Terrie Schauer: that's a, like a real, that's the million dollar question because like, it's, you know, it's so sensitive and like, I actually just, this, this morning fired like one of my managers in one particular city, um, You know, I think if I look back, like for me, it was really like, I manage my properties.
I manage other people's properties, the way I manage, my own properties. So that means with the level of attention and with the, um, ethics that I would apply when doing my own stuff. I don't wanna spend money, um, that I wouldn't spend on my own properties and I don't wanna let stuff go within the attention.
And I think those are like really the two things you need to, well, there are actually three things you need to control for.
Sarah Larbi: Hey REITE club nation. It's Sarah Larbi. Here. I am going to be speaking with the one and only Terry Schauer who is not only a jujitsu world champion. She's a two-time world champion in Brazilian jujitsu. she also has a best-selling book called Mindful Landlord currently available on Amazon and is a real estate investor.
Also started a real estate investing management company, um, and so much more. So I hope you guys enjoy the podcast. Don't forget to check out our events. We are doing some live events now as well. TheREITEclub.com/events and come to say hi. And if you have any questions, it's sarah@thereitetclub.com. Terrie welcome to the REITE Club podcast. How are you doing?
Terrie Schauer: Great. Thanks for having me on.
Sarah Larbi: I'm excited. So we were talking a little bit about this. Um, you are in Montreal. Um, I was actually born in Montreal. I have family, uh, from Quebec city and then we moved to Ontario when I was very, very young, but I love Montreal.
I love the food there. I love the salmon tartar. Like they have the best tartar. They don't have that here. Um, but, but, uh, for our audience, give us a little bit of background on who you.
Terrie Schauer: Vast question. I'll try to give you a short version. I'm an investor and property manager. So that's the hat that I've worn for the longest of my career, I started managing properties when I was 19 and I became an investor at 26. So I've been doing that for, you know, just over 20 years now. And, um, in the last few years I've gotten into more into sort of coaching, just wrote a book called the mindful landlord.
And so my secret sauce is kind of how bring more mindfulness and, uh, macro picture into what we're doing on the ground in real estate, especially with managing, but also in investing more generally.
Sarah Larbi: Very cool. So, so what made you decide to write a book
Terrie Schauer: well, I think I always wanted to write a book. Actually. I had an academic background and, and it, I was like had a book in me that was looking for a topic. Okay. Um, and I guess the ideas. Mindfulness had been cooking around ever since I was, um, uh, an athlete in combat sports for a long time. And the ideas around mindfulness, like really helped me succeed in that arena.
And then I noticed that I was applying them to real estate as well. And then I realized that there was kind of a need for those ideas to come into the real estate field. Cuz I. I feel like in martial arts, you kind of have no choice, but to like, you know, align yourself mentally. Whereas in real estate, that's really like, not something that we spend a lot of time doing.
Sarah Larbi: Very cool. So you know what, I wanna ask you about martial arts for a second. Cuz my, my husband's into jujitsu like he did literally goes every single day, probably sometimes twice a day. What, martial arts do you do?
Terrie Schauer: Same thing. okay. Yeah, I was, no, I, um, I was, um, uh, kickboxing, uh semi-pro for 10 years and then GC was supposed to be my retirement sport and then it ended up actually like turning into the same thing as boxing just 10 years later.
Sarah Larbi: oh, wow. Very cool. Yeah. Awesome. Awesome. So, so maybe just give us some examples of what, like, when you're saying mindfulness and tying that into landlording and managing and, and real estate, you know, what does that actually. Entail, like give us some like concrete things that like, somebody can almost even just start doing tomorrow.
Terrie Schauer: Sure. Um, so I'll give you like a very simple example that I think everyone can relate to. So, um, one principle in mindfulness is called taming the monkey mind, and a monkey mind is basically, if you imagine what a monkey does like swinging from one branch to the next, looking for the next shiny object. And this can kind of be an unpleasant mental phenomenon where you just have too much going on in your head.
And that can be something that happens in relationship to stress. It can also be just something that with the pace of our lives happens and it kind of ends up polluting your focus and making you feel like you're scattered. And so like one mindfulness technique would be learning how to tame the monkey mind.
And that's kind of like working with a puppy. So you have to constantly bring it back on task, bring it back on task, bring it back on task. And like that's something you can do through meditation. There are also other, like, sort of less, you know, sitting meditation, heavy ways of doing that. Um, but that would be like one example of, of, of something that people can do to increase mindfulness and like in real estate, like when you're fielding calls, when you have crisis situation going on, or when you're going into high pressure negotiations, um, it's easy to have too much going on in your head. And so just learning to kind of bring that down a level and be able to focus and keep your mind on track is super helpful.
Sarah Larbi: That is pretty cool. So, you know, mindfulness is often taught when you do like these like business, you know, like big companies will, will do it for their employees and whatnot and courses on mindfulness. Um, but it is pretty cool that you're, you're tied into real estate investing and, and that kind of stuff. Do you have like specific concrete examples and action items throughout the book as well?
Terrie Schauer: Yeah, well, basically the book is, um, it's kind of like cutting back and forth. So one chapter will be, uh, a very hands-on, okay, what do, how do I run my property management practice? Right? How do I, uh, assess buildings? You know? So that's kind of, I think just very like a typical, you know, real estate investment book. And then every second chapter is a how to actionable mindfulness technique. So I mentioned monkey mind, but like there are, you know, a bunch of other ones be it like it's called something called watching the thinker.
Where we learn to, you know, tone down anxiety there's, um, a whole lot on overcoming fears. Cause I think especially when people start out or when they're trying to level up, uh, it's very easy to become intimidated by the unknown or to kind of get into analysis paralysis. And, you know, I think. That gets referred to in the real estate industry, but I don't see that a lot of people actually really get into, okay, so I have this problem. I know I have this problem and it's self-defeating how do I actually work with what's going on in my head to be able to perform at the level I wanna perform at?
Paul Copcutt: Terrie, when you, when you're in that middle of that negotiation though, what, what can you do right at that moment? Because that's, I mean, sort of, kind of saying, Hey, I'm just gonna take two minutes out for a mindful session.
I guess there's nothing wrong with kind of saying. Hang on to this, isn't going in the direction we want it to go and kind of using that to slow things down, but what can somebody do right in the thick of something?
Terrie Schauer: Well, I think there's, uh, you know, a bit of preparation that goes into this and you know, what I, I mentioned, um, with, uh, Sarah before is just, you know, I, I import a lot of this from, uh, the combat sports environment. If your question is like, okay, if I'm in the middle of the fight and all of a sudden things are going in a way I don't want, what can I do? Well, the answer is you should have started a month ago and you should have prepared mentally. Um, and you know, one of the ways of thinking about it is that every problem you encounter is a question and you need to have answers for all of the questions.
And so before you go into a negotiation, you need to be crystal clear about what you want. If you can anticipate, um, you know, what some of the sticking points might be, that's just generally mapping out how you want the interaction to go. But then even in terms of your own personal performance, you can sort of analyze, like, where did I have problems in the past?
Did I not ask for enough? Was I not clear enough in my ask? Was it not structured enough? And then you can sort of track that and be like, okay, This is where I sort of messed up on the last time, like an athlete would watch the tape and be like, okay, I should have done something here, here, and here. And then the inflection point of that fight would've gone in a different way.
Well, negotiations are the same and you can like, the more you approach things with a discovery mindset, as opposed to a stress mindset, then you, you put it in like, okay, I'm gonna try things now. And like I tried this last time. It didn't go how I wanted. Let me try a different thing and see what happens because ultimately we take everything so seriously, but it's all a learning process.
Sarah Larbi: Mm-hmm yeah, absolutely. Really well said. So, you know, obviously you're investing you, you've got your, your jujitsu and everything else. I mean, you're, you're really busy. And then you decided to also take on property management, walk us through what that looks like is that your properties is that, you know, everyone else's properties on top of that. And you know, let's, let's talk about that piece.
Terrie Schauer: Yeah, sure. So what I think actually that was the first piece, right? Like I started managing properties kind of by accident when I was 19, I, I actually went to U of T and I ended up living in a campus co-op back then, which was like this, you know, student run.
Cooperative and like my house didn't have a manager. And so I move in there from my parents' house 19 and my housemates vote me house manager. And like, I have no idea what I'm doing, so I kind of just got thrown into it. And then I enjoyed that so much that, you know, fast forward five years and I kind of wanted to sideline actually studied till I was, um, like 31.
I did a Ph.D., but like basically through my studies, I started managing first, I rented a big house. Then I parceled out the rooms to like pay for my rent. Then I borrowed a down payment from dad, bought my first triplex, turned it into student housing, and then that kind of turned into a business. And so when I finished my Ph.D., I actually went to work in a property management company to learn the business. And then I came back to Montreal and opened my own company. So like basically I was managing properties before. Any, anything else on the list started?
Paul Copcutt: And what, and what, what does that look like now? What, how many properties are you managing?
Terrie Schauer: We got up to about 200 doors. . And then I realized that the job that I was doing for my clients, I could make way more money if I did it for myself. . And so now basically I'm in the process of, you know, slowly pairing down, um, the units that I manage for other people, and then increasing the units that I, Own myself. And I've actually, this year I hired a property manager for the first time. So that was like a big move of delegation. And, and now, um, you know, my company's turning more into kind of like oversight of those investments. So we delegate some stuff out to external management, but we keep some stuff internally.
And so like the staff that the staff that I've kept is basically doing. Yeah.
Sarah Larbi: It allows you to have a lot more control as well, right. Of over your own properties. And, um, I think, you know, and, and correct me if I'm wrong, but there's not that much money in managing properties in the long term basis for others. However, I think when it comes to your own portfolio and keeping control and, and, you know, creating your processes and your expectations and ensuring that they follow what you want. Rather than paying somebody 8% or 7%, you might as well take that in house and, and have that person, you know, be your right hand for everything.
Property management standpoint, pay them on a salary or, or whatever it is. Uh, but I find that that is almost an easier way to do it because now they're following exactly your steps, your processes that you put in place. Um, you know, let me know if you agree or disagree or what your thoughts are on.
Terrie Schauer: Yeah. Well, I mean, I think it's a very interesting thing because I, I sort of started a property management business and then discovered after the fact that like, it's kind of hard to scale and it's kind of hard to make money. Um, and then what I also discovered is that in the industry, usually people take on management business as a feeder for other stuff.
Like for example, I also have my brokers license. I have like, you know, I work with a couple of brokers and the property management portfolio was kind of feeding those brokers as. Right. So, because if somebody then wants to liquidate something, then the first you're the first person that knows about it.
That's one thing. Um, the other business model I've seen and like, I'm just not super into construction, but for people who are into construction, I've seen people who have construction companies, um, really feed the construction company with management business. So I think it ends up being kind of like a gateway that often people will take that on at break even.
In order to get access to different things. And you know, today in how I run my stuff, I, the few clients that I have kept are people that I ended up doing joint ventures with. So it also becomes a way for me of vetting people that I'm gonna end up working with. Because if I manage your property for six months or a year, I'm gonna know who you are before we get into a joint venture together.
And you know, how it fits into what I do today, that's kind of more, what it is is that, like, I get, tend to get involved with someone. I see, okay, how are you running your stuff? Maybe I manage something. And then we're like, okay, I feel comfortable enough with you. Let's maybe move forward and, and, and do business together.
I think also in terms of it being, you know, management being kind of my secret sauce, like you can make money renos, right? Like some people do the flip. Some people do the, uh, I think it's BRRRR model where they, you know, renovate, repeat, but like, if you're really good at property management, even if you hire a manager, you're gonna be able to make money, just buy, um, Bringing properties that are not poorly managed into a well-managed situation.
I think, especially in Montreal, you know, there's so much of that just because like, we have this ecosystem here, that's like, you know, very rent controlled and a lot of like older, um, landlords, landlords who are turning over and really we're not managing professionally. So like, if you have an eye for managing, like, you know, I will go for things that my colleagues want nothing to do with cuz the management's gonna be too much of a pain.
Paul Copcutt: When, and when you're talking about vetting. so for a real estate investor listening and thinking, I'm gonna hire my own property manager, what are the sort of things that you would advise they look out for? And, um, in terms of hiring,
Terrie Schauer: That's the million dollar question because like, it's, you know, it's so sensitive and like, I actually just, this, this morning fired like one of my managers in one particular city, um, You know, I think if I look back, like for me, it was really like, I manage my properties. I manage other people's properties, the way I manage my, my own properties. So that means with the level of attention and with the, um, ethics that I would apply when doing my own stuff. So. I don't wanna spend money, um, that I wouldn't spend on my own properties and I don't wanna let stuff go within the attention.
And I think those are like really the two things you need to, well, there's actually three things you need to control for. But like the first one is inattention because given that it's such a low margin business, um, companies tend to take on as much as possible and just really pay minimum attention. So they like won't necessarily go to go to the properties.
You know, issues can be, if the tenants don't call issues can be unaddressed for a really long time. And like that's one pitfall. Um, another pitfall is like the financial aspect, because if you're not creating a certain amount of checks and balances, like you don't know if it's in, you know, your property's in another city or you don't go verify everything they do, they can overcharge or they can, things cannot be done properly.
And so actually to tell you how we're organized now. Like basically I have an assistant who likes, has a route that like every week she goes by and checks what the property manager has done. So like before I pay for a bill somewhere, she goes and checks this before this hap there's extermination.
She's gonna just show up there for 15 minutes and look, and yeah, it's like a little, it cost a little bit more, but the fact of catching issues in the bud, like for example, we had, um, a janitor that wasn't showing up and like, because the the manager didn't go and check. They didn't realize that things weren't being cleaned. The janitor was charging. They, the company weren't doing the cleaning. And if we ha the tenants didn't call and we don't check, we could not realize for six months.
Sarah Larbi: Unfortunately, you know, some, some people, the good ones, the really good ones that are gonna be consistent for a long, long time. Also come. You know, more money and, and also it's, it's hard to find people nowadays, right? It's hard to find people. And I don't know if you're experiencing that with your real estate business or, or the management piece of it as well. But, um, when you have people you do wanna hang on to them, but there's a lot of people out there that you're unfortunately gonna have to hire in fire fast. Yeah.
Terrie Schauer: You know, we actually, it's actually funny cuz uh, like I, I have a podcast and we did like a, an episode specifically on this with, uh, with my cohost where we hired, um, actually like a rental agent to do some rentals for us. And it was like a complete catastrophe and you know, he was so disappointed. Like he was really gutted about this and I was like, look, you know, I've been doing this for, for 20 years. And like usually I hire someone and I just don't let them near the breakable stuff for the first month or two, because I'm assuming that I'm gonna be batting 50%. And like, even when unemployment is not as, you know, low as it is today, like I've just in this industry.
That's what it's, that's what it's been. Because often when you're recruiting entry level, it's not people that have a whole bunch of experience. Mm-hmm and so. Just throw 'em in, see if they swim and if they swim, keep 'em
Paul Copcutt: that's probably good advice. . And, and, um, where where's the future for you? Because you're kind of transitioning your business now to it, more being your portfolio. What. What plans do you have going forward?
Terrie Schauer: I think more of the same, you know, I really loved writing my first book. I actually have a second book that's in the works. I started a, you know, a podcast during COVID, which I'm also having a lot of fun with. So, you know, doing those kind of more creative aspects, um, you know, continuing on, on that trajectory. And then as far as investing goes, um, I'm pretty happy with, you know, this slow moving model that I've built, which is I really, you know, vet people very carefully.
And then don't go at a very quick pace. And I think, you know, the, the Canadian market is like in a bit of a weird space right now. And like I'm, you know, sitting on my hands happily and being like, wow, I'm glad I didn't over leverage. And I'm glad I didn't overcommit because like sure. You know, maybe I was going a bit slower than some of my colleagues at a certain point, but now.I'm sleeping well, you know,
Sarah Larbi: It's about mitigating the downside as well as taking opportunities, uh, and running with them and, and balancing that out. Can I ask, like what your main strategy has been to acquire properties? Is it like buying hold? Is it the BRRRR strategy? Are you renting long-term, midterm, short term? Doing preconstruction, and then where are the majority of your investments?
Terrie Schauer: Buy and hold, like I said, I'm not a real construction geek. Um, I'm more of a management geek. And so my sweet, sweet spot is I really do like low-income stuff. I will look for areas like I wouldn't even say up and coming, like I'm not even, I'm not looking it up and coming, I'm looking at down and probably likely to stay that way for a while and in that area, you end up finding a lot of poorly managed properties because I guess, you know, in Montreal there's a little bit, bit of slum lording going on where people have neglected stuff. Um, and,
Sarah Larbi: Are they multifamily the majority of them?
Terrie Schauer: Yeah. Yeah. Yeah. I mean, we really don't have much single-family stuff here. Like multifamily in those kind of areas, I do also invest in Trois Riviere, which is about an hour and a half out of Montreal, which is like also kind of a low-income area, uh, but it's a bit less difficult, let's say that some parts of, of Montreal. Um, and so that, you know, you'll also ask me what's next, through writing mindful landlord. I think I became a bit more aware of the actual real crunch of affordable housing and watching a lot of my tenants, like really struggle through COVID, um, makes me want to get into affordable housing, maybe even more, uh, potentially with, you know, some of the programs that the, uh, CMHC is coming out to be able to facilitate that and actually like provide that kind of housing because like I said, I actually see my tenants. There's just a problem. Um, generally within, I think a lot of the metropolises in Canada and for sure in Montreal. And, uh, yeah.
Paul Copcutt: And can we, sorry, I was gonna ask you, do you invest outside of, uh, Quebec or.
Terrie Schauer: Not yet. I'm looking at, uh, trying to do it when the market warms up and I get some capital
Sarah Larbi: Do you know where you'd wanna go if it wasn't for Quebec?
Terrie Schauer: Um, yeah, so actually I've been, uh, I used to, uh, live in Marseille, which was actually where I worked in a property management firm, and I actually really like what France, I like what France is doing these days. They've had much less inflation, um, than us and Marseille actually in France, kind of ended up being a bit like Florida in the states. Like a lot of people moved down there. There are a lot of like work-from-home Parisians who have moved down there. And I think it's just not quite happened yet. So that would be my next call.
Sarah Larbi: Very cool. I know nothing about the Fran, like the. The French market, but, uh, I'm sure, uh, you can let us know all about it once, once you do it, but that is, that is pretty cool. I do wanna go back to, you know the niche that you're essentially looking into, which is the affordable housing and you know, for somebody that's trying to figure out, like, what, what does that definition even look like? What does that mean? You talk about, you know, I think the ML select with CMHC where you can get some points and stuff.
Can you give us like, you know, somebody listening to this and trying to figure out okay. You know, does that mean that it's X amount. You know how affordable is affordable? Like, you know, what does that, what does that.
Terrie Schauer: SBasically like this CMHC gives us criteria to analyze that. So in Montreal, it works out to 1,070 a door. So if you're below the 1,070-a-door line, your housing is considered affordable. Now, unfortunately, the way they define that is a little bit too blanket. So like you could rent a studio for 1,070. That's like not affordable, but like if you're renting a two-bedroom for that, That would be considered to be affordable housing here. And like, you know, how I, how can I say this? Like, you kind of, you see it, you know, it, when you see it kind of thing, because if you're going, you know, certain districts or certain areas like, and the rent points, um, in those areas, when you see, for example, you know, $800, two bedrooms, You kind of know what to expect when you see that price point.
We also will know like what districts of the city, those kinds of things are available. And, um, you know, I, I don't know exactly like what you want me to develop with that, but it's, then you're likely to inherit a bunch of kind of social problems along with that, because, you know, that ends up being there's, you know, poverty, there's a certain amount of drugs.
There's a certain amount of precarious income, and mental health issues. And so those are not always the easiest properties to manage, but like, I feel. you can kind of add value there that actually, for some of the residents ends up being a plus, you know, like if you're able to address like a pest control issue, maybe, you know, get rid of one tenant, who's polluting the whole space for everybody else.
You're actually able to, you know, with the calculations we do, we don't jack our rents like crazy. So, you know, we'll like, we'll adjust to that affordable point and then leave it there and then provide acceptable housing for people who don't have a whole lot of disposable income. And so, like, I feel, I feel good about that.
I feel good about having, you know, well-managed properties that are not super expensive and to not approach it with this like very extractive, uh, logic where I'm trying to get like the absolute most I can for a door. I wanna adjust to market value and have it be well run and then provide that service for people.
Paul Copcutt: And what are you able to do in terms of rent increases in Quebec? How does that differ from other provinces?
Terrie Schauer: We have a, a pretty strong rent control system here where, uh, it's, uh, used to be called the Taal. And basically every January, they come out with a rent increase spreadsheet. So you have to take your expenses from the previous year, plug them in, and then it spits out a number at the end. Um, and basically like, that's what I do with my investments. It's what I do with the clients that I manage. Um, when you're carrying a tenant over, um, you, that's what the increase you're allowed.
And we increase like scrupulously with, with that. And we provide the tenants, even the calculation so that everything's very transparent and you can kind of avoid, uh, people contesting that, and then the place where it gets a bit sticky is between tenants. So between tenants, you're technically supposed to increase by the same.
With the same logic, but nobody in practice does that. So then you end up in this whole political conversation of like, you know, does rent control in between tenants actually make sense? Who are you helping?
Sarah Larbi: I mean, there is, there's definitely, I mean, for me, I'm, I'm against that obviously as, as a landlord and an investor that is, you know, Again, there's, there's, there's good and bad to everything. You know, I'm not gonna kick the tenants out just to necessarily increase the rent, but we should be able to do it in order to, you know, get back to market rents. Um, and then as soon as you start, in my opinion, as soon as you start putting too many sticks in the wheels, then people pivot and they go out and they go out of the country.
They go somewhere else. Ultimately, but it is interesting because there are talks about doing that in Ontario. Yeah. About, you know, once a tenant leaves and I don't actually know how they would track it. How are they, like, how are they currently tracking it in Montreal right now?
Terrie Schauer: We have a, a government lease that like we have to use and on the government lease, there's a, um, place where you have to declare the old rent. And if you don't declare it, then they can come forever and if the old tenant produces a lease, they can contest the increase and like then the, you will actually fix it at what they assume to be the increase based on as if you had done it with the form. Right. So it's kind of honor system, but like basically what happens is because the tenants here are pretty militant. Like very often what they'll do is once they leave, they come back. Knock on the new tenant store and be like, here's my lease. Oh, how much did she increase it? Oh, no, no. Like I've had like multiple times where you, you end up at the, at the tenant board and the, both of them show up, like one has the copy of the old lease.
And so like, it's a well known fact that that happens. Um, but just to kind of like, you know, tell you like you have an instinct that this is not a good idea. Well, actually researched it because like this thing, it made me mad and I'm like, okay, I'm gonna check mm-hmm what is the effect of rent control? And if you actually like go and read the academic stuff on rent control. Like, imagine that I have the government tells me that I can sell my apple for 50 cents, but it costs me a dollar to grow an apple. What am I gonna do? Well, I'm gonna grow oranges because I don't wanna deal with that. And that's exactly Montreal is losing 5,000 rental units a year.
Because of this. And so then the choice is I, I am a developer or I'm an investor and I have money to deploy. What am I gonna do? I'm gonna build condos. And then I'm gonna sell them to individual people who rent them at, you know, $2,000 and all of a sudden we're Toronto, you know? Yeah. So that's. Like it's, you know, you, a
Sarah Larbi: five thousand at units a year is a lot. And I mean, lot, I can see that happening. I mean, I would probably I'd probably solve my portfolio that that would all be rent controlled if that came. And I, I would do exactly that I would get into more developments and that would take my money outta country. Yeah. I mean, that's just, that's just me personally, because at some point, like we still have increases in insurance, increases in taxes, and increases in mortgage rates.
Like, you know, This is unfortunately it's way too regulated. And you look at places like Alberta, where it's a lot less regulated and they have a better balance. And I think it's just gonna be at the end of the day, it's a shortage issue. You just gotta like find a way to build more houses, more properties, give investors the ability to do that less red tape.
And the more supply there is going to be out there. You know, the demand might not be as insane. Like we have less than 1% vacancy. Yes, of course, because there is nothing and putting more pressure on landlords is gonna get, you know, less, there's gonna be even less inventory cuz we're gonna go somewhere else.
Terrie Schauer: But so listen, I mean, to you're on one hand, you're right. Um, there's a, you know, a supply issue. And I think that the Canadian metropolis is with, you know, urbanization and immigration being what it is we are all feeling the population crunch. So I think that's one thing, but now again, this, I had this, the same gut reaction as you, and then I researched it and you know, it actually turns out.
There's kind of a more complex thing going on here with financial markets. And as you know, over the last, whatever 20, 30 years mortgages have become something that's got, gets package packaged and sold mm-hmm and as res and you know, various other institutional players come into this multi-family market, that kind of, uh, properties become of a safe asset class. And so what's happened is that this, um, financial what's happening in financial markets, bids up the prices of those assets.
And then the squeeze gets passed on to the tenants. So, I mean, there is, you know, something to be said that as you sell buildings at higher and higher multiples in order for a landlord to make his profit there, isn't an extractive that kind of logic is there in a way that maybe 20 years ago when I got into the industry in Montreal, it was not like that. Like they were selling buildings at, you know, 12 times multiples.
The only people who did it were old men with pickup trucks. Right. Um, and now there's this new class of investors of which we are a part, I guess, who are in this more fast, moving modern finance foreign capital environment. That's a new phenomenon relatively speaking. And, um, I think you. Again, this is the topic of my next book. Right? But like that, there love it. There are these like very macro things going on. And I think us as like little investors on the ground, it serves us well to be aware of that because like, certainly, you know, with the mindfulness wanting to act in a way that's not socially destructive and to at least be aware of what's going on, allows us to invest and to act in a way that's more socially responsible. I think those questions are important.
Sarah Larbi: That is really cool. Can I ask, like where do you find a lot of the research? Cause I think it's so interesting and I like, I love seeing the different points of view. Like where, where do you do this kind of research to find out? Okay. You know, even the, you know, like, I mean, you said a few key things that you've uncovered that like most people wouldn't even know about. Um, where's that from coming?
Terrie Schauer: I mean the CMHC was really great. Like I read their stuff, um, you know, and back to front kind of, so they have great data, up-to-date data. So if you interpret that back, you can kind of do some analysis there. And then, I mean, I just went into, you know, housing policy and like, for example, housing, uh, financialization. So there's like all this academic literature on that, on my podcast actually interviewed, I have some upcoming episodes with some of the profs who've written about that. Um, you know, then, uh, also, um, urbanization, like all of this kind of things that affect housing, rent control, for example, like there were, uh, I don't know if I'm gonna throw the names at you if it, if it means anything, but like Hayek, for example, wrote a bunch of stuff on rent control, you know, 50, 50, 60 years ago, um, that still out there it's available for free Fraser Institute, uh, put out some publications on that.
And if you just kinda like Google those policies, like you will come up with the academic papers that, um, kind of. Give you whatever we'll, we'll give you this information. And I guess I have a Ph.D. in communication. So like reading some of that stuff for me. That's what I do before bed at night.
So it's just really fascinating. And I can't like stop at the surface. I have to understand why do I meet this? And especially like in COVID, you know, when I saw like so many of my tenants just falling off of a cliff with stuff, I'm like, man, what is going on here? Like, why. The precariousness of work or addiction problems, or like what are the social things that are creating the things that we see on the ground. And that's just really, I find that really fascinating.
Paul Copcutt: That's great and, and, uh, I just wonder if the municipalities are doing that much of a research kind, you kind of wonder don't you?
Terrie Schauer: No, I drive, it actually drives me crazy. And like, I swear, before I got on this podcast, I was like, just, you know, clicked on the button, like proposed yourself as a candidate for like this municipal party. Because like, no, it actually makes me mad cuz like, I think like you. I, I spent in my, uh, free time, like time reading this. And I feel like when you hear the public dialogue around this like the politicians have not made the minimum effort to go to the bloody university library and like check out three books on housing policy and just read what works, read what the problems are so that you understand. And it's not like in, in Quebec, we have this real thing of all the evil landlords, and we need like a repertory of rents for like every, they wanna spend, you know, a billion dollars to create this system where like every single rent is written down so that you can never increase it beyond a certain amount.
And it's like, What are you guys doing? Like, like have you researched where this has been done before and is that money well spent or are you better spent like, you know, better to authorize all basement, suite constructions in all of Montreal, like mm-hmm and that costs zero tax payer dollars. You just need to like rubber stamp everybody who wants to do a basement unit construction. And like, then we'll increase, you know, however times the number of houses in Montreal, nobody can afford anything. Just let us do add. suites. You know,
Sarah Larbi: it seems logical, but unfortunately they make a lot of decisions without consulting any of us. And like you said, we're always, you know, the evil, the, the big, bad, you know, landlords that are out there to like screw everyone over. But ultimately, you know what? It is a business. Yes. It's profitable. Yes. I love it. But, you know, there's also cons and there's, there's downsides to it. And there's a lot of red tape along the side, along the way too. And there's a lot of hoops that we have to jump through. And then there's, you know, also a lot of uncertainty because of the stuff that's happening in Montreal is also being talked about in Ontario.
I guess I don't, you know, I think unfortunately at the end of the day, the tenants are going to suffer because there's gonna be less and less and there's gonna be less and less stuff that is even nice. Right? Yeah. Because all of a sudden, you can't, you can't increase rents between tenants. Do you think that they're gonna be painting and refreshing and cleaning the carpets in between tenants?
I mean, you have a tenant turnover. It costs a few grand just to do the 10 turnover every single time, a 10 turn turns over, but. You don't increase the rents moving forward. You're probably now getting a tenant to move into a really crappy, dirty place and over and over and over. So just screwed for thought. I mean, you know, on that note, Terry, we're gonna go to the next part of the podcast. It's our lightning around. I'm gonna ask you four questions. Everybody gets the same four questions. Are you ready to play?
Terrie Schauer: Yeah do it.
Paul Copcutt: Question number one. What is the best advice that you have ever received from another investor or at a networking? Do you do more deals? Why do you think that is? Or what is it?
Terrie Schauer: Because I mean, I think, it's rare that people regret the properties that they bought. They more regret the opportunities that they passed up on. And I for sure know, in my career, that's the case, I think 10 years ago, if I'd have, you know, picked up the properties that I passed on at that time, I would be in a better position today.
Paul Copcutt: You mentioned CMHC, but do you have a favorite real estate investing resource?
Terrie Schauer: You mean for information? Yeah, no, definitely CMHC. I think that's the easiest one and the next would be, um, you know, your local university library. Like I actually just went and, um, did the exercise at Concordia, like most, um, libraries have a community membership, so you can go across a hundred bucks and, uh, you know, go educate yourself because there's such great resources out there.
And I feel like people. don't take that additional step to really understand what they're doing. And even if you're not interested in the whole social policy thing, just read about market cycles. Mm-hmm because right now, like we're going through a, a big revolution and it's if it caught everyone by surprise, but if you actually understand economics and you understand that the average real estate cycle is 19 years long.
And so everybody working today has not seen a proper correction in Canada. And so, okay. We know it's coming. Be mindful of the fact that one day that's gonna happen. And so one has to then understand, like how do market cycles work? What happens? How do you assess where a market is in the cycle, versus just reading the news, the news and the headlines and the news or like what's everybody else doing? Like, let me, you know, yeah. Do what my friends are doing back to monkey brain.
Sarah Larbi: Number three. What is the one attribute in your opinion has made you most successful?
Terrie Schauer: Taking responsibility like a hundred percent. And if I could give advice to anybody who was trying to do anything the with, when you take responsibility for something, you put it under your control.
And when you try to find external reasons for things happening and you don't take ownership, that's when you really stop moving forward, because you're placing your results in the hands of something that's outside of your control.
Paul Copcutt: I like it. And what do you typically do on a Sunday morning?
Terrie Schauer: go to the gym.
Sarah Larbi: Do you still do jujitsu?
Terrie Schauer: Yeah, it's you know that thing once it bites you, you can, you can't get it outta you. I'm I'm sure your husband, uh, will tell you the same thing.
Sarah Larbi: awesome. Awesome. All right, Terri, where can our REITE Club community find out more and reach out to.
Terrie Schauer: LinkedIn is probably my social media of choice, Terry Schauer on LinkedIn. I also have a website, TerrySchauer.com and you can check out the book, Mindful Landlord. There's a website for the book, or you can find it on Amazon.
Sarah Larbi: Amazing. And what is your podcast called?
Terrie Schauer: Real estate investors club.
Sarah Larbi: Amazing. All right. Awesome, Terry, thank you so much for being on the show. It was great having you on.
Terrie Schauer: Thanks guys.
Paul Copcutt: Thank you.
- Log in or register to post comments
- ARNEL-LLEMIT-1637316866's Blog