Table of Contents
Erwin Szeto [00:00:07] Greetings, my fellow wealth hackers. This is the truth about real estate investing show. My name is Erwin Szeto and I trust everyone is doing well. I laugh because. We are locking down an Ontario again or emergency brake, whatever the term is at. I’m recording this on Friday, so at 12 a.m. tonight will be back into I don’t know what it is now. Hey, well, the weather at least is brewing so we can all spend more time outdoors in the sunshine and fresh air. And my family is excited for the central pool opening. I have written me first, but it’s since been revised. Our plan is to have the pool open before quote unquote April break. You know what was known as Marsh Creek. Our pool will be open for April break. I know it’s a bit early, but I read that Japanese blossoms in Japan are in bloom the earliest it’s ever been since 812 year 812. Yes. 812. As in 1200 years ago, this has been the earliest bloom, full bloom of Japanese blossoms in Japan. So maybe global warming is a thing. Fingers crossed for early summer weather. If it doesn’t work out what is currently happening with my indoor peloton bike is arrived paid for with my stock hacking returns. It arrived just last weekend. Who knew home exercise equipment would be so popular? For those who don’t know, I ordered a part time bike in December and it arrived March 27th. So these things are hot commodities. I imagine even more so now, since gyms are required to close for the next month. I’m sure the price of my bike has gone up significantly since I paid for it, but there’s no way I’m selling it. I need to get rid of my own COVID 15, as in the 15 extra pounds I’m carrying around. The new indoor bike is still covered in plastic sitting my new house because the kitchens and bathrooms are still being renovated. Our bathroom is almost done. I’ll post the video to Instagram of the of one of our bathrooms. Hopefully everything will be done by Monday, this coming Monday, as the day the moving truck shows up and we move in. Please wish us luck. I really do not enjoy moving houses. I like my routines with moving houses. You know, you have all the packing organization moving. Plus, we’re moving into a house with less storage space. There’s no shed. There’s no backyard shed. So this isn’t easy. Thankfully, I live in any has done most of my packing. I do love having a nanny. Once in our new house, I’ll have her learn how to use Cherry’s housewarming present. Trager Wood fired barbecue. It’s really a smoker more than a barbecue, which is really more of an oven than a barbecue. But I can’t wait for our name to smoke some salmons and some briskets and some wings. And I can’t wait to entertain friends and family in our new backyard. Speaking to friends and family, if you’d like to be part of more, I’m more of a part of our day to day journey to financial freedom. We are hiring two real estate professionals, coaches and realtors with real estate licenses to join our team to service our wonderful clients in the areas west of Toronto. If you listened to past episodes with my coaches Chris, the Captain, Hook, James, Moneybags, Mags and Timmy the Duplex Queen, and also Team Clapback Hong. Besides getting a cool nickname. They’re all really successful wealth hackers and hopefully being a part of my team has helped them on the journey. For more information go to WW W dot infinity will start CAA slash hiring again this W WW dot infinity wealth dossier slash hiring. Onto this week’s show. This week we have a former Airbnb executive who was responsible for much of Northeast America, North America. So that means a whole large chunk of Canada as well. But he left his dream job to start life at Key, where he is making a difference by making real estate, specifically condos, available to folks with as little as 2.5% down. You heard that right. As little as 2.5% down. And this is not a traditional rent to own investor strategy at all. I’ve never heard anything like this before. So for you, social capitalists like myself, I really hope you enjoy the show. Daniel Dubois shares his journey with his own startup. He had a startup before he joined Airbnb, and he shares how that journey went. His experience at Airbnb. He even has some advice for Airbnb operators because I know some of you on the show are doing that or plans to do so. And then, of course, he explains his newest business, but he is the co-founder, president of Life at Key. This is easily one of my favorite episodes of this year, so please enjoy the show. Oh. Also, before I refer you, I forgot. Daniel will also be our guest speaker April 17th at the Iowa meeting Saturday morning, April 17th, to share how life party works, how democratization of real estate works. In case you know anyone who has trouble getting into the real estate market, this would be a wonderful method opportunity to get into it. Or if you’d like to be able to do something like this on your own. So if you’re already on my email list, it will receive an invite. If you’re not on my email list, just go to any of my websites, put in your name and email me. WWE The Truth About Real Estate Investing Dossier or any of you out that CAA again, put in an email, email address and you’ll be on my email list. You’ll be receiving these invites. All right. Enjoy the show. I know what’s keeping you busy. These days and.
Daniel Dubois [00:05:24] Great to be here.
Erwin Szeto [00:05:25] Thanks for coming. I know you’re busy. My word.
Daniel Dubois [00:05:29] Yeah, I’m trying to. Trying to eat the world here, put a dent in the universe. But, yeah, everyone has the same amount of time. We’re all. We’re all busy these days, but busy and loving it, hopefully. Right.
Erwin Szeto [00:05:38] But you’re doing big scale stuff.
Daniel Dubois [00:05:41] You know what? I feel like there’s not that big of a difference for the level of busyness or hard work that I’m putting in compared to the person running a corner store right now trying to stay alive with COVID. Right. And trying to keep their businesses afloat.
Erwin Szeto [00:05:54] So, yeah.
Daniel Dubois [00:05:55] I firmly believe that to run a coffee shop compared to a running exponential organization, that’s well.
Erwin Szeto [00:06:03] What is.
Daniel Dubois [00:06:05] Similar amount of.
Erwin Szeto [00:06:06] Work. And it’s just like, you know, the bigger the mission.
Daniel Dubois [00:06:11] The bigger the magnet towards talent that actually is attracted to joining you and helping you on your journey. So, you know, compared to my in-laws, run a run a bakery, right? It’s a great bakery. They have incredible food and it’s called battered lingerie in Vancouver. If anyone’s in Vancouver. And it’s great, great spot. They work hard. They work extremely hard to keep the bakery afloat and to do well and all the respect in the world to a small to medium sized business owners. But yeah, I’m grateful for the opportunity to be able to work on something that’s venture backed that we can really swing for the fans. And so there’s no complaints for my level of business. I’m honored to be able to serve in this way.
Erwin Szeto [00:06:55] Before we talk about swinging for the fences, how is your in-laws business doing?
Daniel Dubois [00:06:59] They’re actually doing very well. Yeah, they made some adjustments when COVID hit. They removed the front of the house staff. They limited how many people could work in the back of the house, and they did all online ordering with pickup windows. And the community there on Fraser Street and in Hoover have been super supportive. And they’re actually their numbers are lower than they were in the past, but their profit is higher than ever. They’re actually in a much, much better place because their overhead is so low right now. There’s a finite amount of capacity of how much they can actually produce being in a limited amount of space. And they’re yeah, they’re doing great with how much they’re able to actually create with a small but mighty team and limit their menu selection. Yet you just have a much more dialed process without people coming in and opening up their laptops.
Erwin Szeto [00:07:51] Or working in the space. You know, they just come.
Daniel Dubois [00:07:53] And pick up their bread.
Erwin Szeto [00:07:54] They add up, come back the next.
Daniel Dubois [00:07:56] Day, right? Yeah. They’re doing well. Thanks for asking.
Erwin Szeto [00:07:59] Did you help them with the Internet stuff? Because I understand your go at this stuff. My wife did. Yeah, my wife was definitely they’re very grateful for my wife quickly.
Daniel Dubois [00:08:07] Put together a Shopify store and yeah, it’s, it’s been working really well. That’s it. It’s a really cool concept. It wouldn’t be a great podcast for a different topic, but they actually bought a farm that was just a mud pit on Salt Spring Island, just destroyed. It was a puppy mill.
Erwin Szeto [00:08:23] And the.
Daniel Dubois [00:08:23] Guy was getting a cease and desist on his land. They bought it for $200,000 under land values. Speaking of real estate, Salt Spring Island, everything’s over overvalue, right? There’s always a bidding war. This was about three years ago, so probably doubled in value. Now they’ve completely transformed this ten acre lot and they’re they’ve created a hobby farm for their retirement. They have they have sheep. They have a ton of different they have roosters and chicken and they have a giant dojo on the property. And they’re doing a farm to table style bakery now. So they’re growing. They started a flower company. They started a company. Yeah. It’s really cool. It is a great, great real estate investment. Pre-COVID to get a ten acre self-sustaining farm.
Erwin Szeto [00:09:10] Or 200. Grand for a. Four to take.
Daniel Dubois [00:09:12] A stand or ask under a land value. So it’s about I think they paid like 600 grand and it’s got to be worth like 1.5 at least right now. Maybe two.
Erwin Szeto [00:09:21] So that’s a good investment.
Daniel Dubois [00:09:23] Yeah, not too bad.
Erwin Szeto [00:09:24] Yeah. They’ve, they’ve done extremely.
Daniel Dubois [00:09:25] Well in there and they’re, they’re fixing flip investments in Vancouver, which is a crazy market itself.
Erwin Szeto [00:09:32] Okay. So I assume that you want to help them with the Internet stuff since you’ve you have like everyone knows prior to what your current work is, everyone knows you as one of the Airbnb early folks. Can you can you elaborate on that?
Daniel Dubois [00:09:47] Yeah. I mean, I was I was a big fan of Airbnb for a very long time. My first venture backed company was when I was in college and it was in the sharing economy space before it was even called the sharing economy. It was called collaborative consumption at the time. I wanted to me wanted to figure out how I could learn. And more about this rise of being able to use technology to help people share underutilized assets, whether that be space, whether it be items, whether it be our time and energy. So you’ve seen everything, the rise of Uber and Instacart and so many other sort of gig economy type work. So with my time at Airbnb, actually before joining Airbnb, my time in college, starting a company on the space, I actually went to San Francisco and I interviewed Airbnb when they were just a small startup. And I also interviewed leaders from Google and Facebook and the first ever co-housing work or co-housing spot, and it was called Rainbow Mansion. They had massive employees and everyone was sharing this big house together and they’re paying $750 a month rent each. And the embassy that had a bowling alley. And their house, this beautiful mansion in downtown San Francisco. And you’re paying about 1100 dollars compared to at the time. People are probably paying for a bachelor. 20 $200 in San Francisco. Right, for like a basement suite. So co-housing was at the time just like starting to really bubble up now with the first co-working space at the time, of course, that ecosystem has blown up in many.
Erwin Szeto [00:11:13] Different ways, imploded, as you could say, but at the same.
Daniel Dubois [00:11:16] Time, a lot of momentum.
Erwin Szeto [00:11:18] So it will come back. It will come back. It’ll come.
Daniel Dubois [00:11:21] Back.
Erwin Szeto [00:11:21] After people are sick of working from. Home.
Daniel Dubois [00:11:23] But we were doing decently well even right now with the pandemic. But who knows how true that is? All that to say that Twitter hashtag was invented in the space, but there’s a lot of fun. You know, I was 21 years old. I had someone who helped out as my film crew that I connected off Craigslist. And yeah, it was just from that moment on, this was such a fan of Airbnb. I had someone from Airbnb who joined my advisory board. I met him on a panel in Banff. We’re speaking on a panel together. And the next speaker after us was Steve Wozniak, co-founder of.
Erwin Szeto [00:11:58] Apple. So we had this.
Daniel Dubois [00:12:00] Like the room was just absolutely packed, but not to listen to us, for us to get off the stage, too.
Erwin Szeto [00:12:06] Hear the opening. Act for one of the greats. Yeah, absolutely. Yeah.
Daniel Dubois [00:12:12] Anyways, and it was super grateful for the mentorship and support of a gentleman by the name of Aaron Zipkin, who was on my advisory board. And then I was I had an unsolicited offer, too, for my company to be acquired and went back to a number of different people I was close to. And Aaron told me what about every everybody acquired new. And I started a conversation. I ended up selling to a company called Leave Town, also in the real estate tech world and continued the dialog with Airbnb though and Aaron and a team that I got quite close to and had the opportunity to sell my company to leave town but still join Airbnb and have a pretty fun role with a ton of autonomy and very entrepreneurial and managed different markets. Like I was hired for Western Canada, never managed Western Canada. One did manage some summit Eastern United States and then interior eastern in Atlantic Canada. Really it’s Toronto, Montreal, all the big markets on the Canadian side.
Erwin Szeto [00:13:08] But yeah, it.
Daniel Dubois [00:13:09] Was a ton of fun, one of the fastest growing companies of all time. And I saw firsthand a ton of different forms of real estate investing that we can dove into on this podcast if you’re interested. But everything from the rent arbitrage to the lease to sublease models to buying up trailer parks and stringing white lights and trying to make it on brand experience for tiny homes or your or the bubble hotel models. Yeah, just a lot. And then also just the rise in sort of the property management side where you can manage multiple listings on behalf of others on the air, sorted and Sonder and Domino and the list goes on. So I don’t know how deep your A listener ship is on the short term rental side, but we can go there if you like.
Erwin Szeto [00:14:01] We won’t be here all night. Yeah, it’s going to be a big podcast. First question, Dana, do you know what number of employees were?
Daniel Dubois [00:14:07] No, I don’t know. But I wasn’t there super early. I mean, it was like I think around like 3000 or something like that. So yeah, was in there very early.
Erwin Szeto [00:14:17] What’s it now?
Daniel Dubois [00:14:18] I don’t know. I know that when COVID first hit, they laid off 20 employees or so. I think that was around 25%. I think they were probably around 8000 employees when that happened.
Erwin Szeto [00:14:31] So still pretty early.
Daniel Dubois [00:14:32] But you know what’s crazy? The year before I joined Airbnb, there are shortly before I joined Airbnb, they were ranked the number one place to work in the world by Glassdoor. And then by the time I actually joined and I say in the time I actually joined because I was in conversation.
Erwin Szeto [00:14:48] With them.
Daniel Dubois [00:14:48] For so long.
Erwin Szeto [00:14:49] Leading up to it was they.
Daniel Dubois [00:14:52] Didn’t even make the top 100. And I think the part of that is because they scaled from around 300 employees to about 3000 employees. And that’s a very different company that 3000 employees and 300.
Erwin Szeto [00:15:03] And difficulty. The growing pains. The growing pains.
Daniel Dubois [00:15:07] And but I found it a magical and amazing place to work. I had a ton of fun, but there is definitely growing pains. But Airbnb is such an incredible organization that they were able to move extremely quickly and there is never a rig or never re or that Airbnb is always a redesign. So there’s constantly these redesigns for the company with completely reshuffle. I don’t know. I have probably nine managers while I was at Airbnb. For how many different roles that was. And so and the joke at Airbnb is everyone has four full time jobs. So yeah, I got to me got to see a lot of the business, which was great.
Erwin Szeto [00:15:41] Okay. What are some of the highlights of your experience then?
Daniel Dubois [00:15:44] Oh, I think I think meeting the hosts like just being super and meeting the people that I got to work with, you know, there’s I don’t know how many resumes Airbnb would receive for one film role. Probably 5000. Something ridiculous. I have such a lean company, I tell you that when I was there at Airbnb, there’s maybe 3000 employees globally, but that’s a lot of different sort of support staff and different aspects of the business. There’s four main pillars of Airbnb at the time. There is there is China, there is experiences there. Then Airbnb acquired luxury retreats, the luxury retreats became a part of the business. And then there is a home’s business. So most people when you say Airbnb, you’re talking about the homes business. We are actually only 700 employees. When I was at Airbnb, you can imagine it was value that they closed a financing around $30 billion. So a 700 people managing a $30 billion company. So because that’s just like it’s a lot of fun, right? Like I was I was managing three quarters of all of Canada at 25 years old. So.
Erwin Szeto [00:16:47] And you knew exactly what you’re doing, right? Yeah. And the thing is, Airbnb.
Daniel Dubois [00:16:52] The business works so well that it was hard to take any credit for anything because it felt like monkeys could operate the company. Right. It just felt like there was such consumer pull. People just love the products so much. There’s such a strong brand review for Airbnb to Booking.com. Booking.com, so transactional, right? There are machines, there are, you know, $100 billion company, wildly successful, but still it’s very transactional in nature. Airbnb, it’s aspirational, it’s emotional. You know, it’s something that you want to be a part of. If you go if you went and booked a vacation rental on Booking.com, you tell your friends that you’re staying in an Airbnb rentals. It’s that it’s. That powerful of a brand now. And yeah, it’s like even before joining Airbnb to just follow along on the journey and just see I remember speaking, I spoke all over the place, all around the world on the sharing economy, on the speaking circuit. When I was in college and I remember speaking at different events and I would put on the screen how Airbnb reached 5 million guest arrivals and like this exponential growth curve. I remember the following year speaking on how Airbnb, how last year I showed this slide showing 5 million guest arrivals and now they’re at 10 million guest arrivals that they’re already growing exponentially. And since then, they’ve continued that incredible pace. Right. 10 million guest arrivals. When I joined Airbnb, they were at about 80 million guest arrivals. So I think that’s pretty significant growth from when I was like feeling like I was their biggest ambassador. I would speak at an event and ask how many people knew of Airbnb and no one would put up their hand, right? And then once in a while, one, a few people put up their hands. Then I would start speaking at events and I’d say, How many people have stayed in the air? Maybe traveling for work? No one would put up their hand. I spoke at an event in 2017 at a marketing conference and it was like the entire audience put up their hands. And it’s just amazing to see how much the world has changed. When I left Airbnb in early 2019, Airbnb had around 400 million guest arrivals, and I’m sure today they’re over a billion. So it’s pretty amazing that it was at 5 million guest arrivals. It felt like there are wild home run. You know, it’s just like this incredible platform and their growth is just sustained. There’s no it’s crazy. Their IPO has been amazing to watch and to, you know, participate on the sidelines. And I try not to check the stock too often, but the fact that they’re $100 billion company is like, it’s amazing. It’s crazy. A year when no one would have expected that a year from today, when COVID first hit. Us. You know, 90% of their revenue in two weeks.
Erwin Szeto [00:19:30] It’ll come back. Savings are high and people are dying to travel. Yeah. You know.
Daniel Dubois [00:19:35] This is a once in a century type event, and it’s probably going to be a once in a century type rebound. When it comes to travel.
Erwin Szeto [00:19:43] There’s going to be nuts. Oh, yeah. Did you imagine what Vegas will be like? Oh, yeah. You know, like six months from now. Yeah, I get past. I wonder what.
Daniel Dubois [00:19:54] Vegas is like now. I’m sure there’s like a lot of people that just don’t care.
Erwin Szeto [00:19:57] And I’m sure it’s quiet for versus like, first of all, like everything with all the Airbnbs, all the hotels we packed like you can. Get a room. Yeah, right. But every Sunday night, you still can’t get a room? No. But you were able to participate in Airbnb as well when the when they went initial public offering.
Daniel Dubois [00:20:13] Yeah, I had I had stock options for my time there so I was able to get in and yeah, very grateful for that. And part of the reason that that originally when I started I wanted to keep were OpCo co model. Originally I wanted to be one entity so that not only can I help people get access to homeownership, but they’d also have shares in a venture backed company as if they were getting in early at a company like Airbnb. But what I realized is that would cause brain damage. If people want to own real estate, they don’t want to have to understand the nuances of a. Company and. The growth rate and everything else. So yeah, I was super grateful for, for being able to have that time at Airbnb. If you ask me, this all started with you asking me what is what was my highlight, right? And outside of working with all the incredible people there that were value aligned and value add and just want to contribute to that incredible mission of creating a world where anyone can belong anywhere as being on the other side, working in ops and being able to travel the world. I was on a 300 flights in two years. I was constantly standing, beautiful or unique or maybe dodgy. Airbnb is around the world and I loved it. I just like I was I was a child in that sense. As far as I would say, if there’s ever a unique Airbnb, I would always take that as I would stay in a kibbutz in the Smoky Mountains as an example. Right. Or I just try to find.
Erwin Szeto [00:21:40] That really happened. That literally happened. Yeah, it was amazing. It was a caboose that was that.
Daniel Dubois [00:21:46] Had two bunk beds. So it had four beds in the caboose. It had hot water, a flushing toilet, a shower and a little a little kitchen area on the caboose. So that was a no brainer.
Erwin Szeto [00:21:59] Tall guy. I’m a tall guy. So that’s why we made it work. And if you look at all.
Daniel Dubois [00:22:04] The reviews on this. Caboose, I. Don’t know if you have shown notes. I could probably track down the actual listing and all the reviews.
Erwin Szeto [00:22:10] Are like, My kids love this place. Meanwhile, my wife and me.
Daniel Dubois [00:22:15] Stayed and enjoyed it and we yeah, we’ve stayed in amazing places, especially in the Smoky Mountains. And North Carolina is a pretty special place there is that almost some places it feels like you’re surfing the trees. You know, these homes that are just built above the tree line on top of mountains, and you have all the smoke, all the clouds rolling in and you can’t see any development at all. You wake up in the morning, you just have this massive patio overlooking what looks like a giant rainforest. Yeah, just a different world. And being from Vancouver originally, I’m from mountains and ocean, right. But being able to experience other aspects of that still in North America, like there’s nothing more polarizing than the Vancouver Beach compared to like the Outer Banks. Of North Carolina. Right. But it is this. Yeah. And what you realized is when you travel a time when you’re constantly on the road and especially when you travel outside of North America as well, you realize that we’re all 99% the same. You know, we’re all like you just there’s nothing I want to do more than when I see any form of discrimination in the world. And to just buy someone an Airbnb travel voucher and say just like just go, just go travel, stay with people, break bread with them. And there’s and it’s a great way of just building empathy and broadening your awareness, right?
Erwin Szeto [00:23:35] Yeah. People are less likely to argue over dinner than Facebook. Yes, definitely. Cats are better than dogs.
Erwin Szeto [00:23:46] Okay. So everyone, those who listens to the show likely knows what an Airbnb is to be is, and likely almost all of them ever stayed in one. There’s probably a good percentage who are who have actually tried to operate one. I’ve tried to operate one as well. And that’s one of the cool things about Airbnb is it’s a very accessible side hustle for most because most can just start with, you know, renting out a room in their home or renting out their basement or yeah. And then there’s the people who Airbnb their property for the longest time. Like I live near Toronto where you live in Toronto now, beginning to appreciate like all these condo investors, they couldn’t make them cash flow right. Unless they Airbnb them.
Erwin Szeto [00:24:23] Yeah.Yeah. And then and then these new rules came in place. Yeah. And that makes you. I don’t know if it’s fair to ask you if there’s an, if you can update on where Airbnb is at for City of Toronto or. Yeah, I.
Daniel Dubois [00:24:38] Can update just on the whole for your listeners, as far as the way that regulations typically go is that condo boards regulate. And so depending on where in the world you are, you might call it a kind of water strata running away. And they all pretty much outlaw Airbnb because there’s so much NIMBYism on in a building or for a volunteer board like that, they just feel like, Oh, who are these strangers coming into our building common area where they’re and. For the most part, Airbnb is not done right for individual hosts, right? There’s not necessarily a level of vetting on the guests or 90% of all bad things that happen on Airbnb or one night minimum length of stay. So anyone who runs an Airbnb that wants to protect their unit just have a two night minimum like the stay. You’re less likely to have locals that are going to come in through a one night party. Right? So there’s so many different things you can do, especially you can on Airbnb, you can set it where people can’t book unless they’ve had past reviews on them. Another worst things that happen are not only one night minimum length of stay, but they’re a profile that was created that day. Right. So there’s just there’s a level of oversight that can be done to do Airbnb. Right. And there’s a program called the Friendly Buildings Program that Airbnb has created where they’ll actually work with a condo board. They’ll geo target the address. They’ll make Airbnb be allowed in that building. But part of anyone who wants to Airbnb in that building will now have to follow the rules that the condo board sets. So it might be a three night minimum length of stay. It might be verified government ID for all guests and past reviews on that guest. And then and then there’s a revenue share that goes back from the Airbnb hosts to the actual building to offset common area wherein terrorists actually reduce the condo fees and taxes that people pay. So it actually benefits everyone in the building. So it’s it makes a ton of sense. It’s a win on pretty much every level. But unfortunately, most condo boards don’t know about that program or they’ve already regulated Airbnb, which makes it really difficult to go backwards because you need a large vote. And then the other side of that is principal residents only. So most cities that regulate are moving towards what’s called principle residence only. Some try one host one home, meaning that only one user, one person can have one listing. That doesn’t work as well because you probably have a sister or an uncle profiles that you can manage. So principal resident only is true. Home sharing. It makes sense. It’s still hard to enforce, but that’s what Vancouver has done. That’s what Toronto has done. San Francisco, many other cities around the world. So, yeah, it’s very difficult. And in Toronto, you can’t sign five leases anymore and then Airbnb do them full time. You actually have to live there. Yeah. If we if we have the time and you want to dove into how we think about institutionalizing short term rentals at scale, we have an angle where we control entire buildings to make them all Airbnb friendly. We coordinate with the guests. We coordinate with cleaners. We do everything white glove service for people, for owner residents in our building. And then we do a rev share on the entire booking value without any of the headaches. So people who live in a key building, they just say, I’m going to go, you know, I’m going to be away this weekend. And then they come back and they have more cash in their bank and they can choose if they want to be paid out in cash or if they want to use that money to contribute more equity in their suite. More equity in their suite means they’re paying less rent next month and they have access to cash in that out on time.
Erwin Szeto [00:28:11] This is a great Segway. This is golf cool program. The bigger problem is and we were talking before recording is how are young people supposed to get into real estate? Because I think you both agree it’s probably a decent investment. But, you know, like a condo is, I don’t know, 500 grand these days for a one bedroom. Yeah. So the down payment is 100 grand for 20% down. Actually, it’s on your website. How long does it take for someone to save for a down payment?
Daniel Dubois [00:28:37] In Toronto right now, it’s 21 years and in Vancouver it’s 29 years. So you graduate college and you don’t own an entry level condo until you’re in your mid to late forties. Right.
Erwin Szeto [00:28:49] And that’s the typical living. Yeah.
Daniel Dubois [00:28:53] What about your kids? You know, what.
Erwin Szeto [00:28:54] About your kids? Kids? It’s crazy if.
Daniel Dubois [00:28:57] You’re looking at if you have three teenagers at home, you’re looking at, you know, 1.5 to $2 million and just helping them get into entry level condo, it’s crazy. So just as a Segway there, young people have two options. Not even young people, just people in general. And you’re either buy or you rent. Most people are stuck renting. They’re stuck on the proverbial rental treadmill. Their incomes typically aren’t going up at the same rate as housing prices. So they’re getting further and further out of reach to ever being able to own. Or if you’re lucky enough to get into the housing market, it’s usually from the support of bank mom and dad. You have to have a large enough down payment to get in, and once you get in, you have to maintain a certain lifestyle to service your debt. So now everyone’s house or you’re locked in. Right. So you’re locked in or you’re locked out with key. We’re creating a new model to unlock homeownership. Allow someone to own a home. You’re sooner and for a fraction of the amount. We allow someone to own a home with just $15,000 or 2.5% of the value of their suite, the more equity they own in their suite, the less rent they pay. So they actually have the freedoms and flexibilities of renting. Your month to month. In our model, you short notice and go as if it’s a rental and you can cash out as much or as little as you’d like even while living there. If you receive a five grand bonus or a 20 grand inheritance, you can buy more equity and immediately be paying less rent the next month, or you can sell 20 grand worth of equity and go travel the world like your beautiful background in the Bahamas.
Erwin Szeto [00:30:22] There is zero background or you can.
Daniel Dubois [00:30:25] Sell 20 grand worth of equity and go fund your wedding, right? Hopefully in a place similar to your photo there. So that’s.
Erwin Szeto [00:30:34] Just trying to give Sherry some. Privacy over. Here. I’ll just take off my filter 1/2 and then I need to ask you, like, there’s my wife. She’s actually doing that. Yo People Day right now. Oh, cool. She’s on a podcast as well. No, no, there probably a breakout runs right now for people. to know that. Quick background folks I know Daniel through EO Entrepreneurs Organization, fantastic organization, by the way. So how did he start? Where did you come up with this idea? Because it’s completely off the. Wall that.
Daniel Dubois [00:31:03] It is. It is. I know. And we’ve chatted with people from all around the world. I had calls just today. I’ve had calls with people in Hong Kong and Manila and Europe. And every day as we’re getting this market pool into other areas of the world, the key resonates so deeply in Asia. It resonates so deeply in the Middle East, in South Africa, across Europe. It’s incredible. I had no idea that real estate worked so similarly in just so many different markets. Even the idea of condo compared to apartment buildings like that structure is called different things in different areas of the world. But it’s still in Hong Kong, rather, buying your other building or condo or you’re building an apartment. And the same is true. And in in London, England, they call it going rent or build to sell. Right. So anyway, it’s all expensive.
Erwin Szeto [00:31:51] So people are like, yeah.
Daniel Dubois [00:31:54] It’s so expensive that developers are typically are typically, you know, building as quickly as possible to get their money out because construction costs are so expensive and return that capital to the investors washed their hands from it and move on to the next projects. It’s all this shortsighted development cycles that are typically building for investors, not for owner resident. So we can touch on this. There’s many different aspects, Ticky. It’s hard to necessarily explain just how it came about because there’s so many different aspects of my life and my co-founders life. We came together. I pitched him this idea of democratizing real estate. He told me he’s been thinking about this for over five years and has over $2 billion with a real estate in his pipeline to do something interesting with. So every time I was, you know, as an Airbnb was traveling a ton weekends I was in Toronto, we’d get together and we just start riffing on this idea. What if we thought even bigger than democratizing real estate investing, but actually using investor capital to supplant a conventional mortgage? How can we help realtors that have a missing middle of leads? You know, people that they say drive till you qualify. Or. Come back to me. Once you save up more money to be able to qualify for mortgage, how can we help those real tourists actually empower their leads to own a home? You’re sooner, stay part of the conversation, and then once they’re actually in a better position to own a home, they can qualify with that realtor So we are actually I guess I’ll backpedal for 1/2. When I was at Airbnb, I saw firsthand how regulations were impacting home sharing. So I was the first time I started thinking about principal residence, only I started thinking about how condo boards were outlying Airbnb. I started thinking about what it would look like if we actually had entire buildings that were centered around people who would who would be able to use real estate as a form of freedom and prosperity where they could actually thrive and the units that they live, that they could be part of a community, but they could also have access to home sharing. And on the guest side, if I came through one of those buildings, it’d be pretty nice if I was welcomed in a way that I felt a sense of belonging where there is curated dinner events or my name was brought up in a way that.
Erwin Szeto [00:33:57] You know.
Daniel Dubois [00:33:58] Erwin welcome to Toronto or wherever. Right?
Erwin Szeto [00:34:02] So there’s versus. Yeah. When I was in Vancouver it was like more like you had to operate in secrecy. Oh, yeah, yeah. Me personally, I’m a concierge.
Daniel Dubois [00:34:11] You’re like my friend.
Erwin Szeto [00:34:13] Yeah. For getting my.
Daniel Dubois [00:34:15] Car. I got all the stories.
Erwin Szeto [00:34:16] Get in my car, I will drive into the underground parking and then I’ll take the elevator. Like legend being a woman.
Daniel Dubois [00:34:23] Traveling alone and then having to, like, get into someone’s car to then go into the underground. And it’s happened to two people that I’ve worked with. Right?
Erwin Szeto [00:34:31] So and the instructions are, if anyone asks you live here or you’re visiting your friend. You’re renting, okay, you want to lie.
Daniel Dubois [00:34:39] And then you’re in the elevator and people are looking at you funny.
Erwin Szeto [00:34:42] You know, because you have your luggage, you know. So anyways, that was one.
Daniel Dubois [00:34:47] Aspect of just like was back my mind thinking about the actual travel activated real estate. How can we empower true home sharing another side? My cousin and I started a Laneway housing company when I was 18 years old. We converted garages to small. So I got obsessed from a young age of actually impacting physical space, and we would take alleyways that are pretty ugly and dodgy, and then we convert them into like beautiful communities where you have a thousand square foot home, right? And then the entire community surrounding those alleyways would be transformed. So and just like the amount of creativity that could go into a small space. And that same company that we started together went on to buy land and get it rezoning, went through development applications and development permits and pre-sales and financing. So we now have 198 unit residential development, but all started from this little laneway housing company. So I witnessed firsthand all the time costs and hassles on the developer side. And then part of that was the financing, and it was just so crazy the way that real estate’s currently financed. And for the last ten years, I’ve been building technology companies that have been focused on exponential growth. I’ve been focusing on low customer acquisition cost, high lifetime value, all online to offline businesses. Both my companies were or marketplaces similar to Airbnb is a marketplace. So I started thinking through how technology could impact the space, including the ability to make it super easy for people to invest in real estate. And when I pitched my co-founder, we were both very much aligned around democratizing access to real estate investing, using technology to allow people to take construction risk or to have exposure to condo. But when the light bulb went off, it was really my it was very much centered around the idea of actually, before I tell you about the lightbulb on my side, let me just tell you about a bit on my co-founder story because I think it’s super interesting as far as how this idea was formed. My co-founder is one of the pioneers of SaaS software as a service. In 95, he created the second SAS based company in the world where he was selling software outside of companies firewalls. So everyone’s heads were exploding because at the time you’d buy Microsoft Office for $1,000 and you’d pay $100 to renew every year. And that was your upgrade, right? This annual update. And meanwhile, he’s selling software outside of the company firewalls. Right. He was actually getting people to consume software incrementally. And since then, SAS has taken off like crazy. He took the company public in 98, got on the Nasdaq, had a nice exit. You now have services like us back in the nineties. People are going out and they’re buying a bunch of servers. He’d spent hundreds of thousands, if not millions of dollars on servers to then be able to build a site or a product to try to get it out into the world and validate it. Right. So founders were raising $5 million, diluting themselves right out of the gates, 50% of their company they’d have to give up. Before the dot com bubble just to be able to get off the ground. Now, the pace of innovation has gone up ten X with software as a service with companies like Google Cloud or IWC. And the cost to launch has gone up, have gone down ten X. So it’s just this incredible innovation that we’ve seen, especially over the last ten years because of it. So here’s this software as a service pioneer who then started investing with some high net worth individuals in Toronto. One of them is Anthony Heller, who’s the founder of Plaza Corp, plus, of course, one of the top real estate developers in Toronto. They built 7 billion worth of condos, coincidentally, the condo that I lived in a time when I connected with Rob. So Rob decided to actually formalize a fund with Anthony Heller or some other high net worth individuals. And they decided to start investing in growth stage technology. So they started something called Plaza Ventures. And it was incredible because Rob opened up an office space with Plaza Corp.. So here you have these technology growth stage technology people that are sharing office space with one of the top condo developers in Canada. And then there’s these tech guys that are seeing firsthand all of the hassles that developers go through to be able to sell their products. Ten years ago, when the fund started, a dozen years ago, I should say, about 95% of all product that was being built was being built to end. Consumers own a residence. That is who you were selling to. Fast forward a dozen years about it’s completely flipped. About 95% of the product that we’re building is being sold to investors. About 50% of that is foreign investors. The other 50% is local investors. Right. Including our audience that we have here, which is great capital goes to where capital needs to go. Right. This is the invisible hand. This is the law of economics. So it’s no one’s fault. It’s just a way that the asset class is structured. It’s an incredible place to park money floating. I was talking to a developer in Vancouver who said if you sold 300 units, 295 of them, you’re selling in Asia, right? It’s like it’s that extreme that the foreign and local investment has come for this asset class. And that’s why you see condo units shrinking. More and more. And more.
Erwin Szeto [00:40:06] Right.
Daniel Dubois [00:40:07] So these micro units, so the Rob witnessed firsthand a few different things while being at Plaza. The first one is the way that condos are currently financed, so they’re financed by high net worth individuals. This is one way you can get exposure to real estate investing, right? You can invest into a condo development where you’re taking construction risk. It’s a bunch 100000 to $500000 checks. They typically pay a third party to raise that money. So it’s 2000 phone calls to high net worth individuals. And the percentage of the money that’s raised is taken by this brokerage unit raises the money. And then all that money goes towards one specific development. So it’s not an asset class is one specific building. It’s siloed. Once you’ve raised enough money, you start a pre-sale process, you go out and you launch a brand. You’re paying a lot of money in commissions and opening up a sales office and marketing efforts. So this is the friends of first principles. You have to understand as a real estate investor is super important to understand how this world works. So once you have enough pre-sales, you then take that package and you bring it to the bank. And it’s really hard to unlock construction financing, but you have enough equity and collateral and all this incredible package of this brand that you’ve created with people who have bought into it. And then the bank gives you construction financing. You build as quickly as possible to unlock every tranche of your construction financing until you can unlock your pre-sales who move into the building. Once you unlock your pre-sales, you no longer are involved with the building. You wash your hands from it, and then you return that capital to all the investors. So this is where it gets really important to keep in mind the innovation that we’re creating by restructuring this into a commercial, commercially accessible asset class. If you are the Harvard Endowment Fund, your minimum check size is $100 million, but you can’t own more than 5% of a portfolio. So there is no way for you to have exposure to condo, which is one of the most incredible asset classes there is. I’m sure most people many people on this call has had great wealth creation through condo. There’s no way for these large pools of patient capital to actually invest in condominium because they cannot invest in multifamily apartment buildings for rentals. They can invest in office buildings. They can invest in ports and timberlands and all these other asset classes, but not condo.
Erwin Szeto [00:42:29] So you actually have because it’s because it’s one condo versus one condo, an entire personal pool of office buildings.
Daniel Dubois [00:42:35] And there’s a ton of different developers and all these different cities. And you’re not going to write a couple million dollar check or even a $20 million check on a one building at a time basis and then have to manage all that. You’re going to invest in a consolidation strategy. So for us, our thesis is if we can consolidate $2 billion worth of condo, we can actually unlock long term patient capital. And there’s all.
Erwin Szeto [00:42:58] These big.
Daniel Dubois [00:42:59] Institutional players that are moving towards alternatives. So the Norwegian Sovereign Wealth Fund right now. Is. Moving to 40% alternatives. There’s $400 billion that one fund is looking to deploy into alternatives. It’s crazy, it’s mind boggling to try to understand how much wealth in the world is being managed and wanting exposure. So that’s first and foremost. So we thought if we can actually. Unlock. Large family office and institutional capital to be one single signature on a building that we’re going to say of a developer, you know, ten, 15%, a non-marginal cost. We can receive real estate at a 10 to 15% discount. Yet relatively speaking, developers can make the same amount of money in less time. So that was really interesting and something is percolating in the back of our brains specifically for Rob. He’s a co-founder of a company called Luminex, the largest led retrofitting company in Canada. So it was really hard for him to convince any developer to put in LED lighting because they only run the lights for a year and a half. So if there’s a five year return on investment period, it doesn’t make any sense for a developer to put in LED lights. So you actually put in a crappy product that’s going to end up in a landfill and then then put it on the shoulders of a volunteer condo board to then make the adjustment when they take over management. And that’s just one small example of the misalignment of interest between the developer and the owner operator. Right. There’s no reason for a developer to put in geothermal as an example or to really invest in sustainability. So that was the second thing outside of financing cost. The other thing was just sustainability. And then the third one was the owner of the amount of foreign investors and local investors that were actually impacting that. The local owner residents where that same money could be working alongside owner residents, giving people an incredible way to passively invest in real estate but actually helping people own a home your sooner. And then the fourth aspect was just this this affordability crisis. Right. Young people being locked out. And I would read about it in the news on a daily basis. So anyways, that’s the founding story we got together. We put our heads together.
Erwin Szeto [00:45:12] We started when he paused for a second. That’s incredible. I had no idea. That’s how the front end is. Just a huge part of how this can work.
Daniel Dubois [00:45:22] Yeah, it’s a lot of financial engineering, right?
Erwin Szeto [00:45:25] Yeah, that’s pretty cool.
Daniel Dubois [00:45:28] Yeah. And it really is on. The surface value. Like supposed to work. Yeah. There’s a lot of. Different stakeholders and there’s a lot of different stakeholders. Government, there’s developers, there’s capital partners, there’s the end consumers. And then there’s and then there’s also partners that we work with to be able to manage short term rentals and everything else. So you can think of us as a is a multi-sided marketplace more than just supply and demand, right? There’s a lot of people we interact with.
Erwin Szeto [00:45:57] Interesting.
Daniel Dubois [00:45:58] And I know. Sorry, keep going. This and it’s just like fire the fire hose.
Erwin Szeto [00:46:03] The thing is like what? I’m reading your website, like I don’t get it, but when you when you lay it all out, then like, okay, that makes a lot more sense. If you make the fundraising, if you make the financing easier for the development, then that’s a win for all parties. So for the small investor.
Daniel Dubois [00:46:22] This is actually a win for the small investor though, because now they can have better returns than traditional real estate investing because we raise equity and then corporate debt. So corporate debt is actually of less cost of capital than a conventional mortgage. So we are actually passive investors now can have a better a superior investment in. Real estate well without managing it well, actually making a difference in the world and empowering people to own your sooner. You can make the case for realtors that realtors are better off too, because now you have realtors who without doing any work, they can just refer someone our way. We close someone, we pay them a commission based on closing someone, and we keep their brand front and center. So we even received an investment recently from the National Association of Realtors. So this is the second largest lobby group in the United States, right? Only next to the National Rifle Association.
Erwin Szeto [00:47:18] A lobby group in the US. Their mandate.
Daniel Dubois [00:47:21] They actually can’t invest in anything that isn’t good for realtors. And they see this as an opportunity to actually address the missing middle and help realtors make money, but also help them nurture their lead less, keep their leads warm until they can qualify for homes.
Erwin Szeto [00:47:36] So all sounds too good to be true. Daniel I think that we get that a lot. We get that a lot. How can you make all parties happy? Well, I mean, on the.
Daniel Dubois [00:47:45] One side, I mean, brokers that are that are the people that are helping other people raise money from high net worth individuals.
Erwin Szeto [00:47:54] Yeah.
Daniel Dubois [00:47:54] Look at the 10 to 12% or 10 to 15%, a non-marginal cost that we’re stripping out that savings coming from somewhere. So that’s to some extent, there’s brokers, there’s legal fees, there is sales and marketing costs. So that’s what we’re stripping out. But with a lot more efficiencies. And just to bring it all home and just how much we’ve built here, here’s an example of something that just happened.
Erwin Szeto [00:48:19] Just the other day.
Daniel Dubois [00:48:21] We had a young single mom, a woman of color, who is an Instacart shopper. So she’s a gig worker and she bought a house with Keith, pulled over on the side of the road in 15 minutes on her iPhone with 15 grand. See. Imagine like compare that to the way home ownership currently works. 15 minutes she was able to own a home on her phone. So we built a ton of technology. Now we’ve actually built this fintech layer where we can verify your bank balance, we can verify your income, we can do KYC and AML. We can actually understand your credit history and your type of debt. If it’s credit card debt, if it’s student debt, that’s very different. Virtual walkthroughs and staging, which isn’t anything crazy, but everything that’s done within an apt to be able to go from 15 minutes to then to home ownership where you actually own equity in your suite, you actually have to have true ownership in your suite, but without any of the, you know, the paperwork. So weeks or months of closing.
Erwin Szeto [00:49:22] So, so following this example then. So how is the rest of the property financed then? So the single mom loans. Yeah, go ahead.
Daniel Dubois [00:49:31] So here’s how financing works. We raise large pools of capital as we’ve discussed. So let’s say 40% equity. We then raise corporate debt. So we leverage that equity up another 60%. So now 100% of the real estate that we’re buying is financed by passive investor equity and corporate debt within by an individual unit. Just to make it simple, we allow someone to own a home, which is 2.5%. So let’s call it $15,000 because that’s around average for a condo in Toronto. They can own more than 15,000, right. They can choose to put in 50,000 if they want. And the more equity they own, the less rent they pay. So for us, we don’t care how much people own. Right. If they own more than we can, that.
Erwin Szeto [00:50:18] Equity can be deployed.
Daniel Dubois [00:50:20] Into other real estate. It can be used to service our debt. It can be used to provide liquidity to other equity investors, or it can be used as equity to continue to go out and buy more real estate. If they sell, then the rents go up. Right. So is there actually anyone who lives in our in a unit is receiving a discount to market rent, so maybe they’re only receiving around a couple percent discount to begin with. But the more equity they own, the less rent they pay. So it’s just like it’s analogous to a mortgage really. There’s differences because with a mortgage you’re paying years of upfront, more interest in principle. In our model, it’s a linear line. It’s not a steep interest curve. It’s linear. So if you pay off your mortgage, you don’t pay any financing cost. Your mortgage is paid off. You still have baseline condo fees and taxes. Our models are the exact same. There’s two aspects that make up a monthly rent. One is baseline taxes and condo fees. The other one is financing costs. So you’re receiving a discount on the financing costs all the way to zero. If you own the same amount of equity as your suite is worth, you’re not paying any financing costs. You’re only paying baseline taxes and fees, just like a mortgage that’s been paid off. But what’s nice about our model is it’s completely flexible. Every month you buy up more or you sell down spending on how your life changes. You can set four savings plans where you’re putting $500 extra away every month or one time contributions. And plus, on top of that, even if you decide to put $0 away, you still have a small percentage that’s going to buy more and more equity every month while also receiving a discount to rent. So I make it super simple. If you were to compare traditional home ownership to renting to our new model, financially speaking, you can be the best off with traditional home ownership if you buy and hold a place for a long period of time. So the assumptions there is that you have enough money for a down payment, you have a certain amount of cash flow to then be able to pay down your mortgage rate and you’re okay with the lifestyle that that creates. So that’s one piece. But financially speaking, if you buy and hold for a long period of time, that’s your best investment. Renting. We’re pretty much always a better alternative to renting because you’re receiving a discount to market rent. Plus you have equity in the real estate market. That’s compounding in value with what the real estate market is doing. We can we can be better off than traditional home ownership. If you were to buy a place traditionally and then sell it within a couple of years, a short amount of time, just because of all the buy sell cost. So if we were ever talking to someone and they’re considering traditional homeownership or our model, traditional homeownership makes a ton of sense. If you have the capital and cash flow and security and confidence that you’re going to own the piece of this home for a number of years, then that’s a great route. If you have uncertainty like me, when I moved to Toronto and I hired a realtor and I want to find a place to buy, but I didn’t know how long Toronto home for my bottom would be and sold a year later. Not really getting any further ahead. That’s a perfect use case and really the people that we found that are buying into key are mostly people that don’t have the money saved up for a down payment yet or value their freedom too much to then have to maintain a certain lifestyle service or that.
Erwin Szeto [00:53:36] So to continue with the example of someone who is putting down two and a half percent or 15,000, what would their rent a monthly rent payments be?
Daniel Dubois [00:53:43] So instead of $2,000 a month, maybe they’re paying something closer to 1900.
Erwin Szeto [00:53:48] You know, this doesn’t exist anywhere else.
Daniel Dubois [00:53:51] It doesn’t know. I have chatted with people in every area of the world at this point, and that’s part of the challenge that doesn’t exist anywhere else. But I will say this idea couldn’t have existed five years ago. It’s just the technology wasn’t even built for us to be able to automate so much of what we’re doing. Like we integrate with Plaid as an example, that’s a scraper for banks. So we can actually use existing software to be able to be able to verify people’s income. We integrate with other service providers to be able to do high value transactions, to be able to actually debit someone’s account $15,000 while they’re on their phone. That didn’t exist a number of years ago. So much fintech innovation has happened to allow this business model to exist. And then on top of it, you layer on a number of other things that has changed in the world, such as the affordability crisis used to take four years to save up for a down payment in Toronto. You know, this is this isn’t that new. But it’s. But COVID has fanned the flames. And then and then you can also look at other aspects that have made it just really difficult for this model to exist, you know, ten years ago, including the rise of alternative assets and large pools of patient capital, looking to have exposure in that space.
Erwin Szeto [00:55:06] So even though you’re paying rent, you’re the owner, so no one can move in and then you can move out.
Daniel Dubois [00:55:13] Yeah. Correct. You’re the co-owner. So it’s an it’s a co-owner agreement. You can renovate. And, you know, it really feels like traditional home ownership because it is home ownership. Its principal residence only in our system. So you can’t buy five units and then sublease them or Airbnb them full time. You actually have to live there. And the idea is because we want if people want to invest in real estate soon, they’re going to be able to invest on the same terms as some of the top investors in the world. Right. So you’ll be able to invest in the same terms as a Harvard Endowment fund you might be investing in in the mutual fund trust, if you will. So that’s what we want to get to, is yeah, you want to be a real estate investor. Here’s a much better real estate investment than a conventional route, as an example. Or buying a condo and becoming a landlord and having to manage it all yourself. You want to be an owner resident. Then here’s an opportunity to own a home. You’re sooner, but there’s no opportunity for you to buy multiple. Sublease them and manage them on your own.
Erwin Szeto [00:56:13] Right. Well, you’re trying to help the little person here. We’re trying to we’re.
Daniel Dubois [00:56:17] Trying to be, you know, for the people as we can. We we’re trying to pay for the parent who has a kid that’s graduating college and can actually help.
Erwin Szeto [00:56:26] Them own a home.
Daniel Dubois [00:56:27] Without sacrificing their freedoms. We’re working with Tibetan refugees. We’re working with grade five schoolteachers. We’re working with our first on a resident, a 47 year old who works in tech, who never bought a couch before because he kept renting furnished rentals to eventually own a home. Saving up to own a place like this was like core in his DNA to buy a home. And now he, through one of our partners who bought all his furniture when he moved into his suite earlier this year.
Erwin Szeto [00:56:57] Oh, this is awesome. I don’t know if you feel like the rent to own model as an investment. This is for the for the tenant, for the person gonna live on the property. This is significantly cheaper. Yeah.
Daniel Dubois [00:57:08] The thing is, rent to own models is that there’s, there’s a trigger event where you have to make a decision of do I want to continue to rent or do I want to become an owner? Right. And do I forfeit the money that was going towards me qualifying for a mortgage if I continue to be an owner or do I want to actually qualify for mortgage? All the different. There’s so much popping up right now in the ecosystem. The main difference between what it currently exists and our model is with Key. You can own a home without owning a mortgage, period. There’s no mortgage in our system. There’s never a mortgage. You truly have the freedom. But you know, if you want a mortgage and you want to own a home with maximum leverage, we help you get there your sooner.
Erwin Szeto [00:57:47] This is this is. You hear that. A lot, though. Right? Yeah. I mean, it’s.
Daniel Dubois [00:57:52] Fun, right? It’s so it’s a different strategy that at the very least, it’s intellectually stimulating and people rather get it or else it know or else it can take some time to explain it. I think what we’re working on, how can we explain it as simple as possible without having to get into every aspect of what we’re doing and why? It makes sense. But I mean, most people don’t understand how a mortgage works, right? Like, they do it because that’s the way the world works. And we all we all use this thousand year old debt instrument and call the mortgage. But people don’t even realize that they’re paying more interest and principal of their home until they receive their first statement. Right. Or refinancing or all the different aspects of a mortgage. So hopefully we can get there or we have a brand that’s just built. On trust. People are seeing the success that’s coming from our own residents.
Erwin Szeto [00:58:40] And the.
Daniel Dubois [00:58:41] Quality of their life and the different ways that we can interact and activate the brick and mortar, which is for another podcast.
Erwin Szeto [00:58:48] We can dove.
Daniel Dubois [00:58:48] Into everything we’re doing, layering on top. And we talked a bit about Airbnb. There’s a lot of other services and for unique loyalty programs that we’re rolling out.
Erwin Szeto [00:58:56] But you mentioned earlier, like if you’re one of these owners, you can rent out your space on the week. If you’re not there for the weekend or whatever. If you’re out of town, you’re traveling. Yeah. And it’s just really just, you know, just punched in the app. I’m not here. Rent it out. Yeah, but.
Daniel Dubois [00:59:12] It’s just a revenue share. We clean it, we do safe storage of our personal belongings, if that’s what someone wants, coordinate with the guest. So, you know, it’s concierge that’s going to welcome these people in and create a 21st century experience, you know. So, yeah, an Airbnb is not slang. I brought it up to my ownership at Airbnb when I was still there and want to hear their thoughts on the idea. And they were super supportive. They’re just, you know, they want to continue to think on this idea and track the progress that Airbnb is not going to do this themselves. They work with a company like us that’s bringing it into the world. So. So yeah. If not us, then who? And if not now, then when? It’s definitely not an easy business. There’s been a ton of challenges that we’ve been up against as you.
Erwin Szeto [00:59:59] Just even explaining it to people.
Daniel Dubois [01:00:02] Communications like one of many.
Erwin Szeto [01:00:03] Challenges, right?
Daniel Dubois [01:00:05] There’s an education curve that we have to climb and we have to fund. Right. It’s not going to be cheap to be able to educate government, to educate developers, to educate finance, finance capital partners, to educate the banks and our debt instruments to be able to get on side. Yeah, there’s a lot I think that’s the biggest challenge is the number of stakeholders. It’s not like it’s not like other businesses where you have a very clear idea of who your customer is or who those stakeholders are. And it’s just, you know, like one or two to sort of marketplaces are tough. Like Airbnb is a tough business because it’s two, two different businesses that you have to run the guest side and the host side. For us we have like five.
Erwin Szeto [01:00:49] You know, we have.
Daniel Dubois [01:00:49] Five different aspects of our business that are all equally as important. All two then help the one and consumer. You go to our website and you think we’re just like this direct consumer brand for home ownership. There’s so much more than that. What I will say, if anyone is on listing that has empty, vacant condo suites, this is how we want to grow as a technology company is now that we’ve built all this tech, we can actually make it super easy for someone to attach their suite into our model. We call it home ownership as a service, so we allow people to own a home sooner through the key the key model, and then we provide better returns. And if it was a traditional rental, so your receiving equity, we have debt partners in the background to take up or take down the debt depending on what the owner resident does. We have low cost of debt. We’re working with some really strong capital partners in the background. So that’s how we’ll scale as a technology company will scale from Toronto into 50 to 100 cities around the world where we can work with large developers to buy entire buildings or large blocks of suites or work with asset managers who have traditional apartment buildings. And then we can empower their tenants to become homeowners, and we’ll work with individual real estate investors to allow them to empower their vacant condo suites that a lot of people don’t want to live in right now because of the state of the world with COVID. And we make it super easy. We have way more demand than we have supply. So instead of places sitting empty.
Erwin Szeto [01:02:20] Let’s get a homeowner in there. It’s awesome. So I had. A question and I lost it.
Daniel Dubois [01:02:26] And I know there’s a lot here. I’m curious for feedback from anyone who listened to this. I’m always available, always happy to chat, and really trying to understand the best way to tell our story right now. So yeah, trying to also validate the different assumptions that we have around scaling through other condo developers, asset managers and what we call them, you know, the ones you chooses. So the people who own one or two units or families that own 30 units and how we can just make it an absolute no brainer to attach that inventory to our platform. And we make it super easy with our financial model to understand the return profile of keeping those units as purely rentals or if you attach them on to our platform.
Erwin Szeto [01:03:10] This is fascinating stuff the listeners enjoy because this is so different than the usual. I wonder. I wonder.
Daniel Dubois [01:03:21] There should be some level of.
Erwin Szeto [01:03:22] Like a poll.
Daniel Dubois [01:03:22] Afterwards of rating people’s grasp.
Erwin Szeto [01:03:26] On ours.
Daniel Dubois [01:03:26] Model. Now that we’ve had it through for a while, if it’s like ten would be like I totally get it and I love it.
Erwin Szeto [01:03:32] And one would be like, I have no idea what. Any of that means. Right. But yes.
Daniel Dubois [01:03:38] Soon with earned media, with launching a brand, with people talking about us and word of mouth, it will become a lot easier to understand. We’ve had the Globe and Mail reach out to us a couple of times to do an article. We told them We’re just not ready yet. We have way more demand already, just from word of mouth than supply on our platform. So we have a few milestones that we’re working towards before really opening up. So we’ve been in stealth, you know, pseudo stealth. We have a website and a LinkedIn page that’s about it. So yeah, I’m honored to be on your platform and giving people a bit of a sneak peek before we start to make any noise about what we’re building.
Erwin Szeto [01:04:13] This is my mind blown if because for mortgage people like mortgage professionals and realtors like they should be all over this assuming you have supply. I the question I want to ask is where are your buildings? Where can people.
Daniel Dubois [01:04:27] Yes, they’re all downtown Toronto. Right now we’re talking to astronomy.
Erwin Szeto [01:04:31] You know, the universe. Best place to be.
Daniel Dubois [01:04:34] Some developers in Vancouver right now. And then I spoke to a developer in. Boston today. Looking at a number of markets in the US, Boston. Miami, Seattle. So but right now it’s just Toronto. And we thought it’s better to go with any marketplace. Better to go vertical than it is to go horizontal. So it really prove out that this is a model that deeply resonates to 100 people who absolutely love us. Instead of spreading ourselves too thin and having a thousand people who like are trying to figure out if they like the process or not. So we’re providing white glove service. We’re going over and above. We’re measuring everything our sales cycle from. We’ve had someone to and in a few weeks ago from an Instagram ad and not know anything about us to then move in as an owner, isn’t it? So it’s a. Yeah, it’s unprecedented. We thought our, our sales cycle is incredibly short and, and there’s been a lot of pull into different areas of, of the city, you know, where we’re downtown core, there’s people who want to. Live. In Midtown or uptown. There’s people who want to live in and Kingston or Waterloo. And we even have people that are coming across our website in different countries now, like when are you going. To be in. San Francisco? As an obvious example. But it’s incredible to see people from the Middle East. We have a muslim community that with a religion can’t actually. Hold. A mortgage, it can’t have debt. So we actually provide a mortgage free debt free homeownership solution. So there’s. Just. So many aspects of this that are pretty interesting. So I’m excited for you to follow along, for us to continue the conversation and hopefully give. Your. Listeners a good. Update soon enough.
Erwin Szeto [01:06:27] This is pretty awesome and you should talk to everybody. Charles, you just got approval for a six storey building in Hamilton in Westdale, so it’s near the university. I don’t know if that fits you. Yeah. If it’s anything.
Daniel Dubois [01:06:37] You’d be having these conversations and it’s great to have them early. Well it’s the best time for us to get in is before a developer starts pre-sales and then we can try to take the entire building if it makes sense. But for that we need to find the right capital partner that then wants to come in and, and, and buy the building with us. On the other side of it is, you know, just keeping 10% of your suites carved out and then you can take your exit, you can defer your taxes. So it’s much better from a financial perspective, take some cash off the table. So now you’re just playing with house money and you keep some suites in our model that’s completely managed on our end.
Erwin Szeto [01:07:16] Mm hmm. He’s keeping it as a rental, but. Oh, nice. Yeah. I’ll reach out to see if you must connect. I’m sure they want to connect using the old member as well. Oh, really?
Daniel Dubois [01:07:25] Nice. Yeah. I found that all developers, for the most part, are happy to connect just because it’s so different, you know? It’s just. So. So. Not the way that the world currently works.
Erwin Szeto [01:07:38] And she grab lunch in Toronto.
Daniel Dubois [01:07:42] Yeah, I’d love to. Awesome.
Erwin Szeto [01:07:43] Awesome. Daniel, where can people learn about this? Yeah, like, for example, we have quite a few realtors on this on the show. We have some investors; I’m sure people know some young people that need to be able to get into the market. Where can people follow up or can people learn about this?
Daniel Dubois [01:07:58] So our brand name is key. Key. Why are you Earl in life at key dot com where life at key on all social media channels like Instagram or Twitter or TikTok.
Erwin Szeto [01:08:11] We have someone on our team that’s on TikTok. Yeah.
Daniel Dubois [01:08:16] What else. And my email is Daniel my I keep.
Erwin Szeto [01:08:19] Oh yeah. Yeah we have. A couple we I’ve had complaints from past guests that they still get emails. Are you sure you want to put it out there? People are. They’re happy. Okay. Okay. You’ve been warned.
Daniel Dubois [01:08:31] This is this is my life’s work. So. I’m always available and happy to talk to anyone that that’s aligned and trying to put a dent in the universe and want to help us with the mission of creating world real estate as a source of freedom and prosperity for everyone. So.
Erwin Szeto [01:08:47] Yeah, we got to talk more, man. This is this is awesome. But, you know, as a as a real estate investor, like, it’s great. But, you know, it’s how do I make a bigger dent?
Daniel Dubois [01:08:57] Right now, you know, I appreciate that. And like I. Said, it’s been a crazy, crazy journey trying to get this off the ground. And now we have owner residents living in suites. So it’s March 25th, 2021. Hopefully we can timestamp this. We have our patent pending, which has been a lot of work of actually going through the patent process on this home ownership. And we have some really strong capital partners behind us and top tier of DC is a massive fintech. We’re looking at being able to unlock a lot more supply, and that’s probably going to come from once we’re more public and we’re doing more podcast appearances like this and getting the word out, I think one area that we could have you support. So just in tech, I feel like you always end the conversation of like, how can I help? How can I be of service? So for selfish reasons, how can we help?
Erwin Szeto [01:09:47] Can we help? How can we help more young people get into real estate? Seriously? Yeah. So I think for this anyone. Anyone, not just young people. That we’re always hiring software engineers, of course, and technology companies. So if you notice good software engineers.
Daniel Dubois [01:10:01] But I would I would say. the best. Way that you can help would just be would probably be to get involved and to start learning about our model and being able to refer people our way. We have the past president of the Toronto Real Estate Board who’s full time on our team. Who is Mark McClain? A mark is always happy to take calls, would use a pass when he was the president of the Toronto Real Estate Board. He would be hit up all the time by realtors, and it was really hard to make time to speak to realtors. Now he’s doing it constantly. You know, he’s always talking to realtors around the world or sorry, and specifically in Toronto. So, yeah, he was he was also he brought in Sotheby’s to Canada and him he ran condos today. He was the president of Condos Dossier. So I’d be happy to connect him to anyone on this show that would like to learn more about how we work with realtors. And, and yeah, if there’s anyone that has an audience is anyone that’s actually managing a mailing list. We found that it makes realtors look good to be on the cutting edge of being able to showcase about what we’re doing. So if you’d like to do an email blast to add to your audience, assuming your you’re somewhere in Canada, then we’re happy to do that because our model, the way that we’ve built it, I is going to be able to scale really quickly in Canada and hopefully we’re in the US soon.
Erwin Szeto [01:11:15] Awesome. Yes. I mean, some details. Yeah. Yes. I can’t believe this stuff. And this is crazy. Awesome. Daniel, so sorry for having you keeping you over time. That was awesome. I really enjoyed this. Thanks for doing this. Keep going, man. It’s nice.
Daniel Dubois [01:11:32] Yeah.
Erwin Szeto [01:11:33] You know how bad the problem is? Probably one of the night of the how bad the problem is. It’s a bad problem. Yeah.
Daniel Dubois [01:11:40] It’s. It just impacts so many peoples more than a generational crisis, we would say generational crisis of homeownership. We only say that because there are people who got into homeownership early. Different generations. That is not the same challenge. But it’s more than that now. You know, it’s the new immigrants that are coming to the country. It’s people who have moved or even have sold their place. And now they need to find another way to have a place to live. So, yeah, this this is a massive top three challenge that our society faces right now. It’s ranked second and as a challenge and Toronto and Vancouver by the Vancouver and Toronto Foundation. Number one is loneliness. So hopefully we can help address that as well.
Erwin Szeto [01:12:23] So how can we not have condo.
Daniel Dubois [01:12:25] Buildings where people walk in and then just put their head down and the number two is affordability. So anyways.
Erwin Szeto [01:12:32] It’s a bigger problem than people realize because if you’re a lifelong renter, the probability of the next generation being a lifelong renter is pretty high. Right. And then it never stops for all future generations.
Daniel Dubois [01:12:45] We have a shrinking middle class person. The middle class that we know it is in the history of the world has been a small, little blip that we’ve had such a strong middle class. And most of that middle class was centered around the ability to actually own your home and grow wealth with your home.
Erwin Szeto [01:13:02] Right.
Daniel Dubois [01:13:03] And now we have we’ve had the dynamics change 180%. And it’s just it’s a very different world that we live in now than it was ten years ago and very different world.
Erwin Szeto [01:13:15] That we live in now than.
Daniel Dubois [01:13:17] 13 months ago. Pre-COVID, right?
Erwin Szeto [01:13:21] Yeah. This was this was a.
Daniel Dubois [01:13:22] Lot of fun. I always enjoy our chats, looking forward to grabbing lunch. And like I said, if anyone’s interested in connecting Daniel at life IQ dot com. I don’t discriminate on anyone who’s interested in learning more about what we’re building.
Erwin Szeto [01:13:34] Thank you again for doing this. Keep up the great work. All right.
Daniel Dubois [01:13:38] Thanks so much.
Erwin Szeto [01:13:39] Have a great night.
Daniel Dubois [01:13:40] All right. See everyone.
Erwin Szeto [01:13:41] Thank you. 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, then sign up for 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 the 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 a 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 student rental in St Catherine’s, Ontario. If you’re interested in learning more, register for free from 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 their cash flow. And if you can’t tell, I love teaching and sharing the stuff.