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Podcast Transcription
Dave Dubeau [00:00:09] Hey, there it’s Dave Dubeau with another episode of the property Profits Real Estate podcast, and today we’ve got a special investor spotlight interview with our friend David Sorel, who is a real estate entrepreneur originally from a very exotic place for us Canadians. He’s originally from Martinique in the Caribbean, and he came to Canada with his lovely wife and their family a number of years ago, settled down in Quebec, first of all, and more recently moved out west to beautiful British Columbia, where he and his family are living in the Okanagan and they are investing in multifamily properties. So David, welcome to the show.
David Sorel [00:00:51] I’m good how about you,
Dave Dubeau [00:00:52] I am fantastic, I’m fantastic. So, David, let’s start back at the beginning. Have you always been interested in real estate as an investment or when did you first kind of? Understand the power of real estate.
David Sorel [00:01:07] So actually, I had some kind of interesting real estate, but it wasn’t my first investment. Well, it’s also the inducement. And finally,
Dave Dubeau [00:01:19] what did you try before you got into real estate? What kind of things did you do?
David Sorel [00:01:23] So for the past 20 years, we’ve been involved in different type of types of business or investments, stock markets. We’ve been business owners and so we’ve learned a lot. But actually what we found is that we know we observe COVID and all that. So we were looking for something more reliable and sustainable as an investment. So what we figured out is that no matter is a crazy soul, you know, you can live without a car, without a job. We can. We were mask and stop socializing. But the fact is that you will always need a house for you and your family. So that’s the reason why we moved to real estate. It’s existence, human beings, appreciation and in your houses will always be an essential need. So we learned from previous experience that to be sustainable as a business, you need to address a Nissan journey so you can never go out of business. That’s why we moved to L.A. city investment.
Dave Dubeau [00:02:27] That makes a lot of sense Dave Dubeau. I mean, you try different things and you try different kinds of investments and stocks and whatnot. But yeah, you’re so right. I mean, it doesn’t really matter what’s going on with the economy. Everybody needs a roof over their head. One of the advantages, I think with what you guys are doing with multifamily properties is that when times are good, people are coming into the area, they need a place to live. So they’re going to be renting an apartment or a suite in a building. And when times are not so good, unfortunately people are having to downsize from their houses, they still need somewhere to live. So they’re probably going to be living in an apartment or something like that. So that’s one of the nice things about multifamily properties is when times are good, it’s good and when times are bad, they can still be good for you as a as a landlord. Is that correct?
David Sorel [00:03:15] Yeah, correct. Exactly. As you mentioned, you know, when times are good, everything is fine, you know, for all kinds of investment. But you know what, actually, when you have bad times, what is fantastic, we realize, is that you are you just get paid for waiting for your investment to increase, to keep up and an increase in value. So that’s really interesting.
Dave Dubeau [00:03:43] Now another thing I want to ask you about because you’ve got experience investing in stocks and other kinds of assets. What is your opinion about real estate from the control point of view? Like, what do you think about real estate as far as how much you can control with this investment versus investing in a stock or bonds or mutual funds?
David Sorel [00:04:06] So what is great with realistic is that we’ve stocks and we say, OK, you have no control at all. You know, it’s there is no there is no year. And I said, it’s just kind of magic numbers. We are. It’s just regarding the you may observe what was their call. So you have no control on the call and the news and all that stuff. We’ve got that we are talking about a real asset. So you have antidrug, which is that, you know, it’s kind of a protection against inflation. And actually, you know, even if it goes down at some point you just fall, you know, and it’s where it will always go back and even increase in value. So this is what is interesting. And as we mentioned before, one of the main thing is about the fact that whatever happened with our long term strategy, even if the market goes down, we will even make more money because the again will go up with more people looking for rental. So that’s why it’s so interesting.
Dave Dubeau [00:05:19] Yeah. I mean, like everything, the real estate market is cyclical. It has ups and downs, but generally, like you said, over time, it’s always going up. There’s a very good hedge against inflation and like you’ve touched upon it; it really is a basic human necessity. And with a good real estate property, you have so much more control over this asset. You might you control what you buy, where you buy it to a certain degree, how you buy it, how much you paid for it. You can negotiate those kind of things. You control what you do with it once you’ve purchased it, who you get in as renters, how you manage the property, how you refinance it or how you what your exit strategies are going to be. So there’s lots of different ways that you can exercise more control over that asset. Yeah, very, very smart. So and I love the fact that, you know, this has been a progression for you because over the last 20 years you’ve tried different things, you’ve been involved in different businesses, you’ve been involved in different investments, and real estate has just really come front and center as the obvious choice for you. So let’s talk a little bit about because there’s all sorts of different ways that people can invest in real estate. I mean, most people, when they think about real estate investing, they think about the HGTV television shows, flip this house and all that kind of stuff. You’re not doing that. You’re focusing on small apartment type buildings. Six. Plex is a Plex as those kind of things. Why do you like that better than other kinds of real estate investing?
David Sorel [00:06:52] So the reason for that is that I have more control with this kind of investment. I can also add multiple sources of income, which is a short term strategy. You know, you have to deal with the market is the market is down. When you are ready to sell, then you are in trouble. And we don’t want to be at risk. We want to have something that is sustainable. And for the long term, we are not shooting for just one shot deal. We want to lust in the business. And what is interesting is that there is there are a lot of benefits like we’ve tax benefits and things like that. So. So it’s a good way to invest our money and keep it safe. So for the long term, you know, actually, I think that people should look at what wealth of wealthy people are doing and when you know, big companies or banks, what are they doing when you put your money in a bank that won’t keep your money because it means that they are losing money? So what they will do is to invest your money in real estate is the banks are taking your money and put it in real estate and for long term because they are buying apartment buildings. So that that’s a good idea of what to look out for as an investment if we go to the bank to ask them to lend you money, even to invest in their stocks. They will laugh at you, but if you go to blow money for or to invest in real estate and malls in apartment building, it’s a no brainer for you for them because there is an intrinsic value, no matter what the market is about or whatever. They know that they will recover that money.
Dave Dubeau [00:08:45] Mm-Hmm. Yeah, the banks are so comfortable investing it in the in the way of mortgages, for sure. No, that makes a lot of sense. Here’s guy I want to ask you because you’ve got a kind of a unique perspective on investing in Canada because you come from another country. You guys are first generation immigrants to Canada, and sometimes people in Canada don’t realize the opportunities that we have. So from a new Canadians perspective, why do you think Canada, especially Western Canada, is such a good place to invest?
David Sorel [00:09:19] So first of all, it is economic systems of the banking system is totally different from Europe. I come from France, so. Yeah, you’ve got your opportunity to refinance your property, so what is interesting in our strategy is that we will buy a property with the potential of to increase their rent and increase their value. So we are both in equity and then we will refinance it, and this will allow us to invest in our portfolio. You cannot do this in Europe. So that’s
Dave Dubeau [00:09:55] fantastic. In Europe, you cannot refinance property.
David Sorel [00:09:59] You cannot. You are just waiting to pay your mortgage down and then you can reinvest when you’ve got that capacity. But you cannot just use the equity that you in your property to reinvest.
Dave Dubeau [00:10:13] So you can’t just sell it to buy something different. If you wanted to do something like that, you’re
David Sorel [00:10:18] not locked in. I didn’t know that. That’s really interesting, you know. And why are we so interested in the market here in B.C., British Columbia and Walgreens? You kind of get it. Partly, it’s just that that market is crazy because everyone wants to come here in Zurich. And again, we’ve got the beaches, we’ve got the mountains forces and everything. We’ve got this new economy that is really diversified. So there is a need for reform Labor, so long as total positive migration and people are getting good wages so they can pay the rent. So you are not struggling with people who cannot afford their rent and more where you know there is a huge deficit in housing more, therefore the rental market. So what happened is that people are living in hotels. So that’s crazy. You know, when we arrived in Canada and it took us 14 months, 14 months to find a house, yeah, we were just renting RV and Airbnb because this was the only option. And so people want to come here. People are coming for formaldehyde. Top people are coming from Vancouver because now they can work, they can work from home, so they want to be in a piece of paradise. And that’s the reason why it’s so interesting. This put a lot of pressure on the market. People cannot afford buying houses, so they are looking for renters. And that’s the reason why we provide them with quality renters. So it’s a win.
Dave Dubeau [00:12:05] Yeah, no, that’s really interesting, I love the perspective as well because, you know, you’ve seen the value of lifestyle choices for where people want to live in. Yeah, you’re right. The Okanagan is kind of Canada’s version of California with the beaches, the skiing, the wineries, the lifestyle type stuff. Yeah, it’s a very, very popular place. So David, what would you say when it comes to real estate investing? What is your competitive advantage or as Robert Kiyosaki calls it, your unfair advantage? What is which kind of David’s Shirelles secret sauce to real estate investing?
David Sorel [00:12:47] So that’s an interesting one. So what we figured out is that buying a house or a condo in, it’s easy, you know, 20000. But real estate investing is not just about finding properties and buying properties, and it’s really about a team. Actually, our strength is about the fact that we built our network. We’ve got a team, strong team of professionals that are, well, reliable and we know about velocity because you can define, you know, actually what is different is that now that we have our network, then people will come to us to offer us properties. And what we figured out is that. I’ve been told about the stresses properties, but actually the market is not about distress, these properties are more distressed lenders. Landlords also use distressed property. The reason for that is that people don’t realize that you need to rely on first home team you need. A strong lawyer will know about it because you need an accountant and knowing about real estate because they are investing in the real estate so they can understand it. And then you can be efficient. This is the difference between people who are failing in real estate and people were having success.
Dave Dubeau [00:14:19] Yeah, it’s all about the team. Yeah, very, very well, said David. So. Now, here’s a question for you. Do you think real estate investing is for everyone? I mean, obviously you’re a big fan. I’m a big fan of real estate. But do you think everybody should be investing in real estate?
David Sorel [00:14:37] If you need to be in lots? Years old, that is that, you know, real estate is real estate investing. It comes with a lot of liabilities. So you’ve got to deal with tenants so you can have a good tenant. But you have to deal also with bad tenants. You have to deal with maintenance. It’s 24-7 liability. So it’s not like you cannot say that today. You want to be quiet and spend good time with your family and not answer a call from a tenant. You know, this doesn’t work. So but you know what, actually, even if it is not for everyone, I think that it’s such a powerful investment that it’s a totally nonsense not to invest in real estate. Moreover, we’ve you know our reality today. So that’s the reason why actually, we built we started our program of assault free listed investing.
Dave Dubeau [00:15:44] Now that makes sense. Real estate, being an active real estate investor is definitely not for everyone. Not everyone is cut out to deal with all the tenants and toilets and termite issues that come with owning a property. However, real estate as an investment vehicle definitely should be considered by ever because you don’t have to be an active investor to invest in real estate. You can partner up with somebody like yourself who’s doing it actively, and you can be more of a passive partner. You can bring finances to the table, and the active partner can do all the work with that. And then you share the Profits and that that makes a lot of sense. So fascinating stuff, David. I appreciate it. I really respect what you and your lovely wife, Krystal have done because it’s not easy coming from another country, another culture, another language moving to a new place, going into business for yourselves, starting to invest, you know, becoming a landlord, doing all of these things. Most Canadians, you know, native born Canadians don’t do this. So the fact that you guys are doing so well with it just speaks volumes to your motivation, to your drive, to your willingness to put in the work. So I congratulate you for that. Thank you. Yeah. All right, David. Well, our time is wrapping up. If people want to find out about more about you and what you’re up to as real estate investing, what should they do?
David Sorel [00:17:08] So you can go to our website, you see cereal, dot com and dot com. You can contact us by email contact. This is well, dot com. Is it busy all by phone? Five one four six two seven nine zero seven one
Dave Dubeau [00:17:29] Perfect. David, thank you so much. It’s been a real pleasure.
David Sorel [00:17:32] Thank you.
Dave Dubeau [00:17:34] All right, everyone, take care and talk to you on the next episode.
David Sorel [00:17:38] Thank you, have a good one.
Dave Dubeau [00:17:40] Well, hey there, thanks for tuning into the property Profits podcast if you’d like this episode. That’s great. Please go ahead and subscribe on iTunes. Give us a good review. That’d be awesome. I appreciate that. And if you’re looking to attract investors and raise capital for your deals, that may invite you to get a complimentary copy of my newest book Right Back There. There it is the money partner formula. Got a PDF version, an investor attraction book dot com again. Investor Attraction Book dot com. Take care.