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Podcast Transcription

Announcer [00:02:23] If you are looking for the skills and tools to succeed in real estate investing, you’ve come to the right place. This show is about breaking through barriers, breaking through limiting beliefs and breaking through to the life that you want to live through the power of real estate investing. This is the Breakthrough Real Estate Investing podcast, and now here are your hosts Rob Break and Sandy MacKay.

Rob Break [00:02:54] Welcome back, everybody. Thanks for joining us again for another episode here of the Breakthrough Real Estate Investing podcast. I’m excited to get to it again, and as always, Sandy is here with me, Hey Sandy.

Sandy Mackay [00:03:05] Hey Rob. How are you excited for this one? I’m a great, you know, sunshine and we’re feeling like summertime is coming and we got, you know, some exciting stuff. Real estate markets great and nothing to complain about.

Rob Break [00:03:21] I don’t want to be a downer here because the Sun is out, and that’s very, very nice. It doesn’t usually happen, to be honest. We get a lot of great apes here, but what I tend to notice is as the day progresses, the clouds roll. It seems to be that way. It’s been that way. You’re right. Yeah, but I’m excited to get outside after we’re done here and enjoy some of that too. Hey, everybody knows this, but I’m just going to say it again because I got to, you know, go over to our web site Breakthrough RBI podcast and download all the episodes that we’ve put out over the past years. Listen to them right back to the first one. And as well, you can contact and get in touch with and communicate with all of the guests that we’ve had over the years. So it’s, you know, it’s a great way to stay in touch and they can also get our free gift.

Sandy Mackay [00:04:12] Yeah, the ultimate strategy for building wealth through real estate. And when you download, that’s of course, as you know, you’ll get on our email list, so you never miss a show. Never missed a webinar or a property or anything else. We got going on. And so go pick that up and never miss out

Rob Break [00:04:29] and as well. Go over to iTunes, leave us a rating review. It helps out a lot, guys. You know, that helps us get out there and into the ears of people that are eager to get this information that we have to share with everybody. I know that if you have a problem with whatever service you’re using to listen to the podcast, let me know because there’s been a couple of people saying that their channel is not working properly. I think we’ve got it all fixed now, but if not, just let me now reach out to me on Instagram or. Or email me, whatever, and we’ll try and get it fixed, but as far as I know, I think everything is up and running again the way it’s supposed to be.

Sandy Mackay [00:05:08] I think so too, and you can always join us live on Facebook or YouTube while we’re airing the show, as we’re doing right now and ask us questions live. We’d love to hear some comments and feedback through the show. Ask our guests. You can jump in, right? Well, we have them here and they’re there ready to go, and we would encourage you to do that. So you can, you know, just avoid any technical mishaps that might have happened and get a chance to communicate life.

Rob Break [00:05:35] Yeah, that’s every Wednesday or every other Wednesday. 10:30 a.m. OK, I think we’ve done all the housekeeping now. Sandy, you got anything else to share.

Sandy Mackay [00:05:44] Forget going and nothing much, really today, I think, you know, we’ve got a great, exciting guest here standing by with Dan Desveaux, and I think we should get to him. What do you say?

Rob Break [00:05:53] Yeah, absolutely. Let’s do it. Welcome, Dan.

Dan Desveaux [00:05:56] Welcome. Hey, thanks for having me, guys. Yeah, it’s really exciting. I’m looking by saying, first of all, sorry to interrupt you there. I got to jump in and say, how come Sandy has such great looking hair? Does he get some kind of connection on a barber in-house or something? Or your wife cut your hair for you? Or what’s the story with that?

Sandy Mackay [00:06:16] I know because it’s tough to find a good haircut in a normal time, let alone when there’s nobody cutting hair. But I do. My hair is

Dan Desveaux [00:06:23] seriously going crazy here. I just look at myself on here. It looks, it looks crazy. But do you have some kind of black-market connection on?

Sandy Mackay [00:06:32] I do actually have a hairdresser. I have some black markets that I can’t really reveal anything. That’s the that’s what a black market it kind of is, right? It can’t really talk about it, but I do have some connections. If you’re in the Hamilton area, I could maybe set you up with something. Yeah, and I

Dan Desveaux [00:06:45] might actually make the drive. I got to come on the show. Rob, I know that you’re doing your own hair. That’s the that’s what the razor.

Rob Break [00:06:53] But I was just about to ask why you didn’t, why you weren’t inquiring about mine.

Dan Desveaux [00:06:57] It looks great. You do a good job of that, too. And that’s not even that’s what the razor on there. Well, I need a haircut bad.

Dan Desveaux [00:07:07] But anyway, I’ll let you. I’ll let you introduce me there and we’ll get this thing going.

Sandy Mackay [00:07:12] Yeah, I love to read a quick bio here, and you can share more about yourself, of course, afterwards, but then as their lives and invest in starting Ontario. And so I believe you’re our first guest. Actually, no, probably second guessed from Sarnia, Ontario, for a very

Sandy Mackay [00:07:25] long. I’m before, yeah, probably a year or two years ago now at this point, but then started investing in 2003. I flipped over 20 houses in the last two years, over 50 in his career. He’s got a current portfolio of buy and hold real estate, I assume, and the six-million-dollar range, and is also an active part of the Big Brother organization for the last 13 years. So getting back to the community and doing some great things there in your local area. So that’s just a quick couple of tidbits there, but so welcome. We’re happy to have you here and can’t wait to learn more about this stuff. Thanks. It’s awesome. Thanks for having me, guys.

Rob Break [00:07:59] Yeah, I’m really excited to talk about this because, you know, one of the things that I’m always interested in is finding deals that work for flips. I mean, I feel like it’s next to impossible in the market that we’re in, so we’re going to dove into that and looking forward to it. So. Thanks for being here again. Not again, but again. Thanks for being here. Yes.

Dan Desveaux [00:08:21] Yes. OK, so

Rob Break [00:08:23] let’s get to let’s get right into it. I mean, we always start off this way. Let’s talk about how you got started in real estate investing.

Dan Desveaux [00:08:29] Well, that’s a funny story. And it goes it goes way back when I went to University of Windsor for art, I was thought about being an art teacher, got out of there and realized that, no, this is this is definitely not for me and I. I thought, well, I got to do something. So I thought, well, I done construction over the summer. Summer is like several summers, so I was pretty good at construction. I thought, well, I’ll do that in the meantime. So I moved to Toronto, actually from Sarnia. I moved to Georgetown back when it was. This is about whatever, 20 years ago. So it was just a farming community back then basically, and I was doing new construction. I did that for a few years, and it was going pretty well. And then I herniated disc in my back at work, and because I was self-employed, I couldn’t get unemployment and I had to get back surgery. And then so I basically couldn’t get unemployment. So I was in Toronto for a while. I thought I could just go back to work, and I ran out of money, so I had to move back into my father’s basement of his rental house at 28 years old. So it was embarrassing. It was horrible. I had no money down to this Dungey old moldy basement. It was. It was not. A great scenario is quite depressing. And one night, I don’t know about two o’clock in the. I probably came home for the bar or something I don’t even remember, but I remember it was early in the morning and probably having a little snack or something, and I was watching TV and there was an infomercial on TV and there was this little guy named Tom Vu. I don’t know if you guys know who Tom Boo is, but he did those crazy 80s. What are they called the infomercials where he be driving around in a lake and is what they had back then sitting on a Mercedes Rolls-Royce? He had a Rolls-Royce. It was. It was hilarious. RB driving his boat with a bunch of girls with bikinis on there. Anyway, I thought, oh my God, like, this is literally it. That was that was my moment for when I said, this is absolutely 100 percent what I want to do.

Dan Desveaux [00:10:50] So of course, his seminar was in Florida was six us to go to go to this seminar. I didn’t have a penny, so I thought, oh my God, what are we going to do? So I did some research at the time and there were some other guys in the in the game there too. I mean, obviously there was Robert Kiyosaki. There was Karl in sheets. There was Robert Allen. All these gurus were doing the same stuff at the same time. And I, I. So I ordered some stuff from this guy named Carl and cheats. And there’s great big fat binder comes to my house. I don’t know what I paid for. It was a thousand bucks us or something. And there’s a great big binder comes to my house and I’m looking and reading it. All this stuff and all of you know, I don’t know anything about real estate and it’s all of us based stuff. But you know, the strategies are basically the same, you know, no money down, you know, seller financing. Those kinds of things were in there. And at the beginning of the chapter, it says it says go around to neighborhoods that you would potentially want to invest in and look on people’s front yards and see if you can see signs that say for sale, house for sale will finance or owner financing. You know, and I thought, this is complete horseshit. I’ve never I’ve never seen any of these signs like there’s no way that this works. But literally the first week I go out looking at houses, there’s a sign on a front yard of a house, little wartime house and the sign on there, said owner. It’s said house for sale will finance. I still have a picture of that. And I thought, oh my God, this is this can’t be happening. So I got ahold of the guy. And sure enough, this I mean, there’s a big, longer story to that whole, that whole thing. He was a bit of a shyster, this guy. He had about three hundred houses that basically what he would do is buy a twenty-thousand-dollar house and he would, you know, put his unsuspecting young whippersnapper like me in there. I would fix up the house and they just kick you out in a few years, and then he would just continue to do that. But anyway, the story ends good for me here that I ended up buying this house. It was twenty-five hundred dollars down and twenty-five hundred dollars down, and I think it was nine and a half percent that I was paying. Actually, there was two. Part is actually the one part or one to 12 percent. The other guy was, I feel bad for me, but he I talked him down a nine and a half percent. I think they wanted five thousand down too. And I said, no, guys, I don’t do that kind of money, you know, which is funny now when you think about it now, but so 2500 bucks and put down, I fixed up that house. It was amazing. In two years it was brand new. I built a garage in the back. It was spectacular. But the end of that story is so in two years this I have to go get a mortgage. And of course, this guy is not telling me this right. He’s waiting, he’s waiting for this two years to be able to kick me out and find someone else. So I go, try to find a mortgage and I can’t get a mortgage anyway because I don’t know anything about this stuff. Of course nobody’s telling me. And I had a student loan at the time from finishing university, so I did. I couldn’t get. I couldn’t get a mortgage and I got to write down like I literally went everywhere at the time. I didn’t know you could get a mortgage broker that, you know, because if you go to every bank, you’re also going to wreck your credit score. That’s another little tidbit in there. But so I went to every bank, and they all said no, and I get down to the last bank. RBC and I fill out the forms, so they get to the section where it says, do you have any debt? And I thought, I think I’ll just leave this blank. And I left it blank and filled out the rest. And of course, this is whatever. Twenty years ago they approved my mortgage and, you know, a few months later, they called me, and they said, hey, you know, you have you had a student loan here? And I said, Yeah, and they said, when you put it on your application, and I said, I didn’t even see that part anyway. So that’s sort of how I got into real estate. I mean, obviously, I once I had once you have your first house, that’s the hardest part. And I got that house, got a mortgage and then soon after. Well, soon after I actually sold that house and put the whole thirty thousand down that I had, I got thirty thousand from that and ended up buying a little plaza. And that’s sort of how my investing career began. We can talk about the plaza if you like, but you absolutely want to.

Rob Break [00:15:22] What was the purchase price of the house?

Dan Desveaux [00:15:24] So the purchase price of the house was 57 five. This is inside 11 saying this is insane. Yeah, yeah. I mean, there was I mean, back then, 20 years ago, there was houses under 100 thousand were everywhere. Yeah. You know, even now, there’s a few kicking around. But now the market, I mean, the market, we all know it’s going completely bonkers. It’s gone bonkers here in Sardinia. But you know, it’s funny in Toronto or in the Golden Horseshoe Ontario, wherever it’s, you know, it’s going up. It’s been great. It’s gone five 10 percent a year for the last 10, 15 years, then Sarnia. It stayed at literally two percent increase for 20 years. And then literally in the last three years, it’s gone up 120 percent. Yeah. Which is completely crazy. But anyway, so yeah, I ended up buying a little plaza. I don’t know if you want to talk about my first class I bought, but now we want. We don’t want to talk about that. Yeah, we can.

Rob Break [00:16:21] Yeah, yeah, absolutely. Let’s hear about this, of course.

Dan Desveaux [00:16:26] OK, so OK. So I so you get a mortgage.

Rob Break [00:16:30] What? What made you want to get into it like? Was it just that the opportunity arose at the right time? Was that or how did you find the first house?

Dan Desveaux [00:16:40] No, no. The part of the Plaza. Oh, the plaza. So it was actually funny story there. So I actually I had a little renovation business at the time, and I was trying to find a place to have some storage. And this, I mean, this was a bad part of town full of, you know, whatever all the things that are bad part of town has. But it was in central city. So I see I see the potential there. And I guess you just wanted a warehouse. And I for two years, I talked to this guy trying to sell me this plaza. It had five buildings, 17 apartments, commercial spaces, warehouse everything. And I think they were asking about five hundred thousand at the time. And I told the guy, three hundred grand is what I’ll pay. I’ll give you 30000 down because I knew if I sold my house, I’d have thirty thousand, so I told him, I’ll sell my house thirty thousand, I’ll give you the whole thirty thousand down. You hold the mortgage, and we’ll do a deal. It took two years of hassling this guy. He couldn’t sell it. He tried. He had it on the MLS. He took it off the MLS. He just he couldn’t sell it. Finally, two years later, he says, he said he’ll do it. Of course, I have no idea what I’m doing, but I sold my house. I doubled down. I mean, I just tripled down. I literally sold my house, took the whole thirty thousand, gave it to him, moved into one of the apartments because I had I had nowhere to go now. And I thought, well, that made sense. I’ll live in the I live in the plaza. That makes sense because I’ll be able to control things a little better and be easier to work there and ended up buying the plasma. The funny story about this is so I’m I have no idea what the hell I’m doing. I met the lawyer and I’m signing the papers I’m going through. You know, all the addresses there, I’m signing all the papers and it has, you know, because it’s on a corner street, there’s several addresses and I get to the bottom of the page, and it says 220 to Dundas Street. And I said to the lawyer said, what is 222 Dundas Street? And they said, Well, that’s the Five Flags. And I said the five plex for what? And he says the five plex. That’s part of this deal. I go, there’s a five plex part of this deal. Where is this? So it was a street over. And the seller had no idea when we negotiated this deal, he said, What? What are we talking about here? And I said all the properties. Well, I meant all the properties on the corner. He thought I meant all of the properties. So which was all he had, which was an extra property down the street. And that was part of the deal that I had no idea was even in the deal. So that was a great ending. To that, I got a five plex for free. You know that that that plaza was completely, you know, I can’t even tell you the learning curve that I went on from that plaza, but it was the greatest thing it was about, you know, it was literally I still actually own that plaza, this right my offices. But it was a five-year hardcore learning curve of everything about real estate. And I’m, you know, I’m forever grateful that you know that that that happened to me, actually, because that’s what started me on the path to freedom. And that’s but boy, you know, I mean, 17 apartments, pretty much every apartment. A claw foot tub, cast iron, claw foot tub. On second story full of drug addicts and crazy people and fights in the parking lot and late-night parties and just for years, it was a battle just turning that into something. But, you know, at the end of about three years, they’re having neighbors coming out. We’re right across the street from a skate park, which is actually the first kids skate park in Canada, and we’re right across the street from that. And the kids wouldn’t go in the park because they were too afraid because there’s so many drugs and craziness going on at the time. But after five years, the entire neighborhood changed because of changing that plaza. So, so that was that’s been a great feather in the cap over the years that converting that plaza.

Dan Desveaux [00:20:48] We could talk about financing if, yeah, if you want that, the financing was crazy there because I ended up. This guy was holding the mortgage and after three years of him holding the mortgage, he was actually holding it at five percent. But I was nervous that I wasn’t again. It was going to be able to get financing when this thing came due because I had spent so much time and money on it. So I was so focused on getting financing. I ended up going to a none of the banks would touch it, but I went to because I was self-employed too at the time. So I ended up going to a I think it was it was AIG or one of those insurance companies that did mortgages at the time, and they gave me an eight percent mortgage. I had a five percent mortgage. I traded that in for an eight percent mortgage, only for the fact that they gave me a couple hundred thousand extra. And that made a huge difference because I didn’t know back then about borrowing private money to fix things up and do the Burr strategy right. I didn’t know anything about that at the time. This was literally my first property. And yeah, so I ended up getting my, you know, getting this eight percent mortgage. I had a couple of hundred thousand a completely. I really made that money go a long way. And then after another three years, I took that to RBC. That’s how I started my relationship. And RBC is doing that commercialize anyway. I got a new first mortgage, you know, and I paid that one off. I was I went from eight percent to five percent, and it was spectacular. You know, I got two or three hundred probably pulled out.

Rob Break [00:22:24] Yeah, probably pulled out more money than to.

Dan Desveaux [00:22:27] Yeah, I think I had three hundred thousand dollars out of that deal and made my payments stayed the same. So then that’s how I that’s how I kind of went on a tear their buying. That’s how I sort of I thought I was the guy who invented the strategy, by the way. You know, that was before Burr came along, I thought, oh my God, I can fix up a property and go back to the bank, get my money back and do it again. You know, there’s this light bulb went off and I thought, you know, this is it. This is, you know, I knew real estate. This is this is amazing. So I bought a boat. I bought about a dozen properties in the next few years, just duplex after duplex after triplex, five Plex, whatever this was back in China. Fifteen years ago, it was shooting fish in a barrel. But you know, I wish I knew what I know now. I would add I would have bought 40 houses. Yeah, you know, but I didn’t. I didn’t understand the at the time the, you know, I knew how the strategy worked, but I would have, you know, at the time, I would have bought a private money, right? And 10 times done the acts in Sarnia, but it worked out pretty well.

Sandy Mackay [00:23:40] Yeah, that’s awesome. The numbers are crazy to hear this and I just want whoever is listening or watching. If you haven’t heard of Tom Tommy Booth, you’ve got to go check him out because he’s got some absolutely pretty funny and awesome videos out there. From the I think, the nineties, probably, right, early nineties. Maybe they’re amazing.

Dan Desveaux [00:23:58] Yeah, he’s so funny. Yeah, I used to make fun of his voice and but it’s not politically correct to do that anymore. But you, I would absolutely say, go look at those videos if you want a good laugh. It’s yeah, it’s the ultimate in marketing, though.

Sandy Mackay [00:24:15] It’s works. Work the guy you got into the business. And you know, there’s not a lot in a way, but they’re also they are they were,

Rob Break [00:24:25] you know, when you were talking about when you were talking about the apartment, excuse me, when you’re talking about the apartment with the parties going on and the drugs and all that, I figured that was very much likened to the Bikini Girls on the boat for you.

Dan Desveaux [00:24:39] Yeah, yeah. Yeah, there were some half naked people there, too. There was there was people like, literally, I mean, urinating in the parking lot fights. It was like it was like I owned the bars, like I owned a dove bar. And that’s how crazy the first few years were. And at the time, I had just started. Eating my partner now that I that I’ve been with for 18 years, literally, I just started dating this girl as my real estate career started and, you know, trying to convince her, Thank God, I didn’t have to convince her. We didn’t live together. We just started dating. But I thank God I didn’t have to convince her that this was a great thing that I was doing, and it would end up it would end up great setting me up for the rest of my life. But boy, at the time she was just, oh my god, damn, this seems completely insane. Like, what are you doing? And I would just have to convince her that it’s, you know, don’t worry this. This will work out. I know it’ll work out. But it was tough. The first few years was crazy.

Sandy Mackay [00:25:41] How did you have that? How did you have that foresight to know what’s going to work out? How did you convince yourself of that? And lots of challenges, obviously tenants and crazy characters hanging around. You talked about the financing stuff a little bit, and that was some challenging times there. A little bit, although you guys got some good luck mixed in there, too. How do you keep all these cards? There’s so many times come up, right?

Dan Desveaux [00:26:01] Yeah, absolutely. I think starting from zero helps. That’s right, you’re starting from zero. And what is the alternative? The alternative is to go get a job and do what everybody else is doing. And I see that as a dead end. There’s absolutely a dead end. You will never be in my in my mind. At the time, I thought I will never be a millionaire, and this way it’s going to be impossible. So I thought, I literally have stocks. I can get into stocks, or I can get into real estate. Those are really only to buy a business or build a business to be wealthy in Canada. Anyway, that’s really the only three ways and building a great business. I didn’t think that was really going to happen stocks. So that wasn’t even an option. So pretty much real estate was, and it was my, you know, like Damon, John talks about the power of growth when you’re starting from zero. It’s easy to get the ambition every day to say, I’m going to do this, and you can kind of see how other people are doing that as well, right? You know that, you know, other people, it’s just a matter of once you get these systems in place, you can see that it does work. But boy fighting through it every day, wondering if I was going to go broke for the first three years was really, really hard and especially in the back of my mind thinking I could be spending two or three years working on fixing up this building and then still lose it. But again, you wouldn’t start at zero. You know, you keep on thinking in the back of your mind. The worst place I’m going to be is back to where I started, and I can do this again. So that’s, you know, that’s an easy way to keep a get going every day.

Rob Break [00:27:41] You know, not only that you weren’t just you weren’t just going to the property working on it and then going home somewhere else like to a to a cozy house. You like, dived right in and just lived on site.

Dan Desveaux [00:27:51] What was the apartment like living there? I tried to pick the best one, but it’s, you know, they were all bad. You know, obviously, I started on the first apartment I started on was my own. It was actually a decent, decent sized part. It was about a thousand square foot apartment on the main floor. And I spent the first, you know, the first three or four months just working on that apartment. So I definitely had the nicest apartment after three or four months. But again, I was living there and back then I didn’t have any systems in place, and I was literally going around walking around, grabbing tenants on his feet and saying, you owe me three hundred bucks, you know? And you know it, just it just craziness like that. Or just I like I said, I live there. You know, I had to learn all these systems. And back then, you know, people are so fortunate nowadays that we have such a community of likeminded people. There’s, you know, the internet. I mean, the internet wasn’t big back then, but now we have there’s so many resources for people to be successful in this business nowadays. Like there’s really no excuse because it’s so it’s a hundred times easier than when I started. Just, you know, it’s been eight years for me, but there’s so many resources for people to get started in this business. And you know, there is no other business-like real estate. I think in my mind, if you want to be wealthy, if you want to be free, so do you still see it?

Sandy Mackay [00:29:24] You still invest in mixed use, sort of a plasma multifamily style properties. And I do. What challenges are out there today, or has it changed much or what do you think the future of that is?

Dan Desveaux [00:29:36] Well, everything’s a little bit kind of weird right now with just because of what’s going on in my area. Like I said, literally everything’s doubled in the last the last year and a half. Everything is doubled. So it’s so it’s a little weird. Now, mind you, rents are the same when you look at commercial stuff out there. I really like I really like mixed use. I become somewhat of an expert in my area for making. I like mixed use because to me, you get the best of both worlds. I like the residential aspect of it is guaranteed money because you’re always going to have tenants in there. And the commercial aspect of it, I try to buy properties with strategically, ideally with land or somewhere that I can develop a property like try to get the larger, the largest property I can for what I can afford. I try to find some either some free land in there somewhere or under-developed levels like, for example, if you buy a three-storey building or something. And right now, there’s nothing in the third story and you’re buying it based on the space that’s occupied or the rent that it’s that you have to figure out something that OK down the road. I can change this property to X. Like, for example, I bought another crazy story. I bought a 10-acre parcel about seven years ago with a water park on it, which was completely crazy. But it seemed it seemed like a no brainer to me. As long as the cash flowed, I it had to make sense. My realtor brought it to me. Nobody wanted this deal. And it was a game as a mixed-use property. I like the fact that it had apartments in it because it was a great buffer. I knew that even if every tenant left commercial tenant, I’d still have some. I still have money coming in to pay the rent. And what I liked about it was even if the water park I figured out the R y without the water park and it’s still cash flowed and I thought, OK, well, if this thing goes under, I’m still going to be OK. And the water park was sitting on five acres, and this is prime, you know, prime real estate in in Sarnia, where we’re kind of in a corner to the north. We got the lake, to the west, we’ve got the river, the US and to the south. We have refineries, Indian reservations and stuff. You can’t go out there. So the really the only direction you go is east. And this 10-acre piece is literally right in right in the way of that. And I thought, well, and you know, five or 10, 20 years, whatever it takes, this is going to be a prime piece of real estate. So as long as it cash flows, which it does, then then there’s great potential there. And actually right now trying to say try and I am studying for my taking my tree on license to be a builder, and I’m thinking about developing the five-acre parcel in the back of my property. I’m surrounded by a retirement community that’s around me right now. And ironically, I’m on commercial and they won’t let me develop at the moment. They won’t let me develop this. This thing I’m trying to develop, but I’m surrounded by a trailer park. I think down the road I’ll figure out a way to because I know there’s a there’s a project down the road that they’ve just okayed and it’s residential. So I think down the road, they’ll let me do it. And so, yeah, and so it’s just a great, a great property. But boy, that was that was a good learning curve to buying a 10-acre parcel with a water park on it. There was lots of fights with lots of stories, crazy stories. You know what? The I actually had to get this water park taken down and I got lucky, and I have a new tenant there, you know, ax throwing business. And he one of the deals that made him is he could use that back part, but he have to take the water park down himself. He’d have to pay for it. And he found some guys, he gave away the steel. But you know, you just put you just put an advertisement out there saying free anything and there’d be a lineup down the street. So that’s what he did, he said. Free steel, you got to come and take it down. And he made an agreement with the company to take down the steel, but also, they had to take out all the cement out of the, which was a great deal for me. I mean, I got all that removed for free, and now I have a five-acre piece of land there with drains drainage everywhere for free. So it was a great deal for me, and I think that project is going to is going to work out great.

Rob Break [00:34:22] So why is nobody else seeing the potential that you see in these places? Because your comment is always no one else wanted this?

Dan Desveaux [00:34:28] Yeah, right. Yeah, like, yeah, like I’m the guy who actually, when I talk to realtors, I say, send me the stuff nobody wants, you know? And then because they’re not all, they’re not all. Actually, not all home runs, obviously, but yeah, some of the stuff that nobody wants, and you have to be able to see who. Yeah, see what other people don’t see. Land is a no brainer. I mean, the other stuff is does take some work to figure out. Change of use in those kinds of things, but if you’re buying property for under even what the land is worth, it’s a home run all day long, like this particular property was 10 acres on the on the main drag. It was probably worth a million dollars just for the land. And I paid for 60 for it. I think they wanted six fifty and sat for a year and I said for sixty-four, sixty-four sixty. And then eventually they just said, Yeah, you can have it for four sixty. And you know, the probably the land today is worth two million, just the land without any buildings. So yeah, I’ll take that all day long. I mean, I’ve got some crappy plazas on there. Yeah, I agree 100 percent. They’re crappy plazas, but I’m not looking at the plazas as long as the cash flow right now. You know, eventually, you know, that’ll turn into something. I actually the owner of that plaza. So it was a 10-acre parcel. And then he sold off one acre on the front corner, right by the highway and then was attached to my property. He sold that years prior to before I bought it, but when I bought it, I has been eyeing that thing for years. And then finally, I convinced the seller the seller was going to go bankrupt, and I convinced him to sell it to me. So I actually bought that, that one acre parcel in the corner, which is, you know, I bought it for, I think, two hundred grand and it was worth a minimum five hundred grand. You know, you’re talking with prime real estate right on the main drag, a one-acre parcel with about a thousand feet of frontage. So yeah, so that worked out great. But I mean, you know, time, you have to certainly be patient in this business. Absolutely. You have to be very patient. A lot of these deals, I literally bug these people for years. I bought a nine plex. How many boats? Five years ago, I bought a nine plex for one hundred and fifty grand, a nine-unit townhouse complex for one hundred and fifty grand inside our true story. But I bought that guy for two years and I spent about I think I spent about three hundred grand. I’m trying to remember what exactly is spent on that, but I spent about three hundred grand. I knew I had about five fifty into it when I was done. And you know, it was worth a million dollars right then. So, so now it’s probably, you know, with the way things are going is probably worth a million and a half. That was about five years ago. That was a great that was a great project, but I had to bug the guy for two years. You know, and that’s I encourage you and your listeners if they’re getting into the game and you know, they have, they have to understand patience. They have to you have to have a list of, you know, literally, you know, a hundred places that you’re after and bug them all the time, bargaining and bargain and going to bug them until. And then just at one point there, if you’re the guy who’s calling all the time when they do decide to sell it, they’re going to call you first. Mm-Hmm. And you know, those are the those. Those are the deals that you want.

Rob Break [00:38:22] Man, I feel like we could talk about the challenges that you even just the first plaza that that you brought up. I feel like we could talk about that and feel like two hours just with the challenges and the progress of that place. But you mentioned earlier, Sandy mentioned in the bio that you flipped over 50 houses, so we got to talk about your flips too. So I mean, let’s talk about how you got into starting to do that.

Dan Desveaux [00:38:52] Well, the funny thing is both flips is that I actually got into that sort of by accident and I had I had a, you know, I had a construction background so that that definitely helped. But flipping, I would say flipping is 90 percent management and 10 percent everything else. Over the years, I’ve learned this the hard way because I thought, well, how hard can this be? I have a construction background. It’s really not about anything about the construction. It’s really managing people, managing your time, managing, managing, managing. And I actually got into flipping because back in the story I was telling you earlier about having a student loan, the student loan is really causing me grief. I just I couldn’t figure out how to pay this thing off. So I thought, maybe I’ll get into flipping. This is about 10, 12 years ago or about 15 years ago, and I thought, I’ll see if I can flip a house. I bought this old crappy house, I think, for about 40 grand, which is the crazy talking about 40 grand for a house nowadays, but for 40 grand, and it took me a few months to flip. This house and I made exactly seventeen thousand dollars, and that’s exactly what I owed on my student loan, and I just went, Wham! And then I went, OK, this works. Yes, I really like this, and I only flipped two or three houses a year for several years. And then I didn’t really take it seriously until about five years ago. And then I went all in with the I actually took a little bit of a break there for a few years and I just thought, OK, I’m sort of retired now and then realize that that that sucks. It’s pretty hard to build when you’re not actively going. I think so. I said, I’m going to I’m going to get back into flipping. And I went in all in on the flipping, and I actually had quite a bit of a learning curve on there. And it’s not as glamorous as it is, is definitely what TV shows and all that you’ll see on TV. You know, I can give your listeners lots of horror stories about flipping, but it can be very profitable. It’s been really good in the last few years. But my first two or three years, it was a real, a real struggle. I believed back then that the foolishly that the more work you did on the house would equal more money you would make. That was my thinking back then and realized now it’s the complete opposite. The less you have to do, the more money you’re going to make. So I would I was taking on these massive projects, you know, just lath and plaster, you know, messed up foundations, total gut jobs, redoing furnaces and all this crazy stuff into wiring and galvanized pipe and messed up. You know, I would take the worst of the worst project and thinking I was going to make the most money and it was horrible. And now, you know, now, five years later, I’m realizing that you can go in there and change the carpets and paint and make the same amount of money in one month as I used to make in eight 10 times the work.

Rob Break [00:42:09] Now does that have to do with appreciation in the current market that we’re in? Or is that just

Dan Desveaux [00:42:15] just, yeah, it does. But you know, one of the smartest things you’re ever going to learn is the one of the best things that you did. One of the best deals you ever do is the one you don’t do. Someone told me that many years ago, and it’s slowly finally sinking in because I used to take on everything, right when I say your money or not less. Yeah, when I used to tell realtors, bring me your worst. Well, whatever they brought me, I will just buy and thinking I can make something out of this terrible strategy, terrible strategy. You know, I used to tackle every project and even some of my larger buildings. I would say, Yeah, I can do this. Plus, I’m a hands-on guy and I love kind of getting into those things and being busy. But that’s not what makes your money strategizing is what makes your money. Analyzing properties, figuring it out from beginning to end. That’s what makes your money. Speed makes you money. That is, I would say the number one thing is speed makes your money working on a project for a year. Eight months. Very foolish. You want to get in. Get it done. Get out. Get your money. That’s not even counting. If the if the market changes we’ve been, you know, I bought about two years ago, I bought a portfolio of seven properties from an old Italian guy that died, and I’d been bugging this guy again for two years to sell me his portfolio. And then he died and ended up buying it from his wife in the state. And I don’t know what the hell I was thinking, but I bought seven properties all at once, and all seven of the properties were bad foundations. You know, now I’ve been to laugh and plaster roofs. It just it goes on and on and on. And that project, I worked close to two years on and didn’t make any money, not a dime. I might even have lost a little bit of money; I don’t even know. But those seven properties cost me two years of my life, and the market really saved me because if the market stayed flat, I would have lost money. But now I’ve never lost any of my investors’ money, but I’ve lost a little bit of my own from foolish projects that I’ve bought. But I mean, sometimes you don’t know. I mean, I’ll give you a perfect example. I bought a flip house a few years back, a little wartime house, little square house, box house, and it was seventeen thousand dollars. And I went in there and I looked, and I thought, well, this isn’t bad. I had a bit of a dip in the floor, and I thought, Well, OK, that’s not a big deal. I was smiling under my, you know, as I’m negotiating this, I’m thinking, wow, I’m going to get this house for this cheap. And I thought I could just cut a hole in the floor and just jack up the not the foundation, but the floor. Joyce make it level paint and whatever. And I’d sell this thing for one hundred grand, and I was going to make a killing. So buy this house. And then of course, I didn’t go underneath the house because you couldn’t get underneath the house at the time. And obviously I was going to cut a hole in the guy’s floor to jump underneath the house. So I just bought this house sort of in, you know, I know what I’m doing. So I bought this house, cut a hole in the floor very first day at Demo Day, jump underneath and I look my heart sank like literally sank the entire main floor that was holding up all the walls where everything was so punky you could take your finger and stick it through the floor. Joyce, I just that’s how I couldn’t believe that the House was still standing. And my heart literally sank. And so for the next, I think about eight months, we had to put the house on stilts because there was nothing to hold up the house where it had to put the house on stilts. Inside, we had about 20 jacks holding everything up and we had to remove all the walls, all the walls, all the floors. Everything literally built a new house. And needless to say, I think I broke even on that one. But eight months in my life, you know, I flipping houses. You know, if I was going to tell young, hungry real estate newbies what to get into, I would certainly say don’t do. Flipping as a strategy to start off with. I would highly recommend just get into get into, I would say, house hack or buy a duplex. I would say Duplex would be number one, living one half rent out the other. And then once you get two or three, maybe four or five houses under your belt, then maybe tackle flipping houses because then at least you have some kind of a foundation. If you blow your brains out on the first, on your first flip, you may never get out of debt. You literally may never get out of debt. It would be a lifetime sentence, and I think I think it’s way, way easier and safer just to, you know, buying a duplex you can get your mother to cosign. You could get somebody to cosign for you. The barrier of entry is very, very little. When you’re flipping a house, it’s very, very dangerous, especially at the beginning. You know, that’s my two cents. That’s my two cents on house.

Sandy Mackay [00:47:41] I think those are a great point. I think the speed is super important getting in and I can. I guess so many things popped in my mind around myself or other people I’ve worked with where they’re going in and wanting to do everything because it’s sexy, it’s fun, it’s on HGTV. It’s that’s what it’s what they think that that that’s a flipping houses must be. You need a beautify to make it look beautiful. And then there’s so many times I can look back on those projects and go, well, you should just sell it right away. The nothing you would have made; you would have made absolutely 10. You would’ve made the same. Or maybe you would have made it slightly less even. But you didn’t spend any time there. You were in and out in a couple of months versus a year. I just can’t imagine. I can’t. There’s so many stories that I could go through around that that it might not be as fun or sexy, but it makes you money.

Dan Desveaux [00:48:34] And well, that brings up wholesaling. You know, that leads right into wholesaling. Exactly. I mean, I’ve been actually doing that lately because, for example, in the same bad part of my town, that part of my town is south. And so I just say the south and the south in the south end here, if you like, let’s say the highest end house is going to get you maybe say three hundred thousand. I say, for example, I bought a house a month ago for one hundred and forty thousand in this area where, you know, the absolute top of the market is around three hundred. I thought about this for a little while and I thought, you know what, if I if I fix this house up, it’s going to cost me about 80 grand. I paid one hundred and forty. Yeah, after you add that up, plus there’s always something goes wrong at a little extra in there, 10 10 percent buffer at the end of the day after a pay, realtor fees and all this other stuff I’m probably going to make. Let’s say, you know, 60 grand, 60 70 grand, which is great. That’s great money. You know, take that all day long. And then I thought I could probably do nothing to this house, literally nothing. And because I mean, I was going to fix the roof and I thought, you know, I, I just got to get that out of my head. What could I get for this house as is not doing anything, and I made a few phone calls and 200 came, that was the number 200 to 220, so I sold it? Someone offered me two hundred grand for this house. I did absolutely nothing and made sixty grand. And the alternative? I almost completely renovated this house, which would have taken me six months. And I don’t know who know, who knows what I would have made. But sometimes it’s just better to look at the numbers right from day one. And you know, you don’t have to. You don’t have to do that. You don’t do anything. Sometimes you just have to fix the roof and just resell it anyway. You might at least in the wholesaling there.

Rob Break [00:50:33] That’s totally true, though, because I every single flip that I’ve done, I probably would have made the same amount of money if I’d done very, very little or nothing at all. You know, and it’s probably due to the market at the time, I would say a lot to do with that, but still, I mean, I think what you’re saying is very important for people to sink into their heads.

Dan Desveaux [00:50:56] I made a joke with my I have a fellow real estate flipper from London, and he’s kind of in my town doing deals there. I went to visit him yesterday and we were talking, and he said he had about another month’s worth of work left. And then I said, well, lucky for you, in the next month, the real estate will go up another 20 grand. So I said, take your time and sell it in the summer, and you probably make an extra 50. Everything is just it’s just stupid, stupid, stupid, stupid around here right now. But yeah, you know, wholesaling at the beginning, I thought, Wholesalers, what are these guys? Do you know? You know, really wholesaling has only been popular in the last year or two. And people are actually making legitimate businesses out of wholesaling. I can’t. The numbers really don’t work for me, for me. You know, like a lot of the wholesalers now are saying, you know, like, this is this is under market value. I don’t I don’t really see much difference between what the wholesalers are offering and what you’d get the house for in MLS. I think that wholesalers are taking a little too much. But listen, if I was a wholesaler, I want I want more money too. So.

Rob Break [00:52:02] Well, I do think the big thing right now, too is, well, I shouldn’t say this because if you’re if you’re on the wholesalers less, you’re probably competing with a bunch of other people as well. But I think that there’s a lot less competition. I mean, we’re in bidding wars of like the house down the street from we had forty-nine offers on it the other day. So if you can, if you can be in a, you can be in a bidding war with like five people, you probably got a little bit of a leg up. I mean, just to be able to get into something right now is pretty challenging, depending on where you are.

Dan Desveaux [00:52:34] Yeah, yeah, I don’t I honestly don’t know what everybody’s doing. I mean, you know, I thought about I was thinking about building. I mean, that’s another thing, right? I, you know, I love the house that I’m in. I’m very, very grateful, very blessed to be in a great house and I love where I’m at. But I’m thinking, what am I gonna do for the next house? You know, I might have to build something and then, you know what I mean that we can go down that rabbit hole of what the hell is going on and building with, you know, everything going crazy with building materials and stuff. But yeah, I don’t I don’t know. The market is the market is pretty crazy. You know, it’s funny. We had I had literally six years of nothing happened in my area and then everything happened in the last three years. We’ve been I’ve been watching from the sidelines here in my little town to Sarnia, watching what’s going on in the GTA for the last 10 years and every year. They say this can’t continue; this can’t continue. And well, it’s continued. Right. So I don’t know. I don’t know where this ends for us. Actually, everybody’s on pins and needles right now and saying, you know, my little news here is that we have I’m sure you’ve heard about it on the news, but we have. We’re a refinery town and the governor of Michigan wants to close down Line five, which is basically the main artery of oil that comes. So it comes into Sarnia, it starts here, and it goes right across Ontario. But that’s why we have all the refineries here. So everything starts here and we’re a refinery town, so we might as well be a logging town with one with one mill, and they’re threatening to close the mill. So it’s very scary what’s going on in our city right now because they, the government is kind of intervening. But the anyway, the Michigan, they’re trying to shut down this pipeline that’s coming through here. So. So if it does get shut down, it’s highly unlikely. But if it does get shut down, there’s going to be some crazy stuff, real estate wise going on here. I highly doubt that’s going to happen. But anyway, yeah, we don’t want it. We don’t want the mill closed down, that’s for sure.

Sandy Mackay [00:54:43] Did you ever feel compelled to go to new markets, different markets like, you know, we’re seeing your money being so stagnant for years, really? Yes. And then yes, you’ve obviously waited the right amount of time, at least because you’ve got that big surge here now. But do you still feel compelled to be filled or how do you resist that?

Dan Desveaux [00:54:58] I guess maybe as well. You know, it’s funny about that story is I actually I don’t say I did not time the market right. I sold the boat. I sold about six properties right before the boom and probably left about a million dollars out there that that I would have had. But you know what I mean. You can’t time the market for, you know, I wanted to, you know, I wanted to have a nice house and I spent some money, sold some properties, built a great house. I’m happy and there’s lots of what ifs and what could be. But you know, I still have some properties left. I’m happy with the choices I made, but yeah, it’s trying to. Trying to time the market is.

Rob Break [00:55:42] I love I love the term that I sometimes hear people say is I’m going to just wait and see what happens, I’m not going to buy right now, I’m going to wait and see what happens. I go, wait and see like that is so open-ended with what? With the economy, with corona virus. Like, what are you talking about? And when do you go, oh, OK, I’ve seen what happened now. I’m ready.

Dan Desveaux [00:56:02] Yeah, yeah. Yeah. You, see? Well, you know, it’s funny. There’s lots of times where I’ve seen a property that I know we were talking about making lemonade out of lemons. I’ve seen properties were real estate agents that brought me that I didn’t see anything in them. And then when you see another investor do something spectacular with that property and you go, oh man, you know, I did not see that, you know? You know, there’s been some there’s been some real doozies that I’ve passed on in the last five years that I did. I just didn’t see the vision and you see what other people can do with it. But it’s great, you know, it’s great. You take that, you take that, and you put it, you put it back there, right? You stick it in your head, and you go, OK, OK, well, now I know what can be done when something like this comes up again. Know and you put it and put it there and you put it on your list of, OK, yeah, I can do that. You can’t know everything about everything, right? You know, I’m trying to. I’m trying to learn as much as I can. I’m trying to. And especially I’ll tell you, it’s a dead end to trying to jump from strategy to strategy. I would, I would certainly say, get good at something, pick something, get good at that one thing before you move on to a next. Because if you’re going to be chasing shiny things, I mean, I’ve been guilty of it myself. Then you start chasing shiny things and you know; this guy is doing great and rent to own or that girl is doing great and flipping or whatever. If you just start jumping around thinking, OK. And it’s really hard with the internet now because everybody’s a rockstar, right? If you’re looking on social media, everybody’s a rock star and nobody makes mistakes. But if you talk to any of these people, oh yeah. Yeah, there’s plenty of them, plenty of mistakes to be had by everyone. And I’ve certainly made a lot in my career, and I’ll be making lots more. But you just have to keep on going and learn. Try not to make the same mistake too many times and keep moving forward.

Sandy Mackay [00:58:08] Is the same with location, right? I think Sarnia, it looks certain, sounds pretty. It’s a bit of a shiny object right now for us, probably. Yeah. Yeah, I mean, it’s a great, probably a great city to be investing in. There’s a there’s a cities all over the place that sound appealing, but, you know, staying in their lane and, you know, generally is a good route.

Rob Break [00:58:27] I’m going to wait and see what happens with your website here.

Dan Desveaux [00:58:31] Yeah, yeah. They just said on the news that song is the one of the most time and we’re top 10 affordable cities in Ontario now. I thought that was funny. Yeah. Nobody wants anything. If you look up Sarnia on the Google sign, yeah, they’ll say there’s a giant blob in the water, a green blob in the water, or there’s the air is so bad you can’t breathe. There’s, you know, there’s all kinds of bad stuff in there, but sorry, but actually starting to it’s a beautiful city. We’re right on the water here. We have great beaches and I like it here. I agree we get a little bit of smog, but you know, it’s a great city. I never did answer your question. Your question was why did I say in Sarnia? Mostly just because, you know, my investments were here. I didn’t really. I didn’t really like the idea of moving to another city and then having to. I thought, I don’t know. I don’t like the idea of having a bunch of investments scattered all over the place. Some people are really good at managing that kind of stuff, or they just hire property managers. I don’t know. I just I like to be close to all my stuff. Literally everything I own is a ten-minute drive, so it’s nice. I like that. And then also my family’s all here. So I actually really, really like the fact that my family’s all close. You don’t want to go see my brother; I want to see my sister. Whatever my mum, I just there are five-minute drive. So I like the small-town sort of living, you know, only if you can invest. This is my personal preference, obviously, but I like the fact that I’m in a small area. There’s no traffic, like there’s literally no traffic. I did the Georgetown thing for two years. If you missed the 401 by one minute, you were waiting an hour, you know, I thought, I am never, ever doing this again. And so I enjoy the small town and I call a small town living with the people here say it’s not a small town, but yeah, compared to compared to the GTA, this is definitely small town.

Sandy Mackay [01:00:34] So you separate it out. You’re you kind of separate your active flipping business and you’re your buy and hold corporation recently. Right? What’s the reasoning behind that and how did that all come to be?

Dan Desveaux [01:00:46] Well, I’m in the process of doing that, I just I finally got my core, my new corp made, I did the I don’t know if you’re familiar with the whole three-tiered corporation set up, but I tried the three-tiered corporation set up many years ago. It didn’t work for me. It was too complicated, too expensive. And you know, my gurus, everybody will tell you, you got to separate your active business from your from your passive business, predominantly for liability. You know, if in your active business, say, for example, you’re flipping houses, doing whenever someone sells or arm off or dies, they fall off the roof and dies. You potentially you could get sued and you want to try and or slip and fall as those kinds of things you want to keep liability wise; it makes sense to have it in a separate corp. I’m doing it for that reason and other reasons. I think it’s easier to keep track of financially in accounting perspective. The keep track of everything on your passive side, your buying holds and then have your active businesses, whether that be investing in in in flips or if you have a construction aspect or property management aspect to your business. Having that separated, I think I think that makes it easier. And then also, for me, it’s a branding thing. I might. My real estate company is called Big Dog Holdings. So, so in a branding perspective, it’s not really. Does it make sense right now going to be Dan, the Big Dog Holdings house builder or whatever I’m going to be or the house flippers? It doesn’t really make sense in a so branding. So that’s going to be my new corp is called Easy Realty. And I think it’s a perfect name for what I want to do. And then I think eventually down the road when I do get into building houses and potentially, I want to build, I want to build like retirement communities is ideally what I want to do down the road. But I got to start by building something and build some houses. But eventually, that will be a separate corp as well. So that’s why that’s why I separated it.

Sandy Mackay [01:02:53] Girl, it’s easy. Realty dogs. Yeah, right? People can go check out that he got a

Rob Break [01:02:59] dan I can’t like. We could have probably done a double feature here, but so would you be willing to come back and talk to us again?

Dan Desveaux [01:03:08] 100 percent, 100 percent any time, guys. I mean, this is awesome. I loved every minute of it.

Rob Break [01:03:13] You know, I think maybe sometimes Sandy. We should like start a series where we do like a deep dove and sort of like, now we’ve got an overview of everything. You know, we could really dive into that first investment, let’s say, as a as like just a deep dove episode through. I think that the one very interesting property. Yeah, there call and go from there. But then I want to say, you know, a lot of people talk about luck, and it sounds like you’ve gotten lucky on all these things. But I do think that you are the perfect example of when preparedness meets opportunity. And that’s what a lot of people define luck as so. I just I think you’ve done so much and thanks for coming on and sharing it all.

Dan Desveaux [01:03:56] Thanks. Thanks for having me. You know one example you just think about picking one, one project apart. I actually just finished an eight points downtown here, right downtown. And I, you know, the numbers, the complicated parts of the deal. I could talk for an hour just on that. That’d be actually fun to do. I think a deep dove into a specific project is a great idea for your show. I mean, there’s lots of people would learn all kinds of stuff from developers. Absolutely.

Rob Break [01:04:27] Well, let’s commit to it now. Then look for it in the future, everybody. Yeah, yeah. OK, so what’s the what’s the best way that people can reach out to you?

Dan Desveaux [01:04:37] So they can? So my email is Dan at BBH, which is Big Dog Holdings Ltd, dot com and my phone number, if you want to reach out on my cell, is five one nine four nine zero 12 12. Also, you can reach me that way,

Rob Break [01:04:59] and all that info is going to be on our show notes. So if you missed it, you could just click in there and get in touch with Dan Sandy. How can people get in touch with you?

Sandy Mackay [01:05:09] Two eight nine three eight nine six eight four six or Sandy MacKay Realty Networking

Rob Break [01:05:15] and people can reach me at Rob at Mr. Breakthrough. Okay. Well, thanks for joining us again, everybody. We’ll see you next time. Now.

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