POWERFUL INVESTMENT STRATEGIES WITH SEAN POWER

Microphone 10 44

Podcast Transcription

Announcer [00:00:01] If you are looking for the skills and tools to succeed in real estate investing, you come to the right place. This show is about breaking through barriers, breaking through limiting beliefs and breaking through to the life that you want to live through the power of real estate investing. This is the Breakthrough Real Estate Investing podcast, and now here are your hosts Rob Break and Sandy MacKay.

Rob Break [00:01:04] Good morning, welcome everybody back to another breakthrough real estate investing podcast, we’re very happy to have you today and as always with me, here is Sandy MacKay. How’s it going?

Sandy Mackay [00:01:14] Am fantastic. Fantastic. Got the beer gone, the summer 2020 beard and I’m feeling great, man.

Rob Break [00:01:22] I can’t get a barber. Or is that just pure?

Sandy Mackay [00:01:26] I was on vacation last week a little bit, so I just kind of got a little a little behind on it, then a little further behind. And then I just said, you know, let’s just see how this works out. I’m looking at it. It’s a little red and a little too red for my liking.

Rob Break [00:01:37] But now look good, man. You look, I know. What does that date distinguish?

Sandy Mackay [00:01:43] Yeah.

Sean Power [00:01:43] Very, very classy. I actually I didn’t realize that we’re doing this on video. I should have shaved beforehand to actually

Rob Break [00:01:51] know that we all got some stubble.

Sean Power [00:01:53] Yeah. The 2020 telcos

Rob Break [00:01:56] have dropped him for some reason, but I’m sure he’ll be back.

Sandy Mackay [00:01:58] We got this man

Cameron Brio [00:02:00] and he’s got a job too, so he’s OK. I didn’t crash. I’m safely parked. I should say

Sean Power [00:02:06] we were worried.

Rob Break [00:02:08] So we got the two guys with no hair on this side and the two guys with their outside.

Sean Power [00:02:13] So ours works out. Work perfect. They’re so perfect.

Rob Break [00:02:18] As always, everyone should go over to our website, break through our podcast. There you can download all of the episodes that we’ve done so far. We are working hard guys to get this podcast up on every different outlet that people use. We are behind on some of them, I guess, like we get requests every day to be to be available on or that place that where people get the podcast. But for now,

Cameron Brio [00:02:41] if it’s not available

Rob Break [00:02:43] where you we listen to your podcast, I don’t know how you’d be hearing this, but you can go over to our website and get everything there and you get a free gift there as well. It’s A.

Sandy Mackay [00:02:55] They can also watch or listen on Facebook Live as we do these shows every Wednesday, 10:30 Eastern or YouTube as well. Same time. And yeah, our website breakthrough our podcast dossier. You can pick up our four against the ultimate strategy for dealing with real estates. When you do that, you also get on our email list and make sure you don’t miss out on a show and get notified of those as they come out and any events, property tours, webinar or stuff like that that we got going on and just getting our word a little deeper and learn a bit more about what we’re up to and come out and take us up on some opportunities to meet us in person. All sorts of good stuff. So go over and do that if you haven’t already and get on that list.

Rob Break [00:03:35] So yeah, and people have been super-duper nice. We’ve gotten a lot of reviews lately. I’m not going to read them today, maybe next show. I’m going to read some of these reviews, but we have gotten a few more.

Cameron Brio [00:03:46] Read them all right now. Just read them. All right now.

Rob Break [00:03:48] Read them. All right now, I don’t have it up. That’s why I did that. I’ll do it next time because I didn’t have them up today. Give me a second.

Sean Power [00:03:57] No, no, you don’t have. You don’t have to read them all. He’s just joking with you. I’m sure we’ve heard some pretty good things about you guys ones.

Rob Break [00:04:05] Although, yeah, we have it up. I don’t know. It’s just going to take me too long to get there. We’ll read them next time. There were some nice ones there, though I appreciate everyone who has left a rating and review. And as you all know, that helps us rank higher in iTunes and just get the show out there, the more people who are looking for this kind of content. So thank you everyone who’s done that or appreciate it a lot.

Sean Power [00:04:27] Yeah, it’s good that you guys are doing this. Like there’s I find there’s enough like Canadian based opportunities for stuff like this. Oh, it’s like everything that I’m seeing online or like in boxes typically U.S. base. So it’s nice to see some boys that we could actually talk to do this kind of stuff.

Rob Break [00:04:45] Yeah, you know, and well, there is a lot more now, and we’ve had quite a few different podcast hosts who are Canadian based on the show recently. Anyway, it’s like they’re popping up now, so it’s nice to see more content, different, different views, right? It’s still targeted towards Canadians, and I think that’s important for our show. It has been anyways.

Cameron Brio [00:05:05] So all right. So we’re not going to talk about the 10 31 exchange today to do that.

Rob Break [00:05:09] No.

Cameron Brio [00:05:09] Okay. Yeah, good.

Sandy Mackay [00:05:12] Is direction that I’m mostly

Rob Break [00:05:14] talking about 10 31 exchanges makes me mad, so I’d rather not.

Cameron Brio [00:05:19] Yeah, it’s true.

Rob Break [00:05:23] Anything else we touch on first Sandy before we get into,

Sandy Mackay [00:05:26] you know, that’s we’ve covered all the basics, the visuals. I think we’re pretty much ready to go. I mean, we got two awesome guests, so maybe we should just dive in and get going. And you know, we’re. A different territory. We haven’t really talked to actual people in in their neck of the woods, but not much for a while, I think we’ve been kind of doing a bit of a cross-country tour the last few months. We’ve been going all over the place, which is great. We get a lot of requests about people getting people on the show from different parts of the country. And yeah, seldom found anywhere in Canada where the 10 31 exchange works. So I guess I don’t think that sounds like that doesn’t work in New Brunswick or Moncton, either. So.

Cameron Brio [00:06:05] No, no, no.

Sean Power [00:06:08] Our only hope tax advantage is the double property tax, which is great for cash flow.

Rob Break [00:06:14] OK, well, I think we have a bit of an intro there, don’t we Sandy for these guys? Yeah.

Sandy Mackay [00:06:18] Let’s read a little bit about to find out a little more about what these guys do, and you know, they’re in the real estate world, obviously, investments, realtors, that sort of thing purchased many homes over the years. I know, John, you’ve done a lot of rent on property purchases over the years as well and help facilitate a lot of those agreements. They work with sales, leasing, commercial properties, a lot of income, income properties, industrial, retail, office, etc. Johnny used to work with one of the largest real estate firms in Atlantic Canada for several years. I think that was Avis Young’s all right.

Sean Power [00:06:53] Yeah, I was with sir. I think it was probably the Cushman Wakefield that would have been one-way larger ones. So I started out in commercial real estate. Well, I started out doing the rent own stuff, actually. And then once I got licensed in 2011, I went with the commercial real estate firm called the Cushman Wakefield. Yeah, and they’re a fairly large organization, but I got some got some good training over Davison as well.

Sandy Mackay [00:07:16] And you also are you run at one or one of the biggest or maybe the largest realty investment clubs out there in Moncton. And so I’m going to get more into that through the show as well here. A bit more about what that’s all about. And yeah, what you guys tell us a little more about what you guys do and what that looks like and how you got into this real estate investing world.

Rob Break [00:07:34] Yeah. Charles, give us your names first, because I don’t think we did that properly yet. Actually, we took power. And Cameron, what’s your last name?

Cameron Brio [00:07:42] Brio? And I’m glad you didn’t say it because it’s often said wrong because it’s spelt a bit different.

Rob Break [00:07:48] I might brio or something like that.

Cameron Brio [00:07:51] Brio Yeah, you know.

Sean Power [00:07:52] Yeah, I always get. I always get seen for my name instead of Sean saying,

Rob Break [00:07:57] Oh, really?

Sean Power [00:07:59] Yeah, yeah, it’s funny that people and I’ll even email me at my email, it’s like, has it spelled correctly to actually get my email? And then they’ll start off with a high s when

Rob Break [00:08:09] your name works with the team, too, because you run the power team in Moncton. So yeah, sure, you guys could come on. So let’s Sean, first of all, to start off and just give us a little bit about what you do.

Sean Power [00:08:22] OK. Good stuff. So I mean, you guys kind of gave like a bit of a breakdown on what it is that I’ve done in the past. But just kind of like a quick summary is I actually I dove into the real estate world my very first time by being a newbie visiting the Monkton REO, which is a group that Cameron and I now lead. So there was a guy that came in from Ontario. He pitched the idea of being able to purchase real estate without any money out of your pocket. And I was just at a university, and I didn’t have any money at all, so I thought that that was great. So the little money that I did have, I paid him to be my mentor and then that transitioned into me getting a property or more of like a business partner. And then we just kind of cycle through purchasing real estate, and it was all done without money out of my pockets. So I learned, you know, creative deals pretty quickly and easily, I guess you could say by mistake, almost from kind of rubbing shoulders with the guys that already did know what they were doing. I just put my time and effort into it while they taught me how to actually put it together. And in the past, I’ve done, I’ve done private lending, I’ve done flips, I’ve done just long term holds. But when I first got my license, it would have been like in 2011, which would have been after I did the rent own gig and I specialized in apartment buildings and other investment commercial buildings only because Cushman Wakefield, they don’t do residential like they’re not on MLS or like realtor dossier. It’s all more so like internal networking and like through like a large corporation. So I teamed up the guy that was doing it for thirty-five years and I just soaked up as much as I could from him. And that led me to only dealing with investors kind of like on a regular basis. And then I found a lot of the people I was dealing with, they also wanted to flip homes and because the companies that I was with before, they didn’t necessarily tap into the more residential market. And same with my private lending, like the private lending was doing a little bit more residential than it was commercial. So that’s when I started selling houses that would have been about six years ago now. So we have a healthy balance of selling just going to residential homes, both for like your average consumer or as well as for people that are flipping homes. And as well as we’re selling quite a few apartment buildings these days to not so much on the commercial side of things, but with Cameron on board, I think we could put a little bit more focus into that because we have the ability to do so just from the background from Cushman. So, yeah, I’m excited that Cameron is on board, and we’ll see what kind of strategies he brings to the table for that stuff. I don’t know if that’s going to answer your question on my background or if you want me to chat more.

Rob Break [00:11:16] I mean, we can dig into it a lot more. I have a question about something you said, but I think, first of all, let Cameron talk a little bit about what he’s bringing to the table and what he’s done so far in the past. So I welcome Jan Cameron.

Cameron Brio [00:11:30] Yeah. Thanks, Rob. This is awesome to be on here. I do like the you guys are doing this when I dove into this number of years ago. It’s very tough to find any Canadian content that would really be focused to try to build a strategy. So I actually got into real estate investing kind of by way of self-development, self-improvement. What university business degree they needed to work until you died and didn’t really have a solid plan. And when my first, erm, got into self-help books, things that changed my mindset. There was a common theme that I noticed in a lot of love, but it kind of led to people that were buying and holding things and creating wealth through assets. And by dumb luck, I stumbled on the Monkton REO Group, and I went there to ask as many stupid questions as I could go home, do some research online and. And call people for coffee. And during that time, I had the opportunity to be involved with the highly driven sales organization that deals in the construction industry. So on one hand, I’m really about investing at the same time, I’m looking at building developments and new construction in residential commercial, and I thought, wow, there’s something here where I could add value and fortunate enough to help and find deals with local building owners that are either tired of renting the cash today and, you know, to line them either in the management capacity or up for sale. So it’s been a little bit of a whirlwind being a building owner myself, getting involved in management of other people’s assets from local owners. And it’s given me a great perspective to understand dealing with tenants, knowing the numbers of a great deal, and then trying to add value to the community through Rio.

Rob Break [00:13:36] OK, right on. So you guys actually met at that at the Rio Organization. Is that right?

Sean Power [00:13:44] Yeah, we kind of. We knew of each other beforehand. We actually both went to the same university, so we may have crossed paths through there. But like, we got to know each other a lot more through Rio, for sure.

Rob Break [00:13:56] How long ago was that? Talk a little bit about the club and how you guys met and that kind of thing.

Sean Power [00:14:04] Yes. How long ago would that have been that you came to Rio, can

Cameron Brio [00:14:07] I six years ago or so?

Sean Power [00:14:10] Oh wow, that’s crazy. It’s a long time. Yeah. So that’s roughly when I would have stepped into place to become the president of that group actually would have been about six years ago. So it would have been. Right at the beginning of that. So, yeah, I mean, the real group, like it’s probably similar to what you guys do here like, well, we’ll typically bring in professionals that are specialists within whatever category of real estate investing, whether it be a lawyer, an accountant, a developer, a flipper wholesaler, you know, whatever specialty that they bring to the table and just have them come and do their presentation on why their strategy works for them, how they got to where there are now. And answer any questions to make sure that other people don’t stumble upon the same mistakes that they would have. And just so that’s the primary focus on the education aspect of things, but then we also just strive to connect with people. So if somebody is looking to something as simple as build a house, then we would connect them with one of the builders that’s in the group. Or if someone’s looking to get some electrical work done, then they connect with one of the electricians in the group and so on. So that’s primarily the focus of the group is just through education and connections and learning from other people’s mistakes.

Rob Break [00:15:29] I mean, that was a monthly meet up. And how are you guys dealing with everything that’s been going on lately?

Sean Power [00:15:36] Yeah, well, typically we take a break in the summertime anyways, but from March we did one video like Zoom call should be doing more, but to be honest, like we, we haven’t really played with that format too much of like going on Zoom. So I think we’ll probably continue to keep on doing Zoom calls or something like this up until the point where, like everybody’s comfortable with being in larger groups, all at one table, because I don’t know what kind of social distancing this place is, it’s kind of like you don’t know how you would describe a city club, but it’s a city club where like everybody could go. And but I don’t know if the space itself will allow for enough spacing to have for everybody to be there. Yeah. Do you guys still have meet ups now or is it all just done through this now?

Sandy Mackay [00:16:23] Everything’s virtual for now. Yeah, we’re going back to an once school maybe gets back in, there might look differently. I’m thinking, how can people be going to be to learn more about that group? Is there? Are you guys going to website and stuff we can? Yeah. When people talk

Cameron Brio [00:16:37] on Facebook, we do have a website. It’s going to be revamped in the next couple of weeks. It’s on the agenda. But Facebook and Rio are Eio or Monkton Rio gmail.com to be added to the blast email list. If you’re not a Facebook user, we actually have a lot of traffic recently where people have been asking Who can I talk to you? I’ve heard about Monkton. Can we set up a call? So I think organically and people that are looking to invest in smaller cities and I do like it, Sandy. You made us sound huge. We’re not a big population by any means, but for the last couple of months, it’s even the last year, Monckton has been a hotbed for out-of-town investors. Hmm.

Sean Power [00:17:20] Yeah, that’s the continuing to go in that way. A lot of the buyers that I’m seeing coming through for any the investment properties, it’s more and more becoming people that are not from the Moncton area, which is driving the prices up, right? Because people are we have a fairly healthy rate of return here in comparison to some other competitive cities where, you know, it’s just more populated, like just to give you an idea. I think the Greater Moncton area as a whole is like, what a hundred and seventy thousand roughly can. Yeah, yeah. And like Moncton proper, the city is like seventy thousand people. So we’re not a very big city by any means, but. Like this area, we’re called the hub city, so it’s we have a lot of draws from other people like in regard to transportation and retail and everything. So it’s a fairly stable economy here. If you look at the Moncton area, it dates back quite a little while ago, but they went through some economic transitions when, like one of the main employers pulled out, which Moncton kind of did a rebuild phase. And if you look at the population, last time I checked, there was not more than 10 percent of the population within one particular industry. So should any industry actually collapse, it’s not necessarily going to affect Moncton as a whole. And we have never really had the spikes in values around here like and tell me if I’m jumping ahead here. But now go ahead, nana. OK, so like value wise, like we probably climb like the yeah. So we probably go up or down in value, like one to three percent per year on average. So we don’t get like the huge 20 20 percent spikes that some of these other cities would have recently. It’s been the strongest seller’s market that I’ve seen, and values are starting to climb quite a bit. Like, I think the average home price went up by like eight percent this year so far.

Rob Break [00:19:14] And I think for investors, something stable like that is great too. I mean, appreciation is always great. But if you can get good cash flow because the values haven’t spiked through the roof, then that’s something, you know, that’s another positive for the area, right?

Sean Power [00:19:29] Right. Yeah, I agree

Cameron Brio [00:19:32] on, I guess we should mention it to on some web forms. It is highly publicized, but we do have a double property tax within this province. So if it is outside of your primary residence, your tax rate is significantly higher. So even though the cost of entry can be lower, once you see the tax that can affect your cash flow and I guess in current years, there has been a group that has tried to lobby to try to get that addressed, and it was on the table for, I guess, the spring. But obviously with COVID, their priorities have shifted.

Sandy Mackay [00:20:07] So is that a double like literally double or is what are the numbers look like on that?

Sean Power [00:20:12] Yeah, it’s I think like if its owner occupied, it’s like a buck fifty six percent dollars of assessments. And then it’s like if it’s non owner occupied, it’s like three dollars and 10 cents. I usually just use the $3 mark sold like a hundred-thousand-dollar property. You’re looking at three thousand dollars’ worth of taxes. There’s talks like pre-COVID they were talking about potentially abolishing some of that. My thoughts were that they were just going to do it on single dwelling homes. I don’t think that’ll ever come into play with the multiverse or like two units. Plus it’s just to kind of like encourage people to still own cottages or secondary home for whatever reason, and just so that they’re not punished. Because right now, as it stands, if you had a house plus a cottage, the cottage would be double property taxed right now. Now keep in mind our prices are pretty cheap here, so it’s all relative like your cash flow is fairly strong here. Like, I’m sure you’ve seen some of the numbers on the properties of Rob. Like your average cap rate, it’s probably closer to like six point seventy-five these days. So that’s still a pretty strong cap rate when you’re looking at the grand scheme of things. But property tax will be a point of concern for some people

Sandy Mackay [00:21:34] so that property taxes, whether it’s if you’re out of province or foreign, it’s it applies obviously to all those rent.

Sean Power [00:21:40] Yeah, yeah, it doesn’t matter. It’s just like owner occupied or not. And then even if you are owner occupied and you have a portion of it that’s not owner occupied, it’s done on a percentage basis. So like if you have like a duplex, for example, and you’re in one unit and there are 50 percent of the total square footage, then 50 percent of your assessed value will be double property taxed. But again, like I, I’d have to double check on the average sale price. I would say it’s close to maybe two hundred thousand right now, but like just to give people like an idea on things like you can pick up like a nice six unit renovated for, you know, for four fifty here. So I don’t know what’s it like in your guys market for like a nicely renovated place.

Rob Break [00:22:34] I’ll let you take that one. Really?

Sandy Mackay [00:22:36] Well, six unit nicely renovated. One point two.

Sean Power [00:22:41] Oh, wow. Yeah, that’s a bit different.

Sandy Mackay [00:22:42] Maybe, maybe more like a couple hundred granted. Or at least if you’re for 50. If it was a six unit for 450, it’s falling over.

Sean Power [00:22:51] Yeah, no. Yeah. And I’ve seen that like I was actually in Toronto there not too long ago. And there there’s a place I was in the beaches. I’m sure you guys know these areas. But anyways, when I was there, it was a piece of junk. Like, it would be like a sixty-thousand-dollar property in Moncton at that point in time. And I think it sold for over a million because it was a lot.

Sandy Mackay [00:23:13] Yeah, double shot in that area, for sure. Yeah. I mean, we’re not even we’re both outside of Toronto. You know, Hamilton for me and the East Side, Durham, and Oshawa, that area for Rob, like we’re in the cheaper areas. So you know what I’m saying at one point, too, that’s cheap comparatively to the rest of the GTA. So yeah,

Sean Power [00:23:33] and I’m not here to like, you know, like everybody markets difference. My purpose for bringing that up is that the double property taxes aren’t necessarily a large pain point when you look at our entry level pricing, right? So it’s yeah, it’s all relative. It all works out. In the end, the cash flow is what’s the important topic here and our cash flow is good here.

Rob Break [00:23:53] I just wanted to ask you really quick, we’ll jump back in. Take it from there. Now, when you were, you were doing your intro. You mentioned that you started out by doing creative strategies and that was, I guess, a matter of necessity, right? So let’s jump right back there and talk about some of those strategies you employed and how they worked out for you. Just like sort of walk us through how you got started and your progression?

Sean Power [00:24:17] Yeah, for sure. So I hired a guy from I think he’s in Ottawa, and he was pitching the idea of what’s called like a sandwich leasing. So you would typically you would approach a vendor that’s looking to sell but doesn’t mind holding on to it for a while and then actually getting the sale price out the back end. So I would go, and I would convince those people it was even easier if somebody was actually renting it out. Already, I would go to Kid Guy, and I would find homes that were actually for rent because the mindset of those individuals, they’re already prepared to let somebody rent from them. And if you give anybody the right price, they’re typically open to selling it right. So I would approach either or the people that are privately trying to selling it or privately trying to rent it and convince them to give me rent with an option to purchase agreement. So let’s say the rent was a thousand bucks just for simplicity’s sake. And I told them that I would be willing to purchase that place for a hundred thousand dollars. I would then go out and find somebody else that’s interested in doing your rent to own and rent it out to them for, let’s say, twelve hundred dollars and I would sell it to them for a hundred and twenty thousand dollars at the back end. So I would make a spread of two hundred dollars per month and if and when they actually purchase it at the end of the line, I would make a positive 20 K from the amped up sale price. So I did a few of those and then I would also just go find a qualified client so I would qualify them through mortgage brokers to make sure that they were actually like, capable of purchasing within the next few years. And like a lot of these people were like, you know, they had good cash flow. They’re respectable people. They just went through like an unfortunate situation such as a divorce. And so they had the money and the ability. They just didn’t have the right credit. So I would find a good client like that, qualified them through a mortgage broker and say, OK, go out and find any house on the market that you think you could call your home. And once they found that property, I would pull in an investor. That investor would acquire that piece of real estate for that purchaser, and then the same scenario would happen. They would lease it to me for one-dollar amounts, and I would sublease it for a higher dollar amount and sell it to me for one dollar amount. And I would sell it to the purchaser for a little bit of a higher of a dollar amount. So I was controlling the cash flow without having to put any money out of my pocket.

Rob Break [00:26:56] Okay, great. Yeah. Like, I mean, those are those are, I would say, among the trickier of things to pull off, especially when you’re first starting out. So congratulations for four, you know, sticking with it because I mean, there’s so many people that hear about those kind of strategies, right? And want to get started and they don’t push through, you know, and make it work.

Sean Power [00:27:22] Yeah, I think my luck came from lack of knowledge, like I didn’t know enough about the real estate to know that this was hard to do. So I just went in assuming that it could be done and just kind of pushed through because literally, when I was at the real group, everybody was coming down on the guy that was doing the presentation like, oh, you can’t do that here, like, that’s never going to work. And I was like, who are these guys like? This seems like to make sense to me. And again, I was excited that I can buy real estate without money out of my pocket because I probably had like two thousand dollars to my name at that point in time and my university debt and still living at home at my parents.

Sandy Mackay [00:28:01] Awesome. That’s it is those are tough strategies to make work in most markets, but totally doable.

Sean Power [00:28:09] Yeah. So yeah, it worked out pretty well. And then like just through like I eventually I ended up starting up a private lending company because I was building up my own cash. And people would come to me for kind of like small, short-term loans. So I’d do it. And eventually I just ran out of my own money, so other people kept on coming to me and asked me for money. And I had investor clients because I was selling apartment buildings. So I just made the connection between the investor and the person who was looking to purchase and kind of structure like a private lending through. That means which eventually formed into a company and again helped build my knowledge on like how people are flipping homes without money out of their pocket and using other people’s money. So it’s knowing when you do these different things all along, you just start building up. Your ability to pull deals together can get more creatively.

Rob Break [00:29:05] All right, Cameron, let’s talk about how you got started in real estate use, I guess. Well, go ahead. Tell us about how you get started, sir.

Cameron Brio [00:29:15] Well, I thought that the easiest way was to maybe house hack. There’s a lot of semi-detached or duplex properties by both sides live in one renovate flip flop refinance and then do it again with two small kids. That’s almost impossible to convince anyone to do. So I just sort of looking for properties with a lot of equity after I would run the numbers very conservatively. And if the right deal didn’t come through on paper, I would just let it pass. So through savings and creative strategies, banker, I was able to have enough to buy a six unit that was very, very underperforming in the market, an area of town that is currently still in transition. And I kind of saw what it could be. So I had actually, on paper, built a five-year plan with what it would look like. Buy it at one price your one do this year or two. So it was everything from addressing tenant issues with their rent utilities. That was something that needed to be addressed and then basic things within the property that just needed updating. That would make the tenants feel a little bit better before moving into any of the hard-core big building system upgrades before refinance. Because the idea was to get it to a certain point, pull all of that money out and then replicate it as I’ve already found a deal kind of prepared in the wings and then move on to it. See, I got started by just savings, you know, using the hillock method, it owned primary residence. That mortgage was paid down a little bit of savings, so that was enough and seemed to work out quite well. I mean, I would say that that’s probably the easiest way for somebody that’s established themselves in their career to put some money aside to hop into real estate.

Rob Break [00:31:12] Yeah, it is pretty hard to I mean, I guess it depends on certain things, but my wife is sort of the same way because I would always back when we started float the idea that let’s move into a junker, let’s fix it up while we live there and, you know, sell it, move to the next one. And that never flew for us, and we had to just either quit the more or hold on to them, but as not our principal residence, but I always wanted to do that too. Just never happened.

Cameron Brio [00:31:41] Yeah, I mean, on paper and in theory, it’s fantastic idea. And anybody that’s young in real estate there likes the idea. I would say, get involved that way. You know, you, you have a buddy from high school or college or university. Ask him to live with you. They don’t find a RINO in a mess. Cheap rent will help them pay the bill and just replicate that in our market, and that’s one of the easier strategies to pull off.

Sandy Mackay [00:32:09] So can you guys talk about what were some of the biggest challenges, maybe each individually? What were the. Yeah, one or two like really big challenges they had to overcome? And what did that look like starting out primarily or maybe even nowadays where some of the biggest things

Sean Power [00:32:25] maybe it was dealing with Cameron? No, no. Maybe I’ll let you go first.

Rob Break [00:32:32] Really tough to deal with. Yeah, yeah.

Cameron Brio [00:32:36] I would say it would be the limiting belief mindset, right? I can’t do it. I can’t find the money and then getting stuck on the fact that you can buy real estate with somebody else’s money. You can, but just not on your first deal successfully. It’s very challenging because any new investor really doesn’t have a track record to pitch to their rich uncle or their neighbor. That’s retired. A lot of people that come to Rio, you know, which aren’t actually was successful in doing, but it is challenging you and you need to get a little bit of experience. You can buy real estate with that money of your own, but it’s unique and challenging for sure.

Rob Break [00:33:18] Well, I think those strategies, especially the ones that Sean is talking about their along with, like maybe wholesaling, are the ones that you truly can get into without any money. So those are those are, you know, super exciting for somebody who’s got the ambition to sit down and actually try to make them work, then that is fantastic. But I agree. If you want to hang on to something and you want to be the working partner for someone bringing the money to the deal, then you definitely need to have some kind of some kind of a track record, a background of why they should be investing their money into you.

Cameron Brio [00:33:55] Absolutely.

Rob Break [00:33:56] What you’re bringing to the table.

Cameron Brio [00:33:58] So I think that a lot of people do get hyped up from some of the YouTube gurus. They click on the link before bed and they think, Guys, I’ve made a I’m going to quit my job on Monday, and this is it. I found a plan. I would say if they’ve got the work ethic and drive to do one deal, make a mistake, learn as much as you possibly can and then by all means, come to meetings, make connections through podcast comments. All of those things would be great tools to elevate you and your profile. But yeah, for me, honestly, it was the mindset that I how am I going to do it? How am I going to execute this? How am I going to fit it into the schedule?

Rob Break [00:34:37] And then how did you overcome that?

Cameron Brio [00:34:39] What did you do? Just planet, you know, if you’ve got a driving passion and desire, you find a way to make it work, right? You know, you cut the grass yourself once, then you realize, okay, it’s going to be x amount and higher that just get over it and work it into your weekly and daily plan. You know, if you schedule an appointment or showing, leverage a professional to help you where needed to learn from your mistakes and just keep good notes along the way.

Rob Break [00:35:08] Right on, right on, and I would say probably your group that you joined is a big part of that, right, because you’ll meet lots of people there that have that same mindset can actually say to you, you know, when the when those people do say, no, that can’t be done, there’s an equal amount, if not more people at a group like that, they’ll say, Yeah, of course.

Cameron Brio [00:35:27] Absolutely without question. And I think that’s one of the magical things about meeting likeminded people that are on different ends of the spectrum. You really get to see where you were, what you could learn and then set new goals for yourself. And we’ve seen a few people that have really taken. Great action. Some people still come asking the same questions, waiting on the fence, and waiting for the perfect deal, they want to see a certain dollar amount cash flow per door. All of those things are great, and I would say the group tries to elevate everybody to do a little bit more.

Rob Break [00:36:08] Right on, right on. So now you both are working together. I guess you’re specializing in slightly different focus areas. So did you want to explain maybe Cameron, what your specialty is?

Cameron Brio [00:36:24] Yeah. So the goal would be to find phenomenal opportunities for investors that want to partner with us to. Own a duplex triplex multifamily. So my goal is to try to bring those deals to the table that are otherwise not uncovered. And we do have a lot of people that are reaching out to us asking to be either put on lists or kept abreast of the deals with the numbers. Everybody seems to have a specific set of criteria so far. Yeah, I mean, the hopper is getting full of opportunity and adding value would be just making those calls, trying to sit down with those potential sellers. And if it’s not now when keeping us in mind as a team of folks that can get the job done for them and alleviate some stress in the world.

Rob Break [00:37:20] And I guess you probably work with all different kinds of properties, but what is your is there? Is there one main thing that you guys do? Is it like a duplexing single families or is multi is what? What’s your thing?

Cameron Brio [00:37:34] I would say that the multifamily would be the sweet spot just by way of construction. The duplex format is common in our area. I mean, I think in southern Ontario, the Row House or townhomes are equivalent and single family to comparison the yard the four or five six 12 units. There’s a lot of them. Brick build walk ups that the shot had mentioned, you know, renovated could go for a two for one special in Ontario. But the four right here, there’s a lot of room for improvement. Traditionally, they are sixties construction and a lot of them are old. You know, two owners, Max, and there’s still a lot of room to improve the asset as well as the rents and, you know, fit within the community because people still are looking for affordable housing in the right area to there were public transport and all of that. And I mean, if you look at Moncton on a map, we do have a highway that is a semi-circle and we’ve kind of grown out from that semicircle and those are the desirable single-family neighborhoods. But within the city center and people still like to walk and bike and. Be involved.

Rob Break [00:38:52] It’s not so you don’t want to walk and bike, I guess this is your point.

Cameron Brio [00:38:57] Downtown is basically actually OK.

Sean Power [00:39:00] Yeah, we’re a pretty safe city here. I’ve seen the camera before, like we’ve recently been rated as like one of the most honest cities in Canada, and you get some weird foot traffic around here, but you don’t necessarily get any. You don’t get much violence here. Like, I’m comfortable walking on any street at any point in time. Maybe a little bit different, if you know for somebody else that couldn’t necessarily like, run as fast as I can. OK, but no, it’s a very safe city and it’s not a very old city either, right? We don’t have many century homes like when Cam saying the typical house that we sell from the 60s, like it’s 1960, the 1970s, 1980s, you guys probably have quite a few older homes there.

Cameron Brio [00:39:46] Yeah, especially in Hamilton, right? Sandy.

Sandy Mackay [00:39:49] One hundred and fifty years up to 150 years, yeah,

Sean Power [00:39:51] yeah, there’s not too many hundred plus year old properties in this area.

Rob Break [00:39:57] You know, I stayed in Mountain about 10 years ago. We went up to Nova Scotia and there was we didn’t know about this, but I got the opportunity to stay in probably the worst motel that Moncton has to offer. Yeah, because there was an AC DC concert that day and we didn’t know. So the hotel anywhere? Okay. So we ended up in not such a desirable location, but the city is very nice. Yeah, you say

Cameron Brio [00:40:32] nothing got

Sean Power [00:40:33] you didn’t get anything stolen or rock

Cameron Brio [00:40:35] and roll, that’s all. It was just charged by the hour

Rob Break [00:40:39] of the hour. No. So maybe not the worst one. I don’t know.

Cameron Brio [00:40:42] Okay. Okay.

Sandy Mackay [00:40:44] What’s the what is the in that city? So let’s. I’ve been to all three, but I’m curious, what’s the like the three major cities there in New Brunswick? So Saint John, I guess, Fredericton, Moncton? Yeah. What’s the if someone’s looking from outside there and they’re looking at investing in the New Brunswick somewhere, they’re looking at those three with or b the like reason to go to Moncton as opposed to those three, can they do a little sales pitch on them from an investor standpoint?

Sean Power [00:41:07] Yeah. I mean, like we’re pretty by us being from here. Rates like Franklin’s always been a little bit more expensive than the Moncton market, and I think that primarily had to do with like people fighting over student rentals because it’s a very strong student rental city as well as a government city. So your price per unit is typically quite a bit higher there and for it to make sense for you to invest in that market, you typically are getting into the student rental game. So I find people are usually coming towards here because it’s a little bit cheaper and you don’t necessarily have to cater towards the student rental. Now, don’t get me wrong, I’m sure there’s a lot of people in the Franklin area that they don’t invest into the student market, and they do just fine. But that’s been kind of the feedback that I’ve gotten from quite a few people in St. John. Again, I don’t like to talk bad about any city, but like, I’m always trying to pull people towards Moncton instead. But Saint John has like a bit of a cluster of fire code issues. So and they also have some not so desirable areas in town. So you really got to know what you’re getting into before you purchase. Like, I had one friend, it was something stupid, like you thought like. Eight units for one hundred and twenty thousand. It was something like that. It was like a six unit and a two minute anyways. He just tried to dump it after the fact because he’s like the fire code issues is such, you’ll have to put way too much money into the property than it’s worth. And then at the same time, he later found out that it wasn’t necessarily an area of town where you could get even close to a class rentals. So he has to put all of this a class type of finishes to bring it up to the fire code, and he’s not going to be able to attain those A-Class tenants. So I’ve seen that example quite a bit of times in the St. John market. But again, there’s they’ve got some very beautiful areas in Saint John, like a lot of waterfront properties at a good price. And if you know what you’re doing, I feel like you could get your best bang for your buck in St. John. It just comes with higher risk. And in Moncton, it’s just kind of like the in-between easygoing, pretty well priced, very stable market. We don’t depend on anything in particular for industry wise, and values are typically slowly going up each year. So it’s just a lot more stable, in my opinion. What are your thoughts on that?

Cameron Brio [00:43:44] Yeah, I know you hit the nail on the head. I mean, St. John also had some pretty strict regulations with town planning city council building. And it wasn’t until 2019 where they’re really able to get some marquee projects off the ground in historic Typekit buildings in the uptown area, which is close to their downtown, where the cruise ships come in. That was the area that had attracted a lot of folks that were seeing, you know, four or five six units for 100 hundred grand. They’re mostly built of sawdust and needed a lot of work and or the tenant that you could get in one that was habitable. Not going to last or they’re going to provide more damage than what it’s worth. But Monckton is actually comprised of three cities some London Deep and Riverview three any communities that offer a lot of different flavor with rental rates, with opportunity for development. And the three cities seem to really want to foster that growth of people coming from the northern coastal communities down. So there are some employers that have closed their office and say in Bathurst, which is far north, they’ve moved their workforce here. So we’re getting that. And then we are getting a spike of immigration where whole families are landing. Or maybe the husband is coming here gaining work and then bringing the rest of the family over. So a lot of that is really fueling investors to take the time to improve the asset. So there’s a lot of factors at play that are really benefiting our community as a whole that I would say maybe six to 10 years ago just were non-existent.

Rob Break [00:45:21] I mean, for whatever reason, I think you guys, you guys have more of a tourist draw too, don’t you like I mean, you do have maybe not right now, but a lot of those concerts and that kind of thing going on out there.

Sean Power [00:45:34] Yeah. And that kind of pulls on the whole concept of the hub city to really like. It stems from retail retail’s being very strong. So then that brings in the hotels, which also brings in more people in general. So we’ve got good concert sites. Water Park Zoo we used to have an indoor play park with like roller coasters and stuff, but that recently got changed into a bass pro. But we are the hub city, right? So everybody in this in the surrounding area typically travels here for their fun or their concerts or their shopping, but

Cameron Brio [00:46:09] not the beaches. Yeah. Absolutely. And I would say that Airbnb has presented a very unique opportunity for people with seasonal rentals and war units in their home that they’re willing to kind of let people have for a weekend or a couple of nights and has really kind of change the flavor for what we see and how people can invest. And then it also brings back the concept of how to get in with very little money. And it was a property manager. I’ve gotten tons of emails from folks that disclose, I’m Jimmy, I’m operating Airbnb business. Would you be comfortable with X rental rate? These are my terms. And a lot of people are very successful with that. So from an investment standpoint, I would say there is there’s a lot that you can dove into a full-time part time seasonally however you want to fit it in. I think it’s presenting a very unique opportunity.

Sandy Mackay [00:47:03] Property management, too, is the little that I assume I know a little bit about Ontario and other provinces, maybe and obviously there, I think there’s some advantages there from what I’ve heard as far as the tenant laws and things like that. Can you speak to a few of those things and maybe some advantages as to why someone might want to invest their money there as opposed to going there first?

Cameron Brio [00:47:25] First and foremost is the rent structure is not the same as other Atlantic provinces or even Ontario. Three months’ notice is what you’re required to give. So the long-term tenant and or a one-year lease that are contract three months is what you give month to month, 30 days after their first year is acceptable. So an investor coming in that perhaps sees an opportunity to raise rent, they’re not caught in a lot of the red tape that others are. In other provinces, and I know that that’s been beneficial to some that are coming in buying a place that really needs some attention and they’re even just renovating it. But putting the rents at market right, they’re not going crazy to try to, you know, make a bunch of money right off the heart. But they’re coming in, they’re doing the right work and then they’re getting the same tenant or a better to in there because I know that some tenants are long term. You come to them and say, I want to repay, and I want to be the floor. And number two is going to be ready in three or four weeks and be opened to moving a lot of them to say yes. So it’s rather unique where you’re not caught in the it’s called the rentals, been here in any bureaucracy that they have, they are here to assist if you do have a tendency dispute. And that’s typically damage and unpaid rent as the two big ones that you’d really want to engage them on. But I have heard some stories about Hamilton and Toronto, where you’re kind of stuck with somebody.

Sean Power [00:48:58] Yeah. Maybe you want to comment on the process. If somebody doesn’t pay because it’s within a month, you could kick out your tenant if they’re not paying here.

Cameron Brio [00:49:07] Yeah. So on the second day of the month, so if rent is due on the first, as stated in your lease on the second day of the month, you can serve them with a notice and that notice you essentially serve in person and or whatever preferred contact you mention in the lease, you have to present that same copy on the same day by email to the Rentals Board. You get a confirmation generated by just a board and then within three or four days, you actually get somebody that can contact you and ask if it’s been resolved. So the tenant has 15 days to right the wrong, whether that’s late rent or damage. At that point, it’s your rent plus any late fee. And then if the 15 days passes, then you can start the eviction process, where then the sheriff can get involved with the approval of the rental easement. So why? Why? That sorry, on the 15th day of the month.

Sean Power [00:50:04] But like, what date will the. So by the 15th was that when the sheriff would show up to kick them out or what they would have already been?

Cameron Brio [00:50:13] They would slot you in based on scheduling and availability. So sometimes it’s not an exact science, and with COVID, I know that it’s been even worse, so delayed. So typically, it’s a 30-day process that you’re looking at if all things go according to plan.

Rob Break [00:50:28] Yeah, you know what? That’s virtually identical to what we have here.

Sandy Mackay [00:50:34] But we’re not getting people out in 30 days.

Rob Break [00:50:37] Yeah, no, no, we’re not. Because again, it’s based on scheduling and everything like that. But my, you know when I’ve had to do it, it’s actually went quite smoothly. I haven’t had to do it during COVID times. All my tenants have been paying, so that’s good. That has been great. Amazing. But you know, when I had to, I found the process here was not so bad either. Yeah, and it’s virtually identical second day. I mean, your forms are probably different, whatever form you have to, whatever form you have them, and then they’ve got 15 days to correct it and then you can go. Typically, what you want to do here, though, is you’ll want to go and like, adjudicate some, you know, sit down with them, and try. That’s what they encourage you to do. It’s not. It’s not just straight. No, I want them out kind of thing.

Cameron Brio [00:51:30] I find, though, once you have it in writing and you certainly do some fashion, then you have a bit of value in the conversation to help them understand what the process is, where else in our province. So if you pay on the 14th day and forward the fee, the clock starts again. So this can be a recurring thing for tenants to kind of abuse the system that’s there to protect them. So that that has been frustrating to some landlords and property managers. And I haven’t had to run into that, but I know that there are people that they kind of use and abuse the system that way. So, you know, they basically get a couple of three months of rent every year if they just keep moving. And tenancy screenings aren’t always linked on the back end to find out if they have been evicted from a property. I mean, I’ve used the service tenant cloud and I did see once a tenant had admitted to that, we actually spoke about it. Situation was a common one. Boyfriend left, couldn’t pay the rent. Nowhere to go. There was a child involved. What do you do? Well, we couldn’t pay, so we were evicted upfront, honest. And they’re actually a great tenant tonight. But the checks and balances for me.

Rob Break [00:52:48] No, sorry, I was just going to say, I’m just looking on Facebook. We’ve got a common here, David Blodgett says you must have great tenants Rob. Well, I’m not saying there hasn’t been hiccups, so don’t get me wrong. Think negotiations with tenants and you know, everything hasn’t been 100 percent perfect. So I’m not going to I’m not going to pretend that that’s the case.

Sean Power [00:53:09] Maybe they’re just afraid of you.

Rob Break [00:53:10] Yeah, I kind of doubt it. But you know,

Cameron Brio [00:53:16] a job with your dog and a baseball bat.

Rob Break [00:53:18] There’s always hiccups, right? I’m not saying that. I’m just saying we’ve worked with our tenants to make sure that we come up with something that that they that they can make. You know, that’s doable for them in the Situation

Sandy Mackay [00:53:30] Room right now, because otherwise you’re wait until we’re into like June at this point, like next June. Like to get anyone out of this like this, like it’s going to take a year plus with the backups and no evictions for whatever the term has been. Yeah, it’s going to be a nightmare

Cameron Brio [00:53:47] if you don’t in Ontario, are you? How does your damage your security deposits work? Is it like, do you hold the last month’s rent? Okay, so here you actually, it’s a security deposit for the building and it’s held by the government, so we would remit it through a web portal. They would take the money from the landlord’s account and then that would be tied to the tenant’s name. They receive a tenancy number and a letter in the mail. And upon moving out, if there is damage, the landlord actually has to go through, apply for IT documents, and prove to be able to get any of those moneys back. Rob Break.

Rob Break [00:54:24] We have to pay double property tax.

Cameron Brio [00:54:26] Yeah. So much admin. Yeah, yeah. And I mean, I must

Sandy Mackay [00:54:31] say though, how much can is it a negotiable more

Cameron Brio [00:54:34] than one month’s rent or more? So that’s my son. You had a $500 a month unit. I mean, $500 is probably very nice, well appointed. So let’s say they ripped the dishwasher out and damaged your refrigerator, which can happen. You know you’re paying out of pocket or the owner staying in of pocket.

Sean Power [00:54:53] You can still take them their small claims if you wish, though. Yeah, oh, you could go to that. It’s a headache. And they say, like, good luck getting blood from a stone. But yeah, you can still take them to small claims and try to seek any damages.

Rob Break [00:55:06] So do you? Yeah, one of the sorry, we’re quick. Do you take security deposit in first and last?

Cameron Brio [00:55:12] You can the damage just the damage?

Rob Break [00:55:15] Well, that’s good, at least. I mean, it’s specifically put aside for that.

Cameron Brio [00:55:21] So had the property. So for example, if you’re an out-of-town investor, I or Sean did manage, he decides, you know, he’s out of the business and I take over. There’s a transfer and it’s already all done. It’s very similar. So in that regard, it is a slow process because if it was, let’s say, a 24-unit apartment building and the deposits are always in and out, you then have to close the books on that cut a check to probably the lawyer and then put it on your side, which you know, there’s always going to be a debate about who paid, who didn’t pay. I waive that guy and then he’s calling in a year looking for his money, so I could see that being a nightmare.

Rob Break [00:56:02] Yeah, yeah.

Sean Power [00:56:02] Sometimes when people are closing on properties, they’ll actually make all the tenants sign a document proving that they didn’t necessarily have a deposit, or they did. And what dollar amounts, as well as any items within the property that they may own, such as appliances or whatnot. So that way, you don’t acquire a property where you think they have zero damage deposits and come out to find that everybody has, you know, one month’s rent on their damaged deposits. So you could go about that if you’re acquiring a property, it gives them like extra layer protection. Typically, it’s in the lease, so it should be in the lease itself, and that would stand.

Rob Break [00:56:39] You know, this has been really informative, guys want to thank you for everything that you’ve shared. Let’s talk about finally here, what’s next for you guys? What are your big plans for the future?

Sean Power [00:56:51] I just keep on growing really like we’re enjoying what we’re doing, primarily on the sales side of things really like both being realtors. So we’re a team for now. There’s us and my father actually worked for us, and we have an assistant. So I mean, last year we saw probably close to be like in your mid-90s. So we sold almost 100 units last year like 100 deals, several hundred units, for sure. So I would just keep on looking to do bigger and better deals on the investment side of things like my wife and I are. We’re looking at acquiring like a 12 plus unit here pretty soon. She’s a self-employed individual, so we’re both incorporated and have her money within that. So we’ll just use our corp to go and buy a property together. And then that’s where we’re pretty long-term focus, like we’re both fairly young, we’re from the city. It’s a city that’s so small that like your name is very important, right? So if you’re not good at what you do or if you are not truthful to people, the word travels very quickly. So we’re always focusing on keeping our name and our brands to the most premium that we can. I don’t know. Does that answer your question on growth?

Rob Break [00:58:11] Yeah, I appreciate that now, Cameron, what are you going to what? What are your big plans?

Cameron Brio [00:58:16] Honestly, to say if I can, I guess I do myself with bringing up deals to the table to satisfy all of the investor clients. I find that we’ve reached a point where we’re evaluating team member to an investor. Can come to us with their budget, their expectation, and we can find the suitable property that the checks all of those boxes. So if all those boxes can be checked and all the investors are happy, and I would say that growth mode is happening and we achieve the goals, especially the ones that I’m setting out for myself.

Rob Break [00:58:49] Fantastic. I think that’s the probably the best problem to have been too many investors and not enough properties, probably.

Sean Power [00:58:56] Yeah, it’s definitely a problem. We need to. We need more sellers out here.

Cameron Brio [00:59:00] Yeah. Now we’re making calls daily and it’s funny, you know, people that we’re considering selling in this market, they’re seeing an opportunity. Their dream numbers are coming across the table. And, you know, if we can make it happen for them that we’ve done our job with the real hat on, it’s definitely found the people that can add value in your team. I know that I did it in the beginning. You know you want to find your calling. All the realtors are calling owners yourself. That’s a really good way to detract from actually winning. I find that if you have the right individuals in place, they’re going to help you find and uncover and probably get you a better deal than you can get on your own. And again, that was lesson that I learned myself, which is why I’m working with Sean doing this now because I see that it’s incredibly valuable.

Rob Break [00:59:49] Awesome. OK, well, again, thanks, guys. You know, this has been really good. I think that you’re going to have some people reaching out to you and wanting to learn more about the market.

Cameron Brio [00:59:57] So appreciate it.

Sandy Mackay [00:59:59] And so, yeah, what’s the wrap up like? What’s. Any final words? And then like, how do people get in touch with you if they want to learn more about Mike dinner, about you guys in your businesses?

Sean Power [01:00:10] Yeah, I mean, they could go to our website, power team dossier, or they could email our assistant info at power team dossier, and she’ll just move the ball forward with either myself or Cam or actually my father as well. Alternatively, call my cell directly. It’s five zero six two nine seven one and can maybe I don’t know I have your number memorized

Cameron Brio [01:00:40] five oh six eight nine one two seven zero call or text and if you want to find out more about the market talk shop, I mean, we’re doing it all day, every day, so might as well get the ball rolling.

Rob Break [01:00:53] Awesome. Awesome. OK, well, all those contact points will be in the show notes. So anyone that wants to reach out to these guys, you know how to get there. Just go to the website and click on the show notes and you’ll see all of those options right there. Sandy How do people get in touch with you?

Sandy Mackay [01:01:10] Two eight nine three eight nine six eight, four six or Sandy MacKay Realty Network, ACORN.

Rob Break [01:01:15] You can reach me at Rob at Mr Breakthrough. Okay, so thanks again, guys. Appreciate you coming on. Thank you. Good to see you again. And I guess everybody will see you next time.

Sean Power [01:01:25] Thank you very much. And you guys.

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