Podcast Transcription

Erwin Szeto [00:00:08] Greetings, everyone. Welcome to another episode of Real Estate Investing Show. And there is literally so much going on in. The world right now, and it often comes back to me practicing gratitude that I am Canadian. If you don’t believe me, ask our friends or ask your friends and family in China, Pakistan, Sri Lanka, Russia, Ukraine and of course, even New Zealand, if you can believe it. New Zealand, a country with a population of only 5 million people, has a higher average house price than we do here in Canada. Hence they’re experiencing massive brain drain. People are leaving the country talent. People are leaving the country, and that’s usually a bad thing for an economy. When smart people, for example, like doctors and leading entrepreneurs, when are taking their talents and their job creation elsewhere. That’s bad for an economy. Hopefully that doesn’t happen here in Dublin, Ireland. Over 100 people waited outside in line. A house for rent. One house. There’s one house for rent. 100 people waited outside to view the house. Thanks to inflation, rising interest rates and the inability to raise rents to match rising costs of living. Thanks to rent control, Ireland serves as a sneak peek into what we may run into as we to operate under rent control. And hopefully this is not a future we have to look forward to in Ontario, Canada. I imagine anywhere else where there’s rent control in remote control provinces with lots of growth like B.C., for example, like Nova Scotia or specifically for Ontario. The Smart Prosperity Institute just produced a report stating that the housing shortage in Ontario is 471,500 units, or 171,500 units is how much the current shortages and 1,034,900 new units are needed to keep up with demand over the next ten years for a total of 1.5 million units. So we need 1.5 million units to be built over the next ten years. Unfortunately, the government also paid for a study to be done and there’s only going to be 700,000 new homes to be built over the same those same ten years. So, again, this is it the supply versus demand? Demand is there for 1.5 million and supply is going to be less than half of that as 700,000 new homes to be built over that those same ten years. Of course, the news really gets worse because if you’ve been following the news and speaking to builders like I do, I understand I’m friends with lots of builders and who are part of builders associations, you’ll know. And also it’s in the news, you know that many projects are being paused, delayed or even canceled. So even less housing, based on the current news, is being built. There’s lots of unknowns going forward. However, here at Island Real Estate, my coaches and I are staying on top of economic data and that’s proven really helpful. If we mentioned a few times on the show, we haven’t had any clients with experiencing closing issues because a lot of things, they just worked out that we did and it’s nothing like we’re seeing out there in the market. For example, we’ve had lawyers on the show who described their regular retail consumer type real estate clients are having all sorts of problems closing on property. Their appraisals are not coming in and they’re not able to close because they don’t have they cannot come up with the down payment necessary to come up with the shortfalls and appraisals since the market has dropped. But anyways, we’re staying on top of things here, and frankly, it’s worked out really well for ourselves and our clients. I’ve mentioned before that we ordered our appraisals on our properties for our refinances back in February, and thankfully that worked out. That timing worked out very well. I’ve also been talking to people like my neighbor who works for a major consumer products company. They distribute and sell many products you have in your home. He specifically works in supply chain management. From what he can tell, the Americans are about four or five months ahead of us in terms of economic terms, as in their consumption is down, they’re buying less. You’ve also been well, if you follow, I like to read articles on corporate earnings. So, for example, Wal-Mart Mart, their sales are down as well. People are consuming less. Instead of the article, should the CEO mentioned how they’re seeing sales down on, for example, for gallon jugs of milk are being replaced by sales of two gallon jugs and milk. So people are downsizing what they’re buying. So the numbers don’t look good. The Americans are likely to 4 to 5 months ahead of us economically. And the theory would be is because they only like half locked down versus Canada as a whole country locked down pretty good. So they’ve had they’ve had more freedoms. So Canadians are still consuming heavily right now. As my own experience, I was just in Blue Mountain Village and up north, a very popular recreational resort style area and north of Toronto. And it was absolutely packed. The parking lot was packed, the hotels were packed. The restaurants were packed. The bars were packed. So my point is, is that because Canadians were locked down, we’re taking that. We’re taking our time now to enjoy our summer, enjoy our freedom. And then my guess is in a few months’ time, we’ll start seeing Kenyans start consuming less because stuff is expensive. You might start seeing some pain in terms of job losses, for example, for it just announced 3000 job cuts this week. I’d mostly be in North America, Canada, USA. And I don’t see how we as Canadians avoid a similar fate. But please understand, I’m no fear monger. I do fear in the short term, but I’m bullish in the long term for real estate and investing in my stocks and my crypto. I know most all of its down this year, hence my team and I will be summarizing all of our research and how we and our clients are taking action on this current market. Some are selling, some are buying. We’ll be sharing what deals look like in this market. And. To prepare and also how doing what we’re doing to prepare to weather the current storms. And we’ll share our own predictions for interest rates and where the market will be going in the short term at our September 17th meeting. This will be your first time in meetings since our summer break, so we have tons to share on what income properties are selling for, why certain properties are taking longer to sell, what the rental market is doing. Hence this is a meeting you do not want to miss. Will be trying through the clickbait in the piece, by sharing what we’re doing with our own money and what our clients are doing their money. And that’s all on September 17th at our island real estate office here in Oakville, same place, same time. It’s a Saturday morning, so traffic’s being nil. Doors are open at 830. There is no online option, so you do not want to miss it. Understand that this market is the wildest I’ve seen and I predicted early on that we could easily see 2017 happen all over again. But 2020 is making 2017 look like a speed bump in the road. I think 2829 is a close comparison to what we’re seeing. I don’t think it will be as bad based on what I’m reading from the top economists in the world and top economists in Canada. And to be honest, we invested back then. We did quite well. We did more than survive this cycle. And I think we’ll do more and survive the cycle as well. On a personal side, I’m now volunteering at our local Brazilian Jiu Jitsu Club. During my kids class. I must have A.D.D. as I have issues sitting around and watching classes. Then the problem got worse as we parents were asked to wait outside them out of class area. Yeah. So what’s a poor, poor parent to do? A poor parent such as I where he spends too much time on their phone. So what I decide to do is I bought a uniform and I volunteer. So now I’m an actress of the hands and eyes and ears to make sure the kids don’t hurt themselves. Plus, I get to observe the instruction of close and provide some pointers to the kids. The best part is I’m learning the curriculum so I can practice the kids outside of class and have more in common with them and spend more time with kids. As I honestly working off offices, the kids seemed to dig it so far, so I guess I’ll keep this up until they’re sick of me. Oh, by the way, our September 17th meet up link is in the show notes. If you’re on our emails or you follow me on social media, you’ll see the link there to purchase tickets. Clients, of course you go free until this week’s show. We have with us a young rock star and just stanza who was 24 when we met 24 years old, we met and the owner of the title of youngest client I’ve ever worked with, his young hustler, who, when I met him, he had three jobs. He is an architect by trade, so that was his day job. Bartender for evenings and weekends and a landscaper with the remaining time. He wasn’t sleeping. That’s thanks to all that hustle in saving money by living home with his parents. Young Joe saved up enough money for his first investment property. That was back in 2019, Januar 2019. And now he has five investment properties. Crazy enough he’s made his first million is actually about a year ago he crossed the million dollar mark in terms of increase to his net worth. Hence he’s also the owner of the title of the youngest of our 45 self-made real estate investor millionaires at the age of 28. Actually, I think I was 27 at the time anyways. So in challenge assemble will sharpen our pencils and figure out, if you like, the age of Joe. Joe is here today along with Coach, his coach Tammy from the air and real estate team, my team to give us an update on his expansion project, how that went in Sudbury when he was looking for diversification and his lessons from it not going so great. But, you know, Joe’s smart and talented and he bounced back pretty well. He got a jump of an expired listing in Hamilton that coach Tammy helped Joe with that was eventually priced well in our market because the property fell. So it was rough. It found a hole in the roof that can fit a soccer ball through and a challenging tenant with previous orders against them from the landlord tenant board. We talked numbers on this most recent and on this most recent deal. So hyper pending calculators ready or email us at any of you off that’s here and we can send you Coach Tammy’s draft numbers. Please enjoy the show. Joseph. What year did we meet?

Joseph Costanza [00:10:06] 2019. 2019.

Erwin Szeto [00:10:07] And you were how old?

Joseph Costanza [00:10:08] 24 when we met.

Erwin Szeto [00:10:10] What? 23. Then turn 24 once we…

Joseph Costanza [00:10:12] No I was 24. And then I turned 25.

Erwin Szeto [00:10:14] Okay.

Tammy DiTomaso [00:10:14] So you met January 2019?

Joseph Costanza [00:10:16] Yes. Yes. Yeah. Right after New Year’s, that whatever that first event that you put on.

Erwin Szeto [00:10:21] That’s big event.

Tammy DiTomaso [00:10:22] That was the one on the Hill.

Erwin Szeto [00:10:24] On Allen for referring you. Yes. Yes. But John Allen.

Joseph Costanza [00:10:29] I was going to like networking events and stuff like that.

Erwin Szeto [00:10:32] Prior a chance to live in London.

Joseph Costanza [00:10:34] He was doing a networking event in Toronto downtown. Luke Bryan. Byron Yes, I can see how you said last name. I can always mess it up.

Joseph Costanza [00:10:43] European doesn’t mean anything. I have a. Can’t in are for my life. So it doesn’t matter.

Erwin Szeto [00:10:51] How’s your Italian?

Joseph Costanza [00:10:52] A horrible. Absolutely horrible. My mom is very upset with me.

Erwin Szeto [00:10:56] Is your Italian better than hers?

Joseph Costanza [00:10:57] Yeah, probably mine.

Tammy DiTomaso [00:10:59] Probably better than yours. And I just married. I was married one.

Erwin Szeto [00:11:02] Hopefully the show is going off the rails. Why were you going to Wales? To meet ups.

Joseph Costanza [00:11:07] But you’re here.

Erwin Szeto [00:11:08] You, you, you. At the time you had a career in your training. So you’re already making career wise as much money as you could.

Joseph Costanza [00:11:16] Yes, but I think I was kind of looking to I don’t really know what I was looking for. To be honest with you, I had a few things that I wanted to I had a lot of money saved up from.

Erwin Szeto [00:11:26] Wasn’t that much.

Joseph Costanza [00:11:27] Money. It wasn’t more than to.

Erwin Szeto [00:11:28] Me was a lot of money.

Joseph Costanza [00:11:29] To me it was a lot of money for most 24 or 23 year olds. It was it was a lot of money. Yeah.

Erwin Szeto [00:11:35] $80,000.

Joseph Costanza [00:11:36] Yes. That I worked very hard for.

Erwin Szeto [00:11:38] Like two year credit cards now.

Joseph Costanza [00:11:39] Yes.

Erwin Szeto [00:11:39] Really different now.

Joseph Costanza [00:11:40] Yeah, that’s fair.

Erwin Szeto [00:11:41] Yes, it was a lot of money. Yeah. So I saving at.

Joseph Costanza [00:11:43] The time it was my life savings. Yes.

Erwin Szeto [00:11:46] That you blood and sweat before. Yes. Since you were 16.

Joseph Costanza [00:11:49] No. Like more like right after. More like after school kind of thing. But like still like working two or three job study for it.

Erwin Szeto [00:11:56] You basically never had any debt in your life.

Joseph Costanza [00:11:57] No.

Erwin Szeto [00:11:58] Until oh g until real.

Joseph Costanza [00:12:01] Tell you about us. Yeah. Sorry. It’s all downhill from there. You see your parents. Oh yeah.

Erwin Szeto [00:12:08] But they got you get till your 24th, you get debt free and then you met us.

Joseph Costanza [00:12:12] Exactly. Exactly.

Joseph Costanza [00:12:15] Yeah. No, I just wanted to can, I wanted a little bit more for myself. I wanted to have a little bit more ownership of something. And I think the initial plan like in all honesty, the initial plan was to take the 80,000, buy a Tesla investment. Yes.

Erwin Szeto [00:12:30] Tesla shares, right?

Joseph Costanza [00:12:31] No. Tesla, Tesla car. Oh, okay. But I don’t know what changed it. I think I had listened to a few episodes of Bigger Pockets or something along those lines, and that got me hooked.

Erwin Szeto [00:12:42] Not my show.

Joseph Costanza [00:12:43] No, I’m sorry.

Joseph Costanza [00:12:44] Sorry.

Joseph Costanza [00:12:45] I found you later on.

Erwin Szeto [00:12:46] And I’m sure it.

Joseph Costanza [00:12:47] All it’s done here. Yeah.

Joseph Costanza [00:12:50] And then that kind of got me into it now. Rich Dad. Poor dad. My kind of dad went through pretty traumatic kind of heart attack experience. And then that kind of shifted from there. It was just kind of like, I need to do something about this. And that was kind of like November of 2018. And then I started going to like a networking event ever, every other week. And then I stumbled on to I went from there.

Erwin Szeto [00:13:15] It’s like you’re in your yard or your father’s health scare.

Joseph Costanza [00:13:19] Yes. Heart attack.

Erwin Szeto [00:13:21] Why was that a trigger for you, too?

Joseph Costanza [00:13:23] I think simultaneously, as he was having as he had the heart attack, I was like really deep into the weeds of reading Rich Dad, Poor Dad and cash flow are knockouts, not cash flow drive, but cash flow quadrant and all those other books and kind of still listening to real estate podcast and stuff like that. And so I think it just like the connection of the two and just that was just that I was just, I was hooked after that. And it’s always something I’ve always really wanted to do too. Like, it’s always really like this, like not necessarily in the investment side, but just like real estate in general has also been, has always been like something that really intrigued me. So it kind of took over from there.

Erwin Szeto [00:14:01] Was kind of because it’s not uncommon. We’ve actually had a lot of people on a show where a major life event, usually with their parents that got them really going like really cranked the crank up the temperature on their want to hustle to do more quickly was it just like you realize like life is short.

Joseph Costanza [00:14:17] I think a definitely a little bit of that. I, I really don’t know. I never really I didn’t really take much time to think about it. It was just like I’ve always been someone that was just like, if this one needs to get done, I do it. I don’t really have any second thoughts about it. I just I’ll learn as I go. So I really didn’t learn take time to learn that much about real estate for just jumping in. Had the money too. It’s not like I was like I had to save up that much more.

Erwin Szeto [00:14:40] Didn’t have all the money.

Joseph Costanza [00:14:42] I didn’t have all the money.

Erwin Szeto [00:14:43] But as you didn’t just have not have all the answers. You didn’t have all the money out.

Joseph Costanza [00:14:48] Yeah, yeah.

Joseph Costanza [00:14:49] But I think I had been exposed to real estate at a younger age through a series of different kind of people in my life. And that kind of helped to kind of make the big jump into it. Yeah.

Erwin Szeto [00:15:02] Yeah. The Finding the Money piece you actually detailed more than just a year ago, the last episode. But unfortunately for you, we’ve gained about four listeners or like both from 13 investors now to 17. So we need to we need to spend some time to bring the other four listeners, ours.

Joseph Costanza [00:15:17] Listeners up to speed. Got it.

Erwin Szeto [00:15:19] Okay, cool. We did that for them. So if that was worth your time for listeners, I’ll be appreciate that. We brought in Joe just to we spent some time to bring you up to speed and if you’re interested, go back and listen to the episode with George Costanza. This is your third time.

Joseph Costanza [00:15:33] Our fourth time.

Erwin Szeto [00:15:34] Fourth time.

Joseph Costanza [00:15:35] Yeah. We’ve done a yearly update every year since I started.

Joseph Costanza [00:15:39] Okay.

Erwin Szeto [00:15:39] So what’s keeping you busy these days?

Joseph Costanza [00:15:42] Well, in the next few weeks, I’m going to Greece. So that’s really been kind of I’m doing a little backpacking trip for myself in Greece. Just I needed a vacation. Yeah. Oh, wow. I needed something just for me. I’ve really spent like the last four years, really haven’t gone on anything major a road trip here or there, but like nothing overseas or anything like that. So I just. I decided it was time to, like, trip myself. Besides that, I’ve been in the last kind of 5 to 6 months, been liquidating some assets and whether it’s in crypto or in or real estate to kind of make room for financial flexibility for the market right now and to kind of start taking advantage of the market in the next few months is kind of my projection. I mean, everyone’s different, but that’s kind of what I’m feeling out right now.

Erwin Szeto [00:16:31] So what did you sell off real estate wise?

Joseph Costanza [00:16:35] I sold.

Erwin Szeto [00:16:35] Earth. I know we haven’t sold anything in Hamilton.

Joseph Costanza [00:16:37] I have not sold anything in Hamilton.

Joseph Costanza [00:16:39] You can confirm that.

Joseph Costanza [00:16:44] We’ve actually recently purchased something in Hamilton, but I sold off a property that I purchased in Sudbury that was just a bunch of stuff that was going wrong with it. And so I decided my money was better use somewhere else than in something that wasn’t making the money or wasn’t didn’t have any sort of time horizon to start making money. And so it just made sense to kind of liquidate and move on to transition those assets into something else.

Erwin Szeto [00:17:09] So what got you into Sudbury was the month but is about 12 months ago. What when do you get inside?

Joseph Costanza [00:17:16] When did I get in? It must have been March. It must have been. No, it was February of last year.

Erwin Szeto [00:17:23] February of 2021.

Joseph Costanza [00:17:25] Yeah.

Erwin Szeto [00:17:25] Why were you going to Sudbury?

Joseph Costanza [00:17:27] A series of reasons. I actually really like the city. I think it’s a great place for investments, but I think the approach I had was wrong. But that’s a different conversation. I went there just more for the from the cash flow perspective. Hamilton wasn’t cash flowing the way I wanted it to.

Erwin Szeto [00:17:42] In cash flow like anyone wants it there.

Joseph Costanza [00:17:44] That’s the.

Erwin Szeto [00:17:44] More. More is always the answer. Yeah. How much cash would you like? More.

Joseph Costanza [00:17:50] That’s fair. That’s fair.

Joseph Costanza [00:17:52] No, it just wasn’t cash flowing in the way I wanted it to. And I wasn’t. I was trying to find a market that would cash flow a little better for me. And I liked the kind of future prospects of Sudbury with green energy becoming a major player in the space and having so much nickel up there and whatnot. So it was I think it was more of an eco-play, to be honest with you, than it was a real estate play.

Erwin Szeto [00:18:14] Which isn’t wrong.

Joseph Costanza [00:18:15] No, there was nothing wrong with that. I actually really like the city. Like I still have a property there right now. But the it’s just the renovation that I was doing there wasn’t really going the way I wanted to. And so I just decided that it was time to kind of cut ties with it.

Erwin Szeto [00:18:28] So this is a trip about real estate investing. It’s not always real roses, is it?

Joseph Costanza [00:18:33] No, it’s not.

Erwin Szeto [00:18:34] So where did you find this contractor that didn’t go that went sideways.

Joseph Costanza [00:18:37] Found a through the.

Erwin Szeto [00:18:38] Causes and legal troubles, didn’t they?

Joseph Costanza [00:18:40] Oh, yes. We’re still I’m still dealing with the legal troubles, actually, right now. So. Yeah. Not fun. Do not recommend it. But yeah, I found him through the network kind of through. Through people that I’ve met down there.

Joseph Costanza [00:18:55] They’re up there. Oh, sure.

Joseph Costanza [00:18:57] Um, since found out that there was people kind of certain connections that I didn’t make at the time, that kind of may have changed my opinion about hiring a certain individual or a certain company. But nonetheless, I try to look at it more like a like a lesson rather than a mistake. Right. And so I’ve been really over the last probably the last, I’d say 5 to 6 months and really kind of analyze it since we’ve kind of since I decided to sell it. Really analyzing what mistakes that I make and how do I avoid them and how do I kind of improve my process going forward, whether it’s in the hiring process or in the vetting process and or how do I really kind of iron out and don’t have these essentially these issues that came up from this one guy? And it seems like it was just one thing after another with him. And that was just a complete fault of my own for maybe not vetting them properly.

Erwin Szeto [00:19:51] Yeah, there’s a lot there, though. Yeah, that’s great responsibility. Part of taming I do is we also take responsibility for referrals we make. I know, I know. I can think back to one contractor that’s had legal issues with our clients. And I’m we’re getting on the phone with him and yelling at him. Very. You’ll never. Yeah, it was pretty. I’ve never I almost have.

Joseph Costanza [00:20:12] Never seen you know.

Erwin Szeto [00:20:14] I’ve pretty much never yelled in a business transaction, in a business relationship. Right. I’ve had issues with other realtors and stuff like that and people on my team, but still professional because I still need things to progress right now. We still need to keep a professional. Yeah, that Jeff guy, I yelled at him. Good. And he just lied to you on everything.

Joseph Costanza [00:20:35] So. Yeah.

Erwin Szeto [00:20:36] Yeah. So did the people that. That the folks that made the referral to you, to the general contractor, did they, did you have an escalation point?

Joseph Costanza [00:20:42] Did I have an escalation point?

Erwin Szeto [00:20:43] So I come from corporate world. I work for Big Blue for seven years. So if someone in the company, if I’m working someone in the company and they’re not doing what they said they’re supposed to do, I go with their boss. That’s just how it works in corporate. Right. Like from when we and Tammy Nemec referrals, we’re not their boss, but we’re often their number one referral source. So there’s some accountability there. We have some leverage in the relationship. So if our client’s not happy, then we make the phone call and let them know we’re not happy that our client’s unhappy. Mm hmm. Right. And then they know, because of our business relationship, we’re basically they don’t have a marketing budget because of us. Right. They don’t have to go find clients because we were making the referrals. We bring them clients. So if they want that strong, steady stream of clients to continue, you have to make my client happy. And that’s often not hard. We’ve had many folks come to us because they like working with our clients. So my question is, was there is there an escalation process? There is with us. There absolutely is in there.

Joseph Costanza [00:21:37] Yeah, there definitely is. I mean, like, even when I have issues if I have issues with a renovation that I’m doing in Hamilton, 99% of the time it’s coming from you or someone else that is in the group. And it just in through conversation, like we’ll call each other, talk to each other, and it’s like, Oh, what’s like what’s going on with this property? All this going on, not really happy with this, but we’ll get there and then all of a sudden that problem’s fixed and I call Tammy. I’m like, What? What did you say? Like, why are you what’s going on? Why are you getting involved? But it’s just it’s nice because it was like it was always like there was someone there kind of watching out to make sure that everything was going smoothly besides just me. I didn’t have that same experience there. And not to say that there was anything particularly wrong with it, I just didn’t have that. I think coming from an experience here with the group that you’ve put together where everyone’s kind of family and everyone kind of works together to help each other out there, I felt it was a little bit loner wolf.

Erwin Szeto [00:22:33] More basic.

Joseph Costanza [00:22:34] Yeah, yeah, yeah. Just it wasn’t the network that was set up that is set here. And so I think just through a fault of my own, not assuming that the process would be very similar, I didn’t do probably a well enough job kind of understanding what needed to be done at the time. All right.

Erwin Szeto [00:22:54] But and you would your experiences and different the most.

Joseph Costanza [00:22:56] You know I would imagine most people have a similar experience if they’ve had a contract a relationship go south.

Erwin Szeto [00:23:03] Like most realtors offers, offer basic services, put you on a search, they can put you showing appointments, open like boxes, you know, ask you if you like the property or not. Right. Prepare all the paperwork and stuff like. You know, it’s just for Tammy and I, we this is how we’d like to be service. As realtors were paid a lot of money. Mm hmm. Right. So I think a high standard of care is appropriate, including yelling at your contractor if we have to kill him, threatening their business.

Tammy DiTomaso [00:23:31] You know what, though? Even the vetting process is it’s can change. And you have to roll with a little bit, too, because, you know, even the contractor that we had where things had went south, we had multiple people working with that person who had success as well. So it was really hard to know and sometimes those things happen. So I think a big thing is to know when to recognize it and when things need to be addressed and fixed or walked away or that kind of stuff, which, you know, you did afterwards. I think that’s important, too. And to know that it’s okay to walk away sometimes from things as well, that’s a failure is it’s yeah.

Joseph Costanza [00:24:04] I think that was that was probably the biggest challenge for me was walking away not because it wasn’t a smart financial decision because I made money on the on the sale. It’s not like I didn’t make money on the sale. Even though we were only halfway through the renovation. It was I think there were a lot of it was there was a lot of ego involved. I was really kind of caught up in what is my image and what does it look like if I quote unquote, fail? Yeah, and that held me back. So these issues were coming up back in November. And I realize them we closed in August. Renovation started mid-August. And by the time November hit, I had kind of taken over like a month away. My brother’s wedding was in October and I hadn’t really gone up for like probably about five weeks. And then I started going up pretty consistently in November and there was no progress made since.

Erwin Szeto [00:24:48] Oh.

Joseph Costanza [00:24:49] Mid-September. And so I was going up every single week and no progress was being made every week. I mean like maybe one thing here or there, but like in all honesty, like I do more on weekends at my property than this guy did in the whole week.

Erwin Szeto [00:25:03] And they have a crew.

Joseph Costanza [00:25:04] And they he has a he has a whole crew. Exactly. And that’s his only job. Yeah.

Erwin Szeto [00:25:08] So and that’s how they make a living if that’s not how you make a living.

Joseph Costanza [00:25:11] Yeah.

Joseph Costanza [00:25:12] Right. And so I think I kind of got caught up for probably about 2 to 3 months not wanting to sell more from an ego standpoint. I wanted to a lot of it was I wanted to push through for myself. I wanted to kind of overcome the obstacle. But the thought that was rolling through my head is maybe it’s better to sell, maybe it is a good time to sell. And I was really battling with it like I was researching prices. What could I get for the property? What would be what would be my exit? How much kind of leeway do I have before I start losing money on this deal? And a lot of not wanting to sell was because I didn’t know. I was worried about how people would see me. And then I think I think it could have been a conversation that we had over the phone at one point. I think you mentioned it’s like you’re like you mentioned something about it’s okay to make mistakes. We are the ones. Yeah, exactly. But that too. And it’s okay to kind of let go if something’s not working out.

Erwin Szeto [00:26:14] Like my crypto stocks. I wonder if I feel like what you’re talking about. Like, when do I like.

Joseph Costanza [00:26:20] It’s lovely. Red chili go. No, sorry. I know, I.

Joseph Costanza [00:26:26] Know, I know. And I sold some.

Joseph Costanza [00:26:27] Crypto to back in February but.

Joseph Costanza [00:26:30] Yeah. And so I think realizing when I finally came to terms with it’s okay to kind of make a mistake to realize that you’ve maybe made a mistake and that the important thing is how do you adapt from that mistake, how you kind of maneuver when you have made a mistake? And so looking at the property, not really seeing the time horizon when this renovation would be done already firing the contract or having nobody out there, I realized my money was spent better somewhere else. And so keeping it in what I would call a debt asset wasn’t really an option anymore. And so that’s when we kind of started the process of selling it.

Erwin Szeto [00:27:07] And thank goodness she didn’t lose any money.

Joseph Costanza [00:27:08] That’s what I was thinking, too.

Erwin Szeto [00:27:09] As tough as losing my real estate. Yeah, because it’s leveraged again.

Joseph Costanza [00:27:13] Well, that was that was I think that was the biggest fear. I mean, we’ve had the conversation I think I’ve had conversation with both of you guys about that particular situation. We had went to sell it and then two days in.

Erwin Szeto [00:27:24] The market was coming down.

Joseph Costanza [00:27:25] The market was not well at the point when we were selling. It was beginning of March. We just had that huge run with February. I had sold it at a premium price off market, was going to make a good amount on. It wasn’t really upset about it. A day before we closed, he put a lien for basically the full price of the contract that I had already paid him 50% for. And so that kiboshed the deal. And for the next kind of three months, I proceeded to hold the property while the market was falling.

Joseph Costanza [00:27:52] Got.

Joseph Costanza [00:27:53] And we did some legal maneuvers to be able to sell the property and then luckily the same buyer was still interested in buying it. And I said, I’m only selling it to you if we’re selling it for the same price. And they said that’s not a problem. So I lost a little bit in the holding cost and then they got a realtor involved to make sure that they were secure. So I lost more than I would have gained if I had sold it back in February. But all in all, it wasn’t a loss.

Erwin Szeto [00:28:21] Well, how would you rate your stress on this deal?

Joseph Costanza [00:28:23] Oh, very high. Very, very, very high. I think for about 3 to 4 a.m. now, probably since October, from August to April of this year, I don’t think I slept very well down. Yeah, that’s a long time. I’m doing I’m doing a lot.

Joseph Costanza [00:28:38] Better now.

Joseph Costanza [00:28:39] So that’s all that matters.

Erwin Szeto [00:28:40] And how far was it to drive?

Joseph Costanza [00:28:42] Let’s average out 4 hours.

Erwin Szeto [00:28:44] 4 hours each way.

Joseph Costanza [00:28:45] Depends on how you drive. Really? Like three. But if you stop for lunch and stuff like that.

Joseph Costanza [00:28:51] Three each way.

Joseph Costanza [00:28:52] I mind the drive. I think there’s. There’s a lot of young people.

Erwin Szeto [00:28:55] And if you have kids and you’re doing this.

Joseph Costanza [00:28:56] But I think there’s a lot of young people who don’t have a lot that they’ve saved up where their time is not worth as much. And that drive may be worth it for them to go out and buy a cash flowing asset because they may not be able to afford anything in the GTA. And I think that’s fine. I just think you need to approach certain areas with certain strategies.

Erwin Szeto [00:29:16] I guess partner with you, they don’t do everything themselves.

Joseph Costanza [00:29:18] That’s fair. But now.

Joseph Costanza [00:29:22] There’s this.

Erwin Szeto [00:29:22] Whole thing like people are opposed to partnering because I’m like I’ve told I told the family, you know, before the pandemic, for example, I was like, I have a cousin, so they’re brothers. And like, you know, you too can buy like a 4000 square foot house for like under 3 million versus you’re both going to go spend about 1.5 and have way less square footage.

Joseph Costanza [00:29:40] I think a lot of people like the pride of ownership obsession. Something is just theirs.

Erwin Szeto [00:29:45] I have a small ego some days.

Joseph Costanza [00:29:47] But the money has to be cheap. Yeah, I.

Erwin Szeto [00:29:50] Have. I have no limits.

Joseph Costanza [00:29:52] Yes, I would agree with that.

Erwin Szeto [00:29:56] So it’s actually been it’s been the news lately about how bad rents are, for example. That’s why the only way for an average Canadian to afford rent is to share a two bedroom with somebody or share a two bedroom apartment. Someone. So I don’t see why not understand. To me, there’s no difference why two people. One co-venture on a property. Right. For me, I’d rather co-venture with someone and buy in like Hamilton an hour away versus 4 hours away. Yeah, right. Right. And then I can divide the work down the middle. It doesn’t be Hamilton. It can be. It can be buried. Whatever. Right. My point is, I don’t want drive over an hour. And again, if I partner with someone, we can split up the work you do, the maintenance, I’ll deal with the tenant type stuff, you know, I mean, that kind of vision, we don’t see that among our clients, typically married couples, where one partner deals with a tenant there, one deals with the tools and the maintenance. Right. So I don’t see why two people who aren’t married can’t do that.

Joseph Costanza [00:30:49] Hmm.

Joseph Costanza [00:30:49] I would agree. I don’t have anything to add to that. I think you’ve said it well.

Joseph Costanza [00:30:52] Wow. I know. I know.

Erwin Szeto [00:30:57] Say something new with.

Joseph Costanza [00:30:59] Javy, with Joe.

Tammy DiTomaso [00:31:03] No, it’s true, though. You know, it is good. It is good to be with Joe.

Joseph Costanza [00:31:07] A new term is.

Tammy DiTomaso [00:31:07] A good way to get into the market, though. There is a lot of people or maybe that you’re established or maybe some people can get on title, some people get like it is a good, good way to get in the market for a lot of people would agree, you.

Joseph Costanza [00:31:17] Know.

Tammy DiTomaso [00:31:17] 101st one was a JV as well.

Erwin Szeto [00:31:20] And we have clients like just buddies who got together and bought a house.

Joseph Costanza [00:31:23] And people.

Tammy DiTomaso [00:31:24] Javy later. I mean, but what’s wrong with driving first, too?

Joseph Costanza [00:31:27] Right? Yeah.

Erwin Szeto [00:31:28] As long as are hardworking people when you’re hard working, that’s not that hard, hardworking people.

Joseph Costanza [00:31:32] I think it also comes down to what is both parties brings to the table and like sometimes just the typical money. Right. Right. Like the money partner and the working partner or the active partner. That relationship works. But sometimes you also need like it depends on the size of the deal and the type of deal. Like two active partners can be just as beneficial. But yeah, I see no issues with partnering. I’m actively kind of bringing on partners. I’m looking for partners and speaking with people about partnerships all the time. Mm hmm. Yeah.

Erwin Szeto [00:32:00] So the separate properties having a headache?

Joseph Costanza [00:32:04] Yes. Your first one went well. The second one didn’t go so well.

Erwin Szeto [00:32:08] Okay. Okay. And keeping the first one.

Joseph Costanza [00:32:10] It’s. I’m keeping it there for now. A cash flow is fine. I don’t have any headaches. I haven’t driven there in six months.

Erwin Szeto [00:32:18] Is it still there?

Joseph Costanza [00:32:19] It’s. It’s. Yes, it’s still there.

Joseph Costanza [00:32:23] So it’s just if I ever need to liquidate something, it’ll likely be the first one that goes. All right.

Erwin Szeto [00:32:29] So this is February 20, 22. Would you would you liquidate it or do you keep it?

Joseph Costanza [00:32:33] If I knew what the market would have done right now, yeah, I probably would have liquidated it. So I kind of I sold in February, not because the market was at a high. I’d like to say that I’m like, had enough foresight to say, Oh, now’s a great time to sell. The reality is, I was just fed up with property and I sold and I just got lucky enough that I sold when the market was at a high.

Erwin Szeto [00:32:57] I’m surprised the buyer took its toll.

Joseph Costanza [00:33:00] I will not comment, but.

Joseph Costanza [00:33:02] I don’t I don’t know. I don’t know who’s listening. Yes, I don’t know.

Joseph Costanza [00:33:07] 17 people.

Joseph Costanza [00:33:08] I know who includes that.

Erwin Szeto [00:33:10] Give your name is not that go global because there’s enough. Costanza’s out there that that makes you hard to find.

Joseph Costanza [00:33:16] That a compliment or.

Joseph Costanza [00:33:17] Is that.

Erwin Szeto [00:33:18] A separation? Some people just have names that you’re like, you know, I see I met you and like a thing. But when I go to LinkedIn, like Joe Costanza, like, damn, there’s like 40 of you in Toronto. But one of which one that I talk to like that, you know, it’s so your current deal wasn’t the easiest.

Joseph Costanza [00:33:36] But that’s a good point.

Erwin Szeto [00:33:37] There’s a good story to that.

Joseph Costanza [00:33:39] HAMILTON Yeah.

Joseph Costanza [00:33:40] We’re talking about.

Erwin Szeto [00:33:40] Hamilton because not easy deals are often the best deals like My Bless the last ugly house I bought. Moldy basement contractors wouldn’t go in because there’s cockroaches, right? I asbestos not even to I think I’m just shocked the bank my new money on it.

Joseph Costanza [00:33:57] You did a bank financed loan on that.

Erwin Szeto [00:33:59] I got to be lender they be lender called me the day before closings. Like did you know you have asbestos? Did you know you have an oven to wiring, right? Yeah. But I did this for a living.

Joseph Costanza [00:34:10] I can’t believe.

Erwin Szeto [00:34:11] That I still got my mortgage because most lenders will not touch that stuff.

Joseph Costanza [00:34:14] Really? I didn’t know that.

Joseph Costanza [00:34:15] My basement was leaking.

Joseph Costanza [00:34:17] Well, yes, I was in that basement. I know that. Yes, I did the drawings for you on that on that deal.

Erwin Szeto [00:34:24] Wait, did your mother say something about that house?

Joseph Costanza [00:34:26] My mother? Well, yes.

Tammy DiTomaso [00:34:27] She lost faith in Erwin.

Joseph Costanza [00:34:29] Yeah, yeah, yeah, I know, because.

Joseph Costanza [00:34:32] I think I faced time her while I was in the basement with and stupid me no mask on black mold on the wall.

Erwin Szeto [00:34:40] I wasn’t that I just my.

Joseph Costanza [00:34:41] Crazy shit.

Joseph Costanza [00:34:43] They painted over it. It was pretty.

Erwin Szeto [00:34:45] Bad. It was pretty bad.

Joseph Costanza [00:34:46] Yeah, it was pretty bad. I probably shouldn’t have been down there, but I was down there anyway. I’ll find out in 20 years.

Erwin Szeto [00:34:54] But it wasn’t pretty, was it?

Joseph Costanza [00:34:56] No, it was not pretty.

Erwin Szeto [00:34:57] Right. Your mom and never invest in it.

Joseph Costanza [00:34:59] Uh, maybe now, but not then.

Joseph Costanza [00:35:02] She’s. She’s come around. She’s coming around John’s place.

Tammy DiTomaso [00:35:05] I think she’s good now.

Joseph Costanza [00:35:07] She’s. I really pushed your boundaries. Yes.

Erwin Szeto [00:35:10] But yeah, I had to deal with a lot of crap as a student rental too. So that deal with that student rental through the pandemic, I had tens bail. Right. I think to my to 5 to 7 times bailed students.

Joseph Costanza [00:35:20] Yeah.

Erwin Szeto [00:35:21] Yeah. Now it’s all turned around.

Joseph Costanza [00:35:23] Yeah.

Erwin Szeto [00:35:23] Because I’m finding out that rents are now six, $700 a room.

Joseph Costanza [00:35:26] Yeah. Well you have, that’s a, it’s a, it’s also a killer area like you are right beside the school.

Erwin Szeto [00:35:31] But it wasn’t easy, no easy holding this whole time, but I paid 400 grand for it. Now I’ll be in humongous demand come next rental cycle right. Yeah. Because I hear like in the news how, how little rental supply the risk for students right. So yeah payback time but yeah. Hard houses are not easy to finance. You didn’t want to go in the basement. Your mother would probably not let you go in my basement if you. She knew. I think I take my deal over yours, though, because I didn’t have a tenant.

Joseph Costanza [00:36:03] Yeah, I would have taken your deal over. Mine too. Yeah, I think mine was a little bit of a headache. Yeah, yeah.

Joseph Costanza [00:36:09] From day one.

Tammy DiTomaso [00:36:11] Erwin try to buy it off of you half a dozen times.

Joseph Costanza [00:36:13] $5,000. So, you know, no big commitment.

Erwin Szeto [00:36:16] There’s $2,000. Excuse me. And it came down when I heard there was issues of the tenant.

Tammy DiTomaso [00:36:22] Now, no, this is that was a score. We just for the record, we do call it John’s place. So if anyone’s here, that’s John’s place. If you go on Joe’s Instagram, it’s John’s, John’s. John was the tenant.

Erwin Szeto [00:36:34] Okay.

Joseph Costanza [00:36:35] So we purchased the property back in November is when we closed or when we when we offered on it. We’ve got an accepted offer we were supposed to close in January, November 2020, 2021. We’re supposed to close.

Joseph Costanza [00:36:48] So it’s not.

Erwin Szeto [00:36:49] That long. Okay.

Joseph Costanza [00:36:50] So you’re supposed to close in January. And they were kind of going through.

Erwin Szeto [00:36:54] You know, bring us back a little bit. The house previously failed to sell the not.

Joseph Costanza [00:36:58] Okay. So I had found this property listed on the MLS back in November of 2020. I went to go see it. I offered off market on it when they had taken it off their offerings for Express and that fell through. And then every kind of two or three months.

Erwin Szeto [00:37:18] Why did it fail to sell? The market was on fire.

Joseph Costanza [00:37:20] They were they were trying to sell it for 850 back when it was probably worth like 600.

Erwin Szeto [00:37:25] Right. Right. 600. It was that.

Joseph Costanza [00:37:27] Bad?

Joseph Costanza [00:37:27] Well, it was duplexes at the time were selling for around 800. So they were trying to sell it as a legal duplex, which it was at 800. The problem is it needed 200 to 300, depending on how much rental you wanted, 200 to 300 of work. Okay. So no one’s going to buy it for 800 or whatever. They listed it, I think eight less listed initially. It like 850 at some point at one point. So I had offered on it even when they were asking when their offer fell through at 800 or whatever, when their listing fell through at 800, I offered some really probably insulting offer at like 600 or 650. Obviously that got declined and they end up selling it back in or they end up getting an accepted offer on it at 750 back in. It must have been mid.

Erwin Szeto [00:38:20] So it’s up to the how much.

Joseph Costanza [00:38:21] At 750.

Erwin Szeto [00:38:22] And they didn’t take it and run.

Joseph Costanza [00:38:24] The sale fell through. So I was checking in on this property probably every two months I would call the realtor. At some point I end up getting the owner’s number and I was calling either the realtor or the owner like every two months. So, like, what’s going on with your house? Are you guys selling? And then for a little while, it kind of went off market. I thought, okay, so they told me that it sold, it must have closed and now it’s done. So I didn’t really think anything of it. But then I drive past the property every time it was a shit show, so I really wanted to see what they were doing with it. Just out of pure curiosity. And the roof was absolutely mangled and no one had done anything about the roof. And this is like six months.

Erwin Szeto [00:39:00] So it’s just going on or, you.

Joseph Costanza [00:39:02] Know, like there was little holes in the roof.

Erwin Szeto [00:39:05] There’s holes in the roof.

Joseph Costanza [00:39:06] When they when we ripped up the asphalt. Yeah. There was like holes, like I have pictures. I’ll show you after there was like very large. It was like, like soccer ball sized holes in the air, like, in the sheeting. Oh, my.

Erwin Szeto [00:39:18] God. Yeah. Yeah. They’re not going in 54 that.

Joseph Costanza [00:39:19] I know.

Erwin Szeto [00:39:20] A lot of banks when finance that and this appraiser finds that.

Joseph Costanza [00:39:24] Nobody found.

Joseph Costanza [00:39:24] It.

Joseph Costanza [00:39:26] Anyway so yeah. So then I think I had reached out to them at one point because I’m like, okay, this thing definitely has not sold yet. And this is must have been like October of 2021. And I got into kind of a little bit of a, a yelling match with the with the realtor, at which point I was like, okay, I’m just getting a Tammy involved, and.

Tammy DiTomaso [00:39:49] Now I’m going to stop by and tell you what happened. Okay? You try to do the deal without me.

Joseph Costanza [00:39:54] No idea.

Tammy DiTomaso [00:39:56] But just fine. Okay. It’s good you try to do it. Yeah, but those. And then what happened was they were going to use one of their other realtors to represent you because they didn’t want the selling agent to represent both of you. So they said, I’ll bring in a realtor. And he said, No, no, no, I have a realtor. I was only going this way if I was going to get a deal. And no, you weren’t. You don’t have a realtor. You didn’t show up. Right? Right. So you’re like, no, no, no. I’m going to bring in my own realtor. So then I call them like, oh, so yeah, you kind of talk right there, Joe. And they’re like, Yes. And that’s where we went. That’s how I get it. Yeah.

Joseph Costanza [00:40:27] And then.

Tammy DiTomaso [00:40:27] Oh, nice. You call me? Yeah.

Joseph Costanza [00:40:29] I’m always thinking I wish it wasn’t.

Joseph Costanza [00:40:32] On market, so I figured I’m going to try for the market sale. And they were actually just about the listed. They were just finalizing some paperwork to get him out with the tenant.

Tammy DiTomaso [00:40:43] He was so close to being out.

Joseph Costanza [00:40:45] He was so yeah; it was really closed to being out.

Erwin Szeto [00:40:47] But this wasn’t an unethical thing. He was a terrible tenant.

Joseph Costanza [00:40:50] He did not take care of the place. I think the owner of the property didn’t take care of the place either. So between the two of them, nothing was getting done.

Tammy DiTomaso [00:40:58] Let me just add, when the when we found out the landlord tenant board gave him a warning that if you do any of these the list of items, you’re gone in its instant. And it was smoking in the property. Smoking on the property obviously not paying rent it refusing the seller, the owner landlord to come to its own property and swearing at people on the property. Something like there was a massive list that he couldn’t even like look sideways.

Joseph Costanza [00:41:25] Yeah, I think.

Erwin Szeto [00:41:27] The yellow people on is like.

Tammy DiTomaso [00:41:28] Yeah, you don’t.

Joseph Costanza [00:41:28] Yeah, yeah. It’s like, well.

Joseph Costanza [00:41:30] Well, no it’s not yellow people on his lawn. It was yellow people who are trying to get into the property to view the property.

Tammy DiTomaso [00:41:36] Not to mention a bats and by the door.

Joseph Costanza [00:41:38] Yeah. Every time I go yeah that’s a different conversation altogether anyway. So yeah.

Tammy DiTomaso [00:41:45] So we did agree on vacant possession. Yeah. Closed it closed in January.

Joseph Costanza [00:41:49] We’re supposed to close in January. He didn’t he didn’t leave. They extended the court hearing date to it.

Erwin Szeto [00:41:57] Did he agreed to leave did you not.

Tammy DiTomaso [00:41:59] You didn’t agree he was supposed to leave for a certain date because he instantly screwed up off the list, obviously.

Joseph Costanza [00:42:05] And the court it said you’re out by January six, January seven. So he.

Erwin Szeto [00:42:10] Slipped up. So now they have an order. Yes, you have to leave.

Tammy DiTomaso [00:42:12] But he found one judge that said. Okay. We’ll hear you out again. We’re going to extend it anyway. And so we extended ours.

Joseph Costanza [00:42:20] And then. Yes, and then the closing date. The closing date got extended to right after their next hearing, because we were like, oh, for sure, he’s going to get kicked out. He’s already been kicked out before. Like he’s already broken all the rules that he said he wasn’t going to break and he’s not paying his rent. So, I mean, like, add all that together. They got to they got to let him they got to let him go. The court hearing finishes, they’re like, okay, we’re going to issue the paperwork for you to leave. We’ll just find that we’re going to find a date that works for us and we’ll get back to you. So I go, okay, February, I’m counting 60 days is what they give you. I’m like, That’s.

Erwin Szeto [00:42:54] A paralegal involved too.

Joseph Costanza [00:42:55] Yeah, there’s legal there’s literally.

Erwin Szeto [00:42:56] Being done on the. Oh yeah.

Joseph Costanza [00:42:58] On both sides. Yeah. And so I’m like, we’re, we’re talking, I’m like, okay. Or 60 days from the date that he’s supposed to close. Okay. Or pushed the closing date, 60 days out, they have according to the Landlord Tenant Boards website, maybe I’m wrong, but they need to find a hearing, a decision in 60 days. So let’s go 60 days. So 60 days comes and passes and we’re supposed to closing the property and he’s still there.

Tammy DiTomaso [00:43:24] Had a word from like.

Joseph Costanza [00:43:26] Nobody’s told us anything which. No, I didn’t expect anyone to tell us anything because we are not the owners. But still, like I would like to know kind of what’s going on with the process. Couldn’t get in touch with anyone’s lawyer to figure out what was going on with the process. No one wanted to get involved.

Tammy DiTomaso [00:43:41] Closing date comes.

Joseph Costanza [00:43:42] Again. Closing date comes again. And so we had one conversation we wanted to extend again, and we had a conversation with the seller like, if you’re not going to sell on, if you’re not going to close on this place with the guy in there, then we’re just canceled. We’re all for the deal and we’re just going to sell another property.

Erwin Szeto [00:43:59] We’ll sell another property of theirs.

Tammy DiTomaso [00:44:00] Yeah, they needed a yeah, they needed something. Yeah. And this was the one they were going to sell. And since it obviously was kept, you know, been for a long, longer, longer, longer, they finally said no, either you don’t have to take it with them or the deal’s dead, because according to our offer, it allowed us to extend, extend, extend and then someone extends extensions and then, you know, that was at the had agree and they said, no, that’s enough. So he had to come up to the.

Erwin Szeto [00:44:23] Back in possession.

Tammy DiTomaso [00:44:24] And make concession. Exactly. So he had to make a decision.

Joseph Costanza [00:44:27] I mean, I had to make a decision at the time. And the reality was when we close on the property, we had it under contract for 745 and it was probably worth in the nines, very low nines.

Tammy DiTomaso [00:44:39] We have to figure at this point the market’s going up and up and they know that, too, right?

Erwin Szeto [00:44:43] Oh, sorry. What did you get accepted for?

Joseph Costanza [00:44:45] We got it for 745. Okay. Legal duplex.

Erwin Szeto [00:44:48] Sorry, sorry. But it’s worth knowing that.

Tammy DiTomaso [00:44:49] That was in October, November 2021.

Joseph Costanza [00:44:52] Things were selling for like a million.

Tammy DiTomaso [00:44:54] And now we’re into the early 2022 and everything’s selling for exactly.

Joseph Costanza [00:44:59] Yeah. Like that. That property, just as it was with the shit show that it was probably sold for around 900 when we bought and.

Tammy DiTomaso [00:45:07] Sold it with that and made money because the market was going nuts.

Erwin Szeto [00:45:09] You remember soccer ball sized holes in the roof.

Tammy DiTomaso [00:45:12] You concede.

Joseph Costanza [00:45:12] That? Well, yes, it was.

Joseph Costanza [00:45:14] Yeah. From the street.

Tammy DiTomaso [00:45:15] We had a home inspection. Yeah. Like we knew what we were, we.

Joseph Costanza [00:45:18] Were on the roof that had the holes in.

Joseph Costanza [00:45:19] It down on the roof just in step in the holes.

Tammy DiTomaso [00:45:25] So Joe took.

Joseph Costanza [00:45:26] It. Yes.

Joseph Costanza [00:45:27] So I decided that we were going to close on it.

Erwin Szeto [00:45:29] Because what’s.

Joseph Costanza [00:45:29] In it?

Joseph Costanza [00:45:31] And then the next place and then the.

Erwin Szeto [00:45:33] Pressure cut, they decided to.

Joseph Costanza [00:45:34] Fish. Yes, exactly. And then proceed to the next three months of me dealing with the landlord tenant board, trying to get him out. And still the landlord tenant board had not given us an issue, had not given us a date. And so 120 days passed and they finally gave us a date. That’s a month from then. By that point I’d already signed with him and an 11 saying where I needed to start construction. At some point the market was kind of doing a dip and I needed to figure out what are we doing with this place and get yes. So we did a little bit of cash for keys with the property to get them out. And then we started renovations in July.

Tammy DiTomaso [00:46:10] So Joe, did.

Erwin Szeto [00:46:11] Did we try cash keys earlier?

Joseph Costanza [00:46:13] No, nobody tried because.

Joseph Costanza [00:46:14] It wasn’t it wasn’t.

Joseph Costanza [00:46:15] I was waiting. I’m like, okay.

Erwin Szeto [00:46:17] You don’t own the place. Right?

Joseph Costanza [00:46:18] But I.

Joseph Costanza [00:46:19] Offered. I was like, hey, listen, wool like Will, we’ll pay a little bit more if they do cash for keys. I got no problem. They’re like, no, no, no. We’re already in the legal process. We should or should have them out soon. Obviously, the closing date comes. He’s not.

Tammy DiTomaso [00:46:31] Out. So even then you took ownership on closing date. If Joe was to automatically offer him cash for keys, except the landlord tenant board again was still so close to happening. It felt like any day and any day now.

Joseph Costanza [00:46:42] Every time I call, any day now, any day now, we’re going to get a notice. And then two months go by and I can’t wait anymore. This is too much.

Tammy DiTomaso [00:46:48] But you did the sign, the papers did the cash for keys. Everyone’s agreeing. He’s ready. The day comes and guess what? The notice comes in that. Oh yeah, he’s. He’s got to move out.

Joseph Costanza [00:46:58] The day before he was supposed to move out, they gave me a notice saying he needs to move out and keep the day in two days. I’m like, I’m sorry.

Joseph Costanza [00:47:06] I might as well have saved you.

Joseph Costanza [00:47:10] How many? I say, $5,000, but whatever.

Erwin Szeto [00:47:12] And how much in rent arrears did you have?

Joseph Costanza [00:47:14] How much of what? The rent.

Tammy DiTomaso [00:47:15] Brendan.

Joseph Costanza [00:47:15] He actually paid rent every single month ever since I took over. He paid rent every month to.

Erwin Szeto [00:47:20] Give him his money back.

Joseph Costanza [00:47:22] Basically. So, yeah, so.

Joseph Costanza [00:47:25] It didn’t really cost us anything, but it cost us time, which in some respects may actually be more valuable.

Erwin Szeto [00:47:31] So I haven’t heard how things are going now. So that was well, what was that? What was the catch? Ricky’s wanting to move out July.

Joseph Costanza [00:47:37] July 1st.

Erwin Szeto [00:47:38] Oh, just last month.

Joseph Costanza [00:47:40] Mm hmm.

Tammy DiTomaso [00:47:41] It’s almost been almost two months.

Joseph Costanza [00:47:42] It’s been. It’s almost been two months of renovations. Yeah, six weeks?

Erwin Szeto [00:47:48] Yeah. How’s it going?

Joseph Costanza [00:47:49] It’s going well. It’s going well. The Prime Minister.

Erwin Szeto [00:47:51] Sorry. There’s no problem. We’re sorry. Properties. You have no.

Joseph Costanza [00:47:54] Five. Yeah.

Tammy DiTomaso [00:47:55] That’s four in Hamilton.

Joseph Costanza [00:47:57] Four in Hamilton right now.

Tammy DiTomaso [00:47:58] Those are the ones.

Erwin Szeto [00:47:59] That are 20 years.

Joseph Costanza [00:48:00] Old.

Tammy DiTomaso [00:48:01] What’s the ones.

Joseph Costanza [00:48:02] Account that you couldn’t see?

Joseph Costanza [00:48:05] Yes, 28.

Tammy DiTomaso [00:48:06] 28.

Joseph Costanza [00:48:07] Still feels like I’m moving slow now.

Joseph Costanza [00:48:09] Like you’re saying, turn off the social media.

Erwin Szeto [00:48:13] Don’t talk to your friends and find out how much they’re worth and how many houses they have.

Joseph Costanza [00:48:16] That’s not the point. It’s the expectations that I put on myself.

Joseph Costanza [00:48:19] Okay, sure.

Joseph Costanza [00:48:21] Anyway, the renovation is going well.

Erwin Szeto [00:48:23] But we. What’s renovation plan? What are you doing?

Joseph Costanza [00:48:25] So initially. So for the listeners, it’s a one and a half storey house with a back split attached in the rear with a 400 square foot garage. So there’s a big, massive there’s about 3500 square feet of living space combined.

Erwin Szeto [00:48:43] Oh, my God. It’s huge.

Joseph Costanza [00:48:45] It’s pretty large. Like the back unit is about like 1500. And the fronts, one and a half storey is probably about maybe probably less than 3500. Sorry. It’s more like it’s more like 3000. It’s a probably another 1500 for the front.

Erwin Szeto [00:49:01] Sweeper going to my house. It’s a garage and then.

Joseph Costanza [00:49:04] Yeah. And then the and then the garage as well. It’s a front back duplex.

Tammy DiTomaso [00:49:07] Not very typical up and down.

Joseph Costanza [00:49:09] Yeah. It’s a front back duplex. The first the front unit is basically like your typical one and a half storey house like that. Typical kind of like century home kind of.

Tammy DiTomaso [00:49:20] Right. Yeah. Right. Main floor upstairs. And it still has the basement, all that.

Joseph Costanza [00:49:23] And then the back is kind of like a, like a back split. It’s basically it’s designed very similar to a back split. There’s a basement to that back unit as well. It’s kind of a second floor and then like a half level. Okay.

Erwin Szeto [00:49:34] So when you take possession, once the if you took possession tenants out, what would you rent this place out for as this seat and lift a finger.

Joseph Costanza [00:49:41] Oh God. Oh no I wouldn’t renting it.

Erwin Szeto [00:49:45] Oh 1017.

Joseph Costanza [00:49:46] They.

Joseph Costanza [00:49:48] They, they took real advantage of the space. There was holes and walls. There was. Yeah, this is.

Erwin Szeto [00:49:54] You don’t think. Okay, but money committees for everything. So what would take it for like, oh, $300 a month. Okay.

Joseph Costanza [00:50:00] Okay. But ah, I like, basically don’t consider that anything under a thousand.

Joseph Costanza [00:50:04] Just entertain me. Okay. What would the.

Erwin Szeto [00:50:06] What the one and a half storey rent for with the back split rent for.

Joseph Costanza [00:50:09] What would the one and a half the.

Erwin Szeto [00:50:10] Garage you can rent out.

Joseph Costanza [00:50:11] Is right now? Currently there’s tenants in the back unit. They’re paying 1800 plus utilities. You filled it now they’re already there. They were already they’re paying 1800 plus.

Tammy DiTomaso [00:50:20] You just you fully tenanted.

Joseph Costanza [00:50:21] No, they did not get along with you.

Erwin Szeto [00:50:23] Okay. So that’s partly a reason for the order as well. Yes. Okay.

Joseph Costanza [00:50:26] But that that back unit.

Erwin Szeto [00:50:28] That’s looking at rent 1800.

Joseph Costanza [00:50:30] It’s not when you consider what it could rent for.

Erwin Szeto [00:50:32] I know, but you could.

Joseph Costanza [00:50:34] Probably rent for around 22 to 2300 and that but and they’re not they’re also using the garage which I could probably ref for an extra 200. So they’re about 6 to 700 under market value. We’re keeping them because like you said, 800 1800 is not that bad. Right. The reality is I lose about $700 of cash flow every month from.

Erwin Szeto [00:50:53] Potential cash.

Tammy DiTomaso [00:50:54] But not even for that that.

Joseph Costanza [00:50:56] We have. We’re not doing anything to every.

Erwin Szeto [00:50:58] One and a half storey rented out as is John’s place.

Joseph Costanza [00:51:01] Yeah.

Erwin Szeto [00:51:01] Similar. How much could cost that. You could have got an 1800 for and just clean it up so maybe.

Joseph Costanza [00:51:06] Yeah.

Joseph Costanza [00:51:07] Yeah. 1800 for that front unit if we wanted to.

Erwin Szeto [00:51:09] That’s not bad.

Joseph Costanza [00:51:10] Because.

Tammy DiTomaso [00:51:10] It is a full house. If it’s cleaned up, it’s.

Joseph Costanza [00:51:12] Basically a full.

Joseph Costanza [00:51:13] House. I mean, full houses in Hamilton are renting for like 3000. Right.

Erwin Szeto [00:51:17] Okay. What’s the plan?

Joseph Costanza [00:51:18] So the initial plan was finish the basement and finish the main unit.

Tammy DiTomaso [00:51:24] Can I just say Joe’s initial plan wasn’t an initial plan. Remember, you were all over the place.

Joseph Costanza [00:51:29] You’re like an emotional family.

Tammy DiTomaso [00:51:31] Like a basement. Hold on. Or Airbnb. Maybe you’re right. We had all this idea that.

Joseph Costanza [00:51:35] You’re dealing.

Erwin Szeto [00:51:36] With Sudbury, you’re dealing with this.

Joseph Costanza [00:51:37] That was the asset. And there was all, everything simultaneously. Yes. The initial plan was to renovate, to fix the basement, then do the main floor of the everything on the first house, the basement of the first of the main house in the front, and then do a full kind of cosmetic got off the front unit first and second floor.

Erwin Szeto [00:52:02] We’re going to turn that into a duplex.

Joseph Costanza [00:52:04] We’re actually doing an illegal triplex on the mountain.

Erwin Szeto [00:52:10] Do we need to edit this out?

Joseph Costanza [00:52:11] Yes, because. So we don’t see that work.

Joseph Costanza [00:52:17] All right. Sorry, sorry.

Joseph Costanza [00:52:18] We are going to are all legal. Okay.

Tammy DiTomaso [00:52:20] But was he was going to do, like, proper, proper planning. Everything was going to need to.

Erwin Szeto [00:52:26] Underpin it to.

Joseph Costanza [00:52:27] Where we’re going to lower the floor and everything.

Tammy DiTomaso [00:52:28] I’m saying it was over.

Joseph Costanza [00:52:29] This is the thing is my perspective is I don’t want to ever have a rental. What I wouldn’t live in. That’s my golden rule for me. So if I want to live in it, I don’t want anyone else living it. I know that’s probably not the best, like investment advice, because you can make money on things that you wouldn’t live in and you can make really good money doing that.

Erwin Szeto [00:52:51] Well, this is this is clarify that when I was 22 years I much different standards than I do now. So I sometimes I’ll speak to the 22 year old would you live here.

Joseph Costanza [00:53:00] There.

Joseph Costanza [00:53:01] But still. So it was it’s a six foot five basement. And I wanted to drop it down to seven. And I don’t have the numbers on me, but like I rationalized that somehow at some point and it kind of made sense in my head. The numbers, numbers got a little out of hand at some point, which is partially the reason we’re not doing that right now.

Erwin Szeto [00:53:22] So you didn’t actually do it.

Joseph Costanza [00:53:24] We’re so we’re not doing the basement anymore. And the reason we’re not doing the basement is with the market the way it is. I want the renovation to go quickly. I want to be in and out of this place. I don’t want like if we had the same market that we had back last year where everything was just moving. Yeah, sure. I’d just do the basement, because the reality is, if I’m going to hold it with the appreciation that we were seeing in the market last year, even if a renovation goes slightly over budget, the market’s going to save me. I know that’s horrible advice, but that’s the reality for a lot of investors. Last year or even in 2020, the market saved them for a lot of things. The market wasn’t really in our favor here, so the plan was be in and out of this property, get our money back, and then we will look at doing those renovations later down the line. As long as it’s stabilized and cash flows and it covers all expenses, then in the future we can look to kind of increase our position in the property and that’s kind of it. We knew buying the property that it would be an evolving kind of property as itself.

Erwin Szeto [00:54:20] You don’t need to do all the work. We’re going to do this one.

Joseph Costanza [00:54:23] In phases every year or probably in like two years. We’ll do that back unit kind of slowly, kind of do what we need to do. We also found out that we actually can’t do the basement until that back units, none, because there’s some electrical wiring that needs to get redone in that place to run more power to the basement. So the reality is we would have to do the whole house if we were doing the basement. So it just financially didn’t make sense. So we just settled for just doing a cosmetic on the main floor, which came out to be about 100,000 when everything included.

Tammy DiTomaso [00:54:54] That the front main and upper main an upstairs. Yeah.

Joseph Costanza [00:54:57] So basically like.

Erwin Szeto [00:54:58] Cosmetic.

Joseph Costanza [00:54:59] Yeah. That’s just kind of what we did. We opened up a structural wall. We did a little bit more than just cosmetic.

Tammy DiTomaso [00:55:05] And outside needed.

Erwin Szeto [00:55:06] A lot higher standards than I.

Joseph Costanza [00:55:07] Do. Yeah.

Tammy DiTomaso [00:55:09] Joe’s living there, but he.

Joseph Costanza [00:55:12] Did for a.

Joseph Costanza [00:55:12] Very small. Well, we were in there without the wall. I know you haven’t seen it with the wall, guys.

Tammy DiTomaso [00:55:16] I know we’re going to come. You know what, Irwin? We should go by. Go? Yeah, yeah. I’ll go check it out.

Erwin Szeto [00:55:20] For me as a pragmatist in the in a market with historically high rents, I don’t need to do too much.

Joseph Costanza [00:55:25] Yeah.

Tammy DiTomaso [00:55:26] But we should do the day too, and get it approved with the tenants for a visit just so we can see that back unit, because it’s really unique how it circles around and the space involved. It’d be nice to see the whole thing, not just in the front.

Joseph Costanza [00:55:37] Yeah, yeah. So very, very nice.

Joseph Costanza [00:55:39] You place.

Joseph Costanza [00:55:41] Well going. You let me know.

Tammy DiTomaso [00:55:43] When it’s John’s place.

Joseph Costanza [00:55:44] Remember John’s place?

Erwin Szeto [00:55:45] So what’s the rent going to be on this place? So you spent 100 grand.

Joseph Costanza [00:55:48] It’s about 100 grand. The rents right now, I’m projecting you can correct me if I’m if my numbers are wrong, but I’m projecting around 2600 to 2700 for that just for that front unit, because it’s basically the full house.

Tammy DiTomaso [00:56:01] You can be good there at least.

Joseph Costanza [00:56:02] Yeah. Yeah, we’re.

Erwin Szeto [00:56:03] Seeing we’re seeing like for some years go for like 32.

Tammy DiTomaso [00:56:06] Yeah. So you’re going to get probably close to the three. Could be could be the three just because it’s.

Joseph Costanza [00:56:10] A family hall.

Joseph Costanza [00:56:11] I have. So I did my numbers but I’m very conservative with my numbers. I did all my numbers. 24 You never guessed right. I did all my numbers at 2500. So anything more than 2500 is gravy for me.

Tammy DiTomaso [00:56:23] My, my, my rental is a one and a half story as well. I have four bedrooms, two bathrooms, and I put tenants in last year getting 25 friends gone up. So yeah, you’re definitely going to be at least of the numbers you just said at minimum. So I do like to run my numbers conservatively too. But when the time comes to actually rent it, yeah. Check in again.

Erwin Szeto [00:56:40] Where you think stretch.

Tammy DiTomaso [00:56:42] Three.

Erwin Szeto [00:56:42] 3000, stretch, stretch. You know, proper 3000. My friend Christian’s space for God’s message. Me here, he put up, he stretched his one bedroom, you know, he got 2200 for one.

Joseph Costanza [00:56:52] But I probably get through with the garage though, if I can close.

Tammy DiTomaso [00:56:54] But I think not even. And you know what else, you’ve done a lot of landscaping outside, which I noticed, which is huge to me.

Joseph Costanza [00:57:00] A lot of time for escape. And I know.

Tammy DiTomaso [00:57:02] You did or your mom did. I know I saw mama.

Joseph Costanza [00:57:07] I like I like to put on the last tomato. I like it’s no, I’m not sure.

Joseph Costanza [00:57:11] I like to put a little spin on every property that I. I like to. A little bit of work into everything that I own that within reason I thought up on.

Joseph Costanza [00:57:20] Yeah. I don’t.

Joseph Costanza [00:57:23] Think it’s the best financial advice for anyone, like investment advice.

Joseph Costanza [00:57:26] But like I.

Joseph Costanza [00:57:27] Can do a little bit of myself.

Erwin Szeto [00:57:29] I tried to kill all the vegetation on my other property.

Tammy DiTomaso [00:57:32] It looks great.

Joseph Costanza [00:57:33] I think it looks good, right? Yeah, it does. Yes. I killed all the.

Joseph Costanza [00:57:37] Vegetation on my other places that are. This will probably all die as well, but.

Joseph Costanza [00:57:42] Okay.

Erwin Szeto [00:57:42] Apologies to the listener. This sounds very dramatic. How does this compare to your other three other properties in Hamilton or any of this less dramatic?

Joseph Costanza [00:57:50] Uh, no. No, they were all pretty straightforward.

Erwin Szeto [00:57:53] Pretty boring duplexes. Yeah, I know. They didn’t feel boring to you at the time because I know you were sleeping in them and renovating yourself, so I know it.

Joseph Costanza [00:57:59] Yes, yes, yes.

Erwin Szeto [00:58:01] But looking back at that, compared to what you’re doing now.

Joseph Costanza [00:58:03] I would not 100% would not have been able to do what I was doing. Now, dealing with the stress associated with it. I did definitely grow through the process and I think I mean, like my purchases have gotten gone from like basically doing no renovations to a little bit of renovations to a full gut to now dealing.

Erwin Szeto [00:58:21] With the first property. Did a whole basement suite?

Joseph Costanza [00:58:24] Not really.

Joseph Costanza [00:58:24] Really. It was already partially done.

Joseph Costanza [00:58:26] Yeah.

Joseph Costanza [00:58:27] Right. And then the second one, the basement was already done, but the upstairs needed a full gut.

Joseph Costanza [00:58:31] Yeah.

Joseph Costanza [00:58:32] And then the third one. Okay. The whole place near forgot.

Tammy DiTomaso [00:58:34] Would have been your more.

Joseph Costanza [00:58:35] More fun.

Joseph Costanza [00:58:36] Yeah.

Joseph Costanza [00:58:37] So that was the biggest shock was doing the third one. Yeah. And then the fourth one was John’s property. Yeah. John’s place is just like doing the tenants and then with all the other crap and then doing a fall guy.

Tammy DiTomaso [00:58:50] But let’s just add that the third property, with all the surprises and the extra work you needed to do and all the gut, but then what we got a far and then what you refiled for. He was like it was worth it.

Joseph Costanza [00:59:00] Yeah, that was different.

Tammy DiTomaso [00:59:01] It was very worth it.

Erwin Szeto [00:59:02] So what would you say, the beginner. So for example, I see a lot of courses out there teach to go after your how it was basically a teach that to look for the off market look for the complete disaster soccer ball sized holes in the roof that the bank wishing land on. When you think a beginner should take something on that you know take something like that on.

Joseph Costanza [00:59:20] I think you need a baby step your way you can’t like at some point you need to jump in. But I think you need to kind of take your time to get to a certain point and not necessarily sure if the because I could tell you from my experience, if I took on John’s place when I first started, I probably would have been turned off from the whole process.

Erwin Szeto [00:59:37] It took me five K What about.

Joseph Costanza [00:59:39] Yeah, kind of made five K.

Joseph Costanza [00:59:42] So I’d say no. I think like you need to kind of build up and get I mean I usually wouldn’t recommend a turnkey property per se, but I think like even if you wanted to do that turnkey route would be a good way to kind of get your feet wet with that. In terms of buyer, probably that needs a little bit of work. Maybe find something that needs a small cosmetic workup rather than a full a full gut. Right.

Erwin Szeto [01:00:08] I think of the.

Joseph Costanza [01:00:09] Has a comfort level. At the end of the day, I.

Erwin Szeto [01:00:11] Think of scuba diving analogy when you scuba dove as a beginner to go to take any advanced course, they only allow to do one at a time. So for example, you see a recreational scuba diver, now you want to do what’s called penetration. You got to go and you’re an enter a wreck, right? You can enter the wreck. What you cannot do is do that at night because night is a different advanced level diver. So you can only do one thing at a time. So take me to see investment properties. Dealing with tenants is one skill set risk factor. Yeah, dealing with renovations and contractors, another risk factor dealing with a major renovation where you need permits and you have mold them into wiring asbestos. Another level, right. Dealing with the LTB situation, another level. So I think to each their own they have to decide what level of risk you want to do, whatever stage in life you are, whatever state investor you are. Because imagine, like, I know this was stressful for you and your family.

Joseph Costanza [01:01:09] Mm hmm. Yes, for sure.

Tammy DiTomaso [01:01:11] I you know, and I just want to add that I agree to that. I do think it’s nice and it’s that nice. The steps that you took, building that up, and it’s nice for people. But we also have a lot of new investors that come to us wanting to do, let’s say, a duplex conversion. And that’s a really big project as well. So and.

Erwin Szeto [01:01:26] That’s a vanilla one, vacant house, good.

Joseph Costanza [01:01:29] Bones.

Tammy DiTomaso [01:01:30] You know, and we’ve seen all kinds of things that can come up and so on and everyone’s a little different on how they roll with stuff. But again, going back to trying to have that good team around you and I don’t just mean me and I don’t just mean, you know, that all does make a really big difference because new investors, if you’re just going to start out, yeah, it is nice to have that smaller project first, but at the same time it’s not so scary when you have a bigger one if you have the right team too. So it really kind of depends on what you’ve, you know, surround yourself with and how you deal with things. And we all learn that from each other. Like I always talk about James on our team. He can have things off his back and I’m like, No, oh my goodness, I’m not sleeping. I can’t, can’t. You know, we’re all a little different how we handle it, but trying to learn from each other and doing the best.

Erwin Szeto [01:02:06] That John’s has. And you had your separate team.

Joseph Costanza [01:02:11] Yeah.

Erwin Szeto [01:02:12] You’re right. It was a sure.

Joseph Costanza [01:02:16] No.

Joseph Costanza [01:02:16] But I think I think taking steps is not a bad thing. And I think I more talk them out of necessity. I didn’t have the money when I started to get into something that needed a focus. At least I didn’t know how to find the money in the money. So, yes, I wasn’t doing all of myself, but yeah, I did a lot of it myself.

Erwin Szeto [01:02:35] The stuff you do need a license for?

Joseph Costanza [01:02:37] Yes.

Erwin Szeto [01:02:37] You can do an electrical.

Joseph Costanza [01:02:39] No.

Erwin Szeto [01:02:39] If I did tiling offline and some drywall.

Joseph Costanza [01:02:42] I did. Yeah.

Joseph Costanza [01:02:43] Yeah.

Joseph Costanza [01:02:44] And but like I did it more because I, I was we were looking for those properties more because I couldn’t afford a property. Then you two forgot. And I didn’t know at the time I was too inexperienced to know that I could just go and find the money or borrow the money to do this work. Right. So I was looking at how much money do I have? What’s the renovation that needs to get done? Like I remember when we bought Red Street, the first property that I owned, like coming to closing, and I was like, I actually don’t even have enough money to close on this place. Considering all the closing part.

Tammy DiTomaso [01:03:13] Is that the when you call me, you’re like, I have to call my. No, not yet. Some money goes up.

Joseph Costanza [01:03:19] That is the one. Yes, I forget that.

Tammy DiTomaso [01:03:21] But then you got you worked.

Erwin Szeto [01:03:22] Out the note I come through.

Joseph Costanza [01:03:24] And then I didn’t come for.

Joseph Costanza [01:03:26] Some piece then.

Tammy DiTomaso [01:03:26] Yeah I got a fee.

Joseph Costanza [01:03:31] Yeah. So I think taking those steps were necessary for me because at the time learning through that experience and learning through kind of like how to find money, how to borrow money. Like I, we bought the property. I didn’t even have the money to do the renovation. I was like, I’m just going to rent it out and we’ll deal with it at that point. And then the bank was like, Hey, do you want a $50,000 loan? I was like, Yeah, I’ll do that.

Joseph Costanza [01:03:55] I’ll take that. Yeah, sure.

Joseph Costanza [01:03:57] And then we did that, like, I was so last minute, I was like, I guess I’m doing the renovation now. Was like and then and the rest is history from there.

Erwin Szeto [01:04:03] Funny how I think how things worked out.

Joseph Costanza [01:04:05] Mm hmm.

Erwin Szeto [01:04:06] But you had all the answers from the beginning where we met you when you were 24.

Joseph Costanza [01:04:10] I think it was good for me, though, to not have the answers because it.

Erwin Szeto [01:04:13] No one has all the answers.

Joseph Costanza [01:04:14] No, I know, but I’m saying what I’m saying is, like.

Erwin Szeto [01:04:16] You have a kid; you’ll find out how many answers you do not have.

Joseph Costanza [01:04:19] I’m trying to postpone that right now. I’m not in the mental state. I got too much built into the starter for that stage of life.

Erwin Szeto [01:04:30] You’ll be grateful when you have your portfolio. And then you have kids and you want to worry about this stuff, you know, married, having kids and then trying to build a portfolio.

Joseph Costanza [01:04:38] Yeah.

Tammy DiTomaso [01:04:38] Oh, that’s crazy. I’ll never forget when. When Joe and I first met and when we got the first property. And you were nervous, of course, as you should be. Right. And I get it. And I remember saying to you, you’re 24 years old and saying, Do you know we were closing? You’re like, oh, my God, believe. We can’t believe it. And I said, Do you know how many people say, I wish I started when I was 24 and you did it. You did that. You absolutely did that. Like this is still on.

Erwin Szeto [01:05:03] The record as our youngest client.

Joseph Costanza [01:05:05] I don’t really.

Erwin Szeto [01:05:06] Think you do.

Joseph Costanza [01:05:07] Who’s the.

Erwin Szeto [01:05:08] You bumped?

Joseph Costanza [01:05:08] Yeah, but who.

Joseph Costanza [01:05:09] Who’s there? Wasn’t there somebody after me?

Tammy DiTomaso [01:05:12] Well, somebody met Joe. I think there were 23. I was like, No, you’re waiting. No, you know what? They’re like most people here myself who want to and talk about it and think about it, not do it. You did it. It’s huge.

Erwin Szeto [01:05:28] Yeah.

Joseph Costanza [01:05:29] I just do things and think about consequences later.

Tammy DiTomaso [01:05:31] I think that’s gonna make some. Make some calls. Good. Now, getting to know you did good. You did very well.

Joseph Costanza [01:05:39] Good for you.

Erwin Szeto [01:05:40] Actually, we’re. We’re talking about rants and stuff. What do we see in the market?

Tammy DiTomaso [01:05:43] Forensic brands are.

Erwin Szeto [01:05:45] Are showing up down. We’re in the middle of August.

Tammy DiTomaso [01:05:48] Yeah. I was able to book this morning went out with a client to see some houses, had my pickings of the 12 that I thought could possibly work how to narrow down a little bit. We went to go see six houses this morning, very focused on one. So it was yeah, it was an experienced investor. We were able to soak it all in and we were able to narrow down the property. Is that also meet all the criteria for a garden suite? And that was just Hamilton. So it was great. So we got to see quite a few and go from there.

Erwin Szeto [01:06:20] How does it compare to like six months ago?

Tammy DiTomaso [01:06:22] Oh, six months ago they would call, I would be like, God, there’s one or two if you want. And I don’t think one’s really going to work. But we could.

Joseph Costanza [01:06:28] Show you finding that a lot of people are now starting their search.

Tammy DiTomaso [01:06:33] I’m or you’re.

Joseph Costanza [01:06:34] There’s still people holding back.

Tammy DiTomaso [01:06:35] A lot of people holding back. But I am hearing a few people more calling me saying, you know what, we’re ready now. We’re ready to get back in, which is smart because right now is a really good time. We’re in, you know, August 20, 22, right? That’s right. Now’s a good time. I had a client yesterday. I called her up. I said, hey, I just noticed this change on that listing we saw a month ago. And she’s like, that’s just warfare done, you know? And we were able to get in and get it for a great price made for 75 and well and for property recently. And, but yeah, so we’re noticing that it’s a really good opportunity. We’re noticing a lot more. There’s certainly a lot more choices on the market, a lot less competition, a lot of houses sitting 30, 60 days, houses that are sitting there more ready to sell. So the house, for example, that we picked up yesterday was a 525. We offered for 75. They had a couple other offers fell through. So we went in firm. They loved it took our price, right? So that’s what we’re seeing, those kind of changes. That means.

Erwin Szeto [01:07:28] Hostess This has a check off boxes for us.

Tammy DiTomaso [01:07:30] To check off, but this one in particular is already a duplex and will end on a 60 by 120 lot. The house is all the way to the left. We’re looking into severance possibilities and land. And if not, we have a double car garage that we’re gonna turn to a garden suite. Massive growth.

Joseph Costanza [01:07:45] Opportunity. Well, for us. Great for survival.

Erwin Szeto [01:07:48] Okay. How much for that cost of six months ago?

Tammy DiTomaso [01:07:50] Well, it was listed. Sitka’s been listed for a long time. I’ve had my eyes on it was list originally about 654, probably about that long ago. I saw it go down to six. That’s when we saw it held off for a bit because I had a low paying tenant. I notice the other day I’m like, I just read that that tenants moving out. So that’s why we jumped on it because now it’s fully vacant, paid for 75 and $1.

Joseph Costanza [01:08:09] Up is key.

Tammy DiTomaso [01:08:11] That’s it. Exactly the same as you know.

Erwin Szeto [01:08:13] I’d argue that selling bacon is key as well as a seller if you want maximum money.

Joseph Costanza [01:08:17] Well, yeah, but as a buyer, like the follow up, like if you’re if you’re not following up with properties that you’d be surprised. We’ve done it like all the time. I got my first deal the same way. The fourth deal the same. We just following up. Just be like, did you guys sell? Would you guys sell for all right if they have sold and you don’t get it and that’s fine. But like, what did you guys sell for? Because I want to know.

Joseph Costanza [01:08:40] Like.

Tammy DiTomaso [01:08:40] You know what?

Joseph Costanza [01:08:41] We’ve my own knowledge, so I’m going into next one. I can actually put a competitive offer in and.

Tammy DiTomaso [01:08:44] We really play the market because Joe and I’ve just been working together for four years now, but in the market where houses were selling crazy, prices were up. The house that you’re talking about that you picked up was because I would talk to him about expired listings. I saw properties that are expired or sell properties that are canceled and so on. And these might be some opportunities down the road that we can take a look at that we’re not seeing so much in this market because they’re actually on the market sitting that long. But before when that, you know, like case and the other reason that Houston sell the way it did was because of that tenant. So another kudos for you saying, listen, let’s push it, push the envelope here and then we’ll jump in and we’ll take it and take that risk a little bit.

Joseph Costanza [01:09:23] Like even after like right now, like we’re after this, we’re going to go see we have a showing.

Tammy DiTomaso [01:09:28] We do. We have a showing.

Joseph Costanza [01:09:29] And we’re going to go, look, not because I don’t want to buy it at the at the price that the house is out right.

Joseph Costanza [01:09:34] Now. I don’t want to buy it.

Joseph Costanza [01:09:35] I don’t want to buy at the price the house is now. But yeah, it’s been sitting for 60 days now. So if they do a price reduction, I want to I want to be the first one that’s seen it already so that if I want to if I want to put an offer in already and they say they drop, they go from 800 to 700. I’m just throwing ballpark numbers out there. I want to be the first one to put an offer firm at 700 because I know I can buy it for 700 and I can do what I need to do for 700 because I’ve already seen the place. Yeah.

Tammy DiTomaso [01:10:00] So that’s all that’s the most important part. I keep telling you. You got to get out. You got to see them. You got to see them. You got to see them. Because then what you have, when an opportunity comes, you’re ready.

Joseph Costanza [01:10:08] Yeah, I’m kind of at a waiting stage, just kind of seeing what I’m doing. I’m pretty liquid right now, just kind of waiting to notice. Yeah.

Erwin Szeto [01:10:14] So, you know, I had this conversation before, but what 24 year old think about 28 year old you put in. So forget everything you think about. You think about what 24 year old you would think. And it is so. So let me let me. Further, 24 year old u means 20 year old U. You don’t know 28 year old you. You never met before. Complete stranger. You meet at a network networking meeting. What would you think about a guy.

Joseph Costanza [01:10:37] 28 or 24 year old? Me would probably be pretty impressed. I don’t know if.

Erwin Szeto [01:10:41] Course how much you want. I don’t always ask, but I’ll ask you how much a 28 year old you worth compared to 24 year old you 28?

Joseph Costanza [01:10:49] Well, six figures or seven figures for sure.

Erwin Szeto [01:10:52] Millionaire. Yeah. What would 24 year old you like. Who? Cow. You have five properties worth a million and you only did in four years.

Joseph Costanza [01:11:00] 24 year old me would be probably be asking a lot more questions and trying to do the math in my head of how long I’d have to work to get to that point. And I think at 24 I was doing those numbers in my head which made working for someone else not make sense. Which kind of. Started the trajectory. I don’t know what 24 year old me would think.

Erwin Szeto [01:11:23] You’re 24 year old. You’d be impressed by the 28.

Joseph Costanza [01:11:25] Yes, 100%. I’m not impressed by myself.

Erwin Szeto [01:11:28] Are your parents impressed by you?

Joseph Costanza [01:11:30] I think I think so.

Erwin Szeto [01:11:31] I don’t care what your mother says. I don’t care about your opinion.

Joseph Costanza [01:11:33] Yeah, like I’ll tell her.

Erwin Szeto [01:11:36] I’ll tell her myself in this room.

Joseph Costanza [01:11:38] We’re friends. Yeah.

Joseph Costanza [01:11:39] You guys are friends. You guys.

Joseph Costanza [01:11:39] Talk all the time.

Erwin Szeto [01:11:43] On Instagram.

Joseph Costanza [01:11:45] Yeah. She’s going to share messages on Facebook like they have their own conversations.

Erwin Szeto [01:11:50] I’m not going to have a bunch of new Instagram followers.

Joseph Costanza [01:11:53] Okay.

Erwin Szeto [01:11:55] So I’m going to ask her after this. Are you proud of Joseph’s?

Joseph Costanza [01:11:59] She’s going to say yes.

Joseph Costanza [01:12:01] But, uh.

Erwin Szeto [01:12:03] That’s another question. We’re running out of time. Can you do parents who are retired?

Joseph Costanza [01:12:07] Yes, they are retired. Now they are.

Erwin Szeto [01:12:11] In their former teachers. So they have very nice pensions.

Joseph Costanza [01:12:13] Yes, they do.

Erwin Szeto [01:12:15] And what do you think their retirement life would be if they didn’t have those pensions?

Joseph Costanza [01:12:19] I always thought because we were talking about this the other day, and so I asked them and. Oh, cool. Yeah, I did. I talked to them. My parents have always wanted to do something like this, get involved in investing in real estate and stuff like that. And for the listeners, if we didn’t kind of mention on this podcast, I have two joint ventures with my parents. So that’s where I mean, when they say get involved. But I think from what they told me, they would still they would have started to invest because paying into your pension, although it’s great when you retire, when you add up all the money that they’ve paid into the pension, it’s actually really quite substantial. Right. Which is why they’re able to retire now with the pension that they have. My parents are of the mindset that they think that they would have invested in something while they were working instead of kind of putting their money away and the pension. Because for them, the pension plan was the retirement plan. And so they didn’t have to worry about it, so they didn’t think about it. However, they’re finding out now that the pension is not enough.

Erwin Szeto [01:13:26] Really?

Joseph Costanza [01:13:27] Pension.

Joseph Costanza [01:13:28] Yes, it is. But when you have a family that you’re still I kind of like dealing with and you have elderly people that you’re taking care of, and maybe those elderly people have a plan for their retirement. Right. Things add up. Yeah, right. And it’s enough to have a good life. And but it’s not enough to have what I would consider a fruitful.

Erwin Szeto [01:13:53] Role to help other people. Yes.

Joseph Costanza [01:13:55] To be able to help out people that they love. Yeah. It puts strain. There’s still there’s still money issues. Let’s put it that way. Yeah, right. It’s like the pension does that. It doesn’t eliminate the money issues. Right. So my parents are of the mindset that they would have started investing earlier if they didn’t have their pension. I don’t think they would have, if you ask me, because if my parents have been very risk averse their entire life, I think the only reason they started looking at investing is because mine invest. My investments were going well and I was showing that I was working hard at them and I was at networking events every weekend, constantly reading up on things, constantly looking at things. So I think the confidence they had in me was what got them into this. I don’t think they would have done the same thing if they not if they were not paying into their pension so long, a short of it, I think that it probably wouldn’t have worked out very well for them if they had not planned if they hadn’t had their pension.

Erwin Szeto [01:14:56] Do you think you have any issues retiring?

Joseph Costanza [01:14:58] I don’t know what to say. This what is retirement?

Joseph Costanza [01:15:00] Of course you do.

Tammy DiTomaso [01:15:01] What about everything?

Joseph Costanza [01:15:02] What is what is.

Joseph Costanza [01:15:03] What is considered retirement like? I think for a lot of like investors, retirement is just really entrepreneurship, like being able to.

Erwin Szeto [01:15:12] All of them.

Joseph Costanza [01:15:12] Live their life on their terms, financially free. Right. Right. Like, I look at you and like that looks like your life to me. Looks like retirement. I know for you it doesn’t look like retirement because it’s a lot of work. But you’re able to live life on your terms of doing what you want to do. To some degree, yes. All right. For me, that that is the goal right now, retirement where I put my feet up and not do anything. I have no plans.

Erwin Szeto [01:15:38] If you wanted to go by the age of 50, you think you think.

Joseph Costanza [01:15:41] You could 100%. But that’s is am I going to be satisfied with that? Is that the question?

Erwin Szeto [01:15:47] Here’s one thing, though. Do you lose any sleep? No. But the idea of being able to put up your feet and do nothing about 50.

Joseph Costanza [01:15:52] I haven’t thought about it one bit.

Erwin Szeto [01:15:55] Maybe because it’s not a worry.

Joseph Costanza [01:15:57] So normally we’re.

Erwin Szeto [01:15:58] Discussing before your mom’s going to come September 17, the next time when I.

Joseph Costanza [01:16:01] Will force her to come. Yes. September 17th.

Erwin Szeto [01:16:04] Right? Yes. Saturday.

Joseph Costanza [01:16:05] Oh, sure. Yeah. I’ll make her come.

Erwin Szeto [01:16:07] Awesome. This time we’re going to talk about what people are doing these days. It is funny because I see all this fierce stuff on social media. Like there’s one lady who’s a broker, whatever she’s like, and what mind are you buying anything in today’s market? Message me if you are. I’m like, Yeah, that’s you. We’re getting stuff we couldn’t get six months ago. We may not be able to get six from six months from now.

Joseph Costanza [01:16:31] Yeah.

Erwin Szeto [01:16:31] So we’ll talk about what people are actually buying. Maybe we’ll talk about what Joe bought today at the September 17th meeting. Yeah, but yeah, we’re going to just tell it like it is. I think the world is very scary, right? But you know, you have to figure out how to navigate it and then preferably profit from it. Hmm. We’ll talk about that. Strummer 17. See you guys. See you there.

Joseph Costanza [01:16:54] I will be there.

Erwin Szeto [01:16:55] I’m going to be your mom.

Joseph Costanza [01:16:56] Okay.

Erwin Szeto [01:16:57] It’s hard to say but do.

Joseph Costanza [01:16:58] You have to invite her? Because I if she if I tell her to go, she will not go.

Erwin Szeto [01:17:01] I’ll talk to Ambulance Signer Brooke to see if she comes.

Joseph Costanza [01:17:05] That’s it. That means a lot. There you go.

Erwin Szeto [01:17:07] Any final thoughts? Any final thoughts? Because we’re way over time.

Joseph Costanza [01:17:11] I think a lot of young investors over the last year and even now made a lot of decisions based on ego and based on and that ego kind of put them in situations where they’re over leveraged and maybe they’re now kind of in tough situations.

Joseph Costanza [01:17:30] Yeah.

Erwin Szeto [01:17:30] I’ll add to that that there they’re following charismatic leaders who are no longer around.

Joseph Costanza [01:17:34] Charismatic leaders who have probably liquidated most of their portfolios as well. And I think that people really need to step back and look at it from the long term perspective. Right. If you have to sell, you have to sell. That’s just the nature. Right. But if you’re upset because you may be down on the equity that you thought you would have had or you may not be able to refinance or what you thought you would have had. Like you have to look at it from the long term perspective. And the long term perspective needs to be a, I’d say at least a minimum of five years, if not more. Right. Right.

Erwin Szeto [01:18:08] That someone should. They should. If they’re going to take advice from someone, they’d better be reading the economics. They better understand economics because I predict that. I predict that this year would be another 2017, right? Yeah. So if you knew this was going year was going to be 2017. Are you really going hard right in the early part of the year? Mm hmm.

Tammy DiTomaso [01:18:25] I just want to add that we’ve been working together for a long time, and I’m very proud of my son, Joseph. We have an inside joke that I am like his mom, and that’s old enough to be so. But, yeah, I think that no matter what age of anybody is going to be starting to get into real estate. You were smart that you said, you know what, I thought about this and I went for it and I’m doing it. And a lot of people sit back and don’t always do that. And, you know, it’s proud of you for doing it. It’s obviously done. Young age is pretty impressive, but at any age, get into real estate is great. But yeah, it’s been a pleasure working with you, Joe, and we’re not done. We’re going shopping today.

Erwin Szeto [01:19:03] So amazing to.

Joseph Costanza [01:19:04] Come.

Erwin Szeto [01:19:06] In. Your social media handles you want to share. Got a book or something you’re coming up with?

Joseph Costanza [01:19:09] I have no.

Tammy DiTomaso [01:19:10] Book. I have a book here. My Erwin Szeto here, if anything.

Joseph Costanza [01:19:16] Do you.

Erwin Szeto [01:19:16] Buy you.

Tammy DiTomaso [01:19:16] Chapter? No, I didn’t even know I was here. So definitely going to take a look at this book. Thanks for free copy. Copyright Erwin. You guys heard it here. Free copy.

Erwin Szeto [01:19:29] Will cure insomnia.

Joseph Costanza [01:19:30] And yeah.

Erwin Szeto [01:19:32] Social media handle.

Joseph Costanza [01:19:32] Yeah, they can follow me on Facebook or Instagram. Joseph Costanza for both Facebook and Instagram.

Erwin Szeto [01:19:39] You locked that up. You better to compete for those handles, not them. George Costanza. Joseph.

Joseph Costanza [01:19:45] Joseph. Joseph Costanza. One forward on Instagram.

Erwin Szeto [01:19:49] And you have a fat wallet just like George, right? I sure did.

Joseph Costanza [01:19:52] Sure. I would not consider myself loaded, but yes, sure.

Erwin Szeto [01:19:56] Pretty sure. 24 year old you would consider 28 year old?

Joseph Costanza [01:19:58] Yeah, probably. But yeah, my standards have changed.

Erwin Szeto [01:20:05] All right. Well, thank you guys for doing this.

Joseph Costanza [01:20:06] Thanks, Daryn.

Erwin Szeto [01:20:07] Good luck. Good luck in your property search.

Joseph Costanza [01:20:08] Yes.

Erwin Szeto [01:20:17] Before you go, if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already and sign up for 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 the cash flow reduces your risk. The more you have, the more lumps 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 student rental in St Catherine’s, Ontario. If you’re interested in learning more, register for free from my newsletter at WWW. Truth about Real Estate Investing dot CA. 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 what so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell, I love teaching and sharing the stuff.

Joseph Costanza [01:21:30] Mm hmm.

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