Exploring Investment Markets Outside Canada

Voytek Mardula and James Lloyd

 

Francois: Up next is Exploring investment Markets Outside of Canada, with Voytek Mardula and James Lloyd from US properties. I'm really excited to have these guests here. Voytek, a lifelong entrepreneur, has owned and operated businesses in various industries. Over the last 25 years in the last 12 years, he's also gained extensive experience in investing in managing rental properties, both in US and Canada and Voytek current focus is on US real estate, primarily Detroit in addition to buying and selling turnkey investment properties in the US the property management company, which he owns and operates, manages over 300 doors. Wow. In the greater Detroit area. 

And James is the Canadian Sales Manager for usproperties.ca with over 17 years of definitive experience in hospitality and sales management experience, he has a passion for customer service and client relations on a daily basis. He is responsible for overseeing the company's client development. And helping Canadian investors every step of the way with a turnkey solution for purchasing cash flow positive real estate in the Detroit area. 

James: First of all, it's just a pleasure to be back here and to see some familiar faces and to be with the REITE club, it's been a great partnership. I'll just say at the start that it's been a pleasure to meet your membership and that, on a daily basis, more and more, I'm getting calls from Canadian real estate investors who are looking for alternatives. They're looking for cash flow. Maybe they could be maxed out with the Canadian lending system.

And the price of acquisition has just gotten so expensive, and they just don't know where to go.  Voytek and I have a company here at usproperties.ca and we're Canadian and we specialize in helping Canadians with a full turnkey solution. What that means is we help you with property selection and sourcing to construction to help you with a legal advisory network to get set up.

To help you through the process, up into closing, getting the property management and tenant team, getting you a bank account. So, the fact that you work with a Canadian company doing that and helping Canadians in the US, we found a real niche. So we encourage anybody who's been thinking about it to be a little timid because it is daunting just to reach out to us, besides that, I'll pass it over to Voytek to talk about the market, especially where we're focusing in Michigan at the moment is extremely hot.

We're busier than ever. The neighborhoods are doing great. The city is really doing well post sort of COVID recovery. And we're really thrilled with  how our operation is performing for us and for our clients.

Voytek: Yeah thanks James. I Just wanted to add a little bit, we've been there for about five years and my wife and I, we actually started off as investors for ourselves.

We had a portfolio in Toronto apartments, and a multi and we really weren't getting the cash flow. It was tough. It was, all the, every single month, all the rent money went towards condo fees or towards mortgages, et cetera. And we really thought, okay in 25, 30 years, we get to have some money.

Do we keep going this route or is there another way where we can actually enjoy the appreciation and be in an exciting market, but also get the cash flow? I think the scalability is what was also exciting for us, what the US market offers is asset-based lending.

So, the ability to borrow as much as you want, as long as you can come up with a down payment and, if you can keep buying it, you can expand your portfolio. Whether you want to own one or two properties, or whether you want to own 20 or 30, 200 or 300, it's totally up to you, how big you want to go.

And we're very excited about the Detroit market where they’ve gone from bankruptcy there all the way to now prosperity and the city, the neighborhoods are just changing before our own eyes. And I had the pleasure to go down there. During COVID I wasn't able to go over about 12 months, but I started going again in April and the transformations have been incredible, some neighborhoods where we have properties, we have a portfolio there in Detroit. And have literally been completely transformed as beautiful yards and there's so much renovation going on and some streets don't have any more houses to renovate, it's done, everything is maxed out and and the MLS market is extremely strong.

And that's happening right across the US. I think the combination of working from home and nesting that had happened during COVID have made real estate extremely hot, and the prices are continuing to go forward and it feels like it's never going to end.

Like it's really crazy to expect, especially in these more affordable markets so we have been very much focused on Detroit. We've also now started with Florida. We're going to touch on that a little bit later on, but it's another extremely exciting market, Tampa Bay area St Pete's and Clearwater.

And the prices are very similar there and there's a huge influx of population moving into that area as well. So, we're very excited about that. And I'm going to share that with you in the future with the REITE club members.

Francois: Awesome. So I want to take a minute to show the properties that you guys prepared for me. How do you say it? I guess you have the turnkey solutions.

James: You know, we met, hearing what you wanted six months ago probably. And, you came to us with a vision of what you were looking for and we found an area of the city, which is closer to Midtown, which has some larger colonial homes, some of them in need of quite a drastic renovation. And as we're going to see in your case, this is one of our more substantial rehabs. It's really stage three. I think Voytek likes to call them where it's really right down to just the foundation.

And then sometimes even more It was a real project for you Francois. We really appreciate your patience through it. I think the end result is something really special. It's a beautiful home. It turned out beautifully. It's in a great neighborhood. It's going to have a great return for you for years to come.

And what a special place to start with this. We're really thrilled.

Voytek: Yeah. We're big fans of the area where you purchase. Pamela and I actually have three properties very close to you. Two, three blocks away. One of our good friends has eight there and, and we're always looking in that area to fantastic neighbors, very close to downtown and what's left there is a lot of the homes that require a heavy renovation, and with the home, I think you're about to show we're about 95% completed. There was some stuff still going on and we're going to have some more finished photos but you'll see the transformation.

And we really lifted that block in that area. I think by doing that house, we had some people. This was a before photo here. This is an address on Melbourne street, very close to woodwork. One of the main kinds of Yonge Street equivalent. This was a larger, like more than 2000 square foot home.

This is the finished product. So we did a lot of exterior work. We changed the roof on. We changed out all the windows. This is the side of the house here with the old roof. Back in the back looks rough.

James: Right. And you look at this, this transformation on this block, all the touches on the street, this is a gorgeous old home that really has an opportunity as you can see, there was nothing left, not habitable nor in good shape.

So here's the kitchen, we've really got it. The whole house here you can see what was going to go. This is right at the end, right? Where we're just finishing off. I know you're getting the home professionally photographed next week. We've got a nice granite countertop in there.

That's our sort of white box. We've got a nice laminate floor there. It's durable for your tenants coming in. Here's what it does not want to look like. You guys got the skylight right there and then look at the beautiful staircase we've put in. This is our top crew. This is a typical style: it's light gray, and with laminate and, matched with the black railings that really stand out on the staircase. It's a grand entranceway. Really a nice looking home. We're really pleased with this.

Francois: I know they're not finished but we're almost there. The house is now finished, but we need those final pictures. Next,

James: We have, yes, we have them going in next Wednesday and we're working with Alex on that.

So we're excited. And can I say, it's going to be a great home for somebody. I know it's got somebody already lined up to live there. So, the homes like this don't last for long on our internal tenant team. And the first thing they do is market. I was happy to hear that we're going to get a little bit higher than it was on the original proforma for you. I think that's reflective of the hotness of the neighborhood. And I think it's going to be a real exciting time around refinancing time when they send that appraisal out, because it's going to, it's going to work over.

Francois: Thank you. And I'm really excited about what's next though. We have lunch and learn plans with the REITE club for the REITE club members and we're going to hear about investing in Florida. 

James: It is a very exciting time for us. I'll touch on it, we are currently in the transition of expanding. We've got the sources and the property management and the inventory, right?

It's a great market, great returns. It's a stable area. So with the hurricanes and the storms it's held up well over the last a couple of decades there and we're really excited about it. 

Voytek: It's a great area, it's just as big as Detroit in terms of population and it's about 6 million people and, right now Florida is experiencing one of the biggest migrations, they're like 5,000 people a day are moving into Florida right now.

So it's insane. Sitting out pandemic time, It's better in Florida than it is in Minnesota, people are just really flocking there. There's a huge shortage of housing. Properties are being rented out very quickly and the houses were able to get very specific areas that are also very hot and they're up and coming and moving quickly.

So, the returns are actually pretty similar to Detroit. We've been able to really lock down some really amazing rental areas, still getting rents 14, 15, $1,600 per month, and really nice returns, really nice homes, a thousand square foot bungalows and that are amazing rental properties, but can we also be sold to a family down the road.

We see massive potential in the area. We're very excited about it. And we have acquired our first few properties there and are going to get a lot more next week. So, we'll be able to offer them to everybody for the REITE club. And we're really excited about it. It's going to be fantastic.

Francois: Excellent, Thank you, James and Voytek.