Podcast Transcription

Erwin Szeto [00:00:06] Greetings, medal winners. Welcome to the Truth about real Estate Best in show. I hope you’re all enjoying this summer as much as I am. The craziest recession slash depression or whatever it is that we call it. It continues on. The divide between the haves and the have nots is widening. But don’t worry for the haves, which are most of you listeners? I’m sure our taxes will go up. There’s an article there’s been talk for a little while about that’s been going on for a while about increasing taxes on real estate. Let’s all enjoy the great weather. And just as importantly, the market appreciation that we’ve been enjoying. The real estate market in Ontario in particular has created a lot of wealth for a lot of investors, including this week’s guest, and can be random. We’ll get to him in just a moment. I’m sure Ken is grateful for his real estate portfolio just as much as I am. So Cherry’s birthday is coming up and the plan for us is to golf seven of the next eight days of her birthday week. Yes, this is Cherry’s birthday idea, not mine. In his previous life, it came and she did it in a boyfriend we don’t talk about a person happened to be an avid golfer, so they got a lot together. Cherry’s got a lot more than I have. Cherry has many shots that I do not and has played me in at least two of the times we’ve got together this season. This past Sunday, Cherry and I got together with my cousin and his wife. Cherry and I were both playing Scramble as in, we shoot, we both take a shot, we shoot the golf ball. This is not the drinking analogy. And then we choose between the shot, between our each of our shots, which one’s better? And then we choose that ball and then we hit from there. So we were playing at the lovely Indian Wells golf course in near Milton, Ontario. Gorgeous, gorgeous scenery. The last time I was there, I hit. It’s a very difficult course. I hit a 119. I’m not very good, but I was pretty happy with what, 19? I mean, a lot more good shots than they usually do. Well, when I would cherry in our scramble, we scored a 94 together. That’s an improvement of 21%. Cherry mentioned during one of the late around winter later holes, she mentioned how our golfing together parallels our lives. We complement one another. We raised each other up. We both have our good and bad moments, but we can often compensate for one another. On the first holes I was playing, I was having a strong first front nine. There was actually a stretch over two holes were all on mine. Shots were mine. I mentioned it to Cherry, but I was having a good strong run. And then right after that 30 seconds, right after that, she hit her best shot on the day right after I mentioned it, she took it as a chirp. Cherry has a competitive fire, and she wants to give her best effort, much like I do over the final nine holes. I struggled a bit and Cherry contributed more with my advanced age. In the 35 degree weather plus humidity, I tend to fade. This was around the 14th hole. I think she knows this. Hence the high volume of golf outings. Again, seven golf outings over eight days and that’s 18 holes. I think she’s planning to try to fatigue me so she can kick my butt each time. Speaking of cherry picking my. But she beat me again and start tacking in our heat versus she traitor competition. I had my third best week ever last week, but Cherry still managed to make you more money. Our household again realized five figures of cash flow in US dollars so she treated versus each hitter is now 13 to 6. If my score keeping is correct, this dark king’s gains are correct. I’ve had questions from folks saying, is this a get rich quick scheme? I don’t think so. I’ve been investing in real estate since 2005 and our bankroll has been funded by our real estate. So it’s taken this long in order to perform the way we are. For those interested in taking the beginner course taught by bestselling author and fellow stockbroker with 30 years’ experience, including seven years as a floor trader on Wall Street, that’s the guy that, you know, you’ve seen on TV and movies get the people in the credit rooms with TV screens all around yelling at each other and waving their hands if he can signals he is none other than the godfather of stock options, Lee Lau. He’ll be delivering the bulk of the education at the stock hacker academy to it. For details go to W WW dot stock hacker academy dossier for those interested, stay the date for the weekend October 3rd and fourth of Saturday Sunday. This is the version 2.0 of the program. So if there’s another the only stock option program that I’m involved with is called the Stock Hacker Academy. Anything else? I have nothing to do with. I don’t endorse it. I can’t control the quality of it until this week’s interview giving us the truth about real estate investing. And it’s not an easy one in planning for a future without his wife, Caitlin, a mother to a one year old son, Kingston can be condemned, made the decision to quit his job and double down on his efforts to build this real estate investing business. At the time, half of his income was coming from Kennedy’s investment properties, plus the need to build towards flexibility of schedule being an onshore. And as Ken is now a single father, he also knew the financial freedom that comes along with being a successful real estate investor. Ken is an innovation expert, both for his own portfolio and for his clients. I can’t emphasize that enough. Renovation expert has specialties in adding legal income generating suites in additions to existing properties. And like many high level real estate investors, he’s raising private mortgages. So you’ll want to pay special attention to that part. I don’t want to spoil too much of this of this episode, this interview. So all I can tell you, history I give you can be content. Hey, Ken, what’s keeping you busy these days?

Ken Beckendam [00:05:37] What is not keeping you busy? That’s the question. What really takes 95% of my time is doing a lot of the conversion work, conversion permits or dealing with or working with investors on all sorts of different conversion work. You know, primarily still a lot of, you know, duplex conversions to unit conversions. That’s still, you know, primarily what’s happening in the market. Although this year we’ve seen a noticeable increase to like legal triplexes and legal for Plexus. And I think that’s just, you know, a sign of the market that we’re in where it is getting, you know, it’s getting even more difficult to make the numbers work off of a unit conversion. Like back almost a year ago now, I was already telling clients and like, look, the numbers are getting really tight on a duplex conversion. And I’m like, no, you should be really looking at legal trades and legal force to make the numbers work great. But, you know, people were still able to buy and make the numbers work on a on a duplex conversion. So we still saw, you know, a lot of purchases happen. We still see purchases stopping now. But I’ve definitely noticed an increase into more three and four unit conversions for sure.

Erwin Szeto [00:06:49] Just to be able to do them. Are these old homes, these tris and four plus?

Ken Beckendam [00:06:54] Yeah. So most of the properties that are being converted are these older century homes. And we know for in Hamilton, for instance, as these two and a half story century homes now, you know, the zoning gets much more difficult. Absolutely.

Erwin Szeto [00:07:06] And fire code and building code and.

Ken Beckendam [00:07:08] Fire code and building code. Yeah. Because there is a big difference in the building code between a house which has two dwelling units and a building which has three or more. Right. Completely different one. Not completely, but there’s more stringent fire code and especially egress requirements and what have you. So it does make it more challenging.

Erwin Szeto [00:07:27] And you’re doing fire escapes as well, external fires.

Ken Beckendam [00:07:30] Yeah. So a lot of the you know, so a very quick example is in a building, so building has three or more dwelling units in it. If you have a shared entry or shared exit, those dwelling units need a secondary means of egress. And in a building we can’t use a window as a secondary means of egress. We have to have another exit door. Right. And so, yeah, we’re getting into a lot of like balconies and fire escapes to serve those egress doors.

Erwin Szeto [00:07:59] Okay. So the thing grandfathered stuff where people could still exit through a window to an external staircase as that of an upper case.

Ken Beckendam [00:08:08] So they’re all.

Erwin Szeto [00:08:08] New, right? Because.

Ken Beckendam [00:08:09] Well, there’s we’re dealing with two different types of egress requirements. Right. So we have a means of egress from a dwelling unit, which in a shared exit scenario, you need two means of egress. You have the one egress, which is through the shared exit. And you have you have to have a secondary means of egress. Right. And that has to be it can’t be a window has to be an actual door. And then we have the issue of means of egress from a bedroom, like, for instance, when we have a two and a half storey century home. Mm hmm. Right. And we have the let’s say it’s a legal triplex and we have a shared entry exits near this, coming in through the stairwell, the common stairwell coming in in the house. Let’s say the second floor is a bubbling unit. And the loft or the third, the attic is part of the second floor dwelling unit. And let’s say we have a bedroom up on the attic level. So that attic level would need an egress window because there’s a bedroom up there and we need an egress on the same floor level as a bedroom up in the attic. But then on the second floor, we need egress door going out with a fire escape because the other entry is a shared exit and it gets a bit complicated. And so these are some of the challenges that we’ve been as we’re getting into more and more legal tries and fours as people want legal tries enforce it doesn’t get more challenging from a building code perspective. You know, we still do a lot of legal duplexes with an illegal third because then we’re only classified as a house for two dwelling units and it makes the fire code and egress much simpler.

Erwin Szeto [00:09:50] That’s the thing we advise for.

Ken Beckendam [00:09:51] Don’t really know for sure for sure. But at the end of the day, like, I get it. Like I’m an investor myself, you know, I own a lot of investment properties myself. I get. To make the numbers work when you’re going to buy property. We’re trying to legalize as much as we can. Right. As investors, we want to, you know, obviously have everything legal, but at the same time know it is a business to try to make the numbers work as well. And, you know, as the province and as municipalities are coming out with their new three unit bylaws, we’re going to see, you know, the building code probably eventually get amended to classify a house up to three dwelling units, which would kind of maybe simplify some of the building code requirements. But that’s not here yet. So as of now, we’re still dealing with the current building code when it comes to this stuff. But yeah, that’s pretty much my life is, you know, involved a lot with just consulting with clients and investors basically around multifamily conversions, you know, getting into bigger stuff as well. You know, doing, I’m doing an eight unit conversion right now.

Erwin Szeto [00:10:57] So the single family home train.

Ken Beckendam [00:10:59] Yards to semi side by side. There’s two single family home semis side by side and then each time is being converted to four units.

Erwin Szeto [00:11:07] Of a normal.

Ken Beckendam [00:11:09] No, it’s a typical like downtown Hamilton century home rowhouse side by side, but in particular zoning. It allows for multiple dwellings.

Erwin Szeto [00:11:18] I’ll need to see this.

Ken Beckendam [00:11:19] Yeah. So it’s a pretty cool project. Up to eight legal dwelling units. And then I’m working on a 16 unit conversion project. It’s a multi rise building, but they’re adding some more legal residential units, converting the ground floor commercial into residential.

Erwin Szeto [00:11:39] Oh, so easy stuff to do, right?

Ken Beckendam [00:11:41] Yeah, sure.

Erwin Szeto [00:11:42] Yeah. I’m joking, listeners. The changing use, zoning use is not pretty.

Ken Beckendam [00:11:49] Every project has its own complications and hurdles that you need to, you know, you need to address. Like, again, at the beginning when people are making these purchases, like, you know, a lot of times they do come in and talk to me and ask for my opinion on the likelihood of a successful project. And, you know, so that way when they go into a purchase like they understand what they’re getting themselves into, like do we need a minor variances? This is just a rezoning.

Erwin Szeto [00:12:17] Or.

Ken Beckendam [00:12:17] The implications for building code when we get, you know, on a small scale, when we’re going from 2 to 3 legal units taking out the differences with a house versus a building in the building code, I think. Yeah. And the larger multi conversion stuff, you know now we’re getting into yeah, higher fire code requirements, more parking or amenity areas. You got to make sure you have the correct space on the property to accommodate that. You know, I’m just getting involved into a 52 unit apartment building, going to 60 unit for adding another eight residential units to the building, again, converting the ground floor commercial into more residential units. So yeah, so as I get involved, you know, as I continue to grow in my business as the investor and design build a contractor, you know, I’m getting exposed to more and more of these different types of projects. So I’m, I’m continuing to learn to every day as I get asked to help with these different projects. You know, the more that I’m learning about these things as well, and that way I can help the next client and the next client. And so it’s been it’s been a huge like, you know, the last two years has been since I quit my job and went into full time real estate. It’s been a huge learning curve for me to, you know, learning all of this different building code stuff.

Erwin Szeto [00:13:31] If I can hang on. You said you quit your job. It was your own business, was it not?

Ken Beckendam [00:13:34] No, no. I worked for another contractor for ten, 15 years, 15 years, almost by time I quit. And yeah, like I I’ve been investing for ten years now, so since 2010 is when I bought my first property. Now I grew up in a real estate family. Like my dad was buying properties when he was in his twenties. So, you know, I always had we always had investment properties around growing up and like I remember as a kid, you know, going into properties and helping strip wallpaper and stinking carpets and paint and all that kind of stuff. So now I always, we always had it around our family. So it’s I was exposed to that, but I started buying, you know, in 2010, personally, like under my own name, with my own money, started buying, buying properties. And that was kind of my side hustle, you know, as I was working for this other contractor doing design work and architecture work and renovations and construction, I was always investing in properties. And so then I got to a point where I had enough cash flow coming monthly from my properties that I was looking at my paycheck. Every two weeks. And like, what the heck am I doing? Like, more than 50% is now coming from my. My rental property.

Erwin Szeto [00:14:49] One half year income. Yeah. Cash flow.

Ken Beckendam [00:14:51] Yeah. Yeah. Like, my. My monthly cash flow was higher than my paycheck coming in every two weeks. And I’m like, what if I had to spend 100% my time on real estate? How much further off? No better off would I be? And so after I made that decision to quit and then that’s when I actually quickly become a real estate agent, I actually signed up to take the real estate courses. I got through my first one or two courses, and then I kind of realized, Oh my God, this isn’t really what I want to do, you know, it’s not real. I want to be an investor. I’m an investor. Like, this is why I. I quit. So I stopped taking the courses and I started going out to the networking events and just, you know, trying to learn more as an investor. And then just through those at different events, I was talking, chatting with people, telling them what I do and like I do basement apartments and I’ve got a bunch of properties I do, you know, design work, you know, I’m kind of designing my own basements. And then people just started asking me to help with their project. I’m like, Yeah, sure, I can. I can help you with your project. You know, I can do the drawings and submit to the city and do all of that. And then that’s how it kind of grew. I just started doing one at a time for people and then, you know, people started saying, Oh, does drawings and yeah, I do drawings. So I started helping out more and more people. And then it grew into a business and actually relatively quickly. It did scale up pretty, pretty fast, like my first year kind of doing it for other people. You know, we did 70 permits in the first year and like this year we’re going to far exceed that. We’re close to 125 permits by the time the year is out. So it did kind of scale up pretty quick, which is, you know, had its own challenges. As you start a business, when you grow a business, it’s a huge learning curve. I, I went to school for business and I got my business degree and everything, but none of that helped me starting my own business like I still to learn, like, you know, from the ground up how to register a business, how to register for HST, how do you, you know, set up payroll and all that kind of stuff?

Erwin Szeto [00:16:54] I should have taught that in high school business.

Ken Beckendam [00:16:57] They should teach that in the business school. How do you register for HST?

Erwin Szeto [00:17:01] I’m saying that’s not taught in high schools. You know what you learned at University College.

Ken Beckendam [00:17:06] So it’s been it’s been fantastic. It’s been great to learn how to get that all set up. Like, obviously, I was I was raised in a very entrepreneurial family business family. Like my brother owns a business. My and my dad has owned businesses. So it’s been great to have that support. And, you know, Terry’s been wonderful to helping set up corporations and accounting and all of that for that. But it’s been, you know, the last two years, it’s been crazy. It’s been really like it’s been awesome in a lot of ways, but it’s been very challenging in a lot of ways. One of the big reasons why I decided to quit was, yes, was obviously the financials like the cash flow and stuff. But at the same time, you know, at that point, you know, I was I was looking ahead to the future. And at that time, you know, my wife was continuing to get sicker with her health. And for those who some of your listeners may know, some may not. But my wife has had cystic fibrosis, which is a genetic lung disease. And, you know, it just she was born with it. And there’s progressively over time, it gets worse and worse and it becomes harder and harder to breathe. So, you know, I was without in mind, I was looking ahead to the future. I’m like, you know, at that point, you know, we had a one year old little boy when I was maybe two and I quit. And like now at some point, I’m probably most likely going to have to raise this little boy my own right. And so how do I kind of start preparing myself now for that eventual future? And so, yeah, that future came and my wife passed away in October 2019, and that was basically all of 2019. Like starting in January of 2019 is when she really got sick, like she was in the hospital in and out of the hospital multiple times. You know, some she’d go in for four weeks and to be home for two weeks, she’d go back in for three weeks to be home for two weeks. And she was in and out like four or five times, the longest stretch being 52 days that she was in. And she had to go to Toronto, the same Mike’s Hospital in Toronto. And so.

Erwin Szeto [00:19:18] And you live in Bradford and.

Ken Beckendam [00:19:19] I live in Bradford, yeah. So it’s a good hour and a bit to get there depending on.

Erwin Szeto [00:19:24] The traffic.

Ken Beckendam [00:19:24] With traffic and stuff. And so here on one hand, I have this really exciting kind of business getting off the ground, doing a lot of conversion work. You know, I was buying property at the time. I was closing on. Deals. When she was getting admitted to the hospital and we were committed to these purchase and sale agreements, and I couldn’t really back out. And there’s a lot of things going on there and it was definitely challenging and it’s not necessarily the easiest thing to navigate. And, you know, I had a lot of conflicting feelings, like about what I should be doing. Like, on one hand, I’m trying to grow a business and as an investor, investing in properties and I’m trying to ramp up or when she would pass care of my son at the same hand. On the other hand, I’m trying to be present. I was trying to be there. I trying to, you know, spend time with her in the hospital, trying to spend time at home with my son. And so I was very conflicted. It was very hard to know what one should be doing. You know, I’d have different family members telling me what I should be doing. You know, my mother in law would, you know, tell me what I should be doing. You know, my family on my side, everybody was trying to be helpful, right? Everybody wanted the best for us. But at the same time, nobody was truly walking in my shoes to understand, you know, what it means to balance a very sick life balance, being a business owner and just starting out a business and trying to keep that momentum going. Being a designer, as far as all of these permit drawings, which you have a lot of investors, you end up kind of really relying on you to get the permit done, to get the drawings done and issued so that they could continue on with their project. So there’s just a lot of weight there that I felt on my shoulders and, you know, is very hard to I felt like every move I made was the wrong move. Like it didn’t matter what I did. I would be pissing somebody off. I’d be making somebody very upset, you know, whether it was my wife or whether it was my mother in law or a client, you know, or myself, like, you know, I couldn’t keep anybody happy. And it sucked, man. Like, it wasn’t easy. And I wouldn’t want anybody to have to kind of walk through those that path. But at the same time, like, I felt like I was equipped to do it. I had an inner strength that allowed me to kind of keep pushing through. And it’s something you don’t wish upon anybody. And I don’t really know where I want to take this.

Erwin Szeto [00:22:16] I don’t think anyone knows the answer anything, because I’m sure your struggles still continue with being a single dad now. Dividing time between that and business investing.

Ken Beckendam [00:22:27] Yeah, for sure. You know, and thankfully, I had a very strong family support, especially my family, like in my wife’s family, like they’re very supportive. Like, whenever I needed somebody help to take my son Kingston for the day, they’re more than happy to take them so that I could kind of focus on work or whatever task I needed to get done. And so for sure, I wouldn’t I wouldn’t have been able to do it or even keep up even now with what’s going on, without good, strong family support, you know, and at the same time, like very thankful that I had real estate investing, that I was already on this path of, you know, financial freedom and real estate investing so that I could face this this challenge. Right.

Erwin Szeto [00:23:12] Lacy didn’t have financial concerns. Yeah, because imagine if you had that, too.

Ken Beckendam [00:23:18] Yeah, no, for sure. So I was able to if I needed to. And when I mean I mean, I had to me was able to easily, you know, go to work for the day and spend time at the hospital or, you know, spend time at home during the day to watch my son because I had nobody else to watch him. And so it was definitely because of, you know, and I, I do bring it back to the importance of investing in something that produces cashflow and produces income, a passive income, you know, and that’s what has definitely brought me through everything was having this good, strong financial base to trust back upon. That’s why, you know, we should be investing in real estate is for security for our family. Right? So that if something does happen and your partner gets sick or they die, you know, you have something that is carrying you through good, strong finances. It’s great to protect your family because there’s so many people out there who don’t have that right. And as soon as they face something tragic, like they fall apart, the whole world falls apart because they have to have nothing there to support them. So it’s been an incredible two years and there’s been a lot of stuff going on. You know, I’m still buying property. Like I haven’t really you know, it’s always been in my blood. I am property and renovating. And, you know, I’m a very creative type of person. So I just love seeing something ugly, being made into something beautiful, you know, in that whole process. I enjoy the whole construction industry and yeah, learning tons like every new investor I’m working with, they’re coming to the table with all of their experiences and, you know, different ideas about how something should be done and renovated and their own, their own strategies. And it’s really interesting when, you know, I probably worked with well over 100 different investors so far and it’s interesting seeing everybody’s different, kind of take an opinion on investing, you know, whether the better strategy or flipping or rent owns. You know, obviously a lot of my clientele are, you know, br investors, you know, buying and renovating and rehabbing. But it’s really neat kind of seeing how everybody will approach the same bungalow conversion differently as far as what they’re fixing up, what they’re leaving, how they want to separate, how they want to separate utilities, you know, what they what they’re all going to do with the property. And I have my strong opinions, obviously, about how something should be done. But at the same time, I’m open minded enough to learn from somebody else about different ways of doing these projects.

Erwin Szeto [00:26:01] And I’m guessing you’re planning a hole in a lot of your stuff for very long time, considering there are renovations that I find are more extensive, like, for example, the division of utilities. You do more than anyone I know for a division of utilities. Now, when it comes to the cost and effort and time, I can imagine you’re planning a whole everything longer.

Ken Beckendam [00:26:24] Than most know for sure. Yeah. Like, you know, I.

Erwin Szeto [00:26:27] Assume you do a flip, but it.

Ken Beckendam [00:26:29] I have no intention of, of selling the, the properties that I have. But like the way I look at it is, you know, I think it comes down to the state of the property that you’re buying. Like how rundown is it? Like what amount of renovations does it need anyways? Because people say that to me like, oh, you do like you seem to do a lot of work to your properties. And I look at it, I’m like, I’m just doing what needs to be done.

Erwin Szeto [00:26:56] For the hand or belt.

Ken Beckendam [00:26:58] Yeah. Like I’m just, I’m just trying to fix this property up to where it needs to be as a long term property I want to hold, you know, so maybe it’s sometimes the, the state of the property like, you know, I bought some stuff off, I’m lost. But I also buy a bunch of wholesale deals and, you know, pretty rundown properties. They need new electrical, they need new plumbing, they need new systems, you know. And so when you’re already getting into pretty extensive renovation anyways, like you do naturally and you have to start thinking about, okay, how do I, how do I separate things? Because when we’re doing a rewire of a whole house, like there’s not that much more costs incurred to separate hydro at that point. And sometimes, you know, depending on the city that you’re working in, as far as separating the water system, some cities will make you upgrade the water line, you know, as part of just getting a permit for a conversion like Branford, for instance, you know, more than 50% of the time we have to upgrade the water line. So at that point, once you have the correct water capacity of the house, it’s very simple to add a second water meter. And then now because you’re already re plumbing the house, you know, the separate water services. So then you start thinking about the heating system, right? And you know, some of these projects I get involved in, like there’s a really old furnace down there, you know, like 25 years old, like almost original to the house, if not older. And some of the ductwork is too low, you know, and or it’s all wonky and you got to kind of reroute things. And so you’re already getting into tearing down all the tin work and redoing ductwork. And so you start thinking, okay, I got to replace this furnace anyways. It’s in a poor location in the basement. It doesn’t. We’re planning for the plan. Right. And so then, you know, you start going down the road of thinking, okay, I’m already going to be redoing the whole heating system in the house anyways on this particular house because of old furnace and bad location, whatever. Right. So through that process, I can.

Erwin Szeto [00:28:55] Fix it up. Yeah. Because I’m sure the listener wants to know. So you talk about divining electrical, so say it’s a disaster how it’s done already. You’re going to divide electrical anyways. What would you budget for that to rewire.

Ken Beckendam [00:29:07] So like depending on if it’s like a bungalow versus a two and a half storey century home, you know, a.

Erwin Szeto [00:29:13] Bungalow is the most part, most common. Yeah.

Ken Beckendam [00:29:16] So on a bungalow anywhere between depending on your electrician but between ten and $13,000 to separate and upgrade the hydro system.

Erwin Szeto [00:29:27] For with new panel.

Ken Beckendam [00:29:29] Yeah like new paint like two new hundred and panels and each unit a 200 amp upgrade like.

Erwin Szeto [00:29:34] Upgrade the service. Sometimes we’ve had to upgrade service from the high triple for example.

Ken Beckendam [00:29:39] Yeah. And there can be a difference on the upgrade depending on if it’s aboveground service versus the buried service, you know. Yeah. There are different variables like, you know, every project is still individual and unique, but for most of the stuff that we’re working on, you know.

Erwin Szeto [00:29:54] In water upgrade of service and division.

Ken Beckendam [00:29:57] For water. Yeah. So if you have to upgrade the water line, let’s say you have an old half inch or old five eights or you have an old landline, you know, to go to a three quarter one inch copper, you know, you’re, you’re probably in the.

Erwin Szeto [00:30:12] Three.

Ken Beckendam [00:30:12] Grand range to get an excavating company in there to dig the trench, your plumber, to lay a new line, you know, to make the connection at the curb stop. You know, there’s some of the bigger name brand kind of plumbing companies out there that you hear on the radio who do a lot of waterline upgrades. You know, they’re charging for four and a half grand to do a waterline upgrade. But if you sort that out yourself easily three grand, you can have the waterline upgraded and.

Erwin Szeto [00:30:41] Everyone’s using all the and Hamilton. I’m sure you know them. Yeah, yeah.

Ken Beckendam [00:30:45] Yeah, yeah. So I know I have a good, you know, have a good relationship with, with my excavator guy, you know, who would do the and drop the line for me. So, so it’s not that big of a deal, but it does, you know, it does tear up the front line. You know, you have to backfill. You have to regrade and seed or sod or what have you. And again, it all depends on the state of the existing house that you’re buying. You know, as the market gets hotter and hotter, you know, and people are buying more renovated properties and trying to convert them, like you’re not really interested in doing a whole ton of renovations to the house at that point that you’ve already paid kind of top dollar for the house or full market price for the house. And the house is already three quarters renovated. Right. So, you know, if you’re buying a house with a finished basement, you know, and you have no intentions of kind of updating it, like why the heck would you go through and try and separate hydro at that point? You can be making switches of the house. You have to repack some drywall and paint and like it doesn’t make any sense.

Erwin Szeto [00:31:46] Right? So I’ve tried to do it right.

Ken Beckendam [00:31:47] But it houses a gutting a redo then. Yes, absolutely. You separate hydro if you have an old landline in the city, makes you upgrade the waterline anyways than yes, absolutely separate water because it makes sense. Right. The heating system, it’s.

Erwin Szeto [00:32:01] Like that old adage. It’s the old adage, the walls already open. You might as well do it for you can’t do it.

Ken Beckendam [00:32:06] Yeah, yeah.

Erwin Szeto [00:32:07] Or in the case of a for example, those who like vertical splits, it makes a lot of sense in terms of rental income. The House has to be in a condition that makes sense that you do a vertical split.

Ken Beckendam [00:32:18] Yeah, there’s a whole series of decision making that goes into a project with my consultations with different investors and at the very beginning stages where we’re trying to set up the property, that is a big topic. It’s a big topic. What are you going to do with utilities? What’s your plan? How are you going to separate? Are you going to separate? You know, and that kind of ties into the degree of renovations that the house needs.

Erwin Szeto [00:32:41] And then for listeners benefit for those who don’t know the nice, the benefit of the separate utilities is the tenant can put it in their own name.

Ken Beckendam [00:32:48] Yeah. Yeah. And there’s, you know, Hamilton for instance, you can get the water into the client, into the tenant’s name, but, but you can do some metering and you can bill your tenant individually, but they still can’t put the utility in their name. Other cities you can. But a big topic in a much harder thing to separate is the heating system.

Erwin Szeto [00:33:08] Okay, yeah, we’re doing the heating.

Ken Beckendam [00:33:10] And this is where even if you do it.

Erwin Szeto [00:33:12] You get it done.

Ken Beckendam [00:33:14] I’ve separated heating systems before and AC Yeah, yeah, yeah. Like depending on this on the system. So I’ve done it like every single different way you can imagine. So I’ve done two furnace systems of two, four stair, like two sets of ductwork in the house with two separate furnaces. I’ve done it with Mini Douglas split systems before and I’ve done it with the Con B boiler and the boiler system and each has their pros and cons. And the reason I made those decisions to go with those heating systems was based off of a certain set of circumstances that came with that particular house. Like there’s not one solution that fits every single house, that this is the way you should do it, right? You know.

Erwin Szeto [00:33:58] Like, for example, like for, like I said, like vertical split. Everyone should do it if the situation applies.

Ken Beckendam [00:34:04] Yeah. Yeah. Like, and so you still have to look at every single house as an individual house in its existing state and decide what’s the best path forward on this property. You know, and it does tie back into budget, you know, like what did you pay for the House? But can you afford to renovate put into it now? What’s the RV going to handle? You know, and you can get that money back out. Like, are you intending to have the tenants paid their own way? Are you going to be all inclusive? Like, I have a client right now who’s doing all inclusive and he asked me about separating hydro. I’m like, Well, why would you separate hydro? When you get all inclusive, you’re going to end up paying double the hydro bill because you’ll be paying double the delivery and double the account fee and all that kind of stuff. Like there’s no there’s no benefit there to separate, you know, so like, for instance, like our student rental investors, like, not really, they’re not separating utilities on a student rental. Like I’m being very generic in general here. But, you know, if you’re going to be doing all inclusive, like for our students, you know, we’re not separating utilities, right? Because it doesn’t make any sense. But heating systems is a tough one because, again, if you have a really great furnace, it’s like almost a brand new furnace when you bought a house and it’s in a good location in the basement, like, why the heck would you want to rip that out, redo it and switch to something else? And doesn’t really make sense. But if it’s an old boiler from like 1850s and the house needs to be stripped or redone because it’s all old laughing plaster and there’s no r-value on any of the walls and you got to redo it’s all knob and tube wiring and you got to strip the house anyways then. Yes, you know maybe you look at getting rid of that boiler and going to something new, maybe it’s new combo boiler that does both space heating and hot water heating. And yeah, there’s lots of different options out there and it’s a big topic. It’s every investor has her own way of thinking through it. And I’ve worked with a lot of different investors and everybody comes to their own conclusion. And like I said, there’s no right or wrong way of doing it. But you got to think about it. You got to, you know, because when we’re doing drawings and floor plans, you’ve got a space plan for it, right? So if you’re doing two furnaces by, you need more space in there. If you’re doing, you know, three hot water tanks, you need a certain amount of space for it. If it’s tankless heaters or like the little mini tankless heaters that can go underneath the kitchen sink, well, that’s a completely different space requirement. Right. And sometimes in these small basements, if you’re trying to squeeze in a third bedroom, let’s say it’s on a studio rental, you want to get that third bedroom down there for the rent and you got to have gotten to redo the house. Well, then maybe you look at doing mini splits because now we can free up the floor area and get the third bedroom in there, you know, yes, it’s going to cost more to do, mini Douglas. But on the upside is we’re getting an extra bedroom in there that we can rent out, right? So there’s look, there’s a lot of decisions that go into separating, you know, you know.

Erwin Szeto [00:37:03] Hopelessness, stance. If you’re new to investing, it’s tough to get some help.

Ken Beckendam [00:37:07] Yeah, I know. Absolutely. Like this is where, you know, you just need the guidance of somebody to kind of help you through that decision making process. Yeah, because even the most experienced of us still kind of struggle with how do we separate? Like, you know, I work with some, you know, very experienced investors who own a ton of properties and big buildings, and they still don’t know the best way of doing it because there isn’t there’s always going to be a sacrifice to be made. No matter which type of setup you go with, there’s always going to be sacrifice. So it just depends on what your goal is with the building and your tenant profile and budget.

Erwin Szeto [00:37:44] And yeah, I remember the student rental. It was a three level split and mechanical room was too big. Rick Santorum how is the regular hot water tank heater in the furnace that’s thinking so it’s going to be a five. I wouldn’t have three bedrooms, but they could have got another bedroom if they could relocate the furnace and the hot water tank. So I was thinking, I have a property just like this. What do they do? Well, my furnaces can be put sideways in my crawl space and I have a tank with a hot water heater that gives me all that space saving. So that’s what they did. And their furnace happened to be it was it was already allowed to be put on inside the same furnace. So they moved ducting switch from the hot water tank heater to tankless to another bedroom. They charge over $500.

Ken Beckendam [00:38:32] For that, a room.

Erwin Szeto [00:38:33] For $5 a month for that room. So and I think the whole that whole rental cost less than 2000 bucks for the furnace and the alternate bathroom less than six months. Yeah. All right. I think anyone would take that.

Ken Beckendam [00:38:48] You know, for sure. And like, you know, the more that we can get out to the tenant, the better my comes to utilities, because even in these shared utility setups, like, there’s always going to be complaints, you know, especially when it comes to temperature. Like the basement tenant will always be too cold. You know, the guy up in the third floor attic is going to be too hot. And you can never satisfy. There’s always going to be a complaint, right? So if you get everybody paying their own way and people like I think people in general like being self-sufficient, I don’t know, maybe it’s just us being investors and entrepreneurs that, you know, we think that everybody should want to be self-sufficient. But I think, you know, if people are, then they’ll take responsibility for their own usage, you know, if they’re getting too hot, the. Go out and buy their own air conditioning unit, and because they’re paying their own hydro, they can set up their own AC. You know, I think you’re just mitigating a lot of complaints by suffering. So, you know, I tell people to, look, if you know, this is a flip versus a long term buying hope, you know, that also factors into your decision making. And, you know, are you self-managing or are you hiring out the management? Because if you’re just farming out management to somebody else, what that company is dealing with all of the complaints from the tenants about usage or temperature or what have you, but if you’re self-managing like I self-manage my properties. And so yes, sometimes I do extra things in order to make my life easier as a landlord, you know. So yeah, sometimes I do spend more money on separating for the sole purpose of just making my own life easier, you know.

Erwin Szeto [00:40:29] Or, or those kind of as we’ll do inclusive so that we don’t do the billing of utilities back to the client. Yeah, it’s just to make our lives easier.

Ken Beckendam [00:40:36] Yeah. But on the flip side is when you do all inclusive is that yeah. You do see those bills coming in every month and you’re like, man, you know, every time you see something that seems high, you’re like, oh crap. You know, like, you know, that kind of takes away from your enjoyment too, of owning the property because somebody is running around telling you there’s no perfect day, even if they.

Erwin Szeto [00:40:55] Run it up or they’re coming to you for a rebate. Yeah. So there is nothing perfect.

Ken Beckendam [00:41:03] Yeah, I just know it’s a difficult topic. Like I said, everybody has their own thought process around it and I’m here to tell people like, look, there is no perfect answer, there is no perfect answer. You got to figure out what’s best for you and your property and your tenants.

Erwin Szeto [00:41:17] You know, it’s going to get, though, is that mostly it’s been reliably a wealth builder for pretty much everyone we know.

Ken Beckendam [00:41:24] Yeah.

Erwin Szeto [00:41:24] Not to say that you are people losing your money in real estate. You know lots of people who lost money real estate. But wow we just know we know a lot of self-made millionaire multi-millionaires from real estate.

Ken Beckendam [00:41:34] Well, you know, the market’s been very gracious to all of us, right? There’s a market.

Erwin Szeto [00:41:41] Home. It’s crazy. And that.

Ken Beckendam [00:41:43] Well, because the market’s going up, you know, and it’s still going up, whatever mistakes we made are forgiven because the price of the house is going up. So, like, you know, people. Yeah, like, you know, they at that point in time, they might have overpaid for the house technically, but six months later, it’s now looking like a good deal, you know? But as investors, we just need to be very careful that we are still making sound decisions when it comes to the properties that we’re buying because we may know the market may not continue how it is. And there’s a lot of debate about, okay, if it goes down 2% while it’s still up from what it was last year, you know, so we’re still ahead of the game a bit.

Erwin Szeto [00:42:24] Hamilton was up 3% from the previous month last time I checked. Yeah. If you go if you lose 2%, you lost two thirds of a month ago.

Ken Beckendam [00:42:32] Yeah. No. So, like, it’s when you’re in a good strong market like we are here in Ontario and, you know, especially Hamilton and the GTA, you can make mistakes and you still be okay. But that’s not that’s no excuse for not making easy to get lazy not, you know do you see lobby do your due diligence here and run your numbers and make sure that you’re investing for the right reasons.

Erwin Szeto [00:42:56] Create your properties set up to survive rough times.

Ken Beckendam [00:43:00] Yeah. Yeah. And, you know, I think, guys, this is something I do want to talk about with people is doing things with integrity. So if you’re a real estate investor and you’re not renovating properly, but you’re not fixing things that you should, if you’re not trying to do things as legally as you should think, then get out of the game. You’re right, because we don’t need those types of investors in this market really have a tough time as it is, right? As being landlords.

Erwin Szeto [00:43:29] Being landlords, yeah. We’re the enemy.

Ken Beckendam [00:43:30] And.

Erwin Szeto [00:43:30] We’re.

Ken Beckendam [00:43:31] Very public enemy number one. Right. And so, you know, I really stress on people like, look, yes, when we do a duplex conversion, you know, we can live like let’s say you buy an existing finished basement apartment. Right. You know, you want to legalize it. Yes. Okay. The existing half inch ceiling, half inch drywall that’s on the ceiling can be left and we can legalize it with interconnected smoke detectors. But like that, ceiling is not fire rated. It’s not sound rated. You know, it’s going to be very noisy for the tenants in both units. It’s not going to be that safe of a unit. So with integrity as a as a good real estate investor and property owner, you should remove that ceiling and redo it properly. Now, there’s a lot of people who won’t because they don’t want to spend the money on it. But to me that speaks to not doing things as properly as you should as an investor, right? We want to be making sure we have good, safe legal properties, providing quality housing to people that people enjoy to live in. And so. To me, it’s very important to do things with integrity and the return on investment. Is there like the REI is that they’re like in this industry, you know, with mortgage paydown and appreciation and cash flow, like we’re getting returns that the average person is not getting. Right. Like, so how much do we need to get? Let’s say the average person out there is getting less than 5% return on investment on their you know, if it’s a mutual fund or GSE or whatever. You know, us investors, we’re averaging, what, 20, 30, 40, 50%, 100% a lot. Right. So to get say, instead of us getting 30%, we’re getting 28% return on investment because we decided to redo that ceiling in the basement to make it fire rated and sound rated. So we have a better, safer, more enjoyable product for somebody to live in. Like, to me, it’s worth it to spend that extra money to get a better product that, you know, I can then rent out with confidence that I’ve done the best that I can to make this property as best as it can be, you know, or if I’m going to turn around and sell this thing, if I’m a house flipper, I’m gonna sell this thing. I can sell this property with integrity. Now, look, I’ve done everything as best as I can to make this thing a safe and legal and habitable as I can. Right. Because I work with some house clippers as well. And, you know, some of them do a fantastic job. But there are some people out there who don’t. Oh, yeah, they will cut every corner. Oh, yeah, they will cut every corner.

Erwin Szeto [00:46:11] And quick point for the listener should buy real estate investing. If it’s a flip, you have to take a closer look at it.

Ken Beckendam [00:46:18] Absolutely. Absolutely.

Erwin Szeto [00:46:20] I personally buy one common one common stock that I’ve seen flippers do is we run windows, for example, because capital just happened with the up. So you can’t you wouldn’t be able to know of the what is right.

Ken Beckendam [00:46:32] It it’s a different thought process when you’re flipping right then when you’re long term buy and hold. And it really depends on the investor doing it right. And like I said, there are some there’s some individuals out there who do take a lot of pride in their flips and they will fix things and they’re actually doing proper restoration to the house. Right. And then there’s others out there who just doing all cosmetic stuff could be sell it off in four months. Right.

Erwin Szeto [00:46:56] That is a difference between the flipper who came from construction versus a flipper who came from a spreadsheet.

Ken Beckendam [00:47:04] That’s a good point. That’s a good point. You know, because I think guys who are, you know, guys or girls who are in construction or in the construction industry, I think they value.

Erwin Szeto [00:47:13] Their name is on.

Ken Beckendam [00:47:13] It. Their name is on to take more pride in it. The value restoring something and fixing it properly.

Erwin Szeto [00:47:19] They know what the right thing to do.

Ken Beckendam [00:47:20] They know what the right thing to do is.

Erwin Szeto [00:47:22] Right is person on the spreadsheet. They’re just fiddling with numbers like, okay, I need to hit this number. Yeah, let’s do it for that.

Ken Beckendam [00:47:29] Yeah. And so to me, it’s like if you have to take shortcuts in your renovation in order to meet a certain number, well, maybe that’s not the best deal. Maybe that’s not the best house that you should be.

Erwin Szeto [00:47:38] Flipping or the right number.

Ken Beckendam [00:47:39] Or the right number.

Erwin Szeto [00:47:40] But can I want 100% deals?

Ken Beckendam [00:47:43] Yeah. Okay. You know, so like, I really question that when somebody says I can’t fix it, like, we’re just fucking the house, like, I don’t want to, I don’t want to fix that. Like, to me, that’s no excuse. There’s no excuse. Then don’t be a house flipper. Don’t get into renovations. Like, if you can’t fix something properly, then get out of the industry.

Erwin Szeto [00:48:03] We want to flip points and this is behind the walls. We couldn’t have known. So actually it’s one of the things we look out for in home inspections, for example, was new bathroom door tub. But when the tanks moved in, it filled the tub and then the ceiling below and the kitchen started leaking. What happened was they didn’t connect the overflow in the tub to anything that was dripping on the floor below it. And then eventually the kitchen ceiling collapsed. You wouldn’t know, though, unless you test it in one direction. Yeah, fill the tub until it goes to the overflow now.

Ken Beckendam [00:48:36] And there’s like, no, don’t get me wrong, guys. Honest mistakes are happen. Like, there’s people who set out.

Erwin Szeto [00:48:42] To be honest and confidence to say.

Ken Beckendam [00:48:44] Well, yeah, but, you know, somebody could start something with great intentions and wanting to do everything correctly, but they just don’t know how to. And for a certain set of circumstances, they can hire professionals to come in and do it. And, you know, and that stuff does happen, but it’s still no excuse to not do things properly if you don’t know how to do it. You hire a professional, you hire somebody to do it.

Erwin Szeto [00:49:08] I think to the common person that overflows should be connected.

Ken Beckendam [00:49:11] Well, yes, I.

Erwin Szeto [00:49:12] Know his water has got to go somewhere.

Ken Beckendam [00:49:14] You know, the flaw in plumbing, plumbing a plumber is one thing that you hire professional to come in and do. You know, you want to make sure there’s water lines are connected correctly, right? Because water can quickly cause a lot of damage a lot of times. Same thing for electrical light. Those are your mechanical systems is where you spend the money and get it done correctly. H-Back electrical and plumbing. Those are like, you know, the most important systems in your house.

Erwin Szeto [00:49:42] So can I actually, I’m glad you brought that up, because how big is your crew? Your business does renovations. How many people do you know?

Ken Beckendam [00:49:49] Yeah.

Erwin Szeto [00:49:49] So contractors.

Ken Beckendam [00:49:51] Employees. Yeah. So it’s a mix of basically sub trades and independent contractors and some stuff. You know, we’re probably around 18 to 20 people. That’s a.

Erwin Szeto [00:50:05] Lot.

Ken Beckendam [00:50:06] I’m including some of my independent contractors in that that list and like, you know, my plumber and stuff like that. But like when we have our team meetings, you know, every six weeks we’re getting together with everybody. Like, even all of my different trades, we all get together. There’s about 18, 20 of us that are competing. And basically, no, we’re just talking about standards. We’re talking about, you know, company standards, standards for the renovations. Like this is what I expect on my projects. And I want you to expect the same thing, you know, so like my electrician. Yeah, like my electricians and plumbers and drywall ers like make, they’re all on the same page as far as my expectations. And again, talking about doing things the right way, you know, doing things with integrity, you know, being honest with pricing, materials, labor, all of that kind of stuff. Right. And I think the guys value that. I think, you know, I think they enjoy working with my company and stuff.

Erwin Szeto [00:51:01] So I want to do good work. Well, appreciate that.

Ken Beckendam [00:51:04] Yeah, yeah.

Erwin Szeto [00:51:05] I’ve had I’ve had handymen. This always happens. Usually 20 minutes. I find they rush and I always tell them, I’d rather you slow down and charge me more per hour and do it. Excellent. Now, here, headquarters corners here. Like working on your rate. Now, honestly, don’t charge 25 bucks an hour, trucking 35 charge of whatever you feel appropriate to do the job. Right. Because I’m more interested in the job rate than anything.

Ken Beckendam [00:51:28] Yeah. You just like, you know, like I’m busy. You’re a busy. A lot of real estate investors are busy. Yeah. I want to follow up. We don’t want it to follow up. We want it done. We want it done right the first time so that we can move on and we can focus on the other things that we have going on in our life.

Erwin Szeto [00:51:42] No callbacks.

Ken Beckendam [00:51:42] Right? No callbacks.

Erwin Szeto [00:51:43] From tenants.

Ken Beckendam [00:51:44] Yeah. And it is a different mentality and you know, obviously being, you know, like Robert Kiyosaki, you know, like Tiger, you’re a big business owner or an investor or you’re an employee or a small business owner. And it’s a different mentality. Right? Like a lot of us and a lot of listeners here are on the investor side. Right. And it’s a different mentality than the other side. But, you know, I try and encourage my different trades and independent contractors that I work with to want to grow their businesses, to want to become an investor so that they can kind of get out of the rat race. And I think, you know, don’t get me wrong, like not everybody can be an investor. Not everybody can be a big business owner. But, you know, I think we should all be striving to continue to grow wherever we’re at.

Erwin Szeto [00:52:34] That’s cool. I’m guessing that helps you attract talent as well. Yeah, I realize you care.

Ken Beckendam [00:52:40] Well, I think for some of these guys, they just enjoy working alongside and with a company that’s growing and because they see doctors, obviously the more clients that I can help and the more projects that we can do, the better it is for them as well, the more projects that they get to do. And it benefits their family. Right. Because they’re earning more money and they’re able to do more. So. So, yeah, like it’s obviously there is a trickledown effect. Like it starts with the investor number one setting out and doing things the right way with integrity. Because if you do that, you’re going to attract the money, you’re going to attract private capital, you’re going to be able to get JD Partners or what have you to find your deals. You’re going to be able to get those deals because you’re doing things the right way. You’re going to be able to finance the renovations and you’re gonna be able to attract good quality tenants because you’re doing things the right way. And that trickles down to, you know, your different trades and your sub trades and your employees or your tenants or your family members, whoever is benefiting from the work that you do, everybody will benefit if you set out and do things the right way. And, you know, two bad more people in our society don’t do that. You know, a lot of problems we see in the world today is because of the fact that people don’t aren’t doing what they should be doing. And so anyway, that’s like that’s a motto that I try and live by is and that kind of came from my previous employer to how he ran his business and how he dealt with clients and conflict and different issues with renovations and stuff is, you know, do right by the client, do things the right way and the profits will be there. They’ll come. You know, it’s not all about PR wise, not all about the mighty dollar at the end if you do things the right way. The money will come.

Erwin Szeto [00:54:36] Like this for the tenant because they’re our clients as.

Ken Beckendam [00:54:38] Well. Absolutely. Like you have to treat your tenants like a customer.

Erwin Szeto [00:54:42] Yeah, but that’s a lot of money.

Ken Beckendam [00:54:44] They do. They’re paying top dollar, you know, for a product that we provided to them or.

Erwin Szeto [00:54:50] A carpet cleaner that was in the hallway. We hired we paid for that to cleaner tenants.

Ken Beckendam [00:54:56] That’s great customer service, right?

Erwin Szeto [00:54:59] That’s not normal at all. It’s a commercial, right? Yeah. You don’t do that in commercial. It’s just like a thank you for being a good tenant during this whole COVID period.

Ken Beckendam [00:55:07] Yeah. And, you know, they’ll be more inclined to make sure they pay you every month, hopefully. Right. Because you’ve treated them well.

Erwin Szeto [00:55:14] Their biggest tenet now.

Ken Beckendam [00:55:15] Yeah. Yeah.

Erwin Szeto [00:55:17] We’re running out of time. So I need to ask you this. So how has financing changed for you from the beginning versus to the present day?

Ken Beckendam [00:55:25] Financing is interesting.

Erwin Szeto [00:55:28] It’s probably one of the biggest problems for all of us, especially for the people who have who have a lot of property. Yeah. I have to ask you.

Ken Beckendam [00:55:37] It’s, um. In some ways it gets easier. In other ways, it becomes more difficult. So the ways that it gets easier is obviously when you have more properties, you have more appreciation, you have more equity behind you, which helps. You know, it does make the spreadsheets and the numbers and stuff look better, but at the same time, it gets more complicated for lenders and how they look at you and how they run their calculations. And some mortgage brokers don’t want to do the work of inputting all your properties into the spreadsheet because it could take a.

Erwin Szeto [00:56:11] Lot of work.

Ken Beckendam [00:56:11] It’s a lot of work for them, and I can appreciate that. And I call my broker too, who is working on my last my current deals I’m trying to do right now. I’m like, look, thank you so much. I appreciate, you know, I know that a pain in the butt to enter all this stuff in and I know you really value the work that you’re doing for me and they may not.

Erwin Szeto [00:56:28] Get a deal and then they won’t get paid.

Ken Beckendam [00:56:31] Yeah. And so showing appreciation to the broker or he’s working on your deal is huge because they’ll try and fight for you, you know, with the adjudicators who are ultimately making the final decision on whether or not they’re going to lend. But, you know, financing, you know, you know, COVID has definitely changed things up, you know, especially for those who are self-employed, like a lot of lenders aren’t at least the ones that I’m approaching right now. You know, some of them, you know, aren’t taking into account the self-employed income. It’s like they wanna see what 2020 numbers are going to be like, but it does get easier attracting private capital, you know. So on one hand, it’s sometimes difficult getting the institutional money, but on the other hand, it gets easier to get private capital because you’ve you got a bunch of property, you got a bunch of equity, you got a lot of experience. You’ve done this, you know, it’s not your first time. And so what I found over the last two years is that it’s been easier getting private money. Now, am I excited about private money? No. No, because it’s expensive money. And I’d much rather.

Erwin Szeto [00:57:35] It’s cheaper than giving up half the deal on a JB.

Ken Beckendam [00:57:38] Oh yes. No for sure. And no I have no I have a couple of private mortgages and have some be lender stuff and I have some lender stuff. And yeah, ultimately, you know, everybody wants a lender money, you know, and rates and stuff like that.

Erwin Szeto [00:57:53] But if you’re buying a piece of junk, no human, touch it.

Ken Beckendam [00:57:57] Yeah, you know for sure. Some of the beat up stuff, you know, they’re not even going to lend on anyways or the money on me, you know, 70% LTV or 65% LTV. And I won’t be lenders.

Erwin Szeto [00:58:07] They do. You know you have nothing to. Yes, I do. Electricians coming tomorrow after we closed on this. We closed on this. Yeah.

Ken Beckendam [00:58:15] Yeah, you know and yeah. Trying to get lending and find it. It’s not easy. Like it’s and it can take a long time, you know, like, you know, it can take months and months to get financing sorted out, you know, and get your money set up and in place.

Erwin Szeto [00:58:30] And even private privates, your privates are still taking that longer.

Ken Beckendam [00:58:35] No, not in the private sector. Like, you know, take.

Erwin Szeto [00:58:37] It like a.

Ken Beckendam [00:58:38] Private side is however quick you want it to be, you know, like, you know.

Erwin Szeto [00:58:42] And then the private.

Ken Beckendam [00:58:43] Side is like two weeks, you know, you can get a private set up and, you know, get their lawyer to get up the paperwork and have it done. And the money in your account, you know.

Erwin Szeto [00:58:51] Are you going to a broker or are these people that you already knew or they came through you?

Ken Beckendam [00:58:55] Through, yeah. So I have three private people who invest with me and the one, two, three, four, five, four for private people. For private people who invested. Not because I got one coming up. One of my purchases coming up is with a private guy. So I haven’t got the money yet, but it’s closing in September. So. But no know these people. They reached out to me more or less like, you know, they saw what I was doing, you know, and this is where the power of social media comes in, where, you know, I see a direct correlation with every time I post something about what I’m doing, I see a direct correlation with my inbox and my private messages about people interested in working with my. Problem is, there’s not enough time to post. I don’t have time to talk about what I’m doing. But so for those who are trying to attract private money, you have to put yourself out there. You have to show that you’re an active investor, that you know, you’re doing this on the regular because those people want to invest with they want their money to be safe. I’ve been thankful that I’ve had these couple of individuals who’ve been willing to land with me. And I’m just doing that for like a one year term. And then once the project is done, then I go and get a conventional mortgage. Hopefully with any lender. But I basically, you know, set myself up to, you know, all my cash flow that I would make off of this property in a year is basically going to pay interest and that I’m not going to cash flow off this thing my first year, but long term as a long term buy and hold, like that’s fine. You know, I don’t mind foregoing cash flow on I know I’m making it up on depreciation and mortgage pay down. I’m just not cash flowing right now but.

Erwin Szeto [01:00:35] Something will be the cash.

Ken Beckendam [01:00:36] Flow. The plan will be DeCastro once I refi out of it. But yeah, like, you know, as, as I’m continuing to grow my portfolio and get more properties and get more equity and an appreciation going for me. It allows me to go from just doing one house a year to doing four houses in a year.

Erwin Szeto [01:00:53] That can’t imagine how I juggle all of this and have a full time job.

Ken Beckendam [01:00:58] Yeah, it’s. Did you have.

Erwin Szeto [01:00:59] Time to post on social media?

Ken Beckendam [01:01:02] Yeah, likewise. Yeah. My full time job is. Is. Yeah, I am a real estate investor. I where I real estate investing at first, you know, the consulting and apartment work and the renovation work I do for other people is a secondary hat that I wear as a design build contractor. I’m an investor first, I think, like an investor first. And you know, and I think that’s that helps with the permit in drawing work for other investors is that I can I can wear the same hat that they’re wearing and think about the project in the same way, which you don’t, you don’t get with every architect out there. You know.

Erwin Szeto [01:01:37] They can’t say, this is how I would do it or this is how it’s done in my other property down the street from yours. Yeah, yeah, yeah.

Ken Beckendam [01:01:44] But it’s been, you know what, the last two years here. It’s been it’s been awesome in a lot of ways. It’s been very challenging. I’ve learned I’ve grown a lot. I’m just with my whole outlook on life, you know, and I come to appreciate, you know, time and trying to gain that financial freedom through real estate. And it’s been great. I think, you know, this is what real estate investing does for us. It gains us that time, right, so that we can spend with our loved ones and family for however long they’re here. But we can spend that time with them. And, you know, I encourage people to, you know, not take the time that you have for granted, because a lot can change in a year, you know, and I’m proof of the fact that, you know, in one year in 2019, my world changed. But because I had sound real estate investing behind me, that I’m able to continue through and thrive on the other end and be growing tenfold. And it sucks sometimes because when you have a lot of exciting stuff going on and then you don’t have your partner there to share it with, it sucks. Like I see all this wonderful things that I’m doing and have nobody really to share with right now is sure a lot of exciting things with my dad. He loves this real estate stuff and is my sounding board. I go I go share anything exciting that is happening in the business or real estate or what have you with him. And it’s, it’s great.

Erwin Szeto [01:03:16] So if it’s a great place and the show there can work and people follow your journey, where can people like creep your social media so they know how to raise private money?

Ken Beckendam [01:03:26] Yeah. So yeah obviously you can find me on Facebook, can be condemn. I’m the only person in existence out there with that name. You can also find me on my website W WW dot legal second suites dot com and I go to a lot of the different real estate networking events when they’re up and running and I’m pretty active out there in the different real estate world. So yeah.

Erwin Szeto [01:03:51] Oh, you’re cool. So you’re welcome to come in for when we do it here. So we’re 19 and we have tools just Mackenzie’s want to present.

Ken Beckendam [01:03:57] Okay?

Erwin Szeto [01:03:58] Yeah. No, I don’t. Oh, he owns lots of property and I appreciate his story because he’s indigenous Canadian police officer, the very successful real estate investor. So awesome. He’s got many angles to cover in this crazy world we live in. All right. We’ll leave it there. Can’t thank Ken. Thanks so much for doing this.

Ken Beckendam [01:04:20] Yeah, thank you so much for having me. I appreciate the opportunity.

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