With Daniel St-Jean, Jason Boccinfuso & Milena Cardinal
Daniel: As we are speaking today, our different companies have five units under construction in Niagara falls. We have reserved four in Harbor View, New Castle and five on the Hill. We are at 14 and our plan is to have 30 by the end of the year. We still have a lot to do, but then again, Jason is going to talk to us about some more opportunities coming. After Jason's done, I will also talk about some other stuff that we're going to be bringing to you folks shortly here in terms of RWA, but people ask me, either you won the lottery or like I said, right now it's 14 units and everybody wants 5, 10, 15, 20%. How do we do it?
From my point of view and Jason, we'll be talking about something else. My point of view, there are two options. How do we actually finance those deals? One is use your cash, your own cash, your equity in your house, your luck, basically, you do it. That's option number one. Some people on the call we'll be able to do that. Some people won't, some people will be able to do it for one, but they won't be able to do it for five. What do you do next? Next is what I call OPM. OPM is what we've got. I think we've acquired, over the last 12 years, $33 million worth of property. And 99% of it is OPM. OPM is the way to go.
Recently, for many of you who are on this call now, we added the opportunity to reserve some units in a project in Harbor View in New Castle. We got those four units and it took me to find the financing for that. Here's what I did. I sent an email to people in my network, not the whole network, just maybe 20 to 25 people.
The title was, which do you prefer? 14% ROI or 20% ROI? I think that got people curious enough to open the email and the deal was this. If you loan me the money so I can put the deposits on the units. I can offer you two options. One, I'll pay you 14% annual interest and I'll pay you the interest monthly. Or when we assign the units in the summer, when I get paid, I will give you back your money and I will pay you 20% annual interest. Over the weekend I found all the money I needed. Then everybody went with the 20% option because they're just going to be parking their money for six months. And why not make 20%.
Now, one person helping to do the same with his unit said, yeah, but what if people say 14%, I don't have that kind of money that I can pay every month. That's easy. Let's say you need to raise a hundred thousand dollars to deposit in your unit. Just raise $125,000 and then put $25,000 in the bank account and use that to pay those interests over the next four, five, six months.
That's how we're doing. We are using other people's money. We're borrowing money from them. We're paying a good return, but again, the 20% is going to come from the proceeds at the end. I don't have to worry about paying them any monthly interest. That's good for the cash. I'm sure there are people listening to this and going, oh my God, 20%.
I want to give you an example with numbers of what that might look like. For example, let's take in Harbor View, unit number 418, the reservation price. In other words, the price we see on the agreement of purchase and sale is $780,000. As of today on the new price list, it's $840,000. We anticipate that by July when the building is finished we can show people the unit, as opposed to just a brochure and a floor plan. We should be able to get $860,000 easily.
We're estimating that we're going to make an assignment fee of $80,000 this summer, which means don't forget we talked about this on the last call, HST. What this 80 is actually 71 gross profit plus HST. The OPM needed for this deal was $39,000 plus $10,000 for the finder's fee for Bosco properties. We're looking for $49,000. We use that money for five months, or we will use that money for five months. That's going to cost us 4,000 bucks.
Let's look at the bottom line, gross profit, $71,000 minus $10,000 referral fee, minus $4,000 cost of interest. I still have 57 grand in my bank. Anybody here thinks it's okay. Over six months to make 57 grand, I didn't have to buy anything. I did not hire a contractor. I did not qualify for a mortgage.
I did not need to deal with tenants. Basically, I just signed a piece of paper. I waited, then I'm going to use a Jason strategy to assign it. By the end of the summer, I'll have an extra 57 grand in my bank account. Everybody's said, think it's a good idea. Raise your hand. I want to show those numbers because again when people were thinking, oh my God, 20% interest, hey, get the money. The deals are so amazing. The assignment fee are going to be so substantial that you can afford to do that, and still walk away with a nice chunk of change in your bank account.
My last example here before we move over to Jason. For Niagara falls here, I recently assigned a unit that we will add to our reserve in November, 2020, and I assigned it for $200,000 over my original price, which is $177,000 plus $23,000 HST. Let's say that I would have signed that at the end of the deal in another two years. I'm looking at making $177,000 minus three years of borrowed money at 20% and I'm paying $66,000 of interest. The first thing you're going to get is $66,000 of interest. Out of $177,000 means I still have a hundred dollars in my bank account.
Think about that folks. You do one of these a year. Even though you pay a lot of interest in stuff, you still walk away with over a hundred thousand bucks per unit that you do. Come on, be generous and offer some good return. I promise you if you add a little bit of credibility with people around you, they will support you. Once they've done one and they get their money back, what will happen is the same thing that happens to me even today. I had four emails this morning about somebody who said, hey, I'm closing a deal.
Next week, I'll have $60,000. Can you use it? It's very nice when you get to the point where people actually emailed you, texted you or called you to say, I have money. Can we use it? When that happens, then you can reserve not just one unit. You can reserve 2, 3, 4, 5 in different projects and make a boatload of money. Jason, I believe you have another option for people to finance their units.
Jason: Sure, those are really great points to bring up. Just as a segue to that it's really important that it's not a pre-construction opportunity that creates the opportunity. It's being able to vet the opportunity through a lens of people who are very experienced because you can just as easily lose money. On a pre-construction opportunity if you're overpaying. It's really important to have people like yourself and the group, being able to vet the project and determine whether it's a good or bad opportunity in the first place.
As far as the other options for financing come in, one of the most common ways to do it is most people have a lot of equity in their homes and in today's day and age, where they have equity and investment properties. You could simply just have a line of credit, either temporary or more permanently added to one of those properties to pull the money forward.
You could utilize that money in order to make your deposit down on the pre-construction opportunity. Of course, you'll recapture that when you either sign it or close or resell it or whatever the cases. That's a very simple one. We're doing all kinds of those deals for people so anybody can reach out if they need assistance with bringing some of the equity forward. I call it mobilizing your trap soldiers. Your dollars that are sitting in trapped equity in your property is like having soldiers.
On a battlefield, but instead of being on a battlefield, they're sleeping behind it and behind the tent and you're waging a war to build your financial freedom for yourself and everybody around you. You need to deploy your soldiers to win that battle. We just talked about how to wake up your trapped equity and put them into the battlefield of generating additional wealth. It's pretty easy to do that. Not tremendous cost and certainly when compared to the value that you generate from doing these things.
It's a minimum, if I could say to you, hey give me 25,000, you'll get a hundred thousand in return. How many times would you do that? Of course it's the same thing. Like you just talked about. There's a cost of $25,000 or $22,000 to borrow other people's money and your situation, but you're getting $60,000 out of it. How many times did you do that? As much as you can, so that's really the easiest way to do it.
Daniel: In our conversation, I think you mentioned that you have a private lender or a group, or can you talk about that?
Jason: There's a number of people that we work with. Just like you explained where you utilize other people's money, we have groups of people who want to invest in these opportunities, but don't want to bother with the actual property itself or getting into a contract. They just simply want to supply the county. For people to use for this investment and that's certainly plentiful as well.
Daniel: In the case that you and I have discussed off-camera those people were going to lend the money, but then use the equity in your house as a security, correct?
Jason: That's right. It's a very simple process. We handle it front to back internally here and we can get people set up with that. Walk you through the process.
Daniel: For over 100 people on this call today, right now, if somebody is in that situation where they can do it themselves, or they don't have the network to whatever can be reached out to you, people who have reserved and get the process started.
Jason: That's right. Yes, for sure. I'll type in my email address here, but also anybody can ask on the chat group and we'll capture it and I'll reach out to you afterwards as well with my team. Glad to help with any of that stuff for sure.
Daniel: In other words, not having the funds to do RWA strategy is not a reason, it's an excuse because between getting a line of credit based on your equity between going OPM or going with you and your services, there is a way to finance these units, these deals.
Jason: Yes, for sure. As a matter of fact I often say the reason you don't have money available to do this is because you're not doing this. As an example, we have people in our office that joined brand new out of college or university or high school and even co-ops. And co-op student, 18 years old, just graduated high school there. They're gone into a business program at the college. They're like I still have tuition debt. I haven't done any of this stuff yet. How do I wish I had the money to invest in it? You don't need the money to invest. We'll just show you how to get it.
Daniel: Jason, you can bring in the deals. We have other deals. I'm going to talk about it here after you. And then we have a lawyer who can deal with the paperwork. We have everything in place. We now talked about financing, but the question in a lot of people's minds is okay, so I got the unit, I got the financing. They're cashing my checks, good. What is going to happen now? Between now? And when I'm assigning, walking away and I'm looking at the money's sitting in my bank account. Can you go through the ABCD of the assignment process from day one?
Jason: Yes, definitely. Day one, you have a firm contract in place already, and you've made your deposits and you're going to be the beneficial owner of that unit. You're ready to go because of the way we scrutinize and bring the investment opportunities forward. You've made money the day you've signed the contract already because we're not paying full price or overpriced for the units we're buying in the first place.
There's already a built in profit, right from the beginning, which is number one, right from the time you execute the agreement and make it firm, you could sell for a profit at any point. However, what happens is the closer you get to the finish. And people can see, touch, feel the asset that they're going to be buying your values. Exponentially larger than the profit margin, exponentially larger than it is right from day one.
There has been a lot of cases where somebody signs a contract and then they sell it later on that day. But the process would be very simple. It depends on you as an individual, what your goal is. And the further you hang on to interim occupancy, you can then set the property up and stage it, have people walk through and you can offer presentations.
You'll generate a lot more revenue then. The process would be this so unique with our program, as opposed to any other program out there, or people that do it on their own is that nobody in the history of real estate that I'm aware of has ever had the opportunity to resell their unit by advertising it publicly on MLS or otherwise, because builders always put restrictions in there saying you cannot advertise this unit out to the general public because you as a consumer are not able to set the pricing. The reason they do that is because they want to protect their own investments.
If the builder holds back units, they want to be able to set the pricing. The second thing is it protects the integrity of the whole program. Like Daniel, if you and I both buy 10 units at a pre-construction and you decide you're running on hard times and oh, I'm just going to fire, sell these and get out and you go, and you relist your unit on MLS before it closes for a hundred thousand less than where the market value. Think of what you do to the value of my unit, along the builder's unit.
What happens is, all the units that I get involved in, I negotiate a special arrangement with the builder or in the cases where we are the builder. We have a special program that allows people to go out to the public and actually in real estate for sale through us because we can control the messaging and the pricing to protect the integrity of everyone's investment. As you get closer along, we can go and expose it to the market. Of course, you're free to find a buyer along the way on your own if you want to.
It's not publicly advertised, so we don't impact everyone else's investment price. We go ahead and we relist it. We find a buyer and they fill out a simple form when they purchased it, form 150, which is the assignment of agreement of purchase and sale contract and I have that here and we can certainly avail this to everybody when the time comes right, when the time's right to do that.
Daniel: Milena has taken one of these and modified it to really meet our situation that it'll talk about afterwards.
Jason: It's critical to have the right legal team. There's real estate, there's legal, there's accounting. It's a real big team effort to do this. That's why I'm so excited about our programs because we have these experts' advice. Simply what's happening on an assignment is you're selling your contract. You're not selling the unit because you don't own the unit yet you have the right to close on the unit. You're selling your right to close on the unit.
You're selling your agreement of purchase and sale, not the actual unit. The new purchaser is going to be getting it under the same terms and conditions that you got it because they're buying your contract. However, assignment agreement of purchase and sale and monitor modified one that we have that's custom is you'll see, you'll notice here on the schedule B. It spells out how much the unit was originally purchased for what the new purchase price is. What the difference is, that's going to be received as profit for us. It's all about board. Everybody knows, but I'll tell you the people that buy, whether it's an end user, an investor, they don't care what money's in your pocket. They just care what kind of deal they got.
Often the strategy would be we would list for at, or slightly below exactly where the market would be to generate a lot more interest in feeding frenzy. As we know, we would execute that agreement at that time. Once that's been sold, we simply serve notice to the builder and we say, look we've reached an assignment agreement and when the deal closes first of all, when the deposit goes in, the original purchaser will get their deposit back and the profit, so to speak, typically comes once the unit closes. It'll happen automatically through the closing transaction.
You can explain how the legal process works that way, but it's a simple, straightforward process. It's a very clean way to do it. Documentation is simple and I say it's simple. It's simple and easy when you're dealing with the experts. If I have a toothpick it's simple and easy for my dentist to fix it, but I can't fix it myself in the auto mechanic down the street, can't fix it. Go to the trusted experts, very simple for them because we live in that world every day. It just goes from there. That's really the process.
The longer you hold on, I always recommend that during interim occupancy is a fantastic time to read. Because you actually have keys and possession of a unit, even though the title hasn't transferred, you can stage it. Take photos, take video, and you can host an open house sort of scenario and bring a number of buyers through the property to really drive up that demand and drive up that price.
Daniel: That's actually our plan, therefore Harbor View, because come on right now you drive to it, building on the construction, there's snow everywhere. There was construction equipment compared to having like you say, an open house in July when people are going. There's going to be a little bit of a sangria on the table there, and people are coming in and they're looking at it at the view.
We'll take offers and that's my plan. We're going to hold them as much as possible. And yes, for those of you who are counting money or yes, the longer you wait, the more money it's going to cost you for interest, but it might cost me an extra thousand bucks of interest and I might sell it for $25,000 more. You do the math. We're going to hold on to them until interim occupancy. All of them, that's our plan.
Jason: Exactly, and that's definitely the right strategy. Now, along the lines of this, anyone that gets involved, first of all, I don't ever talk about any project that I'm not doing myself. In other words, I would never say to you, Daniel, hey, go buy a condo unit over here. It looks pretty good. If I'm not jumping in head first and committing my money first after I do my evaluations and stuff. But to that point, one of the things that I do for everybody is to follow the leader for those of you that don't know me here. I've done this. To say I've done it hundreds of times would be a gross understatement.
What happened is, and made piles of millions of dollars doing this stuff over the last 20 years. What is very beneficial in that some people find is I just share my story very openly. I say, look, I bought these. This maximizes the revenue back from it. I just share that with everybody. If anyone's interested in following the leader, if I could be so blunt that's one option or, you could go and do whatever it is you want to do on your own. I'm just going to share my story and share the way that I'm processing each deal with various projects. I would suggest it's probably a decent strategy for those that want to follow it.
Daniel: As a good example, put your money where your mouth is. How many units are in the building and how many units will the building in Niagara falls contain when it's all finished?
Jason: 123.
Daniel: How many of those do you own?
Jason: 14.
Daniel: I have five, I have four now. But anyways, follow the leader. That means if we go somewhere and we reserve for 5, 6, 7 units, after doing all the due diligence, after reviewing all our criteria, which we have 16 now before we jump into a project, then I think it's fair and safe to say that maybe you should consider it.
Jason: Fair enough, and one other point is there's a lot of individual one-off questions about different components. Here's what I want to say on a high level, there is no situation, and there is no question that can remain unanswered or anything along the process, because we've done it so many times that I have every single angle covered everything. Like what should the amendment be to cap the closing costs? How should the mortgage financing letters go in every single component?
We've handled it A to Z. There's nothing where nobody's floating out in the wind going, oh I don't know how to do this. Every component's taken care of every single aspect for me. Just do this, then this, step by step thing. I assure you and guarantee you, there will not be a question that comes up that we don't have any answer for it.
Daniel: You know what? I liked that to bring this up. And I liked earlier when you were talking about the mechanic. Last summer we had our contractor come and cut our garage in half. We could do an office insight because we couldn't find any bookkeeper who would want to come and work because of COVID. We said we're going to build an office in the garage and they can come in directly into the garage and have access to our powder room and they don't even need to come in the house. That was amazing.
If you had asked me to do it, I would have said, okay. What's the first thing that I do here in the garage and I wouldn't know, cause I've never done it. This guy came in three days later. He just gave me the bill and he walks out and I walk into the office and say, oh my God, it's so nice. So cool to see people we've done this a hundred times. Do it just like Milena how long it took her. I don't know, an afternoon to tweak that document there and how long it's going to take her to serve everybody.
When we need the lawyer to do the paperwork. Oh my God that's so much fun to watch people know what they're doing well. What did back to your day, sending in a minute, Milena, any comment there about the actual paperwork, documentation, things like that? One question I'm going to ask you in case you don't mention it, you've done everything, but for the one that we've assigned, you have done everything to DocuSign.
Milena: Yes, we do everything virtually.
Daniel: No need to get a lawyer to come to us, whatever, everything for something like that can be done through DocuSign.
Milena: Correct and actually I wasn't in Canada for any of it.
Daniel: I know you were in Columbia and we were here and we got it all done. Tell me more about the paperwork. You tweak the original form and arrange it a little bit so that it will fit, it fit our assignment and then we've already tested it. It's working. You will be able to offer that to everybody in our group here when it's time for them.
Milena: Correct but before I say that, though there was something you said earlier, and I had a thought, you said you were talking about the two different methods. Use your own money or use other people's money. When you use other people's money, you are suggesting that in order to attract investors, make it good for them. You offer either monthly payments or you offer like a set return at the end. Sometimes these investors may be interested in using their own, like leveraging their own lines of credit or anything like that.
For them that may mean a monthly payment that they are not willing to carry themselves, but they may not need the full 20% interest on a monthly basis. Hey, I'll pay you three, 4% interest to match whatever's on your mortgage that you borrow. And then the balance at the end. That's like a low payment, usually for you as a real estate investor, but it actually covers what they need. I just thought I'd bring that up as a side thing cause I've seen a lot of people do that and I think it's a really cool strategy.
Daniel: Thank you very much for bringing this up because that's how we do all our RRSP mortgages. We pay people 12% annually, but we pay them only 4% per year. And then, because that's a requirement from CRA and at the end. When we sell the house and they get their money back, then they get a lump sum that's been added to.
Thank you very much. I'll make a note of that. I never thought of offering that to people on cash investment, but you're right. It helps them. 20% will be attractive, paying them enough every month. It covers a line of credit, meaning it's not coming out of their pocket. That's a plus, but for me, I'm only paying 4% monthly per cash flow. Wow. This is brilliant. Thank you very much.
Milena: The paperwork. Basically, the standard, I want to say a strategy for assignments that I've seen is usually someone buying a house and then assigning it to the final buyer and the assigned nor the person who bought the house in the first place who put the offer in the first place assigned. For a larger amount, of course, to the ultimate buyer and the assign are only gets paid at the time of closing of the agreement of purchase and sale.
The agreement, the standard form 150 is drafted with that in mind. I had to tweak it to fit with the way that you guys do business, which is that when you assign the agreement at the time of the assignment, not at the time of the ultimate closing or the time of the assignment is when you pass on all the liability to the new buyer. You are released from all liability as the assignor and you get your money right away, and then you just walk away and you're done with the contract. Unless you have a special condition which we can talk about some other time, but outside of a special condition like that, basically I've tweaked the agreement to fit with that.
I've also tweaked the agreement to allow for a realtor or not a realtor to handle the deposits. Depending on if there's a realtor involved in the transaction or not. Those are the salient points, another item that, because we want the assigner to be released from my liability. This is a conversation to have with Jason, is that the the idea is to have a condition on the assignment agreement that the assignment is conditional upon the builder or the seller agreeing to release the assignor from all liability under the contract, because otherwise you wasn't assigned nor you remain responsible to make sure that the deal closes.
If the person you're assigning the contract doesn't close the deal, the seller can come back and sue you the assigner for not having completed the agreement. We don't want that. We want once you've assigned it the buyer is responsible, especially since the closing may happen a lot later, if you're assigning it relatively early.
Daniel: A comment on Milena and I'll watch Jason's reaction here. However, if we're a builder and let's say I reserved the unit at 550 and I assigned it to somebody next week at 650 and then two years from now, it doesn't close. I don't think he wouldn't want. I don't think they would want to come back to me and sue me. I think he would just want to take the unit back because now we can sell it for 750. I can imagine that you would, it would not cause a big sting considering what I paid for it and when you can sell it for now .
Jason: That's right. That's most cases you're almost getting. When you get in at the front of the line or these opportunities ahead of say the general public or through a special pricing program one of the big advantages is your insurance policy to hedge against market conditions or downturn is that you're buying it at a discounted price already. You've got that cushion in there. Certainly, if somebody didn't close and they got sued or whatever, or talk about surrendering the positive. I think that would be of course, willing to comment, but that was limited to the actual financial damages that they incurred.
If you're buying at 515, it's worth 850, the builder would be happy to take it back and resell it and of course they're not subject to any damages in that case. There'll be no litigation default, but those are all good best practices. The only other thing you might look at too late, I think we probably done is you get in some cases, if the builder won't agree to release, you would get an indemnification as well from the new purchaser as well. You could look at something like that as well.
Milena: We could but the risk is that if the new buyer is not in a position to close, that it could be that they're insolvent. It would require a sign or to do all their due diligence on the assignee, which is not always something that is necessarily done. You speak very logically and I think you're right, that it's unlikely that the builder or a seller would go after the original assigner, but I have to look at the contract. I have to look at the liability. That's incurred by the documents and the downside is that the document will not protect that person.
They're the assign or the person assigning the contract from that liability, unless we specifically write it in. Unless we specifically get that release, but what I'm hoping to do, and what I've talked to Daniel about doing is whenever the REITE club has a project that they're seeking investors for or not encouraging, but presenting to investors that we know there's going to be a lot of REITE club members asking for these releases.
Once they assign it I'd like to work right at the onset with the builder or seller, send them the standard release form, get it reviewed by their lawyer so that when the assignments happen, the builder's I know what this form says. I know exactly what it is. It's not going to change. And that can be streamlined so that there's no wasted time because builders are busy.
Jason: That's a great point. Certainly, answers the question why it will be advantageous to be doing these through the REITE club versus trying to go out and do it on your own. You're not going to have any of these special provisions, and I counted the last project we did at Harbor View Grand. There was in fact 11 buyer benefits that were unique to our approach to this project versus if anyone were to walk in off the street and try and buy from anyone or including trying to buy here without running through our program, like for example, the right to resell the unit and publicly advertise it on MLS before you own, it is like it's unheard of in the industry.
We've got that number one. The other thing we have is capping the assignment cost, a typical assignment in this building there's $16,500 plus HST. We were able to secure it for 5,000 to cover the legal fees. There's a $9,500 savings right there. We're able to also accomplish the fact that we're able to have it assigned at any time. We're able to do a number of things, keep the building the developer's closing costs, we're able to gain access to units to purchase them before the general public had access to it.
These particular units and not a price very much substantially lower than what the general public would be paying at the sales office. Those are just some of the benefits that were unique to this, but it's really important to attach to experts for sure because having their paperwork handled properly throughout the process is critical. Not only from a legal liability standpoint, but to maximize the profitability.
Milena: I think too, like me, the name of the game is that once you have a potential assignee of the potential person to assign to you don't want to lose them. I don't know how much time we spent on Daniel, like drafting, redrafting, tweaking, then we sent it to another lawyer and then we did some more tweaking. I think we really perfected the document with the hope that, when someone wants to assign, it's 30 minutes, here's the contract sign, the offer, send it to the other lawyer.
Good to go. Accepted, signed by the assignee, the person that you're assigned to. And that's it like, and then your deal is solid. There's no more you're not spending hours in back and forth that not only costs a lot of money, but also risks the person walking away because, oh, I want to put my money elsewhere or they just get cold feet or whatever. You want to seal that deal.
Daniel: Jason, I have a question for you because when I mentioned whether or not a realtor would be involved with that, there will be some tweaking in the paperwork. Now, you are a realtor, you are a broker. When the time comes, if somebody wants to assign a unit and they don't want to do it themselves as a showing or doing open house or whatever, they could bring a realtor to actually assign. Could they actually hire a realtor to do that for them?
Jason: As far as I'm assigning an advertising on MLS before you actually own. They would be doing that directly through our office. The reason they would be doing that directly through our office is two-fold. The first reason and it's important for everybody is that we will control the narrative and the pricing to protect the integrity of the program. If there's a buyer that just runs out and hires any old realtor and they establish any random price before they own the unit that has a detrimental impact on the rest of the investors, because they could just run out and go, hey, I just need the money. I'm just going to go ahead and dump it and actually put it on MLS for a hundred thousand dollars less than where we all value the program.
The issue that way now is now you've taken a hundred thousand dollars profit out of my pocket, your pocket, and everyone who bought because the market becomes what that last yo-yo just sold. We have maintained the integrity of that by streamlining it. We're going to make sure that we advertise it out to the public for what the market should be, and that way it protects all the investors involved.
Milena: I love the creativity of that. I think that's absolutely brilliant because you've taken a problem, which is that the person who wants to assign can't do it and you've provided a solution that also doesn't affect the issue that it was causing to let them sell. It's a creative way of making sure everybody gets the best benefit. I love it.
Jason: It serves to protect them. The other thing is, let's face it. There you'd be hard pressed to find any other real estate agent or company that sells as many condos as we do in the first place. Not only is it a situation where you get streamlining, protect your investment and you get special access to listing and maximizing your profit. You're also getting the best team in the marketplace to do it for you. It's a win-win for everybody that way, but the end of the other thing is, that's just unheard of, like in any other random project, you would never be able to advertise and list it. That's the issue.
The builder also only agrees to this because we have the track record of integrity. I noticed that and things like the competence to deliver this because the builder imagined builders are busy. As you mentioned, they're not going to take calls from random realtors and give special programs and all these things, unless they know who they're dealing with is top notch, because at the end of the day, you're a spokesperson for their brand and the investors.
They know that it will just be handled properly. That's critical as well. It's a benefit to the builder and a benefit to the investors. It really works for everybody. That would be my caution to just run out and tie up any random property because you're not going to get those benefits. When it comes down to it at the end of the day, you're going to have a really difficult time, reassigning them. If you're just going out and buying a rent. No condo in the city of Toronto and hoping for the best.
Daniel: Jason, obviously, I can see the wheels in the mine of their listing. There's a cost to the realtor. If I do it myself, I don't have to pay a realtor. What would be the commission for a realtor? Let's say a hard review. Let's say you are assigned a unit in RBU.
Jason: It's a great point. It depends on what program we're going to be delivering and that'll be a strategic decision as we get closer to the end. But here's the thing, here's what I say about cost being only a factor in the absence of value. If I said to you, hey my cost is a thousand dollars, but you're going to get 10,000.
Here's what I do now. Here's what I do know. Those that work through on average. Typically, see 6.1% more money for their sale than if they did it with a traditional real estate agent or tried to do it themselves. If you can generate 6.1% more money, are you okay with sharing a little bit of that with us? Here's how we would do it. I would just say, as we get closer I would look at it and say, okay what is it you're asking me to do? Do you want me to go ahead and list this on MLS?
If we're going to list this on MLS and we're going to invite cooperating agents to bring their buyers and all these different things, then it would be a regular, real estate transaction and process for that, we would have preferred rates. We would have preferred programs. We haven't set that stuff yet. I don't know the reality is, but we'll be fair to everybody and it's got to make sense for everybody involved or why do it right? If my fee was what your profit is, that doesn't make any sense.
Daniel: But it all comes down to exactly what you've been saying at least four kinds already. It's about you. Yes, let's say we pay 4% just for the 500,000 that's 20,000 bucks plus. Yeah. But if you get me $40,000 more than my unit, because of the network, because of how you are going to do this, because of the open house, because everything else, who cares.
Jason: Remember the other thing too, is that I have access to the builder's list of registrations. We run around and we tie up all the available units. There's still 4,000 to 5,000 registered buyers that come in through the builder. As we get time to do the assignment, remember there's an assignment fee in there for the builder of $5,000.
If we're reassigning a hundred units, that's $500,000 today. They are more than happy to share their list of buyers and say, hey Jason, here's the list of buyers. You go ahead and talk to these 4,000 to 5,000 people. In addition to what MLS will bring in addition to what any other marketing strategy will bring in.
If a typical realtor did it, here's what they do. They put it on MLS and then they have to Cray. They find a buyer. We can put it on MLS as well, but we also have a list of 4,000 to 5,000 registered buyers for that site. We just go out and tell them the story, hey, it's coming available. Because of the supply and demand, we can generate a lot more revenue for the condo than if you were to do it on your own.
Daniel: Katherine's going to come up with some of the questions in the key question, but before we go to that very quickly or not anyway, have you got anything coming here in the next couple of months that where I can increase the number of units that have gone to the country?
Jason: I definitely do for sure. There's a series of opportunities. One of them is a New Castle on the Hill. It's on a highway to New Castle, right where the 115 very close to that. It opens up the Markham and Toronto area to the Booming area. That project will be coming online very shortly. There'll be some great opportunities there at pre-construction prices before it goes out to members of the public before anyone else even knows about it we're doing and this is a project, 223 units total.
There'd be two phases, 64 units in the first building and then 153 units in the second building. Then there's six units off to the side of a commercial property in 12 townhouses. That'll be coming up in the next few months, certainly for people to take a look at. We did have a talk with you earlier about this. I was speaking of Sharon, we do have four units available at Harbor View Grand, which is particularly the one we're talking about.
I'll speak about that one because it's 10% down instead of typical everyone's 20% and an interim occupancy closing starts happening in June or July. It's quicker versus a two to three-year hold. That's the one we're talking about, particularly so we do have four of those. If anyone's interested in picking up those units, just go ahead and drop an email to jason@boscoproperties.com. We can go ahead and send you the information on that to reserve those units.
They're the ones that Daniel you mentioned have four there. And so we do have four of those left and we do have a number of other projects coming up as well, all over the GTA Golden Horseshoe over the next coming years. Many of them were building themselves and other ones were partnering with builders through our relationship to be able to deliver the opportunity.
Daniel: Awesome. Jason the townhouses in Oshawa would be, have a timeline on that?
Jason: The town in Oshawa, we've done the roadworks already on Bloor street, Lurid Ritson. All the road work has been done there. And the construction program is running in parallel to the sale program. I anticipate sales to be sometime late summer early on that one, but we've already started construction and it is happening with or without the sales program.
Just because we know that site will sell out in a day, there's only 144 town houses, so we're not waiting. We're not waiting to get pre-sales in order to commence construction. We're starting projections already. We've done the demolition. We've ripped up the road. We put in new sewers, new roads, new curves, and we've already graded the property and construction program.
Daniel: For people who may be new to our different lunch and learn here, who are going, what does it mean selling in one day. A reminder that phase one of the New Castle on the Hill, you add 764 plus we have seven units there and we cleaned that up in an afternoon, correct?
Jason: There were 102 people that registered their interest for 70 units, certainly a lot of people wanted multiple units that we weren't able to set aside. And that formal sales program will launch in the next few months. Certainly those that get in early prices we just continue to raise prices every time. We sell 10 or so units, so it's good to get in for sure.
Daniel: Thank you Milena. Thank you Jason. Katherine. What are the top 4, 5, 6 questions in the chat?
Jason: One other quick second. If I could just jump in with one thing down, cause you asked me about this. The other opportunities you and I have been talking about are quite a bit about looking at how to become a developer. We're looking at a few situations where we're going to be inviting people to participate in the project from the beginning where we actually acquire the land, take it through, get the zone and get everything in place and then run the sales program and take it to the finish line. I think that's a great thing as well for people. When we start talking about that, we'll continue to share that information.
Daniel: And is this one of those for which the Queensland project?
Jason: I could do that. Queensland in St. Catharine's zone. We're also looking at another opportunity right now in Beaverton with that'll be a 106 detached lots, a 21 acre parcel. We're going to take that one cradle to the grave. From acquisition on the land, right through the planning process, getting it approved for the 106 lots and then taking it right through the entire process. I envisioned doing almost like a television show on it where they will fight. The entire process and we'll make that available to those in the club for them to be able to watch and learn, to see how the entire process goes from coordinating the engineers to planning, to zoning, to the strategy and all of that stuff right throughout. I'm excited about that. I'm glad we've connected on that.
Daniel: Me too, I hope it can wait till I'm back from Costa Rica. Can it wait a couple of weeks before you and I talk about it?
Jason: That's fine.
Daniel: Katherine.
Katherine: Thank you so much everybody for joining us this evening. That was fabulous information, just so that everybody is aware. This will be up in a couple of days after it's edited up on site. I have got everybody's contact information in the chat. Make sure that you please copy it and paste it yourself. I did notice that a few people had put in their own personal information and please know we don't do anything with that.
It's up to you to reach out but it was for privacy purposes, of course. And also administrative work that takes a lot of time. If you'd like to follow up with Jason, Milena or Daniele, please make sure that you copy down their information and you take the initiative and the action to connect with them. Fabulous information. We have an awful lot of questions that I do see in here and what I am going to ask Jason, if you don't mind, because I'm not too sure which ones you have answered, which ones are relevant right now.
If you wouldn't mind, just take a quick scroll up. There's a lot of scrolling. Yes, please. If you don't mind Milena,, there's a few that are in there for you. And as you're scrolling, I'm just going to give a shout out to one of our silver sponsors. That's Claire Drage from the Windrose Group. She was in our attendees this afternoon and she was able to add in a couple of comments that were absolutely excellent into our chat, with support for Milena as well as Jason and Daniele and it says, making sure to take action and don't let money be a detriment for you to take action. Please reach out to them because there is always an option to discuss and they're phenomenal with creative solutions to problems. Jason, are you finding anything?
Jason: Most of the stuff so far, we've covered them up to 1230. I'm just looking at still scrolling through.
Katherine: I had a feeling that you had covered most of them, but because I have been busy behind the scenes, I didn't want to have to double the information. Milena are you finding any questions that you need to answer?
Milena: I have a few people asking me if I can assist with creating the holding corporation in the last webinar, if you missed it, I highly recommend you watch it because it's all about the reason why you should be doing these for a corporation. Yes, absolutely. I'm working on quite a few of these right now, actually for. People looking to incorporate to and even if you've already reserved it in your personal name, there are ways of transferring it to the corporation. It is very important that you do that sooner rather than later. That's something that was brought up.
Jason: The builder asked for proof of ability to close the deal, meaning the ability to get a mortgage letter. Yes. That's typical. And I'll tell you why that happens. Why that happens is because a lender who provides the construction financing to the builder says that you can only sell the bonafide purchasers. They're going to want to see those letters. What we do is we're able to handle that internally on our own, because we do own a fairly substantial mortgage brokerage that has access to all kinds of private lenders, institutional lenders. We're able to actually handle that internally for the buyer.
You don't have to run out to a TD with a credit application or anything like that. We can just have a brief chat and issue those letters. Because we do have private lenders that will provide the mortgage for people without the big burger Merle process that you would typically see. It's no problem to have people approved to purchase these. That's pretty simple for us to handle.
Do you only get into precon condos if you get into platinum pricing? This is interesting. There's a big misconception out there. I think it's really important to talk about there's this big thing about platinum access. We see advertisements everywhere. All these different brokerages are talking about platinum access to the deals you're actually buying in round four even though you think it's first access or platinum access, as most companies are using as their, you're actually buying a round for round. Number one is the founder's club, which is the builder. We'll reserve their own units that they want to keep as well as the partners in the deal.
The second round is friends and family of the builders. You know their brother, aunt, uncle, niece, nephew, sister we'll reserve units. The third round will be VIP brokers. It'll be a broker they may have worked with in the past and repeat clients and customers round four is in effect what you normally see, mass blast emails going out saying, hey, platinum, access platinum, VIP access, click here to reserve your unit and fill out a worksheet.
If you're doing that through any number of a gazillion brokers out there, you're actually buying around four. What we do with our preconstruction, which means you're paying anywhere from 50,000 to 100,000, to sometimes 200,000 more than people bought it. The deals we bring to the table when we're facilitating it from the start deals like a New Castle on the hill, the ones in Oshawa, the townhouses and Beaverton, various other projects you're getting in right at the beginning.
We're doing special arrangements with the REITE club and we're actually picking what units we want out before we launch any of the rounds to the public or brokers or anything like that. You're way ahead of the game with our program versus when people say it's a platinum event, register. That's really important.
Daniel: Jason, just as an example, when we took the bus tour to the lot there in New Castle, We're looking at an empty field. There's not even a sign there that says coming soon, the APS we're not even written yet, so you can't get much more at the beginning then. There is a sign announcing the building and there's no legal papers. We signed a worksheet. We did give us a deposit just to say we're doing it, but come on, you can get much more at the front door.
Jason: Exactly, because once the for sale signs out and you've got your agreements and your marketing packages, that's because you're launching out to the public already, and that's a big difference for sure.
Milena: Sue asked if we've already used the forms and I can now say that yes, we have. We successfully closed the deal with them and it was great. I can also mention if you want to seek funding from your immediate circles, like not through a broker or anything like that, I can assist with those documents.
Jason: That's excellent. That's great.
Daniel: We're coming up to the hour. Two more questions.
Jason: Somebody is asking in general terms I've heard typically there's a 6% fee on assignment. The numbers we're providing are very low. Why the huge difference very simply there has to be a benefit to everybody involved. Most builders are charging huge assignment fees. This case there's a $5,000 assignment fee which is a huge benefit for people. But we pre-negotiate that on mass with the builder.
Daniel: We're good.
Milena: There was just one last question that just popped up from Sue. I think that's a question for an accountant I had and given the returns on these projects, I think even if you just have one, you'll probably find that incorporating is worth it. Even just for one project because of how much it'll save you on HST.
Daniel: I'll give my example. So far, we had 15 units reserved. We've assigned one, but we made 200,000 bucks. Imagine if I'm doing that on my personal and adding $200,000 to my personal income for the year. If I do a second one and under 200, give me a break here. Is it worth it to spend 2,000 bucks to get incorporated? Yes.
Thank you to over a hundred people here in the call today. Actually, Katherine, you want to come on and tell us about the upcoming events in the next minute or so.
Katherine: Here we go. I was scrubbing the list. Okay. Coming up, you'll find them on the website coming up very shortly. We're just getting them posted up now. We have April 1st with our focus event on Wednesday, April. Our Ontario about where we're going to be in the Windsor and London area. That's really cool because we've got the local realtors that are giving us the market updates. They're taking us around with satellite views and giving us the insider scoop as to where the best places are.
Sometimes it's from a block over. It's pretty cool. That's going to be our Ontario event taking place on Tuesday, April the 12th, our national event, which is actually our fifth anniversary. Can you believe it? Wow. Our fifth anniversary, when we started inviting people to come grow with us, boy, have they ever, and we've got some stories we're going to be sharing with you as well as what we're looking forward to in the future. Make sure to keep that on your calendar and join us on Wednesday, April the 20th.
We'll be out in Western Canada on Thursday, April the 20th. We've got “lunch and learn” with Sarah Larbi coming up on all the strategies and FAQ's that you need to know on the BRRRR strategy. That's coming up on Thursday, the 21st of April, and then we're going to, oh, my heavens in person, are you kidding me?
It's happening, so great. That's going to be in Ottawa on Tuesday, April the 26, and then stay tuned because we are going to be having some more live events that are coming up. They will be pop-ups right now. But stay tuned. There's lots coming up and don't forget to check us out at www.thereiteclub.com. Join our community. Lots to learn and it's all for you and how to customize your life.
Daniel: Thank you very much, Katherine. Thank you very much. Milena, when are you back over here?
Milena: I am flying home on the 29th next week.
Daniel: Maybe we'll see you in Ottawa then. All right. On the 26th. Thank you very much, Jason. I can't wait to get this beat, become the developer or learn how to be the developer. That's going to be awesome.
Jason: Looking forward to it.
Daniel: Thanks for your time. We know you're busy after coming back from a month-long vacation. Thanks everybody.
Milena: This was awesome. Thank you for having me.
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