Table of Contents - Building Multiple Income Streams in Real Estate with Sandy Mackay
Dave Debeau [00:00:08] Well, hey there, everyone, this is David Debeauwith another episode of the Property Profits Real Estate podcast today. It is my pleasure to be chatting with a fellow podcast or a real estate entrepreneur and an entrepreneur. Sandy McKay, all the way from Hamilton, Ontario. How are you doing today, Sandy?
Sandy Mackay [00:00:27] They've been fantastic. Thanks for having me on. I'm looking forward to a great show.
Dave Debeau [00:00:30] Me too. Me too. So if you don't know, Sadie Yet is the co-host of the Break Through our podcast, which you can find a breakthrough r.i podcast, a fantastic podcast. They interview some really, really smart real estate entrepreneurs. And heck, even reinterviewed me a little like yourself.
Sandy Mackay [00:00:50] I was going to say, yeah, I know
Dave Debeau [00:00:52] you might have been scraped the bottom of the barrel there. I'm not sure. But anyhow, it's my pleasure. And that is also an entrepreneur who's got over four million dollars worth of businesses and he's a real estate investor and a realtor as well as a busy guy.
Sandy Mackay [00:01:05] Sandy, busy for sure. You know, it doesn't feel as busy when you have fun, obviously, right, as everyone says. So I think as long as we keep it fun and that some great people around us, it's always fun, makes it makes it great.
Dave Debeau [00:01:18] That's really is kind of the key, isn't it, having those great people around you. So, Sandy, let's back up a few years and let's see how the heck did you get involved in this whole crazy world of real estate investing?
Sandy Mackay [00:01:28] Yeah, well, we started my wife and I have been in this together basically since day one. My wife and I were working together. We met my wife, hired me. She loves that story. I won't tell that one, but she hired me originally. I thought we might do late, you know, so that's it. I was in a different industry and we kind of we both got intrigued by this business. At the same time, I had just read The Rich. That part of kind of changed my mindset and it got me thinking about things differently in life and that, funnily enough, there was a rich that of event coming to our through our city and the Toronto area. And we jumped on that, went to a seminar, said, wow, there's a whole lot of different ways we can get involved in this and started doing some wholesaling. So we started wholesaling real estates and most people in Canada said it really couldn't be done. I know a lot of Americans do it, a lot of that. And it's pretty popular. We're able to scrape together some bills. I started building some lists in the real estate world, so we started building a buyer and mostly an investor list. And so we would market for investors and we'd market for properties that we could find that were distressed. And so we were able to put together some deals through some really grinding hard work, creative strategy, though that really doesn't take much money. So obviously it took a lot of work and through that we built up a bit of a chunk of change that we were then able to put towards our first property. So that would be, what, seven, maybe seven or eight years ago now at this point. And, you know, that funded our first deal. I remember buying it as Oshawa, Ontario, two hundred and sixty seven thousand dollars a duplex. We put five percent down and we add its value through it. And yeah, we started seeing that, you know, a year, year and a half later, we were like, wow, this is like one hundred and twenty grand of equity increase. So we kind of like that. We wanted to do the
Dave Debeau [00:03:17] wholesale grind thing, isn't it?
Sandy Mackay [00:03:19] That looked a little better. Yeah. And you know, around the same time, one of our investors that we did a wholesale deal with came to us. They bought it through us and then flipped it and said we made like one hundred and thirty grand on that. You guys made fifteen or so I think was the fee we had on that. And they said, you know, we would have partnered with you if you just offered us partnership instead of the whole wholesale thing. And I said, well, that would have been a little more money in the pocket, right? So yeah, sure. Yeah. So that kind of got us thinking a little more about our strategy. And we changed that over time and did some, did some flips, did some other things, but then really settled on what are we do a lot of now, which is the buy, renovate, refinance and hold strategy with multifamily properties.
Dave Debeau [00:04:01] You know what? It's interesting how so many of us get started with the the flip's or the creative strategies or the wholesale. I mean, that was what I did way back in the day as well. You know, I found the course on how to get involved in real estate with little or no money. And I said, perfect, because that's what I got. But then hindsight being 20, 20, you look back years ago. Goodness, if I had held on to a few of those properties instead of wholesaling them or assigning them or whatever the hell you did with them, you know, you sure you need a little chunk of change here and there. But if you had held on to them, how much further ahead would you be? So we learn, we learn these things. And you know what? It's all a process as well. So I'm really curious. And I told you we'd probably get off on tangents here. But for people here who are listening to this and they think, OK, well, that's that's actually sounds pretty good. I'm just getting started in real estate investing or they're already up and running in real estate investing, but they want to find their own deals and not necessarily go through a realtor, because I'm I'm pretty sure most of those wholesale deals you found were not through the MLS for not through realtors, because it's hard to make that work.
Sandy Mackay [00:05:07] One of them actually was. But you're right. The rest of them are 95 percent, let's say we're not.
Dave Debeau [00:05:12] Yeah, so you mentioned, you know, you did a lot of grinding, a lot of hard work. What kind of marketing strategies did you use to find those motivated sellers? I'm always curious.
Sandy Mackay [00:05:22] Yeah. So we did a lot of, you know, guerilla marketing kind of grind type work. We would go out on Friday and throw up some signs as we still do the business times these days. Yeah, I got the phone ringing. You know, we put them out on Friday. We'd have to take them down on Sunday because otherwise the city would come and take them. And, you know, various rules in different markets as far as that goes. But that wasn't all that successful. Actually, the most successful one was letters. We would go around and drop letters to homes that we thought were looking a little rundown and we thought there might be something going on there. And they fit a criteria that we knew our investor base was interested in. A lot of our investors wanted while Flip's or they wanted the duplex conversions type project. So we'd find some areas that were that were open to those duplex conversions and we'd look for some rundown properties, drop a letter in the mail, a personal letter. If you look up the yellow letter campaign base, basically a version of that, and we would write those up and send them to the houses that we targeted. And that got more calls than anything actually interesting at the time. We also did we also did a website and actually have nots, probably not out there anymore, but nine one one dotcom, someone could look that up, maybe just so that I haven't even looked at it for a while, to be honest. You know, we got we did two deals from that site at the time, which is basically a really basic lead capture website. And we put up ads on classified websites and drive them to that page targeting distressed homeowners. And we found two pretty good deals actually through that, if I recall. Right. We didn't really go down that path for too much, too long, you know, as of a year or so of that. And that's a couple of those deals ended up being 30 to 40 grand in revenue. So not bad. At the end of the day, this got us in again. Yeah. And so those are the three. But I would say Bateson's were a lot of work, not necessarily the best return and a lot of, you know, a lot of hassle. Some we actually had a lot of sellers calling us. They're already on the MLS. I found through that. So a lot of homeowners that were already listed with the realtor, the letter campaigns and then a little bit the Internet marketing through classified ad sites. That would be our two biggest that worked pretty well and still do today. I think the letters for sure still work. I still get them in my mailbox here from time to time.
Dave Debeau [00:07:33] So when you're when you're doing the yellow letter campaign, you're doing a pretty pretty small, though, right? Because I doubt if you're finding hundreds and hundreds of these kind of distressed looking properties are where you kind of blanketing neighborhoods
Sandy Mackay [00:07:47] with blanketed a few neighborhoods. But we didn't do a really wide scale version of it, like thousands of addresses. We just didn't see the that the return would be that good on that. I think, you know, wholesaling in Canada is a little bit more difficult than I would say it is in the US from most people I talked to. Just a little more suspect, it seems to some of those things. And yeah, yeah, there despite a sense it's kind of get up really quick compared to our American friends in general under
Dave Debeau [00:08:14] suspicious lot, that's for sure.
Sandy Mackay [00:08:15] Yeah.
Dave Debeau [00:08:17] Yeah. Know, I've done all of those as well. One thing that worked really well for me way back in the day was vehicle signage. I did a number of deals from at the beginning driving around in my I buy houses, but the purple minivan,
Sandy Mackay [00:08:33] I've seen those still here. Those are still here. The funniest thing I ever saw from this was in Hamilton when I moved here, which we didn't do this, but I got accused of being the person and it was this big big bird suits. This guy would sit on the corner and dance around in a Big Bird costume and he'd had to we my house, the sign in there every day, every day for four months. I don't know if it works, but it's memorable. That's memorable. I could I still remember I
Dave Debeau [00:09:00] was seriously somebody would take Big Bird as a solution to their problems. Who knows? Sports are awesome. All right. So you transition from that. You got into focusing on the bird method eventually. That's your main bread and butter these days as far as it goes, real estate investing.
Sandy Mackay [00:09:17] It is. And we we as we started working with that, so we find a stressed multifamily properties for the most part. We've done a lot of three and four unit properties. So we've now started getting into some bigger stuff. Eight, ten, twelve, that sort of sized multifamily projects. Yeah. And we found through that to as we've gone through over time, we've we started adding businesses into the mix there. We started adding. So we've got a property management company now because we found, you know, we needed some better help there. And there was an opportunity for us to build another income stream there. Right. And have a little more control over that side of it. Then we did the same with construction business as well. We had someone in our world that was a great partner to help us build that. And we ended up partnering with them. And we have you know, I don't do a lot of active time in that business, but it's another income stream that helps us build that first. Up and have a little more control and just control in that process, we found the contractors were always we had some great ones and then over time they either got really busy, which meant they got either really expensive or they'd spend less time working with us or have less time to spend working with us, even though we were doing at least one a month project of pretty big proportions. So, you know, we started building some things in-house and that led to adding some new business and revenue streams there, which has been pretty cool all the really help that first strategy. Fine it.
Dave Debeau [00:10:39] Well, it makes sense, right? Because you've got now you've got buying old, you've got tenants, you've got numerous stores, is focusing on smaller or started to get towards medium sized multi-family properties. So chances are maybe at the beginning you're trying to outsource some of that property management may or may not have worked that well. So you decided, what the heck, let's take that in-house. And then part of the process was as you're fixing up and rehabbing these properties, you're having challenges keeping good contractors on board. So why not have your own contracting company? And then when you're a little bit slow with that, with your own deals, they can go do somebody else's.
Sandy Mackay [00:11:19] Yeah, we have. We have we I know we have the real estate team, too. So I like I'm a realtor and we have a real estate, a team of realtors to that that does two things at another income stream for us. It helps find a lot of properties, too, because we do a lot of outbound lead generation type of activities. And through that we are able to help service those clients better as well. Having the construction, the property management team really helps us kind of get our database controlled and keeping in touch with these people, you know, ongoing, which a lot of our clients in the real estate team side of things are investors. So we want to help them and give them more, you know, solid companies to work with. And so, you know, all around, it's been really good for us when when I think for us and our clients.
Dave Debeau [00:12:02] Yeah, well, this is a very, very entrepreneurial and you've been working with your wife in and these businesses from day one. Is that correct or is she more focused on one particular side of things?
Sandy Mackay [00:12:12] She ends up now she runs our property management team. So she is she runs that business full time, at least for now. I don't know how she likes that, but she does. It's a tough business. That's a really tough one. A lot of complaints coming from both sides. Right. You get the tenants obviously complaining. Why are you trying to you can only do so much because ultimately you're just the middleman between the landlord and the tenants. Right. But but it's been good. She enjoys it. She's built a great team there. And that's really what it comes out to, having great people around you. You can really make any business pretty fun. I think as long as there's great people and and you're doing something you believe in.
Dave Debeau [00:12:44] It's interesting. I was just interviewing another gentleman a month or six weeks ago, property management. Again, same kind of idea, the idea of adding ancillary businesses to that base business. So you've kind of done it differently. You start out with the the strategy, buying and renovating the houses, then added on stuff. He started with the property management company and then added some interesting one that he said has worked really, really well for him, is adding on a landscaping business. And that one actually surpassed his property management company revenues pretty quickly. So that became its own thing. So but he started off with a a set group of clients, a captive group, as it were, because he already had all these properties managed. So why not take care of the landscaping, the submersible, all that kind of stuff?
Sandy Mackay [00:13:33] So so that's interesting because we actually just launched that recently, but I didn't mention it. But if it outpaces the project management company, that's amazing. And hopefully ours does the same. We had a yeah with a person and this is kind of how I like to do it. I don't like to be actively involved in all these businesses to have enough time. Yeah. So we if we have a person in our world that's eager and comes to us and wants to lead it, then we'll use our our business sense to help guide him or her. And also, you know, to use our base of business is going to have to help be the lead generation tool for the company. Right. So that's where we're pretty much new with that. We are doing the snow removal this winter, which is really crazy expensive insurance. I couldn't believe it. So it's been a little bit of pain setting it up, but I think that'll be another value added for our people there. So that's something we're working on.
Dave Debeau [00:14:21] Now, you're also tell me how the whole podcast thing fits into things for you and how long you've been doing that and how that's benefited you as well.
Sandy Mackay [00:14:29] Yeah. So my our podcast, I have a partner with our co-host, Rob Break, and we we started that show, believe it or not, like almost coming up on six years. And so we've been doing it a long time. We kind of benefited from being I think, first in on that that's based at least in Canada. And we had been having these conversations with people, other investors, just Rob and I ourselves, because we were just kind of early on in the investment world, we were just kind of getting to know everything and going to all these great meet up clubs and learning and talking afterwards about what's what we're doing and what others are doing. And we just said, why don't we make this a show? We're having these conversations. We just talked for half an hour. Why don't we record some of this? And so we started doing that and we started bringing on some experts and giving them a platform to share their story and their services and then, you know, over time, that's that's really actually what got us really heavily involved in this business, was that because we started you know, I got into the real world and all of a sudden that podcast is a great source for finding investors to work with us. Same with all these businesses I'm talking about now. So it's been a great lead generation tool. It's been a great platform to help others give value and help them succeed. And obviously, by helping others get what they want, you're going to help what you get. You're going to get what you want eventually. So I think that's been our outlook from day one, and that is just just provide value for the investor world. And we've been excited to be part of that for six years now.
Dave Debeau [00:15:51] Yeah, that's that is amazing. I can't remember where I read it, but I think, you know, there's so many podcasts now. I think the average podcasts only lasts about seven or eight episodes and then fizzles out. So you guys can go in for six or seven years. Keep on. That's absolutely phenomenal.
Sandy Mackay [00:16:09] We looked at that. We looked at the beginning and said, well, there was a couple of people that had started shows and really fizzled out fast. And we said, look, if we're going to have a two year outlook on this, if it's doing anything in two years, we'll keep going. But we're going to at least give it two years. Like we're not going to just give up after a couple of weeks because that's and any business, basically. And if you don't give it at least a year or two years, there's probably not going to see you're not going to see much return anyways. And that's sort of a time unless you really get lucky. So that's kind of how we've always looked at things with these other businesses as well as have that longer term outlook. And eventually, if you keep going things, you'll hit that breaking point where you start to succeed with it. So, yeah, that's been our
Dave Debeau [00:16:48] consistent persistence pays, right? That's like the old saying goes. So Sandy, in addition to all the hats that you're wearing, are you coaching people about real estate investing? Are you mentoring people or you're offering training or anything like that? Or or is it primarily through the podcast? What are you guys
Sandy Mackay [00:17:03] what you guys you know, we don't offer formal training right now. We do. I mean, I guess we're always coaching and training our people. We do we do bring on partnerships. And I guess that's a form of training in some form. Sometimes we don't do any formalized training. We have been thinking about that for a while. I have someone in our team right now who I know is really think about it and we might end up launching something in the next little bit, but we don't offer anything formal yet. So that's something to look out for in the future. Maybe right now we do a lot of the podcast training for sure, the podcast recordings and all that is one stream of value that we add to that. But it's it's all free. So I guess you do do a lot of training and stuff. It's all free, so.
Dave Debeau [00:17:39] Right, exactly. And each time flies when we're having fun and people want to find out more about sending the case, what you're up to, what you're doing or getting a hold of you, what should they do
Sandy Mackay [00:17:49] so they can find me online? I'm on most sites, but if you really want to get some value out of it, quickly, go to Emran wealth dotcom or a free investors report up there that we're actually putting out a free quarterly investor's report there, but our region here. So that's kind of interesting for people. And to find out more about me specifically, obviously the podcast break through our podcast Outstay. Or you could find me by looking me up on LinkedIn, Facebook, Instagram, Twitter. We're on the same place.
Dave Debeau [00:18:14] We'll have the links in the show notes. Click on those and connect with Sandy. That sounds good. What does MRN stand for?
Sandy Mackay [00:18:21] Yeah, McCay Realty Network. That's our realtor team. That's what a lot of a lot of our people end up coming to us through is that we do do a lot of events around the Hamiltons and surrounding area. So if you go on there, you'll probably find a bunch of stuff on our events that are upcoming and free trainings, that sort of thing.
Dave Debeau [00:18:36] Awesome. So you got kind of like a real estate club type thing is what you're.
Sandy Mackay [00:18:40] Yeah, yeah. We do a club. We have a few different variations of the type of nights that we do, but we do at least once a month. That's bring up some speakers and things like that and very low cost, sometimes free. We do some street tours, a bunch of stuff that they could find on that website. I'm well, Starcom awesome.
Dave Debeau [00:18:57] And he's been a real pleasure. Thank you very much for sharing some time and some really good tips and ideas about finding those motivated sellers. I really appreciate that.
Sandy Mackay [00:19:05] Thanks so much. Appreciate it. Thanks for having me on. It's been a blast.
Dave Debeau [00:19:08] My pleasure. All right, everybody, take care and we'll see you on the next episode. Bye bye. Thanks very much for checking out the Property Profits podcast. We like what we're doing here. Please head on over to iTunes, subscribe read us and leave us to review. Very, very much appreciated. If you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom Ticker.