Erwin  

Hello and welcome to another episode The truth about real estate investing show for Canadians. I am Canadian. My name is Erwin Szeto. And since 2016, we bring you some best tips in past experience from some very successful investors. And today is no different. I count as half and our guesses counts as a whole. Anyways, as I’m recording, the Bank of Canada just released an increase of point 5% to the overnight interest rate. So the overnight overnight rate is now a whole 1%. This is the first point five increase since the May of 2000. That’s almost 22 years ago. I can’t believe I’m saying that 2000 Seems. Anyways, remember y2k. Anyways, they said it would be shrinking. It’s holding government bonds. So that’s called quantitative tightening. So there’s the opposite of easing, which will reduce the amount of money supply all this is meant to curb inflation. To me, this is a good thing as the pendulum has swung so far towards the money printing money supply increases, which law ever had bap and to save us from the savings from economic ruin from the people from starving over the last few years thanks to the pandemic, and inflation needs to be controlled. These are historic times. With you know, there’s a war going on in Ukraine. We are just coming out with a pandemic oil prices are crazy. And again, thanks to the war, we have oil prices and gas prices to think on top of that food and fertiliser. For example if anyone follows nutrient, which is a favourite stock from stock tanker Academy, they make potash which is a fertiliser anyways, so that stocks been going nuts. And as inflation remains high, so interest rates will increase. But my prediction is interest rates will fall again after the war is over. And supply chains are restored back to some sort of normalcy. As for when that is that’s anyone’s guess. Dr. Sherry Cooper is saying the market predicts the current overnight rate of 1% to rise to almost 3%, just over a year from now. And that the Governing Council of bank Canada expects inflation to ease from there dropping to 2.5% over the second half of 2023, which is next year. And we’ll see something more normal in 2024. So, again, big caveat again, though, is the the Bank of Canada misjudged inflation during the war in Ukraine, I misjudged it too. So I do not blame them at all. I didn’t think Putin would do it. And it’s a big unknown when that war will end. I personally do expect inflation to remain higher than pre pandemic levels as governments, governments all over the world, they realise that we are too dependent on other countries for critical goods. So governments will look to mine dig, drill or manufacture more locally, which will cost more, China did not become a world manufacturing superpower because they cost more, because they cost less. So if you bring some of those things back home, things will cost more to produce. On top of that government’s continued increased spending, as we’re seeing here in Canada, with our new federal budget and provincial budget in Ontario provincially. We’re talking about new spending for daycare. And federally, we’re talking about new dental and pharmaceutical programmes that and from the provincial government, I received a check for $120 For my licence plate sticker. I don’t know why I got a refund. When I haven’t renewed my sticker in over two years. I believe my licence plate sticker still says 2020 on it. So I’m not sure what they refunded. But yay, free money. Someone’s trying to buy votes out there.

 

Erwin  

And I as always a bit of a frugal person that might go spend it. My preference would be to reinvest the money that I got for free. And I’m thinking about my maybe I’ll buy some TD shares with it at the number one share. But TD pays a 3.8% dividend, which is more cashflow than a lot of real estate pays. And the stock has been beaten up for the last few weeks. As a full time capitalist with a social conscience. I do really enjoy making money. But again with the social constraints. So what’s the new interest rate mean for real estate on the streets, people knew this was coming and people knew this was coming. And we’ve talked about on the show multiple times. On the streets. We’re already seeing showings of properties for sales slowdown. For example, we had a new listing come on the market last week and Branford starter home asking price was right at the market value of 700,000. We received zero showings over that weekend as predicted, buyers rushed out to get ahead of expected interest rate hikes. And now buyers are fatigued. And the funny thing is, if folks had just been a bit patient and they bought today, from what we’re seeing prices have already come down five to 7%. So that’s what buyers today are buying to be saving. And that’s as of right now. This gets slipped further, as I mentioned on the show, we could see 2017 all over again, I don’t know, Much will depend on how things go in the next few months. Note that the days on market in our area are still single digits. I think we are looking at around eight days on market, which is absolutely ridiculous. That’s about five times. That’s about five times less. So when I started when this when I started on my licence as a realtor in 2010 days on market, we’re like 40 to 50 days. Today, we’re eight. Alright, so days on market for a property to sell. It took it like five times longer back in those days. And that was more like balanced. What I used to see, this is not balanced at all, this is still a seller’s market. What are cheering doing, as previously mentioned, we prepare for this moment ordering for several properties for free refinancing so that we could raise some capital appraisals were done at the peak of the market about two months ago, paperwork is in the progress. And we’ll wait. I like to sign some cash and wait to see what opportunities that it brings me timing the market is hard. But I would just be lucky this time. But thanks to having our finger on the pulse. And I read a lot, which helps. It’s a substantial amount of capital that we’re freeing up, and we’ll be adding some of it to our stock. I can’t count as some of the companies that that I like I’ve been beaten up lately. And we’d like to keep our money working for us. And generating cash flow of the dividends and selling options for cheering is much preferable option to having cash to sit around. We want more cash flow in our lives. And, as always, we prefer to be in control of our money. What about private lending? Erwin? Oh, who was that? Who said that?

 

Erwin  

I hear that question a lot. I’ve been around. So remember, folks, I’ve been part of organised real estate investing since 2008. I’ve seen too many people lose their capital via private lending. The risk reward is not there. For me, I don’t like the idea of having kept gains. And for me my experience, I know where the risks are. And that’s not enough for the reward for my personal preference. Also, knowing where the market is right now, this is not really a market, I’d want to be private lending. And yeah, maybe I’m a bit too on the conservative side. But again, I’ll just reiterate, I would say my opinion is that you’re the best at managing your money and to manage your money and indeed be control of it. So we can take care and attitude to educate ourselves to control our own money and earn returns. Hopefully for you my regular 17 listeners that you’ve been following along closely and taking action and time the market got lucky timing the market like we did. Hopefully you’ve been attending our meetups in order to continue to set yourself up for optimised success. Speaking of meetups are next in person, zero zoom, we’ve cancelled a large part of our Zoom account. We have a live meeting in person Saturday, April 23. Doors open at 8:30am. We’ll wrap up the meeting around noon and then head to Hilton for a street smart tour of actual physical real estate investment properties. It’s all live and in person, there will be no recordings of these people’s some of these are people’s personal homes. We’re not going to be recording that the tours for educators educational purposes, there is no pressure to buy anything. Honestly that pressure should come from within as to your why why are you invest and your understanding of the world that hard assets will win? Because if you’ve haven’t been paying attention to what what asset classes have been winning, I think you should have a look at that. And that might help motivate you to take action. Those sadly, who do not have our assets are being left behind and where do you think there’ll be in the next 10 years? Do you think those without assets will be ahead or behind over the next 10 years? Maybe by answering that question, you’ll know what you want to do. Investing wise, April 23. We’ll be sharing about joint venturing the latest happenings on the streets in terms of rents and resale prices and renovating for returns. There’s another reason to renovate. I was talking to a friend who wants to take some money, invest some money in the kitchen for her home. I’m like we’re real estate investors. We don’t do that. Or like the shoemakers children. Our homes are last after you make a lot of money. Anyways, if you’re on my email list, you’ll receive invites to register. If not go to www dot truth about real estate investing.ca I should have slower WWW dot truth about real estate investing.ca and put your name and email address and you’ll start receiving email notifications for our events. Is it doom and gloom for real estate investors? If you think it is I highly suggest getting educated and in spending more time around veteran real estate investors who take action those preferably someone who’s actually invested through a recession before the last real one was 2007 and eight. I was personally investing in 2005 And guess what? I’ve made a lot of money since then. 

 

Erwin  

And enough for me onto this week’s guests as we have a real estate investor from Belleville, Ontario that Far East located and for those who don’t know where Belleville is that’s east of the GTA the greater truth Don’t area but before Ottawa with affordability being terrible in the GTA in Ottawa homeowners, tenants investors are all driving further than usual. And that was proven in a report from U haul. You know the truck rental company the moving truck rental company, and it listed Belleville Ontario as the number two and destination for their moving trucks. I’ve also spoken to several offshore investors who have expanded their search to Belleville investors I respect and then when you know Stephen Phillips reaches out to me and says hi and here we are. He’s on this today’s show as far as our guest, Stephen or his business had been featured on HGTV 24 times and Scott McGilvery. More importantly, Stephens real estate experience includes managing over 1200 apartment units. So that’s a lot of that’s a lot in his previous career. Then he went on vacation in Costa Rica and I ended up moving there. But he came back he came back to Ontario like many people do start a family, raise a family and then from there, he jumped into real estate with both feet back in 2014. Joining real estate networks hiring coaches like Ian Zabo and Quinton D’souza near the end of the interview, we get into detail on what current opportunities look like in Belleville. And Stephen tells his awkward celebrity fan moment when meeting Scott McGilvery. Please enjoy the show. 

 

Erwin  

Hello, Stephen. 

 

Stephen  

Hi, how you doing?

 

Erwin  

I’m excellent. Thanks for coming on the show. So what’s keeping you busy these days?

 

Stephen  

Mostly you and my kids and my kitchen business. I got a lot of things on the go man getting older gotta keep busy.

 

Erwin  

Speaking to the like, you already have a successful What do you call it? kitchen cabinetry and countertops?

 

Stephen  

Yeah, we started as like a countertop business. But like predominantly, and then we’ve kind of morphed into kitchens in the last 12 to 14 months with COVID. So yeah, I guess so I just call it a kitchen company now because it’s just easier to define it as that but we do everything. countertops, design and kitchens.

 

Erwin  

And it’s pretty successful, is it not?

 

Stephen  

It’s doing well we’ve we think we’re doing well. I mean, it’s one of those businesses that it’s like you start from a place where you don’t really know what’s well like what I had no idea I got into the business. Quite, quite strange, I guess you could say. We were we moved out to this way my wife and I moved out. I mean, the Quinney west area, Belleville, we live in caring place, Prince Edward County, all of these areas. And so we moved out here, and I meant to like slow down and relax and take a break from real estate. And I got here. And within two months, about a month and a half. We had JV and partner to bought a flip house in Prince Edward County and Airbnb that we were flipping it into an Airbnb. And I had no contacts. I had nobody here I didn’t know what was going on. And then we got to the countertop stage and the kitchen stage. And we shopped around, and I just saw this massive hole, like just, there’s just wasn’t a lot of options. There wasn’t a lot of people here. And there was a lot of people about to come here from Toronto. And so we kind of got in front of that before the people got here and opened this company up and made some made a partnership with a with a really good person who’s an importer, and just kept running from there, man. My wife loves it. Like that’s the reason I got into this business is because I was building a real estate business. And my wife hated it. She hated it. She wanted nothing to do with it. She didn’t like Like, she didn’t want anything to do with it. So renovations. She liked the design, like she liked designing. And she liked that it made me happy. But she didn’t like any of the other things about it. She just wasn’t into it. She’s the daughter of a property manager. So the thought of managing people and property and tenant like it was just the last thing she wanted. Then I had this all those things. I know. But you know. And then I had this like, fear. I woke up one day and I had this fear that if I died tomorrow, my wife inherited my real estate business, she would be very mad at me. So it just worked out that she was into natural stone and into design and into kitchens and into all this stuff. So I took a break and walked away from real estate for a couple years to help her build this business and leave her something that she could run with. And that’s that’s where we’re at today. She’s good. She’s got it all under control now.

 

Erwin  

Right and has. So did you put the investing business on pause then?

 

Stephen  

I really did. Yeah, I wasn’t able to multitask like I couldn’t. I tried at the very start. I was trying to be both realtor and selling natural stone. I mean, that’s what I do. I’m a sales guy. I swear I’ve been since I was probably six years old. And so when I was doing it, I wasn’t able to disconnect my brain. And it just got to the point where I was being pulled to many different directions. And I mean, you know, when you start a new business, you really need to put 120% into that to get that momentum just to make the thing roll. And so it took it was a hard decision, but I did I froze my licence for about two years and stepped away from real estate so that I couldn’t be tempted like by freezing my licence. I couldn’t get these calls, I would still get the calls, right? And people be like, Hey, did you see that? And so this way, if I froze my licence, I can legitimately say like, No, I can’t help you. But I have somebody who can help you and do that kind of thing. And it just forced me to take it really seriously and not get distracted.

 

Erwin  

And it’s been quite the journey has a not. So we have quite a journey to cover. So yeah. Was it your first job at a school you worked In property management? Yeah. So I just didn’t get into isn’t it?

 

Stephen  

Yeah, it was ideal. Man, I got into condos. My father, my now father in law was he’s owned a condominium property management company for I don’t know, since the late 80s. So like, whatever this is now, 40 years, 30 something years. And so when I got out of school, I had really no direction, I’d gone to school for marketing, didn’t really know what I wanted to do. And so he looked at me who’s about to marry his daughter, and he’s like, You better get a real job come work for me. And so I did. And then that led me into managing condos pretty early, and managing a portfolio of like 1200 doors 12 condominium corporations 12 Board of Directors, learning condo law had to learn architecture and design and carry on warranties and reserve fund studies. And just like, wow, it was in over my head really quick. So I learned a lot just by being over my head and having to try to catch up. And so that just talked, it took me down a really cool path and if at the time, so it’s like 2004 2005 by 2006, the condo preconstruction market booms in Toronto, and we just like start taking off, and condos start to just like develop really quickly. And so then I got my licence, my real estate licence by 2009. And started selling pre construction condos at the same time. That, that I was kind of managing them. I had an advantage. I understood a lot of condos when people were still trying to figure them out.

 

Erwin  

2009 That’s a funny time to have the recession.

 

Stephen  

Yeah, but you know, Toronto, it’s weird, right? Because like Toronto in it didn’t blink, like it was so weird. And I think that time kind of led me like I was I was young, I bought a pre construction condo, which is so ironic that I just said I knew what I was doing. Because at the end of the day, I bought a pre construction condo in Durham. And that builder was had this awesome project. Now if you go into Pickering, you’ll see it. It’s like this beautiful San Francisco project right on the goal line. Like it just checked every box growing community, like you couldn’t find anything wrong with it. But what I didn’t put into that is that once you send your money into that trust account, you give it to the lawyers, you can’t touch it anymore, right? I didn’t learn that lesson until I learned that lesson. And the builder ended up getting into a squabble with one of the tenants in the old mall that he had bought that he was going to tear down and rebuild on. And that drew out in a court battle for almost four and a half years, while he tried to evict this veterinarian out of this plaza. And it was a nightmare. And so I got stuck and sorted a whole bunch of other people with like, pretty much all my money, everything I had in this trust account, and I couldn’t get it out to save my life. And so it was a really weird time to Yeah, it was really, really, really stressful time in my life. But I learned a lot I learned a lot about easy. Yeah, it was crazy. It got built, it took seven years to be built.

 

Erwin  

So would it take like two and a half of everything that normal?

 

Stephen  

Should have, like every other project was going up in like a year, right? Like this is the time when like there’s some pretty heavy hitters made their career between 2006 and 2010. Right 2009 It they should have been able to go up really quick. It was just one of those projects. I don’t know, Luck of the dice, I guess. But But yeah, in the end, that actually could have been the best thing that happened to me. It gave me a lot of like freedom. And I learned a lot of things about like making bad decisions and how people are going to judge every decision. And then it just made me a lot stronger dealing with how people judge you and should they judge you and do you care, like at the end of the day? Do you care at the time I did. It led me to leave and go to Costa Rica. That’s how I ended up in Costa Rica. Wow. But essentially, yeah.

 

Erwin  

So you so you were working professionally in real estate during the recession, which is the last…

 

Stephen  

 Yes, I got real estate licence. Yeah, technically.

 

Erwin  

We typically think we technically had a recession for COVID. And we tend to really hit a recession for the financial crisis. We didn’t feel as much in Ontario as the West for example. Can you? Because we may see a recession soon? Like what was your experience like as a property manager for condos like to show you the p&l is handed in there? Oh, left home. And

 

Stephen  

This is the pitch my father in law gave me at 23. And it’s true. He wasn’t lying. It’s true. condominium property management is recession proof. Now, it’s essentially recession proof. Yes. Condo management, okay, you get paid on a contract, the contracts 3060 days, you can get kicked out. Sure. But you’re on a contract that money set. The owners of the Condominium Corporation have to pay their maintenance fees every single month. If you don’t, the only other person who can lien your property and take your property is a condo board. And so they have to pay like there’s no option. And so people were buying condos, they were living in them. They were paying their maintenance fees they had to, and then that feeds the property management company. So yeah, I was sheltered from it, right. Like because I was working in condos and my life didn’t change. All it did was get busier, we were getting more condos, there was more opportunities as these things were being built. And so to me, it looked like you know, I did 22 I was 26. Like, it didn’t even feel like there was such a thing as a recession. You heard it, and I could see it down south in the US, but I didn’t feel the life. Oh, or a West. Yeah, for sure. I mean, everywhere but where we were, which is oddly enough, right, like, so I get into pre construction condos, and we started selling them. And I was working with a realtor was really experienced. He was a really good guy and very charismatic, very super charismatic. And one of the early adapters of pitching the builder to take 50 units. Like at the time that was like boggled my mind, I didn’t think that was possible. But he was very early into that game where he would bring 50 investors, they would all buy a unit or more. And he would clear out a building on his own before it ever hit the market. We were turning renters into multi part a condo unit owners, they wouldn’t be paying 15 to $1,600 in rent, they had a little bit of money saved. And then like you had to keep in mind the condos were selling for like 235 289 really low. And at the time, you can do 5% down deals. Right? And and so 10, 20 30 grand people were just pitching 30 grand out of grab a bunch of units close into the three years. And yeah, man, it was crazy. We watched a lot of people make a lot of money. So that’s how I got into real estate. My first year, I did six figures and lease deals. I did leases for my whole first year. And due to that I would show up, I would show up with like six different rental applications at the bottom of the building. And I’d book appointments all day. And I just keep showing the same unit until I found somebody who took it and then we fill it out, submit it and try to win. And then I would I would do you know, 1500 bucks or two grand off of the half of first month’s rent and a lot of leases, a lot of leases, but it was early and I didn’t know what to do. And so that was the best way to learn.

 

Erwin  

If these are solid units.

 

Stephen  

Well, I did that too. But but you have a trustworthy, right? Like you’re 2526 like what do you know about real estate and a lot of people are telling you that and so it was hard. It was hard for me to and I like to save a baby face. Like I like to think that I look young. And so it was hard to get a lot of confidence early on when I was a realtor from other people. So it was a challenge.

 

Erwin  

So you say you don’t need to retire to Costa Rica.

 

Stephen  

So I go to Costa Rica to vacation, I take a vacation, I’m making some good money, I’m doing some good things. I take a vacation with a buddy of mine and his girlfriend and my wife. And we go down and we essentially booked one place we were gonna go for like three weeks. I had one hotel booked and it looked like it was only like, you know, three inches away from the on the map from the airport. That’s got to be easy to get to. So we rented a car we start driving through. Turned out it took us 12 hours to get there on some like washed out roads. And we ended up getting there seeing most of the way and had a great time and just like loved it and had this amazing trip, right? I come back and I tell this story often but I come back and it’s midnight or one o’clock in the morning our time to dark I’m at the airport, I go to pick up my car from the rental place. I go to the gas station, and there’s nobody to abandoned right by the airport. And I’m pumping gas and this guy across the way from me on this other pump just starts kicking the pump like booting it like like just stomping on it. And I literally looked at when I looked over at my wife in the passenger side. I said we’re out of here. These people are crazy. Costa Rica was so much better. We’re out I’m gone. I’m not staying and six months later, we sold pretty much all of our little furniture and possessions, a car and some other things. And we cleared out. And we moved to Costa Rica and ended up staying there for like a year and a half.

 

Erwin  

All because of a pump!

 

Stephen  

Just because it just it was like this. It was like the epitome of madness, right? Like, it was just crazy. You have everything in this world. You’re so privileged, and yet you’re mad at a gas pump, you know, and, and the prices weren’t even half as high as they are now. Right. So it wasn’t about price. It was just like it wasn’t working. So yeah, so I, I went down there. And again, very little planning, I just went and within two to three months got pretty bored of sitting on the beach every day and trying to pretend like I could surf. And so we opened a business there and we started we walked around the towns, right, we looked around and everybody had a restaurant, the only one I couldn’t find was Pita Pit. So I ripped off Pita Pit and made a little rap shop that we call wrap it up. And it was a little chicken and barbeque chicken wrap shop and we serve them surfers wraps at sunset.

 

Erwin  

And I’m only doing that?

 

Stephen  

Of course not. But I survived. I survive. And I thought I was marketing genius. You know, like you have to leave Costa Rica every 90 days to because you didn’t have a visa, right? So I didn’t have a visa so we had to leave every 90 days. So I flew into Florida because it was dirt cheap to go for three days. And I had family there. So I go into Florida and I go into Dick’s Sporting Goods and I buy a hockey stick and an orange ball. And it cost me like 20 bucks for a hockey stick and an orange ball. And then I go back to Costa Rica and I’m bringing it with me through the airport. And Costa Rica is 100% tax, whatever you’re bringing in, they just charge you 100% tax duty on whatever your value of the thing you have. And so at the time, that’s what they were doing. I don’t anyways, so I bring this stick and this ball in and literally 10 Costa Ricans are sitting around trying to figure out what it is and what is what’s the value of a hockey stick. And so essentially, they charged me $60 of tax on this stick and ball. And it was twice as much as I paid for the damn thing. So I had it in the country. My wife said you better use this. I don’t know why you brought this here, we’re in a tropical place. But in front of our shop was a concrete wall and a concrete parking spot. And so every day at about like 2:30, 3 o’clock, it’s like siesta time sleeping, everyone be sleeping or resting in the sun’s hot, I’d go out and shoot the ball off the wall, and then like, boom, boom. And it was like, I don’t know if it was like a smoke signal to Canadians, but all the Canadians would come out and they’d be like, that’s the last thing I thought I’d see in Costa Rica. And I’m like, Yeah, well, it keeps me busy. Maybe like, well, what are you doing? So I’m just having some fun waiting for the surf. Hey, are you hungry? And they were like, Yeah, I’m starving. Like, you should go in there, man. They make a great wrap right there. They’ll get you a wrap take care of you go in and say that you know me, they’ll take care of and they’d walk in, they’ve talked to my wife and my employee there and they buy a wrap. And I just keep shooting the ball. And every day I attracted Canadians from all over Calgary, Vancouver, I met a whole bunch of people just because of a stick in a ball. So yeah, man, that was a marketing genius.

 

Erwin  

And then, You left paradise….

 

Stephen  

So then my wife gets pregnant. We’re having our first child who’s my daughter, Mia. And at the time, we thought we were gonna stay because there’s a way to get citizenship if you have a child in Costa Rica. So we’re like, all this is. This is a way to get our residency. But then my family starts talking like you can’t have a child there, like you don’t have anybody. How are you going to do this? And so my wife, I guess, fell for that. And she’s like, Alright, fine, we’ll move back. And so we moved back, we moved back to Toronto. And yeah, and I stayed in Ottawa for a couple of months while we were first got home, to re-acclimate. But it’s funny, because when I was in Costa Rica, I was talking to a bunch of people down there. And like, 2009 hit them hard, like hit them hard. Like they were Hatfield condos everywhere, like, just destroyed. And I would talk

 

Erwin  

There’s crazy money flowing, right?

 

Stephen  

Americans, the Americans were coming down from California and all over and then buying all these things, pre construction, and then when the market tipped, they all took off and just like abandon the place, right. And so I’m talking to this guy, I’ll never forget him. His name was Hans, he was Italian. He was a realtor in the area. And he’d be like, Steve, where are you from? And I tell him, and I’d be like, Hans, it’s crazy condo market, and they’re building condos everywhere. It’s amazing. Like, they put them up and they sell them out in hours and blah, blah, blah. And he looks at me, I’ll never forget the day looks at me and goes, Steve, what are you doing here? And I said, I don’t know. I really don’t know. I guess I’m missing a really good opportunity back home. He’s like, I haven’t seen a buyer in six months. You should go home. Yeah, I guess. So. That kind have fed into it too. And yeah, and so we came back home and we got a pretty good thing going in Toronto here. I guess I should go back and try to take advantage of it. So yeah, so that led me back into Toronto. I got back into property management again, first things you’re having a kid you freak out. So what am I gonna do, I need a real job. And I don’t want to start being a realtor again from scratch. So while I’m waiting to do that, I get the job as a condominium manager. And I started managing Maple Leaf square, which is right across from your canvas centre. And at the time. At the time, it had just been built lanterra and just bought it I built it. It was in its first year Terry on on it’s it’s just in may have the bottom 10 floors are Cadillac, Fairview runs those and commercial and the top floors 80 to 90% of the building was tenanted, and there’s not like defects, but there was defects. And so there’s a lot of work to get kind of fixed. So that’s where I landed.

 

Erwin  

Were investors renting them out, or was that a rental builder?

 

Stephen  

Yes, a lot of the building had been sold to investors in two major countries, I think you can guess which ones in here, those maybe not here. None of them were Canadian. And a lot of them were foreign buyers. I was a legit foreign buyers when they were there. And so the foreign buyers owned them, and realtors would represent those buyers in the purchase. And then they kind of be like the property manager, like the pseudo property manager when you take over, but as a condo manager, you had no context, you didn’t know who any of these owners are. And most of them never knew where their units were. So it was like, at least once a month, once a week, the elevators on the 10th floor would open. And then somebody would walk off, and you’d be standing there with security. And they’d be like, Yes, can you take me to my unit? You’re like, what unit? Is it? I don’t know. Where is it? I don’t know. I just know I own two of them here. And you’d be like, okay, you’d have to go and track the unit and you take them up there. And sure enough, they don’t know. And they’d be vacant or rented whatever. And so it was crazy. And yeah, and then in 2012, I remember my daughter had just been born in March, it was April of 2012. I’m getting ready to get on the go train to go down at seven in the morning. And cp 20 fours on in my house. And all of a sudden, my dad building Maple Leaf squares on the news and smokes bellowing out of the window. And I’m like, Oh, that can’t be good. That should be a good day. My phone starts ringing and it’s my head of security. He’s like you got to get down here in the next 30 minutes. We just had somebody jumped out of the 47th floor, they set the unit on fire before they’ve left 12 floors up, have smoke damage. 20 floors down have water damage, and we don’t know what to do. It’s chaos. And so yeah, so I just want to go down and and it was the craziest, craziest thing ever. It was foreign. It was foreign students. There was no visas, there was no lease in place. They were Korean students. They were just here for U of T. The people on the lease had sublease to these three guys. Nobody ever collected their information. So nobody knew who they were the the owner of the units. dad lived in a foreign country. She was going to school at Waterloo. So I had to call him and he came down. And he didn’t know where his unit was. He’s on the hook for a $25,000 deductible for the insurance claim. And he goes, What do I got to do to get out of this? And then the tenants look and they go, What do I got to do to get out of this? And I’m standing there, like somebody’s got to pay the deductible. The tenants went down to the basement to the TD Bank, they came back up with a cashier’s check. They gave it to the landlord for 25 grand did like are we good? And he’s like, I guess so. And they left and they were never seen again. And the landlord gave me the check. And he was my good. They said I guess so. And the units. It was just madness. It was crazy. It was crazy. It was crazy.

 

Erwin  

That’s okay, that’s truth about real estate investing that can happen with a condo like I’ve had I’ve had family and friends affected by fires, floods that weren’t didn’t originally from their condo, right?

 

Stephen  

The crazy thing about that, and so the deductibles 25 grand, right? How did we get to a deductible of 25 grand, there was a pipe that kept bursting in every unit behind the laundry. So every time the washing machine pipe would blow, you’d have water come out, and it would take out like one or two units. So that happened maybe 3040 times like I can’t remember the number but it happens so frequently, almost every other day, it would happen and we’d have to go fix this. And over time we got so bad that you just you couldn’t even put in insurance claims anymore because the deductible just kept climbing and climbing and climbing and climbing. And by the time when they actually needed the deductible to be low. It was 25 grand and things like that, like, those are crazy condo stories. But they happen, right? They’re not the norm. But once they happen, it’s really hard to get insurance again, like there’s a lot of there’s not a lot of insurance providers for condo corps. And so crazy stuff happens. And then you’re kind of just caught up in it as an owner. In one of those buildings. The hardest part for me was like everybody dumped out because the smoke alarms were going at seven in the morning, and they all fell like they all came out the same door, which is like river the ramp goes when you’re watching, like ACC or whatever it’s called that switch. When the players come out the back ramp that goes to the guts of the building. That’s where the body felt, that’s where the person felt, right in a car and the coming up the ramp actually ended up like driving onto them and staying there. All of the people dumped out of that building and had to walk past that scene. And all that we had was a $12 an hour security guard fresh into the country barely spoke English. And he was trying to like steer traffic away from this thing. And you’re trying to you feel so bad for all these people. And there was chaos. It was chaos. They didn’t know where to go. You’re right at the Gartner it was mayhem it was man. So that’s when I left condos. That was the day I was pretty much within the next two months, I went back to real estate full time I was like this is it’s a lot easier to sell them than to manage them. This is too much. So there’s lots of job opportunities and condo managers. There’s significantly not enough managers to to meet the demand of how many managers are needed. But it’s just a tough job, man. Nobody calls you to say hello and no there’s no glory. There’s never a good, like happy day. It just doesn’t happen. So you ended up in some really negative negative vibes. negative vibes. Okay. Yeah. So we’re talking about condos, right? Like I’m biassed, I don’t know I like pre construction condos. I’ve seen millionaires get created by creating pre construction condos but I’ve had another vision like a version of it and I met a lot of people from the inside out. And it’s just it’s a good business it’s it’s a need you need to have them but it’s a tough it’s a tough sled man. It’s a tough sled. So so that’s how I ended up into real estate again in by 2014. I was back into real estate full time.

 

Erwin  

And then what was that like?

 

Stephen  

That was like I better learn something.

 

Erwin  

How did you start learning?

 

Stephen  

I started learning the way that I think a lot of people try to learn I read books I did. It wasn’t as many big podcasts like 2014 There’s no pod I still listening to Sirius Radio. There’s no podcasts like Joe Rogan was an epiphany that hadn’t even been thought of yet. I was basically like going to meetups, I became a member of Durham Rei, and which is a real estate networking group in the Durham Region. Actually what ended up happening is I started learning from multiple different meetup groups. I went to a seminar like all people do, I went to this seminar, I was just actually telling James about this. I went to a seminar and 2013 2014 I can’t remember the company that did it. The gentleman that was there was from Calgary, and he was like an expert rent to own guy. But he did sandwich lease options. So like, you don’t have money sandwich lease option. So I’m like, Wow, that’s crazy. Like, how does that work? So he teaches me sandwich lease options. And so in a room full of people. His pitch was he would call Kijiji rental ads. And people that were trying to like landlords trying to rent out their unit and be like, Can I show? Can I come see the unit? Does it have to die? Yeah. And then when he had him on the phone, he’d be like, so when do I rent to own or something? And he would just keep saying that until they were like, I don’t understand you come and see the place and we’ll go from there. And he would just play country dumb and so I learned this thing. So I actually got into try to do sandwich lease options. I thought they were crazy and got in got a couple of them and made them kind of work. You know what’s ironic? My first one was in Wellington, Ontario, which is in Prince Edward County, which at the time I had no idea where it was. I just knew the Trenton army base was there. The house I got the house for like 220 I think I did it with $100 bill as my holding like guys my deposit. It was crazy, man. Yeah. So that’s kind of how I got into that just trying to do like everybody does, like go to the seminars, they teach you something. I just wanted to be the action taker. I always wanted to be an action taker. Like I always wanted to be the guy who did something to just waste my money and listen to somebody and go home. So I would try whatever they said I would try it at least once and see what happened. And after trying a couple of these crazy ideas. I was like I gotta learn from somebody. Really good. I got to figure this out. I got my real estate licence back I had put an option or got a property in Oshawa, that in hindsight now was just glorious, but at the time wasn’t a great deal. But I had two houses side by side that were on the market and their total frontage was just it was up from downtown Whitby actually total frontage, like 150 feet, and massive lots together. And I had them under contract, but they were like the old wartime houses, you couldn’t really duplex them. And I was trying to find a JV partner to do this deal with. And so I called the desperate effort I called number on the sign, you know, like, you call the sign like that guy buys houses. You probably want to buy this house, so I called it and on the other line was quitting D’Souza, which was my introduction to one of the greatest real estate coaches I’ve ever met, and was amazing. And so I pitched him this deal. I told him and he’s like, like, No, I don’t want that deal. I don’t want that deal. I can’t do Plexes. I’m in the duplexes. I stay focused. I only do duplexes. I don’t want that deal. I said, Oh, but he knew so much. So I’m like, How do you like who are you? Who are you who is this Quinton D’Souza and he said, he goes, Well, I have this group, maybe you should come to it. And I’m a coach, and I can maybe teach you some things you should come and I said, Okay, and so and so that brought me to Quinton D’Souza. It was also the hardest real estate deal I ever had to do. Because I never found a JV partner. I had the deal under contract. I couldn’t close on it. I had a deposit in place that couldn’t close. I was by myself. And I had to go back to the sellers. And the seller was a eighty year old man and his wife and his kids. And I had to tell him, I couldn’t close. And I had to sit in their living room and tell them face to face because I couldn’t do it any other way. I had to face it. And I walked in and I said, Look, man, I can’t close. I’m really sorry, I bit off way more than I can chew. And I’m, I’m sorry, I’m sorry, I did this to you. And I’m sorry, I did this. And it was a terrible, terrible feeling at the time. And he was really cool about it. He just said to me, he’s like young man, you’re gonna make a lot of mistakes. It’s terrible. You did it to me, you’re gonna make a lot of mistakes. Just don’t ever do this again. And I really took it to heart and I feel like I think like I believe a lot in all these things. I’m a person where nothing happens by accident. And it brought me to Quinton D’Souza. And it brought me to that real estate group. And that’s when I just was like, I gotta learn, I gotta learn something, I can’t do this without learning. So I became when I joined the mentor programme with Quinton D’Souza, one of the early ones, I think, third or second into his coaching programme. And I spent six months with some really, really cool people who are now like in the industry titans in their own regard. But at the time, we were just, I think we were like the second wave like, I came in with Ryan Carr. And a lot of those guys like we were young at the time. And like you and Quinton and Zappo and lawfare. And all these guys had already been doing it for a while. And so we were just trying to learn from everybody around and I was in that group. So I was surrounded by some really smart people at the time and could absorb a lot of information from smart people really helped very much. 

 

Erwin  

And then you quit?

 

Stephen  

Why didn’t quit right away? No. I then got into it full full bore, like so from like, 2014 through to like 2017 Four years. Yeah, like I did a lot of deals like, you know, I think so I was pretty good. Like I wasn’t, I wasn’t a slob and and I put myself around good people. And I’ve heard I harassed Dabo until Ian would, you know, let me hang around and learn some things from him. And then I learned a lot from him for about a year and a half, two years and I got to be around people that you

 

Erwin  

Just to backtrack, Quinton is one of the best coaches in our community. ultra successful investor has since moved on from duplexes to only does apartment buildings, it seems. Yeah. 

 

Stephen  

And quote, sorry, just to cut off, but like one of the most humble people I think I’ve ever met, and very much and although he answers questions very truthfully, and honestly and bluntly, he puts you in a position where you have to ask a good question. Like, if you don’t ask a good question, then you know, you don’t take anything from it. So you’re in a spot where you really have to be a good learner and be wanting to learn and want to teach yourself. So yeah, really, really, really just a really good person. And I was really blessed to be around that at the right time. learn a lot from people.

 

Erwin  

Shout out top teachers, Teachers seem to be really good investors.

 

Stephen  

Yeah, because they know how to deal with stupid kids, I guess, right? Like I say that about myself, right? Like I was the class clown. So I know that I put a lot of stress on a lot of teachers. I think when you’re used to dealing with that kind of stressful environment. You can like a contractor and a project management scenario. I think you can handle it. I think they don’t think they can but they actually can cause There’s a lot of similarities there.

 

Erwin  

And then shout to Ian Zabo, who’s, you know, have many, many obstacles, and he’s done very well for himself. He’s written two books, I think. 

 

Stephen  

Yeah, Ian is, is just one of those guys that, you know, he taught me more about people, a lot of people. And when I approached his apple, I was trying to learn about real estate. In the end, when I looked back on it now, he taught me more about people than I ever really expected. He taught me how to be empathetic. He taught me how that like you’re in a real estate transaction. But there’s people involved here, like, it’s not numbers, it’s its people. And you need to figure out how to communicate and solve problems for people. That’s how you get good deals. And it’s not about how many doors you can knock on and volume, it was about how many relationships he would always amaze me, like he wouldn’t have to do is he did have to work in like, he worked really hard. But he would be able to knock on like three or four doors, he would be able to talk to like three or four people and convert to all these deals. And I was like, how do you do that like, and the way he did it is just, he’s just a really, really, really good person. And he would take time and listen to people and then he he’d hear things, and he’d solve problems for people. And that’s a really valuable skill that I think a lot of people don’t, they get caught up on spreadsheets. And I think there’s more to it. There’s more to real estate than that.

 

Erwin  

He gave a lot in his business by renovation business. He gave a lot. People were Yeah, we’re lucky to have him.

 

Stephen  

On I’m one of them. I count myself as one of those lucky people to have him and to be around him at that time. I mean, I’m blessed. That was it. It was a great, it was a great experience.

 

Erwin  

And then you started the kitchen business. 

 

Stephen  

Oh, and then I started kitchen business. Yeah. And then and then 2016 2017, very similar to now the market was crazy. And it was very stressful as a realtor and very stressful for investors prices are going up every day multiple offers, things were happening that were new at the time. And then like I said, my wife didn’t want my business. And so I had to figure out something else. I had two kids now. And by that time, I had a daughter and a son. And they were getting ready to go to school. And I wanted to make sure I brought them to kind of a smaller town, a smaller community slower vibe. And so we moved to Brighton, Ontario in 2017. We came out here we looked at one house on a Tuesday and bought it on a Wednesday and we moved out here. And so the story goes, and then we and then we started our kitchen business. And then to start our kitchen business, I had to get a building because I had to put the stone somewhere. And so I found a commercial property that’s out here at the gates of Prince Edward County that nobody else really wanted. It had been up for sale, I drove by it every day as I was going to my Airbnb project. And this simple 6500 square feet was an ugly building at the time, but had a big lot. And it was right that you had to drive by it to get into the county. And so I drove by it every day, and nobody bought it. And so one day I called the guy up the real estate agent, I’m like, I want to do a rental and or something. So I ended up ended up doing that deal as a rent owed. So I use that skill again, we locked up the property in 2018, we did a rental, we closed on it crazy enough in the middle of COVID and March of 2020. Which made it really hard to finance because nobody wanted to touch commercial property at the time. But we figured it out. We got the deal done. And we bought the building. And it’s been it’s been been going ever since.

 

Erwin  

You actually just raised a really good point is like real estate investing is deal business. It’s all business. These are business relationships and business skills you have to develop and they can translate into other areas of business. Just like you said, right? For example, a friend of mine who bought a business in Canmore, Alberta. She hated VTB to buy it. Right, right? Like the business, the business have failed. And and here’s here’s the second one in so he’s buying that business. And he’s like, Well, I don’t have all the capital, can you? Can you like loan it to me? Can I work? Can you lend it to me? Right? I’ll do that. Yeah, so use the real estate strategy in buying a business, right, these things apply.

 

Stephen  

It applies. I think what you get when you get to be into like into the trenches of real estate is you get to get a thicker skin that you can ask questions like if you don’t ask, you’re never going to know. And if you know the strategy and have the tools to know how to structure it and know what to ask for. Yeah, it’s very, very versatile. You can figure out how to use it in multiple ways. So I try to learn skills that I can use different ways because I just I don’t ever want to learn something and then never use it again. I think that’s a waste. I would rather use something that I’ve learned. I can

 

Erwin  

Okay, so I’m actually trying to think so everyone, everyone on our team has a nickname There’s just HGTV So Ryan’s out of the bag now he’s gonna know HGTV. But my understanding is

 

Stephen  

I didn’t say that card, it wasn’t me.

 

Erwin  

He posted on Instagram last night. It’s all good. He posted it first, I’ve bitten my tongue for over two years.

 

Stephen  

Exactly, exactly. So how did I end up on HGTV?

 

Erwin  

So first off, you’ve been on HGTV more than anyone I know personally.

 

Stephen  

Well, yeah, you say that. And then it makes me hungry. I try to be humble. And when you say that, I feel like right away your Hollywood. Right away, I feel like I should, I should stack this and put it into context. My company, our company did 23 episodes of HGTV Scott McGilvery vacation house rules. My wife and I heard. Yeah, my wife and I were on three, two episodes, three episodes, one in the first season two in the first season and one in the second season. And then they shot in our shop. In the second season, I think episode six, and they shot in our warehouse in episode season one. And then they we were on site, and I did the walkthrough at one of the instals and season one with Scott. So yeah, okay, at times.

 

Erwin  

That’s all the TV time you get when you product when your products and services in the in the building?

 

Stephen  

Yeah, man, that’s that’s what you get? Well, you don’t actually they put our if you go back and watch this season, and I encourage everyone to do that, because it helps everyone. There’s our logo soulstone by GMI will come up at the very end. And we got like in the credits actually logoed in the credits. So yeah, I mean, that’s, that isn’t given out to everybody. That’s, that’s a unique thing. Because we worked really hard for those guys and did a lot of good work for them. So so they were able to put us in on the credits, and then have us included on the show.

 

Erwin  

So how does one get in on HGTV on an HGTV show? And is it beneficial?

 

Stephen  

As a contractor, I think it happens one of two ways. Either one, they do a call of action, like they’re coming to an area, they do a casting call for contractors to come and do the work. And you kind of figure out if you fit and you go in there, right? That’s not what we did. We didn’t do a casting call. We didn’t respond to them. Essentially, the way we got in is we’re out here in the county, right? My wife and our team put a lot a lot of effort into our Instagram account and our social media. And so our Instagram was doing really, really well we we were very good at it. They were very good at it. I was just sort of along for the ride. And as a result from that, one of the producers and the designers of the show, found us on Instagram. And so soulstone by GMI shout out shameless plug at soulstone by Dubai, we ended up getting picked up through Instagram. So we had seen a lot of our content, seen a lot of our stuff. And again, they had to drive by us to get to their projects as they were scouting out houses. So they kind of connected that the building was cool. What we had done was cool. I have a 1947 old Mercury flatbed like farm truck, I call up here. And it’s parked out front, and it’s bright red, and it has a stone on the back, right big slab on the back. So there’s like a lot of like cachet about it all. So they were they were interested, they’re interested in using us for the jobs, especially in the county, they wanted us to do the first three episodes in Prince Edward County and season one. We did those episodes. And it just so luckily happened. They were the first three to shoot. So once we did those, those were free. So that’s how they start the conversation. We need you to do this for free, can you? And it’s like, I don’t want to what do I get? And basically you get you get the ability to say you’re on HGTV, do you still want to be part of it? And I said, Okay, well, I have a condition I’d like to put in there. And they said fine. If I’m going to give you something for free. I don’t want it to be plain white quartz or any quartz. Because everybody does quartz countertops. There’s they’re everywhere. We have a product that we use that we’re really big on which is quartzite, which is a natural stone comes from Brazil really, really pretty. We would only use quartzite. If you’re going to have us on the show, it has to be quartzite because I know that nobody else has those stones in my area. So if you see me on TV, and you like the countertop, there’s only one company out here that has it. So at least it gave me this like isolation that I could protect. And they were like okay, well it’s, you’re paying for it. If you want to do it. Go ahead. And so we did. First three episodes went well. Then that turned into my encounter with Scott at the shop. And then that led into us being asked to do the rest of that season. And then the following season, which was actually right in the middle of COVID. And then they change the structure Once we did enough of those episodes, they changed the structure so that we didn’t have to do it for free anymore. Oh, good. Yeah, they would cover cost and like the homeowner would pick up the cost because they could see the value of the product was really, really good. So we gave them a really good discount on it, but at least broke even and homeowner got the benefit of the renovation. And we just didn’t have to go out of pocket for the rest of the season. So it worked out really, really well. And I think ultimately, I would I would do it all over again. Like it was a really, really good experience. He, that whole crew worked so hard. And McGilvery is one of the smartest business people I’ve ever been around. So just getting to talk to him and kind of absorb little things and not even just sort of seeing how he’s built his his structure of that. I mean, it was it was like paying for mentoring without having to pay. It was crazy.

 

Erwin  

I’m on their Instagram, and yeah, I haven’t seen stone like this before. Right? is it a quartz or It’s natural?

 

Stephen  

It’s quartzite quartzite. So quartz is the derivative of quartzite. So you The story goes that there’s these guys with like the quarry owners have all this quartzite that they’re cutting. quartzite is like a sandstone based or it’s crystal quartz quartz mineral. So it’s like translucent. So a lot of these quarries have all this product, this remnants dust is about 1020 years ago, they have all this dust and they don’t know what to do with it. But it’s really hard to sell natural stone because once you sell the block, it never go, it’s never going to look like that again. That’s why you hear the horror stories of people going into the builders picking from a sample, then they go into the house and it never matches is because it could never match like the blocks are always different by piece. Yeah, exactly. So courts was that answer, like they could take the dust of a natural stone, combine it with a chemical binder like a glue, and then put a pattern into it and print it off. And they could reproduce the same image multiple times 1000s and 1000s of times. And so then quartz takes over because it’s easier to sell internationally. People like working with it because it’s easy to hide seams. So all of those things kind of pick up. But quartzite is the natural stone, my importing partner from GMI. They have contacts with the quarries. And they tend to do a lot of the deals directly from the quarry. So people will spotters that are in the quarries will walk around on WhatsApp and video blocks that are coming out. Really you want this? You want to buy it? Yes. And then you fill a container. You stuffed that container up and put it on a boat and you ship it up.

 

Erwin  

So I’m actually on your Instagram and I am scrolling. I still don’t see one picture of Scott.

 

Stephen  

He’s there. Yeah, he’s there. My they’re pretty busy though. My my team and my wife are pretty active. So it’s, you’re gonna have to scroll quite a ways. Not every third one. That’s for sure. I know you. I know. You’re gonna tell me that’s a mistake. It probably is. I shouldn’t have there. Somehow subbing can be into every image.

 

Erwin  

Was it hard to get a procurement? 

 

Stephen  

Ah, so that story so he showed up with his with his producer, kind of unannounced one day he was in the county and kind of just dropped in and his big truck drives into the lot. And he comes walking up to the door. And and right away. I’m kind of shocked. Like, I was kinda like, Is this really happening? Like, what are you doing here? So when I opened the door, like hey, man, he’s like, Hey, is this soul stone? Yeah, it is come on in. And so he ended up having to talk with us for the day like for, you know, half hour an hour or whatever, walk through our showroom, looked at all the different materials kind of got a good Bible, what was going on. And he was really, really, really quiet. He was actually really quiet. And he didn’t talk a lot, which made me incredibly nervous, right? Because like, the perception is that this guy is going to be over the top and very boisterous and outgoing and extroverted. And he really wasn’t, and so made me nervous. But it was cool. And so his producer or his designer that was with them, we had been in contact with many times, I was friendly with him. And so he was kind of filling the void and talking to us. And so when we’re done the walk, we’re coming outside to go out and buy his truck. And I’m waiting for my wife, Laura to be like, Scott, can we get a picture? Can we do a picture because she’s running Instagram and she wants my accounts and she should be thinking, but my wife is so cool that she’s just like, alright, well, we’ll see you later, you know, thanks for dropping in. No big deal. See on the other side, and so I got off fanboy Yeah, it’s I got all fanboy. I’m like, Please, can we get a picture? And then it got awkward. He’s like, Sure. And I’m like Okay, thank you. So now I’m trying to get him to like, stand up beside us. And then I’m trying to do a selfie, but I can’t get the selfie right and get my symbol and my sign in the back. And so then I asked the producer, can you take the picture for me? And he’s looking at me like, are you serious, man? Like, we’re just I’m like, Yeah, please. And so he’s like, Okay, sure. So now we’re taking the picture. And Scott standing beside me. He’s a little bit shorter than me, but not that much. And, yeah, yeah. And, and his hair is like, perfect. And he’s got great white tea. And he’s got this, like, beautiful cologne on and I’m standing beside with my wife on the other side. And I’m like, I gotta look good at this picture. And I ended up completely blowing the picture Ed, like, doing this weird, sucked in got tin face thing. And it’s probably the worst picture I’ve ever taken in my life. Not to say that I have a lot of good pictures, but it was a terrible one. And that’s the one that we got. And he walked away, and he got in his truck. And that’s all I ever got.

 

Erwin  

Footage of you on the show? So 

 

Stephen  

Yeah, we have footage. And we can use sparingly, right? You can use something. There’s rules. There’s rules. Well, there’s rules, HGTV, and, and McGilvery. Is production company, you know, they they own the rights to all of those episodes. And so you can get away with a little bit but you can’t you can’t run the you can’t run big clips. So you do little clips. And you can kind of put it in here and there. But they’ve been good to us. They never called us or or said anything. But you never want to really push that envelope too far.

 

Erwin  

Yeah. You can’t see if these guys endorse us. Like that’s not 

 

Stephen  

Yeah, exactly. Because he has other contracts, right? There’s people paying big money for to be in relationships with him. And so make sense.

 

Erwin  

Cool, cool. And then you got bored with this business? Or you thought you felt you know, this real estate market is hot. 

 

Stephen  

I started to see a pattern here by my psychiatrist told me something, right? No, yeah. So then like, I don’t know, towards the end of last year 2020. Like COVID has been for contractors. It’s been incredibly challenging. I can only speak for myself. But I’ve seen a lot like we’ve done about 700 Plus countertops in the last three years. Dozens and dozens of a day. Yeah, it’s crazy. And we’ve done dozens of like kitchens, right? Dozens and dozens of, and in doing that I was doing all the appointments. So I would meet three to four people a day. So I’ve met and talked to about renovations with like, I don’t know, somewhere between 15 102,000 people, you don’t win every job, right? But you talk to them and you pitch them and you try to get the right material to match what they’re doing. And so you just talk to all these people. And COVID is like, it came in and it changed the game. And then it threw off all the timelines. And we’re the last people into the job. My crews are the last guys that get there. So at the start of COVID, everybody’s excited. They got tonnes of cash, because they didn’t go away on any holidays. They feel like they need to do something they need to change, they need something. And so they start renovating their house. contractors get inundated and overwhelmed with work. A lot of contractors can’t scale, right. Like they have a lot of trouble scaling because it’s them and like two guys or whatever. And so they get like overworked the prices start climbing, the timeline start extending. And by the end of last year, people were just fed up like they’re absolutely fed up with renovations. They didn’t want to they were in it, they started it they had to keep going. They didn’t want to people had already ripped them off by the time I’m getting in there. So they’re angry and cranky, and you’re dealing with a lot of stress. And so we had a good system. Our system is built to scale. We run for five crews, our teams go from Kingston to London. We base ourselves out of our Markham warehouse in the middle, and then we kind of expand out from there. And so we’re able pre COVID We would be we would measure on a Monday and stall on a Saturday. Like we were very efficient. Once COVID Hit we could keep going efficient. But then you have breakouts and like lock downs and like if you get too many guys in a space at the same time it becomes reckless in a household right? So then you have to adjust to that. People forget how heavy stone is. I don’t know how many people I get hurt with. You lose fingers like a mistake. You lose fingers and toes or you go like bye bye. There’s no gaps, right? And so for some reason, really big islands became trendy. So like 12 and 15, and 10 foot islands become trendy, and nobody seems like nobody wants seems. So now you’re carrying a piece of stone that’s like 10 feet by five feet four feet. What’s that weighs 2000 pounds on wet night, like, anywhere from 1500 to 2000 pounds, depending on how thick the stone is how dense it is how old it is, like the black ones are heavier than white ones like it’s because they’re just denser, darker, heavier stone. So you’re carrying these things into people’s houses. And it’s crazy, right? And so you needed eight or nine guys to do something like that. And when you start doing that in COVID, it becomes really, really difficult to put that many people in the same room in the same place at the same time. Yeah, so it was a challenge. So by the end of last year, we had figured out pretty much everything that had been thrown at us. We were still scaling, we were still able to do it. We’re still, you know, marketing wise handling it all. And I was getting kind of bored. So we Yeah, I love. I love real estate. I never knew how much I loved it until I took those couple of years away from it. I kind of like tell my wife, it’s like, you know, like when a football player or an athlete retires early, and then they realise like, oh, I shouldn’t have done that. I gotta go back. That’s what it felt like it felt like that, like, I gotta get back into it.

 

Erwin  

Right like Tom Brady. You’re just saying you’re Tom Brady. Got it? Of course. I’m Tom Brady. I’m gonna go yes. Tom Brady of real estate.

 

Stephen  

I feel like Yeah, it’s hard to walk away man. It’s hard to walk away from something you love doing. And it was probably in hindsight really, really hard for me, but I’m glad I did it. It gave me perspective. Maybe a lot more insurer. I don’t know what the word is. I think a lot more in terms of, of lessons I’ve learned in the past that I might have been taking for granted when I was in the mix or in in the in the trenches of real estate before.

 

Erwin  

Right. Now you’re in Belleville, which is like

 

Stephen  

Now I’m in Belleville that was awesome in Belleville is blowing up that was blowing up delvers. Awesome. People from Belleville would challenge what I just said but Belleville is awesome. If you have seen this story play out before. So like, for me when I’m talking to new people about Belleville I’m telling them it’s like taking a time machine. It’s like going back into Oshawa or maybe like I don’t know the West well enough to say it but it’s a ticking time machine back three to three years, right? Like the prices are more in line to that the markets more in mind to that the local realtors are kind of figuring it out the game like every time we talk to a realtor like it’s crazy. This is crazy. Do you understand it? And? Yeah, I’ve seen this before. I’ve seen it play out before. And so when you know what the last thing did, it makes it very like very, very appealing to be in this place at this time watching what is going on right now. It’s a city that is expanding. It’s a city that has no choice but to grow. It has no choice. It’s been squished by Kingston, and by Toronto. And it has the last, the last real bastion of good prices. And as well not just in residential, but commercial like like warehouses and industrial spaces. And like there’s a lot of square footage 1000s and 1000s of square footage of manufacturing being built here. warehouses that need tenants. And so those tenants are coming from very far, because they’re they’re getting incentivized to come here. So if you can look out and have a long vision, Belleville is awesome. It’s an awesome place.

 

Erwin  

Do you need any vision? Yes, you already get pretty good cash flow there?

 

Stephen  

Well, yeah. Yeah, I mean, we do. But I think that, you know, cashflow is an equation and the more money you put in, the more equity you have, the better your cash flow is. And I think prices like like help when there’s still six hundreds and five hundreds and three hundreds. And I know there’s a whole bunch of people are going to get mad because that’s not affordable housing, but it’s the reality of the market. And if if it’s if you’re able to contribute and produce more housing to a marketplace that needs it, we need it. We have zero vacancy. We need more units here. It’s really the best thing to have. And I think here we’ve been dealing with short term rentals, right? It’s been a really big part of the economy here for a while. Big vacation area, very, very tourist driven. And when you’re just strictly tourist driven, you’re very handicap like you’re you only have one lane, you only have one rudder for how the economy grows. And so that just equals taxes that just equals more taxes and And you know, they’ve contemplated putting a toll on the bridge as you entered Prince Edward County, so that you have to pay $1 or $2. Every time you come into the county. Well, why, right, because it’s just easy money. My shop where you drive past my shop, they put a road ticker to tabulate the traffic. And three times they had, they would go and it would reset, it would go back to zero. And they would think that thing was broken, and they come back and they’d set it again. And then to do it again. And really what was is there every Thursday and Friday, for pretty much June, July and August. Every Thursday, Friday, we get 25 to 30,000 cars going past us. And every Sunday, you get 30 or 35,000 Going back, and they do a big loop over the Bay Bridge, which is highway 62. And then they come back up right in front of my shop. I’m 33. And so they do this big loop and wrap around as they come into the county from either Montreal or Toronto, and they fill the whole place. It’s incredible, incredible amount of traffic here.

 

Erwin  

Crazy. And then 

 

Stephen  

Which means that I can’t go to a restaurant.

 

Erwin  

Why too busy?

 

Stephen  

Yeah, like you end up living like, like your shoulder seasons like I go to, I go to the cool restaurants and we’ve got all these cool places, right? Like tonnes of restaurant tours come here to either retire, or to do something they’ve always dreamed of doing. You have like a very good friend of mine has a food truck here, just as floss and sandwiches just as sandwiches. It’s amazing sandwich place, right. And he’s just this food truck doesn’t sandwiches. He’s one of like, probably three dozen, two dozen people out here, just living that dream, just chasing that thing, right. And so as a local, I can only go there like this time from like, March to May, after May, there’s no way I’m going into the county, it’s way too busy. I’ll be standing in lines, and it’s mayhem. And same with the beaches and all this stuff, right? So you can only really enjoy it on the shoulder seasons.

 

Erwin  

So it sounds like there’s Airbnb opportunity.

 

Stephen  

994 Airbnbs in this market, and just in Prince Edward County, there’s only there’s less than 8000 houses. So it’s a tonne of the the there’s a tonne of the market in the county is Airbnbs. There’s opportunities, but quite frankly, if somebody’s asking me they want an air b&b, I think you’re a little late. The best opportunity is about three to four years ago, the rules and the way that the game is set up right now for the by the politicians, it’s challenging, it’s going to be hard to get in, you have to buy a pre existing one, which isn’t cheap. So you end up you end up paying for that opportunity.

 

Erwin  

Good to know. So then what opportunities do you like for investors?

 

Stephen  

So I’m a big fan of the long term rentals here. Because I know that the politicians and the community wants that, right. So I don’t ever want to be in a position where I’m going against the tide, really, I mean, personally, I kind of like to go with the flow of what everybody’s into. And they’re into long term rentals. So they need more of them. The businesses need more of them, the the community itself needs more of them. So I think long term rentals are really going to be a big player out here. We have a lot of multi units like multi RES is eight plexes, five, six plexes. And I get people reaching out and inquiring about them, because they’re fairly cheap, considering like price point wise compared to the rest of the province. But I think the community itself is into more of a lifestyle where they’re looking for their own house. And so there’s a lot of independence here. There’s a lot of people that have been here for a long time. And the other thing about this place is like as these bungalows that we’d love to buy the 60s and 70s bungalows. As they’re being sold back into the market today. The thing that a lot of people don’t take into consideration is that the people selling them aren’t necessarily buying the brand new builds from the builders hear. They tend to want to build their own house. So they’re buying land and building their own new version of their own house. A lot of my kitchen business is done in new new development, but I don’t do any major builders, like no builder work, just custom builds. And so there’s a lot of that market out here. People generally, generationally get handed down land, or they get it through like relatives. So it’s easy to get an acre two acres or three acres if you’re from here for a couple generations. And so they’ll build their own house that way. I think the opportunity here for the bungalows and the birth strategy is significant. I think that in time, the comps of a well finished duplex will start to sell they haven’t sold here. You very rarely see a converted duplex that’s done to the level that I’m sure most of your listeners are accustomed to seeing. And like other areas, we don’t see a lot of those hit the market, a lot of them are really rough. The multi units have really low rents, a lot of that stuff. So opportunity is kind of wherever you want to see it. The other thing I like is little house, big land, Big Lots 70 and 80 foot lots, by 130 140. With a little tiny house on there. There’s a lot of opportunities like that still available, where those things are, are under 500,000, you can buy that for three for 380 to 450. So that’s a good price point for some people to even almost breakeven or be a little bit negative on the cash flow. But they can they have a big opportunity with land in the next three to five years with something to develop.

 

Erwin  

Sorry, Steve. That’s that’s small single family home, what is it rent for?

 

Stephen  

It’s depends on the area, I would say 1800 At the very low end 1800 Plus utilities at the very low end. I’m seeing upper floors of bungalow duplexes starting to get 2000 to 2100 a month. That’s just the top floor of the bungalow. So I think that for a full single family house, that’s not unreasonable either. But I think the market is so desperate for inventory and rentals that it’s hard to say necessarily what that we’ll get in a couple of months from now. But I think that ultimately, that’s a more of a longer term play for developer people. You know, we’re talking about car like, I mean, guys like that, who have long vision, know that those lots become valuable, the more the more the game, or the market kind of plays out.

 

Erwin  

Right. But it sounds like today, someone could do a duplex conversion and do quite well. Yes. Yes, they can. The duplex what would the downstairs rent for?

 

Stephen  

You know, I just was in one today and they’re getting 1800 in the basement plus utilities, which is one of the higher prices I’ve seen. I’m more comfortable telling people 1600 1550 Plus utilities is a standard conservative number. But I’m I did see the unit today that is getting 1800 So

 

Erwin  

That must be must be really nice.

 

Stephen  

Three, three bedrooms, right three bedrooms for sure. Wasn’t really nice. It was big though.

 

Erwin  

Got it. And then what does it cost for someone to get into a duplex?

 

Stephen  

Price point right now for those bungalows is somewhere between 640 and 680 Depending on where the area is, the certain parts of the market towards the hospital side are very attractive East Hill oldies Hill is a really nice it’s a nice market like a nice little pocket. And I think some of those areas are highly desired. But you can also you know, Belleville has outside markets, right? So Trenton is just down the road. Brighton is just down the road. Those are very, very sought after kind of communities for Belleville residents as well. You can work in Belleville and live in Brighton it’s really not that big of a deal. A lot of people do. And Brighton is a smaller community with a little bit more of a of a lower pace, slower pace, again 600,000 anywhere from 580 in the Trenton area up to about six 650 If you’re going towards the Brighton area. That’s a pretty steady, steady price. 

 

Erwin  

And all these areas are benefiting from the ridiculous prices in Toronto. You and I follow these numbers but the Toronto is shrinking in terms of the number of families that live in there. And I saw a chart yesterday from Dr. Mike Moffitt, you’re sharing a number of children under the age of five is like falling off a cliff in Toronto, right? Because the families moving out of Toronto and so places like Brighton, Trenton Belleville, they’re all benefiting.

 

Stephen  

 Ithink so i i can tell you for lifestyle for having two kids. I have two kids 10 and six. They go to a school here that’s called a tree school. That’s not like pre like tree TREE The school is on 10 acres of land. It’s like old Scott old school, old style of schooling. All the kids there’s only 35 kids in the school, all grades kind of are in the same areas. There’s five teachers to 35 kids, and they all get individual time and individual work. And two days out of the week they spend at least the entire day or more on out in the in the forest. So they’re in like nature, learning how to build shelters and fires and camps and learning about biology with trees. I think it’s it’s that kind of a setup. That lifestyle is what brought me here. I know that there are other people that are doing the same thing because there is a opportunity for people to kind of have their kids in an environment where they get to see nature again. It’s all lifestyle that way. So I definitely think it’s one of the highlights of why I moved here. And I’m quite happy with how that’s worked out for my kids.

 

Erwin  

Sounds like you can get a house in a good size lot for the less than the price of a one bedroom condo in the GTA.

 

Stephen  

Yeah, yeah, it’s kind of scary. But I mean, like you do have. The other challenge here is you do have some really, really nice houses that are selling for a million dollars or 1,000,001. But if you pick that house up and bring it to your market, it’s not a million 1,000,001. It’s much more, but but, I mean, that’s the market. Right? That’s, that’s what’s here. So it’s not like we’re all living in $600,000 houses. It’s not that way. But we do have opportunities at that price point and really nice houses, right.

 

Erwin  

So different than Hamilton, you know, the stuff I correct, you know, 100 $100,000 and just James MBM access house $2 million, not far from each other. It’s only 10 minutes apart from each other. If you have high end areas, we have middle class areas, we have low end areas that we don’t we don’t buy property.

 

Stephen  

Correct. That’s exactly the way it goes. Yeah. 

 

Erwin  

That sounds like Toronto.

 

Stephen  

Yeah, no, I think so. I think like the every city thinks their city’s special. But I think the more you get out of the city, you start to see a lot of the similarities of each city. And yeah, I think I think that’s the other advantage for people that are outside of this marketplace. Coming here, right? When I bought that Airbnb in Wellington, four years ago, we paid three 343 40 for the house, right? Literally, for the whole first three months that we were doing the renovations on that house, every almost every day, somebody would walk into our house, like no knocking, they would just walk in because this is a small community. We all know each other here. This is how we live, right? They walk into your house, they’re like, Are you the guy who bought that place? This place? Like yeah, like, wow, did you get ripped off? paid way too much money for this house. And I’m coming from Oshawa, wimpy and I’m like, man, like you have no idea. You have no idea what I would be paying for this house somewhere else. And today, the house is a million dollars. And so did they? Did they predict that? No, because they were here. And they kind of only knew the market that was here. They didn’t see the forest through the trees? Of course, right. And so I think the guys, oh, and the people that get out and start to spread your wings as an investor and get out into new markets and new communities, you’ll be able to spot the signs, you’ll be able to see things that are like you said the quote the other day, right? History doesn’t repeat, but it rhymes. Right? Like, that’s real start to see. That’s right, like you’ll start to see, you start to see all of those same similarities. And you can start to kind of guess where you want to be in which one do .

 

Erwin  

You should have told that neighbour in your house you want, you want to rip me off too. And I’ll make you rich, some of your…

 

Stephen  

Buddy, I tried. I tried so many times. The door, I was introducing myself as the guy who just got ripped off. Like I’m the guy who just got ripped off, do you want to sell and none of them wanted to sell? And none of them wanted to sell and it was hard on them. It could just be talk.

 

Erwin  

Yeah, Robo crash versus a crash. Like, you know, I’ll save you some of your home. And I want to know exactly what you’re not willing to put your money where your mouth is?

 

Stephen  

No, I, you know, at the time, when I first got here, maybe four or five, six years ago, there was very, very, very, very little inventory in the county. A lot of the inventory was in Belleville and now it’s kind of shifted like there’s a lot more inventory in the county than I think then for a very long time. It’s expensive, but there’s a lot of inventory. Belleville is kind of dropped, right? So it’s interesting. It’s interesting how it’s worked.

 

Erwin  

So Stephen, how are you doing? How are you doing? Are you showing property in Belleville for people that are just Okay, so we have people that want to learn more. And then I have people that are wanting to jump in with both feet? What do we do with people who just want to learn more information on Belleville.

 

Stephen  

So when they want to learn more, they set up a one on one call with me they contact our team. They talked to Fiona or somebody on our team and set up a one on one one on one call. And basically, I’m just here to answer and give you real life stories and go through listings and show you and teach you what’s happening and figure out within your strategy, what you’ve already had success in and then try to apply it here. If you’ve had that success, right? Like I don’t want you to try to learn new tricks. I just want to bring you into something that you you’re comfortable with and find the opportunity here.

 

Erwin  

Because we literally it’s in Hamilton doing exactly that there. They exit their property in Hamilton, they’re looking to redeploy that capital in Belleville.

 

Stephen  

That’s right. That’s right. And they’re getting more bang for their buck off of that capital that they’ve earned and they’re able to get to a new opportunity. So yeah, definitely that’s that’s what we’re doing with that. When it comes to people that are ready to pull the trigger, or ready to get into something with two feet like He said, What I tried to do is you have a long drive right for me to you is about two and a half hours. Most of the time, if you’re past Oakville, Burlington way, like you’re three hours plus on a good day with no traffic. So what I do, never. So what I do is, I use a lot of video apps, FaceTime and things like that to start the process. I don’t, we don’t, I don’t ever encourage somebody to buy a property from the video, what I encourage somebody to do is to save time and know if it’s something for you or not for you. If it’s not for you, it’s totally okay, then we start to narrow down your selection and kind of narrow down what is exactly what you’re looking for. I can send those videos and save you a drive out to be disappointed, right, I eliminate the disappointment drive. So we go out and we scale. Me personally, I’m looking at five to 10 properties a week. And my mind I like that’s what I’m trying to accomplish, as long as the market is, you know, yielding that many opportunities, but we’re out to look as much as I can. And then I’m scouting and if if, if it isn’t a good lead or a good opportunity, I don’t bring it to people’s attention. So I’m trying to narrow down their their purview and so that they just see good things good opportunities. When they’re ready, we set up an appointment, everybody’s holding offers, still, for the most part here, very few are, you know, running the gamut and trying to list that value. Some are but even then they’re sitting a little longer, set up an appointment, come out, walk the property, walk the property, and then you get almost like a mini streetsmart tour because you get me showing you around Bellville one on one for the day and the hour or however long you want to wait out here for and then you get a full surrounding, and you get to understand everything. So now if you don’t buy that house totally good. Because you’ve now learned a lot more about the area by being here. So now when I send you back if I now if I tell you the house is on an street, you kind of know that neighbourhood you know what that is, you know what’s around there. And so it makes a comfort level go up, it builds you as an investor and get you ready to make more transactions and take action.

 

Erwin  

Fantastic. And then how can folks get a hold of you?

 

Stephen  

So you can reach out through the team, you can find me on Instagram, I went on the east side, I went on the east side. And you can you can come and see me at an event. I think that’s the best place if you’re gonna come to anything, come meet me at an event that we do with the island team. I’m out and I make the drive to you. And then I I’m there, I have to get a hotel when I come out there. So I got nowhere to go. But to talk to you guys. So come loaded, see me there and take advantage and kind of pick my brain and make that happen.

 

Erwin  

Fantastic. And I’ll have all Stephen’s contact information in the show notes, folks. All right, Steven, any final words? How happier to be back in real estate? Other than that, no, give me give me your own. Give me your own final words.

 

Stephen  

I’m so happy to be back in real estate. No, I am happy to be back in real estate. I think it’s a great opportunity for people who think that they’ve missed their opportunity. Like I don’t know, I’m one of those people like I’ve told you personally, I had trouble kind of getting over this hurdle. Like I might have made mistakes. Or I’ve even used the word imposter syndrome. Like I’m trying to figure out myself in real estate. But I think that I know that I’ve done a lot of things in this game in this industry. I’m really glad that I can get back in and started learning and continuing to grow within this industry. I purposely sought out the best. Like if I’m gonna get back in the game, I want to be on a good team, I want to be around good people. I never have given away that strategy. I never stopped doing that strategy. So being around you and the rest of the team has just elevated me and hopefully just continues to make me better. So I’m trying to. I’m just trying to embrace that. And I encourage other other people to kind of embrace that. Let yourself go through your own journey and take it on and keep pursuing it. Right. It’s not over till you’re done. You’re not dead till you’re done. And if you’re not done, it ain’t over. So keep going.

 

Erwin  

And hang out with good people.

 

Stephen  

Hang out with good people. Yeah, they make you better. That’s for sure. 

 

Erwin  

At some point, hopefully people can buy a property without seeing them because I’ve bought property without seeing them. I’m not saying everyone can do it. I’ve done it because I don’t have all the time in the world.

 

Stephen  

I’ve done it but I think you have to build trust right? On the first day. No, but I think if you can build trust with people then Yeah, absolutely. You can do that. But I think it’s just about dancing a little bit. Get to know each other. Let’s talk. Let’s talk first.

 

Erwin  

All right. Thanks for doing this Stephen

 

Stephen  

Thank you for having me, man. I really appreciate you. Thank you so much. 

 

Erwin  

Awesome.

 

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 forget the cash flow reduces your risk. The more you have, the more lamps you can absorb. And if you have none, or limited cash flow, you’re going to be paying out 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 and register 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 what 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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