Episode 42: Invested Teacher Deals Update
In our latest episode, Jon Orr and Kyle Pearce take some time to discuss some of what wealth building and investment opportunities have been keeping them busy.
Tune in to hear our journey to expand your investment horizons and refine your decision-making skills. Explore an intriguing concept shared by Kyle for those who hold shares of private corporations and discover the art of recognizing when to put a deal in the “too hard bin.” We provide insights into understanding your margin of safety and why what’s a good investment for one person might not be the same for another. Lastly, we emphasize the importance of pausing to reflect on your investment commitments, aligning your investments with your values and objectives.
What you’ll learn:
- Why you need to explore the value of tax minimization strategies for your corporation;
- How do you know when to put a deal in the “too hard bin”?
- How do you know how wide your margin of safety has to be?
- Why a good investment for one person might be a bad investment for another;
- Why you should pause to remind yourself of what you’re willing to invest – money, time, and effort – into an investment;
- JM Solution – Our fantastic contractor, Jay Maguire
- The Vintage Grapes Houseboats
- The Invested Teacher Wealth Building Booklist
- The Real Group Windsor Real Estate Team
- Invested Teacher Ontario Mortgages
- Invested Teacher Wealth Planning
- Download our Wealth Building Blueprint
Interested in Joint Venture Opportunities?
For those interested in being considered for potential Joint Venture (JV) opportunities, reach out to us here.
Contact Matt if you’re Buying or Selling Real Estate in Windsor or Essex County!
Get in touch with Kyle to begin your journey through his Canadian Wealth Planning System.
Check out the work Jon and Kyle do assisting mathematics educators and district leaders.
00:00:00:03 – 00:00:22:08
Whereas Alex her mosey. If you know Alex her mosey, he is an investor in builder of businesses. And so Alex is like that sounds so risky to put money in real estate. He’s like, I’d rather put my $100,000 into buying a business because I know that business. I know I can make that be successful. That is no risk on my end if I go that route.
00:00:22:08 – 00:00:43:08
Whereas Grant Garden’s gone. There’s no risk on my end if I buy the real estate. I think both of them have total different perspectives just because of their skill sets.
00:00:43:10 – 00:00:50:20
Welcome to the Invested Teacher podcast with Kyle Pierce. Matt Begley and John or.
00:00:50:22 – 00:00:59:15
Get ready to be as we share our successes and failures encountered during our real life lessons. Learning how to build generational wealth from the ground Up.
00:00:59:19 – 00:01:27:00
Welcome invested students to another episode of the Invested Teacher podcast. And you know what, my friends? This week we’re excited to dig in to a bit of a review of what the heck’s been going on in our world here with all kinds of deals. I mean, Joaquin, I know that Matt’s up to his ears in deals. He’s once again running around town, making offers and doing offer presentations and all that wonderful jazz.
00:01:27:00 – 00:01:49:21
So he sends his regards. But also on our and the invested teachers have actually been pretty active and we thought it might be helpful to give you a little bit of a bird’s eye view as to sort of what’s been going on, maybe talking about some of the properties and some of the deals that we had mentioned from a couple of months back, as well as some of the other properties that we’ve viewed.
00:01:49:24 – 00:02:08:07
Some of them, we actually got some free things. You’ll hear about the three things that we got at some of the properties that we visited and talking about some of the current deals that are floating in the air and we’re hoping to bring together in order to close on a couple different deals.
00:02:08:09 – 00:02:26:08
Yeah, I think it’s going to be helpful being a listener in kind of hearing what we’re thinking about, what we’re dealing with, how we go about thinking about some of the options that we have about what does it look like when we are dealing with a deal and long live deal and property and we’re managing those properties or having a manager manage those properties.
00:02:26:10 – 00:02:44:16
That’s what we want to do. We want to give an update on some of those deals that’s been going on for, they say, the last six months and kind of just run through what we’ve been thinking about. So Kyle, where you want to start, Let’s start with most top of mind. What do you feel like right now is something that was like you just dealt with this and let’s riff on it.
00:02:44:16 – 00:02:46:21
Let’s chat about that thing for our listeners here.
00:02:47:02 – 00:03:10:05
Yeah, well, I mean, the thing that I think has been most top of mind for me probably consistently and for the longest period of time for this is going on five or six years now is the idea of insurance policies in particular PA whole life policies. And as you friends know, I went down the rabbit hole many years ago really trying to uncover.
00:03:10:05 – 00:03:45:06
At first it was all about infinite banking and some call it bank on yourself. We even had an episode where we discussed some of the benefits for the average person and why. That’s a strategy that I think everyone needs to at least explore in order to figure out how they can benefit from it. But for those who are actually doing some investing or owning businesses, in particular, those who have corporate structures like us, the invested teachers, we have corporate structures in place not only for our real estate, but you and I, for our math business, but also Matt for his real estate business.
00:03:45:06 – 00:04:15:21
They call it a prec. And ultimately what I’ve been learning, not through the course and not through even the books that I’ve read, but through the networking that I’ve done. And I’ve actually landed on what I believe is the dream team for me to dig in because I’ve been on this search to try to find people who are, I guess, is obsessed with designing these policies in such a way that it’s going to give maximum benefit to the end user, to the actual policy owner.
00:04:15:23 – 00:04:41:06
And I thought I had it all figured out right. I had this strategy. We had been employing the strategy ourselves, and it’s still a great strategy, but then entered a company that we sort of ran into and went down the rabbit hole with them and they’ve got such a unique way to help. Specifically, as I mentioned, people with corporations and this tax minimization strategy.
00:04:41:08 – 00:05:12:17
I’ve been going up and down this thing with a fine tooth comb. And basically I said on that day I was like, I need to become a member of your team. And I’m hoping to have some announcements related to that in the very near future. So if you’re listening and you’re an invested student here and you have a corporate structure of any type, be it property holdings, whether it’s in business, whatever you’re doing, you definitely need to get in touch with me because holy smokes, such a mind blowing approach.
00:05:12:17 – 00:05:28:20
And right now that’s on my mind because I’m looking to take care of us with this structure. And I’m still doing a ton, a ton, a ton of digging and a ton of learning just to make sure that I know this thing inside and out as well as I know participating whole life policies in general.
00:05:28:22 – 00:05:38:03
You said, is mind blowing. But what would you say is the biggest benefit to a person who does have a corporation for the strategy that you’re you’re thinking about, you’re exploring?
00:05:38:05 – 00:06:06:03
Well, let’s just put it this way. I thought the best I could do, which was amazing, by the way, I thought the best I could do was to set it up in such a way that upon my death, that the value that I accumulated inside my corporation would be able to go mostly tax free to my heirs and that, even for those who are listening, are probably like, Well, that’s pretty phenomenal.
00:06:06:03 – 00:06:29:22
Basically, you’re kind of turning your entire corporation into almost like a tax free savings account, right? Which is fantastic. The one caveat is I have to be dead for that to actually happen. So a little bit of a pain in the butt, but still better than, say, pulling money out and having to pay tax on it. Well, all I can say at this point is that this strategy is even better and it’s 100% compliant.
00:06:29:22 – 00:06:50:23
But I would argue that 99.9% of people are unaware of it, in particular business owners. So that’s all I can say on it at this time. But for those who are interested, we definitely hit that invested teacher dot com website and hit the contact bar and reach out and let’s go to call and see if it’s a good fit for you.
00:06:51:00 – 00:06:56:11
All right. That’s a good update. I know that’s been weighing on you. Your fact finder has been going told over time. Yeah.
00:06:56:11 – 00:07:03:06
What’s on your mind? Because I know you’re not as geeked into whole life. You just trust me with that judgment and all you.
00:07:03:08 – 00:07:23:12
Guys finding job is to figure those things out. What’s on my mind? I guess. Most recently, I’ve been thinking about our property that we had our private deal. So we did talk about this particular deal on the podcast prior, so we wanted to give you an update here, just to give you a quick background. If you didn’t listen to those previous episodes or have them fall along.
00:07:23:12 – 00:07:44:17
But also it’s been a while since we’ve chatted about this particular deal. We originally had an opportunity to give private money to a contractor who was then going to flip the property and then sell the property and we would get that private money interest rate back. We restructured it to be a little bit more safer for us. We put ourselves on title and remember that.
00:07:44:17 – 00:07:57:20
Kyle, our Plan A was to get our interest money on the flip. Plan B was if everything goes south and this contractor could not live up to his end of the deal, which means get the property flipped and sold by a certain date.
00:07:58:00 – 00:08:01:04
Do what they said they would do.
00:08:01:06 – 00:08:23:05
Then our Plan B was because we restructured it in this contract, it was okay with this restructuring that we would be on title. That was our property. We bought it and then had him doing the flip that we would basically lock him out and change the locks. And unfortunately Plan B did happen. So where are we now? Because Plan A was supposed to be done in complete, probably almost just under a year ago.
00:08:23:05 – 00:08:33:00
Yeah, we should have had this property I think going on the market maybe a month or two from now because the closing was in August of 2022.
00:08:33:00 – 00:08:50:03
I thought we had three months I think was the original deal was three months and I think it was one those November into December and then six months I think came along. And that’s when we, I think, locked the keys, changed the locks. We went in with a new contractor, fabulous new contract, not a new contract. Like new to us.
00:08:50:03 – 00:08:51:18
Got out Jam solution.
00:08:51:18 – 00:09:11:05
Yeah. J went in there and went to town and I think now the update we’re at right now is Jay did a phenomenal job flipping that house and keeping our costs low because now we are incurring all the costs of the flip. So our original deal was we wanted just really the interest on the private loan and that was the way we had pretty much structured it.
00:09:11:06 – 00:09:30:19
Now, since we own the property, we owned the property that having why I think this contractor walked away or wasn’t going to continue the work was the value of the property. He’s going to be underwater at sale anyway. So I think that’s why he basically said, I’m not really going to do any work here. And basically he walked away before we changed the locks, in my opinion.
00:09:30:21 – 00:09:50:04
And then, yeah, so now we own a property that’s kind of underwater. We can’t really sell it for what we paid for it and that kind of thing. So we basically we’re trying to do one of these, let’s improve the property, let’s force depreciation. So we dumped some money in there. We redid the kitchen, we redid the flooring, we did everything, everything from the studs got changed and it looks phenomenal.
00:09:50:04 – 00:10:08:17
I think I saw some pictures just the other day because Jay was sharing them with us. We got our realtor, Matt is going in, I guess Matt went in today, took pictures of the property, going to be listing it. So that’s an update. We are at this point where almost a year later we are going to try to list it to break even, I think.
00:10:08:17 – 00:10:29:22
Right, Kyle We’re trying to do it like a break even kind of deal here and see where we are, see where the market is, because we did have to invest extra money into it to bring the property to appreciate the property. But because of the market, we’re trying to now think of Plan C, I think we always had plan C in the back anyway, whether we sell it or whether we rent it.
00:10:29:24 – 00:10:57:12
Exactly. And I think we should just nickname the property the chameleon, because it just a chameleon. It just changes from month to month. And ultimately Plan C I think right from the get go. So we knew on at the very beginning with Plan A, we felt that the property that they overpaid, that this particular contractor overpaid. He instilled trusts that I would argue was not disingenuous.
00:10:57:15 – 00:11:21:18
It wasn’t real. And you live and you learn. However, thank goodness that we did do what we did because otherwise we’d be trying to sue and we know what that’s like, right? Trying to sue somebody without money. It’s like, Yeah, great, you won, but there’s no money there to pay out. So for us, I think in the back of our minds, we’ve been looking at Plan C as sort of a longer term strategy.
00:11:21:18 – 00:11:48:03
So it’s tying up some of our capital that we would have never intended to maybe land there or put there temporarily. But ultimately we’re at a place where, hey, we could be cash flow neutral here and just hang on to what is now a super solid property. So it’s a single family home. It’s in a nice neighborhood. It’s actually just on the edge of we’ll call it one of the more sought after schools in the school district.
00:11:48:03 – 00:12:06:11
So if there are street over there in a different school and people are all for whatever reason, really like in the one school on that side of the street. So you know what? At the end of the day, it’s like, hey, it’s too much of a pain in the butt as that’s been great learning experience. But also, again, just kind of raises that flag for you.
00:12:06:11 – 00:12:36:15
If you are doing private, direct private lending to make sure that you’re protecting yourself or that you at least know the risks and what you’re getting yourself into, if you’re going through a fund where it’s a pool of private money, that definitely is a safer option based on the track record of the company that’s doing this work. However, it’s still worth noting that if the company does overleverage themselves, if they overextend, if they get too lenient on their underwriting, things can happen.
00:12:36:15 – 00:12:57:19
So you just have to be aware. You just have to be cautious of that, just have to know what’s possible. So I think what we should do is on the Shownotes page, we should definitely put a couple of picks up. We’ll also get a link to Jay’s website because Jay’s amazing. If you’re in Windsor, Essex area, I’ll tell you he not only is he a great friend, but this is just how he does business.
00:12:57:19 – 00:13:14:23
Like he’s so passionate about the work he does. He sometimes we have to say, okay, Jay doesn’t need to be that nice because he really takes pride in his work and it’s really turned out really, really well. So that’s a deal that pretty soon I think is going to be maybe in the back of our mind. So we’ll see.
00:13:14:23 – 00:13:34:08
Hey, you know, the market in the more entry level homes area is still pretty active right now. So you just never know. Right. We’ve got amazing discount on some granite countertops for the kitchen. We’ve really put a lot of love into this thing because again, in our minds, we were thinking, hey, you know what? We might be hanging on to this thing for a longer term.
00:13:34:10 – 00:13:52:24
Let’s make sure we can put the best tenants that we can in there in order to not only preserve the property, right, keep it in good condition and take care of it. Pride of ownership, but also to potentially sell it and see if maybe there’s the right buyer out there. So that one hopefully will go to the back of our minds.
00:13:53:01 – 00:14:03:24
Let’s talk about some of the shopping that we did over the past couple. Why don’t we start with the one the most I’m going to call it the most unique of the shopping experiences that we had.
00:14:04:00 – 00:14:16:16
Yeah, I can’t remember. I think Matt had a seller and he was looking to sell this and Matt was like, You know what? You guys got to meet me down by the harbor. We’re like, Okay, let’s.
00:14:16:20 – 00:14:19:19
It’s like, Kyle loves waterfront property, So I’m like, I’m in.
00:14:19:19 – 00:14:42:14
Let’s go. So we met Matt down by the harbor and we get out on the dock at the harbor and he’s like, There it is. There they are. We’re like, What are we looking at here? And he’s like, these three houseboats. We’re like, houseboats. What do you mean? And so this particular deal, the owners of the houseboat is a business and the Airbnb style business where, yeah, it was really unique.
00:14:42:15 – 00:15:03:20
They were selling three houseboats that were at the dock and you can rent by the night. I think they had like a two night minimum and you could stay on the houseboat. You had a nice little kitchen inside and they were really nice inside. They were done Well, he could be like a little party boat. You don’t take these boats out there in the water, but it’s not like you drive them out and have a party on the boat.
00:15:03:20 – 00:15:20:13
They’re like a hotel room on the water. And so we looked at those. We looked at, hey, we did analyzing on the numbers. And it was a very unique opportunity. And I think we were really leaning towards it until we started to play with the numbers and we’re like, Yeah, yeah, the numbers have to work. So let’s look at the numbers.
00:15:20:13 – 00:15:41:14
Even though we’re like, you know what? We could be boat owners, we could be owners of Airbnb, short term rental. I mean, the numbers don’t work, right? We looked at some of the rents, we looked at what we’d have to buy them for and what the upkeep would be. We did our due diligence and it was pretty quickly I think we realized that it wasn’t going to be a cash flowing business the way it made it look like was.
00:15:41:16 – 00:16:00:10
Right, right. And I think and who knows, that was a few months back now. So who knows? Maybe the sellers have softened him. But I think also through that experience and I’ll share, they’re called the vintage grapes. So there’s actually a website. You can go check them out. You can book them. I actually was going to book a night with my wife in the summer while kids were at camp.
00:16:00:10 – 00:16:19:02
I was going to do that and we ended up doing something else, so I didn’t get a chance to. But they’re super slick, They are so cool and it’s like when you’re there. I got to say it, the feeling I got was it’s like ego, maybe getting in the way where you’re like, How cool would it be to say that you own this houseboat business?
00:16:19:02 – 00:16:20:16
You know, not a great reason.
00:16:20:16 – 00:16:23:01
No, no, that’s that’s the problem.
00:16:23:01 – 00:16:34:18
And I guess that’s what I want. Everyone listening to be aware of is like when you get that feeling, that feeling sometimes can trick you into thinking like it’s the right move, or it’s almost like you’re you’re rationalizing.
00:16:34:21 – 00:16:35:22
00:16:35:24 – 00:16:56:00
Your rational brain starts saying, Maybe the universe wants this for you, whatever you want to tell yourself the story you’re trying to tell yourself. And here’s the crazy part. So the numbers didn’t work. We didn’t push on it, right? Because again, we’re not in the short term rental business. Yeah, We’re like, listen, if there was a fire sale and it was a deal you couldn’t refuse type thing, we’d be all over it.
00:16:56:00 – 00:17:12:22
Of course, that’s stupid. US. We do that on flips that we know we shouldn’t be doing. Right. But if it’s a good enough deal, we’ll do it here. That wasn’t the case. But maybe for the right person who knows, Maybe can see where they can put a little bit of sweat equity into it and maybe up some of the daily rates or whatever.
00:17:12:22 – 00:17:36:00
Who knows? It might be the right fit. But more and more, as we not only ran the numbers, so thankfully the numbers didn’t work for us like it didn’t yell out to us like, great deal. But even if it did, the one thing that we started talking to ourselves about too, was like, there is a cost to the amount of hassle that that would potentially introduce into our lives, right?
00:17:36:00 – 00:18:15:12
That’s like a business. Rental Properties is a business too, but this is short term rentals. Who knows what else you’d have to learn about the insurance being that these are boats, even though they’re not driving the boats. There is a lot going on there. And I think the reason we wanted to share this experience with everyone listening is because you’ve got to always pause and think to yourself, What is it that you want to do, not just for the monetary benefit or the wealth benefit, but also is it going to suit your lifestyle because that would be a much more hands on experience unless you’ve accounted for whoever you’re going to hire on, which again,
00:18:15:12 – 00:18:28:04
is another expense. It’s beyond what you’re going to pay a property manager for a long term rental, right? Because these are short term turnovers. So those were some of the things too, floating in our mind. Well, is the upside really there for us?
00:18:28:09 – 00:18:58:10
It reminds me of a episode. I was listening to Alex from Ozy and he was talking about this idea of risk and you recently listened to it as well. He was talking about if you had an extra hundred thousand dollars, what should you do with it? And I think Alex would story was he was talking with Grant Cardone, who you’ve listened to or you were in investing, you might know who Grant Cardona’s grant card owns like you should buy the biggest building you could find because Grant made a ton of money in real estate and he’s like, You got to go all in on real estate.
00:18:58:10 – 00:19:20:16
Whereas Alex or Mosey, if you know Alex or Mosey, he is an investor in builder of businesses and so Alex is like that sounds so risky to put money in real estate. He’s like, I’d rather put my hundred thousand dollars into buying a business because I know that business. I know I can make that be successful. That is no risk on my end if I go that route.
00:19:20:16 – 00:19:40:17
Whereas Grant Gardner is gone, there’s no risk on my end if I buy the real estate. I think both of them have total different perspectives just because of their skill sets. So for example, if we’re going to buy boats, it’s kind of like, Well, we’ve only been buying real estate and long term rentals. We don’t have a lot of short term rentals.
00:19:40:17 – 00:19:55:15
I know Matt’s got a short term rental, but we don’t have a lot of short term rentals, So it’s kind of like if we go down that, let alone buying a boat that has to sit at a harbor. And what happens if the harbor changes rules about what boats are allowed to sit there? What do you do in the wintertime?
00:19:55:20 – 00:20:14:00
What happens if the boats break down? Boat is a depreciating asset. It’s not a home. It’s not it’s not going to appreciate in value. Right. So it’s like, wait a minute, I think this is out of our wheelhouse. It’s riskier to go down that route, just like it’s risky for Alex Mosey to buy real estate. That part last some of the numbers.
00:20:14:00 – 00:20:21:05
We’re like, That’s it. That’s not for us. And that’s kind of where we landed with the houseboats. Even though it would have been cool to own a houseboat.
00:20:21:07 – 00:20:40:14
Totally worth it. Yeah, exactly. And I think we basically came to the conclusion that that was in the too hard been for us. Not meaning like, hey, if things significantly change, we’re not saying that, hey, a couple episodes from now, we might be like, guess who owns houseboats? That’s totally who we are. But it would really we would want to make sure that there’s a big enough margin of safety.
00:20:40:14 – 00:21:06:03
And that margin of safety has to be bigger on an asset or an asset type or class that maybe you don’t know as well. So Grant Cardone might be able to go in there and be like, Hey, I’ve got like a 10% margin of safety, whereas Alex Formosa might need a 40% margin of safety to feel comfortable going in, even though they both are worth hundreds of millions of dollars, both of these guys.
00:21:06:03 – 00:21:34:16
Right? So I think it’s again, it’s just a reminder that it doesn’t matter how many investments you have, how long you’ve been doing it, or how new you are, it’s still easy to find yourself sort of down a rabbit hole and wondering whether something like maybe there’s an opportunity here, an opportunity there. But you really do have to pause and sort of get back to that higher level and kind of look around and go, okay, is this really as good an idea as we think it is right now?
00:21:34:16 – 00:21:58:07
Because again, that excitement sometimes can take over. And after we visited those boats, we went on I think we had talked about on a previous episode how we had an eight unit multi-use building under contract. We came up on the original price that was higher than we wanted, but then had it conditional on inspection. After inspection there was lots lots to do.
00:21:58:08 – 00:22:25:12
So we wanted to come back. We did come back. We couldn’t come to terms, so we walked from that deal. While recently that agent came back to us and said, Hey, seller has come down to this point and I’m going to say that we’re still off by about I think it was about $50,000, not the end of the world, but that was still significant enough for us where we thought, you know what, we’re just going to wait and we’re just going to see.
00:22:25:12 – 00:22:30:21
And who knows, maybe there will be an opportunity for us to come back to the table at some point down the road.
00:22:30:21 – 00:22:47:22
The interesting thing about this property that we looked at, I think we did a whole episode on this particular property and during our walk through in the inspection is that not long after we did our inspection and we put our offer about what the roof was going to cost us less than what the offer was, the original offer was.
00:22:47:22 – 00:23:05:06
So we came back saying, Hey, we want to adjust. This is the new offer based off what we’re seeing on the inspection. And they let that fall, right? They just didn’t come back and say anything because they knew that that wasn’t something that they wanted to do. But not long. This is the interesting thing, Carl, is I was curious about the mindset and really the implications.
00:23:05:08 – 00:23:30:24
Not long after that we saw it was listed in a price reduction. So where I was wondering was in this particular property is that now you’ve reduced the price by I don’t know, it was reduced per price by a little bit, but you now have a report. We have this inspection on file that says you need to put in 90 K for the roof and all the other things and now you’re reducing your price.
00:23:30:24 – 00:23:51:23
So now think of the next buyer going into this to look at this. They’re going to go in and they’re going to look at it, okay, well, I’m okay maybe with paying this new price because they see the new price, it’s lower than what we were thinking about initially. And then they do their inspection and it’s bound to come up with, hey, you’re going to need 90 K for the roof and other things.
00:23:52:00 – 00:24:12:01
So now the thinking is that person, if they were like us, they’d be like, Well, we’re going to offer 90 K less than that. So now just because you reduced your price, I feel like they’re asking for all other offers to be lower than our offer because. Exactly. Because they lowered their price after you didn’t eliminate the issue.
00:24:12:03 – 00:24:14:17
The issues are still there. They’re not gone.
00:24:14:19 – 00:24:32:23
Yeah, they and they do. It’s not like you’re stamping it on the photos, by the way. Arrow pointing to Roof. You’re going to need to add blank for this. They’re not being that open now. If they ask, they’re going to be honest about it because it’s a material fact. Now it’s a material fact. So they have to do it, but they’re not going to put that right in the MLS listing.
00:24:32:23 – 00:24:34:12
Like, Hey, by the way, I need.
00:24:34:12 – 00:24:49:00
A budget 90 K for the roof. I think if they had come down, we would have been like, All right, we’ll pay 90 K less and get the roof done. We were ready to do that. We’re ready to jump on it because I think we saw a lot of potential there. But I’m curious where this one’s going to go because I don’t think it’s done.
00:24:49:00 – 00:24:50:19
This building has not sold. It’s still there.
00:24:50:24 – 00:25:10:14
Yeah, it’s still there. And it’s and we know what they bought it for a few years back so they had bought it probably at a bad time. Will argue based on where the market was heading and then now it’s kind of softened a bit. So it’ll be interesting to see. And we try to be very honest with people and just say like, here’s where it’s at and we’re not trying to play games.
00:25:10:14 – 00:25:26:23
We’re just this is what it’s got to be and we totally get it. If that’s not going to work unless we want to get more creative in another way. And they seem a little bit pressed to do that. So so we continue to shop, we continue to look around and we can’t speak about all the properties we look at.
00:25:26:23 – 00:25:52:11
So first of all, let’s just go and mention that we analyze the numbers on a lot of properties. Pretty much every property that goes up comes in, unless the number is just I can tell just by the price per unit that I’m like, there’s going to be no way that that’s going to be able to cash flow. So I might let some of those slide, but a lot of them I do ask bigly right away, Flip me the numbers.
00:25:52:11 – 00:26:17:07
I’ll run the numbers If there’s anything that’s even potentially interesting, then we’ll start to dig and start to ask questions. But we actually don’t go to look at the property right away because that takes a lot of time and effort. If you don’t have any sort of contact. So right away we’re asking about BS, we’re asking about mats pulling like when they bought the property, what they bought it for.
00:26:17:07 – 00:26:33:09
So that can give you a kind of insight. If they bought it 15 years ago, then they didn’t refinance it. Then they might have a lot of equity in there. And that could be a good indicator that a VTB might be an opportunity or an option. Oftentimes, agents don’t even know what that means. They say, Well, what is that?
00:26:33:09 – 00:26:52:12
And that’s a bit shocking to me, but I guess not that there’s a lot of agents out there that actually aren’t investors, which I guess is also shocking to me. But I guess not that they’re selling all of these homes and they see properties going up, but yet they’re not participating in the market. But yeah, those are first things we do.
00:26:52:12 – 00:27:07:23
And I would argue we’re analyzing at least I mean visual. We were analyzing what every property that goes on in the market, but then actually running numbers on 5 to 10 a week, right. Just kind of see where we’re at, make sure that we know what’s going on in the marketplace.
00:27:08:04 – 00:27:19:23
You put the alerts right, The alerts just pop in. Hey, new multifamily up. Let’s look at it because I think I know the alerts on multifamily. You have just alerts on multifamily or single-family. Just multifamily probably. Right.
00:27:20:00 – 00:27:43:18
Just multi and water. I love seeing what’s coming up on the water and if there’s creative opportunities there as well. But now looking at wholesaling is a much better place to be if you can get on some wholesaling list. So we’re on many of those and that actually brought the attention or brought a home to our attention in a nice neighborhood, on a nice street in Windsor.
00:27:43:20 – 00:28:02:07
It’s a two bedroom, one bath, all brick. And I was like, Hey, let’s go out. So called Jay and me and Jay head on over there. The price looks okay. We go in, we’re like, Hey, it doesn’t need a ton of love. It’s going to need a facelift. I approximated maybe 50, 60, okay. It’s like, okay, this could be great.
00:28:02:07 – 00:28:24:18
And we’re looking two bedroom, one bath is pretty tight. So again, it’s like I would have rather had a three, three one, three, two if possible, but whatever will live. And there’s a basement and they’re like, well, listen, in the basement you can go down there. But two weeks ago they had it sprayed a second time for bugs, for some type of bug or whatever.
00:28:24:18 – 00:28:41:17
I was like, okay, so it’s okay. And they’re like, Yeah, yeah, it’s fine. Go down there. So me and Jay go down there and we’re looking around. Jay’s looking on the corners and he’s noticing some wet spots and things. So we’re starting to go, okay, Foundation might be a little iffy here. There could be more here than this.
00:28:41:17 – 00:28:54:03
5060. Okay, we’re thinking. So we’re starting to kind of go, okay, whatever, and start looking at the panel and all these things. And all of a sudden I’m just standing there. I’m just what’s touching my legs. I was like, what is it like, what is going on?
00:28:54:03 – 00:28:56:09
Moving around, moving around is weird. A cat down there.
00:28:56:11 – 00:29:10:04
I was going to say, you know, when a cat kind of brushes against your like the hairs of your leg a little bit but doesn’t actually do it. It’s just a little bit and I look down and I’m like, there’s bugs jumping on me all over my legs. And it was like, Oh my God, look at these bugs.
00:29:10:04 – 00:29:31:08
And Jay’s like, lice. He’s yelling lice. I’m like, I think that’s how lice work. But anyway, we run up the stairs, we’re itching ourselves. We’re like, What is going on here? And they’re like, Oh, shoot, The bugs must not be done yet. It must have been fleas. We looked it up. I’m like, There are fleas all over. We’re taking sanitizer and just lathering it all over our legs and all over.
00:29:31:08 – 00:29:52:00
Now it’s in our head, in our minds. That dirt all over you were itchy everywhere. And we’re like, Oh, my God. We stayed for an extra hour just trying to make sure taken our shirts off. Everything was it a deal breaker? It was a deal breaker for us. And we just it was just mind blowing to me. But I thought it was worth telling everyone because guess what?
00:29:52:02 – 00:30:14:22
It’s not all fun when you’re doing this stuff. Make sure probably wearing pants next time is a better idea. I’m always wearing shorts. Bad move. In that case, that’s the first time I’ve had this issue. But you’re going to see some really interesting things, especially if you’re finding properties that you are looking to add some value to and you’re not just taking and sort of buying as a turnkey sort of operation.
00:30:15:00 – 00:30:38:10
Yeah, that reminds me of a story Matt told us, which is again an update for a story that he ended up owning a property. He’s got a client that I think jumps into deals trigger happy. Yeah. Is like, I’m going to get that. That’s a no brainer The price there nothing sight unseen. Put money down and I think in this particular one he bought it and then he’s like, Matt, I just bought you a property.
00:30:38:12 – 00:30:58:07
And that’s like, What do you mean? There’s body of properties like this one. I’m going to assign it to you. And then I think Matt said, okay. And so I think they’re going to do a flip on it, something like that. And they go to check out the property they pull up. And I think it was like one person, two people come out right away and start yelling at them like, Can I get up?
00:30:58:07 – 00:31:14:23
And Matt laugh. He’s like, What’s going on? Find out there’s Hell’s Angel biker living in there and they can’t get rid of them. I forget how he got rid of them, but it was like the guy wouldn’t leave. Matt owns this house and he bought it sight unseen, and the person who sold it to him failed to tell everybody that I think it was.
00:31:14:23 – 00:31:30:09
Our father was still living in the house. Yeah, yeah. Didn’t leave. And it was like, How do we get this guy out? It’s like another one of those, Hey, you’re going to run into some crazy crap, you know, looking at especially, especially jumping in without doing some of the due diligence you need to do.
00:31:30:13 – 00:31:51:02
Well, ironically, that property is where Jay and I went. We were supposed to go see that property because Jay was going to do the work at that place. So that was couple of weeks after. So they had vacated. But when we checked out this garage and the bull and all the locks on this garage and in the garage, there was no windows were like, Oh man.
00:31:51:03 – 00:32:00:15
And it was multiple gas lines and there was stuff going on in here, I don’t know. But I was like, Man, there’s a lot. And then like the chain in the lock, in the basement around the pole, we were like, Oh God.
00:32:00:15 – 00:32:01:00
00:32:01:02 – 00:32:22:02
Something Breaking Bad. It was definitely one of those things where you go, you just get this weird feeling inside and you’re like, There’s people that live differently than you do. But you’re absolutely right. If you’re going to be in this world, and especially if you’re going to be looking to try to maximize, say, value, especially in a market like this one.
00:32:22:04 – 00:32:49:08
It’s been a seller’s market for quite some time now and maybe for the next little while, maybe we’ll slowly enter into more of a buyer’s market where you can kind of find things that don’t necessarily have to be really, really beat up and require a lot of time and effort. And let’s be honest, maybe you’re the type of person this is the other piece that I think is really key and it kind of comes back to our Francois property, even though we had no intent of, let’s say, buying that property.
00:32:49:10 – 00:33:10:17
The reality is, is it’s going to be a great property. It’s going to bring in income and it’s going to be an easy long term hold for us. You don’t have to necessarily leverage to the max in order to be successful. Maybe you start and you do less leverage on a property, maybe it’s on a nicer property just so you know what you’re getting into.
00:33:10:17 – 00:33:29:02
And ultimately, that’s how I started. When I came in, I bought a property that was priced higher, probably double the price than what I could have gotten into, and I paid all cash for it. So I didn’t leverage I used my home equity line. So I guess I was borrowing in some sense, but interest only as the minimum payment.
00:33:29:02 – 00:33:49:06
So I was putting myself in a position where I could feel comfortable and sleep at night. And now that ten plus years later, I’m in a place now where I am trying to look for more specific opportunities. But when you’re entering, don’t feel like you have to be that person and don’t feel like it has to be the perfect deal.
00:33:49:08 – 00:34:14:18
Ultimately, at the end of the day, analyze some deals but don’t overanalyze because if you find that you’ve been doing this for a year or two years, three years, time’s just going by and sure you’re learning and you will learn along the way. But ultimately you’ve got to decide at some point, what’s my real goal here? And let me just go for that and let’s not worry so much about it being perfect because you are not going to be perfect.
00:34:14:18 – 00:34:20:03
Maximum effort, but not maximum perfection, because that’s not really how it works.
00:34:20:09 – 00:34:54:12
I think that’s a good way to end our update episode on on some of the things that we’ve been shopping for, experiencing, looking at giving you a big take away there. Kyle So I think that’s a great way to end. Everybody, we want to thank you for joining us to listen to our update and we hope that you leave a five star rating and review on your podcast platform because sharing this puts it in front of new eyes and also new ears for potential investors, potential people who are changing their lives, just like you’re changing your life through real estate investment, through investing in general.
00:34:54:12 – 00:35:00:11
So make sure you follow us on all social media as well. Investor, teacher on YouTube, Twitter, Instagram and Facebook.
00:35:00:15 – 00:35:26:01
Hey friends, Remember, links, resources, transcripts and all other goodies can be found at invested teacher dot com forward slash Episode 42. Again that’s invest in teacher dot com forward slash episode four two and any page on our website has links to get in touch with us. Whether you’re in windsor-essex and you want to get in touch with Mr. Matt Bigley to either list your home or help you find a home.
00:35:26:03 – 00:35:48:18
Hey, if you’re looking anywhere in Ontario for a refinance, maybe you’re looking at renewal time. Maybe you just want a little bit of advice as to where you stand now. Are you in a good position? Should you be doing something differently in order to minimize the interest you’re paying on your mortgage or in your current assets or whether you should be doing something?
00:35:48:18 – 00:36:14:09
Now you can get in touch with John. John is a licensed mortgage agent here in Ontario and really specializes in trying to help people really think through things in a more creative fashion. And finally, of course, hey, if you want to reach out to me, if you’re curious about how part your life can be, that solid ground, that foundation to your assets in a safe way, whether you have a corporate structure or not.
00:36:14:09 – 00:36:32:19
If you do have a corporate structure and you haven’t gone down this rabbit hole with someone who knows what they’re doing, my friend, you are late to the party. And I would love love to hand you a nice little invitation to join that party. So head on over to invest in teacher icon, reach out to any or all of us.
00:36:32:19 – 00:36:40:12
And of course, if you’re interested in JV deals, there’s links on the website for that too. We can’t wait to hang out with you next step.
00:36:40:14 – 00:37:07:15
All right. And best students, Class dismissed. Just as a reminder, the content you heard here today is for informational purposes only. You should not construe any such information or other material as legal tax, investment, financial or other advice.
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