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Podcast Transcription
Dave Dubeau [00:00:09] Hey, everyone, this is Dave Dubeau with another episode of the Property Profits Real Estate podcast today we’ve got an investor spotlight special episode with our friend Dmitri Boundris zooming in all the way from beautiful Stoney Creek, Ontario. Dmitri, how are you doing today?
Demetri Boundris [00:00:26] I’m doing great. I appreciate you having me on the podcast today.
Dave Dubeau [00:00:29] My pleasure, my pleasure. So, Dmitry, you are a very active gentleman when it comes to real estate because you are not only a real estate investor, an active investor yourself, you’re also a realtor. So why don’t you tell us a little bit about your background in general in this wild and wonderful world that we called real estate investing?
Demetri Boundris [00:00:51] Yeah, sure. I’m so I started real estate investing two thousand four, I was twenty four years old, not as aggressive in my twenties, but I invested in single family homes and rentals and duplexes and then my thirties. I kind of moved into multifamily and commercial. So it’s kind of my background of the investing. And yeah, so that was my start to that.
Dave Dubeau [00:01:14] All right. So you went from well, first of all, hats off to you. Most 24 year olds, I know, are not investing in real estate, myself included. I wasn’t that smart when I was twenty four, so you got off to a good early start and then you progressed from single family homes into small multifamily properties and then into larger multifamily properties. Any talk about commercial as well? What does what do that mean to you? What is the difference between multifamily? Because people might have heard of commercial residential real estate and then commercial real estate. What’s the difference?
Demetri Boundris [00:01:48] Well, the type of commercial that that I’ve invested in are generally mixed use buildings, so it may have one or two commercial units and then the additional units are residential. So, for example, I do have one like five Plex, and it’s got to be commercial units and three residential units. So I kind of find those ones. They work well. For me, it just, you know, if there’s a vacancy, a kind of just helps on a residential side, if there’s a commercial vacancy, you know, that’s reason why I kind of like them.
Dave Dubeau [00:02:17] Yeah, definitely. No, that makes a lot of sense. So. If you can remember way back when to 2004, when you first got started to military, what was it that sparked your young mind at that time? The real estate was a good thing to be investing in. Was there anything that really kind of Berkowitz?
Demetri Boundris [00:02:33] So I’d read a book rich dad, poor dad at the time and purple
Dave Dubeau [00:02:37] version right way back.
Demetri Boundris [00:02:38] But you had a fearful person for sure, and it kind of opened my eyes a little bit. And at the time, I just was finishing up college and I saw that people or people were renting student homes and kind of saw the profits are being made, but they were renting them per room. And I kind of thought, Oh, this this, it’s pretty good. And the main reason why to invest in the state was basically for time and have some options in my life. So by making some extra cash flow and having some financial freedom down the road from real estate, I could do what I want my time. And that was the main reason.
Dave Dubeau [00:03:13] Now I make sense. I mean, most people are getting into real estate investing because they want to create some sort of freedom from themselves. They want a great time freedom so they can do what they want when they want, how they want to want to create, you know, financial freedom. So they have to worry about where the next paychecks come in. They want to create perhaps location freedom so they can live where they want. Yeah. So that’s so time. Freedom was really important for you, even at a young age. So yeah, that’s that is great. That’s fantastic. So these days you’re focusing on. Some people would consider it to be larger investments, larger deals, multifamily commercial properties or mixed use residential commercial. Why do you like this strategy? What are what are some of the big benefits of the pros to doing what you’re doing?
Demetri Boundris [00:04:02] The reason why I like it is for like, as I mentioned to you, for a vacancy a while as well as like if I do have, I could, for example, give a single family home if there’s a vacancy. One hundred percent vacancy. But if you have like a four plex and you have one vacant unit at twenty to twenty five percent vacancy, so that’s one of the reasons why I like it, and it produces a little bit more cash flow as well, like economies of scale. So the more units, generally it does do that. So that’s one of the reasons why I do like it.
Dave Dubeau [00:04:31] And so it kind of lowers your risk lowers because yeah, because you’ve got like you said it right, if you’ve got a house that you’re renting, you got one family in the house and they move out. Now you’ve got to find another family, and in the meantime, you’ve got to cover all of those expenses. They’ve got a four plex and one of your family’s moves out. Or you still got three families paying rent until you get somebody else into that vacant unit so it can carry itself. Or at least you’re not going negative on that property.
Demetri Boundris [00:05:01] Yeah, so definitely for sure, because sometimes the fourth unit, for example, may be all your cash flow. So for that time of vacancy, you know, we do have a vacancy reserve, of course, that we put aside for that. But you know, generally speaking, that doesn’t feed into your cashflow. So it’s like, Well,
Dave Dubeau [00:05:17] yeah, no, that makes a lot of sense. Any other big benefit that you enjoy about multifamily investing?
Demetri Boundris [00:05:22] The reason why I like him is because I like to use the upper strategy. But what is it so that the buy you renovate, rent, refinance and repeat, and it just works really well on those type of buildings, and it’s on?
Dave Dubeau [00:05:37] which ones on the small multiples are the commercial mixed use or both.
Demetri Boundris [00:05:41] It works on both. I just find the more units you have; it works a little better. It just brings the income levels up a lot higher. So it usually qualifies better for the refinance portion because basically with the strategy, we like to take like be able to refinance our down payment or renovation money or closing costs all out of the property at that time. So generally speaking, it usually works to pull out about a majority of the money, I would say, because now property prices are a little higher, but it works quite well.
Dave Dubeau [00:06:11] All right. So for folks that aren’t familiar with the BR strategy, what kind of you’re focusing? Let’s use your most recent example that comes to mind. Let’s say what kind of a property was it? Was it mixed use or was it a small multi? What? What was it that you did your most recent borough?
Demetri Boundris [00:06:29] Most recent one was as a five plex, and that’s what we did the Barone, and it worked quite well. You’re able to purchase the property by getting some instant equity, by getting a little a little bit below market because it was an off market deal.
Dave Dubeau [00:06:44] So you’re buying it, you’re buying it directly from the seller. There wasn’t another realtor involved.
Demetri Boundris [00:06:48] Yes, that’s right. And it does work well. Even on MLS. We found great deals that way as well, right? And then we renovated it and rented it at market rents, and then it refinanced and we were able to get, I believe, on that one, about 95 percent of our money. Wow. So it worked out quite well.
Dave Dubeau [00:07:07] And yeah, go ahead.
Demetri Boundris [00:07:09] Yeah. And we usually do joint ventures now. So the nice part is this the part it gets back the majority of their money on the deal and certainly makes them quite happy.
Dave Dubeau [00:07:19] So for that example of that, five Plex was this like an older property that was just kind of in rough shape? Or was it mismanaged or was it a combination of both? What was the?
Demetri Boundris [00:07:32] Yeah, this one was kind of a combination of both of was kind of mismanaged. Couple of vacancies, really bad shape, which is which is sort
Dave Dubeau [00:07:41] of getting quite a bit at a five place and you’ve got a couple of vacancies, that’s significant.
Demetri Boundris [00:07:45] Yeah, yeah, it was. The renovations just weren’t. What they call renovations was very good and need some interior and exterior work and. Yeah, so it’s kind of the properties that we do like.
Dave Dubeau [00:07:58] Yeah, so it was like owned by like a like. Sounds like it was owned by not a professional investor, but kind of like mom and pop kind of a person.
Demetri Boundris [00:08:08] Yes, I’m an
Dave Dubeau [00:08:09] editor or something like that. What was the situation with the seller?
Demetri Boundris [00:08:13] Yeah, but mom and pop and kind of operation, they try to self-manage it.
Dave Dubeau [00:08:17] But where they lived in it and they’re renting out some units.
Demetri Boundris [00:08:21] Yes, that’s right. Yeah. So they lived in one unit, rented out the other four, and they just weren’t selecting the best tenants like they were screening them correctly. So they weren’t paying rent and kind of damaged the place and stuff like that. So.
Dave Dubeau [00:08:37] So they were they wanted to get the heck out of dodge.
Demetri Boundris [00:08:39] Yes, that’s right.
Dave Dubeau [00:08:42] Yeah, I that’s what you call a motivated seller. So you’re able to get that property at a reasonable price. You saw the opportunity in there because it was bit rundown and B, it was mismanaged. So you bought this particular deal with a joint venture partner, investor partner came on board, they brought in the capital, you brought the deal, you brought the know how you did all the work. How long did it take to turn that property around?
Demetri Boundris [00:09:08] about nine months or so of this project? Yes, pretty good.
Dave Dubeau [00:09:12] Where did you keep some of the existing tenants in there or did everybody leave and you’re able to renovate the whole place? Or did you have to kind of do it?
Demetri Boundris [00:09:21] Yeah. So we were lucky with this property. We were able to get its vacant possession when we purchased it
Dave Dubeau [00:09:28] in Ontario, right?
Demetri Boundris [00:09:29] Yeah, it’s very tough to get. And but since we had vacant possession, we were able to start renovations immediately. So that worked quite well and we were able to get the process moving a little quicker.
Dave Dubeau [00:09:40] That is very cool. So from your investor standpoint, very passive process for them. They put in the money, you did all the work, you and the team did all the work. And then nine months later, it sounds like they got most of their investment out yet. They’re still owners in the property with you. Is that correct?
Demetri Boundris [00:09:59] Is that yes, that’s correct. Well, that’s sounds like a hell of a good deal and generally. Oh, yeah. So and generally what we do is if there’s a little bit of money still left in the property, well, we’ll use the positive cash to pay back our investor first. Right before we start drawing, get
Dave Dubeau [00:10:17] them all of their capital out as soon as possible. All right. Fantastic. So what market do you like to focus on for these kind of properties, Dimitri?
Demetri Boundris [00:10:26] Right now we invest in Hamilton, Ontario, like I do live in Stoney Creek as part of Hamilton. So that’s the city we generally invest in Greater Hamilton area.
Dave Dubeau [00:10:36] Why is that? I mean, anywhere in the GTA and that whole area seems to be on fire these days. Why do you like Hamilton besides the fact that it’s your own backyard?
Demetri Boundris [00:10:47] The reason why we like Hamilton is because the economic fundamentals are pretty solid here. It’s situated quite nicely between Toronto and the U.S. and the mega region. They it’s a very diverse employment market. So we have medical, we have steel, we have to pathology. There is a lot of construction happening here. So there is because of that and it helps to bring in more tenants and more work opportunities. So it’s great big for us for that.
Dave Dubeau [00:11:19] Yeah, I know you’ve been doing this for quite a while now, Dimitri. Do you find you’ve seen, you know, right now at the time that we’re doing this, the market’s on fire, but you’ve been through a couple of little market cycles along the way? Have you found that because you’re investing in multifamily and mixed use commercial multifamily type properties that there are those kind of properties are able to weather the storm better than, let’s say, a single family home?
Demetri Boundris [00:11:44] So the recession of 2008, I did have single family homes, and I wouldn’t necessarily say that I think what it mainly comes down to is. Not leveraging yourself too much like, for example, if the market rent is for certain hundred for a two bedroom, for example, like it is higher than that, but I’m just using this as an example, and we can really push your limit and get six hundred dollars a month. The calculation is when you analyze your property, you want to do it at a more conservative number so that if you do end up having a vacancy in that unit, then you need to rewrite it in a bad economy, at least you know that it’s going to cover your expenses. You got some good. So that’s generally what I’ve done is providing a cushion for myself, and that’s how we’ve got through the bad times. So at the end of the day, it’s just the numbers. I don’t care if the property value goes down a little bit, I know it will go back up in the long run. That’s just the way real estate cycle goes, but it’s, you know, just preparing properly and giving yourself a good cushion and also having a bit of a reserve fund as well.
Dave Dubeau [00:12:48] Yeah. Now you’ve said that a couple of times that’s really smart to have that reserve fund because you never know when that rainy day happens, right? So good to have some put away for. So, Demetri, you’re you’ve been doing this for quite some time. You’ve got experience as a realtor as well. What would you say is when it comes to real estate investing your unfair advantages?
Demetri Boundris [00:13:10] I think it’s kind of finding creative ways to generate more income and properties, maybe that some others don’t see. Like what a good example of something like an example may be like adding lockers or renting a garage on the property that someone did see the opportunity to do adding a laundry room. Stuff like that. Just adding When you say
Dave Dubeau [00:13:31] lockers, what kind of look like little mini
Demetri Boundris [00:13:35] storage lockers? Yep, storage lockers that could rent to store additional items. If it’s dollars a month or $50 dollars a month,
Dave Dubeau [00:13:45] which may not sound like much, but that definitely adds up very quickly over time.
Demetri Boundris [00:13:49] I mean, it does. Yes. Yeah.
Dave Dubeau [00:13:51] So the example where you’ve got the storage lockers, how many lockers do you have on that particular property?
Demetri Boundris [00:13:55] So like, for example, a four plex, we have one for each tenant in the basement area so they can store there, you know, it’s big enough to put a bicycle in and some Christmas decorations and different things like that. So they don’t have to have their apartment, they can free up space.
Dave Dubeau [00:14:13] That’s nice. And you charge an extra how much a month for
Demetri Boundris [00:14:16] for the last twenty five dollars or for that type of
Dave Dubeau [00:14:18] locker. So there’s $100 a month extra pure profit coming to you because once you’ve got it set up, there’s no cost in maintaining that they bring their lock to their locker. And over the year, that’s twelve hundred bucks and that makes a big, big attraction. Makes a little difference. Yeah. All right. Same idea with the laundromat is you don’t need a whole bunch of units for that to make, so it makes sense.
Demetri Boundris [00:14:42] It usually works well with at least a minimum of three units. But once we hit about four units, we usually put two washers and dryers and attendants do like it so that they don’t have to run out to a laundromat. In some cases, you can’t always put ensuite laundry. There just isn’t the space for it and some of the older buildings that we rehabbed. So by adding the laundry room seat in the basement space, it’s it works out good for us because there’s some extra income, but it also is. The tenants really appreciate it because it’s just one of those convenient things. They don’t have to leave the building in the middle of winter to go to a laundromat. It’s right on site.
Dave Dubeau [00:15:18] So yeah, that’s smart. That’s smart. Because, yeah, all of those little extra revenue streams make a big difference on the bottom line and also depending on the size of the property on the value of the property, because a lot of that’s based on its profitability. So that’s really, really smart. Very, very cool. So that’s a very cool secret sauce that you’ve got there, Dimitri. Now you’ve been doing this for. Quite some time at the time that we’re recording this. We’re looking at 16, 17 years you’ve been investing in real estate. What would be the biggest lesson you’ve learned so far?
Demetri Boundris [00:15:54] Don’t pass up on a good deal. And what I mean by that is in the past and in my twenties especially, I was self-funding a lot of my deals and I’m trying to find ways myself to get the down payment. And later on, after meeting people even such as yourself that do joint ventures and did a lot of them, I started getting into that and realized that, you know, there’s a good deal. You have to find someone to help you buy that property, know whether it’s a joint venture or private money. And I think that’s the lesson I learned is don’t pass up a good deal. Yeah.
Dave Dubeau [00:16:30] Well, that’s a good one, especially the more deals that you’ve seen come and go. So. So Dimitri, obviously, you and I are enthusiastic about real estate investing. Do you think that it’s for everyone? Like being an active real estate investor, like you are going out and finding the deals, getting them under contract, raising the capital, getting the repairs done, managing the tenants, managing the property. Do you think everybody’s cut out for that?
Demetri Boundris [00:16:57] I don’t think it’s for everybody. Certainly being an active realtor, but I do think that to some degree, real estate investing can be for everybody, but some people may just want to do it, possibly. So they just want to invest the money and let somebody else take care of everything else, but certainly can do a lot for someone’s life. There’s a lot of lot of good things that are real estate, but yeah, but passively is another way to do it. But definitely doing all the work and being a working partner or a working investor may not be for everybody,
Dave Dubeau [00:17:32] for sure, right? So basically, you think the real estate as an investment class is definitely for everyone? Just actively managing the deal itself is not necessarily for everyone, but everyone should be involved one way or the other.
Demetri Boundris [00:17:46] Yes, I think you put it in better words. For me,
Dave Dubeau [00:17:51] while this has been a lot of fun, Dimitri, and I want to congratulate you on everything that you’ve accomplished so far in your real estate investing career. It sounds like you’re up to fantastic things. It sounds like you’ve got a ton of opportunities and are really good, solid market and a very good, solid strategy as well. So if people are listening to this and they want to find out more about Dimitri, Budrus, what should they do?
Demetri Boundris [00:18:14] They can check out my website, Comfort Living Properties, dot com or they and they can get my email and phone number off that site.
Dave Dubeau [00:18:22] Perfect. There you go. So make sure we’ve got a link to that. And Dmitri, thank you very much for being on the show.
Demetri Boundris [00:18:27] Thank you. Appreciate you having me there.
Dave Dubeau [00:18:29] All right, everyone. Take care. We’ll see you on the next episode. Well, hey there. Thanks for tuning into the property Profits podcast if you 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, we invite you to get a complimentary copy of my newest book right back there. There it is the money partner formula. You got a PDF version, an investor attraction book dot com again. Investor attraction, book dot com. Take care.