Buying Properties No Money Down and No Joint Venture Partners


Daniel: Investor couple Mel and Dave. They're here to share how to buy rental property using none of your own money and without setting up joint venture partners in Canada, US and abroad. Now, Mel and Dave Dupuis are innovative real estate investors and award winning mentors who have acquired 240 doors in just a very short period of time.

When I heard what you were gonna talk about, honestly, I'm trying to find the right words here. I was very curious and very looking forward to this because in the 12 years we've been doing this. Laurel and I acquired 63 properties without using our own money. That part without using your own money, I get, but all of our deals were with joint ventures. I'm gonna shut up and I'm just gonna sit here like everybody else. And please enlighten us.

Mel: Thank you for having us and we'll actually be sharing a presentation to kinda give a visual to go along with what we're talking, but yeah, that's exactly. I'm gonna go ahead and share my screen here. But that's essentially exactly what today will be all about. We're investors. We're not the tech, yes. But there we go.

Today's gonna be all about how to buy properties. We say multifamily, but it could be for condos and different things as well. Using none of our own money, known as OPM and with no joint venture partners as well. And we'll be showing you exactly how we do that today. What is going to work? You are learning today throughout this workshop, you're gonna learn the three of the biggest mistakes investors make.

Dave: Our four secret strategies to building a seven figure multifamily real estate portfolio,

Mel: And how to build your portfolio with no money down and without sharing profits with joint venture partners with our proven formula. And it really is a proven formula. It's been trusted by over 1500 families as well. Now buying real estate gave us financial freedom to both quit our jobs in our thirties. And they were unionized jobs as well.

Dave: They were full time. I was a firefighter. Mel worked at the local college unionized golden handcuff jobs. People don't fit when you leave.

Mel: But it's definitely not because we had some special connections or money or came from rich backgrounds. If you're thinking, Hey, I didn't have, I don't have any of that. That's okay. There's definitely ways around that.

Dave: No silver spoon here.

Mel: Yeah. It was because of the OPM action system we're gonna be talking about today. That's what we used. And that's what really gave us the biggest impact as well.

Dave: That's the thing is once we realized stop trading the time for money. Oh, they are able to move that.

Mel: There we go.

Dave: Perfect. I couldn't move it. You guys saw this guy move the little toolbar for me. It wasn't by trading the time for money. You can only buy so many properties in a certain amount of time. If you're doing that, the robberies.

Mel: Now this book changed our lives. Some of you must have already read it. Rich and poor dad, although it didn't show us exactly how to do this whole creative financing strategy, it changed our mindset. First thing that we need to understand of course is how to use creative financing to really grow your portfolio.

Dave: Once that happened, right? So from 2012 to 2016, Mel and I were going to Scotia bank refinancing one property every year. In that four year span, we bought three properties. In 2017, once we realized how to do great financing, Boom, 12 properties in 12 months. There they are cool watching them.

Mel: They were all, that was six units. Of course no joint venture partners and we'll show you exactly how those strategies were applied here shortly. But before that happened or after the 12 and 12. We were in a horrific car crash. At first we never told anyone.
You won't see anything past this event about how we're buying these properties. But after almost dying on the highway, a roll over crash that we were in changed our lives. That's why we're here today. Share with you as well cause we're on a mission to change as many lives as possible.

Dave: That was actually near you guys. It's just outside of on by act.

Mel: Not everyone.

Dave: I know, I always think the entire Canada's Wonderland, whatever that's Canada, is completely different.

Mel: Okay. So who are we? Some of you may know us. We're on all social media platforms, investor me, Dave on YouTube and Instagram and all of  that. We bought over 240 units using these strategies. We're gonna go talk to real estate mentors.

Dave: Yeah. Multiple rewards books. Mel has more books than I do, cause she keeps getting away with all these women's books, which for some reason, keep leaving me out.

Mel: I know he's a little jealous about that.

Dave: Okay. Now the cool thing is that's actually from our balcony, one of our properties in Costa Rica, we've used these exact creative financing strategies in five different countries. Now Canada, US Dominican Republic, Costa Rica and Mexico. So it's doable. Not anywhere, but at least in those five ones and wherever we decide to go next.

Mel: Yes. It helps us create generational wealth for ourselves in our family. That's really what it's all about. It's being able, it's not about the money, but it's that freedom and being able to change and create memories. What's our formula to success before we get into the mistake section here? One of our formulas is successful, Dave?

Dave: I like this one. It's the triangle. Knowledge, action, and resources. If you really think about it without missing one of those, if you have the knowledge and the resources, but you're stuck on the fence, paralysis analysis and whatever, save difference.
You're gonna be stuck if you have the action, if you're willing to do stuff, but you don't have the resources, and same thing with knowledge, you guys get it. But this triangle is in our opinion. Secret results.

Mel: It's what got us started, right? Now the three major mistakes that most real estate investors make, and we'll touch on this very quickly, we can get right into the creative financing, but they think that it's only further rich and some of you may be thinking that as well, especially when it comes to creative financing or getting started getting into your first property and is absolutely not true. When we first met, we were paychecks to paychecks. But there's definitely ways around it.

Dave: That's the thing, just like Mel just said paycheck to paycheck, that was our reality. Taking every deal over time shifts, picking up different jobs, janitor, teachers.

Mel: I was working fitness classes and teaching online as well. For our local college and working full-time, but whatever your situation, and again that mindset that you can do this. We tell people who are on social assistance. People may not have. Yeah, who may not have the bad credit, the best credit as well. Or, people who are self-employed. Despite where you're at right now, there are ways around this.

Dave: You do not have to be at risk to do this. I love this story very quickly. They're actually in Oshawa. They immigrated from Jamaica back in 2017, the banks told them you can't even buy a house. With creative financing, they were able to buy I think it's 28 units now with 100%. OPM, so from renting to owning. Anyone can do this now.

Mel: Missing number two, they think they use their own money.

Dave: Which we did from 2012 to 2016. That we bought three properties.

Mel: If you're doing that, you're likely to be fine at the beginning, but you are gonna hit a roadblock. You're gonna get stuck and it's gonna be really hard. To grow your portfolio.

Dave: Without OPM, it's much solar growth. Again, this is if you want quick, not quick growth. I shouldn't say that cause there's no quick money in real estate.

Mel: It's not overnight. Of course.

Dave: Unless you're flipping and I agree with Jesus's escaping me now the mortgage broker that was talking, it's not a flipping market right now. But if you wanna scale, if you want to grow a portfolio using your own money will be much slower. There's no leveraging that, right?

If you're using your own funds, you can't utilize that OPM, that leveraging which again, going back to Rich Dad Poor Dad leveraging is the key to other people's money, good debt with no compound effect and possibly not achieving your goals on time. Especially economically when the climate, things like this happen in the economy, and you're thinking, Hey, my one property a year for the next five properties, what's gonna happen now. That's why we level.

Mel: Again, mistake, number three, not realizing that you don't know what you don't know and like it or not stop hearing that like it or not. Sometimes it's a true reality, right? We still don't know what we don't know. We still have to compose because we don't know what we don't know and you know that, and we're always gonna invest in ourselves.

You need to realize that you may not know why you don't. And hopefully today you're gonna learn a little bit about that, but we're guilty of this as well as they've mentioned, and we're focusing on the best price instead of the bigger picture. Have you ever done that? Put one in the chat if you've ever done that. Cause I've definitely, I'm putting a bunch of ones cause I was always about the price, but it's always, especially with creative financing, you wanna do this OPM. You wanna have no joint venture partners. If that's something you wanna do, you gotta think bigger picture and not solely focus on the price.

Dave: We've probably lost hundreds of thousands because we didn't know how to find off market deals. We missed some important conditions and some game changers, right? It's not a $10 mistake. It's a $10,000 mistake. We didn't know back then we could utilize someone's RRSPs TFSAs letters, right? Those registered secured funds, which was another game changer because a lot of people have those types of months.

Mel: Now I'll try to time the market. This is talking a little bit about, of course, the market, right? Trying to mark the market is a big mistake here. It's time in the market as a real estate investor. So yes, I purchased properties last year. I Purchase properties now. I'm gonna continue to purchase as well.

Cause you just wanna get on that chart. It's a pretty powerful chart. I remember my first time seeing something like this and again, we're investors here in this room, numbers don't lie. You can literally see the chart going up over time.

Dave: Just the name is escaping now. My apologies. The mortgage broker before was saying that always buy right? Always buying as a long term buying old investor. Instead of timing, it's time in a four step system, this is what we use to grow our real estate portfolio. Again, you guys, we save all the time. None of our home money, no joint venture partners.

Mel: Okay. There's essentially four different steps. The second steps were really explained, but they're all really important. We're gonna go through all of them today. The first step is well finding the right deal that really applies in any system that you would be using of course.

Dave: Okay. Being able to find the right deals, you probably will. You're going to be an investor focused agent by real estate agent. You're gonna need to find off market deals, how to find them, where to find them. You're gonna need to take emotions out of it. There's still a building to this day that I wish I could buy, but the numbers don't make sense, so I don't buy it.

It's taking that emotion out of it. Again, it's all about the numbers, not just for you, but also for the financial institutions and the actual lenders when you're showing them the deal and why they should actually invest in this right. So investor focused agents, like we mentioned now, we went the opposite on this.

We went just because they sell a lot of real estate doesn't necessarily mean that they are investor focused. Just because they have a couple of properties doesn't necessarily mean that they're investor focused or because of them or family and things like that. It does not mean that their investor focused.

Mel: Funny story on the slide. This guy is now investor focused agents, cause you just recently passed. Pretty neat. Okay. Off market deals. Definitely. It adds a real estate investor. The more deals you look at the better, of course. You wanna look at a lot of deals. That includes working with an investment focused agent.

Agents are also some off market deals and that's how we bought them. We bought 12 properties in 12 months. Probably about half of them were not listed any year. Now what about wholesale? Yes, there's definitely some great wholesale sales there. Again, all senior due diligence.

Dave: Make sure to check the columns, the wholesale, the money you made in the comps. Just make sure you double check those.

Mel: Don't be afraid to ask. How many people did you ask this week? If they know of somebody's selling a property. If you haven't yet, you might be missing out on some deals. As always, it doesn't matter if it comes from an investor focused agent, it doesn't matter if it comes from a wholesaler or off market deal, you have to make sure you're doing your due diligence.

Dave: Like I said earlier, take the emotions out of it. The building can be beautiful. It can be awesome. But if the numbers aren't great. You can't change the numbers. But you can, but you know what I'm saying?

Mel: Exactly. You always wanna make sure that it's great, when you're doing your calculation. Now it's all about the numbers. So be patient, some deals are not gonna make sense. We've had some frustrating weeks or even some months where oh, can't find a deal that makes sense what we're looking for.

All of a sudden, the next month we're looking at four or five different purchases and then they're all coming in at the same time. So again, you want, that's why you always wanna look at a lot of deals. Now use OPM. Let's go through that cause I know that this is what, the stuff that you really wanna get right into.

Dave: This is a really cool saying. I love it because problems cannot be solved with the same mindset that created.

Mel: Overnight. I'm a pretty smart guy.

Dave: Okay. If you wanna, Albert Einstein, very smart. Let's talk it up more in my lingo here. If you're like me, you can't be an investor, with a consumer mindset is how I like to break it down.

Mel: Now why do we solely own and what are the benefits? And firstly, I wanna clarify, I'm not against joint venture partners. I have many friends who are doing amazing things with joint venture partners. Why did we decide to go differently? These are some of the reasons because we can make a hundred percent of the cash flow.

You keep all the equity, the appreciation, the ownerships of where the sole ownership, where the sole decision making and as a wife to Dave here that one guys enough and that one can really pass on our portfolio as well. Very easily to, two, our three kids.

Dave: The three ways that we do that, buying the properties, right? Mel said, no money down, no joint enter partners. Number one is owner financing. So that slide from before that, that 12 properties in 12 months, and even in 29, 20 20, we bought 119 units even now with Costa Rican, that owner financing is what we love using.

Mel: That's the same as vendor take backs or Yeah, seller financing, owner financing, same difference, and there's three different ways of doing that. You can have it where the owner's gonna hold the first mortgage. So let's say they say I'm going to hold 70%, but I wanna be in the first place. Okay. That's not a hundred percent OPM.

They will explain how we do that in second here, it could be the second mortgage. That's definitely the most popular one. This is often, you know how you have to come up with that 20% or 25% down. It doesn't have to be your own funds. You can ask the owner to hold financing. And we'll explain we do that. We even hold financing as well with some properties that we've sold throughout the years.

Dave: There's about four now. . We're holding four VBS for other people.

Mel: We're investors. We wouldn't do it unless it benefited us. A hundred percent and we don't know those people either and a hundred percent financing as well where the owner holds a hundred percent financing. You're not even going to a financial institution in this case.

Dave: Now, why would anybody do this? We can talk about this again, nothing is theory here. It's all from doing it in the field. So succession planning ,succession planning is what you wanna do with the building? We purchased some buildings where the widow never wanted to own buildings.

Now this is a problem. Succession planning, selling prices. Prices are going down. And we're seeing that if again, if the deal makes sense, I'm only talking about if the deal makes sense. Some sellers are still wanting prices from six months ago, right? Or a year ago, if you have an exit strategy built in, you might be able to give them the selling price that they want, and then negotiate the terms that worked for you.

To still be able to debt service and still be able to cash flow capital gains, the money that you don't receive in the year of the sale. You can't get taxed on definitely not an accountant lawyer. Check with them. But you can spread that over, that's why we chose to do so by selling a couple buildings in the same year, by holding mortgages, we can spread the love on a capital gains, and that's why sellers do it for us and other people as well.

They make money now with those four mortgages, we're actually making passive income. In the form of mortgages in the form of interest. It's a thick mom and pops that have had rent for the last 20, 30 years. Now they have that money. They might as well hold a mortgage and make the same interest differently. They've got money coming in.

Mel: Exactly. Not everybody's gonna wanna do it, but that's why it's worth asking as well. Because people like us, the other investors as well, see the benefits in it. And now let's crunch some numbers. Here's an example here of a seven Plex and don't necessarily pay attention to the per purchase price.

Maybe thinking, Hey, this doesn't work in my city or that I would never pay that, or that's way too much, or that's not enough and what not, but it's a bigger picture of the deal here and we'll break down super quickly. We kept it very simple because we only have so little time, usually this is an hour and a half presentation. But so the purchase price is let's say $439,000.

The first mortgage was a financial institution who was open to creative financing. The second mortgage was the owner, so he was willing to hold the second mortgage of a hundred, $9,000. Now, fast forward, about two years here. Yes, we put a little bit of money into renovations, but we were cashing from day one and you're paying that mortgage again.

I'm just giving you the quick idea. So you get a visual of what's possible here. The lift once we were able to get it, reappraised that's $790,000. So the lift is the difference between the initial purchase price. And the new appraisal. This is where you force appreciation.

That's what we like calling the lift. You're literally lifting the value of the property by identifying and buying the right kind of deals that can sustain these kinds of numbers with the creative financing and all that. That's why finding deals and all that is a big part of the formula here that we show.
 What we do, we get a new first mortgage when you do that, you have to pay everybody else. We paid out the first original, the second as well. We were left with a profit of $231,000. And what's neat about that because it's a refinance, not a sale, it's a tax free transaction. We get to keep all that money.

That's really cool. Think about this. We had cash flow from day one, we didn't put any of our money into this deal. We were left with a profit of $231,000. Right now we still have the property as well. Guess what it's gonna do over time. Remember that chart, it's gonna continue to increase over time.

Dave: This one was actually on the refinance. It was CMHC insured. In 2022, like Mel said, real estate continues to increase. Now it's been appraised over a million bucks. And if you remember the numbers, I think it was 6 71. That's over $200,000 again, an increased value, right? We're not selling that over the next 20-30 years.

It's just gonna continue to increase. That's the power of real estate. This exact same scenario as actually, this one's a hundred percent finance my bad it was the same seller. He's a teacher. He sold the other one and wanted to sell this one the same year to help himself capital gains wise, he held a hundred percent financing, succession planning while helping himself with the capital gain.

Let's go over it quickly. The same thing, 312 purchase price, 312 first mortgage. After we did some repositioning rehabilitation, getting net operating income up to some minor renovations in that we were able to get a new appraisal of 580,000. We created a lift of just shy of 270,000. And then we got a new first mortgage.

This one also qualified for CMHC insured mortgages for 93. The profit was 180,000 and kind like the other one, because it was a refinance tax free transaction, with an infinite return on investment. And now in 2022. It's also been appraised over a million bucks. You guys can see the reoccurring theory.

Mel: That's another $400,000. Imagine our job after taxes. We both made good money, decent money, but after taxes, it was not as pretty as pretty. That's a huge difference, right? This is the kind of money that you can make when you know how to do it properly.

Dave: That's what it's gonna be within 20 years. Okay. Number two, OPM, RRSPs and TFSA should say registered funds, secured funds. Right now, this example here, the same as before I won't dive in, cause you guys understand the process. We actually had the seller hold the first mortgage to 200,000. And then the RRSPs was the down payment that was actually utilized from someone's RRSPs. So she actually held a second mortgage for us.

A hundred percent financed. This was an underperforming asset. The owner of her 30 years did our thing. Boom. It's been evaluated. It was ARA 500,000. And then again the same story. This one we actually saw. So we sold it for another, for 600,000. So it got evaluated 500 times. Everyone else sold it for six, and now we're actually holding a VTB on it, to help ourselves tax wise. Again, hopefully you guys are seeing the recurring theme with lifting assets. Paying people back and then making a reply in this case.

Mel: The different ways of doing so. The owner's not interested in holding financing well, that's okay. In this case it wasn't a hundred percent owner financing. That's okay. We use RRSPs to fund the rest of the deal. That's a neat thing about it, is that you can start combining. All these different ways as well. Just clarify, if somebody's thinking, oh nobody's gonna wanna pull out their RRSPs. I wouldn't want you to do that. Even. That's not what we ask the lenders to do either.

It's just transferring the funds so that way yeah, you're not paying that 40% or whatever it is. Here's just a quick example, right? So Sarah, for example, she purchased 20 units. It was within four months. And using RRSPs as well to grow her portfolio strategy. That's the thing, and I'm just showing you that, just to show them, just a young, married couple doing this. That's the thing like whatever your current situation is, there's regular people just like me and you and everybody else in the room doing these things as well.

Dave: Okay. Three promissory notes. I really like promissory notes and we'll talk about the Costa Rica deal. Because you can utilize them for so many different things.

Mel: Before you get some people may not know, just interrupt a promissory note, just to clarify, if you haven't used it essentially, it's a contractual agreement.

Dave: It sounds so make me promissory note.

Mel: That's a legal term, but yes, it's a contractual agreement. That's what they've continued.

Dave: Okay. Let's dive into this one, Costa Rica. We actually utilized the promissory note from Canada to find the down payment here and seller financing. Another one was done in Costa Rica. So if you look at this, the purchase price, this one was a, actually the balcony, the top left that's this unit.

Two bedroom condo, $325,000. The seller held or is holding $227,000. First mortgage. So we had to come up with just shy of a hundred thousand dollars anyway. Now so that's what we did. We've already promised Sarah. It all made sense that our cash flow made sense. Otherwise we wouldn't have done it.

Long story short, basically they're holding a 6% interest only mortgage on that 227, interest only for two years. Yearly it's 13,006, 20 a year. For two years, it's gonna be $27,000 in interest.

Mel: At first glance, some people might think that's how much money I'm not, but wait.

Dave: It is a lot of money. Now, the plan here, the exit strategy here. We're gonna be selling this one. We bought a couple in Costa Rica. We're gonna sell a few and then keep some and pay off the others. Now, 6% interest only. This is a balloon payment, meaning we do not make a payment at all on this until the two year loan comes up.

It's a short-term rental Airbnb VRBO we actually visited after we bought it. It's cash flowing. Very nice. Even right now, during the low season on whatever the word. In Costa Rica. So the cool thing is at the end of it, we're gonna sell this asset or we might sell one of the other three.
We'll see. And right now, currently there's other places in there, similar condos that are listed at 500 or around 5 75. So listed at 5 75 conservatively, we get $500,000. That's a lift of what? All of them, 254, that's the nice of a lift off of a condo that is completely passive.

Mel: The cool thing about what was and it's US dollars. Think about that. We're making USD money there. That's the thing. These strategies can be applied. Everywhere. And another benefit as well and shows, is that you can go and visit your property, right? So you're applying these creative financing strategies.

That's us on the left. That's my parents in the middle. And it was their 50th anniversary. This year. We gave them a trip, flight and everything for the entire month and that's them on the right, enjoying their 50th anniversary. And that's a cool thing is when you start applying these strategies, if you're ever wanting to buy something in different area we're buying five different countries as of right now, probably gonna be more throughout the years, but you're able to go in and visit them or give them to people that you want to give them to as well.

Step three. Win-win negotiations. What about paying higher interest and traditional financing? Like we said earlier when people think $27,000 in two years, yeah, it is higher interest, but you have to think of the bigger picture, right? Like that. Albert Einstein the creative again, the day version, the creative financing or.

Investor mindset versus consumer markets. Now make sure everybody wins. And we're huge on that. And again, that was some of our mistakes asking price, right? If they're holding all the financing, if the deal can sustain it, are you gonna, are you gonna try to get that last penny out of them? I probably wouldn't suggest doing so.

Cause you may end up losing the deal and if it can make you hundreds of thousands down the road, Who cares if they win as well, because guess what's gonna happen. They might have one more than prop one property. They're the owner, or if they're lending out their RSP, they might wanna lend it. They might have another pen as well.

That wants to lend it out. I'm just thinking and timing as well. Like we're coming into whatever September, you might get a deal. And that, that might only close in January because you're making it win. They might want that for tax reasons, interest rate, as long as the deal can support.
We've paid zero interest. We've paid 2, 3, 5, 8 double digit. As long as the deal is made. And then make sure to make agreements with current tenants, uphold things that were there before, make it win, because these are literally the clients that are in your buildings. Yeah. Now the number one mistake investors make when using PMM.

You wanna pay attention to this because this is, it's a deal worker. It's so important. And that's our step number four. It's one of our steps because it's so crucial. The exit. All right. So what do we mean by the exit? You need to know the exit before you enter the deal. This is the number one. They've not even done a lot of research.

We've met with a lot of successful investors at large portfolios who were doing this. And we've also met with investors who had very large portfolios and were not successful. And that's exactly what they all had in common between those who failed. And those who succeeded is that you didn't have the proper exit strategy.

And what that means essentially is how are you gonna pay. So lender, so not necessarily selling. But are you able to get that lift that we talked about with those ratios and those numbers that we showed you earlier?
Timing again, a lot of them were doing what they were doing, they were banking on the market continuing to increase.

And it's no, I shouldn't say them, but we're in this market where it doesn't work. If you're continuously hoping that your assets appreciates with market appreciation to be able to pay back, and then also the interest rates staying low, this is a perfect example of that not happening. People that were banking on that exit strategy are gonna be pretty tight.

Cash flow ratios, timing, interest. It really is the overall performance of the deal as well. So if you take one thing away and I took no, you threw a lot of you this evening, but you have to know that you can create financial freedom by investing in properties and yes, it's possible and doable using OPM and no JV as well.

Just make sure that you always have your exit strategy as well. And if you're interested in working more closely with us we have the action family might have heard about. One of our team members will be able to tell you all about it. I put it on the website here and you can book a call and they'll be able to tell you how we can work a little bit more closely together. Thank you so much. We're gonna stop here the presentation. I know we're gonna be heading in Q and A, I'm not sure how we're doing for time here.