Table of Contents
Podcast Transcription
Sandy Mackay [00:00:31] Breakthrough Real Estate Investing Podcast Episode 86.
Rob Break [00:00:47] Now, hello and welcome to the Breakthrough Real Estate Investing podcast. We put this show together to inspire you and help you break through to the life that you want to live through the power of real estate investing. My name is Rob Break, and here with me again is Sandy Mackay. Hey, Sandy.
Sandy Mackay [00:01:16] Hey, Rob. I was everything. Go on today.
Rob Break [00:01:18] Good. Good. What’s new and exciting with you?
Sandy Mackay [00:01:22] You know, just always new and exciting stuff. I mean. Well, maybe we can share a little bit, but what’s going on? But you just ready to roll and promotes more content here. We’ve got a great guest. So I’m excited about that. We did talk about something a little different there. We haven’t really spent a whole lot of time, but the about this topic,
Rob Break [00:01:40] you know, we’re going to talk about multifamily investing and we Pierre-Paul Turgeon on with us. Some super, super excited. And he’s with us right there on the other side of the line. And let’s just say a quick hello. Hey, how are you?
Pierre-Paul Turgeon [00:01:53] I’m great. You guys, great to be here on your show.
Rob Break [00:01:57] So we just have a couple of little housekeeping things to catch up with. What should you first and foremost, what are we going to talk about Sandy?
Sandy Mackay [00:02:05] Obviously, they’ve got to jump over to our website, Breakthrough Everyday podcast dossier. And once you go ahead and check that out, it’s caught every episode that we’ve ever done there. They can download our free app for the ultimate strategy for building wealth, the real estate and get a little more info from us through there that can start getting our emails and what’s going on with us more regularly. Any events we have coming up special offers, all that sort of stuff, so they definitely go over and grab that.
Rob Break [00:02:35] Yeah, Sandy and I are doing Cindy and I are doing events quite often now. So, you know, if you want to be up on what’s going on and get on our list for sure, and you can see you’ve got you’ve got an event coming up very soon. Do Cindy?
Sandy Mackay [00:02:48] Matthew? Yeah, I mean, we’ve got a few coming up this this spring where we’re recording this relatively close to one that is going to come out. So I guess it’s all pretty relevant. We’re going to we’re going to have some events. Yeah, we’ve got a couple in May one come up in two weeks here, then in April. And you know, it’s all great to listen and learn on these shows. And I think we feel pretty good value and content for everyone. Nothing beats going out there and getting live in-person networking, meeting some other investors or wannabe investors or high-level investors already and getting a little bit of more face-to-face time and really taking some action, right?
Rob Break [00:03:27] Yeah, exactly. And I’m doing a bunch of well, I mean, it doesn’t really it doesn’t really matter when you’re listening to this, but you know, so if it’s in a couple of years, hopefully we’ve got the same stuff going on. But I’m doing a lot of property tours with investors and we’re going out and seeing the different regulations and going over what’s involved in adding student rentals, legal student rentals or legal second suites. So just going through the processes of what’s required and meeting other investors and hearing what they’re doing and just getting a lot of good information and meeting a lot of good people. So yeah, set up for those lists and you’ll be involved in all that stuff. Now secondly, we encourage everybody to go over to iTunes and leave a rating and review. It helps us get out there. It helps us get super huge guests like Pierre Paul. So we’re really pumped to have him on. And I won’t delay too much, but I am going to read a couple of the most recent reviews that we’ve gotten here because they’ve just been rolling in the last like we’ve just gotten three more in April, three more five-star reviews. So we’ve got two hundred and twenty-four reviews on iTunes now. So thanks everybody for sending these out. So here’s the first one. It is from epic death one. So I mean, you wouldn’t want to have a bad show and have them review it. But he says, hi guys, just want to let you know. I’ve been listening to BiggerPockets for almost a year now. Ever since I found out that there was a podcast for Canadians, I dove right in and never stopped. Love your podcast, love the hosts co-hosts. You guys have a literal sorry. You guys have literally replaced BiggerPockets. I barely listened to them. Keep it up, guys. Changing lives in a positive direction. I only wish I could give you 10 stars instead of five. Well, thank you very much. And you know, Bigger Parties is an awesome podcast. We sort of modeled this one after that one. I basically said, I like what they’re doing. So we just copied them really and just gave Canadian content. So appreciate the comparison there, guys. The second one here is from Richter Construction. He says super permanent podcast Five Stars. From the few series I listen to, breakthrough is definitely the most informative question I have. A question I have as a startup builder investor, how can you start to play in the market when the homes in the region you are in are crazy, pricey and you are a startup builder and like reputation? I live in Vancouver and 10 years ago, given the market, I could have purchased a property for the B r strategy. But now it’s tough business. Well, I mean, there’s no quick answer for that question, but I mean, it’s not easy, right? Like, the good deals don’t come every day. You’ve just got to get out there. Keep looking for them. Stick your nose into it. Tell everyone what you’re up to. Tell everyone what your plans are. And eventually, you know the right one will come to you. I don’t think that a lack of reputation is going to stop you. And if you have the determined and drive that you need to get going and it’s just meeting people, right? Networking.
Sandy Mackay [00:06:50] I’d say two events go to events, maybe more people in the park and try to do something similar or that I’ve already done something similar. And model it off them and take action, right? I mean, a lot of markets are like that. A lot of people said the same things. However, many years ago we were starting out, Rob. I mean, yeah, I’m not going to change. It’s not going to change. It’s always seeming unattainable, especially obviously Vancouver, Toronto or a little more required, a little more capital to get going. But there’s a lot of secondary markets, probably outside of Vancouver. I’m sure that that have opportunity.
Rob Break [00:07:23] Yeah. Last one really quick is from Austin RAM Charge fan, and he says five stars. Lots of great info really enjoyed the Belly’s episode, even though it may have been a little off topic. Keep up the good work. Well, it’s real estate investing, so I don’t know if it’s off topic, but at least you liked it. Unlike the other guy that wrote in and said he gave one star zero stars because we featured a podcast on believes investing. So I don’t know. Well, this is good. So thank you. Austin RAM, charge fan and everybody else who’s written us reviews really appreciate it. There’s a couple more there, but out on a, you know, we got we got a big guest to get it right.
Sandy Mackay [00:08:04] Do it? I know.
Rob Break [00:08:05] Yeah, OK. So without further ado, today we are very happy to have Pierre Pulitzer’s on with us. He’s going to share how to get started in investing in apartment buildings of five or more units anywhere in Canada. So I’m super excited to have you on. Welcome.
Pierre-Paul Turgeon [00:08:24] Thank you. Thank you for having me. Really happy to be here.
Sandy Mackay [00:08:26] Great. So I’m going to read the bio here. We got for you and then we can kind of kick it off with that. Let everyone know a little bit more about who you are and what you’ve been up to up to this point. And you can maybe add to it if you need to. But here Paul is Canada’s leading authority and insider when it comes to investing in apartment buildings because of his unique perspective of this type of investment. He’s a former CMHC multifamily underwriter and full-time multifamily investor with a portfolio of one hundred and sixty doors, maybe more now valued in excess of twenty million. As a former CMHC apartment building underwriter, he’s analyzed hundreds of apartment deals in three provinces three territories. He’s analyzed more apartment buildings than most of the largest landlords in the country. And not only is he familiar with the front-end buying apartment buildings, but also, he is very knowledgeable with the back end of his business of this business, and that is when apartment deals go sour and investors default on their loan, and he’s also managed. The default management department in CMHC is prairie office. And so this wealth of knowledge, honesty and experience enables people to invest in apartment buildings strategically to ensure a sound return for his investors with low risks and a bunch of awards. Pitfalls won numerous awards, including Multifamily Investor of the Year, Top Player of the Year with the Real Estate Investment Network Server Service Provider of the Year 2012 Bye Crew, Canadian Real Estate Wealth Bar as multifamily training program. And he’s the national speaker. He’s a trainer on the subject of multifamily investing, and if you want to go grab his free e-book, I’m sure maybe we’ll mention it again, but his free e-book on multifamily investing secrets revealed you can pick that up at Multifamily Investing Canada dot com. And so again, wow, welcome lots. A lot of different cool stuff you’ve done there. Also anything to add to that or is that summing up?
Pierre-Paul Turgeon [00:10:20] No. When I hear this, is that really me? Did I do all these things? Yeah, I got a good life. I, you know, I yeah, life is pretty good, you guys. Yeah, that’s good enough.
Rob Break [00:10:33] You know, what about the family? One thing we kind of overlook a lot of times when introducing people is about their families. So you have you’ve got a family, right?
Sandy Mackay [00:10:40] Oh yeah. Oh yeah, oh yeah.
Pierre-Paul Turgeon [00:10:42] That’s look, it’s certainly here, right? I’m in Alberta. You guys are in Toronto, so it’s 9:30. So just 45 minutes ago, I just said goodbye to my youngest. He’s 14. So Jacob is my buddy. There’s a big gap between him and his older sister and brother, who are both away in university. My daughter Maryanne, 19, she’s at UAB in Edmonton and Sciences first year. And my older son Anthony is twenty-one. He’s actually in South America, in Colombia donors, and he’s also in sciences, normally in B.C., at Thompson Rivers University in Kamloops. But he’s doing a semester in Medellin, Colombia. I think he’s watched too many narco shows, if you ask me,
Rob Break [00:11:24] but I
Pierre-Paul Turgeon [00:11:25] love that. Yeah, and my beautiful wife, Meadow as well. So yeah, but can I say something, guys? I know because we met that thinks rob you, and I think it was in January in Durham, if I’m not mistaken, right? Yeah, that’s right. But I want to go back to your introduction because I’ve it’s my first time on your podcast. What did you say about inspiring and. Lifestyle and all of that that I hear?
Rob Break [00:11:51] that, yeah, you did. Why is that good or
Pierre-Paul Turgeon [00:11:55] it’s frickin excellent what we’re going to talk about real estate. But at the end of the day, the real estate portion is a is a means to an end. Allow me for a moment to tell it to describe where I’m sitting right now. So I’m sitting in my home office facing West. It’s a beautiful, sunny day. I live on an acreage on top of a mountain. I see the Canadian Rockies full of snow. Still, I see pumping jacks because I’m in Alberta. There’s pumping jacks, pumping oil everywhere. And after I’m finished with the podcast, I’m going to go and pick up my eggs from my chickens in my yard. And I got my gratitude rocks sitting on my MacBook Pro and my made myself a coffee, a cappuccino. That’s what real estate gives you. And talking about beliefs, I was there months ago with my wife and some friends. So where are you? Yeah, that’s what we’re talking about. Real estate is a means to an end. Absolutely. You know, so I just want to say I’m very grateful I got my gratitude rocks, which I picked up, by the way, on the shores of Lake Titicaca on an amazing adventure trip with my older son of some years ago.
Rob Break [00:13:02] So I was going to ask you, what is the gratitude rock?
Pierre-Paul Turgeon [00:13:05] Well, it’s just, you know, neuroscientists have figured out that maintaining that feeling of gratitude is how we become. You know, it’s a secret to being happy. That’s all it is. So I never go anywhere without this rock nowhere. And when I start speaking even this podcast of my workshop last weekend in Vancouver, I start with that feeling of gratitude every day, every day, and I in my days in a in a state of gratitude. And this is this is no B.S. this is real. So that’s my reminder, and I know it’s a beautiful rock. I can send you a picture if you want very colorful. Sure.
Rob Break [00:13:41] Yeah, that’d be great. We’ll put it up on the show notes.
Pierre-Paul Turgeon [00:13:44] So, but at the end of the day, that’s why we do real estate. It’s a means to an end. In the end, I kind of live a good chunk of it, you know, but it didn’t happen overnight, of course. But you know, let’s ponder on that because that’s why we do it. That’s why we absolutely.
Rob Break [00:13:59] And Pierre Paul, you know what? Like, if you go back and look at some of the stuff that we put out there, some of the recordings we put out, like we don’t just focus on practical real estate stuff, we really like that and especially new investors, they really like that stuff. Actionable steps. But we’ve also done a ton of interviews of people who just talk about the mindset that you need to get through all these obstacles that pop up when you decide to be a real estate investor.
Pierre-Paul Turgeon [00:14:27] You know, I love that as well. You were talking about the builder; I think you mentioned in Vancouver. I just came back from Vancouver, and I do get out there a lot, right? As you know, I get across Canada. I think that person that that that that listener of yours needs to work on the mindset. You know, I teach that a lot to my students when I teach, because really, it’s not the mechanical or the mechanics of real investing. That’s the challenge. It’s one’s mindset. That’s the impediment. Oftentimes the obstacle. Mm hmm. And I’d like to remind your listeners that obstacles are there to instruct not to obstruct, to quote Brian Tracy.
Sandy Mackay [00:15:05] So I like that.
Pierre-Paul Turgeon [00:15:07] Yeah, yeah. And a great book is the obstacle is the way by Ryan Holiday. So I highly recommend that there’s always a way to, you know, when there’s a problem, there’s always a solution. If you cannot find the solution, you’re part of the problems.
Rob Break [00:15:20] Yeah, there’s now still go around it, go over it, go under it or go through it, whatever it takes. I heard that Shawn Terry taught me that anyway. OK, so let’s get into this a little bit. So we heard in the intro a brief summary of your background, but how did you get involved in multifamily properties?
Pierre-Paul Turgeon [00:15:40] So I actually learned English in my late twenties in Toronto. Actually, I have a degree in political science with major in international relations from U of T, and so I’ve always been interested in international stuff, right? But then she ended up opening an international divisions many years ago. I’m not even sure if it still exists, but so and I also have a law degree. So I kind of had a few kind of skills that were great to work for Sammy International Department, and we’re talking back in 97 in those years, so that’s quite a while back. And so basically, CAMH at that time was approached by the World Bank and its subsidiary, the International Finance Corporation, IFC, to try to provide consulting advice to foreign countries, in particular to the West Bank and Gaza and the Middle East on how to set up mortgage default insurance. So it was pretty exciting work, to be honest with you. And I got involved as a project manager whereby CMC was providing consulting. Ice to foreign countries, so as I said, the West Bank and Gaza, which is next to Israel, Africa, Gabon, Romania, Mali, India, so I but I was I was there as a project manager, not as a deliverer or somebody who was delivering the expertize. So I decided to learn sandwiches, core expertize, which is mortgage default insurance. As we all know, right borrowers get financing, and which ensures the financing. So. So that’s how I got involved with international projects with CMHC. But I want it to be on the delivery side, not just the project management side. So I decided to take an assignment in Cheese Prairie region. I’m the mountain guy, by the way. Like I said, as I speak to you, I see the beautiful. It’s a beautiful blue-sky day with the snowy Rockies. I used to come and hike in the Rockies all the time when I was a student or for holidays and stuff like that, so I got an assignment to work at CMHC Regional Office in Calgary. And initially I started at a single home underwriter, so underwriting principal residences. And but I was on an assignment to get to know various departments in cemeteries underwriting department, if you will. Then I moved to what dimension to the default imagined a real estate department, which has two components. This is one CMHC like people default on their apartment buildings and or their principal residences. The lenders have the obligation to try to sell those properties. And after a certain time of exposure, if they’re unsuccessful in disposing of the assets that were insured by CMHC, CMHC would take them back. My department, I was managing the default imaginary estate department. And so there was two components to that. Like I said, the real estate was smaller rental properties, people’s residences, principal residences, and the default measure was default margin of apartment buildings. Here’s the good news for you. Yes, my job was to manage defaults of apartment buildings. But you know what? They rarely default. That’s the good news. Even in Alberta, we’re having a tough time in our market here because of the oil crisis and all that. And that’s something I certainly want us to talk a little bit about later. But even in today’s environment in Alberta, where the economy is really suffering, still because of the low price of oil or actually now, the price of oil has somewhat recovered, but we still are in a surplus position. Apartment buildings pretty much never default. So there you go. But that’s so. And then once my son was done in Alberta, I decided to stay because I wanted my children to learn English. And now my two older children are even trilingual speak Spanish as well. And all of that. So that’s how I ended up doing this. And so it’s a long winded. You have an ask questions, but no problem. I’ll finish with this. I was getting tired of being a bureaucrat as much as I’m indebted and grateful for having had to carry a career, I’ve had at CMHC. You know, it was my coming out as an interpreter. And in 2008, you remember the great credit crunch that preceded the Great Recession of 2009. I was an underwriting full-time underwriter in the multifamily department that CMHC Hey guys, I have never seen people make so much money with apartment buildings. And that was my big aha moment. And, you know, combine that with the fact that it was tired of being a bureaucrat. And I said, you know, I want to join the parade and start to invest in apartment buildings because that was my job, then day out to analyze the risk factors as they pertain to investing in apartment buildings and how to mitigate them and how to get financing. So I made the jump, and you know, I’m full time at this since 2010 with, as you said, one hundred and sixty doors portfolio worth over twenty-two million dollars. And I get to help people across Canada to do the same thing because my mission and I’ll end with that for this question. My mission is to democratize the access to multifamily investing. Kind of I want everybody who’s got the balls, the guts, or if it’s a good French, you’re on display, it’s OK to have an equal chance at doing it. Call me an equalizer and my purpose is to instruct people to give them knowledge, empower them, give them the tools to invest in apartment buildings. And of course, like you guys to inspire people because without the spark of inspiration, you won’t take action. And finally, my hope by having this mission again, which is to democratize the access to multifamily investing Canada, is that with the wealth that people create by investing in apartment buildings, they’ll do good in the world, they’ll spread the wealth around and to goodness, and I do that there. These are not empty words for me. I do my property, send money to two children in Africa and South America every month. We’ve got to spread the wealth. So there you go.
Rob Break [00:21:49] If that’s something other people can get involved in as well, maybe we’ll get the links from you and put them in the show notes. Yeah, OK.
Sandy Mackay [00:21:57] Definitely. Well, what are just before we get into the multifamily, what defines a multifamily
Pierre-Paul Turgeon [00:22:04] five or more units in a building, five or more units? Thank you, Sandy, for asking that question because it’s a critical question. I always start my talks by delineating the distinction. It’s critical because it’s a brave new world. I don’t know your audience, but if your audience are mostly made up, made up of investors that invest in small rental properties, when you move to the five or more units apartment buildings, it’s the big leagues. Financing rules are different. Everything is different. The only thing that stays the same is the actual market analysis, right? The fundamentals, you know, population growth, demographics and all of that wage increases, GDP growth and all that. But otherwise the rest is very different.
Sandy Mackay [00:22:47] Okay, great. And then so what are the pros and cons of investing in those five plus unit apartment buildings
Pierre-Paul Turgeon [00:22:53] are, in my opinion, the pros far outweigh the cause. First of all, you create more wealth because of the wealth multiplier. Basically, contrary to smaller rental properties, rent for units when you move to the bigger stuff, the A.I. is the driver of valuation and why? Meaning net operating income? That’s your income before you service your debt. Every time you increase your NOI by a dollar, the property appreciates by about 16 dollars. So it doesn’t take long. Just imagine they’re giving a small increase of twenty-five bucks a month and rental increase times that 16 multiplier. So that’s one of the biggest advantages of that is the one that most of us are in it for, right? The other one that we’re all in it for. And that’s why it took a few moments describe my lifestyle. Now you get it. I travel a lot and I; you know, I work from home and have a lot more freedom than I ever did when I was a CMHC. But when you crunch the numbers, when you tally up the operating expenses in those operating expenses are two items for property management, one for a professional property manager and one for usually a non-site manager. So the hassles of being a landlord are handled by those people in your team, your property manager, and your own site manager. That means what that means. Paul has more time to take care of his family, to travel, to go hiking, you know, whatever I want to do and follow my passions. So it’s less labor intensive. For that reason, the property has to cash flow enough to pay for these two people to handle the hassles of being a landlord. You also have greater economies of scale because the more units you have under one roof, the cheaper it is to operate on a per unit basis. Right. So you end up with more money like the same boiler will heat up all the units. So your cost of heating all these units on a per unit basis decreases the more units you have under one roof. So that’s some of them a lot less risky after principal residences, the second asset class that banks love to land on. Guess what it is? It’s a part of the buildings. Why? Because you heard it from the guy who used to manage reports at CIBC of apartment buildings. They rarely default. They rarely default. So those are some of the advantages of investing in apartment buildings. And they’re the main reason why the large landlords, the pension funds, they love, apartment buildings and guys like me in terms of the cons. Well, you need more capital upfront to get into the game, right? It’s not as liquid of an asset as a small rental property that’s come out of it. You really need to do your homework because there’s not much margin for error. This is something over the last weekend, while I was giving my workshop in Vancouver, I was telling my students, I’m teaching them the high standard of the land, how to invest in apartment buildings. And when I say how to invest, that means like what any investor should be doing, assessing the risks, and mitigating the risks and see how much is the toughest institution that deals with multifamily investing in Canada. So but it you do need to do a lot more homework because if you screw up, you’re not going to go very far. It’s a very small world. So those in a nutshell, guys would be sort of the pros and cons at high level.
Rob Break [00:26:30] OK, I like that. Yeah. What? OK, so then I guess what would be some of the myths that would hold people back from multifamily investing because they know, for me, it seems quite daunting as well. So I’m guessing that that’s probably part of the myth of, you know, that it’s just too difficult for the average person to get into.
Pierre-Paul Turgeon [00:26:56] There are a lot of moving parts. I’d be lying to you guys and your listeners if I said otherwise, especially like I’m completely exhausted because my workshop, I just finished it yesterday, right? Some out of hours. And I there are a lot of moving parts, hence the reason I said, you really, really need to do your homework. But first of all, most people who invest in multifamily properties have never been a seriously multifamily underwriter. All right. So you don’t have to have to have been a former CMHC multi-family underwriter to get it. It goes back to mindset. You know, one of the quotes that I tell people, if you want to fly with the Eagles, you cannot think like a pigeon. OK, it’s getting rid of your limiting beliefs, but it is doing your homework so you ideally to. It’s just here’s the problem if you make a mistake on the multifamily side, invest in an apartment building a thousand more units. It’s a costly mistake. It’s unforgiving. Hence, the reason. So you, you, I recommend. And of course, I teach. And it’s not just because I want to sell my training programs. You need to do your homework. That’s one thing. So that’s a daunting. But can anybody do it? Absolutely. If they’re perseverant enough, just like any major goal, like Olympic athletes or whatever. Right. So but you don’t need any prior experience, you know, you don’t need prior experience. I teach people that are regular folks that are not sometimes investing in real estate, and they do it, but they are hardworking people. They are disciplined. This is. So that’s the first myth. You don’t need to have prior experience at all. OK. The other reason that seems to stop people is you don’t need you need money; you know? Guess what, guys? It’s not my own money. I don’t invest my own money and most of my buildings, it’s OPM. Other people’s money. OK. And not only that, but I’m super successful at raising capital privately. You know why? Here’s my expertize and this is how I present this to my students. My expertize again, is to how to assess and mitigate investment risks as they pertain to investing in apartment buildings. And then how to get financing if you’re going to go out and raise money privately from people, which I do like doctors, I usually deal with high-net-worth individuals, right? What do they want to know from you? If you want them to invest with you, they want to know have you mitigated the risk factors and assess them and mitigated them, right? Have the financing going to work out who’s going to provide personal guarantees? So that’s how I’m successful at raising money because I’m successful as assessing those risk factors.
Rob Break [00:29:39] But don’t you think that it also has to do with your track record? Because what about new people who don’t have a track record? They’re not going to be able to. I mean, for the most part, they’re not going to be able to go out and pitch these things and be able to confidently mitigate those risks. They haven’t been through it. What do you think about this?
Pierre-Paul Turgeon [00:30:02] This is Rob speaking, right? Yeah, I am telling you, my students are regular folks that do it, that pull the trigger. So it’s a chicken and egg situation now for those of those people that don’t take my courses designed to help you do that. OK? My purpose is not to teach people how to raise money, but I’m telling you I use the same system that I teach my students how to raise money. So you wouldn’t believe how thorough this is. The stuff that I teach. I mean, like I said, it’s my background as a former CNBC underwriter. Right? So it’s pretty powerful. It’s not part of this podcast, but there is. I give my students all the tools that I can to help them out, like one of the tools that I share with my students. It’s called a Moses plan. It’s basically an executive summary whereby, you know, you pitch a deal to a potential investor at a higher level, mind you. But to see if you can go past, if they’re OK with that, then you give more detail. Excuse me, more details, but essentially, it’s an acronym Moses plant that stands for management. Who’s going to manage the property? You’re going to have a property manager and all of that. Then the old stands for opportunity. Why invest in multifamily properties? You guys are aware of the stress test, right? You’re aware of that. Homeownership is becoming increasingly difficult, right in Canada. You’re surely aware that the cost of money remains very low. Like I’m in the middle of this week when I hang up the podcast with you, I got to prepare a financing application for one of my refinancing. I’m going to get an interest rate of three and a quarter percent for a loan amount. I think I’m going for a million eight. That’s not everybody. And what’s the cap rate on that one? Probably five and a half. So I’ve got a nice spread. So that’s the opportunity, right? And even Vancouver, by the way because my student bought in Vancouver, in Maple Ridge, right? Sort of east of. Hoover. So that’s all for the opportunity, the opportunity is there. There’s always that opportunity. If you dig at work hard enough, when there’s a will, there’s a way, then you go on the SE is the structure. How are you going to structure the joint venture? Who’s going to have voting shares? Is it going to be a USA unanimous shareholder agreement? The JV joint venture agreement, then the E of the Moses plan is the exit because everybody sometimes they need to exit the investment, right? So how’s that’s going to happen? That’s going to happen. And that is the structure of the security, right? Who’s going to provide personal guarantees and stuff like that? But this is an executive summary. Very powerful, if you know what you’re doing.
Rob Break [00:32:33] Well, quick question for you. For example, I took a mentorship program once before it was a group program, and I ended up doing one of my first joint venture deals in with someone involved in that group. So would you say it’s pretty common for you to have a group of people get together? They’re learning about how to do this, but then and then some of them band together to go out and make that first purchase.
Pierre-Paul Turgeon [00:32:58] Yesterday, when I do my workshop, I try to go with the knowledge in the room and my students. But as I mentioned to you before we started recording, I believe the podcast this weekend. It was my first workshop in Vancouver and on the Friday afternoon, the way my workshop, my live workshop work is, we go and inspect an apartment building with a professional building inspector, and this year my workshop and découvre. It was actually building from one of my graduate students. OK, so from years past one of my earlier workshops and what I did because she was there and we were looking at, you know, inspecting her building her and her team came yesterday and shared their story. So she indeed, to answer your question, Rob, that’s exactly what happened. It was her. She was a realtor by trade and accountants. Then she hooked up with somebody that had some knowledge about financing and a builder, and they shared their story. So it’s kind of a form of, you know, a team. They created the team with complementary skills. And it was it’s a success story, like it’s an amazing story, and I had them share the story. So you’re right. Yeah, if you don’t have certain skills, find somebody who has them.
Sandy Mackay [00:34:08] That’s amazing. So yeah. Another reason to get out there, obviously, and network and meet people and at these events?
Pierre-Paul Turgeon [00:34:16] Absolutely. What are you having your events, guys I might pop by? When does that in? Maybe I’ll be out there and may let me know.
Rob Break [00:34:22] Yes, they really are real about yours. What are you guys going?
Sandy Mackay [00:34:26] We got a couple. I don’t. I don’t. I got to look. I look at the dates, to be honest. I think we have one May 11th in Niagara River, done something in Niagara. That’s an interesting
Pierre-Paul Turgeon [00:34:33] and. Oh no, I love it. I was there at Keith Spire in January. I spoke at the bar in January. But yeah, I’m there towards later. Latter part of May, May 24th, actually 22nd as well. I think I got a speaking engagement, but yeah, I’m out there that time. Let me know anyways. But yeah, but no, you’re right, you’ve got to get out. That’s what I do, too. I get it. I’m speaking Saskatoon Thursday night. I was in Vancouver this weekend that was my third trip to
Rob Break [00:34:58] Vancouver, so I think people can probably take away from this is whenever they’re listening to it, even if it’s not, you know, relatively close to when it was recorded. You can go to the polls website, which is
Pierre-Paul Turgeon [00:35:09] Multifamily Investing Canada dot com, multifamily investing Canada dot com.
Rob Break [00:35:15] And more than likely, you’ll find an event coming up. Of course. Yeah, yeah.
Pierre-Paul Turgeon [00:35:20] Although I should specify, I don’t do a ton. I just do one a year so far and now my first one in British Columbia, Edmonton in a month from now and then. Hamilton. Perfect. And they’re limited seating, right? I don’t do. I don’t do massive events. This is a cozy, fun, amazing event. So grateful to have the opportunity to be able to deliver these workshops. It’s just that I’m in a state of bliss this morning, guys. Like I said,
Rob Break [00:35:47] I know a bunch of people who have taken them, you know? Yeah. And yeah, and obviously you have, I don’t know. I’m trying to think of any that have bought apartment buildings that I know of. Maybe not yet, but I know it’s they’ve all told me it’s fantastic content, so well.
Pierre-Paul Turgeon [00:36:04] So let’s stick to that for a moment. It is. I just mentioned doing your homework takes a while, it takes a while. It does take a while. I would allocate certainly quite a few months to, you know, to do the homework and knowing the how it works. So that’s probably why. But you know, it’s just like any other training you take who takes action that’s beyond the of power to, you know, people don’t use the knowledge you teach them, but I teach them how it’s done and how I do it. And like I said, I’ve got a deal done. I’m refinancing the next few weeks, so
Sandy Mackay [00:36:42] and so stuff works. Is that the way to get started? How did it? How do you what do you recommend people get started? Is it just going out learning and all that?
Pierre-Paul Turgeon [00:36:50] And honestly, like I said, this group yesterday that my graduate student, she took my course years ago was nowhere near because I revamped the content almost three years ago. She took it before the content was really, really revamped, but they made mistakes, which I saw yesterday. I got the full story. At some point, their funding was pulled, pulled out from under their feet. Days before there were supposed to close. So you just never know what’s going to happen. So it was a rough ride. In the end, they stuck with it because they had the mindset, the will to persevere and they made it’s a great success story. They made, they made lots of money. They refinanced within, but it was a big job. So my point to your question, Sandy, you don’t have to have prior skill, but I would certainly I vouch for what I teach, so you can do it that way like they have and, you know, have make some mistakes, but they survived. Or, you know, you can take training like mine. And I’m not trying to necessarily push my training because I just told you. But my training is designed to help people like that that want to start from scratch and avoid all these costly, potential, costly mistakes. So but anything else you do like, you got to take action to think that they both said all three of them in my graduate student team said, you just got to try. And as problems arise, which with a will, all three of us are business owners. And you know what I said earlier, when there’s a problem, there’s always a solution. If you cannot find a solution, that means you’re part of the problem, find the solution. If you don’t take a course like mine, which would shave years and avoid like would teach you to high standards of the land, how to get investors started investing in apartment buildings do it your way. And when problems arise, you find the solution. That’s all I can say. It’s a mindset again.
Rob Break [00:38:39] Well, let’s shift gears a little bit here on let’s turn towards financing a little bit. So how does that differ from maybe investing in foreign under in units foreign under?
Pierre-Paul Turgeon [00:38:54] Well, so like I said, first of all, there’s two ways you can finance your deals, right? It’s conventional financing, which is not so much insured financing. And then there’s the which insured financing. There’s pros and cons. That’s kind of the stuff that I talk about, right? If you go conventional financing. First of all, your loan to value is the maximum loan to value 75 percent in most cases. OK. Because every lender has full discretion or CMHC to do whatever they want based on the risk profile of your deal and you as an investor slash borrower. So that’s an option. But generally speaking, if you go conventional, the maximum loan amount would be 75 percent of market value. Maximum amortization period will be 25 years. All right. Good news is conventional lenders are more flexible. They’re more businesslike. OK, so that’s in a nutshell. Whereas if you go and it’s they’re going to be able to. Turn around your financing application a lot faster than CMHC. OK. But they’ll charge, on average, about one percent higher interest rate. OK. Whereas if you go CMHC, the second kind of financing stream is going to take longer to get your deal approved. For example, my deal that I’m working on. Like I said this week to prepare my financing application, it only renews in June, but I have to submit it like eight six weeks in advance because the turnaround time is very long. So let’s say, for example, if I were to buy a foreclosed property that’s in court, I’m not going to go and get CMHC financing because it’s going to take too long. And when you’re I don’t know if you’re aware of that. If you bid on a foreclosure property before the judge, they want to mitigate the losses to the owner at the loss, the property, so you have to be able to close and finance the deal quickly. So if you’ve got a foreclosure, you’re going to go to a conventional lender. If you can wait it out and you have more time to close the deal, you can go CMHC because you’ve got although they’re not business-like because it’s a bigger bureaucracy, you can, first of all, go up to 85 percent of SIMEX lending value, which is often times most of the time lower than market value. Well, that’s but you can still go higher a little bit than 75 percent that you would for a conventional loan. And then you can also extend the optimization period to up to 40 years. I remember, I said commercial lenders only up to 25, usually where see if she can go up to four years if it’s a newer or a new building. OK, so you’ve got more flexibility there, which impacts you your cash flow, right? If the cash flow is a little bit tight on a deal and you know the market is ascending, while maybe you want to extend that amortization period over a little bit more than 25 years. You know, gives you a little bit more flexibility in that regard. And then the other good advantage, as I said, which is the major one, by the way, is you pay on average about one percent lower interest rate, guys. Do you imagine the impact it has on your return on investment? They one percent lower interest rate. So that’s why the big guys like you guys Schroder, when I drive Toronto, I’m always amazed at all the large, you know, multifamily properties, the high rises, concrete, high rises. We all know they’re owned by institutional investors, pension funds and all of that. Most of these guys go CMHC all day long. The large breeds the real estate investment trusts. They go CMHC all day long. But a drawback with CMHC, it’s a pain in the butt. Like my financing application, it’s so much work. It’s going to take me a couple of weeks to put together and I’m a pro at this. I know exactly what they want because I used to be the guy telling banks, if you want like I was an underwriter at CMHC, you want CMHC to your deal. This is all the stuff you’ve got to give me, and it’s onerous, very onerous. But that’s how you do it now. Those are the two main streams of finance in between. Sometimes you may need to get bridge financing, right if you’ve got again. If it’s first experience of getting funding and you know, if you want to stabilize the property, you may get something that’s in between. It’s called a bridge loan, but it is a conventional loan. And then, you know, it enables you sometimes to complete some upgrades to bring your rents up, you know, to stabilize the property, which is to maximize its performance type of thing. So in between, there’s something called bridge loan. And when you get a bridge loan after it’s you always a short-term loan, usually about 12 months. And then after the bridge loan is matured, you can go either conventional again or CMHC based on circumstances of your deal. And that’s what I teach.
Rob Break [00:43:27] Got it. And you would. And you would say that while you have that bridge loan that you would do some drastic improvements to the property so that it looks better to CMHC and DDA lenders?
Pierre-Paul Turgeon [00:43:39] Exactly. And hopefully you can increase your rents depending on your landlord tenant legislation in your jurisdiction. That’s the idea, right? Sometimes it’s a guiding job as well. Like my, my, my, my students. Yesterday, that group that came in and told their story. It was a complete gut. So the property was in bad shape. But the idea there for a bridge loan is you do a bridge loan. Yeah, exactly to improve property condition and hopefully increase your rents if you can. Right. And because then you want to go to you want to commit the deal to a five-year loan term. Generally, people, most of us take five-year-old terms once the property has been fully stabilized, i.e. you’ve maximized the performance of the property. That means maximize income and reducing operating expenses wherever you can.
Rob Break [00:44:29] Okay. And just out of curiosity here, when you said that they would consider 40-year loans on properties of a specific age, is that like, are they pretty tight on that? Or how old of the building are you talking about?
Pierre-Paul Turgeon [00:44:41] So just to be specific, 40-year amortization? Yeah, not the long term. Okay, just to be clear, because I want people to be confused. Oh yeah, yeah. You’ve got to make sure that the properties in super are very good. Condition. And to be honest with you, things have changed. This is not the work you’re not going to know. Read this anywhere and say which is material, but I know because I talked to lenders on an ongoing basis and across Canada. CMHC will probably only give now. It wasn’t always like that, but probably agree to a 40-year amortization only if it’s pretty much a new building.
Rob Break [00:45:16] OK. OK. All right. No, I was just curious about that because that did seem like a pretty sweet sort of deal, if you could get it.
Pierre-Paul Turgeon [00:45:26] Well, this is interesting. You know, the more I do this and that’s been what eleven years that I’ve been teaching this across Canada as an investor, we need to know what is it that we want? What’s our tolerance for risk, right? So we need to structure our investments accordingly, which is something in my early days teaching this material. I didn’t teach necessarily. So yeah, if you want, if your cash flow is tight, it’s great to extend the amortization because then your mortgage payments are less or smaller, right? So you cast a little bit better, but it takes you longer to pay down the principal. So if you’re closer to retirement, you know, that’s maybe something you may wish to do and, you know, keep a smaller amortization period, you know what I’m saying? So it all depends on what your investment goals are, which you need to be clear, that’s part of the homework that one needs to do upfront.
Rob Break [00:46:19] Are you enjoying the sandy? Fantastic. I love it. You got this one? OK, go ahead.
Sandy Mackay [00:46:28] Yeah, we kind of touched on the financing, right? I’m ready to go on from that. Or is anything else on that?
Pierre-Paul Turgeon [00:46:34] Don’t get me wrong, I just finished
Rob Break [00:46:37] a workshop
Sandy Mackay [00:46:40] where lots of people.
Pierre-Paul Turgeon [00:46:42] I mean, I mean, honestly, no, I kid you not. I mean, you know, and let me tell you something. There are probably your listeners.
Rob Break [00:46:49] By the time they listen to this, they’ll have their head
Pierre-Paul Turgeon [00:46:52] spinning like crazy. I mean, that’s how my students felt yesterday. Of course, the good news is when you take my workshop, you know, I, I know my stuff, obviously, but I hired a professional digital consultant to also create tool at the beginning. Now I can read them myself, but flowchart what you know, because there are so many moving parts. So honestly, I could teach my workshop. I could take an extra two days, probably to teach this stuff. But the idea, and I think this applies to everybody who’s in know any kind of endeavor that you do that’s challenging. Make sure you pick your team members appropriately. And in my world of multifamily investing, if you pick. Must make sure that you only pick multifamily experts starting from the realtor, the mortgage broker, the lender, the engineer that’s going to come and do the probably the building inspection and yes, environmental site inspection, because despite the fact that there are a lot of moving parts, if you have the right team, they’ll have your back covered, you know, they’ll help you out with the offer process, the offer to purchase process and all of these various moving parts, if you will. So don’t freak out, anybody can do this. I don’t want you, your listeners, to be afraid, you know, but you take it a step at a time, but you should have. I would recommend having some kind of system and you know, and I know that nobody else does what I do in Canada. And it’s not like, I don’t mean this sort of bragging way. It’s just a fact. And with my credentials and experience and I’m there for people like, you know, who are who are willing to roll up their sleeves and have the investment horizon, that’s the old saying that I should sit as a con multifamily is not get rich overnight to be where I’m at with the lifestyle that I have now. It’s taken me over 12 years, so I want to be clear on that. I’m not going to promise riches overnight. No.
Sandy Mackay [00:48:42] So what would you say? Yeah, yeah, I did have one more thing on that.
Pierre-Paul Turgeon [00:48:45] No, no. I just I just want to be clear with people, you don’t. Some people make crazy promises. This is long term investment horizon. That’s what you want.
Sandy Mackay [00:48:53] And I mean, 10, 12 years. I mean, really, a lot of people want to get rich quick, but 10 is not that long, really. I mean,
Pierre-Paul Turgeon [00:49:01] what? You guys are young, young, young folks. So but I’m still in great shape. I still like mountains and you know. But yeah, no, it’s few do it well even. And I would say that this applies also to smaller rental product one to four units as well. But the larger stuff, like I said, it’s not as liquid and, you know, to stabilize the property. That’s also not the kind I didn’t mention earlier like to stabilize the property again. By that, I mean, maximizing the property’s performance, i.e. maximizing rental income that doesn’t happen overnight. You know, its usual tenant turnover, right? When the tenant moves out, you’re going to upgrade the unit, maybe jack up the rent if hopefully you don’t have a landlord tenant legislation, that’s too prescriptive in that sense. And so it takes time and them to pay the principal down. But like I said, the cost of money remains very cheap, so it does take time, right? And your first profit center, guys. It’s not cash. That’s the least once. The first and foremost, it’s principle pay down. Second, capital appreciation. Lastly, it’s cash flow.
Sandy Mackay [00:50:03] Okay, what is the biggest obstacle? What’s been your biggest obstacle and challenge that you faced in real estate? Investing in general, I guess specifically on the multifamily is and how did you overcome it?
Pierre-Paul Turgeon [00:50:14] I think you said Sandy, my main obstacle. Obviously, I’m in a different kettle of fish because I had a big leg up when I did it. But I want people to understand something when I teach this stuff. So let me go back to my days when I my ass was sitting in a cubicle at CNBC in the multifamily underwriting department. And my job. Yeah, I do want to. I really that’s the key message, I’m glad that I thought of saying this to you guys. My job for four years of my life, so I was in default managing real estate for four years, then I was a multi. I move to the multifamily underwriting department for four years because I saw how much money people were making right. You got that drift like I was from the inside, saw how labor laws were making so much money, especially those crazy boom years in Alberta. OK, so my job day in, day out was to analyze other people’s deals and the comfort of my little cubicle at CMHC. And it was mindless. I had a beautiful spreadsheet, which I had replicated the same tool for my students. But I was going through this mindless no motions were attached. It was bang, bang, bang debt property risk factor. What is it? Bang, bang, bang. Checking the boxes. Market risk factor. Valuation risk factor. Board risk factor. It was. It was a and I was. My performance was evaluated based on how quickly I could process these applications. OK, but then like I said, I got a ha moment and I said, Gee, people are making a lot of money with these apartment buildings. I want to join the parade. When it came to time for me to write my first offer to purchase on a two point two million dollars, I was shaking in my underwear. I was scared shitless, and I hope you forgive my language, but that’s how I felt. And it because for once I was actually connected to what I was doing. You know, my emotions were involved. My neck was stuck out. I was taking all these risks and all of that. So I do understand people how they feel when they write, you know, they signed the dotted line on their first offer to purchase on a multifamily property, and I do my darndest best. And beyond that, to make sure that they are to build the confidence. So my biggest obstacle, if you ask my own, that’s what it was. It was that very moment, and I was a freaking bureaucrat. There was no other way of putting this with a six-figure salary, the best pension plan in Canada. You know, it was a big freaking job and I jumped out of the plane without a parachute. And I’ve been building wings on my way down ever since, and now I’m picking up altitude, you know? But you know, I just so, so that was its mindset. Remember, at the beginning of the podcast, we said, what is the biggest obstacle people face? It’s not the mechanics of assessing the risk factors and getting financing. I just give you a high-level summary of that. You know, it’s mindset. That’s what prevents people from succeeding in anything in life. And that was that was that is the biggest challenge. And then just having the perseverance and the will to learn it. That’s what I would say.
Rob Break [00:53:17] You’ve told us about some training sessions that you just did in Vancouver, but you’ve got to know you’ve got a bunch of educational seminars coming up. So tell us about what you have going on.
Pierre-Paul Turgeon [00:53:27] Yeah. So I’ve got so first of all, there’s too there’s an online version and which is the same content as the live workshop. So again, it’s that multifamily investing Canada them, but I got them into workshops. So this Edmonton is my market. That’s where my portfolio is located. That’s on May 10th through the 12th and then in Hamilton Bay, twenty fourth to the twenty-six, right. This is going to be my third workshop in Hamilton and same idea. The process is the same. On Friday afternoon we go, I take my students to inspect an apartment building accompanied by professional building inspector. You go into the boiler room, you go up on the roof, you do sample a few units and you walk around the building, and you know you get an idea of what to look for because at the end of the day, we invest in brick and mortar, right? That hard asset, that’s what we invest in. And then that particular building becomes a case study. And for the next two days, we look at that case study from beginning to end, how the market analysis was done and how to assess the risk factors and how to get financing. Like I said, guys, I do know if I said this, but I think that’s before we started recording the podcast. I I’m in a state of bliss at this very moment because my students, the last few hours are sending me emails to thank me about the workshop. How great of a time it was. I got gifts. I’m getting gifts and some expensive gifts too. Sometimes I can’t believe it from my students, and you know, they fill out an evaluation form. And for the third year in a row since I revamped my contact out of 10, my students gave me an average of nine point sixty-four. So I’m very feel very blessed this morning, guys. Really blessed. Yeah, this is the last three years in a row that I’ve been getting this kind of evaluation. So really, really, really happy this morning.
Rob Break [00:55:16] Yeah, very good. That’s nice.
Sandy Mackay [00:55:19] It’s amazing. And I think it’s, you know, a lot of, you know, you spend a lot of time in classrooms and learning, and that’s fantastic. It’s tough to find programs are actually out there in the field looking at real properties and analyzing real deals. That’s what I like about this, that opportunity there. I think it’s great for people that that really actually want to take some action. I think that’s an added benefit that they don’t get a lot of other programs that we. Hear about
Pierre-Paul Turgeon [00:55:43] it. It’s designed for that, to be honest with you. I’m going to be a bit more specific so your folks can if they can go to my website, they can look at that look at video testimonies. I haven’t looked at those. Somebody was recording some video for me yesterday. But if your folks are interested, I in those I’m willing to give them, give them a discount. $250 discount that can go to a breakthrough 2019 Breakthrough 2019 will give you the link, you guys as well. But it’s this is how I do it. Like it’s not coming from somebody flapping his jaws up front on some stage. My workshops always small. But the beauty is I said the same. The identical content is available online. It is the same content, but you cannot replace a live event. We both know that right. You can’t replace a live event. So but what I like to do, and you’ll see if you go to my website, there’s packages where you can get both the online course as well as the online course at a discounted rate and you guys get a discount. So, you know, $200 the discount, $250 discount. But my training or a few thousand dollars, I am being told again this weekend by my students who are sitting in my classroom that I’m not charging enough for what the information and providing them.
Rob Break [00:57:07] I think I told you that when we were on the phone as well, like you did surprisingly well priced.
Pierre-Paul Turgeon [00:57:13] Well, all I’m saying, and this is no marketing ploy, guys. I, you know, I’m still working hard at what I do and my portfolio and all of that, but you take it or leave it. But here’s the thing. Remember what I said earlier, my quote, if you want to fly with the Eagles, you cannot think like a pigeon or another quote that I’ve got here in front of me. Don’t try to chip out on your way up, right? I have spent tens of thousands of dollars on my education, a business coach, and it sounds like you to rob probably use Sandy as well. Tens of thousands of dollars on my education. You’re going to go out and buy a multimillion-dollar building. You can’t spend a couple thousand to three thousand dollars on your education to acquire a multimillion-dollar asset. Very likely. You’re in the wrong place, and to be honest with you. Let me be blunt. I don’t want to hear kickers in my class. There you go. I said it probably not good marketing, but there you go. Done. So if you’re a tire kicker, don’t show up.
Rob Break [00:58:13] Perfect. I mean, you know, it’s probably poor marketing, I would say a lot more like tough love. That’s what it is.
Pierre-Paul Turgeon [00:58:23] I that’s all it is and I’m building an online community. I got so much content once you join me. And the price will go up. I mean, this is not a fricking marketing ploy. I don’t like. I don’t like this. I just not a bad guy. I just, you know, again, maybe I’m too blunt again. But if you want, you want this, I’d love to help you if you don’t. We know we’re friends for that.
Sandy Mackay [00:58:45] But where do we see? Where do you see your business going over the next year?
Pierre-Paul Turgeon [00:58:51] Well, so when I’m out in your neck of the woods, I it’s time for me. So we’re suffering. We’re suffering a little bit in Alberta. Not a little bit. A lot. OK, and I do a hopefully we still have time to talk about that. Don’t we guys? Do we? Oh, we’re out of time because I
Rob Break [00:59:06] do have a time limit. OK, talk as long as you want.
Pierre-Paul Turgeon [00:59:10] OK, but I do want to talk about the oil situation as it’s my civic duty. And I mean this, like you can tell, I speak from the heart. And by the way, I teach from the heart. By the time we finish my, my, my, my workshop just today, they’re my family, they’re my kids, they’re my children, on my online community of multifamily investing. All right. And I mean this. I still in touch with folks that I taught years ago, by the way, especially those who take action because they’re my favorite children. I’m not going to dispute that, right? Because sometimes they run into troubles, or they need advice. But where I see my business, so we have a unique situation, Alberta, where I need, I feel the need to diversify my portfolio. And you guys out east have tremendous opportunities in the Golden Horseshoe. So I’m coming out early before, so I’ve got speaking engagements plus my workshop in Hamilton. But I spend extra days scouting some new markets in Ontario, southern Ontario. So that’s where I see myself looking at opportunities there to purchase to acquire apartment buildings eventually, which makes sense for a guy like myself to get into purely commercial, you know, apartment buildings, five or more units also called commercial residential. Right. Because it is commercial. Why? Because the income approach income capitalization approach is what’s being used to value arrive at a valuation right versus the comparison approach that we use for one-to-four-unit rental properties. So, so commercial, commercial, or retail spaces makes a lot of sense as a graduation, if you will. I wouldn’t dispose of my apartment buildings. No. But in addition to my commercial residential, I would consider commercial with commercial space with triple net lease. Just kind of think because it has its advantages as well. So it’s less especially when the leases of triple net. So that would be a logical sort of continuation for me in the future. That’s where I see my business go.
Rob Break [01:01:09] When you are really quick, when you say triple net, what do you mean?
Pierre-Paul Turgeon [01:01:12] Whereby the tenants pay for most of the expenses? And as the owner of the asset you pay like common expenses like common areas, expenses or roofing and stuff like that, but otherwise they pay their own property taxes and utilities and stuff like that. That’s what a triple net leases.
Rob Break [01:01:32] Gotcha.
Pierre-Paul Turgeon [01:01:33] OK. So it’s very less demanding, but you’ve got to have the right anchor or good tenants like oftentimes, for example, of being the epitome of a good anchor tenant would be somebody like Starbucks, right, that signed a long-term lease and is has the financial means to pay their lease, right? You know what I’m saying? So, and their longer-term lease, so your rental risk is less because you’ve got longer term leases than a one-year leases like our tenants, so they’re usually three to five years can be longer. Depending what you negotiate on specific circumstances or from a risk point of view, it can be less risky if you have good tenants
Rob Break [01:02:10] in order to reach these goals for the next year. What kind of things are motivating you? What kind of things are driving you to get there?
Pierre-Paul Turgeon [01:02:16] It’s always lifestyle like I’m older than you, two gentlemen. As I said, my kid, my youngest is 14. Then I have two young adults, 19 and twenty-one, so they’re starting to be on their own, more and more so sooner or later, my wife and I are going to be on our own. So obviously it’s retirement. But you know, you read my portion of my bio, there’s so much more we could have talked about because I’ve had a crazy, amazing life. I’ve traveled all over the world. I’ve got three degrees. I speak over four languages. Holy crap, life is good. Like again, I’m holding my gratitude rock right now as I say these things, and you know what the best is yet to come. So when the kids are gone, which is fast approaching, I want to continue to travel like I’m. I’m very healthy, like we hike, I practice yoga, I want to continue to travel, and I want to continue to make a difference for my wife and me. The stuff we kind of talk about is kind of going on missions abroad to help developing countries. You know, when you have, you have so much. We have so much liked that gratitude rocked like this morning, I read a few articles and you know what’s going on in Sudan at the National Geographic magazine. Mozambique had this hurricane a few weeks ago where, you know, look at us, look at us, how wealthy and privileged we are. There’s not a single day. I don’t remind myself of that and I start traveling. I was very young, so for me in the future. Wealth is, as I said earlier, it is part of giving back, you know, and also teaching this stuff. Guys, by the way, just to reiterate my mission is to democratize the access to multifamily investing, kind of because I feel it’s been the purview of only a small clique, almost of people there. Few people share that knowledge. I think I’m the only one that shares that openly. So it’s to give back because I have, I’ve had a great life and I continue to have a great life. Not saying I don’t have challenges. That’s not what I’m saying, but it’s all how you frame things. At the end of the day, I’m sitting here, I am looking at the snowy Rockies blue sky sitting at my home. Like I said, I’m going to go pick up my fresh eggs. I feed my chickens with flax seeds, omega three eggs. I have four of them this morning. Life is good. What? I’m more of that and more are giving back because that’s what we’re on Earth for.
Sandy Mackay [01:04:32] There you go. Wonderful. I love it. Hallowell said, for sure, that’s hopefully inspires others and everything to learn more from you and take this little chunk of knowledge and hopefully dove deeper on it and reach out to you. Go to your courses. What kind of people are you looking forward to getting into your courses and how can they get in touch with you to learn more?
Pierre-Paul Turgeon [01:04:53] Well, again, it’s multifamily best in Canada dot com. They can also send me an email at support at Mic or Multifamily Best in Canada. Use the acronym MIC. Yeah, so everything is there, guys. I have a Facebook page as well that they can join, and I barely scratched the surface. So what I’m doing now is I’m also creating an online community right now. If you join my classes. Like I said, the prices will not stay this low, like I’m involved with everybody. Like you heard this by or some. Oftentimes I’m at the investor forum in Toronto as well, less so the last couple of years haven’t been. But, you know, I get around the whole country, but that’s how they can get involved with my teaching, my programs if they’re interested. And again, don’t want Typekit cause you’re going to spend money on your education minute, and I’ll be there for you in many forms. I’ve got a lot of content that have been creating that content to create, like video interviews of lenders, successful students so that you can learn from them as well as me, you know, and how to avoid a lot of mistakes and all that. So lots of stuff, too. I’m super generous because, like I said, I’m grateful for the life I’ve had and I have, so I want to give back wherever however I can. So that’s kind of it. But I so I do want to talk about Alberta the well. Can we do this now?
Sandy Mackay [01:06:15] Sure, for sure.
Pierre-Paul Turgeon [01:06:17] Absolutely. So my education, I learned English at U of T, and this is so I’ve always thought I’d start traveling. I was 14 years old and graduate from high school, went to South America to Brazil, did the Rotary Club, a student exchange program in Brazil. So I learned Portuguese came back, went to CEGEP, went to Europe, learned Italian, came back to Canada, went to U of T learned English, mostly there and stuff. And when I was in east ternary, whether living in Quebec or Ontario, because until you have a lot of memories, some of my best friends to this day, some thirty 40 years later, I still hang out with, I still get together with them. My friends from U of T, I was actually a fraternity boy. I was a decade Delta Kappa Epsilon, downtown Toronto. But when I was out East guys, I was ignorant of something, and that is the importance of the oil and gas industry for Canada. I had no understanding of how much wealth that represents for not just Alberta, for the rest of the country. All right. And I’m I am going to get political on you if you don’t mind. But you know because I feel strong. I love this country. I know this country from the West Coast to Quebec, OK, not so much the Maritimes, but I get around and been to that country and do it on a regular basis, and I speak French and English and, as I said, other languages. I have a deep love for this country, whether my heritage as a French can you from Quebec and Ontario and so on. Now Alberta and I don’t like what I’m seeing. This Prime Minister that we have is the worst prime minister in my lifetime and I’ve always been involved in politics. As I said, I studied political science. I used, you know, oil and gas. You know, how much revenue a day it represents for Canada. For Canada, I don’t mean Alberta between 80 and 100 thousand dollars a day in lost income. That’s hospitals. That’s, you know, bridges. That’s a lot of money. And unfortunately, we’ve been victim of a conspiracy, and this is no joke. I’m not a conspiracy theorist or any kind of like that, but I encourage people to look up. Vivian Krauss that’s spelled Vivian and then Krauss KIRO. Are you see, OK? She sees she, sir, and I can send you links if you want. You guys can do that as well. We can attach that to. But she found out who is funding the demonstrators. Remove all this issue with the Trans Mountain pipelines and all of that and the demonstrators, the demonstrators and all that. She did a research where the money’s coming from. Do you know where the money’s coming from? You guys with no money at all, from the U.S., from the RUTGER through the Tides Foundation, which was funded by the Rockefeller Foundation? Anybody, I’ve read the biography. John D. Rockefeller. All right. He made money with the oil. OK? Why? Because if we don’t have a pipeline, what happens? Guess who we sell our oil to, to the US at a discounted rate down my ass that we are Canadians. We’re too nice a yellow.
Rob Break [01:09:31] Folks, yeah, well,
Pierre-Paul Turgeon [01:09:33] it’s a scandal. It is a scandal, and I didn’t know these things when I lived in, at least in Canada, so I encourage your listeners to educate themselves. And it’s I’m for the environment like I live in the country, I’m surrounded by the environment. I’m in backcountry hiker, a fisherman and all of that. Canada produces, like the oilsands, produces zero-point one five percent of gas emissions. It’s not even one percent, guys, but we’re being manipulated. We need to go and move towards greener, greener technologies and all of that. But we have to do it in a gradual way. The transition way right at this point, you know, we’re not. The problem is China as a polluter, it’s the U.S., it’s some countries in Asia. I’m just encouraging your folks to read about this. This is not just an Alberta crisis, it’s a national crisis and all of us are losing. When I was a Neustadter living in Ontario, Quebec, I had no understanding of that. Now that I live in Alberta. I get it.
Rob Break [01:10:37] So does this, Vivien Krauss, have some kind of like what? What, what should people do? Where should they go? How can they get involved? I think it’s one thing to learn about it, but where can they go to be part of the solution?
Pierre-Paul Turgeon [01:10:51] Well, I’ve never been this involved in politics. Short of running for office, I signed petitions in favor of pipelines and things like that. It’s just at least being educated. But honestly, folks, I just happened to be one of those, I guess political buffs. I follow the politics. I challenge anyone to go back to 2015, when Prime Minister Trudeau said he was going to run what their platform was. You know, the only thing that the Trudeau fully realized in terms of their electoral platform of 2015, you know what it is. Take a wild guess.
Rob Break [01:11:22] You know something to do with Pine Needle? Yeah. Yeah, yeah, yeah.
Pierre-Paul Turgeon [01:11:27] Folks, I challenge anyone. Listen to this podcast to go back to 2015, where they said they would do. It’s the only thing that materialized. Their green plan. You know that until today, starting the lawsuit, the gates, the carbon tax. You know that. And so it’s Saskatchewan, right? So is and so on. The electoral reform was completely ditched the tax reform for small business. Remember this big upheaval about split income and all that. They made some serious amendments. I could go on and on and on.
Rob Break [01:11:55] Yeah, we’re on a different show now, guys.
Pierre-Paul Turgeon [01:11:59] We can call me back. But I follow these things. Guys, this is the worst prime minister and the scandal about sea level. And don’t get me going. I think I’m going to put something in my cappuccino, something stronger. Maybe whiskey is up, but my point is to be just aware. Guys, when I was leaving out you guys, I had no understanding of these things. That’s all I want to say. I just didn’t have the kind of understanding about these issues. Please educate yourself. This country is great, and we had energies that we had a pipeline going through eastern Canada. And all it was, it was an existing pipeline. It could. All we had to do is reverse the flow of oil to go towards you guys. And then we had fracking. Politicians, former mayor of Montreal, say, no, you know where your oil is coming from. You guys from countries like Niger, where they kidnap young women and use them as sex, slave or children, soldiers, and all of that. I could go, guys, this uneducated is just because this is who I am. I love this country. We’re not doing our country any favor. We can do another podcast if you want. But guys, the only reason I want to bring this to your attention is because I feel it’s my civic duty to inform people about these things.
Rob Break [01:13:09] Well, I think that it’s important to and I mean, quite frankly, I know nothing about it, but anyone who’s interested in learning about it. I mean, we’re going to put not only your contact information in the show notes, but we’ll put the other links that you’re going to send us as far as, OK, this stuff goes. So anyone, so anyone and everyone is encouraged to go over there and try to learn about it, maybe we can pull our heads out of the sand collectively and yeah, and maybe do something about this.
Pierre-Paul Turgeon [01:13:37] It’s just guys, it’s, you know, I’m not an angry guy, obviously. I think you get that right, but I just feel I know you’re not aware of that. But because I was an easterner, we don’t get that reality. But now that I’m sitting here and I, I know your reality, GTA, because I go there all the time and I studied there and you know, I live there, and I just feel a civic duty to share that. This is a beautiful country. We’re not doing it, a favor we do need. Don’t get me wrong. I mean, I am the big environmentalist in the sense that we need to move towards greener solutions. But look, I go to Toronto the amount of energy that requires like traffic on the for one on the 400. Come on, you guys, this doesn’t happen like out of thin air. It’s oil and gas. Make no mistake. So and it’s you know, I’ve met the money that goes towards from Alberta to eastern Canada. It’s Quebec and Ontario. It’s big billions of dollars for decades from the oil and gas, so everybody benefits from this. Let’s work together. It’s great to. I’m not running for office, by the way, I have run for office, not that’s my decision, actually. I like my chickens
Rob Break [01:14:39] in my see how the Rockies beautiful
Pierre-Paul Turgeon [01:14:42] city. Rocky story.
Sandy Mackay [01:14:44] Iraqis today know
Rob Break [01:14:45] Parliament Hill for you. New. OK, listen, people, I really do think that you embody the some of what it means to be a real estate investor in Canada. So thank you again for coming on the show and sharing so much with us today. Really appreciate it.
Pierre-Paul Turgeon [01:15:01] You’re welcome, guys. Thank you for having me. You’re a good bunch and I like the vibe you guys have. Like I said your introduction. I didn’t want to let that slip by. I hear you and I like that vibe. I like your vibe of your show, so I know your show now. We’re going to make a point to subscribe to it and listen to it because you’re good people. And I think we’re in sync here. So I appreciate that.
Sandy Mackay [01:15:24] That’s fantastic. Yeah. And then again, just we’re on encourage everyone listening to reach out to Paul and check out some resentful lots to share. And I think everyone can tell the passion and excitement behind his voice here as he does it. So get in touch with them. Learn, grow, take some action.
Rob Break [01:15:41] Sandy, how can people get in touch with you?
Sandy Mackay [01:15:43] None of our two eight nine three eight nine six eight four six or info at the Cambrils Network dot com.
Rob Break [01:15:50] And anyone who’s interested in seeing what I’m up to can just go to Mr. Breakthrough Dossier. All right again, everybody. Thanks for listening. I think we’ve got a ton of info out of this episode and really looking forward to getting this one out there so everyone can hear it. So everyone have a great night. Now.