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(00:00) surviving and thriving something a lot of people who went through 2022 to 2024 could appreciate we’re here to talk about Corey’s 20year Journey from Rock Bottom to real estate success welcome to the truth real estate investing show for Canadians since 2016 that’s how long the show’s been going and we have special guests on this show to extract from them their stories of both success and loss so we may learn their lessons tricks and tips for our own investment toolbox my name is Orono landlord to 40 property since 2005 I’m a
(00:32) Fed Up Ontario landlord who since pivoted to landlord friendly USA currently looking for his second income property in Texas because it’s landlord friendly there I just returned from a three-week trip to Hong Kong and China to visit friends and family with my family with my own family my wife Cherry my kids uh we did the touristy thing in both hyper modern cities uh including Hong Kong guango and Beijing all considered tier one cities that’s um four of the five tier one cities in China uh and then we also visited a tier
(01:03) four City in chingu uh a small small by China standards at 1.7 million population that’s about double the size of our nation’s capital Ottawa unfortunately they’re going through economic hardship um Cherry happens to have family there that’s why we were there visiting U with her grandparents specifically went to their home and the rice Farm they own uh and that’s where they raised uh Cherry’s aunts and uncles who used to work on the f farm and that’s where they learn their tieless work ethic and likely pass that
(01:35) down on to Cherry uh real estate prices there are down around 24% on average since 2019 so they this Market never had the co bump like like most markets did in the world did uh including ours locally and in Canada uh their economy isn’t strong nor diverse enough per chat gbt uh versus I’m always I’ve always been looking I studied economics and business in school so I’ve always looking for growing and diverse economies for choosing where I like to invest like Texas and if anyone followed us politics for example Elon musk’s businesses are
(02:10) in Texas so there are other business friendly states where my clients are investing for better affordability but anyways it’s generally were focused on business and landlord friendly uh for the first time uh back to China for the first time I personally witnessed brand new empty empty highrise like 30 story plus residential and Commercial condom many uh buildings in China uh that I only read about in the news and seen on YouTube uh it something else to see in person like building after building uh for example how I knew their vacant was
(02:42) it was dark and like six o’clockish and like what office building in any busy urban area where you see this where the building is almost entirely dark uh I actually took a picture of one building commercial building office building only one floor out of like 30 had lights on it’s 6 p.m. at night uh a site I don’t you don’t expect to see and then the condos the same thing you might see one or two units in a 30-story building with lights on and it’s dark out uh and also you can see the building the building has more
(03:16) units for sale they have for salees massive for sale signs um yeah sadly that’s what happens when speculative Investments uh go on resulting in developers going bankrupt two of the top four uh developers in China are going through massive issues uh everr which is one that’s in the news they’ve recently been declared to be uh liquidated now they’re being order order to be liquidated have their assets liquidated so they’re no longer going to be around and the number four developer is going through bankruptcy protection uh type
(03:47) hearings right now so uh so unfortunately a lot of bad investment decisions were made developers going under there’s more developers going under the smaller ones as well and then also the down to the street level the everyday invest mom and pop investors they’re losing their Investments uh Slash down payments uh in in China uh again it’s it’s area specific uh but for most of these folks they for an income property they have to put down 30 to 50% down so that money’s wiped out because of these losses and worse uh
(04:20) there’s a ton of vacancy uh again there’s no lights on so there’s no no one’s renting these lot of these units uh I think I read there’s somewhere around one or two years of supply Supply uh of units for sale residential units condos for sale to give you an example of how inexpensive this tier 4 city is uh again based on chat gbt to buy a two-bedroom apartment it’s about 90 to $110,000 right so again 90 to $110,000 for two-bedroom apartment again there’s no demand for this for this area so it’s hardly a good investment idea
(05:00) but holy cow that’s got to be well below the cost of building so just a remember just a friendly reminder uh I’ve always preached on the show uh same with my guest we preach to invest for cash flow positive cash flow and economic fundamentals don’t speculate speculation is what costs so many investors locally in new construction and sadly they’re losing their shirts even if they’re tenanted they’re us losing several hundred dollars or a thousand thousand plus dollars per month these are the same lessons I teach my kids about
(05:31) investing don’t speculate invest based on economic fundamentals and where it’s landlord friendly uh learning investing isn’t the easiest thing to do there’s a reason uh why second generation in my observation in my experience I’ve interviewed many many I’ve interviewed over 300 investors on this show and there’s a trend where the second generation Real Estate Investors or more uh you know one of my friends is an eighth generation investor so so as you can imagine very very successful V enormous complicated portfolio
(06:02) complicated but for a simple-minded person like myself uh I’m a first generation investor myself uh anyways what’s the benefit of being a second generation investor they get a lot of early hands-on experience coaching a mentorship from typically their parents typically their father so if you’re a first generation investor like me and feeling loss it’s okay it’s not your fault it’s not everyone had the opportunity to save up money to invest um anyways we have a we have many educational events coming up for very
(06:36) affordable prices Saturday January 18th we’re hosting a virtual tour of investment properties my clients and I own in landlord from the USA we’ll share very real numbers video walkthroughs before and after pictures as we do a lot of off-market uh typically a bit rougher properties as they need Renovations we buy from the market and and we do buy renovate refinance repeat rent out burs we do burs and then on Saturday January 25th we’re hosting a uh both we’re hosting both an in-person and Zub webinar so it’s a hybrid event again in person in
(07:09) my office in Oakville uh we have usually have around 20 30 seats so it’s limited and we’ll broadcast this over our Zoom webinar on how to maximize the sale of your investment property even if it’s tenanted this is a specialty of ours as you know my team and I were veteran Ontario landlords my colleague Tim Hong who will be presenting along me he he also owns a property management company and he’s been an uh an investor focused realtor since 2010 like myself so we’re going to be sharing our secrets and best practices how to sell investment
(07:39) properties for top dollar we’re going to be focusing on Ontario here that’s that’s that that is where our experience is uh with interest rates falling uh we have another banking Canada announcement due January 9th uh we already had a 50 point cut back in December well depending on when you’re listening to this current month of December the market is improving we’re seeing a lot more transactions happening already in the T in the TR in the GTA uh the time couldn’t be better to rebalance one’s own real estate portfolio especially
(08:06) with all the challenges at the landord tenant board you know back in 2022 and 2023 we were saying survive till 2025 well here we are 2025 it’s time to now take advantage of this up Market uh these events are complimentary as in no charge it is my belief that education should be quality affordable and attainable hence it’s free and available both via person and Via Zoom webinar cherry and I successfully sold four of our own income properties in 2024 it took us an average of 22 days so just over three weeks to sell those four
(08:40) properties on average each one took just over three weeks to sell on average and we sold them for top dollar and we love to help our clients in all their real estate needs including selling listing their income properties even if it’s tenanted on to this we show today’s guest we have Corey frock Corey is a 20-year investor who’s been through rough times uh he was was investing quite significantly uh back in the before the financial crisis and he’s from Toronto but he was investing in he was commuting and unfortunately
(09:11) investing on the wrong side of the tracks in London Ontario sleeping inside even sleeping inside the renovation projects and in his properties that were undergoing renovation as he didn’t have the funds for trades let alone a hotel and to cut down on his commute from Toronto he was hustling that hard fast forward today uh Cory’s been a full-time investor for now two and a half years specializing in Bur Investments uh sweding sweding basements garden suedes and he’s currently working on on an office to residential conversion that’s
(09:39) gone anything but smoothly again Cory’s been successful anybody’s going to be sharing his challenges uh how he funds his project with uh silent passive joint venture Partners these are Equity deals so not private lending and uh and when there’s no cash flow or negative cash flow or cash calls I’ll let Cory explain what he does Cory’s a good guy if you can’t already uh Corey’s story is quite a journey uh of survival in terrible and good times and difficult times uh anyone new to or old to real estate investing
(10:09) to real estate investing will have lessons to learn from this from Corey’s story if you’re one of the good guys in real estate you’ll appreciate what a good guy like Cory can uh that a good guy like Corey can thrive in an industry Swimming with Sharks uh Cory’s website is cory.
(10:26) com Cory spell with a c c r YF rrc.com and you can find Corey at Corey frock Investments on Instagram and Cory frock on Facebook please enjoy the [Music] show hi Cory what’s keeping you busy these days hey um actually quite a bit I’ve got uh a bunch of projects on the go right now and as well I just like literally in the last two weeks got my realtor’s license so pretty excited about that thanks for contributing to the pool yeah hopefully you’ll be one of the real that actually does a deal yeah I was going to say one of the 85,000 or something hopefully I’m in that top 10%
(11:05) that actually do deals yeah in case in case anyone doesn’t know I think the number is close to half of Toronto real estate board members do zero to one deal it’s crazy yeah yeah I I’ve also heard from other realtors that that’s one of the biggest challenges they run into is when realtors that do one deal or a year whatever get into a a negotiation they don’t know what they’re doing right it just causes issues yeah like buying a country property without conditions on expecting the well and the sstn and the uh the quality of the water and the
(11:36) septic tank yeah it’s tough to compete with that offer exactly right and then what I explain to my clients is like like I know we lost on the offer but I consider them the loser yeah they they go in with the eyes wide shut right yeah and then they they eat all the risk and they overpaid which is a loss it’s a huge loss you see it too often see it too often and yeah you’ve been around long time so yeah so for the listeners benefit tell us a bit about yourself yeah absolutely I’ve been U I’ve been investing for almost 20 years now makes
(12:08) me pretty old guy in the industry uh started investing 2005 era and was buying pretty much TurnKey duplexes triplexes in the London area did that for a few years I actually got pretty hurt by the financial crisis back in 2008 2009 yeah it’s actually I I don’t know if you want to call it embarrassing but like a lot of other people say like yeah that didn’t hurt him it hurt me bad why why what tell what explain what happened I was in Hamilton and we did phenomenal yeah I wish I would have known you back then I I I know the
(12:41) Rockstar group and yourself in Hamilton did really well through that era or was able to ride it out I bought in London I bought very early without really knowing or understanding the concept so I was buying really rough areas if you know London call it east of Adelaide or EA I went to Western so EA was you don’t cross those tracks no unless you want to unless you want to buy some drugs or something like that you stay on the other side of those tracks and I mean but on paper the deals worked extremely well right you buy a Triplex at the time
(13:15) for like 100 150,000 you get rents for it like on paper it looked amazing in reality it wasn’t and so I ended up scaling quite fast I think I bought 10 or 12 properties in the first couple years that I was in investing and then literally spent like 8 years trying to recover like stabilize I had to sell some properties um get good tenants move away from the ones in the worse areas and focus on the ones in the better areas and yeah so I I kind of built my way through that I still own a couple in London um but I changed my focus to the
(13:49) Niagara region and started investing in there about 2016 I think it was and then I’ve just built my portfolio around that region and really what I’ve been doing my I’ll call it my wheelhouse is buying Bungalows and making up and down duplexes out of them so I’ve been converting projects or converting homes into multifamilies and buring them so you convert it and then about you know within the next year you refinance it and you go again been doing that with joint ventures I’ve got my own personal portfolio and then I think over the last
(14:24) like three years I’ve also been adding Garden suites so I really look for up and down duplexes or or Bungalows with a detached garage is kind of the perfect scenario that I can put a one-bedroom into and I either convert that into a long-term one-bedroom Suite or I’ve done a few airbnbs as well and that I hold in those Suites so got into some larger projects as well uh I’ve got a a seven Plex going on downtown St Catherine’s and a 14px in downtown Welland but I won’t call that my wheelhouse I’m I’m really you know I’m in it I’m learning
(15:00) but I’m not an expert you know I’m I’m still learning the process and I’ve ran into a lot of challenges um and a lot of learning experiences through that so I’ll say like my wheelhouse my expertise is in that Bungalow to Triplex or or three unit building that’s sort of where I focus fabulous yeah now before we’re recording I was talking about how um there’s like an everyday investor and then yourself you’re not an everyday investor but that fair enough I think so I think it is fair I I’ve done you know a lot of work and research and
(15:35) understanding the market and what works best for me and and my partners and that you know I I buy a bungalow at a you know a lower price I actually want it dated somewhat dated I love like uh firsttime homeowners that have lived there for 50 years and you know get a not renovated yeah pink shag carpet and all that kind of stuff but toilet bathtub I absolutely have several of those are several of those but structurally the building’s solid right and then with those ones you can kind of gut it um make two beautiful units out
(16:07) of it so it does take an expertise like you do have to know what you’re looking for in the area and then you have to have a construction team Contracting team that can convert those legally all of my units are legal and then same with the the garden Suite too that you know it’s a it’s a whole new thing there’s different bylaws and setbacks and all that kind of stuff for for Garden suites and you you convert the building stabilize the building and then take it back to the uh lenders um one of the biggest challenges we’ve had over the
(16:37) last few years is lenders aren’t used to seeing uh Garden suites so they’re they’re it’s they’re tough to refinance but you got to find the right appraiser and uh you know we you work with appraisers that look at the income approach versus just the comparable approach and and you can find them and refinance them and then it’s a long-term game um you know you refinance you get out some of your money it’s not a perfect Burr today might have been during the depths of covid you could get lucky at a at a perfect bur but as far
(17:07) as a rate of return goes it’s very solid and again I’ll say that this isn’t a short-term game there’s there’s going to be periods where you know interest rates go up markets go down which is literally what just happened to us and then you ride it out and you know probably five or 10 years from now everyone’s going to forget about what just happened and get into the same situation again and as long as you’re in it for the long term and you’re doing uh uh sustainable growth I think it’s a good way to go you said the most there there’s a
(17:36) things I want to touch on uh where to start oh uh how many hours are you working on your real estate a week so over the last number of years so I I was in corporate I was in corporate sales and did that you know anywhere from I’ll say like I had a full-time job so I was 40 to 60 hours a week for for the whole time and I was buying you know one property at a time um one property a year or maybe two at some years or whatever like that but I was probably putting in 10 to 20 hours a week into my real estate business
(18:08) primarily on weekends and and and evenings um two and a half almost three years ago now I went full-time in real estate so at the time that I went into it I was just doing developments and I had some Partnerships and and things like that on the go so I was focusing on that um and I was probably up to like 40 60 80 hours a week working on my real estate business but it’s also that’s my career like this is what I’m doing this isn’t now it’s not a side hustle anymore it’s a passion of mine and I was working on that and then that’s you know I’ve I’ve
(18:41) also got my real estate license over the past six months uh so studying to get through that course and now finally got through it and I want to focus on uh a little bit of the real estate I’m not moving away from Investments or developments at all I think this is a a nice vertical integration and add to my business portfolio it’s kind of like my strategic alignment stays stays true and uh I can keep doing this so yeah it’s a full-time gig now and I I’ll say at some point over the next 10 years I’m probably going to back off a little bit
(19:13) but right now I’m I’m full on into it and I enjoy it right so I’m I’m all day every day uh you live in vaugh is it I live in vaugh yeah and invested in a grth yes yeah that’s how long’s that drive it’s about an hour hour hour 15 hour and 45 depending on the traffic right or if you want to spend $30 on the 407 that’s that’s $30 well $30 you cut across yeah I I kind of I have my tricks of the trade to to keep that bill down but okay um yeah and the goal is to move closer to Niagara um right now we have family in town that
(19:50) you know live at home kids that live at home that are working in in vaugh or GTA so we’re not planning on moving while they’re at home we don’t want to have like out on their own um well they can go out on their own but we don’t want to throw them out on their own so at some point when they move out we’re probably going to look at moving down closer to the nagar area I don’t know if we’ll go right to nagara we might go like this you know Oakville Burlington area too right so I say thank you for sharing about uh like your hours were like 40 60
(20:18) when you’re had a day job and then you’re doing another 20 hours at your real estate portfolio and and um I it’s always stuck with me uh Brian sorry a Warren Buffett um very very obscure quote and my 17 listeners are probably sick of me repeating it is uh he actually took a question from Tim FIS the bestselling author for our work we that guy and about uh about investing and then Warren Buffett his guideline his response was around um if you’re not willing to invest 15 hours a week like studying stocks like doing research
(20:52) whatnot you are a thus and amateur so go back to work go back to life go back to the day job invest in the index right so you were investing 20 hours a week you’re not an amateur yeah and it was I I I mean it was a learning experience as I was going right like I I agree with that like like this the 4-Hour Work week or whatever it is that that um that I don’t I don’t buy it maybe for some people but not for me like oh no is a it a is a copyrighting cck bait head I I you know I look at people um investing and especially in my area
(21:29) like there’s people that come into my area that don’t do the research that don’t know the market that aren’t experts on it bought into the 4our work week into the 4our work week and and I I joke and I don’t say this to their face and I’m not cocky about it but like I’m gonna eat your lunch like you if you come into my market and you’re trying to compete with me on on four hours a week or whatever it is yeah you’re not going to do as well like like you got to know the market the contractors Property Management the legal the financing you
(21:58) need to be an expert yeah I think I think the the beginner needs to understand like you know when I walk into a property ifin 15 minutes I know if I’m writing the offer or not for a beginner it’s a whole pile more work than that yeah or not more work just they just they’re getting up the getting up the learning curve yeah there’s that old analogy about like a electrician that turns a screw and they’re like why would I pay you this when you took two seconds to turn a screw and he’s like well cuz I got 25 years experience of
(22:25) learning how to turn that screw like that’s the same with with real estate invest I’m the same way like you can you can in my area of expertise you could like name a property and I could like Google it or look it up and find out the area of it and see the type of home it is and within a really short period of time I’ll be able to tell you what it’ll cost to renovate it what it’ll cost to buy what you’ll get on the refi and what you’ll get in rent like like very quickly yeah and the outside they just see us world you’re at the property 15
(22:53) minutes and you already know everything like well no like there was a lot of what into picking the property first of all that be worth my time to go see yeah or my client’s time to go see like it’s not in the flood plane the buing is what I want yeah right exactly we already own multiple properties in the area so we already know exactly what it’s going to be yeah we know what the rents are going to be you know your profile your tenants all that kind of stuff yeah but then the outsider says you just wrote the offer in 15
(23:18) minutes this is easy didn’t do anything can do this yeah exactly yeah yeah they don’t understand like there’s you know that 10,000 Plus hours of Mastery that went into that went in behind the scenes before even offered which I think was one of the problems we saw in the industry over the last five years where you know the market the appreciation in the market was double digits so people were without expertise thinking they could just buy in an area and like flip it in a year because the market went up 20% and they were making money and they
(23:50) thought well I’m a real estate investor and really they were just gamblers right and I think you see a lot of that so I’m not saying she’s a g Gambler since Kathy’s public post publicly posting everything she’s going through a tough situation she is going through a tough situation and Cathy’s not a gambler like like she got into a bad deal or whatever there’s no question about it but you know Kathy’s very intelligent person knows how to run their numbers and all that kind of stuff but it is tough to watch that she went through and she
(24:20) partnered with somebody or she got into a partnership situation like this it’s it’s tough to see so she was in the a a very large US publication uh I forget the name of it right now anyways but but her but her lawsuit against her joint venture partner so he’s named publicly yeah I’m not going to name names because you know I believe in guilty proven innocent but Kathy I don’t want me to focus on Kathy but more but you’re you’re part of different uh real estate networking groups you you’re a coach yes like see some crazy stuff
(24:54) happen a lot of people lose money yeah um yeah it it it was tough to see no this deal I mean I think you know in the peak of the market the Airbnb business Cottage business was going crazy so I’m sure the pro forma that she saw and looked at looked very very profitable and then the market went down and so I you know again I wasn’t part of the deal obviously um it just seems like it was a really bad situation to get into and and uh I mean she’s dealing with it she’s taking it head on like you knew she would like she she’s taking on you see
(25:33) these posts about her fixing up the the place getting it ready to go from a long-term standpoint I think she’ll make it she’ll make it work if that’s what she wants to do um but it is you know she got in a a really tough situation and again I don’t know her financing situation did she put it in a variable I don’t know any of that just leads to many things for example she’s been posting posted pictures for example like her pool was green this is an Airbnb yeah that’s completely unacceptable well and and I don’t know like yeah she obviously has a
(26:04) maintenance team so I don’t know if they were negligent on that but yeah the pool because it’s I don’t think it’s Waterfront like I think it’s it’s close to a lake but I don’t think it’s on a lake so pool is everything in that situation I believe don’t don’t quote me on that or fact check me on that absolute mess uh and then it’s funny that we were talking about Kathy because I was just thinking like history doesn’t repeat itself but it rhymes like her performer looked great it’s like how you were just saying your London
(26:30) performers looked great as well back in 05 yeah yeah and that’s I mean I don’t the market wasn’t going up 20% a year or 10% a year in ‘ 05 but the market was solid and the Prof forer looked great and and I did my own profor so I didn’t I didn’t joint venture with anybody but um yeah you got to you got to have a sustainable business in and out of the real estate Cycles always Cycles right I remember in 2010 and like I literally thought the sky was falling like I didn’t you know there was unemployment rate was huge I had I literally had yeah
(27:06) it was I had a your experience is so different than mine it’s I know I’ve heard this and and other people are like yeah I didn’t even notice really the the financial crisis I was we were making more money I almost went bankrupt yeah I came very close like like I I was struggling like I I had a full-time job I was I would work Monday to Friday Friday night I was packing up my car with every tool lawnmower painting equipment I can fit because I couldn’t afford to pay anybody to to maintain my properties I would
(27:39) stay in vacant units on an air mattress Paint clean cut lawns anything I can do to save a buck to keep from going under four hour work week yeah four hour work week yeah exactly four hour sleep week that’s what it was and that was before like you know you could like it I was in these you know sleeping in a vacant house you know with east of Adelaide East of Adelaide oh my with with I think the the Blackberry was the latest in technology like it’s not like you had stuff to it was it was a it was a tough time a hell of a learning experience
(28:13) like to to learn to never put myself in that position again was big so I was looking behind you because a book I used to recommend all the time I’ve been talked about in a while was Julie broad’s book uh more than cash flow where she talked about a story how she bought uh herno has been bought an apartment building in nagar Falls because the the C the C the performer looked wonderful but then it was you know it the property was full of like drug dealers and folks like that and uh her property manager actually got
(28:42) charged with manslaughter because he got into a fist fight with one the tenants oh no and and the Tenant fell uh and hit his head and it was manslaughter so wow yeah so it’s like is the investment worth it yeah and that you know my portfolio now is in really nice areas and you could you could say that somebody could buy a property in a slightly rougher or rougher neighborhood and again on paper they’re going to outperform my rate of return because they can buy it at 50,000 or 100,000 less and and you know the rents don’t
(29:18) equivalate to it what they can make but from a long term like my my properties and I have vacancies and stuff like that like I’m not saying it’s perfect but like the 10 that I attract in my properties I’m very happy with like that is my focus right you learn you learn things from every cycle you know the first cycle was like Buy in the right areas you can’t fix location right so you have to buy in the right location in order to to have a sustainable plan you know this last one was maybe don’t Focus so much on on variable rates and like
(29:48) you know uh have a have a bit of a mixed portfolios when it comes to that so you learn things every time but you know this last cycle that went we went through through I had you know the the rates went up so much that properties the cash flow disappeared but I had what I considered very solid assets with very great tenants and great areas that I knew I could write it up right so the cash flow wasn’t there I had enough equity in the properties to ride it out and and you know now it’s looking better um I didn’t know when this would start
(30:20) you know we’ve had I think is it three or four rate decreases in a row announcements and the last one yesterday was 50 basis points so it’s feeling better but I didn’t know if this was going to happen this year or next year or possibly the year after you don’t know but you need to be able to ride that out and I think with a a solid portfolio of good performing properties you’re able to ride that out and then you know now that the rates are going down things are getting a lot better hey so you mentioned you were able to write
(30:47) it out partly because you had enough equity in the property so that was so you’re so the other way I the other way I’m also hearing that you’re not you weren’t overleveraged and you you there had been appreciation yes absolutely and and I mean I’ve the the second property I’ve ever bought in 2006 I still own and I still have the same mortgage on it so I’m like under 50% oh as you didn’t refi sorry didn’t yeah sorry the term never ended yes um yeah so there’s there’s Equity there and I I you know there’s equity in
(31:20) properties and that that was another you know it on an Roi perspective you know you get more than than you know 20% equity in a a property it makes sense to refi but it doesn’t as far as when you overlook your whole portfolio you need to have equity in properties to be able to ride these things out and uh you know there was some there was a couple uh conversions I did right in the peak of the market that were literal literal perfect burs so bought them spent some money on the conversion refinanced them got 100% of my money out it’s still cash
(31:55) flowed afterwards and I put it in a variable and those are the ones that I got hurt you know those that you know those went into negative cash flow and even even with the basement apartment and a garden Suite uh not with a not with a garden Suite so so back if you if you go back to like 2020 2019 I wasn’t doing Garden suites back then so they were just up and down duplexes um I’m actually looking at adding like a garden Suite now to the some of those properties but at the time and and they went into the cast negative because I
(32:25) was in a variable my my rate went up to high six right now it’s come down now they’re stabilized a little bit better but it was a learning experience again like like I should have you know especially with joint ventures I probably should have locked them into fiveyear fixed and made a little bit less cash flow than what I was making on a variable but then I could have rolled this uh situation out for and looked like a rockstar and looked like a rockstar yeah um on those though you know I and and you and I have talked
(32:51) about it off off uh before we got on the podcast here I got into Partnerships with joint ventures and and you know according to the contract we were both responsible 50/50 for the cash flow either positive or negative and as it went negative I ended up taking the hit on those so I would put in money to make sure that we could ride those out because I felt it was my responsibility as the as the active partner on a joint venture to make sure that my joint venture Partners don’t get this negative experience I still believe strongly in
(33:24) the asset so I was like you know I put in let’s say 10 or 20,000 into a property to hold it for two years while the interest rates turn around or whatever and that’s sort of what happened so so you’ve had no cash calls not to my joint venture Partners to me yes asking okay yeah no I didn’t I there was only like literally out of my whole portfolio I think four went into the like negatives and yeah I just uh I funded those myself to ride it out and uh I don’t even know if my joint venture Partners know I put money in like I just
(34:00) let them know they’re they’re solid assets they’re now cash flow positive you know with the with the rate decreases that we’ve had so and I I did a few things over the the last couple years to make them like I you know turnover of tenants I bought out any equipment I had you know refinance what I need to that kind of thing to make sure that they now perform MH it’s it’s interesting as because you and I are on the older side of of this gener of compared the the especially the new generation of investors and it just it was seemed like
(34:34) the norm for folks that learned real estate invested when we were investing in that if a joint venture partnership went bad that the expert partner would walk away yeah and not and would just give the keys back to back to the passive partner should that be the should the passive partner want it like well hey the deal failed you were supposed to be the expert what what you don’t deserve anything yeah right and people we both know like literally just here like it’s not worth it here’s the keys you take control I wave my Equity
(35:05) ownership yeah I wave my ownership versus Cathy’s they’re all up been like this this one gentleman has like several lawsuits for against him for like I’ve seen two for over a million yeah young yeah those probably doesn’t have the money it’s strange and I I think but he could have just walked away and this probably would have all gone away I believe so I believe sole like don’t go to court yeah you’re when when you enter in a joint venture and I don’t do joint ventures with everybody I’ve got a very select number of people I’ve
(35:40) done joint ventures with and one of the things I’m actually kind of proud of is the only joint venture partner that hasn’t done multiple joint ventures with me is the last one and they want to do another one like everyone wants to partner again you want to be able to trust the person you’re partnering with that they’re going to do the right thing like it’s such a big thing because the everyone’s Pals when it’s when the Market’s going great oh yeah yeah yeah and then when the market goes down you find out people’s true colors and I’ve
(36:08) run into it with a not a joint venture but a partnership that I’ve been into where you know you’re really good friends with somebody and then all of a sudden the market doesn’t go you the the deal doesn’t go as expected and you see their true colors and I’ve had a couple of deals with that where the market didn’t go where we wanted to or we expected it to and in one deal one of the partners who was in financial trouble just a standup guy and did all the right things and came to me and explained the situation and the other
(36:35) the guy did the opposite you know just just I don’t want to call it dishonest but just worried about himself only and um went the absolute opposite way so it’s tough you don’t know exactly so you want to partner with people that you really know and trust yeah not even just that but like have a history of doing the right thing yeah and hard to do with someone who’s new one of my so very good friend of mine and joint venture partner was was I think the second JV I ever did and I bought a house with her at 2006 and it sucked it it was painful we
(37:11) owned it for like three years I sold it at a loss there was a $40,000 loss which doesn’t sound huge now for me then it was like verge of bankruptcy so the the loss was 20,000 to her 20,000 to me and I ate the loss myself I gave her back back her money I said you know this isn’t what you signed up for here’s the money you invested I gave her back her full amount so I ate 20,000 which again to me at that time was huge since then I now own like four properties with her you know it it you know she we recovered I recovered got back into the market she
(37:45) she you know her financial situation was different she started investing again and now we’re like great friends and good partners if I would have gave her that $20,000 loss I guarantee she would never invested yet so so it’s it’s not only do the right thing but think about the long term of what’s going to happen yeah and for this new generation of young investors like they don’t yeah yeah they’re not they’re not seeing and that’s that’s exactly one of the things I’ve seen is people are like worried about 10 or 20 or $30,000 and they’re
(38:14) they’re call It Pennywise and dollar stupid because they’re they’re not looking at the future of what that’s going to look like now let’s go back to uh your your your fer area Investments Niagara so the entire Niagara region or can you be more specific yeah well it is the entire nager region right now I own primarily in St Catherine’s and I own some in Welland as well I you know apples to apples I prefer St Catherine’s I went to Welland Welland is a solid area I’ll I I won’t it’s not equivalent to St Catherine so you need to buy at a better
(38:47) deal the reason I went to Welland is they were one of the first municipalities that allowed you Garden suites so that’s why I kind of went down there they’re terly easier to work with and they’re very yeah you’re less than half the time of dealing with the city for permits and all that kind of stuff inspections all that they were really good to deal with and they still are good to deal with um but again Apples to Apples St Catherine’s and and specifically for me I’m not in student rentals so there’s great areas around
(39:13) Brock if you’re into that um but I go on the north side of St Catherine so north of the qw towards the lake and that’s those are really nice residential areas and I’ve had a lot of success there really interesting uh at the same golf tournament that we were up at uh I rent Eric clear of orange list yeah yeah yeah that’s who I’m working with well yeah he’s he converted a bunch of his even Jacobs in student rentals he converted them into duplexes yeah yeah I thought that was really interesting someone who has that much exposure like
(39:44) who knows the market well for students in St Catherine’s chooses not to rent to St Brock students yeah I just find that fascinating as well because so many people the remaining investors that are still around trying to get T Target student rentals because they an actual turnover yeah absolutely and I mean it it’s I know people that do it and do it very well it’s not my expertise right like I like it I’m I’m sure you can make it work there’s higher turnover higher uh maintenance issues and whatnot but I’m sure you budget for all that or I know
(40:15) you budget for all that but yeah it’s not my expert or it’s not my expertise but but a businessman is choosing not to prent to students which I think is fascinating well and and Eric clar owns orangel less Property Management I think it’s one of the biggest property management companies in the nagger region yeah he they do student rentals but yeah he’s as as an owner or as a businessman converting to long-term tenants and my thing on the show is like don’t look at what people are selling or promoting look what they do with their
(40:43) own money isn’t that the truth right yeah absolutely and then preferably they’re making money like you know like learn from people who are making money and what they’re doing with their money just just listen to what they’re promoting yeah yeah absolutely lend me money on this property and Tim in’s Ontario put your own money into it well and that’s one of the things with my portfolio for sure and I’m not by the way I’m not actively really looking for joint ventures I’ll partner if it’s the right thing to do but my
(41:11) portfolio is a mix and match they’re exactly what I do with other partners like they’re the same type of properties so I think today’s October 23rd um you know with what the information you have today what is the investment that you would you that you would do all day yeah you know what right now I I’ve been thinking about how to phrase this not necessarily for this podcast I want to call it a little bit of The Perfect Storm and I want to put a caution out there because I don’t want people jumping into the market FL investors
(41:40) don’t want to hear this yeah no kidding no kidding so right now in St Catherine’s yeah if like the Market’s somewhat corrected right so it’s down from a couple years ago and I think it’s made it affordable again to get into a bungalow I left can you get some context CU like the Market’s gone up significantly in St Catherine right do you know what it was what it is today is uh today I actually just read some stats so I think stats yeah it’s around 45 days on average yeah I think something like that don’t please don’t fact check
(42:13) me I just I read this I wasn’t expecting to regurgitate um you know it’s average of nine showings per property and year overy year that’s it nine over what period uh over those 45 days I think nothing yeah I went every five days that’s terrible remember remember that used to be like one evening I remember like literally you’d walk in and there’d be like a pile of business cards on the T on the kitchen table because you’d have so many showings and then year-over-year St Catherine’s is down 5% I think is the stat I saw but that’s
(42:46) that would be year-over-year as of today so previous year was even worse than that right fascinating yeah so yeah so it is it is softer yeah it’s it’s softer so I think it’s I left St Catherine’s um primarily because I couldn’t make it work anymore so St Catherine has done a few things so one the markets come down um two they’ve changed their zoning so they’re now allowing Garden suites and in fact St Catherine’s has a by right four units on an R1 now there’s setbacks and all that kind of stuff it won’t be easy but you could do a garden Suite now
(43:22) on the northern part of St Catherine’s um which is perfect St Catherine’s is also uh put up a grant a housing Grant an Adu Grant so you can get up to $40,000 for a basement unit or uh I’ll say as part of the main house it doesn’t have to be basement and up to $80,000 for detached Adu in St Catherine’s and that that’s capped at 880,000 total so you can’t do 40 in the main and 80 in a garage so it’s capped at 880,000 but with all of those things in play I really think that a conversion um from a bungalow to a Triplex or up and down
(44:00) duplex with a garden Suite is a is a great investment right now in St Catherine’s then what would what’s uh what’s what’s the what’s the Bungalow cost so anywhere from 525 to 650 I’ll say in the the depending on the size and the area but you can get a decent Bungalow in St Catherine’s for call it 600 and then what’s your renovation budget so depending if you go up and down um if the upstairs is relatively good because what we do is we cap off the stairwell to the basement put in a laundry closet there and then convert
(44:39) the basement completely and convert the garage you’re close to 200,000 you can you know depending if the basement’s already finished and you don’t have to completely redo it you obviously have to fire rate it and and make sure I don’t do anything that’s not legal so you have to make your windows and all that kind of stuff um but yeah you can get it under 200,000 who gets you your permits you do that yourself or or did you use someone else at the beginning uh I’ve been using Jordan station for years Jordan uh they’ve they’ve been great
(45:08) they work with the city of St Catherine’s very well and uh they get the permits and then I have I’ve I’ve worked with a number of different contractors over the year we have a great company right now that’s doing it for us uh tpr group and uh they do legal conversions and they do it at a very cost effective rate so it’s been it’s been really good and then over the last couple years I’ve refi a few of them which is a challenge right because there’s not many duplexes with a garden suite for sale so there’s no comparables
(45:38) but you got to work with an appraiser that’ll recognize like what i’ what I found is if you talk to them prior and explain what you’re doing and explain the process they’ll do a comparable on the Bungalow up and down duplex Bungalow and then they’ll do the income approach on the garden Suite so they’ll add that in so you can get like you know 100 $50,000 value by that garage based on the income so you’re you’re getting a refire around $ 850 to 875 for a nice bungle right 850 875 with the garden Suite with the garden Suite
(46:16) yeah fabulous and then how long does this all take so the work itself I’ll say takes four to six um and that’s I mean it’s it’s really three months two to three months worth of work and then by the time you’re waiting for inspections and all that again permits and all that you double it so I’ll say six months to stabilize and then yeah I I generally I’ll either go in a one-year term and then at the end of the term refinance or you go in an open term and then you refinance once you’re stabilized so it’s whatever you’re most
(46:46) comfortable with sorry I forgot to ask you how much money to to finish the garden Suite so the garden Suite specifically would be around 100 to 125 depend on the size of it and this is assuming you have a detached garage assuming you have a you know a 20 by 22t or 22x 22t garage um you have to run uh we used to be able to run the water and sewage into the house and now you have to run to the main so there’s a extra oh you run it right to to the main line now yeah to run it main line so that that adds a bit of cost to it but you got to
(47:20) just budget that in right and then I put a 100 o panel out there and do a heat pump so there’s no gas um everything’s R by electricity that’s a good tip yeah you have you have you have pictures and videos on your Instagram do you not yeah yeah absolutely I’ve done quite a few so just tell that when stop scrolling you got to go down quite a bit because I it’s been a while since I’ve uh uh done one um what’s that deal there I’m sure that’s one there y that is that is no the one below that right below that there’s there’s a a garden
(47:58) Suite that I just completed that’s the latest one I did um and that’s exactly it it was an up and down duplex and you could see in the back that’s my uh Garden Su yeah and that was a detached garage it was a detached garage yeah absolutely did you walk us through this deal like what what was what did you pay for the hose yep so bought this uh at $610,000 and uh I had to put in I think it was about I had to redo the bathroom upstairs so I’ll say I put in $115,000 upstairs I redid the floor readed the bathroom painted the unit made the
(48:30) basement a two-bedroom uh suite and then turn the garage into a one-bedroom Suite I would have Lov this is my favorite garage Garden Suite I’ve ever done it is uh it’s beautiful it’s a 20 by 24t garage so it’s a lot bigger beautiful uh garage suite and a great location the only challenge with this one is it’s not on any Transit so you got to make sure you have parking so I had to expand the driveway to give extra parking because there’s every every tenant there has a vehicle how many parking spots do you have to give I have you have to give one
(49:07) per unit uh but in Welland you’re allowed to park on the street however I expanded the driveway so each tenant has a parking spot on the driveway so the pictures there that we showed uh showed just a double wide driveway I’ve now expanded it to a three car three three cars wide driveway and then so uh all in what were you 610 for the for the for the yeah 610 about 200 for the Rena and then this one appraised at 872 or something like that so the the money left in the deal if I’m not mistaken is like 130 around that so they left that in the
(49:47) in the deal which was better than our expectations we you know I kind of went in there saying I’m going to leave in 150 to 175,000 in in this deal we were able to pull out a little bit more of that lock it in on a three-year term that worked at cash flows about 800 a month and it’s I’ll call it a AAA neighborhood again the only negative about it is it’s not on Transit other than that like the tenants are fantastic like it’s a AAA neighborhood it’s perfect neighborhood what are the RS uh 2095 up top 1795 in the basement that’s good
(50:28) yeah and I think I’m getting 18850 for the garden suite for one bedroom yeah it’s beautiful those faulted ceilings it’s huge Walkin shower oh we’re we might as well promote your Instagram all Investments y Cory frock Investments so it’s a c r Cory yeah c r y f o c no that’s okay I didn’t do very well at marketing I just went with my name so Cory frck investment very cool yeah uh did you know what your turn uh what did you get on your threeyear mortgage uh at the time I think I’ve got 5.
(51:09) 95 on a three-year yeah and this was a joint venture so I went in that out with partners and uh we decided we we didn’t know whether we should put it in a variable or a fixed and and they felt better doing it in a fixed and I’m not against that at 4.95 we cash flow decently so we just locked it in and then we’ll wait we got about another two years left on that amazing bring up the calculator just to get the total rent yeah yeah I’m dyslexic and I’m bad with math so 2095 2095 plus 17 typo 20 95 plus 1795 Y for the downstairs plus 1850 1850 plus
(51:52) 5,740 right y times 12 months 68 eight eight oh dav’s Asian intentional 6888 z$ 68,800 and so and your appraisal was 872 I think it came in at and that’s reasonable what you could sell for today yeah yeah I think so that’s pretty good like your rent yal is is seven about 7.
(52:23) 9% yeah and then how do utility split uh I pay gas and water and the tenants pay their own own hydro and of course the garden Suite is all Hydro they don’t there’s no gas out there oh nice yeah so it works this a pretty good deal so this is something you do all day yeah yeah that that’s your in in fact that’s on the more expensive side but you could see the house I mean for me I don’t know bigger bung probably 1100 square feet oh it’s a bigger Bungalow yeah it’s a nice Bungalow it’s year is this you got for 610 last it’s about 18 months ago maybe
(52:57) maybe oh okay yeah yeah it’s in it’s in the south side of well right it’s in Dee City so that’s that’s why but now if you look at that bungalow on the north side of St Catherine’s you’re probably you know today’s market you’re looking at 650 to 675 that’s not b no that’s that’s that’s why and and if you can get as you you’ll know this and I I’ll say it to anybody that that listens like the deal has to work without the grant right so so if you can buy that and convert it into a threx without the Grant and it works
(53:32) great that’s perfect then if you put the grant bonus on top of that now you’re buying that let’s say you buy a deal like that at 650 the numbers will run the same but your rents will be slightly higher and then you get an $80,000 Grant on top of it it works very well how’s the grant work does it be for to pay back or no it’s it’s a grant uh it’s it’s a non you don’t have to pay it back uh you can’t short-term rental it has to yeah uh you have to get approved so you get your permit first then you apply to the city and they’ll come and look at
(54:07) the property and they will give you a grant there there’s a map available on the City St Catherine’s uh website so it has to be within the grant area um but the north part of St Catherine’s is in the grant area so the nice nice parts of St Catherine’s are and uh yeah as long as it’s long-term rental they’re looking at adding housing they need housing and so that’s what they’re doing they’re incenting developers to create housing yeah that’s why I say you guys are all Saints there not many people like there out there like you will do this yeah
(54:38) it’s it’s I mean it’s a level of expertise I’ve seen people try this and if you don’t have the right contractors and Architects and uh people on your team to know what they’re doing you can get into I’ve seen you know I I’ll say that the conversion is around 200,000 and I’ve seen it go up over 300 for people you you really have to know what you’re doing and have the right teams in place how Cooperative is the is Welland and St cther for garden seds so Welland is extremely Cooperative um they’re really good uh St Catherine is
(55:09) as well I’ll say the inspection process with St Catherine is more difficult so still yeah yeah you can get different inspectors basement apartments I went through I had a it was it was covid period so it give him a little bit of a break but I had a couple of conversions take almost a full year in St Catherine where they were refusing to come out and inspect it because Co and I had wait wait weren’t these vacant they were they absolutely were like it was it was a I don’t don’t even get me go it was it was crazy they they wouldn’t inspect them we
(55:43) had to do my early Co or late Co midco IID they’re still afraid of a vacant property I I had one um I still what they’re doing I I I literally got my final inspection on one of my properties virtually I had to walk through and FaceTime the inspector and it took 4 hours and I had to do things like put a tape measure up on the handrail to show that it was x amount of inches off the ground it took forever I I like thought I was being punked I I was like is this a joke like they’re they’re really going through and all
(56:20) this like measuring the windows and showing the the manufacturing of the the door handles to make make sure they’re fire rated like it was it was an insane process that he wouldn’t come into a vacant house to do the inspection on his own yeah next now now you’ve done some you you’re doing some more much more advanced projects how how do you make the decision between doing this like um like Triplex conversion that’s yeah versus like you have a you mentioned you have a seven Plex yeah I have a seven Plex going on right now Downtown St cathine
(56:57) but you’re at you’re developing it though wait wait you’re turning it into seven units yes absolutely tell us about it yeah I bought it was again during covid uh towards the end of covid I bought an accountant’s office so as the market was going insane at that time as we talked about earlier you’d walk into a house for a showing and you’d see a pile of business cards on the on the kitchen table because there’s so many showings Market was going out of control at that time Bungalows were getting into the 700,000 so I bought a two and a half
(57:27) story Victorian home that was used as an accountant’s office and I got what I thought at the time was an incredible steel of a deal and it’s about 1,200 square ft per floor so it’s two and a half stories and so I had a vision at the time if I could change this into a three or four Plex it’s in the right right in the downtown core and uh so I ended up buying that property and I partnered with somebody on it and we bought it together and then as part of the building permit for the 3plex we had to provide a phase one
(58:03) environmental on it and the phase one environmental I don’t know if there’s a pass and fail but basically identified a potential of contamination and uh so we had to then go into a phase two which they drilled bore holes into the lot and it came back that there was contaminated soil was it from oil tank uh believe it or not there wasn’t an oil tank originally in the building but no it was from a coal furnace so there was a coal furnace it was a over Century old home and it had coal heating for like 50 years and they
(58:35) would dump all the ash into the backyard and then as that Ash degraded biodegraded um it seeped different chemicals into the soil and I had to so I had to go so there too much of it yeah there too much of it I it was a very specific area it was the dump site of the coash and so I had to go down one .
(58:59) 25 M that take off the top soil and then dig out down to 1.75 m it was seven large dump trucks and then I had to remove that soil put clean fill back in and then uh refinish the the lot but that process took me almost two years so that was a that was a huge learning experience and you and I we we talked about it about being the expert and I feel very strongly I’m an expert in like a tri Lex conversion Bungalow I I probably should have partnered with somebody that was an expert in doing what I was doing here it would have saved me a lot of pain I should have put
(59:35) a phase one in the conditions of the purchase um which I didn’t do and so it you know again I’ve been in the real estate game long enough that I have enough equity to hold me through two years of a empty building on a private mortgage sitting empty you know so so that was a very painful experience and I’m actually uh hoping to have my permits by the end of this week or first of next week that’s how long it’s taken so I’m I almost quit talking about it because it was embarrassing to you know hey how’s that sevenplex going still
(1:00:06) waiting for a permit but I got my record of sight condition so it’s clean and then I’ve got everything done um getting into a sevenplex again is a whole different area like I have you know conversion conversion it’s not existing you’re converting it and then when you when you do that because I’m converting it to the level I am it’s considered a new build so as far as code goes and all that HST HST co uh like I have to do barrier free units I have to put a fire alarm system in the building everything’s modern day code yeah it’s
(1:00:35) all all to code versus no grandfathering nothing nothing it’s all like new so so huge learning curve would I do it again yes with my eyes open I probably would have negotiated harder on the price and then known what I was getting into like I think it’s a great learning experience but you know learning these things as you go like expecting my permits to be approved and they’re like where’s your fire alarm system I’m like why what like I got I got smoke detectors and carbon monoxide detectors and they’re like no
(1:01:06) no this is a commercial building now you have to have a complete integrated fire alarm system so things like that took me a while to learn and that’s why you know we we talk about don’t be the smartest in the room or the smartest on the deal make sure you’re you’re working with the people that have the expertise to do it so I love it I it’s a property I ended up buying it with a partner my partner ended up up wanting out of the deal when we got into this or needed out of the deal and I was able to buy him out of
(1:01:32) the deal and then now it’s just mine and my wife’s and uh you know it’s going to be a great building but it’s it’s been a long process I could have done three or four Triplex conversions for the same amount of money and a lot less hassle so you got to kind of weigh the pros and cons now I’ve now I’ve been through it I I feel more confident going again but yeah it was a it was a painful experience yeah we you and I are talking offline about this deal like like I think what I would have done differently hindsight always 2020 but I would have
(1:02:03) brought my my my I would brought Joe Seymour it’s my inspector so I don’t know Joe but but you know learning about him through yourself yeah if I would have brought Joe I wouldn’t have bought the deal he’s probably the longest practicing home inspector in Ontario and he’s a structural engineer and he’s made it very clear to me I don’t care what you think I’m going to protect the client that’s what you need right that’s why you’re hired yeah I don’t know this stuff you need your job is protect my client not me I I got you that’s exactly it right
(1:02:35) that’s the that’s the home inspector’s job yeah that’s exactly the the the point of of having somebody like that I wish I would had somebody on on and then even if he didn’t find it I would have probably hired my friend Charles law as a development consultant yeah going back in time absolutely yeah rather than trying to do it myself because I was like I’ve done duplexes triplexes how could this like I’m just doubling it I’m just doing two you know homes are chky right yeah yeah they are yeah cuz the fuel sources were different back then
(1:03:04) exactly I can’t say I’ve seen a coold like like Bo buried oil tanks like but again like as soon as I see cry home like where could the oil tank have been well and that was um as part of the environmental that’s what they were mostly concerned about and it was unfortunate that they found the other part so it was a a breakdown of the chemicals I I think leeched arsenic into the soil and they’re worried about that getting into the water table right but just because you have so much of it yeah absolutely because I don’t think Coal’s
(1:03:31) bad for anything but you know like what’s that saying like it’s the dosage is the is the poison or whatever it is yeah exactly but they were also worried about the tank like I had to drill B holes through the foundation of the floor of the building where the oil tank was test the soil under there luckily it came back clean cuz if that would have came back dirty I like literally I probably would have closed it up and put it up for sale or something like or not change the use cuz that was the other thing I I got in it was I I triggered
(1:03:59) the environmental because I was changing the use of the building from commercial to residential right Al so going in you knew that there was a buried oil tank or no no no I didn’t I didn’t know no I went in you know I don’t want to call Eyes Wide Shut because I wasn’t that naive but but I didn’t expect I didn’t realize I had to do an environmental assessment on the building CU it was in a mixed use zone so I wasn’t changing the zoning but I was changing the use within the zoning yeah what T scare me yeah oh Absol saw cuz usually they they
(1:04:29) leave the uh the piping in the wall so then you know there was an oil tank at on some point yeah so I’m inspecting yeah 100% going in now well that was I kind of talked about a little bit is I’ve gotten my realtor’s license and learning and I’m not experienced in it by any way obviously I’ve had my license for two weeks I’m not going to say I’m an expert but you know a lot more about construction probably than what the average realtor especially the guys that focus on new construction but yeah true fair assessment yeah absolutely but but
(1:05:00) going in now knowing what should be in a in a a offer of like to put in your conditions like that those types of inspections should have been standard like like absolutely getting into a 125 year old building that had an oil tank should have been expected all right cor we’re running out of time let’s talk about this deal though like you said You’ still do it but what what’s the deal going to look like like when you’re done uh can you tell us what you paid for it yeah yeah absolutely I bought it for $720,000 it’s been underwritten I’ll
(1:05:33) say six months ago now I added a unit so it was underwritten as a sixplex at $1.8 million 1.82 so I originally and this is one of the things you know we talked about make sure the deal works with or without the grant I’ll say that about cmhc too because they changed the rules on me halfway through the game know but you’re building new what do you mean well I was going for the environmental so the the so I was going to get 100 points on the cmhc mli select which means I could get up to 95% loan to value on a 50-year
(1:06:07) amortization and then they Chang that to you could get maximum of 50 points on the energy on the energy uh efficiency portion of it so now I’m looking at uh you know maybe an 80 to 85% loan to value and a 40-year amortization the deal works works well with that but not as well so got to make sure the deal works with or without these kind of like incentives that the government’s throwing out there because you never know where they’re going to go the deal will work on a conventional mortgage as well I just have to leave in a lot more
(1:06:38) money so I’m I’m not doing a loan for the construction I’m paying for it for cash so and I’m the only one holding the property so if I can get you know 85% loan to value on a 40-year am at 1.8 or or 1.9 it’ll do very well for me I still have to leave in some money though now I think there was there was two other um areas you could have gotten points I think one was like accessibility the other was affordability that’s that’s correct so why did you choose not to go down that route well affordability was I and and
(1:07:14) again don’t fact check me on this but the the rent has to be under it’s like $960 I think that’s the number in St Catherine’s for how what for for for bachelor for room for well and one of the things that cmhc will probably correct as they go forward it’s for any unit so what yeah it’s a three bedroom in a three-bedroom it has to be under that so I was actually talking to the uh Chief Building officer at city of St Catherine and they haven’t had any really weird applications yet but they fully expect somebody to have like a you
(1:07:49) know a a whole building with like 200 square foot yeah because that’s the only way they’ll be able to get under that ability so they’re waiting to see that they haven’t seen it yet um we uh Adam knows we just had um we just had uh mark emot from Ottawa and he’s all his suets are 400 square feet yeah maybe he’s going for this maybe he’s going for this I should so and and cmhc audits you so you you have to have it at I think it’s 40% below Market rent that that’s how it considers affordability and it has to be
(1:08:23) that way for 10 years right so when I did the math calculations on going 40% below Market rent for 10 years it didn’t make any sense and then the accessibility didn’t get me enough points to get to 100 or get me up to that level I needed to be I am going to have an accessible unit I got a commercial unit in the building which will be full accessibility so you have a ramp down you have 5 foot turning radius in the bathroom in the main room the doors are all like man or not manually they’re power open and close so I do
(1:08:51) have but it didn’t it’s not enough I would had to make more and then it again the return turn just wasn’t there so that’s why I focused on the Energy Efficiency because that from a long-term standpoint is also great for the building right so now I have seven units all heat all heated and cooled by heat pumps so they’re paying for their own hydro and then all that I’m going to pay is the water that’s fantastic and even the water I no gas there’s no gas to the property there’s gonna be no gas for the property not even the water water heater
(1:09:20) no everything’s going to be electric so I did have to upgrade the uh line into the into the house which also cost me quite a bit of money so I had to put a it was a 200 amp bline going into the house and I had to upgrade that to a 400 which cost me $55,000 to get it to the property holy yeah yeah know that going in I didn’t know the level um I knew it’ be I I knew it was going to be 20 to 50 or I’ll say I thought it was going to be 20 to 4 40 and then it turned out to be 50 so there’s an underground like remote control boring
(1:10:02) unit that goes from the closest Transformer underground to my property and then it’s going to come out and then I have an electrical room in the basement yeah do you have it can we find on your Instagram that uh the accounting building uh yeah if you go up a little bit I think it was no sorry you got to go down I apologize guys it’s uh right there you see me with the orange coat right above the of a deal I’m in the I’m in the parking lot of the building there who are these folks with you uh that’s Rob Chopra he’s with for
(1:10:36) Capital and then that’s my wife Janette oh okay okay yeah so that’s a building there is that current or is that that’s current so I’m redoing the siding as part of the Energy Efficiency I’m uh I’m going to uh put I think it’s one in hard insulation around the outside and then I’m going to resite the whole thing all new windows heat pumps on the inside so you’re improving the the look absolutely and you’re not going outside the existing building envelope no you’re just turn now this property itself is on a 270 foot deep lot so I’m actually I’m
(1:11:11) I’m going to I’m going to finish the main property refinance it take a breath and I would love to look at developing the back but I’m going to do that after I’ve kind of finished the project I’ve got concept drawings um oh for what for a back uh 18 Plex in the back you can go up to 18 units I talk to the city in theory so they certainly haven’t given me the go-ahead um you could do 18 units because of the high density zoning of uh Downtown coron St Catherine’s did you know about the potential upside when yeah that the deal yeah that was a big
(1:11:44) part of me purchasing the the project in in fact at the time I purchased it my my thought process was to develop the back at the same time as the front but too much risk I I wanted to finish the front refinance it and then like see where it is and see what programs are available if I would have went developing the back at the same time even if I got a construction loan I would be so highly levered that I just didn’t think it was worth the risk um so I’m going to finish the front and then I’m going to look into programs and and potentially do the
(1:12:18) back afterwards we’re slightly over time you have time for a few more questions oh yes absolutely fantastic you actually looked a lot younger without your glasses but that’s not question just don’t call me a boomer because no one will listen to us listen to the folks with Tik toks on how to invest and make money uh I so I’m I you know after covid all this gray hair I’m much more bigger with balance these days you mentioned you worked a lot yes right how how’ that was that okay how’ you balance like was that okay with your relationships yeah well
(1:12:56) it was tough I’ll I’ll be honest I uh I uh got into the corporate world when I was very young and I was actually I’m from Edmonton and I was working in Northern Alberta and I got moved to the head office of the corporate company I was with in downtown Toronto in 2000 and uh at the time my goal was to get ahead corporately like that’s what I wanted to do and uh I was working you know at that time honestly early 2000s 60 to 80 hours a week minimum at the corporate job and it wasn’t until after my divorce that I kind of realized there’s got to
(1:13:31) be more to life and and you know especially with my divorce that happened and my son my my ex-wife moved back to Edmonton with my son and so by the time I was you know paying the child support payments and the travel payments and all that kind of stuff here I am at this great corporate job doing fantastic and barely breaking even and that’s what actually got me into real estate state was was a bit of an eye opener of if I want to get ahead in life I got to do something over and above working for a corporate job so that’s yeah that I I
(1:14:05) literally my goal at that time was just get ahead in corporate and you know run the company at one day and then kind of change my mind after that situation yeah it is crazy yeah it was it was tough while we make fun of young people on the show any any advice for young people uh like say that someone’s 25 wants to start investing yeah you know you you want to learn learn the processes and I think one of the biggest challenges that a lot of young people got into over the last five years is this isn’t a short-term game you know
(1:14:38) you’re you’re buying a property uh for a longterm goal and getting ahead you know you can you quit your job and work full-time in real estate and make a living out of it possibly you probably need more active business be a realtor mortgage broker you know property manager do something like that have a lot of cash do not over leverage yeah payments it’s there’s going to be Cycles in the market and and this is a long-term game it gets tough at times and then it gets good at times I I can almost guarantee it we’re going to be
(1:15:08) some point in the future I don’t know if it’s five years eight years 10 years 15 years and we’re going to be in this point at the market where it’s appreciating it like double digits again and everyone’s going to be jumping back into the market right right now people are jumping out of the market so just you know keep your head down work hard Buy foundationally good properties that’ll last you years and you’re going to get ahead you’re going to make a 20 to 30% rate of return on those properties that won’t get you to retire in a year but
(1:15:38) after 10 years you’ll be amazed at what it can do you likely beat the folks who invested in the index funds yeah yeah which historically is around 10 to 11% so you make 20 to 30% you you’re your pay average investor exactly the the the the truly yeah anyways uh what about what about some words for like the uh The 40-Year-Old investor well depending if they’re if they’re getting into the market or if they’ve been in the market but again say first time say first time I think like depending on what your goals are like a
(1:16:14) lot of because I like a lot of my joint venture partners are in that age 40 40 plus right and the way I explain to them what these Investments are is it’s an investment for their future this is this is not something you’re not going to turn around in 5 years and like have $250,000 profit but it’ll outperform your RSP or I don’t guarantee anything but you know on on paper and in the long term it’ll outperform most other Investments and this will really make in retirement much better it’s also generational wealth you want to pass it
(1:16:47) down to your kids that kind of thing that’s that’s you know some of the Partnerships I have I say it’s a five-year term but people have no intentions of selling it in years it’s really retirement play so I think that’s if you if you look at it from a again a sustainable long-term growth they’re great Investments but it’s not easy like like it’s not easy for you yeah you want to and that’s that’s what it’s a fulltime job yeah absolutely four-hour work week yeah exactly uh what do you why are your joy meters investing joint Metro Parts
(1:17:22) investing like uh like how much did they put up uh when do they get their money back like what what is it you fora look like yeah so I write it’s it’s a five-year contract with an option to renew um they put up the down payment and the renovation cost generally and then they can be completely hands off like so I have many joint venture partners that have never even seen the property but they’re on title so they’re they’re on ownership we have a joint venture contract behind that that gives me percentages of the profits once it’s
(1:17:55) sold so from my standpoint too a joint venture is a long-term game I’m not making money on the deal right away I’m making money when we sell the project so um the goal is they’ll put up the money for the down payment and the renovation after that’s complete we refinance whatever’s pulled out of that which is generally their at least their renovation dollars are given back to that joint venture partner and then they’re owed their down payment which stays in the deal and then you know it it depends but anywhere from 2 to 5
(1:18:27) years after that you refinance you can give them back their deposit that they put in there and then they’re literally in the Pro property for no money down and then they just ride it out and let the property appreciate as you’re paying down the mortgage and uh putting in some cash flow I also cash flow as you probably know like as you know is is a bit of a fallacy so I always I have a separate bank account for each property I don’t pay out cash flow on a monthly basis I’ll review it with the JV Partners at the end of every year if there’s some
(1:19:00) you know extra money in there we decide what we’re going to do with it put it down on the mortgage paying back their principal investment or split it as cash flow so we kind of discussed that on a yearo basis but I also know what their goals are prior to that so I know what they’re looking for um so and and I’m not looking to partner with somebody that’s like oh there’s 500 a month cash flow like send me my $250 check every month it’s not what it’s about so we’re you know we’re we’re looking at a long-term hold and keeping the money
(1:19:30) in the deal yeah and then do you do you perform any sort of return numbers IR return investment I I do I give them I but I also do it in in uh three uh I I give them three scenarios like a worst case scenario uh what I believe is going to happen scenario and then if the market appreciates higher than what we expect so I you know in in the in the presentation sort of thing that I do for a joint venture partner I also have a page of what if the worst happens and you know I I prior to this last real estate cycle I was like what if the
(1:20:07) interest rates go up 3% or something like that you know what if the market goes down 20% what do you do and I kind of give them scenarios and I want to make sure that you know no matter what happens in the marketplace you’re prepared for and uh I I wouldn’t want all all of the things to happen at once but you know Market did go down while interest rates went up and it was you know ride this property out the valuation isn’t what we hoped it would be right now but on from a long-term basis it will get back there
(1:20:36) so it works out well so I make sure I I uh take him through all the positives and potential negatives as well things like what if what if the roof leaks what if your tenants skip out on you in Ontario that kind of stuff so I make sure they’re aware but then they also don’t have to deal with it on a monthly basis either like that stuff A lot of times I’ll like reach out to them and let them know something that’s happened and they’re like you got it and I’m like of course I got it that’s what I do and uh they don’t have to worry about it right
(1:21:03) so that’s up to me to worry about any final words no well thank you thank you uh for having me on the show I’ve actually been listening to your podcast for a long time you’re one of the OG’s you’ve been going don’t listen to me Tik Talk account I got a got a flashy graphics and Lamborghinis and private jets roxes I you know what I I I appreciate what you do the industry needs more people like you like like people that do the fundamental fundamentals correct and uh make it for a long-term profitable industry if if uh it it’s really good
(1:21:41) what you’re doing and and showing what you’re doing by this podcast hopefully a lot of people hear it and see it not necessarily this one but a lot of the ones in the past where you’ve brought things to light so it’s great so I appreciate you having me on and thanks for what you do appreciate it and kind of like what we’re we were talking about before we’re recording was if all these if all these scammers didn’t exist you and I would have done a lot better yeah we they they got a lot of the uh the The Flash drew a lot of
(1:22:07) people um which is which is tough so it’s uh it’s too bad it’s kind of disappointing because like like I try to have an abundance mindset but like I literally have conversations with people saying I need to work the stuff out with these scammers before I can invest with you yeah I’m like that’s thank you you you’ve now seen the light and uh damn it if not for the scammers there there’d be a lot more out there yeah yeah and then the community would be so much happier because like before we were talking as well and
(1:22:40) recording like there were all these like 20 something year old wholesalers who are all now gone yeah and they probably lost their shirts some of them probably lost their shirts well I imagine they bought properties thinking that they could flip it right away and then they’re stuck with it and and then you’re you know to try and sell one of those properties at that point in time cuz they weren’t in the nicest areas a lot of them were in really rough areas and then you’re like trying to catch a falling knife like where do you sell it
(1:23:04) you’re you’re going to lose your shirt so yeah it was tough and all their social media gone quiet that’s old guys are trying to figure out social media are s and stuck at it all right Cory thanks for coming in and doing this thank you can people find you other than other than your Instagram yeah so so my website is just my name again I’m I’m not great at marketing but it’s uh Cory fr.
(1:23:55) com practical knowledge base that gets you closer to Financial Freedom if you found value today please do us a favor and leave us a review or a rating share this episode with a friend or better yet join our community of Real Estate Investors who are taking action and making moves and hey if there’s a topic you want us to cover or have uh there’s a certain guest you’d like us to have on the show drop me a line my DMs are open on social media reply to this email that this have arrived on I’m not hard to find uh you know we’re all about getting you the unfiltered truth to help
(1:24:22) you on your journey thanks again for tuning in and we’ll see you in the next episode until then stay Smart Stay curious and keep building that future catch you later

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