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
Tips for Getting a Higher Property Appraisal
In this episode, Quentin talks with a member who is going through his first BRRR property. He is looking for advice on the refinancing part of the strategy. He doesn't have comparables in his area, but we cover some tips to help him maximize his appraisal.
The member shares that he is currently working on his first BRRR project in the Port Coburne area of Niagara region. His first investing endeavor is transforming a single-family home into a legal duplex. In addition, he has a condo in Calgary. Currently, he is trying to gauge what his next steps should be, while looking to prepare for refinancing his property.
The member shares that his Calgary property has depreciated in value. Quentin adds that while the value of the real estate does not always go up, it is important that the property has a positive cash flow. On the subject of property appraisals, Quentin recommends going through a course on the appraisal procedure, available in vault section. As for the preparation steps, Quentin says that the first one is to locate any comparables in the region and create an appraisal package for the appraiser. There are also samples on the website that have helped other members receive higher appraisals.
He adds “The key is always to, if you're expecting the appraisal to come in, let's say at $500,000. To prepare your package so that your appraisal looks like $550,000, and if you end up getting $525,000, then you know, it's a win win-win.” Quentin further adds that if the member does not get the desired appraisal, they have the option to either go for a second appraisal or take a shorter-term mortgage.
He prefers variable rate mortgage as with a variable rate, you can always refinance a variable rate with three months interest penalty.
On the subject of lack of comparables in the area, Quintin suggests picking a square footage of a house that's very similar to the square footage of his property.
Another option is to look for comparables a little further down the road. Out of the three property appraisal methods—comparison, income, and replacement—according
to Quentin, the ideal is the income method. In conclusion, he reiterates that the member must be present when the appraiser arrives. He needs to show a professional attitude and seriousness, as an appraisal is when you get paid.
His Background and Experience in Real Estate Investing [00:50]
Importance of Having Cash Flow on Assets [02:50]
How To Prepare for Property Appraisal [03:54]
Strategies to Get Desired Appraisal Value [05:25]
What If There Are No Comparable in The Area? [08:19]
https://educationrei.ca/ldcourses/getting-higher-appraisals-the-basics/ (Appraisal Process - Course)
Investing in Multifamily Properties
In this episode, Quentin talks with a member who is wanting to move from renting out condos to multifamily properties. We touch on how to find those off market deals and screening methods for potential joint venture partners.
The member shares that he had always wanted to get into real estate, as his father was a real estate investor. Ten years ago, he bought a two-bedroom condo, where he rented one of the rooms. His wife also had a condo and she brought that into the marriage. Together, they also purchased a rental cottage that they are putting on Airbnb. He says that his goal is to use real estate as a retirement vehicle. He wants to invest in multifamily units and wants to find a joint venture partner. He is also looking for opportunities to network and connect with people who are already in the business through the Education REI network.
Quentin shares that there are always different parts to every deal, and you can always participate in different parts. When you're talking about multifamily, it is multifaceted. He adds that the member should be considering commercial multifamily properties like 12-to-20-unit range to get started and then move up to 20-to-40-unit range. He further adds that as there are different aspects of every deal, you have to be able to bring some parts to make it happen, such as bringing the actual property itself, bringing the funding to the deal, or helping out in the financing realm and net worth requirement. Another alternative that requires none of that is bringing money into the deal as a partner.
Quentin suggests going through the Multifamily Properties area of the Road Map section, such as Overcoming the Challenges of Commercial Residential Investing, Pros and Cons of Multifamily Properties, How to Acquire and Develop Land, and Electricity and Water Sub Metering. He also suggests going through Raising Money for Real Estate System Joint Ventures, adding that whether it’s a big apartment building or a smaller multifamily unit property, the principles are very much the same. He says that if you want to do the lead generation piece, you should look at the Off Market and Discounted Properties Real Estate System.
Furthermore, Quentin suggests attending both of the QandA sessions, for the beginners and the experienced investors, as the networking section of the latter would be a great opportunity for the member. He also recommends going through the Action Taker Goal Attainment Program, making the plan, going out and then doing it. On the subject of vetting potential JV partners, Quentin adds that the member can ask them for referrals to people who have invested in one of their previous projects. He adds that building relationships should be a priority, and if there are any agreements, have them reviewed by a lawyer to make sure that everything is done correctly.
He adds “You're kind of doing your due diligence on the person more than the deal itself, because there's lots of opportunities that come along, and then it's about finding the right one for you.” Talking about how he can find off market deals, Quentin suggests going through the Off Market and Discounted Properties Real Estate System course, as it covers the necessary systems and processes. He also recommends being prepared in all aspects before talking to the brokers. He adds that following through is also important because once you stop following through, people will stop wanting to do business with you.
In conclusion, Quentin says that while the journey is not an easy one, especially in the beginning, it gets easier over the time. You can create what you want, but it just takes time to do it. Be the director, be the leader, take a group of people together and move them forward. The things that people call you, see you as an asset, when you introduce yourself, introduce yourself with those skills.
His Background and Experience in Real Estate Investing [01:13]...
Real Estate Investing for Beginners: Focus on One Area When Starting Out
In this episode, Quentin talks with a member who has a few investment properties spread out over long distances, we cover why it is important to focus on one area starting out and becoming an expert in that area. We also touch on a blend and extend for when you are feeling stuck in a fixed mortgage.
The member, who is a nuclear engineer, started investing in real estate last year and now has three properties under his belt. He shares that his short-term goal is to get enough cash flow to cover the mortgage on his primary residence. In the long term, he wants to replace his active income of around $10,000 from his 9 to 5 job. Talking about the cash flow that he's getting from his properties, he says that they are rented under the market rate.
Quentin suggests add one of the things he should consider is doing some ‘Cash for Keys’ and offering his tenants to leave, since there is a huge difference in market rent and the rent that he is getting. Quentin suggests going through the Property Management: Key Policies and Procedures course to get a better idea of how things should be done and why to take the time to do that. Furthermore, he should be careful if he is spreading his assets all over the place, adding “it's okay to invest in different areas. It's better to focus.” The Your First Three Properties in Real Estate course identifies the fundamentals that he should be looking for in any area that he invests in.
Talking about the available equity, that member shares that he has not maximized the available equity on his principal residence about plans to do so. Quentin recommends that he can do a ‘blend and extend’ to avoid the penalty for switching from fixed rate mortgage. He further adds that the member should have a secured line of credit on his principal residence and if his income is over $10,000 a month he should also be applying for unsecured lines of credit as well, adding “even if you don't use it, it's always good to have and not need the need and not have.”
Quentin adds that the member should go to TD, BMO, CIVC, National Bank, then apply for a line of credit on usually all four or five banks at the same time, as long as he is comfortable with the debt and the numbers make sense. He also recommends asking for more than what he wants from the banks. He continues “those unsecured lines of credit, you know, the interest is tax deductible, but you have to make sure that you can service the debt, with the properties okay that everything makes sense.”
Their Background and Experience in Real Estate Investing? [1:10]
What Are His Goals with Real Estate Investing? [02:51]
What is the Current Cash Flow Based on His Portfolio? [03:57]
When Did he Purchase the Townhouses? [05:15]
How Much Equity and Access to Line of Credits Does He Have? [09:18]
https://educationrei.ca/ldcourses/property-management-key-policies-and-procedures-for-durham-rei-members/ (Property Management: Key Policies and Procedures)
https://educationrei.ca/ldcourses/your-first-three-properties/ (Your First Three Properties in Real Estate)
https://educationrei.ca/ldcourses/raising-money-for-real-estate-system-joint-ventures/ (Raising Money for Real Estate Joint Ventures)
Help You Find Joint Venture Partners
In this episode, Quentin talks with Jeff, a member who was a contractor. He joined DurhamREI to find new clients and to learn what real estate investing is all about. He was hesitant to start investing until he met some joint venture partners through networking. Now he's already on his second property. He shares his journey and what his experience has been since joining DurhamREI.
Jeff is a contractor by trade, who owns his own business, and he closed his first property, a rental in Peterborough, Ontario in January, a JV partnership. He says that he partnered up with someone he met through DurhamREI, which has been a great experience for him. It has allowed him to network, find likeminded people and make connections. He adds that he was nervous, being a first-time investor, and this person helped him feel more confident. He shared his knowledge with Jeff, and they did a deal together in Peterborough to get him started. Now, they are closing their second property which will be a flip in Peterborough.
Talking about the first property, Jeff shares that it was an undervalued duplex, and the owner was having problems with the tenants. They were paying under market rent to start. After meeting the tenants, they realized that the tenants weren't the problem, and they seem to be taking care of the property extremely well. They got it at a time when the market had just started to hit that point where everybody was out-bidding each other. They were able to get it $20,000 undervalue, so we got it for $380,000 instead of the $400,000. He adds that the property is cash flowing barely but they are working out some solutions to get tenants in paying more rent. In the meantime, they have also gained appreciation, and he is really happy with the overall experience.
Quentin adds that “the great thing is that you were able to come up to an event, you know, make some connections, also then build on those connections with actually going out and doing a deal together, and then figuring out what works, what doesn't work and then gaining some confidence in order to, to get your, your own deals.” Talking about his contracting business, Jeff shares that he started his own business after working with his father for 15 years. He adds that his original intention of joining DurhamREI was to promote his contracting business. Being there, he learned about real estate investing, and as a great added bonus, he made connections with some investors who were also looking for contractors and now 75% of his business is actually investors.
Jeff further adds “when I joined, I was so unsure about joining a group of people, who obviously were at further stage in life investing, financially and it was really scary for me, but I did it anyway and I could not be happier.” He says that there was a lot of knowledge to learn, and he can't put a number on the value. He gained so much value from being a member there and thinks that it the best decision he has ever made. As for his advice for investors when working with a contractor, Jeff suggests that you should always get more than one quote, because prices can range drastically, depending on the contractor and how busy they are. Try to work with someone local, it can be a little cheaper and more convenient, but do your due diligence when checking out a contractor.
He concludes by adding that check out the references and work of a contractor, and if you can, go to a site in person rather than seeing pictures do that. Try to build a relationship, as it's not all about money. So, good contractors are hard to find, and when you find one, stick with them if they're reasonable in prices. That's kind of someone you can keep in your team.
Their Background and Experience in Real Estate Investing? [0:56]
How His First Real Estate Investing Experience Went [2:55]
His Contracting Business and How That Has Looked Over The years [5:42]
His Advice for Investors...
The Basics of Real Estate Investing for Beginners
In this episode, Quentin talks with a member who is starting his real estate career with a house hacking strategy. He changed his career and moved into construction, and got his real estate license as a way of investing in real estate. We found that he is running the risk of doing too much himself, and might want to look at outsourcing in order to grow faster.
In terms of real estate investing, the member has rented out the basement of his property. He wants to eventually buy another house, rent out the upstairs, get another house with a basement apartment again, and build his way up that way. He left his job as an accountant five years ago, and took on construction and carpentry, with the end goal of getting into real estate. He has also earned his realtor license as well.
Talking about what he wants to achieve by participating in the membership, he says that it will help him in gaining subject knowledge, networking, a work life balance and building some wealth for his kids as he wants it to be his career. Quentin adds that while the member likes to be hands-on with all aspects himself, he does not need to do any of that to be a real estate investor. He needs to figure out how to build a team around him to do the things that he doesn't like to do, while figuring out what he likes doing in the business and then focusing on that.
Quentin suggests starting with Your First Three Properties in Real Estate course, as most Realtors don't have the background in the investment side, where you really need to be, if you're going to go down this path. He also suggests using the Property Analyzer Tool, that helps you to analyze a property to see whether the numbers work or not. As the member likes to be hands-on with the renovations, there is also a video series on renovations. Quentin adds that he should take some time, go through the videos, and the actual case studies to get familiarized with the ins-and-outs of real estate investing.
The member share that he wanted to learn how to do everything, so that he would have the knowledge. Quentin adds that in this business there are so many different roles that you could do. The industry allows for different ways for people to earn income, but what happens is you become transactional, where you are selling your time for dollars. That is not something you would want to do, so you have to build the asset base, and to do that it requires you to focus on adding assets into your portfolio.
Quentin suggests attending the meetings, the QandA calls, and networking events, and talking to other people to find out what they're doing, where they're buying and what makes sense. He also suggests using the Action Taker Goal Attainment Program. It helps you to outline what your 10-year goals are, what your three-year goals are, and then helps you to outline quarterly goals for yourself. He adds “if you write down in some way what you want, and you look at it, they are more likely to achieve it, than if you were to, you know, have an idea in your head.”
On the subject of investing in areas a little further away, Quentin says that you have to be careful when you're thinking about something like that. There is a criterion to stick to and he can identify that after going through the First Three Rental Properties Course. It highlights the fundamentals that you want to look at, and factors to take into consideration before making a decision. Once he has decided, he can join the QandA calls, networking events, and find somebody else who has invested in that area. That way he can get a better idea. He concludes by saying that the challenge isn't usually the area, it's finding the right assets.
What Does He Want to Achieve by Participating in the Membership? [02:53]
Where Areas Should He Invest in? [15:00]
https://educationrei.ca/ldcourses/your-first-three-properties/ (First Three Properties in Real Estate – Vault)...
How to Build a Real Estate Portfolio for Cash Flow
In this episode, Quentin talks with a couple who has a single-family rental that they would like to increase its cash flow, and they are also coming up with a mortgage renewal. We cove why moving to a variable rate mortgage will give them more options for further investing and what situations work best for putting properties under a corporation.
They purchased an investment property, a freehold townhouse five years ago in Alliston. They want to expand their portfolio, as they want to leave a property each for their sons, and help them in their retirement. After doing research into real estate investing, they have been excited about the possibilities that it can offer. For their next property, they are looking to buy a duplex or a triplex. They have reached out to some of Quentin’s students in the Durham Region, to join them and see and learn how the whole process works. While there Alliston property turned out great, it has a cash flow problem.
Currently, their mortgage payment is $1297 a month after property taxes, while the total mortgage amount is $227k. Their property is currently valued around $600,000. As for the current rent of the property, they are charging $1610, but if they were to re rent it, they could get over $2000. Their mortgage is coming due December. They went with a fixed rate, and they have the option to refinance early. While doing research about their next purchase, it has only led to further confusion about whether or not they should leave this property in their personal names, and then going forward, open up a new company.
Quentin suggests going through the ‘When to Use a Corporation and When Not To Use A Corporation’ course in the world to get an idea of both. Having a corporation is a good idea if they are looking to build a portfolio of three, four or more properties. The upside of having corporate is that it doesn't appear on their personal name, but that's only a benefit if they're going to multiple lenders. He adds that if they're not sure, the thing is they can always come back and do Section 85 later. He says that one of the reasons why they might want to speed up the process is that if the Liberal government gets reelected and they change capital gains tax.
Quentin suggests that for the amount of funds that they have access to with that CIVC or Scotia Bank mortgage, they should make sure that whatever they give them, they should maximize the loan that they have access to through the line of credit component to it. He adds that when they're doing 100% financing, it's tougher to make the numbers work but it's good to be able to access funds because then it will allow them to invest in other projects. He suggests that never go fixed rate again.
He further says that they will never be able to catch up or take advantage of changes in interest rates, but they can always lock in. If they feel uncomfortable about anything, but lock in for a year. As an investor, access to capital is even more important because it can prevent or allow them to access more deals, and if they have a variable rate mortgage, they can always exit a variable rate mortgage by paying three months interest penalty and then access funds.
The members share their plans to sell their primary residence in the next year, so Quentin suggests going through the Getting Higher Appraisals: The Basics. He adds that a lot of people don't understand this but as a real estate investor, that's when you get paid on appraisals, because when you do an appraisal, you get access to funds either through a line of credit or remortgaging the property. He also recommends going through the content on Property Analyzer, as it helps learn about what to look for.
Talking about another way to get an idea about the rent is just going to Kijiji and or Facebook marketplace and look for ads in their area and see what the rents are, because that way they get a better sense of what something is renting for, or they can talk to...
This is exactly what I was looking for as a fairly new investor! There’s so much info out there, it can be really overwhelming and can unintentionally dissuade newer investors from moving forward.
Not the case here! Thank you Quentin.
Simply The Best
A great podcast for beginners and experienced real estate investors. Quentin has helped guide 100s of investors through so many challenges over the last 2 decades and has now released these conversions to allow us to catch a glimpse of his process. Quentin is an educator first, but draws on deep knowledge and hard earned experience to help investors navigate the path to Time + Money Freedom! - Randall Reashore (Ontario Assets)
Great podcast !!!!
Just found this podcast today but was only able to listen to the June 1st episode. Quinton is an amazing guy and the thing I like about him, is being a teacher he has this ability to break down and explain things in a nice and simple way which is easy to understand. Wealth of knowledge.
I was not able to listen to the older episodes (temporarily unavailable) … not sure if it’s a technical glitch or they have been removed. Would be Great to listen to all the old episodes. :(