Table of Contents - Quitting His Job, Infill Developments And Full Time Real Estate Investing With Kaush Nanubhai
George El Masri [00:00:00] Thanks for joining, ladies and gents, I appreciate you guys being on once again, I interviewed the man, Coach Knight, who by today, some of you may have heard of Coach. He is a full time real estate investor, also a CPA. So he was describing his story about how he started as someone who worked at a golf course when he was younger. And one of the people, a wealthy person that was attending the golf course, suggested that he should either become an accountant or a lawyer. And he took their advice to heart and decided to become a CPA. From there, you realize that what he was doing wasn't going to help him and his family. It wasn't really doing much for his wealth. So he focused on real estate investing. And we discussed how basically the birth of his daughter and son made him really want to to go down that path of investing in real estate. In twenty nineteen, he was able to retire from his job and rely solely on the income that has his properties were producing. So we talked about that journey. We also talked about his recent infill development. So he had a property in St. Catherine's that he actually severed and used a prefabricated home or a modular home. He talked about that process. So I think you guys are going to get some good value out of this. And as a reminder, I just want to share with you guys that I am currently working on a few off market properties in Weland and St. Catherine's. So if you have any interest in finding out more, I'd love to see if there is a way for me to help you and help you build your wealth through real estate. I know that a lot of people are sometimes afraid to move forward for whatever reason. If you find that you are unsure about what to do, reach out to me, go to well-off Dossie, book a call with me. I'm happy to discuss. And also, if you would like to pick up some free reports, just go to West Africa for its last report. There's a bunch of good information in there for you. Enjoy the episode.
George El Masri [00:01:52] Welcome to The Wealth podcast, where the goal is to motivate, inspire and share success principles. Today I'm here with Coach Nubby, who is a a full time real estate investor now, actually. So just a little bit of background on coach. He spent the first seven years of his corporate career as a finance professional. He is a CPA or a former CPA, and he realized at some point that he didn't have a solid plan for his family's financial future. So he decided he wanted to start focusing on real estate investing. He spent the next five years after that point building a real estate portfolio of 11 properties and in twenty nineteen. So last year, at the age of 42, he was able to replace his income and leave his role as a recruiter to become a full time real estate investor. Some of his recent projects include an infill development project to build a purpose built duplex using a modular building. So a prefabricated building. And we're going to talk about that. So welcome. Thank you for joining us today.
Kaush Nanubhai [00:02:50] Thanks, George. One correction. I still am a CPA.
George El Masri [00:02:52] Still fair. Not a farmer. Yeah, not a former. Maybe you don't practice as much.
Kaush Nanubhai [00:02:57] Exactly. Exactly. I understand what you're saying. Yeah.
George El Masri [00:03:00] Yeah. And so these intros aren't.
Kaush Nanubhai [00:03:01] I worked hard for that. So I want to like.
George El Masri [00:03:04] Got it. All right. We'll give you credit for that. OK, Coach. So the way I like to start off, I like to ask about your childhood, so I want to know a little bit about where you grew up and maybe one or two things you remember from from that time.
Kaush Nanubhai [00:03:16] Sure. So I grew up in North York and the Gene and Sheppard area, which was close to not not the greatest area, but, you know, close to Jane and Finch. But, you know, there's a lot of a lot of kind of images come up when you hear Jane and Finch and so forth. But to me, it was just just life, right? Like, I didn't know it was a good area. Bad area. Just grew up there. Right. So, you know, it was I had a great group of friends. Some memories would be, you know, playing soccer ball hockey. I was really involved in the martial arts growing up as well. Mainly jujitsu. Yeah, no, it was it was a great time and a good group of friends. So, yeah,
George El Masri [00:03:59] it was jujitsu popular when you were growing up. It seems like it was.
Kaush Nanubhai [00:04:02] He just started. Yeah. Just started becoming popular. Yeah. The style of jujitsu that I learned was more stand up kind of more versus ground fighting. It was more stand up multiple attackers because we learned my my instructor was more of a he was an ETF officer. So he was using he was kind of teaching us the practical stuff they would use on the street, like when multiple attackers and so forth. Right. So, yeah,
George El Masri [00:04:26] I always thought that jujitsu was like on the ground. I didn't realize that originally.
Kaush Nanubhai [00:04:31] It was more I believe it was more kind of stand up. Right. Fighting with swords and so forth and, you know, back in Japan and so forth. And then I believe, you know, one of the Masters or so forth went to Brazil. You know, I guess, you know, Gracies and other families kind of modified it as well. I believe that's the history. Yeah, that's. And that's interesting. More. Yeah.
George El Masri [00:04:53] Yeah. And now a lot of people associate jujitsu with Brazil because there's so many good, good people that come. Out of there, yeah, definitely. Yeah, I never really thought about the history and how it's probably Asian because of the name Jitsu. Yeah, Japan. And how did that get end up being a big thing in Brazil? It's interesting. I have to do some research and figure that out. Yeah, for sure. Yeah. So did you ever put your jujitsu to use were you ever competing in tournaments or anything? Yeah, a little bit.
Kaush Nanubhai [00:05:20] Yeah. Yeah we did, we did enter some tournaments. So all of the group of guys that I grew up with, we were all involved in it. So yeah. Cool actually. I mean it's funny, I mean we'll talk about me becoming an accountant in the future later on in the podcast, but I always joke that. So while growing up, you know, some of my friends continued with with martial arts and one of them actually fought in the UFC, became very popular in the UFC. And so I was joke that, yeah, I always joke that, you know, I became an accountant. He became a fighter.
George El Masri [00:05:49] So nice. Well, what's your friend's name, if you can?
Kaush Nanubhai [00:05:52] Carlos Newton.
George El Masri [00:05:53] Carlos Newton.
Kaush Nanubhai [00:05:55] Is he he was one of the original like. Yeah, yeah. First Canadian titleholder, I believe.
George El Masri [00:06:00] Was it what was his weight class.
Kaush Nanubhai [00:06:02] I think he's lightweight.
George El Masri [00:06:03] Lightweight. I probably remember the name, but he wants to fight a long time ago. Yeah. I don't like I know he has a party.
Kaush Nanubhai [00:06:10] Well yes.
George El Masri [00:06:12] OK, well that's cool. That's interesting. Yeah. So it was his style, primarily jujitsu like he was a crapware.
Kaush Nanubhai [00:06:17] Well he yeah. Definitely was initially jujitsu but then he's the kind of guy he would pick up things from all different styles. So he'd go training Muay Thai, kickboxing, all different types of styles and he'd pick up what worked for him. Yeah. And then apply that. Right.
George El Masri [00:06:34] So yeah. Well that's necessary. Terry, there's no one in the UFC today that only only knows how to do one thing. Everyone pretty much knows how to do everything. Maybe they're not great at everything, but but they can get by for sure. Yeah. It's always interesting. Did you ever do any striking like did you ever take any boxing classes or morti or any of you
Kaush Nanubhai [00:06:53] know, like I said, like I started at a certain point I started focusing on my career and yeah, I made it all the way up to like brown brown belt, black stripe. But I actually didn't get my black belt. That's one of my my bucket list items to kind of go back and maybe get the black belt.
George El Masri [00:07:07] Yeah. So cool. Cool. Well, that's awesome. Good for you. So tell us then, how did you end up going from martial arts to accounting? What was that journey?
Kaush Nanubhai [00:07:18] Well, actually, growing up, funny enough, I used to work at a golf course, so I worked there for four, ten, ten summers. And it had a really big impact on on me. It was it's funny. It was called Oakdale Golf and Country Club, and it was just located across the street. So I used to be able to cross the street, hopped the fence, and I'm in the golf course walking to work. Nice. And so basically it was some of Toronto's top business people. As I mentioned to you earlier, it was mainly a Jewish golf course. So the membership was primarily of the Jewish background. Yeah. So I e since my name's kosher, I used to explain my name as kosher and without the ER because, you know, Jewish people eat kosher food and they'd never forget my name. So it's pretty cool. So I had a really good opportunity there and I'm, you know, grateful for that opportunity to be around so many successful people. And again, some of Toronto's top business people, including in the real estate space, a lot of developers like the Monkees family, they were members. They're the owner of Tribute Homes, the CEO of RioCan. So just a number of very good people. I didn't know who they were at the time, but I just tried to give good service and I did a number of jobs there. I did I started out as a caddie, so I used to carry two golf club, two golf bags. Yeah. And back in the day, those bags, they're like thick, like leather straps. So I used to carry them for about four hours and you get forty bucks and you get a hot dog and pop it after nine holes. So after two hours. Yeah. And, and yeah that's what I started doing. And I used to come home sometimes with like bruises on my shoulder. But it was fun though, like I enjoyed, you know, having the ability to make some money. Right. And, and also to interact so that and then I moved into the back shop, which cleaning the club's parking cart, so forth. And then I moved into the play coordinator starter role. That was really cool because I got to interact with a lot of the membership that way in a more intimate level. And I had control over their time. Right. So they wanted to get to know me too. Right. Because I could make them have a good day or bad day, depending on who I put in front of them or behind them or that type of thing. Right. So but it was really cool because I had to negotiate with them sometimes. Hey, let me put this person. I'll get you next time or like slip this person in front of you to do this, that type of thing. And I said gently have to nudge them to move quicker, you know, and stop talking and let's get to the tee. So it was really cool. I got to know the membership really well. And yeah, that was a really cool opportunity for for for, you know, growing up where I did it. It was like a paradise in the middle of the ghetto, right? So it was somewhere where I spent a lot of time growing up. And so kind of the reason I'm kind of bringing this up is one day I was sitting down with one of the members and I you know, I told him I wanted to be in business and I asked him, you know, what do you suggest? What should I do? And he suggests he said to me, be a lawyer or an accountant because he said every business transaction needs one. Yeah. So I picked the accountant. And and, you know, the other thing which was really cool is when I told the membership I wanted to, they told some of the members that I wanted to be an accountant, you know, be a chartered accountant. They they were just really supportive and happy and started making phone calls for me, started writing recommendation letters. It was really, really cool. Like they didn't get me the job. I had to have the marks to get the job like a job. But in the accounting world. But, you know, obviously having their recommendations helped. So it was it was really cool. And, you know, I just really grateful for that opportunity. And I think that, you know, when with that, I guess just that Jewish community, when they see that you work hard and they respect hard work and they support you, it was it was really cool. Yeah. Yeah. So it
George El Masri [00:11:24] was nice. I've heard that before to
Kaush Nanubhai [00:11:26] support each other. There's a lot of learning from kind of being around that culture growing up.
George El Masri [00:11:31] Definitely. And that sounds like a pretty cool job. You're getting paid about ten bucks an hour with the lunch.
Kaush Nanubhai [00:11:36] So yeah, that was initially. Yeah. Then I then I kind of went on payroll. Right. And I did those other jobs.
George El Masri [00:11:41] Yeah. Yeah. That's pretty, pretty cool for a kid to have.
Kaush Nanubhai [00:11:44] They got to play on the golf course to like after hours after work and you know, but I would you know, I'd be kind of playing sometimes but going to my martial arts classes or other thing, doing other things. Yeah.
George El Masri [00:11:55] You must have been in pretty good shape at that time.
Kaush Nanubhai [00:11:57] Yeah, that's for sure.
George El Masri [00:11:58] Carrying I mean, carrying those bags for four hours and then martial arts. So that's good. Yeah.
Kaush Nanubhai [00:12:03] A very active growing up.
George El Masri [00:12:05] Yeah. Yeah. So, so you did your your accounting gig for a while.
Kaush Nanubhai [00:12:09] Yeah. Yeah. So I articled with PricewaterhouseCoopers so one of the big accounting firms, so it was a great experience. I got the opportunity to see a different business every month basically. Right. Go in and learn about their business, understand their numbers, make sure it makes sense. So I was an auditor, right. But you know, I didn't love auditing, you know, I didn't it kind of you always kind of looking at something from a negative point of view like what? What are they doing wrong? Like being skeptical people and so forth. And, you know, I was more of an upbeat kind of like I wanted to see the glass half full kind of guy. Right. So I decided I enjoyed the numbers. I enjoyed the camaraderie at the firm. I enjoyed, you know, interacting with clients. But I just didn't love auditing. So I decided to try doing finance within companies. So I worked for Advanced Micro Devices. It was called Atai Technologies, and they were acquired by Advanced Micro Devices and then Home Depot. And, you know, I enjoyed using the numbers in a different way, but it was more of a desk job. And I kind of like that kind of going out, meeting clients, that type of thing. Right. So when I was looking for a new role, the recruiting firm that I was helping me look for any role said, hey, you're an accountant. You have personality like why don't you join us? Right. And it was kind of a really tough decision because you worked so hard to get your CPA to be established in the accounting world and you're like the recruiting. Being a recruiter doesn't necessarily have the same. You know, you don't have to, like, have the education and so forth. Right. So it was a tough, tough decision. But I kind of went back to what that member told me. And I thought to myself, I wanted to be in the business world. I didn't necessarily want to be an accountant. Right. So I thought to myself, OK, if I do this, I probably can because I was recruiting accounting finance professionals, I could still use my finance experience and network. Right. But I could use it in a different way. Right. And I could basically learn new skills like sales, marketing, business development at the same time. And worst case scenario, if I didn't like doing it, I would know where all the best jobs were. Right. So, so. So I decided to take the plunge and I switched from being being an accountant to being an executive recruiter. And I started off with, you know, more larger kind of firm that gave you a lot of training and so forth. And then I moved to a boutique firm by the end of my my time as a as an executive recruiter. As a partner. Yeah.
George El Masri [00:14:54] So cool. Yeah. All right. So you try different things. Yeah, counting and then recruiting and then at what point in your life did you decide? I know we kind of touched on in the intro, but at what point do you say, I want real estate to be a part of my life?
Kaush Nanubhai [00:15:08] Yeah, so funny enough. So I moved from I mentioned I moved from the larger firm to a more boutique firm.
George El Masri [00:15:16] One was that, by the way, that was
Kaush Nanubhai [00:15:17] about 2012, right, when my daughter was born. OK. Right. And, you know, now I had two children, have a son and have a daughter. And he's four. He was twenty ten. She was twenty twelve. And I was thinking to myself, wow, now we've got to really start thinking about the future. Right. Like I started right after my son too, but like more when you had to rate. So I was thinking and I was placing people in job opportunities that, you know, where there were pensions, where there were retirement programs and so forth. Right. And I was like, oh, what's my program? Because remember, I not only moved from accounting to executive recruitment, I removed from salary benefits, so forth, to commission for the cold calling, which I've never done in my life before and, you know, trying to get out of my county shell to become a better rounded business professional. Yeah. Yeah. So that's when I started thinking about it's like, OK, my family's future. What do we what do we got here? So I started investigating different wealth, building strategies. And, you know, I stumbled upon, you know, rain. Right. And I went to my first acre in 2013. And that was probably the turning point for me, like where I always knew real estate was obviously being at the golf course, seeing some of the membership and seeing. But I also and funny enough, when I used to go at companies, I used to see some of them, like I did some real estate companies. I'd see the members names like on the documents, the minutes and so forth. So it's like I always kind of in my mind you, real estate was a great way to build wealth or wealthy people had real estate, but I never realized why. Right. And when I went there and I learned about leverage, I learned about, you know, demographics and GDP growth and limited supply, I was like, wow, this makes total sense. Why didn't I do this sooner? Right. Actually, funny enough, I did have an opportunity to do it sooner. So in about 2008, this is a funny story, kind of circles back to where I am now. But I had the opportunity. I sat down with someone across from, you know, how the coffee was introduced to someone and they pitched a joint venture opportunity to me.
George El Masri [00:17:33] Right, right. Yeah. And I was like, huh?
Kaush Nanubhai [00:17:36] Well, that's interesting. But then I was like, OK, so I'm going to put up all the money. You're going to do the work and you're going to get half. Yeah. Shouldn't you put up half the money? You know, the common. Yeah. You know, right. And at that time I was like, I'm going to do it myself. Funny thing is, five years went by, I didn't do any great. Right. If I had actually listened to that guy, I would have learned my my learning would have been a lot sooner. And my my my wealth building would have been a lot sooner. Yeah. For sure. So that that's going back. So that's twenty twenty. But going back to rain, you know, that's where I learned kind of the basis I established my network. Right. When if I didn't buy anything in the first year though I just educated got comfortable network. But then slowly you know, you'd go to the meetings, you'd see you're sitting beside people who they weren't as educators. Me, they weren't, you know, as smart as me maybe, or they they just took action. Right. And they just followed an approach and they they just took action. And I was like, why am I not doing why? Why haven't I done this sooner? Why am I not doing it yet? Right. So, yeah, I was I suffer being an accountant. I suffered some analysis paralysis. Right. So but I finally pulled the trigger like about a year later. So 2014 and for about five years I bought two to three properties a year. And you know, twenty, nineteen, twenty nineteen is when I, you know, was able to feel confident that I've replaced, you know, my my income on an after tax basis. And, you know, I would take the plunge. And that wasn't easy either. Again, being conservative count and having two kids at home, I mean, I have, you know, cash flow from my portfolio, which which is which is strong. But just taking that plunge was was challenging, too. But again, I thought back, you know, there was one question actually, when I was moving from accounting world to the recruitment world, one of the questions the interviewer asked me was, what are some of the best jobs you've had or the elements of jobs that you've had that you enjoyed the most? And one was actually, as I mentioned, working at TWC. I enjoyed the collegial environment. I enjoyed servicing clients, heading to different companies. I also. I enjoyed working at the golf course where I was a play coordinator, I was on the phone and that's what helped me switch to recruiting, but it also helped me switch to real estate because I was thinking to myself, what did I what do I enjoy the most about? I enjoyed about recruiting is the interaction with people. But it didn't have the same numbers element that I had that I enjoyed. Right. So when you put those two together, you get real estate, you get numbers, you get interaction with trades, you get interaction with realtors, you get interaction with mortgage brokers, you get, you know what I mean? So it helped me solidify that this was the right path, plus the financial freedom, the opportunity to be creative and so forth. So it was kind of like, again, another no brainer. What are you waiting for? Just quickly,
George El Masri [00:20:41] you know, it was it was the right decision for you. Exactly. So along the way, let's say in 2014, you bought your first one. You said you were buying two to three per year after that. Yeah. Were you leveraging those properties where you refinancing them or getting home equity lines of credits on the investment properties, or were you just kind of using your savings?
Kaush Nanubhai [00:20:58] So back in. I did one good thing back in 2003. I bought a condo and I bought it not as a real estate investment, more to live in after I got married. OK, but I also bought it because I was spending like two or three hundred bucks every weekend, every night, like Friday, Saturday, Sunday, going out drinking because I had money. I was living at home. I was you know, I was like, man, I need to buy something to force me to save. Right. So yeah. And plus I was, you know, going to get engaged and, you know, wanted to somewhere to live with my wife afterwards. Right. So so basically I bought that condo. My wife and I had the house, had a house in Oakville and we we leveraged those two initially to get started. Yeah. And then, you know, luckily the prices in Oakville kind of continued to go up. And every year as or every time I could see, like at least 100k in appreciation, I would refinance and pull that money out and grow. And then, you know what happens, right? Then you have you so you leverage, you have one, two, three, say, from your initial primary residence over time, then those start to appreciate the leverage those. Right. So that's that's that's kind of how I grew the portfolio. Cool. So the condo in the house and then re leveraging those.
George El Masri [00:22:21] Yeah. And at what point did you feel I mean not that you have to share the exact numbers, but what was your, your process for identifying that you had enough cash flow to no longer work. Was it was it based on a certain number that you needed to pay off your personal, personal monthly, whatever, like you?
Kaush Nanubhai [00:22:43] So my wife still works, right. The way that we you know, it was roughly a number like it was like I want to be in a similar after tax place. Right. And, you know, when you're looking at like April dividend income out of my corp. So that's kind of taxed at a lower rate than I would have been taxed
George El Masri [00:22:59] from your holding company?
Kaush Nanubhai [00:23:00] Yeah, from from my active company. So I have a holding company and you have a company that charges property management fees to that rate. So. OK, cool. And then I pull money out of that active company. Right. So when when I you compare the after tax kind of in your pocket, money is where I want it to be in a similar place. So so my wife, my wife, the way we structured is my wife's income covers our household expenses and I cover everything else, like my my kids hockey activities, my vacations and so forth. So we do all the other things and her stuff doesn't care of our basic needs.
George El Masri [00:23:36] That's awesome. That's exactly what my wife to be and I are discussing. We're talking about her doing the personal payments for whatever we need. And then I would just continue to build wealth and acquire properties and go down that path. But that's interesting what you're saying about the holdco and the active corporation that you have. So the active one has basically just a property management company in their property and project.
Kaush Nanubhai [00:24:00] So like with my my most recent development project, I would charge project management fees as well. Right. But property and project. Yeah, and consulting. Like, I'm starting to you know, when people ask for advice, you know, per our rate, that type of thing, some consulting in there as well.
George El Masri [00:24:15] OK, yeah. Interesting. And your property management, is that just for your properties or are you managing other people's property
Kaush Nanubhai [00:24:22] is just mine as well as my JV partner. So I have three JV partners and as well currently and I yeah. Like I said, I have two earlier to you. I have two waiting right now. So I over time, as people have seen what I've done, the fact that I'm no longer working, that I'm legitimates, you know, like I'm not doing something funny right there, like, wow, this this stuff does work and, you know, can you work with us? And what I tell people is, look, you don't have to work with me for everything, right? Like do the first one and learn like I like I give them that example I shared with you just one. Learn from it, see what I have to do and see if you want to do that. And then if you do, then just go ahead with with the next ones on your own, like if you want to go to networking sessions, you want to read the books, you want to, you go ahead and do that. But, you know, if you want to become a doctor, go become a doctor. But if you want to get healed, just go to the doctor and you know your heart rate. So, you know, when you when I actually calculate back how much time I've spent, reading how much time I've spent going to networking events, how much time I've spent networking, developing relationships, it's equivalent to a four year more than a four year, almost a university like there's a lot of times it was over over 500 hours, I think at one point when I calculated a couple of years ago. So, you know, you don't it doesn't come for free rate.
George El Masri [00:25:45] So and it's ongoing. You're still you're still learning. Yes.
Kaush Nanubhai [00:25:49] Yeah. And I like to teach I like to share strategies and so forth. I kind of it helps me mirror my my my CIA background and my I always had it. I had a minor and in personal finance growing up and you know, sorry, going through university. So, you know, I really enjoy kind of helping people structure their finances as well. Right. Like, cool.
George El Masri [00:26:11] Yeah, that's awesome. There's I want to go back to that thing with the active property management, whatever or whatever else with your property management. Are you finding the tenants as well or are you outsourcing that part?
Kaush Nanubhai [00:26:25] I mostly find them OK, but from time to time I want to say, OK.
George El Masri [00:26:30] And are you doing that all on your own or do you have staff that's that's helped us do
Kaush Nanubhai [00:26:34] that on my
George El Masri [00:26:34] own. So you're doing all the property management. You're any tenant inquiry's. They all come to you.
Kaush Nanubhai [00:26:40] They'll come to me. I mean, ever I have a really great resource out in kind of the area where my properties are like a handyman and that and I have developed, you know, the trades that I use and so forth. So, you know, the process is, you know, I don't have a website kind of set up where they have to log a maintenance requests or anything like that at this point. But the process is pretty simple. I tell them, I tell them, you know, send me a text, send me pictures. I take a copy of that text incentive to my handyman. He goes out, fixes it, builds it, builds me and bam, that's kind of.
George El Masri [00:27:17] Yeah. How it works. Yeah. Ah. Do you know Kacey Wong. I do, yeah. Yeah. So Casey was on the podcast a little while ago and he was saying he, he manages over two hundred doors himself and it's the same exact procedure. He doesn't have anything fancy. He gets the tenants to text or email a photo of the problem, sends the person out, deals with it, gets billed and that's it. Yeah. So if it works for two hundred units then yeah. Why do we, if we have less than that, why do we have to get fancy and create all these crazy systems. Right.
Kaush Nanubhai [00:27:47] Right. But don't get me wrong, I do want to, I do want to like transition that out probably in the next year or so so that I could just purely focus on finding opportunities with partners and so forth.
George El Masri [00:28:01] You mean delegating the property management. Yeah, yeah, yeah,
Kaush Nanubhai [00:28:04] yeah, yeah. So I don't want to be active doing that forever. Right. It's just through the transition phase, you know, I have to pay myself to write so. Yeah. But I have to, what I have to do is get the buffer of, of projects in the hopper before I kind of transition that out. So that's kind of what I'm working on next, you know.
George El Masri [00:28:21] So do you build your property management fees into the joint venture agreement like you sell it as part of the deal, like, hey, we're going to do this deal and my property management company is going to build X dollars up X percent per month. And this is like if you want to work with me, that's how it is. I kind of. Yeah, I mean,
Kaush Nanubhai [00:28:38] basically, I think having like I've never had a situation where a JV partner didn't want me to because I have a vested interest in the property.
George El Masri [00:28:47] Yes. Yeah.
Kaush Nanubhai [00:28:48] But I tell them, look, if you I tell them this is kind of the standard fee. Right. I also in my JVs is I helped them understand like where to get the money from. Like if you have money you don't necessarily take the money from from from, say, an investment account and then automatically invest in real estate like you. You basically pay down your mortgage first, create the room in a credit line and then use that money. Right. So I let them I always make them use borrowed money. So I let them write off their interest on their borrowed money. And I, I take a property management fee, but I'm fine if at some point somebody else manages it to. But that number has to be budgeted in there because that's a realistic cost of of doing business. Right. So, yeah. Yeah. Cool.
George El Masri [00:29:31] And I know you're not an accountant, so
Kaush Nanubhai [00:29:34] I am an accountant. I don't do accounting anymore. Yeah you are. I am betrayed by kind of profession. Yeah.
George El Masri [00:29:42] So I can ask you accounting questions.
Kaush Nanubhai [00:29:44] I don't remember all the specialty tax like I audited. I did my taxes but they everybody thinks accountants no tax and say, OK,
George El Masri [00:29:53] OK, well I'm not going to ask you like a very specific tax question, but what I was going to say is. Was there like a certain number, that of property management income that you thought made sense for you to incorporate under that like to have an active corporation, or did you just do it right from the beginning?
Kaush Nanubhai [00:30:11] So, you know, that year that I kind of did after I kind of attended rain, I didn't do anything. I kind of research kind of how am I going to structure everything? And, you know, I got some advice on setting up, you know, the three tier corporation and so forth. Right. So that's kind of when I did it right. So I did it before I started buying. So it wasn't like a certain amount of income or anything. It was just like, OK, this kind of to me it made sense, because if you have a holding company that's generating income and you can you have another company that's charging that company, that's reducing the income here, reducing the tax rate in the holding company, and that active income is being taxed because it's active income, not passive income at a lower rate. Yeah. So just kind of made sense to me.
George El Masri [00:30:56] Yeah, that's right. That's right. As long as there is enough cash flow I guess. Yeah.
Kaush Nanubhai [00:31:01] So like the holding companies like say 40. Yeah. And the passive company is 20. Right.
George El Masri [00:31:06] Roughly, yeah. But what I'm saying is as long as there's enough monthly cash flow in your, your properties because if you're going into the negatives I don't know if that. Yeah.
Kaush Nanubhai [00:31:15] Like I never buy properties that don't cash flow. I just. Yeah. It's just like a I have never done that so. Yeah.
George El Masri [00:31:22] Right. Factoring in the property management as part of your due diligence.
Kaush Nanubhai [00:31:26] Yeah. Like there has to be positive cash flow or you don't buy. Yeah. Like we don't buy even with a JV partner. Right. Yeah.
George El Masri [00:31:32] OK, cool. All right. So are there any other. Well first of all, we didn't even talk about the kinds of properties you're buying. Sure. So. So what is it like? Did you start always buying the same type of property or did your strategy change over time?
Kaush Nanubhai [00:31:47] It changed over time. So I mean, I've done I've done single families like as I mentioned, I had a condo back from back when I initially started working. I started with student rentals and then I moved into duplexes and, you know, after that, you know, moved into development, infill development.
George El Masri [00:32:08] Right. So let's talk about that. I do like that infill development project that you I've seen you speak at Durham area and you were talking about that. So you were you had this property, from what I remember, it was sitting on a big lot. So I believe you severed the lot and then you looked into a prefabricated home. So one that's pretty much built in a factory. And then the foundations poured and they bring in the house and piece it together on site, correct?
Kaush Nanubhai [00:32:34] Yeah, exactly. Yeah, pretty much described it.
George El Masri [00:32:36] Yeah. OK, so how did how did you even think about that. Like did somebody give you that idea or do you just
Kaush Nanubhai [00:32:42] come in at the end of the day I was in Quinton D'Souza, the Action Taker program and he actually did a modular build one year before I did. And I actually went out to see the building and I, you know, discussed kind of doing something similar, like he knew that I, you know, had had the land and I was going to build as well. And I introduced me to his contacts and so forth and kind of went from there. So so he was actually the first one who did that and. Yeah. So yeah. And I at the time I had a number of challenges with some trades and so forth, and I was thinking to myself, you know, if I could get this built offsite, you know, structurally it's actually a bit stronger than a stick build because it has to be hoisted on a crane and so forth. It's in a temperature controlled environment. It's it's fast. Like we we had the house up with it about 70 percent complete air tight within within the day, but within two days with the exterior installation.
George El Masri [00:33:51] Yeah. So you're saying after the foundation was poured and all of the after all that was done
Kaush Nanubhai [00:33:56] on delivery of the house
George El Masri [00:33:57] on delivery,
Kaush Nanubhai [00:33:58] like it was airtight within within the day, but like final touches by the day too.
George El Masri [00:34:04] Right. That's awesome. Right. So, so what are some of the advantages of doing it that way? I can imagine that one of them might be with timing, because while you're maybe getting approval from the city or like finalizing all of that, you could have the factory begin construction for sure.
Kaush Nanubhai [00:34:19] Yeah. While you're like you, the way I describe it is, you know, in a in a traditional build, you you work consecutively like you have to get the permit. Yeah. Go to the foundation, start building on the on the framing and so forth. Whereas in in a modular building process you can work concurrently. Right. You can have the house being built while you're pointing the foundation for example. Right. So that was you know, definitely timing is a benefit speed technique. Should be able to cut the, uh, the build time down in half at least.
George El Masri [00:34:55] And is it cheaper to to do it?
Kaush Nanubhai [00:34:57] That's about. The same, about the same, you know, I don't think it's come to matured to the point where, you know, the cost savings are strong, but I wanted to try it because I just wanted to do something different. And, you know, if you do something if I do something down the road on a larger scale, I was in my mind, I was thinking like in development, it's kind of like recruiting and recruiting. The way that you make the most money is by placing as many people as you can within the years, like real estate, selling as many houses as you can. Right. Same thing with development. Like if you're going to maximize your potential in development, you've got to build as quickly as you can within the year. Right. So being a process that should cut down the speed. Yeah, I wanted to try it.
George El Masri [00:35:41] Right. Yeah. It helps you create a system around it and a system that's efficient, as efficient as possible.
Kaush Nanubhai [00:35:47] Right. And you don't necessarily have to deal with all the trades. A lot of the inspections are done in the factory like there's a certification program. So like, for example, the the framing, the interior insulation and exterior insulation were all kind of passed in the factory. So. Yeah, cool. Yeah. Well, there's some advantages. I mean, there's some disadvantages.
George El Masri [00:36:10] Yeah. I was going to ask you, what are some of the districts.
Kaush Nanubhai [00:36:13] So there are some design limitations and a lot of the modular builders, like for example, with this purpose built duplex, they don't like tweaking their designs or they haven't thought of, OK, this guy like let's put our, you know, Venton this way so that it doesn't create too many penetrations through, you know, the two different like they weren't even thinking that I'd have, you know, a basement apartment unit. I mean, they wouldn't. So their designs are not you know, you have to I guess you have to spend more time. I guess if I if I could give one piece of advice, if someone is trying this, they want to build a spend a lot of time on the design phase and understand that you're not in part 11 of the code, which is kind of I believe is existing properties. You're in part nine, which is a lot more involved. So you have to do a lot more fire caulking. The natural light requirements are different if you put in dampers and in the vents and so forth. So it's just it's a lot more complicated. And if you could design the modular build with that in mind and and the the company that you're working with is open to that, then it would be a lot more beneficial for sure. Yeah.
George El Masri [00:37:29] Did you have a designer working or an architect working with you?
Kaush Nanubhai [00:37:32] Well, so we we had a preliminary design and we provided that to the builder and they have their own vision, the people that would put it together into because it has to be you know, you have to make sure that it works within the modules. Right. So how many modules you have and where the walls would be and so forth. So we had our preliminary we gave it to them. They came back with their plan based on what they could do with Modular. Luckily, it was a square. So it wasn't really, um, you know, a difficult. Yeah. Um, didn't have arches and, you know, things like that. Right. Yeah. My, my roof was um was actually something that I had to change. So because I didn't want it built on site, I wanted it built at the factory. So uh, just a quick so it was like a hip roof which kind of goes like this and then like this. Yeah. And so they can't do that in the factory. They can provide the materials when they do deliver the modules. Yeah. But I had to go back and kind of get it designed as a flat roof, which was something that was suggested so that the roof was kind of on top of the top modules. And then right before they lifted it, they hoist the the the they brought it together and then they connected it after. So cool. So you didn't have to have framer's on site kind of framing the roof. Right.
George El Masri [00:38:50] So yeah, it was all done.
Kaush Nanubhai [00:38:52] So these are I was able to catch some design things, but there's a lot more design things that could be implemented. Uh, sure. You know, but I realized, look, if you want to be in developed, you've got to do it right and you're going to make mistakes. And the first one's not going to be the most profitable one. But you've got to get in the game at the end of the day.
George El Masri [00:39:12] So did you decide that you just you want to focus more on Infeld's moving forward?
Kaush Nanubhai [00:39:17] You know what? I wanted to add that tool to my tool kit. Um, you know, if I find another property that's on a large like, yeah, I'm going to sever it. I'm going to maybe I'll build on it. Maybe I'll sell the lot. I wanted to add that to my tool kit. Right. I also want to buy a building. Right. I was talking to you earlier. Yeah. That's kind of my one of the things I want to add to my tool kit. I want to be able to see any real estate opportunity and be able to understand it and how I can optimize it. Right. Yeah.
George El Masri [00:39:43] So that's kind of Quentins idea. He'd always say that. What's the highest and best use? What can you do to this property, how can you add value is always talking
Kaush Nanubhai [00:39:50] about can be plan C plan.
George El Masri [00:39:51] Yeah, exactly. Another thing I was going to ask you about. So with these. With these prefab. Homes, do they come in pieces so like, let's say a home is split in four and it comes in four different chunks?
Kaush Nanubhai [00:40:04] Yes, exactly. So yeah, our house had basically four Lego blocks. It was an eight hundred square foot house, two on the bottom to go on top of that, the roof was on the two top ones. Yeah.
George El Masri [00:40:16] OK, so it do some of the limitations here potentially that be that there is going to be a wall in the middle of the house that can't be opened because you incorporate
Kaush Nanubhai [00:40:27] that into the design, right? Yeah. So wherever the walls are, you would kind of incorporate that into the design.
George El Masri [00:40:34] So do you have an opening between the walls, like say you have like the living room on the right side, in the kitchen, on the left side? Would there be an opening between them or is the wall?
Kaush Nanubhai [00:40:42] I have a staircase in the middle actually.
George El Masri [00:40:44] So you have a staircase. Yeah. Yeah. So how did that, how did they chunk that often for then.
Kaush Nanubhai [00:40:50] Yeah. So well basically the staircase, you know the top half of the staircase is part of the upper modules. OK. OK. And then the, the staircase itself is one unit that was in one of the modules. But it's not that they gave me two staircases you know.
George El Masri [00:41:07] So the staircase isn't like in the middle of the house, right in the middle between the left and the right side. It's kind of leaning towards either the right or the left side. Yeah.
Kaush Nanubhai [00:41:15] So like basically the one module goes like one module was kind of like this. Right. And then there are the two modules on the bottom right. There's staircases in the middle. Yeah. So like one module here, one module here. So I had a staircase going up like this. Then on top of that I had two other modules like my kind of wall was like a staircase wall.
George El Masri [00:41:37] Right.
Kaush Nanubhai [00:41:38] Like that. OK, that makes sense.
George El Masri [00:41:40] Yeah. So it was a good way to use that space
Kaush Nanubhai [00:41:43] limitation incorporated into the design.
George El Masri [00:41:45] Right, right. OK, that's great. Was there anything else you want to add on this whole infill stuff.
Kaush Nanubhai [00:41:52] No, I mean, you know, other applications definitely if you're you're looking at cottage property or you know where somewhere else where it's hard to get trades. I mean, that's where the common uses are. Yeah, I think it's more coming mainstream now. I know Manami has done some Submodular builds. I know other people are looking at Modula. Right. So but, you know, there's it's a good tool to have in your toolkit. I think the other application would be, you know, with with third units coming on line, you know, you could it's easier to, um, in a way, you know, bring bring one unit over a house and drop it on, you know, your foundation or your kind of base.
George El Masri [00:42:34] Are you talking about Courthouse's?
Kaush Nanubhai [00:42:36] Exactly. Yeah, yeah, yeah. That's what I figured out as well. I figure it's a that's another reason I wanted to kind of do it, too, is to kind of understand how that application would work.
George El Masri [00:42:46] Right. Do you know what cities are allowing these to. I know they're they're always changing the rules and whatever, you know, if like Hamilton Brantford,
Kaush Nanubhai [00:42:54] um, I know that
George El Masri [00:42:56] I'm talking about Courthouse's,
Kaush Nanubhai [00:42:57] by the way. Yeah. Kitchener and Weland are open to them. Cool. I know that more and more cities are reviewing the new kind of legislation that came down to see how to incorporate it. Right. So, yeah.
George El Masri [00:43:08] What kind of fees did you have to incur for this whole infill development thing that you went through? And Weland, was it? Well, you I wouldn't see Catherine. Sorry, St Catherine's. Yeah. Oh, well,
Kaush Nanubhai [00:43:18] you have to go through the the severance process. I actually had to go through the Severns process. So that's, you know, hiring consultant. Right. Consulting on design, you know, talking to the planners, going to the committee of adjustments meetings and so forth. So I mean, you know, that was probably, I don't know, upwards of thirty to forty thousand dollars, including the fees to actually sever. Right. Not just kind of the um and so forth. And then, you know, the design portion of of the build and the actual putting a deposit for the structure. Right. So, yeah. And you know, the surveyors, the, you know, getting the waterlines put in by the city, that was Tengiz. They just like
George El Masri [00:44:03] all the developer fees,
Kaush Nanubhai [00:44:04] there's all these, all these fees, especially when you after you actually get the severance, it's like conditional upon this fee, that fee, that right. Tree Development Fund fee and five percent of the appraised value of the land fee. Like it's yeah. There's there's tons of fees. It's everybody puts their hand out once you. Yeah. They see that you have something or so
George El Masri [00:44:27] were you able to get like construction financing of some sort to do this.
Kaush Nanubhai [00:44:31] So I, I had a private lender OK, so I had a private lender for probably half the cost, just a bit more than half the cost. And then I funded the other half myself. OK, fair enough. OK, I didn't want to go through all the paperwork, and I had someone who was interested in supporting the project that I knew very, very well and yeah, so
George El Masri [00:44:54] well, I mean, private. It probably works out because you're adding so much value. And I'm assuming you refinanced after
Kaush Nanubhai [00:45:00] I'm in the process. Right.
George El Masri [00:45:01] OK, cool. Cool. OK, so let's jump into the next section, which is the random five Yanofsky, five random questions. And you just tell me the first thing that comes to mind. What's the closest thing to magic that actually exists?
Kaush Nanubhai [00:45:15] I don't know. Hypnosis.
George El Masri [00:45:17] OK, that's a good answer. That's good. So what do you strongly suspect but have no proof of
Kaush Nanubhai [00:45:25] UFOs at all? All right. I don't know.
George El Masri [00:45:28] That's it's very, very good chance there is something else first thing that comes to mind. Yeah. What event would you like to know the whole and complete truth about? JFK assassination. Yeah, that would be that would be interesting because nobody really serious. Yeah, yeah. Nobody knows that guy. Did he die recently, like last year or two years ago or something. Yeah. Yeah, I don't know. I think he was in prison and then I don't know. That is an interesting thing to know. What's the oldest thing you own.
Kaush Nanubhai [00:46:04] I don't know, um. He used to have this hoodie that was like really torn up, but I loved it, it was so comfortable and then my wife threw it away. That was probably the oldest thing she didn't like. Yeah, I don't know why they do that. I don't know. Yeah.
George El Masri [00:46:19] Yeah. She's looking out for you and wants
Kaush Nanubhai [00:46:21] you to look
George El Masri [00:46:23] OK. And what's success, Principal? Do you live by good one.
Kaush Nanubhai [00:46:28] I think it's probably like it's it's only failure when you don't learn from it. Right. Or learn from your mistakes. Right. I think that's important. And don't be afraid to make them because that's how learning happens. Live each day that to your fullest and just be genuine I think is just be real. And that's kind of what I live by. All right.
George El Masri [00:46:51] Yeah, cool. And seems like you have a pretty optimistic outlook. You seem like a pretty positive person. So I think that that helps, too. Thanks. Yeah. All right. So do you want to tell people how they can reach you and what services you offer?
Kaush Nanubhai [00:47:06] So I don't really have a website or anything. I mean, I can provide my email in the show notes, but. Sure, basically, you know, I'm at the point where I, you know, to buy real estate, you need money, time and experience. Right. So I have the time and experience now. And I'm looking, you know, for for people who, you know, want to invest the money so that I'm looking for for job opportunities and or or opportunities to lend secured against real estate. If someone wants to lend money and they don't want to take the equity interest, that's fine, too. And if anyone's just interested in learning how to develop a portfolio, you know, I don't have a formal coaching program or anything at the time. But, you know, I'm happy to do something on a per hour basis. You know, if things you know, if that way, like if you find what I'm telling you useful, you continue. If not, you don't you don't have to pay like five thousand dollars or something like. Right. Right. So cool.
George El Masri [00:48:07] Yeah. That's great.
Kaush Nanubhai [00:48:08] Yeah. Like yeah.
George El Masri [00:48:10] I'll be sure to include your information in the show notes. This was great. Is there anything, any final messages or anything you want to leave our audience with.
Kaush Nanubhai [00:48:21] I think the one thing I would just say is for people who aren't sure about investing in real estate and, you know, are kind of hesitant or just just don't get focused on buying 10. Right. Just get that first one because that first one is going to help you buy your third one or fourth one. Right. And the last thing I'd say is a lot of people are saying, oh, no, no, I you know, about home equity. People are hesitant about using their home equity. And that's kind of how I grew my whole portfolio. And I would say to them is, look, the home equity in your house, it's already invested in real estate. It's just not doing anything for you. Yeah. So why not take it from real estate, put it in real estate, same asset class. You're not putting it in risky stocks and let it do something for you.
George El Masri [00:49:09] What's the point of having a home equity line of credit if you're not planning on using it?
Kaush Nanubhai [00:49:14] Well, people don't even have the home I like. I help I help people. I go advise them to go put that in place right away when I start working with them and they're like, oh, OK. I didn't know they could do this, you know? So it's like, you know, I'm just understanding leverage is is important. Yeah.
George El Masri [00:49:32] And it's understandable that people don't want to put their personal homes on the line. Sure. It's understandable. It's not for everyone. But if you are willing to, I think they're like you've experienced it. You can you can grow quite a bit using what's available. It's like,
Kaush Nanubhai [00:49:46] yeah, at the end of the day, if you're buying, you're not really in my mind. You're not really putting your home on the line, right? Yeah. Like you're you're using the equity to buy another home that's cash flowing in. You're writing off the interest against that. Yeah, right. Like you're not really it's really a paper shuffle that allows you to maximize your wealth, right? Yeah.
George El Masri [00:50:07] So I think it's it's kind of that old idea that you should just pay off your home.
Kaush Nanubhai [00:50:12] Yeah. 100 percent.
George El Masri [00:50:13] Yeah. Save your money.
Kaush Nanubhai [00:50:14] I need help with that. So it took me a lot because I was raised very conservatively. As you know, my parents were first generation immigrants to Canada and, you know, saving and and conserving and not spending and overspending. That was, you know, in my mind a lot. And I had to really break that shell. Yeah. Even when I was switching jobs from something that was like salary to fully commissioned or
George El Masri [00:50:42] I bet the first year of operation.
Kaush Nanubhai [00:50:43] Yeah. Like, you know, how are you doing this lately? So, you know, you have to get uncomfortable sometimes to to to grow. Right. And so strategically, I've tried to do that, but I'm still still conservative. I try my best to make strategic uncomfortable decisions.
George El Masri [00:51:00] Yeah. Yeah. So sure sounds good. Yeah. OK, great. Well I appreciate you taking the time to share your story. Thanks for. Any time, and I'm sure a lot of people are going to get some good value out of it. I hope so, yeah. And I look forward to chatting again soon.
Kaush Nanubhai [00:51:13] OK, thanks.
George El Masri [00:51:14] Thanks once again for listening to another episode of the Well Off podcast. Just want to remind you that if you do appreciate the content, all I ask is that you comment. Maybe like it if you can, on the platform that you're listening to it on and finally share it with friends and family. I'd love to get the message out there and it would mean a lot if you can share it.
Speaker 2 [00:51:33] And finally, I just wanted to offer you as a valued listener, a free copy to the roadmap to
George El Masri [00:51:39] real estate investing, which is a document that I've put together which helps you identify what strategy would best suit your needs at this current time. You go over certain things that are included in this document step by step, and it'll hopefully provide you with some clarity.
Speaker 2 [00:51:54] So have a look. You can go to w w w well off Dasia
George El Masri [00:51:58] Forward Slash Guide to download your free copy.