How A Mechanic Invested in 20 Properties in TWO Years

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Podcast Transcription

Erwin Szeto [00:00:10] This podcast is brought to you by the Haultin Real Estate Investors Group. Since 2010, I helped many people, including first time investors, make millions of dollars with their side hustle of investing in nice homes and nicer areas west of Toronto, such as Hamilton St. Catharines, Nagarajan Bradford and Cambridge, Ontario. The goal of holding area is to entice would be real estate entrepreneurs to get off the couch, make things happen and replicate success of our multi-millionaire clients. Those who choose to work with the whole scenario team will have the opportunity to be coached by a highly skilled and highly successful investor coach who has walked the walk. Having owned numerous properties earning thousands of cash flow each month, who is licensed to trading real estate? Listeners to this show can go to WW W Dot and RTI UK slash. Sign up to register. But when I checked this morning, we have only eight seats left. So please do you register as soon as possible to avoid disappointment? One of the secrets to success is to surround oneself with successful people, and in my 10+ years of attending workshops and networking events, this is one of the best places to be. So I hope to see you soon. Before we get started, I want to make a point about how making money is important is an important and good thing for you, readers and listeners. I know you agree that making money is an important thing to do. Money gives you options, money buys you time and freedom, and it can be fun to spend. A motto I live by is living is giving and also life is about experiences. So I’ll give you an example of how I believe money can buy happiness. A friend of mine was asking for sponsorship money for the Easter SEALs state, where her special needs child would get to skate with the future Stanley Cup champions the Toronto Maple Leafs. They are seven and two at this point. If they meet a donation goal that is so sounds like an amazing experience, it so. I thought I would help out. And so it took me about five minutes. An anonymous donation later and done. Their kid is going to go skate with future Hall of Famers Auston Matthews, Michael Nylander, Patrick Marleau and Mike Babcock, Margaret Riley, and the list goes on and on. And I feel fantastic for it, and I suggest you try for yourselves and the old fashioned act of random kindness will do. Welcome, ladies and gentlemen, investors across the greatest country in the world. My name is Erwin Szeto bringing you the truth about real estate investing show for Canadians where it is my job to bring you experts in the world of investing. We will learn from their experience, pick up their lessons, tips and tricks and figure out what makes them tick so you too can replicate their success. This week, I’m excited to bring to you all the way from Oshawa, Ontario. Ryan Carr, a tree mechanic who was bitten by the entrepreneurial bug and turned to real estate at first renovating his own investment properties. But when he couldn’t scale himself working on the tools, he hired full time contractors. If you’ve been renovating or looking to renovate like I have, you know how hard it is to find it, get to you and get the attention of contractors to even the quote with this whole housing boom going on. Ryan’s solution is to hire full folks full time, and he’s keeping them busy as he’s purchased 20 houses in the last two years, all requiring varying degrees of renovation, including the vertical duplex split. A horizontal vertical horizontal split would be the traditional basement apartment duplex, where, as Ryan will install a vertical wall or walls to divide a property. Side by side into a duplex in order to increase cash flow by three to $500 a month. Ryan was. Here’s some tips on when to vertical split and how to source 20 properties, mostly private deals on online MLS. This interview was an eye opener to me, as are all of our guests. But this time this is the first time my podcast has been required listening to my team, the Holden Area REIT. So without further ado, I give you Ryan Carr.

Erwin Szeto [00:03:48] All right, Ryan Carr, thank you for Duke for agreeing to do the show, and I always like to start off with what’s keeping you busy these days.

Ryan Carr [00:04:00] Oh, man, for me, these days, I’ve been doing some flips lately as well as some buying horse, but my flips are sort of be more prevalent in the last little while. I don’t know why I’m typically a buy and hold investor, but to focus on some flips has been a little bit refreshing and kind of a new take on real estate investing. It keeps it keeps it interesting for sure. Always got properties coming and going, and that’s what’s been the hot ticket for me lately.

Erwin Szeto [00:04:26] All right. Well, how do you make the decision, actually? That’s a great question because I know a lot of people have trouble answering this question. How do you make the decision if a property is a flip or a hold?

Ryan Carr [00:04:38] For me, it depends on a lot of different things, I mean, location is one property condition is another how much it’ll take to renovate into either a rental property versus a property that might be suitable more for the end user that they want to put their own elbow grease into versus those, you know, like a high end home. How much is it going to take to get there? So I’m always evaluating what the market is like in the area. Just like a lot of investors do. But I mean, I try to really drill down and say, like, who’s going to buy this thing in the end when I’m done? And if it’s going to be a certain tenant or a certain rent own buyer or a certain type of profile person, I will renovate towards that and try not to go over budget and make sure that we had our targets that are set from the beginning as opposed to picking up the pieces as we go along.

Erwin Szeto [00:05:26] OK, and then what makes an ideal flip property?

Ryan Carr [00:05:32] Well, again, it goes back to me based on your goals, so if I’m looking at a deal, I’m obviously looking for something where the margins are relatively healthy, one because every investor wants to make money. But I mean, two stuff goes wrong. I need this website. So like I say to a lot of my mentor students, when you’re like, when you’re flipping, you’ve got to make sure that there’s a built in buffer there for a week or four, you know, deadline overruns or for materials that got stolen or anything like that because, you know, these things do creep up a basis or, you know, vermiculite or, you know, bad wiring, all of these things that you can’t maybe see when you purchase the property are really important to survey before you get into the deal. So that’s on the financial side on the on the timeline side. How long do you actually have to renovate this? Don’t lie to yourself and say, you know, I’m going to do this project in three weeks. And you know, we’re going to make a boatload of money because it’s not always the way. I mean, maybe sometimes it is, but you need to really be factual and say, I’ve only got evenings and weekends to work on this project or I’m doing this full time and this will be my transition piece from a nine to five job to being a full time investor. So you really got you really got to work on the timelines, you really got to work on the budget. The location is fairly self-explanatory, like wherever the property is located, you know that’s going to be your market. So you typically don’t pick up houses and move on to other locations. So those three things are the big deal for me.

Erwin Szeto [00:07:04] And where are you investing?

Ryan Carr [00:07:09] I’m predominantly in Oshawa. I do a lot in the south end of Oshawa, and I’m starting to be more in the north end now as well. South Oshawa, for me, or just one general, has been relatively lucrative. I’ve got to know the community. I’ve got to know the people of the town; you know how to get permits and how to make the process go as smoothly as possible. And once you at least for me anyways, now that I’ve been in this town for a little while and I understand the process, it’s smoother for me, but it’s also smoother for the inspectors. And I find, you know, just on the topic of ups, if you’re pulling permits for a flip, for example, and you understand what the inspectors already looking for, it makes it so much easier to predict what it’s going to cost and how long it’s going to take because you, you kind of you form those relationships with the people who do the inspections and not that there’ll be any easier on you than they will on the next guy. But at least, you know, like each inspector has their own nuances and you make sure that you can renovate to suit what they need, right?

Erwin Szeto [00:08:10] And. I know we have a lot of novice investors that live there, listen to the show. Can you elaborate more on the importance of being an expert in a certain area like, for example, I know this investor from Quebec who invests in three different cities and they’re in there, each about close to the 60 to 90 minutes apart from each other. And you may have like five properties across those three towns. Yup, yup. So how easy is it for you to do that versus investing in Oshawa and then investing in Barrie as well?

Ryan Carr [00:08:53] Yeah. So I mean, there’s a lot of people that do the Oshawa, Barrie St. Catharines route, right? And if that works for them, it’s school. I just know that for me, I wanted to focus on one area for not only for the reasons that I mentioned, but also your economies of scale. So like when you when you drive around town to look at your properties or when your property manager does that, if they’re doing multiple properties at one time, it might save you money versus having to hire three different property managers in three different cities that have three different procedures and three different price points. You know it. It can maybe get a little bit confusing, so I just focused on one area. It took a lot of restraint. I find to do that because there is a lot of different opportunities out there where people say, Hey, I can make X amount of dollars in this town or I can make X amount of dollars in that town. I think the biggest thing for me is that from what I gather in the couple of years that I’ve been doing this full time now, the grass always appears greener on the other side, but it may not always be greener once you get there. So find something that you know and stick with it.

Erwin Szeto [00:09:57] Got it! And did you invest anywhere else before Oshawa? I get you a primary focus before that.

Ryan Carr [00:10:04] Not in Oshawa and Carrington, which is yeah, I mean, according to the slightly outside of Oshawa, within like five minutes. But they do border. So it’s been those two towns that I’ve really focused on.

Erwin Szeto [00:10:15] Got it. Got it. Cool. Can we go back to how you all started? So you can. You can you start? Okay. What did you do and what did you study in school?

Ryan Carr [00:10:29] Well, I actually went to school to be an auto mechanic. I did a couple of years in school for four skilled trades, did attack. I did work on the bench, I was fixing cars, I was getting dirty and that was cool at the time. I really enjoyed it, but I just didn’t find it fulfilling. You know what I mean? Like, it was OK to pay the bills and that was cool. But I didn’t want to just get by. I want it to thrive, and I didn’t know real estate would end up being the answer for me at that point. But I just knew that being a wasn’t necessarily the route that I wanted to take. Right?

Erwin Szeto [00:11:03] And before we started recording, you mentioned you didn’t just work on a regular car as you worked on like specialty cars. Can you elaborate on that?

Ryan Carr [00:11:13] So. Oh yeah. So that that was a really cool part of my life, actually, after I was a licensed mechanic, I travel to Europe for a couple of months with my then girlfriend, now wife and some friends. And when I came back, I was looking for a new job because I had left where I was previously employed, and I come across this armored car company that built luxury armored SUV. So I thought, Oh my God, that’s so cool. I got I got to get in touch with these people. So I, I give a call. They happen to be relatively close to where I was living at the time and again a went in for the interview. The interview went great. They hired me and I was there for about three years and we were doing some pretty cool stuff like we were hand making armored car bodies from scratch on. In this case, it was a Ford F 550 platform. So if anybody knows the F-150, which is a standard pickup truck, it was like three times the size of that like dump trucks. So these things were there were massive. So we did some armored cars there with four windows and like,

Erwin Szeto [00:12:21] bring style trucks like to move money like, no,

Ryan Carr [00:12:26] no, no. This was strictly to move like rich people, ambassadors, oil money, NBA stars, hip hop artists, stuff like that, like high profile people. But no, they were. They were they were handmade luxury SUVs. Nothing like a bring struck, but they had like the Xboxes and the cappuccino machines and, you know, run flat tires and all the TV screens and stuff. Yeah, it’s pretty cool stuff.

Erwin Szeto [00:12:53] All right. So as armored and there was like, Pimp my ride.

Ryan Carr [00:12:57] Totally, totally. It was. It was cool.

Erwin Szeto [00:13:02] So you were you were feeling unfulfilled from, even though that was pretty cool. Like you’re still feeling unfulfilled and you wanted more? Or was that like and then and then to what was the discussion with your girlfriend or wife at the time?

Ryan Carr [00:13:16] That was a very interesting time in my life, not just for the armored car aspect and like working with my hands. I learned a lot by working with my hands was obviously a very tactile job, but that was the point in my life where I made the transition to real estate. What was super cool about that? And it’s obviously easier to reflect back on it than it is to, you know, to see it during the time. But I actually got laid off. Oh, and so when you get laid off from a job, you know you got two options. One is starting a business or two, go out and get another job. So I thought, well, during my stint there, we had actually bought a principal residence and that had gone well and we had already purchased a rental property that I did, you know, basically done after hours and on weekends. That would work for me in the past with this real estate gig as a pretty good racket. Why don’t I try it on a full time basis? And that was my transition to the real estate, right?

Erwin Szeto [00:14:14] And early on, you were doing your own renovations and management. Yeah. Totally OK. No, I just I just want to go through because you, you I think you’re one of the very few people actually know there’s maybe one or two others, but it’s rare that one of our guests actually knows how to use tools like going on your level.

Ryan Carr [00:14:37] Yeah, yeah. Yeah, well, it’s it was cool. I did it out of necessity. So I mean, I didn’t I didn’t grow up watching the HGTV shows and stuff like that. Yeah, like everybody sees them. But I mean, I never made it a main staple in my life. And as I sort of progressed through working as a mechanic and, you know, learning how to build things, it was sort of a natural step to start working on houses because we had purchased our principal residence during that time, and you needed to learn how to fix stuff, right? So it’s cool because at the time when I first got started doing the contracting, like I didn’t know what a two by four cost like zero, no idea what anything was worth. You know what my options were. You know how to hang a sheet of drywall. Nothing like this. How to pull a permit like I had no idea. And I really pulled on some of my background knowledge, being a mechanic to sort of work my way through that. And then I just asked a ton of questions meant like for all the new listeners out there, there’s so much on YouTube, including all of those TV shows that if you really drill down and spend some time and look at what they’re doing instead of just the theatrics of the show. Right? Spent some time and really drill down on what they’re doing. You can learn a ton of stuff in a very short period of time. Like, YouTube has been one of my best tools and I’m very much self-taught. And I think for all of those people out there that want to get into this, into this game, I mean, it’s free. You’re on YouTube, probably most evenings anyways, for personal purposes, just learn a little bit and you’ll go a long way with it.

Erwin Szeto [00:16:18] All right. I have another friend who is a mechanic, and whenever they receive a car, they haven’t worked on before and they have a problem that they need. They don’t know how to solve, actually, YouTube.

Ryan Carr [00:16:29] Sure. Yeah. I mean, it’s such a great tool and it’s free. And I think people underestimate the power of YouTube and Google. And all of these things, like YouTube, is the second biggest search engine in the world next to Google, even though they run on the same platform. And like, what you can learn from that is just it’s incredible.

Erwin Szeto [00:16:47] Mm hmm. Now you so you’ve gone down that path and so you don’t you don’t really work on the tools nearly as much now or at all now.

Ryan Carr [00:16:57] Very little. I do still step in like when it’s crunch time, I will pick up a hammer and it’s all about, you know, I will plant flowers, I will lay sod, I will hang drywall if I have to. I mean, I don’t I never I didn’t make the transition off of tools, and this is really important. I didn’t make the transition off of tools because I didn’t enjoy doing it or I didn’t, or I felt better than being a tradesman. That was that was never the issue. My issue with being on the tools is that it wasn’t scalable and you couldn’t build a business based on physical labor because you can’t scale physical labor, but you can’t scale your thoughts, right? And when you have fights, you can hire other people to do those physical things where they are getting paid for their time. But yeah, from time to time, I do step in and I think because I’ve got full time staff out being the quote unquote boss right and being able to step in and show people and educate people and tell them why you’re doing it a certain way, whether that be for budget or time or, you know, quality of work. I think they really respect that because I can’t do that and I can be part of the team as opposed to being some somewhat of like a high arc and saying, Hey, you know, I’m better than everybody below me. I don’t operate my team like that. And, you know, relationships for me are so, so important, not just with employees, but with tenants and friends and stuff like that and family. So that’s sort of how I operate my business from a from a very high level view. And the way they operate the construction side of things as well.

Erwin Szeto [00:18:30] So you have your own team and that’s a construction team, right? Correct. Can you tell us how many people and what their roles are?

Ryan Carr [00:18:41] Yeah, so over the years, I typically run with the two to four person full time crew. My direct, full time day to day crew handles, trim, flooring, kitchen, bath paint, you know, cabinets, waterproofing, gutting, demolition windows and doors cocking like stuff like that. I will sub out anything that typically requires in-depth training. So plumbing, electrical, HUAC, those are kind of the three big things and roofing from time to time, just because it doesn’t make sense of a full time roof around staff. For me, I hire all those substrates because it takes a lot of training to get really good. And when those people are really good, even though you’re paying them a higher per hour dollar, for example, they’ll come in and they’ll bang it off, and it’ll be a lot more efficient, so to speak, and probably be cheaper in the long run to just sub it out. And again, I mean, those relationships are really important. I keep them pretty busy, so they keep coming back to me for work and I appreciate what they do, right?

Erwin Szeto [00:19:50] If someone wants to run a team like you do, like what someone cost a year, like when one of your crew members, what’s the range like 40, 60, 80 thousand a year?

Ryan Carr [00:20:02] Yeah. Uh, yes and no. I mean, every something I’ve kind of come to realize is that depending on your location as well, you’re going to be paying different wages. So I’ve had coaches and mentor first tell me that I pay too high. I’ve had other people tell me that I paid Dubeau. I very much feel that I’m in the sweet spot, but a typical a typical contractor could be anywhere from, I’m going to say, very, very broad 15 to 30 bucks an hour, right? Which on a 2000, our work year is 15 bucks an hour, 30 K and 30 bucks an hour is 60 K. So anywhere in that range is probably average for your typical nine to five employee.

Erwin Szeto [00:20:46] Right. Right now, isn’t this great information? Because I know a lot of investors out there having trouble hiring contractors to do work, but you’re you can retain people who basically have them on payroll. Rides are always busy,

Ryan Carr [00:21:01] correct, so there’s a big difference. Yeah, yeah, I mean, like we’re busy for sure. I mean, there’s a big difference too. For a lot of the people out there that are struggling with contractors, there’s a big difference between hiring a sub, which is essentially like hiring somebody business to come in and do work such as an electrician or hiring a T Ford employee that’s on full time payroll. So, I mean, to juxtapose both of them against each other, you’re see for employee will probably ask you a little bit less on an hourly basis, but then you have the obligation to keep them busy and actually utilize them for that time, whereas a sub might cost you a little bit more. But you don’t have any work for them. Well, that’s OK because they’re probably doing another job elsewhere, right? You know, there’s other factors like timing. You know, when can you get them CPI, WSIB, you know, are you paying that on your employees? There’s a lot of different factors that go into a calculation as to how you should go about doing it. But I mean, if you’re only doing one or two projects a year to hire 200 employees specifically for that project might not be the route to go for a sub. Maybe better in that case

Erwin Szeto [00:22:06] to give it a. Give our listeners idea of how busy are you? Are you liking how many projects are you doing a year?

Ryan Carr [00:22:14] Yeah. In the last couple of years, we’ve done about 20 deals. So I guess that would loosely translate to a property a month, you know, somewhere in their property every month and a half. All right. So we’re cranking them up pretty good. You know, my guys are looked after and I think they’re happy working for me and I make sure they get looked after. So it’s good. Hello of fun in

Erwin Szeto [00:22:41] something that people don’t often discuss. And I, if you don’t mind me asking. I’ve heard, I’ve heard this happen many times with investors who have full time crews is they’ll look for projects not even necessarily to make money, but just to keep their staff busy. But you’ve had to do that too, right?

Ryan Carr [00:23:03] Not as often as some, but that is something that’s common in the industry. I think I may have done it once or twice because I’m always the person buying and selling the properties like the houses or mine or my partners and I like sometimes the properties take time to transact. And when you’re between deals, I can totally see somebody taking on a loss leader to keep your guys, even if you don’t make money or you just break, even because hiring new staff is very expensive. So I can probably say I’ve done it twice in a couple of years, two or three years of full time staff. And I’ve probably done it twice because I like my eyes and I respect them right? And I do it for them, not for me. If that makes sense, if.

Erwin Szeto [00:23:51] No, sorry to ask you this.

Ryan Carr [00:23:54] Yeah, yeah, no. You know, it’s a real deal. I mean, people and it’s not just construction like people in retail do have people in in the food services industry do it. People in construction, it’s like it’s retention at the end of the day. Right. And if you’re going to be off, work for six months and you can pick up a few jobs to kind of fill the gaps until your next property transaction. Okay. Awesome. And keep everybody going and keep everybody get paid. Keep everybody happy.

Erwin Szeto [00:24:22] What I want to get across to people is that the market’s changed for her for contractors like the old days, you know the rule of thumb getting three quotes. It could take months to get three calls.

Ryan Carr [00:24:35] Good. Good luck.

Erwin Szeto [00:24:37] People are busy already slammed with repeat clients, and you’re a new guy and you’re asking for three quotes. You fall some way to blow. You fell away to the bottom of the priority list. That’s yeah, that’s so that’s what you get across to people, even I have issues getting people like, I’m going back to my old contractors to do like, you know, like 30 K projects and they only have time for me. Yeah, yeah. February. Yes, sir. So we’re recording is now over. They’ll telling me, I’ll talk to you in February. It’s going to get what I thought I was like. Let me give you a deposit now to hold me a spot in February

Ryan Carr [00:25:24] for a project that may not exist.

Erwin Szeto [00:25:25] Exactly. I don’t have a property yet, but I’ll leave it in February. So hope you take this money and hold me a spot and I will allow it.

Ryan Carr [00:25:37] Yeah, it’s true.

Erwin Szeto [00:25:38] It’s true. And remember how the market used to be, you know, maybe like beyond five years ago that you could beat up on your contractors like, but like now, like you have to, you have to work for your relationship equity with contractors. So, yeah, I’ll say that that’s true.

Ryan Carr [00:25:57] It’s true relation, relationship equity. I like that. I like that. Oh, it is. So that’s actually the reason I love full time staff. Sorry, go ahead.

Erwin Szeto [00:26:06] I think I think of relationship equity with everyone and everyone on your team, anyone that you that you’ll ever need a favor from. Potentially you should have relationship equity with them. Just like, like my lawyer, for example, I’ll send them referrals. I’ll never ask for anything in return. Right? Does he? He does good work, right? So some referrals, right? Never ask for anything return in case I really, really, really need something, but I’ll save that until I really, really, really need something, you know? You know, I you know, the contractor. Yeah, never. Yeah, I’ll never like, let’s just say that I’ll keep my relationship equity high, for example, I’ll take them over lunch or I’ll take them for lunch or whatever like that, right? And Chase ever need them to come back and fix something, you know? I mean, come on. That is we get people to come back and fix stuff that they messed up on.

Ryan Carr [00:26:59] Yeah, yeah, it’s important. It’s just so important. A lot of my mentor students say like I used to be able to refer before contractors got so hard to find. I used to be able to refer contractors to my mentor students for the projects they were doing. Mm hmm. Right. And I said, I said, Let me, I’ll call this guy. I’ve used them for a number of years are on a number of deals. I’ll make sure that he looks after you. And, you know, I’m confident he will do a good job and they say, Oh, OK, that’s great. But do you get a kickback? And I always say to them, I do not get a kickback. And they say, Well, why do you refer them? And I said, because I want them to answer the phone when I call them. And for me, that is more important than getting a couple hundred bucks here. There, it doesn’t matter. Right? I want to know that when I call, they pick it up and they appreciate the fact that I’m giving them. Does that to me, is worth a million bucks.

Erwin Szeto [00:27:45] Exactly. And I think that’s, you know, and that’s luck because a lot of us are who listen to us and like you and I work countless to run the state money, but we can’t just squeeze everyone from money. We have to build relationships with equity in case we need favors and even picking up the phone counts. That’s right. Take your time.

Ryan Carr [00:28:08] It’s true. It’s true. I mean, even like, honestly, man, like you’re a realtor. Like, you know, if a realtor is out there doing a good job for you, do you really want to squeeze them know because you want them to pick up the phone when you call, because they may have a deal that might make you x number of dollars, just to put it in terms of dollars and cents. I mean, they may have a deal for you that was worth more than beating them up on their commission, right? Or, you know, there’s so many other scenarios out there like that that, you know, don’t sweat the small stuff. Just look at the big picture and the relationship is definitely worth more.

Erwin Szeto [00:28:38] Hmm. Absolutely. And then don’t that you don’t build yourself a bad reputation because everybody talks.

Ryan Carr [00:28:45] Yeah, very small industry. Very small. I mean, all the networking groups and podcasters and, you know, investor services, so to speak, that are out there. I mean, names get around. Yeah, absolutely.

Erwin Szeto [00:28:59] Like between, I think you and I have like at least over 100 mutual Facebook friends. I come from a very small community.

Ryan Carr [00:29:07] Yeah.

Erwin Szeto [00:29:09] So, Ryan, you’re busy. Not many people do 20 deals and over, like two years span. So how do you locate property on this sort of scale?

Ryan Carr [00:29:25] I’ve been very fortunate. I one of the big things that I’ve done in my business is when I move into a neighborhood, I make sure everybody knows who I am not in in-your-face way, but in a very respectful way. So I have a number of properties. I’m on the same streets, for example, in various parts of town. And when you move into, you know, take any road, any street that you’re renovating on, I always go and I talk to the neighbors and I introduce myself and I tell them what I do. And I, you know, I tell them, if they need anything, please call me directly. You know, I give them my phone number. I find a lot of people respect you for that. And that has actually been the fundamental basis for me. Getting more deals was respecting people. A lot of people have sold me properties because they felt comfortable with me, not because I came in at the highest price because I probably didn’t, but because they actually respected the fact that I took the time to care about them. And you know, at the end of the day, it’s not necessarily the price that you charge somebody for contracted services or the price that you give them for their property or something like that. It’s how you made them feel. And that’s the biggest thing that I operate on, and that’s how I’ve had some really good successes in the deals that I’ve done.

Erwin Szeto [00:30:42] No kidding. So you don’t have like a fancy business car and a fancy the generating Google AdWords campaign website, just being a good human being, you know, being a good neighbor.

Ryan Carr [00:30:55] Yeah. Like I have a I have a friend like the business kind of looks nice, but it’s just I’m like your typical I don’t know if shitty a piece of paper like cardstock, whatever. It’s not printed on steel. It’s not made of wood like carbon fiber. Not none of that. It’s just that the interaction. I think that really sells it because anybody can put anything on a business card. But if you can’t back it up with a face, I mean, it’s faceless. So it’s that emotion is very important.

Erwin Szeto [00:31:21] And I think that’s often missed as well as looking at someone to me, but there’s new property management company. And so I googled them on their website and I’m going through and going through it. If it’s not even anyone’s name on it, I know and my own a picture of whoever the owner or whoever is behind. Like, it’s completely faceless. It’s completely like no relationship. No, no, you can’t even tell her human runs. A computer can produce this website and is running this business for all I know. I mean, people forget the human touch they have gone so far, and the stipulation that we forget about people still do business with people in your personal person. So I’m sure you still do this. And also, I’m thinking half my listeners are, like, really excited that it’s as easy as you say, and the other half are really disappointed. They thought there be some sort of like earth shattering strategy that you do.

Ryan Carr [00:32:14] Yeah, yeah. I mean, it’s not earth shattering. It’s just like meeting your neighbor like, start there, you know what I mean? So it was something super basic. Everybody lives somewhere wherever that may be going bang on your neighbor’s door and say, Hey, I’m a real estate investor, right? Or something to that effect. If you’re ever interested in selling, please give me a call before you do so. I, you know, I buy properties quickly or I have some sort of solution that somebody else can offer or, you know, whatever your shtick may be, you know, focus on that and just explain that to I mean, if you can explain that in 30 seconds or less to somebody, I mean, my God, like they would respect you for even making the effort. And even if they didn’t have something to say, you, maybe they know somebody do that.

Erwin Szeto [00:33:01] All right, great. How often do they ask to look at your property?

Ryan Carr [00:33:07] What do you mean?

Erwin Szeto [00:33:08] Oh, you know, I often when I talk to neighbors about the man because often, they’re like hesitant, like, Oh, you’re going to be a slumlord, like, Oh no, no, I’m putting in the courts can result in life and death, this vinyl flooring. I’m doing everything to code. Everything’s fire rated and self-sealing or whatever interconnected smoke alarms or whatnot. Yeah, I guess you all the time.

Ryan Carr [00:33:34] Yeah, yeah. All the time. And I’m an open door policy. We don’t hide anything, whether we’re doing a flap or a buy and hold that we’re keeping. You know, I still renovate to the same standards. I’ve always done that from day one because, you know, it feels good when you produce a quality product. But to I mean, you want to make sure that your image isn’t tarnished down the road like you want to give somebody else a quality product, even if you’re selling it on the open market. So I always have the neighbors come in. You’re welcome to see anything, ask any questions you like, you know, come and be part of this process and be included.

Erwin Szeto [00:34:07] Hmm. Very cool. So my investment strategy is I do uptown duplexes. Maybe I’m wrong in doing so. So I typically buy bungalows. So the is an apartment and then the basement is a separate apartment. You do something different. Can you? Can you elaborate on that?

Ryan Carr [00:34:27] I do like the vertical split. My favorite. I love it. So I do. This thing called the vertical split came up with a couple of years ago, and it’s we’re still working with the same style properties as your typical bungalow two story, sometimes semi-detached, that kind of thing. But I put a bit of a twist on it. So what? I’m what I’m doing, and it’s an interesting concept. What I’m doing is I’m cutting the property vertically instead of horizontally. So if you can imagine your typical main floor basement apartment layout, right, like your bungalow, you got one of the main you got one down below. I’m cutting the house up and down kind of in the center as opposed to along the floor alone. So that in essence, gives by the time you add a second set of stairs that gives both tenants a main floor as well as a basement. And it gives the illusion of a full house like you’re renting a whole home, but at a fraction of the cost of a whole home, but also at a premium compared to that of a typical basement apartment. So what I really love to do and why I love to do this one is for cash flow. It bumps up the cash flow on average two to four hundred bucks per month based on an increase in rents, and it also is the one hundred percent best thing for sale and separation. I do all my own property management, and I always ask the tenants, Hey, tell me a little bit about your stay here. You know, are you? Are you happy? Are you upset? How’s the noise? And I have not had any complaints and tenants love it. I’m seeing less turnover because of that. And now is the number one, you know, typical number one complaint from a from a tenant saying, Hey, I don’t live here anymore and they love us. It’s the best thing going right.

Erwin Szeto [00:36:19] It is the same complaint about footsteps from someone walking above or something else.

Ryan Carr [00:36:25] Totally. Yeah, I mean, like babies crying, people dropping plates, moving in furniture in the middle of the night. I mean, if you’ve got nobody up above you, but you don’t, there’s nobody to complain about because you’re kind of back to your back to separating the units with walls instead of floors. And sound doesn’t travel through walls the same way as it travels three floors. And honestly, like the gold standard for your typical basement apartment, is to solve for the floor. Georges with rock solid Brazilian Channel five is drywall. Mm-Hmm. But I mean, at the end of the day, that stuff’s only so good. But if you can keep the noise away and also sound separate, you know you got to do so much better performance.

Erwin Szeto [00:37:08] Is there somewhere people can see pictures of your projects for something else?

Ryan Carr [00:37:14] Yeah, I mean, like I did you post photos from time to time, I usually do it on Facebook. That’s kind of my kind of my main stake is something almost difficult to illustrate through photos. But I mean, if you can imagine the layout of a townhouse where you’re more, you know, staircase, the staircase going up and down. That’s essentially what I’m doing. But I also do. I also do tours of some of the properties that I’m that I’m renovating and people are more than welcome to come through. Sometimes they’re paid tours on more of a mentorship basis and sometimes are just an open house where people can come and check it out for information sake. But yeah, from time to time, I do those as well.

Erwin Szeto [00:37:50] OK. How can people in contact with you? Instagram, Snapchat I mean, you’re young. You’re much smarter than I am in my. Yeah. You know, all these all the early stuff because people tell me I’m old.

Ryan Carr [00:38:05] I don’t. I don’t be

Erwin Szeto [00:38:07] younger than you. Instagram.

Ryan Carr [00:38:10] Yeah. Yeah. People younger than me have Instagram. So yeah, so Facebook, Facebook, Sandy, they go through Facebook, you know.

Erwin Szeto [00:38:21] OK, for folks listening, don’t worry, I’ll include a link in the show notes for how to get around Facebook. So how did you stumble on this idea? Just from feedback from the tenants? And then you said you design a solution.

Ryan Carr [00:38:37] Essentially, I mean, we had some we had some rental properties prior to me coming up with this, so I have done basement apartments quote-unquote for myself and for others. And I’ve also done the vertical split and we had we had a friend actually that lived in some form of a vertical split. It was kind of like a bachelor style home or would stay home. And my wife and I were over there and we got to talking and I said, Hey, this layout, it’s really cool. I wonder how we can recreate this in a two storey and a bungalow in the side, square backs or whatever. And it just kind of got to thinking like, if you’ve got tenant separation, you’ve got no separation, you know, it kind of gives you the effect of a full home. And all of these things started sort of running through my head. So I came up with the idea on how to produce it in scale. So it took a small idea, Rob it around my head, produced it in scale. And now we’ve done dozens, like literally dozens of these based on that initial thought process and has proven to be super awesome, called what?

Erwin Szeto [00:39:42] What would you get in rent for a traditional up down duplex like a bungalow or in a basement with a bungalow, with a basement apartment? Or do you typically get for rent in that and then versus you’re side by side split?

Ryan Carr [00:39:58] Yeah, so on average, I’ll say it this way, just so we can blanket a number of different markets because rents are different depending on if you’re in downtown Toronto or Hamilton Oshawa, Barry, whatever, you’re typically two to four hundred bucks a month higher overall in your gross rents. And it’s generally speaking, not the main floor or what would be the main floor unit that changes all that much. It would be what would have been the basement unit that you’re bringing the rent up to match that of the main floor. So for example, if you’ve got a bungalow that rents for like 400 bucks a month on the main floor and a traditional basement apartment might rent for condo a thousand right, you’d have you’d have gross twenty four hundred bucks a month in rent. If you did course split with that same property, you could see 400 bucks a month per side. You could see thirteen hundred bucks a month per side. Yeah. You know, so you’re bumping your cash flow and you’re giving the tenant a better product and you’re separating the sound and you’re doing all of these great things to the property to keep your turnover low. So, you know, overall, if you build a portfolio based on vertical splits and I say two to four hundred on average, let’s use 250 a month, right as a ballpark. If you got 10 of these properties, that’s an extra two thousand five hundred bucks a month. And if you’ve got 10 of them for a whole year, that’s an extra twenty five thousand almost 30000 bucks. Just for changing the way that we think about Brexit stacks.

Erwin Szeto [00:41:30] That is, does it? How much does it cost? So what are the things that we have to do to do the vertical split versus what we versus what we normally have to do for a basement split because the renovation?

Ryan Carr [00:41:45] Yeah. So it is more labor intensive. OK. It is more labor intensive. Hundred percent. Traditionally, I say sometimes it can be the same cost, but it’s very rare. I’ve had situations where it has been the same cost, but again, it’s not that common. Ten percent more, 20 percent more 25 percent. It’s really dependent on the layout. So I mean, you got to you got to work with the existing layout of the home. So if you buy a home, the main floor is beautiful and it’s just a bungalow, for example. Again, need for beautiful. The basements, like three quarters finished and all you got to do is some touch ups. The probably wouldn’t make sense to strip out that has a do a vertical split just on a dollar for dollar basis. But I mean, if you’ve got a really rough, nasty looking home and most of it’s going to come out anyways, well, you might as well replace that with something that’s going to give you better value long term.

Erwin Szeto [00:42:38] Right? And it sounds like a key one of your bigger expenses is the second set of stairs like they have to do much more like electric wires and.

Ryan Carr [00:42:49] Each track can be it can be, I mean, when you’re separating up and down versus left and right or front back, for example, or the track would need to be changed. Sometimes electrical would be running through where you need to put a second set of stairs in. So that might need to be changed in such a case by case things like the actual set of stairs itself isn’t the expensive part. Typically, because like a set of stairs could cost you like a couple of thousand bucks or whatever rate, cut a hole in floor and put a set of stairs, and it’s all the periphery that really changes, right?

Erwin Szeto [00:43:27] Is it something so I think you mentioned earlier, you’re looking for almost like a disaster property to mess your first consideration, if you should be doing these renovations for a vertical split. And also, you’ve got much more expertize than most of us. So you can probably see how easy or how hard it would be before we could.

Ryan Carr [00:43:52] It’s taken a lot. It’s taken a lot to train my brain to think the way that I need it to think in order to pull this off, like I get building inspectors coming and going, what the hell is going on like? This doesn’t even make sense to me seriously. Like I had to coach, I had to coach the city of Oshawa through this process for the first couple of deals that I did, because at first, I said, Oh, you can’t do that. And I said, Well, no, no, no, hang on. Let’s take a step back and say, Yeah, like the real thing I have to. I have to have one apartment accessory to the other in Oshawa, for example, which means, in this case, 51 percent, 49 percent. Now I split that up, whether it’s up and down, left and right, front and back. You know, there are certain stipulations on it, but I’m going to make this sucker work for me. So come hell or high water, right? These are the rules I’ll play with in them. Mm-Hmm. And let’s move forward. And then they finally came around and they said, Yeah, you know what? That doesn’t make sense. And then I had to get the inspectors on board, and then they had to come and see it and see how the fire separations were going to work. And then it, you know, it made sense to them. And even some of my JV partners were like, Well, how are you going to do this? And I’ll bring them through a wrecked property that we’ve demoed. And there’s like there’s like holes and flaws and missing, you know, missing boards and walls or that like sometimes these properties get really invasive. And they’re like, How do you cut through all of this stuff and see nothing but a finished product in your mind? And I said, like, it’s just it’s a practice and time and putting in the effort. And now that we’ve done a few, they it makes sense and it comes a little bit easier.

Erwin Szeto [00:45:30] Right, right. So we’re picking up on the end because I want to honor your time. What is real estate investing meant to you? And it’s a really general question.

Ryan Carr [00:45:45] It’s going been. Yeah. I mean, it’s been a total lifestyle shift for me, being an employee to being self-employed is a nine day transition. That is not for everybody. A lot of people take on real estate as a profession and in many in a number of different ways. And a lot of them do it for lifestyle because they want to, you know, have a passive income model. And that’s really awesome. I’ve taken a different approach to it. I’ve like really, really gone gung ho over the last couple of years, you know, not taking vacations when I should have and not slept the full eight hours when you could have or not gone out with friends and not party and not done all of these things, you know, because I want more success for myself and my family. So for. For me, it’s been it’s been a total change that hasn’t resulted in more passive income and freedom or anything like that. I mean, those things would be there if I so chose to just stop it all today. But I mean, I’ve taken a different approach where, you know, I really wanted to pound the pavement and make something of this. So that’s the model that I’ve gone and it’s been successful for me.

Erwin Szeto [00:47:05] That’s what I like to. This whole Work-Life Balance thing can exist for some people. You just don’t get Ryan Carr like resilience if you really need that balance. That’s just the reality of things.

Ryan Carr [00:47:28] Yeah, it’s true. I mean, there’s some people out there that have completely crushed it on their business and done super well and not put a ton of effort in and made millions, right? And they’ve, you know, they’ve been in the right place at the right time or they had the right idea that didn’t require, you know, or that did require an asymmetrical amount of input for, you know, an awesome output. Those are few and far between honestly. And as much as I would like to have that, I’m sure this will come at some point. But for me, like just put in the work, like just do the work, go out there and do you know there’s a lot of people that want to say that real estate comes easy and once you put tenants in, their money just rolls in and you can suck my toes on the beach. And you know, that may be true, but I just I don’t necessarily believe in that model for myself right now.

Erwin Szeto [00:48:18] And I don’t know if you and I know any people that are like that. Maybe, Tasha.

Ryan Carr [00:48:29] Yeah. And there’s people out there that have everything managed and they’ve got the right cash flow and it works for them. Yeah, that’s cool. And you know, to them, that’s the lifestyle. Yeah, whatever works for everybody, whoever works.

Erwin Szeto [00:48:44] And so I want the listeners to think about. Pick a number in your head, how old do you think Ryan is? So, Ryan, don’t say it, but please, please take a moment to just consider what this young gentleman did kind of give a part of it. But what this gentleman has accomplished in his in his career that now put it over your head. What do you think it is? OK now, Ryan, to ensure your age with everybody.

Ryan Carr [00:49:13] I just turned thirty

Erwin Szeto [00:49:15] just turned 30. I thought your younger sister can have a baby face even though you have a beard.

Ryan Carr [00:49:21] Dude, I know, I know, I know. I get it all the time. I’m cool with it. Let’s go

Erwin Szeto [00:49:28] right ahead. One gentleman right in here. He wanted me to ask. Interview these guests. You wanted me to ask them. Like, What is your X-Factor? What is your special skill? What is your head? What, how? How did you achieve the success? Were you? You’re born into money. You have an exceptional IQ. What is it?

Ryan Carr [00:49:55] Yeah. So I’m not part of any high IQ organizations. I was definitely not born into money. I grew up very middle class. You know, we weren’t poor, but we weren’t wealthy. We were just very, very average middle class family to working parents. And I just I put in the time to make it factor for myself. I took a genuine interest in what I was doing right and I actually cared about the results. And I think that if you care about what you’re doing. High school students prime example people hate high school. Very, very general statement. People hate high school. Not because they don’t want to put in the work, but because they’re not inspired or interested in what they’re learning. Like, if you know, if you’re if you’re not going to be a scientist or a med student, maybe you won’t take interest in taking science or physics classes, for example. But if you want to be a health care professional, maybe you’ll really enjoy physical education, but you won’t put in the efforts anywhere else. I think that it’s so important for the IT factor to be whatever it is that you make it. I made it. I just made my it factor by putting in the work. You know, my it factor for me is just, you just enjoy doing what you’re doing and taking genuine interest. That’s why it’s

Erwin Szeto [00:51:16] interesting. So I wasn’t planning on asking this question, but you can kind of approach it. How much do you enjoy your work versus you enjoy what or what your career provides you in terms of like a lifestyle?

Ryan Carr [00:51:33] Ooh, that’s a good question, because I

Erwin Szeto [00:51:34] asked people ask this all the time. I like always fun being a landlord. Yeah, yeah. I’m passionate about dealing with dealing with.

Ryan Carr [00:51:46] Yeah.

Erwin Szeto [00:51:47] But that’s one of my properties is public items like that I’m happy about.

Ryan Carr [00:51:55] Yeah. Ask me that question one more time.

Erwin Szeto [00:51:59] So how do you enjoy the work that you do or do you enjoy what it provides you in terms of like returns like your freedom, like being your own boss, making money and not saying that you can only choose one or the other. It’s kind of you obviously split part of it. Like for myself personally, I enjoy other rewards, no more so than no know I.

Ryan Carr [00:52:29] I’m a very modest guy. Like, I don’t I don’t go on lavish vacations. I don’t do you know the high end sports cars and stuff like that? So for me right now, the lifestyle that it’s providing is hard work like I’m not taking, I’m not taking enough to go to the beach and stuff like that. Like I, I work. That’s what I do is I just I put in the work, I put in the time right and when I need to take time off because I’m either overworked or, you know, I’ve kind of hit my limits for a little bit, then I can feel good about taking the time off because I come back recharged. So as far as the lifestyle that has provided me right now, right now I’m choosing my choice to work really hard. All right. Could I sit back and like, you know, just sort of collect rent and do a couple of flips here and keep it really simple, real casual and enjoy life? Absolutely. Maybe when we have a family, like when we have kids, that’s more an avenue that I’d be willing to take. But for now, let’s spin the wheels, baby. Let’s get this thing moving. You know, let’s build something so that when you do want to take the time, you know, it’s there for you and us and it’s observed, Eric.

Erwin Szeto [00:53:36] All right. I saw somewhere that you offer workshops where it can be more what we’re doing in workshops like and how can people learn more about them?

Ryan Carr [00:53:49] Yes, so my workshops are super casual. I’ve done a few this year already. Like I was mentioning before, a summer free summer paid, but I mean the relatively inexpensive given the information that most people get from them, especially with the vertical square concept. I mean, you know, you can make back a couple hundred bucks a month and more than covers your entry fee. So usually Facebook is the best way. They do have a website throughout the show notes like you were saying before, and people can kind of check in there. But I mean, we just cover basic stuff all the way up to advance stuff. And if it’s if it’s if people want to learn more about the construction side of things, I’ll do a workshop on construction if people want to learn more about the investment side of things and the way the money flows. You know, we can talk about that, too. I’ve done some cool presentations where, like, I will literally describe how a flip is done on a sheet of dry eye wall in in a renovation. So like, I’ll just grab a Sharpie and just hang it up, right? And we’ll talk. And if people have questions and then they can just like, you know, reach out to me, email me, and I’m always I’m always happy to help people move forward in their businesses and provide a little bit of value so that, you know, they have some successes like I’ve been able to see as well.

Erwin Szeto [00:55:00] Very cool. And are you open to still taking on more partners for your investments?

Ryan Carr [00:55:06] Yeah, I mean, I’m always looking for I’m always looking for quality people that I can establish a relationship with, and I think the biggest thing you know, I know you feel the same way. The biggest thing about relationships is that they’re super, super important. And to have a JV partner that you may not agree with on a business standpoint or on even a personal or emotional level, you’re just going to have friction all the way through the process. So if you find somebody you know, for any of the listeners out there. If you have somebody in mind that you know, would appreciate whatever it is that your partner brings to the table and you guys are on the same wavelength and stuff like that, you know that’s so important and that’s exactly what I look for in a JV partner. Just, you got to resonate well, like, you know, just like a spouse or just like your other family or extended family. And everything has to kind of work harmoniously. And, you know, people are putting up a few bucks to make sure that the process goes smooth and you want to make sure on both sides the JV partner side with the money and the JV partner, that’s actually doing the work, whatever that work may be. You know, you got to make sure that everybody’s copacetic with each other.

Erwin Szeto [00:56:11] Very cool. Very cool. You know, I’ve actually had two guests on the show where they only really had one JV partner. But I’ve but judging by the size of their projects, it was like millions and millions and millions of dollars to invest with them. So maybe we will find you one of them. Sure.

Ryan Carr [00:56:31] Yeah. Yeah, I mean, you know what? I’ve in the last number of deals that I’ve had, whatever have been with JV partners, some have been solo. I’ve only had a couple of JV partner gurus myself and, you know, I’ve been very good at supporting them and they’ve been very good at supporting me. And it’s been a reciprocal relationship and we just keep, you know, we just keep in touch and we keep investing and we keep making sure that we’re on the same gameplan with, you know, with emails or phone calls or just a quick coffee saying, Hey, what’s up? You know, it’s a really cool feeling to know that your partner has your back and you have your partner’s back.

Erwin Szeto [00:57:06] Very cool. OK, Ryan, I want to honor your time. I want to thank you for coming on the show. Some awesome insights. And again, for those listening, I’ll post Ryan’s website and its Facebook link so you can reach out to him if you like. So, Ryan, thank you so much for coming on the call, Nigerian.

Ryan Carr [00:57:26] Thank you for having me.

Erwin Szeto [00:57:28] Any time. Thank you for listening.

Erwin Szeto [00:57:39] If you enjoy this podcast, please subscribe on Stitcher, Google Play or iTunes, however you’re listening to this, or I can send you an email when each episode is published right to your inbox. Simply go to truth about real estate investing dossier, and it’s your email address, and I will continue to deliver to you stories of inspiration, success and lessons to help you on your journey to financial freedom. Till next time, this is Erwin Szeto telling you to just do it and I believe in you.

Erwin Szeto [00:58:12] You.

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