Podcast Transcription

Erwin Szeto [00:00:08] Hello and welcome to another episode of The Truth About Real Estate. Best in show. My name is Erwin Szeto and I trust everyone is if they’re enjoying the lovely spring weather. If I can use this fact of the day, Denmark is slowing down their vaccine rollout because apparently they have it under control, which is fantastic news for them. Statistically, I can verify that they’ve got corporate pretty much under control and that’s fantastic news for what is probably hopefully to come as well. COVID is less of a concern. It seems to be seasonal. I’m not doctor folks. Please listen to your doctor, not me. But, yeah. All positive news. Me. I’m still planning on getting boosted in the fall. I have too many friends who’ve had bad symptoms several multiple days in bed. I have a low tolerance for suffering personally, so that’s my risk tolerance. Everyone else has their own risk tolerance. I just can’t stand being stuck in bed sick. I have too many things to do anyway. I trust everyone is enjoying this lovely spring weather. I was lucky enough to get in a round of golf with some buddies. My first round of the season unfortunately was pretty darn cold. And I’ll use. That as an excuse. I didn’t play great. I shot at 118, but I was much improved over my 12 months. Go score at the same course where I shot 130 for my first round of the season. Yeah, my putting was garbage and I swing way too hard. I swing deeper and I lose control. Is, I think, analogy for real estate. A lot of these companies and individuals who are who are not having a good time investing in real estate. You know, I’ve mentioned some of them. The show oftentimes it’s not because they’re bad people. It’s just they swung for the fences without having a good foundation in place anyways. Golf prices are also a victim of inflation. Like many things, the posted rate at my golf course is the price to the public is up around 30% higher than last year, which I know is upsetting to many people. And I also heard the cost. But they’re paying for a bag of fertilizer used by the golf course when up from $38 last year to $71 last year. So this year, sorry, from 38 last year to $71 this year, that’s an increase of 87%. And I think we all know that fertilizers used more for more than growing grass on golf courses. They’re used to grow food as well. And sadly, I think we can know where food prices will be headed. Yeah. Since fertilizer is used for growing food to one thing that’s not going up in price right now is real estate. And as predicted here, I believe I shared it on this show and I shared it at our real estate meetups. Now, in real estate meetups hosted by Cherry and I, I predicted this coming. We advised our clients that they planning to sell within the next year. They should be selling early in the year ahead of the interest rate increases and some of them did and did really well for it. Obviously they’re over the moon having a peak. So congratulations to them. Very happy for them. And she one of them just told me on weekend at our most recent meeting that they’re hitting any and the resignation this week they’re it’s time for the retirement and we’ve discussed it this would not be possible without investing in real estate. So yeah, maybe the lesson would be if you want to have an early, comfortable retirement, consider investing in real estate. That’s a lot of estate is coming down on prices. We’re seeing prices down five, 10%. It could go down even more. Some see that as a bad thing, not our client. Last week, as we scored a detached bungalow for under 700,000 in Branford, zoning bylaw allows for a basement apartment and the early quote for converting the garage. The existing garage to a self-contained apartment was well under 100,000. The early number was like 70. So our client can be all in for hopefully under 900,000. For what will be a triplex. Early estimated rent would be around 50 $200 per month. Plus, we have a lender who will provide the construction loan for the renovations. This is all bleeding edge, folks. This probably be only the second in all of Branford that will execute repaint this with a garden suite and a construction loan. So this something that we’re staying on top of. I do believe the garden suites the which would be an addition or tiny home on the existing property will basically be the last opportunity for a major value add or renovation to a property. So perhaps you can appreciate that we’re all over this strategy and to know knowing everything we possibly can anyways. Two months ago we may have needed to pay easily five or 10% more for the same property, while also completely competing against a ridiculous number of offers. Because just like most of you, you understand the opportunity here. It’s not that common. So yeah, our client jumped on it. Thankfully, we’re in a bit of a dip right now and because of that we were able to compete against less. Properties. Ashley Before I go on are our keynote talk for the May Island Real Estate Meetup hosted by Charity Night is all to do by Garden this meeting. So again, that’s an addition or a tiny home built on an existing investment property, typically in the backyard where we’re talking about the ins and outs of it at the minute I’m a meeting, so you probably won’t be attending that at our live and in-person meetings again. So we’re only doing live and in-person. There is no zoom or recording option. It’s a lot easier that way for us. So how awesome is that? While there’s some people are out there panicking about interest rates and falling rent prices, historically, again, I know a lot of people have trouble zooming out, not for all of you, because you’re all educated folks who are smart. If you can zoom out and you will see that rates right now are historically still really cheap and our clients will gladly use this cheap money to create some serious cash flow. And who doesn’t want more cash flow in an inflationary environment? The cost of pumped gas is just ridiculous. And I think and on my what drive in today, I think gas is approaching a dollar 90. Our Tesla cannot get here fast enough. It’s funny enough that people keep asking me when the Tesla is coming. Our current. It’s July. It just keeps bouncing around. We were supposed to have it this month or in the next few weeks, but we got pushed out to July somehow anyway. Technically, everyone should want more of a cash flow in their lives. It just makes complete sense. Also, on the other hand, real estate is pretty much the perfect hedge against inflation, preferably on ground as best. And if you do follow the stock market like I do all the best dividend paying companies are trading at all-time highs. So the market is buying companies that cash flow. Right. Quick side note, thank goodness me on some of these companies, they may shopping, for example, it makes shopping at Costco a little less painful, knowing that we own a slice of their business excellence. Not advice, folks. Anyways, I hope everyone out there has their finances in order. I mean, like their mortgage capability in order to go deal shopping because that’s exactly what Sherry and I are doing after this week’s show. Today we have an old friend of mine, Mahendran, who’s been in real estate since the early 2000 as both an investor and a property manager. Mo is currently an owner of one of the owners of KW Property Management. KW stands for Kitchener-Waterloo, Matt Carl Williams with around $2,000 under management. That includes 600 clients, mostly single family homes, with the average investor client owning 3 to 5 houses. Mo was on the show today to share some truth about real estate investing. Hopefully I don’t get in trouble for this, but I will share some of his experiences having to pick up the pieces after what some out of the town realtors promised to investors in terms of overinflated tenant profiles and rents by as much as 25%. So it’s not me saying bad things about realtors. It’s a bit more. So, please. Yes. Guillermo, who is also an investor in a startup company called Real Me Property, a startup real estate financial technology company offering blockchain based, affordable investing opportunities in cash flowing real estate. Most young friends are here with us today, Akshat and Richard, who are super bright. I don’t need to tell you about your realize that quickly when you hear them talk about their experience and their education. These gentlemen are going places and they’re here today to explain what is a fractional ownership, what is their business, which surrounds fractional ownership of real estate investment opportunities? As always, anything set on this podcast is for educational, maybe entertainment purposes, and it’s not endorsement of any investment no matter what. I’m licensed to talk about real estate, and that’s it for investment advice. Please seek professional advice from a financial advisor, which is not me nor my guests. My unprofessional opinion. I’m excited to see where really goes, as I’m sure many of you would like an opportunity for potentially an early exit of a portion of our investment properties one day while offering opportunity to those with smaller amounts of capital to invest because everyone needs exposure to hard assets. If you don’t know what that means, please read Ray Dalio’s principles of investing in the change for the better not to boast that. Here is the book is honestly like an inch and a half big. Please enjoy this show. Gentlemen. No, I shot. What’s. What’s keeping you guys busy these days?

Moe Hansroda [00:09:40] Real estate.

Erwin Szeto [00:09:41] So differently, though, for you, too?

Moe Hansroda [00:09:43] Yes, definitely. For us to.

Erwin Szeto [00:09:47] Have a bit of a generational difference here. Yeah.

Moe Hansroda [00:09:49] Yeah.

Erwin Szeto [00:09:50] I sorry. Actually. How old are you?

Moe Hansroda [00:09:51] I’m 25.

Erwin Szeto [00:09:53] Oh, gee. Okay.

Moe Hansroda [00:09:54] Yeah, he’s half our age.

Erwin Szeto [00:09:55] You know, you can. Only in real estate. You’re too young.

Moe Hansroda [00:09:57] Yeah.

Erwin Szeto [00:09:59] Cosmo bought it.

Moe Hansroda [00:09:59] All. Yeah.

Moe Hansroda [00:10:01] That’s why we’re here. You know, I actually met one of the people on his team online, actually, Facebook. And that’s how I got connected with them. So I can start to tell you what I do. How I know you. You and I have go back about a decade at REIN. Probably more.

Erwin Szeto [00:10:20] Than 20.

Moe Hansroda [00:10:21] Yeah.

Erwin Szeto [00:10:22] Uh Real Estate.

Moe Hansroda [00:10:23] Long nine. But I didn’t get in till later. Right. But, I mean, I remember you had the Tiger-Cats jersey in where all the time. So he would call himself Mr. Hamilton. And any time I see, I’m going to meet Erwin or talk to Erwin. If somebody knows REIN or knows real estate. I see. Mr. Hamilton the guy. Oh, him. Okay. Okay. So we’ve been part of REIN, you know, acquaintances. And we talk online here and there. And I was with, you know, I would attend with a few landlords and a realtor team and you know, we, we picked up a lot of business from REIN. It was great stock going probably mid say like 14, 15 when things changed. Right. Yeah. So we’re still landlords. We’re still investors.

Erwin Szeto [00:11:12] But you know, you’re still learning to hear the market slowing or something.

Moe Hansroda [00:11:14] Yeah. No, yeah, yeah. You know, it’s, it’s the.

Erwin Szeto [00:11:17] Government has some new plans for, uh, I don’t know, whatever.

Moe Hansroda [00:11:20] Yeah.

Moe Hansroda [00:11:20] Oh, they’re, they’re going to try to slow us down, but, you know, Tiger’s not going to change his stripes, right? So I’m part of KW Property Management. I had my own company, Tri-City Rentals. I met a girl named Trish Montag, and she ended up taking over my company. And I do the intake. New client sales leads for KW Property Management. And we’re out of Kitchener and we service about 75 to 100 kilometer radius outside of Cambridge. Kitchener-Waterloo actually expanding into Hamilton and Milton now and some in the Brampton and we’re in Woodstock, Brantford, Paris, Fergus, Air, Trumbull, all those smaller towns outside of KW CE, as we call it.

Erwin Szeto [00:12:04] You made up some cities there, I think.

Moe Hansroda [00:12:06] But yeah, there are there are small.

Moe Hansroda [00:12:07] Louis live.

Moe Hansroda [00:12:08] If you if you live down there you know them right so but we’re up to about 2000 doors are mostly single family residential the majority of our clients have one, two or three doors. A lot of our clients are working abroad and don’t want to sell their homes because they’re unsure of what the future holds. And they don’t want to be chasing the market, obviously, which has taken off down here. Well, in KW C anyways, and in southern Ontario in general. So we look after it for them. We sell the units, collect rent, do the evictions if necessary, and you know your regular property management shop. So we have an office downtown people.

Erwin Szeto [00:12:46] Regular means different things to people. This sounds pretty end to end.

Moe Hansroda [00:12:50] Yes, end to end. Yeah. So it’s a full shop, full hands off. We got clients all over the world. A lot of clients we’ve never met before. They buy property here. We, you know, as long as you have a bank account and FINTRAC, you know, you’re above board, we can deal with you. And so we make it hands off for our clients. We do everything from, you know, placing the tenant, dealing with them day to day, to cleaning, to doing their banking, to doing their licensing if the town requires it, etc.. And we have a staff of 15 downtown Kitchener where our office is, and we do some commercial stuff like warehouses, medical plazas, plazas. We even look after shuttered McDonald’s. So if McDonald’s closed the restaurant down within about 75 kilometer radius of our downtown office will look after for them. Right now, we’re looking after one for them beside Google, downtown Kitchener. So they’re still undecided. What they’re doing with that piece of land becomes very valuable now. So they’re one of our clients. But our main focus single-family residential and to a lesser degree, we have about 5%. 7% of our portfolio is student housing, but it’s a lot more work. We would rather stay with single family and I found it as a landlord myself just to be a better business, less turnover, less wear and tear, less dealing with students, parents yelling and screaming about something and children fighting, etc.. Right. So that’s basically what we do, who we are and what I’m into. And I’ve always been into real estate investing stock market. Now I’m into crypto and I know Irwin is into all these things as well. I like making money. Yeah, exactly. And.

Moe Hansroda [00:14:33] And we’re not hurting nobody.

Moe Hansroda [00:14:34] Yeah, exactly. Exactly. And. I attended his seminar with Grant Cardon pre-COVID, and that was great. And that being said, you know, it’s sometimes, you know, I like to dabble in other things. So I met Amna from Akshat and recharge team of real me property and they will explain what they’re up to. And I’ve joined their team as a consultant advisor slash acquisition guy and can help them grow out what they’re trying to achieve. And we’ve already acquired a couple of properties out of town. One’s in Kirkland Lake and.

Erwin Szeto [00:15:11] Some parts of it there. How long you been in real estate? I’m still trying to qualify you as an expert. I’m not sure.

Moe Hansroda [00:15:17] We’re there yet. I’ve actually, I my first property I bought was in 89. 90.

Erwin Szeto [00:15:21] Okay. Longer than you two gentlemen.

Moe Hansroda [00:15:23] Real life, of course. Okay.

Moe Hansroda [00:15:25] So fresh out of high school.

Erwin Szeto [00:15:27] Okay. And then. And then. How long you been in property management? You mentioned before early 2000s.

Moe Hansroda [00:15:33] And then I’ve been with this particular company, kind of your property management, who took over my business, which was self-run. I was running it out of my house. We merged in about 2011, 2012.

Moe Hansroda [00:15:47] And we’re the startup guy, huh?

Moe Hansroda [00:15:49] Yeah, we’ve been going strong since then. We’ve grown the portfolio from about, like I said, about $150 combined to over 2000 and about 600 clients, close to 600 from all over the world. So we got a niche market down there. We have a lot of people that come to us for help, advice, consulting and, you know, help try to help facilitate transactions for realtors that may want some assistance for their clients. So we’re a full service shop. We do some leasing agent stuff as well where some people want to be hands off and want us to manage their properties. I mean, just fill their properties and not manage. So I mean, it’s all over the map. Sometimes we’ll get clients, they’ll be living in the basement of a triplex and want us to manage the two upper units and don’t want the tenant to know that they’re the owner. So sometimes I’ll get a call from China, you know, fill my unit and email me the lease and I’ll deal with the tenant directly. And I don’t need management and they’re halfway across the world, different time zones. So it’s all over the map. You think the person in China would want the property management and the guy living in the basement? The triplex would manage on his own. But it’s complete opposite sometimes.

Erwin Szeto [00:17:05] Not at all of them.

Moe Hansroda [00:17:05] Yeah. And we have a mix of business coming in, you know, we have business going out obviously because of the sales market’s been on fire. So people that have been long term clients are cashing out. But then again, I was telling these guys earlier, people that have bought properties say back around Christmas have seen substantial gains in their investments and are cashing out 6 to 8 weeks later in some instances. So it is what it is.

Erwin Szeto [00:17:30] But that’s not the norm.

Moe Hansroda [00:17:31] No, that’s not the norm. That’s not the norm.

Erwin Szeto [00:17:33] And so I’d actually like to ask norm questions. Normal questions. Yeah, that’s not an incumbent rate. And so my question is just about Calvert real estate investing. And the nice thing about a gentleman like yourself, you have access to a wide database essentially. Yeah. How many of your clients are full time and you call full time investors?

Moe Hansroda [00:17:53] Full time invest.

Erwin Szeto [00:17:54] Percentage. You mentioned earlier your average client has like 3 to 5 properties.

Moe Hansroda [00:17:58] I would say 75% of our client base are probably investors and about 25% are working abroad or at a town. And some are just using our services to keep their unit rent in cash flow, make some money while they’re either deciding whether they’re going to come back or they’re going to sell the property at a later date. So, I mean, some don’t want to be landlords there. It’s just something that has been thrust upon them because of job change or something like that. But yeah, it’s kind of all over the map. And as I was saying, I do the client intake and have met, you know, talking to new investors, first time buyers. And half the business these days seems to be people that have went and did it on their own. Did landlords, got themselves into trouble, have delinquent tenants? You know, it’s all over the map.

Erwin Szeto [00:18:55] So it sounds like regular people this doesn’t sound like foreign buyers or like.

Moe Hansroda [00:19:00] Well.

Moe Hansroda [00:19:02] You know what?

Moe Hansroda [00:19:03] Like there isn’t like massive foreign buyers showing up. They are there. But I would say the majority of our portfolio are tiny and citizens, even if they’re living abroad. So they’ve bought these properties when they were here and moved abroad. I mean, I do have the calls once in a while from the Middle East, Latin America, Europe, California, China, or like, you know, wherever in Asia where they want to invest here. And Vancouver and Toronto had a range now. And so they’ve set their sights on, you know, KW, CE or other parts of southern Ontario. So yeah, I mean, if we can, you know, get them to buy, obviously it’s business for us and you know, whoever our realtors are that were, you know, dealing with at the time and, you know, they’re looking at all sorts of places in southern Ontario, so they’re looking at London. We really don’t go down there. It’s a little bit far. We’ll help a few clients that are good clients. If they really want us to travel that far, we’ll do it for them. If they have multiple units and.

Erwin Szeto [00:20:02] Foreign buyers isn’t really.

Moe Hansroda [00:20:03] Yeah. Foreign buyers I think are, you know.

Erwin Szeto [00:20:07] Bring it up because they’re now banned. Yes.

Moe Hansroda [00:20:09] Yes. I mean, they’re banned. So we’ll see how long this last see if there it makes any difference. I think the government’s going to find out quickly that there’s.

Erwin Szeto [00:20:19] It’s just noise.

Moe Hansroda [00:20:20] Yeah, exactly. Which is.

Erwin Szeto [00:20:22] Surprising. Is it made headlines.

Moe Hansroda [00:20:23] Yeah.

Erwin Szeto [00:20:24] So that’s what you got to talk about the budget. There’s much more important thing in the budget.

Moe Hansroda [00:20:28] I think the big thing they’re going to realize and if they ask anybody else in real estate what the real problem is, their policies obviously the as far as Ontario government, provincial LTV guidelines etc. and a shortfall in new housing. And I just as I was saying earlier, I just don’t think there’s enough labor to keep up to demand. And kids these days aren’t getting into bricklaying, you know, framing all the things that are needed because they’re either getting into, you know, computer sciences, etc.. They’re used.

Erwin Szeto [00:21:02] To the comforts of.

Moe Hansroda [00:21:03] Yeah. Of what.

Erwin Szeto [00:21:04] Their parents have.

Moe Hansroda [00:21:05] Done for. Exactly. And they’re not prone to physical labor. And I think there’s going to be a shortfall there. And I know the government has said they want to build, I believe, 400,000 new units in the next few years to you know, I just don’t think it’ll be enough and I just don’t think they’ll reach that number.

Erwin Szeto [00:21:24] Okay. So all right. I know we want to talk about other things, but I need I need to get one of these bad realtor stories.

Moe Hansroda [00:21:30] Oh.

Moe Hansroda [00:21:31] Oh, oh, yeah.

Moe Hansroda [00:21:33] So tell me about the bus tour. Yeah. Was at a Google. Yeah.

Moe Hansroda [00:21:37] I was telling when earlier that. Yeah. So I mean thing I’ve been dealing with lately is lately.

Moe Hansroda [00:21:45] Well this is like forever.

Moe Hansroda [00:21:46] Hell that’s for the last few years we’re noticing because of the Toronto prices invest your money like you know especially investors that are refining to take that money and put it to work in Toronto would just won’t work and so they come down the highway to Guelph Golf is getting out of control so they’ll come down to Cambridge Kitchener-Waterloo and they’ll think you know I.

Moe Hansroda [00:22:08] Was there area experts now.

Moe Hansroda [00:22:09] Yeah we’re getting real that yeah think they know the area meanwhile they’ve probably been here once just drove through.

Moe Hansroda [00:22:15] Town.

Erwin Szeto [00:22:16] They know Toronto very well now they know Rick Wall really well, but now they know Cambridge really well.

Moe Hansroda [00:22:20] Gosh, yeah, exactly. Exactly. And some of these realtors are overpromising and under-delivering, so they’re bringing their. Yes, yes. And believe it or not, and they’re bringing their clients down and they’re telling them, you know, pie in the sky, stories of outrageous rents at low prices as far as, like, you know, units they’re acquiring. And when by the time they get to me, I have to, you know, temper their expectations, so to speak. And we you know; this is a common thread. I’m. Seeing a lot of realtors come down here and they know that at the end of the day, once they get the sale, they can move on. And if they find a property manager like me or somebody else, then, you know, the issue is then foist upon myself or the other property manager to deal with. And like I said, there’s sky high expectations coming from these landlords. I was telling Erwin a story of some Asian investors coming down with clipboards on a tour bus like the same that would go to Casino Rama, etc..

Erwin Szeto [00:23:24] And it doesn’t have a gambling look.

Moe Hansroda [00:23:26] Yeah, different type of gambling. And you can.

Moe Hansroda [00:23:27] Argue it’s better. So they were coming.

Moe Hansroda [00:23:29] Down to look at condo projects downtown Kitchener. And one Saturday morning, I believe the realtor sold about 20 of them to these other paid investors and then passed my number on. And when I finally spoke to some of these investors, they were under the illusion that, you know, the prices didn’t align with what I was telling them. The rents would actually be because this isn’t downtown Toronto, it’s not Bay Street. You know, you don’t have guys from the stock exchange renting these places with six figure salaries.

Erwin Szeto [00:24:00] Yes. That’s the financial capital of Canada. Exactly. It’s not the financial capital of Canada. Exactly.

Moe Hansroda [00:24:05] We have we have Toyota, which, as you know, which manufactures Lexus. So, I mean, there are some high paying jobs there. There’s Google, but there’s only a few hundred people working at Google. And the majority of those people probably own their own units. So these six figure salaries, they just don’t exist when you’re out.

Erwin Szeto [00:24:23] There trying to attract that tenant profile.

Moe Hansroda [00:24:24] No. And it’s a blue collar area. Even though Waterloo has the universities, the majority of single family tenants aren’t the same profile. So they’re not white collar, they’re mostly not educated. And the average wage, even in the you, even if you count some of the manufacturing outside of Toyota, is still under $20 an hour. So once you figure out the cost of living, there’s not much left, especially if.

Erwin Szeto [00:24:49] These are landlords who put up their money. They must have done due diligence and knew this already.

Moe Hansroda [00:24:52] You know, the realtor does the due diligence, which is the problem, right?

Erwin Szeto [00:24:56] So I’m sure they did a really good job to take care of those clients.

Moe Hansroda [00:25:00] Well, we do. The clients did do come on. And I can convinced that, you know, you may be underwater, but you’ll make money with mortgage pay down in appreciation. You know, they’re the ones that, you know, after a while they gain our trust and they understand that, you know, we weren’t the ones to put them in this predicament, but we’re here to help them out.

Erwin Szeto [00:25:17] How bad was the rent delta between what the what they were sold and what was real?

Moe Hansroda [00:25:21] Anywhere between 500 to $1000. So massive, massive discrepancies. And, you know, the numbers are just working anymore unless you’re getting into bigger multi-unit projects where, you know, the cap rates may be above 4%, but just the prices have skyrocketed and you.

Erwin Szeto [00:25:43] Can do 20 of those in the bus tour.

Moe Hansroda [00:25:44] Yeah. And the lending rules have tightened and you know, we’re seeing even banks asking for asking us for like letters of opinion, you know, and sometimes, you know, we can’t lie. Obviously, I don’t want to get involved in mortgage fraud. So we have to be honest of what we can get in rent. And then, you know, you have realtors or mortgage brokers coming back and yelling all you should have put 2500 down for that place. I’m like, you can. Yeah, it’s like, yeah.

Moe Hansroda [00:26:12] You put up your license.

Moe Hansroda [00:26:13] I said, you know, in reality only fetches 1800. And I said, even if the underwriter does due diligence, they’ll figure out that my number is closer to what he’s going to find. And I said, it’s going to scare.

Erwin Szeto [00:26:25] They’re not dumb. They run comps.

Moe Hansroda [00:26:26] Yeah, exactly. Exactly. And but I mean, you know, at the end of the day, this is a commission based industry and everybody’s chasing a quick buck and they’ll move on to the next deal. And, you know, especially with mortgage brokers and realtors, once their deal is done, they’ve been paid. They wash your hands and let a guy like me deal with the fallout.

Erwin Szeto [00:26:46] So and that’s why I love the opinions of property managers because of commission based.

Moe Hansroda [00:26:49] Yeah, right.

Moe Hansroda [00:26:51] Exactly. We have some commission based, you know, like a structure. But I mean, the day to day residual payments we receive, you know, the headaches from that don’t correlate actually with what, you know, somebody on the other side is being paid as far as there, you know, outrageous commissions. And I mean, I have nothing against realtors. You know, some realtors are my best buddies. But I mean, their commissions have stayed the same ever since I’ve gotten in real estate, which is, you know, half of 5% for one end. And, you know, house prices have in some instances gone up like, you know, 500 to 1000%. But the salaries from, say, 30 years ago haven’t gone up commensurately. So, you know, these things don’t align. And, you know, but realtors, just because they’re making a lot of money and the biggest players in our town, in our area are doctors, lawyers, engineers. They’re not the. University educated. They’re actually realtors, some with high school education, and they’re good marketers, good salesmen, and they’re making outrageous sums of money. But and that’s one.

Erwin Szeto [00:28:02] Of the problems of Canada.

Moe Hansroda [00:28:03] It is what it is. Right.

Moe Hansroda [00:28:05] And this is.

Erwin Szeto [00:28:06] Part of the bigger problem, because as all people are making money in real estate, that doesn’t really help the future of Canada, which is why I’m guessing we have these young gentleman here trying to save us.

Moe Hansroda [00:28:16] All to pay.

Erwin Szeto [00:28:17] For the bill that we’ve kind of racked up.

Moe Hansroda [00:28:22] Exactly. And it’s.

Moe Hansroda [00:28:24] Generation. It’s social media generation. Right. And I mean, I like Gary Vee as much as the next guy, but I mean, with the way he promotes things sometimes it’s like he, you know, he’ll say, you know, everybody can just triple down on what they’re good at and go make a ton of money and not have any education, etc.. Right. Not that I have an education myself, but I think, you know, there’s a, you know, we need people in STEM like those areas and subjects and.

Erwin Szeto [00:28:50] Who move us forward.

Moe Hansroda [00:28:51] Yeah, exactly. And yeah, if you can make, you know, or sell something online and use tech, talk to sell it and promote it and, you know, have a business, create good for you. But the majority of people are going to fail. And so, I mean, that’s basically all right.

Erwin Szeto [00:29:08] I think we’ve qualified you as an expert on real estate. So hopefully you’ve vetted these guys.

Moe Hansroda [00:29:14] Yes, these young people.

Moe Hansroda [00:29:16] Yeah, I’ll let them talk now.

Moe Hansroda [00:29:19] Uh.

Erwin Szeto [00:29:19] Rashad? Yeah? What are we talking about today?

Moe Hansroda [00:29:21] I mean, you know, Moore covered his side of the story. You know, we met Moe through a social media group, you know, got connected. And now looking at the other side, you know, you always look at the older folks, the experienced folk, as not understanding technology. And I think that.

Erwin Szeto [00:29:36] Having ruined everything for you people. Yes.

Moe Hansroda [00:29:38] You people being young people talking about money. Yeah.

Moe Hansroda [00:29:41] But I’m one of those few people that we really like. You know, we think he’s a great consultant to the team because he brings the experience and he understands technology is something that will move us forward and hence that’s why we’re here. Richard and I were both co-founders. We met in Waterloo. He’s doing his Ph.D. from University of Waterloo. I finished my degree. Be a lawyer. This is our second startup. Just tell quick background about us. You know, I was running my first startup in 2016. I started it was in the rideshare space. So basically help helping, you know, the younger generation, let’s say the college students carpool from point A to point B because Uber is pretty expensive. Go busses, you know, you have to take multiple busses, whether you’re traveling downtown from Waterloo or Waterloo to say East End to see your parents. So we started a carpooling platform, you know, using technology where we connected drivers with student riders and, you know, they just had to pay ten or $15 per seat. So the cheaper way for them to travel.

Erwin Szeto [00:30:38] Okay. Okay. Did you make money on this?

Moe Hansroda [00:30:40] So just a little story on that. In 2019, we pitched on Dragons Den and that was our, you know, our first go to pitch that came out on TV and we launched it in 2019 as well. We had around 25,000 users in that year, me, Ricardo and our third co-founder. We sold it to a company down in Toronto, so we got acquired in 2020, just before COVID. And then we worked with that company for, I would say, 12 to 14 months. And you know, me, Richard and a couple of other people, he said, you know, we like the startup space. Let’s do it again. And that’s why we’re here, right? That’s where we started. Real me, I think before we get into the solution, I think the biggest thing, you know, I wanted to talk about is the problem we wanted to solve people, you know, that are fresh grads starting their families off. You know, they have, you know, not too much knowledge about real estate. As, again, Moore was talking about how there’s, you know, real estate agents. I’m not generalizing, but there’s real estate agents that are good salespeople, but they don’t know about the market. They don’t know about the area that someone wants to buy in. You have a lot of lawyers, but again, they’re not very well educated. You know how to cater to the younger generation. And if you look at from, you know, someone who’s 26, 27 talking to an agent or a broker, they don’t even get taken seriously because people think, you know, us as a younger generation, we don’t have enough money. We’re just kicking tires, you know, looking for houses. And that’s where we wanted to come in, because we see the younger generation, you know, the 1020 kid they have saved up. So in some cases, 50, 68, when they’re starting up their families, they’re investing they’re investing in stocks, they’re investing in crypto because it’s very simple. You open up our app, you put in your KYC, know your customer details, and you can invest. We got thinking.

Erwin Szeto [00:32:24] Straight. Bush-Kerry scary.

Moe Hansroda [00:32:25] Yeah, exactly.

Erwin Szeto [00:32:27] But then dogecoin when you.

Moe Hansroda [00:32:28] Yeah, exactly that dogecoin Elon does a tweet it goes from what, less than a cent to $0.40 in a day. Right. And the younger generation is accustomed to that kind of technology. They like everything on their phone. Yeah, everything done quickly. Convenience, hassle free. And that was the biggest problem we wanted to address is younger generation one invest in real estate. That’s a. Hi. Switching class. You got to put in a down payment of, let’s say, 9200 K, get a mortgage, go through all the different aspects that the younger generation doesn’t like, and maybe get the money to do so right now because of the house prices going up. And that was the biggest problem. Right. So one of the biggest things we do, even before putting up a solution is talk to people in our target market. A lot of people, you know, we spoke to, they want to invest in real estate, but they don’t know how to. You know, we asked a lot of people, you know, why don’t you invest in reach? 75% of the people we spoke to, they don’t even know what it is. And there’s a huge major gap in terms of the, you know, the education component.

Erwin Szeto [00:33:30] Like you got a business, you went to business school. I went to business school. I don’t think they ever mentioned the rate to us.

Moe Hansroda [00:33:35] Exactly.

Erwin Szeto [00:33:36] Now, but I think on a luncheon and they mentioned real estate to us.

Moe Hansroda [00:33:40] Where.

Erwin Szeto [00:33:41] We were broker brokers came in. Yeah, there’s no nothing.

Moe Hansroda [00:33:45] Nothing on personal finance. I heard in Florida they’re going to be doing that. Yeah.

Erwin Szeto [00:33:49] So trust them.

Moe Hansroda [00:33:50] Yeah. That’s funny.

Erwin Szeto [00:33:52] Those Florida I wonder if they mention bitcoin.

Moe Hansroda [00:33:56] We’ll get to the crypto we still allow. You can have Richard kind of handle the solution piece, but I think, you know, that’s the biggest piece, right? Like I think in the news I saw they’re trying to put in personal finance in the grade nine math education, but that hasn’t passed yet. I saw this news two years ago. I know me and Russia, we’re talking about it. We’re excited. We’re like, you know, we learned how to do taxes because, you know, we had our family members, you know, CPAs, you know, we know how to manage money because of that. It wasn’t because of the school education. And, you know, that’s we got excited because we saw the government, you know, posting something like this. But soon we understood as we are growing up and getting more experience in the field is, you know, government will put up a lot of policies, but barely anything happens out of slow. And that’s why we wanted to be on the field and try to make a small change for our niche market so that at least people within that age group, within that market can see a small, you know, customer gain for the solution that we’re offering. So, you know, I’ll have Richard kind of handle our solution piece. Thanks. I’m sure. Then more as well. Again, if you if you think about the entire the market rate, the stock market, the crypto market, it has evolved so rapidly. And that’s why you have so many people adopting and coming into the market. For example, with the pandemic, in the last two years, we’ve seen so many people actually coming into the stock market and the crypto market than it has ever been before. But if you look at the real estate market and if you ask the same target group, they haven’t really been exposed to the real estate market just because of the friction associated. Sure, there has been an uptick in the number of people that are coming to real estate, but these are the same people that were already in real estate, not the newer generation, not the younger generation like myself. And yet we still have that entry to barrier becoming higher and higher because with time only the down payment that you need to put in has gone up the mortgage that the amount of income you need to qualify has gone up. So it has become harder and harder for people like me and accept to be a part of real estate. So we wanted to create a system that is accessible to anyone and everyone, because right now it’s not. And it is a problem for us because as much as we love putting our money on stocks and crypto, like you said.

Erwin Szeto [00:36:09] It’s not diversified.

Moe Hansroda [00:36:10] It’s not diversified. And then also it’s dependent until it’s in early stages, especially crypto, whatnot, it can be manipulated easily. Like you try putting your money into some kind that was launched a couple of days ago hoping you make 100,000 next like the people might be.

Moe Hansroda [00:36:28] It’s crazy.

Moe Hansroda [00:36:29] And if you really ask that when we did have a customer, it when we talked to a lot of people, we went to malls. We basically gave away a Christmas gift stocking to people understanding their pain points. We went to skating rings, giving away free hot chocolates, trying to understand their band by two different audience. Right. Especially the younger generation. No one knew about it. Everyone has forgotten about owning a house. Most of the people, at least for the next ten, 15 years, because they can get into it. But they still know the gains associated with real estate. They’re like, Hey, my parents own a house, they’re looking for another house, whatnot. So they know the importance of getting into real estate at a younger age. And they also understand there may be there’s one friend out of their entire friend group friend circle, someone who got into real estate now has done fairly well compared to the rest of the.

Erwin Szeto [00:37:18] Group is positive and can you hand up most cellphone number so they can come on.

Moe Hansroda [00:37:22] To make their friends? Sure, sure, sure.

Moe Hansroda [00 :37 :26] Sure. So what we did was again and myself and I should just look that took a step back, looked at all the research we’ve done. How much do these people have as disposable income? Right. Most of the people don’t have that much as disposable income. When you’re young, you have bills to pay, you have debt to pay, you have student loans to pay. And if you look at the disposable income, it’s always in the range of, let’s say. Anywhere from even $50 up until $50,000. Sure, there are some people who are outside of those lines, but most of these people fall into this category. With this category, you. The current real estate market doesn’t really address anyone within that range. You can buy a house for 50,000, at least in turn. Nowadays, people in the in other age don’t think like, Oh, we have to move to Calgary to buy a house. We still want to live here because this is where our family is. This is where our work is. This is where we our friend circle is.

Erwin Szeto [00:38:23] I know it’s cold here, but it’s colder there.

Moe Hansroda [00:38:25] And just to add on to recharge point, I was reading an article average gift sites from parents to their kids is 130 K for a down payment.

Moe Hansroda [00:38:35] And.

Erwin Szeto [00:38:35] That’s across Canada. What is it for? Vancouver, Toronto?

Moe Hansroda [00:38:38] It’s probably doubled that. Right.

Erwin Szeto [00:38:39] Which it’s I think it’s closer to 200 or. Yeah, exactly. And this is what the reporting.

Moe Hansroda [00:38:44] Reporting.

Moe Hansroda [00:38:46] Remember, if it’s longer than 90 days in your bank, then it’s just it’s not a not a gift.

Erwin Szeto [00:38:51] Yeah. So it’s yeah. So much is missed in the data that’s available.

Moe Hansroda [00:38:54] Yeah. There’s so much that’s missed. And also we look at the ones who are not privileged enough to be a part of the real estate game and thanks to our parents. But now we are privileged enough in a way to be a part of real estate, in the real estate. But user research show just talking to people showed us how many these younger people are actually underprivileged and cannot be a part of the real estate game for the next ten, 15 years. And this was a problem for us and us being the younger generation. We wanted to solve it.

Erwin Szeto [00:39:26] You actually think they’ll be able to get in ten, 15 years from now?

Moe Hansroda [00:39:31] I mean, I don’t know. I let me handle that question said earlier.

Erwin Szeto [00:39:35] How can you save fast enough to keep up with the market?

Moe Hansroda [00:39:39] I think it’s not saving. It’s investing.

Erwin Szeto [00:39:42] Okay. Okay. So if you do the right things. Oh, my.

Moe Hansroda [00:39:45] That’s because it’s honesty about financial literacy, right? From day one. Like imagine being 18. You know, my dad is a CPA. He’s like, actually, let’s get a credit card. Let’s build your credit history. I had no clue what a credit history meant because high school doesn’t teach me that. Right. And having the privilege, as Rashad said. Right. Our families were in us. Right. These guys are CPAs. These guys are businesspeople. They know steps, right? They have a RSP fund for us. Everything was set up but around us and being in the target market where a lot of people weren’t, we could see the problem, we could feel the problem, even us buying it as a story, us buying the first house. It was a huge issue because we were on our own. Yeah, we got the help from our family, but it was a difficult process because we had no clue how to buy a house. You know, we’re second time tech startup founders. You know, we have a lot of been like, Yeah, this is easy, but as soon as you get in the real estate market, it’s difficult because it’s your major purchase that you’re doing in a tech stock. You’re investing maybe five or ten grand in real estate; you’re investing 100 grand. And if you have.

Erwin Szeto [00:40:53] Known, you’re tied to a mortgage.

Moe Hansroda [00:40:54] Yeah, exactly.

Erwin Szeto [00:40:55] It’s really it’s a big commitment.

Moe Hansroda [00:40:56] Yep. Yeah.

Moe Hansroda [00:40:57] So like I said, again, that is where we ended up being. We had a roadblock. Okay, there’s no solution. It’s just like, okay, you. You basically put your money in a random coin and hope it goes up by ten next hundred X in the next ten years. And maybe, maybe still I’ll have it. Does that really sound right?

Moe Hansroda [00:41:16] I mean, as far as like financial literacy, like a lot of our clients are white collar, very educated, but some of them come in with no concept of how to invest or anything. And, you know, there.

Erwin Szeto [00:41:30] Were these.

Moe Hansroda [00:41:31] Tenants.

Moe Hansroda [00:41:31] You know, landlords. I mean, like, you know, some of our clients are doctors, lawyers, engineers, smart, smart people. But I mean, you know, the basic concept of landlords allowed them. And, you know, sometimes it’s like we deal with people all the time and sometimes it’s the ones that, you know, that are the smartest, that outwit themselves and overthink the things. And, you know, I think you’re you told me your dad’s a doctor, too, right? Yeah. So, I mean, I don’t know if you got to him different.

Erwin Szeto [00:42:01] Yes. He understands a lot more of the problems and why we need to invest. Yeah.

Moe Hansroda [00:42:05] So and as you’re a father, you got a couple of kids. But I mean, I make sure that, you know, this is going to take priority and your kids are going to know this stuff growing up and we’ve already had.

Erwin Szeto [00:42:16] Discussions with our kids. So first off, my kids are eight and six. You’re already discussions with them about what money is well and what fiat currency is.

Moe Hansroda [00:42:24] Because I remember when I was a I know from mine in Russia that we were outside just playing with our neighbors. That was our only thing.

Moe Hansroda [00:42:30] You can’t go.

Erwin Szeto [00:42:32] See other people.

Moe Hansroda [00:42:33] You know.

Moe Hansroda [00:42:35] So his children will be the rare circumstance where they’ll either, you know, figure out a way to buy their first property or investment.

Erwin Szeto [00:42:43] Property, have their property.

Moe Hansroda [00:42:44] You know. So he’s already got it. So I didn’t want to say that he’s probably already got them.

Moe Hansroda [00:42:48] Set up the money.

Moe Hansroda [00:42:49] But as I was talking to someone else yesterday. And then he’s into real estate investment as well. And he said, Oh, I’ve already gotten the properties for my kids, but they won’t know until they get married. They’ll I will surprise them with the gift because I know for a fact they won’t be able to afford a house when they get married.

Moe Hansroda [00:43:05] Yeah.

Moe Hansroda [00:43:05] I’m like, wow. So it’s a you have to plan now if you are privileged enough so that you can help your kids maybe in 20 years.

Moe Hansroda [00:43:13] I mean, they’re already so while the majority of them are coming out of school, you know, mired in debt and nobody to guide them, right? Yes. So this is going to be a common theme going forward.

Moe Hansroda [00:43:26] Mm hmm.

Erwin Szeto [00:43:26] You blame we can blame whoever we want. But from my experience, second generation investors are much better than first generation investors. So who? We assign the praise for that. Right. Their parents. Parents like you’ve seen this. You’ve seen second generation investors and how much better off they are. Second generation anything? Second generation, cop, doctor, teacher, anything. Yeah, right. You’re better. You’re probably better than your parents were when they started.

Moe Hansroda [00:43:56] Yes.

Moe Hansroda [00:43:56] No.

Erwin Szeto [00:43:57] So we can blame everyone?

Moe Hansroda [00:43:58] Yeah.

Moe Hansroda [00:43:59] I mean, there’s lots of blame to go.

Erwin Szeto [00:44:01] Around, but we know that. We know the path to success.

Moe Hansroda [00:44:03] Yeah.

Moe Hansroda [00:44:04] Yeah. So even so, going back to where I left off, even with, let’s say we now as kids, we had money saved up and had some help from parents and family, too. And still then you look at all the debt to income ratio, all of us like, you know, we have all that debt and we have a car that’s leased out and you add all of that up, you still can’t get into real estate market even if you have the down payment, even if you are making good money, as we are both in the field too and where.

Erwin Szeto [00:44:32] I have both those things and I had a girlfriend right now.

Moe Hansroda [00:44:36] Debt.

Erwin Szeto [00:44:36] Less money than you guys do.

Moe Hansroda [00:44:37] So please continue.

Moe Hansroda [00:44:41] Well, so it’s hard. Even if you have the money, you don’t have entry point, especially in the in the generation that we are targeting. That’s when we decided together to come build a solution that can cater the entire younger audience. And it doesn’t it doesn’t start from the at the younger generation. It can it caters to us, the entire population. Like you said, there’s a lot of these folks who are really smart, who are here, who are doctors, engineers, who still don’t have that literacy enough to make that right. Chuck And a.

Erwin Szeto [00:45:11] Lot of people want an easier.

Moe Hansroda [00:45:12] And easier solution because with the with the day and time today, people are used to more of that debt, that debt. And it’s even the tick out process. Everything is becoming so much simpler that you take away so much friction. But real estate is one of the biggest sectors in the world but has remained the same ever since. You’ve gotten to the point, sure, the prices are increasing, but the technology associated with it has stayed the same.

Erwin Szeto [00:45:38] Yeah, it’s pretty bad.

Moe Hansroda [00:45:39] Pretty bad. And it was outrageous. That’s when we decided to build a system where you can buy fractions of a house. We looked at Bitcoin, we looked at stocks, we looked at what Wealthsimple is doing now. You can buy a fraction of a stuff, you can buy a fraction of a Bitcoin, you can buy fractions of crypto, but can you buy fractions of houses.

Erwin Szeto [00:45:58] No shit that needs to happen.

Moe Hansroda [00:46:01] Mm. That’s when we, we saw an opportunity and the need was confirmed by other, by talking to people. We need to build this from ground up. But we basically said, hey, we buy a house, we divide it into $50 units. You can now invest anywhere from 50 to 50000, whatever the number that person wants to. Now, you are a part of the real estate.

Erwin Szeto [00:46:25] So are you guys capping it?

Moe Hansroda [00:46:27] There is a cap just to make sure. I mean, Russia will go into more of that governance piece as well, but not for me.

Erwin Szeto [00:46:32] Right. I can’t. I didn’t. I’m not.

Moe Hansroda [00:46:35] Accredited. Yeah. Yeah.

Erwin Szeto [00:46:36] So no cap, right? All right.

Moe Hansroda [00:46:39] Anyone who’s anyone who’s who who’s already in the real estate market, I’m sure you are most likely that not an accredited investor.

Moe Hansroda [00:46:48] Yeah, because I mean, you have two properties is worth more than 3 million. Yeah.

Moe Hansroda [00:46:52] There you go. You like it?

Moe Hansroda [00:46:53] Is that then you’re good. There’s no limit when it comes to that if you are an accredited. But then sure, we still do have to play by the book. We need to ensure that we are looking at your risk to your risk ratio and we are giving them advice through our partners to tell them this is how much you can invest carefully in this so that they’re not just taking a random bet on the real estate market. We are also still mitigating the risk through all these other partners that we have. For example, like Mark comes with so much experience, we want him to advice. We want him to tell us if we want him to tell me how much you to invest in this particular property. I want to diversify my portfolio as well. For example, we looked at rates right when you when it comes to a real you’re putting the money on the intact portfolio that they have. But I personally prefer putting my money in each house.

Moe Hansroda [00:47:46] Because you look at commercial retraite now last five years, most of them. Actually losing 8% over the last five years, which is a crazy stat. I know COVID is an anomaly where, you know, rates, all commercial rates went down because there’s office space. But, you know, the as Richard talked about, a lot of people obviously first don’t even know about rates. But when they look at the returns, the younger generations, you know, used to 40, 50% return in crypto. Imagine showing them, right? They’re like, no, what the hell? Right. And that’s by using individual real estate and you not providing them an actual house in their thousand dollars into this. And, you know, we’re going to maybe finance, maybe cash, whatever that is. You’re leveraging your debt as well. If the market goes up by 10%, you’re probably making 20, 22 back depending on how you’re leveraging your debt. And that was the case. Right. A lot of folks within the target market wanted to be part of individual fractional ownership.

Erwin Szeto [00:48:43] Right. Actually, you just mentioned something different. That’s why I highlighted a lot. People don’t understand our returns are so high because we’re so leveraged.

Moe Hansroda [00:48:49] Exactly.

Erwin Szeto [00:48:50] Exactly. Like you put on 20%, for example. Then returns are basically if property goes up 3%.

Moe Hansroda [00:48:56] Your cash in cash is great, even if the market is going up ten, 15%.

Moe Hansroda [00:49:01] And the part being is that a lot of younger generation, they look at this names, right, all that and then they’re like, okay, it’s 23%. 23% doesn’t really mean much to me when I’m making maybe 20% over four months. But they don’t see the leverage piece because you’re putting 10% down. Let’s say you put 10% down, 90% leverage and then yo, nine times whatever the profit that you’re making. So if it is 10%, you’re making 90% on your down.

Erwin Szeto [00:49:29] And that’s just an example we don’t want. Yeah. Are you guys actually finding lending for this 90% loan value?

Moe Hansroda [00:49:36] You know.

Moe Hansroda [00:49:36] And people are like, I mean, you know, I get the younger generation, you know, talk about crypto and stocks and you can get a mortgage for that stuff. You know, you can get a line of credit for whatever you want to do, but.

Erwin Szeto [00:49:48] That will lend you money for.

Moe Hansroda [00:49:49] It. You know, mortgages, you know, it’s, you know, you can’t beat at night, you know, and explain to people bad debt, good debt, etc.. Right. And okay, you know, what are you going to do in ten years? You going to cash in everything, sit there? No, not just stay in debt. The more the more debt you have, the more you make. Right. And they don’t seem to get that right. And he explained to people that, you know, how does this person by 30 properties I go they go further into debt. I said you know, I tell them, you know, these properties, they appreciate the mortgage gets paid down and, you know, their equity increases. They’ll go back to the bank and borrow even more money. And I said, go buy it. And then, you know, rinse and repeat. It’s a common formula and that’s just how it works. And, you know, the people have to realize that leverage is everything. And this game, they’ll do better than the person who doesn’t.

Erwin Szeto [00:50:44] And this isn’t financial advice.

Moe Hansroda [00:50:46] No, no.

Moe Hansroda [00:50:47] I just don’t example like I know so many of my friends, they’re like 26, 25, two years after university, they have money sitting in their savings account. A 3040 K Because they’re working jobs. They say they’re making 8090 K in Toronto and they have money saved up, but they’re putting it just in their savings. They may be putting some in stocks, some in crypto, but most of their holding is in savings because they think saving the money, they don’t think what inflation means. Right. It last year, inflation was, what, eight, 9% or something.

Erwin Szeto [00:51:18] Seven.

Moe Hansroda [00:51:19] Something crazy. And for them, another example rate for them is this year also built 30 K I can tell you like 80% of my graduating class will pay that 30 K right away if they have money sitting because I don’t like that I’d.

Erwin Szeto [00:51:35] Wait that oh as long as I could.

Moe Hansroda [00:51:36] When you look at the interest rate right now to 24, the government’s doing that. It’s close to 1%. You’re paying what you can borrow 1%.

Moe Hansroda [00:51:44] Exactly.

Moe Hansroda [00:51:46] Aces are like, you know, understanding like from financially.

Erwin Szeto [00:51:50] I got I go to lending to both.

Moe Hansroda [00:51:52] Oh give me 5%.

Moe Hansroda [00:51:59] Or 14 from somebody else. Right.

Erwin Szeto [00:52:01] So yeah, this is not this is terrible for.

Moe Hansroda [00:52:03] Everybody, for sure. Yeah.

Erwin Szeto [00:52:05] Gentlemen, please, let’s go back to the investment, though. What is the investment? What is the underlying? Because that yeah, if the underlying is good that protects the investment, right? Because we’ve seen epic fails of not very good investments. So please, what is the investment?

Moe Hansroda [00:52:19] So as a.

Erwin Szeto [00:52:19] Metaverse, is it part of the.

Moe Hansroda [00:52:21] Metaverse? Well, it’ll be actual real estate like. Okay, brick and mortar. Right. Okay. You know where someone’s not going to wake up and decide to sell it right away? Right. So, you know, we’re going to do a mix of different things, see what works right now. It’s even though myself we’re in KW, A, C, R, companies and KW C, I would prefer if we bought these properties that we’re going to be getting funding for down our way. But the numbers just unfortunately don’t work with how prices have. Skyrocketed. So our first couple of investments have been out of town and one’s in Kirkland Lake, the home of Alan Thicke, and found a property there. And Elizabeth Kelley, I think you know her. She her husband runs a property management company up there. So they’re helping us. We got a great deal. It’s a lower end unit. But I mean, the numbers are terrific for what we’re trying to do and what would be a down payment here. You can buy the whole unit up there. And then we picked up a duplex in that that one. Kirkland Lake is a four plex duplex that we got off market is in Peterborough and we’re looking to eventually move the current tenants out after their school term and raise these students and raise the rent. I forget, I think we want to store Stanford for school and the other unit is vacant. We’re going to be doing some work on that one and try to get top dollar for both units come Christmas because that’s when that term ends and you know, have a nice cash flowing property that we can either flip or, you know, a profit or cash flow and hold long term and see what the appreciations like between two and five years. So, you know, depending on the situation, it’s going to determine what we do with these properties. Right. You know, might be buy and hold. It will be the, you know, the majority of what we do. But I mean, you know, if the market dictates a flip scenario and the money’s there to be made, you know, that’s how we’ll go about it. Right. And hopefully these smaller investors can enjoy these types of return and it’ll be a little well, be a lot safer than crypto, safer than the stock market.

Erwin Szeto [00:54:34] The real underlying. Yeah, the real physical.

Moe Hansroda [00:54:37] Yeah, exactly. The underlying asset is stable and you can’t get a better market than southern Ontario. And as I was alluding to earlier, yeah, Vancouver and Toronto are basically, you know, out of most people’s range and you know, so they’re looking at other parts of southern Ontario and we’re right in that area. And I think there’s lots of room to run. So I think the next five years is when you’ll see another big leg up, massive gains. And I think people will look back on this time like slightly post-COVID, if you can call it that, where they’ll say, you know what, the war is going on, rate hikes are coming. This is actually a good chance to buy because.

Erwin Szeto [00:55:21] These are temporary.

Moe Hansroda [00:55:21] Yeah, this is just going to be before the next run up. And, you know, even in the last 6 to 8 weeks, because we’re talking in early April 22 or now with the difference between the end of January, early February to now, we haven’t seen the amount of bidding wars that were going on. You know, slowly, you know, conditions and inspections have come back on some properties, especially where we are, that.

Erwin Szeto [00:55:46] We’re doing the same thing.

Moe Hansroda [00:55:47] And but, I mean, I think this would be short lived. I don’t think our home inspectors should get too cozy because they go back to the crazy as soon enough. That’s basically what we’re doing and that’s where I’m trying to help these guys. And they’re obviously taking care of the tech portion and the platform and they have some great developers and Nfts will also be a part of it. They have no idea how they really work. I just keep hearing it and I’m trying to figure it out. But it’s one of those things that like crypto, I still, you know, understand the basic concept but charged wrap your head around on security.

Erwin Szeto [00:56:24] Yeah, it’s Internet security.

Moe Hansroda [00:56:26] You know, but blockchain, I mean, you know, I don’t know what these guys have planned as far as the technical aspect, but they’re breaking. And I believe they’ll have a solution that works. And it’ll be different than someone like Adi, where, you know, they’re looking for, I believe, minimum 20 $500 dollars.

Moe Hansroda [00:56:46] Is it a dollar?

Moe Hansroda [00:56:47] Maximum is.

Moe Hansroda [00:56:49] 2300.

Moe Hansroda [00:56:50] 1500. Okay.

Moe Hansroda [00:56:51] Yeah, they have a holding period I think for five years. You have to.

Erwin Szeto [00:56:55] Hold back folks. We love out.

Moe Hansroda [00:56:57] Yeah, for sure.

Erwin Szeto [00:56:58] Feel free to like. I’m not positive. I’m not sure why. The cap is 15, 1500.

Moe Hansroda [00:57:03] I felt was 2500. That’s where I get the number of I thought it was accredited investor. I know there’s another platform out there.

Erwin Szeto [00:57:08] And yeah, they’re coming out.

Moe Hansroda [00:57:09] Willow and they have a little bit of a different structure, but this one should be a lot easier for junior investors to migrate, and it’ll be more along the lines of something like.

Erwin Szeto [00:57:21] Wealthsimple And then so how you describe the investment, is it a Dow? Is it or is this blockchain based.

Moe Hansroda [00:57:27] Be tokenized essentially? So you know, just to kind of go into a background about Nfts, right the last couple of years because of COVID, everyone’s, you know, on their computers and Facebook changing their name to meta metaverse and everyone going into buying, you know, land on a server, right? All the influencers are, you know, putting their own tokens out, right? You look at the nut boys, right? They had a huge token offering. A lot of their followers, they raised $4 million. And the tokens are nothing. Tokens just provide. Hey, the boys minted our token on a network and giving it to, let’s say, Richard and me. What this token holds is, let’s say, you know, they get some free merch, you know, maybe they get like, say, meet ups, exclusive meet ups in Toronto, exclusive meet ups everywhere. That’s what the token mens means for the.

Erwin Szeto [00:58:14] A membership card.

Moe Hansroda [00:58:15] Exactly. From a from a digital standpoint, how we are looking to use NFT is and combining it with the real estate is when we buy real estate, we put it under a smart contract. So when we mint tokens, let’s say we’re using ethereum’s blockchain to mint a smart get a smart contract together and mentor token through that. What we’re doing is we’re making a set amount of tokens that are worth a set amount of value for the real estate that we have on our platform. So now we are basically using digital contracts in order to give you a token, give Rashad a token, give more token, give myself a token. And when you hold this token, you’ll get obviously rental income. And when you want to trade it in, you know, we look at appreciation even before the house is sold to give you the appreciated value of the token. How real estate right now it’s done is I buy a house, I get investors, I sell the house, I give you the profits. But why can we change it? How stocks are, right? Real estate always is appreciating, right? But not.

Erwin Szeto [00:59:19] Always.

Moe Hansroda [00:59:20] But depends on where long term gain.

Moe Hansroda [00:59:23] You’re looking at. Let’s say from 2000 to 2019, it’s in Ontario. It’s gone up 8 to 10%.

Erwin Szeto [00:59:29] Ontario has been a gift.

Moe Hansroda [00:59:30] Yeah.

Erwin Szeto [00:59:30] All places have performed the same. But sorry, Alberta.

Moe Hansroda [00:59:33] Yeah, you, you look how you look it from a being a safer investment and a long term outlook. But if you have tokenisation and give tokens to, let’s say 100 people and you provide them, hey, appreciation if they want to trade it in when they need the money, it’s a better angle for them to get into real estate on day one and try it out for themselves. Right. And by providing them tokenization, you can also provide governance, as you talked about. DAO We’re not there yet, but what we’re doing is providing individual decision making. Let’s say we have a house in Kirkland Lake for Plex. You know, we want to sell it. We can, you know, send out a quick update on our application. Hey, what do you want to do? So once we have a majority vote, we can sell it. So we’re providing a vehicle, right? As a technology platform, what we want to get into the future is homeowners can list their homes. We’re not going to charge them 5% of the home value. So there’s a huge positive advantage for them. On the flip side, you have fractional investors, people that want to buy this token, this NFT, but now this NFT is backed by an actual physical asset that you can touch. So it provides you the best of the technology world, but also it hedges you against, you know, a scam like how a lot of NFT projects have been. But the technology itself.

Erwin Szeto [01:00:47] Just tied to something in cyberspace.

Moe Hansroda [01:00:49] Exactly. But yeah, if the network shuts down. Yes, there’s that. But then you can back it up and you can have those things in place as well.

Erwin Szeto [01:00:56] Know my point is more like digital art.

Moe Hansroda [01:00:58] Like for sure. Yeah.

Erwin Szeto [01:01:00] What is it? How do you have that?

Moe Hansroda [01:01:02] You buy a fire.

Erwin Szeto [01:01:04] Across the market for it, you know, versus a house in southern Ontario.

Moe Hansroda [01:01:08] And so, again, like I’m sure there’s.

Erwin Szeto [01:01:09] A market for it.

Moe Hansroda [01:01:11] There’s definitely a market. And then also we want to be able to if you are going after the younger generation who are into crypto and all these other assets, digital assets, we want to be able to talk the same language that they are able to understand. We don’t want to go to them and be like, Hey, this is the mortgage, this is the agreement you assigned. This is but you are getting all that stuff. We can still do it. There’s nothing wrong with it. But we don’t want to reinvent the wheel if it is already being invented by a different could the cryptocurrency the digital asset we’re just building that together. There’s real estate on this site. There’s the digital tokens. On the other hand, we have basically marrying them together and we are basically telling people here and stuff, putting your money on an asset and betting on it, why don’t you do the same thing that you would be doing with crypto? But instead of just betting on it, why don’t you take a calculated risk with us? You’d not only take appreciation, but there’s also a rental yield that will be paid out to you on a quarterly basis or whatever that that we get to that point. And nowadays, if you look at a lot of these crypto projects that are coming up, even I saw a project a couple of days ago where they are basically the concept is you initially buy into these currencies the digital tokens and they want you to hold it because more people hold this this particular token, the value gets, it goes up because of supply and demand again, just like how it is with real estate, more people holding and don’t want to sell to sell their assets. So there’s less supply on the market. So that’s the value. Each token goes up. But now that has no there’s nothing backing it up. It’s just that me buying a digital token and just keeping it up just because it’s going to go up, it’s just manipulation of the market. Unless there’s a real, real utility to it. With our kids, what we are doing is it’s a house. You’re buying a house and we are going to keep it without selling it. And so you can so can you. If you want to sell it, that’s completely fine. But you will be losing out on the entire position that we would be benefiting Oliver when we sell the house. But you will still be able to benefited partially. There’s nothing like that right now. You can’t benefit partially out of a position either you by yourself, right. What we are creating is that platform that you can buy into whenever you want. You can sell whenever you want. And at the same time, if you hold it for a longer period of time, you’re going to get more appreciation. And also you’re going to get each rental yield that’s going to be paid out to you. So it’s a simple system that the younger generations of about and the real estate market not so much a bring into together so that now you can invest in real estate without actually having to gain more knowledge. But this will make them research into more into real estate. Exactly right.

Erwin Szeto [01:04:04] You have something at least exactly the easier starting point than buying $1,000,000 house.

Moe Hansroda [01:04:10] Exactly.

Erwin Szeto [01:04:12] I’m in this business to understand how hard it is to get someone off of zero to from 0 to $1000000 investment property. Exactly. So you mentioned yield paid for people who are holding tokens. Is that paid in cash? Is that paying more tokens?

Moe Hansroda [01:04:24] That’s something we’re working on. It probably would be paid in cryptocurrency. We can use Stablecoins, which are basically like, let’s say Usdc is pegged with a USD dollar, so people get digital currency like that.

Erwin Szeto [01:04:36] So it’s going to be flipped to cash.

Moe Hansroda [01:04:38] If they want to use fiat, they can flip at any time.

Moe Hansroda [01:04:40] They can flip or they can.

Moe Hansroda [01:04:45] Okay. We all need.

Erwin Szeto [01:04:46] Cash in our lives.

Moe Hansroda [01:04:48] Well.

Erwin Szeto [01:04:49] No one’s taking my usdc. I want to go buy lunch first by inchworm.

Moe Hansroda [01:04:54] This whole piece about having usdc or digital tokens that that’s back to a dollar is now you can do whatever you want, right? You can buy more unit in the same.

Erwin Szeto [01:05:02] House and your stake.

Moe Hansroda [01:05:03] It. Yeah there’s so much utility to it.

Moe Hansroda [01:05:06] You look at now digital.

Erwin Szeto [01:05:08] Thing we’re not so there’s are to be a couple of people who think we’re nuts and we’re talking to foreign language.

Moe Hansroda [01:05:12] Yeah.

Erwin Szeto [01:05:14] So I have a few more questions. Following questions. How does someone exit their investment? So say I buy say up about thousand dollars, buy to buy tokens, not as a fiat to buy tokens. How do I exit my integrity?

Moe Hansroda [01:05:26] We have a one year hold period just so that we get the demand and supply side. You know, getting to a point where we can do the buy sell for now what we’re doing is let’s say you out holds a token for 12 months. He wants to give it back. He wants to make the appreciation. He just, you know, messages the company we give him the money or the digital currency with appreciation back to his wallet account that’s connected with the real ME’s account. So he gets it back, let’s say, in 24 hours.

Erwin Szeto [01:05:53] And there’s going to be a limit on how many people can redeem again.

Moe Hansroda [01:05:57] Right now, we are seeing a one year hold period. And the thing is, you know, we have a we have a limit on how much you can invest. Let’s say you can invest hundred K 200 on a real property because then when you look at the governance piece, you hold the most value then, right? We want to make it truly decentralized where people actually have the voting power. They feel empowered. Let’s say, you know, our limit is five key. Again, that’s something we’re deciding on and working on as we added this.

Erwin Szeto [01:06:23] 15 K I just checked. Yeah, that’s the max. 1500 1500.

Moe Hansroda [01:06:27] Okay.

Moe Hansroda [01:06:28] Yeah. So I think that’s the piece where we, where we say, okay.

Erwin Szeto [01:06:32] Sorry I said that wrong. That 15 to 1500. Yes. 5500 is the maximum for.

Moe Hansroda [01:06:37] Let’s say our limit is 5000. So when you invest 5000 and you want that money back, it’s easier for us to, you know, go to our wallet or our own fund and just give it back to you. Right, right, right. But rather than someone investing 100 grand.

Erwin Szeto [01:06:50] What have you moved on?

Moe Hansroda [01:06:51] But now when you make that system and you have people buying and selling, we don’t even need to be involved. We truly become a platform. You want to sell your token, someone else can buy it at appreciated price and they can hold it right?

Erwin Szeto [01:07:04] So foresee it wouldn’t be the most liquid thing and the bit and probably pretty wide on it. Yeah. Like years of market makers for this.

Moe Hansroda [01:07:10] No I mean like you said he’s going to, you know, it’ll take a while to get to that point where it’s actually, you know, tradable, you know, on a day to day basis. Right. But up until that point where there’s enough users in the platform big enough, you know, you kind of be stuck in it. But the end goal is to make it like basically Wealthsimple for real estate.

Moe Hansroda [01:07:31] Right?

Erwin Szeto [01:07:32] And you like structured exits, for example. Like in five years we’re going to sell it no matter what type thing or nothing.

Moe Hansroda [01:07:38] Nothing, you know.

Erwin Szeto [01:07:41] You’re ever going to refi it.

Moe Hansroda [01:07:42] It’s you know, I mean.

Moe Hansroda [01:07:45] It’s all the decision after the folks that own the tokens because we let them decide because.

Erwin Szeto [01:07:49] There’s like an.

Moe Hansroda [01:07:51] Exactly. I mean, that’s where we want to get into. Right? Basically making everything decentralized.

Moe Hansroda [01:07:56] Right. First couple of property properties, people like Mo is going to make the decisions. But once we get to that point where we have enough users being able to make that decision with still some expertize from people like MO, we don’t want them just going crazy clicking a button. Yes, yes, yes. Let’s help this property.

Moe Hansroda [01:08:12] To be trigger happy.

Moe Hansroda [01:08:14] And like, I mean, you know, like I said, this.

Erwin Szeto [01:08:17] Isn’t quick money, you know, probably mean understand that. But still.

Moe Hansroda [01:08:20] I mean, if we if we have a market run like we did back in late January, early February, that’s where, you know, it could get exciting. And, you know, everybody can decide, okay, yeah, you know what, the 51% want to sell and get one wants to hold. Right. But, you know, the 51% that sold would have been right, you know, in this time around. Right. Especially with the, you know, incremental dip. Right.

Moe Hansroda [01:08:43] So it is.

Erwin Szeto [01:08:44] Again, it’s purely me to get off zero. Yeah. And you can afford to buy your own property. You should probably buy your own property. Yeah. And make your own decisions.

Moe Hansroda [01:08:51] You know, likely not going to be the case. Right.

Erwin Szeto [01:08:54] That’s not the target investor for this.

Moe Hansroda [01:08:56] I mean.

Erwin Szeto [01:08:57] Yeah, I’ll just give you a quick example. I’ve been criticized for not doing our ISP’s right, because it is not too much. I have too much going on my life. I don’t have the time for it. My kids are each on a house, so yeah, they’re doing all right.

Moe Hansroda [01:09:12] Yeah. It makes sense.

Moe Hansroda [01:09:13] That our ISP’s or ISP’s like, you know, a lot, a lot of that stuff is, you know, for the working individual, 9 to 5. Yeah. It’s set up for them. Yeah.

Erwin Szeto [01:09:23] And or if he’s so much smaller than our RSP.

Moe Hansroda [01:09:27] It’s so small, at least it’s.

Moe Hansroda [01:09:29] Something you know better than nothing, right. Yeah. Yeah. But I mean, if you know what you’re doing, you just to do other things.

Erwin Szeto [01:09:36] Really cool. And can you share what your criteria is for an investment property?

Moe Hansroda [01:09:41] We don’t really have a criteria, whatever the deal is. So, I mean, same as like, you know, your realtor, your realty taking investors around and showing them places, you know, it’s just a matter of what works. Obviously, cash flow and future appreciation come into. Mm hmm. You know, they’re probably the top two things.

Moe Hansroda [01:10:01] To most point, right? That’s why we looked at Kirkland Lake and Peterborough, because you’re looking at a cap rate of at least 7 to 8%. So now you can give some rental yield back to the folks because if you buy something in Toronto, it’s maybe a percent.

Erwin Szeto [01:10:13] Yeah, yeah. Just give my credit card so you can take money from me each month, you know? Yeah. It’s not going to make it work unless you buy cash. So. Sorry. Or these properties that you mentioned that computer broker can make. There’s mortgages on them right now.

Moe Hansroda [01:10:27] It’s all cash, all because basically you got to.

Erwin Szeto [01:10:30] Move because how else are you going to get who’s going to who’s going to qualify for the mortgage?

Moe Hansroda [01:10:33] Exactly.

Moe Hansroda [01:10:33] So once you kind of move the model, get into the market, then you can look into, you know, getting some private folks, private funds involved. Right. Like there’s I know the pension plan does a lot of investing in real estate. So getting folks like this behind you so that they can fund your operations, maybe work with banks on the commercial side where we can get some money that’s asset backed so we can get to 80% in loan, 70% in loan. That 30% could be people’s money put in. So appreciation could be leveraged as well over time.

Erwin Szeto [01:11:03] And then the structure and the regulation for this investment is a fall under Securities Commission.

Moe Hansroda [01:11:07] So these I’ll see if there’s an again, we are looking at an LP structure, but if you look into, let’s say a token, which is a security, right, there’s four criterias. So again, you know, we’re working through the legal side. We have some partners. But if you use tokenization, it doesn’t fall under securities for now.

Moe Hansroda [01:11:27] I know.

Moe Hansroda [01:11:28] Exactly. And you look at some of these companies in the U.S. doing it for, I think, the last two years and getting over 100 key users. And there’s no, you know, rules or regulations because you’re basically getting smaller amount of money. You’re not getting hundred K from a non-eligible investor. You may be getting five K from that person. So the limit itself is very small per individual and if you’re tokenizing it and the transaction that happens is done through digital currency to a token. So you’re a security has to be a cash input. So if you can change that, it currently as of today, it doesn’t fall under that.

Erwin Szeto [01:12:06] I can imagine how long things will take if the government gets involved with securitization in time.

Moe Hansroda [01:12:09] If you really think about it also like we are truly a platform, at the end of the day, we are not selling securities like looking at the concept of it. We are right now currently you see people, four people, five people getting together and buying a house and they don’t have to go through and make a deal or try to understand if they are accredited, non-accredited when you are putting, let’s say me and more in offshore, then let’s say for a purpose decide to buy a house together. But put, let’s say out of the ten of 20% that we are going to put, let’s say each of us take 5% and 5% means 50,000 or a hundred thousand doesn’t really matter. No one’s going to check if you are an accredited, non-accredited whatnot, but you are still able to do it and it’s completely legal. And what we are trying to do is the same thing. We are trying to bring in stuff for people. We are trying to maybe bring people together per property. We are trying to break 200 people per property. We are not. We are we are basically bringing them together to buy that entire property. So we are truly becoming a platform, a middleman to actually provide. Hey, there are these are some great opportunities for you guys to invest. And if, on the other hand, we are bringing people, hey, here’s how you can invest using tokens and we are bringing two together. And then now it’s a closed community for that house, but for, let’s say, four houses that we have in Kirkland Lake, let’s say we get 200 investors through this platform. So it’s 200 people closed in. And look with that house. They’re married to the house now. They make whatever the decisions, they try to do whatever they want with the house. So it’s exactly how we would want a house bid for or for us. It’s now with 100 people with the medium to do that communication for us, we can make easy decisions. Right? Right now, let’s say more wants to be in the House. We all agree we pay in the House, but when it is 100 people, you can’t necessarily do it the all the way platform. To make that decision, you need a structure. That is what we are bringing into our platform as well.

Erwin Szeto [01:14:01] You know, I look forward to when this all works because I might want some early exits on some of my properties while maintaining a lot of ownership.

Moe Hansroda [01:14:08] Exactly. And I mean, it would be no different than, you know, buying a stock and getting something in the mail, like a proxy vote or whatever, that where, you know, they expect you to chime in. And, you know, like I mean, it may not matter depending on who the major shareholders are, but the term we’ve bandied about is democratization. So I mean, that that’s how we’re going to look at it. And small investors, they, you know, in that thousand, $2,000 range, there’s no way you can get in the market. There’s nothing you can do. You can’t even pay legal fees with that name. Right. So, I mean, to get a piece, you know, real estate and, you know, consider yourself a real estate investor might be the only way to do it.

Erwin Szeto [01:14:51] Could I ever, ever use, like, real me and offer up 49% of one of my real estate properties?

Moe Hansroda [01:14:57] So that’s something we looked at. It’s just it’s difficult because, you know, you probably have to put in a property in an LLC, like if you are going in the States and then using that, putting that LLC in a smart contract so that people can buy it. So it’s hard to do fractional. We looked into it maybe in the future, okay, because it.

Erwin Szeto [01:15:16] Can be posted.

Moe Hansroda [01:15:16] It opens up your, you know, black equity and gives you cash right away.

Moe Hansroda [01:15:21] Exactly. So like I said, we wanted to start from that initially because we always believe in technology. And we again, Moore is a great guy when it comes to real estate making those decision. But at the same time, let’s say for us to scale up, right, like we can be going around trying to find properties every day, let’s say we grow into.

Erwin Szeto [01:15:41] You know, through every day. I have property. You found 49% of some of them do that.

Moe Hansroda [01:15:46] So we want to get into the place of even for our in our kids example, we got a house and I wanted to tell if I can sell a portion of it and liquidate that. But I couldn’t. I had to sell my entire property because that’s the only way to get out of the investment. So we looked at, okay, for us to become truly a platform and to be able to scale this up, we need to really become the platform that connects us to sites. Right now we are doing this, but right now buying properties and doing all that. But we want to get to a point. This technology, you let’s say how you want to put your property down. We do the evaluation using all of the algorithm that’s involved. We said this is the price that we can offer you for this many shares. And of course, mitigating the risk at that point as well. And then getting to that point where you can still own 51%, 49% goes in here between 49%. And when you get to that point, again, this is very long term. But again, that is that is sort of the direction that we would love to go forward.

Moe Hansroda [01:16:45] And I recently picked up a triplex that we were going to throw it on the platform and I was going to do exactly what you’re saying. But I think there is a huge market out there for that because, I mean, what you’re suggesting is, you know what, I can avoid going to the bank and doing a refi and, you know, giving them. All that information, I can just go to this platform, raise the money, you know, have it on there.

Erwin Szeto [01:17:11] Right. Joint venture partner? Yes. Mean very enjoy a partner.

Moe Hansroda [01:17:13] Exactly. And so, I mean, but in that instance, you know, then you would have people that own these properties and decide, okay, something happens in their personal life. They need to sell that property. Like, you know, what’s the exit strategy? There are more investors going to take the house out or are you just going to have to basically make everybody whole that invested and, you know, plus whatever appreciation they have and then take the unit back. So it gets a little bit complicated. That’s why we’re just doing it in house for now. And then later as it grows out, then we can, you know, see what kind of model there is for that.

Moe Hansroda [01:17:48] Because in that model it’s very hard to leverage that as well. If I’m taking, say, 40%, I’m giving you 40% cash now appreciation. How does that work? Do I get 40% off your returns or do I get 40% of just appreciation? Right. It gets tricky. And we actually, you know, did a couple of test runs. And, I mean, we still made money for some of our family and friends that put in money, whether in our first two or three properties that we you know, we didn’t launch. We just did test runs on. It made sense. But it’s just that aspect of real estate has always done well with leverage. Right. And in this case, maybe there’s a way we can do both so that homeowners happy because it’s easy for them and then the fractional investor is happy as well.

Erwin Szeto [01:18:28] So we mentioned stocks and shares a couple of times, and one of the things that shareholders don’t like is share dilution. So how do you control I mean, tokens are issued for a property.

Moe Hansroda [01:18:38] Property will have a finite amount of tokens that are issued on day one. So the tokens can increase or decrease because on a smart chain, it’s a contract you’re writing. So once a contract’s written, you can change it. So it’s, you know, you can say if it was just a corporation, we can just issue more shares. But on an actual blockchain, you cannot. So the people that get the tokens, there’s no more tokens that are made by us. But what we can do is these people can buy and sell within a platform and long.

Erwin Szeto [01:19:09] Term those are the same tokens. These aren’t new tokens. These are.

Moe Hansroda [01:19:11] Not. Yeah, exactly. Imagine now once we get to the point where we have that many uses but finite tokens, now you have that marketplace to buy and sell whenever you.

Erwin Szeto [01:19:20] Write the name of Nfts. And they’re finite.

Moe Hansroda [01:19:24] Exactly.

Erwin Szeto [01:19:25] That’s where it should be.

Moe Hansroda [01:19:26] Before it’s finite. Right?

Erwin Szeto [01:19:28] Oh, it’s slowly coming. Finite. Yeah, yeah.

Moe Hansroda [01:19:31] There’s, um, I think 2 million left to be mined somewhere. But then I think this crazy number, 3 million, has been lost by people.

Erwin Szeto [01:19:38] Who know it’s how much we lost and how people refuse to sell it no matter what.

Moe Hansroda [01:19:42] Yeah, all right. I lost some but 100 bucks worth the last two seed price.

Erwin Szeto [01:19:47] It’s only it’s worth on bucks today or worth?

Moe Hansroda [01:19:50] It’s probably a no. It’s probably worth about three 400 now. But I mean, I contacted.

Moe Hansroda [01:19:57] Point and even to Coinbase.

Moe Hansroda [01:19:59] To you know what I don’t want it to sales give it to charity. They wouldn’t even do that.

Erwin Szeto [01:20:04] They can’t know they can’t access it. It’s gone.

Moe Hansroda [01:20:06] They can access to it.

Moe Hansroda [01:20:07] So just in the ether, just sitting there until I stopped looking at it because, you know, it can be a thousand bucks now, right?

Moe Hansroda [01:20:13] Yeah.

Erwin Szeto [01:20:14] That’s such a weird, crazy thing. Yeah. I had a friend who lost a bunch and went to see a hypnotherapist to see. They figured his password didn’t work out.

Moe Hansroda [01:20:24] That’s crazy. I went to a therapist.

Erwin Szeto [01:20:26] Hypnotherapist.

Moe Hansroda [01:20:27] Oh, okay.

Moe Hansroda [01:20:28] There’s the guy from.

Erwin Szeto [01:20:29] I remember his password.

Moe Hansroda [01:20:30] I was reading a story from 2010, 2011 in England. He, he bought pizza with a bunch and he had a bunch in his wallet and he threw away the drive that had the password. And he’s still fighting with Syria somewhere in England to dig up the landfill.

Moe Hansroda [01:20:49] Because I heard it was.

Moe Hansroda [01:20:50] Half a billion dollars or something crazy and then touch.

Erwin Szeto [01:20:54] It. It’s gone. Hey, you won’t find it too well.

Moe Hansroda [01:20:57] He’s got all this stuff figured out.

Erwin Szeto [01:20:59] Yeah. People that would. That would help find it for a piece. Yeah.

Moe Hansroda [01:21:02] It’s a funny piece is I remember my password, but I did invest so it was on at that point when I was in undergrad doing my undergrad 2000. This is back in 20 1514. I think I wanted a test outside, but I think I put one buck or two bucks and it’s now I somehow I was able to log in a few days ago. It’s one back to back, I think it was close to $20, whatnot. So I’m like, only if I had put maybe 100,000 or 10,000, forget about like, jeez, I actually tried it out, but of course, didn’t keep track of that. But.

Erwin Szeto [01:21:41] Fascinating. Well, gentlemen, this is fascinating stuff. I wish you all the best. How can people follow along your journey?

Moe Hansroda [01:21:48] So we have a landing page on real me property. Okay, so they can join the waitlist. So for the first 10,000 people, we’re going to be launching our MVP, like our minimum viable product platform, so that they can, you know, get into the first two investments. So that should be going live in the next 30 days. But, you know, they should be able to sign up on real me property, okay. Through their email. And once our platform life, at least for MVP use, they’ll be the first ones to use it.

Moe Hansroda [01:22:16] And then they can also follow us on social media, tik-tok, Instagram and Facebook as well. Real me property and real me.

Erwin Szeto [01:22:24] Where do you guys putting on Tik Tok right now?

Moe Hansroda [01:22:27] And Tik Tok is more the education side of telling people.

Erwin Szeto [01:22:31] How long the videos.

Moe Hansroda [01:22:32] 15 seconds. It’s like, you know you’re getting that quick.

Erwin Szeto [01:22:36] Or I’m going to test more 30 years and 15 seconds over done recording.

Moe Hansroda [01:22:41] Hands and you’re going to.

Erwin Szeto [01:22:42] Dance your dance while you’re doing it.

Moe Hansroda [01:22:44] So the social.

Moe Hansroda [01:22:45] Media part is taking by taking care of by some social media experts will call them yeah younger people than I us right so and yeah our company KW property dot com you know you can find us if you’re looking for a place to rent or you’re looking for management. We have landlord forms, tenant forms and Instagram, Facebook, Tik Tok, we have KW, property has accounts and you can engage with us there as well and whatever you need. Like I said, 75 to 100 kilometer radius, we can manage your investments. And the one thing that really separates us from everybody else is because of all our foreign clients, we do not touch the money that we don’t touch the clients rent. So the majority of property managers take the rent, take your cut, give you the difference. Problem with that is embezzlement, fraud, misappropriation of funds. I believe there’s a property manager in Waterloo who stole about half a million bucks being charged right now. So that was in the paper. And we have some clients that have anywhere between like 2030, up to 120 grand stolen from here by managers. So that being said, our system is different than everybody else’s and the rent goes from a ten scale course to the client’s account. We build you separately. You can even pay us by credit card if you collect airmiles. We make it really hands off software focused and we can scale. So if you’re a landlord and you’re looking for a good property management company, we have the ability to take you on.

Erwin Szeto [01:24:18] And then the real estate brokerage are going to collapse. No, I mean.

Moe Hansroda [01:24:23] No.

Moe Hansroda [01:24:23] I said no, no.

Moe Hansroda [01:24:26] I said.

Moe Hansroda [01:24:26] No. I just you know, I mean, like I said, it’s that the sky is always falling, right? Then if you listen to these people, they’ll tell you, right? You know, stop watching the news. Basically, turn off Fox, turn off CNN and they read a book. Yeah, exactly. Yeah.

Erwin Szeto [01:24:40] You’re a good.

Moe Hansroda [01:24:41] Book. You want to know how the you know, you gauge the market or news, look at stocks, see how they do, and then you’ll figure out what, you know. I mean, I’ve been reading about like food shortages and then, you know, there’s going to be a shortage on fertilizer in Russia, etc.. And I always tend to go back to the market who I look at McDonald’s, I look at Westerns and those stocks just keep climbing. So that tells me that the analysts and people following those things, which are huge institutions, are worried then. I’m not worried. Right. And those are multibillion dollar corporations and there.

Erwin Szeto [01:25:19] Costs are to set new high.

Moe Hansroda [01:25:20] Yeah, exactly. So, I mean, you know, you follow the big money and that truly is big money and you know, you can basis decisions on that. Right. So that’s basically it. So thanks for having us on. Appreciate it.

Erwin Szeto [01:25:35] Thank you, Neal. Thanks for coming in. This is fascinating stuff. Yes, it is. The balance out of these problems.

Moe Hansroda [01:25:40] Yeah. Any final words? Any final words?

Moe Hansroda [01:25:43] No. I think you can get in touch with us using our website. And of course, we are always looking for ways to improve test and.

Moe Hansroda [01:25:52] 100%.

Moe Hansroda [01:25:53] New people join our team as well as we group. So get in touch with us if you want to change the Real Estate again, join us today.

Erwin Szeto [01:26:01] I offered my property 49%.

Moe Hansroda [01:26:03] Yeah, man.

Erwin Szeto [01:26:04] All right. Thank you, gentlemen.

Moe Hansroda [01:26:05] Thank you.

Moe Hansroda [01:26:06] Thank you so much, guys.

Erwin Szeto [01:26:15] 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 and I’ll be delivering on the subject of stocktaking. 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 rental in St Catherine’s, Ontario. If you’re interested in learning more about stuff 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 Anchor demonstration. Find out for yourself with so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell, I love teaching and sharing the stuff.

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