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Podcast Transcription

Sandy Mackay [00:00:31] Breakthrough Real Estate Investing Podcast Show 103.

Announcer [00:00:36] If you are looking for the skills and tools to succeed in real estate investing, you’ve come to the right place. This show is about breaking through barriers, breaking through limiting beliefs and breaking through to the life that you want to live through the power of real estate investing. This is the Breakthrough Real Estate Investing podcast, and now here are your hosts Rob Break and Sandy MacKay.

Rob Break [00:01:09] Welcome back, everyone, thanks for joining us. Sandy, how are you?

Sandy Mackay [00:01:13] Amazing. How about yourself?

Rob Break [00:01:14] I’m doing well, I’m doing well and excited to be back again for another fun filled, action packed, information filled, you know, just exploding with everything real estate episode here that we’ve got for you today.

Sandy Mackay [00:01:30] Absolutely. Yeah, it’s going to be exciting. Got a great guest standing by. And as always, want to encourage everyone to jump on over to our website. Breakthrough REIT podcast Dot K pickup our free report there. The ultimate strategy for really wealthy real estate and get on our email list so you don’t miss out on any episodes. I get notified of all our live shows are doing street tours, property tours is that sort of stuff and again breaks through RIAA podcast. Okay.

Rob Break [00:01:57] Yes. Well, hop on over to iTunes and leave us a rating and review that really helps the show. You know, if you like it, live five stars. If you don’t let us know what, what things we could change. Our biggest complaint used to be our audio quality. I think we fix that saying. I think that we sound pretty good now. I’m not, I’m not sure, 100 percent, but maybe over the last five or six episodes, we’ve gotten much better.

Sandy Mackay [00:02:18] I’d say so.

Rob Break [00:02:18] Yeah, yeah. So no more of those just tell us what kind of guests you want to hear, what kind of information do you want us to bring that kind of stuff? So we’re working on the audio stuff. We already know all of the concerns in that department. So, you know, we would love to hear, though, about content, what kind of stuff you want to hear, what kind of stuff you don’t want to hear. And you know, also you can go back to the website, you can hook up with all of our guests through the through the show notes. So, yeah, so I encourage you to go to both iTunes and break through our podcast dossier again. Sandy, what’s new with you? What do you got going on? Give us an investor tip, investor tip.

Sandy Mackay [00:03:07] Well, let’s see. We are couple things. We just started out this past week where we’re closing on a couple of buildings in the new year. In late January, I suppose 12 unit, an eight unit right here, downtown Hamilton. And we actually just had people turning out for one of our events. And we had we were talking about the big, bigger buildings and he was he was surprised that Hamlin’s and he was like laughing at the poor quality actually of the buildings and all these old buildings and the nicer stuff out in west there. Some of the newer like, you know, not 100-year-old buildings. And it was interesting to hear his perspective on the places we were we were acquiring, and he didn’t. He liked them. He just says, wow, with us crazy how much work these are going to need. But we like that. We like seeing the value added. We like putting in the sweat equity. They take a little while to turn over when they’re when they’re one of that size. It just takes a little while to move tenants and get rhythm. But it’s fun doing that stuff. It’s going to take a little bit, you know, a couple of years, probably to turn those over and increase the rents and get them up to the quality of places we like. But that’s what that’s kind of what’s on the top for us. That’s exciting right now. I’ll be.

Rob Break [00:04:25] I mean, same thing, you know, we’ve been hammering out these shows some still, I’ve got that six bucks tied up and still waiting for that to close early next year and looking for the next, you know, single family home to transfer into two units around this area. So just waiting for that next deal to pop up. So we’ll see. I’ll keep you posted on that.

Sandy Mackay [00:04:48] What’s hot now for you? Peter Bristow

Rob Break [00:04:50] Peter Grosz. The hot spot man I’ve been, it’s been cooking really good. Yeah, it’s been really good lately. So if you’re looking for a student rental, like what we do up there saying, and I’m sure I’ve mentioned this before, but what we do is we’re looking for the same type of property that someone may look for it to add a second suite just so we’ve got that in the back pocket. But well, we’ll put we’ll register it as a student rental, and the city’s got a really unique, interesting label that they put on these. They’re calling them large dwelling units, and you can essentially run the place as a rooming house. I mean, there’s more rules to it than that, but I’m dumbing it down just for the sake of, you know, explaining how it works there. And then and then you can have up to 10 bedrooms, which we haven’t been able to do. You got to find quite the house to pull that off. But I’ve got a couple of bedrooms, mostly six-bedroom units, and they’ll pull in, you know, 600 bucks a room on average. So with the purchase price as being what they are somewhere between 375 and 450 still for something really decent that you can do that, and it’s just been explode explosion of a market lately.

Sandy Mackay [00:06:02] And then a Plan B is converted back to the duplex. Or maybe that’s yeah,

Rob Break [00:06:07] it’s a back pocket thing, you know, if you find that because right now, like they only allowed secondary suites over the last year and a bit citywide, you know, they were slow getting on board where everyone else lives in Ontario. Anyways, this there’s a mandate for, you know, rules around second suites citywide and all municipalities. They were a little bit slow. And so they’ve been allowing them for about the last year in all our one zones of the city. So we don’t have any comparable sales right now, though there’s nobody really like there’s nobody up there just hammering them out and putting them back on the market so we can get a good gauge of what, you know, the RV would be with something like that. So. So in the meantime, just make some good cash flow on the student rental. And then if it’s if you see that it’s going to be worth, you know, exponentially more down the road, that that might be the time to sink the money and then turn it into two units makes sense. Interesting exit strategies, it’s important. Well, Dave Dubeau has been sitting here in the background, patiently listening to all this yammering at guys.

Dave Dubeau [00:07:17] Congratulations. I mean, I’m impressed with the I’m out here in B.C., so the price points you’re talking about are very appealing because there’s absolutely nowhere around here. You can get a house that size for that kind of price, so you don’t know what you can for sure, you guys.

Rob Break [00:07:33] Yeah, we’ll catch up to you guys at some point. I’m sure I’m not too anxious to get there, but when we do, everyone that’s bought now will be pretty darn happy. Definitely. Dave is here with this, and he’s going to talk about attracting investors and raising capital without rejections. So I’m excited to hear about that. And thanks again, Dave, for being on. Really appreciate you taking the time to come out and talk to us today.

Dave Dubeau [00:07:58] Hey, Rob said. It’s my pleasure. Thank you very much for having me on your show and congratulations on six years and a hundred and two episodes. That is absolutely fantastic. Hats off to both of you, guys. And keep up the good work.

Rob Break [00:08:12] Thanks very much.

Sandy Mackay [00:08:13] Appreciate it. Yeah, thanks. I’m going to read a little quick intro and Dave here for everyone, so they know a little bit about who he is. He’s a real estate entrepreneur, bestselling author, speaker, and investor attraction experts based out of Kamloops, British Columbia. And he began his real estate career in 2003, doing 18 deals in 18 months and later switched his focus to client first rent to own deals and nowadays invest in multifamily apartment building properties. And for the last several years, Dave has been the world’s number one investor attraction imple mentor, Empl Dash mentor, using his proprietary five step money partner formula. And Dave helps his real estate entrepreneur clients grow their portfolio significantly in record time by attracting investors instead of just chasing after them. And I’m sure we’ll get a lot more into that through the episode, and I’ve got a couple of links to share with you all from him and where you can connect with them deeper, and we’ll talk a little bit a lot more about that throughout the show. Dave, why don’t you tell us a little bit more about your investing journey so far?

Dave Dubeau [00:09:16] Well, thanks a lot, Sandy. Yeah, actually, I step back and realize my very first real estate investment was a. Way back, way, way, way, way back when I was 12 years old, and I come from a family of OK dirt and my mother was actually a go getter. She was a single mom working full time, raising me and my much older brother, and managed to build up a portfolio of over 50 properties back in the 70s and 80s. So when I was 12, she and my older brother were working on a duplex, and everything about the house was there talking about doing this duplex deal, and I really wanted to get involved. So they said, well, how much money we got. And I somehow managed to save up 200 bucks. They said, OK, you can invest. And then the affection you said that I got to own the garbage stoop, or the garbage cans were so that was perfect.

Rob Break [00:10:15] Did you actually give them the money?

Dave Dubeau [00:10:17] I did, yes.

Rob Break [00:10:18] Well, all right. And how did the did you charge rent for that garbage stoop or how did you what was your return on investment of that one?

Dave Dubeau [00:10:28] Actually, you know what that was. That was the early 80s and the real estate market in B.C. crashed at that time. Interest wait, wait. Rates went up to 18, 19 20 percent. Hmm. Fortunately, we ended up losing that property. So not a good not a not a happy ending to the rest of that story, but that’s how I first got into real estate investing in and after that, again, just watching the market recuperate and seeing how things were working. That’s when I jumped back in in 2003 in a in a serious way.

Rob Break [00:11:03] Nice. Let’s talk about that. That in 2003, what happened?

Dave Dubeau [00:11:07] Well, I’ve been living overseas. You guys for almost 14 years travel around Mexico and Central America ended up living down in San Jose, Costa Rica. You guys are familiar with Costa Rica.

Rob Break [00:11:18] Go in there and we’ve got it booked already. February. Yeah.

Dave Dubeau [00:11:22] Nice. Nice. Nice. So I ended up in Costa Rica, fell in love with the country, fell in love with the people, fell in love with one specific person at that time and ended up decided, hey, you know, here I am. I was twenty-three. I thought, What the heck? Why don’t I start a business down here? So there I was. I was kind of poetic justice. I was a face-to-face white guy, Canadian wetback working illegally in Latin America. So I started up a language training company was so dumb I didn’t know any better and somehow kind of made it, made it work. I got married, had kids, and had a pretty good life down there in Costa Rica. And then in 2003, my then wife and myself, he decided, you know what? Let’s move the family to Canada and start all over again from scratch. And sometimes people go, Dave, where are you living in tropical paradise? Had a pretty good life. Pretty good income. Lifestyle down there is pretty nice because, you know, you can have maids and gardeners and all that kind of stuff that that’s a little bit more difficult here. I say, why would you drop all of that and move back to Canada? And the reason is which a lot of your listeners who are First-Generation Canadians can probably relate to don’t realize how good we’ve got it here until you live somewhere else for a while. So we decided that Canada was a much better place to bring our kids. So we packed everything up, moved to Canada, and I started all over again from scratch in 2003 in a brand-new city, Kamloops. We picked this area because of the climate more than anything, and that’s where I where I got started. As you know, I was pretty much unemployable. I’d been self-employed for so long. I couldn’t do what I was doing before, so I was up stressed out late one night. So I one of those you guys remember those late-night infomercials, the American gurus. Mm-Hmm. Yup. Well, I signed up for one of those, although the credit card sent out for the course and it was all about low money, no money down deals, which was perfect for me at that time because that’s exactly what I had done. So. So that’s how I got started, started doing creative deals, you know, the no money down the lease options.

Rob Break [00:13:44] So you got that program and implemented it, it actually started working for you.

Dave Dubeau [00:13:49] And yeah, well, I to convince great things, right? It’s all-American stuff. I had the Canadian guys a little bit.

Rob Break [00:13:56] Yeah, yeah, yeah. So that’s kind of interesting that you had, you know, because I did sort of the same thing, but I needed that validation from a Canadian source before I took the jump. You know, I would imagine a program like that wasn’t cheap for you at the time, either.

Dave Dubeau [00:14:14] Well, considering how much cash I didn’t have, of course not. It was. It was a bit of a leap. But it’s all about the marketing is what I’ve find because I guess my initial claim to fame was. Deals in 18 months, which is pretty cool, but with the cool thing is I’m in a pretty small market, so Kamloops at that time only had a population about 80000 people. And the cool thing was I was able to do all of those deals without going through the MLS, without working with realtors, without cold calling Facebook sellers. It was all through marketing and getting people to reach out to me interested in me making an offer on their properties.

Rob Break [00:14:49] Mm-Hmm. And when you started out just really quick, I’m sure there’s going to be people that are very interested in that kind of stuff. There always is 18 deals in 18 months. They did not start as soon as your marketing hit the hit, the, you know, the possible clients. I’m sure there was like three four months that nothing happened or looking at properties where there was no deals and that kind of thing before the first one actually happened. Am I right there or did they pretty much actually know what I was?

Dave Dubeau [00:15:17] Maybe it was beginner’s luck, but I got so quickly. I think the first two weeks I had my first deal. Really? Yeah.

Rob Break [00:15:25] And how did you identify that it was a deal at all?

Dave Dubeau [00:15:28] Well, I started the hell trials. I mean, I really that was a nice thing. I went in and we looked at different, you know, different strategies. So instead of just going in and making one offer on a property, you know, you make two or three or four different offers on the same property. And instead of it being a yes or no decision for the person, it’s a Oh, which one do I choose?

Rob Break [00:15:51] Right? OK.

Dave Dubeau [00:15:52] So we could look at we want to want to do an auction on the property to do a lease option on the property. I want to do an assignment, kind of a wholesaling type deal. What do I want to do with this deal? And it’s just really dependent or in certain cases, just having the right a few deals where the property owner basically just handed me over the house for a buck. You know, those kind of things. So it was it was a combination of the marketing plus the timing of the market. It was kind of a slow market at the time. It wasn’t really, really hot. So it was a good opportunity to get in on some good deals.

Rob Break [00:16:26] Very interesting, very cool. We could probably spend

Dave Dubeau [00:16:30] here, guys. It sounds very cool 18 deals in 18 months and a few of them were really quite lucrative. But a lot of them were just, you know, crappy old mobile homes. Make a couple of grand here, make nothing there. So, you know, yeah, a few of those deals were 35, $40000 a little pops and others were just kind of chugging along, but got very, very good at the marketing side of things.

Rob Break [00:16:54] Well, and I’m sure you learned a ton like because there’s probably people that have been investing for years who don’t even know half of the terms that you just spout out there. You know, when you said what different types of offers that you would, you would send them.

Dave Dubeau [00:17:09] Right? Yeah. But you know what? I’ve figured out you guys, which you guys have figured out is, is that kind of stuff? Cool. But you’re really not creating any long-term wealth, right, because you’re just getting into it, you’re doing a I wouldn’t call it a flip because it wasn’t actually, I’m about as handy as a foot, so I didn’t fix anything up. I just got to turn things around and sold it to a different end user. Mm hmm. Well, that’s cool. But as soon as you’re done one deal, you have to find another one to replace it with right versus buying a property, holding on to it long term and realizing all of the different profit centers in a real estate deal. Right? So that makes a huge difference. So. Mm hmm. It sounds impressive, but I easy because I didn’t have the concept of buying stuff with cash or getting financing because I I’ve been out of Canada for so long, I didn’t qualify for any financing. And at that time, I had no clue about working with investor partners. I left a lot of really, really good deals on the table that I could have gotten if I would have been able to go in and buy them with cash.

Rob Break [00:18:12] Hmm. And I would agree with you there. But at the same time, for somebody in a situation where they don’t have that capital to invest right off the bat like this is a way that you can get into it. You can learn a lot, you can get into people’s houses and actually lock them up without any money, but you can actually do that so. So it’s a great opportunity for people. And yeah, so I mean, although and I found there was a lot of resistance actually from the very same people who when I tried to stop assigning these kind of deals right, I wanted just to like at a certain point, you don’t want to sign them anymore. So there’s a lot of resistance from the people that you’ve been selling the places to, you know, especially when you go start looking for money partners, which is what we’re going to sort of focus on here, that they’re like, well, no, I don’t want to partner with you. I just wanted to pay the 10 grand and then like: you’re gone now after that.

Dave Dubeau [00:19:15] Exactly. They can make a lot more money paying you a five or 10 grand to get the deal than you want to do.

Rob Break [00:19:21] Yeah, exactly.

Sandy Mackay [00:19:23] Well, Dave, you said raising money is the most important skill in real estate investing. Why is that?

Dave Dubeau [00:19:28] Well, you know what, you guys, once you’ve got the ABCs of how to do a deal, whatever strategy you’re focusing on. So Rob, you’re talking about, you do a lot of focus on student rentals, do you at once you understand the basics of how a student rental works or, you know, Sandy, you’re talking about, you’re working with multifamily properties. Once you’ve got the ABCs of how to do by a six plex or 12 Plex, then the next level of things is you need to start raising capital. You need to start attracting money partners and joint venture partners so you can do more of those deals because everybody runs out of capital and or credit. Sooner or later, you guys are probably aware of this. The 80 20 rule in life, the 80 20 rule in real estate. Investing in that is that 80 percent of Canadian real estate entrepreneurs are stuck with one or two or maybe three properties in their portfolios, and then they run out of cash or credit to buy more, and they stay stuck. And that’s a real pity because what we want to what I’m sure you guys want for your listeners is for them to get into that top 20 percent and the top 20 percent of Canadian real estate investors are the ones that own 80 percent of the properties. They’re the ones that get the lion’s share of the cash flow, the lion’s share of the net worth. And the reason is because they’ve earned it. They understand how to get more capital to do more deals. Does that make sense, you guys?

Sandy Mackay [00:20:54] Mm-Hmm.

Rob Break [00:20:58] So why is it that

Sandy Mackay [00:21:01] people understand the importance of

Dave Dubeau [00:21:03] it? Why is it such a challenge for others to raise money? Well, I don’t know about you guys, but the idea of being rejected doesn’t appeal to me too much credit. It takes me back to high school dating days, right? No, nobody likes to be rejected. And most people, at least what I’ve found is that they’re petrified of, you know, doing what they’re told they should be doing when it comes to raising capital, which is pick up the phone and start dialing for dollars. So we’ve all heard that, you know, pick up the phone, start cold, calling people, tell them about your deal, start raising capital that way. Well, most people that I’m aware of understand that that is a long, arduous, and painful process that’s going to require a lot of rejection. Or, you know, the whole networking schmoozing thing. Go out and turn every conversation into a real estate conversation. Well, most people aren’t very good at that, and they are comfortable doing that. So what holds most people back is just that fear of making that first step, that fear of getting turned down, that fear of looking like coming across like they’re desperate or needing. Does that make sense?

Sandy Mackay [00:22:19] Absolutely. Absolutely. I mean, yeah, and it’s a hard thing to overcome to get that your mindset around that. What is what? How do you overcome that? What is what is the thought process and what skills they need to work on? I guess to do that.

Dave Dubeau [00:22:34] Yeah. Well, there’s lots of things personally. You know, I’m a big fan of focus on what you’re good at and don’t necessarily spend a lot of time trying to, you know, improve your weaknesses. Focus on what? What’s best for you? What what’s going to work best for you? So in my case, you know, I tried that. I remember it was very, very it was a painful experience the first time this really smacked me in the face. I’ve been doing those creative deals, got out of real estate, investing for a while, started doing some marketing for a major Canadian real estate seminar company, got into the teaching and trading side of things. Then I jump back into real estate investing in 2010 and started doing client first rent own deals. So that actually required us coming up with money down payment money to buy houses. And I was able to do self-financed my first couple of properties like most people, right? Most people to get started. They sell finance. So that’s what I did. And then I ran out of cash. And then. I decided, OK, I better do what everybody tells me to do because I don’t have you guys heard the expression, just find a good deal and the money will find you.

Rob Break [00:23:44] I’ve definitely heard that.

Dave Dubeau [00:23:45] Definitely. Well, I think that’s complete B.S. Or at least it was for me because I remember I found this the ideal tenant buyers for my rent to own program. Perfect, perfect scenario. Found the house. Got it under contract. I crunched all my numbers. I saw after sharing my profits with my investor partner, I’d be able to walk away from this little two-year deal with about a $40000 profit, which is pretty good. Jones, was I didn’t have the investors on board, so I thought, OK, well, why don’t I do what everybody tells me to do? So I started calling people and I got rejected, rejected, rejected, and I got kind of a thick, thin skin. So I quit doing that. Then I decided, OK, well, go turn every conversation at a real estate conversation. So as part of the chambers of Commerce, I went and did that at the Chamber of Commerce. And I, I think I was part of Toastmasters that time. All these different places. Nothing worked very well. I just got some weird looks and a bunch of business cards, and nothing happened. Then I was to get desperate. I got an extension on the. Closing date around the subject removal date for financing there, and I thought, OK, well, why don’t I do this? Why don’t I put together a little package and email it to everybody I know? So that was my brilliant idea, and I tried that, and I was kind of excited because I got a lot of responses back until I started reading those responses. And basically, it was a lot of people saying, hey, Dave, I haven’t heard from you in five years, seven years, 12 years, whatever it was. And the first thing that’s coming across my desk is, hey, I got a deal. I’m looking for money. Have you got any right? So basically, that was a complete flop, and I ended up ticking off a lot of really good potential. Money partners had to watch that deal collapse because I wasn’t able to get the capital I needed in time. And that’s when I decided, you know what? This sucks. I never want to be in this position again. I don’t want to stay stuck with this small portfolio, so I better start figuring out this whole how to raise capital thing. And that’s what I started taking training classes and coaching and reading books and all this kind of stuff. And a lot of the stuff was just a rehash of, you know, cold calling and dialing for dollars and doing all this networking stuff that I already tried and did work for me. So what I decided to do is applied marketing to finding investors and raising capital. So that’s what I focused on, and I cracked the code on it. I was able to raise for the rental business over a couple of years, about $600000 for different deals there. And then I kicked things up, started getting into multifamily properties, raised millions of dollars for four deals with that. And more importantly, since that and since starting to work with clients, I’ve helped them raise tens and tens of millions of dollars, probably getting close to the hundreds of millions of dollars for their deals so far.

Rob Break [00:26:38] That’s amazing. So we’re going to talk about exactly how you did that in a minute. But I guess the next thing we wanted to ask you is like, so you mentioned there that, you know, maybe some of the people that you were talking to, some of the people you sent that message to be people that not out of, you know, for whatever reason you hadn’t talked to in some time. So when it comes to investor partners, who should the listeners be focusing on to get the best results?

Dave Dubeau [00:27:08] Yeah. Well, that’s a very good question, Robin. And the first thing is, I’ll be happy to answer. The first thing is you want to. Do the opposite of what I did. Right? OK. Don’t do what I did. That was exactly what not to do. Don’t just go out there and spam everybody. You know, what’s your deal right out of the get go? Because again, a lot of a lot of people that, you know, haven’t heard from you for quite some time. So take a little bit of time to break the ice first before you start talking business. And you guys, I’m happy to explain how that works if we have time here. But as far as who to focus on, that’s really, really important. And it’s not just who to focus on, but who not to focus on, because I don’t know if you guys have seen this, but I see this all the time with people that are just getting started with raising capital is that they’ll blasted out on social media. They get on Facebook, hey, I got a deal. Anybody want to invest with me? Blah blah blah. Some people will go out and actually take put in ads and Kijiji and Craigslist and back in the day in the newspapers or those kind of things just saying, hey, I’ve got a deal. I’m looking for investor partners, which on the surface. Seems like it would make sense, however, there’s a thing called the Ontario Securities Commission, actually, every province has one, so every province has its own securities commission. And caveat here, I’m not a lawyer, I’m not an accountant, I’m not a security specialist. I’m just sharing my understanding of how it works. So the Securities Commission is there to protect Joe public against evil con artists. Right? And unfortunately, over the years, there have been some, some real estate con artists, and they’ve given everybody a bad name. So basically, the government, the Ontario Securities Commission says that unless you’re licensed to do so, it’s illegal for us to raise capital from the general public. Unless you’ve got a license or unless you jump through a lot of hoops and get the proper paperwork like an offering, memorandum, or something like that in place. First, it’s illegal for us as mom-and-pop real estate entrepreneurs to raise money from the general public, right, because they want to protect them. So be very, very careful about promoting your deals to everybody and anybody because you could get into some serious hot water with the Securities Commission. All right. So we want to avoid that. But fortunately, there are a couple of exceptions to that rule, and the first exception is we are allowed to raise capital from what are called accredited investors. What’s an accredited investor and somebody who’s got pretty high net worth and high income? So different provinces, different rules. But bottom line and somebody, I believe that it’s earning at least $200000 a year or $300000 as a couple net worth of five million dollars, excluding their principal residence. Few different things like that. So in other words, rich folks, rich folks that have quite a bit of cash. So if you know a bunch of those people? Great. Start with them. That’s where I would start. But if you’re like most people, you don’t know that many people plus accredited investors, plus there’s a lot of competition for their attention and their capital. So where does that leave us as mom and pops? Well, fortunately, there’s another exception. There’s a little bit of a gray area, but at the Securities Commission says we are allowed to bring on partners that are close friends and relatives and business associates. All right. So that’s what I’m going to suggest that we want to focus on is what I call people in our sphere of influence, people that we already have that preexisting relationship with. Does that make sense, you guys?

Rob Break [00:30:54] Yeah, it does, absolutely. And we’re talking about something different here, just to be clear than what Sandy and I will most of the time cover. And that’s just a straight up like Cole venture agreement buying a property together kind of thing.

Dave Dubeau [00:31:06] Right, Dave? Well, it could be that as well. And I’m going to suggest even for a Cole venture agreement if you you’re on. So when you say co-venture agreement, you mean your partner is coming on, they’re buying the property, they’re coming up with the down payment, probably qualifying for the financing and either they’re on title or both of your own title. Is that?

Rob Break [00:31:24] Yeah, like all different kind of structures, but something in that realm?

Dave Dubeau [00:31:28] Yeah, even there, I think we need to be careful about who were who. We’re approaching about that because bottom line of are going out to the general public. I’ve seen a lot of people get in hot water with their securities questions, so be careful of that. Plus, the other thing I found you guys is in order for somebody to invest one hundred one hundred and fifty thousand dollars, whatever it is with you, they really need to know you like you and trust you. Would you agree? Mm hmm. Definitely. Just make sense. So if we’re going out to the general public, they don’t know us. They don’t like us. They sure as hell don’t trust us with one hundred and fifty thousand bucks about to get go. So. So it really is a shortcut if we go to those folks that we have that preexisting relationship with in the first place. And the cool thing is, you guys and I’ve been doing this training and stuff like that for four years now. In your cell phone, there’s literally a million dollars of capital waiting for you to get access to. Right? Because in your cell phone, chances are you got a bunch of contacts people in your sphere of influence. Once you learn how to get the word out the right way, it’s a fairly simple thing to start raising capital very quickly.

Sandy Mackay [00:32:50] Can you touch on a little bit about that right way is, I guess, obviously just calling them calling your sphere. There’s a lot more to it than that.

Rob Break [00:32:55] Well, again, say, hey, give me money, is it?

Dave Dubeau [00:32:58] Yeah, I’d rather stick a needle in my eye than make any more calls. I’m just not. I don’t have the intestinal fortitude.

Rob Break [00:33:07] I’m with you, right?

Dave Dubeau [00:33:09] So I’ve come up with this whole little what I call a five-step money partner formula. So the first step you got if you guys want, I can go through a quick, quick, very, very quick, high-level run, for sure.

Rob Break [00:33:22] Absolutely. Let’s do it.

Dave Dubeau [00:33:23] All right. So I got it. May or may not be able to see this behind my other big banner here. Mm-Hmm. One is let’s come up with this group of. People that we’re going to be reaching out to our group are prospective investor contact list. Right? So what I always recommend to people is let’s start with a group of ideally 150 to 200 people that we can start communicating with. Right. So people that are in your sphere of influence, people that you have that preexisting relationship with, everybody freaks out, I don’t know. One hundred and fifty other people. Yeah, you do, actually. So we take all the contacts from your cell phone, all the contacts from your social media, all the contacts from your email and you dump him into one spot. Chances are you got way more than a couple of hundred people, so that’s what we want to do first. But before we run out of the gate and do that clumsy stuff like I did, what I really recommend is that you reconnect. You know, once you’ve got that, that group of 150, 200 people reconnect with them on a personal level first before you start talking business. So what I mean by reconnecting them well, nowadays with technology, it’s easier than ever, right? So you can get those 150 200 people, put them into a little database, a contact list and send everybody an email. Or better yet, a couple of emails. Right? So what these emails, these first few emails would be is just really catching people up on what you and your family been up to for the last few years and then encouraging them to reach back out and reconnect with you. So makes sense, you, guys. So have a personal message first and then have some interaction with people. So if you send that out to 150 200 people, chances are you’re going to get 25, 30, 40, 50, 60 responses back to that. And that’s really where the capital is going to lie further down the road. Right. So I have that personal connection first and then we start talking business.

Sandy Mackay [00:35:27] No kitchen, no pitching on email one.

Dave Dubeau [00:35:30] Definitely not. No, no. Avoid the pitching for a little while right now.

Rob Break [00:35:34] So just keep pictures of the kids. Yeah. Know I. Yeah.

Dave Dubeau [00:35:40] Yeah. What works really well? Are you guys? Is this what we’re doing right now? VIDEO is absolutely amazing. So if you do have a short little two- or three-minute video saying, hey, you know what a day chances are, it’s been a while since we reconnected, but I take a moment to catch you up on what I’ve been up to. So the wife, the family, the kids, whatever is going on. Tell them a little bit about that. And then at the end, say, hey, well, that’s what I’ve been up to, but enough about me. How about you? How are you doing? Please hit reply to this email. And let’s catch up. I’d really love to hear from you. Send that out to a couple of hundred people. You’re going to get responses back. You’re definitely getting your response back. And then have a little bit of back and forth with those people. That makes sense, guys.

Rob Break [00:36:22] Mm hmm. Totally.

Sandy Mackay [00:36:25] Yeah, I love it. And anything else beyond that? That’s your first step, right?

Dave Dubeau [00:36:33] Yeah, that’s the first step. Next step is some of those people will probably be interested in finding out a little bit more about what you’re up to. Because what I do is that first message is actually three steps. Couple of first couple are just warm and fuzzy. The third step is where I give people a heads up that I’m going to start switching gears and talking about real estate, right? So I give them the heads up the room. I’m going to start doing the marketing side of things. Does that make sense, you guys? And then with these kind of things, we always tell people, hey, if you’re not interested, that’s OK. You can always unsubscribe. You can always opt out. So when we do that. Chances are you can get some people showing some interest. So you want to make sure that you’ve got a presentation ready to go or when somebody says, hey, let me see what you’re what you’re talking about. And I know about you guys. But you know, I’ve heard you should be able to explain your deals on the back of a napkin or get a yellow legal pad and a Sharpie and kind of explain it. I don’t think it works well that way. I think you really need to have a good slideshow presentation like a PowerPoint, something like that that you can just put about your laptop and walk people through and show them exactly what you’re doing, the kind of deals you’re doing, the market area that you’re focusing in, who’s part of your power team and really give them a good idea of what it’s all about. Does that make sense? So it’s all about creating that presentation.

Rob Break [00:37:54] Well, I like it. I like it. Yeah. So far, so good.

Dave Dubeau [00:37:59] So far so good. I’m glad you like her up. Third one is constant, consistent communication, so it’s all about the marketing, right? So now we got this group of people. Now we got our presentation ready to go. The big mistake I see so many folks making is they get off to a good start and then they fizzle out, right? We were talking about this with podcast the average. You guys have got 103 episodes. You’ve been going for six years. I was reading some of the average podcast, has seven episodes and fizzles out. OK, so it’s all about that consistency. Same thing. With this, we got to be treating our real estate, investing as a business. So we have that marketing. You need to meet state, need to stay top of mind. So the way that we’re able to get people calling us reaching out to us, asking about our deals is constantly stay top of mind with them. So different things for marketing you do offline, you can do online marketing. I really like video logs. I think those are super effective. Electronic newsletters are very effective as well. Easy thing is doing it, at least, you know, ideally a couple of those things. So they’re hearing from you, probably at least a couple of times a month. Does that make sense? You guys

Rob Break [00:39:09] total? It all makes sense so far, Dave.

Sandy Mackay [00:39:11] They’re not going to get you’re not going to get a lot of quick, quick hits right away, right in the first you send out. So consistency is huge. I agree.

Dave Dubeau [00:39:19] Yeah, exactly.

Rob Break [00:39:21] I don’t know. Let’s see if I agree with this next one, though, Dave. I might not agree with the next one. Let’s talk about your gear.

Dave Dubeau [00:39:29] So the next one is all about really. Creating that trust factor, right, because we talked about it in order for somebody to invest 100 grand with you. Chances are they need to know you’re like you and. Trust you. Exactly. So the beautiful thing about focusing on these people that you got your preexisting relationship with is we got two out of the three already taken care of. And I about you, but you know, me, myself and Meatloaf say two out of three ain’t bad, right? So it’s two out of three. They already know us; they already like us. Now we just need you to work on that trust factor, getting them to trust us as a legitimate real estate authority, right? As somebody or a legitimate real estate expert.

Rob Break [00:40:14] Mm hmm.

Dave Dubeau [00:40:15] So that’s a lot easier than most people think because most people think, you know, especially if they’re hanging around with guys like you and they’re attending these big club meetings where there’s people rocking and rolling and doing gazillions of deals to say, well, Dave, I’ve only done one or two or three deals or whatever it is. How can I be seen as an expert? Well, the cool thing is, are you guys are you guys familiar with Peter Kinch? Peter Kent wrote a book, The Real Estate Action Plan, he was part of the range,

Rob Break [00:40:48] think he actually has a does he have a podcast too or am I wrong about that?

Dave Dubeau [00:40:52] He might. He might be. Peter Kenyon was like one of the big mortgage brokers for real estate investors for many, many years, and he was talking to our bigwig. I think it was generous, generous, and they were saying that they did a study and they found that only five percent of Canadians have ever purchased an investment property. Your own home doesn’t count, but only five percent of Canadians have ever purchased a revenue property of some sort. Now, I know that’s hard for us to fathom because we’re hanging around with real estate guys all the time, so it just seems normal us. But for the average civilian, they don’t have the faintest clue about buying a revenue property. Does that make sense? And that’s where the vast majority of the people in most people’s sphere of influence lie. So 95 percent, you know, out of that 200 people. Basically, one hundred and ninety of them. Probably have never purchased a revenue property. So if you’ve even got one or two or three deals under your belt compared to them, you are an expert. Does that make sense, you guys?

Rob Break [00:42:01] Yeah, it does. It’s good. I do agree with this on two

Dave Dubeau [00:42:06] different ways to be seen as an expert authority. What you guys are doing is absolutely phenomenal. Like your podcast six years, you’re already you’re seen as what you are, which are credible real estate authorities. So what can the average person do if they don’t have six years to build up a podcast following lots of things? First thing is how you dress. So if I’m going to go out and meet with a prospective investor, I’m going to suggest you want to dress at least business casual. So for a guy, that means I would suggest that you wear a blazer, nice slacks, nice shirt, nice shoes. The whole bit looks sharp, even if you’re meeting with your Aunt Edna, who’s known you since day one and you should change your diapers. Doesn’t matter. And the reason is because that that shows and Edna some respect. And it also, even if she might buy you a little bit, it gets some respect from her as well. So how you dress is important. Next thing is how you speak. So you want to be able to succinctly simply explain your strategy and your market. So you want to be able to explain how your strategy works and why you’ve got such really good real estate market and you want to be able to explain it at a level that I would say at 11- or 12-year-old child would understand. Not saying that your investors are dumb, but if you can explain it at that level, it’s easy for them to get. Does that make sense, you guys?

Rob Break [00:43:29] Mm hmm. Yeah.

Dave Dubeau [00:43:31] And then there’s all sorts of other things that you can do. You can be interviewed on a podcast like you guys do all the time. You can write books, you can do your own podcast or many, many different ways to help augment your, your credibility and your authority. But there are a couple of easy ways to get started.

Rob Break [00:43:49] Some examples are like What’s the last one?

Dave Dubeau [00:43:52] Last but not least, you’ll love this one, Rob, because this this comes into play in so many businesses, but real estate investors don’t pay enough attention to that. And that’s the whole power of testimonials and referrals. So once you’ve got an investor or two under your belt and things are going well and they’re happy with how it’s going, it’s so much easier to start what I call the snowball effect. Mm hmm. Really good testimonials and referrals from your current investors, right? Because chances are birds of a feather flock together, the people that you’re working with no other people who could probably invest with you as well.

Rob Break [00:44:30] Makes sense. I like it because it’s almost like Autopilot. Exactly. So that’s a little bit easier than the other steps. Once you get to, they’re sort of laughing.

Dave Dubeau [00:44:41] Well, yeah, except there are ways that a lot of people really kind of rest on their laurels here. Hmm. There are ways to proactively go out and get these. In fact, I’ve got a way that that where you can get two for one, you can get a testimonial, a good video testimonial and referrals at the same time. So that’s something that works really well. So I encourage people to proactively ask for referrals and testimonials

Sandy Mackay [00:45:08] usually come in just randomly and they don’t come in and throw. They ask is

Rob Break [00:45:11] right? Yeah, that’s true.

Dave Dubeau [00:45:13] And as we’d like them to do that,

Sandy Mackay [00:45:14] even though people probably do, people like you refer people that they like, they like to give credit to someone who’s helped them. They liked to do those things and they just don’t have time, right? Unless you really you really need to make sure that they do it by asking them, right.

Dave Dubeau [00:45:29] And there’s a right way and a wrong way to ask them for it as well. So, yeah, so it definitely makes a lot of sense.

Sandy Mackay [00:45:35] So is this whole? Is this all in your program? Then this is all part of your money partner formula that you offer people?

Dave Dubeau [00:45:40] Well, I actually don’t offer I don’t offer a program per se. You guys, what I what I do is basically I train people for free if they want to run off and do it themselves. Great. And if they’re looking for help to actually implement this, get this stuff done. That’s what I do.

Rob Break [00:45:58] Dave, sign me up there and I didn’t realize you were just doing this for free. Now what is the incentive for you to do this for free? I mean, clearly, if you’ve come up with this whole system here, you could. You could. You know what I understand, like we all want to share, like that’s what me and say to do here. We don’t ask for any money for this podcast, so I get it. But I mean, this is a lot of your in a lot of your time, I’m sure is taken up by people that want to get this free information. And now I’m sure that you’re going to get some calls from this. So I didn’t I actually had no idea that you were giving it away for free. I thought this was a system that you that you offered to people that could, you know, that could help your business and whatnot.

Dave Dubeau [00:46:36] So, yeah, so I’ve got kind of a different there, you guys. So basically what I do is I show people how all of this works and then if they’re looking for help to actually do it, I’ve got. I guess you could kind of call it a marketing agency where we help people to actually implement everything that I show them.

Rob Break [00:46:56] I see.

Dave Dubeau [00:46:57] So that’s the business side of things for myself. But if people want to kind of get a better idea of how the whole process works and see it more visually, they can check out a little presentation I put together about that at investor attraction demo dot com.

Rob Break [00:47:13] I see. So this is the free crack. Then you got you got to pay for the for the rest

Dave Dubeau [00:47:19] or the done for you services and for you.

Rob Break [00:47:21] Got it. Yeah, no, no. That’s good. That’s good. No. Because. Absolutely. Like something like this is invaluable, especially if you’re going to teach like, I mean, well, they’re all important. But I think number two, you know, putting together something to show potential investors, that’s probably one of the most important things because, like you said, all the contacts are in your phone. You’ve just got to know what to give them. Right. So that’s a really important step.

Dave Dubeau [00:47:50] So many people are stuck with that. They’re so freaked out about that. They’ve never done presentations. They think they need to be a super slick presenter, or they think they need to be salesy or something like that. And nothing could be further from the truth. In fact, which can work against you. It’s much better that you come across as yourself, as your genuine self and have what I call a friendly, grown-up conversation. So you just showing people what you’ve got? And here’s a kind of the counterintuitive thing. Here’s a big mistake I see a lot of people doing. They just show the good stuff. But when you show the good stuff and you show the potential pitfalls and how you minimize those potential pitfalls, it’s so much more powerful. Right? Because people’s voice meters calmed down when you show them what the downside of a deal could be and to be perfectly frank. Right. There’s always a downside to everything. And it’s not all sunshine and flowers. You guys have been around the block a few times. You know that not every single real estate deal ever goes completely according to plan. That’s just life, right? So if you tell people that up front, it just it generates so much more trust and actually helps you to get more investor partners on board.

Sandy Mackay [00:49:01] I was going to Segway into the challenges there. I don’t know if you’re going to have the same thought, but I was,

Rob Break [00:49:06] we think alike. I think you are right.

Sandy Mackay [00:49:08] It sounded like it sounded like he had some challenges. Like everyone has had some challenges over the years. Definitely. Not every real estate deal is perfect. Never. I don’t remember one ever. That was totally 100 percent smooth. So tell us about the challenges you’ve encountered over the years and how you’ve overcome either that one challenge or if you have a couple of maybe.

Dave Dubeau [00:49:28] Yeah. Well, you know what? That’s one of the challenges with rent, the rent own strategy, typical rent own strategy. It’s great when the market’s going up, not so great when the market goes flat or goes down. Right? It’s an appreciation. It’s completely an appreciation-based strategy, right? So I again, I did that for several years and it was great when it was going great. But then we had a hiccup with the market and things slowed right down. So we had a couple of deals where our tenant buyers flaked out, decided not to not to purchase or. More, typically, the bank wouldn’t appraise the house at the pre agreed upon price that we had for it, right? Well, that that causes some challenges. So what causes challenges if you’ve got a two-year deal and now you need to extend it to four years in order for the market to catch up to get where it needs to be for you to sell it for the agreed upon price? Well, now that’s two years longer than your investor partners originally wanted to be on board on this deal. Right? So a big mistake I made back in the day was just showing everybody the sunshine and flowers side of things and not showing what could be some of the pitfalls. And that came to bite me in the butt several times because again, I’d set up these expectations that due to no fault of my own, but to the market I wasn’t able to fulfill. All right. So got some ticked off people that are so again learning through, you know, learning through trial and error is OK. But if even if you can skip that, just learn from somebody else’s dumb mistakes like mine, it’s going to save you so much time and trouble. Right?

Rob Break [00:51:13] That probably goes back to, you know, you don’t know what you don’t know, kind of thing. And how are you supposed to present what challenges might come up if you’re unaware of them, I guess at the time.

Dave Dubeau [00:51:23] Right, right. Well, that’s why it’s important to know that ideally, you’re working with people, you’ve got associates that you’re familiar with who have done these kind of deals, who have been through a few cycles who can point you. You know, everybody looks like a genius when the market’s going up right? But go through a few market cycles. And if you’re still an active real estate investor, that’s the kind of person that really knows how the whole game works.

Rob Break [00:51:49] And then on the other side of that rental and thing, you might have a market that’s taking off substantially and now you’re leaving a bunch of money on the table on the other side of the deal.

Dave Dubeau [00:51:59] Happened to me as well.

Rob Break [00:52:00] Yeah. Well, thanks for that. About do a rental anymore.

Dave Dubeau [00:52:04] Maybe they’ve got apartment buildings? Yeah.

Sandy Mackay [00:52:09] Are you doing like Kamloops? Is that where is that we focus? Or is there another market?

Dave Dubeau [00:52:13] Yeah. What I do these days, Sandy, is I partner up with active partners who are boots on the ground kind of people. I help raise capital for the deals. I get a piece of the equity ownership stake in the in the property. So we’ve got properties in in Ontario, outside of Ottawa as well as northern Alberta as well.

Sandy Mackay [00:52:34] OK, I was I was suspecting there’s not a ton of those in Kamloops.

Dave Dubeau [00:52:38] There’s some cap rates. Just don’t seem to make too much sense right now.

Rob Break [00:52:42] It’s they probably don’t come up for sale too often either. I would not.

Dave Dubeau [00:52:47] So again, I’m focusing on markets where I’ve got active partners.

Rob Break [00:52:51] Okay. All right now, if people wanted to learn about that, how did they find the money part of formula?

Dave Dubeau [00:53:00] OK. Give your listeners a freebie. You guys OK with that.

Rob Break [00:53:04] We love freebies, not freebies. You’ve already given us so many freebies, though today.

Dave Dubeau [00:53:08] All right. Well, it’s all I got. I’ve got the book money partner formula PDF version. They can get this just by going to my website, which can be enough the same as my name. So it’s Dave Dubbo dot com duby, a EW.com, Dave Dubbo dot com, and they can just click on there and get a free PDF version of that money part and formula. And again, that kind of walks them through the whole process. It shows them how they could reach out to me if they want some one-on-one help about that or again, they can. They can watch the whole presentation of their visual walk through the whole process at that investor attraction demo dotcom website.

Rob Break [00:53:50] Perfect. Very cool. Would you suggest that’s the best way for people to get in touch with you then?

Dave Dubeau [00:53:55] Yeah, either. One. Dave Dabholkar That’s my drive. That’s my main website.

Rob Break [00:54:00] OK.

Dave Dubeau [00:54:01] It’s a good place to start,

Rob Break [00:54:02] and that would be the place where they can get the book.

Dave Dubeau [00:54:04] That’s where they can get the book.

Rob Break [00:54:06] Well, everyone, if you go over to the show notes, the link to Dave’s website will be in there. And the other one that he mentioned as well will be in there, and any other links that Dave sends over to us will be also there. So anyone who wants to reach out to, I’m sure you can do that through your favorite media source. Sandy, how can people get in touch with you?

Sandy Mackay [00:54:32] Two eight nine three eight nine six eight four six or sandy at Mackay Realty Network AECOM.

Rob Break [00:54:39] You can reach me at Rob, Mr. Breakthrough. Okay, we can talk about all that stuff that Sandy and I were talking about at the beginning of the show. So just reach out to me there if anyone’s interested. Dave, thank you so much for being on the show today.

Dave Dubeau [00:54:54] My pleasure, gentlemen. Rob Sandy, thank you so much for having me on the show. Real pleasure. And again, congratulations. You guys are just rocking it with your podcast. I hope I can be as good of a podcast host as you are when I grow up.

Rob Break [00:55:10] Oh, Dave mentioned you’ve got a podcast mentioned not to.

Dave Dubeau [00:55:13] Yeah, I interviewed your Mar-A-Lago, Rob.

Rob Break [00:55:15] I was on it. It was fun.

Dave Dubeau [00:55:17] Yeah, it’s fun. It’s the property profits podcast, property profits podcast, property profits podcast. Dot com is where you can find those episodes

Rob Break [00:55:28] live a tongue twister. But we got it. OK, perfect that link. Yeah, yeah, that link will be in the show notes as well. Thanks, Dave. Appreciate it and have a good day.

Dave Dubeau [00:55:38] Thanks, you guys.

Rob Break [00:55:39] Thanks, everyone listening. We’ll see you next time. Now.

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