2nd Suites, Financial Freedom and Welland with Scott Zandbergen

2nd Suites, Financial Freedom and Welland with Scott Zandbergen
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Table of Contents - 2nd Suites, Financial Freedom and Welland with Scott Zandbergen

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George El Masri [00:00:00] Thanks for tuning into another episode I interviewed Scott Zandbergen, I had a hard time pronouncing his name, actually it was kind of funny way ascots a really nice guy. We had a great time on the podcast. He's a real estate investor, a father, a husband. And just like a regular guy who pushed forward and ended up buying a bunch of real estate has been able to retire from his full time job just recently, actually. So I think it's really inspiring for for somebody who might be in that position where they no longer want to work at their job and they want to reach financial freedom. He focuses on duplexes and we have a lot in common because he also invests in Hamilton and in Weland. So that was really cool. Yeah. So you guys can check it out. And I hope that you'll enjoy the episode. If there's anything that you would like to hear. Anyone in specific that you want to interview, please feel free to reach out. And just a reminder that if you are interested in buying investment properties, I'm more than happy to work with you so you can reach out to me by going to Well-off Dossie, check it out. And in addition to that, I did create this road map for you to download where you can kind of figure out at this point in your career where it might where you might want to go in terms of real estate investing. So go to well-off Dossie Forward Slash Guide to check it out. I hope you'll enjoy the episode and we'll talk soon. Welcome to the Law podcast, where the goal is to motivate, inspire and share success principles. I'm here with Scott Zan's Bernina. What was it about Zen Bergan Zen Burkean. Sorry you told me just a minute ago, but I totally forgot my follow up. Yeah. So Scott is a real estate investor. He's a father, a husband who's worked for large tech companies since nineteen ninety three. His current focus is buying single family homes and adding either second suites or converting them to duplexes. And his most recent role was with into it as a principal marketing manager. So into its an accounting firm, I guess, like books and all that. So he just told me that he recently actually left his job. So congratulations. Thank you very much and thank you for joining us today. So I like to start off by asking you about your childhood, if you want to tell me a little bit about where you grew up and just certain certain memories you have from being there.

Scott Zandbergen [00:02:23] Well, first of all, thanks for having me on the podcast, but listening for a while now, so excited to be here I am. Let's see, first generation Canadian. I grew up in eastern Ontario and a small farming community about an hour south of Ottawa town was called the regional town I lived. It was called Bernsten. And then I moved to to a town town called Eric Floor, which has about twelve hundred people. My parents both emigrated from Holland in the fifties when they were young kids and moved over to Canada and started in the farming community. So. So I was raised on a dairy farm. Did you know, did the chores, did hey, that kind of stuff, and was surrounded by my my father and his brothers who ran the farm. And so hence there was a real entrepreneurial kind of drive there. I lived on that farm until I was about 12 years old. And then my my father decided to leave the farm and start up a company selling farm equipment to farmers. And so when that happened, then we moved to town and that was a town called Arakwal, like I said. Twelve hundred people and about twelve years old. And now I lived in like a very, very small community where I had an opportunity to look for for opportunities like cutting grass and doing a newspaper route, things like that. And so that's where I started to kind of get my own entrepreneurial drive a bit. So I didn't actually have a traditional job job as a student for quite a while. I did a lot of those side things helping neighbors out and shoveling snow. I hired a cousin of mine to help me cut lawns when I became too busy. So things like that. So that's kind of where where I got my start.

George El Masri [00:04:11] I guess that's really cool. And I've heard of other people like that have been on the show here that have sort of a similar background. Parents coming from Europe, they get into farming for some reason and everybody does. Yeah, that's it. And then it's so cool to see where that takes you eventually. And so so you have that sort of itch to follow in your your parents' footsteps or your dad was selling farm equipment. That's so cool that he went from being a farmer to selling the equipment and. That's right. Living that North American type of dream in some ways. Did your parents ever invest in real estate?

Scott Zandbergen [00:04:47] Not as an investment. No. So always owned their own homes. And and we moved a lot when I was a kid like so after living on the farm till I was twelve. And then we moved to that little town after that. We moved a couple more times afterwards, and, you know, it was always to do with getting, you know, taking advantage of some of the equity built up in the home and whatnot. And so there was there was always that interest, I think, at my my dad's certainly had around what real estate could do. I remember there were lots of times when we would be walking through some some lot that he had his eye on and we would go take a walk through this two acre property and he would lay out some vision that we were going to build a house there and it was going to be awesome. And then we didn't do it. And we move somewhere else instead. But that was always kind of a thing. And I think that's just sometimes entrepreneurial people are always kind of movers and shakers and looking for those kinds of opportunities. And sometimes that is you're switching up your primary residence, right?

George El Masri [00:05:43] Right. Yeah, cool. So let's dove into a little bit of the real estate stuff. You've been investing for a while now. When did you start?

Scott Zandbergen [00:05:51] Yeah, so I started in, I guess sleep around twenty thirteen is when I jumped in to like education and started learning, attending a lot of seminars and listening to podcasts. I took the plunge in twenty fourteen when I bought my first investment property and that was a single family home. Rentals did a few of those and held on to them for five years. I think for all the single family homes that we had purchased then and then and then just kind of switched up our strategy eventually. Right. So things change. I think a lot of people, when they first start investing, they start with single families because they are the easiest, especially when managing a tenant. You never hear from them. All the utilities go in their name. There's never fighting because there's you know, there's not more than one family living in the house. So it's just easy. Right. But then I think the more savvy you become, then you realize that there are more opportunities. If I can get more families under one roof sharing one roof, one furnace, one air conditioner unit, that kind of thing, and then generating more more cash flow. Right.

George El Masri [00:07:02] So do you have any multi units like, let's say four plus units?

Scott Zandbergen [00:07:07] No. All have our duplexes. No duplex. So my my entire portfolio consists of duplexes. Cool.

George El Masri [00:07:13] That's awesome. Did you convert some of the first ones you bought single families into duplexes?

Scott Zandbergen [00:07:18] No, actually, we didn't. We actually looked at that as an option and chose not to because these were homes that were purchased on the east side of Toronto. So so this is we moved a lot to my family. And at this point in time, we were living in the beaches in Toronto and we started investing east of the city. So Bowmanville in Oshawa. And I remember when I started looking into doing duplex saying we had these single family homes in the portfolio, started looking at what would it cost to change these into duplexes. The footprint of the house just wasn't conducive to a good duplex, though, or secondary suite, because they were more of your traditional three bedroom suburban house with, like not not very much square foot, foot per floor. And as a result, it just didn't seem like we would be a big enough apartment in the basement, not to mention the fact that there was no separate entrance to the basement. So we would have to put one of those in Khambatta out. So a lot of expense. So in what we did was because the value of those houses had gone up so significantly over the five years that we had owned them, we thought, well, this is an opportunity. My wife and I thought, like, let's let's let's sell these properties because there's there's enough equity built up now and we'll take that equity and then and then parlay that into what we want to do next, which is more of the duplex or secondary suite conversions. Got to

George El Masri [00:08:40] cool. So how did you end up and. Well, it

Scott Zandbergen [00:08:43] that's that's interesting. So this, this was because my so I live in Georgetown now, so we moved from the beaches over to Georgetown. This was work related. I might change jobs and I was working for into it, like you said, in Mississauga. And then I got connected in with a new realtor who started showing me some properties. I said, I want to look at some buying some stuff in the Hamilton area because I've been east of the city and I want it to be in Hamilton. So we looked at some stuff and she then took me out to look at some properties in St. Catherine's. And on one particular Saturday tour, we were looking at a bunch of properties. One had come up that she said, we should go take a look at this one. And it was in Weland. And I knew nothing about well, and I mean, I'd been to St. Catherine's a few times in my life and obviously been up to Niagara Falls, but I don't know if I'd ever been in Weland. So I thought, what the heck, we'll just drive down the Florida senator. Twenty minutes or whatever it is we check out. Weland saw a property and we we bought it that day. So it was it just kind of check the boxes I saw for the money what I was going to get in St. Catherine's relative to what I could get in Weland for that money. And it was it was the perfect kind of scenario where it was about a fourteen hundred square foot bungalow. It. Had an unfinished basement with really good ceiling height, and so we just looked at that and knew right away this was going to work, right? It was on a big lot. Like I want to say, it's 60 foot by maybe one 20, something like that. So lots of opportunity there. Yeah. So we just we took the plunge and and then did the conversion. And then that was just the beginning of of a bit of a buying spree and well end over the over the next two years I guess a year and a half or something like that. Yeah. Where we had a lot of great experiences and finding decent tenants and. Yeah.

George El Masri [00:10:32] So I'm assuming you would put in your second suite or duplex it as some people might say, and then you would refinance is all right.

Scott Zandbergen [00:10:39] Yeah, exactly. So the borrower

George El Masri [00:10:41] as they say. Right. Yeah. And you would take advantage of the fact that you were working, you had a good job, your wife's working, whatever else, and you were able to to get mortgages. That's what. Did you do them all yourself because you were saying you have about 18 doors or something. Are those all in your name or you started working with people as well?

Scott Zandbergen [00:10:57] So the vast majority are in my name. Recently, I've started bringing on some joint venture partners to to help me expand, but the vast majority are in my name right now. Cool. Even actually one side point here on the JV topic. So I did two deals earlier on where I was the financial partner in the JV agreement. So and I use that as an opportunity to kind of springboard my way into the learning process, which was which actually incredibly helpful. And so I still have two of those homes in the portfolio. And today they are probably some of the best properties I have because I do nothing for them other than I share a bank account with my active partner who does all the work. And I don't even know the tenants names. Right. It's pretty nice, actually.

George El Masri [00:11:47] That's pretty cool. Yeah. So a lot of people like that are listening, might think, OK, I'm interested, I have a little bit of money, I'm able to qualify for a mortgage. And you're saying that you were in that position at one point and sometimes people will approach you or approach me and say, I want to learn. So you're saying that this is a good opportunity potentially for somebody to to learn and understand how the process works?

Scott Zandbergen [00:12:09] Absolutely. So that was that was my motivation when I did it, was that I wanted to use it as an opportunity to shadow the the working partner and learn the process. And so I did a house like that in Hamilton, and that was the first one that I was a little bit more hands on with, with the duplex process or adding that secondary suite. So meeting more members of like the power team and how how does this all work? And and so, yeah, I, I, I put in the funds, I qualified for the mortgage, but I gave up a chunk of the equity. But I think about what I learned as a result of that at that gave me a big boost in confidence where I went in the next bunch on my own. One hundred percent

George El Masri [00:12:50] exactly. And what's that worth? At the end of the day, I did this thing where I kind of quantified the value of an active partner. Yeah. So if you put everything that an active partner does and you can't quantify it, in some ways, it ends up adding up to quite a bit. So I just I realize because sometimes people don't understand the value. And if you put the numbers in it, I think it's a really cool way to look at it. So, yeah, yeah.

Scott Zandbergen [00:13:15] Just just knowing that whenever there's a tenant turnover on those properties, like, I'm just not I don't worry about it at all. Right. We were we were chatting before we started recording about that anxiety I get when you get a text or a phone call from a tenant, sometimes just meaningless things that they ask you about. But it's just it's just it's always that slight annoyance that you have to deal with. Yeah. I don't deal with any of that on those on those projects properties. And it's kind of nice in a way. So I don't I don't regret that those ones at all. And in fact, the I just liked what you said. That was the springboard for me to kind of get the learning and give me confidence to go do more on my own.

George El Masri [00:13:54] Exactly. And that's so important as you want to develop and grow your business, you need to pay for either coaching or for helping. And your partner kind of serves as a coach in some ways. They help you understand the systems that it takes and the team that you need and all the other things.

Scott Zandbergen [00:14:09] One hundred percent. Yeah, yeah. It's think of it as coaching. You're right. And so more recently I've had some JV or joint venture prospects reached out to me. You know, now that I'm I'm in this full time people that want to invest with me and I've had people ask me too about do you do coaching? And I often will say, I don't actually I don't officially not going to charge for my time to sit down with you and teach you the ropes. I mean, I could go down that path and maybe I will in time. But right now, my answer to them is maybe we should just do a deal together. Right? I can I can show you. And if you want to be like a a passive semi active investor and kind of shadow me and I'll teach you everything that I know about the process and, you know, introduce you to my team and and just kind of walk you through that to give you confidence. And then maybe you will feel more comfortable doing it on your own after the. So, yeah, it's a it's another form of coaching, definitely.

George El Masri [00:15:04] I was going to ask you, what are sorry, what do you like about. Well, today, right.

Scott Zandbergen [00:15:08] Coming back to. Well, yeah. OK, so what I like about Weland is, first of all, the price points are still good enough, right. Where you can you can buy a a good like a solid brick bungalow. Nineteen fifties, nineteen sixties bungalow which has that nice footprint. I can get a suite in at a decent price. Right. So you're paying three fifty to four hundred thousand right now that has been creeping up over the last little while and now it's harder to find.

George El Masri [00:15:36] So that's kind of what Hamilton was like maybe four, four or five years ago.

Scott Zandbergen [00:15:40] Exactly. Yeah. So, so there's that and then the renovation costs of the renovation cost. If I'm in Hamilton doing it from well and doing it, I know roughly what it's going to cost me to put two or three bedroom suite in the basement. But we're Weland has an advantage is that the city is hungry for investors to come in and increase the housing stock. And as a result, the building department does not sit around waiting for it to issue permits very long at all. They're just they're friendly towards investment investors when the inspections need to happen for plumbing and electrical and whatever else, and they come in, they're not nit picking on the smallest things. They don't have they don't have crazy rules that they're trying to follow that don't make sense from an investor's perspective. They're just they're streamlining the process. Right. And that's that's been just a breath of fresh air. Like, I know a lot of people that invested in Catherines and they have have come to work around all of the restrictions at the building department puts on you like six hundred and forty square feet or whatever it is, Max, in the basement. None of those rules apply in well, and you still have to build safe units with fire, separation, soundproofing and all that.

George El Masri [00:16:46] Follow Ontario building code, whatever else goes on mandatory.

Scott Zandbergen [00:16:49] Yeah, but but they're just great to work with. And so there's that element now. Whelan's of what, fifty thousand people or so population. It's it is growing. It's, it's not. Let's see, it's not as robust a community is like a Hamilton is because they're not as close to the GTA. And as a result the tenant profile is it's a little more challenging, right, to find a tenants in Weland. But you can do it right. And so I I've got a number of duplexes there now that I am. In fact, I just filled one, two days ago. I was out there because I have a basement unit that's turning over and I, I put my ads up and in two weeks I had over 50 inquiries. This is here we are in the middle of covid. Right. Fifty inquiries. This is for an August move in. And I invited five people to the showing. I'm getting better at making sure they show up because it used to be I'd drive out to well and then I'd get one out of five would show up to the appointments. All five showed up and I picked one who really wanted to give me a deposit. And then I do my due diligence and all that. And then we moved forward. And there are good there are good prospects out there. Right. This person's a teacher. High credit score. So check the boxes. I do find that the majority of my tenants and well and tend to be younger families starting out aspirations to buy a home maybe in the next five years, but just not there yet. So they they're going to rent for a while and they are a good candidate for either a three bedroom main floor or a three bedroom basement. Right. So so yeah. So there's there's a lot of attributes that that I, I do like about. Well it also proximity to St Catherine's where the goal line is to get to Toronto. So yeah. Lots, lots of good things.

George El Masri [00:18:35] Yeah. I'm going to share some of the questions that I get. I'm going to pass them all the from about. Yeah. So the kind of questions that I get would be like what kind of jobs are well and why would like what would draw attention to, to that city. Where, where does the demand for rental come from in that in.

Scott Zandbergen [00:18:54] Well and so there are there are some industries and manufacturing plants around. Well of course you'll always get a lot of your tenants applying that are in the service industry, like working in Niagara Falls and the casino's working in some of the hotels. I've got some that are in retail, not my favorite, obviously, from a stability standpoint. But but when when there's two of them, we have a double income, we make it work. So I I think probably the most volatile scenario would be I've got a couple that are both in their servers, like in the restaurant scene. So they were both obviously impacted by covid. So the government assistance really helped out in the meantime. But there's like Canadians higher hires, a lot of employees. They have a financial services office in Weland. I some of my tenants are driving out to St Catherine's for work. Some even drive four Hamilton. Right. So, yeah, I mean, the the fundamentals of Weland are strong, are strong for me. They work, but like I said, like when I also have properties in Hamilton and I can tell a. Reference what I'm feeling a property in Hamilton, yeah, that the the the income levels are just that much higher. You have a bigger pool to choose from. So I still screen as heavily as I would in Hamilton as I doing well. And but I find that it's maybe a one level easier to find and a plus tenant in Hamilton than it is in England right now.

George El Masri [00:20:17] And what you're doing is you're you're probably creating these really nice units and there are three bedroom units or maybe the basements are two bedrooms or whatnot. So you demand a certain amount of income. Whereas if you were if you had like one bedroom units or something like that, it might be a little bit easier for from that perspective.

Scott Zandbergen [00:20:35] You agree? One hundred percent. So I'll just share. I have all of my units. I charge the same rent on so upstairs. So they're all they're all duplexes. Right upstairs is always seventeen hundred dollars plus utilities. It's great. Downstairs is always fifteen hundred dollars plus utilities and well in Weland so my gross rental at thirty two hundred and they pay all the utilities so. But when you set your rents at that price point, you will attract people that think they can afford it, first of all, right. I mean, yes, there are always the people it surprise me that send in that Inquirer and I ask them what their income is and it's barely enough to cover the rent. I don't know what you're thinking. So I politely just move along. But when most most of the people that are applying for one of my units, you know, have done their budget right. And they they might be upgrading because a lot of them are moving out of like an older maybe a rundown house or they're in a building, maybe they're in an eight plex and some of them aren't the nicest. Maybe in town, the two bedroom, and maybe they're paying twelve hundred dollars right now. So they're going have to up to an extra three hundred. But they they walk into one of the units that I have available and it's, it's nice. I mean their car is parked right out the front door. There's a little bit of lawn and everything is brand spanking new and they're like brand new appliances, all vinyl, luxury vinyl, plank tile on the floor, new paint. All my units are three bedrooms, by the way, up and down. So that also because they're

George El Masri [00:22:02] they're the same, they're going to probably be the same way up and downstairs. Pretty close. Pretty close.

Scott Zandbergen [00:22:06] Yeah. So and I, I just like that because I find that even if it's a family of three or four, a lot of them are drawn to a three bedroom unit because they just they want that extra room for an office or storage or whatever. So. So, yeah. So it works. Right.

George El Masri [00:22:23] These numbers are awesome. Seventeen hundred and fifteen hundred. Yeah. And you said you're buying around three fifty to four hundred

Scott Zandbergen [00:22:30] isn't the most I paid in Weland to date was three seventy. Wow. For a bungalow. Now to be honest that was the last one I bought was in. I feel like a slacker right now. It was in October. OK, so yeah I bought two recently but they were in Hamilton so in my last one. Well and was in October and I paid three seventy. Yeah. So I and those numbers work right. When you do the renovation you can, you can still recoup some of your funds on the refinance. Not quite the grand slam. You can get some some of the Hamilton Mountain

George El Masri [00:23:00] projects so you can only push the price so high. Well and so what kind of re5 value are you getting

Scott Zandbergen [00:23:05] between four and five hundred is pretty common now. And see, the challenge with Weland is that there there's not a lot of comps for duplexes or secondary suite.

George El Masri [00:23:16] Right. Or even renovated units. Yeah, it's pretty tough. Even like single family fully renovated. That's right. Sometimes that's tough. It is. It is.

Scott Zandbergen [00:23:24] And and I like I've had some appraisers come in to to my units and have surprised me with way too low of a value or I just refused that and I said, I'm going to do this again another two months. And then I got like like a one came in at like four thirty five or something like that. And then we tried later it was a four eighty. So, so it is a little bit, there are some swings you have to be ready for. So to me that's not a deal breaker. I mean I when I can pull my money out of the deal, I mean I'm jumping for joy, but I don't always expect that I'm going to take it all out. It's an investment to me. And so rather than having my money tied up in, you know, an ETF or stocks or what have you and I got some money tied up in real estate now. Yeah. Likewise, when I'm talking to some new joint ventures that want to come on board with me, I'm not setting the expectation that I'm going to pull out all your money. Right. I'm going to say I'm going to I'm going to get as much as I can of the renovation budget or a down payment, the money, how you look at it, that I can return to you, but set the expectations up front that in a market like Weland that we're going to leave some of it in there for a period of time. And and maybe we we use an opportunity to refinance it in three years. Right. It doesn't have to be in that first six months or something.

George El Masri [00:24:39] What's your budget? Usually about one hundred ninety to one hundred.

Scott Zandbergen [00:24:42] I think if it's just the basement, I think the lowest I've spent on a rental in the basement was what? Ninety some rentals are quite a bit more than that because a lot of times you buy these bungalows and. Well, and, and they are grandma's house. Right. Like they haven't been touched since nineteen fifty eight. Yeah. So we just got them right. So we're talking new kitchen, new bathroom. New flooring upstairs. Upstairs. Yeah. Sorry. Now so upstairs is a full renovation and so that all kind of plays into it. Sometimes the windows are super old so we have to do like eight or ten thousand dollars in windows alone. Right. Furnace, AC roof. I was just looking at one when I was in town a week ago and Weland and hope I can get this one, but it's like doesn't even have a paved driveway and it's a single driveway. So then you've got to widen the driveway. So there's another five grand so that that all adds up. Right. So when you hear on the basement, that's about right. But don't be surprised to drop like one hundred and twenty to one hundred and thirty when you're all set and done, depending on what you need to do upstairs. Right. So it's a fine balance, but renovating to to to to rent it, it's not you're not flipping the product, the property. So you want to get it to the point where you still get the wow when you're showing it to new tenant. And they're not going to they're not going to give me a hard time when I'm asking the seventeen hundred dollars for that main floor, but yeah, so you've got to strike the balance. That's really what it comes down to.

George El Masri [00:26:07] Yeah. And there's a good chance that you might not get all your money out or even like the entire rental budget, but maybe in a year or two years or three years seeing how things are growing and well, you might be able to refinance at that point. Pull out

Scott Zandbergen [00:26:19] your money. Absolutely. Yeah. So it's I always I always try within the first six months or so to to get some out, because what I've done for the last several projects is I've purchased using private money and then I refinance it and then put on a lender on that point in time. So it forces you to have to do the refinance after you've finished the renovation and it's rented. Then I bring in the appraiser and I show them all the documents here. It's rented here. And here's all the work we did. Here are some comps that I found. And then and then do the refinance, get the lender to come in, pay out the private lender. Right. If I if I bought it using using in a lender mortgage on day one, then then I probably wouldn't feel as much pressure to refinance it right away because I want to get rid of that expensive money on the property. Right. So I did the last several up that way and it worked fine.

George El Masri [00:27:08] Are you doing it through a broker or you have somebody that you normally deal with?

Scott Zandbergen [00:27:12] Broker, always, always broker on on securing the first mortgage.

George El Masri [00:27:17] We're talking about private funds, private funds, just so everyone knows,

Scott Zandbergen [00:27:19] that's private funds. So typically paying about eight percent with with about a two percent lender fee on top of that. So and you're making interest only payments, right, for that for that period of time during the renovation and getting it rented. So most of my terms allow me to exit that private money within three months with no penalty. So so it's a one year term, but open up for three months. Yeah. So if I can get out of it in four months, then that's that's what I'm going to do. So but I like it in that it helps me to move quickly. I can make an acquisition on a property and not worry about financing. They'll find the money for me and then and then figure out how I'm going to finance it later. And that that could also mean my exit after three or four months might be bringing a joint venture on that point in time. Right now,

George El Masri [00:28:03] do you remember how you felt the first time you got a private mortgage?

Scott Zandbergen [00:28:06] How I felt? Yeah, I thought it was crazy, like when I was eight percent and all these lender fees, I thought crazy. But on the other hand, it was like super easy. Right? So, I mean, obviously, you go you still go through all the the rigmarole when you're getting set up with the broker, like, give me all the documents and all that kind of stuff. So but once once I provided all that to the broker, then finding the money, it's super easy. And then like, I would I would call my broker and say, I'm looking at this property of the Apollo purview report for me. And I say, I don't need to worry about financing, Mike, not just go buy it. We'll get your money for that. No problem. So when that happens a couple times, you just you start to become really confident that I can go by this now and the money's always going to be there. And then when you start looking at the dollars and cents, if it is eight percent monthly interest, you run the numbers on that you like. It's not that's not the end of the world.

George El Masri [00:28:58] Just tack it onto your rental budget or whatever. Yeah, yeah.

Scott Zandbergen [00:29:01] So three hundred fifty thousand dollars, figure out the eight percent monthly payment on that. I can, I can manage that. It's like twenty four hundred dollars or whatever it is. Payment for three months either is the upfront lender fee. That's where you get burned a little bit. But that's, that is what it is. That's how private lenders make the numbers work.

George El Masri [00:29:18] They work. That's just how it is. Yeah. OK, cool. So are you planning on moving into something different move or you want to stick with duplexes and just keep doing that as long as you can?

Scott Zandbergen [00:29:28] Well, so the beginning you mentioned I left my job right. So right. So that so. Yeah. So I have I am I'm pivoting a little bit because I gave notice at my company in at the very, very beginning of covid when all that went down, I, I left, you know, crazy timing on my part, but whatever it is, what it is. So as a result I knew that I wasn't going be able to go in and qualify for my own a lender mortgages anymore for a period of time. So so that means having to find joint venture partners to if I want to continue to do what I'm doing or option two might be getting commercial lending, which is an option I am exploring. But the third option is what I'm actually doing right now is a couple of flips. So because flips you can just buy with private money and then do your work and then exit. Right. And get up and get a bit of a payday. It's not really the strategy that I want to do long term because I want to hold the properties, but I'm doing this as well as more of an income replacement in the meantime. So and I think that, as you know, now that I have I don't have the nine to five grind anymore that I thought I did for so many years. I think that I'm probably going to get into the kind of a cadence around, you know, continuing to buy residential real estate. And maybe there maybe I keep doing duplex or maybe I go a little higher than that. But but what? I can find good flip opportunities to generate income, which could then serve to help with down payments on future properties or whatever. I'm going to do that as well. So I do have a couple that that I acquired for for that exact purpose. So cool.

George El Masri [00:31:07] Now, what kind of commercial? So you mentioned commercial a little bit. Is it just the mortgage side? So the same product, same duplexes, or are you thinking about going into bigger projects?

Scott Zandbergen [00:31:17] So I've explored the bigger stuff. So I had this conversation with my broker a couple of times around. So I guess was about six months before I left my job, which we we kind of did a road mapping session and discussed, well, what's what's the Post Working World going to look like for getting approvals? And that was the advice that I was given, which was, you know, at that point in time, you could go down the path of commercial properties. So depending on the lender, it might be a six plex or higher, could be an eight plex or higher, because then the lenders will look at the property as qualify you based on the property as a business, as opposed to just me as the investor in my debt coverage ratio and all that. Right. So that was that was the advice at that time. And I, I haven't gone down that path yet. I have I've I've perused some multifamily properties, talked to realtors, looked at a few. I have not pulled the trigger on any I guess I just haven't gotten to the point of finding the right one for me, especially knowing that the the residential duplex thing. It's my sweet spot right now. Right. And I, I kind of I guess I'm subscribed to the mantra of I'm hitting singles and doubles right now and every duplex I do in Weland or Hamilton is, you know, they're doing really well. I got good tenants in them. They're cash flowing well. And so I think to myself why I should just keep doing this. If I can keep if I can figure out a way to get approvals on that and to keep doing this, whether it's through a joint venture or there are some commercial options as well. To do that, you can blanket mortgages across multiple properties. There are. You can. You can.

George El Masri [00:32:50] So just to kind of elaborate on that, you can take multiple residential properties and get a commercial mortgage that covers.

Scott Zandbergen [00:32:57] Exactly. So that's come up a couple of times as an option. The other is, can you qualify in your corp name? So those are things that I have to explore further and I haven't yet. But in the coming two or three months, I will be for sure.

George El Masri [00:33:15] Yeah, yeah, yeah. So one of the things that we mentioned here or that I keep hearing you mention is your relationship with your broker, your mortgage broker, and you've mentioned your other parts of your team as well. But it seems like your mortgage broker has really helped you grow and helped you develop strategies and whatnot. So it's it's cool to hear that

Scott Zandbergen [00:33:33] from our power team is is super crucial to to an investor broker. The broker is probably the one to deal with the most other than your realtor obviously is key in bringing you deals. But I also I bought my last couple through wholesalers and that that works too. So I think the the more active you are, you always have to be looking. I would love to be at the point where I'm sourcing my own deals and I and I've had a few, you know, ones that kind of have landed in my lap. I just haven't have materialized into me closing on them. But that that would be kind of a next step for me, too. But anyways, realtor broker. And then there's the obvious members. What you're working with, your lawyer and accountants, I think are super important to to the team and then your contractor as well. So, yeah,

George El Masri [00:34:22] one last question before we move on to the next section. Why is it that what drives you, what makes you want to do this and and put yourself on the line and take on the stress from the tenants and all that?

Scott Zandbergen [00:34:33] Yeah, I mean, for me, it was if I go back to working in corporate. So I did like I worked in the same industry for twenty three years, writing accounting software companies. And I you become comfortable working in one industry where you become known by the community. And I knew that there was always a bit. A burning itch for me to get involved in doing something for myself, and so I had a couple of false starts like a decade ago where I was looking at different starting different kinds of businesses that were still in the same arena of what I was doing at work and but never really had the confidence to take the full jump when real estate kind of came around for me. Twenty, thirteen or so then I think that's when the light bulb went off. And then I started getting my my confidence started going up like there's something here that I'm going to double down on and I'm going to figure this out because the. Why was that? I didn't want to be beholden to a T for income forever. Right. I liked what I did. But when you work in corporate for a long time, you become. Used to it, comfortable with it, right, and there was one thing that I always tell people is that I always felt there was a little bit of for me personally, it's hard to be yourself all the time when you're working at corporate. Right. You're just you're putting on your game face. And there's a little bit of for me, it felt like a lack of authenticity around who I who I am as a person. And so I knew that I wanted an opportunity to just be myself. Right. Do what I want to do and follow a passion. And when when it became when all crystallized for around investing for me in twenty thirteen and twenty fourteen, I just became my resolve was so strong. I'm going to do this right. And it just became a matter of time before I kind of got enough properties under my belt and enough cash flow where I knew I could make that transition. And for the past year and a half or so prior to me leaving my corporate job, I actually had the date on my calendar, like, that's the date I'm going to be done. And I nailed it within 15 days. Cool. That's awesome. And so when I was it was almost like one of those things where you write it down, you're going to you're going to hold yourself to it. Like I was holding myself accountable to this goal of mine and I made it happen. And it's for me, it became I just wanted time. I wanted financial independence. I didn't want to have to be beholden to that biweekly paycheck and tea for and which ultimately leads to time with your family. And that's that's kind of what I'm a very cool.

George El Masri [00:37:11] We'll keep doing what you're doing. And that's it's great that your your strategy is working. You've got your team in place. Everything's going well. Before we move on to the next section, do you have any anything to add or any advice to give or anything that we didn't discuss?

Scott Zandbergen [00:37:25] I think we covered it. It's just for me, it always just comes down to. I'm sure everybody says the same thing, right, but it's so easy to get caught up in this in this mindset of you talk to them as much as I do. People reach out to you and they want to pick your brain. I want to have a coffee with you. And I'm going to do this work, like when you're when you've kind of hit that tipping point yourself and you realize in hindsight that it can be done. Like you just want to project that onto other people, like just do this already, like stop thinking about it. Like it's not it's not rocket science. It's not super easy. It's not passive, but it can be done. And if you actually are committed to doing it, just do it. Take me take your first step towards getting it done. And that first step might be go get prequalified for it for your first investment property mortgage. I do that like quit thinking about quit. Get your head out of the spreadsheet.

George El Masri [00:38:17] Right, right. Yeah. And stop, stop. I think what a lot of people do is they they think about all the things that have to get done rather than breaking it up and saying, OK, well, I can just start by doing this one step. And then once that's done, let's talk about the next step after that. Yeah, yeah, yeah. I find that just to get the ball rolling, you just got to move, like just do something. That's right.

Scott Zandbergen [00:38:36] Yeah. It's like a linear transition, like where am I going to start going to get this thing done. And I know kind of ultimately what I'm looking to do, but just go over each hurdle one at a time, just go through it. Right. But I think a lot of people don't even jump the first hurdle. They just they just wait. And I'm going I'm going to talk to ten more people. I'm going to read ten more books. I mean, that's all great. Read books, listen to podcasts. But don't just do that and use that as inspiration to to to actually take some action.

George El Masri [00:39:02] Yeah, right. Exactly. Yeah. I think another part of that is managing your stress because there will be some sleepless nights, like you said, sometimes there's just that, you know, you got the message or whatever. Something's, you know, something's going to happen or whatever the case might be. But just learning to manage your stress and figuring it out because

Scott Zandbergen [00:39:19] there's always anxiety. Yeah, well, yeah.

George El Masri [00:39:21] Yeah, exactly. Yeah. OK, so let's jump into the random five. So I'm going to ask you five random questions for random questions. One was always the same and you just let me know the first thing that comes to mind. Some of them are actually kind of hard. So I'm just giving you a heads up. They're hard to it's hard to think right on the spot. What's something that everyone in the entire world can agree on?

Scott Zandbergen [00:39:43] I mean, lots of things, the sky is blue, water is wet, financial independence is awesome.

George El Masri [00:39:53] Take your pick. Perfect. I don't create these questions. I actually just like a random question generated pretty much if you had a clock that would count down to any one event of your choosing, what event would you want it to count down to?

Scott Zandbergen [00:40:07] Any one event of my choosing, yeah. Well, I would have said financial independence, but now I'm going to say grandchild number one, cause that's awesome. I do have two daughters, by the way. Yeah, a

George El Masri [00:40:24] couple more years before.

Scott Zandbergen [00:40:25] Yeah. 19 and 17. So I hope it's more than a couple of years.

George El Masri [00:40:29] Yeah. OK, so that was cool. So you've reached financial independence, obviously.

Scott Zandbergen [00:40:33] I mean I would say I mean, you

George El Masri [00:40:35] don't have to

Scott Zandbergen [00:40:36] work. Yeah. That's not working. And so I guess that's what it means. Right. Is this financially independent? Yes. I mean, I'm still I'm still hustling. I'm still running out dealing with tenant issues and what have you.

George El Masri [00:40:49] But I don't have that pressure of having to make that next paycheck to pay your bills.

Scott Zandbergen [00:40:56] Yeah. And your advice for me is like it's the it's knowing that I'm not working for the man. Right. I'm not I'm not working to make some other company successful anymore. And it is as much as I enjoyed doing that. And I had a great a great get great in my last company, last several companies I worked at had a lot of opportunity to get out and be on stages and talk to accountants and bookkeepers at big accounting conferences. I know it sounds super boring, but this is what I did. But at the end of the day, you're like, it's not really doing much for me. Yes, it's building my my my skills and my personal brand, I suppose. But when you don't have that need, I don't I don't I don't feel like having to drive to an office and go work on a Monday. Like, that's kind of cool to have that. The thinking anymore, I don't know.

George El Masri [00:41:44] Yeah, that's that's an awesome feeling to have for sure. Where's your go to restaurant for amazing food,

Scott Zandbergen [00:41:51] like go to restaurant for amazing food. Oh. Well, when we lived in the beaches in Toronto, I was a big fan of and this is before it became a chain and went everywhere but the burgers priest. Oh, yeah, they had one in just outside of the beaches on the way to Leslieville in Toronto. And it was the original location and that was like that place was to die for. So I mean, you literally die if there food A that would be the place where there would always be a line up. Unbelievable.

George El Masri [00:42:22] OK, and then number four, what's the most amazing slow motion video you've seen?

Scott Zandbergen [00:42:32] Well, I don't I haven't seen it yet, but I'll just use this as an example. I'm going to watch it because I heard it on the radio yesterday. Back in the 70s, they blew up a dead whale carcass on a beach in Oregon. Apparently, you can watch this thing blow up in slow motion. Oh, OK. And it was was a big cluster. What happened? Right. Took a big chunk of whale blubber, like blew a quarter mile down on somebody's car and smashed it all up. So I want to watch that thing explode. I mean, there's lots of other good slowmo videos, but that's that's what I need to watch.

George El Masri [00:42:58] OK, and the last question, what success principle do you live by?

Scott Zandbergen [00:43:02] So for me, I would say this goes back to about ten years ago. I did a week long executive leadership course at Queen's University, paid for by my employer. Thank you very much. Like a ten thousand dollar course or something on site at Queen's, which is really cool. And there was one thing that really stuck with me and it was just around. No, you know who you are, right? Know what what you're good at and what you're not as great at your strengths and your weaknesses and don't obsess over your weaknesses. Double down on your strengths. And that's stuck with me like I took. I remember I wrote that down and I for some reason it was it was new thinking for me. And this is ten years ago. And because up until that point, I'd always beat myself up over things that I knew I was not great at in my job. Right. And whether it was, you know, I wasn't the greatest, most analytical number cruncher in the world or whatever it was, I was more of a relationship person. I was more of a communicator. And and so I just took that to heart to say, like, if you're good at something, like learn how to make that you're like make that your differentiator. And so that's and I've really kind of doubled down on that. Right.

George El Masri [00:44:15] So cool. Now it's great. And that's that's great advice. So before we finish things off here, I just want to ask you how people can reach you, what services you might offer.

Scott Zandbergen [00:44:27] So best place to reach me. Just look up my name on Facebook or on Instagram. I would say I'm probably a little more active on Instagram with my investing adventures. So I post stories around what's going on with our tenants, filling, filling units for tenants, renovations that we've got going on, things like that. So, yeah, Instagram or Facebook, I'm available.

George El Masri [00:44:50] What's your handle on Instagram?

Scott Zandbergen [00:44:51] It's my name. So Scott underscores and Burkean

George El Masri [00:44:55] Zinberg and yeah, I got to remember it. I do like I know it now. I just I'm going to make sure next time I see us say it properly. OK, perfect. Scott, thank you for joining today. And I'll just make sure to put all of your information in the description when we when we put it up. And yeah, it was it was great chatting with you. Thanks for having me. Thanks once again for listening to another episode of the Well Off podcast. Just want to remind you that if you do appreciate the content, all I ask is that you comment, maybe like it if you can, on the platform that you're listening to it on and finally share it with friends and family. I'd love to get the message out there and it would mean a lot if you can share it. And finally, I just wanted to offer you as a valued listener, a free copy to the roadmap to real estate investing, which is a document that I've put together which helps you identify what strategy would best suit your needs at this current time. You go over certain things that are included in this document step by step, and it'll hopefully provide you with some clarity. So have a look. You can go to w w w well off Dossie Forward Slash guide to download your free copy.

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