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Announcer [00:01:22] Tired of the 9 to 5. Tired of only dreaming about the things you want to do. Want to have more time for your family. More time for you. More time for you. This is the Breakthrough Real Estate Investing podcast, where we interview qualified guests in the real estate industry all across Canada. We want you to live life on your terms, and we want to help you break through to that life through the power of real estate investing. This is the Breakthrough Real Estate Investing podcast. Now your hosts Rob Break and Sandy MacKay.
Rob Break [00:02:00] Hello and welcome. Thanks for joining us again for another exciting episode here for the Breakthrough REI podcast. As usual, I am joined by Mr. Sandy MacKay. How are you?
Sandy Mackay [00:02:12] Fantastic. Fantastic. And I’m for another show.
Rob Break [00:02:17] Me too. Me too. I can’t wait to get into this one. First, everyone, you go over to our website, right through REI podcast dot CA. Go look back in and see what we’ve been doing for the past couple of years here with the podcast and revisit some of the old shows and go right back to the beginning. Listen to every single one of them. And we’ve had some incredible guests that we’ve spoken to about everything REI for quite some time now, so everything’s there on the website. You can also get a free gift.
Sandy Mackay [00:02:48] Yeah. So I’m sure everyone knows the ultimate strategy to build off the real estate. So pick that up. You never miss out on an episode to get updates and everything we’re doing. When you do that. And, and so yeah, I’ll pick that up and never miss out on anything. Robin I are up to setting.
Rob Break [00:03:03] You did an Airbnb webinar not too long ago. Zara A couple days ago.
Sandy Mackay [00:03:08] As of this, it’s a week away. So but it’ll be it’ll be a little bit ago. Yes. When this airs. So yeah. Somewhere if they want to reach out to me about that, they could, they could pick that up. We had a great guest on our recent episode about Airbnb. So that’s maybe a maybe a hot topic right now. If people are interested in that, they can certainly reach out it. I can I can strip out the recording or if you’re on our list, you might have already got that recording. So, right, another reason to jump on it.
Rob Break [00:03:34] And you’ll be doing many more of these type of things. Maybe it’s on Airbnb, but different topics.
Sandy Mackay [00:03:39] Yeah, they are doing a few more of those webinar ourselves. So good chance to engage in ask questions and stuff for those that are interested.
Rob Break [00:03:46] We’d really like to get back into some in-person investor tours in Futuro area, so hopefully we’ll be doing that soon. Lots more updates on that coming up. And then for now, of course, we’ve got the we’ve got the November in conjunction with Durham REI We’ve got the November Costa Rica. Property tours are coming up. So more information on that as we go. I think it’ll be booked up pretty quickly with just Durham, REI members, but maybe if it’s successful, we’ll start doing some more.
Sandy Mackay [00:04:21] I’m sure they have the dates locked in for the.
Rob Break [00:04:24] 18th, 19th, 20th, and then depart on the 21st of November. Awesome. It’s going to be fun. There’s all kinds of activities and all kinds of great properties to see here, so we’re excited about it too. And yep, stay tuned for more information on that. And before we skip off this, I should just mention that everyone should go over to iTunes and leave us a rating or a view as well. Helps the show get out there to as many people as possible that might enjoy this kind of information.
Sandy Mackay [00:04:54] Absolutely. Go do that. And it allows us to get more great, great, desperate episodes and certainly always appreciate that. And also people, you know, reaching out and telling us what we want to hear, too, because we’ve done a lot of episodes. We’ve talked about a lot of a lot of different things. The world’s always changing is always new, new things to learn and talk on. So let us know what you want to hear and if there’s a specific location maybe we haven’t talked about or strategy or missing topic, then certainly let us know and we’ll do our best to get the expert on there, the Canadian expert on that and bring them on.
Rob Break [00:05:27] Yeah, absolutely. All right. Well, enough of this chit chat. Let’s get into our interview. We’ve got some great guests today.
Sandy Mackay [00:05:33] Fantastic. We’ve got Evan Unger and Jordan King here standing by here from Duck Capital and we’ll probably have them on the show. Welcome with us.
Evan Ungar [00:05:42] Hey. Thanks for having us.
Jordan King [00:05:44] Yeah.
Rob Break [00:05:46] Yeah. I appreciate you taking the time.
Sandy Mackay [00:05:48] So these two have been investing real estate for four, four plus years. They got 15 plus million in holdings and transacted over 65 units. A lot of action there in not too long of a time frame. So they’re certainly active real investors and they’re also Evans, also an author, investor, public speaker, and also a Guinness World Record holder. So we’re going to find out what that means a little more into the show here. And yeah, welcome as a Repub, The Aviator.
Evan Ungar [00:06:16] Thank you. Thank you. Like I said, we’re very excited to be here and chat with you guys and answer some great questions.
Rob Break [00:06:24] Yeah, thanks. So let’s get started with just, you know, tell us a little bit about yourselves, both of you, and how you got started in real estate investing.
Evan Ungar [00:06:33] Yeah. Jordan wanted to get on.
Rob Break [00:06:34] Okay. Yeah.
Jordan King [00:06:35] So I got it myself. We know each other for quite a few years, probably a little over a decade now. And, um, you know, we, we originally, we got started with tuck capital and tuck capital was meant to be a business broker. Okay? So we were kind of connected to a lot of high net worth individuals that are looking to invest money, as well as finding projects out there that were looking that needed capital and needed the financing. So one of the projects we came across was, you know, real estate investor company and we started doing private loans with them. And then after doing that for a little bit, we said, okay, well, if these guys are going to be paying, you know, ten, 12% interest, how much money they actually making. So, you know, I mean, I’ve been talking about it and said, hey, you know what? Instead of just like sourcing money for this, let’s actually be the money guys for this and talk about getting a potential joint venture. So we started off doing a joint venture. The corporation was primarily focused on like dilapidated properties, bringing them up to market values, refinance investment. And think about the growth strategy, which I’m sure most people know about if you don’t have to buy, rent, refinance, and so on, so forth. So that being said, after doing that for about a year or so, I’ve been able to myself realized, okay, you know what? Like this is really cool and this is something that we think we want to be, you know, do more of and have a little bit more control. So we decided to open up developments, which is our real estate holdings, which is different than capital, the broker side. And we just got off to the races, you know, we started finding some properties. We put together a construction comp, a company to kind of deal with all the properties that we had. And from then we’ve just been scaling rather aggressively.
Rob Break [00:08:24] Very good. Very good. Evan, let’s hear, you know, maybe a little bit about yourself, too, and then and then because I mean, I guess that was sort of a sum ups of where you guys are at right now. But let’s go let’s take a step back. Let’s start at the beginning.
Evan Ungar [00:08:41] Yeah. Um, I don’t know where to start, but that was a great summary. Jordan. I would say a bit about myself. I just got into business with Jordan many years ago and just fell in love with real estate. Really? We both bought our first primary residences when we were really young and saw what the potential is and how it did in the market on its own and said This is just an absolute beast when it comes to generating wealth. So I decided that, you know, this is going to be something we’re going to take hold and grow in and use in a multitude of ways. So I jumped in there a bit about me. Other than business, I love to travel. Currently traveling quite a bit. I love the creative side of financing and real estate, and that’s kind of where Jordan and I started. Hit it off the most. And yes, you guys mentioned I am an author of a goal setting book, How to Plan Your Goals, How to go from goal setting to goal getting so that actionable items from taking a goal, that’s just a thought in the head and a dream and really put that down on paper and in writing and get into it and then yeah. Guinness World Record Holder worked in athletics for most of my life in the gym industry and somehow got into a competition with a coworker for everything. You know, the egos in the gym was all big and we know who could bench more, who could go out more. And apparently one day we decided to see who could jump higher. And it was me. And by the time we were done jumping, had a bit of a crowd there. So we ended up Googling, you know, like, what’s the highest jumping? And I had made a decision that day I was going to be the world record for it. So I trained for about a year and then and then broke the Guinness World Record for the highest standing jump, and then a year later broke another Guinness World Record for the highest jump on one leg. So quite a bit of fun.
Sandy Mackay [00:10:43] Those are pretty impressive. Those are pretty impressive categories, I think. So I was waiting for like the, you know, something really, really obscure, like, you know, jumping off of one leg, landing on your toes or something was something that’s like really out there, right?
Evan Ungar [00:10:57] Yeah. You know, this is like a record that had already been there and yeah, had some fun breaking it, got a really wicked crowd out at the gym. One health clubs that I was working at the time out of Oakville and Mississauga there. So, you know, it was it was a lot of fun. Yeah, we’ve had some definitely some hard training and some good things. Then I’ve traveled the world jumping like literally it’s taken me all over the world on different shows and stuff. So it’s been quite, quite entertaining.
Sandy Mackay [00:11:27] Super cool. Super cool. What? What? Maybe we’ll touch a bit more on that as we go through the show here. But what’s if on the investment side, where do you guys focus is a specific area. You mentioned the strategy, the better strategy, which we certainly have talked quite a bit around that on the show and we’ll dove deeper on that. But yeah, what areas they focus on, is it anywhere specific or is it all over the place?
Evan Ungar [00:11:50] So Southern Ontario was kind of where we started and we’re heading north. We’ve headed north over the past year and a half or so, you know, and the prices of homes were a lot more affordable. We were focused mainly in like the St Catherine’s Hamilton area. We ventured out of those areas. We’re staying in those areas for our flips. Order to make a burr happen in those areas is based on the price. So, you know, all over the Golden Horseshoe and then the lot up north. Now to Saint Marie, Sudbury area.
Sandy Mackay [00:12:25] And but our strategy is that to go to up there as well, or is it does it change at all when you’ve gone to these different markets, kept the same strategy, or how does that change?
Evan Ungar [00:12:33] Yeah, definitely continued the British strategy up north and we actually for the first time actually done a couple of buy and holds this. The deal was so good. I mean we would potentially burn that property without having to do the renovation side of things, which is actually mind blowing and amazing on its own. But. So, so yeah. The same strategy that we’ve maintained. We did run into cash flow problems occurring as we scaled aggressively. So at one point we decided we just want to grow really fast. So we started picking up like a dozen units at a time and that became very stressful from a cash flow perspective. So we ended up opening up another corporation to do our just do flipping out of, and that would provide the liquidity needed in order to scale the BR model. As everyone thinks the boom also great you know you bur every time you recycle the same money as lose, it’s the best model if you’re doing one property or two properties at a time. But when you’re picking up a bunch of them, you need a lot of cash.
Sandy Mackay [00:13:44] A lot of a lot of people, if they go going to scale, learn that the hard way or they learn it in some way and they get into some challenges. I mean, that was that was kind of the focus of. Our next question, though, is what are some of these challenges they face in growing or in starting or growing? So that’s a great one to start it off to. Dove a little deeper on how you like this. That’s something you first saw coming or did you learn that kind of just, oh, crap, we got to figure this out. And then how did you how did you get through that? Because that’s a challenging moment.
Evan Ungar [00:14:15] Yes. So we definitely learned that as we were going during our very. Tunnel vision people in a good way. You know, we set our eyes on a goal. We sprint at it, and we’re very good at executing plans. And so we had this plan of scaling and growing and burning. And then we started coming. Our deal flow picked up incredibly well. Our funnel, like our deal funnel filled up really well. We started picking up more and more and then, you know, they were going great. And then at some point we were like, Hey, we used up our renovation budget on down payments, so what are we going to do here? And so we decided, okay, with the last bit of like bulk funds that we had of our money that we’re going to pick up some properties that can provide instant liquidity. And so we did some flips and then, you know, kind of went from there. So that’s how the problem came about very quickly, but wasn’t in the real estate, in the real estate bubble, which is kind of what I love like that there’s going to be definitely roadblocks in investing and building generational wealth in real estate, but there’s so many creative and different avenues within just mostly on its own that it kind of lead lends to solving its own problems just through using different methods it does.
Rob Break [00:15:37] If you think that way, you know, a lot of people don’t see it that way. They’d be like, Man, we got ourselves into trouble. What are we going to do now? Let’s get out of this trouble instead, you guys delve deeper into potential trouble to see if you’ve got the exactly how to do that.
Jordan King [00:15:51] But we have a term of we say, oh, my goodness, we’re running into trouble. What do we do? Well, let’s just get even bigger. So it’s not that big a finish up the road, you know, that did so well. We’ve had a lot of growth that we in like southern Ontario, you know, GTA markets, I would say now, but we’re still doing the bird model for sure. We have shifted our expectations a little bit though, so not so much more on the yearly appreciation because the market is going up, but now more so we’re looking at as cash flow rate. I mean, I’ve always say we do real estate like stocks. You know, your stock can go up, your stock could go down essentially unless you’re selling it. Does it mean anything? What’s really going to change things is your dividend payments. The last year we’re doing that, we’re kind of, you know, positioning our portfolio, looking for more properties that cash flow very healthy, opposed to just buying and renovating and just waiting for market appreciation. So that’s a little bit of an adjustment we have to make.
Rob Break [00:16:50] So for you guys, after you’ve done the burn model, you’ve basically essentially, you know, you’ve refinanced it for pretty much probably as high as the bank will appraise it for taking all that money back out once our healthy cash flow for you guys after something like that.
Evan Ungar [00:17:09] So are you looking for Capri or like gross amount of cash?
Rob Break [00:17:14] Whatever. Whatever info you want to share with us.
Evan Ungar [00:17:16] And like, love to stay around the 6%, I think is a great place to be. 6% is kind of like that, really. Middle ground up north. 8% is really attractive. You know, you hit an absolute homerun. You could be seeing 10% cap rates. But like I said, you know, if you you’re going to be in potentially not as high quality neighborhoods the higher your top rate goes in terms of cash flow. And then it lends to really not ever achieving that cash flow because you have more turnover. But I would say, yeah, like a 6% cap rate is a really healthy place for us to be. I think that’s where we would like to set.
Rob Break [00:18:02] And that’s very interesting. So are you in towns where that’ll be the cap rates set for the area or are you guys generally higher?
Evan Ungar [00:18:14] I like set for the area. Meaning that’s what the single value would add.
Rob Break [00:18:19] Yeah, exactly.
Evan Ungar [00:18:21] No, the banks are going to be so. So are holdings in southern Ontario will be lower cap rate properties like, you know, in Hamilton and whatnot. You’re going to see cap rates ranging of three or 4% or four and a half percent upwards there. But as you go up north, then, yeah, you’re in the sixes and upwards as well.
Rob Break [00:18:42] So very cool. I guess my point was just saying that you guys are able to find properties that the cap rate is actually higher than normal. Yeah.
Evan Ungar [00:18:53] Trying, right. I mean that that really comes from building out that network and deal flow for sure, but also being willing to take on properties that aren’t in A-plus plus neighborhoods and that have bigger renovation needs, like picking up a home that’s quite dilapidated. Being confident that we can take that renovation on and bring it back to where it needs to be. So obviously, you know, you’ll have better margins on property that require more work.
Rob Break [00:19:24] Sweat equity until tell you love it. Okay. So any other challenges that you can tell us about that?
Evan Ungar [00:19:34] I think a challenge that we face, which I love to preach to newer investors who are looking to go beyond the first few properties is we learned in our novice like beginning years that. Once you exceed that place of. You can’t hold the debt in your own name anymore. You know, you got to you got to find other ways. And when you get into residential lending, but in a commercial manner, you’re no longer really looking only at compare comps anymore. Like, I mean, we have property in Hamilton and properties in Hamilton that are worth over $1,000,000, but we’re not going to get lending on that one point, whatever value, right? We’re going to get lending based on its debt service ratio. And so I think it’s important that people really pay attention to debt service ratios when they’re scaling their business because it’s something that’s often overlooked.
Rob Break [00:20:42] So that’s interesting. So how do you how does that shift work? How does the shift from having the bank look at it as a as a residential property to a commercial property?
Evan Ungar [00:20:53] So if you’re portfolio lending or if you’re getting a business loan to cut a blanket, the mortgages, other properties, they’re only looking at how much those properties just service the debt. So whereas if you’re buying one or two properties and you’re holding them in your name and you got a great job and you’re basing it on your employment income, they’re going to base it on your similar concept as how much you can service the debt for those properties. But the value they’ll give you is strictly based on like, well, your next door neighbor sold for $1,000,000, so yours is a bit smaller, yours is worth $950,000 and that’s how much will lend on. But when you get into commercial lending, even those for residential properties, they’re going to say, well, what’s your know why and how much debt can you service based on your NOI? And then that’s actually the value of your property. So.
Rob Break [00:21:45] So it’s when you’re shifting over to look at it as a, as a portfolio loan.
Evan Ungar [00:21:50] And anything else, anything outside of personal. Personal service. Yeah.
Rob Break [00:21:59] Okay. Okay. And just for the people listening, because not many people are going to be in that position. Where would where would you like? At what point would you start to go to the bank and look at things this way?
Evan Ungar [00:22:15] I would say that I would do it before I even start investing. To be honest with you, I. Like, you know, you know, you always want to teach people the land mines where not to step right. And I would say it depends on your goal. Start with what your goal is, right? If your goal is to acquire two properties and build those two properties and sit and be happy, and maybe you acquire one every, you know, five, ten years down the line, then I don’t know if you really have to look at that for, for a very long time, if ever. But if your goal is to build a business out of real estate and build that generational wealth, then I think you need to sit down right away and look at it and then start acquiring based on that, because that will give you a better understanding. And that way if you if you need to fall back on it being refinanced on personal debt service, you can still do that. But at least, you know, you acquired something that can later be serviced based on its on its debt service.
Rob Break [00:23:15] Great advice. Great advice. And I guess to if you decide at a certain point, you know, you start out one way and you start to look at things a different way or your goals change, you know, then then you can always look at it from that point on. And speaking of the goal thing, before we move on past that, I meant to ask you again, what is the title of the book?
Evan Ungar [00:23:37] It’s called. Make the decision.
Rob Break [00:23:39] Make the decision. Got it. Okay, so everybody out there, go to Amazon. Order it right now. They help you. It’ll help you guys build your goal so you guys can get to where these guys are. How do you guys help other people invest?
Jordan King [00:23:55] Oh, look.
Evan Ungar [00:23:55] Jordan, take that one.
Jordan King [00:23:56] Something that we definitely take pride and pleasure in doing. I guess it’s our form of giving back, really. We help from at all stages. It could be a novice investor or someone looking to get their first home and showing them the different financing options out there. That could be one aspect or some of those looking to, you know, upgrade their home and get into a bigger property. And they might not be able to get it through traditional banking. So we might have to help out with like a private or different type of unconventional funding practices. So that’s definitely beneficial. We’re taking it to the next step as well as not just helping people that work with us, whether it’s directly or indirectly, by providing jobs and businesses. We look at culture. We like to teach, and it’s something that we like to we’re going to start doing a lot more of. But I know I’ve got a couple of people on my wagon. Same with Adam. And, you know, the one gentleman that he’s 21 years old. He just completed his third flip, which is incredible to see, you know, and just showing them that it is possible that these certain things can happen. Right. But yeah, it’s definitely something that we take a lot of pleasure in doing, for sure.
Rob Break [00:25:04] So no, that’s cool that you guys are coaching people as well. But what about on the investment side, I guess, working with investors?
Evan Ungar [00:25:13] Yeah. So we work with Jordan. I hear about our layers. We, I mean, there’s what we call local layers, so we try and layer our business. I know the both of you do the same. You know you have businesses within your businesses. So we work with investors on both sides for private lending within our network. Obviously, when you’re scaling more funds, you can bring in the faster you can scale. So we’ve brought in private lending. We’re open to it. We also have helped other people place their money and help other people get private lending. So both Jordan and I are mortgage agents and we take pride in helping people make the connections and get the lending that they need as well.
Sandy Mackay [00:26:01] Cool. Well, is that evolved over the years, like when you started? How did you first start financing some of your projects into now? How are you doing that?
Evan Ungar [00:26:12] Yeah, that’s a lot. So Jordan and I self-funded everything. You know, we came from we came like Jordan said, we started by funding someone else’s, realizing the value in it, then getting into business with that person and then eventually doing business on our own. And we wanted to work out all the kinks in the plan before bringing in any outside funds. So we self-funded around half a million dollars liquidity on our own. And then from there, as we were scaling, we started to slowly bring in private lenders, inner circle like investments and things like that to scale.
Sandy Mackay [00:27:00] And did you have the story when you say self-funded a half million? Was that it was that from your home that your personal phones? Was that for a long time? Well, a lot of people are going to be like, that’s nice for them. They had a lot of money. But I mean, how did you get that money?
Evan Ungar [00:27:14] Like everything. Yeah.
Rob Break [00:27:17] Yeah.
Jordan King [00:27:20] But yeah, we both had our properties, had quite a lot of equity in the beginning. So we’re able to pull from that in the form of like a he like equity home equity line of credit. You know, we both had high income earning jobs, so we’ll be a lot of cash. You know, I used to do quite a lot of stuff in entertainment, my shows promotion. So I had quite a little bit of money. So it was interesting cause I went from like, you know, the guy that keep all this money in the bank and just has it sit there to changing that bull mentality. It’s another now, like every one of my dollars are like little soldiers that are going out there fighting battles for me, making me more money. And once we understood that concept of your money needs to be working to make you money while you’re sleeping, then it was just like, okay, you know what? Let’s use our money. Let’s get comfortable with that. And then we’re comfortable. Then we’re able to take on other investors and work with other people. And I think that’s where we differ from a lot of people. A lot of people do it the other way. They want to start with other people’s money and it works out great. If it doesn’t, oh well, it’s not our money, but peace of mind to me is extremely important. So that’s why we said no. You know what? We’re going to use our own money first. We’re going to really understand this business. We’re going to build our systems. And once that these things are in place, then we’ll open up our doors to other investors, which started with, you know, friends, family, people in our network, which has now grown tremendously into, you know, working with much larger funds. And I can’t promise details of that because it’s kind of an ongoing thing. But it’s a remarkable thing that we’re looking at investing nine figures into the market. So.
Rob Break [00:28:57] Yeah, congratulations on that. So you guys, I think you’re awesome.
Evan Ungar [00:29:01] But thank you very, very much.
Sandy Mackay [00:29:04] I was gonna ask you about you mentioned going to different cities, different towns, northern Ontario and some of the differences. One of the one of the things that I was curious about is neighborhoods and how those, you know, in a lot of Hamilton, for example, is used as example, which I know pretty well. There’s neighborhoods that, you know, maybe people wouldn’t love to go into. And that same time, there’s great investment opportunity in them. Those kind of like not A-plus neighborhoods, but maybe C or you could still get really good tenants in these neighborhoods if you have a nice product. Is that is that the same in Suits Emery, for example, or, you know, one of the other smaller sort of communities up northern Ontario? Or is it how does that look on the neighborhoods they are investing in changed or has that changed? Can you still go into the lower, lower type neighborhoods and make them, you know, make a nice product and get a good tenant? Or is that like a now you just don’t go in those neighborhoods type of thing?
Evan Ungar [00:30:01] I, I think the question was worded perfectly. So I think that what I’m seeing up north is just a bit more magnified, let’s say, than I mean, it was Hamilton. It’s Hamilton ten, 15 years ago. Like, you know, if you were in a bad neighborhood in Hamilton 15 years ago, you were in a bad neighborhood. Right. And now, like the bad neighborhood that would have been the worst in Hamilton is like it’s bad, but it’s not like not the end of the world. So I think that if you’re picking your cities properly and you have a healthy mix of neighborhoods, that’s how you kind of hedge your bets, right? So I’m not going to avoid any neighborhood per se. Actually, some of our absolute best performing properties came from the worst places in St Catherine’s. And I know George was shaking his head. Yes. Because, you know, we picked up a steal in St Catherine’s on literally the worst street in all of St Catherine’s. And, you know, to date, performance wise, br wise, that’s one of the best buyers we’ve ever had. And still it still performs beautifully to this day. So we don’t shy away from it. We are just you just need to know what kind of finishes you’re putting in there and your expected maintenance costs and your turnover and kind of goes up from there, you know, depending on what your goals are, setting capital is, your goal is make sure you have a mix of consistent higher grade neighborhoods that say higher grade neighborhoods as well.
Rob Break [00:31:36] Yeah. Yeah. It’s not all of them.
Jordan King [00:31:38] Yeah. To add to that, like, like I said, the value is really in finding, you know, the C grade neighborhood areas and then, you know, a couple of years or a few years down the road it turns into a B or it turns into an X. And I’ve been in my year, you know, we both grew up in Oakville. And, you know, it’s not like we went out. I got my parents bought their four bedroom home in Ocala over 30 years ago for $200,000. Right. And that’s not going to happen in Oakland today’s market. So something that we always took into account is, hey, we want to find that area that’s not hot right now, but that’s going to be hot in two years, five years, ten years. And one of the ways we try and gauge and measure that is, you know, investing in areas with average cost of a detached home is under half a million dollars. What that does for us is quite a few things as an especially for acquiring with privates, we’re keeping our mortgage costs relatively low, but it’s not like we’re privates on, you know, millions of dollars for one property. Right. But the other aspect, too, is a lot of builders don’t really go into these areas until that price of the average property tax from get over that five home to a million, the 600,000 mark. And once that happens, you know, they start buying out lots and putting out new builds or people start buying brand new detached homes from builders for by not. 699 So how we kind of hedge ourselves is getting into those areas where we think that demand is going to be there. And if we get in and get these properties looks at 150,000 or even a quarter million. And we know, okay, not only do we have room for appreciation from doing the construction, there’s also going to be room in the future as builders come into these areas, as demand increases, as you were properties up. So that’s something that we use to really gauge which areas we were going into.
Rob Break [00:33:26] So let’s talk specifically about the sink captains, one that you brought up because it’s my favorite. Yeah, exactly. So and you’re saying it wasn’t in the best neighborhood, but let’s talk about the factors that have made it like the best one. Is it just the fact that the area’s turned over? Is it that you guys just destroyed on a on a renovation project? It made it like and I don’t and I don’t think that that’s the answer, because obviously if you’ve got like, you know, if you if that street is covered with drug addicts and matter, who’s the nicest one there? But I’m sure that plays a part. What are the factors, I guess that would make it the best one that you guys have?
Jordan King [00:34:10] Well, I’ll start it off in a second. I have a term that I use and it’s don’t reinvent the wheel. Right. Someone’s already doing it. Someone’s already done that market research. There’s things that you can look at in certain areas that will indicate, is this going to be a good area to invest in? And one of the gems that I believe I saw, I’ve heard in our business meeting, I think years back and it stayed with us, is you want to go into areas where your big companies, like your Loblaws type companies, are buying properties in that area with the hopes of turning it into a grocery store, whether it’s in two, five or ten years down the line. And this particular area, although it was the worst street in St Catherine’s I’m talking, remembers drug addicts everywhere, break ins, gang activity, everything. Loblaw actually bought the bingo hall, which was like across the street. So that gave us the indication, hey, something’s going on here. If Loblaws is going to kind of put that type of money into this area. So you’re right. It wasn’t just like we completely crushed it on our renovations. It was more so just finding that gem, knowing what to look for, to identify the areas which are going to have that increased demand in the future.
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Evan Ungar [00:35:55] Yeah, definitely, definitely. Go ahead, guys. Now, it’s a.
Rob Break [00:35:58] Really interesting point because like we’ve always sort of said on the show is that, you know, one of the main things is to stay focused on your area so that, you know, you can identify the deals when they do, come on. So, you know, that’s a good point there is that if you’re if you’re, you know, in St Catherine’s and you’re like, oh, I have all these nice places and nice girls in St Catherine’s, then this one comes along, you’ll know right away, okay, that, that one we might be able to jump on because we know something that other people don’t know.
Evan Ungar [00:36:30] Absolutely. Absolutely. Knowing your market is a huge home court advantage, no matter if that market is in your backyard or not. Just knowing your market. Well, just I’m going to veer off topic here because I’m definitely going to remember this. But it has any that one fact that you just said there about knowing your market is it has enabled us to pick up deals for this sole fact that we knew the deal fit our formula and were able to offer before anybody else could do their due diligence. So knowing your market and when it comes out, that fits the mold and you know, the area and what you’re looking for, it allows you to get ahead of everybody else. Well, everybody else is going to be sitting back going, okay, well, I’ve got to check this area. I’ve got to check my due diligence. I’ve got to see my numbers. I see the home come up. It’s two bedrooms or a three bedroom, two bath, whatever it is, it’s a detached home. It’s in this neighborhood. This is the asking price. I know. Even if I had to remodel the entire thing down to the studs, I know my cost already. I know this property’s going to fit the model. I’m. I’m coming in buying this even in the hottest market with no conditions, taking it off before anybody else can grab it. Right. And so, you know, the whoever is selling it is like, this is great. I added on, I put it up or sent it out 2 seconds ago and it’s sold. So getting ahead of that curve by knowing your market is not only a confidence booster, but a huge advantage.
Sandy Mackay [00:37:57] Yeah. The same in almost every business. Speed. Speed of implementation. Speed. The speed. The lead. Speed. All speed is a huge, huge, huge factor. And now the more you know your market, the more like you said, the more you black fast. Huge advantage.
Evan Ungar [00:38:14] This this actually was I’ll tie it right back in this property that we picked up in St Catherine’s speed was a huge factor here. This gentleman put up this property on the market, got attention from investors out of Toronto very early and I knew it fit the model. We pressured this guy to give us this deal. The story behind acquiring it is absolutely amazing. But basically knowing the market and how it would fit into our portfolio enabled us to pick up that property. And it’s performed very well.
Rob Break [00:38:49] Do you want to share the story or yes?
Evan Ungar [00:38:53] Host I’ll give you the quick version of it. The wholesaler put it out. Investors from Toronto jumped on the on the opportunity. I wanted the property. We owned property on that same street. It is like we said the word St and St Catherine’s. We were confident and knowing how it would perform and the numbers on the turnover of it. So. I offered the guy a decent offer, but below it he was looking for this obviously more than two years ago. So before everyone was doing crazy bidding wars and he said, okay, no problem, it’s yours. But I have these people coming out from Toronto and they’ve offered me more, so they’re going to come and see it. And I was like, Nah, man, this is like, I’m taking this property. I know how. I’m not letting anybody else take it. And he was like, Okay, I’ll send you the paperwork for it. I was like, I great paperwork didn’t come through. He told me that he originally had people coming in at 2 p.m., so I knew that. And when the paperwork didn’t come through in the next hour, I was like, I know he’s showing this place at 2:00. Anyways, we had contractors in the area working on another couple of properties of ours, and I actually sent my contractors to that property like their clipboard and all their tools. And at 2:00 they walked in with the people from Toronto and started measuring and saying, Oh, Ivan loves this place, so I’ve got it. And I lay there and the guy was like, Oh! Anyways, long story short, it clearly annoyed the people from Toronto who ended up leaving and we secured that property. And it’s been a great property since.
Rob Break [00:40:26] Sabotage is the recommendation.
Evan Ungar [00:40:29] I’m not sabotaging anything, you know, he got it. He got the money he was looking for. Everyone made out really well on that deal. But you got to be aggressive, you know, and even nowadays, more so than ever, you got to you got to think outside the box. You got to chase what you want. And I mean, like, again, Sandy, like you said, it’s the same thing in every business, right? Like you got to you got to know what you’re going for and you got to be aggressive in in the pursuit of it.
Jordan King [00:40:55] Especially in this market where, you know, a little bit. But we got tons of offers coming in. Now, you can’t sit there and have an inspection. You can’t sit there and say, oh, let me think about this. You know, so we had all of our systems out. So by the time a property is found, it goes to like Excel, it comes out the numbers. Give it a green light, yes or no, literally within 20 minutes of seeing the property class.
Rob Break [00:41:19] And the other thing so is nowadays with the wholesalers, they’re doing that. They’re doing the whole feeding frenzy. You know, let’s look at offers in a week, the same as the real raising.
Evan Ungar [00:41:31] You know, crazy, crazy. I mean, we got a deal, a portfolio deal came across my desk, I would say less than 24 hours ago. And it’s a large it’s over $12 million in real estate and someone’s getting rid of. And Jordan I ran the numbers very quickly fits the model location works well and we’re the first to the table with an offer and we’re hoping that that’s going to be what gets it there. So less than 24 hour turnaround on a large take up like that, you know, works for the people who are selling. It works for the seller side, everyone on the seller side and work for us if we can get our hands on it. So. Same concept.
Rob Break [00:42:17] Very, very good. Okay. Know, digging back into the goal, setting stuff, let’s talk a little bit about how people can do that. You know, you wrote the book on it. So let’s go into a little bit of details for people because when they need it, the people need it. Yeah. They they’ll stop at the first red light and just, you know, turn them off instead of keeping it straight. So let’s dig into what people should do to get some of these. You guys have done really well, like other people want to know how they can do it, too. And clear goals is always a good way to get there.
Evan Ungar [00:42:54] A clearly defined goals. Review your first step. Know what you want is knowing what you want is the biggest thing. A lot of people just think, I want to make money and your money is such an ambiguous term and it means nothing, so you know it. How much money do you want to make by when do you want to make it? How do you want to make it? So you do your who, what, where, when, why, how? You gotta have a really clearly defined goal and you have to know what it looks like, your end goal. You got to be able to taste it. You got to be able to see it, feel it, smell it. What does it look like? Where are you when you’re realizing this goal? What are you wearing? What do you smell? What do you see? All these things. They bring that goal to reality. And. And then the next biggest step would be like, you’re your why, why? Why do you have this goal? So having a goal is great. But if you don’t have a really, really deep rooted reason as to why you’re going through that, or you will stop at the first red light or the second or the third or the 100th red light. Jordan and I have been in life changing, stressful situations and not once, but multiple times. And it’s part of learning, it’s part of growing, it’s failing forward. But had we not had such important reasons in our lives and such clearly defined goals, it would have been very easy for either of us to throw in the towel and say, like, this is just too stressful. I’m not interested in having this sleepless night and the anxiety and the stress. So definitely the why is important.
Rob Break [00:44:42] Right. And that’ll keep you moving, as well as being able to gauge where you’re at that point where, you know, you might be able to look at it, say, well, look what we’ve done so far. Now, here was our goal and now we’re three quarters of the way there. Are we going to give up now? We’ve made it three quarters of the way right now, too.
Jordan King [00:44:59] And that’s what we kind of like encourage issues as early as possible in our businesses, because the quicker an issue comes up, the quicker we can fix it incorrectly. A matter of like, Oh, no, something’s going to happen. What are we going to do? It’s like, No, whatever is going to happen really get through it regardless. So we rather have that issue and explore it as early as possible, if you can. Correct. Then I think a lot of people are scared of failure and they don’t realize, you know, that fear of messing up and being perfect is what’s really keeping you back from your goals. Because in that process of doing, that’s where the magic happens. That’s what you really learn when you’re hands on and your money is on the line. You know, you have these bills and you have certain things, but like complaining and crying, is it going to fix the problem? As much as I had some pretty serious things going on where we want to just, you know, put our head in our pillow, just scream. It’s not going to fix anything. So just having that mindset of, hey, we have to fight through this and figure it out and try to build their confidence. Some things come across our desk. It’s like, whatever, keep it off the top, you know?
Rob Break [00:46:02] See, I like to face those adversities through interviews with other people, though. That’s what I like to do right now.
Evan Ungar [00:46:12] Yeah, for sure. That definitely would be a great way to learn. I’m for sure. Having a podcast like yourselves and being able to learn these lessons from a variety of people absolutely would be a great, great.
Rob Break [00:46:25] Way to networking with people that are doing the same thing. And, you know, and I’ll tell them about the stuff that’s gone wrong for me. They can tell me the stuff that’s gone wrong for them. We can all learn from each other, right?
Jordan King [00:46:39] And that’s the important part is the networking part of it and hobbies. Like my wife said to me, you know, there’s multiple ways up a mountain, right? And you were just thinking about climbing Mount Mountain, but you actually don’t take the steps to doing so. You’re not going to find out what those ways are not to meet other people along that same journey who might have figured things out and say, Hey, don’t do it like this, do it like this, or, Hey, you climb this way, you could actually do it, you know, much more endurance, right? But that being said, I think that, you know, just having that mindset is really what shaped our vision and, you know, being able to scale as fast as we did as we jumped right into it and being on that path, doing that day in and day out, we had a lot of people who were doing the same thing. So we were able to learn from their mistakes and learn from their successes as well.
Rob Break [00:47:27] Yeah. And those mind blowing pitfalls that you’re talking about, you know, from the beginning days, they probably don’t look as daunting. Now, obviously, if you had to face the same one again, it’s much smaller than it was that first time.
Evan Ungar [00:47:44] Yeah. Even something that we’re talking about now is like, um, I mean, looking back on it, it was, it was big, but it wasn’t like, yeah, they’re not life changing. And, you know, we had a situation the other day that we were trying to figure out how it worked, and George and I both voice to each other, you know, we’re stressed. And then we said, you know, like. Did we make it through all the other stuff? Yeah. Should we waste our time being stressed on this one or any of the like? You know what, Mel? And then we both slept great that night, and it was one of the first times I think that we both kind of just looked like kind of spoke and said, like, let’s not even waste our time. Like, what is stress? Let’s not waste our time. We’re never going to get through it. Is that an issue? Yeah, it’s an issue. Like, we’ll figure it out. And we did. And we are. And we continue to do so.
Jordan King [00:48:33] Yeah, it looks like it’s like we’re not looking for the most perfect scenario because that just doesn’t exist. A lot of people are looking for that absolute perfect scenario where they put their money in. There’s no issues. They make the money. They could do that 100 times. Just the opposite. We’re like, no, you know what? We want to fix as many issues as possible, come up with these solutions because we know no matter what, five years, ten years, next week, next month, there’s going to be issues we run into. So us freaking out about it isn’t going to do anything but us preparing ourselves for when these issues arise and how we deal with that. Because what’s been the biggest game changer for us for sure?
Rob Break [00:49:09] Right. And I like I think there was a time when people would talk about real estate investing in a way to always be rah. Nothing’s ever gone wrong, right? Like that. You know, the realism that I think a lot of people are bringing to these conversations now is much more important, obviously. You know, it shows he can get there. But I think we actually did an interview one time, Sandy, and I can’t remember who it was, but I don’t want to call them out. But I remember, you know, we always have the question, what are some of the challenges you faced starting out? And I think we had somebody actually say, you know what, we haven’t really run into any challenges yet when we do.
Evan Ungar [00:49:53] That’s how you know, that’s how, you know, a big challenge is coming quickly.
Rob Break [00:49:58] Or not or I don’t know if either they’re delusional or they just don’t look at challenges as challenges. And they’re all just like, I don’t.
Jordan King [00:50:05] Know, maybe to.
Rob Break [00:50:07] Look at it as a challenge for the lying, you know, because there’s always problems, there’s always adversity.
Jordan King [00:50:14] Anyone who’s renovated any house with contractors, especially older property, is like they run into problems or there’s always going to be problems are going to be, you know, booking issues with contractors, getting on time and especially now with think the demand is crazy. Everyone wants a contractor and you know, there’s just not anybody out there right now and nothing out there. You have to make sure you got a good contractor. Right, because we have a rule of thumb that we don’t go for the most expensive throw and we don’t go for the cheapest quote. We kind of want to be in the middle somewhere. Right. But that would not be any undue. I just don’t think that’s realistic at all. You’ve done a run job with. It’s part of your game.
Rob Break [00:50:50] Yeah, absolutely. And just focus on getting through it. Let’s see. What do you guys big plans for the future?
Evan Ungar [00:51:00] Yeah. Take over the world. You know. Well, expansion is our future. You know, we really want to make a goddamn dent in the world, and we want to. We want to expand aggressively. You know, our immediate goal is to break the hundred million dollar mark of properties. And I think we’re going to do that fairly well and then double it and double that dollar until we’re taken over. But I think we’re in terms outside of just financial and portfolio goals, we want to get into different types of real estate markets. So we’re also acquiring more apartment buildings. Now, we’ve played in the short term rental game with Airbnb and we’ve seen a lot of success with that. So we want to do more on the short term rental side and we want we’ve talked about also like. Destination investing as well. So like I know, I know you guys are doing some of that as well in Costa Rica. So you’re talking about picking up properties in different places of the world. You know, my vision for leisure and pleasure is really, you know, Airbnb being places and like the houses of the top places in the world. And then, you know, when I want to go there, I just I’m going to my own house and I want to go I want to stay in there. I’m going to go to coffee in Paris this weekend. And I was like, okay, cool, I don’t have a booking there, so I was going to hang out. Is that type of mentality and freedom ultimately to kind of play in your own backyard, wherever that backyard may be?
Jordan King [00:52:44] So, yeah. And to very just quickly, I know that for me, the last word you set up is exactly like I got two young kids. So, you know, and so I’ve got to be able to watch them grow and be at home and, you know, not have to physically be at the office every single day. It’s been great and I want to continue that. And that’s something that I got a little taste of, but I want to make sure that that’s there for my kids so I can see them grow up, you know? But yeah, freedom is definitely, definitely a motivator for us. But without question.
Rob Break [00:53:15] Tell you one of the one of the best goals for sure.
Jordan King [00:53:17] That’s what you want to do. Whether you want to do it can take by any money or whatever barriers you want to do something and do it. That’s really the real freedom. Right.
Rob Break [00:53:26] So we don’t get our days back. That’s right. Yeah.
Jordan King [00:53:30] Exactly.
Sandy Mackay [00:53:33] Well, that’s exciting, guys. Are you going to I. It sounds like the scaling is to continue then. I think a lot of you know, some people we’ve talked a lot of people that that in hindsight have looked back and said, I don’t know if I should do that. Maybe I maybe I went too fast. Or and you’ve gone through some of those hurdles already about sounds of it.
Jordan King [00:53:48] So you always bear in mind this is a different skill.
Sandy Mackay [00:53:52] And if you want to keep going where you want to go, maybe not anymore.
Jordan King [00:53:56] Well, if.
Evan Ungar [00:53:56] You want to scale.
Jordan King [00:53:58] It again, there’s something to get fired up.
Evan Ungar [00:54:02] Yeah, we always want to scale. I did the best story and example I can give you, and it hasn’t happened once. It’s happened multiple times. And we tell this one often is like, you know, Jordan and I were like, all right, I think I think we’ve scaled a good amount. Let’s stabilize everything before we continue to scale. And then so is it okay? You know what? For the next four, the next four months, we’re not going to buy any property. Let’s just hang out here at this level for a bit and go and then, you know, like, like six days later, I’m like, Jordan, I bought two more. I’m so sorry. I’m glad they were. They were the perfect deal. We had to take them. Let’s just let’s keep going. And then, you know, two turns into six and turns into eight. And so we’re we have an addiction with being uncomfortable. And it’s led to so much knowledge and experience. So I think we’ll continue down that same path. I think if Jordan and I tried to sit still, we would lose our mind.
Jordan King [00:55:01] So it’s funny, we’re always striving to have that break where we don’t have to do anything. It is not a crazy stuff happening in the second. We even have like a half a day of just quiet. This is like, okay, this feels weird. Let’s go. Yeah, let’s go back into the fire.
Evan Ungar [00:55:18] Like, percent.
Sandy Mackay [00:55:20] Cool. What’s we ask everyone this and there’s already been a few of these nuggets throughout the show. But what’s the what’s another what’s one that stands out for you? He’s been for advice that’s always stuck with you. And how has it helped you along the way?
Jordan King [00:55:33] I think for me, the biggest one was just changing my mindset and to make things. I consider that as a you don’t have to live in the city you’re investing in. And, you know, growing up where I did in Oklahoma, the average cost of a home is like well over $1,000,000. And it’s hard to do that. It’s hard to start a business. So opening our mindset to being able to buy properties and get some partners in different areas was a big hurdle to get over. The other one, as I touched on early in the show, is being comfortable spending money and having bigger money work for you. We’ve all heard the term scared money doesn’t make your money, but you know, that’s a big one, I could say is being comfortable and the best we can get comfortable is having that knowledge. You know, don’t look at that. Oh, my God. It’s so expensive. Like, what are I going to do? Like, no, but if you have that knowledge, then, you know, you’re able to put it together, make sense of everything. And if you have to get certain loans or whatever from different people, you’re not able to do it because you know, you can successfully execute that particular project.
Rob Break [00:56:38] Yeah. I think having confidence just that you you’re saying having the confidence just to know that you’ll be able to find the answer right in face of a greater hundred percent.
Jordan King [00:56:47] And that’s the thing that there’s been times where like, oh, my God, how are we going to do this? And fast forward to our lives. Looked like a time a few months ago where we had a lender pulled out two weeks before, closed the apartment building, $2.2 million in financing. You know, we had a $60,000 deposit on the line. If we couldn’t close, that would have got lost and sort of freaking out, go back to work. And within two weeks we can put that to $2 million to close the property. So it was a remarkable thing. And once you do that, you know, a couple of times you kind of feel like there is nothing that could stop you, that there’s no barriers that could stop stopping. So we’re excited.
Rob Break [00:57:23] Awesome. What about you, Evan?
Evan Ungar [00:57:26] I think that for me, the biggest advice, the best advice I can give to people is no matter what. I mean, aside from the goal setting advice I think is systems and people, you know, even if you’re buying one property or if you’re buying a thousand properties, your systems will determine how seamless and how stressed you are and how successful you are. So, you know, I have a line I love and it’s you know, it’s only you only as successful as you can duplicate your system. And so it’s really important to find systems that duplicate and that can grow and scale with you if you have to do everything every time, it’s a lot of work. It’s going to cause a lot of stress. So find the right systems, implement the right systems, create protocols, procedures, automations, and then put the right people in place to manage those systems. And your life is going to be absolutely fantastic. I mean, I’m here currently in in Bali and now we have, you know, our Airbnb is operating, we have tenant turnover, we have cleaners going in, we have maintenance. If it needs it, we have refill of all the supplies and I see the messages come through, but we’re not actively. Doing anything for it. The paychecks are coming from it, but we’re not doing anything for it. So those systems are really important, and I would rely on those systems as much as possible, even with one home.
Rob Break [00:59:00] Yeah. Otherwise you get caught up in the micro.
Evan Ungar [00:59:05] Yeah. Yeah.
Sandy Mackay [00:59:06] It’s one of the unfreedom systems, that’s for sure.
Evan Ungar [00:59:09] That’s exactly.
Jordan King [00:59:10] It. Just the opposite. That there’s so many times where, like, you know, because I’m a very hands on guy, I’m so excited. But we’ve got to remind ourselves, yes, Jordan, we can both do this, but that’s not the idea. We want to be able to put this into a system where you can scale that. So it doesn’t require us having to physically be there at that point in time, which is going to be huge for us.
Rob Break [00:59:31] Guys, I want to thank you for everything that you’ve shared with us today. I appreciate you coming on. And once again, what was that? What’s the name of your book again?
Evan Ungar [00:59:41] It’s called Make the Decision.
Rob Break [00:59:44] Okay. Make the decision. Got it. We’ll have that in the show notes and. And as well. What’s the best way to get in touch with you guys?
Evan Ungar [00:59:52] So you can visit us at our website at Capital dot com. You can find us on Instagram and Facebook as well. Quite active on social media. Yeah. Feel free to send us an email as well. Even at our capital or Jordan at tap capital dot com.
Rob Break [01:00:11] And tuck capital just t uk.
Evan Ungar [01:00:14] That’s right too. UK capital dot COM. Yep.
Rob Break [01:00:17] Got it. All right. Sandy, how can people get in touch with you?
Sandy Mackay [01:00:22] Sandy freedom reps dot com would be the easiest way or they can find me on across social media and all, you know, everywhere in that world as well.
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