Chris Shebib presents How to Find the Best Investment Properties with Blue Orchard Property Group. I'm very excited to have Chris on with us to tell us more today as well. Just before we get started, I have a nice legal disclaimer to read out.
Francois: Welcome Chris Shebib, an award-winning real estate investor. He has been investing for over 30 years in both Canada and the US. Chris, I thought you were 25, but I guess I'm wrong.
Chris has completed millions of millions and forced appreciation renovations. And has a strong track record of producing wealth through multiple investment strategies in different markets and market conditions in both countries. Chris is joining us to help you successfully make that transition from hobby investor to professional investor, which is very exciting. Welcome Chris.
Chris: Thanks very much Francois. I'm looking forward to getting into it. I'm excited to get started here and today is all about finding the best deals, how to find that. it's not a one variable equation, so there's a bunch to get into. Blue Orchard Property Group is the real estate investment and realtor business that I run. We're investors and have been for a long time and realtors as well. We bring that to just about everything we do and work exclusively with investors.
A quote and this'll be a recurring theme as we go through this, "The road of life is paved with flat squirrels who couldn't make a decision". One of my favorites, and so it's such a good one. We've all seen the squirrel zigzag. And there's a recipe to stop us from doing that. So, us as entrepreneurs and real estate investors willing to take the path less traveled in order to get those big rewards, we're driven in those directions and that's amazing, but we're also prone to shiny things syndrome.
We know in the investment world, there are many different strategies. That's part of the beauty of investing. There's not one size fits all. You can pick your own. You can pick your strategy and there's a lot of recipes and things that look very interesting. This one is a marriage between taking action and being informed while you do it and getting that clarity and focus. We'll talk more about that as we go through it.
Myself, I have worked across a number of different strategies, wholesales, flips, RTO, student rentals, second suites, garden suites, apartment buildings in the last few decades. A good breadth of the kind of background that I'm bringing to you.
I've been a contractor and my first career, I worked in technology in Silicon Valley and here in Ontario for many years over 15. Those two careers led into my third, which is real estate investing full time. I only mentioned that just to give a bit of background as to where I'm coming from, as I kind of do site construction and renovations and financial modeling and things like that. They come from the different careers that I've had in the past.
How do we work? We work in training and education. We work in passive investing partnerships. We work in strategic planning. Again, one of my biggest things that I say to investors, and this is part of that recipe. How do we find good deals? Again, if your team members can't talk strategy with you, you might just have the wrong team members. Whether it's an accountant, a lawyer, a realtor, an investment advisor, wherever that is, if they're all tactics, that's a big red flag for me, at least and I would propose for each one of you as well. Guided investing, I'll show more on that as we go through here.
We have a signature eight step process for how to take a person. Again, this is the contextual background in terms of how do you find good deals? Unfortunately, it isn't a single variable equation. Like I said, there is a process to go through in order to find it. In all honesty, it's not right. It's not the same answer for everybody. What is a good deal? It might be different for me than it is for you.
This process is meant to flush that out and really identify how we can best inform you as to what's the best deal for you, not me. That's one of the biggest pitfalls I see in coaches out there and not anyone in particular, but it's a pitfall where it's, I did this and so you should do this. And that may be true but not necessarily. That's where that bread comes from and that mindset around how to find the best deal for you. It's individual to you.
We start with your goals and then we get into your financials, identify what markets are best, what strategies within those markets. It works to tie back to your goals and your financials and then it's about vetting the deals. There's a lot to be said there and it's about winning the deals.
Is this a buyer's market, a seller's market? It's been a sellers market for a little while now. Winning the deals takes a bunch of strategy and it's very specific depending on what deal we're after. Running rentals, marketing screening, placing tenants and getting through to the refi and profitability in many cases.
There's an eight step process to go through. If we can get into this again, it's about value and transparency. One of the Blue Orchard philosophies is informed action taking. On one side, we need a balance. On one side is action taking with no information. Again, the road of life is paved with flat squirrels. We don't want to just jump into action without any information. On the other side, we don't want to be in analysis paralysis.
We want to hit a balance of good high value information and education in order to then be able to move with confidence and you'll know if you're not there 'cause you'll be second guessing. You'll be questioning. You'll be saying what ifs. You'll have uncertainty in your mind. That's not enough information and education to make the call. And you'll know if you're too much on the action side, because you'll be pulling the trigger before, what's going on and you'll find yourself spinning your wheels and not making progress. Those are the two pitfalls on either side.
What we're trying to strike is that informed action taking balance and a bunch of what I'm going to share with you today is giving you some of that information and education so that you can start to strike that balance. It's different for each person, how quick they get there, what they need to fill in the blanks. It's different for each individual. Why real estate? This is context.
The next few slides for me are sharing good data-driven information that is really speaking to a call to action. This information is shared in the vein of one data-driven, accurate, high value information, but it's meant to do one of two things either. Identify that real estate investment is just not right for you and that's totally okay or this all lands and resonates with me and now I need to learn more and I need to go further.
It should help to find yourself in one of those two buckets. What I'm talking about in this slide is a study that was done. It's a 150 year long study across 13 of the major centers around the globe and all investment types. The outcome of that study, obviously that's a massive data set and probably one of the biggest initiatives out there.
The outcome of that is across the 150 years. 13 of the major global centers across all investment types, real estate investment has outperformed. That is a very compelling data point, especially in the market that we're in. Let's take that 150 year macro view and then tie it into a lot of the uncertainty that exists in the market today.
The uncertainty is around what's going on this month in this last year and that is human. That's a very natural reaction to wonder and worry about that. And part of what we're doing is zooming out a little and there's a saying that I think is very valid, which is, let's stop chasing the individual deal and start building wealth and a life.
These broader views can help pull us back from the fear and uncertainty, and the doubt, and the question marks and give us a very broad trend. Is it a risk? No, because nothing is, but this data point is very compelling in terms of saying, if I can extrapolate from the past and apply it going forward, this is an excellent data point for me to draw from, as I do that.
Last 53 years, we went from global, down into the Golden Horseshoe and the GTA. Last 53 years from 1967 to 2020, the blended average across all those years. Yes, we see these corrections, they do happen but the blended average across all of that, the growth and the corrections is 7.08% per year. And remember that's a compounding number each year, 7.08% from the last year. That's just one of the three main wealth drivers in these investment properties.
As our gross revenue covers all our expenses. We have mortgage, pay down, cash flow and appreciation all happening. This is just the appreciation, 7.08%. That's why the adage in real estate investing, when's the best time to invest? It's either today or 15 years ago, and this is a big part of the reason why that's true and also why the GTA and the Golden Horseshoe is such a phenomenal place to invest.
Let's look at appreciation versus income. This is the blue line, the top one with the trend drawn across it is the market appreciation for that time period. The red line is the income and that trend that's happened. You can see that there's a very big Delta happening. Income, staying relatively flat while appreciation rates are going up quite aggressively. What does that mean for us? It means that as we look forward and again, think of that 150 year study, this goes back to 1980, but think of that 150 year trend. What does that mean for us every year? 10% to 15% that could qualify last year can no longer qualify.
We see lenders extending amortization rates. We see interest rates being very low. These things are being done to try and help keep the market accessible. As we look forward. What I anticipate, and again, this is opinion not fact at this point, but what I would anticipate from when seeing a data point like this is that the divide between those who own real estate and benefit from the asset, that real estate is, and those that don't is getting greater and greater.
As we duplex and as we build three units and as we work on apartment buildings, these things are all good. Some of those products are very good entry points to help people get into the market. As this divide gets greater and greater. But as we look at this again, this is a call to action. It's a very compelling data point to say, hey, if we take action, this will benefit us greatly, not just us but probably our kids and their grandkids.
Now, inflation rates for October were measured at 4.7 and that's seven straight months of over 3% inflation. The question is, is it actually higher than 4.7? Let's bookmark that question with lots of theories saying that it is much higher. What's clear is that the money that's sitting in your bank account is shrinking every year. Your hundred dollars today is worth 3% inflation, $97 in a year. Again, a very compelling data point.
What do we need? We need to find appreciating assets and ways to make our money grow so that we can eclipse inflation. That's very important. There's this idea of what's risky. Is it risky to do real estate investing or is it risky to let your money sit there? Dormant and shrink? And I know the answer for me and I don't say this to say that my answer is your answer. I'll share more information to say, I think these are calls to action and very compelling data points.
Back to the Golden Horseshoe, we live in an area, this green belt that you see right over here over top of the GTA is one of the largest in the world. For a very specific reason, the province has been mandating a density for many years now.
We have this population growth happening right here in the heart of the GTA of around 150,000 new immigrants per year, coming straight into the GTA. The provincial planners, it's again, a very compelling data point.
When you step back out of the details and the homes that we see when we're driving around and the deals that are flying by over our desks, you look at a data point like this green space. Above and the water is below, that is a landlocked situation. Now, we have 150,000, if not more new immigrants coming in every year. This creates the lack of supply.
We see the days of inventory is at an all time lows and continues to be at all time lows. The competition around buying continues to be at all time highs. What is driving this landlocked situation and the desirability around this area is a big part of what drives that. One of the questions is what if they changed that greenspace and what if they take it away? What happens? The greenspace, I'm not sitting in on those provincial planning meetings, but I don't think it's not too hard to surmise where that's coming from the provincial planners. If they look at sprawl, they're looking at less tax dollars per square foot.
They look at density, they're looking at more tax dollars per square foot, more profitable from running the individual municipalities in the province overall. That is, what if they take away the green space? I can't imagine them doing that myself unless the density was so high that it was at a tipping point and they had to move it out and what does that mean for us?
For those who own the properties in that area, that's at a maximum density. That's pretty good for us. We're going to see strong rents. We're going to see strong appreciation. We've already been seeing this. This trend has been going on for a while. It's just going to continue to go on based on these data points. The provincial mandate of density 2012 Bill 140 was about second suites. That's taking an individual building and building it inside of it. This is one of the most common ways to BRRRR.
As the second suites, 2019 Bill 108, this is now taking that same piece of property, the bungalow putting two units in it, but now the ability to add a third. In the backyard, for example, or in the lane way or as a coach house. That's the two areas where the province isn't just putting on a green belt and saying, good luck. They're saying to the municipalities in the province that each municipality has to have a plan to accommodate both Bill 140 and 108 and what they bring to the table, which has more avenues for density.
Another area where I think people don't, sometimes it's not called out explicitly. Is that what happens here? When you do a new development, you get charged development fees per unit. When you do a second suite, it was in Bill 140, when it was passed. You don't have those development fees and it's huge. That makes the engagement so much more profitable and same with the third unit and bill 108, again, no development fees, just development costs, the construction cost.
Now, we've got what is a set of data points. Starting from global, going all the way down to the province and the GTA that are very compelling. Again, as I interpret them, there are calls to action. There are things for us to pay attention to, and as people trying to build our own wealth and our legacy wealth, these things are very important trends for us to leverage and have knowledge about.
A proven template for success, not just in the last 10 years, but looking forward to the next 10 years, this all feeds into how do we find good deals? It starts with knowledge and information. The BRRR framework, Buy, Renovate, Refinance, and Rent. This is a generic term often tied to second suites because that's been a very popular model to BRRRR.
In fact, BRRR is just a generic concept. If the market allowed it, you could do it on single family homes. I do it in apartments. I do it in second suites. I do it with garden suites. There's many different ways to BRRR, if I didn't know about BRRR earlier, I would've done less flipping and more BRRRng.
In the early years, it was a very powerful concept. These up-downs are sometimes a vertical split more often than not. It's a sixties bungalow, one apartment upstairs, one apartment downstairs. We force value with a very predictable rental cost. Then, we refinance at a very predictable area. This is the nice thing about this model. A proven model for success.
What do we want to see in our investments? We want to see them be controllable. Single family detached home, very controllable. We have the ability to renovate that, turn it into two units, we can get it. We can put a right rental. We have all kinds of flexibility. We want it to be repeatable. We've been repeating this model for years and years, and the province has been allowing us and making that easy by taking away development costs. I say easy. Everything takes effort, so I don't want it to be easier, relatively speaking.
We want it to be repeatable. We want it to be predictable and that's where the purchase and the rental and the ARV are so good in this model. The renovations that we do here don't have a whole bunch of variation. It's not like a century home or a heritage home or their renovation. It's high-risk, relatively. These are very vanilla. They're very cookie cutter. You do one after the other. We're able to force up the value significantly by changing the use from a single to a double.
We can have a model that is predictable and repeatable, and eventually, a little tongue in cheek, but it gets boring. You're just doing the same thing over and over again. The exciting part of it is the wealth that you build. I jokingly say, if I want excitement, I'll go bungee jumping. If I want wealth, I'll do a BRRR model, a second suite and build wealth.
The next 10 years is going to be again, back to the SDUs and the third unit and what is sometimes now through a garden suite done in the backyard, and additional dwelling units outside of the main building. What we have the benefit of doing right now, again, how do we find good deals in a market? That's this competition, a bunch of this is how we view the land. That's what I'm doing contextually as I paint this picture and say, okay, there's what's been going on for the last little while, now, let's look ahead.
The SDU are going to trend almost identically to how second suites did and then if we were to look ahead, even beyond that, I would say not only is there going to be an additional dwelling unit back there, but if we position it, I bet you, the province is going to allow us to put on a second unit in that dwelling unit as well.
We've got four units on that property. This feeds into the next kind of view of the landscape of what we do in the next 10 years? And how do we find good deals? As I define good deals, I want it to work today. That's a must and I want it to be more than that. I really want to position the investment to be profitable and I have huge future use.
That's where these SDUs come in and look forward to. We have the benefit of looking at how second suites trended again, over the last 5, 10 years. We can fairly reliably predict how this is going to go as we roll out the SDUs. There's a few different ways to do this. These are allowed and many of them use municipalities throughout the GTA already.
You could say I want to buy one of these properties. I want to put in a second suite and a garden suite and do everything big bang upfront. That's one way to do that, pros and cons. Another way to do it is to do land locking by the property that can have a second suite in it and then hang onto that property. That's what this model is proposing here.
Phase one, by the property BRRR within six months for the second suite, hang onto it for three years. Let that property do its wealth building thing with mortgage, pay down appreciation and cashflow, and then refinance it again. Once after six months, and then again, after two, three years, whatever the market dictates and then use those funds to fund the garden suite.
I'll show you what the financials look like. That look like for a deal like that here in a few minutes, but that is something that now has legs to go for years and continually refinance, not just from the market, appreciation more is paid out on a cash flow, but when we're teeing it up and I'll show you what I mean by that in a second for just more refis and potentially more capital to keep coming back to.
How do we find good markets? We're looking at a very simple recipe. We're looking at land scarcity. We're looking at transportation improvements and when those two things happen, big development follows. Winfield farm, for example, Winfield farm and Kedron 22,000 new homes, 10 new schools.
Those are the big developers that I'm referring to when I say that. Instead of becoming research analysts and experts ourselves with big research teams and hundreds of thousands a year in budget, we can follow those trends. The city planners are governing. The provincial planners are governing these things.
The big developers have the research teams, they back it up and put their money behind it and then we follow that one of the simplest and most effective recipes. Where do we, again, we live in the Golden Horseshoe, the GTA, we have primary, secondary and tertiary markets. Thinking of a primary market with less question marks, more proven but higher price points and think of a tertiary market, like a few more question marks, a little less proven at a lower price blinds you want to and this isn't a good, better, best model.
All three of these are very good cases in point. The tertiary markets 10 years ago were Barrie, Oshawa, Hamilton. Those markets today are primary markets. Rewind 10 years ago and think of what you could have done in Hamilton, Barrie, Oshawa bungalows were plentiful. They weren't even in demand yet. They had all kinds of question marks on these markets. You could pick them up for 200, 250 a piece conversions, you'd have your pick of the bungalow that you wanted to get today now. That's the benefit of being in the tertiary market, going where the puck's going to be, not where it is already.
Pros and cons, if you want to have less question marks and less, less or more proven, there's another way to say that. Then the primaries are better. Price point is also a factor. There's a bunch to be considered, but the takeaway on this slide is that we can categorize them into primary, secondary, tertiary, and we can have options in multiple areas in the GTA across those three different buckets.
The trend in the Durham region. The green line is our strategy line. If you will, and where we would make decisions about whether or not investing is good for us, let alone the 53 year trend let alone the 150 year trend. Now we've got one going back over the last 10 years showing the same trend.
The blue line is really more tactical. It's a far steeper trend. It's the last 32 months. We want to make decisions there about our offer strategy and what the market condition is like right now, as we continue to move forward and create deals. Two different data points for us to draw from the same thing, just the Peterborough market, very similar trend lines though.
BRRR, isn't just about duplexing. Here's examples of apartment buildings that we're working on that are being BRRR as we work through the operational plan on these, the details around how we force value. That's very different in apartment buildings than it is when we create a duplex out of a single family home. However, the concept of BRRR by force refi and hang on is identical, very powerful.
Examples of BRRR properties that we've done over the last few years across several of these different markets. These span across primary, secondary, tertiary, right across the board. You can see that we have options in many of the geographic areas throughout the GTA which is huge for us.
All of these properties being turned into legal two units. Let's look at some of the garden suite options. This happens to be the Peterborough market. This is the land locking strategy, that three phase approach. How do we find good deals? Whole bunch of it comes from starting at the macro and figuring what trends are out there? What do we believe in, what do we want to get behind?
Let's zoom right in. Start to marry that in with the investor and their financials and figure out what really fits them. This land locking strategy for me is a very powerful one, which is why I'm sharing it. Land locking, meaning we're going to buy this duplex double property.
I'm using the term duplex loosely. It's technically not a duplex, but it's an easy way to refer to them in an understandable way. We're buying this duplex double property with a bunch of land so that we have the option to put the garden suite on it down the road. The second example, third one here, this one box onto a golf course. You can see the backyards are huge and these properties.
Think about this land in this case, Peterborough being classified as a secondary market is the hybrid of the two, the primary and tertiary but this land, again my prediction might be where I'm putting my money behind is the idea that a third unit is going to be very soon. A fourth unit is probably going to be imminent behind that, just based on the trends. Land scarcity, density mandates, the bills that are being passed to support those things. It seems very clear that the trend is going to connect. Third option for a garden suite here.
If we look at the bigger picture and how to succeed, let's look at a couple of different things. This is an example of a second duplex conversion, which happens to be in the Peterborough market and I'll show both the duplex and the garden suite to be able to compare and contrast the two.
We're going to buy for roughly around 680,000 our short-term capital, which includes closing, down-payment, reno, holding is around 300,000. When we refi, we're going to get about 140,000 of that back. We're going to be left with around 163,000 into it cash flowing at 227 a month. ROI predicted five-year blended or simple. ROI is 42%. Our net profit is going to be around 343,000.
That is how we find good deals. This is a good deal. If this was the only product left in the market, I would buy it because 42% is strong money. In the context of all those macro data points, we just went through this investment is rock solid. More than that, now, if we look at the idea of a garden suite, now this is the one phase garden suite. I'm looking at a three phase, but just to see the financials in a snapshot, you can see now we're buying for the same 680,000 short-term capital is now the same 300,000 plus another two to build the garden suite long-term capital.
We're going to refi and get about 300,000 of that back. We're going to cashflow, and this is key. We're going to cash flow around 1,150 a month because that third unit brings in a very premium. There is this rent preference that you see in the market. SDU garden suites are getting a premium. And my theory is that's because there's autonomy with that unit. Is it a standalone unit? It's not a shared space. It's a shared yard, but not a shared space.
We see the second most desirable is in these duplexes. We see the third, most desirable and apartment buildings and again, not hard to tie in the theory that an apartment building you're sharing more of your building with people you're sharing your building with more people is another way to say that.
In a duplex, it's only one other person in the garden suite, it's only you. We see these premium rents come in now we're cash flowing for 1,150. What does that tell me if I could snap my fingers today and create a hundred of these on the market that were able to be purchased and cash flow at 1,150.
Investors would come from all over Canada and pay more and more until there was about 200 or 300 left in cash flow. And then the price would level out because there's a very strong correlation between the market price and the rent price and the cashflow that these products produce. You can very easily tie together the market, rent, Interest rate, and cash flow. These data points really jive together and correlate quite strongly because investors generally, there are exceptions, but they're generally not interested in losing money every month on their assets that are there to build wealth. What does that mean? And I believe that's true.
Let's just work from that premise for a second. If I snap my fingers and create a hundred of these on the market, then investors would come everywhere, forcing the price up. I believe as garden suites rollout into the market and become less cutting edge and more standard that this 1,150, the value of these properties will go up and up. The cashflow will shrink down until there's 200 or 300 left. What does that mean for me as I create these, I'm going to be able to continually refi the property and pull it more and more capital while still staying cash. Which is again, this is a huge future opportunity.
This is why I see it as the next 5, 10 years. Let's just learn from what we know happened in the last 5, 10 or second suites. Let's just look ahead and start to position ourselves with good properties that are flexible with good land. We can put in the SDUs later. This view is also very interesting. What I just covered is the financials for an individual property and I know I'm being cognizant of time, but we've got an individual property and what it looks like with a five-year projection.
Let's look at it a little more realistically. This chart represents just a standard turnkey, duplex and what its life cycle would look like over 12 years because in reality. When we BRRR, it's really the first refi after six months is just the start of the process. You're going to refi and continue to refi. If that's part of your model, that is part of your building. If you're in acquisition mode, that's what you tend to do. If we're looking at a duplex, what does it look like over 12 years?
When we purchase it in this particular example, we're going to have around $154,000 in capital, tied up that's the blue bars is how much capital is in the building. And the ROI to start is right around that 30%, which has been the way it's been for many years now but after three years, mortgage pay down, market appreciation, cashflow, we're going to be able to refi again, take out about 70,000 of that.
Our ROI jumps up to 82.19% and what is the ROI? It's just a relationship between profit capital and time. When we return capital to us and we do another five-year projection going forward and we'll see our profit, our ROI jumps up as soon as our capital is lower. We refi again, we return around another 50,000 to ourselves.
Our ROI jumps up to 243% and then up to 438%, a refi after that. This is fairly conservative in the last few years. It's been way more aggressive than this, but one more refi or capital's return, now it's infinite ROI, is what the model shows. That is like this intermediate building block.
We look at one deal and it shows us that it's very compelling. We look at how a life cycle of a deal works over 12 years and it starts to become even more compelling. Let's look at a strategic plan. What I did, I'm doing less of this because these plans full transparency are a ton of work to put together.
I can imagine it's a massive financial model and behind it, which I love doing. It's just very time consuming but this plan, what I was doing is looking at a $300,000 and modeling out. What if I was aggressive on, I acquired for a couple of years and it got really aggressive on mortgage paydown, would that get me to wealth faster? Or what if I acquired more for a longer period of time?
I put together this model and I did some scenario building, so again, capital in this case, 300,000 phase one is what this model shows is acquiring six duplexes over the first six years, and then let them do their wealth building thing for the subsequent six years and then sell three to pay all three.
A very similar concept, a very straightforward strategy. Here's our capital balance. As we go forward again, we infuse $300,000. We buy and we drop it down. These stairsteps that we see here are when we're doing future refiles and we don't need all the capital to go buy the next bill.
This is our acquisition disposition schedule. You can see, we buy two right out of the gate. We wait two years for refi, buy one more until we get to six and year six, and then we hang on and then we sell three. We keep three. Here's our net worth and equity built over time and again, this is all built from mortgage amortization schedules, market appreciation, rent increases, utility increases. All of that is modeled in and a big financial model in the background.
We can see now the red line being our gross net worth, the blue line being the amount, the 80% of that, the amount that we could refine and get access to equity. The net effect of this is huge for us. The $300,000 12 year plan again let them do their wealth building thing, sell three to pay off three. After 12 years, we've got $3,558,541 in gross profit. If we were to dispose of them we'd get $3,258,541 after we pay her $300,000 back in net profit of 3.2 million in 12 years.
The one of the more compelling ones is $9,100 and cash flow per month because we've got three duplexes paid out and so 3.2 million in net worth $9,100 and cash flow is income replacement. It's good wealth for retirement. It's good wealth to pass to your kids. It's super strong and so the key takeaway here is , that's strategy and stepping back. Let's inform us very definitively. It tells us a few things. One is that this isn't rocket science, like we can leverage those hundred and 50 year trends.
Those 50 three-year trends, those provincial mandates, those density mandates that what we know has been happening, we can leverage that and be strategic and look forward and put ourselves on a path to get there very quickly to a very compelling, desirable place, that's huge.
The other thing is, as you can see this is three duplexes. We don't need a hundred doors, this, and those numbers are thrown around very commonly in the investing world and that's not wrong. If you want a hundred, if you want 200 or a thousand, that's great, but you don't necessarily need that for the everyday investor who is trying to build wealth in a more modest fashion. You don't need to go that far.
I've been training and consulting with investors for a lot of years now. There's a few key ingredients that I see investors need and myself right over the last few decades, education and information again the road of life, flat squirrels. We need clarity. We need to know where we're going and we need to have conviction around. We need focus.
Shiny things syndrome it's fun. And as entrepreneurs, it is exhilarating sometimes, but be very careful because it can slow you down in your path and the biggest single variable of all mindset, mindset is an ever-changing requirement. Keep evolving, keep growing. As I mentioned at the beginning, some training that we're offering now is taking what we've talked about today and expanding on it exponentially in a training course.
The Blue Orchard 30 day challenge. Let me tell you a little bit about that. If what I've talked about today is resonating, then this challenge is going to be interesting and if it's not resonating, if you're feeling, oh, these things don't land well with me, I don't buy it or I don't, they're not compelling then that's obviously totally okay, too. The goal of the information shared to this point is really to try and self identify. Which bucket are you sitting in? Is it feeling like it's a huge call to action or is it feeling like, you know what, now's not the time or this isn't right for me, one of the two, and there is no wrong answer.
If you're feeling like you're in that form of bucket, that this is a huge call to action, the information and education will give you, help you give you that clarity in post. The different thing about this training is that it is really meant to uproot investors. It's designed for those who do a few different things, those who are looking to move, as you said, in the beginning Francois, from dabbling and investing to more moving toward that professionalism.
For those who feel like they've been educating and maybe getting theory, but not being able to put it into practice that well. This very intentionally spans from theory to practice. It is meant to prepare you to be able to pull the trigger and one of the biggest things I see. Some really good education and training, but then I'm just not sure if this is what I am now out in the field.
I'm just not sure that this is the one, this is meant to bridge that gap and break that lack of movement and give you the information and confidence to be able to jump. The other different thing about this training, not only is it spanning between theory and practice and bridging that gap, but the idea is that it's a four week intensive course.
Each day you're released a new video each day. You're learning new things. You'll have homework to do. It's a commitment for sure but at the tail end of a very short period of time, four weeks in this case, you're going to be ready to be able to pull the trigger. And that's the heart of it. If that sounds right to you, then the fit starts to look like it's there.
Week one is what market and what strategy we're going to touch on today. We're going to drink and drill into that in much more detail, week two, creating profit. There's a lot to be said about this around how to analyze them, how to forecast them, how to look at them, multiple phases.
We three create a two unit dwelling and again, we'll touch on the garden suites as the third unit as well, and how we're positioning ourselves, how we vet the deals so that we know that it's going to be as probable as possible. It will be eligible for this third unit and how to renovate successfully. Probably one of the biggest pain points for investors is running the renovations.
There's many ways to skin that cat. We'll train you on how to vet contractors, how to structure your deal so that if you don't want to, you don't even have to touch the renovations. All of that is dug into, and then we'll look at the road forward and put us a 30, 60, 90 day plan in place for an army with that information. You're ready to pull the trigger.
For you guys, for your loyalty to The REITE Club. If you use this promo code "REITE22", you can sign up https://www.BlueOrchard30DayChallenge.com/. Use the promo code and you'll get a hundred bucks off. In the spirit of transparency, The cost of it is a thousand bucks.
If that's feeling like it's not the right dollar figure yeah, you gotta ask yourself, is that too much? Why is it too much? Maybe again, you're in that latter bucket and it's just not the right move, but if it's feeling like that, the call to action is there and it's resonating. Then that cost is a drop in the bucket compared to the wealthy you can build. That's the information and the offer for today.
Francois: Amazing. Thank you so much, Chris. Wow. What an exciting presentation and the potential there is enormous.
There's a few questions in the chat. I'll try to scroll through them because they happened as we went along. Let me find some of the questions someone was asking about, is this a strategy a beginner or beginning investor can do? I assume so with the training, but what would you say Chris?
Chris: Absolutely, I've had investors on their first purchase, dive in pretty deep. This is part of what we do as we go through the training to start to identify what's your risk tolerance. What is the best step for you as the first one? This is a consistent notion. It's not the same answer for everybody, for some investors.
They have voiced enough concern around the rentals that I've said, look, buy a turnkey. That ROI is still very strong and then look at answering a bunch of questions while you do that first move for others. They've gone straight into try flexing and bigger rentals, $200,000 rentals over a year. It really does depend a little bit on your own situation, but can you absolutely, a hundred percent you can.
Francois: Very good answer. We had a question from Ryan, so we'll tie third unit garden suites to city utilities to pose any issues.
Chris: There's the municipalities, as you can imagine, as these mandates roll out, the municipalities are finding their way through that in many cases. The strategy of a big bang, let's say like the garden suite, the second suite, everything, all in one rental rate up front is good. It comes at the condo depending on what market you're in, learning as you go with the city and then learning as they go with you.
That showed up in Barrie. Barrie being one of the front liners for garden suites. Peterborough is a hybrid right now and I can explain what I mean by that but it started with them saying you can tie the utilities into the back of the house. A garden suite sitting in behind the main house tied onto the back and you're all good.
Very quickly they said that's not going to work. You've got to come around the house and tie in the front yard. Generally speaking, they're looking for a one inch water line coming in as opposed to a half or three quarter inch, because now you've got more draw and they're looking for at least a four inch waistline on the way out.
There's some things that you can watch for on acquisition. And then there's also some things you can do to try. If you follow this hybrid model of the duplex first and the garden suite down the road, when you're duplexing, there's things you can try and do to set yourself up, to be able to have less rentals, less infrastructural improvement when the garden suite does come down the road.
The program delivers one every day, a video will be released to you. That video is your work for the day. You'll be given homework after that video and the whole idea is to startand 30 days later, you are now at a critical mass of information. A ton of information actually and if you're dedicated and doing that homework, you will be very ready to purchase in 30 days.
Francois: Perfect. I see some more questions. We'll have to go very quickly as this is lunchtime. Will there be any interaction with you Chris, during the length of the course?
Chris: Great question. I'll be doing a live Facebook "Q and A" every week. Those going through the course we'll have live Q and A. You'll be able to ask questions directly with me. We'll answer all those questions and that'll be recorded and kept for future participants in future weeks so that we can leverage that over.
Francois: Perfect. And final question. Does the course provide any other financial analysis and financial forecasting documents, spreadsheets you shared on your screen?
Chris: A hundred percent. The analyzer that I showed for the garden suite and the second suite, all of that is included as well as a whole bunch of the analysis around how to do these multi-phase forecasts. All of that is going to be included.
Francois: Perfect. I see one last question for real this time from Jillian. Does the math include capital gain taxes?
Chris: Great question. I'll answer that and augment it a little bit too. Two things are not included in that analyzer, very purposefully. One is tax implications and the other one is the source of funds. When you saw 300,000 for the rental down payment, closing and holding. There is no assumption being made just yet in that analyzer as to whether it's a line of credit or it's cash sitting in the bank account or between your mattresses. That's not assumed nor are tax implications downstream. Largely those things are our individual.
If it's a line of credit we make two changes to the sheet. One, we cover your debt service through cash flow. And two, we change the capital because it's not now the full amount. It's the debt service on the line of credit, not the actual full amount.
We change that cashflow goes down, ROI goes way up. It's the line of credit that affects and then tax implications. That's not included in there intentionally because that tends to be very individual around. How do you strategize on that? We will share our contacts that we use for our strategy sessions around tax advantages and how to save, we'll share those accountant contact details with you.
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