Francois: Hello REITE Club nation. Welcome to the latest episode of our podcast. Today's guest is none other than Alfonso Cuadra from Ottawa Cuadra Group. Daniel and I had an awesome conversation. You're gonna love it. Alfonso's a very humble guy, even though he plays in the big leagues and you'll find out why. So Daniel, do you have any insights to share?
Daniel: Yes, whenever Alfonso talks about intellectual currency, which is something I had never, I knew what he was talking about, but I had never heard about it before, but that way please pay attention. That is absolutely brilliant.
Francois: Without further ado, let's get to the episode. Hello Alfonso. I'm really excited to have you on. Alfonso and I are co-hosting tonight with Daniel St. Jean, one of the co-founders of The REITE Club. Alfonso we've met before. But for those that don't know you yet, could you give us a 30,000 foot view of who you are, where you're from and what you do.
Alfonso Cuadra: Okay guys. Thank you for having me. I think we're gonna have a lot of fun here. We've met in the past and I love everything that you guys are doing. A little bit about me being a refugee to Canada. I came here with nothing. I was nine years old. My mom had $30 in her purse.
We came from a war torn country, El Salvador got into business as a result of being a young father. I became a father at 17 years old, changed my life, gave me purpose. Got into business, did really well in business at 17. By the time I was 21, my company was across Canada.
Realized that I was very much a consumer and I only had one stream of income. I decided to educate myself and learned about real estate 22 plus years ago. That's when I got involved and I love apartment buildings. I love the economy of scale. So I got into multi families right away, ended up building a portfolio across Canada. And here I am.
Daniel: All right.
Alfonso Cuadra: I hope that's a 30, what did you say? 30 foot view.
Francois: 30,000 foot view.
Alfonso Cuadra: 30,000 foot view. Yeah.
Francois: But you went over 20 or 40 years of life almost within two minutes. So that is a 30,000 foot view.
Daniel: You've got 20 years of experience in real estate investing?
Alfonso Cuadra: Yes, sir.
Daniel: Which means, of course, since you're gonna be 45 this year, you started in your early twenties. Is that a reason why on many of your videos you specifically addressed the people in their twenties and early thirties. I've heard you mentioned that quite a few times, so is that a reason why you're doing that?
Alfonso Cuadra: Yeah, you're referring to some of the videos that I do on YouTube?
Daniel: Yes.
Alfonso Cuadra: I tend to, there's a few things that I'm passionate about. One is teaching young people and teaching financial literacy to young people. I have a foundation called the Quadra youth foundation. My daughter helps me run that. My daughter, as a result, created a real estate program for young people.
A lot of the time I share the stream. I am her mastermind. She brings, organizes, 17, 18, 19 year olds, 20 year olds. We do a mastermind specifically on real estate and as part of the mandate for our foundation. We are really involved in financial literacy, educating, and creating leaders in young people.
That's what you saw on that video. I really loved, if someone could have tapped me on the shoulder when I was 15 years old it would've been fantastic, and to have these platforms, I love to use the platforms to engage younger people in real estate.
Daniel: Of course, as we all know, this is not something that is taught in school, college, even university.
Alfonso Cuadra: When I was 10 years old, 11 years old, I knew for some reason I knew the academic route was not gonna be my route, even though my mom pushed me, you have to go to university.
That's the only way, just like a good immigrant mom would. For me, I just knew even at 10 years old, I felt it's not gonna be my it's not gonna be the way. I remember hearing this word mortgage. We didn't have a house, but somehow 10, 11 years old. I heard the word mortgage.
I went to school and asked my teacher, I said what's a mortgage?
Francois: That makes sense.
Alfonso Cuadra: Her answer was a mortgage is something you get when you're older.
Francois: Yeah, I love it.
Alfonso Cuadra: I knew at 10 years old, I'm like, even at 10 years old, I could call BS on that answer. I knew she didn't even know what she was talking about. I knew I was gonna have to do a lot of the learning on my own.
Daniel: One of the reasons why you like talking or, and I'm not saying you're focusing on, but you like to talk to the younger people is it's a good idea to get them on the straight and narrow to real estate investing before they get 25 years at the government.
Now their brain is working in a different way, right? In 2025, they're still listening hopefully. And this is a really good time to teach them intellectual currency. You said something on one. I wrote it down and I'm hoping that I will give you permission to use it in one of my upcoming books here.
You said the more intellectual currency you have, the less actual currency you will need. Please elaborate on that because that is. Brilliant.
Alfonso Cuadra: Well, a lot of people talk a lot. Especially these days OPM, other people's money and they talk about it, like it's going outta style. But most people don't actually realize what that means. Other people's money means. There's a reason why they're investing in you. That means you'll have it in exchange. You'll have to give up something.
Real estate, it's about developing your intellectual currency. What, that knowledge that you can exchange for capital being invested into your deals so that, so most people think about regular currency . The real currency you should be after that no one could take away is that intellectual currency, cause the more, the less actual currency you'll need.
Francois: Lots about that cause you like 20, over 20 years of real estate investing, you told me in other meetings and interviews 2008, You were there and you saw what happened and clubs like these were vacated. People were not interested in real estate. How did you survive that with the crash currency?
Alfonso Cuadra: What happened back in so very different from COVID or any other downturn in the economy back in 2008? There was a US real estate crash, but it was definitely a correction here in Canada. But even though we weren't as affected. I remember we used to go to these groups, these networking meetings, because we didn't have social media back then. Like we have it now. Or zoom.
There would be these networking events that were like standing room only. You went back in early 2009, and these rooms were empty and it was just like the multi-family guys and were like, Hey, what are you doing? Where is everybody? No one wanted to know about real estate. This is where the real true intellectual currency came about because money disappeared. If you have a really good deal now and you know exactly what to do, there's a lot of capital available, a lot of hard money lenders. There's a lot of joint ventures back in 2009.
No one wanted to touch real estate. Even though it didn't crash here in Canada, people were scared. The money disappeared and especially for multifamily and the only people that were doing mortgages for multifamily were like insured, CMHC mortgages. This was about creative financing. It was like the perfect time for a VTB vendor. Take Backs using that intellectual currency to get into deals.
Daniel: So how do you suggest that the people are listening to this recording? How do you suggest they acquire that intellectual currency?
Alfonso Cuadra: First of all, look for the people that have the results that you're looking for. The problem is that in this day and age every second person is an expert. I can take a dead cat and swing a dead cat and hit five experts in real estate. And so what happens is people are listening to other people that haven't proven the formula.
You wanna make sure that the people that you're listening to books, podcasts, any type of a talk or networking event, these are people that have proven the concept that know what they're doing, and you, your results will resemble the ones that are around you.
Most people's results are a direct reflection of the expectations of their peer groups. You get around the right people. You change your results and start to mirror the results of the people around you. But if you're talking, if you're going around, people that are just doing this, there's a lot of this going on, right?
Daniel: Oh yeah.
Alfonso Cuadra: Those results have not been proven. You're wondering why am I not getting the right results? You gotta get searched. It doesn't have to be me. It doesn't have to be The REITE Club. It finds someone to find somewhere to get access, network, and good quality people.
Daniel: For example, rent. Occasionally I'll be somewhere and I'll mention the word rent to own, and somebody will say, yeah, I've done one or two of those.
Maybe that's not the person that I would want to go to, to teach me how to rent to own. They could come to me, I've done 51, or they could go to Alfonso, the other Alfonso Salemi, who's over 200 now. With 200, he has seen a lot of situations. And if you learn from him you will definitely know how to rent to own. Not from the person who's done too.
Alfonso Cuadra: Yeah, exactly. There's a lot of people that, right now, are just regurgitating information. Be aware of who you're listening to and make sure the people that you're getting that intellectual currency from have proven the concept and have the results that you are looking for.
Daniel: That includes joining you cause I'm a subscriber to your YouTube channel.
Alfonso Cuadra: Thank you. I appreciate it.
Daniel: I don't how many videos are there? I don't know. I stopped counting, but you got so many videos on everything. Explaining cap rate, explaining cash flow, explaining VTB. You are one of the people who somebody should go to, to learn about intellectual currency.
Alfonso Cuadra: I really do appreciate that. It's about 700 videos by the way.
Francois: Wow. Okay. That's a lot. How many hours?
Alfonso Cuadra: You know what? I love it. People often ask me like Alfonso, all of your videos, you don't sell anything. You don't say click down here or go to my course or whatever.
A lot, everything I do, is I do it to add value, show up and add value to the world. I've run my entire organization that way. It's attraction based. Whoever wants to take the next step, they'll reach out. I don't need to sell myself. I just need to show up and add value. That's been my philosophy.
Francois: That's so true. That's what I love about the REITE Club as well. I met Daniel. It's almost over two years ago now. I wrote him a message and he said, oh, I'm coming to Ottawa in a few weeks. We should meet. Again, leading with value, just like you're doing. He offered me a few good tips that I applied, then I'm like, wow, this is great. The REITE Club, the right people, like you mentioned earlier. But anyway, club also sounds good. Just building that network.
If you're trying to build a network and your specialty Alfonso is multi-family, who do you surround yourself with? Cause it's a bit of a different crowd. Like you mentioned. Like rent to own is single family homes. Multi-family is how big and where do you find investors and like-minded people?
Alfonso Cuadra: You definitely want to go where those people are. Find those communities that are harvesting those types of people.
I know you guys, what you guys are doing is excellent. You guys have a lot of education, a multi different investment strategies, multiple different investment strategies and multifamily. For me, It's not the only thing I do, it is what I'm known for. People know me for that, but, I do, I have different strategies.
I'm gonna go where I'm gonna get the highest return on investment. I'm not gonna be pigeonholed to one specific strategy, but I love multifamily. And if someone were to get it one to multifamily, hang around other people that are doing the same, that's what I say.
Daniel: Right now, I'm gonna put you on the spot.
Give me, let's say that tomorrow. I wake up tomorrow morning and say, okay, I listen to Alfonso. I want to go into the multifamily. What is the number one tip that you would give me? That would, what's your number one tip?
Alfonso Cuadra: First of all, number one. Get educated, right? You gotta learn how to analyze. You have to learn how to identify a deal.
Most people don't know how to identify a deal. If I bought a deal here's a deal. Here's the best deal you would look at. And you wouldn't even know that's a deal. The very first thing everyone should do is learn how to analyze deals, learn how to underwrite and learn how to do the numbers.
You can start with books, get a coach, get a mentor, whatever it is that you have to do, but that's step number one.
Francois: Yeah. Because otherwise you waste a ton of time. Shiny penny, buildings everywhere and 90% are not deals. Like you said, a lot of places. If someone says it's a deal, usually it's not a deal. It's usually a bad sign.
Alfonso Cuadra: Most people think I'm gonna go look at it and then and then see if, and then ask the realtor, okay. If it's a good deal or not. I'm sure you can do that. But you're doing everything at a retail level, right? Because you don't have an insight on whether or not that's truly a good deal or not.
Building up that intellectual currency. Means building up the knowledge. You can identify, you don't need a realtor to tell you whether or not this is a good deal. You should be able to look at it at a property and figure out whether or not this is a good deal for you. The only way to do that is getting that education. You're gonna have to get it anyway.
You'll either get it the hard way or the easy way
Francois: The hard way can be quite expensive. If you end up acquiring a non-deal. It goes south. That could be big dollars if you're in big multi-family properties. To Identify a deal, maybe following up with Danielle's question, do you have maybe two criteria you can share that help determine if it's a deal or not? Like what.
Alfonso Cuadra: First of all, it has to be positive cash flow, depending on the strategy, of course. But if you are just going to buy something traditionally a multi-family apartment building, you wanna make sure there's positive cash flow, right? So I typically go looking at between four to 6% cash on cash return.
How do you determine the cash on cash return while you take the amount of money and the cash flow, which is the, all of the, your gross rents, the income minus expenses, for, to not over complicated here on the podcast, but your income minus expenses minus your debt service, which is your mortgage.
That's your cash flow at the end, what's left over after everything is paid. You wanna divide that by the cash invested. That gives you a number, right? That's your cash on cash return? Usually 4% to 5%. You're on the right track. Anything better than that is excellent. When you start to carry these properties, meaning it'll be negative performing negative cash flow.
I would say that type of business model is not sustainable. Usually that happens when someone hasn't evaluated the property correctly, or they're An appreciation type of investor, meaning they're speculating on the price going up in value. If the only way you're gonna make money in real estate is that property's gonna go up in value.
You're waiting for that appreciation. You're a speculator, right? You're not truly an investor, you're just waiting. You're just speculating. You're hoping to ride the market. As markets go up and they also come down and that cash flow is going to be that cushion for you. That's gonna help you weather the storm.
Daniel: Do you throw the word focus and let me explain in a second here in, into your convers your pieces of advice, for example when I mentor people, I tell them to focus on the strategy because you cannot acquire intellectual currency in every strategy, unless you do it for the next 30 years.
Even at that and focus on an area. You can't know if it's a good deal in the mountains and in Halifax and then Winnipeg and because you would need to know all of them, so are you one of the people who suggest to people that they focus on? A strategy and in an area when they're investing in real estate?
Alfonso Cuadra: When the more focused you are, the better, it will be for you in your business. Of course. I believe that intellectual currency as we were talking about it's about building your real estate IQ. Of course, if you want to get a doctor's degree in economics, there's other courses that you'll take to make you an academic to give you an overall experience at university.
Even though you focus, don't be so hyper focused that you're not open to other strategies in learning about other strategies, because it could help you in what you're doing, but yes, you should have a focus in a market. If you are focused in a market I wanna make sure that you max out that market before you start going to other places.
Of course, if you're close to a major city, you might have to widen your search. You know what? You may look at something in New Brunswick. Let's maximize New Brunswick. If that's where you choose to go, or if you wanna go to Alberta. Okay. Let's go to Alberta, buy a few things there, but let's see what else is around there. Before you get too scattered. Absolutely focus is the key.
Francois: Okay. Yeah. I love it. Because it's a huge resource to build once you've analyzed a deal in the market, then you have to build a team over. So property management, finding the right company that could take a while, everything else, legal insurance and things.
You have to rebuild that every time in each market to learn about maybe the tenant culture and different things. So this is great. I love how you say as well focused, but not like having blinders on so you can see as well. Okay. Excuse me. Maybe I need to pivot. Somewhat within this strategy, like you said, multifamily, but maybe you have a mixed use building with some commercial. That's not exactly what you wanted, but maybe it's a good deal. That's great advice.
Alfonso Cuadra: The idea would be to increase your real estate IQ, right? Be knowledgeable on a few things in real estate, and what's going on and other strategies, but of course, try to stay in your lane.
Daniel: Even people who are really focused and really good at what they do, like Wayne Gretzky, for example, sometimes they'll shoot the pot and miss the net. Can you tell us about, I don't know, not necessarily your worst deal, but something you did that did not go well. And what did you learn from that?
Alfonso Cuadra: For some reason, a lot of my horror stories come from tenant issues. Tenants. Yeah. I have a lot of them, I have a lot of tenant horror stories and I share them because it's a part of investing.
People need to realize that. There's gonna eventually, if you do it for a long enough time, you're gonna run into someone that is nasty, and just completely unreasonable. That's just part of the game. But you could mitigate that by always following your system.
I have a few videos on that, on my YouTube channel. To give you that story specifically, I'll say that one of the worst is the one time I didn't follow my own wisdom. I tell people, you know what guys. Does it matter? Always do your proper vetting of tenants, always, get the application, always do the credit check, always, follow up on the person, get the job letter and then one employee of mine.
I was doing a lot of traveling before COVID this is a few years before COVID. But one of my employees said, oh you have this unit that is vacant. I have someone. He comes into our location. He's a manager in one of my other businesses. When he goes there, he spends a lot of money.
I know the guy he's solid. I said, you know what? Because I was lazy. I got lazy one time, one time I said, all right we'll bring him in, and it ended up being one of the worst experiences. The guy had ended up having a brothel. A prostitution operation. He was a bit of an entrepreneur.
Francois: That's why he had lots of money to spend.
Alfonso Cuadra: Man, it took about six months to actually get to the hearing. Then we get to the hearing and he shows up to the hearing and he says, judge, I can't read. They're like, oh, you can't read. Oh, then we have to start over. Start the process over from the very beginning to make sure you have all the documents and you make sure you can read all the documents.
Anyways. It took a long time to get this person out and Everybody suffered, tenants suffered and our staff suffered. Police came every day. It was just a big disaster. That I would say is one of my most recent horror stories. It is even for even more reasons to learn from my mistakes and the lesson I love that you asked that question, what's that?
Daniel: The lesson you learn is?
Alfonso Cuadra: Always stick to my vetting process, right? We have a vetting process, never deviate from the vetting, no matter how much you could be your best friend, always stick to that vetting process. People. There's certain criteria for people to get to be a tenant of ours. The one time I deviated I'd pay for it, I paid for it.
Francois: That goes back to your focus.
Daniel: Don't get lazy, even if it's just one time.
Francois: Exactly.
Alfonso Cuadra: It's too much to lose. It's too much. There's too much at stake.
Francois: All right. Especially some problems.
Daniel: Questions for this fellow here. I think you called them, what do you call these lightning round questions?
Francois: Yes. It's time yet to get started with our famous lightning round question. We have four questions. We ask every guest they're always the same. You just answer the first answer that comes out of your mind. Are you ready to play Alfonso?
Alfonso Cuadra: Let's go. Is there a drum roll or something?
Francois: Yeah, I guess.
Alfonso Cuadra: You know what guys, you guys should have some sort of sound effects. Sound effects.
Francois: Yes. I love it. We'll have a trumpet or something. Daniel, do you wanna do question one?
Daniel: Yes, Alfonso, what is the best advice you've ever received from an under investor or at a networking event?
Alfonso Cuadra: The best advice that I've ever received, I would have to say is back. It'll go back to the beginning, right? To go back to the very beginning 20 plus years ago, my first year I closed on 20 properties. I was able to build my portfolio. I've always been leveling up. I own hundreds of doors. And one of my biggest mistakes is that I spend a lot of time playing small, right.
Once I got comfortable. I would stay there. One of the best pieces of advice I ever got is someone pointing that out to me because often people look up to me. But when there's someone that is doing bigger things than you are, they can say to you, Hey you're not hot stuff like you're playing this game small.
For me to realize, you know what, it's true. I can play bigger. I can do more. I've done it, it's happened to me a few times in my career where, you know what, I've just found that I was comfortable and I had to get uncomfortable. That came from another investor calling me out, and it's hard, especially for people like us, we're experts in the field. We tend to become too comfortable. Sometimes we need to be, we need that little push too.
Francois: Yeah. Humility is the key as well. It's not easy to be, yet to be told like that but it did help you.
Alfonso Cuadra: Oh, absolutely. They were right. I was playing.
Francois: There you go now you're not anymore. This leads me to question number two. What is your favorite resource for real estate investing? It could be book training, a person, an event.
Alfonso Cuadra: There's the traditional, like if someone said, how do I find out about real estate? Or like maybe they're just asking questions. I will always send them to Rich Dad Poor Dad. Always, I would say rich, read that book. If for whatever reason that book resonates with you, call me back . That's a resource. Even for myself every couple years, I'll go back and read that book again because there's a lot of things that I missed, not only rich dad poor dad, but also think and grow.
It's a perfect resource that I think it's a perfect place to expand your mindset. The other one is YouTube. I love YouTube. There's a lot of things that, if I have a question I can always ask about YouTube and YouTube is a perfect resource for something that I may be wondering about.
The third is my own. Educational journey. Myself, even though I'm a mentor teacher I've been doing this for 20 plus years. I still invest in myself in getting mentorship, coaching. And I look for those rooms where I can get into where everybody is speaking my language and it's either just above me or way above me. I love to be the smallest guy in the room. Those are the three things.
Daniel: That makes sense because you drive a BMW, then you made somebody who drives a Rose Roy. Then you find out about the guy who has this private jet. And then all of a sudden, you think it is the end of the dream.
You come to the guy who has a 255 40 at the park in monocle. There's always somebody who has more and who knows more? Third question. What is the attribute that has made you successful?
Alfonso Cuadra: Determination. I am determined and I'm more determined than the person next to me. I think. I'm not the smartest person, but I'm the hardest worker. Like I will do this until right. To have that kind of attitude, do what you have to do when you have to do it. No questions asked. That's why I'm in my office every morning. I'm here past everyone. I'm determined no matter what I am going to achieve all of my goals.
Francois: Great answer again. This leads us to the last question and I think I know the answer, but what do you typically do on a Sunday morning? So if you're that determined, I have a good idea, but I'll let you answer it.
Alfonso Cuadra: Well, to be honest with you I really wanna say something like I work Sunday morning, or I read Sunday morning. I really love to spend time with my kids. I have, my oldest is 26. My youngest is 15. My favorite thing to do is just hang around with her on Sunday morning and watch Netflix.
Francois: That's really good. You need to disconnect. And then when you come back on Monday, you're refreshed.
Alfonso Cuadra: I'm ready to go. But I just love that time, especially during this quarantine time, the COVID has really, I'm sure my 15 year old wouldn't wanna be hanging around with her dad, in any other circumstance, now it's, this is what we do, and I love it. I'm gonna cherish those moments and I love being around my kids.
Francois: Yeah, it's an opportunity in disguise. So thank you so much Alfonso for sharing such words of wisdom and insights. If people want to get a hold of you, what's the best way to find Alfonso. I know we mentioned a YouTube channel.
Alfonso Cuadra: Yeah, you can go to my YouTube channel or any. If you can't find me, shame on me. Yeah. You can follow my Tiktok. You can you can Snapchat me. You can tweet me. You can LinkedIn me. You can Facebook me. You can Instagram me. You can YouTube me. Google me. But I guess the path to least resistance is the YouTube channel. They could subscribe. It's free. I put out a lot of content and if you liked anything here, if anything here resonated with you I think you'll enjoy my YouTube channel.
Francois: That's amazing. If Daniel is on YouTube, anybody can find you, sorry, Daniel. That was excellent. Thank you so much Alfonso. Can't wait to see you next time and maybe in person at some point in 2022 for an update on what you're up to.
Alfonso Cuadra: I'm looking forward to it guys. Looking forward to it.
Daniel: Thank you again.
Francois: Daniel, what did you think about this interview? I'm floored by some of the words that Alfonso shared the intellectual currency that is so huge. What else caught your attention?
Daniel: What caught my attention and what might slip by most people is at the end, when we ask him about his attribute, he said, I'm not the smartest guy around. That reminded me of Jason Buck and Fuso. Recently, when we talked with him, he said, look, I don't know anything. I don't have any arms. I surround myself with people who can do things and who can think better than me. That's my secret.
It seems Alfonso has the same attitude and you know what, when you meet people who think they're the smartest and they're the best and whatever, usually they're not, but Alfonso has this very humble approach. The fact that he might be the smartest person, but if he thinks he's not, then he surrounds himself with an amazing team. That is a really good trait of a successful person.
Francois: Being humble. A lot of people think it's humiliating or something, but it's not, it's an opportunity to learn. You're keeping yourself open to opportunities, learning relationships and things. Yeah. Great interview. I hope everybody. Made some notes. This will help you grow your real estate portfolio. Totally. REITE club nation, make sure to give us a rating review please give us a thumbs up or comments we love to hear from you and Daniel, what do we say?
Daniel: Come grow with us.
Francois: Yes, and customize your life.
Daniel: Yes. If you grow with us, that's what you're gonna be able to do, customize your life. That's it. Cheers everyone.
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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