Creating $5,000 per month in passive income, VTBs and JVs with Edna Keep

Creating $5,000 per month in passive income, VTBs and JVs with Edna Keep
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Table of Contents - Creating $5,000 per month in passive income, VTBs and JVs with Edna Keep

Podcast Transcription

George El Masri [00:00:00] Hello, hello, George El Masry here, well-off podcast, thank you for tuning in. I interviewed Edna Keep this was my first time having a conversation with Edna, but it was truly full of information and I really enjoyed all of her knowledge. She's been doing this a long time. It was so cool to hear about the different strategies that she employs. So for those that don't know, Edna is a multiunit investor. She was telling me her story about how when she started, she had a goal of buying six duplexes in one year. And then the person she was working with just said, why don't you go into tumults units? And then she had to make a complete mindset shift in order to be able to get to that level. So we talk a little bit about that. We talk about the mindset shift mindset shifts. We talk about the five step investor attraction system. We talk about vendor take backs, how to make deals work multiunit specifically, and how to get financing through CMHC with a high a high ratio mortgage and then get a VTB in the second position. So we broke down the process. How do you negotiate that with the sellers, especially given the seller's market that we're in? So if you're into multiunit investing and you want to figure out how to get into a deal without putting so much money into it, by reducing your initial investment, there's going to be lots of good stuff in here for you. So I hope you enjoy if you are interested in connecting with me to talk about multiunit investing in Niagara. So we're talking about, well, in St. Catherine's, I do a lot of marketing there, so I'm always looking for opportunities. I'm happy to connect with you to discuss how we can work together. You can go to Well-off Dossie and then contact me through there and you can also download some free reports by going to Well-off Dossie for its last report. And finally, one last thing I want to share with you. If you've been listening to the show and you enjoy it, I would ask you to leave us a review, especially on the Apple podcasts app. So if you can log in on your iPhone or Mac or whatever Apple product you have and leave us a review there that would be greatly appreciated. Thank you for sharing this with your family and friends. I hope you're enjoying it. And here is the episode. Welcome to the podcast, where the goal is to motivate, inspire and share success principles. I am here with Edna Keep today. And for those that don't know, Edna is a former certified financial planner and she discovered the power of real estate in 2007. Since then, her and her husband have amassed sixty five million in real estate, so their portfolio is worth sixty five million in multifamily and using other people's money. OPM. Since 2014, she's been training and coaching entrepreneurs who want to scale up their real estate business into multifamily with other people's money. So, Edna, welcome to the show.

Edna Keep [00:02:40] Thank you so much. It's my pleasure to be here.

George El Masri [00:02:42] Great. So I like to start off. Edna, I'd like to ask you a little bit about your childhood, where you grew up in one or two things you remember from then.

Edna Keep [00:02:49] Sure. Well, you know, I was born and raised on a farm north of Midlake, Saskatchewan. So northern Saskatchewan. I have six brothers and one sister. So we always had a very full house. And you know what? I always had a lot of fun with my brothers. My sister was pretty much grown and she had her baby before I was born. But we had a lot of fun on the farm, you know. We did. We did. We played a lot of sports and we had our own team so we could even do it without having friends over.

George El Masri [00:03:19] Oh, that's cool. Is it? Russ, I don't know if you know Russell Westcott as I did. He's from Saskatchewan too. Yeah, he

Edna Keep [00:03:26] is. Yeah, yeah, yeah. He moved away though and. Yeah.

George El Masri [00:03:30] Oh yeah. That's cool. So you get a lot of snow out there or is it, you know

Edna Keep [00:03:34] not always where we're from because we're in we're just outside of the city of Regina. So it's southern in northern Saskatchewan where I'm from we get lots. But this year we actually have a decent amount.

Edna Keep [00:03:46] So my my husband and my kids really like it. So they've been able to write from the yard, but

Edna Keep [00:03:54] most of the time they have to drive, you know, three, four hours

Edna Keep [00:03:56] to really get the decent

George El Masri [00:03:58] snow. Oh, OK. Cool. So I'm just curious because I've never actually been to Saskatchewan. What would if I were to go visit, what would I do? What would be something that would draw me in?

Edna Keep [00:04:08] You know, it depends what time of the year you come. But, you know, in Saskatchewan, we have some of the most beautiful lakes around, especially northern Saskatchewan where I'm from. So if you're if you ever come, that's what I would recommend, is, you know, go get a

Edna Keep [00:04:20] campsite or or a cottage even and

Edna Keep [00:04:23] spend some time with the lakes because, you know, fishing, water, sports, boating. It's just beautiful up there.

George El Masri [00:04:29] Cool. Cool. That sounds good. Yeah. So is there anything like just a memory that stands out to you as a child that you'll never forget and you just think about from time to time?

Edna Keep [00:04:40] Oh, well, you know what? Not unless somebody asked me a question, but I really enjoyed being brought up with brothers. You know, we we built forts, we made life

Edna Keep [00:04:50] boats and we played cod, frogs and the SLU like I was a bit of a tomboy. So I always kind of, you know, people say, how do you end up in such a male dominated? Industry, I said, I think it's because I was raised with six brothers.

George El Masri [00:05:03] That makes sense. That makes sense. Are any of your siblings investors as well?

Edna Keep [00:05:07] Yeah, my brother,

Edna Keep [00:05:08] just older than me, has quite a few rental properties, and he's done a lot of fixing and flipping as well. And then another brother has bought, you know, when the U.S. had their, you know, kind of strange market there back in 07, 08, he bought a few properties and they still own to this day rent to Mount Phenix and Las Vegas are the areas that we bought in.

George El Masri [00:05:30] Good for them.

Edna Keep [00:05:31] Good for them. But not to the extent.

Edna Keep [00:05:33] Not to the extent we have. Yeah.

George El Masri [00:05:35] Yeah, well, that's great. OK, so tell me a little bit about your story. Sixty five million in real estate assets. That's pretty impressive. How did you get there? You said you started in 2007. What was that journey like?

Edna Keep [00:05:47] Well, you know, we took some education classes and how we kind of found that was

Edna Keep [00:05:52] I had clients coming in and I

Edna Keep [00:05:55] sold mutual funds. So they were all invested mutual funds.

Edna Keep [00:05:57] But they started telling me that they were doing real estate on the side and bought a house or, you know, this and that. And I just had been listening, of course, in our area. And that market, the market was pretty good.

Edna Keep [00:06:10] And so we decided to take a class, we took a class, and then it ended up being a weekend class. And then we signed up for the year

Edna Keep [00:06:16] long program with the rich dad, poor, that group. And, you know, it really started from there. It really woke us up to what was possible. I wasn't even aware, aware of real estate as an investment until that point. You know, it was, say, when you're trained by one group and I was trained by mutual

Edna Keep [00:06:32] fund people to sell mutual funds,

Edna Keep [00:06:35] your blinders are on. And some people, like I learned after, you know, they were dabbling in other things, but I very much had the blinders on for a lot of years. That was the only

Edna Keep [00:06:44] investment we did, the only investment we sold.

George El Masri [00:06:48] Yeah. And obviously, to go for mutual funds to invest in real estate. I know your story involves multiple units. How so? How did you get into multiunit? Did you just start off with single family homes or did you just dove right in?

Edna Keep [00:07:02] We started with single family homes because, you know, what I find is that most people train most in training out. There's about single family homes. It's it's kind of a natural progression. And but we learned very early on, actually, we owned 50 doors within 18 months of starting. And the the last purchase was a twenty four unit. And that's when we basically doubled our portfolio with one purchase. And it was like, wow, that that was pretty amazing to me. You know, it was like our cash flow increased a lot. It was no harder to get the financing for the multifamily

Edna Keep [00:07:36] as it was to get the

Edna Keep [00:07:38] financing for the houses. And then shortly after that, we actually got cut off from houses. We couldn't even get financing for houses anymore. So that's what I find is a lot of people get cut off on houses and if you still want to grow, you pretty much have to move into multifamily, right?

George El Masri [00:07:51] Exactly. Do you still think that starting with single family homes is is a good thing to do? Because I know I believe one of the things you teach people is how to skip the single families and go right into multi units.

Edna Keep [00:08:04] Yeah. You know, we didn't know it was possible when we started.

Edna Keep [00:08:07] And I still remember the very first conversation I had with the realtor and he said I was telling

Edna Keep [00:08:11] him my goal. I want to buy 12 duplexes that year. And he said, I don't want to just buy a multifamily. And I go, why can't he? I said, I don't even own

Edna Keep [00:08:20] enough houses yet. Like, I honestly thought I had to

Edna Keep [00:08:22] own, like, kind of like Monopoly or something. I thought I had to own a certain amount before we could scale up. Like, I think a lot of people think I got to build my equity in houses so that I have equity to possibly buy into multifamily. But, you know, if we were to start over today, we would go straight into multifamily. And that's and I've had several students that have done that, just go straight into multifamily, skip the single families altogether. And there's a few benefits to do that. One is multifamily, is

Edna Keep [00:08:51] treated like a business. So it's finance like a business.

Edna Keep [00:08:53] If the numbers don't work and they also don't look at you so much, they look at does the building cover itself? Investors like it better because it's actually

Edna Keep [00:09:03] treated like a

Edna Keep [00:09:03] business. And you can talk about it like a business and the numbers are larger. So it makes more sense. And there's more than one person on the mortgage usually, as opposed to with a single family home. It's one person and one person only or maybe a couple. And the other thing I like about it is, you know, you

Edna Keep [00:09:20] got 12, 14, 24 people paying your mortgage off for you. So you get one or two vacancies and it's not a big deal. But you do that with the House and it's a big deal.

George El Masri [00:09:28] Yeah, of course. Of course. So I know part of what we were going to discuss was your five step investor attraction system on that note, because obviously for somebody who's starting out, if they want to get into multiple units, then either they have to have the capital to do it or they have to learn how to raise the capital. So can we dove into your five step system?

Edna Keep [00:09:48] Sure. Well, first of all, I think what it takes is a mindset shift because dealing with larger buildings, larger amounts of money and other people's money especially. You've got to have a certain level of confidence that you really know what you're doing, and I think that's why a lot of times people start on the single family as they want to, you know, get comfortable with the whole process initially to be able to figure it out before they move on to anything bigger. So the mindset shift is is a big thing. And and we spend a lot of time on that because that's probably the biggest thing, because even even now, when people approach me and they go, well, you know, I'm kind of thinking multifamily, but, oh, do I have enough houses?

Edna Keep [00:10:28] Do I have enough experience? So the biggest thing is that mindset

Edna Keep [00:10:32] shift and then, you know, just just thinking about going bigger so and going big makes makes a big difference. You buy 18 doors. It's a lot more money that you're dealing with investor capital. You have to deal with there's, you know, different risk levels that you have to deal with, stuff like that. And then the other thing is really building that confidence, because another thing that people say to me all the time is, you know, well, if if people are you know, if they have the money, why wouldn't they just do it themselves?

Edna Keep [00:11:04] I know I would if I had the money, why wouldn't I just do it myself?

Edna Keep [00:11:08] And the fact is, again, there's a lot of people out there that would love to invest in real estate, but they maybe are already in a job that they love or make really good money at. So they've got the money to invest in it. But no time or interest, you know. But once you start educating people on what's possible in the real estate world, that changes as well. Because, you know, right now the the biggest portion of investments out there in stocks and bonds, mutual funds. So why is that? Well, that's because, what's more, a majority of people sell, you know, and and when you start talking to people about real estate, there's a lot of people that would love to but don't know even where to begin. So getting that confidence to say I have a good deal, I understand. I know that this is a good deal, that that's another big step. Because if you go to

Edna Keep [00:11:57] a potential investor and say,

Edna Keep [00:11:59] I'm just starting and brand new, I don't know what the hell I'm doing, but I want to use your money to do it.

Edna Keep [00:12:04] You know, they're just going to laugh at you, you know, like, I don't think so. It doesn't make any sense.

Edna Keep [00:12:10] So really building your own confidence to get to the point where you understand that it's a good deal and that you can actually make money with the deal because I mean, things can go sideways. You got to know what you're doing, not just in the purchase, but managing it long term because we're more into the long term buy and hold. Even if we fix it up, we keep it so we don't don't sell it off. And then there's tax reasons and different stuff like that. Sure. And then how many did I cover off there? Three. I'm just trying to think so. So the the the five the five steps that I talk about is also finding and analyzing the right deal because that makes a big difference to you, can't you? Not every deal is as it's presented. As a matter of fact, the majority of the deals as presented are not even true. They make up a

Edna Keep [00:13:02] proforma that the numbers are not even real. And so there's a there's a

Edna Keep [00:13:07] step that I show students how to, you know, go ahead and make the offer on the property because you're not going to get in the building and get all the details ahead of time like you do with the house anyway. So finding and analyzing the the deal is really important. Also finding or analyzing the area. So once you have a deal that you think is going to work, you also have to analyze the area because, you know, the numbers can make sense on paper. But you have to decide if the headaches you want to deal with in some of those areas you're working in aren't worth the numbers. Sometimes people like to buy newer property because they attract more the professional tenant, not professional tenant, professional.

Edna Keep [00:13:47] You want to stay away from the professional tenants, but then

Edna Keep [00:13:51] there's and then there's you know, there's a lot of people that really cater to social services. We don't I just don't like the whole mentality or the, you know, kind of attitude. I didn't know how to take care of your place is so much a professional person. Somebody who's a homeowner in the homeowner comes from a home owner. Family is much more apt to know how to take care of your property as opposed to somebody who's been a renter their whole lives. So so that's another really, really big one. And then understanding, too, that every you don't find the deal necessarily lets you create the deal and you create the deal by, you know, first of all, understanding what the heck you're doing. And then, you know, being able to to buy deals with other people's money really gives you an infinite return as long as you're making the money for the for the investors and stuff like that. So so really understanding that.

Edna Keep [00:14:46] And when when you look at it, that's as

Edna Keep [00:14:49] the whole package is really is the mindset around becoming a multimillionaire million dollar real estate investor is what's going to take you there.

George El Masri [00:14:59] Absolutely, so if we go back to some of the things you talked about here, that one of the first things you mentioned was a mindset shift.

Edna Keep [00:15:07] Biggest one.

George El Masri [00:15:08] Yeah, the biggest one. And it sounds like what you were referring to was knowing the understanding the numbers, knowing the deal and presenting yourself with a lot of confidence. Is there anything else? What are some of the common things that beginner investors might believe in that that may not be or that require the biggest shift?

Edna Keep [00:15:31] Well, one is that they can do it, you know, I still have a lot of students that say like much

Edna Keep [00:15:35] like we thought at the initial, well,

Edna Keep [00:15:37] I don't have enough houses yet or I don't have a house yet or, you know,

Edna Keep [00:15:40] I've even taken to a couple students that didn't even own their own house yet and helped them buy like seventy two units within a couple of years. And I still remember I had to laugh because therefore I need to get the utilities in their name, you know, which you have to do when you take ownership of the building

Edna Keep [00:15:56] and they're going like you own one unit in the building,

Edna Keep [00:16:00] like the people at the energy and power couldn't even understand what they're doing.

Edna Keep [00:16:05] No, I own the whole building. And you don't have any other utilities in your name ever before? No.

Edna Keep [00:16:10] We still live at home with their parents. So, you know, that was a mindset shift for those guys. They first initially started looking at

Edna Keep [00:16:18] a single family home in a cheap area of the city because they had to think about the amount of money that they were going

Edna Keep [00:16:23] to use. And when they realized that they couldn't even get out of the vehicle in the evening, they did during the day. But in the evening, they were scared to they might think this is probably not an area we want to invest. Right, right. Well, that's right. Yeah. Yeah. So so that's

Edna KeepĀ  00:16:39] what I mean really about a mindset shift is you have to realize it's doable and then you have to understand how and and why it's doable. And then that's that's where I covered it off into. The rest of the thing is, is why people want to invest with you where you find the money. And sometimes you have to teach people even that they have money because, you know, a lot of people don't realize that equity in your own home or equity in a business could be accessed as money they could invest. A lot of people don't realize that.

George El Masri [00:17:09] You're right. One of the things that I actually read I before we did got together on camera here was the idea of creating five thousand dollars of income. And I forget what the timeline was that you put specifically. I think it was something like 18 months or so.

Edna Keep [00:17:27] We did ours in 18 months. Yeah.

George El Masri [00:17:29] Yeah. So can you tell us what the strategy would be for somebody right now who maybe has a couple of properties and they want to get to that five thousand a month in cash flow?

Edna Keep [00:17:40] Absolutely. And you know what I'm going to use there, because we did it thirteen years ago. We did in eighteen months. But we started the first half of them were houses. So it took a little longer because, you know, the doors kind of what we were getting. And so with half of that, we had, you know, 2000 a month or whatever. And then we moved to the multifamily and we ended up with another twenty five hundred a month. But I have students right now, just to give you an example, within six months of starting with me, they took possession of their first 12 unit apartment building. That cash flowed them three thousand a month. So basically one or two buildings like that in a year is going to give you what you need. And you have to be willing to look in the areas that's going to give that to you, because there's a lot of areas out there where, you know, real estate's a decent investment, especially, you know, in Ontario. There are a lot of people come to me from Ontario. They've got all this cash that they built up as equity in their home. And they want to do something, but they can't buy anything in Toronto that even makes sense. So they got to look at outlying areas. I had one realtor actually from Ontario, from Toronto, and she bought her first nine unit apartment building just outside of Toronto, about an hour when she bought it, seven of the nine units were vacant so she couldn't get traditional financing. So we worked with the vendor and got vendor financing, which, of course, at the beginning they wouldn't agree to it. But once they understood that we couldn't get traditional financing because it was vacant, seven out of the nine were vacant. Then we educated them on the process. She bought the building, got 900000 vendor financing, put 200000 down, fixed up the property and got it fully rented. And she's going to make fifty five hundred a month cash flow in that one little unit building. Yeah, that's great. Yeah. So and that was her first deal and she started with me I believe in June. She took possession of that property in December and that was last December, not last December. December twenty nineteen. Yes. And it took her fourteen months to get them all fixed up and refinanced. So it took her fourteen months to get to this point, but two years and fifty five hundred dollars a month cash for her first year.

George El Masri [00:19:53] Yeah I think I know the person you're talking to. Oh yeah. Pretty sure I do. So that's Cartera. Yes. Yes sir. Yeah that's awesome. Yeah. That's I love hearing stories like that, especially knowing her story and all the things that have happened. I mean, I don't know it that well, but I know a little bit about it. Yeah. Yeah. Well, you

Edna Keep [00:20:11] know, it was a really interesting story because a lot of people won't take on a vacant building because they can't get it financed traditionally. And and it was just a different way of thinking. And and you cannot go in because I've seen people do it every time, you know, brand new investor and they're going, I want you to finance your own build. Well, you can't even you can't say it like that, there's just a certain way you have to say it to where it makes sense to them. So we get a lot of vendor financing that I've heard other people say. I tried get vendor financing on that same building you guys got. How did you do that? You know,

Edna Keep [00:20:46] my student in Saskatoon, she said she told her story after she was sharing it in like a webinar format

Edna Keep [00:20:53] to attract investors,

Edna Keep [00:20:54] which is something I did. And she said after a bunch of other real estate investors reached out to her, how the

Edna Keep [00:21:00] heck did you get a vendor take back? I tried on that bill and they wouldn't even look at me well, because they didn't know how to do it properly.

Edna Keep [00:21:07] So that that's a big deal to

George El Masri [00:21:09] actually dove into that, because I've I've taken some workshops on vendor take back, so I know all the semantics. I haven't done one yet. I understand very well how they work, but I do kind of get that sort of reaction that you're saying when I do approach somebody and ask for a vendor take back, they often don't understand what it means. They're confused. They want to stay away from it because they just don't get it. So it makes it a bit challenging sometimes to to work with it. So I'm just curious, are you able to share a little

Edna Keep [00:21:39] you know what? I'll tell you the live deals, the two ones I just talked to, I'll tell you exactly how it happened. So the the couple in Saskatoon know that first you get the building under actually, they all know you get the building under contract first. You do not go in ahead of time and say,

Edna Keep [00:21:56] I want you to hold financing as

Edna Keep [00:21:58] part of your offer. You don't do that. You make a straight out offer. Then in in Amanda's case from Saskatoon, she approached them about vendor financing. They did not know what it was. They said they didn't know what it was because of the terminology and stuff. But in talking to them back and forth a few different times, she actually learned that back when they bought those properties in the 80s, they actually got vendor financing, but they didn't know that. That's what it was called. All they knew, you know, so so a lot of it is just being able to explain what it actually is and what it actually is. Is the seller holding some of the financing? Yes. And then so so that's part of it. So being able to just explain it. And so she got it under contract, start working on financing. It was a while before she asked for the vendor financing, but she built the conversation and slowly, you know, what are you going to do when you retire because this couple was retiring? Some people it's not an option because they're going on to buy more buildings and they need their cash. But in this case, the couple was retiring. They owned the building for twenty years. It was the last of a few that they were selling. And and so just in the conversation, she learned that they were just going to retire and travel and and she asked them, and you know what? When you get your money, are you just going to leave it in a bank or what do you thinking? Well, you know what? We haven't really even thought that far ahead. But, you know, real estate investors are predisposed to invest in real estate. So if you think about that, what are they going to do when they get their money? Are they going to put it in the stock market? Yeah, not likely because they don't like the stock market in the first place. That's why they got in real estate. Do they like the returns, the safety maybe offered in term deposits or GICs? Yeah, but not the return. And when they're used to a decent return from their building, all of a sudden that dries up and something where they were getting a decent monthly income. Now there's there's next to nothing. So just just being able to explain that understandably and then offer them a decent rate of return and then how how also they need to get it back. Because if you just give them as. Yeah, I just want to keep your money forever.

Edna Keep [00:24:09] Chances are slim they're going to do that as well.

Edna Keep [00:24:11] So you've got to give them the plan on how you're going to pay them back, you know, so and in most cases, it's when you refinance the property out in five or ten years that they get their their principal back.

George El Masri [00:24:24] Right. OK, so just to kind of recap here a little bit, and I'm assuming that in this in this example that you were just referring to, this was an off market property. I don't think that there would be another realtor involved in this.

Edna Keep [00:24:37] Yeah, this was off market. Yep.

George El Masri [00:24:38] OK, perfect. So so you do an offer first with just like a due diligence condition or whatever. No mention whatsoever of the VTB and then you get it under contract. I would assume somewhere between 30 to 60 days would would probably be typical in that situation,

Edna Keep [00:24:55] that you go back to them,

George El Masri [00:24:57] know that you'd get it, you'd get a due diligence condition for a period of that sort of thing, or

Edna Keep [00:25:02] 90 to 120

George El Masri [00:25:03] days, 90 to 120 days. OK, and in that period of time, at some point, maybe not so early on, maybe at the 60 day mark or something like that, you would approach them and say, hey, I've tried getting financing from the bank and they're saying they won't do it because of the vacancies or because of this or that. So I thought of a solution that could work. And you explain the vendor take that, because that's kind of what has worked,

Edna Keep [00:25:28] except let's keep that. Let's keep the Ontario and the Saskatchewan one apart, because there was two different scenarios there, so the Saskatchewan one was full and and she was able to get 85 percent financing at CMHC. So when then she came back to them and she said, so I was able to get eighty five percent financing through CMHC. But where I'm struggling is that my my investing partners, I'm a little bit shy on what I can get there. So I'm just wondering if you guys would be open. And then she explained how it worked. And at first it was like, well, you know, yeah, we'd rather you just get investors. And then she came back again. And, you know, in the long run, she negotiated a 13 percent vendor financing on that deal.

Edna Keep [00:26:15] So 85 percent from the CMHC,

Edna Keep [00:26:18] 13 percent vendor

Edna Keep [00:26:20] financing. So she said do two percent and closing costs to get the deal done.

Edna Keep [00:26:25] So that one was fully operational, turnkey property. There was not not much work to be done. They kept some reserves to the side just in case, because there was a couple of people have been there really long time and they would want to evict when they moved out or

Edna Keep [00:26:40] passed on or whatever happened, they would need to update the units in

Edna Keep [00:26:44] there. But so so that's the one side of it. And really, at that point, it was like, you know what, CMHC is going to give us eighty five percent financing when the when she explained how that works, like like getting CMHC insured loan is a really good loan, you know, because you've got to go through extra stringent, you know, diligence on yourself. You're building everything else to be able to qualify. So them knowing that in her explaining it in a in a way that they could understand it is what allowed her to get the vendor financing on it. And it was like they they could they showed them how the building could afford to pay them. And like I said, they were they were gone. They were wanting to retire. They didn't want to do the work anymore. They were willing, you know, ready to jump in and start managing it, get they they they could show them that the building could afford to pay them out of the cash flow as well.

George El Masri [00:27:41] Awesome. Is that it was this an example that happened a few years ago or is this a recent example recently?

Edna Keep [00:27:47] At last, she took possession of that property last March. So nine, nine months ago or almost, you know, ten months ago now because it's ended early February. But she she took possession late March and April. They're also they're working on their second unit right now. Second twelve units can pay about three thousand a month cash flow, too. But so so that's the one way. And then let's talk about the one in Ontario. So that one was vacant. We knew going in that there's no way we could get financing on it. But if you try to tell a seller that up front, they're just going to think that you're using that as a ploy. Right. So she got under contract, built a bit of a relationship with them. The couple who owned the property had ended up in a nursing home, actually. So the son was looking after things. He didn't want to be looking after things. And she said she went back and she said, you know, I can take possession, give you a two hundred thousand nonrefundable deposit, but I need you to hold financing because I can't get financing on a seven of the nine units vacant building and I don't have the cash to buy it outright. And at that point, it was like, oh, well, that makes sense because because there was a an actual reason, not just I want to use your money. There was a reason. And then she also had a plan. She said, so I've got a renovation team pull together. I'd like to keep the vendor financing in place for fourteen months because I think that's, you know, I think that's how long it's going to take me to get it renovated and apply for CMHC financing. And that's exactly what happened. And I talked to a couple of weeks ago here and she had she bought that for one point one, put a two hundred thousand nonrefundable deposit and my numbers could be a little bit off. But this was the plan at the beginning. But two hundred thousand and renovations, she was able to refinance it at one point eighty five million, fifty five and fifty five hundred cash flow. So, again, it's just, you know, you have to almost train your seller on why it has to happen. It's not just that just because they want it, just because they want it. You know what I mean?

George El Masri [00:29:49] Yeah, of course. That's amazing. That result is really, really good. When you talk about having a plan and sharing that with the seller, is that something do you create like a business plan, as you put it, on paper, or is it just something that you communicate with them verbally?

Edna Keep [00:30:05] You know, we put it on paper because that vendor financing stays in like first mortgage position. So it's like the and plus she given two hundred thousand dollar nonrefundable deposit. So if it didn't work, they were just two hundred thousand dollars ahead with probably a partially renovated building. So how could they really lose. So you have to make it a real no lose situation for them to write.

George El Masri [00:30:30] OK, that's that's interesting, I've never heard of anyone doing it that way, but I like the way I like the way you've structured that. So, yeah, it's obviously you've done this before with clients and it makes sense to do it that way. I've never actually heard anyone say before that you shouldn't approach a seller directly with the vendor or take back. You should get it under contract first. It makes sense because you put down a deposit, you probably do your inspections and you might need to do your environmental test. So you're committing to this process and you're you're hoping that the seller sees your commitment and works with you at that point? Yeah.

Edna Keep [00:31:08] Yeah, exactly.

George El Masri [00:31:09] Yeah. And so the other thing was going to ask you, you mentioned CMHC. Eighty five percent loan to value and then in the first example, a 13 percent VTB leaving her with only basically two percent out of pocket, plus closing costs. Is that something that happens with CMHC? Because I don't believe any other lender, from what I know, would allow a VTP in second position, bring you up to 98 percent loan to value.

Edna Keep [00:31:35] You know what? That's the only time I've seen it happen, because I even told my student, I said, you know what?

Edna Keep [00:31:40] Even though you negotiated 13, there's probably a good chance you're only going to be able to use five percent

Edna Keep [00:31:45] of it because the lenders and CMHC are going to want to see you have 10 percent in the game,

Edna Keep [00:31:51] which was typical because, you know, we've done it before. So, yeah, with her specific deal, she ended up with 13 percent. And I think part of it was because they did have such a strong deal to make. The deal was really strong, you know, so I wouldn't say it's typical. No, definitely not typical. I haven't even got a 13 percent vendor take back on.

Edna Keep [00:32:10] You know, we've got 10

Edna Keep [00:32:12] actually, and then done in a creative way because the lender would only allow five. But but yeah, she got thirteen and the and the lender was aware of CMHC was aware it was all up front. There is no nothing hidden. She just said I negotiated it, can I use it. And right up until almost the end, she didn't know if she was going to be able to use it. Then they allowed her.

George El Masri [00:32:34] Awesome. That's so cool. So it was a 13 percent VTB in second position, I'm assuming. Yes. Do you happen to know? I don't know if you can share this or not, but do you know what the interest was on the VTB?

Edna Keep [00:32:46] I think the interest was six percent on the vendor take back and her CMHC financing was one point sixty around one point five, one point six thirty five year amortization.

George El Masri [00:32:58] Wow. Beautiful. And the only way that I can imagine a deal like that would work is if there is substantial cash flow, right?

Edna Keep [00:33:06] Yeah, exactly. Had to be able to pay everything. And it did you know, she had she had really good insurance. She she has really, really got a sweet deal there. And, you know, you don't ever you don't always get those every day. But but even just understanding it and going after it is a mindset shift.

Edna Keep [00:33:24] You know, like we talked about that quite a bit before it actually transpired. I've even have had clients who,

Edna Keep [00:33:30] you know, right up until like a couple of weeks before they were supposed to remove conditions, they were kind of saying, I'm not sure this is going to work. I'm not sure this is going to work. And some of the mindset

Edna Keep [00:33:40] exercises that I give the students is, you know, you

Edna Keep [00:33:44] whatever you focus on, you're going to get. So let's change

Edna Keep [00:33:47] that focus, too. Absolutely. I'm going to get this. Absolutely. I'm going to get this. And things just happen. You know, in this one particular case, I'm thinking a six unit in Innisfail, Alberta, she was like that right up until the, you know, a couple of weeks. And then she was

Edna Keep [00:34:02] still thinking I might not have enough money raised from my investors. And then between the vendor

Edna Keep [00:34:07] financing, CMHC financing and what the the the magic the mortgage broker was able to do, it all came together at the end. So, you know, just just, you know, you have to be careful

Edna Keep [00:34:18] what you're thinking about, too. If you're always going through life thinking, I can't do that, I can't do that, I can't do that. I guess what? You can't do that.

Edna Keep [00:34:25] You know, so that's that's also part of the mindset shift that people have to start realizing for sure.

George El Masri [00:34:33] I want to I was just thinking, as you were talking about CMHC, how do you suggest going about developing a relationship with a C CMHC mortgage broker? It's pretty like there is a lot of mortgage brokers out there, but very few that represent CMHC or at least not not so many that I know of. What would you suggest doing in that case?

Edna Keep [00:34:56] Well, that's part of building your power team, which is something everybody has to do. Whichever area you decide to work in, you've got to build your power team. So that's one of the questions that's on our questionnaire. Like, do you have experience with CMHC financing? And if you don't, it probably not. Not much good to me.

George El Masri [00:35:14] Right. Cool. So would you just suggest reaching out to your network, seeing who the CMHC contact is that people are working with and then just starting a relationship with that person?

Edna Keep [00:35:25] Yeah, referrals just like any, you know, realtors. We always suggest to our to our, you know, my students that you should be dealing with people on your power team that actually own real estate, you know, so if you could find a realtor that actually owns rental real estate, you can find a mortgage broker that actually owns rental real estate. It just takes everything to a whole new level because they understand it. Same with your accountant, your lawyer. They understand it because they've been through it. And I know everybody wants to help out their sister in law and their cousin and their brand new, you know, blah, blah, blah. But those are not necessarily your best people. I still remember one of my students a few years ago. I was helping her buy a house and and I told her, like, use this realtor that I'm recommending to you because they actually know what they're talking about. Well, she had a cousin or a friend of her daughter's or something. And you know what? She ended up bugging the other realtor for advice because this one didn't know what the hell she was doing. So you it's nice that you want to be your little cousin or your cousin's friend or whatever. That's to your detriment. And if you want to do it, go ahead.

Edna Keep [00:36:36] We had we did the same thing when we very first started. We had a really good friend that helped us buy her house, really liked and wanted

Edna Keep [00:36:43] to help, you know, get him to help us with rental real estate. He didn't understand it. He didn't understand it and lost just a lot of deals because of it.

Edna Keep [00:36:50] So your decision, I say, but, you know, it doesn't really make any sense. Yeah, I know you want to help your cousin, but here when I do this, do it the right way and then just go give them a thousand bucks because you'll save that, not to mention the hassle. And that will give them some money if you really want to do something.

George El Masri [00:37:09] Exactly. Or or the realtor that they're working with could potentially give them a bit of a referral fee as well to to help out the cousin or whatever. Right.

Edna Keep [00:37:19] Well, the thing is, they would they found the deal actually helped them find the deal through a private person, but they wanted to work with their cousin to, you know, do the paperwork, you know what I mean? They're just trying to help them make

Edna Keep [00:37:32] some money, though, so,

George El Masri [00:37:34] yeah, it's understandable. But yeah. Anyway, you're saying makes total sense. Yeah.

Edna Keep [00:37:38] Yeah, we all do it for sure.

George El Masri [00:37:41] For sure. Yeah. We've all been there and I understand it. Yeah. So we covered a lot of things today. I think there is a lot of good stuff in here that I haven't heard from anyone else actually. So I appreciate you sharing that. I wanted to jump into the next section unless there is any any final thoughts that you want to share.

Edna Keep [00:38:01] No, that's that's that's pretty good. Most of most of the ones we work with, we do try to get CMHC financing doesn't always work, but the majority of them, it

Edna Keep [00:38:10] kind of puts puts puts a little bit more peace on you knowing that you've got that kind of coverage on your building.

George El Masri [00:38:16] Beautiful. I love that idea of getting 85 percent and possibly a bit of a vendor take back to to really reduce your initial investment makes.

Edna Keep [00:38:26] Yeah, it makes it a lot easier to buy more and more

Edna Keep [00:38:28] buildings, the least amount of

Edna Keep [00:38:29] money you have to put in and more ownership for you to you know, Amanda, she she could have potentially done that building one hundred percent on her own in the long run. She chose to allow her investor to stay in because she actually had worked on raising capital in the meantime, because she didn't know that was all going to be offered. And in the long run, she could have just did it on her own. But it didn't make sense to let the investor go again. This is something that people need to learn as well. It was a good deal. She could have kept it all to herself. The lawyer had already been introduced to it like that,

Edna Keep [00:39:03] who is also her investor, was a lawyer

Edna Keep [00:39:06] to take it away and say, well, I don't need you anymore, doesn't really make sense either, because he could be a potential investor in three or four or five deals. And so you keep the best deal for yourself and and, you know, maybe the next one's not so sweet. Well, you know,

Edna Keep [00:39:20] that's doesn't give people a good taste in their mouth either.

George El Masri [00:39:23] Oh, for sure. For sure. The idea is to share more with people. There is there is a quote from Stephan O'Neil from his book, which said, I'd rather consumer watermelon and then or sorry, I'd rather. Yeah. Share a watermelon, then consumer group.

Edna Keep [00:39:41] Yes, yes, and that's that's the thing with multifamily

Edna Keep [00:39:45] and I always say I'd rather own 25 percent of four deals than one hundred percent of one two because, you know, different markets, different structures, different things

Edna Keep [00:39:55] going on in the area. So, yeah, it reduces your risk again.

George El Masri [00:39:58] Yeah. And then you can create that system and then just recreate this, this process over and over and and develop those relationships and it just grows from there.

Edna Keep [00:40:06] Yeah, exactly. Exactly. That's right. Gross.

George El Masri [00:40:09] OK, so now let's jump into the next section, the random five. I'm going to ask you five random questions and you just tell me the first thing that comes to mind. Sure. OK, number one, what boardgame do you like the most?

Edna Keep [00:40:21] Kashf one on one. Robert Kiyosaki.

George El Masri [00:40:24] Of course, that's an easy one. Number two, your favorite day of the week. Monday. Monday. Yeah, that's a lot of people's least favorite. I like I like your answer

Edna Keep [00:40:36] because I love my work. You know, I is a nice relaxing day, but it doesn't energize me like going to work does. Yeah.

George El Masri [00:40:43] Perfect. Number three, what time do you normally go to bed? Ten. Ten. It's a good time. Not too late. Not too early. Number four, if you were in a witness protection program, what would be your new name and where would you go?

Edna Keep [00:40:59] Oh, boy, oh, that's a tough one. I never thought of that before, you know what? I would just stay in my own house because I actually don't mind this whole lockdown thing. I love my house. It's my favorite place on Earth, including my office. So I would just stay home and and what would I what was the second question?

George El Masri [00:41:19] What would be your new name and where where would you go? So you'd stay in your home? What would be your new name?

Edna Keep [00:41:24] I'd call myself the housekeeper. I'm just a housekeeper. I'm just a housekeeper.

George El Masri [00:41:30] Well, that's 100 percent protection right there.

Edna Keep [00:41:34] Yeah. No, they no. Live here. A housekeeper.

George El Masri [00:41:39] And number five, what success principal do you live by.

Edna Keep [00:41:44] When, when, when.

George El Masri [00:41:45] When you like it. I know this was awesome. Before I let you go, I'd like to ask you, how do people reach you and what services do you provide?

Edna Keep [00:41:55] Sure. Well, you know, there's a few

Edna Keep [00:41:57] ways to reach me. I'm on Facebook, cochaired to keep my email addresses

Edna Keep [00:42:02] at night and keep Dutko and my website is that Nakib dot com. So those are the three best ways.

Edna Keep [00:42:09] And the the number one service that that I provide is I have a program called Ninety Days to Five K. The premise behind it is

Edna Keep [00:42:17] that in 90 days it's going to teach you exactly what you need to know to be making

Edna Keep [00:42:21] 5000 a month in passive income through multifamily investing. And a lot of

Edna Keep [00:42:25] times that includes

Edna Keep [00:42:27] vendor financing in other people's money. And it does not take you forever. You can have that happen to within a year. We did it in 18 months, but we started in single family home. We started a multi. Sometimes it can happen for you in your first year.

George El Masri [00:42:41] Yeah, absolutely. Are you finding it? I don't know about your market. Are you guys in like a seller's market right now?

Edna Keep [00:42:47] And and, um, and know we're kind of more in a buyer's market right now, like Saskatchewan, Alberta, Manitoba, areas where most of our stuff is. But we also start buying in Memphis, Tennessee recently. And we got doors

Edna Keep [00:43:02] down there at twenty one.

Edna Keep [00:43:04] The last one hundred and seventy eight units we have under contract. Twenty one sixth the door. Wow. Yeah. You can't even buy a parking spot from that in Toronto. Oh for sure. That's cool.

George El Masri [00:43:15] I like that. Yeah. The more I interview people the more I'm finding out that there's a lot of people that are investing abroad, like there's people like, say, in New York City that are investing in in Memphis. And this is not so it's cool to see see all that happening.

Edna Keep [00:43:30] Yeah, well, there's a lot of places where you just can't make it cash flow, you know, even with financing and stuff. I had a lady approached me recently and she had a 12 unit in Toronto valued at two point five million. But she could she had a six hundred thousand mortgage on it. It could only put another 600000 mortgage on it. And the reason is, is because there's no cash for repayment, you know, so the values there. But there's no cash flow. And and for most people that I talked to, they're interested in that cash feel like there's people out there that just want to build wealth or have a safe place to keep their money. But the majority of people want cash

Edna Keep [00:44:05] flow to replace that day to day income or just have the extra to do stuff with.

George El Masri [00:44:10] Yeah, absolutely. Absolutely. And no, thank you so much for everything you shared today.

Edna Keep [00:44:14] Yeah, my pleasure.

George El Masri [00:44:16] And I look forward to having another conversation with you soon.

Edna Keep [00:44:19] Absolutely. OK, well, you take care. And it was nice being on.

George El Masri [00:44:23] Same here. Take care. Thanks once again for listening to another episode of the Well Off podcast, just want to remind you that if you do appreciate the content, all I ask is that you comment, maybe like it if you can, on the platform that you're listening to it on and finally share it with friends and family. I'd love to get the message out there and it would mean a lot if you can share it. And finally, I just wanted to offer you as a valued listener, a free copy to the roadmap to real estate investing, which is a document that I've put together which helps you identify what strategy would best suit your needs at this current time. You go over certain things that are included in this document step by step, and it'll hopefully provide you with some clarity. So have a look. You can go to w w w well off Dasia Forward Slash Guide to download your free copy.

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