Table of Contents
Podcast Transcription
Sandy Mackay [00:00:32] Breakthrough real estate investing podcast, episode 120.
Announcer [00:00:36] If you are looking for the skills and tools to succeed in real estate investing, you’ve come to the right place. This show is about breaking through barriers, breaking through limiting beliefs and breaking through to the life that you want to live through the power of real estate investing. This is the Breakthrough Real Estate Investing podcast, and now here are your hosts Rob Break and Sandy MacKay.
Rob Break [00:01:09] Welcome back, everybody, thanks for coming and joining us here again. Sandy. Hey, how are you?
Sandy Mackay [00:01:15] Hey, Rob, I’m awesome today. Excited to get some more fresh content for everyone. And yeah, have a great show. Hopefully, we got some. I can see some people watching and listening in. So, you know, hopefully they can chime in. If they have any questions, they can jump in and ask and happy to share. And just happy to be producing more content again. Great summer. Lots of action happening. Hot real estate market. Lots of stuff to talk about.
Rob Break [00:01:40] Yeah, we’re live on Facebook every Wednesday at 10:30 now and then a couple of weeks later, you can catch up on the audio if you’re not available. If you’re one of those people that has a job and can’t jump on and watch for an hour at 10:30 on Wednesday, then obviously you can listen to the audio content version of it off of our website or off of off of iTunes or wherever you listen to your podcast. But speaking of our website, everyone should go over there right now and check it out. Breakthrough Aria podcast Okay, there you can download every episode that we have done so far. And that’s like, I think we’re pushing 120. What’s this one?
Sandy Mackay [00:02:19] This is 120 120 right now.
Rob Break [00:02:22] So you could listen to every single episode if you got 120 hours to kill. Go back and check them out, and then you can also get our free report.
Sandy Mackay [00:02:34] Yeah, the ultimate strategy for building wealth real estate. If you sign up for our list there, you’ll get that report, but we also get on our email list with all the different stuff we’re doing. Get access to every show as it comes out right in your mailbox, you’ll get invites extra value there. Come out to some of our live events if we’re ever doing real live events again or virtual events, whatever that looks like, jumped on there and you’ll get notified of all the action.
Rob Break [00:03:00] Absolutely. And go over to iTunes as well and leave us a rating review, please. I would really help us out. You guys know the drill. Whoever hasn’t taken a couple of minutes to get over there and just tell us what you think of the show, please do that. We have one. One review. And it’s short and sweet, so I’ll just read that right now we have one new review since the last show and this one is from Diner 89. And he says, Great podcast five stars. I really enjoyed the podcast. I learn a lot. We’d like to hear more on startup and how to get investments to get more properties and grow your portfolio. How to get investments to get more. I think he means how to get funds or how to get capital, to get more properties and grow your portfolio. So thanks for that dinner. Know, I mean, we talk about that a lot, right? Sandy. There’s multiple ways of gaining getting some capital to do your deals, regardless of how much money you have to start out with. And, you know, like I said, go back and listen to one of the hundred and twenty episodes or any of them and you’ll get some nuggets, some tips in every single one of them on that kind of strategy.
Sandy Mackay [00:04:09] Yeah, it’s on a lot of episodes, I would say. So lots of stuff to talk about around that, and I’m sure we can touch on that in this show. I’m sure again and how we do that and how you might want to do that. There’s a few options,
Rob Break [00:04:21] but I’m super excited to talk to our guests who we have waiting in a really nice it looks like you’re at a really nice cottage right now. But Alfonso, thanks for joining us today.
Alfonso Salemi [00:04:32] Yeah, bull. Thank you so much. Rob and Sandy for having me on, and it’s such a pleasure to be talking with you guys. Yeah, I’m up in Port Stanley, Ontario, enjoying the cottage, a beautiful summer weather in the beach. So yeah, I got a little bit of a sunglass tan and burn and the good stuff going on. But yeah, definitely excited to be with you guys today.
Sandy Mackay [00:04:52] Fantastic. Yeah, we’re excited to have you. Alfonso Salemi and he is going to do a bit of an intro here, actually a pretty long one today. So just bear with me as I read through it and we can add on to it if we feel needed, but really excited to have you on the show. Alfonso is he’s out in the community sharing his passion for rent to own and the benefits it could bring to people’s lives, so he’s heavily involved in the rent own aspect of renting investing. He thrives on interactions and enjoying helping others with their biggest purchase is often the first person on the JAG Properties team to meet with tenant buyers. JAG Properties Being his rental business, he also works with investors and outlines the personal financial benefits of the JAG program to them. And he’s the company’s conduct to realtors, brokers, and others in the world of real estates. And Fonzo values Jags team approach, the rental model, and its benefits to all parties. He knows that all parties must be committed to ensure the successful completion of each rent own program. I’m going to get a lot deeper in on that rental program and how it all works throughout the show. Alfonso runs Jag’s properties. Burlington office is active in the community. Like we said, he’s also a founding member of the Right Club and Real Estate, which is the real estate networking group to encourage excellence, communication, and growth among likeminded professionals. As a proponent of the benefits of rent to own and how it can enable those who have experienced roadblocks to become homeowners, Alfonzo often talks to the community and business groups to inform them about Jags rent to own program, and Alphonso thinks that it’s unfortunate that people often think that they can’t recover from bankruptcy, bankruptcy, or consumer proposal, and that owning a home is out of reach for them. And so showing how it is possible to own a home if they’re willing to do it as needed is one of the best things about his job. With their rent own program, so that gives little insight. We’re going to dove a little deeper into all of that stuff. And again, welcome to the show, our fans. We’re really happy to have you on here and excited to share and learn about what you’ve been up to.
Alfonso Salemi [00:06:52] Yeah, thanks so much for getting through that intro. I know it’s a lot, but I grabbed that right from our website as well to solve it. It’s just to speak more a little bit about a few of the things that you covered there.
Rob Break [00:07:04] Yeah, Alphonso, I guess the way we start off with everybody pretty much is just a little. Tell us a little bit more about yourself and how you ended up getting into real estate investing.
Alfonso Salemi [00:07:13] Yeah, so you know what, I was born and raised in Hamilton, Ontario, from Italian immigrants that they came over in the mid-60s. And yeah, I just I went through school, elementary school, high school not really knowing what I wanted to do, and I wasn’t really good at school per se. So I was always trying to find something fun. You know, I enjoyed sports, that kind of stuff. And then it was in college. I was I went to Mohawk College, and I was taking quite a marketing. And one of our one of the marketing instructors teachers was actually a real estate, a real estate agent. So he would often let us go to class early because he had to go inside a dealership or house, do something right. And I was like, wow, you know, he’s got this great job teaching at a college, but he’s ducking out to go do real estate. So I was always asking him. And when I was younger, I worked on job sites with my cousins as well, too, that were developers and builders. So I always knew that with this real estate was really great, but I only knew it from two aspects of like either you had to build a house or you’re a realtor. And I was like, I don’t know if I was into those, you know, realtors work late and weekends and open houses on Sundays when you should be hanging out with family and those kind of things. So that was kind of my early perceptions. And then I was lucky enough to get a copy of the rich dad, poor dad book in my hand, which I’m sure all of your listeners have all heard of an insult like that. And I was on vacation when it when I was reading that and nor my feet up at the pool, drinking my right hand and going, oh yeah, passive income make money while, you know, while you’re sleeping and I’m like, this, this sounds great. I got to get into this. And shortly thereafter, I took the classes that, you know, they call them the rich, that education or rich dad, poor dad classes. So I really learned about a few different strategies, and the one that did speak to me the most was rent to own because it up and down markets. And when you’re helping people qualify, people always need to own homes and credit, and all that kind of stuff isn’t really easily accessible or taught in school. So I thought that’s where the connection could be, as I always thought I was a good communicator so I could help people kind of get into their house, right? So yeah, that’s what really got me started, which was, you know, not unlike too many others, the rich dad, poor dad book it got me interested. The rent own strategy really spoke to me just because I was like, you know, I don’t know if I can swear rely, but, you know, scared of a lot of the things that people talked about with rental properties, right? Broken toilets and tenants leaving. So the rent to own where you could help somebody, and they cared about the property because they were going to own it really spoke to me because it almost kind of covered off the downside a little bit or hedge some bets in terms of rental property. So that was kind of that’s a quick little intro. And I got to meet Sandy early on as well, too, when he was hosting events in Burlington. And that’s where I first had met him. Kate and you worked with Mark off there as well to doing events. And I really like the whole networking aspect of it because you sit in a room chatting about different ways. We could all make money and do that. So I really like the whole community of the real estate investing community, I should say.
Sandy Mackay [00:10:15] Yeah, fantastic. And that was that’s something that myself as well. Rich dad, poor dad. I mean, that was the trigger point, really for me. Ultimately, there was a few things, maybe at once coming together, but that was one thing that I said, wow, which is like a total mindset shift. And that’s a book that almost like, if you haven’t read that book and you’re watching this or listening to this, that is probably one of the most common books that comes up in this show. And I say almost 50 percent of the list of people we have on that gets mentioned in some way. Shape or form is something that’s triggered really a mindset shift. I think ultimately is what it is from thinking about having a job to go into more passive income, building up multiple revenue streams and that sort of thing, right? And just thinking about that differently. Did you actually go through the program then with them like one of their rent own programs? Is that what it was?
Alfonso Salemi [00:11:05] Yeah, absolutely. I was full on board paid like the twenty-five thousand dollars for the training, got mentors, took the lead on the weekend courses, the follow up courses and really, that’s when you started talking to people that you know, most people thought I was crazy. Pay twenty-five thousand dollars to go to a couple of weekend courses and learn about real estate. So in my circle of influence at the time, a lot of people thought I was nuts, including parents and family members, you know, saying, you’re going to go and do real estate and, you know, real estate’s too expensive and you can’t do all the stuff that everybody who’s read all the negative connotations. So when are we going to that community? The classes were great. The education was phenomenal. But the community of people and the people around there that had the same mindset that wanted something different. And I thought I was, you know, to be honest, I thought it was a pretty sharp guy. Like, I went for marketing and business, and I always thought, you know, do sales because you can sell more, you make more. Right. And I remember I was like, greedy, I don’t like it. Bring your early. Bring your parents close to school or job career day kind of thing. The sales guy said, well, they don’t give awards for accountants of the year, right? The sales guy. Of the year, so I was like, oh, you can always make more. And then the real thing was kind of a combination of like, yeah, if you hustle more and you work more and you learn more. You can definitely you can do better. So. And so we’ll worry about that book for sure.
Sandy Mackay [00:12:26] And did you have a normal job then I guess at the time was, well, like you were working somewhere and yeah. Absolutely.
Alfonso Salemi [00:12:33] Absolutely. Yeah. Yeah, exactly. Yeah. So I was actually window coverings. I was selling window coverings, working with companies like blinds to go in covers and things like that, selling parts components on the road. I work for UPS for a little while as well to what I remember. I can’t even tell you how many times that I went into like meetings with realtors like yourself, Sandy at the time and then ups people that sometimes have the wrong bag. I bring in my ups bag to like the real estate, and I’d be kind of running parallel because it was operating my own schedule at the time, right? And I was like, hey, this real estate, I need to go and meet people and talk to people, not just look at houses, right? And that’s what that’s the aspect of I really like to go is really, truly a people business, right?
Rob Break [00:13:15] Yeah, so let’s just get into this whole rent to own thing, and I mean, maybe there’s most of the people might be familiar with it, but let’s just break it down into basic component and explain what it is and how it works.
Alfonso Salemi [00:13:29] Yeah, definitely. Well, that’s the one question I get all the time, you know, how does Red Zone work and you have to look at it from a couple of different perspectives, right? Like most of your listeners, are probably investors or wannabe investors that are listening to this. And then that’s a big part of how we how we do so many of our rentals with joint ventures and investors. There’s also the side from the tenant buyer perspective and then obviously the professionals and mortgage brokers that we work with. So essentially the way that original works is we work with people, and we do a client first approach. So we find our clients first, we get our clients first. But somebody that can qualify for a mortgage, whether it’s their income, their downpayment, their credit score or combination of those things. One of those are two of those things are like, you don’t have enough money saved. Maybe they’re self-employed and they’re not claiming their true income. So the bank lenders aren’t going to qualify them for enough of a purchase price or the purchase price you’re looking for. And then the down payment, right, saving up for enough down payment five, 10 20 percent. And like I mentioned earlier, the credit score, right, I didn’t understand what a credit score was until I started taking those first classes and investing. I just filled out paperwork and got mortgages because the bank or the lender gave it to me. So we find clients that can’t qualify. We take a look at their situation and come up with a budget and say, OK, this is what you’d be qualified for in three years. We reverse engineer it and we give them a budget to go shop for a property today, four hundred five hundred three hundred-thousand-dollar purchase price. They go out and choose the home that they like, the street that it’s on the area, what amenities they want to be close to. And we work with realtors to go and help them find a home where we’re not realtors ourselves. So they go shop for a house through our through our investors and our joint venture partners and in ourselves. We buy the property, set the terms of how much rent they’ll be paying each month, how much additional savings they need, what the purchase price will be at the end of the property. And then what we’ve done over the last two years is brought all that in House of like an internal credit repair team that’s actually helping the client or like personally training the client to qualify for their mortgage at the end of the term because they know what their purchase price is going to be. So it’s either, you know, claiming their income properly, saving up more down payment, fixing up aspects of their credit score so that they can go get their own mortgage at the end. Yeah, that’s kind of like the gist of it. And then obviously with every client, the program’s a little bit different of what needs to be done, the client. Sometimes there’s more cash flow, sometimes there’s more buyout price or all the nuances of the deal itself. But that’s kind of the basics. We’re helping people buy their house and own their home at the end of the three years.
Rob Break [00:16:08] Right? OK, so your company will go find people that can qualify for the home and then you’ll buy the home with your partners and put them into an over the next two or three years. They repair their credit or whatever is wrong with the reason why they can’t qualify themselves. And hopefully at the end of that term, two years, three years, whatever it is, they’ll be able to buy that home themselves with, you know, with the proper qualifications under like an AA lender bank and then they would take over from that point.
Alfonso Salemi [00:16:41] Yeah, you got it. Yeah, essentially getting them into their mortgage. Sometimes it’s the first time that these people have ever owned a house. Right? So getting them to a first mortgage? Yeah, within a lender, sometimes B lenders, but getting them to more traditional financing and getting them out of kind of the rental aspect of it and putting some equity into their home.
Rob Break [00:16:57] And then I guess the price that you buy the house for, they would be purchasing it for a price with appreciation taken into account over those two or three years.
Alfonso Salemi [00:17:08] You got it. You got it. Yeah. So typically we’re using anywhere, you know, three, four or five percent appreciation, depending on the area of the market, what it’s done historically, what it’s projected, right? No one has the crystal ball. But yeah, like something that is reasonable where it’s, you know, in most cases, it is successful because it’s based on their income, based on their down payment, based on their credit score, so that we know what we need to do to correct those issues throughout the three years. And it’s reasonable and obviously within the market to, you know, acceptance as well, too.
Rob Break [00:17:41] So would you mind basically like let’s just do a case study like a fake case study? Let’s say, let’s say somebody wants to buy a $400000 home right now. Walk us through what that would look like, like what kind of downpayment do they need to come up with? And what does it look like when they’re ready to buy at the end of the term?
Alfonso Salemi [00:17:58] Yeah, typically. So if it’s a first, first, if it’s your primary residence rate, most people know you need five percent and include another one to two percent for closing costs. A lot of the clients that we see are self-employed or self-employed. Clients need about 10 percent to close on the property that they want to get a 90 percent loan to value mortgage. And then the clients that we do work with that have had bankruptcies or consumer proposals in the past, they typically need a 20 percent down payment. So what we’re trying to do is get that whether it’s five, 10 or. 20 percent by the end of the three years, they do need some down payment today. Right. So we’re using a $400000 purchase price. So typically the client a five percent, they would need 20 thousand to go and buy that house. If they don’t have that twenty thousand, they have, you know, 12 or 15, then then we can work with them because they won’t be able to qualify at the bank without that additional downpayment. The part that we always try to strike was 10 percent at the end of the program, whether you’re self-employed or not, just because you do look better in the bank size and Wednesday’s if you’re putting a little bit more down, obviously, the more the better. And then, yeah, so that’s a down payment pieces, whatever they have at the beginning of the program, like they do need at least three percent or three percent of the purchase price or ten thousand dollars to get into the program. That’s our minimums. Whatever is greater of the two three percent or ten thousand dollars. And yeah, and then we try to basically work that equation backwards to say, hey, they need, you know, if it’s OK, if they’re buying the home at four fifty at the end of the term, they’ll need forty-five thousand. Right. So we just divide that up. If they have 20, we need to save them up. Twenty-five, if they are 15 right, you need to save them up thirty-five and break it down that way there. In terms of income qualification, general rule of thumb that we use is, you know, income times for that’s kind of a good barometer income times for plus whatever down payment they’ll have if their credit score is better, you know, sometimes we can go to four point twenty-five or four point five if credit score is not the issue and then the biggest, biggest thing that we see all the time is people that don’t have a high enough credit score. And it’s a lack of knowledge and a lack of understanding of how the credit score is made up. And people think that, no, you know, not having higher income impacts the credit score or, you know, credit card bills or how much, you know, loans of credit not using them properly, right? So essentially, some of them are, you ask, like, who would qualify if they’re looking for a $400000 property today, you know, they would have to have around ten to fifteen thousand dollars saved already. Their income would have to be in and around hundred k like total family income and their credit score. As long as it’s not like, well, we have worked with credit scores that are zero rate like newcomers or new immigrants into the country that have the need to build up a credit score. But that’s kind of the least of our concerns is because of the credit team that we that we have in-house now. As long as the clients are following the plan, we’re pretty confident we can get a client client’s credit score improve based on, you know, tips, tricks and follow ups and actions that they can take to do that.
Rob Break [00:21:00] So I think that that there speaks to all the investors that might be interested in getting into this kind of thing just so, you know, in depth, you guys go with the buyer clients that you’re working with. So let’s switch sides now and talk about the benefits for the investors that you work with.
Alfonso Salemi [00:21:16] Yeah, absolutely. I that was my first real estate investment, and like I said, I was kind of a nervous investor and I’d like the safe and secure mode of life for a long time. And the benefits is we have those clients that have something saved up. Just think if you are an investor and or you’re just a general person, not only personally, if you put ten thousand fifteen thousand twenty thousand dollars on anything, you’re going to want to follow through, right? Whether it’s, you know, a vacation or a down payment on a house, right, you’re going to want to follow through on that. So from the investor side you’re partnering, we look at is that we’re partnering with these people because we choose the clients first. So you’re partnering with these people that have a vested stake in the success of this program. They’re rolling alongside you. Number one topic of the benefits is the lack of repair and means. Right. So clients, internet buyers that are in the programs, they are responsible for all the repairs and maintenance of the property. So if you have a normal rental property like I know what just happened last month on another rental that I have a water heater goes, OK, it’s cash flowing, four hundred bucks and you go buy another water heater while you’re down that month and move on, right? And that’s just part of it. Now you have any water heater, et cetera, it’s good. But for the rent to own, there’s no repairs and maintenance required. You don’t need a property manager on site. It’s more about the people managing, and that’s what our company does and is watching a client. Typically, cashflow is a little bit higher than a conventional rental because we do have that down payment savings, and I’m sure we’re going to talk to you about how the cash flow works and how that’s credited back. But the cash flow is typically higher on a rent to own deal month over month, over thirty-six, typically thirty-six months. And then the biopiracy, you have a clear exit saying in three years, we’re going to sell at this price, right? When we’re talking about refinances, you’re always kind of within a range. And with our sell back, we know what the exact number is or we’re more or less what we’re going to sell back to the client in three years. Not to say that there is an alternative exits and things like that, but it’s really clear to know how much cash flow you’re going to make each month, what your sale, back price and what your profit will be over the three years. And it’s really hassle free and worry free in terms. We’re managing the client for our investors. We’re checking in with them. We’re visiting the. Properties a couple of times, three times a year and reporting back to them, so it’s really kind of a hands off a higher cash flow end and return basis than any other kind of investment software currently. Because of some of the benefits.
Sandy Mackay [00:23:42] So is there any difference? Like what? Maybe some differences that you compared to your structure compared to some other rent own programs out there? Is there any big significant differences that you see or that you maybe think maybe you do a little better or differently than others?
Alfonso Salemi [00:23:57] Yeah, definitely. I’m proud you’ve heard me say it a few times, so it’s definitely the one thing that I’m proud of is our in-house team, right, is that we’ve we worked with mortgage brokers and credit repair specialists, kind of like on a one-on-one basis with our clients and having that. But since we brought that in-house and have a team of mortgage brokers, certified financial planners and, you know, credit analysis kind of experts bringing that in-house, that’s really the strength of our program. The strength of our rental home is ensuring that the clients are going to follow through and own the property. That’s really the success of the rental. And I always say this anybody can start a rental program. It’s successfully concluding and selling it back to the tenant buyer where it gets tough or it’s more difficult. So the in-house team is definitely something that I think sets us apart a little bit differently. And just think the client approach the client first strategy versus property first strategy. So we don’t buy a property unless we have a qualified tenant buyer ready to go. We’re not looking to say, hey, we’re going to buy this house, even if it’s great area, great appreciation, awesome market. We’re not going to buy that house and hope to find a tenant by a client because now we’re adding in the added element of people. Their other finances need to line up and place their down payment, their credit score, their income. And now they actually have the light, the property. They don’t like the area or the direction it’s facing or the way the yard looks. That’s just an added element of difficulty. So the client first approach is definitely, I think, what the one of the better ways to approach it, because now you have a client that’s invested emotionally that wants to buy that, probably because they chose it, right? Those are just some of the things that I think are the separate itself from some of the others.
Rob Break [00:25:38] So let’s talk about some challenges that you guys run into. What are some of the big ones that you see involving the strategy?
Alfonso Salemi [00:25:46] Oh, there’s no challenges in real estate investing, right? It’s all easy sort of simple stuff, right? Rainbows and butterflies, right?
Rob Break [00:25:52] But I figured it all out.
Alfonso Salemi [00:25:55] And well, yeah, yeah.
Rob Break [00:25:59] That’s to say that we’ve actually had guests say, you know, because when you sometimes when not too many of them, because we really try to keep it real and I won’t take that for an answer, you know, but I’m sure I guess that’s a no, no, I really there’s not any challenges. Everything’s went well
Alfonso Salemi [00:26:17] because they don’t see the follow up question is going to be like, well, how’s your second week in real estate investing going right? Is it that they haven’t had that? You know, those challenges of experiences? I don’t know. Maybe they just haven’t been doing it that long or horseshoes. But yeah, there’s definite challenges. And I mentioned it, it’s not so much property management, it’s people management. So when we’re trying to, you know, again, our I think our minds shifted when we read rich dad, poor dad. So we had a different shift of a mindset. So maybe not to that extent or that level, but we’re trying to shift the mindset of clients and Senate buyers of, you know, get out of the renters mentality, where now you can have equity and explaining all that from somebody that maybe doesn’t have any background. That’s definitely a challenge, right? And they’re saying, well, no, I just want to own a $700000 house and pay fifteen hundred dollars a month. OK, well, I always say I want a full head of hair in a Ferrari. Still working on the Ferrari right, the head of hair, I might have to say goodbye, but yeah, those are some of the challenges that sometimes people, the clients to reporters, really are fully on board or don’t follow along or they get that fatigue and where it’s where we do have to come in and either extend a program or in some cases where we’ve had to kind of just end the program, try to return and give the equity back or some of the equity back to the clients and move on from there. And then, you know, there’s kind of the normal challenges of we’ll see what we’re kind of experiencing right now is it is such a hot market, right? And there’s so many multiple offers lack inventory out there. And when our process, we require at least a home inspection because we want to walk through the properties with our clients and see their face. When a home inspector says, well, hey, this is a furnace filter, you’re going to have to change that every three months or, hey, there’s going to be normal wear and tear on a property. This is what happened. And if their faces like, oh my God, I don’t want to do that, I’m responsible for that. It gives us a good insight on their willingness to participate and be successful in the program. So those are definitely some of the challenges. Yeah. Like, I guess not so much a challenge. Or maybe the second downside pros and cons of a preset purchase price is when the market’s doing eight and nine and 10 percent and, you know, double digit appreciation, and we’ve locked in at a four or five percent appreciation rate. Yeah. Are we leaving money on the table? Definitely. But we’re cash flowing and we’re profitable on all of our rental owned deals. So, you know, there is a little bit money. Left on the table, so that’s a challenge, and then, yeah, again continuing to find, you know, good partners, whether that be professionals like real estate agents and mortgage brokers who really understand. And it’s not just like, oh, my client is the last case scenario, let’s go into a rent to own and see how it works. We like to work with people that truly do care about the clients and do want the best for them and not just turn over and cash another check. Right. So, yeah, working with trusted partners and as the market shifts, obviously during a pandemic and working out payment plans and people’s incomes and all that kind of stuff, the challenges are always going to come. It’s how you handle them, how you work through them and growing and then challenging the challenges of growing a company of having, you know, five, six, seven different employees doing different things, getting them on the same page. When it just started with two of us, myself, my business partner out of is either him or I doing it and now passing that on to other people and trusting them to get the job done. Yeah, those are a few sellers, so I’ll never say there’s no challenges. You can. Definitely that’s where you should end the show business and there’s there are no challenges. Yeah.
Rob Break [00:29:46] OK, so that is what JAG Properties does now. Let’s talk a little bit about your networking group that you that you guys are on.
Alfonso Salemi [00:29:53] Yeah, yeah. So yeah, completely obviously aligns with what we do at J Properties, too. But the right club real estate investment, training and education club is into the same light of how I thought about the rich dad network of investors that I met and Sandy putting together events back in the day of getting investors into a room. And it’s sometimes about a project, sometimes about a strategy, sometimes just about challenges and mindset, about, you know, the real estate investing in truly likeminded people kind of getting together, whether they’re doing rent ownership strategies or commercial or wholesaling or student rentals and all the different facets, right? Because you say, I’m a realty investor, what does that mean? It’s like I’m a human. OK, well, all right. What kind of humor? All right. So it’s really, we’re getting kind of solopreneurs kind of in a room together talking about the different challenges, strategies, and successes that people have had, right? So, you know, I know Adrian, your partner Sandy was at the right club, and you get an opportunity to share his story and talk about how he kind of shifted his job and went into full time investing and hearing those stories. Because sometimes all we need is a little bit of encouragement or, hey, that guy did it. So why can’t I do it? And when you guys are putting on a podcast like this for, oh, how many years you guys have done it in over 200 episodes? It’s just normal people like me that have been able to kind of achieve some level of success in real estate investing. Some people just need to hear that when they’re in their nine to five in their grind and they don’t see an end and they don’t see how they’ll be able to shift it. And that’s what the rich that education was for me was seeing people that had achieved some levels of success within their own and now giving that inspiration and then obviously giving the tools and the expertize of the people that have walked that path. Having that easily accessible. So we just launched our online community where it’s, you know, there’s online forums, there’s chat boxes, there’s calculators, there’s we’re going to have our off market like a kind of like a deal marketplace on there where people can post deals and see what they’re looking for and really, really fine tune it. I think as you guys are one of the first podcasts, we also have the podcast that we do with the right club, but it’s really connecting people that are doing the same kind of things and sharing that information. So you don’t need to be by yourself out there, right? You’re not. You don’t need to go and figure out everything on your own. Find the people that have done it the best ways, and maybe some people have done it terrible ways and take all that information and make it your own. And we’re just they’re accessible to the to the community and to the people at large. So yeah, that’s been really fun meeting a lot of new people that way.
Sandy Mackay [00:32:26] So I imagine you’ve had to shift a little bit in the last few months around how you work. That community is that as I’ve been talking about challenges, that’s probably been a bit of a challenge or something you have to pivot around. What’s that?
Alfonso Salemi [00:32:36] Yeah. Yeah, absolutely. We were meeting once a month in Burlington, Ontario, right? Like that was the rooms that you were doing your event Sandy right. And I love that I feed off the energy of other people. And yeah, definitely. It’s been challenging because, you know, obviously not being able to go out and be in person and, you know, the numbers are increasing. But yeah, we quickly shifted onto the Zoom model, and we were doing a lot of webinars and podcasts already, but not having that group community feel. That’s why we felt the online community. And that was kind of in the works kind of pre-COVID and kind of sped up because of COVID. But having that accessibility where you can go and it’s tough to go and just network and walk along the street or in your normal path of life and talk to somebody about like multiple income strategies and, you know, owning several properties and all that kind of stuff. So yeah, getting on to the website was huge and having that accessibility that people can go and kind of network at their will that that that’s the been the biggest shift and not being able. But yeah, we do have a lot of content that we did. We started going weekly on the Zoom webinars and then I think people got a little bit zoomed out. So we started going every other week to do that as well to share information and just share people’s stories, right? Both of you guys have to come on the show and love to hear your backgrounds and share your stories because that’s what it’s really about giving that encouragement and knowledge and skills to those people that that want to go do that or don’t know where to turn or how to do that. So, yeah, it’s been fun shifting it that way. They’re doing these kind of calls. I love being in person and in people I like. I said feed off the energy, but obviously this is the next best thing, right?
Rob Break [00:34:10] Yeah, that sounds fantastic. So where can people go to hear that show?
Alfonso Salemi [00:34:15] Yeah. So it’s the Right Club podcast. So if you go to the right club, don’t call the REIT club dot com. That’s where you can go to check out the podcast and have all the forums, the information. Everything’s up on there. Yeah, send me a message. Make a connection on there. And yeah, if I don’t make it, really, you’ve got to go on there and see what you want to find make it purposeful if you want to just be an observer to click around and see what’s going on. But you can find know almost. We have lawyers, we have a program on which is really good, really great as well is that, you know, there’s lawyers and accountants, realtors, mortgage brokers, all the aspects of whether again, it’s a rent owner, burger wholesale, all the different things you need, all those aspects, property managers, right, that you know, knowledge being shared on there all the time. So yeah, that’s for sure. Check out the right clubcard.
Sandy Mackay [00:35:06] Awesome, so great resource for connection with some great professionals, actually, as you’re saying that to trigger me on another question. You do work with a lot of realtors. How do you help realtors in their businesses to do more business? You talk about the, you know, great connections and networks, how-to realtors benefit working with you guys?
Alfonso Salemi [00:35:26] Yeah, I absolutely love the realtor aspect of it. I almost feel like I’m a pseudo realtor. I’ve been working with them so long. It feels like I should have like an honorary license, not that I wanted or needed or anything like that. But yeah, so a lot of times realtors run into clients that that don’t qualify for a mortgage, right, that they want to go and help them, and they bring them to their favorite mortgage broker, and they can’t get them qualified. And then they have a second favorite mortgage broker that they bring into. And then it’s like the kind of chase the guy around the corner that’s like, well, these guys, this guy can get anybody qualified, and it’s like, Well, it’s too much. And so we got to work as almost an in-between of like if the client’s being qualified and has already to go, realtor doesn’t really need our help. And if the mortgage broker can’t get the qualified, that’s where we kind of step in and say, OK, let’s see, what can we get them qualified for? And once we go through our process and understanding what their target budget is today, that’s when the realtor goes out. And essentially, you know, we work, the realtor becomes working with us and we work with that client, right? So we’re signing the agreement, a purchase and sale that realtor that’s brought us. That client will represent us in the buying sell of the property and then we start our own program. So a lot of a lot of realtors always reach out and share the story that, you know, the client turned down or last-minute financing got pulled. And we always say, you know, that always happens to, and we like to be involved as early as possible. But yeah, we’ve saved some deals at the eleventh hour. We’re financing was supposed to come through and it didn’t. And now they’re firm on the deal and things like that. But any time that a realtor or a merch broker for that matter, has a client that can’t get into that a or B lending, that’s when we can try to qualify them for the mortgage, for the rent own and the mortgage broker. And the realtor can still do their job in terms of going showing a house to that client and showing them through the normal process. Yeah, and they get they get paid their commission the same way, but another deal up on the board and help another family eventually own their house.
Sandy Mackay [00:37:20] So it’s huge, Farai, I think that’s huge for realtors, mortgage brokers to help them, you know, close more business, help more people, what’s the where do you work? That is that is their geographical kind of a locked into some certain areas? Or is that all over Ontario, U.S.? I mean,
Alfonso Salemi [00:37:37] how does that look? Yeah. Well, we’re I’d like to say like primarily not ninety five percent of our business. We’re across Ontario. So my business partner Adam was based out of London. I’m in Hamilton, Ontario. So we go as far west as Sarnia and Windsor. Kind of inbetween along the three there like Woodstock and then to Branford all the way across up to Ottawa. We have properties, right? Oakville and Oakville Oshawa. That’s as you see Oshawa add up and that is really across Ontario is really where we’ve worked. We’ve worked in Nova Scotia, P.E.I., Newfoundland as well, but primarily Ontario. So if a realtor has a client that obviously we need to work within those parameters and Rob, much like the $400000 purchase price, that’s kind of like the bread and butter. As numbers continue to climb and purchase prices increase, that becomes another challenge as well, too. But if knowing when I asked when I talked to a realtor and they’re prospecting a potential client that might fit for rent own, I’m always asking you what’s the average purchase price in the area that you work it right? And then then I can kind of give them like an avatar or client baseline of who their client should be. Because if you’re in Oakville, right and purchase prices are eight hundred thousand and the clients that are, you know, 50 or $100000 income that’s not going to work or rent alone can’t just magically make them make more money or claim better rate, but it’s to get them to that purchase price that they’re working in that area. So, yeah, we work across Ontario. We’re starting to look a little bit more out east as well, too. In the Maritimes, we have a few out there, like I said, because just the purchase prices and you can buy properties like on a line of credit, essentially right at eight hundred- and fifty-thousand-dollar purchase prices. So about primarily Ontario. Yeah, greater horseshoe area north all over.
Sandy Mackay [00:39:21] So I know we got a lot of listeners out that way. Maritimes, Quebec, even in different areas out east is that if you’re a realtor out there and you’re struggling with deals and stuff, they can reach out to, does that someone that makes sense for you guys?
Alfonso Salemi [00:39:31] Yeah, absolutely. Absolutely. Obviously, now as travel opens back up, it’s going to be a little bit easier to get out east. You know, we would go a couple at least two times a year to check on, you know, it’s probably got a handful of properties that we have open maritimes and you know, we find an excuse to go have some nice, nice crab and seafood out that way there, too, to check on their properties. But yet if there’s a realtor out there that having issues, costs can qualify, get in touch with us. That’s a great area, I think, to start working and do a little bit more.
Sandy Mackay [00:40:01] So you’ve got, I mean, rental deals. Have you guys done now? I know it’s up over 100, so right.
Alfonso Salemi [00:40:06] Yeah, so actually in total, I think it’s something like one hundred and sixty-three hundred and sixty-four total deals. We’ve actually sold back. Fifty-three sold back to the telly buyers to the clients and now are actually homeowners in the balance of those are somewhere in the project, right, somewhere first month, second month or close to ending it, you know, two or three years into the program. So yeah.
Sandy Mackay [00:40:29] And so like a lot of experience, obviously in that and I know, you know, a lot of other strategies that one thing we didn’t really touch on too much. And I’m curious your thought about what is the biggest benefits of doing a rental business and if someone starting out and they’re going to they think rental and sounds interesting to them, but they’re looking at flipping or buy and hold all the different strategies, why would rents only be a real benefit for them? Why might they choose that path?
Alfonso Salemi [00:40:54] Know to me again it is the security, right? So from an investor standpoint that the first deals the first handful seven deals that that myself and Adam did was we finance them ourselves, right? So that that security for us was the biggest sell for me. And then, just like any other strategy, you get capped out yourself. So we had to go to joint venture property, joint venture partners, and it is the security because that client and especially if you do have a good vetting system and you’re working with that client for the right reason and getting all that information up front, the security of that property of the client of that transaction, that deal is a little bit more secure now. Not to say that a burst strategy or a flip or anything like that’s not however, right? It’s just different reasons, right? I think, you know, I’ve heard you talk about it. Lots about it. Sandy is the why? Why are you getting into the real estate business if it’s just for the money like it doesn’t matter, right? Like, just go and do it. It’s like you’re not going to care. But if it’s you want to, you’re going to help people that are, you know, unable to qualify for their home, right? And even new investors like myself when I first started, you know, scared too of the toilets and the tenants and all the maintenance and construction and all that kind of stuff like I just recently did, like a duplex conversion in Hamilton. And like, I did it the exact wrong way. I was there every day, like I was watching, like I went by just for like 10 minutes every day to go and see what was going on, what was new. I need to see the construction aspect of it versus like, you know, people must never like, do it, set it, get the people the professionals in. And they were all in there. I wasn’t doing anything but like I was, I didn’t have any info. I didn’t have any knowledge or experience with it, so I want to learn that. So just like anything, it takes some time to get to know. But there’s, you know, nuances of rent to own that that, yeah, just over time, you get to know and see what works and doesn’t work. And for me that the day that we sell back the property to the client, and they officially become the homeowner to me that that’s the best we still do visits with. Some of our clients have bought properties two and three years ago off of us that invite us over for a drink or dinner and just are thankful now because now they gained some equity into their property or fish in your backyard and potentially investing in one of our projects now, right? Because they have some equity. So kind of getting those people from a rental situation is a tough situation where they’re on that hamster wheel or the rat race right now that we know. And then getting them educated about their finances, about their credit score, about how money can work for them to own their house. And then, you know, basically it’s a new starting point for them in their families and can impact their lives, right? So that, to me, is the biggest advantage. The cashflow is great. The profits also, you need that for any business. But if you don’t have that passion and love for doing it, you got, you know, don’t get into anything, especially not rental, because they’ll be tough days.
Sandy Mackay [00:43:39] That’s awesome. Those are great, good perspectives there and insights. I think really the ultimate, the only real kind of downside at the end of it is you’re selling the property, right? So you’re letting go of a maybe an asset that you really liked and you’re kind of forced to get rid of it. But you know, there’s so many benefits on the on the other side of it as well, right? So it just depends on what your goals are, right? Yeah.
Alfonso Salemi [00:44:01] Think about think about leasing a car, right? If you got like the brand-new whatever cars out there, you lease it for three, two years or three years. You have to give it back or buy it. But then you go get the newer version right and when you bring back the lease. So a lot of our investors now are on their second and third cycles of three-year rental programs that have multiple properties, so they’ll sell back that property, know, keep whatever their initial investment or, yeah, initial investment was and now investing some of the profit into another deal and kind of going on. And so, yeah, a little bit. I agree. Yeah, selling your property. That’s why I know there’s other parts of our portfolio that are long term and holds. But yeah, they’re using that rental kind of almost like as a lease, like if it was a lease for a business vehicle where you’re driving around a lot right here, you now bring that one back and go get the newer version right.
Rob Break [00:44:50] And it’s probably pretty exciting. I mean, with four hundred on the book still right, you’ve got, well, we lost Sandy there. But I’ll continue for now.
Alfonso Salemi [00:44:58] OK, you’ve
Rob Break [00:45:00] pretty much got like, you’ve got closings every, you know, once or twice a month. That’s got to be pretty exciting, too.
Alfonso Salemi [00:45:08] Yeah, yeah, exactly. Now with that, with the business lifecycle getting a little bit more mature now, we’re selling back properties and buying more properties. So I think it was last week or two weeks ago we had actually seven transactions in one week. We bought three new properties and we sold back four to the tenant buyer. So that’s all-in-one week. And that was kind of like a company record for us in seven in one week. Yeah, it’s fun. There’s a lot going on. That’s why the team needed to grow and get bigger because a lot more moving parts now as we finally kind of streamline our exit to our clients, right? Because we were like I said, we were great at starting the rent to own and getting into the program. And then now the first few that were successful that we sold back were like, we need to build a process for this as well, right? Selling them back to the clients and seeing that, yeah, it is exciting. Definitely Rob.
Rob Break [00:45:57] Yeah, it’s exciting for you, exciting for the investors and exciting for the tenant buyer. So I mean, look, it’s three birds with one stone.
Alfonso Salemi [00:46:05] Yeah, yeah, that’s right.
Rob Break [00:46:09] OK? I wanted to ask you, you know, sometimes we’ll ask people this what would be like a piece of advice or a quote or something like that that’s always stuck with you and that’s helped you through your real estate investing journey so far?
Alfonso Salemi [00:46:25] Yeah. Yeah, there are. There are so many and with the rent own industry in general, like I know, we know a lot of people that you know, Dunford’s owns and close friends that have done stuff. And I think it’s there’s one thing that Henry Ford said, and he said, you know, whether you think you can or whether you think you care, you’re right. And it is it is having that mindset of whether it is rent to own, whether it is networking, whether it’s birth strategies, whether you got to believe it first to do anything, you have to believe that you can do it right. So I remember I, you know, for a long time, I had the mindset that’s not for me or, oh my God, that guy has 100 properties. I can’t do that. I’ll just do five. And it’s really believing that you can do it and believing what you want to do, right? It’s great that, you know, there’s this many properties and people talk about that many doors and I have this many rentals and this many people and all that kind of stuff, that’s all great, but really understanding. Why, why you want to why that is all there. And if you want to do all that right in deciding what, what the lifestyle, how you want to go about doing that, so being really secure on that, there there’s a few, there’s one I always end of every presentation was that Napoleon Hill that you can succeed quickest by helping others succeed? I’m paraphrasing that. But that’s the that’s the joy that I get out of doing the podcast, that of helping tenant buyers, new investors, experiencing investors, listening to podcasts, right, listening to you guys that you guys are of the same ilk, right? That you guys are out there helping interviewing guys like me on a, you know, on Wednesday morning, just chit chat and hanging out so that other people can listen to this and creating fresh content, new stuff so people can hear something. And I always say, if I can help somebody like just get one inch closer to their goal or help them, you know, at least at a net neutral, I don’t want to set them back. I want to get them at least one a little bit closer to their goal or on some of the things that they want to accomplish. That’s what inspires me. And I think the more that you help people, you’re going to get all the things that you want to achieve. And those are some of the things that I live by. And you know, you can tell them whether it’s realtors, investors, tenant buyers that they don’t have the best intentions sometimes. And it’s just about a transaction or it’s just about getting paid or, you know, pulling one over something like that. And that’s great in the short term. Not even that great anyway. But it’s like it’s not long lasting and sustaining, right? So that that’s the stuff that I kind of live by is don’t do it just for today. Is it going to be good for tomorrow or the next week, the next year, the next five years? And do those things that you need to do to properly prepare for all that?
Rob Break [00:48:59] And I think you’re right, and when you go when you dig into really what that what that Henry Ford saying means is that, you know, you were talking about how there were so many people telling you, oh, it’s too risky, whatever at the beginning, like, you can choose to listen to those people and take the safe route and go, Yeah, they’re probably right. Maybe I’ll just, you know, I’ll continue to work for ups here and all, and everything’s good here. Why would I rock the boat? Yeah, they’re right, you know. Or you can believe that there’s something more for you out there and build something like you’ve built, right? So and mindset is just one of those things where it goes hand in hand with real estate. So well, and I think that that is one of those things that encompasses it, you know, perfectly.
Sandy Mackay [00:49:43] Yeah, yeah. Thanks for sharing. That’s why most of the books always start out with. That really serves the little mind set pieces usually in there just to set the tone because it is it is really, you know, it gets over, not doesn’t get over set. It gets said a lot, but it’s totally, totally true. And I don’t think that’s going to change that. But great quotes there love. That’s what is what can we look forward from you in the future? What are you up to for your businesses?
Alfonso Salemi [00:50:09] Yeah, absolutely. So as we continue to grow jack properties, we want to still hit over 200 rental homes by the end of this year or two hundred and twenty, so that we’ve been still trucking along throughout the throughout the pandemic and bringing on that as many as we’d like. But we’re still going to go do that and grow the team and help more tenant buyers, help more investors, help more realtors, mortgage brokers to and families own their house, right? So to continue to continue to grow the JAG team and grow that business for the right club, it’s getting to grow the online community and have that. That’s part. There were people. It’s a trusted resource where people can go to get information, knowledge, mindset pieces, the things that they need. Everybody needs something a little bit different. Sometimes we all need the same thing. Everybody needs a lawyer to close a real estate deal, right? So we want to have a lawyer there. But some people need mindset. Some people need strategy, some people need encouragement. So to have that there and yeah, and to continue to redefine how, how to how to live, how to live a purposeful life and helping other people and what that looks like, right? Sometimes where I think we get lost in doing, doing, doing, doing and then all of a sudden, we’re like, whoa, what is all this and kind of transition? So that’s a big thing up at the college is we’ve taken some time and just really thinking about who are the people that are going to be part of our business, part of my own personal life relationships moving forward, those types of things and building stronger relationships with the people that we have already in those so looking to do that, yeah, continue to do the podcast. I want to I have a goal to kind of do my own little side spin off of the show called Alfonzo asks. So, you know, just asking, you know, quick hits little things like the tips of advice. Again, more ways for people to connect and get. Get that. And yeah, you guys do such a great job on doing that as well, too. So I appreciate you having me on. Yeah. And just sharing my story and my info and hopefully today, yeah, it inspires somebody to go and do what they want to do.
Rob Break [00:52:08] Well, I definitely think it will. And thanks very much for joining us today. Appreciate you taking the time out of your relaxing little getaway there that you’re at. So we’ve enjoyed all the info that you’ve gotten. I’m sure lots of people are going to take this and learn from it as well. So thanks again.
Alfonso Salemi [00:52:24] Awesome. Thank you, guys. Appreciate it.
Sandy Mackay [00:52:26] Best way to get in touch with the
Alfonso Salemi [00:52:28] best way to get in touch is definitely my email address. It’s Alfonzo Alf, an esco at JAG Properties, JAG Properties dot com. Check out the website. Check out the right club. There’s Yeah, if you can’t get in touch with me, you’re not trying hard enough. So I promise you definitely reach out. Love to talk real estate. And yeah, let me know what I can do to help.
Rob Break [00:52:50] And you guys know the drill. All of his contact info is going to be in the show notes. So go over there and you can just one click your one, click away. Once you get to that point and you’ll be in touch with Alfonso. So Sandy, how can people get in touch with you?
Sandy Mackay [00:53:04] Yeah. Two eight nine three eight nine six eight four six. Feel free to reach out or Sandy at Macquarie Realty Network dot com
Rob Break [00:53:10] and you can reach me at Rob. Mr. Breakthrough Okay. Thanks everyone for joining us again, and we will see you next time. Have a good one.