Table of Contents - Cal Ewing: US Real Estate Investing…with A Canadian Twist
David Debeau [00:00:08] And everyone, this is David Debeau with another episode of the Property Profits Real Estate podcast. And today it is my pleasure to be chatting with Carl Jung, who is a very astute young real estate entrepreneur, doing something pretty cool, that is, that he's a Kanuk who focuses primarily on investing in the United States. In fact, I think that's I'm not mistaken, that's where he's got his entire portfolio. So we're going to be talking today with Carl about that, about Canadians investing in real estate in the US, what he focuses on, how he got involved in all of that. And Carl, you're calling it right now from lovely Calgary, is that right?
Cal Ewing [00:00:40] That's correct, Dave.
David Debeau [00:00:41] Freezing Calgary at the time that we're at, the time we're recording this, it's mid-February. So freezing Friesians buns off in Calgary and I'm freezing my buns off here in Dallas and
Cal Ewing [00:00:50] trying to find things if you want to stay warm and survive the bugs. All right.
David Debeau [00:00:54] So you're wishing you're down in Texas right about now.
Cal Ewing [00:00:56] Exactly.
David Debeau [00:00:57] OK, well, welcome to the call. Appreciate having you on board. And why don't you start the timer now to start off with tell us a little bit about your background, how you got involved in real estate and more importantly, how you how you got the bug to invest down in the States.
Cal Ewing [00:01:10] Yeah. So I grew up small town Alberta, and my dad was a cattle rancher, so he never worked for anyone but himself. My mom was more of a stay at home ranch wife, so she only worked for us kids. And I think that really it was ingrained inside me that working for myself was normal because that's what my family did. So after I got graduated, my goal was to play professional electric guitar and some rock band. And so I moved to the big city and slugging and trying to make that happen. I had to work a bunch of really crappy jobs and I just realized that I am a horrible employee and I do not enjoy working for someone else. At one point after the whole rock star dream ended and realized it really wasn't for me, I came across Rich Dad, poor dad and I read that book and it just really resonated with me. I was like, OK, there is another option than just getting a job and trying to pass my time until retirement. So I clung to that and I just felt like real estate was the thing. This is my answer. And that was about the same time as I decide to go to University of Calgary and get a degree in geology. And the only reason I chose that is there was a lot of outdoor classes you could take and trips and a lot of people were making good money, obviously, in the oil patch. So I chose that. But at the same time, I was reading all kinds of real estate books and trying to get educated as I possibly could in real estate, because my whole goal was to be full time real estate investor. So I while I was studying, I was learning that and then got married and headed out into the oil patch up in the middle of nowhere in my sporty weather. And I realized this is not for me. So I decided to just commit one hundred percent to investing in real estate. And I've been doing that full time for the last three years.
David Debeau [00:02:46] So how did you I mean, how did you get from investing in real estate to investing in real estate in the United States? How did that come to be?
Cal Ewing [00:02:53] Yeah, well, I think what happened is a lot of the training that's available for most Canadians is it's all American content right now. So you try some of the strategies that these gurus and stuff that come through town are telling you you can do and they don't. Hundred percent work all the time. So that was one thing. I really love the idea of investing someplace warm, like I originally thought Costa Rica would be the place to go. And then I met a Calgarian who actually had a whole business in Las Vegas at the time, and he was actually working with Canadians, showing them how to invest in the US. And it was more of a turnkey type thing. But that's how I got my start, because I just raised some money and we just with some friends and we bought a house in Vegas and that where I got my start and I just continued because it was more natural to me to buy in the US than it is in Canada.
David Debeau [00:03:39] Price points tend to be a little bit more reasonable, I think.
Cal Ewing [00:03:41] Yeah, a little bit more.
David Debeau [00:03:45] All right. So what year was that that you kind of jumped in and Butterworth's.
Cal Ewing [00:03:49] Yeah, that was right after the big crash south of the border. So two thousand nine in 2010.
David Debeau [00:03:55] I was going to be buying, that's for sure. So since then, I believe you. You've done quite a few transactions. I believe you're up to thirty, thirty properties on the go right now in your portfolio's all right.
Cal Ewing [00:04:07] Yeah, well, since I've gone full time and left the oil patch, I think you've done about 30 deals in the last two and a half
David Debeau [00:04:13] years and Presidio's very good. So it sounds like you got off to a good start on the right foot. But knowing what you know now, if you're going to go back to your younger self in 2009, 2010 and say, hey, do this differently, what would that be?
Cal Ewing [00:04:28] Yeah, I think no one is taking more action and not being so afraid. I think a lot of people this is pretty common is it's very overwhelming. It's very scary no matter where you're investing for just real estate in general. And I spent a lot of time spinning my wheels, trying to get a perfect trying to figure out which market I should be and comparing and and really doing nothing is just an analysis of this. Right. And then even this strategy like, oh, this is really cool. And oh, I learned about trailer park investing. That's what I want to do. And oh, large multifamily. Oh, I want to do that. And then a year passes and nothing happens. And I think so many people can attest to that. Right. So I think the biggest thing I learned is pick a strategy, pick a market, even if you have to throw a dart at a map, and because every market's different, every market has its challenges that you're going to have to learn and overcome no matter where it is and just go. And the more you go and the more you do, that snowball starts slowly rolling and you build that momentum and coincidences happen and you meet the right people and then you're off.
David Debeau [00:05:28] That's that is such good advice. I mean, that's my ideal type of person I like to work with. Call for my services done for your marketing services, for raising capital. Basically somebody who's
Cal Ewing [00:05:40] already got three or four or five deals
David Debeau [00:05:41] under the belt that kind of hit the wall. But so often I have newbies coming to me and saying, hey, where do I start? I say, well, first of all, pick a strategy. Exactly. Which is a pick a strategy, get educated about it, and then pick a market and get educated about that, get focused on that. And then we can start talking about talking with money partners and raising capital, because until then, nobody's going to invest with you. So that's very, very I'm definitely on board with that advice. So now that you've been doing this for quite a while and I know you work with a lot of different people, and chances are you've been part of real estate clubs and all sorts of things like that besides the procrastination and the lack of focus on strategy, what are some of the biggest mistakes you see other real estate investors making?
Cal Ewing [00:06:22] Well, I think people put a lot of limitations on themselves and make a lot of excuses, again, not to take action. So financing, for one is an example. You know, it's like, well, I don't have I don't have any money or I I've already invested all my money, so I'm done or I can't get a mortgage. And the one thing that I found with investing in another country is I've had to learn that I can't really get much financing, I can't qualify for mortgages. And so I'm just figuring it out and and just trying to solve your problem to get to where you want to go. So, like, I've had to learn how to buy houses with no money down in most of what we do with no money down. And you hear a lot of people saying, oh, well, that's just no one can really do no money down deals. And well, that's absolutely not true at all. It's too hard as a Canadian to buy in another country. Well, no, it's not that hard. It's just you put those limits on yourself. And I think it's it's all up here. It's just the limitations and being able to push through them and find the answers
David Debeau [00:07:16] very, very cool. So tell us a little bit about the strategy that you're you're focusing on right now, because before we started recording, we were chatting and I said, well, it looks like you're doing these auctions to me if I read between the lines. But that's not the case. So kind of give us a synopsis of what you do. What's your main bread and butter strategy? Sure.
Cal Ewing [00:07:33] Well, we actually have two we have a short term cash flow. Keep the business going strategy, which is just wholesaling and whole tailing properties.
David Debeau [00:07:41] So sorry. Wholesaling what? The whole taling whole taling. I don't know what
Cal Ewing [00:07:46] it's all all day. It's really similar. So you get a good deal under contract wholesaling is where you're assigning that contract to another investor. So maybe they'll keep it as a rental or they'll take it as a fix and flip. And so that requires a big database of investors. Wholesaling is the same thing, except you're actually listing the house on the MLS. You also began wholesaling
David Debeau [00:08:07] is you buy it super, super cheap, you sell it cheap, you wholesaling is you buy a cheap and you sell it retail,
Cal Ewing [00:08:13] a market value, really doing anything to it. Right. OK, makes sense. So that's, that's the short term money. We're able to do multiple deals every month that way. And then my long term strategy, and this is more based on where I see the market right now, is we're actually buying homes again at a discount. And a lot of times we're using private lenders and we're buying these homes and then we're turning around and owner financing them to people that can't qualify for a mortgage. And what we like to do is set up the payments that they're paying each month on the loan. So it's the same as rent. So it's kind of a no brainer for people that have been renting and they don't want to anymore. Why pay that same thousand dollars for renting a house when they could pay that same thousand and they are now the owner from the get go? And there's a lot of value in that.
David Debeau [00:08:56] Obviously a lot of tricks to that strategy. But is that is one of the main things is you've got to get in there under market value or you've got to get in there with really good terms or how do you make that work?
Cal Ewing [00:09:06] Well, it's actually easier to buy homes in this in this model or strategy. That is when a whole wholesaling and wholesaling, I can pay a little bit more because it's all based on rent. So I start with, OK, well, what would this house rent for or what are the rental comps around that in that neighborhood and say, I know rent for a thousand bucks. I then back up just using my financial calculator. I can figure out, OK, how much would I have to sell this home so that my buyers payments are a thousand bucks a month. So you can just it's all based on rent. And then once I know that then I can make my offer based on once I know my sale price, I can make my offer based on that. So it's not necessarily a huge discount.
David Debeau [00:09:45] Interesting. And then again, because you're owner financing in the States, typically it's different than it is here in Canada. Typically you're looking at a thirty year term. Is that correct?
Cal Ewing [00:09:54] You can yeah. There's no balloons, at least in Texas. It's very difficult to have a balloon payment, which says after five years that the loan is due for your buyer. Wow. So you can set it up so that after. Five years, the interest rates are going up, which encourages them to refinance, but we actually just have a 30 year low, 30 year amortized loan for our end buyer. So it's very attractive for them.
David Debeau [00:10:16] Interesting. That's very, very going up. We are also talking about is because they're saying, well, jeez, you get an investor involved in that who wants to have their money tied up for 30 years. But you brought up a very important point. Chances are they're going to upsize, downsize, move. Something's going to happen within on average five to seven years. Everybody's moving, right. So it's not you're not stuck for life with that loan.
Cal Ewing [00:10:35] Yeah, well, a lot of times when we're working with other investors, it's actually just a five years. We're borrowing the money for five years to buy the house. And at the end of that point, they have the option to continue for another five years or we can put in a different investor in their spot. So it's not actually 30 years commitment for our investors.
David Debeau [00:10:54] Very cool. Very, very smart. What you're doing there, my friend. That's that's interesting. I'm fascinated by what you what you've set up there. So why did you pick Texas?
Cal Ewing [00:11:03] Couple of reasons. I actually started learning how to buy at the tax foreclosure auctions in Texas. And the reason that Texas is, well, there's training available for one, but just the laws in Texas make it really favorable for buying tax foreclosures. So I had a little bit of a team set up down there for that purpose. And what I found is just the way the market is down there, it's so competitive that those foreclosure sales that getting a deal is next to impossible. And it was just moving too slow for me. So then that's where I got the analysis paralysis for a while, trying to figure out, OK, well, what market? Right. There's so many options. Where should I be investing? And finally, I just forget it. I'm going to invest in Houston. I've already got a bit of a team there and we just kept growing. And that's where I realized how it really doesn't matter so much where you're investing because you're just going to figure it out. But some of the benefits of Texas are that it's very flexible as far as evicting tenants. It's very landlord friendly as a lender. Right. For owner financing. It's very lender friendly. So foreclosing on people is if you have to, it's very easy to go through the courts and let it drag out for months and months. And then the market I mean, in the last recession, Texas in general, but Houston, they barely even notice the recession, whereas other markets like Los Vegas is like a roller coaster of prices. Right. And in California and things like that. Whereas you can hardly even tell that a recession happened in Houston in 2009. So it's very stable. A lot of jobs, a lot of immigration, things like that.
David Debeau [00:12:33] Very cool. All right. So we're we're down in the last three minutes or so here. I know that you you've started working with people and showing people how to do private lending, how to how Canadians can get set up and invest down in the United States. So tell me a little bit about who
Cal Ewing [00:12:50] we're the kind of people that you're
David Debeau [00:12:51] typically working with for these services.
Cal Ewing [00:12:54] Sure, yeah. There's actually two different groups of people. So I'm actually building a course right now to help Canadians invest or learn how to invest in the United States, because I think there's a lot of misconceptions and people toy with the idea, but they quickly hear rumors of double taxation and things like that. And they just say, oh, no, no, it's too scary. And I wanted to create this course to address some of these common concerns and questions that I get about just how to get started and then hopefully help people avoid some of the speed bumps and hurdles that I had to overcome in order to figure this whole game out. I'm preparing a course that should be finished in the next few months for about seventy five percent done. And that would just help people that are actively looking for real estate deals in the US. So these can be landlords or people wanting to learn wholesaling or flipping more active type investors. And then I already have a private lending training course that I've made and I can share the link for video free course. And it's more set up for people that maybe are looking for better ways to grow their retirement savings accounts and just grow wealth through lending on real estate. And I'm sure you agree like it's something a lot of people don't really know about. And it's a really solid way to grow wealth because you're securing your investment to an actual piece of property that has actual value. And so this course is just helps walk people through that process, educate them on how it works, and just opens more options for people who are not happy with the returns are getting. And what's
David Debeau [00:14:23] the best way for people to find out more about valuing
Cal Ewing [00:14:26] a couple of ways of Facebook dot com slash countersuing real estate. You can connect with me there. And then my website is dot investment property USA Dot. See the two best ways to
David Debeau [00:14:40] find out more in the last forty five seconds. I know it's tough, but one tip for somebody looking at investing down in the states and Canadian looking at investing down the stakes, what would be a tip for them.
Cal Ewing [00:14:50] Good cross-border accountant and a good real estate attorney in the market that you're in. That's all you really need to get going.
David Debeau [00:14:56] Those are the two you need. Very good. All right, Kellyville. It's been a lot of fun, and I feel like we didn't have enough time to flesh everything out. So I might hit you up for another interview sometime down the road.
Cal Ewing [00:15:06] Excellent. Appreciate you having me on.
David Debeau [00:15:08] All right, my pleasure, my friend. Take care, everybody. Talk to you soon. Bye bye. Well, 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 it. Very, very much appreciated. And 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.