Building Systems for Your Real Estate Business with Brady McDonald

Building Systems for Your Real Estate Business with Brady McDonald
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Table of Contents - Building Systems for Your Real Estate Business with Brady McDonald

Podcast Transcription

George El-Masri [00:00:00] Thanks for joining us today. I got to interview Brady McDonald from B.K. Real Estate and we had a really good conversation. So Brady went from working with Hijrah one as an arborist or as a I guess he trained people to climb trees and do all sorts of stuff for Hydro One to becoming a full time real estate investor. And they're now at ninety six properties as of the date of recording him and his wife, Christy. So they're they're a good team. One of the really cool things about Brady and Christy is all the systems they've developed to allow them to scale to that size. So if you're at 10 properties or five properties or twenty five properties, wherever you're at, you can learn from their systems to be able to scale to a larger portfolio, basically. So there's a lot of good stuff in here. I hope you'll enjoy the show. And as always, if you know anyone looking to invest in real estate, Hamilton St. Catherine's. Well, and I'm always happy to to work with the people, you know, I'll ask you to do is reach out to me. George Atwal off dossier, connect me send send me an email with their information and I'll be happy to follow up. And like I said, I hope you'll enjoy the show. Welcome to the War podcast, where the goal is to motivate, inspire and share success principles. I'm here today with Brady McDonald, who is one half of the Christy and Brady McDonald team. They started B.K. real estate investing in 2014 when they realized that wealth and freedom or sorry, when they realized the wealth and freedom that real estate investing can bring. And by mid twenty eighteen they had purchased and renovated over seventy five properties. And they pride themselves on creating systems for renovations called venture partnerships, property management and several other things. Brady began as a utility arborist instructor for Hijrah one, and he's retired from that since then. And then Christy began and remains as an accredited real estate appraiser. Today, she owns her own firm. So, Brady, welcome to the show. Thank you very much, George. Thanks for making the thank you for making the journey down from.

Brady McDonald [00:02:03] There was an easy drive today.

George El-Masri [00:02:06] Yeah, very good. So glad to have you here. I usually start off by asking you about your childhood. So if you want to just kind of tell me where you grew up and what you remember from from your childhood.

Brady McDonald [00:02:15] Good. Yeah, I don't think I've actually ever been been down that road with anybody on the podcast or actually anybody in the real estate world. So that's a good question. Oh yeah. I grew up in one sound family. I had three kids or three three of us kids, and I have a younger brother and an older sister actually, that both work for us now at our investing company. Yes, I grew up their childhood, you know, and my memories is like, I don't know, just it was a bit of a struggle. Parents, parents divorced when we were kids like eleven. And after that, it was a bit of a bit of a shamble for for a while. But, you know, growing in small, small town stuff, you know, there's not a ton of things to do. But I remember my first job was I believe I was 13, 12, 13 years old. I'd wake up at five o'clock in the morning and my mom worked at a dental clinic around the corner from our house. I'd be up at five o'clock and I'd shovel shovel three corners, three blocks of of sidewalk and and sidewalks going into there to the dental clinic. And I do that every morning at five o'clock and then and I called it Brady's Lawn and Snow Service. So I'd be writing invoices out. Right. And they would you know, I think the minimum wage back then was like maybe six, ten or, you know, somewhere right around six bucks an hour. They pay me minimum wage. And, you know, and that was kind of from that point on, I really honestly had the entrepreneurial bug. I got a job across the street where I'd fell apart machines and kind of went. I did that probably for a few years until I think it was 14. I got my first job at Taco Bell.

George El-Masri [00:03:48] Oh, big. Wasn't it better for you to shovel snow on care other than Taco Bell?

Brady McDonald [00:03:55] I said I'm sure it was. But you know what? Those lessons early, you know, like because of the divorce and the just the way the things were, like money was tight. And I remember, you know, playing hockey and lacrosse, there was times where there wasn't money. So I literally paid for all my hockey gear and I was only at certain times. Right. But anyway, it made, you know, gave us some give me some life lessons and some entrepreneurial lessons.

George El-Masri [00:04:20] Really very cool. So where does that come from? Because there been a few people that I've interviewed that are very successful today that told me when they were young they either would mow lawns or they would shovel snow as 12 year olds just like yourself. Where did that come from? Why did you do that when you were young?

Brady McDonald [00:04:38] I think it's maybe like an internal fear of, you know, of not being able to do what you want or not being able to play that hockey. So it's like you do whatever you need to do to get what you want. My dad was an entrepreneur himself. He had a painting business, so I saw that aspect of it. But I honestly think like having that little bit of fear of not knowing, you know. How you're going to get to where you want to go really pushes you to do what you want to do, do what you need to do to get where you want to go.

George El-Masri [00:05:06] Right. OK, so you were doing so. Do you remember approximately how much you were making as a kid, doing the shoveling, shoveling snow and the lawn care or whatever else you were doing?

Brady McDonald [00:05:15] Yeah, well, I don't remember the amount of money, but I remember like I broke it down to the quarter hour so you could only imagine if I went out and it took me an hour and 15 minutes or an hour and a half in the morning because maybe it's, you know, snowed six inches or maybe it's not a foot. We get a lot of snow up there. So it maybe be two and a half hours. So two and a half times six bucks. Right.

George El-Masri [00:05:33] It's like to,

Brady McDonald [00:05:34] what, 22 bucks? So it would be like twenty to like seventy five. Right. And I would like so I record that for two weeks. Submit me invoice might be one hundred and ten bucks or something like that for a two week period.

George El-Masri [00:05:45] Not bad for a 12 year old.

Brady McDonald [00:05:47] Yeah, absolutely. OK.

George El-Masri [00:05:49] Cool. OK, so you were you worked at Taco Bell then after that what did you do after Taco Bell.

Brady McDonald [00:05:55] Taco Bell. They opened up a Montanas in Berry in one sound. Sorry. So I started there and then I was playing to playing the cross a fair bit. So at this point I was probably like 17, 16 years old. You know, it must be early. Not that 15. Yeah. And then so I finished high school and actually lost my license for probably the first time I've ever told anyone. You screw up when you're young, right? So, yeah, all those people have you screwed up. It's OK. You can still, you know, do good things. Yeah. So at that point I'm like finishing high school and that happened. So, you know, at least it happened at the right time. I had lots of life to fix this problem that I've created. And my parents are like, hey, you're going to school. You know, you got to, you know, get out in the real world. So I was 17. I went to college and I didn't know what I wanted to do. But they said, you know what, your uncles have done well in forestry. Go to school for forestry. OK, here we go. So I'm off to school for forestry. So I went to Flemyng College and I was yeah, I was 17 when I did that. So I was living at the at the residency there. And, you know, I got great grades. I didn't have to go a whole lot. This is first year and I always had this. Well, I had one of my buddies, my best friend's brother, his buddy worked for Hijrah one and it was, you know, drives Pretty Trache, you know, always has a colorful beer,

George El-Masri [00:07:23] the things that you care about when you're 70.

Brady McDonald [00:07:25] And I'm like, all I got to, you know, I want to get on dihydrogen. Right. So anyway, that was kind of like a long term goal. And in the in the meantime, we're first year school. I was looking to get a job in between first and second year PCL Pest Control, the orchid man they actually gave you. Could they put you through a course of pesticide license course and give you a license at the end of it and they would give you a job. So I went through that process. So in between first year, second year, I actually worked in between sarteano and sound spraying colleges for spiders. In the meantime, I met a guy who had a Cuban and I'm like, hey, you got to keep being what do you do? You must have work for yourself. He's like, Actually, I work for Blue Water Power. And I'm like, Oh, I want to try to get on to one. He's like, oh, well, you know, you know where you stay. And I said, Oh, I'm staying at the dormancy at the college in Sarnia. And he's like, well, why don't you join me and my family and have dinner with us tonight. Fantastic. So I had dinner with this guy and it was amazing, right? Him his family just met me. I was spraying his house for spiders, a rental property, actually. And so he's like, you know, I told him my goals and what I wanted to do. He's like, well, bring me your resume and I'll see what I can do. So anyway, probably a week and a half later, I got a phone call. I got a job. Oh, cool. Yeah. So, yeah. So I, you know, it was just me, that right guy, you know, whatever. He took a liking to me know at this point I was eighteen, maybe eighteen years old. But you know, I'm working, I've been away from home basically since. Yeah. Since I left high school so. Yeah. So I got a job with hydrogen's started two weeks later. The pizza guy was awesome like my boss. He just yeah. He's like I said to start that it was like a Thursday had to start Monday. So like yep. Take the truck, just bring it back to us, you know, the following Saturday, Friday and yeah in a way we went so I started as a laborer there and then got an apprenticeship utility, arborists apprenticeship. I did that for four years and then immediately after the apprenticeship I was a became an instructor.

George El-Masri [00:09:19] OK, yeah. So what does that mean. What does an instructor do.

Brady McDonald [00:09:22] So they teach the young guys or the apprentices how to climb rope. You know, they basically the instructor teaches the four year apprenticeship to become a certified utility arborist. So it's it's an apprenticeship governed by the media or the Ministry of Colleges and Universities, I think. And yeah. So there's a curriculum, right. For years, lots of testing, lots of content creation. So we you know, a lot of the stuff that a lot of schools actually that have crossed over have come from my career at Hydro One. So I ended up working on it, working in a train. We started a training center Embury we. This is where he lived a lot of my career was over in Smith Falls near Ottawa and throughout Ontario with Hydro. But for the last probably 10 years, nine years we're in Barry or the training center there. So we had all the premises come in and out. But yeah, I gained a lot of skills. So the systems and the processes and the like, all the, you know, the boring stuff that happens behind the scenes and in real life while you're trying to grow your real estate portfolio, those skills and those ideas of processes and systems and be more system dependent on people dependent are because of my career. They're at Hydro One.

George El-Masri [00:10:32] So that's something that you're really big on. You guys always you and Krista always talk about systems and you take pride in that. And it's interesting that it came from Hydro One, but it makes sense. Yeah. So how did you meet Kristy, by the way?

Brady McDonald [00:10:46] Yeah. So Krista. So she'll eventually hear this, but I don't know which version. My version of hers. Oh yeah. Yeah. No, I actually saw I met Kristy, we, we had mutual friends and she was at the time working for the bank and so we had mutual friends, met at a party, became friends and then her parents were in a boating. OK, so they had a big boat. It was like a thirty two foot boat. And I've never seen this in my life. I'm like, oh my God, these people are millionaires. This is insane, right? This next level of wealth like. Anyway, so long story short, it was probably we we became really close friends. I bought a big boat like I realized holy. I didn't realize boating was a thing. And then probably six months later I bought a twenty nine foot boat. Cool. Right again, you set your goal, just get your bead on it and get it done. Know. And then then I bought it with her and her family for probably three years or something like that. And then eventually the opportunity brought us together.

George El-Masri [00:11:43] So your interest for boating is what brought you to to your wife?

Brady McDonald [00:11:47] Yes. Yeah, yeah, yeah.

George El-Masri [00:11:49] Very cool. OK, so let's talk about real estate now. You were you were with Hydro One. Why not? How did that transition to becoming a real estate investor happened?

Brady McDonald [00:11:59] Yeah, so it happened so initially. So while I worked for Hydro One, I also had a side hustle. So I had a ton of country services, what I called it, but every every day after work. So from five o'clock at night till dark, I would, you know, in Barre, in college country, north of area, I'd go up, I'd have signs all over the trees that I'd be flying and get these jobs where there was maybe trees overhanging cottages, limbs, overhang cottages, dead trees that need to be cutting down. So I'd climb up there, cut them down, clean them up, take them away. So that was that was my tree service. So that, again, kind of kept on. It was that was kind of the, you know, the boat money, the extra, you know, forty, fifty grand a year income that again, it was something different from hydro where, you know, I put this effort in. I get paid this amount of money or I get, you know, you know, you get reciprocal. Yeah. Value back. So anyway, so I always had that tree service for for the longest time, but then I had we're getting I think we were looking at kids and stuff and I'm like, OK, we need to if I need to find something more. I was about year twelve, my career at Hydro and I was like we were looking for something more. We were looking to, you know, get out of the corporate world, work for ourselves. We looked at buying land, developing it into storage units. We looked at buying franchises. We're looking at all different types of options because I want I wanted to treat service, but also want to quit my job eventually. Right. And create that freedom, that time freedom that real estate investing allows for us. So ultimately, it was, you know, we're going to work into this journey and talking in over probably a year and a half, Christine. And it was a one Friday I picked her up where she was a real estate appraiser. So she was doing an inspection at the property. And so she recognized the guy that owns the property and she said, hey, what's what's what I recognize. He's like, this is my full time job and full time real estate investor. She's like, oh, how many properties you have in that time? He had forty four properties and and she's like holy man. Like he's like yeah but he's like, he's like I bought eight of those so six units that year and it was only June and my wife's he's like oh my gosh. Like my husband would love to talk to you. So anyway, so she finishes her inspection, she comes out, she tells me this. I'm like, are you kidding me? Like, this is the thing. How do you do that? I wrote down forty four times. The average at that point was at that time was three hundred thousand dollars was the value of say a duplex. So forty four times three hundred is X amount of portfolio. You know, if each, if the the mortgage paid down on each of those is six thousand dollars more than that. Right. And then your cash flow and your, and your appreciation. I'm like this guy's making a million bucks a year like in wealth. And that was when the light went off. So we ended up meeting up with that fella. He took us out for lunch or maybe we took him. But and he was asking those questions like what? What are your goals? I'm like, buy one property. He's like, well, how are you gonna get your financing? I'm like the bank. I know we knew nothing about anything, right? Yeah. We did at that point have two income properties. One was my primary residence before I met Kristy and then one, she had an income property before we got together. So we had two properties. But they were kind of like, we're just going to accidental landlords, we didn't run it like a business at all. It was just they had them. They kind of worked. And anyway, so that meeting really opened up our eyes that we know nothing about this. We need to educate ourselves about this. So no one thing. So we started reading all the books, reading it, listening to these types of podcasts. So, you know, all the Don Campbell books in Zabol for renovations was great when rags to riches listen to all the podcast started going to meet ups. So there's a great meet up down in Newmarket. We went to that every every month and etc.. So we are education phase was about a year and in that year we are also trying to figure out our strategy. So we're OK. So we bought a house actually with Christie's brother and we renovated it. I renovated. So I kind of transitioned from the tree service with my extra time into renovations. So at that point, we renovated it into a into a duplex refinance that we refinanced it. We got all of our renovation money back and we got a portion of our down payment perfect like strategy kind of picked. And actually, we you know, it went fairly successful. So that was kind of the end of that was us like, okay, now we got a strategy, we got the education. How do we scale this? So we refinanced two of our primary, our primary residence and one of those income properties and that came up with one hundred fifty thousand. And we converted we turned that into four properties in 15 and before. So those were all those are all primarily. But yeah, buy them, convert them to duplex or second suites. It was right when seven suites came out and then refinanced them, you know, and carry on. So we did that four times successfully with our own money. And we're like, okay, we've got enough money for two more. Right. But before we do that, we should start offering our services to joint venture partners. How do you do that? No idea. Read the books. It's like starting this anytime you do something new. It's scary, right? But education is a big way to remove that fear and remove a lot of the risk. So we read the books. I had a mentor, Susan. She's from Barre, so she was great during this phase where OK, I understand it. But there's these are the things that I'm unclear about. So I just I took her out for coffee or lunch. I can't remember, but and I just gave her a list of five questions and she's just like, just answer them, answer them, answer them. And it was just like clarity. Let's go. Right. It was just you need somebody like that to just be able to bounce those few questions off just to make sure that you're on the right page and that you're not missing something. In a way, we went so. Yeah. So then it's just, you know, but 80 percent of the deals that we do are with joint venture partners, you know, very typical 50 50 JV. They do provide their basically the money partner for lack of better terms than we do all the work. Yeah. And some fifteen we did I think seven eighty sort of sorry. Fifteen. Sixteen. I think we did twelve. Twenty, sixteen, twenty two, sorry, I think we did 20 in total in so 15, 16, we did 20 and 17 in the peak of the market we did thirty two and then and I think we did twenty five in eighteen we had a recount and then this year I'm not sure where we are but we are approaching. We got four more to 100. Yeah.

George El-Masri [00:18:28] So when you're saying you did twelve, twenty, thirty two you're talking about, are you talking about conversions or are you talking about doors that you acquired. Properties that you acquired. Yeah.

Brady McDonald [00:18:36] Purchases. Yeah. So some of those like depending on the year, some of those we sold. But again most of those were ninety five percent of those are secondary conversions. So depending on our cash flow, depending on the market and depending on the consumer confidence of the investor basically would kind of determine whether we kept them or not. Right. Right. There was times during the last four years where investors were like, I don't know if I want to hold, because they're kind of there's a bit of fear there. Right. So they were like, okay, let's just get in and get out. Yeah. So but yeah, we probably sold well. We currently hold probably about 65 to 70 properties.

George El-Masri [00:19:14] You're holding sixty five to seventy at this time. Yeah. OK, and you were kind of touching on getting rid of some of the properties that you had. Sometimes it was because part you, the partner didn't want it. Were there other reasons that you would get rid of certain properties?

Brady McDonald [00:19:28] So we'd always go into the joint venture knowing what the intent was. Right. So it wasn't like an accident. It wasn't, oh, I want to sell now. It was always, OK, hey, we're going to buy this or joint venture A came to us and said, hey, I'm well, you know, we'd love to partner with you guys, but we want to flip. And there'd be other investors that wanted to hold. Right. So depending on what they wanted to do was what we would help determine what we wanted to do, but also, you know, crystalize, you know, eventually our capital went down. So we're like, hey, we're flipping everything, you know, like twenty, fifteen or sixteen. We sold twelve out of the twenty. Right. Because because we spend all of our money on the year prior. And then then we made a bunch of money. 2072 we kept them. All right. So it was more of a just a cash flow discussion than it was. We flipped a bunch then too. But that was because the investors confidence in and what was going on in the market was was wavering. Right. So that was ultimately what changed people's minds.

George El-Masri [00:20:26] That's OK. And were you also flipping so duplex and then flip, then selling. Yeah, it was mostly duplex. The strategy. Yeah, yeah, yeah.

Brady McDonald [00:20:34] Everything was sweet. And the reason why because you know, in my opinion, people buy those unemotionally, they buy them based on the numbers. Right. And you can really predict the sale value where. Personally, I can't predict the sale value of a single family home because that person has to love it, right. And then it depends on who's buying what time. So that's why we've always stuck to that. So where are the results were always predictable. OK.

George El-Masri [00:20:59] All right. Very cool. So you're getting into this. You buy a bunch of properties, you scale up, you go from 12 to 20 to 30 to twenty five. How are you able to do that in such a quick in such a short period of time?

Brady McDonald [00:21:14] Yeah, so good question. And so a lot of the get the scalability, especially with us, has been to a few factors. One is hiring people. Obviously we can't do that alone. So we do have a large team and we started building our team from property. No, basically property. No. One in twenty fifteen. I hired a contractor and my rules was that was that whoever works for us is working for us 40, 40 hours a week minimum. I don't want to play the like. He's not, he's juggling too many job sites and then the project goes from three months to six months while in my mind that's six. But that extra three months is six to eight grand and carrying costs. Right. We don't have that in the budget. So set the precedence early property number to my brother came on board. So he's a project manager. And then basically we just kept on hiring staff along the way. So it was probably about Property seven where we hired somebody in house in the back office. And again, we we kind of test test it before we hire somebody full time to make sure it's sustainable. And what we would do was at that point, we were hiring summer student and so we know she's in university. We got four months. How much work do we have? You know, is this sustainable so that we tested it out? And then when she went back to school, we hired again full time. Yeah. So we hired along the way, you know, we've been up to about the same staff we have right now. We have fifteen staff and that year thirty two we might have been sixteen, seventeen with contractors, some subcontractors that would work exclusively for us, you know, not bouncing around projects. Yeah, so people are is a big thing, right? The other thing is making sure that our strategy was recycling capital, right. So when we buy, say, a single family home for let's just use round numbers, like for 80 grand for down payments and it costs seventy thousand dollars for renovations. So it's one hundred fifty thousand to buy it and renovate it. When we refinance that we get all of our money back except for maybe 20 or 30 grand. Right. So when you find an investor that has one hundred fifty thousand and maybe a line of credit for short term rentals, you can turn that one hundred fifty thousand into five properties. So that is that makes it a lot easier when you don't have to spend all your time talking to new investors, explaining your process, new investors doing a show like. Right. So you're able to scale your obviously the number of properties your investors can get, which they obviously love, and your own personal cash flow as well as the same thing. Right. If you have two hundred grand in that with that type of recycling of capital, you can you can buy quite a number of properties.

George El-Masri [00:23:46] Right. Over what period of time typically would you say like to turn one hundred and fifty thousand to five properties. How long would that usually take.

Brady McDonald [00:23:53] Yeah. So if you, if they only can do one property at a time, let's say they only have maybe they have 150000 and they got an extra 50 for a line of credit or 100 for line credit, you're only going to be doing one property at a time. Yeah, right. But if you had access to five hundred thousand and you could do three at a time, well then you could do probably six properties in one year. Right. Right. So we're we're we're we're getting we're buying, renovating and refunding and refinance with about six months.

George El-Masri [00:24:15] OK, cool. You kind of touched on how you ran short of capital at one point because you had invested so much into your your business. Is that something so you flipped to generate some income. Is that something you're still doing today or are you doing something differently to generate now income?

Brady McDonald [00:24:33] Yeah. So because the business is so active, it's hard to see, you know, where your actual cash flow is. I mean, because if we get extra cash flow and all of a sudden, let's say 60 grand in the bank, I'm going to do something with it. So you obviously need to live. And so up until now, we've always flipped a couple of houses regardless of year for personal reasons, for personal cash flow. But that is changing. So we've we've launched a property management company live with B.K. Property Management. So we're doing that. We're servicing landlords and investors all across the Simcoe County. And and so we did that for a couple of reasons. One, obviously, cashflow, you know, it's another stream of income, which is nice. So you're not completely reliant on the market. Persay, you're still in the real estate industry, but not reliant as much on the market. So we did it for personal cash flow reasons, but we also did it out of just the pure need for a good property management company in our area. We actually so Christiani in twenty eighteen. We cruised the Bahamas in Florida for about six months over the the year, you know, still we bought 20 some odd properties, you know, because of the systems, the processes that we have in place that just kind of does that for you. But so at that point we actually moved our I think there's 12 or 14 properties with the property management company in Berri. And we thought, OK, that would one help lighten the workload on our staff, lighten the workload on Kristi. You know, she does a lot of the back office stuff, deals with it all. She deals with it all. So it's lighten the workload. And so within six months, we had two evictions and the guys our guys went to do maintenance at two other units the same week. And there was no tenants there. But like there's got there, just like there's like there's no tenants like like they call like, is there a vacant unit? Is this supposed to be vacant? Is like, no. Yeah. So it was a really quick call, like, so

George El-Masri [00:26:32] what do you do in that situation? If the person just leaves, you don't have like 9/11, you don't have anything signed. Yeah.

Brady McDonald [00:26:38] What happens? You're kind of you're kind of done. I guess you could probably. Yeah. You know, what we did is just you split your losses and get it filled as soon as possible. So, you know that that old saying you hire slow and fire fast. So obviously, if I had the property manager really quickly and took back control and took and got just felt that it felt it.

George El-Masri [00:26:56] Did you take any measures? Did you like document everything, take pictures and say, hey, we tried contacting the tenants, this is not going to get a hold of them.

Brady McDonald [00:27:04] Yeah. Like it was so so at the time we actually said we had to kind of. And that's the thing. Yeah. So if let's say technically they moved out but they kept paying rent, it was a bit of like a three or four week period where we had to kind of be cautious as to how we were going to advertise. It's like, well, what happens if they just moved out because there was some junk there and some random stuff? Right. So, you know, so then when we went back the following week and it was actually in the winter, so you could see nobody shoveling the walkways, the mail hasn't been picked up and probably three weeks. So at that point, we just made the decision, OK, they're gone. They're going to come back. Let's get the get. You know, if we had to go in there, we cleaned it all their garbage and got to rented it.

George El-Masri [00:27:43] And that's where B.K. property management came from.

Brady McDonald [00:27:45] Yeah, I live with B.K. property management. That's honestly just we didn't we didn't open it. Up immediately, we didn't start immediately. Another friend said, oh, why don't you do this? You know what? I just eventually trickled into my brain like, you know what? I think we should do that. So it took you know, it took a fair bit of work to create the systems and the marketing and figure out, OK, what are what do we believe in? What is there? You know, why would people, you know, bring their portfolio to us to determine your values, all these things it takes to define that stuff? So it took us probably a month and a half and then we launched probably three or four months ago. Yeah. So that's another source. That's one of our other sources of income. Cool. Yeah.

George El-Masri [00:28:24] Yeah. OK, so you touched on the systems. We talked about it quite a bit. Can you kind of walk us through certain systems or maybe certain things you can share about your systems?

Brady McDonald [00:28:32] Yeah, sure. So so again, the systems and the processes that we've created have kind of just come out of pure need, but also came out of more of a way to solve problems. So, you know, as you're going through as we're going through this transition from, you know, just being a small time landlord to creating a business, I knew. And then also like let's just for an example, I didn't you know, you start looking at a bunch of properties because that's your goal and you don't know the rules about you don't know all the rules in the back of your head about, you know, ceiling heights and room sizes for second suites and, you know, egress windows and like, there's a lot of different rules just associated to creating a suite. So I would just create a form. So I created the form, OK, the things I need to look at when I'm looking when I'm going through a property to potentially purchase it like a checklist is a checklist. Yeah. It's like, you know, room sizes, you know, egress windows. Do I have ceiling height in the basement, do I have ceiling. The staircase like these are all issues that can be resolved, but it's going to cost money. Yeah, right. So it helped me help determine just help me make sure that I wasn't missing something in the purchase space. So that's that's a one example of how this has all come. It's like real life systems that I use personally or our company used to solve problems. And so then when we started hiring staff and there would be like something missed. OK, well, if something got mess, there's a reason. And how do we prevent that from happening again? So we create a process or checklist to prevent that from happening again. Right. So we have systems in place from everything from, you know, not necessarily that I would use them for, say, looking at a property, but somebody else could easily implement them. Right. And whether they use that list or can manipulate it into somebody else that works for their strategy is kind of which is the important part. So, yeah. So systems of purchasing systems for joint ventures, making and collecting documents from the joint venture partner, making sure that you have both your JV agreement, your signed agreement signed like there's a checklist, make sure it's nice if it's not

George El-Masri [00:30:38] signed or you said JV agreement.

Brady McDonald [00:30:40] And like a site agreement, we do signed agreements that I'll just leave that alone. But it's just a side agreement. Basically, it goes along with the joint venture agreement, OK, you know, make sure that the site, if they're not signed and something happens, well, then the agreement is as good as the piece paper. It's written on, you know, a list of making sure that the that the utilities and everything, that we have all the account information. So if, you know, if there's a water tank issue that we actually have access to solve that problem versus a joint venture partner. So then you go into renovation's system on ordering renovation material. Right. So we have we have a one order sheet. All of our materials come from a supplier and we have SKU numbers. Right. So, again, it's quick, it's easy, it's fast. The materials that are consistent, the costs are consistent, etc. And then it's going into ongoing reporting and how to calculate all your materials and your list and your expenses while you're doing renovations are basically, you know, from right. From purchasing to and dealing with joint ventures to reporting monthly expenses and dealing with tenant issues. And handbook's like all that stuff. Yeah, there's there's documentation there. So.

George El-Masri [00:31:52] OK, cool. So for someone listening to this, they might be overwhelmed with everything that they're hearing. Do you think do you think that somebody should just go out there, make mistakes, try to learn as much as possible and avoid mistakes? But if you make them, then that's fine, because you guys have been through what people have been through it. So you just got to do it and move forward and create a system after if that's the case.

Brady McDonald [00:32:15] Yeah, I mean, obviously, you're going to try to mitigate as much of the risk as you can start. Education is the number one way I feel to mitigate a lot of the risks. Having a mentor alongside that, you can at least balance the questions off is another one. But then, yeah, like these systems and processes, some of them can you know, they can mitigate risk. Right? I mean, we're you can totally go through it and do it all yourself. It's it was easier for well I wouldn't say it was easy for us, but we had a team of staff helping create this stuff. Right. So I mean, if you can. If you can like all of our stuff, we're going to actually create a training package, a full online training, it's just a training course with all of our systems and processes included within it and teach you how to use it like that, I think is probably very valuable to not have to worry about if stuff is getting in the back end. And then you can really focus on what's what the front end is, which is what everybody likes. We like to buy. We like to negotiate. We like to renovate. But it's all that stuff in the back that

George El-Masri [00:33:23] right can get messy and you don't have to start from scratch. Well, if you sign up for this kind, of course you have everything, you'll at least have an understanding of what it takes to mitigate risk.

Brady McDonald [00:33:33] Yeah, it'll definitely help mitigate the risk. And it's not it's not like some of these things are going to mitigate risk. Now, as far as like, say, over or under renovating or under evaluating the renovations required, some of that's going to be able to be through these forms, but also risk later for, you know, to make sure that you do have your documents all line, that you do have your joint venture agreement signed. Yeah. Like the you know, the accounting and the accounting and reporting. A lot of that's the back end stuff is going to mitigate risk of loss and issues down the road, right?

George El-Masri [00:34:06] Yeah. So if you're if you're just looking at one property, you just want to be a one property owner. Maybe the system isn't completely necessary, but if you want to scale to one hundred properties like you guys are doing, then these are the systems that are created for that purpose.

Brady McDonald [00:34:19] Yeah, yeah. And I would say not even like one hundred. I'm thinking like, you know, like three to five. You don't need them all by far. You don't need them all. But there is certain things like you can have one hundred thousand dollar loss or a fifty thousand dollar loss at one point. That's the reality. Right. So if you know there's certain tools that work, then absolutely I would try to use them. You know, it is probably going to be best used for five to ten. It's going to be very implementable because a lot of people can get five or 10 units. But they obviously they work for one hundred, you know.

George El-Masri [00:34:46] Exactly. Exactly. So you're setting yourself up for for success in the future? Yeah, absolutely. OK, yeah. All right. Before we move on to the next section, is there anything you want to add on this topic or anything else?

Brady McDonald [00:35:00] Yeah, well, so I guess we are going to be talking about. So this this online training you about systems is you can find that at live with B.K. Dotcom. OK, sorry, train learn just brand new. This is brand new. What is it called. But yeah. So if you go to learn with B.K. Dotcom OK so learn would be gay.com. Yeah. That, that's where the training and all the information will be.

George El-Masri [00:35:24] OK, and we were kind of discussing that a little bit before we started recording. So you're going to be sharing your systems, your procedures. You also said you're going to share some documents and stuff like that.

Brady McDonald [00:35:35] Yeah. So all the documents and systems and procedures that we use and we have implemented and since day one will be on on this this training course. So it is going to be online based. I think there will be a few opportunities to do it in person and then have access to online. But we're going to talk about all the different systems and processes, really break them down and make and have downloadable form. So all the forms that we've created will you guys will have in your for your access as then then we're going to work through how to actually implement them.

George El-Masri [00:36:06] OK, can you talk about some of the forms that you'll be sharing with the people that sign up?

Brady McDonald [00:36:10] Yep. So for example, prewashed, like if you're walking through a property and you want to convert it to a duplex, these are the things to look for. Just like inspection. Former walk through forms for duplex triplex. There'll be forms we'll go through again. The document that I was saying about ordering materials from Home Depot or Lowe's or your supplier, you'll have that in that system of how to, you know, just filling it out of ordering and how do you order it, like send it. And then the types of things that you can ask for in back from, say, to your supplier in inspection forms. Right. So you've got a tenant that's moving in. You know, how do you protect both yourself and the tenant to make sure, OK, if you know, just that we acknowledge that this is the condition of the unit. We also for tenant placement, we have obviously different pre pre like questionnaire forms. Where will will someone interview them on the phone before we even book reviewing? What questions do we ask? Why do we ask them? Right. And then how do we determine whether or not that we say schedule of unit forms on if we're still talking about management, bi yearly inspection forms. Right. Again, protects you, but you can check your smoke detectors, a long list of stuff. Yeah, but those those those inspections prevent a lot of maintenance down the road. But they also acknowledge issues, maybe tenant issues throughout the year. Right. So gets you in there, gives you a good snapshot, stop look of the units, etc.. There's probably a pile of other things also. Just recording renovation material. OK, how do we track renovation material and how do we report on it at the end, like a summary report on the different breakdown of different types of expenses? How do we track income and expenses on a property period? Right. How do we track tenant and contact information like you can have a property management software, but if you only have, you know, one to 10 properties, you likely don't write. So then you don't need it necessarily. But we can give. So we can you're going to there's going to be documents and forms on all that.

George El-Masri [00:38:22] So it's basically like a real estate investor toolkit.

Brady McDonald [00:38:25] It's a. Yeah, absolutely.

George El-Masri [00:38:27] Tool kit. Yeah. Yeah. All right. I just very quickly, you touched on your biannual property visits or walk through. Can you kind of just walk us through what you look for specifically? I don't know if you have it all at the top on the top of your head, but if you can just kind of share it with us.

Brady McDonald [00:38:43] Yeah. So it so we also have a forum for that again. So you purposely are going through the entire unit. Yeah. So we're going to let's just say you walk into the door on the outside of the house, you're going to look at, you know, the, the windows. If they're Woodcourt Wood Windows, do they need painting? Are the decks or the steps in good order? Walking up to the house are their mailboxes. You know, obviously. Is there a lockbox? There is the lockbox code. Right, because again, stuff happens. So you walk in the house to the doors of the hinges on the doors actually operate. What's the general condition of pain? Is there damage from dogs and pets? Is there so that if you go into the kitchen and you're looking underneath this kitchen sink, you're looking for loose faucets, that you're looking for mold in the kitchen, you're making sure the door handles on the kitchen and the hinges on the kitchen cabinets are all functioning properly. And that, you know, the smoke detectors, you'd verifying that they work, verifying that the checking the the serial numbers on them. Right. And that's another form that the tenants actually sign is the

George El-Masri [00:39:47] serial numbers on the smoke detectors.

Brady McDonald [00:39:49] Yeah. To make sure that the. Now what do we do that. We do record the serial numbers on them, but I forget why, I guess I'm not sure maybe why anyway, what else? Yeah, so verify all the smoke detectors are in place and they actually work. That's that's common. The tenants with the new smoke detectors, they'll pull them down, bathrooms, caulking. Right. Stuff that's going to affect things that you can't see. So caulking around the bathtubs, again, leaks, faucets, checking for mold around the baseboards, sometimes in basements. If they don't have a dehumidifier, then you're going to create condensation in the basement during summer months. So that can be that can be an issue. You know, it's just and then general garbage, et cetera, could go on forever. The list is

George El-Masri [00:40:35] this one right now. OK. All right. So that's pretty good to to know actually, just for people in general that are OK. If you do find that there is damage to the unit or damage from pets, whatever, what would you do in that case?

Brady McDonald [00:40:49] So it's a conversation. I mean, generally, all of our stuff is pretty new. I mean, if it's just if it's a dog and it's in one area, you at least have a conversation, acknowledge that, you know, that this is going on. You could depending on how extensive it is, we have told them, OK, we need you to fix that by X contractor and they have had to do that. What we'll generally do is you go through, you get a general list of, OK, here's some things that are reasonable. Here's things that need to be repaired. So we'll just send one of our guys and right after biannual inspection and fix it. Right. And then there's lots of stuff that is just wear and tear and it's paint. And, you know, it's it's been three years and you haven't seen it yet. When they move out, you'll paint it, right?

George El-Masri [00:41:30] Yeah, OK, very good. OK, then let's go into the next section, which is the random five. So I'm going to ask you five random questions. You just tell me what the first thing that comes to mind. All right. The first one is how do you celebrate victories?

Brady McDonald [00:41:43] Yeah, actually. So I was going to talk about this on, like a video the other day because so we used to do this all the time. So Christi and I, when we started buying houses, you know, it wasn't as often as now. So, you know, we buy nice bottles of wine now, for example. So I wasn't a wine causer until maybe like year two so that a nice bottle of wine would be 20 bucks, right? Yeah. So and then it was more about Milestone's. So we would do wine for we did the wine for a little while and then we said, OK, when we hit Prop. 50 we'll do X, so probably 50. We threw a big party for all of our staff and took them all out for dinner, had some cocktails, etc. you know, tell them how thankful we are because obviously we couldn't do it without them. We do travel a fair bit. So, you know, we last, like I said, in twenty eighteen, we traveled six months. We bought a boat to cruise around the Bahamas. So in our mind, that was a celebration. Like even though business is working, we're still working our butt off. We were able to do that. Right. So that's a big celebration. So we'll have another one coming up here to one hundred. So there are some plans in the works.

George El-Masri [00:42:52] That's got to be a big one. Yeah, it's going to be a good hotel if you want. Six months last time. I can imagine how big this celebration will be.

Brady McDonald [00:42:59] Yeah. You know. Yeah. Yeah. So that's OK. Celebrating. I think it's important.

George El-Masri [00:43:05] Yeah. All right. Well, this is a really random question, but you've got to work with me on it. You've been given an elephant and you can't get rid of it. What would you do with it?

Brady McDonald [00:43:15] I would probably rent it out for rides.

George El-Masri [00:43:19] What else is going to

Brady McDonald [00:43:20] maybe sell the

George El-Masri [00:43:22] apartment?

Brady McDonald [00:43:24] How can you make money out of the delta?

George El-Masri [00:43:26] Always thinking about what exactly that is. Cool answer. What makes someone a hero?

Brady McDonald [00:43:33] What makes somebody a hero? Oh, let me get somebody here. That's a good question. I'm not a great deep question, answer, question, answer. But I'm going to give it a try out here. What makes somebody a hero? Honestly, like like I like people say like Superman, all that stuff, I never watch TV in my life. So that whole superhero thing is kind of out of question. Yeah, but, you know, somebody that to me, it's somebody that has done what I want that I want to do like. You know what, say this with caution, but just for an example, like, say, the great Kardon, like doing something like that's extraordinary. And, you know, the amount of people that he's helping along the way, I mean, he's got to put his personality. What some people don't like it. I do. But like to me, that is like that ideal, like just doing something so amazing and looking up to having that figure, I guess is is is one aspect. But then also, like when you look back at, you know, how amazing our life has been here and you know, we just had November 11th, Remembrance Day, you know, like, those people are super heroes in my in my mind. Right.

George El-Masri [00:44:47] So. Right. OK, that was a good, good answer as well. What qualities do you value most in a person?

Brady McDonald [00:44:54] Integrity. And I think that's the biggest thing is, you know, just doing what you say you're going to do. Right. That's that's huge. I'm a pretty honest guy. Yeah. And if I wanted to do something, I'm going to you know, if I say I'm going to do something and do it and I'm going to do it as best as I can. Yeah. So I, I like that. I really value. Yeah, just that open honesty and doing what you're what you say

George El-Masri [00:45:22] you're going to do, and it makes sense that you value a quality that you possess because obviously somebody has bothered you at some point, I'm assuming, and you thought, I don't want to be like that, or maybe you've done that in the past or you didn't keep to your word and then you just decide to make a change. Right. OK, and the last question is, what success principle do you live by?

Brady McDonald [00:45:42] What success principle? OK, so what is his success principle? Give me give me a little help here.

George El-Masri [00:45:53] What is a success principle? That's a good question in itself. So a success principle would be maybe something that something that someone told you that changed your mindset or that just made you completely shift from one perspective to another.

Brady McDonald [00:46:13] OK, so OK, success principal, could it could it be something like this? You know, I'm struggling with this one, but I'm going to go with this, I'm going to I'm going to talk about

George El-Masri [00:46:25] how about this? Let's make this a little easier. What thank you. What is one thing that you think has led to your success? The biggest

Brady McDonald [00:46:33] thing. The biggest thing that's led to my success. Well, I can tell you right now, nothing was given to me and we go back, I think I talked to a little bit about this, just that fear of not being good enough. Right has really pushed me to being who I am. I like my personality. You know, some people like me, some people don't, or some people have a hard time tolerating me. I wouldn't I don't know. Just sometimes I sometimes I can be honest and I'm. I just go, go, go. I don't know. But anyway, so it's kind of like just that fear of not knowing what's around the corner pushes you to make sure to to try to make sure that that outcome around the corner is good. And then it's in your favor that fear of maybe your bank running out of money in six months or the fear of the market changing slightly in like just a little bit of fear. It's not like true fear, but it's angst or anxiety is really what's pushed me to always wanting to to do whatever you doing really well and try to hit it out of the park. So I think that that's honestly what's kept kept me going. And that's what makes me always wanted to do something different and push it further, a little bit further. And then obviously having goals, I think is another huge, huge aspect of this mindset and goals is, you know, without that, you're not going anywhere, in my opinion. Right. And I think we always undervalue underestimate what we're able to do. I know when I look back, since our in our real estate portfolio or real estate career here, we've always overachieved our goals. So our original goal was to do twelve ever total. Right. And look where we are now. Next year. The goal was to do maybe fifteen or twelve that year and we did twenty. So I think what we, you know, pushing yourself and making your goals bigger than what you think is realistic is is a big, large part of being really successful.

George El-Masri [00:48:32] Cool. Yeah. You're also not the first person I hear say that fear drives them like that. That's seems to be pretty common. So it's interesting to hear that. OK, so before we end things today, do you want to share what services you provide and also how people can contact you?

Brady McDonald [00:48:48] Yeah, that's great. Thank you. Yes. So services we provide we do joint venture partnerships with tons of people, obviously, and very Collinwood. And really it's where we invest. We buy single family homes to convert them to duplexes, triple X's by ten, fifteen unit buildings, etc. We also have property management companies. So if you are looking for property management company in any of those towns anywhere up around Barry, we have we can place tenants only or we can do all the property management. We also do consulting services for people that want to create second suites. And last but not least, and the most exciting part, because we're able to really give back valuable would be the the training course. So for that one, it is lern with BCom. Right. And then my personal email is Brady at Vicari. I see. And my cell number, you can call me seven zero five seven nine five one one four zero.

George El-Masri [00:49:40] Very cool. Very cool. Well, thank you for sharing all that today. I hope that people listening can pick up something because we covered a lot of different things. So maybe just one thing, take home and do something with it. So again, thanks for making the trip and I look forward to staying in touch.

Brady McDonald [00:49:54] Well, thanks a lot, George.

George El-Masri [00:49:55] Thanks for listening to this episode. I hope you enjoyed the content. And as a valued listener, I'm giving away a sample letter of intent. This letter is used once your potential CO venture expresses interest in working with you. It outlines the general structure of the deal and intentions of both parties. You could visit w w w well off dossie forward slash letter to receive your free copy w w w well off dossie forward slash letter.

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