Sarah Larbi: REITE Club Nation, welcome back. I'm Sarah Larbi. I am here today with Alfonso Salemi and we've got some awesome things happening and we also have a great interview coming up with Jon from Blackjack Contracting.
We're gonna talk about how to find a great contractor, how to price out some different parts of the property, and some duplex conversions. We talk a lot about the whole renovation process. So my favorite strategy, the BRRRR strategy. The Reno piece is sometimes the hardest to find and to get right. So I'm really excited about today.
Alfonso Salemi: This interview's really great cause it's my least favorite part of life in general, like renovations and repairs and all that kinda stuff. Like I'm great at demo, I'm a wrecking ball when it comes to demo, but, Putting it all back together and making it look good in a timely fashion, cost effective way, all the things that you need to do.
Jon's a good interview. I know Sarah, you've worked with John and you've run, oh geez, probably like at least a good dozen or so properties.
Sarah Larbi: Yeah, I've done it both ways. I've done it where I've hired a contractor like Jon. To do it. And I've done it where I was the contractor and I was managing the trades. And I'll tell you, one takes a lot more time than the other, and one takes a lot less money than the other. So you have to weigh the pros and cons to both and how much time and versus money that you have.
I will tell you, Jon has a great reputation in the industry. He does a great job. He's very well versed with working with investors. That's all he does is work with investors and he's honest. And I think that's just important to be able to work with somebody on your team.
A good contractor is going to help you. I can tell you, there's nightmare stories. I even have nightmare stories of having the wrong trades people or the wrong people that I had to fire that did horrible renos back in the day when I first got started. So it is important to find something that's somebody that is able to do it, keep, will keep his word, and get it done on time and on budget and, as well. So I'm excited for this podcast. Alfonso, what do you say? Shall we press, play and bring Jon in?
Alfonso Salemi: Let's do it. Let's get to the podcast. All right. Hey, welcome to the show, Jon Tenbrinke. Thanks so much for joining us today and thanks for being an amazing supporter of the REITE Club.
For those of you in the REITE Club Nation that haven't had the chance to meet with or work with Jon, Jon gives us a little bit of a background so that our REITE community can get to know you a little bit better.
Jon Tenbrinke: Thanks for having me on. It's really exciting. My name's Jon. I'm the owner of Blackjack Contractor and I also own the TNL Wiring Pro. So I started out as an electrical contractor and merged into becoming a general contractor. Focusing originally on basement suites and haven't stopped. We've done 116 so far and have 19 on the go, and we're now expanding from well into London. So everything's going really well and I really enjoy working with the people that support the REITE club.
Sarah Larbi: That's awesome. Now, sorry, did I hear 116 projects that you've done? Sweet conversions?
Jon Tenbrinke: Sweet conversion. That's right.
Sarah Larbi: Awesome. So that's really good because I wanna talk about this because you are one of the contractors that I know, there's not that many, but you're strictly working with investors, for investors and you're able to analyze the numbers, understand what an ARV is, if they're looking for certain, ARV, you're not gonna over renovate. So let me ask you this then. First and foremost, how long have you been in business? And I know you were an electrician before, but can you just briefly talk about that?
Jon Tenbrinke: Yeah, we started blackjack in August of 2017. I was actually doing electrical work for another guy like myself, working for the real estate investors in the basement suite. So I had done 50 or 60 legal second suites on the electrical side. And the gentleman that I was working for became a friend, but we always made fun cause the jobs were always such a messy gong show.
I sat down on that day and said, I bet you I could do it better. That's why we have a gambling name and Ever since we haven't stopped. And so it's been just over three years and it's been a good ride and I keep looking forward to more.
Sarah Larbi: You actually have the best business cards. It's actually like a poker chip that is like the coolest thing I've ever seen. Love it. So I wanna go back to my question then. How is the difference working with investors versus a regular homeowner?
Jon Tenbrinke: You know what? For a seasoned investor compared to a homeowner, it's the best thing about it's, there's absolutely no emotions involved with working for real estate investors, it's business, it's money, it's numbers, it has to make sense, and it has to be of good value.
Where a homeowner, it's all about emotional decisions. Cause they're gonna live there and it should be more emotional. So when you get in with a newer investor, you'll fight a little bit of the emotions, fight a little bit of the pretty stuff versus the important stuff. But usually the numbers will take back over and it's all a business decision.
It's all about running the numbers on your deal. And so we try to guide them in the right direction that sometimes it's better to have a new furnace than it is to have courts, countertops, that type thing. And most will understand that. So it's telling you the truth, that's why I do it. I love working with real estate investors cause it's simple, it's easy to understand.
There's no guessing how they're feeling. There's no husbands and wives fighting about tile fixing. It's strictly business. And that's why I choose to do it this way and don't plan on changing ever.
Alfonso Salemi: I would assume that one of the big pluses or advantages is that you're working on like job sites, and I'm using air quotes for those that are listening, like job sites versus somebody's home, right? Where they're shimming by you, like maybe using a table saw to get something out of the fridge, versus now you almost have a clean canvas or creating that clean canvas for a lot of those investors.
Jon Tenbrinke: Yeah, it's great cause usually we're getting the properties right after they're purchased. So it's pretty much a blank canvas. It's empty. We all have tenants, right? So sometimes you're dealing with existing tenants and that can make a project a lot more challenging. We're dealing with that couple right now, especially during covid times cause it's been a challenge for landlords to get rid of our evicted tenants even for renovation purposes.
It's been a little bit more challenging this year, but normally it's a blank slate and it's really nice cause you can. You can see it, you get the homeowners pack close on it, day one, and we're renovating day two, so it's a lot of fun.
Alfonso Salemi: Yeah. So when you, and you said you, you're working with, with your investor partners? The clients pretty much, once they move in. So at what point, a lot of our investors, we always focus, we'll talk about specifically the BRRRR we have Sarah here to make sure that we're talking about it correctly. But obviously your part is the renovation. Part of that BRRRR, right?
Long before you're getting to that renovation, you're trying to find the property, you're trying to make sure the numbers work, you get the rents in those areas. At what point? Does that investor engage with you to say, Hey, I'm gonna eventually find one, or I'm gonna find one. Like, how much lead time?
Again, this is all different based on your business and other people's timelines as well too. But when should they start engaging you or getting at least some ideas on numbers on if it's a $50,000 reno or a $200,000 reno.
Jon Tenbrinke: Early as possible. Sometimes we'll be part of the shopping process. I have some, I have a really good customer that's a REITE club follower and member. That the last four duplexes he bought, he never saw before they closed. We worked with the realtor and, I go in there with her, she makes sure the numbers work, I make sure what the value's going to be, and then so I can, they can go in educated to their bidding process, right?
It's been really good. And then, some people will bring me in, on home inspection day, which is great because you still got that chance to get out. If I see something or the numbers aren't going to work, I've had sometimes we get in late to the game, but you know what as an investor, the earlier that you can get your team in there to analyze it and at least we'll tell you something you didn't see.
A lot of times I'll do the home inspection for the client just because I'm gonna be doing the work anyway, so if there's something I'm going to be changing, it doesn't really matter if it's bad on the home inspection. So we kind of work that way and, but my advice as early as possible.
Sarah Larbi: Absolutely. I think in this market, because of the house prices like it, it's probably more and more important. Like, when I first started, I was able to BRRRR singles, they're hard now. They're hard because with the, just the single rents, you may not have cash flow anymore Back in the day you used to be able to. So I think, the strategy now with burring is going to be doing conversions of some kind, right?
Or you can get lucky and just buy a duplex that's already done and hopefully vacant. But I think that's the wave of the future. Now if we're burying is we're gonna be burring singles to duplexes or some, something like that, are you able to share so when you go into some properties to, to give a quote what are some of the things that you look for in order to see like what makes sense to do.
Jon Tenbrinke: If we're focusing on a conversion, for example, what I'm really concerned about when I go see the property would be like the MEChA, the existing electrical, mechanical, and plumbing, because those are the big ticket items. Those are the things that are gonna really drive up the price of your Reno, if they're not good.
Most of the other stuff's not as big of a deal. But if I'm going in, I'm looking at window conditions because there are natural lightning requirements for a conversion. Say it's a basement, we have to have 5% in the living room, and two and a half percent in the bedroom. So that's key, right? If you have a basement that's got 50 year old windows, we're gonna have to replace those.
That's a five, $6,000 item, right? So we're trying to analyze what's gonna cost you the most money. Most of the construction's pretty straightforward. It's those things that can really take a price from a reasonable budget. A profitable budget to an overblown budget. So those are my key items. I'll, usually I've done this so many times now that I'll, I can throw out the layout too to make sure it's gonna be a nice basement if there's nothing in there until the designer gets there and makes blueprints.
That's really nice to have on your team if you could have somebody like that because it could save you a lot of headaches and a lot of the money in the beginning and it can throw in a lot of good ideas. I'm looking at just, for example, we're looking, we're working on one in Welland right now, that they came in and designed something and I completely changed it cause I did the one across the street.
I knew I would work there and, but if that's why it's nice to have that experience on your side, especially with the conversions, like renovations in general. There's some, not complicated things, but specialty items. It's nice to have an experienced person. I wouldn't on my own unless, I wouldn't wanna bring a plumber that's in first year. So it's, the experience does say something and That's where I would go with that.
Sarah Larbi: Awesome. Now, when you're looking and you're giving quotes as an example, like what are, so like working with investors, you obviously work in different markets, but what are some things that you suggest that they don't cheap out on versus some things that they can maybe cut out or buy, less expensive versions of?
Jon Tenbrinke: I'm biased, I'll tell you that right now because I'm an electrician obviously. But I care about what's behind the mirror when I see on the walls, to be honest with you. So the stuff that's in the walls, AK plumbing, electrical, HVAC insulation, stuff that you can't really change later without tearing all your apart about is what I care about and what I recommend the most.
A countertop can be changed. A sink can be changed, cabinets can be changed, but the wiring, plumbing, and HVAC's are really expensive and really hard to change. So if you're looking at a property and you really wanna do all this pretty stuff, cause you think it's gonna get you a better ARV, but if you can do that on your next tenant cycle turnover and make sure the major stuff's fixed. Now it's gonna save you a lot of money next time. And that's what I try to promote the most.
Alfonso Salemi: With the things that are constantly evolving, changing, like one, acquiring the property, finding that, that seems to be taking a lot longer, a lot more competitive and having to be more creative. Finding those off market opportunities and those types of things and getting that. But what are the things that are taking the longest right now? From your side of things that, again, investors can anticipate, that to say, okay, in my, on average it was two weeks before and now it's four or things that we can do that will get you in there with the hit the ground running, right? So that you're not reverting back.
Jon Tenbrinke: What if the day that you put the offer in and you take an accepted offer as soon as possible, I'd have your drawings person in your designer, if you're looking for that team member, there's a lot of great ones in the right cup alone, but sometimes your contractor will have one, sometimes your realtor will have one or there's lots of resources.
As soon as possible, have your designer in, because a good designer usually takes two or three weeks to produce a set of blueprints, right? And then we have to go to the city. Three years ago we started this. It takes two weeks in the city. The fastest one we ever got was three days.
Now in some cities, the minimum's three weeks, and then we're seeing this summer, I've seen eight weeks for duplex permits. In Hamilton, for example, which has been a really slow year. So blueprints are the first one and key to the project. Even if you're, and if you're just doing a regular re and you're not getting into this, like for Windows, I used to be able to get Windows in two weeks every Thursday.
Right now I'm waiting about nine weeks. Simple things like IKEA kitchens used to be able to walk to the store in Burlington and buy all the kitchens you want now. If they have some stuff, they don't have others, you're waiting in line. You're waiting for the truck on the day of the truck because you don't know how fast people are gonna go.
Material and then everybody knows the price of materials this year, especially two by fours like decking with this material this year was. Like a pot of gold, it's slightly improved, but I can see that being bad again in the coming spring. So everything now is about pre-planning and ordering.
As soon as you can, planning as soon as you can, getting your drawings and permits done as soon as you can. Even if you're closing on a house three months from now. I would recommend getting that done because it's gonna make it, at least when you come closing, you'll be ready to go.
Sarah Larbi: Do you recommend, cause I know there's like appliance issues. Like what? So what do you recommend that we stock up on, to get ready for a basement conversion before it actually starts. If, let's just say we've got a two month closing window.
Jon Tenbrinke: If you had a two month closing window, honestly as you brought it up, appliances, because it used to be able to get seven, two weeks for a set of appliances. I ordered one seven weeks ago. I still don't have it. And I'm ordering investor grade appliances. I'm not ordering, not Taj Als here. So when the project's closing, getting appliances ordered is a good one.
If you have windows to do, get those in as soon as possible. Lumber is not so bad, it really isn't drywall insulation, it's all pretty standard. But another thing to consider this year is this has been the busiest construction year in the record period. Hamilton, even with the Covid, the building permits were over a billion dollars in Hamilton alone this year. And construction value.
Tradespeople are booked, solid contractors are booked solid. So don't wait until two weeks before your project's about to start looking for a contractor. Look from day one. And if you're gonna self-manage the project, which is a great way to save money, if you have the time, you need to be booking trades weeks, months in advance because everybody is busy this year.
Alfonso Salemi: You know what and this is why maybe a few months back I wouldn't have been able to relate as much going through an actual duplex conversion myself and seeing, luckily just right before. Or right at the beginning of that Covid kind of seeing like that, it's almost like an orchestra, right?
Hitting the right notes at the right time. Having those right people after one after the other. And now people order appliances as soon as you close and then have your drawing. So it's a really mixed smash and really jumbled things up. So it is even more important to work with the professionals that it's not even so important that you know how it was done.
Now what are you doing? To currently adapt, right? And yeah, so I guess maybe here's a common question or maybe not a common question, but what's a common mistake that a lot of investors make that you're like, oh, I wish they just wouldn't do that. I know we talked about the emotional and just the logical side of things, but what's, whether it's the conversions or construction, what are some common mistakes investors do and make.
Jon Tenbrinke: A couple things. One is underestimating what something's going to take because they didn't really get the advice upfront. So I've seen people buy houses under the assumption that renovations are worth $40,000. I saw this last week that it was $40,000 based on bad advice.
Where it was over a hundred was the real number. So that's pretty scary, especially when you're analyzing a property. That kind of difference. And another thing is overdoing a renovation. I see a lot. I'm doing one right now. Awesome. Awesome people. But they went a little gung-ho and demoed themselves and they just went too far.
And now we're talking about a large scale renovation that didn't need to be so large scale renovation. And so there is such a thing as overrunning, even for me. So that's a lot of mistakes I see regularly.
Sarah Larbi: You don't wanna be cleaning up that stuff after the fact. It's gonna be very expensive. Get the right people on your team to start with. It's gonna save you a lot of money. Can you be able to share roughly? Okay. We go into a unit and I know the one thing that is awesome with you is you can come out and help as well, and you can do the video calls with investors, which is also great.
But what are some things like, let's just say they go see a bungalow. And they go to the basement and it's just a blank slate. What are some of the things that they should say, okay, this is gonna cost roughly this, these are the big ticket items. This is gonna cost roughly this.
Cause I think the average price of a conversion is anywhere between, depending on if you're doing it upstairs, 80 to one 20 potentially plus is, give or take. But what are some of the big items that we're like, okay, this is gonna be x. Roughly this is gonna be X and they can add it in their minds.
Jon Tenbrinke: Again the general construction costs are relatively thin, but it's back to that. Electrical, plumbing, HVAC windows type thing, right? Those are all big tech labs. So say you need a new furnace, for example, that could be pre covid. You could get one for about $2,500. Right now, the cheapest one I can buy is about $3,500 installed, right?
Budget three to $34,000 for a furnish. A lot this is actually a good one that's undervalued. The stands becoming a bigger and bigger issue. Is your water main service coming into your house? For Hamilton, for example most of 'em were built with three eights lead lines. It was just normal, right? So for a single family that water pressure just fine, but you add a double family to it.
It's just lousy water pressure. Cities are starting to mandate that. So that's a three to $4,000 hit right there. And you're gonna have to dig up the lawn. So there's gonna be some landscaping to do, right? So that's, it's also about the little things that you don't think about after the fact, right?
You go and rewire a house, but you gotta remember you gotta fix holes and you gotta patch and paint, right? It's all additional costs. But like electrical, a hydro service, you have a hundred hydro service. That's not gonna work for a duplex conversion, right? So that's gonna be between $1,520 and $500.
If you wanna put that extra meter, add another thousand dollars on the type thing. Plumbing mostly gets redone when you do a conversion. But if you have, one thing you wanna be careful for is galvanized plumbing, right? If you gotta have a whole house, you could be looking at $5,000 to $10,000 electrical.
You get into a bungalow. A lot. They weren't Knob and Tube, it's too young for knob and tube, but there's this stuff called ungrounded wiring. And it's basically the stage afterwards and it's technically just as dangerous and most insurance companies don't like it this day. To say if you have a standard thousand foot bungalow, it's gonna cost you between $6,000 and $8,000 to get that updated before you can finish the basement because it was all wired through the basement and you can't have that anymore when you go to do a conversion. So it's all those types of things that could really add up quickly. If that answers your question.
Alfonso Salemi: You know what and the way that it just rolls off your tongue, you can just tell the experience and the knowledge. It's almost what's that movie like Robocop where you're walking into houses and you're already seeing what it can be or worthy of potential issues are.
I know for myself, I'm looking down there going, oh my God, we have to do this. And getting worried about all the different types of construction and things like that. So talk a little bit about the areas that you're primarily in and you mentioned the electrical and some of the water aligns that the cities are mandating.
What are some things that like, that shocked you or surprised you or now that maybe you're gonna, we're gonna see more based on that type of stuff? Like on, on legislating and getting the proper permits for these cities? Like again, like ceiling heights, window restrictions, what's something that's a little bit more, in vogue now?
Jon Tenbrinke: They've actually lowered the rules a lot into conversion for fire separation, which is quite surprising to the point where we're only actually obtaining a 20 minute fire separation in most of these conversions. Most of it's built for sound, which is quite surprising. What's surprising to me is some of the cities, how difficult they make it, even with the housing shortage.
I'm pretty well known for talking about St. Catherine's. St. Catherine's has some pretty ridiculous rules when it comes to zoning and how you construct these things, and the difficulty, which really drives investors outta the city. There's still lots of people doing it, but there's just thousands and thousands of people avoiding it, which is very surprising to me that they wouldn't even start to talk.
Even though we've tried to talk to 'em about it and investors have talked about it, and then places like Wellen for example, which is just an amazing place to work. And then they're allowing, and they've changed all the zoning to one, so you can pretty much have a blank slate. You wanna build a tripex, no problem.
You have, you meet the requirements, they'll let you do it. Coach housing's coming in. So what's really been surprising to me over the last few years is how the different bylaws affect. Real estate investors and how important those are. Like I'd say that's your number one key to going into looking for a property, is working with an agent or working with somebody that understands the local bylaws because it could make or break your project.
That's something that when I go into a new area, I gotta learn by myself. Cause that's something that we try to coach our clients on. We've been pretty since we started out in St. Catharines, which is very difficult. So I think that's made it easier for us because everywhere else just seems easy to us.
It really is once you get the system down, I gotta be honest, it's not rocket science. It's just building the system to do this. But again, to answer your question, I think that's surprising to me is how difficult each city can be. These projects or how easy they can make these projects for and when the what, especially when they want real estate investment, and welcomed it.
They said, please. And it's really transformed the city. In the last year and a half, I've seen the values go up 150,000 on a bungalow, which is just incredible. Or I've seen St. Catherine's actually become less valuable than Welland, even though it's a gorgeous little city with right on the highway access. So that's where I come with that.
Sarah Larbi: One of the things too, I will say as you're saying that, and then just in terms of upping the value is. It's always a little bit tricky because a lot of those investors will just refinance and keep it right, so it doesn't actually click in on the actual, like comparable ARVs. So you're in a way with and as an example, like even though a lot of investors are doing really well, there's no sales. So to the extent.
Jon Tenbrinke: And selling. So we've seen, it's just amazing. We're actually seeing people purchase them for close to ARV as a duplex, and they still have to put in the construction, which I saw two weeks ago. Just for quick numbers that we, the highest we've ever seen is five 10 as a refi duplex, and people are now buying bungalows before duplexing for four 80, which is just, Incredible.
Sarah Larbi: You want your money out of those deals, not in them.
Jon Tenbrinke: Yes. I figured that one would make you panic inside.
Sarah Larbi: Oh my God. Clearly not one of my students or my deals, sometimes you're people from Toronto go and look at and then they're like, oh my God, I could buy like an entire house for half a mill. Like, why not? And then they just do it without.
Jon Tenbrinke: I see that a lot. It seems like the people from Toronto that come from 1.2 million shoeboxes, see what they can buy out here for half a million and just jump on it, even though the numbers don't quite make sense.
Sarah Larbi: That's why it's important to look at after repair values and subtract your quote from your contractor and holding costs. Then you gotta add your profit in there, and that's your purchase price, right? And if it doesn't make sense, this is why you gotta be objective as an investor, right? If it doesn't make sense, you move on. Another one will come.
Alfonso Salemi: That's how, yeah, that's how we started. It's an emotional purchase, sorry, it's not an emotional purchase, right?
We're talking about the numbers. If Jon is gonna tell you whether, it doesn't matter what you're buying the house for, he knows what his renovation costs are gonna be. More or less. And that's where you increase revenue, decrease expenses and that's how you can maximize those profits. Yeah, and make sure you account for all the coffee brought by the construction crew. Lots of coffees, they like that. So make sure you put that into the budget.
Jon Tenbrinke: It'll certainly help.
Sarah Larbi: Jon, question for you, like, when somebody's doing a conversion, how long should they estimate that it's gonna take once permits are in hand? Cause obviously all the city's to be longer or shorter.
Jon Tenbrinke: For the way we do it and based on seeing other people do it, it should be around the 90 day mark. Give or take a few days. That does not count for St. Catherine, so I know we gotta bring it up.
Sarah Larbi: Permitted, as I said, permanent hand. Permanent hand. But even in St. Catherine's permanent hand, it's not gonna take 90 days. And it's just so in Hamilton, here's a good example. Say for some reason we were to fail an inspector. The inspector wants something fixed. I could have the inspector back the next day. So that doesn't really put any hiccups in that you fix it.
You get the inspection, you move on to the next stage where St. Catherine's has seven to nine days to rebook an inspector. So you figure that one over the project. But really, if you're doing the projects well, you know what you're doing. There's no reason a conversion shouldn't take around the 90 day mark.
Now, if you're gonna go do a massive, That additional unit or the main unit, you're gonna do a massive rental. Okay, that's gonna take some more time. But if you're just gonna go strictly on a conversion, even just maybe some light rentals upstairs, it should be around that 90 day mark.
Alfonso Salemi: You mentioned, the city inspectors, you can get 'em quicker or depending on the area how it might take longer, but what are the top things that you've seen through your experiences and then maybe coming on to other jobs and other contractors ? Do you see that inspectors walk through that are really sticklers? Is it ceiling height, is it clearance? Is it windows? What are the top hits on that list?
Jon Tenbrinke: It seems like each inspector has their own kind of, thing they're really picky about. But ceiling height is important , obviously, structure. So you want you'll get in the old structures, there's a lot of stuff that should be fixed up, so you want to get to make sure of that thing cuz that they will be picky on that insulation. Obviously we wanna make sure we're meeting the values and each city's kind of got their own nuances on what they want.
For example, we all love pot lights, right? In Hamilton, for example, the inspectors recommend just doubling up the insulation above the pot lights, whereas in certain other cities, Toronto, I've seen in Toronto, I've seen in St. Catharines, you have to go and build drywall boxes for fire separation. So say Catherine's big thing is fire separation to the T hamilton's is more parking, which has really got nothing to do with construction, but that's their main thing. When the building has parking difficulties, the process is pretty easy. And I've had one inspector be really picky about insulation and then some inspectors are legally blind. Just joking.
Sarah Larbi: We're all gonna go. It sounds awesome.
Jon Tenbrinke: Yeah, I know. In Branford, we had a plumbing inspector that was picky, wanted things done a certain way, and pressure balanced all that stuff. To pick out one is difficult. I am saying this because we have so much experience. I probably go back to my early days when we first started doing them. I'm sure we had a lot more challenges that I don't remember. But if you're working with somebody that's done a few of these things, at least there's, it's really, it's on the drawings. Build it to the drawings. The inspectors are gonna be happy, right windows.
Now windows are always a major issue because you have to meet the windows, you have to have that egress, you have to have, for example, Hamilton has a rule, had adopted a rule for years that if you had direct access outside, so it was just one staircase. You couldn't, it wasn't common. You didn't need an egress window.
Because it was direct access outside, that was the way the rule was written. Nowadays, even though it's written that way, they're starting to make sure you put the expeditional egress window with that, which I agree with. Okay. I'm not arguing, but it's just, it's little things like that. So the one thing you have to be really good at when you're doing what we're doing is adapting to change and not flipping out. I have a pretty strict rule in my company, which most investors appreciate. If I give you a price, That's the price. If I screw up, I pay for it. You inspect stuff like that. Most people appreciate that.
Sarah Larbi: I respect that a lot because you hear all these horror stories about contractors being like, oh, I forgot to price this out. Or, oh, you know what? I found this and I'm not gonna eat it. And I do appreciate that. Cause I will say you're not the cheapest, but we're not gonna be, we're not getting surprises with you. Which is exactly what we want. So versus going for a quote that sounds cheaper. Let's just hope that person doesn't come back and try to be like, oh, I forgot to add this and this, or this came up. You're factoring in contingencies and like things do happen, right? Like in the construction projects.
Jon Tenbrinke: Absolutely. The honest thing is most contractors I've spent a lot of money on over the last couple years on proper contractor education, which you do not learn anywhere. And that the concept of pricing is most guys are pricing and don't have a clue how they're pricing. They're just taking numbers and guessing.
Mine's pretty scientific. I am not the cheapest contractor in the world, but I do promise to give you the best value in the world. So it's when you're working, when you're picking a contractor, If you're all about the price. Okay, that's fine. I can under, and I respect it cause I would do it in my own house all the time.
I'm not lying to you, but you have to be real careful, like getting the lowest bid. There are problems with that. And it doesn't mean that you have to go at the highest price guy either, because sometimes the guys don't want the job and they literally throw high numbers at it. I hope not to get, if they get it, oh they just made a bunch of money.
Sarah Larbi: Exactly. That's why it's important to have a good pulse on roughly what things can cost, right? If you're getting a quote for 200 grand for a basement conversion and it's a thousand square feet upstairs versus, and downstairs something's wrong.
Jon Tenbrinke: That would be nice.
Sarah Larbi: I know, right? So just, so how many projects can you actually take on at once? Because you're in a lot of cities, I know you do a lot of things. You've got a big team. Can you share a little bit about that?
Jon Tenbrinke: Right now we're doing about 19 right now. I figured where we are, we could do about 25. Effectively, we're starting to expand. I've hired a bunch of new people. I'm training a bunch of new people. We're getting project managers. The fascinating thing is that for the last three years I've been doing 16 projects at a time of basically me and my partner, and it's amazing it ever got done.
We promised to care more. It was a long day. So now we're building a scalable business, so we have more people here. So my goal is to be doing about 30 projects a quarter over the next couple years. So it's, right now I feel like 20 in each area, about 25 effectively while we're growing the team.
Alfonso Salemi: That's awesome. And you know what that's probably music to a lot of the REITE club nations ears. You are more available, having amazing people at your disposal and then under your guidance and leadership of doing those projects with all that experience. Cause you only get that experience one way guys are experiencing it and do it. Then doing it. So that's fantastic. But yeah, I think we've gone to the part of the podcast where we're gonna do our lightning round. So Jon, are you ready for the lightning round?
Jon Tenbrinke: Yes, sir.
Sarah Larbi: All right. Awesome. Question number one, Jon, what is the best advice that you have ever received from another investor or at a networking event?
Jon Tenbrinke: Keep your emotions in check. It's a business decision.
Sarah Larbi: True.
Alfonso Salemi: That's it. And that's guys that come from a contractor. They got the bad rap of hammers and all that kind of stuff. They know how to use the tools. So that's great advice. Alright, question number two. What is your favorite resource for real estate investing? And that could be anything like a book training a person, an event, your favorite resource.
Jon Tenbrinke: What I miss the most is real life networking. I've been to a lot of real estate investors and this is not because this podcast of your guys' in-person networking event is by far the best one I've ever been to. I miss the hell out of it and I look forward to it coming back soon.
Sarah Larbi: Yeah, we definitely miss it. We do have virtual networking now, as well.
Jon Tenbrinke: That's not the same. It's good, but it's not the same. I know. But you know what, it's you know what? I think the favorite one I ever had was the guy from the hockey player you guys had in a live event. What's his name? Jared Hope when you guys had Jared. He is my farm. My favorite speaker I've ever listened to in my entire life.
Sarah Larbi: Awesome. Yeah, he's great. Okay, cool. Question number three, Jon, what is the one attribute. That has made you most successful.
Jon Tenbrinke: Attributes. Stubbornness drive. But you know what? Honesty, at this point, it's going, working with people, like in business decisions. I could sell every job that I wanted to sell, right? I could just lie about the price. I could, you could do it. The other contractor, I can do it for 50, and then, oh, I forgot this, and this. I've lost a lot of jobs by telling the truth. About the price, but I'd rather not have that conversation afterwards. So been there, done that, seen it.
Sarah Larbi: It builds your reputation, right? It's important to have a good reputation in this business because if you didn't do a good job, because you work with investors, you would be done. Unfortunately, you know what it is, it's such a small industry. So it is good because you have a really good reputation and yes, you're not the cheapest, but we're not getting any surprises with you.
Jon Tenbrinke: Investors are worse than a sorority girl. So we both know that you can't screw up, right? So that's the whole thing, right? You can't screw up. And if you do, we all screw up. Don't get me wrong, but you fix it?
Sarah Larbi: Yeah, fixing it is important.
Jon Tenbrinke: You don't make it, you don't wanna make it somebody else's problem. And you do your best to help. And I think my partner and I think we spend 10 times more stress worrying about your project than you ever will. And I think that's why we're successful. I'm not saying we probably should do that forever. Our hearts are gonna fail, but that's how I think we built it. And now, We have a system to go around it. So it's been a lot of fun and I look forward to seeing what the future holds.
Alfonso Salemi: I love that. I love, I'm gonna take that quote that investors are worse than the sorority sisters. I love that. That's true. That's what it's all about. Networking, learning from others and getting others experiences. But awesome. Alright, so last question. To wrap up the lightning round on a Sunday morning, typically what are you up to? And don't say you're worrying about our projects. Maybe that's in the afternoon. But on Sunday morning what are you up to?
Jon Tenbrinke: Tell you it's your Sunday morning. I make my kids breakfast cause I usually, I I'm not get up early on Sunday. I usually get up between three and four in the morning every day of the week. On Sundays, I do not, I usually get up around eight, nine o'clock. The first thing I do is make breakfast and then I go to work.
Alfonso Salemi: Nice. That's good. How many kids have you got, Jon?
Jon Tenbrinke: I have two boys, nine and seven, and they take everything I got. I don't know how people do the multiple, more than two kids, because these guys, they try me on a good day. They're great boys. They got a new puppy in the house they're driving. That's why I built a little office inside my garage. Now I can patch peace and quiet.
Sarah Larbi: Very nice. All right. Awesome. Jon, where can the REITE Club Nation reach out if they want to connect with you, get you to quote on projects or reach out for whatever reason?
Jon Tenbrinke: You know what we got Blackjackcontractinginc.ca. We're on Facebook, Twitter, Instagram. You could find me at REI contractor on both of 'em and pretty much everywhere else.
Sarah Larbi: And the REITE club.
Jon Tenbrinke: Yeah. We're on the REITE club website too. New website. I'm just getting to learn how to use it.
Alfonso Salemi: Awesome. And then as the last question, any final last words of advice for the REITE club nation? Just keep going. Don't be afraid because you know what, the most success I've ever had is when I got over the fear of everything about this. So just jump in and do it and you're gonna take some lumps in the beginning like we all did, but once you get a little experience under your belt, it really flies from there.
Sarah Larbi: Absolutely. Jon, thank you so much for being on the show. It was a pleasure having you on.
Jon Tenbrinke: Thank you very much.
Alfonso Salemi: What a great conversation we had with Johnny is just like the way that he talks about renovations, it makes me feel calm, cause I hate that stuff right about, oh, we're gonna rip this out, knock down that wall, and that's a supporting wall and that's not to code and that makes me all nervous and get all anxious.
Having him as a calming presence, explaining, walking through the process. Yeah. Been there before. Been there. Done that 120 times. Gonna keep continuing to do that, building on more people. That's who you want to be part of your team. Those people that are gonna bring that expertise to the table. Sarah, what was your takeaway?
Sarah Larbi: Yeah, you know what, it's pretty remarkable how calm he is with all the projects going on, because I can tell you, there's definitely some stuff that happens, right? With the city, with the, so many things with all the shortages that are happening and he's just calm and he's able to work through it and, look at it as, a problem that he can solve.
And I think that's really cool. But he's got a lot of experience. He's done 116 conversions in the very short amount of time. And that's conversions, right? It's not all the projects, it's just conversions specifically. So I think if somebody's looking to do a conversion, work with somebody that's done many conversions, that would probably be my biggest takeaway cause it'll go.
So much smoother and and so much faster than having a conversion take nine months. Like you heard 'em, right? 90 days with permits in hand. Obviously some cities are slower than others. That's not necessarily the contractor's faults. That's the city itself. But if you work with someone on your team that knows how to do these, it's gonna be a lot better, especially if you're doing the BRRRR strategy or you're doing flipping or something along the lines. You need things done on time and on budget.
Alfonso Salemi: Absolutely and I'm sure the REITE Club community is full of those weekend warriors that maybe finished their own basement. But I'll challenge you, it probably took you like two, three years, right? Or longer times when you're doing that yourself. And when we're talking about real estate investing as a business, you want those key members that you know are accountable, that are gonna get those jobs. If you have a mortgage broker, you don't want them doing side stuff, other things, right? You want a professional. If you were. Just a license, right?
Like you gotta get the experts in your corner, leverage their expertise, and then you guide the ship and put all those people in the right place. And Jo n is a great example of the contractor side of it, an amazing supporter of the REITE club. We're so thankful for him being an amazing supporter, one of our right partners, and really helping a lot of the REITE club community.
Yeah, check him out on the website, thereiteclub.com on our online community. Get in touch with him, get in touch with us and guys, if you like these podcasts, if you're listening to them, we're, I think this is gonna, we're over a hundred now for sure. Not sure what episode this will be, but rate Us Review.
We wanna know what you think, what we can do more of, maybe what you don't like. And maybe some new topics as well too, outside of real estate investing as well. We're excited and encourage you guys to really give us your feedback. We love hearing it.
Sarah Larbi: Awesome. That's great, REITE club Nation. Until next time, come grow with us.
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