Alfonso: The team keeps growing and we've been able to check off some achievements. The team keeps growing, bringing on some new positions and roles into the company and yeah. Really focusing on what we're good at. We talked a little bit about that in this interview with Chris Herlin, building that team and having people.
Sarah, you've always been great at outsourcing and finding others to help out in different capacities in your life. Chris talks about his story, about how he's been able to grow and expand, maybe taking on too much at one time, having to check back and refocus it's all important.
It's not all rainbows and butterflies guys. That's the cool part about being part of The REITE Club community. We want to give you the full story, not just the shiny object that looks amazing. Top of the iceberg, where it all looks great. We're giving you the real stories, the real stuff. This interview gets right into that.
Sarah: If you're interested in flipping, this is definitely going to be a podcast about that. Chris is a wealth of knowledge. Don't forget to leave a rating and review and check us out at thereiteclub.com and our events as well. We've got lots of events in person and online. Let's bring in Chris.
Alfonso: Welcome to the podcast, Chris Herlin, so nice to have you Sarah and I are really excited to chat with you today and yeah, it's great that you're able to join us. Thank you so much for being here.
Chris: Thank you for having me guys. Appreciate your time.
Alfonso: Wonderful. Just as we started recording here, we were talking about, meeting back when in person events were a lot more common and we met very briefly at a networking event. Even just to remind myself and remind all the listeners out there to give us a little bit of a background, a little bit about who you are and yeah why you're on the podcast today.
Chris: I appreciate you guys. Yeah, I'm Chris Herlin. I've been a real estate investor since pretty much. I moved to Canada. I'm from Brazil. Moved to Canada in 2013. Never done real estate back in Brazil. It was basically like just doing my job as an engineer. I moved to Canada as an engineer, as a transfer from the company that I used to work at.
Although my parents did real estate in Brazil, I was always in the back of my head, that was a wealth creator for them. It was a dream for me to start doing that one day. Canada gave me that opportunity. In Brazil, it was much harder to get into real estate. Not saying that this is easy here, but I just took action and just started investing with my wife.
I met my wife here. Her parents are real estate investors too turns out. We started together in 2014 and we continue going in the years to come pulling equity, learning the power of cash flow and really doing and repeating the process right. Every single year, pretty much.
Until 2020 when we hit COVID and I lost my job. I lost my nine to five job after 17 years being an engineer, which is too crazy, but I was laid off and then I took real estate as a full-time job and have been doing this until now.
Sarah: Very cool. That's a great story. Now, what kind of strategy are you doing in real estate? Obviously there's tons of different strategies out there, which ones did you start with and are you still doing that today?
Chris: I started the BRRRRS. I really like it, I think it is pretty much like really buying the property and then putting it up for rent. I learned the power of pulling equity and all that through just doing it.
Just talking to people. Of course the beginning was really like, I didn't have it in it working with real estate investors. I just learned on my own pretty much until the point, I knew only Realtors and mortgage brokers at that time. My mortgage broker told me, like I bought my fourth property.
She said, it's over, you cannot buy more properties. You're done. Don't come here again. I was like, shocked. I was like, wow is that I cannot do anything else. I was growing my portfolio very happily and it took me three years to get to that networking event where I met Alfonso.
I learned that all those things were limiting beliefs that other people had and they put on me that four properties was max and that's when I started doing more on the flipping side. I stopped a little bit doing BRRRRS. Then I just focused on flipping homes.
Alfonso: It's almost like a fatal prognosis from the mortgage broker. It's over. You can't do this anymore. You've hit that ceiling. I'm sure many of the investors that are listening to this podcast have heard that, or have heard others getting to that ceiling or that limit of properties. But I know you are located in British Columbia. Were you doing that BRRRRS strategy and now the flips in BC, or are you working remotely? Talk a little bit about the geographic areas that you specify.
Chris: All my properties are in Ontario. It turns out that I just moved to BC about a month and a half ago. It was a dream of mine. I didn't know when it was gonna happen, but real estate gave me that opportunity in terms of financial freedom.
I could go and follow my dreams to move to British Columbia. All of my still my BRRRRs are all in Ontario. I still have all my BRRRRs, all my rentals in, on, in Stratford, Ontario. All my flips were around Southwestern Ontario. They're like St. Thomas, Port Colborne, St. Mary's, Strathroy, Stratford everywhere. I actually opened myself. Into a wide array of properties. I just kept doing it and we won some repeats all the time.
Sarah: Awesome, let me ask you some questions about flipping and just, how you assess them to determine that they're a good deal. It sounds like you're buying in a lot of those secondary tier share markets as well. When you're doing a flip, it sounds like you've done a handful of them now. What are some things that you look for to determine if a property makes sense to do that strategy with?
Chris: All my properties that I bought for flipping their wholesale comp wholesale properties. Really getting those properties with high equity, like a lot of equity from the GetGo and really distressed. I really got into those properties that were like the hoarder homes and had a lot of work to be done, especially in St. Thomas is very known for like properties that are almost like tipping that you have to chain do brand new jobs and everything else.
We're getting those properties that most people wouldn't take them that were really like, could add a lot of value. We flip, I flip 16 houses in the past year. It was basically all on that. They had like hundreds of thousands of dollars in equity from the day that we purchased them.
Sarah: Okay. You're purchasing them with the equity. You're purchasing them from wholesalers. How did you, these are, sounds like they're properties that need a lot of structural work, potentially since foundation issues, who are some of the people on your team? That is key to helping you, be able to create that flip successfully to not have a complete nightmare on your hands with huge foundation issues.
Chris: Like the foundation was definitely a concern. I didn't really get properties with fundamental concerns, but I got a lot of properties like the issues with joy, second floors and things like that.
My business partner was a civil engineer. So he had a lot of knowledge in the engineered structural side of properties. We were pricking those properties, checking on those things and then seeing how much value we could bring doing that. But we had a team with plumbers and electricians and all like the trades. At the very beginning we used our own knowledge and labor to really build the equity and build a lot of the wealth that he created. So a lot of the work was done by us. Based on our knowledge and just doing the things. Then all the trades were done by third party people.
Sarah: What about the money and the financing? Where'd that come from?
Chris: All private lenders. The very beginning, when I started flipping, I had a lot of connections already with private lenders and a lot of really good relationships with them. We started building more over time when we started building our trust and things like that.
Because it's all about You've done once 2, 2, 3 times, and our lenders are getting money back then people start questioning, people start asking how can we get into this? How can we do this with you? At the end, we had like about five or six lenders that were directly asking us what's next? We had a good rate of array good connections in private lending, all around.
Alfonso: As an engineer, as a trade, it sounds very structured, organized, and the system's in place, even as a business partner, as an engineer, having all those, my business partner as an engineer, so I completely get the structure and, organizing all that kind of stuff.
Talk a little bit about your transition. You mentioned that you had lost your job, most real estate investors that want to leave their full time work, know, develop a plan and say, okay, in the next three years or five years or X amount of time, how was that transition of actually, being pushed off the ledge, essentially in losing your job and then transitioning it into full time. How was that transition?
Chris: Actually is a great question because it was something at that time in February, I promised myself because I already had seven properties already purchased already working on them. My financial freedom is starting to build like the monthly revenues and the monthly basically my salary was not really as necessary as it was at the very beginning. Like I had enough cash flow coming. I already had the 90 day plan to quit my job at that time in February and ended up coming earlier. I think it took a month and a half. When COVID hit and then the automotive sector really got hit by shutdowns and all those things.
They laid off part of the company, a big part of the company, and I was one of them. It turns out that the data that happened. I don't know if it was a blessing, but like I was smiling at the point that they already had it was on the plan and they basically made it happen for me a little faster than what I had planned, but it was a happy day that at the end of the day it was a really easy transition.
I already had one flip purchase before I got laid off. It was on the plan to really start flipping homes on a full-time basis already had everything set up. We just transitioned really quick. The step was already built and we just kept going up from there.
Sarah: It's a blessing in disguise, but I think it's good as well that you had that exit strategy planned and sometimes it happened sooner than others. Then it sounds like you ran with it and you made things happen. That is awesome. It was good that you were in a position where you were able to do that and it didn't really affect you and you didn't have to go look for another job somewhere else.
That is awesome. Hopefully people listen to this. That's the position that they can put themselves in so that they can leave within a certain time frame. Let's just go back to flipping a little bit. How many flips are you doing at once right now?
Chris: Right now I'm not doing, but like back in August, I was doing four flips at the same time. In different locations. I was in Godrich Stratford, two in Stratford one in Godrich and one in St. Thomas Ontario. It was a tough time, but we got it done.
Sarah: Let's talk about that, because obviously, this is your business now what processes or procedures have you been able to put in place? Give us some like meets, in terms of if somebody wanted to be flipping what are some of the things that you did that you're like, you guys should do this, for sure. This is how I've built the processes and the systems in order to really scale, what do you think?
Chris: There's a lot of them. Of course having all your ducks in a row, basically like having the private lenders already set up having the speed. You have to have the speed on your table. Of course. You got the property. You can actually get a mortgage on it and all that, but as well as I built as an engineer, I love the procedures. I love to be able to like, get stuff like all planned out. I built standard operating procedures for myself. Everyone that I would like to partner up with in terms of doing the flips, they all follow the same structure. We knew next, what would be next?
There's no wasted time to the point that even with structuring how much we're gonna spend and how much we're gonna put into the property. It was at the end of the day, expenses were like on the one to $2,000 off to what I planned at the very beginning before we started the process. It became a very structured process that we had in terms of raising capital, like for the renovation, if I say like it's $20,000 to do the renovation.
We stick to that plan and keep everything into, of course, some couple things happen here and there. We have to adjust, but having those procedures that you can follow every single time that you're doing flip and keeping those timelines very structured is what made me like to succeed in every single one of them.
Would say it's three months. We have to be outta here, like a month before we had to have the pro house ready with the realtor site, taking pictures and getting ready to put on the market because it takes time to get sold and taken over right closing so those are some of the the procedures that I'm built into my business to be able to every single time, get people more interested in doing business with me too.
We always need people, right? Like us, we cannot do much. You have to have your network of people that are willing to help. Then as well as being a good steward with the money that people are lending to you. That's one thing that I was always very adamant about, making sure that people would be looking at me and saying yes, I wanna lend to that guy again, because he would get my money back. Building those things as an engineer for me, was super important and that's how all the properties were.
Alfonso: That's so important having those ducks in a row, having these, obviously having your private lenders, being able to purchase the home, having the financing, the plan. Really quick what are, if you can narrow it down to one of each what's one thing that you always do on every single one of the flip properties.
What's one thing that you'll never do again in your flip property. One of each that you say every single property. I have to do this, or this has to be done to make sure that we're gonna move ahead. What's one thing that, maybe you made the mistake that you'll never do again.
Chris: Good question because I had some, a couple of things that happened to me that would never happen again. One of the properties that I bought and I was doing deals on a weekly basis, pretty much to get all those properties under contract and get it done. One of them was, we got this property in St. Thomas and I agreed verbally with a money partner that they were gonna help me out by buying the property. It got three days before the closing date, the guy called me saying, I don't have money.
Sarah: I'm just curious, like how did it all pan out?
Chris: Interesting because I'm an action taker, right? Like I got that call and said, okay, no problem. You're not gonna get the money you're out of the business, out of this deal. I start calling my friends and families, of course, and then trying to raise that capital. The property was at a $180,000 purchase price, which is crazy for now. This was like last year. But in three days I raised $230,000. In three days. So that's the power of having your, like people around you that know what you're doing.
Put it out there, not even if you don't put it on social media, but at least the people that are really close to you that really trust you. At that time I was guilty of it. I'm not too much into social media. I didn't really like being out there too much. I was really focused on one thing and just building my business and getting it done.
Everyone that's around me knows me as a good steward of the money, making sure that I'm always giving that money back. I raised that money like super quick. That's how it panned out that we closed the deal and we had actually 20 days after I got a private lender that funded us at 80% LTV after getting the $230,000.
We actually could pay back those people that just helped us out at the very beginning. At the end of the day, we raised over $300,000 for that same property. ,
Sarah: That's amazing. I think that's the power of networking and having those conversations about what you're doing before you actually need people, because if nobody knew what you were doing, you hadn't shared your success or your experience.
It would've been very hard to start from scratch with three days to go. I think that's the biggest thing that I'm hearing you say here even before you need it. Start cultivating those opportunities so that when you actually do need it, it's not gonna look like you're desperate, but here's an opportunity for them to come in.
If you don't mind me asking you're obviously it sounds like you're not JV, but correct me if I'm wrong, that you're just essentially using other people's money to fund the deals for a percentage is that right?.
Chris: Basically, I had a business partner that we used to do me and him, all the properties, and then pulling money from either partner, like basically private lenders as a certain percentage of the money. Not the deal. So yes that was the case.
Sarah: Can I ask on average, like what are you offering if you don't mind sharing with us, just like a percentage, the points, like, how are you structuring that? Just so somebody's, that's looking to potentially borrow private money from somebody else that they can understand, like maybe a little bit of what that costs. Because I'll tell you, private money is more expensive than regular bank money, but there are different levels of expensive money.
Chris: Absolutely. For me, it was not even the expense of the money. It was the speed at which I was getting money. When you're doing wholesale and really low cost or much more equity on the property, speed actually gets into the whole like thing.
For me, it was speed. If in case I couldn't get money from a private lender, I would get with a friend of mine, I would partner with them and we would structure in a certain way that we divide the business in five different steps. Getting money for getting the deal, getting the money down payment renovations that are innovation money.
We divide that in 20, 20, 20, and then each one brings each one of those boxes. So you get the percentage per box that you get. If I would do the renovation myself, I would get 20% of the deal. I found another 20%. That's how we structured it. And people loved the way we were doing it because it became super clear for everyone.
How much you bring to the deal is how much you're gonna get back on the sale of the property. That's what we're doing. If in case right now, pulling money from a private lender, or even if we're pulling money from the private lender, if they're getting the down payment, they get 20% of the deal right away, right there.
Alfonso: Can you break those down again? You said the deal. The money. Yeah.
Chris: If you find the deal as 20% if you bring the financing is another 20% of the deal. If you bring the down payment for that financing is another 20%. If you bring the renovation is another 20% and then renovation money is another 20%.
Alfonso: Oh, wow. Okay. That is very unique in breaking it down. You hear the 50, 50 the work, but that is unique. I could tell why people love that idea. You were, when you were starting, you were working full time, you were doing this kind of thing to get that started.
You transitioned to full time. What were the biggest changes, in your life, your lifestyle, you have a family as well. What are some of the changes that you've implemented from doing this while working and now doing this full time?
Chris: Discipline really got into it because I have a family with two kids. Two small kids. My wife is used to working. She actually just stopped working right now, but for me I'm really into mind, body spirit for me, my life needs to revolve into that. My business needs to revolve around my life, not the way all day, way around. So at the beginning, it was really hard for me to get that straightened out.
I was losing a lot of my health. I was not doing exercises. I'm a triathlete by passion and just do a lot of workouts and love being with my family. One of the things that I really had to do over time is when I saw that I was really focusing on flipping homes and getting those things done, or even.
With work. I had to do things after work and I was borrowing properties. To the point that I would finish my nine to five and then go and then look at the properties and do renovations on them until one o'clock in the morning, sometimes. No time for family, but it was something that I had to experience to give value, like really see the value of being like a good story with your time and your family and your health, and being good with whatever's around you, that's more important than money.
One of the things I implemented was 75 hard. I'm like a huge guy on 75 hard right now because he gave me a lot of discipline. Right now I divide my day. Being more effective with my time was super important.
The point is that I was dividing my day in three different ways. My day was not 24 hours but six hours. My first day was six hours, six second day, six hours, third day, six hours. And when I compressed those days into six hours, I could actually start using my time without touching my phone and booking other things.
I was focusing on what's important at that time, if it was my family, I was only focusing on my family, if it was my workouts and my faith and my workouts, or like reading a book, it was only that. That changed completely the perspective that I had in life and really pushed myself to keep doing the things that were important at that time and not mix them with other things. My work, like I had increased productivity, like crazy amounts because I was only doing that. I was only doing what was important. I was not taking calls. I was doing that. So really being focused. It was what changed my life.
Sarah: I think that's really great insight because there's so many times where we're like, oh, we have time. And then we like to get on social media. Oh. We have some more time. And then before you know where the day's gone. You are not as productive or efficient as possible. That's and for you, it was six hours, but somebody else, it could be a different time. And just to really just block time and put everything else aside.
I think you're probably very successful because you were able to be extra diligent, extra efficient, extra productive in those times. Have you hired like now that your business is bigger do you have virtual assistance? Like people on your team that you have hired along the way?
Chris: I have 15 people on my team right now. I have 15 employees.
Sarah: Can you, can we ask, like what kind of employees there are?
Chris: I'm developing something new, I'm developing software. I moved a little bit out of the flipping side, but when I was flipping, I had about four people. I started hiring more to be able to do more and to get more in the business instead of on the business when I started developing more procedures and things like that. But when I started developing software, I saw the importance. That's when I learned from the flipping side, how important it is for you to delegate things to other people that know how to do the things better than Youtube.
You can manage more on the business aspect, building the business and doing the things that you're good at. But Definitely having people around you that can help you scale a business and do the things much better, much more efficiently that you would do on your own.
It is absolutely important, especially with marketing. I'm not a good copywriter. I'm not a good storyteller. I need someone that can do that for me. Much more concise and consistent. So consistency for me over time became like a very important thing. Being consistent with my business and being consistent in what I can do better. That's what I'm focusing on right now. High value activities.
Alfonso: That's awesome. Stick to what you're good at. And, you bring on and it's, it's up to you if you want to improve on those strengths or strengthen the strengths and higher the weaknesses. It sounds like a very interesting journey, going from engineering into the BRRRRS, into flipping and now, even getting into the technology and software development as well, too. Talk a little bit about, maybe some of the challenges along the way, and maybe the biggest challenge or, and how you've overcome it.
Chris: In terms of doing the switching?
Alfonso: In this point, whether it's one of your properties at, if it's a challenge of, like you just said, balancing life and work and then, and moving forward.
Chris: I think that, yeah, when I start taking over too many properties, it was a challenge, like to keep myself sane and keep my family as well as a center of my life. Especially in August when we decided. At that point, we decided to move to British Columbia and we needed to finish all those properties on time to be able to move here before winter.
I had to move back to that bad concept of my life with basically making sure that my properties were done and like really getting out of too much of like happy family time. My exercise routines and things like that, my routines were really jeopardized on that.
Basically that's what I've done. I think that sometimes we see storms, right? Like the storms in life are really bad and change our mindset a lot. Storms are when I had a lot of things that I had to do that I took on my own. This is all my fault, my responsibility.
At the end of the day I had to get out of it. I had to face those storms and push through it and just make it happen. That's when I learned the power of just taking and having a good team around you that you can take on more projects and be prepared for it.
I was not prepared. That's what I learned on the hard way. I was not prepared to have too many properties at the same time. And I took them anyway, because I wanted to prove to myself that I could do it. We got it done, but I would never do that again. I would never do that without having a proper team and a proper structure that I'm not putting my life and my family and on the game just because I wanted to challenge myself into something more crazy, like having score properties at the same time. This is definitely one big takeaway for me for all these projects that I've done.
Sarah: Awesome. We could talk forever. We'll have to have you come back at some point in the future, Chris. But we are gonna move on to the lightning round. We're gonna ask you four questions and every guest gets the same ones. You're gonna give us the first answer that comes to mind in less than 10 seconds. Are you ready?
Chris: I'm ready. Let's do it.
Sarah: Question number one, what is the best advice that you have ever received from another investor or at a networking event?
Chris: Be creative. So it exists for everything.
Alfonso: I love that. Yeah. When you're working on four different properties, sometimes you probably don't even know which one is which, and definitely being creative and helping the, having those people around you. Awesome. Great answer. Next question, question number two of the lightning round. What is your favorite resource for real estate?
Chris: At this point like wholesalers are great resources for me to be able to get those properties on a low cost at this, at that point that I was doing and starting. Those relationships are super important for me.
Sarah: Great answer. I think in Canada, in the last three years, we've grown in the amount of wholesalers that are out there getting deals. I think there's a ton of value in expanding your search, not just relying on one realtor, but pocket listings from realtors, different realtors, different regions, but also a handful of wholesalers, because that is clearly how you got the best deals. Congrats. Number three, in your opinion, what is the one attribute that has made you most successful?
Chris: Following processes and really sticking to a real streamlined way to do things and not following, not falling out of them, basically, always sticking to the same.
Alfonso: That's the engineer coming back out and you can never take it out. I love it.
Chris: Never take it out for me.
Alfonso: That's awesome. All right. So last question. What do you typically do on a Sunday morning?
Chris: On a Sunday morning, I really take care of my family. So digital detox is a massive thing for me. I really don't wanna touch my phone. I don't wanna touch anything. I'm really connected with my face and my family. This is my day to really take off and really think about life and really think about my week. Actually I put the plan together in the morning, so seven o'clock in the morning. I sit down and I put the plan for the week together, and then I take the whole day thinking about those things and preparing myself and being with my family.
Sarah: Sounds awesome. Chris, where can our REITE Club nation reach out and find out more?
Chris: I'm on Instagram, on Facebook and on LinkedIn. I'm Chris Herlin so you guys can find me anywhere there, so I'm always open to talking and learning new things. So please reach out.
Alfonso: It was wonderful chatting with you today, Chris. Any last words of advice or anything else that you wanna share with The REITE Club Community .
Chris: I just say as I come as an immigrant and just having a nine to five, you need to follow your dreams, make it happen. Don't live other people's dreams. So if you want to do something that you it's in your place, it's in your dreams.
Just make it happen, just do something. There are always creative ways to do it. There's always a way to make it happen. So guys just don't fall on the rut, right? Of doing the things that they're comfortable with. Sometimes it's gonna be uncomfortable buying the first property or doing something for the first time is gonna be extremely uncomfortable. But when you do it once, Then you'll never regret it.
Sarah: Awesome advice, Chris. Thank you so much for all your insights and being on the show.
Chris: Thank you very much, guys. Have a great day.
Sarah: That was awesome. You know what, the biggest thing I think there's many things, but the one big thing obviously is that he did not let him, being a new immigrant coming into the country, stop him. He had a plan, he had a goal and went with it. It's always very good to plan your exit from your nine to five job.
Cause you never know when it can happen. He was able to, even when he was let go, he was able to plan around that and really hit the ground running. I think that's the beauty of real estate investing is we have that opportunity to not have to go back and look for another job, but we just gotta set ourselves up every single day to be able to get there should something happen or when you do wanna leave your nine to five.
Alfonso: Definitely. You know what he encountered his share of challenges along the way. Having 16 flips in one year, managing four at a time, wouldn't like not to me is crazy, managing four different crews and properties and all the different things that go along logistically with that.
Even that one story that he told about that investor or joint venture partner that he had that was pulling out two or three days before they were supposed to close and being able to raise even more funds than he needed. That goes to the power of the network of the people that you surround yourself with, who you're working with, who you're talking to.
You're not gonna find it. $300,000 in three days by watching Netflix all the time. So making sure that you are connecting you are building that network of people, meeting new people that are doing the same thing or wanting to do the same thing and challenging you to get outta that comfort zone is an amazing story.
For more of those stories and, to grow your network, definitely check out thereiteclub.com connect with people on there, tell the stories, tell your story, cause you might seem like significant or something that's not important, but to someone that might be the last piece of the puzzle or one piece of the puzzle that they need to continue their journey to continue to grow and really get beyond what they're able to accomplish. Yeah. Amazing chat always loved doing Sarah and yeah. Looking forward to doing a lot.
Sarah: REITE Club nation don't forget to customize your life and come grow with us.
Alfonso: See you next time, guys.
DJ: Thanks for listening to The REITE Club podcast and joining our community of real estate investors online at thereiteclub.com, where the focus is about helping you grow. We look forward to seeing you again next week. Thanks from your hosts, Sarah Larbi and Alfonso Salemi.
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