Table of Contents
Erwin Szeto [00:00:08] Hello everyone. Welcome to the Erwin Szeto Show where we discuss the truth about real estate investing. Here we bring you repeatable, systematic methods to invest by successful action takers like today’s guests from the French garage. They actually go by garage. I check actually if it was F1 garage, that’s for sure, for financial independence. And they’re already somewhat retired, the semi-retired in living off the proceeds of their investments. But before we get to this week’s show, I’d like to thank those who have left reviews for the show, mostly on the Apple iTunes. I honestly don’t know where else you can leave reviews. Apple’s by far, that’s where most of the reviews are. I don’t think anywhere else even make up 10% of our total reviews. Anyways, thank you for everyone who has messaged me with kind words and with it being the holidays. I’ve been asked many times what I would like for Christmas and from you all 16 listeners. Nothing makes me happier than a five star review so that the internet guys may do their algorithm thing. Skynet will shine fever on the show, hopefully, and make it more visible to more everyday Canadians in search of practical means to reach financial independence, preferably ethically and morally correct financial independence. There’s perfectly nice ways to make money. We don’t have to resort to underhanded methods at the expense of other every day, kind, nice and friendly Canadians. I’ve written them as a goal for 2022 to grow the listenership from 16 listeners to 22 in honor of the year 2022. This never talked about the number 19 again. That’s a growth of 37.5%, which seems impossible. But many of our real estate portfolios did the same in the last year. And who knew that was possible? So let’s see if we can make it a repeat. Speaking of everyday Canadians in search of financial independence, one of my old childhood friends called me this week to let me know that about the revised ROI return on investment. New projection on a real estate project that he got into on my recommendation. I happened to be in the same project. Him and I go way back to elementary and high school. His wife was my roommate in university for just one year and he was in my wedding party for that close. Anyway, so we’re both investing in the same private equity housing development. It’s a project north of the Greater Toronto area between Newmarket and Orange Hill. For those who know or in the know where things are, the builder. So the builder who is, you know, who’s developing land, selling the properties they’re going to build everything is well, spendy and they are big time for those who are in the know of housing in Ontario. Anyway, anyways, our revise our ROI over a nine and a half year period is first to provide context. This is one of the best projects this private equity group has ever done. So it’s well above their typical. Of course, history doesn’t repeat itself. Returns past inoperative to future. The revised ROI over nine and half years is 819%. Yes, that’s 819%. We’ve both been invested since 2015. So in payout, full payout is expected in 2025. These are my last piece of advice. These are our piece anyway. So we’re not in a hurry to see this money back. My friend regrets. You know, he regrets not putting in more money. But I did the math. I was driving when he called me and I did the math and I still managed to triple task drive. Be on the phone, do mental math. And I said to him, Your return is over $400,000. That has to be enough to put your kids through university. I think you owe me dinner. Scratch that. You owe me a round of golf. It wouldn’t sticks. My friend and quote my friend told me there’s another project coming up northeast of the GTA Greater Toronto area, still available for those who know Ontario a bit that he’ll be investing in and I will likely invest into. If you’re two are interested again folks pass as I predict the future I don’t expect to see returns, but if you are interested, simply email us at I went at and continue asking you about. Just put anything in the subject line around private equity, real estate developments in my team and I will point you in the right direction. I personally only invest in two private equity funds. Two equity companies mean that’s correct. Term two different private equity companies. One is focused on multi-family apartment buildings in Ontario. Southwestern Ontario city is really close to me, mostly Cambridge, Ontario and Hamilton, Ontario. And the other one, as I just mentioned, the one I just mentioned, that does they only do real estate developments. I only invest in their projects in Ontario. These two companies are the best I’ve found personally, and I also use their returns, their projects as a baseline to compare opportunities that come our way. Being someone who’s been in real estate since 2005, being part of this community for quite some time, more than most. I get a lot of opportunities that my way considering all the investments you can imagine how many I don’t invest in because again, they have to be as good or better. And all I ask to return is a round of golf. And just kidding. I only ask you for a five star review and if you can include in your comments what you’ve learned from the show and how it’s helped, that is thanks enough that no longer telling your friends about this show. Until this week’s show. We have two regular guys. One is a mechanic. Another is a soon to be retired accountant. The mechanics actually semi-retired already. They host a Financial Independence Garage podcast for short a garage podcast. They’re both under 50. Mechanics under 50. The accountants under 40. We have a lot of financial security thanks to their multiple streams of income beyond just real estate and largely achieved from their frugal lifestyles. The mechanic and the accountant, they are pseudonyms. Of course, they don’t share their names. They do share their faces. If you’re watching YouTube, these shows are posted to YouTube as well to protect their privacy from their employers. And as you can guess from their pseudonyms are descriptive of how they made a living, how they make a living, how they used to make a living. So on the show this year, how they’ve achieved financial independence from work. Details of their real estate investments, including out-of-province investments. Note They’re located in B.C.. So we have some we have some left coast folks on the show for first in a while. I love B.C.. That’s probably not entirely accurate as of Vancouver. It’s my favorite city in Canada. I can’t wait to get back out there, maybe enjoy it here at these guys. So they invest out of province as well. They invest in Middle Canada, if that’s the right term. They do private lending. They are capital partners as in joint venture agreements. They stock act crypto the fractional real estate via Audi invest. They both share one investment, each real estate specifically that did not go to plan and the lessons they learned from it. So please, folks, listen to these lessons. What went wrong? The red flags that they saw so that you to me add them to your own toolbox skill set so that you don’t make those same mistakes. You can find the financial garage on pretty much all the social media platforms. And of course, they’re in the show notes that I post online and in my email newsletter. This quick disclaimer All three of us are consuming adult beverages containing alcohol in this episode. If that doesn’t tell you that none of us are licensed to hand out financial advice, then I don’t think anything will. We are sharing our experiences only for educational purposes, as of course is not predict the future unless it’s real estate which always goes up.
The Mechanic [00:07:21] I’m just kidding.
Erwin Szeto [00:07:23] It only goes up most of the time. If you do it right, please enjoy the show. Mechanic. Accountant. What’s keeping you guys busy these days?
The Mechanic [00:07:31] Hey, Erwin, thanks a lot for having us on your show. It’s killing time. Yeah, it’s different to be on this side of the microphone. The accountant and I present on FIA Garage and I’m also on Next Glorified Canada podcast. So as you know, podcasting as it keeps you busy, even though we’re making just like hourlong shows. So that keeps me busy. As you know, we’re going to talk about real estate today. And I think that even though I’m kind of on the more positive side of that, it definitely keeps me busy staying involved in it. And right now I have an investment with Epic Alliance in Saskatoon, which is keeping me very busy because there’s some legal issues to work through right now. So I don’t know. Yeah, it’s okay, but it’ll all work out in the end. But on that I kind of do a little bit of part time work. I was formerly a helicopter mechanic and so I still dabble in a little bit of that, but I consider myself coast fi, so I’m on my way to financial independence and just try and keep busy and earn enough money to pay the bills that you’re.
Erwin Szeto [00:08:24] Amazing and Accountant? What’s keeping you busy these days?
The Accountant [00:08:27] I have been pretty busy managing my rental properties. I do a bunch of options trading these days as well and I actually will be leaving my job not too long from now, so I’m hoping to free up a whole bunch of time and I’m sure I will be keeping myself very busy once that comes through.
The Mechanic [00:08:46] Well, you’re leaving your job, but all we talk about is starting our own brewery. So yeah, we’re going to be brewing beer.
The Accountant [00:08:52] We grow a lot of beer.
Erwin Szeto [00:08:53] Right, right. So before we started recording. So my understanding is your show started really just you’re just broadcasting your regular around the keg.
The Mechanic [00:09:03] Craft.
Erwin Szeto [00:09:03] Garage conversations. Please elaborate.
The Mechanic [00:09:08] Yeah. Basically, the guys would come over to my house here you on a Friday afternoon and you know we might be brewing about your beer. And I had my good buddy, the economist who is an economist and my other buddy, the accountant who is an accountant. And I wanted to learn about investing. And the account’s always been into real estate, so he could teach me a lot from that. And we just have, you know, like friendly guy banter in the garage and we’re learning lots along the way and we’re like, You know what, guys? Let’s just get some microphones. We just enjoyed drinking beers and talking about the stuff. Anyway, let’s share it. Let’s have some fun. So that’s how it started.
Erwin Szeto [00:09:38] That’s awesome. I think a lot of people on this show, listening to the show can appreciate they don’t really have the support groups.
The Mechanic [00:09:44] Community is a huge thing. And for us, as we got sort of deeper into we’re a bit more in the financial independence space. It’s Financial Independence Garage, right? So there’s really been a growing community. I’m sure a lot of your listeners have heard of the fire movement, right? Financial independence, retire early. And of course, real estate’s a great way to get there, but. Not the only way. So there’s just a lot of discussion and such a good community to be involved in because everyone wants to share and learn.
The Accountant [00:10:09] Yeah, and I think it’s really important too, that it was such a taboo topic to talk about money for so long. But a lot of these investing ideas or different money habits or things like that, you know, it’s important to have people to bounce ideas off of. And I think that community is really helpful for people when they’re going along their financial journey.
Erwin Szeto [00:10:27] And actually, to that point, I believe there’s some cultures that believe you shouldn’t talk about money, even if you have money, especially if you have money, you shouldn’t be talking about it. Clients of mine, for example, they had no idea about the multi multimillionaires. They had literally living on the other side of the fence from them. They owned like a dozen commercial plazas. Right. They had no idea.
The Accountant [00:10:47] Well, and that’s what I find so interesting. And so we’re never supposed to talk about money, but how are we supposed to learn.
The Mechanic [00:10:52] About our next.
Erwin Szeto [00:10:54] One? About everything?
The Accountant [00:10:55] Yeah, exactly.
Erwin Szeto [00:10:57] School didn’t work out for the moneymaking part, but.
The Mechanic [00:10:59] No, no, it didn’t. Well, I think it’s, you know, it becomes our narrative, right? Because we’re influenced by, you know, our parents, the discussions we had with them, the mindset that they had around money and investing. And, you know, you can see, I mean, in my forties, so my parents were of that high, high interest rate generation when they were trying to buy their own house and they weren’t really property investors. So I didn’t learn anything from them on that side of things. Right. So you’re right. It’s the classic sort of millionaire next door I grew up in in Richmond, just south of Vancouver. And I had no idea about real estate, but I saw a change in the property values in Vancouver, in the Greater Vancouver area, and I wish I knew more. You know, it’s one of those things you look back and I go, Geez, if I knew what I know now, back in my twenties, I would have somehow scraped up a down payment for some sort of revenue property. It just it’s good that this conversation is happening. Like the accountant said, it’s becoming more widespread. It’s not as taboo. We’re sharing and it’s going to help everybody along the way.
Erwin Szeto [00:11:57] Yeah, I totally agree. Thinking back to my early twenties, all that was ever put in front of you was mutual funds.
The Mechanic [00:12:03] Yeah, right, exactly.
The Accountant [00:12:04] High fee mutual funds.
The Mechanic [00:12:06] Right.
Erwin Szeto [00:12:07] And then if you get around with a bunch of guys in a garage, like to go around with maybe a million bucks in mutual funds, who’s. Who is actually retiring off these mutual funds?
The Mechanic [00:12:17] Yeah, exactly. No, not with the high fees that the banks charge. I’m happy to own bank stock, though. You know, they can. They can pay me, but I don’t want to pay their fees. Yeah, I think it’s it like you just said, there’s two is it’s, it’s a lot about sharing the, the ideas and you look around and it’s not always just one thing. I think we can all agree on this show that we’re invested in different areas. Right. Real estate is a is a facet of my portfolio, but I think it needs to be balanced out with, you know, some index ETFs like the account mentioned, we’re into some options trading for cash flow. You know, the more you learn, the riskier you get. In all these areas, you can sort of compile a nice basket of hopefully, you know, somewhat diversified and uncorrelated assets to give you more protection in the long run.
Erwin Szeto [00:12:58] Most of the people who will consume this are listening so they can’t see you.
The Mechanic [00:13:04] Yeah.
Erwin Szeto [00:13:04] A quick, silly comment. I don’t know many people over the age of 40, but they fire up. Usually they’re under 30. And if they’re over 30 and they’re saying it’s because they already started saying they’re in their twenties and they only became 30 more recently, they’re like, isn’t it like a young person acronym? I don’t I picked it up because again, because my young friends and my friends on the Facebook Ministry of Fire and that’s how I learned about it, certainly with everyone we learned about recently from my young friends.
The Mechanic [00:13:32] Oh, I don’t know, I, I could argue that anything less than 65 or maybe even 60, you know, is retiring early. And I really don’t want to go down the path of the whole retirement, quote unquote, because I hate I hate the connotation that that brings to people. I just read an article in the Golden Mail the other day about a friend of mine in Quebec who has she admittedly said she’s not fire. She’s in her early thirties, as you said. A lot of people are trying to achieve it in their thirties. But the article made it out to sound like she was done. She was retired, and as we discussed before the show, Erwin people that are listening to your show and people that listen to our show, they’re driven to learn more and they’re driven by doing things we enjoy, doing things we enjoy projects. So even if I don’t do my trained career job anymore, I’m going to have things that keep me busy and earning the money side of it. You know, that’s a bonus and sometimes that motivates us. But doing it because you want to do something to me is what the fire movement’s all about, is it’s giving you the choice.
The Accountant [00:14:32] Yeah. And at the end of the day, I mean, retirement is just some silly concept to me. I mean, whether it’s real estate investing, index funds, options, whatever you’re doing because you’re accumulating assets and the greatest asset you have is your time. So the quicker you can get control over your time, I don’t care how you do it, that’s the greatest asset you can have because it’s your most limited resource.
Erwin Szeto [00:14:55] And in that way, we have more resources than Warren Buffett because I don’t even know what he will do. Yes, but he’s in his nineties.
The Mechanic [00:15:01] You said. Yes, exactly.
The Accountant [00:15:03] Ask Warren if you would start at $0 today to be 20 years old. I guarantee you he would.
Erwin Szeto [00:15:08] Ask him if he’d give up $5 billion for just to get 20 more years.
The Mechanic [00:15:13] Yeah, I’m.
Erwin Szeto [00:15:13] Pretty sure that’s the.
The Mechanic [00:15:14] Ticket. Yeah, yeah, for sure. Right. Well, you know, it’s interesting. The accountant brings up, you know, the time thing, too, because in the in the FI community, there’s always a lot of discussion, you know, when it comes to real estate, a lot of people are so hesitant about getting into it because what they see it as is something as work and time. Right. So one of the things that I’ve tried to focus on is developing real estate investments that are very, very passive in our count. You manage your own doors. So what does that look like to your time?
The Accountant [00:15:44] Not that bad. People always. I don’t know. I don’t know everyone if you get this, too. But people always make it seem like it’s such a big hassle managing properties. And if you don’t do the job right, it definitely can be if you don’t screen tenants well, if you don’t head off problems. But at the end of the day, I have four rental doors at the moment and I would say it probably takes maybe 5 minutes a month of my head space and then the odd month or something. I’ll break like an appliance because they build appliances to break every six months.
The Mechanic [00:16:15] Apparently now you’ve got 12 months out of it.
The Accountant [00:16:18] I got 12, yeah. I just had a dryer break after 12 months. It was literally two weeks after the warranty had expired.
Erwin Szeto [00:16:24] I had that happen too. But the one where it was a combo washer dryer.
The Accountant [00:16:28] Oh, no, that whole thing where.
The Mechanic [00:16:30] You tossed out the.
Erwin Szeto [00:16:33] Combo washer dryers for me.
The Accountant [00:16:35] No, no, that’s a kick in the pants.
Erwin Szeto [00:16:37] To your point, I think first off, people misjudge the amount of time that it takes to manage property. And then what I find generally people miss is hourly rate.
The Mechanic [00:16:47] Right. Yes.
Erwin Szeto [00:16:48] First off, they should understand what their hourly rate is. They actually get paid. So you make you say you get paid 50 grand a year and you work 40 hour weeks, roughly, you’re making $25 an hour. Right. I remember one time there was a windstorm and it pulled part of an awning off one of my properties. And I couldn’t get anyone to deal with it because it was still partly attached to the house and was flopping around and it could fall on someone. My tenant has four young kids, so someone had to get out there. So I got out there. Right. So it took me 2 hours to deal with it. I brought my own tools to take it down. Right. If I couldn’t have fallen on somebody. So, like 2 hours. And that was like the first service call I’ve done and I don’t know how many years. And like you guys on property, how much did your properties go up? All right.
The Accountant [00:17:30] So astronomical.
Erwin Szeto [00:17:32] Astronaut. So back then, like five years ago, properties were going up, what, 20 $600 a month? Right. So say that was what? That’s what my property went up that month. Took me 2 hours to deal with it. A 1300 dollars an hour.
The Accountant [00:17:45] Pretty hard to beat that, right?
Erwin Szeto [00:17:47] Yeah. How many people are saying no to? 1300 dollars an hour. So people need to think of the bad terms if it’s worth the grief of working 2 hours.
The Mechanic [00:17:55] Right.
Erwin Szeto [00:17:56] Versus getting paid 25 bucks an hour in their job.
The Accountant [00:17:58] Well, and so many people. Oh, what if I’d have to, you know, go clear a toilet or, you know, there’s plumbers like it might reduce my return a little, but I make one phone call and somebody at the property is dealing with it for me.
Erwin Szeto [00:18:10] Yeah, it is. I haven’t dealt with a toilet ever.
The Mechanic [00:18:14] Yeah.
The Accountant [00:18:14] Personally, that’s one I somebody tells me there’s a problem with the toilet or plumbing. Yeah. Plumber plumbers on his way.
Erwin Szeto [00:18:20] And for anyone looking for a job, you know, you want to be a plumber, you’re going to make good money.
The Mechanic [00:18:23] Oh, yeah.
The Accountant [00:18:24] Yes, you will.
Erwin Szeto [00:18:25] Even the tradespeople say that’s the shittiest job.
The Mechanic [00:18:28] Yeah.
The Accountant [00:18:30] Pun intended.
Erwin Szeto [00:18:32] So technically, being an electrician, I believe, is the most or the one of the more dangerous jobs.
The Mechanic [00:18:36] Yes.
Erwin Szeto [00:18:37] So you guys mentioned several investment vehicles strategies. Could you kind of elaborate how you split between all of them, like as like real estate, like 30%, 60%, and then like stock options is ten, gold is ten, Bitcoin is 20, whatever. Can you give some rough guidelines?
The Mechanic [00:18:55] Yeah. Yeah, I’ll take that. I want to start with, you know, the.
Erwin Szeto [00:18:57] Accounting guidelines, like how are you personally investing?
The Mechanic [00:19:01] Yeah, well, we always caveat our shows with this is for entertainment purposes only and this is our opinion. So yeah.
Erwin Szeto [00:19:07] You’re drinking people.
The Mechanic [00:19:08] For example.
The Accountant [00:19:09] To listen to.
Erwin Szeto [00:19:09] No, but we’re drinking.
The Accountant [00:19:11] We’re going to weight related.
Erwin Szeto [00:19:12] Do not take this advice, please.
The Mechanic [00:19:14] That’s right. This is not this is not financial advice. And that they know that if they go check out our show. But that yeah, for me personally, I was late into the real estate side of things. I was using publicly traded rates as my initial vehicle to gain real estate exposure. So basically at the beginning, my portfolio would have been, you know, probably 90%. You know, I’m just going to call it a mixture of a basket of ETFs that are globally diversified without going into too much detail on that. But yeah, about 10% in private and to start with, start out in public reach to start with. Since then, that was probably five years ago. I have added a private rate which is here on Vancouver Island and I have I bought two doors in Saskatoon and that’s my don’t I’m doing. Private lending. So I kind of group the private lending into real estate exposure as well because I’m in second position on those mortgages. So right now, real estate is probably close to 40% of my portfolio.
The Accountant [00:20:14] Yeah. And I would say I was probably five years ago. 100% real estate. He’s gone the other way. Yeah, I’ve tried to diversify out of it, so I bought my first house when I was 20. I’m 32 now. A friend and I bought a house just because we didn’t want to pay rent. And back in the day, you could get a 40 year mortgage with 5% down. So it was pretty easy to get into it.
Erwin Szeto [00:20:39] Those days.
The Accountant [00:20:40] Those were the days I rented out rooms to friends, had a suite in the basement. I think we ended up paying. It was like 300 bucks a month was our total cost for operating that house for about three years. And then I sold out of that, kind of moved through different investments. And then in the last few years I kind of learned the error of my ways and how overweighted I was in some areas. And I made I made some plays for cash flow that didn’t have the appreciation tacked on, that really didn’t work out well. So I’ve sold off those properties. I’m down to just two properties now in Victoria and then I’d say I’m still I mean realistically based on the value of my houses now I’m still probably 70, 75% real estate and the other 25% is there and a mixture of ETFs and kind of dividend paying stocks and as well as my trading account. But I’ve been trying to get the stock portion of my portfolio increased a little bit. But I mean, Victoria is pretty much the same way as Vancouver. We’ve seen prices skyrocket. So every time I make progress on the portfolio side, the gains on my real estate outpaced that anyway. So that percentage just keeps growing.
Erwin Szeto [00:21:51] Terrible problems to have.
The Mechanic [00:21:52] Yeah. Yeah. Very, very bad problems to have. We should acknowledge our privilege for sure, but interesting thing that the accountant brought up there from a cash flow perspective, I think that’s more where I’m investing these days because of what my position is that I am looking for higher cash flow investments and I’ve shied away from the local real estate here just because I can’t make the numbers work. So that’s why I ended up going out of province into Saskatchewan, because I could make the numbers work for a higher cash flow play there. It does come with the risks and the account is well aware of that. We’ve had many a garage conversation about his experience out of province, but I don’t think it should necessarily scare investors away. It’s just that you need to know what it is that you want to get out of your property. Right. Everybody, everybody’s had fantastic appreciation in the primary markets in Canada. And can we expect that to continue? I don’t know. None of us know for sure. Right. I mean, the looming possibility of rate hikes could change that dynamic as well. So for me, it hasn’t made sense to go into a long term play that has a lot of appreciation of mortgage paydown, because I want to live now with cash flow. It’s changed how I look at my real estate investing and what things what products work for me that fit into my portfolio.
Erwin Szeto [00:23:03] Got it. Now, can you share what didn’t go right in the prairies?
The Accountant [00:23:07] Yeah. So I bought what appeared to be an amazing duplex in Winnipeg. I don’t know if you’ve been to Winnipeg anyway. None of us have. I hadn’t been. I had, quote unquote, done my research and I had figured out that I could get a duplex in Winnipeg that rented for $2,000 a month and cost 200 grand. So the 1% rule in Canada, right. It’s pretty much unheard of. So I bought the duplex and all was well. I was getting my two grand a month of rent and I had my property manager in place and everything was fine. And my property manager, unbeknownst to me, was no longer with the company. So I had a new property manager who did an absolutely tragic job. I think I had an ax taken to the hydro service to my house twice. I had people throw bricks through the windows. I had a couple of tenants just disappear and leave the entire place trashed. Now, whether this was the demographic of where the house was in Winnipeg, also partly due to my property manager being useless. Either way, at the end of the day, I ended up almost breaking even. But it the high cash flow allure was quickly eroded when you had to start paying for all the repairs and maintenance on what was going on with the property.
Erwin Szeto [00:24:18] So the truth about real estate is the often the often the nightmare stories start with I never sell the property.
The Mechanic [00:24:26] Yeah, yeah. For new listeners. Oh boy.
The Accountant [00:24:33] Yeah, it did not work out well. Like I did fly out to Winnipeg and tour around after I had, you know, before I bought. And I think I just underestimated how bad the demographics of the area were. Like it was the north end of Winnipeg, really not a good part of town. I walked around on a sunny fall day, which probably gave me a false sense of what was actually going on there. And yeah, just doesn’t always work out.
The Mechanic [00:25:03] Story to the people in Winnipeg. But the accounts offended lots of towns in Canada before, so that’s nothing new. Yeah.
The Accountant [00:25:09] I’m sure there are nice places in Winnipeg. I just didn’t invest in them, which is my biggest mistake.
Erwin Szeto [00:25:15] And I bet you every city has the same story for an investor.
The Mechanic [00:25:18] Yeah.
Erwin Szeto [00:25:19] Someone from out of town invested in the rougher part of town. Went sideways.
The Mechanic [00:25:24] Yeah.
Erwin Szeto [00:25:24] And the last time I passed on; this came up. A gentleman came on the show, didn’t see the property was like an hour north of Montreal. That has burnt down.
The Mechanic [00:25:33] Oh, man.
Erwin Szeto [00:25:34] Here’s the kicker. He didn’t know that the house burned down like, you know, a house where your house burns down. Victoria lost a lot.
The Accountant [00:25:42] Worth enough more than I paid for it these days.
Erwin Szeto [00:25:46] His was worth $20,000.
The Mechanic [00:25:48] Oh. The value is in the structure. Yeah. Oh, geez. Yeah, that’s bad. Yeah.
Erwin Szeto [00:25:54] Best guess is that someone had bribed the appraiser and then not knowing the market, then the investor would never have known. Right? Yeah. How far away from you did the find? A lot for $20,000. Obviously, something’s not good.
The Mechanic [00:26:09] Yeah.
The Accountant [00:26:11] I think we’d have to go to the very northern tip of Vancouver Island. Like, maybe you could get one in Port Hardy for 20, but that’s probably still stretching it.
Erwin Szeto [00:26:19] So my point is, like, if you don’t know, the market means the property. That’s often how these bad stories start.
The Mechanic [00:26:25] Yeah.
The Accountant [00:26:26] Yeah. And I think, you know, I got distracted by the high cash flow, which was really appealing, but it was a D level property, which is why it offered that level of cash flow. And I wouldn’t recommend to anybody that you go to the D level of real estate.
Erwin Szeto [00:26:43] With F level tenants.
The Accountant [00:26:44] Yeah. With F level tenants. I mean all of my units in Victoria I would say are at a minimum of probably like an A-minus unit. And because of that I get A-plus tenants and I don’t ever hear from them or you have to deal with anything.
The Mechanic [00:27:00] Do you think it would have been different if you actually lived in Winnipeg and you and you had the same property in the same areas, do you think you would have been able to get ahead of it and still keep the property positive?
The Accountant [00:27:11] Possibly. I just don’t know Winnipeg well enough to answer that question. That would have been a big difference. That’s the other one is I don’t think that property managers that you’ve only met once and you don’t live in the same city as and can’t check up on are going to nobody’s going to care as much about your property as you are.
Erwin Szeto [00:27:27] Sorry to hear about your loss.
The Mechanic [00:27:29] Yeah.
The Accountant [00:27:30] You live and you learn, right?
The Mechanic [00:27:31] I’m the only guy that got lucky out of that whole story because I was actually going to be an investor with the account in that house. I got a mortgage broker, I got to the bank. I had it all lined up and he denied me. He’s like, I’ve actually gone in with my brother and I was like, Really? Okay, fine. And then all this happens in the end and like, wow, you’re lucky missing that. Wow.
Erwin Szeto [00:27:52] Have the last two years worked out for you guys and you guys are recounting. You’re talking about leaving your job or you’re already out of a job by choice. You know, like I see in the news all the time, it’s been a tough two years for a lot of people. You guys are talking about freedom.
The Mechanic [00:28:10] Yeah.
The Accountant [00:28:11] I would say I think it has been a tough two years for a lot of people. And I want to acknowledge that I’ve just been in a very fortunate place that prices jump right after. So there was kind of a block, if you remember, during COVID. And I would want to say like March, April of 2020, where people were not leaving their house. And I happened to go through the house that I live in now that I’m sitting in during that two week block where nobody went. So I was the only offer on this house and that’s unheard of in Victoria. You don’t get where you’re the only offer. So I managed to land this place, sell another one of mine. Rents were jumping up. Property values were jumping up. And I kind of hit a perfect storm of right after we had closed on this, all of a sudden, property prices were up, the market was moving again. Everybody was looking for somewhere to live. Everybody wanted out of condos into houses, which happens to be what I own. And I had had a build that was in the works for. Quite a while and that kind of finished off right, I think, August of 2020. So all of a sudden they added an extra unit onto a property and it was just kind of a perfect storm of rising rents. I got to refinance everything at historically low rates with unbelievably high property values. Then it kind of all just fell into place.
The Mechanic [00:29:35] That’s awesome.
Erwin Szeto [00:29:36] And so when you’re talking about that build, is that the carriage house you were talking about earlier?
The Accountant [00:29:40] Yes, yeah, the carriage house. So I have the first house my wife and I bought here. We bought it and we got it. We put a suite in the basement, lived upstairs for a while, and then in Victoria, depending on your lot specifications, you’re allowed to build a carriage house in the backyard. And because that house is a corner lot, I was able to build a carriage house out back. So I’ve now got three units on that one property and I luckily had a friend who’s a contractor who does that kind of work. So having a buddy who can build it for you is definitely a big win.
Erwin Szeto [00:30:10] Do you share the rent on this building now? A triplex? Actually, it’s a triplex.
The Accountant [00:30:16] Essentially, it’s a triplex. Yeah. So I’m getting 1950 a month for the Carriage House, which is a one bedroom, brand new build. And then I’m getting 1800 a month for upstairs, which is a two bed and the one bed downstairs I’m getting 1200 for. So that works out to almost five grand 49, 50 a month plus utilities.
The Mechanic [00:30:35] And let’s just say that that house is located within 10 minutes of the downtown core Victoria just for location specifications.
Erwin Szeto [00:30:42] If you’re going to invest in more of these folks.
The Mechanic [00:30:45] The problem is that house is now worth $1,000,000. It’s not the sub 500 that the account paid for seven years, seven years, seven or eight years ago.
The Accountant [00:30:54] I think it was I think it was seven years ago and it was wall to wall shag carpet like I’m talking the shag carpet in the bathroom, the most disgusting house you’ve ever seen. Nobody wanted it. It was listed for like 395. And my wife walks in and because like, yeah, we’re not paying that for it. I’m like, All right, well, what do you want to offer? And she’s like, We’re offering 340 for my client’s pretty low, but all right. And so they come back and they’re like 375 and she’s like, Now we’re going 345. Like, Don’t we want to come up a little? Like, this is going to be a pretty long run deal? And she just hardnosed, like, nope, we’re not moving. So I think we ended up getting it for like 347, probably put 50 into it on the initial rental. And then I think we were into the build for like another 175 and yeah, it’s probably worth 1.21 to 1.5 now seven years later.
Erwin Szeto [00:31:44] Sorry, the, the build that’s one 775,000 for the third house.
The Accountant [00:31:49] Yeah. And that happened to just time out before I had bought an all of the materials before lumber prices like crazy with COVID like I think today it’s probably a 225 to $250000 build.
Erwin Szeto [00:32:02] But if you can find people to do it, fly away, find.
The Accountant [00:32:05] Anywhere.
Erwin Szeto [00:32:06] To.
The Mechanic [00:32:07] Yeah I think we need to interject here. And you know, when I heard on one of your previous shows that you’re reading Annie Duke’s book Thinking About and one thing, she’s also coming out with a new book, The Science of Quitting, which I’m super interested in reading. But I think what we need to acknowledge here is that luck plays a big part in real estate. You know, the accountant had bad luck in a bad situation. And he’s also had really good luck. So I’m not saying you haven’t done your due diligence and thought about the finances and the bills and all the rest of it. But we should all acknowledge how that plays a part in our success and failures.
Erwin Szeto [00:32:41] Correct? Well, you do have to make a bet.
The Mechanic [00:32:43] You have to make up a half to make a bet.
The Accountant [00:32:45] I think that’s the big one is like we bought that house with the plan on renovating the basement, putting in a basement suite and living in the house and having the basement suite pay part of our mortgage. And by the time we had finished renovating the house, the basement suite rent had gone up so much that it almost covered all of our mortgage. It was like, Oh, well, that’s great. I didn’t expect that. I thought it would just help a little bit with reducing our living costs. And then the City of Victoria puts out its new garden suite policy and you’re allowed to build a carriage house and you don’t know what can happen. That can be incredibly advantageous. People often like to focus on what could go wrong. And I mean that entire house, that entire property is just a story of what could go. Right.
Erwin Szeto [00:33:27] That’s fantastic. So parties and a bit of a real estate geek. But could you elaborate on the carriage house? Sorry, you said one bedroom is like it has dome, furnace and water heater. Air conditioning.
The Accountant [00:33:40] Yes, yes. We fully separate one level. It’s got its own patio and its own little garden. I kind of fenced off the backyard. So it’s probably I think it’s 650 square feet and then it’s probably got about a 100 square foot outdoor patio living area with a door off the bedroom and off the living room, kind of patio doors onto there. And then a little front entrance way. That’s probably another 100 square feet. So it’s completely self-contained. It’s essentially your own mini house.
The Mechanic [00:34:08] You’ve got private access off the side of the corner. A lot for that, too.
The Accountant [00:34:12] Yeah, it’s its own private access, so they don’t have to access it through the other house on the property or anything like that.
Erwin Szeto [00:34:19] Is this only available to car lots or.
The Accountant [00:34:21] No, you’re allowed. It’s based on lot size and lot coverage in Victoria generally.
The Mechanic [00:34:27] And we access as well as is just out of the side of the lot.
The Accountant [00:34:30] It’s just about the size of the lot. So if you have a standard mid-block lot, then it has to be set so that it can be seen from the front of the house. So it has to be offset and can’t be completely buried behind the main house. But you are allowed to do that.
The Mechanic [00:34:45] Okay.
Erwin Szeto [00:34:45] Well, the lot size has to be, you know, like a 50 by 120 type lot size that’s required.
The Accountant [00:34:50] I think it has to be over 6000 square feet. But don’t quote me on that. I forget what I was. It’s been a while since I did the whole plans and drying up of everything. But somewhere along those lines.
Erwin Szeto [00:35:03] Got it. Got it. We’re all keen on the subject here in Ontario because it hasn’t quite come yet. It’s in battle up in Barrie, Ontario, where they were allowing it. Now they’re back and forth on what they will allow.
The Mechanic [00:35:15] Yeah, a.
Erwin Szeto [00:35:16] Friend of mine told me that they wanted at least three meter set back from the lot line for the. Yeah, that’s crazy.
The Accountant [00:35:23] Yeah, it’s crazy. Well, and the other. So I’m in Victoria proper, but in Greater Victoria there’s a district called Santa that allows it. But in Santa, you have to sign an affidavit saying you’re living on the property in order to build it. And anybody else that’s like, then you go resell the property or the only way you’re allowed to have the garden suite is if you live on the property. So you’ve taken investors out of ever owning that property, right? So I don’t know what they’re doing there, but it doesn’t seem like a good move.
Erwin Szeto [00:35:51] So you don’t have housing supply issues right in Victoria?
The Accountant [00:35:53] No, of course not. It’s not like we’re out of land or anything because we’re on an island here.
Erwin Szeto [00:35:58] But this place is just magically going up because there’s no supply issue.
The Accountant [00:36:02] Precisely.
The Mechanic [00:36:03] Got it. Exactly what I was going to ask you, because it sounds like the same issues out there. It comes down that we all can recognize that there is a housing issue. Right. And that by providing smaller, affordable housing, especially close to downtown areas, makes sense because there’s all these legacy lots that are huge that can be reached on, but you can’t. How long did it take you to go through and get the paperwork approval to get this done? It sounds like it’s the same problems that you have out there.
Erwin Szeto [00:36:26] Oh, it’s worse here. You’re done.
The Mechanic [00:36:28] Here.
Erwin Szeto [00:36:31] Accountant. How long did it take you?
The Accountant [00:36:33] Like it was a year and a half with the city. Almost two years to get a building permit.
The Mechanic [00:36:40] Crazy. Like, I just I’m speechless.
The Accountant [00:36:44] I eventually went in during, like, February of COVID or maybe the start of March of COVID and, like, wouldn’t leave City Hall until I got to talk to somebody about the building permit. And it finally came down to that. They wanted me to move the water box where I had the new waterline coming in like a foot to the right. Like, you couldn’t just told me that, like, a year ago. Like, I don’t care. Why did it get held up for this long? No one could bother telling me this.
Erwin Szeto [00:37:12] Extensively discussed on the show and all the challenges and just doing anything, getting anything done with our local governments.
The Mechanic [00:37:18] Yeah. Yeah. We’re going through the headache now. We’ve been looking into getting a manufacturing license for brewing beer if we’re going to start our own brewery and the hopes and the hurdles and the things to get that done like a count. You’ve been looking into it a little deeper than I have, but you’re like, you’re at least a year out. Like, how do we start small business and trade business in Canada when we’re just faced with these roadblocks and it seems to be in the real estate sector as well as in small business, it’s difficult. You know, policy is difficult to navigate.
Erwin Szeto [00:37:46] Sorry. Is your plan to, like, build a brewery and actually start selling beer? Yeah. Like a true small business, like the serious income that you guys can potentially. Declare an income stream.
The Mechanic [00:37:59] Yeah, well, we’ve been shopping for real estate for quite a while. Right. We both on a private instance, they kind of have some doors and I have got some other investments, but we’ve been actively looking for commercial space and industrial space. And as you know and your listeners will know, it’s super hard to find. It’s hard to make the numbers work and stuff getting snapped up. And you’re like, How does that multiple make sense? So the account and I, we’re struggling because we can’t find what we want close enough to our homes in Victoria to make it a hobby business. Let’s be honest, we’re not trying to be at the new Phillips Brewery or anything like that, but it’s been a struggle because for us it makes more sense to own our own building and develop it and then have portions that are rented out for other commercial use or industrial use. But it’s just it’s just impossible to find. So, you know, we’re constantly looking at least rates and account. You’ve been doing all the work on that, and it’s hard to make the numbers work from that perspective as well. So, you know, it’s the brewery idea is just something we’re passionate about that we can turn into a business enough to just support ourselves. But the property’s really what we’re driving to get the underlying right. Yeah.
Erwin Szeto [00:39:04] I saw the headline yesterday quote me on it, but it isn’t called may I just yesterday I start today is November 11th. Darko saying how Montreal office space is actually back to pre-pandemic levels is that even though commercial vacancy is has to increase, it’s like 13%. So I’m talking to prices right out of the space because it’s just been dragged up with all the other real estate that’s gone up in value. Yeah. It sounds like you guys are experiencing the same thing.
The Accountant [00:39:32] Well, and especially for us, like, it’s such a zoning issue of, oh, this particular building is only allowed to have like a flower shop in the bottom and the second floor has to be offices. And you couldn’t convert that to anything else. And any of the decent buildings don’t even hit market in Victoria. Like you all see things where I’m like, that building just sold like something new is going in there and you talk to people and like, Oh yeah, that was sold months ago. It just didn’t hit market because there’s no supply whatsoever of mixed use or commercial or anything like that here.
Erwin Szeto [00:40:06] Actually, for the listeners benefit, that’s actually very common and a lot of real estate, a lot of bigger transaction properties. They don’t go to the public market. They’re what we call pocket deals. So often whoever is selling the property knows someone who is looking to buy it could be the seller themselves or it could be the agent that’s doing it. So again, that never it doesn’t see that not many, not many people to see it or they’re specific and who they shop it to.
The Mechanic [00:40:34] Yeah.
Erwin Szeto [00:40:35] So I have a question for you guys because you guys are some doing pretty well for yourself. But if you could do it all over again, what would you do differently?
The Mechanic [00:40:44] I would have used other people’s money sooner. I mean, it’s such a cliche thing to say that for sure. But, you know, my mindset was more of a scarcity mindset from my upbringing. So I was very, very debt averse. I didn’t understand how you can use leverage to benefit, to make deals, to get ahead. So it took me a long time to get to that stage. So if I could go back and tell my younger self, it would be, you know, like we talked a little bit about thinking, let’s learn how to use leverage and get started with it and have a long term plan.
Erwin Szeto [00:41:17] So our mechanic, when you see you see other people’s money, is that other private investors or is that the bank?
The Mechanic [00:41:23] You know, either way. Right. You know, for me, it was, you know, I use my block for leveraged investments in real estate. But yeah, I think if I had learned how to be the working partner in real estate deals, I just didn’t know that side of the business at all. I didn’t realize that I could be that. You know, I’m a very handy person. I’m a helicopter mechanic, so I would have been good at being the working partner to help guide renovations. I do all the work on my own house and things like that. I just know it was an opportunity for me back then. So you know, that would be using an investor’s money or in fact the account and I because we were looking at small businesses, you realize that the small business Bank of Canada is open. If you have a good business plan and you can present to them, you know, reasonable financials and, you know, things like that. So I just didn’t know enough and I didn’t know that there was ways to borrow money and put that money to work.
Erwin Szeto [00:42:12] Know BTC is giving us extremely favorable terms. We just bought more office space.
The Mechanic [00:42:16] That’s nice.
Erwin Szeto [00:42:17] Anything you can get from experience.
The Accountant [00:42:20] I had no way to get.
Erwin Szeto [00:42:22] Around it.
The Accountant [00:42:23] And I had no idea what BBC kind of offered until I think it was a few months ago that we were on a call with them and I was like, If I had known this was an option ten years ago, I probably wouldn’t even have become an account. I would have just started a business. Like they’re willing to provide most of the capital for this stuff.
Erwin Szeto [00:42:40] Yeah. Government.
The Mechanic [00:42:41] Yeah, yeah.
Erwin Szeto [00:42:43] Give credit where credit is due. Yeah. Of their investment is wise us.
The Mechanic [00:42:47] Yeah.
The Accountant [00:42:47] Let’s, let’s hope so.
Erwin Szeto [00:42:49] But the taxpayers benefit. Sorry. What else? What would you do different besides joining the BBC for money first?
The Accountant [00:42:58] You know, I think I would have just taken a little more risk, to be honest. I’ve kicked myself. There’s so many buildings that I looked at and I thought about buying and I hesitated and I didn’t pull the trigger or I didn’t make offers because I hadn’t fully figured out where I was going to get the money for it from. And a bunch of these buildings. Now I look at it like I could have got them for a third of what they’re worth now and the cash flow off of them. I mean, there’s one right by the triplex that I purchased and it’s a seven plex. And before I bought that house, it was for sale for like $500,000. And I kind of I was like, Oh, I’ll have to do a bunch of work. And I was like, I thought of all the things that could go wrong, and I didn’t make a move and that would be cash flowing my ten grand a month right now if I’d bought it. So I think the biggest lesson is just at some point you can overanalyze and I think you just gotta make moves and you got to learn and you’re going to take your lumps sometimes, but you got to push forward.
Erwin Szeto [00:44:02] Something I don’t tell my beginner investors, but it’s kind of a lesson learned and how I’ve seen so many people successful. You need a little bit of ignorance.
The Accountant [00:44:09] It’s absolutely. Absolutely. I think a little bit of ignorance is key.
The Mechanic [00:44:14] And then.
Erwin Szeto [00:44:15] A lot of faith in yourself that you’ll get it done. That’s a highly common trait among many super successful investors. I know. Like mechanic, just because you’re a mechanic, a good friend of mine, Ryan car is like the car. He is a mechanic also. He actually worked on armor vehicles, though, but he’s one of more successful real estate investors. I know. So you start watching YouTube, figuring out how to fix stuff in houses, start fixing up houses, flipping, and now he does big stuff.
The Mechanic [00:44:41] Yes, yes. Yeah. That’s fantastic. And you know, honestly, you know, your show, our podcast, YouTube in general, there’s so much information out there these days that if anybody has the interest, you can go and learn like and you can network. Networking is the best thing to do, right? We know that from all of us and the communities that you build locally and nationally, too. Right now we don’t hear as much about the Ontario market, but I was doing a lot of research there with Rachel Oliver and getting into Rent to Own Right. I know you’ve had her on the show as well, and it’s just I think it’s just broadening your network. And like you said, your friend, a mechanic, he just got in the right circle and network with the right people. Right.
Erwin Szeto [00:45:19] Be hustled hard.
The Mechanic [00:45:21] Yeah. Yeah.
Erwin Szeto [00:45:22] So, Ashley Mechanic, you were talking about some passive deals. Can you share some details around it and maybe some numbers as well?
The Mechanic [00:45:29] Yeah, it’s a bit of a sensitive topic right now and I, I just want to be careful how I speak to it because there’s some ongoing issues with it right now. So but basically it was the Epic Alliance, which is based in Saskatchewan, in Saskatoon. And they offered a they call it their hassle free landlord program. So it worked well for me because what they offered was a 15% return on your down payment. So you own the house? I own the house. I have two doors that are split level and I sublet it to them. They are my tenant, but they manage the property for me. So it was a good deal for me because it’s a straight cash flow deal. The 15% on that down payment and I’m very happy with it. It’s been fantastic. I get paid every month. I pay the basic, the usual bills that every landlord pays the insurance, the property taxes and the mortgage. And it’s very hassle free for me, which is exactly what I wanted. And the initial purchase price was 400 K, so I was in the right ballpark for me with what I was going to invest. I used to leverage money as the down payment, so that’s another level of risk for me. But it was worth it to arbitrage what my cost of borrowing is on that. So that’s kind of been the passive deal for me for the last eight or nine months, and I’ve been very happy with it.
Erwin Szeto [00:46:50] Excellent. Is this something you’d recommend to others?
The Mechanic [00:46:53] Well, that’s where I. I have to be careful how I speak to it, because I’ve I talked about it on our podcast before. And at the moment, because of some of the issues that they’re dealing with, I just don’t want to make a recommendation either way. I’ve been very happy with it, but that’s where I’m going to leave it.
Erwin Szeto [00:47:08] Got it. Got it. So that’s actually what you want to do, tubes. And you guys are actually just talking about ADI Investments.
The Mechanic [00:47:15] I’m glad you brought that up. I’d like to.
Erwin Szeto [00:47:17] Just have Steven on the show. It’s been brought up to me recently. I don’t know much about it. It sounds fantastic from a high level. Again, I don’t know anything about it. I don’t have any money in it. I haven’t gone further into it.
The Mechanic [00:47:29] It’s funny you ask that because I do have money on that. And no, I don’t bring it up as an investment because anybody who listens to our podcast knows that account and I kind of dabble in a lot of little things, right? So, you know, I don’t consider the small bets. I don’t consider it a 0 property investment, an ADI, like a real investment and not to overshadow the assets money. And that’s important, but it’s not going to move the needle in the long run, you know, because we are involved in all sorts of investing. We enjoy it. And for me, it’s like a I don’t know, it’s being involved and having a small amount of money in there helps me pay attention. It helps me stay on top of what’s happening in Canada. So there’s Adi, but also in your neighborhood there’s Buy Property, which is a very similar type of structure right there, trying to do fractional real estate in Canada. And it’s an interesting topic because the account and I am the economist, we’ve talked about this a lot because we’ve seen it be successful in the U.S. and we’ve also seen it fail in the US. But the problem is their market is just such a bigger scale that it kind of makes sense and their property values, they can get some super cheap property values in some of their secondary and tertiary markets. Right? Whereas in Canada, we’re looking at these primary, even secondary markets to divide up these properties that make fractional real estate real. You can’t get a secondary market for these shares, right? Like you’ve got a fractional share, but you can’t do anything by that. You’re just you’re stuck holding it, which is fine. If you’re in long term just for appreciation, then it’s okay, right. The thing with Audi, so I’ve got three properties with them. I was in on the initial deal, which was a Trout Lake property at East Vancouver. Right. I don’t have anything bad to say about Audi, but I was recently actually having a long sort of like text chat with their support and I said, haven’t seen a lot of updates on this property recently. And you know, one of the things that concerns me is that they’ve started charging an annual fee. Right, which they didn’t used to. So it’s only $25, which really isn’t the issue to me. The issue is that they only allow you to have a $500 investment now. So the pitch is that they’re bringing real estate to the masses for as little as $1 per share of the limited corporation. Right. Well, that’s fine. But unless you’re investing, you know what, call it $5,000. So you’ve got to be in ten properties at 500 each. Before that $25 actually makes sense from a management fee type perspective, right? So that’s one of my issues that I have with it. And then the other thing too is that I’ve had a house in Vancouver for the last three years and I haven’t seen any appreciation. How is that possible? Well, exactly. You got it. I we’ve talked about this a lot, so you go ahead.
The Accountant [00:50:04] Yeah. So I I’ve been known to say some controversial things, so I’ll just throw stuff out there. This is always my opinion. But I tried to do this before Adi had made Adi. I wanted to bring the same concept and I could not make the numbers work in any way, shape or form in which either the investors didn’t make money or the company didn’t make money. I could not make both groups make money, and I don’t see a way where if I’m letting you buy into this property for a dollar, what are the administrative fees on that dollar? It’s going to cost money. You’re going to have to have astronomical returns from your property in order for both the company of ADI to make money and your individual investors to make money. And I don’t think this is one of those scenarios. I know the Trout Lake property. I know what they’re trying to do. I’ve based out numbers on what they’re trying to do, and I don’t see any situation in which both ADI and their investors are going to make money off of it.
The Mechanic [00:51:03] Yeah, don’t take us the wrong way. We’re not trying to, you know, speak badly about Adi. We love this idea. We love the idea of fractional real estate. We don’t really deep into it. I think it’s something that eventually will make sense when there’s a secondary market for your shares of real estate. But at the moment I would just why not just be in a publicly traded re it’s way more transparent. You know all the numbers you’re getting a broad diversification of properties like it just makes more sense for me right now.
The Accountant [00:51:28] And I don’t see with our regulatory environment how fractional real estate in Canada works right now. I hope that that changes because I think it’s something I mean, my original idea was, you know, people are complaining about not being able to afford rent and not being able to afford properties. Well, what if as a landlord you can sell off portions of your property to your tenants and now they’re vested in that property and they’ve got a reason to stay and they’ve got a reason to take care of it. I mean, I think it could serve a lot of purposes in helping my stuff, but I don’t see on some of those development properties how like I think the administrative fees from having that many different people into a project are just going to outweigh the advantages of it.
Erwin Szeto [00:52:06] Frank had Stephen Jagger on the show just last week. I believe they’ve upped the limit to the max, limit to 1500. You mentioned a couple times.
The Mechanic [00:52:13] Okay.
Erwin Szeto [00:52:14] And yeah, we’re early days like this is this is so early. Yeah, well, someone sent me a realtor dossier, a link to a listing or real estate listing. It was for 30 $200 for a condo in downtown Toronto. What you’re buying is a fractional ownership of 2.5% of the condo.
The Mechanic [00:52:32] Right.
Erwin Szeto [00:52:34] Like, okay. Has like you’re talking about registration fees or the administration fees for this. So yeah, we’re early days. I can’t claim to understand it. We’re early days.
The Mechanic [00:52:46] Yeah.
The Accountant [00:52:47] I think it’s got a long way to go before it’s going to be both beneficial for the company and the investor involved.
Erwin Szeto [00:52:52] Right. And like you said, regulation, administration costs, like there’s lawyers, there’s transactional costs, like, yeah, I don’t I can’t claim to understand it and I’ll talk about it. But anyone but you.
The Accountant [00:53:01] Know, and that’s the thing, maybe I’m maybe they figured out the things that I couldn’t figure out. But that’s I just don’t get with all those administration fees how you make it work.
Erwin Szeto [00:53:10] Mm hmm. Because I always worry about customer service levels as well. Like, I personally could pay for service. Yeah. And just to hear, like, the, for example, basically, you know, as the end consumer, the service looks great as an Amazon customer, but they have so many complaints among their employees.
The Mechanic [00:53:25] So yeah, yeah. Well, one of the things too that as we said, we think it’s a, you know, has potential early days, as you said earlier. But it lures people in that don’t really understand anything about real estate. And they’re using a lot of as with a lot of investments, they’re using historical data. They’re saying, hey, we’re seeing 40% appreciation. And the Hamilton area, that’s where we’re buying properties. You can buy a property for 25 by and for 20 $500, and your expected returns are like, you know, it’s the same in anything, right? Your expected returns are X. So people are going, Oh, honey, we don’t know anything about real estate, but look, we can get 40% returns for $25 and it’s like, well, of course we’re going to get into that. But there just there’s not enough education yet, an understanding, like you said, of what the underlying is and how it works.
Erwin Szeto [00:54:13] Yep. Folks get educated.
The Mechanic [00:54:15] Yeah.
Erwin Szeto [00:54:16] But I feel bad about seeing that little healthy bit of ignorance.
The Mechanic [00:54:20] Yes. With this whole.
Erwin Szeto [00:54:24] NFT thing, I’m just like.
The Mechanic [00:54:25] I have to have it. Hey, we minted our own NFT. I can tell you one.
Erwin Szeto [00:54:31] Yeah, that chalkboard drawing and behind each NFT that we.
The Mechanic [00:54:34] Took, that’s, that’s my wife that did that. Yeah. She actually minted a little NFT, but yeah, we went down the whole NFT. I’ve been trying to buy an NBA top shot NFT for, like, months. It’s like, impossible. We had a guest on our show, Courtney Steven, his ex-Hamilton player, and, and he was talking about we talk a lot about crypto and nfts and he got me on to this NBA top shots thing and I’ve been trying to buy one because they’re selling for ridiculous amounts, but it’s totally speculative. That’s fun. Yeah, the call back.
Erwin Szeto [00:54:58] It’s fun. It’s fun. And what else is fun? Going to the casino.
The Mechanic [00:55:02] Right? Yeah.
Erwin Szeto [00:55:03] Can we know what kind of investments those are exactly. Yeah. And to me for the listeners benefit, my understanding of the NFT is these are collectors. Think of these people as being collectors. Exactly. Yes. You can buy the Mona Lisa today and it could be worth more tomorrow. But again, you’re speculating.
The Accountant [00:55:17] Right? Well, my entire perception of the whole crypto NFT blockchain thing is like where early days of the Internet, like something useful is going to come out of this. And I’ve been trying to do a lot of reading and paying attention to it, and it sounds like a lot of this technology has very usable stuff. Behind it. But I don’t think we’re anywhere close to knowing what I mean. You didn’t know that Amazon was going to be Amazon. We don’t know which one of these programs or technologies is going to be the thing that wins. And I’m not smart enough to figure that out. So I’ll gamble a little.
The Mechanic [00:55:50] Bit about that. Well, you know, we can close the loop a little bit here, because it’s interesting that you brought up NAFTA, because I count you and I have talked about this before, and this ties into the fractional real estate as well as could NAFTA become. These are contracts that we use for fractional real estate.
Erwin Szeto [00:56:06] I think it’s totally possible. It’s a scam. What’s the secondary market look like?
The Mechanic [00:56:10] But that’s the thing with blockchain technology and nfts. It’s a nonfungible token, right? So your ownership of a property or whatever the NFT is minted as it has a history, it has a sales history. It’s as good as the history you have of the investment property that you are. It’s got potential. Who knows? Mm hmm.
Erwin Szeto [00:56:29] Again, I’m too early into this. It’s just I understand how the secondary market will work in terms of, like, say, I sell shares of one of my investment property. Like, how would I market that to you guys? Right. It’d be a long process to explain to you what’s on the streets, because these schools, because these do the shopping, because of the highway, take forever for like a $500 transaction.
The Mechanic [00:56:50] Yeah.
Erwin Szeto [00:56:51] It’s like we’re talking the same problems that you have.
The Mechanic [00:56:54] This is all about it’s all about the secondary market and how that’s presented. And as the account brought up, it’s just, you know, it’s difficult. We just face the hurdles that somebody will overcome eventually. And it’ll be interesting to, you know, sort of stay in touch with it all. That’s what we try and do. That’s why we dabble in so many different things because it’s just so interesting what’s going on.
The Accountant [00:57:13] That’s why you own one of everything.
The Mechanic [00:57:15] That’s the running joke. I own one of every single crypto thousands of them. Yeah. It just go into my wallet every day and I’m like, I’m doing $1. That’s. No, I don’t.
Erwin Szeto [00:57:28] But seriously, do you guys actually have any significant investment in cryptocurrency anywhere? Mining, Etherium Anything?
The Mechanic [00:57:35] Well, okay, so this is an interesting question as well because the account was reticent to start with. It’s like, I’m not doing this crypto thing and we’ve kind of both worked into it a little bit. We have I would say I have a very, very small position in Bitcoin and Ethereum. I’m like less than 1%. I think I’d like to get it to 1% of my portfolio, but I’m kind of working up there. But you mentioned mining and one of the things we are trading options and hot ideas. Yeah, it’s a Canadian company that does mining. So that’s been a cash flow strategy. Is trading options on Hot eight because I like their business model and I like that they have some underlying Bitcoin holdings as part of their market capital.
The Accountant [00:58:12] And I love the 150% implied volatility right now.
The Mechanic [00:58:15] Yes, the IP is off.
The Accountant [00:58:17] The premiums are just glorious.
Erwin Szeto [00:58:19] I’m the same. So for the listeners benefit if you’re not familiar. When we’re talking about volatility, the analogy always go back to insurance, right? They take an individual’s life insurance. If you’re a smoker, you’re obese, you drink five drinks a day and you jump out of helicopters as a living for a living. Right. Your premiums will be really, really high. So it could be 150 implied volatility as an example, versus if you’re an accountant, you walk to work. If you’re a vegan, I don’t know, then you probably pay very, very, very small insurance premiums. Right. So that we’re talking about is pay mine bitcoin. So think of so for the listener doesn’t understand traditional miners or be like gold miners. These people just have computer regs to treat Bitcoin essentially, and that’s their business. So then the underlying is really Bitcoin and that’s what they’re mining for. That’s what they’re manufacturing. And Bitcoin is volatile is crap.
The Mechanic [00:59:16] Yes, it is.
Erwin Szeto [00:59:17] And so what I always tell people is I invest in real estate because it’s not volatile. It’s incredibly boring. Yeah, it’s incredibly stable. So why would I want to hold something that’s incredibly volatile? I’d really get paid premiums on something that’s volatile and make cash flow that way.
The Mechanic [00:59:35] Am I the only one?
The Accountant [00:59:37] No, that’s I completely agree. And I think you make an important point there with like the real estate portion of my portfolio is my foundation. That’s the nice safe foundation. The contracts I’m selling on hot air, like the very nice hot tub on the deck. It’s nice to have, but it’s not structural to the basis of the house for less.
Erwin Szeto [01:00:01] It’s better if it had eight there in Alberta, I believe.
The Mechanic [01:00:06] Ontario, aren’t they?
The Accountant [01:00:08] I think both.
The Mechanic [01:00:09] But maybe both. I’m not sure.
Erwin Szeto [01:00:10] Because they’re getting they’re getting cheap electricity from somewhere. So I thought I have something to do with the resource sector in Alberta. But anyways, Canadian being bitcoin miners, they’re traded in the US. I was traded the US stock. Yeah. Same. Yeah. So, you know, I mean, like 400 bucks in two days, the selling puts.
The Mechanic [01:00:27] Yeah. Same thing we’re selling naked puts, running. We all strategy. If you get exercised, then you just sell covered calls on it, right. Keep it simple. As you said, there’s high implied volatility. So chances are, you know, I think to the accounts point that we’re talking about or even years are and the premiums are fantastic, do they really move the needle at the end of the day, you know, are you trading 3 to 5 contracts? That’s great. You’re making a few hundred dollars this extra cash flow. None of us. The account and I was speaking for us. We’re not throwing around giant amounts of money into this, you know, speculative or volatility plays. It’s enjoyable to keep up with it. There’s money to be made. But as you both said, as like have a core foundation that that you’re not risking money doing with this kind of options.
Erwin Szeto [01:01:12] I would not ever dream of investing what I have in real estate do.
The Accountant [01:01:17] Oh, God, no. Could you imagine.
Erwin Szeto [01:01:19] Bitcoin magic internet money?
The Mechanic [01:01:22] Yeah.
Erwin Szeto [01:01:25] Invest in your home in it. We want the same talking about that. Remember, folks, this is horrible advice.
The Mechanic [01:01:30] Yes. It was never gonna fit. We’re all drinking. How is you. How is your beverage there? But it’s quite.
Erwin Szeto [01:01:34] Nice. Yeah. I mean, I don’t drink often, but.
The Mechanic [01:01:37] You know.
Erwin Szeto [01:01:38] Having you guys on the show without cheers. All right, sorry. Apologies for the listeners who don’t know. You guys are regularly enjoying your alcohol when you guys through your record, your podcast.
The Mechanic [01:01:50] Yes, of course.
Erwin Szeto [01:01:51] So I thought when in Rome, you know, in Zoom.
The Mechanic [01:01:54] Yeah, yeah. Herbal, you know, if you were on the other side of Canada, we would have had you over to the garage for an in person. That would have been great.
The Accountant [01:02:02] Yeah. Next time you’re in Victoria, you can come by the garage and will brew beer and talk real estate or investing or anything.
Erwin Szeto [01:02:08] Is my favorite province of Canada. I apologize to everybody else.
The Mechanic [01:02:13] Yeah. Don’t keep telling people out though, because there’s too many people moving out this way. The islands get a little busy.
The Accountant [01:02:19] The little.
The Mechanic [01:02:21] You.
Erwin Szeto [01:02:21] Know, Canada’s growing 1% per year, right? Yeah. You guys probably get, you know, about at least 10% of that, you know, probably around 40,000, you know, eat more than that. I think you guys probably get somewhere around, of course, 100,000 people in your province a year. Yeah, that’s a lot of people.
The Mechanic [01:02:39] Well.
The Accountant [01:02:40] If we want to circle that back to the whole housing issue, I think the last out I was looking at in 2019, something like 650,000 people immigrated to Canada and we had 200,000 new housing starts. I wonder why we have a housing shortage.
Erwin Szeto [01:02:55] And that’s what I want beginners to understand, because beginners are always like, Well, real estate markets only go one direction up, so it has to come down.
The Mechanic [01:03:02] Right.
Erwin Szeto [01:03:03] Far to come down. We have to have access, supply and none of the band. Yeah, right. So I’m not going to tell people what’s going to be like because I’m not, I don’t know, expert. I have my own understanding of demand, immigration supply and money printing.
The Accountant [01:03:21] You have the money printing.
Erwin Szeto [01:03:23] So you suspect the day if you just look at money supply. So empty money supply. So money supply from the US Federal Reserve. 18 months from the beginning of the pandemic, 18 months later, money supply increased by 33%.
The Accountant [01:03:39] What it seemed at the time of the time.
Erwin Szeto [01:03:42] And then I just threw up a stat Toronto real estate. I purposely chose detached homes, single family, detached homes, because that’s a hard asset, in my opinion. No different than a single detached in greater Vancouver area. Right. That’s hard mastered as you can really get. I’ll bet you guys the same thing. Your prices are probably gone up around 33% over that 18 month period. Yep. So then for the beginner, they have to understand that the real estate really get more expensive. Or do they just need more dollars to buy it?
The Accountant [01:04:11] That’s exactly it. Right. And another really interesting one is if you look back to the early eighties when you were getting a mortgage at 18%, the actual servicing of the debt on your property at 18% interest rates is very similar to today. So the dollar value to buy the house got way more expensive, but your actual payment every month is very similar inflation adjusted interest.
Erwin Szeto [01:04:39] And so we remember your account. You were talking about how you bought your home 5% down for your amortization. Yeah, it’s actually makes sense that the Trudeau government will say, hey, we’re going to try and make housing more affordable. We’re going to go back to 40 year amortization.
The Mechanic [01:04:53] Yeah.
Erwin Szeto [01:04:54] So if that happens, folks, listen to the listener. What do you think real estate prices are going to go? If the monthly payment becomes more affordable, whereas prices are going.
The Mechanic [01:05:03] That way.
Erwin Szeto [01:05:05] For the listeners better for their point of.
The Mechanic [01:05:08] View. Yeah, that’s unanimous, right? Yeah. Yeah.
Erwin Szeto [01:05:13] Right. Because yeah. Again, it comes down to the monthly payments. So super cool. You guys are doing stock options because a lot of real estate investors are actually not a lot of investors who are like not for public markets but not for stocks, anything versus you guys are open minded to it. You guys are actually have significant positions in stocks, ETFs and simply money with the stock options. How did you guys get started in that?
The Mechanic [01:05:37] Well, I think a lot of that comes from, you know, let’s just let me just sort of back up a little bit. Here is about ten years ago that I sort of found the fire community to bring that back into the discussion and the real sort of mindset that surrounded that was building a passive low fee ETF index portfolio. Live below your means. You know, don’t sacrifice, but make sure you’re paying yourself first. You know, the old the old the same story the wealth of wealthy Barbara story but up that savings rate substantially and buying. Yeah and then by investing steadily over time you’re capturing your dollar cost averaging into the market. You’re globally diversified just as we’ve seen, as you mentioned, the increase in property prices. We’ve seen those gains. We’ve been in a, you know, the long the longest bull market ever. But regardless, if you’re invested for a long period of time, you’re going to eventually make money if you stick with it and a high savings rate. So that’s why I ended up with a bigger position in the public markets, just because it made more sense to me. I didn’t have the capital to start off in real estate and as I mentioned, I didn’t know how. So that’s how it sort of been a long play for me the last ten or 12 years, working up towards that with the highest savings rate that we could generate in our in our household.
The Accountant [01:06:56] Yeah, I think for me it was just the, the diversification factor that and I’m, I’m interested in that kind of stuff. Like I like all forms of investing. I like to dabble in a little bit of everything. And I think, you know, property and real estate is great. But I also like having that exposure to when the market goes insane and goes up 20% in a seven month period. I want some exposure to that. And I think it’s also on the flip side of when you need cash, it’s nice to have some money in the market that can be easily liquidated if I need it for some reason. And I think that’s a very I mean, I have HELOCs as well, which I find are a very good source of cash when you need them. But sometimes I like having that money at work, and if I need to pull it, I can pull it. And it just gives me another level of diversification.
Erwin Szeto [01:07:43] Gentleman mechanic account. We’re running out of time. So much appreciate you guys coming on account. You mentioned that you’re leaving your day job soon. Can you give some context behind it? Like, are you living like a balling life you’re in, get off the show and go back to your yacht. Or are you, like living below your means type of thing, like me, a mechanic was just talking about.
The Accountant [01:08:04] I wouldn’t say I’m doing either ends of the spectrum. Like I have a pretty relaxed lifestyle. I like to drink a lot of beer; I have a boat. I like to go fishing on my boat all the time, but at the same time it’s nothing super extravagant. So I definitely always try to spend less than I earn. I’ve always done that. My wife still works right now, so I’m still kind of cheating on that one. I could probably we could probably get away with her not still working, but she still likes her job. But I don’t ever see a day where I’m not earning money. I’m just simply stopping a 9 to 5. And I’m going to take back my time and kind of see where we go from there. Who knows? Maybe the next time you talk to a mechanic and I’ll have a brewery going and I’m sure I’ll be busier than ever.
Erwin Szeto [01:08:49] Quick question on the business of the brewery. What kind of capital investment and do you guys have like a payback in mind and a return?
The Mechanic [01:08:57] This is a hot topic of attention at the moment because, see, I’m the hands on guy, right? I am the money mechanic. I understand how to build things. He is the spreadsheet guy. He is the accountants. So he’s crunching numbers. And I’m like on, you know, we got to do this, you know, you’ve got to weld stainless steel. You know, we got to put in ventilation like. So I think we’re at a little bit of odds at the moment of agreeing. But accounting, you can say what you think our numbers are going to be. And let’s keep in mind that we’re talking small scale here.
The Accountant [01:09:23] We’re talking a very small scale. I’m trying to get an industrial space in an industrial space that a friend is buying for his business. So we’re talking like 40 grand startup costs. Nothing super serious, but we’re talking about a nano brewery producing 250 liter batches. Not your standard, big sized brewery.
Erwin Szeto [01:09:41] Got it. Okay, so really small cake. Got it down.
The Mechanic [01:09:44] Closer to the 100 K number. But, you know, you.
The Accountant [01:09:47] Can’t trust him on numbers.
The Mechanic [01:09:48] Though. Yeah, well, it’s a funny story to end the show here. I know we’re out of time, but so I lean on the account a lot because he is much better at the real estate game than I am. And he did an awesome spreadsheet for me when I was doing some projected costs and I was sharing it with some listeners because we had a common investment that everybody was interested in. So I went and changed the spreadsheet a little bit to because I had to change the numbers. So I sent it out to a bunch of people and the account was on the email and he quickly texted me and said, I trust you to fix the brakes on my truck. You should trust me to build a spreadsheet. Don’t ever change a calculate itself.
The Accountant [01:10:27] He had broken all of my calculation lengths. All of them.
Erwin Szeto [01:10:31] Locked it down.
The Accountant [01:10:32] I know I should. I should have, I should have. I should have known better.
Erwin Szeto [01:10:36] You can’t trust people that are code accountant. Sorry for you. Probably explain on your show, but for my listeners benefit. Are you in the financial industry? Can you touch.
The Accountant [01:10:48] While I’m in public or I’m in private accounting? Like I run a company. I’m the controller of a company at the moment.
The Mechanic [01:10:57] Got it. Okay.
Erwin Szeto [01:10:59] Hopefully people can appreciate why we’re using pseudonyms because.
The Mechanic [01:11:02] Yes. Yeah.
Erwin Szeto [01:11:03] It’s not the first time for the show I’ve asked. Just, you know, they were they’ve already had plans for resignation, but they hadn’t made it public yet. So we can share their names on the show. Totally understandable. I think it’s much more important that your story is shared and what’s working for you, because, you know, you guys have what a lot of people want and you have your freedom, you have your time, you have your health. You know, all these people like waiting till 65, maybe 75.
The Mechanic [01:11:29] To.
Erwin Szeto [01:11:29] Get a slice of what you guys got.
The Mechanic [01:11:31] Yeah, I think it’s you know, it’s never too late to get started. It’s about being consistent, and it’s about being mindful. And one of the things that the account and I and the economist in our show and something that it takes a while to learn to spend on what you value and understand where your money’s going and what you want it to do for you and how you can put it to work. Right. And it’s just been a learning process for us. And we don’t live extravagant lives, as you brought up, but we don’t want for anything either. Right. So for us, it’s about it’s about using our time the way we want to use it. Right? Not necessarily having that big yacht. So.
Erwin Szeto [01:12:04] Super awesome. So I always like to give a portion of the show for my guests to talk about anything they want to share, whatever they want. Any famous quotes you want to share or words you live by? Anything. The stage is yours. The mic is yours.
The Accountant [01:12:19] I would say the most important thing for people in real estate investing, stocks, options, whatever it is you’re doing, is know where you want to get to because all of these are tools and you need different tools to do different jobs. So think mindfully about how you want to design your life and work backwards from there, and you will have great success if you follow that path.
The Mechanic [01:12:43] If you.
Erwin Szeto [01:12:44] Look at the file.
The Mechanic [01:12:44] That he has, he’s never said that to me. I feel so inspired right now; you know? Yeah, I really can’t follow that. I, I was a little bit. You know, it’s, it’s hard being on the stage to make because you put me on the spot a little bit there, but I kind of roll back into what I’ve been learning recently is it’s much more about your psychology. It’s about learning how you think, how you make decisions, how you can make risk adjusted decisions, how you view risk. It’s really about what I’ve come down to, and the books I’m reading recently are trying to get better at understanding myself and how I make decisions. So that’s sort of something that my advice would be for everybody, whether you’re investing in stock markets and real estate and in crypto or whatever, you know yourself. And I think that ties into a little bit of what the accounts that is, is kind of know where you’re going as well. And you need to look and you need to be introspective and need to understand that. And if you have a partner, then you need to be on the same page. You need to be open and have that discussion.
Erwin Szeto [01:13:43] Mechanic. Can you share some book titles that you’re you’ve been reading? Yeah, well, it depends.
The Mechanic [01:13:48] For sure. Yeah. Well, as I mentioned earlier, Annie Dukes is one of my favorites right now. I read Thinking at Bats, which was eye opening for me. Just finished reading Black Swan by someone. The name here. Yep. Yeah. And she written his other book, Antifragile at the moment, which is which is really interesting. I like the way he sort of wraps it in here that a lot of us build things on the bell curve. But we don’t take into account the extremes, you know, the black swan events that the guys house the burnt down. Well, that’s unpredictable. That’s an outlier. Right. So again that wraps back in as is learning yourself like trying to think of we have these unknown unknowns. Right. But how do you weigh that into your decision making process? So those are things I’m digging into right now.
Erwin Szeto [01:14:34] That’s pretty cool cause you guys kind of Ayers Now people don’t go fire in their thirties and forties.
The Mechanic [01:14:42] People are doing that. I think the whole yeah, I think the whole the nice thing. Okay so I’ve always said on our show that fire may or may not happen to you in your thirties, but by learning about it, you’re probably making better financial decisions right away. It’s going to have an impact on your life right away. You may want to retire. You’re 35. But, you know, we said on our show, too, is you need to retire to something, right? You’ll just quit your job one day, walk out the door and be happy because that’s not how it works, is design your life and be happy with who you are, where you’re at and where you’re going. And then work is what it is. Maybe it’s just a vehicle to get you to financial independence, but you need to know what you’re going to do afterwards.
Erwin Szeto [01:15:24] Amazing. Thanks guys, so much for coming on the show and working for people. Follow you Snapchat.
The Mechanic [01:15:30] TikTok stuff. Yeah.
Erwin Szeto [01:15:33] You guys are leading edge so.
The Mechanic [01:15:36] Well, we live the YouTube clips The Economist so you can find us on all the regular podcast channels. It’s free garage. Okay, we have a half assed website because I’m the web designer, but clearly it’s not my specialty. You know, I think we’re most active on Twitter. I think I’m money underscore mechanic, fake garage account. You’re on there too. And so is ecommerce.
The Accountant [01:15:58] Yeah, I’m the at fi underscore accountant and I believe the economist is just the f i garage, but I don’t know if he ever does anything.
The Mechanic [01:16:07] So I know it’s.
The Accountant [01:16:08] True. Throw him under the bus.
The Mechanic [01:16:09] Yeah, he speaks for the whole show, but yet he couldn’t even show up today, so who knows? But he’s. He’s a man of mystery. We like that about him.
Erwin Szeto [01:16:16] He’s a man of freedom, too, apparently.
The Mechanic [01:16:18] Yes.
Erwin Szeto [01:16:20] Gentlemen, thank you again.
The Accountant [01:16:21] Yeah. Thanks for having.
The Mechanic [01:16:22] Us.
Erwin Szeto [01:16:23] Awesome time. Thank you. Thanks so much for doing this. Before you go, if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already and sign up to my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s a much improved demonstration over the one that I gave to my cousin Chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself. I got into real estate for the cash flow, but with the rising costs to operate a rental business, it’s just not the same as it was 5 to 10 years ago when I started. Never forget the cash flow reduces your risk. The more you have, the more limbs you can absorb. And if you have none or limited cash flow, you’re going to be paying out of your pocket like I did on a recent basement flood at my rental in St Catherine’s, Ontario. If you’re interested in learning more, register for free for my newsletter at WDW DOT Truth About Real Estate Investing Dossier into your name and email address on the right side will include in the newsletter when we announce our next Free Stock Hacker demonstration. Find out for yourself with so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell, I love teaching and sharing the stuff.