Flipping, Developing, Building, Podcasting, BRRR’s, High End Student Rentals at Barely 30 Years Old With Andrew Hines

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Podcast Transcription

Erwin Szeto [00:00:06] This is Erwin, and this is the truth about real estate investing. For those of you who attended the wealth hacker conference, thank you again. Thank you for you and for your support. Buying tickets, telling your friends the outpouring of positive feedback. It’s been quite overwhelming. Sorry from something like a broken record, but honestly, it’s still coming in. So again, that I have to say thank you again. The performance of this podcast and downloads is also quite humbling, as we are now 50 percent above our 2019 average. We will have announcements soon regarding the Wealth Hacker Conference of 2020. We are engaged with certain elite level wealth hacker keynote speakers for our conference in the fall of 2020. We have some dates already in mind. However, if you ever do a conference, you can imagine when you’re trying to really, really, really busy people like major celebrities. They have busy schedules, so our date has been basically a moving target to accommodate our guest speaker. We are definitely looking to 10x from our already 10x 2019. So stay tuned and subscribe to this podcast wherever you listen to podcasts. Or better yet, subscribe to our email newsletter. You can do so at the WWE Dept. Truth about Real Estate Investing Dossier. Maybe I should slow down. W dot. Truth about real estate investing dossier and on the website, I believe in the top rate you can put in your name, email address, and you will get these the newest episodes right into your inbox each week. And also you’ll have all the show notes and links already written for you, so you don’t think a scramble to take notes while you’re listening. One of the biggest lessons for me in 2019 was because of the quantity of time Terry and I spent working, investing everything but balancing. We had to make a concerted effort to at least improve the quality of our time together as a family. A lot. A bit like a workaholic. Not a little bit. A lot of it and I’m on my phone. Way too much of times. So when Jamie started to play with the kids was to catch mom and dad on their phones at the dining table during mealtime. If they did so, they successfully did. So they would get a sticker. Five stickers earned them a present, so both parties were highly motivated to police the no phone policy at the table rule. And I’m extremely frugal. My kids have only three presents toys and stuff already, so I don’t want to spoil my kids any further more than they already are. The kids also get a sticker each time they finish one of their workbooks as homework. Again, five stickers. Same scoreboard. They have a scoreboard as well that we post on the wall in the fridge. Five stickers equals one present of their choice. We have a small budget. I think it’s like under $30 or so. As usual, I have no idea what I’m doing. I’m trying to incent the kids do work so that they understand that work equals rewards. Make homework time fun. Funny enough, my daughter keeps asking me lately if we’re doing another conference. She actually asked the day after the conference, asking for her, We’re doing another one. Now, imagine that five year olds context is to put on a major event each year and speak to thousands. And the last one was sixteen hundred, but I’m pretty sure we will surpass that by quite a bit for next year’s conference. It will be interesting to see where this goes in. In just about just a quick lesson about the truth about real estate investing is. I’ve observed this many times those who have great mentors and often times its parents and teachers. This week’s is no different. When parents teach your kids how to invest. I’ve seen it. I’ve seen it in people my age who had parents that taught them how to invest, and they are leaps and bounds ahead of everybody else. So that’s the truth about real estate investing. So this week’s guest again is a friend of mine, Andrew Hines, and this is a great episode. We talk about developing Real Estate as in building stuff, not just renovating stuff where the development market is going to talk about building materials labor costs and charges. Andrew started off with high end student rentals. How injured didn’t have to invest in disaster properties to receive great price appreciation. So you want to listen to how he does it. Many people who focus on the Burr strategy, for example, to buy or renovate, refinance, rent all those hours. Many people, that strategy often requires buying a really ugly property, but instead with a great value and strategy that is that doesn’t have to be such a major focus. And when you don’t have to renovate an ugly house, that I should note, will actually speed up the renovation time to get to make that property into a moneymaker. I believe that’s the ideal of every investor. None of us want to be spending more time renovating and holding a property while it’s vacant. We want money coming in as soon as possible so that Andrew has some great tips on that. The importance of having a mentor, Andrew has a very, very successful one. He talks about borrowing private money to invest with. And again, this is a great episode. Andrew Hines is a real estate investor from Burlington, Ontario, and he’s primarily invested in London, Ontario. As of the time of publishing this interview, Andrew has. Andrew has approximately $4 million in real estate holdings and is the host of the Andrew Hines Real Estate Investing podcast. Andrew advocates the use of the PRR method to achieve financial independence, and he has become quite proficient in construction management. We talked about that on the show building development due to his value add approach to real estate investing. Also, you’ll see in the interview that Andrew is quite good at managing contractors and staff and these very detail oriented and system oriented, which makes him a strong investor ideal for the construction management building department. Andrew owns several companies, including Construction General Contractor, and has built up multiple investment property units in southwestern Ontario. Thank you, Andrew. Andrew, hey, how’s it going? Excellent. Oh, you’re like one of the nicest sounding guests that ever had.

Andrew Hines [00:05:19] Yeah, I used the figured. I got the equipment as use it. Do you sing too? Yeah. Oh wow. We got a little band set up here.

Erwin Szeto [00:05:28] Do you have any gigs coming?

Andrew Hines [00:05:29] You know, I haven’t really performed, at least not, you know, campfire stuff, but I haven’t really performed out in years. We have like stuff from when I had a band together online.

Erwin Szeto [00:05:40] Cool. Cool. What was it called? What’s being called?

Andrew Hines [00:05:42] It was called sound as people.

Erwin Szeto [00:05:44] Sound as people.

Andrew Hines [00:05:46] Yeah. On YouTube, you can find it. There’s some good couple of good covers in there and some originals that we did.

Erwin Szeto [00:05:53] We’re the name come from.

Andrew Hines [00:05:54] And I was in that foster the people era. Here’s the dumb name, but it was the only one all four of us could agree on. So what happened?

Erwin Szeto [00:06:02] I probably isn’t easy to decide a name between four people.

Andrew Hines [00:06:06] Terrible. It’s like horrible experience.

Erwin Szeto [00:06:08] I think our easy it is how hard it is to choose a Netflix show between four people were going to watch two

Andrew Hines [00:06:13] people man just trying to choose one with my wife spent an hour trying to pick one of them up to watch it.

Erwin Szeto [00:06:20] And it’s only an hour commitment versus a name. Yeah, it’s going to be up on YouTube for how long?

Andrew Hines [00:06:26] But yeah, it wasn’t even our first one, either. So, but I mean, at the end of the day, it’s just like all band names sound dumb until you become big, and then the people are like, Oh, what a cool name. So we just never became big.

Erwin Szeto [00:06:37] Well, it wasn’t the equipment. That’s all. Yeah, I guess. I don’t know how that sounds.

Andrew Hines [00:06:41] Yeah, it was our it’s my fault. No.

Erwin Szeto [00:06:44] You know, I like,

Andrew Hines [00:06:45] you know what it is. I think we were really hitting our stride. But then one of the band members had a kid and we were doing it between London and Burlington. And it was just like, it was a lot. When people get into the thirties, they don’t. They don’t make time for that kind of thing as much.

Erwin Szeto [00:07:01] Mm hmm. Did you enjoy it? Yeah, I used to love it.

Andrew Hines [00:07:05] I used to really love it. And then I eventually started not loving it so much just because of the hits, you know, because of the coordinating. You know that I used to play in a bar band. Actually, we used to play it like just covers every Friday and Sunday night in London. So right after I graduated for many years, we played there. So kind of, you know, I loved like playing and, you know, getting that experience. I just always wanted to write my own music and we did that for a while and then eventually got really hard. And I’m just like, You know what? I’m good just playing my acoustic guitar at home and working on becoming a better singer. And just not as long as I get to be creative, I’m happy.

Erwin Szeto [00:07:40] OK, OK. Because where I was going with that is the stuff on the internet talking about how, you know, pursue your passions and you never work a better day in your life. Yeah. Doesn’t sound like you stayed with it while you stayed with it.

Andrew Hines [00:07:54] Because I did enjoy it, right? You know, I was there as long as I did enjoy it. And then and then the second, I wasn’t really enjoying it anymore. I kind of started moving away from it. So, but you know, that’s exactly the opposite of what Grant Cardone said, right? He said, Don’t pursue your passion, pursue the money. I think there’s room to find your passion inside the money, I think.

Erwin Szeto [00:08:13] Mm-Hmm. Mm-Hmm. That’s such an interesting point. You know, Steve Jobs has studied quite frequently in depth. I don’t know if Apple was specifically. He has his passion. I think he was just a competitive guy. Think you could have been anything? You could put anything in front of him. He would be passionate about just winning. Right? Yeah.

Andrew Hines [00:08:31] And he said it had to be great. I don’t know if you read his book, but I thought that was really cool. Even the back of the cabinet had to be perfect, right? Even though no one sees it. And you can really see that in their products. I thought that was really cool, right? So he pursued his passion inside of inside of something that works for the money too, right? But if you if you look at Stefan REI right now, he tried the music out, didn’t work for him. And it’s not. It’s not an industry that’s easy to make it in, right? Whereas Real Estate is an industry that it’s easy to succeed and write, a lot of very unintelligent people have success and Real Estate myself included. Sure.

Erwin Szeto [00:09:07] Guilty as charged. And yeah, because that’s why you’re here. Because we do talk about Real Estate on this podcast sometimes. Yeah. You know, you mentioned Grant actually said Real Estate. It’s brainless. I actually asked for him to go down that path for a little bit, for his talk at my conference. And he didn’t. I don’t think you did. But yeah, it’s actually funny that when he said, when I first heard him say that, it was like, Yeah, you’re right, you. You said it to like, you don’t need a massive IQ for Real Estate.

Andrew Hines [00:09:35] Well, I think it’s just forgiving REIN. It’s forgiving. When you make a mistake, the market tends to forgive you. You know, it goes up in value. Your mortgage is paying down it. It has the ability to absorb the stakes right until the times are bad and then it hurts bad. But I mean, I think in real estate, at least in my life, I’ve seen more of the growth in real estate, in the fruitful, rewarding nature of real estate versus the hard part. But I mean, the people in eighty nine to ninety one, you know, they probably have very different. Take on things, so maybe they wouldn’t agree with my statement.

Erwin Szeto [00:10:06] The grant’s point was to help how Real Estate has Real Estate is brainless and that it does not need his talent or still or his own personal attention once it’s up and running. Right? And he gives the example, like if he’s gone and I say the same thing as my own portfolio, my attendance will not care if I’m gone.

Andrew Hines [00:10:24] That’s true. They prefer that you are gone, I think, until something’s wrong.

Erwin Szeto [00:10:29] But even still alive, still, they usually don’t even call us. They usually call someone else to deal with stuff. As long as that stuff has been taken care of, they have no. My portfolio will continue on with, well, without me. And I think that’s one thing that people miss with when they’re trying to judge Real Estate as an investment. But yeah, and that’s what it Real Estate. But I want to know. But talk about your Real Estate because you do stuff a little bit different than most.

Andrew Hines [00:10:50] Yes. Yeah. So I well, I started in 2011. I bought a couple of single family homes and ran out of money to invest pretty quick. And I didn’t know how to be an active investor, but I got into the mortgage business under Carmen Carbonaro, who you’re familiar with, who’s brilliant? Yes, very smart lady. And she was, you know, it’s my, my wife’s mother. And, you know, I met my wife at the time and we were dating and she, you know, what do you want to do with your life? Well, I want to be in real Estate, but I don’t really know how or what or why. I knew why I knew the potential. And I just ended up working for Carmen in the mortgage business for many years, and I learned I worked with her investor clients. I started seeing all these people doing amazing things, and I wanted to get in the game and didn’t know how. And I bought some properties didn’t really take off. They were fine, slow and steady, and I wanted to get a little aggressive. So I borrowed some money on a lot of credit. Bought some properties in the US. Oh, wow. Oh, go.

Erwin Szeto [00:11:47] Well, do you know what, city?

Andrew Hines [00:11:50] Youngstown, Ohio And yeah, you know, one of one of the clients I was helping out was investing there. He bought 20. So whatever it hurt me, it hurt him a lot worse. And he bought in Phenix and he bought in Youngstown, and Phenix took off and did so well for him. And then Youngstown was a bit of a crash and burn. And I didn’t have the Phenix Park to balance that off. So I ended up eating around a $40000 loss on Youngstown and finally got out of there right around 2015. I bought my first property to Reno and Br as a student rental. And you know, at the time, I wasn’t really in a position to get approved for mortgages, so I actually ended up selling that one and I ended up selling a couple that I would have loved to keep just because I hadn’t quite figured out how to get the qualification to work for me being self-employed.

Erwin Szeto [00:12:40] So each of these properties, you finished the renovation and then you sold.

Andrew Hines [00:12:43] Yeah, I did. A renovation ended up selling them like they weren’t like listed properties or anything like that. But I just because I work with investors, I ended up having some connections to people who wanted to buy them. So I ended up selling a couple and I realized, Hey, you know, there’s money in selling them and keeping them. So I started a company and I ended up flipping money. And then I also started burning them. So I would I would find a property and I would turn it into, you know, it’d be something that I could buy around 200 grand and I’d put one hundred fifty two hundred grand into it to make it a premium top end core stainless steel en suite bathrooms where possible, type of student rental that commands top of market rent. And that’s where I like to be. I like to be the investor. I realized that, you know, a tenant, a tenant that’s trying to rent my place because it’s cheap or because it’s a quote unquote good deal. Or I guess more on the cheap side. I don’t want that tenant. I want the tenant that’s going to be like, so excited and enthusiastic to share pictures of their place with all their friends, and they can’t wait to have their friends over so they can see how nice their places put on Instagram. Yeah, throw it on Instagram. You know their parents are paying their rent. So I mean, I do direct withdrawal right out of the parents accounts. And I’m not a big fan as my ideal target tenant. This might sound bad. I’m not a big fan of someone paying your own way. I don’t really want that person as my tenant, you know, as a student, that’s how, you know, working two part time jobs to pay their rent because they’re the ones that are typically going to be more high maintenance for me

Erwin Szeto [00:14:12] so that it becomes less stable and less

Andrew Hines [00:14:14] stable. Where, you know, there’s pros and cons to that too, right? Because the one that that worked for A does know how to respect somebody else’s property in a lot of cases and sometimes the ones that get everything given to them don’t treat things as well. But it’s not a rule in either direction, right? You know, it’s not that it’s not a rule across all people. Sorry for the long version of that.

Erwin Szeto [00:14:34] No, no, no. This is actually good because you don’t. No one’s talked about doing rentals on the show for a while. No, I want to clarify with the BR. What was it you’re buying which help? What kind of condition was it? We’re buying was honorific or was it like

Andrew Hines [00:14:47] a RAFIC, like, like moderate? You know, something that’s very middle of the road for so long in Ontario Western University? I haven’t. I don’t have any college based rentals. It’s all for the university there, and it would be stuff that would rent for maybe four hundred and fifty a month. Had I not renovated it per bedroom, and in the problem with those are there’s such a huge supply of them that you’re competing against absolutely everyone. When I came up with the concept of making them really nice, like do pro photos, make them, you know, make them pop and do courts do things that other landlords won’t do, then all of a sudden, I’m not really competing with many people at all. And now it’s much easier now granted, and since I started doing that, a lot of other people have done similar and their units stepped up their game. So now I got to keep, I got their email. Yeah, you know, the exact ones I’m talking about. I don’t really consider his name as we know the same, the same person that’s sending these emails. I don’t really consider those ones that nice. I take those and basically finish it a lot nicer.

Erwin Szeto [00:15:49] Hey, guys.

Andrew Hines [00:15:49] Yeah, so you might. So to answer your question, you might have one with some wonky flaws. So I go in and I try and fix the flaws. If I don’t like walking uphill and downhill inside of a house, that’s not really my thing. So if I find a house like that, I can’t stand to own it unless I can fix it and find a way to fix that. Find other problems if the plumbing needs to be replaced, we replace it. If electrical needs to be replaced, we don’t. There’s not one to. That’s not saying, you know, everything’s done, done right, like you would want it. So you go in and I never want somebody to come back and say, Oh, it’s pretty good, but I wish they’d done this or I wish they had this. And so I just try and avoid that. And as I’m thinking and planning, I’m thinking, how can I make it so that they’ve got everything they wanted?

Erwin Szeto [00:16:33] Very, very cool. So for example, I went to McMaster students in vacances like nothing. Yeah. What is it like in London?

Andrew Hines [00:16:42] Similar right now. It’s really time of year sensitive. So right now, I mean, as far as the rental cycle goes, there’s not enough inventory like there’s more students looking than there are inventory available. They just keep increasing enrollment at Leicester. And so even though they keep the school itself, keeps putting out student rentals or not student rentals, but residences, and they keep increasing, you know, building a couple of more buildings. But it doesn’t seem to matter. The amount of the amount of inventory is just not enough to keep it keep up with their enrollment. So it’s been quite good for landlords. Rents have been on the increase a bit. I’ve noticed the demand has been very consistent in terms of the exact numbers. I don’t have them, but my sense is that it’s very good. Like I know if you’re thinking Waterloo, like Waterloo, obviously experienced a bit of a setback with their real estate values, they had a little bit more of the supply and not enough of the demand. London I’ve never really seen any signs of that

Erwin Szeto [00:17:38] for folks who don’t know what you’re talking about with the Waterloo that they built. They’ve got a lot of high rise apartment buildings that are specific for students. And just to throw it out there, folks, just as a caution, there are still eight banks who will knock your financing on those units. So it just tells you something about the underlying.

Andrew Hines [00:17:57] Yeah, they don’t like the outlook, right?

Erwin Szeto [00:17:59] They don’t like they are like. So if the bank won’t make money on you by lending on you end up piece of Real Estate, maybe consider what you’re doing.

Andrew Hines [00:18:08] Well, I don’t know. Like, I think Western’s the school that I just knew, right? I went there and made so much sense to me. Like I know a lot of all the kids that went to private school in, like the Oakville and Mississauga areas. Those are a big part of the tenant or the student base at Weston. So there’s a lot of very wealthy families, a lot of heritage at Western. People want to go there. It’s an it’s a very large. I think when I was there, they had thirty thousand students and I don’t know what it’s up to now, but they’re probably pushing closer to 40. It’s been a while, so you know, there’s just such diversity in their programs. They’ve got the Richard Ivey School of Business, which is where I went. Huge demand for that. What year were you? I was two thousand eight, graduated in 2002. You’re there the MBA or HB? OK. I had no idea we had that in common anymore.

Erwin Szeto [00:19:00] Well, I know you went to Western. I have the program. Your share with me, Andrew.

Andrew Hines [00:19:06] Fair enough.

Erwin Szeto [00:19:08] And you’re a musician, too. Wow. How many? Anyway, many musicians in my program for my year?

Andrew Hines [00:19:14] Well, yeah, he was, you know, it was strange. Like, that didn’t really. It didn’t really have that that so much. But I mean, the people that went to Ivy, like when I was there, there was a lot of really impressive resumes, interesting people. And I’ve followed some of them since then and they become multi multimillionaires, a lot of a lot of them. It’s interesting to follow

Erwin Szeto [00:19:33] to my classmates. They got named to top 40 under 40 for Canada.

Andrew Hines [00:19:38] Oh, nice.

Erwin Szeto [00:19:40] Thank you both. So good for you. That’s a pretty good one with a lot

Andrew Hines [00:19:44] of high achievers there, right? But the point of all that was that I just see I see the reasons why, why London and Western specifically will always have a demand. So but it doesn’t mean we won’t have a moment where the market goes soft and there is too much supply. And now all of a sudden. A lot of the mediocre rentals are not renting, so I’m cognizant of that, and I’m very adamant that my product needs to stand out from your circumstances. So I’m taking know great locations and it doesn’t necessarily have to be right beside the university, but I’m picking areas where if I’m if I’m not right next to the university, I’m like 10 steps. That’s an exaggeration. I’m twenty five meters to 50 meters away from the bus stop, so that way they can just walk out their door and their at campus quicker than they could walk if they were at one of my closer locations. And you know that sometimes you got to walk them through that right? You know, you have to say, Hey, you know, it’s, you know, it’s just a three minute walk or I’ll have them there. And obviously, hey, do you see that I’ll point from the front porch or be like, that’s the bus stop right there? And you know, it’s a great selling feature. It helps, helps keep them rented, right?

Erwin Szeto [00:20:49] Mm hmm. Treasurer winters are cold.

Andrew Hines [00:20:51] Oh yeah, it’s miserable in London. Very miserable.

Erwin Szeto [00:20:54] It wasn’t that bad when I was there the year I was. There was the year that the city of Toronto called in the military last week called it the military for Toronto. It was actually worse in Toronto that it wasn’t one that even though London’s on the snow belt.

Andrew Hines [00:21:05] Yeah, and the snowball they had four days in two thousand and eight. No, it doesn’t tend that four days. It was after I left where they had to shut the shut school down and they had never they had never shut it down. They had one shut down in the previous, like 30 or 40 years, and they shut down four times for snow day.

Erwin Szeto [00:21:23] I don’t think that ever happened when I was going to school shutdowns. Are you still actively acquiring properties in London?

Andrew Hines [00:21:30] I haven’t in a little bit. The last property I bought in London, which is actually just the last property I bought, was in the last year. It was in twenty eighteen. I rented it, I added. That wasn’t a student rental. I kind of took a pause and the reason for the pause was the financing side of things because it was getting harder and harder to finance them. And I had to go to specific banks and it relied very, very much so on specific appraisers that understood the value and appraised them. And granted, I learned a few tricks and I was able to still get financing. What I was noticing is that my loan to values were getting cut back pretty aggressively. So instead of getting 80 percent of the value, you know, I’d be getting sixty seven or sixty five. And all of a sudden now I’m in with either private money or some other form of money that’s not as cheap. And you know where I want to get my mortgage money and recycle that. So it kind of I took a step back and sort of paused as the market in London erupted and the inventory I used to be able to buy around 200000 was now costing 350 to 400, and it was pretty much the same property. But now I’m, you know, I was looking at how much higher exposure for the amount of gain I felt I had. And in the uncertainty too, because you’re like the values I’ve pushed, I’m always kind of setting new precedent, like I have a property that I would I wouldn’t part with for under a million dollars and it’s a six bed, six and a half baths, pretty much on the on the border campus. And it’s an it’s a real beauty of a property. You know, the highest appraisal I got was eight hundred and forty thousand. I know I could get much, much more than that. I had had it appraised twice and even on that 840, I think that’s a pretty good appraisal. I know that was a very good appraisal. But the bank was only willing to give it give me five sixty five on that cover and sixty five thousand on an 840 valuation.

Erwin Szeto [00:23:22] But sorry, that’s not the way it would lend you.

Andrew Hines [00:23:24] That’s what they do. That’s what they would lend me. Not, you know, for various reasons. Part of it is that the schedule the banks, generally speaking, don’t really like student rentals. So if they are willing to look at them, they’re giving you. They’re doing a market rent based on what a family would read the property for. And therein lies a lot of the problem, because they’re valuing it based on it being families that are coming, coming in and I’m getting fifty one sixty on that. On that one, I just mentioned a month and a family. What are they going to pay their three thousand thirty five hundred? And the best case scenario? It’s kind of an odd layout for a family with en suite bathrooms. So, you know, basically

Erwin Szeto [00:24:06] it’s not just about bathrooms. Yeah. Wow. Never seen anything like that. I know that all six bathrooms.

Andrew Hines [00:24:15] Yeah. So that was why, you know, it was an easy sell to the kids, right? I actually that was the one I had. I had listed it at seven fifty. I had nineteen groups of students through in an hour and a half long span and it was a zoo. I told the tenants to please just give me an hour, give me two hours, go somewhere and I had it. I showed it to 19 groups, five groups at a time, four or five groups at a time. And then I just explain the process. I be like, OK, so it was seven fifty. Obviously, you can see this a lot of interest, to be fair to everyone. Here’s the process make me an offer and I had offers multiple offers on it, and the high score was eight 60 a bedroom. So they’re the ones that got it. And that’s the first and only time I’ve ever done that. I learned that from a friend of mine who’s also in the student rental. Game and fair, hey, they do it with Real Estate, why don’t we do it with, you know, why don’t we do it the rental and see how it goes? So that was the success. I actually got it, that got them to sign for three years as well. So that was, you know, turnover in student rentals is a really big pain. We don’t get it. Getting them in for three years was huge. So, you know, no, no, no problems there. It really it really does help make things streamlined.

Erwin Szeto [00:25:27] Do you know what the what programs these kids? What kind of background they are rich. That’s a lot of money for a kid. That’s a lot of money for anybody right there.

Andrew Hines [00:25:35] Well, eight 60. Is there really, though? I think I mean; I know some people in Hamilton will pay that kind of price. If you’re thinking, like for a parent, that for a room. Well, no. OK, so all these kids with the private schools they all do, they all went to like, you know, a Vancouver private school or an Oakville private school without naming specific names. You know, a Hamilton private school. So there was obviously the parents, you know, I look at, I look at the target customer, right, like their parents are willing to pay for the kid to have the best. That’s the person I want. I specifically do everything with that in mind, right? And I don’t know if enough real estate investors do that. Do they think about who is it that I’m trying to go after here? Who is it that I want to rent before I even begin planning a property to buy? I decide who I want to rent to and who I’m trying to attract, like if I’m not doing student rentals, I’m targeting professionals who are in transition. I like doctors. People on employment contracts. People who are going to come in and not want to make it their forever home. If I get somebody that says it’s going to be there forever home, I’ve made a mistake because that means they’re going to stay. They’re going to slow me from increasing my rents. It’s, you know, it’s really not an ideal scenario. So, you know, if there’s one thing I could say that, you know, investors should definitely keep in mind is keep in mind who you’re trying to attract. Like so many people would just go in and they’ll renovate with laminate countertops because it’s cheaper to do laminate. But is it better to do the cheaper? No, typically it’s not. If you’re trying to attract the high end tenant, if you want just every day, forever home type of people, you can definitely find them with laminate. But I would argue that’s probably not what most investors really would want if they thought about it that way.

Erwin Szeto [00:27:14] Students especially have had to get burned.

Andrew Hines [00:27:16] So, yeah, yeah, well, you can rent records too. You can. But I mean, I get the parental guarantors, so everyone who comes in signs prepared and other parents sign a parental guarantor and you would be you probably wouldn’t be surprised because you’re in this game. But you know, people students specifically get very concerned if their parents comes up in the conversation, if they’ve done something wrong. And I think it does tend to keep them honest as far as how they treat the place. Mm hmm.

Erwin Szeto [00:27:45] And then for anyone who was going to raise a red flag about human rights, it’s acceptable as long as you ask every single tenant applicant for guarantor, as long as you treat everybody the same.

Andrew Hines [00:27:56] Yeah, all of them, sign it every single person.

Erwin Szeto [00:27:58] So you mentioned that you renovate these things. Nice. Do you furnish it all anything to try to attract that higher end tenant?

Andrew Hines [00:28:04] I do. Yeah, and that’s something that I’m also considering ramping up. But as of now, the vast majority of my properties in the student rental side of things are furnished in the common areas. So they get a TV on the wall, give them a high-def TV. I’ll usually do like a nice accent wall and give them their basic couch kitchen table stools for like, you know, I’ll usually do like a breakfast bar or something like that, and I’ll put stools at it and I’ll give them two fridges instead of one, you know, because one’s never enough. Yet somehow they still want to bring in mini fridges. But, you know, I make sure that I give them those things so that hopefully they won’t bring the mini fridge or that just leave it at home. And, you know, because I’m paying utilities included, so I pay them. And yes, I furnished the common areas. That’s big. I haven’t noticed the demand to have furnished bedrooms, but that is really the next question because I know there are some of my competitors out there, although I don’t really look at it that way, but there are some out there that are furnishing the bedrooms as well. And again, it comes back to who am I trying to attract? I’ve been mulling this over and maybe you have some insights to hear Erwin. But you know, if I am going after the people, you know, private school kids and people like that with professional parents who are paying the bill, you know, do they want their own bed or do they want something provided? What’s easier? What’s better? I haven’t really got a clear a clear indication on that either which way, but I do know that sometimes what will happen is if you do furnish it, they’ll say, Well, we have a bed, you have somewhere you can store it. Well, that’s not happening. So I guess that’s where I have left it, where it is. But I think it’s very clear a first year student finding five friends in first year they don’t know each other beforehand is a pretty good odds that they do not have a couch and they do not have a table, and they do not have any of the basics that they’re going to need or a TV. And if they buy it, who’s going to keep it when they leave? So I think it helps my selling point to say, Look, this stuff’s all taken care of you guys not to do anything like you can just move. And just bring your own personal stuff, your own desk, and go from there.

Erwin Szeto [00:30:07] We do the same thing. And part of the reason the reasoning is we don’t want to think of a couch and this is these are people that don’t own your house, so maybe not treated as well as you would. But when that couch interest is at the house, you have that happens to every year, every two years as excess wear and tear on the property.

Andrew Hines [00:30:24] Yeah, they’ll smack the walls. And the other thing is when you go in to show it to somebody else, and they brought in the rowdiest piece of garbage that they found on the side of the road somewhere. Not all tenants would do this, but I had some tenants that didn’t really think of the property as the way I would ideally hope they thought of it, and they brought in a really bad stuff. And I’m like, This actually hurts me from showing the property to the next group. So it was after that one I decided, You know what? No more tenants bring in their own couch. I’m putting the couch in here and something that actually looks good with this place.

Erwin Szeto [00:30:55] I remember being back in school and, you know, I had friends who would pick up furniture off the corner. And now, with bedbugs being so popular,

Andrew Hines [00:31:05] they’re really in style right now.

Erwin Szeto [00:31:10] I mean, it’s a simple guy and use simple words. And the point I’m trying to make is often some people have me thrown out that challenge because it had bedbugs. And now someone’s picking you up off the corner, breaking into your property. Yeah, you really don’t want that. I mean, you don’t want that at all.

Andrew Hines [00:31:24] You can’t control that with their beds. Are you furnishing their bedrooms or? No, we

Erwin Szeto [00:31:28] don’t actually have. That would be a request for furnishing and separate international students. Yes. Which is I don’t know how you say my preference is for students that have parents that will come visit them because I have, they’ll be motivated to clean it.

Andrew Hines [00:31:43] Oh, OK. Yeah, that’s an interesting thing to know. I didn’t know that. But yeah, you’re right. If the parents are coming to be like, What is this mess? Yeah, absolutely. They’re going to put some pressure on them to keep it clean.

Erwin Szeto [00:31:54] Yeah, especially if it’s six kids and you have six sets of parents. And, you know, probably each weekend somebody come in REIN because they’re my students, their parents come frequently. And my, yeah, my current place is my newest place spotless. So I’m trying to get them to stay.

Andrew Hines [00:32:10] Yeah, if you have good ones, that’s so worth just keeping. I had actually a bunch of reasons this year. Last year, I had had four of five student units, so out of just twenty four dollars in total and my student portfolio and I had four units turnover and it was just my property management company, which I did have gave me the boot. They didn’t. They didn’t want my business anymore. Then we had some disagreements, but it’s all. It’s all fine. So I had to hustle and just basically I was driving down to London from Burlington twice a week. Going through that, I’ve got some better systems now, but this year to be able to do everything through email and get pretty well, everyone to stay, and I have a rental agent that helps me out down there. It was, Oh man, it’s wonderful when they say

Erwin Szeto [00:32:58] you have management in-house.

Andrew Hines [00:33:01] Yeah. So I basically decided to restructure things. I have a rental agent. I’m not a property manager. I’ve set up some systems. I have a series of emails that go out and procedures as to how students should deal with problems. So at the beginning of the year, they get an email introducing, Hey, you’re moving in. Here’s what to do with garbage. Here’s how to treat the house. Here’s what to do if something’s wrong. You know, emergency contacts the contact for me if they need me and what not to do, which is do not call me in the middle of the night. Not everyone gets it, but for the most part they do. They figure it out. And so I set up some systems, and a long, long story short is, no, I do not have a management company, but I do have people that that assist me and maintenance people, people who can paint because I’m so involved and we have even gone there. But when I was doing all those renovations, I got good with kind of managing trades, and I eventually started my own construction company and built many, many investment units. Several, you know, I’m working on 15 townhouses right now, building them for an investor. So, you know, it’s kind of the other side of my business. But because I have that, I actually have a pretty good, pretty good sphere of people that I can. I can call on them to help me out when I need it.

Erwin Szeto [00:34:17] And I remember you telling about a townhouse complex. You’ve already done one. All right.

Andrew Hines [00:34:21] I built a twenty seven unit townhouse complex in South London, and that was for my mother in law, Carmen. She had a development there and she saw me renovating my places and knew I had some good trades. And she said, Well, hey, would you be able to pick this up and get it done fast? Because I’m kind of impatient. Everything’s got to go fast. So I at least with rentals, it does. So I kind of reluctantly said, yes, you know, I knew it was a stretch, but I took it on and I did. Twenty seven townhouses over about 18 months. Finished that part of the subdivision to paving curbs. Landscaping saw it all that, all that jazz. So that was a big learning experience, and I started getting asked by investors to help them. Renovate their places, build small additions. Not that I ever intended to go there. I just, you know, it was just kind of I was already doing it for myself, doing rentals and such and building additions that I was just getting asked by others to do it. And it actually ended up being quite a lucrative thing and ended up being something that fit really well with my skill set. And it actually saved me from having to sell so many properties. I didn’t need to sell properties to generate income inside of one of my companies to flip. I could actually just hang on to them and I could renovate and build four for active income.

Erwin Szeto [00:35:36] Interesting. And those twenty seven units and even the 15 units that you’re doing now are they were they held where they sold off as condos?

Andrew Hines [00:35:44] Alvin held to date. So I’m not Italian builder. I can’t build something for resale. I mean, there is a way that we can make that work that can be subcontracted under or under somebody who is TARIANA registered. It just it wasn’t really something. Yeah, it wasn’t really something I wanted to do. It’s not something I set out to do. I am an ambassador at heart and I’m not really in it to go Bill. I’m doing consulting on a custom home builder right now is for a for a friend. You know, normally I wouldn’t. I wouldn’t typically take on a project like that because it’s just not my model. I do efficiency builds. Use my vinyl plank flooring. I love quartz, my stainless steel, go to my kitchen provider. There aren’t a lot of questions to be asked. I know, I know what I’m doing, and I can follow my model.

Erwin Szeto [00:36:28] Interesting and are going to do it yourself.

Andrew Hines [00:36:31] Do I like you? Are you asking if I like, pick up a hammer?

Erwin Szeto [00:36:34] No, I mean, you’re doing these complexes and hold it yourself.

Andrew Hines [00:36:37] That’s absolutely what I’m working towards because I just something about what I’ve done, what I’ve seen. I just want everything I own to be fantastic, right? And the older stuff. I love heritage homes. But if I had a heritage home, I would. I would renovated significantly just to make it like I’d love to have one for my own home. I’d want it to be fantastic, right? Like I said, I can’t stand wonky floors up and down bad wiring, poor heat circulation. Those things bugged me, so I’d want to correct them all. So, you know, I would definitely plan to build a larger complex. So I’ve had my hand in development too. So as I’ve been doing some of these projects, I’ve actually assisted the developer with some of the development. And the thing is dealing with the consultants, the engineers, dealing with the municipalities and getting the site plan approvals completed all their requirements. So I do have a very good gauge on what’s needed to do it, and I am often crunching numbers on development. Somebody puts a piece of land up for sale. I’ve got a very good grasp on what it costs to service it, what it’s going to cost and development charges and permit fees and all that stuff. So it helps. In the resounding most common conclusion I come to is there isn’t profit in the deal. That’s the truth. When somebody posts a developable piece of land on realtor dossier, yeah, it’s most often not profitable. In fact, you’ll most likely lose significant money if you buy it due to the plan.

Erwin Szeto [00:38:05] But that means for listeners benefit the

Andrew Hines [00:38:08] job that they might be targeted or very ignorant people who think, yeah, who think that they can just do it. Oh yeah, we got something here. We look what we found. It happens. You really got to be careful development that side of things. I’ve been in this game as an investor for nine years or almost nine years, and I still haven’t gone down that road. I still haven’t taken on a big project like that, but that is the next logical step. Definitely.

Erwin Szeto [00:38:32] If you can find numbers that work because I know a lot of investors, you should, you should come, you should come to some December fifth to my Erwin meeting. I have a developers are going to be there like REI Rob. They’re building a 30 story in Hamilton. And if you can get them off, ask them, asking what those numbers are like.

Andrew Hines [00:38:47] Oh, absolutely, I’d love to December 5th.

Erwin Szeto [00:38:50] Look it up. I’ll send you a link. Sounds good. Yeah, that’s he’s our he’s our main speaker. I and his brother, lifestyle, custom homes, their past guest on this podcast. I need to have them back on it because we’re talking about various different stuff back then. But they have two sizable condo developments one in Scarborough. I don’t know how many stories it is. It’s a couple of hundred units, though. And then a 30 story is many hundreds of units.

Andrew Hines [00:39:12] And you know, it’s the amazing thing not to cut you off it. Just with Carmen’s development company, she’s got urban planners and engineers that literally work in the office. So I float around and there quite often they’re like, Oh, Eric, can I bend your ear a little bit? What do

Erwin Szeto [00:39:27] you think? I think that’s interesting because I know many developers, for example, some will have like an office of four people, and that’s it. Mm hmm.

Andrew Hines [00:39:35] Well, it’s not just because they’re in, they’re in the asset management and growth side of things, too. So they have an asset portfolio of properties anywhere from five units to 100 units per building. They’ve got a reach out of that office. They’ve got, you know, it’s not just development, it’s also development partnering. They’ve got probably 20 people who work in the accounting department alone. So it’s an it’s about a 70 person operation now. The. Queen Pro Funds and Valor Capital, so it’s been incredible because when I started there, it was me, Carmen and the receptionist. And it’s grown. You know, she was big before then she got small and then she got back again, and it’s been so cool to watch it. I mean, like I said before, when you were on my podcast. Yeah, she’s a very inspiring person. And just the amount of wealth of knowledge that that’s surrounding her is very, very cool to be able to network with this.

Erwin Szeto [00:40:31] Amazing. That’s amazing. Do you mind if I ask you about development because it’s a popular subject these days. People are just looking for the next best thing. You know, people, I think I think Real Estate Halton cycles as in like, what’s the hottest thing? What was it years ago? Years ago, it was like multi small multi families, which are not conforming. So that was really popular single family cash flow and single families about six years ago. Quite well. And then then pretty much everywhere across Ontario, nonconforming Maltese were being cracked down on. So then that’s when I got student Herentals heavily. And for people who aren’t necessarily Western rentals, it’s nice because you don’t have to do a ton of renovations to before you can get a working asset. And then and then legal basement became popular because they started being able to allow to do them. So that’s by far the most popular strategy now. And with I don’t know what it is, but I think people are looking to make more money so they can replace existing job money, which is, I think, why people are looking for development more and more. But it is just not easy. Charles why? Know Charles?

Andrew Hines [00:41:35] Yes, I actually have never met him. I just know him by name. Oh, OK.

Erwin Szeto [00:41:39] But I hear all the time he’s on the Halton Hamilton Halton Builders Association. So I hear, like firsthand government charges are going up everywhere and labor and materials having gotten better and pricing you there.

Andrew Hines [00:41:51] I’d see like, yeah, development charges are one thing and they are on their way up, but that’s they were just high to begin with. What’s really been the problem is, is the cost of lumber and labor simplified. It’s more than just lumber and labor. But yeah, it’s incredible. I watched, you know, a two by four used to be like two dollars to buy four by eight. And now that you buy for, I haven’t checked the price recently, but it’s probably three and a quarter or three and a half, depending on where you’re getting it. And you know, I’ve seen I’ve seen lumber nearly double in a lot, depending on what you’re getting the cost of trusses over a four year span. Drywall, something used to be able to get a sheet five dollars and fifty cents six dollars. Now, you know, a regular sheet of drywall is over ten dollars. And these type of costs? I mean, did income go up by that much in that time? I mean, yes, we’ve seen yes, we’ve doubled in four years. No, exactly. Right. So I mean, yes, we’ve seen our values grow significantly, but that’s the key thing here. Erwin, as you know, is that the cost of new construction drives resale home value. And the only way that developers can be profitable is by just constantly increasing their prices is they’re paying more in development charges, they’re paying way more to trade. There was a huge rush on trades in twenty seventeen and it made it almost impossible to get to get framers. I used to. I used to pay framers six dollars a square foot. Now my current project guess what? A Pam 12. And that’s cheaper. Well, it’s a double. OK, so we’ve doubled labor, you know, these type of costs, it’s so ridiculous. And I just look at it, is it going to get cheaper? Are we going to get cheaper cost of building? No, it’s going to get more expensive, but incomes, not pacing this. So where is Ontario and where is Canada going? What’s happening? I honestly don’t really know, but what I can say is, is that I have a lot of confidence that our market’s going to keep going up in terms of price of Real Estate. I don’t know how much and how fast, but you know, I’m in it for the long term gain with Real Estate. I don’t want to flip and sell. I want to keep everything because I know if this keeps happening on the new construction side, then we’re just going to keep seeing it on the on the resale side and everything you can get your hands on is going to go up pretty damn significantly.

Erwin Szeto [00:44:12] The I shared that at the conference so anyone can go to Interior Ministry of Finance. Their predictions are their middle predictions. Their neutral prediction is 3.4 million more million people in the GTA by 2040. Six.

Andrew Hines [00:44:28] Yeah. So where’s the money coming from, right? Because the average Canadian can’t afford it. So, so the current middle class of Canadians is just if it’s not shrink, I guess you could say it’s shrinking, it’s disappearing the middle class. It might just be an illusion already. You know, you’re either rich or you’re poor, and I think it’s becoming more that way. So I think as an investor in real estate, you’re in, you’re in the one percent of people who actually think like this and you have to kind of make the conscious decision that you’re going to choose to be rich because there isn’t really going to be a middle ground. From what I can see, that’s just my thoughts.

Erwin Szeto [00:45:00] If anyone who disagrees is looked at and I say, we’re going to be like New York City or like an Old City in Europe, for example, I always bring this up to your people from European descent. You know, where are you from? Or you say they’re from Spain and like, OK, how much does a condo cost in Barcelona? Then my question usually I’m talking to younger people. I don’t know why someone in their 30s and said, Does anyone your age own Real Estate where you’re from? They know everyone rents, right? And then you were. You were just telling your example. With middle income, people will still make a middle income, but they’ll be renters.

Andrew Hines [00:45:33] Yeah, that’s what I was thinking. I was thinking Ontario will go to where it’s only three percent of people are owning their own homes and then the rest is all rental properties. And so the landlord is the ruling is the lesson there be a landlord? Yes, you know, it’s I just don’t see how the finances can work. Other ways I don’t otherwise right? Like you go back to the 50s, the forties and thirties. I mean, we’ve just consistently seen home prices have gone up faster than incomes. Cost of living and taxation have both gone up faster than incomes just constantly all the way through. So that’s another can of worms. We’re not going to get into that, though.

Erwin Szeto [00:46:09] I just want we can touch on the household incomes took a big bump, like, for example, like my generation. I remember I think remember Act two, like elementary school. I think almost everyone had a parent at home. One parent worked almost. I think 90 percent of us had a parent at home, including my family. Right? Look at today’s generation. How many parents stay home? My point is that most many households, the vast majority of households, I believe our income, right?

Andrew Hines [00:46:35] Yeah, they’re double income. And even then they’re leveraging like, Oh yeah, having worked in the mortgage business, I saw how they, you know, they expanded the ratio that they would allow right up to 44 percent. So, so you’re allowed to spend forty four percent of your income on all your debts and debt servicing for your home and everything else. But if you’re in the top tax bracket, you’re paying fifty five percent in the top. So that leaves what one percent left over for everything else you do. I mean, I know that’s an overly simplified and it’s not really like that, exactly. But I think just the whole system is set up to cause people to spend a lot of money. And you know, the moral of the story I just constantly keep coming back to is we need to be as investors actively building our portfolio now because in 30 years, everything you owe you will own. So all of the mortgages that you owe will now just be equity that you own and properties and you’re going to need it in order to retire. And I really do think that that’s where we’re going to be at. So. So it’s why I’m pretty, pretty adamant about building. Mm-Hmm.

Erwin Szeto [00:47:37] And then for anyone who’s listening, that’s apparent. I don’t want my kid to be a renter in the future, nor my grandkids area. So you better do something about it now.

Andrew Hines [00:47:46] Erwin Are you going to sell the houses you bought for your kids? Or are you just going to refinance them to pay for the tuition?

Erwin Szeto [00:47:52] That’s all one of them. Yeah. So that was one of the first Airbnb. Yeah. When I was Airbnb being on the on the health mountain, it just it just wasn’t to generate enough cash flow. So I thought so. I figured I’d sell that one, but we’re actually renting and offering another property right now. So, yeah, I don’t know which one will be. That was my son’s property, but no, the plan. The plan has always been that we told them all unless for reasons we didn’t anticipate, we would sell this house. It’s just again, it wasn’t yielding as much as is my only single family home in Hamilton, so it can yield the same cash flow as my other properties. So then I felt I could make more money with it otherwise,

Andrew Hines [00:48:27] yeah, single families probably don’t like where you’re at. I probably don’t make as much sense for you, right? You obviously want to get more doors under one roof.

Erwin Szeto [00:48:34] Exactly. Well, actually buying something commercial, but that’s a story for another day. So what are you working on these days? I know you have a meet up and it’s a pretty popular meetup. I hear any more podcast.

Andrew Hines [00:48:46] Yeah, I got a podcast. So I guess what really happened is, you know, I was looking at the London, the London prices, and that’s where I’ve been. You know, I’ve been living under a rock. I wasn’t really networking with other investors, listening to podcasts, doing any of that, and I just decided, you know, this market’s gone crazy. I don’t feel good about the opportunities I have here, and I feel like I need to take a step back and build my network. I need to. I need to get out there, meet more people, learn new strategies because a lot of what I’ve done and learn was because of a mentor of mine that I was doing student rentals with. He was just an open book with me. He would share stuff. He’d help me as my realtor. And he taught me a lot and I learned how to do. The student runs a game by really interacting with him, and I wanted to build beyond that because I didn’t feel so comfortable with the student stuff. So I started. I started the podcast. I started getting on social with Instagram, documenting stuff I was doing and then I started to meet up shortly after I started the podcast in February of this year. And I just, you know, I used Instagram to market it. I had a pretty active profile for a while and it just kind of grew. It grew relatively quicker than I thought it would. And the thing I’m most happy about was just being able to connect with so many people who are active investors like, you know, ultimately, I think we probably found each other because of me doing that. And you know, a lot of other people are just, you know, somebody mentioned the name, mentioned a name, and all of a sudden we’re talking to each other. And I think it’s a great business card to have a podcast. So it slowed me down, though from what I was doing with real estate, it slowed me down. So the last year has more been working on the development that I’m helping carbon out with, that the 15 towns and basically planning the next move. What is it? And I’m not sure exactly what it will be. I am. I am actively soliciting off market deals, you know, firing this not and I am speaking with a lot of private sellers. I’ve heard dog a couple of deals that didn’t quite work for me, but I’m looking to buy under market Real Estate. I’m looking to buy stuff where I can have an instant equity position if I’m going to close on it. If it’s not exactly my cup of tea or not, the property that I would like to own long term, then that would be something that I would wholesale out. So that’s sort of a game plan right now in any particular market focused on Hamilton right now. Hamilton Burlington area property, isn’t it? Well, it’s, you know, Burlington is the lesser popular because there really aren’t as many as many houses in need of work. Hamilton is popular because there’s so many houses in the East End that are rough, and I’m sure there’s many on the mountain too that just need work. They need love and the owners in them are up pretty significant on their equity anyway. So there’s probably a motivation to sell.

Erwin Szeto [00:51:29] I always find that Burlington rents weren’t very good, so it’s not a great exit should you need to rent it out?

Andrew Hines [00:51:35] No, Burlington, they’re not that great. So with Burlington, it needs to be a much more strategic micro approach like it’s kind of on a, you know, property for property, right? Like, acknowledge drive around, find the property that obviously are in need of work there, obviously in disrepair and then reach out to those owners directly. I don’t think that, you know, acquiring a neighborhood is going to work at Burlington. It’s just to develop. There’s it’s too nice and there’s already been way too much money spent.

Erwin Szeto [00:52:02] Hmm. Jacob Brown, I’m not sure if you know him. He’s been a part of my show. He would actually target you what he’s doing or invests Oakville, which is his target, was actually trying to find houses that could be that people and tear down neighborhoods.

Andrew Hines [00:52:16] Right? Yeah, just find something rough, like find something that that looks like the owner is really not investing anything in that. Maybe they want to get rid of. It depends on your model, too, like how well below market value do you need to buy thinking how much below it? I think a lot of people aren’t really willing to do the legwork to find those off market deals. But I think that, you know, I think that that’s where a lot of a lot of profits are made. And I look at some of the off markets that I bought in London, and they were pretty much the best deals I bought. As far as equity position goes or profitability by far the best. Hmm.

Erwin Szeto [00:52:49] Mm hmm. And you mentioned the credit challenge a closing with private money now.

Andrew Hines [00:52:54] So I will use I will use a lot of private money, especially with, you know, doing rhinos. So I might close in private money as a mortgage and then renovate in cash based on money I’ve borrowed elsewhere. So that’s because there’s stuff with construction, lean act and hold backs and this and that. So it’s kind of tough to be renovating with a mortgage, you can do it, but there’s a lot redder tape. So yeah, I’ll do that. And then typically go back to the bank afterwards and pay out all the expense of money with cheaper money. And I’ve been able to do that a couple of times where I’ve done the perfect. Quote, unquote, where you are able to get in and pull all your money back out. So I essentially got two free properties. Over the course of one summer, I was able to pull up pretty well, pretty well, everything out. And the total value at the time of those two assets was right around one million fifty thousand for the two houses. So not too bad if you think about, you know, Summer’s work to acquire over a million dollars of real estate and have it have it be basically free, right? I mean, yeah, of course I owe the money, but the equity in it is free.

Erwin Szeto [00:53:56] So your down payment was funded elsewhere.

Andrew Hines [00:53:59] Yeah, yeah, exactly. Down payments funded by the bank. Well, sweat equity, I guess we’ll call it that. Fair.

Erwin Szeto [00:54:05] Fair. Are you able to share? So for example, I have listeners who have never done private lending before, especially for like a year buying something that needs work. Is there a range that you’re looking forward that you can share for folks that you think people should target for what they should be paying for a private

Andrew Hines [00:54:21] like cost of financing? Yeah, yeah. I think that if you’re going to do it first off, you need to sit down because you know you’re going to start easy. Yeah, because if it’s expensive, very expensive. I mean, I’ve paid up to 17 percent. Yeah, I paid a lot. I paid, you know, 10, you know, anywhere 10 to 16 percent. You’re probably in a realistic ballpark. It depends on your position, like if you have a first mortgage with the bank and then you’re asking for construction renovation money in second position to go behind the bank’s mortgage, then you’re going to you’re going to pay a higher rate. But a lot of brokers can do an open mortgage, which means if you can renovate really quickly is sure you might be paying six or even say it’s say it’s 12 percent, you know that you can get that right. Mm hmm. So say it’s 12 percent, but if you can do it inside of six months, then you’re really only paid six percent. So there are some advantages there. You do have to keep in mind you’re going to pay a broker fee and those are usually just a flat percentage. It could be one to two percent. You’ll pay a lender fee that could be anywhere from a half percent to two percent and you’re going to pay two lawyers. So that’s the other big expense, because when you’re doing private lending, you have to pay for the lender’s lawyer as well as your own lawyer. And so the fees are expensive. So what I encourage people to do is look at your overall profitability factor in all the costs of financing. If you’re going to do a burger and add those to the costs, you know, capitalize it for lack of a better way of saying it added into your cost. And see, can I still refinance and cover all those costs? And if you can, then great now you’ve got a really good burger deal. Or if you sell it and you can flip it, make a profit, then then everyone wins. Your lender wins you when you make money. So that’s really how you have to look at it, right?

Erwin Szeto [00:56:04] We love that. I when

Andrew Hines [00:56:07] I when you when

Erwin Szeto [00:56:09] is there a private lender that you recommend to someone who specializes?

Andrew Hines [00:56:13] Well, you know, my mother in law’s in the business side gets I’d get in trouble if I didn’t at least mention her. So pro funds, they’d help me out. I borrowed. Of course, I still have my license with the brokerage, although I’m not actively in that business, but certainly somebody there would be able to help.

Erwin Szeto [00:56:30] Okay, very good. What’s the website provides dossier? Excellent. Very cool.

Andrew Hines [00:56:37] And when you’ve got your own people too, I know Erwin. But you know the people in this space in this area, definitely. You know, you want to work with somebody who works with investors. That’s critical.

Erwin Szeto [00:56:46] Oh, absolutely. Yeah. So she knows her stuff. If they’re willing to finance your stuff, hopefully they know what they’re doing.

Andrew Hines [00:56:53] Well, there was a lot of moving parts, right? You know you need. Yeah, you need people who really understand that side of the biz, right?

Erwin Szeto [00:56:59] And for those who don’t want to pay a broker fee, then you got to go find the money and they’re trying to find money himself. And sure, you’re still paying broker fees.

Andrew Hines [00:57:07] I pay less so though; you know what I mean. Now, the more I’m in this, the more people I’ve just made connections with. I know people who will lend, right? So the less people you know, more you’re going to spend. Right? But you know, if you’re really well connected, one day you’ll have tons of lenders ready to lend you money. Right, right, right.

Erwin Szeto [00:57:25] I hope listeners are paying attention because you’ve dropped a lot of great nuggets for how to properly execute a burger or you know how to do the work yourself, including managing it.

Andrew Hines [00:57:37] So sorry, beginner, I’m very good at swinging the hammer, but I can. I can. I can manage

Erwin Szeto [00:57:42] it. I can manage it. Yeah, you’ve got a successful track record of, you know, you’ve made your mother in law happy, so you must be pretty good at it. So sorry, beginners, you probably don’t have that yet in your tool belt, but you can deliver a renovation on time on budget engineers, people that with private money. So that’s something that for people who want to become a professional investor, that’s something you’ve got to have to do and actually bring that up because this is one of my favorite books now on Real Estate in general. The Get a

Andrew Hines [00:58:12] quick turn Real Estate millionaire. Yeah, this one. I have not known this.

Erwin Szeto [00:58:18] This catalog, this guy’s O.G. This book is copyright. 2004. OK. So, no, it’s not easy to find. So anyone who’s only listening, not watching how to be a quick turn Real Estate millionaire by Robert them. So I got this book for free and it is. It is gold. And you know, you should probably get one of these for Carmen as well because he talks about, I don’t care what you pay for private money. Get private money.

Andrew Hines [00:58:46] Well, you know, she’s the first person to say that, right? Like, she taught me that mindset, right? I learned very on that. You know, I was that was the one selling people on. You know, this is why this makes sense. It just it made so much more sense for me once I got out there and I’m like, Wait a minute, you know, I’ll sell this property. I’ll still have made, you know, almost 50 grand and I’ll have paid, what, thirty thousand dollars in financing illegals and all that stuff. Hey, everybody wins. What’s the problem? So. Yeah. But if you focus on REIN. Oh man. Yeah, that’s why I say sit down before getting into the conversation right now.

Erwin Szeto [00:59:19] Give a personal example. My last property had a leaky basement had not been tube. It was ugly. It smell bad. The lender wanted to touch it. And for the amateur investor, I’m not touching that because I had to go to a lender. I had to do that to put down 35 percent on what I paid for it, not what was worth. Oh yeah, and yes, I pay through the nose for four fees and interest, but the deal was good enough that it would make sense.

Andrew Hines [00:59:46] So, oh yeah, you could walk into a house that’s got no kitchen, no bathroom. All banks are out, helping you out at that at that point. So most people just walk away from the deal. They say, Oh, I can’t do that. So if you’re an investor that understands private money now, all of a sudden you can find a deal listed on the market that’s been tied up four times conditionally. Every buyer backed out and you go to that seller and they’ve got gray hairs from this deal, and they just want somebody to take it from them and you can make them an offer that’s way under what they’re asking because you’re solving the problem. They’re stressed. They just don’t want to deal with it anymore. And you can, you know, they when you when and you can take that property for way less and that that covers your fees to pay the private money. And you know, you can do a profitable deal.

Erwin Szeto [01:00:28] Mm hmm. Exactly. But people get hung up on is they want the advertised rate from rescued way back.

Andrew Hines [01:00:34] Yeah. Banks going to have it. I mean, anytime, anytime I’m doing renovations, I don’t even I don’t even look at blenders. I just I just go straight to private money, private lenders I’m connected with or, you know, mortgage lenders. I’ve dealt with that or, you know, everything’s on the private side. And, you know, certainly I would I would happily have Profits do my financing again, too. Absolutely.

Erwin Szeto [01:00:54] I pressure to make sure I can do it better. It wasn’t. I had decent terms. I mean, six percent of my home, I might be going to be mortgage.

Andrew Hines [01:01:01] So I just like how easy it is to have just the easy, you know, if you have a reputation, especially so build, you know, build your reputation. That’s one thing. As an investor, you know, have an Insta, do something, you know, document your successes so that when you’re applying for a loan like Instagram, profile is actually credibility. If you have successful and you know, people follow you and see your REIN hours and see the quality product, you may post your finished photos. You know, if a lender can see that you know what you’re doing in the rental space or you know how to how to create a profitable rental property, then you’ll have a very good shot of getting financing quite easily. You’ll find a lot more people interested in your in your deals. Very cool.

Erwin Szeto [01:01:40] Very cool. Andrew, where we over time because I was late, I apologize for folks who want to follow up with you. How did they find you? And you mentioned Instagram in your podcast working? They find it.

Andrew Hines [01:01:50] So at the Andrew Hines and my last name is spelled. And yes, that’s me on Instagram or Facebook. And if you want to search the podcast, it’s wherever you listen to or watch podcasts and you can just search my name. Andrew Hines, the Andrew Hines Real Estate Investing Podcast So I make it easy.

Erwin Szeto [01:02:08] Do you get much traffic off like Spotify or SoundCloud?

Andrew Hines [01:02:12] Yeah. So it’s I’ve learned this year now we can nerd out on podcasts, but those sound so Spotify you can’t track unless you log in, so you can’t track listens from Spotify without logging in. You can’t track listings from Google Play without logging in to the actual platforms. So if you’re just going based on like, I’m on SoundCloud, that’s where I host so I can see my listeners on SoundCloud. But whatever I see there is probably understated by about 40 50 percent. So you just kind of got to know that.

Erwin Szeto [01:02:43] And then you get to know, Are you liking to Spotify?

Andrew Hines [01:02:47] Yeah, I don’t. I don’t know how to find this out. Is this Spotify stats? But they just download your file one time when you launch a new podcast. They download the file once and then you never get to know how many times people listen.

Erwin Szeto [01:03:00] That’s hilarious because I always thought because my stats must be completely understated, because the vast majority of my stats are Apple related.

Andrew Hines [01:03:09] Yeah. So you can log into the apple and see some advanced stats there. But I mean, I mostly just look at downloads, and it’s hard to say right. People ask how many people listen to per week. I’m like, I don’t really know exactly, but here’s the ballpark.

Erwin Szeto [01:03:24] I just go like, here’s my Apple stuff, here’s my operating.

Andrew Hines [01:03:29] You’ve been around for a while, so you must be you must be getting quite a few.

Erwin Szeto [01:03:32] We doing well pretty well. I got lucky, I got lucky. And when I when I went and checked one day number 88, business in the world. So I was like, Oh, I’m surprising.

Andrew Hines [01:03:41] Yeah, that’s pretty cool. Yeah, if you can, if you can make it onto that chart that you’re doing something right?

Erwin Szeto [01:03:46] Hopefully, hopefully. And then I had to use a little bit of massive bump now. Real Estate. Andrew, thanks so much for doing this. Obviously, December 5th, I’ll send you a link so you can register for it. It has all the details there for December 5th. I would be somewhere. I just feel free. Feel free to bring karma around with you.

Andrew Hines [01:04:06] Yeah, sounds good. Thanks for having me. Erwin and sorry if I if I gave the long winded responses here.

Erwin Szeto [01:04:10] No, no worries, you know? See our guests. I’m sorry. My listeners actually prefer the long winded podcast this format because they find I’ve had people tell me the good stuff happens after 30 minutes. So that means you have to go beyond 30 minutes for a podcast, then

Andrew Hines [01:04:26] got to dig in sometimes, right? Absolutely.

Erwin Szeto [01:04:29] And why am I seeing you Saturday as Doc Hacker Stock Hacker?

Andrew Hines [01:04:33] I know I have a I have a Friends Bachelor party this weekend, so unfortunately not. But I hope you have a hope you have a banger. Awesome.

Erwin Szeto [01:04:41] Sounds good. All right. Thank you, Andrew.

Andrew Hines [01:04:43] Thanks, Erwin.

Erwin Szeto [01:04:50] You knew the Real Estate investing aren’t, I’m sure, where to invest next. Would you like to know what the best areas are to invest in the GTA for the best returns on investment? Then you found the right place as we’re here to help both new investors, two seasoned professionals. We have helped hundreds of everyday men and women buy their first investment property to their 10th property. It’s easier than you think. Hi, my name is Erwin and you may know me as the host of this podcast, and I’m also the owner of the Iwent real estate team. The four time George of the Year, two investors as per the Real Estate Investment Network and a senior Real Estate wealth manager. They’ve reported this twice each. My team of investor coaches, our licensed real estate professionals who help everyday hardworking men and women from the GTA grow their real estate portfolio in the most efficient way possible. You are welcome to use any professional or contract if you want, but you’re welcome to our own personal Rolodex of professionals, the same people I use personally to build my wealth and become a successful real estate investor. And though we don’t share this list to non-clients, if you’re too busy, understand you have better things to do. Have dinner with the family. Watch the kids play sports. What we do different is we preview properties in every half to prescreen only the ones that are ideal investment properties. Many of our clients, including ones featured on this podcast, will even make conditional offers a home inspection so they can both beat the competition and have a chance to view the property before making a final decision during their professional home inspection. After the purchase, we can refer you to our favorite property manager, who is a former police officer with 20 years’ experience with the local police department. He also happens to be well over six feet tall and 220 pounds, with a keen eye for finding you a great word for tenants. So tenants never call you and you can go on enjoying life knowing your best property is taken care of. As an added bonus as being our client, the only takes referrals from us and note that this property manager is the most well-reviewed property manager I’ve ever seen in my city. You have trouble getting financing your luck. My personal mortgage broker is the best I’ve ever seen in my investing career. Again, you’re welcome to work with anyone you want. This just happens to be the one that I use personally. You may just be talking to the wrong people about a mortgage, whereas my guy has more relationships with various banks and lenders, but others just don’t have, and they’re often less expensive for any of the above. If you’re interested, go to W WW Dot Truth about Real Estate investing dossier slash contact and invest w dot truth about real estate investing, dossier slash contact, the form and one of the coaches I personally trained with. Get back to you now. If you don’t have a down payment or you don’t earn enough income, well, on the first few properties I bought, I actually bought with my in-laws, my partner of a family, the now my excellent boss. But if you don’t have family to partner with, then I suggest you learn how to hack stocks like my past guests of this podcast. Omar Khan and Matthew Todman. That’s two different episodes if you want to go back and have a listen to them. They both earn split level six figure incomes within only 30 minutes a day by getting paid to own blue chip stocks at prices they want. Anyways, it’s almost money for nothing. As per Rob Break, Sakhi says he also says that knowing how to sell stock options is a must for any professional investor. Professional investors include those who know stocks and Real Estate. If this interest, you go to WDW while Packer gutsiest last stock again NSW DPW got while Packer does the last stock. You know.

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