Sarah Larbi: REITE Club Nation. Welcome to another awesome podcast, The REITE Club podcast. I'm Sarah Larbi and I'm here with Alfonso Salemi.
Alfonso Salemi: We sat down and talked with Charlie. You know, he's a mortgage broker, residential, commercial.
He's done his first real estate investing deal as well too. So he's an inspiration. I love what he said in the lightning round. You guys have to hang on and listen to that as well too. One of his attributes of what makes him successful. I really love that. That's something I consider that I have, you know but you guys have to listen to that.
Sarah Larbi: Charle Kayitaba is a great guy and he's a mortgage broker, and he's a real estate investor and got, you know, started doing his first BRRRR. But we talk about some really cool, unique things and credit unions and some different aspects of the financing world.
I hope you guys enjoy the podcast. Don't forget, leave a rating. Leave a review. And also don't forget to register @thereiteclub.com. It is completely free and you can have access to so much great content. So enjoy it and I hope you guys come back next week. See you soon. Charle, welcome to the show. How are you?
Charles Kayitaba: I'm great. Thank you. I appreciate you guys having me on. How are you?
Sarah Larbi: Good. Alfonso and I are excited to speak to you and you just completed your very first BRRRR project, which we wanna dig into a little bit more because it's always nice to talk to somebody that's just finished their first one and just all the experiences and things that you've learned. But aside from that you are also in the real estate industry. If you wouldn't mind just sharing a little bit of what you do, you know, in terms of your job and how you tie into working with investors.
Charles Kayitaba: For sure. So again, thank you for the intro. Again, my name is Charle. I am a residential and commercial mortgage specialist. My main focus, obviously due to the pandemic, I deal mainly with investors doing buy and hold partial and Fullers and slips as well. So that's probably where the majority of my business comes from. And then, you know, naturally, so seeing so many deals come across you get the itch to also join the party. Right? So as you mentioned that I just finished my first partial birth and now kind of getting things organized to see what's out there and what we can take down next.
Alfonso Salemi: Absolutely. And as a mortgage specialist and working in the industry, you know, you're, there's probably all different types of real changes that almost come across minute by minute across your desk and all different types of things, especially when we're looking back over the last little while in Covid. Whether they're just starting or, you know, has a significant portfolio as a mortgage specialist, what are the top things that you can help with, especially working specifically with investors? What are the things to keep in mind when going out and looking for financing? Is it all about that rate, or what else? What else should you be looking out for?
Charles Kayitaba: Honestly, when it comes to working with investors, Very rarely do I even bring up the rate in the conversation. It's usually one of the last things that we actually talk about. Mainly because obviously the rate is tax deductible, especially if it's a rental property, right?
That's why it's not the biggest. But I would personally say if you're someone who's looking to get into the market as an investor, it is an understanding. Simple terms like your debt service ratios, so your income to mortgage amount, right? And also down payment and where that is coming from. Those are kind of like the biggest hurdles personally, I feel for like, beginning investors tend to have a little bit of a trouble understanding income on the application, again, down payment compliance, which tends to be honestly some of the hardest things to do, especially when working with investors.
As you guys probably know, the big banks are compliance heavy. They want to see where that money's coming from. Every dollar, every penny of it, right? So being organized on the front end and having that open dialogue with your mortgage broker to set you up accordingly. Having that pre-approval, understanding what you can actually buy, and then from there, going out with an investor focused realtor to find a property. And again, depending on the strategy you're looking to complete. So obviously, A BRRRR would be a little bit different from a flip. Right. In terms of what you guys are looking to do.
Sarah Larbi: Absolutely. Okay. So I'm gonna give you a couple different scenarios cause I mean, we've always had the discussion about, you know, the typical mortgage stuff and let's take it in a different direction.
Charles Kayitaba: Sure.
Sarah Larbi: You said your commercial, you're residential, you work with investors. All right. So, you know, let's just say a lot of our listeners are self-employed or they are earning income from the rents. You know, what you have found has been the best case scenario where you're sending them, how you're structuring their portfolio, where you're doing some kind of umbrella structuring or something along those lines.
Let's talk a little bit higher level if you don't mind. If you don't have the typical fit in the box, T4 income, debt to income ratio, all that stuff, you know, what's the next step for somebody that's self-employed or earning income from, you know, their rent.
Charles Kayitaba: That's a great question. I'll answer that in two segments, right? We have the self-employed or the business for self individual and then we have more of the serial real estate investor who's really making income off strictly through a rental portfolio. Because they can be structured two different ways. The self-employed individual is naturally credit unions and alternative lenders.
The reason why I always go the doubt route is because naturally when we're self-employed, like myself, we have the luxury which is a double-edged sword to write off a lot of our income, right? And expenses. So we don't show a lot on paper. What's really good is that a lot of, some of these credit unions and alternative lenders, have what's called the stated income program.
As long as you're incorporated or sole proprietor, it doesn't matter. But as long as your bank statements are relatively healthy and have deposits coming through, they will qualify you for a mortgage based off of an annual amount, an annualization, sorry, of three months to six months bank statements.
Some lenders might require 12 months, right, which obviously makes it a little bit easier and they won't ask for T1 generals and things of that. Right now, if you are an individual who is collecting income, their main source of income is through the rental portfolio. Again it could still be averaged out over two years if you're incorporated in using your T1 Generals, but I like personally a few credit unions that as long as the property debt service and you print down 25%, they'll do the deal no matter what. Now when I say debt service, they're looking for a DSR about 1.2, right?
Sarah Larbi: Basically debt service is every dollar that you bring in or that you pay in debt, you're basically bringing in $1 and 20 cents.
Charles Kayitaba: Exactly. So as long as the death service ratio, that's the full term, is around 1.2. They will do the deal, meaning that it's going to cash flow, etc. Income credit is not really their biggest cause of concern here. Cause they're more focused on the actual deal itself.
Sarah Larbi: Just so I'm clear, they're not as focused on the income from, you know, your first 10 or 15 properties. They're gonna look at the next ones, essentially moving forward. Here's the second one. You mentioned credit unions and sure also have some questions brewing as well. You mentioned credit unions. I mean, obviously there are some that work with mortgage brokers and then there's probably some that, you know, you might have a better relationship walking into them directly, right?
I find sometimes the credit union route comes as a last resort in the sense that I'm, you know, for example, like you go to your big banks, then you go to your trust company's Equitable Bank or be lenders, and credit unions don't always, and you know, we wanna just have honest conversations and you're honest guy, Charle. But the reason that credit unions are maybe secondary to these trust companies is because they don't all work with mortgage brokers or they just all have like, maybe like different rules and regulations that make it a little bit more complex. And then in that case, sort of the person goes directly to them and I know there's a lot of questions in there, but if you can talk about credit unions.
Charles Kayitaba: For sure. So you hit the nail on the head. Right. It's honestly right there, some credit unions are open to working and creating a relationship with a mortgage broker. But then some credit unions just aren't structurally set up that way. So even if they wanted to, there's no compliance, there's no systems set in place to even take on a mortgage broker. Cause how can that be paid through the advanced funds at the time of closing right? So that's not even possible. So naturally what would happen is the broker would have to have a conversation with the client.
I have no problem passing on the deal and structuring it, but they may charge hundred basis points a percent, whatever the case may be for their time working on the deal. Right? But that varies, right. That's the toughest conversation to have because like you said, A lot of credit unions are very open to just taking you on. Right? Especially if you have a portfolio of 678 plus rental properties, you might be the biggest portfolio that they have, so they will treat you almost like God sent, right? As soon as you walk into those doors. But definitely that's the issue with credit units, right? Like we may go there as a last time before. Because they're not willing to work with the broker channel or they don't have a broker channel set up.
Alfonso Salemi: Understandable. And that's obviously the best part about working with the mortgage Broker. You have different options. You know, credit union can be an option if you are looking at that, comparing that obviously include that broker fee in all your expenses and all your due diligence when you're running that.
What I wanted to talk about was a little bit about timelines, because now these days, everything is so rushed. Everybody's no inspections, no financing. I remember looking at deals, oh, We were negotiating for 15 days of conditions and you know, we got 12. Oh darn, we only had 12. Now it's like you're lucky if you have 12 minutes, right?
To make a decision on a property. So when it's hard enough to, I don't say hard enough, but it's tough enough to go and find, you know, good solid properties, good deals, you know, sellers market a hundred percent these days when you do need to get financing, how can an investor feel more?
You know, going out and putting in that firm offer, or do you suggest that, how do you work with them to say, you know, these are the parameters. This is what you're qualified for, this is what you should be looking for, and then having that confidence that, you know, you might take a day or two or three because banks we know move slow.
They're like cruise ships, right? You take a long time to turn around. So what kind of suggestions can you work with or can you let some investors. You're going out there and finding properties, you found that one, but now you have to get under contract and you don't want to put financial or financing condition in there cause that might lose you the deal. Right?
Charles Kayitaba: Again, and great question. Honestly, that's another tough one. Cause obviously as a mortgage specialist we technically, not even, technically, we are not allowed to go ahead and advise clients to go in firm cause then we are obviously liable for suit. Right? But we understand the market that we're in and especially in this June, July.
You put a financing condition on anything, especially if you're in a big metropolitan area, they're gonna tell you to go kick, like kick rocks, right?
They're not even gonna look at your offer. So with that being said, if this is a route that as a buyer you are going down, I would say, and I would strongly advise to make sure that you have submitted and provided your mortgage specialist or bank, if you're going to the bank with all documents upfront.
Credit has been gone, You have iron doubt any questions, right? Because if something comes up last minute, let's say there's a $10,000 deposit in your account in the 90 day compliance, right? Most lenders, anything above $5,000, they're going to ask what it is for AML compliance. And if you can't come up for a reason that makes sense to them, well, they can back up the deal. And then there it is. You just have your deposit potentially. That is the best way to protect yourself. I would say personally that way there are no issues, right?
Sarah Larbi: I just wanna go back cause you know, I'd like to just explain the term compliance. So essentially what you're saying is they could go back and look at your statements for the last 90 days and if there's anything that can't be explained, they might question it. So here's another scenario and I like talking about compliance, let's just say you are gifted money and you are working with a lender that may not like gifted money, so maybe you have a conversation with your mortgage broker about putting that money in an account for 90 days, so it can vest There. Are those conversations that you're having, because I think that there's gonna be some banks that are look back at different timelines or whatnot, but what is important to know about that topic?
Charles Kayitaba: Great. Cause I would personally say down payment compliance is probably the hardest part, right? Because not naturally working with investors, there's money coming from everywhere. Money lets to be fundraised, crowdfunded. Large gifts from aunts and uncles. Right. Things of that nature. So in the perfect world, yeah, if you can have the money sitting there for 90 days, right.
Then we don't even need to say it's a gift. We can just say it's your funds. Right. As long as it makes sense. If you're an individual who's making a hundred K a year and you have about, let's say 60k, 80k in a savings account, okay, that makes sense. Now if it's like you make a hundred K a year, you have a million dollars, you know, then that's gonna cause, you know, some, some red flag.
It still needs to make sense. But anything past 90 days, in most cases, they're not gonna ask at all. So as long as it's been there 90 days, you're good. Now if obviously it's less than 90 days and they see 10,000 coming in, right, or a large deposit coming in, then we can position it as a gift. Now where it's coming from, that's another thing.
Naturally they wanna make sure it's from an immediate family member. Now that's again, subjective. Immediate. What does immediate mean? Is that cousin, is that uncle, is that grandma, is that dad, brother, sister. Usually they want it within the immediate family. So brother, sister, dad, mom, grandparents, grandfather are pretty safe. Once you start getting to uncles and aunts, you're throwing it up in the air.
Alfonso Salemi: Charlie, you know, you're doing this all day, every day you're working with investors and sometimes people that are listening to our podcast think we're crazy. And people are going out there and buying properties every single day, and it's the first time and it's a lot of paperwork, right?
Even with my business on the rent to own side, collecting all the documents for certain clients to check their finances. It's a lot of work and it can seem daunting. I want you to give some hope to some investors out there, or would be investors that, you know, this is kind of a normal process, whatever that normal.
The documentation, the process, why these banks, why lenders are doing this. Because obviously you're going and finding the best suit or the best money for those investors, but what are some good te Tell me a couple good stories about you've had some investors that have been successful, that have funded their deals, timelines have been tight, but you know, you've come in and and helped them out.
Charles Kayitaba: You hit again, that's a great question. The reason why the banks want to see documentation up front is because at the end of the day, they're in it themselves, right? They want to make sure that their bottom line is secured, especially if they're loaning out. 80% loan to value on an asset, because you're not gonna find lending outside of real estate that's ever going to give you that much loan to value.
So that's the first thing. Now, the best part about it's, if you're able to go through that documentation process for the first time, Hey, not only are you building a relationship with that lender, but things come a little bit quicker after that because as a mortgage specialist, I've saved everything on my desktop or laptop or wherever you are submitting these deals from, once the lender sees your name a couple times or even your even the mortgage broker name, and they know that you always submit documents upfront and make it very easy for the underwriter. The underwriter. It's human too.
On the other end of the line, you make their job easier. They're gonna make your life easier, you know? Do you want, Charles, you always send me all the documents up front. Let me just look through this very, very quickly for you. Approved commitment. Here you go. Right? But that often takes some time to build that type of rapport with a specific underwriter or bank. That is the benefit of providing those documents upfront once or twice. I know it can be a little bit tedious, but after that it definitely gets smoother.
Sarah Larbi: Awesome. So I think in the beginning too, like you mentioned you do some commercial, you do some residential. Give me an example or give us an example of a unique way that you've structured maybe a more complex deal in the past.
Charles Kayitaba: Unique way. Let's see where I can pull this from.
Sarah Larbi: Something different. I mean, I'm thinking along the lines of like a blanket mortgage or something different that we don't hear about every single day. For sure.
Charles Kayitaba: This is actually a very cool trick I feel like not a lot of people know about, but it will help investors, especially those who are doing JV deals, right? What happens is you have a JV partner who may not be on paper the best. Maybe you are providing some of that down payment as well. All right? And we're talking about down payment compliance, how it can be a little bit hectic in terms of you don't know how to structure the gift.
If they send you the money, it's the full down payment. That's obviously too easy, right? If you're dealing with an individual, I literally just came from doing this, who was providing the full down payment, right? let's say they're also going to be on the mortgage, but you are also gonna be on the mortgage.
Well, to qualify they're not going to be on the mortgage, excuse me. But they're providing you the down payment. Alright? The best way to go about doing that is simply wherever the down payments are being held, add your name to the account to make a joint account.
Because when you pull those statements, it doesn't show a date, right? It just says your name on the statement. That way it shows that the money's actually yours as well. All right. So that is I don't hear that a lot in a lot of the real estate podcasts and things like that I've been listening to, so just to give you more detail on the deal had an investor who was purchasing a fourplex.
All right? And he had a friend who was going to gift him the down payment. The full down payment for the four plans. Right? He was going at 10% down. It was primary, it was gonna be owner occupied, live in one unit, rent out the other three, use market rents to qualify. But the deals like they already went firm.
I got on the deal pretty late. I cannot tell the friend to deposit money in the account and position it as a gift because they have no blood relation. The friend's account was relatively clean. There was no transactions coming in or anything like that, so all I did was I'm like, do you know what? Would you be open to adding your friend to your bank account and make it a joint account that way satisfies down payment compliance.
Closing, take your friend off the account and then that's how it was, right? And then once you satisfy down payment compliance and on the lawyer's office you can do all the transferring you want, the bank has already gave the green light in terms of down payment. So you can go ahead and pull it from whatever credit card line of credit you know, financing too. You want to just pay the lawyers and advance the funds from there. So I would probably say that I have a few, but that is the most useful and actionable that I feel like a lot of people can use that don't think about.
Alfonso Salemi: That's great Charle. And, alright, so you're getting a lot of good tips and I remember when going through different trainings and learning and talking to different whether it's realtors, mortgage brokers, other professionals, investors and one advice or one piece of advice that I always got, only answer the questions that you're asked.
Only give the information that you're provided. So is there something that you're just like, no, don't do that. Do not answer that, don't provide that. Don't even ask, but obviously working with a professional, you're gonna help guide them along the way. But what's, what's a common mistake that you see a lot of investors making and then you're like, no, please don't do that.
Charles Kayitaba: Cause we have a human on the other side, right? The underwriter, in most cases, underwriters want the guilt to go through. To protect their job, they do have to ask specific questions. Right? So that's why they say, as a broker, they provide the information they specifically ask for nothing more, nothing less, right?
I will give you an example that just happened. I have an investor client who has a large stock portfolio. He's only 25 and he's on his fourth rental property out in the Windsor market. The clients, I mean the underwriter as they're questioning the legitimacy of the deal because like, how is he only 25 years old?
Large stock portfolio four properties on his own, something's not adding up. Right? They're like, where is the down payment coming from? And how did he make it, like how did he get to where he was? Like, how did he make so much money so early? Right. If you start explaining, oh, he invests in stocks.
He's a day trader. You know, his parents are rich. They come from overseas. Now you're giving 'em way too much information and they're just looking for something just to say no. Right? So what I said was just simply long-term investor, all right? And he buys in the Windsor market because it's affordable.
Sarah Larbi: Keep it short and simple and never talk about Airbnb or short-term rentals. Long-term rentals are the way to go. Others don't like it otherwise.
Charles Kayitaba: Always. Yeah. Short and sweet. Especially they're never going to ask. Obviously the client, cause you, you guys aren't never speaking with the underwriters and that's why it's very important. I always say make sure you have a level of open communication with your broker and tell them all the information that they need. Sometimes people ask me, well, why do they need to know that?
I just want to know the whole deal entirety, where things are coming from. That way in case I'm question. I know how to respond to make sure that the file doesn't walk or anything like that.
Sarah Larbi: Before we get into the lightning around you, you bought your first investment property that ended up being a BRRRR. Obviously with your job and what you're doing and how you're helping investors is that what pulled you in to do your own? Or maybe just walk us through that story of how you decided to take your mortgage broker role and dabble into doing your own deals.
Charles Kayitaba: Believe it or not, it's reversed. So it was actually this that got me into mortgage brokering, right? So it was like literally the reverse effect. So my family owns a property out in St. Catharines, right? And my mom was getting a little bit older, like, mom, we want you to retire. Like this is just relaxing you, you've done enough.
What we did was we purchased a property, all right, so we sold her property on my mom's property and we went to purchase one. And then she's like she just wanted an upgrade, typical 80% 20% down, or even more than that. Because she didn't want the mortgage payments to be high.
I'm like, well, why don't we look around to see if there's at least like a separate entrance or anything like that if you want, we can at least rent out the basement, right? But it was nothing crazy. Cause again, this was very much her property, her proceeds from the sale.
We found a property, all right, I believe it was around 540,550 at the time. This was about a year ago. And behold, had a separate entrance. All right. Basement wasn't completely finished, but it had a good bone, all right? And it was large. The basement in itself, I believe is around a thousand square feet to 1200 square feet.
Lot of room to work with. Two bedrooms, powder room, and that was it in the basement. So what we did was we obviously purchased it, we closed on it. We dumped about 35K to 40K renovations. All right? It already had a separate side entrance. We built a kitchen in the basement. We built a full bathroom and also we built a laundry room upstairs.
There was already one laundry room, which was downstairs. All right, so that was done. We got tenants there. They're, they're paying about 1650. On a monthly basis due to the rates they were just coming down. So the rates were still affordable, I believe the principal and interest payments all in all, just around the 2100.
The fact that we got a basement rental, For, for 1600. That's, my mom was pretty much living for free upstairs. And then that was right before Covid. And then my business started picking up this, I wouldn't say Catherine's, we're starting to see the market rise. I'm like, what's going on? And then now we're, we just finished the process of refinancing and the house guard appraised at 715.
We took a good chunk of money out and then now we have it sitting there and we're just on the hunt for our next deal. So that was, I didn't really understand the BRRRR until maybe the last year or so. And it was intentional, but when we closed on the property, I was just getting my feet wet in investing.
Just reading books. The REITE podcast, M to M podcast. Even the REITE podcast was Francois, right? So it was. We stumbled upon it in the beginning, and now it's a little bit more strategic, especially now we're looking for our second deal.
Alfonso Salemi: That's awesome. What a great story to, you know, helping, helping your mom, helping your family, investing, being able to pull out and now looking for the second deal. I love those stories. I love hearing that and that's, it's really powerful. And just the amount of information that you have, that you share with, your different clients, different people that you're working with, that you're sharing with us today. Keep it going, man. That's awesome. I love hearing that. And we can't wait to have you back on and talk about the fifth and sixth and 10th deal.
Charles Kayitaba: That's the goal, right?
Alfonso Salemi: That's right. So I think we're ready for the lightning round. So yeah, why don't we get started, Sarah? Why don't you start us off?
Sarah Larbi: All right, so there are four questions. Every guest gets the same four questions. You can give us the first answer that comes to mind. Keep it short and sweet. Ready to play?
Charles Kayitaba: I'm ready if you guys are.
Sarah Larbi: All right. Question number one, Charle. What is the best advice that you have ever received from another investor or at a networking event?
Charles Kayitaba: Don't be scared, do the numbers and execute. I find that most deals Or anything, not even just real estate, but when you're self-employed and you're taking that big jump most deals are lost in being idle, staying in the state of limbo. Should I do it? Should I not do it? If you do the numbers and it makes sense, take that leap of faith and naturally everything works out for the best.
Alfonso Salemi: Nice, great answer. Question number two, what is your favorite resource when it comes to real estate?
Charles Kayitaba: I don't think the majority of the population has access to this, but I have a program that's called Purview. And it simply just gives you a quick update on the property's approximate value. It's not always the most accurate, but relatively gets the job done in terms of what you're looking for, and it gives you the structure. What's the registered mortgage on title, when it was purchased, who's purchased the name of the family who currently owns it, or who's on the mortgage.
At least it gives me enough to start my analytical process and starts crunching the numbers. Seeing what the comparables are in the area. What are things I've sold for and, and go from there. So that's my favorite resource.
Sarah Larbi: I love that resource. And I'm gonna add, here's the thing is if you guys are looking for some off market opportunities and you're doing some door knocking and you have a really good relationship with your mortgage broker, get them to pull it for certain different properties because you can actually figure out who owns it, reach out to them directly, and you can also figure out.
How much they still have left on a mortgage or not. Because here's the thing is maybe they are more open to doing a VTB depending on what they owe. And so I think it actually could open up a lot of doors for some off market opportunities or some really strategic you know, vendor take back type of deals or that kind of stuff.
I love purview again, like you don't wanna be bogging down you're a mortgage broker every single day. But I mean, if there's some good properties and you got a good relationship with 'em, use them for the purview reports and obviously, you know, to close on deals as well. But I think it's a great resource. Awesome.
Charles Kayitaba: Especially if it's off market too, right? Because obviously there's really nothing else you can pull from to get any type of statistical data on that.
Sarah Larbi: Absolutely. You can tell like who transferred it to who, or who bought it from who, how much they bought it for. Like, there's just so much awesome stuff and like even comps and stuff, you can get on that. Cool. Number three, what is the one attribute in your opinion that has made you the most successful?
Charles Kayitaba: Great question. This is tough. I would say almost a childlike imagination. As people get to know me a little bit more, it's like I find that as individuals get older because of quote unquote society, things we see on tv, we tend to put up barriers and things that we can do to our potential, right?
When you're a kid, it's always like I wanna do this, I wanna do that. I wanna be an astronaut. I wanna be a singer. As we get older, reality starts to say, oh, I can't do that cause of this, cause of that. And I feel like I'm always very optimistic and especially when it comes to lending in general, I'm very Determined, right?
Even if a lender says, no, I'll figure out a new way to structure a deal and see if there's an alternative lender that can provide the same value. Right? And I would say that's what's helped me grow my mortgage business to what it is now. And hopefully those same attributes only carry over into my investment career as well.
Alfonso Salemi: Love that. That's great advice. And that's good Negoti. Practice as well too. You negotiate like a five year old and just try. There's no reasoning, right? If they just want something, why and keep going through. And having that childlike spark is so important to keep that to keep that going. And it's not don't let no just means ask another way. Right? So to wrap up the lightning round, last question. What do you typically do on a Sunday morning? What does your day look like? How does it start off on a Sunday?
Charles Kayitaba: I will say my Sunday actually doesn't really change much from the rest of the week. I have a very, very strict morning routine that I follow. So first 15 minutes. I kind of just show gratitude and thankful for giving me another day to be healthy and strong, whether if you're religious or not. I just feel like it's always good just to give some sort of gratitude to a higher being if you believe in one.
I work out fasted and then come home, have breakfast, and usually, on Sundays it's my lighter days. I don't like to do too much work, but I will answer emails up until 1:00 PM and then I pretty much just relax and prepare for the week ahead me
Sarah Larbi: That sounds awesome. And working out is my language too. I love working out. I'm trying to like, get to two times a week, but we'll see what happens. sorry, not two times a week, two times a day. But we'll see what happens. I work out every single day. But like now, like in a lot of, since things have reopened and I'm like, I wanna add like a second afternoon workout after my morning one. We'll see what happens.
Charles Kayitaba: That was my professional background. I used to manage over three fitness studios in the GTA. So working out was definitely a very big passion in my two days. I haven't done that in in years. I don't think my boards and my body can handle two a day.
Sarah Larbi: I'm gonna combine like Pilates with like, like an F45 type of thing or something. So like it's not gonna be like two of the same workouts cause that would be a lot for sure.
Charles Kayitaba: That would work. Most definitely.
Sarah Larbi: Awesome. So Charle, where can a REITE Club nation reach out and find out more?
Charles Kayitaba: Awesome. So again, I wanted this, first of all, thank you guys for having me on The REITE Club podcast. The best way to get in contact with me is via Instagram. I'm super, extremely active on my social media, so that's CharlesKayitaba. And also through my brokerage Instagram as well at Money Tree Lending Groups. Although there are two ways you can get in contact with me if you ever need me.
Alfonso Salemi: Great advice today, great thoughts that you shared with us. Anything else that you'd like to share with The REITE Club Nation? Before we log off?
Charles Kayitaba: Actually, I have a question for you guys, believe it or not, and I've been itching to ask this and I want to hear from your provincial perspective, cause I know The REITE Club does, you guys cover so many different realms in real estate.
I wanna talk about JV partnership specifically. Have you guys seen a shift in new investors? Cause I have a theory, I just wanna kind of want to test it out. Since Covid and the pandemic. I find that there's a new population of investors that I've never seen before and you know, naturally I know you guys are big on JVs and things of that nature. Have you guys seen anything on your end in terms of people looking to invest in coming in?
Sarah Larbi: I think more people are realizing that they can't rely on their J O B and they're looking even faster for that opportunity to leave the rat race because there's just been so much uncertainty. So I think part of it is because of that. Do I see more? I mean, I don't know. I mean, we've always seen a lot or there are a bunch of new ones potentially, but I think if anything, it's going to be, in my opinion it's going to be based on people realizing that like their jobs are not secure and a lot of people lost their jobs over the last two years.
A lot of people are still losing their jobs. In the future, I think, you know, there's a desire that's maybe stronger now than ever to do something different so that they're not chain tied. So what about you?
Alfonso Salemi: Yes, I can unequivocally say there's been more interest in people that want to partner with us in our rental and program as a joint venture partner that are looking at real estate as a way of retirement. Before it was, you know, the traditional bank stuff. I don't even wanna say the acronyms, cause I get the stomach ache when I say 'em. But you know, the typical acronyms of investment or other methods and of the traditional ways that we were taught. But now more than ever, I think people are seeing real estate as a form of investment, as a form of retirement, not just as their primary home or single dwelling.
There are more youngsters that are saying, I wanna buy a house and rent out the basement. And to do that kind of stuff, there's more people that are even a little bit on and age that are saying, Hey, I need to add some passive income because I can't be at my job. I don't wanna be at my job until I'm 65, 70, or 80 years old.
That way of investing, that way of retiring is definitely, I used to think, you know, when we were at The REITE club live events in Burlington, oh my God. Like people would come in and if it was the first time, they look at you sideways and you're crazy. And now it's almost, it's con 180. You haven't invested in real estate.
Now you're crazy. Right? So I've definitely seen that shift and it's advanced, but a great question. And yeah I do think there is a new wave of people seeing the benefits. And I think it's through podcasts like this and probably you helping your clients and all the different things that people are doing out there that's saying it is attainable. It's not just for, you know, those guys and the penthouse suites that are investing. It's, you can do this one, one property at a time, one deal at a time. So, great question, Charle.
Sarah Larbi: You know what, the other thing too is that like interest rates are at an old time low. And so you can't really save your way to anything anymore. You just have to invest and you don't have that many options. But Charle, I'm just curious, like what is your theory that you had in mind.
Charles Kayitaba: The reason I felt like this was perfect, I haven't really spoken to anyone about this, but something I've been thinking about a lot of time just from the deals I've been seeing. So just to make a long story short, cause I, I don't wanna talk too much, but I've been starting to find that a lot of those in the hospitality business specifically, those who either own hotels or motels restaurants, because obviously they were the heaviest impacted. I've had an overwhelming response of clients coming from those industries and they seem to be honestly the best joint venture partners or investors I've seen in a while.
Reason being. Obviously coming from an entrepreneurial background, they already understand the certain level of risk. That's not really nothing that needs to be explained to them, but they're more comfortable because it's real estate. It's a physical asset. Right. It's not a business.
Another thing that's really intriguing is that, They are able to get so creative with their financing because, you know, as a sole like as an individual, really the most you can do is get a, a line of credit right on your name or a credit card, where if you've come from a restaurant, a lot of them have operating lines of credits.
Which are massive. Some of them are 100K, 200K, 300k, and these are lifetime lines of credits that they can always draw, bring down, break down, and the rates are relatively lower. Another thing, now this is really creative. Naturally, the government has given out so much money to those in the hospitality industries due to covid, right?
Covid relief funds, SBA loans and things like that. Now, I'm not one to judge whether you use those loans absolutely to bring your business back up to where it was. But I'll be lying if I was saying there's not a lot of people also dumping that into real estate. , right? Because they're not personally guaranteed either.
I've just, and it's just been blowing my mind. I've been seeing this, I'm like, wow, that's actually kind of genius. So, you know if there're individuals I'm not sure within The REITE club, you know, I wouldn't be surprised if you guys are starting to see a lot more people and investors specifically coming from the hospitality sector.
Pushing real estate now because again, they understand cheap rates. They understand leveraging against line of credits. They've been doing that to run the restaurant for a long time or the hotel for a long time. Usually a lot of these businesses, they're not done on cash. Right?
Sarah Larbi: That's an interesting theory. So if you guys are out there listening to this and you know, some restaurant owners start venturing and you know, bring them to the circle. Awesome. Charlie, once again, where can people reach?
Charles Kayitaba: You can follow on Instagram _CharlesKayitaba, where again, you can reach out to me through my brokerage Instagram at Moneytree Lending Group.
Sarah Larbi: Amazing. Charle, thank you so much. And that was really insightful and fun. I had fun talking to you and getting to know you better, so thank you so much.
Charles Kayitaba: Thank you. Likewise, guys. I appreciate it again, once again.
Alfonso Salemi: Thanks, Charlie. What a great chat, what a great guy. You could just feel the emotion, the inspiration, you know, the energy that Charle brought to the conversation. I'm sure he does that every day of his business, helping his clients. On the residential side the commercial side, getting creative and fighting for his clients, working with all the different types of lenders. Definitely somebody.
You'd want on your power team as you continue to build that team of people that are helping you along your real estate journey. Definitely a great chat. Sarah, you know, a couple takeaways anything that you took from that podcast?
Sarah Larbi: You know I think a big takeaway, I mean obviously there's tons of great information. Charle is just awesome. But I think a big takeaway is to work with a mortgage broker alongside a credit union.
I think you still need to go out yourself and source a credit union in conjunction with a mortgage broker. That's just my take on it because not all credit unions will work with a mortgage broker and some do, but it's always good to have cast a wide net and obviously, make sure that you don't treat your team like second class citizens.
You always wanna make sure that they get compensated for if they're spending time or whatnot helping you out. But I think there is something to be said about credit unions and exploring that.
Alfonso Salemi: Absolutely having a plan, getting a second opinion. Not always just hearing no and then stopping, figuring that out and speaking to multiple people, right? Not only Charle, other Mortgage Bridge group brokers and agents and professionals that are in the industry and other investors that, how they've been successful, have been able to acquire more properties. And that's what it's all about. So hope you guys enjoyed the podcast. Don't forget to rate, review, share it with a friend, and get on thereiteclub.com website and we'll see you guys there. Have a good one. See you next time.
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