Real estate investing in Canada can be confusing. You own your first home, but where do you go from here? How do you build your portfolio and your wealth? The confusion ends here.
Quentin DSouza is your host, an award-winning real estate investor and founder ofAppleridge Homes, which started with small single-family homes in 2008 and has grown to large apartment buildings and growing towards 100 million+ in assets under management.
On this podcast, you'll learn how to take your high-income, and your first home, andmove into the ultra-rich with our lessons from how Quentin and many others did it withreal estate investing.
Connect with Quentin at https://linktr.ee/qmanrei
The Ultimate Goal Setting Process for Young Adults: How to Create a Ten-Year Plan for Your Life
In this episode of Get Real Wealthy Season 3, Quentin talks about coming up with ten-year goals for young adults who are starting their journey toward financial freedom.
Quentin says that, as Tony Robbins noted, "most people underestimate what they can do in two or three decades but overestimate what they can do in a year" we want to solve that problem by coming up with big goals for the next ten years. He says that when it comes to displaying your goals, you can use a bulletin board or a display board where you have all your plans laid out. You can also do it as a letter to yourself like you're writing a letter to somebody or writing an email to somebody from 10 years in the future. You can also do it now by describing what it looks like ten years from now to a family member.
If you choose a bulletin board, get images related to different aspects, such as financial, relationship, spiritual, social, professional self, and goals. You can outline your pictures and put them into those six different areas. You can use it as your desktop background, someplace where you look at it often. You can also do a letter for yourself describing those six areas from 10 years in the future. What does your life look like now, and what have you done with those six aspects? You can also do it as a description instead of a letter.
He further adds, "You want to take the time to be able to do this; the more time you spend doing this, the more detail you're going to put into it, the more effective this tool is going to be for you. Goal setting is important." He says that the most important piece when it comes to mindset because it will take you from where you are now to get those goals sooner than you ever thought possible. Quentin adds that you should be the person who looks at their goals every month and then works towards those goals.
He says that there are different tools and templates that you can use, including his The Action Taker’s Real Estate Investing Planner, which has helped him tremendously over the years. In conclusion, he says you should start developing your ten-year goals and displaying them. As for the homework, before you watch the next episode, have your 10 year goals set out, write them out, put them into a diagram, put them into a bulletin board, put them into a letter to yourself, have it ready, and then that way you'll be ready for the next episode.
Important Links and Resources
The Action Taker’s Real Estate Investing Planner
2 - How to Start Building Credit as a Young Adult
In this episode of Get Real Wealthy Season 3, Quentin talks about building your credit and why it's important.
Quentin says that a lot of the things we're going to do while investing require some credit. You can start without credit, but for growth and scaling, you need good credit. It allows banks or other institutions to track how well you repay funds you borrow. We are moving from a money-based system to a credit based economy. He adds, "If we are good with our credit, we will be able to borrow more, and if we can borrow the right type of debt, we're going to be able to create wealth from that, and if we borrow the wrong type of debt, then we're going to have to pay for that for years and years and years."
Choosing the correct type of credit card and the financial institution behind it is crucial, as it builds credit with a credit history. He says that you should only borrow what you plan to pay back. So whatever you put on your credit card, you will pay it back that same month, if you can, or within two months. It's okay to carry a bit of a balance because you want to show that you can pay it back, and if you do that, you start to build credit over time. Things like car loans, and mortgages, are also great ways of building credit.
Quentin says there are also services like Borrowwell or Credit Karma you can use to look at your credit. Another tip, especially if you're young or having trouble with credit, is to get paper statements, especially at the beginning, for tracking so that you can cross off what you paid back and what you borrowed in a month. He adds that little things come up, but remember, what you're doing is you're building a credit history; the better you can utilize this credit, the easier it is for you to borrow later on.
In conclusion, he says that if you haven't done so, go out and apply for credit. Whatever that looks like for you, start asking questions about getting some credit, which is also your next assignment.
Important Links and Resources
What is Financial Independence and Why is it Important to Young Adults?
In this episode of Get Real Wealthy Season 3, Quentin talks about financial independence from the perspective of a young adult.
Quentin says that financial independence means that you are given more choice in what you want to spend your time doing. While it is different for different people, a common theme is that you need to go out, get a good education, get a good job, work for 40 or 50 years, retire, and use your nest egg to be able to live off that. Now, you can do it at an earlier age if you choose. You have to decide where you want to see your life ten, twenty, thirty years from now. So, what exactly is financial independence? Everybody has three main expenses: accommodation, transportation, and food. Now, if you can create income that comes to you without having to spend time creating it, you can create financial independence because it covers your accommodation, transportation, and food.
For accommodation, transportation, and food, the only way to figure it out is to devise a plan and write it down, make a budget, and figure out how much you would spend in a month. Your needs and, consequently, the budget will differ depending on where you are now. In order to have financial independence, you need to have income coming in that exceeds your expenses. While there are different ways to achieve that, a simple way people move down this path is through house hacking, where you can rent out space in your house that you don't need or is extra. This can help you save a significant amount of money.
He adds that as you get older, you will have different requirements. Things will change, and you have to change the funds that come in. He says that when you decide on having financial independence, it could be related to what you want to do in the future for a job. Perhaps, if you've created this financial independence, you can have a job because you love it. You can leave a job for another job because you have this financial independence in the background, or if you have no job and you choose to work on passion projects, instead, you'll have that ability because you have financial independence.
In conclusion, Quentin says there are several creative ways we can go about doing this. The homework for this episode is to read about the FIRE movement and see if it appeals to you.
Important Links and Resources
Financial Independence, Retire Early movement (FIRE), and How to Achieve It?
In this episode of Get Real Wealthy Season 3, Quentin talks about the FIRE - Financial Independence and Retire Early movement and its relevance for young adults.
Quentin says that being a part of such communities can be greatly helpful for young adults as the financial landscape these days is very different from what it used to be three or four decades ago. He adds that there are various approaches to doing this, and one of them is the FAT FIRE movement, which is having a large nest egg and being able to live off of that. It may take you five years, ten years, or 20 years to create something like this, but you live off that. There is also a LEAN FIRE community that is really about being frugal and living minimalistically. This allows you to create an environment where your monthly freedom number is so low that it becomes easy for you to have that financial freedom.
Quentin says there is also another movement called the BARISTA FIRE movement, which means that you continue to work while you're retired but get additional benefits. It's like you've created the financial freedom part, but just not all of the pieces. He adds that there's the COAST FIRE movement as well, which is about investing early enough to generate income to retire later. He says that the other thing you need to understand is the difference between assets and liabilities. Assets pay you to own every month, whereas liabilities are things you have to pay every month. He further stated that this is an interpretation from Robert Kiyosaki. He also recommends reading his famous book Rich Dad, Poor Dad for more gems like this.
Quentin adds that it is also important to know the difference between good debt and bad debt, and how it can be an asset or a liability. He further talks about the Golden Handcuffs. It's when you're in a situation where you get a lot of income but end up spending it because of your lifestyle. It prevents you from growing and having financial independence. In conclusion, he says that the best thing you can do is explore the FIRE acronym, and if you want to learn something, you must be around other people who are doing the same thing.
Important Links and Resources
· Rich Dad Poor Dad by Robert T.
7 Things I Would Have Done Different If I started Again
In this episode of Get Real Wealthy Season 2, Quentin shares eight things he would have done differently if were to build his portfolio again.
Quentin says that he purchased his first property in 2004. In 2008, he bought multiple properties for a year. By 2013, the cash flow from the portfolio allowed him to decide whether to quit his job or not. He left his job as a public-school teacher in 2014. He adds “it was quite a stressful decision, but decided to leave my profession and focus on real estate investing, full time, which I have been doing since 2014.”
Talking about the eight things he would do differently if he were to rebuild his portfolio, Quentin says.
• Eight Things He Would Have Done Differently
100% of $5,000 a Month in Cash Flow vs. 1% of $500,000 in Rents
In this episode of Get Real Wealthy Season 2, Quentin takes on the question; ‘would you rather have 100% of $5,000 a month in cash flow or 1% of $500,000 in rents.’
Quentin says that the reason why we're going through this is to give you a perspective of whether you invest directly in one to four-unit properties and build a portfolio over time or you decide to scale into a property and have an idea of what that cash flow would look like for you based on that portfolio. To understand this, really, you need to know about the debt coverage ratio, what cash flow is and agree on that. Then, look at the portfolio size, how that affects your cash flow and the returns that you get on a particular investment.
The debt coverage ratio is a way for the bank to determine whether they are going to fund your property or not. If you calculate your mortgage, utility payments, property taxes, insurance, and some variable costs, put them all that together, that is the debt on the property. So, If you are getting an equivalent amount of monthly rent to debt, that means you would have a 1.0 debt coverage ratio, and 1.2 would mean that you are earning 20% per month on that particular asset.
As for the one to four-unit property space, you are looking at proforma, which takes those same numbers that you use for a debt coverage ratio, but analyzes them from a cash flow perspective. Let's suppose you have a cash flow of $200 from a property, and your goal is to generate $5,000 a month, you would need 25 doors to accomplish that. On the other hand, if you had portfolio size change because you decided to scale up and get into larger multifamily units, it's easier to look at it from a debt coverage ratio perspective and get an idea of what your general rents are, you can come up with return you would be getting.
So, if you had $500,000 in rent, and you had that coverage ratio of 1.2, that means 20% of that is $100,000, which you would keep at the end of the month. If you had 50% of that as a partner, you would have $50,000 a month. Now being able to get to that scale in size takes time, but it depends on the size of the projects that you get involved in. However, other things also come into play when you scale, such as a much high mortgage payment, as compared to a smaller portfolio. Essentially, having 100% of $5,000 a month in cash flow or 1% of $500,000 in rents is going to depend on what your goals are and what you are looking to accomplish with real estate investing.
Getting lot of knowledge, thank you!
Phenomenal knowledge base with a practical application.
Quentin is down to earth, knowledgeable and easy to follow. Anyone who puts Quentin’s practical knowledge and suggestions into action is bound to do well in Real Estate Investing!
Practical information for practical application
I appreciate Quentin’s podcast because his content offers real estate investors with very practical information, that is beneficial when put into practice.