Table of Contents - EPISODE 7: THE ONE WITH GARY HIBBERT (HOW TO DO RENT TO OWN DEALS IN CANADA)
Rob Break [00:00:02] He said he. Hey, Rob, what's that you're reading? Oh, this it's the new book by award winning real estate investor Quentin D'Souza, the property management tool box is all of the tools and systems for starting out as a new landlord and all of the resources to create less stress while expanding your rental portfolio. It is awesome.
Sandy MacKay [00:00:24] Wow, that sounds amazing. Where can I get one?
Rob Break [00:00:28] Just go to w w w dot the Ontario landlord toolbox dotcom.
Sandy MacKay [00:00:38] The property management toolbox, a how to guide for Ontario real estate investors and landlords. I'm going to order my copy right now. If you break through real estate investing podcast episode seven.
Rob Break [00:01:14] Hello and welcome once again to the Breakthrough Real Estate Investing podcast. Thank you for joining us today. We put this show together to inspire you and help you live the life that you want to live through, the power of real estate investing. My name is Rob Break. And here with me again is Sandy McCabe bringing his A game, as always. How are you, Sandy?
Sandy MacKay [00:01:37] I like that one. I'm definitely going to try and bring my game.
Rob Break [00:01:40] And we already did interviews done.
Sandy MacKay [00:01:44] That's true. That's true. And definitely our guests definitely brought him to their game in this interview. So, you know, that's going to be awesome. That's coming your way in just a few. But just a minute or so, first of all, let's. Let's talk about these freedom activators and how how they're going to help our listeners, and that's referring to a report that we're giving away on our website, Breakthru RIAA podcast Dossie. It's called The Seven Freedom Activities You Can Trigger in Your Property starting right now. And that's a report that totally free. All they have to do is subscribe on the site there and throw in your email and we'll give it to you. And you know as well as you're going to actually get updates every time we release one of these podcasts. So you won't miss a show and you'll get that free report. So we encourage everyone to go grab that on. Breakthru, our podcast Dossie.
Rob Break [00:02:44] Yes, and go over to iTunes and leave a comment or question or review and click the subscribe button while you're there so that you can get every new episode as we release them. And I know I say that on every episode, at least so far, and. The reason why we ask you to do that is because there are very few ways for Sandy and I or our podcast to advertise and get the word out about the show. And I just heard this on another podcast Saturday about how recently iTunes did a study and found that actually six out of 10 people still don't even know what a podcast is. And I know I was talking to my sister the other day and she didn't know either. So which is kind of funny. But so definitely the best place for us to get the word out about the show is to people who already listen to podcasts. So on iTunes, they use a combination of to determine the ranking of the show by how many subscribers that you have to the show. Also how many downloads you have and how many reviews the show has. So in order for us to get seen in the rankings, in order for to make the show visible to other people. That we are aiming to help with the show. We're asking that you just take a minute and go over and subscribe and leave a five star rating. If you like the show, if you don't, then leave before, yeah, and leave a review if you if you can take a couple of minutes to do that. And especially if you already get the show through iTunes, it's so easy to just rate the show right there, you're already logged in. You don't have to do anything special other than just click on the rating that you would like to give it. And, you know, we really love creating these shows and. I know we've learned a lot from all of our guests, so if you've enjoyed them like we have, just please go over and we're not asking for any money. Just take a couple of seconds to go over and just click that and you will have our everlasting gratitude.
Sandy MacKay [00:05:17] Perfect. Well said. And it's really about helping us help you, too, right? I mean, the more we can get this out there, the more more we'll be able to bring you really value packed content and bring on some really amazing guests. And, you know, if you have any comments or questions or anything, feel free to ask them as well, either through iTunes or on the the website Breakthrough Oread podcast Dossie, I can add a question or comment below. One of the episodes there, too. And just, you know, we're happy to address any questions you got on the show, so. You know, help us, help you,
Rob Break [00:05:56] and one of the things I did want to mention to you is when you go on to breakthrough audio podcast gutsier, you have to if you want to leave a comment, you have to actually click on the title of the of that episode and it will take you to another page where you can leave your comment. So you have to do that before you can leave a comment in there.
Sandy MacKay [00:06:15] Right on the. Perfect. All right, so is that ever going to get into this interview or what?
Rob Break [00:06:22] Yeah, that sounds good.
Sandy MacKay [00:06:24] All right. So with us today, just coming your way in a few seconds is Gary Herbert. And Gary's got a great story and a lot of awesome stuff to share with you. He's going to inspire you to stop simply living for the weekend. He's going to talk to you about why these white paint and black roofs just do not mix together, and that's a funny little story he's got for us. So we're going to share with us how he was able to use innovative thinking to create a Win-Win situation and help a struggling homeowner get back on their feet. And, you know, if you're going to hang around, for one thing, hang around for that story because it's really awesome and inspirational. And I just really loved his thinking on that on that story. And finally is going to share with you how to be an investor and not a landlord.
Rob Break [00:07:20] Exactly. He really brought a lot of knowledge and I learned a lot from this interview, so. Well, here it is, our interview with Gary. Hey, Gary, how are you today?
Gary Hibbert [00:07:34] I'm good. How are you guys doing?
Rob Break [00:07:36] Are great. Awesome. Thanks for joining us today.
Gary Hibbert [00:07:40] Well, thanks for having me. I think what what you guys are doing is a great thing.
Sandy MacKay [00:07:44] Awesome. So, first and foremost, Gary, I put together a little introduction here to let the listeners know what you're all about. And so, yeah, Gary is someone who I've known for, I think about two years now. And it's definitely a really savvy investor. And also, I know a realtor focusing most of his efforts on on rent zones. And he is the author of the book entitled Smart Guide to Real Estate Step by Step Rent to Own Investors, Ed.. He is one of the founders of Smart Home Choice, which is a real estate investment company based here in the Greater Toronto area and offering a full service approach to real estate investing. And in less than three years, Gary and his team have brokered nearly twenty five million in residential real estate and personal acquired over five million in real estate investments. So he's got a whole lot of wisdom to pour on us here today and we're ready to get going with it. Anything else to that in there, Gary?
Gary Hibbert [00:08:51] No. You know what? That was a great intro. I appreciate that. And no, I think yeah, we'll we'll get started.
Rob Break [00:08:56] Well, OK, Gary, how did you get started in real estate investing?
Gary Hibbert [00:09:02] Yeah. So you know what? I got started in real estate investing about seven years ago. I used to work at a major financial institution as an I.T. manager, which is completely different from what I'm doing today. So, I mean, you know what as well, although I was making good income, you know, still living paycheck to paycheck and and essentially I wasn't in control of my own life, you know, so I had to be somewhere that somebody else wanted me to be every morning, essentially, no matter what. And and there was three things that kind of really pushed me over the edge. Number one, you know, I just had enough conversations about a water cooler, about how to make money with people in the same boat as me. Number two, I just had enough sitting in my car in traffic for hours, wasting my time. And then finally, I just had enough with wishing my precious time away. You know, I can't wait until Friday or I can't wait until I retire. And and essentially my opinion at that time just was not the best way to live. So those two main things, I would say that kind of dawned on me, you know, when I had a lot of this, you know, these things were pushing me over the edge. And one was. If the average of inflation was increasing each year by, say, approximately three percent, you know, and that doesn't sound like a lot, but if your yearly increase at work is to say only one percent, in many cases less, it's a game not designed for you to win. And the number two, what I realized was that after own in my own home for about 15 years, every five years or so, when my mortgage came up for renewal, I was reconsolidating all my debts into my mortgage. So I have to do this about three times. I had my, you know, huge ha ha moment. You know what? If I had several investment properties appreciating and somebody paying down my mortgage, you know, I'd be way ahead of the game. And that's what I knew, that I had to change my active income, which wasn't going to make me rich to invest in my time and my money wisely.
Rob Break [00:11:02] Beautiful. Yeah, that's exactly what I'm aiming to do as well. I think we all are. So Cindy had mentioned a little bit earlier that you're focused mainly on rent to own. So could you explain to us the anatomy of rent to own and why you chose it as a strategy?
Gary Hibbert [00:11:26] Yeah, sure. So you know what? As much as I promote using the rent to own strategy, I also highly advise all investors to have buy and hold in their portfolios. Well, you know, rent renting is a great way to get starting in investing because, you know, generally the tenants, you know, they're moving in with a vested interest. Who's going to manage and care for the home, as you know, as if it was their own. So, so. So how does it work? You know, if you're familiar with leasing a car is very similar to this. Each month, the renters will pay a certain amount each month to live in the home. And then at the end of the term in, it's usually a two to three year term. They can they can purchase a property from the seller at a predetermined amount that's set right at the beginning of the of the term. Now, part of the tenant moving into the home, they pay an option fee or, you know, some people call a down payment. It's usually two to three percent of the purchase price over the next few years. And then they will need to build on that initial deposit to acquire the bank's required five percent. Now, in order for them to accomplish this, what we do is a portion of the rent, which we call the rent credits that will go towards a down payment, which is accumulated on the initial deposit, which I talked about earlier, the option fee when the tenant first moves in. Now, you know, in many cases, the rent payments for rent to own homes are an amount that's usually a bit higher than what the market rent price with a portion of that money going towards a down payment for the home. Now, the tenant has an option to purchase a home. And I think this is important. It's not an obligation. So if the tenant decides to walk away from the home after the term is up, they essentially do have the right to do so. However, if they do that, they will forfeit any of the deposit that they put down in any of the rent credits that were saved over the over the term. Now, for many families that are tired of renting and looking to get into homeownership, this is a great option for them, especially if they're having any difficulty saving for the full down payment required today or, you know, they've run into any essentially credit issues or need some additional time to restore the credit. And then the owner of the property, as they generally will receive a higher than normal rent price, they will have a tenant who is moving into the home that's responsible and they will maintain the home, you know, such as cutting the lawn or the snow removal as well as any, you know, minor repairs that do pop up. So, you know, that's essentially how renting works.
Sandy MacKay [00:13:59] Yeah, there's a lot of benefits to it, too, is is was it the cash flow that really brought you into it or why did you what was it that really drew you to rent to?
Gary Hibbert [00:14:11] Yeah, you know what? I think what it was that that brought me into the rental and strategy was, you know, when I first started out into the real estate investing game, you know, I had a full time job and I kind of joke about this. I also had a full time wife and a full time, full time kid. So, you know, essentially had a very busy schedule. But what I liked as well, though, was a concept of being a beautiful home in a beautiful neighborhood. So would I like a hands off approach, you know, putting somebody into the property that was going to look after it, you know, for me. So I was drawn to this concept of trying to help families who fell on to some hard times. And I think the thing to understand here is that, you know, we're looking for families who had a bit of a bump in the road. It wasn't somebody who had a bad track record where they just never paid anybody back. This is maybe somebody you know, we went through a divorce. They had some credit issues and just trying to kind of get back up on their feet. And what I also liked, but it was a win win scenario. So creating cash flow for myself and then helping a family into homeownership over the course of the next few years.
Sandy MacKay [00:15:18] Cool. And so now you guys focus on am I right in saying you guys focus on Tenent first? As is strategy,
Gary Hibbert [00:15:31] yeah, you know, when we first started, we actually we were doing 10 first and we were also doing property first. And I guess what I'll do is I'll kind of explain the difference between the two. Yeah, that'd be great. Yeah. Yeah, sure. So. So a tenant for a strategy is probably the easiest of the two strategies. The tenant first is a tenant. You know, they've been prequalified and they've now gone up with the real estate agent to find their new home and investor will purchase that property for the tenant. And then the great thing with this strategy is there as there's no vacancy, period, and also because they've selected the property, there is a vested interest in that home. Now, the property first and then this strategy is now going out with an agent to find the home. And then this is for the investor and then now advertising your property to fill that home with the rent own tenant. This strategy takes a bit more planning and understanding, obviously, of the process. And interestingly enough, that when I first started this is the strategy that I focused on was the property first strategy. Now, I'm not going to lie about this. This is probably the most difficult way to fill a home. However, the strategy, you know, what it really did was it built my confidence. It gives you a good understanding of how to screen tenants and and also how to fill your home and then also the importance of advertising. And like you mentioned earlier at the start of the program, you know, I did recently published a book on the property first strategy. And it's really a step by step process on how to do this from beginning to end. And I truly believe if it's if it's done correctly and the right home is selected, anybody can do this. It's just a matter of just following that blueprint
Sandy MacKay [00:17:14] for the property first. What did you find was the hard part about filling the the home? Was it was it finding a good tenant for it or was it just finding the right match? Like how long? How long, I guess? Would it have taken some time sometimes.
Gary Hibbert [00:17:31] Yeah. So so when we were doing it, on average it was taking anywhere from three to six weeks. And I think the difficult thing in the beginning was, you know, when these tenants are coming to the property, essentially, you know, you're one you're asking for a higher than normal rent payment. And then also you're also looking for, you know, a down payment, generally 5000. And so, you know that that can be a bit tough to ask a tenant, you know, to kind of put down at the beginning. So. So that made it a bit difficult. But again, you know, following that process and that's essentially what I did was I wrote that book because understanding the difficulties in it was really just kind of mapping out the roadmap to ensure that, you know, what to say and how to, you know, explain the process to those tenants,
Rob Break [00:18:23] see if you're doing the property first. I would imagine it's safe to assume that you're probably purchasing that property because you're getting a better deal than you than you would if you were just letting the tenant go ahead and pick whichever house that they wanted to live in. And so I would imagine you would end up making more money with it. But, yeah, like you said, a lot more difficult to actually find someone interested in that specific house instead of having more of a choice of where they want to live.
Gary Hibbert [00:18:54] Exactly right. And and yeah. So that's why I think the tenant first is a great strategy because they now have a vested interest in that home. But, you know, with the with the property first, the nice thing with it is, you know, you've selected the home. You know, it's a nice home. And sometimes what you can do is you can bump up the starting price of where that that home is going to start at and where it's going to end. So you can build in a little bit more profits in it.
Sandy MacKay [00:19:24] Right on. So basically, both of them can work, I think it's just making sure you have the right systems and and a process in place. Right. And a and a method that you use to to make it work. Right. As long as you do that and and obviously put the effort in, it's going to probably work out.
Gary Hibbert [00:19:41] Yeah. And you know what? And the first we probably did the first 15 homes using the rental and strategy. And there wasn't a home that we did not fill. I think the longest it took for us to fill a property was about two months. And the reason why it did was just, you know, there was an investor that we were helping out and they, you know, ended up purchasing a property that didn't really fit the model, you know, was in the south in the wash was so it took a little bit longer. It wasn't, you know, that beautiful home, beautiful neighborhood. But again, you know, following the process, understanding how to do it, it can work with, you know, with almost any home.
Rob Break [00:20:22] So where do you find your tenants? And so I would imagine, do they contact you or do you seek them out? And how how do you go about qualifying them?
Gary Hibbert [00:20:35] Yes, so, you know, where we're finding the tenants were were actually advertising, you know, online, you know, it can be and believe it or not, you know, Kijiji and Craigslist, those are still great places to advertise. But we're also advertising in, you know, other online venues as well to. Right. And then so, yeah, sorry, and what was the second part of that question?
Rob Break [00:21:02] Well, it was just kind of wondering, how do you qualify them? Because that must be quite a process, right, like I would say, generally the people interested in the red zone are the ones that I believe you mentioned. They more than likely have some kind of. May be a credit problem or some other reason why they can't qualify with a traditional bank.
Gary Hibbert [00:21:27] Yeah, so so how we're qualifying them is, you know, what we're looking for is a couple of different things. So, one, we want to make sure that they've got an income of at least seventy thousand or higher. That's number one. Number two, we're also taking a look at their credit. And like I mentioned earlier, we want to make sure that, you know, it's a bit of a bump in the road that they experience. And sometimes these bumps could be, you know, somebody lost a job. You know, they just kind of getting back up on their feet and, you know, maybe were a previous homeowner before. And and those, I'd say, are probably the two main things on how we're actually qualifying the tenants. And then once we do that, then we do the credit check. Right. And the credit check is key, you know, because that really kind of paints that picture. You know, is this somebody that's never going to pay you back or again? Is it that bump?
Rob Break [00:22:21] So the credit check will show you that more or less they've just come into this little problem recently and before that it was good. And that's kind of what you're looking for.
Gary Hibbert [00:22:33] Absolutely. Absolutely. And by following that process and one of the things that that, you know, because we've done such a good job on the screening, we've done over 35 rent own homes. Now we haven't. And I'm going to knock on wood here is that we haven't actually had to evict any of our rent to own tenants. So so we've done a really good job. And in doing that.
Rob Break [00:22:58] And how many have you had walk away from the deal?
Gary Hibbert [00:23:02] So so far to date, we've had four families walk away from the deal.
Rob Break [00:23:07] That's pretty good. Yeah, that's what you get to throw it right back up there and fill it with somebody else. And that's also good.
Gary Hibbert [00:23:14] Yeah. Yeah. And and that's the thing, right? Because, you know, rent to own is a great strategy. But sometimes, you know, it does get a bit of, you know, some some bad press. And I think the bad press comes from where, you know, you're putting in a tenant into a rent to own strategy where, you know, they've got a down payment. Great. You know, put down maybe eight or nine thousand dollars. But their income doesn't support the rent payments. So now, you know, they may have an income of only, say, 30 or 40 thousand and, you know, went in two or three months. They just can't keep up with it. And they lose their deposit and they've got to move out. So it's understanding what their income is and then qualifying them today at a future price. Right. So a lot of the time will say, well, you know what? I've gone to the bank and the bank says, you know what, I'm for three fifty, but why are you guys only qualified me for four? For two ninety? And it's because, you know, we need to ensure that when we appreciate that home, you're going to be able to qualify for that mortgage in the next two or three years. So that's a key, key point to to to to to ensure that you're doing it properly.
Sandy MacKay [00:24:26] What do you usually do? You have a number that you use for the appreciation or what amount do you go up over like a year to year basis typically.
Gary Hibbert [00:24:36] Yeah. So what we're when we first started, we were using five percent. But now, you know, we've actually got to scale it back and we're using a four percent right now. And and we find that works quite well. So anywhere between four and five sometimes what what we'll do is we'll use a combination of like a four or five three. So it's sort of different ways of doing it. But but we really don't like going any higher than five. You know, I've seen some people do six or seven. But I think you start getting a little you can start getting a little bit too expensive. And the thing, too, is that, you know, just because of a family doesn't have great credit, it doesn't mean that they're stupid either. All right.
Sandy MacKay [00:25:17] So, so,
Gary Hibbert [00:25:18] so, so, so they understand appreciation. They understand that. Well, hold on a second. Is this third year buyout price doesn't even make any sense? Right. So so, you know, by appreciative of four or five percent, you know, it's still good appreciation. And, you know, the investor walks away, you know, at the end, if the tenant buys a home with some some some some good cash in their pocket and and then you turn around and you actually help a family get back into homeownership. So I think it's just, you know, we're really trying to create that win win scenario.
Rob Break [00:25:50] And when the tenant is ready to buy. Have you ever had the bank come in and appraise the property under what what the buyout is
Gary Hibbert [00:25:59] at this point in time? No. You know, we've been very fortunate with with all the homes that that have closed. You know, we haven't had any issues with that at all.
Rob Break [00:26:09] It all comes to not not having that ridiculous appreciation built into it. Right.
Gary Hibbert [00:26:16] Exactly. Exactly. And one of the things that we did as well to you know, because, you know, we do quite a few rent to own deals is we actually went to a bank, you know, and we kind of did at the high level of saying, hey, listen, this is what we're doing. You know, what do you need to see from us so that we can, you know, complete these deals? So it's not like you can just kind of walk in the bank, say, hey, listen, I got to rent to own deal. I'm trying to, you know, close this home here. So, you know, there is some you know, so some things that we set in place to to ensure that, you know, at the end that, you know, that it would, you know, complete successfully.
Sandy MacKay [00:26:54] Perfect. Yeah, so. So you've mentioned before that the rent owns typically the tenants are a little more willing to keep keep the property in good shape and do maybe some of their own repairs and stuff themselves. Mm hmm. So having said that, do you manage your own maybe talk about the rent owns and also maybe you're buying holds. Do you manage your own properties or do you hire a property manager or someone else to do that?
Gary Hibbert [00:27:27] Yeah, you know what? At this point in time, I'm actually managing all of my properties. And I get this I get this question asked all the time, you know, like, wow, you must be incredibly busy managing your homes. And and believe it or not, I'm not you know, there are things obviously that do pop up from time to time, you know, such as late payments or things that need to get fixed. But, you know, because I stuck to the, you know, beautiful homes, beautiful neighborhoods concept, I've been able to track, you know, the right type of tenants for my homes. And and essentially, I'm attracting higher income earners who want to live in a nice neighborhood to raise their kids. And from my experiences, you know, these families generally don't know the landlord and tenant board rules and laws inside out. And so they're not really trying to take advantage of the landlords. So so because of that, I've had, you know, really good success with it and.
Rob Break [00:28:21] You know, so even if they did a lot of people I mean, I know even way back when I was renting, I just took care of the place like it was my own, just because that's the way I was brought up. I always just thought that's what you did. So, I mean, especially if these people are planning on buying the place, but they so they would probably want to do that. But what I was wanting to ask you is, so where is the line drawn as far as what the tenants are responsible for and then what you would be responsible for in repairs and upkeep?
Gary Hibbert [00:29:00] Yes. So right now, what we what we're doing is so afraid of our rental and tenants when they move into the properties, they are responsible for the first five hundred dollars of any issues that that that do happen in the home. Now, again, because, you know, one of the things that we that we do and we're stuck in our homes, we like to keep it, you know, under the 15 year mark. And and because what we're looking for is we want to make sure that the roof, the windows and the furnace are in good condition. Now, you know, if we get to that 15 year mark, you know, you know, the roof at that point in time may need to be repaired. So now we're taking a look at, OK, well, does the roof need to be repaired and has it and what are the windows look like? Are they vinyl or are they are they wood? And how much upkeep is required for that? So so that's what we try to really kind of, you know, insure those three big ticket items are are good. So again, yeah, they are responsible for the first five hundred dollars or any issues because they have that option of purchasing that home at the end. They generally will look after the property. I mean, I'll give you a quick quick story is I had a rent to own property and this is like in the middle of the winter. And I didn't even know this happened until about three days later. And then my tenant called me up and they go, hey, listen, I just want to let you know, you know, the furnace broke down. But don't worry. You know, I got Ambridge. They came in that they fixed it. It was an issue with the fan. You know, it costs you three hundred and fifty dollars to fix now because I didn't get that call at midnight and they went ahead and they and they fixed it just to keep a good relationship with them, even though they were responsible for the first five hundred dollars. You know what? I give them one hundred and fifty just to say, hey, listen, thanks. I appreciate that. And kept a really good relationship with with with my tenants. But but but do keep in mind, even though, you know, we do have it stated in the agreements that, you know, they're responsible for the five, four, five hundred dollars of any issues. You know, essentially you are the owner of that property and you are responsible for everything. But but I find that, you know, with the rental and tenants, again, they don't understand the laws inside out of the landlord tenant board. And because, you know, they sincerely do want to own this home, they generally take on these small responsibilities on their own. So they'll they'll, you know, manage the property. I've had tenants finished the basement, you know, making sure that they've got, you know, somebody who's licensed to come in and do that. I've had tenants, you know, put the fences up in the backyard. So so it's just a nice way of actually, you know, getting into real estate in the beginning.
Rob Break [00:31:43] If if I had the option to pay one hundred and fifty dollars after the fact of getting the getting the furnace fixed or getting that call, like you said, in the middle of the night, I'd take given one hundred and fifty dollars after the fact every single time.
Gary Hibbert [00:31:59] Oh for sure. For sure. And I think the key thing though too is having that good relationship with your tenants. You know, one of the things that I'll do is, you know, at at the end of the year, at Christmas time, I essentially go to every single one of my properties and I'll take the rent. So I rent checks for the year or for the upcoming year, and then I'll give them, you know, like a hundred dollar gift card, you know. So I so I kind of know, you know, just from conversation what they like, you know. So somebody might like, you know, I'm always shopping at Home Depot, so I'll give them a Home Depot card or you know, I, I know they'd like the keg so I'll get them a keg cart, but I'm always giving them a really nice gift at the end of the year, you know, sometimes maybe even better than what some of their family members are giving them is because, you know, they're paying my mortgage down. You know, my home is appreciating and I'm I'm not getting those phone calls, you know, to have to deal with those issues, especially when I'm managing my own properties. Right. So that definitely helps.
Rob Break [00:32:55] Awesome.
Sandy MacKay [00:32:58] Yeah, I love that, I love that the gift idea is great. We've been doing that to it at the time. It's really I think they do appreciate it. And and it just sets the right tone for the next year. Right. Gets them on the right page, gets them, gets that that it just basically sets them up for a great year and they're going to keep better care of your property.
Gary Hibbert [00:33:19] Oh for sure. Definitely. Definitely. And then, you know, they don't want to screw you either. You know why I got I got a great landlord. You know, the guy is giving me gifts every single year, you know? And and I remember there was this one time that I had. And so he was late with his with his rent at Christmas time. Actually, it was November and December and December to even pay me yet. But I still gave him 100 dollar gift card. And and what had happened was he lost his job. And then when Jan came around, I mean, because we were about to go now to the landlord and tenant board. Right. To kind of resolve the issue he he just vacated, you know. And so now I didn't have to worry about, you know, another two months of him not paying rent. He's like this. And I want to screw this guy any. And he said, listen, I can't do this anymore. I got to leave. You know, I just can't afford it.
Sandy MacKay [00:34:09] It's it's like the reciprocation. Right? So if you're. Giving enough, then they're going to want to give back or if they can't, they're going to help you out in some way, right?
Gary Hibbert [00:34:20] Exactly, exactly.
Sandy MacKay [00:34:22] So what areas do you focus on? You talked about, you know, great areas and stuff like how do you decide what a great area looks like?
Gary Hibbert [00:34:33] Yeah, I mean, so where am I focus in right now, you know, in the Gaetane to surrounding areas? You know, I do have properties up in Berri, I've got one out in Kitchener actually try that out earlier earlier this year. But I am doing a lot of my investing in the Durham region. And I think part of it is because, you know, I've lived here for for for over 30 years. So I so I know the area very well. You know, the Durham region's got some of the lowest vacancy rates around. And and so my personal preference is, you know, over the last couple of years has been out and Curtis and Bowmanville. And I think part of the reason why I like those areas is and it's probably because I used to live in Curtis for a few years. So so when I saw the early expansion of these areas, you know, I jumped in quick, you know, and especially when I saw Wal-Mart set up shop in Bonville, you know, then I really started to buy as much as I could out in that area, you know, and I think one of the reasons is I don't have a research and development department like Wal-Mart does. So, you know, they're there in this game not to lose. So if they're setting up shop in Bowmanville, you know, they've done their research and they done their their analysis and knowing that, yeah, this is going to be a good area. So I figured that, you know, those are great areas to kind of jump into. And and I'm getting the, you know, the cash flow out there. You know, I've got properties out there that, you know, where I'm getting rents of as low as 17 and as high as, you know, two thousand dollars a month and one single family home. So we're getting a good rents out there. You know, it is a bit of a bedroom community, but but a lot of people like that area. And then also, you know, you've got the nuclear plant out there and there's a big refurbishing going on. So so it's actually bringing in a lot of of work to that area.
Sandy MacKay [00:36:23] Yeah, I think that's set for the next. I think it's going to go for 12 years or so.
Gary Hibbert [00:36:28] All right. Yeah, you're like 12, 15 years or so. So so. So I like it. And the other thing, too, is there's a lot of things happening, right. Infrastructure wise, where, you know, you get the four or seven going out there essentially eventually. And then also, you know, the expansion of the of the Gautrain.
Sandy MacKay [00:36:45] Exactly. Yeah. So and, you know, the price point has a little bit to do with the right to is is is there a number that you like to keep it like a an initial purchase price that you'd like to keep your. I keep it under or there is there anything there is flexibility there with that price?
Gary Hibbert [00:37:05] Yeah, in the beginning, yes. So I'm keeping it in the starter starter home range and anywhere from from 250 to as high as three 20. I find a sweet spot to in around that to 70 to 90 mark. But but we have gone up to three, 20 and that would generally be if it's like a like a tenant first deal, that we'd go that high. But but generally the sweet spots up to 70 to 90 mark right now.
Sandy MacKay [00:37:33] Right. So starter homes is the key word. I think they're right.
Gary Hibbert [00:37:37] Exactly. Exactly. So whenever anything from a townhouse to a semi to a fully detached home, so.
Rob Break [00:37:45] Well, I have two questions, so. So you mentioned where you like to buy, but how do you find the deals out there or where do you get them?
Gary Hibbert [00:37:57] Are we talking about the rent to own deals or.
Rob Break [00:38:02] Yeah, so is the person just picking them off the MLS or do you have other people that are offering you properties or how does that work?
Gary Hibbert [00:38:14] Yeah, so so what generally happens is we'll get you know, so we're doing advertising online and we also have some connections with us, with some mortgage mortgage agents. So what they'll do is if they send them over to us, great. Or if we're if we're actually getting them from our own advertising, we qualify them. Then once they're qualified, either myself or my partner, Don, or one of the other agents that are that that have recently started working with us, we'll actually take them out to select the home that that they're interested in now. You know, there are some criteria that we're looking at. You know, we want to make sure that a starter family home. We want to share that, you know, just three bedrooms, a minimum of two bathrooms. And, you know, it's a nice home. Right. So, you know, we stay away from rural properties. We're staying away from properties that may have us oil heated or baseball heated. You know, and I think part of the reason why is, like I said earlier, is, you know, it is an option for them to purchase a home. It's not an obligation. So if they decide to to leave that leave, leave their home, you want to make sure that you're gonna be able to rent that property out again or if you need to, you know, have an exit strategy of selling.
Rob Break [00:39:34] OK, so you were getting them off at my miles for the most part, though.
Gary Hibbert [00:39:38] Yeah, yeah, we are getting my family and in some cases, you know, there are families that own their home and they they've come in to some credit issues. And I'll give you an example is he was a client just recently. You know, she had a property she she lived on. But it was a beautiful home that she had. And she and she put herself into a consumer proposal. And when she was in the consumer proposal, before she got to the consumer proposal, she was told that, yeah, don't worry about it. You know, is this not going to be an issue or is that going to affect your mortgage? But what ended up happening was, you know, four years later, her mortgage came up for renewal and the bank said, well, sorry, you know, we're not renewing your mortgage. You're in this consumer proposal. And essentially she was going to lose your home that she was that she was in for four for close to ten years and put a lot of her hard earned money into. So she was she was able to find us. And what we did was we were able to actually step in. One of our investors purchased that property and then, you know, allowed her some time not to get out of that consumer proposal so that she can then turn around and purchase that property back off us in the next three years. Right, and then what it also did as well, too, was her monthly payments, including consolidated debt, was I think was like twenty four twenty five hundred dollars a month, and then doing the rent to own on her property, we were able to bring down all of our payments down to it was like nineteen, nineteen seventy five a month. So she she was able to breathe. Now she's able to build up some credits and and be able to purchase that property the next few years.
Sandy MacKay [00:41:25] Amazing. Yeah. Those are the really cool stories when you can actually like that person that you really help that person out. Just knowing how to do that is, you know, that's bring a ton of value to someone's life, right?
Gary Hibbert [00:41:37] Yeah. Yeah. And she found us it was on a Wednesday and and essentially she had no mortgage left and the banks were pretty much going to kick her out of her home on the Friday. So we able to kind of step in there quite quickly and, you know, put a purchase and sales agreement together in two days and put it on the on the lawyers desk to say, hey, listen, we've got somebody who's going to help help her out. And that just actually just completed about about a week ago. So so so that was yeah. That was definitely a feel good story for sure.
Sandy MacKay [00:42:10] Awesome. Yeah.
Rob Break [00:42:12] And speaking of stories you were telling us a little earlier, a story about white paint all over your black roof. Do you want to do that again?
Gary Hibbert [00:42:25] Oh, wow. OK, yes. So so this is when we this is when I first started out and and this is a property out in Curtis, but three years ago. So so so this was doing the the property first strategy. So, so we were doing our open houses and you know, we had quite a few families coming out and there was one family that absolutely loved the home. But, you know, but she was a little bit picky with the home and I get it. And then that was fine, you know. So the home was beautiful. But the windows, you know, they had the wood trim on the outside. So, you know, the paint was starting to peel. So I said, OK, no problem. You know what? I'll I'll ensure that the you know, the window trims are painted for you. So this is like in the summer. So I said, OK, you know what, let me go get some paint. And then I jumped up on the roof and then I was painting the the trim. Now we had actually just put a brand new roof on that property like like spanking brand new. And so I'm up there and I'm painting the the white wood trims now. And there's I'm almost done now and there's this business, so this business. So, you know, they're coming out because they're like, well, what's this guy doing up besides, you know, besides our our nest here? So I'm like, OK, I'm trying not to pay attention to these bees. And but they just kept swarming me and swarm me and I'm just on my last stroke and and then, like, the whole gang of them come out. So I step back and as I step back, the canopy flies out and it just splatters all over the roof. So I'm like, God, yes, I'm like, you. You got to be kidding me. So so I start. So I start rubbing it. And as I'm rubbing the paint, it's just getting worse, I guess, just rubbing it right into the roof. So so I jump down now and I'm like, oh my gosh, I get back up again and I start to kind of see if I can scrape it, but I'm scraping off all the all the shingles. Right. Like, you know, because like there's these little pebbles or whatever on it. So I'm like, what a disaster. So I said, OK, let me go to Home Depot, see what I can do. So I actually paint. What's that?
Rob Break [00:44:30] I said you should just go get more white paint. Yeah.
Gary Hibbert [00:44:33] You know, and I was actually thinking maybe I should just paint the roof white, but but then I actually found this black spray paint and and it's actually I have to use it and stoves or whatever, but it's high temperature, you know, it's made for high temperature. So the temperature was. But anyway, so I jumped back up on there. I sprayed it because obviously, you know, you're worried about the heat of the sun. And and, you know, when she came to take a look, she's like, yeah, everything looks great. And you know what? And you really couldn't tell. You know, I could kind of tell just because I knew of the area, but. So, yeah. So so. So that's what happened then. I mean, you know, in the beginning, you know, you're always kind of doing everything yourself. So trying to save a buck here and there.
Rob Break [00:45:21] Hopefully, no, no white paint spilling down out of the eaves.
Gary Hibbert [00:45:26] Yeah, yeah, exactly what? Yeah, so does my little, my little my little story there on that.
Sandy MacKay [00:45:33] I think everyone's got a couple of those little ones at the start. Right. Little stupid things that go wrong. And but that's what it's all about. Right. Feeling a little bit. And I mean that's kind of out of nowhere but yeah. Bailing and stuff and just moving on and doing it better next time.
Gary Hibbert [00:45:48] Yeah. And and you're right with that. Right. What. One of the things is I would say since I've been investing over the last seven years, I've probably made more mistakes in the last seven years than I made in the previous 33 years of my life. But I've been more successful in the last seven years. So it just kind of goes to show that, yeah, you know what? You just got to get out there, take action and not be scared to make those mistakes. Right. And just and just do it.
Sandy MacKay [00:46:20] Yeah, exactly right. So that being said, it like is now and also you were talking about how you're like uncourteous and Bowmanville and maybe how you're kind of jumping in someone, I guess, ahead of the. Maybe we're expecting a bit of a crowd there soon, but is now the right time to get into this, like when is the right time to invest? Do you think about timing real estate at all or do you just is now always the right time or what's their take on that?
Gary Hibbert [00:46:48] Yeah, that's a good question and absolutely. Absolutely. Now is the best time to get into it, you know, and I get and I get this question asked all the time, especially with beginning real estate investors, you know, but I'll say, yes, now is a great time to get into real estate investing. And if you ask me the same question in 2015, my response is going to be exactly the same. Yes, now's the best time to get into real estate investing. And I think what it comes down to is not really trying to time the market. You know, it's it's really spending time in the market, you know, and being smart about, you know, people are always going to need somewhere to live, you know, during good times or bad times. And, you know, the safest place to to me anyways is to invest in the start of family homes. The other reason why I think now is a great time to invest is, you know, the U.S. is still a hot mess and can is really tied very closely to the US and and the U.S. won't be moving their interest rates anytime soon. And because of that, neither will Canada. So, you know what? Get get in while while the money is cheap, you know, and but but I think the key thing, though, is if you're going to do it, just make sure that you're buying for cash flow. Right? Don't don't pick up a property that's got negative cash flow.
Rob Break [00:48:06] Mm hmm. Yeah, there's always good deals out there, no matter what year it is, and it's just the key, I guess, is finding stuff that works for everyone. And you can always do that if you work hard enough. Absolutely, absolutely. You're you are a very inspirational guy. And I was just wanted to know if there is a quote or piece of advice or info that's always stuck with you. And how has it helped you?
Gary Hibbert [00:48:38] Yeah, I mean, you know, there's a couple of different things, right? So one one of the things that's really helped me get to where I am now today is having a vision board. And when you have that vision board, just be very clear, you know, with your goals. So, you know, I've got I've got a vision board here in my office and I've got my personal goals written on there. And I've also got the goals that we want also for Smart Home Choice. And then I also put a month beside it as well. To some, I'm not specific to the day, but I'll definitely put a month. And so when I step into the office, I take I'm always seeing that vision work is right in front of me. And and if I see something coming up soon, I'm like, OK, well, what have I done to get to that goal or where are we right now and why are we not at that point yet? So so a vision board is incredibly important. The other thing is, you know, before you buy another car, you know, buy another investment property. So you let that investment property pay for your car, you know, invest, investigate and always educate yourself and and get a mentor or, you know, join a real estate investment group. You know, that that's really, really important as well, too. So don't don't don't try and do this on your own. You know, why not learn from other people that have done it before you so you don't have to go through those mistakes and and take action. You know, don't be scared to make those mistakes. You know, like I said before, you know, I've made more mistakes in the last seven years and and I've been probably the most successful in those last seven years. And if there's a quote that I could give you guys, I think one of my favorite one is from Jim Rome is work hard on your job and you'll make a living and work hard on yourself. On yourself, and you'll make a fortune. Awesome.
Sandy MacKay [00:50:35] I love that one.
Gary Hibbert [00:50:36] Yeah, it's one of my favorite shows, I've actually got it right here on my board, so.
Sandy MacKay [00:50:41] Yeah, and that's just that it's all about taking action. I mean, someone like someone maybe listening to this can hear the information. And it's all awesome stuff. And it's really important to know the strategies and the the process and the systems and everything. It's absolutely crucial. But at the same time, like, you've got to do something with it, right? You have to take some action and get going and get started and be willing to fail. And, you know, it's all good because it's going to take you towards your your goals and your dreams and everything.
Gary Hibbert [00:51:12] Yeah. Yeah, absolutely. Right. It's you know, listen, I'm just saying, you know, you know, going blindly. Yeah. Do some do some investigation, educate yourself. But you don't have to be a pro, you know, just get get as much information as you can and then take that action and yeah. You're going to make those mistakes. But but but that's part of life, right. You know, just learn from it. Get back up on your feet and keep pushing forward.
Sandy MacKay [00:51:40] So your company, Gary Smart Home Choice, offers a few different things. I believe they got a membership program for beginning investors. And, you know, you do your meet ups in your seminar area, you know, your meetings and things like that. Tell the listeners a little bit more about how that all works and what the membership is all about.
Gary Hibbert [00:52:01] Yeah, sure. So does that actually a number of different things that we're doing now? You know, it's a lot different from when we first started. But one of the key things that we that we focus on is mentoring and coaching for for beginning investors. I think that's, you know, very important. We also do monthly mastermind events and these events, we do them every month. And what we do is we'll bring out experts in the industry to talk about anything from the landlord and tenant laws or motivational speakers or how to invest in our Espy's and a number of different and important topics. When you're investing in real estate. We do quarterly networking events. And and I think you've been out to a couple of these, Sandy. And and these are really good for, you know, bring in like minded individuals together, real estate agents or investors or mortgage agents or, you know, from from any other kind of industry within real estate. We also do some podcasts as well, too. We're not doing them as frequently as you guys do. And I think sometimes it's just, you know, you try and take on too many things, but we try to do them at least quarterly. We also just recently launched and I'm not sure if you guys are seeing this, but this was something that we had in our vision board as well, too, at the beginning of the year, which was the smart home choice of reality TV. So, you know, we're really excited about that. You know, we've done our our second episode. We also have you know, if you're a member, you get exclusive access to our tenant first deal. So, you know, being a real estate investor yourself, that there's lots of money out there, but sometimes you find the deals is difficult. So they get access to that. We do full day workshops for our members and that's absolutely free. We also just recently introduced bi monthly newsletters. So you actually get physical mail in your mailbox. You know, we've got a members only site. We do annual dinners for our members at end of the year. And this is where we kind of hand out awards for for any investors that have actually taken and taken action. And and the newest thing that we're trying to do right now is to to launch a call in day for investors to share real estate updates and strategies and to and to also answer any of our members questions. So so we're always trying to implement new things and kind of just step our game up into this. Sure. That we're providing essentially the best service for for our members and the investors that are with us.
Rob Break [00:54:28] Yeah, I'm on your email list. I've seen all of the you guys look like you have a blast when you go out.
Sandy MacKay [00:54:35] That's that's just I was going to say two is that's what it's all about, too. It's like, you know, it's so good, but you don't have to be so serious about investing and stuff all the time. I know you guys like to have fun when you're out and your events are always a good time. And that's a really important and cool thing about it, too, I think is, you know, being able to have fun with it and and enjoy the experience and meeting all these new people. And, you know, that's a great thing.
Gary Hibbert [00:55:00] Yeah, absolutely. Absolutely. So, yes. I mean, if your listeners are interested, they can definitely get more information at our website. We've got two for investors. One is smart home choice. Okay. And then the other one is SHC investor dot seei and SHC is really the smart home choice abbreviated. So SHC investor Dossie.
Rob Break [00:55:25] And what would be the best way for someone to get in touch with it, is that the best way for someone to get in touch with you? Do you have a Twitter?
Gary Hibbert [00:55:32] You know what? I don't mind giving myself when I'm I pretty much give it up to everybody. It's all over the Internet. But, yeah, if if anybody wants to get a hold me directly, they can call me on my cell phone number. It's nine or five, seven, six, seven, eight eight one eight.
Sandy MacKay [00:55:50] And one more thing, where can I grab your book if they want to get that on the Smart Home website?
Gary Hibbert [00:55:56] Yeah, yeah. So they can get it from the the investors investor a website. And they can also go to your own personal website, which is Gary Herbert b b e r t dot com. So they can get a copy there. And it's also on Amazon as well too. So if you do a search on Smart Guide to Real Estate, that'll that'll bring my book up.
Rob Break [00:56:17] And the last thing is the TV channel that you were talking about that's on YouTube, right?
Gary Hibbert [00:56:24] Yes, that's correct.
Rob Break [00:56:26] OK, we've given everybody about a bazillion places to go. So all of these all of these resources are going to be in the show notes. So if you forget any of them, just click on the info beside the show and you'll be able to look it up there. You don't have to remember it will put that all up there. And you've given us a ton of great info. And we really appreciate you coming on the show tonight.
Gary Hibbert [00:56:51] Oh, no problem. I enjoyed it. And thanks for having me.
Sandy MacKay [00:56:55] Yeah. And just one last thing. Just I really want to encourage people to do something. And if nothing else, like get on your email list and just just see what's out there and start taking in some of the information slowly and just get going. Because like we said before, it's all good to listen to this and get all the information, but you really got to do something with it. So, yeah, tons of resources there to learn more with Gary and. Yeah. Really want to encourage people to do that and to take advantage of it.
Gary Hibbert [00:57:25] Yeah, for sure. Definitely, and that's one of the things to with our news as we try to keep it fun, you know, when we try to keep personal stories in there as well, too, and just kind of share a bit of our lives. And, you know, sometimes you see some pictures of the kids in there as well, too. But it's just to show that, hey, listen, you know what? We're just you know, we're normal people. I'm just trying to, you know, to to to to do great things and to share ideas.
Sandy MacKay [00:57:50] Awesome. Well, Rob, this has been great.
Rob Break [00:57:55] Oh, it was awesome and we would love to have you back. Hopefully you'd be willing to come back another time.
Gary Hibbert [00:58:00] Yeah, absolutely. Yeah. Just, you know, you've got my contact information now, but yeah, any time I'd love to. I enjoyed tonight's conversation. That was good.
Rob Break [00:58:09] All right. Let's have a good night. Thank you very much.
Gary Hibbert [00:58:12] All right. No problem. Thanks for having me.
Sandy MacKay [00:58:14] Bye bye. Bye.
Rob Break [00:58:42] Before that, it was said, well, you can talk it up on the. So would you turn it back on? Yes. So there's nothing there. Know.