Table of Contents - Sarah Larbi : How to Invest in Real Estate while Working a Fulltime Job
Dave Debeau [00:00:08] Everybody has David Debeau with another episode of the Property Profits Real Estate podcast and Sarah again, try not to say that three times quickly is very, very difficult. My special guest for today is Sarah Laurie. How are you doing today, Sarah? I'm great. How are you? Well, I'm fantastic here in Chile, OK. How are things in your neck of woods? Where are you calling in from?
Sarah Larbi [00:00:29] From Toronto. Well, actually, Oakville, which is about 20 minutes. But I just came from Hamilton. I was looking at a house and there's some freezing rain. So I like I just made it a few minutes to spare before podcast.
Dave Debeau [00:00:42] Glad you're glad we got together today. So if you haven't had the pleasure of meeting Sarah or hearing Sarah on our podcast or watching Sarah on stage, she's a very, very astute real estate entrepreneur. She built up a significant real estate investing portfolio while working full time. And I believe you got a bunch of properties under your belt before you even hit 30. Is that correct, sir?
Sarah Larbi [00:01:06] Yeah. So I'm thirty four right now. And to be buying number 10.
Dave Debeau [00:01:11] Nice. Congratulations. Sarah is very, very experienced, a real estate investor. She's also one of the founders of you guys have changed the name a few times. But the right club. Yes. In Burlington. Fantastic club celebrating the second year as of right now. And you've got your own podcast and your coaching and training people and doing all sorts of stuff. It's pretty amazing how you get all this stuff accomplished. So welcome to things.
Sarah Larbi [00:01:42] So so violations as well on your podcast. I'm so excited that you're launching it.
Dave Debeau [00:01:47] Well, you were one of the inspirations for doing this, so thank you very much. And we're going to start the countdown now, Sarah. So why don't you get us started telling us about how you got interested and involved in real estate investing in the first place?
Sarah Larbi [00:02:01] I remember going to the bank with my spouse and we literally had nothing, met with a financial advisor and she wanted to do a financial analysis, whatever they do to let you know what your net worth is. And it was our first time doing that had worked for a couple of years. And literally we thought our cars were our assets and we had nothing. And so it was actually quite embarrassing for me. I went home and started to Google literally how to get rich and how to become wealthy and how to become a millionaire. And I became obsessed because at the end of the day, you've got one life to live. And after that, unfortunately, that's it. So I really believe that I have bigger and better things that I could do and I did back then as well. And real estate kept coming back over and over. And then it took me a couple of years to convince not to also get into the game because he was petrified of having a bad tenant. And so we started with his sister and that's how we got started. Was she a bad tenant? I will refrain from any comments. I don't think she was horrible. But the sleeper that so has, as in the game, I couldn't resist
Dave Debeau [00:03:09] that question because I was working with family is absolutely the worst. That's interesting. I didn't know that, sir. So you start out with that spark. You got your first property, you've got a tenant into it. You've probably done a few different things. What do you focus on? What's your main real estate investment strategy?
Sarah Larbi [00:03:26] Yeah, I think it's changed as we got a little bit more experienced. But originally it was tenant first buy and hold to appease my boyfriend. There's lot of people that do rent to own. I prefer to hold on personally to my properties for the long haul, but because I was so petrified of having a bad tenant, I ended up actually finding tenants prior to our house. After number four and five, it became a little harder. And so we decide to buy the house and then just ask for the foreshadowings showings and close with a tenant already moving in within a couple of days. So that was originally the strategy as things became a little bit harder to find deals that were really under market. There's a lot of people that started looking in the Bramford area, which is where I am best prices got higher. So we started doing the BER and that's how we actually scaled.
Dave Debeau [00:04:11] What does BRX mean just for those folks who might not be familiar with it?
Sarah Larbi [00:04:14] Yeah, absolutely. So buy is the first be our stands for rent or rehab. The other R stands for rent and then refinanced and most important as you repeat, and it just allows you to see for the first one or two properties, but then you're able to reuse some of that down payment money to buy your next properties. Essentially it's like I'm flipping hold
Dave Debeau [00:04:36] very, very smart. Why do you like that strategy better than what you were doing before? Or I mean, you've been around the business for a long time now. Why do you prefer that strategy versus anything else?
Sarah Larbi [00:04:47] I mean, there is like your nest egg strategy and then there's the faster cash strategy and it's kind of a combination of both. I can pull out some cash, I can raise my money, and I still have the cash flow in the long term mortgage pay down and all of that good stuff that you get with it. And so it really is to me, the best of both worlds is probably my favorite strategy by far and. Also, you're not paying taxes, you're deferring them, I mean, you're going to pay them all at some point and you sell by flipping a property and selling it. Well, there's taxes involved in the allows me to pull this money out and repeat cash deferred or tax deferred, rather.
Dave Debeau [00:05:23] That's really, really a good point, because I know flipping is so popular because of all of the TV shows and whatnot that make it look sexy. But it's a hell of a lot of work and it's very, very risky. And like you say, it's basically a job because as soon as you're done one deal, you got to find the replacement. So what you're doing is you're kind of doing the same idea as a flip, but instead of selling it, you hold onto it, you rent it, you get your money out, you go to another one and you build up your wealth and your cash flow as you go along.
Sarah Larbi [00:05:54] Absolutely. You really get the best of both worlds, because to me, to build long term wealth, you've got to hold on to properties long term. That's just my opinion. Again, everyone's got their different ways of doing it. But for me, I'm looking at replacing my income. And so I've got to hold onto the properties. I'm going to make sure that the cash flow and when you're doing the burn as well as attempt, just make sure that you calculate all your numbers, make sure that you understand what the army is, the after repair value, because you need to know how much money you going to be pulling out at the end of it. And of course, there's always extra time it gets added on are extra expenses, but the calculations are important. I would say there's a little bit more room for error than flipping, but they're still very important. And I would say if you're not looking at saving for every single property or you're not wanting to JBI or do rent to own, like to me it is a no brainer to not have to use my money. I can use the bank's money again.
Dave Debeau [00:06:44] Yeah, that's very, very smart, knowing what you know. Now, if you were going to rewind a few years of your starting all over again. What, if anything, would you do differently?
Sarah Larbi [00:06:56] No one gets a mortgage broker, that would be my number one thing, because I had so by the time I had found her, I was already three in and she had to untangle the original mess. And it's so important because I originally went to the bank, the bank that I was working with. And so someone until it was a big deal, second rental, they wanted like 25 percent down. The third rental they were asking for thirty five and the terms were just not as good. I thought that's just normal. And there's no one really working with you. Right. It's like a different person every single time they're working for the bank. And so I met my mortgage broker and they actually look at your goals. They actually figure out what you're looking for with a certain amount of income. And they work backwards and they actually strategize a whole plan, because I didn't even know that there were trust companies. I didn't even know there was credit unions. Like, you know, there's so many banks and so many types of lenders and even private money that they have access to that you can really structure your steps properly so that you don't hit that financing wall. Because I have 10 properties I'm still financing, and it's because I'm working with a mortgage broker that is able to help with that piece
Dave Debeau [00:08:03] and you're able to recycle your down payment. So that makes it a lot easier, that's for sure. That's great. Sir, I know that you recently started working with people because they know you're part of the real estate club there and people see the success that you've had. And they probably probably got into it because people are asking you how the heck you're doing what you're doing. So now that you've been around so many real estate investors of different levels and experience levels, what what are some of the biggest mistakes you see people making when it comes to real estate investing? You touched on one which is not having a good mortgage broker. What else?
Sarah Larbi [00:08:38] Sometimes people just care about getting the deals and getting the next deals and they don't take the time to really analyze this deal, match their portfolio. Because to me, yes, I like real estate, but I love the lifestyle. But it's going to be it has created for me and it's going to continue to create for me. And so I think it's sometimes people just get so involved and I just I get the next deal and the next deal that they don't really see how that fits into the overall goal and their overall plan. And it could be just the house that they buy and they're speculating or they're not bidding it properly into the portfolio. So I would say that's number one. Number two, I've seen people have like a couple of houses in like Milton and a couple of houses like Peterboro and a house in like Nagara. You have to set up a whole team, like a whole new team of everybody and their realtor or handymen or plumbers, etc. just means you're going to try to find one or two areas and just really focus on that geographic area.
Dave Debeau [00:09:36] Good points, very, very good advice. All right, now that you started helping people out directly, what what would you consider to be your unfair advantage or your real estate investing superpower? What do you bring to the table? That's kind of
Sarah Larbi [00:09:50] I mean, I think part of there's maybe a misconception that investors are all old or older, older, I should say, and men. And so there is investors of all ages, women and men. And I think my unfair advantage is I am doing this at a young age and I am a woman and you don't see as many. And so it's nice to represent. And so I think if I have to pick an unfair advantage, I think that's probably the first thing I can come to mind. But what about a skill set, the skill set? I would say this could be a bad thing, too. But what I think got me here today, I do ready, fire aim instead of ready, aim and then fire. And I just go and take action. I learn and I take action. And I think that is the biggest piece is that ability to just get out of my comfort zone. Don't like analysis paralysis. Hold me back and just go ahead and pull the trigger and just get things done. And I think you learn so much more from actually doing it live and learn from those mistakes. And so I would say being able to learn nothing and then take action and then keep learning from those mistakes over time has definitely helped make sense.
Dave Debeau [00:11:03] So when it comes to your coaching and your training, what's kind of your sweet spot for your ideal client in case people are looking to reach out? So, for example, for me, I'm looking for the real estate investor that has got two or three deals under their belt. They've run out of cash and or credit to do more. They need to start working with other people's money, but they don't know how that's going to be my. Perfect client, what your ideal client, what's the big problem that they tend to have?
Sarah Larbi [00:11:32] Yeah, so I really like to work with I like to work with everyone, but the ones that I feel and we have the most connection with is the ones I have full time jobs, like I have a full time job. I travel a lot for my job. And they're like, well, how do you have this many properties? And you also have a full time job. How are you doing it? And so when somebody wants to get started or they have one or two and they're looking at scaling to nine, 10, etc., and they have a full time job, I built some really good processes, procedures, ways to screen tenants, just different things that you could do to not make it that whole other full time job. I mean, I spend two, three hours a month on my portfolio right now because I set up a lot in the beginning. And if I can share that with people that still want to work full time, because to be honest, when you've got a job, you got access to credit and some of the best terms. And so don't go out there and quit too early because it becomes a little bit harder. And I really have to work potentially with private money and different things like that. But you can definitely get some under your belt. Again, not to say if you don't if you don't have a job, you can't do it, but it just becomes a lot easier.
Dave Debeau [00:12:42] That's very, very top of mind for a lot of people. I mean, that's a huge excuse. Well, I would invest in real estate, but I work full time. I've got a family. I've got this, I've got that. Blah, blah, blah. You found a way to kind of make it all work and systematizing. So without giving away the farm, what would you suggest would be one actionable thing people could do to be able to juggle real estate investing with a full time job?
Sarah Larbi [00:13:11] Yeah, I mean, definitely setting up your power team so everybody on your team ideally is an investor, investor focused and know one another so that there's a lot of stuff that can go on behind the scenes, like if I buy a property, I'll send an email out to my mortgage broker or my realtor, obviously my accountant, everybody that's involved so that they can all work behind the scenes together. And then I just come and show up and give them a big example, number one. Number two, I think really thoroughly do a good job at screening tenants prior and spending more time doing that in the beginning so that you can have the best tenant for the property is huge. Right? There's a lot of people like that that hear the stories of those tenants from hell. And of course, you can get some better ones than others. But I actually have a five step process that everybody goes through with. The tenants don't even know that they're at step three when they go actually see the house. And so just really screening out the potential bad ones has been huge for us.
Dave Debeau [00:14:11] Is there like one little rule of thumb that you have about a perspective? Like I've heard people say you like to take a look inside the tenants current dwelling or the current house, just kind of see how they how tidy they are. Not you haven't got a little rule of thumb that you use the future.
Sarah Larbi [00:14:26] Yeah, I mean, there's so many steps. I would say, like the first step is even so on cager Craigslist, Kajiji is what we use. There's like three specific questions. If they don't even answer those questions, they are screened out right away. You cannot take instructions from reading the end of the ad. You can't come. But, you know, so there there is different tips for every single process. But I would say one of them that a lot of people don't do is one of the biggest things is find a local paralegal who's in the courtroom all day long before you hand over the keys as part of one of your last steps. So this would be part of that. No, for me is I say or these people and these people like in your book, because you're in the courtroom, have you heard of them? And so the answer should be no. But it's just an extra little chat that a lot of people forget to do and everything else could be OK. But all of a sudden they've been in the courtroom. And I don't care what the reason is in the courtroom, they can't come in my property.
Dave Debeau [00:15:20] Wow, that's smart. That's the first time I've heard that tape, so thank you very much. That's a good one. That's a good one, that's for sure. So we've got just a couple of minutes left here, Sarah. So if people are interested in finding out more about you and what you do, what would you like them to do, actually?
Sarah Larbi [00:15:37] Yeah, so they can go to my website. Sarah Larbi. So it's H.R.H. L.A. by dot com and they can go in to contact me page. There is my website information for my podcast. There is the coaching, there's everything on there and they can reach out to me that way. I'm also on Instagram, which is investors there,
Dave Debeau [00:15:58] and you have like any kind of a freebie that you can offer people to help them go. Take a look at your site. Yeah.
Sarah Larbi [00:16:05] So on the website, there is ten tips for tenant screening. It's not the whole like five steps because that is like a whole book by others. There is ten quick tips for tenant screenings that they can go and download. And then the other thing is, if there's anyone in the GTA or anybody that's listening to the podcast that would like to come out to the right club, you have not been out there. Then. If this is your first time, send me an email. Sara Sara Labi dot com. And we will add you as Dave, Dubbo's guest for one of your events, the first of us.
Dave Debeau [00:16:37] Thank you very much. And I highly recommend your real estate investing club, everybody that I meet in and around Toronto for sure. You guys do a top notch job with your real estate investment club. So it's off to you for that. And then our last about 50 seconds. So, Sarah, you're very young lady, but you've got a lot of real estate investing experience. Of all your years of experience. What would be the the biggest tip that you can leave us with?
Sarah Larbi [00:17:04] Take direction from those who you want to be like, not people that are just trying to help you like your parents if they are not in your position. So I take my advice from those that are doing what I want to be doing.
Dave Debeau [00:17:19] Good advice. Very good. Sarah, thank you very much for being on the podcast today. It's always a pleasure. And I look forward to chatting with you again, sir.
Sarah Larbi [00:17:28] Thanks very much. And hopefully we can see you soon as well.
Dave Debeau [00:17:31] Sounds good. Take care. Well, thanks very much for checking out the property profits podcast. And we like what we're doing here. Please head on over to iTunes, subscribe write us and leave us the review. Be very, very much appreciated. And if you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom Ticker.