George Dube, Ryan Carson and Claire Drage
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 right 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
Daniel: The REITE Club does not endorse any particular attendee, participant, speaker, investment, sponsor, advertisement or anything else presented during meetings, events or on our website or social media platforms.
The REITE Club also does not guarantee the accuracy of any information presented during our events or on The REITE Club website and social media platforms.
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.
Alfonso: Awesome. All right, everybody, my name's Alfonso Salemi. I'm here with my co-founders Laurel Simmons, Daniel St. Jean and Sarah Larbi. And we are, I guess each in our own respects, experts in the fields that we invest in real estate. And about four years ago, we came together and started working diligently to put together the very best real estate investing community in Canada.
The REITE club, The Real Estate Investing Training and Education Club continues to provide practical, qualified information for those in the business of real estate investing. Our community puts the real into real estate with the good, the bad, all the tips, tricks, information lessons learned along the way. And tonight we're going to bring you the experts, the information that you need to know to grow your business. Guys, we've searched the country to find some of the very best and we're pleased and so excited to announce the panels that we have for tonight.
First, here's our lineup for tonight. Our professional services panel, Ryan Carson with Carson Law, George Dube from BDO are counted at large and Claire Drage from The Windrose Group, the amazing mortgage broker of one of our partners. So, we are also going to have an update panel with Brenda Schuiling from Brenda Schuiling Real Estate, Tim Tsai from Trust Your Talent and Mel and Dave .
We're really excited to have them on board tonight. Like I mentioned, we're going to have a little bit of a quick overview of the street tour that Elevation Realty is going to be working on. So we're going to have a quick announcement about that. And then we're going to get to our construction and renovation update with three amazing guys that are doing it day in and day out in a high level, not competing but collaborating tonight, talking about what they're seeing out there in the market and putting those things together.
Shawn Allen, Jon Tenbrinke and Ken Bekendam. So, you guys are in for a treat tonight, hang tight, and the very cool thing that we're going to try for the very first time. We're going to do some virtual networking. So, hang on tonight, once we're done with our panels and our presentations, we're going to do some networking. We're going to get everybody's faces and voices up on the screen. And yeah, we're going to share it. Without further ado, I'm going to pass it on to an amazing co-founder Laurel Simmons.
Laurel: Hey everybody. So, just pick it up before I start thinking about the questions or the chat. I just want to let you know that. I think maybe we forgot one sponsor, the REITE partner. And that was Property Pathways. See, the thing is guys, we have a lot of technical background, but sometimes what goes on between the ears needs a little bit of help.
If you have questions, we'd like you to put them in the chat. And what we would like you to put a cue in front of your question. And then if there's this specific person for whom you would like to have the question directly, just queue and then the name, and then ask your question. And if we don't get any of them again, all of your questions answered, we will answer them in the Facebook group.
If you haven't joined our Facebook group, go on over visit our facebook Group and we'll see you there. So, everyone registered tonight will be receiving a replay of today's session. And as Seth wants to say, don't forget to join us. There's a date, stay through the end and we'll do our virtual net. We'll try this once before during the summer or try it again because I know that people are really missing the connection, so don't go away.
I'm now going to introduce the professional services panel. We have Ryan Carson, who is the lawyer and founder of Carson Law. And he is very much real estate investing from. focused. George Dube, who is a BDO Canada partner and accountant specializing in real estate investing. And of course Claire Drage, The Windrose Group. She had 30 years in the industry and is the top 1% mortgage broker with her own large team of mortgage agents. So, welcome all.
Sarah: I'm really excited. Thank you, Laurel, for introducing the panel. Welcome Claire. Welcome Ryan. Welcome George to the first panel. Super excited to have you. There's lots of changes that have been happening. Obviously, we want to get from you the insights that we need to get as real estate investors or people looking to get started. So, question for the three of you.
Claire, George, Ryan, what are some of the changes that you are seeing in your business these days? So, from each of your perspectives, right? Ryan, from a legal perspective and George, from an accounting perspective and Claire from a financing perspective, what changes are you seeing? How about we start with Claire on this one.
Claire: Yeah, absolutely. I think the changes we're seeing most recently are in a number of aspects, interest rates are so low right now. And we always monitor the bond market to see where rates are going. And the bond market has sat between 0.35 and 0.36 since June. What I've seen is starting to shift is people are realizing, now these rates are here for a long time and aren't quite panicking into making a decision to make a change on their financing.
There's less, I need to get that rate today because it'll be gone tomorrow. They'll probably still be here for a while. The other thing we're finding is updates we're getting from lenders are things like 32% of Canadians that opted to defer their payments as of August the 30th, we're back on making regular payments.
In the last week, I'd say I'm seeing a little bit of a shift in some regular homeowners being unsure of what the future will hold, because of sub-issue finishing, new initiatives being launched and then going into a second wave. So, we are seeing a little bit of an uptake on people going. They're not going to go bankrupt. So, solos, your trustees aren't expecting any change in their business until at least next year, but where they've got equity, they're looking for private lending. They're looking just to be proactive.
If they are in a full lockdown for phase two, they're prepared. Just a shift in mindset, I think, because people are realizing this isn't going away anytime soon. So, I need to act now. Yeah, that's a stupid, crazy market still. And then I think just the final thing to add would be that we're seeing a lot of real estate investors that are having to compete heavily in, because obviously it's a sellers market in many markets.
Negotiating quick closings, and I'm sure Ryan is just nodding his head. Like, I got a purchase agreement on Friday to close tomorrow and there's only so many rabbits I have in my hat I can pull out. And only so many hours in the day, it's not just me that works. It's the appraisals, it's the lawyers, it's the paralegals. I'm just praying people stopped doing quick closings.
Sarah: It's not an understatement. You guys, I'm sure and I've talked to the three of you separately are working your butts off right now. Like businesses just going crazy. And by the way, if you guys are listening to this and you have follow up questions to any of the answers or different questions for any of the panelists. Please add your question and who it's for, and then we can try to add a few of them in and if not, the panelists can try to respond as they're chatting away in the chat room. Ryan, what about you, let's go to you next and see what your thoughts are in terms of the changes that you're seeing from a legal perspective.
Ryan: Yeah. Thank you so much, Sarah. And it's nice to see Claire and George today. So, good to see you guys. So, I would echo a lot of what Claire said there. The closings right now are insane. September is typically an okay month. It would probably be average for me in a normal year. This will be the busiest number of closings I've ever had in one month. I think we're almost at 175. So, we did 35 today. And to Claire's point we got a deal, I don't even know if we got it. We got it Tuesday. They burned it up today and we're closing it friday.
Sarah: That's some quick, fast closure right there.
Ryan: God, please don't. If you're listening to this, do not bank on that. That is a lot of the stars and the moon aligning because that just does not bank on that. That's an extreme. But I would still say the majority of our deals that we're getting in. Like when we get a deal in, we can normally bank on it being about like 45 days or something like that.
They're under 30, like they're 25, 20, 15. I don't know, it's probably a little bit of panic around COVID, people don't want this to go lock down again and then not have their real estate deals be able to close. I appreciate that. So, it could be that, but the good news is if there's any confidence I can give you if we work the whole time that we were in lockdown.
We pivoted, we're remote, we're banking wirelessly, we're assigning clients up to a wireless or remotely, I guess I should say, not wirelessly. But I guess that's another big change for us too, since March, since all this has been going on we've had to pivot all of our stuff's remote which I think I've probably said before with the REITE club, but in case people missed. We do all our ups with our clients through zoom or go to meetings or FaceTime or WhatsApp or some other channel if it's a specific channel they have through work or personally.
Where are you? We're doing a lot of remote stuff, which is different and interesting and exciting. And I have to admit I'm not a techie guy and it's super easy. So, if I can do it, anybody can do it. So, we're doing a lot of that and probably the most recent thing that George and I actually have teamed up on. We've been doing a couple presentations so far about this quite a few realtors and brokers. It is exciting news that realtors, not just brokers, not real estate brokers, but realtors can incorporate a personal real estate corporation.
We've been doing a huge flag that says it's officially supposed to start tomorrow that you can do that. Although that date might get a little bit moved around, but so we've been spending a lot of time doing marketing. And trying to promote that exciting opportunity for the realtor. So, if there's realtors that are listening and who are part of the REITE club, if you didn't know about it, you should call us.
Sarah: Yeah, absolutely. And the other reason too, I'm thinking why there's so many quick closes is because this market and when we bring some of the realtors on board to talk about different markets is superheated, there's multiple offers on everything. So, the cleaner, the quicker sometimes wins the business. If it's close in price. Thanks for your insights, Ryan. George, what about you? What are some of the changes that you're seeing in your business from an accounting standpoint?
George: From our side again, obviously I got a little bit of a biased view towards the tax side. So, we'll have clients coming to us and saying something to the effect of all the money that the governments are spending for COVID sooner or later, that's got to be paid at some point in time.
So, who's going to pay that? It's probably not going to be the people at the bottom of the tax. And so as business owners, investors when your votes tend to go in a particular general direction, and secondly there's far fewer of us than the alternative. Somebody doesn't care. And so how are we going to repay that?
How do we protect ourselves from really getting dinged much more heavily is even reading articles this afternoon in terms of Saskatchewan proposals and appreciating everything. But it's something that can be extrapolated to provinces and the same concept was floated federally I guess two years ago.
One is protecting that tax money. And the second is related in the sense that people are thinking there's some huge opportunities now and even perhaps bigger ones coming up. How do I get ready for that? How do I make sure I've got more money after tax to be able to acquire more properties, expand the portfolio while the time is ripe.
And as Claire was describing with interest rates, if now's not the right time, I don't know when the heck it could be so again, just some tremendous opportunities, a little bit of fear to where people are thinking, and I'm no different that what's going to happen where Serb runs out some of the tenants no longer have that cash flow, what was gonna happen to my valuation?
My clients, not that I've got that many where they've got large, multi-storey downtown type of condos or office structures. That's a little bit of a different market, but the normal properties If they're not holding their own, they're probably increasing in value significantly, particularly in some of the outside of the downtown areas, if you will, wherever downtown is.
Sarah: Yeah, absolutely. Thanks very much for the insights. Laurel, let's go to the next question.
Laurel: Okay. So, what are you recommending that investors do to prepare for the next 12 months? We all know that the last six months have been a little interesting, but it was really interesting. Today, I was on a short little Facebook live thing and some of you have listened, heard Nancy Morris speak and she made a really good point. She says guilt is for the past 'cause we're guilty about things already done yet worry is for the future because we haven't been there yet.
She said, but this focuses on the now. So, let's look at the “now” and what can we do now to prevent it. Let's not be guilty and let's not worry about it. Let's just focus on that. What can we do to prepare? So, Claire, you're up. What do you think? What can we get over?
Claire: I think it's one of the stats that we're seeing repeated a lot is that traditionally, only 2% to 3% of Canadians actually save money during the first phase of the pandemic, but actually increased over 30% of Canadians actually were saving money because there was no way to go and nowhere to spend it.
When I look at the people that were able to, I've had so many clients that never thought they could buy. That purchased their first home during the pandemic, because all of a sudden they had $10,000 in their bank account and went, holy smokes, I can't save and I can't afford a home. So, I would say that my recommendation is always look at what you've learned.
If your business as an investor was not nimble, did not have multiple exit strategies, was not prepared for a potential cash flow. Crunch, like if you didn't have a cushion, but if your tenants didn't pay, did not know whether they could have done it, they just decided not to because everyone else didn't, do you have that cushion? Do you have that backup plan?
I think we've really seen, I think maybe it was even George or Ryan said it in a previous session where, we're seeing those that, they're a bit more exposed to during this pandemic, if they were right to the limit. Maxing out credit cards, maxing out lines of credit, and then one tenant doesn't pay and they're in big dues.
I would say, looking forward, think about the lessons you've learned or the opportunities you've noticed and come into the next 12 months. Not only is it the second wave, but it's also winter. We've got that double whammy as well. So, just take this time to analyze your financing, make sure you've got that cushion, don't over leverage.
If you're not sure what any of that means, consult the professional and get an opinion on your financial health and wealth. And see if there's things you need to start doing now. Just in case the government health isn't as robust as it was in the past, because there's only so much money to go around.
Laurel: That's right. And we don't, we can print it, but that just devalues the value of everything. So, it's not like the government can just keep out any money, stacks of it. But George, I'm going to go to you speaking of money. You're the accounting guy. So, what do we do? What do we do in terms of preparing now? What's your advice?
George: I think there's a couple of aspects. So, one, and this is perhaps more true now than other times, although it's been true for gazillions of years, cash is still king. How do we protect that cash flow? And obviously my little areas help protect it from revenue, Canada. And that part is going to be crucial. One, in the sense of being able to identify in, make out, if you will, or be able to take advantage of opportunities that spring up. And then secondly, part as a buffer to make sure that we're not caught in a situation where all of a sudden we've got that row of dominoes.
The other thing we're seeing is there's a couple of unique tax remuneration strategies that we're using right now that we perceive are going to disappear shortly as a result of the government trying to raise additional funds. So, we're certainly trying as fast as we can to get as many people as possible to adopt some of those where they are looking for example to bring out larger sums of money from their corporation.
Whether those funds are being used to acquire a cottage, pay down a mortgage, enable them to reinvest, put money into another project or whatever that is, but there's a significant amount of that being done right now. And I don't actually know. I don't have any statistics on this, but my perception is that there's more people that are playing around a little bit more with succession in the state plan and trying to reevaluate where they're at and what can I be doing?
To make things easier for the next generation to make it more cost effectively, to support my church, my cancer society, whatever it is, that's important to, to the family in, in creating part of a legacy whether smaller, large and again from my perspective, all exciting things to be involved with and all have opportunities to be able to save some taxes.
That more of the funds are going towards what you're looking for as compared to how wonderful it is to pay off the deficit. And we certainly need that. It's probably not something that we should be as real estate investors trying to tackle single-handedly. Our provincial governments are doing more than enough to blame us for many of these problems, we don't need any more help.
Laurel: Yeah, that's true. And you're right, George. We don't, although we all have a duty to pay a minimum amount of checks we don't have the duty to pay the maximum of our tax. And I remember that from high school and see something I remember from high school. That's amazing, but he made some really good points about even the legal side of things. So, Ryan, I'm going to shut up, shift over to you and what's your advice for them, for people to prepare? Is it state planning?
Ryan: I mentioned it before, but I think it's important. So, I'll mention that again. I think a key thing to do right now is to take a step back and make sure you've got a really good network of professionals supporting you, for the REITE club members, be a lawyer, be an accountant, be your mortgage broker. It'll be your real estate coaches, like Sarah and Alfonso and yourself and Daniel. Get people on your side that have been doing it. And you had day in and day out as professionals so that you can focus on what you really want to focus on, which is, real estate investing.
On that point, you want to make sure you really know what your value add is that you bring, there's not just one real estate investor out there, and one lawyer and one accountant. There's thousands of us. So, you really need to know what your value add is what you bring to the table that hopefully nobody else has, or very few do.
I think, the final one is you have to be able to pivot and be flexible. Obviously, March brought around a huge requirement to be flexible and pivot as a business owner and as real estate investors. That's what we are, it's a business, whether it's your primary or secondary or tertiary business, you're a business owner and you have to be able to be flexible and pivot and one change that we saw, and this might segue to another question we're about to have.
I won't talk too much about it, but we saw quite a bit of drop in our private lenders. They pulled back on privately. Which I can understand in part why they did that. But on the flip side, it could have also been a great opportunity for somebody who is a private lender, because now there's no private lenders but there's still a huge appetite for private money or a need for it.
It's all about being flexible. And maybe you weren't in private lending before that example, maybe you always did RTOs, but all of a sudden the RTO market's saturated or there's more competition, but there's nobody over there competing against private money and you got money to lend, maybe you pivot. So, I think you gotta be flexible. You've got to know your value. You've got a great team around you. Those would be my points.
Sarah: Yeah, absolutely. So, we're going to wrap up with one last question. And in 20 to 30 seconds, if there's one thing that you do want to mention tonight that hasn't been addressed yet, or you want an action item for the REITE club nation to take on or one key takeaway, what would that be? George, we'll start with you.
George: As a realtor in Ontario, please as Ryan said, reach out to myself or Ryan, so we can start protecting your taxes because it's a heck of a hit to take right now. And then actually, I think Ryan also mentioned, and just to emphasize is as investors and whatnot, hunting down experience right now in the these times, I think that's more and more valuable and the nature of the deals that at least I'm seeing are I think much more, a little bit more sophisticated, maybe is a good way of describing it, but much more so done with experienced people in terms of that.
Inexperienced people can't do it. I don't mean it that way. However, there's a lot more comfort in that. And it's something for everybody watching to be able to emphasize your particular experiences and skill sets and to be able to demonstrate that to potential co-investors, et cetera. To me. That's going to be an enormous commodity over the next few months being able to deliver to not just co-investors quite frankly, but again, back to your church, cancer society, et cetera families, huge opportunity coming.
Sarah: Perfect. Ryan, let's go to you next.
Ryan: George, stole my thunder. I don't really have anything I had there, but I guess I would emphasize it by saying, this is a huge opportunity. If you are a real estate agent and you don't hold a broker's license, or you own a nursery, if you hold a sub broker license and you hold that because you're trying to incorporate benefits and planning, then you need to call your lawyer and your accountant, which hopefully is. And we'll help you with a PREC, a Personal Real Estate corporation, because it's just huge opportunities, tax savings, corporate planning, estate planning the sky's the limit, and this is something that they've probably been waiting for a long time. So, don't wait, do it.
Sarah: Absolutely. Awesome. Thanks Ryan.
Claire: So, I think my final comment would be don't or stop using COVID as an excuse, not to hit your why, your goals and have a plan like I haven't seen any of my investors that are any of my clients is borrowers are investors that are serious, whether it's buy-and-hold, flip or BRRRRs, COVID has not stopped them.
There are some elements that slow them down, but it's not stop them from moving forward. I hate to see too many people just use it as an excuse because I'm sorry, this could be a two year excuse. It's you're losing your baby weight, but your kid's 25 years old. It's a bit of an old excuse. So don't let, COVID be that same thing. So, what's stopping you? Do not let COVID be your excuse. Just do it.
Sarah: Amazing. Thank you so much, Claire. Thank you so much, George and Ryan. And guys Ryan and George and Claire are likely going to still be in the attendees. So, just make sure if you still have questions for them that you select all attendees so that they can get it. Thank you so much for joining the three of you.
If you do have more questions, obviously ensure that you could reach out to them as well. We are going to be posting their information, which is right here. So, you guys can send them email, reach out to them. And I hope that you enjoyed the first of a few sessions tonight and are going to also do some networking after this. So, even after the sessions are done, don't forget about the networking. Laurel, what's the key takeaway that you had?
Laurel: I think it's prepared and I love what Claire said. Don't use it as an excuse. We're certainly not. And all the people that we've been talking to, everybody's just like going ahead and yeah, things are changing a little bit and you have to shift, but I think then that goes to what George's point too about maybe more experienced people is that there's always going to be things thrown in your path.
And if you're just starting out then. They might seem a little bigger than if you're more experienced, because we all know that we're going to get sometimes huge obstacles thrown under paths. So, we either go around them or grab other people to help pull us over and whatever it is. Hey, I think it's just don't knowing excuses and working with other people. That's what I took from this. What about you, Sarah?
Sarah: Yeah, absolutely. At the end of the day, things still progress, but I will tell you, I didn't predict this crazy chaotic market that's still not stopping to this point. So, I'm actually pretty surprised with that. But one of them brought a great point where you know, where people are scared. Private lending would have been a great opportunity when everybody started retracting the money. So, you know how, it was John Campbell or somebody that used to say, when people are greedy, be fearful and when people are fearful, be greedy. At the end of the day, guys, it's about your team and these guys are strong team members. Thank you. Awesome. Oh it was Warren Buffett, thanks Alfonso.
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