Table of Contents - Profits through Furnished Rentals with Aaron Bellmore
Dave Debeau [00:00:08] Well, hey there, everyone, this is Dave Debeau with another episode of the Property Profits Real Estate podcast. And today, my special guest is a good friend, a client and a business partner, Mr. Aaron Bellmore. How are you doing today, Aaron?
Aaron Bellmore [00:00:23] I'm doing really well, Dave. Thanks for having me.
Dave Debeau [00:00:25] My pleasure. So I've known Aaron for quite a few years now. I vaguely remember when he was first getting started in real estate investing. It was a pipefitter going hard up in the oil patch in northern Alberta and Grand Prairie. And then he found out about real estate investing and he got going with that. Before I knew it, he was doing that full time. And he focuses on something really kind of unique and that is furnished rentals. So it's it's not Airbnb. It's furnished rentals or professionals for folks that are looking for something between kind of an apartment and a hotel. And it's a really interesting model. So, Aaron, and I'm looking forward to us digging in deep about that today. So before we get into that, I just want to tell us a little bit about your background and what got you into real estate investing, what your big moment was about real estate.
Aaron Bellmore [00:01:22] Sure. Yeah. Well, as you mentioned, my last buy the our career was as a pipefitter. I'm a journeyman pipefitter. I grew up on the island in Vancouver Island here. And it was just really slow for work unless you had some fishing or logging connections when I was younger. So out of high school, I went up to Grand Prairie and got a number of different bits of experience in the oil and gas industry, a few different industries. But I ended up running a tool truck for quite a few years and going through a pipe fitting apprenticeship. But I did start that apprenticeship pretty much at the same time as my real estate investing career. And so my goal was to hang that certificate on the wall in my office. Once I got it basically and have retired myself essentially or been financially free from real estate investing prior to completion. So is that what happened? Yeah, that I was actually two years I quit my job as a pipefitter two years prior to getting the ticket. I went back just to finish it and see it through, but I was already elevated myself from that career. What what was
Dave Debeau [00:02:29] it that kind of got you into real estate investing in the first place? What was a big light bulb moment for you?
Aaron Bellmore [00:02:35] Well, it was actually a friend of mine. He called me up and this was only like a couple of months after I got my first little bit of credit. I had a credit card and I was spending and, you know, paying off and spending and paying off to build it up. But a friend of mine called me and he says, I'm buying properties. And Terzic, you should come and check it out. There's all these great things that are going to happen there. And so I kind of got caught up in the hype and I bought a place there sight unseen, a little townhouse. And it was really interesting because I learned a lot from that first property. But I had it for 12 years. I only saw it once. And we didn't do I didn't do any more investing in that area, but it did work out really well. And that's kind of what got me started. But I figured, OK, this went pretty smooth. Actually, it was surprisingly fast and easy at the time to get the financing and stuff, probably based on my income through the the pipe fitting career. But I told myself, OK, well, I better get a little more educated before I do this again. And so I started to take courses and read and it was another friend of mine. I'm pretty blessed with all his friends, I guess. But they sent me a book, Rich Dad, Poor Dad, and that showed up in the mail and he had written on the inside of it. You know, I think you'll do better than I will with this, but I want 10 percent. Ha ha ha. And know that just really got me going. And I actually haven't lost motivation since because the concept of financial freedom, which they teach in there, was just so much more exciting for me and attainable than retirement. I just it truly did get me stirred up.
Dave Debeau [00:04:07] And so when you were telling me earlier that what really, really got you going with real estate was one day when you crunched the numbers and realized what it would take for you to be able to quit your job. So what you tell is very, very briefly about that quick story.
Aaron Bellmore [00:04:22] Oh, sure. Yeah. That was basically when I had three properties. We bought that one rental interest. I bought a second one a few years later in Grand Prairie. And then we found out we were having our first child. So we thought, OK, well, we better buy a house to have our family in. And so I was still working at the time, but I was going to work one day and I thought about these three properties. And if I didn't do anything else from that point forward, I just kept those three properties. Simply having the mortgages paid off would have given me a million dollar nest egg and equity. And without any mortgages, I could have lived off those rents. You know, between the three, I would have had to move out of our house, of course, to generate revenue in that one. But those three properties would have given me roughly a sixty. Your income, and so I felt like I had my retirement, my financial freedom was covered, it was I was mid twenties at the time, so I would have been around, you know, freedom 50 kind of an idea. But I just thought, wow, you know, like this is is this so simple? I just got to stay the course and get there sooner than the old 65 that
Dave Debeau [00:05:27] started to focus on that and start doing that full time. So how long did it take you between then and when you're able to quit the job and be a full time real estate entrepreneur?
Aaron Bellmore [00:05:38] Not too much long, actually. I was it was twenty nine. We got that third property and then it was somewhere in two thousand and it was twenty ten. I quit my job and 2010 we incorporated fresh coast investments.
Dave Debeau [00:05:51] And what was it that allowed you? What was the tipping point that allowed you to quit the job?
Aaron Bellmore [00:05:56] Oh my wife's my wife's approval. I guess she she could see that I was pretty bummed out after being home with our first son for four months. And then I went back to work. And then when I was working the 12 hour days, I was missing out on any time with him because he'd be sleeping by the time I got home. So I was kind of getting a little grumpy. And she just said, well, why don't you quit your job? Nice. OK, that's kind of what I was leaning into anyway. So I did that. But like on the financial side, it was probably the fourth property we got. We talked about
Dave Debeau [00:06:30] that one and that's that. That was the first furnished rental you got into, I believe. And that's what you're really well known for now. So tell us walk us through that first deal and that second big light bulb moment that came on for you.
Aaron Bellmore [00:06:44] Sure. Yeah, the property it was I guess I was in 2010. You know, the market was still pretty down from the 08 and 09 kind of situation. So I was just looking around for my next investment property. And realtor showed me this six bedroom house that had been, you know, pretty much converted into the six bedrooms. They took the downstairs living room and made two more rooms. So but this woman had been managing and renting this property out, fully furnished by the room for the previous ten years. And so things were slow at the time. But I came across this listing and I looked around. I thought, holy moly, this is I just did a little quick math in my head. And I thought, this is a no brainer. I thought, why is this thing even still on the market? And, you know, but it was slow. Nobody was looking for that sort of stuff at the time. So I purchased that property with my first joint venture partner. And then she taught me everything that she had learned and done in regards to zoning and insurance and management for this type of rental.
Dave Debeau [00:07:49] Who was the lady that sold it to the
Aaron Bellmore [00:07:50] lady that sold it to me? Yeah. Yeah. So it was really good. And we actually even got in there early and did any other repairs and maintenance that we wanted to prior to taking possession. But possession was a smooth transition. And so I basically managed this property of six individuals at a time and then I had my other properties as well. But after a while it just became like night and day. You know, the the returns were better, the tenants were nicer. You know, everyone was just happy. It was a good win win all around. We were providing some accommodations where they could save on their hotel costs and have a bit of flexibility as well through this type of management style.
Dave Debeau [00:08:30] And let's do a quick comparison for the listeners and the viewers right now. So that house as a single family home, how much would it have rented for give or take?
Aaron Bellmore [00:08:42] Yeah, somewhere between two thousand and twenty four hundred probably,
Dave Debeau [00:08:46] let's say two thousand dollars a month. And as a furnished rental, renting it by the room, six rooms fully furnished. What kind of revenue we're generating per month.
Aaron Bellmore [00:08:57] Yeah. At the time it was around fifty four hundred or so and sometimes we even make more than that if people were paying by the week.
Dave Debeau [00:09:04] So I just just to give the viewers an idea. So you've got the same house, you rent it as a single family home. It'd be a fairly nice home, fairly large. You got four to six bedrooms now get you twenty, twenty two hundred give or take, but the same house, renting it out by the room, furnished rentals to the kind of clients that that Aaron rents it out to. You're looking at increasing that to what do you say. Fifty six hundred fifty four.
Aaron Bellmore [00:09:30] Fifty four hundred dollars. Yeah. Yeah average. I mean give or take you're
Dave Debeau [00:09:33] looking at three thousand dollars a month in increased revenue but an increased profit because again it at twenty or twenty two hundred dollars a month as a single family home you're probably only cash flowing, maybe a couple of hundred bucks a month. But that same property as rented out by the room furnished now your cash flowing literally close to three thousand dollars a month. Huge, huge difference. So was that like a it's like an epiphany for you? I would imagine it was, yeah.
Aaron Bellmore [00:10:05] Well. That's exactly what happened. They had other unfinished properties and moving along, you know, just but it was just like night and day compared to this one, you know, it was just a lot more. Yeah. I mean, there's more cash flow, so it's nice. You know, you got no issues when it's time to fix something, you got no issues. If you got a little bit of extra turnover and stuff. And we do incur some more expenses for sure, but we manage in house, which keeps that under control basically. So most of that extra revenue is coming back to the company.
Dave Debeau [00:10:34] So it makes sense. So fast forward to today and how many properties do you have in your portfolio? And you're just off camera all you just added another one today. But how many properties do you have in your portfolio? How many rental units? How many? You actually don't have it counted by the rental. You're kind of by by the bed or the bedroom, because that's quite often how you read this. How does that look in your portfolio today?
Aaron Bellmore [00:11:01] Today we are at ninety eight individual units, houses and apartments. A combination of I think that's something like forty one or forty two buildings, buildings, but yeah. Which translates to about two hundred and fifty I guess a few more now but furnished beds. So like you said, we're trying to get paid on on a regular basis. So yeah, it's grown quite a bit from the beginning and yeah it's not.
Dave Debeau [00:11:30] So what would you say some of the big advantages to having a furnished rental versus an unfurnished rental, what are the big I mean obviously we've seen that the cash flow is exponentially higher. What are some of the other benefits that you see as a real estate entrepreneur?
Aaron Bellmore [00:11:50] Well, first of all, after a number of years, I realized that the wear and tear was like drastically reduced. We still obviously have regular household maintenance, but not having furniture come in and out. And with this tenant profile, we don't have as many children or pets which are also quite you know, you've got both.
Dave Debeau [00:12:11] You know what you're talking about.
Aaron Bellmore [00:12:12] Yeah, certainly. I know my kids and pets are destroying my house as we speak. So I really noticed that difference. You know, I thought, holy smokes, I'm looking around and I'm like, these places look exactly the same, you know, as opposed to my unfurnished ones where I had a lot of painting and cleanup, you know, on an almost annual basis whenever I turn over these these other families and stuff. So that was really huge. But also the the tenant profile, I guess. And this might be the ones that I'm attracting. And maybe it's because I can relate to them because I am a firefighter who traveled around and worked in hotels and camps. Right. So these are the folks that, you know, I can relate to. But, you know, they usually have families and mortgages and a life back where they live and they're in town work. And then I'm just kind of connecting them with something that can save them a bit of money, but also give them some normalcy. So they're not eating McDonald's every night and they got a place to cook. And it's, you know, really lighten the load. It doesn't feel like such a sentence when you're out working out of town. And I feel like, you know, that translate right back to the even conversations they're having with their family in the evening. You know, they're just a little more comfortable, a little more healthy and less time to unwind when they do get back home, hopefully because working on the road and being away from your family is a challenge.
Dave Debeau [00:13:24] That is your typical client profile. Blue collar workers. Are you are you ready to executives? Who are the people in your units?
Aaron Bellmore [00:13:35] Primarily, typically blue collar, I guess, construction workers somewhere in a blue collar right now. Yeah. You know, and that's and that's yessiree. That's what you know, I'm not going and wasting a bunch of money on marble countertops and trying to be executive in every place. But, you know, we provide really clean, really well maintained, attractive properties that are comfortable. And so it's kind of a nice balance in the middle. And I don't think we'll be able to keep our places as full as we do if it was all corporate, because there's not that many coming to Grand Prairie on a regular basis, but there is never enough people to do the work and stuff in that town. So there's always people coming from out of town across Canada. And so, yeah, those are the ones that we've kind of figured out the best way to nurture them and give them what they're looking for. And it's working out really good for us. Again, we don't have that furniture come in and out of wear and tear. We clean these places quite regularly. And, yeah, it's it's a little bit smoother of a ride. It's definitely more management and more
Dave Debeau [00:14:33] so that's probably the biggest. If there is a pitfall to it is you have to be more hands on. What's the typical time that a a tenant is staying with you in this model?
Aaron Bellmore [00:14:45] Honestly, average is probably three months tops. But really, like what happens, we do have turnover throughout the seasons, but it's typically a September to April winter crew. And then in May through the summer, it's summer crews and, you know, different construction. But, yeah, it's it's a seasonal thing. You know, we usually have that turnover every spring. But by treating people good on the way out, knowing that they're, you know, just seasonal and not trying to stick up for their deposit and take advantage of them or anything like that, we have a lot well, ten years now of repeat business coming back every time they're in the area. So, yeah, that's what we work with. And and what I like and it's been really good so far,
Dave Debeau [00:15:27] has been an excellent writer. And a time flies when we're having fun with the last forty five seconds we've got here. If people are interested in finding out more about Aaron Bellmore and what you're up to, what should they do?
Aaron Bellmore [00:15:40] Well, please go to my website. It's fresh coast investments Dossie and you sign up for my newsletter. That'll be one way for us to keep in touch a little more often. And yeah, if you want, you can email me. It's Aaron Áron at Fresh Coast Investments Dossie.
Dave Debeau [00:15:57] Awesome. Very good. So, Aaron, thank you very much for being on the podcast today and for the inspiration because you know you have really created your ideal lifestyle through real estate investing. You went from being a blue collar pipefitter, working yourself, working up north in Grand Prairie to owning a very, very large portfolio, moving your family and yourself back to Vancouver Island where you wanted to live, managing your business very, very effectively from a distance and really creating your your ideal lifestyle through real estate. So thanks for what you're doing, for being the inspiration you are.
Aaron Bellmore [00:16:33] You're welcome. Well, I'll keep doing my best.
Dave Debeau [00:16:37] All right, everybody. That's it for this episode together. And we'll see you on the next one. Bye bye. Well, thanks very much for checking out the property profits podcast. And you like what we're doing here. Please head on over to iTunes, subscribe read us and leave us to review it. Very, very much appreciated. And if you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom Ticker.