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
1 - Creating a Strong Real Estate Investment Team: Tips and Strategies
In this episode of Get Real Wealthy Season 4, Quentin discusses the different ways to build an investment team in real estate: solo investing, partnering with other investors, and general partners.
Quentin starts by talking about soloi nvesting. Solo investors focus on building a team of professionals such as property managers, insurance advisors, and contractors to help them run their businesses. This approach allows them to get a higher return on their investment, but it also requires a larger time commitment. The second approach is bringing on partners. They'll take on a smaller cut of the equity, but they'll be able to scale their time more because they'll have other partners and an established team with a system and process that are working for them.
General partners are real estate investors who work with other investors to build a team. Members can focus on their strengths and work together to build a larger business. This approach may result in a lower equity amount per project, but it also leads to a larger overall cash flow. Quentin adds that it just depends on your approach and how you want to do things.
Quentin also offers some tips and strategies for identifying which approach to take and building an effective investment team. First, to understand your strengths and weaknesses, make a list of what you believe they are and ask three friends for their input. Secondly, building a good reputation is also important when building a team or partnering with others. To gauge your reputation, ask three friends and three acquaintances for their perception of it. This can help you understand what has been built already and decide whether to build on it or make a slight change.
He further adds that It's important to plan your exit strategy when building or working with a team in real estatei nvesting. If you're a solo investor, you may simply sell the asset. If you have multiple investors, you may need to buy out some passive investors overt ime. If you're building a team of active investors to grow your portfolio,your exit strategy may involve selling to a REIT or other fund. Consider youra pproach to building a team and plan your exit accordingly.
In conclusion, Quentin says that reale state investors can achieve their financial goals by following these tips and choosing the right approach for building an investment team. To learn morea bout building an investment team and real estate investing, visit EducationRei or Durham Rei.com. These resources can provide valuable guidance and helpy ou make informed investment decisions.
Important Links and
2 - Win-Win Negotiation Strategies for Real Estate Investors
In this episode of Get Real Wealthy Season 4, Quentin talks about powerful negotiation techniques for real estate investors who are working directly with sellers.
Quentin says that to prepare for negotiations with sellers, it is important to gather as much information as possible about their motivations for selling. When working directly with a seller, you can gather more information as you do not have a realtor acting as a gatekeeper and filtering the information shared with you. Take advantage of this opportunity to ask the seller about their reasons for selling and gather as much information as possible. It is also essential to keep the conversation with the seller conversational and avoid making it feel like an interrogation. This will help establish a good rapport and make the seller more comfortable sharing information with you.
He adds that by focusing on the seller's motivations and understanding why they are selling, you can position the opportunity in a way that creates a win-win situation for both parties. It is important to anticipate and prepare for potential issues or objections during the negotiation process. Coming up with solutions ahead of time makes it easier to deal with objections with a solution or a way to get a solution. For example, suppose a seller wants a quick closing on a property but the buyer needs more time for financing. In that case, the buyer can suggest offering a vendor take-back mortgage or seller financing option to speed up the closing process. This can be a win-win solution as it allows the seller to close more quickly while also providing the buyer with financing.
Quentin further adds that instead of offering just one agreement, you can offer multiple options to the seller, such as one with a higher price and seller financing and one with a lower price without seller financing. This allows the seller to choose between two options rather than deciding between you and another buyer. It is important to keep the options simple and not overly confusing, as a confused mind is more likely to say no. Practice negotiating with different sellers to improve your skills and increase your chances of success.
In conclusion, he says that to improve negotiating skills, it is important to practice negotiation and be willing to walk away from a deal if necessary. To learn more about negotiation tactics, consider reading the book "Finding Properties Toolbox: Buying Real Estate at a Discount" or visiting findingdiscountedproperties.com.
Important Links and Resources
· The Book Finding Properties Toolbox – Book
3 - How to Navigate the Challenges of Full-Time Real Estate Investing
In this episode of Get Real Wealthy Season 4, Quentin talks about the challenges faced by those deciding to become full-time real estate investors.
Quentin starts by sharing his personal experience of transitioning from being a full-time teacher to a full-time real estate investor. He became a full-time investor because he wanted to do more than just teaching. Quentin was a full-time teacher and consultant until 2014 and banked his income and used the income from his portfolio to pay for his expenses. He demonstrated the ability to do this for an entire year before leaving his job. Once he left his job, he could invest more in real estate, including flipping projects, rent-to-own properties, etc. He also began investing in apartment buildings and multi-unit properties in 2015, allowing him to grow his asset base while spending less time on these investments.
He adds that often those who find their time totally consumed by their job struggle to earn additional income. Quentin discovered that real estate provided a means to continue earning income without dedicating hours to the task and at a pace that worked well for him and his family. He adds that while this option may not be for everyone and there is nothing wrong with having a job, real estate investing can help you create more time, location, financial, and thought freedom, adding, "those freedoms are all things that are important to me."
Quentin says that one of the big challenges for individuals who invest full-time is the possibility of being equity-rich but cashflow-poor. They may have assets with significant equity but cannot access them due to borrowing regulations and practices. The cash flow from rental properties can also be unpredictable, with some months being low in cash flow and others being higher. As a result, for those who rely on a small number of rental properties for income, your income can get very distorted. He adds that, therefore, you need to prepare yourself. First, you need to figure out your true spending habits, as they may differ significantly from when you were employed. You should also consider the tax implications of your expenses and how it affects your income.
Secondly, he says that it is essential to have a cash flow buffer in place. Income can be unpredictable and may fluctuate over a three to four-month period. He further adds that you should also take three to five months of income and place it in a separate account that is not easily accessible. This way, the funds will be available to cover monthly expenses during periods of instability. Additionally, it is important to periodically refresh this buffer. Thirdly, before leaving a job, you should get any financing or refinancing done as early as possible. Financing often depends on income history, and if you don't have a history of two years in your workplace, it may be difficult to get financing.
Fourthly, he recommends establishing multiple income streams, either prior to leaving the job or after. He adds that having multiple income streams can add up over time and help smooth out the ups and downs. Lastly, he suggests seeking support and advice from other full-time investors can be beneficial. Joining a local real estate investment group or seeking education from groups like https://DurhamREI.ca and https://EducationREI.ca can provide opportunities to learn from and connect with other full-time investors who can offer tips and insights.
In conclusion, he says that while becoming a full-time real estate investor can offer more time, location, financial and thought freedom, it also poses challenges. To overcome these challenges, it is important to prepare yourself by understanding your true expenses, creating multiple income streams, and seeking support from other full-time investors.
Important Links and Resources
4 - Finding the Right Real Estate Investing Coach for You
In this episode of Get Real Wealthy Season 4, Quentin shares tips and tricks for finding the right real estate investing coach or advisor.
Quentin says that many people are eager to sell their services on social media, and it's important to be cautious when looking for a coach or advisor. There are a few steps that you can follow to find the right mentor. He suggests that the first step in finding the right coach is determining what specific topics you're interested in learning about. Joining a real estate club, like Durham REI, can help you get a general overview of different aspects of investing in the Canadian real estate market. Once you have a general understanding, Quentin advises to figure out exactly what you want to learn from an advisor or coach.
The second step is to understand the track record of the advisor. Quentin suggests looking for an advisor who has invested for a full real estate cycle and has experience with different types of strategies during different parts of the cycle. He further adds, "you got to be careful who you're getting advice from because they may push you down the path that leads you into the same problems that they went into." The third step is ensuring the coach or advisor is still an active investor. Quentin says that you have to be cautious if the coach hasn't bought a property or done a flip project in the last few years, as they may not have current experience in the market and knowledge of the current rules and regulations.
Quentin says that the fourth step is considering the coach's qualifications and credentials. He mentions that one red flag to look out for is if coaching is the main source of income for the coach or advisor. He suggests being wary of their past success in real estate investing, and if they are currently active in the real estate investing space. You should also be cautious of coaching programs where you pay a large lump sum of money and have access to the program forever, as you may outgrow the program, and the coach may focus on bringing in new clients instead of moving you to a higher level.
The fifth step is to consider the support you will get from the coaching program. Quentin suggests looking for weekly calls, WhatsApp groups, quarterly masterminds, accountability programs, and access to videos, courses, books, and other materials. Lastly, he suggests looking for references from former coaching clients. Quentin suggests looking for pictures, quotes, and testimonials from former clients to get an idea of their experiences with the program.
In conclusion, Quentin emphasizes the importance of being cautious and doing your research when looking for a real estate investing coach or advisor. These steps will help you find the perfect coach to help you in your real estate investing journey.
Important Links and Resources
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5 - Understanding Apartment Buildings Listings: A Guide to Avoiding Common Pitfalls
In this episode of Get Real Wealthy Season 4, Quentin D'Souza talks about five things to watch out for on real estate listings for apartment buildings and the need for due diligence.
First, Quentin suggests that you should be cautious when a listing states that a building or roof has recently replaced an AC. The term "recently" can be ambiguous and should be verified with a specific date to ensure the property's true condition. Secondly, he suggests that you should be aware of listings that advertise potential rents. These potential rents may not align with the current net operating income and can affect financing options. He suggests carefully evaluating the current net operating income and comparing it to the potential rent to ensure that you are not overpaying for the property.
Thirdly, Quentin adds that you should look at listings that describe a property as located in an "up-and-coming neighborhood" more closely. Such neighborhoods may have a high crime rate or be undergoing major changes, which can affect the tenant profile and the property's overall value. He recommends visiting the neighborhood, talking to the local residents, and gathering as much information as possible about the area. Fourthly, Quentin says you should be aware of listings describing a building as a "century building" or "historical building." Such buildings may be subject to stricter regulations and have to go through a Heritage Committee, which can make them more expensive to make changes to. So, you need to consider if you are willing to take on the added expenses and regulations that come with owning a century or historical building.
Lastly, Quentin suggests that you should be cautious of listings that advertise "guaranteed rent." This may mean that the tenants are on social assistance, which can make it difficult to turn over the property and make it challenging to increase the rental income. He suggests carefully evaluating the risks and benefits of such property before making an offer. As a bonus tip, Quentin adds that you should also pay attention to the location of the property and its surroundings when reviewing the listings. Be aware of properties located near gas stations, former dry cleaners, or in industrial areas. A quick Google search and checking the Street View can give you a good idea of what's around the building.
In conclusion, Quentin suggests that you should pay close attention to the details in real estate listings, do proper due diligence, and keep in mind the potential red flags. By doing so, they can make informed decisions and avoid potential pitfalls in the process of buying an apartment building.
Important Links and Resources
6 - Weighing the Options: Professional Property Management vs. Self Management
In this episode of Get Real Wealthy Season 4, Quentin D'Souza discusses the pros and cons of property management vs. self-management.
Quentin says that there are several benefits to hiring a third-party property management company. Firstly, experienced companies understand problem tenants in the area and can guide the property owner through tenant selection. Secondly, third-party property managers can effectively handle uncomfortable situations and legal issues. They have knowledge of the necessary documentation and contacts for paralegals or legal lawyers. They act as intermediaries between the property owner and tenant, avoiding emotional involvement by the owner. Thirdly, professional management offers peace of mind for those who do not live near their property, as local managers can handle any situation quickly and efficiently. Fourthly, property management companies have a list of maintenance and repair professionals, saving time and allowing the owner to focus on acquiring new properties. Lastly, they have extensive experience managing tenants and assets, making them efficient in handling current properties and tenants.
As for the pros and cons of self-management, Quentin says that the first advantage is that all decisions made align with your business goals as you make them. The second point is that while you save on the cost of a professional manager, you also sacrifice your time. Therefore, you have to determine if the time spent is worth the cost savings. Third, some individuals believe that a manager may not maintain the property as thoroughly as an owner would, though Quentin disagrees. He believes that some owners may have extra time and a desire to manage the property themselves. Fourth, self-managing property owners tend to search for the lowest prices and compare quotes from various sources, which saves money and keeps costs in line. Finally, he says that with self-management, you have complete control over the asset, but it also requires a lot of time.
In conclusion, Quentin adds that considering the time and size when deciding between hiring a third-party property management or self-managing. Self-management may be suitable for one or two properties, but a property manager may be needed for five or more. He recommends the books, "The Property Management Toolbox" and "The Filling Vacancies Toolbox," available on Amazon, for an overview of managing real estate assets and being a property manager."
Links and Resources
· The Property Management Toolbox
· Filling Vacancies Toolbox
Great information from a successful real estate investor
Mr Desousa has years of experience and hands on real estate. His background as an educator is also another reason for the success of the podcast.