"Inspired to Invest" Podcast

How To Build Generational Wealth | Wealth Wednesdays Webinar 2 With Arlett Tygesen

• Serena Holmes

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Let's get into it on our 2nd edition of Wealth Wednesdays, an interactive webinar series about how to create lasting wealth.

To watch rather than listen, click here.

Discover the transformative journey of Arlett Tygesen, a distinguished expert with nearly two decades in capital markets and private equity, as she shares her dynamic shift from institutional settings to the fast-paced world of commercial real estate investment. 

Arlett's riveting experiences, from managing portfolios for a Canadian Public Pension Fund to navigating the multifamily sector in the Southeast and Texas, provide a wealth of knowledge for those eager to understand strategic real estate ventures. 

Alongside her stories of corporate migrations and unique financing opportunities, Arlett sheds light on her latest endeavor—a 120-unit property acquisition—offering listeners a fresh perspective on wealth creation.

We navigate the entrepreneurial mindset and the obstacles Arlette faced transitioning from corporate roles to entrepreneurship, highlighting the importance of collaboration and self-discovery in pursuing ambitious goals. 

Learn how Arlett overcame analysis paralysis, built a trusted network, and harnessed the power of social media to reach potential investors. Her insights into capital raising using platforms like Instagram and LinkedIn reveal innovative strategies for engaging with audiences and maintaining strong, transparent relationships with investors, particularly when unexpected challenges arise.

The episode concludes with a deep dive into cross-border real estate investment strategies, offering practical advice for Canadians venturing into the U.S. market. 

From tax implications and legal structures to the benefits of the 1031 tax exchange strategy, Arlett shares crucial insights for maximizing investment potential. 

This conversation is rich with personal reflections on building a legacy rooted in mindset and financial literacy, rather than just wealth, aimed at preparing future generations for a purposeful and confident life. 

Tune in to equip yourself with strategies that can transform how you approach real estate investment and wealth building.

ABOUT WEALTH WEDNESDAYS!
An Interactive Webinar Series Hosted By "Inspired To Invest"

Ready to level up your wealth-building game?

Join us for Wealth Wednesdays, an interactive webinar series hosted by Inspired To Invest where we dive deep into the art and science of creating financial abundance, prosperity, and generational wealth.

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 c

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Speaker 1:

Hey everybody, Welcome to Inspired to Invest. I've got Arlette Tigason joining with me to speak for Wealth Wednesdays, which is hosted by Inspired to Invest. She has a 17 years experience in capital markets, primarily focusing on private equity asset classes, both an institutional investor on behalf of Canadian Public Pension Fund and as a capital raiser for a major US bank asset management group. It's like a little bit of a tongue twister there.

Speaker 2:

So bear with me.

Speaker 1:

The past five years Arlette has actually devoted herself to building an investment portfolio in the CMF space, so commercial multifamily in the United States, specifically in Southeast in Texas, and she's got a 52 unit currently under contract and I know she's continuing to grow from there. So she'll shed some detail on some of the exciting projects. She's got a 52 unit currently under contract and I know she's continuing to grow from there, so she'll shed some detail on some of the exciting projects she's got going on. The team has combined 75 years of real estate investing experience and they currently have more than $140 million in assets under management with more than 2,000 doors. We're going to be going through some questions in the first half and, as I said to Angelo, if anyone has any questions, charles, thanks for joining us as well. If anything jumps out to you, feel free to not let the moment pass and jump in with any of your questions and then, of course, at the end we'll open it up for a typical Q&A. I've got just a really short disclaimer here that I'll read as well, just to make sure I'm compliant.

Speaker 1:

The views represented in this webinar are not for general information only. They do not constitute investment or other professional advice or an offering of securities. The hosts and guests featured make no representations as to the performance of any particular investment, and should you decide to make an investment, you're responsible for conducting your own review and analysis. It's recommended that you obtain independent legal, accounting, accounting and tax advice from licensed professionals before making any investment. So thanks again for joining us for Wealth Wednesday. How are you today, arlette?

Speaker 3:

I'm great, thank you. How are you? Thank you for inviting me.

Speaker 1:

Thanks. I feel like I've gotten to know you a little bit better in the last little while, but we essentially met in an event out by the airport, I guess around this time last year, and we've connected a few times since and I really admire all the things that you're doing and also trying to do things the right way Because, as we know, there's been, you know, some different uncertainty and distress in the market, so I really thought I wanted to, you know, create Wealth Wednesday so we could be interactive, educate people on different options and opportunities available and really how to create abundance, prosperity and wealth in their life, and do it right from the very beginning.

Speaker 3:

Well, I think that I applaud you. This is a really great forum and important conversations. I do want to update you on something, though that 52 unit, that's in ancient history. Now we have 120 unit under contract. Oh boom. A portfolio transaction we're working on right now and we just launched it about a week ago on the capital raising side, and it's really exciting. It's a great, great, great project. We're excited about that.

Speaker 1:

Yeah, and that's the thing Everything moves so quickly, right? So maybe you can shed a little bit light. Since Angelo and Charles probably haven't connected with you in the past, Maybe you can shed some light on you know where you started with building this aspect of your career and what kind of things you have going on.

Speaker 3:

Sure. Well, I know Charles, but I haven't met Angelo and a few other folks. How are you, charles? Good to see you. I, you know I started my real estate journey almost six years ago now. You know I'd worked professionally in private equity, as you mentioned, for many, many years. I worked in a few different aspects of it too. On the limited partner side, as a fiduciary, I worked capital raising side for a big bank in New York, raised tons and hundreds of millions of dollars. They're just zeros at that point.

Speaker 1:

You don't think about capital raising for a bank, right? So maybe I mean that could be pretty common for anyone in private equity, but can you talk about that Like I mean, I didn't know banks even did something like that.

Speaker 3:

Well, I was on the asset management side and we had in the whole ecosystem. We were acting as an intermediary for general partners who were trying to access limited partners. So we were the capital raising unit of the bank for external sort of third party general partners, and so they would come to us and it was like a cattle call GPs would interview a whole bunch of us. You know the intermediaries, capital raisers across Wall Street, bay Street, and you really had to position yourself as a world class expert in capital raising, understanding what the ethos was for limited partners and we're talking large pension funds all the way down to the smallest family office. So you know, depending on the strategy of the general partner, you had to know the universe of limited partner investors, what the appetite was, all the legal and fiduciary requirements.

Speaker 3:

It was a very, very high bar. You know very professionally wrapped up. You know great presentations and roadshows. We were constantly on the road bringing these GPs to the. This is what I miss about that aspect of it, because it was kind of just like call your Rolodex, set up the meetings. People wanted to meet these GPs.

Speaker 3:

It's not even a question of, if it's just when it's like how could I fit you a device schedule? And now, on this side of things, that I've been doing now for the past five or six years and everyone on the call can agree with this if you've ever been in capital raising is who are those people I need to meet? Like, how do I meet them? Because this is more of the retail side of the industry. You know it's a very uncollected universe, right? So if you're meeting people here and here and here, it's very random until you're established and you have a big roll of the decks or a big database. But most people stay at the beginner stage of capital raising for a lot longer than they expected, because it's a lot more challenging. There's no.

Speaker 3:

I keep asking, everywhere I go, anyone who's an expert in capital raising. I'm asking them, like what are your best practices? Where do you find those pockets of passive investors? And I put together my little kind of cheat sheet of how and who and I work with my VAs and we put, you know, sales navigator programs in place and we reach out to components and because I raised a lot of capital in the States. So you know, you reach out to the RIAs and you know and then you have to create.

Speaker 3:

This is the other side of it, which most people would understand if you've been in this industry is you're actually creating the solution for people. You're telling them why they need to invest in this. You're solving a problem for them. You're telling them that if you're interested in generational wealth or you need to diversify again away from 100% of your portfolio in the stock market, this is a non-correlated investment. You're teaching them and you have to understand who you're talking to for what they want to hear. So if it's an RIA, someone with a retirement fund, you need to say, like okay, so in the US you can open up something called a self-directed RIA and you need to go through an intermediary and put there's a solution.

Speaker 1:

That's, I think, the question that goes to who you're speaking with, right, Like I met someone that has a private equity firm and collectively I think there's maybe 20 primary investors that have like $500 million. Like you know, if he has to raise $5 million, he's like it takes me a couple of hours. So those are very different connections and people to talk to than the person that might only have like $50,000 or $100,000 to invest with and it obviously takes a lot longer depending on those circumstances. But to your point about the questions, one of my mentors had written a book called Suggestology and it talks about whoever's asking the questions is a person that controls the direction of the conversation, Because obviously you can tailor everything you're saying around the answers that you get back right. So I think that's such an important part of building that rapport and building those relationships early on, because you can't really offer the right things to someone if you don't know where they're coming from.

Speaker 3:

Right, yeah, yeah, and I would add to that too, Serena, is you need to be as genuine and authentic as you possibly can, Like you're genuinely there to help someone. You're not there to oversell. I don't know about you guys, but I am. I can't stand being overpitched on something or you know, this is kind of the industry for that, and the second I hear that I turn off of that. I, you know, I think I generally come across as a genuine person and people resonate with that. They want to hear the authentic story. Right, I would just tell everyone be as authentic as you possibly can.

Speaker 1:

Now in terms of the actual question. So we're talking about, obviously, real estate, diversifying, using real estate as a tool to build wealth. So what kind of advice do you have for someone that is just starting out, you know, as an LP? Maybe you can explain a little bit about the dynamic of that relationship with a GP, lp or someone that wants to, you know, take the bull by the horns and become a GP, because obviously starting out in either capacity can be a little bit overwhelming.

Speaker 3:

Yeah, yeah, well, I, you know I look at real estate like it's a Swiss army knife for wealth building. It gives you cash flow and appreciation and tax benefits and leverage all in one package. Yeah, you know, unlike other investments in the stock market or the bond market, it's tangible. You can go touch it. You can literally drive by it, see it, touch it, improve it and see it working for you. You know, I didn't, I didn't create this, but someone said it once and I love it it's. You know, don't wait for, don't wait to buy real estate, buy real estate and wait. If someone could tell me who's Warren Buffett?

Speaker 3:

Warren Buffett is it.

Speaker 1:

It might be.

Speaker 3:

Oh, it's a good one and I think you know the one regret I have is not getting into this sooner. I had restrictions around what I could invest when I was working on the LP side and and capital raising on the GP side. You always have these restrictions of what you can invest in, what you can't participate in, so I just kind of took a backseat for way too long. I should have been more proactively finding opportunities. You know, I came to it a little bit later in life and I regret not having started sooner. So anything I would implore people just start small. Maybe do a house hack, maybe put $50 a month away to into a REIT or something. Buy a small property. You don't have to know everything, it was just take that first step. Action creates momentum and momentum builds wealth.

Speaker 1:

Now, in terms of identifying the high value real estate opportunities, obviously you are very focused on the Southeast part of the United States. Can you talk a little bit about why you feel so strongly about that and also the value really of commercial real estate? So for people that don't know how do you go and buy an apartment building Like you know just what some of those benefits are behind it being classified as commercial.

Speaker 3:

Yeah, so we love the US Southeast. You know they're just Texas and predominantly they're just in business, to be in business. They offer tax incentives for folks getting into business there. There's a mass migration of people moving to texas year after year. I think six of the last eight years. Um, I love this, the statistic u-haul. You know the, the, the truck rental company. They have their growth index, uh, and they've been tracking, I think for probably 20 years and six out of last eight years their one way truck rental top state was Texas.

Speaker 1:

But why Amazon building up facilities everywhere?

Speaker 3:

There's so many head offices moving there and they're leaving California, they're leaving New York. You know the governments are working with tax incentives. You know zero corporate tax rate there. You know there's just lots of incentives for business owners to be there that you benefit from and everyone's looking. The holy grail is how do I, how do I pay less taxes? So if it is rolling out the red carpet for you to go invest there, it makes a lot of sense. So you know lots of jobs, people follow jobs. It's a tremendous growth area. The weather is great. You know, for those of us in the you know Canadian Arctic, like here, you know I'm more and more interested in moving to a sunny state because I my, my, I'm getting too old.

Speaker 1:

What are the? What are the landlord laws like there?

Speaker 3:

It's interesting. It's much friendlier than than Ontario. So, um, there is a time frame. So the beauty of it is you can get someone out, a you know, a deadbeat tenant. If you will, um, within 30 days, so the sheriff will knock on your door. You have three days to respond and by day 30 you're out. So, um, it's pretty quick. It's nothing like the torture yeah, that's really good in ontario, where you can go to the tribe years and no, nothing like that. They're in business at every step of the way. Serena, the, the laws are created to make sure that it runs efficiently and it serves the business owner. It's not trying to mess with with the consumer or the tenant or anything. Fair is fair, like they are especially in Texas. It's fair is fair.

Speaker 1:

Yeah yeah, you've got bills to pay too right Now. In the commercial side, can you talk a little bit about the apposition of a commercial property and why that's treated different when it comes to financing, as, like the GP?

Speaker 3:

Yeah, so it just opens up. You know commercial multifamily is anything over five or six units in in States. Um, in Canada it's five years, in the U? S it's six years, I think. Um, I'm not sure. I've never played in that that size Um, and it really just opens.

Speaker 3:

You know it's the banks really. You know you get better terms, you have more opportunity, more types of financing available to you. Um, you know it's the banks really. You know you get better terms. You have more opportunity, more types of financing available to you. Um, you know we, we tend to find our deals off market. So you know there's always banking relationships that come along with that. You have to forge those early on in order to get the best terms, of course. But you know we work with the same bankers over and over again. Um, they're just tremendous. You know. Know, they just want to. They understand everyone wants to make money on this and they want to. You know they're motivated to get your business as well. So, but yeah, when you're on the commercial side, you're just accessing a whole level of banking. You know, for instance, on this particular deal, we're going to be seeking HUD financing, which is similar in Canada to the CMHC financing. In the U S it's called Freddie Mac, Fannie Mae, and then there's the HUD financing, so you know tremendous terms.

Speaker 1:

Is that something like a 95 five, the way that things kind of work for MLA select?

Speaker 3:

It's similar, it's more like a 90. Oh, my gosh, my brains. You have to have 90% occupancy for 90 days in order to qualify for HUD financing, if I have that correct. So it's similar. It's similar. Is that what you're getting at?

Speaker 1:

I've never. I was just curious to see, like, what the terms are like. And for anyone that doesn't know, for commercial financing it's a net operating income of the property that's going to qualify. It's not your own personal income. So that's really one of the big strategies, obviously with commercial multifamily.

Speaker 1:

So if you have a business and, as we know, like a lot of business owners, don't put a high income on paper necessarily because you want to offset your expenses which is great some respects, until you have to qualify for anything and they're like, oh, you don't make anything. So if you're buying a commercial multifamily property, so if it's over five doors, then it's essentially that operating income of the business. So it's treated very, very differently from a financing perspective. When it comes to things like mindset and abundance, can you talk about why this is so important, especially for someone that wants to go buy a hundred unit apartment building or or or kind of go down that path, cause obviously it's something that the average person would consider like just completely daunting, right. So can you talk about how it's impacted you and this trajectory that you've been on?

Speaker 3:

Well, it's funny, I never looked at it as daunting it was. It was a way to fast track me to my ultimate goal. I have a goal of having 10,000 doors in 10 years and you know, I've always thought big that way because I came from an industry that all we did was big deals, um. So it didn't occur to me that it was just such an outsized. You know, some could say outlandish but um, you, it's all very doable. And mine said, like there's enough opportunity, success, money to go around, like it's not about competition, for me, it's about collaboration. So for me, the trajectory to get to where I am today was find the right team, find the guys I trust, the women, the people I trusted to work with, who are my great service providers. I want to develop and cultivate great relationships with them. So there's a trust factor, there's a knowledge factor. I wanted to make sure maybe I was.

Speaker 3:

I did have a little bit of analysis, paralysis in the beginning of my career in setting up my own firm, in the sense that I spent a lot of time really smart about the market number one but, more importantly, interviewing people who didn't know I was interviewing them Like could they be a future partner. Could they be a future partner? I knew I needed a team. I can't do this on myself. When you're thinking of scaling at this size, you need someone who's on the origination side asset manager, you know, maybe construction side, capital raising it's a bigger team you need. So in my mind I didn't have that hurdle, but I think it's always because I've always believed that there's enough opportunity to go around and I, when you're like, when you are your mindset's like that the world does open up, like collaborations come and happen. I find the competition puts up walls of course it does, but it's limiting. And you know I find the collaboration, you look, you learn from the failures, the challenges. You know their growth opportunities. It's not a an either or thing, for me, it's a both, and you know it's a bit of a dream big thing, but you know I believe it. So that's one of the most important things Everyone has to identify their why, as to why they want to do this.

Speaker 3:

Why do you need to be in this business? It's a, it's a challenging business. It's a difficult business. If you don't identify your why and you don't understand what's motivating you, you're going to derail yourself over and over again because the why is what motivates you through the good times, through the bad times. You know it's, and it's not just the why like it's, so that's your belief system. Why do I want to do it? Why do I believe in this? Why do I want to do this so badly?

Speaker 3:

Yeah, people get stuck in that phase. I want to do it, I want to improve my life, I want to create generational wealth. I want, want, want. Until you take action, nothing is ever gonna like. You're just not gonna believe nothing's gonna transpire. So but then, when you take action, it opens up another layer, which is the self-worth layer and the worthiness, because you'll, there'll be setbacks. You'll be like well, I, I dream big. They said to dream big, and you know, I, I stuck my knock out there and I've, I've had a setback. And then, when, when you start in that phase, then you start challenging your worthiness like should I? Am I the right person? Am I smart enough for this?

Speaker 3:

you're like defining my 2024 right, but it's yours, like it's defining your self-worth right and then. So then you have to go back. I look, look at it like a wheel. It's like four, four, I don't know four cogs in the wheel. It's a constant cycle.

Speaker 3:

So you start with your why, you identify your belief, you take action and then you have to remind yourself constantly about your worthiness for it. Why am I here? Then, when you get to the worthiness, there'll be a setback and you go, oh, now the self-doubt is creeping in the worthiness there'll be a setback and you go, oh, now the self doubt is is creeping in. So you got to get yourself back up to the like. The wheel has to turn. You got to get remind yourself what the why is. Put yourself in the rooms with the people that help you with your, your, your um belief system or support you, or you know, make sure you're aware of who you're surrounding yourself with, because not everyone is, is, is, you know, know, praying for your success, right, you, just you need to understand who your genuine um support system is.

Speaker 3:

So I I spent a lot of time looking at that. I spent a lot of time kind of assessing people. I think I have a pretty good gut instinct for people. You know whether they're genuine or not. And, first and foremost, what I do is I don't look at it like what can you do for me? I always start with, and so do you, serena. This is how we met and how we bonded. What can I do to help you? First, what's the value I can offer to you? Because we all have a great skill set, we all know something, we're all imparting wisdom to something or expertise or something, and then, with no expectation of return, something always comes back to you, right. So that's that's, to me, is the most important thing.

Speaker 1:

Now, since you had this illustrious career more on the private equity side, what was that pivotal moment where you decided that you wanted to make a shift?

Speaker 3:

Oh, you know, that's a really good question. I think I've had lots of pivotal moments. I've always been attracted to the entrepreneurial side of things. I even though I worked in corporate for a million years. My whole family is is made up of entrepreneurs, mostly on the artistic side. You know artists, art dealers, gallery owners, but they were all their own entrepreneurs.

Speaker 1:

You're the black sheep, pardon You're the black sheep.

Speaker 3:

Yeah, right, but here's the interesting thing my mom was the CFO of the business the family business when we were eight years old. I keep saying weeks. I have a twin sister. She marched us down to the bank in Nova Scotia and had us open up our very own bank account. We had to learn. She taught us how to balance a checkbook and we had to put our $2 of allowance in every week. And we had to. You know, we were allowed to take out 50 cents for candy, whatever. I did not for one second think that that was an important lesson at the time, like why do I need to know this? Whenever I hate math, I don't want to do this, and it has served me unbelievably well over life, because what it did it was gave me financial acumen, awareness and confidence, and those are the foundation things you need to be in any business. But as an entrepreneur and you have to have a thick skin so you know you ride this wave of good times and bad times in the entrepreneurial world and you're not cut out for it.

Speaker 1:

so no, that's right. I guess you obviously talked about things like setbacks and self-worth when it comes to things like limiting beliefs. They are some of the most common limiting beliefs that people are experiencing, and you know what strategies do you think they should employ to overcome them?

Speaker 3:

Yeah, yeah, that's a really, really big one. And that sort of goes back to that self-worth, self-doubt thing we were talking about a minute ago. I think the three big things I hear is like I don't have enough money, I don't have enough time and I'm not smart enough. You don't even need a college degree to do this business. Like, you need to be smart. You need to. You could be self-taught. You need to surround yourself with smart people.

Speaker 3:

Smart people aren't just going to say here, you know, just have it for free, but you need to have a plan, right? So so you know, you don't have to be a genius, you just have to have a plan. You got to, you can start small, but you have to be a genius, you just have to have a plan. You gotta, you can start small, but you have to be consistent every single day. Have a plan, have a structure. Yeah, yeah, have three or four to do's. My to do's, everyone's to do's, are usually like 25 on a list, but what are your top three you got to accomplish every day and just take action yeah, now, in terms of just starting out, like for someone that's like okay, it's like a chicken and egg kind of thing right.

Speaker 1:

Like, are you structuring? Like, are you talking to your securities lawyer first? Are you looking for apartments first? Are you raising capital first? Like, can you talk about how you found, like, an apartment of that size for sale? Like, was it just regular on market, was it off market? Like, can you talk about just kind of the best way to assemble those pieces together in a way that makes the most efficiency and the most sense? Well, I'd say.

Speaker 3:

number one is having clarity of your purpose. So I knew I wanted to set up a GPLP fund. I knew I wanted to do that. Most people don't even know that that exists, so I wouldn't recommend starting there. It is more sophisticated.

Speaker 1:

Because it's a larger amount, right? So it's not like you're just partnering with one or two people on a jv, like if you're buying an apartment, you probably need multiple lps, right?

Speaker 3:

yeah, yeah, absolutely so. On this particular deal, we're raising five million equity and if you know, you know how many lps I need if I'm getting a hundred thousand dollars at a time. Yeah, yeah, um, I would. So I spent, as said earlier, the better part of it, the last few years, just getting really smart about these structures, who my lawyers had to be, who my attorneys had to be, and, because it's in the U S, I had to do cross border everything. We had to have our Canadian service guys, we had to have our U S service guys. It was really just having a clarity of, of having that all mapped out.

Speaker 3:

Now, unfortunately, the way this market works is you'll find a deal before you have people or available cash, or you'll have available cash and no deal. So nothing ever works out. It's not a straight line, absolutely. So you know, in in between deals, I I'm sitting there cultivating relationships. That's what you do, like. You just reach out to people, you know if I have a deal, or are you interested in Texas, like what? Here's why you might like Texas just putting that information out there and then, when you're actively capital raising, it's full court press. It's you know, heading out to all those conferences and going to meetups and sitting on podcasts and you know, just getting getting the word about out, about what you're doing.

Speaker 3:

And the thing you asked me about is how we sourced our deal with this particular. Most for the most part, our deals are off market Cause sometimes, when they're market, obviously they've been shopped around a lot and you're not. Especially, as a Canadian, I worry that I'm never seeing the deal at the start. It's already been passed over by 10 Americans and then you know sending me the crap leftovers. We really spent a lot of time cultivating and our deal origination guy, evan, is fantastic. He's cultivated deep, deep relationships. You know, the past two years alone he underwrote a hundred deals before we settled on well, three, two we didn't proceed with and this is the third one. This year.

Speaker 1:

You use any particular um platforms to underwrite the deals or do you have your own spreadsheet where you're plugging things in?

Speaker 3:

You know, evan has a bit of a proprietary platform he's built over the years. It's basically an Excel spreadsheet on on steroids, okay, and it's. It's fantastic. Um, there's lots of those around, um, I know I have access to them in different masterminds that I belong to. But, yeah, just having a really good um, um, step-by-step list of what you need to do within deal, um, a deal framework. So we have that sort of checklist. We have to check the box on all aspects of it, from the retention side to asset management, to the distributions for limited partners, that whole thing.

Speaker 3:

We our actual deal portal and our investor portal. It's called Invest Next. Invest Next. It's a fantastic portal. It does everything. It takes you right through validation of your client, accreditation, confirmation and then it takes them in through the deal. It does all the reporting, all the taxes on the backend Doesn't do the taxes for you. It's fantastic. So you do need a few systems. Systems are very important. I wouldn't recommend overdoing it because you know I geek out on all these things. I can go down rabbit holes. This is great.

Speaker 1:

You've got to just be efficient, right, like one aspect is kind of like raising the money that you need to close on the project, but then you also have to think about all these contingencies and things that could come up and stuff like that. So I guess, when you're looking at evaluating if a deal is going to work or not, like are there any certain, like significant check marks that you think people should have on their radar?

Speaker 3:

yeah, you, absolutely so. For us, on the multi-family side of things, when you're doing your due diligence, you need to make sure you vet the project in the community to the extent that you can like. There are always people that know the backstory, or they know the seller, or they know the developer, or they know the property manager. I like that kind of vetting. That's always important. There's never been a perfect deal. They're all going to have a little bit of hair on them. And our number one action plan is if you don't make equity on the buy, it's not a deal for us. There has to be some equity that you've already accumulated Because, worst case scenario, if you have to sell it on day three, you've already got that equity built in there. So it's you know, it's definitely vetting it in the community.

Speaker 3:

It's definitely running the numbers, getting the T12 and you know all the rent rules and really digging into those numbers, because you know people like to massage numbers and we've walked away from deals at the 11th hour because suddenly a second set of books shows up or you know, oh, this, they weren't tracking this expense really correctly. And sometimes when you're buying from, like mom-pa property managers, they they'll like, they'll your document, yeah, so there's. There'll be a one month where it's like massive expenses and then there'll be nothing like well'm like well, no, no, there's expenses every month. So you got to normalize that and just really dig in. So it's. It's really. You know, an important skill is being able to dig into the numbers and watch for any red flags, and if there's too many red flags or any, really you got to walk away. You can't fall in love with the deal. You got to walk away.

Speaker 1:

Yeah, no, that makes perfect sense. Now, speaking of things like that, have you ever made a big mistake when it's coming to an acquisition that just really didn't work out the way you anticipated? Oh, it's been perfect.

Speaker 3:

I never make mistakes. No, of course. Of course there's always things you know, like, for instance, that that one deal I just said where we had to walk away at the 11th hour. You don't want to do that because you know you've signed some letters of intent and you know you've gone down the road a really long way. You've already started talking to potential investors. You're talking to your bankers. I mean, everyone's thinking this deal is happening and it. You know, if you don't handle it the right way, it can make you look bad. You're going to embarrass your banker Like there's lots of. You got to be really careful about that. But you know, certain things are just non, non negotiable, like when we saw that second set of books, that was it, and then it's. How do you message that to your living partner investors so they don't lose faith in you? For me it was messaging that you know. It just speaks to our level of due diligence that we undertake. And look what we uncovered. Thank God we uncovered it now, before we wrote a big check.

Speaker 1:

Yeah, and I think that's really where the transparency and the communication comes in right. Like I think there's nothing worse, especially on a passive investor side, where you're trying to get answers and they're not responsive. You know, there's been some instances on deals I've invested in where it's like I've sent three, four emails and I only finally get a response when I messaged them on Facebook, like two weeks later, it's like right, no, I've obviously trusted my money with you to invest. Like I shouldn't be chasing you. You should be setting up a certain frequency for updates. You should, especially if there's something hitting the rails, like there should be some sort of consistency in terms of how you're communicating and and just when you'll send updates, even if you don't have something, acknowledge that you've gotten the email.

Speaker 1:

And I think some of that comes down to those business basics and you know, like you said, you don't need a specific degree to go down this path. There's a lot of people that I think don't have that business acumen or professionalism that I think should really come along with something like this. It's not just like buying a building, no, it's an actual business. Like you've got to treat it like a business, like a 360 degree approach. So I think for the people that will have staying power, that will have repeat investors and stuff like that, they will be the ones that you know treat their investors as a VIP and you know handle them that way across the board.

Speaker 3:

Yeah, that's one of the things we've implemented with Investnext. We just adopted this technology. Investnext next, um, you know, we put in place the newsletters and the regular communication and and the outreach to the, to the investors, as we go along. The capital raise, too right. You got to update them where we're on that as well. So transparency is important. You don't want to overdo it, because people don't want to hear from you all day, every day.

Speaker 1:

Yeah, but even once a month or quarterly, like whatever that frequency is, establish it from the beginning and make sure that you're sticking to it.

Speaker 3:

And the biggest value you'll ever get is when you approach a challenge head on. You know you reach out to your investors and you say listen, this is what's happening and this is what we're doing. You know there's a right time and place for that, but informing your investors will go a long way to cementing that trust level.

Speaker 1:

Yeah, they shouldn't hear better from someone else the worst thing that can happen.

Speaker 3:

I'm a limited partner investor on thousands of deals, like that was earlier on when you're talking about my bio. A lot of that's from my limited partner passive investing path and I can tell you off the top of my head I hear from one GP regularly One. I've never heard once why a distribution is delayed. I've never had distributions from some that are supposed to be distributing and it's like pulling teeth trying to get an answer. So I think that's a terrible, terrible practice On this building right Pardon.

Speaker 1:

I said it's like you wonder, do you still own this building right Right?

Speaker 3:

Yeah, am I seeing a headline and in the news Like, should I be? Like what's what's going on? So I shouldn't have to dig for that information? I look at it as a privilege. You are trusting us with your money. We are true partners here. I owe you information, I owe you performance. I owe you. We have to do what we say we're going to do.

Speaker 1:

There's going to be market fluctuations, be issues, but a you got to address it head on and just got to be transparent. Yeah, no, agreed. Now, just in closing, I've got two other questions and we'll open it up for everybody else. But in terms of things like legacy and giving back, obviously you talked about your why and for you, your goal is 10,000 units in 10 years. I mean, that's, that's a big goal. Like, what would you say is your main driving force behind something that significant?

Speaker 3:

That's a good question and for me, the sole driving factor for me is to leave a legacy for my kids, not a legacy of money, a legacy of mindset. I want them to realize that I'm not handing this all over them just so that they have a cushy life going on in the future. You know, hopefully I'm putting plans in place to show them first of all how they can do it as well, but secondly what that mindset does to them. So I'm teaching my kids about money. I'm teaching them how to be confident. You know, start small, be confident. There's lots of little ways to get started, um, create systems, um, but for the most part it's it's. You know, be intentional Like this matters. I have to. I don't remember when I was in my twenties thinking about my retirement, it was the last thing on my mind. I wish I had a focus more about it in my twenties and I'm I'm trying to impart that to my kids, that it, it all matters. But it all matters first and foremost from your mindset and how you approach it.

Speaker 1:

Are they?

Speaker 3:

receptive? Yeah, more and more, actually more. The people who are more receptive are my kids, college roommates. Both my kids go to school in the States and they see, like the conversations I have with my daughter, or they see the budget that I literally printed out a piece of paper and stuck it on our bulletin board this is what your monthly budget is. And none of her roommates even knew what that was. So I spent a lot of time teaching young women, young kids, my son's kids, friends too. Boys are less receptive.

Speaker 1:

You know, this is what this means, and it's so empowering, though, so I can see that right, that right. Like I said, my family is the same way, like they didn't get involved in any kind of like university applications budget, nothing. So it was. You know, I think you've got something that you've got accessible to you like. Why not take advantage of that?

Speaker 3:

right and I really care passionately about teaching people who don't have access to this knowledge. I was fortunate enough to grow up in a creative but financial family. I didn didn't realize what a gift that was. Yeah, but people don't get exposed to this. So if I can share what I have, I really, really believe in helping others, and helping especially younger kids. They got to figure this out right.

Speaker 1:

The world is just a little bit too scary these days that there's not a lot of direction and you've got to be the ambassador for your own life, right, which is kind of the perfect segment in my last question. If you could go back and give your younger self a piece of advice when it comes to money mindset and investing, what would it be?

Speaker 3:

uh, stop going starbucks, stop buying lattes.

Speaker 1:

I have a latte factor, a latte factor.

Speaker 3:

Right, it's just. You know, take that money, put it aside. You know be, be very diligent, pay yourself, tell yourself what a reward that is. That's not a. That's not a. You know you're not restricting yourself from anything. You're paying yourself in the future. You know, had I started earlier, I'd be podcasting with you from a private island somewhere, right Like early. You gotta you gotta be kind to yourself, you gotta be future thinking, and that's something that not a lot of people think about. It's, it's, it's.

Speaker 1:

They don't think about their future till it's here and now, yeah, and you gotta have that balance right, like you've got to enjoy the journey and enjoy the process, but I think you've got to, like you said, educate yourself, take action and, you know, work towards creating the life that you really want to live.

Speaker 3:

Correct. Legacies aren't accidental, right. Their legacies are built on intentionality, yeah.

Speaker 1:

Yeah, I, when I used to have my events company, we planned some events for St Joseph's Health Center and one of them was for Peter Gilligan, who's the owner of Mattamy Homes. You know you've got a legacy and you're just giving away money in the increments of like 10 million at a time, like I'll put 50 million for sick kids. So now it's the Gilligan way, and 10 million here and 10 million there, like that's yeah, joke right.

Speaker 3:

So that's a huge, huge aspirational note and and he's, he's a lovely person.

Speaker 1:

He just yeah, no, he is, yeah, I had the chance to meet him through that event but, um, definitely very inspiring just where he came from and the things that he's doing when it comes to philanthropy and what he's passionate about. So, in terms of opening up the floor to other questions, I know we just have a few intimate guests with us. So if anyone has any questions for Arlette, the stage is yours. Yeah, go ahead, angelo.

Speaker 4:

All right. So you're definitely operating on a grand scale here. But for smaller people looking to get in the game and invest in the United States, what sort of tools or what do they need to know in order to set themselves up to buy that property in the States?

Speaker 3:

as a Canadian, yeah, so are you talking on the legal side, or access to deal side, or kind of all of it? I would say on a legal side.

Speaker 3:

So there's some great lawyers you can reach out to that can give some great advice in terms of what your company structure should be like. So for us we have a Canadian layer, a GPLP, and then our LP invests in and I can share this with Serena and send it to you guys if you want. It's a standard structure you'd put in place. Our Canadian LP then invests in the US GP, so we have it's a flow through right so and we have our LLC set up down there. We have our operating company and then on the back end, when we go to issue distributions, we, you know, we take US withholding tax, we issue the tax credit. It goes through the IRS up to the CRA, so our investors will get, you know, their foreign tax holding credit, I think it's called. So there's, there's definitely structures for that and, angela, there's tons of for that. And and Angela, there's tons of of um lawyers you can talk to about this. But that's the standard kind of setup and I'm happy to share it with Serena and she can distribute it later.

Speaker 1:

And there's a lot of things to consider. Like, my first rental property was actually in the United States and I bought it when the dollar was at par, so it was kind of a perfect opportunity. Like, looking back, I'm like I could have even just used my whole line of credit. Put that in US dollars, no, no work, because we know that it's not going to stay. Stay there, right.

Speaker 1:

But essentially I bought it in my personal name, which I wouldn't necessarily recommend, but I had to get something called an ITIN number and it's kind of like your social security number being a foreign national, so I was able to file my US taxes, then you file your Canadian taxes, so everything's kind of cross-border.

Speaker 1:

Yeah, the banking was a little complicated because at the time and this is dating me it was 2013, so they didn't have email money transfers, so I had to find a way that I could deposit the money I was receiving from snowbirds essentially as US funds.

Speaker 1:

So I had, like my US based US account, a Canadian based US account, so it was kind of like this North to South transfer and there was all these complexities. And back then it was actually very difficult to qualify to buy an American property as a Canadian because you couldn't really qualify in either country. So that's changed dramatically since then, and I mean the main thing now is that you want to keep in mind that it can be a little bit more litigious in the States. So having it in an LLC is probably more beneficial, and there's certain things that you would structure from the standpoint of taxes, but then also legally. So you want to make sure that you're working very closely in tandem with your accountant, as well as with your lawyer, just to make sure that all of those things are making sense when it comes to liability and exposure, as well as maximizing your tax efficiency.

Speaker 3:

And I would also add to that, serena make sure you have the proper insurance policies as well. The LLC can protect you, but you want to make sure because the state's so litigious. You need to absolutely make sure you're wrapped up that way, because they'll just go after you personally and you need to make sure that doesn't happen.

Speaker 1:

And also if you think about even the fact that the dollar our dollars tanked, so it's not great in that respect, but there's also a lot of markets in the United States that it's still so much cheaper, even if you factor in the exchange. Like you know, buying an apartment building is, you know, maybe not the first step that you want to take, even though I'd say, the majority of investors I talked to say that they wish they went bigger sooner. So keep that in mind, because it's the same work to buy a building like that that it is to buy something small. But if it's something where you could possibly start with something like a midterm rental, I know people that have done really well buying single family homes in the Midwest and they're buying them for like 100 and 150,000 US. They're renting them out for midterm rentals, so to traveling nurses, doctors, construction workers for still like $2,500 a month. So there's still cash flowing like very, very well.

Speaker 1:

But you could start out with like $20,000, $30,000 of your own money and do something like that. So there are different strategies in place. You know, just like in Canada, like you know, if you look at the Maritimes or Alberta, like there's different places that are more affordable and you know you just want to look at, you know what you've got the time to dedicate towards and at least taking a step is taking a step right. So you just want to be able to start somewhere and that will put you on the path to growing that wealth and maybe the next time you can buy a multifamily.

Speaker 3:

Yeah, and I and I would say to Angela, to Serena's point, there was on the smaller scale, the non-commercial scale you do have to make sure that the you know the FX exchange, the it's all. It's all on the buy, whatever. If the numbers work on the buy, including the FX, including all your expenses, including the higher interest rates you're going to have to pay on your lending one. If those pencil out, then go ahead with the deal. But to Serena's point you, the deals are so attractive in the states, unlike in Canada. I looked at Canada when I first started the first um five or six years ago. Um, five or six years ago I um, um looked at Canada. I couldn't make sense of a lot of the numbers, um, and then I go to Texas and I'm I'm buying 120 units for $142,000 a unit. That's unheard of In Canada for the similar kind of building. I think that'd be closer to $350,000 a unit or something they're kind of the catch-22.

Speaker 1:

It's like you could be buying somewhere where it's cash flowing but there's not great long-term equity appreciation and where there is good equity probably aren't cash flowing at all.

Speaker 1:

Right, so I think you want to have a bit of a balance when it comes to some of those things.

Speaker 1:

And then the other thing for anyone that hasn't invested in the States is the 1031 tax exchange. So in Canada, anytime you buy and sell a property you're going to be paying tax and, as we know, capital gains is a lot. It used to be 50%, now it's 66% when in the States there's a strategy in place where you can tax defer as long as you're rolling into another property within a certain period of time, which I think is a year. Then you have to identify it within 45 days. There's a period of time. So don't quote me 100% on that, but at least you can tax defer it so you can continue to scale up and scale up without having that immediate tax implication. So that's probably one of the biggest things when I talk to American investors and I feel like I have a lot I've talked to through the podcast but that is like the number one biggest thing that they all are, you know, excited about is the fact that we aren't. We're not there may be a little bit more business friendly and friendly than we are here.

Speaker 3:

Yeah, I implemented a 1031 exchange strategy for this fundraise because there's there's no marketplace to go meet people who need this. So you kind of have to again create the solution for the limited partner investor and want people. So if they have an existing single family home that's worth $500,000, they can 1031 it into an investment like mine, as long as it's the net proceeds are above the value of. So the house is 500,000 net of marketing or sales costs, whatever. They have to invest at least 500 or more into my deal, for instance. And so there are administrators and similar to like Olympia trust here in Canada. There's administrators in the states that you have to work through, but it's minimal, you know, it's like a thousand or two thousand dollars to to do that. So and it's a great solution for people who want to. You know, if they're either retiring, a lot of retirees will sell all their property, all their properties, and they'll move into land for instance, so much money, pardon, yeah, they're losing, yeah, yeah, that's not a good way to create that generational wealth, right?

Speaker 1:

So it doesn't mean, at the end of it, like I don't know what that looks like when it comes to passing fan, like passing portfolios down, what some of those things look like that gets more complicated.

Speaker 3:

You got to put a trust structure in place or else you'll have all your depreciation recaptured. You know it gets messy. So again, it sounds complicated. You just have to have a good lawyer, a good attorney and a good accountant, and they'll structure it for you. It's not cheap, though. I mean you got to make sure the deal's worth it.

Speaker 1:

Yeah, for sure, Charles or Francesca. Do you have any questions?

Speaker 2:

Yes, Arlette, you're fairly active on social media.

Speaker 3:

How's that helping you with your capital raising? Well, my Instagram, which is Arlette underscore Tigason, that's where I'm doing sort of the outreach and the competence building and I'm like I'm like your big sister or your mom, like the advice you'd never got from your own mom, kind of thing. That's where I'm trying to really the advice you'd never got from your own mom kind of thing. That's where I'm trying to really cultivate future generations of financially literate, capable people, because I believe firmly everyone can. They just have to get the, the mindset you know I can't do math kind of thing change that. That's easy enough to change if you want to do the work. So that's more of a cultivation of. And that started with my daughter, right, you know, she was going away to college and her roommates were like, what is this budget thing? I'm like, oh you know, I popped it on my Instagram. I just started last May, charles, as you know?

Speaker 3:

Yeah, I was going to say it's amazing the growth that you've had, but it's resonating because it's you know, it's foundational information People need, a source to go to to find out how do I even start. So it's kind of a blend of finance 101 and real estate 101. I don't I have not tried to cultivate a single investor from that Instagram.

Speaker 1:

Yeah, but it builds credibility right, because obviously people go and look it up and they're like oh, she must know a thing or two.

Speaker 3:

I offer things like here's a budget, here's how you do a budget, here's a mindset journal, here's a you know, here's some freebies and here's some other little things you might want to do a deeper course on. Or you know, just it's all in the realm of education because I truly want you know and self-serving, I want my kids to do this and if it's working for my kids, it's going to work for a whole bunch of other kids too. So people in general, like half my demographic is over the age of 44. So people need can start at any time and it just shows you that people want to learn. So but, charles, the the consistency is the important thing. You know, posting regularly, posting things of value, and I focus on reels. I'm starting to put a few more posts out there now just to change it up a bit. Um, you know, get, you know gotta continually innovate on that. Did I answer your question, charles?

Speaker 2:

sure, I mean that's, that's, um, you know, social media is fairly new to us. I mean, not for the kids, but other people and uh, you know, at the beginning it's kind of uh, you know, difficult to participate. You know, you, you get yourself on a video and you're like, sure I look like, but uh, once you start using it as a tool, I think that that's, that's really great yeah, and we all have to get over the cringe factor and the.

Speaker 3:

You know, my first videos were not like my last video. We, we all have to go through that learning curve and, you know, give each other a little bit of grace to go. Hey, they're putting themselves out there. I support that all day, every day. But I have a social media manager who helps me video. I don't create that myself. He's got great cameras and great editing tools and I have, you know, I have a team behind me. I couldn't do that myself and I resisted for the longest time because, like more money, more expenses. But it's the old adage you got to spend a little to hopefully get a bigger return. So, and I think that's that's a trajectory I want to go in in terms of an education platform like that. So it's worth it to me, so, and I enjoy it, I enjoy it, so yeah.

Speaker 2:

What is the source of your investors? What do you look for investors when you have a deal and now have to look for money? Have a specific place that you like or you know oh, this is that's the 50 million dollar question, charles.

Speaker 3:

You just look everywhere so you know, in canada, as you know, we can put together an mft trust where you can access registered funds. I'm not willing to spend that amount of money. Unless you're raising 10 million, I wouldn't bother going to the MFT thing. But in the US, with the beauty of the US, you can just direct somebody to open up a self-directed IRA and they can take their registered funds and invest with you. So, accessing RIAs registered investment advisors in the States, if you're adding to their assets under management, they will love you. So that's a good source of capital.

Speaker 3:

Cultivating 1031 exchanges going on Facebook, on the Facebook groups, for 1031 exchanges In Canada it's. You know I said earlier I've started the sales navigator um strategy where we've really filtered down to meet C-suite um dentists, doctors, lawyers, anyone who's going to hit that likely to hit that accreditation milestone that I need for my investors Cause we only accept accredited investors. Um, you just have to create that social media, social media around that. So LinkedIn is very different for me because I, you know you have to publish articles and knowledge points versus social media, which is way easier to do, but you know you refine it on Sales Navigator. You get a couple leads that way and then you just have to show up to the conferences, charles, and you got to show up and try to get a speaking point or host a workshop or host a meetup.

Speaker 3:

Those have always been my best sources of finding, because it gives you a minute to kind of pitch yourself like you start that. You know. I heard somewhere it's like it takes seven touch points for someone to really trust you. So you know, getting out to conferences and meetups and things, those are all those touch points you need before someone's really truly going to give you their money, right? So it's still a face to face business and it's really hard in this Zoom world to to have that same kind of impact. But, having said that, I sign up for a lot of, you know, investor meetups online and you often get a minute to talk about your deal or what you're working on, and I always get a lead or two from those. So it's remarkable. It's remarkable. It's just busy work. It's a lot of work. So you got to just dedicate the time.

Speaker 1:

Yeah, sure, awesome. Well, thanks for. If there's no other questions, we'll wrap up. I want to say thanks for everyone joining us today. It was great to have some extra people here. We'll have this recording up on YouTube as well, if anyone wants to go back, and I know I let you mention that you'll share some of those resources, so I can share that with everybody that was here as well.

Speaker 4:

Yeah, absolutely Amazing. Thank you very much for your time, guys. It was awesome.

Speaker 2:

Thank you very much as well.

Speaker 3:

It's a great journey to be on, so good luck.

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.