats will know, it’s the entry level stuff that’s still transacting, which is partly bringing down the average price. Because anything that’s a good luxury. So for example, like anything on Treb, that’s over $2 million is probably not moving. Right? Yeah.

 

Diana  

Well, well, you were telling me last time on my show, right. That you said the reason why mine did was because it was under 800. Yeah. So I just found that interesting. Because yeah, like you just know like that. You don’t want to be in it like free market right now. Yeah. I mean, don’t do it.

 

Erwin  

4 million, for example, in Hamilton is not moving. And that’s really that’s really nice for Hamilton. Yeah. Mark is different.

 

Diana  

Yeah, yeah, exactly. It depends on the market to be talking

 

Erwin  

to your Hamilton flip. Sure. Okay. So where did you find that one? That one was private. How did you get them like flyers?

 

Diana  

flyers? Yeah, there’s flyers. Yeah. And like that, like, just something that you always know about? That’s very known in at least in the real estate community is that homeowners wait to the last minute are in denial about the problems are going through. So he’s like, textbook case. We were like, literally two weeks before the House is getting possessed. And from the bank from the, like getting possessed. Yeah, to go to the bank and like them to do the sale. So we had to act quick. Because obviously, it goes because imagine like in the height of the market. So in the height of the market, we bought it for 500. It appraised for 600. So probably fully sold with the if the bank took it, it probably would have sold for 600. Right? What would you get it for? 500.

 

Erwin  

Okay, so it was worth 600 At least

 

Diana  

it got appraised for 600.

 

Erwin  

All right, and then you said it wasn’t that bad in terms of condition. But yeah, your qualifying is not your average person’s Yeah. 600 in health is not disaster.

 

Diana  

No, no, no, I like that. Like the main floor. The only thing we did on the main floor was paint. That’s it. That’s it. Okay. What else stairs just where the second floor is where we had more renovations done. So like that one area, there was a leak problems. We had to fix the ceiling and just have that fixed. Like the damage from the roof leaking that damage from the roof leaking. Yeah. But then also what it was actually a one bedroom house. Oh, so they opened concept, the whole second floor. And he had his office was two bedrooms. So just open concept and just a master and then a loft upstairs. Yeah,

 

Erwin  

that’s permanence. Right.

 

Diana  

No comments about what they did there by

 

Erwin  

Adam. I remember Justin Hamilton in the house that we’re looking at the panel had an ESA and in my experience, it’s like one in 10 panels have an ESA sticker on it. I don’t know who does rent work and Hamilton but yeah, yes, I joke. I bet you $10 And there were no permits for those walls being taken out. Well, we heard

 

Diana  

that because she didn’t do any of the work. So this was actually the previous not him. It was actually the previous owner, the piers were owner who apparently was a woodworker, so he probably was just like doing whatever he wanted in the house. Right? And he’s the one who put like that illegal plumbing and that was just like one foot off the floor. So you can imagine that in the winter because there was actually a bathroom in the workshop, but obviously probably wouldn’t work in the winter probably I don’t know what they did there. Yeah, I’m

 

Erwin  

glad it took the plumbing.

 

Diana  

Yeah, no, I understand why took it out right. Or we took it out I should say.

 

Erwin  

So what did you do with the second floor then?

 

Diana  

I added the two bedrooms back in see the put on walls we put in walls? Yeah. But again, like do you like It wasn’t that big of a deal, right? You just put the walls up a couple grand no big deal. Did the house we had to do all the flooring because of the water damage because there was water damage. And there was previous water damage in the master bedroom. But there was no evidence of like, like they must they had fixed it already which the I mean, the homeowner said that was fixed. But there was water damage all over the floor. So we had to fix the second and third floor, we did flooring, that one had a new bathroom done. We fixed it because it was very the old style bathroom where you cannot even sit down if you’re a tall person because like your vanity is like right up to your knees when you sit on a toilet. So so we had to do the whole so that so the upstairs is where the second floor is where the most work was done. We added the walls, and we added a new bathroom floors and paint and the whole house like the whole house was painted. And then just second and third floors where we did all the flooring. So what do you think your renovation budget was? Our renovation budget was? So I did actually we just did the numbers because I thought it was 60. But I forgot about like taxes and stuff. So it’s like 65 Plus HST, sorry, them and HST the answer was 75.

 

Erwin  

Yeah, that’s not bad. And then how do you finance it? Also private? Yeah,

 

Diana  

that one was private. Similar terms. As you know, chimps are bad. The terms aren’t bad. Yeah. And these are not people that we know, like, are the brokers founder for? I can’t say remember what this one was actually, I think it was the same, like around 7%. And this one was, and then this one was broker plus, I mean, both of them were broker. The other one was broker, but it was one in one or something or 1.5. And one point, I mean, 1.5, and point five for the broker. But this one was, I believe, two and one for the broker. So that one was three 2% lender fee plus one precise, 1% broker. Yeah, whereas the other one was 1.5 to the broker, sorry, point five to the broker and 1.5 to the lender to the blenders for the listeners

 

Erwin  

benefit, but there’s lender fees broker fees. And so we’re, for example, overseeing 1% broker fee, it’s 1% of the loan amount that goes to the broker that’s an appropriate is paid, the interest rate is goes to the lender, whoever is actually has the money. And then the lender is also taking 2% lender fee based on the amount of the mortgage. Got her a complete novice. And then how long does how long this run will take.

 

Diana  

But that long, right. This one was not that long. That was like, two months. Yeah. Pretty good. Is a two month project.

 

Erwin  

No kitchens, no bathroom. Don’t you just use the

 

Diana  

bathroom? Yeah. Because it wasn’t. Yeah. And like that, for example. My husband doesn’t do exterior work. So the roof was done from like, one of our supply whenever, right.

 

Erwin  

Half story, it was one, two and a half, three and a half story. Yeah. So those those are really tough. Yeah. Because they’re steep peaks. Yeah. Okay. And then can I ask what you sold it for? Seven. But you sold for eight? And you

 

Diana  

know, 754? I think that sounds right. So I’m 54. Yeah, because we were above because our our numbers, we want it to be above 750. So that sounds right. 754

 

Erwin  

is a pretty good. Yeah, we did go up 500 for the house. 7500. Rent a budget. Plus your carrying costs and costs. Yeah. For only two months.

 

Diana  

No, no. What do we know? This was my this is the one hole we were there for a whole year. Remember, even though the rhinos were to mind member? The whole problem with the homeowner your

 

Erwin  

dirty clothes. So you had to pay carrying costs the entire time? No, so

 

Diana  

we had money. So we we weren’t sure what was going to happen. So we ended up paying the house in full. You pay cash, we paid that house. So we had a six month term with with the lender. And when it was time to renew, we decided not to renew because we weren’t sure of what what happens. So we just paid it out in cash instead. So we did that for the purpose of not knowing how long this would happen. And we didn’t want to put ourselves in a bad situation.

 

Erwin  

Damn, good thing of cash. Good, Lord.

 

Diana  

I mean, like,

 

Erwin  

when you can renovate credit, you had to close on it, but you didn’t have control and you couldn’t renovate it. Is that what you’re saying? How can you the holder for six months?

 

Diana  

No, no. So our plan was it to be in and out in six months. So we did a six month term with the lender. But because we had the negotiation problems with the buyer, first right of refusal, then midway

 

Erwin  

he was like saying he was going to buy it but then never bought it just drags you along.

 

Diana  

No. What was happening was basically we had our APs. And so we put the terms together. And we with our lawyer was send it to his lawyer and he would take two weeks to respond by. So imagine every single response by would be two weeks and he would try to change something small every time to make an excuse, waiting for his money. And so basically in the end, we just agreed to all his da, and we’re just like, whatever you get it. And we’re just like, because we knew he, after a while, we realized it was just a stall tactic. And then we just agreed, and then he couldn’t close. How long was that negotiation

 

Erwin  

period?

 

Diana  

From January to June? Good lord. Yeah, it was six months

 

Erwin  

to negotiate a sale.

 

Diana  

So that was like, for example, a huge learning experience for us. And first right of refusal, for example, terms become very important, right? Because with our lawyer was, since we didn’t have a defined negotiation terms,

 

Erwin  

you need the end date that right refusal? Yeah, well, we that we

 

Diana  

had an ND to the bigger part of it, but we didn’t have like negotiating back and forth, like allowable time for you to respond back. Right. So for example, then it becomes ambiguous. And then the lawyer is like, well, two weeks is allowed. And so he was doing his maximum. Right. So it was like that, because because there were certain things that were ambiguous, we have to go with what seemed right, or what seemed acceptable, like even for the appraisal, actually, some of that time was also the appraisal he took, he took a month to get his appraisal, where we were, we got it in a week, you know, like, and so he was just taking his time, because he’s waiting for his money to come. Yeah, so we have pretty like exciting type of project. But then use it

 

Erwin  

like that’s a really good lesson. I’ve heard this one before.

 

Diana  

Well, to be honest, yeah, good. Using our first right of refusal, I think, I don’t think that kind of project will ever come again. I don’t think it’s very normal like that. This guy knew a lot about a lot about law, like the this guy works on like crazy as business projects. Like he knows a lot a lot about the law. And he’s a lawyer, he’s an accountant, but the kind of projects he works on are like hundreds of millions of dollars kind of negotiating. It’s professional, I was negotiating, it’s a professional 100%. So I can tell you that I learned a lot from him. But the guy was actually really super nice. Actually. I learned a lot about his business to be honest, me and him were chat a lot. I would like ask him because like, you know that his contracts for his business? I mean, I didn’t know this. But I feel like everyone does are very similar to the way we write our contracts to like the same terminology gets used. I found that very interesting. Actually, like they have finder’s fee like he was the Finder and his business deal is really cool. Actually, I really enjoyed reading his contract. Right.

 

Erwin  

Right. Right. It’s actually a Dan Kennedy lesson that whoever writes the contract is in control. Right? So if the professionals if they’re in control, and they know more than you do that you’re an advantage disadvantage? Yeah. He probably knew this the whole time.

 

Diana  

Probably. Yeah. Or Yeah, or like that. He just knows some, like, he knows a lot of lawyers like, because the guy is also much older man. So he’s very well connected with things because even a little thing, for example, in the market, this is how well connected he is in the market. The house should have been appraised at at the height of the market, probably around 760, the lowest and around 800 The highest. That’s the numbers we were expecting. And ours came out at the lowest at 760. That’s what you got to pray. Oh, no, no, sorry. We got ours got praise at seven 790. Do you know what his got appraised because this connections 725. So imagine when we have to go in the middle? Great. It was but it went to 760, which was our number anyways. Okay, because it’s funny when we first sent him the offer, we sent him I think 762 or something like that was our offer. Because like that, to me, I’m about being very fair. I was like, this is the fair number. I think this is so kovanda funny that we ended off in that. But again, it was more not about being fair. He was stalling. That was his thing. So he was willing to spend the money to just wait until he got to it to like the hopes of being able to buy it back, which it just didn’t end up happening. Right.

 

Erwin  

So some rough numbers. Let’s see You cleared over 150 on this. No, no,

 

Diana  

no, like ADK 60 to 80k.

 

Erwin  

So on a deal that went completely sideways, you still

 

Diana  

can you imagine if we actually bought at the height of the market like that would have been like a homerun. Right, right. Yeah. Like like 50 or something. Who knows? If we got it and if we sold it when it was supposed to be in like February March, we probably would have been laughing

 

Erwin  

but this is the truth about real estate investing because of your sophistication. The fact that you had cash to be able to carry it your contracting background and how you did how you analyze the deal getting in he’s told me he has to make a pretty good amount of money. Like you know, like we were talking before like before the show before we recording, there’s all these other flippers are bankrupt. Yeah. Versus you made a pretty good amount of money. I know it’s not as much money as you wanted. No, but

 

Diana  

I mean like that, like we’re hitting a recession and we’ve made that kind of money, right. So that’s just the numbers.

 

Erwin  

Yeah, terrible.

 

Diana  

Yeah, and this is like I everything, you know, everything’s dying, you know, I don’t know, I like everyone’s liking

 

Erwin  

ourselves. Are you guys proud of yourself? Yeah, I

 

Diana  

think like that, like, to be honest, it definitely is. And even the private lends to that I do. Like, they’re all been going well. And I feel like, I feel like it’s really actually helped me solidify specifically actually, on the private lending side, I started making changes to things like that, like, for example, I only go on first right now, just because of how things are. And I feel like all those things that I did, really helped me to make my deal safe. And I made some other changes, too. But I feel like that was the because before the last few years, I was doing seconds, you know, I felt very comfortable at the market, I was okay with it. Whereas like, now, I’m like, No, first, and like, under like, 75, like one is that like, 60% loan to value, you know, like, now is just really being careful with the market to tell you how crazy things are. And for example, you know, I kind of lost actually, what do you call it, like, I lost faith in the appraisals. So there was this deal in that I was private lending to. And I look at this deal. And there aren’t enough deals around for meat and like, not enough property sold, that my expectation was I was going to really lean on the appraiser for the valuation of this property. And I remember talking to lenders, because they had bought for bought it for, let’s say, 300, or 325, something like that. And his, the appraiser appraises it for the exact same number. And when I was looking, I’m seeing things at like 250. And I’m seeing renovated properties as 325 and 350. Like, or like I would say, like, yeah, like renovated properties as a 350 and higher listing, maybe 360, or something. And this appraiser appraises at that.

 

Erwin  

And this property was like needing renovation,

 

Diana  

like a full gut cosmetically. So I was just, I was like in shock by that appraisal. And the funny part is that I kind of checked his listings, because I was like, What is going on? Like, how can you do that? First of all, there’s no pictures of any other houses or like, you know, when they when it’s like those MLS listings where they just see soon or coming soon or something like that. So they had no pictures, which is strange, because

 

Erwin  

like, sold, you know, these were sold properties, but no pictures,

 

Diana  

but they had no pictures. Like, yeah, like, I feel like those happen, you know, when it’s construction type ones where they’re in the middle of a construction. So they don’t show you the pictures, but they kind of put the listing up or just to see if anyone’s interested or didn’t even know but you don’t like it busy. You have that? Yeah, but then you have the picture of the house. I’m in the front yard. But don’t you see those ones? Usually I feel like people do that are the ones that are like in mid renovations, or like they’re just trying to see like drum up business, I guess? I don’t know, you know, that’s better than me. A

 

Erwin  

picture of the house outside? Yeah. At a minimum an artist rendition, right. At a minimum? None is weird.

 

Diana  

Well, that was an eye thing I was gonna say maybe is just the way like realtor.ca. Or actually, I was looking at how a sigma, maybe how how sigma displayed those specific properties, because that’s gonna say, so I look at them. And I’m just like, I’m not seeing pictures is really weird.

 

Erwin  

So that’s a good point that you double checked, the appraiser went back and you’re checking the appraiser.

 

Diana  

Yeah. Because like that, because I usually do my analysis. And then the appraiser to me normally is just a clarification on the numbers that like, close like resemblance like, okay, my thoughts are right, or vice. Yeah, but when I realize Yeah, you that’s what I mean. That’s I kind of lost faith in them. Because I had two situations like that. That was this one was just the worst one, but like that, like we were so far off that I just got really confused on why so I made me look into his because I was like, what are you seeing that I’m not seeing? And then by chance, I don’t know how I see a property. I happen to see the a YouTube video of it, like a listing of showing the property. And I was like, Oh, that’s weird. Why isn’t it on the listing? So then I was thinking because I know like Hamilton has their thing where like, they kind of segregate themselves,

 

Erwin  

like Hamilton has a share with Toronto.

 

Diana  

Yeah, yeah. Or even on realtor.ca Because I’ve checked everywhere like I was like trying to check out this listing, like trying to find this listing wherever I could. So I was thinking like that because it was strange that I found a YouTube of it showing the property the house and the property or house cat. It wasn’t dynamic or anything, but it was livable. It was an okay conditions just dated and then not even date it just not really. I don’t know, nicely done, I

 

Erwin  

guess. Okay, so, like a 10 or 20 year old renovation.

 

Diana  

Yeah, maybe something like that. We’re like you know, like it A time when people love to put so much colors on the wall. I did that to me. Like it was kind of like that, like a little like you can tell a family’s living there, you know, like, massive blue bedroom because it’s like a boy must live there like pink bedroom because, you know, like, that kind of thing going on. Whereas like, I feel like when you go to sell, you just paint the whole house gray. Right? So just not ready. So it was like that, like it was like lived in but it was livable, and it wasn’t bad. Like, maybe super, very minor cosmetic. And they were comparing that to my rundown, their rundown falling apart house and saying that they were about the same price. Right. So then I go and tell the guy and the thing is, so this guy, a friend of mine, like lending to him. And he had all the money to fund for it. And obviously I asked for proof of it and everything. And he just wanted to work with me. And he’s just like, I want to work with you on a lend for you. So he’s like, even if you don’t lend at the amount, I’m happy to do whatever managers want to work with you. So I ended up lending to him to the number that I felt was and doing 80% of that. So he for him, I think it came out to around like 55% loan to value from the appraiser he got there was something like that. But it was because I didn’t feel comfortable. And I but I felt comfortable because I saw that he had enough money to do the project himself and get it done. But I just wanted to like that make sure my money was super safe. And I just had to do my numbers. And I couldn’t even take that appraisal as as like for anything. Like I was just like, I don’t know where you got that from closely. As like one they were very far away from the house already. But again, I understood that because there weren’t enough of them close by. But still, I was just like, why didn’t you use this one? You know, like, this one’s

 

Erwin  

pretty that 325 That was in Windsor. So that was the Windsor one. Right? Windsor is cheap. Yeah. Okay, then everything worked out. You got your money back.

 

Diana  

That one’s still on the go, actually. So that one is not a flip. That one’s a burr. So they’re planning to refinance it.

 

Erwin  

So it’s pretty recent. So they picked it up for a pretty good discount already.

 

Diana  

Yeah, like it was. I don’t actually remember sometime this year. I personally didn’t think it was a good deal. I even told them, are you sure you want to do it? And but he was like, I’m ready for him on it. I’m confident and numbers. He’s like, I’ve done this one before. So I’m like, Okay, I’m just letting you know. But again, like I was like, I’ll definitely help you out. And I definitely like that, like, that’s one of the things I like about private lending is also just knowing what everyone’s up to, you know, like, I like having that relationship with them. Like, how’s things going? Or I usually ask, like, hey, when you’re done you can we talk about it, how WANs and whatever, whatever, you know, I even had one guy, for example, he was having problems selling the property. And I was helping him out trying to, you know, give him solutions to help sell it out. And he was able to sell it this other person. So I kinda like a little bit of the end, which is a little nicer when you’re don’t know someone at all. I feel like it’s nice to lend to someone that you kind of do know, and can actually have that back and forth conversation.

 

Erwin  

So everyone you’ve learned to they’re still taking your calls. I ask because I hear lots people aren’t returning calls. Oh,

 

Diana  

really? Oh, no, I actually, although, you know, it’s really funny. Yeah, they actually everyone did. And but again, the way maybe it was the way I came about it. Because when I saw this whole thing in September happening with just like, everything kind of going crazy, because I was just hearing so many weird things like people weren’t getting there. People weren’t getting refinances, or not the high, like not even 85 80% loan to value or 75% loan to value. I went into like panic mode, and not panic mode, but I wanted to like let all my borrowers know what was going on. So I sent everyone a message actually, I’m like, Hey, this is not panicking. I just want you guys to start looking into your refinance options. Yeah, cuz all of them are burst. Yes. Because like that right now, for example, I would never lend to a flip right now. Unless if it’s like a super stellar crazy, amazing deal. But so all of mine are barrage right now. So I told them, I’m like, go talk to your brokers figure it out, make sure you’re still okay. And if not, like start making your plans now so that you’re ready and prepared for whatever your options are. Right? So I kind of like mass messaged all the people that I told them that because because obviously if I’m hearing information, I’m going to share it especially cuz I’m like, like what I said, right? Like, if you guys fail, I’m failing. And I’m like, we’re not going to fail. You know, this is not an option. Right? So I let everyone know and yeah, everyone respond back. Some of them were Thank you, you know, thank you for that. Other ones like, oh, like he was a broker. So he’s like, Oh, he’s like, you know, I haven’t seen anything on my side. It should be fine. So yeah, everyone responded back so

 

Erwin  

let me excuse me still happening are here. Some appraisals are coming in late, but then usually just go to the switch to the lender and then the appraisal will come in. Yeah, I’m hearing. I’m hearing appraisals are light that’s the really the only real issue for people who can qualify for stuff. But the bigger thing is bankruptcies. And again, anecdotally, I have clients, I have nothing to do with these private lands because I don’t private land. So I’m biased. Obviously. I have clients telling me like, people aren’t calling the back. If you believe like money, too.

 

Diana  

Luckily, I don’t have that. But again, I like chatbot check up on my people. Like I like I run the numbers with them, too. You got to, I need to make sure they can afford

 

Erwin  

a little due diligence. Yeah, and we’re gonna get into that. Very, very important. So you’ve invested heavily in your education. Yeah. You mentioned a certain rich company. When you What’s that? What year? Were you with them?

 

Diana  

I don’t even know. Definitely before. COVID. Like we said, per day, your time all right. Yeah.

 

Erwin  

Yeah. So like, 2018 or something? Like,

 

Diana  

yeah, maybe around there. Yeah. 1718. Somewhere around there. Yeah.

 

Erwin  

So you’ve been you’ve you’ve taken some of their courses. Nothing crazy. No, no,

 

Diana  

I didn’t do any like mentorship, because I was just more like, we were kind of going into the next phase where we need to start figuring out how, like, that’s actually what Rich Dad Poor Dad did. For me. I never understood how people were getting big off things. And are not in Yeah, or especially when you’re told for example, like don’t work with others, you know, people are gonna scam you. And like, I would always be told a lot of these things like people are going to scam you and stuff. So I was just like, bad advice. But I mean, yeah, like, there’s not bad advice, but at the same time, it’s not. It’s not advice to like, yeah, like, you just have to be careful with the way you go. If you’re gonna do partnerships, definitely, you’ve got to do like, in itself, that thing has due diligence. And that takes forever to find people that you can. But so my mind of how

 

Erwin  

Steve Wozniak and Steve Jobs partnering? Yeah, we never would have apple. Yeah, right. So it is possible. It’s a lot easier, in my opinion is a lot easier. Because real estate such a, there’s so well insulated by the market. But still people managed to screw it up. Continue, you’re learning about, you’re saying that you were learning how to scale. That was one of the was it that was my

 

Diana  

thing like that we were doing burrs and flips very slowly, though. Like, I think even a year, we didn’t do them, I think we got traumatized by one, it was like, so stressful that we were, let’s take a break. And then we realized, for example, like the community is important, it’s good to have we didn’t have any of that. What else was, what was the other thing? And it’s just I didn’t, I always thought you had to do things alone. And and like that, like your money kind of depletes after a while. Right? So that was that was one of my issues. Like I’m like, How am I supposed to grow, which is me and my husband, I just didn’t understand it. And then reading Rich Dad, Poor Dad, and going to the courses really, like was one of the kickstarts to figuring out, this can actually be done. And it’s okay to you know, do partnerships or like to group things together, have a community, all that stuff, you know, specifically not working with people was the big or, for example, I didn’t even know there are communities out there that could help you. Because I think that’s one of the biggest things, you know, you have a downer, having like something stressful happen, you can go talk to people that understand you, right, because being an entrepreneur is like completely different to a person who has a job, like they don’t understand the kind of stresses and things that you go through. So those kinds of things that really kind of kick started, because it was like, Oh my God, there’s people that can understand me, you know, the people that can help and that are, they’re willing to help and share because I think that was also a mentality that I got somehow that, like, people don’t like to share knowledge. And, and so, you know, like, you’re trying to figure all this out on your own, and it’s so hard to do a whereas like, if you have a community, you know, you can help support each other in so many different ways. Yeah, bounce ideas and just problem solve together and things like that

 

Erwin  

the quality of community was important. Yeah, I mean, some of the lessons of the last like six 810 months is quality matters.

 

Diana  

Well, and even coffee and all different areas and all different areas,

 

Erwin  

like contractors, for example, quality will matter. Yeah.

 

Diana  

Yeah. Like it’s really funny. People tell me because our projects always go well. And they’re really funny because people are like, how does it happen? And I’m just like, my husband and yeah, you have more control because like a contractor can just disappear on you if they want to my husband cannot disappear from me. I know where he lives

 

Erwin  

and beyond Rich Dad, you were part of a certain tribe.

 

Diana  

Yeah, it was part of cash flow tribe. I was also I’ve been part of so many. I mean capital Tribe i like paid for because I’ve been part of other ones. I guess the free ones. I think you also get to a point where, like, once you’re building that community, and you’re the people, I feel that you get to certain levels that, for example, there’s like that all these different groups. They’re very entry level and have an entry level. Yeah, yeah. But it’s Yeah. But I mean, as an even information, I feel like it just gets very entry level. And then it’s really about getting to know the right people and getting into the right communities. But to learn things, like let’s say, right now, I’m in Marstons. Group, but that’s because like that, like I’m interested in capital raising, and he has done, you know, he’s raised $250 million, like, the guy is, like, very experienced in the area. And, and I have, you know, like, I’ve not done that much, right. So then I went into his which, and that type of thing, to me, capital raising is a much more advanced type of this, like something an advanced, I don’t know, real estate strategy, I guess you’d say. Whereas like, I was like, Yeah, I know how to do a flip. Yeah, I know how to do a burn like I get it. You know, is this

 

Erwin  

more of an offline, we’ve had some past guests who’ve done very well, I can share with you how they do it. I know exactly how to do it. I’m friends with a lot of them. Because that’s helpful. Yeah. I always love to learn $30,000. Thank you. So sweet of you. Like some quick tips, for example, like, for example, my friends who raised lots of money, allow the system so people that you and I both know, who have lots of joint venture money, they usually have one whale investor. Oh, yeah. Right. That’s usually like 80% of their funding.

 

Diana  

Do you have any whales out there?

 

Erwin  

Actually, no, some of them listen to this. I’ve actually no, I know, I’ve had some guests that track whales on the show. That’s not the point. Just joking. By just by them. They have like their personal interests. Were rich people do the same things. For example, like boat clubs. All the rich people belong to them. Yeah. And if you’re interested already is in boating. Just talk to people at your boat club. Like literally, I know, people who have raised millions and millions of dollars at the boat club through one individual. Right

 

Diana  

here. You actually we started getting into golfing for that exact purpose. And you I know you’re in it too. And I’m like, I know the golf. We’re just like, we’re not. Where do you go? We just go like right now we’re learning. Okay, so we’re just going to the T zone. Okay. Oh, we’re actually going to play yeah, we first need to learn how to play properly, right? We don’t want to embarrass this especially going to talk to people and need to like actually know how to play first.

 

Erwin  

Hopefully no one hits on this. But for women, that’s less important. And it seems that’s just from the stories I hear from my field friends who are actually no log log clubs have extensive beginner lessons specifically for women. So they’re all on the same level. And lots of them are just loaded. So don’t be don’t be afraid of joining one of those. Because again, like a lot of them have the wives of the loaded. They’re loaded to Yeah, right. And in my experience, there’s plenty of women who are responsible for the household investments. Mm hmm. Right.

 

Diana  

Yeah. Like, isn’t that very common? I feel like yeah, so because usually the man’s like out working and stuff, and then they leave like, okay, especially if we’re gonna be the housewife might as well like, make sure all finances are taken care of,

 

Erwin  

I suppose. Yeah.

 

Diana  

I’ve seen both. Oh, yeah. No, for sure. Both. But I feel like it is very common for women to or the wives to kind of take care of now, I’ve just seen it on my side, the families that

 

Erwin  

in my experience, my clients, even if the wife, that’s the one that’s steering the ship on the investments, they all have jobs to now that I have maybe a few of them are stay at home. But very often, they have full time careers, six figure careers. And there’s other driving the household investment driven work. So for yourself, I wouldn’t be afraid to join any of these women’s clubs, especially at the beginner classes. I know it costs money, but I don’t think that’s an issue for you. But I want to get to like you’ve met people who are now bankrupt, as well as being a part of these groups.

 

Diana  

I meet a lot of different people, which very helps to learn from everyone’s mistakes or whatever they do even their successes,

 

Erwin  

but you saw the red flags before they got into trouble. What are some of these red flags? We’re not gonna name names.

 

Diana  

But I saw very, very big red flags was disorganisation was one you know I remember asking for information on a deal whenever you want me to lend you money. I need details what’s and and I wouldn’t even get the basic like I have my first level I don’t even go full on like I have my first level I just need to see if it’s even worth it to me to go further. Like I have like phased approach I’ve like to generally but sometimes even a third like I have two to three phases before I like to go through your lending, I mean, sorry, I’m lending you money, right? And so I couldn’t even get through phase one, you know, so that one was already a very big red flag. You raised

 

Erwin  

a red flag with them. You were going to due diligence. Due Diligence you’re gonna do, we can’t work together. This is not a good fit.

 

Diana  

Yeah, this appeared. And and that was one and that happened twice. Yeah, same person. So then, so when the second time it happened, it was kind of like that came into my head, okay, this guy doesn’t have like, he’s just looking for easy money. And now it’s like, I don’t give easy money.

 

Erwin  

Wow. And we were speaking before we were recording this individual investors now bankrupt most professionally and personally.

 

Diana  

I don’t I don’t actually fully know the details. But yeah, at least professionally, personally. Yeah. Okay.

 

Erwin  

It’s very sad situation.

 

Diana  

Yeah, it’s crazy. But it’s like that when you’re very. And one of the actually, this was one of the big issues that I found was that when you’re finding a team, don’t find people that are the same as you. Because I saw that I was saying that this is going to be a big disaster was because who’s helping run the numbers in the business? You know? And I was so worried about that. Because I saw I saw that I saw. Well, that I mean, that was small indicates, but I saw like the deals, I had deals come to me to that they actually did make it to me. And they, again, we didn’t even get past phase one. Like it just didn’t work at all. I was looking at these numbers. I was like, you want to be in debt? 300 A month or 1000 a month? Because I don’t want any of that. No, like it was just create these deals that I was just, but then it was

 

Erwin  

like the deals that were cashflow bad now and worse later,

 

Diana  

yeah. Oh, that’s

 

Erwin  

a that’s a great offer.

 

Diana  

But it’s because they didn’t have someone behind them to actually, you know, check the deals for them make sure that they were good deals,

 

Erwin  

right. That sounds like a terrible business. Yeah. And

 

Diana  

that’s why it’s so important to have the right team, it’s like, you have to have people that are opposite to you to make sure that this is your weakness, but it’s their strength. Right, right. You have to have that kind of thing. Because if you don’t, that this is exactly what happens. I feel like in general, I mean, I feel like in general, if something is going wrong, like you’re missing someone in the team to to make it happen. I mean, yes, there are, let’s say probably situations where you go bankrupt, and maybe I don’t know, I don’t I don’t know enough. I’ve never seen like, I think they’re the second people I’ve ever heard that are bankrupt. So I don’t know really how that works. But I just feel like maybe there are some people that go bankrupt, and it’s just happen, like just everything aligned badly. I don’t know. I don’t know if this is that a thing? Because that happened or is usually it is just like,

 

Erwin  

This is real estate. Bull Run for 12 years. Right? You have to do something really wrong. Right? And when we’re talking about partnerships here, like back to Apple, it’s not bad example. Steve Jobs and Steve Wozniak, they’re completely different skill sets, right? And then when Wozniak bowed out, then you have Tim Cook. Tim Cook is very, very different. He’s an operations person. Yeah. Great. He’s about the execution versus jobs about you know, product development. Very, very different talents. Yeah. All right. Well, class, obviously. But I can’t believe like this partnership that we’re talking about. They were very similar people.

 

Diana  

Yeah. But everyone seen another one, they go through a foreclosure and they were actually very different. Super super. What is it called, like, extroverted, you know, meeting everyone. And then the introvert, like, probably doing the numbers operation. I mean, I know they did operations, but like, so I’m assuming that they would run the numbers. And then same thing going through, they’re going through a process to and it’s just very interesting, that I mean, they’re opposites. But someone dug the hole for someone or they were trying to grow too quickly. Like, it’s, you know, there’s so many different factors. So, yeah, I think that’s another thing. For example, for me, I’ve never been a person that wants to grow super quickly, because that’s another issue that can come up. You know, when you’re growing so quick, like, really quickly. You just don’t know what kind of things you’re missing. Things can get left behind, just because your goal is way over there. And you’re in the future. But you forgot about what’s happening right now. You know, so there’s just Yeah, it’s so interesting to see different ways of also how failures happen because it’s also to be honest, for me nice to learn from their mistakes and just be like, Okay, I should not do this. Some of them. I mean, some of them already knew I was like, probably shouldn’t be doing that.

 

Erwin  

But you don’t know. That’s why I never say anything. I’m sure lots of people thought jobs would fail. Lots people thought Elon would fail. And Elon will say like, Tesla almost went bankrupt three times. Oh my god. Yes. SX, if I think it was Falcon nine, I think it was a third or fourth attempt, I

 

Diana  

think sleeping in his factory or office just trying to get things to work.

 

Erwin  

The Falcon nine, I think it was talking nine if the third or the fourth attempt didn’t have didn’t happen, they were going bankrupt. Yeah. Right if it didn’t work, and that’s probably when

 

Diana  

he was sleeping enough, enough is trying to make sure happens.

 

Erwin  

But my point is that there’s risks. And also also these companies that have been have gone bankrupt. Like for example, I’ve always done buy and hold, like I buy, renovate and hold I flip. But I do a conservatively because my experience with construction and contractors is it’s not that easy. So I do one at a time. Right. So even if one goes out of the disaster, it’s not the end of the world.

 

Diana  

That’s what we do. We also do one at a time, too. But like

 

Erwin  

the gentleman we’re talking about, they had just the bankruptcy statement. There’s like nine on the go. Yeah, that’s five hour radius. And one of them’s One of them’s in the Caribbean.

 

Diana  

Yeah, that’s exhausting. One of the reasons why I like private lending, you know, how some of my past is done working, so that I can like work put my energy into like the what the one maybe like that we may try to expand to go I mean, now it’s things are changing. But I do plan to expand but like that, like, you can’t go from like nothing to like a million so quickly, because it’s just, to me, that’s inevitable. Like, you see it happening, you grow so quickly. And you’re not any fear, especially maybe not, I don’t know, I don’t know what the situation but like, I’m just saying in general, like, if you don’t hire enough people, you don’t know how, especially the people that maybe making sure you have a good trusting to grow that big. Like you just that’s going to fail. Yeah, if you’re gonna grow quickly, like you have to have like a quite a few trusted people to just manage all that, because that’s just a lot of work.

 

Erwin  

Right? Difficult out there. But congratulations on your success. You’ve done really well. You should be proud of yourself.

 

Diana  

Thank you. Saying hi from you. You have so much experience I don’t

 

Erwin  

I don’t have the most experience has talked to a lot of people. So I know and again, I know a lot of people are hurting. And sure you are if you if you face some difficult challenges when you came out with it quite profitable. Right. So congratulations on your success. Thank you so much for coming on the show. Working people in your social medias exploded. Is that where you spend most of your time in terms of like sharing? Content Creation? Specifically Instagram?

 

Diana  

Yeah. Instagram, Facebook also just started LinkedIn.

 

Erwin  

Frequency tick tock. No. And then where can people find you?

 

Diana  

Like on Instagram investor girl, Diane? Actually, LinkedIn is the same. I left the investor girl Diana. Facebook is a little more complicated. It’s like my full name. Spell your full name. If you want to share, the group might be easier to find, because it’s labeled as read. But it’s the real estate investing district is what the group is called. Real Estate Investing district. Yeah, and it’s probably actually easiest. If anything, I’ve now my dad lives raza.ca Which that links to all my social medias. And we have a challenge if anyone’s interested. It was challenge yeah, it’s to help people set their goals. So if you’re looking to set your goal if you don’t, if you are not motivated or energized by your goals probably have the wrong goal. And so we’re doing a five day challenge to help you identify your goals and try to see if we can motivate you guys to find your goals. Okay, cool. Because you don’t realize actually that some of us have the wrong goal and we wonder why we’re not able to accomplish it.

 

Erwin  

Yeah, that was just our chairs presentation on Saturday was related to goals. All these feel things like buying more properties is the answer when at the end of the day, really, you need income and cash to retire. Properties are not income and cash

 

Diana  

so I always found it especially when I started going everyone was like always about the number of doors Yeah, and yeah, I didn’t never got that. So I’m like I technically don’t have very many doors because all my money is going into private lending or like that we’re

 

Erwin  

doing it all wrong. Obviously all that money in the bank wrong

 

Erwin  

and I just because honestly some of those people with lots of doors who don’t cash flow there, and if they didn’t run their numbers with

 

Diana  

you, you’re gonna see all this craziness happened to people that are going to really struggle with like all these doors and because we’re gonna go through a phase of a lot of people also probably having to go through evictions right now a lot of people Mr. I mean, I know employment is still high, but I don’t know I have forecasted that employment is going to get worse. I think employment will get worse if that happens. We’re gonna go through a whole bunch of evictions and if you go Got a lot of doors and you can even withstand a couple vacant properties or people just not paying. That’s going to be a crazy thing that I think we’re going to be seeing next year is that we’re going to see a bit of chaos happening. I think, firstly, curious on your opinion,

 

Erwin  

greed was so bad, right? So for example, we have this one client, we a recent client, who has new construction condo just closed a few months ago, even though he’s rented. We split today’s interest rates after heart costs. He’s negative $800.

 

Diana  

Oh my god. Yeah.

 

Erwin  

Right. What about these people have multiple?

 

Diana  

Yeah. closings and new construction condos on variables?

 

Erwin  

Yeah. Well, yeah. So is this gentleman? Yeah, negative 800. Right. And we’re in for probably two more raises. Yeah. Imagine if he had like, three or five of those, if you had five to be negative 4000 a month. But what if your vacancy

 

Diana  

is crazy? It’s really crazy. But I think I don’t understand that let’s say people did was like that. Like, for example, we actually went fixed on our all ours because it was just like, the rates were so amazing. I was like, What is saving a couple extra pennies and going variable? And I also felt like that like yeah, I was just like, why did people worry about the variable I don’t know. Like, at least my my holds are, are on fixed. And I mean, we actually went through a refinance. So that was kind of a nice hits. I was like, oh, in a negative way. Obviously not nice and was a bad hit. Not bad. We’re still cash flowing, but just kind of sucks to see some of your profit go away. You’re like, Okay, goodbye, little dollars.

 

Erwin  

You need to change your handles. This should be sophisticated investor day, and just an idea, just royalties. History. Thank you so much for doing this. So great talking to you. I’m glad we get to spend some time. I don’t know how else to say it. But I think people should like bounce questions off of you. If they’re looking at joining clubs, because you’ve been you’ve seen some crazy stuff. Of all the people I’ve talked to you’ve seen some of the craziest stuff in terms of people who were didn’t get the greatest guidance in their bankruptcy court.

 

Diana  

Alright, so yeah, thanks so much for having me on the show. This was a lot of fun was fun chatting about this, all this stuff. And yeah, thanks so much. Thank you.

 

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 and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s much improved demonstration over the one that I gave to my cousin chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself, I got into real estate for the cash flow. But with the rising costs to operate a rental business, it’s just not the same as it was five to 10 years ago when I started there are forgive the cash flow reduces your risk. The more you have, the more lumps you can absorb. And if you have none, or limited cash flow, you’re going to be paying out of your pocket like it did on a recent basement flood at my student rental in St. Catharines. Ontario. If you’re interested in learning more, but it’s true for free for my newsletter at www dot truth about real estate investing.ca. Enter your name and email address on the right side. We’ll include in the newsletter when we announce our next free stock hacker demonstration. Find out 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.

 

 

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