"Inspired to Invest" Podcast

How To Build Wealth Faster | Wealth Wednesdays Webinar 1 With Sibtain Panju

• Serena Holmes

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💸 How To Build Wealth FASTER💸

Welcome to Wealth Wednesdays, An Interactive Webinar Series Hosted By "Inspired To Invest"

To watch rather than listen, click here.

Unlock the secrets to building a lucrative real estate portfolio and achieving financial independence as we chat with with Sibtain Panju.

Alongside his wife, Sib has transformed their real estate ventures into a seven-figure success story, granting them the freedom to leave their full-time jobs. 

Discover how they overcame limiting beliefs like the lack of time and analysis paralysis, and learn why a bias towards action is crucial for achieving your goals.

Explore insider strategies on maximizing real estate investments, with a spotlight on multifamily properties. 

We delve into the nuances of refinancing, the role of property managers, and the subtleties of joint ventures. Sib shares real-life examples that illustrate the importance of conservative financial planning and how surrounding yourself with seasoned professionals can bolster your wealth-building journey. 

Dive into the intricacies of navigating risks, managing interest rates, and understanding the impact of CMHC regulations on your investment approach.

Shift your focus from speculative to cashflow-based investments, and uncover the potential of finding underperforming properties for value-add opportunities. 

Sib highlights the importance of cultivating relationships with realtors for off-market deals and maintaining a proactive communication style. 

As we wrap up, reflect on the broader impact of real estate success, from empowering community contributions to establishing a strong financial foundation for future generations. 

This live webinar is brimming with actionable insights and invaluable experiences, offering you a comprehensive guide to wealth creation through real estate.

ABOUT WEALTH WEDNESDAYS!

Every other Wednesday, we will be bringing together business owners, real estate investors, and seasoned entrepreneurs to share insights, real-world strategies, and breakthrough stories on the journey to wealth.

Our sessions cover various topics including personal finance, stock market strategies, and financial planning. Get ready to boost your financial knowledge and make smarter money moves!

We will be diving deep deep into all things wealth-related. Whether you're new to investing or a seasoned pro, you'll find valuable insights, tips, and tricks to grow your wealth.

This is your chance to gain actionable advice on how to expand your wealth in a way that aligns with your purpose and values.

🎙 What to Expect

• Proven tips on real estate investing, business scaling, and wealth preservation• Honest conversations about mindset shifts for abundance

• A community of like-minded people committed to prosperity. Whether you're just starting or looking to take your financial legacy to the next level, this is the place to be!

Bring your questions, ideas, and a notebook—because every Wealth Wednesday could be the spark that fuels your journey to true financial freedom. 🚀🔔

Sibtain Panju, C.F.A. from Pragma Properties will be joining us for this chat - and it doesn't get any better than that :-)

The first half will include the opening discussion with our host, Serena Holmes along with our guest, Sibtain. We will open up the session for questions from the audience for the second half so it will be completely interactive.

Get ready to level up your financial game at Wealth Wednesdays Hosted By Inspired To Invest!

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🚀 CHECK OUT MORE INCREDIBLE CONTENT ON ‘INSPIRED TO INVEST” 🚀 

👉🏼https://www.youtube.com/playlist?
list=PLT5

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Speaker 1:

Hey everybody, welcome to Wealth Wednesdays.

Speaker 1:

This is a new webinar series that I'm hosting in association with my podcast, inspired to Invest, to discuss all things related to abundance, prosperity and wealth.

Speaker 1:

Sibtein Panju is one of my past guests on Inspired to Invest from actually the same time last year, and him and his wife have grown their real estate portfolio to more than seven figures in just three to four years, so they could quit their full-time jobs. I thought that was pretty amazing and a good testament to all things related to wealth and abundance. Most of their multifamily value-add projects have resulted in them doubling the value of their properties and they help to bring high quality, affordable housing to Canadians and on a monthly basis, they also donate money to proceeds such as providing education, clean water, food, shelter to deserving families and orphans. And, perhaps most importantly, they want to help support others by creating passive income through real estate. And I know you've had a lot of things going on in this past year and, like we were saying just a little bit before we started, it's been quite some time since we have connected, so I'm excited to update and just kind of dive into all these different topics.

Speaker 2:

Yeah, it's been a while. Great to be here. Thanks for having me on as a guest.

Speaker 1:

Great. So, for anyone that is joining us here I know we've got a couple of people and a couple of people may be logging on shortly we're going to go through some general Q&A that I put together with Siptein and then we'll open up the floor for anyone that has questions as well. Sound good, hey Bernita, how are you? I'm good. Is this? Is this being recorded? It is Okay. Feel free to stay on and join with us if you're comfortable to do so. I want to rewatch it just in case. Yeah, of course, make sure everybody knows what's up, I guess, in terms of questions. So we're going to start with things like mindset and abundance, because I think that's really the foundation for all things when you are looking to grow wealth in your life and in your business and things like that. So, starting with limiting beliefs, what do you think are some of the most common limiting beliefs that you've experienced and you also see from other people, even with, and also, what kind of things do you do to overcome them?

Speaker 2:

Yeah, I think a lot of people think that they don't have enough time and they're sort of stuck in their routine. They're stuck in their nine to five and they might have kids at home. So they feel like that they don't have enough time, but you can always make time. So I definitely believe that's a limiting belief that sort of stops us all from progressing. I think something else is people want clarity on the entire picture, like they want to do something but they want to get stuck in analysis, paralysis. So they're sort of trying to see the entire picture, learn everything they can, but the reality is you got to take action and unless you take action, you can't, you can't progress. So so we, we, so, in order for us, to us, to personally, overcome those limiting beliefs, we, we sort of force ourselves to take a bias towards action.

Speaker 1:

Yeah, yeah, I mean, I agree, and I think that sometimes it's a limiting belief and sometimes it's just not organizing your time efficiently, right, like I think sometimes people overestimate what they can do in a certain period of time and then really underestimate on the flip side what they can do right. But I really believe kind of reverse engineering what your plan is, just to kind of make sure that you are working towards those goals, because otherwise it can feel really intimidating to think well, I, I want a hundred billion dollars. Well, who doesn't?

Speaker 2:

yeah, how are you? Going to go about achieving that right so exactly and and like, like it's a whole whole uh prayer to efficiency. Right, like 20 of your work will drive 80 of the results. So just making sure you do the 20 first, and then it'll be much better so now.

Speaker 1:

Now, since you did leave, you have your family, you've got a robust social life and then you're also building this big portfolio. So, when you were starting down this path, how did you manage your time to make sure that you didn't have those?

Speaker 2:

blocks. We would block some time during the day where we would focus on real estate, when we had full-time jobs as well. So we had full-time jobs as well. Right, so we had full-time jobs. We were nine to five, but there were specific hours in the day where we would just focus on real estate. It could be during lunch, it could be like from five to seven, for example, and you know, like it was during COVID, when we started this in 2020, well, the multifamily portfolio, at least, and you know, the kids' activities had stopped, which sort of helped us out quite a bit. So we had a lot more time, and that was the catalyst right Another pandemic.

Speaker 2:

Yeah, Thank the pandemic. Yes.

Speaker 1:

If you don't laugh, you'll cry, right? Now for someone who is watching that doesn't know a lot about your specific background. I know I gave a little bit of a bio, but maybe you can talk about how you started with the first property and then how you've now expanded it into like different things.

Speaker 2:

Yeah, sure. So we started with the sixplex. Well, we've been investing in real estate for many years but single family or condos, things like that and you know there are always negative cash flow. So in 2019, we started getting some education and training on real estate investing. We joined some networks and then in 2020, covid hit, so that really helped us out in terms of our time.

Speaker 2:

We had two boys in hockey. We were sort of on a treadmill I take the GO train at 7am, get back home at 6.30, take the kids to hockey. I would eat dinner in like 30 minutes or in the car sometimes, but when COVID hit, we had a. I would eat dinner in like 30 minutes or in the car sometimes, right, but when COVID hit, we had a lot of time. So we started spending time in different cities like Kingston, windsor, hamilton, things like that, and so we bought our first sixplex a few months later, close to London, ontario, and we did the value-add strategy there. We renovated the property and then, a few months later from that point, we you know, in 2020, as well we bought our next property in Kingston, ontario, and that process, because I think sometimes people would look at that and say, well, you know, I can barely afford my own house like an apartment building.

Speaker 1:

So can you talk a little bit about that process and if you engaged money from other people early on with joint ventures and how you kind of scale that into the bigger opportunities that you're pursuing now?

Speaker 2:

Yeah, so the the first six plex that we had, we, we bought it ourself, we bought it with our own money. It was 100% owned by us. Even the 16 plex, we were going to actually buy it ourselves. But then we started talking to our friends that, hey, we're doing this and people are like, hey, can we invest with you? So we said, okay, sure, you can invest with us, and you know, the next property we'll buy it ourselves, maybe with our own money. And so you know, we started with the first one ourselves, but then every property after that we've had partners on the property, capital partners who enjoy the passive income.

Speaker 1:

Yeah, no, and I don't blame that. Now, in terms of numbers, can you walk me through what that looked like in terms of Windsor being one market Kingston being another? I know that you've also done I think out east and maybe potentially down south at this point. I know through the organization you're with now now I see your boots on the ground and stuff like that- yeah, yeah, so, so sorry you.

Speaker 2:

You want to hear about numbers and these. What do those?

Speaker 1:

numbers look like, so in terms of acquisition costs, what kind of money you're putting in rehabbing them and then what they're appraising at afterward and how that process like just in terms of engaging investors, so that you can, under anyone watching can really understand, like, what that looks like and why that can be so valuable to someone that is looking to scale on both sides of the fence yeah, yeah, fair enough, fair enough.

Speaker 2:

So we haven't started. We went down to the states. We didn't start investing there yet. Uh, we, we feel like we can do the same thing as in canada, that we can do the States. So we thought we'd be scaling in Canada first, but in terms of the numbers. So I'll give you an example of a Kingston property, right, a Kingston property. We bought it for 1.9 million, 16 units, and in about a year and a half or so we were able to renovate most of those units and increase the rents on the property. And, as most people know, the value of multifamily properties is based on the income. So as we drive the rents up, the income goes up quite a bit, and then the property value basically doubled in a few years. And then what we do is we refinance the property and we pay the investors back their cash, but the investors still own their share in the property. So they sort of, but the investors still own their share in the property, so they sort of have that appreciation for the rest of their life.

Speaker 1:

Yeah, yeah, I mean, I think that's a strategy that's proven just to be so successful because people can repurpose their capital and essentially recycle it while they're continuing to build. And I'm sure that some people here may understand it, but some people don't. But when you refinance a property, you're not getting taxed on that money that's coming out so that could be original capital and then some, and you're not necessarily seeing any of those capital gains taxes because there haven't been any sales happening.

Speaker 2:

Exactly, exactly.

Speaker 1:

Now, in terms of taking action for someone that's just newly started out. Obviously, your experience is a little bit more real estate focused, but when you think of wealth as a whole, what would you give in terms of a piece of advice for someone that is just starting out on this journey?

Speaker 2:

Yeah, I think the first thing is try and surround yourself with people who are already doing what you want to do. So if you want to do short-term rentals, then try and find people that are doing it and maybe even partner up with them on a deal or two. Right, you can be a small partner and you'll learn a lot along the way. One of my favorite things to tell people to do is buy a sixplex as a first property. It's perfect, like fiveplex or sixplex, because it's commercial financing.

Speaker 3:

Yeah.

Speaker 2:

It's not too big it's overwhelming. Yeah, buy a sixplex in the secondary market. You can still get them for like $800,000. So you put down $200,000 and you can purchase the property.

Speaker 3:

Yeah.

Speaker 2:

And typically you know you can buy a value-add property where you do some renovations.

Speaker 3:

Yeah.

Speaker 2:

You know, I have friends calling me saying hey, I found a property in Sault Ste Marie. You know, hey, how does this property look? And I'm always saying, like, buy the first property. Maybe within a couple hours away from where you are you can go visit the property, you can learn, you can see the, you can meet the contractors, you can meet the property managers, things like that, and then, as you scale up, you can always have a property that's further away, right?

Speaker 1:

Yeah, yeah, I think it takes time to get there, right? I mean, I had Adriana from Ace Properties on my podcast a little while back and she was talking about how they had some vacancy issues with their property managers and as soon as they took it in-house and Ben moved there and started to take on that management, they're pretty much at like no vacancies whatsoever, right? So it's not ironic because property managers actually make money as a percentage of the rent coming in.

Speaker 1:

So you think that they want to see full occupancy, but at the same time, like you know, they were able to kind of create a different strategy that worked for them by one of them being able to be on the ground. So I guess it just depends on where you're comfortable starting.

Speaker 2:

Yeah, or or like but, but. But I just want to add that property managers absolutely can make or break your, your, your business yeah and so, for example, we actually use ben in one of our, our properties and it's he's great. So if you find the right property manager, it's almost like.

Speaker 1:

It's almost like you're there yourself, right yeah, yeah, I mean I can understand, like I haven't worked on that scale. But even when I had an issue at my property in edmonton, it took three months for the property manager to go in and and then the electricity was just blowing through the roof Like it went from 300 to 800 to 1100 to 1500. What are they doing? Lighting up the whole block, like what's going on.

Speaker 1:

Yeah, that's a bit much it was just a giant space in the garage because it gets so cold there in the wintertime. They didn't want their car to start, but like it was literally just sucking up that much electricity. So I knew something was wrong. But it took that long for them to go in and spot check and find out what the issue was.

Speaker 1:

So, basically the tenants paid back that cost, but it was still frustrating for me because I'm like when are you going, you know? So it's just one thing to consider. You talked about, you know, when we're talking about funding these projects. I was on a call recently with a lawyer and he was talking about how there's been issues with properties closing if the lawyers find out that it's a joint venture.

Speaker 1:

So I'm curious to know if you've ever heard any feedback like that, because it's obviously a very popular strategy where you've got the working partner the money partner, who maybe is the one qualifying or putting up the capital have you? Heard any instances like that, because that was the first time I've ever heard about a property not closing because of the lawyers understanding the nature of that relationship.

Speaker 2:

Yeah, so we're always very, very open with the banks. But what we do typically is we have everybody on title on the corporation.

Speaker 3:

Yeah.

Speaker 2:

We don't do the joint ventures like on a side agreement. So if we have three investors on the property, they all own shares in the corporation. But I haven't even heard about this. But I can see where the banks are coming from, because if they have a lot of investors that may not have the capital strength, there could be some side deals in the background which the banks don't like right. So we're normally upfront with the banks, okay.

Speaker 1:

That was the first time I'd ever heard of it on a call I had maybe a month ago and I was like, oh, that was always. It was always OPM. Everyone always talks about other people's money and why that's such a popular strategy. So it was news to me.

Speaker 2:

Yeah, interesting.

Speaker 1:

In terms of mistakes. So I mean we're both involved in pretty significant communities where people are doing a lot of great things, and then we've also seen a lot of things been done very wrong.

Speaker 2:

Right so with that being said, what would you say are some of the common mistakes that some people may run into when they're starting out, or you know, especially as yeah, I think what I've seen in the past couple of years is people take too much leverage on sometimes, so they might take promissory notes, things like that, with high interest rates, or they might take private lending when they're starting off. So they might be buying a property worth, let's say, $2 million and they're like, hey, I'm going to renovate this thing, it's going to be worth $3 million, but in the short term I'm going to take this loan for $1.8 million, but it's a private loan, so it's going to be at like 12% interest rates If that renovation takes longer. You're now paying 12% interest on $1.8 million, right? Yeah, that's north of $200,000 roughly, right, so on an annual basis. So now you're paying the renovation costs plus an extra $600,000 over three years, and now you're underwater, right? So all that effort you're putting in, you're going to lose money.

Speaker 2:

So one of the strategies that we do is we always try and get a decent interest rate, although it might be a fixed loan. Like, we bought a property in Fredericton and we were going conventional financing and we weren't getting a good rate. So we went with CMHC and we're locked in for five years, but we're only paying four and a half percent, right, so you de-risk the whole investment when your interest rates are lower.

Speaker 1:

Yeah, a hundred percent, I think. That's one thing I think I'm surprised by. When you know people are getting ripped apart by these rising interest rates, and I mean I guess it depends on what their terms are like and stuff like that but I often wondered why they didn't lock in, you know, after the first couple interest rates increase yeah, yeah, that's true, I'm starting to see these things usually variable. You can flip it to fix at any point in time.

Speaker 2:

Usually yeah.

Speaker 1:

Even if it's something that you possibly could be going in a little higher. I mean, no one expected that escalation to happen so high and so quickly, but I just wondered sometimes with people that have run into issues, why they didn't.

Speaker 2:

Yeah. So what's also interesting is we did a lot of deals in 2020, 2021 when the rates were low, and the reality is the banks and the brokers make a lot more money when you kind of renew your mortgage right or you're trying to look for another mortgage. So the advice from everybody was don't lock it in because it's better to go variable. It's better to you know, nine times out of 10, better to go variable.

Speaker 1:

And for 15 years it was.

Speaker 2:

Exactly yeah that's right.

Speaker 1:

I can appreciate that. In terms of things like risks. What would you say is a calculated risk that you've taken that you felt like really significantly paid off.

Speaker 2:

Yeah.

Speaker 2:

So I'll go back to that Kingston property because it was one of our first multifamily properties and we found out about that deal like three hours before the offers were due and so, luckily, we had crunched a lot of numbers by that time.

Speaker 2:

We had run through a lot of, walked through a lot of properties, we sort of knew what these properties were all about, and so what we had to do was crunch the numbers and put the offer in within a couple hours, and we couldn't even drive there because we were about two and a half hours from Kingston. So we saw everything by video, we asked all the questions we wanted to ask and we put the offer in at $400,000 over asking price, so about 20% over the asking price, and we knew that the building could support that, because we had recently offered on a building in Niagara Falls which was 2.7 million, 16 units. So we thought, okay, we can, we can definitely offer 1.9 million on this one. So so you know, we, we did that, we got the property like sight unseen within a couple hours, running the numbers and uh and yeah, that property paid out, like today it's worth four million dollars. We just recently refinanced it again for the second time well, and what year?

Speaker 2:

so I guess you bought that 2021 uh, we bought it at the end of 2020, october 2020.

Speaker 1:

Okay, so it's basically doubled four and a half to five years.

Speaker 2:

Correct, correct. Yeah, we also spent some money on renovations, but still, yeah, yeah.

Speaker 1:

And then how much would a property like that cashflow at this point? Because obviously part of it is that you want to refinance and pull out that equity, but you also want to make sure like you're still cashflow positive after you pull that money out cash flow positive after you pull that money out, right, exactly, exactly, yeah.

Speaker 2:

So so from a cash flow basis, it might have, like you know, in terms of dollars, like 30, $40,000 cash flow, but after paying down the mortgage, you have mortgage pay down there and then you have the passive appreciation as the rents go up slowly, right, so?

Speaker 1:

And would you have had something like that in a CMHC mortgage?

Speaker 2:

Yeah, and would you have had something like that in a CMHC mortgage? Yeah, so this last one, we did CMHC yeah.

Speaker 1:

The first refi was not CMHC on that property. Okay, have you run into any issues? I feel like some of the things that I keep hearing about from different larger investors, a big challenge is just CMHC changing the rules all the time right. So initially it was based on, you had to have one of their approved lenders. Then now there's different points in place, whether it's for energy efficiency or if it's for affordable housing, and now they're changing it where instead of 95.5 it's 75.25, and there's different things that are happening right.

Speaker 1:

So I'm just wondering what your thoughts are on. You know, just trying to plan so conservatively that if there are unexpected changes like that, that you're able to roll with it.

Speaker 2:

Yeah, so you're absolutely right. Like CMHC has changed quite a bit and we know some colleagues, some friends who invest and they have had issues with that, with all the rule changes. We've been lucky, you know, they haven't affected us. Yet we are looking at a development on one of our pieces of land right now and this rule just came down, maybe a couple of months ago now, where it's 75-25 if you want to build, because CMHC is being more conservative on land development and we were running all our performance, like a few weeks before that, at 90% loan to cost, loan to cost, rather right. And now we're like now we we talked to some, uh, some of our brokers and lenders who are, who are very close to cmhc and they said, listen, you know, like, do the underwriting at 75, you might be able to get 85 because of your experience, because of your knowledge, because of your portfolio yeah but so we're underwriting everything conservatively, which we always try and do.

Speaker 2:

But you're right, you got to expect, in real estate in general, you got to expect the unexpected. You're going to get a call one day saying, hey, there's a flood in your basement. You're going to get a call one day saying there's an issue, right.

Speaker 1:

Yeah.

Speaker 2:

But it's a long-term game.

Speaker 1:

I feel like issues that you can thing. That surprised me at CMHC is that they would at least kind of allow for like a little bit of lead time to say like if someone's been working on building a department, you'd say, well, this is what you're planning for anyone that's gotten up to this stage within three months, they can still kind of phase in based on that, right like.

Speaker 1:

it just amazes me that the government, or whoever the power would be, are not thinking of these ripple effects right, cause it's really been very, very difficult and it's something that could just, you know, blow up a company completely and all their plans if that would no longer work. So I mean, I don't know who's listening out there but, one thing that. I was just surprised that there wasn't like a phase in or phase out of programs right.

Speaker 2:

I think part of the problem is that when they do give some notice, they get this huge influx of applications right, yeah. So I think one time they did give some notice for a couple of months. I think it was a change they made in June, I remember.

Speaker 3:

Yeah.

Speaker 2:

And all these applications started pouring in. Then they created this huge backlog right. So it's a tough situation that they're into, yeah, but they do change rules quite a bit and it is a challenge.

Speaker 1:

Now, speaking of challenges, what would you say is maybe a circumstance where you had a misstep, and how did you bounce back from that setback?

Speaker 2:

Yeah. So I think this would take me to probably going back to 2008, when there was a crash in the market. You know, we built up our nest egg, sort of thing, so to speak. We'd invested in pre-construction single family condos stock market.

Speaker 3:

Yeah.

Speaker 2:

And all that stuff just tanked overnight and we had left room like hey, if this goes down by 20%, we're still going to be okay.

Speaker 3:

Yeah.

Speaker 2:

But the properties have gone down by 30, 40, 50%, in some cases right.

Speaker 3:

Yeah, yeah.

Speaker 2:

So we learned at that time not to speculate right. So that's when we started shifting gears to more stable investments like multifamily, for example. Yeah, to shifting gears to more stable investments, like multifamily, for example. We focused on more cashflow based investments where, like, if you buy an investment, that's positive cashflow, you can hold it forever Even if the market goes down. Positive cashflow, you're fine. Yeah, so we've changed our whole strategy at that point to investing in cashflow based investments.

Speaker 1:

Yeah, I think that that's really smart and there's so much to do with timing, because I've got family that lives in Florida and that was right around the same time that my cousin actually got married and he just bought up a bunch of lots that you know they dropped by 90% or something. So I think he bought it had been like 25,000, he bought them for like 5,000 a lot. So he put like four or five of them side by side and just built like a 2200 square foot garage and a fairly big house in a pool and like all these things. But he got it for, you know, 25,000 as opposed to like 150,000 or whatever that was Right.

Speaker 1:

So there's so many things that factor into that, and it's just sometimes nobody can have a crystal ball and expect that. Right but that's all part of it In terms of real estate as a whole. So why do you personally think that real estate is such a powerful tool for building wealth? And again, is there anything that you think is really complementary to that, or do you just 100% intend to stick with real estate until the very end?

Speaker 2:

That's a good question. So I personally love real estate. If you look back, even in history, real estate has been doubling every 10 years, pretty much. So with real estate you can use leverage. It's one of the few investments you can use leverage safely. If you use leverage in the stock market you can get burned pretty fast. There's one crash and you're out right.

Speaker 3:

Yeah.

Speaker 2:

With real estate, especially multifamily real estate, you can use leverage, put down 25%, put down 20% and even if the property goes up 20% over the next five years, you've doubled your money because you've only put down 20%.

Speaker 3:

Yeah.

Speaker 2:

So that's one of the reasons I love real estate Also. I mean, there's different strategies in real estate, so you can find underperforming deals. You can do a value-add strategy. You can buy new properties as well, which is great because the maintenance costs are a lot lower. You can also diversify because you can buy in different provinces, things like that.

Speaker 1:

So we also do buy in different provinces for that reason, for the diversification effect, like right now, ontario's been going down, but Alberta's been pretty hot, right yeah. Now, in terms of finding those opportunities, are you cold calling any apartment building owners or are you just looking at things that are on market?

Speaker 2:

No. So what we do is we have a network of realtors that are helping us find off-market deals all the time. So, like, every morning, I'm looking at 10 deals that are coming in, which are off-market deals. Almost every day, I'm talking to a different realtor who's bringing me deals and we let them know that, hey, we're going to get back to you regardless. Like, we'll tell you within 24 to 48 hours if we're interested or not. So I'll definitely respond to them, we'll meet them, we'll spend time with them. We built that relationship. So I think it's very important that if you are getting information from realtors, that you actually respond to them, even if you're not interested hey, not interested in this one, this one looking for something bigger, looking for something a little bit different then they'll keep you in mind. If you don't respond, they're just going to be like, okay, this guy's not interested yeah they lose momentum right like I can understand, appreciate that they're.

Speaker 2:

They're busy too, and if you're not responding, they're they. They just feel like they don't see your name anywhere, right yeah?

Speaker 1:

No, I can understand that Now. I know we talked about in your bio just your passion for community and giving back and things like that. Can you talk about what role that plays for you just in terms of achieving true prosperity and fulfillment in your life?

Speaker 2:

Yeah, I think people say that money can't buy happiness. I think it can. When you give it away is when you're very happy, like when you see what it can do to help other people, it actually can buy happiness, right? So one of the things we do is we give $10 per unit that we own per month as charity, and what that forces us to do is be grateful that we're able to do that on a monthly basis where it reminds us that, hey, we have this ability to do this. We're very grateful. It sort of feeds our why as well, because you can sort of grow your portfolio to a point. But then, what are your longer term goals? What are you going to do with that extra money? What are your longer term goals, like, what are you going to do with that extra money, right? So I think it sort of motivates us to build more and that way we can increase that monthly giving program, right?

Speaker 1:

Yeah, no, and it's nice that you can just plan that budget from the get-go right. I mean, when I used to have my we would plan this event for Peter Gilligan because he's the owner of Marimi Homes and he's just got of Marimi Homes and he's just got so much money he gives away like tens of millions at a time.

Speaker 1:

So we ran an event to say thank you, you know, as a part of a PR event, for a $10 million donation to St Joseph's Health Center, which is where he was born. But he's also given $50 million to sick kids. He's given, you know, $40 million to other hospitals because health is really a big passion for him. But imagine to grow a business so big that you're literally writing checks for $10 million or more at a time.

Speaker 3:

Yeah, yeah, exactly.

Speaker 1:

Pretty, pretty incredible Going back and giving your younger self advice.

Speaker 2:

What would you tell yourself when it comes to something like money, mindset or investing, knowing what you know, I think I would say like make sure you do something which you enjoy, because if you enjoy it, then you'll be good at it and you'll have a passion for it.

Speaker 3:

Yeah.

Speaker 2:

In terms of the money side of things, I definitely say like, hey, it's not time. It can be timing the market, but it's really time in the market because things go up and down but long-term real estate has always gone up. So so definitely invest early. My, my, my kids are looking for deals right now as well, Like like they're, they're sort of learning the business as well, because 18 and 15 now, no but, but. But you know what my, my 15 year old he's. He's been, he's been working with us for for a few years now and and you know, he was like 12.

Speaker 1:

Right, so yeah, that's amazing.

Speaker 2:

Yeah, and is there?

Speaker 1:

anything you do with them. Like, obviously they've seen you and NCA grow your portfolio, but I I talked to someone recently that talked about adding your children, for example, to your credit cards to build up their credit. Are there any things like that that you do with your family just to make sure that they have, like that stronger foundation as they do start to go out and go off into the world?

Speaker 2:

yeah, so so my, my one son, just turned 18 right now, so he's getting a credit card. They've had bank accounts for a long time. Yeah, um, yeah, but I, I think I think as long as they have a credit card when they're 18, they start spending some money, paying it back on time. I think their credit is going to be fine from that standpoint. Yeah, I'm not doing too much yet, but one of my kids he has his own stock market account. He's investing in the stock market. He was helping me manage my portfolio part of my portfolio, stock portfolio over the past couple of years. He was learning about stocks as well. Um, you know, you know, he. He goes to guelph, so he's part of their student investment council as well, where he's sounds like it feels like he's spending more time with that council than he has at school oh gosh, yeah, but that's amazing.

Speaker 1:

At least you're giving them that backbone that I spoke to was a mortgage broker in California, so she talked about that. I think when your kids are 12 or 15, that you can add them. Like they don't necessarily even have their own credit card, you just add them to yours and it builds up their credit from like a very early age.

Speaker 2:

Oh, interesting.

Speaker 1:

It's just a way to kind of help them improve their credit score and things like that. And then within the Wealth Club we have a couple of people that do really interesting presentations on crypto. So if he has an interest in things like, stock you know, that could be something that they could find fascinating as well.

Speaker 2:

Yeah, yeah, for sure, for sure.

Speaker 1:

So I figure now we're just going to open up the floor. So, brandita and Babette, if you have any questions at all, the floor is yours.

Speaker 3:

I think one of my questions is any advice on like finding the right partner Because, like in a lot of these businesses, it is working with other people. So, just like any suggestions like family, not family.

Speaker 2:

So do you want to be the capital partner or the working partner?

Speaker 3:

What's the difference? I didn't even know there was a difference.

Speaker 2:

Yeah, so the capital partner typically, I mean, you don't have to be, you can be both, like you can be the, you can bring in some capital and be the working partner as well. But but typically what happens is there are people who are too busy and and don't have the real estate expertise. So what they do typically is they bring in the capital. And then there are people who are, you know, maybe full-time or most of the time, real estate investors and they'll be the working partner and they might even put in some capital as well. And so, in terms of being the working partner, in terms of partnership in general, you know you want to work with people you like, know and trust.

Speaker 2:

You know we were very careful who we partner with. We make sure we spend enough time with them. Typically, people that we partner with we've known for years. We've known them in different settings. We know people that know them as well. Sometimes we've traveled together. So, yeah, definitely spend a lot of time picking the right partners. And what people also do is they feel like they have to have multiple partners and, you know, try and grow things, but in reality, like if you have a few good partners or even one or two partners. You can kind of scale together right.

Speaker 1:

Yeah, I mean there's a lot, just that you can just never ask too many questions.

Speaker 1:

Like I think there's been a lot of distress in our community in the last little while and you know people were comfortable based on referrals or what they saw from an optics perspective, based on the size of someone's portfolio, but they didn't really know the true financial health of what was going on in those companies.

Speaker 1:

So even things like asking about the financial health and seeing things like their financials and their other corporations and how everything is connected, and understanding truly like what financials and their other corporations and how everything is connected, and understanding truly like what that web of corporations might look like, because more often than not people will register a corporation for each property, right? So if they have a fairly large portfolio, you want to see what that whole picture looks like, even if you're just a partner on one project or if you're joint venturing one-to-one with that person, just so you can understand what everything looks like as a whole. There's also things like a court case search tool that you can actually look up and see if they have ever had any past claims. Again, you may think you know someone well and then you might be like oh well, they have had sporadic claims for the last 10 years. That could obviously be a big red flag. So there's different things that you can do, and I just think that you can never ask too many questions.

Speaker 3:

Thank you, that's a good idea. I didn't even know about that stuff. So it's true, you want to be thorough with whoever you're investing with yeah, and I also get separate legal counsel right.

Speaker 1:

Like I think sometimes strategically people think, well, I'll save money, we'll have the same lawyer. But you know you're kind of representing different interests and stuff like that. And and when you are starting out, sometimes even having that second opinion like I had a lawyer look some things over going back maybe five or six years ago. But then I learned from other lawyers later like that never should have even happened the way it did. So you know, even though that could cost a little bit more money up front, it could save you money in the way it did. So you know, even though that could cost a little bit more money up front, it could save you money in the long run. So it doesn't hurt to get a second opinion, at least when you're starting out and getting your feet wet the first time you're seeing, you know, limited partnership agreement or joint venture agreement or something like that.

Speaker 3:

Okay, that makes sense, thank you.

Speaker 4:

Yeah, I have a comment. I think one common belief system is that you need money to make money. Yeah, so I think there is some truth in that right.

Speaker 1:

Yeah, but you need money. It doesn't have to be your money.

Speaker 4:

Right, okay, okay, yeah, but then that's a strategy like use someone else's money.

Speaker 1:

Absolutely.

Speaker 4:

To make yourself money.

Speaker 1:

Absolutely yeah, yourself money absolutely yeah.

Speaker 2:

Yeah, like like most, most people who are scaling their portfolios um including like funds, including um, like almost everybody that I know is using investment investors money right right because with with real estate, you will you will cap out with your own money at some point. So if you're buying these buildings, which are 100 units, for example, you know you're you're definitely going to be using other people's money, right? So with most of our properties, we have partners investors on them, right? We only have a few. The few that's just us.

Speaker 1:

Yeah, and I think it's all about kind of setting it up. You don't want to bite off more than you can chew if it's your first time. But working with a lawyer that can set up your contracts appropriately, potentially working with a securities lawyer, like it, really just depends on the size of the asset that you're acquiring, how much money you have to raise or how many investors you have to engage. I think, siv, you can correct me, but I think for some of those acquisitions, for example, I think it was like if you have over 50 investors, then you have to involve an exempt market dealer. So there are just certain things from a legal standpoint and compliance. You want to make sure that you understand what that looks like. It's one thing to go in and buy property it's 500,000 or a million but if you're bringing on serious capital, then you just want to make sure you're not going to run into any legal issues down the road.

Speaker 2:

Yeah, I mean you can pretty much raise money from credit investors, friends, family, close business associates. Beyond that you need to go through an exempt market dealer and friends and family like friends meaning they have to be your true friends, not somebody you just met three months ago, right, you have to know sort of their dog's name and things like that yeah, and for anyone that doesn't know, like, there's different categories.

Speaker 1:

So there's like an eligible investor, and then there's accredited, and there's certain values that you need to have from a standpoint of regular income as well as your overall net asset value. Um, so there's maybe so you can talk a little bit more about that, but there's again different categories that you would look at in terms of what would be acceptable to take money from, and the reality is you just don't want to take every penny somebody has and then if something goes wrong, they lose everything, right? So there are certain protections that are in place from a legal standpoint to make sure that companies don't take advantage of people in that regard.

Speaker 4:

Thank you. I have another question. Yeah, if you wanted to start out, and you wanted to, you know invest in your first real estate property, what would you suggest?

Speaker 2:

so what I would?

Speaker 4:

yeah go ahead family home, maybe a condo, just rent it out.

Speaker 2:

I don't know, yeah.

Speaker 2:

So if it's your first property, what I would do is almost do what I did is buy like a five or six unit property that is underperforming, that has upside in the rents, and buy it in like a secondary market, for example, where the prices are a lot lower. So the reason I say get at least a five-unit property is because the financing for that property is based on the income for the property. It's not based on your personal income. It's a different financing strategy. You can also qualify If it's five units or up. You can do CMHC financing as well. So you have more options in the financing side of it. And long-term, when the rents go up, the property value is based on the rents and the income, whereas if you buy a single family or a condo, the value is based on what the next door comparable sold for. It's not based on the rents or the income. So for all those reasons I would recommend at minimum five units and then go from there, scale up from that point.

Speaker 4:

Thank you.

Speaker 1:

Another thing to consider. I know that you started in Ontario and everyone's got different opinions. I think a couple of challenges specifically in Ontario could be for one affordability.

Speaker 1:

So, many things that can cash flow, depending on where exactly you're looking. And then the other thing is like the LTB, so just be prepared for the fact that we're not in a landlord friendly province. So sometimes people may be more attracted to going a little bit further away, just to make sure that they've got more control over their asset if they do run into any non-payment events.

Speaker 2:

Yeah, exactly.

Speaker 1:

You want to jump in again, Bernita? Oh no, I'm good, I just came back. I was just catching the last part. All right, no worries. Is there anything that you wanted to add in closing, sid?

Speaker 2:

No, I just wanted to say you know, I still think real estate like there's fear in the market right now, which is the exact time you want to get in. You know the properties are. You have time to analyze the properties. You have time to offer on the property. There's a little bit of room for to negotiate the properties. The interest rates have come down enough that the properties are cash flowing. So I think it's a good time to take action, but definitely walk through a lot of properties, crunch a lot of numbers and then make your first offer based on that. And the last piece of advice would be to get a good power team. So make sure you're talking to people who are investing and saying, hey, who's a good realtor, who's a good power team? So make sure you're talking to people who are investing and saying, hey, who's a good realtor? Who's a good property manager? Who's a good appraiser? Right? So you have to build out your power team in order to be successful in investing. It's a team sport Like. You have to leverage your team for everything.

Speaker 1:

Yeah, no, absolutely Awesome. Well, thanks to both of you for joining us for tonight. We're going to be having a recording of this available if you ever want to go back and watch it again, and we also live streamed it over YouTube, so it'll be available there as well. But thank you for your time tonight. So I think you've got so much wisdom from everything that you've learned in the last five years, and I think it's really helpful for anyone that's going to be watching.

Speaker 2:

Thank you. It was great being here. Thank you.

Speaker 1:

The views represented on this podcast are for general information only and does not constitute investment or other professional advice or an offering of securities. The host and guests featured on Inspired to Invest make no representations as to the performance of any particular investment. Should you decide to make an investment, you are responsible for conducting your own review and analysis. It is recommended that you obtain independent legal, accounting and tax advice from licensed professionals.