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Podcast Transcription

Sandy Mackay [00:01:36] Breakthrough Real Estate Investing Podcast Episode sixty-one.

Rob Break [00:01:52] Now. Hello and welcome to the Breakthrough Real Estate Investing podcast, we put this show together to inspire you and help you break through to the life that you want to live through the power of real estate investing. My name is Rob Break, and here with me is the often imitated, never duplicated Sandy McKay 

Sandy Mackay [00:02:22] Hey Rob, how are you doing today?

Rob Break [00:02:23] I’m doing good, man. I’m doing good. How about you? Right?

Sandy Mackay [00:02:26] Yeah. Awesome. Awesome. Having a busy month here before the holidays and getting excited for new stuff for the new year.

Rob Break [00:02:32] A busy month of travel.

Sandy Mackay [00:02:34] Oh no, not really.

Rob Break [00:02:36] You’ve been out and about. I see what’s going on on Facebook. Yeah, no time for work.

Sandy Mackay [00:02:41] Yeah, right?

Rob Break [00:02:42] Not for you. Well, anyway, this is our December edition, so I guess it’s our Christmas episode. So I’m wearing my ugly Christmas sweater and I showed it to you guys before we started. It is a true ugly Christmas sweater. It’s like green and red with designs all over and it’s got Darth Vader. And he says, I find your lack of cheer disturbing. So even though we’re not even into December yet, when we’re recording this, I figured I would get in the spirit, try to envision myself at Christmas time listening back to the show.

Sandy Mackay [00:03:13] And what are you doing for Christmas time of year, slowing down business wise or going full steam? I hope

Rob Break [00:03:18] so. I definitely want to slow down. You know, the average once in a while, you just go through the especially with rattles going on right. I think I’m going to put the rental projects on the back burner for a little bit once these ones are completely wrapped up. So do you have some advice for anybody listening, Sandy?

Sandy Mackay [00:03:36] Well, I think I have some advice that they should go grab a free report there on our website. Break through our podcast to get that report. Right now, it’s up there for a while. The seven period of macarons I can. What is it called again? I have forgotten now. Seven.

Rob Break [00:03:49] It’s the seven freedom activators that you can trigger in your property starting right now.

Sandy Mackay [00:03:55] There you go. I had it. I wrote it for crying out loud. Maybe it’s time to update, actually, to be honest because it probably is back now.

Rob Break [00:04:02] Yeah, that’s true. We need something new for the new people that come over and pick up for free.

Sandy Mackay [00:04:07] So it’s still relevant, though I think somebody should go grab that more important. Even beyond that, you can get up on our newsletter there on our email list, and we’ll updated with new episodes that come out. We’ll send you some other extra value through email just in terms of different events we’re having, you know, we’re always doing some property tours in around the Greater Toronto area, different areas as well with that. So get on that list and don’t miss out on anything come up as well.

Rob Break [00:04:32] It’d be really, really awesome if you guys could all go over to iTunes and leave us a five-star review. We’ve got a bunch of five-star reviews, Sandy. We’ve got even more now, and I think we’ve got, well, one hundred and thirteen reviews and the majority of them are five stars. Chris, I look just back to see what the most critical one was actually for fun. I’ll see if I can bring that one up. Yeah. So this was our most critical review that we’ve gotten on iTunes. It’s not that bad, but it was written almost three years ago. I mean, that was almost when we first started. I think anyway, it says, I just like to thank you guys for putting in your time and effort into this great podcast. I’d like to hear more about both of your current endeavors and real estate topics covered in greater detail. Just a beginning Canadian investor, this is a great option for me to learn the basics and see if some of the U.S. strategies of RTI apply. I want it to be the guy who offered some constructive criticism to improve the show for 2015. I personally do not like the casual atmosphere of the show. I think it would be more useful to people if the podcast was more organized and pre-written to have a smoother presentation. I am turned off of the show when I hear stuttering disorganization and too much casual talk and poorly worded speech. There is a lot of value in these conversations, but I found the show hard to extract information from. Thank you for hearing out my opinions, so hopefully, I mean, that was left for us February 12th, 2015. So that was almost three years ago. Hopefully, we’ve improved the show since then, but I just thought I’d read it because I went back to see if that was our most critical review. And it was only three stars. But the majority of them are five stars and we’ve got one hundred and thirteen altogether. One hundred and six of them are five stars. So anyway, on that note, I’m going to read the most recent ones that we’ve gotten. There’s just three here to read, so I’ll do that now. OK? This one is by spring cleaning 12 987. And it says a good mix of guests on the show to provide a broad look at all aspects of real estate. Very informative and keep up the good work. Five Stars The next one is from DS Desu Pancake. Something like that. And it says great podcast five stars as an investor, two doors in and in my first six months. This podcast is so full of relevant material. Some episodes I will have to listen to again. There is so much in them. Keep up the good work and Rob keep coming up with nicknames for Sandy. Her last one is from Jim McKee Real Estate Wealth, and he or, she says, helpful and relevant. Five Stars Great podcast for Canadian investors does not require translation. No mention of 10 31 exchanges here. Gotcha Robin. Senior experts with loads of personal experience in the industry and they bring in excellent guests who share about a variety of strategies. I never miss an episode. Keep up the great work. OK, so thanks, guys. Thanks for all of that, and I encourage everyone who hasn’t done so to please go over and leave their five-star reviews for us as well. I think we’re becoming pretty visible here, man. I’ve checked out to see what some of the other podcasts that are doing similar things are getting in the way of reviews and stuff. And I mean, we by far got the most reviews here. So I just want to thank everyone who’s taking the time to go over and do that. So we’re really happy to have Nicole on with us, and she’s definitely just been waiting very patiently in the background while I rambled on about that for the last little while here. So let’s get into our interview with her. Sandy how’s that?

Sandy Mackay [00:08:24] Sounds fantastic. We’ve got Nicole Edmonds here with us today, and she’s a real estate investor from the Muskoka area, so just a little bit north of Toronto. And she’s personally invested in 15 real estate deals over the last three and a half years and has now supplemented her full-time income with their income from real estate. And just a year after actually graduating from the University of Western Ontario with the biology degree, she began investing in real estate after realizing the rat race wasn’t for her. And she strongly believes that to make money in real estate, you must first become well-educated. So she focuses on purchasing cash flowing multi-unit properties with joint ventures and other nontraditional strategies. So we are really excited to have you with us. Nicole, thanks very much. Thanks for having me on the show. Anything else from that bio there. There were investors that a good quick overview.

Nicole Edmonds [00:09:13] I think that’s a good overview.

Rob Break [00:09:15] Yeah, yeah, definitely. Thank you for being here with us again. Did you want to start by telling us a little bit about your investing journey so far? $15. That’s pretty awesome. Are 15 properties, I guess.

Nicole Edmonds [00:09:26] Yeah. So I started investing about three and a half years ago. I had a biology degree, so and out of university I was working downtown Toronto. I had a job kind of in my field. I was working for a pharmaceutical advertising agency, and I was not making a lot of money and I was working really long hours. And I ended up seeing on TV an interview that at a young real estate investor was doing, and he was talking about how he had used his student loans in university to invest in rental properties. And I think that if I had seen maybe an older, a real estate investor with a different strategy and a suit on TV, I might not have thought there was an opportunity for me. But because of his story, I thought, oh, maybe there’s something I could do. So I started researching. I ended up at a few seminars and I was in a three-day workshop, and it was all brand new to me. It was a new language to me, but I was learning about cash flowing properties and how theoretically you could invest in properties that were bringing in positive cash flow and you could supplement your income and not have to work. And I don’t know if you guys have ever played or when you were a kid, if you ever played the computer game The Sims.

Rob Break [00:10:37] My wife did

Nicole Edmonds [00:10:39] OK. So when I was a kid, I played that game a little bit, and in the game, you kind of have a human avatar and you have a house. And but to make more money to put things in your house, you have to go to work. And so it kind of it’s a simulation of real life. And it was a bummer because you just wanted to decorate your house. And so there was that kind of keyboard code that you could type in and it would give you unlimited money and it was a cheat to the game. And I remember sitting in that workshop listening to this idea of, well, you could crank it for three or five years and supplement your income and not have to work for the rest of your life. And I thought, Holy cow, this is the key to real life. And so definitely, I knew this is something I want to do. So I kind of switched over from the whole biology path and I started investing in student rentals. I think because of my age and just because this was a new idea, it was a little bit daunting to me. I could stomach the idea of being a landlord for students, but I couldn’t really stomach the idea of being a landlord for people my parents age. So I started with student rentals, and I just want to see that this worked. So the first property I did was kind of turnkey. No renovation required and it started cash flowing. And so then I moved on to another student rental and then as I got a bit more experience, I felt comfortable to kind of expand and I started focusing more on small multi-unit residential. I took on some kind of buy, fix, rent and refinance strategies. I didn’t have my own. I mean, I wasn’t starting with a lot of money, so I did a lot of partnering. I did a lot of borrowing down payments, a second mortgage, money from the refinances. I was able to roll over money that way. And so now I focus mostly on multi-unit residential and yeah, and mostly partnering with people to do that.

Rob Break [00:12:32] Very, very cool. And you’re actually the producer of the everyday investor on Rogers as well. 

Nicole Edmonds [00:12:38] I am. Yeah, it’s actually it’s Gun Canada. Why now it’s on the edge?

Rob Break [00:12:43] That’s really cool. And I’ve seen you on the show a couple of times talking about your numbers and your deals and whatnot.

Nicole Edmonds [00:12:49] Mm hmm. Yeah, it’s been awesome to get to share that.

Rob Break [00:12:52] So everyone check that show out as well. OK, now as a young investor, what are some of the advantages and as well as the challenges of getting into real estate at, you know, how old were you when you started?

Nicole Edmonds [00:13:04] Yeah. So I would have been twenty-three, twenty-four when I started.

Rob Break [00:13:08] So there’s definitely got to be some challenges being so young. I know even though I wasn’t as young when I started, I kept. There was a lot of people that said to me, Man, you’re like, how many places do you own? How old are you?

Nicole Edmonds [00:13:19] Yeah, definitely. And I think that for people who aren’t in maybe the creative real estate game, knowing that you can invest in real estate without a lot of money, they don’t think that’s possible. So I think initially people think, oh, to invest in real estate, you need a lot of money, and that kind of pushes a lot of young people. I mean, that’s a generalization, but most young people, you know, haven’t had the time to kind of build up their savings. That’s really one aspect of investing in real estate. There’s so many different things that you need. So yes, you definitely need down payment money, and you need borrowing power, right? If you’re going to get mortgages on these properties, you need to be able to qualify for mortgages. So I would say that those are two of the perhaps the disadvantages to starting young because you maybe haven’t built up your credit or you don’t have a high paying job yet. But what you do have, and I think that this is where it’s so powerful is a lot of the time people starting younger have the time to put into it. So they’ve got the time to find the property and start building that portfolio and really kind of hustle to build all of that. You’ve got the willingness and the energy to do all of that. And I think a lot of the time, I think this is actually a really big benefit to starting young that people overlook. But for people who have been in the working world using traditional strategies for the past 30 years of their lives. So what I mean by traditional strategies is they’ve been going to work saving their money, putting it in recipes, investing in mutual funds, working on paying off their mortgage so that they can retire when they’re 65. I think that a huge advantage of starting when you’re young is you haven’t gone through 30 years of that conditioning of thinking that that’s the way that your life has to go. So especially when we’re talking about investing in rental properties, we talk a lot about leverage and we talk a lot about five six rent refinance, you’re constantly pulling out more money, increasing your mortgage so you’re really using debt to your advantage. And I think for a lot of people, that is something very difficult for them to get over. Whereas for a young person who hasn’t gone through all of that conditioning, you guys, actually, you talk a lot about mindset on the show, but I think it’s important to have a mindset of I can do this, and I will do this. But also even just the mindset of getting around some of those more traditional obstacles.

Rob Break [00:15:40] Mm hmm. Especially even when you try to tell people like why they should, you know, oh, I’ve got my home paid off now. Finally, like my parents might say or someone like their age. And then you try to say to them, well, you should really like pull some money out of that place, invest it into some more realistic. And they’re like, What? What are you talking about? We just spent our lives paying it off. Why the heck would we want to do that?

Nicole Edmonds [00:16:04] Exactly, exactly. And there’s a phrase, and I think that one of the major banks and their corporate office and it says tradition eats strategy for breakfast. Mm hmm. So, you know, that’s where even though you can lay it all out on paper and say it makes more sense for you to leverage, you know, the equity in your house and invest in real estate, make a way bigger return people are still held back by that tradition.

Rob Break [00:16:26] Definitely.

Sandy Mackay [00:16:28] What about Nicole being younger than, I guess, most people in the investment world? How did that affect you in terms of joint ventures, finding money, that type of thing? Was that a challenge at all for you?

Nicole Edmonds [00:16:39] I think for me, you know, you can play that side to your advantage. I do think that people see in a younger person someone who’s willing to put in all this energy and they’re, you know, they’ve got high ambitions and people want to invest with someone like that. So I think you can play that to your advantage. You know, maybe starting out, I think it’s something that you really have to use to back yourself up is getting the education so that you are very knowledgeable when you speak about your strategies because you can’t use, oh, I’ve got all these years of experience behind me. You’re going to have to use that. I’ve done all this training, or I have all of the support to put that behind you.

Sandy Mackay [00:17:12] Yeah, absolutely.

Nicole Edmonds [00:17:14] And then I think an obvious advantage too, is, you know, with real estate, you’ve got compounding interest, right? If you’re investing in a property and it’s appreciating that’s compounding over time, there’s a huge benefit to starting early. If you’ve got 30 years to kind of, see that growth is a huge difference than if you’ve got five or 10 years to see that grow before you’re going to start drawing upon it. So I think there are lots of advantages. Obviously, the money and the borrowing power, those are important. But then there’s alternative ways for a young person to get those.

Rob Break [00:17:44] You know, there is a woman on my street that I see. She walks by quite often and I stopped, and I was talking to her one day and she was telling me how I think she bought her house for like $14000, you know, and just the amazement on her face because we were talking about the market and she’s like, you know, I’m going to need to sell pretty soon. My house is worth like $600000 now. So, I mean, it’s very similar to what you’re talking about. Like, we’re going to, you know, there’s nothing proven more stable anyways than real estate. So, yeah, exactly.

Nicole Edmonds [00:18:17] Especially if you’re in it for the long term, right, you’re going to see those increases massively.

Rob Break [00:18:21] And we just answered your next question, I think

Sandy Mackay [00:18:25] I was going to say, what strategies do you focus on generally? Is there one main threat to use?

Nicole Edmonds [00:18:30] Yeah. So for me, because my goal, which I think it’s so important to clearly define your goal at the beginning, my goal was to supplement my income with income from rental properties and specifically with cash flow. So cash flow is passive income, right as you once you kind of set up your property? Yes, there’s some management that needs to go into it, but kind of takes a lot less work versus renovating getting quick cash and now you’re not making money until you do it again. So I knew that my goal was to kind of buildup that cash flow base so that my income was supplemented. I didn’t have to go to work anymore, and then I could maybe focus on some more creative strategies if I wanted to flip or something like that. So right now, most of my focus is really on cash flow, high cash flow, and I invest with a buy and hold model. So I’ve done some buy, renovate, rent, and refinance, but it’s all to create a cash flow in property that I can buy and hold.

Sandy Mackay [00:19:27] And why do you choose that model then in general, why do you want to hold them all? Mm-Hmm. So she is someone who’s looking for not working, especially I don’t talk to some people. They want to flip to raise capital and make money. What do you prefer buying and holding?

Nicole Edmonds [00:19:40] Yes. So definitely, I put the emphasis on the high cash flow and then the buy and hold. I think if you’re combining those two strategies now, the cash flow is kind of your buffer, it’s your cushion. It’s what makes this low risk in that kind of anything can happen. UPS and downs can happen in the market, but you’ve got your cash flow there, so you’re making money. If property values go down from this year to next year or in the next two years. You don’t really care because you’ve got the positive cash flow coming in each month. So because of that buffer, I invest with a buy and hold model. I think first of all, it’s a lot riskier if you are purchasing, knowing, OK, I need to sell in two years or I need to sell in three years, and you’re dependent on or I’m going to do a six-month renovation. I have to sell that point. You’re dependent on where the market is going to be. That’s I feel a lot more speculative. And it’s one of the things that I think can put people in a position where, especially if they’re not positively cash flowing, they have to take a loss. It’s interesting, Rob, you, you’re talking about that. But you were also talking about kind of having the backup plan that you can just keep it and rent it so that you don’t have to experience know you don’t put yourself in that position where you experience that loss. So I think that having that buy and hold model now you’re in a situation where it doesn’t mean you have to hold the property for 30 years. But if property values are down in two years, you can wait it out. So you can always be in a position where you can choose to buy low, sell high. You’re never forced to buy at a certain price and sell low.

Rob Break [00:21:10] Yeah, exactly. And I’ve always said to me don’t care if somebody tells me that my house is worth a dollar tomorrow, it’s still making a bunch of money for me, and I don’t have to sell it right now. So it doesn’t matter that we can ride it out, wait until values come back up. If you have to sell it, then you can sell it then.

Nicole Edmonds [00:21:29] Exactly. And I think when I was starting and I was so excited about this cheat to life and I was talking to friends and family, and I started kind of getting hit with all the, oh well, what happens if you have a vacancy or what happens if interest rates go up? I feel like the buy and hold with high cash flow model can answer all of those things. You can determine you know what kind of a cash flow buffer you want on your properties to feel comfortable with. You can calculate if interest rates go up to 10 percent. Am I breaking even or am I negative now? You can kind of manage all that. To me, finding those cash flow properties is the most important.

Sandy Mackay [00:22:05] And then kind of on that note, how do you choose the markets to look at to find those deals? And how do you find the deals once you choose the market or what comes first?

Nicole Edmonds [00:22:14] Yeah. So for me, what comes first is I’m looking for markets that fit the cash flow model that I’m looking for. So I use the one percent rule to kind of evaluate these different areas. So that’s where I’m looking at purchase prices in the area. If the purchase price of a property in that property is bringing in one percent of that purchase price in monthly rent, that meets the one percent rule and I’m interested. This, to me, is now a possible cash selling property or a cash flow area. So, for example, you find a $500000 house bringing in five thousand dollars a month and rent that meets the one percent rule. I’m interested in that area. So if you’re from kind of the center of a big city, you’re probably thinking that’s impossible. And that rule leaves out a lot of its typically major cities, but it weeds a lot of them out because purchase prices are so high, and rents are not getting close to that one percent. So I’m looking at all of the kind of non-hot markets. They’re not the markets that there’s tons of headlines about appreciation in a hot market. Now they’re the kind of more boring area. The purchase prices are reasonable, the rents are high. Now I am looking at some different kind of stats on the town or the city, so population size. I don’t love to invest in a place that has a smaller population size than 20000. I’m looking at the vacancy rate in the area and I’m also looking at kind of who the major employers are and what industries are kind of feeding that town or that city. If it’s a one industry town, to me, that’s risky because if something happens to an industry that’s going to affect my vacancies, right? And then after kind of once I’ve determined that. So I’ve seen, OK, there’s cash flow in this area. The demographics, the stats on the area make me feel comfortable. I feel comfortable with this. Then I’m also looking at taking into account a little bit. Is this an area that there is expected appreciation? Are they extending maybe transportation routes this way or are there new developments going on? But for me, because I’m focusing on cash flow, that’s kind of the third thing that I’m looking at. Mm-Hmm. So that’s how I kind of identify my markets and there’s a ton of them. I invest in Ontario, so there’s a ton of them in Ontario. They’re just they’re not the sexy markets to be investing in. And then so once I’ve kind of identified those and I don’t focus on just one area and build my whole portfolio there, my properties are quite spread-out all-over Ontario. So if a good cash flow property comes up kind of in any of those areas, it doesn’t bother me if it’s not in my hometown or in the town that I went to university, it doesn’t matter to me. So once I’m kind of identified those, I think Sandy, your question was, how do I find those deals once I’ve identified them? Yeah, yeah. So I’ve worked with like, I’ll typically get a connection with a realtor in that area, you know, an investor focused realtor who can send me the types of deals that I’m looking for purchase deals just from finding them on MLS. And I purchased a property from calling. There’s a property that had a for sale sign out front and no idea what it was if it was multi-unit or what it was, and this was earlier in my investing. But a mentor of mine said, just start calling realtors, get comfortable asking them these questions, get confident with it. So I called on the property. It ended up being a really high cash lying dry block. So kind of all different ways.

Rob Break [00:25:30] That’s cool. Yeah, I mean, there’s definitely something to putting yourself out there. That’s I guess the moral of the story. Put yourself out there. Let people know that you’re looking for properties. That’s really the only way that they’re going to come to you.

Nicole Edmonds [00:25:44] Exactly. Start calling on properties on a property that looks good to you, even if that one’s not great. You’ve now made a connection with a realtor who typically lists those types of properties, right? And they know that you’re interested in buying so, you know, but be active. Don’t just kind of sit in the background and don’t take action. Once you start doing that deal, start coming your way.

Rob Break [00:26:02] So let’s say you’re someone who doesn’t have really a lot of money so like for you to just say, well, I’m going to put the down payment on a place and buy it. That’s not going to work for this person because they just don’t have it. What would you say are some strategies for somebody like that starting out with very, very little money?

Nicole Edmonds [00:26:20] So there’s quite a few different strategies. I think some of the more common ones, these are the ones that I like to use are partnering. So where you’re finding a money partner, someone who they’re willing to bring the down payment to the table and perhaps cosign for the mortgage? And you as the working partner, the person who’s not coming with money, but you’re coming with the knowledge, the connections, the time, the willingness to do all of this. So you’ve got your working partner, money partner. I think that’s a hugely beneficial strategy for both sides. And now you’re starting to use other people’s money. And once you start doing that? It becomes unlimited on how many deals you can do. Right, so you’re connecting with someone else, they’ve, you know, typically in my experience, I’ve found these are people that have been working hard. They’ve perhaps paid off their house or they’ve got money and savings, different assets, and they’re not willing to do the work that’s involved. They don’t want to manage tenants. They don’t like that idea. So partnering with those people is a great way that you can start buying property. I’ve also borrowed down payment money, so registered money as a second mortgage after the bank. And now I make sure that the property can pay, of course, for its regular mortgage, but also for this down payment mortgage. And so I’ve done that, and in that situation, I don’t have a partner in the deal, but just a lender in the deal.

Rob Break [00:27:42] Mm-Hmm. That’s cool. That’s interesting. Yeah. And I mean, the best way to get started is go out and see. I guess the hard part is for somebody who hasn’t bought anything, they’re obviously not going to be the expert partner or the, you know, the hands-on person, maybe not right up front, but they got to go out, get that first one, something that possibly doesn’t need as much work, but maybe some more cosmetic stuff. Everyone can get their hands dirty with those kind of things. But even if you’ve got like half the money or a third of the money, you can talk to people and join up join forces.

Nicole Edmonds [00:28:15] Yeah. And I think then you have to think long term as a working partner, right? So yes, it would be ideal to start partnering with people and get 50 50 of these deals. But at the beginning, when you don’t have that experience, you’re asking your partner to kind of take on some risk with you. So to get that experience, which is going to be so valuable for your money partners later? Yeah, maybe it means saying to somebody, Listen, you put in all the money, I’ll do all the work and we’ll do a 20 percent, 80 percent split. Right, like make it beneficial for them. Mm-Hmm. You know, I know somebody who just completely said that they partnered with somebody who they didn’t partner, they didn’t take any equity, they were just shadowing somebody to get that experience. Yeah, I think that you need to focus at the beginning on just kind of building that resume for yourself. So then it becomes beneficial going forward.

Rob Break [00:29:01] Yeah, exactly. It’s almost like just make it work, just prove to yourself that you can do it, and that will open the doors for you, too, because that’s one of the things like a couple of years ago, Sandy and I both did a lot of wholesaling of properties, and people ask me now and people shop deals to me, and they don’t get it. They’re trying to do like the really pushing the limits on. Well, actually, they’re just making the deal. I’m viable basically because they want like $20000 assignment fees in this kind of thing. Like very, very typical of what I’m seeing to the people that are coming out to the area, clubs, and stuff now. And I pull them aside because I feel like it’s my duty, like they’re just going to quit because they’re not going to get that, you know what I mean? So I feel like it’s my duty to say to them, Look, just make it work like make $500, but just prove to yourself that you can do it. Don’t be so greedy. And yeah, so that’s a very good point. Just take less equity, you know. Exactly. Make the deal happen, and you’ll prove to yourself that you can do it and then you can carry on and keep building.

Nicole Edmonds [00:30:06] Mm-Hmm. And that was actually another strategy. I want to bring up the wholesaling. That’s not a strategy to own the property, but it’s a great earned income strategy so that you can acquire that down payment and buy the first property on your own. So maybe you do for wholesaling deals, and you assign them at $5000 each night about 20 K and then your down payment for a property depends on where you are. But that could be a down payment in some markets. Mm-Hmm. For your property, right?

Rob Break [00:30:32] That’s true. And for those of you that don’t know what that is, basically you just get a purchase and sale agreement on a certain property that other investors are going to like, and you can shop that to them and just say, hey, I’ve got this deal. If you want to buy it from me, I’ll give it to you for $5000. And yeah, that’s a really good strategy for people starting out with no money. Definitely.

Nicole Edmonds [00:30:53] Exactly. If you’re going to use that wholesaling strategy, obviously now there’s more work in that you have to build that network. You have to find those people that are interested buyers. You have to do the legwork of finding under market value properties. Is there still something for you to put in, but to start making money? You don’t have to put in money for all kinds of deals

Sandy Mackay [00:31:11] and you want to learn a lot. Doing that as well, anyways, again, a network, learn how to look at deals and analyze them. I think we have a whole episode on that, rob. Probably. No, we

Rob Break [00:31:18] probably have a couple,

Sandy Mackay [00:31:20] probably a couple in the first, I would say in the first 10 episodes, there’s a couple of them there. The call is going to us to get this a lot from people asking me because we do a similar thing. You know, we raise a bunch of money in that. Where have you found at least starting out? Maybe how were you able to find people with this money? Where was it and how did you access it?

Nicole Edmonds [00:31:38] Mm-Hmm. So here’s how I think of it as I explain it to other people who are starting to look for money partners. Is that any money partner? So I think they kind of need to be convinced of or believe in three things, and those are one that they want to invest in real estate. They understand these strategies. They understand the power of investing in real estate. Two is that they want to invest with you, so they trust you. They like you. They understand your experience, they trust their money with you. And the last one is that they want to invest in the specific deal that you bring them. So with these in mind, with the first one finding somebody who understands investing in real estate, you obviously have a huge leg up. If you’re going to meet up group or some sort of network where everybody who’s there clearly wants to invest in real estate, they’re already on that train of thought. And now with that, if you already find somebody who’s there now, you just need to work on kind of building that connection with them, building a relationship, having them kind of like you versus if you go to friends and family first, now you need to teach them the value of investing in real estate and kind of have them understand the different strategies. So I’ve used both. I’ve gone to friends and family. That’s how I started first because. I didn’t have the track record, so I probably look less appealing to people. And then I started kind of as I built that track record. I’ve met a lot of partners through different real estate networking groups and just talking to people. Any sort of media opportunity that I’ve had has usually resulted in interested partnership opportunities.

Rob Break [00:33:11] Right now, when you go to talk to these people and we’ve talked about mindset quite a bit on our show, but how important do you think it is to have, I guess, a winning mindset when you’re talking to people about investing in your deals?

Nicole Edmonds [00:33:24] Mm-Hmm. So I think it’s so important and I talk to people who are in my shoes, but with less experience. They’re just starting out and I can tell that they don’t believe in what they’re offering to people, so they don’t really see the value of having a working partner. They feel like they’re asking a money partner for a favor. I think it’s so important that the working partner understands that. No, that money partner, if you’re talking to the right person, if it’s somebody who is willing to put in all the work themselves, then they’re not going to see value. But somebody who maybe hasn’t invested in real estate before, they’re maybe getting close to retirement or they’re just on a busy stage in their life, they’re not willing to put in the time, or they’re just completely scared of managing a property and energy tenants. But they want to make the kinds of returns that you can get with real estate. They’re going to see huge value in getting involved and having it be passive for them. So where they don’t have to do any of that work? So and I think that for myself, when I started talking to people and talking about, I was nervous, I felt like I was asking them for a favor and investing money because I wasn’t going to put in any money. And because I didn’t have the money, I felt like that was the most important thing. Mm-Hmm. And as I kind of went through that, I could hear people saying to me, really? And so I don’t have to do anything, and I get to make half of the return on the deal and hearing people say that and hearing how they were valuing what I was bringing to the table was a mindset shift for me and gave me so much more confidence when I was talking to people because I realized, you know, if they’re making three percent in their mutual fund and I’m offering them half of a 30 percent return on investment deal, I’m offering them 15 percent and they have to do nothing. And so if they have no other way of seeing those kinds of returns, they value that hugely. So I think that that’s important for a working partner. If you’re going to go into a conversation like that, you have to understand what you’re bringing to the table and how that’s a value. And like I said, it might not be a value for somebody who’s willing to put in that effort and work themselves. There’s tons of people who aren’t.

Rob Break [00:35:20] Yeah, agreed. Agreed. I couldn’t agree more. You know what? It is really tough to actually start to realize that. So I think that’s one of the key things for people that are listening to this to focus on is to understand the value that you’re bringing because it is tough to do that. We need the money. That’s what we need as the expert partner. So if we don’t have it, the deal doesn’t get done now. Alternatively, the deal doesn’t get done without the expert partner, either. So everyone’s bringing, I believe, equally important piece of the puzzle to the table.

Nicole Edmonds [00:35:55] Yeah, exactly.

Rob Break [00:35:57] Nicole, is there a quote or a piece of info or advice that’s always stuck with you? And how has it helped you?

Nicole Edmonds [00:36:03] Yeah. So this one, and I’m probably with my science background, very analytical. So I like the formulas and I stick to them. So I definitely like and kind of go by. Don’t change the numbers to fit the property, find the property that fits the numbers. Mm-Hmm. So I think all too often I’ll be talking to someone, and they’ll say, well, you know, the one percent rule doesn’t work here or, well, there really aren’t cash flowing properties here, especially if I’m factoring in buffers like a vacancy allowance and a property management fee and repairs and maintenance. I’m just not going to include those things and then the numbers will work. Yeah, which is not realistic. You’re going to be in a bad situation where you’re taking money out of your pocket to feed the property. And I think that’s where it comes back again to your goals, right? Are you trying to just own real estate and have them break even? Or is your goal to be having that extra income so you can do other things? And so if that’s the case, you got to stick with the formulas and then move to the areas or find the properties that fit that, but not the other way around.

Rob Break [00:37:04] Very cool. I like that one.

Sandy Mackay [00:37:06] One more quick question. Just I was just thinking about going back, talking about the money, finding the money there. How were you able to do because people are asking me this as well? And I’m just curious what your experience was in the call when you’re trying to get over that mindset of asking for money? What was it for you that made you actually get over that? Like, how were you able to convince yourself that your net value there? What was it that helped you overcome that?

Nicole Edmonds [00:37:29] So for me, it was hearing from the money partners that they could see the value. So I had done tons and tons of phone calls, and I got less and less nervous every time I did these phone calls. And the people that were saying that, first of all, weren’t scared off by this idea of whatever. I was offering a 60 40 split or a 50 50 split, and you could tell they were interested, and they wanted to make these returns. And then I realized I’m not. Asking for something that’s ridiculous. And there was an investor, and I was kind of giving her a little bit of mentoring and same deal, she had no money to put in and was super nervous to be calling money partners and asking them to invest with her. And I said, just start calling them like her. Once she had source them, I said, just start calling them. And the first few might go terribly. But by the time you’re talking to, you’ve made your 10th phone call, you’re going to understand more the value. I think that you can think through it, but you really have to believe it. So for me, a lot came from starting from doing it and taking that action perfect.

Sandy Mackay [00:38:30] I was hoping you’d say that because that’s what I figured was going to be answer. But I think most people will ask me that same thing. And they, you know, they say, oh, I’ve tried calling you if nobody wants the best of me, how many people like to call it? Because if it’s not like into the hundreds, then you’re not trying to even take a lot of action, probably to realize there are to find the right person because sometimes it can take hundreds of people. It might not be in your first 10 or 20 conversations, but you find the right person. But if you keep going at it, there’s people out there that need it and see value in it for sure is having to take more action.

Nicole Edmonds [00:38:59] Exactly. And I feel like that with a lot of real estate investing, especially if you’re lacking confidence in any aspect at the beginning. Just start knowing maybe the first few or sabotage because you’re no good at it because you have no confidence, but you will build that confidence. So even when we were talking about that deal that I saw the for-sale sign on my whole purpose for calling on that was just to get used to asking the realtor the kinds of questions that I knew I needed to ask. And then over time, even calling on, you know, maybe you want to start investing in big multiple residential 20 plans. The first time I called on a 20 plex, I was super nervous. Now, when I call, I feel super confident. So it’s just you actually have to do it. You can read all about it, but actually doing it is what’s going to really increase your success, make you better at it.

Sandy Mackay [00:39:44] Yeah, you got to get the reps and house. So what’s next for you and your business at this point?

Nicole Edmonds [00:39:49] Yeah. So right now, I’m actually working on three by six renovate or refinance properties. So working on that, I’ve got a four plex that’s been completely gutted. These are all to be refinanced after and keep as cash flow. And so looking to acquire more of those, I’m actually looking more toward bigger multi-unit residential. I’m working right now on a twenty-seven plex that I’m looking to partner with on that. And yeah, just looking to grow the portfolio with partners.

Rob Break [00:40:16] Mostly awesome, man. That’s amazing. You’re busy,

Nicole Edmonds [00:40:20] kind of busy. I’ve outsourced a lot of it, so it’s good.

Rob Break [00:40:24] How can people get in touch with you?

Nicole Edmonds [00:40:26] Yeah. So they can go to my website. So it’s invested with Nicole dot com and there’s a contact page there. If they have questions, if they are interested in partnering, or even just kind of want to know a little bit more about the strategies that I use, there’s a contact page there, or they can email me at Nicole at Invest with Nicole dot com.

Rob Break [00:40:46] OK, very cool. And as always, we’re going to have that info on our website page for this episode. So you go there, and you can find all Nicole’s links and contacts and whatnot and maybe will slap up her. Yeah, we should do Cindy when we ask people for their quotes or piece of advice. We should put that like on there somewhere, too.

Sandy Mackay [00:41:05] We can do that. Yeah.

Rob Break [00:41:07] Now, Cindy, how can people get in touch with you?

Sandy Mackay [00:41:11] This way right now is through our office now five three eight eight three three three or get a quick email or two info at Mackay Realty Network That’s the K K Y, and we can talk that way. Set up something, phone call whatever it may be, and go from there.

Rob Break [00:41:29] Very, very cool. If someone would like to get in touch with me, you can reach me at two eight nine nine two seven zero four six four or Rob. Mr. Breakthrough Okay, that’s my email. So drop me a line or the same as Nicole. If you have any questions about anything in this Durham or Peterborough area, which we’re sort of reaching our stretching, our pause out into now for some really great cash flow out there, you can give me a call that would be awesome. Okay, Nicole, thank you very, very much for coming on the show. We had a bunch of technical difficulties, and you were left hanging for quite some time before the show, so I apologize for that, but I’m glad that you were able to stick around and do the interview.

Nicole Edmonds [00:42:11] No problem. Thank you so much for having me.

Rob Break [00:42:14] Everyone have a great night.

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