Brenda Schuiling, Tim Tsai, Mel and Dave Dupuis
Daniel: Good evening, everybody. Our REITE partners who you see here on the screen are in the business of real estate investing just like you. So, be sure to reach out to them for their expertise in growing your real estate investing business. And by the way, there's 15 of our REITE partners out of hundreds and hundreds of professionals that we work with.
These 15 have been handpicked and you can trust working with them? They are BDO Canada, Blackjack Contracting, Brenda Schuiling Real Estate, Butler Mortgage, Carson law, Elevation Realty, Hub International, Investor Mel and Dave Dupuis, King Homes Legal Second Suites, Mission 35 Mortgages. Mycor Insurance, Pinnacle Wealth, Trust Your Talent, White Elm Designs and Cherry on the Sunday, The Windrose Group, Claire Drage.
All right, before we get really started a little bit of a legal disclaimer here.
Disclaimer
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Before taking action, always do your own research, also known as due diligence, including but not limited to talking to other people about their experiences, and also talk to your legal and accounting teams and then make your decision.
Sarah: Alfonso, so, we are going to be presenting him and I, the next panel, which is our market updates. So, we've got Brenda Schuiling, who has 15 years of real estate experience. Also an investor, a landlord, a licensed realtor. We are going to be speaking also with Tim Tsai from Trust Your Talent, who is an international real estate investor, award-winning mentor business coach and retired himself at 30. Congratulations, you got me B, awesome.
Mel and Dave Dupuis, Mel and Dave, the investor couple. Authors of the real estate investing secrets, A No-BS Guide to Creating Wealth and Freedom. Their investors, owners, property managers, and have over a hundred apartments, 30 properties plus, and growing. Welcome everybody. How are you? All right, Alfonso, let's take it with the first question.
Alfonso: Absolutely really pumped to get a talking to this panel and we have some amazing Titans of industry. It's all right on this panel. So, I want to get right to get started with you guys with some of the trends that maybe that you've seen evolving through the last six months through this pandemic that wasn't happening a year ago, or I don't know, like Valentine's day in February.
So, Mel and Dave, let's start with you guys. What's some of the trends that you've seen evolve in the last, in this pandemic time? And then are they sustainable?
Mel: Thanks for having us. It's been very hot. It's been a very hot market. There are a lot of places there. A lot of properties are overpriced which it can be that does equal that it can be on a sustainable, unless you're doing your predictions correctly, right? Because interest rates are so low and prices. Especially, if you're doing flipping and that kind of thing, you have to keep that as part of your whole strategy.
Dave: We're in a secondary market. Alfonso,, which you'd already know. So, we don't have hot markets. We don't have bidding wars. We don't have places going, 80 K over asking. But that has become our reality. It's even in secondary markets that is happening. And do I see it being sustainable? Probably not, but yeah, definitely an eye-opener.
Alfonso: And just for all the attendees out there. What's the market that you guys are in focus?
Dave: Yeah, we're in Northern Ontario. So, North Bay, Ontario, let's say three hours North of Toronto and before hours from Ottawa. So, definitely a secondary market. And like I said we don't have bidding wars, but now we do.
Alfonso: Okay. Awesome. Awesome. Next I'm going to go to Brenda Schuiling and you're in like the Silicon Valley North, right? Like KWC in and around that area. And definitely even I, in my opinion, before the pandemic really hot market, a lot of the key factors and indicators that you want to buy. But what have you seen going on in the last six months? And is it sustainable that wasn't going on a few months ago?
Brenda: While the millennials are coming into the market more and more, and I'm looking to buy, but it's not that affordable. So, a lot of them are looking to. There's not a lot of inventory on the market, even in the rentals here. Kitchener, Waterloo, Cambridge. I'm in Paris, Brantford is nearby. There's a huge shortage of rental properties. So, that's driving the prices up in rental. Not only are they being screwed and trying to get into the market and buy a house because they're too expensive, the rentals are expensive as well.
That kind of leads to the other trend that I'm seeing in that is the boomers are either leaving their homes whether they're downsizing or moving to retirement residences or wherever, or some of them are looking to duplex their current homes and move their kids inside because they have nowhere else to go.
That is another trend as well. The boomers are looking for bungalows and that's another shortage. I'm finding this way. I don't know if that'll be much longer because they're looking for condos, basically bungalow condos. Condos that are bungalows. They might live in two-story one and a half story homes, and they're looking to move out of those.
There's a lot of opportunity. I think there's basically going to be a flood of those properties coming on the market in the next little bit. You've seen that trickle. We've seen a trickle. But I believe that I'm seeing more and more even on MLS, I'm seeing POS the sellers are POS or state sales, those types of things I'm seeing the price ranges in the 400 to 500 range. I would say I'm seeing half of those types of properties and they're distressed properties are old and dated properties. So, that's another thing, immigration as well, huge thing.
Alfonso: Got it. I'm just thinking maybe some of those boomers are downsizing to smaller places so they can kick their kids out in a nice way. Maybe that's it. So, those types of things are happening. And I want to move out West to Tim, here out in Alberta. Giving it a different perspective. You don't have Ontario focus with our other panelists, but in Alberta, what are some of the things that you're seeing in maybe other markets that you're investing in that have come about and that weren't there and is it sustained?
Tim: So, I live in Edmonton, Alberta. So, I'm going to focus on that market for a little bit. And we also invest into the lower mainland and BC as well. So, I'll probably touch on that a bit too. And it's right now, it's really weird because today we got 23 degree weather. So, what that means is last year at this time, we already had snow on the ground.
Mel and Dave, maybe the same thing for you guys? Not sure. However, this year it's like that pent up demand since COVID, like that train is still moving, which is really interesting for us because our days on market are actually dropping as we speak. However, the values are also dropping just because most people are still not really able to afford what they really want to.
Overall, though, the market is actually moving in a good direction right now. And the other thing is obviously with every sort of economic contraction. Tenants have options now. They can now start to select their landlords. And so, what we're seeing in this market, they're much the same thing as we saw back in 2014, 2015, when oil first crashed, it's the fact that slumlords or non-professional landlords, they didn't take care of the property while they didn't really treat their tenants. They're now losing those guys, and we're actually picking up those guys.
This is also why we're actually doing quite a bit of flips and BRRRRs at the moment in this market ourselves as well, because we were building for a while. And then we realized building takes about 12 to 18 months. Right now we can BRRRR something in about three to five months in this market.
And we picked up a lot of great tenants in that case too. And the numbers are working phenomenally our symbol cash on cash. If you're not self managing it is at least 6%. And I know 6% compared to out East, in some markets, it's nothing. However, we always like to see that. We always like to say that the Alberta market has always been a bit of a blend between the east and the west, as in, a lot of people will go into New Brunswick for the 10% casual, 12% casual couch, or they'd go to Vancouver and have zero cash to cash.
We're battling, However, the point is you get a poor single family home. You get to get the duplex. They call Sweden out West and you get decent cash flow, a single family home. Let's say you get him for $220,000. You put in about a hundred thousand dollars worth of work. You can actually get appraised at about $400,000. However, you can actually cash flow upwards of $800 a month between two units plus garage rental. So, we're starting to see those things happening which is really interesting. They're not see that coming. More land assembly, so private lending.
Sarah: Awesome. Tim just one quick question, before we go onto their next thing, because you've mentioned cash on cash and there might be some people wondering, what does that mean? Can you just briefly like in one sentence, explain what that is? Cash on cash is essentially like your interest rate that with your money parked at the bank, they'll give you 1% cash on cash. In this case, if it's 8%, for example, 6%, that's basically your return. Awesome. Thank you. Quick question from Francois Lanthier, actually, and this is for Mel and Dave, how has the multi-family space doing? Can you guys briefly touch on that as well?
Dave: Yeah. I've been reading, just seeing the big urban markets and seeing how tenants get to pick their landlords. Honestly, it hasn't really changed for us in the secondary market. It's still business. As usual, the vacancies are still low.
The rents are still high. So, nothing's really changed for us. We typically have, one to zero or zero to one, sorry, vacancy rates. So, honestly that has not changed. Knock on wood, but yeah, nothing has changed.
Sarah: Okay. Awesome. All right. Cool. Next question. Obviously, tomorrow is uncertain, right? We don't really fully know what's going to happen. It's still uncertain. I was just even hearing that Quebec and Montreal is locked down. So, who knows really, truly, but what should investors be doing today to prepare for that uncertainty tomorrow? Why don't we switch it up in we'll have Tim, start.
Tim: Okay. So, you know what? I was actually falling for the chat box there. And one of the things that everybody else talked about. And then it was Carson and George and Claire spoke about asset protection and tax sheltering. And I think George said the same thing too, I think right now is the perfect time for you, everybody to be looking at it. Because I think even for us as a business, because we've been doing this for just over a decade.
We also realize that we got ourselves into a lot of equity. That's not being released at the moment. And so, sometimes it just take a little bit of restructuring to take a little bit more out of that because what I've always told other people in terms of how we run this business is obviously, every single property that we acquire has to be a viable business on its own, meaning it has to be positive cash flowing at the same time, though sometimes as we all know, if we've been doing this long enough, it doesn't always go as planned.
My analogy has always been, you guys are out in Ontario. So, I'm going to say Metro or a Starbucks even. This, every single Starbucks where this every month. Make money, not necessarily, however, as an overall corporation, they are profitable. And so, the idea is to really unlock whatever it is that you have in your equity, by reviewing it with your mortgage broker, with your accountant.
And if you need to involve your lawyer, then so be it and get those things out, so that you can start to increase the overall size of your proposed portfolio right now, so that you actually give yourself a little bit more protection by doing so. That's my opinion.
Sarah: Okay. All right. Interesting insights. Thanks for sharing. Brenda, let's go to you next.
Brenda: Mine, is a short and sweet, don't buy dumb shit. Can I say that? So, stop spending your money on dumb shit. Don't have the courier coming to your house everyday with your Amazon orders, then buying expensive items that you don't need going to the store and buying 10 pairs of new shoes or Alfonso, what's your thing? Is it shoes?
That's it, don't buy dumb shit and buy properties for long-term. I would say, right now, flipping might be a more difficult or doing duplex conversions is a little more difficult. But buy and hold, I think for a long-term is a good strategy. So, don't buy dumb shit and buy and hold.
Sarah: All right, stop buying all those shoes, Alfonso.
Alfonso: The money I save on haircuts, goes to my shoe fund. Okay. So, right on, for Dave might be blazers. For me, that's the money I save on haircuts and shoes.
Sarah: Awesome. Thanks Brenda.. Quote of the night. All right, Mel and Dave, what about you?
Dave: Yeah, honestly, we're big on cash flow buildings. We're just tightening up the rain. We have purchased some, or we're purchasing commercial real estate buildings. And that's one thing now that we're just getting ahead of it. We're stress testing ourselves. So, usually when I have, let's see, when I'm underwriting a deal like the banks. If I typically give myself a 3% vacancy for residential and let's say a five for commercial let's bump that up. Let's give ourselves that underwriting, it was five residential, seven commercial.
Mel: And the same would go with interest rates. So, just because you're getting a low interest rate today, that's awesome. That's easy. However, don't plan just for today. Plan for your long-term wealth and success and crunching the numbers. What happens? If, and when they do go up again, as it's sustainable, you buy the right ones, right? You want to make sure to buy the right properties, not just because you have to make cash flow today. But what about in five years from now? So, make sure to really do your calculations.
Dave: The piggyback, what Brenda said is to avoid doing that. If you stress test it and you're not going to buy dumb, you know what, because the buildings will make sense to you. And if the market shifts, next year, no one can see the future.
Mel: I think that's the theme for tonight, Sarah.
Sarah: Exactly. Awesome great answers. And I will say guys the other thing too, is just work with your team. If you've got a team of a mortgage broker whether it's a coach, like you guys. Lawyer and accountant have those conversations with them so that you can prepare in advance because the answer to some, for some might be, you might want to refi some of your stuff right now.
So, it gives you the opportunity to buy, should something happen, lenders change their lending criteria or whatnot, or you don't have the same income anymore. So, just prepare yourself for the ups and the downs. So, thanks so much guys. Alfonso takes it on.
Alfonso: Yeah, absolutely. And I want to go to this next question. Let's start off with Tim again, because I know with your background of coaching different students that you do and Mel and Dave as well. What are some of the best real estate strategies for today's market now? That's a big question about a specific market. So, a lot, what we're seeing is, multiple offers, hot markets, that's what we heard.
So, what are some of the best strategies in say that hot market where, there are the multiple offers or it's oh, buy this property. It's going to be the last one for sale ever. So, how do you still navigate the waters and get through that? So, we'll go to Tim.
Tim: I'll speak to both Lower Mainland and the Edmonton market right now. Funny enough, the lease option RTO near and dear to our hearts is actually picking it up. Because again, people are like what Claire is saying. They're all learning to put money aside. And they're looking at prices coming down a little bit and they really want to make sure that they can get into it.
That strategy, all of a sudden has actually really come up quite a bit over the last little bit and for ourselves, or the very first time in our entire career rationally looking into large industrial units in Richmond, BC. So, that's a very hot market right now, but those kinds of things, and, we're learning as we go as well ourselves. So, those are the two things that I can speak to at the most.
Alfonso: Awesome. Finally, people are listening. You should own your own property, right? Learn about that. And Brenda, I want to go to you in terms of the best real estate strategy. I know your team, you guys work with a lot of investors. You said a lot of those, bungalows are coming on the market, the boomers are leaving the right time to freshen it up and take off the vinyl flooring and put in some nice stuff, right? Not the linoleum. So, what type of strategy do you suggest in that KWC Brantford, Paris market that you were discussing?
Brenda: The two that I would suggest are kind of Mary and that is duplex conversions. If you can find them, pick up some bungalows if you can, and duplex those hard to find, but smart and then buy and hold long-term buy and hold is the way to go, I think right now.
Alfonso: Yeah, it's more of a longevity play. Turn those into multiple units. Get some renters. Yes, absolutely. Awesome. Okay. And so, now Mel and Dave, again, you guys are in Northern Ontario, you guys are in front of bigger buildings every day or week that I see you guys on social media, they're buying up the whole city, right? So, I'm gonna assume your strategy, but I'll let you answer. What strategies do you recommend in this market?
Mel: Yeah. And Dave and I, we specialize in buying multi-family properties, using our own money and no joint venture partners and a great strategy right now is owner financing. So, we've been doing a lot of owner financing and the reason it works is because right now, is that now more than ever is because in a hot market where deals are overbidding are going quickly. It gives you the opportunity to have control of the deal and make it work as well, where you were finding a lot of off-market deals and it has to do as well with the whole just as someone mentioned earlier with selling, moving into condos and all that, but same thing people who own the property for years now, they may want to liquefy their portfolio.
A lot of people are wanting to sell their property. They might not be listed yet to find lots of owner-finance deals. Where again, we're not putting any of our own money. And we're able to find those underperforming ones as well, where we can force you appreciation. So, we're not counting on appreciation in case it doesn't move or it decreases because we'll be able to force it.
Dave: The other thing is under-performing buildings. If you can find something that, and we love. I love under-performing buildings because you can lift them. So, if you find an underperforming building right now, it's still cash flows. You might not be looking to refinance it just yet. If the market takes a dip, but it's underperforming, the tenants will eventually turn over.
You can do a little bit of work, get the rents up, which means it just keeps making more and more cash flow. So, underperforming buildings to me at this time, whether you need to wait for a refinance or. Yeah, like I said, I love underperforming buildings.
Alfonso: Great advice. And I just want all the attendees to turn up the volume and listen to this because I got a max volume and I heard Tim say, lease options, rent to own industrial buildings. I heard Brenda say, duplex conversions, long-term holds, I heard Mel and Dave, talk about multi unit buildings and under-performing buildings.
That covers a lot of strategies, right? So, there's not one way to go about it. There's plenty of different ways. Plenty of people have walked that path and done different strategies. And it's all in the same market guys. You guys have to take that and get the rates and really pick one or two and really go deep on it. Learn and follow from the best that are doing it. And don't take well, you can't get a good real estate deal there.
That's like saying the weather in Canada today was bad. That doesn't mean anything. Tim said it was 22 in Edmonton. Crazy, blame COVID but sorry, I just wanted to make sure that was a point that everybody heard about. So, go ahead.
Sarah: Yeah, absolutely. We do have some questions from the audience. And audience, if you're listening to this REITE club nation, if you select all attendees, once Brenda and Mel and Dave and Tim are no longer on the panel, they'll be able to see your questions. So, if you just select panelists, they will not be able to see it. But there's been a couple things come through and I just want to ask if somebody does have the smaller amount of money, let's just say $50,000. Maybe not enough to necessarily buy a house while it depends on what market.
Is it a good idea to do it like a trust, like a real estate trust, like a REIT, what's your take? Maybe Tim, we’ll ask you that question. What's your take on the reader as some kind of trust?
Tim: Great. So, I'm forever biased. I like to have a bit more control over my own money and I'm biased in the sense that I think education definitely is key because our entire process is goal-driven. So, once we figure out what your financial goal is, and then we'll figure out the right strategies, the right markets for you to go into as well. And so, for me, I personally do not park my money. That's a lot of you guys know. And I would say that, what, speak to a mentor, speak to a coach depending on the market that you're really looking at and start from there, invest in the greatest income generating asset and that is you.
Sarah: Absolutely, Mel and Dave, can you briefly talk about what an underperforming asset is? Because essentially that's the core of what you do to really be able to do successfully.
Dave: When I hear someone, oh, I only have 50 K. You have 50 K? That is awesome. And to me, 50 K spread the love, right? If you can find creative financing, owner financing, other people's money that 50 K can be spread throughout. Let's say three, four deals that can be strictly your closing costs like legal fees and land transfer.
If you can get right, if you can find those contractual agreements, promissory notes, vendor take back, seller financing, owner financing, and then you find an institution like a credit union or a mic or other things like that allow you to have creative financing, a second mortgage behind you.
That's 50 K. You can buy four buildings with it, right? Because it's illegal in your land transfer. So, when people come to us, I only have 50 K, I'm like you have two to three, maybe four buildings in your wheelhouse with that.
Mel: I guess, it's a little bit of passion that underperforms, it's when you buy a property where you know that it's not performing at its fullest and that it can be based on different things. So, it can definitely be a little bit of TLC like countertops or flooring and paint. That's one way to increase its value. It can absolutely what we live doing, is finding underperforming when it comes to rent. For example, we had six bucks and a lot of the two beds or three bedrooms. Getting rented for about a thousand, $1,100 and we're able to increase it to $1,500, $1,600. So, it's a huge increase just because it was underperforming. We didn't have to put money into it. So, it's a really nice, easy way to get a lift.
Sarah: Awesome. Thanks for adding that brand in your perspective, if somebody has a smaller amount of money, what's the best thing that they can do with it? Do you think it's a reader, a trust, or do you think it's something different?
Brenda: I agree with Mel there. I would recommend that they find a way to use it as private money or lend towards a joint venture situation. That's what I would do with it.
Sarah: Okay. Awesome. Great advice guys. Okay. So, last question for each of you in 20 to 30 seconds, as you answer, what's the one key takeaway that you would like to leave us with or, an action item. It could be an action item as well. Mel and Dave, let's start with you.
Mel: I would say pick a lane, right? There's tons of different strategies and do one that feels right for you or that you feel is going to work for you. Pick a lane, don't try to do everything. So, try to get really good at one thing. And then if you want to explore, maybe you can pick a lane, absolutely find a mentor or somebody to help you coach to reduce the amount of mistakes, expedite your growth. And I'm probably not giving you much.
Dave: I'm just going to say Alfonso, was bang on, we're covering the entire spectrum tonight. So, everything seems to be working in real estate. So, pick which one works for you.
Sarah: Amazing. Awesome. Tim, what about you?
Tim: So, almost piggybacking on it, I always call it a two by two example, which is two strategies in two different markets. And so, what was saying? Really figure out which strategy kind of resonates with you, value wise, and then we can work the rest of it out. So, once you get engaged with a coach or a mentor or whatever it is, maybe you keep coming to these meetings at the REITE club. You're going to learn. And just pick one that resonates with you the most and do your due diligence on at least two markets that you want to apply to because that in itself, once again provides protection.
Sarah: Great advice, Brenda, finally left.
Brenda: I would have said both what they commented on, but I'm going to go back to find a good realtor in your area that specializes in your area that knows their stuff that works with investment properties and investors. But I'm also just going to go back to there's going to be a flood, in my opinion, a flood of boomers, houses Boomer's houses. Once they start checking out and they already are, and I didn't mean checking out, but moving or relocating there's going to be a flood of those on the market.
The boomer population is huge and they are leaving their homes. Don't buy dumb shit. I'm going back to that and saving that money because there's going to be a ton of opportunities on the market, a ton. And there's plenty for everyone. If you think about the size of the population, that's about to check out of their homes, a ton of opportunities. Don't buy dumb shit, save your money.
Sarah: That's awesome. All right. Thank you. Brenda, Mel, Dave, Tim, for being on the panel, guys, reach out to these experts. We'll have their email as well. And thank you so much for providing your insights. There's always going to be changes in the markets. It's just going to be important to have realtors, coaches and other investors on your team as well, to help you scale and to get to your goals.
So, Alfonso, what was your main takeaway from tonight? This panel so far.
Alfonso: Yeah. You know what? I think it's like the calm during the storm. That's what I've taken away is that it looks like Mel and Dave, Tim, Brenda, they're continuing on, they're staying the course. They're finding their ways. They're being creative, looking at what the possible outcomes of everybody walking away or scared or moving out of their homes and seeing that as a problem. They're seeing that as an opportunity, so, I think really staying the course and these are experts, Tim said over a decade, Mel and Dave, a very long time, right? Brenda has been in the business for a significant amount of time and they're staying the course.
They're not running away. And all of a sudden out of the starting to make masks or something like that, there's staying with real estate. They're going to find a way to be creative. They're going to get there. So, how about you, Sarah?
Sarah: Yeah. I think just to add to that, it's always a bit about the long-term game, right? And you can see that the ones that have been in the game for awhile, even you and me, like we're not panic selling everything. If stuff happens to the market and all of a sudden, things do shit. Because we were strategic in how we invested, we'll be okay.
That's always, what you want to think of is what's the long-term strategy and what can sustain. The ups and downs. And I will say that these three experts they've been in the game for a while. They help with investors, scale up as well, and they've done a great job scaling themselves. Guys, thank you so much for being on the panel.
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