Emotional Decisions and the Investor Mindset with Scott Thompson

Microphone 8 25

Podcast Transcription

00:00:00:23 – 00:00:08:23 Scott Dillingham: Welcome to the Wisdom, Lifestyle, Money Show. I’m your host, Scott Dillingham. I have another guest with us today who goes by Scott as well. This is Scott Thompson. Welcome, Scott.

00:00:09:07 – 00:00:10:13 Scott Thompson: Hey, guys. Thanks for having me, Scott.

00:00:10:17 – 00:00:28:14 Scott Dillingham: Yeah, no problem. So Scott is a realtor with Team Goran and prior to that, I know you did some social work and I know that’s had a big impact on helping you to be successful with what you’re doing. And you’re going to share some of the cool things with us today. But let’s start off with your childhood. Can you tell us about that?

00:00:29:00 – 00:01:06:02 Scott Thompson: Yeah, absolutely. So I was raised in Windsor, Ontario. I grew up on the East Side, Roseville Gardens. I went to St. Alexander school and then I went to St Joseph’s, the old St Joseph’s on Empress. So I played a lot of soccer, played a lot of sports growing up. Never really know what I wanted to do. I was always bouncing back. One week, I want to be an electrician. Next week I want to be something else, a pilot, whatever, you know. So I was just kind of figuring my way through life there. When I turned 19, I moved in with my grandfather out in LaSalle. So that was pretty cool because he was like my hero growing up.

00:01:06:02 – 00:01:06:17 Scott Dillingham: That’s awesome.

00:01:06:18 – 00:01:19:01 Scott Thompson: Yeah, he would always be fixing something and he would, you know, teach me how to, like, fix a lawnmower and ride a lawnmower and take you on different trips. So he was a pretty cool guy and I look just like him, too.

00:01:19:05 – 00:01:20:21 Scott Dillingham: That’s awesome. That’s funny.

00:01:21:12 – 00:01:55:15 Scott Thompson: Yeah. So it was a great experience living with him. You know, eventually he got sick, he started getting dementia and it was just a big shock for me, right? Because dementia, as many people know, really takes a toll on families right? But it was definitely an opportunity for me to get closer to him and just, I kind of learned that that caring approach, you know, you really got to like to put their needs first and kind of understand what they’re going through and definitely developed a lot of patience for me.

00:01:55:22 – 00:01:56:06 Scott Dillingham: Yeah.

00:01:56:11 – 00:02:09:22 Scott Thompson: And you know, like my heart really started to go to other people with dementia and I felt like we had a really good connection. And you know, that thought kind of led me into, into social work.

00:02:10:04 – 00:02:14:11 Scott Dillingham: That’s awesome. How life works and how one thing leads you into another.

00:02:14:17 – 00:02:37:09 Scott Thompson: Absolutely, right? They always say, like you know, when you’re not looking for it, you find it and that’s kind of what happened with me at that moment in my life with social work. So, you know, I went to school and I was, you know, I was taking the classes and just trying to figure out, like, what I could be doing and then I graduated and I started working at a rehab facility, actually.

00:02:37:09 – 00:02:37:19 Scott Dillingham: Okay.

00:02:37:19 – 00:02:52:19 Scott Thompson: So a bit of a difference from when I first started. But yeah, I started working for a rehab facility and it was basically helping men with addictions to learn how to cope and, you know, get through that battle. So that was a really cool experience.

00:02:53:05 – 00:03:04:08 Scott Dillingham: That’s awesome. So, when you were there without getting into too many details, but would you be able to elaborate on maybe someone’s story or scenario that you helped them to get through?

00:03:05:08 – 00:04:26:15 Scott Thompson: Sure. So I found I really connected with the younger guys there, right? You know, going through high school, like trying to fit in the peer pressure, you know? Going to parties and whatnot, you know? Living in, you know? With their mom and then, you know? Not seeing their dad all that much. You know? I can relate to that and then, you know? Just, I found that a lot of the younger guys had issues with trust. You know? They couldn’t trust, you know? Role models, they couldn’t trust maybe, certain friends and in social work, any type of like helping setting trust is like the number one thing and that’s what I really wanted to establish is, you know, whatever you tell me stays with me. I’m here to support you. I’m not here to put you down in the biggest way I kind of found to do that is, is understanding where people are and meeting them there. Right? So, you know, if we’re talking about certain subjects, you can see them in their face like I don’t want to talk about this. You know, this makes you feel really uneasy, you know? And maybe, yeah, it’s a, it’s a conversation that needs to come up somewhere down the line, but that’s not where they’re at, you know? You can’t help people recover in one day. It’s a process, right?

00:04:26:16 – 00:05:17:02 Scott Dillingham: It is. It takes time. Just like everything. Doesn’t matter if someone’s losing weight or they want to, you know, climb the corporate ladder in their career, right? You have to take time. So that’s cool. I love that you, one of the things that you said there, was trust, like you really work with them on trust and I think that really goes hand in hand with being a realtor. I totally think it does, which is awesome. Another thing that you told me, which I thought was really, really cool is you help people with like not letting their emotions take over their thinking process right? So can we touch on that and maybe where you saw people let their emotions get the best of them through your schooling or practicing it at work and then we’ll, you know, we’ll tie in how that has helped you now as a realtor?

00:05:17:19 – 00:05:57:05 Scott Thompson: Yeah, absolutely. That’s a good point. A lot of the guys, when they were there in the rehab facility, you know, they would be ambitious and maybe in the beginning that they’re going to make this change. But, you know, being there after some time, it’s just like I miss home, I miss my girlfriend, I miss my friends, whatever and then when you decide I’m leaving, you know what I mean? I’m good now I’m going to go back home and everything will be okay and I really tried to, like, help them, like, hey, let’s just think about it, you know what I mean? Let’s maybe sleep on it tonight, you know, see how you feel tomorrow. I know for myself, any time I make an emotional decision, I usually regret it afterwards.

00:05:57:10 – 00:05:57:19 Scott Dillingham: Yeah.

00:05:58:04 – 00:06:27:17 Scott Thompson: Right? So we helped them to do that. You know, sometimes you can get this, like, gut feeling, I guess, if you will, and you think, like, all this is the right thing for me to do. I got to go home or my parents need me to be there and that doesn’t always play out well either. The other thing, too, I would I’d have them journal or write something down, like write how they’re feeling because that really gets people in the moment and sometimes it’s hard for people to express how they’re feeling, especially when they had all that inside in them.

00:06:27:17 – 00:06:28:05 Scott Dillingham: Yeah.

00:06:28:05 – 00:06:35:15 Scott Thompson: And so when they can actually write it down, it kind of gets into more detail of how they’re feeling. I’m not going to say it worked every single time.

00:06:35:15 – 00:06:36:04 Scott Dillingham: Yeah.

00:06:36:04 – 00:06:37:00 Scott Thompson: But it did work.

00:06:37:11 – 00:07:17:03 Scott Dillingham: Yeah. No, it’s cool. I like that you said that because even like with goals, right? You write down your goals, then you look back at them and maybe your ambitions or your motivation or your just goal and in general changed, right? And it’s something different, but it’s cool to be able to go back and reflect on it and no, I love that and I think it’s a super valuable lesson for anybody, right? To not let your emotions get the best of you. So did you find that that was sort of obviously addiction was a major part of why they were there, but did you find that it had to do with emotions, a lot of it, or was it just, you know, they’re hanging around with the wrong crowd or what do you find the culprit?

00:07:17:08 – 00:07:19:02 Scott Thompson: Let’s say people, places and things.

00:07:19:02 – 00:07:19:11 Scott Dillingham: Okay.

00:07:19:15 – 00:07:42:20 Scott Thompson: So, yeah, people for sure. The people you hang out with, the places that you go, you know, the things that you do, that’s definitely a huge aspect of it. The other part is learning to handle emotions, you know, in a healthier way because maybe they grew up in an environment where their parents didn’t handle things a certain way, and that’s learned behavior and once you develop that at a young age, it’s really hard to change.

00:07:43:01 – 00:07:43:08 Scott Dillingham: Yeah.

00:07:43:14 – 00:07:46:10 Scott Thompson: Yeah, definitely possible. But you know, it takes some work.

00:07:46:15 – 00:08:05:08 Scott Dillingham: It does for sure. No, I love that. So cool. So no, what I want to do now is sort of tie it into real estate. And then I do have a random question for you that’s totally unrelated. But you said something about your childhood. Maybe I’ll you know what? Let’s start there. You mentioned that when you grew up, you wanted to be a pilot and did you ever fly a plane? Did you ever do that?

00:08:06:04 – 00:08:09:05 Scott Thompson: No, no. I just watched Top Gun and it seemed pretty cool.

00:08:09:21 – 00:08:10:15 Scott Dillingham: Fulfilled you?

00:08:10:22 – 00:08:16:02 Scott Thompson: Yeah. Yeah. Seeing Top Gun, seeing Tom Cruise, that just seemed like a fun thing to do.

00:08:16:03 – 00:08:16:19 Scott Dillingham: Nice.

00:08:16:19 – 00:08:17:19 Scott Thompson: Yeah, yeah.

00:08:17:19 – 00:08:34:00 Scott Dillingham: Cool, cool. No, I was just curious if you ever got around to doing it so you can do it. Did you know like they have it at the Windsor Airport? I just did it last week, actually. You do an introduction course to see if you want to get your pilot license and they’ll let you fly the plane. They have someone with you who guides you. But yeah.

00:08:34:11 – 00:08:35:06 Scott Thompson: I didn’t know that.

00:08:35:06 – 00:08:35:22 Scott Dillingham: Super cool.

00:08:36:04 – 00:08:47:19 Scott Thompson: I did know because I took my girlfriend on a plane tour or a plane ride around Windsor, Essex County and it’s crazy. They can get too Leamington in like 15 minutes in a plane, if not 10.

00:08:47:19 – 00:08:48:16 Scott Dillingham: Yeah.

00:08:48:16 – 00:08:52:10 Scott Thompson: But yeah, it was a pretty cool experience. So yeah, maybe that’s something I will do.

00:08:52:22 – 00:09:14:01 Scott Dillingham: It’s super cool. I don’t know. I’m doing it for fun. That’s why I ask, because it’s something that I like. I’m doing it for fun. I don’t want a career out of it, but it’s just one of those things, right? Me like you. When I was little, I thought, you know, it’d be cool to fly a plane and now I’m at the age where I’m like, I’m going to just do it. It’s what I want to do. So here we are. But no cool, I know. So that was random. But I’m just curious.

00:09:14:01 – 00:09:16:09 Scott Thompson: It’s all good, you should put a LendCity flag at the back of the plane.

00:09:16:09 – 00:09:17:14 Scott Dillingham: I’m going to.

00:09:17:14 – 00:09:18:14 Scott Thompson: Yeah, perfect.

00:09:18:14 – 00:09:27:04 Scott Dillingham: Once I have the license where I can fly myself, I’m going to do that. And my partners, whoever I work with, I’m going to have their banner flying behind too.

00:09:27:04 – 00:09:28:14 Scott Thompson: All right. Throw mine up there, too.

00:09:28:17 – 00:10:02:22 Scott Dillingham: All right, I’ll do it. So cool. So, no, I want to tie this back into real estate and for those who are listening as well. Scott does a lot with investors. So this is where this kind of all ties in, but people buying their houses or investment properties, it’s one of the biggest purchases that they’re going to make right in their life. So let’s touch on how you’ve used, what you’ve learned, helping people in the past and how it helps you to become the best realtor for them now and for them to make their next investment or their home purchase an easier process.

00:10:02:22 – 00:10:09:02 Scott Thompson: Yeah, for sure. So in social work they always talk about these transferable skills.

00:10:09:02 – 00:10:09:14 Scott Dillingham: Okay.

00:10:09:14 – 00:10:27:05 Scott Thompson: With one job to the next, all these skills kind of overlay. But I didn’t really think of it, you know, heading into real estate, like how applicable social work could be, you know? But it’s all about building relationships, building trust. You’re working with people; you’re helping them to achieve a goal. It’s just in a different setting.

00:10:27:05 – 00:10:27:11 Scott Dillingham: Yeah.

00:10:27:11 – 00:11:01:21 Scott Thompson: Right and so the more I started meeting with people and showing around homes and taking them through the process, the more I felt like I kind of am a social worker in a sense, but I’m a real estate agent too. So one of the first things I noticed is, you know, again, people need to trust you, right? One of the things that kind of helped me back from real estate is like, I’m not this flashy, fast talking, maybe guy that really sells something, maybe the way, you know, that guy does on what’s that movie Leonardo DiCaprio.

00:11:02:14 – 00:11:03:01 Scott Dillingham: With the stocks?

00:11:03:01 – 00:11:03:16 Scott Thompson: Wolf of Wall Street

00:11:03:16 – 00:11:04:16 Scott Dillingham: Yeah Wolf of Wall Street, yeah.

00:11:04:16 – 00:11:46:05 Scott Thompson: Yeah, I’m like well, I’m not that guy, so I couldn’t be a real estate agent. But I said, you know, let’s give it a shot. So, you know, I like working with people. I love learning about houses. So let’s give it a shot and once I started sitting down with people, I’m talking to them like, why do you want to move? What are you looking for in a home? What’s important to you? What’s not important to you? Right? So I got to know them and then as we started walking through the home, one of the first things I would do is look at their facial reactions, look at their body language, like, do they like this home? Do they not like the home? You know, if they’re giving me a vibe that like, I hate this place, I’m not going to sit here and say, well, we’ll look at this kitchen or look at this or look at that. Like, look, oh, awesome. This place is right.

00:11:46:05 – 00:11:47:00 Scott Dillingham: Yeah.

00:11:47:00 – 00:12:51:05 Scott Thompson: Because they’re just going to think like, this guy is not getting it. Like, I don’t like this place. Leave me alone. Right? So that was really important and then just being honest with people, right? A lot of flips nowadays. They just throw lipstick on its man. They’ll paint, pot lights, kitchen counter tops, some laminate flooring and the place looks awesome and yes, that is what sells homes. But, you know, we had an experience last week where all that was done, but the foundation wasn’t taken care of. Right? So we actually seen some water seeping very minimally at the baseboards and on upon further review with an inspector, we found that there was water seeping in and there was mold around all the bottoms. Right? So just being able to be transparent because, you know, if that person like they love the home, but if they bought it, it would have been a nightmare. Right? So looking out for clients’ best interests is definitely something that translates into real estate.

00:12:51:11 – 00:13:12:10 Scott Dillingham: No, that’s so cool. So let’s talk about the emotional side of things, right? So I know that was something that was really big with your social work. How do you in the real estate market, how do you have people not use their emotions? Because I know a lot of times where there’s bidding wars, it’s emotional, based, a lot of times. Right? So how do you help people with that, with real estate?

00:13:12:14 – 00:13:49:12 Scott Thompson: Yeah, it’s a good question because it comes up quite a bit. You know, I’ll be with the client and we’ll go and take a look at a few homes and it could be like the first, maybe even the second time we meet and they’ll see something. They love it, you know, like they can picture themselves living there and they’re like, okay, let’s write an offer and I said, okay, well, do you want to check out some other homes first? I know with myself, like I’m a human being to the end of the day and I can make emotional purchases. I’ll go into a store and I’ll fall in love with something and you know, I want to drop money and then I won’t look at the other stores. The rest of the mall right?

00:13:49:12 – 00:13:50:01 Scott Dillingham: Yeah.

00:13:50:01 – 00:14:34:02 Scott Thompson: And then I’ll get that buyer’s remorse, you know, not over a pair of shoes or a jacket, you know. But we’re talking about houses here. This is a huge, lifelong investment. You know, this decision will change your life and so I try and tell people, hey, look, you know, this is a great home, but the likelihood of you finding another home that you love is very possible. We probably will find when next week or a week after, you know what I mean? And I want you to make sure that you love the area, you love the home. You’ve looked at all of your options before making a decision like that and, you know, sometimes it’s like, oh, I don’t know Scott. Like I really like this home and I say, you know what? Let’s go home, sleep on it. You know, let these emotions kind of unravel, talk to your partner, talk to your family.

00:14:34:02 – 00:14:34:12 Scott Dillingham: Yeah.

00:14:34:12 – 00:15:06:02 Scott Thompson: And then if you wake up tomorrow and you feel the same way, you know, then we can talk further. But I always tell people to kind of like, take it easy. I had this guy call me the other day and he said, oh, I love this home. Can we write an offer? Like, well, do you want to see it? He’s like, oh, I don’t know. It seems fine to me. Like, Let’s just go check it out. We went and checked it out and he was like, man, I’m glad I didn’t buy this house. Like, yeah, like there’s other options out there and we got to. I just want to help people make informed decisions and I want to let them feel like they’re a part of the process so.

00:15:06:02 – 00:15:25:08 Scott Dillingham: Yeah. So it’s funny because in the beginning you said like sleep on it, right? That’s what you would do with your social work. You tell him to sleep on it, not to trust their gut, which seems like the same thing, like the first instinct of your gut, right? Like wait on it. Do you have them write things down on the property or no? That they like or don’t like?

00:15:25:13 – 00:15:40:22 Scott Thompson: Sometimes. Yeah, we’ll talk about, you know, some pros and cons. You know, we’ll like, you know, just kind of like weigh everything out, you know, and then sometimes people will see the price and it might be a bit out of their budget.

00:15:41:06 – 00:15:41:15 Scott Dillingham: Yeah.

00:15:41:15 – 00:16:15:18 Scott Thompson: Right and they fall in love with it and it’s like, oh, well, I’ll quit smoking or I’ll sell my car or I’ll do all these things. So I can pay for the mortgage. But the end of the day, it’s like, are you really going to do that? You know what I mean? Are you going to be house rich and cash poor, right? I don’t want people to do that either. Meanwhile, you know, there is another house that they may could have done the same thing to. Maybe they could have bought 100,000 less and put in 20,000 right? And made it their own. It would look just as good, but with their own finishes, you know. So these are other options to try and help people walk through.

00:16:15:18 – 00:16:26:16 Scott Dillingham: You know what I noticed about real estate in every city is different, but with our market here that even going one street over can have a drastic difference in house pricing. But you’re still in the same area.

00:16:26:16 – 00:16:27:05 Scott Thompson: Mm hmm.

00:16:27:05 – 00:16:32:10 Scott Dillingham: So you can still get that area, but literally one street over and you can save tons of money, which is pretty cool.

00:16:32:20 – 00:16:33:13 Scott Thompson: Absolutely.

00:16:33:13 – 00:16:36:09 Scott Dillingham: Now, another random question for you, because I’m a random kind of guy.

00:16:36:09 – 00:16:36:17 Scott Thompson: All right.

00:16:37:16 – 00:16:45:03 Scott Dillingham: When you found your gym, did you look at multiple gyms or did you was it love at first sight?

00:16:45:10 – 00:16:46:18 Scott Thompson: Oh, it was love at first sight, I think.

00:16:46:18 – 00:16:47:01 Scott Dillingham: Yeah.

00:16:47:01 – 00:16:47:17 Scott Thompson: Yeah.

00:16:47:17 – 00:16:48:15 Scott Dillingham: You didn’t sleep on it?

00:16:48:23 – 00:16:50:04 Scott Thompson: I didn’t sleep on its no.

00:16:50:04 – 00:16:50:17 Scott Dillingham: You knew.

00:16:51:13 – 00:17:11:15 Scott Thompson: Yeah, it was it was GoodLife, you know, it’s flashy. They had all the best equipment. I didn’t care about the price. I didn’t care about the drive and then, you know, I’m driving there all the time and I’m driving past this nice gym. That’s a lot cheaper every day and I’m wasting 20 minutes and I’m like, oh man, I probably should go there. So I end up making the switch.

00:17:11:15 – 00:17:13:03 Scott Dillingham: Nice and the new gym’s good?

00:17:13:10 – 00:17:14:02 Scott Thompson: Yeah, it’s good.

00:17:14:06 – 00:17:14:22 Scott Dillingham: That’s awesome.

00:17:14:23 – 00:17:16:01 Scott Thompson: Yeah, yeah.

00:17:16:07 – 00:17:44:16 Scott Dillingham: Perfect. I know it’s random, but I was just curious if you if it was love at first sight there. So perfect. So I know you have an example as well where an investor, a smart investor, he didn’t use his emotions to make the purchase. He worked with you and your team to run the numbers, analyze the property, and they found one that really works. Could you dive into some numbers and sort of the process that you guys went through to make sure this is a good buy?

00:17:44:16 – 00:18:09:17 Scott Thompson: Yeah, absolutely. So I’ll use a different example just to kind of set the story for this one. I had a client reach out to me and he said, you know, I really like this home. I want to buy at this price. Can you give me my net proceeds, my cap rate on all of this? I said, well, we need to find out what you’re preapproved for first. We need to find out what your rate is, because I don’t know your rate. We can’t tell you much right?

00:18:09:17 – 00:18:10:05 Scott Dillingham: Yeah.

00:18:10:05 – 00:18:18:06 Scott Thompson: Because your rates, you know, 3.4% variable and you know, or it’s 5.1% fixed, who knows what it’s going to be, right?

00:18:18:06 – 00:18:18:16 Scott Dillingham: Yeah.

00:18:18:16 – 00:18:30:07 Scott Thompson: And that determines everything. So I got him to get pre-approved with LendCity actually and we’re kind of in the works but with my client, I just helped buy a duplex last week first time homebuyer.

00:18:30:07 – 00:18:30:12 Scott Dillingham: Okay.

00:18:30:17 – 00:18:39:12 Scott Thompson: I love first time homebuyers. It’s exciting and you can really build that relationship. You can build that trust; you can educate them so that they’re making the right decision.

00:18:39:17 – 00:18:39:21 Scott Dillingham: Okay.

00:18:40:06 – 00:18:46:01 Scott Thompson: So this gentleman had the best idea that I recommend to anybody if you can. He bought a duplex.

00:18:46:04 – 00:18:46:15 Scott Dillingham: Okay.

00:18:46:15 – 00:19:23:18 Scott Thompson: Right? His idea was, you know, I want to have a tenant to pay most of my mortgage or all of it and I still have a nice place upstairs to offset the costs. Right? And so we but we basically did is we looked at the unit below and we figured, okay, how much can we get for this place? What’s the market rents, you know? And then we looked at what he’s preapproved at, what’s his rate? And then we crunched all the numbers, you know, and it’s more than just the mortgage rates, you know, what’s the taxes, what’s the insurance? You know, we got to include some maintenance fees in there every month, right? Because like your furnace might blow next month.

00:19:23:19 – 00:19:24:23 Scott Dillingham: Happens all the time.

00:19:24:23 – 00:19:27:20 Scott Thompson: Yeah, happens all the time. It’s, you know, it’s $4000 right there.

00:19:27:23 – 00:19:36:18 Scott Dillingham: Even little things like light switches. Like if the tenant breaks a light switch, even if it’s an accident. Right? It’s something that you have to repair. It’s. You just never know.

00:19:36:19 – 00:19:38:04 Scott Thompson: Yeah, always got to be ready.

00:19:38:05 – 00:19:39:04 Scott Dillingham: Yeah. Love it.

00:19:39:04 – 00:20:07:08 Scott Thompson: So, yeah, we calculated all those numbers and I gave it to him. I said, hey, this is what you can expect to get in rent. This is going to be your payments. Are you okay with that number? You know, we never like to fluff up numbers so like if the market rents, you know, say $1800 to $2200 for this home, I’m giving him about $1800. Like this is for sure what you could make. You could make up to this number. But let’s just stick with the lowest number just so that your numbers are safe. Right?

00:20:07:08 – 00:20:16:08 Scott Dillingham: I like that. Yeah, I actually like that. The lenders, just so you know, they use the average. So in your scenario, they would have used $2000 a month for the rent.

00:20:16:18 – 00:20:18:03 Scott Thompson: That’s, this one was $1800

00:20:18:03 – 00:20:19:19 Scott Dillingham: But it was $1800 to $2200.

00:20:20:06 – 00:20:21:08 Scott Thompson: $1800 to $2200. Yeah.

00:20:21:15 – 00:20:31:09 Scott Dillingham: So they would use $2000 for the client’s application. But if you’re using $1800, right? You’re building in that buffer for extra security. So I actually like that.

00:20:31:15 – 00:20:40:12 Scott Thompson: Yeah, for sure and the clients like it too, right? It’s like, okay, this guy is not trying to sell me on anything. He’s being honest with me and this is a very realistic number that I can get.

00:20:40:12 – 00:20:40:22 Scott Dillingham: Yeah.

00:20:40:22 – 00:20:50:22 Scott Thompson: You know? And so when I gave him all those numbers, we went through the house, we talked about the area, and we ended up getting the property at an amazing deal.

00:20:51:03 – 00:20:52:01 Scott Dillingham: Nice.

00:20:52:01 – 00:21:02:05 Scott Thompson: A duplex, $505,000 in a great neighborhood. So he has 78% of his mortgage being paid by this new tenant that he decides to bring in.

00:21:02:12 – 00:21:10:19 Scott Dillingham: That’s awesome and then if he gets married, grows a family, whatever the case may be, he can move out and then rent out the other side and then we’ll have positive cash flow.

00:21:10:19 – 00:21:12:15 Scott Thompson: 100%. 100%.

00:21:12:15 – 00:21:13:10 Scott Dillingham: Super cool.

00:21:13:10 – 00:21:21:06 Scott Thompson: Yeah. So he’s paying, you know, $500 a month plus utilities for a nice place to live. Like, where can you rent for that?

00:21:21:11 – 00:21:21:19 Scott Dillingham: Yeah.

00:21:22:02 – 00:21:22:10 Scott Thompson: Right?

00:21:22:22 – 00:22:02:16 Scott Dillingham: I agree. That’s what we did with our second house. So our first house was in Sarnia, a single-family house and then we moved to Windsor and we rented out the one in Sarnia, but the one in Windsor had to be a duplex. We actually did the same thing and it was amazing. Actually, my sister lived upstairs for a bit and now she, she works with me, so it’s kind of funny. But yeah, so we, that’s what we did and it works amazing. So I applaud you and your client for, for going that way because it’s so, it’s so awesome knowing that you have somebody helping pay your mortgage, right? So and then from there, right? What are his goals? Does he have goals to buy more down the road or is this just to help with his payments?

00:22:03:13 – 00:22:20:14 Scott Thompson: He wants to invest. He wants to build a portfolio and continue to do this because he’s a young guy. He’s my age, 35. You know, by the time he’s 50, he plans on having several and then, you know, he’ll have residual income, right? So he’ll be making, you know, four or five grand a month.

00:22:20:22 – 00:22:21:18 Scott Dillingham: Which is awesome

00:22:21:18 – 00:22:22:09 Scott Thompson: For doing nothing.

00:22:22:09 – 00:22:23:05 Scott Dillingham: Yeah.

00:22:23:05 – 00:22:33:22 Scott Thompson: Right? Just because he decided to invest in real estate at an early age and then you know, when the mortgages are paid off, he’ll be on a beach in the Bahamas just enjoying life.

00:22:33:22 – 00:22:34:19 Scott Dillingham: That’s it.

00:22:34:19 – 00:22:35:06 Scott Thompson: Yeah.

00:22:35:06 – 00:22:36:10 Scott Dillingham: I love it. Good for him.

00:22:36:10 – 00:22:46:14 Scott Thompson: Yeah and you could do it on a, you know, a humble income. Like, you don’t need to be a millionaire. You don’t need to make $100,000 a year to be making these transactions. You know what I mean?

00:22:46:20 – 00:23:23:09 Scott Dillingham: I’ve seen a lot of buyers that will max out what they can buy on their primary residence and then they’ve got no money left over for investing and I think it’s smarter to do what your client is doing, obviously, because I’ve done it too. But it’s to get something like that where maybe it’s not perfect, right? Because you are renting or half. So you don’t have that privacy of having your own place. But that’s a steppingstone, right? And if he does a couple like that, then eventually he’ll have so much income coming in, like you just said, where then he can get that massive home that he wants right? And then the tenants will pay for it. Not even him.

00:23:23:13 – 00:23:24:05 Scott Thompson: Absolutely.

00:23:24:11 – 00:23:34:16 Scott Dillingham: So it’s so smart to do it that way versus getting your best home that you can afford and then going from there right to it in stages and then you’ll get there eventually.

00:23:34:16 – 00:23:35:07 Scott Thompson: Absolutely.

00:23:35:07 – 00:23:35:18 Scott Dillingham: I love it.

00:23:36:06 – 00:23:53:15 Scott Thompson: In a couple of years when he has multiple properties and he’s doing very well with it and making passive income, you know, his friends are going to look at him like, man, like I wish I would have started when I was your age. I wish I would have listened to you because they might be looking at him like, oh, why are you doing that? You know what I mean? But I mean, it’s going to pay off in the long run.

00:23:53:15 – 00:23:58:09 Scott Dillingham: And then they’re going to send them to you hopefully. Right. Because they’re going to say, look, it was Scott who helped me get here.

00:23:58:16 – 00:23:59:22 Scott Thompson: I don’t see why not.

00:23:59:23 – 00:24:00:17 Scott Dillingham: Yeah, that’s it.

00:24:00:23 – 00:24:03:22 Scott Thompson: I think he’s just happy to be out of his parents’ house. For starters.

00:24:04:12 – 00:24:07:08 Scott Dillingham: I would be too. Especially if he’s at 35.

00:24:07:08 – 00:24:07:17 Scott Thompson: Yeah.

00:24:07:17 – 00:24:11:17 Scott Dillingham: You said he’s your age, so. Yeah. I’d be happy to get on my parent’s house at 35.

00:24:11:17 – 00:24:12:18 Scott Thompson: Yeah, I think so. Yeah.

00:24:13:10 – 00:24:24:08 Scott Dillingham: Cool, cool. So do you have any other tips or things that you share often with investors or regular buyers, just about mindset or just anything in general about buying real estate?

00:24:24:10 – 00:24:45:10 Scott Thompson: Yeah, there’s a lot. I think the first thing that comes to mind is, you know, the state of the market right now, you know, there’s a lot of talk. The market’s going to crash. I’m just going to wait. But a lot of that you hear from the media and the media is always scaring people and they scared people with COVID. They scare people with everything.

00:24:45:10 – 00:24:45:22 Scott Thompson: Yeah.

00:24:45:22 – 00:25:42:09 Scott Thompson: Right? You look at the Detroit news and if you’re not around this area, you think I’m never going to Detroit because of what’s going on. But I go down there all the time. It’s safe, never had any problems. You know, it’s a great place to hang out and real estate is the same way, like, you know, interest rates have gone up a couple of points over the last six months, but they’re still historically low. You know, people were just kind of spoiled, getting 1% and 2% mortgages. It’s not sustainable right? So it was just a matter of time and this has really happened like four times in history where the interest rates have spiked up like this and usually it’s taken about, you know, 17 to 24 months for them to cool down, always go back to an all time low again. For the most part, they go down to a really low point and right now, so what’s happened is like anytime an interest rate goes low, the prices usually go high.

00:25:42:09 – 00:25:42:22 Scott Dillingham: Yeah.

00:25:42:22 – 00:25:58:07 Scott Thompson: You know, because people and you know this but for the audience out there that doesn’t know this is when you’re getting preapproved at 1%, you can buy a lot more of a house right? So people were going nuts. So now that they’ve gone up, you know, prices since March have gone down about 20%.

00:25:58:09 – 00:25:58:16 Scott Dillingham: Okay.

00:25:59:00 – 00:26:31:06 Scott Thompson: So you’re having a great deal right now. Yes. You’re going to pay a bit more interest than, say, a couple of months ago, but it’s still a good rate. Right? And what happens when the rates go down now that you have a property they bought at a great price and you’re going to have a great rate, right? So it’s a really good opportunity right now to purchase. So that’s one good tip that I always give people. I do think the market will start to go up contrary to mass belief.

00:26:31:06 – 00:26:47:21 Scott Dillingham: Yeah, I do too. It’s a cycle. It always goes up. I think even if rates stayed exactly where they are for ten years from now, let’s just say the house pricing is going to go up and up and up. There’s a lot of demand in our area and in Canada. So I agree with you fully.

00:26:48:04 – 00:26:52:11 Scott Thompson: Absolutely. Yeah. There are so many economic factors. Everyone’s heard about the bridge and the hospital and

00:26:52:11 – 00:26:52:20 Scott Dillingham: Yeah.

00:26:52:20 – 00:26:54:21 Scott Thompson: The battery plant, the $5 billion battery plant.

00:26:55:10 – 00:27:00:10 Scott Dillingham: And that’s not Tesla. Tesla, did you hear that? They want to have a battery plant in Canada, too?

00:27:00:10 – 00:27:00:16 Scott Thompson: I don’t blame them.

00:27:00:16 – 00:27:01:14 Scott Dillingham: They’re really considering it.

00:27:01:14 – 00:27:02:00 Scott Thompson: Might as well.

00:27:02:01 – 00:27:17:22 Scott Dillingham: It was just he they just talked about it like two days ago and so in the back of my mind, I’m like, is that coming here because of all the other stuff that’s coming here that’s the same type of thing? Probably not. This is speculation, but potentially one is coming to Canada, which is cool.

00:27:18:01 – 00:27:21:14 Scott Thompson: We are the Motor City of Ontario or maybe Canada. So…

00:27:21:14 – 00:27:39:03 Scott Dillingham: I’m thinking like we have a good chance. But even if even if that doesn’t happen, there’s still a lot of demand and market things that would allow us to grow and even if we’re not talking about Windsor and Essex County, right? And we’re looking at real estate as a whole, it always goes up over time. So I agree.

00:27:39:18 – 00:27:51:08 Scott Thompson: Yeah and the other point, too, was the province of Ontario released a stat last summer that southwestern Ontario would grow on population by 35% by the year 2035.

00:27:51:08 – 00:27:52:07 Scott Dillingham: Okay.

00:27:52:07 – 00:28:09:22 Scott Thompson: Largely due to immigration right? With our politics and the, you know, the immigration laws. So many people are coming here. It’s a safe place to live. There are jobs. There will be more jobs, you know? So show me a city with a large population that doesn’t have high house prices.

00:28:10:08 – 00:28:10:22 Scott Dillingham: Yeah.

00:28:10:22 – 00:28:17:03 Scott Thompson: I don’t really know any. So Windsor is just going to continue to grow and grow. I always say that we’re going to kind of be like a mini-Hamilton.

00:28:17:12 – 00:28:18:03 Scott Dillingham: Yeah.

00:28:18:11 – 00:28:33:22 Scott Thompson: So yeah, I think that it’s definitely a good spot to invest. I mean, I love it here. I’m never moving. Another thing too, aside from, you know, buying right now with investors, I always like to tell them, you know, what are the big-ticket items.

00:28:34:03 – 00:28:34:07 Scott Dillingham: Yeah.

00:28:34:13 – 00:28:56:16 Scott Thompson: You know? So, yeah, you might get a home at a really good deal, but, you know, does it need to be waterproofed. You know, it’s $15,000 to $30,000, you know, the roof, you know, it could be $7,000 to $10,000, the AC, the HVAC, the windows, you know, it’s like $15,000 to $20,000 right there. Right? So I like to walk people through and educate them that way when they’re making a purchase.

00:28:57:07 – 00:29:37:00 Scott Thompson: Say, if you’re doing a flip, it’s like, okay, I want to buy at this price. I have my closing costs. I have all my renovations, what’s selling in that area that’s completely redone, you know what I mean? So you have to incorporate all these factors before making a decision. Like the worst thing that would happen is, you know, I tell my client, you know, hey, this is a good deal. You know, they spend the money on the renovations and then they sell at the same price or they just break even or make $5000, you know what I mean? I don’t want them to do that either, cause it’s a lot of work, it’s a lot of risk. So everything is calculated. So it’s all about numbers, it’s all about research, providing people with the facts so they can make an informed decision.

00:29:37:03 – 00:30:25:00 Scott Dillingham: I agree and just to share on that, just to elaborate a little bit of a tip to say you’re somebody who is buying to invest or you’re going to flip or renovate a property heavily. A lot of times the appraisers or if you’re selling it to clients, right, if it’s three months later, they’re going to be like, how did the home go up so much in three months? And they question it. But I find in those properties and projects, if you can delay selling, maybe rent it for a year and then sell, then when you’re asking a much higher sales price, people will look at it, be like, okay, well, they bought it a year ago. They did tons of stuff to it. You know, we can support the value. There’s just mental trigger when you just add a little bit of time than people think, your properties worth a lot more. Do you know what I mean? Does that make sense to you?

00:30:25:00 – 00:30:25:12 Scott Thompson: Absolutely.

00:30:26:06 – 00:30:33:07 Scott Dillingham: So for somebody flipping and investing, I think the long game is the best game to make the most money personally.

00:30:33:09 – 00:30:51:17 Scott Thompson: 100%, 100%, you know, and people kind of like, look at me sometimes some of my clients that own these properties and they’re just like, you know, I’m thinking of selling. I’m like, well, why don’t you just hold onto it and they’re like, what? Why? Because it’s real estate investing. It really is a long game and it should be for the most part.

00:30:51:17 – 00:30:52:06 Scott Dillingham: Yeah.

00:30:52:06 – 00:31:16:16 Scott Thompson: You know, because I’ve met so many clients that said, you know, oh, I bought this place 20 years ago. I sold it back five, six years ago. Yeah, I made some dollars. But if I would have held on to it, that property would be worth double what it is today. I hear it all the time. So I mean, if you can hold on to I mean, obviously, certain people are in different situations. They need to sell.

00:31:16:16 – 00:31:17:04 Scott Dillingham: For sure.

00:31:17:09 – 00:31:21:18 Scott Thompson: But yeah, hold on to those investments because you’re going to thank yourself one day.

00:31:22:02 – 00:31:44:12 Scott Dillingham: And I like that you said that, too, because you at the beginning of this, you talked about trust, right? So you’re telling people when your commissions online don’t list right now, hold on to the property. Right. So it goes back to that trust thing. I think even just that statement should help build a lot of trust and people listening to this about you like it’s a really cool thing that you would tell somebody that.

00:31:44:12 – 00:31:57:18 Scott Thompson: Yeah, yeah. You know, I try and be transparent and real and end of the day it’s like I want people to treat me like that, right? Whatever real estate I had before and like I would expect them to be honest and upfront with me too, so.

00:31:58:00 – 00:32:13:15 Scott Dillingham: No, that’s awesome. Cool. So let’s say someone they want to invest in the area or maybe they are already here in the area with a realtor, but maybe they don’t trust them. Maybe they’re looking for someone different. How would they get in touch with you?

00:32:13:15 – 00:32:33:15 Scott Thompson: They can reach out to me, my phone number is 2267733162. I am with Team Goran Remax so I have an email they can reach out to me. Scott.T@teamgoran.com. I have a website. All right. So you can find all of that on, on Instagram, on Facebook, stop by our office.

00:32:33:15 – 00:32:41:07 Scott Dillingham: Yeah. We’ll put the links below to so people can see that. So awesome. Well, thanks for coming on the show today. I’m so glad to have you.

00:32:41:17 – 00:32:42:14 Scott Thompson: Thanks for having me, Scott.

00:32:42:14 – 00:32:43:18 Scott Dillingham: No problem. Take care.

00:32:43:20 – 00:32:44:12 Scott Thompson: All right. Take care.

Watch The Podcast

Listen to The Podcast