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EPISODE 11: JOINT VENTURE REAL ESTATE INVESTMENTS WITH ANDREW BRENNAN

EPISODE 11 JOINT VENTURE REAL ESTATE INVESTMENTS WITH ANDREW BRENNAN
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Table of Contents - EPISODE 11: JOINT VENTURE REAL ESTATE INVESTMENTS WITH ANDREW BRENNAN

Podcast Transcription

Sandy MacKay [00:00:00] Breakthrough Real Estate Investing Podcast, Episode 11.

Rob Break [00:00:24] Hello and welcome to the Breakthrough Real Estate Investing podcast, we put this show together to inspire you and help you break through to the life that you want to live through the power of real estate investing. My name is Rob Brake, and here with me, as always, is Cindy McKay. How are you doing, Cindy?

Sandy MacKay [00:00:44] Rob, I'm doing fantastic, as always, and happy to be here sharing some hopefully some really good wisdom and knowledge and tips with everybody. Again, we've got a great interview coming up. So I'm excited about that

Rob Break [00:00:56] fantastic interview, as always. Yeah. Yeah, I was really it just keep getting better every time.

Sandy MacKay [00:01:01] It seems like that's what it seems like. So that's coming up in just a couple of minutes here. Right now, we've also got our free gift for everyone out there called the seven freedom activators you can trigger in your property right now. And that's all about creating more freedom for yourself as a real estate investor and making your business more efficient and profitable.

Rob Break [00:01:22] So this is pretty exciting. We have a new segment today, Sandy, something that I think everyone's going to enjoy. We went to a good friend, Michael Domínguez, who was our interviewee on Episode four, and we asked him if he would be interested in sharing some of his knowledge on a more regular basis. And we came up with the idea of sort of like a quick tip that he could share with us. I think it's going to be really valuable.

Sandy MacKay [00:01:49] Yeah, it is. He's got some great stuff and everyone to go check out his our interview with him on episode four or two. We shared some really good, really good knowledge, especially on like investing for, I guess, new, newer investors and people looking to to really get into it and just how they can get started and what type of properties they should be looking for.

Rob Break [00:02:09] There was a really great interview. Yes, so I'm really looking forward to this new new segment. So here it is, Michael Domínguez with The Michael Minute.

Andrew Brennan [00:02:21] We've all heard the expression in real estate. The three most important things to consider when buying a piece of property is location, location, location. Well, investment, real estate is really no different. And what I mean by that is you're looking for a property that meets the right fundamentals. Now, what I'm referring to, fundamentals I'm talking about in your particular area is their population growth is their job growth is their quality. Transit close by is their shopping in the area. What I'd like you to do is to check out the website walk's guru.com. Now, I realize that not everybody is going to understand and know where that website is, but Tip would give you an indication of how the tenants actually think. And what I mean by that is they rank it based on how walkable the property is, and that is in many cases where the tenants want to be. Remember, you're not buying a property for yourself. And what I mean by that is that four bedroom subdivision home in a quiet street might be exactly where you want to be, but that's not exactly where the tenants want to be. So if you're looking for above market rents, low vacancy, you want to choose a property where the tenants want to live. Now, these properties in many cases might cost a little bit more. But at the end of the day and what I mean by that, I mean the first day of the month, you'll be very happy that you made that decision. This is Michael Dominguez with Michael.

Rob Break [00:03:55] That was great, Sandy.

Sandy MacKay [00:03:57] Awesome.

Rob Break [00:03:58] So I think that one's going to catch on. Definitely. I'm looking forward to a lot more of those.

Sandy MacKay [00:04:03] Yeah, it's terrific. Love his stuff and love what he brings to the table. So let's keep those going. Let's get them in here more often.

Rob Break [00:04:11] Yeah, he's doing it for free, too. So why the heck not, right? Yeah.

Sandy MacKay [00:04:14] Yeah, we're doing this all for free to, you know, basically so

Rob Break [00:04:19] well we are here for the well actually we're getting a lot of knowledge for free

Sandy MacKay [00:04:26] lobster and lobster. Hopefully we're sharing something decent too for everyone.

Rob Break [00:04:31] So, Sandy, you are, if I'm not mistaken, you're still laying out in the sun by your pool listening to this new VHO Bluetooth speaker that we were talking about in the last episode that we're giving away now, right?

Sandy MacKay [00:04:44] Well, I'm here right now. At least I got my I got a cold beverage them inside me. I'm just soaking up the sun. I'm listening to this nice, crisp sound. I'm listening to the the speakers that we got to give away

Rob Break [00:04:56] yourself back in the speakers. Are you doing.

Sandy MacKay [00:04:58] Yeah, exactly. I have our episodes on repeat, so I just kind of back here in the sun and it's awesome. I can I can listen to him, you know, I don't have any headphones on. I like that. I used to listen to all of them all over on the headphones and I just chill and I listen to them out loud. It's awesome. So I got disappointed. You know, I've given this speaker away. Kind of ruined my my days here now. And I'm going to actually have to go out and start work and doing some real estate business.

Rob Break [00:05:25] You'll leave your tanning spot. Yeah, that's too bad. You know, the vacation is almost over for you, but there is still some time left to enter yourself into this draw for this cool speaker that we're talking about here. It's a vho wireless Bluetooth speaker. It's a 360 M five model. And like I mentioned on the last episode, all you have to do is to get in on this contest is write us a review on iTunes. Hopefully it's a good one and then just drop us an email to for a breakthrough RCI podcast gutsier so that we are able to get in touch with you. And in the subject line, just write. I reviewed it and give us your iTunes name so that we'll be able to match up with your review and get back to you. And we're going to leave that open until August 15th. So anyone who writes is a review. By August 15th, they'll be entered automatically into the well, assuming that they send us the email, they'll be entered into the drawer. And, yeah, you'll be able to do what seniors do and just chill it and listen to break during my podcast and sipping a beverage. So that'll be sweet.

Sandy MacKay [00:06:39] And they can you know, they can host parties with the do it ever. It's got some other uses if they want to. I don't know why they would, but it's we're going to announce that on the September 1st episode, right?

Rob Break [00:06:48] That's right. Yeah.

Sandy MacKay [00:06:50] Yeah. We'll throw it a link to for the the prize in the show notes and yeah. You can go there and check it out for yourself.

Rob Break [00:06:58] Yeah, it sounds good. I think everyone will really like it.

Sandy MacKay [00:07:02] So let's get down to our interview with Andrew Brennan, like we said before, it's an awesome interview coming up here, and he's going to share with us the value of joint venture partnerships and how to attract investors for your deals. It's going to share with us the ins and outs of renovating rental properties. And he's going to talk about why he doesn't get out of bed for less than a 30 percent return on investment and how you can set yourself up to do the exact same.

Rob Break [00:07:30] It was a really exciting, very informative interview. I loved it. And I know everyone else will, too. So here it is, our interview with the Interbrand. We are very happy to have Andrew Brennan on the show today, author of The Ultimate Wealth Strategy Your Complete Guide to Buying, Fixing, Refinancing and Renting Real Estate. Thanks for taking the time to be here with us today, Andrew.

Andrew Brennan [00:07:56] It's my pleasure.

Sandy MacKay [00:07:58] Yeah, great to have you, Andrew. For the listeners out there, Andrew Brennan is a multiple award winning investor, skilled renovator and real estate investor educator. He has offered his experience to others through seminars, coaching, television, radio, public appearances, and in real estate magazines and in some podcasting now, too. And Andrew owns a large real estate portfolio in the Barrie, Ontario area. He specializes in working with joint venture partners to offer a hands off investment opportunities and is the author of The Ultimate Wealth Strategy, which we'll talk about more in the show, I'm sure.

Rob Break [00:08:37] Do you have anything you want to add to that or how does that sound?

Andrew Brennan [00:08:40] That's pretty good. I think you've got it all covered.

Rob Break [00:08:45] OK, so again, this may be the typical I've noticed. The thing about this first question is like it's always it seems like a boring question, but the thing is, you never get anywhere near close to the same answer from anybody. So how did you get started in real estate investing?

Andrew Brennan [00:09:02] Our actual first investment property was the home that my wife owned. So at one point six or eight years ago, we were looking at selling both of our properties to buy one larger properties, to blend our families together. And a friend of hers is also an agent, advised us not to sell it and to rent it out. Once I sat down, took a look at the figures, it made perfect sense just to hold on to it and rent it out. So that became our first one. And shortly after that, we just tried to buy as many as we could.

Rob Break [00:09:40] You do a lot of joint venture partnerships and we're going to talk about that here a little bit for the first part of the interview. And so what are you looking for in a joint venture partner? Who who would your ideal partner be?

Andrew Brennan [00:09:53] Well, you know, things change along the way. But as of today, I would say my ideal partner would be someone that could do multiple transactions, someone that, you know, doesn't want to be totally hands off but doesn't want to be really involved in the day to day. So we're looking for people that are busy professionals, perhaps young families don't have free time, but realize that they should be getting better returns on their investments. So we target those types of individuals.

Rob Break [00:10:29] So how do you go about targeting them, I guess, or how would you draw somebody and how would they find you?

Andrew Brennan [00:10:37] To be honest, most of the time it's referral. So, you know, if you talk to enough friends and family, I do pay a referral fee. So if you talk to enough friends and family and let them know what you're looking for, offer them an incentive of a referral fee, sooner or later, enough people will be interested. And it's just a matter of trying to close on those individuals. You know, other other people do things like marketing. I always recommend you should have a website. So even a simple Web site, you know, you can just copy something or buy a prepackaged template and just alter it to your personal information, but it adds a little bit of credibility. And to me, going out to try and find cold leads is very challenging in this business.

Sandy MacKay [00:11:29] So that changed what you look for in a partner like now compared to, say, when you first got started?

Andrew Brennan [00:11:36] Well, when I first got started, I guess I wasn't really sure what the ideal partner would be. So, you know, and often you're just really trying to find someone that's going to invest with you so you're a lot less selective. So as things change, you probably want things that are being easier, people with more funds, just so you're spending more quality time on the things that you're doing.

Sandy MacKay [00:12:05] What was your first joint venture deal? How did it work out? How did how did you maybe find the partner? How did you organize it all?

Andrew Brennan [00:12:12] Well, so we still own the first one. It's a it's a nice duplex in Collingwood. It was on the MLS. And at the time when my wife and I started investing, we had, I think, seven properties before we started looking for joint venture money. So at the time, it was on the MLS. Fixer upper. I thought it was a good deal, had a neighbor and a friend that. On a couple of properties, he used to come around, hear me talking about real estate. He had a couple of properties, but he's a police detective. Two young kids really didn't have time. So I approached him and, you know, together we did the deal and has been great ever since.

Sandy MacKay [00:13:02] So in your partnerships, is it set up basically your partners, are they putting in all of the money and you're doing what exactly what are you bringing to the table?

Andrew Brennan [00:13:12] It varies. So the partners do put in all the money and depending on the property. And it also depends on when I actually did it. Today, I do less than I did in the past because today I'm kind of in demand instead of me trying to find somebody. But it could be anything from some of our properties have professional management, some of them don't. Some of them have agreements where my company will do the maintenance, some of them don't. Some of them have agreements, mostly the older ones, that my company would do the maintenance and the management. But it can be whatever you want. All right. So, you know, often when you're starting out, you're more likely to either take a lower percentage of the overall profit or do more work. To get an equal share, but then things change, right? There's no there's no set structure.

Rob Break [00:14:08] Got it. Yeah, but generally, most time you're the one that finds the property, finds the deal and and you would be the one who would organize all of the work that needed to be done if there was any.

Andrew Brennan [00:14:21] Yeah. So sorry. As a setup of a property. Yes. Usually it would be the investor finding the opportunity, working with at least being the point of contact with the mortgage broker or the bank, the lawyer, all those things. Those all get set up. Lots of legwork up front. But going forward, then it can be a mixed combination.

Sandy MacKay [00:14:44] How do you actually find deals then? So you're finding the deals generally yourself, right? How do you look at them? How do you evaluate them? Like what do you consider a good deal for an investor to come in on with you?

Andrew Brennan [00:14:55] Well, I always tell people that I don't get out of bed unless I think it's going to make 30 percent on average per year. So that being said, it has to make at least 30 percent. It has to be in a certain area because I, I go from roughly Collinwood all the way up to a ratio. So I don't look at stuff and say Hamilton or Toronto or anything like that. But I do find deals, but people also come to me. So and then what happens is you establish a relationship with people. And I have several people that have bought multiple properties off. So as they transit transition in and out of their portfolio, they're looking to maybe dispose of some properties. So you do private sales like that? I do find them on the MLS. I do use an agent, so he finds me opportunities as well. So, you know, you got a. We use the multiple strategies. I don't do like I buy houses, signs and stuff like that. I just really haven't needed to.

Sandy MacKay [00:16:03] And so that comes down to what networking, getting to know people in the business, that type of thing, like how would other people, how to other people best set themselves up to to have deals coming at them as you as you say you do?

Andrew Brennan [00:16:16] Well, the one thing you need to do is you need to get out and network. So the more meetings you attend, for example, local club meetings, whether it be a national membership like rain, the more people you interact with, the more opportunities you have to tell people what you're doing, what you're looking for. And sooner or later, if you talk to enough people, something is going to come from it.

Rob Break [00:16:39] OK, now, so so your agent comes to you, they call you on the phone and say, I've got to a home run for you. So then you say, yeah, right. OK, I'll see about that. And then you go down and look at it. So what what kind of things are you looking for? How do you actually evaluate that deal?

Andrew Brennan [00:16:57] Well, it depends on the type of property. I do two strategies. Right? So I do a lot of undertake backs and I do six and refines. So if it's fixed and reify, you know, you need to try and figure out how much you want to net out and see sweat equity or profit work your numbers back from there. So you need to figure out what the value is going to be, how much you're going to fix or sort of spend on repairs, what kind of profit you want for your time and efforts. And then you come up with the purchase price if that looks good and then it's still profitable as a buy and hold. So when I say that, I mean still cash flows a decent amount, then that's a property you pursue. You know, I tell people that there's never a bad price. Sorry, there's never a bad property. It's just the price is right for the property condition. So, I mean, that's very vague. But as long as you kind of have an idea of what you're doing, you can create the good deal. And you'll stick with your numbers and your goals and you'll be fine, lots of times we go out there and we had hopes of, say, adding another bedroom or being able to do this and it just doesn't happen. So you just move on to the next one. Sometimes you go out there a little bit leery and think, oh, I can do this, this and this. And all of a sudden what you thought was going to be a single or double turns into a home run.

Rob Break [00:18:18] Well, the thing I really liked about your strategy is I took your course last winter. I think it was last January, actually. And what surprised me was that was that you're able to make a deal out of something that I wouldn't have thought was a deal. Like, you're really only looking for 10 with this strategy. You can make a deal work as long as the cash flow is like, you know, 10 or 15 percent below market value on the property, which really surprised me.

Andrew Brennan [00:18:46] It really it really comes down to when you're doing a fix and reify, you have to keep a few things in mind. You don't want to get emotionally attached to the fixtures and finishes of the property. This is a rental. So the things that you're going to have in your personal home, you're not going to spend for on a rental. You also have to understand which materials are so durable but cost effective. And then it's also the ability to manage a budget in the labor expense. The. Then time time frame can really make a difference, so you need something that's fairly quick to do it. Once you get experience to do a few of them, you'll you'll be surprised how easily you can pull them off. I mean, it's not it's not hard to find a property that, you know. Perhaps 80 to 85 percent of the potential finished or future price after repairs, it's just people get sometimes too concerned about how much work do you think there is? And there's really not that much work at all. Paint, I tell people, paint flying does wonders. A few other miscellaneous strategic things, and you can, you know, for a low budget, turn something into a nice rental.

Rob Break [00:20:10] What would be the time horizon for your investment with your joint venture partner?

Andrew Brennan [00:20:15] So, OK, so you're referring to how long we would hold the property. It really depends. I have some you know, traditionally there'll be, say, a five year deal, some are three. I've had some properties that are three or deals, but we've held them for five years. So it really depends. I mean, you know, if everything goes as planned, most of the time, you don't necessarily need to get rid of the asset. So you just keep just keep on going.

Rob Break [00:20:47] How did you that you've been working with those turn and keep on constantly turning them over, because that's a good one, by the time, you know, after about five years, then you're constantly turning over properties, constantly bringing in like that nice chunk of change. Sounds like a pretty good way to go.

Andrew Brennan [00:21:03] I've only sold half a property since I've been in this business.

Rob Break [00:21:06] OK, so then what happens when your investor wants out?

Andrew Brennan [00:21:11] Nobody has come to me and asked to get out. They just they just keep letting it ride for lack of a better term.

Rob Break [00:21:17] OK, so you wouldn't say your signed contract with them or which is how you do it. I guess you come up with the deal and the terms and all of that. So one of your things would be in there that, you know, in five years will go through again and sign again.

Andrew Brennan [00:21:33] Some of them just say that the agreement will stay in effect until then. So it might be a three year or five year, but the agreement will stay in effect until a new term is entered into or our new agreement. Some of them will have once the time frames up. Right, of first refusal. So, you know, three years has gone by, I want to sell, so I may go to the other part and say, listen, I want to sell. You've got 60 days to let me know if you want to buy me out. If not, we're going to the market. But but it just hasn't happened yet. You know, there's there's things like, you know, you can put in more hard terms, like a shotgun clause, or we will sell when a certain percentage of appreciation is achieved to me. You know, I don't put in those firm conditions. I just rather have a relationship. And if someone came to me and said that we need to sell or I need to sell them, OK, let's work our way through that. Or if it's, you know, let's hold on to it, then let's hold on to it. Right. There's no there's no reason to get rid of a good property.

Sandy MacKay [00:22:36] So what does an investor say if you're sitting down with someone for the first time and you're kind of saying we offer investment, we are going to get a return of I don't know what you would promise them, but you're probably saying something like a minimum of 30 percent annual return, right?

Andrew Brennan [00:22:51] Well, I would say they would share 30 percent as a minimum. Right. But you never, never want to promise or guarantee. Right. But you let them know that these are the types of properties I invest in. Our goal is to achieve this.

Sandy MacKay [00:23:03] And what are they like? They got to be pretty excited when you're mentioning that type of number. They got some very high number compared to what most investments offer, right?

Andrew Brennan [00:23:13] Yeah, and it's funny because I've lost opportunities or I guess joint venture partners because I've had a particular opportunity that may produce a one hundred percent using the strategy and they don't believe you, so they don't do it right. So in reality, I could find. Opportunities with less return and more people believe it and are more likely to do it because using the use of the buy, fix and refinance strategy, we've got properties that produce over 100 percent per year. Yeah, I can believe it's not it's not hard to do. We got one right now. You know, we've owned it for two months and we should be getting every single dollar back in probably two or three weeks. Right. And we will still all the cash flowing triplex,

Sandy MacKay [00:24:00] so on the refinance, you're pulling out everything that you've put in pretty much.

Andrew Brennan [00:24:04] We're hoping to get 10 grand plus everything. So this particular one, we had to pay cash. The investor put in two hundred three thousand, but we're hoping to get about 215 back from the bank. Awesome.

Rob Break [00:24:17] That is incredible.

Andrew Brennan [00:24:19] Now, those don't happen every day. But I mean, obviously, that's a return on investment greater than a hundred percent ongoing because you can calculate it, right? Yeah. Yeah.

Rob Break [00:24:28] It's infinite. Yeah. So how do you estimate repair costs then? It's quite a bit different than than estimating for a retail slump, and that's one of the things that it's hard for me to wrap my head around. Yeah, it's it's

Andrew Brennan [00:24:45] a challenge if you don't have experience and, you know, some people try and do it themselves or a portion of themselves, some people want to do it all themselves. Some people want to do nothing. So if you're doing a fix and reify and you're going to, let's say, have contractors do it all, there's a few things you can do to keep the cost down. One would be, say, buy your own materials, because contractors sometimes don't realize, you know, they should be using different materials for rentals because a lot of them don't do rentals. They just do say people's personal homes. And sometimes they also add markup on them. OK, you should be getting multiple quotes, and I wouldn't you know, things like you don't necessarily need a plumber to do all the plumbing. 90 percent of the plumbing stuff can be done by a regular handyman. OK. Things like perhaps penalties for not finishing on time, so they're not going over budget and time frame, a lot of times people can do some of the minor stuff themselves to keep the cost down. So maybe a painter. And the other thing is you may not want your handyman to be the painter. You know, your handyman may be charging you say 30, 40 bucks an hour, and he paints at half the speed a full time painter does. Right. So and that's you know, not everybody has all those different types of connections. Right. So that comes back to, again, getting out there, networking with people, asking for referrals. Yeah, right. If you're just going to go to one contractor, say, I want everything done, you use the materials that you or here's say kind of what I want for materials. You're going to end up with a with a much higher bill than if you were maybe acting, as, you know, the to a general contractor yourself, just managing the trades. Right.

Rob Break [00:26:40] Well, just out of curiosity here, then, let's use a roof, for example. If you have you're calling around and then you say, I want to get this roof done and they come back to you with estimates. There is there's going to be like, how do you how do you differentiate between the one that's cheaper? Because the labor is cheaper. They're cheaper because their materials are cheaper or or both?

Andrew Brennan [00:27:04] Well, what you can do is write up a scope of work. So, for example, your roofing scenario, I think code is three feet of ice. Build up protection. Some roofers use six. So right there, there could be a difference between, you know, the cost because you've got extra materials and a little bit extra labor to put down the second layer. Right. One thing that they may do or may not do is, you know, they might charge you the actual fee for disposal as opposed to a flat fee for disposal that they charge everybody. Right. They may charge you an additional fee for a bed or they may have their own bed or I guess usually what they call it, a dump trailer to remove shingles. Right. So if you have a scope of work that says you will provide twenty five year life shingles, this color ice protection here, valy, Ballies, aluminum in the valleys and you will remove all material and then that's very cool. Right. So that way you can compare them. Mm hmm. OK. And if there's a difference. You know, then you got to ask, is this, you know, if there's a great difference, then you got to ask something's not right here because usually they're the same or usually get a couple of relatively the same.

Rob Break [00:28:24] I mean, I guess one idea is you could get them to itemize that that estimate, too, could you not? You could say, like, what is the cost of the shingles and then what is the cost of the labor? Or I'm just trying to figure figure out different ways of of doing this for myself, because I just recently came across that that exact problem obviously was with the with the roofing. And and you don't know if they're just using these crummy shingles that they're just throwing on there and they're no good

Andrew Brennan [00:28:54] ones, like for a roofing example. A lot of roofers will charge by the bundle, so they might charge you so much per tarof. So this is what we charge for the tariff and laborite. This is what we charge to install per bundle and you can even supply the material. So, you know, one of the strategies I'd like to do is if you use the deferred payment cards, when you're doing the fix and refinance, you can call up your local supplier, you know, big box store and have the shingles, the materials delivered. And they're just going to charge you so many dollars per square footage per bundle installed. So it's very easy to then compare one call to another when they're all charging, you know, per bundle. Right, when you get into some of the other stuff, that's a little more complicated, so, you know, how do you charge for general renovations as you demolish things and put them back? Right. You can't because you never know what's coming up. Right. So, you know, if you start with a scope of work and you try and be as specific as possible, when you hand something over to the contractor, quote, you're more likely to get a more realistic price that you expect to pay to what you end up paying.

Rob Break [00:30:11] And do you have some kind of a like a spreadsheet or something that you use for that as you go through floors? This needs to be done. This caller, this type of flooring, I standardize on everything.

Andrew Brennan [00:30:28] So, you know, we probably put in this year two hundred cases of the same tile, exact same tile. We buy two colors of paint. We we for flooring, like we buy in lower or a laminate, we will fluctuate in color just based on if there's a color on sale. But a lot of the stuff, it's left over and it's half used. You can't take it back. You log it to the next job. Right. For example, if you paint every single place the same color, you always know what color to bring when you need touchups.

Rob Break [00:31:01] Yeah, that's right. Right.

Andrew Brennan [00:31:03] So, you know, once you keep using the same materials, you'll get an idea of what they cost. But even people that are new, you know, you can go down to Home Depot with a list of what you think you need and just go walk around and mark down the prices and create your own cheap. You know, because if you're if you're doing a. A project. And you need so many square footage of flooring. Well, you know, it's a simple calculation. Here's the price. Add some tax, multiply by how much I need there. Is that right? And as long as you allow, you know, you're always going to have to have miscellaneous amounts because you spend money on screws, caulking and cleaning supplies. Those things always kind of get overlooked. So you always need that amount for that. But a lot of people, you can you can do a decent job of budgeting myself. I usually just kind of eyeball it. Now. I walk into a property and I have a general idea of how much has been spent and I'm usually within 10 percent. But that, you know, that comes with experience. I used to sit down and figure it all down to the last couple of bucks to.

Sandy MacKay [00:32:14] If you're doing renovations, then on a property, for instance, in a partnership situation, then you're actually doing. I know you do or you used to do it. Certainly a lot of renovations yourself. Would you then would you be actually paying yourself in that situation? Like, would you be charging the partner or the investor, I guess, on your time in that? Or is that just something that you add as an added value to the relationship?

Andrew Brennan [00:32:42] Both. So sometimes, you know, for example, the property we're doing right now. I had a contractor lined up to do it. And they got too busy, so I have my guys doing it, but they're not as skilled as I am, so I have to go over occasionally and do some of the more sophisticated stuff. So I pay myself. No, I pay myself, you know, less than market value that I would get for myself with my skill. But I still do get something in the past. I would you know, as I want to build my business, I would do those things for for no cost.

Rob Break [00:33:17] OK, so what about running the renovation now? Do you pay yourself for that?

Andrew Brennan [00:33:23] Most of them. No, not really, because if I just show up to look at something, you know, I might show up for 20 minutes or whatever, which I really want to do anyways as an ambassador, even if I didn't know what I was doing. I still want to go and check on my contractor to see how things are going right. So if I go out there and I look at things and say, OK, this doesn't look right. Things like that, I'd be doing those things anyways, even if I didn't have the skill that I have. Right. Because it's not hard to say. OK, well, I know that was supposed to be painted this color. Those lights are wrong. Right? So if I'm just dropping by and checking on progress, then I don't I don't worry about that. But, you know, anybody can have whatever they want as far as an agreement, as long as you're living by your agreement that you have with your joint venture partner. And that's fine.

Rob Break [00:34:17] So you jumped into being a full time real estate investor pretty quickly. I guess that this is more for selfish reasons that I'm asking this question is how do I get myself out of my job? Is that what you did? You just went in and you did the work and you paid yourself to do that. And that was how you afforded to get yourself out of out of your job?

Andrew Brennan [00:34:39] No, I actually got downsized. Oh, back in 2009, I used to be an executive for a company. And, you know, so back when the economy was good, people were making cuts. So I got downsized and I hemmed and hawed and wasn't sure what I wanted to do. And then I just decided to give full time and a shot and, you know, work hard. But if you stick with it long enough, you'll you'll be able to do it. And, you know, I, I would highly recommend that someone has a plan that they're going to give up their job, because it really adds a lot of complication as far as the qualifying for mortgages, getting extra cash. And that's one of the reasons why I switched to joint venture is because I no longer had a job. So, you know, without a very good portfolio and paying yourself a salary from that portfolio, you're not going to get financing from the bank. So then that's when you go out and you look for a joint venture money. And my joint venture partners. Ninety five percent of the time they're on title by themselves or maybe their wife or whatever, but or husband. But I try and stay off title.

Sandy MacKay [00:35:55] Cool. So obviously that would that would have been a big shift for you. I'm sure you had a lot of failures along the way. Obviously a lot of success too. But maybe tell us about a failure or two of them that you that really stick out in your mind that helped you and how you were able to overcome overcome that?

Andrew Brennan [00:36:13] You know, I can't say I have any failures. I mean, we still own every property, so we all make money. The biggest challenges would be

Sandy MacKay [00:36:22] the challenge is a better word, not a failure. But yeah,

Andrew Brennan [00:36:26] the biggest challenge, I have one particular property, which, you know, it just seems it's an ongoing nightmare. You know, we bought it was a little sign in the window and I was driving by this house, going to another house. I was renovating down the street that we just bought. So I end up buying this one. It was empty. I mean, at work, we did all the work, you know, got it. Tenants and stuff like that. Three days into it, we intended it. So we got two units now attended a problem with the drain line. So there's a the drain wouldn't drain. So we went up after spending roof all the cosmetic renovations. We end up having spent a planned twenty five hundred bucks. I think it was to put in a pit and pump to push sewage down the line. Then shortly after that we had an issue with the chimney liner collapse which led to seal gas not escaping the apartment which led to a TSA investigation and stuff like that. But we had all our due diligence and things, so we were fine that it was, you know, the air conditioner went and then it was one of the coin laundry machines, you know. One thing after another, but we stuck through it and, you know, the property probably produces six or seven dollars a month of cash, so working our way through all those challenges definitely paid off. But as far as a failure, no frustrating. Yeah. Success still. Yeah, yeah, yeah.

Rob Break [00:38:06] I have a couple that remind me a lot of what you just said, unfortunately, but they still do OK, but they're just a gigantic pain in the ass a lot of times.

Andrew Brennan [00:38:17] Well that's the thing. A lot of times the. The properties you're going to buy, which are run down, especially if they're multifamily, you know, they're usually a headache in the beginning between the current tenant profile, the condition of the property, trying to get things streamlined. Sometimes it takes a year to normalize stuff. Right. The other landlord might have been, for lack of a better word, conserve the slumlord type and didn't do anything. And that's the tenant profile that they have. And it causes frustration to you. Sometimes you've got to reeducate the tenants. Sometimes you just have to pay them to leave and start over. Right. With a nice, clean, fresh unit.

Rob Break [00:38:59] OK, well, you might have already answered this, but what was your Aha moment with real estate investing? Was it that first property?

Andrew Brennan [00:39:07] Yeah, without a doubt. Once I sat down and figured out, you know, how profitable it could be over the long run. And, you know, when I was doing my calculations, I was just looking at a traditional buy and hold. I had no idea about things like vendor take backs and reifies and all that stuff. So I was just looking at long term growth on a traditional buy and hold. And that was when I decided, you know, this is something we want to do and within. I think 18 months we had bought seven properties.

Rob Break [00:39:41] That's pretty amazing, and so those were all financed just through banks, right? Those were all no joint venture deals on those.

Andrew Brennan [00:39:50] Yeah, yeah. And you know, that was before. You need a 20 percent down. So we did one that was, say, one hundred percent financing. One was 20 percent down. A couple of them were 10 percent down, things like that. Right. But, you know, now I don't see an issue with the 20 percent down. It's actually probably even better because there's no CMHC fees. So, you know, if you if you're raising funds and stuff like that, it's it's not a problem. You can still build a very successful portfolio.

Rob Break [00:40:23] OK, so you as we mentioned before, you are the author of The Ultimate Wealth Strategy, your complete guide to Buying, Fixing, Refinancing and Renting Real Estate. Do you want to tell us a little bit about how you how this book came together for you?

Andrew Brennan [00:40:39] Well, just coincidentally, we do very similar strategies just in different areas. So we kind of got together and we're talking about it. And there's really not any type of. Information or education on the strategy out there? Most most books are towards buying hold or flip, but this strategy is a little bit unique. So we thought that it would be a wise decision to create the book. So we've got a book that is written as a story, so it's not too hard to follow. And it takes the characters are a couple. It takes them through starting off with smaller, easier properties and working them all the way up to even multifamily stuff on. I think the one example is 17 minutes or something like that. And what it really does is it follows pretty much every step. In the actual process that we use, so this is the stuff we do day to day, it even lists some of the materials you should be using and how you should be setting up your mortgage, how to get your appraisal results higher, all those things. So it's it's not just because we wrote it, but I think it's very helpful for people who want to gain a higher return on investment, but not sure, not sure how to go about it using the strategy. They're going to be able to do it.

Sandy MacKay [00:42:08] And what is the strategy exactly? What is what is by fixed, reify, refine, rent, what rent want. So for the.

Andrew Brennan [00:42:16] OK, so when we say buy, obviously we're talking about purchasing a property. So what we're doing is we're purchasing something that's, you know. Out there, that's not too hard to find, that needs mostly cosmetic lipstick, work, whatever you want to call it. So it be things like maybe plumbing fixtures, a good paint job, flooring, windows, maybe yes, maybe no, but a lot of cosmetic things. So you try and take advantage of the poor visual state of the property. But hopefully it still has good structure as far as bones, right, so there's no foundation issues. Hopefully you don't need to do the roof plus the AC plus the furnace. And it a lot of times you're doing this on single family homes and a lot of times single family homes are sold to people who want to live in them. So they don't like those types of properties. So you want to buy those? OK, then what you want to do is you want to fix them up. OK, so we talked about trying to do it cost effectively and you want to do that fairly quickly and then we go to refine. So the great thing about the strategy is when you go and refinance, the bank was going to give you back a bunch of money that you pull out and either you can put it back in your pocket, send it back to your joint venture partner, use it to buy another property. But you still own the property and you still get the benefits of if it doesn't cash, you should do it. So you get cash flow, you get mortgage pay down, and if you pick a decent area, you're going to get appreciation. And then to continue to be profitable, you have to rent it out. So instead of, you know, a lot of people, they they do buy and sell it as a flip. We do buy, fix, refinance to get our money and then just put a tenant into increased wealth and hold on to.

Sandy MacKay [00:44:15] Yeah, it's great if it's really essentially a hybrid right of the fix and flip and buy and hold strategies.

Andrew Brennan [00:44:21] Absolutely. That's a good way to put it.

Sandy MacKay [00:44:24] So the thing that I think people would maybe get hung up on with that is the refinance part. Are you generally with when your deals like that be someone paying all cash to begin with or would they be getting a short term mortgage? How does that usually work out?

Andrew Brennan [00:44:39] What what we usually do is we get 80 percent traditional financing, but we select an open mortgage. So because we know we're going to refinance anywhere from, say, four to 10, 12 weeks, we don't want to lock into a fixed term because then we're going to have to pay penalties to break it. So we take the open mortgage. Since the renovations are done, we then refinance and put it on a fixed term.

Rob Break [00:45:05] And that really is the beauty of this. If you do it right, you're you're getting into the property for for a lot less than even the down payment would be on the initial purchase price. And you're coming up with the finished product. That's really great.

Andrew Brennan [00:45:21] I think it works great and the thing is, you know, we look for properties that we're going to get at least half our investment back. So if you keep doing that, that means you're going to have double the amount of properties that you would have doing or buying hold.

Sandy MacKay [00:45:33] Zakarya which is amazing. And like I think there's not. But as you said, there really hasn't been a lot of published material on that strategy. So that's what I think is awesome, is just that you guys are making that available to everyone. And obviously, we want to encourage everyone to grab that book because it's really, really great. And and like you said, it walks it through, walks people through pretty simply and more of a story format, which is really good and important. I think that people can grasp it and kind of a simplified manner. So I like that.

Andrew Brennan [00:46:06] Yeah, that's one of the things we want to make sure that it wasn't too dry.

Sandy MacKay [00:46:11] OK, great. Well, just education obviously is a big part of this, too. I know. I know. You go to a lot of seminars and events and that and I'm sure you read a lot of books on real estate strategies, different mindset, things maybe isn't maybe another book or anything that got you started in real estate.

Andrew Brennan [00:46:29] Well, there's there's two books I usually tell people to read. The first one would be for someone who's not necessarily in the mindset yet that they should be doing real estate investing and that would be rich, dad, poor. So a lot of people know that book and it really helps you get in the right mindset to take the step to do real estate. And then for people who really haven't done much real estate yet, I always say they should be reading something like the the five year action plan, because a lot of times people think they just need to buy real estate, but they don't necessarily know why. Right. So if you actually have a plan ahead of time, which I didn't, so I know it, it'll help you get to where you want to be faster, less stress and overall be more successful.

Rob Break [00:47:21] And that's the name of the book, the five year plan.

Andrew Brennan [00:47:25] Yeah. It's Peter King's five year action plan. I'm pretty sure that's what it's called.

Rob Break [00:47:28] Great. And you can get a great audio book, just like one of the ones mentioned here for absolutely free. When you go to break through r.i podcast Dossie slash audible free trial. So Andrew, where can people learn more about you.

Andrew Brennan [00:47:46] You can go to my website, which is BPI Real Estate Gutsier, and then there's a little bit of material on there about me and some of my past success stories with properties. And you can also get in touch with me through their work.

Sandy MacKay [00:48:01] I will grab the book.

Andrew Brennan [00:48:03] It's on Amazon, actually.

Sandy MacKay [00:48:04] Yeah, that's right. So it's really simple. They can just go to Amazon and type in the alternate strategy and it's a pop right up now.

Rob Break [00:48:12] And actually there is there's a one 800 number that you can call it. I'll tell you a little bit about the book. It's right on the front cover. And we did an interview with Jeff just recently and we put that recorded message on the end and well, how old is your book, too? So I think we'll do the do the same thing at the end of this one. OK, great. OK, well, thank you very much for agreeing to come tonight. This was really informational. Like I said, I'm I'm I'm I'm of a different mind frame, so I still haven't gotten all the way through the book of about halfway through it. But I mean, I've known about it for a while, like I said, ever since I took that course with you. And I am excited to get going in this direction because I know just from the from the time I first heard about it that this is the way to go.

Andrew Brennan [00:49:01] I hope you enjoy it. I hope it helps. I know it's the strategy has been fantastic for me.

Sandy MacKay [00:49:05] So awesome. I really appreciate having you on. Andrew is great.

Rob Break [00:49:11] You're welcome. All right. Have a good night. Thank you. Thank you. Bye.

Andrew Brennan [00:49:41] I have seven purchases in various stages that I'm working on,

Rob Break [00:49:46] so they're

Andrew Brennan [00:49:48] very stressful and stressful, but very demanding, I guess.

Jeff Woods [00:49:55] Hi, I'm Geoff Wood and I am the coauthor of The Ultimate Wealth Strategy, if you have already bought the book. Thank you for your support. You've made a wise investment. If not, let me explain why you need to buy this book right now. Well, there's a bunch of good real estate books on the market and some are worth a read. We know that none of them will deliver the same valuable content as the ultimate wealth strategy you see between the three of us that wrote this book for you. We have read and tried just about every book and strategy you can think of. If you want a strategy that delivers long term wealth creation and cash to deliver your desired lifestyle, that you need to buy the ultimate wealth strategy right now. You see this book simply and clearly. Watch your step by step through each process of buying, refinancing and renting real estate. In essence, it combines the best elements of helping property with the best elements of buying and hoarding property. The ultimate wealth strategy delivers the best of both worlds. Yes, with this real estate investment strategy, you can have your cake and eat it too. You may also be happy to know that each of us has created multi-million dollar real estate portfolios using this strategy. We have figured out how to avoid costly mistakes and maximize returns quickly. Why waste years of your valuable time figuring all of this information out on your own when you can leverage our experience? We do not just teach this highly guarded strategy to others, we do it every day. Invest in yourself, invest in this book once you implement the strategy. Your life will be positively impacted, whatever. And oh, yeah, once you've bought the book and read it, we don't just leave you there to do it all on your own. This book reveals how you can get more education and even work one on one with us. Enjoy the book. We look forward to meeting you in person one day said.

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