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Erwin Szeto [00:00:08] Hello, my fellow Wealth Hackers. This is Erwin Szeto. Bringing you the truth about real estate investing show where we interview action takers and experts so we together may learn their best practices. So we, as hardworking Canadians, may apply them to our own investments, businesses and lives, personal lives. This episode is brought to you by me and Cherry. We don’t have sponsors for this show. No one’s going to pay us to speak to your listeners. I will share with you all the services that are offered by my charity and my wife, my wife and myself cheering my way for the same person. For example, Stockbroker Academy is where every day real estate investors learn the best practices in stock investing to earn cash. Flow. In about 15 to 30 minutes per day from all from their mobile phones. After real estate stock hacking is a next best side hustle. There is. And you’ve heard that from many of the past guests of the show. And when the trays are shared with their students, last year, 31 trades were shared with them, 30 were profitable. So that’s an over 36% success ratio translating into a return on capital of over 2%. I would be giving free demonstrations online, very similar to the one I gave to my cousin. He’s a full time musician and he made sure I’m pretty good at this, but he made over 50% return in 2021. And. 2020. Past results, of course, do not predict the future, but if you would like a free demonstration, go to WW dot stock hacker academy dossier in the top rate. There’s a button there for you. Click free demo as register for that at the demonstration. All have some special bonuses that we do not advertise to the public that are only available to you. My favorite listeners, of course, are my clients and I only have one more demo to give before we begin the next course at the end of February. So totally delay WW DOT Stock Hacker Academy dossier for what I consider the future of side hustles. With real estate being so unaffordable for many with all sorts of real estate investors or investors in general who are seeking cash flow, the market, the stock market that is that real estate stock market, it’s in correction territory right now. So if you’re looking to buy low, sell high, the timing can be better to be getting educated in the private lending space. I’m hearing a lot of challenges out there. My own clients here in Ontario, there’s a company out in central Canada. I don’t have details, so I’m not going to name names. But there’s a company in the central Canada that’s been ordered to cease trading because he’s operating their business by the local securities regulator. Out of curiosity, I went and checked their Instagram. And. I could see how their posts would raise red flags for securities regulators as they were telling folks there. They’re in their comments, probably in the videos as well. They’re telling folks if you’re interested in investing in their projects to contact them, then, yes, like I said, they’ll raise flags with security regulators and they seem to be looking at real estate investors more and more. This isn’t the first real estate investor company that I’ve heard that has a securities regulator after them. This is very sad to see. I don’t wish their will anyone. I hate the idea that people are losing money in real estate, which is why it’s always been my belief that you should do your investing in your own name or a corporation that you own and control, as that is what I feel is the best investment. I’m not opposed to investing in passive investments managed by someone else. Just for me personally. If I do something passively, I don’t invest nearly what I do when I’m buying a property in my own name or in my corporation’s name. I only currently invest in two passive private equities using registered funds. As my research tells me, my experience. My research has told me that these are the two best that I’ve seen and I’m always open to looking at other offerings. But at this time, these are the two best that I’ve seen personally. They most are registered with local securities commissions, so I can’t talk about them, but I’m happy to refer you to them. You just have to ask me and then you can reach us at I went at Infinity Wealth that’s here and I’ll be happy to connect you with these private equities that I invest in that are in real estate. One of the private equities is a young apartment building trust, and the other is a large scale real estate developer. And again, that’s two different two different companies. And again, those are the only two passive real estate investments they do. So that’s available. That can be maybe a good idea for someone who doesn’t have enough for a down payment. So that’s one option. And then for those seeking cash flow, my favorite is to stock on the personal side, cherry and the kids and I are enjoying the outdoors because you can’t do many things indoors these days. All changes. This podcast comes on a monday, so I’ll be the first day that the lockdown is over, and I’m not to go back to a restaurant for now. We’re skiing, we ski Mansfield Ski Club and it was pretty awesome. It’s the first time I’ve ever been there. The lamps are tiny because Mansfield is a private ski club, able to go there as guests. We’re going there again Saturday. Again, the lineups are tiny being, but it’s a private club versus a public club. My friends were telling me that they were skiing the same day and experiencing like 30 minute lineups to get on the chairlift for us. After lunch, we were able to ski down the hill, which included the most challenging side of the mountain, which were black diamonds. And then we. Get to the bottom of the hill and then write to the chair lifting without having to line up right to the line and make your way to the chairlift and picked up and get back on the hill. That’s crazy. Is my kids, they’re six and eight years old and they’re able to keep. Up. Even while doing. They don’t turn that well. But they have. But they can still plow great and they still plow down Black Diamond Hills with me. They have no fear. They’ll just follow whatever and they’ll go whatever is in front of them. And yeah, they’ve gotten a black diamond. I’ve been saying to them as well that largely I feel a lot of these hill ratings are just in their head. As long as you know how to turn and stop, it doesn’t really matter how difficult the Hill is because you can always just turn and stop that. My kids have no fear. They just bombed on the hill. We have put them through a bunch of lessons. I can’t stress enough education and learning and building skills. So my kids, this is the third year that they’ve been skiing. They’ve been through a bunch of lessons. They went through ski camp over the holidays. It’s past holidays and we’ll invest in them the same in their investing in entrepreneurship education. I actually had a guest on Today interviewed someone today. He’s incredibly successful in the technology world, incredibly successful. I can’t wait for you guys to listen to that episode. Probably drop in about four weeks after this one. But yeah, I’ve already thought about how I’m going to teach the kids. I’m not gonna teach them personally, but they’ll be getting education around computer programing, so I’ll be looking into that soon enough. Hopefully they’ll be able to tack all those different areas investing, entrepreneurship, computer programing. Hopefully they’ll be able to take those areas without fear as well. The lessons, the skill lessons are really paying off. So for me, selfishly, I can enjoy skiing a lot more because I don’t have to wait around and I want to go slow. I want to go down green hills all the time. I can go as fast as I want and the chips can keep up or I’m still chasing them down. On Sunday we hit a figure eight surface. I surface. I don’t know what to call it. It’s not a rink, some ice rink, but it’s an ice skating surface in the shape of a figure eight at Humber College. In a typical for anyone who’s looking for something fun to do outdoors, highly recommend it if you like to skate or you want to see the family and the kids. It was busy, but the conditions are really good and train. I have done a lot of outdoor ice pads with the kids, like public ones that are run by the community centers. I find those are a bit too crowded and chaotic. But our kids did okay. They did fall a lot. But I he’s I’m a apologies but I use the same from the Batman Begins movie, which is the first good Batman movie like ever, the one with Christian Bale. Or. Batman’s dad. So what’s his name and those last things? Lessons, main, whatever. So Batman’s dad says, Why do we fall? He says this to Batman when he’s a kid. Why do we fall? So we can learn to pick ourselves back up. I say that to my kids all the time whenever they fall down. Yes. Yes. And again, I’m not a creative person. So apologies for the bad jokes and the geekiness. And it’s no different with my investing. Everything I do is quite systematic and mostly disciplined and hopefully me owning some Tesla shares will work in smaller or small amount. Otherwise, I prefer discipline. I’m a geek. So this is. Dumb. But I’ve shared. Anyways, I’ve even repeated this is how much of a geek I am. I repeated the Marlon Brando speech in Superman. So like the 1978 Superman movie with Christopher Reeve as a player who played Superman’s old movie. So Marlon Brando plays general journalist, the father to tell a Superman. So I’ve repeated that same speech around kids. I won’t repeat it here because it’s way too geeky. I’ll let you Google that one. And also because I’ve rambled on enough, but I’ll include the note in the show notes. And the show notes also get put out in the email blast when these new podcast episodes are available. You can register for that if you give me your email, email address and any my websites, and then you’ll be getting alerts, email alerts when this podcast is available, you don’t want to miss. The next couple of ones are all excellent, in my opinion. So onto this week’s guests, we have Scott Dillingham. He is formerly the number two mortgage broker in all of Canada at that one big bank. So that big bank is one that you know. And. Is on every third street corner that you go by. So, you know, the bank. But for legality reasons, we’re not going to share the name of it. So again, Scott was number two in the entire country in terms of how many mortgages he did as a mortgage professional, Scott shares how even though he was successful at the bank, he wasn’t really happy there. He shares how things changed while he was at the bank and also the negative affect to his health leading to his exit from the bank to start Lend City Mortgages, which is an independent mortgage brokerage with investor friendly relationships, including for corporations and even for commercial lending on single family homes. Scott has grown his business pretty quickly. They have almost 30 staff, including a commercial lending department. So folks looking for commercial lending? You can talk to Scott. He also has a sizable real estate portfolio himself, so he knows firsthand what we investors go through. He’s a good guy. Scott is. One of the top donors for charity, nice charity, the Hammer Compassion Brigade. Scott shares his predictions for being a mortgage expert. Scott shares his predictions for interest rates for 2022, what his recommendation is for fixed or available rate mortgages. And also he shares about his investing. He invest heavily in Windsor. He also shares where he’s looking in the United States. And it’s a city I’d never heard of, and the prices are pretty amazing. So Alison, this show, if you want to follow Scott, probably the easiest way to get in contact with them is their website. Lend City Dossier. Lend doesn’t like to borrow lend lalonde city dossier. Please enjoy the show. Let’s go. Let’s keep you busy these days.
Scott Dillingham [00:10:43] Thanks for having me, by the way, Erwin. I really appreciate it. But yeah, no, everything’s keeping me busy. When you run a company, it’s. It’s a lot of work, but I love it. And we’re having a lot of fun doing it.
Erwin Szeto [00:10:53] Because you didn’t always run a company or you were. You used to be part of a very big one.
Scott Dillingham [00:10:58] Yes. Yes. So I used to work doing mortgages for investors at the bank. So the bank was cool. They had some really cool programs. I remember when I first started at the bank, you could do unlimited properties.
Erwin Szeto [00:11:11] And what year was that.
Scott Dillingham [00:11:11] Yeah…
Erwin Szeto [00:11:13] Where’s my time machine.
Scott Dillingham [00:11:14] It was awesome. So and this is all with one lender, which is crazy because usually every lender has their limits, right? So we could do unlimited. And then they went down to ten, which I still thought was good, but they introduced like a liquid funds requirement. So an investor had to have 100,000 of assets outside of the down payments to move forward. But it was still good because most banks and lenders, you know, they weren’t doing ten properties and then they went down to five, so they went down to five. It was.
Erwin Szeto [00:11:44] Really.
Scott Dillingham [00:11:44] Really hard for me to continue doing what I was doing right, because I was working with investors that had multiple properties and I hated making those relationships with people. And then you have to shake their hand, say goodbye, because you can’t you can’t grow with them anymore.
Erwin Szeto [00:11:59] You’re stuck by the work that you did. And investors, too, with the plans of unlimited, maybe limited, but they had probably plans to try to get the ten properties or more and then.
Scott Dillingham [00:12:10] Yeah. And then they changed it. Right. So then that hurt what I was doing and I just found that for an investor it wasn’t good, right? How can I sit down with an investor and plan with them when the rules keep changing? Right. So it was it was tricky. So then I started One City, so that’s kind of my transition. There’s a period in between there that I’m sure we’ll discuss on the on the show, but that’s sort of what led me to do what I’m doing now. I wanted more options for clients. I wanted to be more fun. If you check out our office or even go to like Google and check the images from one city, it’s a really cool place. It’s high tech looking. It kind of looks like a Google or an Apple office.
Erwin Szeto [00:12:49] Or you did an office tour. You did a Google Office tour.
Scott Dillingham [00:12:52] Well, we took a whole bunch of pictures and put them on Google. Yeah.
Erwin Szeto [00:12:55] Oh, okay. So it’s not like the virtual tour of your office.
Scott Dillingham [00:12:58] No, but that’s coming. We have a videographer like full time employee who are videographer, so that will be there. But yeah, so we just wanted to make it a really, really cool place and that’s what’s keeping me busy right now. I’m at home, right, because we’re under lockdown, so we’re trying to the government says stay home if you can stay home. So I’ve got all the stuff here to work here. So it’s chilling out.
Erwin Szeto [00:13:19] But you started the new business before the pandemic, did you not? It just before you bought the building, started a new business after the job that was. You were doing very well, were you not.
Scott Dillingham [00:13:32] Yeah, I was number two in the country, like for my last full year there I was number two in the country.
Erwin Szeto [00:13:38] T shirt with the title was a mortgage advisor.
Scott Dillingham [00:13:41] Was a mortgage advisor. Yeah. Okay.
Erwin Szeto [00:13:43] Number two mortgage advisor in the whole country.
Scott Dillingham [00:13:45] For this lender. Yeah.
Erwin Szeto [00:13:47] Yeah. But for this lender it is what top five biggest lender in Canada.
Scott Dillingham [00:13:54] Yeah, absolutely. They were a huge lender.
Erwin Szeto [00:13:57] The listeners benefit. We’re not saying the name for it just for to be safe. But you all know this place.
Scott Dillingham [00:14:03] Yeah, it was it was a big lender. They had 1200 employees at the time. So finished. Number two, you know, I felt like I accomplished number one. That was my goal. And I know I didn’t get number one, but I still felt like it because the guy that actually beat me, they rated you at that at the time based on your total volume. And he lived in Vancouver. So I live in Windsor where housing is some of the cheapest in the Canada not maybe now but at the time. And he lives in one of the costliest places to buy. So I still felt like I beat him because if he was in Windsor, I would have beaten so right. I felt good for a cool man.
Erwin Szeto [00:14:39] So yeah. You bought a building to, with the intention of putting your office in it, doing a whole bunch of this stuff and then the pandemic.
Scott Dillingham [00:14:46] Yeah, yeah, yeah. So before. Before I did that, it was like I was at one of those moments in life where you’re like looking at everything and you’re like, What should I do with my life? And I actually thought that I hated doing mortgages.
Erwin Szeto [00:15:01] Okay. Can you expand on that as well? Because your what you’re. Lifestyle was like and your health and stuff.
Scott Dillingham [00:15:05] Yeah, yeah, yeah. So I was really stressed out and I was becoming overweight, right? Because I was always sitting down with what I did. So I was becoming overweight. I didn’t feel good and it made me always tired as well. So, you know, I always had so many things to do, but I just lacked the energy. So I was like taking catnaps for the day and, you know, nothing would seem to help. I was actually drinking coffee nonstop all day, and it wasn’t even helping me.
Erwin Szeto [00:15:35] How many coffees do you think you were drinking a day?
Scott Dillingham [00:15:37] Probably. Probably like 6 to 8. And then strong stuff, too. Like it was it was not the wheat coffee either. So I was going down that path and then I one day I was like, I need a change. I’ve got to change my life around. I don’t want to be overweight like how I look or feel tired. And I, you know, I want to be more accountable to my clients and just be better. So I was actually going to quit mortgages altogether and just do marketing for realtors because I, I have a background in marketing and I’m, I’m really good at it, right? So I can do legion like all kinds of really cool stuff. So I started telling a lot of people that I was quitting mortgages and doing legion. And even to this day, because we’ve been so occupied with growing the brand, I still haven’t even told everybody that I told I was leaving mortgages, that I’m doing mortgages. But during that transition process, I discovered that it wasn’t mortgages that I didn’t like. It was being at the bank because the bank had their own rules at the time. They would only let me have two assistants. Right. So even though you’re growing their thing up to the max, you can’t get more squat.
Erwin Szeto [00:16:47] When I met you, you had zero.
Scott Dillingham [00:16:49] Yeah. Yeah. So. And the thing that’s crazy too, is I was the first one to have to like having one was the, the normal. But having to, they’re like, oh, we don’t know how to do this. We don’t know how to set it up in our system. And I’m like, Well, I need it, right? So, so I quickly discovered that it was the bank because their systems and how they would allow me to grow. But beyond that, I also knew that it was my lifestyle habits as well combined. Right. Sitting down all day for anybody isn’t good, right? Just like eating junk food every day. It’s not good. You have to create a healthy lifestyle and it’s really made me a happier person being healthier and it’s made me more productive at work. I’m closer to my family now. But yeah, so I started working out, started running. I have like Men’s Health, they have an online subscription and it’s got all these personal trainer courses and you can do the, the workouts at home. You know, behind me in my office, you know, I’ve got a Bowflex. So I just kept working out and doing all those things. I’m not at my fitness goals yet, but I’m really, really close. But that just it completely turned my life around, realizing that I had to create a better system for the work that I was doing and for my health as well.
Erwin Szeto [00:18:09] Can you share like how you think so? Most people who listen to this are busy people.
Scott Dillingham [00:18:14] Yeah.
Erwin Szeto [00:18:14] Can you share how you fit in like the fitness part? Can you share a bit about your routine then that gives you some more balance.
Scott Dillingham [00:18:21] Yeah, you just have to do it. I think that’s the number one thing, right? I was listening to Stephan Iranian. I was watching one of his courses from the past and he said this and it’s true, and I’ve heard it many, many places, but people have time for TV. They have time for their phones, their video games, you know what I mean? You have time. You’re just setting the wrong priorities. So really, you just have to scale back something. And I find I actually have more time to do these things because when I work out and exercise, my body and brain function at a much higher level so I can actually get more done by going for a quick run, even though it might take 45 minutes an hour, I can get more done losing that time because I’m so much more effective when I’m back in my chair, you know, getting to work. But my routine, what I try to do, actually, I found this works really, really good. Everybody’s different. But for me, I was doing a lot of running and different workouts. I found for me the key to really get my metabolism up and to feel that burn like all day long is I, I roll for about 10 minutes, but instead of using that bar that you pull when you roll, I use like dumbbells and I curl them in steps. It’s a little bit different, but it gives me much stronger arms and it just it burns my legs. So I get a much better workout than, like, rowing.
Erwin Szeto [00:19:45] Sorry. Are you in a rowing machine?
Scott Dillingham [00:19:47] I use. Well, I use the Bowflex, but it’s just like a leg. PRESS So you’re doing a leg press but curling at the same time. And so I’ll do that for 10 minutes in the morning and it doesn’t sound like much, but your whole body burns and it’s a constant 10 minutes, right? So.
Erwin Szeto [00:20:03] You know, that’s hard work.
Scott Dillingham [00:20:05] Yeah, but I do later weights for the curls. Right. I don’t go with £30. Right. Because that would kill me. Right.
Erwin Szeto [00:20:11] 10 minutes.
Scott Dillingham [00:20:12] Yeah. But it gives me that burn all day long. And then at night I’ll go for runs here and there on the weekends I’ll do that complete weightlifting and all that stuff. But I find the mix of doing those different things is really what’s propelled me into a healthier, more fit.
Erwin Szeto [00:20:31] Awesome. Awesome. So I just ordered a walking treadmill with a stand up desk behind me.
Scott Dillingham [00:20:37] Nice.
Erwin Szeto [00:20:37] So I actually do. I’ll do calls and stuff like that. Phone calls or Zoom calls. I’ll do it while walking.
Scott Dillingham [00:20:43] Yeah, my sister does that. She’s one of my employees. And at our office, she’s got a walking treadmill there. And she knows she’s on it. She’s walking in. When she’s not on that, she’s on one of those chairs that kind of rock back and forth for you. Mhm. She sits on those as well and so no it’s awesome but I did find the work out of the leg press and the curling at the same time that burns me so good like that is it. Mhm. That’s the secret sauce for me.
Erwin Szeto [00:21:13] The other thing I do is if I want to watch TV then I, I try to make a commitment that I’m active during it. So my peloton is in front of the TV. So if I watch a Leaf game or Raptors game, then I’m on the bike.
Scott Dillingham [00:21:24] Yeah, right.
Erwin Szeto [00:21:24] That’s why I’m stretching afterwards. So then people say I don’t have time. Well, you’re if you’re just sitting there watching the game like you don’t have to just sit there, do curls. I don’t know. Do like lifts yourself lit ups.
Scott Dillingham [00:21:38] Yeah, exactly. And people like the men’s health membership thing and I’m not trying to promote it here, but it’s like ten bucks a month, you know what I mean? It’s got all these trainers and most of the workouts are meant for at home. So it’s all like with your body weight. So people think like, Oh, I need a gym membership and whatever, but you can literally do it ten bucks a month and you can do your whole body just using your body, your couch. Right, using your couch. Some of the workouts are on your couch. It’s so easy. But I think anybody I think that would be a lesson that I would teach is that anybody should get your fitness in check if you want to be successful at anything, even if it’s dating, right? If you’re single and you want to meet someone, be a little more fit if you want to propel yourself at work. I know sometimes it might be hard to see how one could benefit the other, but it’s huge. How much being fit and mentally strong, how that helps you to succeed in life.
Erwin Szeto [00:22:32] I think more than ever, because we’re in a pandemic and as we end the pandemic this year, I think it’s going to be a huge story that we have to take care of our physical health and in turn taking care of physical health like we take care of you help a lot with the mental for sure.
Scott Dillingham [00:22:45] For sure. And it’s harder to eat healthier now, too, right? If you look at the food our parents had back in the day, it was all natural from the ground, you know what I mean? It was all good food, but now it’s so much is processed, so it’s hard. Like even when you want to go out like so you want to go for lunch, it’s hard to find somewhere near you where it’s healthy. So I think that’s a challenge to.
Erwin Szeto [00:23:06] Myself, the whole exercise, because I have a nanny at home, so.
Scott Dillingham [00:23:09] Perfect.
Erwin Szeto [00:23:09] When we control what’s in our fridge and you control a lot of what goes in your stomach and on your plate.
Scott Dillingham [00:23:14] Absolutely.
Erwin Szeto [00:23:16] So how is business again? You started it before the pandemic, which is the time to perfectly.
Scott Dillingham [00:23:22] It’s going incredible. We have 20 employees now.
Erwin Szeto [00:23:25] Oh, so you’re from just you did 20.
Scott Dillingham [00:23:28] Yeah.
Erwin Szeto [00:23:29] And how long then? Like the three.
Scott Dillingham [00:23:31] Years. Yeah. Yeah. But in the beginning though, it wasn’t so in the beginning my two assistants at the bank came with me to one setting. So that was a huge help, you know, getting things going and the learning curve, there was a big learning curve, right, going from the bank to broker. So that took time. We partnered with a brokerage out of GTA actually just for our mentorship and they take care of our compliance. But that helped to sort of fast track me and the broker world because every lender has their own criteria and things that they look for. So somebody’s just getting into it. It’s, it’s overwhelming. So it was great to have that mentorship. But yeah, so in the beginning, Lynn City was just a place for people to service my clients in my business because I brought a lot of it with me, right? And the building I bought it has all these tiny offices in it. And so my vision at the time was like a rework scenario. So I actually had the whole place rented and actually I love commercial because when I signed one lease, just one tenant, I had it appraised after because I ended up buying the property without a mortgage. Like I just used my own funds to buy the property. And then I was thinking, well, you know, maybe I will get a mortgage and I’ll just use the money and invest in different things. So I got it appraised after. So I just signed one tenants and the building went up 110,000 just like that. So I love commercial real estate for that aspect, right? Because the value is totally geared towards the income. And I had it all rented, right? And then COVID and then lockdowns and then people aren’t coming in, right? So but then over time, my mindset about my business changed and I was like, Well, let’s do a team. Like, why can’t we be the number one mortgage brokerage in Canada, even online? Like, let’s, let’s do this. So then I started to grow the team. It’s quite a different process. It’s not it’s not 20 agents like you would think or mortgage brokers, I would say half is, but the other half is all administrative staff. And I designed it like that on purpose because I want to operate as quickly as possible. So when we work with a client, they have a dedicated a sales rep that they speak to and they have a dedicated administrator who works with them as well. So it’s that one stop. You know exactly who the client needs to talk to and the clients like that, too, because they’re not being pushed around all these different people. They know exactly who they need to reach out to. But because of that, the process is so much faster. Clients love it. It’s so quick and easy and we’ve set it up that way. So we actually have more admin staff than sales reps. But again, we do that on purpose. So we’re fast that that’s what we want to be. And I came up with the design from working with investors because investors write someone with ten properties. It’s a lot of paperwork to process, a lot of things to factor in. So we got really fast with that. So now when we work with regular homeowners, it’s just it’s nearly instant because it’s so easy, right?
Erwin Szeto [00:26:32] If they don’t have a whole ton of mortgages and corporations.
Scott Dillingham [00:26:35] Yeah, yeah. We have lenders that will send their preapprovals to that like fully underwrite upfront and we have about a four hour turnaround time from them. So we’re getting written approvals from lenders right away. Yeah. So it’s so quick and easy.
Erwin Szeto [00:26:46] Can you talk to us? Give us some detail maybe around the difference between while at the bank versus being a broker?
Scott Dillingham [00:26:53] Yeah. So at the bank, you’re obviously very restricted. The only things that I learn at the bank and this is actually a blessing down the road, right? You live life and you don’t realize what’s going to be a blessing, but then you learn from your experiences. And then later on in life you’re like, Wow, that taught me about this. So I have a great aha moment to share. So at the bank we did residential mortgages, but I was very familiar with commercial mortgages as well because they do them at the bank. So those are the only products that they offer where a mortgage broker will have like be lending and private lending. So with the bank though, the process was very tough because when it’s such a huge organization, they don’t move as quickly and see for an example, they have a backlog. They’re my only lender to work with because that’s my employer. So you have to wait through that backlog. Now, mind you, being number two, I was able to pull some strings and get some deals approved quicker and stuff. But that was a headache in itself because and I’m waiting, I’m trying to call senior management and they’re not available. And then it just it was a nightmare we’re.
Erwin Szeto [00:27:54] In during the housing boom too. So yeah, it busy.
Scott Dillingham [00:27:58] We’re now like, if I know a lender’s busy then I’m not going to use that lender right now. I’m going to use a different lender who will do the application. Right? So we know all the timelines, we know who’s going to do what type of applications. And so I find that a lot better too. And then the bank, it’s like a bucket, right where I consider the mortgage broker space like a playground. So if somebody brings a bucket to the playground, right, whatever fits in that bucket is what that bank can do, where the playground is the whole mortgage brokerage, right? Because there’s all these different lenders and all these different rules. So I do find that you can really get stuff done and you got to know your lenders. And we actually got really lucky. I don’t want to say the lender on here, but there’s a few lenders that are not in the broker channel or I can’t say they’re not in the broker channel, but they’re not actively working with no brokers. They were in at one point. They were accepting brokers, but they’re not now right. And we have them. They approached us and because of our volume and stuff over the years like so and they’re very rental friendly lenders. So it gives us a really nice advantage. So I do like that because somebody coming into the game now, they couldn’t get signed up with that, right.
Erwin Szeto [00:29:09] So just to clarify for listeners benefit, not all lenders will work with independent mortgage brokers. Just as for everyone knows like a like for example, Bank of Montreal is well known for not working with the broker channel. As far as I know, things may change, things change all the time, which is the challenges of mortgages. I’m sure any investor listening knows what I’m talking about. Things always change.
Scott Dillingham [00:29:30] Yes, yes. And then not only that, the ones that are open are working with brokers. You have to qualify for that. If you’re not doing so much volume without them, they won’t work with you. Right?
Erwin Szeto [00:29:41] So that’s us. Our business is done, right?
Scott Dillingham [00:29:44] Yeah.
Erwin Szeto [00:29:45] I manage multiple relationships. If not all of them are going to do business.
Scott Dillingham [00:29:48] Exactly. So. So here’s my aha moment. So right at the bank, we do residential mortgages and commercial mortgages. So when I go to the mortgage broker side of things, the mortgage brokers generally will go from an A lender to. A blender. And I’m referring to investors, right? If someone has bad credit, you got to go to a blender regardless. But we’re different. So we actually have a dedicated commercial department. We’ve got three full timers in there right now. We are growing and hiring more people for the commercial department, but we actually go from a lending to commercial and then if it doesn’t work there, we’ll consider be lending as well depending on but the benefits to the customer. If you compare commercial to be lending, they both have lender fees approximately the same between 1 to 1 and a half percent depending on the size of the mortgage. So that part is the same, but the rate on the blender is higher. Usually it’s in the threes, could be in the floors for a be lender where on the commercial side rates are almost the same as residential. So for a fixed they start, you know, mid two, so we’ll go commercial instead. Now the beauty about commercial is it doesn’t have to be like an apartment building like a lot of people think when you get commercial apartment building.
Erwin Szeto [00:31:03] Or office or retail or bacterial. Yeah.
Scott Dillingham [00:31:06] But you can do a commercial mortgage on a single family property. But what happens is the underwriting guidelines change. So instead of it being about debt to income ratios, which that’s what the and the B lenders are still based on debt to income ratios, it’s now based on the income of the property. So based on that rate, the borrower, it doesn’t really matter their income as long as they’ve got the assets behind them and they’ve got experience with rental properties. If the properties cashflow, the lenders will move forward. But every product has its own niche, right? So commercial, if it’s one of those properties you want to buy, you’re going to lose a couple hundred bucks a month. But you know, there’s a good appreciation upside, which I don’t like those personally, like I like to buy for cash flow. But you do see some investors that try to buy for appreciation. So those investors, it’s not really good for commercial because they’re going to scale back the lending because you’re losing money, right? So they’re going to scale it back to what it does cash flow so that, you know, would probably be better on the B side. However, if it’s if it’s a nice property, it’s got good cash flow, then commercial is going to be a way better option than B lending. And most brokers don’t have access to that or don’t know that because they don’t do commercial. There’s very few that do, so that really sets us apart. We’re getting a lot of different things because of that, so it’s really, really cool.
Erwin Szeto [00:32:18] This is also applied for properties own in a corporation.
Scott Dillingham [00:32:21] Yeah, yeah. They’ll do when.
Erwin Szeto [00:32:23] There’s any difference. They care, prefer no difference.
Scott Dillingham [00:32:27] Grow no difference. And they’ll also welcome student properties. Now it is reduced LTV. They do it at 65% LTV on student, but they’ll do Airbnbs on the commercial space and you don’t have to hide it. Right? I know some people try to hide or they’ll combine all their tenants on one lease or whatever just to try and make it work on residential.
Erwin Szeto [00:32:47] No idea what you’re talking about.
Scott Dillingham [00:32:48] Yeah, I mean. Heather, I just heard that people try to do that. So you don’t. Have to do any of that. You can just tell the lender it’s a student rental, this is what’s going on and they move forward.
Erwin Szeto [00:33:02] That’s awesome. Yeah, sure. People.
Scott Dillingham [00:33:04] So yeah.
Erwin Szeto [00:33:05] And the natural question for people will be asking like, where can I learn more for sure?
Scott Dillingham [00:33:10] So I don’t I don’t do the commercial stuff myself. I focus on sort of running one city and the residential side, but we have a commercial manager. I can introduce anybody to him if people are interested in commercial and Stephen chat about it. But it’s a big part of what we do. And because we’re still, even though I’ve left the bank, we’re still very much investor first. We do a lot of stuff with homeowners. We’ve partnered with Cera Care Remax, which is one of Canada’s largest Remax teams and where we’re part of their in-house mortgage office. Right. And so they do owner occupied stuff, a little bit of investing, but the way our systems are, it allows us and people notice that’s why we’re part of this. These other brokerages is we’re able to process the application super quick. I know I said that earlier, but what I’m trying to say is, is not to promote that we’re in different places, but that what we’re doing is so good that we’re being noticed, that we’re being invited to go to these places and to service their customers.
Erwin Szeto [00:34:16] So fantastic when these commercial mortgages, commercial mortgages, 25 year amortization, 30.
Scott Dillingham [00:34:23] Rate question, normally it’s 25. Okay, but with commercial, you can insure with CMHC. Are you familiar with that?
Erwin Szeto [00:34:31] I don’t think I’ve done one of these personally.
Scott Dillingham [00:34:35] So if it’s six units or more, you can go with CMHC for financing and they go usually it’s between 35 to 40 years they’ve just announced. So we haven’t seen one of these applications because there’s a lot of fine print around it. But they’ve just announced that they’re going to go up to a 50 year amortization with as low as 5% down on apartment buildings. If it’s a green apartment building or you’re. Gearing it at least 30% of it to low income housing.
Erwin Szeto [00:35:06] All easy stuff. Good.
Scott Dillingham [00:35:08] Yeah. I don’t know how many people are going to do those. But. But CMHC normally, like if it’s a solid, like apartment building, so six or more units when CMHC comes in, it starts at 15% down with up to, like I said, 35 to 40 or more.
Erwin Szeto [00:35:26] Like a duplex.
Scott Dillingham [00:35:28] Or duplex. They won’t do a duplex. So duplex commercial, you’re looking at 25.
Erwin Szeto [00:35:32] 25 year. Okay. Not the end of the world.
Scott Dillingham [00:35:34] So that is a downside rate compared to the B lending because lending will go to 30. Some even go a little longer than that, actually. So that’s a little bit of a downside. But if you’re somebody that makes minimal income, they’ll move forward on commercial.
Erwin Szeto [00:35:48] Mm hmm. Mm hmm. That’s all fascinating stuff. And then give me predictions for 2022 in the mortgage world.
Scott Dillingham [00:35:55] I still think it’s going to be going right. I think the rates are going to go up. I even read something today that the prediction is at the end of January, the rates are going up. Now, that’s a prediction from some news company, right? So who knows? But I know they want the rates to go up. And I think while the variants are around, if they keep getting worse with an interest rate, we are we’re getting more people getting COVID than previous variants. So I think if more of that happens, then it’s dangerous. I think that they’ll hold the rates low for a while just to keep the economy going. But if you say all Micron’s done after the wintertime and there’s no major variants that are right after it, I can see them start to raise rates for sure.
Erwin Szeto [00:36:40] But we’re talking like quarter point, half point, 1.0 each raise.
Scott Dillingham [00:36:46] I think what they usually do it in stages, but over a year’s time I can see them raising it probably half a point.
Erwin Szeto [00:36:54] That’s it.
Scott Dillingham [00:36:54] Maybe more. More at the point over the one. It’s hard to say. Normally it’s so easy to predict this, but because COVID is what made them lower the rates covid’s what’s making them keep them low and COVID disappearing is what makes them want to raise it. Right? So it’s so hard to say what’s going to happen. But, you know, I’m in Windsor, I know you’re in GTA. There is so much housing shortages all over the place that I think in most major markets there’s still going to be it’s still going to be a seller’s market for quite some time.
Erwin Szeto [00:37:28] I think that even with raising interest rates.
Scott Dillingham [00:37:31] Yeah. Like what are your thoughts on that?
Erwin Szeto [00:37:34] So it was really tough one for me. It’s not really going to change anything for my how I’m.
Scott Dillingham [00:37:37] Going to invest. Yeah.
Erwin Szeto [00:37:39] I’m not a fan of inflation, so I believe interest rates need to go up like that. So the only way to fight inflation other than, you know, other than they’re at the risk of being like upsetting anti-vaxxers. But, you know, as the world gets vaccinated and everything should ease up, right? People won’t be sick; they’ll be able to work. Supply chains will ease like everything should ease up as COVID works to the world and vaccines work to the world, we’re overall not too worried about it. Inflation is still going. Inflation to me high.
Scott Dillingham [00:38:07] Yeah.
Erwin Szeto [00:38:08] I just don’t know how crazy high it’s going to be for how long.
Scott Dillingham [00:38:12] That’s like you said, right? It’s not changing your investment strategy. I wouldn’t let this change anybody’s investment strategy. There is a chart. It doesn’t get too much into real estate, but it’s called index chart. Have you ever seen an index chart? And so it’s the growth of your money from 1920 until now, if you had invested in different asset classes. So it’ll be like stocks, mutual funds, real estate, like all these other things. And if you look at it, you can tell when the recessions are because the numbers and the profits and everything goes down. But if you look at the chart overall, it’s always it’s a linear line going up. So over time everything goes up. So even with the real estate, even if the market cools, even if the market crashes, I see that as temporary. It’s not going to go down. Do you know what I mean? Like it’ll go down for some time if it crashes, but it’s back again with time. It’ll keep going up and you can look at that index chart. That’s what they use in the bank to show people the different investments that they could do and how to you should invest over a long period of time and not be scared of the short term. And it’s true over time, even if it goes down, it doesn’t mean anything unless you sell at that point in time. Right. But if you hold on to it, ignore that your asset went down and just keep holding it and going, then it’s going to go up. So I think the same thing with real estate, right? You just got to keep buying. If you’re available to buying and you’ve got the funds to move forward and qualify, do it. I wouldn’t wait.
Erwin Szeto [00:39:44] Yeah, I’ve written some stuff that with the fear of well not fear. What’s going to happen is that rates are going up, that the first half of next year, this year, sorry, it’s going busier because people will be trying to get their mortgages done before interest rates go up. Yeah, so it’s going to be a fun spring market.
Scott Dillingham [00:40:03] Any time that they talk about changing rates, it goes up and they’re changing more with the rules. Yeah. And I don’t know. Did you read that report? It just came out. We’re assuming she’s considering while they’re doing the study to try to get the government to change the rules of 25 to 35% down for an investment property. Mm hmm. No.
Erwin Szeto [00:40:20] Well, this might be. The market will go. Nuts for that, and then it’ll come down.
Scott Dillingham [00:40:25] Yeah. So I think people will jump in before that. But the thing is, too, is when I read the report that was geared towards, like, residential properties, not commercial. Mm hmm. So I think that opens up another niche on the commercial side of things, because they really do need housing, right? So for investors, the natural growth that I see is they’ll buy tons of duplexes for plex’s, whatever. And then they get into those bigger six, 12, 18 unit properties. Right? So the rules, if they tighten on the smaller stuff, you know, maybe shift towards the bigger stuff where the rules have stayed the same.
Erwin Szeto [00:41:02] So but it’s interesting anyways, because I’m in a position with my portfolio that everything is a higher down payment than 20, 25% down. I haven’t done one of those in ages.
Scott Dillingham [00:41:14] So maybe, maybe not if you go commercial. No, I like my space.
Scott Dillingham [00:41:18] I like my. Duplexes. I like I can’t wait to do garden suites. Actually, it’s a good question. I didn’t even think about asking that question. Have you seen anything around financing for garden suites?
Scott Dillingham [00:41:29] It doesn’t come up much for me because I’m in Windsor, right. And I know that’s more of a GTA thing. There’s not many lenders that understand that. Same with modular housing. Right now we have some lenders that do get it. They will move forward. I find for me it’s easier on the with a commercial mortgage because they see that and they’re okay with that on the commercial side of things. But residential, I find there’s not too many lenders. There is lenders, but there’s not as many that support that. Right. So it’s one of those things that I think with time they’ll improve just like modular, like we help clients build modular houses. We’ve got some financing for that. But what has to happen is they have to use this third party company to do the build and then they switched to a regular lender when it’s done because the lenders will do a modular home once complete, but they just don’t want to assist in the building. But I think that’s changing as more and more of these modular homes induce, you know, like we need more housing, right? So I think that you start to see the lenders open up a bit on that.
Erwin Szeto [00:42:25] The clients are doing modular homes. What are they doing? Are they building additions? Are they building, are they doing top ups? But they tear down a house and building something new.
Scott Dillingham [00:42:34] So what’s big that I’m seeing is no builds. First off, right, because a modular home, even with the shortage of materials that we had, they’re still pumping out in 8 to 12 weeks. So you can get them of your home really quickly. Some of the companies, in quotes that we’ve seen, have been cheaper than a stick, though not all of them. Okay. So I don’t want to piss off any builders out there because it’s not always the case, but we have seen some models that were cheaper. But really what they’re doing is they’re adding an 80 you that’s the number one thing that I’m saying. They’ve got that extra space in their yard, the property permits, if they add it and they increase their rents, you know, 1000 to 1500 depending on location by having this 80 you something small like that. I know two local manufacturers that’s something that you could rent out for 1200 or 1500. They’re charging between 120 to 150 for this complete envelope of a building. It’s all done.
Erwin Szeto [00:43:33] So I can’t wait.
Scott Dillingham [00:43:35] It’s kind of worth it, right? Because if you think back to the 1% rule.
Erwin Szeto [00:43:38] Oh, yeah.
Scott Dillingham [00:43:39] It’s like applying on Adam’s. Yeah. Not on houses but on an 80 you the 1% rule apply.
Erwin Szeto [00:43:45] So just for that just part of that for our listeners benefit when we’re talking about modular apartment, basically apartments are being manufactured offsite and offsite place and then they’re brought onto a property and it’s pretty much ready to go. They’re sort of put on a concrete pad usually and then do all the furnishings.
Scott Dillingham [00:44:04] Yeah. And a couple of cool things that I didn’t realize as well with them that I’ll share to. Just to add on to that is you can go up to five storeys high with a modular home like out of wood, single five storeys high. And the other thing that they told me which I thought was super cool is they’re CSA approved in the factory, which often supersedes not all the time, but it often supersedes local code requirements. So they’re usually a lot faster to get approved for a bill than a regular property as well. So I thought that was super interesting about the CSA approval.
Erwin Szeto [00:44:38] That’s fantastic.
Scott Dillingham [00:44:40] Yeah, some of them offer a carry on warranty as well because some lenders will want that. So there’s not all of them do. Right. So you’ve got to kind of look at everything when you’re choosing a manufacturer, but it is becoming a more popular thing that people are doing.
Erwin Szeto [00:44:54] And then how does the financing work? Is there construction? There’s a quote unquote construction financing available or are we talking about when it’s done? It’s like the. Finance. So we don’t social.
Scott Dillingham [00:45:03] Or we have lenders that will finance the construction.
Erwin Szeto [00:45:06] No way.
Scott Dillingham [00:45:07] So we finance the construction. It is an alternative lender. It’s not a major bank. So we finance the construction and then when it’s done, we refinance. And we just, you know, group everything into one. And the clients get to go with.
Erwin Szeto [00:45:21] Our popular solution.
Scott Dillingham [00:45:23] It’s getting like the thing is easy to use. Adding an 82 is not a popular investment strategy, yet it’s getting more and more. So if you want to build an 80, you you’ve got to refinance your property first. But what if you don’t have the equity to do that right? Some people do, but if you’ve recently bought the home, you might not have equity to pull out to do that. Right. So that’s when you would get this construction loan. The other beauty of the construction loan is they don’t really look at income like they don’t care about the income, this lender specifically. So if you have somebody that’s a professional investor and they want to do this, we can help them keep doing it over and over and over again because they’re not looking at the income. So it’s really cool, the options that are out there. That’s cool.
Erwin Szeto [00:46:06] And that’s the benefit. Working with a broker outside the outside the bank is, you know, you call the bucket, you’re not stuck in a bucket. You can play with you can play with.
Scott Dillingham [00:46:15] Everybody across the playground. Go on the swings over there or go down the slide over there. Right. You can do the whole thing. Yeah.
Erwin Szeto [00:46:22] Awesome. That’s pretty cool.
Scott Dillingham [00:46:24] Yeah.
Erwin Szeto [00:46:25] And you’re also an investor in a sizable portfolio, do you not?
Scott Dillingham [00:46:29] Well, if I do, I. I must say, though, that I am more interested in investing in the States now. So that is something I’m considering with the lockdowns and the landlord tenant rules. Knock on wood, I had all good tenants. I didn’t have any bad tenants, but that’s my next thing. I was born in the States. I moved to Canada when I was like three and I just stay here. But because I have that that in there, that’s what that’s what I’m looking to do next. And to be honest with you, there’s actually lots of clients. There’s some people that I know that are setting up like a network where people, Canadians can buy in, like Florida and stuff like that. So these things are happening because people want that U.S. property landlords want that control rate. It’s the you don’t pay rent. Two weeks later, the sheriff literally will kick you out. Right. So it’s landlords have that power. I don’t think that power should be abused by any means. I think some people do abuse that. But the way the Ontario Landlord Tenant Board is, I mean, that’s a whole nother podcast on its own, but it’s disastrous. Yeah, it has its troubles. I’ll give you an example really quick and then maybe we can move on. But I had a bad tenant. Well, actually, it was a good tenant in the beginning. It was a boyfriend girlfriend dating. They split up so the guy wasn’t paying the rent anymore. So the girlfriend moved out, the guy stayed. So I processed the eviction. It took a couple of months and then right before the eviction date, he let his friend move in there. And then the tribunal said, Oh, well, the eviction was for him. He’s already gone. Someone else is in there like a squatters now in there. So now you have to redo the whole process. So really somebody he could have just kept swapping people and I could have never got them out. Now it worked out well because I ended up going to the property because I had to help something on the main floor tenants. And that guy was there and I told him to leave and he actually listened like I was there. And I’m like, You leave right now because you don’t live here. You don’t pay any rent. And he you listen to my goodbye if he said no and he walked upstairs, do you know what I mean? Like, I couldn’t have done anything. So I don’t like that landlords who are doing the right thing don’t have the natural ability to get somebody out of their property that shouldn’t be in there. Squatter, nonetheless. Yeah, like he had no agreement with them. Yeah. And I love investing in care, so I’m not saying don’t do that. So I want to make sure that message is there. But I have a bunch of, like you said, a large portfolio here in Canada and I’m keeping it. I’m not getting rid of it, but I want to diversify. So that’s why I’m going to the States is just to diversify. So I don’t want anybody here to be scared. I just that’s why I want to go to the States. Where are.
Erwin Szeto [00:49:11] You looking?
Scott Dillingham [00:49:12] Well, I live right across from Michigan. So in Michigan, I was looking at Grosse Pointe. Grosse Pointe has one of the highest per capita income in all of the states. And the housing is really, really cheap there. You can get a nice place. 100 hundred and 53. Yeah, obviously US dollars of course, but.
Erwin Szeto [00:49:31] What a funny name for a high. Income area. Yeah, yeah. This Grosse Pointe, Michigan.
Scott Dillingham [00:49:38] Now I still haven’t completed my research on it. So if I look into it and I discover there’s things I don’t like, you know, I’m not going to move forward. But it’s somewhere that’s local, it’s a waterfront community and there’s good income jobs there. So I figure it sounds good on paper. Well, sounds awesome.
Erwin Szeto [00:49:57] Why is this so cheap if it’s waterfront and high income?
Scott Dillingham [00:50:02] Well, I should rephrase this. The properties that are 100, 250 are not on the water. The water you’re looking at two-fifty three hundred still charms, but it’s the small town goes like it’s along the water. So because it’s kind of if you look at the map, it’s where Michigan kind of starts to curve around and then heads back down to Sarnia. So it’s very much like the length of the town is along the water kind of wraps around it. So don’t know.
Erwin Szeto [00:50:29] And the drinking water I’m sorry. I mean, I don’t only see occasional headlines.
Scott Dillingham [00:50:36] But it’s good drinking water there. Okay. Okay. Not in all places, but there. There is.
Erwin Szeto [00:50:40] Okay. Yeah. That’s actually a good point for like the fellow ignorant Canadian, they’re investing like make sure everything’s that everything checks out. Because if they don’t have drinking water, I can’t even imagine what the real estate prices are.
Scott Dillingham [00:50:53] Yeah.
Scott Dillingham [00:50:55] No, that’s a good point.
Erwin Szeto [00:50:56] For anyone doesn’t know. I forget where in Michigan like all their plumbing they rotted out or something in there like the city or I forget who is just giving out bottles of water because the city has.
Scott Dillingham [00:51:07] I forget the name of the town as well. But yeah, it’s like the water. When you turn the tap, it’s like a brownish color.
Erwin Szeto [00:51:14] Yeah. Yeah. Cause it didn’t. They didn’t do proper maintenance and whatnot. And also because I think because they’re broke, the city is.
Scott Dillingham [00:51:19] Broke, and they get lots of flooding over there, too. So even when they do try to clean the water, then it gets very contaminated and it’s not good.
Erwin Szeto [00:51:28] So, yeah, no interest in Detroit then.
Scott Dillingham [00:51:30] I don’t know. You know, they had those I don’t know if you heard about it, but you could get those houses for like a dollar and you just pay no property taxes.
Erwin Szeto [00:51:41] I’m sure it’s in a wonderful neighborhood with tenants you’d love to rent to.
Scott Dillingham [00:51:45] Some of them are bad actually. Like really, some of them are bad, but so I’m pretty sure all those homes have sold now. But I was looking at Detroit. I actually will say Detroit came a long way there, a lot better. But I think everything with the covered right it it’s slower right now but they’ve really done a good job in Detroit. So I would say people that are interested in investing there, I actually do think it’s a good opportunity. I wanted something a little bit higher and so that’s why I went to Grosse Pointe. But not price point.
Erwin Szeto [00:52:16] Not really relative to them. Not here.
Scott Dillingham [00:52:18] Yeah. But I don’t know if I think it’s a great place for someone still to invest, but no, I’m not investing in Detroit. But then I’m also considering Florida as well because Florida’s huge Florida, you can get a nice, nice property again on the water and two-fifty three hundred in Florida. It’s more money, but it’s Florida. Right. So you get some vacancies, go down there, hang out.
Erwin Szeto [00:52:41] Does lend city of investment products for Canadians to buy it to buy in the states.
Scott Dillingham [00:52:45] We’re working on it I’m considering because I’m dual citizen right. So I’m considering actually getting like my broker license in the States. I just need to see for compliance in Canada if I’m allowed to do both because if I could, that would be awesome. But we already know the lenders that can lend to Canadians that want to go over there. We’ve already got all that ironed out.
Erwin Szeto [00:53:07] So it seems to be a common question because a lot of people I know they just bought stuff with their HELOCs.
Scott Dillingham [00:53:12] Yeah, there’s quite a few. So there’s if you go to TD or Royal Bank, they have a cross-border banking. So the problem with their program is that they’re going to use your Canadian credit and debts and income into the debt ratio calculator. So if you’re close to your debt ratios here, they won’t lend you over there because there’s still a.
Scott Dillingham [00:53:33] That what’s.
Scott Dillingham [00:53:35] In there is it’s called ITIL and mortgages. And I don’t remember the exact what that acronym is, but what it is, is ITIN is a taxpayer ID, so a Canadian would get a taxpayer ID. And what you have to do is you have to file two years of your Canadian taxes in the States. And before we started recording, you know, Cherry came on and we’re talking about how, you know, Canada and the US do have a tax treaty. And depending on how much taxes you paid in Canada, you may or you may not have to pay in the States, right? So that is something to consider. If you’re a high income earner by doing this, you might actually have to pay over there. But if you’re not, you don’t have to pay. And then there’s some credit unions over there that will use your income that you file in Canada to help you qualify. And they’re not looking at your Canadian holdings. So then you’ve got more of a clean slate. So there is a process to that. But then yes, you can qualify though, even if you have no credit over there, they’ll move forward.
Erwin Szeto [00:54:37] Awesome. Keep you posted on when you can get U.S. mortgages, because I swear, it’s a hot topic. You know, what are the affordability issues here?
Scott Dillingham [00:54:45] Yeah, yeah.
Erwin Szeto [00:54:46] You invest far away and like my thing is still has to be within an hour drive.
Scott Dillingham [00:54:52] I think it comes down to your team, right? If you have a team, then then you’re okay.
Erwin Szeto [00:54:56] But I’ve just had so much turnover on my team, so I would. Sure you’ve had turnover in your teams, too. Is this just not within my appetite to keep to keep working on teams, especially like in multiple teams?
Scott Dillingham [00:55:09] I think the biggest turnover, like not from an employment standpoint but for like investing standpoint is contractors. That’s why I have the most turnover with you. Get a good one, right. And then they move on to something else or retire or.
Erwin Szeto [00:55:24] It’s a housing boom and they’re in high demand. They can they can do what they want.
Scott Dillingham [00:55:28] So that’s the one role that I just can’t lock down.
Erwin Szeto [00:55:32] So I just I’ve just seen so many property managers come and go.
Scott Dillingham [00:55:36] This is now it is mine. I’ve been good with mine. Actually, I in the beginning I had to go through them. But I also took that as a learning curve. Right, because you got to figure out who you can work well with and whatever. But then the most recent one I’ve had for like seven years and he’s been.
Erwin Szeto [00:55:54] Fantastic.
Scott Dillingham [00:55:55] For you.
Erwin Szeto [00:55:56] All right. And then so Scott, we’re running out of time. I get this question. I imagine you get this question, too. Is it too late to start investing in real estate with these new investors?
Scott Dillingham [00:56:05] No. Just like the index chart. I encourage anybody listening to this to look it up. So it’s an ex. It does have real estate on there, but real estate is only like one of like ten different graphs on there because the bank try, you know, they’re trying to push more of their equities and mutual funds so they build it out to show more of that. But look at the index chart. It shows you the past 100 years of real estate pricing and you’re going to get those up and down. But the graph is always going up over time. So I think if you wait, you’ll just end up entering and paying more for the property. But you’ll still do you’ll still do well, even if the real estate market’s going down. I still believe it’s a good time to buy if you have short term goals. Probably not. Right. That’s probably not a good idea if the real estate market’s going down. But if you’re horizons long term, you’re going to make out and at least if it’s going down, you get a bit of a discount rate. But I don’t know. I think I think do it now like don’t wait. Right. When was the best time to plant a tree? Right. It’s either now or 20 years ago. Right. So you don’t want to you don’t want to delay also.
Erwin Szeto [00:57:10] And then what markets do you service? Because you mentioned you’re a Windsor but.
Scott Dillingham [00:57:14] Yeah, so I own the Canadian Real Estate Network, which is like an education platform and we just have articles on there and you know, podcast interviews and stuff like that. And with that it’s Canada wide. So we’re getting leads from all over Canada as part of dominion lending. We have access to cement to all provinces in Ontario through what’s called Access Desk. So we just pretty much partner with someone who’s licensed in a different province and we can move forward. So pretty much we can land all over Canada with that access.
Erwin Szeto [00:57:43] So okay. And then where can folks follow you or connect with your team?
Scott Dillingham [00:57:49] Yep, yep. So if you just go to Len City dot com, that’s our website so you can check that out. All of our contact details are there. You can see some reviews. You can look more into our financing. And then we also have on Facebook and Instagram just look up Plan City and then you’ll see us and all the stuff that we’re doing. We do a lot in the community and we’re trying to do some stuff that’s fine. So you can really get to know us on a deep level, not just talk about rates and stuff. So if you’re bored and you’re looking for some laughs, we try to add some humor to it.
Erwin Szeto [00:58:19] So no tech talk, but that’s fun. That’s what the young people tell me.
Scott Dillingham [00:58:23] Yeah, it has. It’s dry, right? It’s dry. So you got to you got to make it a little more fun. So.
Erwin Szeto [00:58:28] Oh, Scott, I know you do any crypto, bitcoin, anything I told you I do.
Scott Dillingham [00:58:33] So during that stage when I was leaving the bank and figuring out what I was going to do, I had tons of cryptocurrency miners in my house, you know, my front foyer. I had I had eight rigs. Now, this was I wasn’t doing Bitcoin, I was doing the altcoins, I was doing Etherium and dual mining. And so I had a bunch of those going. Now I ended up selling them off, but I kept all the coins and the only reason I sold them off is because you do need to upkeep them, right? If there’s a fork in the currency, you have to realign all the miners so I can continue to mine that. And you know, it was a bit of a job, so I stopped doing the mining and but I like the purchasing side of things. So yeah, there’s a whole bunch of coins I went all in. I don’t know if it’s a mistake yet, but I went all in on electronic. I don’t know if you are ever. Heard I heard of that one. No expert, though.
Scott Dillingham [00:59:27] They were the first mobile miner, so they have one. You could use your phone and you could mine this coin and instant like. So they have an instant pay app so you can transfer funds instantly. And they also have, like it’s called any task. It’s kind of like Fiverr where you can request a job or whatever. People post things that they can do and you can pay with electronic. So it actually is like a pretty solid currency, but they are just I don’t know, they’re not getting a lot of traction. But it’s funny you. So it’s UK based, but they are working with the UK government on the last news report that I wrote about helping them to make their digital currency. So I don’t know. My thoughts are there’s going to be some big things with that. But I do own some Etherium and stuff like that. I didn’t join the Bitcoin thing because there’s too much up and down. I know a lot of people like it, but my thing was there’s too much like speculation and people always hacking in and I just was like, Well, I’m going to try the other coins because they’re really cheap. And, and, you know, even if they get to a couple of bucks, you know, I’ll be laughing. So that’s what I did.
Erwin Szeto [01:00:34] Do you see much of a future for the crypto industry? Bitcoin?
Scott Dillingham [01:00:38] I do. Yeah, I actually do. I can see them becoming more energy efficient. Right, because bitcoin mining, obviously that’s not good on the economy. And sorry, not that’s not good in the economy. That’s a bad word. But it’s not good for the world, really. It’s consuming like it consumes so much electricity even more than countries. Right. So I don’t think that is sustainable. But a lot of the coins are shifting to use low energy and things like that. And so I do I think it’s a good means of method of payment and people, you know, because I don’t know if you know this, but Canada, they’re coming out with their own digital currency like all these countries are having their own. And there’s so much regulation on that. And I think it gives people an avenue to their own wealth and to create their own legacy, really. And I don’t think it has to be like a legal activity. I just think that people they want freedom. Right. And so if you’re going to go to a bank and you have to pay 100 bucks, I’m just making this up. But if you have to pay 100 bucks to do a bank, drive to somebody overseas, a family member that you want to help out, wouldn’t it be better if you paid a dollar and sent it via crypto? See what I mean? So I think it gives people that power and more control over their money.
Erwin Szeto [01:01:52] I think my favorite my favorite use cases like if someone, for example, someone here is from Afghanistan and they want to send money home to their family, what’s the ideal way to do it?
Scott Dillingham [01:02:01] Yeah.
Erwin Szeto [01:02:02] Because if anyone doesn’t know the Taliban, I believe ah I think they’re mandating their own currency. I don’t even know what it is.
Scott Dillingham [01:02:10] Yeah.
Erwin Szeto [01:02:10] So how good is that currency. They really want to deal with that. But then also, you know, for good reason, you know, our government is worried about money laundering and funding terrorism. So, yeah, it’s good to get money to your family in Afghanistan.
Scott Dillingham [01:02:25] Yeah, for sure. And so that’s the bad part of it, I think, right? Because people are using it for that. But I think it does give people freedom. Right. And when you think about it too, like the banks, when you know how they work at the core. So you have to pay to have a bank account, right. And you depositing money in there. But really, the bank can lend out $10 for every dollar that you deposit. So they’re just making so much money. So you’re paying somebody to hold your money where if it’s crypto, you have that control, right? You are your own bank. Yeah.
Erwin Szeto [01:02:56] The whole paying for the bank machine, the convenience.
Scott Dillingham [01:02:59] Fee versus.
Erwin Szeto [01:03:00] Using the teller.
Scott Dillingham [01:03:01] Okay. I know it’s silly. Yeah, I don’t know. So I do. I do have. I just. But I diversify, right? So that’s why I want to go to the States too. Like and again, nothing wrong with investing in Canada, but I have stuff here, so I want to get stuff there. I have crypto, I have solar panel income. Right. That’s different. I have business income. So they say you want more streams of income, have the best retirement and success financially. Right. So that’s why I’m always looking at different avenues to go into without taking me from my core business, which is mortgages. Right. But anything that’s passive that I can just invest in to, you know, I’m open to it.
Erwin Szeto [01:03:41] So what’s the saw income, something from the past or the more recent?
Scott Dillingham [01:03:44] Yeah, it’s from the past. They don’t have those contracts anymore.
Erwin Szeto [01:03:47] So, yeah, I’m in the Liberal government just paying like crazy.
Scott Dillingham [01:03:50] Yeah, yeah, yeah that’s coming in. So I get like, it’s probably like ten grand a year off one house from, from solar income, which is crazy. And the cool thing is with this though is when the contract is done because it’s a 20 year contract, when the contract is done, I kind of power the house with that power instead of selling it to the city. So then I can jack up my rents a bit because I can say it includes electricity, right? So it’s it was a win to get those solar panels when they had those contracts. So now I know that’s not available now, but yeah, we’ll see.
Erwin Szeto [01:04:23] We’ll see. We’ll see if the Liberals get back in power.
Scott Dillingham [01:04:26] And you know what? It might come back. What the push for everything to be greener and everything like that, you know, it might actually come back so great. We won’t go there. I’m not going to politics.
Erwin Szeto [01:04:38] Scott, again, thank you so much for your time. Any final words you like to share anything or stop by quotes that you love advice to make money?
Scott Dillingham [01:04:48] Health advice? I just think so. Like I have my own podcast and I recorded earlier today and the one message that was in there that I think that everybody should do that I’ll share with. When the UN and your team here is vision what you want in life no matter what it is. Think about it and believe that you’re going to have it and even write it down and put. So say you want a Lamborghini to put? I have a Lamborghini and write it down and it’s so weird. But when you write it down, it becomes real and you just think of it and whatever it is that you want. I really believe that you can get anybody can get it, but you have to vision it and you have to vision yourself already having it. And it sounds so farfetched, but it’s true because they say like, so you’re having a dream and you’re falling from the sky. Usually you wake up, right? Well, actually, every time we wake up. But they say if you actually hit the ground that you could die, even though it’s a dream that you could actually die in real life because you’re your brain and everything thinks your dreams are real, like what you see. It thinks it’s real. So it’s proven that if you just visualize what you want, you will get it. So I just want to share that with everyone who’s listening.
Erwin Szeto [01:06:00] Probably Israel, because we’re in the matrix.
Scott Dillingham [01:06:02] So it’s true.
Erwin Szeto [01:06:05] But this add to that is something I’ve been doing more recently as I’ve been meditating every morning, and so I’m being intentional about what I want. So if you want a Lamborghini, for example, then every day be intentional about what your thoughts and what you’re going to do that that day to get closer to that vision.
Scott Dillingham [01:06:23] Yeah. And how do you find it’s working for you?
Erwin Szeto [01:06:25] Yeah, yeah. So start an evertonian rig. Or. Buy a house in Grosse Pointe. I don’t know. Please, folks, I’m just joking. But this is advice. I have no idea.
Scott Dillingham [01:06:40] But it does work though. It totally works because your body, like we work on autopilot, like when you think of driving to work, it’s on autopilot. You don’t really know how you get there, but if you’re visiting, you’ve got that Lamborghini. If that’s what it is that you want, your body and brain and everything will naturally work for you going it. That’s really cool how it works.
Erwin Szeto [01:06:59] If you envision like yourself on the couch watching the leaf game, you will have it.
Scott Dillingham [01:07:03] Will have it, yes. You call in sick from work, you’ll do whatever. Exactly. This is.
Erwin Szeto [01:07:08] Amazing. Scott, thanks so much. Lynn City. That’s the best place to reach, guys.
Scott Dillingham [01:07:12] Yeah, absolutely.
Erwin Szeto [01:07:13] All right. Awesome. Oh, before we go, can we talk about Jillian a bit?
Scott Dillingham [01:07:17] Yes, yes, yes, yes, yes.
Erwin Szeto [01:07:19] It’s certainly a bit of a curveball. You got time.
Scott Dillingham [01:07:21] Yes.
Erwin Szeto [01:07:22] You’re talking about Jillian Irving’s role at Citi.
Scott Dillingham [01:07:26] Yes. So Jillian is our face in the GTA market. So she experienced real estate investor, right? She’s been doing it for a long time. Large portfolio and she’s on our team, but she’s in Toronto. So the cool thing with that is if somebody wants to meet face to face different events and things, she’s right there to support you. But then behind the scenes, she has my team, she has the admin support and I do most of our underwriting behind the scenes. I’ll review all the files and whatever. And so we just we get stuff done. So yeah, Jillian is amazing and she just really knows her stuff. Great to chat with. So I would say for the GTA area and clients and clients working with Erwin that I would actually ask for. Jillian, when you call and go to the Lion City website and then Jillian will call and go over all the details with everybody.
Erwin Szeto [01:08:21] Yeah, I’ve known Jillian for a while, so she actually she lives a lot of the same stuff that I do trying to get financing and stuff. So she kind of knows what our clients are looking for. Well, she’s our client, so she knows exactly what her clients are looking for. Yeah. Yeah. Amazing. All right, Scott, thanks so much for doing this. Congratulations on your success. It’s so awesome how things have gone since leaving the band and look forward to talking to you more this year.
Scott Dillingham [01:08:45] Thanks so much, Irwin, for having me. I think we talked about doing a podcast together for probably seven years. I think something like this, we always talked about it and we’ve done it now.
Erwin Szeto [01:08:55] Yeah, yeah. You were work when you were at the benefit of all but different understandably. Yeah. But you set rules. You cannot promote yourself.
Scott Dillingham [01:09:03] I don’t know. I know it’s crazy, but awesome. Well, thanks again for having me.
Erwin Szeto [01:09:08] Awesome. All right. Have a good day.
Scott Dillingham [01:09:09] You too.
Erwin Szeto [01:09:18] Before you go, if you’re interested in learning more about an alternative means of cash flowing by, hundreds of other real estate investors have already. And sign up to my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s a much improved demonstration over the one that I gave to my cousin Chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself. I got into real estate for the cash flow, but with the rising costs to operate a rental business, it’s just not the same as it was 5 to 10 years ago when I started. Never forget that cash flow reduces your risk. The more you have, the more limbs you can absorb. And if you have none or limited cash flow, you’re going to be paying out of your pocket like I did on a recent basement flood at my rental in St Catherine’s, Ontario. If you’re interested in learning more about Stitcher for free from my newsletter at WDW DOT Truth About Real Estate Investing Dossier, enter your name and email address on the right side will include in the newsletter when we announce our next Free Stock Hacker demonstration. Find out for yourself with so many real estate investors are doing to diversify and increase their cash flow. And if you can’t tell, I love teaching and sharing the stuff.