Table of Contents - Replacing Your Job with Cashflowing Properties…with Nicole Edmonds
Dave Debeau [00:00:08] And everyone, this is Dave Debeau with another episode of the Property Profits Real Estate podcast and today, zooming in all the way from beautiful London, Ontario, where we have Nicole Evans. How are you doing today, Nicole?
Nicole Edmonds [00:00:23] Very good. Thanks, Dave. How are you?
Dave Debeau [00:00:25] I'm great. So for those of you who don't know Nicole yet, she is a very sharp young real estate entrepreneur. I'm suspecting she's a bit of a brainiac as well because I'm reading her. Her biology started real estate after graduating from a degree in biology at Western Ontario Biology program. So I think that's that's a pretty brainiac kind of thing to be studying. So I'm suspecting she's a smart lady. So, Nicole, let's just jump right in the middle of this whole thing. So what is your main focus real estate wise these days?
Nicole Edmonds [00:01:01] Yeah, so that is definitely the answer to that question has definitely changed throughout my whole investing career. But these days my portfolio is mostly multifamily rental properties and passive investing. So that is the property side of my portfolio. And more recently I've moved into taking funds that I've made from those properties and lending them passively on properties. So sometimes as a money partner in JV partnering or lending and then also investing in large land development projects. So it's kind of both both sides of that.
Dave Debeau [00:01:35] Very, very cool. So how did a kid just out of university studying biology, which has little to nothing to do with real estate investing, get inspired to get into real estate? What did you say? Forget this biology stuff. Let's focus on property stuff instead.
Nicole Edmonds [00:01:52] Yeah. So it was funny. And I have to credit my mom because after I graduated from the biology program at Weston, I started working downtown Toronto at an advertising agency for pharmaceutical companies. And I came home that year at Christmas and my mom had prepared an interview with Scott McGilvray on the Marilyn Dennis show. And on the interview he was talking about how when he was in university, he used his OSAT payments to as down payment on rental properties and then could essentially retire by the time he was twenty five because he was making enough cash flow and income from that. And I listen to that, and I thought, well, that sounds pretty good, and that's something that he started when he was 20 in his 20s and I was twenty two or twenty three at the time and would have probably otherwise never thought investing in real estate was something for someone my age, not starting with a high paying job or a lot of money. But because he had done it, then I did some research. I ended up going to a free seminar. Then I went to a three day workshop and I was sold on this concept that you can buy rental properties, have them positively cash flow, supplement your income and not have to work. It sounded pretty good. So that's kind of what got me started.
Dave Debeau [00:03:10] Very cool. So what did you start off with? And and you've had a very interesting progression in your real estate investing career. You're just telling us about what you're focusing on these days. How did that all get going?
Nicole Edmonds [00:03:24] So so after that training. I was eager to buy a castling property, start supplementing my income, but I was definitely nervous. Is this too good to be true is what I was thinking. And I didn't know anything about renovation. So the thing that I started with was student rentals. I purchased one student rental. It was turnkey. I think I probably picked student rental because being in my early twenties, the idea of having tenants and being the landlord to tenants that were my parents age was very intimidating. But the idea of managing tenants who were students I could handle. So I bought a turnkey student rental. And I just wanted to say
Dave Debeau [00:04:03] to you, man, you bought one that was already up and running as a student rental. You didn't have to do anything special with it. It came with tenants included.
Nicole Edmonds [00:04:11] Exactly. I think I actually closed in the spring, so we needed to get new tenants, but that was really the only work for it to start cash flow. But yeah, no renovation. It was already it was a five bedroom student rental. So, yeah, I started with that. I just wanted to see if this works and I bought it. The rent checks came in, the expenses went out, there was positive cash flow in between. And I was like, OK, this is pretty cool. I mean,
Dave Debeau [00:04:36] so was that was it significant, positive cash flow? Because we we hear that student rentals can be great for cash flow, especially eight years ago when the property prices were a lot less there. It was.
Nicole Edmonds [00:04:46] Yeah, yeah. I think the cash flow is right around five hundred dollars per month. That was the positive cash flow after all expenses. And you write like this would have been six, seven years ago and the purchase price was close to two hundred thousand dollars for a five bedroom student rental. You rent each bedroom out for four fifty there? Definitely. It's definitely a cash flow. Strategies to go to go that route.
Dave Debeau [00:05:11] All rights reserved. Syrian rentals and then.
Nicole Edmonds [00:05:15] Yeah, so I did a couple of student rentals. It was working. And then I got some confidence and and I moved into I purchased a triplex that required a renovation. So now it was multifamily, it wasn't students anymore and it required a renovation and a refinance and then to rent out and hold. And once I did that, then I saw that, OK, this is where I want to be. For me, there is less headache than student rentals and student rental. As you mentioned, portfolio is a great strategy, but it wasn't the strategy that I wanted to go with. So I started focusing on these smaller multifamily properties and renovating them. So the BR strategy with multifamily and did a triplex, did a fourplex, I think did a duplex and kind of stayed there, went up to a five plex and then up to an eight plex. And so I've since sold the two student rentals, but maintain those multifamily properties in my portfolio now.
Dave Debeau [00:06:09] All right. So that's interesting. So why did you decide to switch from the student rentals, get rid of that and focus on those tenants that initially intimidated you in the first place?
Nicole Edmonds [00:06:20] Yeah, so the intimidation part, I think was gone now because I had some experience. Right. I understood a little bit more how the landlord tenant board worked, all that kind of stuff. And so I think I didn't like student rentals because first of all, there's tenant turnover every year and you're competing with a lot of other houses that are turning over at the same time every year. There's that. And then if you do have a vacancy or say you wanted to rent the house out in May, but you didn't get anybody, you September and you have four months of vacancy in between with multifamily properties, I started to see and I was learning and understanding that with multifamily properties, if you have a vacancy, say, in your triplex, you probably only have one unit that's gone vacant and you're still collecting income from two other units. So the risk is different. It's it's better when it comes to multifamily and then also the expenses with the with a triplex, you're collecting three rents and you're looking after one line and snow removal for one driveway. There's one roof to repair. So even the cash flow formulas just kind of they work out better when you move toward. Multifamily properties.
Dave Debeau [00:07:29] Yeah, I'm just trying to understand the big benefit of a triplex versus a student rental. So, again, what I'm hearing is it's the consistency of cash flow more than anything, because with the student rental, understand? Understood. Exactly. The challenge is there's the summertime months where you might be vacant or have a bunch of vacancies. September hits. Now you're competing with all of the other student rentals to get as many students as humanly possible at the exact same time. So there's a lot more competition versus a triplex. If somebody vacates one of the units, the other two are still going and you're probably only vacant for a max. One month we get a new tenant into that unit. But would that be.
Nicole Edmonds [00:08:13] Yeah, yeah, exactly. And when I was starting, I was very I would describe myself as a very conservative investor because I needed to make sure that these properties were paying for themselves. The income I was making for my job and the cash I had on hand was not enough to sustain these properties. If I had a prolonged vacancy or if I ran my numbers wrong, or if the repairs and maintenance were higher than I had anticipated, I needed to focus on high cash flows that these properties could completely sustain themselves without me having to put money into it.
Dave Debeau [00:08:46] Smart. Smart. All right. So. Syrian rebels, small multis, trying to get in multiple families, then where did things go so bad?
Nicole Edmonds [00:08:56] Because I started early twenties and now I'm 30, now my lifestyle and my where I'm a lot of my time has changed so well. At the beginning, I was totally focused on cash flow, multifamily all over Ontario, just wherever the numbers worked, regardless of how much time or if I had to find a new handyman in that area, it was OK, because for me, I was valuing my time much less than I wanted that cash flow. So then and also I wasn't starting with a lot of capital, so I had to joint venture partner at the beginning and use a lot of creative financing strategies, borrow down payments to buy properties or buy, renovate, pull equity out to do the next one. So a lot more creative financing stuff. So as the portfolio started to grow with multifamily properties and some money was coming back out of it, and I wanted to focus more on other other things outside of real estate in my life, I started to take those funds and lend them passively to other investors who were in a more active stage of their investing careers. So just kind of being on the other side of it and doing the land development projects, which is where I'm just taking money, putting it out there, being completely passive and silent and then collecting a return.
Dave Debeau [00:10:13] Very cool. So at what point were you able to quit the job and focus hundred percent on real estate investing?
Nicole Edmonds [00:10:22] So after about two years of investing in real estate, I stopped working full time and went to part time. And then after about another two years, I stopped working part time, which would have then been would have been two years ago. So about two years ago, I stopped. I stopped working at a job.
Dave Debeau [00:10:41] Very cool. Very cool. So I saw in your bio that one of the things you you work with are syndicated mortgages. Can you tell us what is a syndicated mortgage?
Nicole Edmonds [00:10:51] So it's where there is multiple people putting money in and lending it as a mortgage to an investor. So I've done it where I've lent to, say, an investor who's buying an apartment building. They're going to renovate it. They need financing for that time. Myself and some other investors pool our funds. That's the syndicated part. We put a mortgage on that property. They do their renovations. They then get it appraised and financed with a bank and then pay us back our money. So they're usually short term lending opportunities like one to two years. And the ones that I've done is paid between 14 and 19 percent per year.
Dave Debeau [00:11:32] And so it's kind of like bridge financing, basically.
Nicole Edmonds [00:11:35] Yeah, yeah, yeah. And I mean, there's other opportunities that I see that are longer or shorter, but. Yeah. And that's why the investor is paying such a high rate. They're paying double digit rate because they're doing it for the short term. It makes sense for them because obviously what they're making off the deal is way more than what they're paying in interest. And they're going to get it appraised with or financed with the bank and and pay a lower interest rate at that point. But that's something that I mean, it's a great tool for. If you've got some funds sitting there and you want to have your money working all the time, you don't want it sitting in your bank account to invest it out. You make 15 percent maybe while you were working on another renovation project or something and then keep your money working for you.
Dave Debeau [00:12:18] Yeah, makes sense, as I usually done through a mortgage broker. Or you set these things up yourself or how how does the structure of that typically work?
Nicole Edmonds [00:12:27] The syndicated ones I've done through a mortgage broker and those have been for bigger projects. And then I've also done because now I've focused more on some of the passive stuff. I've lent money, not syndicated mortgage, but a private mortgage to other investors who are doing the same kind of thing and very similar to what I started doing by renovating refinancing. But that's where I lend individual mortgages to those people.
Dave Debeau [00:12:52] But if I understand correctly, Nicole, so you built up your portfolio initially, multifamily properties, they've gone up in value. Now you're taking some of the equity out of those properties and investing passively in other people in their deals and making a nice spread on the difference between what you have to pay and what you're getting in. Would that be a fair assumption? Exactly, yes. Mark, very, very smart. So I know also I can't buy a little bit. You've got to experience not only investing in Canadian properties, but you've also gone south of the border. Is that correct? You've done some deals in the States. Tell us a little bit about that.
Nicole Edmonds [00:13:28] So some of the land development deals that have possibly invested in have been in the States. But in the mobile, I mentioned the plots of land that I purchased in the US. So those were vacant plots of land, plots of land in Florida, not swampland, but vacant lots of land, serviced plots of land in neighborhoods. And so that strategy is because I want this to be clear, it is completely different from the cash flow, multifamily conservative strategy. That is a speculative strategy. You're investing in it, hoping the value of that property is going to go up and you're going to cash out. So, mind you, they were cheap. They were there a few years ago
Dave Debeau [00:14:09] and they re getting them through tax tax deeds or tax leads or something interesting like that.
Nicole Edmonds [00:14:14] Or just they weren't they were actually like a large portfolio that somebody had sold and then it was split up and I had purchased a couple from that portfolio. So it was discounted at that point. But yeah, I do want it to be clear that that is not, you know, because sometimes people will reach out to me and say, oh, I heard I'm interested in doing this land development thing and I want our land banking thing and I want cash flow. Those are not the same strategy. You're making no cash flow. You're not renting it out.
Dave Debeau [00:14:42] So you're paying off because you guys still got to cover the taxes and utilities.
Nicole Edmonds [00:14:47] Yeah. So that's a small portion of my portfolio. And I mean, I think that's still it's still important to diversify, but that's not my meat and potatoes. Yeah.
Dave Debeau [00:14:55] So, Nicole, it hasn't been that long, although you've done a whole bunch of stuff in a relatively short period of time. So if you were starting all over again from scratch, is there anything that you would do knowing what you know now? What would you do differently? If you start all over again from scratch today.
Nicole Edmonds [00:15:17] That is that's such a I mean, it's a difficult question to answer because, yeah, if I was starting today with all of the knowledge and experience,
Dave Debeau [00:15:27] with all the knowledge you have. Yes.
Nicole Edmonds [00:15:29] And experience and everything, OK, I probably would have skipped student rentals and moved right into multifamily, larger multifamily. I would have skipped turnkey. I would have gone right in to buy, renovate, refinance and holding properties. And I think one of the this is probably something that slows people down is there's a lot of stress and anxiety before purchasing a rental property. And when you're getting started and my tenants late on rent, that's the first. And then the tenant pays five days later. And why did I lose sleep over that? And as you go longer oh, now I have a tenant who has caused all this damage and that stresses you out. Right now I have a tenant who says they're going to whatever. So you have all these different stresses and the bar is raised all along the way. If I could go back, I would not stress all over all of those solutions to all of them. Right. You serve the right form. You follow the process. You know, don't let it don't let it weigh on you. So that's something that if I could go back. But all those things are part of growing, you know what I mean? So it's hard to
Dave Debeau [00:16:34] it's just always it's always interesting to know because it's just a theoretical thing. Right. Because all of that got you to where you are now. So you wouldn't trade any of that for anything. Right? Because that's exactly part of the process. Right. But it's always, in hindsight, knowing what I know now, this is what I might do differently. Very, very cool. They call time flies when we're having fun. So if people want to find out more about Nicole Edwards or perhaps connect with you, what should they do?
Nicole Edmonds [00:17:01] Yeah, they can go to my website, invest with Nicole dot com. There's a contact page there. I'm always happy to share my experience and the knowledge that I've gathered. So there's yeah, they're welcome to contact me.
Dave Debeau [00:17:13] They're perfect. Now, one last question, because you've piqued my curiosity here. It says one of the things you're enjoying doing with all of this free time that you have now, thanks to real estate investing, it's working on your bus conversion. What is a bus conversion? What are you converting a bus to do or what are you converting into a bus?
Nicole Edmonds [00:17:32] I bought a shuttle bus and I with some help from some friends and family, we've taken it apart, taking out the inside and we're converting it into a camper. And I went into this with very little renovation or building experience despite my real estate experience, because I was not doing those renovations. But this I'm I'm trying to do be a part of all of it, build up all of it. And I am having so much fun learning and it's really fun.
Dave Debeau [00:17:59] Excellent. Excellent. All right. Keep up the good work. Nicole, thank you very much for being on the show.
Nicole Edmonds [00:18:05] Thanks so much, Dave.
Dave Debeau [00:18:06] All right, everybody, take care and we'll see you on the next episode. Bye bye. Well, hey there. Thanks for tuning into the Property Profits podcast. If you like this episode, that's great. Please go ahead and subscribe on iTunes. Give us a good review. That would be awesome. I appreciate that. And if you're looking to attract investors and raise capital for your deals, that may invite you to get a complimentary copy of my newest book right back there. There is the money partner formula. You got a PDF version at Investor Attraction book, dot com again, investor attraction book, dot com ticker.